VCG Holding Corp. Announces Letter of Intent to Acquire Three Upscale Gentleman's Clubs in the Southern United States
June 19 2007 - 8:00AM
Business Wire
VCG Holding Corp. (AMEX: PTT), a nationwide owner/operator of adult
nightclubs, announced today that it has entered into a letter of
intent to purchase the assets of three major adult nightclubs. The
nightclubs operate in the Southwestern and Southeastern part of the
United States. In 2006, they generated revenues of $15.5 million.
The nightclubs should add pre-tax pro-forma profits of $2.5
million. We have not completed the due diligence and have not been
able to completely analyze the full effect on our after-tax
earnings and the allocation of the purchase price between the clubs
and intangibles. The purchase price is $13.5 million. The payment
for the purchase includes a combination of cash and common stock.
The CEO of these companies will join VCG in a senior management
capacity. The stock issued in the transaction will be subject to a
lock-up agreement. �This acquisition is extremely important to VCG
for the following reasons,� stated Troy Lowrie, CEO and Chairman of
VCG. �First, it enables us to own three more clubs that are the
leaders in their markets. Secondly, it strengthens our management
team. Thus, this acquisition represents much more than three great
clubs,� Lowrie stated. �It represents a major piece in our goal of
reaching the critical mass needed to develop a national brand of
upscale gentlemen�s clubs. With the completion of the purchases of
Raleigh and Minneapolis, the clubs announced last week, and these
three clubs we will have a total of 19 nightclubs and one upscale
dance club.� �Based on the projected completion dates and the
preliminary analysis of the numbers,� Lowrie continued, �the three
clubs should add $0.03 to quarter 3 EPS and $0.04 to quarter 4 EPS.
They should enable us to exceed our previously stated guidance for
2008.� The name and locations of the venues, the allocation of
price, and its seller are being kept confidential as part of the
agreement until the completion of the transaction and the final
definitive agreement. The acquisitions are expected to be purchased
in July and August 2007. The purchase is contingent upon transfer
of all applicable permits and licenses as well as a thorough due
diligence by the company and its Board of Directors. About VCG
Holding Corp. VCG Holding Corp. is an owner, operator and
consolidator of adult nightclubs throughout the United States. The
Company currently owns 14 adult nightclubs and one upscale dance
lounge. The night clubs are located in Indianapolis, St. Louis,
Denver, Colorado Springs, Raleigh, Minneapolis, and Louisville.
Forward-Looking Statements Statements contained in this press
release concerning future results, performance or expectations are
forward-looking statements within the meaning of Section 27A of the
Securities Act of 1933, as amended, and Section 21E of the
Securities Exchange Act of 1934, as amended. These statements
include statements regarding the intent, belief or current
expectations of the Company and members of its management team, as
well as assumptions on which such statements are based. All
forward-looking statements in this press release are based upon
information available to the Company on the date of this press
release. Forward-looking statements involve a number of risks and
uncertainties, and other factors, that could cause actual results,
performance or developments to differ materially from those
expressed or implied by those forward-looking statements including
the following: failure of facts to conform to necessary management
estimates and assumptions; the Company�s ability to identify and
secure suitable locations for new nightclubs on acceptable terms,
open the anticipated number of new nightclubs on time and within
budget, achieve anticipated rates of same-store sales, hire and
train additional nightclub personnel and integrate new nightclubs
into its operations; the continued implementation of the Company�s
business discipline over a large nightclub base; unexpected
increases in cost of sales or employee, pre-opening or other
expenses; the economic conditions in the new markets into which the
Company expands and possible uncertainties in the customer base in
these areas; fluctuations in quarterly operating results;
seasonality; changes in customer spending patterns; the impact of
any negative publicity or public attitudes; competitive pressures
from other national and regional nightclub chains; business
conditions, such as inflation or a recession, or other negative
effect on nightclub patterns, or some other negative effect on the
economy, in general, including (without limitation) growth in the
nightclub industry and the general economy; changes in monetary and
fiscal policies, laws and regulations; war, insurrection and/or
terrorist attacks on United States soil; and other risks identified
from time to time in the Company�s SEC reports, including the
Annual Report on Form 10-KSB for 2006, Quarterly Reports on Form
10-QSB and Current Reports on Form 8-K, registration statements,
press releases and other communications. The Company undertakes no
obligation to update or revise forward-looking statements to
reflect changed assumptions, the occurrence of unanticipated events
or changes to future operating results over time.
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