Scientific Games reports better than expected second quarter 2020 results
- Continued strong liquidity position of $943 million increased by recent notes offering
- Exceeded cash flow expectations through effective cost containment
- Resiliency and diversity of business provides strength & competitive advantage
LAS VEGAS, July 23, 2020 /PRNewswire/ – Scientific Games Corporation (NASDAQ: SGMS) ("Scientific Games," "SGC" or the "Company") today reported results for the second quarter ended June 30, 2020. The Company's second quarter results were adversely impacted by the COVID-19 disruptions during the quarter, affecting comparability to the prior year period.
Second Quarter 2020 Financial Highlights:
- Second quarter revenue was $539 million. The Company's Gaming and Lottery revenue was negatively impacted by the COVID-19 disruptions that resulted in temporary closures of casino operations globally and a lower level of lottery ticket sales. Our SciPlay and Digital businesses grew in the quarter, showcasing the power of our diverse portfolio.
- Net loss was $198 million compared to $75 million in the prior year period, due to lower revenue and the effects of COVID-19.
- Consolidated AEBITDA a non-GAAP financial measure defined below, was $121 million largely driven by COVID-19 disruptions, which affect prior year comparability. In addition, the results were impacted by a $33 million Gaming segment charge related to receivables credit allowances and charges for inventory valuation. Digital and SciPlay saw nearly 70 and 80 percent AEBITDA growth, respectively, driven by new launches and the continued "stay at home" environment.
- Net cash provided by operating activities was $52 million compared to $95 million in the year ago period.
- Second quarter consolidated net cash outflow, a non-GAAP financial measure defined below, was $16 million, which was better than prior expectations of approximately $70 million - $90 million. The upside relative to our prior expectations was driven by better than expected collections and better business performance in certain segments.
- Available liquidity, including SciPlay, at quarter-end was $943 million. In July, as a result of successfully completing a private offering of our 2025 Notes (as defined below) and the redemption of the outstanding 2021 Notes (as defined below), total liquidity increased by approximately $200 million subsequent to quarter-end.
Barry Cottle, President and Chief Executive Officer of Scientific Games, said, "I am very proud of how we are navigating the current environment, as evidenced by our strong cost containment and cash management, which allowed us to deliver better than expected cash flow for the quarter. This is a testament to our team's ability to effectively manage our business in the short term and maintain our strong customer relationships so we are set up for success as the economy begins to reopen. The diversity of our businesses and our position on the forefront of digital gaming were critical to allow us to successfully navigate the worst of this environment. We have the right team coupled with the best products across both land-based and mobile gaming to position us for future growth."
"Streamlining our cost structure and focusing on operating efficiencies to drive free cash flow generation and de-lever our balance sheet is our top priority, said, Michael Eklund, Executive Vice President, Chief Financial Officer. While I have only been here a short time I see tremendous opportunity in all facets of our business to drive future growth and free cash flows that will benefit our team members and stakeholders. We are very pleased with how we have navigated the challenging current environment in the second quarter and are confident we have ample liquidity and the right road map to emerge from this crisis as a stronger and more efficient company."
About Scientific Games
Scientific Games Corporation (NASDAQ: SGMS) is the world leader in offering customers a fully integrated portfolio of technology platforms, robust systems, engaging content and services. The Company is the global leader in technology-based gaming systems, digital real-money gaming and sports betting platforms, table games, table products and instant games, and a leader in products, services and content for gaming, lottery and social gaming markets. Scientific Games delivers what customers and players value most: trusted security, creative entertaining content, operating efficiencies and innovative technology. For more information, please visit www.scientificgames.com, which is updated regularly with financial and other information about the Company. You can access our filings with the SEC through the SEC website at www.sec.gov or through our website, and we strongly encourage you to do so. We routinely post information that may be important to investors on our website at www.scientificgames.com/investors/, and we use our website as a means of disclosing material information to the public in a broad, non-exclusionary manner for purposes of the SEC's Regulation Fair Disclosure (Reg FD).
Director, Corporate Communications
Senior Vice President, Investor Relations
In this press release, Scientific Games makes "forward-looking statements" within the meaning of the U.S. Private Securities Litigation Reform Act of 1995. Forward-looking statements can be identified by words such as "will," "may," and "should." These statements are based upon management's current expectations, assumptions and estimates and are not guarantees of timing, future results or performance. Therefore, you should not rely on any of these forward-looking statements as predictions of future events. Actual results may differ materially from those contemplated in these statements due to a variety of risks, uncertainties and other factors, including those factors described in our filings with the Securities and Exchange Commission (the “SEC”), including Scientific Games’ current reports on Form 8-K, quarterly reports on Form 10-Q and its latest annual report on Form 10-K filed with the SEC on February 18, 2020 (including under the headings "Forward-Looking Statements" and "Risk Factors"). Forward-looking statements speak only as of the date they are made and, except for Scientific Games' ongoing obligations under the U.S. federal securities laws, Scientific Games undertakes no obligation to publicly update any forward-looking statements whether as a result of new information, future events or otherwise.
Source: Scientific Games Corporation