RICK

Image source: The Motley Fool. Thursday, Aug. 6, 2026 at 4:30 p.m. ET Interim President and Chief Executive Officer - Travis Reese Interim Chief Financial Officer - Albert Molina Founder and Head of M&A - Eric Langan Investor Relations - Bradley Chhay Bradley Chhay: Good afternoon, greetings, and welcome to RCI Hospitality Holdings Third Quarter Conference Call. My name is Bradley Chhay. You can find the company's presentation on RCI's website. Go to Investor Relations section. All the links are at the top of the page. Please turn to Slide 2 of our presentation. RCI is making this call exclusively on X Spaces. [Operator Instructions] This conference is also being recorded. Please turn to Page 3. I want to remind everybody of our safe harbor statement. You may hear or see forward-looking statements that involve risks and uncertainties. Actual results may differ materially from those currently anticipated. We disclaim any obligation to update information disclosed in this call as a result of developments that occur afterwards. Please turn to Page 4. I also direct you to the explanation of RICK's non-GAAP financial measures. Please turn to Slide 5. Our speakers today are Travis Reese, Interim President and CEO; and Albert Molina, Interim CFO. Now I'm pleased to introduce Travis. [Audio gap] Albert Molina: Thank you, Travis. Turning to Slide 7. I'll start with a review of our consolidated results. All comparisons are year-over-year for the quarter, unless otherwise noted. Total revenues were $73.9 million compared to $71.1 million, a 4% increase. Impairments and other charges net were insignificant compared to $2.3 million. Net income attributable to RCIHH shareholders was $6.4 million compared to $4.1 million, a 57% increase. GAAP EPS was $0.83, an 80% increase and non-GAAP was $0.90 per share, a 17% increase. Net cash provided by operating activities and free cash flow were $2.5 million and $2.7 million lower, respectively. This primarily reflected payments of more outstanding payables compared to prior year quarter. On a sequential quarter basis, both net cash provided by operating activities and free cash flow were 14% and 26% higher, respectively. Adjusted EBITDA was $16.9 million, an increase of 10% year-over-year and 9% sequentially. Moving to Slide 8. I will now cover our results by segment, Nightclubs first. Revenues increased by 1% to a record $63 million. Four newly acquired opened and reformatted clubs generated $4 million and the 52 clubs in same-store sales produced $58.5 million. These more than offset $1.2 million in sales from 4 clubs closed subsequent to the year-ago quarter. By revenue type, service increased by 7.6%, food, merchandise and other declined by 1.4% and alcoholic beverages declined by 4.2%. Operating income was $19.6 million compared to $17.9 million with margin at 31.2% of segment revenues compared to 28.6%. Non-GAAP operating income, which excludes impairment and other net charges, was $20.2 million compared to $20.8 million with margin at 32.1% of segment revenues compared to 33.3%. On Slide 9 are the results for the Bombshells segment. Revenues increased by 25.4% to $10.8 million. Three new locations generated $2.6 million and the 9 location same-store sales produced $8.2 million. By revenue type, alcoholic beverages increased by 33.6% and food and other increased by 16.6%. Profitability improved substantially as we increased higher-margin beverage sales and improved operating leverage across the segment. Operating income was $759,000 compared to $67,000 with margin at 7% of segment revenues compared to 0.8%. Non-GAAP operating income was $801,000 compared to $80,000 with margin at 7.4% of segment revenues compared to 0.9%. Moving to Slide 10, you will see the summary of our corporate expenses. GAAP operating expenses declined by 19.7% or $1.8 million and 16.3% or $1.4 million on a non-GAAP basis. Both the GAAP and non-GAAP declines reflected a year-over-year reduction in insurance expense. Please turn to Slide 11. We have slides coming up that discuss free cash flow and adjusted EBITDA, which are non-GAAP. In advance of that, we wanted to present the closest GAAP equivalents, which are operating income, net cash provided by operations and net income. Slide 12, please. We ended the quarter with cash and cash equivalents of $26.4 million, down by less than $0.5 million from March 31. Our strong cash generation during the quarter enabled us to make debt paydowns of $8.6 million as well as buy back $1 million worth of shares. Free cash flow margin was 14%, improving for the second consecutive quarter and adjusted EBITDA margin was 22%, improving for the third consecutive quarter. Please turn to Slide 13. As I mentioned, debt declined from March 31, reflecting paydowns across all categories. The weighted average interest rate was 7.05%, which would be considered to be a very good rate for commercial real estate these days. Total occupancy cost of 8.3% declined sequentially. Debt to trailing 12-month adjusted EBITDA was 4.3x. Excluding the fourth quarter legal accrual, debt-to-EBITDA was 3.7x. Both are down from the second quarter. Debt maturities continue to remain reasonable and manageable, particularly with our plans to sell nonincome-producing properties. Now back to Travis. Travis Reese: [Technical Difficulty] Bradley Chhay: Thank you, Travis and Albert. Eric Langan, RCI's Founder and Head of M&A will also be on the Q&A. [Operator Instructions] Please understand we cannot discuss the legal situation in New York other than to reiterate the company's statement that RCI, the individuals involved and the 3 clubs have pled not guilty to all of the charges and are taking all necessary actions to defend themselves. Furthermore, I've also been told that we've experienced some technical issues, so a transcript will be posted shortly as soon as we're able to, to reflect what was said on this call. So I'll start taking questions. I'm going to go ahead and bring in Orchard Wealth. Travis Reese: He still shows as listener. Bradley, you have to promote him to speaker, please. Bradley Chhay: He's on mute. Orchard Wealth, can you hit unmute? You're speaker now. Travis Reese: He's still shown as a listener on my screen, guys. So I don't know maybe you can promote him again. Bradley Chhay: I'm going to go ahead and remove him from speaker and bring him back. Orchard Wealth, you can hear me, go ahead, you're a speaker now. Travis Reese: Promote somebody else to see if that work as he is still showing listener on my screen still. So let's see if somebody else can be moved to speaker. Bradley Chhay: Maxwell Ellis, I'm going to go ahead and pull you up. Maxwell Ellis: Can you hear me? Bradley Chhay: Yes, we can hear you. Maxwell Ellis: It seems like the call that you