Rci Hospitality Holdings, Inc. · NASDAQ:RICK
Rci Hospitality — LD Micro Investor Conference 2015
28 slides from Rci Hospitality's conference presentation, Nov 30, 2015
Slide 1: LD Micro Investor Conference
NASDAQ: RICK LD Micro Investor Conference December 3, 2015 www.rcihospitality.com 2015 – 20 th Anniversary of RCI’s IPO Two decades of innovation in the adult club segment of the hospitality industry
Slide 2: Forward Looking Statements
2 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 to the safe harbor crea
Slide 3: Leader in Gentlemen's Clubs and Sports Bars/Restaurants
Leader in Gentlemen’s Clubs and Sports Bars/Restaurants 3 December 2015 Investor Presentation • Pioneered elegant gentlemen's clubs • Powerful brands, quality environments, beautiful entertainers, excellent restaurants • Since IPO, transformed RCI into a leading hospitality company • Subsidiaries ow
Slide 4: RICK Investment Catalysts
RICK Investment Catalysts 4 December 2015 Investor Presentation -20% 0% 20% 40% 60% 80% 100% 120% FY10 FY11 FY12 FY13 FY14 FY15 RICK Stock vs. Revenues & Non - GAAP EPS Stock Price @ 9/30 Revenues Non-GAAP EPS Since end of FY10 (9/30/10), stock has increased 43% vs. 93% for revenues and 97% for Non
Slide 5: Disciplined Capital Allocation Strategy
Disciplined Capital Allocation Strategy 5 December 2015 Investor Presentation After Tax Free Cash Flow Yield of Buying Back Shares* Annual Free Cash Flow (mm) $15.0 $15.0 $15.0 $15.0 $15.0 Stock Price $10.00 $11.00 $12.00 $13.00 $14.00 FD Shares at 6/30/15 with expected dilution from convertible sec
Slide 6: Adjusted EBITDA Growth
6 December 2015 Investor Presentation Adjusted EBITDA* Growth ($ in millions) $7.3 $9.4 $8.0 $7.6 $9.7 $10.2 $8.2 $0 $3 $6 $9 $12 1Q14 2Q14 3Q14 4Q14 1Q15 2Q15 3Q15 $18.0 $23.5 $24.0 $28.5 $32.5 $0 $10 $20 $30 $40 2010 2011 2012 2013 2014 • Reflects RCI’s cash generating power to buy back stock and
Slide 7: Undervaluation Spurs Share Buybacks
7 December 2015 Investor Presentation • 9M15 buyback spend exceeds FY12 • $6.6M of remaining Board authorization at 6/30/15 • FY16’s buyback spend will likely exceed FY11’s Undervaluation Spurs Share Buybacks ($ in millions) $3.3 $2.1 $1.6 $1.2 $2.3 $0 $1 $2 $3 $4 FY11 FY12 FY13 FY14 9M15 Capital Re
Slide 8: Major Legal Issues Behind Us
Major Legal Issues Behind Us 8 December 2015 Investor Presentation Item Resolution ($ in millions) NYS FLSA Lawsuit • Possible $20M or more judgement • Settled for a maximum of $15M in FY15; established $10.3M accrual • All contracts since 2011 contain no class action participation/arbitration claus
Slide 9: Margins & Cash Flow Expected to Grow in FY16 & Beyond
Margins & Cash Flow Expected to Grow in FY16 & Beyond 9 December 2015 Investor Presentation Item Details ($ in millions, % of revenues) Legal Costs • 2.6% of revenues in FY14 and 2.7% in 9M15 • Settlements plus new insurance reduces need for outside counsel • Cost expected to decline starting in FY1
Slide 10: Recent & Pending Bank Financings
10 December 2015 Investor Presentation Recent & Pending Bank Financings ($ in millions) Item Details Miami Gardens Square Mall Acquisition • Tootsie’s Cabaret is the largest tenant • Paid $15.3M ($4.0M cash, $11.3M bank loan at 5.45%) • 100% occupied, income producing, good management, 2nd largest t
Slide 11: Rent+Interest Falling
Rent+Interest Falling (as % of total revenues) December 2015 Investor Presentation 5.2 4.2 3.5 3.9 3.3 3.1 3.2 3.3 6.4 6.8 5.9 6.2 5.2 4.4 4.8 4.6 11.6 11.0 9.4 10.1 8.5 7.5 8.0 7.9 2 3 4 5 6 7 8 9 10 11 12 4Q13 1Q14 2Q14 3Q14 4Q14 1Q15 2Q15 3Q15 Rent Interest Rent+Interest RCI views Rent+Interest a
Slide 12: Nightclubs: Best in the Business
Nightclubs: Best in the Business 12 December 2015 Investor Presentation • Our subsidiaries own 38 of the best, most well run gentlemen’s clubs in the country • 27 (71%) in Texas, with different formats and customer bases • 11 (29%) mostly larger clubs outside of Texas, many of them with national rep
Slide 13: Nightclubs Segment Results
13 December 2015 Investor Presentation $ in millions 9M15 9M14 Change Revenues $93.6 $91.0 2.8% Units (at 6/30/15 and 6/30/14) 39 39 -- Adjusted Operating Income* $29.8 $29.5 1.0% Adjusted Operating Margin* 31.8% 32.3% (55 bps) Nightclubs Segment Results * See Appendix for reconciliation to GAAP
Slide 14: Nightclubs Future
Nightclubs Future 14 December 2015 Investor Presentation • Universe of ~500 clubs we would consider owning out of total ~3,500 US clubs • Many owners plan to retire in the years ahead • With increasing access to bank financing, we can consolidate the industry • Focus on club groups with market prese
