Rick's Cabaret International, Inc. Reports Net Income Of $2.94 Million, 30 Cents Per Share, For Second Quarter Ending March 31st
Total Revenues Rise 21.9% to $22.4 Million
HOUSTON - (May 11, 2010) - Rick's Cabaret International, Inc. [NASDAQ-GM:RICK] the nation's leading chain of upscale gentlemen's clubs, today reported net income for its second quarter ending March 31, 2010 of $2.94 million or 30 cents per share, compared with $839,471 or nine cents per share in the same quarter in 2009.
The company incurred one-time costs of $246,300 related to now-terminated negotiations for the acquisition of VCG Holdings. Without these costs, net income attributable to Rick's Cabaret would have been two cents higher per share for the second quarter.
"Our improved performance in the second quarter is the result of higher sales as well the increased focus on our bottom line that we announced during our last conference call," said Eric Langan, President and CEO of Rick's Cabaret. "Decreased marketing costs in Las Vegas and in Dallas/Fort Worth also contributed to improved results," he said.
Mr. Langan will discuss the results in detail during a conference call and webcast today at 4:30 p.m. EDT. The call is being webcast by Vcall and can be accessed at the Rick's Cabaret website, www.ricks.com or www.InvestorCalendar.com. The live toll free participant dial In number is (877) 407-8033, while international callers should use (201) 689-8033. The domestic toll free replay number is (877) 660-6853 while international callers should use (201) 612-7415. Replay passcodes required for playback are: Account #: 286 and Conference ID #: 350402. Details are also available in the company’s Form 10-Q filed with the SEC and available on the company's investor webpage at www.ricksinvestor.com.
The company attributed the revenue increase of 21.9 percent primarily to increases in same club sales. Revenues for same-location-same-period of club continuing operations increased 14.9% to $20 million in the second quarter compared with 2009, partly as a result of increased business during the Super Bowl in Miami and the NBA All Star Game in Dallas in February 2010. The company's two new locations also contributed to the overall revenue increase.
Legal and professional expenses were lower, following the settlement in the first quarter of a labor lawsuit in Minnesota, which had been accrued in the quarter ended September 30, 2009.
The company also reduced before tax losses at certain clubs losing money during the second quarter to approximately $391,000, compared to $1.3 million for the quarter ended December 31, 2009 and $900,000 for the March 31, 2009 quarter. The significant losing club in the prior quarter was Rick's Cabaret Las Vegas, which lost $500,000 in the first quarter ended December 31, 2009 and $633,000 for the quarter ended March 31, 2009. The Las Vegas club made a profit of approximately $150,000 before income taxes for the quarter ended March 31, 2010.
RICK'S CABARET INTERNATIONAL, INC. AND
SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
ASSETS
|
MARCH 31, 2010 |
|
SEPTEMBER 30, 2009 |
|
(UNAUDITED) |
|
|
CURRENT ASSETS: |
|
|
|
Cash
and cash equivalents |
$ 12,218,919 |
|
$ 12,850,250 |
Accounts
receivable |
|
|
|
Trade,
net |
836,274 |
|
776,721 |
Other,
net |
394,797 |
|
136,761 |
Marketable
securities |
1,121,993 |
|
- |
Inventories |
1,304,838 |
|
1,231,353 |
Prepaid
expenses and other current assets |
1,387,346 |
|
846,430 |
Assets
of discontinued operations |
189,380 |
|
210,032 |
Total
current assets |
17,453,547 |
|
16,051,547 |
|
|
|
|
PROPERTY AND
EQUIPMENT: |
|
|
|
Buildings,
