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Rick's Cabaret International, Inc. Reports Sharp Profit Increase In Fiscal Year

samsung1

Ohio

Net Income Swings to $7.8 million from Loss of $8.0 million in 2010; Per Share Earnings Rise to $.79 vs. a Loss of $.82

HOUSTON – (December 14, 2011) – Rick's Cabaret International, Inc. (NASDAQ: RICK), the nation's leading group of upscale adult nightclubs, today reported its revenue for the year ended Sept. 30, 2011 rose to $83.5 million, a 12.7 percent increase over the $74.0 million in 2010. Net income was $7.8 million, compared with a loss of $8.0 million in the previous year. Fully diluted earnings per share were $.79 vs. a loss of $.82 last year.

“Our strong fiscal 2011 results reflect a return to more normal growth patterns for the company across the board and the fact that we are no longer impacted by the drag from the now discontinued operation in Las Vegas,” said Eric Langan, President and CEO of Rick's Cabaret, which operates 23 clubs around the country. “We are continuing the momentum we built in fiscal 2011 and we look forward to another strong year in 2012.”

Mr. Langan said the revenue improvement included a 4.9 percent increase in sales at clubs open more than one year, particularly the New York City location, and about $6.1million from new clubs acquired in 2010 and 2011. The results also reflect the closing of the Las Vegas club in April 2011, which was shut after determining it could not be made viable in the foreseeable future.

In a Form 10-K filed with the SEC today, the company also reported results for its fourth quarter ending September 30th, showing revenues of $21.5 million compared with $19.1 million for the same quarter in the prior year; net income of $2.0 million, compared with a loss of $12.5 million in 2010; fully diluted earnings per share of 20 cents, versus a loss of $1.24 last year.

Key factors in the full fiscal year 2011 results include:

Adjusted EBITDA (earnings before interest expense, income taxes, depreciation, amortization, and impairment charges) was $23.6 million in 2011, compared with $17.9 million last year. The company uses non-GAAP adjusted EBITDA as a core operational performance measurement it feels more accurately reflects the performance of the company in part because it allows companies to express results without the need to adjust for Federal, state and local taxes, which vary considerably by jurisdiction. (See Note below.)


Operating margins (excluding impairment) were 22.5 percent for the year, compared to 20.0 percent in the prior year.


Income from operations for same-location-same-period nightclubs open more than a year increased by 18.3%.


Net cash provided by operating activities increased to $18.9m from $17.3m in the prior year.


Interest expense declined to $3.9 million from $4.0 as the company amortized loan balances. As of September 30, 2011, the balance of long-term debt was $35.6 million compared to $42.7 million a year earlier.


Legal and professional fees declined to $2.3 million from $3.0 million, reflecting a decrease in costs related to litigation for claims under the Fair Labor Standards Act.


No continuing operations assets were impaired in 2011, compared with $3.6 million in impairment charges in 2010.


Revenue improvements were noted in all three of the major revenue categories tracked by the company: alcoholic beverage sales were $32.6 million compared with $28.5 million last year; food and merchandise was $7.4 million compared with $6.3 million; service revenues were $38.2 million compared with $34.2 million.

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