UNITED STATES SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-QSB
[X] Quarterly report pursuant to Section 13 Or 15(d) of the Securities Exchange
Act of 1934; For the quarterly period ended: December 31, 2004
[_] Transition report pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934
Commission File Number: 0-26958
RICK'S CABARET INTERNATIONAL, INC.
(Exact name of registrant as specified in its charter)
Texas 76-0458229
(State or other jurisdiction IRS Employer
of incorporation or organization) Identification No.)
10959 Cutten Road
Houston, Texas 77066
(Address of principal executive offices, including zip code)
(281) 397-6730
(Registrant's telephone number, including area code)
APPLICABLE ONLY TO CORPORATE ISSUERS
On February 4, 2004, there were 3,700,148 shares of common stock, $.01 par
value, outstanding.
Transitional Small Business Disclosure Format (check one): Yes [_] No [X]
RICK'S CABARET INTERNATIONAL, INC.
TABLE OF CONTENTS
-----------------
PART I FINANCIAL INFORMATION
Item 1. Financial Statements
Consolidated Balance Sheets as of December 31, 2004 (unaudited)
and September 30, 2004 (audited) . . . . . . . . . . . . . . . 1
Consolidated Statements of Operations for the three months
ended December 31, 2004 and 2003 (unaudited) . . . . . . . . . 3
Consolidated Statements of Cash Flows for the three months
ended December 31, 2004 and 2003 (unaudited) . . . . . . . . . 4
Notes to Consolidated Financial Statements . . . . . . . . . . 5
Item 2. Management's Discussion and Analysis or Plan of 8
Operations . . . . . . . . . . . . . . . . . . . . . . . . . .
Item 3. Controls and Procedures. . . . . . . . . . . . . . . . . . . . 12
PART II OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K . . . . . . . . . . . . . . . 12
Signatures . . . . . . . . . . . . . . . . . . . . . . . . . . 13
i
PART I FINANCIAL INFORMATION
Item 1. Financial Statements.
RICK'S CABARET INTERNATIONAL, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
ASSETS
------
12/31/04 9/30/04
(UNAUDITED) (AUDITED)
CURRENT ASSETS
Cash and cash equivalents $ 3,438,214 $ 278,185
Accounts receivable
Trade 71,641 72,909
Other, net 200,471 203,343
Marketable securities 77,859 122,350
Inventories 249,453 261,486
Prepaid expenses and other current assets 1,029,146 1,010,416
------------ ------------
Total current assets 5,066,784 1,948,689
------------ ------------
PROPERTY AND EQUIPMENT
Buildings, land and leasehold improvements 9,942,236 9,421,119
Furniture and equipment 2,254,818 2,210,054
------------ ------------
12,197,054 11,631,173
Accumulated depreciation (2,935,786) (2,798,155)
------------ ------------
Total property and equipment, net 9,261,268 8,833,018
------------ ------------
OTHER ASSETS
Goodwill 1,982,848 1,982,848
Other 448,401 435,204
------------ ------------
Total other assets 2,431,249 2,418,052
------------ ------------
Total assets $16,759,301 $13,199,759
============ ============
1
RICK'S CABARET INTERNATIONAL, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
LIABILITIES AND STOCKHOLDERS' EQUITY
12/31/04 9/30/04
(UNAUDITED) (AUDITED)
CURRENT LIABILITIES
Accounts payable - trade $ 232,793 $ 317,278
Accrued liabilities 505,562 650,348
Current portion of long-term debt 571,841 516,845
------------ ------------
Total current liabilities 1,310,196 1,484,471
Deferred gain on sale of subsidiary 163,739 163,739
Long-term debt less current portion 7,150,020 3,364,765
------------ ------------
Total liabilities 8,623,955 5,012,975
------------ ------------
COMMITMENTS AND CONTINGENCIES --- ---
MINORITY INTERESTS 40,345 40,808
STOCKHOLDERS' EQUITY
Preferred stock, $.10 par, 1,000,000 shares
authorized; none outstanding --- ---
Common stock, $.01 par, 15,000,000 shares
authorized; 4,608,678 shares issued 46,087 46,087
Additional paid-in capital 11,273,149 11,273,149
Accumulated other comprehensive income 64,512 109,002
Accumulated deficit (1,994,967) (1,988,482)
Less 908,530 shares of common stock held in treasury,
at cost (1,293,780) (1,293,780)
------------ ------------
Total stockholders' equity 8,095,001 8,145,976
------------ ------------
Total liabilities and stockholders' equity $16,759,301 $13,199,759
============ ============
2
RICK'S CABARET INTERNATIONAL, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
THREE MONTHS ENDED DECEMBER 31,
2004 2003
