Rick’s Cabaret International, Inc. (NASDAQ: RICK), the nation’s premier operator of upscale gentlemen’s clubs, reported consolidated total revenues of $17,311,171 for its first quarter ending December 31, 2008, compared to $10,954,338 for the same period in the previous year, an increase of 58 percent.
The company had net income of $790,832 for the period or eight cents per diluted share, compared with $1,783,272 or 24 cents per share in the previous year.
The higher revenues were primarily attributable to increases of $6,360,179 from the company’s new clubs in Miami, Dallas, Philadelphia and Las Vegas as well as its new media division. Total revenues for same-location-same-period of club operations were essentially flat at $8,767,438, compared with $8,772,902 a year earlier, which the company attributes primarily to decreased customer traffic and spending related to the recession.
The company attributed the drop in earnings to a number of factors, including operating losses exceeding $1.9 million from some of its nightclubs, plus other factors including higher taxes, debt service, the cost of rebranding its Philadelphia nightclub, and an impairment taken in connection with the valuation of a nightclub in San Antonio, Texas.
Eric Langan, President and CEO of Rick’s Cabaret, will discuss the company’s first quarter performance during a conference call with investors today at 4:30 p.m. ET. The call is being webcast by Vcall (http://www.investorcalendar.com/IC/CEPage.asp?ID=140911) and can be accessed at the Rick’s Cabaret website, ricks.com or www.InvestorCalendar.com.
The toll free live participant dial-in number is 877-407-8033; international callers should dial 201-689-8033. The toll free replay number is 877-660-6853 (international calls 201-612-7415) and the call will be available until May 17, 2009. Please enter the number 286 when asked for the account, and then conference ID number 312902.
In its Form 10-Q filed with the Securities and Exchange Commission the company said it has taken significant steps to remedy losses at several clubs. Early results from the conversion of Rick’s Cabaret in Dallas to an XTC Cabaret “are very encouraging,” the company said, and conversion of Rick’s Cabaret in Philadelphia to the company’s Club Onyx format has already resulted in a profitable January and “we expect continued profitability in 2009 going forward.”
The company said it has taken steps to improve performance at its Las Vegas club pending improvement in the tourist-based economy, including significant cost reductions and aggressive marketing campaigns to attract more local customers.
The company also took an impairment of $221,563 for estimated losses on its Encounters nightclub in San Antonio. The company is currently in negotiations to sell the club.
