Wynn Resorts said in a securities filing Tuesday it is spending roughly $3.5 million a day to pay its 15,000 employees salary and benefits through May 15.
The company, whose properties in Las Vegas and Boston are closed through the beginning of May due to the COVID-19 coronavirus pandemic, was seeking $600 million in financing through two subsidiaries in a private offering. The figure was upsized Tuesday afternoon. The company announced in the morning it was seeking $350 million.
The salary costs and operating expenses for the closed casinos were disclosed as part of a Securities and Exchange Commission 8K filing related to the offering. Wynn also pre-announced partial earnings for the first three months of 2020. The company said the costs excluded approximately $800,000 per day of cash interest expense.
Last week, Wynn CEO Matt Maddox said all employees would continue to be paid as “responsibility to follow the direction of health and safety professionals to stay home.” For tipped employees, the salary includes the average tip compliance rate for distributed tips/tokes since the beginning of the year.
Las Vegas-based Wynn said Tuesday it plans to use proceeds from the debt offering for general corporate purposes and to pay related fees and expenses. The notes would be due in 2025. As of the end of last year, Wynn had long-term debt of $10.4 billion.
In the filing Wynn pre-announced partial earnings for the first three months of 2020, saying total revenues were expected to range between $912 million to $969 million for the three months ending March 31, compared to $1.64 billion for the same three months a year ago.
“While we don’t believe the first quarter 2020 results are of relevance to the market, we would note that on an apples to apples basis, results were in line with our recently revised forecasts for the period,” Deutsche Bank gaming analyst Carlo Santarelli told investors Tuesday.
During the quarter, Wynn’s three casinos in Macau were closed for 15 days at the beginning of February and reopened on a reduced basis for four weeks starting on Feb. 20. The Macau casinos have been operating under several health safeguards since March 20, which is limiting visitation.
“We are currently unable to determine when these measures will be lifted,” Wynn said in the SEC filing.
During the Macau closures, Wynn was spending approximately $2.5 million per day in operating expenses, which excluded cash interest expense of approximately $500,000 per day.
“Until (the health safeguards) are lifted, we expect to continue to incur such cash costs in excess of the amounts we are earning at our properties,” the company said.
Meanwhile, Encore Boston Harbor was ordered closed on March 15 by the Massachusetts Gaming Commission along with the state’s other two casinos in response to the coronavirus outbreak. The casinos will remain closed until at least May 4.
The company ceased operations at Wynn Las Vegas and Encore on March 17 and will remain closed until at least April 30 after Nevada’s governor ordered a shutdown of the state’s gaming industry due to the pandemic.
Wynn said as of the end of March, the company had $1 billion in cash available to fund its businesses.
Wynn Resorts shares, traded on the Nasdaq, fell some 76% between January and March as gaming stocks were hammered by investors in response to the pandemic.
Shares in Wynn increased almost 17% on Monday and continued to climb Tuesday, closing at up $4.12 or 7.26% to end the day at $60.85.
Howard Stutz is the executive editor of CDC Gaming. He can be reached at hstutz@cdcgaming.com. Follow @howardstutz on Twitter.
