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RCI HOSPITALITY HOLDINGS INC Building a portfolio of well - managed , high cash - flowing nightclubs and sports - bars NASDAQ : RICK | 3Q26 Conference Call | August 6 , 2026 | www.rcihospitality.com | X @RCIHHinc
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• Log in to: X (formerly Twitter) • Select this X Space: https://x.com/i/spaces/1RJjppmBLPVKw/ • To ask a question during Q&A: You will need to join the Space with a mobile phone • To listen only: You can join the Space with a personal computer X Spaces Instructions 2 Or
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Forward-Looking Statements This presentation contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These statements include, among other things, statements regarding plans, objectives, goals, strategies, future events or performance and underlying assumptions and other statements, which are other than statements of historical facts. Forward- looking statements generally can be identified by words such as “anticipates,” “believes,” “estimates,” “expects,” “intends,” “plans,” “predicts,” “projects,” “will be,” “will continue,” “will likely result,” and similar expressions. This presentation also 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 in this presentation, 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 U.S. Securities and Exchange Commission. The Company has no obligation to update or revise the forward-looking statements to reflect the occurrence of future events or circumstances. 3 Trademarks Except as otherwise indicated, all trademarks, service marks, logos, and trade names in this presentation are property of RCI Hospitality Holdings, Inc., its subsidiaries or affiliates.
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Non-GAAP Financial Measures 4 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.
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Today’s Speakers 5 Travis Reese Interim President & CEO RCI Hospitality Holdings, Inc. Albert Molina Interim CFO RCI Hospitality Holdings, Inc.
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Key Takeaways 6 Another quarter of improved core performance • Sales, EPS, non-GAAP EPS, net income attributable to RCIHH common stockholders, and adjusted EBITDA all increased • Bombshells revenues +25.4% with SSS +4.7% • Nightclubs revenues +1.0% with SSS -0.8% • Activity tied to high-profile pro basketball and soccer events late 3Q26 helped offset cautious discretionary spending early 3Q26 due to geopolitical uncertainty and inflation concerns • Results also benefited from lower impairment and insurance costs 3Q26 Results (YoY) FY26 Update Back to Basics 5-Year Capital Allocation Plan • Continued progress improving segment sales and margins • Opened Bombshells Rowlett • Buybacks reduced weighted average shares outstanding by 13.0% YoY as of June 30, 2026 • Reduced debt $8.6 million (June 30, 2026 vs. March 31, 2026)
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Summary Results 71See “Non-GAAP Financial Measures” on page 4 and the Appendix for “Reconciliation of Non-GAAP Measures.” Summary Financials (in millions, except EPS) 3Q26 3Q25 9M26 9M25 Total revenues $73.9 $71.1 $213.5 $208.5 EPS $0.83 $0.46 $0.16 $1.84 Non-GAAP EPS1 $0.90 $0.77 $2.41 $2.23 Impairments and other charges, net $0.0 $2.3 $7.9 $2.2 Net cash provided by operating activities $11.3 $13.8 $29.0 $35.7 Free cash flow1 $10.6 $13.3 $25.7 $32.3 Net income attributable to RCIHH common stockholders $6.4 $4.1 $1.3 $16.3 Adjusted EBITDA1 $16.9 $15.3 $48.2 $45.2 Weighted average shares used in computing EPS – basic and diluted 7.65 8.79 7.90 8.86
