tuscl

Rick's Cabaret International, Inc. Raises $7.2 Million to Be Used for Future Acq

Friday, August 7, 2009 6:04 AM
Thu, 06 Aug 2009 20:13:59 GMT HOUSTON - (Business Wire) Rick's Cabaret International, Inc. (NASDAQ: RICK), the nation's leading chain of upscale gentlemen's clubs, said today it has raised $7.2 million through convertible debentures that will be used to make future acquisitions. “This facility demonstrates clearly that we have excellent access to capital markets and lets sellers of clubs know that we are well positioned with cash to continue our acquisitions program,” said Eric Langan, President and CEO of the company. “We already have several targets of interest, but we want to talk with other possible acquisition candidates at the Gentlemen's Club Owners Expo in Las Vegas August 23-26, which is attended by most club owners.” Mr. Langan continued, "This facility, along with our current cash resources, enables us to make important accretive acquisitions and we are going to shop for the best deals we can find to put our cash to work for our shareholders." Mr. Langan noted that during fiscal 2008, the company acquired five nightclub operations and the remaining 49% of one other location. The company has spent much of fiscal 2009 integrating these acquisitions and evaluating other potential purchases as part of its industry consolidation program, while waiting for the economy to show signs of improvement. “We are starting to see improvements in several of the markets we operate in and hope to see this continue in the next few quarters,” Mr. Langan said. The new three-year debentures bear interest at 10 percent per annum and can be convertible into shares of Rick's common stock at $8.75 per share. The debentures are redeemable by the company on or after six months from issuance if the closing price of Rick's stock is at least $11.50 for 20 consecutive trading days. In addition, the company issued three year warrants exercisable at $8.75 that can be called by Rick's Cabaret if the shares underlying the warrants are registered and the closing price for 20 consecutive trading days is $12.25. Other terms of the debentures and the warrants will be available in the company's 8-K filing with the SEC. [view link]

5 comments

  • Book Guy
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    15 years ago
    "Convertible debentures" eh? Hmm? Really, it could be an excellent business model. Employees: near-slave labor generally available in any larger city; with any labor problem, there is near immediately availability of replacement, so employee restlessness and demands often are squelched of their own accord; management of the one problem patch for employee behavior -- employee time and presence at the workplace at regular hours -- generally not necessary, since customers oddly accept the notion that a worker doesn't always work when she says she works. Clients: perpetual supply of people willing to pay merely to BE NEAR and LOOK AT sexually alluring activity, and desperate to do so, because of the obscenely Puritanical culture surrounding those customers; legal to ply customers with alcohol in order to tempt them to pay more; the more money you are likely to make off of a customer, the more likely that individual customer will be desirable in other manners, as well, such as in terms of politeness, repeat visits, classy behavior. Pricing and economics: pricing levels can be extraordinarily high, relative to costs, thanks to fact that customers seem to put up with this incredible disjunction (maybe it's because customers by definition have never owned a pussy and therefore don't know how much it costs to operate); otherwise, overhead is simply the same as running a bar; and, the ancillary incentives and subjective qualities which keep employees and customers happy, are generally provided in a closed-loop economic cycle which need not be of concern to the club owners. But no. Strip club managers drive their clubs into the ground, instead. Jeepers.
  • txtittyfan
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    15 years ago
    $7.2 million won't buy much in the way of a quality club. Doesn't sound like much of an expansion plan.
  • Dudester
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    15 years ago
    Once upon a time, when Rick's was one place, it was in a nice, well kept up place. Now, it owns several places in Houston and it's original location has a parking lot that looks like it took a B-52 strike. Don't drive in Onyx parking lot unless you have a 70's pickup with high ground clearance. The place in Houston that has the Rick's name on it is a dive. It has nasty looking strippers who look just like crack whores (they probably are). The hustle factor is 100%. Nearby strip joints put it to shame. Rick's should use that 7.2 million to build something that looks like St. James. To build a suitable place will run 2-3 million, then the smart move is to buy adjacent property to comply with distance requirements.
  • rekrap
    •
    15 years ago
    I wish i would have bought this stock when it was trading under $3 dollars.
  • Player11
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    15 years ago
    It really ticked me off when Ricks sold their I45 So Location to Sugars and now its Vixen. Now, if I want to use my Ricks VIP card I have to go all the way to Intercontinental Airport about 40 miles north.
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