BOULDER, Colo., March 10 /PRNewswire-FirstCall/ -- Gaiam, Inc.
(NASDAQ: GAIA), a lifestyle media company announced today results
for its fourth quarter and fiscal year ended December 31, 2008.
Gaiam will host a conference call today, March 10, 2009, at 2:30
p.m. MDT (4:30 p.m. EDT) to review the 2008 results. Dial-in No.:
888-950-8038 (domestic) or 210-234-0014 (international) Passcode:
GAIAM Revenue for the fourth quarter ended December 31, 2008
decreased 8.9% to $74.5 million from $81.8 million recorded in the
same quarter last year, primarily due to a decrease in consumer
spending and conservative retail buying throughout the holiday
season. Gross profit decreased to $38.3 million or 51.4% of revenue
for the fourth quarter of 2008, from $51.1 million, or 62.5% of
revenue, in the comparable quarter last year. The change in gross
margin reflects the company's investment in the lower margin solar
business, continued aggressive retail expansion and absorption of
increased product and freight costs. Selling and operating expenses
decreased $1.5 million, or 3.7%, to $39.7 million during the fourth
quarter of 2008 from $41.2 million during the same quarter last
year, partially reflecting recent cost control initiatives. Other
expenses of $42.3 million for the quarter include non-cash charges
for goodwill impairment of $27.2 million from the company's 56%
owned solar subsidiary, Real Goods Solar and $15.1 million related
to the company's goodwill and intangible assets in its direct
segment. The goodwill impairments, resulting from the application
of SFAS No. 142, Goodwill and Other Intangible Assets, were
primarily driven by the decline in the market price of the
company's common shares (Nasdaq) experienced in the fourth quarter.
As a result of these charges, the company recorded a net loss of
$30.3 million in the quarter, or $1.26 per share, compared to
earnings of $4.2 million, or $0.17 per share, in the fourth quarter
of 2007. Excluding the above impairment charges, disposition of
businesses and the loss from consolidating Real Good Solar, the
company's fourth quarter net loss would have been $1.2 million, or
$0.05 per share. For the year ended December 31, 2008, Gaiam
recorded net revenue of $257.2 million, a 2.2% decrease from $262.9
million in 2007. Including the impairment charges, the company
recorded a net loss of $35.6 million, or $1.46 per share, compared
to net income of $8.5 million, or $0.34 per share, for the last
fiscal year. Excluding the impairment charges, disposition of
businesses and the loss from consolidating Real Goods Solar, the
company's net income would have been $0.8 million, or $0.03 per
share for the year. Driven by the impairment charges, Gaiam
generated an $8.4 million tax refund and $7.0 million current tax
credit. "While our fourth quarter results reflect the broader
market trends, we remain committed to our growth strategies and
expect to deliver measurable financial returns for 2009 even if the
economic climate does not improve," commented Lynn Powers, Gaiam's
President. "We continue to make great progress on our category
management and store within a store growth initiatives ending the
year with over 10,000 store-within-store presentations, a 43%
increase from a year ago. In addition, we continue to implement
cost savings measures, including renegotiating freight contracts
and product costs with our manufacturers, overhead restructuring,
disposing of unprofitable businesses, and optimizing our direct
business through reduced prospecting and increased online customer
acquisition strategies." "We ended the year with $32.0 million in
cash, no debt and a current ratio of 3.9. Our goal for 2009 is to
grow revenue and focus on free cash flow. We are already in the
process of streamlining our business units that experienced
negative cash flow last year. We will continue to use the current
macroeconomic environment and our strong balance sheet as an
opportunity to further expand our branded store-within-store
presence at retail," said Jirka Rysavy, Gaiam Chairman and CEO.
"Lynn Powers, our President and CEO of North America and my only
direct report for the last several years, will assume the title of
CEO in addition to her title of President. She will focus on making
2009 our highest revenue and best free cash flow year ever. Lynn
will continue to report to me as I will focus my time on growing
our community and making it an income contributor." Carole Buyers
joined Gaiam as VP of Corporate Finance and Investor Relations.
