Rci Hospitality Holdings, Inc. · NASDAQ:RICK
Rci Hospitality — Q4 2024 Earnings Presentation
34 slides from Rci Hospitality's earnings presentation, Dec 16, 2024
Slide 1: Building a portfolio of well-managed, high cash-flowing nightclubs and sports-bar restaurants
Building a portfolio of well-managed, high cash-flowing nightclubs and sports-bar restaurants NASDAQ: RICK | 4Q24 Conference Call | December 16, 2024 | www.rcihospitality.com | @RCIHHinc
Slide 2: Today's Speakers
Today’s Speakers Eric Langan Bradley Chhay Mark Moran President & CEO Chief Financial Officer CEO RCI Hospitality Holdings, Inc. RCI Hospitality Holdings, Inc. Equity Animal @RicksCEO @BradleyChhay @itsmarkmoran 2
Slide 3: X Spaces Instructions
X Spaces Instructions • Log in to: X (formerly Twitter) • Select this X Space: https://x.com/i/spaces/1DXGydpRRRLKM Or • To ask a question during Q&A: You will need to join the Space with a mobile phone • To listen only: You can join the Space with a personal computer 3
Slide 4: Forward-Looking Statements
Forward-Looking Statements This presentation contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These statements include, among other things, statements regarding plans, objectives, goals, strategies, future events or performance and under
Slide 5: Non-GAAP Financial Measures
Non-GAAP Financial Measures In addition to our financial information presented in accordance with GAAP, management uses certain non-GAAP financial measures, within the meaning of the SEC Regulation G, to clarify and enhance understanding of past performance and prospects for the future. Generally, a
Slide 6: Key Takeaways
Key Takeaways 4Q24 • Nightclubs SSS up two quarters in a row – first time since first half of FY23 Results • Total company sales declined due to hurricane and a fire, resulting in a lower GAAP EPS (YoY) • Non-GAAP EPS, net cash provided by operating activities, and free cash flow all increased • Off
Slide 7: "Back-to-Basics" Five-Year Capital Allocation Plan
“Back-to-Basics” Five-Year Capital Allocation Plan 7
Slide 8: FY25-29 Plan Summary
FY25-29 Plan Summary* • Nightclubs – focus on core business operations and new acquisitions Operations • Bombshells – improve performance and finish the three units currently under development • We expect to generate $250M+ of cumulative FCF over the next 5 years Capital – 50% of FCF allocated to cl
Slide 9: FY25-29 Plan Detail
FY25-29 Plan Detail • Core business with 35%+ margins, high barriers to entry, steady and significant cash flow Nightclubs • Targeting low-single-digit SSS growth, consistent with historic levels • Evaluating every location in our portfolio and will rebrand, reformat or divest underperforming locati
Slide 10: Nightclub Acquisition Track Record
Nightclub Acquisition Track Record • $267M of acquisitions (clubs and their related real estate) since FY16 Est. Number of Licensed Adult Nightclubs in US • Track record of: – Staying disciplined on price RICK – Improving operations and financial performance consistent with our 57 goals Target – Dep
Slide 11: FY29 Financial Targets
FY29 Financial Targets Revenue ($M) Free Cash Flow ($M) ~$75 ~$400 Revenue CAGR FCF CAGR FY15-24a 9% FY15-24a 14% FY25-29e 7% FY25-29e 10% $296 $48 $181 $33 $135 $15 FY15 FY19 FY24 FY29e FY15 FY19 FY24 FY29e Shares Outstanding (M) Debt / Adjusted EBITDA (TTM) Shares CAGR 3.3x FY15-24a -1.5% 3.2x FY2
Slide 12: Already Made Considerable Progress Executing Plan
Already Made Considerable Progress Executing Plan Nightclubs Share Buybacks • Two quarters of positive SSS growth • 4Q24: Increased share buyback program by $25.0M • Working on three potential acquisitions • FY24: Repurchased 442,639 shares for $20.6 million Bombshells Cash Dividends • Divestment of
Slide 13: Capital Allocation Strategy
Capital Allocation Strategy Share Notes Buybacks: • Targeted % annual use of ~40% FCF FY25-29 • Club acquisitions includes debt repayment • Strategy Club Share excludes Acquisitions completion of Buybacks & (includes debt club and repayment) Dividends restaurant ~50% of FCF ~50% of FCF projects alre
Slide 14: 4Q24 & FY24 Results
RCI HOSPITALITY HOLDINGS INC 4Q24 & FY24 Results
Slide 15: Summary Results
Summary Results In Millions Except EPS 4Q24 4Q23 FY24 FY23 Total revenues $73.2 $75.3 $295.6 $293.8 Impairments and other charges, net $10.1 $9.9 $36.6 $15.6 Income tax expense (benefit) ($0.8) ($0.6) ($0.4) $6.8 Net income attributable to RCIHH common shareholders $0.2 $2.2 $3.0 $29.2 EPS $0.03 $0.
