Gaiam Announces Third Quarter EPS of $.04

Gaiam, Inc.

announced today results for its third quarter ended September 30, 2010. Net revenue for the third quarter ended September 30, 2010 decreased 2.8% to $72.3 million from $74.4 million recorded during the same quarter last year. The decline was primarily attributable to the Company's focus on improving operating income by strategically reducing television advertising and catalog circulation, partially offset by sales growth in the business and solar segments. Gross profit decreased to $33.2 million, or 45.9% of net revenue, during the third quarter of 2010, from $35.8 million, or 48.1% of net revenue, during the comparable quarter last year. The change in gross margin resulted primarily from increased revenues in the lower margin solar segment and a higher mix of fitness products and accessories, driven by the launch of Reebok accessories at Target stores. Excluding the solar segment, gross profit, as a percentage of net revenue, was 56.5% during the third quarter of 2010. Income from operations during the third quarter of 2010 improved 13.5% to $1.1 million from $1.0 million during the same quarter last year. Interest and other income during the third quarter of 2010 included a gain on an equity investment of $1.0 million. Net income was $0.9 million, or $0.04 per share, during the third quarter of 2010, compared to $0.4 million, or $0.02 per share, during the same quarter last year.