Register for free to join our community of investors and share your ideas. You will also get access to streaming quotes, interactive charts, trades, portfolio, live options flow and more tools.
Register for free to join our community of investors and share your ideas. You will also get access to streaming quotes, interactive charts, trades, portfolio, live options flow and more tools.
pretty much Musclepharm breaks even at $50 million each quarter with current organization....and that might be what Brad considers to be the best situation ever....as it wouldn't break even prior to reorganization at this revenue.
Paying for the endorsements and sponsorships is the last hurdle to overcome for Musclepharm....when it sells enough to pay those, then the sky is the limit. Musclepharm starts making money and it can afford to advertise in television etc with colin kaepernick, tiger woods, ufc sponsorship etc.
small companies are flexible to turn around as they don't have too rigid structures...I wouldn't worry too much that Musclepharm doesn't have what it takes to turn this around.
Losing $10 million in sales cost the company close to $5 million. So, if the company gets $10 million in higher sales this quarter, then it will have a loss of around $3 million....as it most likely cut costs by $2 million through reduced product development costs, reduced manufacturing costs, reduced labor costs and no year-end bonuses to pay.
The $2.5 million investment with Capstone Nutrition will probably fall later in the year, I have the feeling that Capstone is happy with that.
So, the loss may be equal to the cost of endorsements and sponsorships for the quarter...around $3 million.
I'm actually considering adding to my position here....I don't see that many red flags as you do.
Musclepharm is sticking to the more profitable relations, enhancing them and trying to save money.
It is not granting more stocks to employees, and employees are seeing a cut in wealth until stocks rise. Owning stocks and fearing for their future in the company should align their interests with investors, and they should be motivated to work harder boosting revenues. Those that were never motivated will quit...thank you very much for doing that!
Musclepharm is a very misunderstood company.
First, it sells more products than competitors and it strives to be dominant in many product categories.
The other large companies tend to focus on a few products, and not spread their wings that far...and when they do spread their wings, they tend not to do that very elaborately. Musclepharm is a completely different ballpark.
Second, Musclepharm signs more prominent endorsers to be able to maintain a relatively dominant position in many product categories by superior branding attributes.
Third, Musclepharm has an ambition to be a global player. Musclepharm believes that if you want to succeed you need to do so Worldwide.
So, all in all, an extremely ambitious company.
Don't get discouraged by one bad quarter, companies like Quest Nutrition, Musclepharm, Cellucor....they have grown more than 1000% from their first year....and they are still growing.
They have had their ups and downs....Quest Nutrition had problems figuring out how to produce their low calorie, and dry protein bars....Cellucor has been sued for illegal substances. Life is never a straight life....but one thing do they have in common, fantastic growth over time.
So, try to understand why Brad appears to be a mad man....he knows that minor problems usually solve as long as the growth remains intact....and that is what he is telling us.
Frost still holds 60% of his stocks, Wynnefield Capital 100% of stocks and all managers 100% of stocks....not a single one of them sold at the peak, actually they added stocks.
We must assume that Musclepharm indeed is selling better than Q4, and that Vitaminshoppe, GNC, Costco, Europa and Lonestar (mom and pop and International) are the ones driving sales...and that Bodybuilding.com is hanging in there.
I think Musclepharm could do a lot better with all of the above mentioned channels with it's expanded sales organization and the expanded product categories offered....so, I'm optimistic!
$12 million in debt for a company selling for more than $175 million a year keeps you guys up at night?
Musclepharm ain't gonna lose much more than $4 million this quarter with normalized revenues and only $4 million dollars left to draw from from the bank....
Had revenues stagnated again, then there would be a reason to worry.
Lol essentially it's $5, but that's not good enough!
Whitewave Foods needs Musclepharm!
http://www.whitewave.com/
It wanted Cytosport and it didn't get it....ain't Musclepharm second best "Muscle" brand?
Not only that, both companies are from Denver, and Whitewave Foods got market cap of $7.3 billion, while Musclepharm corp got a market cap of mere $65 million.
Sec investigation aside, don't tell me that a food company is not interested in Musclepharm.
MSLP is not a $5, a $6, a $7 or $8. It's a $10 stock even with issuance of more shares to raise capital.
