HOUSTON, Sept. 24, 2019 /PRNewswire/ -- RCI Hospitality
Holdings, Inc. (Nasdaq: RICK) announced it has filed its 2Q19 and
3Q19 10-Qs today and will hold a related conference call at
4:30 PM ET.
There were no changes to the preliminary income and cash flow
statements the company released July 24,
2019 and August 8, 2019 for
2Q19 and 3Q19, respectively. Notes receivable of $1.142 million on the preliminary March 31, 2019 and $1.152
million on the preliminary June 30,
2019 balance sheets were moved to current assets, increasing
total current assets and reducing long-term notes receivable by
corresponding amounts. Total assets, liabilities and shareholders'
equity remained the same.
All comparisons in this news release are to year ago periods
unless otherwise noted.
Nightclubs and Bombshells 4Q19 Revenue Trends (for
July-August 2019)
- Nightclubs: Total revenues increased more than 6% with
an improvement in same-store sales
- Bombshells: Total revenues increased more than 50% with
a more than 20% increase in same store sales
Today's Conference Call
- When: Tuesday, September 24, at
4:30 PM ET
- Live Participant Dial In: Toll Free at 844-602-0380 and
International at 862-298-0970
- Access the live webcast, slides or replay at:
https://www.investornetwork.com/event/presentation/53715
- Phone replay: Toll Free at 877-481-4010 and International at
919-882-2331 (Passcode: 53715)
CEO Comment
"We're pleased to file our second and third quarter 10-Qs,
posting the same strong top and bottom line results we had reported
when we released preliminary financials," said Eric Langan, President and CEO. "Strong revenue
trends have continued two-thirds of the way through 4Q19. In
addition, we are currently marketing $14
million of properties, most of which are non-income
producing, of which $6 million is
under contract or letter of intent."
Sidoti Conference Appearance Wednesday 9AM-5PM
Mr. Langan will present at the Sidoti & Company Fall 2019
Investor Conference on Wednesday, September
25, 2019.
- RCI's presentation is 3:20 PM ET
(2:20 PM CT) at the Grand Hyatt Hotel
in New York City. To access the
live webcast, visit http://wsw.com/webcast/sidotico4/rick/. To
access the presentation and replay, visit
http://www.rcihospitality.com/investor/default.aspx.
- Management will be available for 1x1 meetings. To register and
schedule a time, contact Emily
Barker, Marketing & Events Manager, ebarker@sidoti.com,
212-453-7048, or visit
https://sidoti.meetmax.com/sched/event_57223/conference_register.html.
Meet Management at Rick's New
York Wednesday 6PM-8PM
RCI investors can meet management at Rick's Cabaret New York,
Manhattan's No. 1 gentlemen's
club, and tour its sister club, Hoops Cabaret and Sports Bar, next
door.
- When: Wednesday, September 25,
2019, 6:00-8:00 PM ET
- Where: Rick's Cabaret New York, at 50 W. 33rd Street,
New York, NY, between Fifth Avenue
and Broadway
- RSVP: By 12:00 PM ET,
September 25, 2019, with your contact
information, to gary.fishman@anreder.com
Quarterly Financial Highlights
3Q19
|
2Q19
|
•
|
Total revenues of
$47.0 million compared to
$42.6 million on 46 and 44 units, respectively
|
•
|
Total revenues of
$44.8 million compared to
$41.2 million on 47 and 43 units, respectively
|
•
|
Diluted EPS of $0.59
compared to $0.55
|
•
|
Diluted EPS of $0.70
compared to $0.48
|
•
|
Diluted non-GAAP* EPS
of $0.59 compared to
$0.58
|
•
|
Diluted Non-GAAP* EPS
of $0.63 compared to
$0.65
|
•
|
3Q19 GAAP
included net pre-tax gains of
$172K vs. net pre-tax charges of $440K in
3Q18
|
•
|
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
|
•
|
Repurchased
17,302 shares in April 2019 for
$0.4 million ($23.26 average per share)
|
•
|
Repurchased 70,700
shares for $1.6 million
($22.71 average per share)
|
•
|
Free cash flow for
the first nine months of
FY19 ended June 30, 2019 totaled $26.3
million based on net cash provided by
operating activities of $28.4 million, less
maintenance capital expenditures of $2.1 million
|
•
|
Free cash flow for
the first six months of FY19
ended March 31, 2019 totaled $19.9 million
based on net cash provided by operating
activities of $21.0 million, less maintenance
capital expenditures of $1.1 million
|
3Q19 Review
- Total Revenues: Total revenues of $47.0 million grew $4.4
million with increases of $1.9
million (+10.8%) in alcoholic beverages, $983K (+6.0%) in service, $871K (+14.1%) in food, and $627K (+25.2%) in other. Revenues increased
primarily due to the addition of Rick's Cabarets in Chicago and Pittsburgh in our Nightclubs segment and two
new Bombshells in Houston (I-10
and 249).
