Conference Call Scheduled for Today at 4:30pm ET
TOCCOA, GA / ACCESSWIRE / November 15, 2021 / Galaxy Next Generation, Inc. (OTCQB:GAXY), a provider of interactive learning technology solutions, today announced the Company's operating and financial results for the three months ended September 30, 2021.
Summary Snapshot of Quarter Ended September 30, 2021 (Year-over-Year and Quarter-over-Quarter):
Three months ended | September 30, 2021 | September 30, 2020 | ||||||
Revenue | $ | 1,684,771 | $ | 1,178,213 | ||||
Gross Profit | 666,008 | 345,036 | ||||||
General and Administrative Expenses | 1,530,874 | 4,155,227 | ||||||
Loss from Operations | (864,866 | ) | (3,810,191 | ) | ||||
Other Income (Expense) | 478,839 | (9,324,587 | ) | |||||
Net Loss | (386,027 | ) | (13,134,778 | ) | ||||
Interest, Taxes, Depreciation, Stock Compensation and Amortization | 424,545 | 7,254,776 | ||||||
Non-GAAP Adjusted EBITDA | $ | 38,518 | $ | (5,880,002 | ) | |||
Key Financial Highlights for Three Months Ended September 30, 2021
- Highest revenue quarter in company history of 43% growth to near $1.7 million with an additional $0.3 million in deferred and an additional $0.8 million in booked orders at quarter end
- 2nd consecutive quarter with Adjusted EBITDA profitability
- Net Loss significantly reduced to $0.4 million, from $13.1 million in the year ago quarter
- Total Assets increased to $7 million
- Total Liabilities decreased by $1 million and an additional $0.5 million subsequent to quarter end (listed as subsequent event in relation to our line of credit) from year end
- Shareholder equity (deficit) was reduced by $0.8 million bringing the deficit to just $0.7 million
- Net cash used in operating activities was reduced to $0.9 million compared to $2.8 million in the year ago quarter
Key Business Highlights for Three Months Ended September 30, 2021:
- Secured numerous contracts and catalog bids in Texas and with National purchasing co-ops
- Completed $0.7 million install of interactive panels and accessories with South Georgia school district
- Shipped approximately 700 classroom audio kits to an OEM partner
- Secured 2nd year contract with our first cloud-based G2 Communicator customer
- Won two awards from Spaces for Learning for Visual Alerts, an integral part of ‘G2 Secure'
- Launched G2 Secure, a one-touch solution for school safety and security
- G2 Secure was recognized and featured in a story within the ‘Campus Security and Life Safety' publication
- Secured partnership with HavenLock and started development on integrating G2 SafeSpace into our security platform
- Marketing opportunity for G2 Interactive in the Netflix original show, TitleTown High
Management Commentary
Gary LeCroy, Galaxy's Chief Executive Officer, stated, "We had an excellent start to our fiscal year 2022 with an outstanding first quarter. Our $1.7 million revenue set a new quarterly record for our Company, as all of the groundwork our team has laid over the past year is paying off. Our expanded sales team, successful catalog bids and school district clients returning for additional technology and products are all contributing to our record growth. The catalog bids, deferred revenue and booked orders will continue to enable us to accelerate our revenue growth and profitability."
Galaxy's Chief Financial Officer, Magen McGahee, commented, "All of our key financial performance indicators continue to trend in the right direction. Our balance sheet has strengthened with increases in cash and assets and decreases in stockholders' deficit and liabilities. Not only did our revenue increase by 43% for the quarter, but we also achieved our 2nd consecutive quarter of Adjusted EBITDA profitability."
McGahee, continued, "Increases in school budgets will continue to have a positive impact on revenues over the next 12 months. Our diverse portfolio of products, led by interactive panels, Our Bell, Paging, and Intercom product line, G2 communication software(s), our related OEM partnerships, and now our newly released G2 Secure product line places us in great position to take advantage of the increased school spending on technology and products to better connect in and out of the classroom and school district and the addition of the annual licensing fees associated with G2 Secure puts us in a better position to predict future revenue with the reoccuring software cost. We are very proud of our achievements to-date and look forward to continuing to accelerate our growth and profitability and build shareholder value."
Shareholder Update Conference Call
Date: Monday, November 15, 2021
Time: 4:30 PM ET
Dial-in: 1-888-506-0062 (Domestic)
1-973-528-0011 (International)
Entry Code: 382966
Webcast: https://www.webcaster4.com/Webcast/Page/2559/43663
For those unable to participate during the live broadcast, a replay of the call will also be available through November 29, 2022 by dialing 1-877-481-4010 (domestic) and 1-919-882-2331 (international) and referencing the replay pin number: 382966.
