Twitter Spaces Conference Call at 4:30
PM ET Today; Meet Management at 7 PM
ET Tonight
HOUSTON, Aug. 9, 2022
/PRNewswire/ -- RCI Hospitality Holdings, Inc. (Nasdaq: RICK) today
reported results and filed its Form 10-Q for the fiscal 2022 third
quarter and nine months ended June
30, 2022.
Summary Financials
|
3Q22
|
Change YoY
|
9M22
|
Change YoY
|
Total Revenues
|
$70.7M
|
22.2 %
|
$196.2M
|
39.9 %
|
EPS
|
$1.48
|
8.0 %
|
$3.76
|
20.9 %
|
Non-GAAP EPS*
|
$1.60
|
18.0 %
|
$3.89
|
55.5 %
|
Net Cash from Operating
Activities
|
$18.9M
|
26.2 %
|
$46.8M
|
45.1 %
|
Free Cash Flow*
|
$18.0M
|
39.1 %
|
$44.4M
|
60.7 %
|
Net Income Attributable to RCIHH Common
Stockholders
|
$13.9M
|
13.0 %
|
$35.4M
|
26.4 %
|
Adjusted EBITDA*
|
$24.6M
|
20.6 %
|
$62.5M
|
46.5 %
|
Basic & Diluted Shares
|
9.390M
|
4.3 %
|
9.428M
|
4.7 %
|
* See "Non-GAAP
Financial Measures" below.
|
Status FY22 Share Buybacks**
|
Repurchased Shares
|
Cash Used for Repurchase
|
Average Price Per Share
|
2Q22
|
45,643
|
$2.85M
|
$62.33
|
3Q22
|
168,069
|
$9.21M
|
$54.81
|
Current Quarter to Date as of
8/5/22
|
42,250
|
$2.25M
|
$53.35
|
Total
|
255,962
|
$14.31M
|
$55.91
|
** No shares
repurchased in 1Q22.
|
Eric Langan, President and
CEO of RCI Hospitality Holdings, Inc., said: "RCI's
third quarter benefited from higher sales, a continued rebound in
Nightclubs service revenues, and a sequential improvement in
Bombshells. This resulted in particularly strong free cash flow and
adjusted EBITDA. Net cash from operating activities and FCF were
further enhanced by receipt of a $2.2
million previously discussed tax refund. We ended 3Q22 with
$37.5 million in cash after utilizing
more than $12 million for share
buybacks for the nine months, the cash portion of the Playmates
Club acquisition, and the down payment for the 13th company-owned
Bombshells location. To date in 4Q22, we've continued our expansion
by acquiring clubs in Odessa, TX
and South Florida, and buying back
more shares."
Conference Call at 4:30 PM ET
Today
Participants need to use Twitter Spaces on their
mobile phones to ask questions during the Q&A
Twitter Spaces
|
Telephone
|
Webcast, Slides & Replay
|
- Follow
@RicksCEO, @ZeroTangoTango,
@BradleyChhay, or
@itsmarkmoran, and go
to:
https://twitter.com/i/spaces/1PlJQabdPNqJE
|
- Toll Free
888-506-0062
- International:
973-528-0011
- Passcode:
353724
|
-
https://www.webcaster4.com/Webcast/Page/2209/46217
|
Meet Management at 7:00 PM ET
Tonight
- Investors are invited to Meet Management at one of RCI's top
revenue generating clubs
- Rick's Cabaret New York, 50 W 33rd St, New York, NY 10001
- RSVP your contact information to gary.fishman@anreder.com by
5:00 PM ET today
3Q22 Nightclubs Segment
- Nightclubs generated revenues of $54.7
million at an operating margin of 41.1% (42.7% non-GAAP),
resulting in segment operating income of $22.5 million ($23.3
million non-GAAP).
- Revenues increased 33.3% compared to 3Q21. Acquisitions
contributed $11.8 million of 3Q22
sales. Same-store sales grew 4.8%. High-margin service revenues
expanded 50.8% year-over-year. The third quarter was the first
period since 1Q20 not affected by COVID.
- Compared to 2Q22, revenues increased 13.5%, non-GAAP operating
margin improved 321 basis points, and non-GAAP segment income
increased 22.7%, reflecting the continued rebound in Northern clubs
and service revenues, and higher margins from acquisitions.
