Scientific Games Corp. issued a statement last week aimed at assuring investors that its strong liquidity position will enable it to survive the coronavirus shutdown.
The company announced it has already cut more than $100 million in quarterly costs. The supplier also has drawn approximately $480 million under its revolving credit facilities to give it maximum flexibility during the crisis.
“The company believes that the proceeds from these borrowings, when combined with cash on hand (which was approximately $200 million as of March 31, 2020), allow it to take advantage of opportunities to strengthen the business as the industry begins to recover,” the statement said. SciPlay, in which the company has an 82 percent interest, also has a strong liquidity position with cash on hand of approximately $130 million as of March 31, 2020, no outstanding debt and $150 million available under its revolving credit facility.”
The company said it anticipates that the operational and capital cost-saving measures it has already implemented, together with additional measures now being implemented, will reduce its quarterly costs in Q2 by over $100 million. The workforce cost reductions implemented by the company, including hour and pay reductions, furloughs and reductions in force, are expected to result in more than $50 million in cost savings in Q2, while capital expenditures in Q2 are expected to be approximately $50 million lower than previously planned.
For 2020 as a whole, the company now anticipates that capital expenditures will be in the range of $210 million to $240 million, as compared to the $300 million-$330 million estimate set forth in the release accompanying the company’s 2019 10-K. SG plans additional cost-saving initiatives, including reductions in other operating expenses, that will lead to further potential savings, the statement said.
“We continue to reduce our costs so that that we can position our company to be an even stronger competitor as the industry begins to recover,” said Scientific Games CEO Barry Cottle. “We remain committed to providing our best-in-class products and services to our customers across lottery, iGaming, sports betting and land-based casinos while innovating for the future.
“The diversity of our business, serving customers across the industry and around the globe, gives us unique strength in these challenging times.”
