Rick's Cabaret International Net Income Rises to $7.66 Million vs $3.05 Million, Revenues up 87 Percent to $59.93 Million

Consolidated total revenues for the premier publicly traded operator of upscale gentlemen's clubs were $59.93 million, compared to $32.01 million for the previous year, an increase of 87.2%.

The company had earnings per fully diluted share of 91 cents for the year, compared with 50 cents per share in 2007.

The company said the revenue increase was primarily due to the performance of five new clubs acquired during the fiscal year and continued strong growth from existing clubs, especially Rick's Cabaret-New York City. Sales from nightclub operations for same-location, same-period increased by 14.6 percent.

In its Form 10KSB filed with the SEC the company said operating margins increased to 22.9 percent in fiscal 2008, compared to 12.8 percent for the prior year, due principally to the overall increase in sales and the contribution from Tootsie's Cabaret, a nightclub in Miami Gardens, Florida acquired in November 2007.

The company said the cost of goods sold for the year ended September 30, 2008 was 11.6% of total revenues compared to 12.6% in the previous year, as the company took advantage of volume discounts, improved inventory management and better margins from liquor and food sales.

Interest expense for fiscal 2008 was $2.71 million compared to $1.33 million for the year ended September 30, 2007, an increase primarily due to higher debt related to the purchase of new clubs. Long-term debt was $33.56 million at the end of the fiscal year, compared to $14.39 million a year earlier. Depreciation was $2.28 million compared to $1.44 million for the previous year and amortization was $263,076 compared to $158,492.

At the end of the 2008 fiscal year the company had cash and cash equivalents of $5.60 million compared to $2.99 million at September 30, 2007.

The company said it believes its nightclub operations can continue to grow organically and through careful entry into markets and demographic segments with high growth potential. The company noted that during fiscal 2008, it acquired five nightclub operations and the remaining 49% of the Austin location, for a total cost of $70.47 million including real property of $14.76 million. These acquisitions were funded primarily through debt of $20.99 million, including real property debt of $7.99 million, issuance of restricted common stock valued at $12.96 million, $701,711 in debt forgiveness, and $35.19 million in cash. The company also acquired a media division for approximately $1 million, which will enable the company to create new marketing synergies with major industry product suppliers and new national advertising opportunities. It also provides additional diversification of revenue and income streams while remaining within the Rick's Cabaret core competency.

Reader Comments:

Be the first to leave a comment for this article