HOUSTON, Feb. 13, 2020 /PRNewswire/ -- RCI
Hospitality Holdings, Inc. (Nasdaq: RICK) today filed its 10-K and
reported 4Q19 and FY19 results for the year ended September 30, 2019.
4Q19 vs.
4Q18
|
FY19 vs.
FY18
|
• Diluted EPS
of $0.05 compared to ($0.36)
• Non-GAAP* diluted EPS of
$0.48 compared to
$0.41
• GAAP results
included $4.9 million in other
charges compared to $6.4 million in 4Q18
• Free cash
flow (FCF) totaled $7.0 million (based
on net cash provided by operating activities of
$8.8 million, less maintenance capital
expenditures of $1.8 million) compared to $2.7
million
• Total
revenues of $45.2 million compared to
$40.7 million on 45 and 43 units, respectively
|
• Diluted EPS
of $1.99 compared to $2.15, which
included a large tax benefit
• Non-GAAP
diluted EPS of $2.31 compared to
$2.18
• GAAP results
included $2.6 million in other
charges compared to $9.2 million in FY18
• FCF totaled
$33.3 million (based on net cash
provided by operating activities of $37.2 million,
less maintenance capital expenditures of $3.9
million) compared to $23.2 million
• Total
revenues of $181.1 million compared to
$165.7 million
|
|
Conference Call
4:30 PM ET Today
|
Meet Management
6-8 PM ET Tonight
|
• A conference
call to discuss 4Q19 results, outlook
and related matters
• Live Participant Phone
Number: Toll Free 877-
407-9210, International 201-689-8049
• To access the
live webcast, slides or replay, visit:
https://www.webcaster4.com/Webcast/Page/2209/33080
• Toll Free
877-481-4010, International 919-882-
2331, Passcode: 58853
|
• 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
• Where: Rick's
Cabaret New York, at 50 W. 33rd
Street, New York, NY, between Fifth Avenue and
Broadway
• RSVP: With
your contact information, to
gary.fishman@anreder.com
|
CEO Comment
"With a solid performance in the fourth quarter, total revenues
for the year increased 9.2%, to a record $181.1 million, and free cash flow increased
43.3%, to a record $33.3 million,"
said Eric Langan, President &
CEO. "We had FY 2017 and FY 2018 reaudited in conjunction with the
FY 2019 audit, where our auditors issued an unqualified opinion on
those financial statements. Utilizing our strong cash generating
power, we also reduced shares outstanding another 1% in FY19. Now
that the year-end audit is complete, we are preparing our 1Q20 10-Q
for filing later this month.
"We're looking forward to a strong FY20. Total club and
restaurant sales were up 10% in 1Q20. Nightclubs experienced added
business from the big mixed-martial arts fight in January and the
pro football championship in February. We expect the rebound in
Bombshells same-store sales and margins to continue. New locations,
including the most recently opened unit in Houston, are doing well.
"We have approximately $6.7
million in excess property sales under contract, and we
expect to continue to generate strong free cash flow, which we'll
deploy for the optimal return according to our capital allocation
strategy."
4Q19 & FY19 REVIEW (All comparisons to year ago
periods unless otherwise noted)
Revenues
- 4Q19: Total revenues of $45.2
million increased 11.1%. By revenue line, growth reflected
increases of $2.5 million (+15.3%) in
alcoholic beverages, $1.1 million
(+20.4%) in food, $680K (+4.3%) in
service, and $210K (+6.8%) in other,
which includes Drink Robust business and Gentlemen's Club Expo
trade show in August.
- FY19: Total revenues of $181.1
million increased 9.2%. By revenue line, growth reflected
increases of $6.0 million (+8.7%) in
alcoholic beverages, $4.0 million
(+6.2%) in service, $3.4 million
(+15.1%) in food, and $1.9 million
(+19.3%) in other.
Operating Income
- 4Q19: Operating income more than tripled, to $2.4 million. Margin expanded to 5.4% of revenues
from 1.7%. Other charges declined 23.3% to $4.9 million due to gains on insurance and
property sales, and all other costs and expenses increased 158
basis points greater than sales growth due to higher accounting and
related legal costs. On a non-GAAP basis, operating income
increased 4.3% to $7.4 million, with
a margin at 16.5% of revenues compared to 17.6%.
- FY19: Operating income increased 25.9% to $34.7 million as margin expanded to 19.2% of
revenues from 16.6%. Other charges declined $6.6 million due to gains on sale of business and
assets compared to losses, and from lower legal settlements. All
other costs and expenses increased 156 basis points greater than
sales growth due to higher accounting and related legal costs. On a
non-GAAP basis, operating income increased 2.6% to $37.9 million, with a margin of 21.0% compared to
22.3%.
