Inspired Entertainment has provided an update on the impact of COVID-19 on its global operations. The company has temporarily closed its physical locations following the governmental restrictions.
Due to this business disruption, the Company’s management and Board of Directors have implemented a range of actions to maintain financial flexibility and preserve liquidity.
“The exceptional team and capabilities we have built, as witnessed in our fourth quarter 2019 results, strongly position us to navigate this unprecedented environment. Alongside our concern for the well-being of our employees, our priority is to steadfastly strengthen our financial flexibility, prioritize investments, and reduce our expenditures in this time of uncertainty,” Lorne Weil, Executive Chairman of Inspired, said.
Since the middle of March, the Company has drawn down approximately $24.9 million on its revolving credit facility to provide additional near-term liquidity and cancelled or delayed material capital expenditures. Most recently, the Company implemented furloughs, reduced work hours and reductions in compensation, as well as additional measures across its entire workforce. The effect of these actions is expected to lower the Company’s future cash payroll expense to less than $2.0 million per month.
The Board has determined to indefinitely delay the payment of accrued executive bonuses for the year ended 31 December 2019 and to waive cash payments of Board retainers that were due to be disbursed during the second quarter of 2019.
“We have taken these decisive actions, which we believe are appropriate for our current level of business, as we prepare our Company to withstand a potentially prolonged period of impaired revenue, including the loss of much of our retail revenue. At this point, we have limited visibility as to when our customers’ land-based locations may reopen. We believe our actions are appropriate steps to preserve our liquidity given the current environment. That said, we continue to undertake aggressive efforts to reduce our operating expenses on an interim basis and expect to report further as these steps are implemented,” Weil said.
“We have been fortunate that each of our Virtual Sports and Gaming businesses have had a substantial and growing presence in online/interactive, providing us an important cushion against the current cessation in our land-based business. Our customers have reported to us that they are experiencing significant demand from consumers in the US, Europe and Australasia to bring Virtual Sports onto their respective systems as rapidly as possible, given the lack of live sports content for wagering. We are doing our best to accommodate such demand at this difficult time,” Weil added.
“We continue to monitor developments on a real-time basis and are focused on responding to the needs of both our customers and our employees. Our hearts go out to all who have been impacted by this global pandemic. We’re looking forward to resuming normal operations as soon as conditions permit, as we seek to build upon our positive momentum from the fourth quarter,” Weil concluded.