Rick's Cabaret International, Inc. Reports $7 Million Revenue For First Quarter With 7-Cent Earnings Per Share

HOUSTON -(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, 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 press release may contain 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