HOUSTON, Dec. 14, 2021 /PRNewswire/ -- RCI Hospitality
Holdings, Inc. (Nasdaq: RICK) today reported results for the fiscal
2021 fourth quarter and year ended September
30, 2021, and filed its Form 10-K.
|
4Q21
Highlights
|
FY21
Highlights
|
|
- Total revenues of
$54.9 million vs. $28.8 million in 4Q20
- EPS of $0.26 vs.
loss per share of $0.31 in 4Q20
- Non-GAAP EPS* of
$1.58 vs. $0.15 in 4Q20
- Net cash from
operating activities of $9.8 million and free cash flow* of $8.5
million
- Net income of $2.3
million vs. net loss of $2.9 million in 4Q20
- Adjusted EBITDA* of
$17.6 million vs. $4.4 million in 4Q20
- $35.7 million cash
and equivalents at 9/30/21
|
- Total revenues of
$195.3 million vs. $132.3 million in FY20
- EPS of $3.37 vs.
loss per share of $0.66 in FY20
- Non-GAAP EPS* of
$4.08 vs. $0.51 in FY20
- Net cash from
operating activities of $42.0 million and free cash flow* of $36.1
million
- Net income of $30.2
million vs. net loss of $6.3 million in FY20
- Adjusted EBITDA* of
$60.2 million vs. $22.4 million in FY20
|
4Q21 and FY21 included non-cash impairments of $11.9 million and $13.6
million, respectively. While most clubs rebounded
significantly throughout the year, the full year contribution from
clubs in certain locations with more stringent COVID-19
restrictions did not recover as fast as previously projected.
Eric Langan, President and
CEO of RCI Hospitality Holdings, Inc., stated: "We ended
FY21 with record fourth quarter revenues, annual revenues, and cash
generation. A special thanks to our teams for their outstanding
performance managing COVID-19 restrictions, reopening challenges
earlier in the year, the Delta variant, inflation, and labor issues
in the fourth quarter. We're working full steam ahead on executing
our plan for FY22. This includes improving the customer experience
at our new club acquisitions, scouting for new clubs to buy, the
recent opening of our new company-owned Bombshells Arlington, the
upcoming opening of our franchisee-owned Bombshells San Antonio,
developing new company-owned and franchised Bombshells locations,
and launching our AdmireMe mobile friendly site."
Conference Call Today at 4:30 PM
ET
- Live Participant Phone: Toll Free 888-506-0062, International
973-528-0011, Passcode: 484746
- Live webcast, slides or replay link:
https://www.webcaster4.com/Webcast/Page/2209/43856
- Phone replay: Toll Free 877-481-4010, International
919-882-2331, Passcode: 43856
Meet Management Tonight at 6:00 PM
ET
- Investors are invited to meet management at one of RCI's top
revenue generating clubs
- Rick's Cabaret New York, 50 W. 33rd Street, New York, NY, between Fifth Avenue and
Broadway
- RSVP your contact information to gary.fishman@anreder.com by
5:00 PM ET today
4Q21 Segments
- Nightclubs: 4Q21 revenues of $40.3
million, operating margin of 16.1% (43.2% non-GAAP), and
income from operations of $6.5
million ($17.4 million
non-GAAP), with 36 clubs open the full quarter. Florida clubs did particularly well.
Higher-margin service revenues continued to grow. GAAP results
included the previously mentioned $11.9
million impairment and a $1.0
million gain on insurance. 4Q21 improved significantly
compared to 4Q20 when 16 clubs were open the full quarter and 34 by
quarter end, reflecting COVID restrictions. Compared to pre-COVID
4Q19, 4Q21 revenues increased 12% and income from operations
increased 4% (58% non-GAAP).
- Bombshells: 4Q21 revenues of $14.4
million, operating margin of 20.8%, and income from
operations of $3.0 million. All 10
locations were open the full quarter. This compares to 4Q20
revenues of $15.5 million, operating
margin of 33.0%, and income from operations of $5.1 million, when sales benefitted from an
unusually strong sports schedule and Bombshells being one of the
few venues open in its markets. Compared to pre-COVID 4Q19,
revenues increased 69% on 25% more units and operating margin
expanded 11.9 percentage points.
4Q21 Consolidated (comparisons to 4Q20 and % are of total
revenues unless indicated otherwise)
- Margin improvements in cost of goods sold (14.9% vs. 15.6%),
salaries and wages (25.6% vs. 28.5%), and SG&A (27.6% vs.
