MAMA

Good afternoon, ladies and gentlemen. Thank you for standing by. Welcome to Mama's Creations' first quarter fiscal 2027 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. This conference is being recorded today, June 8th, 2026, and the earnings press release accompanying this conference call was issued after the market closed today. On our call today is Mama's Creations' Chairman and CEO, Adam L. Michaels, and CFO, Anthony Gruber. Before we get started, I'd like to note that some of the statements on this call will be forward-looking statements that reflect management's current expectations about future operating and financial results. Although management believes their expectations and assumptions are reasonable, they remain subject to significant risks and uncertainties, and actual results for future periods may differ materially from what is stated or implied during today's call.

For more information, please refer to the forward-looking statements section in today's press release and the risk factors disclosed in the company's most recent Form 10-K and any subsequent reports it files with the SEC. Please also note that today's call will include a discussion of adjusted EBITDA, which is a non-GAAP financial measure. Important information, including required disclosures containing a reconciliation to the most directly comparable GAAP measure, is also detailed in today's press release. At this time, I'd like to turn the call over to Chairman and CEO, Adam L. Michaels. Adam, the floor is yours.

Thank you, Luke, and thank you to everyone for joining us today. I'd like to welcome you to our first quarter fiscal 2027 financial results conference call. Fiscal 2027 is off to another strong start. We grew revenue 50% to $52.8 million in the first quarter, grew net income 66% to $2.1 million, and expanded adjusted EBITDA 71% to $4.9 million, all while successfully lapping without repeat a nearly $10 million digital Costco MVM in the prior year first quarter. Growing on top of that comp with meaningfully less trade investment is frankly a remarkable accomplishment, and one that I believe speaks volumes about the durability and breadth of the demand we're seeing across our customer base, the strength of our brand and innovation pipeline, and the execution of our integrated three-facility platform.

We entered fiscal 2027 as a scaled platform with three facilities, a diversified and growing customer base, a fortified balance sheet, and a clear path towards our long-term vision of becoming the leading national one-stop shop deli solutions provider. The first quarter validated every element of that thesis. Before we dig into the quarter, let me spend a moment on the macro backdrop. One of the earliest lessons I picked up in my career is that catching an existing current is far easier and far cheaper than trying to manufacture one of your own. And in the deli prepared, that current is still building into what I'd call a tidal wave. Progressive Grocer just released 93rd annual report, and the 2026 State of the Industry survey validates exactly what we are seeing every day at Mama's.

Among grocery retailers surveyed, 79% said that the meat department is the most successful at generating sales. A remarkable 30 percentage point increase from last year. Said differently, in the span of a single year, meat, and more broadly protein, has gone from a category retailers manage to a category retailers expect to grow with. 77% of retailers further told Progressive Grocer that prepared foods and food service represents a top strategy for merchandising and brand enhancement, underscoring the growth opportunity this year in the fresh perimeter and prepared foods. The very intersection where Mama's competes every day. 89% said that private label and store brands are a top merchandising strategy. A 16 percentage point increase over last year, reinforcing the relevance of our dual track approach of growing both our branded and private label portfolios.

Last month, FMI came out with their annual U.S. Grocery Shopper Trends 2026, reinforced and put math to this tidal wave we're seeing. 70% of respondents visit the deli department at least once a month, and one-third visit at least weekly. In our target demographic, 38% of Gen Z and 43% of millennials buy deli prepared foods at least weekly. They're more likely to buy deli prepared foods to save money and to eat healthier, suggesting deli prepared foods tends to replace dining out more often. Deli-prepared departments offer shoppers an opportunity to explore and take a break from their everyday routines. This is what I foresaw nearly four years ago, and why this highly overqualified team we have assembled at Mama's was willing to plant those early seeds. I could tell you these green shoots have already turned into vibrant saplings.

Layered on top of these survey findings, fresh format grocers continue to capture the largest share of incremental foot traffic, with grocery stores grabbing a growing share of short midday visits from quick-serve restaurants as consumers replace restaurant meals with more cost-conscious and healthier options. Meat sales remain at record highs, with consumers increasingly viewing high-quality meats and poultry as part of a healthy diet. We continue to be in the right place at the right time with the right product portfolio, and we now have the platform to capture far more than our fair share. The last three and a half years have brought meaningful progress and laid down a durable base from which to construct a category-leading deli platform. The underlying playbook we run against, our Four Cs framework, has not shifted one iota. Starting with our first C, cost.

