Rick's Cabaret International, Inc. Reports Record Quarterly Revenues Exceeding $7.5 Million For Period Ending March 31st

HOUSTON-(May 14, 2007)-Rick's Cabaret International, Inc. [NASDAQ:RICK] operator of upscale gentlemen's clubs, said today it had total revenues of $7,569,589 for its second quarter ending March 31st, the highest quarterly revenue in the company's history

"We are pleased with the overall growth in our club structure," said Eric Langan, President and CEO of the company. "With the new club in Ft. Worth also beginning to contribute we are on track to meet our targets for fiscal 2007." Rick's Cabaret now operates 14 adult nightclubs in four states.

The company generated cash of $1,303,374 from operating activities during the quarter compared with $1,021,885 in the previous year. Cash on hand at the end of the quarter was $6,510,683 compared with $1,473,186 last year, primarily attributable to proceeds from the sale of common stock in two private placements, some of which was subsequently used for the acquisition of the Ft. Worth club.

Net income for the period was $492,344 compared with $706,070, a decrease primarily due to costs associated with opening new clubs in San Antonio and Austin such as marketing, advertising, legal and professional, permitting and other expenses. Net income for same-club-same-period operations increased 22.3 percent to $1,599,288 million from $1,307,495 million, even though the company had benefited from extraordinary revenues and earnings associated with the NBA All Star Week in Houston during the second period last year. The company earned nine cents basic per share, compared with 16 cents in the second quarter last year.

Second quarter revenues were up 23.7 percent from last year's consolidated total of $6,119,516, a result of an increase of nearly 10.4 percent in same-club-same-period revenues during the period over the previous year and the opening of new clubs in San Antonio and Austin. The company's previous quarterly income record was $7 million set in the first quarter of this fiscal year.

Cost of goods sold for the second quarter was 12.7 percent of total revenues compared to 12.2 percent in the previous year, primarily due to the addition of clubs that have higher costs and the cost of maintaining internet operations. Likewise, payroll and related costs were up during the period due to the addition of new clubs.

Revenue for the company's Internet operations were down during the period nearly 12.9 percent to $177,503, and net income from Internet operations was $5,962 compared with $30,447 a year ago.

About Latin Entertainment SRLt
Latin Entertainment Srl is a Buenos Aires based corporation with founders and partners from Mexico, Argentina and California in the U.S. The company has offices in Buenos Aires and Mexico City. Its operating subsidiary, Rick's Buenos Aires S.A., is a management entity that will operate the first Rick's Cabaret in Argentina. Roberto Estrada, President and COO, has more than 35 years of experience in the restaurant and entertainment fields.

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.

RICK'S CABARET INTERNATIONAL, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS

 

FOR THE THREE MONTHS

ENDED MARCH 31

FOR THE SIX MONTHS ENDED MARCH 31,

         
 

2007

2006

2007

2006

 

(UNAUDITED)

(UNAUDITED)

         

Revenues:

       

Sales of alcoholic beverages

$ 2,812,406

$ 2,215,489

$ 5,407,004

$ 4,385,484

Sales of food and merchandise

768,628

677,275

1,432,715

1,315,999

Service revenues

3.538,017

2,841,119

6,889,815

5,435,920

Internet revenues

177,502

203,751

365,481

412,909

Other

273,036

181,882

504,332

348,941

Total revenues

7,569,589

6,119,516

14,599,347

11,899,253

         

Operating expenses:

       

Cost of goods sold

962,469

745,295

1,853,636

1,454,533

Salaries and wages

2,156,054

1,678,813

4,227,192

3,348,524

Stock compensation

65,356

---

130,712

---

Other general and administrative:

       

Taxes and permits

981,327

779,450

1,854,272

1,474,765

Charge card fees

137,505

104,074

281,507

206,310

Rent

396,040

296,732

749,272

593,578

Legal and professional

248,418

185,288

487,276

335,946

Advertising and marketing

325,027

315,882

683,797

606,550

Insurance

180,812

101,799

309,265

168,374

Utilities

204,083

150,579

370,501

279,707

Depreciation and amortization

386,427

235,787

751,027

468,269

Other

798,908

562,336

1,587,170

1,215,046

Total operating expenses

6,842,426

5,156,035

13,285,627

10,151,602

Income from operations

727,163

963,481

1,313,720

1,747,651

         

Other income (expense):

       

Interest income

2,420

8,950

13,054

15,386

Interest expense

(328,454)

(271,469)

(654,017)

(534,521)

Minority interests

91,215

(2,731)

172,207

(1,344)

Other

---

7,839

---

4,354

Net income

$ 492,344

$ 706,070

$ 844,964

$ 1,231,526

         

Basic and diluted earnings per share:

       

Net income, basic

$ .09

$ 0.16

$ 0.16

$ 0.28

Net income, diluted

$ .08

$ 0.14

$ 0.15

$ 0.26

Weighted average number of common shares outstanding:

       

Basic

5,528,888

4,408,237

5,335,189

4,364,649

Diluted

5,810,728

5,347,386

5,621,876

4,973,583


Comprehensive income for the three months ended March 31, 2007 and 2006 were $505,691 and $728,315, and for the six months were $842,739 and $1,253,771, respectively. This includes the changes in available-for-sale securities and net income.

Contact for further information: Allan Priaulx, 212-338-0050, ir@ricks.com