Rci Hospitality Holdings, Inc. · NASDAQ:RICK
Rci Hospitality — Q3 2024 Earnings Presentation
29 slides from Rci Hospitality's earnings presentation, Aug 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 | 3Q24 Conference Call | August 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 Spaces Instructions
X Spaces Instructions • Log in to: X (formerly Twitter) • Go To: @RicksCEO on X: https://x.com/RicksCEO • Select this X Space: https://x.com/RicksCEO/status/1821258346877612301 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 the S
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: Key Takeaways
Key Takeaways • Nightclubs same store sales increased – first time since 2Q23 3Q24 • Bombshells revenues improved second quarter in a row Results • Core margins (excluding impairments) improved from last quarter • Continued to open more locations New Project • Efforts focused on developing new locat
Slide 7: Strategic Share Buybacks & Issuance
Strategic Share Buybacks & Issuance Average Cumulative Shares Used Value of Shares Repurchased Value Per Fiscal Year Price Per Shares for Used for Shares Share Share Repurchased Acquisitions Acquisitions 2015 225,280 $10.19 225,280 2016 747,081 $9.79 972,361 2017 89,685 $12.25 1,062,046 2018 -- -- 2
Slide 8: Working on 5-Year Strategic Plan
Working on 5-Year Strategic Plan • Make sure all our locations are running as efficiently and profitably as possible • Our priorities Back to Basics – Grow SSS – Improve margins – Rebrand and reformat underperforming locations • +$200-250M of free cash flow to deploy over the next 5 years, assuming
Slide 9: Summary Results
Summary Results In Millions Except EPS 3Q24 3Q23 9M24 9M23 Total revenues $76.2 $77.1 $222.4 $218.5 EPS $(0.56) $0.96 $0.30 $2.91 Non-GAAP EPS* $1.35 $1.30 $3.11 $3.80 Other charges, net $18.3 $2.6 $26.5 $5.7 Net cash provided by operating activities $15.8 $15.3 $40.2 $47.0 Free cash flow* $13.8 $14
Slide 10: Nightclubs Segment
Nightclubs Segment Total Revenues ($M) Operating Margin As % of Segment Revenues $62.4 $62.8 60% $60.9 $61.0 $59.4 $56.6 $56.3 $57.0 48% $54.7 36% 24% 12% GAAP Non-GAAP 0% 3Q22 4Q22 1Q23 2Q23 3Q23 4Q23 1Q24 2Q24 3Q24 3Q22 4Q22 1Q23 2Q23 3Q23 4Q23 1Q24 2Q24 3Q24 3Q24 vs. 3Q23 ($M) Locations Contribut
Slide 11: Bombshells Segment
Bombshells Segment Total Revenues ($M) Operating Margin As % of Segment Revenues $15.8 20% $14.3 $14.4 $14.0 $13.4 $13.6 2% $13.1 Difference $12.7 $12.8 reflects -16% $10.3M impairment -34% GAAP Non-GAAP -52% -70% 3Q22 4Q22 1Q23 2Q23 3Q23 4Q23 1Q24 2Q24 3Q24 3Q22 4Q22 1Q23 2Q23 3Q23 4Q23 1Q24 2Q24 3
Slide 12: Corporate Segment
Corporate Segment Expense ($M) Expense Margin As % of Total Revenues GAAP Non-GAAP 15% $7.5 $7.1 $7.2 $6.9 $6.8 $6.8 $6.6 $6.6 12% $6.2 $6.3 $6.3 $6.3 $6.3 $5.8 $5.5 $4.9 $4.9 9% $4.6 6% 3% GAAP Non-GAAP 0% 3Q22 4Q22 1Q23 2Q23 3Q23 4Q23 1Q24 2Q24 3Q24 3Q22 4Q22 1Q23 2Q23 3Q23 4Q23 1Q24 2Q24 3Q24 3Q2
Slide 13: Consolidated Operating Income 3Q24 vs. 2Q24
Consolidated Operating Income 3Q24 vs. 2Q24 $M* 3Q24 2Q24 Change Location Weather 3Q24 4Q24** Revenues Closure Days Nightclubs $62.8 $59.4 $3.4 Clubs 1 10 Bombshells 13.1 12.8 0.3 Bombshells 12 26 Other 0.2 0.1 0.1 Total 76.2 72.3 3.9 GAAP Income (loss) from operations Nightclubs 13.6 11.0 2.6 Bombs
Slide 14: GAAP Disclosure ($M)
GAAP Disclosure ($M) Quarter 3Q22 4Q22 1Q23 2Q23 3Q23 4Q23 1Q24 2Q24 3Q24 Operating income $20.5 $18.0 $16.9 $13.4 $15.5 $5.6 $13.2 $4.7 ($2.5) Net cash provided by operating activities $18.9 $17.8 $14.9 $16.8 $15.3 $12.1 $13.6 $10.8 $15.8 Net income $13.9 $10.6 $10.2 $7.7 $9.1 $2.2 $7.2 $0.8 ($5.2)
Slide 15: Cash, FCF & Adjusted EBITDA ($M)
Cash, FCF & Adjusted EBITDA ($M) Cash As % of Total Revenues $37.5 $36.0 $34.9 $34.1 34% 35% 30% 29% 29% 27% 26% $23.6 24% 24% $22.8 25%* $21.0 $21.2 $20.0 20% 21% 19% 19% 18% 17% 15% 12% FCF Adj. EBITDA 6/30/22 9/30/22 12/31/22 3/31/23 6/30/23 9/30/23 12/31/23 3/31/24 6/30/24 3Q22 4Q22 1Q23 2Q23 3Q
