PART I FINANCIAL INFORMATION [Financial Statements](index=4&type=section&id=Item%201.%20Financial%20Statements) This section presents the unaudited condensed consolidated financial statements for Q2 and H1 2024 and 2023, including balance sheets, income, and cash flows Condensed Consolidated Balance Sheet Highlights (in thousands) | Account | March 31, 2024 | September 30, 2023 | | :--- | :--- | :--- | | **Total Assets** | **$609,893** | **$610,884** | | Cash and cash equivalents | $19,973 | $21,023 | | Total current assets | $42,032 | $37,473 | | Goodwill | $67,862 | $70,772 | | **Total Liabilities** | **$324,394** | **$329,560** | | Current portion of debt obligations | $25,072 | $22,843 | | Debt, net of current portion | $206,853 | $216,908 | | **Total Equity** | **$285,499** | **$281,324** | Condensed Consolidated Statements of Income Highlights (in thousands, except EPS) | Metric | Q2 2024 | Q2 2023 | H1 2024 | H1 2023 | | :--- | :--- | :--- | :--- | :--- | | Total Revenues | $72,283 | $71,517 | $146,190 | $141,485 | | Income from Operations | $4,657 | $13,427 | $17,822 | $30,325 | | Net Income Attributable to RCIHH | $774 | $7,732 | $8,000 | $17,970 | | Basic and Diluted EPS | $0.08 | $0.83 | $0.85 | $1.94 | Condensed Consolidated Statements of Cash Flows Highlights (in thousands) | Cash Flow Activity | Six Months Ended Mar 31, 2024 | Six Months Ended Mar 31, 2023 | | :--- | :--- | :--- | | Net cash provided by operating activities | $24,469 | $31,684 | | Net cash used in investing activities | $(12,686) | $(48,076) | | Net cash provided by (used in) financing activities | $(12,833) | $3,196 | | **Net Decrease in Cash** | **$(1,050)** | **$(13,196)** | - During the quarter ended March 31, 2024, the company recorded asset impairments totaling **$8.0 million**, including **$4.4 million** in SOB license impairment, **$2.9 million** in goodwill impairment, and **$0.7 million** in tradename impairment[47](index=47&type=chunk) - Subsequent to the quarter end, on April 30, 2024, the company entered into a new **$20.0 million** term loan for additional working capital with a 10-year term and an initial interest rate of **8.25%**[84](index=84&type=chunk) [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=25&type=section&id=Item%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses Q2 and H1 fiscal 2024 financial results, highlighting revenue changes, increased operating expenses, and liquidity status [Results of Operations](index=25&type=section&id=Results%20of%20Operations) Q2 2024 revenues increased 1.1% YoY to **$72.3 million**, driven by acquisitions but offset by same-store sales declines, impacting profitability Q2 FY2024 Performance Highlights vs. Q2 FY2023 | Metric | Q2 2024 | Q2 2023 | Change | | :--- | :--- | :--- | :--- | | Total Revenues | $72.3M | $71.5M | +1.1% | | Nightclubs Revenue | $59.4M | $57.0M | +4.1% | | Bombshells Revenue | $12.8M | $14.3M | -10.8% | | Consolidated Same-Store Sales | -8.6% | N/A | N/A | | Basic and Diluted EPS | $0.08 | $0.83 | -90.4% | | Non-GAAP Diluted EPS | $0.90 | $1.30 | -30.8% | - For the six months ended March 31, 2024, consolidated revenues increased **3.3%** YoY, driven by a **$19.6 million** increase from new clubs and openings, but partially offset by a **$12.3 million** negative impact from declining same-store sales[96](index=96&type=chunk) - Total operating expenses as a percentage of revenue increased to **93.6%** in Q2 2024 from **81.2%** in Q2 2023, primarily due to higher costs, wage inflation, and significant asset impairment charges of **$8.0 million**[103](index=103&type=chunk)[47](index=47&type=chunk) Segment Operating Income (in thousands) | Segment | Q2 2024 | Q2 2023 | H1 2024 | H1 2023 | | :--- | :--- | :--- | :--- | :--- | | Nightclubs | $11,021 | $17,995 | $31,390 | $40,735 | | Bombshells | $699 | $1,775 | $785 | $3,622 | | **Total Income from Operations** | **$4,657** | **$13,427** | **$17,822** | **$30,325** | [Non-GAAP Financial Measures](index=32&type=section&id=Non-GAAP%20Financial%20Measures) The company utilizes non-GAAP metrics such as Adjusted EBITDA and Non-GAAP Net Income to provide a clearer view of core operational performance Reconciliation of GAAP Net Income to Adjusted EBITDA (in thousands) | Metric | Q2 2024 | Q2 2023 | H1 2024 | H1 2023 | | :--- | :--- | :--- | :--- | :--- | | Net income attributable to RCIHH | $774 | $7,732 | $8,000 | $17,970 | | Adjustments (Taxes, Interest, D&A, etc.) | $16,458 | $13,958 | $26,699 | $24,179 | | **Adjusted EBITDA** | **$17,232** | **$21,690** | **$34,699** | **$42,149** | Reconciliation of GAAP to Non-GAAP Diluted EPS | Metric | Q2 2024 | Q2 2023 | H1 2024 | H1 2023 | | :--- | :--- | :--- | :--- | :--- | | GAAP diluted EPS | $0.08 | $0.83 | $0.85 | $1.94 | | Adjustments (per share) | $0.82 | $0.47 | $0.91 | $0.56 | | **Non-GAAP diluted EPS** | **$0.90** | **$1.30** | **$1.76** | **$2.50** | [Liquidity and Capital Resources](index=35&type=section&id=Liquidity%20and%20Capital%20Resources) As of March 31, 2024, the company held **$20.0 million** in cash and had negative