Fact is that Musclepharm is a very dynamic company that really is trying to do the right thing, but spent a little too much money in one quarter where revenues disappointed.
It seems like the next quarter is gonna be okay, helped by Costco, that always got MP Combat in stock as far as I can tell. Bodybuilding.com selling for more than $500 million a year, still got a few Musclepharm products in top 50....and we should expect Musclepharm to have many products in top 51-100, as Musclepharm is known for having many different products.
some business is done make-to-order....which reduces the tie up of capital.
http://www.investopedia.com/terms/m/make-to-order.asp
That said, in order to move from $200 million to $400 million, Musclepharm definitely needs more liquids to deal with larger and slower paying customers like Walmart.
Musclepharm got a creditor in Capstone Nutrition, many investors don't understand how accounts payable works.
the protein bar business worth more than $5...so, the company gotta get back to $10 and higher, sooner or later.
His stock grants are okay if he stops issuing more shares for a while.
He was very optimistic about the company and wanted security for himself and his family...it's all fair enough.
The endorsements made last year were not necessary...but they are sunk costs until Tiger retires, if he ever does so.
Musclepharm needs to look at what other successful competing companies do, down to the detail...and then try to understand why they succeed in areas where Musclepharm doesn't. And I'm not talking products....Musclepharm's products are just as good or better than most of it's competitors...it's about processes, financing, cost structures, business relations.
Even Phillip Frost needs to be scrutinized....is he only in it for own gain, what should and could he bring to the table?
Having good communication with key accounts doesn't need to cost that much...it's an attitude to be accountable and to be loyal!...and to not make a drama out of anything.
Not everything is about money...much has to do with constructive behavior.
I do see progress in strengthening key account management....which is key in running a lean organization.
Hiring an ex executive from GNC was a smart move.....talking more friendly to Ryan Deluca another. When you have some large accounts that pay well, then you should treat them the best.
To me, the most important clients are:
Bodybuilding.com
Europa
Costco
Walgreens
GNC
Vitaminshoppe
If Musclepharm optimizes the communication with these, and the adaptation to their needs...then it has a very bright future ahead of it.
Sam's Club and Walmart are very important channels too....I'm just not sure that Musclepharm got the liquidity nor that it has effectively cracked the code working with them. Sam's Club is similar to Costco....but Walmart is a completely different story. Nature's Bounty and MuscleTech have figured it out with Body Fortress and Six Stars....perhaps Musclepharm gets it one day.
These two brands packaging is extremely boring to begin with...that's something Musclepharm can do better...also finding a better name. Apart from that, Musclepharm should stay away from getting associated with Walmart as a brand, apart from protein bars and Energy drinks categories.
Fuse, SK Energy and Body Armor are not important companies...They spend too much on endorsements, got little revenue and got weak products (and not many of them). That up against some multi billion dollar companies, best of luck!
Well, Fuse is dead, Body Armor is a gallery of multiple athletes...but nobody buys it's products and ultimately SK Energy is hanging in there....but nobody really cares what it does...It's all about saving a buck, and little else.
The Marvel products by SK Energy may sell well though....but from a legal point of view, Cartoons on products that are dangerous for kids?
Musclepharm is adapting to different customers:
1) With Hardcore for Bodybuilding.com.
2) With Combat Crunch, Muscle Bar and Energy Zero for mass retailers. Initially these products will most likely be sold through specialty though, because this channel craves new products
3) With regional sales representatives to better serve retail partners within different territories.
4) With international sales offices to better serve local retail partners and adapt products to local tastes, and label them according to local laws.
5) By hiring Brian Cavanaugh with executive background from GNC to better serve brick-and-mortar retailers like vitaminshoppe and GNC, and to align branding and sales with the market
"Chromadex quality verified"....sounds like something that may work to sell products.
BPI Sports is adopting it as the first company, and I think Musclepharm should consider it too..
Chromadex doesn't sell for much yet, but this verification seal could easily become industry standard....and the industry needs it at this moment. Musclepharm needs it to convey trust to increasingly skeptic and demanding consumers.
MSLP going back to $8!
