SOURCE: MusclePharm Corp.

April 01, 2013 17:36 ET

MusclePharm Releases 2012 Financial Results

Annual Gross Sales Increase 267% to $78 Million

DENVER, CO--(Marketwire - Apr 1, 2013) - MusclePharm Corporation (OTCQB: MSLP) ("MusclePharm"), a nutritional supplement company focused on active lifestyles, announced today the financial results for the year ended December 31, 2012.

For the year ended December 31, 2012 ("FY 2012"), MusclePharm reported gross sales prior to accounting for advertising related credits that were granted to customers of $77.8 million, an increase of 267% as compared to $21.2 million for the year ended December 31, 2011 ("FY 2011"). After accounting for advertising related credits that were granted to customers, MusclePharm reported net sales of $67.1 million in FY 2012, an increase of 290% as compared to $17.2 million in FY 2011. Gross margin in FY 2012 was 21.4% as compared to 13.8 % in FY 2011. The net loss attributable to common stock holders for FY 2012 was $18.9 million as compared to a net loss of $23.3 million for FY 2011.

Commenting on the announcement, MusclePharm Founder & CEO, Brad Pyatt, stated, "As in previous years, our strategy in 2012 was focused on growing sales and increasing awareness for the award-winning MusclePharm brand. While our 2013 strategic focus remains strongly biased on growing sales and increasing brand awareness, we anticipate being able to do so on a profitable basis. We are also encouraged with the recent strengthening of our balance sheet having completed two separate equity financings over the past sixty days totaling $18 million in gross proceeds."

ABOUT MUSCLEPHARM CORPORATION

MusclePharm is a healthy lifestyle company that develops and manufactures nutritional supplements which address active lifestyles, including muscle building, weight loss and maintaining general fitness through a daily nutritional supplement regimen. The products are formulated through a six-stage research process using the expertise of leading nutritional scientists. MusclePharm's products are sold to consumers in more than 90 countries and available in over 10,500 U.S. retail outlets, including Dick's Sporting Goods, GNC, Vitamin Shoppe and Vitamin World. MusclePharm products also are sold through more than 100 online channels globally, including bodybuilding.com, amazon.com and vitacost.com. MusclePharm also owns FitMiss™ (http://fitmiss.com/), a branded line of fitness supplements which is designed, dosed and formulated specifically for women with active lifestyles. For more information, please visit http://musclepharm.com/.

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/A for the fiscal year ended December 31, 2011, 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.

The Company has determined that advertising related credits that were granted to customers fell within the guidance of ASC No. 605-50-55 ("Revenue Recognition" - Customer Payments and Incentives - Implementation Guidance and Illustrations). The guidance indicates that, absent evidence of benefit to the vendor, appropriate treatment requires netting these types of payments against revenues and not expensing as advertising expense.

The Company records store support, giveaways, sales allowances and discounts as a direct reduction of sales.

Sales for the years ended December 31, 2012 and 2011 are as follows:

     
  Year Ended December 31,  
  2012     2011  
Sales $ 77,768,138     $ 21,197,518  
Discounts   (10,712,923 )     (3,984,882 )
Sales - Net $ 67,055,215     $ 17,212,636  
               

Year ended December 31, 2012 compared to the year ended December 31, 2011.

     
  Year Ended December 31,  
  2012     2011  
               
Sales - net $ 67,055,215     $ 17,212,636  
Cost of sales   52,726,934       14,845,069  
Gross profit   14,328,281       2,367,567  
General and administrative expenses   23,064,092       18,587,727  
Loss from operations   (8,735,811 )     (16,220,160 )
Other expense   (10,216,984 )     (7,060,790 )
Net loss   (18,952,795 )     (23,280,950 )
Net loss per share - basic and diluted $ (13.00 )   $ (70.30 )
Weighted average number of common shares outstanding during the period - basic and diluted   1,458,757       331,159  
               
 
 
MusclePharm Corporation and Subsidiary
Consolidated Balance Sheets
 
      December 31,  
      2012       2011  
Assets                
Current Assets:                
  Cash   $ -     $ 659,764  
  Cash - restricted     9,148       -  
  Accounts receivable - net     3,302,344       2,569,092  
  Inventory     257,975       -  
  Prepaid giveaways     358,800       -  
  Prepaid stock compensation     44,748       534,456  
  Prepaid sponsorship fees     6,249       203,333  
  Deferred equity costs     698,500       -  
  Other     272,117       50,188  
  Total current assets     4,949,881       4,016,833  
Property and equipment - net     1,356,364       907,522  
Debt issue costs - net     335,433       68,188  
Other assets     125,049       53,585  
Total assets   $ 6,766,727     $ 5,046,128  
Liabilities and Stockholders' Deficit                
Current Liabilities:                
  Accounts payable and accrued liabilities   $ 11,721,205     $ $9,359,073  
  Customer deposits     336,211       8,047  
  Debt - net     4,463,040       1,281,742  
  Derivative liabilities     -       7,061,238  
  Total Current Liabilities     16,520,456       17,710,100  
Long Term Liabilities:                
  Debt - net     4,523       307,240  
Total Liabilities   $ 16,524,979     $ 18,017,340  
Commitments and contingencies:                
Stockholders' Deficit:                
    Preferred stock, $0.001 par value, Series A Convertible Preferred Stock, 5,000,000 shares authorized, none issued and outstanding     -       -  
    Preferred stock, $0.001 par value, Series B Preferred Stock, 51 shares authorized, 51 shares issued and outstanding     -       -  
    Preferred stock, $0.001 par value, Series C Convertible Preferred Stock, 500 shares authorized, 190 and 190 issued none and 190 outstanding     -       -  
    Common Stock, $0.001 par value; 100,000,000 shares authorized, 2,778,404 and 712,860 issued and 2,747,308 and 712,860 outstanding     2,778       713  
    Treasury Stock, at cost; 31,096 and zero shares     (460,978 )     -  
    Additional paid-in capital     54,817,341       32,184,756  
    Accumulated deficit     (64,109,476 )     (45,156,681 )
    Accumulated other comprehensive loss     (7,917 )     -  
  Total Stockholders' Deficit     (9,758,252 )     (12,971,212 )
Total Liabilities and Stockholders' Deficit   $ 6,766,727     $ 5,046,128  
                 

Amounts set forth reflect the effect of the Company's 1:850 reverse split effective November 26, 2012.

Contact Information

  • MusclePharm Company Contact:

    John H. Bluher
    COO
    Telephone: 303-618-0902
    Email Contact

    MusclePharm Investor Contact:

    The Del Mar Consulting Group, Inc.
    Robert B. Prag
    President
    Telephone: 858-794-9500
    Email Contact

    Alex Partners, LLC
    Scott Wilfong
    President
    Telephone: 425-242-0891
    Email Contact