Rci Hospitality Holdings, Inc. · NASDAQ:RICK
Rci Hospitality — Q1 2024 Earnings Presentation
29 slides from Rci Hospitality's earnings presentation, Feb 8, 2024
Slide 1: Building a portfolio of well-managed, high cash-flowing nightclubs and sports-bar restaurants
Building a portfolio of well-managed, high cash-flowing nightclubs and sports-bar restaurants NASDAQ: RICK | 1Q24 Conference Call | February 8, 2024 | 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 • Log on to: X (formerly Twitter) • Go To: @RicksCEO on X: https://x.com/RicksCEO • Select this X Space: https://x.com/i/spaces/1ypKdknPlaqxW Or • To ask a question during Q&A: You will need to join the Space with a mobile phone • To listen only: You can join
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 Results
Summary Results In Millions Except EPS 1Q24 1Q23 Total revenues $73.9 $70.0 EPS $0.77 $1.11 Non-GAAP EPS* $0.87 $1.19 Net cash from operating activities $13.6 $14.9 Free cash flow* $12.7 $13.0 Net income attributable to RCIHH common shareholders $7.2 $10.2 Adjusted EBITDA* $17.5 $20.5 Weighted avera
Slide 7: Key Takeaways
Key Takeaways 1Q24 EPS $0.77, 1Q24 net cash from operating 1Q24 Revenues +5.6% Non-GAAP $0.87 activities & FCF held up well Relaunch of AdmireMe with Continued to make progress Continued to take advantage strategic partner in with new projects for FY24-25 & of low stock price online/mobile adult to
Slide 8: Nightclub Development
Nightclub Development Baby Dolls-Chicas Locas Acquisition • Record Sales: $8.7M in 1Q24, +10% from 4Q23 • Margin Improvement: 32.5% in 1Q24, +130 bps from 4Q23 and +260 from FY23 New Clubs Planned for FY24 • Lubbock (TX) replacement club: Near completion All-American Rock/Country • Baby Dolls Abilen
Slide 9: Casino Development
Casino Development Our Plans Overview1 Rick’s Cabaret Steakhouse & Casino • 30,000 square feet • Gaming License: In process • 4 floors • 200 slot machines • Liquor Licenses: In process • Tables: 1 craps, 1 roulette, • Anticipated Openings: FY24 2 blackjack, 2 house banked poker • Rick’s fine dining
Slide 10: AdmireMe Relaunch with Strategic Partner
AdmireMe Relaunch with Strategic Partner Overview • Agreement to relaunch AdmireMe under new name in our 3Q24 • Partner has long-term experience in online and mobile adult entertainment • 75-25% ownership split between us and partner Strategic Partner Adds Significant Resources • Internet platform w
Slide 11: Bombshells Development
Bombshells Development Newest Location • Bombshells Stafford (TX): Opened November 15 Anticipate Opening in FY24 • Rowlett (Dallas, TX): Signed $7.2M bank construction loan @ 8.5% • Lubbock (TX): Converting land loan into construction loan • Downtown Denver (CO): Awaiting final approval of building
Slide 12: Nightclubs Segment
Nightclubs Segment Total Revenues ($M) Operating Margin As % of Segment Revenues $62.4 60% $60.9 $61.0 $56.6 $56.3 $57.0 $54.7 45% $48.2 $46.8 30% 15% GAAP Non-GAAP 0% 1Q22 2Q22 3Q22 4Q22 1Q23 2Q23 3Q23 4Q23 1Q24 1Q22 2Q22 3Q22 4Q22 1Q23 2Q23 3Q23 4Q23 1Q24 1Q24 vs. 1Q23 ($M) Locations Contributing
Slide 13: Bombshells Segment
Bombshells Segment Total Revenues ($M) Operating Margin As % of Segment Revenues 40% $15.8 $15.3 $14.8 $14.3 $14.4 $14.0 $13.4 $13.6 30% $12.7 20% 10% GAAP Non-GAAP 0% 1Q22 2Q22 3Q22 4Q22 1Q23 2Q23 3Q23 4Q23 1Q24 1Q22 2Q22 3Q22 4Q22 1Q23 2Q23 3Q23 4Q23 1Q24 1Q24 vs. 1Q23 ($M) Locations Contributing
Slide 14: Consolidated Operating Income
Consolidated Operating Income $M* 1Q24 1Q23 Change Comment Revenues • $8.9 increase from acquisitions not in SSS Nightclubs $61.0 $56.3 $4.7 • $4.0 SSS decline • $2.1 increase from acquisitions and new location not in SSS Bombshells 12.7 13.4 (0.7) • $2.7 SSS decline Other 0.1 0.2 (0.1) 73.9 70.0 3.
