HOUSTON, Aug. 10, 2020 /PRNewswire/ -- RCI Hospitality
Holdings, Inc. (Nasdaq: RICK) today reported results for the third
quarter ended June 30, 2020 and filed
its corresponding Form 10-Q. Results are not comparable to prior
periods due to the Covid-19 pandemic. In line with government
regulations, all locations remained closed in April, a number
reopened in May and June, and some of those had to close
temporarily before quarter-end.
Key Points
- Total revenues of $14.7 million
with $156 thousand in April,
$5.7 million in May, and $8.9 million in June.
- Net loss attributable to common shareholders of $5.5 million or $0.60 per share.
- Positive operating cash flow. Net cash from operating
activities and free cash flow* of $166
thousand.
- Cash at June 30, 2020 was
$14.8 million and accounts receivable
were $5.5 million, including a
$3.6 million income tax
receivable.
- Bombshells restaurants had record two-month revenues in
May-June and quarterly segment operating margin of 22.3% that
exceeded our FY20 target.
- Nightclubs that were able to open performed well considering
3Q20's operating environment.
- July revenues totaled $7.6
million.
- 31 locations open as of today.
- Approximately half of our team members are back at work after
extensive furloughs in March.
- All open locations follow Covid-19 safety standards for guests
and team members, including mandatory mask, social distancing,
occupancy and hourly restrictions, as well as closing temporarily
for periodic sanitizing.
- Though our cash flows are not what we anticipated at the start
of FY20, the near-term outlook for our business remains strong, and
we expect to generate adequate cash flows from operations over the
next 12 months. Please see our 10-Q for further discussion.
Conference Call
A conference call to discuss 3Q20 results, outlook and related
matters will be held today at 4:30 PM
ET:
- 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/2209/36059
- Phone replay: Toll Free 877-481-4010, International
919-882-2331, Passcode: 36059
CEO Comment
Eric Langan, President & CEO,
said: "After more than five months, we are more confident in
managing how the pandemic is affecting our businesses. By being
agile, innovative and acting quickly, we believe we have made the
company more resilient.
"We have significantly reduced our cost structure. All payments
not deferred were made as required. We have learned how to safely
open, close, and reopen locations, and have developed effective
ways to serve guests and market our businesses in this new
environment. In addition, we have been able to retain our key
personnel and rehire many of our valuable team members.
"We have also continued to pursue longer-term strategies. For
example, during 3Q20 we sold the second of two excess parcels at
Bombshells I-10 in Houston. This
significantly reduced our total debt at this location as
planned.
"Even with no sales in April, we ended 3Q20 with small but
positive operating cash flow, sufficient working capital, and open
locations that should provide us with ample staying power. When
more locations open, such as our larger Florida and New
York units, we believe our new cost structure and marketing
should generate noticeably increased cash flow even with
Covid-related restrictions.
"Our people have been unbelievable. A special thanks goes out to
our team members for making all of this possible."
As of the release of this report, we do not know the extent and
duration of the impact of Covid-19 on our businesses due to the
uncertainty about the spread of the virus. Lower sales, as caused
by social distancing guidelines, could lead to adverse financial
results. However, we will continually monitor and evaluate the
situation and will determine any further measures to be instituted,
including refinancing several of our debt obligations.
3Q20 Statement of Operations (All comparisons are to 3Q19
unless otherwise noted)
- Consolidated revenues of $14.7
million declined 68.7%. Bombshells segment generated
revenues of $4.3 million in May and
$4.2 million in June. Nightclubs
segment generated revenues of $1.3
million in May and $4.7
million in June.
- All locations remained closed in April
2020. Following changing regional conditions and government
regulations, 11 reopened by May 15, a
total of 34 were open by May 31, a
total of 40 were open by June 15, and
a total of 29 were open at the end of 3Q20. As of today, we have 31
locations open.
- Cost of goods was 16.2% of revenues compared to 14.2% due to a
higher proportion of food sales.
- Salaries and wages and SGA costs declined 48.9%. This reflected
cost-cutting and fewer locations open, partially offset by one
month of no open locations and new Covid-related safety costs.
- Net other charges of $424
thousand compared to a net gain of $172 thousand. 3Q20 reflected $1.0 million in additional Covid-19 impairment
and a $608 thousand gain from the
sale of real estate, mainly excess property around Bombshells I-10.
Most of the $1.9 million sale
proceeds paid down related debt.