(UNAUDITED) (UNAUDITED)
Revenues
Sales of alcoholic beverages $ 1,443,453 $ 1,847,921
Sales of food and merchandise 405,173 390,153
Service revenues 1,574,591 1,348,863
Internet revenues 187,231 200,745
Other 58,409 64,351
------------- --------------
3,668,857 3,852,033
------------- --------------
Operating expenses
Cost of goods sold 471,692 508,869
Salaries and wages 1,343,538 1,287,987
Other general and administrative
Taxes and permits 511,858 532,282
Charge card fees 64,558 65,897
Rent 115,749 119,279
Legal and professional 167,326 135,856
Advertising and marketing 149,715 184,506
Depreciation 137,631 125,658
Other 628,379 584,207
------------- --------------
3,590,446 3,544,541
------------- --------------
Income from operations 78,411 307,492
Interest income 9,188 5,755
Interest expense (93,767) (86,165)
Minority interests 463 9,526
Other (780) 2,648
------------- --------------
Net income (loss) $ (6,485) $ 239,256
============= ==============
Basic and diluted earnings per share:
Net income (loss) $ 0.00 $ 0.06
============= ==============
Weighted average number of common shares outstanding 3,700,148 3,700,148
============= ==============
Comprehensive income for the three months ended December 31, 2004 and 2003 was
($50,975) and $391,756, respectively. This includes the changes in
available-for-sale securities and net income (loss).
3
RICK'S CABARET INTERNATIONAL, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
THREE MONTHS ENDED DECEMBER 31,
2004 2003
(UNAUDITED) (UNAUDITED)
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income (loss) $ (6,485) $ 239,256
Adjustments to reconcile net income (loss) to
cash provided by (used in) operating activities:
Depreciation 137,631 125,658
Minority interests (463) (9,526)
Changes in operating assets and liabilities (325,562) (186,554)
------------- --------------
Cash provided by (used in) operating activities (194,879) 168,834
------------- --------------
CASH FLOWS FROM INVESTING ACTIVITIES:
Additions to property and equipment (139,421) (51,618)
Decrease in notes receivable 80,538 3,036
------------- --------------
Cash used in investing activities (58,883) (48,582)
------------- --------------
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from long-term debt 3,802,000 ---
Payments on long-term debt (388,209) (75,156)
------------- --------------
Cash provided by (used in) financing activities 3,413,791 (75,156)
------------- --------------
NET INCREASE IN CASH 3,160,029 45,096
CASH AT BEGINNING OF PERIOD 278,185 604,865
------------- --------------
CASH AT END OF PERIOD $ 3,438,214 $ 649,961
============= ==============
CASH PAID DURING PERIOD FOR:
Interest $ 86,500 $ 86,165
============= ==============
Non-cash transaction:
During the quarter ended December 31, 2004, the Company purchased a 9,000 square
feet office building for $516,499, payable with $90,039 cash at closing and a
fifteen year promissory note, bearing interest rate at 7%, in the amount of
$426,460.
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RICK'S CABARET INTERNATIONAL, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 2004
1. BASIS OF PRESENTATION
The accompanying unaudited financial statements have been prepared in accordance
with accounting principles generally accepted in the United States of America
for interim financial information and with the instructions to Form 10-QSB of
Regulation S-B. They do not include all information and footnotes required by
accounting principles generally accepted in the United States of America for
complete financial statements. However, except as disclosed herein, there has
been no material change in the information disclosed in the notes to the
financial statements for the year ended September 30, 2004 included in the
Company's Annual Report on Form 10-KSB filed with the Securities and Exchange
Commission. The interim unaudited financial statements should be read in
conjunction with those financial statements included in the Form 10-KSB. In the
opinion of Management, all adjustments considered necessary for a fair
presentation, consisting solely of normal recurring adjustments, have been made.
Operating results for the three months ended December 31, 2004 are not
necessarily indicative of the results that may be expected for the year ending
September 30, 2005.
