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Thunderbird Reports Fourth Quarter, Full-Year Results; Opening of Second Property in the Philippines

Thunderbird Reports Fourth Quarter, Full-Year Results; Opening of Second Property in the Philippines

POWAY, CALIFORNIA -- (MARKET WIRE) -- 05/01/06 -- Thunderbird Resorts, Inc. (CNQ:BIRD.U)(FWB:OSJ) today reported record high fourth quarter revenues of $16.0 million, up 108% from revenues of $7.7 million in the 2004 fourth quarter. For the full year, revenues rose 85% to a record high of $47.4 million from $25.6 million in 2004.

In addition to its strong revenue increases in the 2005 fourth-quarter, Thunderbird also incurred significant development costs and operating losses while recording a gain on the sale of certain operations:

- In Nicaragua, an accumulated development cost of $924 thousand was incurred related to the pre-opening costs for two new properties under development

- In Chile, development costs of $130 thousand were incurred

- In the Philippines, development costs of $350 thousand were incurred

- In the Philippines, an operating loss of $(1.6) million was incurred

- In Venezuela, the Company sold its only operation and recognized a net gain of $1.8 million, $740 thousand of which was recognized in the 4th quarter due to advance payment on the promissory note received from the sale

As a result of the these events, strong 4th quarter operating results were impacted which resulted in a net loss of $(1.3) million compared to a net loss of $(60) thousand in fourth quarter 2004, a 207% increase, while diluted loss per share for the 2005 fourth quarter was $(0.05), compared with diluted loss per share of $(0.00) in the year-ago quarter. Adjusted EBITDA in the fourth quarter 2005, excluding non-recurring items, development costs, special charges and minority interests was $2.3 million or $0.08 per diluted share, compared to $1.5 million or $0.05 per share for the year-ago quarter. The net loss was $(1.3) million, or $(0.05) per diluted share, for the 2005 fourth quarter, compared to a net income of ($60) thousand, or $Nil per diluted share, for the 2004 fourth quarter.

The loss in the Philippines coupled with higher than normal project development costs greatly impacted the 4th quarter earnings. The Company believes that the Philippines will become a profit centre during 2006 and the development expenses incurred in 2005 will benefit the company for years to come.

Cash provided by continuing operations increased to $2.9 million for the 4th quarter 2005 from $757 thousand million for the 4th quarter 2004. At December 31, 2005 the Company had a working capital deficiency of $8.8 million compared to working capital deficiency of $2.7 million as of September 30, 2005. The Company attributes this increase primarily to the development of Poro Point in the Philippines, slow operations in the Philippines, and increased debt due to the expansion of the casinos in Panama. Poro Point used $3.0 million in cash that was on hand at the end of Q3 along with the increase in current liabilities of $600 thousand to fund the development of the project. The current liabilities also increased for the Manila casino an additional $1.3 million, $400 thousand of which was for additional PAGCOR fees. Another $450 thousand was recorded as due to related parties, which recorded the cost of the acquisition of the gaming license from PAGCOR and corresponding liability pursuant to the original agreement. The remaining $600 thousand were increases in short term liabilities due to the past poor performance and large PAGCOR fees. In addition to the Philippines, the current liabilities in Panama increased $1.5 million due to additional short term debt of $900 thousand plus an increase of $600 thousand in current liabilities for the expansion of their casinos; these increases were offset by a cumulative decrease from the other operations of the Company by $300 thousand. Interest expense for 4th quarter 2005 was $1.8 million as compared to $1.1 million in 2004.

For the full-year, the net loss was $(2.2) million compared to net income of $1.4 million in 2004, a 260% decrease, while 2005 diluted loss per share was $(0.08), compared with diluted earnings per share of $0.05 in 2004. For the year 2005, the Company achieved an Adjusted EBITDA excluding non-recurring items, development costs, special charges and minority interests was approximately $7.8 million or $0.28 per diluted share as compared to $6.0 million or $0.22 per diluted share for 2004.

Entry into the Philippines market and initial operating results generated a net loss for the full-year 2005 of $(4.1) million. Development costs of $983 thousand in Chile, $886 thousand in the Philippines, and $924 thousand in Nicaragua also contributed to the net loss for full-year 2005.

