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PROSPECTUS SUPPLEMENT FILED PURSUANT TO RULE 424(b)(3)
DATED MAY 28, 1998
TO PROSPECTUS DATED OCTOBER 10, 1997 REGISTRATION NO. 333-19357
THOUSAND TRAILS, INC.
$26,524,745 SENIOR SUBORDINATED PAY-IN-KIND NOTES DUE 2003
This Prospectus Supplement (this "Supplement") contains summary financial
information for Thousand Trails, Inc., a Delaware corporation (the "Company"),
for the nine and three month periods ended March 31, 1998. This Supplement
should be read in conjunction with the Prospectus dated October 10, 1997 (the
"Prospectus"), to be delivered with this Supplement. All capitalized terms used
but not defined in this Supplement shall have the meanings given to them in the
Prospectus.
The Company reported net income of $10.6 million or $1.43 per share on
revenues of $55.0 million for the first nine months of fiscal 1998, which ended
March 31, 1998. This compares with net income of $1.8 million or $.25 per share
on revenues of $55.3 million for the same period last year, as restated.
For the quarter ended March 31, 1998, the Company reported net income of
$2.1 million or $.28 per share on revenues of $15.6 million, compared with a net
loss of $32,000 or $0 per share on revenues of $15.9 million for the same period
last year.
A summary of the Company's financial results is set forth below (in
millions, except for per share amounts):
<TABLE>
<CAPTION>
For the Nine Months Ended For the Three Months Ended
March 31, March 31,
-------------------------- --------------------------
1998 1997 1998 1997
---------- ---------- ---------- ----------
(Restated) (Restated)
<S> <C> <C> <C> <C>
CONDENSED CONSOLIDATED
OPERATING STATEMENTS:
Total revenues $ 55.0 $ 55.3 $ 15.6 $ 15.9
Total expenses (44.0) (53.0) (13.4) (15.8)
Income tax provision (.4) (.5) (.1) (.1)
---------- ---------- ---------- ----------
Net income $ 10.6 $ 1.8 $ 2.1 ($ 0)
========== ========== ========== ==========
Net income per share-basic $ 1.43 $ 0.25 $ 0.28 $ 0
========== ========== ========== ==========
Weighted average shares 7.4 7.2 7.4 7.4
========== ========== ========== ==========
</TABLE>
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<TABLE>
<CAPTION>
March 31, June 30,
1997 1998
----------- -----------
(Unaudited)
<S> <C> <C>
BALANCE SHEET DATA
Cash and cash equivalents $ 8.7 $ 1.3
Receivables, net 4.0 7.5
Campground properties 39.4 42.8
Resort properties 1.1 1.5
Total assets 61.9 63.3
PIK Notes, including deferred gain 33.0 29.4
Borrowings under Credit Agreement -- 14.1
Other notes payable -- 0.6
Stockholders equity (deficit) (11.5) (22.2)
</TABLE>
The Company's results for the nine months ended March 31, 1998 include
gains on asset sales of $3.7 million, compared with $1.6 million for the same
period last year. The Company also continued to lower expenses in the current
period, primarily campground operating costs, administrative expenses, and
interest. In addition, the Company had $1.1 million of nonrecurring income in
the current period and $1.1 million of restructuring costs in the prior period.
The Company incurs minimal federal income taxes because of substantial net
operating loss carry forwards.
At the direction of the Staff of the Securities and Exchange Commission,
the Company changed its accounting method and now recognizes revenue from the
sale of campground memberships that do not convey a deeded interest in real
estate on a straight-line basis over the expected life of the memberships sold.
To show comparable results, the Company restated its financial statements for
the nine and three month periods ended March 31, 1997, to reflect this change in
accounting method.
The Company's Quarterly Report on Form 10-Q for the quarter ended March 31,
1998, which was filed with the Securities and Exchange Commission on May 13,
1998, contains additional financial and other information concerning the Company
as of and for the nine and three month periods ended March 31, 1998. See
"Available Information" in the Prospectus.
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