Thunderbird Resorts 2017
Half-Year (Semi-Annual) Report Filed
ZURICH, Switzerland, Sept. 30, 2017 (GLOBE
NEWSWIRE) -- Thunderbird Resorts Inc.
("Thunderbird") (FSE:4TR) (Euronext:TBIRD) is pleased to
announce that its 2017 Half-year Report and Unaudited Consolidated
Financial Statements have been filed with the Euronext ("Euronext
Amsterdam") and the Netherlands Authority for Financial Markets
("AFM"). As a Designated Foreign Issuer with respect to
Canadian securities regulations, the Half Year/Semi-Annual Report
is intended to comply with the rules and regulations set forth by
the AFM and the Euronext Amsterdam.
Copies of the 2017 Half Year Report and Unaudited
Consolidated Financial Statements Report 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@ing.nl). Copies are also available on
SEDAR at www.SEDAR.com.
Below are certain material excerpts from the full
2017 Semi-Annual Report the entirety of which can be found on our
website at www.thunderbirdresorts.com.
Letter from the CEO
Dear Shareholders and
Investors:
Below is an update that summarizes the Group's
performance and progress through June 30, 2017.
1. PERFORMANCE IN ACCORDANCE WITH
our previously-stated goals1
A. Increase our
EBITDA2: Adjusted
EBITDA (after deducting Corporate-level expenses) increased by $580
thousand as compared to through half-year 2016.
B. Improve our Profit /
(Loss): Our Loss from Continuing Operations improved by $220
thousand and, netting out extraordinary gains in half-year 2016,
the improvement would have been $840 thousand.
C. Increase our Net
Debt: Net debt3 increased
by $744 thousand as compared to year-end December 31, 2016.
The Group refinanced its Peru debt, adding debt that it is now
using to reduce costs and improve cash flow at the Peru
level. The results of these efforts should be reflected in
the coming quarters. We also refinanced and added working
capital debt at the corporate level.
2. PERFORMANCE ON ASSET
SALES
In our September 21, 2016 Annual General and
Special Shareholders' Meeting, shareholders approved Special
Resolutions that authorized the Board of Directors to sell "any or
all remaining assets of the Corporation in such amounts and at such
times as determined by the Board of Directors".
The Group has been negotiating the sale of a
substantial portion of its assets to a qualified third party
purchaser on an exclusive basis over the past several months.
The transaction has not yet been consummated, though definitive
agreements are nearly finalized. Should the parties not reach
definitive agreements in the coming weeks, the Group will endeavor
to sell these assets to other prospective purchasers. The
Group has been approached by several other qualified groups to
pursue the acquisition of a similar asset mix. We will
continue to pursue a transaction(s) that will support the best
interest of shareholders according to the shareholder mandate set
forth in the September 21, 2016 Special Resolutions.
We will keep you informed of any material events
and progress as further developments take place.
Salomon Guggenheim
Chief Executive Officer and President
September 30, 2017
1. Unless
otherwise stated, all figures reported herein are in USD and report
the results of those businesses that were continuing as of June 30,
2017 as compared to those same businesses through the twelve months
ended June 30, 2016. 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. Net
debt equals total borrowings and finance lease obligations less
cash, cash equivalents and other liquid assets.
Group Overview for Half-year 2017
Below is our consolidated profit / (loss) summary
for the six months ended June 30, 2017 as compared with the same
period of 2016.
(In
thousands) |
|
|
|
|
|
Six months ended |
|
|
|
June 30 |
|
% |
|
2017 |
2016 |
Variance |
change |
Net gaming wins |
$ |
15,198 |
|
$ |
16,124 |
|
$ |
(926 |
) |
-5.7 |
% |
Food and beverage
sales |
|
1,282 |
|
|
1,429 |
|
|
(147 |
) |
-10.3 |
% |
Hospitality and other
sales |
|
1,532 |
|
|
1,923 |
|
|
(391 |
) |
-20.3 |
% |
Total
revenues |
|
18,012 |
|
|
19,476 |
|
|
(1,464 |
) |
-7.5 |
% |
|
|
|
|
|
Promotional
allowances |
|
2,326 |
|
|
2,474 |
|
|
(148 |
) |
-6.0 |
% |
Property, marketing
and administration |
|
12,645 |
|
|
13,777 |
|
|
(1,132 |
) |
-8.2 |
% |
Property EBITDA |
|
3,041 |
|
|
3,225 |
|
|
(184 |
) |
-5.7 |
% |
Corporate
Expenses |
|
959 |
|
|
1,723 |
|
|
(764 |
) |
-44.3 |
% |
Adjusted EBITDA |
|
2,082 |
|
|
1,502 |
|
|
580 |
|
38.6 |
% |
|
|
|
|
|
Property EBITDA as a
percentage of revenues |
|
11.6 |
% |
|
7.7 |
% |
|
|
Depreciation and
amortization |
|
1,561 |
|
|
1,514 |
|
|
47 |
|
3.1 |
% |
Interest and financing
costs, net |
|
1,659 |
|
|
1,697 |
|
|
(38 |
) |
-2.2 |
% |
Management fee
attributable to non-controlling interest |
|
1 |
|
|
2 |
|
|
(1 |
) |
-50.0 |
% |
Foreign exchange
loss |
|
29 |
|
|
294 |
|
|
(265 |
) |
-90.1 |
% |
Other gains |
|
(98 |
) |
|
(716 |
) |
|
618 |
|
-86.3 |
% |
Income taxes |
|
142 |
|
|
143 |
|
|
(1 |
) |
-0.7 |
% |
Loss
for the period from continuing operations |
$ |
(1,212 |
) |
$ |
(1,432 |
) |
$ |
220 |
|
-15.4 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Group debt: Below is the Group's Gross debt and
Net debt on June 30, 2017.
