HOUSTON, July 25, 2019 /PRNewswire/ -- RCI Hospitality
Holdings, Inc. (Nasdaq: RICK) today reported preliminary unaudited
financial results for the second quarter of Fiscal 2019 ended
March 31, 2019. The preliminary
financial information presented in this news release has not been
reviewed by an independent registered public accounting firm. See
"Financial Information Is Preliminary and Subject to Change"
below.
2Q19 vs. 2Q18
- Diluted EPS of $0.70 compared to
$0.48
- Diluted Non-GAAP* EPS of $0.63
compared to $0.65
- 2Q19 GAAP included net pre-tax gains of $1.0 million on the sale of one parcel of excess
Bombshells land and a former club parking lot vs. net pre-tax
charges of $2.3 million in 2Q18
- Total revenues of $44.8 million
compared to $41.2 million on 47 and
43 units, respectively
- Repurchased 70,700 shares in 2Q19 for $1.6 million ($22.71 average per share)
- Free cash flow (FCF) of $8.8
million based on net cash provided by operating activities
of $9.5 million, less maintenance
capital expenditures of $0.7
million
- Lifetime retained earnings exceeded $100
million for the first time
CEO Comment (All comparisons to year ago periods
unless otherwise noted)
"We generated strong top and bottom line results and achieved
many strategic and financial objectives during the second quarter,
enabling us to exceed $100 million in
lifetime retained earnings," said Eric
Langan, President and CEO.
"Total revenues for 2Q19 grew 8.7% primarily due to our
Nightclubs and Bombshells segments. Operating income expanded 35.7%
due to revenue growth and margin expansion in Nightclubs, and gains
on the sale of excess real estate. EPS totaled $0.70 GAAP and $0.63 non-GAAP. Nightclubs benefitted from our
improved club lineup. Bombshells revenues benefitted from the
strong performance of new locations. Segment operating income and
margin continued to demonstrate sequential quarterly
improvement."
"We achieved initial progress with part of our Bombshells
development strategy through the sale of our first excess parcel
for a gain of more than 80%. With our other asset sale, we
continued the liquidation of non-income producing properties.
During 3Q19, we also sold or leased four more non-income
producing-properties, including the sale of another parcel of
excess Bombshells property, adjacent to the new I-10 location, for
a hotel development. We hope to conclude the sale or lease of
remaining non-income-producing properties by year-end FY19 or early
FY20."
"During 2Q19, long-term debt was reduced by $3.3 million. By April
30th, we paid off the $5.0
million unsecured bank term loan used to help finance the
Chicago and Pittsburgh club acquisitions. 2Q19 FCF was
$8.8 million, up 66.3%. For the first
six months of FY19, FCF totaled $20.0
million, up 54.9%."
2Q19 REVIEW (All comparisons to year ago periods
unless otherwise noted)
- Total Revenues: Total revenues of $44.8 million grew $3.6
million with increases of $1.1
million (+6.4%) in alcoholic beverages, $1.0 million (+18.7%) in food, $846K (+5.2%) in service, and $625K (+27.2%) in other. Revenues increased with
the addition of the Chicago and
Pittsburgh clubs, club same-store
sales growth (ex-Minneapolis), and
three new Houston area Bombshells
(Pearland and I-10 for the entire
quarter and 249 in Tomball for a
few days). This more than offset strong year-ago revenues from our
three large Minneapolis clubs due
to high traffic from the 2018 pro football championship in that
city and the negative effects on revenue during 2Q19 caused by the
unusually cold weather in late January-early February 2019 in many locations across the
country.
- Operating Income: Operating income of $11.2 million (24.9% of revenues) increased
$2.9 million from $8.2 million (20.0%). Excluding other gains and
charges, expenses increased 12.9% or $4.0
million to $34.6 million
(77.3%) from $30.7 million (74.4%).
The increase reflected new Bombshells and those in development. It
also reflected higher corporate expenses year-over-year as a result
of the timing of certain items in 2Q18. The $1.0 million of net gains in 2Q19 compared to net
charges of $2.3 million in 2Q18. On a
non-GAAP basis, which excludes these gains/charges and other items,
operating income was $10.3 million
(23.1%) compared to $10.6 million
(25.7%).
- Nightclubs Segment: Revenues of $37.0 million increased $1.6 million or 4.5%, with 39 units compared to
38. Operating income increased $3.2
million or 26.9% to $15.1
million (40.7% of revenues) from $11.9 million (33.5%). 2Q19 included the
$1.0 million in gains on the sale of
the two previously mentioned properties. On a non-GAAP basis,
segment income increased $1.7 million
or 13.7% to $14.2 million from
$12.5 million as segment margin
expanded to 38.2% from 35.1%.
- Bombshells Segment: Revenues of $7.5 million increased $1.9 million or 34.4%, with 8 units compared to
5. New units more than offset the previously reported decline in
comparable same-store sales. Operating income was $738K (9.8% of revenues) compared to $965K (17.2%). This reflected reduced operating
leverage due to the same-store sales decline. It also reflected
expenses without the benefit of corresponding revenues from
Bombshells 249, which opened March 27,
2019, and locations in development. While down from 2Q18,
same-store sales and operating income and margin demonstrated
continued sequential quarterly improvement in FY19.