41.0%) primarily reflected higher Nightclubs sales and cost-saving
initiatives.
- Other charges of $11.9 million
included the previously mentioned impairment and $1.0 million from settlement of lawsuits,
partially offset by other gains of $1.0
million from insurance.
- Operating margin was 6.6% vs. 0.7%. Non-GAAP operating margin
was 28.4% vs. 8.0%.
- Interest expense increased $0.5
million due to costs and charges related to the previously
announced debt refinancing, but declined as a percentage of
revenues, to 5.3% from 8.4%.
- Income taxes were a benefit of $1.6
million compared to an expense of $0.8 million. Both periods adjusted for the full
year tax rate. 4Q21 also included $0.6
million benefit from a change in deferred tax asset
valuation allowance.
- Debt was $125.2 million at
9/30/21 compared to $127.6 million at 6/30/21. This reflected
scheduled paydowns and a $1.2 million
paydown related to a sold property.
FY21 vs. FY20
- Total revenues increased 48% to $195.3
million, primarily due to a 55% increase in Nightclubs to
$137.3 million and a 31% increase in
Bombshells to a record $56.6
million.
- Compared to FY20, which was more severely affected by COVID-19
restrictions, most clubs opened to their full capacity and
operating hours over the course of FY21, while Bombshells
restaurants opened to their full capacity and operating hours as of
the first half of March 2021.
- As a result, operating margin expanded to 19.7% from 2.1% of
revenues. On a non-GAAP basis, which excludes the
previously-mentioned $13.6 million
impairment and other charges (gains), operating margin expanded to
26.7% from 10.5% of revenues.
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. We
will continually monitor and evaluate our cash flow situation to
determine whether any measures need to be instituted.
- 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)
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) gain on debt extinguishment, (i) the income tax effect of the
above-described adjustments, and (j) change in 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 13.5%, 26.0%, and 15.5% effective tax rate of
the pre-tax non-GAAP income before taxes for the 2021, 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)
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 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)
www.rcihospitality.com
With more than 50 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-Fort
Worth, Houston,
Miami, Minneapolis, Denver, St.
Louis, Charlotte,
Pittsburgh, Raleigh, Louisville, 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.
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,
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,
2021, 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.
|
CONSOLIDATED
STATEMENTS OF OPERATIONS
|
(in thousands, except
per share and percentage data)
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For the Three
Months Ended September 30,
|
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For the Twelve
Months Ended September 30,
|
|
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2021
|
|
2020
|
|
2021
|
|
2020
|
|
|
|
|
|
Amount
|
|
% of
Revenue
|
|
Amount
|
|
% of
Revenue
|
|
Amount
|
|
% of
Revenue
|
|
Amount
|
|
% of
Revenue
|
Revenues
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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Sales of alcoholic
beverages
|
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$
23,960
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43.6%
|
|
$
13,795
|
|
47.9%
|
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$
86,685
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44.4%
|
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$
59,080
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44.6%
|
|
Sales of food and
merchandise
|
|
10,906
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19.9%
|
|
7,082
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24.6%