- Operating Income: Operating income of $10.0 million (21.2% of revenues) increased
$482K from $9.5 million (22.3%). Non-GAAP operating income
of $10.0 million was level in dollars
compared to 3Q18, with margin of 21.2% compared to 23.4%. This
primarily reflected greater contribution from Nightclubs offset by
reduced contribution from Bombshells and higher corporate overhead
due to legal fees associated with the previously-announced internal
review.
- Nightclubs Segment: Revenues of $37.9 million increased $2.6 million or 7.5%, with 38 units in both
periods. Operating income increased 11.5% to $14.0 million (37.0% of revenues) from
$12.6 million (35.7%). On a non-GAAP
basis, segment income increased 11.2% to $13.9 million from $12.5
million with margin expanding to 36.6% from 35.4%.
- Bombshells Segment: Revenues of $8.8 million increased $1.6 million or 23.0%, with 8 units compared to
6. Operating income was $686K (7.8%
of revenues) compared to $1.4 million
(19.5%). This reflected reduced operating leverage due to the
previously reported decline in same-store sales as well as expenses
without the benefit of corresponding revenues from two locations
expected to open in early FY20. While down from 3Q18, same-store
sales continued their sequential quarterly improvement in
FY19.
- Interest & Taxes: Interest expense of $2.5 million (5.4% of revenues) increased
$235K from $2.3 million (5.4%) due to debt related to the
Pittsburgh and Chicago club acquisitions, new debt related to
Bombshells development, and a lower weighted average interest rate.
Income tax expense was level with 3Q18 as the effective tax rate
fell to 24.1% from 25.3% with the full effect in FY19 of the
federal Tax Cuts and Jobs Act.
- Asset Management: There were two real estate sales: (i)
a portion of excess land around newly opened Bombshells I-10 in
Houston sold for $1.1 million cash and a $331K pre-tax gain after closing costs with
proceeds used in part to pay down $942K in debt on the entire Bombshells I-10
property; and (ii) a small property in Lubbock, TX sold for $350K cash and a $376K loss after closing costs with proceeds used
in part to pay down $331K remaining
debt on the property. During and subsequent to 3Q19, both excess
aircraft were sold for a total of $1.1
million in cash and a small gain after closing costs with
proceeds used to pay down $883K in
remaining debt on the assets. Also during 3Q19, both the former
Club Onyx and Foxy's Cabaret locations in Dallas were leased out.
- Balance Sheet Highlights (June 30,
2019 compared to March 31,
2019): Cash and cash equivalents of $11.0 million increased $2.7 million. Total stockholder's equity of
$168.9 million increased $5.0 million due to retained earnings. Total debt
of $146.6 million declined
$3.2 million.
2Q19 Review
- 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 Rick's Cabarets in Chicago and Pittsburgh, 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 caused by the unusually
cold weather in late January to 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%). Operating income included
$1.0 million of net gains in 2Q19
compared to net charges of $2.3
million in 2Q18. Non-GAAP operating income was $10.3 million (23.1%) compared to $10.6 million (25.7%). This primarily reflected
greater contribution from Nightclubs, the cost of new Bombshells
and those in development, and higher corporate expenses
year-over-year as a result of the timing of certain items in
2Q18.
- 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 with segment margin
expanding 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. 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
at the end of 2Q19, and locations in development. While down from
2Q18, same-store sales continued their 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 debt related to the
Pittsburgh and Chicago club acquisitions and new Bombshells
development. 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 with
proceeds 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.
- Balance Sheet Highlights (March 31,
2019 compared to December 31,
2019): Cash and cash equivalents of $8.3 million declined $1.1
million. Total stockholder's equity of $163.9 million increased $4.8 million due to retained earnings. Total debt
of $149.8 million declined
$3.3 million.
*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: (a) amortization of intangibles, (b)
impairment of assets, (c) gains or losses on sale of businesses and
assets, (d) gains or losses on insurance, and (e) 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 stockholders and diluted
earnings per share. Adjustment items are: (a) amortization of
intangibles, (b) impairment of assets, (c) costs and charges
related to debt refinancing, (d) gains or losses on sale of
businesses and assets, (e) gains or losses on insurance, (f)
unrealized gains or losses on equity securities, (g) settlement of
lawsuits, and (h) the income tax effect of the above described
adjustments. Included in the income tax effect of the above
adjustments is the net effect of the non-GAAP provision for income
taxes, calculated at 22.8% and 26.5% effective tax rate of the
pre-tax non-GAAP income before taxes for the nine months ended
June 30, 2019 and 2018, respectively,
and the GAAP income tax expense (benefit). Included in the income
tax effect of the above adjustments is the net effect of the
non-GAAP provision for 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, and the GAAP income tax expense (benefit).
