HOUSTON, Dec. 14, 2011 /PRNewswire/ -- Rick's Cabaret International, Inc. (NASDAQ: RICK), the nation's leading group of upscale adult nightclubs, today reported its revenue for the year ended Sept. 30, 2011 rose to $83.5 million, a 12.7 percent increase over the $74.0 million in 2010. Net income was $7.8 million, compared with a loss of $8.0 million in the previous year. Fully diluted earnings per share were $.79 vs. a loss of $.82 last year.
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"Our strong fiscal 2011 results reflect a return to more normal growth patterns for the company across the board and the fact that we are no longer impacted by the drag from the now discontinued operation in Las Vegas," said Eric Langan, President and CEO of Rick's Cabaret, which operates 23 clubs around the country. "We are continuing the momentum we built in fiscal 2011 and we look forward to another strong year in 2012."
Mr. Langan said the revenue improvement included a 4.9 percent increase in sales at clubs open more than one year, particularly the New York City location, and about $6.1 million from new clubs acquired in 2010 and 2011. The results also reflect the closing of the Las Vegas club in April 2011, which was shut after determining it could not be made viable in the foreseeable future.
In a Form 10-K filed with the SEC today, the company also reported results for its fourth quarter ending September 30th, showing revenues of $21.5 million compared with $19.1 million for the same quarter in the prior year; net income of $2.0 million, compared with a loss of $12.5 million in 2010; fully diluted earnings per share of 20 cents, versus a loss of $1.24 last year.
Key factors in the full fiscal year 2011 results include:
- Adjusted EBITDA (earnings before interest expense, income taxes, depreciation, amortization, and impairment charges) was $23.6 million in 2011, compared with $17.9 million last year. The company uses non-GAAP adjusted EBITDA as a core operational performance measurement it feels more accurately reflects the performance of the company in part because it allows companies to express results without the need to adjust for Federal, state and local taxes, which vary considerably by jurisdiction. (See Note below.)
- Operating margins (excluding impairment) were 22.5 percent for the year, compared to 20.0 percent in the prior year.
- Income from operations for same-location-same-period nightclubs open more than a year increased by 18.3%.
- Net cash provided by operating activities increased to $18.9 million from $17.3 million in the prior year.
- Interest expense declined to $3.9 million from $4.0 million as the company amortized loan balances. As of September 30, 2011, the balance of long-term debt was $35.6 million compared to $42.7 million a year earlier.
- Legal and professional fees declined to $2.3 million from $3.0 million, reflecting a decrease in costs related to litigation for claims under the Fair Labor Standards Act.
- No continuing operations assets were impaired in 2011, compared with $3.6 million in impairment charges in 2010.
- Revenue improvements were noted in all three of the major revenue categories tracked by the company: alcoholic beverage sales were $32.6 million compared with $28.5 million last year; food and merchandise was $7.4 million compared with $6.3 million; service revenues were $38.2 million compared with $34.2 million.
Note: Adjusted EBITDA is a financial statement measure that was not derived in accordance with GAAP. We use Adjusted EBITDA (earnings before interest expense, income taxes, depreciation, amortization and impairment charges) as a non-GAAP performance measure. In calculating Adjusted EBITDA, we exclude our 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, we exclude interest cost in our calculation of Adjusted EBITDA. The results are, therefore, without consideration of financing alternatives of capital employed. We use Adjusted EBITDA as one guideline to assess our unleveraged performance return on our investments. Adjusted EBITDA is also the target benchmark for our acquisitions of nightclubs.
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 [email protected].
Forward-looking Statements: Certain statements contained in this release regarding Rick's Cabaret future operating results or performance or business plans or prospects and any other statements not constituting historical fact are "forward-looking statements" subject to the safe harbor created by the Private Securities Litigation Reform Act of 1995. Where possible, the words "believe," "expect," "anticipate," "intent," "would," "will," "planned," "estimated," "potential," "goal," "outlook," and similar expressions, as they relate to the company or its management have been used to identify such forward-looking statements. All forward-looking statements reflect only current beliefs and assumptions with respect to future business plans, prospects, decisions and results, and are based on information currently available to the company. Accordingly, the statements are subject to significant risks, uncertainties and contingencies, which could cause the company's actual operating results, performance or business plans or prospects to differ materially from those expressed in, or implied by, these statements. Such risks, uncertainties and contingencies include, but are not limited to, risks and uncertainties associated with (i) operating and managing an adult business, (ii) the business climates in cities where the company operates, (iii) the success or lack thereof in launching and building the company's businesses, (iv) the operational and financial results of the company's adult nightclubs, (v) conditions relevant to real estate transactions, (vi) the loss of key personnel, and (vii) laws governing the operation of adult entertainment businesses. 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. Unless required by law, Rick's Cabaret does not undertake any obligation to update publicly any forward-looking statements, whether as a result of new information, future events, or otherwise.
