Broomfield, Colo.-Based Health Products Firm Posts $23.9 Million in Revenues.

By Katie Ford, Daily Camera, Boulder, Colo. Knight Ridder/Tribune Business News

Oct. 30--Gaiam founder Jirka Rysavy is banking on the consumer's quest for natural products -- and seeing results.

In its third quarter earnings report Monday, Gaiam, which sells health and lifestyle products, reported net sales of $23.9 million, an increase of 76 percent over sales of $13.6 million reported for the third quarter last year.

Gaiam's net income for the third quarter increased to $969,000 from $579,000 during the same period last year. Earnings per share increased 43 percent to 7 cents per share for the third quarter of 2001, up from 5 cents per share for the third quarter ended September 30, 2000.

Net income for the first nine months of 2001 increased to $1.9 million from $983,000 for the first nine months of 2000.

"We are pleased to say again that it was another good quarter," Rysavy said.

Gaiam (Nasdaq: GAIA) performed at analysts expectations, with analysts polled by Thompson Financial/First Call expecting earnings of 7 cents per share. On Monday its stock closed at $15.15 down 3.5 percent.

The Lohas, or lifestyles of health and sustainability, market represented a $226.8 billion U.S. market and an estimated $546 billion global market in 2000, according to Boulder-based Natural Business Communications which publishes the Lohas Journal.

Gaiam said it continues to accelerate its branding of its products which are sold through over 25,000 retailers.

"Continued strong acceptance across our retailer channel contributed significantly to our internal growth," said president Lynn Powers.

She said Gaiam's store-within-a-store concept that the company launched at the end of the third quarter last year continues to be a success. Gaiam signed some new retail accounts during third quarter including Sports Authority and Books A Million as well as maintaining sales through Target and Whole Foods.

So far, Rysavy said the attacks on Sept. 11 did not have a large effect on the company. The week after the attacks he said business was down about 10 percent, with the Internet business suffering the most.

Rysavy said Gaiam welcomes competition in the Lohas market, such as Nike's new line of yoga-related wear.

"We'd like to see them spending more dollars because they provide more visibility (for the Lohas market)," he said.

In July, Yudi Bahl became Gaiam's chief financial officer. He has experience in the Lohas market, covering it for the last four years at U.S. Bancorp Piper Jaffray, recently as vice president and senior research analyst.

At the end of September, Gaiam purchased the remaining 49.9 percent interest in its two renewable energy businesses that it did not own previously, thus eliminating the minority interest in these businesses effective October 1.

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(c) 2001, Daily Camera, Boulder, Colo. Distributed by Knight Ridder/Tribune Business News.

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