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$62.8 $60.6 $61.7 $57.5 $62.3 $60.9 $62.3 $60.3 $63.0 3Q24 4Q24 1Q25 2Q25 3Q25 4Q25 1Q26 2Q26 3Q26 Nightclubs Segment Total Revenues ($M) Operating Margin As % of Segment Revenues 8 Locations Contributing to Revenues3Q26 vs. 3Q25 ($M) • Revenues: +1.0% to quarterly record – $4.0 from four newly acquired, opened and reformatted clubs – $58.5 from the 52 same-store locations (-0.8%) – Service +7.6%; food, merchandise and other -1.4%; and alcoholic beverages -4.2% • Impairments and other charges (gains), net: $0 vs. $2.3 • Operating income – GAAP: $19.6 vs. $17.9 (31.2% of segment revenues vs.28.6%) – Non-GAAP: $20.2 vs.$20.8 (32.1% of segment revenues vs. 33.3%) – Non-GAAP operating margin has improved three quarters in a row GAAP Non-GAAP 3Q24 4Q24 1Q25 2Q25 3Q25 4Q25 1Q26 2Q26 3Q26 15% 20% 25% 30% 35% 40% 56 57 56 57 60 60 59 57 56 3Q24 4Q24 1Q25 2Q25 3Q25 4Q25 1Q26 2Q26 3Q26 FY25-26 reflects five newly acquired, opened and reformatted clubs and the closing of four underperforming locations
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GAAP Non-GAAP 3Q24 4Q24 1Q25 2Q25 3Q25 4Q25 1Q26 2Q26 3Q26 (75)% (50)% (25)% —% 25% $13.1 $11.9 $9.6 $8.2 $8.6 $9.4 $8.4 $8.4 $10.8 3Q24 4Q24 1Q25 2Q25 3Q25 4Q25 1Q26 2Q26 3Q26 Bombshells Segment 9 Total Revenues ($M) Operating Margin As % of Segment Revenues 9 Locations Contributing to Revenues 14 14 13 10 10 11 11 11 12 3Q24 4Q24 1Q25 2Q25 3Q25 4Q25 1Q26 2Q26 3Q26 Divestiture/closure of five underperforming locations in 4Q24-1Q25. Opened Denver in 2Q25, Lubbock in 4Q25, and Rowlett in 3Q26 3Q26 vs. 3Q25 ($M) • Revenues: +25.4% – $2.6 from three new locations – $8.2 from the nine same-store locations (+4.7%) – Alcoholic beverages +33.6% and food and other +16.6% • Operating Income – GAAP: $0.8 vs. $0.1 (7.0% of segment revenues vs. 0.8%) – Non-GAAP: $0.8 vs. $0.1 (7.4% of segment revenues vs. 0.9%)
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GAAP Non-GAAP 3Q24 4Q24 1Q25 2Q25 3Q25 4Q25 1Q26 2Q26 3Q26 —% 5% 10% 15% 20% 25% Corporate Segment 10 Expense ($M) Expense Margin As % of Total Revenues 10 Total Locations Contributing to RCIHH Revenues $7.2 $7.1 $8.8 $5.9 $9.1 $15.4 $7.4 $6.6 $7.3 $6.4 $6.6 $8.4 $5.8 $8.7 $15.0 $7.0 $6.4 $7.3 GAAP Non-GAAP 3Q24 4Q24 1Q25 2Q25 3Q25 4Q25 1Q26 2Q26 3Q26 70 71 69 67 70 71 70 68 68 3Q24 4Q24 1Q25 2Q25 3Q25 4Q25 1Q26 2Q26 3Q263Q26 vs. 3Q25 ($M) • GAAP Operating Expenses: -$1.8 • Non-GAAP Operating Expenses: -$1.4 • GAAP Operating Expense Margin: 9.9% vs 12.9% • Non-GAAP Operating Expense Margin: 9.9% vs. 12.3% • GAAP and non-GAAP reflected YoY reduction in insurance expense
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GAAP Disclosure ($M) 11 Fiscal Year 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 Total revenues $134.9 $144.9 $165.7 $181.1 $132.3 $195.3 $267.6 $293.8 $295.6 $279.4 Operating income $20.7 $23.1 $27.6 $34.7 $2.7 $38.5 $71.5 $51.5 $18.8 $30.3 % of revenues 15.3% 16.0% 16.6% 19.2% 2.1% 19.7% 26.7% 17.5% 6.4% 10.8 % Net income (loss) $11.2 $8.3 $20.9 $20.3 $(6.1) $30.3 $46.0 $29.1 $3.0 $10.8 % of revenues 8.3% 5.7% 12.6% 11.2% (4.6)% 15.5% 17.2% 9.9 % 1.0% 3.9 % Quarter 3Q24 4Q24 1Q25 2Q25 3Q25 4Q25 1Q26 2Q26 3Q26 Operating income (loss) $(2.5) $3.5 $13.9 $8.2 $8.7 $(0.5) $11.0 $3.8 $13.0 Net cash provided by operating activities $15.8 $15.7 $13.3 $8.5 $13.8 $13.7 $7.8 $9.9 $11.3 Net income (loss) $(5.2) $0.2 $9.1 $3.2 $4.1 $(5.5) $(4.7) $(0.3) $6.4 Top Table is Linked