Consolidated Balance Sheets and Statement of Operations Follow |
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RICK'S CABARET INTERNATIONAL, INC. |
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September 30, |
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(in thousands, except per share data) |
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2011 |
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2010 |
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Assets |
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Current assets: |
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|
|
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|
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Cash and cash equivalents |
|
$ |
9,698 |
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|
$ |
18,599 |
|
Accounts receivable: |
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|
|
|
|
|
|
|
Trade, net |
|
|
779 |
|
|
|
662 |
|
Other, net |
|
|
1,161 |
|
|
|
204 |
|
Marketable securities |
|
|
515 |
|
|
|
- |
|
Inventories |
|
|
1,174 |
|
|
|
1,082 |
|
Deferred tax asset |
|
|
5,195 |
|
|
|
1,504 |
|
Prepaid expenses and other current assets |
|
|
1,025 |
|
|
|
863 |
|
Assets of discontinued operations |
|
|
112 |
|
|
|
4,851 |
|
Total current assets |
|
|
19,659 |
|
|
|
27,765 |
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|
|
|
|
|
|
|
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Property and equipment, net |
|
|
65,892 |
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|
56,786 |
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|
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|
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Other assets: |
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Goodwill and indefinite lived intangibles, net |
|
|
65,642 |
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|
61,761 |
|
Definite lived intangibles, net |
|
|
1,091 |
|
|
|
1,139 |
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Other |
|
|
1,093 |
|
|
|
920 |
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Total other assets |
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|
67,826 |
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|
63,820 |
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Total assets |
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$ |
153,377 |
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|
$ |
148,371 |
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Liabilities and Stockholders' Equity |
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Current liabilities: |
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Accounts payable |
|
$ |
1,215 |
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|
$ |
696 |
|
Accrued liabilities |
|
|
2,766 |
|
|
|
4,301 |
|
Texas patron tax liability |
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|
6,830 |
|
|
|
3,955 |
|
Current portion of derivative liabilities |
|
|
1,209 |
|
|
|
1,276 |
|
Current portion of long-term debt |
|
|
5,494 |
|
|
|
7,883 |
|
Liabilities of discontinued operations |
|
|
177 |
|
|
|
588 |
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Total current liabilities |
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17,691 |
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|
18,699 |
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|
|
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|
|
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Deferred tax liability |
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|
23,033 |
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|
|
15,288 |
|
Other long-term liabilities |
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|
785 |
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|
719 |
|
Long-term debt |
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|
30,060 |
|
|
|
34,803 |
|
Derivative liabilities at fair value, less current portion |
|
|
- |
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|
|
1,243 |
|
Total liabilities |
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|
71,569 |
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|
70,752 |
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Commitments and contingencies |
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|
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Temporary equity - Common stock, subject to put rights 66 and 198 shares, respectively |
|
|
1,586 |
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|
4,366 |
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PERMANENT STOCKHOLDERS' EQUITY: |
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Preferred stock, $.10 par, 1,000 shares authorized; none issued and outstanding |
|
|
- |
|
|
|
- |
|
Common stock, $.01 par, 20,000 shares authorized; 9,604 and 9,766 shares issued and outstanding, respectively |
|
|
96 |
|
|
|
98 |
|
Additional paid-in capital |
|
|
61,446 |
|
|
|
62,326 |
|
Accumulated other comprehensive income |
|
|
10 |
|
|
|
- |
|
Retained earnings |
|
|
15,361 |
|
|
|
7,515 |
|
Total Rick's permanent stockholders' equity |
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|
76,913 |
|
|
|
69,939 |
|
Noncontrolling interests |
|
|
3,309 |
|
|
|
3,314 |
|
Total permanent stockholders' equity |
|
|
80,222 |
|
|
|
73,253 |
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Total liabilities and stockholders' equity |
|
$ |
153,377 |
|
|
$ |
148,371 |
|
RICK'S CABARET INTERNATIONAL, INC. |
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Year Ended September 30, |
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(in thousands, except per share data) |
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2011 |
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2010 |
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2009 |
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Revenues: |
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Sales of alcoholic beverages |
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$ |
32,575 |
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$ |
28,532 |
|
$ |
23,641 |
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Sales of food and merchandise |
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|
7,402 |
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|
