Wed, 02 Dec 2020

  • Company Quarterly Record of $2.8 Million Revenue Plus Deferred Revenue
  • Backlog of $2.0 Million
  • Conference Call Scheduled for Today at 4:30 PM ET

TOCCOA, GA / ACCESSWIRE / November 12, 2020 / Galaxy Next Generation, Inc. (OTCQB:GAXY), a provider of interactive learning technology solutions, today announced the Company's operating and financial results for the fiscal first quarter ended September 30, 2020.

Key Financial Highlights for Q1 FY 2020

  • Revenue increased 89% to $1.2 million
  • Deferred revenue of $1.6 million
  • Product Gross Margin of 49%
  • Gross Margin of 29% after freight and transit
  • Total Assets increased to $5.2 million
  • Backlog increased to $2.0 million

Key Business Highlights for Q1 FY 2020

  • Added production and manufacturing in Arizona to increase sales to OEM partners
  • Partnered with a Florida public school district (7th largest in nation) to provide protective gear for schools
  • Awarded a contract of $172,000 from Thompson School District in Loveland, Colorado for new Cloud-Based Intercom and Paging solution (a new product launched in Q1)
  • Received commitment for up to $600,000 in Cov-Shield products from school district in southern Texas
  • Received $1.5 million purchase order under its supply agreement from an OEM customer in additional to a previously provided order of approximately $0.9 million.
  • Expanded to Australia with new distribution partnership with Technology Core, Inc.

Sequential Quarterly Financials

Management Commentary
'We are extremley proud of our start to fiscal year 2021 as we continued to demonstrate impressive 89% growth of our income for our core technology interactive panels and related accessories and introduced our new product line of Cov-Shield protective products,' commented, Gary LeCroy, Galaxy's Chief Executive Officer. 'Our fiscal year first-quarter revenue, deferred included, of $2.8 million is more than all the revenue we generated in the previous fiscal year.'

LeCroy concluded, 'Our deferred revenue and backlog continue to increase and remain strong, a good indicator of future revenue trends. Our capital structure has improved with each passing quarter and we have a goal over the next twelve months to uplist to a major U.S. national exchange. We believe this is just the beginning of a major technology turnover cycle in the K-12 education market, as the way our students learn continues to evolve, and we look forward to being a major participant in it.'

Shareholder Conference Call
Date:
Thursday, November 12, 2020
Time: 4:30 PM ET
Dial-in: 1-844-985-2021 (Domestic)
1-973-528-0035 (International)
Participant Entry Code: 964230

If you would like to submit a question, please send an email with your question to IR@GalaxyNext.us prior to the call. Galaxy will do their best to answer all questions.

Webcast: https://www.webcaster4.com/Webcast/Page/2559/38821

For those unable to participate during the live broadcast, a replay of the call will also be available through November 26, 2020 by dialing 1-877-481-4010 (domestic) and 1-919-882-2331 (international) and referencing the replay pin number: 38821.

Financial Results for the Three Months Ended September 30, 2020:
Revenue for the three months ended September 30, 2020 was $1.2 million, an increase of $0.6 million or 89%, as compared to $0.6 million for the three months ended September 30, 2019. Additionally, deferred revenue amounted to $1.6 million as of September 30, 2020. Revenues during the three months ended September 30, 2020 substantially consisted of revenues from sales of technology interactive panels and related products. Revenues increased due to the increase in the customer base for interactive panels and related products as well as additional revenues received through Concepts and Solutions, which were acquired in September 2019.

Gross profit for the three months ended September 30, 2020 was $0.3 million, an increase of $0.2 million or 163%, as compared to $0.1 million for the three months ended September 30, 2019. The resulting gross margin was 29% for the three months ended September 30, 2020, compared to 21% for the three months ended September 30, 2019.

General and administrative expenses for the three months ended September 30, 2020 were $4.2 million, an increase of $2.1 million or 96%, compared to $2.1 million for the three months ended September 30, 2019. Of note, $2.8 million represent consulting fees and employee compensation paid through the issuance of stock, which did not impact cash, for the three months ended September 30, 2020. Additionally, amortization of intangible assets for the three months ended September 30, 2020 totaled $80,512 which did not impact cash. There was no amortization of intangibles during the three months ended September 30, 2019.

Operating loss for the three months ended September 30, 2020 was $3.8 million, an increase of $1.8 million, or 90%, compared to $2.0 million for the three months ended September 30, 2019. Operating loss for the three months ended September 30, 2020 included $2.8 million of non-cash stock-based compensation compared to $0 non-cash stock-based compensation, for the three months ended September 30, 2019.

Other expenses for the three months ended September 30, 2020 were $9.3 million, an increase of $9.3 million, compared to nil for the three months ended September 30, 2019. For the three months ended September 30, 2020, this was comprised of $1.1 million negative change in fair value of derivative liability, $0.4 million interest accretion and $7.9 million interest expense. Interest expense was due to sales of our common stock to investors under the Put Purchase Agreement and attributed to the increase in our debt.

Net loss for the three months ended September 30, 2020 was $13.1 million, an increase of $1.4 million, or 219%, compared to $2.0 million for the three months ended September 30, 2019. The resulting loss per share for the three months ended September 30, 2020 was ($0.008) per diluted share, compared to ($0.138) per diluted share for the three months ended September 30, 2019.

Noncash contributing factors for the net loss incurred for the three months ended September 30, 2020 is as follows:

a) $2,763,000 and $1,327,811 represent consulting fees and employee compensation paid through the issuance of stock for the three months ended September 30, 2020 and 2019, respectively;

b) amortization of intangible assets for the three months ended September 30, 2020 totaling $80,512; and

c) change in fair value of the derivative liability related to convertible notes payable of $(1,053,895) and $802,968 for the three months ended September 30, 2020 and 2019.

d) Interest accretion of $(399,936) and $228,933 related to convertible notes payable for the three months ended September 20, 2020 and 2019.

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
P:888-859-1274

SOURCE: Galaxy Next Generation, Inc.



View source version on accesswire.com:
https://www.accesswire.com/616260/Galaxy-Next-Generation-Reports-First-Quarter-Fiscal-Year-2021-Results

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