HOUSTON, May 10, 2021 /PRNewswire/ -- RCI Hospitality
Holdings, Inc. (Nasdaq: RICK) today reported results for the fiscal
2021 second quarter ended March 31,
2021 and filed its Form 10-Q.
Highlights (all comparisons in this news release are
2Q21 vs. 2Q20 unless otherwise noted)
- GAAP EPS of $0.68 compared to
($0.37)
- Non-GAAP* EPS of $0.75 compared
to $0.47
- GAAP results included a $1.4
million impairment and $431,000 net non-operating gain (both
pre-tax)
- Net cash from operating activities of $11.0 million and free cash flow* of $9.0 million
- $20.2 million cash and cash
equivalents on March 31, 2021
- Total revenues of $44.1 million
(+9.0%)
- Nightclubs segment revenues of $30.8
million with 34.0% operating margin (38.8% non-GAAP)
- Bombshells segment revenues of $13.1
million with 23.9% operating margin (24.3% non-GAAP)
Eric Langan, President &
CEO, said: "2Q21 reflected a continued rebound in
financial performance through the COVID-19 pandemic. Nightclubs had
their best overall performance since the pandemic began. Bombshells
served up another strong quarter. This enabled us to keep our teams
employed and generate higher levels of free cash flow and
profitability. Once again, we thank our loyal customers, dedicated
team members, and steadfast investors.
"We hope these trends continue as the COVID-19 situation
continues to improve. As of today, 36 clubs and 10 Bombshells are
open. Nightclubs and Bombshells sales exceeded $18 million in April. Restrictive curfews, which
have affected many of our northern clubs, are beginning to end.
Minnesota, where we have three
clubs, lifted its 11 PM curfew on
Friday. New York, where we have
three clubs, plans to eliminate its midnight curfew May 31. We hope the curfew in Chicago, where we have one club, will be
lifted soon."
Conference Call Today at 4:30 PM
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/2209/41190
- Phone replay: Toll Free
877-481-4010, International 919-882-2331, Passcode: 41190
Nightclubs Segment
- Revenue was $30.8 million (-1.8%)
with same-store sales +3.6%.
- Cost of goods sold was 12.3% of segment revenue compared to
11.3% due to a lower proportion of service revenues, while other
expenses in aggregate declined.
- Segment profitability increased to $10.5
million from $2.3 million.
GAAP operating margin expanded to 34.0% from 7.3% in 2Q20. There
were $1.4 million and $8.0 million of impairments, respectively, in
2Q21 and 2Q20.
- On a non-GAAP basis, profitability increased to $12.0 million (+16.1%) as operating margin
expanded to 38.8% from 32.8%. This is the segment's best
performance since 2Q20, when the COVID-19 pandemic was declared
mid-March 2020.
- During 2Q21, 29 of 38 clubs were open for the full quarter and
37 by period-end with 21 closed for several days in mid-February
due to the Texas Freeze. Most locations limited occupancy
voluntarily or in accordance with coronavirus safety plans. Not all
clubs operated at full schedules in line with local government
restrictions, although curfews became less restrictive,
particularly in March. Currently, two clubs are temporarily
closed.
- During 2Q20, all 38 clubs were closed in mid-March 2020 as local and state restrictions
went into effect.
Bombshells Segment
- Bombshells revenue was $13.1
million (+49.2%) with same-store sales +48.7%.
- Cost of goods sold was 22.8% of segment revenue compared to
24.7% due to higher revenue and lower cost of goods, while other
expenses in aggregate as a percent of revenues also declined.
- Segment profitability increased to $3.1
million (+356.7%). GAAP operating margin expanded to 23.9%
from 7.8%. On a non-GAAP basis, profitability increased to
$3.2 million (+240.7%) as operating
margin expanded to 24.3% from 10.6%.
- During 2Q21, all 10 Bombshells were open with the exception of
several days due to the Texas Freeze. Capacity increased from 75%
to 100% in mid-March.
- During 2Q20, the nine existing Bombshells at the start of the
quarter and a new location, which opened late January 2020, were closed in mid-March as
restrictions went into effect.
Consolidated
- Salaries and wages were 25.4% of revenues compared to
30.2%.
- SG&A was 28.6% of revenues compared to 35.7%.
