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They know something.
Danni,
I agree with you. How can you trust that the revenues are not manipulated? I am beginning to think that they are for the following reasons.
1. They have yet to come out with any significant response. If the allegations are false, I would have had a strong statement out within hours of that article hitting the net.
2. First quarter revenues seem quite small for a company that more than doubled their clients over last year. Also, why is no one mentioning anything about the 5LINX $60 million deal that they signed a couple years ago? I mentioned it a couple times now but no one comments on this. If that deal was legitimate, we should be seeing higher revenues than $7 million.
3. They are being secretive about certain things, not just the P&G deal. When inquiries are made with investor relations, I can't get an answer.
4. This director that resigned recently is being investigated for fraud.
5. I question whether or not NR is superior to niacin or niacinamide.
What are your thoughts about the 5LINX deal?
I think it is more than if they think that Niagen is real. I think it has more to do with deception. Why are they being so secretive about the P&G deal? Why did the deal not include any up front payments to CDXC? I find it questionable as to why they only did $7 million in revenue this past quarter, considering all the new clients. Most importantly, why has there been no comments from the company yet? Any legitimate company would have come out with a response by now, unless the comments in the article are true.
I posted the following back in March and no one commented. Why does it seem like the deal (regarding the size of the deal) that was announced about 5LINX does not appear to be true?
Jaksch said the following in the CC:
"So NIAGEN continues to be our primary revenue growth driver. We began 2015 with just five NIAGEN customers and by the start of 2016, our customer account had risen to 13, so we are more than double the amount of customers. So if you take a look at if we only had five and we generated the revenue that we did last year, we expect those same customers that we had last year to continue to grow, but we have eight additional clients coming into this year, which is a good sign for what the revenue growth potential for NIAGEN might be. Although we may not give guidance, at least it will give you some indication of what effect that could have on our revenue. One better way to look at this might be that we actually have one client that we had last year and that one client we expect to actually do the same amount of revenue, just that one client, the same amount of revenue that we did with all of NIAGEN sales for last year."
Who is the one client? Perhaps it is 5LINX. Back in 2014, they signed a $62 million deal with them. In 2014, 5LINX would purchase $2.6 million in ingredients. From 2015 to 2017, 5LINX would purchase another $60 million in ingredients. If CDXC had only $12.5 million in ingredient sales in 2015 and all of that was attributed to 5LINX, one should expect $47.5 million in sales from them over 2016 and 2017.
Since it is reasonable to assume that all of the ingredients sales in 2015 did not come from 5LINX, one should expect that the number for 2016-2017 should be higher than $50 million. If they purchase $15 million this year, one should expect a purchase of $35 million next year. However which way the purchases are spread, it represents a significant increase in revenue over the next two years from just one client. With BPI and the rest coming on board this year, it should make things interesting.
http://www.nutraingredients-usa.com/Suppliers2/ChromaDex-signs-62-million-deal-for-Niagen-Purenergy-ingredients
Jaksch said the following in the CC:
"So NIAGEN continues to be our primary revenue growth driver. We began 2015 with just five NIAGEN customers and by the start of 2016, our customer account had risen to 13, so we are more than double the amount of customers. So if you take a look at if we only had five and we generated the revenue that we did last year, we expect those same customers that we had last year to continue to grow, but we have eight additional clients coming into this year, which is a good sign for what the revenue growth potential for NIAGEN might be. Although we may not give guidance, at least it will give you some indication of what effect that could have on our revenue. One better way to look at this might be that we actually have one client that we had last year and that one client we expect to actually do the same amount of revenue, just that one client, the same amount of revenue that we did with all of NIAGEN sales for last year."
Who is the one client? Perhaps it is 5LINX. Back in 2014, they signed a $62 million deal with them. In 2014, 5LINX would purchase $2.6 million in ingredients. From 2015 to 2017, 5LINX would purchase another $60 million in ingredients. If CDXC had only $12.5 million in ingredient sales in 2015 and all of that was attributed to 5LINX, one should expect $47.5 million in sales from them over 2016 and 2017.
Since it is reasonable to assume that all of the ingredients sales in 2015 did not come from 5LINX, one should expect that the number for 2016-2017 should be higher than $50 million. If they purchase $15 million this year, one should expect a purchase of $35 million next year. However which way the purchases are spread, it represents a significant increase in revenue over the next two years from just one client. With BPI and the rest coming on board this year, it should make things interesting.
http://www.nutraingredients-usa.com/Suppliers2/ChromaDex-signs-62-million-deal-for-Niagen-Purenergy-ingredients
Expert,
You wrote the following:
"well, the executives that you trust so blindly can push themselves up in a corner pretty soon, so I do find the stock worth investing in.
If the numbers aren't getting any better this Summer or by year end, then I'm betting that a class action lawsuit or a lawsuit by Wynnefield Capital is highly likely.