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 stockholders: (a) depreciation expense, (b) amortization of
intangibles, (c) income tax expense (benefit), (d) net interest
expense, (e) gains or losses on sale of businesses and assets, (f)
gains or losses on insurance, (g) unrealized gains or losses on
equity securities, and (h) 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, 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 regain and
maintain compliance with the filing requirements of the SEC and the
Nasdaq Stock Market, and (vii) 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 June 30,
|
|
For the Nine
Months Ended June 30,
|
|
|
|
|
|
2019
|
|
2018
|
|
2019
|
|
2018
|
|
|
|
|
|
Amount
|
|
% of
Revenue
|
|
Amount
|
|
% of
Revenue
|
|
Amount
|
|
% of
Revenue
|
|
Amount
|
|
% of
Revenue
|
Revenues
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Sales of alcoholic
beverages
|
|
$
19,570
|
|
41.6%
|
|
$
17,658
|
|
41.4%
|
|
$
56,366
|
|
41.5%
|
|
$
52,835
|
|
42.2%
|
|
Sales of food and
merchandise
|
|
7,046
|
|
15.0%
|
|
6,175
|
|
14.5%
|
|
19,175
|
|
14.1%
|
|
16,906
|
|
13.5%
|
|
Service
revenues
|
|
17,299
|
|
36.8%
|
|
16,316
|
|
38.3%
|
|
51,609
|
|
38.0%
|
|
48,338
|
|
38.6%
|
|
Other
|
|
3,112
|
|
6.6%
|
|
2,485
|
|
5.8%
|
|
8,726
|
|
6.4%
|
|
6,993
|
|
5.6%
|
|
|
Total
revenues
|
|
47,027
|
|
100.0%
|
|
42,634
|
|
100.0%
|
|
135,876
|
|
100.0%
|
|
125,072
|
|
100.0%
|
Operating
expenses
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost of goods
sold
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Alcoholic beverages
sold
|
|
4,015
|
|
20.5%
|
|
3,632
|
|
20.6%
|
|
11,541
|
|
20.5%
|
|
10,976
|
|
20.8%
|
|
|
Food and merchandise
sold
|
|
2,565
|
|
36.4%
|
|
2,140
|
|
34.7%
|
|
6,857
|
|
35.8%
|
|
6,198
|
|
36.7%
|
|
|
Service and
other
|
|
121
|
|
0.6%
|
|
94
|
|
0.5%
|
|
307
|
|
0.5%
|
|
173
|
|
0.3%
|
|
|
|
Total cost of goods
sold (exclusive of items shown below)
|
|
6,701
|
|
14.2%
|
|
5,866
|
|
13.8%
|
|
18,705
|
|
13.8%
|
|
17,347
|
|
13.9%
|
|
Salaries and
wages
|
|
13,164
|
|
28.0%
|
|
11,362
|
|
26.7%
|
|
37,168
|
|
27.4%
|
|
33,086
|
|
26.5%
|
|
Selling, general and
administrative
|
|
14,895
|
|
31.7%
|
|
13,476
|
|
31.6%
|
|
43,263
|
|
31.8%
|
|
39,136
|
|
31.3%
|
|
Depreciation and
amortization
|
|
2,465
|
|
5.2%
|
|
1,998
|
|
4.7%
|
|
6,718
|
|
4.9%
|
|
5,806
|
|
4.6%
|
|
Other charges
(gains), net
|
|
(172)
|
|
-0.4%
|
|
440
|
|
1.0%
|
|
(2,250)
|
|
-1.7%
|
|
2,834
|
|
2.3%
|
|
|
Total operating
expenses
|
|
37,053
|
|
78.8%
|
|
33,142
|
|
77.7%
|
|
103,604
|
|
76.2%
|
|
98,209
|
|
78.5%
|
Income from
operations
|
|
9,974
|
|
21.2%
|
|
9,492
|
|
22.3%
|
|
32,272
|
|
23.8%
|
|
26,863
|
|
21.5%
|
Other income
(expenses)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest
expense
|
|
(2,543)
|
|
-5.4%
|
|
