TOCCOA, GA / ACCESSWIRE / November 15, 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 first quarter ended September 30, 2022.
Recent Company Highlights
Awarded a combined $1.3 million in purchase orders and contracts during the first quarter of FY2023
Revenues for the first quarter of $0.6 million and deferred revenues of $0.6 million as of September 30, 2022 reflect successful transition to new sales strategy
Gross margin improved to 56% for the first quarter of FY2023 compared to 40% in the same prior year quarter
Secured reseller partnerships with leading national organizations A3 Communications, Bluum, and Camcor
Appointed veteran technology sales executive Todd Eddy as Chief Revenue Officer
Increased national footprint with entrances into the Ohio, New Hampshire, and Tennessee markets
Recently launched G2 Secure aChat and G2LINK Classroom Audio System won platinum 2022 New Product Awards from leading education publication Spaces4Learning
Management Commentary
"The first quarter of fiscal year 2023 was our first quarter following the transition of our sales model from our previous OEM partner focus to under the G2 brand," said Gary LeCroy, Chief Executive Officer of Galaxy. "As we continue to execute our growth strategy alongside our expanding national reseller network, we expect the benefits of this transition to increasingly translate in our operating results over the remainder of the fiscal year. Demand for innovative solutions that enable a more flexible, effective, and safe learning environment remains strong, and we are well positioned to increase our market share incrementally within the rapidly growing education technology market."
Magen McGahee, Chief Financial Officer of Galaxy, added, "With combined quarterly revenues and deferred revenues totaling nearly $1.3 million for the first quarter, we are pleased to see the effects of our new sales strategy already begin to take effect. We remain focused on building out our brand and our channel partners to enable incremental quarterly growth throughout the remainder of fiscal year 2023 as we work to build value for our shareholders."
Fiscal Year 2023 Outlook
Galaxy expects its revenue for fiscal year 2023 to be at least $6.0 million, representing revenue growth of at least 50% from fiscal year 2022.
Conference Call and Webcast
Date: Tuesday, November 15, 2022
Time: 9:00 a.m. ET
Dial-in (U.S.): 1-877-407-0789
Dial-in (International): 1-201-689-8562
Conference ID: 13734517
Webcast: GAXY Q1 FY 2023 Conference Call
Financial Results for the Three Months Ended September 30, 2022
Revenue for the three months ended September 30, 2022 was $0.6 million compared to $1.7 million for the three months ended September 30, 2021. Additionally, deferred revenue amounted to $0.6 million and $0.2 million as of September 30, 2022 and June 30, 2022, respectively. The decrease in revenues was due to issues with delays in supply chain issues which resulted in a large increase in deferred revenue at quarter end.
Cost of sales decreased during the three months ended September 30, 2022 due to the decrease in revenue as well as our shift to selling products that are lower cost with higher profit margins.
Gross profit for the three months ended September 30, 2022 was $0.3 million compared to $0.7 million for the three months ended September 30, 2021. The resulting gross margin was 56% for the three months ended September 30, 2022, compared to 40% for the three months ended September 30, 2021.
Total general and administrative expenses for the three months ended September 30, 2022 were $1.6 million compared to $1.5 million for the three months ended September 30, 2021.
Operating loss for the three months ended September 30, 2022 was $1.3 million compared to $0.9 million for the three months ended September 30, 2021. Operating loss for the three months ended September 30, 2022 included $0.2 million of non-cash stock-based compensation.
Other expenses for the three months ended September 30, 2022 were $0.3 million compared to other income of $0.5 million for the three months ended September 30, 2021. Interest expense was $0.2 million and $0.5 million for the three months ended September 30, 2022 and 2021, respectively, a decrease of 69%.
Net loss for the three months ended September 30, 2022 was $1.6 million or ($0.075) per diluted share, compared to a net loss of $0.4 million or ($0.025) per diluted share for the three months ended September 30, 2021.
Non-cash contributing factors for the net loss incurred for the fiscal year ended June 30, 2022 are as follows:
a) $188,128 and $32,750 represent noncash consulting fees paid through the issuance of stock for the three months ended September 30, 2022 and 2021, respectively;
b) Noncash interest expenses of $0 and $252,900 for the three months ended September 30, 2022 and 2021, respectively;
c) Depreciation and amortization expenses related to intangibles and capitalized development costs of $177,376 and $130,145 for the three months ended September 30, 2022 and 2021, respectively.
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