Yesterday RICK reported first quarter earnings; I listened in on the conference call and noticed a few key points:
Financial Highlights:
1. Total revenues of $20 million
2. Net income was $782,688
3. Expenses associated with acquisition activities and aggressive marketing costs, which totaled $2.9 million
Net income was affected by the high acquisition costs especially with the merger of VCG. However, President and CEO Mr. Langen said “These expenses are largely behind us now and we are on track with our earnings guidance."
Here are a few positive points that seem to bode well for the company in the future;
1. High end spending seems to be coming back. At both the Superbowl and NBA All-star Game weekends bottle service had increased. Alcohol sales have been up across the board.
2. New night clubs in Texas, (Austin, Fort Worth) have seen an increase in sales and revenues.
3. RICKS has had promotions to get more volume at their clubs. Things such as free cover and dollar beer night has brought in more customers. They also plan on setting up promotional relationships with alcohol companies.
4. The merger with VGC makes RICKS the largest North American gentleman’s club operator
One area that RICKS is still having trouble in is Las Vegas. The Vegas clubs have been fickle, and to combat that RICKS is focusing on customers who spend money rather than quantity of customers.
Langen said that the merger and acquisition of VGC was at a perfect time coming out of a recession and that talks had been ongoing about the possible merger. He expects it to take about 6 months for full integration of new clubs that RICKS will put its name on.
RICKS is continuing to grow and it will be interesting to see if these aggressive acquisition activities pay off for them in the long run.
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