(In
thousands) |
|
|
|
Jun-17 |
Dec-16 |
Borrowings |
$ |
31,940 |
|
$ |
28,504 |
Obligations under
leases and hire purchase contracts |
|
466 |
|
|
812 |
|
|
|
Gross
Debt |
$ |
32,406 |
|
$ |
29,316 |
|
|
|
|
|
|
Less: cash and cash
equivalents (excludes restricted cash) |
|
3,864 |
|
|
1,519 |
Net
Debt |
$ |
28,542 |
|
$ |
27,798 |
|
|
|
|
|
|
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 $186 thousand variance with the total principal balance
below.
The Group estimates its debt schedule as follows
starting in July 2017:
|
|
|
|
|
|
|
|
|
Princi
pal
Balance |
2017 |
2018 |
2019 |
2020 |
2021 |
2022 |
There-
after |
Total |
Corp
orate |
$ |
10,710,
505 |
|
$ |
4,388,
847 |
|
$ |
1,375,026 |
|
$ |
1,534,143 |
|
$ |
1,711,672 |
|
$ |
151,280 |
|
$ |
- |
|
$ |
19,871,
473 |
Peru |
|
586,661 |
|
|
1,461,
586 |
|
|
1,177,530 |
|
|
1,268,806 |
|
|
1,372,502 |
|
|
1,485,770 |
|
|
4,115,910 |
|
|
11,468,
765 |
Nicar
agua |
|
198,354 |
|
|
430,681 |
|
|
632,009 |
|
|
181,386 |
|
|
14,963 |
|
|
- |
|
|
- |
|
|
1,457,
393 |
Total |
$ |
11,495,
520 |
|
$ |
6,281,
114 |
|
$ |
3,184,565 |
|
$ |
2,984,335 |
|
$ |
3,099,137 |
|
$ |
1,637,050 |
|
$ |
4,115,910 |
|
$ |
32,797,
631 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest
Expense |
2017 |
2018 |
2019 |
2020 |
2021 |
2022 |
There-
after |
Total |
Corp
orate |
$ |
517,917 |
|
$ |
748,855 |
|
$ |
456,979 |
|
$ |
297,863 |
|
$ |
120,334 |
|
$ |
1,387 |
|
$ |
- |
|
$ |
2,143,335 |
Peru |
|
450,866 |
|
|
793,803 |
|
|
704,805 |
|
|
611,679 |
|
|
505,449 |
|
|
392,181 |
|
|
422,471 |
|
|
3,881,254 |
Nicar
agua |
|
72,624 |
|
|
111,273 |
|
|
65,807 |
|
|
13,049 |
|
|
311 |
|
|
- |
|
|
- |
|
|
263,064 |
Total |
$ |
1,041,407 |
|
$ |
1,653,931 |
|
$ |
1,227,591 |
|
$ |
922,591 |
|
$ |
626,094 |
|
$ |
393,568 |
|
$ |
422,471 |
|
$ |
6,287,653 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interim Consolidated Financial Statements
Financial Statements
THUNDERBIRD RESORTS
INC.
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
(Expressed in thousands of United States dollars)
As of June 30, 2017 and December 31, 2016
|
|
|
|
|
|
|
|
|
June 30, 2017 |
|
December 31,
2016 |
|
|
|
|
Assets |
|
|
|
|
|
|
|
Non-current assets |
|
|
|
Property, plant and
equipment (Note 7) |
$ |
20,693 |
|
$ |
21,456 |
Investment accounted
for using the equity method (Note 16) |
|
2,586 |
|
|
2,758 |
Intangible assets |
|
5,867 |
|
|
5,912 |
Deferred tax
assets |
|
192 |
|
|
185 |
Trade and other
receivables |
|
1,440 |
|
|
1,566 |
Due from related
parties (Note 13) |
|
42 |
|
|
42 |
Total non-current
assets |
|
30,820 |
|
|
31,919 |
|
|
|
|
Current assets |
|
|
|
Trade and other
receivables |
|
966 |
|
|
792 |
Due from related
parties (Note 13) |
|
1,827 |
|
|
1,804 |
Inventories |
|
589 |
|
|
480 |
Restricted cash |
|
1,716 |
|
|
1,348 |
Cash and cash
equivalents |
|
3,864 |
|
|
1,519 |
Total current
assets |
|
8,962 |
|
|
5,943 |
|
|
|
|
Total
assets |
$ |
39,782 |
|
$ |
37,862 |
|
|
|
|
|
|
|
|
- Continued
-
The accompanying notes in the full
Semi-annual report are an integral part of
These interim consolidated financial statements.
THUNDERBIRD RESORTS
INC.
