Muscle Pharm Corp (OTC:MSLPQ)

Muscle Pharm Corp (NASDAQ:MSLP) a global provider of leading sports nutrition & lifestyle branded nutritional supplements announced Q4 2021 results:

• $10.0 million vs $15.1 million in the prior year

• Loss per share of $0.20 vs EPS of $0.03

“Sales and margins in the fourth quarter and full year 2021 were impacted by industry wide supply chain shortages; however, our continued focus on operating expense reduction helped to mitigate and we were able to deliver $50.0 million in revenue for the full year. I am incredibly proud of the team and we are on track to delivery sequential growth in sales in the second quarter of 2022. We believe we have the right team and offerings in place to deliver significant long-term growth.”

Back in early March, the company provided preliminary results for Q4 21 and Q1 22 where the company expects to report $13 to $15 million. The Company reiterated this guidance on the conference call and mentioned cost cutting measures have led to March being a cash flow positive month.

Muscle Pharm Corp (NASDAQ:MSLP) ($0.35 $11.6M market cap), a global provider of leading sports nutrition & lifestyle branded nutritional supplements announced preliminary fourth quarter 2021 and fiscal Q1 2022 results:

• Preliminary revenue for the fourth quarter 2021 will be approximately $9-10 million. A portion of revenue shifted from the fourth quarter 2021 to the first quarter of 2022 due to temporary industry wide supply chain and logistical delays.
• The Company generated preliminary revenue for the full year of 2021 of $49-50 million
• Well positioned to achieve revenue in the range of $13-$15 million revenue for the first quarter

“We are extremely well positioned for growth in 2022 due to many factors validated by our strong first quarter performance. Throughout 2021 our entire team worked extremely hard to position our company for long term growth by improving our infrastructure, expanding our management team, leveraging our brands for the energy drink category, reformulating select existing offerings and dramatically expanding our distribution channels with leading omni channel retailers.”

We recently removed MSLP from our Top 5 Faves Model Portfolio due to, as the company explained, the delays it experienced in 2021, resulting in what we felt to be a lower level of timeliness as an investment. However, the stock still remains in several other Model Portfolios while we continue to track its progress and achievements going forward.

Muscle Pharm Corp (NASDAQ:MSLP) ($0.75 $25.1M market cap), a global provider of leading sports nutrition & lifestyle branded nutritional supplements, announced Q3 2021 results:

• Sales of $11.9 million vs $16.0 million in the prior year
• Loss per share of $0.12 vs EPS of $0.01

“Sales and margins in the third quarter were impacted by supply chain shortages which were mitigated by our continued focus on operating expense reduction...new product formulation, along with the continued production of the MP Energy drink line, is expected to drive sequential revenue growth in the fourth quarter of 2021. Also, as mentioned on our second quarter earnings call, we brought on T.J. Dillashaw for marketing and business development and have already seen a significant impact on our business through the formation of marketing partnerships that will support our expected fourth quarter revenue growth.

In addition, our recent $7.0 million senior secured notes offering has us well positioned to capture market share in the functional energy drink segment, and we believe we can grow the business to $30.0 million in annual sales starting in 2023.”

Conference call highlights:

“We made strategic operational decisions this quarter to set our company up for success and strong sales growth in the fourth quarter and subsequent year. This, combined with the supply chain shortages across our industry did, however, come at the expense of our top and bottom line in the third quarter.

We stand by our conviction that the functional energy drink market is a massive opportunity for MusclePharm, and we believe we can capture enough market share to grow the business to $30 million in annual sales starting in 2023. This, combined with our focus on growing the base business, sets us up for a strong fourth quarter and full year 2022 growth.”

Muscle Pharm Corp (NASDAQ:MSLP), a global provider of leading sports nutrition & lifestyle brands, recently entered the energy drink market. The company has been highlighting pre-order momentum in its recent press releases, and the energy drinks are now available to purchase. On the negative side, the company announced a highly dilutive financing deal to combat liquidity issues due to supply chain gross margin pressure from escalating freight and elevated whey protein prices. However, proceeds will also be used to launch the company's new functional beverage product now listed on muscleandstrength.com.

Muscle Pharm Corp (NASDAQ:MSLP) ($1.65 $55.2M market cap), a global provider of leading sports nutrition & lifestyle branded nutritional supplements announced Q2 2021 results:

• Sales of $14.9 million vs $17 million in the prior year
• Loss per share of $0.07 vs loss of $0.01

“I’m encouraged despite the headwinds affecting our industry, we were able to finish the second quarter with a 14% increase in net revenue over the first quarter of 2021. In the second quarter we experienced significant increases in protein prices affecting our industry which reduced our gross margins, however this was partially offset by a 15% reduction in operating expenses. With the strength of our brand and the restructuring we undertook two years ago, we are well positioned to return to profitability when the protein market normalizes.

We are excited to officially rollout MP Performance Energy drink later this month with our eight signed distributors. Initial reaction to this new line is very strong and we believe we have the leadership, network and brand name to achieve $30 million of MP and FitMiss Energy product sales in 2023 by expanding our leading brand into the energy beverage market. This is only the beginning for our Company’s expansion as we continue to unlock the long-term opportunity for MusclePharm.”

Muscle Pharm Corp (NASDAQ:MSLP) ($1.59 $53.2M market cap), a global provider of leading sports nutrition & lifestyle branded nutritional supplements, announced it has closed a $7.3 million liability with the IRS.

“On April 4, 2017, MusclePharm received a letter from the IRS asserting back taxes and penalties of approximately $7.3 million dollars owed for the 2014 restricted stock grants. MusclePharm submitted a formal protest disputing the matter on several grounds and has been pursuing this matter vigorously through the IRS appeals process. On June 29, 2021, an IRS Appeals Officer confirmed that the tax matter had exceeded the applicable statute of limitations and was deemed closed from any further assessment by the IRS.”

See our article discussing why we feel the company is at an inflection point in its growth trajectory  here. 

Notable MSLP Commentary

 “Our management team has spent the last two years dramatically restructuring MusclePharm and are now generating positive cash flow and well positioned for long-term profitable growth even in the current COVID-19 pandemic environment.  The business turnaround was driven by reducing low margin sales into inefficient channels, increasing gross margins, decreasing operating expenses and improving our overall EBITDA.  We have many of the leading brands in nutrition but we needed to do a much better job of realizing the value of our brands by reducing product discounts and being more efficient in our promotional activity, reducing SKU’s that are not properly positioned, and better aligning our operations with repositioned top-line growth. We have strengthened our scalable platform in 2020, with a focus on increased profitability. Our omni-channel strategy is working and enables us to capture a greater share of this large and growing space.  We also believe we are very well positioned to utilize our leading brands to expand outside of the nutraceutical space in the near future.”