View printer-friendly versionLAS VEGAS, Aug 01, 2005 (BUSINESS WIRE) -- Wynn Resorts, Limited (Nasdaq: WYNN) today reported financial results for the second quarter ended June 30, 2005. Second quarter results include Wynn Las Vegas' first 64 days of operations.
Adjusted earnings (excluding $43.4 million in pre-opening expenses for Wynn Las Vegas, Wynn Macau, and Encore) were $8.2 million, or $0.08 per diluted share (Adjusted EPS) (1). On a US GAAP (Generally Accepted Accounting Principles) basis, net loss was $35.2 million, or a net loss of $0.36 per diluted share.
Wynn Las Vegas
On June 2, 2005, Wynn Resorts reported operating results for Wynn Las Vegas' first 34 days of operations. The property continued to perform strongly throughout June. For the first 64 days of operations, Wynn Las Vegas generated Net Revenues of $201.1 million.
Net gaming revenues for the period were $98.7 million. The slot segment produced net revenues of $34.2 million, with win per unit per day of $273. The table games segment generated net revenues of $62.0 million, representing win per table per day of $7,117 for the period. Table games win percentage was 21.1% (before discounts), which is within the property's expected range of 18 to 22%.
Since opening on April 28, 2005, Wynn Las Vegas' average daily rate (ADR) per room was $284 and occupancy of available guestrooms was 90.1%, generating revenue per available room (REVPAR) of $255 for the period. Gross non-gaming revenues for the period were $127.3 million and net non-gaming revenues were $102.4 million. The food and beverage, retail and entertainment operations generated gross revenues of $48.1 million, $16.9 million and $9.6 respectively.
Wynn Las Vegas generated adjusted EBITDA (2) of $58.7 million during the quarter, representing a 29.2% margin on net revenues. The adjusted EBITDA margin reflects high staffing levels and other costs related to the opening of Wynn Las Vegas. Wynn Las Vegas' pre-opening costs during the quarter were $36.9 million, including expenses associated with hiring and training employees, marketing expenses, and various other costs incurred prior to the property's opening on April 28, 2005. The pre-opening costs associated with the opening of Wynn Las Vegas are included in the $2.7-$2.75 billion project budget.
Steve Wynn, Chairman and Chief Executive Officer of Wynn Resorts commented, "The initial response from customers and employees has been very gratifying. In our first two months of operations, we achieved outstanding revenue numbers in various departments including slots, tables and retail. We deliberately and substantially overstaffed in order to offset our expected initial disadvantages in productivity: we had more than 9,000 employees working with approximately 58 newly integrated operating systems. In the upcoming months, our main focus will be on raising margins through increased operational efficiencies."
Wynn Macau
The Company broke ground for Wynn Macau in June 2004 and expects to open to the public in September 2006. Construction of Wynn Macau is progressing on schedule and within budget. Detailed interior design work continues, with the majority of architectural and structural design work now complete. Superstructure works are well underway with the hotel tower reaching the 23rd floor level. As of June 30, 2005, the Company had funded approximately $205.7 million of project costs and estimates that approximately $498.3 million will be spent to complete Wynn Macau.
Plans are also underway for a $345.0 million expansion. The Company expects construction of the expansion to commence in the third quarter of 2005, with completion slated for the first half of 2007. An increase in Wynn Macau's credit facilities to fund the development and construction of the expansion is expected to close in the third quarter of 2005.
Other Factors Affecting Earnings
Interest expense net of $10.5 million in capitalized interest was $26.3 million for the second quarter of 2005. Depreciation and amortization expenses were $26.1 million and pre-opening expenses totaled $43.4 million during the quarter, of which $4.1 million were related to Wynn Macau. Corporate expense in the quarter was $5.0 million.
Balance Sheet and Capital Expenditures
Unrestricted cash balances at June 30, 2005 were $485.8 million, while restricted cash balances were $592.0 million. Total debt outstanding at the end of the quarter was $2.0 billion, of which $250 million is our Convertible Debentures. Capital expenditures during the second quarter of 2005 totaled $268.2 million.
