HOUSTON, Dec. 14, 2020 /PRNewswire/ -- RCI Hospitality
Holdings, Inc. (Nasdaq: RICK) today reported results for the fourth
quarter and year ended September 30,
2020 and filed its Form 10-K. Results are not comparable to
year-ago periods due to the COVID-19 pandemic, which has caused
state and local governments to restrict the opening of locations,
occupancy, and operating hours in different ways, at different
times.
Eric Langan, President &
CEO, said: "4Q20 demonstrated our continued progress
managing the effects of COVID-19. This has enabled us to serve our
guests, keep our teams employed, generate free cash flow, and
retain a healthy amount of cash on the balance sheet. Considering
the operating environment, both the Bombshells and Nightclubs
segments exceeded our expectations. A huge thanks goes out to our
loyal customers, dedicated team members, and steadfast investors.
Looking ahead, we're actively pursuing several club acquisitions.
We're in various stages of site acquisition and development of 'The
Next 10' Bombshells, and we believe we are well-positioned to
benefit from the positive effects COVID-19 vaccines could create
for our businesses over the course of FY21 and beyond."
4Q20 Key Points
- Total revenues of $28.8 million,
up 96% from 3Q20 and equal to 64% of 4Q19 revenues
- Record quarterly Bombshells revenues of $15.5 million, up 82% from 3Q20, with record
operating margin of 32.7%
- Nightclubs revenues of $13.1
million, up 118% from 3Q20
- Net cash from operating activities of $3.5 million and free cash flow* of $3.4 million
- GAAP EPS (loss) of ($0.31) and
non-GAAP EPS of $0.15
- $15.6 million cash and cash
equivalents at September 30,
2020
FY20 Key Points
- Total revenues of $132.3
million
- Net cash from operating activities of $15.6 million and free cash flow of $13.5 million
- GAAP EPS (loss) of ($0.66) and
non-GAAP EPS of $0.51
- Common shares outstanding at September
30, 2020 of 9.075 million vs. 9.591 million a year ago
1Q21 Update
- Sales for clubs and restaurants are expected to total
$35 million to $37 million, assuming no additional
closings/restrictions
- Currently, 36 locations open (26 clubs and all 10
Bombshells)
- As of today, RCI has approximately $18
million cash and cash equivalents on hand
Conference Call Tuesday at 9 AM
ET
- Live Participant Phone Number: Toll Free 877-407-9210,
International 201-689-8049
- Access the live webcast, slides or replay here:
https://www.webcaster4.com/Webcast/Page/2209/39008
- Phone replay: Toll Free 877-481-4010, International
919-882-2331, Passcode: 39008
Note
As of the release of this report, we do not know the future
extent and duration of the COVID-19 pandemic on our businesses.
Lower sales caused by social distancing guidelines could lead to
adverse financial results. We are continually monitoring and
evaluating the situation and will determine any further measures to
be instituted, which could include refinancing several of our debt
obligations.
All references to the "company," "we," "our," and similar terms
include RCI Hospitality Holdings, Inc. and its subsidiaries, unless
the context indicates otherwise.
4Q20 Statement of Operations (All comparisons are to
4Q19)
- Consolidated revenues of $28.8
million compared to $45.2
million. By segment, Bombshells generated $15.5 million compared to $8.5 million, and Nightclubs generated
$13.1 million compared to
$35.9 million.
- 24 of 48 locations (8 Bombshells and 16 clubs) were open
throughout most of the quarter. By period end, 44 locations (all 10
Bombshells and 34 clubs) were open.
- Cost of goods sold was 15.6% vs. 13.8% of revenues due to the
change in mix, reflecting a higher proportion of food and a lower
proportion of service revenues.
- Salaries and wages were 28.5% vs. 28.0% of revenues, reflecting
effective labor cost management in the face of the changing
COVID-19 environment.
- SG&A was 41.0% vs. 36.8% of revenues and D&A was 7.4%
vs. 5.2%, largely reflecting fixed costs on a lower revenue base,
with the effect on SG&A partially offset by cost-cutting.
- Net other charges of $2.0
million, most of which were non-cash, primarily reflected
$1.4 million in additional COVID-19
club impairment and a $453K loss
primarily related to hurricane damage at a small Louisiana club which is expected to be covered
by insurance.