guys just did, I've spoken to multiple people. It seems like every 6 seconds, you could hear something and then every 2 or 3 seconds, it would go completely blank. So literally half the call that you guys just did, nobody heard anything. My main concern for right now is how long before you guys are paying down debt at the accelerated rate before you can begin buybacks again? Because at this current rate and the prices, it's just... Travis Reese: I agree with you. The prices are extremely favorable for stock buybacks right now. However, I was -- got very uncomfortable with a 4.17 debt-to-EBITDA ratio. So I wanted to get that knocked down. We also had some very timely payments to be able to pay down a few things to prepare for making some acquisitions here, hopefully, in the next 3 to 6 months. So we wanted to kind of line those things out right. And so we decided to take a small break from buying back stock. As you see, we bought through April. We slowed down in May, and we basically -- May and June basically just mainly paid debt. The real story, I mean, I know we say 3 months here, but if you look in the last 6 months, we paid down $16 million worth of debt. And through the debt schedule, you see we plan to pay another $8 million this quarter. So we paid down almost $24 million in this brief period of time. We've got a property sale that should happen in September that will probably pay another $1 million. So our 3-month total should be a reduction of debt of almost $25 million, which should put our ratio -- we just refinanced 2 things that we're going to see coming up in the next quarter where we moved some maturity dates and changed some terms, paid off some 12% money to lower our -- some of our debt service ratios. And we look forward to hopefully -- I'm hoping we're back in the market around the 1st of October as we start into the next fiscal year. Maxwell Ellis: Okay. And then it seems like you've had a big turnaround in Bombshells, especially within -- I guess, it seems like you guys have flipped from being a restaurant back to being a bar that sells food. What have you specifically done that's been catching on? Because it seems like you started with that one that you were managing and it's kind of increasing across the footprint. Travis Reese: Yes. I'm getting a bunch of messages that people are still not hearing this call. I have not missed a single word of the call, and I'm in Colorado on a basic WiFi connection on my cell phone. So I don't know. But to give you an idea of what we've done is we went back to our core. We started the concept almost 15 years ago in Dallas, Texas. And the idea was to make a fun bar-type atmosphere with sports and girls and great food with no nudity that we could take and expand around the country. I think after COVID, everybody had to become restaurants. And I think that too much of that got into our culture. So what we've really done is massively changed the culture of Bombshells. I brought in a new Director of Operations for Bombshells, who was a club guy. He's been in the club business since he was 18 years old. He understands fun. He understands creating the party, not joining the party. And we've kept enough of the food guys to keep the food at a quality level and just slowly transform the concept back to what it was supposed to be and what it should have probably always been. We were doing some major expansions in '21 and '23 with these 2 large acquisitions, $88 million acquisition, a $66.5 million acquisition. And so I think a lot of our focus was on that club growth. And we just kind of -- the Bombshells kind of slid into a rut. We kept telling you need to change this, and you need to do that. And of course, the team that we had at the time was very good at restaurant business, but just not the club side. To give you an example of what we've done is we've taken stores that were around 50-50 food and beverage to 62% to 64% beverage and still -- and increasing revenue at the same time. So it's not like we're getting rid of the food business or losing the food business. We're actually generating more food business as well, but we're also making it a fun place to be again and a fun place to be late night. So come in at 10:30, 11:30, 12:30 at night and fill those hours back up, which as a restaurant, there was almost no business during those hours. Those hours have slipped off to -- they were -- the group was actually -- the previous management was actually trying to tell us that we should close at midnight. And so we -- because restaurants -- that's when we really got the concept of let's go fix this thing, let's go turn it back into the bar. Let's take it back to the original core of the concept, and we've done very, very well with that. April same-store sales were negative. I don't know this store -- we took over February, mid-February, I went into a store with another manager. We started working that one store, fixing the things, changing things of the concept. We took that to 3 stores in March. And about mid-April, we launched that across the -- all 11 stores as we prepare to open the store in Rowlett and make sure that it opened properly with the right party attitude and atmosphere from the very get-go. And we're seeing the results in it. And I think you'll see improved results again this quarter based on what we've done in July so far. And I think once football season starts, it's going to get even better. Maxwell Ellis: My other thing is, what's the update right now on the Dallas club that burned down and you guys making progress with like rebuilding? Travis Reese: The Fort Worth club, we're still working to replat that property. We've had some issues with the city. That property was built in the 1970s originally. There's sewer -- no sewerage there. So we're on a septic tank. Of course, the laws have changed on septic tanks. So we're working through those processes as well. So I think it's going to be a while before we can start construction there. And once we start construction, it will be 9 months to build. We have started construction on the Baby Dolls West Fort Worth location on Mark IV. That construction is going. They just recently passed -- I don't know what you actually call it, but it's basically the rough-ins. So all of the plumbing and stuff that are all underground, all of that has been done, and they've got permission to start filling that in and should be going -- working on most of the vertical stuff here soon. I suspect that location will open around May 1. Maxwell Ellis: Okay. And then in terms of like the clubs that you do have, I remember you were giving like some stat about how like a certain amount of clubs equal 80%, like some Pareto principle between the profitability. Do you guys have any clubs that you think