- By segment, Bombshells had a $1.9
million operating profit at a 22.3% margin with a higher
level of sales and more consistent occupancy while operating in
line with indoor restrictions.
- Nightclubs had a $3.1 million
operating loss, which included depreciation of $1.5 million and net charges of $363 thousand (both non-cash).
- Interest expense was 3.3% lower than a year ago due to debt
paydowns prior to and during 3Q20.
- Income tax was a $1.4 million
benefit compared to a $1.8 million
expense.
- Weighted average number of common shares outstanding of 9.1
million declined 5.1% due to repurchases prior to 3Q20.
June 30, 2020 Balance Sheet
(All comparisons are to March 31,
2020 unless otherwise noted)
- Cash and cash equivalents of $14.8
million compared to $9.8
million.
- Long-term debt of $142.7 million
compared to $140.4 million. The
increase primarily reflects the addition of a $5.4 million SBA loan partially offset by 3Q20
paydowns of other debt.
*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) gains or
losses on sale of businesses and assets, (c) gains or losses on
insurance, (d) settlement of lawsuits, and (e) impairment of
assets. 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) gains or losses on sale of businesses and assets,
(c) gains or losses on insurance, (d) unrealized gains or losses on
equity securities, (e) settlement of lawsuits, (f) impairment of
assets, and (g) 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 26.9% and 22.8% effective tax rate of the
pre-tax non-GAAP income before taxes for the nine months ended
June 30, 2020 and 2019, 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 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)
settlement of lawsuits, and (h) impairment of assets. 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.
Note
All references to the "company," "we," "our," and similar terms
include RCI Hospitality Holdings, Inc. and its subsidiaries, unless
the context indicates otherwise.
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 maintain
compliance with the filing requirements of the SEC and the Nasdaq
Stock Market, (vii) the impact and uncertainty of the coronavirus
pandemic, and (viii) numerous other factors such as laws governing
the operation of adult entertainment businesses, competition and
dependence on key personnel. For more detailed discussion of such
factors and certain risks and uncertainties, see RCI's annual
report on Form 10-K for the year ended September 30, 2019 and its latest Form 10-Q as
well as its other filings with the U.S. Securities and Exchange
Commission. The company has no obligation to update or revise the
forward-looking statements to reflect the occurrence of future
events or circumstances.
Media & Investor Contacts
Gary Fishman and Steven Anreder at 212-532-3232 or
gary.fishman@anreder.com and steven.anreder@anreder.com
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RCI HOSPITALITY
HOLDINGS, INC.
|
CONDENSED
CONSOLIDATED STATEMENTS OF OPERATIONS
|
(in thousands, except
per share and percentage data)
