Allan Priaulx - Investor Relations Counsel EricLangan - President and CEO Phillip Marshall - CFO

EricWold - Merriman Curhan David Mau - Montgomery StreetResearch Chuck Lipton - TSL Peter Cyrus - Gorilla Capital [Anis Arella - Avpoint Capital] William Sebator - private investor Peter Mark - Mark Capital Management

Welcome to theRick’s Cabaret International fiscal year 2007 earnings conference call. (Operator Instructions) Itis now my pleasure to introduce your host Allan Priaulx, Investor Relations Counselfor Rick’s Cabaret International. Thankyou, Mr. Priaulx. You may begin.

Thank you, Rob. Welcome, ladies and gentlemen to thefiscal year 2007 conference call and earnings report for Rick’s Cabaret. Beforewe begin, I’d like to remind you of our Safe Harbor statement. Inthis conference call you may here or seeforward-looking statements that involve anumber of risks and uncertainties that could cause thecompany’s actual results to differ materially from those indicated inthe call. Thedetails of our Safe Harborstatement are fullyexplained on slide 2 of our PowerPoint presentation and they arealso included in allof our press releases. I’d like to remind everyone also that if you wish toparticipate in thiscall by asking questions of EricLangan or Phillip Marshall, please call 877-407-8031. You will not beable to pose questions from thewebcast itself. On thecall today are EricLangan, our President and CEO; and Phillip Marshall, our CFO. Phil will beavailable to answer questions as necessary from you. Itis now my pleasure to introduce you to EricLangan, who will present our fiscal year 2007 results.

Thank you, Allan. Wewill begin our presentation today with areview of our fourth quarter ‘07 results, followed with our fiscal year ‘07results. We will discuss thedrivers of our increases, theeffect of new clubs on our income, update our acquisition strategy and reviewour guidance for 2008. Fourth quarter 2007 was afantastic quarter for us. Fourth quarterrevenue increased to $8.97 million, up 41.5% over 2006. Fourth quarter net income was $1.18 million versusa loss of $114,000 in2006. Our fourth quarter basic earnings wereper share of $0.20versus a $0.03 losslast year. For thefiscal year 2007, revenue increased to $32 million, up 30.7% over 2006. Net income of $3 million versus net income of$1.75 million in 2006,or basic earnings pershare of $0.54 versus $0.38 in2006. We completed two acquisitions incalendar 2007 and adjusted our acquisition strategy to purchasing mature clubsthat were already up and operating and become immediately accretive to ourearnings. We also became ataxpayer in 2007. Thedriving factors behind our 2007 results were our New York City club, which had record revenue month after month,and we are stillcontinuing to seeincreases in our salesin that location. Also, Forth Worth exceeded our expectationsand we are actuallyseeing more revenue and more earnings out of that location than we hadoriginally anticipated. We currently have anexpansion going on atthat location. We’ll add about 4,500 to 5,000 square feet ofadditional space on thesecond floor in aVIP capacity which webelieve could add anadditional $1 million ayear end in income tothat location. Our overall same-club same-period sales improved 11.8%, and ouroperating cash flow in2007 was $4.38 million versus $2.73 million in2007. On theacquisition front, we closed Tootsies Cabaret inMiami Gardens, Floridaand it becameaccretive on December 1st. It’s afantastic location; 47,000 square feet, doing unbelievable revenues. Decemberrevenues are going toexceed the revenuesthat we based the acquisitionon. Fort Worthcontinues to do verywell. We’re going to berebranding that as a Rick’sCabaret on January 1st and doing thegrand opening of thesecond floor around the15th of January. What’s been amazing for us is thepipeline of future acquisitions. Afterannouncing theTootsies transaction as a$25 million transaction with $15 million incash and our stock performance over thepast few months, owners arecalling us everyday with offers to sell us their clubs or merge their clubs andwe’re seeing a lot ofowners that are reallylooking to do equitytransactions with us more than cash transactions. Sowe’re weighing thedifferences and theclubs and the benefitsto our existing shareholders of those acquisitions. To give you anidea of the impact of theTootsies acquisition, we paid $25 million or 2.8X EBITDA. Thetransaction closed November 30th and we assumed management on December1st. Revenues from Tootsies areexpected to beapproximately $18 million with annual EBITDA of $8.8 million, which putsTootsies current EBITDA margin at48.9%. Now inDecember, like I said, we areseeing an increase inthose revenues over that $1.5 million average and we hope to seethat continue to increase as we go. Wehave made a few changesin themanagement and some of thethings that we dodifferent than they did and we think we will continue to seean increase from thosechanges. Our acquisition strategy going forward is going to befocused on clubs generating $10 million or more inannual revenue. Now that doesn’t mean wewon’t purchase clubs that aresmaller like our Fort Worth acquisition if theprofitability and theother numbers areright, but our main focus is going to beon acquisitions of $10 million inannual revenue or higher, because we believe once those acquisitions aremade, there is only acertain number of those available out there and we want to bethe one to buy thoseacquisitions first. We’re also going to betargeting profitable clubs inmajor metropolitan areas, continue to target our 3X to 6X earnings, dependingon potential and zoning and licensing and potential for new competition. We’llcontinue to use our equity combination of cash and debt. We made alittle mistake on theslide here -- we said cash and stock on that slide -- but we’ll beusing cash and debt, inaddition to our equity, to make these acquisitions. Our guidance update for 2008 was very tough for us today, becausewe have a very goodpipeline of future acquisitions. So,what we decided to dotoday was to give you asnapshot of thecompany as of where we aretoday with no other acquisitions. Our guidance for fiscal 2008, our revenue will be$54 million with net income of $7.7 million or earning pershare of $1.03 for fiscal 2008. Ourcalendar year 2008 guidance revenue will be$60 million with $9.8 million inincome, or earnings of $1.30 pershare. Any future acquisitions willimpact this guidance. Our plan is to reissue the2008 guidance inJanuary sometime, based on theacquisitions that we believe will close inthe calendar year 2008as we have time to review this after theholidays. That will conclude theformal portion of our presentation and I’ll behappy to answer any questions that anyone may have atthis time.