you'll be like trimming off and selling real estate on? Travis Reese: We have a couple that we -- as you know, we got rid of Harlingen. We got rid of Edinburg, El Paso location. We have a couple of locations that we're in negotiations with, to possibly sell those locations. That doesn't mean every location is for sale for the people that are listening that want to buy every club that we own. We will know when a club is for sale. We're not marketing. We're just -- it's going to be a random club here or there, and we'll market it through a broker so that you'll absolutely know that it's for sale when we make that final decision. But it's not a lot. It's just a couple of small locations. They're in very small markets, and we're focusing on our larger markets. Our acquisitions that we're working on are larger market acquisitions that will be very accretive for us. And we're taking it very slow because right now, we do believe that buying our own clubs is absolutely the best use for our money. So... Maxwell Ellis: Yes. And then how much more -- how many more payments do you have to do to Adam? Travis Reese: I think we're down to $15 million or so, $14 million, $15 million. So it was $1 million a month, so 14, 15 more months. Maxwell Ellis: Okay. So you guys are making -- so basically, you've been paying about -- you pay $1 million to Adam, which at some point will stop and that will be added back into profits. And then you've been accelerating debt payments of about, what, $0.5 million per month also. So like literally this quarter... Travis Reese: Well, we paid down our line of credit, yes. But our line of credit, I think, after August will be paid down to $100,000. So we will not be making additional payments on that anymore. So we're going to have to kind of look and see where we want to put the other money. I know that we have a property that's supposed to sell in September. If it closes, we'll pay down about $900,000 in bank debt, and we'll probably pay $1 million on the ADW. So that will take 1 month off of that, plus save us the 12% interest over 15 months. So we'll get a nice savings off of that and still put a little -- not much, but a little bit of cash in the bank on our side as well. We are in negotiations on multiple other properties. I've been working with brokers. We're accepting cash offers. We're looking to lease some of the properties that haven't been able to sell in the last 6 months, put a tenant in them, see if we can sell them once we put the tenant in or just keep it and collect rents if the ROI is good enough. So those are things we're -- we've definitely been working on that non-income-producing property. So I think that's a lot of value that we can unlock over the next 6 to 12 months. Hopefully, I mean, look, interest rates and the oil prices and the uncertainty with the Iran war is definitely not helping commercial real estate sales. So that is part of the issue, I believe. Because like I said, we have a lot of people looking -- we're talking to a lot of groups on a bunch of our properties in multiple areas. And a lot of it is can they get the financing, find the financing at the right prices and whatnot. So that's what we're up against. But I'm hoping those headwinds will die down here, especially as we move closer to the election and right after the first of the year. I look very forward to hopefully seeing that settle down so we can move some more of these properties. Maxwell Ellis: With the club sales, are they kind of pretty much in line? Or is there like a hotter area than the other geographically. Travis Reese: What do you mean the club sales? Maxwell Ellis: In terms of just the revenues that you guys are bringing in from the club side of the business. Travis Reese: Club revenues. No, it's pretty spread around the country. I mean, one area gets hot, another area slows down a little bit. A lot of it has been sports-based in the last few months that we've seen with the World Cup. And of course, with the Knicks in the NBA finals and winning the NBA finals, that's definitely affected New York and helped New York. But it also -- the games helped the Bombshells. They helped the clubs in Miami as people come in to watch the games and watch the New York Knicks. So it probably didn't help us in Chicago because those fans probably aren't Knicks fans, but there's enough Knick fans in other parts of the country, I think, that it did very well for us. And then, of course, the World Cup, I mean, the most matches were in Dallas, right next to the Bombshells in Arlington and 2 of our clubs in that area, which did very well during those World Cup games. We had games in Houston. We had games in Miami. We had games in New York that all helped contribute to those regional areas. But they helped everywhere because people came out to watch the games as well. So it's hard to say that anything helped one particular area more than the next. I think that overall, we had very strong results. And as I said, we're looking very forward to football this year. We're putting a lot of promotion and sports stuff in fantasy draft parties as well as come watch the games and game watching parties and bottle specials during the games to get people to bring larger parties out, which we did very, very well with during World Cup. So we're going to take the success that we created there and multiply that and push that right into the football season. And then by October, we're going to be picking up basketball as well and hockey kicks in. Baseball will heat up here as the pennant races start. So sports should be very, very good for us, I think, September, October, November and probably all the way into February. So... Maxwell Ellis: Have you noticed anything different with the service side of the clubs? Is that -- obviously, it seems like it's picking up. Does that seem like it bottomed a little while ago when you guys are like in some sort of going back to normal? Travis Reese: Yes. I mean I think the service revenue declined there for a while. I don't know -- there's a lot of macro stuff going on. But I think we are focusing on it. We are working on keeping people in our VIP rooms, right? I mean that's where our service revenues is created is when people go to our VIP rooms. So we've got to keep the pressure on the floor, keep more people in the building so people want to pay to move up, right? If you're the only person on a 737, you don't care if you're sitting in first class or not, right, because there's nobody next to you. But if all of a sudden, every seat in the back is full and the front is empty, let's -- can we move up there? That's what we have to do with clubs. And I think our guys are doing a fantastic job of creating that pressure by putting more and more people through the door and really