Other Charges
- 4Q19: Other charges, net of $4.9
million primarily reflected: (i) two impairments in
Fort Worth ($3.6 million of Cabaret East's building and land,
and $1.1 million of Rick's Cabaret
goodwill), (ii) two gains ($747K from
insurance covering costs earlier in FY19 to repair two clubs) and
from the sale of excess property ($1.6
million proceeds and $677K
gain); and (iii) miscellaneous smaller impairments, gains and
losses related to 9 other assets.
- FY19: Other charges, net of $2.6
million reflected: (i) $2.9
million in gains primarily from the sale of eight excess
properties in Texas and (ii) 4Q19
items mentioned above.
Nightclubs Segment
- 4Q19: Sales increased 5.3% to $35.9
million, with 37 units in both periods. Sales growth
reflected larger new locations (Rick's Chicago and Pittsburgh) more than offsetting smaller
closed locations. Operating income increased 7.5% to $6.2 million. Margin expanded to 17.3% of sales
from 17.0%. The increase in segment profit and profitability was
due to improved revenues and lower other charges. On a non-GAAP
basis, operating income increased 1.9% to $11.0 million, with a margin of 30.6% of sales
compared to 31.6%.
- FY19: Sales increased 6.1% to $148.6
million. Operating income increased 16.3% to $50.7 million. Margin expanded to 34.1% of sales
from 31.1%. The increase in segment profit and profitability
reflected improved revenues and margins and lower other charges. On
a non-GAAP basis, operating income increased 8.5% to $53.3 million, with a margin of 35.9% of sales
compared to 35.1%.
Bombshells Segment
- 4Q19: Sales increased 53.9% to $8.5
million, with 8 units compared to 6. Sales from new
locations (Pearland, I-10 and
Tomball) increased 194.4%.
Comparable same-store sales increased 19.4%. Operating income
improved $2.0 million, to
$764K (9.0% of sales) from a loss of
$1.2 million (-21.8% of sales). 4Q18
included $1.4 million in other
charges, net. On a non-GAAP basis, operating income quadrupled to
$790K, with margin at 9.3% of sales
compared to 3.3%.
- FY19: Sales increased 27.9% to $30.8
million. Sales from new locations increased 201.9%, which
more than offset a 6.1% decline in same-store sales in FY19.
Operating income increased 13.1% to $2.3
million, with margin at 7.5% of sales compared to 8.5%. On a
non-GAAP basis, operating income was $2.3
million (7.6% of sales) compared to $3.6 million (15.1%).
- Non-GAAP operating income included pre-opening costs without
the benefit of revenues related to the four new Bombshells over the
course of FY19. These costs ended in late January 2020 with the recent opening of the
fourth of these new Bombshells on US 59 in Houston.
Other Metrics
- Cash and cash equivalents of $14.1
million at September 30, 2019
increased 28.7% from June 30, 2019
and declined 20.5% from September 30,
2018. 4Q18 balances benefitted from funds borrowed in
advance to fund club acquisitions in 1Q19.
- Long-term debt of $143.5 million
at September 30, 2019 fell 2.1% from
June 30, 2019 and increased 2.1% from
September 30, 2018.
- Occupancy costs (rent and interest expense as a percentage of
total revenues) fell to 7.6% from 7.8%, 4Q19 vs. 4Q18, and
increased to 7.8% from 7.7%, FY19 vs. FY18.
- Adjusted EBITDA increased 7.3% to $9.6
million, 4Q19 vs. 4Q18, and 4.2% to $46.2 million, FY19 vs. FY18.
- Effective Tax Rate for FY19 was an expense of 20.1% compared to
a FY18 benefit of 17.5%, which included the benefit of $8.8 million as a final calculation of the
reduction of deferred tax liability because of the new Tax Cuts and
Jobs Act. The FY18 ETR resulted in a 4Q18 income tax increase to
adjust for the year. On a non-GAAP basis, FY18 ETR was an expense
of 24.5%, which resulted in a 4Q18 income tax reduction to adjust
for the year.
*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, (e) settlement of lawsuits, and
(f) gains or losses on settlement of patron tax case. 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. 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, (h) gains or losses
on settlement of patron tax case, and (i) 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 20.1%, 24.5% and 37.0%
effective tax rate of the pre-tax non-GAAP income before taxes for
2019, 2018 and 2017, 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. The calculated amount for adjustment (i) above in
fiscal 2018 was significantly affected by the change in the
statutory federal corporate tax rate caused by the Tax Act.