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|
41,111
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21.1%
|
|
24,460
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|
18.5%
|
|
Service
revenues
|
|
17,019
|
|
31.0%
|
|
6,714
|
|
23.3%
|
|
55,461
|
|
28.4%
|
|
41,162
|
|
31.1%
|
|
Other
|
|
3,056
|
|
5.6%
|
|
1,195
|
|
4.2%
|
|
12,001
|
|
6.1%
|
|
7,625
|
|
5.8%
|
|
|
Total
revenues
|
|
54,941
|
|
100.0%
|
|
28,786
|
|
100.0%
|
|
195,258
|
|
100.0%
|
|
132,327
|
|
100.0%
|
Operating
expenses
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost of goods
sold
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Alcoholic beverages
sold
|
|
4,270
|
|
17.8%
|
|
2,271
|
|
16.5%
|
|
15,883
|
|
18.3%
|
|
11,097
|
|
18.8%
|
|
|
Food and merchandise
sold
|
|
3,833
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|
35.1%
|
|
2,167
|
|
30.6%
|
|
13,794
|
|
33.6%
|
|
8,141
|
|
33.3%
|
|
|
Service and
other
|
|
70
|
|
0.3%
|
|
49
|
|
0.6%
|
|
374
|
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0.6%
|
|
197
|
|
0.4%
|
|
|
|
Total cost of goods
sold (exclusive of items shown below)
|
|
8,173
|
|
14.9%
|
|
4,487
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|
15.6%
|
|
30,051
|
|
15.4%
|
|
19,435
|
|
14.7%
|
|
Salaries and
wages
|
|
14,071
|
|
25.6%
|
|
8,204
|
|
28.5%
|
|
50,627
|
|
25.9%
|
|
39,070
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|
29.5%
|
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Selling, general and
administrative
|
|
15,141
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27.6%
|
|
11,803
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41.0%
|
|
54,608
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28.0%
|
|
51,692
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39.1%
|
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Depreciation and
amortization
|
|
2,041
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3.7%
|
|
2,140
|
|
7.4%
|
|
8,238
|
|
4.2%
|
|
8,836
|
|
6.7%
|
|
Other charges
(gains), net
|
|
11,898
|
|
21.7%
|
|
1,960
|
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6.8%
|
|
13,186
|
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6.8%
|
|
10,548
|
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8.0%
|
|
|
Total operating
expenses
|
|
51,324
|
|
93.4%
|
|
28,594
|
|
99.3%
|
|
156,710
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80.3%
|
|
129,581
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97.9%
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Income from
operations
|
|
3,617
|
|
6.6%
|
|
192
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0.7%
|
|
38,548
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|
19.7%
|
|
2,746
|
|
2.1%
|
Other income
(expenses)
|
|
|
|
|
|
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|
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Interest
expense
|
|
(2,913)
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-5.3%
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|
(2,408)
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|
-8.4%
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(9,992)
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-5.1%
|
|
(9,811)
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|
-7.4%
|
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Interest
income
|
|
59
|
|
0.1%
|
|
61
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|
0.2%
|
|
253
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|
0.1%
|
|
324
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|
0.2%
|
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Non-operating gains
(losses), net
|
|
(26)
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|
0.0%
|
|
39
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|
0.1%
|
|
5,330
|
|
2.7%
|
|
(64)
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|
0.0%
|
Income (loss) before
income taxes
|
|
737
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1.3%