focusing on just overall customer service right now. Maxwell Ellis: And this is kind of like a strange question, but maybe not. When it comes to like service revenue, what -- is there like an age range of like the ideal client that are spending the bigger dollars because I can't see it being like 21-, 22-year-old kids. To me, it would seem like some guy that's like in his 30s to 50s because they're the guys with the money that can drop it. Travis Reese: It strictly depends on the club. I mean, in the format of that club. I mean there's a lot of 20-something tech guys out there that are making good money, right, and getting their first job, and there's a lot of crypto guys out there that are in their 20s and these influencers, right? I mean, these media influencers on social media, they make a lot of money, and they will come in and blow some money sometimes. So it's -- and then we've got the real estate tycoon who can come in and whips out his platinum credit card and says, "Everything is on me." So I mean it's -- I don't think the age groups are as tight as they were. I know that we have really done a better job, I think, of social media marketing and bringing in -- working with some influencers and whatnot to really bringing in more of that younger crowd that we haven't necessarily had in the past. So we're doing everything we do to put butts in seats basically. Maxwell Ellis: And then my last question is, are there a significant amount of women that have been showing up to the clubs as like with their husbands or just it's a thing for girls to go to because... Travis Reese: That's been for 10 years now. Yes, that hasn't really adjusted much. On weekends -- not as many during the week, but on weekends, absolutely, especially Saturdays. Saturdays, we should have a couples night, I think. But we do too much other business on Saturdays with bachelor parties, everything else to kind of really focus on that crowd. But we do focus on the customer service for that crowd for certain. Bradley Chhay: [Operator Instructions] Just to deal with the technical issues that people have been texting and messaging about, the immediate replay and recording will be posted right afterwards on X Spaces as well as a posting of the transcript of this call. Sorry for the technical issues. So on behalf of Travis, Albert and Eric, the company and our subsidiaries, thank you, and have a great night. Please visit one of our clubs or sports bars and have a great time. Thank you. 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This article is a transcript of this conference call produced for The Motley Fool. While we strive for our Foolish Best, there may be errors, omissions, or inaccuracies in this transcript. As with all our articles, The Motley Fool does not assume any responsibility for your use of this content, and we strongly encourage you to do your own research, including listening to the call yourself and reading the company's SEC filings. Please see our Terms and Conditions for additional details, including our Obligatory Capitalized Disclaimers of Liability. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. RCI Hospitality Holdings (RICK) Q3 2026 Earnings Call Transcript was originally published by The Motley Fool

Our analysts just identified a stock with the potential to be the next Nvidia. Tell us how you invest and we'll show you why it's our #1 pick. Tap here. Management attributed improved profitability in the Bombshells segment to increased operating leverage and a strategic shift back to its 'bar-first' roots, while also reporting significant reductions in corporate insurance expenses. The Nightclubs segment achieved record revenues of $63 million, driven by the integration of four newly acquired or reformatted clubs which offset same-store sales dynamics. A significant culture shift was implemented at Bombshells to reverse a post-COVID 'restaurant rut' by hiring club-experienced leadership to prioritize high-margin beverage sales and late-night atmosphere. Corporate expenses saw a notable decline primarily due to a year-over-year reduction in insurance costs, contributing to improved consolidated margins. Management emphasized a focus on 'creating pressure' on club floors to drive service revenue, noting that higher occupancy naturally incentivizes customers to upgrade to VIP areas. The company is actively focusing on larger market acquisitions while taking a disciplined approach to capital allocation given current market valuations. Management expects to be back in the market for share buybacks around October 1st, following a temporary pause to prioritize debt reduction and acquisition readiness. The company plans to reduce total debt by approximately $25 million over a brief period, including an $8 million payment scheduled for the current quarter. Strategic property sales are expected to unlock value from non-income-producing assets, with one sale anticipated to close in September. The new Baby Dolls West Fort Worth location is projected to open around May 1st, following the completion of underground infrastructure and plumbing. Management anticipates improved results in the coming months driven by sports-based promotions tied to football season, basketball, and hockey. The company is defending against legal charges in New York; management and involved individuals have pled not guilty and are taking necessary defensive actions. Commercial real estate sales face headwinds from high interest rates and geopolitical uncertainty, which has slowed the divestiture of some non-core properties. Management expressed discomfort with a 4.17 debt-to-EBITDA ratio, triggering an accelerated debt paydown strategy to lower the ratio to more manageable levels. Rebuilding the Fort Worth club remains delayed due to complex city permitting and modernizing 1970s-era utility infrastructure like septic systems. One stock. Nvidia-level potential. 30M+ investors trust Moby to find it first. Get the pick. Tap here. Management paused buybacks to lower the debt-to-EBITDA ratio and prepare for potential acquisitions in the next 3 to 6 months. They have paid down $16 million in debt over the last six months and expect to reach a total of $24 million in reductions shortly. The segment shifted from a 50-50 food-to-beverage mix to approximately 62-64% beverage by focusing on late-night 'party' atmosphere. Management rejected previous suggestions to close at midnight, instead focusing on filling late-night hours that were previously unproductive under a restaurant-centric model. RCI is accepting cash offers and considering leasing vacant properties to improve ROI before eventual sales. The company is focusing on larger markets and may trim a few small-market locations that do not fit the long-term growth profile.