(Operator Instructions) Your first question comes from EricWold - Merriman Curhan. Eric Wold - Merriman Curhan: Abit of a follow up onyour commentary on theacquisition plans. You mentioned that you’re only looking for clubs doing $10 million or more inannual revenues. Inthe guidance you gave atthe end of October,you gave ’08 and ’09 guidance and talked about one more acquisition in’08 and two more in ’09in that guidance. Couldyou give a little bitmore detail on what theassumptions are behindthose acquisitions?

Basically, that guidance inOctober, we had no idea that Tootsies was going to beadding the type ofrevenue and increase inearnings that ithas. Also, our New York location hascontinued to increase and is above what we thought itwould be inOctober of 2007 when we put that guidance out. So right now wefeel that without any acquisitions we’re inthe $1.03 range, $7.7million in net incomebased on 7.5 million shares that we have outstanding today. Going forward, we have several acquisitions. We arelooking at $10 millionplus acquisitions inrevenues. Now, we arealso looking at someother smaller acquisitions as well, but we’re going to keep our focus. Ittakes us the sameamount of time to go doan acquisition and buy$18 million in revenueslike we did inTootsies as it does todo anacquisition like Fort Worth wherewe bought basically $4 million worth of revenue. We’re going to try to keep our focus on thelarger acquisitions because ittakes the same amountof time to do thoseacquisitions. We can growat amuch faster pace by focusing on those larger acquisitions, but that doesn’tmean that if an acquisitionlike Forth Worth comes along that we’re going to ignore it. We’re going to belooking at thoseacquisitions too. I believe that we can probably acquire incalendar 2008 four acquisitions, fairly easily. Eric Wold - Merriman Curhan: Just to make sure I understood, the$1.03 you are talkingabout for fiscal ’08 includes no additional acquisitions beyond what you’vegot?

Exactly. Eric Wold - Merriman Curhan: Does itinclude Philadelphia or no?

Yes. Eric Wold - Merriman Curhan: Okay, soit includes Philadelphiabut nothing beyond that?

: Eric Wold - Merriman Curhan: On theinquiries coming insince the deal wasdone and the Miami clubwas acquired, are thelarge clubs you want to acquire, arethese the ones that arecoming in with theinquiries or are thosethe ones you reallyhave to reach out to?

