Acquisition and Rebranding Success
RCI Hospitality acquired two upscale adult nightclubs: Flight Club in Detroit and Platinum West in South Carolina, aligning with their capital allocation strategy. Additionally, they opened a Bombshells in Denver and rebranded Chicas Locas in El Paso.
Improvement in Net Income
Net income attributable to common shareholders was $3.2 million, an increase of $2.5 million year-over-year, with GAAP EPS rising to $0.36 per share from $0.08 per share.
Decrease in Impairments
Impairments and other charges were reduced to $2.1 million, down from $8.2 million, reflecting improved management in the nightclub segment.
Capital Allocation Strategy
RCI repurchased 56,875 common shares for $2.9 million and aims to allocate 40% of free cash flow to club acquisitions and 60% to share buybacks, debt reduction, and dividends to grow free cash flow per share by 10% to 15% annually.