Fourth Quarter Highlights:

- In Panama, we expanded our flagship Fiesta Casino to include a complete entertainment offering with the addition of Salsa's, a Thunderbird themed restaurant and bar with daily live entertainment. We now offer over 1,650 gaming positions to our customers in Panama.

- In Costa Rica, we opened one new Fiesta Casino bringing our total number of properties to 4 along with a slot route business. We now offer our customers over 750 gaming positions in Costa Rica.

- In the Philippines, the Company resolved its operational issues at the Fiesta Casino-Eastridge. Various costs associated with the operation that significantly impacted our operating margins are now in line with industry standards and the Company expects the Fiesta Casino-Eastridge will attain profitability on a go-forward basis.

Cash provided by continuing operations increased to $2.9 million for the full year 2005 from $2.7 million for the full-year 2004. Interest expense for full-year 2005 was $3.8 million as compared to $1.1 million in 2004. At December 31, 2005, the Company had a working capital deficiency of $(8.8) million compared to working capital of $1.3 million at the end of 2004. The working capital deficiency is partially a result of Thunderbird's dramatic growth during 2005 when annual revenues almost doubled compared to 2004 revenues. The balance sheet also reflects the effects of the project level financing model used by the Company. This model results in short repayment terms that create high current portions of loans payable.

The Board of Directors is actively pursuing opportunities to improve the balance sheet through the issuance of new equity capital and the refinancing of certain existing debt agreements. In any event, the Company believes that by continuing to generate strong Adjusted EBITDA results each quarter, and by paying down debt according to the existing terms, it will strengthen its balance sheet, improve its working capital and, eventually build cash reserves.

2005 Highlights:

- In Panama, we opened our sixth property in September and have maintained our status as the market share leader in the full casino sector.

- In Nicaragua, the Company increased its ownership to a "controlling position" in excess of 50% in its subsidiary, Buena Esperanza Limitada S.A. Thunderbird maintained its position as the market share leader in this country.

- In Costa Rica, the Company negotiated and developed a flagship property and one small casino, positioning itself as the leading casino operator in the country. We are positioned for even more growth and profitability in that market in 2006.

- In the Philippines, the Company opened the "Fiesta Resort Casino" in Binangonan in the province of Rizal situated within suburban Manila in the Philippines. This project represents Thunderbird's evolution from simply a casino operator to a recreational property developer and operator, whose anchor is a casino. The adjusted business model, which we intend to deploy in most new markets, is intended to help strengthen our balance sheet and protect the strong cash flow generated from the casino. Revenues from this operation are exceeding management's expectations.

- In Germany, the Company's common shares are now trading under the symbol "OSJ" (ISIN Security No. 886057) on the Frankfurt Stock Exchange. The FSE increases the Company's exposure to European and Asian shareholders who will now have greater trading access to the Company's shares. The CNQ has continued to improve its reputation and systems.

Snapshot of 4th quarter               Snapshot of Year end results
(000's omitted):                     (000's omitted):

Revenues: $16 million                 Revenues: $47 million
Earnings (loss): ($1.3) million       Earnings (loss): ($2.2) million

Compared to 2004                      Compared to 2004:
Revenues: $7.7 million                Revenues: $25 million
Earnings (loss): ($60) thousand       Earnings: $1.4 million


Recent developments in 2006

Philippines: The Fiesta Casino at Poro Point opened on April 28 2006. The Fiesta Casino and Resort at Eastridge continues to set record revenues.

Chile: The Company has been engaged in a "legal challenge" in its quest to be included as a bidder in the Chile Bid Process. On April 5, 2006, the Santiago Court of Appeals unanimously ruled (3-0) in favor of Thunderbird's petitions against the Chilean Gaming Commission's resolutions that had excluded Thunderbird from the current casino bid process. The Court found that the Gaming Commission's resolutions were arbitrary and illegal. The Commission appealed the decision to the Supreme Court. The Supreme Court's ruling is now pending and if the court upholds the rulings, the Company's projects for Algarrobo, Antofagasta, Rancagua and Talca will be reinserted into the bidding process. Bids are expected to be awarded by early Q4-2006.

