Galaxy Gaming, a Las Vegas casino table-game and systems developer, manufacturer, and distributor, posted a net loss, reversing year-earlier earnings, although revenue rose. Company officials said fluctuating rates – interest, foreign exchange, and inflation – dragged down results.
In an 8-K report filed Monday with the Securities and Exchange Commission, Galaxy game said its net loss was $1.1 million, or 5 cents diluted per share, for the three months ended June 30, compared to a year-earlier loss of $639,192, or 5 cents per diluted share.
Adjusted earnings before interest, taxes, depreciation, and amortization, a cash-flow measure that excludes one-time costs, rose 58.8% to $2.7 million from $1.7 million.
Revenue more than doubled to $5.9 million from $2.1 million.
In a statement, Galaxy Gaming Chief Financial Officer Harry Hagerty said the U.S. dollar’s appreciation against the euro and the British pound cost the company $190,000 in revenue in the quarter, compared to what the company would have reaped using 2021 rates.
“We have seen very little benefit from the new rates on the expense side, as most of our expenses are denominated in dollars,” he said. “The increase in inflation has affected us, as we have seen significant increases in travel expenses and are having to offer increased salaries and wages to hire new employees and to retain existing ones.”
Hagerty added that the floating interest rate on which the company’s long-term debt is based rose by 116 basis points from January to July.
Nevertheless, Galaxy Gaming Chief Executive Office Todd Cravens highlighted positives, saying one of the company’s high-end United Kingdom customers will launch the first three-meter progressive, with a top side bet of 100 British pounds, in the year’s second half. The company has started installing its Triton 1.0 progressive platform in the U.S. and will demonstrate Triton 2.0 at the Global Gaming Expo in October.
Hagerty added that the company had more than $17 million in cash at quarter-end and was “comfortably in compliance” with the net-leverage covenant in its Fortress credit agreement.
Galaxy Gaming forecast 2022 revenue from $22.5 million to $23.5 million.
On July 13, Galaxy Gaming named Meredith Brill to its board of directors. She fills the seat vacated by William Zender, who resigned from the board July 1. And on July 7, Galaxy Gaming named Steph Nel senior vice president of worldwide sales.
In June, Galaxy Gaming said it entered a partnership to have Spirit Gaming, a Germany-based independent casino gaming distribution company, distribute Galaxy Gaming products in Austria, Luxembourg, Belgium, Switzerland, and Liechtenstein.
Galaxy Gaming shares fell 32 cents, or 8.29%, Monday to close at $3.49 on the Over-the-Counter Bulletin Board.
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