CONSOLIDATED STATEMENT OF FINANCIAL POSITION (continued)
(Expressed in thousands of United States dollars)
As of June 30, 2017 and December 31, 2016
|
|
|
|
|
|
|
|
|
June 30, 2017 |
|
December 31,
2016 |
|
|
|
|
Equity and liabilities |
|
|
|
|
|
|
|
Capital and reserves |
|
|
|
Share capital (Note
11) |
|
110,611 |
|
|
|
110,563 |
|
Retained earnings |
|
(113,341 |
) |
|
|
(111,676 |
) |
Translation
reserve |
|
(5,459 |
) |
|
|
(5,429 |
) |
Equity attributable to
equity holders of the parent |
|
(8,189 |
) |
|
|
(6,542 |
) |
Non-controlling
interest |
|
2,634 |
|
|
|
2,266 |
|
Total equity |
|
(5,555 |
) |
|
|
(4,276 |
) |
|
|
|
|
Non-current liabilities |
|
|
|
Borrowings (Note
9) |
|
16,147 |
|
|
|
16,005 |
|
Obligations under
leases and hire purchase contracts (Note 10) |
|
8 |
|
|
|
10 |
|
Deferred tax
liabilities |
|
20 |
|
|
|
21 |
|
Provisions |
|
1,727 |
|
|
|
1,688 |
|
Trade and other
payables |
|
464 |
|
|
|
356 |
|
Total non-current
liabilities |
|
18,366 |
|
|
|
18,080 |
|
|
|
|
|
Current liabilities |
|
|
|
Trade and other
payables |
|
7,928 |
|
|
|
7,633 |
|
Due to related parties
(Note 13) |
|
1,480 |
|
|
|
1,301 |
|
Borrowings (Note
9) |
|
15,793 |
|
|
|
12,499 |
|
Obligations under
leases and hire purchase contracts (Note 10) |
|
458 |
|
|
|
802 |
|
Other financial
liabilities |
|
527 |
|
|
|
419 |
|
Current tax
liabilities |
|
(31 |
) |
|
|
442 |
|
Provisions |
|
816 |
|
|
|
962 |
|
Total current
liabilities |
|
26,971 |
|
|
|
24,058 |
|
|
|
|
|
Total liabilities |
|
45,337 |
|
|
|
42,138 |
|
|
|
|
|
Total
equity and liabilities |
$ |
39,782 |
|
|
$ |
37,862 |
|
|
|
|
|
|
|
|
|
|
|
|
|
THUNDERBIRD RESORTS,
INC.
CONSOLIDATED STATEMENT OF COMPREHENSIVE
INCOME
(Expressed in thousands of United States dollars)
For the six months ended June 30, 2017
|
|
|
|
|
Six months ended |
|
June 30 (unaudited) |
|
2017 |
|
2016 |
|
|
|
|
Net gaming wins |
$ |
15,198 |
|
|
$ |
16,124 |
|
Food, beverage and
hospitality sales |
|
2,814 |
|
|
|
3,352 |
|
Total
revenue |
|
18,012 |
|
|
|
19,476 |
|
|
|
|
|
Cost of goods
sold |
|
(7,114 |
) |
|
|
(7,965 |
) |
Gross
profit |
|
10,898 |
|
|
|
11,511 |
|
|
|
|
|
Other
operating costs |
|
|
|
Operating, general and administrative |
|
(8,817 |
) |
|
|
(10,011 |
) |
Depreciation and amortization |
|
(1,561 |
) |
|
|
(1,514 |
) |
Other
gains and (losses) (Note 5) |
|
98 |
|
|
|
716 |
|
Operating profit |
|
618 |
|
|
|
702 |
|
|
|
|
|
Share of loss from
equity accounted investments (Note 16) |
|
(84 |
) |
|
|
(57 |
) |
|
|
|
|
Financing |
|
|
|
Foreign exchange loss |
|
(29 |
) |
|
|
(294 |
) |
Financing costs (Note 6) |
|
(1,747 |
) |
|
|
(1,765 |
) |
Financing income (Note 6) |
|
96 |
|
|
|
75 |
|
Other
interest (Note 6) |
|
(8 |
) |
|
|
(7 |
) |
Finance costs,
net |
|
(1,688 |
) |
|
|
(1,991 |
) |
|
|
|
|
Loss
before tax |
|
(1,154 |
) |
|
|
(1,346 |
) |
|
|
|
|
Income taxes expense |
|
|
|
Current |
|
(142 |
) |
|
|
(143 |
) |
Deferred |
|
- |
|
|
|
- |
|
Income tax
expense |
|
(142 |
) |
|
|
(143 |
) |
|
|
|
|
Loss
for the year from continuing operations |
$ |
(1,296 |
) |
|
$ |
(1,489 |
) |
|
|
|
|
Loss for the year from
discontinued operations (Note 8) |
|
- |
|
|
|
(261 |
) |
|
|
|
|
Loss
for the year |
$ |
(1,296 |
) |
|
$ |
(1,750 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
-continued-
THUNDERBIRD RESORTS,
INC.
