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Rick's Cabaret International, Inc. Reports 23.3% Growth In Revenue And 21.1% Growth In Net Income For Its First Quarter 2013

2013-02-13

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Restaurant News Resource Consolidated revenues rose 23.3 percent from the previous year to $27.1 million while net income rose to $2.6 million from $2.2 or 21.1 percent. Earnings per share for the quarter were 28 cents compared with 23 cents last year.

Rick's Cabaret International, Inc. (NASDAQ: RICK), the leading publicly traded group of gentlemen's clubs, today reported growth in revenues and income for its first quarter ended December 31, 2012. Consolidated revenues rose 23.3 percent from the previous year to $27.1 million while net income rose to $2.6 million from $2.2 or 21.1 percent. Earnings per share for the quarter were 28 cents compared with 23 cents last year.

"Our revenue growth of approximately $5.1 million in the first quarter was primarily driven by sales of clubs purchased in 2011 and 2012, which demonstrates the value of good acquisitions as an essential part of our growth strategy," said Eric Langan , president and CEO of Rick's Cabaret. "Our existing clubs are also doing well, with operating income exclusive of corporate overhead for same-location-same-period clubs operations increasing by 12.5 percent to $6.1 million for the quarter over last year."

Mr. Langan will discuss the results in a conference call today at 4:30 p.m. ET that is being webcast by and can be accessed at the Rick's Cabaret investor website, or . The toll free participant dial-in number is 877-407-8033 (International 201-689-8033). A replay will be available until March 11, 2013 at 877-660-6853 (international 201-612-7415), using required replay conference ID 408352.

The company reported adjusted EBITDA* for the quarter ended Dec. 31, 2012 of $7.3 million compared with $5.5 million, an increase of 32.2 percent. Total operating expenses were $21.2 million for the quarter compared with $17.6 million last year. Key cost areas as a percentage of total cost remained stable for the quarter, with increases generally reflecting the addition of new clubs.

Other significant facts noted in the Form 10Q filed today with the SEC include:

During the quarter service revenues increased to $12.7 million from $9.9 million while sales of alcoholic beverages rose to $10.4 million from $8.9 million.
The company generated cash flows from operating activities of $6.2 million during the quarter, up 19.3 percent compared with $5.2 million in the previous year.
During the three months ended December 31, 2012, the company purchased 45,733 shares of common stock in the open market at prices ranging from $7.84 to $8.26, as part of a $5 million stock buyback program authorized in 2008 by the Board of Directors.

* A definition of Adjusted EBITDA can be found on Page 20 of the Company's Form 10Q filed with the SEC and available at www.ricksinvestor.com.

About Rick's Cabaret: Rick's Cabaret International, Inc. (NASDAQ: RICK) is home to upscale adult nightclubs serving primarily businessmen and professionals that offer live entertainment, dining and bar operations. Nightclubs in New York City, Miami, Philadelphia, Charlotte, Dallas/Ft. Worth, Houston, Minneapolis, Indianapolis and other cities as "Rick's Cabaret," "XTC," "Club Onyx" and "Tootsie's Cabaret" and other brand names. Sexual contact is not permitted at any locations. Rick's Cabaret also operates a media division, ED Publications. Rick's Cabaret common stock is traded on NASDAQ under the symbol RICK.


RICK'S CABARET INTERNATIONAL, INC. CONSOLIDATED STATEMENTS OF INCOME

	Three Months Ended
	December 31,
(in thousands, except per share data)	2012		2011
	(UNAUDITED)
Revenues:
Sales of alcoholic beverages	$	10,406	$	8,916
Sales of food and merchandise		2,578		1,997
Service revenues		12,655		9,886
Other		1,502		1,220
Total revenues		27,141		22,019

Operating expenses:
Cost of goods sold		3,386		2,932
Salaries and wages		6,038		4,925
Stock-based compensation		282		8
Other general and administrative:
Taxes and permits		4,221		3,447
Charge card fees		374		308
Rent		570		703
Legal and professional		641		700
Advertising and marketing		1,109		995
Depreciation and amortization		1,320		1,120
Insurance		499		292
Utilities		489		404
Other		2,278		1,818
Total operating expenses		21,207		17,652
Income from operations		5,934		4,367

Other income (expense):
Interest income and other		8		2
Interest expense		(1,643)		(973)
Gain on change in fair value of derivative instruments		(1)		98
Income from continuing operations before income taxes		4,298		3,494
Income taxes		1,584		1,208
Income from continuing operations		2,714		2,286
Loss from discontinued operations, net of income taxes		(14)		(48)
Net income		2,700		2,238
Less: net income attributable to noncontrolling interests		(53)		(53)
Net income attributable to Rick's Cabaret International, Inc.	$	2,647	$	2,185
Basic earnings (loss) per share attributable to Rick's shareholders:
Income from continuing operations	$	0.28	$	0.23
Loss from discontinued operations		(0.00)		(0.00)
Net income	$	0.28	$	0.23
Diluted earnings (loss) per share attributable to Rick's shareholders:
Income from continuing operations	$	0.28	$	0.23
Loss from discontinued operations		(0.00)		(0.00)
Net income	$	0.28	$	0.23
Weighted average number of common shares outstanding:
Basic		9,575		9,685
Diluted		9,833		9,687
Net income to common stockholders	$	2,647	$	2,185
Other comprehensive income:
Unrealized holding gain on securities available for sale		11		15
Comprehensive income to common stockholders
	$	2,658	$	2,200