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FOR FURTHER INFORMATION PLEASE CONTACT:
International Thunderbird Gaming Corporation
Investor Relations
(619) 451-3637 or 1-888-451-3637
email: info@intltbird.com
website: www.intltbird.com
--------------------------------------------------------------------------------
NEWS RELEASE TRANSMITTED BY CANADIAN CORPORATE NEWS
FOR: INTERNATIONAL THUNDERBIRD GAMING CORPORATION
TSE, VSE SYMBOL: INB
AUGUST 17, 1998
International Thunderbird Gaming Corporation Announces
Second Quarter Results
SAN DIEGO, CALIFORNIA--International Thunderbird Gaming
Corporation (TSE and VSE - INB) announces the Company's operating
results for the second quarter ended June 30, 1998. Subsequent
events and updates were reported in the previous press releases.
The Company's operating results for the second quarter ended June
30, 1998 reflect the continued uncertainty caused by the Pala
Tribe Gaming Compact, significant corporate reorganization costs,
and changes to the South Carolina gaming laws combined with the
costs of continued international expansion.
Total revenues for the six months ended June 30, 1998 were $11.5
million compared to $15.7 million from the same period in 1997.
Net income for the first half of this year was ($3.8) million
compared to $3.1 million for the same period in 1997. Fully
diluted earnings per share were ($0.13) compared to $0.13 for the
first six months of 1997.
On July 20, 1998, John C. Drake resigned as a director of the
Company.
At the time of this release, only one of the California Indian
Tribes with which the Company does a small amount of business
elected to sign the "Pala-type" compact.
An increasing number of California Tribes are signing on to the
"Pala-type" compact. This appears to be a tactic to gain
operating time for either a new more sympathetic governor (Pete
Wilson is term limited out) or passage of a favorable initiative
that has successfully been qualified for the ballot. It seems
clear that the legal environment will stay murky until the first
quarter of next year. Therefore, the Company will not rely on any
improvement in the California situation for the remainder of this
year.
The South Carolina Supreme Court has still not made a decision in
a class action lawsuit against the gaming industry to ban video
poker considering such machines as lottery devices, which are
illegal in the State. On July 1, 1998, the South Carolina State
Department of Revenue started the process of notifying almost
12,000 holders of beer and wine permits that they can no longer
allow gambling, specifically video poker on their premises. The
current governor, legislature, and attorney general have expressed
opposition to the video poker industry in South Carolina. We
believe the future political and judicial risks do not justify
further investment and have begun to liquidate our limited
operations in South Carolina.
We have completed the closing of our assembly plant and are
continuing to liquidate excess inventory. The Company will
continue with its plans to exit the competitive machine and casino
products sales business.
The Company's signage subsidiary, Calsino, Inc. has shown a steady
increase in new orders, including a new order for a sign package
to the Isleta Tribe in New Mexico. Calsino also continues to make
significant inroads to securing national commercial accounts and
is currently building signs for Kinko's, Z-teca Mexican Grill,
Einstein Bagels, and Spin Cycle.
The Management will continue to focus efforts on its casino
operations division. The foundation currently being created
should enable long term profitability.
$2.75 million of financing has been arranged for the Panama casino
remodeling and startup. We have successfully recruited and
trained approximately 400 employees to open and operate the
casinos in Panama. Three of the new Panama casinos are scheduled
to open the end of August, 1998.
The Guatemala location of 254 machines has won all of its legal
challenges and is operating at profitable levels. Contracts with
the lottery commissions of El Salvador and Nicaragua are being
negotiated for testing of a similar video lottery product. It is
anticipated that financing will be through local joint venture
partners.
A copy of the quarterly report will be provided to each security
holder who requests it. Additional information about the Company
is available on its World Wide Web site at www.intltbird.com .
Summary consolidated financial statements of the Company follow.
On behalf of the Board of Directors,
Jack R. Mitchell,
President and CEO
Cautionary Notice: This release contains forward-looking
statements reflecting the Company's expectations or beliefs
concerning future events which could materially affect Company
performance in the future. The Company cautions that these and
similar statements involve risk and uncertainties and are
qualified by important factors, including competitive pressures,
unfavorable changes in regulatory structures, and general risks
associated with business, which could cause actual results to
differ materially from those in the forward looking statement.
Forward-looking statements are made in the context of information
available as of the date stated. The Company undertakes no
obligations to update or revise such statements to reflect new
circumstances or unanticipated events as they occur.