- The improvements reflected better Nightclubs and Bombshells
segment margins, cost-saving initiatives, and lower audit and legal
fees as compared to the prior year.
- Other charges, net, reflected the above-mentioned impairments
in the Nightclubs segment.
- Interest expense decreased 3.9% primarily due to lower debt
balances.
- Non-operating gains of $431,000
pre-tax were primarily due to debt extinguishment of forgiven
loans.
- Debt was $132.4 million at
3/31/21 compared to $134.8 million at 12/31/20. This reflected
regular paydowns and debt extinguishment.
Note
- As of the release of this report, we do not know the future
extent and duration of the impact of COVID-19 on our businesses.
Lower sales, as caused by local, state and national guidelines,
could lead to adverse financial results. However, we will
continually monitor and evaluate our cash flow situation and will
determine any further measures to be instituted, including
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.
*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) impairment of assets, 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) gains or losses on sale of businesses and assets,
(c) gains or losses on insurance, (d) unrealized gains or losses on
equity securities, (e) impairment of assets, (f) settlement of
lawsuits, (g) gain on debt extinguishment, 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 24.2% and 7.6%
effective tax rate of the pre-tax non-GAAP income before taxes for
the six months ended March 31, 2021
and 2020, 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)
impairment of assets, (h) settlement of lawsuits, and (i) gain on
debt extinguishment. 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.
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 March 31,
|
|
For the Six Months
Ended March 31,
|
|
|
|
|
|
2021
|
|
2020
|
|
2021
|
|
2020
|
|
|
|
|
|
Amount
|
|
% of
Revenue
|
|
Amount
|
|
% of
Revenue
|
|
Amount
|
|
% of
Revenue
|
|
Amount
|
|
% of
Revenue
|
Revenues
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Sales of alcoholic
beverages
|
|
$
20,273
|
|
46.0%
|
|
$
16,919
|
|
41.9%
|
|
$
37,633
|
|
45.6%
|
|
$
37,662
|
|
42.4%
|
|
Sales of food and
merchandise
|
|
9,538
|
|
21.6%
|
|
6,479
|
|
16.0%
|
|
18,147
|
|
22.0%
|
|
13,926
|
|
15.7%
|
|
Service
revenues
|
|
11,502
|
|
26.1%
|
|
14,348
|
|
35.5%
|
|
21,562
|
|
26.1%
|
|
31,541
|
|
35.5%
|
|
Other
|
|
2,746
|
|
6.2%
|
|
2,680
|
|
6.6%
|
|
5,115
|
|
6.2%
|
|
5,691
|
|
6.4%
|
|
|
Total
revenues
|
|
44,059
|
|
100.0%
|
|
40,426
|
|
100.0%
|
|
82,457
|
|
100.0%
|
|
88,820
|
|
100.0%
|
Operating
expenses
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost of goods
sold