- Interest & Taxes: Interest expense of $2.6 million (5.9% of revenues) increased
$0.5 million from $2.1 million (5.1%) due to higher debt related to
the Pittsburgh and Chicago club acquisitions and new Bombshells
development, and a lower average interest rate. Income tax expense
increased $0.4 million while the
effective tax rate fell to 22.3% from 24.2% with the full effect in
Fiscal 2019 of the federal Tax Cuts and Jobs Act.
- Asset Management: There were two sales: (i) a small
portion of the excess land around newly opened Bombshells 249 in
Tomball for $1.4 million cash for a $638K pre-tax gain after closing costs (proceeds
were used in part to pay down $980K
in debt on the entire Bombshells 249 property); and (ii) an excess
parking lot near the former Club Onyx Dallas for $1.4 million, consisting of $250K in cash and $1.15
million in an 8%, 3-year note, for a $383K pre-tax gain after closing costs.
Financial Information Is Preliminary and Subject to
Change
The unaudited interim financial information presented in this
news release is preliminary and has not been reviewed by an
independent registered public accounting firm. When RCI files its
Quarterly Report on Form 10-Q for the March
31, 2019 period, the financial statements for the three and
six months ended March 31, 2019 may
differ from the results disclosed in this news release and the
differences may be material. The final financial results reported
for the three and six months ended March 31,
2019 may also differ from the results reported in this
release as a result of review procedures to be performed by an
independent registered public accounting firm.
*Non-GAAP Financial Measures
In addition to our financial information presented in accordance
with GAAP, management uses certain non-GAAP financial measures,
within the meaning of the SEC Regulation G, to clarify and enhance
understanding of past performance and prospects for the future.
Generally, a non-GAAP financial measure is a numerical measure of a
company's operating performance, financial position or cash flows
that excludes or includes amounts that are included in or excluded
from the most directly comparable measure calculated and presented
in accordance with GAAP. We monitor non-GAAP financial measures
because it describes the operating performance of the Company and
helps management and investors gauge our ability to generate cash
flow, excluding (or including) some items that management believes
are not representative of the ongoing business operations of the
Company, but are included in (or excluded from) the most directly
comparable measures calculated and presented in accordance with
GAAP. Relative to each of the non-GAAP financial measures, we
further set forth our rationale as follows:
- Non-GAAP Operating Income and Non-GAAP Operating Margin.
We calculate non-GAAP operating income and non-GAAP operating
margin by excluding the following items from income from operations
and operating margin: amortization of intangibles, gains or losses
on sale of assets, gain on insurance, and settlement of lawsuits.
We believe that excluding these items assists investors in
evaluating period-over-period changes in our operating income and
operating margin without the impact of items that are not a result
of our day-to-day business and operations.
- Non-GAAP Net Income and Non-GAAP Net Income per Diluted
Share. We calculate non-GAAP net income and non-GAAP net income
per diluted share by excluding or including certain items to net
income attributable to RCIHH common shareholders and diluted
earnings per share. Excluded items are: amortization of
intangibles, costs and charges related to debt refinancing, income
tax expense (benefit), gains or losses on sale of assets, gain on
insurance, and settlement of lawsuits. Included item is the
non-GAAP provision for current and deferred income taxes,
calculated at 22.1% and 26.5% effective tax rate of the pre-tax
non-GAAP income before taxes for the six months ended March 31, 2019 and 2018, respectively. We believe
that excluding and including such items help management and
investors better understand our operating activities.
- Adjusted EBITDA. We calculate adjusted EBITDA by
excluding the following items from net income attributable to RCIHH
common shareholders: depreciation expense, amortization of
intangibles, income tax expense (benefit), net interest expense,
gains or losses on sale of assets, gain on insurance, and
settlement of lawsuits. We believe that adjusting for such items
helps management and investors better understand our operating
activities. Adjusted EBITDA provides a core operational performance
measurement that compares results without the need to adjust for
federal, state and local taxes which have considerable variation
between domestic jurisdictions. The results are, therefore, without
consideration of financing alternatives of capital employed. We use
adjusted EBITDA as one guideline to assess our unleveraged
performance return on our investments. Adjusted EBITDA is also the
target benchmark for our acquisitions of nightclubs.
- Management also uses non-GAAP cash flow measures such as
free cash flow. Free cash flow is derived from net cash
provided by operating activities less maintenance capital
expenditures. We use free cash flow as the baseline for the
implementation of our capital allocation strategy.
Notes
- Unit counts above are at period end.
- All references to the "company," "we," "our," and similar terms
include RCI Hospitality Holdings, Inc. and its subsidiaries, unless
the context indicates otherwise.
- Planned opening dates are subject to change due to weather,
which could affect construction schedules, and scheduling of final
municipal inspections.
About RCI Hospitality Holdings, Inc. (Nasdaq: RICK)
With more than 40 units, RCI Hospitality Holdings, Inc., through
its subsidiaries, is the country's leading company in gentlemen's
clubs and sports bars/restaurants. Clubs in New York City, Chicago, Dallas/Ft.
Worth, Houston,
Miami, Minneapolis, St.