CONSOLIDATED STATEMENT OF COMPREHENSIVE
INCOME (continued)
(Expressed in thousands of United States dollars)
For the six months ended June 30, 2017
|
|
|
|
|
Six months ended |
|
June 30 (audited) |
|
2017 |
|
2016 |
|
|
|
|
Other
comprehensive income (amounts, which will be recycled) |
|
|
|
|
|
Exchange differences
arising on the translation of foreign operations |
$ |
(30 |
) |
|
$ |
405 |
|
|
|
|
|
|
|
|
|
Other
comprehensive income for the year |
|
(30 |
) |
|
|
405 |
|
|
|
|
|
Total
comprehensive income for the year |
$ |
(1,326 |
) |
|
$ |
(1,345 |
) |
|
|
|
|
Gain
/ (loss) for the year attributable to: |
|
|
|
Owners of the
parent |
|
(1,665 |
) |
|
|
(1,878 |
) |
Non-controlling
interest |
|
369 |
|
|
|
128 |
|
|
$ |
(1,296 |
) |
|
$ |
(1,750 |
) |
|
|
|
|
Total
comprehensive income attributable to: |
|
|
|
Owners of the
parent |
|
(1,695 |
) |
|
|
(1,473 |
) |
Non-controlling
interest |
|
369 |
|
|
|
128 |
|
|
$ |
(1,326 |
) |
|
$ |
(1,345 |
) |
|
|
|
|
Basic
and diluted loss per share (in $): (Note 12) |
|
|
|
Loss from continuing
operations |
|
(0.07 |
) |
|
|
(0.07 |
) |
Loss from
discountinued operations |
|
- |
|
|
|
(0.01 |
) |
Total |
|
(0.07 |
) |
|
|
(0.08 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
THUNDERBIRD RESORTS,
INC.
CONSOLIDATED STATEMENT OF CHANGES IN
EQUITY
(Expressed in thousands of United States dollars)
For the six months ended June 30, 2017
|
|
|
Attributable to equity holders of parent |
|
Share
capital |
Share
options
reserve |
Currency
translation
reserve |
Retained
earnings |
Total |
Non-
controlling
interest |
Total
equity |
Balance at January 1, 2017 |
$ |
110,456 |
|
$ |
89 |
|
|
$ |
(5,209 |
) |
|
$ |
(104,633 |
) |
|
$ |
703 |
|
|
$ |
1,911 |
|
$ |
2,614 |
|
|
|
|
|
|
|
|
|
Transactions with owners: |
|
|
|
|
|
|
|
Issue of new
shares |
|
48 |
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
48 |
|
|
|
- |
|
|
48 |
|
|
|
|
|
|
|
|
|
|
$ |
48 |
|
$ |
- |
|
|
$ |
- |
|
|
$ |
- |
|
|
$ |
48 |
|
|
$ |
- |
|
$ |
48 |
|
|
|
|
|
|
|
|
|
Profit / (loss) for
the year |
|
- |
|
|
- |
|
|
|
- |
|
|
|
(1,878 |
) |
|
|
(1,878 |
) |
|
|
127 |
|
|
(1,751 |
) |
|
|
|
|
|
|
|
|
Other
comprehensive income |
|
|
|
|
|
|
|
Exchange differences
arising on |
|
|
|
|
|
|
|
translation of foreign
operations |
|
- |
|
|
- |
|
|
|
405 |
|
|
|
- |
|
|
|
405 |
|
|
|
- |
|
|
405 |
|
Total comprehensive
income for the year |
|
- |
|
|
- |
|
|
|
405 |
|
|
|
(1,878 |
) |
|
|
(1,473 |
) |
|
|
127 |
|
|
(1,346 |
) |
|
|
|
|
|
|
|
|
Balance at June 30, 2017 |
$ |
110,504 |
|
$ |
89 |
|
|
$ |
(4,804 |
) |
|
$ |
(106,511 |
) |
|
$ |
(722 |
) |
|
$ |
2,038 |
|
$ |
1,316 |
|
|
|
|
|
|
|
|
|
Transactions with owners: |
|
|
|
|
|
|
|
Issue of new
shares |
|
59 |
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
59 |
|
|
|
- |
|
|
59 |
|
Options cancellation
and expiration |
|
- |
|
|
(89 |
) |
|
|
- |
|
|
|
89 |
|
|
|
- |
|
|
|
- |
|
|
- |
|
|
|
|
|
|
|
|
|
|
$ |
59 |
|
$ |
(89 |
) |
|
$ |
- |
|
|
$ |
89 |
|
|
$ |
59 |
|
|
$ |
- |
|
$ |
59 |
|
|
|
|
|
|
|
|
|
Profit / (loss) for
the year |
|
- |
|
|
- |
|
|
|
- |
|
|
|
(5,254 |
) |
|
|
(5,254 |
) |
|
|
228 |
|
|
(5,026 |
) |
|
|
|
|
|
|
|
|
Other
comprehensive income |
|
|
|
|
|
|
|
Exchange differences
arising on |
|
|
|
|
|
|
|
translation of foreign
operations |
|
- |
|
|
- |
|
|
|
(625 |
) |
|
|
- |
|
|
|
(625 |
) |
|
|
- |
|
|
(625 |
) |
Total comprehensive
income for the year |
|
- |
|
|
- |
|
|
|
(625 |
) |
|
|
(5,254 |
) |
|
|
(5,879 |
) |
|
|
228 |
|
|
(5,651 |
) |
|
|
|
|
|
|
|
|
Balance at December 31, 2016 |
$ |
110,563 |
|
$ |
- |
|
|
$ |
(5,429 |
) |
|
$ |
(111,676 |
) |
|
$ |
(6,542 |
) |
|
$ |
2,266 |
|
$ |
(4,276 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
-continued-
THUNDERBIRD RESORTS,
INC.
