GlobeNewswire Inc | Mar 1, 2021 04:05PM EST

March 01, 2021

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, Gaias 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 Gaias transition to positive earnings and cash flows, with a $3.9 million increase in Gaias cash balance compared to September 30, 2020. Gaias 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 channelsSeeking Truth, Transformation, Alternative Healing and Yogato 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 Gaias 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 For the Year Ended Ended December31, December31,(in thousands, except per 2020 2019 2020 2019 share data) (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 1,151 1,254 5,867 5,780 administrationTotal 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 (68 ) (243 ) 5,327 (643 )(expense), netIncome (loss) before income 421 (2,812 ) 699 (17,847 )taxesProvision for income taxes 111 ? 180 45 Income (loss) from continuing 310 (2,812 ) 519 (17,892 )operationsLoss from discontinued ? ? ? (258 )operationsNet 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 $ 0.02 $ (0.15 ) $ 0.03 $ (1.00 )shareDiluted: Continuing operations $ 0.02 $ (0.15 ) $ 0.03 $ (0.99 )Discontinued operations ? ? ? (0.01 )Diluted net income (loss) per $ 0.02 $ (0.15 ) $ 0.03 $ (1.00 )shareWeighted-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 For the Year Ended Ended December31, December31,(in thousands) 2020 2019 2020 2019 (unaudited) Net cash provided by (used in):Operating activities - $ 4,453 $ 3,346 $ 11,650 $ (2,650 )continuing operationsOperating activities - ? ? ? 76 discontinued operationsOperating 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 For the Year Ended Ended December31, December31,(in thousands) 2020 2019 2020 2019 (unaudited) Income (loss) from continuing $ 310 $ (2,812 ) $ 519 $ (17,892 )operationsInterest expense, net 68 243 798 643 Provision for income taxes 111 ? 180 45 Gain on sale of real estate ? ? (6,125 ) ? Depreciation and amortization 3,016 2,746 12,042 9,595 expenseEBITDA 3,505 177 7,414 (7,609 )Share-based compensation 474 215 2,338 1,812 expenseAdjusted 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

December31, December31, (in thousands, except share and per share 2020 2019 data) 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 $ 8,947 $ 10,594 liabilitiesDeferred 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