Interested in RCI Hospitality Holdings, Inc.? Here are five stocks we like better. RCI Hospitality posted stronger third-quarter results: Revenue rose 4% year over year to $73.9 million, net income increased 57% to $6.4 million, and adjusted EBITDA grew 10% to $16.9 million. Nightclubs reached record revenue while Bombshells improved profitability. Nightclubs revenue reached $63 million with a 31.2% operating margin, while Bombshells revenue rose 25.4% and operating income increased to $759,000 as management restored a more beverage- and entertainment-focused concept. Debt reduction remains the near-term capital priority. RCI paid down $8.6 million of debt during the quarter, reduced leverage to 4.3 times adjusted EBITDA, and expects additional repayment before potentially resuming more meaningful share repurchases around October. RCI Hospitality (NASDAQ:RICK) reported higher third-quarter revenue, earnings and adjusted EBITDA, while management emphasized debt reduction, a turnaround effort at its Bombshells sports-bar business and plans to resume more meaningful stock repurchases after lowering leverage. Interim CFO Albert Molina said total revenue increased 4% from a year earlier to $73.9 million. Net income attributable to RCI shareholders rose 57% to $6.4 million from $4.1 million, while GAAP earnings per share increased 80%. Non-GAAP earnings per share were $0.90, up 17% year over year. → Meta’s Earnings Drop Shows Wall Street Wants More Than Ad Growth Adjusted EBITDA increased 10% year over year and 9% sequentially to $16.9 million. Molina said free cash flow margin improved for a second consecutive quarter to 14%, while adjusted EBITDA margin improved for a third straight quarter to 23%. The company’s Nightclubs segment generated record revenue of $63 million, up 1% from the prior-year quarter. Four newly acquired, opened or reformatted clubs contributed $4 million in revenue, while 52 same-store clubs generated $58.5 million. Those gains more than offset $1.2 million in revenue from four clubs that were closed after the prior-year period. → 4 Oil and Gas ETF Plays as Prices Stay Sky-High Within the Nightclubs segment, service revenue increased 7.6%, while food, merchandise and other revenue declined 1.4% and alcoholic beverage revenue fell 4.2%. Nightclubs operating income increased to $19.6 million from $17.9 million, with operating margin rising to 31.2% from 28.6%. On a non-GAAP basis, segment operating income was $20.2 million, compared with $20.8 million a year earlier, and the non-GAAP operating margin was 32.1%. → Sandisk Just Delivered a Blowout Quarter—Here's Why the Stock Is Falling Bombshells revenue rose 25.4% to $10.8 million. Three new locations contributed $2.6 million, while nine same-store locations generated $8.2 million. Alcoholic beverage revenue increased 33.6%, and food and other revenue increased 16.6%. Bombshells operating income rose to $759,000 from $67,000, producing a 7% operating margin compared with 0.8% a year earlier. Non-GAAP operating income was $801,000, compared with $80,000 in the prior-year quarter. Founder and Head of Mergers and Acquisitions Eric Langan attributed the improvement to returning Bombshells to its original bar-focused concept. He said the company hired a new Bombshells director of operations with nightclub experience, while retaining food-focused personnel to maintain food quality. “We’ve brought in a new director of operations for Bombshells, who is a club guy,” Langan said. “He understands fun. He understands creating the party, not joining the party.” Langan said some locations shifted from approximately a 50-50 food-and-beverage sales mix to roughly 62% to 64% beverage sales while also growing food revenue. He said the company began testing operational changes at a store in February, expanded them to three stores in March and rolled them out across all 11 locations by mid-April. RCI ended the quarter with $26.4 million in cash and cash equivalents, down by less than $500,000 from March 31. During the quarter, the company paid down $8.6 million of debt and repurchased $1 million of shares, Molina said. Net cash provided by operating activities and free cash flow each declined year over year, primarily because the company paid more outstanding payables than in the prior-year quarter. However, operating cash flow increased 14% sequentially and free cash flow increased 26% sequentially. The company’s weighted average interest rate was 7.05%, and total occupancy cost declined sequentially to 8.3%. Debt to trailing 12-month adjusted EBITDA was 4.3 times, or 3.7 times excluding a fourth-quarter legal accrual, according to Molina. Langan said management became uncomfortable with leverage around 4.17 times debt to EBITDA and temporarily slowed repurchases to focus on debt reduction and prepare for potential acquisitions. He said the company paid down $16 million of debt over the prior six months and expects another approximately $8 million of debt reduction during the current quarter. He said management hopes to return to the stock-buyback market around the beginning of October, while continuing to evaluate larger-market acquisitions that it believes could be accretive. RCI expects its line of credit to be reduced to approximately $100,000 after August, according to Langan. The company is working to sell or lease non-income-producing properties and expects potential property-sale proceeds to be used for debt repayment. Langan said RCI may sell a small number of clubs in smaller markets, while remaining focused on larger markets and larger potential acquisitions. Langan said construction began March 4 on the Baby Dolls West Fort Worth location, which he expects could open around May 1. Separately, redevelopment of a former Dallas club that burned down remains delayed by replating and sewer-related issues, and Langan said construction there could take nine months once it begins. During the call, the company said it could not discuss its legal situation in New York beyond reiterating that RCI, the individuals involved and three clubs have pleaded not guilty to all charges and are taking actions to defend themselves. RCI Hospitality Holdings, Inc operates as a diversified hospitality and entertainment company focused on the ownership and operation of adult nightclubs and themed sports bars throughout the United States and select international markets. The company's U.S. Nightclub segment includes venues branded as Rick's Cabaret, Club Onyx and various other upscale adult entertainment clubs, offering private dance experiences, VIP services and live performances. Its Restaurant & Bar segment operates Bombshells, a brunch-themed sports bar chain featuring chef-driven menus, craft cocktails and game-day viewing in a military-inspired setting. In addition to its brick-and-mortar venues, RCI Hospitality deploys proprietary digital platforms for talent recruitment, training and scheduling, helping to streamline operations and drive customer engagement. This instant news alert was generated by narrative science technology and financial data from MarketBeat in order to provide readers with the fastest reporting and unbiased coverage. Please send any questions or comments about this story to [email protected]. The article "RCI Hospitality Q3 Earnings Call Highlights" was originally published by MarketBeat. 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HOUSTON, August 06, 2026--(BUSINESS WIRE)--RCI Hospitality Holdings, Inc. (Nasdaq: RICK) today filed its Form 10-Q and reported results for the fiscal 2026 third quarter ended June 30, 2026. Summary (Comparisons are to year-ago periods unless indicated otherwise) Travis Reese, Interim President and CEO, said: "We're pleased to report another quarter of improved performance in many key metrics. Sales, EPS, non-GAAP EPS, net income attributable to RCIHH common stockholders, and adjusted EBITDA all increased, while we used our strong cash position to continue to buy back shares and reduce debt." "Bombshells' performance was driven by new locations and same-store sales growth of 4.7%, while increased activity related to high-profile professional basketball and soccer events benefited Nightclubs as well as Bombshells. These factors helped offset cautious discretionary spending earlier in 3Q26 due to geopolitical uncertainty and its impact on inflation. Results also reflected lower impairment and insurance costs." X Spaces Conference Call at 4:30 PM ET Today Call link: https://x.com/i/spaces/1RJjppmBLPVKw/ (X log in required). Presentation link: https://www.rcihospitality.com/investor-relations/. To ask questions: Participants must join the X Space using a mobile device. To listen only: Participants can access the X Space from a computer. There will be no other types of telephone or webcast access. 