- Adjusted EBITDA. We calculate adjusted EBITDA by excluding the
following items from net income attributable to RCIHH common
shareholders: (a) depreciation and amortization, (b) income tax
expense (benefit), (c) net interest expense, (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) impairment of
assets, (h) settlement of lawsuits, (i) gains or losses on
settlement of patron tax case. 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
the unleveraged performance return on our investments. Adjusted
EBITDA multiple is also used as a 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 Club, 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.
|
CONSOLIDATED
STATEMENTS OF INCOME
|
(in thousands, except
per share and percentage data)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For the Three
Months Ended September 30,
|
|
For the Twelve
Months Ended September 30,
|
|
|
|
|
2019
|
|
2018
|
|
2019
|
|
2018
|
|
|
|
|
Amount
|
|
% of
Revenue
|
|
Amount
|
|
% of
Revenue
|
|
Amount
|
|
% of
Revenue
|
|
Amount
|
|
% of
Revenue
|
Revenues
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Sales of alcoholic
beverages
|
$
18,774
|
|
41.6%
|
|
$
16,285
|
|
40.0%
|
|
$
75,140
|
|
41.5%
|
|
$
69,120
|
|
41.7%
|
|
Sales of food and
merchandise
|
6,655
|
|
14.7%
|
|
5,527
|
|
13.6%
|
|
25,830
|
|
14.3%
|
|
22,433
|
|
13.5%
|
|
Service
revenues
|
16,446
|
|
36.4%
|
|
15,766
|
|
38.8%
|
|
68,055
|
|
37.6%
|
|
64,104
|
|
38.7%
|
|
Other
|
3,308
|
|
7.3%
|
|
3,098
|
|
7.6%
|
|
12,034
|
|
6.6%
|
|
10,091
|
|
6.1%
|
|
|
Total
revenues
|
45,183
|
|
100.0%
|
|
40,676
|
|
100.0%
|
|
181,059
|
|
100.0%
|
|
165,748
|
|
100.0%
|
Operating
expenses
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost of goods
sold
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Alcoholic beverages
sold
|
3,762
|
|
20.0%
|
|
3,351
|
|
20.6%
|
|
15,303
|
|
20.4%
|
|
14,327
|
|
20.7%
|
|
|
Food and merchandise
sold
|
2,199
|
|
33.0%
|
|
1,935
|
|
35.0%
|
|
9,056
|
|
35.1%
|
|
8,133
|
|
36.3%
|
|
|
Service and
other
|
271
|
|
1.4%
|
|
276
|
|
1.5%
|
|
578
|
|
0.7%
|
|
449
|
|
0.6%
|
|
|
|
Total cost of goods
sold (exclusive of items shown below)
|
6,232
|
|
13.8%
|
|
5,562
|
|
13.7%
|
|
24,937
|
|
13.8%
|
|
22,909
|
|
13.8%
|
|
Salaries and
wages
|
12,665
|
|
28.0%
|
|
11,461
|
|
28.2%
|
|
49,833
|
|
27.5%
|
|
44,547
|
|
26.9%
|
|
Selling, general and
administrative
|
16,633
|
|
36.8%
|
|
14,688
|
|
36.1%
|
|
59,896
|
|
33.1%
|
|
53,824
|
|
32.5%
|
|
Depreciation and
amortization
|
2,354
|
|
5.2%
|
|
1,916
|
|
4.7%
|
|
9,072
|
|
5.0%
|
|
7,722
|
|
4.7%
|
|
Other charges,
net
|
4,870
|
|
10.8%
|
|
6,350
|
|
15.6%
|
|
2,620
|
|
1.4%
|
|
9,184
|
|
5.5%
|
|
|
Total operating
expenses
|
42,754
|
|
94.6%
|
|
39,977
|
|
98.3%
|
|
146,358
|
|
80.8%
|
|
138,186
|
|
83.4%
|
Income from
operations
|
2,429
|
|
5.4%
|
|
699
|
|
1.7%
|
|
34,701
|
|
19.2%
|
|
27,562
|
|
16.6%
|
Other income
(expenses)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest
expense
|
(2,500)
|
|
-5.5%
|
|
(2,461)
|
|
-6.1%
|
|
(10,209)
|
|
-5.6%
|
|
(9,954)
|
|
-6.0%
|
|
Interest
income
|
91
|
|
0.2%
|
|
47
|
|