|
|
(2,116)
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|
-7.4%
|
|
34,139
|
|
17.5%
|
|
(6,805)
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|
-5.1%
|
Income tax expense
(benefit)
|
|
(1,551)
|
|
-2.8%
|
|
769
|
|
2.7%
|
|
3,989
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|
2.0%
|
|
(493)
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-0.4%
|
Net income
(loss)
|
|
2,288
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4.2%
|
|
(2,885)
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-10.0%
|
|
30,150
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|
15.4%
|
|
(6,312)
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-4.8%
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Net loss attributable
to noncontrolling interests
|
|
12
|
|
0.0%
|
|
92
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|
0.3%
|
|
186
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|
0.1%
|
|
227
|
|
0.2%
|
Net income (loss)
attributable to RCIHH common shareholders
|
|
$
2,300
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4.2%
|
|
$
(2,793)
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-9.7%
|
|
$
30,336
|
|
15.5%
|
|
$
(6,085)
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|
-4.6%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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Earnings (loss) per
share
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic and
diluted
|
|
$
0.26
|
|
|
|
$
(0.31)
|
|
|
|
$
3.37
|
|
|
|
$
(0.66)
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|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average
shares outstanding
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic and
diluted
|
|
9,000
|
|
|
|
9,124
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|
|
|
9,005
|
|
|
|
9,199
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Dividends per
share
|
|
$
0.04
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|
|
|
$
0.03
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|
|
|
$
0.16
|
|
|
|
$
0.14
|
|
|
|
|
|
|
|
|
|
|
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|
|
|
|
|
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|
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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,
|
|
|
2021
|
|
2020
|
|
2021
|
|
2020
|
Reconciliation of
GAAP net income (loss) to Adjusted EBITDA
|
|
|
|
|
|
|
|
|
Net income (loss)
attributable to RCIHH common stockholders
|
|
$
2,300
|
|
$
(2,793)
|
|
$
30,336
|
|
$
(6,085)
|
Income tax expense
(benefit)
|
|
(1,551)
|
|
769
|
|
3,989
|
|
(493)
|
Interest expense,
net
|
|
2,854
|
|
2,347
|
|
9,739
|
|
9,487
|
Settlement of
lawsuits
|
|
1,069
|
|
100
|
|
1,349
|
|
174
|
Impairment of
assets
|
|
11,940
|
|
1,423
|
|
13,612
|
|
10,615
|
Gain on sale of
businesses and assets
|
|
(67)
|
|
(16)
|
|
(522)
|
|
(661)
|
Gain on debt
extinguishment
|
|
-
|
|
-
|
|
(5,329)
|
|
-
|
Unrealized loss
(gain) on equity securities
|
|
26
|
|
(39)
|
|
84
|
|
64
|
Loss (gain) on
insurance
|
|
(1,044)
|
|
453
|
|
(1,253)
|
|
420
|
Depreciation and
amortization
|
|
2,041
|
|
2,140
|
|
8,238
|
|
8,836
|
Adjusted
EBITDA
|
|
$
17,568
|
|
$
4,384
|
|
$
60,243
|
|
$
22,357
|
|
|
|
|
|
|
|
|
|
Reconciliation of
GAAP net income (loss) to non-GAAP net income
|
|
|
|
|
|
|
|
|
Net income (loss)
attributable to RCIHH common stockholders
|
|
$
2,300
|
|
$
(2,793)
|
|
$
30,336
|
|
$
(6,085)
|
Amortization of
intangibles
|
|
49
|
|
147
|
|
258
|
|
609
|
Settlement of
lawsuits
|
|
1,069
|
|
100
|
|
1,349
|
|
174
|
Impairment of
assets
|
|
11,940
|
|
1,423
|
|
13,612
|
|
10,615
|
Gain on sale of
businesses and assets
|
|
(67)
|
|
(16)
|
|
(522)
|
|
(661)
|
Gain on debt
extinguishment
|
|
-
|
|
-
|
|
(5,329)
|
|
-
|
Unrealized loss
(gain) on equity securities
|
|
26
|
|
(39)
|
|
84
|
|
64
|
Loss (gain) on
insurance
|
|
(1,044)
|
|
453
|
|
(1,253)
|
|
420
|
Costs and charges
related to debt refinancing
|
|
694
|
|
-
|
|