(2,308)
|
|
-5.4%
|
|
(7,709)
|
|
-5.7%
|
|
(7,493)
|
|
-6.0%
|
|
Interest
income
|
|
92
|
|
0.2%
|
|
52
|
|
0.1%
|
|
218
|
|
0.2%
|
|
187
|
|
0.1%
|
|
Non-operating gain
(loss)
|
|
(38)
|
|
-0.1%
|
|
-
|
|
0.0%
|
|
(408)
|
|
-0.3%
|
|
-
|
|
0.0%
|
Income before income
taxes
|
|
7,485
|
|
15.9%
|
|
7,236
|
|
17.0%
|
|
24,373
|
|
17.9%
|
|
19,557
|
|
15.6%
|
Income tax expense
(benefit)
|
|
1,806
|
|
3.8%
|
|
1,829
|
|
4.3%
|
|
5,547
|
|
4.1%
|
|
(4,899)
|
|
-3.9%
|
Net income
|
|
5,679
|
|
12.1%
|
|
5,407
|
|
12.7%
|
|
18,826
|
|
13.9%
|
|
24,456
|
|
19.6%
|
Net income
attributable to noncontrolling interests
|
|
(41)
|
|
-0.1%
|
|
(18)
|
|
0.0%
|
|
(109)
|
|
-0.1%
|
|
(71)
|
|
-0.1%
|
Net income
attributable to RCIHH common shareholders
|
|
$
5,638
|
|
12.0%
|
|
$
5,389
|
|
12.6%
|
|
$
18,717
|
|
13.8%
|
|
$
24,385
|
|
19.5%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings per
share
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic and
diluted
|
|
$
0.59
|
|
|
|
$
0.55
|
|
|
|
$
1.94
|
|
|
|
$
2.51
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average
shares outstanding
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic and
diluted
|
|
9,620
|
|
|
|
9,719
|
|
|
|
9,671
|
|
|
|
9,719
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Dividends per
share
|
|
$
0.03
|
|
|
|
$
0.03
|
|
|
|
$
0.09
|
|
|
|
$
0.09
|
|
|
RCI HOSPITALITY
HOLDINGS, INC.
|
NON-GAAP FINANCIAL
MEASURES
|
(in thousands, except
per share and percentage data)
|
|
|
|
|
|
|
|
|
|
|
|
For the Three
Months
|
|
For the Nine
Months
|
|
|
Ended June
30,
|
|
Ended June
30,
|
|
|
2019
|
|
2018
|
|
2019
|
|
2018
|
Reconciliation of
GAAP net income to Adjusted EBITDA
|
|
|
|
|
|
|
|
|
Net income
attributable to RCIHH common shareholders
|
|
$
5,638
|
|
$
5,389
|
|
$
18,717
|
|
$
24,385
|
Income tax expense
(benefit)
|
|
1,806
|
|
1,829
|
|
5,547
|
|
(4,899)
|
Interest expense,
net
|
|
2,451
|
|
2,256
|
|
7,491
|
|
7,306
|
Settlement of
lawsuits
|
|
-
|
|
474
|
|
144
|
|
1,274
|
Impairment of
assets
|
|
-
|
|
-
|
|
-
|
|
1,550
|
Loss (gain) on sale
of businesses and assets
|
|
(265)
|
|
(34)
|
|
(2,487)
|
|
30
|
Unrealized loss
(gain) on equity securities
|
|
38
|
|
-
|
|
408
|
|
-
|
Loss (gain) on
insurance
|
|
93
|
|
-
|
|
93
|
|
(20)
|
Depreciation and
amortization
|
|
2,465
|
|
1,998
|
|
6,718
|
|
5,806
|
Adjusted
EBITDA
|
|
$
12,226
|
|
$
11,912
|
|
$
36,631
|
|
$
35,432
|
|
|
|
|
|
|
|
|
|
Reconciliation of
GAAP net income to non-GAAP net income
|
|
|
|
|
|
|
|
|
Net income
attributable to RCIHH common shareholders
|
|
$
5,638
|
|
$
5,389
|
|
$
18,717
|
|
$
24,385
|
Amortization of
intangibles
|
|
165
|
|
65
|
|
474
|
|
161
|
Settlement of
lawsuits
|
|
-
|
|
474
|
|
144
|
|
1,274
|
Impairment of
assets
|
|
-
|
|
-
|
|
-
|
|
1,550
|
Loss (gain) on sale
of businesses and assets
|
|
