Rick's Cabaret International, Inc. Reports $22.8 Million In Revenue For Second Quarter; Adjusted Ebitda Rises To $6.6 Million
FOR IMMEDIATE RELEASE
RICK’S CABARET INTERNATIONAL, INC. REPORTS $22.8 MILLION IN REVENUE FOR SECOND QUARTER; ADJUSTED EBITDA RISES TO $6.6 MILLION
HOUSTON – (May 10, 2011) –
Rick’s Cabaret International, Inc. (NASDAQ:RICK), the nation’s leading group of upscale gentlemen’s clubs, today reported total revenues for its second quarter ended March 31, 2011 of $22.8 million, compared with $22.4 million for the same period last year. Rick’s Cabaret had total net income for the quarter of $2.9 million, the same as in the previous year, with fully diluted earnings per share of 29 cents, compared with 31 cents last year. Adjusted EBITDA (earnings before income tax, depreciation and amortization) for the quarter rose to $6.6 million from $6.4 million in 2010.
The company will hold an investor conference call at 4:30 p.m. EDT today at which President and CEO
Eric Langan will discuss the results. The toll-free domestic call in number is 877-407-8033 and a
webcast of the call is available at
www.ricksinvestor.com or
http://www.investorcalendar.com/IC/CEPage.asp?ID=164373. Following the call the company will hold a “Due Diligence Ball” at its New York City Club (50 West 33
rd Street) for investors and other interested persons.
“We had a solid quarter and I’m looking forward to discussing it in detail with our investors today,” said Mr. Langan. “Despite a big ice storm in Texas that weakened revenues anticipated from this year’s Super Bowl compared with 2010, we still did very well for the quarter and we are happy with our overall club results. We are also pleased with the Adjusted EBITDA number, which is a key metric we use to measure our performance.
“We have begun to eliminate losses at our Las Vegas location through the sharp reduction in operations we announced last month as we seek a buyer for the club. We believe that we did everything possible to make the club work, but the Las Vegas market remains troubled and we believe it is now in our shareholders’ best interests to exit,” Mr. Langan said. “Once our exit from this market it is complete we will have a better idea how we will do for the remainder of the year.”
For the six-month period ending March 31st Rick’s Cabaret had consolidated total revenues of $43.7 million compared to $42.4 million for the six months ended March 31, 2010. Six month net income attributable to Rick’s Cabaret International Inc. was $5.0 million, compared with $3.7 million during the first six months of last year. Adjusted EBITDA for the six months ended March 31st was $11.9 million, compared with $9.5 million last year.
Note: Adjusted EBITDA is a financial statement measure that was not derived in accordance with GAAP. The company uses Adjusted EBITDA (earnings before interest expense, income taxes, depreciation, amortization and impairment charges) as a non-GAAP performance measure. In calculating adjusted EBITDA, the company excludes the largest recurring non-cash charge, depreciation, amortization and impairment charges. Adjusted EBITDA provides a core operational performance measurement that compares results without the need to adjust for Federal, state and local taxes, which have considerable variation between domestic jurisdictions. Also, the company excludes interest cost in the calculation of Adjusted EBITDA. The results are, therefore, without consideration of financing alternatives of capital employed. The company uses Adjusted EBITDA as one guideline to assess unleveraged performance return on investments. Adjusted EBITDA is also the target benchmark for acquisitions of nightclubs.
