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Gaiam Is Pumping Up

7 Aug, 2007 By: Angelique Flores

Gaiam showed some muscle in its second-quarter financial report. The fitness and wellness company reported a 21.3% increase in revenue of $52.4 million from $43.2 million in Q2 2006.

The increase came mostly from higher margin international sales in Canada and in Japan, where the Billy Blanks DVD line saw great success. Operating expenses decreased from 68.5%, to 67.9%, for the quarter (ended June 30) compared to last year, even with increased expenses for Gaiam's growing online community.

The company reported a net loss of $0.3 million for the quarter, compared to a net loss of $1.2 for Q2 2006.

For the first six months of the year, Gaiam's net revenue totaled $110.8 million, a 16.8% boost from last year's $94.9 million during the same period. Net income was $1.4, compared to a net loss of $0.3 million for the comparable period.

According to Nielsen VideoScan, Gaiam increased its market share in the fitness/wellness DVD category to 48% by the end of June. That's a jump from the 44% increase the company saw for the same six-month period last year.

With such success on video, Rysavy also said Gaiam has taken the first steps toward releasing content in the high-definition format later in the year.

Also during the call, the company announced the upcoming launch of a community site, Gaia.com, in the fall.

Subsequent to the second quarter, Gaiam acquired social networking site Zaadz Inc., Lime Media and majority ownership of Conscious Enlightenment Inc., for a total of $10 million. Gaiam plans to strengthen its community and create a unified source for LOHAS (lifestyles of health and sustainability), said Jirka Rysavy, chairman and CEO.

“Our recent acquisitions provide Gaiam with the tools to become the premier online LOHAS community and enhance and expand our existing subscription clubs and online community programs,” Rysavy said.

Lime, a multimedia lifestyle company with multiple platforms, is available on broadband TV, Sirius satellite radio, on-demand, mobile phones and at lime.com.

Conscious Enlightenment is an online and offline community that owns and operates the Enlightenment credit card, Conscious Choice and Whole Life magazines, the social networking and video site Yogamates.com, and a DVD and online video streaming subscription club MonthlyYogaDVD.com.

The company plans to add some of its existing DVD content to these new Web sites.

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