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Galaxy Gaming Reports Q4 and Full Year 2021 Financial Results

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Chairman Comments on Governance Matters

LAS VEGAS, March 31, 2022 (GLOBE NEWSWIRE) — Galaxy Gaming, Inc. (OTCQB: GLXZ), a developer and distributor of casino table games and enhanced systems for land-based casinos and iGaming content, announced today its financial results for the quarter and fiscal year ended December 31, 2021.

Financial Highlights

Q4 2021 vs. Q4 2020

  • Revenue increased 73% to $5,670K
  • Adjusted EBITDA increased 93% to $2,431K1
  • Net income of $598K vs. net income of $1,179K2

Full Year 2021 vs. Full Year 2020

  • Revenue increased 95% to $19,984K
  • Adjusted EBITDA increased 534% to $8,734K3
  • Net income of $2,112K vs. net loss of $(2,209)K

Balance Sheet Changes (vs. December 31, 2020)

  • Cash increased 168% to $16,059K
  • Total long-term debt4 (gross) increased to $60,500K from $52,051K
  • Stockholders’ deficit decreased to $(17,286)K from $(24,797)K

Executive Comments

“We finished 2021 with positive momentum,” said Todd Cravens, President and CEO. “Even with some of our clients’ properties still affected by COVID-19, we delivered gross revenue of $6.1 million in the fourth quarter, a record. Our iGaming business performed very well, with iGaming gross revenues of $8.1 million in 2021, also a record. We believe, as the impacts of the COVID-19 pandemic continue to subside for our clients, we will experience a strong recovery in our GG Core business (felt and electronics) and continued growth in our iGaming business.”

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“Our financial position is strong,” said Harry Hagerty, the Company’s CFO. “We have significant cash balances and modest debt maturities this year. We are prohibited from paying dividends or repurchasing stock until November of this year due to continuing restrictions imposed by the Main Street Priority Loan repaid last year. While we will remain responsive, we intend to continue to build up our cash position to keep net leverage low. Total Net Leverage is the only financial covenant in our Fortress loan, and we were comfortably in compliance with that covenant at year-end.”

Hagerty added, “For fiscal 2022, we are forecasting revenue (net of iGaming royalties) in a range of $23.5 to $25.0 million, and Adjusted EBITDA in a range of $11.5 to $12.5 million. This forecast assumes no new lockdowns from COVID-19, no impact to our business from the war in Ukraine, and no economic recession.”

Governance Comments

“As we enter the 2022 calendar year, we look ahead in focusing the Company’s business efforts beyond on the severe negative existential impacts of the pandemic. We also, through substantial efforts of our collective team, set the Saucier litigation and related refinancing in our rear-view mirror in the midst of the tough operating environment of our customers which, in some cases, included complete closures. Additionally, in response to the significant increase in the price of our stock in 2021, we have decided to restructure Board compensation beyond the 35% reduction in equity compensation we recently announced,” stated Mark Lipparelli, Chair of the Galaxy Board. “We modified our methodology and targeted aggregate annual Board compensation for 2022 at the levels presented below, for all members, and intend to pay such compensation 60% in cash and 40% in stock. Cash compensation will be paid monthly in arrears and stock compensation will be paid quarterly in arrears, with the stock valued at the average daily closing price in the last month of the quarter. Ms. Kondra and Mr. Lipparelli will receive only the compensation presented below for their service as the Audit Committee Chair and Board Chair, respectively.”

Annual Compensation Target
Board Member Audit Committee Chair Board Chair
$150,000 $175,000 $200,000

“Using a share price of $4.45, the proposed Board compensation plan would result in 74,157 shares being issued to our five Directors in 2022. Based on the 23,718,968 shares outstanding on March 28, 2022, this represents projected dilution of approximately 3/10ths of one percent. We appreciate shareholders’ interest in and support for Galaxy, and we look forward to the Company’s future success together.”

