Rick's Cabaret International, Inc. Net Income For First Quarter 2008 Rises 405 Percent On Strong Revenue Increase; EPS Increases To 26 Cents


HOUSTON-(February 12, 2008)- Rick's Cabaret International, Inc. [NASDAQ:RICK], the premier publicly traded gentlemen's club operator, today reported net income of $1,783,272 for its first quarter ending December 31, 2007, a 405 percent increase over the $352,954 reported in the previous year. Earnings were 26 cents per basic share, compared with seven cents in the same quarter a year ago.

The company reported revenues for the quarter of $10,954,338, a 56 percent increase over the $7,030,129 reported in the first quarter of fiscal 2007, primarily attributable to increased sales of $3,034,106 at new clubs in Miami Gardens, Florida and Fort Worth, Texas, and increases of $907,292 at the New York City club and other locations.

Other highlights of the company's form 10 QSB filed with the SEC:

* Cash of $ 2,258,329 was provided by operating activities, compared with $711,820 in the same quarter a year ago, bringing cash at the end of the period to $5,033,300, compared with $1,462,535 a year ago.
* Total same club revenues increased to $7,541,210 for the three months ended December 31, 2007 from $6,670,991 for same period in 2006, a 13 percent rise.
* The cost of goods sold during the first quarter dropped to 12.25 percent of total revenues compared to 12.68 percent for the same quarter a year ago, due primarily to the decrease in cost of goods sold at our existing clubs.
* Apart from the benefit from the new clubs in Texas and Florida, income before income taxes, exclusive of corporate overhead, for same-location-same-period club operations increased to $2,164,923 from $1,172,574 for same period, or by 84.63 percent.

"The results of our first quarter demonstrate that our acquisition strategy is working exactly as planned, immediately adding both revenue and income," said Eric Langan, President and CEO of Rick's Cabaret. "In addition our organic growth is also strong and we plan to continue to pursue both the acquisition and organic growth strategies in the future."


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

 

FOR THE THREE MONTHS

ENDED DECEMBER 31,

       
 

2007

 

2006

 

(UNAUDITED)

       

Revenues:

     

Sales of alcoholic beverages

$ 4,195,192

 

$ 2,594,598

Sales of food and merchandise

1,060,332

 

664,088

Service revenues

5,023,497

 

3,351,798

Internet revenues

170,789

 

187,978

Other

504,528

 

231,667

Total revenues

10,954,338

 

7,030,129

       

Operating expenses:

     

Cost of goods sold

1,341,831

 

891,168

Salaries and wages

2,586,476

 

2,071,137

Stock compensation

39,270

 

65,356

Other general and administrative:

     

Taxes and permits

1,235,793

 

872,946

Charge card fees

198,710

 

144,002

Rent

464,455

 

353,232

Legal and professional

293,373

 

238,858

Advertising and marketing

360,832

 

358,769

Insurance

201,396

 

128,453

Utilities

209,735

 

166,419

Depreciation and amortization

511,339

 

364,601

Other

939,231

 

788,298

Total operating expenses

8,382,441

 

6,443,239

Income from operations

2,571,897

 

586,890

       

Other income (expense):

     

Interest income

43,069

 

10,634

Interest expense

(461,883)

 

(325,563)

Minority interests

177,911

 

80,993

Other

-

 

-

Income before income taxes

2,330,994

 

352,954

Income taxes

547,722

 

-

Net income

$ 1,783,272

 

$ 352,954

Basic and diluted earnings per share:

     

Net income, basic

$ 0.26

 

$ 0.07

Net income, diluted

$ 0.24

 

$ 0.06

Weighted average number of common shares outstanding:

     

Basic

6,806,234

 

5,141,489

Diluted

7,709,970

 

5,538,535

Comprehensive income for the three months ended December 31, 2007 and 2006 was $1,767,700 and $337,382, 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; 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; unexpected increases in costs 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; the impact of any negative publicity or public attitudes; competitive pressure from other national and regional nightclub chains; 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 for further information: Allan Priaulx, 212-338-0050, ir@ricks.com