Slide 16: Nightclubs Segment
Nightclubs Segment Total Revenues ($M) Operating Margin As % of Segment Revenues $62.4 $62.8 60% $60.9 $61.0 $60.6 $59.4 $56.6 $56.3 $57.0 48% 36% 24% 12% GAAP Non-GAAP 0% 4Q22 1Q23 2Q23 3Q23 4Q23 1Q24 2Q24 3Q24 4Q24 4Q22 1Q23 2Q23 3Q23 4Q23 1Q24 2Q24 3Q24 4Q24 4Q24 vs. 4Q23 ($M) Locations Contribut
Slide 17: Bombshells Segment
Bombshells Segment Total Revenues ($M) Operating Margin As % of Segment Revenues 20% $14.3 $14.4 $14.0 $13.4 $13.6 2% $13.1 $12.7 $12.8 $11.9 -16% -34% GAAP Non-GAAP -52% -70% 4Q22 1Q23 2Q23 3Q23 4Q23 1Q24 2Q24 3Q24 4Q24 4Q22 1Q23 2Q23 3Q23 4Q23 1Q24 2Q24 3Q24 4Q24 4Q24 vs. 4Q23 ($M) Locations Contr
Slide 18: Corporate Segment
Corporate Segment Expense ($M) Expense Margin As % of Total Revenues GAAP Non-GAAP 15% $7.5 $7.1 $7.2 $7.1 $6.9 $6.8 $6.8 $6.6 $6.6 $6.6 12% $6.2 $6.3 $6.3 $6.3 $6.3 $5.8 $5.5 $4.6 9% 6% 3% GAAP Non-GAAP 0% 4Q22 1Q23 2Q23 3Q23 4Q23 1Q24 2Q24 3Q24 4Q24 4Q22 1Q23 2Q23 3Q23 4Q23 1Q24 2Q24 3Q24 4Q24 4Q2
Slide 19: GAAP Disclosure ($M)
GAAP Disclosure ($M) Quarter 4Q22 1Q23 2Q23 3Q23 4Q23 1Q24 2Q24 3Q24 4Q24 Operating income (loss) $18.0 $16.9 $13.4 $15.5 $5.6 $13.2 $4.7 ($2.5) $3.5 Net cash provided by operating activities $17.8 $14.9 $16.8 $15.3 $12.1 $13.6 $10.8 $15.8 $15.7 Net income (loss) $10.6 $10.2 $7.7 $9.1 $2.2 $7.2 $0.8
Slide 20: Cash, FCF & Adjusted EBITDA ($M)
Cash, FCF & Adjusted EBITDA ($M) Cash As % of Total Revenues $36.0 $34.9 $34.1 34% $32.4 29% 30% 29% 27% 26% $23.6 24% 24% 24% $22.8 $21.0 $21.2 $20.0 20% 21% 19% 19% 18% 18% 17% 15% 12% FCF Adj. EBITDA 9/30/22 12/31/22 3/31/23 6/30/23 9/30/23 12/31/23 3/31/24 6/30/24 9/30/24 4Q22 1Q23 2Q23 3Q23 4Q2
Slide 21: Debt Metrics
Debt Metrics Debt, Net of Loan Costs ($M) Debt Maturities at 9/30/24 ($M) Amortization Schedule $246 $244 $240 $245 $234 $232 $238 Realty Balloon $211 Non-Realty Balloon $203 $7.9 $2.9 $9.1 $5.7 $2.2 $2.3 $14.3 $14.2 $14.5 $14.8 $14.8 9/30/22 12/31/22 3/31/23 6/30/23 9/30/23 12/31/23 3/31/24 6/30/24
Slide 22: Development Update
Development Update Project Location Status • Awaiting final inspections Bombshells Denver, CO • Targeting January 2025 open Chicas Locas (rebranded) El Paso, TX • Targeting March 2025 open • Awaiting new electrical plan signoff Rick’s Cabaret & Steakhouse Central City, CO • Targeting April 2025 open
Slide 23: Appendix
RCI HOSPITALITY HOLDINGS INC Appendix
Slide 24: Long-Term Performance
Long-Term Performance Fiscal Year ($M) 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 9-Year CAGR Total revenues $135.4 $134.9 $144.9 $165.7 $181.1 $132.3 $195.3 $267.6 $293.8 $295.6 9.1% Adjusted EBITDA $34.1 $34.5 $37.3 $44.4 $46.2 $22.4 $60.2 $86.7 $85.0 $72.6 8.8% % of revenues 25.2% 25.6% 25
Slide 25: Strategic Share Buybacks & Issuance
Strategic Share Buybacks & Issuance Cumulative Value of Shares Repurchased Average Price Shares Used for Fiscal Year Shares Value Per Share Used for Shares Per Share Acquisitions Repurchased Acquisitions 2015 225,280 $10.19 225,280 2016 747,081 $9.79 972,361 2017 89,685 $12.25 1,062,046 2018 -- -- 2