2. STOCK OPTIONS
The Company accounts for its stock options under the recognition and measurement
principles of Accounting Principles Board ("APB") opinion No. 25, Accounting for
Stock Issued to Employees, and related Interpretations. The following table
illustrates the effect on net income (loss) and earnings (loss) per share if the
Company had applied the fair value recognition provisions of Statement of
Financial Accounting Standard ("SFAS") No. 123, Accounting for Stock Based
Compensation, to stock-based employee compensation. The following presents pro
forma net income (loss) and per share data as if a fair value accounting method
had been used to account for stock-based compensation:
THREE MONTHS ENDED DECEMBER 31,
2004 2003
(Unaudited) (Unaudited)
Net income (loss), as reported $ (6,485) $ 239,256
Less total stock-based employee compensation
expense determined under the fair value
based method for all awards (128,393) (11,943)
------------- --------------
Pro forma net income (loss) $ (134,878) $ 227,313
============= ==============
Earnings per share:
Basic and diluted - as reported $ 0.00 $ 0.06
============= ==============
Basic and diluted - pro forma $ (0.04) $ 0.06
============= ==============
5
RICK'S CABARET INTERNATIONAL, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 2004
3. RECLASSIFICATIONS
Certain prior year amounts have been reclassified to conform to the current year
presentation.
4. COMPREHENSIVE INCOME
The Company reports comprehensive income in accordance with the provisions of
SFAS No. 130, Reporting Comprehensive Income. Comprehensive income consists of
net income (loss) and gains (losses) on available-for-sale marketable
securities.
5. SEGMENT INFORMATION
Below is the financial information related to the Company's segments:
THREE MONTHS ENDED DECEMBER 31,
2004 2003
(Unaudited) (Unaudited)
REVENUES
Club operations $ 3,481,626 $ 3,651,288
Internet websites 187,231 200,745
------------- --------------
$ 3,668,857 $ 3,852,033
============= ==============
NET INCOME (LOSS)
Club operations $ 549,688 $ 577,227
Internet websites 31,186 3,881
Corporate expenses (587,359) (341,852)
------------- --------------
$ (6,485) $ 239,256
------------- --------------
6. REVENUE RECOGNITION
The Company recognizes revenue from the sale of alcoholic beverages, food and
merchandise and services at the point-of-sale upon receipt of cash, check, or
credit card charge. This includes daily, annual and lifetime VIP memberships.
Under Staff Accounting Bulletin No. 101, Revenue Recognition in Financial
Statements, membership revenue should be deferred and recognized over the
estimated membership usage period. Management estimates that the weighted
average useful lives for memberships are 12 and 24 months for annual and
lifetime memberships, respectively. The Company does not track membership usage
by type of
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RICK'S CABARET INTERNATIONAL, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 2004
membership, however it believes these lives are appropriate and conservative,
based on management's knowledge of its client base and membership usage at the
clubs.
If the Company had deferred membership revenue and recognized it based on the
lives above, the impact on revenue and net income recognized would have been an
increase of $6,002 and $6,357 for the three months ended December 31, 2004 and
2003, respectively. This would have also resulted in a deferred revenue balance
of $6,309 and $53,193 for the three months ended December 31, 2004 and 2003,
respectively. Management does not believe the impact of this difference in
accounting treatment is material to the Company's annual and quarterly financial
statements. However, the Company began to record revenues in such manner
effective January 1, 2004, and hence as of December 31, 2004 deferred revenues
of $23,298 has been recorded related to such memberships.
The Company recognizes Internet revenue from monthly subscriptions to its online
entertainment sites when notification of a new subscription is received from the
third party hosting company or from the credit card company, usually two to
three days after the transaction has occurred. The Company recognizes Internet
auction revenue when payment is received from the credit card company as
revenues are not deemed estimable nor collection deemed probable prior to that
point.
7. LONG-TERM DEBT
On November 15 and 17, 2004, the Company borrowed $590,000 and $1,042,000,
respectively, from a financial institution at an annual interest rate of 10%
over a 10 year term. The monthly payment of principal and interest are $5,694
and $10,056, respectively. On November 30, 2004, the Company borrowed $900,000
from an unrelated individual at an 11% annual interest rate over a 10 year term.
The monthly payment of principal and interest is $9,290. On December 30, 2004,
the Company borrowed $1,270,000 from a financial institution at an annual
interest rate of 10% over a 10 year term. The monthly payment of principal and
interest is $12,256. The money received from this financing will be used for
the acquisition and renovation of the New York club.