We aregetting those phone calls now. We werereaching out to them, now they arecalling us. Eric Wold - Merriman Curhan: Can you give theweighted average diluted share count for thefourth quarter?

For thefourth quarter I believe itis 6.245.

Theweighted average, it’s on thebottom of theconsolidated statements. Atthe end of thefourth quarter theweighted average of shares outstanding was 5.548 million. Eric Wold - Merriman Curhan: I apologize not for year for thefourth quarter only. Doyou have that?

No, I amsorry I don’t. Let mesee if I can find itout.

I know I’ve seen itsomewhere, I am prettysure it’s fully diluted at6.245, Eric. I amfairly certain of that number.

I think that’s about right.

I can verify itwith you later, if you’d like but I’m fairly certain that’s thenumber. I just don’t have thepage in front of methat I’ve seen it on, butI’m fairly certain that’s thenumber. Eric Wold - Merriman Curhan: I like thememory. I appreciate it. Thanks.

Your next question comes from David Mau - Montgomery StreetResearch. David Mau - Montgomery Street Research: Congratulations on agreat year. You talked alittle bit about therefocused acquisition strategy. Can yougive us a feeling forhow many opportunities areout there of that size? I’ve heard that there are3,500 clubs out there.

We figure that inthe $10 million to $20million range, right now there is probably somewhere between 75 and 100locations in theUnited Statesthat are doing revenuesof that magnitude. David Mau - Montgomery Street Research: Italso seems to me thatover the last year toyear-and-a-half that theacquisition cycle hasvery quickly accelerated here. We usedto be waiting four orfive months before anacquisition, now you seem to beannouncing them much more rapidly than that. Can you comment on what’s going on?

Certainly. Ayear ago we would by anacquisition; we would have to wait sixmonths for the stockto react to it beforewe could use our equity to make anadditional acquisition. Now we’re makingthese acquisitions. We’re letting themarket know thegeneral scope of it; themarket is reacting alittle bit. I mean as soon as we close thetransaction, like we did with Tootsies, themarket immediately reacts and gives us thevalue for that new acquisition. Well, when that happens that allows us to immediately go andbuy something else. Soas long as themarket continues to value our acquisitions as we dothem and give us afair value for that work and for those acquisitions inthis timely manner, we will continue to purchase new locations inthe same manner. David Mau - Montgomery Street Research: Would you also saythat the number ofopportunities being put infront of you hasaccelerated also?

Absolutely. Here’s thedeal, David, to give you anidea. If you take theaverage club owners I amtalking to these days, they realize that their business is worth $10 million. Theyrealize three years from now their business is still going to beworth $10 million. However, if they takeequity in Rick’s andhold that equity for that same three-year period, then our growth ratecould change theirvalue to $20 million or $30 million. :

Your next question comes from [Chuck Lipton – TSL]. Chuck Lipton - TSL: Hi there, nice quarter. You acquired Tootsies for 2.8X EBIDTA. What kind of price would you have to payfor most clubs? I know that was sort of aspecial situation, but what multiple?

Well normally we arepaying 3X to 5X and thesmaller deals aregoing closer to 5X and thelarger deals are goingcloser to 3X, which inmost people’s logic wouldn’t make sense except for when you getinto an acquisition of$25 million in ourindustry right now, there areno buyers. Soin order for someoneto cash out to that magnitude, they don’t have as many people to talk to. We areable to negotiate alittle better deal and keep those multiples down alittle bit. Chuck Lipton - TSL: Who else might they begoing to? Is there anybody else out there looking atthose size deals?

I amsure VCG Holdings is out these looking ata similar type ofacquisition, but I think other than thetwo of us, the publiccompanies are theonly ones right now that aregoing to come up with that type of money. They have to talk to one of thetwo of us. Chuck Lipton - TSL: Lastly, you aredoing some licensing deals inSouth America. Is there anything inyour numbers for potential revenues from that source?

No, we didn’t put anything inthere from that atthis point. This guidance is what wewill do with what wecurrently have out, open and operating. Chuck Lipton - TSL: Would you expect any clubs to open under your name inSouth America?