- Bombshells segment had both record setting $5.1 million operating income at a 32.7% margin
on a higher level of sales and more consistent occupancy while
operating in line with indoor restrictions.
- Nightclubs segment had a breakeven performance primarily due to
the above mentioned $1.9 million in
net other charges. On a non-GAAP basis, Nightclubs had a
$2.1 million operating profit at a
16.1% margin.
- Interest expense was 3.7% lower due to debt paydowns prior to
and during 4Q20.
- Income tax was a $769K expense,
which included a non-cash $1.3
million expense for recognizing a deferred tax asset
valuation allowance.
September 30, 2020 Balance
Sheet (All comparisons are to June 30,
2020)
- Cash and cash equivalents of $15.6
million compared to $14.8
million.
- Debt of $141.4 million compared
to $142.7 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 loss on equity securities, (g) settlement of lawsuits,
(h) the income tax effect of the above described adjustments, and
(i) deferred tax asset valuation allowance. Included in the income
tax effect of the above adjustments is the net effect of the
non-GAAP provision for income taxes, calculated at 26.0%, 15.5%,
and 24.5% effective tax rate of the pre-tax non-GAAP income before
taxes for the 2020, 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. The calculated amount for
adjustment (h) 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 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)
impairment of assets, 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 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.
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) the impact of the COVID-19
pandemic, and (vii) 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, 2020 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
RCI HOSPITALITY
HOLDINGS, INC.
|
CONSOLIDATED
STATEMENTS OF OPERATIONS
|
(in thousands, except
per share and percentage data)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For the Three
Months Ended September 30,
|
|
For the Twelve
Months Ended September 30,
|
|
|
|
|
|
2020
|
|
2019
|
|
2020
|
|
2019
|
|
|
|
|
|
Amount
|
|
% of
Revenue
|
|
Amount
|
|
% of
Revenue
|
|
Amount
|
|
% of
Revenue
|
|
Amount
|
|
% of
Revenue
|
Revenues
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Sales of alcoholic
beverages
|
|
$
13,795
|
|
47.9%
|
|
$
18,774
|
|
41.6%
|
|
$
59,080
|
|
44.6%
|
|
$
75,140
|
|
41.5%
|
|
Sales of food and
merchandise
|
|
7,082
|
|
24.6%
|
|
6,655
|
|
14.7%
|
|
24,460
|
|
18.5%
|
|
25,830
|
|
14.3%
|
|
Service
revenues
|
|
6,714
|
|
23.3%
|
|
16,446
|
|
36.4%
|
|
41,162
|
|
31.1%
|
|
68,055
|
|
37.6%
|
|