|
|
|
|
|
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|
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|
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|
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|
|
|
For the Three
Months Ended June 30,
|
|
For the Nine
Months Ended June 30,
|
|
|
|
|
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2020
|
|
2019
|
|
2020
|
|
2019
|
|
|
|
|
|
Amount
|
|
% of
Revenue
|
|
Amount
|
|
% of
Revenue
|
|
Amount
|
|
% of
Revenue
|
|
Amount
|
|
% of
Revenue
|
Revenues
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Sales of alcoholic
beverages
|
|
$
7,623
|
|
51.8%
|
|
$
19,570
|
|
41.6%
|
|
$
45,285
|
|
43.7%
|
|
$
56,366
|
|
41.5%
|
|
Sales of food and
merchandise
|
|
3,452
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|
23.4%
|
|
7,046
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|
15.0%
|
|
17,378
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|
16.8%
|
|
19,175
|
|
14.1%
|
|
Service
revenues
|
|
2,907
|
|
19.7%
|
|
17,299
|
|
36.8%
|
|
34,448
|
|
33.3%
|
|
51,609
|
|
38.0%
|
|
Other
|
|
739
|
|
5.0%
|
|
3,112
|
|
6.6%
|
|
6,430
|
|
6.2%
|
|
8,726
|
|
6.4%
|
|
|
Total
revenues
|
|
14,721
|
|
100.0%
|
|
47,027
|
|
100.0%
|
|
103,541
|
|
100.0%
|
|
135,876
|
|
100.0%
|
Operating
expenses
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost of goods
sold
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Alcoholic beverages
sold
|
|
1,245
|
|
16.3%
|
|
4,015
|
|
20.5%
|
|
8,826
|
|
19.5%
|
|
11,541
|
|
20.5%
|
|
|
Food and merchandise
sold
|
|
1,125
|
|
32.6%
|
|
2,565
|
|
36.4%
|
|
5,917
|
|
34.0%
|
|
6,857
|
|
35.8%
|
|
|
Service and
other
|
|
20
|
|
0.5%
|
|
121
|
|
0.6%
|
|
205
|
|
0.5%
|
|
307
|
|
0.5%
|
|
|
|
Total cost of goods
sold (exclusive of items shown below)
|
|
2,390
|
|
16.2%
|
|
6,701
|
|
14.2%
|
|
14,948
|
|
14.4%
|
|
18,705
|
|
13.8%
|
|
Salaries and
wages
|
|
5,421
|
|
36.8%
|
|
13,164
|
|
28.0%
|
|
30,866
|
|
29.8%
|
|
37,168
|
|
27.4%
|
|
Selling, general and
administrative
|
|
8,908
|
|
60.5%
|
|
14,895
|
|
31.7%
|
|
39,889
|
|
38.5%
|
|
43,263
|
|
31.8%
|
|
Depreciation and
amortization
|
|
2,235
|
|
15.2%
|
|
2,465
|
|
5.2%
|
|
6,696
|
|
6.5%
|
|
6,718
|
|
4.9%
|
|
Other charges
(gains), net
|
|
424
|
|
2.9%
|
|
(172)
|
|
-0.4%
|
|
8,588
|
|
8.3%
|
|
(2,250)
|
|
-1.7%
|
|
|
Total operating
expenses
|
|
19,378
|
|
131.6%
|
|
37,053
|
|
78.8%
|
|
100,987
|
|
97.5%
|
|
103,604
|
|
76.2%
|
Income (loss) from
operations
|
|
(4,657)
|
|
-31.6%
|
|
9,974
|
|
21.2%
|
|
2,554
|
|
2.5%
|
|
32,272
|
|
23.8%
|
Other income
(expenses)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest
expense
|
|
(2,459)
|
|
-16.7%
|
|
(2,543)
|
|
-5.4%
|
|
(7,403)
|
|
-7.1%
|
|
(7,709)
|
|
-5.7%
|
|
Interest
income
|
|
80
|
|
0.5%
|
|
92
|
|
0.2%
|
|
263
|
|
0.3%
|
|
218
|
|
0.2%
|
|
Unrealized gain
(loss) on equity securities
|
|
31
|
|
0.2%
|
|
(38)
|
|
-0.1%
|
|
(103)
|
|
-0.1%
|
|
(408)
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|
-0.3%
|
Income (loss) before
income taxes
|
|
(7,005)
