Rci Hospitality Holdings, Inc. · NASDAQ:RICK
Rci Hospitality — Q3 2023 Earnings Presentation
26 slides from Rci Hospitality's earnings presentation, Aug 9, 2023
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 | 3Q23 Conference Call | August 9, 2023 | 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 (formerly Twitter) Spaces Instructions
X (formerly Twitter) Spaces Instructions • Go To: @RicksCEO on X: https://x.com/RicksCEO • Select this X Space: https://x.com/i/spaces/1kvJpmbgaWmxE • 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 •
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: Summary 3Q23 & 9M23 Results
Summary 3Q23 & 9M23 Results In Millions Except EPS 3Q23 3Q22 9M23 9M22 Total revenues $77.1 $70.7 $218.5 $196.2 GAAP EPS $0.96 $1.48 $2.91 $3.76 Non-GAAP EPS $1.30 $1.60 $3.80 $3.89 Net cash from operating activities $15.3 $18.9 $47.0 $46.8 Free cash flow $14.3 $18.0 $42.1 $44.4 Net income attributa
Slide 7: Key Takeaways
Key Takeaways 3Q23 EPS: 9M23 FCF & Adj. EBITDA 3Q23 Revenues: $0.96 GAAP Margins in line with 20% and Record $77.1M – Up 9% $1.30 Non-GAAP 30% targets, respectively 4Q23 To Date: Nightclubs Solid, Bombshells Profitable, Repurchased 10,440 shares 3Q23 SSS Decline a Bump Returning to Pre-Covid (avg. $
Slide 8: Nightclubs Performance
Nightclubs Performance $62.4 Total Revenues ($M) Operating Margin As % of Segment Revenues $56.6 $56.3 $57.0 60% $54.7 $46.8 $48.2 45% $41.0 $40.3 30% GAAP Non-GAAP 15% 0% 3Q21 4Q21 1Q22 2Q22 3Q22 4Q22 1Q23 2Q23 3Q23 3Q21 4Q21 1Q22 2Q22 3Q22 4Q22 1Q23 2Q23 3Q23 3Q23 vs. 3Q22 Locations Contributing t
Slide 9: Bombshells Performance
Bombshells Performance Total Revenues ($M) Operating Margin As % of Segment Revenues $16.1 40% $15.8 $15.3 $14.8 $14.4 $14.3 $14.4 $14.0 $13.4 30% 20% 10% GAAP Non-GAAP 0% 3Q21 4Q21 1Q22 2Q22 3Q22 4Q22 1Q23 2Q23 3Q23 3Q21 4Q21 1Q22 2Q22 3Q22 4Q22 1Q23 2Q23 3Q23 3Q23 vs. 3Q22 Locations Contributing t
Slide 10: Consolidated Operating Margin
Consolidated Operating Margin 60% $77.1 $80 Total Revenues ($M) GAAP Operating Margin (% Total Revenues) $70.7 $71.4 $71.5 $70.0 Non-GAAP Operating Margin (% Total Revenues) $70 50% $63.7 $61.8 $57.9 $60 $54.9 40% $50 $44.1 31.83% 31.16% 30.01% $38.4 28.4% 30% 26.9% 26.6% $40 25.9% 25.6% 25.6% 25.3%
Slide 11: Cash, FCF & Adjusted EBITDA ($M)
Cash, FCF & Adjusted EBITDA ($M) Cash $38.1 $37.5 As % of Total Revenues $35.7 $36.0 $34.1 35% 34% $29.1 35% 32% 31% 29% 30% 29% 29% $22.8 $23.6 $18.0 22% 25% 25%* 20% 21% 17% 19% 19% 15% FCF Adj. EBITDA 6/30/21 9/30/21 12/31/21 3/31/22 6/30/22 9/30/22 12/31/22 3/31/23 6/30/23 3Q21 4Q21 1Q22 2Q22 3Q
Slide 12: Debt Metrics
Debt Metrics Debt, Net of Loan Costs ($M) Debt Maturities as of 6/30/23 ($M) $246 $244 $211 $203 $188 Amortization Schedule $178 $162 Realty Balloon $26.8 Non-Realty Balloon $128 $125 $6.0 $15.8 $13.3 $1.6 $12.1 $12.5 $4.2 6/30/21 9/30/21 12/31/21 3/31/22 6/30/22 9/30/22 12/31/22 3/31/23 6/30/23 FY2
Slide 13: Debt Analysis (as of 6/30/23, $M)
Debt Analysis (as of 6/30/23, $M) Total of $246.91 Weighted Average Interest Rate (WAIR): 6.52% $74.3 Seller Financing (30.1% of total) • Secured by the respective clubs and real estate to which it applies • 5 Baby Dolls-Chicas Locas: $20.1 @ 7.0% WAIR • 11 Clubs: $18.3 @ 6.0% WAIR • Scarlett’s: $12
Slide 14: Capital Allocation Strategy
Capital Allocation Strategy* • Repurchase shares when FCF yield is more than 10% Buy Back Shares M&A Organic Buy More Methodically of the Right Expand Nightclubs Bombshells • Buy good, solid, cash Drive Value • Develop critical mass, flowing clubs at 3-5x market awareness, adjusted EBITDA with 10-15