Forward-looking Statements
This release contains forward-looking statements regarding operating trends and future results of operations. Such forward-looking information involves important risks and uncertainties that could significantly affect anticipated results in the future and, accordingly, such results may differ from those expressed in any forward-looking statements made by us. The risks and uncertainties include, but are not limited to, competition in the casino/hotel and resorts industry, the Company's brief operating history, the Company's dependence on existing management, levels of travel, leisure and casino spending, general domestic or international economic conditions, and changes in gaming laws or regulations. Additional information concerning potential factors that could affect the Company's financial results are included in the Company's Annual Report on Form 10-K for the year ended December 31, 2004 and the Company's other periodic reports filed with the Securities and Exchange Commission. The Company is under no obligation to (and expressly disclaims any such obligation to) update its forward-looking statements as a result of new information, future events or otherwise.
Non-GAAP financial measures
(1) Adjusted earnings (and Adjusted EPS) is presented exclusively as a supplemental disclosure because management believes that it is widely used to measure performance of, and a principal basis for valuation of gaming companies. This measure is considered by many to be a better indicator on which to base expectations of future results than income computed in accordance with generally accepted accounting principles ("GAAP"). Reconciliations of net loss and net loss per share to adjusted earnings and adjusted EPS per share are included in the financial schedules accompanying this release.
(2) Adjusted EBITDA is earnings before interest, taxes, depreciation, amortization, pre-opening and corporate expenses, losses on sales of assets, losses from incidental operations, and other non operating income and expenses. Management uses adjusted EBITDA as the primary measure of the operating performance of Wynn Las Vegas and Wynn Macau, and to compare the operating performance of its properties with those of its competitors.
This information should not be considered as an alternative to any measure of performance as promulgated under accounting principles generally accepted in the United States, such as operating income, net income, or net cash provided by operating activities.
Wynn Resorts, Limited's calculation of adjusted earnings, adjusted EPS and adjusted EBITDA may be different from the calculation methods used by other companies and, therefore, comparability may be limited. The company has included schedules in the tables that accompany this release that: (1) reconcile EBITDA to operating income and net income; and (2) reconcile net income to adjusted net income.
WYNN RESORTS, LIMITED AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except share and per share data)
(Unaudited)
Three Months Ended Six Months Ended
June 30, June 30,
------------------- -------------------
2005 2004 2005 2004
--------- --------- --------- ---------
Operating revenues:
Casino $ 98,715 $ - $ 98,715 $ -
Rooms 44,632 - 44,632 -
Food and beverage 48,056 - 48,056 -
Entertainment, retail and
other 34,651 59 34,659 194
--------- --------- --------- ---------
Gross revenues 226,054 59 226,062 194
Less promotional allowances (24,934) - (24,934) -
--------- --------- --------- ---------
Net revenues 201,120 59 201,128 194
Operating costs and expenses:
Casino 42,280 - 42,280 -
Rooms 11,780 - 11,780 -
Food and beverage 33,706 - 33,706 -
Entertainment, retail and
other 20,262 143 20,266 368
General and administrative 31,010 - 31,014 -
Provision for doubtful
accounts 8,599 - 8,599 -
Pre-opening costs 43,365 16,466 81,469 31,016
Depreciation and
amortization 26,125 1,042 29,619 1,824
Loss on sale of assets 16 520 5 512
Loss from incidental
operations 32 - 105 -
--------- --------- --------- ---------
Total operating costs
and expenses 217,175 18,171 258,843 33,720
Equity in income from
unconsolidated affiliates 251 - 251 -
--------- --------- --------- ---------
Operating loss (15,804) (18,112) (57,464) (33,526)
