Rci Hospitality Holdings, Inc. · NASDAQ:RICK
Rci Hospitality — Investor Presentation (March 2018)
15 slides from Rci Hospitality's investor presentation, Mar 28, 2018
Slide 1: RCI Hospitality Holdings Inc Investor Presentation
RCI HOSPITALITY HOLDINGS INC The Innovator in Bar-Restaurant-Entertainment Themed Hospitality Nasdaq: RICK Investor Presentation March 2018 www.rcihospitality.com
Slide 2: Forward-Looking Statements
Forward-Looking Statements Certain statements contained in this presentation regarding RCI Hospitality future operating results or performance or business plans or prospects and any other statements not constituting historical fact are “forward-looking statements" subject tothe safe harbor created b
Slide 3: 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 4: 1. What We Do
1. What We Do + Leaderin gentlemen's clubs and sports bars/restaurants + Founded 1983, Nasdaq IPO 1995 Overview Gentlemen’s * 36 clubs— some ofthe industry's best— in 8 of Top 20 US markets Clubs + Major brands: Rick’s, Tootsie’s, Scarlett’s, XTC, Jaguars, Club Onyx Bombshells + Fast-growing, 5-unit
Slide 5: 2. Great Business
2. Great Business Strong Cash Generation (FY17) Total Revenues (FY17) + High gross profit margin (86%) + Fast inventory turnover (10x) Eatagenment gecnaes 40% 42% + Low maintenance capex ($1.8M) Clubs: Barriers to Entry + Most municipal licenses tied to physical location + Few municipalities issue n
Slide 6: 3. Capital Allocation Strategy
3. Capital Allocation Strategy 1. Buy/open new units or expand FCF Yield on Stock Price @ FCF of $23M existing ones if: + We can achieve target cash on cash return of at least 25-33% or + There is a strategic rationale 9.2% ATY retiring 12% debt @ new 23% ETR — Better than buying stock above $26 2.
Slide 7: 4. Free Cash Flow Scorecard
4. Free Cash Flow Scorecard* Starting FY16: Cashis King Free Cash Flow ($M) + FCF: Net cash provided by operating activities less maintenance capex + FY15-17: FCF up 29%, to $19.3M + FY18: Targeting 19% growth, to $23.0M Reduced FD Shares by 6% (4Q15-3Q17) + Share Buybacks © 1Q16-1Q17: Largest conti
Slide 8: Adjusted EBITDA Scorecard
Adjusted EBITDA Scorecard* Highlights Adjusted EBITDA ($M) * Significantly improved growth FY16-FY17 (2) * 1Q18vs. 1Q17: Up 39% to $11.1M (1) FY14 FIs FY16 FYIT DILLEY -re eve mens ae tee een cpt 8
Slide 9: 5. Financial Goals (3-5 Years)
5. Financial Goals (3-5 Years) Objective FCF: Grow +50% to +$30M from $19.3M in FY17 1. Clubs Acquire more great clubs in the right markets 2. Bombshells Expand number of company-owned units 3 per year Build capital if can’t find right acquisitions or Bombshells 3. Focus " locations om—-Qgomaradin Q
Slide 10: 6. Clubs: Plenty of Room to Grow
6. Clubs: Plenty of Room to Grow Strategy Our Top Club Brands * 2,200 clubs/ ~500 meet our qualifications . | Elegant clubs with + While we are one of the largest, market share is < 2% restaurants Opportunity + Long-term owners interested in selling + Acquirer of choice: Only public company in the s
Slide 11: 7. Bombshells: Can Be Explosive
7. Bombshells: Can Be Explosive Strategy + Develop 80-100 units (20% RCl-owned/ 80% franchised ) + Focus on company-owned to build critical mass Opportunity + First military-themed conceptin sports bars + Large venues (8K sq. ft.+ patio), full bar, scratch kitchen, big flat screen TVs, DJs + Attract
Slide 12: 8. Debt is Manageable
8. Debt is Manageable ¢s in mitions) Long-Term Debt Debt Maturities 6.73% Average Weighted Rate FY17 — % Total = Amortization Schedule Secured by Real Estate $84.0 66% p Really Balioon = NonRealty Balloon Scarlett's Seller Financing $18.4 14% Parent (Includes $5.4 to buy Scarlett's) $122 10% Secured
Slide 13: 9. High Cash Return Models
9. High Cash Return Models St. Louis Assets, $4.2M, low EBITDA multiple, 2017 + All cash up front for open, closed, and unbuilt clubs + Included unencumbered real estate + Within target 25-33% ROI range Scarlett's Cabaret Miami, $25.9M, 4x EBITDA, 2017 + Nearby competitors shut down shortly before a
Slide 14: 10. FY18 Off to Good Start
10. FY18 Off to Good Start ic) 1918 (vs. 117) 2018 (ends 3/31/48) Bombshells Restaurants New Tax Legislation RCI HOSPITALITY HOLDINGS INC “For GAAP resonslaton, see the company's earings neus releases onthe company's website at ww ih.com. Revenues up 22% (16% from new units, 7% from same-stores) Non
Slide 15: 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 16
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