Rci Hospitality Holdings, Inc. · NASDAQ:RICK
Rci Hospitality — LD Micro 500 Investor Conference 2020
15 slides from Rci Hospitality's conference presentation, Sep 4, 2020
Slide 1: RCI Hospitality Holdings Inc
RCI HOSPITALITY HOLDINGS INC Building a portfolio of well-managed, high cash-flowing nightclubs and restaurants NASDAQ: RICK LD Micro 500 Investor Conference September 4, 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 Overview Bombshells Restaurants Entertainment Drives Sales . Building a portfolio of well-managed, high cash-flowing nightclubs and restaurants Founded 1983, IPO and Nasdaq listing in 1995 38 clubs — Many of the industry's best in top US markets Major brands: Rick’s, Tootsie’s, Scarlett’s
Slide 5: Great Business
Great Business Strong Cash Generation (FY19) + High gross profit margin (86%) + Fast inventory turnover Entertainment , Services + Low maintenance capex ($3.9M) 38% Clubs: Barriers to Entry + Most municipal licenses tied to physical location + Few municipalities issue new licenses + We have acquired
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 same Buy Back formula, but only if cash Shares exceeds $15M M&A , Organic Buy More Judiciously of the Right Expand Nightclubs Bombshells + Buy good, solid, cash | i
Slide 7: Strong Track Record
Strong Track Record $333 Results FY15-19 Free Cash Flow ($M)' Focus Started FY16 + FCF 22% CAGR FY15-FY19 + FCF conversion rate expanded 740 bps + Reduced FD share count 7% $232 — $193 FY20 & The Future S149 + We believe our strategies will work well for us as we continue to recover from Covid-19 Fv
Slide 8: Business Continues to Improve
Business Continues to Improve 3Q20 Recap (April-June) + Despite being closed all of April due to the pandemic, operating cash flow was positive for the quarter Financial Update + Generating $2.2M/week in revenues + Up 22% from $1.8M at end of July Locations Update + 34 locations open this week — up
Slide 9: Nightclubs: Significant Acquisition Opportunities
Nightclubs: Significant Acquisition Opportunities Market + 2,200 clubs / ~500 meet our acquisition criteria + Weare one of the largest, but our market share is < 2% + Long-term owners interested in selling + We are the acquirer of choice as the only public company in the space with access to bank fi
Slide 10: Bombshells: New Generation Sports Bar & Restaurant
Bombshells: New Generation Sports Bar & Restaurant More Upscale Than Traditional Sports Bars + Better quality food, service and experience + Wide appeal: men, women, families, friends, singles, couples + Strong community involvement + Large venues: 8K sq. ft. inside + 2K sq. ft. patio outside + Big
Slide 11: Balance Sheet Trends
Balance Sheet Trends Cash ($M) Total Long-Term Debt ($M) $153.4 weve = 3e18 wos = gag = t2eINS «= -a3120 «83020 nes 3619 eons = esos = tae ©3320 ~—«@/s020 Focused on cash generation and use Current Lial 6/30/20 long-term debt $137.3M ex-SBA loan 6/30/20 current liabilities in line with trends fies (
Slide 12: Long-Term Debt (as of 6/30/20, $ in millions)
Long- Term Debt (as of 6/30/20, $ in millions) Total of $144.0* Weighted Average Interest Rate (WAIR): 6.55% $26.3 Seller Financing (18.2% of total) + Secured by the respective clubs + Scarlett’s: $15.9 @ 7.43% WAIR + VIP's & Blush: $10.4 @ 7.47% WAIR $87.1 Secured by Real Estate (60.5%) + 5.78% WAI
Slide 13: Conclusion
Conclusion Despite being closed for the entire month of April, we were operating cash flow positive in the June quarter Most debt is real estate related and banks have allowed us to defer payments, lowering our cash going out Revenues and openings have continued to improve Most locations have re-ope
Slide 14: Non-GAAP Reconciliations
Non-GAAP Reconciliations fc) Cl HOSPITA OLDING 5 INC FYis FY16FY17,—ssFY18-— F419 Reconciliation of net cash provided by operating activities to free cash flow ($ in millions) Net Cash Provided by Operating Activities $ 164 $ 230 $ 211 $ 258 $ 372 Less: Maintenance Capital Expenditures $ 15$ 25$ 18
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 RCI HOSPITALITY ILDINGS IN 15
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