Rick's Cabaret balances stock options and stockings
Aug 27 (Reuters) - Option plans, market demographics, Internet strategies,
mergers and acquisitions -- all areas of expertise needed by the savvy
21st century strip club CEO.
Rick's Cabaret International Inc. (NasdaqSC:RICK
- News), the only
publicly traded U.S. burlesque chain, pleasing both customers and
shareholders has led to a unique corporate culture.
mix of boardroom and breasts was on display Friday morning, when
the company hosted shareholders at its annual meeting in its north
we'll see the end of the slow period we've seen since 9-11," Chairman,
Chief Executive Officer and Acting Chief Accouting Officer Eric
Langan, 36, told the smattering of shareholders gathered at the
club, holding out the promise of improved earnings. The company
posted a profit of $607,000 in the first half of its fiscal year.
by vacant strippers' stages, erotic photos and a neon sign pointing
to the "Champagne Lounge," investors easily passed motions to amend
a stock option plan and elect five directors to the board.
remained a hot topic for the Houston company that started with Rick's
Cabaret "upscale gentleman's clubs" in Texas and Minnesota, and
has since branched out with its couples-only club "Encounters" and
its new "Club Onyx," targeting an African-American audience.
E-Bay style auction website, NaughtyBids.com,
provides a marketplace for adult items, while another Internet site
sells subscription-based pornography.
meeting lasted only a few minutes, though shareholders lingered
as scantily-clad dancers began to emerge and circulate among the
just-arriving lunchtime crowd.
admits that size is Rick's biggest problem, since its market capitalization
of less than $10 million is too modest to attract the investment
we hit a market cap of $50 million, everything changes," Langan
told reporters, adding the company would probably have to double
its forecasted annual revenue of about $15.9 million to reach that
stock price has stood near $2.54, up from $1.74 at the end of 2003,
but was steady with levels four months ago.
forces such as the downturn from the September 11, 2001 attacks
on New York and Washington have proven as difficult to manage as
religious and community foes, who pushed through a 1997 zoning rule
in Houston requiring the clubs be at least 1,500 feet from a residential
area, school, church, park or day-care center.
company has taken the battle against that law all the way to the
U.S. Supreme Court, which has yet to issue a decision.
also narrowly avoided a stock delisting in 1998, when its share
price on the NASDAQ exchange fell to a low of 50 cents from nearly
$9 in just four months.
happened because a Wall Street short-seller was driving down the
company's stock, hoping to score big profits if it drove the stock
off the board, Langan said.
company survived the attack with a well-timed press release and
the help of the the late 1990s technology bubble that sent nearly
any Internet company's stock soaring.
we said was that we were going to look at the Internet, and our
stock jumped to about $5," Langan told reporters.