RCI Hospitality (RICK) investor relations material

Executive summary

• First quarter FY26 revenues were $70.8 million, nearly flat year-over-year, with Nightclubs up 0.9% and Bombshells down 12.6%; stable nightclub revenues and new venues offset closures and same-store declines.

• Net income swung to a loss of $4.7 million from a $9.0 million profit in the prior year, mainly due to $10.1 million in pre-tax net charges versus $3.2 million in net gains last year.

• Adjusted EBITDA remained flat at $15.7 million year-over-year.

• Over one million shares were repurchased as of May 1, 2026, reducing shares outstanding by 14.6% since September 2024.

• Significant legal and management changes occurred due to an indictment and ongoing investigations.

Financial highlights

• GAAP EPS was $(0.57) versus $1.01 in the prior year; non-GAAP EPS was $0.74 versus $0.80.

• Free cash flow dropped to $6.7 million from $12.1 million year-over-year; net cash from operating activities was $7.8 million, down from $13.3 million.

• Operating income fell to $11.0 million (15.6% margin) from $13.9 million (19.5% margin); non-GAAP operating income was $12.3 million (17.3% margin) versus $12.7 million (17.8% margin).

• Debt increased to $256.4 million, up 8.9% year-over-year, mainly due to seller-financing from an acquisition.

• Cash and cash equivalents at quarter-end were $28.6 million, down from $34.7 million a year ago.

Segment performance

• Nightclubs: Revenues rose 0.9% to $62.3 million, driven by new/reopened clubs; operating income was $18.7 million (30.0% margin), non-GAAP $19.5 million (31.3%).

• Bombshells: Revenues fell 12.6% to $8.4 million, with a $1.2 million decrease due to closures/divestitures; operating loss of $139,000 (-1.7% margin), non-GAAP loss of $110,000 (-1.3%).

• Corporate: Expenses dropped to $7.4 million (10.4% of revenues), mainly due to lower insurance costs.