UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report: August 4, 2014
(Date of earliest event reported)
MusclePharm Corporation
(Exact name of registrant as specified in
its charter)
NEVADA |
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000-53166 |
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77-0664193 |
(State or other jurisdiction of incorporation) |
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(Commission File Number) |
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(IRS Employer Identification No.) |
4721 Ironton Street, Building A
Denver, Colorado 80239
(Address of principal executive offices)
(Zip Code)
(303) 396-6100
(Registrant’s telephone number, including
area code)
N/A
(Former name or former address, if changed
since last report)
Check the appropriate box below if the Form
8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions
(see General Instruction A.2. below):
¨
Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
¨
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
¨
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)).
¨
Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-14(c)).
ITEM 2.02 |
RESULTS OF OPERATIONS AND FINANCIAL CONDITION |
ITEM 7.01 |
REGULATION FD DISCLOSURE. |
On August 4, 2014, MusclePharm Corporation issued a press release announcing results for the quarter ended June 30, 2014. A copy of the press release is attached to this
report as Exhibit 99.1 and is being furnished pursuant to Item 2.02 of Form 8-K and shall not be deemed incorporated by reference
into any of the Registrant’s registration statements or other filings with the Securities and Exchange Commission, except
as shall be expressly set forth by specific reference in such filing.
ITEM 9.01 |
FINANCIAL STATEMENTS AND EXHIBITS |
The exhibit listed in the following Exhibit Index is filed as
part of this Current Report on Form 8-K.
Exhibit No. |
Description |
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99.1 |
MusclePharm Corporation Press Release issued August 4, 2014 |
SIGNATURES
Pursuant to the requirements
of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned
hereunto duly authorized.
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MUSCLEPHARM CORPORATION |
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Dated: August 4, 2014 |
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By: |
/s/ Brad J. Pyatt |
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Name: |
Brad J. Pyatt |
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Title: |
Chief Executive Officer and President |
Exhibit 99.1
MusclePharm Reports 2014 Second-Quarter
Financial Results
Second-Quarter Revenue Increases to $46.7
Million with Earnings of $0.03 Per Diluted Share
Revenue for the First Six Months Increases
102 Percent to $96.9 Million
2014 Full-Year Guidance Increases to
$185 - $195 Million in Net Sales
With Earnings of $0.45- $0.50 per Diluted
Share
Conference Call
Set for August 5, 2014 at 8:30 a.m. Eastern Time
Denver, CO – August 4, 2014 – MusclePharm
Corporation (OTCQB: MSLP), a scientifically driven, performance-lifestyle sports nutrition company today announced financial results
for the second quarter ended June 30, 2014.
2014 Second-Quarter Results
The following comparison refers to results for the second
quarter of 2014 versus the second quarter of 2013.
Net sales increased 83 percent to $46.7 million from $25.5 million
last year, primarily as a result of new sales channels, new product lines, and increased brand awareness.
Net sales by distribution channel
were as follows:
| · | Food, Drug and Mass (FDM), a new distribution channel for MusclePharm
in 2014, accounted for $5.0 million of the Company’s sales increase; |
| · | International increased $10.7 million, or 119 percent, to $19.7 million,
compared with $9.0 million during the same period last year; and, |
| · | Specialty, which includes distributors and online retailers, grew
by $2.6 million, or 16 percent, to $19.0 million, compared with $16.4 million last year. |
Gross profit was $15.6 million, compared with $7.9 million last
year. As a percentage of net sales, gross profit was 33.5 percent, compared with 31.1 percent last year.
Operating expenses as a percentage of net sales decreased to
32.5 percent, compared with 41.8 percent last year.
Net income was approximately $400,000, or $0.03 per diluted
share, compared with a net loss of approximately $2.4 million, or $0.34 per share, for the same period last year.
“MusclePharm’s solid second-quarter results are
a testament to the strength of the company’s brands in what has historically been a challenging quarter,” said Brad
Pyatt, MusclePharm’s chairman and chief executive officer. “As MusclePharm gains further traction both domestically
and internationally, we remain focused on driving the strength of our brands, while enhancing our leadership position.”
