Scientific Games cuts Q2 costs by more than $100m
Supplier states at least 50% of second quarter cost savings will come from reductions to workforce and pay
Scientific Games has reduced its quarterly costs by more than $100m and bolstered its cash liquidity status to mitigate the impact of the coronavirus outbreak.
The $100m Q2 cost savings will be achieved through operational and capital cost-saving procedures, according to the Las Vegas-headquartered supplier.
More than half of this $100m is expected to come from workforce cost reductions, which include hour and pay reductions, furloughs and reduction in the workforce as a whole.
In March, Scientific Games chief executive Barry Cottle surrendered 100% of his salary as working hours were reduced and staff were furloughed.
Scientific Games noted that its capital expenditures in Q2 are set to be approximately $50m lower than previously planned in light of the Covid-19 pandemic.
For 2020, the firm expects that capital expenditures will be in the range of $210m to $240m compared to original estimates of $300m to $330m.
In terms of cash liquidity, the Nasdaq-listed supplier has drawn around $480m under its Revolving Credit Facilities to provide it with maximum flexibility.
This $480m, coupled with around $200m cash, will allow the company to “take advantage of opportunities to strengthen the business as the industry begins to recover”, the firm noted.
Scientific Games CEO Cottle said: “We continue to reduce our costs so 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, egaming, 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,” he added.