Other
|
|
1,195
|
|
4.2%
|
|
3,308
|
|
7.3%
|
|
7,625
|
|
5.8%
|
|
12,034
|
|
6.6%
|
|
|
Total
revenues
|
|
28,786
|
|
100.0%
|
|
45,183
|
|
100.0%
|
|
132,327
|
|
100.0%
|
|
181,059
|
|
100.0%
|
Operating
expenses
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost of goods
sold
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Alcoholic beverages
sold
|
|
2,271
|
|
16.5%
|
|
3,762
|
|
20.0%
|
|
11,097
|
|
18.8%
|
|
15,303
|
|
20.4%
|
|
|
Food and merchandise
sold
|
|
2,154
|
|
30.4%
|
|
2,199
|
|
33.0%
|
|
8,071
|
|
33.0%
|
|
9,056
|
|
35.1%
|
|
|
Service and
other
|
|
62
|
|
0.8%
|
|
271
|
|
1.4%
|
|
267
|
|
0.5%
|
|
578
|
|
0.7%
|
|
|
|
Total cost of goods
sold (exclusive of items shown below)
|
|
4,487
|
|
15.6%
|
|
6,232
|
|
13.8%
|
|
19,435
|
|
14.7%
|
|
24,937
|
|
13.8%
|
|
Salaries and
wages
|
|
8,204
|
|
28.5%
|
|
12,665
|
|
28.0%
|
|
39,070
|
|
29.5%
|
|
49,833
|
|
27.5%
|
|
Selling, general and
administrative
|
|
11,803
|
|
41.0%
|
|
16,633
|
|
36.8%
|
|
51,692
|
|
39.1%
|
|
59,896
|
|
33.1%
|
|
Depreciation and
amortization
|
|
2,140
|
|
7.4%
|
|
2,354
|
|
5.2%
|
|
8,836
|
|
6.7%
|
|
9,072
|
|
5.0%
|
|
Other charges
(gains), net
|
|
1,960
|
|
6.8%
|
|
4,870
|
|
10.8%
|
|
10,548
|
|
8.0%
|
|
2,620
|
|
1.4%
|
|
|
Total operating
expenses
|
|
28,594
|
|
99.3%
|
|
42,754
|
|
94.6%
|
|
129,581
|
|
97.9%
|
|
146,358
|
|
80.8%
|
Income (loss) from
operations
|
|
192
|
|
0.7%
|
|
2,429
|
|
5.4%
|
|
2,746
|
|
2.1%
|
|
34,701
|
|
19.2%
|
Other income
(expenses)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest
expense
|
|
(2,408)
|
|
-8.4%
|
|
(2,500)
|
|
-5.5%
|
|
(9,811)
|
|
-7.4%
|
|
(10,209)
|
|
-5.6%
|
|
Interest
income
|
|
61
|
|
0.2%
|
|
91
|
|
0.2%
|
|
324
|
|
0.2%
|
|
309
|
|
0.2%
|
|
Unrealized gain
(loss) on equity securities
|
|
39
|
|
0.1%
|
|
(204)
|
|
-0.5%
|
|
(64)
|
|
0.0%
|
|
(612)
|
|
-0.3%
|
Income (loss) before
income taxes
|
|
(2,116)
|
|
-7.4%
|
|
(184)
|
|
-0.4%
|
|
(6,805)
|
|
-5.1%
|
|
24,189
|
|
13.4%
|
Income tax expense
(benefit)
|
|
769
|
|
2.7%
|
|
(684)
|
|
-1.5%
|
|
(493)
|
|
-0.4%
|
|
3,744
|
|
2.1%
|
Net income
(loss)
|
|
(2,885)
|
|
-10.0%
|
|
500
|
|
1.1%
|
|
(6,312)
|
|
-4.8%
|
|
20,445
|
|
11.3%
|
Net loss (income)
attributable to noncontrolling interests
|
|
92
|
|
0.3%
|
|
(42)
|
|
-0.1%
|
|
227
|
|
0.2%
|
|
(151)
|
|
-0.1%
|
Net income (loss)
attributable to RCIHH common shareholders
|
|
$
(2,793)
|
|
-9.7%
|
|
$
458
|
|
1.0%
|
|
$
(6,085)
|
|
-4.6%
|
|
$
20,294
|
|
11.2%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings (loss) per
share
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic and
diluted
|
|
$
(0.31)
|
|
|
|
$
0.05
|
|
|
|
$
(0.66)
|
|
