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Good morning, ladies and gentlemen. Thank you for standing by. Welcome to MamaMancini's Second Quarter 2021 Earnings Conference Call. During today's presentation, all parties will be in a listen-only mode. Following the presentation, the conference will be open for questions. [Operator Instructions]. This conference is being recorded today, September 15, 2020 and the earnings press release accompanying this conference call was issued after close of market today.
On our call today is MamaMancini's Chairman and CEO, Carl Wolf; President and COO, Matthew Brown; CFO, Larry Morgenstein; and Greg Falesnik, CEO of MZ North America, MamaMancini's Investor Relations firm.
I would now like to turn the conference over to Greg to read a disclaimer about forward-looking statements.
Thank you, operator. Before we get started, I'll read the disclaimer about forward-looking statements. This conference call may contain in addition to historical information forward-looking statements within the meaning of the federal securities laws regarding MamaMancini's.
Forward-looking statement include, but are not limited to, statements that express the company's intentions, beliefs, expectations, strategies, predictions, or any other statements relating to its future earnings, activities, events or conditions. These statements are based on current expectations, estimates and projections about the company's business based in part on assumptions made by management. These statements are not guarantees of future performance and involve risks, uncertainties and assumptions that are difficult to predict.
Therefore, actual outcomes and results may vary and are likely to differ materially from what is expressed or forecasted in the forward-looking statements, due to numerous factors discussed from time-to-time in this report and other documents, which the company files with the U.S. Securities and Exchange Commission. In addition, such statements could be affected by risks and uncertainties related to factors beyond the company's control.
Matters that may cause actual results to differ materially from those in the forward-looking statements include, among other factors, the loss of key management personnel, availability of capital and any major litigation regarding the company. In addition, this conference call contains time-sensitive information that reflects management's best analysis only as of the date and time of this conference call. The company does not undertake any obligation to publicly update or revise any forward-looking statements to reflect future events, information or circumstances that arise after the date of this conference call.
At this time, I'd like to turn the call over to Carl Wolf, the company's Chairman and Chief Executive Officer. Carl, the floor is yours.
Thank you, Greg, and thank you everyone for joining us today. I'd like to welcome you to our second quarter 2021 financial results conference call. The second quarter of fiscal 2021 was a record quarter, highlighted by revenue and net income growth as we aggressively market our plans nationwide as well as an expansion of our product line and fortification of our balance sheet.
To that end, we’re very pleased with our progress with sales increasing 28% to a record second quarter 10.4 million and net income increasing 107% to a record 0.7 million. This growth was driven by new placements, effective merchandizing and continued success of our multichannel marketing efforts.
Sales were very strong in the club store network and in packaged products, while sales in the fresh deli and hot bars were delayed due to COVID. The fresh deli and hot bar businesses is recovering slowly and we expect to be back to normal later this year. Overall, sales and margins were very positive.
With business slowly returning back to normal, we announced new customer authorization both in terms of new locations and expansion of existing placements at several major nationwide retailers. We expect the number of new placements to occur in the second half of fiscal 2021, continuing our sales momentum.
Our activity in food service, direct to consumer markets and an exportation account were temporary halted due to COVID. We now are beginning this activity again and expect to see significant progress later this year.
Our projections for the year have been altered to reflect this, but overall they remain very strong for the year within our existing supermarket client base. We expect a record year in sales and earnings. However, we caution that with today's continuing evolving macroeconomic landscape, accurate forecast in the future can be difficult.
Our successful multipronged marketing efforts include radio campaigns, social media efforts, and continued work with QVC. I’d like to touch on a few of these now. We continue to see success in our SiriusXM radio advertising campaign, as evidenced by our launch of six campaigns in calendar 2020. We launched a major new 11-week campaign in May, which ended in late July. The SiriusXM platform distributed and estimated 4,000 MamaMancini's commercials on all major talk and news shows.
Operating expenses totaled 2.4 – sorry, wrong page. We’ll get to that in a minute. We find Sirius a cost effective way to drive sales across various geographic locations with current and new customers of our products. On the social media side of things, we continue to maintain a robust reach engaging new customers and encouraging repeat purchases. To date, we have over 300,000 likes and continue to geo-target likely consumers who live within a 5-mile radius of specific retail locations.
As an example, we are presently using this medium to introduce our new pasta bowls in public supermarkets in the Southeast. Our QVC efforts have seen record success as well with Dan Mancini live pitches driving impressive sales on their platform. We have recently increased our on air presence notably and have seen encouraging growth as a result. As many of you are aware, QVC is a large direct to consumer marketer and is available in over 100 million homes throughout the U.S.