3Q22 Bombshells Segment
- Bombshells generated revenues of $15.8
million at an operating margin of 19.4% (23.6% non-GAAP),
resulting in segment operating income of $3.1 million ($3.7
million non-GAAP).
- Revenues declined 1.8% compared to an unusually strong 3Q21,
when Bombshells was one of the few bar and restaurant chains open
in Texas due to the state of COVID
at that time. Otherwise, Bombshells saw typical seasonal
trends.
- Compared to 2Q22, revenues increased 3.0%, non-GAAP operating
margin improved 94 bps, and non-GAAP segment income increased
7.2%.
3Q22 Consolidated (Comparisons are to 3Q21 and % are
of total revenues unless indicated otherwise)
- Cost of goods sold (13.0% vs. 15.3%) reflected the increased
sales mix of higher-margin service revenues (36.0% vs. 29.2%).
- Salaries and wages (24.6% vs. 24.0%) and SG&A (27.7% vs.
25.4%) reflected new employees and increased expenses related to
new and acquired locations.
- Operating margin was 29.0% vs. 32.0% (31.2% vs. 31.8%
non-GAAP).
- Interest expense (4.3% vs. 3.9%) primarily reflected higher
debt from FY22 acquisitions.
- Income tax expense was $3.8
million compared to $4.0
million. The effective tax rate was 21.3% vs. 24.4%.
- Weighted average shares outstanding increased 4.3% due to
shares issued for clubs acquired in October
2021, partially offset by later share repurchases.
- Debt was $188.0 million at
6/30/22 compared to $178.1 million at 3/31/22. The increase primarily
reflected seller financing used in the May
2022 Playmates acquisition.
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
decide 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) 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) impairment of assets, (c) gains or losses on sale
of businesses and assets, (d) gains or losses on insurance, (e)
unrealized gains or losses on equity securities, (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 21.6% and 24.3%
effective tax rate of the pre-tax non-GAAP income before taxes for
the nine months ended June 30, 2022
and 2021, 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)
www.rcihospitality.com
With more than 60 units, RCI Hospitality Holdings, Inc., through
its subsidiaries, is the country's leading company in adult
nightclubs 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, Scarlett's Cabaret, Diamond
Cabaret, and PT's Showclub. 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 INCOME
|
(in thousands, except
per share, number of shares and percentage data)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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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,
|
|
|
|
|
|
2022
|
|
2021
|
|
2022
|
|
2021
|
|
|
|
|
|
Amount
|
|
% of
Revenue
|
|
Amount
|
|
% of
Revenue
|
|
Amount
|
|
% of
Revenue
|
|
Amount
|
|
% of
Revenue
|
Revenues
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Sales of alcoholic
