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 10, 2015
(Date of earliest event reported)
MusclePharm
Corporation
(Exact name of registrant as specified in its charter)
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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
(Registrants 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):
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Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
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Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
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Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)). |
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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 10, 2015, MusclePharm Corporation (the Company)
issued a press release announcing results for the quarter ended June 30, 2015. 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 Registrants 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.
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Exhibit
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Description |
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99.1 |
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MusclePharm Corporation Press Release issued August 10, 2015 |
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 10, 2015 |
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By: |
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/s/ Brad J. Pyatt |
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Name: |
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Brad J. Pyatt |
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Title: |
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Chief Executive Officer |
Exhibit 99.1
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August 10, 2015 |
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MusclePharm Reports 2015 Second Quarter Financial Results
Record Net Revenue of $50.5 million
$3.5 million Operating Cash Flow Positive for Q2 with $4.2 million in Cash
DENVER, CO (Marketwired) 08/10/15 MusclePharm Corporation (OTCQB: MSLP) (MusclePharm or the Company), a
scientifically driven, performance-lifestyle sports nutrition company, today announced financial results for the second quarter ended June 30, 2015.
Operating and Financial Highlights for Second Quarter 2015
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Net revenue was a record $50.5 million; |
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$3.5 million operating cash flow positive for Q2 with $4.2 million in cash on hand; |
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$8.5 million sales backlog; |
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Gross margin was 34.7%, up 3.1 basis points versus 2014 full year results; |
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Adjusted EBITDA was $1.1 million. |
MusclePharm is a company that has consistently demonstrated strong
growth potential and the ability to capitalize on opportunities, illustrated by record revenue for the quarter and improved gross margin, said Brad Pyatt, MusclePharms chief executive officer.
Sequentially our revenue has increased primarily due to organic growth with existing customers and sales from new product introductions. We closed the
quarter with $8.5 million in sales backlog, illustrating consumer adoption of our brands resulting in significant continued growth potential. Our Adjusted EBITDA was $1.1 million, for which we expect to see continued improvement as we move forward
in the second half of the year. We are excited by this quarters results, and expect that our business strategy will continue to grow our top line as we work toward profitability and long-term shareholder value creation.
Recent Highlights
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Ryan Drexler appointed as chairman of the Board, separating the roles of CEO and chairman. |
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Increased the number of directors on the board to seven, including five independent directors to be re-elected at the 2015 Annual Meeting of Stockholders later this month. |
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Fitness pioneer and Body-for-LIFE author Bill Phillips, former CEO and owner of EAS, named Strategic Advisor and Chief Editor of Content. |
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Signed UFC welterweight champion Robbie Lawler, number one middleweight contender Luke Rockhold and rising strawweight star Paige VanZant. |
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Ranked as the #2 best-selling protein bar (MusclePharm Combat Crunch Bar) on BodyBuilding.com. |
Financial
Results for Second Quarter 2015
Net revenue increased to a record $50.5 million, up 8% year-over-year. The Company also closed the quarter with a
sales backlog of $8.5 million compared to $5.1 million at the end of the year 2014. Net revenue growth reflects increased sales from consumer adoption of new product introductions offset by a reduction in international sales related to the
strengthening of the U.S. dollar. The Company continues to take significant steps to globalize its supply chain to address this issue.
Cash flow for the
six months ended June 30, increased to $3.2 million up from ($1.6) million in the year prior demonstrating improved financial strength.
Gross margin was 34.7%, up 3.1 basis points over 2014 full year.
Adjusted EBITDA, a non-GAAP measure was $1.1 million, which eliminates depreciation, amortization, interest, taxes, stock-based compensation, and other
expenses.
2015 Second Quarter Conference Call Information
When: Tuesday, August 11, 2015
Time: 8:00
a.m. Eastern Time
Phone: 1-877-407-9126 (domestic)
1-201-493-6751 (international)
A live webcast will be available
online on MusclePharms 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 18 by dialing 877-660-6853 from the U.S. or Canada, or 201-612-7415 from international locations, passcode 13581597.
About MusclePharm Corporation
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 120 countries and available in over 45,000 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. MusclePharm is the innovator of the sports nutrition
industry. For more information, visit http://www.musclepharm.com. Follow MusclePharm Corporation on Facebook, Twitter, and Instagram.
To sign up to receive MusclePharm news via email, please visit http://ir.musclepharmcorp.com/email-alerts
Non-GAAP Financial Measures
In addition to disclosing
financial results calculated in accordance with U.S. Generally Accepted Accounting Principles (GAAP), the earnings release contains non-GAAP financial measures 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, and issuance of common stock warrants. Management believes that the
non-GAAP measures used in this release provide investors with important perspectives into the Companys ongoing business performance. The non-GAAP financial measures disclosed by the Company should not be considered a substitute for, or
superior to, financial measures calculated in accordance with GAAP,
and the financial results calculated in accordance with GAAP and reconciliations to those financial statements should be carefully evaluated. The non-GAAP financial measures used by the Company
may be calculated differently from, and therefore may not be comparable to, similarly titled measures used by other companies. All financial data is presented on a GAAP basis except where the Company indicates its presentation is on a non-GAAP
basis. Set forth below are reconciliations of non-GAAP net income (loss) to the Companys reported GAAP net income (loss).
