Wed, 06 Jul 2022

Significantly Reduced Operating and Net Losses Reflect Operational Execution
Management to Host Conference Call Today at 8:30 a.m. ET

TOCCOA, GA / ACCESSWIRE / May 17, 2022 / Galaxy Next Generation, Inc. (OTCQB:GAXY) ('Galaxy' or the 'Company'), a provider of interactive learning technology solutions, announced the Company's operating and financial results for the fiscal third quarter and nine months ended March 31, 2022.

Key Financial Highlights

  • Revenues increased 63% to $1.3 million and increased 40% to $3.9 million for the three and nine months ended March 31, 2022, respectively
  • Operating loss decreased 26% to $1.0 million and decreased 53% to $2.8 million for the three and nine months ended March 31, 2022, respectively
  • Net loss decreased 63% to $1.1 million and decreased 84% to $3.9 million for the three and nine months ended March 31, 2022, respectively
  • Adjusted EBITDA loss decreased 90% to $1.4 million for nine months ended March 31, 2022
  • Total liabilities decreased 40% to $5.3 million in the nine months ended March 31, 2022
  • Total stockholder's deficit decreased 74% to $0.4 million in the nine months ended March 31, 2022

Recent Company Highlights

  • Launched G2 Link classroom audio system
  • Awarded over $230,000 in purchase orders for G2 Interactive Panels and accessories from two Texas school districts
  • Received additional $500,000 rollout schedule for G2 Communicator from existing client school district in Colorado
  • Awarded bid from Texas school district for G2 Communicator and G2 Control software
  • Announced reseller partnerships with C&C Tech Group, Master Audio Visual, Inc., InCareK12, and EP Techworks, to increase penetration in both existing and new regional markets and sectors
  • Delivered an additional 700 units to an OEM customer for its innovative audio products and accessories for use in the K-12 education market
  • Hired Brad Balaban as Regional Sales Manager for the Central U.S.

Management Commentary

'We have executed well against our growth strategy through the third quarter of fiscal year 2022, as demonstrated by our continued increases in revenue and significant reductions in our operating and net losses,' said Gary LeCroy, Chief Executive Officer of Galaxy. 'To keep up with the growing demand for innovative technology solutions from our core customer base, we have strengthened our sales team and further developed our relationships with existing clients. We also secured several new reseller partnerships and launched our new e-commerce platform, which we believe will enable us to expand into new regions for the K-12 education market while potentially providing additional high-growth opportunities in other sectors.

'The response to our launch of G2 Link, our classroom audio amplification system, has been highly positive at industry trade shows and customer demonstrations, and we believe it will be a differentiator for Galaxy as the technology turnover cycle in the K-12 education market continues to take hold. We are ultimately focused on increasing student engagement and achievement by providing our intuitive systems to a rapidly expanding customer base,' concluded LeCroy.

Magen McGahee, Chief Financial Officer of Galaxy, added, 'As we scale our revenue base, we have worked diligently to position our business for sustainable growth by making significant improvements to our cost structure. While the write-off of obsolete inventory resulted in a decrease in our assets from fiscal 2021 year-end, we are committed to continue strengthening our balance sheet and are confident in our ability to generate long-term value for our shareholders.'

Third Quarter Fiscal Year 2022 Conference Call

Date: Tuesday, May 17, 2022
Time: 8:30 a.m. ET
Link: Click Here to Register

Financial Results for the Three and Nine Months Ended March 31, 2022

Revenue for the three months ended March 31, 2022 was $1.3 million, an increase of $0.5 million or 63%, as compared to $0.8 million for the three months ended March 31, 2021. Revenue for the nine months ended March 31, 2022 was $3.9 million, an increase of $1.1 million or 40%, as compared to $2.8 million for the nine months ended March 31, 2021. The increase in revenues was due to an increase in the customer base for interactive panels and related products as well as additional revenues from OEM customers.