0.1%
|
|
309
|
|
0.2%
|
|
234
|
|
0.1%
|
|
Non-operating
loss
|
(204)
|
|
-0.5%
|
|
-
|
|
0.0%
|
|
(612)
|
|
-0.3%
|
|
-
|
|
0.0%
|
Income before income
taxes
|
(184)
|
|
-0.4%
|
|
(1,715)
|
|
-4.2%
|
|
24,189
|
|
13.4%
|
|
17,842
|
|
10.8%
|
Income tax expense
(benefit)
|
(684)
|
|
-1.5%
|
|
1,781
|
|
4.4%
|
|
4,863
|
|
2.7%
|
|
(3,118)
|
|
-1.9%
|
Net income
(loss)
|
500
|
|
1.1%
|
|
(3,496)
|
|
-8.6%
|
|
19,326
|
|
10.7%
|
|
20,960
|
|
12.6%
|
Net income
attributable to noncontrolling interests
|
(42)
|
|
-0.1%
|
|
(10)
|
|
0.0%
|
|
(151)
|
|
-0.1%
|
|
(81)
|
|
0.0%
|
Net income (loss)
attributable to RCIHH common shareholders
|
$
458
|
|
1.0%
|
|
$
(3,506)
|
|
-8.6%
|
|
$
19,175
|
|
10.6%
|
|
$
20,879
|
|
12.6%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings (loss) per
share
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic and
diluted
|
$
0.05
|
|
|
|
$
(0.36)
|
|
|
|
$
1.99
|
|
|
|
$
2.15
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average
shares outstanding
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic and
diluted
|
9,616
|
|
|
|
9,719
|
|
|
|
9,657
|
|
|
|
9,719
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Dividends per
share
|
$
0.04
|
|
|
|
$
0.03
|
|
|
|
$
0.13
|
|
|
|
$
0.12
|
|
|
RCI HOSPITALITY
HOLDINGS, INC.
|
NON-GAAP FINANCIAL
MEASURES
|
(in thousands, except
per share and percentage data)
|
|
|
|
|
|
|
|
|
|
For the Three
Months
|
|
For the Twelve
Months
|
|
Ended September
30,
|
|
Ended September
30,
|
|
2019
|
|
2018
|
|
2019
|
|
2018
|
Reconciliation of
GAAP net income (loss) to Adjusted EBITDA
|
Net income (loss)
attributable to RCIHH common shareholders
|
$
458
|
|
$ (3,506)
|
|
$
19,175
|
|
$
20,879
|
Income tax expense
(benefit)
|
(684)
|
|
1,781
|
|
4,863
|
|
(3,118)
|
Interest expense,
net
|
2,409
|
|
2,414
|
|
9,900
|
|
9,720
|
Settlement of
lawsuits
|
81
|
|
395
|
|
225
|
|
1,669
|
Impairment of
assets
|
6,040
|
|
4,020
|
|
6,040
|
|
5,570
|
Loss (gain) on sale
of businesses and assets
|
(390)
|
|
1,935
|
|
(2,877)
|
|
1,965
|
Unrealized loss on
equity securities
|
204
|
|
-
|
|
612
|
|
-
|
Gain on
insurance
|
(861)
|
|
-
|
|
(768)
|
|
(20)
|
Depreciation and
amortization
|
2,354
|
|
1,916
|
|
9,072
|
|
7,722
|
Adjusted
EBITDA
|
$
9,611
|
|
$
8,955
|
|
$
46,242
|
|
$
44,387
|
|
|
|
|
|
|
|
|
Reconciliation of
GAAP net income (loss) to non-GAAP net income
|
Net income (loss)
attributable to RCIHH common shareholders
|
$
458
|
|
$ (3,506)
|
|
$
19,175
|
|
$
20,879
|
Amortization of
intangibles
|
150
|
|
93
|
|
624
|
|
254
|
Settlement of
lawsuits
|
81
|
|
395
|
|
225
|
|
1,669
|
Impairment of
assets
|
6,040
|
|
4,020
|
|
6,040
|
|
5,570
|
Loss (gain) on sale
of businesses and assets
|
(390)
|
|
1,935
|
|
(2,877)
|
|
1,965
|
Unrealized loss on
equity securities
|
204
|
|
-
|
|
612
|
|
-
|
Gain on
insurance
|
(861)
|
|
-
|
|
(768)
|
|
(20)
|
Costs and charges
related to debt refinancing
|
-
|
|
-
|
|
-
|
|
827
|
Net income tax effect
of adjustments above
|
(1,071)
|
|
1,092
|
|
(744)
|
|
(9,984)
|
Non-GAAP net
income
|
$
4,611
|
|
$
4,029
|
|
$
22,287
|
|
$
21,160
|
|
|
|
|
|
|
|
|
Reconciliation of