RICK'S CABARET INTERNATIONAL, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
ASSETS
|
(in thousands, except per share data)
|
|
|
March 31,
2011
|
|
September 30, 2010
|
|
|
Assets
|
|
|
(UNAUDITED)
|
|
|
|
|
Current assets:
|
|
|
|
|
|
|
|
|
Cash and cash equivalents
|
|
|
$ 17,344
|
|
|
|
$ 18,817
|
|
|
Accounts receivable:
|
|
|
|
|
|
|
|
|
|
Trade, net
|
|
|
859
|
|
|
|
662
|
|
|
Other, net
|
|
|
284
|
|
|
|
206
|
|
|
Marketable securities
|
|
|
485
|
|
|
|
-
|
|
|
Inventories
|
|
|
1,136
|
|
|
|
1,100
|
|
|
Deferred tax asset
|
|
|
2,037
|
|
|
|
1,503
|
|
|
Prepaid expenses and other current assets
|
|
|
1,620
|
|
|
|
871
|
|
|
Assets of nightclub held for sale
|
|
|
3,035
|
|
|
|
3,160
|
|
|
Total current assets
|
|
|
26,800
|
|
|
|
26,319
|
|
|
|
|
|
|
|
|
|
|
|
|
Property and equipment, net
|
|
|
59,632
|
|
|
|
57,915
|
|
|
|
|
|
|
|
|
|
|
|
|
Other assets:
|
|
|
|
|
|
|
|
|
|
Goodwill and indefinite lived intangibles, net
|
|
|
63,226
|
|
|
|
62,076
|
|
|
Definite lived intangibles, net
|
|
|
916
|
|
|
|
1,139
|
|
|
Other
|
|
|
1,064
|
|
|
|
922
|
|
|
Total other assets
|
|
|
65,206
|
|
|
|
64,137
|
|
|
|
|
|
|
|
|
|
|
|
|
Total assets
|
|
|
$ 151,638
|
|
|
|
$ 148,371
|
|
LIABILITIES AND STOCKHOLDERS’ EQUITY
|
(in thousands, except per share data)
|
|
|
|
March 31,
2011
|
|
|
September 30,
2010
|
|
|
|
Liabilities and Stockholders' Equity
|
|
|
|
|
(UNAUDITED)
|
|
|
|
|
|
|
Current liabilities:
|
|
|
|
|
|
|
|
|
|
|
|
Accounts payable
|
$
|
|
|
$
|
$ 740
|
|
$
|
$ 700
|
|
|
|
Accrued liabilities
|
|
|
|
|
4,369
|
|
|
4,414
|
|
|
|
Texas patron tax liability
|
|
|
|
|
5,446
|
|
|
3,955
|
|
|
|
Current portion of derivative liabilities
|
|
|
|
|
1,015
|
|
|
1,276
|
|
|
|
Current portion of long-term debt
|
|
|
|
|
6,223
|
|
|
5,461
|
|
|
|
Liabilities of nightclub held for sale
|
|
|
|
|
2,723
|
|
|
2,582
|
|
|
|
Total current liabilities
|
|
|
|
|
20,516
|
|
|
18,388
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Deferred tax liability
|
|
|
|
|
16,818
|
|
|
15,566
|
|
|
|
Other long-term liabilities
|
|
|
|
|
752
|
|
|
719
|
|
|
|
Long-term debt
|
|
|
|
|
32,078
|
|
|
34,803
|
|
|
|
Derivative liabilities at fair value, less current portion
|
|
|
|
|
417
|
|
|
1,243
|
|
|
|
Total liabilities
|
|
|
|
|
70,581
|
|
|
70,719
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Commitments and contingencies
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Temporary equity - Common stock, subject to put rights 102 and 198 shares, respectively
|
|
|
|
|
3,676
|
|
|
4,366
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
PERMANENT STOCKHOLDERS' EQUITY:
|
|
|
|
|
|
|
|
|
|
|
|
Preferred stock, $.10 par, 1,000 shares authorized; none issued and outstanding
|
|
|
|
|
-
|
|
|
-
|
|
|
|
Common stock, $.01 par, 20,000 shares authorized; 9,677 and 9,766 shares issued and outstanding, respectively
|
|
|
|
|
97
|
|
|
98
|
|
|
|
Additional paid-in capital
|
|
|
|
|
61,447
|
|
|
62,326
|
|
|
|
Accumulated other comprehensive loss
|
|
|
|
|
(20)
|
|
|
-
|
|
|
|
Retained earnings
|
|
|
|
|
12,512
|
|
|
7,515
|
|
|
|
Total Rick’s permanent stockholders’ equity
|
|
|
|
|
74,036
|
|
|
69,939
|
|
|
|
Noncontrolling interests
|
|
|
|
|
3,345
|
|
|
3,347
|
|
|
|
Total permanent stockholders’ equity
|
|
|
|
|
77,381
|
|
|
73,286
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total liabilities and stockholders’ equity
|
|
|
|
|
$ 151,638
|
|
$
|
$ 148,371
|
|
|
RICK'S CABARET INTERNATIONAL, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
|
(in thousands, except per share data)
|
FOR THE THREE MONTHS
ENDED MARCH 31,