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Forward-Looking Statements

This press release contains, and oral statements made from time to time by our representatives may contain, forward-looking statements based on management’s current expectations and projections, which are intended to qualify for the safe harbor of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Forward-looking statements include statements identified by words such as “believe,” “will,” “may,” “might,” “likely,” “expect,” “anticipates,” “intends,” “plans,” “seeks,” “estimates,” “believes,” “continues,” “projects” and similar references to future periods, or by the inclusion of forecasts or projections. All forward-looking statements are based on current expectations and projections of future events.

These forward-looking statements reflect the current views, models, and assumptions of Galaxy Gaming, and are subject to various risks and uncertainties that cannot be predicted or qualified and could cause actual results in Galaxy Gaming’s performance to differ materially from those expressed or implied by such forward looking statements. These risks and uncertainties include, but are not limited to, the ability of Galaxy Gaming to enter and maintain strategic alliances, product placements or installations, in land based casinos or grow its iGaming business, garner new market share, secure licenses in new jurisdictions or maintain existing licenses, successfully develop or acquire and sell proprietary products, comply with regulations, have its games approved by relevant jurisdictions, and adapt to changes resulting from the COVID-19 pandemic and other factors. All forward-looking statements made herein are expressly qualified in their entirety by these cautionary statements and there can be no assurance that the actual results, events or developments referenced herein will occur or be realized. Readers are cautioned that all forward-looking statements speak only to the facts and circumstances present as of the date of this press release. Galaxy Gaming expressly disclaims any obligation to update or revise any forward-looking statements, whether because of new information, future events or otherwise.

About Galaxy Gaming

Headquartered in Las Vegas, Nevada, Galaxy Gaming (galaxygaming.com) develops and distributes innovative proprietary table games, state-of-the-art electronic wagering platforms and enhanced bonusing systems to land-based, riverboat, and cruise ship and casinos worldwide. In addition, through its wholly owned subsidiary, Progressive Games Partners LLC, Galaxy licenses proprietary table games content to the online gaming industry. Connect with Galaxy on Facebook, YouTube and Twitter.

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Non-GAAP Financial Information

Adjusted EBITDA includes adjustments to net loss/income to exclude interest, taxes, depreciation, amortization, share based compensation, gain/loss on extinguishment of debt, foreign currency exchange gains/losses, change in estimated fair value of interest rate swap liability and severance and other expenses related to litigation. Gross revenue adds back royalty expense paid to owners of intellectual property re-licensed to our iGaming clients. Neither Gross Revenue or Adjusted EBITDA is a measure of performance defined in accordance with generally accepted accounting principles in the United States of America (“U.S. GAAP”). However, Gross Revenue and Adjusted EBITDA are used by management to evaluate our operating performance. Management believes that disclosure of the Gross Revenue and Adjusted EBITDA allows investors, regulators and other stakeholders to view of our operations in the way management does. Gross Revenue and Adjusted EBITDA should not be considered as an alternative to net income or to net cash provided by operating activities as a measure of operating results or of liquidity. Finally, Gross Revenue and Adjusted EBITDA may not be comparable to similarly titled measures used by other companies.

Contact:

Media:   Phylicia Middleton (702) 936-5216
Investors:   Harry Hagerty (702) 938-1740

  Three Months Ended December 31,   Years ended December 31,
Adjusted EBITDA Reconciliation: 2021
  2020
  2021
  2020
Net income (loss) $ 598,384     $ 1,178,588     $ 2,111,812     $ (2,208,887 )
Interest expense   1,054,912       176,435       1,505,386       683,357  
Share redemption consideration   96,023       195,482       682,469       781,928  
Interest income   (885 )     (389 )     (2,048 )     (25,702 )
Depreciation and amortization   723,774       706,795       2,858,991       2,222,042  
Share-based compensation   324,806       225,173       1,532,455       737,991  
Foreign currency exchange loss   33,368       (61,015 )     64,879       34,961  
Change in fair value of interest rate swap liability         (52,837 )     (66,009 )     (74,487 )
Provision (benefit) for income taxes   41,637       (113,130 )     48,637       (605,937 )
Paycheck Protection Program Loan forgiveness         (840,243 )           (840,243 )
Severance expense               12,596       20,058  
Special project expense   (440,878 )     (184,218 )     (15,338 )     652,198  
Adjusted EBITDA $ 2,431,141     $ 1,261,282     $ 8,733,830     $ 1,377,279  
               