694
|
|
-
|
Change in deferred
tax asset valuation allowance
|
|
(632)
|
|
1,273
|
|
(632)
|
|
1,273
|
Net income tax
effect
|
|
(143)
|
|
799
|
|
(1,845)
|
|
(1,700)
|
Non-GAAP net
income
|
|
$
14,192
|
|
$
1,347
|
|
$
36,752
|
|
$
4,709
|
|
|
|
|
|
|
|
|
|
Reconciliation of
GAAP diluted earnings (loss) per share to non-GAAP diluted earnings
per share
|
|
|
|
|
Diluted
shares
|
|
9,000
|
|
9,124
|
|
9,005
|
|
9,199
|
GAAP diluted earnings
(loss) per share
|
|
$
0.26
|
|
$
(0.31)
|
|
$
3.37
|
|
$
(0.66)
|
Amortization of
intangibles
|
|
0.01
|
|
0.02
|
|
0.03
|
|
0.07
|
Settlement of
lawsuits
|
|
0.12
|
|
0.01
|
|
0.15
|
|
0.02
|
Impairment of
assets
|
|
1.33
|
|
0.16
|
|
1.51
|
|
1.15
|
Gain on sale of
businesses and assets
|
|
(0.01)
|
|
(0.00)
|
|
(0.06)
|
|
(0.07)
|
Gain on debt
extinguishment
|
|
-
|
|
-
|
|
(0.59)
|
|
-
|
Unrealized loss
(gain) on equity securities
|
|
0.00
|
|
(0.00)
|
|
0.01
|
|
0.01
|
Loss (gain) on
insurance
|
|
(0.12)
|
|
0.05
|
|
(0.14)
|
|
0.05
|
Costs and charges
related to debt refinancing
|
|
0.08
|
|
-
|
|
0.08
|
|
-
|
Change in deferred
tax asset valuation allowance
|
|
(0.07)
|
|
0.14
|
|
(0.07)
|
|
0.14
|
Net income tax
effect
|
|
(0.02)
|
|
0.09
|
|
(0.20)
|
|
(0.18)
|
Non-GAAP diluted
earnings per share
|
|
$
1.58
|
|
$
0.15
|
|
$
4.08
|
|
$
0.51
|
|
|
|
|
|
|
|
|
|
Reconciliation of
GAAP operating income to non-GAAP operating income
|
|
|
|
|
|
|
Income (loss) from
operations
|
|
$
3,617
|
|
$
192
|
|
$
38,548
|
|
$
2,746
|
Amortization of
intangibles
|
|
49
|
|
147
|
|
258
|
|
609
|
Settlement of
lawsuits
|
|
1,069
|
|
100
|
|
1,349
|
|
174
|
Impairment of
assets
|
|
11,940
|
|
1,423
|
|
13,612
|
|
10,615
|
Gain on sale of
businesses and assets
|
|
(67)
|
|
(16)
|
|
(522)
|
|
(661)
|
Costs and charges
related to debt refinancing
|
|
57
|
|
-
|
|
57
|
|
-
|
Loss (gain) on
insurance
|
|
(1,044)
|
|
453
|
|
(1,253)
|
|
420
|
Non-GAAP operating
income
|
|
$
15,621
|
|
$
2,299
|
|
$
52,049
|
|
$
13,903
|
|
|
|
|
|
|
|
|
|
Reconciliation of
GAAP operating margin to non-GAAP operating margin
|
|
|
|
|
|
|
|
GAAP operating
margin
|
|
6.6%
|
|
0.7%
|
|
19.7%
|
|
2.1%
|
Amortization of
intangibles
|
|
0.1%
|
|
0.5%
|
|
0.1%
|
|
0.5%
|
Settlement of
lawsuits
|
|
1.9%
|
|
0.3%
|
|
0.7%
|
|
0.1%
|
Impairment of
assets
|
|
21.7%
|
|
4.9%
|
|
7.0%
|
|
8.0%
|
Gain on sale of
businesses and assets
|
|
-0.1%
|
|
-0.1%
|
|
-0.3%
|
|
-0.5%
|
Costs and charges
related to debt refinancing
|
|
0.1%
|
|
0.0%
|
|
0.0%
|
|
0.0%
|
Loss (gain) on
insurance
|
|
-1.9%
|
|
1.6%
|
|
-0.6%
|
|
0.3%
|
Non-GAAP operating
margin
|
|
28.4%
|
|
8.0%
|
|
26.7%
|
|
10.5%
|
|
|
|
|
|
|
|
|
|
Reconciliation of
net cash provided by operating activities to free cash
flow
|
|
|
|
|
|
|
Net cash provided by
operating activities
|
|
$
9,774
|
|
$
3,485
|
|
$
41,991
|
|
$
15,632
|
Less: Maintenance
capital expenditures
|
|
1,299
|
|
40
|
|
5,907
|
|
2,151
|
Free cash
flow
|
|
$
8,475
|
|
$
3,445
|
|
$
36,084
|
|
$
13,481
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
RCI HOSPITALITY
HOLDINGS, INC.
|
SEGMENT
INFORMATION
|
(in
thousands)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For the Three
Months
|
|
For the Twelve
Months
|
|
|
|
Ended September
30,
|
|
Ended September
30,
|
|
|
|
2021
|
|
2020
|
|
2021
|
|
2020
|
Revenues
|
|
|
|
|
|
|
|
|
|
Nightclubs
|
|
$
40,333
|
|
$
13,134
|
|
$
137,348
|
|
$
88,373
|
|
Bombshells
|
|
14,403
|
|
15,531
|
|
56,621
|
|
43,215
|
|
Other
|
|
205
|
|
121
|
|
1,289
|
|
739
|
|
|
|
$
54,941
|
|
$
28,786
|
|
$
195,258
|
|
$
132,327
|
|
|
|
|
|
|
|
|
|
|
Income (loss) from
operations
|
|
|
|
|
|
|
|
|
|
Nightclubs
|
|
$
6,502
|
|
$
54
|
|
$
43,815
|
|
$
13,056
|
|
Bombshells
|
|
3,001
|
|
5,128
|
|
13,264
|
|
9,237
|
|
Other
|
|
(72)
|
|
(191)
|
|
35
|
|
(614)
|
|
General
corporate
|
|
(5,814)
|
|
(4,799)
|
|
(18,566)
|
|
(18,933)
|
|
|
|
$
3,617
|
|
$
192
|
|
$
38,548
|
|
$
2,746
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
RCI HOSPITALITY
HOLDINGS, INC.