Slide 15: GAAP Disclosure ($M)
GAAP Disclosure ($M) Operating Income Net Income $20.5 $18.0 $17.1 $16.9 $15.9 $15.5 $13.4 $13.9 $13.2 $10.6 $11.0 $10.6 $10.2 $9.1 $7.7 $7.2 $5.6 $2.2 1Q22 2Q22 3Q22 4Q22 1Q23 2Q23 3Q23 4Q23 1Q24 1Q22 2Q22 3Q22 4Q22 1Q23 2Q23 3Q23 4Q23 1Q24 Fiscal Year 2015 2016 2017 2018 2019 2020 2021 2022 2023 8
Slide 16: Cash, FCF & Adjusted EBITDA ($M)
Cash, FCF & Adjusted EBITDA ($M) Cash As % of Total Revenues $38.1 $37.5 $36.0 $34.1 35% 34% 31% 30% 29% 29% 29% 27% $22.8 $23.6 24% $21.0 $21.2 25% $18.0 25%* 20% 21% 17% 19% 19% 17% 15% FCF Adj. EBITDA 12/31/21 3/31/22 6/30/22 9/30/22 12/31/22 3/31/23 6/30/23 9/30/23 12/31/23 1Q22 2Q22 3Q22 4Q22 1
Slide 17: Debt Metrics
Debt Metrics Debt, Net of Loan Costs ($M) Debt Maturities as of 12/31/23 ($M) Amortization Schedule $246 $244 $240 $234 Realty Balloon $211 Non-Realty Balloon $203 $188 $178 $162 $7.9 $11.5 $9.1 $5.7 $5.3 $12.8 $13.5 $13.8 $14.1 $11.4 12/31/21 3/31/22 6/30/22 9/30/22 12/31/22 3/31/23 6/30/23 9/30/23
Slide 18: Debt Analysis (as of 12/31/23, $M)
Debt Analysis (as of 12/31/23, $M) Total of $237.0* Weighted Average Interest Rate (WAIR): 6.61% $71.5 Seller Financing (30.1% of total) • Secured by the respective clubs and real estate to which it applies • 5 Baby Dolls-Chicas Locas: $19.4 @ 7.0% WAIR • 11 Clubs: $17.8 @ 6.0% WAIR • Scarlett’s: $1
Slide 19: Capital Allocation Strategy Guides Our Growth
Capital Allocation Strategy Guides Our Growth* FY23 Allocation Share Buybacks • $2.2M cash deployed • 34,086 shares repurchased • Repurchase shares when • $65.22 average price/share FCF yield is more than 10% Share Nightclubs Buybacks • $77.9M capital deployed ($40.5M debt, $21.4M cash, $16.0M equit
Slide 20: Long-Term Performance
Long-Term Performance Fiscal Year ($M) 2015 2016 2017 2018 2019 2020 2021 2022 2023 8-Year CAGR Total Revenues $135.4 $134.9 $144.9 $165.7 $181.1 $132.3 $195.3 $267.6 $293.8 10.2% Adjusted EBITDA $34.1 $34.5 $37.3 $44.4 $46.2 $22.4 $60.2 $86.7 $85.0 12.1% % of Revenues 25.2% 25.6% 25.8% 26.8% 25.5%
Slide 21: Appendix
RCI HOSPITALITY HOLDINGS INC Appendix
Slide 22: Reconciliation of Non-GAAP Measures
Reconciliation of Non-GAAP Measures In 000s 1Q24 1Q23 Reconciliation of GAAP net income to Adjusted EBITDA Net income attributable to RCIHH common stockholders $7,226 $10,238 Income tax expense 1,799 3,031 Interest expense, net 4,122 3,596 Gain on sale of businesses and assets (3) (590) Depreciation
Slide 23: Reconciliation of Non-GAAP Measures
Reconciliation of Non-GAAP Measures In 000s 1Q24 1Q23 Reconciliation of GAAP net income to non-GAAP net income Net income attributable to RCIHH common stockholders $7,226 $10,238 Amortization of intangibles 659 695 Gain on sale of businesses and assets (3) (590) Gain on insurance — (64) Stock-based
Slide 24: Reconciliation of Non-GAAP Measures
Reconciliation of Non-GAAP Measures 1Q24 1Q23 Reconciliation of GAAP diluted earnings per share to non-GAAP diluted earnings per share Diluted shares 9,367,151 9,230,258 GAAP diluted earnings per share $0.77 $1.11 Amortization of intangibles 0.07 0.08 Gain on sale of businesses and assets 0.00 (0.06
Slide 25: Reconciliation of Non-GAAP Measures
Reconciliation of Non-GAAP Measures In 000s 1Q24 1Q23 Reconciliation of GAAP operating income to non-GAAP operating income Income from operations $13,165 $16,898 Amortization of intangibles 659 695 Gain on sale of businesses and assets (3) (590) Gain on insurance — (64) Stock-based compensation 470
Slide 26: Reconciliation of Non-GAAP Measures
Reconciliation of Non-GAAP Measures Percentage of Total Revenues 1Q24 1Q23 Reconciliation of GAAP operating margin to non-GAAP operating margin Income from operations 17.8% 24.2% Amortization of intangibles 0.9% 1.0% Gain on sale of businesses and assets (0.0)% (0.8)% Gain on insurance 0.0% (0.1)% S
Slide 27: Reconciliation of Non-GAAP Measures
Reconciliation of Non-GAAP Measures In 000s 1Q24 1Q23 Reconciliation of net cash provided by operating activities to free cash flow Net cash provided by operating activities $13,633 $14,895 Less: Maintenance capital expenditures 983 1,864 Free cash flow $12,650 $13,031 27
Slide 28: Reconciliation of Non-GAAP Measures
Reconciliation of Non-GAAP Measures $ in 000s Nightclubs Bombshells Other Corporate Total 1Q24 Non-GAAP Segment Information Income (loss) from operations $20,369 $86 $(196) $(7,094) $13,165 Amortization of intangibles 591 63 — 5 659 Gain on sale of businesses and assets (1) — — (2) (3) Stock-based c
Slide 29: 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 29
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