Document_And_Entity_Informatio
Document And Entity Information | 3 Months Ended | |
Dec. 31, 2013 | Jan. 31, 2014 | |
Document Information [Line Items] | ' | ' |
Document Type | '10-Q | ' |
Amendment Flag | 'false | ' |
Document Period End Date | 31-Dec-13 | ' |
Document Fiscal Year Focus | '2014 | ' |
Document Fiscal Period Focus | 'Q1 | ' |
Trading Symbol | 'RICK | ' |
Entity Common Stock, Shares Outstanding | ' | 9,640,180 |
Entity Registrant Name | 'RICKS CABARET INTERNATIONAL INC | ' |
Entity Central Index Key | '0000935419 | ' |
Current Fiscal Year End Date | '--09-30 | ' |
Entity Filer Category | 'Accelerated Filer | ' |
CONSOLIDATED_BALANCE_SHEETS
CONSOLIDATED BALANCE SHEETS (USD $) | Dec. 31, 2013 | Sep. 30, 2013 |
In Thousands, unless otherwise specified | ||
Current assets: | ' | ' |
Cash and cash equivalents | $10,252 | $10,656 |
Accounts receivable: | ' | ' |
Trade, net | 1,136 | 1,382 |
Other, net | 543 | 319 |
Marketable securities | 555 | 555 |
Inventories | 1,504 | 1,462 |
Deferred tax asset | 4,801 | 4,618 |
Prepaid expenses and other current assets | 3,466 | 1,668 |
Assets of discontinued operations | 17 | 21 |
Total current assets | 22,274 | 20,681 |
Property and equipment, net | 112,965 | 98,611 |
Other assets: | ' | ' |
Goodwill | 43,987 | 43,987 |
Indefinite lived intangibles, net | 55,231 | 54,966 |
Definite lived intangibles, net | 976 | 1,065 |
Other | 3,451 | 3,790 |
Total other assets | 103,645 | 103,808 |
Total assets | 238,884 | 223,100 |
Current liabilities: | ' | ' |
Accounts payable | 1,756 | 1,804 |
Accrued liabilities | 7,164 | 5,229 |
Texas patron tax liability | 13,773 | 13,035 |
Current portion of long-term debt | 12,472 | 8,830 |
Liabilities of discontinued operations | 47 | 48 |
Total current liabilities | 35,212 | 28,946 |
Deferred tax liability | 27,453 | 26,354 |
Other long-term liabilities | 947 | 956 |
Long-term debt | 75,173 | 69,762 |
Total liabilities | 138,785 | 126,018 |
Commitments and contingencies | ' | ' |
STOCKHOLDERS' EQUITY: | ' | ' |
Preferred stock, $.10 par, 1,000 shares authorized; none issued and outstanding | 0 | 0 |
Common stock, $.01 par, 20,000 shares authorized; 9,561 and 9,504 shares issued and outstanding, respectively | 96 | 95 |
Additional paid-in capital | 62,083 | 61,506 |
Accumulated other comprehensive income | 50 | 50 |
Retained earnings | 34,535 | 32,130 |
Total Rick’s permanent stockholders’ equity | 96,764 | 93,781 |
Noncontrolling interests | 3,335 | 3,301 |
Total permanent stockholders’ equity | 100,099 | 97,082 |
Total liabilities and stockholders’ equity | $238,884 | $223,100 |
CONSOLIDATED_BALANCE_SHEETS_Pa
CONSOLIDATED BALANCE SHEETS [Parenthetical] (USD $) | Dec. 31, 2013 | Sep. 30, 2013 |
In Thousands, except Per Share data, unless otherwise specified | ||
Preferred stock, par value (in dollars per share) | $0.10 | $0.10 |
Preferred stock, shares authorized | 1,000 | 1,000 |
Preferred stock, shares issued | 0 | 0 |
Preferred stock, shares outstanding | 0 | 0 |
Common stock, par value (in dollars per share) | $0.01 | $0.01 |
Common stock, shares authorized | 20,000 | 20,000 |
Common stock, shares issued | 9,561 | 9,504 |
Common stock, shares outstanding | 9,561 | 9,504 |
CONSOLIDATED_STATEMENTS_OF_INC
CONSOLIDATED STATEMENTS OF INCOME (USD $) | 3 Months Ended | |
In Thousands, except Per Share data, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 |
Revenues: | ' | ' |
Sales of alcoholic beverages | $11,689 | $10,406 |
Sales of food and merchandise | 3,423 | 2,578 |
Service revenues | 12,730 | 12,655 |
Other | 1,581 | 1,502 |
Total revenues | 29,423 | 27,141 |
Operating expenses: | ' | ' |
Cost of goods sold | 3,747 | 3,386 |
Salaries and wages | 6,577 | 6,038 |
Stock-based compensation | 3 | 282 |
Other general and administrative: | ' | ' |
Taxes and permits | 4,416 | 4,221 |
Charge card fees | 428 | 374 |
Rent | 1,228 | 570 |
Legal and professional | 908 | 641 |
Advertising and marketing | 1,285 | 1,109 |
Depreciation and amortization | 1,390 | 1,320 |
Insurance | 799 | 499 |
Utilities | 595 | 489 |
Other | 2,431 | 2,278 |
Total operating expenses | 23,807 | 21,207 |
Income from operations | 5,616 | 5,934 |
Other income (expense): | ' | ' |
Interest income and other | 77 | 8 |
Interest expense | -2,012 | -1,643 |
Gain on change in fair value of derivative instruments | 0 | -1 |
Income from continuing operations before income taxes | 3,681 | 4,298 |
Income taxes | 1,323 | 1,584 |
Income from continuing operations | 2,358 | 2,714 |
Loss from discontinued operations, net of income taxes | -1 | -14 |
Net income | 2,357 | 2,700 |
Less: (net income) loss attributable to noncontrolling interests | 47 | -53 |
Net income attributable to Rick’s Cabaret International, Inc. | $2,404 | $2,647 |
Basic earnings (loss) per share attributable to Rick’s shareholders: | ' | ' |
Income from continuing operations (in dollars per share) | $0.25 | $0.28 |
Loss from discontinued operations (in dollars per share) | $0 | $0 |
Net income (in dollars per share) | $0.25 | $0.28 |
Diluted earnings (loss) per share attributable to Rick’s shareholders: | ' | ' |
Income from continuing operations (in dollars per share) | $0.25 | $0.28 |
Loss from discontinued operations (in dollars per share) | $0 | $0 |
Net income (in dollars per share) | $0.25 | $0.28 |
Weighted average number of common shares outstanding: | ' | ' |
Basic (in shares) | 9,546 | 9,575 |
Diluted (in shares) | 9,855 | 9,833 |
CONSOLIDATED_STATEMENTS_OF_COM
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (USD $) | 3 Months Ended | |
In Thousands, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 |
Net income | $2,357 | $2,700 |
Other comprehensive income: | ' | ' |
Unrealized holding gain (loss) on securities available for sale | 0 | 11 |
Comprehensive income to common stockholders | 2,357 | 2,711 |
Less: (net income) loss attributable to noncontrolling interests | 47 | -53 |
Comprehensive income to common stockholders | $2,404 | $2,658 |
CONSOLIDATED_STATEMENTS_OF_CAS
CONSOLIDATED STATEMENTS OF CASH FLOWS (USD $) | 3 Months Ended | |
In Thousands, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 |
CASH FLOWS FROM OPERATING ACTIVITIES: | ' | ' |
Net income | $2,357 | $2,700 |
Loss from discontinued operations | 1 | 14 |
Income from continuing operations | 2,358 | 2,714 |
Adjustments to reconcile net income to cash provided by operating activities: | ' | ' |
Depreciation and amortization | 1,390 | 1,320 |
Deferred taxes | 890 | -109 |
Amortization of note discount | 22 | 45 |
(Gain) loss on change in fair value of derivative instruments | 0 | 1 |
Deferred rents | -9 | 10 |
Stock compensation expense | 3 | 282 |
Changes in operating assets and liabilities: | ' | ' |
Accounts receivable | 22 | 15 |
Inventories | -42 | -139 |
Prepaid expenses and other assets | -1,456 | -86 |
Accounts payable and accrued liabilities | 2,649 | 2,195 |
Cash provided by operating activities of continuing operations | 5,827 | 6,248 |
Cash provided by (used in) operating activities of discontinued operations | 3 | -24 |
Net cash provided by operating activities | 5,830 | 6,224 |
CASH FLOWS FROM INVESTING ACTIVITIES: | ' | ' |
Additions to property and equipment | -5,613 | -2,438 |
Proceeds from sale of marketable securities | 0 | 500 |
Acquisition of development rights in New York building | -5,325 | 0 |
Acquisition of businesses, net of cash acquired | -500 | 0 |
Cash used in investing activities of continuing operations | -11,438 | -1,938 |
CASH FLOWS FROM FINANCING ACTIVITIES: | ' | ' |
Purchase of put options and payments on derivative instrument | 0 | -74 |
Proceeds from long-term debt | 7,025 | 0 |
Payments on long-term debt | -1,767 | -2,402 |
Purchase of treasury stock | 0 | -405 |
Distribution to minority interests | -54 | -54 |
Cash used in financing activities of continuing operations | 5,204 | -2,935 |
NET INCREASE IN CASH AND CASH EQUIVALENTS | -404 | 1,351 |
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD | 10,656 | 5,520 |
CASH AND CASH EQUIVALENTS AT END OF PERIOD | 10,252 | 6,871 |
CASH PAID DURING PERIOD FOR: | ' | ' |
Interest | 1,734 | 1,565 |
