RCI Hospitality Holdings, Inc. · NASDAQ:RICK
RCI Hospitality — NobleCon18 (April 2022)
15 slides from RCI Hospitality's conference presentation, Apr 20, 2022
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 NobleCon18 April 20-21, 2022 www.rcihospitality.com
Slide 2: 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 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: Strong Portfolio of Hospitality Venues
Strong Portfolio of Hospitality Venues • 60 well-managed, high cash-flowing bars and restaurants Overview • Founded in 1983 • IPO on Nasdaq in 1995 • Accounted for 73% of sales for TTM ended 12/31/21 Nightclubs • 49 clubs in 13 states, many in top 20 US markets • Well-known brands with restaurants •
Slide 5: Great Business
Great Business Total Revenues (TTM ended 12/31/21) Strong Cash Generation (TTM ended 12/31/21) • High gross profit margin (85.0%) Entertainment Alcoholic Beverages • Fast cash conversion cycle Services 30% 44% • Low maintenance capex ($6.3M) Barriers to Entry • Clubs: Most municipal licenses tied to
Slide 6: Capital Allocation Strategy
Capital Allocation Strategy* • Repurchase shares when FCF yield is more than 10% Buy Back Shares M&A Organic Buy More Methodically of the Right Expand Nightclubs Bombshells • Buy good, solid, cash Drive Value • Develop critical mass, flowing clubs at 3-5x market awareness, adjusted EBITDA with 10-15
Slide 7: Major Transformation
Major Transformation Changed Focused on Defined & Investing Highly Approach Disposing Growth of Adopted in the Right Scalable to Club of Under- Using Debt Revenue, Capital People, Cash Flow Purchases Performing vs. Equity not Free Allocation Systems & Growth & New Locations Cash Flow Strategy Proces
Slide 8: Impressive Track Record & Covid Rebound
Impressive Track Record & Covid Rebound Free Cash Flow ($M)1 $36.1 FCF as % of Revenues1 $33.3 18.4% 18.5% +16% +750 $23.2 CAGR $19.3 13.7% 14.0% BPS $18.5 13.3% $14.9 $13.5 11.0% 10.2% FY15 FY16 FY17 FY18 FY19 FY20 FY21 FY15 FY16 FY17 FY18 FY19 FY20 FY21 4Q Sales / Location ($K)2 Diluted Weighted A
Slide 9: Nightclubs: Roaring Back
Nightclubs: Roaring Back Revenues ($M) $149 Units at Year End $140 40 $137 37 38 38 37 $125 FY21 Captured Focus has 92% of Pre- been on COVID FY19 improving club Sales portfolio $88 FY17 FY18 FY19 FY20 FY21 FY17 FY18 FY19 FY20 FY21 Operating Margin Income from Operations ($M) 41% $56 36% $53 35% $51
Slide 10: Nightclubs: Significant Acquisition Opportunities
Nightclubs: Significant Acquisition Opportunities Market Our Top Club Brands • 2,200 clubs / ~500 meet our acquisition criteria Elegant clubs with restaurants • We are one of the largest, but our market share is minimal • Long-term owners interested in selling • We are the acquirer of choice as the
Slide 11: Harnessing New Technology to Drive Club Traffic
Harnessing New Technology to Drive Club Traffic • Bitcoin Acceptance • Tip-N-Strip NFT Guest Benefits Program • AdmireMe Mobile Friendly Website www.tip-n-strip.io www.admireme.com 11
Slide 12: Bombshells: Next Generation Sports Bar Concept
Bombshells: Next Generation Sports Bar Concept More Upscale High Impact Branding • Better quality food, service and experience • Immediately recognizable • Big HDTVs, scratch kitchen, free Wi-Fi, USB charging stations, DJs • Signals fun, friendliness and comfort to all walks of life • 4 Dayparts: Lu
Slide 13: Bombshells: FY21 Record Year
Bombshells: FY21 Record Year $56.6 Revenues ($M) Units at Year End 10 10 $43.2 8 +32% $30.8 6 CAGR $24.1 5 $18.8 FY17 FY18 FY19 FY20 FY21 FY17 FY18 FY19 FY20 FY21 $13.3 Operating Margin 23.4% Income from Operations ($M) 21.4% $9.2 +700 16.4% +44% BPS CAGR $3.1 8.5% $2.3 7.5% $2.0 FY17 FY18 FY19 FY20
Slide 14: Bombshells: Near- & Long-Term Targets
Bombshells: Near- & Long-Term Targets • Near-Term Company-Owned Locations Total Franchised Units – December 2021: Opened 11th store 6 Total Company-Owned Units – March 2022: Closed on property for 12th store – Under contract to buy property for 13th store – Actively looking for 7 new sites in Austin
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