RCI Hospitality Holdings, Inc. (NASDAQ:RICK) Q1 2019 Earnings Conference Call Transcript

Feb 11, 2019 • 04:30 pm ET


RCI Hospitality Holdings, Inc. (NASDAQ:RICK) Q1 2019 Earnings Conference Call Transcript


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Greetings, and welcome to RCI Hospitality Holdings Fiscal 2019 First Quarter Results Conference Call and Webcast. At this time, all participants are in a listen-only mode, a question-and-answer session will follow the formal presentation. (Operator Instructions) As a reminder, this conference is being recorded.

It is now my pleasure to introduce Gary Fishman, who handles investor relations for RCI. Thank you. You may begin.

Gary Fishman

Thank you, Sheri. For those of you listening to this call on the phone, you can find our presentation on the RCI website. Click company and investor information just under the RCI logo, that will take you to the company investor info page. Scroll down a little, and you'll find all the necessary links for this call.

Please turn to slide two, I want to remind everybody of our safe harbor statement, it is posted at the beginning of our conference call presentation. It reminds you that you may hear or see forward-looking statements that involve a number of risks and uncertainties. I urge you to read it. Actual results may differ materially from those currently anticipated, and we disclaim any obligation to update information disclosed on this call as a result of developments that occur afterwards.

Now, please turn to slide three, and I also direct you to the explanation of non-GAAP measurements that we use and are included in our presentation and news cast. Finally, I'd like to invite everyone listening in the New York City area to join us tonight, at 6 o'clock to meet management at Rick's Cabaret, New York, Manhattan's number one gentlemen's club. You can also tour its sister club, Hoops Cabaret and Sports Bar, next-door. Rick's is located at 50 West, 33rd Street between Fifth Avenue and Broadway, right around the corner from the Empire State Building. If you haven't RSVP-ed, ask for me at the door.

Now I'm pleased to introduce Eric Langan, President and CEO of RCI Hospitality.

Eric Langan

Thank you, Gary. And thank you everyone for joining us this afternoon. If you please turn to slide four to review today's news. We generated strong first quarter results, total revenues increased 6.8% to $44 million and GAAP EPS was $0.65 compared to $1.47 a year ago. This year's first quarter included $1.2 million in pre-tax gain from the sale of non-income producing assets. It also included $447,000 in pre-tax, non-operating loss. This reflected implementation of a new accounting standard for changes in market value of equity securities. On the other hand, the year-ago quarter included $9.7 million in deferred tax credit, as a result of federal tax reform. The year-ago quarter also included $900,000 in debt issuance costs, write-offs and prepayment penalties related to our large Centennial Bank refinancing.

On a non-GAAP basis, which eliminates all of these items and some others, EPS was $0.61, up 15% year-over-year and free cash flow was $11.1 million, up 47%. In line with our capital allocation strategy and given where the stock was trading, we began buying back shares in the first