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Alcoholic beverages
sold
|
|
3,730
|
|
18.4%
|
|
3,435
|
|
20.3%
|
|
6,992
|
|
18.6%
|
|
7,581
|
|
20.1%
|
|
|
Food and merchandise
sold
|
|
3,029
|
|
31.8%
|
|
2,271
|
|
35.1%
|
|
5,918
|
|
32.6%
|
|
4,846
|
|
34.8%
|
|
|
Service and
other
|
|
43
|
|
0.3%
|
|
76
|
|
0.4%
|
|
96
|
|
0.4%
|
|
131
|
|
0.4%
|
|
|
|
Total cost of goods
sold (exclusive of items shown below)
|
|
6,802
|
|
15.4%
|
|
5,782
|
|
14.3%
|
|
13,006
|
|
15.8%
|
|
12,558
|
|
14.1%
|
|
Salaries and
wages
|
|
11,200
|
|
25.4%
|
|
12,222
|
|
30.2%
|
|
22,686
|
|
27.5%
|
|
25,445
|
|
28.6%
|
|
Selling, general and
administrative
|
|
12,618
|
|
28.6%
|
|
14,450
|
|
35.7%
|
|
24,770
|
|
30.0%
|
|
30,981
|
|
34.9%
|
|
Depreciation and
amortization
|
|
2,117
|
|
4.8%
|
|
2,257
|
|
5.6%
|
|
4,140
|
|
5.0%
|
|
4,461
|
|
5.0%
|
|
Other charges,
net
|
|
1,481
|
|
3.4%
|
|
8,190
|
|
20.3%
|
|
1,431
|
|
1.7%
|
|
8,164
|
|
9.2%
|
|
|
Total operating
expenses
|
|
34,218
|
|
77.7%
|
|
42,901
|
|
106.1%
|
|
66,033
|
|
80.1%
|
|
81,609
|
|
91.9%
|
Income (loss) from
operations
|
|
9,841
|
|
22.3%
|
|
(2,475)
|
|
-6.1%
|
|
16,424
|
|
19.9%
|
|
7,211
|
|
8.1%
|
Other income
(expenses)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest
expense
|
|
(2,364)
|
|
-5.4%
|
|
(2,459)
|
|
-6.1%
|
|
(4,798)
|
|
-5.8%
|
|
(4,944)
|
|
-5.6%
|
|
Interest
income
|
|
62
|
|
0.1%
|
|
85
|
|
0.2%
|
|
122
|
|
0.1%
|
|
183
|
|
0.2%
|
|
Non-operating gains
(losses), net
|
|
431
|
|
1.0%
|
|
(62)
|
|
-0.2%
|
|
5,347
|
|
6.5%
|
|
(134)
|
|
-0.2%
|
Income (loss) before
income taxes
|
|
7,970
|
|
18.1%
|
|
(4,911)
|
|
-12.1%
|
|
17,095
|
|
20.7%
|
|
2,316
|
|
2.6%
|
Income tax expense
(benefit)
|
|
1,938
|
|
4.4%
|
|
(1,418)
|
|
-3.5%
|
|
1,554
|
|
1.9%
|
|
175
|
|
0.2%
|
Net income
(loss)
|
|
6,032
|
|
13.7%
|
|
(3,493)
|
|
-8.6%
|
|
15,541
|
|
18.8%
|
|
2,141
|
|
2.4%
|
Net loss attributable
to noncontrolling interests
|
|
59
|
|
0.1%
|
|
41
|
|
0.1%
|
|
193
|
|
0.2%
|
|
41
|
|
0.0%
|
Net income (loss)
attributable to RCIHH common shareholders
|
|
$
6,091
|
|
13.8%
|
|
$
(3,452)
|
|
-8.5%
|
|
$
15,734
|
|
19.1%
|
|
$
2,182
|
|
2.5%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings (loss) per
share
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic and
diluted
|
|
$
0.68
|
|
|
|
$
(0.37)
|
|
|
|
$
1.75
|
|
|
|
$
0.24
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average
shares outstanding
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic and
diluted
|
|
9,000
|
|
|
|
9,225
|
|
|
|
9,010
|
|
|
|
9,274
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Dividends per
share
|
|
$
0.04
|
|
|
|
$
0.04
|
|
|
|
$
0.08
|
|
|
|
$
0.07
|
|
|
RCI HOSPITALITY
HOLDINGS, INC.
