RCI Hospitality

An investment in RCI Hospitality may not be suitable for every investor, but they know their audience and the company makes money. But there's more to this story. As Rick's Cabaret, the company pushed the concept of adult entertainment about as far as they could. Then a couple of years ago they decided to expand the company into upscale casual dining. In 2013 they opened Bombshells Restaurants to appeal to the same demographic that Hooter's, the Tilted Kilt, Bone Daddies, Bikini's and Twin Peaks appeals to. And so far it seems to be a success.
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​RCI Hospitality Holdings, Inc. owns and/or operates upscale adult nightclubs serving primarily businessmen and professionals in the United States. The company operates in two segments, Nightclubs and Bombshells Restaurants and Bars. It operates adult nightclubs under the Rick's Cabaret, Tootsie's Cabaret, Club Onyx, XTC Cabaret, Cabaret East, Cabaret North, Silver City, Downtown Cabaret, Temptations, Jaguars, The Black Orchid, Seville, and Down in Texas Saloon. The company also operates five sports bar/restaurants under the Bombshells name. As of March 10, 2016, it operated 43 units. In addition, the company owns a national industry convention and tradeshow; 2 national industry trade publications; 2 national industry awards shows; and approximately 25 industry Websites, as well as publishes trade magazine serving the adult nightclubs industry. The company was formerly known as Rick's Cabaret International, Inc. and changed its name to RCI Hospitality Holdings, Inc. in August 2014. RCI Hospitality Holdings, Inc. was founded in 1982 and is based in Houston, Texas.
(Summary) (Company) (Chart)

26 June 2016
Price $10.75
1yr Target $21.25
Analysts 1
Dividend $0.12
Payout Ratio 10.90%

1yr Cap Gain 97.67%
Yield 1.11%
1yr Tot Return 98.78%

P/E 9.75
PEG 0.24
Beta 0.76

EPS (ttm) $1.10
EPS next yr $1.22
Forward P/E 8.81
EPS next 5yr 40.00%
1yr Price Support $48.80

Market Cap $107.50 Mil
Revenues $136.80 Mil
Earnings $11.20 Mil
Profit Margin 8.18%

Quick Ratio 0.60
Current Ratio 0.70
Debt/Equity 0.79

1yr RevGR 11.99%
3yr RevGR 14.79%
5yr RevGR 14.32%

1yr EarnGR -26.83%
3yr EarnGR 4.83%
5yr EarnGR ---

1yr DivGR ---
3yr DivGR ---
5yr DivGR ---

ROA 4.10%
ROE 9.00%

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​Operations

RCI Hospitality Holdings, Inc. subsidiaries own and operate upscale gentlemen's clubs and upscale casual dining restaurants. In addition, the company operates several websites and a media division.

Founded in 1983, the Rick's Cabaret pioneered the creation of elegant gentlemen's clubs featuring beautiful topless dancers and high quality restaurant service. Since going public in 1995 the company has transformed itself into a leading hospitality holding company. The company's subsidiaries own and operate over forty establishments under multiple brands throughout the US. The company changed its name from Rick's Cabare to RCI Hospitality Holdings, Inc. in 2014.

RCI Hospitality's subsidiaries have built powerful brand name awareness for their upscale environments and exceptionable adult entertainment. Many of the performers eventually went on to become Playboy Playmates and Penthouse Pets.

Forbes named RCI Hospitality Holdings one of America's 200 Best Small Companies. The company has also been profiled in The Wall Street Journal, Fortune, MarketWatch, Corporate Board Member, Smart Money, USA Today, The New York Daily News and other publications. The Rick's Cabaret-NYC Steakhouse is listed in Zagat's New York Nightlife and included in the TONY 100 list of fine Manhattan dining establishments by Time Out New York. 

RCI Hospitality's decision to create the casual dining concept around upscale casual dining and a military environment as well as starting a dividend in March 2016 has stabilized the company's financials and provided sufficient confidence to allow investors to begin to become shareholders.
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​The Way Forward 

I think RCI Hospitality is evolving, and any investment in the company is an investment in that change. I also believe that the change is a direct consequence of bringing into management more responsible businessmen who are adding structure and discipline. And they may be a little more responsible to shareholders. But I'm not naive enough to think that things will change overnight. So I plan to start a small position in this company and see where management takes the company in the next few quarters. I think this company has a lot of entertainment experience will be helpful as the company moves deeper into the restaurant business. If I'm right and they're successful, I expect the company to expand the Bombshell concept rather rapidly. And that should expand both the company's top and the bottom lines.
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