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Author Topic: MusclePharm to Position Company for Future Profitability - 08-25-15  (Read 14210 times)
TK
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« on: August 25, 2015, 03:41:55 PM »

DENVER--(BUSINESS WIRE)-- MusclePharm Corporation (OTCQB:MSLP), a scientifically driven, performance-lifestyle sports nutrition company, today announced plans to better focus and align the company's resources toward profitable growth. The company believes this initiative could yield cost savings in excess of $20 million on an annual basis going forward, and profitability in 2016 and beyond. MusclePharm will be working to increase operating profit margins to 10 percent and earnings before interest, taxes, depreciation and amortization (EBITDA) margins to 15 percent by 2020.

Today's announcement follows recent moves by MusclePharm to build on the company's core strengths as a leading sports nutrition brand. As detailed in the company's second quarter results ended June 30, 2015, recent highlights include:

• Net quarterly revenue of a record $50.5 million;

• $3.5 million operating cash flow positive for Q2 with $4.2 million in cash on hand;

• $8.5 million sales backlog;

• Gross margin was 34.7%, up 3.1 percentage points versus 2014 full year results;

In addition, the company continues to focus on instituting best practices in corporate governance at the Board level. Ryan Drexler, an experienced nutrition and fitness executive and investment manager, was recently appointed as the new Chairman of the Board who will also play an executive role in the company. The company also recently appointed three additional independent Directors to the MusclePharm Board, thereby expanding the total Board to seven Directors.

"I joined the board to help position the company as it continues pursuing future growth opportunities, while also providing an investor perspective to the management of our growth," said Mr. Drexler. "I believe this is the first in many steps we are taking to position the company for profitability and success."

As a result of today's restructuring announcement, MusclePharm anticipates the closure of certain facilities, employee reductions and the termination of contracts which could result in a one-time charge of up to $20 million to $30 million. The amount of the anticipated charge is under review and preliminary and therefore is subject to change.

"Reducing costs will unfortunately include the elimination of some positions throughout the company," said Brad Pyatt, MusclePharm's CEO. "These staffing reductions are intended to rightsize our business and reduce related costs as we work toward profitability and long-term shareholder value creation."

Although MusclePharm does not expect these cost savings initiatives to affect top line revenue, the company is adjusting its full year projected revenue range to between $190 million and $200 million.

MusclePharm expects to make further announcements as details of the restructuring are implemented. At this time, the company is not able to make a more precise determination of the estimated amount or range of amounts to be incurred for each major type of cost reduction, nor the exact charges and future cash expenditures.
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TK
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« Reply #1 on: August 25, 2015, 10:15:57 PM »

From June 24

On June 24, 2015, the Board of Directors (the "Board") of MusclePharm Corporation (the "Company") appointed Ryan Drexler to its Board of Directors and elected Mr. Drexler as Chairman of the Board. The Board has determined that Mr. Drexler qualifies as an independent director under the rules of the NASDAQ Stock Market LLC.

Ryan Drexler, Age 44, is currently the Chief Executive Officer of Consac, LLC ("Consac"), a privately held firm that invests in the securities of publicly traded and venture-stage companies. Previously, Mr. Drexler served as President of Country Life Vitamins, a family owned nutritional supplements and natural products company he joined in 1993. In addition to developing strategic objectives and overseeing acquisitions for Country Life, Mr. Drexler created new brands that include the BioChem family of sports and fitness nutrition products. Mr. Drexler negotiated and led the process which resulted in the sale of Country Life in 2007 to the Japanese conglomerate Kikkoman Corp. Mr. Drexler graduated from Northeastern University, where he earned a BA in political science.

There is no family relationship between Mr. Drexler and any of our other officers and directors. There are no understandings or arrangements between Mr. Drexler and any other person pursuant to which Mr. Drexler was appointed as director. Mr. Drexler will be compensated pursuant to the Company's Non-Employee Director Compensation Program. The Company believes Mr. Drexler is qualified to serve as a director because of his extensive knowledge of health and nutrition products and his experience as an investor.

