8-K
GAIA, INC (GAIA)
UNITED STATES SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of Earliest Event Reported): August 1, 2022
GAIA, INC.
(Exact Name of Registrant as Specified in its Charter)
| Colorado | 000-27517 | 84-1113527 |
|---|---|---|
| (State or Other Jurisdiction<br>of Incorporation) | (Commission File<br>Number) | (IRS Employer<br>Identification No.) |
| 833 West South Boulder Road, Louisville, CO 80027-2452 | ||
| (Address of Principal Executive Offices; Zip Code) | ||
| Registrant’s telephone number, including area code: (303) 222-3600 | ||
| (Former Name or Former Address, if Changed Since Last Report) |
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):
| ☐ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
|---|
| ☐ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
| ☐ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
| ☐ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Securities registered pursuant to Section 12(b) of the Act:
| Title of each class | Trading Symbol(s) | Name of each exchange on which registered |
|---|---|---|
| Class A Common Stock | GAIA | NASDAQ Global Market |
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§ 230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§ 240.12b-2 of this chapter).
Emerging growth company ☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
| Item 2.02 | Results of Operations and Financial Condition. |
|---|
On August 1, 2022, Gaia issued a press release announcing results for its quarter ended June 30, 2022. A copy of the press release is attached as Exhibit 99.1 to this Current Report.
In accordance with General Instruction B.2 of Form 8-K, the information contained in this Item 2.02 and in Exhibit 99.1 shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or incorporated by reference into any of the Registrant’s filings under the Securities Act of 1933, as amended, or the Exchange Act, except as shall be expressly set forth by specific reference in any such filing.
| Item 9.01 | Financial Statements and Exhibits |
|---|
(d) Exhibits
| Exhibit No. | Description of Exhibit |
|---|---|
| 99.1 | Press Release issued by Gaia on Aug 1, 2022 |
| 104 | Cover Page Interactive Data File |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
GAIA, INC.
By: /s/ Paul Tarell Name: Paul Tarell Title: Chief Financial Officer
Date: August 1, 2022
gaia-ex991_25.htm
| EX 99.1 |
|---|
Gaia Reports Second Quarter 2022 Results
Eighth Consecutive Quarter of Positive Earnings and EBITDA
BOULDER, CO, August 1, 2022 — Gaia, Inc. (NASDAQ: GAIA), a conscious media and community company, reported financial results for the second quarter ended June 30, 2022.
Highlights
| ▪ | Established technology independence and began operating on Gaia owned hardware |
|---|---|
| ▪ | Eighth consecutive quarter of positive earnings and EBITDA, with Q2 EBITDA margins over 20% |
| --- | --- |
“The spring marked a return to the seasonal patterns we have historically seen in our new member acquisition trends,” said Paul Tarell, Gaia’s CFO. “This resulted in less quarterly member additions since the pandemic began in March of 2020. Despite this shift we continued our financial discipline by delivering strong EBITDA margins while maintaining profitability. With the completion of our 18-month project to enable technology independence and ongoing financial discipline we remain well-positioned to achieve the long-term vision of our company.”
First Quarter 2022 Financial Results
Revenues increased 7% to $20.7 million from $19.4 million in the year-ago quarter, with an ending member count of 792,000 as of June 30, 2022, compared to 770,200 as of June 30, 2021.
Gross profit in the second quarter increased to $18.0 million compared to $16.9 million in the year-ago quarter. Gross margin decreased slightly to 86.7% from 87.1% in the year ago quarter primarily as a result of increased content amortization.
Total operating expenses were $17.7 million or 85% of revenues compared to $16.2 million or 84% of revenues in the year-ago quarter.
EBITDA improved to $4.2 million compared to $3.9 million in the year ago quarter, with EBITDA margin over 20%.
Net income from continuing operations was $0.1 million or $0.01 per share compared to $0.6 million or $0.03 per share in the year ago quarter. The slight decline reflects the incremental intangible asset amortization and operating expenses related to the integration of Yoga International, an acquisition that was completed at the end of December 2021.
Cash flows from operations was $2.5 million for the second quarter. Gaia’s cash balance as of June 30, 2022, was $6.2 million.
Conference Call
Date: Monday, August 1, 2022
Time: 4:30 p.m. Eastern time (2:30 p.m. Mountain time)
Toll-free dial-in number: 1-888-220-8451
International dial-in number: 1-323-794-2588
Conference ID: 2614556
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 Group 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 August 15, 2022.
Toll-free replay number: 1-844-512-2921
International replay number: 1-412-317-6671
Replay ID: 2614556
About Gaia
Gaia is a member-supported global video streaming service and community that produces and curates conscious media through four primary channels—Seeking Truth, Transformation, Alternative Healing and Yoga—in four languages (English, Spanish, French and German) to its members in 185 countries. Gaia’s library includes over 10,000 titles, 80% of which is exclusive to Gaia, and approximately 75% of viewership is 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 Tarell
Chief Financial Officer
Gaia, Inc.
Investors@gaia.com
Investor Relations:
Gateway Group, Inc.
Cody Slach
(949) 574-3860
GAIA@gatewayir.com
GAIA, INC.