|
|
-47.6%
|
|
7,485
|
|
15.9%
|
|
(4,689)
|
|
-4.5%
|
|
24,373
|
|
17.9%
|
Income tax expense
(benefit)
|
|
(1,437)
|
|
-9.8%
|
|
1,806
|
|
3.8%
|
|
(1,262)
|
|
-1.2%
|
|
5,547
|
|
4.1%
|
Net income
(loss)
|
|
(5,568)
|
|
-37.8%
|
|
5,679
|
|
12.1%
|
|
(3,427)
|
|
-3.3%
|
|
18,826
|
|
13.9%
|
Net loss (income)
attributable to noncontrolling interests
|
|
94
|
|
0.6%
|
|
(41)
|
|
-0.1%
|
|
135
|
|
0.1%
|
|
(109)
|
|
-0.1%
|
Net income (loss)
attributable to RCIHH common shareholders
|
|
$
(5,474)
|
|
-37.2%
|
|
$
5,638
|
|
12.0%
|
|
$
(3,292)
|
|
-3.2%
|
|
$
18,717
|
|
13.8%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings (loss) per
share
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic and
diluted
|
|
$
(0.60)
|
|
|
|
$
0.59
|
|
|
|
$
(0.36)
|
|
|
|
$
1.94
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average
shares outstanding
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic and
diluted
|
|
9,125
|
|
|
|
9,620
|
|
|
|
9,224
|
|
|
|
9,671
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Dividends per
share
|
|
$
0.03
|
|
|
|
$
0.03
|
|
|
|
$
0.10
|
|
|
|
$
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,
|
|
|
2020
|
|
2019
|
|
2020
|
|
2019
|
Reconciliation of
GAAP net income (loss) to Adjusted EBITDA
|
|
|
|
|
|
|
|
|
Net income (loss)
attributable to RCIHH common shareholders
|
|
$
(5,474)
|
|
$
5,638
|
|
$
(3,292)
|
|
$
18,717
|
Income tax expense
(benefit)
|
|
(1,437)
|
|
1,806
|
|
(1,262)
|
|
5,547
|
Interest expense,
net
|
|
2,379
|
|
2,451
|
|
7,140
|
|
7,491
|
Settlement of
lawsuits
|
|
50
|
|
-
|
|
74
|
|
144
|
Impairment of
assets
|
|
982
|
|
-
|
|
9,192
|
|
-
|
Gain on sale of
businesses and assets
|
|
(608)
|
|
(265)
|
|
(645)
|
|
(2,487)
|
Unrealized loss
(gain) on equity securities
|
|
(31)
|
|
38
|
|
103
|
|
408
|
Loss (gain) on
insurance
|
|
-
|
|
93
|
|
(33)
|
|
93
|
Depreciation and
amortization
|
|
2,235
|
|
2,465
|
|
6,696
|
|
6,718
|
Adjusted
EBITDA
|
|
$
(1,904)
|
|
$
12,226
|
|
$
17,973
|
|
$
36,631
|
|
|
|
|
|
|
|
|
|
Reconciliation of
GAAP net income (loss) to non-GAAP net income (loss)
|
|
|
|
|
|
|
|
Net income (loss)
attributable to RCIHH common shareholders
|
|
$
(5,474)
|
|
$
5,638
|
|
$
(3,292)
|
|
$
18,717
|
Amortization of
intangibles
|
|
149
|
|
165
|
|
462
|
|
474
|
Settlement of
lawsuits
|
|
50
|
|
-
|
|
74
|
|
144
|
Impairment of
assets
|
|
982
|
|
-
|
|
9,192
|
|
-
|
Gain on sale of
businesses and assets
|
|
(608)
|
|
(265)
|
|
(645)
|
|
(2,487)
|
Unrealized loss
(gain) on equity securities
|
|
(31)
|
|
38
|
|
103
|
|
408
|
Loss (gain) on
insurance
|
|
-
|
|
93
|
|
(33)
|
|
93
|
Net income tax effect
including rate change
|
|
(1,840)
|
|
(6)
|
|
(2,499)
|
|
327
|
Non-GAAP net income
(loss)
|
|
$
(6,772)
|
|
$
5,663
|
|
$
3,362
|
|
$
17,676
|
|
|
|
|
|
|
|
|
|
Reconciliation of
GAAP diluted earnings (loss) per share to non-GAAP diluted earnings
(loss) per share
|
|
|
Diluted
shares
|
|
9,125
|
|
9,620
|
|
9,224
|
|
9,671
|
GAAP diluted earnings
(loss) per share
|
|
$
(0.60)
|
|
$
0.59
|
|
$
(0.36)
|
|
$
1.94
|
Amortization of
