RCI Hospitality Holdings Inc (RICK)

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Rick's NEWS OUT!! WHAT RECESSION?? CHA-CHING ~ Rick's Cabaret International, Inc. Reports $22.8 Million in Revenue for Second Quarter; Adjusted EBITDA Rises to $6.6 Million
Ricks Cabaret International, Inc. (MM) (NASDAQ:RICK)
Intraday Stock Chart
Today : Tuesday 10 May 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.

(Logo: http://photos.prnewswire.com/prnh/20110418/MM85342LOGO)

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 33rd 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 [e-mail] 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.