Gaia, Inc. (NASDAQ: GAIA), a conscious media and community company,
reported financial results for the third quarter ended September
30, 2019.
Third Quarter 2019 vs. Same Year-Ago
Quarter
- 25% increase in revenues
- Subscriber count increased to 595,000
- Successful launch of “Gaia Sphere” event center and $299 Annual
Live Access subscription
“We made great progress on reducing our cash used in operations
on our path to sustained free cash flows beginning in July 2020,”
said Jirka Rysavy, Gaia’s CEO. “We also successfully completed our
first full capacity event at ‘Gaia Sphere’ on our campus in October
and have started to gain traction on our new $299 Live Access
subscription.”
Paul Tarell, Gaia’s CFO said: “During September, we achieved our
target of reaching EBITDA profitability for the month while
generating 25% revenue growth for the quarter, which has us on
track for sustained EBITDA profitability in the fourth quarter of
2019 and beyond.”
Third Quarter 2019 Financial Results
Revenues in the third quarter increased 25% to $13.7 million
from $10.9 million in the year-ago quarter. This was primarily due
to a 16% increase in paying subscribers since September 30, 2018
and increases in average revenue per subscriber.
Gross profit in the third quarter increased 24% to $11.9 million
compared to $9.6 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 but was up from 86.4% in the second quarter of 2019.
Total operating expenses in the third quarter decreased to $15.8
million from $20.1 million in the year-ago quarter. Customer
acquisition costs as a percentage of revenue decreased to 49% in
the third quarter of 2019 from 125% in the year-ago quarter.
Net loss in the third quarter was $4.1 million, or $(0.23) per
share, compared to a net loss of $10.3 million, or $(0.58) per
share, in the year-ago quarter.
Cash used in operations in the third quarter improved 89% to
$0.7 million compared to $6.3 million in the year ago quarter,
assisted by reaching positive EBITDA in September 2019.
As of September 30, 2019, Gaia had $11.6 million in cash.
Conference Call
Gaia is hosting a conference call today, November 4, 2019,
beginning at 4:30 p.m. ET (2:30 p.m. MT). The conference call
dial-in numbers are (800) 263-0877 (or (646) 828-8143 for
international callers), passcode 2950669. Questions will be
reserved for analysts and investors. If you have any difficulty
connecting with the conference call, please contact Gateway
Investor Relations at (949) 574-3860. Following the completion of
today’s conference call, a replay will be available until November
18, 2019 by dialing (844) 512-2921 (or (412) 317-6671 for
international callers), passcode 2950669.
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
Balance Sheets
|
|
September 30, |
|
December 31, |
(in thousands) |
|
2019 |
|
2018 |
|
|
(unaudited) |
|
|
|
ASSETS |
|
|
|
|
|
|
Current assets: |
|
|
|
|
|
|
Cash |
|
$ |
11,647 |
|
$ |
29,964 |
Accounts receivable |
|
|
2,075 |
|
|
1,334 |
Prepaid expenses and other current assets |
|
|
3,362 |
|
|
3,192 |
Total current assets |
|
|
17,084 |
|
|
34,490 |
Building and land, net |
|
|
22,836 |
|
|
21,688 |
Media library, software and
equipment, net |
|
|
35,588 |
|
|
27,623 |
Goodwill |
|
|
17,289 |
|
|
10,609 |
Investments and other assets |
|
|
13,680 |
|
|
12,741 |
Total assets |
|
$ |
106,477 |
|
$ |
107,151 |
LIABILITIES AND EQUITY |
|
|
|
|
|
|
Current liabilities: |
|
|
|
|
|
|
Accounts payable, accrued and other liabilities |
|
$ |
10,127 |
|
$ |
7,993 |
Deferred revenue |
|
|
6,521 |
|
|
5,029 |
Total current liabilities |
|
|
16,648 |
|
|
13,022 |
Long-term debt |
|
|
18,399 |
|
|
12,500 |
Deferred taxes |
|
|
206 |
|
|
164 |
Total liabilities |
|
|
35,253 |
|
|
25,686 |
Total equity |
|
|
71,224 |
|
|
81,465 |
Total liabilities and equity |
|
$ |
106,477 |
|
$ |
107,151 |
|
|
|
|
|
|
|
GAIA, INC.Condensed Consolidated
Statements of Operations
|
|
For the Three Months Ended September 30, |
|
|
For the Nine Months Ended September 30, |
|
(in thousands, except per share data) |
