Rci Hospitality Holdings, Inc. · NASDAQ:RICK
Rci Hospitality — Q4 2022 Earnings Presentation
20 slides from Rci Hospitality's earnings presentation, Dec 14, 2022
Slide 1: Building a portfolio of well-managed, high cash-flowing nightclubs and restaurants
Building a portfolio of well-managed, high cash-flowing nightclubs and restaurants NASDAQ: RICK | 4Q22 Conference Call | December 14, 2022 | 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: Twitter Spaces Instructions
Twitter Spaces Instructions • Go To: @RicksCEO on Twitter: https://twitter.com/RicksCEO • Select this Twitter Space: https://twitter.com/i/spaces/1PlJQpoNQVaGE • 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
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: Today's News
Today’s News1 • Total Revenues: $71.4M +29.9% • EPS: $1.15 +342.3% / Non-GAAP EPS2: $1.45 -8.2% 4Q22 • Net Cash from Operating Activities: $17.8M +81.7% Highlights • Free Cash Flow2: $14.5M +71.6% • Net Income3: $10.6M +361.4% • Adjusted EBITDA2: $24.2M +37.8% • Total Revenues: $267.6M +37.1% • EPS:
Slide 7: Impressive Track Record Since Implementing Capital Allocation Strategy End of FY15
Impressive Track Record Since Implementing Capital Allocation Strategy End of FY15 Free Cash Flow ($M)1 $58.9 FCF as % of Revenues1 22.0% +22% 18.4% 18.5% +1,100 $36.1 CAGR $33.3 BPS 13.7% 14.0% $23.2 13.3% $18.5 $19.3 $14.9 11.0% $13.5 10.2% FY15 FY16 FY17 FY18 FY19 FY20 FY21 FY22 FY15 FY16 FY17 FY
Slide 8: Nightclubs Segment
Nightclubs Segment $56.6 Revenues ($M) $54.7 Operating Margin As % of Segment Revenues $46.8 $48.2 GAAP Non-GAAP $41.0 $40.3 55% $30.8 40% $25.2 25% $13.1 10% -5% 4Q20 1Q21 2Q21 3Q21 4Q21 1Q22 2Q22 3Q22 4Q22 4Q20 1Q21 2Q21 3Q21 4Q21 1Q22 2Q22 3Q22 4Q22 • 4Q22 Results Period Location Status – Revenue
Slide 9: Bombshells Segment
Bombshells Segment Revenues ($M) Operating Margin As % of Segment Revenues $16.1 $15.8 $15.5 $15.3 $14.8 GAAP Non-GAAP $14.4 $14.0 40% $13.0 $13.1 30% 20% 10% 0% 4Q20 1Q21 2Q21 3Q21 4Q21 1Q22 2Q22 3Q22 4Q22 4Q20 1Q21 2Q21 3Q21 4Q21 1Q22 2Q22 3Q22 4Q22 • 4Q22 Results Period Location Status – Revenues
Slide 10: Analysis of Consolidated Statement of Operations
Analysis of Consolidated Statement of Operations Line Item 4Q22 vs. 4Q21 (% of sales) 4Q22 Comment Cost of Goods 12.9% vs. 14.9% • Increase in sales mix of higher-margin service revenues (36.5% vs. 31.0%) Salaries & Wages 25.3% vs. 25.6% • Included expenses related to newly acquired and reopened loc
Slide 11: Cash, FCF & Adjusted EBITDA ($M)
Cash, FCF & Adjusted EBITDA ($M) $38.1 $37.5 Cash $35.7 $36.0 As % of Total Revenues* 35% 35% $29.1 34% 31% 32% 31% 29% $20.2 23% $17.0 $18.0 $15.6 25% 25% 22% 20% 20% 15% 17% 12% 15% 15% FCF Adj. EBITDA 9/30/20 12/31/20 3/31/21 6/30/21 9/30/21 12/31/21 3/31/22 6/30/22 9/30/22 4Q20 1Q21 2Q21 3Q21 4Q
Slide 12: Debt & Related Metrics
Debt & Related Metrics Debt, Net of Loan Costs ($M) $203 Weighted Average Interest Rate on Debt $188 $178 $162 $141 $135 $132 6.73% 6.72% 6.78% $128 $125 6.54% 6.35% 5.64% 9/30/20 12/31/20 3/31/21 6/30/21 9/30/21 12/31/21 3/31/22 6/30/22 9/30/22 4Q17 4Q18 4Q19 4Q20 4Q21 4Q22 Total Occupancy Costs As
Slide 13: Debt Analysis (as of 9/30/22)
Debt Analysis (as of 9/30/22, $ in millions) Total of $205.81 Weighted Average Interest Rate (WAIR): 6.35% $55.0 Seller Financing (26.7% of total) • Secured by the respective clubs and real estate to which it applies • 11 Clubs: $19.1 @ 6.0% WAIR • Scarlett’s: $13.4 @ 8.0% WAIR • Mansion: $0.9 @ 4.0
Slide 14: Capital Allocation Strategy
Capital Allocation Strategy* FY22 • Repurchase shares when • $15.1M cash deployed FCF yield is more than 10% • 268,185 shares repurchased Buy Back • $56.29 average price/share Shares M&A Organic Buy More Methodically of the Right Expand FY22 • $141.8M capital deployed Nightclubs Bombshells FY22 ($45
Slide 15: Baby Dolls and Chicas Locas
Baby Dolls and Chicas Locas • Signed definitive acquisition agreements • 2 Baby Dolls and 3 Chicas Locas adult nightclubs and real estate 5 Club • Well-established, well-run, classic Texas gentlemen’s clubs Acquisition • Located in Dallas-Fort Worth and Houston • Expect January 2023 close $66.5M • $
Slide 16: Rick's Cabaret Steakhouse & Casino
Rick’s Cabaret Steakhouse & Casino The • 4-story, 30,000 sq-ft building in historic Central City, CO Acquisition • Paid $2.4M cash for property The • 1 of 3 Colorado cities with legalized gambling Central City • $1B wagered on slots Market1 • Generated +$80M in adjusted gross proceeds • Club with a
Slide 17: Other Club Acquisitions & Openings
Other Club Acquisitions & Openings 1Q22 2Q22 3Q22 4Q22 1Q23 2Q23 3Q23 4Q23 Oct-Dec 21 Jan-Mar 22 Apr-Jun 22 Jul-Sep 22 Oct-Dec 22 Jan-Mar 23 Apr-Jun 23 Jul-Sep 23 Heartbreakers – Acquired Oct 22 Scarlett’s Cabaret San Antonio – Opened Sep 22 • Reformatted PT’s Showclub Odessa – Opened Aug 22 San Ant
Slide 18: Bombshells Development
Bombshells Development Company Owned Number Location Status (as of 12/14/22) Target Opening 12 Stafford (9th Houston area location) Construction started FY24 13 Rowlett (3rd Dallas area location) Building permit applied for FY24 14 Austin, TX (2nd location in market) Building permit applied for FY24
Slide 19: Geographic Focus
Geographic Focus • Circle sizes based on 4Q22 revenues • Some circles combine multiple locations 19
Slide 20: 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 20
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