Rci Hospitality Holdings, Inc. (NASDAQ:RICK)

RICK ($15.66) reported Q4 2016 results:

• Sales of $33.0 million vs $32.8 million in the prior year and ahead of analyst estimates of $32.6 million

• Non-GAAP EPS of $0.31 vs $0.21 in the prior year and ahead of analyst estimates of $0.28

Comments from management:

"We ended FY16 in the best shape we've been in, thanks to the first full year implementation of our disciplined approach to capital allocation," Mr. Langan said...

...Our FY17 plan is to follow through with what we started in FY16. We will continue our approach to capital allocation, as evidenced by our ongoing share repurchases. First half sales should benefit from the momentum developed in the second half of 2016. The second half should grow as the new Bombshells units open and we begin to sell our first franchises. Margins and FCF generation should benefit from our more profitable portfolio of clubs and restaurants and reduced interest expense as a percent of revenues."

Preliminary First Quarter Fiscal 2014 Results

• Total sales were $29.1 million, a quarterly record, up 8.4% from $26.8 million in the year ago quarter. There were 41 units in the 1Q14 count versus 34 in the year ago quarter. The figures do not include the Company's internet or media divisions.

Eric Langan, President and CEO, commented, "We continue to be very pleased with our overall performance, including our recently acquired adult clubs and newly launched sports bar/restaurants, with the exception of bad weather in Texas. Sales at clubs open more than a year were up year over year for the first time since the December 2012 quarter. This reflects the initial benefits of our post-recession strategy of increasing patronage from bigger ticket, higher margin customers at many of our locations."

Fourth Quarter 2013 Results

• Revenues for the quarter were $28.0 million vs $23.9 million in the prior year
• Non-GAAP EPS for the fourth quarter of 2013 was $0.27 vs. $0.31 last year.

"Fiscal 2013 was in many ways a transitional year for us as we moved from a recessionary model in many clubs to our more typical formats," said President and CEO Eric Langan. "This shift means that some lower margin customers are visiting the clubs less frequently, but higher margin guests are returning, which helps improve our income picture. The year was also notable for the launch of our restaurant division, which we believe will become a solid growth catalyst in the future. Going forward, we are looking at a strong 2014. We have over 40 locations open at the present time, with six more in various stages of development or construction. We continue to examine acquisition possibilities and ways to unlock the value of our real estate."

Guidance:

The Company said that it expects GAAP earnings per share to be approximately $1.20 for the year, with non-GAAP* EPS of $1.70.

Recall that we have removed RICK from the GeoBargain list. We just do not see how the company will meet its 2010 September guidance due the moderation of economic growth.

We had originally coded RICK as GeoBargain on August 13, 2009 at $9.05. The stock reached a high of $16.05 during the first quarter of 2010 and currently trades at $7.27.

RICK shares are $3.00 off their high of $16.05. On February 6, 2010 we commented:

"The company also announced that it has entered into an acquisition agreement with VCG Holding Corp. We are not sure how investors will react to this news in this timid market. Taking some shares off the table may not be a bad idea given that the stock has increased nicely from when we coded it as a GeoBargain on August 12, 2009 at $8.53."

We were worried about dilution even though the company maintained 2009 guidance. After a brief pause, RICK actually reached a 52 week high of $16.05. It has since pulled back and the acquisition of VCG is now off the table.  It is possible that investors may soon flock to RICK shares as some uncertainty subsided.

GeoBargain Ricks Cabaret reported financial results after the close today.

Temporary expenses associated with acquisition activities and aggressive marketing costs resulted in the company missing analyst estimates by $0.05. However  RICK has maintained its guidance of $0.95 to $1.05. The company also announced that it has entered into an  acquisition agreement with VCG Holding Corp. We are not sure how investors will react to this news in this trepid market.  Taking some shares off the table may not be a bad idea given that the stock has increased nicely from when we coded it as a GeoBargain on August 12, 2009 at $8.53.

Yesterday, The GeoTeam® coded Ricks Cabaret as a GeoBargain. The reason we made this decision was due to full year September 2010 analyst estimates that show 51% growth in earnings per share and an associated low PEG ratio of 0.28.   Its possible that that stock may experience short term resistance due to the fact that growth will not be significant until 2010. GeoTeam is taking a small position in the stock.   Please note that RICK currently meets only 6 of 10 GeoBargain criteria.