SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
AMENDMENT NO. 1
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of
The Securities Exchange Act of 1934
Date of Report: March 29, 1999
RICK'S CABARET INTERNATIONAL, INC.
(Exact name of registrant as specified in its charter)
Texas 0-26958 76-0037324
(State or other jurisdiction (Commission File Number) Identification No.)
of incorporation or organization) (IRS Employer
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505 North Belt, Suite 630
Houston, Texas 77060
(Address of principal executive offices, including zip code)
(281) 820-1181
(Registrant's telephone number, including area code)
Item 7. Financial Statements and Exhibits
Introduction
This Amendment No. 1 to Form 8-K sets forth pro forma financial information in connection with the Company's sale of certain assets. The sale of certain assets was reported on a Form 8-K dated March 29, 1999 and filed on April 6, 1999.
Financial Statements:
On March 29, 1999, Rick's Cabaret International, Inc. ("Rick's" or the "Company"), an investment partnership, headed by Eric Langan, President of the Company, and another investor, acquired all of Robert Watters' outstanding shares of stock of the Company. At the same time, the Company sold one of its subsidiaries, RCI Entertainment Louisiana, Inc., which operates a Rick's Cabaret in New Orleans, Louisiana, to Mr. Watters for the purchase price of $2,200,000, consisting of $1,057,327 in cash, a $652,744 secured promissory note made by one of the purchasers of Mr. Watters' stock, a $326,773 secured promissory note made by Mr. Watters, and the cancellation by Mr. Watters of the Company's $163,156 debt to him. The following Unaudited Pro Forma Consolidated Balance Sheet as of December 31, 1998 gives effect to the transaction as if it had occurred at that date. The Unaudited Pro Forma Consolidated Statements of Operations for the three months ended December 31, 1998 and the year ended September 30, 1998 give effect to the transaction as if it had occurred as of the beginning of each period.
The Unaudited Pro Forma Consolidated Financial Statements are presented for informational purposes only and are not necessarily indicative of the results of operations that would have been achieved had the transaction been completed at the beginning of each period presented, nor are they indicative of the Company's future results of operations.
The Unaudited Pro Forma Consolidated Financial Statements should be read in conjunction with the historical financial statements of the Company and the related notes thereto.
RICK'S CABARET INTERNATIONAL, INC. AND SUBSIDIARIES
UNAUDITED PRO FORMA CONSOLIDATED BALANCE SHEET
DECEMBER 31, 1998
ASSETS
Historical
-------------------------------------
Rick's Cabaret Less
International, Inc. Rick's - N.O. Adjustments Pro Forma
--------------------- --------------- ------------- ------------
Current assets:
Cash $ 512,220 $ 317,428 $ 1,057,327 $ 1,252,119
Accounts receivable 110,252 53,662 326,773 383,363
Land held 569,069 569,069
Inventories 96,174 35,726 60,448
Prepaid expenses 208,009 51,927 156,082
--------------------- --------------- ------------- ------------
Total current assets 1,495,724 458,743 1,384,100 2,421,081
--------------------- --------------- ------------- ------------
Property and equipment 11,791,310 2,716,644 9,074,666
Less accumulated depreciation (1,308,266) (171,444) (1,136,822)
--------------------- --------------- ------------- ------------
10,483,044 2,545,200 - 7,937,844
--------------------- --------------- ------------- ------------
Other assets: -
Goodwill and other intangibles 3,092,444 3,092,444
Other 124,971 10,712 114,259
--------------------- --------------- ------------- ------------
3,217,415 10,712 - 3,206,703
--------------------- --------------- ------------- ------------
-
$ 15,196,183 $ 3,014,655 $ 1,384,100 $13,565,628
===================== =============== ============= ============
-
-
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Current portion of long-term debt 713,811 - 713,811
Accounts payable and accrued expenses 1,915,955 354,261 (163,156) 1,398,538
--------------------- --------------- ------------- ------------
Total current liabilities 2,629,766 354,261 (163,156) 2,112,349
Long-term debt, less current portion 5,680,174 808,385 (652,744) 4,219,045
--------------------- --------------- ------------- ------------
Total liabilities 8,309,940 1,162,646 (815,900) 6,331,394
--------------------- --------------- ------------- ------------
Commitments and contingencies - -
Minority interests 4,700 - 4,700
Stockholders' equity: Intercompany 1,286,002 1,286,002 -
Preferred stock
Common stock 65,475 65,475
Additional paid-in capital 8,940,576 8,940,576
Retained earnings (deficit) (2,124,508) 566,007 913,998 (1,776,517)
--------------------- --------------- ------------- ------------
Total stockholders' equity 6,881,543 1,852,009 2,200,000 7,229,534
--------------------- --------------- ------------- ------------
$ 15,196,183 $ 3,014,655 $ 1,384,100 $13,565,628
===================== =============== ============= ============
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RICK'S CABARET INTERNATIONAL, INC. AND SUBSIDIARIES
UNAUDITED PRO FORMA CONSOLIDATED STATEMENT OF OPERATIONS
FOR THE THREE MONTHS ENDED DECEMBER 31, 1998
Historical
------------------------- ----------
Rick's Cabaret Less Pro Forma
International, Inc. Rick's N.O. Adjustments Pro Forma
--------------------- ------------- ------------- -----------
Revenues:
Sales $ 3,317,969 $ 1,253,128 $ - $2,064,841
