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I saw that and don't like it. What's in the new 8k, anyone check it yet?
TRTC
We received a US patent this morning and minimal movement????
MATN
Lol, don't hold your breath. Premarket sales on L2 already gone through at .42, ask at .425 and thin up through .48...
TRTC
It definitely won't drop that low with all the approaching catalysts in the next few weeks lol.
TRTC
Exactly. Collecting on stop loss orders and inciting panic selling. Then run it back up. That's how they bank. I'll happily pick up some more high 3s or 4s while they're at it though, depending if it gaps up Mon.
TRTC
Typical Friday moves from traders who don't like holding over the weekend. I expect positive movement to resume next week and leading into election season...
TRTC
CEO has said twice in last few months no need for RS and he said it wouldn't make sense right now. I don't see the filings as a big deal at all...
TRTC
Wow. Continued upward explosion imminent.
TRTC
Exactly. Looking good, people trying to get in on the cheap before launch with the approaching catalysts. Big buys coming in on L2; 168,000, 50,000, 20,000, 10,000, etc. Resistances continue to be broken and the uptrend continues...
TRTC
Any known catalyst for this move?
TRTC
Thanks for posting. Yet further confirmation of what the CEO has said himself twice in the last 2 conference calls...no RS anywhere anytime soon. People still yelling this are doing so for obvious reasons.
TRTC
Agree completely and have been saying the same thing. The CEO himself said in the last 2 conference calls no RS, and said it would make no sense without need to uplist...which will be no time soon since NASDAQ doesn't allow MMJ stocks currently, as was also pointed out.
TRTC
What is the catalyst today??
Also, why are people still talking aimlessly about a RS when the CEO personally said in the last 2 conference calls no RS plans at this time?
TRTC
What would the catalyst be?
TRTC
100% agree.
TRTC
You can look at it from 2 different angles on terns of good or bad. Rescheduling means big pharma will move in and take over for one. Regardless, this announcement was somewhat of a surprise, and the movement of the stock has not been moving based on possibilities of rescheduling. It is from upcoming earnings, acquisitions, and quickly expanding business.
TRTC
The share price for TRTC has to do with the business progress they continue to make, not this DEA decision (which we'll get the official word tomorrow). It will no doubt happen at some point, but the TRTC pps is not moving or based in any way on that decision at this point. That's an independent and separate issue.
TRTC
Well, I'll say this. They are actually much better than I anticipated them to be and was bracing myself. I think the new CEO is doing a good job at restructuring as reflected in the slashed overhead costs for everything as outlined. However, the big picture is that I'm very disappointed at how MSLP has unfolded from the recklessness of prior management who really dragged the company down. Things would have been so much different at this point in time had management not been so selfish and greedy. I underestimated how reckless they would be. It's a sad story for what should have been a leading company with awesome products at a much higher valuation, and perhaps uplisted had they not been so incompetent. I just hope the new CEO can keep making the positive restructuring he has been to restore shareholder value, or perhaps be a target of acquisition from a competitor with shareholder benefit of being folded into the new parent company. The bottom line is that I'm most disappointed in myself for not selling out when I was in the green, or at least at even. The typically penny stock regret...
MSLP
PR Newswire:
http://www.prnewswire.com/news-releases/musclepharm-reports-2016-second-quarter-financial-results-300311438.html
DENVER, Aug. 9, 2016 /PRNewswire/ -- MusclePharm Corporation (OTCQB: MSLP) ("MusclePharm (MSLP)" or the "Company"), a scientifically-driven, performance lifestyle sports nutrition company, today announced financial results for the quarter ended June 30, 2016.
Operating and Financial Highlights for Second Quarter 2016 (as compared to Second Quarter 2015):
Reduced net loss to $4.2 million from $7.0 million;
Inventory reduced by 53%;
Cash more than tripled to $13.1 million;
Total operating expenses reduced by 50% to $12.2 million;
Selling, general and administrative expenses decreased 14% to $4.4 million; and
Salaries and benefits decreased 58% to $3.3 million.