|
|
$
2.10
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average
shares outstanding
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic and
diluted
|
|
9,124
|
|
|
|
9,616
|
|
|
|
9,199
|
|
|
|
9,657
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Dividends per
share
|
|
$
0.04
|
|
|
|
$
0.03
|
|
|
|
$
0.14
|
|
|
|
$
0.13
|
|
|
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,
|
|
|
2020
|
|
2019
|
|
2020
|
|
2019
|
Reconciliation of
GAAP net income (loss) to Adjusted EBITDA
|
|
|
|
|
|
|
|
|
Net income (loss)
attributable to RCIHH common stockholders
|
|
$ (2,793)
|
|
$
458
|
|
$
(6,085)
|
|
$
20,294
|
Income tax expense
(benefit)
|
|
769
|
|
(684)
|
|
(493)
|
|
3,744
|
Interest expense,
net
|
|
2,347
|
|
2,409
|
|
9,487
|
|
9,900
|
Settlement of
lawsuits
|
|
100
|
|
81
|
|
174
|
|
225
|
Impairment of
assets
|
|
1,423
|
|
6,040
|
|
10,615
|
|
6,040
|
Gain on sale of
businesses and assets
|
|
(16)
|
|
(390)
|
|
(661)
|
|
(2,877)
|
Unrealized loss
(gain) on equity securities
|
|
(39)
|
|
204
|
|
64
|
|
612
|
Loss (gain) on
insurance
|
|
453
|
|
(861)
|
|
420
|
|
(768)
|
Depreciation and
amortization
|
|
2,140
|
|
2,354
|
|
8,836
|
|
9,072
|
Adjusted
EBITDA
|
|
$
4,384
|
|
$
9,611
|
|
$
22,357
|
|
$
46,242
|
|
|
|
|
|
|
|
|
|
Reconciliation of
GAAP net income (loss) to non-GAAP net income
|
|
|
|
|
|
|
|
|
Net income (loss)
attributable to RCIHH common stockholders
|
|
$ (2,793)
|
|
$
458
|
|
$
(6,085)
|
|
$
20,294
|
Amortization of
intangibles
|
|
148
|
|
150
|
|
609
|
|
624
|
Settlement of
lawsuits
|
|
100
|
|
81
|
|
174
|
|
225
|
Impairment of
assets
|
|
1,423
|
|
6,040
|
|
10,615
|
|
6,040
|
Gain on sale of
businesses and assets
|
|
(17)
|
|
(390)
|
|
(661)
|
|
(2,877)
|
Unrealized loss
(gain) on equity securities
|
|
(39)
|
|
204
|
|
64
|
|
612
|
Loss (gain) on
insurance
|
|
453
|
|
(861)
|
|
420
|
|
(768)
|
Valuation
allowance
|
|
1,273
|
|
-
|
|
1,273
|
|
-
|
Net income tax
effect
|
|
799
|
|
212
|
|
(1,700)
|
|
(580)
|
Non-GAAP net
income
|
|
$
1,347
|
|
$
5,894
|
|
$
4,709
|
|
$
23,570
|
|
|
|
|
|
|
|
|
|
Reconciliation of
GAAP diluted earnings (loss) per share to non-GAAP diluted earnings
per share
|
|
|
Diluted
shares
|
|
9,124
|
|
9,616
|
|
9,199
|
|
9,657
|
GAAP diluted earnings
(loss) per share
|
|
$
(0.31)
|
|
$
0.05
|
|
$
(0.66)
|
|
$
2.10
|
Amortization of
intangibles
|
|
0.02
|
|
0.02
|
|
0.07
|
|
0.06
|
Settlement of
lawsuits
|
|
0.01
|
|
0.01
|
|
0.02
|
|
0.02
|
Impairment of
assets
|
|
0.16
|
|
0.63
|
|
1.15
|
|
0.63
|
Gain on sale of
businesses and assets
|
|
(0.00)
|
|
(0.04)
|
|
(0.07)
|
|
(0.30)
|
Unrealized loss
(gain) on equity securities
|
|
(0.00)
|
|
0.02
|
|
0.01
|
|