Musclepharm is not in trouble.....it is doing the right thing making a separate line for bodybuilding.com, as Bodybuilding.com wants exclusive products.
The reason that Ryan Deluca helped Musclepharm to begin with, was that it was the new kid on the block, and not widely available.
Jym Nutrition is designed for his site....what's not to like about that? BPI Sports is an interesting upcoming company too...Bodybuilding.com loves such companies.
That said, Musclepharm needs to grow on the site, or at least keep same position on the chart....because Ryan Deluca has made that mutterfaker grow like hell.
Bodybuilding.com has surpassed $500 million in revenue last year....it's a monster, and most of it's buyers are like you and I...normal guys and gals that go to the gym.
Work on Hardcore line, make it great....because this Ryan Deluca....he is in the money, he is growing!
Musclepharm should have regular meetings with Ryan Deluca, he is a very smart non-bullshit guy....and his brother works for Musclepharm.
No need for any drama though, Musclepharm has defended it's revenue at Bodybuilding.com....but it has missed out on the tremendous growth, as it has become widely available.
I want to see more of Cory Gregory on the site, more validation of Musclepharm....but it takes that Musclepharm open up to Bodybuilding.com....and don't just send a check all the time...without maintaining those important interpersonal relationships that initially got them in there.
Talk to Ryan, and give him what he wants!
it's not realistic to demand much more from Musclepharm than what it delived to shareholders last year. The company moves quite fash ahead and there seems to be some genuine drive in the ceo, even if he is known to be a little too concerned about his executive pay.
In 2014, Musclepharm expanded quite inexpensively.
Had management not diluted the stock so heavily, we would have been in a better place though...but still, 2.5 million shares (including Biozone asset purchase that ended up cheap) and a loss of $10 million from liquidity (cash and credit line) ....Musclepharm added $67 million in revenue.
Not bad at all, even if it added staff and endorsement payments it will have to pay to going forward.
So, if Q4 was an isolated debacle, and Musclepharm little by little can have the revenue climb back up while the relationship to bodybuilding.com strengthens and the protein bar category takes off....then there is hope for a little better performance of stock price....possibly getting back to $14.
Orlando is Little Brazil!
Many Brazilians live in Orlando, and it is big in wrestling and bodybuilding, along with Tampa.
Musclepharm should buy Nutrex Research....if not for business, then for fun. Check out this model representing Nutrex OMG!!!
https://instagram.com/suelasmar
Cytosport seems to have fared better than anybody else....and it has always stayed away from Bodybuilding.com as main outlet for it's products.
Costco, GNC, Vitaminshoppe, gas stations, Walgreens, Pepsi vending machines have been the favorite channels....as well as international sales.
I don't know if there is anything to learn from this but it's worth noticing.
MP combat Crunch and Muscle Bar could lead to profitability for Musclepharm. $100 million in sales is not unrealistic, and it would further strengthen the MP Combat protein powders sales.
I think they should...and both discuss sell-side as well as buy-side transaction options.
Perhaps Musclepharm should buy Jym Nutrition or perhaps it should be bought by company with similar revenues but more profitability.
The Capstone Nutrition acquisition would make a whole lot more sense if Musclepharm was combined with another company.
Glanbia and Whitewave Foods, both potential buyers of Musclepharm, have been clients of Sawaya and Segalas
you might get your $14 back if Musclepharm had a conversation with Sawaya and Segalas. At least Musclepharm should have an idea what the company's assets are worth....I would say $150-220 million net of debt....
http://www.sawayasegalas.com/resources/case_study/20141014_isopure_glanbia.aspx
It is only recently that Musclepharm has launched a protein bar, and initially only with 2 flavors.
Now it got 8 different, and I'm sure it's gonna sell those through gas stations, 7 Eleven, Walgreens, Costco and Walmart.
MP Combat Crunch is the second most popular protein bar at Bodybuilding.com...so, that project worked out well.
SPORTS, SCIENCE and being BADASS....this is what made Musclepharm great so it should get back to basics and not try to compete being like everybody else.
The bright colors, the apparel, the sports science institute and the athletes support this strategy.
Eur/USD= 1.10....the euro climbed back again, and so did the Brazilian real. This is very important as it gives Musclepharm better chances of succeeding internationally where it traditionally has sold very well.