Income taxes | $475 | $0 |
CONSOLIDATED_STATEMENTS_OF_CAS1
CONSOLIDATED STATEMENTS OF CASH FLOWS NON CASH TRANSACTIONS (USD $) | 3 Months Ended | |
Dec. 31, 2013 | Dec. 31, 2012 | |
Noncash or Part Noncash Acquisition, Debt Assumed | ' | $9,300,000 |
Unrealized gain (loss) on marketable securities | 11,000 | 11,000 |
Purchase and retirement of treasury shares: Number of shares | ' | 50,733 |
Purchase and retirement of treasury shares: Cost of shares | ' | 405,459 |
Fair Value of Assets Acquired | 4,300,000 | ' |
Issue of detachable warrants in conjunction with debt (classified as discount on debt with offset to additional paid-in capital) Number of shares | 57,500 | ' |
Issue of detachable warrants in conjunction with debt (classified as discount on debt with offset to additional paid-in capital) Value of warrants | 575,000 | ' |
Notes Issued | $3,600,000 | ' |
BASIS_OF_PRESENTATION
BASIS OF PRESENTATION | 3 Months Ended |
Dec. 31, 2013 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ' |
Organization, Consolidation and Presentation of Financial Statements Disclosure [Text Block] | ' |
1. BASIS OF PRESENTATION | |
The accompanying unaudited consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) for interim financial information and with the instructions to Form 10-Q of Regulation S-X. 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 consolidated financial statements for the year ended September 30, 2013 included in the Company's Annual Report on Form 10-K, as filed with the Securities and Exchange Commission. The interim unaudited consolidated financial statements should be read in conjunction with those consolidated financial statements included in the Form 10-K. 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, 2013 are not necessarily indicative of the results that may be expected for the year ending September 30, 2014. | |
RECENT_ACCOUNTING_STANDARDS_AN
RECENT ACCOUNTING STANDARDS AND PRONOUNCEMENTS | 3 Months Ended |
Dec. 31, 2013 | |
New Accounting Pronouncements [Abstract] | ' |
New Accounting Pronouncements [Text Block] | ' |
2. RECENT ACCOUNTING STANDARDS AND PRONOUNCEMENTS | |
In 2013 new guidance was issued regarding the disclosure about reclassification out of accumulated other comprehensive income. This guidance specifies requirements for where amounts reclassified out of accumulated other comprehensive should be presented in the financial statements and related notes to the financial statements. This guidance is effective for annual periods beginning after December 15, 2012 including interim periods within those years and is required to be adopted prospectively. The Company has adopted this guidance beginning with its Form 10-Q for the quarter ending December 31, 2013. | |
SIGNIFICANT_ACCOUNTING_POLICIE
SIGNIFICANT ACCOUNTING POLICIES | 3 Months Ended | |||||||||||||
Dec. 31, 2013 | ||||||||||||||
Accounting Policies [Abstract] | ' | |||||||||||||
Significant Accounting Policies [Text Block] | ' | |||||||||||||
3. SIGNIFICANT ACCOUNTING POLICIES | ||||||||||||||
Following are certain significant accounting principles and disclosures. | ||||||||||||||
Discontinued Operations | ||||||||||||||
In March 2011, the Company made the decision to sell its Las Vegas location and, in April 2011, sharply reduced its operations in order to eliminate losses as the Company sought a buyer for the property. The club was shuttered and the landlord took over the property in June 2011. Therefore, this club is recognized as a discontinued operation in the accompanying consolidated financial statements. | ||||||||||||||
In August 2011, the Company sold a controlling portion of the membership interest in the entity that previously operated its Rick’s Cabaret in Austin, Texas. Accordingly, the Company deconsolidated the subsidiary and carried it as an equity-method investment. The Company had not received any cash flows from the entity since the sale and does not anticipate any in the near future. A new nightclub has not been opened in the space since the Company sold its controlling interest. In June 2013, the Company sold the remaining portion of its membership interest in the entity to a third party and recognized a gain of approximately $2,300 on the sale. Accordingly, the club is recognized as a discontinued operation in the accompanying consolidated financial statements. | ||||||||||||||
Fair Value Accounting | ||||||||||||||
GAAP establishes a three-tier fair value hierarchy, which prioritizes the inputs used in the valuation methodologies in measuring fair value: | ||||||||||||||
⋅ | Level 1 – Observable inputs that reflect quoted prices (unadjusted) for identical assets or liabilities in active markets. | |||||||||||||
⋅ | Level 2 – Include other inputs that are directly or indirectly observable in the marketplace. | |||||||||||||
⋅ | Level 3 – Unobservable inputs which are supported by little or no market activity. | |||||||||||||
The fair value hierarchy also requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. | ||||||||||||||
The Company’s derivative liabilities have been measured principally utilizing Level 2 inputs. | ||||||||||||||
The Company classifies its marketable securities as available-for-sale, which are reported at fair value. Unrealized holding gains and losses, net of the related income tax effect, if any, on available-for-sale securities are excluded from income and are reported as other comprehensive income in the Statement of Other Comprehensive Income. Realized gains and losses from securities classified as available for-sale are included in net income. The Company measures the fair value of its marketable securities based on quoted prices for identical securities in active markets, or Level 1 inputs. As of December 31, 2013, available-for-sale securities consisted of the following: | ||||||||||||||
Gross | ||||||||||||||
(in thousands) | Cost | Unrealized | Fair | |||||||||||
Available for Sale | Basis | Gains | Value | |||||||||||
Tax-Advantaged Bond Fund | $ | 505 | $ | 50 | $ | 555 | ||||||||
The Company reviews its marketable securities to determine whether a decline in fair value of a security below the cost basis is other than temporary. Should the decline be considered other than temporary, the Company writes down the cost basis of the security and includes the loss in current earnings as opposed to an unrealized holding loss. No losses for other than temporary impairments in the Company’s marketable securities portfolio were recognized during the quarter ended December 31, 2013. | ||||||||||||||
Financial assets and liabilities measured at fair value on a recurring basis are summarized below: | ||||||||||||||
(in thousands) | Carrying | |||||||||||||
December 31, 2013 | Amount | Level 1 | Level 2 | Level 3 | ||||||||||
Marketable securities | $ | 555 | $ | 555 | $ | - | $ | - | ||||||
(in thousands) | Carrying | |||||||||||||
September 30, 2013 | Amount | Level 1 | Level 2 | Level 3 | ||||||||||
Marketable securities | $ | 555 | $ | 555 | $ | - | $ | - | ||||||
STOCK_OPTIONS_AND_STOCKBASED_E
STOCK OPTIONS AND STOCK-BASED EMPLOYEE COMPENSATION | 3 Months Ended | |||||||||||||
Dec. 31, 2013 | ||||||||||||||
Stock Option and Stock Based Employee Compensation [Abstract] | ' | |||||||||||||
Stock Option And Stock Based Employee Compensation [Text Block] | ' | |||||||||||||
4. STOCK OPTIONS AND STOCK-BASED EMPLOYEE COMPENSATION | ||||||||||||||
Employee and Director Stock Option Plans | ||||||||||||||
In 1995, the Company adopted the 1995 Stock Option Plan (the “1995 Plan”) for employees and directors. In August 1999, the Company adopted the 1999 Stock Option Plan (the “1999 Plan”) and in 2010, the Company’s Board of Directors approved the 2010 Stock Option Plan (the “2010 Plan”) (collectively, “the Plans”). The 2010 Plan was approved by the shareholders of the Company at the 2011 Annual Meeting of Shareholders. The options granted under the Plans may be either incentive stock options, or non-qualified options. The Plans are administered by the Board of Directors or by a compensation committee of the Board of Directors. The Board of Directors has the exclusive power to select individuals to receive grants, to establish the terms of the options granted to each participant, provided that all options granted shall be granted at an exercise price equal to at least 85% of the fair market value of the common stock covered by the option on the grant date and to make all determinations necessary or advisable under the Plans. | ||||||||||||||