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  Three Months Ended December 31, 2021   Twelve Months Ended December 31, 2021
Gross and Net Revenue Reconciliation: Consolidated   iGaming   Consolidated   iGaming
Revenue (gross) $ 6,054,185     $ 2,102,890     $ 21,654,588     $ 8,098,152  
Royalties (contra-revenue)   (383,934 )     (383,934 )     (1,670,210 )     (1,670,210 )
Revenue (net) $ 5,670,251     $ 1,718,956     $ 19,984,378     $ 6,427,942  
               

1 Net Income and Adjusted EBITDA in Q4 2021 were impacted by approximately $253K in unusual expense items.
2 Q4 2020 and FY 2020 net income include a gain of $840K relating to the forgiveness of our Paycheck Protection Program loan.
3 Adjusted EBITDA in 2020 includes an addback of $652K of legal and other expenses related to our litigation with Triangulum Partners LLC. Adjusted EBITDA in 2021 includes a reduction of $15K, which is the net of our Triangulum litigation expenses less $720,000 in D&O insurance claim payments received in 2021.
4 Includes current portion.

 

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Galaxy Gaming® Highlights Galaxy Operating System™ and EZ Baccarat® at IGA 2024

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LAS VEGAS, April 02, 2024 (GLOBE NEWSWIRE) — Galaxy Gaming, Inc. (OTC: GLXZ), the world’s leading independent developer and distributor of casino table games and technology, will showcase their innovative new table game operating system and player-favorite table games at this year’s Indian Gaming Association (“IGA”) Trade Show & Convention from April 10 – 11 in booth 770 at Anaheim Convention Center.

President and CEO of Galaxy Gaming, Matt Reback shared his excitement, stating, “We look forward to showcasing our premier table games and innovative solutions with our tribal partners at IGA 2024. We’re proud to offer the largest library of category-leading brands that players love enhanced by technology to elevate their gaming experience. This powerful combination can transform the gaming floor for operators.”

Galaxy Operating System™ – The Smartest Table Management System

Upgrade your casino floor with Galaxy Operating System (GOS), the cutting-edge game management system of the future. Boasting innovative progressive jackpot options, eye-catching Nebula LED sensors, and groundbreaking digital tracking capabilities, GOS is a pioneer and the best way for operators to offer enhanced table games on their floors.

GOS’ flexible electronic bonusing platform powers the world’s first Dynamic Progressive. Unlike any other progressive, Dynamic Progressive blends our most popular games with an exhilarating experience for those players looking for a thrill by adding volatility to the game without changing the play experience on the player-favorite base game. Visit the Galaxy Gaming booth to see the latest version of Dynamic Progressive complete with new themes, animations, and celebrations.

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The Smart Bet – Galaxy Gaming’s Ultimate Table Games Library

Boasting the most robust table games library in the industry, Galaxy Gaming fuses established classics with exciting novelties. Level up your casino floor with player favorites like 21+3®, Perfect Pairs®, and Heads Up Hold’em® now amplified with Dynamic Progressive™, powered by GOS™. Don’t miss the #1 commission-free baccarat brand in North America, EZ Baccarat® now featuring the exciting new Panda 8 and Dragon 7 Progressive – the newest baccarat progressive on the market offering an individual jackpot.

Also featured in-booth is Roulette Up™, an inventive game with an optional side bet and progressive wager where players can wager that the outcome will provide an increasing sequence from each spin. Tracking is now seamless, with GOS powering digital tracking for the Roulette Up progressive wager.

