MusclePharm: Announces more than $45 Million in Future Commitments trimmed Tto date:
DENVER, May 26, 2016-- MusclePharm (MSLP) announced a reduction of more than $45 million in future commitments to date as part the Company's ongoing restructuring program.
The Company has exited a number of sponsorship and endorsement agreements resulting in an overall reduction of approximately $39.5 million in future contractual commitments and an additional $6 million of annualized headcount reduction. In the most recent reduction, the Company entered into an amicable Settlement Agreement with ETW Corp. which places MusclePharm in a stronger financial position going forward.
Since the original restructuring announcement on August 25, 2015, MusclePharm's restructuring program has resulted in the following:
- Endorsement and sponsorship contract settlements and terminations creating $5.2 million savings for 2016 and $39.5 million of total contractual savings ($22.5 million disclosed in the Company's Quarterly Report on Form 10-Q for the quarter ended March 31, 2016);
- Completion of the sale of the Company's wholly-owned subsidiary, BioZone Laboratories, Inc., for $8.3 million at closing (with a potential additional $1.5 million payment if certain financial targets are met);
- An agreement with Prestige Capital Corporation that enables the Company to use its receivables to finance up to a total of $10 million.
"I am encouraged to see that our continuing restructuring program is producing real cost savings that are having an impact on the Company's bottom line," said Ryan Drexler, Interim Chief Executive Officer, Interim President and Chairman of the Board of Directors. "As I previously announced, we still haven't completely turned the corner, but we are making significant progress in stabilizing the company and positioning for future growth and value creation."