1b176748-a89a-4ee7-ab87-4ee9d8cfc6ba.pdf



FOR IMMEDIATE RELEASE NOVEMBER 17, 2015‌‌


THIRD QUARTER 2015 INTERIM MANAGEMENT STATEMENT NOVEMBER 2015 REVENUE REPORT Thunderbird Resorts Inc. ('Thunderbird' or 'Group') (Euronext: TBIRD and FSE: 4TR) announces its interim results for the first quarter and three months ended September 30, 2015.


Group Overview for Third Quarter 2015


Performance Under our Stated Goals1


In the Group's Half-year Report 2015, our CEO stated certain goals to achieving profitability and building a healthy, growing company. Here is a snapshot of our performance under these stated goals in Q3 2015:‌


Stated Goal

Progress


Development

On February 25, 2015, the Group sold its economic interest and management rights in its seven casinos in Costa Rica as a strategic decision to exit a mature operation in which we only owned an approximate 50% stake. The net cash received for the Group's approximate 50% share was approximately $8.1 million. We continue to own real estate in Costa Rica with an appraised value to our 50% of approximately $14.9 million, which real estate is free and clear of debt and is being held for sale.


On April 22, 2015, the Group opened a 1,200 square meters entertainment venue in Managua, Nicaragua with 111 slot machines, 21 gaming table positions and 110 F&B positions. Based on five full months of operation, this property is generating $226 thousand in property EBITDA on an annualized basis as compared to -$23 thousand of property EBITDA for the full year 2014 for the Pharaoh's Holiday Inn that it replaced.

Grow EBITDA2 in Continuing Operations

Property EBITDA increased by 11.2% and adjusted EBITDA increased by 35.8% through Q3 2015 as compared to the same period in 2014.


Reduce Debt and / or Refinance Remaining Debt

Gross debt has been reduced to $35.8 million as of September 30, 2015, as compared to

$46.2 million on December 31, 2014. Net debt (gross debt less cash and cash equivalents) has been reduced to $31.1 million on September 30, 2015, as compared to

$41.3 million on December 31, 2014. As of this date, we continue to seek refinancing of our secured Peru-related debt.


Increase Shareholder Value

From January to October 2015, the Company has purchased 660,000 shares while directors/officers have purchased 850,000 shares. We continue to believe that our share price does not reflect the intrinsic value of the company. We continue to evaluate our capital structure, the sale of part or all of our approximately $76 million in real estate (based on appraised values) and other strategic alternatives to optimize value for shareholders. The goal of any material transaction would be to 'right size' cash flow and to build shareholder value by investing in growth.


1. Unless otherwise stated, all figures reported herein are in USD and report the results of those businesses that were continuing as of September 30, 2015, as compared to those same businesses through the nine months ended September 30, 2014, or through year-end 2014. Our stated goals have evolved over the last year, but are materially the same as set forth in previous reports.

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2. 'EBITDA' is not an accounting term under IFRS, and refers to earnings before net interest expense, income taxes, depreciation and amortization, equity in earnings of affiliates, minority interests, development costs, other gains and losses, and discontinued operations. 'Property EBITDA' is equal to EBITDA at the country level(s). 'Adjusted EBITDA' is equal to property EBITDA less 'Corporate expenses,' which are the expenses of operating the parent company and its non-operating subsidiaries and affiliates.


Summary Third Quarter 2015 Consolidated P&L:


Below is our consolidated profit / (loss) summary for the nine months ended September 30, 2015, as compared with the same period of 2014. In summary, Group revenue decreased by $1.4 million or 4.3% on a USD basis (see 'Forex' note below below where it shows revenue on a currency neutral basis has grown), while adjusted EBITDA increased by $696 thousand or 35.8% because of aggressive efficiency.


(In thousands)

Nine months ended

September 30

%

2015

2014

Variance

change

Net gaming wins

$ 25,716

$ 25,937

$ (221)

-0.9%

Food and beverage sales

2,304

2,518

(214)

-8.5%

Hospitality and other sales

3,455

4,421

(966)

-21.9%

Total revenues

31,475

32,876

(1,401)

-4.3%

Promotional allowances

3,539

3,441

98

2.8%

Property, marketing and administration

22,109

24,197

(2,088)

-8.6%

Property EBITDA

5,827

5,238

589

11.2%

Corporate Expenses

3,188

3,295

(107)

-3.2%

Adjusted EBITDA

2,639

1,943

696

35.8%

Property EBITDA as a percentage of revenues

8.4%

5.9%

Depreciation and amortization

2,836

2,903

(67)

-2.3%

Interest and financing costs, net

3,175

2,807

368

13.1%

Management fee attributable to non-controlling interest

-

(347)

347

-100.0%

Project development

91

-

91

0.0%

Foreign exchange (gain) / loss

406

125

281

224.8%

Other (gains) / losses

1,488

1,280

208

16.3%

Income taxes

248

246

2

0.8%

Loss for the period from continuing operations

$ (5,605)

$ (5,071)

$ (534)

10.5%



Forex: The strengthening of the US dollar versus our operating currencies continues to have a material impact on our as reported profit / (loss) as compared to the same period in 2014. Under a currency neutral analysis (in which the same exchange rate would be applied to both periods as to remove Forex swings from the analysis), Group revenue would have grown by $1.5 million or 4.9% and adjusted EBITDA would have increased by $1.1 million or 77.0%.