Almost a year into the Company's restructuring, MusclePharm is pleased to announce the strategy is having its intended effect of streamlining costs while better positioning the Company for profitable growth. As previously announced, the Company has spent the past 12 months realigning the organization with our business needs and profitable operations, and delivery of product to all the channels we sell through.
The Company's efforts include the sale of its subsidiary, BioZone Laboratories Inc. ("BioZone"), for $8.3 million, a reduction in headcount from 310 employees to approximately 100 employees, and the closure of five offices with two additional office closures planned for the third quarter of 2016, including an administration and finance office in Denver, CO and a distribution center in Pittsburg, CA. The Company is now rebuilding its team with expertise to align individuals with our customer-centric strategy, and has a strategic partnership with the parent of the buyer of BioZone to develop enhanced flavors and other product initiatives.
The Company has also optimized product SKUs by reducing SKU count by 77%, including the exit from all ready-to-drink sports and energy drinks and other low-margin or unprofitable SKUs, while focusing on more profitable products. As the Company continues to execute its growth strategy and restructuring plan, it anticipates continued improvement in its operating margins and expense structure. The termination of the Arnold Schwarzenegger product-line licensing agreement, the elimination of unprofitable SKUs, the elimination of unprofitable licensing agreements, and the migration to new product suppliers have impacted revenue growth for the short-term. The Company anticipates revenue and gross margin to strengthen as it increases focus on its new products introduced during the fourth quarter of 2015 and its MusclePharm Sport Series products.
"We're reengineering the business to where we're profitable," said Ryan Drexler, MusclePharm's Interim Chief Executive Officer, President and Chairman of the Board of Directors. "It's about strategically aligning ourselves and building a strong foundation to create a legacy business around our most popular products." Mr. Drexler reiterated that the Company's strength is in its partnerships with key retailers and distributors, instead of endorsements involving costly and often unknown future financial commitments.
"While results continue to reflect costs associated with the Company's repositioning, I believe we are setting up MusclePharm for a promising future of strong value creation," said Mr. Drexler. "We have streamlined the Company to get back to our baseline business of sales and marketing, while working closely with our contract manufacturers to ensure inventory is available to meet customer demand and reducing expensive inventory that was tying up critical capital. We have a laser focus on delivering product."
The Company announced in June that it filed a counterclaim against Capstone Nutrition, alleging that Capstone fraudulently induced MusclePharm into a multi-year manufacturing contract by misrepresenting Capstone's ability to fulfill its obligations and concealing significant operational problems occurring at its facilities. The result of Capstone's actions included months of delivery delays, lost customers and damaged goodwill that cost MusclePharm tens of millions of dollars, according to the Company's counterclaim. The Company is currently working with new manufacturing partners and has resumed production and distribution of products previously made by Capstone.
"While the reduction in unprofitable sales will affect topline financial results in the short term, the long-term effect of the Company's restructuring efforts will provide for a stronger financial foundation going forward," said Mr. Drexler. "As I have previously stated, we are a sales and marketing organization, and that is where we want to focus. We are concentrating on our core competencies while maximizing our strategic partnerships and bringing more expertise to these areas."
Financial Results for Second Quarter 2016
Net revenue decreased $10.0 million, or 23%, sequentially to $32.9 million for the three months ended June 30, 2016, compared to $42.9 million for the three months ended March 31, 2016. Net revenue decreased primarily due to the strategic reduction in sales of unprofitable product lines and SKUs, the elimination of unprofitable licensing agreements and migration of some existing products to a new supplier.
Gross profit for the second quarter 2016 was $10.7 million, or 33% of revenue, compared to $15.2 million, which was 35% of revenue in the first quarter 2016.
Operating expenses for the second quarter 2016 decreased to $12.2 million, compared to $21.0 million for the first quarter 2016 as we continue to execute the restructuring plan and focus on optimizing our cost structure.
Net loss for the second quarter 2016 was $4.2 million, compared to $6.6 million in the first quarter 2016.
