HOUSTON, Aug. 9, 2011 /PRNewswire/ -- Rick's Cabaret International, Inc. (NASDAQ: RICK), the leading group of upscale gentlemen's clubs, had revenues of $20.8 million in its third quarter ended June 30, a 15.4 percent increase over the $18.0 million in the same period last year. The company reported adjusted EBITDA* of $6.0 million a 52.7 percent increase over $3.9 million in the same period last year.
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The company reported net income from continuing operations for the quarter of $2.5 million, compared with $1.1 million in 2010, with earnings per diluted share from continuing operations of 25 cents versus 11 cents last year. After accounting for a loss from discontinued operations including the now closed club in Las Vegas, net income was $888,000 versus $857,000. Net income per diluted share for both periods was nine cents.
"With this quarter we have now put the pain of the Las Vegas situation behind us and we are well positioned to move forward on an apples-to-apples basis," said Eric Langan, President and CEO of Rick's Cabaret. "Apart from the Las Vegas loss, we had a strong third quarter, with increases in cash flows, EBITDA and income from continuing operations. Our larger clubs across the country are doing well and we will have a positive outlook on the remainder of the year as long as the general economy maintains its present levels."
Mr. Langan will discuss the third quarter results in detail at a conference call and webcast today at 4:30 pm EDT that can be accessed at http://www.investorcalendar.com/IC/CEPage.asp?ID=165509 or though the Rick's Cabaret investor website, www.ricksinvestor.com. The toll free participant dial-in number is 877-407-8033 (International 201-689-8033). The toll free replay number is 877-660-6853 (international 201-612-7415). Replay pass codes required for playback are: Account number 286 and Conference ID 376967.
The increase in total revenues was primarily attributable to clubs acquired during the past year, additional traffic generated during the NBA Championship series in Dallas and Miami, and gains at the Rick's locations in San Antonio, North Austin and Minneapolis.
Total revenues for same-location-same-period of club operations open more than one year increased by 9.0 percent to $19.2 million in the quarter from $17.6 million for the same period last year. Comparable club operating income was $5.7 million compared with $4.7 million last year.
Net cash generated from continuing operations was $13.7 million, compared with $12.0 million last year. Interest expense dropped to $1.0 million from $1.2 million.
*Adjusted EBITDA is a financial statement measure that was not derived in accordance with GAAP. We use adjusted EBITDA (earnings from continuing operations 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.
RICK'S CABARET INTERNATIONAL, INC. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS ASSETS |
||||||||||
(in thousands, except per share data) |
June 30, 2011 |
September 30, 2010 |
||||||||
Assets |
(UNAUDITED) |
|||||||||
Current assets: |
||||||||||
Cash and cash equivalents |
$ 12,356 |
$ 18,614 |
||||||||
Accounts receivable: |
||||||||||
Trade, net |
840 |
662 |
||||||||
Other, net |
3,133 |
207 |
||||||||
Marketable securities |
500 |
- |
||||||||
Inventories |
1,169 |
1,093 |
||||||||
Deferred tax asset |
2,285 |
2,037 |
||||||||
Prepaid expenses and other current assets |
1,292 |
333 |
||||||||
Assets of discontinued operations |
129 |
4,629 |
||||||||
Total current assets |
21,704 |
27,575 |
||||||||
Property and equipment, net |
62,507 |
56,900 |
||||||||
Other assets: |
||||||||||
Goodwill and indefinite lived intangibles, net |
63,706 |
61,835 |
||||||||
Definite lived intangibles, net |
904 |
1,139 |
||||||||
Other |
2,987 |
922 |
||||||||
Total other assets |
67,597 |
63,896 |
||||||||
Total assets |
$ 151,808 |
$ 148,371 |
||||||||
LIABILITIES AND STOCKHOLDERS' EQUITY |
|||||||||||||||||||||||||
(in thousands, except per share data) |
June 30, 2011 |
September 30, 2010 |
|||||||||||||||||||||||
Liabilities and Stockholders' Equity |
(UNAUDITED) |
||||||||||||||||||||||||
Current liabilities: |
|||||||||||||||||||||||||
Accounts payable |
$ 782 |
$ 699 |
|||||||||||||||||||||||
Accrued liabilities |
3,187 |
4,313 |
|||||||||||||||||||||||
Texas patron tax liability |
6,136 |
3,955 |
|||||||||||||||||||||||
Current portion of derivative liabilities |
1,143 |
1,276 |
|||||||||||||||||||||||
Current portion of long-term debt |
6,238 |
5,461 |
|||||||||||||||||||||||
Liabilities of discontinued operations |
127 |
2,995 |
|||||||||||||||||||||||