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$20.1 $17.9 $15.7 $14.2 $15.3 $7.4 $15.7 $15.6 $16.9 3Q24 4Q24 1Q25 2Q25 3Q25 4Q25 1Q26 2Q26 3Q26 $13.8 $13.2 $12.1 $6.9 $13.3 $13.1 $6.7 $8.4 $10.6 3Q24 4Q24 1Q25 2Q25 3Q25 4Q25 1Q26 2Q26 3Q26 26% 24% 22% 22% 22% 10% 22% 23% 23% 18% 18% 17% 11% 19% 18% 9% 12% 14% Adj. EBITDA Margin FCF Margin 3Q24 4Q24 1Q25 2Q25 3Q25 4Q25 1Q26 2Q26 3Q26 $34.9 $32.4 $34.7 $32.7 $29.3 $33.7 $28.6 $26.9 $26.4 6/30/249/30/2412/31/243/31/256/30/259/30/2512/31/253/31/266/30/26 Cash, FCF & Adjusted EBITDA ($M) Cash As % of Total Revenues Adjusted EBITDAFree Cash Flow 12
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$8.0 $27.8 $18.2 $17.5 $15.6 $1.0 $7.5 $9.4 $2.5 $5.7 Amortization ScheduleNon-Realty Balloon Realty Balloon FY26 FY27 FY28 FY29 FY30 $245.4 $238.2 $235.5 $241.5 $241.3 $235.8 $256.4 $248.7 $240.1 6/30/249/30/2412/31/243/31/256/30/259/30/2512/31/253/31/266/30/26 6.71%6.79%6.55%6.68% 6.35%6.52%6.74%6.68% 7.05% 3Q18 3Q19 3Q20 3Q21 3Q22 3Q23 3Q24 3Q25 3Q26 7.9% 8.0% 8.0% 8.5% 7.9% 8.1% 8.5% 8.9% 8.3% 3Q24 4Q24 1Q25 2Q25 3Q25 4Q25 1Q26 2Q26 3Q26 3.27 3.28 3.32 3.56 3.82 4.48 4.86 4.60 4.32 3.83 4.16 3.94 3.72 3Q24 4Q24 1Q25 2Q25 3Q25 4Q25 1Q26 2Q26 3Q26 Debt Metrics Debt Maturities at 6/30/26 ($M) Weighted Average Interest Rate on Debt Debt, Net of Loan Costs ($M) 13 Total Occupancy Costs Lease & Interest Expense as % of Total Revenues Debt / Adjusted EBITDA (TTM)* 4Q25 Adjusted EBITDA includes $9M non-cash legal accrual
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14 Strategy • Targeted % annual use of FCF FY25-29 • Excludes completion of club projects already in development • We may deviate from our strategy and plan if other strategic rationale warrants Capital Allocation: Strategy & Plan 14 Club Acquisitions ~40% Share Buybacks, Debt Reduction, Dividends ~60% Back to Basics 5-Year Plan (FY25-29) • Operations • Nightclubs – focus on core business operations and new acquisitions • Bombshells – improve performance and finish the remaining unit under development • Capital Allocation • We expect to generate $250M+ of cumulative FCF FY25-29 – 40% of FCF allocated to club acquisitions – 60% of FCF allocated to buybacks, debt reduction, and dividends • FY29 Financial Targets • Goal: Double FCF/sh by FY29 year end • Targeting – $400M in revenue – $75M in FCF – 7.5M shares outstanding
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Plan Update 15 Nightclubs • Non-GAAP margin has improved sequentially for three consecutive quarters • Reflects disciplined operational execution and ongoing portfolio optimization efforts Bombshells • New strategy helping to increase sales and as our mix of higher-margin LBW • Bombshells Rowlett is now contributing revenue while eliminating the carrying costs and pre-opening expenses Share Buybacks • Bought back 41,500 in 3Q26 ($23.9 million remaining authorization) • Shares outstanding reduced 14.6% (September 30, 2024 to August 5, 2026) Free Cash Flow • Focused on improving FCF through continued reductions in SG&A expenses and disciplined cost management
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Appendix 16