beverages
|
|
$
29,738
|
|
42.1 %
|
|
$
25,092
|
|
43.4 %
|
|
$
83,504
|
|
42.6 %
|
|
$
62,725
|
|
44.7 %
|
|
Sales of food and
merchandise
|
|
11,574
|
|
16.4 %
|
|
12,058
|
|
20.8 %
|
|
33,628
|
|
17.1 %
|
|
30,205
|
|
21.5 %
|
|
Service
revenues
|
|
25,444
|
|
36.0 %
|
|
16,880
|
|
29.2 %
|
|
67,821
|
|
34.6 %
|
|
38,442
|
|
27.4 %
|
|
Other
|
|
3,958
|
|
5.6 %
|
|
3,830
|
|
6.6 %
|
|
11,289
|
|
5.8 %
|
|
8,945
|
|
6.4 %
|
|
|
Total
revenues
|
|
70,714
|
|
100.0 %
|
|
57,860
|
|
100.0 %
|
|
196,242
|
|
100.0 %
|
|
140,317
|
|
100.0 %
|
Operating
expenses
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost of goods
sold
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Alcoholic beverages
sold
|
|
5,177
|
|
17.4 %
|
|
4,621
|
|
18.4 %
|
|
14,907
|
|
17.9 %
|
|
11,613
|
|
18.5 %
|
|
|
Food and merchandise
sold
|
|
3,959
|
|
34.2 %
|
|
4,043
|
|
33.5 %
|
|
11,756
|
|
35.0 %
|
|
9,961
|
|
33.0 %
|
|
|
Service and
other
|
|
46
|
|
0.2 %
|
|
208
|
|
1.0 %
|
|
170
|
|
0.2 %
|
|
304
|
|
0.6 %
|
|
|
|
Total cost of goods
sold (exclusive of items shown below)
|
|
9,182
|
|
13.0 %
|
|
8,872
|
|
15.3 %
|
|
26,833
|
|
13.7 %
|
|
21,878
|
|
15.6 %
|
|
Salaries and
wages
|
|
17,387
|
|
24.6 %
|
|
13,870
|
|
24.0 %
|
|
50,422
|
|
25.7 %
|
|
36,556
|
|
26.1 %
|
|
Selling, general and
administrative
|
|
19,572
|
|
27.7 %
|
|
14,697
|
|
25.4 %
|
|
56,495
|
|
28.8 %
|
|
39,467
|
|
28.1 %
|
|
Depreciation and
amortization
|
|
2,565
|
|
3.6 %
|
|
2,057
|
|
3.6 %
|
|
7,636
|
|
3.9 %
|
|
6,197
|
|
4.4 %
|
|
Other charges (gains),
net
|
|
1,501
|
|
2.1 %
|
|
(143)
|
|
-0.2 %
|
|
1,357
|
|
0.7 %
|
|
1,288
|
|
0.9 %
|
|
|
Total operating
expenses
|
|
50,207
|
|
71.0 %
|
|
39,353
|
|
68.0 %
|
|
142,743
|
|
72.7 %
|
|
105,386
|
|
75.1 %
|
Income from
operations
|
|
20,507
|
|
29.0 %
|
|
18,507
|
|
32.0 %
|
|
53,499
|
|
27.3 %
|
|
34,931
|
|
24.9 %
|
Other income
(expenses)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest
expense
|
|
(3,028)
|
|
-4.3 %
|
|
(2,281)
|
|
-3.9 %
|
|
(8,496)
|
|
-4.3 %
|
|
(7,079)
|
|
-5.0 %
|
|
Interest
income
|
|
103
|
|
0.1 %
|
|
72
|
|
0.1 %
|
|
321
|
|
0.2 %
|
|
194
|
|
0.1 %
|
|
Non-operating gains,
net
|
|
127
|
|
0.2 %
|
|
9
|
|
0.0 %
|
|
211
|
|
0.1 %
|
|
5,356
|
|
3.8 %
|
Income before income
taxes
|
|
17,709
|
|
25.0 %
|
|
16,307
|
|
28.2 %
|
|
45,535
|
|
23.2 %
|
|
33,402
|
|
23.8 %
|
Income tax
expense
|
|
3,767
|
|
5.3 %
|
|
3,986
|
|
6.9 %
|
|
10,056
|
|
5.1 %
|
|
5,540
|
|
3.9 %
|
Net income
|
|
13,942
|
|
19.7 %
|
|
12,321
|
|
21.3 %
|
|
35,479
|
|
18.1 %
|
|
27,862
|
|
19.9 %
|
Net loss (income)
attributable to noncontrolling interests
|
|
(40)
|
|
-0.1 %
|
|
(19)
|
|
0.0 %
|
|
(50)
|
|
0.0 %
|
|
174
|
|
0.1 %
|
Net income attributable
to RCIHH common shareholders
|
|
$
13,902
|
|
19.7 %
|
|
$
12,302
|
|
21.3 %
|
|
$
35,429
|
|
18.1 %
|
|
$
28,036
|
|
20.0 %