Louis, Charlotte, Pittsburgh, and other markets operate under
brand names, such as Rick's Cabaret, XTC, Club Onyx, Vivid Cabaret,
Jaguars, Tootsie's Cabaret, and Scarlett's Cabaret. Sports
bars/restaurants operate under the brand name Bombshells Restaurant
& Bar. Please visit http://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
in this press release, including the risks and uncertainties
associated with operating and managing an adult business, the
business climates in cities where it operates, the success or lack
thereof in launching and building the company's businesses, risks
and uncertainties related to cybersecurity, conditions relevant to
real estate transactions, and numerous other factors such as laws
governing the operation of adult entertainment businesses,
competition and dependence on key personnel. 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
|
RCI HOSPITALITY
HOLDINGS, INC.
|
|
UNAUDITED
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
|
|
(in thousands, except
per share data)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For the Three
Months Ended March 31,
|
|
For the Six Months
Ended March 31,
|
|
|
|
|
|
2019(a)
|
|
2018
|
|
2019(a)
|
|
2018
|
|
|
|
|
|
Amount
|
|
% of
Revenue
|
|
Amount
|
|
% of
Revenue
|
|
Amount
|
|
% of
Revenue
|
|
Amount
|
|
% of
Revenue
|
|
Revenues
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Sales of alcoholic
beverages
|
|
$
18,486
|
|
41.2%
|
|
$
17,372
|
|
42.1%
|
|
$
36,796
|
|
41.4%
|
|
$
35,177
|
|
42.7%
|
|
Sales of food and
merchandise
|
|
6,439
|
|
14.4%
|
|
5,424
|
|
13.2%
|
|
12,129
|
|
13.7%
|
|
10,731
|
|
13.0%
|
|
Service
revenues
|
|
16,979
|
|
37.9%
|
|
16,133
|
|
39.1%
|
|
34,310
|
|
38.6%
|
|
32,022
|
|
38.8%
|
|
Other
|
|
2,922
|
|
6.5%
|
|
2,297
|
|
5.6%
|
|
5,614
|
|
6.3%
|
|
4,508
|
|
5.5%
|
|
|
Total
revenues
|
|
44,826
|
|
100.0%
|
|
41,226
|
|
100.0%
|
|
88,849
|
|
100.0%
|
|
82,438
|
|
100.0%
|
|
Operating
expenses
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost of goods
sold
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Alcoholic beverages
sold
|
|
3,790
|
|
20.5%
|
|
3,589
|
|
20.7%
|
|
7,526
|
|
20.5%
|
|
7,344
|
|
20.9%
|
|
|
Food and merchandise
sold
|
|
2,308
|
|
35.8%
|
|
1,964
|
|
36.2%
|
|
4,292
|
|
35.4%
|
|
4,058
|
|
37.8%
|
|
|
Service and
other
|
|
94
|
|
0.5%
|
|
43
|
|
0.2%
|
|
186
|
|
0.5%
|
|
79
|
|
0.2%
|
|
|
|
Total cost of goods
sold (exclusive of items shown below)
|
|
6,192
|
|
13.8%
|
|
5,596
|
|
13.6%
|
|
12,004
|
|
13.5%
|
|
11,481
|
|
13.9%
|
|
Salaries and
wages
|
|
11,908
|
|
26.6%
|
|
10,347
|
|
25.1%
|
|
24,004
|
|
27.0%
|
|
21,724
|
|
26.4%
|
|
Selling, general and
administrative
|
|
14,341
|
|
32.0%
|
|
12,848
|
|
31.2%
|
|
28,368
|
|
31.9%
|
|
25,660
|
|
31.1%
|
|
Depreciation and
amortization
|
|
2,200
|
|
4.9%
|
|
1,899
|
|
4.6%
|
|
4,253
|
|
4.8%
|
|
3,808
|
|
4.6%
|
|
Other charges
(gains), net
|
|
(981)
|
|
-2.2%
|
|
2,305
|
|
5.6%
|
|
(2,078)
|
|
-2.3%
|
|
2,394
|
|
2.9%
|
|
|
Total operating
expenses
|
|
33,660
|
|
75.1%
|
|
32,995
|
|
80.0%
|
|
66,551
|
|
74.9%
|
|
65,067
|
|
78.9%
|
|
Income from
operations
|
|
11,166
|
|
24.9%
|
|
8,231
|
|
20.0%
|
|
22,298
|
|
25.1%
|
|
17,371
|
|
21.1%
|
|
Other income
(expenses)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest
expense
|
|
(2,645)
|
|
-5.9%
|
|
(2,106)
|
|
-5.1%
|
|
(5,166)
|
|
-5.8%
|
|
(5,185)
|
|
-6.3%
|
|
Interest
income
|
|
75
|
|
0.2%
|
|
68
|
|
0.2%
|
|
126
|
|
0.1%
|
|
135
|
|
0.2%