The Bayshore integration continues to be the clearest illustration of the structural margin work Skip and his team are driving. Sourcing and logistics are now run from a single centralized desk covering all three plants. Bayshore successfully transitioned to Mama's corporate ERP system, providing unparalleled insights across the business. Our production footprint has been reflowed to lift utilization, take out overtime, and pull more absorption through the system. Bayshore associates have leaned into the Mama's way of doing things, and we, in turn, are picking up best practices from them. In particular, the premium product know-how they brought with them is already unlocking customer doors that have previously been closed to us. I am so excited to share that we have officially moved into our new East Rutherford expansion, adjacent and literally sharing a wall with our existing facility.

While there is more work to do, additional blast freezer and refrigerated storage is currently being installed, allowing for more efficient runs, lower overtime, and better customer service. I am so proud of Shane and the team, from our project managers to line workers, who execute our major projects faster than the time before and further below budget. On gross margin, specifically, Q1 reflected some labor and raw material inefficiencies and other start-up costs associated with the launch of new packaging technologies and protein form factors that we deployed to support the introduction of over a dozen new items with major retailers in the quarter, the most ever in one single quarter for Mama's.

Bayshore's gross margins continue to improve since acquisition, and we remain on track to bring that facility and the consolidated business in line with our mid to high 20s corporate target as these new items move from launch into steady state production. Moving to controls, our second C. In an industry where food safety sits at the top of every conversation, the discipline our team is demonstrating across all three facilities is nothing short of remarkable and is nothing we take for granted. This quarter saw two successful FDA unannounced audits, and while some companies fear and dread these types of audits, the only thing our team thinks to say is, "Bring it on." Our team loves these opportunities to show our customers and the entire country what they are used to doing every single day.

For me and Skip, the best part is seeing our colleagues across facilities share learnings, highlight best practices, so their sisters and brothers can do even better than they did. If that does not describe a family, I do not know what does. An important milestone underpinning our controls discipline this quarter was the completion of our enterprise resource planning, or ERP, integration across all three of our manufacturing facilities. With Bayshore now fully transitioned onto the same enterprise platform that runs East Rutherford and Farmingdale, we operate as a single unified system for procurement, production, inventory, and sales. The benefits are already showing up in how we run the business. A faster month-end close, sharper inventory accuracy, more granular cost visibility by line and by SKU, and a stronger foundation for our analytical tools.

This integrated ERP backbone is a key enabler of the operating leverage you're starting to see come through our financials, an important capability as we continue to scale towards our $1 billion vision. A huge thank you to John and his IT team, as well as to Tony and his Bayshore team for the long hours, planning, execution, and hypercare you both partnered on to deliver on time and on budget. Thank you.

In addition to our ERP system, we've also advanced the implementation and capabilities associated with our WMS, or warehouse management system, impacting areas of labor efficiency, stock location, and inventory accuracy. We also successfully introduced and implemented the company's first ever TMS, or transportation management system, which will be a huge unlock for transportation planning efficiency, improved route and stop optimization, improved OTIF and service visibility, RFP capabilities, and carrier compliance.

Not to mention, Rebecca finally retiring her letter-sized dry erase board with a map of the U.S. Skip would have me go on and on about the tools and capabilities we have successfully implemented at Mama's Creations over the past 12 months. I hope this gives our investors just a taste of the technology we're bringing in well ahead of similarly sized companies, let alone a company in the deli prepared space. As our boys, Gregory and Alexander, would say, "We are just built different." As I have said in the past, cost and controls may earn us a seat at the table, but it is our third C, culture, that keeps us there. With nearly 600 teammates now operating across three facilities, the enterprise-wide shared services model we put in place is producing real, measurable results.

As Abbey continues to tell me, culture is not a destination, but rather a mindset that always needs love, attention, and reinforcement. Q1 saw the launch of three employee engagement, recognition, and retention programs to do just that. Grandma's Table, our first cross-facility referral and retention program. Mama's Welcome Crew and First Taste enhance onboarding and orientation processes with primo or buddy assignments for new hires. The Grandma's Favorite spot recognition program designed to reinforce culture, engagement, and positive employee experience. Yes, the customers we capture, the new items we develop, and margins we enhance are needed for a strong business. I could honestly tell you that the P&L is missing our most important ingredient. It is the team we're hiring, nurturing, promoting, that is truly the secret sauce of our $1 billion destination. Our catapult strategy, our fourth and final C, was on full display this quarter.