|
NON-GAAP FINANCIAL
MEASURES
|
(in thousands, except
per share and percentage data)
|
|
|
|
|
|
|
|
|
|
|
|
For the Three
Months
|
|
For the Six
Months
|
|
|
Ended March
31,
|
|
Ended March
31,
|
|
|
2021
|
|
2020
|
|
2021
|
|
2020
|
Reconciliation of
GAAP net income (loss) to Adjusted EBITDA
|
|
|
|
|
|
|
|
|
Net income (loss)
attributable to RCIHH common stockholders
|
|
$
6,091
|
|
$
(3,452)
|
|
$
15,734
|
|
$
2,182
|
Income tax expense
(benefit)
|
|
1,938
|
|
(1,418)
|
|
1,554
|
|
175
|
Interest expense,
net
|
|
2,302
|
|
2,374
|
|
4,676
|
|
4,761
|
Settlement of
lawsuits
|
|
1
|
|
-
|
|
153
|
|
24
|
Impairment of
assets
|
|
1,401
|
|
8,210
|
|
1,401
|
|
8,210
|
Loss (gain) on sale
of businesses and assets
|
|
91
|
|
(7)
|
|
86
|
|
(37)
|
Gain on debt
extinguishment
|
|
(380)
|
|
-
|
|
(5,329)
|
|
-
|
Unrealized loss on
equity securities
|
|
34
|
|
62
|
|
67
|
|
134
|
Gain on
insurance
|
|
(12)
|
|
(13)
|
|
(209)
|
|
(33)
|
Depreciation and
amortization
|
|
2,117
|
|
2,257
|
|
4,140
|
|
4,461
|
Adjusted
EBITDA
|
|
$
13,583
|
|
$
8,013
|
|
$
22,273
|
|
$
19,877
|
|
|
|
|
|
|
|
|
|
Reconciliation of
GAAP net income (loss) to non-GAAP net income
|
|
|
|
|
|
|
|
|
Net income (loss)
attributable to RCIHH common stockholders
|
|
$
6,091
|
|
$
(3,452)
|
|
$
15,734
|
|
$
2,182
|
Amortization of
intangibles
|
|
79
|
|
157
|
|
158
|
|
313
|
Settlement of
lawsuits
|
|
1
|
|
-
|
|
153
|
|
24
|
Impairment of
assets
|
|
1,401
|
|
8,210
|
|
1,401
|
|
8,210
|
Loss (gain) on sale
of businesses and assets
|
|
91
|
|
(7)
|
|
86
|
|
(37)
|
Gain on debt
extinguishment
|
|
(380)
|
|
-
|
|
(5,329)
|
|
-
|
Unrealized loss on
equity securities
|
|
34
|
|
62
|
|
67
|
|
134
|
Gain on
insurance
|
|
(12)
|
|
(13)
|
|
(209)
|
|
(33)
|
Net income tax
effect
|
|
(522)
|
|
(633)
|
|
(1,741)
|
|
(659)
|
Non-GAAP net
income
|
|
$
6,783
|
|
$
4,324
|
|
$
10,320
|
|
$
10,134
|
|
|
|
|
|
|
|
|
|
Reconciliation of
GAAP diluted earnings (loss) per share to non-GAAP diluted earnings
per share
|
|
|
|
|
Diluted
shares
|
|
9,000
|
|
9,225
|
|
9,010
|
|
9,274
|
GAAP diluted earnings
(loss) per share
|
|
$
0.68
|
|
$
(0.37)
|
|
$
1.75
|
|
$
0.24
|
Amortization of
intangibles
|
|
0.01
|
|
0.02
|
|
0.02
|
|
0.03
|
Settlement of
lawsuits
|
|
0.00
|
|
-
|
|
0.02
|
|
0.00
|
Impairment of
assets
|
|
0.16
|
|
0.89
|
|
0.16
|
|
0.89
|
Loss (gain) on sale
of businesses and assets
|
|
0.01
|
|
(0.00)
|
|
0.01
|
|
(0.00)
|
Gain on debt
extinguishment
|
|
(0.04)
|
|
-
|
|
(0.59)
|
|
-
|
Unrealized loss on
equity securities
|
|
0.00
|
|
0.01
|
|
0.01
|
|
0.01
|
Gain on
insurance
|
|
