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8-K - 8-K - GAIA, INCgaia-8k_20210301.htm

Exhibit 99.1

 

Gaia Reports Fourth Quarter and Full Year 2020 Results

Fourth Quarter Revenues up 27%, Generates $3.9 in Million Cash

BOULDER, CO, March 1, 2021 — Gaia, Inc. (NASDAQ: GAIA), a conscious media and community company, reported financial results for the fourth quarter and full year ended December 31, 2020.

Highlights

 

27% increase in revenues from the year-ago quarter

 

Second sequential quarter of positive earnings and cash flow

 

Added 129,000 members during the year, ending with 728,000 paying members

 

“We had a very successful year in 2020, generating net income and cash flows while maintaining our revenue growth rate over 20%,” said Paul Tarell, Gaia’s CFO. “Beginning in July we reached the scale necessary to sustainably grow and maintain profitability.”

Fourth Quarter 2020 Financial Results

Revenues in the fourth quarter increased 27% to $18.6 million from $14.7 million in the year-ago quarter. This was primarily due to growth in members and an increase in average revenue per member. Paying members increased to 727,600 as of December 31, 2020 with net member additions for the quarter of 30,300.

Gross profit in the fourth quarter increased 27% to $16.2 million compared to $12.8 million in the year-ago quarter. Gross margin increased to 87.1% versus 86.9% in the year-ago quarter.

Total operating expenses were $15.7 million, or 84% of revenues in the fourth quarter of 2020 compared to $15.3 million, or 104% of revenues in the year-ago quarter. The significant reduction as a percentage of revenues is due to continued efficiency improvements in fixed operating expenses and reducing customer acquisition costs as a percentage of revenue to 43% from 50% in the year-ago quarter.

Net income in the fourth quarter was $0.3 million or $0.02 per share, which improved from a net loss of $2.8 million or $(0.15) per share in the year ago quarter.

EBITDA improved to $3.5 million compared to $0.2 million in the year-ago quarter and has continued to increase sequentially.

Gaia generated cash flows from operations in excess of cash used in investing activities of $1.5 million during the fourth quarter of 2020, an improvement of $2.0 million compared to the fourth quarter of 2019.  This marks the final milestone in Gaia’s transition to positive earnings and cash flows, with a $3.9 million increase in Gaia’s cash balance compare to September 30, 2020. Gaia’s cash balance was $12.6 million as of December 31, 2020.


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2020 Financial Results

Revenues in 2020 increased 24% to $66.8 million from $54.0 million in 2019. This was primarily due to growth in paying members and an increase in average revenue per member.

Gross profit in 2020 increased 24% to $58.2 million compared to $46.9 million in 2019. Gross margin improved to 87.1% versus 86.8% primarily due to increased revenues.

Total operating expenses in 2020 were $62.8 million or 94% of revenues compared to $64.1 million or 119% of revenues in 2019, which was an improvement in both absolute dollars and as a percentage of revenues. Customer acquisition costs as a percentage of revenue decreased to 47% in 2020 from 56% in 2019.

Net income in 2020 was $0.5 million, or $0.03 per share, compared to a net loss of $18.2 million, or $(1.00) per share, in 2019.

EBITDA improved $15 million in 2020 to $7.4 million from $(7.6) million in 2019, an almost 200% improvement.

Cash generated from operations was $11.7 million in 2020 compared to cash used in operations of $2.6 million in 2019, an improvement of $14.3 million.

Conference Call

The company will hold a conference call today at 4:30 p.m. Eastern time to discuss its fourth quarter and full year 2020 results.

Date: Monday, March 1, 2021

Time: 4:30 p.m. Eastern time (2:30 p.m. Mountain time)

Toll-free dial-in number: 1-866-548-4713

International dial-in number: 1-323-794-2093

Conference ID: 1665604

 

Please call the conference telephone number five minutes prior to the start time. An operator will register your name and organization. If you have any difficulty connecting with the conference call, please contact Gateway Investor Relations at (949) 574-3860.

 

The conference call will be broadcast live and available for replay here and via ir.gaia.com. A telephonic replay of the conference call will be available after 7:30 p.m. Eastern time on the same day through March 15, 2021.

 

Toll-free replay number: 1-844-512-2921

International replay number: 1-412-317-6671

Replay ID: 1665604

About Gaia

Gaia is a global video streaming service and community that provides curated conscious media in four primary channels—Seeking Truth, Transformation, Alternative Healing and Yoga—to its subscribers in 185 countries with approximately 8,000 titles. Over 85% of its library is exclusive to Gaia, and approximately 80% of the views are generated by content produced or owned by Gaia. For more information about Gaia, visit www.gaia.com.


