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Successful protein bar companies tend to grow fast and to become very profitable.
Just look at Clif Bar & Co, where the founders owned 100% of their business until they gave 20% to employees.
Same thing with Quest Nutrition, that essentially is owned by founders.
There is only one explanation to why these founders retained ownership....and that is that this segment is highly lucrative.
Quest probably sells for $50 million per quarter now.
The $82 million revenue was a number for 2013....and from what I observed here in Miami, Quest penetrated wide and broad.
The same thing could happen to Musclepharm.
I don't because I bought more stocks today.
The company got a lot of things going for it....
Through niche sports like UFC, golf, wrestling and lifting....Musclepharm is working hard to create awareness at low cost.
Same thing with football....Musclepharm got some initiatives that aren't gonna cost much....but can be used in creating awareness and buzz about the brand.
At the same time, Musclepharm is spitting out new targeted products for the niche market and for the mass market.
Musclepharm doesn't look like or smell like a quitting operation....Nobody is giving up there.
Many times you see executives of disstressed companies that just pray and hope, and pretty much don't change anything when needed.
Musclepharm adapts and keeps on going strong
Musclepharm obviously cannot afford not lowering S G & A, so unless they are all walking around in a daze from smoking funny herbs and being shocked by the stock market response...that's not the case.
there have been layoffs....and, the glassdoor reviewer was clearly upset about it...for obvious reasons.
That said, Musclepharm cannot lay off everybody with the higher complexity of the company....I'm sure though that many put in a few extra hours of work to make the company pull through the current cash strapped situation.
I think it's gonna be healthy for Musclepharm to be influenced with some hardcore Mormon values up in Utah.
The people of Utah, the Mormons pretty much think and work like Scandinavians and Germans, ethically correct, community like and effectively....I think that's something that's been missing in the current culture of the company..
Thumbs up for Utah...thumbs up for a company with growing earnings versus one with growing losses.
the glassdoor report is real...let us not get carried away.
It states that the company is struggling with payroll....and that was exactly what the company did at that point in time....So, no short sellers had anything to do with that.
Had I read it before quarterly earnings announcement, I would definitely have sold my stocks back then.
The executives at Musclepharm really don't seem to include employees much in the upside of the company...it looks to me like bodybuilding.com is run in similar fashion as well.
Baseballplayer thinks it doesn't matter...I disagree strongly....The complexities of becoming a company with $200 million in a few years take a team of many competent people...it's not just the work of a few executives and board members.
Interestingly enough, the owners of Clif Bar & Co acknowledges the importance of it's employees...by giving them a 20% ownership in the business....and I'm sure that money didn't just go to the Ceo and to other top executives.
I shouldn't have told anybody about that....but, it's a wakeup call to executives not to be so damn arrogant to investors and employees.
It's time for the executives to really become frugal with spending and organize themselves in cheapest and most effective fashion.....There is no time for field trips to Ohio at this stage.
Just because you are close to a big score...that doesn't mean you scored yet.
The executives do need to come down from the pedestal though....like I said, key executives dispersed all over the map of United States makes no sense.
Even in a small country like Denmark, you don't have one executive located in Aalborg and another one in Copenhagen even if it's only 1 hours flight apart.
"Cory Gregory wants to be close to his family" Hey buddy, you are making a million dollar a year on some exercise videos and social media content!
I understand you need out-of-town manufacturing and regional warehouses....because we live in a big country....and I understand you want to have some office near billionaire Phillip frost that is some genius on how to succeed as a small company....but when it comes to key executives, you cannot operate from more than two locations. This is particularly true if Musclepharm is gonna get integrated into Capstone Nutrition....
Ohio gotta go...that's a complete waste of corporate money and it looks terrible to investors. "Everything is one the Internet today"....well, your flight from Ohio to Denver was not on the Internet buddy....If the executives cannot stand being close to each other for prolonged periods of time, I wonder if we got the right team of people. That doesn't sound like a team to me.
When you got a team and nobody talks too much evil shit about each other....then you can accomplish a lot. Everybody being dispersed so widely over the map, that may work initially to foster undisturbed creativity....but now, the company needs to make some money.
Buy a cottage in the rockies for creative thinking alone....but the executives need to be able to give each other one big man hug every fcking day.
I rather not comment on that....but search the Internet for one former disgruntled employee that wrote something mid February.
Brad might not remain the CEO of Musclepharm after the acquisition.
I wouldn't be surprised if the CEO of Capstone becomes the future Ceo and that Brad gets some responsibilities for product and market development along with Estalella.
I assume that Capstone Nutrition did give Musclepharm some relief on the Accounts Payable....perhaps close to the $2.5 million
Also, based on indication of layoffs...we should see some signs of improvement in profitability pretty soon.
how did the Seekingalpha writer get the account number to the ANB loan?
Arnold Schwarzenegger does, so why shouldn't he do it?
It's working with, not working for....Tiger Woods will never work for anybody, but he will work with somebody.
You will work for anybody...because you sell your ass to the highest bidder with no strings attached.
Cheers!