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Long-Term Performance 17 Fiscal Year ($M) 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 10-Yr CAGR Total revenues $135.4 $134.9 $144.9 $165.7 $181.1 $132.3 $195.3 $267.6 $293.8 $295.6 $279.4 7.5 % Adjusted EBITDA $34.1 $34.5 $37.3 $44.4 $46.2 $22.4 $60.2 $86.7 $85.0 $72.6 $52.6 4.4 % % of revenues 25.2% 25.6% 25.8% 26.8% 25.5% 16.9% 30.9% 32.4% 28.9% 24.6% 18.8 % Free cash flow $14.9 $20.5 $19.3 $23.2 $33.3 $13.5 $36.1 $58.9 $53.2 $48.4 $45.4 11.8 % % of revenues 11.0% 15.2% 13.3% 14.0% 18.4% 10.2% 18.5% 22.0% 18.1% 16.4% 16.2 % Share count (FD) 10.29 9.81 9.72 9.72 9.59 9.13 9.00 9.23 9.40 8.96 8.68 (1.6) % • FY16 free cash flow benefited from $2.0M tax credits • FY20 reflects Covid pandemic, FY21 beginning of comeback, FY22 post-Covid bounce plus big October 2021 acquisition • FY22 free cash flow benefited from $2.2M tax refund • 4Q23 retained earnings exceeded $200M ($201.1M) for the first time; 2Q19 retained earnings exceeded $100M ($101.6M) for the first time • Despite challenging FY23-25, we achieved strong performance since year-end FY15 initiation of Capital Allocation Strategy
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Debt Analysis (at 6/30/26, $M) Total of $242.1* Weighted Average Interest Rate (WAIR): 7.05% 18* Gross, including loan costs. $60.0 Seller Financing (24.8% of total) Secured by the respective clubs and real estate to which it applies 5 Baby Dolls-Chicas Locas $15.3 @ 7.0 % 11 Clubs $14.6 @ 6.0 % Scarlett's $8.3 @ 8.0 % Playmates $7.5 @ 11.0 % Cheetah $6.8 @ 6.0 % Flight Club $4.4 @ 8.0 % 2 Platinum Clubs $2.4 @ 7.0 % Other $0.7 @ 5.0 % $29.2 Unsecured Debt (12.1% of total) ADW Capital $16.4 @ 12.0 % Various Investors $9.3 @ 12.0 % Other $3.5 @ 12.0 % $6.7 Secured by Other Assets (2.8% of total) 5.55% WAIR $144.7 Secured by Real Estate (59.8% of total) 6.01% WAIR $5.0 Bank Line of Credit (0.6% of total) Secured by business and assets of a subsidiary $1.5 balance @ 7.75% WAIR
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Strategic Share Buybacks & Issuance 19 Fiscal Year or Quarter Repurchased Shares Average Price Per Share Cumulative Shares Repurchased Shares Used for Acquisitions Value Per Share Value of Shares Used for Acquisitions 2015 225,280 $10.19 225,280 2016 747,081 $9.79 972,361 2017 89,685 $12.25 1,062,046 2018 -- -- 2019 128,040 $22.66 1,190,086 2020 516,102 $18.38 1,706,188 2021 74,659 $24.03 1,780,847 500,000 $60.00 $30,000,000 2022 268,185 $56.29 2,049,032 2023 34,086 $65.22 2,083,118 200,000 $80.00 $16,000,000 2024 442,639 $46.55 2,525,757 2025 270,939 $43.77 2,796,696 1Q26 (pursuant to repurchase plans) 74,061 $24.72 2,870,757 1Q26 (privately negotiated transaction) 821,000 $36.54 3,691,757 2Q26 103,000 $23.67 3,794,757 3Q26 41,500 $24.72 3,836,257
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202,630174,790 66,000 56,875 75,325 72,739 895,061 103,00041,500 3Q24 4Q24 1Q25 2Q25 3Q25 4Q25 1Q26 2Q26 3Q26 Capital Returned to Shareholders Shares Purchased Total Cost of Shares ($M) 20 Dividend Payments ($M)Comment • With our Back to Basics 5-Year Capital Allocation Plan (FY25-29), focus is on repurchasing a steadier amount per quarter • To encourage long-term ownership, plan is to continue to modestly increase annual dividends with cost offset by share reduction $9.2 $7.8 $3.2 $2.9 $3.0 $2.7 $31.8 $2.4 $1.0 3Q24 4Q24 1Q25 2Q25 3Q25 4Q25 1Q26 2Q26 3Q26 $0.55 $0.63 $0.62 $0.62 $0.61 $0.61 $0.55 $0.62 $0.61 3Q24 4Q24 1Q25 2Q25 3Q25 4Q25 1Q26 2Q26 3Q26
