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PROSPECTUS SUPPLEMENT FILED PURSUANT TO RULE 424(b)(3)
DATED JUNE 2, 1999
TO PROSPECTUS DATED APRIL 5, 1999 REGISTRATION NO. 333-22705
THOUSAND TRAILS, INC.
416,179 SHARES OF COMMON STOCK
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, 1999, and other
information recently reported by the Company. This Supplement should be read in
conjunction with the Prospectus dated April 5, 1999 (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.
FINANCIAL INFORMATION. The Company reported net income of $4.4 million
or $.53 per diluted share on revenues of $51.1 million for the first nine months
of fiscal 1999, which ended March 31, 1999. This compares with net income of
$10.6 million or $1.26 per diluted share on revenues of $55.0 million for the
same period last year.
For the quarter ended March 31, 1999, the Company reported net income
of $930,000 or $.11 per diluted share on revenues of $14.9 million, compared
with net income of $2.1 million or $.25 per diluted share on revenues of $15.6
million for the same quarter 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,
------------------------- --------------------------
1999 1998 1999 1998
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<S> <C> <C> <C> <C>
CONDENSED CONSOLIDATED
OPERATING STATEMENTS:
Total revenues $51.1 $54.9 $14.9 $15.6
Total expenses (44.9) (44.0) (13.3) (13.4)
Income tax provision (1.8) (0.4) (0.7) (0.1)
-------- -------- -------- --------
Net income $4.4 $10.5 $0.9 $2.1
======== ======== ======== ========
Net income per share-Basic $0.59 $1.43 $0.12 $0.28
======== ======== ======== ========
Net income per share-Diluted $0.53 $1.26 $0.11 $0.25
======== ======== ======== ========
Shares used in calculation
Basic 7.5 7.4 7.7 7.4
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Diluted 8.4 8.4 8.5 8.4
======== ======== ======== ========
</TABLE>
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<TABLE>
<CAPTION>
March 31, June 30,
1999 1998
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(Unaudited)
<S> <C> <C>
BALANCE SHEET DATA
Cash and cash equivalents $1.2 $13.6
Receivables, net 1.6 4.2
Campground properties 34.3 35.2
Land held for sale 2.9 3.9
Total assets 56.1 74.3
PIK Notes, including deferred gain -0- 33.0
Borrowings under Credit Agreement 11.0 -0-
Stockholders equity 7.5 2.8
</TABLE>
While the Company's revenues declined slightly in the current quarter
compared with the same quarter last year, the Company's revenues were
approximately the same in the nine-month periods ended March 31, 1999 and 1998,
excluding gains on asset sales and nonrecurring income. Gains on asset sales
were $1.1 million in the nine months ended March 31, 1999, compared with $3.7
million in the same period last year. In addition, the prior three and nine
month periods had $588,000 and $1.1 million, respectively, of nonrecurring
income. The Company's expenses declined in the current quarter compared with the
same quarter last year, although the Company incurred higher expenses in the
nine months ended March 31, 1999, compared with the same period last year.
OTHER INFORMATION. The Company is involved in litigation in the
ordinary course of business. In one such action, a property owners association
has brought suit against a subsidiary of the Company that was previously
involved in the Company's resort operations, alleging that the subsidiary owes
in excess of $2.5 million for past due maintenance fees on subdivided lots owned
by the subsidiary. The subsidiary has denied the claim and is vigorously
defending the lawsuit. Although discovery in the lawsuit has not been completed,
management does not believe that it will have a material adverse effect upon the
Company's operations or financial position.
In connection with their proposed acquisitions of additional shares of
the Company's common stock, Carl Marks Strategic Investments, LP and Carl Marks
Strategic Investments II, LP, two of the Company's largest stockholders,
requested the Company's consent required under the transfer restrictions
contained in the Company's certificate of incorporation. Such restrictions are
designed to avoid an "ownership change" within the meaning of the applicable
federal income tax regulations that could adversely affect the Company's net
operating loss carry forwards. The proposed acquisitions, however, did not
involve an "ownership change" for federal income tax purposes. As a condition to
its consent, the Company required these stockholders and their affiliates to
enter into an agreement with the Company which limits their ability to enter
into specified extraordinary transactions with the Company without the prior
approval of either a majority of the disinterested directors or a majority of
the other stockholders of the Company. For this purpose, an extraordinary
transaction includes any transaction to acquire the shares of common stock held
by the public if the transaction is proposed by any of these stockholders or
their affiliates. These stockholders and their affiliates reported that, as of
April 30, 1999, they beneficially owned an aggregate of 4,928,486 shares of
common stock
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(including 219,521 shares issuable upon exercise of warrants and options), which
represent approximately 59% of the Company's outstanding shares.
The Company's Quarterly Report on Form 10-Q for the quarter ended March
31, 1999, which was filed with the Securities and Exchange Commission on May 14,
1999, contains additional financial and other information concerning the Company
as of and for the nine and three month periods ended March 31, 1999. See
"Available Information" in the Prospectus.
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