Thunderbird Resorts Inc. First Quarter 2016 Interim Management Statement; April 2016 Revenue Report
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Thunderbird Resorts Inc. /
Thunderbird Resorts Inc. First Quarter 2016 Interim Management Statement; April
2016 Revenue Report
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The issuer is solely responsible for the content of this announcement.
PANAMA, REPUBLIC OF PANAMA--(Marketwired - May 24, 2016) - Thunderbird Resorts
Inc. ("Thunderbird" or "Group") (EURONEXT:TBIRD)(FRANKFURT:4TR) announces its
interim results for the first quarter ended March 31, 2016.
Group Overview for First Quarter 2016
Performance Under our Stated Goals(1)
In the Letter from the CEO in our 2015 Annual Report, the Group stated certain
goals that support achieving profitability and building a healthy, growing
company. Here is a snapshot of our performance under these stated goals in Q1
2016:
+---------------------------+--------------------------------------------------+
|Stated Goal | Progress |
+---------------------------+--------------------------------------------------+
|Increase our EBITDA(2) | Adjusted EBITDA (after deducting Corporate-level|
| | expenses) reduced by just $40 thousand or 4.2% |
| | on a USD basis as compared to Q1 2015. However, |
| | under a currency neutral analysis (in which the |
| | same exchange rate would be applied to both |
| | periods), the Group's Adjusted EBITDA increased |
| | by $149 thousand or 19.7% as compared to Q1 |
| | 2015. |
+---------------------------+--------------------------------------------------+
|Improve our profit / (loss)| Our Loss from Continuing Operations reduced by |
| | $742 thousand or 73.8%. This improvement is the |
| | result of higher Other gains that increased by |
| | $598 thousand as compared to Q1 2015. These |
| | Other gains are mainly related to the sale of |
| | the Office building in Panama. |
+---------------------------+--------------------------------------------------+
|Reduce our borrowings | Group gross debt(3) was reduced by $7.2 million |
| | or 19.1% as compared to March 31, 2015. |
| | Specifically, gross debt on March 31, 2016 was |
| | $30.6 million as compared to $37.8 million on |
| | March 31, 2015. |
+---------------------------+--------------------------------------------------+
In the Letter from the CEO in our 2015 Annual Report, we also stated that the
Group is evaluating "strategic alternatives" and this process continues. We
refer the reader to pages 5 and 6 of the 2015 Annual Report for more details on
these alternatives.
(1) Unless otherwise stated, all figures reported herein are in USD and report
the results of those businesses that were continuing as of March 31, 2016
as compared to those same businesses through the three months ended March
31, 2015 or through year-end 2015. The purpose is for the reader to
understand the performance of the Group's continuing businesses.
(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.
(3) Gross debt equals total borrowings and finance lease obligations.
Summary First Quarter 2016 Consolidated P&L:
Below is our consolidated profit / (loss) summary for the three months ended
March 31, 2016 as compared with the same period of 2015. In summary, Group
revenue and adjusted EBITDA have reduced on a USD basis (see "Forex" note
below), despite lower country-level operating expenses and reduced corporate
expenses. See notes on certain key items below.
-------------------------------------------------------------------------------
(In thousands)
Three months ended
March 31,
----------------------
2016 2015 Variance % change
-------------------------------------------
Net gaming wins $ 8,141 $ 8,473 $ (332 ) -3.9 %
Food and beverage sales 671 822 (151 ) -18.4 %
Hospitality and other sales 891 1,191 (300 ) -25.2 %
-------------------------------------------
Total revenues 9,703 10,486 (783 ) -7.5 %
-------------------------------------------
Promotional allowances 1,246 1,111 135 12.2 %
Property, marketing and
administration 6,784 7,472 (688 ) -9.2 %
-------------------------------------------
Property EBITDA 1,673 1,903 (230 ) -12.1 %
-------------------------------------------
Corporate Expenses 766 956 (190 ) -19.9 %
-------------------------------------------
Adjusted EBITDA 907 947 (40 ) -4.2 %
-------------------------------------------
Property EBITDA as a percentage of
revenues 9.3 % 9.0 %
Depreciation and amortization 765 913 (148 ) -16.2 %
Interest and financing costs, net 831 1,043 (212 ) -20.3 %
Management fee attributable to non-
controlling interest - (18 ) 18 -100.0 %
Project development - 1 (1 ) -100.0 %
Foreign exchange (gain) / loss 243 64 179 279.7 %
Other (gains) / losses (741 ) (143 ) (598 ) 418.2 %
Income taxes 72 92 (20 ) -27.7 %
-------------------------------------------
Loss for the period from continuing
operations $ (263 ) $ (1,005 ) $ 742 -73.8 %
-------------------------------------------
-------------------------------------------------------------------------------
Forex: The strengthening of the US dollar versus our operating currencies
continues to have a material impact on our business as compared to the same
period in 2015. Under a currency neutral analysis (in which the same exchange
rate would be applied to both periods), Group revenue would have grown by $190
thousand or 2.0% and adjusted EBITDA would have increased by $149 thousand or
19.7%.
