RCI Hospitality (RICK) investor relations material

Executive summary

• Third quarter revenue was $71.1M, down 6.6% year-over-year, with Nightclubs nearly flat and Bombshells down 34.5% due to divestitures and economic uncertainty.

• Net income for the quarter was $4.1M, reversing a $5.2M loss in the prior year; EPS improved to $0.46 from $(0.56), and non-GAAP EPS was $0.77 versus $1.35.

• Profitability improved due to the absence of impairment charges, partially offset by other factors.

• Strategic acquisitions and new club openings continued, with share repurchases reducing shares outstanding by 5.2% year-over-year.

• Economic uncertainty, tariffs, and tax changes continued to impact customer spending and segment performance.

Financial highlights

• Adjusted EBITDA for Q3 was $15.3M, down from $20.1M year-over-year; year-to-date Adjusted EBITDA was $45.2M, down 17.4%.

• Free cash flow for Q3 was $13.3M, nearly flat year-over-year; year-to-date free cash flow was $32.3M, down from $35.3M.

• Debt at quarter-end was $241.3M, nearly flat sequentially.

• Quarterly dividend payments increased to $0.07 per share from $0.06 last year.

• Consolidated operating income was $8.7M (12.2% margin), up from a $2.5M loss in 3Q24.

Segment performance

• Nightclubs: Q3 revenue $62.3M (down 0.8%), operating income $17.8M (28.5% margin); SSS declined 3.7%, offset by $2.6M from new clubs.

• Bombshells: Q3 revenue $8.6M (down 34.5%), operating income $87K (1.0% margin) vs. a loss of $8.9M in 3Q24; SSS down 13.5%.

• Corporate: Expenses increased to $8.7M (12.2% of revenue), reflecting higher self-insurance reserves.