GAAP diluted earnings (loss) per share to non-GAAP diluted earnings
per share
|
Diluted
shares
|
9,616
|
|
9,719
|
|
9,657
|
|
9,719
|
GAAP diluted earnings
(loss) per share
|
$
0.05
|
|
$
(0.36)
|
|
$
1.99
|
|
$
2.15
|
Amortization of
intangibles
|
0.02
|
|
0.01
|
|
0.06
|
|
0.03
|
Settlement of
lawsuits
|
0.01
|
|
0.04
|
|
0.02
|
|
0.17
|
Impairment of
assets
|
0.63
|
|
0.41
|
|
0.63
|
|
0.57
|
Loss (gain) on sale
of businesses and assets
|
(0.04)
|
|
0.20
|
|
(0.30)
|
|
0.20
|
Unrealized loss on
equity securities
|
0.02
|
|
-
|
|
0.06
|
|
-
|
Gain on
insurance
|
(0.09)
|
|
-
|
|
(0.08)
|
|
(0.00)
|
Costs and charges
related to debt refinancing
|
-
|
|
-
|
|
-
|
|
0.09
|
Net income tax effect
of adjustments above
|
(0.11)
|
|
0.11
|
|
(0.08)
|
|
(1.02)
|
Non-GAAP diluted
earnings per share
|
$
0.48
|
|
$
0.41
|
|
$
2.31
|
|
$
2.18
|
|
|
|
|
|
|
|
|
Reconciliation of
GAAP operating income to non-GAAP operating income
|
Income from
operations
|
$
2,429
|
|
$
699
|
|
$
34,701
|
|
$
27,562
|
Amortization of
intangibles
|
150
|
|
93
|
|
624
|
|
254
|
Settlement of
lawsuits
|
81
|
|
395
|
|
225
|
|
1,669
|
Impairment of
assets
|
6,040
|
|
4,020
|
|
6,040
|
|
5,570
|
Loss (gain) on sale
of businesses and assets
|
(390)
|
|
1,935
|
|
(2,877)
|
|
1,965
|
Gain on
insurance
|
(861)
|
|
-
|
|
(768)
|
|
(20)
|
Non-GAAP operating
income
|
$
7,449
|
|
$
7,142
|
|
$
37,945
|
|
$
37,000
|
|
|
|
|
|
|
|
|
Reconciliation of
GAAP operating margin to non-GAAP operating margin
|
GAAP operating
margin
|
5.4%
|
|
1.7%
|
|
19.2%
|
|
16.6%
|
Amortization of
intangibles
|
0.3%
|
|
0.2%
|
|
0.3%
|
|
0.2%
|
Settlement of
lawsuits
|
0.2%
|
|
1.0%
|
|
0.1%
|
|
1.0%
|
Impairment of
assets
|
13.4%
|
|
9.9%
|
|
3.3%
|
|
3.4%
|
Loss (gain) on sale
of businesses and assets
|
-0.9%
|
|
4.8%
|
|
-1.6%
|
|
1.2%
|
Gain on
insurance
|
-1.9%
|
|
0.0%
|
|
-0.4%
|
|
0.0%
|
Non-GAAP operating
margin
|
16.5%
|
|
17.6%
|
|
21.0%
|
|
22.3%
|
|
|
|
|
|
|
|
|
Reconciliation of
net cash provided by operating activities to free cash
flow
|
Net cash provided by
operating activities
|
$
8,760
|
|
$
3,358
|
|
$
37,174
|
|
$
25,769
|
Less: Maintenance
capital expenditures
|
1,786
|
|
680
|
|
3,858
|
|
2,527
|
Free cash
flow
|
$
6,974
|
|
$
2,678
|
|
$
33,316
|
|
$
23,242
|
RCI HOSPITALITY
HOLDINGS, INC.
|
SEGMENT
INFORMATION
|
(in
thousands)
|
|
|
|
|
|
|
|
|
|
|
|
For the Three
Months
|
|
For the Twelve
Months
|
|
|
Ended September
30,
|
|
Ended September
30,
|
|
|
2019
|
|
2018
|
|
2019
|
|
2018
|
Revenues
|
|
|
|
|
|
|
|
|
Nightclubs
|
$
35,942
|
|
$
34,146
|
|
$
148,606
|
|
$
140,060
|
|
Bombshells
|
8,533
|
|
5,544
|
|
30,828
|
|
24,094
|
|
Other
|
708
|
|
986
|
|
1,625
|
|
1,594
|
|
|
$
45,183
|
|
$
40,676
|
|
$
181,059
|
|
$
165,748
|
|
|
|
|
|
|
|
|
|
Income (loss) from
operations
|
|
|
|
|
|
|
|
|
Nightclubs
|
$
6,225
|
|
$
5,789
|
|
$
50,724
|
|
$
43,624
|
|
Bombshells
|
764
|
|
(1,207)
|
|
2,307
|
|
2,040
|
|
Other
|
97
|
|
295
|
|
(309)
|
|
(252)
|
|
General
corporate
|
(4,657)
|
|
(4,178)
|
|
(18,021)
|
|
(17,850)
|
|
|
$
2,429
|
|
$
699
|
|
$
34,701
|
|
$
27,562
|
RCI HOSPITALITY
HOLDINGS, INC.
