Rci Hospitality Holdings, Inc. · NASDAQ:RICK
Rci Hospitality — Q3 2022 Earnings Presentation
19 slides from Rci Hospitality's earnings presentation, Aug 9, 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, 3Q22 Conference Call, August 9, 2022, www.rcihospitality.com
Slide 2: Today's Speakers
Today’s Speakers Mark Moran Eric Langan Bradley Chhay CEO President & CEO Chief Financial Officer Equity Animal RCI Hospitality Holdings, Inc. RCI Hospitality Holdings, Inc. @itsmarkmoran @RicksCEO @BradleyChhay 2
Slide 3: Twitter Spaces Instructions
Twitter Spaces Instructions • Go to @RicksCEO on Twitter: https://twitter.com/RicksCEO • Select this Twitter Space: https://twitter.com/i/spaces/1PlJQabdPNqJE • To ask a question during the Q&A, you will need to join the Space with a mobile phone • If you want to listen only, you can join the Space
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: Today's News
Today’s News1 • Total Revenues: $70.7M +22.2% • EPS: $1.48 +8.0% / Non-GAAP EPS2: $1.60 +18.0% 3Q22 • Net Cash from Operating Activities: $18.9M +26.2% Financial • Free Cash Flow2: $18.0M +39.1% Highlights • Net Income3: $13.9M +13.0% • Adjusted EBITDA2: $24.6M +20.6% • First period since 1Q20 that
Slide 7: Nightclubs Segment
Nightclubs Segment Revenues ($M) $54.7 Operating Margin As % of Segment Revenues $46.8 $48.2 60% GAAP Non-GAAP $41.0 $40.3 40% $30.8 20% $25.2 0% $13.1 -20% $6.0 -40% -60% 3Q20 4Q20 1Q21 2Q21 3Q21 4Q21 1Q22 2Q22 3Q22 3Q20 4Q20 1Q21 2Q21 3Q21 4Q21 1Q22 2Q22 3Q22 • 3Q22 Analysis Period Location Status
Slide 8: Nightclubs & Service Revenue Trends
Nightclubs & Service Revenue Trends Nightclubs Revenues as % of Consolidated Revenues 78.2% 77.6% 77.3% 75.7% 75.6% 73.4% 69.9% 70.9% 65.6% 45.6% 40.8% 1Q20 2Q20 3Q20 4Q20 1Q21 2Q21 3Q21 4Q21 1Q22 2Q22 3Q22 Service Revenues as % of Consolidated Revenues 35.5% 35.5% 36.0% 33.8% 33.8% 31.0% 29.2% 26.2
Slide 9: Bombshells Segment
Bombshells Segment Revenues ($M) Operating Margin As % of Segment Revenues $16.1 $15.8 $15.5 $15.3 $14.8 42% GAAP Non-GAAP $14.4 $13.0 $13.1 35% 28% 21% $8.5 14% 7% 0% 3Q20 4Q20 1Q21 2Q21 3Q21 4Q21 1Q22 2Q22 3Q22 3Q20 4Q20 1Q21 2Q21 3Q21 4Q21 1Q22 2Q22 3Q22 • 3Q22 Analysis Period Location Status – T
Slide 10: Analysis of Consolidated Statement of Operations
Analysis of Consolidated Statement of Operations Line Item 3Q22 vs. 3Q21 (% of sales) 3Q22 Comment Cost of Goods 13.0% vs. 15.3% Increase in sales mix of higher-margin service revenues Salaries & Wages 24.6% vs. 24.0% Additional staff from acquired clubs and increased minimum wage in some states SG&
Slide 11: Cash, FCF & Adjusted EBITDA ($M)
Cash, FCF & Adjusted EBITDA ($M) $38.1 $37.5 Cash $35.7 As % of Total Revenues* 35% 35% 31% 32% 31% $29.1 29% 23% 25% $20.2 15% 25% 22% $18.0 20% $17.0 17% $14.8 $15.6 15% 15% 12% 1% FCF Adj. EBITDA -13% 6/30/20 9/30/20 12/31/20 3/31/21 6/30/21 9/30/21 12/31/21 3/31/22 6/30/22 3Q20 4Q20 1Q21 2Q21 3Q
Slide 12: Debt & Related Metrics
Debt & Related Metrics Debt, Net of Loan Costs ($M) $188 Weighted Average Interest Rate on Debt $178 $162 7.37% $143 $141 $135 $132 $128 $125 6.79% 6.71% 6.68% 6.55% 6.35% 6/30/20 9/30/20 12/31/20 3/31/21 6/30/21 9/30/21 12/31/21 3/31/22 6/30/22 3Q17 3Q18 3Q19 3Q20 3Q21 3Q22 Total Occupancy Costs As
Slide 13: Debt Analysis (as of 6/30/22, $ in millions)
Debt Analysis (as of 6/30/22, $ in millions) Total of $189.81 Weighted Average Interest Rate (WAIR): 6.35% $45.0 Seller Financing (23.7% of total) • Secured by the respective clubs • 11 Clubs: $19.4 @ 6.0% WAIR • Scarlett’s: $13.7 @ 7.34% WAIR • Mansion: $0.9 @ 4.00% WAIR • Playmates: $11.0 @ 10.0%
Slide 14: Capital Allocation Strategy
Capital Allocation Strategy1 FY22 as of 8/5/22: • Repurchase shares when • $14.3M cash deployed FCF yield is more than 10% • 255,962 shares repurchased Buy Back • $55.91 average price/share Shares M&A Organic Buy More Methodically of the Right Expand FY22 to Date: • $141.8M capital deployed Nightclu
Slide 15: Growth & Capital Initiatives
Growth & Capital Initiatives Nightclubs Bombshells Capital 12 Club Acquisitions Bombshells Arlington (11th location) $7M Acquisition of Scarlett’s Miami Property Purchased Oct-Nov 2021 Opened late 1Q22 1Q22 Scarlett’s Cabaret Louisiana Bombshells Stafford (12th) $18.7M Bank Real Estate Loan Rebuilt/
Slide 16: Club & Bombshells Geographic Focus
Club & Bombshells Geographic Focus • Circle sizes based on 3Q22 revenues • Some circles combine multiple locations 16
Slide 17: New Technology to Drive Club Traffic
New Technology to Drive Club Traffic • Bitcoin Acceptance at Selected Locations • Tip-N-Strip NFT Guest Benefits Program • AdmireMe.com Mobile Friendly Website www.tip-n-strip.io www.admireme.com 17
Slide 18: Q&A
Q&A 2022 The Gentlemen’s Club Resort & Casino August 14-17 18
Slide 19: 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 19
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