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Gaiam Q4 Revenue Drops as Income Rises

16 Mar, 2011 By: Angelique Flores

Gaiam Inc. fourth-quarter and year-end (ended Dec. 31) revenue slowed, while income for the year saw explosive growth.

The company reported a net revenue decrease of 4.9% to $83.3 million during the fourth quarter, from $87.6 million the same period a year ago. The drop was attributed to the company’s reduction in direct-response television advertising and catalog circulation.

Operating income during the period increased to $6.8 million, from $6.7 million the same quarter the prior year, setting a company record. Net income finished at $4.2 million for the quarter, compared with $4 million the same quarter the previous year.

For the year (ended Dec. 31, 2010), net revenue dropped to $274.3 million, compared with $278.5 million the prior year. Operating income leaped $6.9 million to $6.1 million for the year from an operating loss of $0.8 million the previous year. Net income for the year jumped $4 million to $4.3 million, compared with $0.3 million during the prior year.

"Promising traction in our new digital sales unit and recent improvements in our catalog business are both positive indicators for our return to revenue growth in 2011," said company chairman Jirka Rysavy.

Gaiam grew its nontheatrical market share to 7% in 2010 from 5% in 2009, according to Nielson VideoScan data. The company also acquired Discovery Communications' catalog to expand on its existing licensing deal with the company, in a move to continue to increase its nontheatrical market share.

In the fitness category, Gaiam’s lead increased to 40% market share. The company recently released the first of a series of DVDs from Jillian Michaels of “The Biggest Loser.”

Gaiam last August announced its exclusive video distribution deal with Michaels’ company, Empowered Media. The three-year deal grants Gaiam exclusive video distribution for nine new Empowered Media-produced Jillian Michaels titles. The deal also allows Gaiam to exclusively distribute and sell DVDs through traditional retail and direct channels, as well as digitally at www.gaiam.com. Gaiam already has available Jillian Michaels: Ripped in 30, Jillian Michaels for Beginners: Frontside and Jillian Michaels for Beginners: Backside, all for $14.98 each.

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