Greetings ladies and gentlemen and welcome to Rick’s Cabaret First Quarter 2014 Conference Call and Webcast. At this time, all participants are in a listen-only mode. A brief question-and-answer session will follow the formal presentation. (Operator Instructions). As a reminder, this conference is being recorded. I would now like to turn the conference to your host Mr. Gary Fishman. Thank you, sir you may begin.

Thank you. I just wanted to remind everybody that our Safe Harbor statement is posted at the beginning of our conference call presentation. It reminds you that you may hear or see forward-looking statements that involve a number of risks and uncertainties; I urge you read it. Actual results may differ materially from those currently anticipated. And we disclaim any obligation to update information disclosed on this call as a result of developments which occur afterwards. I also urge you to read the explanation of non-GAAP and adjusted EBITDA measurements that we use and that are included in our presentation and news release. Finally, I’d like to invite everyone in the New York City area to stop by Rick’s Cabaret tonight at 06:30 pm at 50 West 33rd Street between Fifth Avenue and Broadway. It’s a great way to get a first hand behind the scenes look at one of our flagship clubs. If you have an RSVP, just ask for me by name at the door. Now here is Eric Langan, President and CEO of Rick’s. Sir?

Thanks Gary. Thank you for joining us today. Also on the line with me is Ed Anakar, our Director of Operations and Phil Marshall, our CFO. To get started, please turn to slide four. We’ll begin today with the review of our first quarter income statement and balance sheet, then we’ll update you on the successful launch of Vivid Cabaret in New York and tell you how well we're doing so far in the second quarter. We’ll also update you with our plans for rolling out new restaurant sports bars and the REIT that we're working on and give you a picture of how everything fits together. Finally, we'll wrap up with our reiteration of guidance and a question and answer session. And if you turn to slide five. Revenue came in as indicated earlier last month, they were up 8.4% or close to $30 million which we are pleased with. However, the severe winter weather in mid December in Texas cost us at least $0.5 million in sales, of that about 80% would have likely contributed to operating profit. As a result, we earned slightly less than a year ago. Net income of $2.4 million or $0.25 a share, this compares to $2.6 million or $0.28 a share a year ago. With the exception of the bad weather, sales trends were very good. Units opened less than a year contributed more than 8% of our growth, while units opened more than a year, added 0.03% return and that’s a positive same store sales growth. Because 75% of our units were in Texas, they were the most affected by the weather. Looking at October and November only, same-store sales were averaging increases of more than 4%. In addition, during the quarter we had expenses associated with developing five units, 2 of which opened in January; this includes the new Vivid Cabaret in New York, which is very large part of those expenses. The first quarter also experienced an anticipated bump in our Rick's Cabaret New York rent. The rent went from $180,000 -- went up to $180,000 a month in October from $60,000 a month in September. But due to our sale of the air rights, we were able to reduce it starting in November to a $100,000 a month. We also had a $120,000 in one time legal settlement cost. As a final point, I'd like to note that cash generation remained very strong during the quarter. Adjusted EBITDA came in at $7.3 million, about level with the year ago. If you turn to slide 6 for a review of our balance sheet, shareholder equity had a record $100.1 million, up from $97.1 million as of September 30th. Total assets hit $230 million, up from $223 million. Major items during the quarter included raising $7 million in new debt which helped to buy the New York City air rights and lowered our rent there and the construction cost on Vivid Cabaret New York. We also paid down $1.7 million of other debt including $800,000 on the (inaudible) related note which are expensive at 14%. We now only have $4.5 million remained on the system’s debt. Please turn to slide 7. We’re very pleased to report that sales for the second quarter to-date are up strongly with year-over-year sales up in the high teens for January and same store sales turning up more than 4%. This is due to four factors: one is the opening of the Vivid Cabaret in New York in mid January. Ed Anakar and his team did terrific job of opening that location, Ed, would you like to say a few words?

Yes, Eric. Thank you. Vivid received tremendous opening, related publicity and the traffic has been incredible. At some moments it was literally wall to wall customers and entertainers. And thanks to grand opening events and the big game weekend, performance has continued to do well. We truly believe that this new location has a potential to become one of our top clubs. Back to you, Eric.

