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Third Quarter 2012 Earnings Call
Robert Saucier, CEO
Gary Vecchiarelli, CFO
Financial Results
Quarterly Revenues
$2,000                                                                                  1,874
                                                                              1,790
                                                                    1,646
$1,600
                                                          1,421

$1,200

          754    736    806    783    781   749    734
 $800

 $400

   $0


          Q1     Q2     Q3     Q4     Q1     Q2     Q3        Q4        Q1        Q2        Q3
         2010   2010   2010   2010   2011   2011   2011      2011      2012      2012      2012
Revenues vs. SG&A Expenses
                                     Revenues          SG&A
$2,000                                                                                    1,874
                                                                                  1,790
                                                                        1,646
$1,600
                                                              1,421
$1,200
          754    736    806    783      781     802     827                 1103      1033        995
 $800
                              748                                 846
          686                           723      749    734
 $400            602    606

   $0


          Q1     Q2     Q3     Q4       Q1       Q2      Q3       Q4        Q1        Q2      Q3
         2010   2010   2010   2010     2011     2011    2011     2011      2012      2012    2012
Quarterly EBITDA (Non-GAAP)
$1,000

                                                                                          $777
 $750
                                                                                 $632

                                                                  $476
 $500
                                                                            $460

 $250
                 $56

   $0
                                                  ($147)
         ($71)                           ($35)
                         ($76)   ($69)
                                                              ($192)
($250)
          Q1      Q2      Q3      Q4      Q1      Q2        Q3      Q4     Q1       Q2      Q3
         2010    2010    2010    2010    2011    2011      2011    2011   2012     2012    2012
Quarterly Net Profit (Loss)
$250


$150
                                                                                              $129

                            $44                                                        $62
  $50
                $21
                                                                             ($10)
 ($50)
                                                  ($66)

         ($100)                   ($101)
($150)
                                                                                     ($171)
                                                  ($176)
                                                                   ($221)
($250)
          Q1       Q2     Q3       Q4       Q1        Q2     Q3        Q4        Q1       Q2      Q3
         2010     2010   2010     2010     2011      2011   2011      2011      2012     2012    2012
YTD (9 Months) – 2011 vs 2012
$5,500
                   5,309            5,232
$4,500


$3,500

         2,264           2,202
$2,500
                                             1,897

$1,500


 $500
                                        (374)        (463) 20

($500)
         Gross Revenue   Gross Profit       EBITDA   Net Profit/(Loss)
Performance Metrics
                                                                              Q3 - 2011                    Q3 - 2012
                                                                                      Average                       Average
                                                                                                   Units in
                                                                   Units in Service   Quarterly                    Quarterly
                                                                                                   Service
                                                                                      Revenue                      Revenue
           Proprietary Table Games
                     Premium Games                                           313           $837        489           $1,313
                     Side Bets                                             1,764           $218      2,774            $386
                                                       Sub-Total           2,077           $311      3,263            $525

           Enhanced Table Systems
                     Bonus Jackpot System                                    123           $592         94            $725
                     MEGA-Share                                                -               -          7           $485
                                                       Sub-Total             123           $592        101            $708

           e-Tables (Seats)                                                   30          $1,810        55           $1,298
                                                           TOTAL           2,230           $347      3,419            $543

 *impact of ETS Growth is for illustration purposes only
Composition of Revenue – Growth vs Legacy
                      Galaxy Growth
                       $234k / 13%
                       (increase of 33%)
                                             Acquired PTG
                                             $679k / 36%
  PTG Growth
  $224k / 12%
  (increase of 33%)




               Legacy Galaxy
                $720k / 39%                Note: Based on Q3 2012
                                           Recurring Revenues of $1,857k
21+3 Placements (U.S.)
1,250
                                                                                         1,157


1,000
                                   Q3                                    964
                                   858
                             Q2
                             747
                                                                     771
 750
                       Q1
                       632

                                                         571
 500

                                              408
        272      288
 250
              Oct-11                     YE 2012    YE 2013    YE 2014         YE 2015      YE 2016
Forecasted Revenues & Cash Flow vs Debt Obligation (in millions)
        NET CASH FLOW - PTG PRODUCT REVENUES - DEBT OBLIGATION

$20


$16


$12

                                                           •    Balance is below $20m
 $8                                                        •    Structure is non-toxic
                                                           •    Options to pay in GBP
                                                           •    Can change minimum
 $4                                                             payment if cash flow
                                                                decreases
 $0
      2012   2013    2014   2015   2016   2017    2018   2019        2020     2021
Global Gaming Expo 2012 (The Gaming Industry’s International Showcase)
Global Gaming Expo 2012 (The Gaming Industry’s International Showcase)
Short-Term Growth Prospects


                 Anticipated                              Approximate
                   Event                                 Annual Revenue
• Return of two major clients (12 casinos total) . . . . . . $500,000

• Approval in additional gaming jurisdiction . . . . . . . . . $500,000

• Inter-Casino Jackpot System installations . . . . . . . . . . $200,000
Mid-Term Growth Prospects


 Potential Event

• Expanded placement of Table Game Content

• Concentration on Bonus Jackpot System Installations / Conversions

• New TableMAX Release / Installations

• Targeted Acquisitions
Litigation Update
  Sherron Associates (GLXZ defending)
   • Lawsuit filed in 2008 with potential claims approaching $2M
   • Case settled in October 2011 for $525K (GLXZ - $150K / our CEO - $375K)
   • All obligations completed on or about November 5, 2012
  Reel Games (GLXZ defending)
   • Lawsuit filed November 2011
   • Lawsuit dismissed with prejudice in November 2012
   • No compensation paid to plaintiffs
  UNAX Gaming (UNAX defending)
   • Lawsuit filed March 2012 claiming patent infringement
   • Case settled in May 2012
   • We obtained the UNAX’s table game business and approximately $45K in cash.

