Rci Hospitality Holdings, Inc. · NASDAQ:RICK
Rci Hospitality — Sidoti Conference January 2022
16 slides from Rci Hospitality's conference presentation, Jan 19, 2022
Slide 1: RCI Hospitality Holdings - Sidoti Conference
cQ2 RC! HOSPITALITY HOLDINGS INC. 25 ([ Nasdaq 1995-2020 nightclubs and restaurants RCI HOSPITALITY HOLDINGS INC Building a portfolio of well-managed, high cash-flowing NASDAQ: RICK Sidoti Conference January 19-20, 2022 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: Strong Portfolio of Hospitality Venues
Strong Portfolio of Hospitality Venues Overview Bombshells Growth Drivers * 60 well-managed, high cash-flowing bars and restaurants + Founded in 1983 + IPO and Nasdaq listing in 1995 * 70% of FY21 sales + 49 locations in 13 states, many in top 20 US markets + Many are well-known gentlemen's club bra
Slide 5: Great Business
Great Business Strong Cash Generation + High gross profit margin (84.6% in FY21) + Fast inventory turnover (12x in FY21) + Low maintenance capex ($5.9M in FY21) Barriers to Entry + Clubs: Most municipal licenses tied to physical location, few municipalities issue new licenses, we have acquired most
Slide 6: Capital Allocation Strategy
Capital Allocation Strategy* + Repurchase shares when FCF yield is more than 10% Buy Back Shares M&A Organic Buy More Methodically of the Right Expand Nightclubs Bombshells + Buy good, solid, cash | Drive Value id + Develop critical mass, flowing clubs at 3-5x a market awareness, adjusted EBITDA wit
Slide 7: Pre-2016
Pre-2016 Focused on Growth of Revenue, not Free Cash Flow Defined & Adopted Capital Allocation Strategy Invested in the Right People, Systems & Processes Disposed of Under- Performing Locations Changed Approach to Club Purchases & New Bombshells Focused on Using Debt vs. Equity Today Highly Scalable
Slide 8: Impressive Track Record & Covid Rebound
Impressive Track Record & Covid Rebound Free Cash Flow ($M)* FCF as % of Revenues' $36.4 Se 18.4% 185% +16% +750 CAGR $232 BPS S185 SBS: — 133% ‘ 3149 5135 1. Oo om FIs VIB FvI7 Fvi8 Fvig Fv20 FY21 Fvis Fie Fvi7 Fvi8 Fvi9 Fv20 Fv2t 4Q Sales / Location ($k)? Diluted Weighted Average Shares Outstandin
Slide 9: Nightclubs: Coming Back
Nightclubs: Coming Back Revenues ($M) $149 Units at Year End 40 S10 $137 37 38 a8 $125 FY21 Captured Focus has 92% of Pre- been on COVID FY19 improving club Sales portfolio FYI7 FY18 FY19 FY20 FY21 FY17 FY18 FY19 FY20 Operating Margin Income from Operations ($M) 41% $56 2636 $53 35% gag 85! +370 BPS
Slide 10: Nightclubs: Significant Acquisition Opportunities
Nightclubs: Significant Acquisition Opportunities Market + 2,000 clubs / ~500 meet our acquisition criteria + We are one of the largest, but our market share is minimal + Long-term owners interested in selling + We are the acquirer of choice as the only public company in the space with access to ban
Slide 11: AdmireMe: Nightclub on the Net
AdmireMe: Nightclub on the Net + Social media platform + Mobile friendly website + Enables “creators” to post content and receive payment from their "admirers" + Comparable to OnlyFans + Digital enhancement to our club business * Total upfront investment about $650K + We would receive ~11% of revenu
Slide 12: Bombshells: Next Generation Sports Bar Concept
Bombshells: Next Generation Sports Bar Concept 1 |Top Ter eter quaty bo, serve and expenence DighoTve,scaton tenn, nee WEFL, US arg labore Ds 4 Dayprs: Lunn, napoy nour, ane. lat night Late ng anv ign AUVs and meus seaang marge + signals, menainessané confor to at wans + Appel oman, women, anil, ren
Slide 13: Bombshells: FY21 Record Year
Bombshells: FY21 Record Year Cee $56.6 Revenues ($M) Units at Year End 10 10 $43.2 8 +32% sis ; +19% CAGR on 5 CAGR - a i FYI7 FY18 FY19 FY20 FY21 FY17 FY18 FY19 FY20 FY21 Operating Margin 23.4% Income from Operations ($M) $13.3 $9.2 +700 16.4% +44% BPS CAGR $3.1 Hi = 7 FYI7 FY18 FY19 FY20 FY21 FYIT
Slide 14: Bombshells: Targeting More Locations Next Years
Bombshells: Targeting 15 More Locations Next 3 Years History Total Franchised Units — Built 5 the first 5 6 . © ue Meats m& Total Company-Owned Units — Then 5 more in 4 years FY21 launched plan to develop the next 10 in 3 years - Growth is self-funding — Opened 2" Dallas location in December 2021 -
Slide 15: 1Q22 Sales: Growth Continues
1Q22 Sales: Growth Continues an a SS ey a SS ee oo ‘$in Millions Combined $61.1 Nightclubs $46.3 Bombshells $14.8 * Bombshells benefited from new Arlington, TX location opened early December + Nightclubs benefited from 12 clubs acquired mid-October and early November * No Omicron effect until late 1
Slide 16: 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
RCI Hospitality Holdings — Sidoti Conference January 2022 on 6ix