|
2019 |
|
|
2018 |
|
|
2019 |
|
|
2018 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(unaudited) |
|
|
(unaudited) |
|
Revenues, net |
|
$ |
13,660 |
|
|
$ |
10,942 |
|
|
$ |
39,291 |
|
|
$ |
30,080 |
|
Cost of revenues |
|
|
1,801 |
|
|
|
1,386 |
|
|
|
5,186 |
|
|
|
3,857 |
|
Gross
profit |
|
|
11,859 |
|
|
|
9,556 |
|
|
|
34,105 |
|
|
|
26,223 |
|
Expenses: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Selling and operating |
|
|
14,319 |
|
|
|
18,618 |
|
|
|
44,214 |
|
|
|
47,096 |
|
Corporate, general and administration |
|
|
1,440 |
|
|
|
1,454 |
|
|
|
4,526 |
|
|
|
4,205 |
|
Total operating expenses |
|
|
15,759 |
|
|
|
20,072 |
|
|
|
48,740 |
|
|
|
51,301 |
|
Loss from operations |
|
|
(3,900 |
) |
|
|
(10,516 |
) |
|
|
(14,635 |
) |
|
|
(25,078 |
) |
Interest and other income
(expense), net |
|
|
(241 |
) |
|
|
120 |
|
|
|
(400 |
) |
|
|
297 |
|
Loss before income taxes |
|
|
(4,141 |
) |
|
|
(10,396 |
) |
|
|
(15,035 |
) |
|
|
(24,781 |
) |
Income tax expense (benefit) |
|
|
3 |
|
|
|
— |
|
|
|
45 |
|
|
|
(1,826 |
) |
Loss from continuing
operations |
|
|
(4,144 |
) |
|
|
(10,396 |
) |
|
|
(15,080 |
) |
|
|
(22,955 |
) |
Income (loss) from discontinued
operations |
|
|
— |
|
|
|
67 |
|
|
|
(258 |
) |
|
|
242 |
|
Net loss |
|
$ |
(4,144 |
) |
|
$ |
(10,329 |
) |
|
$ |
(15,338 |
) |
|
$ |
(22,713 |
) |
Income (loss) per share-basic and
diluted: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Continuing operations |
|
$ |
(0.23 |
) |
|
$ |
(0.58 |
) |
|
$ |
(0.83 |
) |
|
$ |
(1.34 |
) |
Discontinued operations |
|
|
— |
|
|
|
— |
|
|
|
(0.01 |
) |
|
|
0.01 |
|
Basic and diluted net loss per share |
|
$ |
(0.23 |
) |
|
$ |
(0.58 |
) |
|
$ |
(0.84 |
) |
|
$ |
(1.33 |
) |
Weighted-average shares
outstanding: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic and diluted |
|
|
18,375 |
|
|
|
17,890 |
|
|
|
18,070 |
|
|
|
17,048 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAIA, INC.Summary of Cash
Flows
|
|
For the Three Months Ended September 30, |
|
|
For the Nine Months Ended September 30, |
|
(in thousands) |
|
2019 |
|
|
2018 |
|
|
2019 |
|
|
2018 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(unaudited) |
|
|
(unaudited) |
|
Net cash provided by (used in): |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating activities - continuing operations |
|
$ |
(679 |
) |
|
$ |
(6,380 |
) |
|
$ |
(5,996 |
) |
|
$ |
(13,384 |
) |
Operating activities - discontinued operations |
|
|
— |
|
|
|
67 |
|
|
|
76 |
|
|
|
242 |
|
Operating activities |
|
|
(679 |
) |
|
|
(6,313 |
) |
|
|
(5,920 |
) |
|
|
(13,142 |
) |
Investing activities |
|
|
(5,151 |
) |
|
|
(4,321 |
) |
|
|
(16,489 |
) |
|
|
(13,753 |
) |
Financing activities |
|
|
— |
|
|
|
287 |
|
|
|
4,092 |
|
|
|
24,930 |
|
Net change in cash |
|
$ |
(5,830 |
) |
|
$ |
(10,347 |
) |
|
$ |
(18,317 |
) |
|
$ |
(1,965 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAIA, INC.Reconciliation of Loss from
Continuing Operations to EBITDA and Adjusted EBITDA
|
|
For the Three Months Ended September 30, |
|
|
For the Nine Months Ended September 30, |
|
(in thousands) |
|
2019 |
|
|
2018 |
|
|
2019 |
|
|
2018 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(unaudited) |
|
|
(unaudited) |
|
Loss from continuing operations |
|
$ |
(4,144 |
) |
|
$ |
(10,396 |
) |
|
$ |
(15,080 |
) |
|
$ |
(22,955 |
) |
Interest expense (income), net |
|
|
241 |
|
|
|
(120 |
) |
|
|
400 |
|
|
|
(297 |
) |
Provision for (benefit from) income taxes |
|
|
3 |
|
|
|
— |
|
|
|
45 |
|
|
|
(1,826 |
) |
Depreciation and amortization expense |
|
|
2,488 |
|
|
|
1,828 |
|
|
|
6,849 |
|
|
|
5,045 |
|
EBITDA |
|
|
(1,412 |
) |
|
|
(8,688 |
) |
|
|
(7,786 |
) |
|
|
(20,033 |
) |
Share-based compensation expense |
|
|
488 |
|
|
|
147 |
|
|
|
1,597 |
|
|
|
1,138 |
|
Adjusted EBITDA |
|
$ |
(924 |
) |
|
$ |
(8,541 |
) |
|
$ |
(6,189 |
) |
|
$ |
(18,895 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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.
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