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Acquisition Details - RCI Hospitality Holdings Inc acquired Flight Club, a premier gentlemen's club in Detroit, for a total purchase price of $11 0 million, including $3 0 million cash and $5 0 million seller financing at 8 0% for the club, and $3 0 million cash for associated real estate [2] - The acquisition is expected to contribute an estimated $2 0 million in annualized adjusted EBITDA [2] - Flight Club is a two-story, 10,000-square foot establishment located at 29709 Michigan Avenue, Inkster, MI, established in 1997 and recently renovated [2] Strategic Fit and Management Commentary - The acquisition aligns with RCI Hospitality's portfolio of high-end clubs with restaurants in major cities and is the first club purchase since the launch of the company's 5-Year 'Back to Basics' Capital Allocation Plan [2] - Eric Langan, President and CEO of RCI Hospitality Holdings Inc, stated that Flight Club is a well-established business that should benefit from the company's marketing, purchasing, and systems expertise [2] Company Overview - RCI Hospitality Holdings Inc, through its subsidiaries, operates more than 60 locations and is the leading company in adult nightclubs and sports bars-restaurants in the country [3] - The company's brands can be viewed at www rcihospitality com [3]

During the initial beta phase, Favoritely.com was rolled out to entertainers and fans at five clubs in the Houston-San Antonio area in Texas—Chicas Locas Houston, Club Onyx Houston, Heartbreaker's Club in Dickinson, Scarlett's Cabaret San Antonio, and Temptations Cabaret Beaumont. "Everybody loved it," said RCI President and CEO Eric Langan. "The service worked well. We received positive feedback. Favoritely.com fills a void in the adult club industry. Fans can follow their favorite entertainers between vis ...

Core Insights - RCI Hospitality Holdings, Inc. reported an increase in same-store sales for Nightclubs for the third consecutive quarter, while Bombshells experienced a decline in total sales due to divestitures and closures of underperforming locations [1][2]. Group 1: Financial Performance - Nightclubs total sales reached $61.3 million, reflecting a year-over-year increase of 1.2%, with same-store sales up by 3.7% compared to 1Q24 [1]. - Bombshells total sales were $9.6 million, showing a significant decline of 24.7%, with same-store sales down by 7.5% compared to 1Q24 [1]. - Combined sales for both segments totaled $70.9 million, representing a decrease of 3.3%, while same-store sales increased by 2.3% [1]. Group 2: Operational Changes - The increase in Nightclubs sales was attributed to the rise in same-store sales, the opening of three new and reformatted clubs in Texas, and the absence of a club due to a fire incident in July 2024 [1]. - Bombshells' sales decline was primarily due to the divestiture and closure of five locations during 4Q24 and 1Q25, alongside a full quarter of operations from the Stafford, TX location that opened in mid-November 2023 [2]. Group 3: Company Overview - RCI Hospitality Holdings, Inc. operates more than 60 locations and is recognized as a leading company in the adult nightclubs and sports bars-restaurants sector in the United States [4].

