Rci Hospitality Holdings, Inc. · NASDAQ:RICK
Rci Hospitality — Ricks Cabaret International — Investor Presentation (September 2009)
20 slides from Rci Hospitality's investor presentation, Sep 11, 2009
Slide 1: Rick's Cabaret
Slide 2: Safe Harbor
SAFE HARBOR • This presentation may contain forward-looking statements that are covered under the provisions of Section 27A of the Securities Act of 1933 regarding Safe Harbor statements. Forward-looking statements may involve revenue, income and other business activities of Rick's Cabaret. Actual r
Slide 3: Rick's Cabaret Overview
RICK’S CABARET OVERVIEW • Rick’s Cabaret is the Premier Operator of Upscale Gentlemen’s Clubs - 18 Clubs Nationwide • Key Brand: Rick’s Cabaret - - Upscale (7) • Other brands serving specific audiences: - Club Onyx - - Upscale African-American (4) - XTC Cabaret - - Blue-collar/College (5) - Tootsie’
Slide 4: RICK Snapshot
Market NASDAQ Global Shares Outstanding 9.4M Share Price Up Since 3/9/09: 225% Institutional Ownership 12% Insider Ownership 17% ‘RICK’ SNAPSHOT
Slide 5: Strong Operational Base
STRONG OPERATIONAL BASE • Financial Controls > System-wide proprietary cash management modelled on casino industry • Credit Cards > More than half of our sales • Entertainers > Independent Contractors who pay us a facilities use fee • Quality Control > Enhances brand value • Casino “Concierge” Model
Slide 6: Fiscal Year Financial Summary
Fiscal Year Financial Summary Revenues $13.9 $14.8 $24.5 $32.0 $59.9 44.2% y-o-y growth 7.0% 65.2% 30.7% 87.2% EBITDA 1.9 0.9 4.1 5.7 16.3 71.6% Margin % 13.5% 6.0% 16.8% 17.8% 27.1% Net Income 0.8 (0.2) 1.8 3.1 7.7 77.3% Margin % 5.6% (1.5%) 7.2% 9.5% 12.8% Number of Clubs FINANCIAL SUMMARY
Slide 7: Strong Performance, High Earnings Quality
STRONG PERFORMANCE HIGH EARNINGS QUALITY • High barriers to entry, low Industry cyclicality. • High earnings quality: steady, predictable margins. • Business model “recession resistant” • High EBITDA cash conversion.
Slide 8: How We Make Money
HOW, WETMAKE'MONEY, INTERNET - .077% ALCOHOL - 38.47% i MEDIA 1.175, FOOD & MERCH - 7.9% fh OTHER = 3.475, SERVICE = 48.47,
Slide 9: Cash Flow & Liquidity Summary
CASH FLOW & LIQUIDITY SUMMARY • Rick’s has sufficient cash flow to cover operating costs and interest, finance growth and repay debt. • Rick’s had $4.7 mm average liquidity quarterly. • Rick’s completed $7.2 mm raise August 2009.
Slide 10: Capitalization
CAPITALIZATION • Low leverage • Interest costs easily covered
Slide 11: Debt Profile
DEBT PROFILE • Common Stock Subject to Put Rights: Maximum $13.5 mm If Stock Price is Zero • Real Estate Backed Loans $15.3 mm, Will Be Retired by 2014 • Tootsie’s Cabaret Owner Purchase Note: $10mm @14% Due 11/30/ 2012 • Convert of August ’09 $7.2mm, Interest 10%, Convertible at $8.75 Payable Over
Slide 12: Our Consolidation Story
OUR CONSOLIDATION STORY • Much of Rick’s Growth Since 2005 has Been Through Acquisitions • Entry Into Major Markets > NYC, Miami, Las Vegas, Philadelphia, Dallas • NYC & Miami Clubs Are Our Home Runs • Cash On Hand and Demonstrated Ability to Raise Capital Are Powerful Tools • Leading Consolidation
Slide 13: Our First Big Buy: Midtown Manhattan Club
OUR FIRST BIG BUY: Acquired Midtown Manhattan Club in 2005 - Playboy.com says: “Best Strip Club in NYC” • Brought Wall Street Attention to RICK Stock • Investment Pros Got to See First Hand How Our Business Model Works • ‘Due Diligence’ Parties Becoming Legendary • Proximity to M.S.G. a Huge Plus •
Slide 14: Tootsie's Cabaret Miami Acquisition
• Acquired Nov. ’07 Transaction value: $25.5mm (2.2x EBITDA) • One of a kind: all nude with liquor ; • 74 ,000 sq ft on two levels; valet parking for 1,500 cars; open ‘til 6 am • Immediately accretive - highly profitable from day one; • Revenue Growth 25%+ over previous owner by upgrading VIP servic
Slide 15: Positive Developments: Las Vegas Club
Positive Developments • Acquired 25,000 sq. foot club, just off The Strip in September ‘08 • Economy plunged immediately after acquisition • Marketing Initiatives, High Margin VIP Focus , Catering to Locals and Cost controls are Having Positive Impact • Will be Strong Contributor as Vegas Market Tur
Slide 16: Dallas, Philly Conversions
Dallas,Philly Conversions BY ADDRESSING PROBLEMS, NEW ACQUISITIONS IN PHILLY & DALLAS ARE NOW PROFITABLE • Rick’s Philadelphia Converted to Club Onyx - Near All Pro Sports Stadiums ( Phillies , 76ers , Eagles , Flyers ) • Rick’s Dallas Converted to XTC Cabaret - Exceptional Club Near Sports Stadiums
Slide 17: Our Long-Term Growth Strategy
• Focus on core competency - - become top club in each market • Increase operating efficiency & raise gross margins • Leverage our strong marketing skills • Emphasize transparency, rigorous cash control • Build brand awareness/brand equity • Maintain lean operating system • Make strong, selective ac
Slide 18: Our Management Team
• IT executive, Director of Internet Division • Degree in Aeronautical Science from Texas State Technical College OUR MANAGEMENT TEAM • President, owner, and CPA of Pringle Jenkins & Associates, P.C. • BBA Degree (1979) from Texas A&M University Director Steven L. Jenkins Background Title Name • Not
Slide 19: Summary
SUMMARY • Attractive Industry > Big Clubs Thriving in Recession • Unique Business Model > Great Margins + Strong Financial Controls • Non-Capital Intensive > Strong Cash Flow • Significant Barriers to Entry Limit Competition * Strict Zoning Ordinances & * Tough Sexually Oriented Business (SOB) Licen
Slide 20: Thank You!
THANK YOU! PLEASE BE SURE TO VISIT A RICK’S CABARET CLUB ON YOUR NEXT TRIP TO NYC, MIAMI, LAS VEGAS, DALLAS, HOUSTON, CHARLOTTE, AUSTIN, SAN ANTONIO OR MINNEAPOLIS .
Ricks Cabaret International — Investor Presentation (September 2009) on 6ix