Galaxy Gaming reports Q1 financial results

Highlights

• Revenue: Total revenue for the first quarter 2016 increased 15% to $2,984,099, over the same quarter 2015. This increase is primarily due to additional placement of premium games and expansion into new territories. Between the first quarter 2016 and fourth quarter 2015, total revenues increased 2% to $2,984,099. This increase was recognized in all categories of products, with premium games netting the largest gains. The annualized recurring revenue run-rate as of March 31, 2016 is $11,927,280.
• Total costs and expenses: Expenses for the first quarter 2016 remained relatively consistent with a decrease less than 1% to $2,189,730, when compared to the same quarter 2015. The total costs and expenses in the first quarter 2016 decreased 19% to $2,189,730 compared to the fourth quarter 2015. This decrease was primarily due to legal costs decreasing as litigation commenced formal proceedings in the fourth quarter 2015.
• Adjusted EBITDA: Adjusted EBITDA, a non-GAAP financial measure, for the first quarter 2016 increased 49% to $1,230,814, compared to the same quarter 2015. Lower selling, general & administrative expenses contributed to the increase in Adjusted EBITDA between the periods. Adjusted EBITDA in the first quarter 2016 increased 75% to $1,230,814 compared to the fourth quarter in 2015. This increase was primarily driven by the combination of an increase in revenues and a decrease in selling, general & administrative expenses. The decrease in selling, general & administrative expenses was primarily driven by lower legal costs attributed to litigation.
• Net income: Net income for the first quarter 2016 was $379,367, which was an increase of 502% from the same quarter 2015. The increase was primarily due to the increases in our recurring revenues and lower costs and expenses. The net income of $379,367 in the first quarter reversed a net loss recognized in fourth quarter of 2015. This reversal was the combined result of increased revenues and decreases in selling, general & administrative expenses, for reasons previously mentioned.

Gary A. Vecchiarelli, Galaxy’s CFO commented: “2016 started with increases across the board. We have now increased our recurring revenues 17 of the last 18 quarters. Our EBITDA has also improved significantly, with a one-two punch of an increase in our recurring revenues and a decrease in our operating expenses.”

Robert B. Saucier, Galaxy’s CEO added: “It's always encouraging to start the year on such a high note. While the numbers speak for themselves, it is important to comprehend that throughout 2015 and early 2016, we were engaged in time consuming and expensive litigation. As previously reported, we prevailed in the litigation, which we are in the final stages of winding up. Accordingly, we are now able to focus on more productive things, such as growing our core business. Our results prove that our products are gaining solid market acceptance and as a result, we continue to increase placements. These increases combined with the reduction of operating expenses permit us to aggressively pay down our long-term debt.”