 Revenues up 23, Expects Positive Earnings and Free Cash Flow in Third QuarterBOULDER, Colo., Aug. 03, 2020 GLOBE NEWSWIRE -- Gaia, Inc. NASDAQ: GAIA, a conscious media and community company, reported financial results for the second quarter ended June 30, 2020. Second Quarter 2020 Highlights vs. Same Year-Ago Quarter 23 increase in revenues to 16.2 million. Generated 1.9 million in Adjusted EBITDA, an improvement of 3.5 million. Generated 1.9 million in cash flow from operations, an improvement of 4.4 million.The results for the second quarter represent 18 months of disciplined execution to drive operating efficiencies across the business while balancing growth initiatives and spend discipline, said Paul Tarell, Gaias CFO. We have continued to benefit from higher member growth due to the success of our exclusive content, smart marketing spend and improved retention, which has allowed Gaia to transition to positive earnings and free cash flows starting in July.Second Quarter 2020 Financial ResultsRevenues in the second quarter increased 23 to 16.2 million from 13.2 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 663,400 as of June 30, 2020 with net member additions for the quarter of 58,300.Gross profit in the second quarter increased 24 to 14.1 million compared to 11.4 million in the year-ago quarter. Gross margin increased to 87.1 versus 86.4 in the year-ago quarter.Total operating expenses in the second quarter increased 4 to 16.3 million from 15.7 million in the year-ago quarter, primarily due to 0.7 million in non-recurring share-based expense in the second quarter of 2020 for earn out consideration related to the strong performance of the acquisition Gaia completed in June 2019. Excluding this one-time charge, operating expenses improved to 15.6 million or 96 of revenues from 15.7 million or 119 of revenues in the year ago quarter. Customer acquisition costs as a percentage of revenue were 52 for the second quarter, an improvement from 57 in the year-ago quarter.Net loss in the second quarter improved significantly to 2.5 million, or 0.13 per share, compared to a net loss of 4.5 million, or 0.25 per share, in the year-ago quarter.Adjusted EBITDA also improved to 1.9 million compared to 1.6 million in the year-ago quarter.Gaia generated cash from operations of 3.9 million in the first half of 2020 compared to cash used of 5.2 million in the comparable year-ago period, an improvement of 9.1 million.Gaias cash conversion cycle has continued to improve, with overall cash used during the quarter of 1.6 million compared to a use of 8.9 million in the year ago quarter excluding incremental proceeds from Gaias real estate refinancing.As of June 30, 2020, Gaia had 8.5 million in cash. Gaia intends to generate positive net income and free cash flow in the third quarter.Conference Call The company will hold a conference call today at 4:30 p.m. Eastern time to discuss its second quarter 2020 results.Date: Monday, August 3, 2020 Time: 4:30 p.m. Eastern time 2:30 p.m. Mountain time Toll-free dial-in number: 800 239-9838 International dial-in number: 323 794-2551 Conference ID: 3953218Please 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 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 17, 2020.Toll-free replay number: 844 512-2921 International replay number: 412 317-6671 Replay ID: 3953218About Gaia Gaia is a global video streaming service and community that provides curated conscious media in four primary channelsSeeking Truth, Transformation, Alternative Healing and Yogato 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 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 Gaias filings with the Securities and Exchange Commission. Gaia assumes no duty to update any forward-looking statements.ContactsPaul Tarell Gaia, Inc. 303 222-3330 Slach Gateway Investor Relations 949 574-3860 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 2020 2019 2020 2019 unaudited unaudited Revenues, net 16,153 13,164 30,664 25,631 Cost of revenues 2,083 1,785 3,984 3,385 Gross profit 14,070 11,379 26,680 22,246 Expenses: Selling and operating 14,417 14,173 28,875 29,895 Corporate, general and administration 1,873 1,493 3,290 3,086 Total operating expenses 16,290 15,666 32,165 32,981 Loss from operations 2,220 4,287 5,485 10,735 Interest and other income expense, net 305 196 551 159 Loss before income taxes 2,525 4,483 6,036 10,894 Income tax expense 42 69 42 Loss from continuing operations 2,525 4,525 6,105 10,936 Loss from discontinued operations 57 258 Net loss 2,525 4,468 6,105 11,194 Loss per share-basic and diluted: Continuing operations 0.13 0.25 0.33 0.61 Discontinued operations - 0.01 Basic and diluted net loss per share 0.13 0.25 0.33 0.62 Weighted-average shares outstanding: Basic and diluted 18,837 17,944 18,660 17,917 Adjusted EBITDA 1,896 1,574 2,065 5,523 See definition and reconciliation on following page. GAIA, INC. Summary of Cash Flows For the Three Months Ended June 30, For the Six Months Ended June 30, in thousands 2020 2019 2020 2019 unaudited unaudited Net cash provided by used in: Operating activities - continuing operations 1,858 2,557 3,864 5,317 Operating activities - discontinued operations 57 76 Operating activities 1,858 2,500 3,864 5,241 Investing activities 3,480 6,414 7,081 11,338 Financing activities 61 4,092 181 4,092 Net change in cash 1,561 4,822 3,036 12,487 Reconciliation of Loss from Continuing Operations to EBITDA and Adjusted EBITDA For the Three Months Ended June 30, For the Six Months Ended June 30, in thousands 2020 2019 2020 2019 unaudited unaudited Net loss 2,525 4,468 6,105 11,194 Interest expense, net 305 196 551 159 Provision for income taxes 42 69 42 Depreciation and amortization expense 3,053 2,141 6,022 4,361 EBITDA 833 2,089 537 6,632 Share-based compensation expense 1,063 515 1,528 1,109 Adjusted EBITDA 1,896 1,574 2,065 5,523 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 June 30, December 31, in thousands, except share and per share data 2020 2019 unaudited ASSETS Current assets: Cash 8,458 11,494 Accounts receivable 2,617 2,310 Prepaid expenses and other current assets 1,767 2,443 Total current assets 12,842 16,247 Building and land, net 22,351 22,681 Media library, software and equipment, net 38,580 36,921 Goodwill 17,289 17,289 Investments and other assets 13,117 13,034 Total assets 104,179 106,172 LIABILITIES AND EQUITY Current liabilities: Accounts payable, accrued and other liabilities 8,099 10,594 Deferred revenue 12,320 8,025 Total current liabilities 20,419 18,619 Long-term debt 16,751 18,433 Deferred taxes 276 206 Total liabilities 37,446 37,258 Total equity 66,733 68,914 Total liabilities and equity 104,179 106,172 