Wynn Resorts, Limited Reports First Quarter Results (United States)
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Wynn Resorts, Limited Reports First Quarter Results (United States)
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Category: North America & West Indies / Carribean islands - United States - Industry economy
- Figures / Studies
This is a press release selected by our editorial committee and published online for free on 2009-05-06
Wynn Resorts, Limited (Nasdaq: WYNN) today reported financial results for the first quarter ended March 31, 2009.
Net revenues for the first quarter of 2009 were $740.0 million, compared to $778.7 million in the first quarter of 2008. The revenue decline was driven primarily by 8.7% lower revenues at Wynn Macau.
Consolidated adjusted property EBITDA (1) decreased 19.9% to $158.5 million for the first quarter of 2009, compared to $197.8 million in the first quarter of 2008.
On a US GAAP (Generally Accepted Accounting Principles) basis, net loss for the quarter was $33.8 million, or ($0.30) per diluted share, compared to net income of $46.7 million, or $0.41 per diluted share in 2008. Adjusted net loss in the first quarter of 2009 was $30.1 million, or ($0.27) per diluted share (adjusted EPS)(2) compared to an adjusted net income of $78.2 million, or $0.69 per diluted share in the first quarter of 2008.
Las Vegas First Quarter Results
Our results of operations for the periods presented are not comparable as the three months ended March 31, 2009 includes Encore at Wynn Las Vegas, which opened on December 22, 2008. The prior year quarter includes only Wynn Las Vegas.
For the quarter ended March 31, 2009, our Las Vegas operations generated adjusted property EBITDA of $43.9 million, compared to $68.4 million in the first quarter of 2008, with a 15.1% EBITDA margin on net revenue. The EBITDA decline was primarily driven by higher operating expenses associated with the opening of Encore.
Net casino revenues in the first quarter of 2009 were $117.5 million, compared to $125.1 million for the first quarter of 2008. Table games drop was $520.0 million, with win per table per day (before discounts) of $4,404, compared to drop of $533.3 million and win per table per day of $8,632 in the first quarter of 2008. Table games win percentage of 17.7% was below the property’s expected range of 21% to 24% and the 19.9% in the first quarter of 2008. Slot machine handle of $919.2 million was 2.5% above the comparable period of 2008 and win per unit per day was $179, compared to a win per unit per day of $227 in the first quarter of 2008. The reduction in win per table and win per unit is due primarily to the addition of 97 tables and 857 slot machines with the opening of Encore.
Gross non-casino revenues for the quarter were $228.4 million, a 13.3% increase from the first quarter of 2008, driven primarily by higher hotel and food and beverage revenues resulting from the opening of Encore. Hotel revenues were up 20.6% to $85.1 million during the quarter, versus $70.6 million in the first quarter of 2008 due to the addition of 2,034 suites at Encore. Our Las Vegas operations achieved an Average Daily Rate (ADR) of $222 for the quarter, compared to $298 in the first quarter of 2008. Our occupancy was 89.5%, compared to 95.8% during the prior year period, generating revenue per available room (REVPAR) of $199 in the 2009 period (30.3% below the first quarter of 2008 of $285).
Food and beverage revenues increased 25.6% to $96.9 million in the quarter as a result of the additional 12 food and beverage outlets located in the Encore expansion. Retail revenues were $19.6 million in the quarter, compared to $22.6 million, a 13.5% decline resulting primarily from reduced consumer spending in the first quarter of 2009. Entertainment revenues decreased $6.4 million (33.3%) from the first quarter of 2008 primarily due to the closure of the Spamalot production show in July 2008.
Macau First Quarter Results
In the first quarter of 2009, net revenues were $448.7 million compared $491.5 million in the first quarter of 2008. Wynn Macau generated adjusted property EBITDA of $114.6 million, compared to $129.4 million in the first quarter of 2008.
Table games turnover in the VIP segment was $10.7 billion for the period, compared to $14.8 billion for the first quarter of 2008. VIP table games win as a percentage of turnover (calculated before discounts and commissions) for the first quarter of 2009 was 3.6%, higher than the 3.0% experienced in the 2008 period and above the expected range of 2.7% to 3.0%.
Table games drop in the mass market category was approximately $502.3 million during the period, a 15.3% decrease from $592.7 million in the first quarter of 2008. Mass market table games win percentage (calculated before discounts) of 22.1% was above our expected range of 18% to 20% and higher than the 19.7% experienced in the first quarter of 2008.
Slot machine win increased 41.2% compared to the first quarter of 2008 and win per unit per day was $440, 42.0% higher than in the first quarter of 2008.
Wynn Macau achieved an Average Daily Rate (ADR) of $268 for the quarter of 2009, compared to $276 in the first quarter of 2008. The property’s occupancy was 83.3%, compared to 88.5% during the prior year period, generating revenue per available room (REVPAR) of $223 in the 2009 period, 8.6% below 2008 levels of $244.
Encore at Wynn Macau
Construction continues on a further expansion of Wynn Macau. Encore at Wynn Macau is expected to open in 2010, adding a fully-integrated resort hotel to Wynn Macau with approximately 400 luxury suites and four villas, along with restaurants, retail and gaming space. The current project budget is approximately $700 million.
As of March 31, 2009, we have incurred $254.6 million associated with the construction of Encore at Wynn Macau.
Other Factors Affecting Earnings
Interest expense, net of $2.4 million in capitalized interest, was $57.0 million for the first quarter of 2009. Depreciation and amortization expenses were $101.5 million and we had no pre-opening expenses. Corporate expense and other was $13.4 million in the first quarter, including $5.4 million in stock based compensation. Property charges of $16.5 million are primarily related to the write-off of aircraft purchase deposits. Our first quarter 2009 tax expense of $15.9 million reflects additional reserves against deferred tax assets which are not directly related to our first quarter operating results.
Balance Sheet and Capital Expenditures
Our total cash balances on March 31, 2009 were $1.7 billion. Total debt outstanding at the end of the quarter was $4.8 billion, including approximately $2.8 billion of Wynn Las Vegas debt, $1.6 billion of Wynn Macau debt and $375 million outstanding under the Wynn Resorts Term Loan Facility.
Capital expenditures during the first quarter of 2009 of approximately $185 million included the payment of certain construction payables and retention associated with Encore at Wynn Las Vegas and ongoing construction of Encore at Wynn Macau.
On March 20, 2009, the Company completed a secondary common stock offering of 11,040,000 shares with net proceeds of $202.3 million.
Conference Call Information
The Company will hold a conference call to discuss its results on Tuesday, May 5th, 2009 at 8:00 a.m. PT (11:00 a.m. ET). Interested parties are invited to join the call by accessing a live audio webcast at http://www.wynnresorts.com (Investor Relations).
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