intangibles
|
|
0.02
|
|
0.02
|
|
0.05
|
|
0.05
|
Settlement of
lawsuits
|
|
0.01
|
|
-
|
|
0.01
|
|
0.01
|
Impairment of
assets
|
|
0.11
|
|
-
|
|
1.00
|
|
-
|
Gain on sale of
businesses and assets
|
|
(0.07)
|
|
(0.03)
|
|
(0.07)
|
|
(0.26)
|
Unrealized loss on
equity securities
|
|
(0.00)
|
|
0.00
|
|
0.01
|
|
0.04
|
Loss (gain) on
insurance
|
|
-
|
|
0.01
|
|
(0.00)
|
|
0.01
|
Net income tax effect
including rate change
|
|
(0.20)
|
|
(0.00)
|
|
(0.27)
|
|
0.03
|
Non-GAAP diluted
earnings (loss) per share
|
|
$
(0.74)
|
|
$
0.59
|
|
$
0.36
|
|
$
1.83
|
|
|
|
|
|
|
|
|
|
Reconciliation of
GAAP operating income (loss) to non-GAAP operating income
(loss)
|
|
|
|
|
|
Income (loss) from
operations
|
|
$
(4,657)
|
|
$
9,974
|
|
$
2,554
|
|
$
32,272
|
Amortization of
intangibles
|
|
149
|
|
165
|
|
462
|
|
474
|
Settlement of
lawsuits
|
|
50
|
|
-
|
|
74
|
|
144
|
Impairment of
assets
|
|
982
|
|
-
|
|
9,192
|
|
-
|
Gain on sale of
businesses and assets
|
|
(608)
|
|
(265)
|
|
(645)
|
|
(2,487)
|
Loss (gain) on
insurance
|
|
-
|
|
93
|
|
(33)
|
|
93
|
Non-GAAP operating
income
|
|
$
(4,084)
|
|
$
9,967
|
|
$
11,604
|
|
$
30,496
|
|
|
|
|
|
|
|
|
|
Reconciliation of
GAAP operating margin to non-GAAP operating margin
|
|
|
|
|
|
|
|
GAAP operating
margin
|
|
-31.6%
|
|
21.2%
|
|
2.5%
|
|
23.8%
|
Amortization of
intangibles
|
|
1.0%
|
|
0.4%
|
|
0.4%
|
|
0.3%
|
Settlement of
lawsuits
|
|
0.3%
|
|
0.0%
|
|
0.1%
|
|
0.1%
|
Impairment of
assets
|
|
6.7%
|
|
0.0%
|
|
8.9%
|
|
0.0%
|
Gain on sale of
businesses and assets
|
|
-4.1%
|
|
-0.6%
|
|
-0.6%
|
|
-1.8%
|
Loss (gain) on
insurance
|
|
0.0%
|
|
0.2%
|
|
0.0%
|
|
0.1%
|
Non-GAAP operating
margin
|
|
-27.7%
|
|
21.2%
|
|
11.2%
|
|
22.4%
|
|
|
|
|
|
|
|
|
|
Reconciliation of
net cash provided by operating activities to free cash
flow
|
|
|
|
|
|
|
Net cash provided by
operating activities
|
|
$
166
|
|
$
7,443
|
|
$
12,147
|
|
$
28,414
|
Less: Maintenance
capital expenditures
|
|
-
|
|
955
|
|
2,111
|
|
2,072
|
Free cash
flow
|
|
$
166
|
|
$
6,488
|
|
$
10,036
|
|
$
26,342
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
RCI HOSPITALITY
HOLDINGS, INC.
|
SEGMENT
INFORMATION
|
(in
thousands)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For the Three
Months
|
|
For the Nine
Months
|
|
|
|
Ended June
30,
|
|
Ended June
30,
|
|
|
|
2020
|
|
2019
|
|
2020
|
|
2019
|
Revenues
|
|
|
|
|
|
|
|
|
|
Nightclubs
|
|
$
6,013
|
|
$
37,889
|
|
$
75,239
|
|
$
112,664
|
|
Bombshells
|
|
8,531
|
|
8,755
|
|
27,684
|
|
22,295
|
|
Other
|
|
177
|
|
383
|
|
618
|
|
917
|
|
|
|
$
14,721
|
|
$
47,027
|
|
$
103,541
|
|
$
135,876
|
|
|
|
|
|
|
|
|
|
|
Income (loss) from
operations
|
|
|
|
|
|
|
|
|
|
Nightclubs
|
|
$
(3,088)
|
|
$
14,034
|
|
$
13,002
|
|
$
44,499
|
|
Bombshells
|
|
1,903
|
|
686
|
|
4,166
|
|
1,543
|
|
Other
|
|
(95)
|
|
(111)
|
|
(480)
|
|
(406)
|
|
General
corporate
|
|
(3,377)
|
|
(4,635)
|
|
(14,134)
|
|
(13,364)
|
|
|
|
$
(4,657)
|
|
$
9,974
|
|
$
2,554
|
|
$
32,272
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
RCI HOSPITALITY
HOLDINGS, INC.
