View printer-friendly versionLAS VEGAS--(BUSINESS WIRE)--May 3, 2006--Wynn Resorts, Limited (Nasdaq: WYNN) today reported financial results for the first quarter ended March 31, 2006.
Net Revenues for the quarter were $277.2 million and adjusted net income (excluding $12.6 million in pre-opening expenses, property charges, fees for the termination of "Avenue Q" and increase in swap fair value) was $1.1 million, or $0.01 per diluted share (adjusted EPS) (1). On a US GAAP (Generally Accepted Accounting Principles) basis, net loss was $11.4 million, or a net loss of $0.12 per diluted share.
Wynn Las Vegas First Quarter Results
For the quarter ended March 31, 2006, Wynn Las Vegas generated adjusted EBITDA of $81.1 million, representing a 29.2% margin on first quarter net revenues.
Net gaming revenues in the first quarter of 2006 were $126.5 million. Table games drop was $489.8 million, with win per table per day (before discounts) of $7,395 for the period. Table games win percentage was 19.8%, which is within the property's expected range of 19% to 22% and lower than the 21.0% achieved life to date. Slot machine win per unit per day was $260 on handle (volume) of $911.3 million.
Gross non-gaming revenues for the period were $191.8 million and net non-gaming revenues were $150.7 million. Wynn Las Vegas' room revenues were $68.2 million. Average daily rate (ADR) was $293 and occupancy was 95.5%, generating revenue per available room (REVPAR) of $279 for the period. The food and beverage, retail, entertainment and other operations generated gross revenues of $74.6 million, $17.2 million, $20.3 million and $11.5 million, respectively.
Wynn Macau
In June 2004, the Company broke ground on Wynn Macau, its destination casino resort in Macau, China. The first phase of the project will utilize approximately 11 acres of a total site area of 16 acres of land and includes 600 hotel rooms and suites, approximately 100,000 square feet of casino gaming space, seven restaurants, approximately 26,000 square feet of retail space, a spa, a salon, entertainment lounges and meeting facilities. We expect the first phase to open to the public in the third quarter of 2006. The second phase will include up to an additional 136,000 square feet of casino space, two restaurants, additional retail space, a theater, and a dramatic front feature attraction. The second phase is expected to be fully open to the public in the fourth quarter of 2007.
Design and construction is progressing on schedule and within budget. Many areas in the first phase of the project, including the information technology data center, several floors of guestrooms and suites in the hotel tower, the loading dock and main kitchen storage area, have been handed over to operations. Final finish work is in progress on several restaurants, in the casino and other areas.
As of March 31, 2006, the Company has incurred approximately $554.5 million of a total project budget of approximately $1.2 billion (including the expansion of the second phase), with approximately $622.4 million to be spent to complete Wynn Macau.
Encore at Wynn Las Vegas
As a result of the strong demand for the amenities and services offered by Wynn Las Vegas, the continued strength of the Las Vegas market, and our desire to maximize the potential of our substantial real estate assets, we are constructing Encore at Wynn Las Vegas ("Encore") on approximately 20 acres on the Strip, immediately adjacent to Wynn Las Vegas. On March 31, 2006, our lenders approved the $1.74 billion project budget and the related plans and specifications for Encore. Encore includes a 2,054-room hotel tower fully integrated with Wynn Las Vegas, consisting of 144 suites and 1,910 guest rooms, as well as an approximately 54,000 square foot casino, additional convention and meeting space, as well as restaurants, nightclubs, swimming pools, a spa and salon and retail outlets. We commenced construction of Encore on April 28, 2006 and expect to open it to the public by the end of 2008. The project budget for Encore includes approximately $70.0 million to be incurred for construction of a new employee parking garage on our Koval property, a related pedestrian bridge and costs to be incurred in connection with preparing the Broadway Theater to host "Monty Python's Spamalot."
Other Factors Affecting Earnings
Depreciation and amortization expenses were $41.8 million during the first quarter, including $2.5 million of accelerated Avenue Q production rights and costs. Interest expense, net of $6.4 million in capitalized interest, was $35.9 million for the first quarter of 2006. Pre-opening expenses, primarily related to Wynn Macau, totaled $8.9 million during the quarter. Corporate expenses and other was $10.7 million, including $3.0 million of stock option expenses.
