Rick's Cabaret International, Inc. Earned 13 Cents Per Share In Third Quarter On Net Income Of $635,857



HOUSTON -
(August 14, 2006)- Rick's Cabaret International, Inc. [NASDAQ:RICK] reported today it earned 13 cents per share on net income of $635,857 during its third quarter ended June 30th, compared with a loss of $10,681 for the quarter last year. Revenues for the period were $6,251,181, compared with $3,729,011. Total revenues for same-location-same period of club operations increased 22.4 percent to $4,317,945 during the quarter.
 
The increases were due chiefly to revenues generated by new clubs in New York City, Charlotte, NC and Houston of $1,844,013 and by a 20.9 percent increase in revenues of $682,027 generated by existing clubs, offset slightly be a decrease of $3,870 in internet operations.
 
"We are very pleased with our third quarter results on both the revenue and income lines," said Eric Langan, CEO of Rick's Cabaret. "Our cost of goods sold in our club operations declined during the third quarter and we continue to improve margins from liquor and food sales. The contributions from our recent acquisitions continue to be on track and we are actively pursuing additional acquisitions that will be accretive to revenue and earnings."
 
Total revenues for the nine months ended June 30th were $18,150,434, compared with $10,504,612 last year. Nine-month income from continuing operations was $1,867,382, compared with a loss of $98,780 for the same period a year ago. Basic earnings per share from continuing operations to date were 41 cents, compared with a loss of 3 cents per share last year.
 
Rick's Cabaret will hold a conference call at 4:30 p.m. August 14th at which Mr. Langan will discuss results for the quarter and other matters. It will be webcast live on the Rick's Cabaret website (www.ricks.com) and will be available to callers toll free at 877-407-8031 (Live participant dial in for international callers is 201-689-8031).

About Rick's Cabaret
Rick's Cabaret International, Inc. (NASDAQ: RICK, www.ricks.com) 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, www.couplestouch.com, and a network of online adult auction sites under the flagship URL www.naughtybids.com. Rick's Cabaret common stock is traded on NASDAQ under the symbol RICK. For further information contact ir@ricks.com or visit www.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 for further information: Allan Priaulx, 212-338-0050, ir@ricks.com

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

FOR THE THREE MONTHS FOR THE NINE MONTHS

ENDED JUNE 30,                          ENDED JUNE 30,

                                                                                       2006                         2005                          2006                          2005

                                                                                                                              (UNAUDITED) (UNAUDITED)

Continuing Operations:

Revenues:

Sales of alcoholic beverages                                                     $ 2,214,651            $ 1,363,425            $ 6,600,135           $ 3,766,469

Sales of food and merchandise                                                          679,049                    414,348                 1,995,048                 1,205,446

Service revenues                                                         2,931,801                 1,673,269                 8,367,721                 4,766,110

Internet revenues                                                                                   196,948                    200,876                    609,857                    568,836

Other                                                                                                    228,732                 77,093               577,673               197,751

Total revenues                                                                               6,251,181                 3,729,011              18,150,434              10,504,612

                                                                                                                                                                         

Operating expenses:

Cost of goods sold                                                                               715,949                    438,444                 2,170,481                 1,284,378

Salaries and wages                                                                             1,776,181                 1,315,625                 5,124,704                 3,727,169

Other general and administrative:

Taxes and permits                                                                             763,337                    484,244                 2,238,103                 1,405,870

Charge card fees                                                                                 140,115                       52,353                    346,425                    167,649

Rent                                                                               261,863                    128,874                    855,440                    306,697

Legal and professional                                                                    256,938                    156,750                    592,885                    502,829

Advertising and marketing                                             285,171                    185,963                    891,721                    543,566

Depreciation and amortization                                                      258,409                    141,532                    726,679                    408,773

Other                                                                           898,168                661,623            2,561,295               1,838,823

Total operating expenses                                   5,356,131                 3,565,408              15,507,733              10,185,754

                                                                                    -------------                 -------------                 -------------                 -------------

Income from continuing operations                                                  895,050                    163,603                 2,642,701                    318,858

 

Other income (expense):

Interest income                                                                                           5,316                         6,868                       20,702                       27,611

Interest expense                                                                                  (267,059)                 (181,348)                 (801,580)         (438,298)

Minority interests                                                                                      2,550                               53                         1,206                      (6,360)

Other                                                                                                                                           ---                 143                 4,354                                                                                                                  (591)

Net income (loss) from continuing

operations                                                                                               635,857                    (10,681)                 1,867,382                    (98,780)

 

Discontinued operations:

Loss from discontinued operations                                                 ---                            ---                                ---            (148,294)

Gain on sale of subsidiary                                                               ---                 ---                  ---              291,987

Net income (loss)                                                                    $ 635,857         $ (10,681)         $ 1,867,382            $ 44,913

                                                                                                               =========              =========              =========              =========

Basic and diluted earnings (loss) per share:

Income (loss) from continuing operations                               $ 0.13              $ 0.00            $ 0.41             $ (0.03)

Income from discontinued operations                                          ---                   ---                  ---                 0.04

Net income, basic                                                                             $ 0.13              $ 0.00              $ 0.41              $ 0.01

                                                                                 =========             =========           ==========              =========

Net income, diluted                                                                         $ 0.12              $ 0.00              $ 0.38              $ 0.01

                                                                                                               =========              =========           ==========              =========

Weighted average number of common

shares outstanding:

Basic                                                                              4,835,502                 3,967,148               4,521,600                 3,816,592

                                                                                 =========              =========              =========              =========

Diluted                                                                                             5,752,084                 3,967,148                 5,211,700                 3,938,960

                                                                                                               =========              =========              =========              =========

 

Comprehensive income (loss) for the three months ended June 30, 2006 and 2005 were $613,612 and ($24,029), and for the nine months were $1,867,382 and ($46,294), respectively. This includes the changes in available-for-sale securities and net income (loss).