The executives cannot keep on promising spectacular growth to obtain shareholder support and then come with all sorts of excuses when the numbers don't add up...It can only be done so many times, as the shareholder's redemption of the executives' lack of performance won't last forever."
1. I never said that I trusted anybody; I stated that I had no credibility issues with them.
2. If what numbers are not getting any better? Nobody is going to sue anybody. Potential investors are warned that there are many risks that are involved with investing in the company, including the belief by some that the management team is incompetent.
3. What numbers are not adding up? They have been experiencing spectacular growth. Do you not believe the revenue numbers?
"You are probably the only investor feeling that the management has no credibility problems....the trust between board/management and shareholders is broken imo."
I find it interesting that shareholders who say that they don't trust a company still own shares of the company. If I did not trust the management of a company, I certainly would not own shares in that company. Besides, I never said that I was an investor in MP. There are many companies that I watch that I don't own shares in.
"MSLP Management Continues to Have Credibility Problems"
They have no credibility problems with me. Besides, the information in the letter should be of no surprise to anyone.
"Brad's sale was involuntary and probably related to the SEC, but details weren't disclosed that i've seen."
From Form 4:
"On May 6, 2015 the Reporting Person was informed of the involuntary sale, by a third party, of the shares pursuant to a pledge agreement dated October 15, 2014 (the "Pledge Agreement"), in accordance with the terms and conditions of such Pledge Agreement."
The price will not stay at these levels for long. Have patience!
How is their cash flow positive comment garbage? By definition, cash flow takes into account any loan, so it is not a garbage comment. Also, you make it sound as if it were not for the loan, they would be in bankruptcy now. Don't forget that they paid Capstone $2.5 million cash. This was a negative to cash flow from investing activities; If they had not paid that, their cash flow would have looked better and they could have had even more cash on hand.
I frequent 2 Walmarts, and as of last week, they both had MP products.
I don't find it interesting that they are not bankrupt or have not had to raise money. Despite what many may feel, they know what they are doing. If you don't have inside information, you would not know half of what they are doing.
"MSLP is presently not growing revenues any longer. The opposite is occurring. Revenues are declining massively quarterly on a YOY basis for 4 consecutive quarters showing declining revenues from core operations of MSLP products. 12 consecutive months of declining revenues trumps your cherry picked one date.
FACT!"
These statements are incorrect.
Predictions for 2015: Not necessarily in this order.
1. SEC investigation is closed.
2. Company is uplisted.
3. MP acquires Capstone Nutrition.
4. Greg Horn, current CEO of Capstone, becomes the new CEO. Brad Pyatt remains chairman.
5. Company reports revenues of more than $400 million and double-digit EBITDA.
"Here are some very good reasons why MusclePharm will not be able to compete effectively in the energy drink market."
Really? That company is the reason that they will not be able to compete? You choose a company with $14 million in revenues over companies, like Red Bull and Monster, that do billions of dollars in revenues selling energy drinks?
MP energy drinks will surpass $14 million in no time.
"The only current MSLP YOY growth is expenses and EPS losses in today's world." I guess that I did not understand math when I was in school.
2012 Revenues: $67 million
2013 Revenues: $111 million
2014 Revenues: $177 million
2015 Projected Revenues: $220 million
"Their products are amazing? What makes their products amazing? 50 to 100 other companies offer the same things. In fact, all of Musclepharm's products are copies of other company's products. Name one original product that Musclepharm has introduced to the market."
None of what you said matters. It does not matter if they have nothing original. What matters is that people love their products as evidenced by their growth.
2012 Revenues: $67 million
2013 Revenues: $111 million
2014 Revenues: $177 million
2015 Projected Revenues: $220 million
Typical wording that is normally found in a financial report.
"Your lucky you weren't allowed to buy on margin at $13 like you said you would have if you could have."
What is a lucky?
I actually do refresh the browser on 3 computers almost daily.
"Every other week Combat Crunch Bars are completely out of the top 50 on the same site while Quest are never out of the top 15."
Now that is a blatant lie! I have been following this on a daily basis for weeks now and the combat crunch has never fallen out of the top 50. In fact, it has been ahead of Quest bars for more than a month and is slowly increasing its distance ahead of them.
Combat Crunch has also been way ahead of Quest on M&S.
What are you talking about? Here is massive revenue decrease the past 4 quarters. How is this pretty good?
Q1 2014 $50.2m
Q2 2014 $44.7m
Q3 2014 $41.1m
Q4 2014 $30.6m
The numbers that I am looking at show Q3 revenues greater than Q2 revenues.
They have not borrowed more than $12 the last couple months. They have not run out of cash; if they did, they would have declared bankruptcy. So, stating that something is a fact does not make it so because you said so.
