Galaxy Gaming completes debt refinancing
Galaxy Gaming has refinanced existing indebtedness and said that its board has also authorised the repurchase of up to $1m (€821,200) worth of common stock.
This week, Galaxy signed a credit agreement with Nevada State Bank that grants the firm up to €12m in borrowing capacity, $11m of which is available via a five-year term loan and $1m in a revolving credit facility.
Simultaneously with the agreement, Galaxy entered into an interest rate swap transaction with an affiliate of Nevada State Bank, which fixes interest on the term loan at 6.43% for three years.
Galaxy has used the term loan, together with cash on hand, to repay its existing indebtedness.
Harry Hagerty, chief financial officer at Galaxy, said: “This transaction reduces the interest rate on our borrowings from 12.5% to 6.8%.
“Our new rate is much more in line with what a company with our leverage and cash flow characteristics should be paying.”
Meanwhile, the Galaxy board of directors has authorised the company to proceed with the repurchase of common stock for a maximum of $1m.
Galaxy said such repurchases can be made based on market conditions and be completed in the open market or in privately-negotiated transactions.
The company added that it will only go ahead with repurchases if it remains in line with terms of the credit agreement, with some transactions subject to regulatory approval
Mark Lipparelli, chairman of the Galaxy board, said: “While our primary focus is growth, we recognise that there may be opportunities to buy back shares at attractive prices.”
Earlier this month, Galaxy revealed year-on-year losses across a number of key financials for 2017.
Adjusted earnings before interest, tax, depreciation and amortisation fell by 3% year-on-year to $5.1m, while pre-tax income dropped 78% to $553,000 and net income from a positive of $1.8m to a loss of $11,000.
Related article: Galaxy Gaming hit by losses in 2017