CONSOLIDATED STATEMENT OF CHANGES IN
EQUITY
(Expressed in thousands of United States dollars)
For the six months ended June 30, 2017
|
|
|
|
|
|
|
|
|
|
Share
capital |
Share
options
reserve |
Currency
translation
reserve |
Retained
earnings |
Total |
Non-
controlling
interest |
Total
equity |
|
Balance at January 1, 2017 |
$ |
110,563 |
|
$ |
- |
|
$ |
(5,429 |
) |
|
$ |
(111,676 |
) |
|
$ |
6,542 |
|
|
$ |
2,266 |
|
$ |
(4,276 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Transactions with owners: |
|
|
|
|
|
|
|
|
|
|
Issue of new
shares |
|
48 |
|
|
- |
|
|
- |
|
|
|
- |
|
|
|
48 |
|
|
|
- |
|
|
48 |
|
|
|
$ |
48 |
|
$ |
- |
|
$ |
- |
|
|
$ |
- |
|
|
$ |
48 |
|
|
$ |
- |
|
$ |
48 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Profit / (loss) for
the year |
|
- |
|
|
- |
|
|
- |
|
|
|
(1,665 |
) |
|
|
(1,665 |
) |
|
|
368 |
|
|
(1,297 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
Other
comprehensive income |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Exchange differences
arising on |
|
|
|
|
|
|
|
|
|
|
translation of foreign
operations |
|
- |
|
|
- |
|
|
(30 |
) |
|
|
- |
|
|
|
(30 |
) |
|
|
- |
|
|
(30 |
) |
|
Total comprehensive
income for the year |
|
- |
|
|
- |
|
|
(30 |
) |
|
|
(1,665 |
) |
|
|
(1,695 |
) |
|
|
368 |
|
|
(1,327 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
Balance at June 30, 2017 |
$ |
110,611 |
|
$ |
- |
|
$ |
(5,459 |
) |
|
$ |
(113,341 |
) |
|
$ |
(8,189 |
) |
|
$ |
2,634 |
|
$ |
(5,555 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
THUNDERBIRD RESORTS,
INC.
CONSOLIDATED STATEMENT OF CASH FLOWS
(Expressed in thousands of United States dollars)
For the six months ended June 30, 2017
|
Six months ended |
|
June 30 (unaudited) |
|
2017 |
|
2016 |
|
|
|
|
Cash
flow from operating activities |
|
|
|
Loss for the year |
$ |
(1,296 |
) |
|
$ |
(1,489 |
) |
Items not involving
cash: |
|
|
|
Depreciation and amortization |
|
1,561 |
|
|
|
1,514 |
|
Unrealized foreign exchange |
|
(297 |
) |
|
|
(121 |
) |
Decrease in provision |
|
(159 |
) |
|
|
(1,186 |
) |
Bad
debt expense |
|
14 |
|
|
|
- |
|
Other
losses |
|
29 |
|
|
|
8 |
|
Share
based payments |
|
48 |
|
|
|
48 |
|
Finance income |
|
(96 |
) |
|
|
(75 |
) |
Finance cost |
|
1,747 |
|
|
|
1,765 |
|
Other
interests |
|
8 |
|
|
|
7 |
|
Disposal of equity accounted investments |
|
- |
|
|
|
(1,232 |
) |
Results from equity accounted investments |
|
84 |
|
|
|
57 |
|
Tax
expenses |
|
142 |
|
|
|
143 |
|
Net
change in non-cash working capital items |
|
|
|
Decrease / (increase)in trade, prepaid and other receivables
|
|
243 |
|
|
|
(77 |
) |
(Increase) / decrease in inventory |
|
(38 |
) |
|
|
23 |
|
Increase in trade payables and accrued liabilities |
|
308 |
|
|
|
1,167 |
|
Cash
(used) from operations |
|
2,298 |
|
|
|
552 |
|
Total
tax paid |
|
(608 |
) |
|
|
(168 |
) |
Net cash generated by
continuing operations |
|
1,690 |
|
|
|
384 |
|
Net
cash from operating activities |
$ |
1,690 |
|
|
$ |
384 |
|
|
|
|
|
Cash
flow from investing activities |
|
|
|
Expenditure on
property, plant and equipment |
|
(431 |
) |
|
|
(226 |
) |
Proceeds on sale of
property, plant and equipment |
|
- |
|
|
|
1,273 |
|
Proceeds on sale of
Costa Rica Joint Venture |
|
- |
|
|
|
1,534 |
|
Interest received |
|
96 |
|
|
|
75 |
|
Net
cash used (used) / from investing activities |
$ |
(335 |
) |
|
$ |
2,656 |
|
|
|
|
|
Cash
flow from financing activities |
|
|
|
Proceeds from issue of
new loans |
|
13,322 |
|
|
|
100 |
|
Repayment of loans and
leases payable |
|
(11,050 |
) |
|
|
(2,642 |
) |
Interest paid |
|
(1,012 |
) |
|
|
(1,267 |
) |
Net
cash generated / (used) from financing activities |
$ |
1,260 |
|
|
$ |
(3,809 |
) |
|
|
|
|
Net
change in cash and cash equivalents during the year
|
|
2,615 |
|
|
|
(769 |
) |
|
|
|
|
Cash
and cash equivalents, beginning of the year |
|
2,867 |
|
|
|
4,403 |
|
|
|
|
|
Effect of foreign
exchange adjustment |
|
98 |
|
|
|
6 |
|
|
|
|
|
Cash
and cash equivalents, end of the year |
$ |
5,580 |
|
|
$ |
3,640 |
|
|
|
|
|
|
|
|
|
Management Statement on "Going Concern"
Management routinely plans future activities
including forecasting future cash flows. Management has reviewed
their plan with the Directors and has collectively formed a
judgment that the Group has adequate resources to continue as a
going concern for the foreseeable future, which Management and the
Directors have defined as being at least the next 12 months
following this 2017 Half-year Report. Directors have reviewed the
information provided by Management and have considered the
information in relation to the financing uncertainties in the
current economic climate, the Group's existing commitments and the
financial resources available to the Group. The expected cash flows
have been modeled based on anticipated revenue and profit streams
with debt funding programmed into the model and reducing over time.