Financial Data and Key Metrics - Fourth quarter nightclub same-store sales increased for the second consecutive quarter, marking the first time since the first half of fiscal 2023 [7] - Total company sales declined due to hurricane and fire-related closures, resulting in lower EPS [7] - Non-GAAP EPS, net cash provided by operating activities, and free cash flow all increased [7] - The company ended fiscal year 2024 with 8.955 million shares outstanding, a reduction of 4.7% year-over-year [7] - Fourth quarter sales declined by $2 million, largely due to hurricane-related closures and the sale of Bombshell San Antonio [18] - Non-GAAP EPS increased by $1.63, net cash provided from operating activities increased by $3.5 million, and free cash flow increased by $2 million, while adjusted EBITDA declined by $2.3 million [18] Business Line Performance - Nightclub revenues declined by $307,000, primarily due to a 2.2% same-store sales growth, 10 closure days at Houston area clubs due to Hurricane Beryl, and other changes to improve the club lineup [19] - Bombshells revenues declined by $1.643 million, primarily due to a 16.2% same-store sales decline, negatively affected by 26 closure days at Houston area locations due to Hurricane Beryl [21] - Corporate expenses increased modestly by $284,000 [22] Market Performance - The company ended the fourth quarter with cash and cash equivalents of $32.4 million [23] - Debt at September 30th declined by $7.2 million from June 30th, reflecting eliminations of Bombshell San Antonio debt, early paydown of $1.5 million of the Playmate note, and other scheduled amortized paydowns [24] - The weighted average interest rate was 6.67%, only 3 basis points higher than a year ago [24] Strategy and Industry Competition - The company has officially launched its Back-to-the-Basics five-year plan, focusing on core nightclub businesses and making new acquisitions [8] - The plan includes divesting underperforming Bombshells locations, closing the Denver food hall, reducing Bombshells-related debt, and discontinuing franchising [8] - The company expects to generate more than $250 million of free cash flow over the next five years, allocating 50% to club acquisition and 50% to share buybacks and dividends [10] - The fiscal 2029 targets include hitting $400 million in revenue, $75 million in free cash flow, and reducing the share count to 7.5 million or less [11] Management Commentary on Operating Environment and Future Outlook - The company is focusing on improving the performance of existing Bombshells locations and finishing the last three units under construction [12] - The company is evaluating every club in its portfolio and will rebrand, reformat, or divest underperforming locations [12] - The company is targeting 15% operating margins for Bombshells with a return to same-store sales growth [12] - The company is planning small dividend increases annually and expects to buy a significant amount of stock if the price is right [13] Other Important Information - The company has seven remaining developments, including Bombshells Denver, Chicas Locas El Paso, Rick's Cabaret in Central City, Bombshells Lubbock, and Bombshells Rowlett [26] - The company is awaiting construction permits for Baby Dolls West Fort Worth and engineering review of plans for Baby Dolls Fort Worth to rebuild the club that burnt down [27] Q&A Session Summary Question: How does the company plan to grow after completing current developments? - The company plans to focus strictly on acquisitions for growth and does not anticipate building anything else in the near future [34] Question: What excites the company about the future of the business model with the new five-year plan? - The company is excited about getting back to its core business, focusing on clubs, and evaluating real estate offerings to determine the best use of capital [37] Question: How is Bitcoin integration looking at the company's locations? - The company is processing Bitcoin at some locations, converting it to US dollars at the point of transaction, and expects to see more Bitcoin transactions with the current high prices [40] Question: What is the M&A environment like for the company? - The company is working on three potential acquisitions and is focusing on smaller acquisitions between $5 million and $15 million purchase price [49] Question: Does the company have insurance for hurricane and fire-related damages? - The company carries insurance for its properties, but payouts depend on the extent of damage and deductibles [56] Question: Will the company consider increasing the dividend under the Back-to-the-Basics plan? - The company plans to continue slowly and gradually raising the dividend annually, with the majority of capital return being done through buybacks [60] Question: What is the purchased real estate value of the closed Bombshells in Denver food hall? - The Denver food hall was purchased for $5.2 million, and the company is marketing the real estate for sale [61] Question: What are the impairments and how do they affect the company? - Impairments are accelerated write-offs of various assets, primarily due to increasing interest rates, and do not affect the company's operations or free cash flow [64][66] Question: Are there plans to open restaurants in Yuma? - The company has no plans to open new restaurants beyond the current developments and will focus on acquiring existing nightclub operations [70] Question: What is the expected CapEx for 2025? - The company expects maintenance CapEx to return to normal levels, forecasting around $6 million for 2025 [86] Question: How does the company view its leverage and debt? - The company aims to keep its debt to EBITDA under three times and is actively working to reduce its debt load [92] Question: What are the current business trends? - November was strong with five weekends, and December started slow but picked up, with the company expecting a strong March Madness [102]

Building a portfolio of well-managed, high cash-flowing nightclubs and sports-bar restaurants NASDAQ: RICK | 4Q24 Conference Call | December 16, 2024 | www.rcihospitality.com | @RCIHHinc Today's Speakers Eric Langan President & CEO RCI Hospitality Holdings, Inc. @RicksCEO Bradley Chhay Chief Financial Officer RCI Hospitality Holdings, Inc. @BradleyChhay Mark Moran CEO Equity Animal @itsmarkmoran 2 X Spaces Instructions • Log in to: X (formerly Twitter) • Select this X Space: https://x.com/i/spaces/1DXGydpRR ...

