Rick's Cabaret International, Inc. reports 165 percent rise in first quarter income on higher revenuew and reduced expenses; EPS 21 cents vs. 8 cents in prior year

HOUSTON – (February 9, 2011) – Rick’s Cabaret International, Inc. (NASDAQ: RICK), the nation’s leading group of upscale gentlemen’s clubs, today reported net income of $2.1 million for the period ending December 31, 2010, compared with $783,000 in the same period last year, a 165 percent increase. Net income per fully diluted share for the quarter was 21 cents, compared with 8 cents in the previous year. The company had revenues of $20.9 million in its first quarter, compared with $20 million for the same period last year.

The improvement in net income was due primarily to a combination of the higher revenues and lower operating expenses, which dropped to $16.7 million compared with $17.6 million for the same quarter last year.

The increase in total revenue was attributed primarily to the addition of $1.4 million in sales from two new clubs in Fort Worth and one in Austin.

“We had a very good quarter and we are happy with our start for the 2011 fiscal year,” said Eric Langan, President and CEO of Rick’s Cabaret, which now includes 22 clubs nationwide. “Our major clubs in New York City and Miami continue to thrive. We opened a new club just outside the Dallas/Fort Worth Airport in January, and we had a total of seven clubs in the DFW Metroplex to serve Super Bowl fans. We expect to remain on track to make at least one acquisition per quarter for the balance of this year.”

Other highlights of the first quarter:

• There was a significant decrease in advertising and marketing expenses, principally through the reduction of marketing costs in Las Vegas during 2010 and reduced radio advertising in the Dallas/Fort Worth market. • Rick’s Cabaret in Las Vegas lost approximately $370,000 for the quarter ending December 31, 2010, on revenues of $1.1 million, compared with a loss for the quarter in the previous year of $500,000 on revenues of $3.1 million. • The company’s Media Division lost approximately $76,000 before income taxes for the quarter, compared with approximately $65,000 in the 2009 quarter, but as the economy improves the company believes the division will become profitable through more cost control and increased revenues. • During the three months ended December 31, 2010, the company purchased 90,800 shares of common stock in the open market at prices ranging from $7.03 to $7.43 which compares with the purchase of 48,200 shares in the previous years at prices ranging from $3.54 to $5.95. • The company had cash on hand at the end of the quarter of $18.7 million compared with $9.5 million in the previous year, having generated $2.8 million from operating activities vs. $3.2 million last year. At the end of the quarter the company had working capital of $5.1 million compared to $377,552 last year, a result of increased profit and also the net cash still available from the convertible debt, which is principally long-term in nature.



