Gaia, Inc. Quarterly report pursuant to Section 13 or 15(d)

Subsequent Events (Tables)

3 Months Ended

Mar. 31, 2016

Gaiam, Inc.

Unaudited Pro Forma Condensed Consolidated Statement of Operations

Quarter Ending March 31, 2016

(in thousands, except per share data)


	Gaiam Historical Financial Statements			Less: Natural Habitat Historical Financial Statements (a)(c)			Pro Forma Adjustments (Disposition of Natural Habitat)			Notes	Pro Forma Results (Adjusted for Disposition of Natural Habitat)
Net revenues	$	35,327		$	9,585		$	—			$	25,742
Cost of goods sold		18,937			6,312			—				12,625

Gross profit		16,390			3,273			—				13,117
Selling, general, and administrative		24,593			4,209			3		(b)		20,387

Loss from operations		(8,203	)		(936	)		(3	)			(7,270	)
Interest and other income (expense)		509			944			—				(435	)

(Loss) income before income taxes		(7,694	)		8			(3	)			(7,705	)
Income tax (benefit) expense		(9	)		1			—				(10	)

Net (loss) income from continuing operations		(7,685	)		7			(3	)			(7,695	)
Net loss attributable to noncontrolling interest		61			47			—				14

Net (loss) income from continuing operations attributable to Gaiam, Inc.	$	(7,624	)	$	54		$	(3	)		$	(7,681	)


Net loss from continuing operations per share:
Basic and Diluted	$	(0.31	)								$	(0.31	)


Weighted-average shares outstanding:
Basic and Diluted		24,531										24,531

(a)	Represents the revenues and expenses excluding certain fixed overhead costs of Natural Habitat included in Gaiam’s historical financial statements.

(b)	Operating expenses are increased to reverse the impact of a human resources service allocation to Natural Habitat from Gaiam.

(c)	Results are consolidated then adjusted for noncontrolling interests. Gaiam owned 51.4% of Natural Habitat.

Unaudited Pro Forma Condensed Consolidated Financial Information

Gaiam, Inc.

Unaudited Pro Forma Condensed Consolidated Statement of Operations

Year Ending December 31, 2015

(in thousands, except per share data)


	Gaiam Historical Financial Statements			Less: Natural Habitat Historical Financial Statements (a)(c)			Pro Forma Adjustments (Disposition of Natural Habitat)			Notes	Pro Forma Results (Adjusted for Disposition of Natural Habitat)
Net revenues	$	188,018		$	43,514		$	—			$	144,504
Cost of goods sold		103,249			27,544			—				75,705

Gross profit		84,769			15,970			—				68,799
Selling, general, and administrative		80,588			12,126			10		(b)		68,472

Income (loss) from operations		4,181			3,844			(10	)			327
Interest and other income (expense)		(1,406	)		(1,168	)		—				(238	)
Loss from equity method investments		(465	)		—			—				(465	)

Income (loss) before income taxes		2,310			2,676			(10	)			(376	)
Income tax expense (benefit)		1,219			1,154			—				65

Net income (loss) from continuing operations		1,091			1,522			(10	)			(441	)
Net income attributable to noncontrolling interest		(694	)		(672	)		—				(22	)

Net income (loss) from continuing operations attributable to Gaiam, Inc.	$	397		$	850		$	(10	)		$	(463	)


Net income (loss) from continuing operations per share:
Basic and Diluted	$	0.02									$	(0.02	)


Weighted-average shares outstanding:
Basic		24,510										24,510

Diluted		24,612										24,612

(a)	Represents the revenues and expenses excluding certain fixed overhead costs of Natural Habitat included in Gaiam’s historical financial statements.

(b)	Operating expenses are increased to reverse the impact of a human resources service allocation to Natural Habitat from Gaiam.

(c)	Results are consolidated then adjusted for noncontrolling interests. Gaiam owned 51.4% of Natural Habitat.

Gaiam, Inc.

Unaudited Pro Forma Condensed Consolidated Balance Sheet

As of March 31, 2016

(in thousands)


	Gaiam Historical Financial Statements		Less: Natural Habitat Historical Financial Statements (a)		Pro Forma Adjustments (Disposition of Natural Habitat)		Notes	Pro Forma Results (Adjusted for Disposition of Natural Habitat)

Cash	$	11,228	$	3,951	$	11,050	(b)	$	18,327
Accounts receivable, net		13,002		389		—			12,613
Inventory, less allowances		16,847		—		—			16,847
Other current assets		14,351		8,714					5,637

Total current assets		55,428		13,054		11,050			53,424

Property and equipment, net		25,590		1,418		—			24,172
Media library, net		9,348		—		—			9,348
Goodwill		15,448		3,384		—			12,064
Other intangibles, net		782		75		—			707
Other assets		4,160		423		—			3,737

Total assets	$	110,756	$	18,354	$	11,050		$	103,452


Accounts payable	$	10,437	$	2,615	$	—		$	7,822
Accrued liabilities		20,779		13,310		544	(c)		8,013

Total current liabilities		31,216		15,925		544			15,835

Total Gaiam, Inc. shareholders’ equity		76,743		1,501		10,506	(d)		85,748
Noncontrolling interest		2,797		928		—			1,869

Total equity		79,540		2,429		10,506			87,617

Total liabilities and equity	$	110,756	$	18,354	$	11,050		$	103,452

(a)	Represents the assets, liabilities, and equity attributable to Natural Habitat included in Gaiam’s historical financial statements.

(b)	Cash is adjusted to reflect the $11.0 million estimated net proceeds from the sale.

(c)	Accrued liabilities have been adjusted to reflect the accrual of estimated nonrecurring costs directly related to the disposition (not paid in close).

(d)	Equity is adjusted to reflect the estimated net gain of $9.0 million on the sale of Natural Habitat. We expect that there will be minimal income taxes on the gain due to utilization of our net operating losses.