(0.00)
|
|
(0.00)
|
|
(0.02)
|
|
(0.00)
|
Net income tax
effect
|
|
(0.06)
|
|
(0.07)
|
|
(0.19)
|
|
(0.07)
|
Non-GAAP diluted
earnings per share
|
|
$
0.75
|
|
$
0.47
|
|
$
1.15
|
|
$
1.09
|
|
|
|
|
|
|
|
|
|
Reconciliation of
GAAP operating income to non-GAAP operating income
|
|
|
|
|
|
|
|
|
Income (loss) from
operations
|
|
$
9,841
|
|
$
(2,475)
|
|
$
16,424
|
|
$
7,211
|
Amortization of
intangibles
|
|
79
|
|
157
|
|
158
|
|
313
|
Settlement of
lawsuits
|
|
1
|
|
-
|
|
153
|
|
24
|
Impairment of
assets
|
|
1,401
|
|
8,210
|
|
1,401
|
|
8,210
|
Loss (gain) on sale
of businesses and assets
|
|
91
|
|
(7)
|
|
86
|
|
(37)
|
Gain on
insurance
|
|
(12)
|
|
(13)
|
|
(209)
|
|
(33)
|
Non-GAAP operating
income
|
|
$
11,401
|
|
$
5,872
|
|
$
18,013
|
|
$
15,688
|
|
|
|
|
|
|
|
|
|
Reconciliation of
GAAP operating margin to non-GAAP operating margin
|
|
|
|
|
|
|
|
|
GAAP operating
margin
|
|
22.3%
|
|
-6.1%
|
|
19.9%
|
|
8.1%
|
Amortization of
intangibles
|
|
0.2%
|
|
0.4%
|
|
0.2%
|
|
0.4%
|
Settlement of
lawsuits
|
|
0.0%
|
|
0.0%
|
|
0.2%
|
|
0.0%
|
Impairment of
assets
|
|
3.2%
|
|
20.3%
|
|
1.7%
|
|
9.2%
|
Loss (gain) on sale
of businesses and assets
|
|
0.2%
|
|
0.0%
|
|
0.1%
|
|
0.0%
|
Gain on
insurance
|
|
0.0%
|
|
0.0%
|
|
-0.3%
|
|
0.0%
|
Non-GAAP operating
margin
|
|
25.9%
|
|
14.5%
|
|
21.8%
|
|
17.7%
|
|
|
|
|
|
|
|
|
|
Reconciliation of
net cash provided by operating activities to free cash
flow
|
|
|
|
|
|
|
|
Net cash provided by
operating activities
|
|
$
10,972
|
|
$
1,708
|
|
$
17,246
|
|
$
11,981
|
Less: Maintenance
capital expenditures
|
|
1,986
|
|
1,090
|
|
2,591
|
|
2,111
|
Free cash
flow
|
|
$
8,986
|
|
$
618
|
|
$
14,655
|
|
$
9,870
|
RCI HOSPITALITY
HOLDINGS, INC.
|
SEGMENT
INFORMATION
|
(in
thousands)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For the Three
Months
|
|
For the Six
Months
|
|
|
|
Ended March
31,
|
|
Ended March
31,
|
|
|
|
2021
|
|
2020
|
|
2021
|
|
2020
|
Revenues
|
|
|
|
|
|
|
|
|
|
Nightclubs
|
|
$
30,787
|
|
$
31,367
|
|
$
55,984
|
|
$
69,226
|
|
Bombshells
|
|
13,135
|
|
8,803
|
|
26,141
|
|
19,153
|
|
Other
|
|
137
|
|
256
|
|
332
|
|
441
|
|
|
|
$
44,059
|
|
$
40,426
|
|
$
82,457
|
|
$
88,820
|
|
|
|
|
|
|
|
|
|
|
Income (loss) from
operations
|
|
|
|
|
|
|
|
|
|
Nightclubs
|
|
$
10,468
|
|
$
2,284
|
|
$
18,963
|
|
$
16,040
|
|
Bombshells
|
|
3,142
|
|
688
|
|
5,859
|
|
2,259
|
|
Other
|
|
(139)
|
|
(146)
|
|
(214)
|
|
(331)
|
|
General
corporate
|
|
(3,630)
|
|
(5,301)
|
|
(8,184)
|
|
(10,757)
|
|
|
|
$
9,841
|
|
$
(2,475)
|
|
$
16,424
|
|
$
7,211
|
RCI HOSPITALITY
HOLDINGS, INC.