Condensed Consolidated Statements of Operations
| For the Three Months Ended June 30, | For the Six Months Ended June 30, | |||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| (in thousands, except per share data) | 2022 | 2021 | 2022 | 2021 | ||||||||
| Revenues, net | $ | 20,720 | $ | 19,443 | $ | 42,551 | $ | 38,339 | ||||
| Cost of revenues | 2,759 | 2,509 | 5,664 | 4,947 | ||||||||
| Gross profit | 17,961 | 16,934 | 36,887 | 33,392 | ||||||||
| Gross profit margin | 86.7 | % | 87.1 | % | 86.7 | % | 87.1 | % | ||||
| Expenses: | ||||||||||||
| Selling and operating | 15,869 | 14,738 | 32,654 | 29,276 | ||||||||
| Corporate, general and administration | 1,794 | 1,501 | 3,579 | 2,997 | ||||||||
| Acquisition costs | — | — | 49 | — | ||||||||
| Total operating expenses | 17,663 | 16,239 | 36,282 | 32,273 | ||||||||
| Income from operations | 298 | 695 | 605 | 1,119 | ||||||||
| Interest and other expense, net | (50 | ) | (52 | ) | (110 | ) | (118 | ) | ||||
| Income before income taxes | 248 | 643 | 495 | 1,001 | ||||||||
| Provision for (benefit from) income taxes | — | — | — | — | ||||||||
| Income from continuing operations | 248 | 643 | 495 | 1,001 | ||||||||
| Loss from discontinued operations | (132 | ) | — | (293 | ) | — | ||||||
| Net income | $ | 116 | $ | 643 | $ | 202 | $ | 1,001 | ||||
| Earnings per share: | ||||||||||||
| Basic | ||||||||||||
| Continuing operations | $ | 0.01 | $ | 0.03 | $ | 0.02 | $ | 0.05 | ||||
| Discontinued operations | (0.01 | ) | — | (0.01 | ) | — | ||||||
| Basic earnings per share | $ | — | $ | 0.03 | $ | 0.01 | $ | 0.05 | ||||
| Diluted | ||||||||||||
| Continuing operations | $ | 0.01 | $ | 0.03 | $ | 0.02 | $ | 0.05 | ||||
| Discontinued operations | (0.01 | ) | — | (0.01 | ) | — | ||||||
| Diluted earnings per share | $ | — | $ | 0.03 | $ | 0.01 | $ | 0.05 | ||||
| Weighted-average shares outstanding: | ||||||||||||
| Basic | 20,788 | 19,268 | 20,627 | 19,235 | ||||||||
| Diluted | 20,795 | 19,810 | 20,795 | 19,786 | ||||||||
| EBITDA* | $ | 4,163 | $ | 3,927 | $ | 8,216 | $ | 7,450 |
* See definition and reconciliation below.
GAIA, INC.
Summary of Cash Flows
| For the Three Months Ended June 30, | For the Six Months Ended June 30, | |||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| (in thousands) | 2022 | 2021 | 2022 | 2021 | ||||||||
| Net cash provided by (used in): | ||||||||||||
| Operating activities - continuing operations | $ | 2,523 | $ | 4,252 | $ | 6,687 | $ | 9,440 | ||||
| Operating activities - discontinued operations | 454 | — | 293 | — | ||||||||
| Investing activities | (4,591 | ) | (4,205 | ) | (10,419 | ) | (8,979 | ) | ||||
| Financing activities | (3 | ) | 647 | (49 | ) | 673 | ||||||
| Net change in cash | $ | (1,617 | ) | $ | 694 | $ | (3,488 | ) | $ | 1,134 |
Reconciliation of Net Income to EBITDA and Adjusted EBITDA
| For the Three Months Ended June 30, | For the Six Months Ended June 30, | |||||||||
|---|---|---|---|---|---|---|---|---|---|---|
| (in thousands) | 2022 | 2021 | 2022 | 2021 | ||||||
| Net income | $ | 116 | $ | 643 | $ | 202 | $ | 1,001 | ||
| Interest expense, net | 50 | 52 | 110 | 118 | ||||||
| Provision for (benefit from) income taxes | — | — | — | — | ||||||
| Depreciation and amortization expense | 3,997 | 3,232 | 7,904 | 6,331 | ||||||
| EBITDA | 4,163 | 3,927 | 8,216 | 7,450 | ||||||
| Acquisition costs | — | — | 49 | — | ||||||
| Share-based compensation expense | 389 | 90 | 929 | 703 | ||||||
| Discontinued operations | (132 | ) | — | (293 | ) | — | ||||
| Adjusted EBITDA | $ | 4,420 | $ | 4,017 | $ | 8,901 | $ | 8,153 |
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 acquisition costs, share-based compensation expense, and the results of discontinued operations. 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
| June 30, | December 31, | |||
|---|---|---|---|---|
| (in thousands, except share and per share data) | 2022 | 2021 | ||
| ASSETS | ||||
| Current assets: | ||||
| Cash | $ | 6,195 | $ | 10,269 |
| Accounts receivable | 2,972 | 2,728 | ||
| Prepaid expenses and other current assets | 2,278 | 1,986 | ||
| Total current assets | 11,445 | 14,983 | ||
| Media library, software and equipment, net | 52,618 | 50,558 | ||
| Right-of-use lease asset, net | 7,486 | 7,871 | ||
| Real estate, investment and other assets, net | 31,002 | 31,394 | ||
| Goodwill | 28,870 | 28,870 | ||
| Total assets | $ | 131,421 | $ | 133,676 |
| LIABILITIES AND SHAREHOLDERS' EQUITY | ||||
| Current liabilities: | ||||
| Accounts payable, accrued and other liabilities | $ | 11,604 | $ | 14,962 |
| Deferred revenue | 15,218 | 14,847 | ||
| Total current liabilities | 26,822 | 29,809 | ||
| Long-term mortgage, net | 6,035 | 6,109 | ||
| Long-term lease liability | 6,865 | 7,234 | ||
| Deferred taxes | 309 | 309 | ||
| Total liabilities | 40,031 | 43,461 | ||
| Total shareholders' equity | 91,390 | 90,215 | ||
| Total liabilities and shareholders' equity | $ | 131,421 | $ | 133,676 |
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