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
Companys 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 Companys Annual Report on Form 10-K for the fiscal year ended
December 31, 2014, the Companys Quarter Reports on Form 10-Q and other filings submitted by the Company to the SEC, copies of which may be obtained from the SECs 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
Consolidated Balance Sheets
In thousands
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June 30, |
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December 31, |
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2015 |
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2014 |
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(unaudited) |
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ASSETS |
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Current assets: |
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Cash |
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$ |
4,170 |
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$ |
1,020 |
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Accounts receivable, net |
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24,607 |
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16,644 |
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Inventory |
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14,850 |
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21,069 |
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Prepaid giveaways |
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896 |
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1,228 |
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Prepaid stock compensation, current portion |
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4,573 |
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4,476 |
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Prepaid sponsorship and endorsement fees |
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448 |
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238 |
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Prepaid expenses and other current assets |
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3,620 |
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1,742 |
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Total current assets |
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53,164 |
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46,417 |
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Property and equipment, net |
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7,632 |
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7,805 |
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Long-term investments |
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977 |
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Intangible assets, net |
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8,973 |
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7,074 |
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Prepaid stock compensation, long-term |
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4,110 |
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4,952 |
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Other assets |
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235 |
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108 |
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TOTAL ASSETS |
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$ |
75,091 |
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$ |
66,356 |
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LIABILITIES AND STOCKHOLDERS EQUITY |
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Current liabilities: |
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Accounts payable |
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$ |
37,834 |
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$ |
27,761 |
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Accrued liabilities |
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9,121 |
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7,023 |
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Line of credit |
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6,000 |
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8,000 |
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Term loan, current portion |
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1,267 |
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Other debt obligations |
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21 |
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46 |
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Total current liabilities |
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54,243 |
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42,830 |
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Term loan, non-current portion |
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2,318 |
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Other long-term liabilities |
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361 |
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146 |
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TOTAL LIABILITIES |
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56,922 |
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42,976 |
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Commitments and contingencies |
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Stockholders equity: |
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Common stock |
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14 |
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14 |
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Additional paid-in capital |
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138,600 |
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129,130 |
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Treasury stock, at cost |
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(10,039 |
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(10,039 |
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Accumulated other comprehensive loss |
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(243 |
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(66 |
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Accumulated deficit |
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(110,163 |
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(95,659 |
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TOTAL STOCKHOLDERS EQUITY |
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18,169 |
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23,380 |
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TOTAL LIABILITIES AND STOCKHOLDERS EQUITY |
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$ |
75,091 |
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$ |
66,356 |
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MusclePharm Corporation
Consolidated Statement of Operations
In thousands, except per share amounts
(unaudited)
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Three months ended |
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6/30/2015 |
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6/30/2014 |
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Revenue, net |
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$ |
50,476 |
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$ |
46,741 |
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Cost of revenue |
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32,978 |
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31,094 |
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Gross profit |
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17,498 |
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15,647 |
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Operating expenses |
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Advertising and promotion |
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8,285 |
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5,920 |
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Salaries and benefits |
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7,763 |
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5,777 |
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Selling, general and administrative |
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5,121 |
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2,357 |
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Research and development |
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921 |
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1,164 |
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Professional fees |
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2,064 |
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1,292 |
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Total operating expenses |
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24,154 |
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16,510 |
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Loss from operations |
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(6,656 |
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(863 |
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Other expense, net |
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(348 |
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(27 |
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Loss before provision for income taxes |
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(7,004 |
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(890 |
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Provision for income taxes |
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21 |
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45 |
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Net loss |
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$ |
(7,025 |
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$ |
(935 |
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Net loss per share, basic |
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(0.51 |
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(0.09 |
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Net loss per share, diluted |
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(0.51 |
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(0.09 |
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MusclePharm Corporation
Reconciliation to Non-GAAP Income (Loss) to GAAP Income
In thousands
(unaudited)
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Three months ended |
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6/30/2015 |
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6/30/2014 |
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Net loss |
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$ |
(7,025 |
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$ |
(935 |
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Non-GAAP adjustments: |
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Provision for income taxes |
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21 |
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45 |
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Depreciation and amortization of property and equipment |
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456 |
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333 |
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Amortization of intangible assets |
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273 |
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293 |
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Provision for doubtful accounts |
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68 |
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64 |
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Amortization of prepaid stock compensation |
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1,127 |
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783 |
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Amortization of prepaid sponsorship fees |
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1,821 |
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1,810 |
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Stock-based compensation |
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4,013 |
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2,091 |
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Issuance of common stock warrants to third parties for services |
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17 |
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Other expense, net |
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348 |
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27 |
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Adjusted EBITDA |
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$ |
1,119 |
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$ |
4,511 |
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Investors:
Allyson Vento
| Dana Gorman
The Abernathy MacGregor Group
(212) 371-5999
amv@abmac.com | dtg@abmac.com
Media:
Becky Warren on behalf of MusclePharm
(916) 607-0129
beckywarren22@gmail.com
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