working capital, with net cash from operations decreasing - Cash and cash equivalents stood at **$20.0 million** as of March 31, 2024, compared to **$21.0 million** at September 30, 2023, with the company having negative working capital of **$14.4 million**[127](index=127&type=chunk) Free Cash Flow Reconciliation (in thousands) | Metric | Six Months Ended Mar 31, 2024 | Six Months Ended Mar 31, 2023 | | :--- | :--- | :--- | | Net cash provided by operating activities | $24,469 | $31,684 | | Less: Maintenance capital expenditures | $2,994 | $3,885 | | **Free cash flow** | **$21,475** | **$27,799** | - During the six months ended March 31, 2024, the company repurchased **65,219** shares of its common stock for **$3.6 million** at an average price of **$55.23** per share[132](index=132&type=chunk) [Capital Allocation Strategy](index=38&type=section&id=Capital%20Allocation%20Strategy) The company's capital allocation strategy uses free cash flow to guide investment decisions, prioritizing acquisitions, stock repurchases, and debt reduction - The company's capital allocation strategy prioritizes investments based on specific return thresholds and market conditions: acquire/develop clubs/restaurants with a **25%-33%** minimum cash-on-cash return, buy back stock if the after-tax free cash flow yield is above **10%**, dispose of underperforming units, and pay down expensive debt when strategically advantageous[144](index=144&type=chunk) - The growth strategy includes acquiring existing nightclubs and developing the Bombshells restaurant concept to diversify operations, as these units do not require difficult-to-obtain SOB licenses[142](index=142&type=chunk)[143](index=143&type=chunk) [Quantitative and Qualitative Disclosures About Market Risk](index=39&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20about%20Market%20Risk) The company reports no material changes to the market risk disclosures from its Annual Report on Form 10-K for the fiscal year ended September 30, 2023 - There were no material changes to the information regarding market risk from the company's last Annual Report on Form 10-K[145](index=145&type=chunk) [Controls and Procedures](index=39&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded that disclosure controls and procedures were not effective as of March 31, 2024, due to material weaknesses in internal control over financial reporting - Management concluded that the company's disclosure controls and procedures were not effective as of March 31, 2024[147](index=147&type=chunk) - The ineffectiveness is due to previously reported material weaknesses in internal controls related to: (1) accounting for business combinations, (2) impairment of goodwill and other assets, and (3) ineffective IT general controls (ITGCs)[148](index=148&type=chunk) - Remediation efforts are underway, including enhancing management review precision, engaging third-party consultants for valuation, and strengthening IT controls, with completion expected by the end of fiscal 2024[149](index=149&type=chunk)[150](index=150&type=chunk)[151](index=151&type=chunk)[153](index=153&type=chunk) PART II OTHER INFORMATION [Legal Proceedings](index=41&type=section&id=Item%201.%20Legal%20Proceedings) This section incorporates by reference the 'Legal Matters' discussion from Note 9 of the financial statements, detailing ongoing litigation - The company is involved in several legal matters, detailed in Note 9 of the financial statements, including a challenge to the Texas Patron Tax, issues from the 2014 liquidation of its former insurer IIC, and a shareholder derivative action that has an agreement in principle to settle[156](index=156&type=chunk)[64](index=64&type=chunk)[67](index=67&type=chunk)[69](index=69&type=chunk) [Risk Factors](index=41&type=section&id=Item1A.%20Risk%20Factors) The company reports no material changes to the risk factors disclosed in its most recent Annual Report on Form 10-K, other than potential risks from legal proceedings - There were no material changes to the risk factors disclosed in the Company's Annual Report on Form 10-K for the fiscal year ended September 30, 2023[157](index=157&type=chunk) [Unregistered Sales of Equity Securities and Use of Proceeds](index=41&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) This section details the company's share repurchase activity for the three months ended March 31, 2024, with **27,265** shares repurchased Share Repurchase Activity (Q2 2024) | Period | Total Shares Purchased | Average Price Paid per Share | | :--- | :--- | :--- | | January 2024 | — | — | | February 2024 | 13,712 | $56.65 | | March 2024 | 13,553 | $55.59 | | **Total** | **27,265** | **$56.12** | [Exhibits](index=42&type=section&id=Item%206.%20Exhibits) This section lists the exhibits filed with the Form 10-Q, primarily including CEO and CFO certifications and financial statements in Inline XBRL - Filed exhibits include CEO and CFO certifications (Rule 13a-14(1) and Section 906 of Sarbanes-Oxley) and financial data in Inline XBRL format[160](index=160&type=chunk)

