Galaxy Next Generation Reports Fourth Quarter and Fiscal Year 2020 Results

Rhea-AI Summary

Galaxy Next Generation, Inc. (OTCQB:GAXY) reported significant financial growth with a 185% revenue increase in education technology for the quarter and 80% for the fiscal year. The company achieved deferred revenue growth of 459% to $1.1 million and a backlog of $2.43 million. Q4 revenue reached $469,179, a 65% rise, while FY revenue was $2.32 million, up 44%. However, net loss for Q4 increased to $3.93 million, reflecting ongoing operational challenges despite robust sales growth.

Positive

• Education technology revenue grew 185% and 80% for the quarter and fiscal year, respectively.
• Deferred revenue increased 459% to $1.1 million.
• Backlog increased to $2.43 million.
• Gross profit for Q4 was $449,451, a significant turnaround from a gross loss of $435,915 in Q4 2019.
• Total assets increased 129% to $4.5 million.

Negative

• Operating loss for Q4 increased to $2.16 million, up 17% from the previous year.
• Net loss for Q4 was $3.93 million, an increase of 24% compared to Q4 2019.
• General and administrative expenses increased 87% to $10.93 million for the fiscal year.

• Education Technology Revenue Growth of 185% and 80% for the Quarter and Fiscal Year, Respectively
• Deferred Revenue Increased 459% to $1.1 Million
• Backlog Increased to $2.43 Million

TOCCOA, GA / ACCESSWIRE / September 29, 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 fourth quarter and year ended June 30, 2020.

Key Financial Highlights for Q4 and FY 2020

• Revenue of $469,179 and $2,319,852, representing overall growth of 65% and 44%, respectively, in technology interactive panels, related products and interactive learning technology solutions
• Deferred revenue of $1,133,992, representing 359% increase since June 30, 2019
• Gross Margin of 51%
• Total Assets increased 129% to $4,498,010
• Backlog increased to $2,589,000

Key Business Highlights for Q4 FY 2020

• Awarded $350,000 contract from Valdosta City School District in Georgia
• Awarded $250,000 contract from south Florida school district
• Awarded largest additional purchase order from Newton County, Georgia
• Plan to execute a letter of intent to acquire Classroom Technology Solutions, Inc.
• Launched Phoenix cloud-based bell and intercom system
• Partnered with Radix for enhanced device management
• Completed initial install of bell and intercom system at Thompson School County School District in Colorado
• Awarded $100,000 contract for bell and intercom system
• Launched Cov-Shield

Management Commentary
"We are very pleased with our recent results, specifically over the past few months, which are indicated by our increase in deferred revenue and backlog," commented, Gary LeCroy, Galaxy's Chief Executive Officer. "Most of the recently awarded purchase orders in the quarter and subsequent to the end of the quarter will be recognized as revenue in our fiscal quarter ended September 30, 2020.

LeCroy concluded, "Our sales pipeline remains strong across both our education technology interactive panels and Cov-Shield product lines. We expect our first quarter of fiscal year 2021, ending September 30, 2020 to be our best quarter in Company history."

Financial Results for the Three Months Ended June 30, 2020:
Revenue for the three months ended June 30, 2020 was $469,179, an increase of $304,474 or 65%, compared to $164,705 for the three months ended June 30, 2019. Additionally, deferred revenue amounted to $1,133,992, compared to $247,007 at June 30, 2019. Deferred revenues increased due to the increases in the customer base for interactive panels and related products as well as additional deferred revenues of Concepts and Solutions, acquired in September 2019.

Revenues substantially consisted of revenues from sales of technology interactive panels and related products. Revenues increased primarily due to the increases in the customer base for interactive panels and related products as well as additional revenues from our subsidiaries, Concepts and Solutions, which were acquired in September 2019.

Gross profit for the three months ended June 30, 2020 was $449,451, an increase of $885,366, compared to a gross loss of $435,915 for the three months ended June 30, 2019.

Operating loss for the three months ended June 30, 2020 was $2,159,446, an increase of $294,212, or 17%, compared to $1,865,234 for the three months ended June 30, 2019.

Net loss for the three months ended June 30, 2020 was $3,925,456, an increase of $749,999, or 24%, compared to a net loss of $3,175,457 for the three months ended June 30, 2019. The resulting loss per share (EPS) for the three months ended June 30, 2020 was ($0.04) per share, compared to an EPS loss of ($0.31) per share for the three months ended June 30, 2019.

Financial Results for the Twelve Months Ended June 30, 2020:
Revenue for the twelve months ended June 30, 2020 was $2,319,852, an increase of $437,794 or 23%, compared to $1,882,058 for the twelve months ended June 30, 2019. Of note, revenue associated with the entertainment theater ticket sales and concessions was $589,705 for the twelve months ended June 30, 2019. Without such, the revenue growth for the twelve months ended June 30, 2020 would have been 78%.

Gross profit for the twelve months ended June 30, 2020 was $1,183,726, an increase of $1,067,999 or 923%, as compared to $115,727 for the twelve months ended June 30, 2019. The resulting gross margin was 51% for the twelve months ended June 30, 2020, compared to 6% for the twelve months ended June 30, 2019.

General and administrative expenses for the twelve months ended June 30, 2020 was $10,928,797, an increase of $5,090,527 or 87%, compared to $5,838,270 for the twelve months ended June 30, 2019. For the twelve months ended June 30, 2020, non-cash stock-based compensation of $2,087,425, non-cash asset impairment expenses of $2,000,287 and legal settlement expenses of $2,000,000 were recorded. There were no impairment expenses or legal settlement expenses, but there was non-cash stock-based compensation of $2,416,934 during the twelve months ended June 30, 2019.

Operating loss for the twelve months ended June 30, 2020 was $9,745,071, an increase of $4,022,528, or 70%, compared to $5,722,543 for the twelve months ended June 30, 2019.

Other income and expense for the twelve months ended June 30, 2020 was $4,281,036, an increase of $3,340,462 or 355%, compared to $940,574 for the twelve months ended June 30, 2019. For the twelve months ended June 30, 2020, this expense was comprised of $2,651,957 positive change in fair value of derivative liability offset by $1,825,506 interest accretion and $5,113,902 interest expense. The increase in interest expense was due to the increase in our debt and pre-payment costs related to loans paid off in advance of maturity.

Net loss for the twelve months ended June 30, 2020 was $14,026,107, an increase of $7,362,990 or 111%, compared to $6,663,117 for the twelve months ended June 30, 2019. The resulting loss per share (EPS) for the twelve months ended June 30, 2020 was ($0.147) per share, compared to an EPS loss of ($0.658) per share for the twelve months ended June 30, 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 approximately 30 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.

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FAQ

What were Galaxy Next Generation's revenue figures for Q4 and FY 2020?

Galaxy Next Generation reported Q4 revenue of $469,179, a 65% increase year-over-year, and FY 2020 revenue of $2,319,852, up 44%.

How much did deferred revenue increase for Galaxy Next Generation?

Deferred revenue increased by 459% to $1.1 million for the fiscal year ending June 30, 2020.

What is the current backlog for Galaxy Next Generation?

Galaxy Next Generation's backlog increased to $2.43 million as of June 30, 2020.

What was the net loss for Galaxy Next Generation in Q4 2020?

The net loss for Q4 2020 was $3,925,456, up 24% from the same quarter in 2019.

What are the future expectations for Galaxy Next Generation?

Management expects the first quarter of fiscal year 2021 to be the best quarter in the company's history.