Scientific Games Corporation has posted its Q1 results for the period ended March 31, 2019 showing a modest rise in revenue alongside a significant slowdown in losses. First quarter revenue rose 3% to $837m, up from $812m year-on-year, reflecting growth in the firm’s lottery and social businesses. Net loss was $24m against $202m year-on-year driven, according to SG, by higher operating income partly attributable to a $45m reduction in restructuring and other expenses.
Consolidated Adjusted EBITDA increased 3% to $328m from $320m year-on-year, while net cash provided by operating activities increased to $167m from $30m in the year ago period. Improved operating results, lower restructuring and other expenses and a $66m favorable change in accrued interest were cited as contributing factors.
Barry Cottle, President and Chief Executive Officer, said: “We are incredibly proud that we have continued to build on our momentum and are looking forward to the year ahead. We are focused on effectively operating our businesses, reducing costs and building upon the strong foundation for profitable growth that we see today.
“Last week, we successfully took SciPlay public as a new company, which accelerates our ability to pay down debt. All of these actions support our steadfast commitment to smartly grow our business, drive free cash flow and create meaningful value for our stakeholders.”
Michael Quartieri, Chief Financial Officer, noted: “This quarter, we paid down $145m in debt and completed a major refinancing that lowered our borrowing costs and extended our debt maturities. As a result of the SciPlay IPO, we expect to continue our deleveraging path and the efficient deployment of our resources to generate the returns needed to enhance our free cash flow.”
A breakdown of the firm’s core activities showed a slight increase in gaming operations revenue, while gaming machine sales (total new unit shipments in the US and Canada) increased to 4,801 compared to 4,667 in the prior year due to increased shipments for new openings and expansions, partly from Encore Boston Harbor. Revenue from gaming systems was flat from the prior year, said the company, reflecting fewer major site installations than the prior year, which was offset by strong maintenance revenue.
Lottery systems revenue, however, was $35m higher than the prior year primarily related to equipment hardware sales and new lottery contracts in Maryland and Kansas from the prior year period. Also in the ascendance was social gaming revenue which grew 22% from the prior year, which was twice the rate of market growth according to estimates from Eilers and Krejcik.
During the quarter ended March 31, 2019, the company made debt repayments of $145m, comprising $135m of voluntary repayments under its revolving credit facility and $10m in mandatory amortization of its term loans.
