Rci Hospitality Holdings, Inc. · NASDAQ:RICK
Rci Hospitality — Q1 2023 Earnings Presentation
20 slides from Rci Hospitality's earnings presentation, Feb 9, 2023
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 | 1Q23 Conference Call | February 9, 2023 | 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: Twitter Spaces Instructions
Twitter Spaces Instructions • Go To: @RicksCEO on Twitter: https://twitter.com/RicksCEO • Select this Twitter Space: https://twitter.com/i/spaces/1lDxLnmRpnRGm • 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 Space with a personal
Slide 4: Forward-Looking Statements Trademarks
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: $70.0M +13.2% • EPS: $1.11 -0.9% / Non-GAAP EPS2: $1.19 +8.2% • Net Cash from Operating Activities: $14.9M -8.4% 1Q23 • Free Cash Flow2: $13.0M -14.6% Highlights • Net Income3: $10.2M -3.2% • Adjusted EBITDA2: $20.5M +13.9% • Shares: 9.2M -1.9% • Nightclubs 21.4% incr
Slide 7: Nightclubs Segment
Nightclubs Segment $56.6 $56.3 Revenues ($M) $54.7 Operating Margin As % of Segment Revenues $46.8 $48.2 GAAP Non-GAAP $41.0 $40.3 55% $30.8 40% $25.2 25% 10% -5% 1Q21 2Q21 3Q21 4Q21 1Q22 2Q22 3Q22 4Q22 1Q23 1Q21 2Q21 3Q21 4Q21 1Q22 2Q22 3Q22 4Q22 1Q23 • 1Q23 Results Period Location Status – Revenue
Slide 8: Bombshells Segment
Bombshells Segment Revenues ($M) Operating Margin As % of Segment Revenues $16.1 $15.8 $15.3 GAAP Non-GAAP $14.4 $14.8 $14.0 40% $13.1 $13.4 $13.0 30% 20% 10% 0% 1Q21 2Q21 3Q21 4Q21 1Q22 2Q22 3Q22 4Q22 1Q23 1Q21 2Q21 3Q21 4Q21 1Q22 2Q22 3Q22 4Q22 1Q23 • 1Q23 Results Period Location Status – Revenues
Slide 9: Analysis of Consolidated Statement of Operations
Analysis of Consolidated Statement of Operations Line Item 1Q23 vs. 1Q22 (% of sales) 1Q22 Comment Cost of Goods 12.9% vs. 14.4% • Increased high-margin service revenues in the sales mix (36.5% vs. 33.8%) Salaries & Wages 26.7% vs. 26.7% • Added expenses from newly acquired and reopened locations SG
Slide 10: Cash, FCF & Adjusted EBITDA ($M)
Cash, FCF & Adjusted EBITDA ($M) $38.1 $37.5 Cash $35.7 $36.0 As % of Total Revenues* $34.1 35% 35% $29.1 34% 31% 32% 31% 29% 29% $20.2 $17.0 $18.0 23% 25% 25% 19% 22% 20% 20% 15% 17% 15% FCF Adj. EBITDA 12/31/20 3/31/21 6/30/21 9/30/21 12/31/21 3/31/22 6/30/22 9/30/22 12/31/22 1Q21 2Q21 3Q21 4Q21 1
Slide 11: Debt Metrics
Debt Metrics Debt, Net of Loan Costs ($M) $211 Weighted Average Interest Rate on Debt $203 $188 $178 $162 6.82% 6.77% $135 6.73% 6.70% $132 $128 $125 6.35% 6.26% 12/31/20 3/31/21 6/30/21 9/30/21 12/31/21 3/31/22 6/30/22 9/30/22 12/31/22 1Q18 1Q19 1Q20 1Q21 1Q22 1Q23 Debt Maturities as of 12/31/22 ($
Slide 12: Other Debt Related Metrics
Other Debt Related Metrics Debt / Adjusted EBITDA (TTM) Total Occupancy Costs Lease & Interest Expense as % of Total Revenues 6.3* 8.9% 3.2 3.1 7.6% 7.8% 2.3 2.4 7.3% 2.1 6.9% 7.0% 6.7% 6.0% 5.7% 9/30/18 9/30/19 9/30/20 9/30/21 9/30/22 12/31/22 1Q21 2Q21 3Q21 4Q21 1Q22 2Q22 3Q22 4Q22 1Q23 * Reflects
Slide 13: Debt Analysis (as of 12/31/22, $M)
Debt Analysis (as of 12/31/22, $M) Total of $214.61 Weighted Average Interest Rate (WAIR): 6.35% $54.1 Seller Financing (25.2% of total) • Secured by the respective clubs and real estate to which it applies • 11 Clubs: $18.8 @ 6.0% WAIR • Scarlett’s: $13.1 @ 8.0% WAIR • Mansion: $0.9 @ 4.00% WAIR $1
Slide 14: 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 15: Club Acquisition & Development
Club Acquisition & Development Acquisition / Location Status (as of 2/9/23) Development • Reopened day shift 1/30/23 Heartbreakers Galveston, TX • Plan to finish remodel in February • Renamed and reformatted club reopened late Jaguars Club San Antonio December • Business doing well • Awaiting transf
Slide 16: Bombshells Acquisition & Development
Bombshells Acquisition & Development Location Acquisition / Development Status (as of 2/9/23) Opening Status • Remodeling and installing “Bombshells Kitchen” Acquired 12/20/22 Denver Food Hall • Expected to be completed in February Open Acquired 2/7/23 San Antonio • Purchased franchise Open Stafford
Slide 17: Casino Acquisition & Development
Casino Acquisition & Development Target Location Status (as of 2/923) Opening • Acquired Central City, CO real estate Rick’s Cabaret Steakhouse & • $2.4M FY25 Casino • 30,000 square feet • Applied for gaming license Watch our “walk-through” video: https://twitter.com/i/status/1621534951660294145 17
Slide 18: FY23 Capital Allocation (Completed & Pending) $M
FY23 Capital Allocation (Completed & Pending) $M Quarter Acquisition Category Status Cash Debt Equity Total 1Q23 1,500 common shares ($65.02/PS) Share Repurchases Completed $0.1 $0.1 1Q23 Heartbreakers (Galveston area, TX) Nightclubs Completed $4.0 $5.0 $9.0 1Q23 Land (Lubbock, TX) Bombshells Comple
Slide 19: Geographic Focus
Geographic Focus • Circle sizes based on 1Q23 revenues • Some circles combine multiple locations 19
Slide 20: 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 20
RCI Hospitality Holdings — Q1 2023 Earnings Presentation on 6ix