Rick’s Cabaret International, Inc. (NASDAQ:RICK) today
reported financial results for its fiscal year ending September 30,
2010. The company had consolidated total revenues of $83 million,
an increase of 9.4 percent over the $75.8 million reported in the
previous year. The company reported a loss from continuing
operations of $7.6 million for the year, primarily because of
non-cash balance sheet impairment charges of $20.5 million,
compared with 2009 income from continuing operations $5.5
million.
“Our income statement was dramatically affected by the
impairment charges incurred chiefly because of losses at the Las
Vegas club we acquired in 2008 and we believe that the growth in
our adjusted EBITDA to $17.6 million is a more realistic way to
look at the year,” said Eric Langan, President and CEO of
Rick’s Cabaret International, Inc.
Mr. Langan said the company generated cash flow from operations
of $17.3 million compared with $8.9 million in 2009, despite the
Las Vegas losses, benefitting from continuing strong performances
of Rick’s Cabaret in New York City and Tootsie’s Cabaret in
Miami.
“We think 2011 is looking very good,” Mr. Langan said. “We plan
to add four more locations in 2011, staying on our goal of making
at least one acquisition per quarter. In addition we will benefit
from the Super Bowl in February in Dallas, where we will
have a terrific cluster of seven clubs ready to welcome fans.”
Other highlights from results for the year ending September 30,
2010 include:
- The company’s adjusted EBITDA for 2010
$17.6 million, compared with $16.0 million in 2009. Diluted
adjusted EBITDA per common share was $1.84 compared with $1.70,
based on shares outstanding of 9.7 million and 9.4 million
respectively. The adjusted EBITDA calculation (earnings before
interest expense, income taxes, depreciation, amortization and
impairment charges) is a non-GAAP performance measure that excludes
the largest recurring non-cash charges (depreciation, amortization
and impairment) and provides a core operational performance
measurement that compares results without the need to adjust for
Federal, state and local taxes that have considerable variation
between domestic jurisdictions. Interest cost is also excluded from
the calculation of adjusted EBITDA. The results are, therefore,
without consideration of financing alternatives of capital
employed. Adjusted EBITDA is one guideline to assess unleveraged
performance return on the company’s investments and is also the
target benchmark for acquisitions of nightclubs.
- The 9.4 per cent increase in total
revenues was driven by revenues generated at new clubs and an
overall 7.0 percent increase from clubs open more than one year,
especially the New York location, offset by a decrease in revenues
from the Las Vegas club.
- The Las Vegas club is still not
profitable even with the taxi marketing costs under more control
than in the prior year, due principally to decreased revenues since
the Las Vegas market collapsed after September 2008. The company
noted that the club it acquired had revenues of approximately $16.6
million in the year ended July 31, 2008, compared to $8.8 million
and $9.7 million for the years ended September 30, 2010 and 2009.
The club had adjusted EBITDA of approximately ($37,000) and ($1.4)
million for the years ended September 30, 2010 and 2009,
respectively, compared to pro forma EBITDA income of $2.6 million
for the year ended July 31, 2008.
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 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 ir@ricks.com
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. 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.
