Second quarter revenue increases to $60.5 million Year-to-date free
cash flow increases to $15.3 million BOULDER, Colo., Aug. 5
/PRNewswire-FirstCall/ -- Gaiam, Inc. (NASDAQ: GAIA), a lifestyle
media company announced today results for its second quarter ended
June 30, 2009. Gaiam will host a conference call today, August 5,
2009, at 2:30 p.m. MDT (4:30 p.m. EDT) to review the results.
Dial-in No.: 800-619-0355 (domestic) or 212-547-0278
(international) Passcode: GAIAM Revenue for the second quarter
ended June 30, 2009 increased 5.7% to $60.5 million from $57.2
million recorded in the same period last year. The increase in
sales was primarily due to the solar business, coupled with a solid
improvement in the Company's trade domestic business, partially
offset by a planned reduction in catalog circulation. Gross profit
decreased to $31.4 million or 52.0% of revenue for the second
quarter of 2009, from $36.2 million, or 63.2% of revenue, in the
comparable quarter last year. The change in gross margin reflects
the Company's investment in the lower margin solar business and the
implementation of media category management at retail. Selling and
operating expenses decreased $3.0 million, or 9.0%, to $30.7
million during the second quarter of 2009, from $33.7 million
during the same quarter last year, reflecting cost saving measures,
including reducing payroll costs, optimizing the direct business
through reduced catalog prospecting and closing non-profitable
businesses. Net loss for the quarter was $1.0 million, or $0.04 per
share, compared to net income of $2.6 million in the same period
last year. Gaiam's prior year results included a gain on the
initial public offering of its solar subsidiary Real Goods Solar,
partially offset by impairments of some of its media library and
related assets. Excluding these items, second quarter 2008 results
would have been a loss of $0.1 million. In the second quarter of
2009, Gaiam generated free cash flow of $8.2 million, a $13.8
million improvement from cash use of $5.6 million during the same
quarter of the prior year. For the first six months of the year,
Gaiam's free cash flow increased to $15.3 million, a $24.2 million
improvement from cash use of $8.9 million during the same period
last year. During the quarter the Company repurchased 932,000
shares of its common stock for $2.8 million. This brings the total
number of shares repurchased by the Company since beginning its
share repurchase initiative, to 4.8 million shares. These purchases
represent over 20% of the approximately 23 million shares currently
outstanding. The Company still has 2.7 million shares remaining in
its authorized share repurchase program. For the first half of
2009, the Company generated $17.1 million in cash from operations
and ended the quarter with $42.8 million in cash, up $10.8 million
for the six months and $4.6 million for the quarter. The Company's
current ratio during the last six months improved to 4.2. During
the quarter the Company signed an exclusive home video license
agreement with Discovery Communications. Under the three-year
license, Gaiam will release programming from Discovery
Communications networks, including Discovery Channel, TLC, Animal
Planet, ID: Investigation Discovery, Science Channel, HD Theater,
and The Military Channel. "We achieved top line growth in a
difficult retail environment and increased our shelf space in both
branded store within a store presence, which increased to 11,000
stores, and category management. The strategic licensing
partnership with Discovery Communications leverages our strong
retail breadth and merchandise expertise to distribute educational
content and increase our non-theatrical market share," said Lynn
Powers, President and CEO. "Additionally, the cost cutting measures
we implemented continue to improve our results this quarter." "We
are pleased with the $15.3 million of free cash flow and the
increase of our top line, after three quarters of sluggish economy
driven declines. We believe the recent revenue increase, combined
with our new strategic relationships and our strong financial
position, constitute a good base for solid growth," said Jirka
Rysavy, Chairman. A replay of the call will begin approximately one
hour after the end of the call and will continue until 11:00 p.m.
CDT on August 10, 2009. Replay number: 800-627-0199 For more
information about Gaiam, please visit http://www.gaiam.com/, or
call 1-800-869-3603. This press release includes forward-looking
statements relating to matters that are not historical facts.
Forward-looking statements may be identified by the use of words
such as "expect," "intend," "believe," "will," "should" or
comparable terminology or by discussions of strategy. While Gaiam
believes its assumptions and expectations underlying
forward-looking statements are reasonable, there can be no
assurance that actual results will not be materially different.