The model assumes no new construction projects during the forecast
period. The model assumes a stable regulatory environment in all
countries with existing operations. Sensitivities have been applied
to this model in relation to revenues not achieving anticipated
levels.
The Directors have considered the: (i) base of
investors and debt lenders historically available to Thunderbird
Resorts, Inc.; (ii) global capital markets; (iii) limited trading
exposures to our local suppliers and retail customers; (iv) other
risks to which the Group is exposed, the most significant of which
is considered to be regulatory risk; (v) sources of Group income,
including management fees charged to and income distributed from
its various operations; (vi) cash generation, debt amortization
levels and key debt service coverage ratios; (vii) fundamental
trends of the Group's businesses; (viii) extraordinary cash inflows
and outflows from one-time events forecasted to occur in the
12-month period following this 2017 Half-year Report; (ix) ability
to re-amortize and unsecured lenders; (x) level of probability of
refinancing of secured debt; (xi) liquidation of undeveloped and
therefore non-performing real estate assets that have been held for
sale; and (xii) level of interest of third parties in the
acquisition of certain operating assets, and status of genuine
progress and probability of closing within the Going Concern
period.
The Directors have also considered certain
critical factors that might affect its continuing operations, as
follows:
- Special Resolution: On September 21, 2016,
the Group's shareholders approved a special resolution that, among
other items, authorized the Board of Directors of the Corporate to
sell "any or all remaining assets of the Corporation in such
amounts and at such times as determined by the Board of
Directors." This resolution facilitates the sale of any one
or any combination of assets required to support maintaining of a
going concern by the Group.
- Sellable Pricing of Assets; Asset Sale Schedules
and Re-financing Scenarios: The Group now has sufficient
market feedback, including offers for certain key assets, which
have enabled the Group to incorporate market-determined pricing
into its models.
- Secured debt Refinancing and Cash Flow: Debt
service payments for secured bank loans in Peru and secured and
unsecured loans at the Corporate-level continue to be a significant
part of the Group's outflow.
- Corporate Expense and Cash Flow: Corporate
expense has decreased materially in recent years, and continues to
decrease. Progress in this regard includes preliminary,
unaudited corporate expense in Q4 2016 through Half-year 2017 of
$959 thousand, which is a material reduction from the $1.7 million
reported through Half-year 2016.
- Liquidity and Working Capital: The Group is
currently operating with low levels of reserves and working
capital. Certain scenarios in relation to asset sales will
not create working capital, while others will. Selling all or
virtually all Group real estate and reverting cash flow will be
critical to creating a healthy level of working capital reserves
for periods beyond the Going Concern period.
- Considering the above, Management and Directors
are satisfied that the consolidated Group has adequate resources to
continue as a going concern for the 12 months following the
reporting period of this 2017 Half-year Report. For these
reasons, Management and Directors continue to adopt the going
concern basis in preparing the consolidated financial
statements.
Other Group Updates
During the half-year ended June 30, 2017, the
Group engaged in the following listed material events:
Continuing expense reduction
including temporary reduction of Officers' salaries:
-
Corporate expenses:
Continuing Corporate Expenses have been further reduced to less
than a $2.0 million annualized run rate as of this Half-year
2017.
-
Reduction of Officers Salaries
and election by Officers to receive shares in lieu of
cash:
In January 2016 the Company implemented a
compensation plan for its officers in order to reduce the Group's
cost structure to a level that is sustainable. The Group was
reduced to the following personnel: CEO, CFO and General Counsel
all working full time, but with a continued deferral of 50% or more
of their compensation until such time as there are sufficient cash
reserves to pay and/or until such time as these officers receive
shares for their deferred time, which ongoing agreements will be
subject to review by the board's Compensation Committee. These
Officers continued to dedicate full time employment to the Company
but discounted a cash portion of their salaries by approximately
$50,000 per month in order to preserve cash.
