Rick’s Cabaret International, Inc.
(NASDAQ/GM: RICK), premium operator of upscale gentlemen’s
clubs, said today it has signed an agreement to buy a second Dallas
adult nightclub, Platinum Club II, which it will re-brand as an
upscale Club Onyx catering to African-American gentlemen.
Rick’s Cabaret will pay $1.5 million for the
Platinum Club II at 2051 Northwest Highway, just off busy I35-Stemmons
Freeway. The company will also acquire the accompanying real estate at a
cost of $6 million, paying $1.5 million at closing and financing the
balance.
Platinum Club II was recently converted to an Urban Club format. Based
on post-conversion operating data, Rick’s
Cabaret estimates the club will add approximately $4 to $5 million in
annual revenue, with earnings before income tax, depreciation and
amortization (EBITDA) well within the company’s
current range for acquisitions. This transaction was not included in
guidance the company issued in its May 8th
earnings conference call.
“Platinum II has made a good start with its
new Urban Gentlemen’s format and we believe
that adding the Club Onyx brand will only further that success,”
said Eric Langan, President and CEO of Rick’s
Cabaret. “The price we are paying is well
within our target of acquiring clubs in the three to five times EBITDA
range, plus it has strategic value as it gives us a total of three
venues in the Dallas-Ft. Worth market. This improves management
efficiency and gives us important marketing strength and purchasing
power.”
Closing on the transaction is scheduled within 45 days and is subject to
certain closing conditions, including but not limited to Rick’s
Cabaret obtaining adequate financing, issuance by the City of Dallas of
the necessary permit to conduct an adult entertainment business, other
required approvals by relevant regulatory authorities, and other
conditions consistent with transactions of this type.
Earlier this year Rick’s Cabaret purchased
the former Executive Club in Dallas, which has been rebranded as a Rick’s
Cabaret and will have a three-day Grand Opening celebration June 12-14,
with a Due Diligence Ball for the investment community the
evening of June 12th. New Orleans Nights in Ft.
Worth was acquired in 2007 and has also been rebranded as Rick’s
Cabaret. The company owns and operates three Club Onyx nightclubs in
Houston and Charlotte, which have an avid clientele of professional
athletes, musicians and business executives.
About Rick’s Cabaret: Rick’s
Cabaret International, Inc. (NASDAQ: RICK) operates upscale adult
nightclubs serving primarily businessmen and professionals that offer
live adult entertainment, restaurant and bar operations. The company
owns, operates or licenses adult nightclubs in New York City, Miami,
Philadelphia, New Orleans, Charlotte, Dallas, Houston, Minneapolis and
other cities under the names "Rick's Cabaret," "XTC," “Club
Onyx” and “Tootsie’s
Cabaret”. Sexual contact is not permitted at
these locations. Rick’s Cabaret also owns the
adult Internet membership Web site, couplestouch.com, and a network of
online adult auction sites under the flagship URL naughtybids.com. Rick’s
Cabaret common stock is traded on NASDAQ under the symbol RICK. For
further information contact ir@ricks.com.
Forward-looking Statements: This document contains
forward-looking statements that involve a number of risks and
uncertainties that could cause the company’s
actual results to differ materially from those indicated in this
document, including the risks and uncertainties associated with
operating and managing an adult business, the business climates in New
York City and elsewhere, the success or lack thereof in launching and
building the company’s businesses in New York
City and elsewhere, risks and uncertainties related to the operational
and financial results of our Web sites, conditions relevant to real
estate transactions, and numerous other factors such as laws governing
the operation of adult entertainment businesses, competition and
dependence on key personnel. 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 visit ricks.com.