Interest and Financing costs, net: The increase in financing costs, net was due to the fact that in 2014 the Group benefitted from material interest income from the financed portion of its sale of Philippines assets, which loan has since been repaid by the purchaser. Our average weighted borrowing cost as of September 30, 2015, was just 8.60% as we have continued to pay down our highest interest debt.

Below is the Group's Gross debt and Net Debt on September 30, 2015.


(In thousands; proportional consolidation)

Sep-15

Jun-15

Mar-14

Borrowings

$ 34,187

$ 34,947

$ 37,088

Obligations under leases and hire purchase contracts

1,673

564

684

Gross Debt

$ 35,860

$ 35,511

$ 37,773

Less: cash and cash equivalents (excludes restricted cash)

4,668

7,755

10,525

Net Debt

$ 31,192

$ 27,756

$ 27,248


Note: Gross debt above is presented net of debt issuance costs (costs of debt at time of issuance, which are currently non-cash and amortize over time) which is why there is an approximate $0.3 million variance with the total Principal balance below.


The increase in Obligations under leases as of September 2015 was due to the addition of $1.9 million of gaming machines debt in Peru as detail below:



Balance


Interest


Maturity

Additions

Sep 30, 2015

Collateral

rate

date

Peru

Obligations under leases

1,909

1,232

Gaming machines

8.0%

Jul, Aug and Sep 2017

Total

$ 1,909

$ 1,232



The Group estimates its debt schedule as follows starting in October 2015:



Principal Payment


2015


2016


2017


2018


2019


Thereafter


Total

Corporate

$ 3,660,952

$ 5,963,599

$ 4,909,213

$ 2,513,506

$ 1,375,026

$ 3,397,095

$ 21,819,391

Peru

511,195

2,167,105

1,726,695

1,395,824

6,613,313

-

12,414,132

Nicaragua

58,336

265,953

269,563

294,887

735,749

322,190

1,946,698

Total

$ 4,230,503

$ 8,396,657

$ 6,905,471

$ 4,204,217

$ 8,724,088

$ 3,719.285

$ 36,180,221


Interest Payment


2015


2016


2017


2018


2019


Thereafter


Total

Corporate

$ 666,514

$ 1,686,670

$ 908,049

$ 619,272

$ 456,979

$ 419,584

$ 4,757,068

Peru

283,035

1,036,716

815,066

620,176

223,950

-

2,978,943

Nicaragua

58,480

172,373

145,763

120,439

92,985

30,880

620,920

Total

$ 1,008,029

$ 2,895,759

$ 1,868,878

$ 1,359,887

$ 773,914

$ 450,464

$ 8,356,931



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Peru Update


Summary Peru Third Quarter 2015 Consolidated P&L:


Our Peru profit / (loss) summary for the nine months ended September 30, 2015, as compared with the same period of 2014 is set out below. In summary, Peru revenue has reduced by $1.9 million or 8.4% on a USD basis (see 'Forex' note below for information on currency neutral revenue), while property EBITDA has increased by $840 thousand or 23.9% due to aggressive efficiency programs.


(In thousands)

Nine months ended

September 30

%

2015

2014

Variance

change

Net gaming wins

$ 16,648

$ 16,984

$ (336)

-2.0%

Food and beverage sales

815

1,335

(520)

-39.0%

Hospitality and other sales

3,294

4,336

(1,042)

-24.0%

Total revenues

20,757

22,655

(1,898)

-8.4%

Promotional allowances

2,231

2,191

40

1.8%

Property, marketing and administration

14,178

16,956

(2,778)

-16.4%

Property EBITDA

4,348

3,508

840

23.9%

Property EBITDA as a percentage of revenues

20.9%

15.5%

Depreciation and amortization

2,310

2,443

(133)

-5.4%

Interest and financing costs, net

991

983

8

0.8%

Management fee attributable to non-controlling interest

7

(64)

71

-110.9%

Foreign exchange (gain) / loss

766

368

398

108.2%

Other (gains) / losses

(97)

(3)

(94)

3133.3%

Loss for the period from continuing operations

$ 371

$ (219)

$ 590

-269.4%




Forex: Under a currency neutral basis (in which the same exchange rate would be applied to both periods), Peru revenue would have grown by $491 thousand or 2.4% and property EBITDA would have increased by $1.2 million or 38.6%.


Profit for the period in Peru is $371 thousand (an improvement of $590 thousand as compared to 2014), which primarily is the result of efficiency programs the Group has implemented that have led to the reduction of $2.8 million in property, marketing and administration expense.


Key business drivers: a) During Q3 and Q4 2014, the Group opened 24 electronic roulette and 56 new table positions, and 2015 is the first full year of operation of these positions; b) The consolidation of our Peru administrative offices to free up space and increase space for third party rentals is expected to have an impact in Q1 2016; c) Effective April 30, 2015, the Group's contract to manage the El Pueblo Resort expired, thus reducing revenue on an annualized basis by approximately $730 thousand; and d) The Group announced in its 2014 Annual Report that it has reduced payroll by approximately $1.5 million (annualized) between September 2014 and approximately April 2015. The year-to-date impact of these reductions as of September 30, 2015 has been $1.6 million, which is materially higher than forecasted.


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