Was that written by a drunk?
Combat Crunch was number 22...but you are right about Combat Crunch being successful.
Just look at where it is placed at GNC...it is placed at the very top shelf because it's a top seller.
Quest Nutrition is in a crisis....I think the products are great but the packaging is lacking appeal to men...so, it's probably turning into a woman's product while Musclepharm Combat Crunch got more of a masculine, football, ufc and American snack product look to it.
Musclepharm is adjusting to a new phase of increased revenues from mass market products....and hopefully sustainable revenues from specialty segment
You don't even know what is a leveraged buyout....You need an investment bank to finance the deal and some assets worth some money.
Musclepharm should be worth at least $120 million and Capstone Nutrition should be worth at least $160 million with $320 million revenue.
Musclepharm committed to Capstone Nutrition with $90 million yearly revenue contract, and Capstone Nutrition committed to Musclepharm with warrant and option to buy, tells me that HIG from Miami is gonna finance this deal.....
Tiger Woods better not disappoint now, because Energy Zero surely needs his help.
Actually, I have a feeling that Tiger Woods likes Nike and Musclepharm the best of all the companies he endorses.
He loves Nike for it's professionalism, loyalty and the load of money not the least....but, he likes Musclepharm too....because I think he got some kind of fetish for working out....and he would love to work for Musclepharm past his career in one way or another.
Nike and Musclepharm are all about sports, that's the attraction to him...because he could have chosen any other company to sponsor his golf bag than Musclepharm if he wanted to.
it's a good business with Energy drinks....unlike what some poster claimed here, that it's only the big beverage companies and breweries that can compete...this business is open to anybody because of the high margins. A soda costs like 20-35 cents at retail and a beer at little over $1...Energy drinks sell for $1.5 to $3.5 a piece and they cost less to produce than beer.
Going forward, Musclepharm needs to work on it's reputation.
I believe the lawsuit and the SEC investigation are starting to become old news in this fast moving sports nutrition World, which is good....Still, management is planning some sort of leveraged buyout of Capstone Nutrition, and it doesn't tell us that many details. It offers no Q & A at conference call during a period of disappointing sales.
What was Brad so mad about? couldn't he have called analysts and institutional investors prior to the conference call, to agree on questions asked?
You get the impression that Musclepharm doesn't really like us investors that much.
BPI Sports comes from Hollywood, Florida...what a surprise! The product names and marketing are meant to mislead consumers to believe their products are the real deal....when in reality, BPI Sports is just another sports nutrition company with an advertising agency and an out-of-town contract manufacturer, and nothing else.
Might be that Musclepharm uses Zimmerman advertising agency as well (it seems like it)....they are suppose to be really good....but from what I see at BPI Sports right now....I'm not too impressed.
The Funn Bar is a cool product though....Musclepharm should get such a low calorie candy product as well. Hulk Hogan is a lot of fun too...
I do like some of Cory's initiatives though....I think that his support of social medias for lifting is a good idea, considering the Arnold Iron brand is positioned towards lifting.
apparently, Musclepharm is working on some golf fitness project too with NBC...that's a good idea too, given the Tiger Woods endorsement.
It's hard to change the company structures, but at some point, the company just needs to come together geographically to coordinate activities more effectively.
Musclepharm should simplify it's operations. It gotta be hard to cut costs when you spread your company much wider geographically than what is normal for a company that size.
I'm not sure Musclepharm gonna change much else than closing the laboratory in California and move it to Utah.
You could argue that many of the different operations aren't highly interrelated...but from an administrative viewpoint, it gotta require more executives to run a small company effectively with 10 different locations...it's just hard to supervise and coordinate activities within such a company.
I have a feeling, that it makes no sense locating marketing services in Ohio....those activities should be in Denver and Miami, where it can be coordinated well with advertising agencies and sales operations.
The problem with a leveraged buyout of too much business is that it may cost us lots of dilution down the road....and that it may not be financed with the lowest interest while Musclepharm is struggling with revenues (as it is right now), and while Capstone Nutrition is struggling with stronger US dollar.
could Musclepharm make it with HIG assisted leveraged buyout?....sure it could, but it's risky for stock price.
It's a matter of high risk high return potential. The potential lies in Musclepharm developing more products and acquire other brands to manufacture.
Is this money flow coming from Colombian drug money as proposed by learningcurve? could be, it will be financed with money from Miami, so there is a theoretical probability..LOL!
Musclepharm
Musclepharm told us at last conference call (with Q and A) that it was looking for a vertical integration solution for each market.....now with the dollar 20% stronger, it decides it is gonna go all in in America????
If I were Musclepharm I would take a very close look at the Tennessee plant of Capstone Nutrition.
The question is whether Musclepharm really needs this?
Because of management's refusal of talking at conference call, I fear that somebody is trying to break even on a bad investment by offering a leveraged buyout financing of Capstone Nutrition.
Musclepharm will manufacture like 25% Musclepharm products and 75% products under contract for other supplement and sports nutrition brands. Much more liability, and much more risk than what Musclepharm got right now.
