Gaiam Reports First Quarter Fiscal 2009 Results
Free cash flow increased to $7.1 million
BOULDER, Colo., May 6 /PRNewswire-FirstCall/ -- Gaiam, Inc. (Nasdaq: GAIA), a lifestyle media company announced today results for its first quarter ended March 31, 2009. Gaiam will host a conference call today, May 6, 2009, at 2:30 p.m. MDT (4:30 p.m. EDT) to review the results.
Dial-in No.: 888-946-2714 (domestic) or 312-470-7365 (international) Passcode: GAIAM
Revenue for the first quarter ended March 31, 2009 decreased 14.2% to $55.9 million from $65.2 million recorded in the same period last year. The reduction in sales was primarily due to a decrease in consumer spending, closure of businesses, reporting of international revenues, which were effected by the transition from product sales to licensing, a planned reduction in catalog circulation and conservative retail buying throughout the quarter.
Gross profit decreased to $31.0 million or 55.4% of revenue for the first quarter of 2009, from $41.0 million, or 62.9% 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 effect of higher deductions and allowances to retailers.
Selling and operating expenses decreased $1.0 million, or 2.8%, to $33.9 million during the first quarter of 2009, from $34.9 million during the same quarter last year, partially reflecting recent cost control initiatives.
Operating loss for the first quarter of 2009 was $6.2 million compared to an operating gain of $2.7 million in the same quarter last year. Excluding the consolidation of our 56% own subsidiary Real Goods Solar, operating loss was $4.0 million in the quarter. Total net loss for the quarter was $3.1 million, or $0.13 per share, compared to net income of $2.2 million in the same period last year.
Included in the first quarter results are a number of costs related to the closing of a non-profitable business and large reductions in payroll and related severance payouts. On an annual basis, cost savings generated by these measures approximate $10 million.
"While our first quarter results reflect the broader market trends, we remain committed to our strategic plan. In this difficult economic climate, we are focused on the appropriate balance of cash conservation and investing in the growth strategies that will build our brand and partnerships," said Lynn Powers, President and CEO. "In addition, we continue to implement cost savings measures, including renegotiating freight contracts and product costs with our manufacturers, overhead restructuring, and optimizing our direct business through reduced catalog prospecting and increased online customer acquisition strategies."
"In the first quarter, we generated free cash flow of $7.1 million, a $10.5 million improvement from cash use of $3.4 million during the same quarter of the last year. We ended the quarter with $38.2 million in cash, up $6.2 million in last 90 days, no debt and a current ratio of 4.8, up from 3.9, at the end of last quarter. We continue to use the current macroeconomic environment as an opportunity to further expand our branded store within store presence at retail, which we have increased to 10,500 and focus on the free cash flow," 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 May 11, 2009.
Replay number: 866-373-1974
For more information about Gaiam, please visit 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 March 31, 2009 March 31, 2008 Net revenue $55,923 100.0% $65,173 100.0% Cost of goods sold 24,937 44.6% 24,195 37.1% Gross profit 30,986 55.4% 40,978 62.9% Operating expenses 37,212 66.5% 38,312 58.8% Income (loss) from operations (6,226) -11.1% 2,666 4.1% Other income 74 0.1% 469 0.7% Income (loss) before income taxes (6,152) -11.0% 3,135 4.8% Income tax expense (benefit) (2,249) -4.0% 1,238 1.9% Net income (loss) (3,903) -7.0% 1,897 2.9% Net loss attributable to the noncontrolling interest 813 1.5% 316 0.5% Net income (loss) attributable to Gaiam, Inc. $(3,090) -5.5% $2,213 3.4% Weighted-average shares outstanding: Basic 23,957 25,084 Diluted 23,957 25,352 Net income (loss) per share attributable to Gaiam, Inc. common shareholders: Basic $(0.13) $0.09 Diluted $(0.13) $0.09 GAIAM, INC. CONDENSED CONSOLIDATED BALANCE SHEETS (In thousands, except share information) March 31, December 31, 2009 2008 (Unaudited) Assets Current assets: Cash and cash equivalents $38,198 $31,965 Accounts receivable, net 23,013 33,664 Inventory, net 32,581 40,782 Deferred advertising costs 2,569 2,578 Receivable and deferred tax assets 13,249 15,448 Other current assets 4,854 4,795 Total current assets 114,464 129,232 Property and equipment, net 27,856 27,381 Media library, net 12,157 12,102 Deferred tax assets, net 7,416 6,076 Goodwill 23,434 23,180 Other intangibles, net 828 880 Notes receivable and other assets 3,230 3,247 Total assets $189,385 $202,098 Liabilities and Equity Current liabilities: Accounts payable $17,394 $26,567 Accrued liabilities 6,577 6,885 Total current liabilities 23,971 33,452 Commitments and contingencies Equity: Gaiam, Inc. shareholders' equity: Class A common stock, $.0001 par value, 150,000,000 shares authorized, 18,599,890 and 18,541,201 shares issued and outstanding at March 31, 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 March 31, 2009 and December 31, 2008 1 1 Additional paid-in capital 164,275 163,652 Accumulated other comprehensive income 88 88 Accumulated deficit (13,365) (10,275) Total Gaiam, Inc. shareholders' equity 151,001 153,468 Noncontrolling interest 14,413 15,178 Total equity 165,414 168,646 Total liabilities and equity $189,385 $202,098
SOURCE Gaiam, Inc.
Released May 6, 2009