RCI Hospitality Holdings, Inc.

and welcome to RCI Hospitality Holdings first quarter 2025 earnings call. You can find the company's presentation on RCI's website. Go to the investor relations section and all the links will be at the top of the page. Please turn with me to slide two of our presentation. I'm Mark Moran, CEO of Equity Animal. I'll be the host of our call today. I'm coming to you from Denver, Colorado. Eric Langen, President and CEO of RCI Hospitality, and CFO Bradley Shea are in Houston. Please turn with me to slide three. RCI is making this call exclusively on xSpaces. To ask a question, you'll need to join the space with a mobile device. To listen only, you can join the space on a personal computer. At this time, all participants are in a listen only mode. A question and answer session will follow. This conference call is being recorded. Please turn with me to slide four. I want to remind everybody of our safe harbor statement You may hear or see forward-looking statements that involve risks and uncertainties. Actual results may differ materially from those currently anticipated. We disclaim any obligation to update information disclosed in this call as a result of developments that occur afterwards. Please turn with me to slide five. I also direct you to the explanation of RIC's non-GAAP financial measures. Now, I'm pleased to introduce Eric Langen, President and CEO of RCI Hospitality. Eric, take it away.

Thanks, Mark. If everyone will please turn to slide six. Thank you for joining us today. Let me run through some key takeaways. All comparisons are year over year unless otherwise noted. In our nightclub segment, they generated increase in total sales and same-store sales, while GAAP and non-GAAP operating profits were approximately level with the year-ago quarter. In our bombshell segment, total sales declined as expected with the sale closure of underperforming locations, but GAAP and non-GAAP operating profit and margins both improved. On a consolidated basis, net cash provided by operating activities and free cash flow nearly matched a year ago levels. And we continue to make notable progress with our back to the basics five-year cap allocation plan. During the first quarter, we sold or closed four underperforming locations in the bombshell segment for a total of five since September of 2024. We also repurchased 66,000 shares for $3.2 million. And as of 12-31, we had 8,989,000 shares of common stock outstanding. In January, we acquired the Flight Club, a premier gentleman's club in the Detroit market. Purchase price was $8 million for the club and $3 million for the real estate. We estimate the club to generate about $2 million in annually adjusted EBITDA. We also opened the bombshells in Denver. And as part of the effort to improve bombshells, we have changed leadership. And Rafael Pedraza is now promoted to our director of operations from assistant director of operations. Now here's Bradley to review our performance in more details.

Thank you, Eric. Please turn to slide seven. All comparisons are year over year unless otherwise noted. Fourth quarter sales totaled $71.5 million. That largely reflects the sale and closure of the non-performing locations in the bombshell segment, partially offset by the increased sales in the nightclub segment. Other gains totaled $2.2 million. Net income attributed to RCIHH common shareholders was $9.0 million. EPS was $1.01 gap and $0.80 non-gap. Net cash provided by operating activities was $13.3 million. Free cash flow was $12.1 million.