Adjusted EBITDA, a non-GAAP financial measure, was a loss of $43,000 compared to income of $3.2 million for the first quarter 2016. Adjusted EBITDA excludes depreciation, amortization, interest, taxes, stock-based compensation, restructuring charges and other expenses.
Conference Call Information
As a result of management's focus on continuing to execute the restructuring plan and improve liquidity, there will be no second quarter conference call to discuss results.
Non-GAAP Financial Measures
In addition to disclosing financial results calculated in accordance with U.S. Generally Accepted Accounting Principles ("GAAP"), this Form 10-Q discloses Adjusted EBITDA, which is loss from operations adjusted for income taxes, depreciation and amortization of property and equipment, amortization of intangible assets, provision for doubtful accounts, amortization of prepaid stock compensation, amortization of prepaid sponsorship fees, stock-based compensation, issuance of common stock warrants, other expense, net, loss on sale of subsidiary, restructuring and asset impairment charges. Management believes that these non-GAAP measures provide investors with important additional perspectives into our ongoing business performance.
The GAAP measure most directly comparable to Adjusted EBITDA is income (loss) from operations. The non–GAAP financial measure of Adjusted EBITDA should not be considered as an alternative to net income (loss). Adjusted EBITDA is not a presentation made in accordance with GAAP and has important limitations as an analytical tool and should not be considered in isolation or as a substitute for analysis of our results as reported under GAAP. Because Adjusted EBITDA excludes some, but not all, items that affect net earnings and is defined differently by different companies, our definition of Adjusted EBITDA may not be comparable to similarly titled measures of other companies.
About MusclePharm Corporation
MusclePharm® is a scientifically-driven, performance lifestyle company that develops, manufactures, markets and distributes branded nutritional supplements. The Company offers a range of powders, capsules, tablets and gels. Its portfolio of recognized brands includes MusclePharm® Sport Series, Black Label and Core Series, and FitMissâ„¢, which are available in more than 120 countries and over 50,000 retail outlets worldwide. The clinically-proven supplements are developed through a six-stage research process utilizing the expertise of leading nutritional scientists, doctors and universities. MusclePharm is the innovator of the sports nutrition industry. For more information, visit http://www.musclepharm.com. To sign up to receive MusclePharm news via email, please visit http://ir.musclepharmcorp.com/email-alerts.
Forward-Looking Statements
This release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities and Exchange Act of 1934, as amended. Statements that are not a description of historical facts constitute forward-looking statements and may often, but not always, be identified by the use of such words as "expects", "anticipates", "intends", "estimates", "plans", "potential", "possible", "probable", "believes", "seeks", "may", "will", "should", "could" or the negative of such terms or other similar expressions. Actual results may differ materially from those set forth in this release due to the risks and uncertainties inherent in the Company's business. More detailed information about the Company and the risk factors that may affect the realization of forward-looking statements is set forth in the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 2015, the Company's Quarter Reports on Form 10-Q and other filings submitted by the Company to the Securities and Exchange Commission, copies of which may be obtained from the SEC's website at www.sec.gov. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date hereof. All forward-looking statements are qualified in their entirety by this cautionary statement and the Company undertakes no obligation to revise or update this release to reflect events or circumstances after the date hereof.
