DENVER, Nov. 20, 2008 (GLOBE NEWSWIRE) -- VCG Holding Corp. (Nasdaq:VCGH), a growing and leading consolidator and operator of adult nightclubs, today provided investors with the following update.
Troy Lowrie, Chairman and Chief Executive Officer, stated, "We remain optimistic about the long-term strength of our business and industry. We were pleased with our results for the third quarter of 2008, and are also encouraged by the performance of our clubs through the first six weeks of the 2008 fourth quarter. We continue to institute best practices and introduce new, profitable revenue streams at our 20 existing clubs. We realized some benefit from these activities during the first nine months of 2008, but expect a more substantial impact in future quarters as these programs are implemented company-wide. We believe that one of VCG Holding's most attractive financial metrics is the ability to generate free cash flow. Free cash flow for the 2008 third quarter was $2.4 million and $5.7 million for the nine months ended September 30, 2008. Our ability to generate this free cash provides us with financial security, and positions us to pursue a variety of accretive growth opportunities in 2009, including:
* Debt Reduction: At September 30, 2008, we had total debt of approximately $38 million, a portion of which carries a blended interest rate of approximately 11%. We believe that we can reduce this high interest debt during 2009 using free cash, thus reducing the associated interest obligations, improving earnings, and strengthening our balance sheet. * Share Repurchase: At current levels, we believe that VCG Holding's common stock is undervalued and represents a compelling investment opportunity. As previously announced, for the period October 1 - October 23, 2008, VCG Holding repurchased 225,045 shares of its common stock at an aggregate cost of $588,012. For the period November 1 - November 20, 2008, the Company repurchased an additional 49,000 shares of its common stock at an aggregate cost of $92,970. These repurchases were executed under a $1.0 million share repurchase plan that was authorized by our Board of Directors in September 2008. * Acquisitions: We will continue to review, on a very selective basis, strategic acquisitions in new and existing markets. Our criteria will remain stringent. We believe we are well-positioned to consolidate this highly fragmented industry. Any acquisition must be immediately accretive, enhance the stability and visibility of our cash flows, and strengthen our management team.
Mr. Lowrie concluded, "Although we cannot predict how the general economy will fare next year, or how any prolonged economic weakness may affect our business, we believe that a prudent, thoughtful approach to managing the operational and financial aspects of VCG Holding will help see us through this period of unprecedented uncertainty. We believe that the successful execution of the above-referenced strategies, either exclusively or in combination, a distinctive operating model, and a focus on enhancing our existing operations will position us to deliver favorable long-term returns to shareholders."
ABOUT VCG HOLDING CORP.
VCG Holding Corp. is an owner, operator, and consolidator of adult nightclubs throughout the United States. The Company currently owns 20 adult nightclubs. The night clubs are located in Anaheim, Indianapolis, St. Louis, Denver, Colorado Springs, Ft. Worth, Dallas, Raleigh, Minneapolis, Louisville, Miami, and Portland, ME.
The VCG Holding Corp. logo is available at http://www.globenewswire.com/newsroom/prs/?pkgid=5105
FORWARD LOOKING STATEMENT
Certain statements in this release are forward-looking statements within the meaning of the Securities Litigation Reform Act of 1995. Such statements are based on current expectations, estimates and projections about the Company's business based, in part, on assumptions made by management. These statements are not guarantees of future performance and involve risks and uncertainties that are difficult to predict. Therefore, actual outcomes and results may differ materially from what is expressed or forecasted in such forward-looking statements due to numerous factors identified from time to time in the Company's reports with the Securities and Exchange Commission, including our Annual Report on Form 10-KSB for the year ended December 31, 2007 and Form 10-Q for the three months ended September 30, 2008. All forward-looking statements attributable to us or any persons acting on our behalf are expressly qualified in their entirety by these cautionary statements. All guidance and forward-looking statements in this press release are made as of the date hereof and we do not undertake any obligation to update any forecast or forward-looking statements, except as may be required by law.