Executive Summary

Q1 2021 was profitable despite supply shortages: net revenue $13.1M, gross margin 28.1%, net income $0.094M, and adjusted EBITDA $0.48M .
Operating expenses declined ~$0.8M (−19.8%), evidencing continued cost control from the turnaround strategy .
Management highlighted momentum into Q2 as March and April sales increased vs prior year, and closed a major distributor ahead of MP Performance Energy launch in Summer 2021 .
No quantified guidance was issued; subsequent communications framed catalysts around energy beverages and distribution expansion, with a target of ~$30M energy sales in 2023 and expectations for sequential revenue growth in Q4 2021 .

What Went Well and What Went Wrong

What Went Well

Profitability sustained: net income $0.094M vs $(0.060)M in Q1 2020; adjusted EBITDA $0.48M vs $0.74M in Q1 2020, supported by opex reduction and execution discipline .
Cost discipline: operating expenses fell ~$0.8M (−19.8%), reflecting “focus on cost containment” and omni-channel strategy progress .
Commercial momentum and category expansion: “March and April achieving sales increases over the prior year periods” and “closed deal with major distributor” ahead of energy beverage launch .

What Went Wrong

Top-line compression from supply constraints: revenue fell to $13.1M (−19% YoY), and gross margin slipped to 28.1% from 29.6% YoY amid industry-wide supply shortages .
Sequential softness vs Q4: revenue $13.1M vs $15.1M; net income $0.094M vs $2.8M; diluted EPS $0.00 vs $0.06—reflecting tougher cost/mix and seasonal dynamics .
Balance sheet pressure: cash declined to $0.592M from $2.003M at year-end; working capital deficit persisted with accounts payable at $13.8M, underscoring liquidity constraints .

Financial Results

Metric	Q1 2020	Q4 2020	Q1 2021
Revenue ($USD Millions)	$16.231	$15.131	$13.121
Gross Margin (%)	29.6%	31.7%	28.1%
Net Income ($USD Millions)	$(0.060)	$2.820	$0.094
Diluted EPS ($USD)	$(0.00)	$0.06	$0.00
Adjusted EBITDA ($USD Millions)	$0.744	$0.928	$0.478
Operating Expenses ($USD Millions)	$4.258	$3.739	$3.417

Notes:

Q1 2021 vs prior year: revenue −$3.1M; gross margin −150 bps; net income improved by $0.154M; opex −$0.84M .
Q1 2021 vs prior quarter: revenue −$2.01M; gross margin −360 bps; net income −$2.726M; diluted EPS −$0.06 .

Segment breakdown: MusclePharm reports a single segment; no segment disaggregation provided in Q1 2021 materials .

Guidance Changes

Metric	Period	Previous Guidance	Current Guidance	Change
Near-term revenue trajectory	Q2 2021	Not provided	“Momentum into the second quarter” following March/April sales increases	New qualitative outlook
Energy beverage launch	Summer 2021	Not provided	Launch of MP Performance Energy beverages; distributor secured	New category expansion
Energy beverage sales target	FY 2023	Not provided	~$30M annual sales expected (MP and FitMiss Energy)	New long-term target
Q4 revenue trajectory	Q4 2021	Not provided	Company expects sequential revenue growth driven by new formulation and energy drink production	New qualitative outlook

No quantified ranges for revenue, margins, tax rate, or opex were issued in Q1 2021; subsequent quarter communications remained qualitative .

