RICK RCI Hospitality Holdings Inc

Rick�s Cabaret International, Inc., operator of upscale gentlemen�s clubs, today reported net income of $1,031,727 for its third quarter ending June 30, 2007, an increase of 62 percent over the $635,857 reported for the three months ended June 30, 2006. Net income per basic share was 17 cents, compared with 13 cents in the previous year. Income before income taxes for same-location-same-period of nightclub operations increased 42 percent to $1,901,468 in the third quarter this year, from $1,338,462 for same period last year. Rick�s Cabaret had consolidated total revenues of $8,446,351 for the quarter, compared to consolidated total revenues of $6,251,181 for the three months ended June 30, 2006, an increase of 35 percent that was primarily attributable to $1,601,224 generated by new nightclubs in San Antonio, Austin, and Fort Worth, Texas and an increase of $599,399 from other locations. Total revenues for same-location-same-period of club operations increased just over 10 percent. The company reported a 2.77 percent decrease in internet revenues to $191,553. �We are very pleased with the results for our third quarter,� said Eric Langan, President and CEO of the company. �Revenues from the newly acquired locations are beginning to make the contributions we had anticipated and our existing nightclubs are also growing steadily.� Interest expense for the period was $345,130 compared to $267,059 for the three months ended June 30, 2006, due primarily to new debt to finance the purchase and renovation of the new clubs. As of June 30, 2007, the balance of long-term debt including current maturities was $14,895,002 compared to $12,316,144 a year earlier. Cash flows from operating activities during the first three quarters were $2,652,237, a 52 percent increase compared with the $1,747,107 generated during the period in 2006. Mr. Langan and chief financial officer Phillip Marshall will discuss the third quarter results in a conference call today at 4:30 p.m. EDT. The call is being webcast and can be accessed through the Rick�s Cabaret website (ricks.com). The toll free live participant dial-in number for callers from the U.S. and Canada is 800-361-0912, while international callers can use 913-981-5559. The conference call will be available for replay for 14 days after the event at 888-203-1112 (U.S. and Canada) and 719-457-0820 (international). Replay passcode: 9453772. 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, � 2007 2006 2007 2006 (UNAUDITED) (UNAUDITED) Revenues: Sales of alcoholic beverages $ 3,254,244 $ 2,214,651 $ 8,661,248 $ 6 ,600,135 Sales of food and merchandise 869,853 679,049 2,302,568 1,995,048 Service revenues 3,864,108 2,931,801 10,753,923 8,367,721 Internet revenues 191,553 196,948 557,033 609,857 Other � 266,593 � 228,732 � 770,925 � 577,673 Total revenues 8,446,351 6,251,181 23,045,697 18,150,434 � Operating expenses: Cost of goods sold 1,077,984 715,949 2,931,620 2,170,481 Salaries and wages 2,238,630 1,776,181 6,465,822 5,124,704 Stock compensation 48,134 -- 178,846 -- Other general and administrative: Taxes and permits 1,088,917 763,337 2,943,189 2,238,103 Charge card fees 157,932 140,115 439,440 346,425 Rent 388,702 261,863 1,137,974 855,440 Legal and professional 279,339 256,938 766,615 592,885 Advertising and marketing 297,494 285,171 981,290 891,721 Insurance 192,225 104,726 501,490 273,100 Utilities 189,562 157,574 560,063 437,281 Depreciation and amortization 410,507 258,409 1,161,535 726,679 Other � 765,146 � 635,868 � 2,352,315 � 1,850,914 Total operating expenses � 7,134,572 � 5,356,131 � 20,420,199 � 15,507,733 Income from operations 1,311,779 895,050 2,625,498 2,642,701 � Other income (expense): Interest income 28,940 5,316 41,994 20,702 Interest expense (345,130) (267,059) (999,146) (801,581) Minority interests 120,997 2,550 293,204 1,206 Other � -- � -- � -- � 4,354 Income before income taxes 1,116,586 635,857 1,961,550 1,867,382 Deferred income taxes � 84,859 � -- � 84,859 � -- Net income $ 1,031,727 $ 635,857 $ 1,876,691 $ 1,867,382 � Basic and diluted earnings per share: Net income, basic $ 0.17 $ 0.13 $ 0.34 $ 0.41 Net income, diluted $ 0.16 $ 0.12 $ 0.32 $ 0.38 Weighted average number of common shares outstanding: Basic 6,112,678 4,835,502 5,539,923 4,521,600 Diluted 6,789,647 5,752,084 6,044,398 5,211,700 Comprehensive income for the three months ended June 30, 2007 and 2006 were $1,031,727 and $613,612, and for the nine months were $1,874,466 and $1,867,382, 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 business executives and professionals that offer live adult entertainment, restaurant and bar operations. The company owns, 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.� Sexual contact is not 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 ricks.com.