Scientific Games Corp. reported a $155 million net loss for the first quarter of 2020, due to the shutdown of the industry in mid-March because of the Covid-19 pandemic.
In a statement announcing the earnings, company officials announced a plan to maintain liquidity during the ongoing crisis through extensive cost-cutting measures.
The company reported first-quarter revenue of $725 million, down 13 percent from the $837 million reported in the first quarter of 2019. The statement note that Q1 of FY19 logged “significant” equipment sales. Because of the shutdown, the reduced sales yielded the net loss of $155 million, compared to $24 million in net income the prior year.
The net loss “includes a $54 million goodwill impairment charge related to our legacy U.K. gaming reporting unit and a negative impact of $37 million related to gaming business segment receivable credit allowances and inventory write-down charges, all driven by Covid-19 disruptions,” according to the statement.
Consolidated adjusted EBITDA for the quarter was $200 million, down 39 percent from last year’s $328 million. Net cash from operations was $120 million, versus $167 million a year ago.
The statement predicted improvement in the second quarter on quarterly cash flows, thanks to a program of cost-saving measures implemented because of the Covid-19 disruptions. Consolidated net cash flow for the second quarter is estimated at $70 million to $90 million, on the assumption that the pandemic will have passed its peak. Liquidity at present is $967 million, the statement said.
“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,” Scientific Games CEO Barry Cottle said in the statement. “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 made swift and meaningful reductions to our cost structure in response to the current environment,” added Michael Quartieri, SG’s chief financial officer. “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.”
