Rick's Cabaret International, Inc. Responds To Press Report
CABARET INTERNATIONAL, INC. RESPONDS TO PRESS REPORT
HOUSTON-(March 26, 2006)- Rick's Cabaret International, Inc.
said today that it is not a part of and has no knowledge of any
investigation by the U.S. Attorney's office in Brooklyn into alleged
manipulation by organized-crime families of the stocks of more than
a dozen companies, including its own.
Eric Langan, President and CEO of Rick's Cabaret
posted a Letter to Shareholders on the company's website over the
weekend, as follows:
"On Thursday the Dow Jones News Service, The Wall
Street Journal and New York Post carried stories about
an indictment of some organized crime figures over an alleged stock
manipulation scheme. The Post story seems to say that this
alleged scheme took place in the late 1990s and 2000, but none of
the stories made clear when it purportedly occurred. According
to the Journal, one of the stocks mentioned in the indictment
as having been manipulated was Rick's Cabaret. We know nothing
about these allegations and have had no contact with the Department
of Justice or anyone else on this matter."
"After the close of market on Friday, the Associated Press
carried a story that tried to link our Friday stock performance
to the federal indictment. An initial AP story stated, falsely,
that we were somehow a part of the investigation, implied that the
alleged activities were recent and stated that the indictment was
the reason for a pricing pullback on Friday. We immediately called
AP to protest and issued a statement to the wire service as follows:
'We have never heard of any of the people named in this reported
Justice Department indictment, we have no relationship with any
of them, and we know nothing about these allegations. The first
we ever heard of these charges was when we read about them in The
Wall Street Journal. Our stock trades in an orderly and transparent
fashion and has done so for many years."
"The AP issued a new story that carried my statement and also
pointed out that we 'were not accused of any wrongdoing.' However,
the AP included a wild, unsubstantiated headline that said our shares
had 'fallen on manipulation scheme.' The AP seems to have violated
the most fundamental principle of good journalism – be accurate
and get a source for your story before you publish it. The sensationalist
headline is absolutely false and obviously AP had no source, or
else the story would have cited it."
"Our stock was down 45 cents at the close on Friday from a
close of $6.20 the day before. My own belief is that the pullback
in our share price on Friday was a natural market phenomenon following
the rise this past week. At Friday's close, our shares were up 5.9%
on the week and we are up 50% since the start of the year. There
could be any number of reasons why our shares have been rising,
but I believe that the market is recognizing that our steadily improving
financial performance makes us a good investment."
About Rick's Cabaret
Rick's Cabaret International, Inc. (NASDAQ: RICK, www.ricks.com)
operates upscale adult nightclubs serving primarily businessmen
and professionals that offer live adult entertainment, restaurant
and bar operations. The company owns, operates or licenses adult
nightclubs in New York City, New Orleans, Houston, Minneapolis and
other cities under the names "Rick's Cabaret," "XTC,"
"Club Onyx" and "Hummers." No sexual contact
is permitted at any of these locations. Rick's Cabaret also owns
the adult Internet membership Web site, www.couplestouch.com,
and a network of nine online auction sites for adult products under
the flagship URL www.naughtybids.com.
Rick's Cabaret common stock is traded on the NASDAQ SmallCap market
under the symbol RICK. For further information contact [email protected].
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 New York City and elsewhere, the success or lack thereof
in launching and building the company’s businesses in New
York City and elsewhere, 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. 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
go to www.ricks.com.
Contact for further information: Allan Priaulx, 212-338-0050,