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Forward-Looking Statements

This press release includes forward-looking statements relating to matters that are not historical facts. Forward-looking statements may be identified by the use of words such as “expect,” “believe,” “will,” or comparable terminology or by discussions of strategy. While Gaia believes its assumptions and expectations underlying forward-looking statements are reasonable, there can be no assurance that actual results will not be materially different. Risks and uncertainties that could cause materially different results include, among others, operating losses, general economic conditions, competition, changing consumer preferences, acquisitions, new initiatives we undertake, costs of acquiring new subscribers, subscriber retention rates, and other risks and uncertainties included in Gaia’s filings with the Securities and Exchange Commission. Gaia assumes no duty to update any forward-looking statements.

Contacts

Paul Tarell

Gaia, Inc.

(303) 222-3330

Paul.Tarell@gaia.com

 

Cody Slach

Gateway Investor Relations

(949) 574-3860

GAIA@gatewayir.com

 


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GAIA, INC.

Condensed Consolidated Statements of Operations

 

 

For the Three Months Ended December 31,

 

 

For the Year Ended December 31,

 

(in thousands, except per share data)

 

2020

 

 

2019

 

 

2020

 

 

2019

 

 

 

(unaudited)

 

 

 

 

Revenues, net

 

$

18,626

 

 

$

14,688

 

 

$

66,827

 

 

$

53,979

 

Cost of revenues

 

 

2,403

 

 

 

1,925

 

 

 

8,651

 

 

 

7,111

 

Gross profit

 

 

16,223

 

 

 

12,763

 

 

 

58,176

 

 

 

46,868

 

Gross profit margin

 

 

87.1

%

 

 

86.9

%

 

 

87.1

%

 

 

86.8

%

Expenses:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Selling and operating

 

 

14,583

 

 

 

14,078

 

 

 

56,937

 

 

 

58,292

 

Corporate, general and administration

 

 

1,151

 

 

 

1,254

 

 

 

5,867

 

 

 

5,780

 

Total operating expenses

 

 

15,734

 

 

 

15,332

 

 

 

62,804

 

 

 

64,072

 

Income (loss) from operations

 

 

489

 

 

 

(2,569

)

 

 

(4,628

)

 

 

(17,204

)

Interest and other income (expense), net

 

 

(68

)

 

 

(243

)

 

 

5,327

 

 

 

(643

)

Income (loss) before income taxes

 

 

421

 

 

 

(2,812

)

 

 

699

 

 

 

(17,847

)

Provision for income taxes

 

 

111

 

 

 

 

 

 

180

 

 

 

45

 

Income (loss) from continuing operations

 

 

310

 

 

 

(2,812

)

 

 

519

 

 

 

(17,892

)

Loss from discontinued operations

 

 

 

 

 

 

 

 

 

 

 

(258

)

Net income (loss)

 

$

310

 

 

$

(2,812

)

 

$

519

 

 

$

(18,150

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Earnings per share:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Continuing operations

 

$

0.02

 

 

$

(0.15

)

 

$

0.03

 

 

$

(0.99

)

Discontinued operations

 

 

 

 

 

 

 

 

 

 

 

(0.01

)

Basic net income (loss) per share

 

$

0.02

 

 

$

(0.15

)

 

$

0.03

 

 

$

(1.00

)

Diluted:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Continuing operations

 

$

0.02

 

 

$

(0.15

)

 

$

0.03

 

 

$

(0.99

)

Discontinued operations

 

 

 

 

 

 

 

 

 

 

 

(0.01

)

Diluted net income (loss) per share

 

$

0.02

 

 

$

(0.15

)

 

$

0.03

 

 

$

(1.00

)

Weighted-average shares outstanding:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

 

19,183

 

 

 

18,402

 

 

 

18,921

 

 

 

18,160

 

Diluted

 

 

19,603

 

 

 

18,402

 

 

 

19,305

 

 

 

18,160

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

EBITDA*

 

$

3,505

 

 

$

177

 

 

$

7,414

 

 

$

(7,609

)

 

* See definition and reconciliation on following page.

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GAIA, INC.

