RCI Hospitality Holdings Inc (RICK)

[RainmanOregon]

Rick's Cabaret International, Inc. Reports Third Quarter Revenue Increase to $20.8 Million and Adjusted EBITDA of $6.0 Million



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Rick's Cabaret International Inc.

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Press Release Source: Rick's Cabaret International, Inc. On Tuesday August 9, 2011, 4:05 pm EDT

HOUSTON, Aug. 9, 2011 /PRNewswire/ -- Rick's Cabaret International, Inc. (NASDAQ:RICK - News), 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.

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

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 - News) 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 [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.