|
|
FOR THE SIX MONTHS
ENDED MARCH 31,
|
|
|
2011
|
|
2010
|
|
2011
|
|
2010
|
|
|
(UNAUDITED)
|
|
(UNAUDITED)
|
|
Revenues:
|
|
|
|
|
|
|
|
|
Sales of alcoholic beverages
|
$ 9,205
|
|
$ 9,029
|
|
$ 17,564
|
|
$ 17,078
|
|
Sales of food and merchandise
|
1,982
|
|
1,782
|
|
3,766
|
|
3,372
|
|
Service revenues
|
10,396
|
|
10,225
|
|
19,807
|
|
19,518
|
|
Internet revenues
|
120
|
|
144
|
|
246
|
|
289
|
|
Media revenues
|
192
|
|
311
|
|
409
|
|
567
|
|
Other
|
944
|
|
948
|
|
1,905
|
|
1,620
|
|
Total revenues
|
22,839
|
|
22,439
|
|
43,697
|
|
42,444
|
|
|
|
|
|
|
|
|
|
|
Operating expenses:
|
|
|
|
|
|
|
|
|
Cost of goods sold
|
2,807
|
|
2,639
|
|
5,325
|
|
5,096
|
|
Salaries and wages
|
4,762
|
|
4,411
|
|
9,438
|
|
8,722
|
|
Stock compensation
|
-
|
|
44
|
|
-
|
|
88
|
|
Other general and administrative:
|
|
|
|
|
|
|
|
|
Taxes and permits
|
3,483
|
|
3,339
|
|
6,553
|
|
6,179
|
|
Charge card fees
|
374
|
|
370
|
|
738
|
|
717
|
|
Rent
|
1,076
|
|
1,028
|
|
2,155
|
|
2,051
|
|
Legal and professional
|
523
|
|
759
|
|
1,009
|
|
1,409
|
|
Advertising and marketing
|
1,176
|
|
1,507
|
|
2,359
|
|
4,445
|
|
Insurance
|
310
|
|
260
|
|
617
|
|
524
|
|
Utilities
|
425
|
|
415
|
|
831
|
|
828
|
|
Depreciation and amortization
|
1,125
|
|
903
|
|
2,207
|
|
1,745
|
|
Other
|
1,663
|
|
1,632
|
|
3,240
|
|
3,177
|
|
Total operating expenses
|
17,724
|
|
17,307
|
|
34,472
|
|
34,981
|
|
Operating income
|
5,115
|
|
5,132
|
|
9,225
|
|
7,463
|
|
|
|
|
|
|
|
|
|
|
Other income (expense):
|
|
|
|
|
|
|
|
|
Interest income
|
44
|
|
6
|
|
56
|
|
9
|
|
Interest expense
|
(1,110)
|
|
(1,079)
|
|
(2,234)
|
|
(2,108)
|
|
Other
|
-
|
|
(3)
|
|
-
|
|
(3)
|
|
Gain on change in fair value of derivative instruments
|
333
|
|
385
|
|
481
|
|
429
|
|
Income before income taxes
|
4,382
|
|
4,441
|
|
7,528
|
|
5,790
|
|
Income taxes
|
1,406
|
|
1,423
|
|
2,423
|
|
1,917
|
|
Net income
|
2,976
|
|
3,018
|
|
5,105
|
|
3,873
|
|
Less: net income attributable to noncontrolling interests
|
(53)
|
|
(73)
|
|
(107)
|
|
(146)
|
|
Net income attributable to Rick’s Cabaret International, Inc.
|
$ 2,923
|
|
$ 2,945
|
|
$ 4,998
|
|
$ 3,727
|
|
Basic earnings per share attributable to Rick’s shareholders:
|
|
|
|
|
|
|
|
|
Net income
|
$ 0.29
|
|
$ 0.31
|
|
$ 0.50
|
|
$ 0.40
|
|
Diluted earnings per share attributable to Rick’s shareholders:
|
|
|
|
|
|
|
|
|
Net income
|
$ 0.29
|
|
$ 0.31
|
|
$ 0.50
|
|
$ 0.40
|
|
Weighted average number of common shares outstanding:
|
|
|
|
|
|
|
|
|
Basic
|
9,937
|
|
9,361
|
|
9,990
|
|
9,366
|
|
Diluted
|
10,771
|
|
10,238
|
|
10,004
|
|
9,394
|
About Rick’s Cabaret: Rick’s Cabaret International, Inc. (NASDAQ: RICK) is home to 23 upscale adult nightclubs serving primarily businessmen and professionals that offer live entertainment, dining and bar operations. Nightclubs in New York City, Miami, Philadelphia, 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 couplestouch.com as well as a network of online adult auction sites under the flagship URL naughtybids.com. Rick’s Cabaret common stock is traded on NASDAQ under the symbol RICK. For further information contact [email protected] or visit www.ricksinvestor.com.
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.Additional factors that could cause the Company’s results to differ materially from those described in the forward-looking statements are described in forms filed with the SEC from time to time and available at www.ricksinvestor.com or on the SEC's internet website at www.sec.gov. 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.ricksinvestor.com.