Gaia Inc (GAIA) 2005 Q2 法說會逐字稿

Welcome and thank you for standing by. [Operator instructions] Now I would like to turn the meeting over to John Mills. Thank you sir, you may begin.

Thank you. Welcome to Gaiam’s second quarter conference call and discussion of the recently announced strategic relationship with Steve Case’s Revolution Living and Lime Media. Before we begin, we would like to remind everyone of the Safe Harbor statement under the Private Securities Litigation Reform Act of 1995.

Except for the historical information contained herein, the matters discussed in this call are forward-looking statements that involve risks and uncertainties, including but not limited to, general business conditions, the integration of acquisitions, the timely development of new business, the impact of competition and other risks detailed from time to time in the Company’s SEC reports. The Company does not undertake any obligation to update forward-looking statements.

Now, it is my pleasure to introduce Gaiam’s Founder and CEO, Jirka Rysavy. Jirka?

Welcome to Gaiam’s second quarter conference call. For those who are new on our calls, Gaiam is a multi-channel lifestyle company, marketing its brands through media, national retailers, catalogues and the Internet. Gaiam provides proprietary content and products to people who care about personal development, natural health and inspirational entertainment.

As you are mostly aware, in addition to our earnings today we also made a significant announcement regarding a strategic relationship with Steve Case Revolution Living and Lime Media. I have Steve on the call with me and so we’re going to take some time to discuss this announcement first. We will then take some questions about this announcement before we return to the [inaudible] Gaiam earnings and take some additional earnings-related questions.

I am told we expect this call to last about an hour, with roughly the first half being devoted to the discussion of the alliance and the second half on to the Gaiam business results. So, now I would like to turn it over to Steve.

Thanks Jirka and thank you all for joining us on this call. Today’s announcement is a very exciting one, I think for both Companies and I believe it also represents a significant milestone in terms of the development of the LOHAS market.

From Revolution’s perspective, we believe the LOHAS market and I should say for those of you who are not aware, LOHAS stands for Lifestyles of Health and Sustainability, the LOHAS market is nearing a tipping point and is poised to become more of a mainstream phenomenon.

I think we can all see this around us, whether it be growing interest in hybrid cars and eco-tourist experiences, the success of companies such as Whole Foods or the growing popularity of yoga. All of this has added up to a significant market and as more and more people seek balance in their lives, they increasingly favor products and services that are better for them and the world around them.

I firmly believe that Gaiam, a recognized leader in this space, with a respected brand and excellent management team, is ideally positioned to capitalize on this growth. Already, Gaiam’s products are available in 25,000 retail stores including Target, Whole Foods and many other leading retailers. The distribution platform Gaiam has developed in the last several years has put it in the position to lead and drive mainstream acceptance of LOHAS products.

The strategic relationship and transactions we announced today fits very well into what we’re doing at Revolution, a new company I started earlier this year. Our focus at Revolution is on building businesses in consumer markets where there is the possibility of profound change.

One of the areas we have been focusing on is what we call Revolution Living, which is giving consumers new choices for healthy and sustainable lifestyles. Our initial investment in this Revolution Living space was buying 70% of Miraval Life and Balance, the nation’s highest-rated destination resort spa, with a mission to help guests find their own paths to more balanced lives.

Our second investment was buying 85% of Wisdom Media, the television and radio company that was recently re-branded as Lime -- Healthy Living With a Twist. The announcement today of our alliance with Gaiam is the third leg of the Revolution Living stool and there will be more to come in the months ahead.

Today’s announcement is that Revolution has agreed to invest $20 million to purchase newly issued Gaiam shares, representing approximately 12.5% of Gaiam. We’ve also agreed today that Revolution Living will have the option of buying a portion of Jirka’s shares in 12 to 18 months. And if we exercise that option, we would then have identical ownership and voting rights as Jirka at that time. So, as you can see, this is an alliance that will likely grow over time.

In addition to Revolution Living buying a stake in Gaiam, Gaiam is buying a 19.9% stake in Lime Media. While Revolution Living will remain the majority owner of Lime, Lime will now benefit from the partnership with Gaiam. For example, Lime will have the benefit of Gaiam’s retail distribution and Gaiam will be able to distribute its media content through the Lime Network.

We structured this alliance such that both Gaiam and Revolution have incentives to grow the business and the marketplace over the long term and that is just what we intend to do. Our overarching goal is to build LOHAS into a mainstream phenomenon and Revolution is dedicated to achieving this goal, including through our investment in Gaiam.

