Financial Highlights
Q4 2023 vs. Q4 2022
- Revenue (gross) increased 25% to
$8,382K - Revenue (net) increased 13% to
$6,737K - Net loss of
$(820)K vs. net income of$55K - Adjusted EBITDA decreased 10% to
$2,828K - Increased 10% when adjusting Q4 22 for ERTC1
Fiscal Year 2023 vs. Fiscal Year 2022
- Revenue (gross) increased 23% to
$31,729K - Revenue (net) increased 19% to
$27,789K - Net loss of
$(1,808)K vs. net loss of$(1,773)K - Adjusted EBITDA increased 1% to
$10,635K - Increased 7% when adjusting FY 22 for ERTC2
- Increased 7% when adjusting FY 22 for ERTC2
Balance Sheet Changes (vs.
- Cash decreased 9% to
$16,692K - Total long-term debt3 (gross) decreased to
$58,431K from$59,740K - Stockholders’ deficit increased to
$(18,243)K from$(17,885)K
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1 Q4 2022 benefitted from
2 FY 2022 benefitted from
3 Includes current portion.
Executive Comments
“Q4 of 2023 marked a substantial improvement in operating results as compared to the previous quarter,” said
“We had a full quarter of license revenue from EZ Baccarat® in the fourth quarter. However, we were not able to complete the entire installation backlog of our EZ Baccarat Trend Displays, on which we pay no royalties, until February of 2024. We expect these displays will help grow revenue on both a gross and net basis in 2024.
“I am now 4 ½ months into my tenure at Galaxy, and I am very excited about the prospects for the Company. The addition of
“With the addition of EZ Baccarat, revenues in our Core vertical now have a contra-revenue component as our Digital vertical has had,” stated
“We incurred some higher-than-planned shipping expenses in Q4 as we expedited the installation of EZ Baccarat displays. Intellectual property registration expenses also continued to be higher than historical levels as we expand the reach of our products into global markets. In our online business, we continue to see double-digit increase in demand for our games (as measured by the gaming revenue they generate). However, the growth in our gross revenue was affected during the back half of 2023 as a result of the renegotiation of royalty rates with Evolution in exchange for a long-term extension of our agreement with them. We reduced the level of our bad debt reserve as we made collection progress on some slow-moving accounts in the quarter. Finally, we have added back all of the expenses related to the Q4 CEO transition in calculating Adjusted EBITDA.
“Our cash position increased to
“We are offering the following guidance for fiscal 2024 with comparison to 2023. This guidance assumes no impact to our business from the wars in
(mm) | 2023 Actual | 2024 Range | Midpoint Change | ||||||
Recurring License Revenue | $ | 28.0 | 23.2 | % | |||||
Sale of Perpetual Licenses | 3.7 | 1.0 - 1.5 | (66.2 | )% | |||||
Gross Revenue | $ | 31.7 | 12.8 | % | |||||
Royalties Netted against Gross Revenue | (3.9 | ) | (6.0 - 6.5) | 60.3 | % | ||||
Net Revenue | $ | 27.8 | 2.4 | % | |||||
Adjusted EBITDA4 | $ | 10.6 | 17.9 | % |
The company will update its investor deck to reflect the results in this quarter. Investors are encouraged to send questions to management at investors@galaxygaming.com by
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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.
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
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.
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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. Adjusted EBITDA is not a measure of performance defined in accordance with generally accepted accounting principles in
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Exhibit 1 Disaggregation of Revenue | ||||||||||||
(mm) | Q4 23 | Q4 22 | FY 23 | FY 22 | ||||||||
Consolidated | ||||||||||||
Recurring License Revenue | $ | 8.0 | $ | 6.9 | $ | 28.0 | $ | 25.6 | ||||
Sale of Perpetual Licenses | 0.4 | 0.2 | 3.7 | 0.3 | ||||||||
Gross Revenue | $ | 8.4 | $ | 7.1 | $ | 31.7 | $ | 25.9 | ||||
Royalties Netted against Gross Revenue | (1.7 | ) | (0.8 | ) | (3.9 | ) | (2.5 | ) | ||||
Net Revenue | $ | 6.7 | $ | 6.3 | $ | 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 | $ | 3.2 | $ | 11.4 | $ | 10.5 | ||||
Royalties Netted against Gross Revenue | (0.9 | ) | (0.8 | ) | (3.0 | ) | (2.5 | ) | ||||
Net Revenue | $ | 2.1 | $ | 2.4 | $ | 8.4 | $ | 8.0 |
Exhibit 2 Reconciliation of Net Income to Adjusted EBITDA | ||||||||
Year Ended | ||||||||
Adjusted EBITDA Reconciliation: | 2023 | 2022 | ||||||
Net loss | $ | (1,807,586 | ) | $ | (1,773,189 | ) | ||
Interest expense | 9,063,112 | 7,411,224 | ||||||
Interest income | (611,271 | ) | (71,223 | ) | ||||
Provision for income taxes | 79,228 | 208,887 | ||||||
Depreciation and amortization | 2,274,461 | 2,761,359 | ||||||
EBITDA | 8,997,944 | 8,537,058 | ||||||
Share-based compensation (1) | 1,021,953 | 1,278,068 | ||||||
Realized and unrealized foreign currency exchange (gain)/loss (2) | 6,099 | 290,394 | ||||||
Severance expense (3) | 474,798 | 28,477 | ||||||
CEO transition expenses (4) | 128,106 | — | ||||||
Special project expense (benefit) - Triangulum (5) | — | (86,959 | ) | |||||
Special project expense - Other (6) | 5,969 | 487,446 | ||||||
Adjusted EBITDA | $ | 10,634,869 | $ | 10,534,484 |
Three Months Ended | ||||||||
Adjusted EBITDA Reconciliation: | 2023 | 2022 | ||||||
Net loss | $ | (819,891 | ) | $ | 55,104 | |||
Interest expense | 2,315,557 | 2,129,902 | ||||||
Interest income | (185,037 | ) | (48,057 | ) | ||||
Provision for income taxes | 15,334 | 310,828 | ||||||
Depreciation and amortization | 635,357 | 571,570 | ||||||
EBITDA | 1,961,320 | 3,019,347 | ||||||
Share-based compensation (1) | 305,925 | 323,518 | ||||||
Realized and unrealized foreign currency exchange (gain)/loss (2) | (15,979 | ) | (199,647 | ) | ||||
Severance expense (3) | 448,589 | — | ||||||
CEO transition expenses (4) | 128,106 | — | ||||||
Special project expense (benefit) - Triangulum (5) | — | — | ||||||
Special project expense - Other (6) | — | 9,287 | ||||||
Adjusted EBITDA | $ | 2,827,961 | $ | 3,152,505 |
(1) Represents non-cash expenses for stock option and restricted stock vesting of directors, officers, employees, and consultants.
(2) Represents realized and unrealized gains and losses due to fluctuations in foreign currency rates.
(3) Includes
(4) Represents recruitment fee of
(5) Represents payment made to the Company on a policy claim relating to the Triangulum Litigation in 2021.
(6) Represents legal fees paid in relation to miscellaneous shareholder matters.
Source:
2024 GlobeNewswire, Inc., source