July 10, 2000 05:09am
Rick's Cabaret International Inc. Completes Acquisition With Voice Media, Inc.
Source: Rick's Cabaret International Inc.
by: Company Press Release
(HOUSTON, TX) -- Rick's Cabaret International, Inc. (Nasdaq:RICK - news) announced today that it has completed the acquisition of XXXPassword.com, from Voice Media, Inc. For the 11 months ended May 31, 2000, the web site had gross revenues in excess of $3,000,000. The acquisition is the first of a series planned by the Company aimed at making Rick's one of the top players in the adult Internet market.
Under the terms of the acquisition, Rick's has issued 700,000 restricted shares of Rick's common stock to Voice Media, of which 250,000 shares will remain in escrow until certain earnings benchmarks are achieved. Voice Media will also be entitled to receive a cash earn-out amount of $380,000 during the six years following Rick's acquisition. In addition, Voice Media could receive up to an additional cash earn out amount of $925,000 if certain earnings benchmarks are achieved. Voice Media would receive the entire amount if the EBIDTA of XXXPassword during the 12 month period following the closing of this transaction exceeds $1,200,000. The cash earn-out portion of the purchase price is payable only from up to 50% of the free cash flow from the web site, payable over six years. As part of the acquisition, Voice Media will continue to manage and market the web site for a flat monthly fee.
Eric Langan, President and CEO of Rick's, stated, ``The purchase of XXXPassword.com confirms our commitment to our acquisition strategy to acquire adult Internet web sites that have substantial revenues, free cash flow and profits that can be generated under the web site's present management. We are continuing to examine a number of other viable acquisition targets to enhance our expanding Internet revenues.'' Rick's also has signed a letter of intent to acquire a second web site from Voice Media, www.clubpix.com, which had gross revenues in excess of $12,000,000 for the 11 months ended May 31, 2000.
Langan also added, ``We anticipate adding $18,000,000 in gross revenues from our Adult Internet operations in the next fiscal year. This combined with our added increase in same store revenues at our cabaret locations should make Rick's profitable during our next fiscal year.
Rick's Cabaret International Inc. opened its first ``Rick's Cabaret'' in Houston, Texas in 1983 and went public with it IPO in 1995, making Rick's the world's first publicly traded topless entertainment business. Rick's owns and operates premier adult entertainment Internet web sites, such as www.DancerDorm.com and www.SmutDog.com. Rick's also owns and/or operates four Rick's Cabaret locations, three of which are in Houston and one of which is in Minneapolis. Rick's also owns and operates two XTC Cabarets, which are located in San Antonio and Austin, through its 93% owned subsidiary, Taurus Entertainment Companies Inc. Rick's and its subsidiaries own all the real estate properties where their cabarets and Internet production studio are located except it's south Houston location, which is leased.
Other companies in the adult entertainment industry include New Frontier Media Inc., Playboy Enterprises Inc. and Private Media Group.
This press release contains forward looking statements that involve a number of risks and uncertainties. Important factors that could cause Rick's actual results to differ materially from those indicated in this press release include the risks and uncertainties as to whether the definitive documentation will ultimately be executed, the future operational and financial results of the newly acquired web site, the future operational strength of Voice Media, the laws governing the operation of adult entertainment businesses, competitive factors, dependence on key personnel, and the ability to manage operations. 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, contact Eric Langan, President of Rick's,
at 713/820-1181, email firstname.lastname@example.org, or Larry Howell, The Howell Group, at 214/368-1592, email email@example.com.