Now I’ll turn the call back to Jirka to give you more perspective on Gaiam. Jirka?

Thanks Steve. I’m also extremely pleased with the alliance that we announced today. I have always envisioned LOHAS as a significant and widely recognized marketplace and obviously, Gaiam as its leader.

I see Steve’s involvement impacting Gaiam two ways. First, I think Steve’s interest in LOHAS Marketplace will likely help to broaden the market appeal and market itself. And second, his enlistment and partnership with Gaiam should enable us to continue to strengthen the Gaiam leadership which we have today and positioning, while in this growing market. The strategy and combination we have announced today put Gaiam in an ideal position to pursue new opportunities and grow our customer base and better meets the needs of our customers.

Our investment in Lime is also very exciting and this strategic combination puts Gaiam in an ideal position to expand our existing channels. The minority ownership in TV will create more leverage to our plan acquisition of For the Good Time Entertainment. Our discussions with Wisdom Media, which was recently re-branded as Lime, actually started several years ago, when I visited the founders Bill Brendan [ph] and Cynthia Bluefield [ph], Virginia. But we never felt we could do this investment alone and this is a perfect example of how we can combine our distinct strengths with Revolution.

We have already identified the important synergies of course, Gaiam and Lime and Miraval. We believe that all organizations stand to benefit from the cross marketing, distribution and the promotional arrangement. I also believe that combining forces will not only create the leading brands in LOHAS, but will help to expand the market itself. We have good reason to be excited at Gaiam as we enter this new stage of our evolution. And as we always said, we look forward to fully capitalizing on this rapidly growing LOHAS marketplace.

Steve and I are now joined by Lynn Powers, who is Gaiam’s President, and C.J. Kettler, who is the CEO of Lime, and Janet Matthews of Gaiam, CFO. And we would like now to, open this question to—- about this strategic alliance. We will take probably three or four questions about the alliance and then we’ll switch to the second part and talk about regular earnings, and answer your questions about that with Lynn and Janet.

So Operator, please if you can poll the questions. But, please focus on the questions about this alliance with Revolution and Lime. Operator?

Thank you. [Operator instructions]. Our first question comes from Jeff Scandoni [ph].

Hi, I’d just like to have it spelled out for me a little bit. Now, you guys are acquiring—- not exactly acquiring Good Times Entertainment, but you’re—- I’m just seeing if Gaiam is moving one direction in terms of media distribution, with the titles of Good Time. Or, if Good Times is still going to be distributing through their channels—- could you kind of give me exactly how this advantage is going to work out and if its going to be affecting your core business? Or, how this is going to be meshing into your both advantage? Not quite clear on how that’s working.

If you can hold any question about Gaiam and our acquisition specifically, to second part of the call, we would like to kind of first address the alliance with Steve.

Okay, so you’re not going to talk about Good Times right now.

We would in the second part of the call.

I’m sorry.

Our next question comes from Lillith Dove.

Yes, good afternoon to you both. I’m very interested in this alliance and the fact that Lime is coming soon to New York and the East Coast. But my question is for you. My company is very much integrated in the healthy lifestyle, intuitive awareness, consciousness awareness living, overall, for many years on the east coast.

And I’m wondering how through television, you plan to attract a mainstream audience? Because I just noticed, a lot of your programs are some of the ones from Wisdom TV such as Wayne’s Wire, Deepak Chopra, Mae and Williamson [ph], but for a more well balanced audience some of these people are known from a very long time ago. And I don’t see how that’s going to attract a big audience, a mass audience, to Lime TV. That was my question.

I think that’s a question for Cindy.

Okay, hi Cindy.

Are you there?

Hello?

Let me see if she is, let me start it and then C.J. hopefully, can weigh in.

Okay.

We certainly believe, when we started to buy 85% of Wisdom Media, that there was a lot of interesting things that had been done over the past decade and there was a lot to be proud of but that it really did require a different approach, including a different brand but also a different mix of programming, as well as a broader multi-platform strategy. So certainly, television and radio will continue to be important, but internet and other forms of distribution will also become important.

So, our focus, and you’ll see more of this in the fall, is on building on what’s there, with the explicit goal of trying to have more of a mainstream network that reaches a wider audience, which will hopefully enable us to take some of the concepts of the LOHAS market to reach more people in more places.