COVID-19 was a challenge for the company but we were able to efficiently run our operations without pause. Fortunately, we were able to install safety measures significantly before our peers, which we believe helped mitigate the effects of the pandemic. We also dealt with higher beef prices in the quarter where we are seeing this begin to return to normalcy again. We were able to raise our prices, which, when combined with plan efficiencies, have allowed us to weather margin erosion satisfactorily.
Now before going further, I'd now like to turn the call over to Larry Morgenstein, our Chief Financial Officer to walk through some key financial details from the second quarter of 2021.
Thank you, Carl. Revenue in the second quarter of 2021 increased 28% to a second quarter record of 10.4 million as compared to 8.1 million in the same year ago quarter. Revenue for the first half 2021 increased 39% to 21.5 million as compared to 15.5 million in the same year ago period. Revenue growth was primarily a result of increased sales through placements with both new and existing customers.
Gross profit increased to 3.2 million in the second quarter of 2021 or 31% of total revenues as compared to 2.7 million or 33% of total revenues in the same year ago quarter. Gross profit increased to 6.9 million in the first half of fiscal year 2021 or 32% of total revenues as compared to 5.1 million or 33% of total revenues in the same year ago period. Gross margins decreased due to temporary higher beef prices, partially offset by improved plant operation efficiencies.
Operating expenses totaled 2.4 million in the second quarter of 2021 compared to 2.2 million in the same year ago quarter. Operating expenses in the first half of fiscal year 2021 increased by 25% to 5.2 million as compared to the same year ago period. As a percentage of sales, operating expenses in the second quarter of 2021 decreased from 27% to 24%. Operating expenses increased primarily due to increases in rate and commissions directly related to higher sales.
Net income for the second quarter of 2021 grew significantly to 0.74 million or $0.02 per share as compared to a net income of 0.358 million or $0.01 per share in the same year ago quarter. Net income in the first half of 2021 totaled 1.6 million as compared to 0.7 million in the same year ago period. The increase in income was primarily attributable to an increase in sales, reduction of operating expenses as a percentage of sales and decreases in interest expenses.
Cash and cash equivalents as of July 31, 2020 was 1.7 million as compared to 0.4 million at January 31, 2020. The increased cash balance as of January 31, 2020 benefited from 1.5 million of proceeds from the exercise of warrants and 1.5 million in cash flow from operations, partially offset by a pay down of debt as the company reduced its debt by 1.4 million fiscal year-to-date. We do not anticipate raising additional capital and are confident that the cash on hand combined with our cash generated from operations each quarter is sufficient to sustain operations as we grow.
That completes my comments. I’d now like to turn the call over to Matt Brown, our President and Chief Operating Officer. Matt?
Thanks, Larry. While I thought fiscal Q1 2021 was going to be a one and done with regards to the COVID-19, the effects of the pandemic did linger throughout Q2 2021. Despite this, the plant continued to produce strong numbers as was evident from the record revenue generated for the quarter and with the guidance of our consulting team, we were successful in lowering our labor costs as a percentage of revenue by 2%.
This was critical as the labor savings helped offset, as Carl mentioned, the higher than average raw material costs centered mostly around ground beef and sausage prices. The plant's product mix continued to be focused on the heavy demand for our prepared kit business and direct to consumer business driven by QVC. The increase in business more than made up for slower sales to our bulk deli and hot bar customers.
During this quarter, we saw the successful launch of our newest kit, a lasagna roll-up and three new product offerings on QVC. Each of these new offerings required proper planning, procurement and staffing to manage the new launches while maintaining efficiencies.
The plant – let's be honest. As many of us have been spending a lot of time at home the last few months, we've looked around at ways to enhance our surroundings. So the plant was no different as we spent a good part of fiscal Q2 reviewing layouts and proposed capital investments to better manage our packaging room.
Machinery has been purchased and we anticipate the changes to take shape by the end of fiscal Q3 and moving forward. COVID-19 has delayed what normally would be our annual safe quality audit or SQF audit, as I'm usually talking about, and preparing at this time of year to discuss results to our shareholders from these audits. But I can tell you that we anticipate having the audit sometime in early fiscal Q4. I expect nothing less than excellent scores from this audit as we have continued to educate our employees on good manufacturing processes and OSHA safe manufacturing practices.
In summary, the plant continues to see record production numbers and labor efficiencies. All we're waiting on is a full return to normal with regards to our raw material costs and implementation of our ERP software system, along with the aforementioned key equipment for our packaging room to move us to the next level.
We look forward to a new and exciting business on the horizon for fiscal Q3 and Q4 and look forward to tackling any challenges that come our way. We have proven we can handle the increase in sales and we continue to do so in a safe and efficient manner with the same dedication to quality that we have always put behind the MamaMancini's brand.
