Rci Hospitality Holdings, Inc. · NASDAQ:RICK
Rci Hospitality — Q4 2023 Earnings Presentation
31 slides from Rci Hospitality's earnings presentation, Dec 14, 2023
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 | 4Q23 & FY23 Conference Call | December 14, 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: X (formerly Twitter) Spaces Instructions
X (formerly Twitter) Spaces Instructions • Go To: @RicksCEO on X: https://x.com/RicksCEO • Select this X Space: https://x.com/i/spaces/1rmxPMjzYkdKN • 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 computer •
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: Summary Results
Summary Results In Millions Except EPS 4Q23 4Q22 FY23 FY22 Total revenues $75.3 $71.4 $293.8 $267.6 Other charges (gains), net $9.9 ($0.9) $15.6 $0.5 EPS $0.23 $1.15 $3.13 $4.91 Non-GAAP EPS* $1.11 $1.49 $4.90 $5.38 Net cash from operating activities $12.1 $17.8 $59.1 $64.5 Free cash flow* $11.1 $14
Slide 7: Key Takeaways
Key Takeaways Continued to Make Progress 4Q23 Revenues +5.4%, Implemented Changes with New Projects for FY24-25 EPS $0.23 & $1.11 Non-GAAP to Improve Operations & to Pursue Acquisitions Continued to Take Advantage Cash Resources Available to LT Performance Strong of Low Stock Price Complete Projects
Slide 8: Casino Development
Casino Development Our Plans Overview1 Rick’s Cabaret Steakhouse & Casino • 30,000 square feet • Awaiting conclusion of Colorado Division of Gaming process • 4 floors • 200 slot machines • Awaiting liquor licenses • Tables: 1 craps, 1 roulette, • Retained experienced Director of Casino Operations 2
Slide 9: Nightclub Development
Nightclub Development Baby Dolls-Chicas Locas Acquisition • Sales have improved every quarter since March acquisition • We finished remodeling the 5th location (Baby Dolls FW) in June • Labor and direct operating expenses as % of revenue have come down • Analyzing more ways to improve margins All-Am
Slide 10: Bombshells Development
Bombshells Development New Locations • Food Hall (Denver, CO) – Renamed with expanded offerings • Bombshells Stafford (Houston, TX) – Opened mid-November Anticipate Opening in FY24 • Rowlett (Dallas, TX) • Lubbock (TX) • Downtown Denver (CO) Operations • Hired new Assistant Director of Operations wi
Slide 11: Strategic Share Buybacks & Issuance
Strategic Share Buybacks & Issuance Cumulative Cumulative Avg. Cumulative Cumulative Shares Used Repurchased Average Price Value Per Shares Used Value Each of Fiscal Year Shares Average Price for Shares Per Share Share for Shares Used for Repurchased Per Share Acquisitions Acquisitions Acquisitions
Slide 12: Nightclubs Segment
Nightclubs Segment Total Revenues ($M) Operating Margin As% of Segment Revenues $62.4 60% $60.9 $56.6 $56.3 $57.0 $54.7 45% $48.2 $46.8 $40.3 30% 15% GAAP Non-GAAP 0% 4Q21 1Q22 2Q22 3Q22 4Q22 1Q23 2Q23 3Q23 4Q23 4Q21 1Q22 2Q22 3Q22 4Q22 1Q23 2Q23 3Q23 4Q23 4Q23 vs. 4Q22 ($M) Locations Contributing t
Slide 13: Bombshells Segment
Bombshells Segment Total Revenues ($M) Operating Margin As% of Segment Revenues 40% $15.8 $15.3 $14.8 $14.4 $14.3 $14.4 $14.0 $13.4 $13.6 30% 20% 10% GAAP Non-GAAP 0% 4Q21 1Q22 2Q22 3Q22 4Q22 1Q23 2Q23 3Q23 4Q23 4Q21 1Q22 2Q22 3Q22 4Q22 1Q23 2Q23 3Q23 4Q23 4Q23 vs. 4Q22 ($M) Locations Contributing t
Slide 14: Consolidated Operating Income
Consolidated Operating Income $M* 4Q23 4Q22 Change Comment Revenues • $9.2 from acquisitions not in SSS Nightclubs $60.9 $56.6 $4.3 • $5.1 SSS decline • $1.6 from acquisitions not in SSS Bombshells $13.6 $14.0 ($0.4) • $2.0 SSS decline Other $0.7 $0.7 ($0.0) $75.3 $71.4 $3.9 GAAP Income (loss) from
Slide 15: Consolidated Operating Margin
Consolidated Operating Margin 60% $77.1 $80 Total Revenues ($M) $75.3 GAAP Operating Margin (% Total Revenues) $70.7 $71.4 $71.5 $70.0 Non-GAAP Operating Margin (% Total Revenues) $70 50% $63.7 $61.8 $57.9 $60 $54.9 40% $50 $44.1 31.83% 31.16% 30.01% $38.4 28.4% 30% 26.9% 26.6% $40 25.9% 25.6% 25.6%
Slide 16: GAAP Disclosure ($M)
GAAP Disclosure ($M) Operating Income Net Income $20.5 $18.0 $17.1 $16.9 $15.9 $15.5 $13.4 $13.9 $10.6 $11.0 $10.6 $10.2 $9.1 $7.7 $5.6 $3.6 $2.3 $2.2 4Q21 1Q22 2Q22 3Q22 4Q22 1Q23 2Q23 3Q23 4Q23 4Q21 1Q22 2Q22 3Q22 4Q22 1Q23 2Q23 3Q23 4Q23 Fiscal Year 2015 2016 2017 2018 2019 2020 2021 2022 2023 CA
Slide 17: Cash, FCF & Adjusted EBITDA ($M)
