Galaxy Gaming Reports Q3 2022 Financial Results

LAS VEGAS, Nov. 14, 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 nine months ended September 30, 2022.

Financial Highlights

Q3 2022 vs. Q3 2021

Revenue increased 12% to $5,907K
Adjusted EBITDA decreased 5% to $2,350K
Net loss of $(699)K vs. net income of $874K
9 Months 2022 vs. 9 Months 2021

Revenue increased 22% to $17,502K
Adjusted EBITDA increased 17% to $7,382K
Net loss of $(1,828)K vs. net income of $1,513K
Balance Sheet Changes (vs. December 31, 2021)

Cash increased 20% to $19,275K
Total long-term debt1 (gross) decreased to $59,550K from $60,500K
Stockholders’ deficit increased to $(18,506)K from $(17,286)K
Executive Comments

“Despite the continued strengthening of the US dollar, we had an excellent quarter,” said Todd Cravens, President and CEO. “On a constant currency basis, revenue increased by 19% in the quarter and 27% in the first nine months vs. the same periods in 2021. As compared to Q2 2022, sequential revenue growth was 6% on a constant currency basis. But the most newsworthy event happened after the end of the quarter at G2E – the gaming show held annually in Las Vegas. We introduced several new games and new technologies that were very well received by clients. In fact, we already have several commitments to trial some of these new products.

“Finally, at the end of the quarter, in consideration of a $2 million cash payment, we eliminated the obligation to make contingent consideration payments to the original seller of the intellectual property supporting our Bonus Craps™ side bet. Based on the run rate in Q3, this should save us around $315K on an annual basis and potentially more as Bonus Craps deployments increase.”


1 Includes current portion.

“Exchange rates, interest rates and inflation rates worsened in Q3,” stated Harry Hagerty, Galaxy’s CFO. “The dollar continued to appreciate versus the Euro and the British Pound, and the floating rate upon which our interest expense is calculated increased by 138 basis points in the quarter. Inflation continues to affect us as most of our expenses are denominated in US dollars, and the current quarter reflects a higher-than-normal level of professional services expenses as we strengthen our financial systems and our intellectual property protection. But despite the challenges, the Company is performing well, as Todd’s comments about revenue in constant currency and our G2E performance attest. Our balance sheet improved in the quarter with increased cash balances and modestly reduced debt balances, and we were comfortably in compliance with the financial covenant in our Fortress credit agreement.

“The worsening rates environment requires us to modestly modify our guidance for the remainder of the current year,” Hagerty added. “We now forecast revenue in the midpoint of the previously expressed range of $22.5-$23.5 million and Adjusted EBITDA at the low end of the previously expressed range of $10-11 million. This forecast assumes no new lockdowns from COVID-19 or the equivalent, no worsening of the impact to our business from the war in Ukraine, and no economic recession.”

On November 11, 2022, the Board of Directors reauthorized repurchases of the Company’s common stock of up to $750,000, subject to the Company remaining in compliance with the provisions of the Term Loan Credit Agreement and, in particular, the $750,000 restricted payments basket.