|
NON-GAAP SEGMENT
INFORMATION
|
($ in
thousands)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For the Three
Months Ended September 30, 2021
|
|
For the Three
Months Ended September 30, 2020
|
|
|
Nightclubs
|
|
Bombshells
|
|
Other
|
|
Corporate
|
|
Total
|
|
Nightclubs
|
|
Bombshells
|
|
Other
|
|
Corporate
|
|
Total
|
Income (loss) from
operations
|
|
$
6,502
|
|
$
3,001
|
|
$
(72)
|
|
$
(5,814)
|
|
$
3,617
|
|
$
54
|
|
$
5,128
|
|
$
(191)
|
|
$
(4,799)
|
|
$
192
|
Amortization of
intangibles
|
|
46
|
|
3
|
|
-
|
|
-
|
|
49
|
|
48
|
|
4
|
|
96
|
|
-
|
|
148
|
Settlement of
lawsuits
|
|
38
|
|
21
|
|
-
|
|
1,010
|
|
1,069
|
|
100
|
|
-
|
|
-
|
|
-
|
|
100
|
Impairment of
assets
|
|
11,940
|
|
-
|
|
-
|
|
-
|
|
11,940
|
|
1,423
|
|
-
|
|
-
|
|
-
|
|
1,423
|
Costs and charges
related to debt refinancing
|
17
|
|
-
|
|
-
|
|
40
|
|
57
|
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
Loss (gain) on sale
of businesses and assets
|
|
(82)
|
|
16
|
|
-
|
|
(1)
|
|
(67)
|
|
(20)
|
|
-
|
|
-
|
|
3
|
|
(17)
|
Loss (gain) on
insurance
|
|
(1,044)
|
|
-
|
|
-
|
|
-
|
|
(1,044)
|
|
453
|
|
-
|
|
-
|
|
-
|
|
453
|
Non-GAAP operating
income (loss)
|
|
$
17,417
|
|
$
3,041
|
|
$
(72)
|
|
$
(4,765)
|
|
$
15,621
|
|
$
2,058
|
|
$
5,132
|
|
$
(95)
|
|
$
(4,796)
|
|
$
2,299
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP operating
margin
|
|
16.1%
|
|
20.8%
|
|
-35.1%
|
|
-10.6%
|
|
6.6%
|
|
0.4%
|
|
33.0%
|
|
-157.9%
|
|
-16.7%
|
|
0.7%
|
Non-GAAP operating
margin
|
|
43.2%
|
|
21.1%
|
|
-35.1%
|
|
-8.7%
|
|
28.4%
|
|
15.7%
|
|
33.0%
|
|
-78.5%
|
|
-16.7%
|
|
8.0%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For the Twelve
Months Ended September 30, 2021
|
|
For the Twelve
Months Ended September 30, 2020
|
|
|
Nightclubs
|
|
Bombshells
|
|
Other
|
|
Corporate
|
|
Total
|
|
Nightclubs
|
|
Bombshells
|
|
Other
|
|
Corporate
|
|
Total
|
Income (loss) from
operations
|
|
$
43,815
|
|
$
13,264
|
|
$
35
|
|
$
(18,566)
|
|
$
38,548
|
|
$
13,056
|
|
$
9,237
|
|
$
(614)
|
|
$
(18,933)
|
|
$
2,746
|
Amortization of
intangibles
|
|
187
|
|
14
|
|
57
|
|
-
|
|
258
|
|
211
|
|
15
|
|
383
|
|
-
|
|
609
|
Settlement of
lawsuits
|
|
275
|
|
59
|
|
5
|
|
1,010
|
|
1,349
|
|
174
|
|
-
|
|
-
|
|
-
|
|
174
|
Impairment of
assets
|
|
13,612
|
|
-
|
|
-
|
|
-
|
|
13,612
|
|
10,370
|
|
245
|
|
-
|
|
-
|
|
10,615
|
Costs and charges
related to debt refinancing
|
17
|
|
-
|
|
-
|
|
40
|
|
57
|
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
Loss (gain) on sale
of businesses and assets
|
|
(580)
|
|
72
|
|
-
|
|
(14)
|
|
(522)
|
|
(639)
|
|
16
|
|
-
|
|
(38)
|
|
(661)
|
Loss (gain) on
insurance
|
|
(1,209)
|
|
-
|
|
-
|
|
(44)
|
|
(1,253)
|
|
433
|
|
-
|
|
-
|
|
(13)
|
|
420
|
Non-GAAP operating
income (loss)
|
|
$
56,117
|
|
$
13,409
|
|
$
97
|
|
$
(17,574)
|
|
$
52,049
|
|
$
23,605
|
|
$
9,513
|
|
$
(231)
|
|
$
(18,984)
|
|
$
13,903
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP operating
margin
|
|
31.9%
|
|
23.4%
|
|
2.7%
|
|
-9.5%
|
|
19.7%
|
|
14.8%
|
|
21.4%
|
|
-83.1%
|
|
-14.3%
|
|
2.1%
|
Non-GAAP operating
margin
|
|
40.9%
|
|
23.7%
|
|
7.5%
|
|
-9.0%
|
|
26.7%
|
|
26.7%
|
|
22.0%
|
|
-31.3%
|
|
-14.3%
|
|
10.5%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
RCI HOSPITALITY
HOLDINGS, INC.
