Rick's Cabaret International, Inc. Reports First Quarter Revenues Of $20 Million, Up 16.8%; Net Income Impacted By Aggressive Marketing And Acquisition Costs


HOUSTON - (February 16, 2010) - Rick's Cabaret International, Inc. [NASDAQ-GM:RICK], today reported consolidated total revenues of $20 million for its first quarter ending Dec. 31, 2009, a 16.8 percent increase over the same period a year ago. The increase was primarily attributed to a 14.5 percent increase in same store sales plus revenues from new nightclubs in Austin and Ft. Worth.

Net income attributable to Rick's shareholders for the period was $782,688, compared with $790,832 in the same quarter in the previous year or eight cents per fully diluted share, the same as in 2009. Income from continuing operations before income tax was $1.4 million for the quarter, compared with $1.6 million for the same quarter in the previous year.

Eric Langan, President and CEO of Rick's Cabaret International, said net income was impacted by expenses associated with acquisition activities and aggressive marketing costs, which totaled $2.9 million compared with $1.2 million in the same quarter one year ago.

"These expenses are largely behind us now and we are on track with our earnings guidance," Mr. Langan said.

"Our income was impacted by a very aggressive and successful campaign in Las Vegas to capture market share and prepare for upcoming national conventions," Mr. Langan said. "This program is already paying off because we had a profit of about $100,000 in Las Vegas in January, and we have now been able to significantly lower our Vegas marketing costs. We also spent considerable sums on marketing in advance of the Super Bowl, Pro-Bowl and NBA All-Star Game, and for the launch of newly acquired clubs. These costs have now been largely eliminated."

Mr. Langan will discuss the results in a conference call at 4:30 p.m. ET today. The call is being webcast by Vcall and can be accessed at the Rick's Cabaret website, www.ricks.com or www.InvestorCalendar.com. The toll free Live Participant Dial In number is 877-407-8033, while international callers should use 201-689-8033. The toll free replay number 877-660-6853, while international callers should use 201-612-7415. Replay passcodes required for playback are: Account #: 286 and Conference ID #: 344435.

RICK'S CABARET INTERNATIONAL, INC. CONSOLIDATED STATEMENTS OF INCOME

 

 

 

Three Months Ended December 31,

 

 

 

 

2009

 

 

2008

 

 

 

 

 

(UNAUDITED)

 

 

 

Revenues:

 

 

 

 

 

 

 

Sales of alcoholic beverages

 

 

$   8,049,465

 

 

 

$   6,633,571

 

 

Sales of food and merchandise

 

 

1,590,011

 

 

 

1,420,066

 

 

Service revenues

 

 

9,292,249

 

 

 

8,139,890

 

 

Internet revenues

 

 

145,005

 

 

 

176,763

 

 

Media revenues

 

 

256,757

 

 

 

183,636

 

 

Other

 

 

671,099

 

 

 

579,769

 

 

Total revenues

 

 

20,004,586

 

 

 

17,133,695

 

 

 

 

 

 

 

 

 

 

 

 

Operating expenses:

 

 

 

 

 

 

 

 

 

Cost of goods sold

 

 

2,456,107

 

 

 

2,229,474

 

 

Salaries and wages

 

 

4,310,305

 

 

 

4,220,886

 

 

Stock-based compensation

 

 

44,037

 

 

 

20,044

 

 

Other general and administrative:

 

 

 

 

 

 

 

 

 

Taxes and permits

 

 

2,835,564

 

 

 

2,319,300

 

 

Charge card fees

 

 

346,188

 

 

 

338,541

 

 

Rent

 

 

993,133

 

 

 

917,962

 

 

Legal and professional

 

 

649,609

 

 

 

504,049

 

 

Advertising and marketing

 

 

2,938,173

 

 

 

1,172,371

 

 

Depreciation and amortization

 

 

842,358

 

 

 

844,352

 

 

Insurance

 

 

261,851

 

 

 

239,237

 

 

Utilities

 

 

405,869

 

 

 

428,918

 

 

Other

 

 

1,535,644

 

 

 

1,422,340

 

 

Total operating expenses

 

 

17,618,838

 

 

 

14,657,474

 

 

 

 

 

 

 

 

 

 

 

 

Income from operations

 

 

2,385,748

 

 

 

2,476,221

 

 

 

 

 

 

 

 

 

 

 

 

Other income (expense):

 

 

 

 

 

 

 

 

 

Interest income

 

 

3,673

 

 

 

5,734

 

 

Interest expense

 

 

(1,028,583

)

 

 

(833,471

)

 

Gain on change in fair value of derivative instruments

 

 

44,275

 

 

 

-

 

 

 

 

 

 

 

 

 

 

 

 

Income from continuing operations before income taxes

 

 

1,405,113

 

 

 

1,648,484

 

 

 

 

 

 

 

 

 

 

 

 

Income taxes

 

 

513,548

 

 

 

576,746

 

 

 

 

 

 

 

 

 

 

 

 

Income from continuing operations

 

 

891,565

 

 

 

1,071,738

 

 

Loss from discontinued operations, net of income taxes of $19,899 and $111,680

 

 

(35,377

)

 

 

(207,406

)

 

 

 

 

 

 

 

 

 

 

 

Net income

 

 

856,188

 

 

 

864,332

 

 

Less: net income attributable to noncontrolling interests

 

 

(73,500

)

 

 

(73,500

)

 

Net income attributable to Rick’s Cabaret International, Inc.

 

 

$     782,688

 

 

 

$      790,832

 

 

Basic earnings (loss) per share attributable to Rick’s shareholders:

 

 

 

 

 

 

 

 

 

Income from continuing operations

 

 

$           0.09

 

 

 

$            0.11

 

 

Loss from discontinued operations

 

 

(0.00

)

 

 

(0.02

 

Net income

 

 

$           0.08

 

 

 

$            0.08

 

 

Diluted earnings (loss) per share attributable to Rick’s shareholders:

 

 

 

 

 

 

 

 

 

Income from continuing operations

 

 

$           0.09

 

 

 

$           0.10

 

 

Loss from discontinued operations

 

 

(0.00

)

 

 

(0.02

 

Net income

 

 

$           0.08

 

 

 

$           0.08

 

 

 

 

 

 

 

 

 

 

 

 

Weighted average number of common shares outstanding:

 

 

 

 

 

 

 

 

 

Basic

 

 

9,370,175

 

 

 

9,366,033

 

 

Diluted

 

 

9,385,209

 

 

 

9,599,954

 

 

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.ricks.com.


About Rick's Cabaret:
Rick's Cabaret International, Inc. (NASDAQ: RICK) operates upscale adult nightclubs serving primarily businessmen and professionals that offer live adult entertainment, restaurant and bar operations. The company owns, operates or licenses adult nightclubs in New York City, Miami, Philadelphia, Las Vegas, New Orleans, Charlotte, Dallas, Houston, Minneapolis and other cities 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 Publication, and owns the adult Internet membership Web site, 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 the NASDAQ Global Market under the symbol RICK. For further information contact ir@ricks.com.


Media Contact: Allan Priaulx, 212-338-0050, ir@ricks.com