Carole came to Gaiam from The Boston Company (Bank of New York
Mellon), where she served as Vice President. For several years she
also covered Gaiam when she was a sell side analyst for RBC Capital
Markets. 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
March 24, 2009. Replay number: 888-568-0623 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. Contacts: Carole Buyers VP Corporate
Finance and Investor Relations 303-222-3808 John Mills Senior
Managing Director, ICR 310-954-1105 GAIAM, INC. CONDENSED
CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited) (In thousands,
except per share data) Twelve months ended Twelve months ended
December 31, 2008 December 31, 2007 -----------------
----------------- Net revenue $257,172 100.0% $262,943 100.0% Cost
of goods sold 107,927 42.0% 94,565 36.0% ------- ------ Gross
profit 149,245 58.0% 168,378 64.0% Selling and operating 142,401
55.4% 144,768 55.0% Corporate, general and administration 13,059
5.1% 13,157 5.0% Other expenses, net 82,928 32.2% - 0.0% ------ ---
Income (loss) from operations (89,143) -34.7% 10,453 4.0% Interest
and other income 34,016 13.3% 4,148 1.5% ------ ----- Income (loss)
before income taxes (55,127) -21.4% 14,601 5.5% Income tax expense
(benefit) (7,542) -2.9% 5,767 2.2% Minority interest in net
(income) loss of consolidated subsidiaries 11,962 4.6% (310) -0.1%
------ ---- Net income (loss) $(35,623) -13.9% $8,524 3.2% ========
====== Shares outstanding: Basic 24,452 24,962 Diluted 24,452
25,214 Income (loss) per share: Basic $(1.46) $0.34 Diluted $(1.46)
$0.34 GAIAM, INC. CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited) (In thousands, except per share data) Three months
ended Three months ended December 31, 2008 December 31, 2007
----------------- ----------------- Net revenue $74,497 100.0%
$81,806 100.0% Cost of goods sold 36,228 48.6% 30,679 37.5% ------
------ Gross profit 38,269 51.4% 51,127 62.5% Selling and operating
39,715 53.3% 41,234 50.4% Corporate, general and administration
3,458 4.7% 3,334 4.1% Other expenses, net 42,273 56.7% - 0.0%
------ --- Income (loss) from operations (47,177) -63.3% 6,559 8.0%
Interest and other income 1,653 2.2% 773 0.9% ----- --- Income
(loss) before income taxes (45,524) -61.1% 7,332 8.9% Income tax
expense (benefit) (3,511) -4.7% 2,899 3.5% Minority interest in net
(income) loss of consolidated subsidiaries 11,711 15.7% (233) -0.3%
------ ---- Net income (loss) $(30,302) -40.7% $4,200 5.1% ========
====== Shares outstanding: Basic 23,980 24,846 Diluted 23,980
25,154 Income (loss) per share: Basic $(1.26) $0.17 Diluted $(1.26)
$0.17 GAIAM, INC. CONSOLIDATED BALANCE SHEETS (In thousands, except
share information) December 31, December 31, 2008 2007 ---- ----
(Unaudited) Assets Current assets: Cash and cash equivalents
$31,965 $66,258 Accounts receivable, net 33,664 30,157 Inventory,
net 35,736 29,839 Deferred advertising costs 2,578 3,602 Income
taxes receivable 8,410 - Deferred tax assets 7,038 6,005 Other
current assets 9,841 5,205 ----- ----- Total current assets 129,232
141,066 Property and equipment, net 27,381 9,509 Media library, net
12,102 37,566 Deferred tax assets, net 6,076 4,057 Goodwill 23,180
42,856 Other intangibles, net 880 1,554 Notes receivable and other
assets 3,247 4,104 ----- ----- Total assets $202,098 $240,712
======== ======== Liabilities and shareholders' equity Current
liabilities: Accounts payable $26,567 $23,620 Accrued liabilities
6,885 10,631 ----- ------ Total current liabilities 33,452 34,251
Minority interest 15,178 6,073 Commitments and contingencies
Shareholders' equity: Class A common stock, $.0001 par value,
150,000,000 shares authorized, 18,541,201 and 19,553,631 shares
issued and outstanding at December 31, 2008 and 2007, respectively
2 2 Class B common stock, $.0001 par value, 50,000,000 shares
authorized, 5,400,000 issued and outstanding at December 31, 2008
and 2007 1 1 Additional paid-in capital 163,652 174,046 Accumulated
other comprehensive income 88 991 (Accumulated deficit) retained
earnings (10,275) 25,348 ------- ------ Total shareholders' equity
153,468 200,388 ------- ------- Total liabilities and shareholders'
equity $202,098 $240,712 ======== ======== 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 year ended December 31,
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 year-ended
December 31, 2008 GAAP net loss to its year-ended December 31, 2008
non-GAAP net loss is set forth below (in millions except share and
per share data): For the Quarter Ended For the Year Ended December
31, 2008 December 31, 2008 ----------------- ----------------- Net
loss $(30.3) $(35.6) Exclusion of Real Goods Solar net loss 27.4
28.0 Exclusion of minority interest in Real Goods Solar (12.0)
(12.1) Exclusion of non-cash gain on issuance of Real Goods Solar
stock (0.9) (20.1) Exclusion for disposition of businesses 0.5 1.4
Exclusion of non-cash impairment of goodwill and intangible assets
14.1 39.2 Non-GAAP net (loss) income $(1.2) $0.8 Non-GAAP weighted
average shares used in earnings per share calculation (diluted)
23,980,000 24,599,000 Non-GAAP (loss) earnings per share (diluted)
$(0.05) $0.03 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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