3Q26 Results (Comparisons are to year-ago periods unless indicated otherwise) Nightclubs segment: Revenues of $63.0 million increased by 1.0%. Four newly acquired, opened and reformatted clubs generated $4.0 million sales and the 52 clubs in same-store sales produced $58.5 million, more than offsetting $1.2 million in sales from four clubs closed subsequent to the year-ago quarter.2 By revenue type, service increased 7.6%; food, merchandise and other declined 1.4%; and alcoholic beverages declined 4.2%. Impairments and other charges, net were immaterial compared to $2.3 million. Operating income was $19.6 million compared to $17.9 million or 31.2% of segment revenues compared to 28.6%. Non-GAAP operating income, which excludes impairments and other net charges, was $20.2 million compared to $20.8 million or 32.1% of segment revenues compared to 33.3%. Bombshells segment: Revenues of $10.8 million increased 25.4%. Three new locations generated $2.6 million in sales and the nine locations in same-store sales produced $8.2 million. The new locations are Denver, CO (opened January 2025), Lubbock, TX (July 2025), and Rowlett, TX (June 2026).2 By revenue type, alcoholic beverages increased 33.6% and food and other increased 16.6%. Operating income was $759,000 compared to $67,000 or 7.0% of segment revenues compared to 0.8%. Non-GAAP operating income, which excludes other net charges, was $801,000 compared to $80,000 or 7.4% of segment revenues compared to 0.9%. Corporate segment: Expenses totaled $7.3 million compared to $9.1 million or 9.9% of total revenues compared to 12.9%. Non-GAAP expenses totaled $7.3 million compared to $8.7 million or 9.9% of total revenues compared to 12.3%. GAAP and non-GAAP expenses reflected lower insurance expense compared to the prior-year period. Impairments and other charges, net within consolidated operations were insignificant compared to $2.3 million. Income tax was an expense of $2.1 million compared to $0.7 million or an effective rate of 24.7% compared to 15.3%. Weighted average shares outstanding of 7.65 million declined 13.0% due to share buybacks. Debt of $240.1 million at June 30, 2026 declined $8.6 million or 3.5% from $248.7 million at March 31, 2026, primarily reflecting debt paydowns. Compared to a year ago, debt declined $1.2 million or 0.5%. Non-GAAP Financial Measures In addition to our financial information presented in accordance with GAAP, management uses certain non-GAAP financial measures, within the meaning of the SEC Regulation G, to clarify and enhance understanding of past performance and prospects for the future. Generally, a non-GAAP financial measure is a numerical measure of a company’s operating performance, financial position or cash flows that excludes or includes amounts that are included in or excluded from the most directly comparable measure calculated and presented in accordance with GAAP. We monitor non-GAAP financial measures because they describe the operating performance of the Company and help management and investors gauge our ability to generate cash flow, excluding (or including) some items that management believes are not representative of the ongoing business operations of the Company, but are included in (or excluded from) the most directly comparable measures calculated and presented in accordance with GAAP. Relative to each of the non-GAAP financial measures, we further set forth our rationale as follows: Non-GAAP Operating Income and Non-GAAP Operating Margin. We calculate non-GAAP operating income and non-GAAP operating margin by excluding the following items from income from operations and operating margin: (a) amortization of intangibles, (b) impairment of assets, (c) settlement of lawsuits, net of recoveries, (d) gains or losses on sale of businesses and assets, (e) gains or losses on insurance, and (f) stock-based compensation. We believe that excluding these items assists investors in evaluating period-over-period changes in our operating income and operating margin without the impact of items that are not a result of our day-to-day business and operations. Non-GAAP Net Income and Non-GAAP Net Income per Diluted Share. We calculate non-GAAP net income and non-GAAP net income per diluted share by excluding or including certain items to net income or loss attributable to RCIHH common stockholders and diluted earnings per share. Adjustment items are: (a) amortization of intangibles, (b) impairment of assets, (c) settlement of lawsuits, net of recoveries, (d) gains or losses on sale of businesses and assets, (e) gains or losses on insurance, (f) stock-based compensation, (g) premium on stock repurchase, (h) gains or losses on lease termination, and (i) the income tax effect of the above-described adjustments. Included in the income tax effect of the above adjustments is the net effect of the non-GAAP provision for income taxes, calculated at approximately 23.2% and 17.4% effective tax rate of the pre-tax non-GAAP income before taxes for the nine months ended June 30, 2026, and 2025, respectively, and the GAAP income tax expense (benefit). We believe that excluding and including such items help management and investors better understand our operating activities. Adjusted EBITDA. We calculate adjusted EBITDA by excluding the following items from net income or loss attributable to RCIHH common stockholders: (a) depreciation and amortization, (b) income tax expense, (c) net interest expense, (d) impairment of assets, (e) settlement of lawsuits, net of recoveries, (f) gains or losses on sale of businesses and assets, (g) gains or losses on insurance, (h) stock-based compensation, (i) premium on stock repurchase, and (j) gains or losses on lease termination. We believe that adjusting for such items helps management and investors better understand our operating activities. 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. The results are, therefore, without consideration of financing alternatives of capital employed. We use adjusted EBITDA as one guideline to assess our unleveraged performance return on our investments. Adjusted EBITDA is also the target benchmark for our acquisitions of nightclubs. We also use certain non-GAAP cash flow measures such as free cash flow. Free cash flow is derived from net cash provided by operating activities less maintenance capital expenditures. We use free cash flow as the baseline for the implementation of our capital allocation strategy. Accounting Standards Update (ASU) 2023-07 The Company has adopted Accounting Standards Update (ASU) 2023-07, which requires enhanced reportable segment disclosures. As a result, certain prior-year segment information has been recast. About RCI Hospitality Holdings, Inc. (Nasdaq: RICK) (X: @RCIHHinc) With more than 60 locations, RCI Hospitality Holdings, Inc., through its subsidiaries, is the country’s leading company in adult nightclubs and sports bars-restaurants. See all our brands at www.rcihospitality.com. Forward-Looking Statements This press release may contain forward-looking statements that involve a number of risks and uncertainties that could cause the Company's actual results to differ materially from those indicated, including, but not limited to, the risks and uncertainties associated with (i) operating and managing an adult entertainment, sports bar or restaurant business, (ii) the business climates in cities where it operates, (iii) the success or lack thereof in launching and building the Company's businesses, (iv) cyber security, (v) conditions relevant to real estate transactions, (vi) our ability to maintain compliance with the filing requirements of the U.S. Securities and Exchange Commission ("SEC") and the Nasdaq Stock Market, and (vii) numerous other factors such as laws governing the operation of adult entertainment, sports bar or restaurant businesses, competition and dependence on key personnel. For more detailed discussion of such factors and certain risks and uncertainties, see RCI's annual report on Form 10-K for the year ended September 30, 2025, as well as its other filings with the SEC. The Company has no obligation to update or revise the forward-looking statements to reflect the occurrence of future events or circumstances. View source version on businesswire.com: https://www.businesswire.com/news/home/20260805529903/en/ Contacts Media & Investor Contacts Gary Fishman and Michael Wichman at 212-883-0655 or [email protected] and [email protected].