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Reconciliation of Non-GAAP Measures 21 (in thousands) Three Months Ended June 30, Nine Months Ended June 30, 2026 2025 2026 2025 Reconciliation of GAAP net income to Adjusted EBITDA Net income attributable to RCIHH common stockholders $ 6,351 $ 4,058 $ 1,291 $ 16,313 Income tax expense 2,130 733 3,281 3,648 Interest expense, net 4,368 3,915 13,052 11,797 Depreciation and amortization 4,030 3,892 12,234 11,237 Impairment of assets — — 8,433 1,780 Settlement of lawsuits, net of recoveries 92 3,281 (503) 3,587 Stock-based compensation — 392 589 980 Loss (gain) on sale of businesses and assets 41 202 292 (984) Gain on insurance (107) (1,134) (330) (2,151) Premium on stock repurchase — — 9,885 — Gain on lease termination — — — (979) Adjusted EBITDA $ 16,905 $ 15,339 $ 48,224 $ 45,228 Reconciliation of GAAP net income to non-GAAP net income Net income attributable to RCIHH common stockholders $ 6,351 $ 4,058 $ 1,291 $ 16,313 Amortization of intangibles 618 576 1,853 1,733 Impairment of assets — — 8,433 1,780 Settlement of lawsuits, net of recoveries 92 3,281 (503) 3,587 Stock-based compensation — 392 589 980 Loss (gain) on sale of businesses and assets 41 202 292 (984) Gain on insurance (107) (1,134) (330) (2,151) Premium on stock repurchase — — 9,885 — Gain on lease termination — — — (979) Net income tax effect (130) (562) (2,466) (515) Non-GAAP net income $ 6,865 $ 6,813 $ 19,044 $ 19,764
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Reconciliation of Non-GAAP Measures 22 (in thousands, except per share and number of shares data) Three Months Ended June 30, Nine Months Ended June 30, 2026 2025 2026 2025 Reconciliation of GAAP diluted earnings per share to non-GAAP diluted earnings per share Diluted shares 7,653,000 8,793,809 7,898,831 8,859,028 GAAP diluted earnings per share $ 0.83 $ 0.46 $ 0.16 $ 1.84 Amortization of intangibles 0.08 0.07 0.23 0.20 Impairment of assets — — 1.07 0.20 Settlement of lawsuits, net of recoveries 0.01 0.37 (0.06) 0.40 Stock-based compensation — 0.04 0.07 0.11 Loss (gain) on sale of businesses and assets 0.01 0.02 0.04 (0.11) Gain on insurance (0.01) (0.13) (0.04) (0.24) Premium on stock repurchase 0.00 — 1.25 — Gain on lease termination — — — (0.11) Net income tax effect (0.02) (0.06) (0.31) (0.06) Non-GAAP diluted earnings per share $ 0.90 $ 0.77 $ 2.41 $ 2.23 Reconciliation of GAAP operating income to non-GAAP operating income Income from operations $ 12,968 $ 8,713 $ 27,816 $ 30,790 Amortization of intangibles 618 576 1,853 1,733 Impairment of assets — — 8,433 1,780 Settlement of lawsuits, net of recoveries 92 3,281 (503) 3,587 Stock-based compensation — 392 589 980 Loss (gain) on sale of businesses and assets 41 202 292 (984) Gain on insurance (107) (1,134) (330) (2,151) Non-GAAP operating income $ 13,612 $ 12,030 $ 38,150 $ 35,735
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Reconciliation of Non-GAAP Measures 23 (in thousands, except percentage data) Three Months Ended June 30, Nine Months Ended June 30, 2026 2025 2026 2025 Reconciliation of GAAP operating margin to non-GAAP operating margin GAAP operating margin 17.5 % 12.2 % 13.0 % 14.8 % Amortization of intangibles 0.8 % 0.8 % 0.9 % 0.8 % Impairment of assets 0.0 % 0.0 % 4.0 % 0.9 % Settlement of lawsuits, net of recoveries 0.1 % 4.6 % (0.2) % 1.7 % Stock-based compensation 0.0 % 0.6 % 0.3 % 0.5 % Loss (gain) on sale of businesses and assets 0.1 % 0.3 % 0.1 % (0.5) % Gain on insurance (0.1) % (1.6) % (0.2) % (1.0) % Non-GAAP operating margin 18.4 % 16.9 % 17.9 % 17.1 % Reconciliation of net cash provided by operating activities to free cash flow Net cash provided by operating activities $ 11,278 $ 13,793 $ 28,975 $ 35,684 Less: Maintenance capital expenditures 640 454 3,238 3,341 Free cash flow $ 10,638 $ 13,339 $ 25,737 $ 32,343