Total current liabilities |
17,613 |
18,699 |
|||||||||||||||||||||||
Deferred tax liability |
21,275 |
15,288 |
|||||||||||||||||||||||
Other long-term liabilities |
769 |
719 |
|||||||||||||||||||||||
Long-term debt |
30,699 |
34,803 |
|||||||||||||||||||||||
Derivative liabilities at fair value, less current portion |
238 |
1,243 |
|||||||||||||||||||||||
Total liabilities |
70,594 |
70,752 |
|||||||||||||||||||||||
Commitments and contingencies |
|||||||||||||||||||||||||
Temporary equity - Common stock, subject to put rights 84 and 198 shares, respectively |
1,932 |
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; 9,723 and 9,766 shares issued and outstanding, respectively |
97 |
98 |
|||||||||||||||||||||||
Additional paid-in capital |
62,446 |
62,326 |
|||||||||||||||||||||||
Accumulated other comprehensive loss |
(5) |
- |
|||||||||||||||||||||||
Retained earnings |
13,401 |
7,515 |
|||||||||||||||||||||||
Total Rick's permanent stockholders' equity |
75,939 |
69,939 |
|||||||||||||||||||||||
Noncontrolling interests |
3,343 |
3,314 |
|||||||||||||||||||||||
Total permanent stockholders' equity |
79,282 |
73,253 |
|||||||||||||||||||||||
Total liabilities and stockholders' equity |
$ 151,808 |
$ 148,371 |
|||||||||||||||||||||||
RICK'S CABARET INTERNATIONAL, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF INCOME |
||||||||
(in thousands, except per share data) |
FOR THE THREE MONTHS ENDED JUNE 30, |
FOR THE NINE MONTHS ENDED JUNE 30, |
||||||
2011 |
2010 |
2011 |
2010 |
|||||
(UNAUDITED) |
(UNAUDITED) |
|||||||
Revenues: |
||||||||
Sales of alcoholic beverages |
$ 8,149 |
$ 7,029 |
$ 24,312 |
$ 21,371 |
||||
Sales of food and merchandise |
1,891 |
1,578 |
5,469 |
4,648 |
||||
Service revenues |
9,553 |
8,331 |
28,637 |
25,507 |
||||
Internet revenues |
113 |
144 |
359 |
433 |
||||
Media revenues |
176 |
203 |
585 |
771 |
||||
Other |
911 |
737 |
2,678 |
2,202 |
||||
Total revenues |
20,793 |
18,022 |
62,040 |
54,932 |
||||
Operating expenses: |
||||||||
Cost of goods sold |
2,710 |
2,254 |
7,793 |
6,887 |
||||
Salaries and wages |
4,683 |
4,109 |
13,503 |
12,074 |
||||
Stock compensation |
- |
44 |
- |
132 |
||||
Other general and administrative: |
||||||||
Taxes and permits |
3,101 |
2,750 |
9,333 |
8,426 |
||||
Charge card fees |
405 |
315 |
1,047 |
907 |
||||
Rent |
756 |
668 |
2,305 |
1,957 |
||||
Legal and professional |
635 |
854 |
1,547 |
2,207 |
||||
Advertising and marketing |
838 |
665 |
2,651 |
2,465 |
||||
Insurance |
300 |
244 |
851 |
687 |
||||
Utilities |
394 |
349 |
1,143 |
1,077 |
||||
Depreciation and amortization |
980 |
837 |
2,855 |
2,363 |
||||
Other |
1,626 |
1,419 |
4,646 |
4,341 |
||||
Total operating expenses |
16,428 |
14,508 |
47,674 |
43,523 |
||||
Operating income |
4,365 |
3,514 |
14,366 |
11,409 |
||||
Other income (expense): |
||||||||
Interest income and other |
2 |
5 |
57 |
11 |
||||
Interest expense |
(1,033) |
(1,231) |
(3,170) |
(3,227) |
||||
Gain on settlement of debt |
903 |
- |
903 |
- |
||||
Gain (loss) on change in fair value of derivative instruments |
(216) |
(407) |
266 |
22 |
||||
Income from continuing operations before income taxes |
4,021 |
1,881 |
12,422 |
8,215 |
||||
Income taxes |
1,500 |
762 |
4,231 |
2,869 |
||||
Income from continuing operations |
2,521 |
1,119 |
8,191 |
5,346 |
||||
Loss from discontinued operations, net of income taxes |
(1,580) |
(202) |
(2,146) |
(555) |
||||
Net income |
941 |
917 |
6,045 |
4,791 |
||||
Less: net income attributable to noncontrolling interests |
(53) |
(60) |
(159) |
(207) |
||||
Net income attributable to Rick's Cabaret International, Inc. |
$ 888 |
$ 857 |
$ 5,886 |
$ 4,584 |
||||
Basic earnings (loss) per share attributable to Rick's shareholders: |
||||||||
Income from continuing operations |
$ 0.25 |
$ 0.11 |
$ 0.81 |
$ 0.54 |
||||
Loss from discontinued operations |
$ (0.16) |
$ (0.02) |
$ (0.22) |
$ (0.06) |
||||
Net income |
$ 0.09 |
$ 0.09 |
$ 0.59 |
$ 0.48 |
||||
Diluted earnings (loss) per share attributable to Rick's shareholders: |
||||||||
Income from continuing operations |
$ 0.25 |
$ 0.11 |
$ 0.80 |
$ 0.53 |
||||
Loss from discontinued operations |
$ (0.16) |
$ (0.02) |
$ (0.21) |
$ (0.06) |
||||
Net income |
$ 0.09 |
$ 0.09 |
$ 0.59 |
$ 0.48 |
||||
Weighted average number of common shares outstanding: |
||||||||
Basic |
9,924 |
9,905 |
9,968 |
9,546 |
||||
Diluted |
9,941 |
9,958 |
9,983 |
9,876 |
||||
About Rick's Cabaret: Rick's Cabaret International, Inc. (NASDAQ: RICK) is home to 22 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.
SOURCE Rick's Cabaret International, Inc.
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