MusclePharm Corporation
Condensed Consolidated Balance Sheets
(In thousands, except share and per share data)
June 30,
2016
December 31,
2015
(Unaudited)
(Audited)
ASSETS
Current assets:
Cash
$
13,052
$
7,081
Accounts receivable, net of allowance for doubtful accounts of $299 and $347 as of June 30, 2016 and December 31, 2015
20,217
22,003
Inventory
6,941
12,549
Prepaid giveaways
112
307
Prepaid stock compensation
—
1,641
Prepaid expenses and other current assets
4,467
3,698
Total current assets
44,789
47,279
Property and equipment, net
3,886
6,693
Investments, long-term
—
977
Intangible assets, net
1,798
8,652
Other assets
154
180
TOTAL ASSETS
$
50,627
$
63,781
LIABILITIES AND STOCKHOLDERS' DEFICIT
Current liabilities:
Accounts payable
$
39,098
$
39,652
Accrued liabilities
11,538
12,526
Accrued restructuring charges, current
1,267
9,140
Obligation under secured borrowing arrangement
7,361
—
Convertible note with a related party, net of discount
5,976
—
Line of credit
—
3,000
Term loan
—
2,949
Other debt obligations
11
21
Total current liabilities
65,251
67,288
Convertible note with a related party, net of discount
—
5,952
Accrued restructuring charges, long-term
242
279
Other long-term liabilities
137
330
Total liabilities
65,630
73,849
Commitments and contingencies
TOTAL STOCKHOLDERS' DEFICIT
(15,003)
(10,068)
TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIT
$
50,627
$
63,781
MusclePharm Corporation
Condensed Consolidated Statements of Operations
(In thousands, except share and per share data)
(Unaudited)
Three Months Ended June 30,
Six Months Ended June 30,
2016
2015
2016
2015
Revenue, net
$
32,867
$
50,476
$
75,779
$
91,798
Cost of revenue (1)
22,181
32,978
49,880
59,916
Gross profit
10,686
17,498
25,899
31,882
Operating expenses:
Advertising and promotion
2,686
8,285
6,973
15,510
Salaries and benefits
3,292
7,763
12,912
14,824
Selling, general and administrative
4,424
5,121
8,667
10,083
Research and development
531
921
1,394
1,886
Professional fees
1,742
2,064
3,130
3,519
Restructuring and other charges
(4,820)
—
(4,246)
—
Impairment of assets
4,313
—
4,313
—
Total operating expenses
12,168
24,154
33,143
45,822
Loss from operations
(1,482)
(6,656)
(7,244)
(13,940)
Loss on sale of subsidiary
(2,115)
—
(2,115)
—
Other expense, net
(592)
(348)
(1,304)
(531)
Loss before provision for income taxes
(4,189)
(7,004)
(10,663)
(14,471)
Provision for income taxes
7
21
138
33
Net loss
$
(4,196)
$
(7,025)
$
(10,801)
$
(14,504)
Net loss per share, basic and diluted
$
(0.30)
$
(0.51)
$
(0.78)
$
(1.08)
Weighted average shares used to compute net loss per share, basic and diluted
13,874,209
13,647,267
13,855,754
13,491,433
(1)
Cost of revenue for the three and six months ended June 30, 2016 included restructuring charges of $0.5 million and $2.2 million, respectively, related to write-down of inventory for discontinued products.
MusclePharm Corporation
Reconciliation to Non-GAAP Income (Loss) to GAAP Net Loss
(In thousands)
(Unaudited)
Three Months Ended
Three Months Ended
Six Months Ended
March 31,
2016
March 31,
2015
June 30,
2016
June 30,
2015
June 30,
2016
June 30,
2015
Net loss
$
(6,605)
$
(7,479)
$
(4,196)
$
(7,025)
$
(10,801)
$
(14,504)
Non-GAAP adjustments:
Stock-based compensation
4,670
2,523
427
4,013
5,097
6,536
Restructuring and asset impairment charges
2,236
—
—
—
2,236
—
Loss on sale of subsidiary
—
—
2,115
—
2,115
—
Amortization of prepaid sponsorship fees
698
1,431
146
1,821
844
3,252
Other expense, net
712
183
592
348
1,304
531
Amortization of prepaid stock compensation
703
1,109
235
1,127
938
2,236
Depreciation and amortization of property and equipment
427
382
389
456
816
838
Amortization of intangible assets
220
225
196
273
416
498
Provision for doubtful accounts
(34)
30
43
68
9
98
Issuance of common stock warrants to third parties for services
3
33
3
17
6
50
Provision for income taxes
131
12
7
21
138
33
Adjusted EBITDA
$
3,161
$
(1,551)
$
(43)
$
1,119
$
3,118
$
(432)
SOURCE MusclePharm Corporation
MSLP
Remember during the last conference call Derek mentioned he was very excited for Q2 results since most of the dispensary revenues had not yet been rolled into Q1 financials? It doesn't take much common sense to understand how revenues will work here. Another concept to Google would be "capital investment". This can mean short term losses/debt for the benefit of future explosive revenue growth. I can provide you with some links to these terms if you would like to read to understand how this whole concept works.
