Exhibit 99.3
Unaudited Pro Forma Condensed Consolidated Financial Information
Gaiam, Inc.
Unaudited Pro Forma Condensed Consolidated Statement of Operations
Quarter Ending March 31, 2016
(in thousands, except per share data)
Gaiam Historical Financial Statements | Less: Natural Habitat Historical Financial Statements (a)(c) | Pro Forma Adjustments (Disposition of Natural Habitat) | Notes | Pro Forma Results (Adjusted for Disposition of Natural Habitat) | ||||||||||||||
Net revenues | $ | 35,327 | $ | 9,585 | $ | — | $ | 25,742 | ||||||||||
Cost of goods sold | 18,937 | 6,312 | — | 12,625 | ||||||||||||||
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Gross profit | 16,390 | 3,273 | — | 13,117 | ||||||||||||||
Selling, general, and administrative | 24,593 | 4,209 | 3 | (b) | 20,387 | |||||||||||||
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Loss from operations | (8,203 | ) | (936 | ) | (3 | ) | (7,270 | ) | ||||||||||
Interest and other income (expense) | 509 | 944 | — | (435 | ) | |||||||||||||
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(Loss) income before income taxes | (7,694 | ) | 8 | (3 | ) | (7,705 | ) | |||||||||||
Income tax (benefit) expense | (9 | ) | 1 | — | (10 | ) | ||||||||||||
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Net (loss) income from continuing operations | (7,685 | ) | 7 | (3 | ) | (7,695 | ) | |||||||||||
Net loss attributable to noncontrolling interest | 61 | 47 | — | 14 | ||||||||||||||
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Net (loss) income from continuing operations attributable to Gaiam, Inc. | $ | (7,624 | ) | $ | 54 | $ | (3 | ) | $ | (7,681 | ) | |||||||
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Net loss from continuing operations per share: | ||||||||||||||||||
Basic and Diluted | $ | (0.31 | ) | $ | (0.31 | ) | ||||||||||||
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Weighted-average shares outstanding: | ||||||||||||||||||
Basic and Diluted | 24,531 | 24,531 | ||||||||||||||||
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(a) | Represents the revenues and expenses excluding certain fixed overhead costs of Natural Habitat included in Gaiam’s historical financial statements. |
(b) | Operating expenses are increased to reverse the impact of a human resources service allocation to Natural Habitat from Gaiam. |
(c) | Results are consolidated then adjusted for noncontrolling interests. Gaiam owned 51.4% of Natural Habitat. |
Unaudited Pro Forma Condensed Consolidated Financial Information
Gaiam, Inc.
Unaudited Pro Forma Condensed Consolidated Statement of Operations
Year Ending December 31, 2015
(in thousands, except per share data)
Gaiam Historical Financial Statements | Less: Natural Habitat Historical Financial Statements (a)(c) | Pro Forma Adjustments (Disposition of Natural Habitat) | Notes | Pro Forma Results (Adjusted for Disposition of Natural Habitat) | ||||||||||||||
Net revenues | $ | 188,018 | $ | 43,514 | $ | — | $ | 144,504 | ||||||||||
Cost of goods sold | 103,249 | 27,544 | — | 75,705 | ||||||||||||||
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Gross profit | 84,769 | 15,970 | — | 68,799 | ||||||||||||||
Selling, general, and administrative | 80,588 | 12,126 | 10 | (b) | 68,472 | |||||||||||||
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Income (loss) from operations | 4,181 | 3,844 | (10 | ) | 327 | |||||||||||||
Interest and other income (expense) | (1,406 | ) | (1,168 | ) | — | (238 | ) | |||||||||||
Loss from equity method investments | (465 | ) | — | — | (465 | ) | ||||||||||||
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Income (loss) before income taxes | 2,310 | 2,676 | (10 | ) | (376 | ) | ||||||||||||
Income tax expense (benefit) | 1,219 | 1,154 | — | 65 | ||||||||||||||
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Net income (loss) from continuing operations | 1,091 | 1,522 | (10 | ) | (441 | ) | ||||||||||||
Net income attributable to noncontrolling interest | (694 | ) | (672 | ) | — | (22 | ) | |||||||||||
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Net income(loss) from continuing operations attributable to Gaiam, Inc. | $ | 397 | $ | 850 | $ | (10 | ) | $ | (463 | ) | ||||||||
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Net income (loss) from continuing operations per share: | ||||||||||||||||||
Basic and Diluted | $ | 0.02 | $ | (0.02 | ) | |||||||||||||
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Weighted-average shares outstanding: | ||||||||||||||||||
Basic | 24,510 | 24,510 | ||||||||||||||||
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Diluted | 24,612 | 24,612 | ||||||||||||||||
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(a) | Represents the revenues and expenses excluding certain fixed overhead costs of Natural Habitat included in Gaiam’s historical financial statements. |
(b) | Operating expenses are increased to reverse the impact of a human resources service allocation to Natural Habitat from Gaiam. |
(c) | Results are consolidated then adjusted for noncontrolling interests. Gaiam owned 51.4% of Natural Habitat. |
Unaudited Pro Forma Condensed Consolidated Financial Information
Gaiam, Inc.
