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Gaiam Gains Ground

29 Mar, 2006 By: Jessica Wolf

Lifestyle company Gaiam has been bulking up.

Gaiam's market share of the fitness/wellness DVD category for 2005 was more than 40%, according to Nielsen VideoScan data the company cited in its fourth-quarter and year-end financial report released March 13. That figure includes titles acquired in the September 2005 purchase of GoodTimes.

At the end of 2005, Gaiam ranked fifth in market share of U.S. nontheatrical DVDs, up from 13th at the end of 2004, according to VideoScan.

Fourth-quarter revenue was $64.3 million, an increase of 84.7% from the $34.8 million recorded in the same period in 2004. Net income for the fourth quarter was $1.5 million, or 7 cents per share, compared to a net loss of $0.5 million, or 4 cents per share, for the fourth quarter of 2004.

Gaiam closed out 2005 with a 47.4% revenue increase, to $142.5 million, compared to $96.7 million in 2004.

Net income for 2005 was $1.3 million, or 8 cents per share, compared to a net loss of $4.6 million, or 32 cents per share, in 2004.

The company has no debt and a $15 million unused line of credit.

“Our success is largely attributable to our highly leveragable operating model,” said Jirka Rysavy, founder, chairman and CEO. “Our media-focused strategy, the increasing gross margin and additional volume in our centralized distribution center should continue to improve our operating margin.”

Gaiam expects to generate more than $200 million in revenue in 2006, and believes gross margin for the year will be about 60%, about 4% above its expectation after the purchase of GoodTimes Entertainment.

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