Cost of sales increased during the three and nine months ended March 31, 2022 due to an inventory adjustment to write off obsolete inventory, amortization of product development costs, shipping and supply chain delays and higher freight costs.

Gross profit for the three months ended March 31, 2022 was $0.3 million, a decrease of $0.2 million or 40%, as compared to $0.4 million for the three months ended March 31, 2021. The resulting gross margin was 20% for the three months ended March 31, 2022, compared to 54% for the three months ended March 31, 2021. Gross profit for the nine months ended March 31, 2022 was $1.0 million, a decrease of $0.1 million or 11%, as compared to $1.1 million for the nine months ended March 31, 2021. The resulting gross margin was 25% for the nine months ended March 31, 2022, compared to 40% for the nine months ended March 31, 2021.

General and administrative expenses for the three months ended March 31, 2022 were $1.2 million, a decrease of $0.5 million or 29%, compared to $1.7 million for the three months ended March 31, 2021. General and administrative expenses for the nine months ended March 31, 2022 were $3.8 million, a decrease of $3.3 million or 47%, compared to $7.1 million for the nine months ended March 31, 2021.

Operating loss for the three months ended March 31, 2022 was $1.0 million, a decrease of $0.3 million or 26%, compared to $1.3 million for the three months ended March 31, 2021. Operating loss for the nine months ended March 31, 2022 was $2.8 million, a decrease of $3.2 million or 53%, compared to $6.0 million for the nine months ended March 31, 2021.Operating loss for the three and nine months ended March 31, 2022 included $0.1 million and $2.8 million, respectively, of non-cash stock-based compensation.

Other expenses for the three months ended March 31, 2022 were $0.1 million, a decrease of $1.5 million or 92%, compared to $1.6 million for the three months ended March 31, 2021. Other expenses for the nine months ended March 31, 2022 were $1.1 million, a decrease of $16.7 million or 94%, compared to $17.8 million for the nine months ended March 31, 2021. Reduced interest expense of $11.1 during the nine months ended March 31, 2022 is attributed to the decrease in overall debt.

Net loss for the three months ended March 31, 2022 was $1.1 million or ($0.06) per diluted share, a decrease of $1.8 million or 63%, compared to a net loss of $2.9 million or ($0.20) per diluted share for the three months ended March 31, 2021. Net loss for the nine months ended March 31, 2022 was $3.9 million or ($0.23) per diluted share, a decrease of $20.0 million or 84%, compared to a net loss of $23.8 million or ($2.14) per diluted share for the nine months ended March 31, 2021.

Non-cash contributing factors for the net loss incurred for the three and nine months ended March 31, 2022 are as follows:

a) $0 and $2,350 represent consulting fees paid through the issuance of stock for the three months ended March 31, 2022 and 2021, respectively. $32,750 and $2,778,550 represent consulting fees paid through the issuance of stock for the nine months ended March 31, 2022 and 2021, respectively;

b) Interest expenses related to the equity purchase agreement of $0 and $1,805,687 for the three months ended March 31, 2022 and 2021, respectively. Interest expense related to the equity purchase agreement of $2,143,500 and $6,807,587 for the nine months ended March 31, 2022 and 2021, respectively;

c) Depreciation and amortization expenses related to intangibles and capitalized development costs of $137,042 and $96,779 for the three months ended March 31, 2022 and 2021, respectively. Depreciation and amortization expenses related to intangibles and capitalized development costs of $370,419 and $267,660 for the nine months ended March 31, 2022 and 2021, respectively.

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.

Company Contact

IR@GalaxyNext.us
P: 888-859-1274

Investor Relations

Brooks Hamilton
MZ North America
+1 949-546-6326
GAXY@mzgroup.us

SOURCE: Galaxy Next Generation, Inc.



View source version on accesswire.com:
https://www.accesswire.com/701697/Galaxy-Next-Generation-Reports-Third-Quarter-FY-2022-Results-Revenues-Grow-63-YoY-to-13-Million

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