Rick's Cabaret International, Inc. announces third quarter 2014 club and restaurant sales
Total Club & Restaurant Sales Hit Record $33.1 Million – Up 18.3% Year over Year
Same Store Sales Up 5.1% Year over Year
HOUSTON—July 8, 2014 – Rick’s Cabaret International, Inc. (NasdaqGM: RICK) today announced total sales at adult clubs and sports bar/restaurants for the third fiscal quarter ended June 30, 2014. The figures do not include the Company’s internet or media divisions. The Company also announced legal settlements reached during 3Q14. Rick’s expects to announce 3Q14 results on August 11, 2014.
3Q14 total adult club and sports bar/restaurant sales hit a record $33.1 million, up 18.3% from $27.9 million in the year ago quarter. There were 43 units versus 37 in the year ago quarter. Sales were positively impacted by the performance of adult clubs acquired and sports bar/restaurants launched within the past year, as well as sales growth at existing adult clubs.
3Q14 same store sales were $28.9 million, up 5.1% from $27.5 million in the year ago quarter. Nearly all of major brands showed year over year improvement, with the primary exception of three out of the four Club Onyx units. New Club Onyx format and management changes, however, have significantly reduced the percentage year over year revenue decline compared to previous quarters this fiscal year. Excluding Onyx units, same store sales would have been up 6.9%.
3Q14 total sales benefited from a full quarter of the new Vivid Cabaret New York adult club in Manhattan and the new Bombshells sports bar/restaurant in Webster, TX, and initial revenues from the late June opening of a Bombshells in Austin, TX. Sales at adult clubs open more than a year continued to reflect the success of Rick’s post-recession strategy of increasing patronage from bigger ticket, higher margin customers.
For the nine months ended June 30, 2014, total club and restaurant sales of $94.7 million increased 14.0% year over year and same store sales increased 1.5% to $82.4 million.
In May, Rick’s estimated $2-$3 million in higher pre-opening and legal costs across 3Q14 and 4Q14, reflecting in part the Company’s strategy to settle a number of lawsuits. Today, Rick’s is announcing that it has settled several of these lawsuits, as well as other small claims. This will result in approximately $3.2 million in one-time legal charges in 3Q14. The settlements include:
A dispute over the name “Ricky Bobby’s” for one of Rick’s restaurants. The settlement cost $20,000. Rick’s will change the name of the establishment to “Pole Position Sports Saloon and Restaurant.”
A major dram shop case. Dram shop liability refers to the body of law governing the liability of taverns, liquor stores and other commercial establishments that serve alcoholic beverages. To offset the cost, Rick’s plans to file for reimbursement from the court overseeing the dissolution of Rick’s former insurance company.
All claims from the State of Nevada over taxes related to Rick’s former Las Vegas adult club.
In addition, Rick’s is announcing that pre-opening costs should total approximately $195,000 in 3Q14.
Eric Langan, President and CEO, commented, “We are very pleased with our overall sales performance as well as our ability to settle these lawsuits and claims generally in line with our plans.
“In accordance with our guidance, club and restaurant sales continued to grow in 3Q14 instead of falling off from the seasonally large 2Q14. We continue to be excited about the potential for our new Vivid Cabaret, which was No. 3 in sales for the third quarter, and its positive effect on our flagship Rick’s Cabaret New York, where sales increased more than 6% year over year. Men’s Mag Daily (http://mensmagdaily.com/) recently named Rick’s Cabaret in Manhattan as the ‘Best Gentlemen’s Club in New York.’ Meanwhile, Club Onyx units are starting to improve. And we continue to see great potential for our restaurants, which represented close to 8% of 3Q14 total sales.
“Looking ahead, 4Q14 should benefit from a full quarter of the new Bombshells in Austin, and, assuming schedules stay on track, the opening sometime during the quarter of a Rick’s Cabaret in Odessa, the capital of fracking in Texas, and two new Bombshells in the Houston area.”
About Rick’s Cabaret
With 43 units, Rick’s Cabaret International, Inc. (NasdaqGM: RICK) is the leading hospitality company operating adult gentlemen’s clubs and sports bar/restaurants in the US. Adult clubs in New York City, Los Angeles, Miami, Philadelphia, Charlotte, Dallas/Ft. Worth, Houston, Minneapolis, Indianapolis and other cities operate under brand names such as “Rick's Cabaret,” “XTC,” “Club Onyx,” “Vivid Cabaret,” “Jaguars” and “Tootsie’s Cabaret.” Sports bar/restaurants, which also feature live entertainment, operate under the brand names “Bombshells” and “Pole Position.”
For More Information
This press release may contain 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 press release, 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.
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