Rick's Cabaret Reports Fiscal 2005 Results



HOUSTON -
(January 5, 2006)- Rick's Cabaret International, Inc. [NASDAQ:RICK],
the leading publicly traded operator of gentlemen's clubs, today reported results for its fiscal year ended September 30, 2005. Because of extraordinary one-time expenses in the fourth quarter associated with the opening of its new cabaret in New York City, the company reported a loss for the year, although same-location-same-period income was up.

"Heavy expenses in the fourth quarter required to complete our midtown Manhattan club were fully anticipated and are now behind us," said Eric Langan, President and CEO. "Our New York City club is now operating and beginning to contribute revenue and income."

The net loss for the year ended September 30th was $215,148, compared with net income of $775,253 in 2004. The full year 2005 results include $982,500 in losses attributed to opening and operating new clubs in New York City and Charlotte, NC. Net income for nightclub operations for the same-location-same-period increased by 3.78%. Net income for Internet operations for the same-web-site-same-period increased by 28.71%.

Total revenues for the year were $14,824,407, compared with $13,858,434 in 2004 (the 2004 figure has been restated to account for discontinued operations). Revenues increased by $965,973 or 6.97%, primarily due to new nightclub operations. Revenues from nightclub operations for same-location-same-period decreased by 0.74% and for Internet businesses by 0.98%.

Among the items contributing to the company's expenses in 2005 compared to 2004 were increases primarily associated with opening new clubs, including: payroll and related costs of $5,200,976 compared to $4,803,515 (payroll for nightclub operations for same-location-same-period decreased by 4.86%); general and administrative expenses of $7,458,721 compared to $6,036,401 due to increased taxes and permits, rent, legal and professional, utilities, advertising and marketing expenses; and interest expense of $699,678 compared to $324,411. The company had long-term debt of $13,246,836 as of September 30, 2005 compared to debt of $3,693,560 at the end of the previous year.

Rick's used $6,307,508 of cash in investing in 2005 compared to $867,206 for the previous, and $4,801,197 was provided by financing activities in 2005 compared to $153,749 used for the previous year.

"Our experience in New York City demonstrates that the strategy of acquiring new clubs in excellent business and tourism locations continues to be a sound foundation for building the overall business of Rick's Cabaret in the future," Mr. Langan said. "However, we do not anticipate that future acquisitions will entail the exceptionally high costs associated with New York, where unique circumstances required a complete remodel and other high start-up expenses. We anticipate that future acquisitions will be much more of a turnkey situation with faster accretion of revenue and profit.”

 The company did not change previously announced guidance for fiscal 2006 of revenues in the $23 -$24 million range and net income of about $2 million.

RICK'S CABARET INTERNATIONAL, INC.

CONSOLIDATED STATEMENTS OF INCOME

 

 

 

 

 

Year Ended September 30,

 

 

 

 

 

2005

 

2004

 

Revenues:

 

 

 

 

 

 

 

 

Sales of alcoholic beverages

 

 

$5,431,049

 

$5,343,858

 

 

Sales of food and merchandise

 

 

1688043

 

1581851

 

 

Service revenues

 

 

6,632,201

 

5,839,759

 

 

Internet revenues

 

 

787,617

 

796,353

 

 

Other

 

 

285497

 

296613

 

 

 

 

 

14,824,407

 

13,858,434

 

 

 

 

 

 

 

 

 

Operating expenses:

 

 

 

 

 

 

 

 

Cost of goods sold

 

 

1,865,630

 

1,623,915

 

 

Salaries and wages

 

 

5,200,976

 

4,803,515

 

 

Other general and administrative:

 

 

 

 

 

 

 

 

Taxes and permits

 

1,985,989

 

1,815,883

 

 

 

Charge card fees

 

229,397

 

236,894

 

 

 

Rent

 

558,435

 

248,074

 

 

 

Legal and professional

 

685,291

 

543,550

 

 

 

Advertising and marketing

 

752,866

 

756,586

 

 

 

Depreciation and amortization

 

590,466

 

479,791

 

 

 

Other

 

2,656,277

 

1,955,623

 

 

 

 

 

14,525,327

 

12,463,831

 

 

 

 

 

 

 

 

 

Income from continuing operations

 

 

 

299,080

 

1,394,603

 

Other income (expense):

 

 

 

 

 

 

 

 

Interest income

 

 

33434

 

28887

 

 

Interest expense

 

 

-699678

 

-324411

 

 

Gain on sale of marketable securities

 

 

-

 

19807

 

 

Other

 

 

-1149

 

10193

 

Income (loss) from continuing operations before minority interest

 

 

 

(368,313)

 

1,129,079

 

 

 

 

 

 

 

 

 

Minority interest

 

 

 

9,472

 

(4,777)

 

 

 

 

 

 

 

 

 

Income (loss) from continuing operations

 

 

 

(358,841)

 

1,124,302

 

 

 

 

 