--------------------- ------------- ------------- -----------
Operating expenses:
Cost of goods sold 487,859 197,754 290,105
Salaries and wages 1,004,943 238,863 (37,500) 728,580
Other general and administrative:
Taxes and permits 288,696 38,790 249,906
Charge card fees 57,507 33,797 23,710
Rent 135,155 75,696 59,459
Legal and accounting 142,108 4,704 137,404
Advertising 198,423 60,641 137,782
Other 577,471 154,694 422,777
--------------------- ------------- ------------- -----------
2,892,162 804,939 (37,500) 2,049,723
--------------------- ------------- ------------- -----------
Income (loss) from operations 425,807 448,189 37,500 15,118
Other income (expense)
Gain on sale of nightclub - - 347,991 347,991
Interest expense (142,733) (17,856) 13,054 (111,823)
--------------------- ------------- ------------- -----------
Net income $ 283,074 $ 430,333 $ 398,545 $ 251,286
===================== ============= ============= ===========
Net income (loss) per common share $ 0.04 $ 0.04
===================== =============
Weighted average shares outstanding 6,507,403 6,507,403
===================== =============
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RICK'S CABARET INTERNATIONAL, INC. AND SUBSIDIARIES
UNAUDITED PRO FORMA CONSOLIDATED STATEMENT OF OPERATIONS
FOR THE YEAR ENDED SEPTEMBER 30, 1998
Historical
------------------------------------
Rick's Cabaret Less Pro Forma
International, Inc. Rick's N.O. Adjustments Pro Forma
--------------------- ------------- ------------- -----------
Revenues:
Sales $ 7,831,531 $ 3,991,104 $ - $3,840,427
--------------------- ------------- ------------- -----------
Operating expenses:
Cost of goods sold 1,102,556 639,533 463,023
Salaries and wages 2,653,558 1,041,160 (150,000) 1,462,398
Other general and administrative:
Taxes and permits 831,388 302,049 529,339
Charge card fees 160,474 77,240 83,234
Rent 395,038 273,506 121,532
Legal and accounting 355,186 - 355,186
Advertising 488,224 299,296 188,928
Other 2,065,934 743,384 1,322,550
--------------------- ------------- ------------- -----------
8,052,358 3,376,168 (150,000) 4,526,190
--------------------- ------------- ------------- -----------
Income (loss) from operations (220,827) 614,936 150,000 (685,763)
Other income (expense)
Gain on sale of nightclub - - 347,991 347,991
Interest expense (384,037) (82,278) 19,581 (282,178)
--------------------- ------------- ------------- -----------
Net income (loss) $ (604,864) $ 532,658 $ 517,572 $ (619,950)
===================== ============= ============= ===========
Net income (loss) per common share $ (0.14) $ (0.14)
===================== =============
Weighted average shares outstanding 4,338,034 4,338,034
===================== =============
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RICK'S CABARET INTERNATIONAL, INC. AND SUBSIDIARIES
UNAUDITED PRO FORMA CONSOLIDATED
FINANCIAL STATEMENTS
1. BASIS OF PRESENTATION
On March 29, 1999, Rick's Cabaret International, Inc. ("Rick's" or the "Company"), an investment partnership, headed by Eric Langan, President of the Company, and another investor, acquired all of Robert Watters' outstanding shares of stock of the Company. At the same time, the Company sold one of its subsidiaries, RCI Entertainment Louisiana, Inc. ("Rick's New Orleans"), which operates a Rick's Cabaret in New Orleans, Louisiana, to Mr. Watters for the purchase price of $2,200,000, consisting of $1,057,327 in cash, a $652,744 secured promissory note made by one of the purchasers of Mr. Watters' stock, a $326,773 secured promissory note made by Mr. Watters, and the cancellation by Mr. Watters of the Company's $163,156 debt to him. The following Unaudited Pro Forma Consolidated Balance Sheet as of December 31, 1998 gives effect to the transaction as if it had occurred at that date. The Unaudited Pro Forma Consolidated Statements of Operations for the three months ended December 31, 1998 and the year ended September 30, 1998 give effect to the transaction as if it had occurred as of the beginning of each period.
The Unaudited Pro Forma Consolidated Financial Statements are presented for informational purposes only and are not necessarily indicative of the results of operations that would have been achieved had the transaction been completed at the beginning of each period presented, nor are they indicative of the Company's future results of operations.
The Unaudited Pro Forma Consolidated Financial Statements should be read in conjunction with the historical financial statements of the Company and the related notes thereto.
2. PRO FORMA ADJUSTMENTS
Pro forma adjustments are as follows:
1. A gain on sale of Rick's New Orleans of $347,991 was recorded.
2. A reduction in management salaries (Mr. Watters) in the amount of $150,000 for the year ended September 30, 1998, and $37,500 for the three months ended December 31, 1998 was recognized.
2. PRO FORMA ADJUSTMENTS (CONTINUED)
3. A reduction in interest expense in the amount of $13,054 and $19,581 for the year ended September 30, 1998 and the three months ended December 31, 1998, respectively, was recorded to reflect the receipt of the secured promissory note which will be offset against a similar note payable to the maker of such note.
Exhibits: None
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report on Form 8-K to be signed on its behalf by the undersigned hereunto duly authorized.
RICK'S CABARET INTERNATIONAL, INC.
Date: May 25, 1999
/s/ Eric Langan
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Eric Langan, President
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