One week after rejecting its former CEO’s bid for board seat nominees, Galaxy Gaming reported increased second-quarter earnings, reversing a year-earlier loss and revenue that was higher than a year earlier.
In a 10-Q filing with the Securities and Exchange Commission on Wednesday, Las Vegas-based Galaxy, which provides casinos with nontraditional table games and table game bonus features, such as side wagers on blackjack, said its net income was $1.1 million, or 4 cents per share, for the three months ended June 30, reversing a net loss of $596,393, or 1 cent per share, a year earlier.
Adjusted earnings before interest, taxes, depreciation and amortization, a cash flow measure that excludes nonrecurring costs, rose 45 percent to $2.4 million from $1.7 million, buoyed by higher net income and add-backs related to its strategic alternatives review.
Revenue rose 20 percent to $5.4 million from $4.5 million. Higher revenue from its bonus jackpot system and premium games such as High Card Flush, Heads Up Hold ’em and Cajun Stud boosted results.
On Aug. 7, the company said it rejected a slate of potential board nominees submitted by Robert Saucier, the company’s founder and former CEO, saying they were filed too late to be valid. The company said it had expected Saucier and Robert Pietrosanto, a former Galaxy senior sales specialist, to solicit Galaxy’s stockholders for the nominations.
The company said a notice of nomination for the 2019 annual meeting, slated for Aug. 28, would have had to arrive by June 29. Saucier and Pietrosanto submitted their names Aug. 2, the company said.
“Mr. Saucier’s and Mr. Pietrosanto’s purported notice was delivered after the notice deadline required by Galaxy’s bylaws, and … shall not be considered at the 2019 annual meeting.”
Last year, Galaxy retained Macquarie Capital to help evaluate strategic alternatives, including the potential sale of shares of the company’s common stock held by Triangulum Partners LLC, a company controlled by Saucier.
On May 6, Galaxy, redeemed all stock held by Triangulum Partners, a company controlled by Saucier, who before the redemption, was Galaxy’s majority shareholder. In return for the redemption, the company said Triangulum received a $39 million promissory note.
Nevada gaming regulators had threatened to reject the company’s license application because of issues in Saucier’s past. He had also previously raised doubts with gaming regulators in California, Oregon and Washington.
In June, Galaxy named longtime gaming industry executive Gavin Isaacs to its board. He held several gaming industry leadership positions since the late 1990s, including president of Aristocrat Technologies, chief operating officer of Bally Technologies, CEO of SHFL Entertainment, and CEO of Scientific Games. He began his career as an attorney in Australia.
When he joined Galaxy’s board, Isaacs said, “I believe Galaxy Gaming is in a very unique place, with tremendous opportunities in front of it. I am hopeful that my experience in gaming, especially my time in the table games business, and my experience in (mergers and acquisitions), will be helpful in driving Galaxy to the next level.”
Apparently looking to expand, Galaxy has announced new licensing approval in three jurisdictions — Ontario, Canada; Maryland, and Wisconsin — since May.
Galaxy Gaming shares rose 2 cents, or 1.11 percent, Wednesday to close at $1.54 on the Over-the-Counter Bulletin Board. The share price has risen 13.2 percent in 2019.
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