And where did you get the info that Capstone cut them off? If they did that, would they then give 20% of the company for making a payment that was owed? Makes no sense to me. And if Capstone did cut them, it would explain their Q4 revenue decline. You can't have your cake and it too.
As for Accounts Receivable and Inventory, only the former is down; and I would not say that it is way down. The latter is up compared to the same period that you are referencing.
My guess, it that Pyatt will retain chairman, rather than CEO.
These reports come out every year, yet the supplement industry keeps growing. Apparently, they have had no effect on business. And if you had any idea how the body works and how and why certain reports are published, you would take this report with a grain of salt.
I would not be surprised if the stock is trading as low as a buck and change later this summer. I actually think Q1 numbers, despite being better than Q4, will not be anything to write home about. However, I think things are setting up nicely to see a big explosion of the stock price to an all-time high later year as they gain listing and with subsequent institutional buying and improved earnings.
"They are late to the party and there is nothing to differentiate themselves for the competition."
Being late to the party does not necessarily mean that their energy drinks will not be successful. What MP has going for it is a rapidly growing list of loyal customers. These loyal customers that currently drink another brand's energy drink will now switch to MP's drinks. The other companies know this and are sweating. No doubt, the competitors will lose market share, albeit slowly at first.
Investors are buying the stock, as evidenced by the volume of shares being traded. If you are wondering why the volume is not significantly higher, there are several reasons. First, the number of outstanding shares is relatively very small. Second, it is still a relatively unknown stock. Third, institutions are not buying because of the OTC status of the stock.
The recent significant decrease in stock price was mostly due to the couple of institutions, that did own stock, selling their relatively large number of shares of the total outstanding shares.
The $2.5M could be to expand Capstone's capabilities to producing something like bars.
I actually did not remember you posting this until you brought it up; I simply misread your post.
You also stated that MP terminated a contract and there is no need to say more. Of course you need to say more. What are the details of this contract that was terminated?
Where did you get the information that Capstone produces the protein bars?
When Capstone Nutrition was formed 6 months ago, it merged Integrity Nutraceuticals in Tennessee and CornerStone Research and Development in Utah. According to ZoomInfo, the former was doing between $5-10 million in revenue per year, while the latter was doing between $50-100 million in revenue per year.
Based on ZoomInfo's information, one could expect that Capstone does more than $100M in revenue per year. With the recent deal between them and MP, one could expect that the figure, going forward, is closer to $200-250M.
http://www.zoominfo.com/s/#!search/profile/company?companyId=59591265&targetid=profile
http://www.zoominfo.com/s/#!search/profile/company?companyId=345200239&targetid=profile
"No. Sorry. But they couldn't pay their manufacturer and were cut of until they came up with money up front."
So Capstone decided to halt production of MP's products until they came up with the money they owed? Is that what you are saying? So MP came up with the $2.5 million and Capstone decided to give up 20% of their $100 million plus a year company? Sure, that makes a lot of sense.
So, Combat Crunch is now the best-selling protein bar on Bodybuilding.com and Muscle & Strength. I believe that Quest had $82M in revenues in 2014. Perspective.
They mentioned double-digit EBITDA, to be more specific. This is different from net income. I could see the deal occurring and their having $2M in net income and $11M EBITDA and someone saying Brad lied.
I don't think that they are updating the top 10 lists regularly. For example, on their top 50 list, MP's protein bars have surpassed Quest's protein bars to become the number one selling bar. Yet, the top ten list shows Quest as number one.
Another possibility could be MP having too many similar products.
Wasn't the author referring to Q4? That argument does not hold because the $8M borrowing was done in Q3 and the Q1 borrowing has no effect on the cash flow of Q4.
And obviously he did not do due diligence very well because a simple review of the cash flow statement would show cash flow from the various activities.
"Cash flow does not consider the source of the cash received."
Cash flow does consider the source. It is divided in to cash flow from operations, investments, and financing.
How do you Capstone's credit is better? You have access to their books and their credit rating?
Why would they borrow $200 million? Do they need it to support their growth strategy? And if so, does it increase shareholder value?
You can compare whatever you want to compare; however, they don't do it the way you are doing it. Also, you can correlate the share price with anything. The share price has been falling at the same time that temperature in my city has been rising. So, maybe I should sell because it is going to get hotter.
Maybe you are confused because you keep saying that I said something that I never said. Why do you keep asking why I am saying that they surpassed their entire 2014 revenue in one quarter, when, in fact, I never said that? Please show me where in my quote that I said that.
I am not following your explanation. And yes, they only recognize $10 of revenue; that is why it does not matter where the revenue is coming from. If they manufacture the drinks or if Biozone does it, it does not matter because the revenue is the same. It is revenue that they did not have in 2014 regardless of who is manufacturing the drink.