6,327 |
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|
5,615 |
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Service revenues |
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38,178 |
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|
34,179 |
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31,786 |
|||
Internet revenues |
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|
470 |
|
|
562 |
|
|
641 |
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Media revenues |
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|
1,248 |
|
|
1,440 |
|
|
1,404 |
|||
Other |
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|
3,618 |
|
|
3,023 |
|
|
2,328 |
|||
Total revenues |
|
|
83,491 |
|
|
74,063 |
|
|
65,415 |
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Operating expenses: |
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|
|
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|
|
|
|
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Cost of goods sold |
|
|
10,427 |
|
|
9,136 |
|
|
7,884 |
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Salaries and wages |
|
|
18,321 |
|
|
16,305 |
|
|
14,799 |
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Stock-based compensation |
|
|
8 |
|
|
405 |
|
|
96 |
|||
Other general and administrative: |
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|
|
|
|
|
|
|
|
|
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Taxes and permits |
|
|
12,542 |
|
|
11,452 |
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|
8,351 |
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Charge card fees |
|
|
1,361 |
|
|
1,229 |
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|
1,300 |
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Rent |
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|
2,988 |
|
|
2,737 |
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|
2,166 |
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Legal and professional |
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|
2,289 |
|
|
3,002 |
|
|
2,848 |
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Advertising and marketing |
|
|
3,471 |
|
|
3,167 |
|
|
2,588 |
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Depreciation and amortization |
|
|
3,904 |
|
|
3,225 |
|
|
2,806 |
|||
Insurance |
|
|
1,157 |
|
|
985 |
|
|
894 |
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Utilities |
|
|
1,605 |
|
|
1,507 |
|
|
1,390 |
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Impairment of assets |
|
|
- |
|
|
3,574 |
|
|
- |
|||
Other |
|
|
6,624 |
|
|
5,948 |
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|
5,258 |
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Total operating expenses |
|
|
64,697 |
|
|
62,672 |
|
|
50,380 |
|||
Income from operations |
|
|
18,794 |
|
|
11,391 |
|
|
15,035 |
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|
|
|
|
|
|
|
|
|
|
|
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Other income (expense): |
|
|
|
|
|
|
|
|
|
|
|
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Interest income |
|
|
118 |
|
|
19 |
|
|
16 |
|||
Interest expense |
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|
(3,930) |
|
|
(4,023) |
|
|
(3,352) |
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Interest expense – loan origination costs |
|
|
(359) |
|
|
(450) |
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|
(65) |
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Gain (loss) on change in fair value of derivative instruments |
|
|
129 |
|
|
(31) |
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|
145 |
|||
Gain on settlement of debt |
|
|
903 |
|
|
- |
|
|
- |
|||
Gain (loss) on sale of property and other |
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|
- |
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|
(3) |
|
|
182 |
|||
Income from continuing operations before income taxes |
|
|
15,655 |
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|
6,903 |
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|
11,961 |
|||
Income taxes |
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|
5,403 |
|
|
2,998 |
|
|
4,013 |
|||
Income from continuing operations |
|
|
10,252 |
|
|
3,905 |
|
|
7,948 |
|||
Loss from discontinued operations, net of income taxes |
|
|
(2,195) |
|
|
(11,603) |
|
|
(2,446) |
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Net income (loss) |
|
|
8,057 |
|
|
(7,698) |
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|
5,502 |
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Less: net income attributable to noncontrolling interests |
|
|
(211) |
|
|
(260) |
|
|
(294) |
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Net income (loss) attributable to Rick's Cabaret International, Inc. |
|
$ |
7,846 |
|
$ |
(7,958) |
|
$ |
5,208 |
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|
|
|
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|
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Basic earnings (loss) per share attributable to Rick's shareholders: |
|
|
|
|
|
|
|
|
|
|
|
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Income from continuing operations |
|
$ |
1.01 |
|
$ |
0.38 |
|
$ |
0.83 |
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Loss from discontinued operations |
|
|
(0.22) |
|
|
(1.20) |
|
|
(0.26) |
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Net income (loss) |
|
$ |
0.79 |
|
$ |
(0.82) |
|
$ |
0.56 |
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Diluted earnings (loss) per share attributable to Rick's shareholders: |
|
|
|
|
|
|
|
|
|
|
|
|
Income from continuing operations |
|
$ |
1.01 |
|
$ |
0.38 |
|
$ |
0.81 |
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Loss from discontinued operations |
|
|
(0.22) |
|
|
(1.20) |
|
|
(0.26) |
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Net income (loss) |
|
$ |
0.79 |
|
$ |
(0.82) |
|
$ |
0.55 |
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|
|
|
|
|
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Weighted average number of common shares outstanding: |
|
|
|
|
|
|
|
|
|
|
|
|
Basic |
|
|
9,930 |
|
|
9,697 |
|
|
9,266 |
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Diluted |
|
|
9,932 |
|
|
9,697 |
|
|
9,428 |
SOURCE Rick's Cabaret International, Inc.
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