Risks and uncertainties that could cause materially different
results include, among others, introduction of new products and
services, completion and integration of acquisitions, the
possibility of negative economic conditions, and other risks and
uncertainties included in Gaiam's filings with the Securities and
Exchange Commission. Gaiam assumes no duty to update any
forward-looking statements. GAIAM, INC. CONDENSED CONSOLIDATED
STATEMENTS OF OPERATIONS (Unaudited) (In thousands, except per
share data) Three Months Ended Three Months Ended June 30, 2009
June 30, 2008 ------------- ------------- Net revenue $60,475
100.0% $57,217 100.0% Cost of goods sold 29,029 48.0% 21,064 36.8%
------ ------ Gross profit 31,446 52.0% 36,153 63.2% Selling and
operating 30,685 50.7% 33,704 58.9% Corporate, general and
administration 2,937 4.9% 3,096 5.4% Other expenses, net --- 0.0%
26,708 46.7% --- ------ Loss from operations (2,176) -3.6% (27,355)
-47.8% Interest and other income 61 0.1% 31,539 55.1% -- ------
Income (loss) before income taxes (2,115) -3.5% 4,184 7.3% Income
tax expense (benefit) (838) -1.4% 1,653 2.9% ---- ----- Net income
(loss) (1,277) -2.1% 2,531 4.4% Net loss attributable to the
noncontrolling interest 268 0.4% 50 0.1% --- -- Net income (loss)
attributable to Gaiam, Inc. $(1,009) -1.7% $2,581 4.5% =======
====== Weighted-average shares outstanding: Basic 23,076 24,707
Diluted 23,076 24,895 Net income (loss) per share attributable to
Gaiam, Inc. common shareholders: Basic $(0.04) $0.10 Diluted
$(0.04) $0.10 GAIAM, INC. CONDENSED CONSOLIDATED STATEMENTS OF
OPERATIONS (Unaudited) (In thousands, except per share data) Six
Months Ended Six Months Ended June 30, 2009 June 30, 2008
------------- ------------- Net revenue $116,398 100.0% $122,390
100.0% Cost of goods sold 53,966 46.4% 45,259 37.0% ------ ------
Gross profit 62,432 53.6% 77,131 63.0% Selling and operating 64,628
55.5% 68,637 56.1% Corporate, general and administration 6,206 5.3%
6,475 5.3% Other expenses, net --- 0.0% 26,708 21.8% --- ------
Loss from operations (8,402) -7.2% (24,689) -20.2% Interest and
other income 135 0.1% 32,008 26.2% --- ------ Income (loss) before
income taxes (8,267) -7.1% 7,319 6.0% Income tax expense (benefit)
(3,087) -2.7% 2,891 2.4% ------ ----- Net income (loss) (5,180)
-4.4% 4,428 3.6% Net loss attributable to the noncontrolling
interest 1,081 0.9% 366 0.3% ----- --- Net income (loss)
attributable to Gaiam, Inc. $(4,099) -3.5% $4,794 3.9% =======
====== Weighted-average shares outstanding: Basic 23,514 24,895
Diluted 23,514 25,120 Net income (loss) per share attributable to
Gaiam, Inc. common shareholders: Basic $(0.17) $0.19 Diluted
$(0.17) $0.19 GAIAM, INC. CONDENSED CONSOLIDATED BALANCE SHEETS (In
thousands, except per share information) June 30, December 31, 2009
2008 ---- ---- (Unaudited) Assets Current assets: Cash and cash
equivalents $42,755 $31,965 Accounts receivable, net 21,585 33,664
Inventory, net 28,251 40,782 Deferred advertising costs 2,004 2,578
Receivable and deferred tax assets 13,496 15,448 Other current
assets 4,560 4,795 ----- ----- Total current assets 112,651 129,232
Property and equipment, net 28,216 27,381 Media library, net 12,056
12,102 Deferred tax assets, net 7,985 6,076 Goodwill 24,166 23,180
Other intangibles, net 771 880 Notes receivable and other assets
3,211 3,247 ----- ----- Total assets $189,056 $202,098 ========
======== Liabilities and Equity Current liabilities: Accounts
payable $21,026 $26,567 Accrued liabilities 5,672 6,885 ----- -----
Total current liabilities 26,698 33,452 Commitments and
contingencies Equity: Gaiam, Inc. shareholders' equity: Class A
common stock, $.0001 par value, 150,000,000 shares authorized,
17,684,226 and 18,541,201 shares issued and outstanding at June 30,
2009 and December 31, 2008, respectively 2 2 Class B common stock,
$.0001 par value, 50,000,000 shares authorized, 5,400,000 issued
and outstanding at June 30, 2009 and December 31, 2008 1 1
Additional paid-in capital 161,998 163,652 Accumulated other
comprehensive income 88 88 Accumulated deficit (14,568) (10,275)
------- ------- Total Gaiam, Inc. shareholders' equity 147,521
153,468 Noncontrolling interest 14,837 15,178 ------ ------ Total
equity 162,358 168,646 ------- ------- Total liabilities and equity
$189,056 $202,098 ======== ======== Non-GAAP Financial Measures The
Company has utilized the non-GAAP information set forth below as an
additional device to aid in understanding and analyzing its
financial results for the three months ended June 30, 2008.
Management believes that these non-GAAP measures will allow for a
better evaluation of the operating performance of the Company's
business and facilitate meaningful comparison of the results in the
current period to those in prior periods and future periods.
Reference to these non-GAAP measures should not be considered a
substitute for results that are presented in a manner consistent
with GAAP. A reconciliation of the Company's GAAP net loss to its
non-GAAP net loss for the three months ended June 30, 2008 is set
forth below (in millions except share and per share data): Three
Months Ended June 30, 2008 ------------- Net income $2.6 Exclusion
of non-cash gain on issuance of Real Goods Solar stock (19.2)
Exclusion of non-cash impairment of goodwill and intangible assets
16.5 ---- Non-GAAP net income (loss) $(0.1) ===== Non-GAAP weighted
average shares used in earnings per share calculation 24,707,000
========== Non-GAAP earnings (loss) per share $(0.00) ======
DATASOURCE: Gaiam, Inc. CONTACT: Carole Buyers, VP Corporate
Finance and Investor Relations of Gaiam, Inc., +1-303-222-3808, ;
or John Mills, Senior Managing Director of ICR, +1-310-954-1105, ,
for Gaiam, Inc. Web Site: http://www.gaiam.com/
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