Operating Income Rises at Rick's Cabaret International, Inc. on Increased Revenue and Lower Costs


Friday August 13, 9:00 am ET

Houston -- (BUSINESS WIRE) -- Aug. 13, 2004 -- Rick's Cabaret International, Inc. [NASDAQ: RICK], a leading operator of gentlemen's clubs and other adult entertainment venues, reported increased operating income of $186,349 for its third period ending June 30, 2004, compared with an operating loss of $32,012 in the prior year.

Total revenues for the company rose to $3,887,176 for the period, compared with $3,822,141 in the prior year. Revenues from nightclub operations rose to $3,686,876 for the quarter from $3,572,112 in the prior year. The company's Internet and online auction sector reported a drop to $200,300 in revenue from $250,029 in the prior year as the planned reduction in Internet activities continued.

Rick's Cabaret reports net income of $90,575 or $.02 per share for the period. This compares with net income of $276,201 or $.07 in the prior year, which had benefited from a $327,381 one-time gain on the sale of the Taurus Entertainment Companies subsidiary.

Operating income from the company's clubs increased to $473,355 during the period, from $358,257 in the year earlier, despite the fact that the Rick's Cabaret nightclub in the Galleria district of Houston was closed for two weeks while it was being converted at a cost of about $70,000 and reopened as Club Onyx, which has already become a popular venue catering to urban businessmen and professional athletes. Operating income in the Internet and auction segment increased to $36,227 from $11,757. Both segments benefited from lower operating expenses.

"We are pleased with our results from the third quarter and are confident that we are on track for an excellent year," said Eric S. Langan, CEO of Rick's Entertainment. "Our expense control program is having a beneficial impact on earnings. Plus, our new Club Onyx in Houston catering to the urban gentleman is off to a fine start and we are continuing to explore other expansion opportunities."

For the nine months ending June 30th total company revenues are $11,890,532 compared with $11,095,443 in the prior year, with net income of $698,087 versus $341,903 in the prior year. Earnings per share for the year to date are $.19 versus $.09 in the prior year.


          RICK'S CABARET INTERNATIONAL, INC. AND SUBSIDIARIES
           CONSOLIDATED STATEMENT OF OPERATIONS (UNAUDITED)

                        FOR THE THREE MONTHS     FOR THE NINE MONTHS
                           ENDED JUNE 30,           ENDED JUNE 30,
                          2004        2003        2004         2003

Revenues
 Sales of alcoholic
  beverages            $1,527,029  $1,702,038  $5,250,470  $4,847,104
 Sales of food and
  merchandise             428,042     448,671   1,240,266   1,233,650
 Service revenues       1,664,234   1,353,834   4,534,864   3,939,650
 Internet revenues        200,300     250,029     603,723     846,681
 Other                     67,571      67,569     261,209     228,358
   Total revenues       3,887,176   3,822,141  11,890,532  11,095,443
                       ----------- ----------- ----------- -----------

Operating expenses
 Cost of goods sold       418,154     568,003   1,446,680   1,652,124
 Salaries and wages     1,415,847   1,390,943   4,057,287   4,027,421
 Other general and
  administrative
   Taxes and permits      530,257     561,475   1,669,825   1,558,995
   Charge card fees        70,347      64,832     198,982     191,267
   Rent                   142,319     101,448     394,489     218,361
   Legal and
    professional          130,336     157,840     410,911     564,674
   Advertising and
    marketing             260,445     232,329     660,410     610,809
   Depreciation           131,235     133,528     396,199     394,393
   Other                  601,887     643,755   1,733,028   1,668,079
   Total operating
    expenses            3,700,827   3,854,153  10,967,811  10,886,123
                       ----------- ----------- ----------- -----------
Income from operations    186,349     (32,012)    922,721     209,320
 Interest income            6,270       3,643      21,096      13,103
 Interest expense         (87,953)    (92,762)   (256,541)   (289,618)
 Gain from sale of
  marketable securities     2,929         ---      19,807      (1,874)
 Gain on sale of
  subsidiary                  ---     327,381         ---     327,381
 Minority interests       (17,471)     69,951      (6,925)     83,591
 Other                        451         ---      (2,071)        ---
Net income             $   90,575  $  276,201  $  698,087  $  341,903
                       =========== =========== =========== ===========
Basic and diluted
 earnings per share:
 Net income            $     0.02  $     0.07  $     0.19  $     0.09
                       =========== =========== =========== ===========
Weighted average number
 of common shares
 outstanding            3,700,148   3,715,048   3,700,148   3,724,304
                       =========== =========== =========== ===========



          RICK'S CABARET INTERNATIONAL, INC. AND SUBSIDIARIES
                      CONSOLIDATED BALANCE SHEETS

                               ASSETS

                                      6/30/04               9/30/03
                                    (UNAUDITED)            (AUDITED)
CURRENT ASSETS
 Cash and cash equivalents          $   365,936           $   604,865
 Accounts receivable:


 Trade                                   28,269                45,319
   Other, net                           203,606               213,886
 Marketable securities                  100,104               135,000
 Inventories                            282,766               230,451
 Other current assets                   844,076               106,332
                                    ------------          ------------
   Total current assets               1,824,757             1,335,853
                                    ------------          ------------

PROPERTY AND EQUIPMENT
 Buildings, land and leasehold
  improvements                        9,369,448             9,131,870
 Furniture and equipment              2,348,042             2,068,648
                                    ------------          ------------
                                     11,717,490            11,200,518