 

 

 

 

Discontinued operations:

 

 

 

 

 

 

 

 

Loss from discontinued operations

 

 

-148294

 

-349049

 

 

Gain on sale of a subsidiary

 

 

291987

 

-

 

 

Income (loss) from discontinued operations

 

 

143,693

 

(349,049)

 

 

 

 

 

 

 

 

 

Net income (loss)

 

 

 

$(215,148)

 

$775,253

 

Basic and diluted earnings (loss) per share:

 

 

 

 

 

 

 

 

Continuing operations

 

 

$(0.09)

 

$0.30

 

 

Discontinued operations

 

 

0.04

 

(0.09)

 

 

Net income (loss)

 

 

$(0.05)

 

$0.21

 

Weighted average number of common shares outstanding

 

 

 

3,937,565

 

3,700,148

 


RICK'S CABARET INTERNATIONAL, INC.

CONSOLIDATED BALANCE SHEETS

 

 

 

 

September 30,

 

 

 

 

2005

 

2004

Assets

 

 

 

 

 

 

Current assets:

 

 

 

 

 

 

 

Cash and cash equivalents

 

 

$480,330

 

$275,243

 

Accounts receivable:

 

 

 

 

 

 

 

Trade

 

310,692

 

72,909

 

 

Other

 

118872

 

204093

 

Marketable securities

 

 

28919

 

122350

 

Inventories

 

 

257626

 

232746

 

Net assets of discontinued operations

 

 

-

 

27674

 

Prepaid expenses and other current assets

 

 

87991

 

976577

Total current assets

 

 

 

1,284,430

 

1,911,592

 

 

 

 

 

 

 

Property and equipment, net

 

 

13,416,755

 

8,681,440

 

 

 

 

 

 

 

Other assets:

 

 

 

 

 

 

 

Goodwill and indefinite lived intangibles

 

 

9,836,560

 

1,898,926

 

Definite lived intangibles, net

 

 

126,262

 

-

 

Other

 

 

365,011

 

268,919

Total other assets

 

 

 

10,327,833

 

2,167,845

 

 

 

 

 

 

 

Total assets

 

 

 

$25,029,018

 

$12,760,877

 

 

 

 

 

 

 

Liabilities and Stockholders' Equity

Current liabilities:

 

 

 

 

 

 

 

Accounts payable

 

 

$1,034,508

 

$291,650

 

Accrued liabilities

 

 

852,865

 

568,835

 

Current portion of long-term debt

 

 

1,349,894

 

492,310

 

Line-of-credit

 

 

94,888

 

-

Total current liabilities

 

 

 

3,332,155

 

1,352,795

 

 

 

 

 

 

 

Other long-term liabilities

 

 

 

193648

 

20048

Long-term debt

 

 

 

11,896,942

 

3,201,250

 

 

 

 

 

 

 

Total liabilities

 

 

 

15,422,745

 

4,574,093

 

 

 

 

 

 

 

Commitments and contingencies

 

 

 

-

 

-

 

 

 

 

 

 

 

Minority interest

 

 

 

31,337

 

40,808

 

 

 

 

 

 

 

Stockholders' equity:

 

 

 

 

 

 

 

Preferred stock, $.10 par, 1,000,000 shares

 

 

 

 

 

 

authorized, none outstanding

 

-

 

-

 

Common stock, $.01 par, 15,000,000 shares

 

 

 

 

 

 

authorized, 5,220,678 and 4,608,678 shares issued, respectively

 

52207

 

46087

 

Additional paid-in capital

 

 

13004567

 

11273149

 

Accumulated other comprehensive income

 

 

15572

 

109002

 

Accumulated deficit

 

 

-2203630

 

-1988482

 

 

 

 

10868716

 

9439756

 

Less 908,530 shares of common stock held in treasury, at cost

 

1,293,780

 

1,293,780

Total stockholders' equity

 

 

 

9,574,936

 

8,145,976

 

 

 

 

 

 

 

Total liabilities and stockholders' equity

 

 

$25,029,018

 

$12,760,877

 

 

 

 

 

 

 


About Rick's Cabaret

Rick’s Cabaret International, Inc. (NASDAQ: RICK, www.ricks.com) 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, New Orleans, Charlotte, Houston, Minneapolis and other cities under the names "Rick's Cabaret," "XTC," “Club Onyx” and “Hummers.” No sexual contact is permitted at any of these locations. Rick’s Cabaret also owns the adult Internet membership Web site, www.couplestouch.com, and a network of nine online auction sites for adult products under the flagship URL www.naughtybids.com. Rick’s Cabaret common stock is traded on the NASDAQ SmallCap market under the symbol RICK. For further information contact ir@ricks.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 New York City and elsewhere, the success or lack thereof in launching and building the company’s businesses in New York City and elsewhere, 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 go to www.ricks.com.

Contact for further information: Allan Priaulx, 212-338-0050, ir@ricks.com