Press Release: International Thunderbird Gaming Corporation
August 20, 2002
SAN DIEGO, CA -- International Thunderbird Gaming Corporation (TSX:INB) announces its financial results for the
second quarter ended June 30, 2002. All figures are in US dollars.
For the three months ended June 30, 2002, gaming revenues reached $4,511,000 an increase of 19.4% compared to 2001
revenues of $3,777,000. The Company's 50% stake in Panama's revenues improved from $3,043,000 in 2001 to $3,663,000
for the same period in 2002. Nicaragua's revenues improved from $354,000 in 2001 to $485,000 for the same period
in 2002. The Company's equity interests in its skill machine locations in Mexico, which are not consolidated for
financial statement reporting purposes, achieved revenue of $244,000 in the second quarter of 2001 compared to
$nil in the second quarter of 2002. The Company's 30% stake in Venezuela, which is not consolidated for financial
statement reporting purposes, achieved revenue of $nil in 2001 compared to $419,000 in the second quarter of 2002.
Thunderbird recorded a loss in the quarter of $121,000 or $0.01 per share compared with a loss of $1,054,000 or
$0.04 per share in the second quarter of 2001. The 2001 financial statements for the period were adversely affected
by $385,000 of non-recurring expenses, including $88,000 of termination fees to Provident Group, $70,000 to our
lawyers who acted against the California tribe from whom the Company collected $500,000, $120,000 in non-cash machine
write offs and $107,000 of other non-recurring General and Administrative expenses. In addition, the Company incurred
a $396,000 equity loss in equity investments.
The breakdown of this loss was $298,000 associated with Venezuela and $98,000 associated with Mexico.
The Company achieved EBITDA (Earnings Before Interest, Taxes, Depreciation and Amortization) for the three-month
period ended June 30 of $803,000 compared to ($208,000) for the same period in 2001.
For the six months ended June 30, 2002, gaming revenues reached $8,961,000 an increase of 15.8% compared to 2001
revenues of $7,736,000. The Company's 50% stake in Panama's revenues improved from $6,490,000 in 2001 to $7,200,000
for the same period in 2002. Nicaragua's revenues improved from $398,000 in 2001 to $1,001,000 for the same period
in 2002. The Company's equity interests in its skill machine locations in Mexico, which are not consolidated for
financial statement reporting purposes, achieved revenue of $429,000 for the period in 2001 compared to $19,000
for the same period in 2002. The Company's 30% stake in Venezuela, which is not consolidated for financial statement
reporting purposes, achieved revenue of $nil in 2001 compared to $997,000 for the same period in 2002.
Thunderbird recorded a loss for the six months of $71,000 or $nil per share compared with a loss of $1,503,000
or $0.06 per share in the first six months of 2001. The 2001 financial statements for the period were adversely
affected by $385,000 of non-recurring expenses, including $88,000 of termination fees to Provident Group, $70,000
to our lawyers who acted against the California tribe from whom the Company collected $500,000, $120,000 in non-cash
machine write offs and $107,000 of other non-recurring General and Administrative expenses. In addition, the Company
incurred a $513,000 equity loss in equity investments.
The breakdown of this loss was $401,000 associated with Venezuela and $112,000 associated with Mexico. The first
six months of 2001 were also adversely affected by $283,000 of development expense incurred in association with
the opening of the casino in Nicaragua.
Year to date the Company has achieved EBITDA of $1,826,000 compare to $273,000 for the same period in 2001.
The Company previously reported that its 2001 year end financial statements, as well as its 1st quarter financial
statements, were prepared on the basis of accounting principles applicable to a going concern, which assumes the
realization of assets and liabilities in the normal course of business, and that the application of the going concern
concept is dependent on the Company's ability to generate future profitable operations. The Company's continued
losses from its investments in Venezuela and Nicaragua, as well as the lack of recovery of certain receivables,
continues to be the Company's major challenges. The unstable political climate and devaluation have seriously affected
our revenue. Ironically, our business in Venezuela is relatively stable with some decline in activity due to the
political unrest, but when we convert Bolivares to U.S. dollars, we lose approximately 50% on the exchange rate.
The exchange rate at December 2001 was 769 Bolivares to 1 U.S. dollar and the current exchange rate is 1,375 Bolivares
to 1 U.S. dollar.
These challenges can be overcome if (a) the Company's major creditors are willing to enter into "work-outs"
with the company; (b) the company succeeds in renewing its concession in Guatemala; and (c) the Company is successful
in recovering various receivables.
Workout With Certain Creditors: The Company has not been able to meet its debt obligations. Prime Receivables,
one of two major creditors, has served the Company with a default notice. The balance owing on the Prime loan is
approximately $700,000. Although the Company has remained current with its payments to MRG Entertainment, the default
on the Prime loan has placed the Company in a "cross-default" position with respect to its $2,200,000
in loans owed to MRG Entertainment. These loans are now reflected as current liabilities on the company's consolidated
balance sheet, which has an adverse effect on the company's working capital deficiency. The Company has been successful
in negotiating work-outs with various creditors (including Prime Receivables) in the past.
Guatemala Arbitration: In Guatemala, the Company continues to wait for the arbitrator's ruling stemming from the
claim that ILAC owes the Company approximately $620,000. In addition, the proceeding includes a claim that Thunderbird's
contract should be extended past the 5-year contract date (October 1997) because operations did not commence until
February 1998. The Company remains confident that the arbitrator will render a fair reward. The Company believes
the results of the arbitration will have an effect on the renewal of the contract. The Company expects a decision
from the arbitrator within the next 30 days, although there have been several delays in the rendering of an award.
Recovery of Various Receivables. The Company previously reported that it had entered into a $750,000 settlement
with a California tribe. That tribe began making payments of approximately $25,000 per month for 36 months. The
Company continues to pursue a lump sum payment from the tribe in lieu of the monthly payments. The Company is also
pursuing several other receivables stemming from discontinued operations, the most significant of which is the
NAFTA claim against the Mexico government. The Company intends to file and serve the Mexican Government with its
"NAFTA Claim" by August 23, 2002.
International Thunderbird Gaming Corporation is an owner and manager of international gaming facilities. Additional
information about the Company is available on its World Wide Web site at www.thunderbirdgaming.com
On behalf of the Board of Directors,
Jack R. Mitchell, President and CEO
Cautionary Notice: This release contains certain forward-looking statements within the meaning of section 21E of
the United States Securities Exchange Act of 1934, as amended. All statements, other than statements of historical
fact, included herein, including without limitation, statements regarding potential revenue and future plans and
objectives of 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 Company'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 Company's
documents filed from time-to-time with the TSE and other regulatory authorities.
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Contact:
International Thunderbird Gaming Corporation
Albert Atallah, 858/451-3637
858/451-1169 (FAX)
Email: info@thunderbirdgaming.com
Website: www.thunderbirdgaming.com