Yes. According to them -- of course, it’s out of ourcontrol, we are just thelicensing company -- but we arebeing told that they aregoing to open in mid-Februaryin Buenos Aires andthey have signed alease on a secondlocation outside of Buenos Aires ina tourist area, Iforgot the name of it,I would have to go look itup. I amwaiting for them to getthe first one openthen I’ll really getexcited about those guys. They have themoney, they have theresources and I think they aredefinitely moving forward. I went down about amonth-and-a-half agoand looked at this newlocation that they picked out inBuenos Aires, afantastic location. It’s right by theconvention center. There are25 million people in Buenos Aires, sothere is plenty of population. We went and checked out some of what would beconsidered competition, which is not really competition for aU.S.-style gentlemen’s club. They don’treally have thefoodservices, they don’t have thethings, the higher endquality stuff that we have, and their prices arehigher than what we charge inNew York City. I mean, I believe thepricing pressure is there, every thing is there to make ita very successfuloperation once they getstarted. Chuck Lipton - TSL: You get10% of revenues?

10% of gross revenues after value-added tax is deducted. They have a21% value added tax and sobasically take thegross revenues minus 21%, we get10% of the remaininggross.

Your next question comes from Peter Cyrus - Gorilla Capital. Peter Cyrus - GorillaCapital: I’m new to your story. Could I get puton your email lists soI know about these conference calls?

You arenot getting our e-mails? Peter Cyrus - GorillaCapital: No, I guess sometimes when you arenew to a story theydon’t get you on theemail list. Now that I amon the call, maybe oneday I will actually come to one of your clubs. As you expand theinfrastructure of your company, how areyou going to handle that?

Well, right now we could easily expand three or four moreclubs without any problem whatsoever. Aswe buy these larger clubs, we areactually picking up some pretty strong management. Most of theclubs that areoperating have good systems inthem already so thereis not a lot ofwork. We’ll integrate Miami;our POS system was changedover last Sunday night. Sobasically every thing atthat location is converted to our system, probably by theend of December. Sobasically in thefirst 30 days we have integrated everything on that location, we areready to move as faras our infrastructure is concerned, to thenext location without any problem. Peter Cyrus - GorillaCapital: You talk about these large size clubs. I don’t mean thisfacetiously, but arethere bigger than large size clubs? How bigare thebiggest clubs?

I don’t think there’s one bigger than 47,000 square feet that Iknow of, off-hand anyway. I mean Miamiis definitely one of thelargest clubs in thecountry. Peter Cyrus - GorillaCapital: Involume, what would be thebiggest size in termsof revenues and things?

Thehighest growth in clubsthat I know of that I have actually seen numbers on was Scores New York City in1999 did $28 million. I’ve heard that there areother clubs in Vegasthat are inrange that are doing the$22 million to $28 million inrevenues. I think theaverage is going to bein that $10 million to$20 million range, in betweenthose numbers. Peter Cyrus - GorillaCapital: You just mentioned Vegas; people have talked for awhile about one of these clubs going into acasino at some point intime. Is that a pipedream, is that something that could happen inthe indefinite future?

We are talking to guys that are familiar with the Vegas market and the casinos and they think it’s a definite possibility. The market is warming up to the idea. I think as we continue to growand become a larger,publicly traded company and we continue to increase thegeneral acceptance of our industry that itis just a matter oftime. Now we’ve been saying for abouttwo years now that we think that’s thefuture of Las Vegas, but eventually theclubs will be oncasino properties or incasinos, and we continue to believe that and we’ll continue to explore thoseopportunities. Peter Cyrus - GorillaCapital: I would think if you could put aproperty in acasino that that property would probably domore volume than say thenumber you threw out for theScores?

I think if you were ina casino, if you were insay Caesar’s Palace orthe Wynnor even something like Planet Hollywood, you would belooking at revenuesprobably in the$40 million to $50 million range, easily. Peter Cyrus - GorillaCapital: Going back to your comment about when you were talking aboutthe acquisition, Imean I’ve been a directorof a casino company soI know all of therigmarole you have to go through to geta license. Would you assume that guys like you and VCTwould have anadvantage because you arepublic and that gives you acertain, both credibility and visibility?