(265)
|
|
(34)
|
|
(2,487)
|
|
30
|
Unrealized loss
(gain) on equity securities
|
|
38
|
|
-
|
|
408
|
|
-
|
Loss (gain) on
insurance
|
|
93
|
|
-
|
|
93
|
|
(20)
|
Costs and charges
related to debt refinancing
|
|
-
|
|
-
|
|
-
|
|
827
|
Income tax effect of
adjustments above
|
|
(6)
|
|
(218)
|
|
327
|
|
(11,076)
|
Non-GAAP net
income
|
|
$
5,663
|
|
$
5,676
|
|
$
17,676
|
|
$
17,131
|
|
|
|
|
|
|
|
|
|
Reconciliation of
GAAP diluted earnings per share to non-GAAP diluted earnings per
share
|
|
|
|
|
|
|
Diluted
shares
|
|
9,620
|
|
9,719
|
|
9,671
|
|
9,719
|
GAAP diluted earnings
per share
|
|
$
0.59
|
|
$
0.55
|
|
$
1.94
|
|
$
2.51
|
Amortization of
intangibles
|
|
0.02
|
|
0.01
|
|
0.05
|
|
0.02
|
Settlement of
lawsuits
|
|
-
|
|
0.05
|
|
0.01
|
|
0.13
|
Impairment of
assets
|
|
-
|
|
-
|
|
-
|
|
0.16
|
Loss (gain) on sale
of businesses and assets
|
|
(0.03)
|
|
(0.00)
|
|
(0.26)
|
|
0.00
|
Unrealized loss
(gain) on equity securities
|
|
0.00
|
|
-
|
|
0.04
|
|
-
|
Loss (gain) on
insurance
|
|
0.01
|
|
-
|
|
0.01
|
|
(0.00)
|
Costs and charges
related to debt refinancing
|
|
-
|
|
-
|
|
-
|
|
0.09
|
Income tax effect of
adjustments above
|
|
(0.00)
|
|
(0.02)
|
|
0.03
|
|
(1.14)
|
Non-GAAP diluted
earnings per share
|
|
$
0.59
|
|
$
0.58
|
|
$
1.83
|
|
$
1.76
|
|
|
|
|
|
|
|
|
|
Reconciliation of
GAAP operating income to non-GAAP operating income
|
|
|
|
|
|
|
|
|
Income from
operations
|
|
$
9,974
|
|
$
9,492
|
|
$
32,272
|
|
$
26,863
|
Amortization of
intangibles
|
|
165
|
|
65
|
|
474
|
|
161
|
Settlement of
lawsuits
|
|
-
|
|
474
|
|
144
|
|
1,274
|
Impairment of
assets
|
|
-
|
|
-
|
|
-
|
|
1,550
|
Loss (gain) on sale
of businesses and assets
|
|
(265)
|
|
(34)
|
|
(2,487)
|
|
30
|
Loss (gain) on
insurance
|
|
93
|
|
-
|
|
93
|
|
(20)
|
Non-GAAP operating
income
|
|
$
9,967
|
|
$
9,997
|
|
$
30,496
|
|
$
29,858
|
|
|
|
|
|
|
|
|
|
Reconciliation of
GAAP operating margin to non-GAAP operating margin
|
|
|
|
|
|
|
|
|
GAAP operating
margin
|
|
21.2%
|
|
22.3%
|
|
23.8%
|
|
21.5%
|
Amortization of
intangibles
|
|
0.4%
|
|
0.2%
|
|
0.3%
|
|
0.1%
|
Settlement of
lawsuits
|
|
0.0%
|
|
1.1%
|
|
0.1%
|
|
1.0%
|
Impairment of
assets
|
|
0.0%
|
|
0.0%
|
|
0.0%
|
|
1.2%
|
Loss (gain) on sale
of businesses and assets
|
|
-0.6%
|
|
-0.1%
|
|
-1.8%
|
|
0.0%
|
Loss (gain) on
insurance
|
|
0.2%
|
|
0.0%
|
|
0.1%
|
|
0.0%
|
Non-GAAP operating
margin
|
|
21.2%
|
|
23.4%
|
|
22.4%
|
|
23.9%
|
|
|
|
|
|
|
|
|
|
Reconciliation of
GAAP net cash provided by operating activities to non-GAAP free
cash flow
|
|
|
|
|
|
|
Net cash provided by
operating activities
|
|
$
7,443
|
|
$
8,334
|
|
$
28,414
|
|
$
22,411
|
Less: Maintenance
capital expenditures
|
|
955
|
|
585
|
|
2,072
|
|
1,847
|
Free cash
flow
|
|
$
6,488
|
|
$
7,749
|
|
$
26,342
|
|
$
20,564
|
RCI HOSPITALITY
HOLDINGS, INC.