0.06
|
Loss (gain) on
insurance
|
|
0.05
|
|
(0.09)
|
|
0.05
|
|
(0.08)
|
Valuation
allowance
|
|
0.14
|
|
-
|
|
0.14
|
|
-
|
Net income tax
effect
|
|
0.09
|
|
0.02
|
|
(0.18)
|
|
(0.06)
|
Non-GAAP diluted
earnings per share
|
|
$
0.15
|
|
$
0.61
|
|
$
0.51
|
|
$
2.44
|
|
|
|
|
|
|
|
|
|
Reconciliation of
GAAP operating income to non-GAAP operating income
|
|
|
|
|
|
|
Income from
operations
|
|
$
192
|
|
$
2,429
|
|
$
2,746
|
|
$
34,701
|
Amortization of
intangibles
|
|
148
|
|
150
|
|
609
|
|
624
|
Settlement of
lawsuits
|
|
100
|
|
81
|
|
174
|
|
225
|
Impairment of
assets
|
|
1,423
|
|
6,040
|
|
10,615
|
|
6,040
|
Gain on sale of
businesses and assets
|
|
(17)
|
|
(390)
|
|
(661)
|
|
(2,877)
|
Loss (gain) on
insurance
|
|
453
|
|
(861)
|
|
420
|
|
(768)
|
Non-GAAP operating
income
|
|
$
2,299
|
|
$
7,449
|
|
$
13,903
|
|
$
37,945
|
|
|
|
|
|
|
|
|
|
Reconciliation of
GAAP operating margin to non-GAAP operating margin
|
|
|
|
|
|
|
|
GAAP operating
margin
|
|
0.7%
|
|
5.4%
|
|
2.1%
|
|
19.2%
|
Amortization of
intangibles
|
|
0.5%
|
|
0.3%
|
|
0.5%
|
|
0.3%
|
Settlement of
lawsuits
|
|
0.3%
|
|
0.2%
|
|
0.1%
|
|
0.1%
|
Impairment of
assets
|
|
4.9%
|
|
13.4%
|
|
8.0%
|
|
3.3%
|
Gain on sale of
businesses and assets
|
|
-0.1%
|
|
-0.9%
|
|
-0.5%
|
|
-1.6%
|
Loss (gain) on
insurance
|
|
1.6%
|
|
-1.9%
|
|
0.3%
|
|
-0.4%
|
Non-GAAP operating
margin
|
|
8.0%
|
|
16.5%
|
|
10.5%
|
|
21.0%
|
|
|
|
|
|
|
|
|
|
Reconciliation of
net cash provided by operating activities to free cash
flow
|
|
|
|
|
|
|
Net cash provided by
operating activities
|
|
$
3,485
|
|
$
7,641
|
|
$
15,632
|
|
$
37,174
|
Less: Maintenance
capital expenditures
|
|
40
|
|
1,786
|
|
2,151
|
|
3,858
|
Free cash
flow
|
|
$
3,445
|
|
$
5,855
|
|
$
13,481
|
|
$
33,316
|
RCI HOSPITALITY
HOLDINGS, INC.
|
SEGMENT
INFORMATION
|
(in
thousands)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For the Three
Months
|
|
For the Twelve
Months
|
|
|
|
Ended September
30,
|
|
Ended September
30,
|
|
|
|
2020
|
|
2019
|
|
2020
|
|
2019
|
Revenues
|
|
|
|
|
|
|
|
|
|
Nightclubs
|
|
$
13,134
|
|
$
35,942
|
|
$
88,373
|
|
$
148,606
|
|
Bombshells
|
|
15,531
|
|
8,533
|
|
43,215
|
|
30,828
|
|
Other
|
|
121
|
|
708
|
|
739
|
|
1,625
|
|
|
|
$
28,786
|
|
$
45,183
|
|
$
132,327
|
|
$
181,059
|
|
|
|
|
|
|
|
|
|
|
Income (loss) from
operations
|
|
|
|
|
|
|
|
|
|
Nightclubs
|
|
$
116
|
|
$
6,225
|
|
$
13,118
|
|
$
50,724
|
|
Bombshells
|
|
5,079
|
|
764
|
|
9,245
|
|
2,307
|
|
Other
|
|
(204)
|
|
97
|
|
(684)
|
|
(309)
|
|
General
corporate
|
|
(4,799)
|
|
(4,657)
|
|
(18,933)
|
|
(18,021)
|
|
|
|
$
192
|
|
$
2,429
|
|
$
2,746
|
|
$
34,701
|
RCI HOSPITALITY
HOLDINGS, INC.