8. SUBSEQUENT EVENTS
On January 18, 2005, the Company completed the acquisition of Peregrine
Enterprises, Inc., which operated the Paradise Club in Midtown Manhattan, New
York (50 West 33rd Street). The Company provided a total consideration of
$7.625 million for the assets and stock of the former Paradise Club, which had
operated on the site for more than a decade. The transaction consisted of $2.5
million in cash and $5.125 million in a promissory note bearing simple interest
at the rate of 4.0% per annum, part of which is convertible to restricted shares
of Rick's Cabaret common stock at prices ranging from $4.00 to $7.50 per share.
7
Item 2. Management's Discussion and Analysis or Plan of Operations.
The following discussion should be read in conjunction with our audited
consolidated financial statements and related notes thereto included in this
quarterly report.
FORWARD LOOKING STATEMENT AND INFORMATION
The Company is including the following cautionary statement in this Form 10-QSB
to make applicable and take advantage of the safe harbor provision of the
Private Securities Litigation Reform Act of 1995 for any forward-looking
statements made by, or on behalf of, the Company. Forward-looking statements
include statements concerning plans, objectives, goals, strategies, future
events or performance and underlying assumptions and other statements, which are
other than statements of historical facts. Certain statements in this Form
10-QSB are forward-looking statements. Words such as "expects," "believes,"
"anticipates," "may," and "estimates" and similar expressions are intended to
identify forward-looking statements. Such statements are subject to risks and
uncertainties that could cause actual results to differ materially from those
projected. Such risks and uncertainties are set forth below. The Company's
expectations, beliefs and projections are expressed in good faith and are
believed by the Company to have a reasonable basis, including without
limitation, management's examination of historical operating trends, data
contained in the Company's records and other data available from third parties,
but there can be no assurance that management's expectation, beliefs or
projections will result, be achieved, or be accomplished. In addition to other
factors and matters discussed elsewhere herein, the following are important
factors that, in the view of the Company, could cause material adverse affects
on the Company's financial condition and results of operations: the risks and
uncertainties relating to our Internet operations, the impact and implementation
of the sexually oriented business ordinances in the jurisdictions where our
facilities operate, competitive factors, the timing of the openings of other
clubs, the availability of acceptable financing to fund corporate expansion
efforts, and the dependence on key personnel. The Company has no obligation to
update or revise these forward-looking statements to reflect the occurrence of
future events or circumstances.
GENERAL
We presently conduct our business in two different areas of operation:
1. We own and operate upscale adult nightclubs serving primarily businessmen
and professionals. Our nightclubs offer live adult entertainment,
restaurant and bar operations. We own and operate seven adult nightclubs
under the name "Rick's Cabaret" and "XTC" in Houston, Austin and San
Antonio, Texas, and Minneapolis, Minnesota. We also own and operate a
sports bar called "Hummers" and an upscale venue that caters especially to
urban professionals, businessmen and professional athletes called "Club
Onyx" in Houston. No sexual contact is permitted at any of our locations.
2. We have extensive internet activities.
a) We currently own three adult Internet membership Web sites at
www.couplestouch.com, www.M4Mcouples.com, and www.xxxpassword.com. We
-------------------- ------------------ --------------------
8
acquire www.xxxpassword.com site content from wholesalers.
-------------------
b) We operate an online auction site www.naughtybids.com. This site
-------------------
provides our customers with the opportunity to purchase adult products
and services in an auction format. We earn revenues by charging fees
for each transaction conducted on the automated site.
Our nightclub revenues are derived from the sale of liquor, beer, wine, food,
merchandise, cover charges, membership fees, independent contractors' fees,
commissions from vending and ATM machines, valet parking, and other products and
service. Our internet revenues are derived from subscriptions to adult content
internet websites, traffic/referral revenues, and commissions earned on the sale
of products and services through Internet auction sites, and other activities.
Our fiscal year end is September 30.
RESULTS OF OPERATIONS FOR THE THREE MONTHS ENDED DECEMBER 31, 2004 AS COMPARED
TO THE THREE MONTHS ENDED DECEMBER 31, 2003
For the three months ended December 31, 2004, the Company had consolidated total
revenues of $3,668,857 compared to consolidated total revenues of $3,852,033 for
the three months ended December 31, 2003, a decrease of $183,176. The decrease
in total revenues was primarily due to the sale of our subsidiary in the amount
of $136,162, decrease in overall revenues generated by the Company's club
businesses in the amount of $33,500, and a decrease of $13,514 by the Company's
internet business. The decrease in overall revenues of the Company's club
businesses was due to the impact of a presidential election month in November,
which resulted in a 13.74% decrease in total revenues for the month, and a new
competitive club opening and severe weather in Minneapolis. Total revenues for
same-location-same-period of club operations decreased to $3,329,426 for the
three months ended December 31, 2004 from $3,512,125 for same period ended
December 31, 2003, or by 5.20%. Management has developed and implemented a
strategy to regain the market share in the Minneapolis location.
