US – Scientific Games highlights ‘strong liquidity position’ following $100m quarterly cost savingsBy Phil - 16 April 2020
Scientific Games has said it has a ‘strong liquidity position’ having already cut more than $100m in quarterly costs.
The company has drawn approximately $480m under its Revolving Credit Facilities to give it maximum flexibility during these difficult times. The company believes that the proceeds from these borrowings, when combined with cash on hand (which was approximately $200m as of March 31, 2020), allow it to take advantage of opportunities to strengthen the business as the industry begins to recover. SciPlay, in which the Company has an 82 per cent interest, also has a strong liquidity position with cash on hand of approximately $130m as of March 31, 2020, no outstanding debt and $150m available under its Revolving Credit Facility.
The Company 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 $100m. 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 $50m in cost savings in Q2, while capital expenditures in Q2 are expected to be approximately $50m lower than previously planned. For 2020 as a whole, the Company now anticipates that capital expenditures will be in the range of $210-240 million, as compared to the $300 to 330m estimate set forth in the release accompanying our 2019 10-K. The Company plans additional cost saving initiatives, including reductions in other operating expenses, that will lead to further potential savings.
Scientific Games CEO Barry Cottle 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. 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.”