Earnings Call Themes & Trends

Topic	Previous Mentions (Q-2: Q3 2020; Q-1: Q4 2020)	Current Period (Q1 2021)	Trend
Supply chain/protein input costs	Benefit from lower protein prices and reduced discounts improved gross profit in late 2019 and Q3 2020	Industry-wide temporary supply shortages impacted sales; gross margin declined YoY	Deteriorating near term (shortages), mixed margins
Operating expense discipline	Opex reductions in FY20 (−$6.8M), cost controls a turnaround pillar	Opex down ~$0.8M (−19.8%) in Q1 2021	Improving (structural)
Omni-channel/distribution mix	Costco concentration; shift toward e-commerce; channel mix volatility in 2020	Broadened distribution highlighted; momentum into Q2; distributor secured for energy beverages	Improving reach, diversifying
New products/energy beverages	Strategic plan to enter new categories (FY20 commentary)	Energy beverages launching Summer 2021; FitMiss gender-specific targeting	Positive strategic expansion
Liquidity and financing	Ongoing financing arrangements, working capital deficits and factoring	Cash down to $0.592M; continued secured borrowing dynamics	Ongoing constraint
Legal/regulatory matters	Multiple disputes (ThermoLife, IRS, 4Excelsior, White Winston) with potential liabilities	No new Q1-specific updates in the press release	Stable risk backdrop

Management Commentary

Ryan Drexler (CEO): “I am very pleased with our profitable quarter, despite the sales shortfall due to the temporary supply shortage affecting our industry… With March and April achieving sales increases over the prior year periods we have momentum going into the second quarter…” .
Sabina Rizvi (President & CFO): “We have delivered positive profit for the last two quarters… we will continue to focus on cost containment, while driving top line growth… and expanding into new distribution and brand expansion opportunities.” .
Strategic expansion: “We have some of the leading brands… entering new categories such as energy beverages… rollout of three new energy beverages… tapping into the gender specific market with our popular FitMiss brand” .

Q&A Highlights

The Q1 2021 earnings call transcript could not be retrieved due to a database inconsistency; therefore, Q&A details (analyst topics, clarifications) are unavailable from primary sources at this time . Conference call logistics were provided, but no transcript content could be accessed .

Estimates Context

Wall Street consensus (S&P Global) for Q1 2021 EPS and revenue was unavailable due to missing CIQ mapping for ticker MSLPQ; as a result, estimate comparisons could not be performed [SpgiEstimatesError]. Consensus estimates unavailable via S&P Global.

Key Takeaways for Investors

Near-term: The quarter confirms profitability amid constrained supply; cost controls are durable, but input and freight pressures can swing margins—expect volatility until supply normalizes .
Top-line trajectory: YoY revenue decline and sequential softness vs Q4 reflect shortages; management points to Q2 momentum and Q4 sequential growth from new formulations and energy drinks .
Strategic catalyst: Energy beverages entering Summer 2021 with distribution secured; category could contribute meaningfully over time (management’s $30M FY2023 target) if execution and funding support scale-up .
Liquidity watch: Low cash and heavy payables necessitate close monitoring of receivables factoring, inventory financing, and note arrangements; execution risk rises if working capital tightens further .
Concentration risk: Customer/channel concentration (e.g., Costco in 2020) and legal/regulatory overhangs (IRS, ThermoLife, 4Excelsior) remain non-trivial—position sizing should reflect headline risk .
Estimate dynamics: With consensus unavailable, model sensitivity should focus on revenue recovery timing, gross margin trajectory (protein and freight), and opex discipline; absence of formal guidance raises dispersion in outcomes [SpgiEstimatesError].
Trading implications: Stock may react to concrete evidence of supply normalization and successful energy launch/distribution scaling; conversely, any liquidity stress signals or margin compression on higher protein costs could be negative .

Additional Data (Context)

Q2 2021 preview (for trajectory context): revenue $14.9M (+14% seq), gross margin 14.6% (down on protein prices), net loss $(2.3)M; adjusted EBITDA $(0.9)M—illustrates near-term margin pressure from inputs despite sequential sales improvement .
Q4 2020 baseline: revenue $15.1M, gross margin 31.7%, net income $2.8M; adjusted EBITDA $0.9M—strong margins before 2021 input headwinds .

MusclePharm Corp (MSLPQ)·Q1 2021 Earnings Summary