|
NON-GAAP SEGMENT
INFORMATION
|
($ in
thousands)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For the Three
Months Ended June 30, 2020
|
|
For the Three
Months Ended June 30, 2019
|
|
|
Nightclubs
|
|
Bombshells
|
|
Other
|
|
Corporate
|
|
Total
|
|
Nightclubs
|
|
Bombshells
|
|
Other
|
|
Corporate
|
|
Total
|
Income (loss) from
operations
|
|
$
(3,088)
|
|
$
1,903
|
|
$
(95)
|
|
$
(3,377)
|
|
$
(4,657)
|
|
$
14,034
|
|
$
686
|
|
$
(111)
|
|
$
(4,635)
|
|
$
9,974
|
Amortization of
intangibles
|
|
49
|
|
3
|
|
96
|
|
-
|
|
148
|
|
-
|
|
-
|
|
-
|
|
165
|
|
165
|
Settlement of
lawsuits
|
|
50
|
|
-
|
|
-
|
|
-
|
|
50
|
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
Impairment of
assets
|
|
982
|
|
-
|
|
-
|
|
-
|
|
982
|
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
Loss (gain) on sale
of businesses and assets
|
|
(619)
|
|
16
|
|
-
|
|
(4)
|
|
(607)
|
|
(260)
|
|
-
|
|
-
|
|
(5)
|
|
(265)
|
Loss (gain) on
insurance
|
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
|
93
|
|
-
|
|
-
|
|
-
|
|
93
|
Non-GAAP operating
income (loss)
|
|
$
(2,626)
|
|
$
1,922
|
|
$
1
|
|
$
(3,381)
|
|
$
(4,084)
|
|
$
13,867
|
|
$
686
|
|
$
(111)
|
|
$
(4,475)
|
|
$
9,967
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP operating
margin
|
|
-51.4%
|
|
22.3%
|
|
-53.7%
|
|
-22.9%
|
|
-31.6%
|
|
37.0%
|
|
7.8%
|
|
-29.0%
|
|
-9.9%
|
|
21.2%
|
Non-GAAP operating
margin
|
|
-43.7%
|
|
22.5%
|
|
0.6%
|
|
-23.0%
|
|
-27.7%
|
|
36.6%
|
|
7.8%
|
|
-29.0%
|
|
-9.5%
|
|
21.2%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For the Nine
Months Ended June 30, 2020
|
|
For the Nine
Months Ended June 30, 2019
|
|
|
Nightclubs
|
|
Bombshells
|
|
Other
|
|
Corporate
|
|
Total
|
|
Nightclubs
|
|
Bombshells
|
|
Other
|
|
Corporate
|
|
Total
|
Income (loss) from
operations
|
|
$
13,002
|
|
$
4,166
|
|
$
(480)
|
|
$
(14,134)
|
|
$
2,554
|
|
$
44,499
|
|
$
1,543
|
|
$
(406)
|
|
$
(13,364)
|
|
$
32,272
|
Amortization of
intangibles
|
|
163
|
|
11
|
|
287
|
|
-
|
|
461
|
|
-
|
|
-
|
|
-
|
|
474
|
|
474
|
Settlement of
lawsuits
|
|
74
|
|
-
|
|
-
|
|
-
|
|
74
|
|
129
|
|
3
|
|
-
|
|
12
|
|
144
|
Impairment of
assets
|
|
8,947
|
|
245
|
|
-
|
|
-
|
|
9,192
|
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
Loss (gain) on sale
of businesses and assets
|
|
(619)
|
|
16
|
|
-
|
|
(41)
|
|
(644)
|
|
(2,412)
|
|
1
|
|
-
|
|
(76)
|
|
(2,487)
|
Loss (gain) on
insurance
|
|
(20)
|
|
-
|
|
-
|
|
(13)
|
|
(33)
|
|
93
|
|
-
|
|
-
|
|
-
|
|
93
|
Non-GAAP operating
income (loss)
|
|
$
21,547
|
|
$
4,438
|
|
$
(193)
|
|
$
(14,188)
|
|
$
11,604
|
|
$
42,309
|
|
$
1,547
|
|
$
(406)
|
|
$
(12,954)
|
|
$
30,496
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP operating
margin
|
|
17.3%
|
|
15.0%
|
|
-77.7%
|
|
-13.7%
|
|
2.5%
|
|
39.5%
|
|
6.9%
|
|
-44.3%
|
|
-9.8%
|
|
23.8%
|
Non-GAAP operating
margin
|
|
28.6%
|
|
16.0%
|
|
-31.2%
|
|
-13.7%
|
|
11.2%
|
|
37.6%
|
|
6.9%
|
|
-44.3%
|
|
-9.5%
|
|
22.4%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
RCI HOSPITALITY
HOLDINGS, INC.