|
NON-GAAP SEGMENT
INFORMATION
|
($ in
thousands)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For the Three
Months Ended March 31, 2021
|
|
For the Three
Months Ended March 31, 2020
|
|
|
Nightclubs
|
|
Bombshells
|
|
Other
|
|
Corporate
|
|
Total
|
|
Nightclubs
|
|
Bombshells
|
|
Other
|
|
Corporate
|
|
Total
|
Income (loss) from
operations
|
|
$
10,468
|
|
$
3,142
|
|
$
(139)
|
|
$
(3,630)
|
|
$
9,841
|
|
$
2,284
|
|
$
688
|
|
$
(146)
|
|
$
(5,301)
|
|
$
(2,475)
|
Amortization of
intangibles
|
|
47
|
|
3
|
|
29
|
|
-
|
|
79
|
|
57
|
|
4
|
|
96
|
|
-
|
|
157
|
Settlement of
lawsuits
|
|
(4)
|
|
-
|
|
5
|
|
-
|
|
1
|
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
Impairment of
assets
|
|
1,401
|
|
-
|
|
-
|
|
-
|
|
1,401
|
|
7,965
|
|
245
|
|
-
|
|
-
|
|
8,210
|
Loss (gain) on sale
of businesses and assets
|
|
14
|
|
47
|
|
-
|
|
30
|
|
91
|
|
(3)
|
|
-
|
|
-
|
|
(4)
|
|
(7)
|
Loss (gain) on
insurance
|
|
32
|
|
-
|
|
-
|
|
(44)
|
|
(12)
|
|
-
|
|
-
|
|
-
|
|
(13)
|
|
(13)
|
Non-GAAP operating
income (loss)
|
|
$
11,958
|
|
$
3,192
|
|
$
(105)
|
|
$
(3,644)
|
|
$
11,401
|
|
$
10,303
|
|
$
937
|
|
$
(50)
|
|
$
(5,318)
|
|
$
5,872
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP operating
margin
|
|
34.0%
|
|
23.9%
|
|
-101.5%
|
|
-8.2%
|
|
22.3%
|
|
7.3%
|
|
7.8%
|
|
-57.0%
|
|
-13.1%
|
|
-6.1%
|
Non-GAAP operating
margin
|
|
38.8%
|
|
24.3%
|
|
-76.6%
|
|
-8.3%
|
|
25.9%
|
|
32.8%
|
|
10.6%
|
|
-19.5%
|
|
-13.2%
|
|
14.5%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For the Six Months
Ended March 31, 2021
|
|
For the Six Months
Ended March 31, 2020
|
|
|
Nightclubs
|
|
Bombshells
|
|
Other
|
|
Corporate
|
|
Total
|
|
Nightclubs
|
|
Bombshells
|
|
Other
|
|
Corporate
|
|
Total
|
Income (loss) from
operations
|
|
$
18,963
|
|
$
5,859
|
|
$
(214)
|
|
$
(8,184)
|
|
$
16,424
|
|
$
16,040
|
|
$
2,259
|
|
$
(331)
|
|
$
(10,757)
|
|
$
7,211
|
Amortization of
intangibles
|
|
94
|
|
7
|
|
57
|
|
-
|
|
158
|
|
114
|
|
8
|
|
191
|
|
-
|
|
313
|
Settlement of
lawsuits
|
|
114
|
|
34
|
|
5
|
|
-
|
|
153
|
|
24
|
|
-
|
|
-
|
|
-
|
|
24
|
Impairment of
assets
|
|
1,401
|
|
-
|
|
-
|
|
-
|
|
1,401
|
|
7,965
|
|
245
|
|
-
|
|
-
|
|
8,210
|
Loss (gain) on sale
of businesses and assets
|
|
14
|
|
47
|
|
-
|
|
25
|
|
86
|
|
-
|
|
-
|
|
-
|
|
(37)
|
|
(37)
|
Gain on
insurance
|
|
(165)
|
|
-
|
|
-
|
|
(44)
|
|
(209)
|
|
(20)
|
|
-
|
|
-
|
|
(13)
|
|
(33)
|
Non-GAAP operating
income (loss)
|
|
$
20,421
|
|
$
5,947
|
|
$
(152)
|
|
$
(8,203)
|
|
$
18,013
|
|
$
24,123
|
|
$
2,512
|
|
$
(140)
|
|
$
(10,807)
|
|
$
15,688
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP operating
margin
|
|
33.9%
|
|
22.4%
|
|
-64.5%
|
|
-9.9%
|
|
19.9%
|
|
23.2%
|
|
11.8%
|
|
-75.1%
|
|
-12.1%
|
|
8.1%
|
Non-GAAP operating
margin
|
|
36.5%
|
|
22.7%
|
|
-45.8%
|
|
-9.9%
|
|
21.8%
|
|
34.8%
|
|
13.1%
|
|
-31.7%
|
|
-12.2%
|
|
17.7%
|
RCI HOSPITALITY
HOLDINGS, INC.