Slide 15: 4Q23 & FY24 New Clubs, Bombshells & Casinos
4Q23 & FY24 New Clubs, Bombshells & Casinos Project Location Status (as of 8/9/23) • Remodeling completed in June Baby Dolls • Fort Worth, TX • Will benefit from full quarter of business in 4Q23 • Final stages of construction Bombshells • Stafford, TX • Anticipate opening September 2023 • Remodeling
Slide 16: EXPO 2023
EXPO 2023 https://theedexpo.com/ 16
Slide 17: Appendix
RCI HOSPITALITY Q) HOLDINGS INC Appendix
Slide 18: Reconciliation of Non-GAAP Measures
Reconciliation of Non-GAAP Measures In 000s 3Q23 3Q22 9M23 9M22 Reconciliation of GAAP net income to Adjusted EBITDA Net income attributable to RCIHH common $9,085 $13,902 $27,055 $35,429 stockholders Income tax expense 2,269 3,767 7,447 10,056 Interest expense, net 4,229 2,925 11,412 8,175 Settleme
Slide 19: Reconciliation of Non-GAAP Measures
Reconciliation of Non-GAAP Measures In 000s 3Q23 3Q22 9M23 9M22 Reconciliation of GAAP net income to non-GAAP net income Net income attributable to RCIHH common $9,085 $13,902 $27,055 $35,429 stockholders Amortization of intangibles 918 25 2,722 124 Settlement of lawsuits 63 132 3,183 709 Impairment
Slide 20: Reconciliation of Non-GAAP Measures
Reconciliation of Non-GAAP Measures 3Q23 3Q22 9M23 9M22 Reconciliation of GAAP diluted earnings per share to non-GAAP diluted earnings per share Diluted shares 9,430,225 9,389,675 9,308,624 9,428,461 GAAP diluted earnings per share $0.96 $1.48 $2.91 $3.76 Amortization of intangibles 0.10 0.00 0.29 0
Slide 21: Reconciliation of Non-GAAP Measures
Reconciliation of Non-GAAP Measures In 000s 3Q23 3Q22 9M23 9M22 Reconciliation of GAAP operating income to non-GAAP operating income Income from operations $15,515 $20,507 $45,840 $53,499 Amortization of intangibles 918 25 2,722 124 Settlement of lawsuits 63 132 3,183 709 Impairment of assets 2,631
Slide 22: Reconciliation of Non-GAAP Measures
Reconciliation of Non-GAAP Measures Percentage of Total Revenues 3Q23 3Q22 9M23 9M22 Reconciliation of GAAP operating margin to non-GAAP operating margin GAAP operating margin 20.1% 29.0% 21.0% 27.3% Amortization of intangibles 1.2% 0.0% 1.2% 0.1% Settlement of lawsuits 0.1% 0.2% 1.5% 0.4% Impairmen
Slide 23: Reconciliation of Non-GAAP Measures
Reconciliation of Non-GAAP Measures In 000s 3Q23 3Q22 9M23 9M22 Reconciliation of net cash provided by operating activities to free cash flow Net cash provided by operating activities $15,320 $18,893 $47,004 $46,754 Less: Maintenance capital expenditures 1,064 869 4,949 2,385 Free cash flow $14,256
Slide 24: Reconciliation of Non-GAAP Measures
Reconciliation of Non-GAAP Measures $ in 000s Nightclubs Bombshells Other Corporate Total 3Q23 Non-GAAP Segment Information Income (loss) from operations $20,392 $1,701 $ (300) $(6,278) $15,515 Amortization of intangibles 624 81 208 5 918 Settlement of lawsuits 57 6 — — 63 Impairment of assets 2,631
Slide 25: Reconciliation of Non-GAAP Measures
Reconciliation of Non-GAAP Measures $ in 000s Nightclubs Bombshells Other Corporate Total 3Q22 Non-GAAP Segment Information Income (loss) from operations $22,459 $3,065 $(82) $(4,935) $20,507 Amortization of intangibles 23 1 — 1 25 Settlement of lawsuits 124 8 — — 132 Impairment of assets 1,072 650
Slide 26: 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 26
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