Unaudited Pro Forma Condensed Consolidated Balance Sheet
As of March 31, 2016
(in thousands)
Gaiam Historical Financial Statements | Less: Natural Habitat Historical Financial Statements (a) | Pro Forma Adjustments (Disposition of Natural Habitat) | Notes | Pro Forma Results (Adjusted for Disposition of Natural Habitat) | ||||||||||||||
Cash | $ | 11,228 | $ | 3,951 | $ | 11,050 | (b) | $ | 18,327 | |||||||||
Accounts receivable, net | 13,002 | 389 | — | 12,613 | ||||||||||||||
Inventory, less allowances | 16,847 | — | — | 16,847 | ||||||||||||||
Other current assets | 14,351 | 8,714 | 5,637 | |||||||||||||||
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Total current assets | 55,428 | 13,054 | 11,050 | 53,424 | ||||||||||||||
Property and equipment, net | 25,590 | 1,418 | — | 24,172 | ||||||||||||||
Media library, net | 9,348 | — | — | 9,348 | ||||||||||||||
Goodwill | 15,448 | 3,384 | — | 12,064 | ||||||||||||||
Other intangibles, net | 782 | 75 | — | 707 | ||||||||||||||
Other assets | 4,160 | 423 | — | 3,737 | ||||||||||||||
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Total assets | $ | 110,756 | $ | 18,354 | $ | 11,050 | $ | 103,452 | ||||||||||
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Accounts payable | $ | 10,437 | $ | 2,615 | $ | — | $ | 7,822 | ||||||||||
Accrued liabilities | 20,779 | 13,310 | 544 | (c) | 8,013 | |||||||||||||
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Total current liabilities | 31,216 | 15,925 | 544 | 15,835 | ||||||||||||||
Total Gaiam, Inc. shareholders’ equity | 76,743 | 1,501 | 10,506 | (d) | 85,748 | |||||||||||||
Noncontrolling interest | 2,797 | 928 | — | 1,869 | ||||||||||||||
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Total equity | 79,540 | 2,429 | 10,506 | 87,617 | ||||||||||||||
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Total liabilities and equity | $ | 110,756 | $ | 18,354 | $ | 11,050 | $ | 103,452 | ||||||||||
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(a) | Represents the assets, liabilities, and equity attributable to Natural Habitat included in Gaiam’s historical financial statements. |
(b) | Cash is adjusted to reflect the $11.0 million estimated net proceeds from the sale. |
(c) | Accrued liabilities have been adjusted to reflect the accrual of estimated nonrecurring costs directly related to the disposition (not paid in close). |
(d) | Equity is adjusted to reflect the estimated net gain of $9.0 million on the sale of Natural Habitat. We expect that there will be minimal income taxes on the gain due to utilization of our prior tax net operating losses. |
Gaiam, Inc.
Unaudited Pro Forma Condensed Consolidated Balance Sheet
As of December 31, 2015
(in thousands)
Gaiam Historical Financial Statements | Less: Natural Habitat Historical Financial Statements (a) | Pro Forma Adjustments (Disposition of Natural Habitat) | Notes | Pro Forma Results (Adjusted for Disposition of Natural Habitat) | ||||||||||||||
Cash | $ | 13,772 | $ | 8,937 | $ | 13,106 | (b)(c) | $ | 17,941 | |||||||||
Accounts receivable, net | 26,999 | 385 | — | 26,614 | ||||||||||||||
Inventory, less allowances | 17,303 | — | — | 17,303 | ||||||||||||||
Other current assets | 14,843 | 8,386 | 6,457 | |||||||||||||||
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Total current assets | 72,917 | 17,708 | 13,106 | 68,315 | ||||||||||||||
Property and equipment, net | 25,046 | 1,467 | — | 23,579 | ||||||||||||||
Media library, net | 9,117 | — | — | 9,117 | ||||||||||||||
Goodwill | 15,448 | 3,384 | — | 12,064 | ||||||||||||||
Other intangibles, net | 866 | 79 | — | 787 | ||||||||||||||
Other assets | 5,148 | 526 | — | 4,622 | ||||||||||||||
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Total assets | $ | 128,542 | $ | 23,164 | $ | 13,106 | $ | 118,484 | ||||||||||
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Accounts payable | $ | 19,384 | $ | 3,481 | $ | — | $ | 15,903 | ||||||||||
Accrued liabilities | 20,365 | 13,242 | 544 | (d) | 7,667 | |||||||||||||
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Total current liabilities | 39,749 | 16,723 | 544 | 23,570 | ||||||||||||||
Total Gaiam, Inc. shareholders’ equity | 83,940 | 3,503 | 12,562 | (e)(c) | 92,999 | |||||||||||||
Noncontrolling interest | 4,853 | 2,938 | — | 1,915 | ||||||||||||||
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Total equity | 88,793 | 6,441 | 12,562 | 94,914 | ||||||||||||||
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Total liabilities and equity | $ | 128,542 | $ | 23,164 | $ | 13,106 | $ | 118,484 | ||||||||||
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(a) | Represents the assets, liabilities, and equity attributable to Natural Habitat included in Gaiam’s historical financial statements. |
(b) | Cash is adjusted to reflect the $11.0 million estimated net proceeds from the sale. |
(c) | Cash and equity are adjusted to reflect a $2.1 million dividend paid by Natural Habitat to Gaiam in 2016. |
(d) | Accrued liabilities have been adjusted to reflect the accrual of estimated nonrecurring costs directly related to the disposition (not paid in close). |
(e) | Equity is adjusted to reflect the estimated net gain of $7.0 million on the sale of Natural Habitat. We expect that there will be minimal income taxes on the gain due to utilization of our prior tax net operating losses. |