This "salary deferral" plan has been re-evaluated on a six months
basis and in each period, beginning July 1 2016, January 1, 2017
and most recently July 1 2017, the board has assessed and approved
the plan based on the needs of the company on a go-forward
basis.
In consideration of the extension of the discounting on the cash
portion of the salaries, Officers have reserved the right to
collect unpaid compensation either through stock at market rate or
in cash against future liquidity events.
The Company last held its AGM and Special meeting of shareholders
on September 22, 2016. The Company's Circular for that
AGM/Special Meeting included a recap of the Company's issued and
outstanding shares and a reference to the "shares for salary
deferral" as follows (emphasis in bold underline form):
"The only shares issued and outstanding in the
capital of Thunderbird are the Common Shares which total 25,054,371
as of the Record Date. Of those shares, as of the Record Date, the
Directors and Senior Officers, as a group, beneficially own,
directly or indirectly, and control 2,721,922 Common Shares which
represent approximately 10.9% of the issued Common Shares of
Thunderbird. These Directors and Officers also hold stock options
exercisable for up to 15,334 additional Common Shares of
Thunderbird. Thunderbird purchased 283,972 of its own Shares under
its Buy Back Program in 2013. Thereafter,
Thunderbird purchased an additional 710,000 of its own shares
separate and apart from its Buy Back program. The total shares that
are owned by Thunderbird is 993,972. Certain members of
Management have entered into salary deferral arrangement for period
January 1 2016 to December 31, 2016. Under this arrangement which
was approved by the Company's compensation committee and the Board,
the Management team has the option to accept additional shares in
lieu of the cash that has been deferred. The potential number of
shares range from approximately 1.5 million to 2.0 million
depending on the average share price throughout 2016 and assuming
that share prices remain within the average range in which they
have traded over the ninety day period previous to the publication
of this Information Circular. In order to
minimize the issuance of new shares in case Management opts to
accept shares in lieu of cash, Management would first draw down on
those 993,972 shares already purchased by the Company
itself."
Effective October 1, 2017, the Company's
compensation committee and its board approved the Officers election
to collect unpaid compensation for the period January 1, 2016 to
December 31, 2016 in stock at market rate. This total cash
deferral for 2016 amounted to $505,000. The Officers will
collectively receive a total of approximately 2,533,923
shares. Of this 2,533,923 in shares, 993,972 already
purchased by the Company will be transferred by the company pro
rata to the officers in keeping with the Company's Circular for the
September 22, 2016 AGM. The balance of 1,539,951 will be
issued to the officers as new shares.
San Diego Federal District Court
action and Mitchell Arbitration
In June of 2015, Thunderbird Resorts filed a
lawsuit in the Federal District Court, San Diego, against
defendants Murray Jo Zimmer ("Zimmer"), Angular Investments Corp.
("Angular"), Mitzim Properties, Inc. ("Mitzim Properties") Taloma
Zulu, S.A., ("Taloma Zulu") Jack R. Mitchell, ("Mitchell"). The
lawsuit alleges breach of fiduciary duty against Zimmer, Angular
and Mitchell; breach of contract against defendant Mitchell; aiding
and abetting, breach of fiduciary duty against Taloma Zulu and
Mitzim Properties; fraud Civil RICO 18 U.S.C. § 1961, conversion
constructive trust and an accounting against defendants Zimmer,
Angular and Taloma Zulu. The basis of the various claims and
allegations in the lawsuit stem from the following: In 2002,
Thunderbird partnered with Angular to operate casinos and related
businesses in Costa Rica. Grupo Thunderbird de Costa Rica, S.A.
("GTCR") was formed by Thunderbird and Angular, who agreed to split
all profits from GTCR on an equal, "50/50" basis. Angular's
principal, defendant Zimmer, became Thunderbird's "country manager"
for its operations in Costa Rica. Between July 2007 and September
2014, Zimmer caused GTCR to pay over $2 million to defendant Taloma
Zulu. Zimmer reported to Thunderbird's management that these
amounts were being paid for legal and consulting expenses for GTCR
to operate in Costa Rica. Upon further investigation, Thunderbird
now believes and alleges that Zimmer and Mitchell caused
Thunderbird's 50% share of the amounts paid to Taloma Zulu to be
diverted, misappropriated, embezzled, and/or converted for
defendants' own improper, personal uses. Thunderbird Resorts is
seeking the following relief: awarding Thunderbird the damages it
has sustained by reason of Mitchell, Zimmer et al
conduct, and interest thereon as provided by law; awarding
Thunderbird exemplary and/or punitive damages on account of
defendants' willful, wanton, malicious, and/or oppressive conduct;
awarding Thunderbird its costs of suit incurred therein.
Thunderbird Resorts is also seeking the imposition of a
constructive trust in favor of Thunderbird, and against defendants,
of the benefits improperly received by defendants and an order
commanding defendants to return to Thunderbird the funds they
improperly received by way of their wrongful conduct. So far,
Thunderbird Resorts was successful in having the court order
approximately $420 thousand of the defendants' funds to be
sequestered in the Federal District Court bank account pending
resolution of the case. In March of 2017, Thunderbird Resorts Inc.
obtained a default judgment in the approximate amount of $659
thousand against co-defendants Angular Investments S.A. and Taloma
Zulu.
