Attached files
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| 8-K - FORM 8-K - GAIA, INC | d273157d8k.htm |
Exhibit 99.1
Unaudited pro forma consolidated financial information
The following supplemental pro forma information is presented for informational purposes only, as an aid to understanding Gaiam, Inc.’s (“Gaiam”) historical financial results as if adjusted by the deconsolidation of Real Goods Solar. This pro forma should not be considered a substitute for the actual historical financial information prepared in accordance with generally accepted accounting principles (“GAAP”), as presented in our filings on Form 10-Q and 10-K. The unaudited pro forma consolidated financial information disclosed in this report is for illustrative purposes only and is not necessarily indicative of results of operations that would have been achieved had the pro forma events taken place on the dates indicated, or our future consolidated results of operations.
On December 31, 2011, we converted our Real Goods Solar Class B common shares, which have ten votes per share, to Real Goods Solar Class A common shares, which have one vote per share. As a result of this conversion, our voting ownership decreased to approximately 37.5% and, thus, we no longer had financial control of Real Goods Solar, but retained significant financial influence. Accordingly, we deconsolidated Real Goods Solar and will report it as an equity investment on our consolidated balance sheet at December 31, 2011.
The unaudited pro forma condensed consolidated balance sheet at September 30, 2011 presents our condensed consolidated financial position giving pro forma effect to the deconsolidation of Real Goods Solar as if it had occurred on September 30, 2011. The unaudited pro forma condensed consolidated statements of operations for the nine months ended September 30, 2011and for the year ended December 31, 2010 present our condensed consolidated results of operations giving pro forma effect to the deconsolidation of Real Goods Solar as if it had occurred on January 1, 2010. These pro forma financial statements should be read in connection with our historical condensed financial statements for the period ended September 30, 2011, which were included with our Form 10-Q filed on November 9, 2011 and our historical consolidated financial statements for the year ended December 31, 2010, which were included with our Form 10-K filed March 11, 2011.
The pro forma adjustments are based on currently available information, estimates and assumptions that we believe are reasonable in order to reflect, on a pro forma basis, the impact of this deconsolidation on our historical financial information.
Gaiam, Inc.
Unaudited Pro Forma Condensed Consolidated Statement of Operations
For the Nine Months Ended September 30, 2011
| (in thousands, except per share data) |
Gaiam | Pro Forma Adjustments |
Notes | Pro Forma |
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| Net revenue |
$ | 178,854 | $ | (68,965 | ) | (a) | $ | 109,889 | ||||||
| Cost of goods sold |
98,478 | (50,723 | ) | (a) | 47,755 | |||||||||
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| Gross profit |
80,376 | (18,242 | ) | 62,134 | ||||||||||
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| Expenses: |
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| Selling and operating |
79,209 | (15,772 | ) | (a) | 63,437 | |||||||||
| Corporate, general and administration |
9,143 | (2,520 | ) | (a) | 6,623 | |||||||||
| Acquisition-related costs |
2,393 | (2,393 | ) | (a) | — | |||||||||
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| Total expenses |
90,745 | (20,685 | ) | 70,060 | ||||||||||
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| Loss from operations |
(10,369 | ) | 2,443 | (7,926 | ) | |||||||||
| Interest and other income |
92 | 111 | (a) | 203 | ||||||||||
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| Loss before income taxes and noncontrolling interest |
(10,277 | ) | 2,554 | (7,723 | ) | |||||||||
| Income tax benefit |
(3,169 | ) | 538 | (a) | (2,631 | ) | ||||||||
| Losses from equity method investment |
— | (756 | ) | (b) | (756 | ) | ||||||||
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| Net loss |
(7,108 | ) | 1,260 | (5,848 | ) | |||||||||
| Net (income) loss attributable to noncontrolling interest |
738 | (906 | ) | (a) | (168 | ) | ||||||||
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| Net loss attributable to Gaiam, Inc. |
$ | (6,370 | ) | $ | 354 | $ | (6,016 | ) | ||||||
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| Net loss per share attributable to Gaiam, Inc. common shareholders: |
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| Basic |
$ | (0.27 | ) | $ | (0.26 | ) | ||||||||
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| Diluted |
$ | (0.27 | ) | $ | (0.26 | ) | ||||||||
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| Weighted average shares outstanding: |
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| Basic |
23,272 | 23,272 | ||||||||||||
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| Diluted |
23,272 | 23,272 | ||||||||||||
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| (a) | Deconsolidation of Real Goods Solar’s results from operations. |
| (b) | Recognition of Gaiam’s portion of Real Goods Solar’s earnings (37.52%) under the equity method. |
Gaiam, Inc.