The compensation costs recognized for the three months ended December 31, 2013 and 2012 were $2,922 and $281,745, respectively. There were no stock option grants or exercises for the three month periods ended December 31, 2013 and 2012. | ||||||||||||||
Stock Option Activity | ||||||||||||||
The following is a summary of all stock option transactions for the three months ended December 31, 2013: | ||||||||||||||
Weighted | ||||||||||||||
Average | ||||||||||||||
Remaining | ||||||||||||||
Weighted | Contractual | Aggregate | ||||||||||||
(in thousands, except for per share | Average | Term | Intrinsic | |||||||||||
and year information) | Shares | Exercise Price | (years) | Value | ||||||||||
Outstanding as of September 30, 2013 | 765 | $ | 8.41 | |||||||||||
Granted | - | - | ||||||||||||
Cancelled or expired | - | - | ||||||||||||
Exercised | - | - | ||||||||||||
Outstanding as of December 31, 2013 | 765 | $ | 8.41 | 0.58 | $ | 2,424 | ||||||||
Options exercisable as of December 31, 2013 | 755 | $ | 8.41 | 0.57 | $ | 2,116 | ||||||||
GOODWILL_AND_OTHER_INTANGIBLES
GOODWILL AND OTHER INTANGIBLES | 3 Months Ended | |||||||||||||
Dec. 31, 2013 | ||||||||||||||
Goodwill and Intangible Assets Disclosure [Abstract] | ' | |||||||||||||
Goodwill and Intangible Assets Disclosure [Text Block] | ' | |||||||||||||
5. GOODWILL AND OTHER INTANGIBLES | ||||||||||||||
Following are the changes in the carrying amounts of goodwill and licenses for the three months ended December 31, 2013 and 2012: | ||||||||||||||
(in thousands) | 2013 | 2012 | ||||||||||||
Licenses | Goodwill | Licenses | Goodwill | |||||||||||
Beginning balance | $ | 54,966 | $ | 43,987 | $ | 50,608 | $ | 43,421 | ||||||
Intangibles acquired | 265 | - | - | - | ||||||||||
Other | - | - | - | -431 | ||||||||||
Ending balance | $ | 55,231 | $ | 43,987 | $ | 50,608 | $ | 42,990 | ||||||
COMMON_STOCK
COMMON STOCK | 3 Months Ended |
Dec. 31, 2013 | |
Equity [Abstract] | ' |
Common Stock [Text Block] | ' |
6. COMMON STOCK | |
During the quarter ended December 31, 2012, the Company purchased 50,733 shares of Company common stock for its treasury at an aggregate cost of $405,459. These shares have been retired. | |
EARNINGS_PER_SHARE_EPS
EARNINGS PER SHARE (EPS) | 3 Months Ended | |||||||
Dec. 31, 2013 | ||||||||
Earnings Per Share [Abstract] | ' | |||||||
Earnings Per Share [Text Block] | ' | |||||||
7 | EARNINGS PER SHARE (EPS) | |||||||
The Company computes earnings per share in accordance with Accounting Standards Codification (“ASC”) 260, Earnings Per Share. Basic earnings per share includes no dilution and is computed by dividing income available to common stockholders by the weighted average number of common shares outstanding for the period. Diluted earnings per share reflect the potential dilution of securities that could share in the earnings of the Company. | ||||||||
Potential common stock shares consist of shares that may arise from outstanding dilutive common stock warrants and options (the number of which is computed using the “treasury stock method”) and from outstanding convertible debentures (the number of which is computed using the “if converted method”). Diluted EPS considers the potential dilution that could occur if the Company’s outstanding common stock options, warrants and convertible debentures were converted into common stock that then shared in the Company’s earnings (as adjusted for interest expense that would no longer occur if the debentures were converted). | ||||||||
(in thousands, except per share data) | FOR THE QUARTER ENDED | |||||||
DECEMBER 31, | ||||||||
2013 | 2012 | |||||||
Basic earnings per share: | ||||||||
Income from continuing operations attributable to Rick's shareholders | $ | 2,405 | $ | 2,661 | ||||
Loss from discontinued operations, net of income taxes | -1 | -14 | ||||||
Net income attributable to Rick's shareholders | $ | 2,404 | $ | 2,647 | ||||
Average number of common shares outstanding | 9,546 | 9,575 | ||||||
Basic earnings (loss) per share: | ||||||||
Income (loss) from continuing operations attributable to Rick's shareholders | $ | 0.25 | $ | 0.28 | ||||
Discontinued operations | $ | 0 | $ | 0 | ||||
Net income (loss) attributable to Rick's shareholders | $ | 0.25 | $ | 0.28 | ||||
Diluted earnings per share: | ||||||||
Income (loss) from continuing operations attributable to Rick's shareholders | $ | 2,405 | $ | 2,661 | ||||
Adjustment. to net earnings from assumed conversion of debentures (2) | 21 | 65 | ||||||
Adjusted income (loss) from continuing operations | 2,426 | 2,726 | ||||||
Discontinued operations | -1 | -14 | ||||||
Adjusted net income (loss) attributable to Rick's shareholders | $ | 2,425 | $ | 2,712 | ||||
Average number of common shares outstanding: | ||||||||
Common shares outstanding | 9,546 | 9,575 | ||||||
Potential dilutive shares resulting from exercise of warrants and options (1) | 171 | 4 | ||||||
Potential dilutive shares resulting from conversion of debentures (2) | 138 | 254 | ||||||
Total average number of common shares outstanding used for dilution | 9,855 | 9,833 | ||||||
Diluted earnings (loss) per share: | ||||||||
Income (loss) from continuing operations attributable to Rick's shareholders | $ | 0.25 | $ | 0.28 | ||||
Discontinued operations | $ | 0 | $ | 0 | ||||
Net income (loss) attributable to Rick's shareholders | $ | 0.25 | $ | 0.28 | ||||
(1) All outstanding warrants and options were considered for the EPS computation. Potential dilutive options and warrants of 726,792 and 864,081 for the three months ended December 31, 2013 and 2012, respectively have been excluded from earnings per share due to being anti-dilutive. | ||||||||
(2) Convertible debentures (principal and accrued interest) outstanding at December 31, 2013 and 2012 totaling $11.9 million and $2.6 million, respectively, were convertible into common stock at a price of $10.00, $10.25 and $12.50 per share in 2013 and $10.00 and $10.25 per share in 2012. | ||||||||
*EPS may not foot due to rounding. | ||||||||
ACQUISITIONS
ACQUISITIONS | 3 Months Ended | ||||
Dec. 31, 2013 | |||||
Business Combinations [Abstract] | ' | ||||
Business Combination Disclosure [Text Block] | ' | ||||
8. ACQUISITIONS | |||||
Quarter Ended December 31, 2013 | |||||
A subsidiary of the Company closed a transaction involving the air rights above the Company’s 33rd Street club in Manhattan, New York in October 2013. The subsidiary entered into a contract to buy the land and building for $10 million at any time in the next five years. Concurrent with the building transaction, a third party (the “Third Party Purchaser”) purchased the balance of the air rights of the property that are not subject to the Option Agreement. The purchase price for these air rights was $13,000,000, of which the Company’s subsidiary contributed $5,200,000 in connection with the overall business transaction. The transactions are part of a previously announced transaction under which the Company agreed to purchase the land and building for $23 million. The new agreement also amends the lease for the three-story building at 50 West 33rd Street to $100,000 per month for the next five years rather than the $180,000 per month called for in the original agreement. | |||||
In October 2013, the Company purchased 49 percent of a corporation that operates the Dallas club “PT’s Platinum” and also acquired the building and personal property. Total cost of the transaction was $500,000. Due to the Company having effective control of the business, this subsidiary is being consolidated in the Company’s consolidated financial statements, effective as of the date of the purchase. | |||||
The following information summarizes the allocation of fair values assigned to the assets at the purchase date. | |||||
