External reports (aggregated public sources), Value Investors Club

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External reports (aggregated public sources)

Equity Bottom-Up

RCI Hospitality Holdings / Equity Bottom-Up

<ul><li>RICK is the largest strip club operator that also owns the struggling restaurant chain, Bombshells</li><li>Strip clubs in RICK's targeted locations are generally profitable due to limited competition and high barriers to entry</li><li>Tootsie's, a club owned by RICK, experienced significant revenue and EBITDA growth since its acquisition in 2007, showcasing the company's ability to generate attractive returns on acquisitions in the strip club industry</li></ul><p><em>This content is sourced through publicly available sources and has been machine generated. Information displayed is for general informational purposes only. This article was originally published 3 months ago on Value Investors Club.</em></p>

RICK is the largest strip club operator that also owns the struggling restaurant chain, BombshellsStrip clubs in RICK's targeted locations are generally profitable due to limited competition and high barriers to entryTootsie's, a club owned by RICK, experienced significant revenue and EBITDA growth since its acquisition in 2007, showcasing the company's ability to generate attractive returns on acquisitions in the strip club industryThis content is sourced through publicly available sources and has been machine generated. Information displayed is for general informational purposes only. This article was originally published 3 months ago on Value Investors Club.

Rci Hospitality Hldgs Inc (RICK) - Thursday, Feb 29, 2024

Research from Water Tower Research, Water Tower Research

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Research from Water Tower Research

Water Tower Research is a leading equity research firm that provides research on micro, small and mid cap companies.

Water Tower Research was founded by Wall Street veterans after witnessing a fundamental shift in the investment research industry with the result being a declining knowledge base among investors, a lack of awareness and a shrinking pool of fundamental research being conducted on companies across the small-cap and micro-cap spectrum. The same issues are now increasingly occurring in the mid-cap space. This sea change within the investment community is impacting not only the companies themselves but also current shareholders and potential investors. With significantly less active sell-side sponsorship by Wall Street, a substantial information gap has developed between companies and various constituents in the financial community. The net result is fewer channels for insight and information to flow between companies and investors.

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<div><div><div><div><ul style="list-style-type: disc;"><li><p>Summary thesis. RCI reported another solid quarter, slightly exceeding our expectations.</p></li><li><p>The company is well- positioned for accelerating earnings growth looking out to 2HFY24 and FY25 given the opening of new clubs, Bombshells, and its first casino properties in Central City, CO, as well as our expectation of improving same-store sales (SSS).</p></li><li><p>With RCI’s industry-leading growth metrics and margins (40%+ for nightclubs), RCI’s valuation remains below peers on both an EV/EBITDA and P/E basis (see page 3 for valuation analysis).</p></li></ul></div></div></div></div>

Summary thesis. RCI reported another solid quarter, slightly exceeding our expectations.The company is well- positioned for accelerating earnings growth looking out to 2HFY24 and FY25 given the opening of new clubs, Bombshells, and its first casino properties in Central City, CO, as well as our expectation of improving same-store sales (SSS).With RCI’s industry-leading growth metrics and margins (40%+ for nightclubs), RCI’s valuation remains below peers on both an EV/EBITDA and P/E basis (see page 3 for valuation analysis).

RCI Hospitality Holdings, Inc. - Solid 3Q Results

<div><div><div><div><ul style="list-style-type: disc;"><li><p>Multiple Catalysts on the Horizon. Total revenues were essentially in line with our forecast, and we see an attractive runway for growth with at least 10 new locations contributing to revenues through FY24: (1) 4Q23: First full quarter of another Baby Dolls, the reopening of a closed club, and the opening of a new Bombshells, all in Texas; (2) FY24: Opening of two new clubs in Texas, three new Bombshells in Texas and Colorado, and two casinos in Central City, CO. Potential club M&amp;A activity could provide additional upside.</p></li><li><p>Potential club M&amp;A activity could provide additional upside.</p></li><li><p>Nightclubs + Bombshells’ sales increased 8.9% Y/Y. On July 11, RCI announced its preliminary revenues for nightclubs and Bombshells.</p></li></ul></div></div></div></div>

