Scientific Games Reports Fourth Quarter and Full Year 2020 Results

in Finance

Sequential improvement in consolidated results, record full year revenue at SciPlay, Lottery and Digital

Strong execution across diverse portfolio, continued to make operational progress against strategy

Disciplined cost and balance sheet management

Generated $159 million of operating cash flow and $72 million of free cash flow

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LAS VEGASMarch 1, 2021 /PRNewswire/ -- Scientific Games Corporation (NASDAQ: SGMS) ("Scientific Games", "SGC" or the "Company") today reported results for the fourth quarter and full year ended December 31, 2020.

Barry CottleCEO and President of Scientific Games, said, "While 2020 certainly had unforeseen challenges, I couldn't be more proud of our team for successfully navigating through them. The strong execution coupled with the diversity of our business enabled positive cash flow. As we start off the year, I am truly excited about the team, products, and game franchises that should enable share gains, deal wins, and opportunities to enter new genres. The executive team and our Board are working purposefully to transform our Company, capitalize on the evolving industry trends and deliver outsized returns to our Shareholders."

Michael EklundChief Financial Officer of Scientific Games, added, "We continued to execute, having driven cash flow improvements in the fourth quarter despite a number of COVID-19 related restrictions to our land-based business. The focus remains on disciplined cost and balance sheet management. I'm confident in the opportunities for operational and business process improvements that will drive increased cash flow conversion and deleveraging, leading to increased stakeholder value."

Fourth quarter 2020 Financial Highlights:

  • Fourth quarter consolidated revenue was $762 million compared to $863 million in the prior year period. Total Company revenues improved sequentially benefiting from improvements in Gaming. Year-over year results declined as our Gaming business was impacted by COVID-19 restrictions for casinos globally while our Lottery, SciPlay and Digital businesses delivered growth.
  • Net loss was $84 million compared to a net loss of $37 million in the prior year period due to lower revenue partially offset by lower interest expense reflecting the favorable impact of 2019 refinancing activities.
  • Consolidated Adjusted EBITDA ("Consolidated AEBITDA"), a non-GAAP financial measure defined below, was $244 million which improved sequentially, principally driven by Gaming improvements. The results compared to $328 million in the prior year, with the decline due to lower Gaming revenue as a result of COVID-19 disruptions. In addition, the results were impacted by a $15 million Gaming segment charge related to receivables credit allowances.
  • Net cash provided by operating activities increased by $16 million from the prior year period to $159 million primarily due to improvements in working capital activities.
  • Free cash flow, a non-GAAP financial measure, increased $20 million to $72 million from the prior year period, benefiting from improvements in working capital and lower capex partially offset by lower revenue.

Full Year 2020 Financial Highlights:

  • Consolidated Revenue of $2.7 billion compared to $3.4 billion in the prior year as our Gaming business was impacted by COVID-19 disruptions, partially offset by 25% SciPlay revenue growth driven by improved player monetization, and Digital and Lottery growth.
  • Net loss was $548 million as compared to $118 million in the prior year. The performance was primarily due to lower revenue coupled with higher restructuring and goodwill impairment charges, partially offset by lower D&A and interest expense, reflecting the favorable impact of 2019 refinancing activities.
  • Consolidated AEBITDA, a non-GAAP financial measure defined below, was $800 million compared to $1,334 million in the prior year. The lower Consolidated AEBITDA was driven by lower revenue as a result of COVID-19 disruptions, partially offset by strong SciPlay and Digital growth of 55% and 40%, respectively.
  • Net cash provided by operating activities decreased $75 million to $471 million compared to the prior year primarily due to lower revenue, partially offset by improved working capital, lower interest payments and lower capex.
  • For the full year 2020, the Company generated Free cash flow, a non-GAAP financial measure, of $186 million. This was driven by disciplined cost management and improvements to working capital activities.

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