Buildings | $ | 350 | |||
Equipment and land | 20 | ||||
SOB license | 265 | ||||
Minority interest | -135 | ||||
Net assets | $ | 500 | |||
Quarter Ended December 31, 2012 | |||||
In connection with the acquisition of the Foster Clubs, as explained in Note M in the Company’s Form 10-K for the year ended September 30, 2012, the Company’s wholly owned subsidiary, Jaguars Holdings, Inc. (“JHI”), entered into a Commercial Contract (the “Real Estate Agreement”), which agreement provided for JHI to purchase the real estate where the Foster Clubs are located. The transactions contemplated by the Real Estate Agreement closed on October 16, 2012. The purchase price of the real estate was $10.1 million (discounted to $9.6 million as explained below) and was paid with $350,000 in cash, $9.1 million in mortgage notes, including the assumption of approximately $4.2 million in notes, and an agreement to make a one-time payment of $650,000 in twelve years that bears no interest. The note bears interest at the rate of 9.5%, is payable in 143 equal monthly installments and is secured by the real estate properties. The Company has recorded a debt discount of $431,252 related to the one-time payment of $650,000. The Company reduced previously recognized goodwill because the purchase of the Foster Clubs’ operations and real estate were considered to be one purchase transaction with multiple closings and were included in the same purchase agreement. | |||||
The following information summarizes the allocation of fair values assigned to the assets at the purchase date. | |||||
Buildings and land | $ | 10,066 | |||
Goodwill | -431 | ||||
Net assets | $ | 9,635 | |||
INCOME_TAXES
INCOME TAXES | 3 Months Ended | |||||||
Dec. 31, 2013 | ||||||||
Income Tax Disclosure [Abstract] | ' | |||||||
Income Tax Disclosure [Text Block] | ' | |||||||
9. INCOME TAXES | ||||||||
Income tax expense on continuing operations for the periods presented differs from the “expected” federal income tax expense computed by applying the U.S. federal statutory rate of 34% to earnings before income taxes for the three months ended December 31, as a result of the following: | ||||||||
(in thousands) | 2013 | 2012 | ||||||
Computed expected tax expense | $ | 1,252 | $ | 1,461 | ||||
State income taxes | 53 | 36 | ||||||
Stock option disqualifying dispositions and other permanent differences | 18 | 87 | ||||||
Total income tax expense | $ | 1,323 | $ | 1,584 | ||||
Included in the Company’s deferred tax liabilities at December 31, 2013 is approximately $17.2 million representing the tax effect of indefinite lived intangible assets from club acquisitions which are not deductible for tax purposes. These deferred tax liabilities will remain in the Company’s balance sheet until the related clubs are sold. | ||||||||
The Company recognizes interest accrued related to unrecognized tax benefits in interest expense and penalties in operating expenses. During the quarters ended December 31, 2013 and 2012, the Company recognized no interest and penalties for unrecognized tax benefits. The Company or one of its subsidiaries files income tax returns in the U.S. federal jurisdiction, and various states. The last three years remain open to tax examination. | ||||||||
LONGTERM_DEBT
LONG-TERM DEBT | 3 Months Ended | ||
Dec. 31, 2013 | |||
Debt Disclosure [Abstract] | ' | ||
Long-term Debt [Text Block] | ' | ||
10. LONG-TERM DEBT | |||
On October 15, 2013, the Company sold to certain investors (i) 9% Convertible Debentures with an aggregate principal amount of $4,525,000 (the “Debentures”), under the terms and conditions set forth in the Debentures, and (ii) warrants to purchase a total of 72,400 shares of the Company’s common stock (the “Warrants”), under the terms and conditions set forth in the Warrants. Each of the Debentures has a term of three years, is convertible into shares of our common stock at a conversion price of $12.50 per share (subject to adjustment), and has an annual interest rate of 9%, with one initial payment of interest only due April 15, 2014. Thereafter, the principal amount is payable in 10 equal quarterly principal payments, which amounts to a total of $452,500, plus accrued and unpaid interest. Six months after the issue date of the Debentures, we have the right to redeem the Debentures if the Company’s common stock has a closing price of $16.25 (subject to adjustment) for 20 consecutive trading days. The Warrants have an exercise price of $12.50 per share (subject to adjustment) and expire on October 15, 2016. In the event there is an effective registration statement registering the shares of common stock underlying the Warrants, we have the right to require exercise of the Warrants if our common stock has a closing price of $16.25 (subject to adjustment) for 20 consecutive trading days. The Company sold the Debentures and Warrants to the investors in a private transaction and received consideration of $4,525,000. An adviser to the Company received compensation in the amount of $271,500 in connection with advising the Company regarding the sale of the Debentures and Warrants. | |||
The fair value of the warrants was estimated to be $105,318 in accordance with FASB ASC 820, Fair Value Measurements, using a Black-Scholes option-pricing model using the following weighted average assumptions: | |||
Volatility | 28.4 | % | |
Expected life | 1.5 years | ||
Expected dividend yield | - | ||
Risk free rate | 0.33 | % | |
The cost of the warrants has been recognized as a discount on the related debt and was amortized over the life of the debt. | |||
In October 2013 the Company borrowed $ 2.5 million from an individual. The note is collateralized by a second lien on the Company’s Miami nightclub, bears interest at 13% and interest only is payable monthly until the principal matures in 36 months. | |||
In December 2013 the Company purchased an aircraft for $4.3 million which was partially financed by a $3.6 million note to a bank. The note is payable $40,654 monthly, including interest at 7.45% until February 2017 when the entire principal balance becomes due. | |||
COMMITMENTS_AND_CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 3 Months Ended |
Dec. 31, 2013 | |
Commitments and Contingencies Disclosure [Abstract] | ' |
Commitments and Contingencies Disclosure [Text Block] | ' |
11. COMMITMENTS AND CONTINGENCIES | |
Legal Matters | |
Beginning January 1, 2008, the Company’s Texas clubs became subject to a new state law requiring each club to collect and pay a $5 surcharge for every club visitor. A lawsuit was filed by the Texas Entertainment Association (“TEA”), an organization to which the Company is a member, alleging the fee amounts to be an unconstitutional tax. On March 28, 2008, a State District Court Judge in Travis County, Texas ruled that the new state law violates the First Amendment to the United States Constitution and is therefore invalid. The judge’s order enjoined the State from collecting or assessing the tax. The State appealed the Court’s ruling. In Texas, when cities or the State give notice of appeal, it supersedes and suspends the judgment, including the injunction. Therefore, the judgment of the District Court cannot be enforced until the appeals are completed. Given the suspension of the judgment, the State gave notice of its right to collect the tax pending the outcome of its appeal but took no affirmative action to enforce that right. On June 5, 2009, the Court of Appeals for the Third District (Austin) affirmed the District Court’s judgment that the Sexually Oriented Business (“S.O.B.”) Fee violated the First Amendment to the U.S. Constitution but on August 26, 2011, the Texas Supreme Court reversed the judgment of the Court of Appeals, ruling that the SOB Fee does not violate the First Amendment to the U.S. Constitution, and remanded the case to the District Court to determine whether the fee violates the Texas Constitution. | |
