Silverleaf Resorts 8-K Results of Operations and Financial Condition

EX. 99.1

SILVERLEAF RESORTS, INC.
1221 River Bend Drive, Suite 120
Dallas, Texas 75247
(214) 631-1166

Contact: Harry J. White, Jr.
Chief Financial Officer
(214) 631-1166

SILVERLEAF RESORTS, INC.
ANNOUNCES EARNINGS FOR SECOND QUARTER AND SIX MONTHS ENDED
JUNE 30, 2005

     DALLAS, TEXAS. (August 12, 2005) -— Silverleaf Resorts, Inc. (OTC:SVLF) today announced its financial results for the quarter and six-month period ended June 30, 2005.

     For the second quarter of 2005, net income was $4.2 million, or $0.11 per diluted share, compared to net income of $3.1 million, or $0.08 per diluted share during the second quarter of 2004. Total revenue for the period was $49.4 million, as compared to $48.2 million during the comparable 2004 period. Vacation interval sales were $37.3 million during the second quarter of 2005, a $200,000 increase from vacation interval sales of $37.1 million during the second quarter of 2004.

     For the six-months ended June 30, 2005, net income was $6.8 million, representing a 25% increase over net income of $5.4 million during the first half of 2004. Earnings per share for the first half of 2005 were $0.17 per diluted share compared to $0.14 per diluted share in the first half of 2004. Total revenue for the period was $91.4 million, as compared to $90.7 million during the first six months of 2004. Vacation interval sales were $67.5 million for the six-month period ended June 30, 2005, a $1.7 million decrease from vacation interval sales in the same period of 2004.

     Based in Dallas, Texas, Silverleaf Resorts, Inc. currently owns and operates 13 timeshare resorts in various stages of development. Silverleaf Resorts offer a wide array of country club-like amenities, such as golf, swimming, horseback riding, boating, and many organized activities for children and adults.

     This release contains certain forward-looking statements that involve risks and uncertainties and actual results may differ materially from those anticipated. The Company is subject to specific risks associated with the timeshare industry, the regulatory environment, and various economic factors. These risks and others are more fully discussed under the heading “Cautionary Statements” in the Company’s reports filed with the Securities and Exchange Commission, including the Company’s 2004 Annual Report on Form 10-K (pages 19 through 27 thereof) filed on March 25, 2005.

SILVERLEAF RESORTS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
(in thousands, except share and per share amounts)
(Unaudited)

	Three Months Ended						Six Months Ended
	June 30,						June 30,
	2005			2004			2005			2004
Revenues:
Vacation Interval sales	$	37,334		$	37,144		$	67,471		$	69,131
Sampler sales		501			468			1,142			914
Total sales		37,835			37,612			68,613			70,045
Interest income		10,113			9,295			19,871			18,222
Management fee income		450			300			900			600
Gain on sales of notes receivable		—			154			669			580
Other income		957			811			1,382			1,203
Total revenues		49,355			48,172			91,435			90,650
Costs and Operating Expenses:
Cost of Vacation Interval sales		6,017			7,285			10,735			13,319
Sales and marketing		18,153			18,699			35,337			35,166
Provision for uncollectible notes		6,534			7,432			11,808			13,832
Operating, general and administrative		7,105			6,656			13,833			12,837
Depreciation and amortization		744			890			1,542			1,792
Interest expense and lender fees		4,286			4,293			8,671			8,575
Total costs and operating expenses		42,839			45,255			81,926			85,521
Income before provision for income taxes and discontinued operations		6,516			2,917			9,509			5,129
Provision for income taxes		(2,285	)		(25	)		(2,884	)		(23	)
Net income from continuing operations		4,231			2,892			6,625			5,106
Discontinued Operations
Income from discontinued operations (net of taxes)		—			160			128			289
Net income	$	4,231		$	3,052		$	6,753		$	5,395
Basic income per share:
Net income from continuing operations	$	0.11		$	0.08		$	0.18		$	0.14
Income from discontinued operations	$	—		$	—		$	—		$	0.01
Net income	$	0.11		$	0.08		$	0.18		$	0.15
Diluted income per share:
Net income from continuing operations	$	0.11		$	0.08		$	0.17		$	0.13
Income from discontinued operations	$	—		$	—		$	—		$	0.01
Net income	$	0.11		$	0.08		$	0.17		$	0.14
Weighted average basic shares outstanding:		36,937,648			36,846,319			36,899,620			36,843,938
Weighted average diluted shares outstanding:		38,933,675			38,935,602			38,874,506			38,905,570

SILVERLEAF RESORTS, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(in thousands, except share and per share amounts)
(Unaudited)

	June 30,			December 31,
ASSETS	2005			2004
Cash and cash equivalents	$	7,605		$	10,935
Restricted cash		5,215			3,428
Notes receivable, net of allowance for uncollectible notes of $55,636 and $52,506, respectively		203,357			196,466
Accrued interest receivable		2,293			2,207
Investment in special purpose entity		2,000			5,173
Amounts due from affiliates		188			288
Inventories		114,761			109,303
Land, equipment, buildings, and utilities, net		11,137			24,375
Land held for sale		2,991			2,991
Prepaid and other assets		13,263			14,340
TOTAL ASSETS	$	362,810		$	369,506
LIABILITIES AND SHAREHOLDERS’ EQUITY
LIABILITIES
Accounts payable and accrued expenses	$	8,408		$	7,980
Accrued interest payable		1,299			1,302
Amounts due to affiliates		669			929
Unearned revenues		6,682			4,634
Income taxes payable		1,692			—
Notes payable and capital lease obligations		201,780			218,310
Senior subordinated notes		34,029			34,883
Total Liabilities		254,559			268,038
COMMITMENTS AND CONTINGENCIES
SHAREHOLDERS’ EQUITY
Preferred stock, 10,000,000 shares authorized, none issued and outstanding		—			—
Common stock, par value $0.01 per share, 100,000,000 shares authorized, 37,249,006 shares issued, 36,954,948 shares outstanding at June 30, 2005, and 36,860,238 shares outstanding at December 31, 2004		372			372
Additional paid-in capital		115,522			116,614
Retained deficit		(4,161	)		(10,914	)
Treasury stock, at cost, 294,058 shares at June 30, 2005 and 388,768 shares at December 31, 2004		(3,482	)		(4,604	)
Total Shareholders’ Equity		108,251			101,468
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY	$	362,810		$	369,506