HOUSTON, May 28, 2026--(BUSINESS WIRE)--RCI Hospitality Holdings, Inc. (Nasdaq: RICK) today filed its Form 10-Q and reported results for the fiscal 2026 second quarter ended March 31, 2026. Summary (Comparisons are to year-ago periods unless indicated otherwise) Travis Reese, Interim President and CEO, said: "We're pleased to report improved performance in many key metrics. While net income attributable to RCIHH common stockholders and EPS declined due to non-cash impairments, non-GAAP EPS, net cash provided by operating activities, free cash flow, and adjusted EBITDA all increased." "This performance was despite freezing weather in late January-early February that caused a number of clubs to close for one to two days each, mostly on weekends." "As previously reported, Nightclubs total sales increased and same-store sales were nearly level. Bombshells total sales also increased. While same-store sales declined, the initial implementation of our ‘pre-game and party all in one’ strategy to increase the mix of higher-margin alcoholic beverage sales resulted in a 3.6% same-store sales increase at Bombshells 59 in Houston, making it the best‑performing same-store location." "In line with our 5-Year Capital Allocation Plan, we have continued to buy back shares. As of May 22, 2026, we had approximately 7,644,500 shares outstanding." Note: There will be no conference call as RCI just held one on May 7, 2026, when it reported its delayed 1Q26 results. 2Q26 Results (Comparisons are to year-ago periods unless indicated otherwise) Nightclubs segment: Revenues of $60.3 million increased by 4.8%. Five newly acquired, opened and reformatted clubs generated $4.8 million in sales, the 51 clubs in same-store sales produced $54.5 million, and one club was closed during the quarter.2 By revenue type, service increased 11.3%; food, merchandise and other increased 3.8%; and alcoholic beverages declined 0.9%. Impairments and other charges, net of $7.6 million compared to $2.0 million. Operating income was $10.8 million compared to $14.5 million or 17.8% of segment revenues compared to 25.3%. Non-GAAP operating income, which excludes impairment and other net charges, was $19.0 million compared to $17.1 million or 31.5% of segment revenues compared to 29.7%. Bombshells segment: Revenues of $8.4 million increased 1.6%. Sales reflected $1.6 million from two newly opened locations and $6.8 million from the nine same-store locations.2 By revenue type, alcoholic beverages increased 4.0% and food was level with 2Q25. Other charges, net of $67,000 compared to $159,000. Operating loss was $267,000 compared to $245,000 or -3.2% of segment revenues compared to -3.0%. Non-GAAP operating loss, which excludes other net charges, was $200,000 compared to $85,000 or -2.4% of segment revenues compared to -1.0%. Corporate segment: Expenses totaled $6.6 million compared to $5.9 million or 9.6% of total revenues compared to 9.0%. Most of the year over year change reflected increased insurance costs. Non-GAAP expenses totaled $6.4 million compared to $5.8 million or 9.3% of total revenues compared to 8.8%. Impairments and other charges, net within consolidated operations totaled $7.6 million compared to $2.1 million. Income tax was a benefit of $0.4 million compared to an expense of $1.1 million. Weighted average shares outstanding of 7.74 million declined 12.6% due to share buybacks. Debt of $248.7 million at March 31, 2026 declined 3.0% from $256.4 million at December 31, 2025, primarily reflecting debt paydowns. Compared to a year ago, debt increased 3.0%. Non-GAAP Financial Measures In addition to our financial information presented in accordance with GAAP, management uses certain non-GAAP financial measures, within the meaning of the SEC Regulation G, to clarify and enhance understanding of past performance and prospects for the future. Generally, a non-GAAP financial measure is a numerical measure of a company’s operating performance, financial position or cash flows that excludes or includes amounts that are included in or excluded from the most directly comparable measure calculated and presented in accordance with GAAP. We monitor non-GAAP financial measures because they describe the operating performance of the Company and help management and investors gauge our ability to generate cash flow, excluding (or including) some items that management believes are not representative of the ongoing business operations of the Company, but are included in (or excluded from) the most directly comparable measures calculated and presented in accordance with GAAP. Relative to each of the non-GAAP financial measures, we further set forth our rationale as follows: Non-GAAP Operating Income and Non-GAAP Operating Margin. We calculate non-GAAP operating income and non-GAAP operating margin by excluding the following items from income from operations and operating margin: (a) amortization of intangibles, (b) impairment of assets, (c) settlement of lawsuits, net of recoveries, (d) gains or losses on sale of businesses and assets, (e) gains or losses on insurance, and (f) stock-based compensation. We believe that excluding these items assists investors in evaluating period-over-period changes in our operating income and operating margin without the impact of items that are not a result of our day-to-day business and operations. Non-GAAP Net Income and Non-GAAP Net Income per Diluted Share. We calculate non-GAAP net income and non-GAAP net income per diluted share by excluding or including certain items to net income or loss attributable to RCIHH common stockholders and diluted earnings per share. Adjustment items are: (a) amortization of intangibles, (b) impairment of assets, (c) settlement of lawsuits, net of recoveries, (d) gains or losses on sale of businesses and assets, (e) gains or losses on insurance, (f) stock-based compensation, (g) premium on stock repurchase, (h) gains or losses on lease termination, and (i) the income tax effect of the above-described adjustments. Included in the income tax effect of the above adjustments is the net effect of the non-GAAP provision for income taxes, calculated at