Operators are invited to explore the possibilities at booth 770 and discover how Galaxy can elevate their gaming operations.

About Galaxy Gaming 
Headquartered in Las Vegas, Nevada, Galaxy Gaming (galaxygaming.com) develops and distributes innovative games, bonusing systems, and technology solutions to physical and online casinos worldwide. Galaxy Gaming offers games proven to perform developed by gaming experts and backed by the highest level of customer support. Galaxy Gaming Digital is the world’s leading licensor of proprietary table games to the online gaming industry. Connect with Galaxy Gaming on Facebook, YouTube, Instagram, and Twitter. 

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This press release contains, and oral statements made from time to time by our representatives may contain, forward-looking statements based on management’s current expectations and projections, which are intended to qualify for the safe harbor of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Forward-looking statements include statements identified by words such as “believe,” “will,” “may,” “might,” “likely,” “expect,” “anticipates,” “intends,” “plans,” “seeks,” “estimates,” “believes,” “continues,” “projects” and similar references to future periods, or by the inclusion of forecasts or projections. All forward-looking statements are based on current expectations and projections of future events. 

 These forward-looking statements reflect the current views, models, and assumptions of Galaxy Gaming, and are subject to various risks and uncertainties that cannot be predicted or qualified and could cause actual results in Galaxy Gaming’s performance to differ materially from those expressed or implied by such forward looking statements. These risks and uncertainties include, but are not limited to, the ability of Galaxy Gaming to enter and maintain strategic alliances, product placements or installations in land based casinos or grow its iGaming business, garner new market share, secure licenses in new jurisdictions or maintain existing licenses, successfully develop or acquire and sell proprietary products, comply with regulations, including changes in gaming related and non-gaming related statutes and regulations that affect the revenues of our customers in land-based casino and, online casino markets, have its games approved by relevant jurisdictions, and adapt to changes resulting from the COVID-19 or other pandemics including without limitation, government imposed shut downs, travel restrictions and supply chain interruptions, unfavorable economic conditions in the US and worldwide, our level of indebtedness, restrictions and covenants in our loan agreement, dependence on major customers, protection of intellectual property and our ability to license the intellectual property rights of third parties, failure to maintain the integrity of our information technology systems, including without limitation, cyber-attacks or other failures in our telecommunications or information technology systems, or those of our collaborators, third-party logistics providers, distributors or other contractors or consultants, could result in information theft, data corruption and significant disruption of our business, and other factors. All forward-looking statements made herein are expressly qualified in their entirety by these cautionary statements and there can be no assurance that the actual results, events or developments referenced herein will occur or be realized. Readers are cautioned that all forward-looking statements speak only to the facts and circumstances present as of the date of this report. Galaxy Gaming expressly disclaims any obligation to update or revise any forward-looking statements, whether because of new information, future events or otherwise.

Actual results could differ materially from those expressed or implied in our forward-looking statements. Our future financial condition and results of operations, as well as any forward-looking statements, are subject to change and to inherent known and unknown risks and uncertainties. You should not assume at any point in the future that the forward-looking statements in this report are still valid. We do not intend, and undertake no obligation, to update our forward-looking statements to reflect future events or circumstances.

Contact: 

Media: 
Phylicia Middleton (702) 938-1753 
Investors:         
Harry Hagerty (702) 938-1740 

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Galaxy Gaming Announces its Annual Meeting of Stockholders For 2024-

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LAS VEGAS, March 27, 2024 (GLOBE NEWSWIRE) — Galaxy Gaming, Inc. (OTCQB: GLXZ) (“Galaxy” or the “Company”), a developer and distributor of online and land-based casino table games and enhanced systems, announced today that its annual meeting of stockholders will be held virtually on May 29, 2024, for stockholders of record as of April 2, 2024. The Notice of Stockholders Meeting will be provided to stockholders of record as of April 2, 2024, in accordance with applicable statutes and regulations.

