GlobeNewswire Inc | May 3, 2021 04:05PM EDT

May 03, 2021

BOULDER, Colo., May 03, 2021 (GLOBE NEWSWIRE) -- Gaia, Inc. (NASDAQ: GAIA), a conscious media and community company, reported financial results for the first quarter ended March 31, 2021.

Highlights

-- 30% increase in revenues from the year-ago quarter -- Third sequential quarter of positive earnings and cash flow -- Crossed 750,000-member milestone

The first quarter of 2021 was a solid follow through on the results we achieved during the second half of 2020, as we continued to generate net income and cash flows while driving revenue and member growth, said Paul Tarell, Gaias CFO. We continue to build on the foundation we laid over the past two years as seen by our ability to grow revenues 20% for the year while staying net income and cash flow positive.

First Quarter 2021 Financial Results

Revenues in the first quarter increased 30% to $18.9 million from $14.5 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 750,100 as of March 31, 2021.

Gross profit in the first quarter increased 31% to $16.5 million compared to $12.6 million in the year-ago quarter. Gross margin increased to 87.1% versus 86.9% in the year-ago quarter.

Total operating expenses were $16.0 million, or 85% of revenues in the first quarter of 2021 compared to $15.9 million, or 109% 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 40% from 52% in the year-ago quarter.

Net income improved by $4.0 million in the first quarter to $0.4 million or $0.02 per share, from a net loss of $3.6 million or $(0.19) per share in the year ago quarter. As a percentage of revenues, this represents a 26% improvement between periods.

EBITDA improved to $3.5 million, or 19% of revenues, compared to $(0.3) million, or (2)% of revenues in the year-ago quarter.

Cash flows from operations improved to $5.2 million during the first quarter of 2021 from $2.0 million in the year ago quarter. With the improvement, Gaia ramped its investment in original content as planned during the first quarter of 2021. Gaias cash balance increased to $13.0 million as of March 31, 2021.

With the improvements in cash flow generation over the past twelve months, Gaias board of directors has authorized a share repurchase program of up to 5,000,000 shares of its Class A common stock. Gaia may repurchase shares on the open market or through privately negotiated transactions. The repurchase plan does not have an expiration date, does not require Gaia to repurchase any specified number of shares and may be suspended, discontinued, or restarted at any time in Gaias discretion.

The board of directors also approved the renewal of our shelf registration statement on Form S-3 with the Securities Exchange Commission (SEC) for 10,000,000 shares of Class A common stock. The registration statement will replace an expired shelf registration Gaia previously had in place. The primary purpose of this shelf registration is to allow flexibility for potential future business combinations or content library acquisitions. Gaia has no current plans to utilize these shares. This press release shall not constitute an offer to sell or the solicitation of an offer to buy securities, nor shall there be any sale of securities in any jurisdiction in which such an offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of such jurisdiction.

Conference Call

Date: Monday, May 3, 2021Time: 4:30 p.m. Eastern time (2:30 p.m. Mountain time)Toll-free dial-in number: 1-800-458-4121International dial-in number: 1-323-794-2093Conference ID: 3754957

Please call the conference telephone number 5-10 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 May 17, 2021.

Toll-free replay number: 1-844-512-2921International replay number: 1-412-317-6671Replay ID: 3754957

About Gaia

Gaia is a member-supported global video streaming service and community that produces and curates conscious media through four primary channelsSeeking Truth, Transformation, Alternative Healing and Yogato its members in 185 countries. Gaias library includes approximately 8,000 titles, over 80% of which is exclusive to Gaia, and approximately 80% of the views are generated by content produced or owned by Gaia. Gaia is available on Apple TV, iOS, Android, Roku, Chromecast, and sold through Amazon Prime Video and Comcast Xfinity. For more information about Gaia, visit www.gaia.com.

Company Contact:Paul TarellChief Financial OfficerGaia, Inc.Investors@gaia.com

Investor Relations:Gateway Investor RelationsCody Slach(949) 574-3860GAIA@gatewayir.com



GAIA, INC.Condensed Consolidated Statements of Operations

For the Three Months Ended March31,(in thousands, except per share data) 2021 2020 (unaudited) Revenues, net $ 18,896 $ 14,511 Cost of revenues 2,438 1,901 Gross profit 16,458 12,610 Gross profit margin 87.1 % 86.9 %Expenses: Selling and operating 14,538 14,458 Corporate, general and administration 1,496 1,417 Total operating expenses 16,034 15,875 Income (loss) from operations 424 (3,265 )Interest and other income (expense), (66 ) (246 )netIncome (loss) before income taxes 358 (3,511 )Provision for income taxes ? 69 Net income (loss) $ 358 $ (3,580 ) Earnings per share: Basic earnings per share $ 0.02 $ (0.19 )Diluted earnings per share $ 0.02 $ (0.19 )Weighted-average shares outstanding: Basic 19,201 18,482 Diluted 19,724 18,482 EBITDA* $ 3,523 $ (296 )

* See definition and reconciliation below.

GAIA, INC.Summary of Cash Flows

For the Three Months Ended March31, (in thousands) 2021 2020 (unaudited) Net cash provided by (used in): Operating activities $ 5,188 $ 2,006 Investing activities (4,774 ) (3,601 )Financing activities 26 120 Net change in cash $ 440 $ (1,475 )

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

For the Three Months Ended March31, (in thousands) 2021 2020 (unaudited) Net income (loss) $ 358 $ (3,580 )Interest expense, net 66 246 Provision for income taxes ? 69 Depreciation and amortization expense 3,099 2,969 EBITDA 3,523 (296 )Share-based compensation expense 613 465 Adjusted EBITDA $ 4,136 $ 169

EBITDA represents net income (loss) 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

March31, December31, (in thousands, except share and per share 2021 2020 data) (unaudited) ASSETS Current assets: Cash $ 13,045 $ 12,605 Accounts receivable 2,529 2,024 Prepaid expenses and other current assets 1,464 1,746 Total current assets 17,038 16,375 Media library, software and equipment, net 40,293 39,231 Right-of-use lease asset, net 8,437 8,622 Real estate, investment, and other assets 29,113 28,500 Goodwill 17,289 17,289 Total assets $ 112,170 $ 110,017 LIABILITIES AND EQUITY Current liabilities: Accounts payable, accrued and other $ 8,228 $ 8,947 liabilitiesDeferred revenue 14,415 12,376 Total current liabilities 22,643 21,323 Long-term mortgage, net 6,218 6,250 Long-term lease liability 7,775 7,952 Deferred taxes 257 257 Total liabilities 36,893 35,782 Total equity 75,277 74,235 Total liabilities and equity $ 112,170 $ 110,017