|
CONDENSED
CONSOLIDATED STATEMENTS OF CASH FLOWS
|
(in
thousands)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For the Three
Months Ended
|
|
For the Nine
Months Ended
|
|
|
|
|
June 30,
2020
|
|
June 30,
2019
|
|
June 30,
2020
|
|
June 30,
2019
|
CASH FLOWS FROM
OPERATING ACTIVITIES
|
|
|
|
|
|
|
|
|
Net income
(loss)
|
|
$
(5,568)
|
|
$
5,679
|
|
$
(3,427)
|
|
$
18,826
|
Adjustments to
reconcile net income (loss) to net cash
|
|
|
|
|
|
|
|
|
provided by operating
activities:
|
|
|
|
|
|
|
|
|
|
Depreciation and
amortization
|
|
2,235
|
|
2,465
|
|
6,696
|
|
6,718
|
|
Deferred income tax
expense (benefit)
|
|
(362)
|
|
106
|
|
(1,517)
|
|
1,237
|
|
Gain on sale of
businesses and assets
|
|
(713)
|
|
(507)
|
|
(749)
|
|
(2,704)
|
|
Impairment of
assets
|
|
982
|
|
-
|
|
9,192
|
|
-
|
|
Unrealized loss
(gain) on equity securities
|
|
(31)
|
|
38
|
|
103
|
|
408
|
|
Amortization of debt
discount and issuance costs
|
|
65
|
|
74
|
|
194
|
|
276
|
|
Deferred rent
expense
|
|
-
|
|
47
|
|
-
|
|
236
|
|
Noncash lease
expense
|
|
419
|
|
-
|
|
1,244
|
|
-
|
|
Loss (gain) on
insurance
|
|
-
|
|
93
|
|
(33)
|
|
93
|
|
Doubtful accounts
expense on notes receivable
|
|
495
|
|
-
|
|
495
|
|
-
|
|
Changes in operating
assets and liabilities:
|
|
|
|
|
|
|
|
|
|
|
Accounts
receivable
|
|
(1,970)
|
|
578
|
|
(53)
|
|
2,305
|
|
|
Inventories
|
|
108
|
|
95
|
|
(29)
|
|
(87)
|
|
|
Prepaid expenses,
other current assets and other assets
|
|
2,102
|
|
649
|
|
4,942
|
|
4,199
|
|
|
Accounts payable,
accrued and other liabilities
|
|
2,404
|
|
(1,874)
|
|
(4,911)
|
|
(3,093)
|
|
Net cash provided by
operating activities
|
|
166
|
|
7,443
|
|
12,147
|
|
28,414
|
CASH FLOWS FROM
INVESTING ACTIVITIES
|
|
|
|
|
|
|
|
|
Proceeds from sale of
businesses and assets
|
|
1,936
|
|
2,240
|
|
2,041
|
|
5,106
|
Proceeds from
insurance
|
|
-
|
|
-
|
|
945
|
|
-
|
Proceeds from notes
receivable
|
|
1,152
|
|
39
|
|
1,555
|
|
107
|
Issuance of note
receivable
|
|
-
|
|
-
|
|
-
|
|
(420)
|
Payments for property
and equipment and intangible assets
|
|
(242)
|
|
(2,999)
|
|
(5,565)
|
|
(16,901)
|
Acquisition of
businesses, net of cash acquired
|
|
-
|
|
-
|
|
-
|
|
(13,500)
|
|
Net cash provided by
(used in) investing activities
|
|
2,846
|
|
(720)
|
|
(1,024)
|
|
(25,608)
|
CASH FLOWS FROM
FINANCING ACTIVITIES
|
|
|
|
|
|
|
|
|
Proceeds from debt
obligations
|
|
5,623
|
|
2,034
|
|
6,503
|
|
12,330
|
Payments on debt
obligations
|
|
(3,392)
|
|
(5,347)
|
|
(7,489)
|
|
(18,634)
|
Purchase of treasury
stock
|
|
-
|
|
(403)
|
|
(8,488)
|
|
(2,364)
|
Payment of
dividends
|
|
(273)
|
|
(285)
|
|
(920)
|
|
(867)
|
Payment of loan
origination costs
|
|
-
|
|
-
|
|
-
|
|
(20)
|
Distribution to
noncontrolling interests
|
|
-
|
|
(21)
|
|
(31)
|
|
(21)
|
|
Net provided by (cash
used) in financing activities
|
|
1,958
|
|
(4,022)
|
|
(10,425)
|
|
(9,576)
|
NET INCREASE
(DECREASE) IN CASH AND CASH EQUIVALENTS
|
|
4,970
|
|
2,701
|
|
698
|
|
(6,770)
|
CASH AND CASH
EQUIVALENTS AT BEGINNING OF PERIOD
|
|
9,825
|
|
8,255
|
|
14,097
|
|
17,726
|
CASH AND CASH
EQUIVALENTS AT END OF PERIOD
|
|
$
14,795
|
|
$
10,956
|
|
$
14,795
|
|
$
10,956
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
RCI HOSPITALITY
HOLDINGS, INC.