--------- --------- --------- ---------
Other income/(expense):
Interest income 6,983 1,511 13,165 3,130
Interest expense, net (26,341) (94) (28,490) (197)
Loss on early
extinguishment of debt - (25,628) - (25,628)
--------- --------- --------- ---------
Other income
(expense), net (19,358) (24,211) (15,325) (22,695)
--------- --------- --------- ---------
Minority interest - 404 - 1,054
--------- --------- --------- ---------
Net loss (35,162) (41,919) (72,789) (55,167)
Change in fair value of
interest rate swaps (5,814) 18,190 1,887 6,286
--------- --------- --------- ---------
Comprehensive loss $(40,976) $(23,729) $(70,902) $(48,881)
========= ========= ========= =========
Basic and diluted earnings per
common share:
Net loss:
Basic $(0.36) $(0.49) $(0.74) $(0.67)
Diluted $(0.36) $(0.49) $(0.74) $(0.67)
Weighted average common
shares outstanding:
Basic 98,203 84,687 98,132 82,764
Diluted 98,203 84,687 98,132 82,764
WYNN RESORTS, LIMITED AND SUBSIDIARIES
RECONCILIATION OF NET LOSS AND NET LOSS PER SHARE TO ADJUSTED EARNINGS
AND ADJUSTED EARNINGS PER SHARE
(Unaudited)
Three Months Ended Six Months Ended
June 30, June 30,
------------------- -------------------
2005 2004 2005 2004
--------- --------- --------- ---------
Net loss $(35,162) $(41,919) $(72,789) $(55,167)
Pre-opening costs 43,365 16,466 81,469 31,016
Adjusted net income 8,203 (25,453) 8,680 (24,151)
Per diluted share of common
stock:
Net loss $ (0.36) $ (0.49) $ (0.74) $ (0.67)
Pre-opening expenses 0.44 0.19 0.83 0.37
Adjusted net income 0.08 (0.30) 0.09 (0.29)
Weighted average common shares
outstanding:
Net loss
Basic 98,203 84,687 98,132 82,764
Diluted 98,203 84,687 98,132 82,764
Adjusted net income
Basic 98,203 84,687 98,132 82,764
Diluted 101,705 84,687 101,634 82,764
WYNN RESORTS, LIMITED AND SUBSIDIARIES
RECONCILIATION OF NET LOSS TO ADJUSTED EBITDA
(In thousands, except per share data)
(Unaudited)
Three Months Ended Six Months Ended
June 30, June 30,
-------------------- --------------------
2005 2004 2005 2004
--------- --------- --------- ---------
Net loss $(35,162) $(41,919) $(72,789) $(55,167)
Add/(Deduct):
Minority interest - (404) - (1,054)
Interest income (6,983) (1,511) (13,165) (3,130)
Interest expense, net 26,341 94 28,490 197
Loss on early
extinguishment of debt - 25,628 - 25,628
--------- --------- --------- ---------
Total 19,358 24,211 15,325 22,695
--------- --------- --------- ---------
Operating loss (15,804) (18,112) (57,464) (33,526)
Add/(Deduct):
Preopening expenses:
Wynn Las Vegas 36,900 8,756 65,137 15,877
Wynn Macau 4,124 2,254 6,598 4,532
Corporate and other 2,341 5,456 9,734 10,608
Depreciation and
amortization:
Wynn Las Vegas 23,376 285 24,260 443
Wynn Macau 1,469 140 2,934 140
Corporate and other 1,280 617 2,425 1,241
Corporate expenses and
other 5,049 602 5,111 683
--------- --------- --------- ---------
Total 74,539 18,110 116,199 33,524
--------- --------- --------- ---------
Wynn Las Vegas adjusted
EBITDA (1) $58,735 $(2) $58,735 $(2)
========= ========= ========= =========
WYNN RESORTS, LIMITED AND SUBSIDIARIES
SUPPLEMENTAL DATA SCHEDULE
Three Months Ended
June 30, 2005 (1)
------------------------
Room Statistics for Wynn Las Vegas:
Occupancy % 90.1%
Average Daily Room Rate (ADR)(2) $284
Average Paying Rate (APR)(3) $267
Revenue per available room (REVPAR)(4) $255
Other information:
Table games win per unit per day (5) $7,117
Table Hold % 21.1%
Slot Machine win per unit per day (6) $273
Average number of table games 136
Average number of slot machines 1,960
(1) Reflects the period from April 28, 2005 to June 30, 2005.
(2) ADR is Average Daily Rate and is calculated by dividing total
room revenue by total rooms occupied.
(3) APR is Average Paying Rate and is calculated by dividing cash
room revenue by cash rooms occupied.
(4) REVPAR is Revenue per Available Room and is calculated by
dividing total room revenue by total rooms available.
(5) Table games win per unit per day net of customer discounts.
(6) Slot machine win per unit per day shown net of participation
fees, free play and progressive accruals.
SOURCE: Wynn Resorts, Limited
Wynn Resorts, Limited, Las Vegas
Samanta Stewart, 702-770-7555
investorrelations@wynnresorts.com
www.wynnresorts.com
www.wynnlasvegas.com