Gaia, Inc. (NASDAQ: GAIA), a conscious media and community company,
reported financial results for the fourth quarter and full year
ended December 31, 2019.
Fourth Quarter 2019 vs. Same Year-Ago
Quarter
- Generated $0.2 million of positive EBITDA, an improvement of
$9.6 million.
- Generated $3.3 million in cash flows from operations, an
improvement of $11.5 million.
- 24% increase in revenues.
“We successfully completed our pivot to positive EBITDA for the
quarter with mid 20’s percentage revenue growth,” said Paul Tarell,
Gaia’s CFO. “We also demonstrated the power of our negative working
capital model with $3.3 million in cash flows generated from
operations during the quarter.”
Fourth Quarter 2019 Financial Results
Revenues in the fourth quarter increased 24% to $14.7 million
from $11.9 million in the year-ago quarter. This was primarily due
to growth in paying members and an increase in average revenue per
member. Gaia ended 2019 with 29% revenue growth and 598,600 paying
members compared to 510,300 at the end of 2018, a 17% increase.
With the elimination of the $0.99 introductory trial offer in
October 2019, the comparative member count was adjusted to remove
37,500 members who were in their trial period at December 31,
2018.
Gross profit in the fourth quarter increased 23% to $12.8
million compared to $10.4 million in the year-ago quarter. Gross
margin declined slightly to 86.9% versus 87.5% in the year-ago
quarter primarily due to increased content amortization for shows
released in 2019 but was up from 86.8% in the third quarter of
2019.
Total operating expenses in the fourth quarter decreased to
$15.3 million from $21.8 million in the year-ago quarter. Customer
acquisition costs as a percentage of revenue decreased to 50% in
the fourth quarter of 2019 from 120% in the year-ago quarter.
Net loss in the fourth quarter was $2.8 million, or $(0.15) per
share, compared to a net loss of $11.1 million, or $(0.62) per
share, in the year-ago quarter.
Gaia generated cash from operations of $3.3 million in the
fourth quarter of 2019 compared to cash used of $8.2 million in the
year ago quarter, an improvement of $11.5 million.
As of December 31, 2019, Gaia had $11.5 million in cash compared
to $11.6 million as of September 30, 2019.
2019 Financial Results
Revenues in 2019 increased 29% to $54.0 million from $42.0
million in the year-ago quarter. This was primarily due to growth
in paying members and an increase in average revenue per
member.
Gross profit in 2019 increased 28% to $46.9 million compared to
$36.6 million in the year-ago quarter. Gross margin declined
slightly to 86.8% versus 87.3% in the year-ago quarter primarily
due to increased content amortization for shows released in
2019.
Total operating expenses in 2019 decreased to $64.1 million from
$73.1 million in the year-ago quarter. Customer acquisition costs
as a percentage of revenue decreased to 56% in 2019 from 110% in
2018.
Net loss in 2019 was $18.2 million, or $(1.00) per share,
compared to a net loss of $33.8 million, or $(1.96) per share, in
2018.
Cash used in operations was $2.6 million in 2019 compared to
$21.4 million in 2018, an improvement of $18.8 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 2019
results.
Date: Monday, February 24, 2020Time: 4:30 p.m. Eastern time
(2:30 p.m. Mountain time)Toll-free dial-in number: (800)
263-0877International dial-in number: (646) 828-8143Conference ID:
5742177
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.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 9, 2020.
Toll-free replay number: (844) 512-2921International replay
number: (412) 317-6671Replay ID: 5742177
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) |
|
2019 |
|
|
2018 |
|
|
2019 |
|
|
2018 |
|
|
|
|
|
|
|
|
|
|
(unaudited) |
|
|
|
|
Revenues, net |
|
$ |
14,688 |
|
|
$ |
11,917 |
|
|
$ |
53,979 |
|
|
$ |
41,997 |
|
Cost of revenues |
|
|
1,925 |
|
|
|
1,495 |
|
|
|
7,111 |
|
|
|
5,352 |
|
Gross profit |
|
|
12,763 |
|
|
|
10,422 |
|
|
|
46,868 |
|
|
|
36,645 |
|
Expenses: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Selling and operating |
|
|
14,078 |
|
|
|
20,052 |
|
|
|
58,292 |
|
|
|
67,148 |
|
Corporate, general and administration |
|
|
1,254 |
|
|
|
1,704 |
|
|
|
5,780 |
|
|
|
5,909 |
|
Total operating expenses |
|
|
15,332 |
|
|
|
21,756 |
|
|
|
64,072 |
|
|
|
73,057 |
|
Loss from operations |
|
|
(2,569 |
) |
|
|
(11,334 |
) |
|
|
(17,204 |
) |
|
|
(36,412 |
) |
Interest and other income
(expense), net |
|
|
(243 |
) |
|
|
58 |
|
|
|
(643 |
) |
|
|
355 |
|
Loss before income taxes |
|
|
(2,812 |
) |
|
|
(11,276 |
) |
|
|
(17,847 |
) |
|
|
(36,057 |
) |
Income tax expense
(benefit) |
|
|
— |
|
|
|
(118 |
) |
|
|
45 |
|
|
|
(1,944 |
) |
Loss from continuing
operations |
|
|
(2,812 |
) |
|
|
(11,158 |
) |
|
|
(17,892 |
) |
|
|
(34,113 |
) |
Income (loss) from
discontinued operations |
|
|
— |
|
|
|
78 |
|
|
|
(258 |
) |
|
|
320 |
|
Net loss |
|
$ |
(2,812 |
) |
|
$ |
(11,080 |
) |
|
$ |
(18,150 |
) |
|
$ |
(33,793 |
) |
Income (loss) per share-basic
and diluted: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Continuing operations |
|
$ |
(0.15 |
) |
|
$ |
(0.62 |
) |
|
$ |
(0.99 |
) |
|
$ |
(1.98 |
) |
Discontinued operations |
|
|
— |
|
|
|
— |
|
|
|
(0.01 |
) |
|
|
0.02 |
|
Basic and diluted net loss per share |
|
$ |
(0.15 |
) |
|
$ |
(0.62 |
) |
|
$ |
(1.00 |
) |
|
$ |
(1.96 |
) |
Weighted-average shares
outstanding: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic and diluted |
|
|
18,402 |
|
|
|
17,890 |
|
|
|
18,160 |
|
|
|
17,259 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
EBITDA* |
|
$ |
177 |
|
|
$ |
(9,390 |
) |
|
$ |
(7,609 |
) |
|
$ |
(29,423 |
) |
* See definition and reconciliation on following page.