|
CONDENSED
CONSOLIDATED BALANCE SHEETS
|
(in
thousands)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
June
30,
|
|
September
30,
|
|
June
30,
|
|
|
|
|
|
2020
|
|
2019
|
|
2019
|
ASSETS
|
|
|
|
|
|
|
Current
assets
|
|
|
|
|
|
|
|
Cash and cash
equivalents
|
|
$
14,795
|
|
$
14,097
|
|
$
10,956
|
|
Accounts receivable,
net
|
|
5,529
|
|
6,289
|
|
5,001
|
|
Current portion of
notes receivable
|
|
219
|
|
954
|
|
1,152
|
|
Inventories
|
|
2,627
|
|
2,598
|
|
2,502
|
|
Prepaid
insurance
|
|
1,415
|
|
5,446
|
|
896
|
|
Other current
assets
|
|
1,752
|
|
2,521
|
|
2,090
|
|
Assets held for
sale
|
|
2,013
|
|
2,866
|
|
-
|
|
|
Total current
assets
|
|
28,350
|
|
34,771
|
|
22,597
|
Property and
equipment, net
|
|
181,960
|
|
183,956
|
|
191,493
|
Operating lease
right-of-use assets, net
|
|
25,962
|
|
-
|
|
-
|
Notes receivable, net
of current portion
|
|
2,896
|
|
4,211
|
|
3,810
|
Goodwill
|
|
47,109
|
|
53,630
|
|
55,271
|
Intangibles,
net
|
|
73,224
|
|
75,951
|
|
76,285
|
Other
assets
|
|
873
|
|
1,118
|
|
1,422
|
|
|
|
Total
assets
|
|
$
360,374
|
|
$
353,637
|
|
$
350,878
|
|
|
|
|
|
|
|
|
|
|
LIABILITIES AND
EQUITY
|
|
|
|
|
|
|
Current
liabilities
|
|
|
|
|
|
|
|
Accounts
payable
|
|
$
3,955
|
|
$
3,810
|
|
$
2,544
|
|
Accrued
liabilities
|
|
10,286
|
|
14,644
|
|
9,117
|
|
Current portion of
long-term debt, net
|
|
17,249
|
|
15,754
|
|
16,374
|
|
Current portion of
operating lease liabilities
|
|
1,586
|
|
-
|
|
-
|
|
|
Total current
liabilities
|
|
33,076
|
|
34,208
|
|
28,035
|
Deferred tax
liability, net
|
|
20,141
|
|
21,658
|
|
22,076
|
Long-term debt, net
of current portion and debt discount and issuance costs
|
125,487
|
|
127,774
|
|
130,205
|
Operating lease
liabilities, net of current portion
|
|
25,863
|
|
-
|
|
-
|
Other long-term
liabilities
|
|
372
|
|
1,696
|
|
1,656
|
|
|
Total
liabilities
|
|
204,939
|
|
185,336
|
|
181,972
|
|
|
|
|
|
|
|
|
|
|
Commitments and
contingencies
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Equity
|
|
|
|
|
|
|
|
|
Preferred
stock
|
|
-
|
|
-
|
|
-
|
|
Common
stock
|
|
91
|
|
96
|
|
96
|
|
Additional paid-in
capital
|
|
52,829
|
|
61,312
|
|
61,849
|
|
Retained
earnings
|
|
102,837
|
|
107,049
|
|
106,976
|
|
|
Total RCIHH
stockholders' equity
|
|
155,757
|
|
168,457
|
|
168,921
|
|
Noncontrolling
interests
|
|
(322)
|
|
(156)
|
|
(15)
|
|
|
Total
equity
|
|
155,435
|
|
168,301
|
|
168,906
|
|
|
|
Total liabilities and
equity
|
|
$
360,374
|
|
$
353,637
|
|
$
350,878
|
|
|
|
|
|
|
|
|
|
|
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SOURCE RCI Hospitality Holdings, Inc.