|
CONSOLIDATED
STATEMENTS OF CASH FLOWS
|
(in
thousands)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For the Three
Months Ended
|
|
For the Six Months
Ended
|
|
|
|
|
March 31,
2021
|
|
March 31,
2020
|
|
March 31,
2021
|
|
March 31,
2020
|
CASH FLOWS FROM
OPERATING ACTIVITIES
|
|
|
|
|
|
|
|
|
Net income
(loss)
|
|
$
6,032
|
|
$
(3,493)
|
|
$
15,541
|
|
$
2,141
|
Adjustments to
reconcile net income (loss) to net cash
|
|
|
|
|
|
|
|
|
provided by operating
activities:
|
|
|
|
|
|
|
|
|
|
Depreciation and
amortization
|
|
2,117
|
|
2,257
|
|
4,140
|
|
4,461
|
|
Deferred income tax
benefit
|
|
-
|
|
(1,005)
|
|
-
|
|
(1,155)
|
|
Loss (gain) on sale
of businesses and assets
|
|
91
|
|
(6)
|
|
86
|
|
(36)
|
|
Impairment of
assets
|
|
1,401
|
|
8,210
|
|
1,401
|
|
8,210
|
|
Unrealized loss on
equity securities
|
|
34
|
|
62
|
|
67
|
|
134
|
|
Amortization of debt
discount and issuance costs
|
|
50
|
|
68
|
|
101
|
|
129
|
|
Gain on debt
extinguishment
|
|
(378)
|
|
-
|
|
(5,298)
|
|
-
|
|
Noncash lease
expense
|
|
427
|
|
496
|
|
848
|
|
825
|
|
Gain on
insurance
|
|
(44)
|
|
(13)
|
|
(294)
|
|
(33)
|
|
Doubtful accounts
expense (reversal) on notes receivable
|
|
35
|
|
-
|
|
(58)
|
|
-
|
|
Changes in operating
assets and liabilities:
|
|
|
|
|
|
|
|
|
|
|
Accounts
receivable
|
|
1,704
|
|
(428)
|
|
3,137
|
|
1,917
|
|
|
Inventories
|
|
(9)
|
|
4
|
|
(31)
|
|
(137)
|
|
|
Prepaid expenses,
other current assets and other assets
|
|
369
|
|
1,275
|
|
1,494
|
|
2,840
|
|
|
Accounts payable,
accrued and other liabilities
|
|
(857)
|
|
(5,719)
|
|
(3,888)
|
|
(7,315)
|
|
Net cash provided by
operating activities
|
|
10,972
|
|
1,708
|
|
17,246
|
|
11,981
|
CASH FLOWS FROM
INVESTING ACTIVITIES
|
|
|
|
|
|
|
|
|
Proceeds from sale of
businesses and assets
|
|
8
|
|
54
|
|
8
|
|
105
|
Proceeds from
insurance
|
|
44
|
|
13
|
|
294
|
|
945
|
Proceeds from notes
receivable
|
|
35
|
|
46
|
|
61
|
|
403
|
Payments for property
and equipment and intangible assets
|
|
(5,429)
|
|
(1,265)
|
|
(6,718)
|
|
(5,323)
|
|
Net cash used in
investing activities
|
|
(5,342)
|
|
(1,152)
|
|
(6,355)
|
|
(3,870)
|
CASH FLOWS FROM
FINANCING ACTIVITIES
|
|
|
|
|
|
|
|
|
Proceeds from debt
obligations
|
|
2,176
|
|
562
|
|
2,176
|
|
880
|
Payments on debt
obligations
|
|
(4,232)
|
|
(2,016)
|
|
(5,977)
|
|
(4,097)
|
Purchase of treasury
stock
|
|
-
|
|
(2,047)
|
|
(1,794)
|
|
(8,488)
|
Payment of
dividends
|
|
(360)
|
|
(368)
|
|
(720)
|
|
(647)
|
Payment of loan
origination costs
|
|
(25)
|
|
-
|
|
(25)
|
|
-
|
Distribution to
noncontrolling interests
|
|
-
|
|
(21)
|
|
-
|
|
(31)
|
|
Net cash used in
financing activities
|
|
(2,441)
|
|
(3,890)
|
|
(6,340)
|
|
(12,383)
|
NET INCREASE
(DECREASE) IN CASH AND CASH EQUIVALENTS
|
|
3,189
|
|
(3,334)
|
|
4,551
|
|
(4,272)
|
CASH AND CASH
EQUIVALENTS AT BEGINNING OF PERIOD
|
|
16,967
|
|
13,159
|
|
15,605
|
|
14,097
|
CASH AND CASH
EQUIVALENTS AT END OF PERIOD
|
|
$
20,156
|
|
$
9,825
|
|
$
20,156
|
|
$
9,825
|
RCI HOSPITALITY
HOLDINGS, INC.
