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cientific Games Corporation reported Thursday results for the second quarter ended June 30, 2020, which were adversely impacted by the COVID-19 disruptions during the quarter, affecting comparability to the prior-year period.
Second quarter revenue was $539 million, down from the $845 million reported in Q2 2019. 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. Its SciPlay and Digital businesses grew in the quarter.
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 was $121 million, down from $335 million in Q2 2019, 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 was $16 million, which was better than prior expectations of approximately $70 million – $90 million. The upside relative to the company’s 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 Scientific Games’ 2025 Notes and the redemption of the outstanding 2021 Notes, 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.”
Michael Eklund, Executive Vice President, Chief Financial Officer, commented: “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. 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.”
Q2 2020 Earnings Presentation