Financial Results for the Three Months Ended September 30, 2021:
- Revenue for the three months ended September 30, 2021 was $1.7 million, an increase of $0.5 million or 43%, as compared to $1.2 million for the three months ended September 30, 2020. Additionally, deferred revenue amounted to $0.3 million as of September 30, 2021.
- Gross profit for the three months ended September 30, 2021 was $0.7 million, an increase of $0.3 million or 93%, as compared to $0.3 million for the three months ended September 30, 2020. The resulting gross margin was 39.5% for the three months ended September 30, 2021, as compared 29.3%
- Operating loss for the three months ended September 30, 2021 was $0.9 million, a decrease of $2.9 million, or 77%, compared to $3.8 million for the three months ended September 30, 2020. Of note, total general and administrative expenses as a percentage of revenue decreased to 91% from 353% for the quarter just ended, reflecting the Company's focus on increasing revenue, reducing expenses, and performing more efficiently. Management believes this ratio will decrease going forward as revenues continue to grow at a higher rate than operating expenses.
- Net loss for the three months ended September 30, 2021 was $0.4 million, a decrease of $12.7 million, or 97%, compared to $13.1 million for the three months ended September 30, 2020. The resulting loss per share for the three months ended September 30, 2021 was ($0.0001) per diluted share, compared to ($0.0080) per diluted share for the three months ended September 30, 2020.
- Of note, there were no non-cash contributing factors for the operating loss incurred for the three months ended September 30, 2020.
- Cash balance of $0.4 million at September 30, 2021.
Noncash contributing factors for the net loss incurred for the quarters ending September 30, 2021 and 2020 is as follows:
a) $32,750 and $2,763,000 represent consulting fees paid through the issuance of stock for the three months ended September 30, 2021 and 2020, respectively.
b) Interest expenses related to the equity purchase agreement of $252,900 and $4,006,900 for the three months ended September 30, 2021 and September 30, 2020, respectively.
c) Depreciation and amortization expenses related to intangibles and capitalized development costs of $130,145 and $84,940 for the three months ended September 30, 2021 and September 30, 2020, respectively.
Use of Non-GAAP Financial Measures
To supplement the Company's financial statements presented on a GAAP basis, Galaxy provides Adjusted EBITDA as a supplemental measure of its performance.
To provide investors with additional insight and allow for a more comprehensive understanding of the information used by management in its financial and decision-making surrounding pro forma operations, Galaxy supplements its consolidated financial statements presented on a basis consistent with U.S. generally accepted accounting principles, or GAAP, Adjusted EBITDA as a non-GAAP financial measures of earnings. Adjusted EBITDA represents EBITDA plus stock-based compensation and change in fair value of derivative liabilities. Galaxy management uses Adjusted EBITDA as financial measures to evaluate the profitability and efficiency of the business model. The Company uses these non-GAAP financial measures to assess the strength of the underlying operations of the business. These adjustments, and the non-GAAP financial measures that are derived from them, provide supplemental information to analyze its operations between periods and over time. Galaxy finds this especially useful when reviewing pro forma results of operations, which include large non-cash amortizations of intangible assets from acquisitions and stock-based compensation. Investors should consider its non-GAAP financial measures in addition to, and not as a substitute for, financial measures prepared in accordance with GAAP.
About Galaxy Next Generation, Inc.
Galaxy Next Generation (OTCQB: GAXY) is a provider of interactive learning technology solutions that allows the presenter and participant to engage in a fully collaborative instructional environment. Galaxy's products include Galaxy's own private-label interactive touch screen panel as well as numerous other national and international branded peripheral and communication devices. Galaxy's distribution channel consists of 22+ resellers across the U.S. who primarily sell the Company's products within the commercial and educational market. Galaxy does not control where resellers focus their resell efforts, although generally, the K-12 education market is the largest customer base for Galaxy products - comprising nearly 90% of Galaxy's sales.
For additional information, please visit our website at: www.galaxynext.us
Safe Harbor Statement
This press release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. These forward-looking statements are based on the current plans and expectations of management and are subject to a number of uncertainties and risks that could significantly affect the company's current plans and expectations, as well as future results of operations and financial condition. A more extensive listing of risks and factors that may affect the company's business prospects and cause actual results to differ materially from those described in the forward-looking statements can be found in the reports and other documents filed by the company with the Securities and Exchange Commission. The company undertakes no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.
Investors Contact:
IR@GalaxyNext.us
888-859-1274
SOURCE: Galaxy Next Generation, Inc.
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