Multiple Catalysts on the Horizon. Total revenues were essentially in line with our forecast, and we see an attractive runway for growth with at least 10 new locations contributing to revenues through FY24: (1) 4Q23: First full quarter of another Baby Dolls, the reopening of a closed club, and the opening of a new Bombshells, all in Texas; (2) FY24: Opening of two new clubs in Texas, three new Bombshells in Texas and Colorado, and two casinos in Central City, CO. Potential club M&amp;A activity could provide additional upside.Potential club M&amp;A activity could provide additional upside.Nightclubs + Bombshells’ sales increased 8.9% Y/Y. On July 11, RCI announced its preliminary revenues for nightclubs and Bombshells.

RCI Hospitality Holdings, Inc. - Revenues Meet Expectations

<ul>
<li>2Q Summary. RCI reported another strong quarter, surpassing our projections.</li>
<li>The company has proven its ability to generate significant FCF, driving accelerated growth.</li>
<li>We see several catalysts on the near-term horizon (Rick’s Cabaret Steakhouse &amp; Casino, organic growth from Bombshells, and club acquisitions), which should drive a reacceleration in earnings growth in FY24.</li>
</ul>


2Q Summary. RCI reported another strong quarter, surpassing our projections.
The company has proven its ability to generate significant FCF, driving accelerated growth.
We see several catalysts on the near-term horizon (Rick’s Cabaret Steakhouse &amp; Casino, organic growth from Bombshells, and club acquisitions), which should drive a reacceleration in earnings growth in FY24.


RCI Hospitality Holdings, Inc. - 2Q Results Exceed Expectations

<ul><li>We recently traveled to Colorado to see RCI’s new properties.</li><li>As background, following the purchase of five clubs in the Denver market in late 2021, RCI is planning on investing between $50 million and $80 million in the next two years in Denver and the surrounding areas of Colorado.</li><li>As a result, Colorado is expected to be RCI’s third-largest market, behind Texas and Florida.</li></ul>

We recently traveled to Colorado to see RCI’s new properties.As background, following the purchase of five clubs in the Denver market in late 2021, RCI is planning on investing between $50 million and $80 million in the next two years in Denver and the surrounding areas of Colorado.As a result, Colorado is expected to be RCI’s third-largest market, behind Texas and Florida.

Rci Hospitality Holdings, Inc. -Tour of Colorado Shows a Promising Growth Opportunity

United States

RCI Hospitality Holdings, Inc., through its subsidiaries, owns and operates night clubs offering adult entertainment, restaurants, and bar operations in Texas and other locations in the United States. The Company, through its subsidiaries, also owns and operates media and websites related to their operations.

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RCI Hospitality Holdings (RICK US)

Rci Hospitality Hldgs Inc (RICK) - Thursday, Feb 29, 2024

RICK is the largest strip club operator that also owns the struggling restaurant chain, Bombshells. Strip clubs in RICK's targeted locations are...

Value Investors Club

RCI Hospitality Holdings, Inc. - Solid 3Q Results

With RCI’s industry-leading growth metrics and margins (40%+ for nightclubs), RCI’s valuation remains below peers on both an EV/EBITDA and P/E basis

Water Tower Research

RCI Hospitality Holdings, Inc. - Revenues Meet Expectations

Total revenues were essentially in line with our forecast, and we see an attractive runway for growth with at least 10 new locations contributing...

Water Tower Research

RCI Hospitality Holdings, Inc. - 2Q Results Exceed Expectations

Catalysts in Place to Drive Accelerated Earnings Growth in FY24. 2Q Summary. RCI reported another strong quarter, surpassing our projections.

Water Tower Research

Rci Hospitality Holdings, Inc. -Tour of Colorado Shows a Promising Growth Opportunity

As background, following the purchase of five clubs in the Denver market in late 2021, RCI is planning on investing between $50 million and $80...

Water Tower Research

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