At this point, I will turn the call back over to Carl for some final notes before wrapping up the call for Q&A. Carl?
Thank you, Larry and Matt. As I noted in my opening remarks, we continue to execute on all fronts that have laid the foundation for an incredible year. I am proud of the progress we made in the second quarter and would like to thank our talented employees for their continued execution, enabling our sustained growth in this changing world. We look forward to continue revenue growth and margin expansion throughout the year, creating sustainable value for our shareholders as we approach a potential uplisting in late 2020 and 2021.
With that, I'll turn it over to the operator. Operator?
Thank you, sir. We will now begin the question-and-answer session. [Operator Instructions]. The first question today will come from Howard Halpern of Taglich Brothers. Please go ahead.
Congratulations on a solid quarter. In terms of the new authorizations that you recently announced, where should we model in the bulk of the revenue coming in from the initial [staffing] [ph], Q3 or Q4?
The ones we announced would be Q3, because those are where we actually receive purchase orders. We’re not announcing new authorizations on where they haven't given us orders.
Okay. And could you give us a little breakdown on existing customers versus the new placements that have occurred for the quarter? Are you seeing existing customer growth?
Existing customers are very strong in club store and packaged foods. Some of our packaged foods are sold in the prepared food section and in pasta bowls. However, hot bars and some deli - prepared deli foods are slower and they are starting to come back. We don't know the exact date. They'll come up with some ideas how to handle that with screens and servers. So anyway, on the two are about a trade-off on one another.
And just in terms of the beef prices, what type of margin relief should we see in the second half for gross margin just based on beef prices returning to normal?
I would say you're going to see about 2 points and that will be in the fourth quarter; more in the fourth quarter than in third quarter.
Okay. And in terms of – I know you're just starting to ramp up again in the food service portion that was put on hold, but could you I guess go over what you envision a typical food service customer requesting? Is there going to be any changes that you have to make to the plant to fulfill the customer requirements? And again, what do you envision as the first customer that will lead the way in the food service industry?
We think it will be in the Italian food field through either sandwiches or pizza or Italian food restaurants, also it could be institutions such as hospitals, theaters and so forth. However, I want to caution that it's going to take a while. Everyone – there’s still havoc in that segment of the economy. They're just getting back. They're getting back to normal. So it's going to be a while.
Okay. And does that even include the convenient store area? Do you lump that in with the food service industry?
The convenient store is very active and we have a number of proposals out. However, I cannot predict when that will happen. But that’s very promising.
Okay. And in terms of how many warrants I guess you have outstanding left? And do you anticipate most of them being exercised or converted into common by the end of fiscal year?
The warrants, about 4 million plus warrants are outstanding and they are worth – the stock has a valuation above the conversion price. They expire by the end of the year, calendar year. So we expect them to be redeemed.
Okay. Well, keep up the good work and keep it moving forward.
Thank you.
[Operator Instructions]. The next question comes from Oliver Colombo, a private investor. Please go ahead.
Yes. Good morning, Carl. Congratulations on the very good quarter.
Thank you.
I have a question regarding your Beyond Meat partnership. It seems that yesterday Beyond Meat’s announced that they were launching their Beyond Meatballs that will be rolling out nationwide in grocery stores like Whole Foods, Stop & Shop, Sprouts, Kroger, Albertsons and a few others. Are these the products that you have partnered with them for?
No. These are raw meatballs. Ours are fully processed, cooked product and in sauce. So it's totally different products. We have been aware of this. So I'd like to point out that our agreement with Beyond is non-exclusive. So we can also source other plant protein and they can sell to whom they like as well.
Okay. But when do you plan to launch yours then?
Our own products or --?
Yes, based on their --
Well, it has nothing to do with them. That has no effect on our plans what Beyond is doing in the fresh section; totally different customers who buy fresh meatballs. It’s like Beyond is selling fresh chop meat.
Okay. That was only the question I had for you. Thank you very much, Carl.
Okay.
This concludes our question-and-answer session. I would like to turn the conference back over to Carl Wolf for any closing remarks.
Thank you, operator. As a final note, once COVID-19 subsides, we will continue to be active in attending top investor conferences and investor non-deal road show marketing on both coasts of the U.S. In the meantime, we will continue our efforts on a virtual basis. If interested in scheduling a meeting with management when we are in your region, please reach out to our IR firm MZ Group to arrange.
Thank you again for joining us today. We look forward to continuing to update you on our progress. Thank you, again.
The conference has now concluded. Thank you for attending today's presentation. You may now disconnect.