RCI Acquires 821,000 Shares from ADW Capital Partners, L.P.

HOUSTON--(BUSINESS WIRE)--RCI Hospitality Holdings, Inc. (Nasdaq: RICK) today announced the acquisition of all the shares of RCI stock owned by ADW Capital Partners, L.P.

The 821,000 shares were acquired for $30.0 million or $36.54 each for $8.0 million in cash and $22.0 million in two-year seller financing at 12%. The transaction closed today.

The Company said the transaction:

1. Reduces its share count by about 9.5% to approximately 7,850,000 shares outstanding,
2. Expedites its Back to Basics 5-Year Capital Allocation Plan to reduce shares to 7.5 million by fiscal year 2030, and
3. Is accretive from day one to free cash flow per share based on static free cash flow for the trailing 12 months.

Eric Langan, President and CEO of RCI, said: “While the price per share is above the current market, we believe our shares are significantly undervalued. As such, this agreement represents a rare opportunity to significantly reduce shares on an accretive free cash flow per share basis and meets a key goal of our Capital Allocation Plan in a single transaction.”

The transaction was approved by RCI’s board of directors after receiving a fairness opinion from a third party business advisory firm that the purchase price was fair from a financial point of view to shareholders.

About RCI Hospitality Holdings, Inc. (Nasdaq: RICK) (X: @RCIHHinc)

With more than 60 locations, RCI Hospitality Holdings, Inc., through its subsidiaries, is the country’s leading company in adult nightclubs and sports bars/restaurants. See all our brands at www.rcihospitality.com.

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, including, but not limited to, the risks and uncertainties associated with (i) operating and managing an adult entertainment or restaurant 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, and (vi) numerous other factors such as laws governing the operation of adult entertainment or restaurant 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, 2024, 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.