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Reconciliation of Non-GAAP Measures 24 ($ in thousands) Three Months Ended June 30, 2026 Nightclubs Bombshells Other Corporate Total Income (loss) from operations $ 19,635 $ 759 $ (83) $ (7,343) $ 12,968 Amortization of intangibles 617 — — 1 618 Settlement of lawsuits, net of recoveries 67 25 — — 92 Loss (gain) on sale of businesses and assets 7 17 — 17 41 Gain on insurance (105) — — (2) (107) Non-GAAP operating income (loss) $ 20,221 $ 801 $ (83) $ (7,327) $ 13,612 GAAP operating margin 31.2 % 7.0 % (50.3) % (9.9) % 17.5 % Non-GAAP operating margin 32.1 % 7.4 % (50.3) % (9.9) % 18.4 % Nine Months Ended June 30, 2026 Nightclubs Bombshells Other Corporate Total Income (loss) from operations $ 49,115 $ 353 $ (345) $ (21,307) $ 27,816 Amortization of intangibles 1,848 — — 5 1,853 Impairment of assets 8,433 — — — 8,433 Settlement of lawsuits, net of recoveries (618) 115 — — (503) Stock-based compensation — — — 589 589 Loss (gain) on sale of businesses and assets 247 23 — 22 292 Gain on insurance (328) — — (2) (330) Non-GAAP operating income (loss) $ 58,697 $ 491 $ (345) $ (20,693) $ 38,150 GAAP operating margin 26.5 % 1.3 % (88.2) % (10.0) % 13.0 % Non-GAAP operating margin 31.6 % 1.8 % (88.2) % (9.7) % 17.9 %
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Reconciliation of Non-GAAP Measures* 25*Recast upon adoption of ASU 2023-07. ($ in thousands) Three Months Ended June 30, 2025 Nightclubs Bombshells Other Corporate Total Income (loss) from operations $ 17,859 $ 67 $ (70) $ (9,143) $ 8,713 Amortization of intangibles 572 1 — 3 576 Settlement of lawsuits, net of recoveries 3,281 — — — 3,281 Stock-based compensation — — — 392 392 Loss (gain) on sale of businesses and assets 191 12 — (1) 202 Gain on insurance (1,134) — — — (1,134) Non-GAAP operating income (loss) $ 20,769 $ 80 $ (70) $ (8,749) $ 12,030 GAAP operating margin 28.6 % 0.8 % (35.0) % (12.9) % 12.2 % Non-GAAP operating margin 33.3 % 0.9 % (35.0) % (12.3) % 16.9 % Nine Months Ended June 30, 2025 Nightclubs Bombshells Other Corporate Total Income (loss) from operations $ 53,244 $ 1,767 $ (344) $ (23,877) $ 30,790 Amortization of intangibles 1,718 3 — 12 1,733 Impairment of assets 1,780 — — — 1,780 Settlement of lawsuits, net of recoveries 3,557 30 — — 3,587 Stock-based compensation — — — 980 980 Loss (gain) on sale of businesses and assets 300 (1,189) — (95) (984) Gain on insurance (2,151) — — — (2,151) Non-GAAP operating income (loss) $ 58,448 $ 611 $ (344) $ (22,980) $ 35,735 GAAP operating margin 29.3 % 6.7 % (72.0) % (11.5) % 14.8 % Non-GAAP operating margin 32.2 % 2.3 % (72.0) % (11.0) % 17.1 %
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Corporate Office 10737 Cutten Road Houston, TX 77066 Phone: (281) 397-6730 Investor Relations Gary Fishman (gfishman@pondel.com) Michael Wichman (mwichman@pondel.com) Phone: (212) 883-0655 IR Website www.rcihospitality.com Nasdaq: RICK Contact Information 26