Rci Hospitality Holdings, Inc. · NASDAQ:RICK
Rci Hospitality — Investor Presentation (May 2018)
15 slides from Rci Hospitality's investor presentation, May 16, 2018
Slide 1: RCI Hospitality Holdings Investor Presentation
RCI HOSPITALITY HOLDINGS INC The Innovator in Bar-Restaurant-Entertainment Themed Hospitality Nasdaq: RICK Investor Presentation May 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 to the safe harbor created
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 Overview Gentlemen’s : Clubs . Bombshells . Restaurants . Entertainment : Leader in gentlemen's clubs and sports bars/restaurants Founded 1983, Nasdaq IPO 1995 36 clubs — some of the industry's best — in 8 of Top 20 US markets Major brands: Rick’s, Tootsie’s, Scarlett’s, XTC, Jaguars,
Slide 5: 2. Great Business
2. Great Business Strong Cash Generation (FY17) + High gross profit margin (86%) + Fast inventory turnover (10x) Seana + Low maintenance capex ($1.8M) biting Clubs: Barriers to Entry + Most municipal licenses tied to physical location + Few municipalities issue new licenses + We have acquired ~80% o
Slide 6: 3. Capital Allocation Strategy
3. Capital Allocation Strategy 1. Buy/open new units or expand FCF Yield on Stock Price @ FCF of $23M existing ones if: + We can achieve target cash on cash return of at least 25-33% or acai 9.2% ATY retiring 12% debt @ new 23% ETR — Better than + There is a strategic rationale 12.59% buying stock a
Slide 7: 4. Free Cash Flow Scorecard
4. Free Cash Flow Scorecard* Starting FY16: Cash is King Free Cash Flow ($M) + FCF: Net cash provided by operating activities less maintenance capex + FY15-17: FCF up 29%, to $19.3M + FY18: Targeting 19% growth, to $23.0M Reduced FD Shares by 6% (4Q15-3Q17) * Share Buybacks o 1Q16-1Q17: Largest cont
Slide 8: Adjusted EBITDA Scorecard
Adjusted EBITDA Scorecard* Highlights Adjusted EBITDA ($M) + Significantly improved growth FY16-FY17 + 6M18 vs. 6M17: Up 37% to $23.5M FY14 FY15 FY16 FYIT Qssaw Ga can bp asa pm acs 8
Slide 9: 5. Financial Goals (3-5 Years)
5. Financial Goals (3-5 Years) c) om—-Qmiaradin Objective 3. RCI HOSPITALITY HOLDINGS INC 1. Clubs 2. Bombshells Capital Allocation FCF: Grow +50% to +$30M from $19.3M in FY17 Acquire more great clubs in the right markets Expand number of company-owned units 3 per year Build capital if we can’t find
Slide 10: 6. Clubs: Plenty of Room to Grow
6. Clubs: Plenty of Room to Grow Strategy * 2,200 clubs / ~500 meet our qualifications + While we are one of the largest, market share is < 2% Opportunity + Long-term owners interested in selling + Acquirer of choice: Only public company in the space plus access to bank financing + Buy earnings accr
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 concept in sports bars + Large venues (8K sq. ft.+ patio), full bar, scratch kitchen, big flat screen TVs, DJs + Attra
Slide 12: 8. Debt is Manageable
8. Debt is Manageable js in minions) Long-Term Debt Debt Maturities 6.66% Average Weighted Rate 3/31/18 % Total ™ Amortization Schedule Secured by Real Estate $86.0 67% Biteally Haloort = Non-Realty Balloon Scarlett’s Seller Financing $17.9 14% Parent (Includes $5.4 to buy Scarlett’s) $12.0 9% Secur
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 [snuiomsontrrsine | aase] vercre] ame] woven Total Revenues $41.2 19.4% $82.4 20.8% Nightclubs Segment $35.4 18.3% $70.7 19.3% Bombshells Segment $5.6 28.0% $11.4 31.8% Non-GAAP Operating Income” $10.6 38.2% $19.9 40.9% Adjusted EBITDA* $12.4 34.7% $23.5 36.5% Non-GAAP Net
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 Qaw 15
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