land and leasehold improvements |
48,226,361 |
|
46,577,101 |
Furniture
and equipment |
15,807,386 |
|
12,289,630 |
|
64,033,747 |
|
58,866,731 |
|
|
|
|
Accumulated
depreciation |
(12,080,645) |
|
(10,566,656) |
Total
property and equipment, net |
51,953,102 |
|
48,300,075 |
|
|
|
|
OTHER ASSETS: |
|
|
|
Goodwill
and indefinite lived intangibles |
80,345,628 |
|
78,330,914 |
Definite
lived intangibles, net |
1,170,062 |
|
1,161,433 |
Other |
1,414,289 |
|
1,232,330 |
Total
other assets |
82,929,979 |
|
80,724,677 |
Total
assets |
$ 152,336,628 |
|
$ 145,076,299 |
RICK'S CABARET INTERNATIONAL, INC. AND
SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
LIABILITIES AND STOCKHOLDERS' EQUITY
|
|
MARCH 31,
2009 |
|
SEPTEMBER 30,
2009 |
|
|
(UNAUDITED) |
|
|
CURRENT
LIABILITIES: |
|
|
|
|
Accounts payable – trade |
|
$ 960,373 |
|
$ 787,982 |
Accrued liabilities |
|
2,813,531 |
|
2,413,988 |
Patron tax liability |
|
2,571,925 |
|
1,162,960 |
Current portion of derivative
liabilities, at fair value |
|
915,000 |
|
885,600 |
Current portion of long-term debt |
|
7,080,749 |
|
5,855,727 |
Liabilities of discontinued operations |
|
39,951 |
|
51,799 |
Total current liabilities |
|
14,381,529 |
|
11,158,056 |
|
|
|
|
|
Deferred tax
liability |
|
20,011,360 |
|
18,581,344 |
Other
long-term liabilities |
|
680,617 |
|
641,800 |
Long-term
debt, less current portion |
|
32,022,296 |
|
31,956,856 |
Derivative
liabilities at fair value, long-term portion |
|
1,760,960 |
|
2,455,992 |
Total liabilities |
|
68,856,762 |
|
64,794,048 |
|
|
|
|
|
COMMITMENTS
AND CONTINGENCIES |
|
|
|
|
|
|
|
|
|
TEMPORARY EQUITY – Common stock,
subject to put rights (271,500 and 317,000 shares) |
|
5,915,000 |
|
6,871,000 |
|
|
|
|
|
PERMANENT
STOCKHOLDERS' EQUITY: |
|
|
|
|
Preferred stock, $.10 par, 1,000,000
shares authorized; none issued and outstanding |
|
- |
|
- |
Common stock, $.01 par, 20,000,000
shares authorized; 8,921,395 and 8,879,566 shares issued |
|
89,214 |
|
88,796 |
Additional paid-in capital |
|
54,846,125 |
|
54,530,319 |
Accumulated other comprehensive income |
|
113,038 |
|
- |
Retained earnings |
|
19,200,100 |
|
15,472,747 |
Total Rick’s permanent stockholders’
equity |
|
74,248,477 |
|
70,091,862 |
Noncontrolling
interests |
|
3,316,389 |
|
3,319,389 |
Total
permanent stockholders’ equity |
|
77,564,866 |
|
73,411,251 |
|
|
|
|
|
Total liabilities and stockholders’
equity |
|
$ 152,336,628 |
|
$ 145,076,299 |
RICK'S CABARET
INTERNATIONAL, INC. AND SUBSIDIARIES
CONSOLIDATED
STATEMENTS OF INCOME
|
|
|
FOR THE SIX MONTHS
ENDED MARCH 31, |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenues: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total revenues |
22,439,385 |
|
18,405,098 |
|
42,444,401 |
|
35,538,791 |
|
|
|
|
|
|
|
|
Operating
expenses: |
|
|
|
|
|
|
|
Cost of goods sold |
2,639,473 |
|
2,212,112 |
|
5,096,011 |
|
4,441,585 |
Salaries and wages |
4,411,424 |
|
3,995,568 |
|
8,721,729 |
|
8,216,454 |
Stock compensation |
44,037 |
|
20,044 |
|
88,074 |
|
40,088 |
Other general and
administrative: |
|
|
|
|
|
|
|
Taxes and permits |
3,334,371 |
|
2,395,423 |
|
6,169,934 |
|
4,714,723 |
Charge card fees |
369,685 |
|
447,948 |
|
715,873 |
|
786,488 |
Rent |
1,027,577 |
|
920,823 |
|
2,051,111 |
|
1,869,185 |
Legal and professional |
759,463 |
|
810,513 |
|
1,409,072 |
|
1,314,562 |
Advertising and
marketing |
1,506,831 |
|
1,696,161 |
|
4,445,004 |
|
2,868,533 |
Insurance |
259,279 |
|
267,128 |
|
521,131 |
|
506,365 |
Utilities |
410,878 |
|
374,393 |
|
816,747 |
|
803,311 |
Impairment of
nightclub assets |
- |
|
823,090 |
|
- |
|
823,090 |
Depreciation and
amortization |