C.J. if you’re there why don’t you add to that? I guess we lost her.

I see [inaudible] so therefore, you would be open to ideas?

Of course. There’s a Lime Media website and information on what we’re doing and where we’re going. And we’d be happy to talk to you or others.

Okay great. Okay, because I had— if my company had an idea we just go onto the website and just ask them, you mean—- or just submit it.

Right.

To the next questions?

I’m sorry, we’re showing no more questions at this time.

Thank you all. I’d be happy to talk further about this at some future date. We just today wanted to, at least in the first part of this earnings call, talk a little bit about the alliance and why we think this market, the LOHAS market, is important, and why we’re delighted to have entered into this alliance between Revolution Living and Gaiam and Lime Media. And we look forward to talking to you more about it in the future.

So, I’ll drop off now so Gaiam can conduct its normal earnings call. But we’re excited about this alliance and the prospects for the future and just wanted to share that with you.

If I could just jump in, I’m sorry I must have dropped off for a moment. There was a question about attracting mainstream, which I’m happy to take. This is C.J. Kettler speaking.

Yeah why don’t you do that, C.J.?

So sorry, we must have timed out on the call for some reason, just at a most inappropriate moment. In terms of attracting mainstream audience, most of the programming that you see that is currently Wisdom programming, we will build upon as we attract new and upcoming talent as well, that we think is very much inside of the LOHAS market and is interested in this kind of healthy lifestyle as well.

So we see that there’s a much greater opportunity to expand, even beyond some of the programming that you see there today. And you’ll see, both Lime and Gaiam looking at talent together that we think we can bring to all of our mediums, television, home video, wireless, VOD and satellite radio, as well as online. And bring that talent to all of the platforms not just television alone.

I should have said this is Steve, that--I mentioned the website is limemedia.net if anybody wants to look at it and get more information on it.

All right, thank you all turn it back to Jirka.

No questions for Steve before he signs off? Okay thank you Steve.

So, we will continue with our earnings call. And so we would-- I’m going to ask Janet Matthews, our CFO, to give you some background and financial results. And then Lynn Powers our President will give you a status of the business and we’ll take some questions, including any questions you have on Good Times Entertainment. So, Janet?

Thank you, Jirka. Now let me provide some additional details on our quarterly results. For the second quarter, sales were $21.7 million, an increase of $4.7 million or 27% as compared to prior year sales of $17 million. Gaiam’s Business Segment generated positive internal growth of 45% for the quarter, increasing revenue generated by this segment by $3 million over 2004 levels to $9.7 million.

Gaiam’s direct-to-consumer segment also continued to deliver solid growth. Revenue for this segment grew approximately 16% to $12 million for the second quarter of 2005. Although the second quarter is seasonally our slowest period for both segments, at a growth rate of 28% it was our fourth consecutive quarter of internal growth and exceeded the 11% growth rate generated in the preceding quarter.

Gross profit for the second quarter of 2005 was 48.6%, down from 50.1% for the comparable prior-year period, but in line with that generated during the fourth quarter of 2004. As compared to the second quarter of 2004, the lower 2005 GP is primarily due to a sales product niche shift and increased promotional programs in the direct segment. For the six months ended June 30th, 2005, our gross profit percentage was 50.6%, which was in line with our 51% guidance given for this fiscal year.

Total operating expense decreased to $11.8 million for the second quarter of 2005 as compared to $12.2 million during the second quarter of 2004 and declined significantly as a percentage of revenue from 71.5% in 2004 to 54.5% in 2005. Selling and operating expense decreased to $9.9 million from $10.2 million in the second quarter of 2004, even with a 27% increase in sales, as we were able to lower our operating and fulfillment expenses. As a percentage of revenues, selling and operating expense decreased significantly, from 59.7% in the second quarter 2004 to 45.8% in 2005.

General and administrative expense decreased 5.5% or $110,000 to $1.9 million for the second quarter of 2005. We were pleased that as a percentage of revenue, G & E decreased from 11.8% in the second quarter of 2004 to 8.7% in the comparable 2005 period.

Both of our operating segments produced positive revenue growth. The business segment revenues were $9.7 million for the second quarter 2005, an increase of 45% over the comparable 2004 period. The direct-to-consumer segment also produced improved results increasing revenues by 16% to $12 million.