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings per
share
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic and
diluted
|
|
$
1.48
|
|
|
|
$
1.37
|
|
|
|
$
3.76
|
|
|
|
$
3.11
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average shares
outstanding
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic and
diluted
|
|
9,389,675
|
|
|
|
8,999,910
|
|
|
|
9,428,461
|
|
|
|
9,006,373
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Dividends per
share
|
|
$
0.05
|
|
|
|
$
0.04
|
|
|
|
$
0.14
|
|
|
|
$
0.12
|
|
|
|
|
|
|
|
|
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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 Nine
Months
|
|
|
Ended June
30,
|
|
Ended June
30,
|
|
|
2022
|
|
2021
|
|
2022
|
|
2021
|
Reconciliation of
GAAP net income to Adjusted EBITDA
|
|
|
|
|
|
|
|
|
Net income attributable
to RCIHH common stockholders
|
|
$ 13,902
|
|
$ 12,302
|
|
$ 35,429
|
|
$ 28,036
|
Income tax
expense
|
|
3,767
|
|
3,986
|
|
10,056
|
|
5,540
|
Interest expense,
net
|
|
2,925
|
|
2,209
|
|
8,175
|
|
6,885
|
Settlement of
lawsuits
|
|
132
|
|
127
|
|
709
|
|
280
|
Impairment of
assets
|
|
1,722
|
|
271
|
|
1,722
|
|
1,672
|
Gain on sale of
businesses and assets
|
|
(266)
|
|
(541)
|
|
(666)
|
|
(455)
|
Gain on debt
extinguishment
|
|
(53)
|
|
-
|
|
(138)
|
|
(5,329)
|
Unrealized loss on
equity securities
|
|
-
|
|
(9)
|
|
1
|
|
58
|
Gain on
insurance
|
|
(87)
|
|
-
|
|
(408)
|
|
(209)
|
Depreciation and
amortization
|
|
2,565
|
|
2,057
|
|
7,636
|
|
6,197
|
Adjusted
EBITDA
|
|
$ 24,607
|
|
$ 20,402
|
|
$ 62,516
|
|
$ 42,675
|
|
|
|
|
|
|
|
|
|
Reconciliation of
GAAP net income to non-GAAP net income
|
|
|
|
|
|
|
|
|
Net income attributable
to RCIHH common stockholders
|
|
$ 13,902
|
|
$ 12,302
|
|
$ 35,429
|
|
$ 28,036
|
Amortization of
intangibles
|
|
25
|
|
51
|
|
124
|
|
209
|
Settlement of
lawsuits
|
|
132
|
|
127
|
|
709
|
|
280
|
Impairment of
assets
|
|
1,722
|
|
271
|
|
1,722
|
|
1,672
|
Gain on sale of
businesses and assets
|
|
(266)
|
|
(541)
|
|
(666)
|
|
(455)
|
Gain on debt
extinguishment
|
|
(53)
|
|
-
|
|
(138)
|
|
(5,329)
|
Unrealized loss on
equity securities
|
|
-
|
|
(9)
|
|
1
|
|
58
|
Gain on
insurance
|
|
(87)
|
|
-
|
|
(408)
|
|
(209)
|
Net income tax
effect
|
|
(312)
|
|
39
|
|
(59)
|
|
(1,702)
|
Non-GAAP net
income
|
|
$ 15,063
|
|
$ 12,240
|
|
$ 36,714
|
|
$ 22,560
|
|
|
|
|
|
|
|
|
|
Reconciliation of
GAAP diluted earnings per share to non-GAAP diluted earnings per
share
|
|
|
|
|
|
Diluted
shares
|
|
9,389,675
|
|
8,999,910
|
|
9,428,461
|
|
9,006,373
|
GAAP diluted earnings
per share
|
|
$
1.48
|
|
$
1.37
|
|
$
3.76
|
|
$
3.11
|
Amortization of
intangibles
|
|
0.00
|
|
0.01
|
|
0.01
|
|
0.02
|
Settlement of
lawsuits
|
|
0.01
|
|
0.01
|
|
0.08
|
|
0.03
|
Impairment of
assets
|
|
0.18
|
|
0.03
|
|
0.18
|
|
0.19
|
Gain on sale of
businesses and assets
|
|
(0.03)
|
|
(0.06)
|
|
(0.07)
|
|