Summary of Cash Flows

 

 

For the Three Months Ended December 31,

 

 

For the Year Ended December 31,

 

(in thousands)

 

2020

 

 

2019

 

 

2020

 

 

2019

 

 

 

(unaudited)

 

 

 

 

Net cash provided by (used in):

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating activities - continuing operations

 

$

4,453

 

 

$

3,346

 

 

$

11,650

 

 

$

(2,650

)

Operating activities - discontinued operations

 

 

 

 

 

 

 

 

 

 

 

76

 

Operating activities

 

 

4,453

 

 

 

3,346

 

 

 

11,650

 

 

 

(2,574

)

Investing activities

 

 

(2,957

)

 

 

(3,786

)

 

 

(176

)

 

 

(20,275

)

Financing activities

 

 

2,388

 

 

 

287

 

 

 

(10,363

)

 

 

4,379

 

Net change in cash

 

$

3,884

 

 

$

(153

)

 

$

1,111

 

 

$

(18,470

)

Reconciliation of Income (loss) from Continuing Operations to EBITDA and Adjusted EBITDA

 

 

For the Three Months Ended December 31,

 

 

For the Year Ended December 31,

 

(in thousands)

 

2020

 

 

2019

 

 

2020

 

 

2019

 

 

 

(unaudited)

 

 

 

 

Income (loss) from continuing operations

 

$

310

 

 

$

(2,812

)

 

$

519

 

 

$

(17,892

)

Interest expense, net

 

 

68

 

 

 

243

 

 

 

798

 

 

 

643

 

Provision for income taxes

 

 

111

 

 

 

 

 

 

180

 

 

 

45

 

Gain on sale of real estate

 

 

 

 

 

 

 

 

(6,125

)

 

 

 

Depreciation and amortization expense

 

 

3,016

 

 

 

2,746

 

 

 

12,042

 

 

 

9,595

 

EBITDA

 

 

3,505

 

 

 

177

 

 

 

7,414

 

 

 

(7,609

)

Share-based compensation expense

 

 

474

 

 

 

215

 

 

 

2,338

 

 

 

1,812

 

Adjusted EBITDA

 

$

3,979

 

 

$

392

 

 

$

9,752

 

 

$

(5,797

)

EBITDA represents income (loss) from continuing activities before interest expense, provision for income taxes, other income, depreciation and amortization. Adjusted EBITDA is defined as EBITDA further adjusted to remove share-based compensation expense. EBITDA and Adjusted EBITDA do not represent net income, as that term is defined under GAAP, and should not be considered as an alternative to net income (loss) as an indicator of our operating performance.

Additionally, EBITDA and Adjusted EBITDA are not intended to be measures of free cash flow available for management or discretionary use as such measures do not consider certain cash requirements such as capital expenditures, tax payments and debt service requirements. EBITDA and Adjusted EBITDA as presented herein are not necessarily comparable to similarly titled measures.


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GAIA, INC.

Condensed Consolidated Balance Sheets

 

 

December 31,

 

 

December 31,

 

(in thousands, except share and per share data)

 

2020

 

 

2019

 

 

 

 

 

 

 

 

 

 

ASSETS

 

 

 

 

 

 

 

 

Current assets:

 

 

 

 

 

 

 

 

Cash

 

$

12,605

 

 

$

11,494

 

Accounts receivable

 

 

2,024

 

 

 

2,310

 

Prepaid expenses and other current assets

 

 

1,746

 

 

 

2,443

 

Total current assets

 

 

16,375

 

 

 

16,247

 

Media library, software and equipment, net

 

 

39,231

 

 

 

36,921

 

Right-of-use lease asset, net

 

 

8,622

 

 

 

 

Investment, real estate and other assets

 

 

28,500

 

 

 

35,715

 

Goodwill

 

 

17,289

 

 

 

17,289

 

Total assets

 

$

110,017

 

 

$

106,172

 

LIABILITIES AND EQUITY

 

 

 

 

 

 

 

 

Current liabilities:

 

 

 

 

 

 

 

 

Accounts payable, accrued and other liabilities

 

$

8,947

 

 

$

10,594

 

Deferred revenue

 

 

12,376

 

 

 

8,025

 

Total current liabilities

 

 

21,323

 

 

 

18,619

 

Long-term mortgage, net

 

 

6,250

 

 

 

18,433

 

Long-term lease liability

 

 

7,952

 

 

 

 

Deferred taxes

 

 

257

 

 

 

206

 

Total liabilities

 

 

35,782

 

 

 

37,258

 

Total equity

 

 

74,235

 

 

 

68,914

 

Total liabilities and equity

 

$

110,017

 

 

$

106,172

 

 

 

 

 

 

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