In addition to strong velocity acceleration and high ROI programming, we launched over a dozen new items with major retailers, including new branded SKUs at Walmart, Target, and Food Lion. Supported by the startup of new packaging technologies and protein form factors, these wins are the direct result of our continued investment in product innovation, our integrated operating platform, and our deepening partnerships with the largest grocers in the country. We expect these placements to ramp meaningfully through the balance of fiscal 2027. If I may, let me spend a moment on Costco, which continues to be a marquee example of our catapult strategy in motion. As a reminder, Q1 of last year included our first-ever digital MVM at Costco, which alone delivered nearly $10 million in revenue in that single quarter, incorporating meaningful trade investment to successfully drive household penetration and step change velocity acceleration that exceeded expectations.

The important point is that we lapped that $10 million comp on a whole company basis year-over-year, adjusting out our recent acquisition. This was without any incremental Costco programming. In other words, this is not a story of Costco growing on top of itself. This is the entire enterprise stepping up on top of last year's higher promotional base. To me, that is one of the strongest signals you could ask for. It tells us that the Costco business itself has become structural rather than promotional. The everyday item status we secured in the Northeast late last year is delivering exactly the steady state plannable volume we expected. At the same time, the rest of the business has grown into a much larger and more diversified contributor.

I forgot to mention that Chris just shared with me that earlier last week, we were told that the San Diego region of Costco, actually the last holdout to ever offer us a rotation back in 2024, has decided to take our beef meatballs on as an everyday item, the second region to confirm our everyday status. Maybe Anna Mancini really was onto something 105 years ago when she made her way to Ellis Island with her now-famous meatballs and sauce recipe. We continue to make progress against our goal this year of adding at least two new SKUs to each of our top 10 customers.

In addition to Walmart, Target, and Food Lion, we saw successful new launches across three Albertsons divisions, two new Paninis items at Weis, two non-protein items at The Fresh Market, as well as a number of new wins in the convenience and meal kit channel. I am so proud of Chris and his entire team, not just for the individual wins, but rather how they prove out quarter-over-quarter that our one-stop-shop strategy isn't just theory, but an intentional roadmap for our success for years to come. A key driver of our catapult success continues to be our commitment to quality. Our NAE, No Antibiotics Ever, chicken initiative continues to resonate with today's consumers, and we're leveraging the Bayshore acquisition to cross-sell capabilities and new products into both our legacy accounts and our Crown I customer base. Lauren and her marketing team are also delivering in a meaningful way.

Our investment in marketing and retail media continued to compound in Q1. We delivered strong returns across our top retailers while continuing to bring new customers into the brand. On Instacart, our Northeast everyday and rotational businesses carry the momentum forward. We grew total platform sales to over $1 million, with units up 34%, delivering a 5.6x return on ad spend, and 45% of our sponsored sales came from new customers. At Walmart, our branded launches went live in April, and early platform results are strong. In the quarter, attributed sales more than tripled year-over-year, growing to nearly $1 million with our ROAS expanding from $10.50 last year to $29.50, meaning every dollar we spent in Walmart media returned roughly $30 in retail sales. BJ's was another standout. Attributed sales were up nearly 10x year-over-year, and our ROAS grew nearly 5x.

The team is scaling that program efficiently, and we see meaningful room to continue. Looking ahead, with new items now on shelf across Walmart and Target, and our activation calendar running through the back half of the year, we expect this media retail momentum to continue driving trial, repeat, and branded growth. Looking to the balance of fiscal 2027, we're planning to meaningfully increase our branded sales across our retail footprint through the ramp of these new introductions at Walmart and Target, the conversion of legacy private label items to branded, and the continued execution of our strategic goal of adding net plus two SKUs in each of our top 10 accounts. Our trade and marketing investments are delivering strong returns, with digital and in-store programming generating measurable lifts in consumer awareness and retail velocities.