|
|
Non-operating gain
(loss)
|
|
77
|
|
0.2%
|
|
-
|
|
0.0%
|
|
(370)
|
|
-0.4%
|
|
-
|
|
0.0%
|
|
Income before income
taxes
|
|
8,673
|
|
19.3%
|
|
6,193
|
|
15.0%
|
|
16,888
|
|
19.0%
|
|
12,321
|
|
14.9%
|
|
Income tax expense
(benefit)
|
|
1,930
|
|
4.3%
|
|
1,499
|
|
3.6%
|
|
3,741
|
|
4.2%
|
|
(6,728)
|
|
-8.2%
|
|
Net income
|
|
6,743
|
|
15.0%
|
|
4,694
|
|
11.4%
|
|
13,147
|
|
14.8%
|
|
19,049
|
|
23.1%
|
|
Net income
attributable to noncontrolling interests
|
|
(8)
|
|
0.0%
|
|
(9)
|
|
0.0%
|
|
(68)
|
|
-0.1%
|
|
(53)
|
|
-0.1%
|
|
Net income
attributable to RCIHH common shareholders
|
|
$
6,735
|
|
15.0%
|
|
$
4,685
|
|
11.4%
|
|
$
13,079
|
|
14.7%
|
|
$
18,996
|
|
23.0%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings per
share
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic and
diluted
|
|
$
0.70
|
|
|
|
$
0.48
|
|
|
|
$
1.35
|
|
|
|
$
1.95
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average
shares outstanding
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic and
diluted
|
|
9,679
|
|
|
|
9,719
|
|
|
|
9,696
|
|
|
|
9,719
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Dividends per
share
|
|
$
0.03
|
|
|
|
$
0.03
|
|
|
|
$
0.06
|
|
|
|
$
0.06
|
|
|
|
|
|
(a)
|
The unaudited
condensed consolidated Statements of Income for the three and six
months ended March 31, 2019 are preliminary and therefore subject
to adjustments in connection with subsequent events arising through
the date of the company's filing of its Quarterly Report on Form
10-Q. The filing of the Form 10-Q will be completed as soon as
practicable after the appointment of an independent registered
public accounting firm and the completion of review procedures by
such firm. The final financial results reported for these periods
may differ from the results reported in this release as a result of
review procedures to be performed by an independent registered
public accounting firm.
|
|
RCI HOSPITALITY
HOLDINGS, INC.
|
|
NON-GAAP FINANCIAL
MEASURES
|
|
(in thousands, except
per share and percentage data)
|
|
|
|
|
|
|
|
|
|
|
|
For the Three
Months
|
|
For the Six
Months
|
|
|
Ended March
31,
|
|
Ended March
31,
|
|
|
2019(a)
|
|
2018
|
|
2019(a)
|
|
2018
|
|
Reconciliation of
GAAP net income to Adjusted EBITDA
|
|
|
|
|
|
|
|
|
|
Net income
attributable to RCIHH common shareholders
|
|
$
6,735
|
|
$
4,685
|
|
$
13,079
|
|
$
18,996
|
|
Income tax expense
(benefit)
|
|
1,930
|
|
1,499
|
|
3,741
|
|
(6,728)
|
|
Interest expense,
net
|
|
2,570
|
|
2,038
|
|
5,040
|
|
5,050
|
|
Settlement of
lawsuits
|
|
84
|
|
773
|
|
144
|
|
800
|
|
Impairment of
assets
|
|
-
|
|
1,550
|
|
-
|
|
1,550
|
|
Loss (gain) on sale
of assets
|
|
(1,065)
|
|
(18)
|
|
(2,222)
|
|
64
|
|
Unrealized loss
(gain) on equity securities
|
|
(77)
|
|
-
|
|
370
|
|
-
|
|
Gain on
insurance
|
|
-
|
|
-
|
|
-
|
|
(20)
|
|
Depreciation and
amortization
|
|
2,200
|
|
1,899
|
|
4,253
|
|
3,808
|
|
Adjusted
EBITDA
|
|
$
12,377
|
|
$
12,426
|
|
$
24,405
|
|
$
23,520
|
|
|
|
|
|
|
|
|
|
|
Reconciliation of
GAAP net income to non-GAAP net income
|
|
|
|
|
|
|
|
|
|
Net income
attributable to RCIHH common shareholders
|
|
$
6,735
|
|
$
4,685
|
|
$
13,079
|
|
$
18,996
|
|
Amortization of
intangibles
|
|
153
|
|
48
|
|
309
|
|
96
|
|
Settlement of
lawsuits
|
|
84
|
|
773
|
|
144
|
|
800
|
|
Impairment of
assets
|
|
-
|
|
1,550
|
|
-
|
|
1,550
|
|
Loss (gain) on sale
of assets
|
|
(1,065)
|
|
(18)
|
|
(2,222)
|
|
64
|
|
Unrealized loss
(gain) on equity securities