(0.05)
|
Gain on debt
extinguishment
|
|
(0.01)
|
|
-
|
|
(0.01)
|
|
(0.59)
|
Unrealized loss on
equity securities
|
|
-
|
|
(0.00)
|
|
0.00
|
|
0.01
|
Gain on
insurance
|
|
(0.01)
|
|
-
|
|
(0.04)
|
|
(0.02)
|
Net income tax
effect
|
|
(0.03)
|
|
0.00
|
|
(0.01)
|
|
(0.19)
|
Non-GAAP diluted
earnings per share
|
|
$
1.60
|
|
$
1.36
|
|
$
3.89
|
|
$
2.50
|
|
|
|
|
|
|
|
|
|
Reconciliation of
GAAP operating income to non-GAAP operating income
|
|
|
|
|
|
|
|
|
Income from
operations
|
|
$ 20,507
|
|
$ 18,507
|
|
$ 53,499
|
|
$ 34,931
|
Amortization of
intangibles
|
|
25
|
|
51
|
|
124
|
|
209
|
Settlement of
lawsuits
|
|
132
|
|
127
|
|
709
|
|
280
|
Impairment of
assets
|
|
1,722
|
|
271
|
|
1,722
|
|
1,672
|
Gain on sale of
businesses and assets
|
|
(266)
|
|
(541)
|
|
(666)
|
|
(455)
|
Gain on
insurance
|
|
(87)
|
|
-
|
|
(408)
|
|
(209)
|
Non-GAAP operating
income
|
|
$ 22,033
|
|
$ 18,415
|
|
$ 54,980
|
|
$ 36,428
|
|
|
|
|
|
|
|
|
|
Reconciliation of
GAAP operating margin to non-GAAP operating margin
|
|
|
|
|
|
|
|
|
GAAP operating
margin
|
|
29.0 %
|
|
32.0 %
|
|
27.3 %
|
|
24.9 %
|
Amortization of
intangibles
|
|
0.0 %
|
|
0.1 %
|
|
0.1 %
|
|
0.1 %
|
Settlement of
lawsuits
|
|
0.2 %
|
|
0.2 %
|
|
0.4 %
|
|
0.2 %
|
Impairment of
assets
|
|
2.4 %
|
|
0.5 %
|
|
0.9 %
|
|
1.2 %
|
Gain on sale of
businesses and assets
|
|
-0.4 %
|
|
-0.9 %
|
|
-0.3 %
|
|
-0.3 %
|
Gain on
insurance
|
|
-0.1 %
|
|
0.0 %
|
|
-0.2 %
|
|
-0.1 %
|
Non-GAAP operating
margin
|
|
31.2 %
|
|
31.8 %
|
|
28.0 %
|
|
26.0 %
|
|
|
|
|
|
|
|
|
|
Reconciliation of
net cash provided by operating activities to free cash
flow
|
|
|
|
|
|
|
|
Net cash provided by
operating activities
|
|
$ 18,893
|
|
$ 14,971
|
|
$ 46,754
|
|
$ 32,217
|
Less: Maintenance
capital expenditures
|
|
869
|
|
2,017
|
|
2,385
|
|
4,608
|
Free cash
flow
|
|
$ 18,024
|
|
$ 12,954
|
|
$ 44,369
|
|
$ 27,609
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
RCI HOSPITALITY
HOLDINGS, INC.
|
SEGMENT
INFORMATION
|
(in
thousands)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For the Three
Months
|
|
For the Nine
Months
|
|
|
|
Ended June
30,
|
|
Ended June
30,
|
|
|
|
2022
|
|
2021
|
|
2022
|
|
2021
|
Revenues
|
|
|
|
|
|
|
|
|
|
Nightclubs
|
|
$
54,684
|
|
$
41,031
|
|
$ 149,639
|
|
$
97,015
|
|
Bombshells
|
|
15,789
|
|
16,077
|
|
45,893
|
|
42,218
|
|
Other
|
|
241
|
|
752
|
|
710
|
|
1,084
|
|
|
|
$
70,714
|
|
$
57,860
|
|
$ 196,242
|
|
$ 140,317
|
|
|
|
|
|
|
|
|
|
|
Income (loss) from
operations
|
|
|
|
|
|
|
|
|
|
Nightclubs
|
|
$
22,459
|
|
$
18,350
|
|
$
60,321
|
|
$
37,313
|
|
Bombshells
|
|
3,065
|
|
4,404
|
|
9,335
|
|
10,263
|
|
Other
|
|
(82)
|
|
321
|
|
(159)
|
|
107
|
|
General
corporate
|
|
(4,935)
|
|
(4,568)
|
|
(15,998)
|
|
(12,752)
|
|
|
|
$
20,507
|
|
$
18,507
|
|
$
53,499
|
|
$
34,931
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
RCI HOSPITALITY
HOLDINGS, INC.