Looking forward, the company I see in front of me bears very little resemblance to the one we ran even 12 months ago. We now operate a scaled three-plant manufacturing footprint, serve a broader and still expanding customer roster, sit on a fortified balance sheet with meaningful firepower for M&A, and rely on a team that has demonstrated in practice, not in theory, that it can integrate acquisitions and execute with excellence against the plan. Our line of sight to $1 billion in revenue has never been sharper, and I have real conviction in our ability to compound profitable growth well into the future. I'd now like to turn the call over to Anthony Gruber, our Chief Financial Officer, to walk through some key financial details from the first quarter. Anthony?

Thank you, Adam. Moving to the financial results, revenue for the first quarter of fiscal 2027 increased 49.7% to $52.8 million, as compared to $35.3 million in the same year-ago quarter. The increase was primarily due to item expansion at existing customers, the successful launch of over a dozen new branded items at major retailers, the contribution of the Crown I acquisition, and continued broad-based growth, which the company achieved despite lapping a $10 million digital Costco MVM in the prior year quarter and meaningfully less trade investment in the current quarter. Gross profit increased 35.3% to $12.4 million, or 23.6% of total revenues in the first quarter of fiscal 2027, as compared to $9.2 million, or 26.1% of total revenues in the same year-ago quarter.

The first quarter gross margin was impacted by labor and raw material inefficiencies and the start-up of new packaging technologies and protein form factors supporting the launch of more than a dozen new items with major retailers, as well as the continued integration of the Bayshore facility. We remain on track towards our mid to high 20% corporate gross margin target as these new items transition into steady-state production. Operating expenses totaled $9.8 million in the first quarter of fiscal 2027, as compared to $7.6 million in the same year-ago quarter. As a percentage of revenue, operating expenses declined to 18.5% from 21.6% in the prior year quarter, demonstrating the operating leverage in our model as we scale, as well as intentional decisions to move some SG&A marketing investments into gross to net trade to support our new item launches.

The change in absolute dollars was partially due to the Bayshore acquisition, new digital strategies, and enhanced product marketing, new management hires, and further technology upgrades to drive actionable insights faster and deeper into the organization. Net income for the first quarter of fiscal 2027 increased 66.3% to $2.1 million, or $0.05 per diluted share, as compared to net income of $1.2 million, or $0.03 per diluted share in the same year-ago quarter. First quarter net income totaled 3.9% of revenue as compared to 3.5% in the same year-ago quarter. Adjusted EBITDA, a non-GAAP measure, increased 71.2% to $4.9 million for the first quarter of fiscal 2027, as compared to $2.8 million in the same year-ago quarter. Cash and cash equivalents as of April 30, 2026 totaled $24.4 million as compared to $20 million as of January 31, 2026.

This increase was primarily driven by improved profitability, strong operating cash flow generation, and ongoing working capital optimization. As of April 30th, 2026, total debt stood at $5.1 million. The robust balance sheet, combined with our credit facilities and strong cash flow generation, positions us extremely well to pursue the organic and inorganic growth opportunities that Adam described. This completes my prepared comments. Before we begin our question and answer session, I'd like to turn the call back to Adam for some closing remarks. Adam?

Thank you, Anthony. As I reflect on the first quarter, what stands out most to me is not any single number, but rather the way every part of our nearly 600-person team executed against the playbook. The four Cs, cost, controls, culture, and catapult, is no longer aspirational language at Mama's. They are the operating cadence by which we run the business. Cost discipline showed up in the Bayshore integration, in our centralized procurement and logistics, and in the more balanced production footprint. Control showed up in the completed three-facility ERP integration, in the expansion of our Power BI analytics, and in the food safety standards our team upholds every single day. Culture showed up in Mama's Pantry, Mama's University, Grandma's Table, First Taste orientation, and in the shared services backbone now linking all three sites.

Catapult showed up in the new customers we're partnering with for the first time, new items that bring new flavors, functions, form factors to our end consumers, and to our marketing partners that help us bring Mama's story to new-to-brand households across this great country. As I turn the page to the balance of fiscal 2027, our priorities are consistent. First, we will continue to optimize the integrated three-facility network, pulling efficiency, margin, and capacity utilization forward as our recent new item launches move into steady state. Second, we will press the accelerator on retail distribution leading into the Walmart and Target ramps while continuing to deepen our partnerships in the club channel with Costco, Sam's Club, and BJ's. Third, we'll use our strengthened balance sheet to selectively pursue accretive acquisitions that bring incremental capabilities, capacity, or customer access into the platform.

