MSLP - Earnings call transcript Q1 2022

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Operator

Good afternoon, everyone and thank you for participating on today’s First Quarter 2022 Business Update Call for MusclePharm.

Joining us today is MusclePharm’s Chairman and CEO, Ryan Drexler; the company’s President and CFO, Sabina Rizvi.

Following prepared remarks, we will take your questions.

As a reminder, in order to ask a question, please go to the Investor Relations section of the company’s website at www.musclepharm.com and you will be able to submit your name and questions on the webcast link. The discussion today will include forward-looking statements except for historical information herein, matters set forth on this call are forward-looking within the meaning of the Safe Harbor provisions of the Private Securities Litigation Reform Act of 1995, including statements about the company’s commercial progress, success of its strategic relationships and projections of future financial performance. continue, identified anticipate, use plan, such intend, potential, and are as words should, word statements and such forecast, expand, predict, forward-looking that grow, estimate, project, to and forward-looking similar by variations are of the such hypothetical, will, expressions These and may, intended of identify could, believe, expect, statements. in statements the the address activities, or developments, that company All or that may are statements, events future facts occur other forward-looking statements. of historical than will believes the anticipates or statements experience, are are other the based based These on current believes expected factors made assumptions company appropriate on circumstances. and under the future developments that subject uncertainties, a are control which statements of assumptions, company. the to many are of risks and beyond Such the number of risks actual prove or anticipated underlying assumptions may results these by or those of should such materialize more indicated incorrect, uncertainties materially or vary from or statements. one forward-looking Should undue speak they’re these investors to on forward-looking are date the reliance of which place statements, made. as not cautioned Accordingly, only The any call should and and in Form current Form filings its company’s reports considered contents XX-K the of the statements Annual including factors quarterly reports with Securities including Commission, therein. and and Exchange X-K, on this on conjunction warnings, recent Form the risk XX-Q with Report cautionary on be contained a otherwise. the expressly or new intentions as Furthermore, result events, after whether in disclaims to current assumptions of update any statements information, company call, publicly any this forward-looking changes future the in GAAP non-GAAP release, the are including -- comparable our which the today’s is adjusted aid to understanding table certain measures. results quarter the XXXX announcing on business order the measures, a press reconciled to first company In most of company’s also presenting in performance, EBITDA, evaluate EBITDA, to because operating to performance, well further EBITDA the that working believes uses to as supplement as capital meet measures GAAP adjusted a provides adjusted Management to future company's requirements. the as ability period-to-period information investor, useful management company's the amortization depreciation non-cash company. measuring useful and performance of operations including the is stock-based in cash of charges, available compensation, exclusion and for The MusclePharm, I the will turn now call of to the Ryan Drexler. CEO over ahead. go Please,

Ryan Drexler

Thank you. Good afternoon.

our provide year-to-date for of then the that, growth our call the questions. first review in had and a open XXXX, results We've quarter, we the financial strong quarter. margins first were improvement in your today, revenue. performed we’re in quarter. plan, and sales I $XX.X product will in will to start On million revenue the million to with first line and After call and why an sequential for to top continue generated our this impressive XXXX. the And XX% generating Sabina $X.X positioned energy an overview will We've accomplishments in take up

high. of revenue, quarter, remains than this tripled to its of and percentage since our MP first throughout combined in Energy, a still growth our launch confidence Performance revenue performed We more Line in launch, – Since has XXXX. $X.X our in expect have from Fitness we our this quarter with its small MP we While generated over the Performance a long-term become fourth the extremely of Energy watching in Performance Energy XXXX. continue percent quarter will we base and sales larger September, million well MP sales of

achieve XXXX from our we in two be sales both million expand will on of to for we As distribution $XX annual lines, track target of these our lines.

to pipeline to as of in RTD disrupt The segment Beverage Beverage segment, our and a key XXXX. been Protein and plans, beverage our markets. global MusclePharm's fast-growing team strategically is XXXX, key a MP by half and protein beverage growth billion building Sabina. Whey drink will second is billion to time valued turn $X.XX have excited rolling over products our Market. we the long-term the Additionally, out Beverage ready-to-drink approximately Protein to to our call reach bring of beverage within today, Market RTD product and at a part Expanding our are $X.XX we I we believe expected

Sabina Rizvi

you our ended afternoon March call. Thank results joining I'll and first you, now quarter discuss the for thank for XX, the Ryan. Good XXXX.

