Scientific Games Chief Executive Officer Barry Cottle had plenty of hopes for 2021 — new games, new genres and new opportunities. And he found positives in coronavirus-ravaged 2020 — positive cash flow.
The fourth quarter was a mixed bag, though. The Las Vegas-based instant-win lottery ticket maker posted a wider loss and a loss per share that missed Wall Street forecasts. Revenue fell from a year earlier, but beat forecasts.
Scientific Games shares whipsawed Monday, surging $3.83, or 8.18% to close at $50.66 in regular trading on the Nasdaq, then falling $1.66, or 3.28 percent, in after-hours trading to reach $49 at 6 p.m. PDT.
In a statement Monday, Las Vegas-based Scientific Games reported a net loss of $84 million, or 95 cents per share, for the three months ended Dec. 31, compared with a net loss of $37 million, or 46 cents per diluted share, a year earlier.
Analysts polled by Seeking Alpha had, on average, forecast a net loss of 44 cents per share.
Adjusted earnings before interest, taxes, depreciation and amortization, a cash flow measure that excludes one-time costs, fell 37.1% to $244 million from $388 million. Scientific Games said a $15 million gaming-segment charge related to receivables credit allowances hurt the result.
Revenue fell 11.7% to $762 million from $863 million to beat the $713.4 million average forecast of Seeking Alpha-polled analysts.
The company said COVID-19 restrictions hurt its gaming business, dropping the segment’s revenue 35.7% to $286 million from $445 million and dampening overall revenue.
However, revenue in Scientific Games’ lottery (up 10% to $256 million, boosted by international product sales) and digital (up 1% to $73 million) divisions both rose.
“While 2020 certainly had unforeseen challenges, I couldn’t be more proud of our team for successfully navigating through them,” Cottle said in a statement. “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.”
Chief Financial Officer Michael Eklund said the company will keep focusing on managing its costs and balance sheet.
“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,” he said.
Heading into the earnings news, Scientific Games signed a cross-licensing agreement for patents related to cashless slot technologies with International Game Technology. Financial terms weren’t disclosed.
For the full year, Scientific Games had a net loss of $548 million, or $6.02 per share, compared with a loss of $118 million, or $1.40 per share, a year earlier. Higher restructuring and goodwill impairment charges hurt results. Full-year EBTIDA fell 47% to $800 million from $1.3 billion.
Full-year revenue fell 20.6% to $2.7 billion from $3.4 billion.
Follow Matthew Crowley on Twitter @copyjockey
