Gaia Reports Fourth Quarter and Full Year 2020 Results

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

March 1, 2021 4:05 PM EST
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BOULDER, Colo., March 01, 2021 (GLOBE NEWSWIRE) -- 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 compared to September 30, 2020. Gaia’s cash balance was $12.6 million as of December 31, 2020.

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, 2021Time: 4:30 p.m. Eastern time (2:30 p.m. Mountain time)Toll-free dial-in number: 1-866-548-4713International dial-in number: 1-323-794-2093Conference 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: 1-844-512-2921International replay number: 1-412-317-6671Replay 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.

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 TarellGaia, Inc.(303) 222-3330Paul.Tarell@gaia.com

Cody SlachGateway Investor Relations(949) 574-3860GAIA@gatewayir.com

 
GAIA, INC.Condensed Consolidated Statements of Operations
 
  For the Three Months EndedDecember 31,  For the Year EndedDecember 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 below.

 
GAIA, INC.Summary of Cash Flows
 
  For the Three Months EndedDecember 31,  For the Year EndedDecember 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 EndedDecember 31,  For the Year EndedDecember 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.

 
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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Source: Gaia, Inc.


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