Fitness financials: Gaiam 4Q 2010 revenue down, but profit up on cost cutting

Gaiam Inc. (Nasdaq: GAIA) reported lower revenue but higher profit on cost cutting for the fourth quarter 2010.

The Boulder, Colo.-based lifestyle and fitness media company said on March 9 its latest quarterly revenue fell 4.9 percent from a year ago to $83.3 million for the three-month period ending Dec. 31, 2010.

The decline was primarily due to “the company’s decision to reduce direct response television advertising and catalog circulation, partially offset by sales growth in the solar segment,” officials said in the earnings release.

Despite the quarterly revenue drop, Gaiam’s net income rose 5 percent to $4.2 million, or $0.18 per share in the fourth quarter 2010, compared to a net income of $4 million, or $0.17 per share during the fourth quarter 2009.

Company officials said Gaiam’s expenses decreased by nearly 42 percent from a year ago to $34.8 million in fourth quarter 2010, “as a result of payroll and infrastructure cost reduction measures and direct response marketing and catalog circulation optimization.”

For the full year 2010, Gaiam’s revenue came in at $274.3 million, down 1.5 percent from 2009. Its 2010 net income was $4 million, up from $300,000 in 2009. The Company ended 2010 with $28.8 million in cash and no debt.

Gaiam officials said the company grew its market share lead in the fitness media category to 40 percent, according to Nielson’s Videoscan, as it recently launched a branded daily exercise show on the Oprah Winfrey Network, and released the first of a series of media titles from The Biggest Loser host Jillian Michaels.

“As we progress through 2011, we will continue to optimize our direct response television advertising spend and catalog circulation, and, most importantly, expand our brand, and thus our market share, through investments in new product offerings and the digital delivery of our vast media holdings,” Gaiam CEO Lynn Powers said in a statement.

–Compiled by David Clucas

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