|
CONSOLIDATED
STATEMENTS OF CASH FLOWS
|
(in
thousands)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For the Three
Months Ended
|
|
For the Twelve
Months Ended
|
|
|
|
|
September 30,
2021
|
|
September 30,
2020
|
|
September 30,
2021
|
|
September 30,
2020
|
CASH FLOWS FROM
OPERATING ACTIVITIES
|
|
|
|
|
|
|
|
|
Net income
(loss)
|
|
$
2,288
|
|
$
(2,885)
|
|
$
30,150
|
|
$
(6,312)
|
Adjustments to
reconcile net income (loss) to net cash
|
|
|
|
|
|
|
|
|
provided by operating
activities:
|
|
|
|
|
|
|
|
|
|
Depreciation and
amortization
|
|
2,041
|
|
2,140
|
|
8,238
|
|
8,836
|
|
Deferred income tax
expense (benefit)
|
|
(823)
|
|
249
|
|
(1,253)
|
|
(1,268)
|
|
Gain on sale of
businesses and assets
|
|
(88)
|
|
(28)
|
|
(714)
|
|
(777)
|
|
Impairment of
assets
|
|
11,940
|
|
1,423
|
|
13,612
|
|
10,615
|
|
Unrealized loss
(gain) on equity securities
|
|
26
|
|
(39)
|
|
84
|
|
64
|
|
Amortization and
write-off of debt discount and issuance costs
|
151
|
|
42
|
|
311
|
|
236
|
|
Gain on debt
extinguishment
|
|
-
|
|
-
|
|
(5,298)
|
|
-
|
|
Noncash lease
expense
|
|
447
|
|
416
|
|
1,729
|
|
1,660
|
|
Loss (gain) on
insurance
|
|
(1,043)
|
|
629
|
|
(1,337)
|
|
596
|
|
Doubtful accounts
expense (reversal) on notes receivable
|
|
(58)
|
|
107
|
|
(80)
|
|
602
|
|
Changes in operating
assets and liabilities:
|
|
|
|
|
|
|
|
|
|
|
Accounts
receivable
|
|
(5,078)
|
|
(241)
|
|
(769)
|
|
(294)
|
|
|
Inventories
|
|
(180)
|
|
255
|
|
(287)
|
|
226
|
|
|
Prepaid expenses,
other current assets, and other assets
|
|
1,774
|
|
(3,309)
|
|
4,120
|
|
1,633
|
|
|
Accounts payable,
accrued, and other liabilities
|
|
(1,623)
|
|
4,726
|
|
(6,515)
|
|
(185)
|
|
Net cash provided by
operating activities
|
|
9,774
|
|
3,485
|
|
41,991
|
|
15,632
|
CASH FLOWS FROM
INVESTING ACTIVITIES
|
|
|
|
|
|
|
|
|
Proceeds from sale of
businesses and assets
|
|
2,202
|
|
180
|
|
5,415
|
|
2,221
|
Proceeds from
insurance
|
|
858
|
|
-
|
|
1,152
|
|
945
|
Proceeds from notes
receivable
|
|
35
|
|
21
|
|
130
|
|
1,576
|
Payments for property
and equipment and intangible assets
|
|
(2,723)
|
|
(171)
|
|
(13,511)
|
|
(5,736)
|
|
Net cash provided by
(used in) investing activities
|
|
372
|
|
30
|
|
(6,814)
|
|
(994)
|
CASH FLOWS FROM
FINANCING ACTIVITIES
|
|
|
|
|
|
|
|
|
Proceeds from debt
obligations
|
|
36,314
|
|
-
|
|
38,490
|
|
6,503
|
Payments on debt
obligations
|
|
(38,333)
|
|
(1,343)
|
|
(49,178)
|
|
(8,832)
|
Purchase of treasury
stock
|
|
-
|
|
(996)
|
|
(1,794)
|
|
(9,484)
|
Payment of
dividends
|
|
(360)
|
|
(366)
|
|
(1,440)
|
|
(1,286)
|
Payment of loan
origination costs
|
|
(1,174)
|
|
-
|
|
(1,174)
|
|
-
|
Distribution to
noncontrolling interests
|
|
-
|
|
-
|
|
-
|
|
(31)
|
|
Net cash used in
financing activities
|
|
(3,553)
|
|
(2,705)
|
|
(15,096)
|
|
(13,130)
|
NET INCREASE IN CASH
AND CASH EQUIVALENTS
|
|
6,593
|
|
810
|
|
20,081
|
|
1,508
|
CASH AND CASH
EQUIVALENTS AT BEGINNING OF PERIOD
|
|
29,093
|
|
14,795
|
|
15,605
|
|
14,097
|
CASH AND CASH
EQUIVALENTS AT END OF PERIOD
|
|
$
35,686
|
|
$
15,605
|
|
$
35,686
|
|
$
15,605
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
RCI HOSPITALITY
HOLDINGS, INC.