Consolidated Loss for the period is $263 thousand (an improvement of $742
thousand or 73.8% as compared to 2015), which primarily is the result of higher
Other gains related to the sale of the Office building in Panama that took place
in March 2016.
Below is the Group's Gross debt and Net Debt on March 31, 2016.
-------------------------------------------------------------------------------
(In thousands)
Mar-16 Dec-15 Sep-15
---------------------------
Borrowings $ 29,417 $ 30,701 $ 34,187
Obligations under leases and hire purchase
contracts 1,150 1,432 1,673
---------------------------
Gross Debt $ 30,568 $ 32,133 $ 35,860
Less: cash and cash equivalents (excludes
restricted cash) 2,138 2,869 4,668
---------------------------
Net Debt $ 28,429 $ 29,264 $ 31,192
-------------------------------------------------------------------------------
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 $239 thousand variance with the total Principal
balance below.
The Group estimates its debt schedule as follows starting in April 2016:
--------------------------------------------------------------------------------------------------
Principal
Payment 2016 2017 2018 2019 2020 Thereafter Total
--------------------------------------------------------------------------------------
Corporate $ 5,787,677 $ 4,999,769 $ 2,194,881 $ 1,375,026 $ 1,534,143 $ 1,862,952 $ 17,754,448
Peru 1,623,581 1,749,273 1,420,385 6,497,237 - - 11,290,476
Nicaragua 206,293 269,562 294,886 709,669 175,462 105,904 1,761,776
--------------------------------------------------------------------------------------
Total $ 7,617,551 $ 7,018,604 $ 3,910,152 $ 8,581,932 $ 1,709,605 $ 1,968,856 $ 30,806,700
--------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------
Interest
Payment 2016 2017 2018 2019 2020 Thereafter Total
------------------------------------------------------------------------------------
Corporate $ 1,255,330 $ 884,568 $ 617,030 $ 456,979 $ 297,863 $ 121,721 $ 3,633,491
Peru 757,025 803,426 595,615 213,110 - - 2,369,176
Nicaragua 127,301 156,560 120,440 92,985 24,205 6,675 528,166
------------------------------------------------------------------------------------
Total $ 2,139,656 $ 1,844,554 $ 1,333,085 $ 763,074 $ 322,068 $ 128,396 $ 6,530,833
------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------
Peru Update
Summary Peru First Quarter 2016 Consolidated P&L:
Below is our Peru profit / (loss) summary for the three months ended March
31, 2016 as compared with the same period of 2015. In summary, Peru revenue is
down by 14.7%, impacting property EBITDA despite aggressive efficiency programs
that have led to a material reduction of country-level operating expenses. See
notes on certain key items below.