|
NON-GAAP SEGMENT
INFORMATION
|
($ in
thousands)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For the Three Months
Ended June 30, 2022
|
|
For the Three Months
Ended June 30, 2021
|
|
|
Nightclubs
|
|
Bombshells
|
|
Other
|
|
Corporate
|
|
Total
|
|
Nightclubs
|
|
Bombshells
|
|
Other
|
|
Corporate
|
|
Total
|
Income (loss) from
operations
|
|
$ 22,459
|
|
$
3,065
|
|
$
(82)
|
|
$ (4,935)
|
|
$ 20,507
|
|
$ 18,350
|
|
$
4,404
|
|
$
321
|
|
$ (4,568)
|
|
$ 18,507
|
Amortization of
intangibles
|
|
23
|
|
1
|
|
-
|
|
1
|
|
25
|
|
47
|
|
4
|
|
-
|
|
-
|
|
51
|
Settlement of
lawsuits
|
|
124
|
|
8
|
|
-
|
|
-
|
|
132
|
|
123
|
|
4
|
|
-
|
|
-
|
|
127
|
Impairment of
assets
|
|
1,072
|
|
650
|
|
-
|
|
-
|
|
1,722
|
|
271
|
|
-
|
|
-
|
|
-
|
|
271
|
Loss (gain) on sale of
businesses and assets
|
|
(264)
|
|
-
|
|
-
|
|
(2)
|
|
(266)
|
|
(512)
|
|
9
|
|
-
|
|
(38)
|
|
(541)
|
Gain on
insurance
|
|
(87)
|
|
-
|
|
-
|
|
-
|
|
(87)
|
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
Non-GAAP operating
income (loss)
|
|
$ 23,327
|
|
$
3,724
|
|
$
(82)
|
|
$ (4,936)
|
|
$ 22,033
|
|
$ 18,279
|
|
$
4,421
|
|
$
321
|
|
$ (4,606)
|
|
$ 18,415
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP operating
margin
|
|
41.1 %
|
|
19.4 %
|
|
-34.0 %
|
|
-7.0 %
|
|
29.0 %
|
|
44.7 %
|
|
27.4 %
|
|
42.7 %
|
|
-7.9 %
|
|
32.0 %
|
Non-GAAP operating
margin
|
|
42.7 %
|
|
23.6 %
|
|
-34.0 %
|
|
-7.0 %
|
|
31.2 %
|
|
44.5 %
|
|
27.5 %
|
|
42.7 %
|
|
-8.0 %
|
|
31.8 %
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For the Nine Months
Ended June 30, 2022
|
|
For the Nine Months
Ended June 30, 2021
|
|
|
Nightclubs
|
|
Bombshells
|
|
Other
|
|
Corporate
|
|
Total
|
|
Nightclubs
|
|
Bombshells
|
|
Other
|
|
Corporate
|
|
Total
|
Income (loss) from
operations
|
|
$ 60,321
|
|
$
9,335
|
|
$
(159)
|
|
$
(15,998)
|
|
$ 53,499
|
|
$ 37,313
|
|
$ 10,263
|
|
$
107
|
|
$
(12,752)
|
|
$ 34,931
|
Amortization of
intangibles
|
|
117
|
|
5
|
|
-
|
|
2
|
|
124
|
|
141
|
|
11
|
|
57
|
|
-
|
|
209
|
Settlement of
lawsuits
|
|
578
|
|
18
|
|
-
|
|
113
|
|
709
|
|
237
|
|
38
|
|
5
|
|
-
|
|
280
|
Impairment of
assets
|
|
1,072
|
|
650
|
|
-
|
|
-
|
|
1,722
|
|
1,672
|
|
-
|
|
-
|
|
-
|
|
1,672
|
Loss (gain) on sale of
businesses and assets
|
|
(344)
|
|
17
|
|
-
|
|
(339)
|
|
(666)
|
|
(498)
|
|
56
|
|
-
|
|
(13)
|
|
(455)
|
Gain on
insurance
|
|
(408)
|
|
-
|
|
-
|
|
-
|
|
(408)
|
|
(165)
|
|
-
|
|
-
|
|
(44)
|
|
(209)
|
Non-GAAP operating
income (loss)
|
|
$ 61,336
|
|
$ 10,025
|
|
$
(159)
|
|
$
(16,222)
|
|
$ 54,980
|
|
$ 38,700
|
|
$ 10,368
|
|
$
169
|
|
$
(12,809)
|
|
$ 36,428
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP operating
margin
|
|
40.3 %
|
|
20.3 %
|
|
-22.4 %
|
|
-8.2 %
|
|
27.3 %
|
|
38.5 %
|
|
24.3 %
|
|
9.9 %
|
|
-9.1 %
|
|
24.9 %
|
Non-GAAP operating
margin
|
|
41.0 %
|
|
21.8 %
|
|
-22.4 %
|
|
-8.3 %
|
|
28.0 %
|
|
39.9 %
|
|
24.6 %
|
|
15.6 %
|
|
-9.1 %
|
|
26.0 %
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
RCI HOSPITALITY
HOLDINGS, INC.