Cash, FCF & Adjusted EBITDA ($M) Cash As% of Total Revenues $38.1 $37.5 $35.7 $36.0 $34.1 35% 34% 31% 30% 32% 29% 29% 29% 27% $22.8 $23.6 $21.0 $18.0 25% 25%* 20% 21% 15% 19% 19% 17% 15% FCF Adj. EBITDA 9/30/21 12/31/21 3/31/22 6/30/22 9/30/22 12/31/22 3/31/23 6/30/23 9/30/23 4Q21 1Q22 2Q22 3Q22 4Q2
Slide 18: Debt Metrics
Debt Metrics Debt, Net of Loan Costs ($M) Debt Maturities as of 9/30/23 ($M) Amortization Schedule $246 Adjusted for October 2023 Debt Modification $244 $240 Realty Balloon $211 Non-Realty Balloon $203 $188 $178 $162 $125 $7.9 $7.5 $11.5 $9.1 $5.7 $14.6 $12.5 $12.9 $13.7 $14.0 9/30/21 12/31/21 3/31/
Slide 19: Debt Analysis (as of 9/30/23, $M)
Debt Analysis (as of 9/30/23, $M) Total of $242.7* Weighted Average Interest Rate (WAIR): 6.64% $72.9 Seller Financing (30.0% of total) • Secured by the respective clubs and real estate to which it applies • 5 Baby Dolls-Chicas Locas: $19.8 @ 7.0% WAIR • 11 Clubs: $18.0 @ 6.0% WAIR • Scarlett’s: $12
Slide 20: Capital Allocation Strategy Guides Our Growth
Capital Allocation Strategy Guides Our Growth* FY23 Allocation Share Buybacks • $2.2M cash deployed • 34,086 shares repurchased • Repurchase shares when • $65.22 average price/share FCF yield is more than 10% Share Nightclubs Buybacks • $77.9M capital deployed ($40.5M debt, $21.4M cash, $16.0M equit
Slide 21: Long-Term Performance
Long-Term Performance Fiscal Year ($M) 2015 2016 2017 2018 2019 2020 2021 2022 2023 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% 16.9% 3
Slide 22: Appendix
RCI HOSPITALITY HOLDINGS INC Appendix
Slide 23: Reconciliation of Non-GAAP Measures
Reconciliation of Non-GAAP Measures In 000s 4Q23 4Q22 FY23 FY22 Reconciliation of GAAP net income to Adjusted EBITDA Net income attributable to RCIHH common stockholders $2,191 $10,612 $29,246 $46,041 Income tax expense (601) 4,015 6,846 14,071 Interest expense, net 4,126 3,364 15,538 11,539 Settlem
Slide 24: Reconciliation of Non-GAAP Measures
Reconciliation of Non-GAAP Measures In 000s 4Q23 4Q22 FY23 FY22 Reconciliation of GAAP net income to non-GAAP net income Net income attributable to RCIHH common stockholders $2,191 $10,612 $29,246 $46,041 Amortization of intangibles 806 1,994 3,528 2,118 Settlement of lawsuits 576 708 3,759 1,417 Im
Slide 25: Reconciliation of Non-GAAP Measures
Reconciliation of Non-GAAP Measures 4Q23 4Q22 FY23 FY22 Reconciliation of GAAP diluted earnings per share to non-GAAP diluted earnings per share Diluted shares 9,417,166 9,249,864 9,335,983 9,383,445 GAAP diluted earnings per share $0.23 $1.15 $3.13 $4.91 Amortization of intangibles 0.09 0.22 0.38 0
Slide 26: Reconciliation of Non-GAAP Measures
Reconciliation of Non-GAAP Measures In 000s 4Q23 4Q22 FY23 FY22 Reconciliation of GAAP operating income to non-GAAP operating income Income from operations $5,644 $17,960 $51,484 $71,459 Amortization of intangibles 806 1,994 3,528 2,118 Settlement of lawsuits 576 708 3,759 1,417 Impairment of assets
Slide 27: Reconciliation of Non-GAAP Measures
Reconciliation of Non-GAAP Measures Percentage of Total Revenues 4Q23 4Q22 FY23 FY22 Reconciliation of GAAP operating margin to non-GAAP operating margin Income from operations 7.5% 25.2% 17.5% 26.7% Amortization of intangibles 1.1% 2.8% 1.2% 0.8% Settlement of lawsuits 0.8% 1.0% 1.3% 0.5% Impairmen
Slide 28: Reconciliation of Non-GAAP Measures
Reconciliation of Non-GAAP Measures In 000s 4Q23 4Q22 FY23 FY22 Reconciliation of net cash provided by operating activities to free cash flow Net cash provided by operating activities $12,126 $17,755 $59,130 $64,509 Less: Maintenance capital expenditures 1,005 3,213 5,954 5,598 Free cash flow $11,12
Slide 29: Reconciliation of Non-GAAP Measures
Reconciliation of Non-GAAP Measures $ in 000s Nightclubs Bombshells Other Corporate Total 4Q23 Non-GAAP Segment Information Income (loss) from operations $12,060 $1,179 $(793) $(6,802) $5,644 Amortization of intangibles 617 30 155 4 806 Settlement of lawsuits 378 198 — — 576 Impairment of assets 8,5
Slide 30: Reconciliation of Non-GAAP Measures
Reconciliation of Non-GAAP Measures $ in 000s Nightclubs Bombshells Other Corporate Total FY23 Non-GAAP Segment Information Income (loss) from operations $73,187 $6,502 $(1,446) $(26,759) $51,484 Amortization of intangibles 2,497 530 484 17 3,528 Settlement of lawsuits 3,552 207 — — 3,759 Impairment
Slide 31: 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 31
RCI Hospitality Holdings — Q4 2023 Earnings Presentation on 6ix