|
NON-GAAP SEGMENT
INFORMATION
|
($ in
thousands)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For the Three
Months Ended September 30, 2019
|
|
For the Three
Months Ended September 30, 2018
|
|
Nightclubs
|
|
Bombshells
|
|
Other
|
|
Corporate
|
|
Total
|
|
Nightclubs
|
|
Bombshells
|
|
Other
|
|
Corporate
|
|
Total
|
Income (loss) from
operations
|
$
6,225
|
|
$
764
|
|
$
97
|
|
$
(4,657)
|
|
$
2,429
|
|
$
5,789
|
|
$
(1,207)
|
|
$
295
|
|
$
(4,178)
|
|
$
699
|
Amortization of
intangibles
|
-
|
|
-
|
|
-
|
|
150
|
|
150
|
|
-
|
|
-
|
|
-
|
|
93
|
|
93
|
Settlement of
lawsuits
|
40
|
|
-
|
|
-
|
|
41
|
|
81
|
|
366
|
|
-
|
|
-
|
|
29
|
|
395
|
Impairment of
assets
|
5,920
|
|
-
|
|
-
|
|
120
|
|
6,040
|
|
4,447
|
|
1,123
|
|
-
|
|
-
|
|
5,570
|
Loss (gain) on sale
of businesses and assets
|
(446)
|
|
26
|
|
-
|
|
30
|
|
(390)
|
|
188
|
|
267
|
|
(63)
|
|
(7)
|
|
385
|
Gain on
insurance
|
(747)
|
|
-
|
|
-
|
|
(114)
|
|
(861)
|
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
Non-GAAP operating
income (loss)
|
$
10,992
|
|
$
790
|
|
$
97
|
|
$
(4,430)
|
|
$
7,449
|
|
$
10,790
|
|
$
183
|
|
$
232
|
|
$
(4,063)
|
|
$
7,142
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP operating
margin
|
17.3%
|
|
9.0%
|
|
13.7%
|
|
-10.3%
|
|
5.4%
|
|
17.0%
|
|
-21.8%
|
|
29.9%
|
|
-10.3%
|
|
1.7%
|
Non-GAAP operating
margin
|
30.6%
|
|
9.3%
|
|
13.7%
|
|
-9.8%
|
|
16.5%
|
|
31.6%
|
|
3.3%
|
|
23.5%
|
|
-10.0%
|
|
17.6%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For the Twelve
Months Ended September 30, 2019
|
|
For the Twelve
Months Ended September 30, 2018
|
|
Nightclubs
|
|
Bombshells
|
|
Other
|
|
Corporate
|
|
Total
|
|
Nightclubs
|
|
Bombshells
|
|
Other
|
|
Corporate
|
|
Total
|
Income (loss) from
operations
|
$
50,724
|
|
$
2,307
|
|
$ (309)
|
|
$ (18,021)
|
|
$
34,701
|
|
$
43,624
|
|
$
2,040
|
|
$ (252)
|
|
$ (17,850)
|
|
$
27,562
|
Amortization of
intangibles
|
-
|
|
-
|
|
-
|
|
624
|
|
624
|
|
-
|
|
-
|
|
-
|
|
254
|
|
254
|
Settlement of
lawsuits
|
169
|
|
3
|
|
-
|
|
53
|
|
225
|
|
1,440
|
|
200
|
|
-
|
|
29
|
|
1,669
|
Impairment of
assets
|
5,920
|
|
-
|
|
-
|
|
120
|
|
6,040
|
|
4,447
|
|
1,123
|
|
-
|
|
-
|
|
5,570
|
Loss (gain) on sale
of businesses and assets
|
(2,858)
|
|
27
|
|
-
|
|
(46)
|
|
(2,877)
|
|
(400)
|
|
267
|
|
-
|
|
2,098
|
|
1,965
|
Gain on
insurance
|
(654)
|
|
-
|
|
-
|
|
(114)
|
|
(768)
|
|
-
|
|
-
|
|
-
|
|
(20)
|
|
(20)
|
Non-GAAP operating
income (loss)
|
$
53,301
|
|
$
2,337
|
|
$ (309)
|
|
$ (17,384)
|
|
$
37,945
|
|
$
49,111
|
|
$
3,630
|
|
$ (252)
|
|
$ (15,489)
|
|
$
37,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP operating
margin
|
34.1%
|
|
7.5%
|
|
-19.0%
|
|
-10.0%
|
|
19.2%
|
|
31.1%
|
|
8.5%
|
|
-15.8%
|
|
-10.8%
|
|
16.6%
|
Non-GAAP operating
margin
|
35.9%
|
|
7.6%
|
|
-19.0%
|
|
-9.6%
|
|
21.0%
|
|
35.1%
|
|
15.1%
|
|
-15.8%
|
|
-9.3%
|
|
22.3%
|
RCI HOSPITALITY
HOLDINGS, INC.