|
CONSOLIDATED
STATEMENTS OF CASH FLOWS
|
(in
thousands)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For the Three Months
Ended
|
|
For the Nine Months
Ended
|
|
|
|
|
June 30,
2022
|
|
June 30,
2021
|
|
June 30,
2022
|
|
June 30,
2021
|
CASH FLOWS FROM
OPERATING ACTIVITIES
|
|
|
|
|
|
|
|
|
Net income
|
|
$
13,942
|
|
$
12,321
|
|
$
35,479
|
|
$
27,862
|
Adjustments to
reconcile net income to net cash
|
|
|
|
|
|
|
|
|
provided by operating
activities:
|
|
|
|
|
|
|
|
|
|
Depreciation and
amortization
|
|
2,565
|
|
2,057
|
|
7,636
|
|
6,197
|
|
Deferred income tax
benefit
|
|
(409)
|
|
(430)
|
|
(409)
|
|
(430)
|
|
Gain on sale of
businesses and assets
|
|
(574)
|
|
(712)
|
|
(1,282)
|
|
(626)
|
|
Impairment of
assets
|
|
1,722
|
|
271
|
|
1,722
|
|
1,672
|
|
Unrealized loss on
equity securities
|
|
-
|
|
(9)
|
|
1
|
|
58
|
|
Amortization of debt
discount and issuance costs
|
|
63
|
|
59
|
|
199
|
|
160
|
|
Gain on debt
extinguishment
|
|
-
|
|
-
|
|
(83)
|
|
(5,298)
|
|
Noncash lease
expense
|
|
487
|
|
434
|
|
1,725
|
|
1,282
|
|
Gain on
insurance
|
|
(87)
|
|
-
|
|
(408)
|
|
(294)
|
|
Doubtful accounts
expense (reversal) on notes receivable
|
|
700
|
|
36
|
|
753
|
|
(22)
|
|
Changes in operating
assets and liabilities:
|
|
|
|
|
|
|
|
|
|
|
Accounts
receivable
|
|
2,346
|
|
1,172
|
|
3,411
|
|
4,309
|
|
|
Inventories
|
|
(216)
|
|
(76)
|
|
(492)
|
|
(107)
|
|
|
Prepaid expenses, other
current assets and other assets
|
|
2,089
|
|
852
|
|
(3,271)
|
|
2,346
|
|
|
Accounts payable,
accrued and other liabilities
|
|
(3,735)
|
|
(1,004)
|
|
1,773
|
|
(4,892)
|
|
Net cash provided by
operating activities
|
|
18,893
|
|
14,971
|
|
46,754
|
|
32,217
|
CASH FLOWS FROM
INVESTING ACTIVITIES
|
|
|
|
|
|
|
|
|
Proceeds from sale of
businesses and assets
|
|
1,701
|
|
3,205
|
|
4,611
|
|
3,213
|
Proceeds from
insurance
|
|
30
|
|
-
|
|
515
|
|
294
|
Proceeds from notes
receivable
|
|
45
|
|
34
|
|
127
|
|
95
|
Payments for property
and equipment and intangible assets
|
|
(3,183)
|
|
(4,070)
|
|
(17,173)
|
|
(10,788)
|
Acquisition of
businesses, net of cash acquired
|
|
(5,000)
|
|
-
|
|
(44,302)
|
|
-
|
|
Net cash used in
investing activities
|
|
(6,407)
|
|
(831)
|
|
(56,222)
|
|
(7,186)
|
CASH FLOWS FROM
FINANCING ACTIVITIES
|
|
|
|
|
|
|
|
|
Proceeds from debt
obligations
|
|
78
|
|
-
|
|
35,820
|
|
2,176
|
Payments on debt
obligations
|
|
(3,424)
|
|
(4,868)
|
|
(10,714)
|
|
(10,845)
|
Purchase of treasury
stock
|
|
(9,212)
|
|
-
|
|
(12,057)
|
|
(1,794)
|
Payment of
dividends
|
|
(468)
|
|
(360)
|
|
(1,322)
|
|
(1,080)
|
Payment of loan
origination costs
|
|
(27)
|
|
-
|
|
(445)
|
|
(25)
|
|
Net cash provided by
(used in) financing activities
|
|
(13,053)
|
|
(5,228)
|
|
11,282
|
|
(11,568)
|
NET INCREASE (DECREASE)
IN CASH AND CASH EQUIVALENTS
|
|
(567)
|
|
8,912
|
|
1,814
|
|
13,463
|
CASH AND CASH
EQUIVALENTS AT BEGINNING OF PERIOD
|
|
38,067
|
|
20,156
|
|
35,686
|
|
15,605
|
CASH AND CASH
EQUIVALENTS AT END OF PERIOD
|
|
$
37,500
|
|
$
29,068
|
|
$
37,500
|
|
$
29,068
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
RCI HOSPITALITY
HOLDINGS, INC.
