February 14, 2005 04:00am
Rick's Cabaret First Quarter 2005 Results
Source: Rick's Cabaret International, Inc.
by: Allan Priaulx
(HOUSTON, TX) -- Rick's Cabaret International, Inc. [Rick: NASDAQ], today reported revenues of $3,668,857 for the period ending December 31, 2004, compared to $3,852,033 for its first quarter a year earlier. The company reported a net loss of $6,485 for the quarter, compared with net income of $239,256 for the three months a year earlier. Earnings per share for the quarter were zero, compared with six cents in the previous year.
The decrease in revenues was primarily due to the sale of the Encounters subsidiary that had generated $136,162 in the prior year, a decrease of $33,500 in overall revenues from the Company's club businesses, plus a decrease of $13,514 in the Company's Internet business.
Total revenues for same-location-same-period club operations decreased by 5.20 percent to $3,329,426 for the three months ended December 31, 2004 from $3,512,125 for same period a year earlier. Net income for same-location-same-period of club operations decreased 10.60 percent for the first three months of the current fiscal year, to $534,595 from $597,963 for same period a year earlier.
Other general and administrative expenses were $1,775,216 for the first quarter, up slightly from the $1,747,685 last year due primarily to an increase in direct operating expenses, utilities, accounting, and depreciation from opening new locations, and an estimated $90,000 in costs associated with the acquisition of a nightclub in New York City that will open in the Summer of 2005 as Rick's Cabaret-NYC.
The company said its cost of goods sold for the first three months of the year was 12.85% of total revenues compared to 13.21% for same period last year, due to three factors: reduced Internet segment costs; the addition of an XTC club in Houston, which has lower cost of goods sold; and a continuing program to improve margins from liquor and food sales and food service efficiency.
Interest expense for the three months ended December 31, 2004 was $93,767 compared to $86,165 for the three months ended December 31, 2003. The increase was primarily due to the increase in the Company's long-term debts as a result of acquiring the New York club. As of December 31, 2004, the balance of long-term debt was $7,721,861 compared to $3,951,179 a year earlier.
During the first quarter the Company borrowed a total of $3,802,000 for the acquisition and renovation of the New York club, which is currently being remodeled and is expected to open in the summer of 2005.
"Severe weather, the distraction of the presidential elections and higher legal and other related costs associated with the acquisition of the New York City club impacted our performance," according to Eric Langan, CEO of Rick's Cabaret. The opening of a competitive club in Minneapolis also caused a drop in year-over-year revenues in that city. "We have implemented a strategy that has enabled us to regain market share in Minneapolis."
[Rick's Cabaret Consolidated Statements of Operations redacted]
Comprehensive income for the three months ended December 31, 2004 and 2003 was ($50,975) and $391,756, respectively. This includes the changes in available-for-sale securities and net income.
About Rick's Cabaret Rick's Cabaret International, Inc. (Ricks.com) owns and operates upscale adult nightclubs serving primarily businessmen and professionals that offer live adult entertainment, restaurant and bar operations. The company owns, operates or licenses ten adult nightclubs in New York City, New Orleans, 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 an adult Internet membership Web site, CouplesTouch.com, and a network of nine online auction sites for adult products under the flagship URL NaughtyBids.com. Rick's Cabaret common stock is traded on the NASDAQ Small Cap market under the symbol Rick. For further information contact IR@Ricks.com.
This press release may contain forward-looking information within the meaning of Section 21E of the Securities Exchange Act of 1934 that involves significant risks and uncertainties, and is subject to the safe harbors created by this section. Important factors that could cause actual results for Rick's Cabaret to differ materially from those indicated in this press release include the risks and uncertainties as to the future operational and financial results of our Web sites, conditions relevant to real estate transactions, the future operational performance of our partners, the laws governing the operation of adult entertainment businesses, competitive and economic factors, dependence on key personnel and the ability to manage operations. Rick's Cabaret has no obligation to update or revise the forward-looking statements to reflect the occurrence of future events or circumstances. Please refer to the documents Rick's Cabaret files from time to time with the Securities and Exchange Commission, in particular the most recent quarterly reports on Form 10-QSB and annual report on Form 10-KGB, which are available at the Company's website, Ricks.com.
Contact for further information:
Allan Priaulx, 212-338-0050, IR@Ricks.com