Galaxy Gaming on Wednesday announced that its board has authorized a share repurchase program of up to $4 million of the company’s outstanding common stock.
The authorization follows the termination of Galaxy’s previously announced merger agreement with Evolution Malta Holding Limited, under which Evolution has acknowledged its obligation to pay Galaxy a $5.2 million termination fee.
In a news release July 20, Galaxy said it was evaluating its options, including seeking a merger agreement extension or terminating the agreement.
But the next day, Evolution announced the termination of its planned acquisition of Galaxy Gaming after the merger agreement expired on July 17 without being completed.
A news release said the board’s decision “underscores its confidence in Galaxy’s strategy, its balance sheet, its management team, and its view that the company’s shares do not currently reflect the underlying value and growth trajectory of the business.”
“Our board’s decision to authorize this repurchase program is a statement of its confidence in our company and the value we believe this stock represents,” Galaxy Gaming President and CEO Matt Reback said in a statement. “”Our strong and growing free cash flow — further bolstered by the $5.2 million termination fee — gives us the flexibility to return capital to shareholders while continuing to invest in the initiatives that have driven our momentum over the past several months. This is exactly the kind of disciplined capital allocation our shareholders should expect from us going forward ”
During the past several months, Galaxy has continued to expand its table games product portfolio, grow its footprint in new markets, deepen partnerships with new and existing customers, and increase the share of its recurring revenue — building on a licensing base that today spans more than 140 licenses in 28 states and more than 30 countries. The company also has continued to add high-caliber talent across the organization to support its next phase of growth.
“This program reflects the strength of our financial position and our commitment to creating shareholder value through every avenue available to us,” said Galaxy Gaming Chief Financial Officer of Galaxy Steven Kopjo.
The repurchase program authorizes Galaxy to occasionally repurchase shares through open market purchases, privately negotiated transactions, or a trading plan intended to qualify under Rule 10b5-1 under the Securities Exchange Act of 1934, as amended and in accordance with Rule 10b-18 under the Act, with the timing and amount determined based on market conditions and other factors, including constraints specified in the Rule 10b5-1 repurchase plan. Galaxy’s board has approved the adoption of a written Rule 10b5-1 repurchase plan under which share repurchases may be effected.
Galaxy had previously authorized the repurchase up to $750,000 of common stock, but as of July 22, no shares have been repurchased by Galaxy under that authorization and today’s repurchase program supersedes that one.