|
|
(77)
|
|
-
|
|
370
|
|
-
|
|
Gain on
insurance
|
|
-
|
|
-
|
|
-
|
|
(20)
|
|
Costs and charges
related to debt refinancing
|
|
-
|
|
-
|
|
-
|
|
827
|
|
Income tax effect of
adjustments above
|
|
223
|
|
(763)
|
|
333
|
|
(10,858)
|
|
Non-GAAP net
income
|
|
$
6,053
|
|
$
6,275
|
|
$
12,013
|
|
$
11,455
|
|
|
|
|
|
|
|
|
|
|
Reconciliation of
GAAP diluted earnings per share to non-GAAP diluted earnings per
share
|
|
|
|
|
|
|
|
Diluted
shares
|
|
9,679
|
|
9,719
|
|
9,696
|
|
9,719
|
|
GAAP diluted earnings
per share
|
|
$
0.70
|
|
$
0.48
|
|
$
1.35
|
|
$
1.95
|
|
Amortization of
intangibles
|
|
0.02
|
|
0.00
|
|
0.03
|
|
0.01
|
|
Settlement of
lawsuits
|
|
0.01
|
|
0.08
|
|
0.01
|
|
0.08
|
|
Impairment of
assets
|
|
-
|
|
0.16
|
|
-
|
|
0.16
|
|
Loss (gain) on sale
of assets
|
|
(0.11)
|
|
(0.00)
|
|
(0.23)
|
|
0.01
|
|
Unrealized loss
(gain) on equity securities
|
|
(0.01)
|
|
-
|
|
0.04
|
|
-
|
|
Gain on
insurance
|
|
-
|
|
-
|
|
-
|
|
(0.00)
|
|
Costs and charges
related to debt refinancing
|
|
-
|
|
-
|
|
-
|
|
0.09
|
|
Income tax effect of
adjustments above
|
|
0.02
|
|
(0.08)
|
|
0.03
|
|
(1.12)
|
|
Non-GAAP diluted
earnings per share
|
|
$
0.63
|
|
$
0.65
|
|
$
1.24
|
|
$
1.18
|
|
|
|
|
|
|
|
|
|
|
Reconciliation of
GAAP operating income to non-GAAP operating income
|
|
|
|
|
|
|
|
|
|
Income from
operations
|
|
$
11,166
|
|
$
8,231
|
|
$
22,298
|
|
$
17,371
|
|
Amortization of
intangibles
|
|
153
|
|
48
|
|
309
|
|
96
|
|
Settlement of
lawsuits
|
|
84
|
|
773
|
|
144
|
|
800
|
|
Impairment of
assets
|
|
-
|
|
1,550
|
|
-
|
|
1,550
|
|
Loss (gain) on sale
of assets
|
|
(1,065)
|
|
(18)
|
|
(2,222)
|
|
64
|
|
Gain on
insurance
|
|
-
|
|
-
|
|
-
|
|
(20)
|
|
Non-GAAP operating
income
|
|
$
10,338
|
|
$
10,584
|
|
$
20,529
|
|
$
19,861
|
|
|
|
|
|
|
|
|
|
|
Reconciliation of
GAAP operating margin to non-GAAP operating margin
|
|
|
|
|
|
|
|
|
|
GAAP operating
margin
|
|
24.9%
|
|
20.0%
|
|
25.1%
|
|
21.1%
|
|
Amortization of
intangibles
|
|
0.3%
|
|
0.1%
|
|
0.3%
|
|
0.1%
|
|
Settlement of
lawsuits
|
|
0.2%
|
|
1.9%
|
|
0.2%
|
|
1.0%
|
|
Impairment of
assets
|
|
0.0%
|
|
3.8%
|
|
0.0%
|
|
1.9%
|
|
Loss (gain) on sale
of assets
|
|
-2.4%
|
|
0.0%
|
|
-2.5%
|
|
0.1%
|
|
Gain on
insurance
|
|
0.0%
|
|
0.0%
|
|
0.0%
|
|
0.0%
|
|
Non-GAAP operating
margin
|
|
23.1%
|
|
25.7%
|
|
23.1%
|
|
24.1%
|
|
|
|
|
|
|
|
|
|
|
Reconciliation of
GAAP net cash provided by operating activities to non-GAAP free
cash flow
|
|
|
|
|
|
|
|
Net cash provided by
operating activities
|
|
$
9,519
|
|
$
5,932
|
|
$
20,971
|
|
$
14,077
|
|
Less: Maintenance
capital expenditures
|
|
741
|
|
654
|
|
1,117
|
|
1,262
|
|
Free cash
flow
|
|
$
8,778
|
|
$
5,278
|
|
$
19,854
|
|
$
12,815
|
|
|
|
(a)
|
The condensed
consolidated schedule of Non-GAAP Financial Measures for the three
and six months ended March 31, 2019 are preliminary and therefore
subject to adjustments in connection with subsequent events arising
through the date of the company's filing of its Quarterly Report on
Form 10-Q. The filing of the Form 10-Q will be completed as soon as
practicable after the appointment of an independent registered
public accounting firm and the completion of review procedures by
such firm. The final financial results reported for these periods
may differ from the results reported in this release as a result of
review procedures to be performed by an independent registered
public accounting firm.
|
|
RCI HOSPITALITY
HOLDINGS, INC.