If Musclepharm could buy the Utah facility, without the Tennessee facility, then I might end up being a lot happier investor. Musclepharm should be able to do that as a leveraged buyout if the facility is a money maker.
the lease will expire in August as Musclepharm has been evicted from the place per settlement with CoCrystal...so, don't worry about lease agreement being too expensive.
I agree, that was a lot of nonsense.
Musclepharm told us during conference call that the revenue from the Biozone assets "this year" already had surpassed what it paid for them.
Whatever it paid for the Biozone assets has nothing to do with revenues, so, it was a silly statement made by Musclepharm.
The year Musclepharm was referring to was clearly 2014 and not Q1 2015, as assumed by PanchoJimenz....so, lots of misunderstandings by Musclepharm and PanchoJimenz....
Nature Sport bone and joint is a high margin product with cheap ingredients imported from China and a proprietary chemical composition of the final supplement product.
The gross margin could easily be as high as 70-90%.
http://www.4-traders.com/MUSCLEPHARM-CORP-15867051/news/Musclepharm--Trademark-Application-for-NATURE-SPORT-BONE--JOINT-Filed-19025110/
From Capstone Nutrition's Tennessee operations:
http://in-ingredients.com/ingredients-lanconone/
"Musclepharm wants to become similar to Schiff Nutrition...".....hmmmm!
everybody has been doing this for the past 3 years.
Hotels are refinancing their mortgages paying out the money to partners and employees.
Public companies are issuing corporate bonds paying out the borrowed money to shareholders and employees.
When a company borrows money to pass it through to the owners, the equity goes down.....when the equity goes down it becomes more affordable to a potential buyer....but it also becomes less solvent....which means the company needs a buyer that will strike a deal for sure. This could explain why Capstone gave Musclepharm warrants for 20% of the company and an option to buy the remaining 80%.
because Capstone Nutrition's credit is better....so, Musclepharm can purchase the company for $1 after the company has paid out a dividend equal to the money borrowed.
Musclepharm doesn't want Frost or anybody else from Miami to pick up the pieces of it's business in bankruptcy court though....so, paying a fair price for Capstone Nutrition is very important.
In my fair assessment, a fair price would be where H.I.G didn't make much money on it's investment in contract manufacturing.
This is definitely an investment you would like to offload soonest possible given the strong dollar and the rising interest rate....so, any positive return is an excellent return imo.
I hope that Musclepharm can make a deal with Capstone Nutrition....but it gotta be on the right terms....and that is not $200 million, and that is not assuming any responsibilities for any debts apart from the financing of the deal (whether done by borrowing by Capstone Nutrition or done by borrowing by Musclepharm).
The Post Holdings' acquisition of Dymatize cannot be used as a reference to what Capstone Nutrition is worth, because that acquisition was made when Post Holdings held good value......and when everybody was believing in manufacturing in America.
Even with the cost of energy at all time lows....nobody wants to manufacture in America right now.
The Canadian dollar is low, the European Euro is low....and the Swiss, the Brits, the Chinese and the Americans all want to invest there right now....so, a US based pill manufacturing plant is not something there is a long list of buyers for at any premium.
There might be some psychological advantage to producing bodybuilding supplements in America....because the Internet is full of bashers that could put down your product if manufactured outside America.
This is a mere psychological issue because manufacturers from any European country, even Poland and Turkey can produce at same standards as any American manufacturer.
Most Americans think that the American system with the many regulations and the many lawyers warrant more safety. It's like the roads in America, in America there are 4 times more people killed in the traffic per 100,000 compared to Europe.....yet, the Americans think they are safer.
a while ago I spoke to a Danish girl that runs some pastry shops down here.....and she buys her fresh pastry in Denmark and according to her....that's a good business. LOL
If it pays buying fresh pastry from a highly unionized country like Denmark with some of the highest salaries for bakers in the World...Then go figure, how competitive Americans are!
Another example is the Danish packaging company my dad works for (which is owned by Mexicans by the way)....and his company is selling a lot to American food companies right now....because the US dollar is so strong.
America cannot compete on anything....manufacturing in America and you definitely need to have your head examined.
Well, just take a look at Detroit, Cleveland and towns like Reading, Pennsylvania or Camden, New Jersey....so much for US manufacturing.
You can move the manufacturing to Tennessee, to South Carolina, to Utah that are less unionized and less liberal than Northern States.....but eventually it just doesn't pay....and particularly not when the dollar is hitting the roof like now.
$160 million net of debt would valuate the company at approximately 0.5 to revenue....
The warrants must be free because paying $200 million for a US based contract manufacturer with 320 million revenue where approx. 30% ($90 million) depends on Musclepharm, that seems completely unrealistic to me.
The contract manufacturer business could have been good if the dollar had remained strong but everybody is looking for suppliers from outside America right now....essentially making this an unwanted asset at the moment.
That Penske Logistics building in Tennessee may very well become empty again if H.I.G. and Musclepharm don't work out a workable deal.
This is most likely what's gonna happen and most likely Frost is the architect behind it.