|
CONSOLIDATED BALANCE
SHEETS
|
(in
thousands)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
June
30,
|
|
September
30,
|
|
June
30,
|
|
|
|
|
|
2022
|
|
2021
|
|
2021
|
ASSETS
|
|
|
|
|
|
|
|
Current
assets
|
|
|
|
|
|
|
|
Cash and cash
equivalents
|
|
$
37,500
|
|
$
35,686
|
|
$
29,068
|
|
Accounts receivable,
net
|
|
3,955
|
|
7,570
|
|
2,458
|
|
Current portion of
notes receivable
|
|
226
|
|
220
|
|
217
|
|
Inventories
|
|
3,749
|
|
2,659
|
|
2,479
|
|
Prepaid expenses and
other current assets
|
|
4,475
|
|
1,928
|
|
4,062
|
|
Assets held for
sale
|
|
6,989
|
|
4,887
|
|
4,887
|
|
|
Total current
assets
|
|
56,894
|
|
52,950
|
|
43,171
|
Property and equipment,
net
|
|
208,710
|
|
175,952
|
|
178,087
|
Operating lease
right-of-use assets, net
|
|
37,753
|
|
24,308
|
|
24,481
|
Notes receivable, net
of current portion
|
|
4,750
|
|
2,839
|
|
2,819
|
Goodwill
|
|
61,399
|
|
39,379
|
|
45,440
|
Intangibles,
net
|
|
130,585
|
|
67,824
|
|
73,019
|
Other assets
|
|
2,088
|
|
1,367
|
|
922
|
|
|
|
Total assets
|
|
$
502,179
|
|
$
364,619
|
|
$
367,939
|
|
|
|
|
|
|
|
|
|
|
LIABILITIES AND
EQUITY
|
|
|
|
|
|
|
Current
liabilities
|
|
|
|
|
|
|
|
Accounts
payable
|
|
$
5,767
|
|
$
4,408
|
|
$
4,909
|
|
Accrued
liabilities
|
|
12,888
|
|
10,403
|
|
11,738
|
|
Current portion of debt
obligations, net
|
|
12,295
|
|
6,434
|
|
13,695
|
|
Current portion of
operating lease liabilities
|
|
2,730
|
|
1,780
|
|
1,720
|
|
|
Total current
liabilities
|
|
33,680
|
|
23,025
|
|
32,062
|
Deferred tax liability,
net
|
|
24,074
|
|
19,137
|
|
19,960
|
Debt, net of current
portion and debt discount and issuance costs
|
|
175,670
|
|
118,734
|
|
113,908
|
Operating lease
liabilities, net of current portion
|
|
36,719
|
|
24,150
|
|
24,360
|
Other long-term
liabilities
|
|
351
|
|
350
|
|
354
|
|
|
Total
liabilities
|
|
270,494
|
|
185,396
|
|
190,644
|
|
|
|
|
|
|
|
|
|
|
Commitments and
contingencies
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Equity
|
|
|
|
|
|
|
|
|
Preferred
stock
|
|
-
|
|
-
|
|
-
|
|
Common stock
|
|
93
|
|
90
|
|
90
|
|
Additional paid-in
capital
|
|
68,342
|
|
50,040
|
|
50,040
|
|
Retained
earnings
|
|
163,800
|
|
129,693
|
|
127,753
|
|
|
Total RCIHH
stockholders' equity
|
|
232,235
|
|
179,823
|
|
177,883
|
|
Noncontrolling
interests
|
|
(550)
|
|
(600)
|
|
(588)
|
|
|
Total equity
|
|
231,685
|
|
179,223
|
|
177,295
|
|
|
|
Total liabilities and
equity
|
|
$
502,179
|
|
$
364,619
|
|
$
367,939
|
|
|
|
|
|
|
|
|
|
|
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SOURCE RCI Hospitality Holdings, Inc.