I think so. Ourfinancials are audited,which has to bea plus for them. We’re governed and reviewed by theSEC. I mean allthose watch things have to help. Dothey give us a directadvantage? I’m not sure. I’d like to believe they do, but I guessuntil we can really sit down with thecasino executives and really they start exploring this idea first-hand, thenwe’ll have a muchbetter idea of where we rank versus other operators inthe country right now. Peter Cyrus - GorillaCapital: I have one last comment I want to make, which is I just wantto -- I hate guys who dothis on calls, but -- I want to congratulate you because when we first startedtalking about this industry what seems like along time ago,although I guess itwasn’t, nobody really was willing to give this industry any respect atall. I think that you’ve done asuperb job and so mycompliments to you.

Well thank you very much. We’re certainly trying and we appreciate allyour advice throughout thepast and we will continue to look forward for you inthe future too. Thank you.

Peter, if you or anybody else on thecall would like to getinformation, you areactually on our list but for some reason we may not begetting through. Just send anemail to ir@ricks.com and we’ll make sure that you areon the list.

Your next question comes from [Anis Arella - Avpoint Capital]. Anis Arella - AvpointCapital: :

I think we can. Rightnow we are trying tostay very competitive. We had arecent price increase inNew York inSeptember. We’ll probably bereviewing those prices again inMarch. We arestill a little lowin that market, Ithink. Some of our other markets, our more mature markets, I thinkwe are prettycompetitively priced. Itreally just depends on theconditions at thetime. We’ve been pretty happy with mostof our operations. We have afew locations we definitely could seesome margin improvement on, but overall we’ve been pretty happy. But to answer you question, I think we could easily raiseour prices a littlebit. We tend to bethe leader inmost of our markets and soif we raise our prices our competitors tend to dothe same, soI think we definitely have that pricing pressure. Anis Arella - AvpointCapital: You haven’t seen any pushback inNew York atall on thehigher prices?

No, not atall. Thebusiness there is just growing, it’s fantastic. We always thought --typically most of our markets, it’s an18 months to 24 month breakout period. Ithink New York, just becausepeople are soinundated with marketing, I did alittle show up there, we visited abunch of funds on our roadshow and I was amazed. We metwith 11 funds and only four of them knew that I had alocation in New York City. So,when four out of eleven know I have alocation in New York City and they areinterested in mystock, I have to go, how many people inNew York City still don’t realizethat our location is there? We doa lot to market, 40%year-over-year growth, soits not like it is notgrowing, its just I think there’s just tons of room to still growthere. Anis Arella - AvpointCapital: Doyou guys see astrategy of clustering stores to bemore effective than penetrating new markets soyou get alot of leverage out of clustering on marketing dollars and things like that?

We doa little bit, but thereality is in order tobuild the Rick’s brand,we’re going to have to bein 30 major markets or25 major markets. So, as much as we lookat clustering we’realso looking expanding thebrand into these new markets. I dothink you get someadvertising benefit and you getthe ease and use of changein employees andmoving employees from location to location and those types of managementbenefits, but as far as for thereal process of building thebrand, we must continue to moveinto new markets as well. Anis Arella - AvpointCapital: What doyou think are thetop two or three cities that you’d look atnext?

I think we’re going to continue to look inthe New York market, definitely continue to expand inMiami. We’re probably going to look for newmarkets. I amstarting to look inVegas. I amstarting to look in Chicagoand other Midwestern cities as well. Outside of Texas, we’repretty focused in Texasright now, so we will probablyreally start working on continuing to expand outside of Texas.I think our big focusis East Coast right now. Anywhere on theEast Coast that we can expand into anew market we are lookingat.

Your next question comes from William Sebator - private investor. William Sebator -private investor: With therecent acquisition of Tootsies Cabaret, doyou plan on staying with that name or doyou plan on re-branding itRick’s? Along that line, is theplan to develop theRick’s brand or more acquisition focus and thebrand isn’t as important?