|
NON-GAAP SEGMENT
INFORMATION
|
($ in
thousands)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For the Three
Months Ended September 30, 2020
|
|
For the Three
Months Ended September 30, 2019
|
|
|
Nightclubs
|
|
Bombshells
|
|
Other
|
|
Corporate
|
|
Total
|
|
Nightclubs
|
|
Bombshells
|
|
Other
|
|
Corporate
|
|
Total
|
Income (loss) from
operations
|
|
$
116
|
|
$
5,079
|
|
$
(204)
|
|
$
(4,799)
|
|
$
192
|
|
$
6,225
|
|
$
764
|
|
$
97
|
|
$
(4,657)
|
|
$
2,429
|
Amortization of
intangibles
|
|
48
|
|
4
|
|
96
|
|
-
|
|
148
|
|
-
|
|
-
|
|
-
|
|
150
|
|
150
|
Settlement of
lawsuits
|
|
100
|
|
-
|
|
-
|
|
-
|
|
100
|
|
40
|
|
-
|
|
-
|
|
41
|
|
81
|
Impairment of
assets
|
|
1,423
|
|
-
|
|
-
|
|
-
|
|
1,423
|
|
5,920
|
|
-
|
|
-
|
|
120
|
|
6,040
|
Loss (gain) on sale
of businesses and assets
|
|
(20)
|
|
-
|
|
-
|
|
3
|
|
(17)
|
|
(446)
|
|
26
|
|
-
|
|
30
|
|
(390)
|
Loss (gain) on
insurance
|
|
453
|
|
-
|
|
-
|
|
-
|
|
453
|
|
(747)
|
|
-
|
|
-
|
|
(114)
|
|
(861)
|
Non-GAAP operating
income (loss)
|
|
$
2,120
|
|
$
5,083
|
|
$
(108)
|
|
$
(4,796)
|
|
$
2,299
|
|
$
10,992
|
|
$
790
|
|
$
97
|
|
$
(4,430)
|
|
$
7,449
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP operating
margin
|
|
0.9%
|
|
32.7%
|
|
-168.6%
|
|
-16.7%
|
|
0.7%
|
|
17.3%
|
|
9.0%
|
|
13.7%
|
|
-10.3%
|
|
5.4%
|
Non-GAAP operating
margin
|
|
16.1%
|
|
32.7%
|
|
-89.3%
|
|
-16.7%
|
|
8.0%
|
|
30.6%
|
|
9.3%
|
|
13.7%
|
|
-9.8%
|
|
16.5%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For the Twelve
Months Ended September 30, 2020
|
|
For the Twelve
Months Ended September 30, 2019
|
|
|
Nightclubs
|
|
Bombshells
|
|
Other
|
|
Corporate
|
|
Total
|
|
Nightclubs
|
|
Bombshells
|
|
Other
|
|
Corporate
|
|
Total
|
Income (loss) from
operations
|
|
$
13,118
|
|
$
9,245
|
|
$
(684)
|
|
$ (18,933)
|
|
$
2,746
|
|
$
50,724
|
|
$
2,307
|
|
$ (309)
|
|
$ (18,021)
|
|
$
34,701
|
Amortization of
intangibles
|
|
211
|
|
15
|
|
383
|
|
-
|
|
609
|
|
-
|
|
-
|
|
-
|
|
624
|
|
624
|
Settlement of
lawsuits
|
|
174
|
|
-
|
|
-
|
|
-
|
|
174
|
|
169
|
|
3
|
|
-
|
|
53
|
|
225
|
Impairment of
assets
|
|
10,370
|
|
245
|
|
-
|
|
-
|
|
10,615
|
|
5,920
|
|
-
|
|
-
|
|
120
|
|
6,040
|
Loss (gain) on sale
of businesses and assets
|
|
(639)
|
|
16
|
|
-
|
|
(38)
|
|
(661)
|
|
(2,858)
|
|
27
|
|
-
|
|
(46)
|
|
(2,877)
|
Loss (gain) on
insurance
|
|
433
|
|
-
|
|
-
|
|
(13)
|
|
420
|
|
(654)
|
|
-
|
|
-
|
|
(114)
|
|
(768)
|
Non-GAAP operating
income (loss)
|
|
$
23,667
|
|
$
9,521
|
|
$
(301)
|
|
$ (18,984)
|
|
$
13,903
|
|
$
53,301
|
|
$
2,337
|
|
$ (309)
|
|
$ (17,384)
|
|
$
37,945
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP operating
margin
|
|
14.8%
|
|
21.4%
|
|
-92.6%
|
|
-14.3%
|
|
2.1%
|
|
34.1%
|
|
7.5%
|
|
-19.0%
|
|
-10.0%
|
|
19.2%
|
Non-GAAP operating
margin
|
|
26.8%
|
|
22.0%
|
|
-40.7%
|
|
-14.3%
|
|
10.5%
|
|
35.9%
|
|
7.6%
|
|
-19.0%
|
|
-9.6%
|
|
21.0%
|
RCI HOSPITALITY
HOLDINGS, INC.
