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It's sad that this is news when we all assumed that they were doing/already did this. This should have been done a long time ago.
$34 million in sales is terrible as well. Cory Gregory's stock could be worthless if they don't turn this company around quickly.
You would have to think that their Q3 OPEX will be lower than Q2 seeing as Drexler has been firing people left and right and cutting unnecessary expenses. Their exploding salaries/benefits expense alone ($25.3 million in 2014 vs $11.8 million in 2013) was enough to kill their profitability. If he's able to keep sales at $50 million per Q and cut this number down significantly, I can see them easily attaining profitability over the next couple of quarters.
I wonder what his thoughts are on the viability of the whole Capstone manufacturing option/situation. In order to increase margins and sustain them, this company needs to manufacture products themselves or get bought out by a company that can.
Combat Powder and Combat Crunch bars now in Walmart:
Bars:
https://twitter.com/mattysifer/status/662597535471550464
Powder:
So when did @MusclePharm start selling Combat Protein at Walmart? $mslp this is good news if this is nationwide pic.twitter.com/DopuvLTSBp
— SpartanTrader7 (@Spartantrader7) November 2, 2015
Someone posted this no twitter yesterday:
So when did @MusclePharm start selling Combat Protein at Walmart? $mslp this is good news if this is nationwide pic.twitter.com/DopuvLTSBp
— SpartanTrader7 (@Spartantrader7) November 2, 2015
Good. The international offices should have never been opened in the first place. What exactly was their function? Product has never been manufactured outside of the United States, and even if it was, what is the need to have "management offices" in Ireland, Canada and South America? All of these layoffs and closings should be dollar for dollar savings on the bottom line. I can't see these layoffs hurting sales of the products in these markets, especially in the shorter term. I think Drexler has the right idea here in shoring up the balance sheet and preparing the company for sale.
Musclepharm has the following to offer to a potential acquirer:
- A credible brand with a loyal consumer follwing.
- Products that have been successfully introduced, refined and marketed.
- Large, global distribution network
- $200m+ in annual revenue
Essentially, they should be looking to sell to someone who can take their work to the next level by cutting costs through internal manufacturing and boosting sales through increased scale and distribution.
I don't think Drexler shares the same view as Brad Pyatt and Estalella of building Musclepharm into a standalone "billion dollar company"
So you are expecting an average of $36.5 million per quarter for the next 2 quarters?
Brad Pyatt sold 90k+ shares of MSLP 2 days ago:
http://ih.advfn.com/p.php?pid=nmona&article=68798798&symbol=MSLP
It's gotten real ugly, real quick.
All I know is that as an investor/trader, you have to be much more enticed by $2.80 per share musclepharm with a heavily invested chairman that is trimming the fat from the company than you were at $8 with a stooge running the company who never delivered on promises. What do you propose, investors sell at $2.80 and take a 60% loss (like every sheep who has ever participated in any stock market ever), or hold and give the competent chairman and new board a chance to get the ship turned around?
I don't disagree that companies might be able to buy their way onto those lists in order to drive sales. Which again goes against your argument that the list is an indicator of sales. Musclepharm had record revenues in their most recent quarter without being at the top of the list. What does that tell you?
Almost every product on that list is running a BOGO or other promotion.
The bodybuilding.com top 50 is updated very regularly, meaning whichever products have sold extremely well over the past couple of weeks will dominate the list. If you monitor the list for a month or longer like many of us have done, you will see that products creep their way onto the list and/or jump to the top when there are promotions being run on that product. That list is by no means an accurate bellwether for industry sales.
Nature Sport Photo
Coming soon - Nature Sport from #MusclePharm!
— MusclePharm® (@MusclePharm) September 17, 2015
More details soon!#mpnation pic.twitter.com/xuwVRzkMrl
Brian Casutto was the person that MusclePharm originally put in charge of the Nature Sport rollout, and I see that he is tagged in the photo that drive posted earlier.
https://www.linkedin.com/pub/brian-casutto/37/582/b35
To put the salary expense into perspective, $7.7 million per quarter is $30.8 million per year. $30.8 million is enough money to hire 300 people each making $100k per year.
If this company were a startup, I could see this scenario being realistic, but they aren't a startup. They are a 6+ year old consumer products company that sells supplements. I think what they did is expanded their sales and marketing teams too quickly up front instead of gradually scaling as needed, and now they are paying for it.
There are millions and millions of dollars in waste every quarter. Just look at the financials. It doesn't take $23.23 million in SG&A to produce $50 million in sales, and that is why he is laying people off, closing the biozone facility (presumably) and cutting B.S. expenses. Their salary expense is insane. Why do they need to spend $7.7 million per quarter on salaries? What do those employees do that is necessary to the company? Those are the questions Drexler is answering now. They need to take their foot off the gas and regroup, not file bankruptcy and regroup. I support what he is doing. I am glad the SEC investigation occurred and has finally closed.
SEC Charges Sports Nutrition Company With Failing to Properly Disclose Perks for Executives
Pyatt - $150k fine
Musclepharm - $700k fine
Davis - $30k fine
http://www.sec.gov/news/pressrelease/2015-179.html
At least their company cars are reasonable and cost effective...
Need a lift?