Except for the aforementioned appointments and actions, there has been no transaction or currently proposed transaction, in which the Company was or is to be a participant and the amount involved exceeds $120,000, and in which any of Mr. Drexler had or will have a direct or indirect material interest since the beginning of the Company's last fiscal year.

As of the date hereof, Mr. Drexler owns or controls approximately 1.4 million shares of the outstanding common stock of the Company. Prior to appointment of Mr. Drexler to the Board of Directors, Consac entered into a non-disclosure, confidentiality and standstill agreement with the Company.

Employment Agreements

On June 24, 2015, the Company entered into a new executive employment agreement with Brad Pyatt, the Chief Executive Officer of the Company ("Pyatt Agreement") and Richard Estalella ("Estalella Agreement"), the President of the Company, pursuant to which Mr. Pyatt and Mr. Estalella agreed to serve as the Chief Executive Officer and President of the Company for an initial term of five years.

The Pyatt Agreement is automatically renewed for successive one year terms after the initial five year term unless terminated by either party at least three months prior to the end of the initial five year term or any successive one year term, as applicable. The Company agrees to pay Mr. Pyatt a base salary of $425,000 for 2015, $570,000 for 2016 and $592,000 for 2017 ("Pyatt Base Salary"). The annual adjustments after 2017 shall be determined by the Compensation Committee of the Board ("Compensation Committee"). In addition, Mr. Pyatt is also entitled to receive (i) an annual incentive bonus of up to 125% of the Pyatt Base Salary, based on his substantial performance as determined by the Compensation Committee ("Pyatt Annual Bonus") and (ii) restricted shares, incentive stock options and/or performance shares or combination thereof to be determined by the Compensation Committee ("Pyatt Long Term Incentive"). The fixed value of the Pyatt Long Term Incentive granted to Mr. Pyatt shall be $817,000 for 2015, $840,000 for 2016 and $873,600 for 2017. In addition to the Pyatt Long Term Incentive, Mr. Pyatt shall be eligible for grants of awards available to senior executive officers of the Company under the Company's Equity Incentive Plans as the Compensation Committee or the Board of Directors may from time to time determine.

Upon termination of employment for any reason, Mr. Pyatt shall be entitled to:

(A) all Pyatt Base Salary earned through the date of termination; (B) any and all reasonable expenses paid or incurred by Mr. Pyatt; (C) any accrued but unused vacation time through the termination date; and (D) any Pyatt Annual Bonuses earned through the date of termination; and (E) all Pyatt Long Term Incentives earned prior to termination. Additionally, if Mr. Pyatt's employment is terminated prior to expiration of the employment period other than for Cause (as defined in the Pyatt Agreement) or Mr. Pyatt terminates his employment without Good Reason (as defined in the Pyatt Agreement) and other than for a Change in Control (as defined in the Pyatt Agreement), Mr. Pyatt shall be entitled to receive a cash amount equal to 300% of the sum of the Pyatt Base Salary, Pyatt Annual Bonus and Pyatt Long Term Incentive earned during the year immediately preceding the date of termination.

The Pyatt Agreement also contains other standard terms, including but not limited to clawback rights, benefits, and non-competition provisions.

The Estalella Agreement is automatically renewed for successive one year terms after the initial five year term unless terminated by either party at least three months prior to the end of the initial five year term or any successive one year term, as applicable. The Company agrees to pay Mr. Estalella a base salary of $375,000 for 2015, $484,500 for 2016 and $503,880 for 2017 ("Estalella Base Salary"). The annual adjustments after 2017 shall be determined by the Compensation Committee. In addition, Mr. Estalella is also entitled to receive
(i) an annual incentive bonus of up to 125% of the Estalella Base Salary, based on his substantial performance as determined by the Compensation Committee ("Estalella Annual Bonus") and (ii) restricted shares, incentive stock options and/or performance shares or combination thereof to be determined by the Compensation Committee ("Estalella Long Term Incentive"). The fixed value of the Estalella Long Term Incentive granted to Mr. Estalella shall be $695,000 for 2015, $714,000 for 2016 and $742,500 for 2017. In addition to the Estalella Long Term Incentive, Mr. Estalella shall be eligible for grants of awards available to senior executive officers of the Company under the Company's Equity Incentive Plans as the Compensation Committee or the Board of Directors may from time to time determine.