|
SEGMENT
INFORMATION
|
(in
thousands)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For the Three
Months
|
|
For the Nine
Months
|
|
|
|
Ended June
30,
|
|
Ended June
30,
|
|
|
|
2019
|
|
2018
|
|
2019
|
|
2018
|
Revenues
|
|
|
|
|
|
|
|
|
|
Nightclubs
|
|
$
37,889
|
|
$
35,253
|
|
$
112,664
|
|
$
105,914
|
|
Bombshells
|
|
8,755
|
|
7,120
|
|
22,295
|
|
18,550
|
|
Other
|
|
383
|
|
261
|
|
917
|
|
608
|
|
|
|
$
47,027
|
|
$
42,634
|
|
$
135,876
|
|
$
125,072
|
|
|
|
|
|
|
|
|
|
|
Income (loss) from
operations
|
|
|
|
|
|
|
|
|
|
Nightclubs
|
|
$
14,034
|
|
$
12,584
|
|
$
44,499
|
|
$
37,835
|
|
Bombshells
|
|
686
|
|
1,391
|
|
1,543
|
|
3,247
|
|
Other
|
|
(111)
|
|
(328)
|
|
(406)
|
|
(547)
|
|
General
corporate
|
|
(4,635)
|
|
(4,155)
|
|
(13,364)
|
|
(13,672)
|
|
|
|
$
9,974
|
|
$
9,492
|
|
$
32,272
|
|
$
26,863
|
RCI HOSPITALITY
HOLDINGS, INC.
|
NON-GAAP SEGMENT
INFORMATION
|
($ in
thousands)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For the Three
Months Ended June 30, 2019
|
|
For the Three
Months Ended June 30, 2018
|
|
|
Nightclubs
|
|
Bombshells
|
|
Other
|
|
Corporate
|
|
Total
|
|
Nightclubs
|
|
Bombshells
|
|
Other
|
|
Corporate
|
|
Total
|
Income (loss) from
operations
|
|
$
14,034
|
|
$
686
|
|
$ (111)
|
|
$
(4,635)
|
|
$
9,974
|
|
$
12,584
|
|
$
1,391
|
|
$
(328)
|
|
$
(4,155)
|
|
$
9,492
|
Amortization of
intangibles
|
|
-
|
|
-
|
|
-
|
|
165
|
|
165
|
|
-
|
|
-
|
|
-
|
|
65
|
|
65
|
Settlement of
lawsuits
|
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
|
474
|
|
-
|
|
-
|
|
-
|
|
474
|
Impairment of
assets
|
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
Loss (gain) on sale
of businesses and assets
|
|
(260)
|
|
-
|
|
-
|
|
(5)
|
|
(265)
|
|
(588)
|
|
-
|
|
63
|
|
491
|
|
(34)
|
Loss (gain) on
insurance
|
|
93
|
|
-
|
|
-
|
|
-
|
|
93
|
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
Non-GAAP operating
income (loss)
|
|
$
13,867
|
|
$
686
|
|
$ (111)
|
|
$
(4,475)
|
|
$
9,967
|
|
$
12,470
|
|
$
1,391
|
|
$
(265)
|
|
$
(3,599)
|
|
$
9,997
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP operating
margin
|
|
37.0%
|
|
7.8%
|
|
-29.0%
|
|
-9.9%
|
|
21.2%
|
|
35.7%
|
|
19.5%
|
|
-125.7%
|
|
-9.7%
|
|
22.3%
|
Non-GAAP operating
margin
|
|
36.6%
|
|
7.8%
|
|
-29.0%
|
|
-9.5%
|
|
21.2%
|
|
35.4%
|
|
19.5%
|
|
-101.5%
|
|
-8.4%
|
|
23.4%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For the Nine
Months Ended June 30, 2019
|
|
For the Nine
Months Ended June 30, 2018
|
|
|
Nightclubs
|
|
Bombshells
|
|
Other
|
|
Corporate
|
|
Total
|
|
Nightclubs
|
|
Bombshells
|
|
Other
|
|
Corporate
|
|
Total
|
Income (loss) from
operations
|
|
$
44,499
|
|
$
1,543
|
|
$ (406)
|
|
$ (13,364)
|
|
$
32,272
|
|
$
37,835
|
|
$
3,247
|
|
$
(547)
|
|
$ (13,672)
|
|
$
26,863
|
Amortization of
intangibles
|
|
-
|
|
-
|
|
-
|
|
474
|
|
474
|
|
-
|
|
-
|
|
-
|
|
161
|
|
161
|
Settlement of
lawsuits
|
|
129
|
|
3
|
|
-
|
|
12
|
|
144
|
|
1,074
|
|
200
|
|
-
|
|
-
|
|
1,274
|
Impairment of
assets
|
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
|
1,550
|
|
1,550
|
Loss (gain) on sale
of businesses and assets
|
|
(2,412)
|
|
1
|
|
-
|
|
(76)
|
|
(2,487)
|
|
(588)
|
|
-
|
|
63
|
|
555
|
|
30
|
Loss (gain) on
insurance
|
|
93
|
|
-
|
|
-
|
|
-
|
|
93
|
|
-
|
|
-
|
|
-
|
|
(20)
|
|
(20)
|
Non-GAAP operating
income (loss)
|
|
$
42,309
|
|
$
1,547
|
|
$ (406)
|
|
$ (12,954)
|
|
$
30,496
|
|
$
38,321
|
|
$
3,447
|
|
$
(484)
|
|
$ (11,426)
|
|
$
29,858
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP operating
margin
|
|
39.5%
|
|
6.9%
|
|
-44.3%
|
|
-9.8%
|
|
23.8%
|
|
35.7%
|
|
17.5%
|
|
-90.0%
|
|
-10.9%
|
|
21.5%
|
Non-GAAP operating
margin
|
|
37.6%
|
|
6.9%
|
|
-44.3%
|
|
-9.5%
|
|
22.4%
|
|
36.2%
|
|
18.6%
|
|
-79.6%
|
|
-9.1%
|
|
23.9%
|
RCI HOSPITALITY
HOLDINGS, INC.
