Wynn Resorts Ltd. had around 300 employees test positive for the coronavirus, about 2 percent of nearly 17,000 since the company began testing, Wynn CEO Matt Maddox said Tuesday.
“To put that in perspective, we performed 16,750 tests and 98 percent have come back negatives,” Maddox told investors during an earnings call.
He said 10 contact tracers on staff determined that the virus was contracted outside the resort. Maddox said he has regular phone conversations with health experts.
“Each week, I sit with and talk to the head of global health security and pandemic research and her team from Georgetown University, going through our protocols and everything we’re doing,” he said. “Just last week, talking about these numbers, her response was, ‘Wynn is probably the safest place outside of home that your employees and your customers go during the day.’ That’s part of our brand. That’s who we are and that’s what we’re going to live up to.”
Maddox said he’s particularly proud of the company’s testing capabilities.
“Not only did we test all of our employees before they started, but we developed an algorithm where we surveil our staff and we test randomly 500 to 600 people every couple of weeks and with 10 contact tracers in house,” he said.
Maddox said the roughly 300 employees that were positive were notified immediately by the contact tracers and it was determined that 99 percent of those 300 employees were exposed outside of Wynn.
The company opened Wynn Las Vegas and Encore in early June and reopened its Encore Boston Harbor property in Massachusetts on July 12.
It’s all because of the pandemic, which closed Nevada casinos for 78 days beginning March 17. It took even longer for Massachusetts casinos to reopen, and even now, Maddox said, table games are vastly restricted with no roulette or craps play allowed by regulators in that state.
In Macao, where Wynn operates three properties, the market has endured border restrictions that have prevented tourists from going to resorts. Last month, the Chinese central government announced a lifting of restrictions between nearby Guangdong province and Macao. Borders are still closed to Hong Kong.
“We are pleased to be up and running again in each of our markets,” Maddox said in a statement.
The bottom line
The company reported a net loss of $3.5 million, $6.14 a share, on revenue of $85.7 million. That compares with net income of $116.1 million, $1.44 a share, on revenue of $1.658 billion in the same quarter a year earlier.
Maddox characterized Wynn Las Vegas and Encore functioning “like a super-regional property” with most customers drive-in visitors from Southern California.
“But our revenues are not like a regional market revenue,” Maddox explained during the call.
“Two-thirds of our business is nongaming and that’s down by 60-plus percent. Even though gaming spend is OK, you can’t cut your way to better margins without absolutely destroying your branding culture and company,” he said.
“Expenses are down almost 40 percent, we’re focused on cash flow and not on margins because we want to make sure we’re preserving our cash flow and we’re preserving who we are for the long term.”
Maddox said operating revenues in Las Vegas were $64.9 million for the second quarter, an 86 percent decrease from $464.1 million for the second quarter of 2019. Adjusted property cash flow from Las Vegas operations for the second quarter of 2020 was negative $75.6 million, compared to $137.4 million for the second quarter of 2019.
The Las Vegas operating loss for the second quarter doesn’t include the impact of $56.4 million of expenses related to the company’s commitment to pay salary, tips and benefits for all of U.S. employees from April 1 through May 15.
He said the company’s cash burn is between $1.5 million and $2 million a day.
Wynn shares, traded on the Nasdaq, were down 30 cents, 0.4 percent, in light-volume trading Tuesday. After hours, shares rose 26 cents, or 0.4 percent, to reach $73.01 a share late in the afternoon.
Wynn by the numbers
Second-quarter revenue and earnings for Las Vegas-based Wynn Resorts Ltd., which operates Wynn Las Vegas and Encore Las Vegas, three properties in Macao, and Encore Boston Harbor. (Nasdaq: WYNN)
2Q 2020: $85.7 million
2Q 2019: $1.658 billion
2Q 2020: ($3.5 million)
2Q 2019: $116.1 million
Earnings/(Loss) per share
2Q 2020: ($6.14)
2Q 2019: $1.44