Scientific Games on track to reduce Q2 costs by more than $100m15th April 2020 9:31 am GMT
New York-listed lottery and gaming supplier Scientific Games said Tuesday that it will reduce its quarterly costs by more than $100m in the second quarter of 2020, including more than $50m in workforce cost reductions.
Scientific Games said that it has a strong liquidity position, having drawn approximately $480m under its revolving credit facilities to give it maximum flexibility during this period of uncertainty.
It said that these borrowings, combined with cash on hand of approximately $200m at the end of the first quarter, allow it to take advantage of opportunities to strengthen the business as the industry begins to recover from the downturn caused by the COVID-19 pandemic.
Alongside the $50m reduction in workforce costs, capital expenditure will also be scaled back during the second quarter of the year to deliver an additional $50m in savings, with capital expenditure for the full year now estimated to be in the range of $210-$240m versus the previously communicated range of $300-$330m.
Scientific Games’ social gaming business SciPlay, in which the company holds an 82 per cent interest, also has a strong liquidity position with cash on hand of approximately $130m as of March 31, 2020, with no outstanding debt and $150m available under its revolving credit facility.
“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 Barry Cottle, chief executive officer at Scientific Games.
“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.”
Shares in Scientific Games Corp. (NSQ:SGMS) closed up 11.16 per cent at $10.06 per share in New York Tuesday.