approximately 22.3% and 18.1% effective tax rate of the pre-tax non-GAAP income before taxes for the six months ended March 31, 2026, and 2025, respectively, and the GAAP income tax expense (benefit). We believe that excluding and including such items help management and investors better understand our operating activities. Adjusted EBITDA. We calculate adjusted EBITDA by excluding the following items from net income or loss attributable to RCIHH common stockholders: (a) depreciation and amortization, (b) income tax expense, (c) net interest expense, (d) impairment of assets, (e) settlement of lawsuits, net of recoveries, (f) gains or losses on sale of businesses and assets, (g) gains or losses on insurance, (h) stock-based compensation, (i) premium on stock repurchase, and (j) gains or losses on lease termination. We believe that adjusting for such items helps management and investors better understand our operating activities. 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. The results are, therefore, without consideration of financing alternatives of capital employed. We use adjusted EBITDA as one guideline to assess our unleveraged performance return on our investments. Adjusted EBITDA is also the target benchmark for our acquisitions of nightclubs. We also use certain non-GAAP cash flow measures such as free cash flow. Free cash flow is derived from net cash provided by operating activities less maintenance capital expenditures. We use free cash flow as the baseline for the implementation of our capital allocation strategy. Accounting Standards Update (ASU) 2023-07 The Company has adopted Accounting Standards Update (ASU) 2023-07, which requires enhanced reportable segment disclosures. As a result, certain prior-year segment information has been recast. About RCI Hospitality Holdings, Inc. (Nasdaq: RICK) (X: @RCIHHinc) With more than 60 locations, RCI Hospitality Holdings, Inc., through its subsidiaries, is the country’s leading company in adult nightclubs and sports bars-restaurants. See all our brands at www.rcihospitality.com. Forward-Looking Statements This press release may contain forward-looking statements that involve a number of risks and uncertainties that could cause the Company's actual results to differ materially from those indicated, including, but not limited to, the risks and uncertainties associated with (i) operating and managing an adult entertainment or restaurant business, (ii) the business climates in cities where it operates, (iii) the success or lack thereof in launching and building the Company's businesses, (iv) cyber security, (v) conditions relevant to real estate transactions, (vi) our ability to regain and maintain compliance with the filing requirements of the U.S. Securities and Exchange Commission ("SEC") and the Nasdaq Stock Market, and (vii) numerous other factors such as laws governing the operation of adult entertainment or restaurant businesses, competition and dependence on key personnel. For more detailed discussion of such factors and certain risks and uncertainties, see RCI's annual report on Form 10-K for the year ended September 30, 2025, as well as its other filings with the SEC. The Company has no obligation to update or revise the forward-looking statements to reflect the occurrence of future events or circumstances. View source version on businesswire.com: https://www.businesswire.com/news/home/20260527992474/en/ Contacts Media & Investor Contacts Gary Fishman and Michael Wichman at 212-883-0655 or [email protected] and [email protected].

HOUSTON, May 11, 2026--(BUSINESS WIRE)--RCI Hospitality Holdings, Inc. (Nasdaq: RICK) received a letter from the Listing Qualifications Department of The Nasdaq Stock Market on Friday, May 8, 2026, notifying the Company that it is in compliance with Listing Rule 5250(c)(1) based on the May 7, 2026, filing of its Form 10-Q for the fiscal 2026 first quarter ended December 31, 2025. Accordingly, this matter is now closed with Nasdaq. RCI also said it has filed a Form 12b-25 reporting that the Company has not had sufficient time to complete its Form 10-Q for the fiscal 2026 second quarter ended March 31, 2026, and will be unable to timely file the report without unreasonable effort and expense. RCI is diligently working to complete and file the 10-Q as soon as possible, but does not anticipate filing it within the Rule 12b-25 extension period. About RCI Hospitality Holdings, Inc. (Nasdaq: RICK) (X: @RCIHHinc) With more than 60 locations, RCI Hospitality Holdings, Inc., through its subsidiaries, is the country’s leading Company in adult nightclubs and sports bars-restaurants. See all our brands at www.rcihospitality.com. Forward-Looking Statements This press release may contain forward-looking statements that involve a number of risks and uncertainties that could cause the Company's actual results to differ materially from those indicated, including, but not limited to, the risks and uncertainties associated with (i) operating and managing an adult entertainment or restaurant business, (ii) the business climates in cities where it operates, (iii) the success or lack thereof in launching and building the Company's businesses, (iv) cyber security, (v) conditions relevant to real estate transactions, (vi) numerous other factors such as laws governing the operation of adult entertainment or restaurant businesses, competition and dependence on key personnel, and (vii) our ability to maintain compliance with the filing requirements of the U.S. Securities and Exchange Commission ("SEC") and the Nasdaq Stock Market. For more detailed discussion of such factors and certain risks and uncertainties, see RCI's annual report on Form 10-K for the year ended September 30, 2025, as well as its other filings with the SEC. The Company has no obligation to update or revise the forward-looking statements to reflect the occurrence of future events or circumstances. View source version on businesswire.com: https://www.businesswire.com/news/home/20260511462296/en/ Contacts Media & Investor Contacts Gary Fishman and Michael Wichman at 212-883-0655 or [email protected] and [email protected]