Slide 15: Bombshells: We've Proven the Concept
Bombshells: We’ve Proven the Concept 15 December 2015 Investor Presentation • First military - themed franchise in the sports bar/casual dining segment • Theme comes alive through design strategy and Bombshell Girls • Feature local bands, DJs, large outdoor patios, and +75 flat screen TVs, complete
Slide 16: Bombshells Segment Results
16 December 2015 Investor Presentation $ in millions 9M15 9M14 Change Revenues $14.5 $3.7 4.0x Units 5 2 2.5x Operating Income $1.5 ($0.268) +$1.75 Operating Margin 10.2% (7.3%) +1751 bps Bombshells Segment Results Bombshells Future • Gradually roll out new units • Sell first franchises in FY16 • FY
Slide 17: Steady Total Revenue Growth
17 December 2015 Investor Presentation Steady Total Revenue Growth ($ in millions ) • 9M15: Up 14.7% YoY • FY10 - 14: 14.9% CAGR $74.1 $83.5 $95.2 $112.2 $129.2 $95.6 $109.7 $30 $55 $80 $105 $130 2010 2011 2012 2013 2014 9M14 9M15
Slide 18: Continued EPS Growth
18 December 2015 Investor Presentation Continued Non - GAAP EPS* Growth $0.76 $1.04 $1.05 $1.21 $1.25 $0.99 $1.22 $0.25 $0.50 $0.75 $1.00 $1.25 2010 2011 2012 2013 2014 9M14 9M15 • As of 9M15, we have earned nearly as much as all of FY14 • 9M15: Up 23.2% YoY • FY10 - 14: 13.3% CAGR * See Appendix fo
Slide 19: Summary: Why Invest in RICK?
Summary: Why Invest in RICK? 19 December 2015 Investor Presentation -20% 0% 20% 40% 60% 80% 100% 120% FY10 FY11 FY12 FY13 FY14 FY15 RICK Stock vs. Revenues & Non - GAAP EPS Stock Price @ 9/30 Revenues Non-GAAP EPS Since end of FY10 (9/30/10), stock has increased 43% vs. 93% for revenues and 97% for
Slide 20: Appendix
APPENDIX 2015 – 20 th Anniversary of RCI’s IPO Two decades of innovation in the adult club segment of the hospitality industry
Slide 21: Explanation of Terms
Explanation of Non - GAAP Terms In addition to our financial information presented in accordance with GAAP, management uses certain “non - GAAP financial measures ” within the meaning of the SEC Regulation G, to clarify and enhance understanding of past performance and prospects for the future. Gene
Slide 22: Annual Reconciliation Data
Annual Non - GAAP Reconciliation Data 22 December 2015 Investor Presentation (in thousands, except per share data) 2010 2011 2012 2013 2014 Reconciliation of GAAP net income to Adjusted EBITDA GAAP net income (7,958)$ 7,846$ 7,578$ 9,191$ 11,240$ Income tax expense 2,998 5,403 4,292 5,414 5,916 Inte
Slide 23: Annual Reconciliation Data (per share)
Annual Non - GAAP Reconciliation Data 23 December 2015 Investor Presentation (in thousands, except per share data) 2010 2011 2012 2013 2014 Reconciliation of GAAP diluted net income per share to non-GAAP diluted net income per share Fully diluted shares 9,697 9,932 9,697 9,615 10,637 GAAP net income
Slide 24: Quarterly Reconciliation Data
Quarterly Non - GAAP Reconciliation Data 24 December 2015 Investor Presentation (in thousands, except per share data) 1Q14 2Q14 3Q14 4Q14 1Q15 2Q15 3Q15 Reconciliation of GAAP net income to Adjusted EBITDA GAAP net income (loss) 2,404$ 3,722$ 691$ 4,424$ 3,360$ (2,841)$ 8,267$ Income tax expense 1,3
Slide 25: Quarterly Reconciliation Data (per share)
Quarterly Non - GAAP Reconciliation Data 25 December 2015 Investor Presentation (in thousands, except per share data) 1Q14 2Q14 3Q14 4Q14 1Q15 2Q15 3Q15 Reconciliation of GAAP diluted net income per share to non-GAAP diluted net income per share Fully diluted shares 9,855 10,853 9,968 11,014 10,929
Slide 26: Reconciliation Data for Nightclubs Segment
Non - GAAP Reconciliation Data for Nightclubs Segment 26 December 2015 Investor Presentation (in thousands) Reconciliation of Nightclubs GAAP operating income to non-GAAP operating income Nightclubs operating income $ 26,000 $ 25,947 Gain on settlement of Patron tax case (8,167) - Litigation and oth
Slide 27: Strong Management Team
Strong Management Team 27 December 2015 Investor Presentation Executive Background Eric Langan Chairman, CEO, President • President and CEO since 1999 • Involved in nightclub/restaurant business since 1989 • Acquired his first club at age 21 with proceeds from the sale of his baseball cards • Merged
Slide 28: Contact Information
Corporate Office 10959 Cutten Road Houston, TX 77066 Phone: (281) 397 - 6730 Investor Relations Gary Fishman Steven Anreder Phone: (212) 532 - 3232 IR Website www.rcihospitality.com NasdaqGM: RICK Contact Information 28 December 2015 Investor Presentation
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