Thanks. Ed will be joining us during the question-and-answer session if anyone has additional questions for him. A second reason for the great results so far in the second quarter is the opening of our second Bombshells, this one in Webster, a suburb southeast of Houston near NASA. David Simmons and his team did equally excellent job of getting it ready. A third factor was the overall beneficial effects of the pro football championship in particular on Rick’s and Vivid in New York. Anybody who was in Manhattan for the two weeks looking up to the big game had to be impressed with all the traffic at our clubs and the parties. We took full advantage of that and benefited financially and strategically in developing customers and building our reputation. Lastly, as of the first quarter, we had nine units opened in less than 12 months. As the quarters progress, they are getting better at building their businesses. If you please turn to slide 8, we hope you like this slide. We wanted to give you a more graphic description of why we are so excited about this year and next. As you can see, we are building up a number of new units, both adult clubs and restaurants sports bars. For the balance of fiscal 2014, we have at least four more units in active development; as it happens, all of them happen to be in Texas. First, the Rick’s Cabaret in Odessa, where we are still waiting for our final permits to build our well, so we can get that location opened. The Bombshells in Austin which construction began in January and our target is to open that location sometime in May; our Bombshells in Beaumont where we’re in the process of refining our exact plans and the Bombshells in South Houston which we announced signing the lease in late January. We are continuing to work on additional restaurants and sports bar locations. Our objective is to have a total of 10 sports bar restaurants concepts opened or in development by year end calendar 2014 with a cluster in Texas and others possibly in select cities elsewhere having significant tourists or convention traffic. We continue to work on new adult club opportunities as well. With regard to acquisitions, we don’t have anything we can report at this time, but we continue to talk with many parties in the industry and hope to have something soon. If you turn to slide number 9. As many of you know, we like to own our real estate for many of our adult clubs. Rules required that the license to be physically tied to location. Owning this real estate makes our income statement and balance sheet look very different from other fast growing restaurant bar chains. To solve this problem, we’ve been exploring the concept of developing a private real estate investment trust. We are currently in a process of drafting documents to create special entity. Our thinking is Rick’s would own 9.9% of real estate investment trust. A wholly owned subsidiary of Rick’s when entered into a contract to manage the assets of the REIT, Rick’s would then expect the Dallas real estate which has an estimated market value of approximately $85 million and an equity value of approximately $40 million to the REIT. The potential benefits could include a result in a major favorable liquidity event for Rick’s. It would create a war chest for making acquisitions and other growth opportunities happen. It would eliminate most of the depreciation and amortization charges on our income statement. In turn this would result in Rick’s being more of an operating company with a significantly higher return on equity and that would make us much more comparable to other publically traded bar and restaurant chains. Turning to slide 10, we put this slide in for informational purposes. [Currently] we have $11.7 million of convertible debt in four tranches. We have four conversion prices on these tranches that range from $13 to $16.25. If our stock trades at any of these particular price for 20 days, we could fore-conversion on these specific tranches. This would convert a debt into equity and would save us on interest payments and pay down of principle. The rate on this debt ranges from 6% to 10%. It would also raise an additional $2 million from the attachable warrants. The interest savings would offset all our large part of the dilution. And the bottom-line is conversion would provide us with more cash to grow the company faster. Turning to slide 11. This slide gives you a picture of where we are moving towards with Rick’s. The core concept remains the same continuing to find new ways to develop and extract value from the adult oriented restaurant, bar industries, taking particular advantage of the industry’s potential for high cash flow. Of course our core business is the adult gentlemen’s clubs. We currently have 40 locations and we believe there are 500 likely candidates for acquisition in the industry. Moreover looking at the ages of their owners we believe many might be interested in selling over the next few years. Leveraging our core expertise, we are developing our restaurants, sports bars businesses. We have been very successful at generating 50% of our revenues from high margin liquor sales. This is about twice the restaurant industry standard. Restaurants, sports bars also complement the acquisition of adult clubs and are better understood by investors. Third is the REIT which would actually be a separate entity from Rick’s. if successful it could provide a vehicle for other club owners to sell their real estate and if they do that would enable us to develop closer relationships with them, perhaps this could lead our eventually acquiring enormous wealth. Turning to slide 12 to reiterate our 2014 fiscal year guidance. [To wrap up] we continue to anticipate approximately $130 million in revenues. We did $29 million in the first quarter, but clearly we anticipate sales will be ramping up based on our progress to-date in the second quarter, new clubs coming online and clubs less than a year old getting better. Generating GAAP earnings of approximately $1.20 per share and producing non-GAAP earnings of $1.70 per share. As I mentioned we expect to see growth from existing clubs and restaurants and the new ones we expect to open is fiscal ‘14. We also expect more upside from major sporting events such as The College Basketball Championship in New York in March and the Final Four in Dallas in April. I would like to note that this guidance does include acquisitions of any adult clubs although such acquisitions are part of our longer 20% to 30% annual growth targets. With that let’s open the line for questions. Operator?

Thank you. Ladies and gentlemen we will now be conducting a question-and-answer session. (Operator Instructions). Our first question comes from the line of Howard Rosencrans, VA. Please proceed with your question.

Hi Eric.

Hi Howard.

Congratulations on a nice quarter. Can you tell us, you commented that October, November were 3% to 4% comps. If we were to put back in the 5,000 from the Texas weather, can you tell us what the comps would have been or maybe you want to scoot Texas for December, what would the comps outside of the Texas for anywhere you want to address them just trying to get a sense of how December worked?