|
|
UNAUDITED SEGMENT
INFORMATION
|
|
(in
thousands)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For the Three
Months
|
|
For the Six
Months
|
|
|
|
Ended March
31,
|
|
Ended March
31,
|
|
|
|
2019(a)
|
|
2018
|
|
2019(a)
|
|
2018
|
|
Revenues
|
|
|
|
|
|
|
|
|
|
Nightclubs
|
|
$
37,047
|
|
$
35,443
|
|
$
74,775
|
|
$
70,661
|
|
Bombshells
|
|
7,527
|
|
5,602
|
|
13,540
|
|
11,430
|
|
Other
|
|
252
|
|
181
|
|
534
|
|
347
|
|
|
|
$
44,826
|
|
$
41,226
|
|
$
88,849
|
|
$
82,438
|
|
|
|
|
|
|
|
|
|
|
|
Income (loss) from
operations
|
|
|
|
|
|
|
|
|
|
Nightclubs
|
|
$
15,078
|
|
$
11,880
|
|
$
30,465
|
|
$
25,251
|
|
Bombshells
|
|
738
|
|
965
|
|
857
|
|
1,856
|
|
Other
|
|
(176)
|
|
(82)
|
|
(295)
|
|
(219)
|
|
General
corporate
|
|
(4,474)
|
|
(4,532)
|
|
(8,729)
|
|
(9,517)
|
|
|
|
$
11,166
|
|
$
8,231
|
|
$
22,298
|
|
$
17,371
|
|
|
|
(a)
|
The unaudited
schedule of Segment Information for the three and six months ended
March 31, 2019 are preliminary and therefore subject to adjustments
in connection with subsequent events arising through the date of
the company's filing of its Quarterly Report on Form 10-Q. The
filing of the Form 10-Q will be completed as soon as practicable
after the appointment of an independent registered public
accounting firm and the completion of review procedures by such
firm. The final financial results reported for these periods may
differ from the results reported in this release as a result of
review procedures to be performed by an independent registered
public accounting firm.
|
|
RCI HOSPITALITY
HOLDINGS, INC.
|
|
NON-GAAP SEGMENT
INFORMATION
|
|
($ in
thousands)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For the Three
Months Ended March 31, 2019(a)
|
|
For the Three
Months Ended March 31, 2018
|
|
|
Nightclubs
|
|
Bombshells
|
|
Other
|
|
Corporate
|
|
Total
|
|
Nightclubs
|
|
Bombshells
|
|
Other
|
|
Corporate
|
|
Total
|
|
Income (loss) from
operations
|
|
$
15,078
|
|
$
738
|
|
$ (176)
|
|
$ (4,474)
|
|
$
11,166
|
|
$
11,880
|
|
$
965
|
|
$
(82)
|
|
$ (4,532)
|
|
$
8,231
|
|
Amortization of
intangibles
|
|
-
|
|
-
|
|
-
|
|
153
|
|
153
|
|
-
|
|
-
|
|
-
|
|
48
|
|
48
|
|
Settlement of
lawsuits
|
|
84
|
|
-
|
|
-
|
|
-
|
|
84
|
|
573
|
|
200
|
|
-
|
|
-
|
|
773
|
|
Impairment of
assets
|
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
|
1,550
|
|
1,550
|
|
Loss (gain) on sale
of assets
|
|
(1,000)
|
|
1
|
|
5
|
|
(71)
|
|
(1,065)
|
|
-
|
|
-
|
|
-
|
|
(18)
|
|
(18)
|
|
Gain on
insurance
|
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
|
Non-GAAP operating
income (loss)
|
|
$
14,162
|
|
$
739
|
|
$ (171)
|
|
$ (4,392)
|
|
$
10,338
|
|
$
12,453
|
|
$
1,165
|
|
$
(82)
|
|
$ (2,952)
|
|
$
10,584
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP operating
margin
|
|
40.7%
|
|
9.8%
|
|
-69.8%
|
|
-10.0%
|
|
24.9%
|
|
33.5%
|
|
17.2%
|
|
-45.3%
|
|
-11.0%
|
|
20.0%
|
|
Non-GAAP operating
margin
|
|
38.2%
|
|
9.8%
|
|
-67.9%
|
|
-9.8%
|
|
23.1%
|
|
35.1%
|
|
20.8%
|
|
-45.3%
|
|
-7.2%
|
|
25.7%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For the Six Months
Ended March 31, 2019(a)
|
|
For the Six Months
Ended March 31, 2018
|
|
|
Nightclubs
|
|
Bombshells
|
|
Other
|
|
Corporate
|
|
Total
|
|
Nightclubs
|
|
Bombshells
|
|
Other
|
|
Corporate
|
|
Total
|
|
Income (loss) from
operations
|
|
$
30,465
|
|
$
857
|
|
$ (295)
|
|
$ (8,729)
|
|
$
22,298
|
|
$
25,251
|
|
$
1,856
|
|
$ (219)
|
|
$ (9,517)
|
|
$
17,371
|
|
Amortization of
intangibles
|
|
-
|
|
-
|
|
-
|
|
309
|
|
309
|
|
-
|
|
-
|
|
-
|
|
96
|
|
96
|
|
Settlement of
lawsuits
|
|
129
|
|
3
|
|
-
|
|
12
|
|
144
|
|
600
|
|
200
|
|
-
|
|
-
|
|
800
|
|
Impairment of
assets
|
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
|
1,550
|
|
1,550
|
|
Loss (gain) on sale
of assets
|
|
(2,152)
|
|
1
|
|
-
|
|
(71)
|
|
(2,222)
|
|
-
|
|
-
|
|
-
|
|
64
|
|
64
|
|
Gain on
insurance
|
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
|
(20)
|
|
(20)
|
|
Non-GAAP operating
income (loss)
|
|
$
28,442
|
|
$
861
|
|
$ (295)
|
|
$ (8,479)
|
|
$
20,529
|
|
$
25,851
|
|
$
2,056
|
|
$ (219)
|
|
$ (7,827)
|
|
$
19,861
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP operating
margin
|
|
40.7%
|
|
6.3%
|
|
-55.2%
|
|
-9.8%
|
|
25.1%
|
|
35.7%
|
|
16.2%
|
|
-63.1%
|
|
-11.5%
|
|
21.1%
|
|
Non-GAAP operating
margin
|
|
38.0%
|
|
6.4%
|
|
-55.2%
|
|
-9.5%
|
|
23.1%
|
|
36.6%
|
|
18.0%
|
|
-63.1%
|
|
-9.5%
|
|
24.1%
|
|
|
|
(a)
|
The condensed
schedule of Non-GAAP Financial Segment Information for the three
and six months ended March 31, 2019 are preliminary and therefore
subject to adjustments in connection with subsequent events arising
through the date of the company's filing of its Quarterly Report on
Form 10-Q. The filing of the Form 10-Q will be completed as soon as
practicable after the appointment of an independent registered
public accounting firm and the completion of review procedures by
such firm. The final financial results reported for these periods
may differ from the results reported in this release as a result of
review procedures to be performed by an independent registered
public accounting firm.
