Galaxy Gaming, a Las Vegas casino table game and system developer and manufacturer, has reached a settlement with Robert Saucier and Triangulum Partners. It posted a third-quarter net profit, reversing a year-old loss. Both cash flow and revenue reached new heights.
Galaxy Gaming on the Mend
Galaxy filed a 10-Q with the Securities and Exchange Commission November 15. It reported that it earned $792,520, or $0.04 a share, for the third quarter of the year. This is in contrast to a net loss of $0.07 per share ($1.3 million) a year prior.
The adjusted earnings before interest, taxes and depreciation, a cash flow measure that excludes one-time costs, rose to $2.5 million from $36,000. Revenues more than quadrupled from $1.2 million to $5.3 million.
Galaxy Chief Financial Officer Harry Hagerty stated that Galaxy’s brick-and-mortar business recovery and online strength had boosted Galaxy’s liquidity. This trend is something he hopes will continue into the new year.
Todd Cravens, the company’s CEO, noted that Galaxy’s surges in the third quarter were due to a “significant portion” of British land-based customers closing because of the pandemic. He added, “We expect our land-based business to continue to recover from the COVID closures and for our online business to continue to grow in both Europe and North America.”
Lawsuit Finally Comes to an End
Perhaps even more significant than the earnings was the announcement that Galaxy founder Robert Saucier and Galaxy had settled a legal dispute that had been ongoing for over two years.
Galaxy stated on November 7 it will pay Saucier $39.1 Million and Triangulum, plus interest accrued at 2.2% per year from May 6 through December 31. The latter marks the deadline to raise the necessary funds and pay settlements.
Galaxy and Triangulum said that they will not proceed with litigation until the settlement is paid. Saucier, Triangulum, and Galaxy won’t compete for the funds for five years after the payment date.
Galaxy, which entered into a term credit agreement with Fortress Credit Corp. on November 15, announced that it will partially use the proceeds to pay Triangulum Partners and Saucier.
The loan is due to mature on November 15, 2026. It requires quarterly amortization payments in the amount of $150,000 and an annual sweep to cover 50% of excess cash flow. Mark Lipparelli, chairman of the Galaxy board, called the settlement “significant.”
He added, “Our board believes this is an appropriate settlement of the litigation between us and Mr. Saucier and his entity,” he said. “Further, we are pleased to see steady progress in the company’s results as our casino and online gaming partners emerge from the shutdowns associated with the COVID pandemic.”
Galaxy purchased all 23.3 million shares of common stock owned by Triangulum Partners on May 7, 2019. Saucier controls this company. Prior to the redemption, Saucier was a majority shareholder in Galaxy.
Saucier resigned from the company without explanation in November 2018. In September 2017, he resigned as chairman and CEO of Galaxy after nearly losing his application to the Nevada Gaming Control Board (NGCB) for a games distribution license.