Financial Data and Key Metrics Changes - Total revenues for the fourth quarter were $79 million, an increase from $73.2 million, primarily due to five fewer Bombshells locations, partially offset by new nightclub locations [5][6] - Corporate expenses rose to $15.4 million from $7.1 million, mainly due to the establishment of a legal reserve [5] - Net income attributable to common shareholders was a loss of $5.5 million compared to a profit of $244,000, with loss per share at $0.63 compared to a positive EPS of $0.03 [6] - Adjusted EBITDA decreased to $7.4 million from $17.9 million [6] Business Line Data and Key Metrics Changes - Nightclub revenues totaled $60.9 million, up 0.4%, driven by contributions from new clubs and rebranded Texas clubs, despite declines in same-store sales [8] - Bombshells segment revenues decreased to $9.4 million, down $2.6 million, due to fewer locations and declines in same-store sales [9][10] - Operating income for nightclubs increased to $16.3 million with a margin of 26.8%, compared to 21.5% [9] Market Data and Key Metrics Changes - The company reported a cash and cash equivalents balance of $33.7 million, up $4.4 million from the previous quarter [12] - Debt declined to $5.5 million, with a weighted average interest rate of 6.64% [12] Company Strategy and Development Direction - The company is focused on a five-year capital allocation plan, allocating approximately 40% of free cash flow to club acquisitions and 60% to share buybacks, debt reduction, and dividends [13][14] - The goal is to grow free cash flow per share by 10%-15% annually, with a focus on optimizing the nightclub portfolio by divesting underperformers [13][14] - For Bombshells, the strategy is to improve existing locations and target a 15% operating margin [15] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the current operating environment, noting solid performance in January and February, despite challenges from economic factors [28][29] - Concerns about oil prices were mentioned, but management believes it will not significantly impact operations [29] - The company is seeing competitive pricing from liquor companies, which is beneficial for costs [29] Other Important Information - The company has made significant changes to the Bombshells concept, aiming to return to its roots as a sports bar with a focus on alcohol sales [56][57] - The legal reserve established this quarter is approximately $9 million, which management believes will mitigate future surprises in legal expenses [35][38] Q&A Session Summary Question: When will the next quarterly filing be? - Management anticipates filing the 10-Q in April, pending auditor completion [22][23] Question: How is the current environment affecting clubs and Bombshells? - Management reported solid performance but noted challenges from economic factors and travel disruptions [28][29] Question: How does the company balance capital allocation between acquisitions, debt repayment, and share buybacks? - The company is currently prioritizing share buybacks due to favorable valuations [44] Question: What is the current valuation of real estate assets? - Management clarified that the valuation for Bombshells operations real estate is in the $65 million-$85 million range [48]

Financial Data and Key Metrics Changes - Total revenues for the fourth quarter were $79 million, an increase from $73.2 million, primarily due to five fewer Bombshells-related locations, partially offset by new nightclub locations [5][6] - Corporate expenses rose to $15.4 million from $7.1 million, mainly due to the establishment of a legal reserve [5] - Net income attributable to common shareholders was a loss of $5.5 million compared to a profit of $244,000, with loss per share at $0.63 compared to a positive EPS of $0.03 [6] - Adjusted EBITDA decreased to $7.4 million from $17.9 million [7] Business Line Data and Key Metrics Changes - Nightclub revenues totaled $60.9 million, up 0.4%, driven by contributions from new clubs and smaller rebranded clubs, despite declines in same-store sales [8] - Bombshells segment revenues decreased to $9.4 million, down $2.6 million, due to fewer locations and declines in same-store sales [9] - Operating income for nightclubs increased to $16.3 million with a margin of 26.8%, compared to 21.5% [9] Market Data and Key Metrics Changes - The company reported a free cash flow margin of 18%, virtually level with the year-ago quarter [12] - Debt declined to $5.5 million, with a weighted average interest rate of 6.64% compared to 6.67% in the year-ago quarter [12] Company Strategy and Development Direction - The company is focused on a five-year capital allocation plan, allocating approximately 40% of free cash flow to club acquisitions and 60% to share buybacks, debt reduction, and dividends [13][14] - The goal is to grow free cash flow per share by 10%-15% annually, with a focus on optimizing the nightclub portfolio by divesting underperformers [13][14] - The company aims to improve Bombshells' profitability and return to same-store sales growth, with a target of 15% operating margins [15] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the current operating environment, noting solid performance in January and February, despite challenges from economic factors [28] - Concerns about oil prices were mentioned, but management believes it will not significantly impact operations [29] - The company is seeing competitive pricing from liquor companies, which is beneficial for business costs [29] Other Important Information - The company has made significant changes to the Bombshells concept, aiming to return to its roots as a sports bar with a focus on alcohol sales [54][55] - The company plans to generate over $250 million in free cash flow over five years and repurchase a significant quantity of shares [16] Q&A Session Summary Question: When will the next quarterly report be filed? - Management anticipates filing the 10-Q in April, pending auditor completion [23][25] Question: How is the current environment affecting clubs and Bombshells? - Management reported solid performance and noted that business travelers are increasingly visiting clubs due to travel disruptions [28][29] Question: How does the company balance capital allocation between acquisitions, debt repayment, and share buybacks? - The company is currently prioritizing share buybacks due to favorable pricing, using 100% of free cash flow for this purpose [42][43] Question: What is the current valuation of real estate assets? - The company clarified that the valuation for Bombshells operations real estate is between $65 million and $85 million, while non-income-producing assets are valued around $30 million [46]

Building a portfolio of well-managed, high cash-flowing nightclubs and sports-bar restaurants NASDAQ: RICK | 4Q25 Conference Call | March 19, 2026 | www.rcihospitality.com | @RCIHHinc Today's Speakers Travis Reese Interim President & CEO RCI Hospitality Holdings, Inc. Albert Molina Interim CFO RCI Hospitality Holdings, Inc. 2 X Spaces Instructions Or 3 This presentation also may contain forward-looking statements that involve a number of risks and uncertainties that could cause the Company's actual results ...