— MusclePharm® (@MusclePharm) August 29, 2015
The #MPChallenger were out in force today!#mpnation pic.twitter.com/SjaXwckXoG
Agreed. He still needs to go. Cutting the COO, closing biozone, laying off 1/3 of the employees, etc. is a very good start though. It's almost September though, so I wouldn't expect much of an impact on anything until at least Q4/Full Year earnings next year or possibly Q1 earnings in May of next year. For shareholders, this is still a long waiting game.
5 lb size at muscle and strength is $54. 2lb at Walmart is $22. So $10.80 per pounds vs $11 per pound. So it's actually more expensive at Walmart in the 2lb size than it is to buy a 5lb elsewhere online....
His 3.1% stake has appreciated by more than $6 million since 2009? What are you getting at? That seems like a successful investment/management wake up call by Drexler...
Who cares? I didn't even know they still sold this product. That's how irrelevant this information is. If we were talking about US regulators and one of their top grossing products, then it'd be a huge issue.
The problem with this regardless of the outcome is that it is only adding to their out of control expenses. They had over $2 million in professional fees in Q2 if I remember correctly. That needs to be closer to $0.
Two constants remain in MSLP:
- Their products are the best in the business
- Their management team continues to show their ineptitude in controlling costs/turning a profit/running a public company.
Operating and Financial Highlights for Second Quarter 2015
• Net revenue was a record $50.5 million;
• $3.5 million operating cash flow positive for Q2 with $4.2 million in cash on hand;
• $8.5 million sales backlog;
• Gross margin was 34.7%, up 3.1 basis points versus 2014 full year results;
• Adjusted EBITDA was $1.1 million
Agreed, they need to come in somewhere around $56 million+ to be in line with their guidance from the Q1 call. I think one thing that should help them somewhat is that EUR/USD has leveled up and inched slightly higher since the time of the Q1 call. I know that was one huge concern here as it seemed the Euro was continuously losing steam to the dollar, especially considering Musclepharm has seen huge growth over the past year in international markets. It should be interesting to see all of the numbers and how they are digested tomorrow by investors following the morning call.
It should be interesting to see what kind of financial picture we see tonight when they report. I'm expecting something like:
- $50 million in Revs.
- continued negative EPS
- increased expenses
I'd prefer to see:
- $55 million in Revs
- roughly break even
- decreased sg&a
- They gave guidance in the $210-$220 million range on Q1 conference call.
- Q1 Revenue was $41.3 million.
This tells me they need to average $56.23 million/quarter just to make it to the bottom end of their guidance. I agree with you, as I just don't see how they are going to do $56 million this quarter with all of the supply issues, but I am currently holding as I do not think the huge downside/risk of bankrupty is still an issue. I think it's now more an issue of how do they ever transition to profitability. I will say there seems to have been less sales/promos over the past quarter than we were previously seeing. I am hoping this has to do with their effort to raise ASP and increase margins. I'd much rather see them do a $40 million quarter at 40%+ margins than $50 million at 30% margin.
What worries me at this point is that they may be getting to about the average size that a company in their sector gets to before their revenue growth slows considerably and they get bought out in an attempt to squeeze profits out of the brand.
Well Kroger owns Dillons, Harris Teeter and many other convenience and grocery store chains and I see tweets about Dillons and other stores all the time by MusclePharm. So that may be the 7,000+ "Kroger" locations he was mentioning.
I don't see how that would be a negative for shareholders though...
No, the company stated that he only owned 1.4 million shares as of June 24 (after the 400k purchase from Wynnefield).
http://ir.musclepharmcorp.com/all-sec-filings/content/0001144204-15-038876/v413750_sc13da.htm?TB_iframe=true&height=auto&width=auto&preload=false
So that tells me he has somehow acquired 100k more shares between June 24th and today.
That is correct. OTC Markets posted the following today, calling MSLP a "Newly Verified OTCQB Company":
http://www.otcmarkets.com/stock/OTCM/news/OTC-Markets-Group-Welcomes-Newly-Verified-OTCQB-Companies--July-15?id=109597
Correct me if I'm wrong, but it sounds like they are paying consultants to tell them how much to pay themselves, and yet they are still giving themselves raises every 6 months. What am I missing?
Now Cory Gregory is "involuntarily" dumping $300k+ of stock?
I would assume that a majority of MSLP shareholders have/had a long term mindset. Yes the stock has gone down below $6 and up above $14, but let's say you bought at $8 and the stock ran to $14. If you're a long term investor and believe the growth story, you're not selling at $14 for a quick 50%. You are in this for 3-5 years minimum while you let the story play out.
1. Since Q1 2014 they promised sustained profitability. They've failed.
2. On Nov. 14, 2014 they reaffirmed FY14 revenues of $185-$195 and eps of .20. They ended with negative EPS and $177 million in revenues.
3. RTD Amino1 has been promised/touted as a Gatorade killer for over a year. Where is it?
4. Nature Sport line was supposed to be launched in Q1, where is it?
So when they tell me they will hit $210-$220 million in sales for 2015, and they tell us their liquidity is increasing, I don't believe any of it until I see it.
They said costs are stabilizing, yet they have signed multiple large partnerships since that announcement, and they continue to tout new products that are in the pipeline. How could costs be stabilizing if this is the case?
How are the going to acquire Capdtone Nutrition when they have very little cash and their stock price is at multi-year lows?
These are all the questions that they owe it to Wynnefield, Consac, you, myself, and every other common shareholder to answer. When do we get rewarded for providing them with the capital to continue to operate and remaining loyal by holding our shares?