Forward-Looking Statements

Certain statements in this release may constitute forward-looking statements, which involve a number of risks and uncertainties. Galaxy cautions readers that any forward-looking information is not a guarantee of future performance and that actual results could differ materially from those contained in the forward-looking information due to a number of factors, including those listed from time to time in reports that Galaxy files with the Securities and Exchange Commission.

About Galaxy Gaming

Headquartered in Las Vegas, Nevada, Galaxy Gaming (galaxygaming.com) develops and distributes innovative proprietary table games, state-of-the-art electronic wagering platforms and enhanced bonusing systems to land-based, riverboat, and cruise ship casinos worldwide. In addition, directly and through its wholly owned subsidiary, Progressive Games Partners LLC, Galaxy licenses proprietary table games content to the online gaming industry. Connect with Galaxy on Facebook, YouTube and Twitter.

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Contact:

Media:   Phylicia Middleton (702) 936-5216
Investors:   Harry Hagerty (702) 938-1740

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Galaxy Gaming Provides Update to Earnings Release

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LAS VEGAS, March 26, 2024 (GLOBE NEWSWIRE) — Galaxy Gaming, Inc. (OTCQB: GLXZ), a developer and distributor of casino table games and enhanced systems for land-based casinos and iGaming content, announced corrections to certain financial information provided in the earnings release issued on March 25, 2024.

In the table that provided guidance for fiscal 2024, the growth rate for Net Revenue was miscalculated. The calculated growth rate at the midpoint of the guidance range is 6.1%, not the 2.4% that was in the original release. A corrected table is presented below.

(mm) 2023 Actual   2024 Range   Midpoint Change
Recurring License Revenue $ 28.0     $34.0 – $35.0   23.2 %
Sale of Perpetual Licenses   3.7     1.0 – 1.5   (66.2 )%
Gross Revenue $ 31.7     $35.0 – $36.5   12.8 %
Royalties Netted against Gross Revenue   (3.9 )   (6.0 – 6.5)   60.3 %
Net Revenue $ 27.8     $29.0 – $30.0   6.1 %
           
Adjusted EBITDA4 $ 10.6     $12.0 – $13.0   17.9 %
 

In the Disaggregation of Revenue table in Exhibit 1, Recurring License Revenue in GG Digital for Q4 2022 was incorrect. That error flowed through to the consolidated revenue figures for that period. A corrected Exhibit 1 is attached hereto.

Forward-Looking Statements
This press release contains, and oral statements made from time to time by our representatives may contain, forward-looking statements based on management’s current expectations and projections, which are intended to qualify for the safe harbor of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Forward-looking statements include statements identified by words such as “believe,” “will,” “may,” “might,” “likely,” “expect,” “anticipates,” “intends,” “plans,” “seeks,” “estimates,” “believes,” “continues,” “projects” and similar references to future periods, or by the inclusion of forecasts or projections. All forward-looking statements are based on current expectations and projections of future events.

These forward-looking statements reflect the current views, models, and assumptions of Galaxy Gaming, and are subject to various risks and uncertainties that cannot be predicted or qualified and could cause actual results in Galaxy Gaming’s performance to differ materially from those expressed or implied by such forward looking statements. These risks and uncertainties include, but are not limited to, the ability of Galaxy Gaming to enter and maintain strategic alliances, product placements or installations in land based casinos or grow its iGaming business, garner new market share, secure licenses in new jurisdictions or maintain existing licenses, successfully develop or acquire and sell proprietary products, comply with regulations, including changes in gaming related and non-gaming related statutes and regulations that affect the revenues of our customers in land-based casino and, online casino markets, have its games approved by relevant jurisdictions, and adapt to changes resulting from the COVID-19 or other pandemics including without limitation, government imposed shut downs, travel restrictions and supply chain interruptions, unfavorable economic conditions in the US and worldwide, our level of indebtedness, restrictions and covenants in our loan agreement, dependence on major customers, protection of intellectual property and our ability to license the intellectual property rights of third parties, failure to maintain the integrity of our information technology systems, including without limitation, cyber-attacks or other failures in our telecommunications or information technology systems, or those of our collaborators, third-party logistics providers, distributors or other contractors or consultants, could result in information theft, data corruption and significant disruption of our business, and other factors. All forward-looking statements made herein are expressly qualified in their entirety by these cautionary statements and there can be no assurance that the actual results, events or developments referenced herein will occur or be realized. Readers are cautioned that all forward-looking statements speak only to the facts and circumstances present as of the date of this report. Galaxy Gaming expressly disclaims any obligation to update or revise any forward-looking statements, whether because of new information, future events or otherwise.

