Gaia, Inc. (NASDAQ: GAIA), a conscious media and community company,
reported financial results for the first quarter ended March 31,
2020.
First Quarter 2020 Highlights vs. Same
Year-Ago Quarter
- 16% increase in revenues to $14.5 million.
- Generated positive Adjusted EBITDA, an improvement of $4.1
million.
- Generated $2.0 million in cash flow from operations, an
improvement of $4.7 million.
“For the second quarter in a row, we generated
positive Adjusted EBITDA and cash flow from operations,” said Paul
Tarell, Gaia’s CFO. “We remain on track to be free cash flow
positive beginning in July, which has been further supported by an
uptick in new member growth as a result of the stay-at-home orders
that began in mid-March and have continued through April.”
First Quarter 2020 Financial
Results
Revenues in the first quarter increased 16% to
$14.5 million from $12.5 million in the year-ago quarter. This was
primarily due to growth in paying members and an increase in
average revenue per member. Paying members increased to 605,100 as
of March 31, 2020, which includes the impact of finalizing and
implementing price increases in the first quarter. As of April
27th, Gaia has surpassed 625,000 paying members.
Gross profit in the first quarter increased 16%
to $12.6 million compared to $10.9 million in the year-ago quarter.
Gross margin declined slightly to 86.9% versus 87.2% in the
year-ago quarter primarily due to increased amortization for
content released in 2019 but was unchanged from the fourth quarter
of 2019.
Total operating expenses in the first quarter
declined 8% to $15.9 million from $17.3 million in the year-ago
quarter, primarily due to reductions in marketing spend. Customer
acquisition costs as a percentage of revenue decreased to 52% in
the first quarter of 2020 from 69% in the year-ago quarter.
Net loss in the first quarter improved
significantly to $3.6 million, or $(0.19) per share, compared to a
net loss of $6.7 million, or $(0.38) per share, in the year-ago
quarter.
Adjusted EBITDA also improved significantly to
$0.2 million compared to $(3.9) million in the year-ago
quarter.
Gaia generated cash from operations of $2.0
million in the first quarter of 2020 compared to cash used of $2.7
million in the year ago quarter, an improvement of $4.7
million.
Gaia’s cash conversion cycle has continued to
improve, with overall cash used during the quarter of $1.5 million
compared to a use of $7.7 million in the year ago quarter.
As of March 31, 2020, Gaia had $10.0 million in
cash compared to $11.5 million as of December 31, 2019.
Conference Call
The company will hold a conference call today at
4:30 p.m. Eastern time to discuss its first quarter 2020
results.
Date: Monday, April 27, 2020Time: 4:30 p.m.
Eastern time (2:30 p.m. Mountain time)Toll-free dial-in
number: (855) 327-6837 International dial-in number:
(631) 891-4304 Conference ID: 10009485
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 the investor relations section of
the Company’s website at www.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 11, 2020.
Toll-free replay number: (844)
512-2921International replay number: (412) 317-6671Replay ID:
9392365
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 90% 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 Ended
March 31, |
|
(in thousands, except per share data) |
|
2020 |
|
|
2019 |
|
|
|
|
|
|
|
|
|
|
(unaudited) |
|
Revenues, net |
|
$ |
14,511 |
|
|
$ |
12,467 |
|
Cost of revenues |
|
|
1,901 |
|
|
|
1,600 |
|
Gross profit |
|
|
12,610 |
|
|
|
10,867 |
|
Expenses: |
|
|
|
|
|
|
|
|
Selling and operating |
|
|