Balance Sheet and Capital Expenditures
Our total cash balances at the end of the quarter were $885.2 million, including unrestricted cash balances of $477.0 million and restricted cash balances of $408.2 million. Total debt outstanding at the end of the quarter was $2.2 billion, including $235.9 million of Convertible Debentures and $193.9 million of Wynn Macau related debt. Capital expenditures during the first quarter of 2006, net of changes in construction payables and retention, totaled $115.4 million, of which $77.4 million was related to Wynn Macau.
Conference Call Information
The Company will hold a conference call to discuss its results on Wednesday, May 3rd, 2006 at 1:30 p.m. PT (4:30 p.m. ET). Interested parties are invited to join the call by accessing a live audio webcast at http://www.wynnresorts.com (Investor Relations).
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 industries, 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, 2005 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 EBITDA is earnings before interest, taxes, depreciation, amortization, pre-opening expenses, property charges, corporate expenses, stock-based compensation, Avenue Q contract termination fee, earnings or losses from unconsolidated affiliates, and other non-operating income and expenses. Adjusted EBITDA is presented exclusively as a supplemental disclosure because management believes that it is widely used to measure the performance, and as a principal basis for valuation, of gaming companies. Management uses adjusted EBITDA as the primary measure of the operating performance of Wynn Las Vegas and to compare the operating performance of its properties with those of its competitors. The Company also presents adjusted EBITDA because it is used by some investors as a way to measure a company's ability to incur and service debt, make capital expenditures and meet working capital requirements. Gaming companies have historically reported EBITDA as a supplement to financial measures in accordance with generally accepted accounting principles in the United States ("GAAP"). In order to view the operations of their casinos on a more stand-alone basis, gaming companies, including Wynn Resorts, Limited, have historically excluded from their EBITDA calculations pre-opening expense, property charges and corporate expense, which do not relate to the management of specific casino properties. However, adjusted EBITDA should not be considered as an alternative to operating income, as an indicator of operating performance, as an alternative to cash flows from operating activities as a measure of liquidity, or as an alternative to any other measure determined in accordance with GAAP. Unlike net income Adjusted EBITDA does not include depreciation or interest expense and therefore does not reflect current or future capital expenditures or the cost of capital. The Company has significant uses of cash flows, including capital expenditures, interest payments, debt principal repayments, taxes and other non-recurring charges, which are not reflected in adjusted EBITDA. Also, Wynn Resorts, Limited's calculation of Adjusted EBITDA may be different from the calculation methods used by other companies, and therefore, comparability may be limited.
(2) Adjusted net income and adjusted earnings per share ("EPS") are presented exclusively as a supplemental disclosure because management believes that these financial measures are widely used to measure the performance, and as a principal basis for valuation, of gaming companies. These measures are considered by many to be a better indicator on which to base expectations of future results than income computed in accordance with GAAP.
Wynn Resorts' 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 reconcile (i) net loss and net loss per share to adjusted net income and adjusted net income per share, and (ii) net loss to adjusted EBITDA.
