Rick's Cabaret International, Inc. Reports Third Quarter Results And Provides New Guidance For Investors


HOUSTON - (August 14, 2008) - Rick's Cabaret International, Inc. [NASDAQ-GM:RICK] the premier operator of upscale gentlemen's clubs, today reported record revenues for its third quarter ended June 30, 2008 of $16.28 million with net income of $1.83 million, compared with $8.45 million and $1.03 million, respectively, for the same period last year. Earnings per diluted share for the quarter were 21 cents, compared with 16 cents in 2007.

"While we had a great same store sales performance with an 8.4 per cent increase over last year, our income would have been much more impressive had we not been impacted by approximately $775,000 in start up and other costs related to three items -- the expense of opening clubs in Dallas and Philadelphia, our inability to recapture about $125,000 for the so-called 'Pole Tax' imposed by the state of Texas pending an appeal by the state of a judge's ruling that the tax is unconstitutional, and by revenue timing issues in our media division that resulted in a loss for this unit," said Phil Marshall, CFO of Rick's Cabaret.

"During our third quarter we booked revenue from only one edition of Exotic Dancer Magazine, and will not book revenue from the Gentlemen's Club Expo that takes place in Las Vegas this month until our fourth quarter," Mr. Marshall noted. He added that the Company's earnings per share were also affected by the issuance of 672,000 shares in June.

Eric Langan, President and CEO, said: "Both our internal growth and expansion by acquisition programs continue on course and we are looking forward to a strong performance at Rick's Cabaret Minneapolis in our fourth quarter, which should benefit from the Republican National Convention in early September." He noted that the company's cash position increased to approximately $13 million at the end of the quarter due to strong cash flow and a recent capital raise.

Mr. Langan will comment on the third quarter results and provide new guidance for the balance of the year in a conference call scheduled for today at 4:30 p.m. EDT. The call is being webcast by Vcall (click here) and can be accessed at the Rick's Cabaret website, www.ricks.com or www.InvestorCalendar.com. Toll free live participant dial-in number is 877-407-8033, and international callers are invited to dial 201-689-8033. A toll free replay number 877-660-6853 will be available until August 21 (international callers dial 201-612-7415).

During the conference call Mr. Langan plans to advise investors that fiscal 2008 revenues will be about $60 million and earnings per share will be about $1.02 based on anticipated earnings of about $2.4 million in the fourth quarter. These figures do not include any revenue from the pending Scores-Las Vegas transaction. He further said the Company's 2009 outlook will be revised to reflect earnings per share of $2.00 to $2.20 based on revenues exceeding $100 million.

Among the other highlights of the quarterly report, the company said cash provided by operating activities for the nine months ended June 30, 2008 was over $9.73 million, compared with $2.65 million for the same period in 2007.

Revenues for the company for the nine months ended June 30, 2008 were $42.70 million, compared with $23.05 million for the same period in 2007 while net income for the first nine months was $6.22 million compared with $1.88 million last year, and earnings per diluted share for the first nine months total 77 cents compared with 32 cents last year.

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, operates or licenses adult nightclubs in New York City, Miami, Philadelphia, New Orleans, Charlotte, Dallas, Houston, Minneapolis and other cities under the names "Rick's Cabaret," "XTC," “Club Onyx” and “Tootsie’s Cabaret”. Sexual contact is not permitted at these locations. Rick’s Cabaret also operates a media division, ED Publications, and owns the adult Internet membership Web site,
couplestouch.com as well as 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 cities where it operates, the success or lack thereof in launching and building the company’s businesses, 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 visit
www.ricks.com.

Media Contact: Allan Priaulx, 212-338-0050, ir@ricks.com

RICK'S CABARET INTERNATIONAL, INC. AND SUBSIDIARIES


CONSOLIDATED STATEMENTS OF OPERATIONS



FOR THE THREE MONTHS

ENDED JUNE 30,

FOR THE NINE MONTHS

ENDED JUNE 30,

2008

2007

2008

2007

(UNAUDITED)

(UNAUDITED)

Revenues:

Sales of alcoholic beverages

$ 6,085,023

$ 3,254,244

$ 15,983,149

$ 8,661,248

Sales of food and merchandise

1,362,122

869,853

3,748,039

2,302,568

Service revenues

7,836,900

3,864,108

20,608,912

10,753,923

Internet revenues

194,105

191,553

537,606

557,033

Other

800,311

266,593

1,819,354

770,925

Total revenues

16,278,461

8,446,351

42,697,060

23,045,697

Operating expenses:

Cost of goods sold

1,901,284

1,077,984

4,876,340

2,931,620

Salaries and wages

3,856,733

2,238,630

9,740,367

6,465,822

Stock compensation

39,270

48,134

117,810

178,846

Other general and administrative:

Taxes and permits

2,049,438

1,088,917

5,304,096

2,943,189

Charge card fees

294,844

157,932

748,815

439,440

Rent

613,910

388,702

1,697,042

1,137,974

Legal and professional

463,954

279,339

1,107,190

766,615

Advertising and marketing

665,221

297,494

1,589,662

981,290

Insurance

164,070

192,225

532,400

501,490

Utilities

370,068

189,562

861,299

560,063

Depreciation and amortization

652,923

410,507

1,810,389

1,161,535

Other

1,489,341

765,146

3,658,635

2,352,315

Total operating expenses

12,561,056

7,134,572

32,044,045

20,420,199

Income from operations

3,717,405

1,311,779

10,653,015

2,625,498

Other income (expense):

Interest income

22,083

28,940

91,555

41,994

Interest expense

(700,788)

(345,130)

(1,839,344)

(999,146)

Minority interests

(73,500)

120,997

104,412

293,204

Income before income taxes

2,965,200

1,116,586

9,009,638

1,961,550

Income taxes

1,135,996

84,859

2,791,782

84,859

Net income

$ 1,829,204

$ 1,031,727

$ 6,217,856

$ 1,876,691

Basic and diluted earnings per share:

Net income, basic

$ 0.22

$ 0.17

$ 0.83

$ 0.34

Net income, diluted

$ 0.21

$ 0.16

$ 0.77

$ 0.32

Weighted average number of common shares outstanding:

Basic

8,240,914

6,112,678

7,536,104

5,539,923

Diluted

8,860,699

6,789,647

8,238,094

6,044,398


© RCI Internet Services, Inc., All Rights Reserved. Rick’s Cabaret, Club Onyx, Silver City, XTC Cabaret, Foxy’s Cabaret, Hoops Cabaret, The Seville Club and Bombshells Restaurant and Bar are registered trademark of RCI Hospitality Holdings, Inc.
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