The cost of goods sold for the three months ended December 31, 2004 was 12.85%
of total revenues compared to 13.21% for the three months ended December 31,
2003. The decrease was due primarily to the reduction in costs of maintaining
our internet operations and an addition of XTC club, which has low cost of goods
sold. The cost of goods sold for the club operations for the three months ended
December 31, 2004 was 13.33% of total revenues compared to 13.39% for the three
months ended December 31, 2003. We continue our efforts to achieve reductions
in cost of goods sold of the club operations through improved inventory
management. We continue a program to improve margins from liquor and food sales
and food service efficiency. The cost of goods sold from our internet
operations for the three months ended December 31, 2004 was 4.16% compared to
10.09% for the three months ended December 31, 2003. The cost of goods sold for
same-location-same-period of club operations for the three months ended December
31, 2004 was 13.85%, compared to 13.30% for the same period ended December 31,
2003.
Payroll and related costs for the three months ended December 31, 2004 were
$1,343,538 compared to $1,287,987 for the three months ended December 31, 2003.
The increase was primarily due to the increase in payroll in opening a new club
and corporate activities. Payroll for same-location-same-
9
period of club operations decreased to $995,549 for the three months ended
December 31, 2004 from $1,055,377 for the same period ended December 31, 2003.
Management has implemented labor cost reduction methods and currently believes
that its labor and management staff levels are appropriate.
Other general and administrative expenses for the three months ended December
31, 2004 were $1,775,216 compared to $1,747,685 for the three months ended
December 31, 2003. The increase was due primarily to an increase in direct
operating expenses, utilities, accounting, and depreciation from opening new
locations and legal, financing, and traveling costs due to the acquisition of
New York club. The total cost related to the acquisition of the New York club
is estimated to be $90,000.
Interest expense for the three months ended December 31, 2004 was $93,767
compared to $86,165 for the three months ended December 31, 2003. The increase
was primarily due to the increase in the Company's long-term debts as a result
of acquiring the New York club. As of December 31, 2004, the balance of long
term debt was $7,721,861 compared to $3,951,179 a year earlier.
Net income for the three months ended December 31, 2004 was a deficit of $6,485
compared to a net income of $239,256 for the three months ended December 31,
2003. The decrease in net income was primarily due to the decrease in the
Company's club business and an increase of certain expenses related to the
acquisition of the New York club. Net income for same-location-same-period of
club operations decreased to $534,595 for the three months ended December 31,
2004 from $597,963 for same period ended December 31, 2003, or by 10.60%.
LIQUIDITY AND CAPITAL RESOURCES
At December 31, 2004, the Company had a working capital of $3,756,588 compared
to a working capital of $464,218 at September 30, 2004. The increase in working
capital was primarily due to an increase in cash from new long-term debts, and
other current assets offset by decreases in accounts payable, accrued
liabilities and marketable securities. The value of available-for-sale
marketable securities decreased by $44,491, primarily due to market price
fluctuation.
Net cash used by operating activities in the three months ended December 31,
2004 was $194,879 compared to net cash provided of $168,834 for the three months
ended December 31, 2003. The decrease in cash provided by operating activities
was primarily due to a decrease in net income, accounts payable, and accrued
expenses and an increase in other current assets.
The Company used $58,883 and $48,582 of cash in investing activities and
provided $3,413,791 and used $75,156 of cash in financing activities during the
three months ended December 31, 2004 and 2003, respectively.
The Company's need for capital historically was a result of construction or
acquisition of new clubs, renovation of older clubs, and investments in
technology. The Company has utilized capital to repurchase its common stock as
part of the Company's share repurchase program.
On September 16, 2003, the Company was authorized by its board of directors to
repurchase up to $500,000 worth of the Company's common stock. No shares have
been purchased under this plan.