WYNN RESORTS, LIMITED AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share data)
(Unaudited)
Three Months Ended
March 31,
------------------------
2006 2005
---------- ----------
Operating revenues: (as Restated)
Casino $126,514 $ -
Rooms 68,177 -
Food and beverage 74,634 -
Entertainment, retail and other 48,957 -
---------- ----------
Gross revenues 318,282 -
Less promotional allowances (41,057) -
---------- ----------
Net revenues 277,225 -
Operating costs and expenses:
Casino 63,236 -
Rooms 16,985 -
Food and beverage 44,759 -
Entertainment, retail and other 32,514 -
General and administrative 46,965 9
Provision for doubtful accounts 2,929 -
Pre-opening costs 8,946 38,104
Depreciation and amortization 41,785 3,494
Contract termination fee 5,000 -
Property charges and other 4,949 53
---------- ----------
Total operating costs and expenses 268,068 41,660
Equity in income from unconsolidated
affiliates 575 -
---------- ----------
Operating income (loss) 9,732 (41,660)
---------- ----------
Other income/(expense):
Interest income 8,432 6,182
Interest expense, net (35,943) (2,149)
Increase in swap fair value 6,345 7,700
---------- ----------
Other income (expense), net (21,166) 11,733
---------- ----------
Net loss $(11,434) $(29,927)
========== ==========
Basic and diluted earnings per
common share:
Net loss:
Basic $ (0.12) $ (0.30)
Diluted $ (0.12) $ (0.30)
Weighted average common
shares outstanding:
Basic 98,736 98,229
Diluted 98,736 98,229
WYNN RESORTS, LIMITED AND SUBSIDIARIES
RECONCILIATION OF NET LOSS AND NET LOSS PER SHARE TO
ADJUSTED NET INCOME AND ADJUSTED NET INCOME PER SHARE
(In thousands)
(Unaudited)
Three Months Ended
March 31,
-------------------
2006 2005
--------- ---------
Net loss $(11,434) $(29,927)
Pre-opening costs 8,946 38,104
Avenue Q contract termination fee 5,000 -
Property charges and other 4,949 53
Increase in swap fair value (6,345) (7,700)
--------- ---------
Adjusted net income $ 1,116 $ 530
========= =========
Per diluted share of common stock:
Net loss $ (0.12) $ (0.30)
Pre-opening costs 0.09 0.39
Avenue Q contract termination fee 0.05 -
Property charges and other 0.05 0.00
Increase in swap fair value (0.06) (0.08)
--------- ---------
Adjusted net income $ 0.01 $ 0.01
========= =========
Weighted average diluted
common shares outstanding 98,736 98,229
WYNN RESORTS, LIMITED AND SUBSIDIARIES
RECONCILIATION OF NET LOSS TO ADJUSTED EBITDA
(In thousands)
(Unaudited)
Three Months Ended
March 31,
-------------------
2006 2005
--------- ---------
Net loss $(11,434) $(29,927)
Add/(Deduct):
Interest income (8,432) (6,182)
Interest expense, net 35,943 2,149
Increase in swap fair value (6,345) (7,700)
--------- ---------
Total 21,166 (11,733)
--------- ---------
Operating income (loss) 9,732 (41,660)
Add:
Preopening expenses:
Wynn Las Vegas (including Encore) 18 29,091
Wynn Macau 8,928 3,974
Corporate and other - 5,039
Depreciation and amortization:
Wynn Las Vegas (including Encore) 38,949 1,511
Wynn Macau 2,077 1,466
Corporate and other 759 517
Property charges and other:
Wynn Las Vegas (including Encore) 4,949 53
Wynn Macau - -
Corporate and other - -
Avenue Q contract termination fee 5,000 -
Corporate expenses and other 10,711 -
--------- ---------
Total 71,391 41,651
--------- ---------
Adjusted EBITDA $ 81,123 $ (9)
========= =========
WYNN RESORTS, LIMITED AND SUBSIDIARIES
SUPPLEMENTAL DATA SCHEDULE
Three Months April 28, 2005
Ended to
March 31, 2006 March 31, 2006
-------------- --------------
Room Statistics for Wynn Las Vegas:
Occupancy % 95.5% 93.0%
Average Daily Room Rate (ADR)(1) 293 279
Average Paying Rate (APR)(2) 285 269
Revenue per available room
(REVPAR)(3) 279 260
Other information:
Table games win per unit per day(4) 7,395 8,015
Table Hold % 19.8% 21.0%
Slot Machine win per unit per day(5) 260 256
Average number of table games 146 137
Average number of slot machines 1,951 1,954
(1) ADR is Average Daily Rate and is calculated by dividing total room
revenue by total rooms occupied.
(2) APR is Average Paying Rate and is calculated by dividing cash room
revenue by cash rooms occupied.
(3) REVPAR is Revenue per Available Room and is calculated by dividing
total room revenue by total rooms available.
(4) Table games win per unit per day shown before discounts and
commissions.
(5) Slot machine win per unit per day net of participation fees and
progressive accruals.
CONTACT: Wynn Resorts, Limited, Las Vegas
Samanta Stewart, 702-770-7555
investorrelations@wynnresorts.com
www.wynnresorts.com
www.wynnlasvegas.com
www.wynnmacau.com
SOURCE: Wynn Resorts, Limited