The $40 billion deli prepared foods category is large, still expanding, and remains highly fragmented. The consumer trends, fresher formats, higher quality proteins, value-oriented meal solutions continue to break in our direction. Retailers, in turn, want a partner who can simplify the deli prepared meal space, deliver consistently at a national scale, and bring genuine innovation to the case. That is precisely the role Mama's Creations is built to play, and our long-term vision of becoming the leading national one-stop shop deli solution provider has never felt more within reach. With our strengthened platform, fortified balance sheet, and demonstrated track record of execution, we are better positioned than ever to capture this generational opportunity and to compound value for our shareholders over the long term. To our team across all three facilities, thank you for your energy, the ownership, and your relentless execution.

To our shareholders, thank you for your continued trust in this story. I have never been more convinced that the most exciting chapter of Mama's Creations is the one in front of us. With that, operator, let's open the line for questions.

We'll now be conducting a question and answer session. If you'd like to ask a question, please press star one on your telephone keypad. A confirmation tone will indicate your line is in the question queue. You may press star 2 to remove your question from the queue. For participants using speaker equipment, it may be necessary to pick up the handset before pressing the star keys. One moment, please, while we poll for questions. Thank you. Our first question is from Brian Holland with D.A. Davidson.

Thanks. Good afternoon. I wanted to start with the contribution from some of the new products in the quarter. Just curious, because I thought maybe some of that was geared towards the end of the quarter. Even qualitatively, can you help understand how meaningful the contribution from those new items across at Walmart and then the new customers, Target, Food Lion, et cetera, how they contributed in the quarter? I guess where I'm going with this is, would the expectation be that revenues would increase sequentially in 2Q versus 1Q? And if not, just any caveats that I'm not thinking about.

Yeah. Thanks, Brian. I guess actually, let's call it double hit. You're absolutely right. These didn't launch till the middle to end of April. We had all the costs, right? Because we built it all out and we got them there. The cost is all in Q1, but really, very little of the revenue was in Q1. Hopefully, that gives some direction. Obviously, we expect we're already seeing it in the items. We've been more efficient, right? Where literally, I'll give you one example. Walmart, the first round of chicken items that we gave. We have three new items in Walmart chicken. The first round actually had two labels on it. That's how we originally did it. We optimized with Walmart, and now if you go into the store, you're seeing one label.

We literally cut our label costs, not just the label, remember, it's the labor, in half, and that's just the first round. We're already starting to see lower costs, and obviously the acceleration, the velocities are already increasing substantially. Hopefully, that's helpful.

That is helpful. Appreciate the color. You may have answered my second question in that answer, I'll ask it anyway, as I got on the call just a few minutes late, apologies if you detailed this in your prepared remarks. Maybe just going back right to that point on the gross margin and seeing all the costs and not seeing the revenue. I know when you and I spoke at the end of the quarter, you talked about, "Hey, the first couple of times we run these lines through, we learn a lot. We implement it, and then hopefully we improve." I guess just confirming that we are now past all of that, and we do indeed have evidence that these lines, after the first initial runs of some of the new products, that everything is operating exactly as you would anticipate or close to.

Yeah. No, absolutely. Hopefully that very hopefully colorful example on the Walmart labels is a real example that helps. Yes. Again, we'll keep getting better and better, right, Skip? Skip and I will never be satisfied, but certainly the beginnings of it. Another one, we just got new items into Shaw's, which is an Albertsons division, and it's this great shredded chicken. It's actually my new go-to lunch. It took forever, right? Is it too shredded? Is it not shredded enough? Is it too colorful? Is it not colorful enough? There was a lot of those iterations. Now that we have it, for the next customer, obviously, we don't have those startup costs. The answer is yes, absolutely. We're seeing it a lot better than we were before from a margin perspective.

We'll leave it there. Congrats, people. Great work.

Thank you, sir.

Our next question is from Eric Des Lauriers with Craig-Hallum Capital Group.

Great. Thank you for taking my questions. Congrats on the impressive broad-based growth, and now the second everyday item win in San Diego.

Very cool.

