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Scientific Games (SGMS) Misses Q4 EPS, Revenues Miss

February 18, 2020 4:04 PM EST

Scientific Games (NASDAQ: SGMS) reported Q4 EPS of ($0.46), which may not compare to the analyst estimate of $0.22. Revenue for the quarter came in at $863 million versus the consensus estimate of $895.28 million.

Fourth quarter 2019 Financial Highlights:

  • Fourth quarter revenue was $863 million compared to $886 million in the prior year period. This was largely driven by lower Gaming revenue primarily due to fewer systems launches in Canada compared to last year and lower machine unit sales.
  • Net loss was $37 million compared to net income of $207 million in the prior year period. This quarter included a $40 million loss on a debt financing transaction related to the notes offering and a $12 million loss on remeasurement of Euro denominated debt. The prior year included a $183 million reversal of a reserve related to resolving the Shuffle Tech legal matter and a $14 million gain on remeasurement of Euro denominated debt.
  • Consolidated Adjusted EBITDA (\"Consolidated AEBITDA\"), a non-GAAP financial measure defined below, was $328 million compared to $343 million in the prior year period driven by lower Lottery and Gaming AEBITDA, which was partially offset by Digital AEBITDA of $21 million, representing a 75% increase.
  • Net cash provided by operating activities increased by $153 million from the prior year period to $143 million. The prior year included a $152 million payment to resolve the Shuffle Tech legal matter.
  • Free cash flow, a non-GAAP financial measure, increased $286 million to $56 million versus the prior year period, which included a $104 million payment for our instant ticket concession in Italy and resolution of the Shuffle Tech legal matter.
  • The company remains committed to deleveraging its balance sheet targeting to be at 6.0x or below by the end of 2020, 5.5x in 2021 and continuing to reduce beyond those levels into the future.

Barry Cottle, CEO and President of Scientific Games, said, "This past year, we made great strides in developing the best games, attracting industry leading talent, and improving our capital structure. I\'m confident we have the right team in place to reach our goal to be the market leader across land-based gaming, lottery, sports and digital gaming driven by leading content and the platforms that enable play anywhere and anytime. Our recent contract and deal wins across our businesses, and the globe, highlight that we are on the right path."

Michael Quartieri, Chief Financial Officer of Scientific Games, added, "We reduced our net debt by over $460 million in 2019, while successfully completing two refinancing transactions that will significantly reduce our cash interest costs going forward and extended our maturities. Our overarching commitment remains delevering through organic growth, new market opportunities, and driving further enhancements to our free cash flow."

For earnings history and earnings-related data on Scientific Games (SGMS) click here.



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