Galaxy Gaming Reports Q3 2023 Financial Results - Seite 2

“Our expenses increased year over year due to several factors. Cost of sales and sales commissions increased by almost $200,000, largely related to the perpetual license revenue in Q3 ‘23. Compensation costs increased by approximately $236,000 due to headcount and salary increases which were offset by $103,000 decrease in share-based compensation expense. Legal and regulatory expenses increased due to our continuing efforts to protect our IP worldwide and to increased jurisdictional filings in connection with our EZ Baccarat distribution agreement. Finally, our allowance for doubtful accounts increased by $107,000 in Q3 ‘23 as compared to Q3 ‘22, principally related to financial uncertainties affecting a single customer in the state of Washington.

“Our cash position declined as we purchased over $1 million in equipment to fulfill demand for GoS and EZ Baccarat placements, we prepaid $644,000 in royalty expenses, and cash interest paid on principal payments exceeded Adjusted EBITDA by $413,000” Hagerty continued. “Our loan from Fortress Credit Corp. requires our net leverage not to exceed 6.0x at any of the quarter-ends in 2023, and at the end of Q3 we were at 3.7x, comfortably in compliance. It remains our intention to reduce our net leverage and to pursue refinancing opportunities.

“With respect to the fourth quarter of fiscal 2023, we are forecasting revenue in a range of $7.0-$7.5 million and Adjusted EBITDA in a range of $2.8-$3.2 million. This forecast assumes around $200,000 in perpetual license sales and around $800,000 in net revenues from EZ Baccarat distribution. This forecast assumes no impact to our business from the wars in Ukraine and the Middle East, and no economic recession. Finally, the forecast is based on currency exchange rates that we experienced in the third quarter.”

The company will update its investor deck to reflect the results this quarter. Investors are encouraged to send questions to management at [e-mail] by Wednesday, November 15, 2023. Management will post their answers to investors on November 22.

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.