TRTC
Exactly right. The more outlandish the claims such as "RS coming" or "huge Q2 losses" tell the same story lol.
TRTC
Yep, can't wait. Long time coming with their "RS and Q2 losses" nonsense.
TRTC
Another confirmation of no reverse split is when the CEO stated it himself in the last conference call lol. Just a small detail some like to ignore or they haven't listened to the call. As he said, there is no need for a RS and it wouldn't make sense at this stage. Perhaps down the road if needed at that time with uplisting, but with NASDAQ not doing MMJ, as he said, would make no sense. It isn't so complex of a concept to understand.
TRTC
Funny how that works isn't it?:)
MSLP
As always, thanks for the useful, fact based posts. :)
TRTC
It was a small batch produced during the R+D process lol. Google R+D. That's what happens during a trial and error process during R+D when producing a new product. There is no "undisclosed" or relevant info regarding it, no matter how much some would like there to be.
TRTC
Per the CEO's mouth on the conference call a few weeks ago, no need nor plans for a RS anytime soon. Perhaps as a possible uplisting tool to NASDAQ way down the road, but that step would be very far away, especially with them not accepting MMJ stocks currently, as he also said. Time to cut out the bs.
TRTC
I'm pretty shocked at the lack of movement and interest in this stock with the facts that you've pointed out, as well as the orphan drug granted by the FDA (which was huge). Thoughts on the sluggishness??
OXGN
Agree, and amazing news today. I just can't believe it hasn't moved past $1 already today. Surprised by the lack of response.
OXGN
Why would they cancel it out when they stated it wasn't going to happen 2 weeks ago, there was no forseeable need for it, but it would be a potential tool in the future primarily for an uplist? Why would it make sense to take it out and then put it in again down the road if it was ever needed in the distant future? That would make no sense.
TRTC
It was stated exactly the same way and with exactly the same explanation publicly by DP on the Q1 conference call a couple weeks ago, regardless of if the company reconfirmed this public statement again or not to someone on the phone. I'd be happy to provide the link to the public conference call if you have difficulty locating that.
TRTC
The CEO also stated that 2 weeks ago in the conference call. No plans or need for any RS anytime soon. Would make zero sense at this time. May be a tool for future uplist, but no uplist plans in the near future, especially with NASDAQ MMJ restrictions. This board continues to push this nonsense lie though, and it is obvious why. They know TRTC will emerge as an industry leader in the US markets as the laws evolve...
TRTC
Nice summary. I enjoyed the HOD finish today, hopefully the trend continues tomorrow...
OXGN
Agree. I'm surprised it isn't trading higher than it is. I figured the vote down of a RS last week and the expectation/plan that pps will rise to and remain over $1 by 3 months to maintain NASDAQ listing criteria would have driven it up. Maybe all this info hasn't diffused into the market yet? Not sure.
OXGN
Yes, unfortunately those days are gone with the coming Q2 and Q3 fins which are likely going to really ignite the pps following a gradual uptrend to that point over the longer term.
TRTC
Completely agree. No RS per CEO 2 weeks ago, no need for it, and it would make no sense as he said. It's become a waste of time here with the misinformation and fear-mongering.
TRTC
The only proof of RS related plans are that DP specifically stated in the conference call a couple weeks ago there is no need or consideration for RS at this point and nowhere in the forseeable future. He suggested it would be a possible tool in the distant future if needed during uplisting to NASDAQ. However, NASDAQ is currently not accepting MMJ companies (just as MSR* was denied recently for this reason), so no plans for this process any time soon. Amazing how realities and truths get twisted here:).
TRTC
You beat me to it. This restructuring is looking good...
MSLP
Exactly. It's really not a hard concept to understand.
TRTC
That endorsement turned out to be a huge financial deadweight. Glad to see that deal axed in this restructuring process. Should have been done sooner.
MSLP