Galaxy Gaming promises to pay staff, stop billing clients during mandated casino closures Matthew Crowley, CDC Gaming Reports · April 1, 2020 at 7:22 am Galaxy Gaming has adjusted to the coronavirus pandemic with a show of altruism. The Las Vegas-based casino table games and systems developer, manufacturer, and distributor said this month that it won’t bill clients and will keep its staff employed and on the payroll during the nationwide closure. In a statement preceding Monday’s release of earnings, Galaxy Gaming reiterated its March 16 message that the company had sufficient cash on hand to continue paying its employees through the casino closures. To bolster its ability to pay staff, the company drew down $1 million on its revolving credit line. Galaxy also said it projects to have enough liquidity to maintain its current operations for a period well beyond the casino closings, although it gave no specifics. “The world has changed drastically in the past week and our customers appear to be among the hardest hit, with mandatory closures in several jurisdictions and more likely to come,” Galaxy CEO Todd Cravens said in a statement. “These closures will put incredible burdens on our customers with respect to their own customers and employees and we don’t want to add to those burdens. We hope the crisis passes quickly and we look forward to serving our customers again on the other side of this.” Also in the statement, Chief Financial Officer Harry Haggerty said Galaxy will pro-rate licensing recurring arrangements for the part of each month’s billing that client casinos are closed. Galaxy Gaming’s full-year earnings, cash flow, and revenue all rose from a year earlier. In a 10-K filed Monday with the Securities and Exchange Commission, the company said its net income was $2.9 million, or 11 cents per diluted share, for the 12 months ended March 31, up from net income of $1.2 million, or 3 cents per share, a year earlier. Twelve-month adjusted earnings before interest, taxes, depreciation, and amortization, a cash flow measure that excludes one-time costs, rose 33% to $8.8 million from $6.6 million. Twelve-month revenue rose 14.5% to $21.3 million from $18.6 million. Galaxy spent the first quarter expanding or positioning itself to expand. On Feb. 25, the company said it would buy Isle of Man-based Progressive Games Partners LLC for $12.4 million. Galaxy said it will pay $10.4 million on the price in cash. Progressive Games owns exclusive worldwide online rights to a comprehensive suite of proprietary casino table games including Perfect Pairs and Caribbean Stud Poker. “We see online gaming as a key development and expansion area for our business and believe that our great table games will be received well as more and more markets open (online gaming),” Cravens said in a statement. “This transaction positions us in several ways to control our own destiny in online gaming. First, we get direct relationships with major online players. Second, we get full control of how our own content — and the content we get from others — is licensed to those operators. And we are taking all these steps as online gaming is expanding across the United States.” Galaxy said the deal will need regulatory approvals; the company gave no schedule for when the deal might close. Galaxy in January said it received California Gambling Control Commission approval for a gaming resource supplier license. California is North America’s largest table games market. Galaxy noted that it has been licensed in 13 states since May 6, 2019, when it redeemed the shares of former CEO Robert Saucier. Also in January, Galaxy named Gavin Wright sales consultant responsible for European markets. In Monday’s 10-K, Galaxy Gaming recapped its legal wrangling with Saucier, who founded Galaxy in 2000 and left the company in November 2018 without explanation. Saucier resigned as Galaxy’s chairman and CEO in September 2017 after the Nevada Gaming Control Board had nearly denied his application for a license to distribute new games in Nevada. Saucier had also previously raised doubts with gaming regulators in California, Oregon, and Washington. Saucier sued the company on Oct. 18, alleging his shares had been wrongfully redeemed and arguing that Galaxy Gaming was obligated to pay him year-end bonuses despite his resignation. Galaxy disputed the claims in court. The company said the case is in discovery and a trial is set for October. Galaxy Gaming shares fell 3 cents, or 2.94%, Tuesday to close at 85 cents on the Over-the-Counter Bulletin Board. Follow Matthew Crowley on Twitter @copyjockey.