  Bank of America (BofA / GLXZ Cross-Suit)
   • Lawsuit filed in October 2012 claiming fraudulent transfer.
   • Counter-suit filed claiming (1) Abuse of Process; (2) Slander of Business; (3) Detrimental Promissory Reliance
Q&A

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Galaxy Gaming (GLXZ) 2012 Q3 Financial Review

  • 1. Third Quarter 2012 Earnings Call Robert Saucier, CEO Gary Vecchiarelli, CFO
  • 3. Quarterly Revenues $2,000 1,874 1,790 1,646 $1,600 1,421 $1,200 754 736 806 783 781 749 734 $800 $400 $0 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 2010 2010 2010 2010 2011 2011 2011 2011 2012 2012 2012
  • 4. Revenues vs. SG&A Expenses Revenues SG&A $2,000 1,874 1,790 1,646 $1,600 1,421 $1,200 754 736 806 783 781 802 827 1103 1033 995 $800 748 846 686 723 749 734 $400 602 606 $0 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 2010 2010 2010 2010 2011 2011 2011 2011 2012 2012 2012
  • 5. Quarterly EBITDA (Non-GAAP) $1,000 $777 $750 $632 $476 $500 $460 $250 $56 $0 ($147) ($71) ($35) ($76) ($69) ($192) ($250) Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 2010 2010 2010 2010 2011 2011 2011 2011 2012 2012 2012
  • 6. Quarterly Net Profit (Loss) $250 $150 $129 $44 $62 $50 $21 ($10) ($50) ($66) ($100) ($101) ($150) ($171) ($176) ($221) ($250) Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 2010 2010 2010 2010 2011 2011 2011 2011 2012 2012 2012
  • 7. YTD (9 Months) – 2011 vs 2012 $5,500 5,309 5,232 $4,500 $3,500 2,264 2,202 $2,500 1,897 $1,500 $500 (374) (463) 20 ($500) Gross Revenue Gross Profit EBITDA Net Profit/(Loss)
  • 8. Performance Metrics Q3 - 2011 Q3 - 2012 Average Average Units in Units in Service Quarterly Quarterly Service Revenue Revenue Proprietary Table Games Premium Games 313 $837 489 $1,313 Side Bets 1,764 $218 2,774 $386 Sub-Total 2,077 $311 3,263 $525 Enhanced Table Systems Bonus Jackpot System 123 $592 94 $725 MEGA-Share - - 7 $485 Sub-Total 123 $592 101 $708 e-Tables (Seats) 30 $1,810 55 $1,298 TOTAL 2,230 $347 3,419 $543 *impact of ETS Growth is for illustration purposes only
  • 9. Composition of Revenue – Growth vs Legacy Galaxy Growth $234k / 13% (increase of 33%) Acquired PTG $679k / 36% PTG Growth $224k / 12% (increase of 33%) Legacy Galaxy $720k / 39% Note: Based on Q3 2012 Recurring Revenues of $1,857k
  • 10. 21+3 Placements (U.S.) 1,250 1,157 1,000 Q3 964 858 Q2 747 771 750 Q1 632 571 500 408 272 288 250 Oct-11 YE 2012 YE 2013 YE 2014 YE 2015 YE 2016
  • 11. Forecasted Revenues & Cash Flow vs Debt Obligation (in millions) NET CASH FLOW - PTG PRODUCT REVENUES - DEBT OBLIGATION $20 $16 $12 • Balance is below $20m $8 • Structure is non-toxic • Options to pay in GBP • Can change minimum $4 payment if cash flow decreases $0 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021
  • 12. Global Gaming Expo 2012 (The Gaming Industry’s International Showcase)
  • 13. Global Gaming Expo 2012 (The Gaming Industry’s International Showcase)
  • 14. Short-Term Growth Prospects Anticipated Approximate Event Annual Revenue • Return of two major clients (12 casinos total) . . . . . . $500,000 • Approval in additional gaming jurisdiction . . . . . . . . . $500,000 • Inter-Casino Jackpot System installations . . . . . . . . . . $200,000
  • 15. Mid-Term Growth Prospects Potential Event • Expanded placement of Table Game Content • Concentration on Bonus Jackpot System Installations / Conversions • New TableMAX Release / Installations • Targeted Acquisitions
  • 16. Litigation Update Sherron Associates (GLXZ defending) • Lawsuit filed in 2008 with potential claims approaching $2M • Case settled in October 2011 for $525K (GLXZ - $150K / our CEO - $375K) • All obligations completed on or about November 5, 2012 Reel Games (GLXZ defending) • Lawsuit filed November 2011 • Lawsuit dismissed with prejudice in November 2012 • No compensation paid to plaintiffs UNAX Gaming (UNAX defending) • Lawsuit filed March 2012 claiming patent infringement • Case settled in May 2012 • We obtained the UNAX’s table game business and approximately $45K in cash. Bank of America (BofA / GLXZ Cross-Suit) • Lawsuit filed in October 2012 claiming fraudulent transfer. • Counter-suit filed claiming (1) Abuse of Process; (2) Slander of Business; (3) Detrimental Promissory Reliance
  • 17. Q&A