Branding: checked
developing flashy and tasty products with mass retail appeal: checked
international sales: checked
Protein powders: checked
Protein bars: checked
vitamin pills: checked
pre workout: checked
weight loss: okay, but why not be number one in this category when margins are so great?
supplements for women: okay, but why not be number one in this category when margins are so great?
communication with investors: needs to live up to responsibilities of public company
communication with retailers: needs to be number one, or one of the very best
When stock price is high, then Musclepharm needs to combine with upcoming sports nutrition companies, or be bought. Down the road, it could be combined with manufacturing company in order to produce products at lower cost. It is all feasible as long as the board and the management stay focused....
stocks are bought in high volume at intra day dips, what's not bullish about that?
what's not bullish about Musclepharm launching 3 new protein bars, having 8 different products in total? Musclepharm can be taken seriously in this category with that many products on the market and that should boost revenue in the tens of millions.
Not only that, Musclepharm may achieve lots of praise for it's new Energy drink when it hits retailers in April....who knows, it could become the new sports and energy of choice for many college students.
I told you that you were going to go up 100%.
any price less than half of $14 makes little sense to me, as the company's strategic initiatives have been quite since it peaked at $14.
Musclepharm is merely a fast growing company adjusting to changes in product mix, retail partners, size of operation and foreign exchange....and investors should take into account, it's increased pricing power selling for close to $200 million a year.
Capstone Nutrition most likely is in desperate need of sports nutrition brand to produce for...now where the strong US dollar puts pressure for lower cost of goods sold.
probably we may reach $6.5-7.5 this week....but from there it is an open question.
I wonder why Musclepharm doesn't talk to TJ Maxx or Ross Stores though?...and howcome it doesn't have outlet stores in Dolphin Mall and Sawgrass Mills mall in South florida that are full of hispanics and tourists? (Brazilians being the largest group of tourists, and Cubans and Puerto Ricans largest group of local hispanics)
Walmart and other traditional mass retailers are cool places to sell products that were launched years ago....but the outlet format could be added to, selling whatever Musclepharm got in surplus and for products launched years ago.
I would not become too obsessed with mass retail versus niche.
Niche and smaller clients pay better than larger clients.
I have always been thought that you make the best margins on mom and pop shops versus mass retailers.
I'm sure though that the ambition is to sell these products through mass retailers, but whether it's gonna be from day one or after the products have been tested through niche channel, that's an open question.
I'm sure that the niche channel is somewhat craving for new stuff while mass retailers can sell whatever they shove in your face.
Most natural to start selling to those that have bodybuilding as their hobby, buying at GNC, web stores etc....and then later sell through mass retailers.
I wonder why bodybuilding.com is working with this guy?
http://www.jimstoppani.com/home/articles/protein-spiking?preview
It's time I filled you in on yet another dirty trick that many supplement companies use to make more money.
that's easy: There is too much private information to do so
Insiders buying would be insider trading.
no they did not! that's a frivolous lawsuit!
Jim Stoppani doesn't mention any competitor in his video regarding protein spiking....but it's not helpful to anybody in the industry, making consumers doubt the overall quality of sports nutrition products.
That said, it leads to even higher quality assurances from sports nutrition companies, eventually making consumers trust these products to a higher degree, and perhaps secure market shares in Europe now where the US dollar is so strong.
I personally ordered supplements from US when I lived in Denmark, specifically Solgar products, because I trusted the quality of American made supplements....and that was 10 years ago when the US dollar was relatively strong. Similarly, some people kept on buying popular European products when the Euro was strong because they believed in the quality of these products.
Quality of product does overcome the problem of strong currency to some extent, making the price elasticity higher.
because of Jim Stoppani's bad behavior of allowing negative comments of other brands on twitter, I have the feeling that bodybuilding.com may pull the plug and discontinue working with him.
I personally don't like him because he has stigmatized the industry, telling buyers to watch out for protein spiking, when it is a rare occurrence with whey protein at bottom prices and serious large sports nutrition companies that don't compromise on quality.
Making a big deal out of the 5% small companies that try to screw consumers, and make it appear like it's a problem of the larger companies, that's just bullshit!