GAIA, INC.Summary of Cash
Flows
|
|
For the Three MonthsEnded
December 31, |
|
|
For the Year
EndedDecember 31, |
|
(in thousands) |
|
2019 |
|
|
2018 |
|
|
2019 |
|
|
2018 |
|
|
|
|
|
|
|
|
|
|
(unaudited) |
|
|
|
|
Net cash provided by (used in): |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating activities - continuing operations |
|
$ |
3,346 |
|
|
$ |
(8,321 |
) |
|
$ |
(2,650 |
) |
|
$ |
(21,705 |
) |
Operating activities - discontinued operations |
|
|
— |
|
|
|
78 |
|
|
|
76 |
|
|
|
320 |
|
Operating activities |
|
|
3,346 |
|
|
|
(8,243 |
) |
|
|
(2,574 |
) |
|
|
(21,385 |
) |
Investing activities |
|
|
(3,786 |
) |
|
|
(5,106 |
) |
|
|
(20,275 |
) |
|
|
(18,859 |
) |
Financing activities |
|
|
287 |
|
|
|
12,500 |
|
|
|
4,379 |
|
|
|
37,430 |
|
Net change in cash |
|
$ |
(153 |
) |
|
$ |
(849 |
) |
|
$ |
(18,470 |
) |
|
$ |
(2,814 |
) |
Reconciliation of Loss from Continuing Operations to
EBITDA and Adjusted EBITDA
|
|
For the Three MonthsEnded
December 31, |
|
|
For the Year
EndedDecember 31, |
|
(in thousands) |
|
2019 |
|
|
2018 |
|
|
2019 |
|
|
2018 |
|
|
|
|
|
|
|
|
|
|
(unaudited) |
|
|
|
|
Loss from continuing operations |
|
$ |
(2,812 |
) |
|
$ |
(11,158 |
) |
|
$ |
(17,892 |
) |
|
$ |
(34,113 |
) |
Interest expense (income), net |
|
|
243 |
|
|
|
(58 |
) |
|
|
643 |
|
|
|
(355 |
) |
Provision for (benefit from) income taxes |
|
|
— |
|
|
|
(118 |
) |
|
|
45 |
|
|
|
(1,944 |
) |
Depreciation and amortization expense |
|
|
2,746 |
|
|
|
1,944 |
|
|
|
9,595 |
|
|
|
6,989 |
|
EBITDA |
|
|
177 |
|
|
|
(9,390 |
) |
|
|
(7,609 |
) |
|
|
(29,423 |
) |
Share-based compensation expense |
|
|
215 |
|
|
|
512 |
|
|
|
1,812 |
|
|
|
1,650 |
|
Adjusted EBITDA |
|
$ |
392 |
|
|
$ |
(8,878 |
) |
|
$ |
(5,797 |
) |
|
$ |
(27,773 |
) |
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
|
|
December 31, |
|
|
December 31, |
|
(in thousands) |
|
2019 |
|
|
2018 |
|
|
|
|
|
|
|
|
|
|
ASSETS |
|
|
|
|
|
|
|
|
Current assets: |
|
|
|
|
|
|
|
|
Cash |
|
$ |
11,494 |
|
|
$ |
29,964 |
|
Accounts receivable |
|
|
2,310 |
|
|
|
1,334 |
|
Prepaid expenses and other current assets |
|
|
2,443 |
|
|
|
3,192 |
|
Total current assets |
|
|
16,247 |
|
|
|
34,490 |
|
Building and land, net |
|
|
22,681 |
|
|
|
21,688 |
|
Media library, software and
equipment, net |
|
|
36,921 |
|
|
|
27,623 |
|
Goodwill |
|
|
17,289 |
|
|
|
10,609 |
|
Investments and other
assets |
|
|
13,034 |
|
|
|
12,741 |
|
Total assets |
|
$ |
106,172 |
|
|
$ |
107,151 |
|
LIABILITIES AND EQUITY |
|
|
|
|
|
|
|
|
Current liabilities: |
|
|
|
|
|
|
|
|
Accounts payable, accrued and other liabilities |
|
$ |
10,594 |
|
|
$ |
7,993 |
|
Deferred revenue |
|
|
8,025 |
|
|
|
5,029 |
|
Total current liabilities |
|
|
18,619 |
|
|
|
13,022 |
|
Long-term debt |
|
|
18,433 |
|
|
|
12,500 |
|
Deferred taxes |
|
|
206 |
|
|
|
164 |
|
Total liabilities |
|
|
37,258 |
|
|
|
25,686 |
|
Total equity |
|
|
68,914 |
|
|
|
81,465 |
|
Total liabilities and equity |
|
$ |
106,172 |
|
|
$ |
107,151 |
|
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