|
CONSOLIDATED
STATEMENTS OF CASH FLOWS
|
(in
thousands)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For the Three
Months Ended
|
|
For the Twelve
Months Ended
|
|
|
|
September 30,
2019
|
|
September 30,
2018
|
|
September 30,
2019
|
|
September 30,
2018
|
CASH FLOWS FROM
OPERATING ACTIVITIES
|
|
|
|
|
|
|
|
Net income
(loss)
|
$
500
|
|
$
(3,496)
|
|
$
19,326
|
|
$
20,960
|
Adjustments to
reconcile net income (loss) to net cash provided by operating
activities:
|
|
|
|
|
|
|
|
|
Depreciation and
amortization
|
2,354
|
|
1,916
|
|
9,072
|
|
7,722
|
|
Deferred tax expense
(credit)
|
(416)
|
|
2,884
|
|
821
|
|
(6,775)
|
|
Loss (gain) on sale
of businesses and assets
|
(262)
|
|
2,092
|
|
(2,966)
|
|
2,162
|
|
Unrealized loss on
equity securities
|
204
|
|
-
|
|
612
|
|
-
|
|
Amortization of debt
discount and issuance costs
|
58
|
|
91
|
|
334
|
|
560
|
|
Deferred rent expense
(credit)
|
46
|
|
(21)
|
|
282
|
|
203
|
|
Impairment of
assets
|
6,040
|
|
4,020
|
|
6,040
|
|
5,570
|
|
Gain on insurance
settlements
|
(381)
|
|
-
|
|
(288)
|
|
(20)
|
|
Debt prepayment
penalty
|
-
|
|
-
|
|
-
|
|
543
|
|
Changes in operating
assets and liabilities:
|
|
|
|
|
|
|
|
|
|
Accounts
receivable
|
(729)
|
|
(1,834)
|
|
1,576
|
|
(3,622)
|
|
|
Inventories
|
(129)
|
|
58
|
|
(216)
|
|
(199)
|
|
|
Prepaid expenses,
other current assets and other assets
|
(4,880)
|
|
(3,853)
|
|
(681)
|
|
(2,589)
|
|
|
Accounts payable and
accrued liabilities
|
6,355
|
|
1,501
|
|
3,262
|
|
1,254
|
|
Net cash provided by
operating activities
|
8,760
|
|
3,358
|
|
37,174
|
|
25,769
|
CASH FLOWS FROM
INVESTING ACTIVITIES
|
|
|
|
|
|
|
|
Proceeds from sale of
businesses and assets
|
2,117
|
|
182
|
|
7,223
|
|
811
|
Proceeds from
insurance
|
100
|
|
-
|
|
100
|
|
20
|
Proceeds from notes
receivable
|
51
|
|
29
|
|
158
|
|
127
|
Issuance of notes
receivable
|
-
|
|
-
|
|
(420)
|
|
-
|
Additions to property
and equipment
|
(3,807)
|
|
(6,436)
|
|
(20,708)
|
|
(25,263)
|
Acquisition of
businesses, net of cash acquired
|
-
|
|
(1,550)
|
|
(13,500)
|
|
(2,034)
|
|
Net cash used in
investing activities
|
(1,539)
|
|
(7,775)
|
|
(27,147)
|
|
(26,339)
|
CASH FLOWS FROM
FINANCING ACTIVITIES
|
|
|
|
|
|
|
|
Proceeds from
long-term debt
|
1,181
|
|
11,846
|
|
13,511
|
|
84,233
|
Payments on long-term
debt
|
(4,290)
|
|
(2,386)
|
|
(22,924)
|
|
(72,830)
|
Debt prepayment
penalty
|
-
|
|
-
|
|
-
|
|
(543)
|
Purchase of treasury
stock
|
(537)
|
|
-
|
|
(2,901)
|
|
-
|
Payment of
dividends
|
(385)
|
|
(292)
|
|
(1,252)
|
|
(1,168)
|
Payment of loan
origination costs
|
-
|
|
(178)
|
|
(20)
|
|
(1,138)
|
Distribution to
noncontrolling interests
|
(49)
|
|
(18)
|
|
(70)
|
|
(180)
|
|
Net cash provided by
(used in) financing activities
|
(4,080)
|
|
8,972
|
|
(13,656)
|
|
8,374
|
NET INCREASE
(DECREASE) IN CASH AND CASH
|
|
|
|
|
|
|
|
EQUIVALENTS
|
3,141
|
|
4,555
|
|
(3,629)
|
|
7,804
|
CASH AND CASH
EQUIVALENTS AT BEGINNING OF PERIOD
|
10,956
|
|
13,171
|
|
17,726
|
|
9,922
|
CASH AND CASH
EQUIVALENTS AT END OF PERIOD
|
$
14,097
|
|
$
17,726
|
|
$
14,097
|
|
$
17,726
|
RCI HOSPITALITY
HOLDINGS, INC.