My first question here is a bit of a follow-on to just understanding the sort of startup costs of these initial new products. Could you just expand on what those costs were? Should we think of this as basically building inventory that you hadn't yet sold, or was there any new equipment that essentially had low initial capacity utilization? Just how to think about that more broadly, and then how to think about the overall sort of duration of this low margin ramp period before steady state production.

Yeah. I think that it was a combination of a couple things. We used some new technology, right? We actually used some HPP technology, which helped naturally extend shelf life. That was the first time that we've done stuff like that. There was a lot of back and forth, multiple touches. I'd say a lot of it had to do with labor, right? Us learning how to use this new packaging. I'll give you another colorful example, hopefully. In the past, with Food Lion, our chicken is in trays, right? We're used to that. We do that with other things, right? Remember all the Meals for One. This is the first time at Walmart we used sort of a see-through, because our product is beautiful, sort of a vacuum-sealed plastic, shall we call. Again, that was new stuff. We had some new machinery.

The team had to learn, right? They keep getting more and more efficient. We see the throughputs increasing a lot. I gave you examples of the labels. Yeah, there's a lot of both the packaging, the technology, the form factors. Like I gave the example of the shredded chicken. That's the first time. This is something that Crown had the technology for, but we haven't used a lot. Again, the great thing about it is these are more one-time things that obviously Anthony and I have the luxury. We're a month ahead, right, of these numbers, and we're already seeing the improvements. Huge congratulations to Skip and his whole team. The Bayshore folks are leading the charge, right? One of the things that I shared with you last quarter is we have this amazing Bayshore facility.

It's twice as big as the other facilities with almost half the volume. Guess what that meant? Guess where all the Walmart items are being produced? Guess where all the Food Lion items are being produced. We're able to improve the absorption in Bayshore, and it's going exactly as we had planned. It's beautiful.

All right. That's very helpful. Great color. Thank you for that. Just touching on Bayshore here. ERP conversion integration now complete. Certainly great to see. Those are no walk in the park. Is there anything that remains on the integration front for Bayshore? What kind of capacity does this free up for the senior management team? Is this more freeing up more time to focus on M&A, or should we sort of be looking for any step up in gross margins or operating leverage? Maybe it's a bit of all the above, but just give us a status quo on the Bayshore integration and how to think about the implications there. Thank you.

Yeah. That was absolutely the last major step. Kudos to Anthony. Anthony led the charge with John Dillon and his team. Look, it's scary, right? I've done it at a number of different places, and you don't need me to tell you how dangerous it could be. We crushed it. It was absolutely perfect. Let's keep in mind, I think I shared that this was going to happen mid to end of summer. We actually did this ahead of schedule, and that's a testament to the integration that Skip is leading in Bayshore. Look, like I said before, I'm never going to stop improving this business, but there is nothing major left to do at Bayshore. That was the last major hurdle. As my team knows, I think I'm on the road, literally the past two weeks and the next two weeks, some for investor stuff, some for other stuff.

I am a lot more confident now and a lot easier for me to travel because that last hurdle is done. Again, Skip remains the boss, and he has told me I'm allowed to leave the office now more. I feel a lot better that again, there's always more to do and will be more to do, but that was the last major hurdle at Bayshore with the integration.

Good stuff. Appreciate that color and congrats again on all the progress.

Thank you, Eric.

Our next question is from George Kelly with Roth Capital Partners.

Hey, everyone. Thanks for taking my questions. First one, another question for you on the gross margin kind of inefficiencies related to the startup costs. Are you able to quantify that? Maybe it is too hard, but is it possible to give any numbers around that?

Yeah. I think there is two sets of numbers. I think roughly, I would say there is probably somewhere between almost $500,000 to, I don't think $1 million, but in that range from a labor and raw material inefficiency. There is probably half a million dollars of, as Anthony mentioned, we made an intentional decision, and Lauren is still upset with me, but we took about half a million dollars out of marketing to put that into trade to support the new launches at Target. Target was a big promo to get things started, same thing at Food Lion. Actually at Publix also, we had, I think I told you guys, we just launched the two new Paninis at Publix. We did programming there. We definitely took some out of marketing and into trade. You guys see that.