-------------------------------------------------------------------------------
(In thousands)
Three months
ended
March 31,
---------------------
2016 2015 Variance % change
------------------------------------------
Net gaming wins $ 5,111 $ 5,656 $ (545 ) -9.6 %
Food and beverage sales 184 410 (226 ) -55.1 %
Hospitality and other sales 855 1,148 (293 ) -25.5 %
------------------------------------------
Total revenues 6,150 7,214 (1,064 ) -14.7 %
------------------------------------------
Promotional allowances 806 698 108 15.5 %
Property, marketing and
administration 4,141 5,015 (874 ) -17.4 %
------------------------------------------
Property EBITDA 1,203 1,501 (298 ) -19.9 %
------------------------------------------
Property EBITDA as a percentage of
revenues 19.6 % 20.8 %
Depreciation and amortization 570 756 (186 ) -24.6 %
Interest and financing costs, net 279 304 (25 ) -8.2 %
Management fee attributable to non-
controlling interest 2 (14 ) 16 -114.3 %
Foreign exchange (gain) / loss (156 ) 304 (460 ) -151.3 %
Other (gains) / losses (16 ) (121 ) 105 -86.8 %
------------------------------------------
Profit for the period from
continuing operations $ 524 $ 272 $ 252 92.6 %
------------------------------------------
-------------------------------------------------------------------------------
Forex: Under a currency neutral analysis (in which the same exchange rate would
be applied to both periods), Peru revenue would have reduced by $247 thousand or
3.9% and property EBITDA would have decreased by $128 thousand or 9.6%.
Profit for the period in Peru is $524 thousand (an improvement of approximately
$252 thousand as compared to 2015), which primarily is the result of
experiencing a Forex gain of $156 thousand.
Nicaragua Update
Summary Nicaragua First Quarter 2016 Consolidated P&L:
Below is our Nicaragua profit / (loss) summary for the three months ended March
31, 2016 as compared with the same period of 2015. In summary, Nicaragua revenue
is up on a USD basis (see "Forex" note below) and property EBITDA has increased
by 16.9% despite an increase in operating expenses. See notes on certain key
items below.
-------------------------------------------------------------------------------
(In thousands)
Three months
ended
March 31,
---------------------
2016 2015 Variance % change
------------------------------------------
Net gaming wins $ 3,030 $ 2,817 $ 213 7.6 %
Food and beverage sales 487 412 75 18.2 %
Hospitality and other sales 36 43 (7 ) -16.3 %
------------------------------------------
Total revenues 3,553 3,272 281 8.6 %
------------------------------------------
Promotional allowances 440 413 27 6.5 %
Property, marketing and
administration 2,643 2,457 186 7.6 %
------------------------------------------
Property EBITDA 470 402 68 16.9 %
------------------------------------------
Property EBITDA as a percentage of
revenues 13.2 % 12.3 %
Depreciation and amortization 188 148 40 27.0 %
Interest and financing costs, net 37 27 10 37.0 %
Management fee attributable to non-
controlling interest 9 - 9 0.0 %
Project development - 1 (1 ) -100.0 %
Foreign exchange (gain) / loss 40 47 (7 ) -14.9 %
Other (gains) / losses (1 ) - (1 ) 0.0 %
Income taxes 71 70 1 1.4 %
------------------------------------------
Profit for the period from
continuing operations $ 126 $ 109 $ 17 15.6 %
------------------------------------------
-------------------------------------------------------------------------------
Forex: Under a currency neutral analysis (in which the same exchange rate would
be applied to both periods), Nicaragua revenue would have grown by $437 thousand
or 14.0% and property EBITDA would have increased by $87 thousand or 22.7%.
Profit for the period in Nicaragua is $126 thousand (an increase of
approximately $17 thousand compared to 2015), despite higher depreciation and
financing costs related to the new Pharaohs Bolivar Casino.
Other Group Updates
In Q1 2016, the Group announced material events and entered into material
contracts as follows:
Temporary reduction of Officers' salaries: Effective January 1, 2016, Officers
collectively discounted the cash portion of their salaries by approximately
$50,000 per month in order to reserve cash. Officers agreed to do so until June
2016, at which time there would be an assessment of the needs of the Company on
a go-forward basis. Officers have reserved the right to collect unpaid
compensation either through stock at no less than $0.50 per share, or market
rate, if market rate is higher, or in cash against future liquidity events.
Resignation of Directors: Reto Stadelmann resigned his position as a board
member effective February 15, 2016. Albert W. Atallah also resigned as director
on February 15, 2016, but he retains his position as General Counsel.
Deferral of Unsecured Loans: The Group has reached an agreement with a series of
unsecured lenders to defer payments on their loans effective January 1, 2016
through June 30, 2016. The total principal balance of these deferred loans as of
January 1, 2016 was $8.4 million. Any and all interest that accrues during this
six-month period will be added to the principal balance effective June 30, 2016.