|
CONSOLIDATED
BALANCE SHEETS
|
(in
thousands)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
March
31,
|
|
September
30,
|
|
March
31,
|
|
|
|
|
2021
|
|
2020
|
|
2020
|
ASSETS
|
|
|
|
|
|
|
Current
assets
|
|
|
|
|
|
|
Cash and cash
equivalents
|
$
20,156
|
|
$
15,605
|
|
$
9,825
|
|
Accounts receivable,
net
|
3,630
|
|
6,767
|
|
4,678
|
|
Current portion of
notes receivable
|
214
|
|
201
|
|
675
|
|
Inventories
|
2,403
|
|
2,372
|
|
2,735
|
|
Prepaid expenses and
other current assets
|
5,020
|
|
6,488
|
|
5,148
|
|
Assets held for
sale
|
7,382
|
|
-
|
|
4,825
|
|
|
Total current
assets
|
38,805
|
|
31,433
|
|
27,886
|
Property and
equipment, net
|
175,153
|
|
181,383
|
|
182,234
|
Operating lease
right-of-use assets, net
|
24,698
|
|
25,546
|
|
26,485
|
Notes receivable, net
of current portion
|
2,892
|
|
2,908
|
|
4,087
|
Goodwill
|
45,686
|
|
45,686
|
|
47,109
|
Intangibles,
net
|
73,070
|
|
73,077
|
|
74,251
|
Other
assets
|
806
|
|
900
|
|
963
|
|
|
|
Total
assets
|
$
361,110
|
|
$
360,933
|
|
$
363,015
|
|
|
|
|
|
|
|
|
|
LIABILITIES AND
EQUITY
|
|
|
|
|
|
Current
liabilities
|
|
|
|
|
|
|
Accounts
payable
|
$
4,021
|
|
$
4,799
|
|
$
2,805
|
|
Accrued
liabilities
|
12,321
|
|
14,573
|
|
8,671
|
|
Current portion of
long-term debt, net
|
16,380
|
|
16,304
|
|
14,771
|
|
Current portion of
operating lease liabilities
|
1,692
|
|
1,628
|
|
1,552
|
|
|
Total current
liabilities
|
34,414
|
|
37,304
|
|
27,799
|
Deferred tax
liability, net
|
20,390
|
|
20,390
|
|
20,503
|
Long-term debt, net
of current portion and debt discount and issuance costs
|
116,032
|
|
125,131
|
|
125,669
|
Operating lease
liabilities, net of current portion
|
24,583
|
|
25,439
|
|
26,275
|
Other long-term
liabilities
|
357
|
|
362
|
|
374
|
|
|
Total
liabilities
|
195,776
|
|
208,626
|
|
200,620
|
|
|
|
|
|
|
|
|
|
Commitments and
contingencies
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Equity
|
|
|
|
|
|
|
|
Preferred
stock
|
-
|
|
-
|
|
-
|
|
Common
stock
|
90
|
|
91
|
|
91
|
|
Additional paid-in
capital
|
50,040
|
|
51,833
|
|
52,829
|
|
Retained
earnings
|
115,811
|
|
100,797
|
|
109,703
|
|
|
Total RCIHH
stockholders' equity
|
165,941
|
|
152,721
|
|
162,623
|
|
Noncontrolling
interests
|
(607)
|
|
(414)
|
|
(228)
|
|
|
Total
equity
|
165,334
|
|
152,307
|
|
162,395
|
|
|
|
Total liabilities and
equity
|
$
361,110
|
|
$
360,933
|
|
$
363,015
|
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SOURCE RCI Hospitality Holdings, Inc.