892,440 |
|
858,611 |
|
1,724,418 |
|
1,702,964 |
|
|
|
|
|
|
|
|
Total operating
expenses |
17,285,945 |
|
16,123,798 |
|
34,935,614 |
|
30,799,376 |
Operating
income |
5,153,440 |
|
2,281,300 |
|
7,508,787 |
|
4,739,415 |
|
|
|
|
|
|
|
|
Other
income (expense): |
|
|
|
|
|
|
|
Interest income |
5,582 |
|
1,659 |
|
9,255 |
|
7,393 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income
from continuing operations before income taxes |
4,462,055 |
|
1,474,297 |
|
5,836,769 |
|
3,095,941 |
Income
taxes |
|
|
|
|
1,932,626 |
|
1,087,423 |
Income
from continuing operations |
|
|
|
|
3,904,143 |
|
2,008,518 |
Loss
from discontinued operations, net of income taxes |
(13,620) |
|
|
|
(29,790) |
|
(231,215) |
Net
income |
3,018,165 |
|
912,971 |
|
3,874,353 |
|
1,777,303 |
Less:
net income attributable to noncontrolling interests |
(73,500) |
|
(73,500) |
|
(147,000) |
|
(147,000) |
Net
income attributable to Rick’s Cabaret International, Inc. |
$ 2,944,665 |
|
$ 839,471 |
|
$ 3,727,353 |
|
$ 1,630,303 |
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
earnings (loss) per share attributable to Rick’s shareholders: |
|
|
|
|
|
|
|
Income from continuing
operations |
$ 0.32 |
|
$ 0.09 |
|
$ 0.40 |
|
$ 0.20 |
Loss from discontinued operations |
$ (0.00) |
|
$ (0.00) |
|
$ (0.00) |
|
$ (0.02) |
Net income |
$ 0.31 |
|
$ 0.09 |
|
$ 0.40 |
|
$ 0.17 |
Diluted earnings (loss) per share attributable to
Rick’s shareholders: |
|
|
|
|
|
|
|
Income from continuing
operations |
$ 0.31 |
|
$ 0.09 |
|
$ 0.40 |
|
$ 0.20 |
Loss from discontinued operations |
$ (0.00) |
|
$ (0.00) |
|
$ (0.00) |
|
$ (0.02) |
Net income |
$ 0.30 |
|
$ 0.09 |
|
$ 0.40 |
|
$ 0.17 |
Weighted average number of common shares
outstanding: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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|
Forward Looking Statements
This document contains forward-looking statements that involve a number of risks and uncertainties that could cause the company's actual results to differ materially from those indicated in this document, including the risks and uncertainties associated with operating and managing an adult business, the business climates in cities where it operates, the success or lack thereof in launching and building the company's businesses, risks and uncertainties related to the operational and financial results of our Web sites, conditions relevant to real estate transactions, and numerous other factors such as laws governing the operation of adult entertainment businesses, competition and dependence on key personnel. Rick's has no obligation to update or revise the forward-looking statements to reflect the occurrence of future events or circumstances. For further information visit www.ricks.com.
About Rick's Cabaret:
Rick's Cabaret International, Inc. (NASDAQ: RICK) is home to upscale adult nightclubs serving primarily businessmen and professionals that offer live entertainment, dining and bar operations. Nightclubs in New York City, Miami, Philadelphia, New Orleans, Charlotte, Dallas, Houston, Minneapolis and other cities operate under the names "Rick's Cabaret," "XTC," "Club Onyx" and "Tootsie's Cabaret". Sexual contact is not permitted at these locations. Rick's Cabaret also operates a media division, ED Publications, and owns the adult internet membership website www.couplestouch.com as well as a network of online adult auction sites under the flagship URL www.naughtybids.com. Rick's Cabaret common stock is traded on NASDAQ under the symbol RICK. For further information contact [email protected].
Contact: Allan Priaulx, 212-338-0050, [email protected]