|
CONSOLIDATED
BALANCE SHEETS
|
(in
thousands)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
September
30,
|
|
June
30,
|
|
September
30,
|
|
|
|
|
2019
|
|
2019
|
|
2018
|
ASSETS
|
|
|
|
|
|
Current
assets
|
|
|
|
|
|
|
Cash and cash
equivalents
|
$
14,097
|
|
$
10,956
|
|
$
17,726
|
|
Accounts receivable,
net
|
6,289
|
|
5,001
|
|
7,320
|
|
Current portion of
notes receivable
|
954
|
|
1,152
|
|
-
|
|
Inventories
|
2,598
|
|
2,502
|
|
2,353
|
|
Prepaid
insurance
|
5,446
|
|
896
|
|
4,910
|
|
Other current
assets
|
2,521
|
|
2,090
|
|
1,591
|
|
Assets held for
sale
|
2,866
|
|
-
|
|
2,902
|
|
|
Total current
assets
|
34,771
|
|
22,597
|
|
36,802
|
Property and
equipment, net
|
183,956
|
|
191,493
|
|
172,403
|
Notes receivable, net
of current portion
|
4,211
|
|
3,810
|
|
2,874
|
Goodwill
|
53,630
|
|
55,271
|
|
43,591
|
Intangibles,
net
|
75,951
|
|
76,285
|
|
71,532
|
Other
assets
|
1,118
|
|
1,422
|
|
2,530
|
|
|
|
Total
assets
|
$
353,637
|
|
$
350,878
|
|
$
329,732
|
|
|
|
|
|
|
|
|
|
LIABILITIES AND
STOCKHOLDERS' EQUITY
|
|
|
|
|
|
Current
liabilities
|
|
|
|
|
|
|
Accounts
payable
|
$
3,810
|
|
$
2,544
|
|
$
2,825
|
|
Accrued
liabilities
|
14,644
|
|
9,117
|
|
11,973
|
|
Current portion of
long-term debt
|
15,754
|
|
16,374
|
|
19,047
|
|
|
Total current
liabilities
|
34,208
|
|
28,035
|
|
33,845
|
Deferred tax
liability, net
|
21,658
|
|
22,076
|
|
19,552
|
Long-term debt, net
of current portion
|
127,774
|
|
130,205
|
|
121,580
|
Other long-term
liabilities
|
1,696
|
|
1,656
|
|
1,423
|
|
|
Total
liabilities
|
185,336
|
|
181,972
|
|
176,400
|
|
|
|
|
|
|
|
|
|
Commitments and
contingencies
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Stockholders'
equity
|
|
|
|
|
|
|
Preferred
stock
|
-
|
|
-
|
|
-
|
|
Common
stock
|
96
|
|
96
|
|
97
|
|
Additional paid-in
capital
|
61,312
|
|
61,849
|
|
64,212
|
|
Retained
earnings
|
107,049
|
|
106,976
|
|
88,906
|
|
Accumulated other
comprehensive income
|
-
|
|
-
|
|
220
|
|
|
Total RCIHH
stockholders' equity
|
168,457
|
|
168,921
|
|
153,435
|
|
Noncontrolling
interests
|
(156)
|
|
(15)
|
|
(103)
|
|
|
Total stockholders'
equity
|
168,301
|
|
168,906
|
|
153,332
|
|
|
|
Total liabilities and
stockholders' equity
|
$
353,637
|
|
$
350,878
|
|
$
329,732
|
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SOURCE RCI Hospitality Holdings, Inc.