GlobeNewswire Inc | Nov 1, 2021 04:05PM EDT

November 01, 2021

BOULDER, Colo., Nov. 01, 2021 (GLOBE NEWSWIRE) -- Gaia, Inc. (NASDAQ: GAIA), a conscious media and community company, reported financial results for the third quarter ended September 30, 2021.

Highlights

-- 22% revenue growth year to date -- Q3 EBITDA of $4.0 million, with EBITDA margin of 20% -- Fifth straight quarter of positive earnings and cash flow

The third quarter of 2021 marks another quarter of disciplined execution against our plan to generate net income and cash flows while driving revenue and member growth, said Paul Tarell, Gaias CFO. Now that we are consistently generating positive net income and cash flows from operations, we are focused on growing both average revenue per member and the overall member base. Early traction in our efforts to promote our $299 premium subscription tier to current and prospective members has been promising.

Third Quarter 2021 Financial Results

Revenues increased 17% to $20.4 million from $17.5 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 790,500 as of September 30, 2021.

Gross profit in the third quarter increased to $17.8 million compared to $15.3 million in the year-ago quarter. Gross margin was flat at 87.1%.

Total operating expenses were $17.1 million or 84% of revenues compared to $14.9 million or 85% of revenues in the year-ago quarter. This reflects the stabilization of Gaias cost structure since turning profitable in the third quarter of 2020. EBITDA improved to $4.0 million, reflecting an EBITDA margin of 20%.

Net income increased to $0.6 million or $0.03 per share compared to $0.2 million or $0.01 per share in the year ago quarter, excluding the $6.1 million gain on the sale of a portion of Gaias corporate campus in September 2020. Including the gain, net income in the third quarter of 2020 was $6.3 million or $0.32 per share.

Cash flows from operations improved 55% to $5.1 million from $3.3 million in the year-ago quarter. Gaias cash balance as of September 30, 2021, was $14.4 million, an increase of $1.8 million since December 31, 2020.

Year to Date 2021 Financial Results

Revenues for the nine months ended September 30, 2021 increased 22% to $58.7 million from $48.2 million.

Gross profit for the nine months ended September 30, 2021 increased to $51.2 million compared to $42.0 million. Gross margin improved 10 basis points to 87.1%.

Total operating expenses were $49.3 million or 84% of revenues for the nine months ended September 30, 2021 compared to $47.1 million or 98% of revenues in the prior period. EBITDA improved to $11.5 million, which reflects a 72% flow through of the incremental revenues generated in the current period compared to the prior period.

Net income increased to $1.6 million or $0.08 per share for the nine months ended September 30, 2021 compared to $0.2 million or $0.01 per share in the prior period.

Cash flows from operations improved 103% to $14.5 million during the nine months ended September 30, 2021 compared to $7.2 million in the prior period.

Conference Call

Date: Monday, November 1, 2021Time: 4:30 p.m. Eastern time (2:30 p.m. Mountain time)Toll-free dial-in number: 1-866-248-8441International dial-in number: 1-323-289-6576Conference ID: 6551369

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 November 15, 2021.

Toll-free replay number: 1-844-512-2921International replay number: 1-412-317-6671Replay ID: 6551369

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 For the Nine Months Ended September30, Ended September30,(in thousands, except 2021 2020 2021 2020 per share data) (unaudited) (unaudited) Revenues, net $ 20,405 $ 17,537 $ 58,744 $ 48,201 Cost of revenues 2,626 2,264 7,573 6,248 Gross profit 17,779 15,273 51,171 41,953 Gross profit margin 87.1 % 87.1 % 87.1 % 87.0 %Expenses: Selling and operating 15,544 13,479 44,820 42,354 Corporate, general and 1,509 1,426 4,506 4,716 administrationTotal operating 17,053 14,905 49,326 47,070 expensesIncome (loss) from 726 368 1,845 (5,117 )operationsInterest and other (79 ) 5,946 (197 ) 5,395 income (expense), netIncome before income 647 6,314 1,648 278 taxesProvision for income ? ? ? 69 taxesNet income $ 647 $ 6,314 $ 1,648 $ 209 Earnings per share: Basic $ 0.03 $ 0.33 $ 0.09 $ 0.01 Diluted $ 0.03 $ 0.32 $ 0.08 $ 0.01 Weighted-average shares outstanding:Basic 19,318 19,183 19,262 18,834 Diluted 19,812 19,737 19,787 19,442 EBITDA* $ 4,036 $ 3,372 $ 11,486 $ 3,909

* See definition and reconciliation below.

GAIA, INC.Summary of Cash Flows

For the Three Months Ended For the Nine Months Ended September30, September30,(in 2021 2020 2021 2020 thousands) (unaudited) (unaudited) Net cashprovided by (used in):Operating $ 5,146 $ 3,333 $ 14,586 $ 7,197 activitiesInvesting (4,376 ) 9,862 (13,355 ) 2,781 activitiesFinancing (81 ) (12,932 ) 592 (12,751 )activitiesNet change $ 689 $ 263 $ 1,823 $ (2,773 )in cash

Reconciliation of Net Income to EBITDA and Adjusted EBITDA

For the Three Months For the Nine Months Ended September30, Ended September30,(in thousands) 2021 2020 2021 2020 (unaudited) (unaudited) Net income $ 647 $ 6,314 $ 1,648 $ 209 Interest expense, net 79 179 197 730 Provision for income ? ? ? 69 taxesGain on sale of real ? (6,125 ) ? (6,125 )estateDepreciation and 3,310 3,004 9,641 9,026 amortization expenseEBITDA 4,036 3,372 11,486 3,909 Share-based 533 336 1,236 1,864 compensation expenseAdjusted EBITDA $ 4,569 $ 3,708 $ 12,722 $ 5,773

EBITDA represents net income 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 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

September30, December31, (in thousands, except share and per 2021 2020 share data) (unaudited) ASSETS Current assets: Cash $ 14,428 $ 12,605 Accounts receivable 2,589 2,024 Prepaid expenses and other current 1,863 1,746 assetsTotal current assets 18,880 16,375 Media library, software and equipment, 42,246 39,231 netRight-of-use lease asset, net 8,061 8,622 Real estate, investment, and other 29,199 28,500 assets, netGoodwill 17,289 17,289 Total assets $ 115,675 $ 110,017 LIABILITIES AND SHAREHOLDERS' EQUITY Current liabilities: Accounts payable, accrued and other $ 9,855 $ 8,947 liabilitiesDeferred revenue 14,130 12,376 Total current liabilities 23,985 21,323 Long-term mortgage, net 6,146 6,250 Long-term lease liability 7,416 7,952 Deferred taxes 257 257 Total liabilities 37,804 35,782 Total shareholders' equity 77,871 74,235 Total liabilities and shareholders' $ 115,675 $ 110,017 equity