TEA appealed the Texas Supreme Court's decision to the U.S. Supreme Court (regarding the constitutionality of the fee under the First Amendment of the U.S. Constitution), but the U.S. Supreme Court denied the appeal on January 23, 2012. Subsequently, the case was remanded to the District Court for consideration of the remaining issues raised by TEA. On June 28, 2012, the District Court in Travis County held a hearing on TEA’s Texas Constitutional claims and on July 9 entered an order finding that the tax was a constitutional Occupations Tax. The Court denied the remainder of TEA’s constitutional claims. TEA is now in the process of appealing this new decision to the Texas Third Court of Appeals. | |
The Company has not made any payments of these taxes since the first quarter of 2009 and plans not to make any such payments while the case is pending in the courts. However, the Company will continue to accrue and expense the potential tax liability on its financial statements, so any ultimate negative ruling will not have any effect on its consolidated income statement and will only affect the consolidated balance sheet. If the final decision of the courts is ultimately in the Company’s favor, as it believes it will be, then the Company will record a one-time gain of the entire amount previously expensed. | |
Since the inception of the tax, the Company has paid more than $2 million to the State of Texas under protest for all four quarters of 2008 and the first quarter of 2009, expensing it in the consolidated financial statements (except for two locations in Dallas where the taxes have not been paid, but the Company is accruing and expensing the liability). For all subsequent quarters, as a result of the Third Court’s 2009 decision, the Company has accrued the tax, but not paid the State. Accordingly, as of December 31, 2013, the Company has approximately $13.8 million in accrued liabilities for this tax. Patron tax expense amounted to approximately $738,000 and $891,000 for the quarters ended December 31, 2013 and 2012, respectively. The Company’s Texas clubs have filed a separate lawsuit against the State in which the Company raises additional challenges to the statute imposing the fee or tax, demanding repayment of the taxes the Company has paid under this statute. The courts have not yet addressed these additional claims. If the Company is successful in the remaining litigation, the amount the Company has paid under protest should be repaid or applied to any future, constitutional admission tax or other Texas state tax liabilities. | |
The Company’s subsidiary that operated the club in Las Vegas has recently been audited by the Department of Taxation of the State of Nevada for sales and other taxes. The audit period was from the date of opening in September 2008 through July 31, 2010. As a result of the audit, the Department of Taxation contends that the Company’s Las Vegas subsidiary owes approximately $2.1 million, including penalties and interest, for Las Vegas Live Entertainment Taxes. The Company does not believe it is subject to the Live Entertainment Tax and is protesting the audit results. Accordingly, the Company has not accrued the contingent liability in the accompanying consolidated financial statements. It is unknown at this time whether the resolution of this uncertainty will have a material effect on the Company’s operations. | |
Rick’s Cabaret International, Inc. (“RCII”) and subsidiaries RCI NY, Inc. (“RCI NY”) and Peregrine Enterprises, Inc. (“Peregrine”) have been defendants in a federal court action, pending since March 30, 2009, in the Southern District of New York relating to claims under the Fair Labor Standards Act and New York’s wage and hour laws. While Plaintiffs do not specifically allege the amount of monetary relief sought in their Complaint, Plaintiffs have alleged that they are seeking judgment equal to any unpaid wages, liquidated damages, interest, costs and attorneys’ fees pursuant to the FLSA and New York Labor Law. RCII, RCI NY and Peregrine deny liability in this matter, are vigorously defending the allegations and have asserted counterclaims and affirmative defenses for offset and unjust enrichment. Discovery is now complete and on September 10, 2013, the court ruled on the parties’ motions for summary judgment. The court granted summary judgment in favor of the Plaintiffs on their causes of action for minimum wage and held that entertainers at Rick’s NY are employees, that Peregrine was an employer of the Plaintiffs and that under federal law, Rick’s NY’s statutory duty to pay minimum wages was not satisfied by the performance fees Plaintiffs’ received. The court has not yet ruled on whether performance fees can offset minimum wages under New York state law. The court denied the Plaintiffs’ attempt to hold RCII or RCI NY liable as joint employers with Peregrine and the issue of whether RCII and RCI NY are also employers will be determined at a trial. Ultimately, RCII, RCI NY and Peregrine intend to appeal the summary judgment ruling. The defendants also intend to move to decertify the Rule 23 class and the FLSA collective. | |
The Company and its subsidiaries were insured under a liability policy issued by Indemnity Insurance Corporation, RRG (“IIC”) through October 25, 2013—the Company switched to a different insurer on that date. By order dated November 7, 2013, the Court of Chancery of the State of Delaware declared IIC impaired, insolvent and in an unsafe condition and placed IIC under the supervision of the Insurance Commissioner of the State of Delaware (“Commissioner”) in her capacity as receiver. The order empowers the Commissioner to rehabilitate IIC through a variety of means, including gathering assets and marshaling those assets as necessary. Further, the order has stayed or abated pending lawsuits involving IIC as the insurer until May 6, 2014. As a result, it is unclear to what degree, if any, the Company and its subsidiaries will have insurance coverage under the liability policy with IIC until after the rehabilitation plan is completed and the stay is lifted on May 6, 2014. Currently, there are multiple civil lawsuits pending or threatened against the Company and its subsidiaries. There is also the potential that other lawsuits of which the Company currently is unaware could be filed against the Company for incidents that occurred before October 25, 2013. There can be no assurances the Company will have adequate insurance coverage for any of these lawsuits. It is unknown at this time what effect, if any, this uncertainty will have on the Company. The Company has obtained general liability coverage from another insurer, effective October 25, 2013 which will cover any claims arising from actions after that date. | |
SIGNIFICANT_ACCOUNTING_POLICIE1
SIGNIFICANT ACCOUNTING POLICIES (Policies) | 3 Months Ended | |||||||||||||
Dec. 31, 2013 | ||||||||||||||
Accounting Policies [Abstract] | ' | |||||||||||||
Discontinued Operations, Policy [Policy Text Block] | ' | |||||||||||||
Discontinued Operations | ||||||||||||||
In March 2011, the Company made the decision to sell its Las Vegas location and, in April 2011, sharply reduced its operations in order to eliminate losses as the Company sought a buyer for the property. The club was shuttered and the landlord took over the property in June 2011. Therefore, this club is recognized as a discontinued operation in the accompanying consolidated financial statements. | ||||||||||||||
In August 2011, the Company sold a controlling portion of the membership interest in the entity that previously operated its Rick’s Cabaret in Austin, Texas. Accordingly, the Company deconsolidated the subsidiary and carried it as an equity-method investment. The Company had not received any cash flows from the entity since the sale and does not anticipate any in the near future. A new nightclub has not been opened in the space since the Company sold its controlling interest. In June 2013, the Company sold the remaining portion of its membership interest in the entity to a third party and recognized a gain of approximately $2,300 on the sale. Accordingly, the club is recognized as a discontinued operation in the accompanying consolidated financial statements. | ||||||||||||||
