Scientific Games remains adamant that it emerges “stronger than before” from the current health crisis, with a diverse product range that includes sports, digital and lottery, positioning the company “uniquely” to emerge stronger and excel in the future.
Despite the perseverance of lottery and the strength of igaming, both said to be “significantly up” in the current environment, U.S. media outlets quote the firm as asserting an expectation that revenue levels will be its lowest of the year for the second quarter of 2020.
Publishing its current financial report for the first quarter of 2020 , the company reports that it has taken important steps to boost quarterly cash flows by more than $15 m, maintain nearly $1bn in liquidity, and position itself to take advantage of opportunities to grow the business as the industry continues to recover.
Scientific Games president and CEO Barry Cottle explained: “We are working around the clock to take care of our employees, customers, shareholders and other key stakeholders in these difficult times, while providing uninterrupted products and services to those customers who continue to operate.
“I am confident that the measures we are implementing now will allow us to take advantage of opportunities to strengthen our business and prepare us to come out of the crisis even stronger than before. We have a diverse portfolio of assets, products and services, and our previous investments in digital gaming technologies uniquely position us to navigate and ultimately excel, as we emerge from this challenging environment.”
Revenue during Q1 declined 13 percent to $725 million, down from $837 million, adversely affected by the COVID-19 disturbances that culminated in temporary closures of casino operations in jurisdictions worldwide, with lottery revenue lower as the previous year included substantial sales of equipment.
Net loss finished at $155 m versus $24 m, driven by a $54 m goodwill impairment fee linked to the legacy UK gaming reporting unit and a $37 m negative impact on credit limits, both caused by health crises. Consolidated adjusted EBITDA dropped from $328 m year-on-year 39 per cent to $200 m.
Media outlets also report that the firm expects cash outflow of $70 m to $90 m in Q2, equivalent to about $1 m per day, with a return to positive cash flow expected to return by the end of the year.
Scientific Games Chief Financial Officer Michael Quartieri added: “We have made swift and meaningful reductions to our cost structure in response to the current environment. We believe these changes in conjunction with our available liquidity provide us the tools to withstand the impact from COVID-19. I’m confident that our streamlined cost structure will allow for accelerated cash flow generation and deleveraging in the future.”