Olivier Colombo - Consultant & Corporate Advisor
My Blog

MSLP - 1Q2014 - Conference call highlights

I just wanted to share with you some highlights of their conference call that has just finished and why I continue to like the stock and believe it will continue to perform and should reach my 15$ price target later this year.

Their CEO was very upbeat about their future, saying they have just scratched the surface of their growth, with the goal of being a 500Mil$ revenues in the coming years. Social media (Facebook and Twitter) is their favorite advertising platform as it touches their targeted audience with hardly  any costs.

  • Management number 1 goal is profitability.
  • Gross margins were super strong in 1Q reaching 35.6% and management reiterated their will meet or beat their 2014 goal of 33%
  • Arnold Schwarzenegger brand that launched end of September 2013, represented roughly 30% of their 50Mil$ revenue in the quarter meaning 15Mil$. This is the best launch in history of any Sports Nutrition product. These results are much higher than management had expected, and their goal for this brand is to hit 100mil$ in revenues in the next 2 years.
  • The brick & mortar world (GNC and Vitamin Shoppe) offers a huge upside potential as GNC for the moment is only 5% of their business.
  • International saw 190% growth year over year
  • Company continues to invest in safety and effectiveness of their products, and we should see very soon some publications showing the benefit of using MSLP products. This team of R&D is headed by a former FDA advisor.
  • New product launches will take place in end of 3Q early 4Q. They plan to have a read to drink offering, and also an energy product passed on a new drops technology.
  • SEC investigation should hopefully be behind the Co by end of 2Q and then they will apply for the Nasdaq listing.
  • Seem very comfortable with their new guidance of revenues of 165-175Mil$ and EPS of 41-51cts. I believe those numbers will prove conservative. Having a company increase it’s guidance only 3 months after providing them in late January shows they feel very relax.