Fair Value Measurement, Policy [Policy Text Block] | ' | |||||||||||||
Fair Value Accounting | ||||||||||||||
GAAP establishes a three-tier fair value hierarchy, which prioritizes the inputs used in the valuation methodologies in measuring fair value: | ||||||||||||||
⋅ | Level 1 – Observable inputs that reflect quoted prices (unadjusted) for identical assets or liabilities in active markets. | |||||||||||||
⋅ | Level 2 – Include other inputs that are directly or indirectly observable in the marketplace. | |||||||||||||
⋅ | Level 3 – Unobservable inputs which are supported by little or no market activity. | |||||||||||||
The fair value hierarchy also requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. | ||||||||||||||
The Company’s derivative liabilities have been measured principally utilizing Level 2 inputs. | ||||||||||||||
The Company classifies its marketable securities as available-for-sale, which are reported at fair value. Unrealized holding gains and losses, net of the related income tax effect, if any, on available-for-sale securities are excluded from income and are reported as other comprehensive income in the Statement of Other Comprehensive Income. Realized gains and losses from securities classified as available for-sale are included in net income. The Company measures the fair value of its marketable securities based on quoted prices for identical securities in active markets, or Level 1 inputs. As of December 31, 2013, available-for-sale securities consisted of the following: | ||||||||||||||
Gross | ||||||||||||||
(in thousands) | Cost | Unrealized | Fair | |||||||||||
Available for Sale | Basis | Gains | Value | |||||||||||
Tax-Advantaged Bond Fund | $ | 505 | $ | 50 | $ | 555 | ||||||||
The Company reviews its marketable securities to determine whether a decline in fair value of a security below the cost basis is other than temporary. Should the decline be considered other than temporary, the Company writes down the cost basis of the security and includes the loss in current earnings as opposed to an unrealized holding loss. No losses for other than temporary impairments in the Company’s marketable securities portfolio were recognized during the quarter ended December 31, 2013. | ||||||||||||||
Financial assets and liabilities measured at fair value on a recurring basis are summarized below: | ||||||||||||||
(in thousands) | Carrying | |||||||||||||
December 31, 2013 | Amount | Level 1 | Level 2 | Level 3 | ||||||||||
Marketable securities | $ | 555 | $ | 555 | $ | - | $ | - | ||||||
(in thousands) | Carrying | |||||||||||||
September 30, 2013 | Amount | Level 1 | Level 2 | Level 3 | ||||||||||
Marketable securities | $ | 555 | $ | 555 | $ | - | $ | - | ||||||
SIGNIFICANT_ACCOUNTING_POLICIE2
SIGNIFICANT ACCOUNTING POLICIES (Tables) | 3 Months Ended | |||||||||||||
Dec. 31, 2013 | ||||||||||||||
Accounting Policies [Abstract] | ' | |||||||||||||
Available-for-sale Securities [Table Text Block] | ' | |||||||||||||
The Company measures the fair value of its marketable securities based on quoted prices for identical securities in active markets, or Level 1 inputs. As of December 31, 2013, available-for-sale securities consisted of the following: | ||||||||||||||
Gross | ||||||||||||||
(in thousands) | Cost | Unrealized | Fair | |||||||||||
Available for Sale | Basis | Gains | Value | |||||||||||
Tax-Advantaged Bond Fund | $ | 505 | $ | 50 | $ | 555 | ||||||||
Fair Value, Assets and Liabilities Measured on Nonrecurring Basis, Valuation Techniques [Table Text Block] | ' | |||||||||||||
Financial assets and liabilities measured at fair value on a recurring basis are summarized below: | ||||||||||||||
(in thousands) | Carrying | |||||||||||||
December 31, 2013 | Amount | Level 1 | Level 2 | Level 3 | ||||||||||
Marketable securities | $ | 555 | $ | 555 | $ | - | $ | - | ||||||
(in thousands) | Carrying | |||||||||||||
September 30, 2013 | Amount | Level 1 | Level 2 | Level 3 | ||||||||||
Marketable securities | $ | 555 | $ | 555 | $ | - | $ | - | ||||||
STOCK_OPTIONS_AND_STOCKBASED_E1
STOCK OPTIONS AND STOCK-BASED EMPLOYEE COMPENSATION (Tables) | 3 Months Ended | |||||||||||||
Dec. 31, 2013 | ||||||||||||||
Stock Option and Stock Based Employee Compensation [Abstract] | ' | |||||||||||||
Schedule of Share-based Compensation, Stock Options, Activity [Table Text Block] | ' | |||||||||||||
The following is a summary of all stock option transactions for the three months ended December 31, 2013: | ||||||||||||||
Weighted | ||||||||||||||
Average | ||||||||||||||
Remaining | ||||||||||||||
Weighted | Contractual | Aggregate | ||||||||||||
(in thousands, except for per share | Average | Term | Intrinsic | |||||||||||
and year information) | Shares | Exercise Price | (years) | Value | ||||||||||
Outstanding as of September 30, 2013 | 765 | $ | 8.41 | |||||||||||
Granted | - | - | ||||||||||||
Cancelled or expired | - | - | ||||||||||||
Exercised | - | - | ||||||||||||
Outstanding as of December 31, 2013 | 765 | $ | 8.41 | 0.58 | $ | 2,424 | ||||||||
Options exercisable as of December 31, 2013 | 755 | $ | 8.41 | 0.57 | $ | 2,116 | ||||||||
GOODWILL_AND_OTHER_INTANGIBLES1
GOODWILL AND OTHER INTANGIBLES (Tables) | 3 Months Ended | |||||||||||||
Dec. 31, 2013 | ||||||||||||||
Goodwill and Intangible Assets Disclosure [Abstract] | ' | |||||||||||||
Schedule of Intangible Assets and Goodwill [Table Text Block] | ' | |||||||||||||
Following are the changes in the carrying amounts of goodwill and licenses for the three months ended December 31, 2013 and 2012: | ||||||||||||||
(in thousands) | 2013 | 2012 | ||||||||||||
Licenses | Goodwill | Licenses | Goodwill | |||||||||||
Beginning balance | $ | 54,966 | $ | 43,987 | $ | 50,608 | $ | 43,421 | ||||||
Intangibles acquired | 265 | - | - | - | ||||||||||
Other | - | - | - | -431 | ||||||||||
Ending balance | $ | 55,231 | $ | 43,987 | $ | 50,608 | $ | 42,990 | ||||||
EARNINGS_PER_SHARE_EPS_Tables
EARNINGS PER SHARE (EPS) (Tables) | 3 Months Ended | |||||||
Dec. 31, 2013 | ||||||||
Earnings Per Share [Abstract] | ' | |||||||
Schedule of Earnings Per Share, Basic and Diluted [Table Text Block] | ' | |||||||
Diluted EPS considers the potential dilution that could occur if the Company’s outstanding common stock options, warrants and convertible debentures were converted into common stock that then shared in the Company’s earnings (as adjusted for interest expense that would no longer occur if the debentures were converted). | ||||||||
(in thousands, except per share data) | FOR THE QUARTER ENDED | |||||||
DECEMBER 31, | ||||||||
2013 | 2012 | |||||||
Basic earnings per share: | ||||||||
Income from continuing operations attributable to Rick's shareholders | $ | 2,405 | $ | 2,661 | ||||
Loss from discontinued operations, net of income taxes | -1 | -14 | ||||||
Net income attributable to Rick's shareholders | $ | 2,404 | $ | 2,647 | ||||
Average number of common shares outstanding | 9,546 | 9,575 | ||||||
Basic earnings (loss) per share: | ||||||||
Income (loss) from continuing operations attributable to Rick's shareholders | $ | 0.25 | $ | 0.28 | ||||
Discontinued operations | $ | 0 | $ | 0 | ||||
Net income (loss) attributable to Rick's shareholders | $ | 0.25 | $ | 0.28 | ||||
Diluted earnings per share: | ||||||||
Income (loss) from continuing operations attributable to Rick's shareholders | $ | 2,405 | $ | 2,661 | ||||
Adjustment. to net earnings from assumed conversion of debentures (2) | 21 | 65 | ||||||
Adjusted income (loss) from continuing operations | 2,426 | 2,726 | ||||||
Discontinued operations | -1 | -14 | ||||||
Adjusted net income (loss) attributable to Rick's shareholders | $ | 2,425 | $ | 2,712 | ||||
Average number of common shares outstanding: | ||||||||
Common shares outstanding | 9,546 | 9,575 | ||||||
Potential dilutive shares resulting from exercise of warrants and options (1) | 171 | 4 | ||||||
Potential dilutive shares resulting from conversion of debentures (2) | 138 | 254 | ||||||
Total average number of common shares outstanding used for dilution | 9,855 | 9,833 | ||||||
Diluted earnings (loss) per share: | ||||||||