As a result of positive internal growth and cost savings, Gaiam reduced its net loss in our slowest quarter from $2.2 million, or $0.15 per share in the second quarter of 2004, to $766,000, or $0.05 per share for the second quarter of 2005. For the six months ended June 30th Gaiam’s revenues increased 18%, from $40.8 million in 2004 to $48 million in 2004. The net loss for the first six months of 2005 was $650,000 or $0.04 per share, as compared to $2.5 million or $0.17 per share for the first six months of 2004.

Gaiam generated $2.2 million in cash from operations during the second quarter of 2005 and ended the quarter with $2.3 million in cash, up from $10.4 million at December 31st, 2004. Although Gaiam has no debt, we’ve recently extended the maturity date of our $15 million credit line to July 31st, 2007. After the end of the second quarter, we raised an additional $18 million in cash from the sale of unregistered Class A stocks to funds advised by Prentiss Capital, LP. And together with our cash on hand and the $20 million from the sale of stock to Revolution, will provide funding for our $40 million acquisition of Good Times assets.

Our DSO improved to an average of 41 days for the second quarter of 2005 as compared to 50 days in Q2, 2004. Inventory turns improved to 3.2 times during the second quarter 2005 as compared to 2.9 turns during the comparable 2004 period. Depreciation and amortization was $850,000 for the second quarter of 2005 and $1.9 million for the first six months of 2005.

I would now like to turn the call over to Lynn for the business overview, Lynn?

Thanks Janet. Today I would like to review our second quarter and six month results from Operations, as well as give you an overview of the steps we’ve taken to position Gaiam for the future.

For our second quarter of 2005 revenue was $21.7 million, a 28% comp increase from $17 million in the second quarter of 2004, primarily due to strong sales in the Company’s retail business segment. Net loss for the second quarter was $766,000, compared to a loss of $2.2 million reported in the same period last year. Our strong second quarter top line performance reflects the growing demand for products that support healthy living, wellness and personal development.

Even though our second quarter is historically a seasonally soft quarter, we were able to combine revenue improvements with cost savings to reduce our second quarter net loss by two-thirds. Our retail business segment, which distributes media and other proprietary products to retailers generated revenues of $9.7 million in the second quarter of ’05, a 45% increase from $6.7 million in the comparable 2004 period.

Revenue for the Company’s direct-to-consumer business was $12 million or 16% higher for the second quarter of ’05, than in the comparable period of ’04. The improvement in the overall revenue growth rate to 28% from 11% in the preceding quarter represents our fourth consecutive quarter of improved top-line growth.

Strong growth in our media segment was a significant part of our growth in the second quarter. We’re currently in approximately 25,000 stores, with our media offerings and we expect this number to continue to expand in the foreseeable future. We also are expanding our media shelf space in many of our existing mass merchants and we expect to secure more shelf space following the anticipated closing of Good Times Entertainment acquisition, which I’ll address in a few moments.

Overall sales for our domestic business to retailers was up almost 65%. Our expanded presence in Target Stores has been very successful and Gaiam sales are exceeding their expectations. We also saw significant growth in the book channel this quarter, with revenues up over 70%. We were able to expand our stores-in-store presence in Borders to an additional 50 doors during this quarter. That brings our stores-in-store presence to over 4,300 doors, or 15% of our total doors.

For the second quarter ’05, the direct-to-consumer business segment is up over 16% compared to ’04. This positive trend in our direct-to-consumer business continues to be driven by very strong growth in our online business. Compared to ’04, our web business is up 35%. Independent web marketing programs continue to show great success as we’ve experienced a 67% growth in email campaigns, 51% in affiliate programs and 27% in search engine placement.

We just completed a new online Gaiam storefront with Amazon last month and just recently began receiving orders driven by the new online arrangement. Initial results have exceeded our expectations and we’re excited about the prospects for this affiliate relationship with Amazon going forward.

Our gross profit margin for the quarter was 48.6% and 50.6% for the first six months of ’05. The slight decline in margin is due to a mix change to our lower gross profit division, as well as higher costs of goods associated with adding a DVD to all our kits and higher fuel charges.

We’re encouraged by our results in the first half of ’05, which are largely due to our efforts to build a platform for operating efficiency and scalability. As we have stated before, we took major steps over the past 18 to 24 months to position the Company for top line growth and efficiency. This transformation was needed for us to be able to take on significant growth to become a leading lifestyle media company and to be able to make strategic acquisitions such as Good Times.