United States Securities and Exchange Commission Washington, D.C. 20549 Texas 001-13992 76-0458229 (State or Other Jurisdiction of Incorporation) (Commission File Number) (IRS Employer Identification No.) Title of each class Trading Symbol(s) Name of each exchange on which registered Common stock, $0.01 par value RICK The Nasdaq Global Market FORM 8-K Current Report Pursuant to Section 13 or 15(d) of The Securities Exchange Act of 1934 Date of Report (Date of earliest event reported): October 8, 2024 RCI HO ...

Table of Contents Title of each class Trading Symbol(s) Name of each exchange on which registered Common stock, $0.01 par value RICK The Nasdaq Global Market 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, 2024 o Transition report under Section 13 or 15(d) of the Securities Exchange Act of 1934 Commission file number: 001-13992 RCI HOSPITALITY HOLDI ...

Core Insights - The company reported a decline in total revenues for 4Q24, with revenues of $73.2 million compared to $75.3 million in 4Q23, despite an increase in same-store sales for nightclubs [1][2] - Non-GAAP EPS increased to $1.63 in 4Q24 from $1.11 in 4Q23, indicating improved operational performance despite challenges [1][2] - The company plans to implement a "Back-to-Basics" capital allocation strategy focusing on nightclub acquisitions and returning capital to shareholders through buybacks [1][2] Financial Performance - Total revenues for FY24 were $295.6 million, slightly up from $293.8 million in FY23 [1] - Net income attributable to common stockholders decreased to $0.2 million in 4Q24 from $2.2 million in 4Q23, reflecting operational challenges [1][2] - Free cash flow increased to $13.2 million in 4Q24 from $11.1 million in 4Q23, demonstrating improved cash generation [1][2] Segment Analysis - Nightclubs segment revenues were $60.6 million, a slight decrease of 0.5%, with a same-store sales growth of 2.2% impacted by closures due to a hurricane [2] - Bombshells segment revenues declined by 12.1% to $11.9 million, with a significant same-store sales decline of 16.2% due to weather-related closures [2] - The corporate segment expenses increased to $7.1 million, reflecting higher operational costs [2] Capital Allocation Strategy - The company aims to allocate 50% of free cash flow towards nightclub acquisitions and the other 50% towards share buybacks and dividends [1][2] - The financial targets for FY29 include total revenues of $400 million and free cash flow of $75 million, with a goal to reduce shares outstanding to 7.5 million [1][2] Share Repurchase and Debt Management - In 4Q24, the company repurchased 174,790 shares for $7.8 million, reducing the total shares outstanding to 8.955 million [2] - Total debt decreased to $238.2 million as of September 30, 2024, down from $245.4 million at June 30, 2024, primarily due to debt elimination from the sale of Bombshells San Antonio [2]

Core Viewpoint - The article emphasizes the importance of value investing and highlights RCI Hospitality (RICK) as a strong stock opportunity based on its valuation metrics and earnings outlook [1][2][6] Group 1: Value Investing - Value investing is a preferred strategy for identifying strong stocks, utilizing fundamental analysis and traditional valuation metrics to find undervalued stocks [2] - Zacks has developed a Style Scores system to identify stocks with specific traits, particularly focusing on those with high grades in the "Value" category [3] Group 2: RCI Hospitality (RICK) Overview - RCI Hospitality currently holds a Zacks Rank of 2 (Buy) and an A for Value, indicating strong potential [4] - The stock has a Forward P/E ratio of 12.36, significantly lower than the industry average of 22.22, suggesting it may be undervalued [4] - RICK's Forward P/E has fluctuated between 8.63 and 61.17 over the past 12 months, with a median of 10.65 [4] - The P/B ratio for RICK is 1.72, which is attractive compared to the industry's average P/B of 4.83, indicating a favorable market value versus book value [5] - Over the past 52 weeks, RICK's P/B has ranged from 1.29 to 2.27, with a median of 1.64 [5] - These valuation metrics suggest that RICK is likely being undervalued, supported by a strong earnings outlook [6]