|
CONSOLIDATED
STATEMENTS OF CASH FLOWS
|
(in
thousands)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For the Three
Months Ended
|
|
For the Twelve
Months Ended
|
|
|
|
|
September 30,
2020
|
|
September 30,
2019
|
|
September 30,
2020
|
|
September 30,
2019
|
CASH FLOWS FROM
OPERATING ACTIVITIES
|
|
|
|
|
|
|
|
|
Net income
(loss)
|
|
$
(2,885)
|
|
$
500
|
|
$
(6,312)
|
|
$
20,445
|
Adjustments to
reconcile net income (loss) to net cash
|
|
|
|
|
|
|
|
|
provided by operating
activities:
|
|
|
|
|
|
|
|
|
|
Depreciation and
amortization
|
|
2,140
|
|
2,354
|
|
8,836
|
|
9,072
|
|
Deferred income tax
expense (benefit)
|
|
249
|
|
(416)
|
|
(1,268)
|
|
821
|
|
Gain on sale of
businesses and assets
|
|
(28)
|
|
(262)
|
|
(777)
|
|
(2,966)
|
|
Impairment of
assets
|
|
1,423
|
|
6,040
|
|
10,615
|
|
6,040
|
|
Unrealized loss
(gain) on equity securities
|
|
(39)
|
|
204
|
|
64
|
|
612
|
|
Amortization of debt
discount and issuance costs
|
|
42
|
|
58
|
|
236
|
|
334
|
|
Deferred rent
expense
|
|
-
|
|
46
|
|
-
|
|
282
|
|
Noncash lease
expense
|
|
416
|
|
-
|
|
1,660
|
|
-
|
|
Loss (gain) on
insurance
|
|
629
|
|
(381)
|
|
596
|
|
(288)
|
|
Doubtful accounts
expense on notes receivable
|
|
107
|
|
-
|
|
602
|
|
-
|
|
Changes in operating
assets and liabilities:
|
|
|
|
|
|
|
|
|
|
|
Accounts
receivable
|
|
(241)
|
|
(1,848)
|
|
(294)
|
|
457
|
|
|
Inventories
|
|
255
|
|
(129)
|
|
226
|
|
(216)
|
|
|
Prepaid expenses,
other current assets and other assets
|
|
(3,309)
|
|
(4,880)
|
|
1,633
|
|
(681)
|
|
|
Accounts payable,
accrued and other liabilities
|
|
4,726
|
|
6,355
|
|
(185)
|
|
3,262
|
|
Net cash provided by
operating activities
|
|
3,485
|
|
7,641
|
|
15,632
|
|
37,174
|
CASH FLOWS FROM
INVESTING ACTIVITIES
|
|
|
|
|
|
|
|
|
Proceeds from sale of
businesses and assets
|
|
180
|
|
2,117
|
|
2,221
|
|
7,223
|
Proceeds from
insurance
|
|
-
|
|
100
|
|
945
|
|
100
|
Proceeds from notes
receivable
|
|
21
|
|
51
|
|
1,576
|
|
158
|
Issuance of note
receivable
|
|
-
|
|
-
|
|
-
|
|
(420)
|
Payments for property
and equipment and intangible assets
|
|
(171)
|
|
(3,807)
|
|
(5,736)
|
|
(20,708)
|
Acquisition of
businesses, net of cash acquired
|
|
-
|
|
-
|
|
-
|
|
(13,500)
|
|
Net cash provided by
(used in) investing activities
|
|
30
|
|
(1,539)
|
|
(994)
|
|
(27,147)
|
CASH FLOWS FROM
FINANCING ACTIVITIES
|
|
|
|
|
|
|
|
|
Proceeds from debt
obligations
|
|
-
|
|
1,181
|
|
6,503
|
|
13,511
|
Payments on debt
obligations
|
|
(1,343)
|
|
(4,290)
|
|
(8,832)
|
|
(22,924)
|
Purchase of treasury
stock
|
|
(996)
|
|
(537)
|
|
(9,484)
|
|
(2,901)
|
Payment of
dividends
|
|
(366)
|
|
(385)
|
|
(1,286)
|
|
(1,252)
|
Payment of loan
origination costs
|
|
-
|
|
-
|
|
-
|
|
(20)
|
Distribution to
noncontrolling interests
|
|
-
|
|
(49)
|
|
(31)
|
|
(70)
|
|
Net cash used in
financing activities
|
|
(2,705)
|
|
(4,080)
|
|
(13,130)
|
|
(13,656)
|
NET INCREASE
(DECREASE) IN CASH AND CASH EQUIVALENTS
|
|
810
|
|
2,022
|
|
1,508
|
|
(3,629)
|
CASH AND CASH
EQUIVALENTS AT BEGINNING OF PERIOD
|
|
14,795
|
|
10,956
|
|
14,097
|
|
17,726
|
CASH AND CASH
EQUIVALENTS AT END OF PERIOD
|
|
$
15,605
|
|
$
12,978
|
|
$
15,605
|
|
$
14,097
|
RCI HOSPITALITY
HOLDINGS, INC.