Income (loss) from continuing operations attributable to Rick's shareholders | $ | 0.25 | $ | 0.28 | ||||
Discontinued operations | $ | 0 | $ | 0 | ||||
Net income (loss) attributable to Rick's shareholders | $ | 0.25 | $ | 0.28 | ||||
(1) All outstanding warrants and options were considered for the EPS computation. Potential dilutive options and warrants of 726,792 and 864,081 for the three months ended December 31, 2013 and 2012, respectively have been excluded from earnings per share due to being anti-dilutive. | ||||||||
(2) Convertible debentures (principal and accrued interest) outstanding at December 31, 2013 and 2012 totaling $11.9 million and $2.6 million, respectively, were convertible into common stock at a price of $10.00, $10.25 and $12.50 per share in 2013 and $10.00 and $10.25 per share in 2012. | ||||||||
*EPS may not foot due to rounding. | ||||||||
ACQUISITIONS_Tables
ACQUISITIONS (Tables) | 3 Months Ended | ||||
Dec. 31, 2013 | |||||
Foster Clubs [Member] | ' | ||||
Business Acquisition [Line Items] | ' | ||||
Business Acquisition Fair Values Assets and Liabilities [Table Text Block] | ' | ||||
The following information summarizes the allocation of fair values assigned to the assets at the purchase date. | |||||
Buildings and land | $ | 10,066 | |||
Goodwill | -431 | ||||
Net assets | $ | 9,635 | |||
Dallas Club [Member] | ' | ||||
Business Acquisition [Line Items] | ' | ||||
Business Acquisition Fair Values Assets and Liabilities [Table Text Block] | ' | ||||
The following information summarizes the allocation of fair values assigned to the assets at the purchase date. | |||||
Buildings | $ | 350 | |||
Equipment and land | 20 | ||||
SOB license | 265 | ||||
Minority interest | -135 | ||||
Net assets | $ | 500 | |||
INCOME_TAXES_Tables
INCOME TAXES (Tables) | 3 Months Ended | |||||||
Dec. 31, 2013 | ||||||||
Income Tax Disclosure [Abstract] | ' | |||||||
Schedule of Components of Income Tax Expense (Benefit) [Table Text Block] | ' | |||||||
Income tax expense on continuing operations for the periods presented differs from the “expected” federal income tax expense computed by applying the U.S. federal statutory rate of 34% to earnings before income taxes for the three months ended December 31, as a result of the following: | ||||||||
(in thousands) | 2013 | 2012 | ||||||
Computed expected tax expense | $ | 1,252 | $ | 1,461 | ||||
State income taxes | 53 | 36 | ||||||
Stock option disqualifying dispositions and other permanent differences | 18 | 87 | ||||||
Total income tax expense | $ | 1,323 | $ | 1,584 | ||||
LONGTERM_DEBT_Tables
LONG-TERM DEBT (Tables) | 3 Months Ended | ||
Dec. 31, 2013 | |||
Debt Instrument [Line Items] | ' | ||
Schedule Of Warrants Valuation Assumptions [Table Text Block] | ' | ||
The fair value of the warrants was estimated to be $105,318 in accordance with FASB ASC 820, Fair Value Measurements, using a Black-Scholes option-pricing model using the following weighted average assumptions: | |||
Volatility | 28.4 | % | |
Expected life | 1.5 years | ||
Expected dividend yield | - | ||
Risk free rate | 0.33 | % | |
SIGNIFICANT_ACCOUNTING_POLICIE3
SIGNIFICANT ACCOUNTING POLICIES (Details) (Tax Advantaged Bond Fund [Member], Fair Value, Inputs, Level 1 [Member], USD $) | 3 Months Ended |
In Thousands, unless otherwise specified | Dec. 31, 2013 |
Tax Advantaged Bond Fund [Member] | Fair Value, Inputs, Level 1 [Member] | ' |
Significant Accounting Policies [Line Items] | ' |
AvailableforSale, Cost Basis | $505 |
AvailableforSale, Gross Unrealized Gain | 50 |
AvailableforSale, Fair Value | $555 |
SIGNIFICANT_ACCOUNTING_POLICIE4
SIGNIFICANT ACCOUNTING POLICIES (Details 1) (Fair Value, Measurements, Recurring [Member], USD $) | Dec. 31, 2013 | Sep. 30, 2013 |
In Thousands, unless otherwise specified | ||
Significant Accounting Policies [Line Items] | ' | ' |
Marketable securities | $555 | $555 |
Fair Value, Inputs, Level 1 [Member] | ' | ' |
Significant Accounting Policies [Line Items] | ' | ' |
Marketable securities | 555 | 555 |
Fair Value, Inputs, Level 2 [Member] | ' | ' |
Significant Accounting Policies [Line Items] | ' | ' |
Marketable securities | 0 | 0 |
Fair Value, Inputs, Level 3 [Member] | ' | ' |
Significant Accounting Policies [Line Items] | ' | ' |
Marketable securities | $0 | $0 |
SIGNIFICANT_ACCOUNTING_POLICIE5
SIGNIFICANT ACCOUNTING POLICIES (Details Textual) (USD $) | 3 Months Ended |
Dec. 31, 2013 | |
Significant Accounting Policies [Line Items] | ' |
Discontinued Operation, Gain (Loss) on Disposal of Discontinued Operation, Net of Tax, Total | $2,300 |
STOCK_OPTIONS_AND_STOCKBASED_E2
STOCK OPTIONS AND STOCK-BASED EMPLOYEE COMPENSATION (Details) (USD $) | 3 Months Ended |
In Thousands, except Per Share data, unless otherwise specified | Dec. 31, 2013 |
Stock Options And Stock-Based Employee Compensation [Line Items] | ' |
Outstanding, Shares as of September 30, 2013 | 765 |
Granted, Shares | 0 |
Cancelled or expired, Shares | 0 |
Exercised, Shares | 0 |
Outstanding, Shares as of December 31, 2013 | 765 |
Options exercisable, Shares as of December 31, 2013 | 755 |
Outstanding, Weighted Average Exercise Price as of September 30, 2013 | $8.41 |
Granted, Weighted Average Exercise Price | $0 |
Cancelled or expired, Weighted Average Exercise Price | $0 |
Exercised, Weighted Average Exercise Price | $0 |
Outstanding, Weighted Average Exercise Price as of December 31, 2013 | $8.41 |
Options exercisable, Weighted Average Exercise Price as of December 31, 2013 | $8.41 |
Outstanding, Weighted Average Remaining Contractual Term (years) as of December 31, 2013 | '6 months 29 days |
Options exercisable, Weighted Average Remaining Contractual Term (years) as of December 31, 2013 | '6 months 25 days |
Outstanding, Aggregate Intrinsic Value as of December 31, 2013 | $2,424 |
Options exercisable, Aggregate Intrinsic Value as of December 31, 2013 | $2,116 |
STOCK_OPTIONS_AND_STOCKBASED_E3
STOCK OPTIONS AND STOCK-BASED EMPLOYEE COMPENSATION (Details Textual) (USD $) | 3 Months Ended | |
Dec. 31, 2013 | Dec. 31, 2012 | |
Stock Options And Stock-Based Employee Compensation [Line Items] | ' | ' |
Share-based Payment Award, Options, Grants in Period, Weighted Average Exercise Price, Percentage | 85.00% | ' |
Allocated Share-based Compensation Expense | $2,922 | $281,745 |
GOODWILL_AND_OTHER_INTANGIBLES2
GOODWILL AND OTHER INTANGIBLES (Details) (USD $) | 3 Months Ended | |
In Thousands, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 |
Goodwill And Intangible Assets [Line Items] | ' | ' |
Beginning balance, Licenses | $54,966 | $50,608 |
Intangibles acquired, Licenses | 265 | 0 |
Other, Licenses | 0 | 0 |
Ending balance, Licenses | 55,231 | 50,608 |
Beginning balance, Goodwill | 43,987 | 43,421 |
Intangibles acquired, Goodwill | 0 | 0 |
Other, Goodwill | 0 | -431 |
Ending balance, Goodwill | $43,987 | $42,990 |
COMMON_STOCK_Details_Textual
COMMON STOCK (Details Textual) (USD $) | 3 Months Ended |
Dec. 31, 2012 | |
Class of Stock [Line Items] | ' |
Treasury Stock, Shares, Acquired | 50,733 |
Treasury Stock, Value, Acquired, Cost Method | $405,459 |
EARNINGS_PER_SHARE_EPS_Details
EARNINGS PER SHARE (EPS) (Details) (USD $) | 3 Months Ended | |||
In Thousands, except Per Share data, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | ||
Basic earnings per share: | ' | ' | ||
Income from continuing operations attributable to Rick's shareholders | $2,405 | $2,661 | ||
Loss from discontinued operations, net of income taxes | -1 | -14 | ||
Net income attributable to Rick's shareholders | 2,404 | 2,647 | ||
Average number of common shares outstanding | 9,546 | 9,575 | ||
Basic earnings (loss) per share: | ' | ' | ||
Income from continuing operations (in dollars per share) | $0.25 | $0.28 | ||
Discontinued operations | $0 | $0 | ||
Net income (loss) attributable to Rick's shareholders | $0.25 | $0.28 | ||
Diluted earnings per share: | ' | ' | ||
Income (loss) from continuing operations attributable to Rick's shareholders | 2,405 | 2,661 | ||
Adjustment. to net earnings from assumed conversion of debentures | 21 | [1] | 65 | [1] |