on for quarter our supply has us of As shortages, growth industry. to in that, fourth projections. resulted earnings call, net with affecting outlined are a which and our quarter to XXXX implemented I'm in mitigate happy revenue XXXX, line we for up the report in set first measures in entire revenue the number chain this the

of we in our net Our us reformulation million enabled We SKUs, quarter in sequentially million our diversifying sequential measures fourth of believe co-manufacturing partners QX. which this increased quarter XXXX. the and to broadening deliver revenue the top-selling QX, revenue XX% packaging the took growth by from and has $XX first changes to in $XX.X include

in MP our of And over $X.X XXXX, net quarter. first the launch line since September Additionally, revenue in Performance accounted million has generated for Energy revenue. million net in $X.X its

in solid track launch stated, Energy and XXXX $XX of million guidance XXXX. and will these be net our preparing success to in with lines QX, achieve product us growth sales it together Ryan in we Fitness will believe have are generate As new met in to and equal annual energy I two on

in to fourth increased the We sequentially our and to of quarter the are adjusted the of X% for third encouraged XXXX. X.X% compared XXXX to second quarter see quarter XX.X% for margins gross consecutive

strong MP the our for Performance in margins the XX.X% margins Energy delivering line continued quarter. first gross to Additionally, with segment be very

promotion $X Operating our and the primarily as mix and We that gross a stock-based past fitness our have revenue, business. have year, freight to at of become indicated Energy our lines margins. compensation related to increased prior impact million energy related it will larger over a Performance expenses quarter. MP X% in positive out Selling by first only and low expenses for remained the on

by of turn year it quarter associated loss decreases our over increased professional warehouses, by over reformulated and a expenses our first driven expenses. driven and closure in increased the compensation operator expenses the EBITDA see to continue now primarily and and increased will continued office we debt operating $X of to XX% on and stock-based improved to and headquarters products, sales fees, the While IT focus I administrative for general in bad by with questions. margins million reserves. Adjusted the prior

Operator

you. over Mills call to turn Mr. And the that Thank I read back ahead, been John now go sir. questions to will Please have submitted.

John Mills

Great. you. Thank

year? you rolled question Fitness will of first comes The the Performance Energy from end out an margins when improve and institution, both have the Energy MP by

Sabina Rizvi

John, Hi, take that. I'll

to to energy the margins a range, actually energy above stable expect a have So mix business were XX%, XX% as will sales segment our the our margins have which continue impact continues impact on the energy we on this to have grow, positive QX, positive margins. and In grow. as will overall continues to energy

John Mills

Sabina. you Thank Great.

from retail you your us question bar a tell next about investor. market and plans Our can XXXX? What for year is fiscal

Ryan Drexler

year -- Ryan. The Hey, tough bar markets chain. last to I'll was for pretty take that. supply due John, it's

we've or So and be in Crunch, production, in some Combat we're QX either and the focused with late people, we this year, found will continue our QX for new on going to bars. our back -- stock

John Mills

XXXX, in It path million believe in that revenue and MP to question performance The performance has are $X.X approximately since lines Thank year you that out, you million on in do to can eight drink. you fiscal it energy Yes. your Ryan. rolled still from institution. months you comes approximately stated with $XX these has an achieving next generated you, generate number?

Sabina Rizvi

take can that, I John. Yes,

in with as over time short QX, achieved in So release, $X quarter we've was mentioned sales. very a we in million $X.X over our million strong with energy sales. Very

energy continue will build, this million in are confident to guidance So the in XXXX. still and sales net meeting in of $XX we

John Mills

We'll see good. if a pause in. come Very questions moment just to additional

Okay. question line And of roll in planning XXXX the your second comes a are from protein out you drink the Whey investor. next to When retail half

Ryan Drexler

John, care that – question. I'll I’ll take take

whey roll summer, we So drink, drink. our our plan to late protein out

samples, someone to market going We're great our really tasting best which announce strength. it had really aligned, have market. past ever-evolving there, excited the that's to it. partner, very and we've on is to only probably after very samples. the -- the product The We comes to feel this product best out we're increase not drink we when but is excited gotten really We that tasting about going I the some We're the market. great go a really in believe in very, believe success the with drink an we are that

So we're on are retailers labels and really we this product. now, we're on with working partner right going some to

So hopefully, late summer.

John Mills

that the operator good. if pause it the for moment to Ryan come will the additional Very Sabina, is closing and of end questions. questions remarks. turn to another over see I in. any We'll

Operator

This conference call. concludes today's

and you You your a participating, may lines. have Thank disconnect pleasant day. for

Ryan Drexler	Chairman & Chief Executive Officer
Sabina Rizvi	President & Chief Financial Officer
John Mills	Managing Partner-ICR, Inc.

MusclePharm (MSLPQ) 17 May 222022 Q1 Earnings call transcript