Let’s start with your first question with Tootsies. We aregoing to leave Tootsies as Tootsies Cabaret. We do notintend putting theRick’s name on theclub. Inthe future we may doRick’s Cabaret presents or what we may dois take what is now called thenext level, which is thesecond floor of thecabaret, and maybe brand that as aRick’s Cabaret. So, we’d actually have aRick’s Cabaret section inside of Tootsies. Tootsies is just alandmark in Miami. It’s very well-known. They’ve operated aclub there for 17years. Even though this new location hasonly been there for about two years, theother location was just right down thestreet, very popular. Sowe don’t really foresee changingthe name of Tootsies atthis time. That doesn’t mean we neverwill, but at this timewe won’t. As far as thebranding and acquisitions, I think its alittle combination of both. We want tocontinue to grow ourrevenue and earnings and we want to continue to build our brand. However, when we come across one-offs likeTootsies that we can buy atsuch a great multiple,it’s going to be verydifficult to pack those types of deals up just inlieu of building our brand. Theearning potential atTootsies and therevenues that it’s generating arefantastic. So, if we come across another city, whether it’s aone-of-a-kind type location, we will continue to buy that location as wellwithout necessarily having to brand itas a Rick’sCabaret. But our real focus needs to beand we want it to becontinued on building theRick’s brand. We want to create thatnational brand. When you go to acity, the first thingyou’re going to do as aguy is say what clubs arein this town? They nameoff two or three clubs and as soon as you hear Rick’s, you say“oh lets go to Rick’s. We know thatlocation.” That’s what we want to create,is that branding. So, you know exactlywhat to expect when you go to one of our locations and when you go to acity, that’s thelocation you want to go to. William Sebator - privateinvestor: What effects, if any, doyou see thelegal uncertainties inHouston having on thecompany?

In Houston,well, right now we don’t know what’s going on inHouston. We arecurrently preparing thepetition for theSupreme Court. Right now thestay is still in placeso there hasn’t reallybeen any changesfrom status quo. We don’t know if changesfrom status quo will come sixmonths from now, three years from now or sixdays from now. We’ve got acontingency plan that we don’t really want to discuss. We have acontingency plan that we believe will minimize any effect whatsoever on ouroperations. We only have one clubthat we think could even benegatively affected atall. Itdoes about $60,000 amonth in revenue soit’s not a bigdeal. One of our other locations that we had purchased that’s outsidethe City of Houstonwould benefit greatly from any type of harm that would happen to theother location. So, really it’s awash for us and wedon’t' really feel that atthis time that’s going to have any major impact. That theHouston one is going to have anymajor impact on thecompany at all. It’s really becoming less and less aportion of our total revenues anyway, as we continue to expand outside of Texasand Houston.

Our final question comes from Peter Mark - Mark CapitalManagement. Peter Mark - MarkCapital Management: You mentioned themarket you guys arelooking at is Vegasand I know when we’ve talked inthe past you were prettynegative on it, just interms of competition and its hard to make money there, itsounds like. Would you only go inthere if you could getin acasino, or is itsomething you need to doto help establish thebrand name?

To answer your question, I’d like saythat I would only go there if I can getin acasino. However, we arelooking at acouple of locations out there that meet our parameters and soI am not going to sayno at this time thatwe wouldn’t purchase alocation, that’s not ina casino, because we arelooking; we areexploring theopportunities. If we can find theright opportunity, I think we would actually operate outside of acasino, but my past concerns arestill my major concerns today inthat there are alot of clubs out there, there is alot of competition and ithas slowed down. Two years agothere were ten newclubs opening every year; that hasslowed down. There arenot as many new clubs opening. Theshakeouts have started inthat market right now and that’s why we arelooking. If we buy alocation it will beprofitable already. We arenot going to buy a locationthat’s not already making money out there, we arenot going to try to buy something that we think we can fixup or make better. We want to buysomething that’s already inone of the top spotsand profitable. Peter Mark - MarkCapital Management: So itis something you guys arelooking at, not adefinite for ‘08?

Right, there is nothing definite on ityet, but it’s definitely amarket we areinterested in. Itis the next logicalstep. We’ve got into Miami, we arein New York, Las Vegasis the next logicalmajor market to break into. Peter Mark - MarkCapital Management: Then you guys would bethe same kind ofparameters; looking for itto be atleast mildly accretive?

Exactly.

Gentlemen, there areno further questions inqueue at thistime. Doyou have any further comments?

I would just like to remind everybody on thecall to come down and seeme atthe clubs anytime, andthank you. We’ll talk to you again ina few months.

Just one final thing; if any of you were having troubleaccessing thePowerPoint, there is alink to it on ourwebsite, www.ricks.com, and you can also ask medirectly atir@ricks.com and we’ll take care of itfor you.