Thunderbird Resorts Inc.
CNQ : TBI.U

Thunderbird Resorts Inc.

August 31, 2005 12:29 ET

International Thunderbird Gaming Corporation: Message to our Shareholders on 2005 Second Quarter Results

POWAY, CALIFORNIA--(CCNMatthews - Aug. 31, 2005) - International Thunderbird Gaming Corporation (CNQ:ITGC.U) announces its financial results for the second quarter ended June 30, 2005. All figures are in US dollars.

Revenues from continuing operations for the second quarter of 2005 were $10.3 million, an increase of approximately 64% over 2004 revenues from continuing operations of $6.3 million for the same period. The largest impact contributing to the significant growth in revenue is the $2.5 million from the Company's controlling interest in Nicaragua in Q2 2005 and the Company's 50% interest in Costa Rica where its share of the revenues were approximately $1.4 million for the 2005 2nd quarter. Comparatively, the Company had only an equity interest in Nicaragua in the 2nd quarter of 2004 and did not reflect any revenue from the operations. Also, the Costa Rica operations had only two casinos which generated approximately $543 thousand for the Company in the 2nd quarter of 2004. Costa Rica now has three casinos and a slot route.

The Company had a net loss for the quarter of $146 thousand compared to net income of $610 thousand in 2004 for the same period. Current period income was significantly impacted by the preliminary performance of its operation in the Philippines. The new casino generated $495 thousand in revenue in its first 80 days of operation, which contributed to an operating loss of $745 thousand for the entity in the 2nd quarter. The Manila casino opened in April 2005. Each of the Company's other operating entities generated a profit for the period.

The Company's project development expenses of $323 thousand relate primarily to Chile, where the Company was preparing its bid proposals for licenses. Financing costs for the quarter were $712 thousand compared to $251 thousand for the same period in 2004. The Company relies on debt funding for new projects rather than dilution from equity funding for corporate growth. The earnings per share for the quarter was a loss of $0.01 compared to earnings of $0.03 per share for the same period in 2004. The Company achieved EBITDA (Earnings Before Interest, Taxes, Depreciation and Amortization), before the impact of one-time items, of $1.3 million for the quarter compared to $1.7 million for the same period in 2004. As of June 30, 2005 the Company has a working capital deficiency of $969 thousand due primarily to the operating performance of the Philippines. The Company has raised additional funding to meet its current obligations for the entity.

For a more detailed analysis of the results for the period, please review the MD&A at the Company's website or the CNQ website.

Effect of Development & Project Level Financing on profitability: Two main factors contributed to the Company's loss this quarter: (1) The Philippine operation got off to a dismal start and (2) the continued use by the Company of "project level financing". There is a start-up curve for profitability of a year or more while building large new properties. In addition, the debt service has a significant impact on profits. Costa Rica is a perfect example of the long term success impacted by the start-up curve and project level financing. The Company has built the Costa Rica business for two years and the operations there are now poised for a great future and significant EBITDA. Management believes the Philippines will also become a significant profit center but will likely take a year or more of developing. Currently, the Philippines projects are negatively offsetting profits and will continue to do so over the next several months. With the Company's project at Poro Point commencing, the Company is positioned for a great future in the Asian market. Management still considers that project level financing is the solution to continued growth of our business while avoiding major dilution to the shareholders. This project level financing will be re-paid from the operations' cash flow over the next four years which will impact earnings but will also build long term value with no dilution to the shareholders. As new operations begin to add profits, the affect of future development charges on earnings will begin to have a less dramatic impact.

NAFTA Proceedings:

The Company continues to remain patient with respect to the decision of the NAFTA arbitration tribunal. The matter was fully submitted to the three member arbitration tribunal nearly 8 months ago and a decision on the case is expected soon.

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. The Company moved its corporate offices to a new location just north of San Diego, California.

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. The Q2 interim financial statements have not been reviewed by the Company's auditor, Davidson & Company, Chartered Accountants. The Q2 interim financial statements and the notes thereto have been prepared by management using generally accepted accounting principles in Canada. 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 CNQ and other regulatory authorities.

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