Settlement on loan obligation: As previously reported, the Group sold its
interests in its Guatemala gaming operations to a local "Guatemalan Group" which
later assigned the business to Fundacion Travelone Kids ("FTK") effective April
22, 2014. The sale of our interest of this negatively performing operation was
financed by the Group with a $2.0 million installment note. In 2014, the Group
wrote down the note due to non-payment caused by continued poor financial
results. Regardless, the Group continued efforts to collect. Effective April
1, 2016, a settlement was reached with FTK wherein FTK agreed to the following:
-- To pay Thunderbird Resorts Inc. $200 thousand in 24 equal monthly
installments.
-- If FTK defaults in the payments, then the original $2 million Promissory Note
dated April 22, 2014, and related documents would remain in full force and
effect. In that case, Thunderbird Resorts Inc. could avail itself to any and all
remedies provided therein.
-- In the alternative and to the extent that stipulated /consent judgments are
enforceable under Guatemala laws, Thunderbird Resorts Inc. is authorized to
enter judgment in its favor for $2 million plus all accrued unpaid interest due
as demanded in the complaint, less any sum paid on account, together with
interest, costs, disbursements and attorneys' fees.
Sale of Shares of Affiliate in Costa Rica: Thunderbird has completed the sale of
its 50% ownership in the shares of an affiliated company that in turn owns a
2.6-hectare parcel of land in Escazu, Costa Rica. The property was sold for
approximately $3.2 million and after the payment of taxes, fees and other sale
related costs (property was debt free), the net cash received for the Group's
50% share was approximately $1.5 million.
April 2016 Revenue Report: The Group's preliminary revenue report for April
2016 as compared with April 2015 is as follows:
+------------------------------+------+------+---------------------------------+
| | | |Year-over-year |
|Group-wide sales by country - | April| April| increase/ |
|(unaudited, in millions)(1) | 2016| 2015| (decrease) |
+------------------------------+------+------+---------------------------------+
|Peru(2) |$ 2.26|$ 2.20| 2.73 % |
| | | | |
|Nicaragua | 1.24| 1.08| 14.81 % |
+------------------------------+------+------+---------------------------------+
|Total Consolidated Operating | | | |
|Revenues |$ 3.50|$ 3.28| 6.71 % |
+------------------------------+------+------+---------------------------------+
(1) Revenues reported are based on monthly average exchange rates, are same
store and are in USD millions.
(2) Revenues are generated primarily from gaming, and secondarily from our
fully-owned Fiesta Hotel and from 2 hotels under management.
Forex: On a currency neutral basis, our revenues would have improved as follows:
-- Peru revenue for April 2016 as compared to April 2015 would have increased by
approximately $280 thousand or $14.14%.
-- Nicaragua revenue for April 2016 as compared to April 2015 would have
increased by approximately $210 thousand or $20.39%.
-- Total revenue for April 2016 as compared to April 2015 would have increased
by approximately $490 thousand or $16.28%.
For more detail on these developments, please visit www.thunderbirdresorts.com
to find our press releases dated January to April 2016.
Capital Resources and Liquidity
The Group measures its liquidity needs by:
-- Monitoring short-term obligations on a country-by-country and global,
consolidated basis, with short-term inflows and outflows forecasted for the
financial year, updated weekly.
-- Monitoring long-term, scheduled debt servicing payments.
-- Rolling forward 5-year cash flow models each month based on the financial
results year-to-date through the previous month.
The Group has the capacity to manage liquidity with different tools at its
disposal, including:
-- Raising of debt or equity capital at both the operations and Group levels.
-- Selling of non-strategic assets.
-- Restructuring or deferral of unsecured lenders.
-- Restructuring of salaries of key personnel.
-- Deferral or aging of accounts payables.
-- Cost management programs at both the operations and Group levels.
Based upon our current expectations, we anticipate that our available cash
balances, our cash flow from operations and available borrowing capacity under
our existing credit arrangements will be sufficient to fund our liquidity
requirements for at least 12 months from the filing date of our 2015 Annual
Report.
About the Group
Thunderbird Resorts Inc. (a British Virgin Islands company limited by shares,
with its registered office in Tortola, British Virgin Islands) is an
international provider of branded casino and hospitality services focused on
markets in Latin America.
