I definately wouldn't be "board" at this meeting!
Rick's holds annual meeting like no other
MARK BABINECK
Associated Press
HOUSTON - The coffee and juice, printed agendas and rigid formality Friday had the look of just about any small company's annual meeting.
The erotic artwork, two pole-dancing stages and the cigarette machine showed this was no ordinary shareholders' summit.
This was the meeting for Rick's Cabaret International Inc., the only publicly traded purveyor of topless bars on a major stock exchange, Nasdaq. The company owns 11 clubs in Houston, Austin, San Antonio and Minneapolis.
While the atmosphere at Rick's Cabaret was different, the talk wasn't. Even for a company basically built on bare breasts, the stock price is still the thing.
"I think it's probably as stable a stock as any," said shareholder Bill Friederichs, who along with his wife were among 17 people at the meeting, including Rick's executives.
The club wasn't open yet, although dancers and waitresses were arriving and the lunch buffet was being prepared. The formal portion of the meeting ran less than 10 minutes, followed by a brief questions-and-answers period.
One shareholder questioned president and chief executive officer Eric Langan's decision to transform the flagship Rick's Cabaret in Houston - where Anna Nicole Smith met her octogenarian future husband, billionaire J. Howard Marshall II - into a topless bar called Club Onyx that's aimed at a black audience.
The heyday of the original Rick's had passed, Langan said, so he decided to do something bold.
"Why compete in a market where we're not superior?" Langan said. "In a new market, we're number one. An upscale urban gentleman's club of that caliber does not exist anywhere else in the country."
The novelty of a publicly traded topless club first reached Wall Street in 1995 when former owner Robert Watters hit the Nasdaq. By mid-1996 the share price nearly reached $12 before cratering two years later when a major institutional holder dumped its holdings.
Just before the fall, Rick's bought Taurus Entertainment, another topless bar holding company owned by Langan and a partner.
"The stock was trading at 25 to 30 cents by late '98," Langan said. "There were two people buying: myself and my ex-partner."
Soon, the Langan contingent owned nearly as much stock as Watters and the two sides clashed on the company's direction. Langan wanted to expand, he said, while Watters wanted to scale back.
They agreed on a compromise: Watters took private ownership of the company's Bourbon Street location in New Orleans and kept the Rick's name there, while Langan took over the corporation, which owns the other clubs and adult-themed Internet sites.
Watters still remains on the board of directors, though he was not present Friday.
Rick's barely stayed on the Nasdaq after a reverse stock split in 1999. After cutting costs and ditching unprofitable businesses, the company slowly rebounded and has traded around $2 a share since 2000. The price has risen steadily since early 2003.
When the fiscal year ends at the end of September, Langan said revenues should be approaching $16 million, although he said that figure will need to double before mutual funds would even consider buying in.
That's why, now that Rick's finances are stable again, Langan is eyeing expansion to other cities.
"We probably wouldn't look at the Las Vegas market right now," he said. "It's unbelievable. They're building $28 million clubs out there."
The club began opening as the meeting wrapped up.
The buffet was going, the music was thumping and scantily clad women were roaming the tables waiting for the daily crush to arrive.
Again, the mirrored walls and dimmed lighting didn't seem to be out of place.



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