VCG Holding Corp Announces Letter of Intent to Acquire Two Upscale Gentleman's Clubs in the Southeast and Northeast
June 11 2007 - 3:18PM
Business Wire
VCG Holding Corp. (AMEX: PTT), nationwide owner/operator of adult
nightclubs, announced today that it has entered into a letter of
intent to purchase the assets of two major adult nightclubs. The
first nightclub is the top venue in a Northeastern city. In 2006,
it generated revenues of $4 million and after-tax profits of
$850,000. The purchase price is $4.5 million, which is 5.28 times
after-tax earnings. The second club is a major venue in a
Southeastern city. In 2006, it generated revenues of $5.1 million
and profits of $1.3 million. The purchase price is $6.875 million,
which is 5.28 times after-tax earnings. The name and locations of
the fully licensed venues and its seller are being kept
confidential as part of the agreement until closing the transaction
and the competition of the final definitive agreement. The
Northeastern location is expected to close in July. The
Southeastern location is expected to close in early September. 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. Based on the projected closing dates, the two
clubs should add $0.02 to quarter 3 EPS and $0.03 to quarter 4 EPS.
�This acquisition is not only highly accretive, but allows us to
add a multi-club acquisition to our portfolio,� stated Troy Lowrie,
CEO and Chairman of VCG. �The proceeds of the February private
placement, current cash flow, and lines of credit from our lead
bank will fund the two acquisitions. With the closing of Raleigh
and Minneapolis, we will now have made four new acquisitions in the
second and third quarters, bringing our total to 16 nightclubs and
1 upscale dance club.� �These acquisitions,� Lowrie continued,
�should enable the company to meet or exceed the company�s earnings
guidance for 2007 and 2008 provided on April 2.� About VCG Holding
Corp. VCG Holding Corp. is an owner, operator and consolidator of
adult nightclubs throughout the United States. The Company
currently owns fourteen 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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