Recent Highlights
| · | Launched more than 60 new items within the MusclePharm® Hybrid
and Core Series, Arnold Schwarzenegger Series™ and FitMiss™ brands, including new products, new flavors and new sizes in
the second quarter. MusclePharm has launched more than 100 new items year-to-date; |
| · | Signed a multi-year endorsement agreement with Tiger Woods, which
includes sponsorship of Tiger Woods’ golf bag. The 2014 Open Championship was viewed by 7.45 million people with MusclePharm’s
logo legible 72 percent of the time Tiger’s golf bag appeared on-screen. Total bag exposure was more than an hour and twenty
minutes; |
| · | Signed a multi-year endorsement contract with Johnny Manziel; |
| · | Expanded relationship with GNC to carry all of MusclePharm’s brands
on a dedicated wall in all of GNC’s U.S. stores; |
| · | Published the results of a double-blind placebo-controlled clinical
study, which demonstrated that MusclePharm’s recovery and hydration supplement Amino1 enhanced rehydration more effectively than
water and Gatorade. MusclePharm plans on conducting approximately 20 clinical studies during the year; |
| · | Received 25 nominations for the 2014 Bodybuilding.com Supplement Awards.
Categories for consideration include the prestigious Brand of the Year award for both the MusclePharm and Arnold Schwarzenegger
brands. Nominees were chosen based on sales performance on Bodybuilding.com; and, |
| · | Added Gregory Macosko to the Board of Directors and named him as Chairman
of the Audit Committee. Macosko is also on the Board of Montrose Advisors and is a retired partner and portfolio manager of Lord
Abbet’s Small Cap Value Fund. |
2014 Six-Month Results
The following comparison refers to results for the first
six months of 2014 versus the first six months of 2013.
Net sales increased 102 percent to $96.9 million from $48.0
million last year.
Net sales by distribution channel were as follows:
| · | Food, Drug and Mass (FDM), a new distribution channel for MusclePharm
in 2014, accounted for $10.2 million of the Company’s sales increase; |
| · | International increased $22.7 million, or 148 percent, to $38.0 million
compared with $15.3 million during the same period last year; and, |
| · | Specialty, which includes distributors and online retailers, grew
by $10.6 million, or 33 percent, to $42.8 million compared with $32.2 million last year. |
Gross profit was $33.5 million, compared with $16.1 million
last year. As a percentage of net sales, gross profit was 34.6 percent, compared with 33.5 percent last year.
Operating expenses as a percentage of net sales decreased to
31.6 percent, compared with 40.7 percent last year.
Net income was approximately $3.1 million, or $0.27 per diluted
share, compared with a net loss of approximately $9.8 million, or $1.72 per share, for the same period last year.
At June 30, 2014, the company had approximately $3.8 million
in cash.
2014 Full-Year Guidance
MusclePharm is increasing its full-year guidance for 2014 as
follows:
| · | 2014 full-year net sales of approximately $185 to $195 million |
| · | Diluted earnings per share in the range of $0.45 - $0.50 |
MusclePharm has provided this outlook based on assumptions of
weighted average diluted shares outstanding of 12.6 million for the year.
“With new and growing retail relationships, an increased
international presence, and development of additional brands, products and extensions backed by some of the world’s most
accomplished athletes, we believe that MusclePharm is emerging as a lifestyle brand that has broad and diverse appeal,” Pyatt
added.
2014 Second Quarter Conference Call Information
| Time: | 8:30 a.m. Eastern Time |
| Phone: | 1-877-407-9126 (domestic) |
1-201-493-6751
(international)
A live webcast will be available online on MusclePharm’s
website at http://ir.musclepharmcorp.com, where it will be archived for one year.
An audio replay of the conference call will be available through
midnight August 12 by dialing 877-407-9126 from the U.S. or Canada, or 201-612-7415 from international locations, passcode 13581597.