Financial Data and Key Metrics Changes - First quarter revenues totaled $73.9 million, up 5.6% compared to last year, primarily due to club acquisitions, despite a consolidated same-store sales decline of 9.8% [3][74] - EPS was $0.77 per share with non-GAAP at $0.87, while net cash from operating activities and free cash flow declined only 8% and 3%, respectively [74][87] - The effective tax rate for the year was 19.9%, down from 22.8% [9] Business Line Data and Key Metrics Changes - By revenue type, alcoholic beverages increased by 18.7%, food by 14.1%, and other by 8.2%, while service revenues declined by 1.6% [8] - The combined operating loss from Other and Corporate segments was $400,000 less than last year, with non-GAAP figures about $100,000 less [9] - Bombshells segment revenues declined by $700,000 year-over-year, reflecting a $2.7 million decline in same-store sales [86] Market Data and Key Metrics Changes - The nightclub business remains solid, but same-store sales reflect macroeconomic uncertainty, with declines noted across the industry [74][61] - Central City slots averaged 131 adjusted gross proceeds per day, while nearby Black Hawk averaged 307, indicating potential revenue opportunities for the casinos [76] Company Strategy and Development Direction - The company aims to create a digital extension of its physical brands, allowing entertainers to monetize their relationships continuously [6] - A capital allocation strategy focuses on mergers and acquisitions, organic growth, and share buybacks when free cash flow yield exceeds 10% [12] - Major structural management changes have been made in the Bombshells team, with options being considered to improve performance, including seeking an operational partner or selling the business [84] Management's Comments on Operating Environment and Future Outlook - Management believes the worst of the same-store sales declines is behind them, with expectations for improvement during March Madness [93] - The company is facing macroeconomic uncertainty, affecting customer confidence and spending [52][27] - Management remains confident in their ability to reach future targets despite current disappointing numbers [90] Other Important Information - The company is evaluating a number of acquisition targets but faces challenges in determining fair value due to owners wanting to be compensated based on post-COVID highs [82] - The company has made significant progress in its cost-cutting initiatives, aiming to reduce expenses by over $2 million in the current quarter [97] Q&A Session All Questions and Answers Question: What is the status of the licensing for the casinos? - Management is not worried unless other licenses are issued to competitors, indicating a normal flow of operations [100][152] Question: Can you discuss the budget for the casinos? - The overall budget for both properties is about $20 million, with approximately $10 million remaining to spend [131] Question: How is the new strategic partner for AdmireMe expected to impact costs? - The new partnership is expected to cut costs by about $0.5 million annually, contributing to overall expense reductions [97] Question: What are the plans for Bombshells to improve performance? - A new Director of Operations has been hired to focus on customer service and promote a fun atmosphere, with structural changes being implemented [94]

Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 RCI HOSPITALITY HOLDINGS, INC. (Exact name of registrant as specified in its charter) (State or other jurisdiction of incorporation or organization) Texas 76-0458229 (I.R.S. Employer Identification No.) 10737 Cutten Road FORM 10-Q x QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended December 31, 2023 o TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) ...

RCI Hospitality Holdings, Inc. (NASDAQ:RICK) Q4 2023 Earnings Conference Call December 14, 2023 4:30 PM ET Company Participants Mark Moran - Chief Executive Officer, Equity Animal Eric Langan - Chairman, President and Chief Executive Officer Bradley Chhay - Chief Financial Officer Conference Call Participants Scott Buck - H.C. Wainwright Anthony Lebiedzinski - Sidoti & Company Robert McGuire - Granite Research Adam Wyden - ADW Capital Management Mark Moran Greetings and welcome to RCI Hospitality Holdings ...

Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-K x ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended September 30, 2023 o Transition report under Section 13 or 15(d) of the Securities Exchange Act of 1934 Commission file number: 001-13992 RCI HOSPITALITY HOLDINGS, INC. (Exact name of registrant as specified in its charter) (State or other jurisdiction of incorporation or organization) Texas 76-045 ...

Building a portfolio of well-managed, high cash-flowing nightclubs and restaurants Today's Speakers Bradley Chhay Chief Financial Officer RCI Hospitality Holdings, Inc. @BradleyChhay 2 • Go To: @RicksCEO on X: https://x.com/RicksCEO • Select this X Space: https://x.com/i/spaces/1kvJpmbgaWmxE • Note: You can also use traditional phone and webcast for listen-only access – see our earnings news release for details NASDAQ: RICK | 3Q23 Conference Call | August 9, 2023 | www.rcihospitality.com | @RCIHHinc Eric La ...

RCI Hospitality Holdings, Inc. (NASDAQ:RICK) Q3 2023 Earnings Conference Call August 9, 2023 4:30 PM ET Company Participants Mark Moran - Chief Executive Officer, Equity Animal Eric Langan - Chairman, President and Chief Executive Officer Bradley Chhay - Chief Financial Officer Conference Call Participants Scott Buck - H.C. Wainwright & Co., LLC Anthony Lebiedzinski - Sidoti & Company, LLC. Lynne Collier - Water Tower Research Robert McGuire - Granite Research Joseph Gomes - Noble Capital Markets Mark Moran ...

Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q x QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended June 30, 2023 o TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 Commission File Number: 001-13992 RCI HOSPITALITY HOLDINGS, INC. (Exact name of registrant as specified in its charter) (State or other jurisdiction of incorporation or organization) Tex ...

RCI Hospitality Holdings, Inc. (NASDAQ:RICK) Q2 2023 Earnings Conference Call May 10, 2023 4:30 PM ET Company Participants Mark Moran - Chief Executive Officer, Equity Animal Eric Langan - President & Chief Executive Officer Bradley Chhay - Chief Financial Officer Conference Call Participants Scott Buck - H.C. Wainwright Anthony Lebiedzinski - Sidoti Lynne Collier - Water Tower Research Rob McGuire - Granite Research Joe Gomes - Noble Capital Markets Adam Wyden - Individual Shareholder Operator Greetings an ...

As used herein, the "Company," "we," "our," and similar terms include RCI Hospitality Holdings, Inc. (RCIHH) and its subsidiaries, unless the context indicates otherwise. Nightclubs Segment $30.8 $41.0 $40.3 $46.8 $48.2 $54.7 $56.6 $56.3 $57.0 2Q21 3Q21 4Q21 1Q22 2Q22 3Q22 4Q22 1Q23 2Q23 Revenues ($M) Operating Margin As % of Segment Revenues 10% 25% 40% 55% GAAP Non-GAAP 2Q23 2Q23 vs.1Q23 • Non-GAAP operating margin -1.1 ppts largely reflecting 2 weeks of Baby Dolls-Chicas Locas acquisition which did not a ...