[Management View]
Revenue for Q2 FY2026 was $35.2 million, up 24% YoY, driven by volume gains, same-customer cross-selling, and new customer door expansion. Gross profit increased 28% YoY to $8.8 million, representing 25% of total revenue. Operating expenses rose to $7.1 million, attributed to a 75% increase in marketing spend. The acquisition of Crown One Enterprises for $17.5 million is expected to be accretive in FY2026, adding $56 million in annual revenue and enhancing production capacity.

[Outlook]
Management expects blended gross margins in the low 20% range post-acquisition, with structural improvements targeting mid-to-high 20% over the next 12-18 months. The company plans to leverage Crown One's capabilities to drive efficiency and expand SKU penetration across its customer base.

[Financial Performance]
Revenue increased 24% YoY to $35.2 million. Gross profit rose 28% YoY to $8.8 million. Operating expenses increased to $7.1 million, with a significant rise in marketing spend. Net income was $1.3 million, up 11% YoY. Adjusted EBITDA increased 18% to $3.3 million. Cash and cash equivalents grew to $9.4 million, and total debt was reduced to $2.7 million.

[Q&A Highlights]
Question 1: On gross margins, do you still feel confident in the rebound in the second half of the year?
Answer: Yes, we feel good about the gross margin rebound. Chicken prices have decreased significantly, and our throughput has improved. We also have a massive, unbudgeted national buy from Costco in Q4, which is expected to positively impact margins.

Question 2: Regarding the $56 million in revenue from Crown, is it expected to grow, and will there be SKU rationalization?
Answer: We will evaluate the business and right-size it as needed. We plan to collaborate with customers to optimize SKUs and improve product quality while reducing costs. The additional capacity from Crown will help us manage production more efficiently.

Question 3: Can you recap the progress with Costco and the importance of the MVM?
Answer: We have expanded from one product in one region to a national buy. The MVM is a significant step towards everyday product status at Costco, which could lead to substantial sales growth.

Question 4: What are the differences between Crown's MAP capabilities and yours?
Answer: Crown has more equipment and experience with MAP technology, which will enhance our capabilities. We plan to learn from their expertise and integrate their processes across our facilities.

Question 5: How will trade promotion plans change with Crown's impact on gross margins?
Answer: We will balance gross margin with marketing spend, adjusting as needed based on market conditions. Crown's lower trade rate will help manage overall trade spend.

Question 6: What is the potential revenue capacity of Crown's facility, and is there significant CapEx required?
Answer: Crown's facility has recently been upgraded, requiring minimal additional CapEx. The facility's capacity and efficiency improvements could potentially double our current revenue.

Question 7: Can you expand on the success at Walmart and the evolution of that relationship?
Answer: We have grown from zero sales to nearly 2,000 doors, with strong partnerships and collaborative product development. We aim to continue expanding our presence in mass and club channels.

Question 8: How does the Crown acquisition affect planned improvements to the East Rutherford facility?
Answer: The acquisition provides additional equipment and capacity, reducing the need for new CapEx in East Rutherford. We will leverage Crown's assets to enhance efficiency across all facilities.

[Sentiment Analysis]
The tone of the management was confident and optimistic, emphasizing strategic growth and operational efficiency. Analysts were positive, focusing on the potential of the Crown acquisition and the company's ability to manage margins and expand market presence.

[Quarterly Comparison]
| Metric | Q2 FY2026 | Q2 FY2025 | YoY Change |
|-----------------------|-----------|-----------|------------|
| Revenue | $35.2M | $28.4M | +24% |
| Gross Profit | $8.8M | $6.9M | +28% |
| Operating Expenses | $7.1M | $5.3M | +34% |
| Net Income | $1.3M | $1.1M | +11% |
| Adjusted EBITDA | $3.3M | $2.7M | +18% |
| Cash and Equivalents | $9.4M | $7.2M | +31% |
| Total Debt | $2.7M | $6.8M | -60% |

[Risks and Concerns]
- Integration risks associated with the Crown One acquisition.
- Potential commodity price fluctuations impacting margins.
- Dependence on successful execution of trade promotions and marketing strategies.

[Final Takeaway]
Mama's Creations demonstrated strong financial performance in Q2 FY2026, driven by strategic acquisitions and operational efficiencies. The acquisition of Crown One Enterprises is expected to significantly enhance production capacity and revenue growth. Management remains confident in achieving margin improvements and expanding market presence through disciplined execution and strategic partnerships. Investors should monitor the integration progress and the impact of market conditions on margins.