|
CONSOLIDATED
BALANCE SHEETS
|
(in
thousands)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
September
30,
|
|
September
30,
|
|
|
|
|
|
2020
|
|
2019
|
ASSETS
|
|
|
|
|
Current
assets
|
|
|
|
|
|
Cash and cash
equivalents
|
|
$
15,605
|
|
$
14,097
|
|
Accounts receivable,
net
|
|
6,767
|
|
7,408
|
|
Current portion of
notes receivable
|
|
201
|
|
954
|
|
Inventories
|
|
2,372
|
|
2,598
|
|
Prepaid
insurance
|
|
4,884
|
|
5,446
|
|
Other current
assets
|
|
1,604
|
|
2,521
|
|
Assets held for
sale
|
|
-
|
|
2,866
|
|
|
Total current
assets
|
|
31,433
|
|
35,890
|
Property and
equipment, net
|
|
181,383
|
|
183,956
|
Operating lease
right-of-use assets, net
|
|
25,546
|
|
-
|
Notes receivable, net
of current portion
|
|
2,908
|
|
4,211
|
Goodwill
|
|
45,686
|
|
53,630
|
Intangibles,
net
|
|
73,077
|
|
75,951
|
Other
assets
|
|
900
|
|
1,118
|
|
|
|
Total
assets
|
|
$
360,933
|
|
$
354,756
|
|
|
|
|
|
|
|
|
LIABILITIES AND
EQUITY
|
|
|
|
|
Current
liabilities
|
|
|
|
|
|
Accounts
payable
|
|
$
4,799
|
|
$
3,810
|
|
Accrued
liabilities
|
|
14,573
|
|
14,644
|
|
Current portion of
long-term debt, net
|
|
16,304
|
|
15,754
|
|
Current portion of
operating lease liabilities
|
|
1,628
|
|
-
|
|
|
Total current
liabilities
|
|
37,304
|
|
34,208
|
Deferred tax
liability, net
|
|
20,390
|
|
21,658
|
Long-term debt, net
of current portion and debt discount and issuance costs
|
|
125,131
|
|
127,774
|
Operating lease
liabilities, net of current portion
|
|
25,439
|
|
-
|
Other long-term
liabilities
|
|
362
|
|
1,696
|
|
|
Total
liabilities
|
|
208,626
|
|
185,336
|
|
|
|
|
|
|
|
|
Commitments and
contingencies
|
|
|
|
|
|
|
|
|
|
|
|
|
Equity
|
|
|
|
|
|
|
Preferred
stock
|
|
-
|
|
-
|
|
Common
stock
|
|
91
|
|
96
|
|
Additional paid-in
capital
|
|
51,833
|
|
61,312
|
|
Retained
earnings
|
|
100,797
|
|
108,168
|
|
|
Total RCIHH
stockholders' equity
|
|
152,721
|
|
169,576
|
|
Noncontrolling
interests
|
|
(414)
|
|
(156)
|
|
|
Total
equity
|
|
152,307
|
|
169,420
|
|
|
|
Total liabilities and
equity
|
|
$
360,933
|
|
$
354,756
|
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SOURCE RCI Hospitality Holdings, Inc.