SOURCE: Rick's Cabaret International, Inc.

February 13, 2007 16:05 ET

Rick's Cabaret International, Inc. Reports $7 Million Revenue for First Quarter With 7 Cents Earnings per Share

HOUSTON, TX -- (MARKET WIRE) -- February 13, 2007 -- Rick's Cabaret International, Inc. (NASDAQ: RICK), national operator of gentlemen's clubs, said today it had consolidated revenues of $7 million in its first quarter ending Dec. 31, 2006, a 21.6 percent increase over the previous year total of $5.8 million.

Net income was lower than the prior year due to costs associated with re-launching clubs in Charlotte and Houston and opening two new nightclubs in San Antonio and Austin. Re-launching and pre-opening costs are estimated to have been in excess of $400,000.

The company earned 7 cents per basic share during the quarter, compared with 12 cents in the same quarter in the previous year, on net income of $352,954 compared with $525,396.

Eric Langan, President and CEO of Rick's Cabaret, said: "I am very pleased with the operations of our existing clubs. In our New York club, revenues increased 63 percent versus the same quarter in 2005, and operating profit increased 1,250 percent in the same period. We had extraordinary costs associated with the acquisition of controlling interest in a new club in Austin and continued start-up costs in San Antonio. In addition, we temporarily closed two clubs in Charlotte and Houston for several weeks in order to re-launch them in our Club Onyx format. We are now seeing the benefit of all of these moves."

The increase in total revenues was primarily generated by a 9.72 percent increase from existing clubs as well as revenues from our new clubs.

During the first quarter, net cash provided by operating activities was $711,820, compared with $427,548 in the prior year.

Mr. Langan will discuss the first quarter results and the company's outlook today in a conference call for investors at 4:30 p.m. ET that will be available through both the Rick's Cabaret website, www.ricks.com, and through VCall at http://www.vcall.com/IC/CEPage.asp?ID=113571. Those wishing to call in by telephone from the U.S. should dial 877-407-8031; international callers should dial 201-689-8031. Telephone replay information is available at www.ricks.com. The replay of the webcast will be available until May 13, 2007.

            RICK'S CABARET INTERNATIONAL, INC. AND SUBSIDIARIES
                  CONSOLIDATED STATEMENTS OF OPERATIONS



                                              FOR THE THREE MONTHS
                                                ENDED DECEMBER 31,
                                            ------------------------
                                                   2006         2005
                                             (UNAUDITED)  (UNAUDITED)
Revenues:
  Sales of alcoholic beverages              $ 2,594,598  $ 2,169,995
  Sales of food and merchandise                 664,088      638,724
  Service revenues                            3,351,798    2,594,801
  Internet revenues                             187,978      209,157
  Other                                         231,667      167,058
                                            -----------  -----------
   Total revenues                             7,030,129    5,779,735

Operating expenses:
  Cost of goods sold                            891,168      709,237
  Salaries and wages                          2,071,137    1,669,711
  Stock compensation                             65,356           --
  Other general and administrative:
   Taxes and permits                            872,946      695,316
   Charge card fees                             144,002      102,236
   Rent                                         353,232      296,846
   Legal and professional                       238,858      150,657
   Advertising and marketing                    358,769      290,668
   Insurance                                    128,453       66,576
   Utilities                                    166,419      129,127
   Depreciation and amortization                364,601      232,482
   Other                                        788,298      652,769
                                            -----------  -----------
   Total operating expenses                   6,443,239    4,995,625
                                            -----------  -----------
Income from operations                          586,890      784,110

Other income (expense):
  Interest income                                10,634        6,436
  Interest expense                             (325,563)    (263,052)
  Minority interests                             80,993        1,387
  Other                                              --       (3,485)
                                            -----------  -----------
   Net income                               $   352,954  $   525,396
                                            ===========  ===========

Basic and diluted earnings per share:
 Net income, basic                          $      0.07  $      0.12
                                            ===========  ===========
 Net income, diluted                        $      0.07  $      0.11
                                            ===========  ===========
Weighted average number of common shares
 outstanding:
   Basic                                      5,141,489    4,321,061
                                            ===========  ===========
   Diluted                                    5,433,024    4,599,779
                                            ===========  ===========


Comprehensive income for the three months ended December 31, 2006 and 2005
was $337,382 and $525,396, respectively.  This includes the changes in
available-for-sale securities and net income.


About Rick's Cabaret

Rick's Cabaret International, Inc. (NASDAQ: RICK) operates upscale adult nightclubs serving primarily businessmen and professionals that offer live adult entertainment, restaurant and bar operations. The company owns and operates or licenses adult nightclubs in New York City, New Orleans, Charlotte, Houston, Minneapolis and other cities under the names "Rick's Cabaret," "XTC" and "Club Onyx." No sexual contact is permitted at any of these locations. Rick's Cabaret also owns the adult Internet membership Web site, couplestouch.com, and a network of online adult auction sites under the flagship URL naughtybids.com. Rick's Cabaret common stock is traded on NASDAQ under the symbol RICK. For further information contact ir@ricks.com.

Forward-looking Statements:

This document contains forward-looking statements that involve a number of risks and uncertainties that could cause the company's actual results to differ materially from those indicated in this document, including the risks and uncertainties associated with operating and managing an adult business, the business climates in New York City and elsewhere, the success or lack thereof in launching and building the company's businesses in New York City and elsewhere, risks and uncertainties related to the operational and financial results of our Web sites, conditions relevant to real estate transactions, and numerous other factors such as laws governing the operation of adult entertainment businesses, competition and dependence on key personnel. Rick's has no obligation to update or revise the forward-looking statements to reflect the occurrence of future events or circumstances. For further information go to www.ricks.com.

Contact Information