During the past 24-months we’ve centralized our operations in Colorado and closed some of our acquired locations. We’ve implemented a fully integrated warehouse management system; consolidated all distribution and fulfillment to our Cincinnati warehouse; converted all our media titles from VHS format to DVD, which culminated in us exiting the VHS business in December of ’04; terminated a third-party audio distributor agreement to launch Gaiam’s own label in third quarter this year. Solidified our brand by, expanding our stores-in-store presentations to 15% of our overall placements. Re-branded all of our catalogues to Gaiam and doubled the size of our sales force, and strengthened our sales approach by adding sales people with specific industry experience.

We believe that we’re now well positioned for rapid growth in revenue and earnings over the long term and have the proper platform to support our internal growth as well as additional acquisitions, for many years to come.

As we announced a few weeks ago, we have signed a definitive agreement to acquire substantially all of the assets of Good Times Entertainment. Good Times’ extensive library of content, distribution channels and direct-response television expertise makes this acquisition a truly complementary and unique strategic fit for our Company.

Good Times Entertainment develops home entertainment products and programming, which it then distributes through multiple channels, including direct-response TV, direct-distribution to mass retailers and the Internet. The Company’s core strengths are in fitness, children and inspirational programs and their library contains approximately 2,000 titles, including leading wellness franchise such as “The Firm” and “Billy Blank’s Taebo” and numerous inspirational theatrical releases.

Under the terms of the agreement, we will acquire substantially all of the assets for $40 million in cash with adjustments and the assumption of certain liabilities, which will be subject to federal bankruptcy court process. We believe this transaction should close by the end of the third quarter and will be financed through our cash position that includes the $20 million from Revolution.

With the Good Times acquisition, we expect to generate over $200 million in annual revenue and in addition to our new television and theatrical distribution ability, our home media will be carried by over 40,000 retail doors, which will be the widest direct distribution network in the country for any media content provider. In addition, we expect to now be able to distribute over 20 million catalogues per year, as we will have a direct customer base of approximately seven million customers.

In addition to the strong revenue and direct consumer base, this acquisition also offers meaningful synergies and long-term benefits to Gaiam. To begin with, both companies share a similar commitment to improving the quality of people’s lives and providing access to uplifting, inspirational and wellness content. There’s no overlapping of actual content between the two companies.

Currently, Gaiam has the number one ranking, with Good Times number two in DVD market share in the Fitness category, according to Videoscan—Nielsen Videoscan. With the addition of the Good Times library, Gaiam will extend our leading DVD market share to approximately 37% of the overall DVD fitness market segment.

Next, our increasing penetration of specialty retailers and successful stores-in-store concept combined with Good Times’ strength in mass-market retailers such as Wal-Mart, K-Mart and Sam’s Club, will create a leading distribution network for our DVD titles and independent films. As I previously mentioned, this will enable us to now be in over 40,000 retail doors.

Furthermore, their complementary library of titles in Health and Fitness along with their children’s and theatrical content, can be leveraged across our extensive specialty retail distribution network and our over 4,300 stores-in-store relationships. So, it will significantly strengthen our position in the home DVD market.

Also, by utilizing Good Times’ expertise in direct marketing, television or infomercials, we immediately have a new channel for our award-winning Healthy Living Wellness and Fitness lifestyle media content. In addition, Good Times’ subscription clubs combined with our direct-to-consumer channels will create a strong database of Gaiam customers.

With the completion of this acquisition we’ll be one of the top ten studios, based on overall DVD market share and we’ll have the sixth largest market share, ahead of major studios such as 20th Century Fox, Universal, Columbia, Tri-Star and MGM for all non-theatrical DVD’s, according to data provided by Nielsen Videoscan.

I’d now like to turn the call over to Jirka to close.

Well, I guess we’d like to open it for the questions right now, for the—- in our earnings and what we discussed from the Gaiam side. And I think-- I want to thank Steve and C.J. for joining us and they would not be a part of answering this part of the question.

So, if you have any questions about the Gaiam earnings and operations. Operator?

[Operator instructions].

Operator?

Our first question comes from Brett Miley [ph] Sir, please state your company name.

Yeah hi, it’s Brett Miley [ph] at Rutabaga Capital. I had a few questions for you if you could, on the acquisition. Could you give us a rough feel for revenue mix? Kind of by, I guess the wellness/fitness area, the theatrical and the kids. And then, perhaps also, the way you guys break it out as well, kind of I guess retail versus either infomercial-- could you just break things out by channel and by product for us?