|
|
RCI HOSPITALITY
HOLDINGS, INC.
|
|
UNAUDITED
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
|
|
(in
thousands)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For the Three
Months Ended
|
|
For the Six Months
Ended
|
|
|
|
|
March 31,
2019(a)
|
|
March 31,
2018
|
|
March 31,
2019(a)
|
|
March 31,
2018
|
|
CASH FLOWS FROM
OPERATING ACTIVITIES
|
|
|
|
|
|
|
|
|
|
Net income
|
|
$
6,743
|
|
$
4,694
|
|
$
13,147
|
|
$
19,049
|
|
Adjustments to
reconcile net income to net cash provided by operating
activities:
|
|
|
|
|
|
|
|
|
|
Depreciation and
amortization
|
|
2,200
|
|
1,899
|
|
4,253
|
|
3,808
|
|
Deferred tax expense
(credit)
|
|
673
|
|
38
|
|
1,131
|
|
(9,659)
|
|
Loss (gain) on sale
of assets
|
|
(1,021)
|
|
-
|
|
(2,197)
|
|
140
|
|
Unrealized loss on
equity securities
|
|
(77)
|
|
-
|
|
370
|
|
-
|
|
Amortization of debt
discount and issuance costs
|
|
107
|
|
60
|
|
202
|
|
384
|
|
Deferred
rent
|
|
47
|
|
74
|
|
189
|
|
149
|
|
Impairment of
assets
|
|
-
|
|
1,550
|
|
-
|
|
1,550
|
|
Gain on insurance
settlements
|
|
-
|
|
-
|
|
-
|
|
(20)
|
|
Debt prepayment
penalty
|
|
-
|
|
-
|
|
-
|
|
543
|
|
Changes in operating
assets and liabilities:
|
|
|
|
|
|
|
|
|
|
|
Accounts
receivable
|
|
4
|
|
(1,107)
|
|
1,727
|
|
(2,033)
|
|
|
Inventories
|
|
(19)
|
|
(13)
|
|
(182)
|
|
(283)
|
|
|
Prepaid expenses and
other assets
|
|
1,611
|
|
(340)
|
|
3,550
|
|
704
|
|
|
Accounts payable and
accrued liabilities
|
|
(749)
|
|
(923)
|
|
(1,219)
|
|
(255)
|
|
Net cash provided by
operating activities
|
|
9,519
|
|
5,932
|
|
20,971
|
|
14,077
|
|
CASH FLOWS FROM
INVESTING ACTIVITIES
|
|
|
|
|
|
|
|
|
|
Proceeds from sale of
assets
|
|
1,621
|
|
-
|
|
2,866
|
|
632
|
|
Proceeds from
insurance
|
|
-
|
|
-
|
|
-
|
|
20
|
|
Proceeds from notes
receivable
|
|
36
|
|
40
|
|
68
|
|
68
|
|
Issuance of note
receivable
|
|
(420)
|
|
-
|
|
(420)
|
|
-
|
|
Additions to property
and equipment
|
|
(6,607)
|
|
(6,242)
|
|
(13,902)
|
|
(9,011)
|
|
Acquisition of
businesses, net of cash acquired
|
|
-
|
|
-
|
|
(13,500)
|
|
-
|
|
Net cash used in
investing activities
|
|
(5,370)
|
|
(6,202)
|
|
(24,888)
|
|
(8,291)
|
|
CASH FLOWS FROM
FINANCING ACTIVITIES
|
|
|
|
|
|
|
|
|
|
Proceeds from
long-term debt
|
|
4,644
|
|
3,533
|
|
10,296
|
|
62,453
|
|
Payments on long-term
debt
|
|
(8,008)
|
|
(2,262)
|
|
(13,287)
|
|
(63,518)
|
|
Debt prepayment
penalty
|
|
-
|
|
-
|
|
-
|
|
(543)
|
|
Purchase of treasury
stock
|
|
(1,606)
|
|
-
|
|
(1,961)
|
|
-
|
|
Payment of
dividends
|
|
(291)
|
|
(291)
|
|
(582)
|
|
(583)
|
|
Payment of loan
origination costs
|
|
(20)
|
|
(110)
|
|
(20)
|
|
(909)
|
|
Distribution to
noncontrolling interests
|
|
-
|
|
(54)
|
|
-
|
|
(108)
|
|
Net cash provided by
(used in) financing activities
|
|
(5,281)
|
|
816
|
|
(5,554)
|
|
(3,208)
|
|
NET INCREASE
(DECREASE) IN CASH AND CASH
|
|
|
|
|
|
|
|
|
|
EQUIVALENTS
|
|
(1,132)
|
|
546
|
|
(9,471)
|
|
2,578
|
|
CASH AND CASH
EQUIVALENTS AT BEGINNING OF PERIOD
|
|
9,387
|
|
11,954
|
|
17,726
|
|
9,922
|
|
CASH AND CASH
EQUIVALENTS AT END OF PERIOD
|
|
$
8,255
|
|
$
12,500
|
|
$
8,255
|
|
$
12,500
|
|
|
|
(a)
|
The unaudited
condensed consolidated Statements of Cash Flows for the three and
six months ended March 31, 2019 are preliminary and therefore
