RCI Openings & Closings COVID-19 Update

Rhea-AI Summary

RCI Hospitality Holdings (Nasdaq: RICK) announced several reopenings and closings of its subsidiary locations due to evolving COVID-19 regulations.

In Illinois, Rick's Cabaret Chicago and Kappa Men's Club reopened on June 26 at 25% capacity. However, nine Texas locations closed due to new state restrictions, and Rick's Cabaret Pittsburgh will close due to local regulations. CEO Eric Langan expressed confidence with an anticipated cash reserve of $12-$13 million by June 30 and noted an increase in weekly revenues, from $500,000 in May to $2.4 million by late June.

Positive

• Weekly revenues increased from approximately $500,000 in May to over $2.4 million the week ending June 21.
• Company expects to have $12-$13 million in cash as of June 30.

Negative

• Nine Texas club locations closed due to new state restrictions, impacting revenue.
• Rick's Cabaret Pittsburgh will close due to new local regulations.

HOUSTON, June 29, 2020 /PRNewswire/ -- RCI Hospitality Holdings, Inc. (Nasdaq: RICK) today announced new reopenings and closings of subsidiary locations in response to changing COVID-19 conditions and regulations in different regions.

Reopenings

• Two locations in Illinois – Rick's Cabaret Chicago and Kappa Men's Club — reopened on Friday, June 26, at 25% occupancy. The third location in Illinois, Scarlett's Cabaret St. Louis in Washington Park, on Friday reopened to guests inside its building with similar restrictions. Its new outdoor patio has been open since June 5 with no occupancy restrictions other than social distancing.
• The three locations in Minneapolis and the one in Charlotte, NC reopened to 50% occupancy the week of June 8.
• Tootsie's Cabaret Miami plans to reopen July 6.
• The three locations in New York City should reopen in July as long as the city enters phase three of its planned easing of restrictions.

Regulatory Closings and Occupancy Changes

• Nine Texas club locations, most of them smaller units operating at 50% occupancy, closed on Friday in response to new state restrictions, while all BYOB locations continue to remain open at 50% occupancy.
• New Texas restrictions also called for the 10 Bombshells locations to reduce indoor occupancy to 50% as of last Friday from 75% as of the week of June 8. There are no occupancy restrictions on Bombshells outdoor patios other than social distancing.
• New Allegheny County, PA restrictions will cause Rick's Cabaret Pittsburgh to close on Tuesday.

Temporary Voluntary Closings

• All club and restaurant locations have and will continue to follow all required state and local practices for the health and well-being of staff and guests. On top of that, should a staff member report having Covid-19, locations may voluntarily close temporarily for several days for sanitizing and deep cleaning following CDC guidelines.
• Temporary voluntary closings since reopenings have begun include Bombshells on I-10 in Houston, on Stemmons Freeway in Dallas, and in the Houston suburb of Pearland, which is scheduled to reopen today; and Cabaret East in Fort Worth, XTC Cabaret Houston-South, and Tootsies Cabaret Miami.

CEO Comment

Eric Langan, President & CEO, said, "Based on a combination of revenues generated, locations currently operating and those anticipated to reopen, and cash on hand, we believe we are well positioned to weather temporary closings due to regional conditions. We anticipate having approximately $12-$13 million in cash as of June 30.

"Revenues have grown eight consecutive weeks from approximately $500,000 in May when Bombshells first started to open, to more than approximately $2.4 million the week ending June 21st. Sales for last week were approximately $1.8 million due to the transition between reopenings and closings. Some softness is typical through the July 4th holiday. After that, we hope to resume growth, especially if there is enough progress with Covid-19 where our subsidiaries operate to enable reopenings.

"Since reopenings started, there have been temporary voluntary closures. Subsidiaries have learned from and dealt with them, and they haven't disrupted operations. Looking ahead, there may be other temporary closings ordered in various regions of the country, but we believe we are geographically diverse enough to deal with them, too.

"We are disappointed at our subsidiaries' staff being laid off again at certain locations but pleased to report quick recovery times for all those who have had the coronavirus, and we hope that trend continues. We also hope government officials will only keep bars closed for a short time so staff at affected subsidiaries will be able to return to earning a living as quickly as possible."

RCI plans to report club and restaurant sales for the third quarter ending June 30, 2020 on July 9.

Forward-Looking Statements

This press release 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 press release, including, but not limited to, the risks and uncertainties associated with (i) operating and managing an adult 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 SEC and the Nasdaq Stock Market, (vii) the impact and uncertainty of the coronavirus pandemic, and (viii) numerous other factors such as laws governing the operation of adult entertainment 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, 2019 and its latest Form 10-Q 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.

Media & Investor Contacts

Gary Fishman and Steven Anreder at 212-532-3232 or gary.fishman@anreder.com and steven.anreder@anreder.com

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SOURCE RCI Hospitality Holdings, Inc.

FAQ

What is the latest news about RCI Hospitality Holdings (RICK) regarding COVID-19?

RCI Hospitality Holdings announced recent reopenings and closings of several subsidiary locations in response to COVID-19 regulations, with a focus on maintaining safety.

How has RCI Hospitality Holdings (RICK) revenue changed recently?

RCI's revenues have grown from approximately $500,000 in May to over $2.4 million by the week ending June 21, although some decline was noted due to reopening transitions.

What is the cash position of RCI Hospitality Holdings (RICK)?

RCI expects to have approximately $12-$13 million in cash as of June 30, 2020.

Which RCI Hospitality Holdings locations have recently closed?

Nine Texas club locations closed due to new state restrictions, and Rick's Cabaret Pittsburgh will close following local regulations.

When will RCI Hospitality Holdings (RICK) report third-quarter sales?

RCI plans to report club and restaurant sales for the third quarter ending June 30, 2020, on July 9.