Hopefully, you noticed SG&A as a percentage, which traditionally is in the 20% range, was in the, I think, 18.5% range. You think between those two things, that would've put our gross margin, I think north of 25%. But those were intentional decisions. As a leadership team, we feel like we made the right decisions to support our new launches and to exceed our customers' expectations. I will tell you that these new customers, way faster than I expected, are already reaching back out to Chris on what's next. Already. That's a testament to the work Chris and his team is doing to be true partners. This is not a transactional business, right? It is not about, "Hey, what's the next item we're getting in?" It's how do we work collaboratively? How do we become the partner that is high quality, right, high service?

Chris talks about it all the time. It starts, we get in with grandma quality products, and we stay and exceed with grandma quality service. That's what Chris has been able to show time and time again, that we're now collaborating with new items, with some of these customers. I think it's an incredibly great and strong ROI.

Okay. Thank you. That's helpful. Then second question from me on Walmart. I know you haven't been on shelf that long there, but can you talk to us just about the performance that you've seen so far and any kind of takeaways? Are you pleased with the velocities, et cetera? Just anything on Walmart. Thanks.

Yeah, very pleasantly surprised. Actually, the word is I'm a little surprised. Of course, Chris said, "I told you so," but the products are doing very well. The ramp up, actually, I'm terribly impressed. We're, again, the chicken items are north of 2,000 stores already. I told you we just launched 30 days ago, 45 days ago, and we're already north of 2,000 doors with the new chicken items. I love the ACV, meaning the number of doors we're in. I love every week the velocities are going up. Yeah. I feel really good with it. Hopefully, I just mentioned earlier the work that Lauren is doing to chum the water, shall we say. The ROAS at Walmart, I mean, guys, $30. I give a dollar, they give me $30 of retail sales back. That's a pretty good ROI.

I love across the board how Skip got the product together, how Chris is able to continue to drive those velocities, how Lauren is helping with the marketing. It's an incredible team effort, which is wonderful.

Okay. Great. Last one for me. Just on the quarter, was there much impact from you raising pricing at all? I guess subsequent to the quarter, has there been any kind of pricing? And that's all I had. Thank you.

As you know, right, because you've been with us from the very beginning, pricing is something we take every day. This is not a once a year type thing. We have the right pricing, as inflation, unfortunately, moves up for all of us, Chris does a great job partnering with our customers. I don't think anything I know, obviously. 90% of our sales growth was volume driven, which is amazing. About 10% of it was pricing driven. The right amount of pricing. Of course, I'll always challenge Chris to make sure that most, if not all of our customers are bigger than we are, so we shouldn't be taking it on the chin. What's great is our pricing is at the right place, that it's only a conversation of inflation.

I've shared with you guys before the research and the data that we subscribe to that gives us real-time commodity inflation, and we're able to share that in partnership with our customers every time.

Thank you.

Thanks, George.

Our next question is from Ryan Meyers with Lake Street Capital.

Hey, guys. Thanks for taking my questions. First one for me, and it might seem like this is a given, just given all the momentum you're seeing across the business with the new retailers and the new products. Adam, do you still feel comfortable with the double-digit organic growth for the year?

Absolutely. Again, Chris and his team continue to not just deliver, overdeliver for us. It's wonderful, and you and I have spoken about it, and I've spoken about it with our fellow investors. It is pretty awesome. We're sort of everywhere, but equally, we're nowhere, right? Chris is still staying true to his plus two items in each of our top 10 customers. He's done a great job already. Actually, I tell him he's not pacing himself well because he's ahead of plan. Between the seven new items at Walmart, the five new items at Food Lion, two new items at Fresh Market, two new items at Albertsons. I could go on. The new item at Target with the additional second item coming in next month or in August. No, I feel good with our continued growth, and no, absolutely.

Got it. No, that's good to hear. Just kind of circling back on your comment on the marketing dollars that were in G&A coming out, shifting into trade promotion. How should we think about that mix going forward? Was the numbers you posted in Q1 just a one-time thing? Because as you mentioned, it's below 20% of sales. Just kind of want to get a feel for that for the rest of this year.