Guatemala: The Company is experiencing new competition which has slightly impacted revenue, albeit we remain the market share leader. The Company is responding by investing in new equipment which has been purchased and will be installed by August 2006. This equipment expansion was funded by a private financing offering of $1.4 million which will expand Thunderbird's flagship property and open one new location.

Nicaragua: The Company is constructing a new Pharoah's Casino in the Holiday Inn-Select in Managua which is scheduled for a May 2006 opening. The Company is also constructing a new Fiesta Casino in Managua which is scheduled to open in the 4th quarter of 2006. The Company secured regional bank financing to construct the new Fiesta Casino.

Costa Rica: This operation set record revenues in March 2006 and continues to perform well. The Costa Rica operation is expanding to several small towns outside of the San Jose metropolitan area as the Company builds more market share and profitability by penetrating important niches in this growing market. The Company continues to conduct due diligence on the acquisition and development of a hotel-casino in the San Jose metropolitan area.

Mexico and NAFTA: A ruling on this matter was made on January 26, 2006. On April 24, 2006, the Company filed a Motion to Vacate the Arbitrators' decision. The basis of the motion is that the arbitrators' decision is manifestly unjust and in total disregard of the law.

History of Growth - 1998 to 2005:

The Company has developed 23 projects with revenues exceeding $90 million, at 100% of revenue, in an 8 year time frame. The operational footprint of Thunderbird has significantly grown. Our Panama hub has enabled us to build a cluster of businesses within a 3-hour flight radius. We expect to achieve the same benefits over the next 5 years through our expansions into Chile and Southeast Asia.

During the period 2003 through 2005, we committed to a growth strategy which has dramatically expanded the business. As a result, the Company will continue to incur expenses related to this growth, which will in turn have a negative impact on earnings. However, as new operations begin to add profits, the affect of future development charges on earnings will begin to have less impact. The Company raised approximately $24.7 million during the past year which was used to acquire a controlling interest in the Nicaragua operations, the development and build-out of the Fiesta Casino in San Jose Costa Rica, the moderate expansion of operations in Panama and Guatemala, and the build-out of the Fiesta Casino in Manila.

We now count over 3,500 employees on the Thunderbird team. This team continues to be the most important asset of the Company. Together we have developed and now manage 23 successful operations in 6 countries. Thunderbird Resorts will continue to design, develop and operate recreational properties anchored by casinos in new and existing markets.

Thunderbird Resorts is a successful recreational property developer and operator in each of its markets. Thunderbird Resorts' success is based upon creating genuine value for the community and for its employees and shareholders. Thunderbird Resorts achieves its mission by offering customers dynamic, themed and integrated venues anchored by casinos and gaming facilities. Additional information about Thunderbird is available on its World Wide Web site at

On behalf of the Board of Directors,

Jack R. Mitchell, President and CEO

Non-GAAP Financial Measures

Included in this press release are certain "non-GAAP financial measures", which are measures of our historical or estimated future performance that are different from measures calculated and presented in accordance with GAAP, within the meaning of applicable CNQ rules, that we believe are useful to investors. They are as follows: (i) Adjusted EBITDA and (ii) Adjusted EBITDA and net income, basic EPS and diluted EPS, excluding non-recurring items, special charges and discontinued operations. The following discussion defines these terms and presents the reasons we believe they are useful measures of our performance.

Adjusted EBITDA

Because depreciation and amortization are non-cash items, management and many industry investors believe the presentation of Adjusted EBITDA is useful to management and to investors. Adjusted EBITDA represents consolidated 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. We believe Adjusted EBITDA provides useful information to investors regarding our financial condition and results of operations because Adjusted EBITDA is useful for evaluating our performance and our capacity to incur and service debt and to fund capital expenditures. Management also uses Adjusted EBITDA as one measure in determining the value of acquisitions and dispositions.

Cautionary Notice: 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 herein, 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 CNQ and other regulatory authorities.

Thunderbird Resorts, Inc.
Albert W. Atallah
Investor Relations
(858) 668-1808 ext. 206
(858) 513-3760 (FAX)

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