In May 2017 Mitchell filed a motion to have the
claims made against him submitted to arbitration in Hong Kong
alleging that is the proper forum for Thunderbird Resorts
claim. In addition, Angular Investments S.A. filed a motion
to set aside the $659 thousand default judgment. The Court
also granted Thunderbird leave to file additional pleadings showing
default damages above $657,975, and Thunderbird submitted
additional pleadings showing damages and interest totaling
$825,125. In addition to Angular's motion to set aside the
default judgment, Angular also filed a motion to dismiss for lack
of jurisdiction which is still under submission. All of these
motions and applications are currently under submission with the
Federal District Court. A pretrial conference in this matter is
scheduled for December 4, 2017 to determine when trial will
commence, which could be in December 2017 or within two to three
months after that.
Simultaneously or close thereto with Thunderbird
Resorts Inc. filing of the San Diego Federal District Court case,
Mitchell a former employee of Thunderbird, brought an
arbitration claim in Hong Kong under the International Court of
Arbitration of the International Chamber of Commerce against
Thunderbird. The amount claimed is not less than $518 thousand. By
way of background, in September 2012, Thunderbird Resorts entered
into a settlement with Mitchell, following his termination from the
company. Part of that settlement included a payment to Mitchell of
approximately $1.8 million to be paid in installments over the
course of several years. On or about May 2015, Thunderbird Resorts
claimed that Mitchell was in default of his settlement agreement
and stopped payment on the settlement amount. Mitchell instituted
arbitration proceedings in Hong Kong pursuant to the terms of the
settlement agreement.
On September 27, 2017 the International Court of
Arbitration of the International Chamber of Commerce approved its
award against Thunderbird Resorts Inc. in the approximate amount of
$518 thousand plus attorney's fees and costs of approximately
$220,000. The award is not final as the parties are granted
30 days from the date the award is delivered to the parties to file
an application for the correction of an error of the kind or for
the interpretation of an award. Thunderbird Resorts intends
to pursue and all legal challenges to the award including
clarification of the award and appeals and challenges to the
award.
Thunderbird Resorts made several request to the
Arbitrator that the decision in this matter be delayed pending
submittal of further evidence from the related matter Thunderbird
Resorts Inc. vs. Jo Murray Zimmer, Jack R. Mitchell, Angular
Investments, S.A, Taloma Zulu, Mitzim case no. 15CV1304 JAH BGS
filed in the United States District Court for the Southern District
of California in which Mitchell and his co-defendants are being
sued for approximately $1,282,454 plus punitive damages which may
rise to the level of three times the actual damages.
Thunderbird Resorts maintained that justice is
best served if the arbitration proceeding was "stayed" while the
Group sought its case against Mitchell and Zimmer San Diego Federal
District Court Case. Thunderbird Resorts is diligently
prosecuting its claims in the Mitchell, Zimmer San Diego Federal
District Court Case and estimates that its monetary value of its
claim against Mitchell is $1,282,454.49. This estimate does not
include damages based on other claims outside the scope of the
parties' arbitration agreement, including but not limited to other
claims set forth in Thunderbird Resorts U.S. District Court action
against Mitchell, Murray Jo Zimmer and others.
ABOUT THE COMPANY
We are an international provider
of branded casino and hospitality services, focused on markets in
Latin America. Our mission is to "create extraordinary
experiences for our guests. "Additional information about the Group
is available at www.thunderbirdresorts.com.
Contact: Peter LeSar, Chief Financial
Officer - Phone: (507)
223-1234 - Email: plesar@thunderbirdresorts.com
Cautionary Notice:
Cautionary Notice: The Semi-Annual Report referred to in this
release 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 in the
Semi-Annual Report, including without limitation, statements
regarding potential revenue and future plans and objectives of
Thunderbird 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 Thunderbird'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 Thunderbird's documents
filed from time-to-time with the Euronext Amsterdam and other
regulatory authorities. Included in the Semi-Annual Report are
certain "non-IFRS financial measures," which are measures of
Thunderbird's historical or estimated future performance that are
different from measures calculated and presented in accordance with
IFRS, within the meaning of applicable Euronext Amsterdam rules,
that are useful to investors. These measures include (i) Property
EBITDA consists of income from operations before depreciation and
amortization, write-downs, reserves and recoveries, project
development costs, corporate expenses, corporate management fees,
merger and integration costs, income/(losses) on interests in
non-consolidated affiliates and amortization of intangible assets.
Property EBITDA is a supplemental financial measure we use to
evaluate our country-level operations. (ii) Adjusted EBITDA
represents net earnings before interest expense, income taxes,
depreciation and amortization, equity in earnings of affiliates,
minority interests, development costs, and gain on refinancing and
discontinued operations. Adjusted EBITDA is a supplemental
financial measure we use to evaluate our overall operations.
Property EBITDA and Adjusted EBITDA are supplemental financial
measures used by management, as well as industry analysts, to
evaluate our operations. However, Property and Adjusted EBITDA
should not be construed as an alternative to income from operations
(as an indicator of our operating performance) or to cash flows
from operating activities (as a measure of liquidity) as determined
in accordance with generally accepted accounting principles.