As of March 31, 2016, we had: a) approximately 2,000 gaming positions; b)
ownership interests in 1 hotel with 66 rooms and managed 2 hotels with 163
rooms. In our operations, we have 1,406 valued employees, including 806 in Peru,
578 in Nicaragua and 22 elsewhere.
Our executive offices are located at Calle Alberto Navarro, El Cangrejo,
Apartado 0823-00514, Panama City, Panama. Our telephone number is (507)
223-1234. Our website is www.thunderbirdresorts.com.
Document Availability: Copies of the 2016 First Quarter Interim Management
Statement in the English language will be available at no cost at the Group's
website at www.thunderbirdresorts.com. Copies in the English language are
available at no cost at the Group's operational office in Panama and at the
offices of our local paying agent ING Commercial Banking, Paying Agency
Services, Location Code TRC 01.013, Foppingadreef 7, 1102 BD Amsterdam, the
Netherlands (tel: +31 20 563 6619, fax: +31 20 563 6959, email: iss.pas(at)ing.nl).
Copies are also available on SEDAR at www.SEDAR.com.
Cautionary Note with regard to "forward-looking statements"
This Interim Management Statement ("IMS") contains certain forward-looking
statements within the meaning of the securities laws and regulations of various
international, federal, and state jurisdictions. All statements, other than
statements of historical fact, included herein, including without limitation,
statements regarding potential sales and future plans and objectives of the
Thunderbird Resorts Inc. (the "Group" or the "Company") are forward-looking
statements that involve risk and uncertainties. There can be no assurances that
such statements will prove to be accurate and actual results could differ
materially from those anticipated in such statements. Important factors that
could cause actual results to differ materially from the Group's forward-looking
statements include competitive pressures, unfavorable changes in regulatory
structures, and general risks associated with business, all of which are
disclosed under the heading "Risk Factors" and elsewhere in the Group's
documents filed from time-to-time with the Euronext Amsterdam, the regulated
market of Euronext Amsterdam N.V. and with various Canadian Securities
commissions as well as other regulatory authorities.
Important information
This is Thunderbird Resorts Inc.'s Interim Management Statement for the three-
month period ended March 31, 2016. Thunderbird Resorts Inc. is a designated
foreign issuer with respect to Canadian securities regulations and this Interim
Management Statement is intended to comply with the rules and regulations for
the Euronext Amsterdam by Euronext Amsterdam, the regulated market of Euronext
Amsterdam N.V. and with Canadian securities laws.
No person has been authorized to give any information or to make any
representation other than those contained in this Interim Management Statement
and, if given or made, such information or representations must not be relied
upon as having been authorized by us. This Interim Management Statement does not
constitute an offer to sell or a solicitation of an offer to buy any securities.
The delivery of this Interim Management Statement shall not under any
circumstances, create any implication that there has been no change in our
affairs or that information contained herein is correct as of any time
subsequent to the date hereof.
Thunderbird Resorts Inc. accepts responsibility for the information contained in
this Interim Management Statement. To the best of our knowledge and belief
(having taken all reasonable care to ensure that such is the case), the
information contained in this Interim Management Statement is in accordance with
the facts and does not omit anything likely to affect the import of such
information.
The information included in this Interim Management Statement reflects our
position at the date of this Interim Management Statement and under no
circumstances should the issue and distribution of this Interim Management
Statement after the date of its publication be interpreted as implying that the
information included herein will continue to be correct and complete at any
later date.
Thunderbird Resorts Inc. has adopted the U.S. Dollar ("USD") as its reporting
currency. As required by EU regulation, Thunderbird Resorts Inc.'s annual
consolidated financial statements have been prepared in accordance with
international financial reporting standards ("IFRS") and interim financial
statements IAS 34.
Contacts:
For questions: Thunderbird Resorts Inc.
Peter LeSar
Chief Financial Officer
plesar(at)thunderbirdresorts.com
www.thunderbirdresorts.com
This announcement is distributed by GlobeNewswire on behalf of
GlobeNewswire clients. The owner of this announcement warrants that:
(i) the releases contained herein are protected by copyright and
other applicable laws; and
(ii) they are solely responsible for the content, accuracy and
originality of the information contained therein.
Source: Thunderbird Resorts Inc. via GlobeNewswire
[HUG#2015225]
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