Transcript New Rick’s Logo - RCI Hospitality Holdings Inc

SAFE HARBOR
Certain statements contained in this presentation regarding Rick's Cabaret future operating
results or performance or business plans or prospects and any other statements not
constituting historical fact are "forward-looking statements" subject to the safe harbor
created by the Private Securities Litigation Reform Act of 1995. Where possible, the words
"believe," "expect," "anticipate," "intent," "would," "will," "planned," "estimated," "potential,"
"goal," "outlook," and similar expressions, as they relate to the company or its management
have been used to identify such forward-looking statements. All forward-looking
statements reflect only current beliefs and assumptions with respect to future business
plans, prospects, decisions and results, and are based on information currently available to
the Company. Accordingly, the statements are subject to significant risks, uncertainties
and contingencies, which could cause the Company‘s actual operating results,
performance or business plans or prospects to differ materially from those expressed in, or
implied by, these statements. Such risks, uncertainties and contingencies include, but are
not limited to, risks and uncertainties associated with (i) operating and managing an adult
business, (ii) the business climates in cities where the company operates, (iii) the success
or lack thereof in launching and building the company’s businesses, (iv) the operational
and financial results of the company's adult nightclubs, (v) conditions relevant to real
estate transactions, (vi) the loss of key personnel, and (vii) laws governing the operation of
adult entertainment businesses. Additional factors that could cause the Company’s results
to differ materially from those described in the forward-looking statements are described in
forms filed with the SEC from time to time and available at www.ricksinvestor.com or on the
SEC's internet website at www.sec.gov. Unless required by law, Rick's Cabaret does not
undertake any obligation to update publicly any forward-looking statements, whether as a
result of new information, future events, or otherwise.
Definition of Adjusted EBITDA
During this Conference Call you may hear us refer to Adjusted EBITDA. We
consider Adjusted EBITDA to be a key metric to measure our performance.
It is a financial statement measure that was not derived in accordance with
GAAP. In calculating Adjusted EBITDA the company excludes the largest
recurring non-cash charge, depreciation, amortization and impairment
charges. Adjusted EBITDA provides a core operational performance
measurement that compares results without the need to adjust for Federal,
state and local taxes, which have considerable variation between
domestic jurisdictions. Also, the company excludes interest cost in the
calculation of Adjusted EBITDA. The results are, therefore, without
consideration of financing alternatives of capital employed. The company
uses Adjusted EBITDA as one guideline to assess unleveraged performance
return on investments. Adjusted EBITDA is also the target benchmark for
acquisitions of nightclubs.
CONFERENCE CALL OVERVIEW
August 9, 2012
• Summary of Q3
• Chief Drivers of Revenue,
Earnings, EBITDA & Cash Flow
• Discussion of Joint-Venture and
Jaguars Deal
• Outlook for Remainder of 2012
• Q&A
SNAPSHOT: Q3 ‘12 vs
‘11
• Q3 ‘12 Revenue Rose 15% to $23.9
million vs $20.8 million in Q3 ‘11
• Q3 ’12 Same Store Sales Rose 5% over
Q3 ‘11, to $21.3 million
• Q3 ’12 Income from Continuing Ops
(Without Legal Settlement and Loss on
Sale of Assets) $2.2 million vs. $2.5
million in Q3 ’11
… SNAPSHOT (Cont.)
• Q3 ’12 Adjusted EBITDA* $5.7 million
(Without Legal Settlement or Loss on Sale
of Assets), vs. $6.0 million in Q3 ‘11
• Q3 ’12 Expenses Include One-Time Cost
of $200k to Settle a Lawsuit and Loss on
Sale of Assets of $332k
• Exclusive of Legal Settlement and Asset
Sale, Operating Margins Were 19.1% vs.
21.1% in Previous Quarter
NINE MONTHS SNAPSHOT
 Revenues Rose 15% for First Nine
Months 2012 to $71.4 million vs. $62.0
million in 2011
 Cash Flow from Operations for First
Nine Months was $14.1 million vs. $13.8
million in 2011
 EPS for First Nine Months 63 cents vs. 59
cents
Current Update
• Strong Growth at Our Biggest Club,
Tootsie’s Cabaret in Miami
• Rick’s Cabaret at DFW Airport
Continues to Build
• Club Onyx in Philly and Charlotte
are Resuming Growth
DEBT UPDATE
 Current Debt 6/30/12 at $43.5 million,
of which $27.5 million is Real Estate
 We Reduced Debt by $3.6 million in
Three Months ended 6/30/12
 Jaguars Transaction Will Add $32
million to Total Debt, $10 million of
which is for Real Estate, Covered by
Added Cash Flow
IMPACT OF JAGUARS DEAL
 Jaguars Transaction Will Add 11 Clubs to
Existing 24 Clubs
 Should Add $15 million in Revenue and
$7 million in Adjusted EBITDA
 Should Be Quickly Integrated As Most
Are in Texas, Where We Have
Management Strength and Experience
EXPLORING NEW CONCEPTS
 Looking Closely at Two New
“Breastaurant” Nightclub Concepts
 Would Be in Markets such as Dallas-Ft.
Worth Where We Are Already Strong
 Plan to Invest Up to $4 million in Next
Two Years
 Will Also Look for Acquisition
Candidates in “Breastaurant” Niche
Forward Growth Strategy
• Focus on Smooth Integration of Jaguars
• Continue Emphasis on Organic Growth &
Cash Generation
• Continue to Explore Acquisitions that Are
Accretive to Profit and Shareholder Value
• Los Angeles Will be Operated by Our Joint
Venture Partner
• Continue to Look for Joint Venture Partners
With Right Groups to Enter Markets We
Currently Do Not Serve
Outlook
• We Are Focused on Generating
Positive Cash Flow
• Goal is 30% Growth Rate for Next 3
Years
• Reviewing Best Uses of $60 million+
Real Estate Value Currently Owned
to Maximize Income Potential
• Remain Highly Confident in Our
Management & Our Business Model
THANK YOU!
Visit Rick’s Cabaret NYC Tonight for Additional
Due Diligence
5O W. 33rd St.
For more information please visit
www.ricksinvestor.com