 Accumulated depreciation            (2,797,475)           (2,423,461)
                                    ------------          ------------
   Total property and equipment, net  8,920,015             8,777,057
                                    ------------          ------------

OTHER ASSETS
 Goodwill                             1,982,848             1,962,848
 Notes receivable                       168,925               179,754
                                    ------------          ------------
   Total other assets                 2,151,773             2,142,602
                                    ------------          ------------
   Total assets                     $12,896,545           $12,255,512
                                    ============          ============



          RICK'S CABARET INTERNATIONAL, INC. AND SUBSIDIARIES
                      CONSOLIDATED BALANCE SHEETS

                 LIABILITIES AND STOCKHOLDERS' EQUITY

                               6/30/04                9/30/03
                              (UNAUDITED)            (AUDITED)


CURRENT LIABILITIES
 Accounts payable - trade                 $    328,330   $    189,208
 Accrued liabilities                           533,582        622,216
 Deferred revenues                              21,753            ---
 Current portion of long-term debt             500,894        449,439
                                          -------------  -------------
   Total current liabilities                 1,384,559      1,260,863

 Long-term debt, less current portion        3,422,462      3,576,896
                                          -------------  -------------
 Total liabilities                           4,807,021      4,837,759
                                          -------------  -------------

COMMITMENTS AND CONTINGENCIES                      ---            ---

MINORITY INTERESTS                              42,956         36,032

STOCKHOLDERS' EQUITY
 Preferred stock, $.10 par, 1,000,000
  shares authorized; none outstanding              ---            ---

 Common stock, $.01 par, 15,000,000
  shares authorized; 4,608,678 shares
  issued at June 30, 2004 and September
  30, 2003                                      46,087         46,087

 Additional paid-in capital                 11,273,149     11,273,149
 Accumulated other comprehensive income         86,757        120,000
 Accumulated deficit                        (2,065,645)    (2,763,735)
 Less: 908,530 shares of stock held in
  treasury at cost at June 30, 2004 and
  September 30, 2003                        (1,293,780)    (1,293,780)
                                          -------------  -------------
Total stockholders' equity                   8,046,568      7,381,721
                                          -------------  -------------

Total liabilities and stockholders'
 equity                                    $12,896,545    $12,255,512
                                          =============  =============



        FINANCIAL INFORMATION RELATED TO THE COMPANY'S SEGMENTS

                         FOR THE THREE MONTHS      FOR THE NINE MONTHS
                         ENDED JUNE 30,            ENDED JUNE 30,
                         2004            2003      2004           2003

REVENUES
 Club operations   $ 3,686,876  $ 3,572,112  $11,286,809  $10,248,762
 Internet websites     200,300      250,029      603,723      846,681
                   ------------ ------------ ------------ ------------
                   $ 3,887,176  $ 3,822,141  $11,890,532  $11,095,443
                   ============ ============ ============ ============

NET INCOME/(LOSS)
 Club operations   $   473,355  $   358,257  $ 1,809,615  $ 1,298,912
 Internet websites      36,227       11,757       62,135       48,187
 Corporate expenses   (419,007)     (93,813)  (1,173,663)  (1,005,196)
                   ------------ ------------ ------------ ------------
                   $    90,575  $   276,201  $   698,087  $   341,903
                   ============ ============ ============ ============

Corporate expenses for the three and nine months ended June 30, 2003 included the $327,381 gain on the sale of a subsidiary.

About Rick's Cabaret
Rick's Cabaret International, Inc. (ricks.com) owns and operates upscale adult nightclubs serving primarily businessmen and professionals that offer live adult entertainment, restaurant and bar operations. The company owns and operates six adult nightclubs under the name "Rick's Cabaret" and "XTC" in Houston, Austin and San Antonio, Texas, and Minneapolis, Minnesota; licenses a "Rick's Cabaret" in New Orleans; owns and operates "Club Onyx" catering to urban gentlemen, owns an adult-themed club called "Encounters" that serves the couples or "swingers'" market and a owns a sports bar called the "Hummers," all three in Houston. No sexual contact is permitted at any of these locations. Rick's Cabaret also owns two adult Internet membership Web sites at couplestouch.com and xxxpassword.com that contain content acquired from wholesalers, and a network of nine online auction sites a under the flagship site naughtybids.com. These highly automated sites provide a sales platform for adult products and services in an auction format and generate revenues through transactional service fees. Rick's Cabaret common stock is traded on the NASDAQ Small Cap market under the symbol RICK. For further information contact ir@ricks.com.

Forward-Looking Statements:
This press release may contain forward-looking information within the meaning of Section 21E of the Securities Exchange Act of 1934 that involves significant risks and uncertainties, and is subject to the safe harbors created by this section. Important factors that could cause actual results for Rick's Cabaret to differ materially from those indicated in this press release include the risks and uncertainties as to the future operational and financial results of our Web sites, the future operational performance of our partners, the laws governing the operation of adult entertainment businesses, competitive and economic factors, dependence on key personnel and the ability to manage operations. Rick's Cabaret has no obligation to update or revise the forward-looking statements to reflect the occurrence of future events or circumstances. Please refer you to the documents Rick's Cabaret files from time to time with the Securities and Exchange Commission, in particular the most recent quarterly reports on Form 10-QSB and annual report on Form 10-KSB.


Contact:
     Rick's Cabaret International, Inc.
     Allan Priaulx, 212-338-0050
     ir@ricks.com 

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