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

ASSETS

(in thousands, except per share data) December 31, 2010 September 30, 2010 Assets (UNAUDITED) Current assets: Cash and cash equivalents $ 18,719 $ 19,168 Accounts receivable: Trade, net 830 888 Other, net 278 204 Marketable securities 479 - Inventories 1,481 1,264 Deferred tax asset 1,753 1,504 Prepaid expenses and other current assets 716 951 Assets of discontinued operations 133 148 Total current assets 24,389 24,127 Property and equipment, net 59,262 59,559 Other assets: Goodwill and indefinite lived intangibles, net 62,076 62,076 Definite lived intangibles, net 1,080 1,197 Other 1,520 1,412 Total other assets 64,676 64,685 Total assets $ 148,327 $ 148,371 LIABILITIES AND STOCKHOLDERS’ EQUITY (in thousands, except per share data) December 31, 2010 September 30, 2010 Liabilities and Stockholders' Equity (UNAUDITED) Current liabilities: Accounts payable $ $ $ 629 $ $ 731 Accrued liabilities 4,106 4,529 Texas patron tax liability 4,650 3,955 Current portion of derivative liabilities 1,236 1,276 Current portion of long-term debt 8,663 7,883 Liabilities of discontinued operations 53 47 Total current liabilities 19,337 18,421 Deferred tax liability 15,456 15,566 Other long-term liabilities 736 719 Long-term debt 33,446 34,803 Derivative liabilities at fair value, less current portion 816 1,243 Total liabilities 69,791 70,752 Commitments and contingencies Temporary equity - Common stock, subject to put rights 198 and 317 shares, respectively 4,020 4,366 PERMANENT STOCKHOLDERS' EQUITY: Preferred stock, $.10 par, 1,000 shares authorized; none issued and outstanding - - Common stock, $.01 par, 20,000 shares authorized; 9,676 and 9,766 shares issued and outstanding, respectively 97 98 Additional paid-in capital 61,542 62,326 Accumulated other comprehensive loss (26) - Retained earnings 9,590 7,515 Total Rick’s permanent stockholders’ equity 71,203 69,939 Noncontrolling interests 3,313 3,314 Total permanent stockholders’ equity 74,516 73,253 Total liabilities and stockholders’ equity $ 148,327 $ $ 148,371 RICK'S CABARET INTERNATIONAL, INC. CONSOLIDATED STATEMENTS OF INCOME Three Months Ended December 31, (in thousands, except per share data) 2010 2009 (UNAUDITED) Revenues: Sales of alcoholic beverages $ 8,359 $ 8,050 Sales of food and merchandise 1,784 1,590 Service revenues 9,412 9,292 Internet revenues 125 145 Media revenues 216 257 Other 962 671 Total revenues 20,858 20,005 Operating expenses: Cost of goods sold 2,518 2,456 Salaries and wages 4,676 4,310 Stock-based compensation - 44 Other general and administrative: Taxes and permits 3,063 2,836 Charge card fees 364 346 Rent 1,079 993 Legal and professional 485 650 Advertising and marketing 1,183 2,938 Depreciation and amortization 1,072 842 Insurance 303 262 Utilities 406 406 Other 1,579 1,536 Total operating expenses 16,728 17,619 Income from operations 4,130 2,386 Other income (expense): Interest income 12 4 Interest expense (1,124) (1,029 ) Gain on change in fair value of derivative instruments 148 44 Income from continuing operations before income taxes 3,166 1,405 Income taxes 1,026 514 Income from continuing operations 2,140 891 Loss from discontinued operations, net of income taxes (11) (35 ) Net income 2,129 856 Less: net income attributable to noncontrolling interests (53) (73 ) Net income attributable to Rick’s Cabaret International, Inc. $ 2,076 $ 783 Basic earnings (loss) per share attributable to Rick’s shareholders: Income from continuing operations $ 0.21 $ 0.09 Loss from discontinued operations (0.00 ) (0.00 ) Net income $ 0.21 $ 0.08 Diluted earnings (loss) per share attributable to Rick’s shareholders: Income from continuing operations $ 0.21 $ 0.09 Loss from discontinued operations (0.00 ) (0.00 ) Net income $ 0.21 $ 0.08

Weighted average number of common shares outstanding: Basic 10,043 9,370 Diluted 10,045 9,385

About Rick’s Cabaret: Rick’s Cabaret International, Inc. (NASDAQ: RICK) is home to 22 upscale adult nightclubs serving primarily businessmen and professionals that offer live entertainment, dining and bar operations. Nightclubs in New York City, Miami, Philadelphia, New Orleans, Charlotte, Dallas, Houston, Minneapolis and other cities operate under the names "Rick's Cabaret," "XTC," “Club Onyx” and “Tootsie’s Cabaret”. Sexual contact is not permitted at these locations. Rick’s Cabaret also operates a media division, ED Publications, and owns the adult Internet membership Website couplestouch.com as well as 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 or visit www.ricksinvestor.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 cities where it operates, the success or lack thereof in launching and building the company’s businesses, 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. Additional factors that could cause the Company’s results to differ materially from those described in the forward-looking statements are described in forms filed with the SEC from time to time and available at www.ricksinvestor.com or on the SEC's internet website at www.sec.gov. 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 visit www.ricksinvestor.com.

Contact: Allan Priaulx, 212-338-0050, allan@ricks.com