|
CONDENSED
CONSOLIDATED STATEMENTS OF CASH FLOWS
|
(in
thousands)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For the Three
Months Ended
|
|
For the Nine
Months Ended
|
|
|
|
|
June 30,
2019
|
|
June 30,
2018
|
|
June 30,
2019
|
|
June 30,
2018
|
CASH FLOWS FROM
OPERATING ACTIVITIES
|
|
|
|
|
|
|
|
|
Net income
|
|
$
5,679
|
|
$
5,407
|
|
$
18,826
|
|
$
24,456
|
Adjustments to
reconcile net income to net cash provided by operating
activities:
|
|
|
|
|
|
|
|
|
|
Depreciation and
amortization
|
|
2,465
|
|
1,998
|
|
6,718
|
|
5,806
|
|
Deferred tax expense
(benefit)
|
|
106
|
|
-
|
|
1,237
|
|
(9,659)
|
|
Loss (gain) on sale
of businesses and assets
|
|
(507)
|
|
(70)
|
|
(2,704)
|
|
70
|
|
Unrealized loss on
equity securities
|
|
38
|
|
-
|
|
408
|
|
-
|
|
Amortization of debt
discount and issuance costs
|
|
74
|
|
85
|
|
276
|
|
469
|
|
Deferred
rent
|
|
47
|
|
75
|
|
236
|
|
224
|
|
Impairment of
assets
|
|
-
|
|
-
|
|
-
|
|
1,550
|
|
Loss (gain) on
insurance settlements
|
|
93
|
|
-
|
|
93
|
|
(20)
|
|
Debt prepayment
penalty
|
|
-
|
|
-
|
|
-
|
|
543
|
|
Changes in operating
assets and liabilities:
|
|
|
|
|
|
|
|
|
|
|
Accounts
receivable
|
|
578
|
|
245
|
|
2,305
|
|
(1,788)
|
|
|
Inventories
|
|
95
|
|
26
|
|
(87)
|
|
(257)
|
|
|
Prepaid insurance,
other current assets and other assets
|
|
649
|
|
560
|
|
4,199
|
|
1,264
|
|
|
Accounts payable and
accrued liabilities
|
|
(1,874)
|
|
8
|
|
(3,093)
|
|
(247)
|
|
Net cash provided by
operating activities
|
|
7,443
|
|
8,334
|
|
28,414
|
|
22,411
|
CASH FLOWS FROM
INVESTING ACTIVITIES
|
|
|
|
|
|
|
|
|
Proceeds from sale of
businesses and assets
|
|
2,240
|
|
(3)
|
|
5,106
|
|
629
|
Proceeds from
insurance
|
|
-
|
|
-
|
|
-
|
|
20
|
Proceeds from notes
receivable
|
|
39
|
|
30
|
|
107
|
|
98
|
Issuance of note
receivable
|
|
-
|
|
-
|
|
(420)
|
|
-
|
Additions to property
and equipment
|
|
(2,999)
|
|
(9,816)
|
|
(16,901)
|
|
(18,827)
|
Acquisition of
businesses, net of cash acquired
|
|
-
|
|
(484)
|
|
(13,500)
|
|
(484)
|
|
Net cash used in
investing activities
|
|
(720)
|
|
(10,273)
|
|
(25,608)
|
|
(18,564)
|
CASH FLOWS FROM
FINANCING ACTIVITIES
|
|
|
|
|
|
|
|
|
Proceeds from
long-term debt
|
|
2,034
|
|
9,934
|
|
12,330
|
|
72,387
|
Payments on long-term
debt
|
|
(5,347)
|
|
(6,926)
|
|
(18,634)
|
|
(70,444)
|
Debt prepayment
penalty
|
|
-
|
|
-
|
|
-
|
|
(543)
|
Purchase of treasury
stock
|
|
(403)
|
|
-
|
|
(2,364)
|
|
-
|
Payment of
dividends
|
|
(285)
|
|
(293)
|
|
(867)
|
|
(876)
|
Payment of loan
origination costs
|
|
-
|
|
(51)
|
|