|
CONSOLIDATED
BALANCE SHEETS
|
(in
thousands)
|
|
|
|
|
|
|
|
|
|
|
|
|
September
30,
|
|
September
30,
|
|
|
|
|
|
2021
|
|
2020
|
|
ASSETS
|
|
|
|
|
Current
assets
|
|
|
|
|
|
Cash and cash
equivalents
|
$
35,686
|
|
$
15,605
|
|
|
Accounts receivable,
net
|
7,570
|
|
6,767
|
|
|
Current portion of
notes receivable
|
220
|
|
201
|
|
|
Inventories
|
2,659
|
|
2,372
|
|
|
Prepaid expenses and
other current assets
|
1,928
|
|
6,488
|
|
|
Assets held for
sale
|
4,887
|
|
-
|
|
|
|
Total current
assets
|
52,950
|
|
31,433
|
|
Property and
equipment, net
|
175,952
|
|
181,383
|
|
Operating lease
right-of-use assets, net
|
24,308
|
|
25,546
|
|
Notes receivable, net
of current portion
|
2,839
|
|
2,908
|
|
Goodwill
|
39,379
|
|
45,686
|
|
Intangibles,
net
|
67,824
|
|
73,077
|
|
Other
assets
|
1,367
|
|
900
|
|
|
|
|
Total
assets
|
$
364,619
|
|
$
360,933
|
|
|
|
|
|
|
|
|
|
LIABILITIES AND
EQUITY
|
|
|
|
|
Current
liabilities
|
|
|
|
|
|
Accounts
payable
|
$
4,408
|
|
$
4,799
|
|
|
Accrued
liabilities
|
10,403
|
|
14,573
|
|
|
Current portion of
long-term debt, net
|
6,434
|
|
16,304
|
|
|
Current portion of
operating lease liabilities
|
1,780
|
|
1,628
|
|
|
|
Total current
liabilities
|
23,025
|
|
37,304
|
|
Deferred tax
liability, net
|
19,137
|
|
20,390
|
|
Long-term debt, net
of current portion and debt discount and issuance costs
|
118,734
|
|
125,131
|
|
Operating lease
liabilities, net of current portion
|
24,150
|
|
25,439
|
|
Other long-term
liabilities
|
350
|
|
362
|
|
|
|
Total
liabilities
|
185,396
|
|
208,626
|
|
|
|
|
|
|
|
|
|
Commitments and
contingencies
|
|
|
|
|
|
|
|
|
|
|
|
|
Equity
|
|
|
|
|
|
|
Preferred
stock
|
-
|
|
-
|
|
|
Common
stock
|
90
|
|
91
|
|
|
Additional paid-in
capital
|
50,040
|
|
51,833
|
|
|
Retained
earnings
|
129,693
|
|
100,797
|
|
|
|
Total RCIHH
stockholders' equity
|
179,823
|
|
152,721
|
|
|
Noncontrolling
interests
|
(600)
|
|
(414)
|
|
|
|
Total
equity
|
179,223
|
|
152,307
|
|
|
|
|
Total liabilities and
equity
|
$
364,619
|
|
$
360,933
|
|
|
|
|
|
|
|
|
|
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SOURCE RCI Hospitality Holdings, Inc.