Statement of Operations and Balance Sheet Are Available
at www.ricksinvest.com
RICK'S CABARET INTERNATIONAL, INC. CONSOLIDATED
STATEMENTS OF OPERATIONS Year Ended
September 30,
(in thousands,
except per share data)
2010 2009
2008 Revenues: Sales of alcoholic beverages $
33,101 $ 28,679 $ 21,764 Sales of food and merchandise 6,850 6,203
5,145 Service revenues 37,725 36,310 28,362 Internet revenues 562
641 716 Media revenues 1,440 1,404 801 Other 3,309
2,592 2,220 Total revenues 82,987
75,829 59,008 Operating expenses: Cost of goods sold 9,927
8,895 6,796 Salaries and wages 17,767 16,429 13,485 Stock-based
compensation 405 96 157 Other general and administrative: Taxes and
permits 12,367 9,396 7,365 Charge card fees 1,434 1,612 1,060 Rent
4,108 3,716 2,371 Legal and professional 3,071 2,963 1,629
Advertising and marketing 6,740 8,174 2,510 Depreciation and
amortization 3,743 3,423 2,439 Insurance 1,125 1,100 845 Utilities
1,721 1,646 1,218 Impairment of assets 20,511 823 - Other
6,441 5,826 5,147 Total
operating expenses 89,360 64,099
45,022 Income (loss) from operations (6,373 ) 11,730
13,986 Other income (expense): Interest income 18 16 60
Interest expense (4,023 ) (3,358 ) (2,713 ) Interest expense – loan
origination costs (450 ) (65 ) - Gain (loss) on change in fair
value of derivative instruments (31 ) 145 - Gain (loss) on sale of
property and other (3 ) 181 -
Income (loss) from continuing operations before income taxes
(10,862 ) 8,649 11,333 Income taxes (3,221 ) 2,854
3,532 Income (loss) from continuing
operations (7,641 ) 5,795 7,801 Loss from discontinued operations,
net of income taxes (57 ) (293 ) (171 )
Net income (loss) (7,698 ) 5,502 7,630 Less: net income
attributable to noncontrolling interests (260 ) (294
) 31
Net income (loss) attributable to Rick’s
Cabaret International, Inc.
$ (7,958 ) $ 5,208 $ 7,661 Basic earnings
(loss) per share attributable to Rick’s shareholders: Income (loss)
from continuing operations $ (0.81 ) $ 0.59 $ 0.99 Loss from
discontinued operations (0.01 ) (0.03 ) (0.02
) Net income (loss) $ (0.82 ) $ 0.56 $ 0.97
Diluted earnings (loss) per share
attributable to Rick’s shareholders:
Income (loss) from continuing operations $ (0.81 ) $ 0.58 $ 0.93
Loss from discontinued operations (0.01 ) (0.03 )
(0.02 ) Net income (loss) $ (0.82 ) $ 0.55 $ 0.91
Weighted average number of common shares outstanding:
Basic 9,697 9,266 7,931
Diluted 9,697 9,428 8,413
See accompanying notes to consolidated financial statements.
RICK'S CABARET INTERNATIONAL, INC. CONSOLIDATED
BALANCE SHEETS September 30,
(in thousands,
except share data)
2010 2009 Assets Current
assets: Cash and cash equivalents $ 19,168 $ 12,850 Accounts
receivable: Trade, net 888 777 Other, net 204 137 Inventories 1,264
1,232 Deferred tax asset 1,504 120 Prepaid expenses and other
current assets 951 726 Assets of discontinued operations 148
210 Total current assets 24,127 16,052 Property and
equipment, net 59,559 48,300 Other assets: Goodwill and
indefinite lived intangibles, net 62,076 78,331 Definite lived
intangibles, net 1,197 1,161 Other 1,412 1,232 Total
other assets 64,685 80,724 Total assets $
148,371 $ 145,076
Liabilities and Stockholders'
Equity Current liabilities: Accounts payable $ 731 $ 788
Accrued liabilities 4,529 2,414 Texas patron tax liability 3,955
1,163 Current portion of derivative liabilities 1,276 886 Current
portion of long-term debt 7,883 5,856 Liabilities of discontinued
operations 47 52 Total current liabilities 18,421
11,159 Deferred tax liability 15,566 18,581 Other long-term
liabilities 719 642 Long-term debt 34,803 31,956 Derivative
liabilities at fair value, less current portion 1,243
2,456 Total liabilities 70,752 64,794 Commitments and
contingencies Temporary equity - Common stock, subject to
put rights 198 and 317 shares, respectively 4,366 6,871
PERMANENT STOCKHOLDERS' EQUITY: Preferred stock, $.10 par, 1,000
shares authorized; none issued and outstanding - -
Common stock, $.01 par, 20,000 shares
authorized; 9,766 and 8,880 shares issued and
outstanding, respectively
98 89 Additional paid-in capital 62,326 54,530 Retained earnings
7,515 15,473 Total Rick’s permanent stockholders’
equity 69,939 70,092 Noncontrolling interests 3,314
3,319 Total permanent stockholders’ equity 73,253
73,411
Total liabilities and stockholders’
equity
$ 148,371 $ 145,076 See accompanying notes to consolidated
financial statements.
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