14,458 |
|
|
|
15,722 |
|
Corporate, general and administration |
|
|
1,417 |
|
|
|
1,593 |
|
Total operating expenses |
|
|
15,875 |
|
|
|
17,315 |
|
Loss from operations |
|
|
(3,265 |
) |
|
|
(6,448 |
) |
Interest and other income
(expense), net |
|
|
(246 |
) |
|
|
37 |
|
Loss before income taxes |
|
|
(3,511 |
) |
|
|
(6,411 |
) |
Income tax expense |
|
|
69 |
|
|
|
— |
|
Loss from continuing
operations |
|
|
(3,580 |
) |
|
|
(6,411 |
) |
Loss from discontinued
operations |
|
|
— |
|
|
|
(315 |
) |
Net loss |
|
$ |
(3,580 |
) |
|
$ |
(6,726 |
) |
Loss per share-basic and
diluted: |
|
|
|
|
|
|
|
|
Continuing operations |
|
$ |
(0.19 |
) |
|
$ |
(0.36 |
) |
Discontinued operations |
|
|
- |
|
|
|
(0.02 |
) |
Basic and diluted net loss per share |
|
$ |
(0.19 |
) |
|
$ |
(0.38 |
) |
Weighted-average shares
outstanding: |
|
|
|
|
|
|
|
|
Basic and diluted |
|
|
18,482 |
|
|
|
17,890 |
|
|
|
|
|
|
|
|
|
|
Adjusted
EBITDA* |
|
$ |
169 |
|
|
$ |
(3,949 |
) |
* See definition and reconciliation on following
page. GAIA, INC.Summary of Cash
Flows
|
|
For the Three Months Ended
March 31, |
|
(in thousands) |
|
2020 |
|
|
2019 |
|
|
|
|
|
|
|
|
|
|
(unaudited) |
|
Net cash provided by (used in): |
|
|
|
|
|
|
|
|
Operating activities - continuing operations |
|
$ |
2,006 |
|
|
$ |
(2,760 |
) |
Operating activities - discontinued operations |
|
|
— |
|
|
|
19 |
|
Operating activities |
|
|
2,006 |
|
|
|
(2,741 |
) |
Investing activities |
|
|
(3,601 |
) |
|
|
(4,924 |
) |
Financing activities |
|
|
120 |
|
|
|
— |
|
Net change in cash |
|
$ |
(1,475 |
) |
|
$ |
(7,665 |
) |
Reconciliation of Loss from Continuing
Operations to EBITDA and Adjusted EBITDA
|
|
For the Three Months Ended
March 31, |
|
(in thousands) |
|
2020 |
|
|
2019 |
|
|
|
|
|
|
|
|
|
|
(unaudited) |
|
Loss from continuing operations |
|
$ |
(3,580 |
) |
|
$ |
(6,726 |
) |
Interest expense (income), net |
|
|
246 |
|
|
|
(37 |
) |
Provision for (benefit from) income taxes |
|
|
69 |
|
|
|
— |
|
Depreciation and amortization expense |
|
|
2,969 |
|
|
|
2,220 |
|
EBITDA |
|
|
(296 |
) |
|
|
(4,543 |
) |
Share-based compensation expense |
|
|
465 |
|
|
|
594 |
|
Adjusted EBITDA |
|
$ |
169 |
|
|
$ |
(3,949 |
) |
EBITDA represents net loss before interest
expense, provision for income taxes, 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
|
|
March 31, |
|
|
December 31, |
|
(in thousands, except share and per share
data) |
|
2020 |
|
|
2019 |
|
|
|
(unaudited) |
|
|
|
|
|
ASSETS |
|
|
|
|
|
|
|
|
Current assets: |
|
|
|
|
|
|
|
|
Cash |
|
$ |
10,019 |
|
|
$ |
11,494 |
|
Accounts receivable |
|
|
1,944 |
|
|
|
2,310 |
|
Prepaid expenses and other current assets |
|
|
2,046 |
|
|
|
2,443 |
|
Total current assets |
|
|
14,009 |
|
|
|
16,247 |
|
Building and land, net |
|
|
22,493 |
|
|
|
22,681 |
|
Media library, software and
equipment, net |
|
|
37,924 |
|
|
|
36,921 |
|
Goodwill |
|
|
17,289 |
|
|
|
17,289 |
|
Investments and other
assets |
|
|
13,148 |
|
|
|
13,034 |
|
Total assets |
|
$ |
104,863 |
|
|
$ |
106,172 |
|
LIABILITIES AND EQUITY |
|
|
|
|
|
|
|
|
Current liabilities: |
|
|
|
|
|
|
|
|
Accounts payable, accrued and other liabilities |
|
$ |
11,274 |
|
|
$ |
10,594 |
|
Deferred revenue |
|
|
10,677 |
|
|
|
8,025 |
|
Total current liabilities |
|
|
21,951 |
|
|
|
18,619 |
|
Long-term debt |
|
|
16,717 |
|
|
|
18,433 |
|
Deferred taxes |
|
|
276 |
|
|
|
206 |
|
Total liabilities |
|
|
38,944 |
|
|
|
37,258 |
|
Total equity |
|
|
65,919 |
|
|
|
68,914 |
|
Total liabilities and equity |
|
$ |
104,863 |
|
|
$ |
106,172 |
|
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