The mix between the, what we call retail and—

Direct?

…direct market-- our business market and direct market as we call it. It’s about the same as us it’s roughly 50/50.

Okay.

The Company—- about the same split, which makes us very unique as an acquirer because we can take the synergies from both sides. So it will make us obviously, it’s a very good fit to our system because we can leverage almost anything.

And how about-- by kind of category? I assume that this is going to be roughly $100 million in sales it sounds like, I thought it was going to be-- you guys were running about 100, you said you’d be about 200 combined I think in the press release. Can you give a feel for how much of that is sort of fitness, how much is theatrical and kids, if you break it out that way?

They, number two right now, right behind us in positioning for wellness and fitness so it’s really kind of the main attraction there. But, we don’t want to-- until we close the deal we don’t to provide any additional early information on the call because the acquisition is not closed until-- subject of bankruptcy court. So we would like to stay away from the details until we finish the acquisition.

Okay. I presume that-- the other question I had may be in the same category. But, I was going to ask you kind of, the top 10 or top 20 titles, how much of the total revenues that would be. But that sounds like that might be—

…don’t really want to provide at this time, until we finish the deal.

Okay, all right, could you-- and again, could you give us a little background-- you mentioned these guys are coming out of I guess, reorganization. Was this something where you guys have been watching these guys for a long time? Could you give us a little bit of background about how the deal kind of, came to be and what really piqued your interest other than the fitness side?

Company was for sale. That’s pretty much—- so we kind of started to look at it and we learned the Company is for sale. And, I really don’t want to go that much into it because it’s in the process of a bankruptcy and we really don’t want to get much into that part, really.

Okay how about regards to timing? When do you think that this could be completed and maybe we could get a little more detail then?

End of September.

Our next question comes from Lillith Dove; please state your company name.

Antebellum Productions [ph], LLC based in New York. Good afternoon Jirka, its nice listening to you and talking to you before.

My question is, what is the vision and direction of Gaiam regarding entertainment in this particular genre and industry for the future?

Well, our main focus obviously, we right now build very substantial distribution for DVD’s. We have currently, over 25,000 doors and we-- this acquisition put us over 40, which will be the largest DVD distribution network bigger than the content provider out there.

And obviously, with the margin on DVD’s, which is very good-- in the 70’s, after all the costs and royalties, you know, and it’s—- we tried to obviously, expand and put more revenues through that pipeline. So, that’s kind of our main focus on everything. And we’re expanding our categories, including the inspiration entertainment, which is kind of, as we call “Movie that Matters”. But we pretty much distributor, trying to kind of put it just in volumes through our channels.

We can proceed, basically distribute this to almost any retailer out there and put us in a very nice position and leverage what we’ve built over the last two years. We really spent time and money to obviously, build the system in such a way that we can do all internally. Its all, right now, moved into our distribution center in Cincinnati. All inventory is there, all the systems where-- we built several new systems for that. So it’s all behind that, this decision.

Yeah. Do you think that the partnership of Lime and Gaiam are going to be, sort of a means to go ahead in TV and network, in terms of the actual genre that you’ve been focused on? Because most TV’s sort of, the usual-- for the 18 to 49 age group its the usual thing, music videos and reality shows. Do you plan to make a presence on television? Or, do you just want to sort of, bring this to the mainstream media and do what you can? Or do you want to make a big splash—- how do you perceive this in the future?

Obviously, television is just an additional channel to our distribution and also, we’ll be distributing the titles for our Lime. So there’s several things what we can-- partner with Lime. We look at this company for a long time and this is actually a very nice fit and we kind of like the new management and positioning so it’s very exciting things for us.

Our next question comes from Greg Evans. Sir, please state your company name.

Yes, it’s Raymond James & Associates. Could you tell me how many shares will be outstanding after all of these deals close?

--about 20.2.

Yeah.

Twenty point two, okay. And are you planning on having a call after the Good Times deal closes, so you can give us more info?

Yeah, we would probably cover it on the call, when we have after that. We would have a quarterly call after, so we probably cover it, unless there is a need for a specific—

On the third quarter?

--I think we’ll cover it for the following quarter call.

On the third quarter?

Yeah.

Okay great, thank you.

Well, if there’s no more questions, we would like to thank everybody and appreciate your interest in Gaiam and we had very nice quarter and thank you for the interest.

That concludes today’s conference, you may disconnect at this time.