DENVER, CO -- 03/16/15 -- MusclePharm Corp (MSLP) today announced financial results for the fourth quarter and full year ended December 31, 2014.
2015 Full-Year Guidance:
Accelerates global growth initiatives: Opens European sales and operations office in Dublin, Ireland, subsidiary in Sydney, Australia, and lays groundwork in Brazil
Expects 2015 net sales in range of $210 to $220 Million; gross margin in range of 31 to 33 percent
"With the launch of additional brands, products and product extensions, combined with new revenue opportunities in contract manufacturing, and our clothing line, which we recently brought in house, we are confident about the company's performance in the year ahead," Pyatt added.
"We had record net revenue growth year-over-year, adding $67 million in net revenue in 2014, on top of $44 million in net revenue in 2013. We continue to experience strong revenue growth, and expect that to continue," said Brad Pyatt, MusclePharm's chairman and chief executive officer. "While we were aggressive on our 2014 guidance, we saw a number of our key customers optimizing their inventory and fulfillment purchasing patterns in the second half of the year. We are now seeing order patterns returning to normal across the board in the first quarter of 2015.
MusclePharm's brands are performing well as we strengthened relationships with retailers and introduced several new products that continue to resonate with consumers and gain distribution.
"At the same time, we accelerated our global growth initiatives, opening a European sales and operations office in Dublin, Ireland, creating a subsidiary in Sydney, Australia, and laying the groundwork for our expansion in Brazil," Pyatt said. "While these new initiatives were a headwind for short-term profitability on a GAAP basis, they are an important step as a growth company that is running lean, investing back into the business, and augmenting its supply chain to serve international markets."
2014 Fourth-Quarter Results:
The following comparison refers to results for the fourth quarter of 2014 versus the fourth quarter of 2013.
Net sales were $32.7 million, compared with $37.5 million last year. The strength of the fourth quarter last year was primarily a result of the domestic Arnold Schwarzenegger Series™ launch.
Net sales by distribution channel were as follows:
Gross profit was $7.5 million, compared with $9.7 million last year. As a percentage of net sales, gross profit was 23 percent, compared with 26 percent last year. The decrease was a result of lower net sales in 2014 fourth quarter, as well as increased expenses associated with product launches and promotions.
Operating expenses as a percentage of net sales were 73 percent, compared with 42 percent last year, reflecting MusclePharm's strategic decision to invest in building global infrastructure. Expenses include $4.1 million in stock-based compensation, and $1.0 million of amortization of prepaid stock compensation, non-cash expenses, related to restricted stock awards to employees, board members and star athlete endorsers to promote MusclePharm's brand.
Net loss for the 2014 fourth quarter was approximately $16.2 million, or $1.39 per share, compared with a net loss of approximately $4.0 million, or $0.45 per share, for the same period last year.
Adjusted EBITDA, a non-GAAP measure, which removes $4.1 million in stock-based compensation, as well as other items defined in the reconciliation table included in the press release, for the 2014 fourth quarter, was a loss of approximately $9.8 million, compared with a with a loss of $1.9 million, for the same period last year.
"We believe that our new West Coast distribution center and the upcoming consolidation of manufacturing with Capstone Nutrition are important steps in MusclePharm's vertical integration strategy and its path to profitability," said Richard Estalella, president of MusclePharm. "Additionally, we are tailoring products to meet demand in foreign markets, supported by local manufacturing with bilingual packaging.
"New revenue streams from contract manufacturing, as well as developing exclusive brands for retailers are propelling our growth and strengthening MusclePharm's leadership position in the sports nutrition market," Estalella added.
2014 Full-Year Results:
The following comparison refers to results for the full year of 2014 versus the full year of 2013.
Net sales grew 60 percent to $177.4 million from $110.9 million last year.
Net sales by distribution channel were as follows:
Gross profit was $56.0 million or 32 percent of net sales, compared with $33.2 million or 30 percent of net sales. The improvement was primarily related to process efficiencies, decrease in spoilage, and the integration and continued improvement of enterprise resource planning.
Operating expenses were $75.4 million or 42 percent of net sales, compared with $47.5 million or 43 percent of revenue. Expenses include $10.9 million in stock-based compensation, and $3.7 million of amortization of prepaid stock compensation, non-cash expenses, related to restricted stock awards to employees, board members and star athlete endorsers to promote MusclePharm's brand.
Net loss was reduced to $13.8 million, or $1.25 per share, from a net loss of $17.7 million, or $2.46 per share, for the same period last year.
Adjusted EBITDA for 2014 was approximately $3.4 million, compared with $302,000, for the same period last year.
2014 Fourth Quarter Conference Call Information:
When: Tuesday, March 17
Time: 9:00 a.m. Eastern Time
Phone: 1-877-407-9126 (domestic)
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 March 24 by dialing 877-407-9126 from the U.S. or Canada, or 201-612-7415 from international locations, passcode 13581597.