(20)
|
|
(960)
|
Distribution to
noncontrolling interests
|
|
(21)
|
|
(54)
|
|
(21)
|
|
(162)
|
|
Net cash provided by
(used in) financing activities
|
|
(4,022)
|
|
2,610
|
|
(9,576)
|
|
(598)
|
NET INCREASE
(DECREASE) IN CASH AND CASH
|
|
|
|
|
|
|
|
|
EQUIVALENTS
|
|
2,701
|
|
671
|
|
(6,770)
|
|
3,249
|
CASH AND CASH
EQUIVALENTS AT BEGINNING OF PERIOD
|
|
8,255
|
|
12,500
|
|
17,726
|
|
9,922
|
CASH AND CASH
EQUIVALENTS AT END OF PERIOD
|
|
$
10,956
|
|
$
13,171
|
|
$
10,956
|
|
$
13,171
|
RCI HOSPITALITY
HOLDINGS, INC.
|
CONDENSED
CONSOLIDATED BALANCE SHEETS
|
(in thousands, except
per share data)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
June
30,
|
|
September
30,
|
|
|
|
|
|
2019
|
|
2018
|
ASSETS
|
|
|
|
|
Current
assets
|
|
|
|
|
|
Cash and cash
equivalents
|
|
$
10,956
|
|
$
17,726
|
|
Accounts receivable,
net
|
|
5,001
|
|
7,320
|
|
Current portion of
notes receivable
|
|
1,152
|
|
-
|
|
Inventories
|
|
2,502
|
|
2,353
|
|
Prepaid
insurance
|
|
896
|
|
4,910
|
|
Other current
assets
|
|
2,090
|
|
1,591
|
|
Assets held for
sale
|
|
-
|
|
2,902
|
|
|
Total current
assets
|
|
22,597
|
|
36,802
|
Property and
equipment, net
|
|
191,493
|
|
172,403
|
Notes
receivable
|
|
3,810
|
|
2,874
|
Goodwill
|
|
55,271
|
|
43,591
|
Intangibles,
net
|
|
76,285
|
|
71,532
|
Other
assets
|
|
1,422
|
|
2,530
|
|
|
|
Total
assets
|
|
$
350,878
|
|
$
329,732
|
|
|
|
|
|
|
|
|
LIABILITIES AND
STOCKHOLDERS' EQUITY
|
|
|
|
|
Current
liabilities
|
|
|
|
|
|
Accounts
payable
|
|
$
2,544
|
|
$
2,825
|
|
Accrued
liabilities
|
|
9,117
|
|
11,973
|
|
Current portion of
long-term debt
|
|
16,374
|
|
19,047
|
|
|
Total current
liabilities
|
|
28,035
|
|
33,845
|
Deferred tax
liability, net
|
|
22,076
|
|
19,552
|
Long-term debt, net
of current portion
|
|
130,205
|
|
121,580
|
Other long-term
liabilities
|
|
1,656
|
|
1,423
|
|
|
Total
liabilities
|
|
181,972
|
|
176,400
|
|
|
|
|
|
|
|
|
Commitments and
contingencies
|
|
|
|
|
|
|
|
|
|
|
|
|
Stockholders'
equity
|
|
|
|
|
|
Preferred
stock
|
|
-
|
|
-
|
|
Common
stock
|
|
96
|
|
97
|
|
Additional paid-in
capital
|
|
61,849
|
|
64,212
|
|
Retained
earnings
|
|
106,976
|
|
88,906
|
|
Accumulated other
comprehensive income
|
|
-
|
|
220
|
|
|
Total RCIHH
stockholders' equity
|
|
168,921
|
|
153,435
|
|
Noncontrolling
interests
|
|
(15)
|
|
(103)
|
|
|
Total stockholders'
equity
|
|
168,906
|
|
153,332
|
|
|
|
Total liabilities and
stockholders' equity
|
|
$
350,878
|
|
$
329,732
|
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SOURCE RCI Hospitality Holdings, Inc.