Upon termination of employment for any reason, Mr. Estalella shall be entitled to: (A) all Estalella Base Salary earned through the date of termination; (B) any and all reasonable expenses paid or incurred by Mr. Estalella; (C) any accrued but unused vacation time through the termination date; and (D) any Estalella Annual Bonuses earned through the date of termination; and (E) all Estalella Long Term Incentives earned prior to termination. Additionally, if Mr. Estalella's employment is terminated prior to expiration of the employment period other than for Cause (as defined in the Estalella Agreement) or Mr. Estalella terminates his employment without Good Reason (as defined in the Estalella Agreement) and other than for a Change in Control (as defined in the Estalella Agreement), Mr. Estalella shall be entitled to receive a cash amount equal to 200% of the sum of the Estalella Base Salary, Estalella Annual Bonus and Estalella Long Term Incentive earned during the year immediately preceding the date of termination.

The Estalella Agreement also contains other standard terms, including but not limited to clawback rights, benefits, and non-competition provisions.

The foregoing description of the principal terms of the Pyatt Agreement and Estalella Agreement is a general description only, does not purport to be complete, and is qualified in its entirety by reference to the terms of the Pyatt Agreement and Estalella Agreement, which will be attached as exhibits to the Company's Quarterly Report on Form 10-Q for the quarter ended June 30, 2015 and, when filed, such Pyatt Agreement and Estalella Agreement shall be incorporated by reference herein.
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ritch
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« Reply #2 on: August 25, 2015, 10:22:31 PM »

I'm sure the getbig nation is losing sleep over this post unable to contain their excitement! 

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?
TK
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« Reply #3 on: September 08, 2015, 03:02:22 PM »

MusclePharm Corporation (OTCQB: MSLP), a scientifically driven, performance-lifestyle sports nutrition company, today announced approval of the final settlement with the United States Securities and Exchange Commission, as was announced by the SEC earlier today.

The SEC investigation had focused on disclosure and internal control deficiencies dating from 2010-2013 which have since been revised. The company during 2014 amended its filings making expanded disclosures which principally relate to executive perquisites and related-party transactions, and has received voluntary repayment of certain amounts from current and former executives for which inadequate supporting documentation of business purpose was available. In connection with the settlement, MusclePharm neither admitted nor denied the allegations. The settlement provides for a civil monetary penalty in the amount of $700,000 of which approximately $400,000 has already been paid into escrow by the company, but does not impose any restrictions on MusclePharm’s business activities. MusclePharm agreed as part of the settlement to retain an independent consultant mutually acceptable to the company and the SEC in connection with review of compliance and disclosure matters for a 12-month period.

Brad Pyatt, the company’s chief executive officer, and former audit committee chair Donald Prosser settled related proceedings without admitting or denying the allegations and agreed to pay separate civil monetary penalties. Former chief financial officers L. Gary Davis and Lawrence Meer also settled similar proceedings.

“MusclePharm has previously instituted new and expanded disclosure controls and procedures that addressed many of the issues described in the SEC order,” a MusclePharm spokesman said. “The company is pleased with the outcome of the proceedings and looks forward to putting this behind it.”



http://www.businesswire.com/news/home/20150908006550/en/#.Ve9aRRFVikp
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deadz
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« Reply #4 on: July 19, 2016, 10:00:01 PM »

 Huh
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