Slide 16: Debt Metrics
Debt Metrics Debt, Net of Loan Costs ($M) Debt Maturities at 6/30/24 ($M) Amortization Schedule $246 $244 $240 $245 $234 $232 Realty Balloon $211 Non-Realty Balloon $203 $188 $7.9 $9.1 $9.9 $5.7 $5.3 $13.0 $13.9 $14.8 $15.2 $4.4 6/30/22 9/30/22 12/31/22 3/31/23 6/30/23 9/30/23 12/31/23 3/31/24 6/30/
Slide 17: Debt Analysis (at 6/30/24, $M)
Debt Analysis (at 6/30/24, $M) Total of $248.4* Weighted Average Interest Rate (WAIR): 6.74% $68.5 Seller Financing (27.6% of total) • Secured by the respective clubs and real estate to which it applies • 5 Baby Dolls-Chicas Locas: $18.6 @ 7.0% WAIR • 11 Clubs: $17.2 @ 6.0% WAIR • Scarlett’s: $11.2
Slide 18: Capital Allocation Strategy Guides Our Growth
Capital Allocation Strategy Guides Our Growth* • Repurchase shares when FCF yield is more than 10% Share Buybacks Mergers & Organic Acquisitions Growth • Buy good, solid, cash Drive Value • Structure investments flowing clubs at 3-5x in new units to adjusted EBITDA with 10-15% generate annual cash •
Slide 19: Development Update
Development Update Project Location Status Bombshells Stafford, TX • Opened November 2023 PT’s Centerfold Lubbock, TX • Opened March 2024 (BYOB) Scarlett’s Cabaret Denver Glendale, CO • 4 AM liquor license approved late March 2024 Baby Dolls (rebranded) Tye, TX • Opened April 2024 (liquor) Dallas Sh
Slide 20: Long-Term Performance
Long-Term Performance Fiscal Year ($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 3Q24 3Q23 9M24 9M23 Reconciliation of GAAP net income (loss) to Adjusted EBITDA Net income (loss) attributable to RCIHH common stockholders $(5,233) $9,085 $2,767 $27,055 Income tax expense (1,426) 2,269 378 7,447 Interest expense, net 4,110 4,229 12,135 1
Slide 23: Reconciliation of Non-GAAP Measures
Reconciliation of Non-GAAP Measures In 000s 3Q24 3Q23 9M24 9M23 Reconciliation of GAAP net income (loss) to non-GAAP net income* Net income (loss) attributable to RCIHH common stockholders $(5,233) $9,085 $2,767 $27,055 Amortization of intangibles 598 918 1,897 2,722 Impairment of assets 17,931 2,63
Slide 24: Reconciliation of Non-GAAP Measures
Reconciliation of Non-GAAP Measures 3Q24 3Q23 9M24 9M23 Reconciliation of GAAP diluted earnings per share to non-GAAP diluted earnings per share* Diluted shares 9,278,921 9,430,225 9,332,249 9,308,624 GAAP diluted earnings per share $(0.56) $0.96 $(0.30) $2.91 Amortization of intangibles 0.06 0.10 0
Slide 25: Reconciliation of Non-GAAP Measures
Reconciliation of Non-GAAP Measures In 000s 3Q24 3Q23 9M24 9M23 Reconciliation of GAAP operating income to non-GAAP operating income Income (loss) from operations $(2.536) $15,515 $15,286 $45,840 Amortization of intangibles 598 918 1,897 2,722 Impairment of assets 17,931 2,631 25,964 3,293 Settlemen
Slide 26: Reconciliation of Non-GAAP Measures
Reconciliation of Non-GAAP Measures Percentage of Total Revenues 3Q24 3Q23 9M24 9M23 Reconciliation of GAAP operating margin to non-GAAP operating margin* Income from operations (3.3)% 20.1% 6.9% 21.0% Amortization of intangibles 0.8% 1.2% 0.9% 1.2% Impairment of assets 23.5% 3.4% 11.7% 1.5% Settlem
Slide 27: Reconciliation of Non-GAAP Measures
Reconciliation of Non-GAAP Measures In 000s 3Q24 3Q23 9M24 9M23 Reconciliation of net cash provided by operating activities to free cash flow Net cash provided by operating activities $15,764 $15,320 $40,233 $47,004 Less: Maintenance capital expenditures 1,986 1,064 4,980 4,949 Free cash flow $13,77
Slide 28: Reconciliation of Non-GAAP Measures
Reconciliation of Non-GAAP Measures $ in 000s Nightclubs Bombshells Other Corporate Total 3Q24 Non-GAAP Segment Information Income (loss) from operations $13,640 $(8,914) $(108) $(7,154) $(2,596) Amortization of intangibles 578 16 -- 4 598 Impairment of assets 7,619 10,312 -- -- 17,931 Settlement of
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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