Adjusted income (loss) from continuing operations | 2,426 | 2,726 | ||
Discontinued operations | -1 | -14 | ||
Adjusted net income (loss) attributable to Rick's shareholders | $2,425 | $2,712 | ||
Average number of common shares outstanding: | ' | ' | ||
Common shares outstanding | 9,546 | 9,575 | ||
Potential dilutive shares resulting from exercise of warrants and options | 171 | [2] | 4 | [2] |
Potential dilutive shares resulting from conversion of debentures | 138 | [1] | 254 | [1] |
Total average number of common shares outstanding used for dilution | 9,855 | 9,833 | ||
Diluted earnings (loss) per share: | ' | ' | ||
Income (loss) from continuing operations attributable to Rick's shareholders | $0.25 | $0.28 | ||
Discontinued operations | $0 | $0 | ||
Net income (loss) attributable to Rick's shareholders | $0.25 | $0.28 | ||
[1] | Convertible debentures (principal and accrued interest) outstanding at December 31, 2013 and 2012 totaling $11.9 million and $2.6 million, respectively, were convertible into common stock at a price of $10.00, $10.25 and $12.50 per share in 2013 and $10.00 and $10.25 per share in 2012. | |||
[2] | All outstanding warrants and options were considered for the EPS computation. Potential dilutive options and warrants of 726,792 and 864,081 for the three months ended December 31, 2013 and 2012, respectively have been excluded from earnings per share due to being anti-dilutive. |
EARNINGS_PER_SHARE_EPS_Details1
EARNINGS PER SHARE (EPS) (Details Textual) (USD $) | 3 Months Ended | |
In Millions, except Share data, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 |
Earnings Per Share [Line Items] | ' | ' |
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount | 726,792 | 864,081 |
Convertible Debt | $11.90 | $2.60 |
Maximum [Member] | ' | ' |
Earnings Per Share [Line Items] | ' | ' |
Debt Instrument, Convertible, Conversion Price | $12.50 | $10.25 |
Minimum [Member] | ' | ' |
Earnings Per Share [Line Items] | ' | ' |
Debt Instrument, Convertible, Conversion Price | $10 | $10 |
ACQUISITIONS_Details
ACQUISITIONS (Details) (Dallas Club [Member], USD $) | Dec. 31, 2013 |
In Thousands, unless otherwise specified | |
Dallas Club [Member] | ' |
Business Acquisition [Line Items] | ' |
Buildings | $350 |
Equipment and land | 20 |
SOB license | 265 |
Minority interest | -135 |
Net assets | $500 |
ACQUISITIONS_Details_1
ACQUISITIONS (Details 1) (Foster Clubs [Member], USD $) | Dec. 31, 2012 |
In Thousands, unless otherwise specified | |
Foster Clubs [Member] | ' |
Business Acquisition [Line Items] | ' |
Buildings and land | $10,066 |
Goodwill | -431 |
Net assets | $9,635 |
ACQUISITIONS_Details_Textual
ACQUISITIONS (Details Textual) (USD $) | Oct. 15, 2013 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2012 |
Thirty Three Street Club [Member] | Thirty Three Street Club [Member] | Fifty West Thirty Three Street [Member] | Fifty West Thirty Three Street [Member] | Dallas Club [Member] | Third Party [Member] | Jaguars [Member] | Jaguars [Member] | ||
New Amendments [Member] | New Amendments [Member] | Old Amendments [Member] | Thirty Three Street Club [Member] | Real Estate Agreement [Member] | |||||
Business Acquisition [Line Items] | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Ownership Percentage | ' | ' | ' | ' | ' | 49.00% | ' | ' | ' |
Business Acquisition, Purchase Price | ' | ' | ' | ' | ' | ' | $13,000,000 | ' | $10,100,000 |
Business Acquisition, Cost of Acquired Entity, Discounted Price | ' | ' | ' | ' | ' | ' | ' | ' | 9,600,000 |
Business Acquisition, Cash Paid | ' | ' | ' | ' | ' | ' | ' | ' | 350,000 |
Business Acquisitions, Purchase Price Allocation Notes Payable And Long Term Debt | ' | ' | ' | ' | ' | ' | ' | 4,200,000 | 9,100,000 |
Business Acquisition, Purchase Price Allocation One Time Payment In Twelve Years | ' | ' | ' | ' | ' | ' | ' | ' | 650,000 |
Debt Instrument, Interest Rate, Stated Percentage | 9.00% | ' | ' | ' | ' | ' | ' | ' | 9.50% |
Debt Instrument, Unamortized Discount | ' | ' | ' | ' | ' | ' | ' | ' | 431,252 |
Business Acquisition, Transaction Costs | ' | ' | ' | ' | ' | 500,000 | ' | ' | ' |
Business Acquisitions, Purchase Price Allocation Property Amount | ' | 10,000,000 | 23,000,000 | ' | ' | 350,000 | ' | ' | ' |
Business Acquisitions, Purchase Price Allocation Contribution Amount | ' | ' | ' | ' | ' | ' | 5,200,000 | ' | ' |
Business Acquisitions, Operating lease Rent Expenses Per Month | ' | ' | ' | $100,000 | $180,000 | ' | ' | ' | ' |
INCOME_TAXES_Details
INCOME TAXES (Details) (USD $) | 3 Months Ended | |
In Thousands, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 |
Income Taxes [Line Items] | ' | ' |
Computed expected tax expense | $1,252 | $1,461 |
State income taxes | 53 | 36 |
Stock option disqualifying dispositions and other permanent differences | 18 | 87 |
Total income tax expense | $1,323 | $1,584 |
INCOME_TAXES_Details_Textual
INCOME TAXES (Details Textual) (USD $) | 3 Months Ended |
In Millions, unless otherwise specified | Dec. 31, 2013 |
Income Taxes [Line Items] | ' |
Deferred Tax Liabilities, Net | $17.20 |
Effective Income Tax Rate Reconciliation, at Federal Statutory Income Tax Rate, Percent | 34.00% |
LONGTERM_DEBT_Details
LONG-TERM DEBT (Details) (Warrants Outstanding 105,318 [Member]) | 3 Months Ended |
Dec. 31, 2013 | |
Warrants Outstanding 105,318 [Member] | ' |
Debt Instrument [Line Items] | ' |
Volatility | 28.40% |
Expected life | '1 year 6 months |
Expected dividend yield | 0.00% |
Risk free rate | 0.33% |
LONGTERM_DEBT_Details_Textual
LONG-TERM DEBT (Details Textual) (USD $) | 0 Months Ended | 3 Months Ended | 1 Months Ended | ||
Oct. 15, 2013 | Dec. 31, 2013 | Dec. 31, 2013 | Oct. 31, 2013 | Oct. 15, 2013 | |
Aircraft [Member] | Individual Counterparty [Member] | Adviser [Member] | |||
Debt Instrument [Line Items] | ' | ' | ' | ' | ' |
Debt Instrument, Face Amount | $4,525,000 | ' | ' | ' | ' |
Debt Instrument, Interest Rate, Stated Percentage | 9.00% | ' | 7.45% | 13.00% | ' |
Debt Instrument, Payment Terms | 'Each of the Debentures has a term of three years, is convertible into shares of our common stock at a conversion price of $12.50 per share (subject to adjustment), and has an annual interest rate of 9%, with one initial payment of interest only due April 15, 2014. Thereafter, the principal amount is payable in 10 equal quarterly principal payments, which amounts to a total of $452,500, plus accrued and unpaid interest. Six months after the issue date of the Debentures, we have the right to redeem the Debentures if the Companys common stock has a closing price of $16.25 (subject to adjustment) for 20 consecutive trading days. The Warrants have an exercise price of $12.50 per share (subject to adjustment) and expire on October 15, 2016 | ' | ' | ' | ' |
Proceeds from Issuance of Unsecured Debt | ' | ' | ' | 2,500,000 | ' |
Debt Instrument, Periodic Payment | ' | ' | 40,654 | ' | ' |
Loan Origination Cost | ' | ' | ' | ' | 271,500 |
Debt Instrument, Maturity Date, Description | ' | ' | ' | '36 months | ' |
Class Of Warrant Or Right Fair Value | ' | 105,318 | ' | ' | ' |
Class of Warrant or Right, Number of Securities Called by Warrants or Rights | 72,400 | ' | ' | ' | ' |
Investment Warrants, Exercise Price | $12.50 | ' | ' | ' | ' |
Proceeds from Convertible Debt | 4,525,000 | ' | ' | ' | ' |
Closing Price Of Common Stock | $16.25 | ' | ' | ' | ' |
Repayments of Debt | 452,500 | ' | ' | ' | ' |
Property, Plant and Equipment, Additions | ' | ' | 4,300,000 | ' | ' |
Proceeds from Bank Debt | ' | ' | $3,600,000 | ' | ' |
Debt Instrument, Frequency of Periodic Payment | ' | ' | 'monthly | 'monthly | ' |
COMMITMENTS_AND_CONTINGENCIES_
COMMITMENTS AND CONTINGENCIES (Details Textual) (USD $) | 3 Months Ended | 15 Months Ended | ||
Dec. 31, 2013 | Dec. 31, 2012 | Mar. 31, 2009 | Jan. 01, 2008 | |
Commitments And Contingencies [Line Items] | ' | ' | ' | ' |
Club Surcharges | ' | ' | ' | $5 |
Patron Tax Paid in Excess | ' | ' | $2,000,000 | ' |
Contingent Liability for Live Entertainment Tax | 2,100,000 | ' | ' | ' |
Accrued Liabilities | 13,800,000 | ' | ' | ' |
Patron Tax Expense | $738,000 | $891,000 | ' | ' |