/T/
Consolidated Balance Sheets
June 30, 1998 and 1997
[Unaudited - Prepared by Management]
1998 1997
------------------------------------------------------------
Assets
Current assets
Cash $ 2,736,000 $6,455,000
Accounts receivable 2,216,000 6,246,000
Inventories and
prepaid expenses 8,757,000 10,350,000
Current portion of
loans receivable 962,000 2,162,000
------------------------------------------------------------
14,671,000 25,213,000
Loans receivable 1,866,000 2,944,000
Capital assets 10,295,000 11,925,000
Other assets 2,390,000 1,584,000
Panama gaming license,
project development 7,258,000 -
Deferred income taxes - 515,000
Goodwill, net of
accumulated amortization 1,410,000 5,598,000
-----------------------------------------------------------
$37,890,000 $47,779,000
-----------------------------------------------------------
Liabilities and Shareholders' Equity
Current liabilities
Accounts payable and
accrued liabilities $6,246,000 $3,843,000
Current portion of capital
lease obligations 99,000 34,000
Loans payable 4,396,000 -
Income taxes payable 349,000 660,000
-----------------------------------------------------------
11,090,000 4,537,000
Capital lease obligations 266,000 72,000
Loans payable 5,263,000 -
Convertible debentures 292,000 567,000
Non-controlling interest
in subsidiary - 292 000
------------------------------------------------------------
16,911,000 5,468,000
Shareholders' equity
Share capital 29,929,000 29,813,000
Retained earnings (11,227,000) 12,096,000
Foreign exchange adjustment 2,277,000 402,000
------------------------------------------------------------
20,979,000 42,311,000
------------------------------------------------------------
$37,890,000 $47,779,000
-----------------------------------------------------------
Consolidated Statements of Operations and Retained Earnings
Six months ended June 30, 1998 and 1997
[Unaudited - Prepared by Management]
1998 1997
Revenue
Product sales $1,473,000 $2,849,000
Gaminq operations 10,035,000 12,902,000
-------------------------------
11,508,000 15,751,000
Costs and expenses
Product sales 1,408,000 2,774,000
Gaming operations 1,987,000 1,239,000
-------------------------------
3,395,000 4,013,000
Gross profit 8,113,000 11,738,000
Expenses
General and administrative 9,035,000 4,488,000
Depreciation and amortization 2,149,000 2,834,000
-------------------------------
11,184,000 7,322,000
Earnings from operations (3,071,000) 4,416,000
Financing costs 473,000 59,000
-------------------------------
Earnings before income taxes (3,544,000) 4,357,000
Income taxes
Current 267,000 721,000
Deferred - 571,000
-------------------------------
267,000 1,292,000
Net income (3,811,000) 3,065,000
Retained earnings (deficit),
beginning of period (7,416,000) 9,031,000
-------------------------------
Retained earnings (deficit),
end of period $(11,227,000) $12,096,000
-------------------------------
Basic earnings per share $ (0.16) $ 0.13
-------------------------------
Fully diluted earnings $ (0.13) $ 0.13
per share
Consolidated Statements of Changes in Financial Position
Six months ended June 30, 1998 and 1997
[Unaudited - Prepared by Management]
1998 1997
Cash provided by (applied to):
Operations
Net income for the period $(3,811,000) $3,065,000
Items not involving cash:
Depreciation and
Amortization 2,149,000 2,834,000
Deferred income taxes - 571,000
Write off of fixed assets 1,113,000
Other (27,000) (554,000)
Net change in non-cash working
capital items
Accounts receivable 3,206,000 (2,047,000)
Inventories and prepaid
expenses 653,000 (1,618,000)
Accounts payable and accrued
liabilities (180,000) (85,000)
Income taxes payable 12,000 1,362,000
-------------------------------
3,115,000 804,000
Financing
Net proceeds from issuance
of common shares - (1,028,000)
Repurchase and cancellation
of treasury stock (229,000)
Loans payable 6,932,000 1,970,000
Repayment of loans and
leases payable (652,000)
Other (75,000)
-------------------------------
6,051,000 867,000
Investments
Loans receivable, net 45,000 628,000
Expenditures on capital
assets (3,241,000) (2,038,000)
Deferred costs (2,425,000)
Investment in Winstreak
Incorporated - (509,000)
Investment in casinos
(Panama) (5,172,000)
Other 135,000
-------------------------------
(10,793,000) (1,784,000)
Increase (decrease)in cash (1,627,000) (113,000)
Effect of foreign exchange
adjustment 631,000 (46,000)
Cash, beginning of period 3,732,000 6,614,000
-------------------------------
Cash, end of period $2,736,000 $6,455,OOO
/T/
-30-
--------------------------------------------------------------------------------
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