I hope our fellow investors see. I tell you guys, Anthony and I have our hands on the wheel at all times. We knew that we were investing in these new item launches and this new innovation, and we knew that margin would be somewhat impacted by that. That's why, again, our leadership team does everything together as a team. Therefore, we knew that we wanted to pull back other places to reinvest. I'd like to stay true to that 20%. We continue to be investing in new technologies, new teammates. I'll actually mention, unfortunately, I'm not able to be at IDDBA today. If you guys remember IDDBA, the International Dairy, Deli and Bakery Association, this is our Super Bowl. Obviously I want to hang with you guys more than my fellow teammates, so I'm pretty upset.

Chris and Lauren are out there with our teams doing an amazing job. Again, they're meeting with all the top customers, highlighting a bunch of new items. You guys saw, I think, last week, Lauren sent out a press release on all the new items that we're launching, I feel really bullish on what we're doing. Anthony and I, our hands are on the wheel. When we know we're doing well, we'll lean into trade and marketing. If we know that we're investing elsewhere, we'll be able to pull it back. That's what you saw in Q1. I'd say I'd go back to our steady state for Q2 and onwards.

Okay. Got it. No, that's helpful commentary. Thank you.

Our next question is from Anthony Vendetti with the Maxim.

Thanks. Just to follow on to the Bayshore facility. Adam, you mentioned that with the extra capacity, you've been able to supply Walmart and Food Lion. How much capacity is left after supplying Walmart and Food Lion in the Bayshore facility? Then, if and when that capacity gets filled, and maybe the timeline for when you're expecting that to happen, does that necessitate either another facility or an acquisition in the near term?

Yeah. What's really wonderful, and this is why the Crown acquisition was so amazing, it was a huge unlock for us from a capacity standpoint. I would still say, as strong as Chris works hard to try to stress us out, we should be able to double our business. What we've said is we could double our revenue if we're at roughly $200 million today. We could be $400 million with this new space. The other thing, as a reminder, I think I just mentioned earlier, we just opened up. We just almost doubled our space in the East Rutherford facility also. We had a lot of foresight into what we were doing in East Rutherford with the Bayshore acquisition that I think we're good for the next couple of years. Now, that said, it doesn't slow me down one bit on what's the next acquisition.

I still believe that I'm looking for companies with their own manufacturing and distribution. That means that I will get additional capacity. The great news, unlike a year ago, before the Crown deal, we feel really good. There's definitely a lot more opportunity for us capacity-wise.

Just one quick follow-up. Any insight on the new packaging technologies and protein form factors that you have planned?

I think that we'll continue to try to be true partners with our customers. The biggest things that we continue to hear is, one, "I just don't have the labor anymore." We're listening to that, and you see the examples of like Publix, that we transitioned our bulk and kit items into our Meals for One items. That was an investment on our part, I don't know, let's call it a year ago, less, that added this new mapping technology, which stands for Modified Atmosphere Pressure. What it does is it pushes nitrogen in, pushes oxygen out, and almost doubled our shelf life on our products. Labor is important. Shelf life is a second one. I spoke about the mapping just now. The HPP technology that we're using at Walmart is another example that extends shelf life naturally.

These are the conversations that Chris and team have with our customers, that's what we try to be responsive to. I hope to continue that, again, we can continue to be great partners.

Thanks very much. Appreciate all the color.

Thanks, Anthony.

Thank you. There are no further questions at this time. I'd like to hand the floor back over to Adam L. Michaels for any closing remarks.

Thank you, operator. Thank you again to each of you for joining us today. To close, the first quarter of fiscal 2027 was, in my view, the clearest evidence yet that the platform we have spent the last three and a half years building is working exactly as designed. The flawless transition of our now enterprise-wide ERP system to ensure that what gets measured gets improved. Lapping a $10 million digital Costco MVM effortlessly and still delivering revenue growth, adjusting out acquisitions. Launching more than a dozen new items with major retailers. Expanding adjusted EBITDA 71%, ending the quarter with $24.4 million in cash, all in a single 90-day window, is not a coincidence. It is the output of the Four Cs operating system at work. The macro tailwind in deli prepared continues to outpace total food and beverage.

Our three-facility network is humming, our balance sheet is positioned for accretive M&A, and our team is executing with real conviction. The course we have charted towards national deli leadership is set, and our commitment to that destination is unwavering. As always, we appreciate our shareholders' continued support and look forward to updating you on our progress in the quarters ahead. Thank you.

This concludes today's conference. You may disconnect your lines at this time. Thank you again for your participation.