10
On November 15 and 17, 2004, the Company borrowed $590,000 and $1,042,000,
respectively, from a financial institution at an annual interest rate of 10%
over a 10 year term. The monthly payment of principal and interest are $5,694
and $10,056, respectively. On November 30, 2004, the Company borrowed $900,000
from an unrelated individual at an 11% annual interest rate over a 10 year term.
The monthly payment of principal and interest is $9,290. On December 30, 2004,
the Company borrowed $1,270,000 from a financial institution at an annual
interest rate of 10% over a 10 year term. The monthly payment of principal and
interest is $12,256. The money received from this financing is used for the
acquisition and renovation of New York club.
In the opinion of management, working capital is not a true indicator of the
financial status. Typically, businesses in the industry carry current
liabilities in excess of current assets because the business receives
substantially immediate payment for sales, with nominal receivables, while
accounts payable and other current liabilities normally carry longer payment
terms. Vendors and purveyors often remain flexible with payment terms providing
businesses with opportunities to adjust to short-term business down turns. The
Company considers the primary indicators of financial status to be the long-term
trend of revenue growth and mix of sales revenues, overall cash flow,
profitability from operations and the level of long-term debt.
We have not established lines of credit or financing other than our existing
debt. There can be no assurance that we will be able to obtain additional
financing on reasonable terms in the future, if at all, should the need arise.
In the event the sexually oriented business industry is required in all states
to convert the entertainers who perform at our locations, from being independent
contractors to employee status, we have prepared alternative plans that we
believe will protect our profitability. We believe that the industry standard
of treating the entertainers as independent contractors provides sufficient safe
harbor protection to preclude payroll tax assessment for prior years.
The sexually oriented business industry is highly competitive with respect to
price, service and location, as well as the professionalism of the
entertainment. Although we believe that we are well-positioned to compete
successfully in the future, there can be no assurance that we will be able to
maintain our high level of name recognition and prestige within the marketplace.
SEASONALITY
Our nightclub operations are significantly affected by seasonal factors.
Historically, we have experienced reduced revenues from April through September
with the strongest operating results occurring during October through March.
Our experience to date indicates that there does not appear to be a seasonal
fluctuation in our Internet activities.
GROWTH STRATEGY
The Company believes that its club operations can continue to grow organically
and through careful entry into markets and demographic segments with high growth
potential. Upon careful market research, we may open new clubs. As is the case
with the acquisition of the New York club, we may acquire existing clubs in
locations that are consistent with our growth and income targets, and which
11
appear receptive to the upscale club formula we have developed. We may form
joint ventures or partnerships to reduce start-up and operating costs, with our
Company contributing assets in the form of our brand name and management
expertise. We may also develop new club concepts that are consistent with our
management and marketing skills. We may also acquire real estate in connection
with club operations, although some clubs may be in leased premises.
We also expect to continue to grow our Internet profit centers and plan to focus
in the future on high-margin activities that leverage our marketing skills while
requiring a low level of start-up expense and ongoing operating costs.
Item 3. Controls and Procedures.
As of the end of the period of this report, the Company's principal executive
and principal financial officers carried out an evaluation of the effectiveness
of the design and operation of the Company's disclosure controls and procedures.
This evaluation was carried out under the supervision and with the participation
of the Company's management, including the Company's Chief Executive Officer and
Chief Financial Officer. Based on that evaluation, the Company's Chief
Executive Officer and Chief Financial Officer concluded that the Company's
disclosure controls and procedures are effective in timely alerting them to
material information required to be included in the Company's periodic reports
to the Securities and Exchange Commission. There have been no significant
changes in the Company's internal controls or in other factors, which could
significantly affect internal controls subsequent to the date the Company
carried out its evaluation.
PART II OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K.
(a) Exhibits
Exhibit 31.1 - Certification of Chief Executive Officer and Chief
Financial Officer of Rick's Cabaret International, Inc. required by Rule 13a -
14(1) or Rule 15d - 14(a) of the Securities Exchange Act of 1934, as adopted
pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
Exhibit 32.1 -- Certification of Chief Executive Officer and
Chief Financial Officer of Rick's Cabaret International, Inc. pursuant to
Section 906 of the Sarbanes-Oxley Act of 2002 and Section 1350 of 18 U.S.C. 63.
(b) Reports on Form 8-K
None.
12
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
RICK'S CABARET INTERNATIONAL, INC.
Date: February 14, 2005 By: /s/ Eric S. Langan
-------------------------------
Eric S. Langan
Chief Executive Officer and
Chief Financial Officer
13