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Actual results could differ materially from those expressed or implied in our forward-looking statements. Our future financial condition and results of operations, as well as any forward-looking statements, are subject to change and to inherent known and unknown risks and uncertainties. You should not assume at any point in the future that the forward-looking statements in this report are still valid. We do not intend, and undertake no obligation, to update our forward-looking statements to reflect future events or circumstances.

About Galaxy Gaming
Headquartered in Las Vegas, Nevada, Galaxy Gaming (galaxygaming.com) develops and distributes innovative proprietary table games, state-of-the-art electronic wagering platforms and enhanced bonusing systems to land-based, riverboat, and cruise ship and casinos worldwide. In addition, through its wholly owned subsidiary, Progressive Games Partners LLC, Galaxy licenses proprietary table games content to the online gaming industry. Connect with Galaxy on Facebook, YouTube and Twitter.

Non-GAAP Financial Information
Adjusted EBITDA includes adjustments to net loss/income to exclude interest, taxes, depreciation, amortization, share based compensation, gain/loss on extinguishment of debt, foreign currency exchange gains/losses, change in estimated fair value of interest rate swap liability and severance and other expenses related to litigation. Adjusted EBITDA is not a measure of performance defined in accordance with generally accepted accounting principles in the United States of America (“U.S. GAAP”). However, Adjusted EBITDA is used by management to evaluate our operating performance. Management believes that disclosure of Adjusted EBITDA allows investors, regulators, and other stakeholders to view our operations in the way management does. Adjusted EBITDA should not be considered as an alternative to net income or to net cash provided by operating activities as a measure of operating results or of liquidity. Finally, Adjusted EBITDA may not be comparable to similarly titled measures used by other companies.

Contact:

Media: Phylicia Middleton (702) 936-5216
Investors: Harry Hagerty (702) 938-1740

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Exhibit 1
 
Disaggregation of Revenue
 
(mm) Q4 23 Q4 22 FY 23 FY 22
Consolidated        
Recurring License Revenue $ 8.0   $ 6.5   $ 28.0   $ 25.6  
Sale of Perpetual Licenses   0.4     0.2     3.7     0.3  
Gross Revenue $ 8.4   $ 6.7   $ 31.7   $ 25.9  
Royalties Netted against Gross Revenue   (1.7 )   (0.8 )   (3.9 )   (2.5 )
Net Revenue $ 6.7   $ 5.9   $ 27.8   $ 23.4  
         
GG Core        
Recurring License Revenue $ 5.0   $ 3.7   $ 16.6   $ 15.1  
Sale of Perpetual Licenses   0.4     0.2     3.7     0.3  
Gross Revenue $ 5.4   $ 3.9   $ 20.3   $ 15.4  
Royalties Netted against Gross Revenue   (0.8 )       (0.9 )    
Net Revenue $ 4.6   $ 3.9   $ 19.4   $ 15.4  
         
GG Digital        
Recurring License Revenue $ 3.0   $ 2.8   $ 11.4   $ 10.5  
Royalties Netted against Gross Revenue   (0.9 )   (0.8 )   (3.0 )   (2.5 )
Net Revenue $ 2.1   $ 2.0   $ 8.4   $ 8.0  
 

4 It is not possible to provide a reconciliation of Adjusted EBITDA to Net Income without undue burden, as certain factors such as interest rates and tax rates are not knowable.

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