Rci Hospitality Holdings, Inc. · NASDAQ:RICK
Rci Hospitality — Investor Presentation (November 2020)
15 slides from Rci Hospitality's investor presentation, Nov 19, 2020
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 Investor Presentation November 19, 2020 www.rcihospitality.com
Slide 2: 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 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: What We Do
What We Do • Building a portfolio of well-managed, high cash-flowing nightclubs and restaurants Overview • Founded 1983, IPO and Nasdaq listing in 1995 • 38 clubs – Many of the industry’s best in top US markets Nightclubs • Major brands: Rick’s, Tootsie’s, Scarlett’s, XTC, Jaguars, Club Onyx • % of
Slide 5: Great Business
Great Business Strong Cash Generation (FY19) Total Revenues (FY19) • High gross profit margin (86%) • Fast inventory turnover Entertainment Alcoholic Services Beverages • Low maintenance capex ($3.9M) 38% 41% Clubs: Barriers to Entry • Most municipal licenses tied to physical location • Few municipa
Slide 6: Capital Allocation Strategy
Capital Allocation Strategy* • Repurchase shares when FCF • …But during the pandemic, yield is more than 10%... acquire shares using the Buy Back same formula, but only if Shares cash exceeds $15M M&A Organic Buy More Judiciously of the Right Expand Nightclubs Bombshells • Buy good, solid, cash Driv
Slide 7: Major Transformation
Major Transformation Pre-2016 Changed Defined & Invested Eliminated Today Disposed Approach Focused on Adopted in the Right Equity of Under- to Club Cash Flow growing top Capital People, Financing & Performing Purchases Growth line, not Allocation Systems & Used Debt Locations & New Machine FCF Stra
Slide 8: Strong Track Record
Strong Track Record $33.3 Free Cash Flow ($M)1 FCF as % of Revenues 18.4% $23.2 $19.3 $18.5 14.0% 13.7% 13.3% $14.9 11.0% FY15 FY16 (adjusted)2 FY17 FY18 FY19 FY15 FY16 (adjusted)2 FY17 FY18 FY19 Average Revenue / Club Location ($K) Diluted Weighted Average Shares Outstanding (M) $997 $967 $971 $950
Slide 9: Sales Trends Through COVID-19
Sales Trends Through COVID-19 $15.3 October Total Revenues ($M) • Up 34% from September $11.4 • Equal to 97% of year ago revenues $9.4 • 47 of 48 locations open (37 clubs + all 10 Bombshells) $8.8 $7.6 Most Locations Re-Open to Strong Sales $5.5 • Continue to attract customers and a steadier flow of
Slide 10: Bombshells: Why It's Working
Bombshells: Why It’s Working More Upscale Than Traditional Sports Bars Something for Everybody • Better quality food, service and experience • Appeals to men, women, families, friends, singles, couples, millennials • Strong community involvement • Large venues: ~8K sq. ft. inside + ~2K sq. ft. patio
Slide 11: Bombshells Expansion Plan: "The Next 10"
Bombshells Expansion Plan: “The Next 10” The Opportunity • COVID-19 creates unique and compelling opportunity • “The First 10” proven to do well, particularly through COVID- 19 • Can access prime locations not previously available and/or buy/lease them at significantly lower prices The Plan • Open 1
Slide 12: "The Next 10" Bombshells Initial Models
“The Next 10” Bombshells Initial Models Location Key Metric Leased Owned Comments • The four potential sites we are Annualized store level return $1.0-$1.2M $1.3-$1.6M considering could be leased and/or acquired locations Cash investment $2.6-$2.8M $2.6-$2.8M • Based on that, we have developed Debt
Slide 13: Key Takeaways
Key Takeaways • RCI has gone through a major transformation • Driven by FCF/PS growth based on disciplined capital allocation • COVID-19 has created compelling investment opportunities for the company • We believe our core strategies will work well as we emerge from COVID-19 • Pre-COVID-19, we belie
Slide 14: Non-GAAP Reconciliations
Non-GAAP Reconciliations FY15 FY16 FY17 FY18 FY19 Reconciliation of net cash provided by operating activities to free cash flow ($ in millions) Net Cash Provided by Operating Activities $ 16.4 $ 23.0 $ 21.1 $ 25.8 $ 37.2 Less: Maintenance Capital Expenditures $ 1.5 $ 2.5 $ 1.8 $ 2.5 $ 3.9 Less: Majo
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 15
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