Unaudited Pro Forma Condensed Consolidated Statement of Operations
For the Year Ended December 31, 2010
| (in thousands, except per share data) |
Gaiam | Pro Forma Adjustments |
Notes | Pro Forma |
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| Net revenue |
$ | 274,268 | $ | (77,324 | ) | (a) | $ | 196,944 | ||||||
| Cost of goods sold |
138,438 | (55,814 | ) | (a) | 82,624 | |||||||||
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| Gross profit |
135,830 | (21,510 | ) | 114,320 | ||||||||||
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| Expenses: |
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| Selling and operating |
117,152 | (16,717 | ) | (a) | 100,435 | |||||||||
| Corporate, general and administration |
12,534 | (2,772 | ) | (a) | 9,762 | |||||||||
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| Total expenses |
129,686 | (19,489 | ) | 110,197 | ||||||||||
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| Income from operations |
6,144 | (2,021 | ) | 4,123 | ||||||||||
| Interest and other income |
1,291 | (15 | ) | (a) | 1,276 | |||||||||
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| Income before income taxes and noncontrolling interest |
7,435 | (2,036 | ) | 5,399 | ||||||||||
| Income tax expense |
2,366 | (797 | ) | (a) | 1,569 | |||||||||
| Earnings from equity method investment |
— | 465 | (b) | 465 | ||||||||||
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| Net income |
5,069 | (774 | ) | 4,295 | ||||||||||
| Net income attributable to noncontrolling interest |
(794 | ) | 562 | (a) | (232 | ) | ||||||||
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| Net income attributable to Gaiam, Inc. |
$ | 4,275 | $ | (212 | ) | $ | 4,063 | |||||||
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| Net income per share attributable to Gaiam, Inc. common shareholders: |
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| Basic |
$ | 0.18 | $ | 0.17 | ||||||||||
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| Diluted |
$ | 0.18 | $ | 0.17 | ||||||||||
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| Weighted average shares outstanding: |
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| Basic |
23,226 | 23,226 | ||||||||||||
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| Diluted |
23,383 | 23,383 | ||||||||||||
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| (a) | Deconsolidation of Real Goods Solar’s results from operations. |
| (b) | Recognition of Gaiam’s portion of Real Goods Solar’s earnings (37.52%) under the equity method. |
Gaiam, Inc.
Unaudited Pro Forma Condensed Consolidated Balance Sheet
September 30, 2011
| (in thousands, except share and per share data) |
Gaiam | Pro Forma Adjustments |
Notes | Pro Forma |
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| ASSETS | ||||||||||||||
| Current assets: |
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| Cash |
$ | 27,446 | $ | (12,627 | ) | (a) | $ | 14,819 | ||||||
| Restricted cash |
214 | (214 | ) | (a) | — | |||||||||
| Accounts receivable, net |
37,665 | (19,526 | ) | (a) | 18,139 | |||||||||
| Inventory, less allowances |
39,883 | (11,255 | ) | (a) | 28,628 | |||||||||
| Deferred advertising costs |
3,423 | — | 3,423 | |||||||||||
| Receivable and deferred tax assets |
5,206 | (1,615 | ) | (a) | 3,591 | |||||||||
| Receivable from equity investment |
— | 2,538 | (a) | 2,538 | ||||||||||
| Other current assets |
12,106 | (6,340 | ) | (a) | 5,766 | |||||||||
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| Total current assets |
125,943 | (49,039 | ) | 76,904 | ||||||||||
| Property and equipment, net |
29,187 | (6,476 | ) | (a) | 22,711 | |||||||||
| Media library, net |
15,311 | — | 15,311 | |||||||||||
| Equity investment |
— | 18,928 | (a) | 18,200 | ||||||||||
| (728 | ) | (b) | ||||||||||||
| Deferred tax assets, net |
15,237 | (8,101 | ) | (a) | 13,463 | |||||||||
| 6,327 | (b) | |||||||||||||
| Goodwill |
45,158 | (20,029 | ) | (a) | 25,129 | |||||||||
| Other intangibles, net |
1,119 | (490 | ) | (a) | 629 | |||||||||
| Other assets |
606 | (46 | ) | (a) | 560 | |||||||||
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| Total assets |
$ | 232,561 | $ | (59,654 | ) | $ | 172,907 | |||||||
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| LIABILITIES AND EQUITY | ||||||||||||||
| Current liabilities: |
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| Line of credit |
$ | 1,077 | $ | (1,077 | ) | (a) | $ | — | ||||||
| Accounts payable |
36,336 | (22,305 | ) | (a) | 14,031 | |||||||||
| Accrued liabilities |
7,759 | (3,520 | ) | (a) | 4,239 | |||||||||
| Debt |
2,472 | (2,472 | ) | (a) | — | |||||||||
| Deferred revenue and other current liabilities |
3,935 | (3,935 | ) | (a) | — | |||||||||
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| Total current liabilities |
51,579 | (33,309 | ) | 18,270 | ||||||||||
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| Commitments and contingencies |
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| Equity: |
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| Gaiam, Inc. shareholders’ equity: |
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| Class A common stock, $.0001 par value; 150,000,000 shares authorized; 17,400,604 shares issued and outstanding at September 30, 2011 |
2 | — | 2 | |||||||||||
| Class B common stock; $.0001 par value; 50,000,000 shares authorized; 5,400,000 shares issued and outstanding at September 30, 2011 |
1 | — | 1 | |||||||||||
| Additional paid-in capital |
158,253 | 461 | (b) | 158,714 | ||||||||||
| Accumulated other comprehensive income |
96 | — | 96 | |||||||||||
| Accumulated deficit |
(12,074 | ) | 5,138 | (b) | (6,936 | ) | ||||||||
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| Total Gaiam, Inc. shareholders’ equity |
146,278 | 5,599 | 151,877 | |||||||||||
| Noncontrolling interest |
34,704 | (31,944 | ) | (a) | 2,760 | |||||||||
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| Total equity |
180,982 | (26,345 | ) | 154,637 | ||||||||||
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| Total liabilities and equity |
$ | 232,561 | $ | (59,654 | ) | $ | 172,907 | |||||||
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| (a) | Deconsolidation of Real Goods Solar. |
| (b) | Re-measurement to fair value Gaiam’s equity investment in Real Goods Solar. |