subject to adjustments in connection with subsequent events arising
through the date of the company's filing of its Quarterly Reports
on Form 10-Q. The filing of the Form 10-Q will be completed as soon
as practicable after the appointment of an independent registered
public accounting firm and the completion of review procedures by
such firm. The final financial results reported for these periods
may differ from the results reported in this release as a result of
review procedures to be performed by an independent registered
public accounting firm.
|
|
RCI HOSPITALITY
HOLDINGS, INC.
|
|
UNAUDITED
CONDENSED CONSOLIDATED BALANCE SHEETS
|
|
(in thousands, except
per share data)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
March
31,
|
|
September
30,
|
|
|
|
|
|
2019(a)
|
|
2018
|
|
ASSETS
|
|
|
|
|
|
Current
assets
|
|
|
|
|
|
Cash and cash
equivalents
|
|
$
8,255
|
|
$
17,726
|
|
Accounts receivable,
net
|
|
5,579
|
|
7,320
|
|
Inventories
|
|
2,597
|
|
2,353
|
|
Prepaid
insurance
|
|
2,097
|
|
4,910
|
|
Other current
assets
|
|
1,521
|
|
1,591
|
|
Assets held for
sale
|
|
668
|
|
2,902
|
|
|
Total current
assets
|
|
20,717
|
|
36,802
|
|
Property and
equipment, net
|
|
191,966
|
|
172,403
|
|
Notes
receivable
|
|
5,001
|
|
2,874
|
|
Goodwill
|
|
55,271
|
|
43,591
|
|
Intangibles,
net
|
|
76,441
|
|
71,532
|
|
Other
assets
|
|
1,477
|
|
2,530
|
|
|
|
Total
assets
|
|
$
350,873
|
|
$
329,732
|
|
|
|
|
|
|
|
|
|
LIABILITIES AND
STOCKHOLDERS' EQUITY
|
|
|
|
|
|
Current
liabilities
|
|
|
|
|
|
Accounts
payable
|
|
$
3,632
|
|
$
2,825
|
|
Accrued
liabilities
|
|
9,911
|
|
11,973
|
|
Current portion of
long-term debt
|
|
10,447
|
|
19,047
|
|
|
Total current
liabilities
|
|
23,990
|
|
33,845
|
|
Deferred tax
liability, net
|
|
21,970
|
|
19,552
|
|
Long-term debt, net
of current portion
|
|
139,371
|
|
121,580
|
|
Other long-term
liabilities
|
|
1,606
|
|
1,423
|
|
|
Total
liabilities
|
|
186,937
|
|
176,400
|
|
|
|
|
|
|
|
|
|
Commitments and
contingencies
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Stockholders'
equity
|
|
|
|
|
|
Preferred
stock
|
|
-
|
|
-
|
|
Common
stock
|
|
96
|
|
97
|
|
Additional paid-in
capital
|
|
62,252
|
|
64,212
|
|
Retained
earnings
|
|
101,623
|
|
88,906
|
|
Accumulated other
comprehensive income
|
|
-
|
|
220
|
|
|
Total RCIHH
stockholders' equity
|
|
163,971
|
|
153,435
|
|
Noncontrolling
interests
|
|
(35)
|
|
(103)
|
|
|
Total stockholders'
equity
|
|
163,936
|
|
153,332
|
|
|
|
Total liabilities and
stockholders' equity
|
|
$
350,873
|
|
$
329,732
|
|
|
|
(a)
|
The unaudited
condensed consolidated Balance Sheet at March 31, 2019 is
preliminary and therefore subject to adjustments in connection with
subsequent events arising through the date of the company's filing
of its Quarterly Reports on Form 10-Q. The filing of the Form 10-Q
will be completed as soon as practicable after the appointment of
an independent registered public accounting firm and the completion
of review procedures by such firm. The final financial results
reported for this period may differ from the results reported in
this release as a result of review procedures to be performed by an
independent registered public accounting firm.
|
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SOURCE RCI Hospitality Holdings, Inc.