Slide 26: Debt Analysis (at 9/30/24, $M)
Debt Analysis (at 9/30/24, $M) Total of $241.1* Weighted Average Interest Rate (WAIR): 6.67% $64.1 Seller Financing (26.5% of total) • Secured by the respective clubs and real estate to which it applies • 5 Baby Dolls-Chicas Locas: $18.6 @ 7.0% WAIR • 11 Clubs: $16.9 @ 6.0% WAIR • Scarlett’s: $10.9
Slide 27: Reconciliation of Non-GAAP Measures
Reconciliation of Non-GAAP Measures In 000s 4Q24 4Q23 FY24 FY23 Reconciliation of GAAP net income (loss) to Adjusted EBITDA Net income attributable to RCIHH common stockholders $244 $2,191 $3,011 $29,246 Income tax expense (benefit) (788) (601) (410) 6,846 Interest expense, net 4,062 4,126 16,197 15
Slide 28: Reconciliation of Non-GAAP Measures
Reconciliation of Non-GAAP Measures In 000s 4Q24 4Q23 FY24 FY23 Reconciliation of GAAP net income to non-GAAP net income* Net income attributable to RCIHH common stockholders $244 $2,191 $3,011 $29,246 Amortization of intangibles 597 806 2,494 3,528 Impairment of assets 12,553 9,336 38,517 12,629 Se
Slide 29: Reconciliation of Non-GAAP Measures
Reconciliation of Non-GAAP Measures 4Q24 4Q23 FY24 FY23 Reconciliation of GAAP diluted earnings per share to non-GAAP diluted earnings per share* Diluted shares 9,006,014 9,417,166 9,250,245 9,335,983 GAAP diluted earnings per share $0.03 $0.23 $0.33 $3.13 Amortization of intangibles 0.07 0.09 0.27
Slide 30: Reconciliation of Non-GAAP Measures
Reconciliation of Non-GAAP Measures In 000s 4Q24 4Q23 FY24 FY23 Reconciliation of GAAP operating income to non-GAAP operating income Income from operations $3,519 $5,644 $18,805 $51,484 Amortization of intangibles 597 806 2,494 3,528 Impairment of assets 12,553 9,336 38,517 12,629 Settlement of laws
Slide 31: Reconciliation of Non-GAAP Measures
Reconciliation of Non-GAAP Measures Percentage of Total Revenues 4Q24 4Q23 FY24 FY23 Reconciliation of GAAP operating margin to non-GAAP operating margin* GAAP operating margin 4.8% 7.5% 6.4% 17.5% Amortization of intangibles 0.8% 1.1% 0.8% 1.2% Impairment of assets 17.1% 12.4% 13.0% 4.3% Settlement
Slide 32: Reconciliation of Non-GAAP Measures
Reconciliation of Non-GAAP Measures In 000s 4Q24 4Q23 FY24 FY23 Reconciliation of net cash provided by operating activities to free cash flow Net cash provided by operating activities $15,651 $12,126 $55,884 $59,130 Less: Maintenance capital expenditures 2,483 1,005 7,463 5,954 Free cash flow $13,16
Slide 33: Reconciliation of Non-GAAP Measures
Reconciliation of Non-GAAP Measures $ in 000s Nightclubs Bombshells Other Corporate Total 4Q24 Non-GAAP Segment Information Income (loss) from operations $13,064 $(2,517) $58 $(7,086) $3.519 Amortization of intangibles 576 11 -- 10 597 Impairment of assets 7,039 5,514 -- -- 12,553 Settlement of laws
Slide 34: Contact Information
Contact Information Corporate Office 10737 Cutten Road Houston, TX 77066 Phone: (281) 397-6730 Investor Relations Gary Fishman Steven Anreder Phone: (212) 532-3232 IR Website www.rcihospitality.com Nasdaq: RICK 34
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