About MusclePharm
MusclePharm® is a scientifically driven, performance-lifestyle
company that currently develops, manufactures, markets and distributes branded nutritional supplements. The company offers a complete
range of powders, capsules, tablets and gels. Its portfolio of recognized brands, including MusclePharm® Hybrid and Core Series,
Arnold Schwarzenegger Series™ and FitMiss™, are marketed and sold in more than 110 countries and available in more
than 35,000 retail outlets globally. These clinically-proven and scientific nutritional supplements are developed through a six-stage
research process utilizing the expertise of leading nutritional scientists, doctors and universities. We believe that MusclePharm
is the innovator of the sports nutrition industry. For more information, visit www.musclepharm.com.
Follow the company at http://www.facebook.com/MusclePharm and
www.Twitter.com/MusclePharm
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, 2012, the Company’s Quarter Reports
on Form 10-Q and other filings submitted by the Company to the SEC, 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 Financial Statements
| |
For the Three Months Ended | |
| |
June 30, | |
| |
(unaudited) | |
| |
2014 | | |
2013 | |
Net sales | |
$ | 46,739,987 | | |
$ | 25,480,059 | |
Cost of goods sold | |
| 31,093,224 | | |
| 17,566,718 | |
Gross profit | |
| 15,646,763 | | |
| 7,913,341 | |
Operating expenses | |
| 15,167,248 | | |
| 10,654,272 | |
Income (loss) from operations | |
| 479,515 | | |
| (2,740,931 | ) |
Other income (expense) | |
| (71,187 | ) | |
| 319,123 | |
Net income (loss) | |
$ | 408,328 | | |
$ | (2,421,808 | ) |
| |
| | | |
| | |
Earnings per share - basic | |
$ | 0.04 | | |
$ | (0.34 | ) |
Earnings per share - diluted | |
$ | 0.03 | | |
$ | (0.34 | ) |
| |
For the Six Months Ended | |
| |
June 30, | |
| |
(unaudited) | |
| |
2014 | | |
2013 | |
Net sales | |
$ | 96,949,441 | | |
$ | 48,041,226 | |
Cost of goods sold | |
| 63,429,609 | | |
| 31,963,124 | |
Gross profit | |
| 33,519,832 | | |
| 16,078,102 | |
Operating expenses | |
| 30,616,428 | | |
| 19,540,512 | |
Income (loss) from operations | |
| 2,903,404 | | |
| (3,462,410 | ) |
Other income (expense) | |
| 241,158 | | |
| (6,321,379 | ) |
Net income (loss) | |
$ | 3,144,562 | | |
$ | (9,783,789 | ) |
| |
| | | |
| | |
Earnings per share - basic | |
$ | 0.30 | | |
$ | (1.72 | ) |
Earnings per share - diluted | |
$ | 0.27 | | |
$ | (1.72 | ) |
| |
June 30, 2014 | | |
December 31, 2013 | |
| |
(unaudited) | | |
(audited) | |
Assets | |
| | | |
| | |
Current assets | |
$ | 50,547,702 | | |
$ | 44,526,480 | |
Property and equipment - net | |
| 6,221,261 | | |
| 2,613,584 | |
Intangible assets - net | |
| 6,732,532 | | |
| 155,165 | |
Other assets | |
| 3,431,423 | | |
| 4,862,467 | |
Total assets | |
$ | 66,932,918 | | |
$ | 52,157,696 | |
Liabilities and Stockholders’ Equity | |
| | | |
| | |
Current liabilities | |
| 28,473,117 | | |
| 32,368,521 | |
Long term liabilities | |
| 366,378 | | |
| 54,639 | |
Total liabilities | |
| 28,839,495 | | |
| 32,423,160 | |
Total stockholders’ equity | |
| 38,093,423 | | |
| 19,734,536 | |
Total Liabilities and Stockholders’ Equity | |
$ | 66,932,918 | | |
$ | 52,157,696 | |
Contacts:
Matt Sheldon/Evan Pondel
PondelWilkinson Inc.
(310) 279-5980
investors@musclepharm.com
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