Well, I mean Texas was the most affected by the weather. But we actually had Minnesota, had some downtime as well, Philadelphia, even New York was affected a couple of days from the weather. So, it's really hard to really put it all back together to have the 500,000. I know the Texas clubs would have done much better, because we're really close for basically five days there.

And the New York obviously the weather has not been too accommodating and it's not too accommodating in January and February hasn't been cloudy either or I don't keep too exactly how the weather has been in Texas. How has the weather been, how much has it been impacted you in January you know and February?

I still think it impacted some of the Dallas, Fort Worth market. The rest of Texas has been okay. We've got a couple of days in Philadelphia, but basically, we were still in the high teens for overall growth and same store sales growth were still over 4% for January. So very little affect and then of course, the super bowl weather was fantastic, so that helped out everywhere.

Okay. And any timing on this REIT stuff; when do you think we might see something?

On the REIT stuff, we’re working on it right now, we’re working on getting the lawyers engaged, we’re drawing up all the paper work to form it all. And we should get something out to the market very shortly on when that’s going to be set up.

Okay. So we can hope to do something this quarter, is that realistic?

It’s possible, it could be this quarter, could be early next quarter, but probably before the next earnings conference call. We’ll definitely have an update.

Very good. Thank you.

Yes.

Thank you. (Operator Instructions). Our next question comes from the line of [Max Ellis,] private investor. Please proceed with your question.

Hi Eric. Congratulations on a great quarter.

Thank you.

I was wondering if you could maybe comment on the Los Angeles club. Last I heard it wasn’t performing up to expectations, I don’t think I’ve heard anything since then.

Yes. We have a little trouble out there. We’re in the process of reconcepting that one I think. We’re going to change the demographic that we originally had gone after and change to more of in line with our Phoenix location. And we hope to get that all done here in the next couple of weeks.

Got it. Well, that’s the only question I have. I’ll look forward to hearing update on the REIT, once you have a chance. Thanks again.

Thank you.

Thank you. (Operator Instructions). Our next question comes from the line of Ray Asmar, Summit Brokerage. Please proceed with your question. Ray Asmar - Summit Brokerage Eric, great quarter. My question to you is you said there was about 500 prospective entity clubs that you are looking at. What sort of the criteria do you use to filter whether they pass your test as possible candidates for acquisition?

We wanted them to be major markets that have sporting teams or convention business. We like at least 1 million people. We would look in other smaller markets if they are around a base where we already have clubs. Those are the main factors that we look at.

Okay, great. Thank you.

Thank you. Our next question comes from the line of [Bob Brown], private investor. Please proceed with your questions.

Yes. Few things; one is, any update on any stock buyback in the past quarter or what you are thinking of in terms of that, particularly also in terms of New Year, helping the stock price up in order to get to the -- able to do some of the conversions? And the second question is -- I am glad to -- it’s great to hear about the same-store sales in January, so does that mean that so far you are not seeing the new Vivid club cannibalize the existing New York club?

Okay, I will start with stock buyback. We didn’t purchase any stock in the last quarter in our stock buyback program. And we’ve really focused on -- we said we have five properties basically under construction and that’s where most of our free cash flow has gone into. As far as the Vivid and the Rick’s, to give you an idea of the grand opening week of Rick’s, we actually had a record week in January at Rick’s. So Vivid actually helped the deal. And I can let Ed, Ed are you on the call still?

Yes, I am.

Hey, do you want to explain him the concepts and how some of that works?

Well, Rick’s, I’d like to think of Rick’s as our classic gentlemen’s club while Vivid is clearly for the younger generation, meaning the concept is a little bit different. To go back and what Eric commented on this as far as the numbers, on the soft opening day or soft opening week when we opened Vivid, we had a lot of traffic, a lot of regulars coming from Rick’s, but actually Rick’s had a record week that week, not just during the big games, super bowl week, but also during the soft opening, where we had a tremendous amount of traffic coming to Vivid, but also Rick’s had huge amount of traffic. I believe that people are staying more towards the mid-town area instead of going to west side or east side clubs.

Right, thanks Ed.

Thank you. (Operator Instructions). It appears there are no further questions at this time. I’d like to turn it back to Gary Fishman for any closing comments.

Thank you, Eric. I just wanted to remind everybody again that we do have a Due Diligence Event at Rick’s Cabaret, a little later from 06:30 to 08 O’clock at 50 West 33rd Street. If you have an RSVP, ask for me at the door. Until then, we look forward to reporting our 2014 second quarter sales in April and our second quarter results in May. Thank you. And have a great night.

Thank you. Ladies and gentlemen, this concludes today’s teleconference. You may disconnect your lines at this time. Thank you for your participation.