Twitter Spaces Conference Call at 4:30
PM ET Today; Meet Management at 7 PM
ET Tonight
HOUSTON, Dec. 14,
2022 /PRNewswire/ -- RCI Hospitality Holdings, Inc.
(Nasdaq: RICK) today reported results and filed its Form 10-K for
the fiscal 2022 fourth quarter and year ended September 30, 2022.
Summary
Financials
|
4Q22
|
Change
YoY
|
FY22
|
Change
YoY
|
Total
Revenues
|
$71.4M
|
29.9 %
|
$267.6M
|
37.1 %
|
EPS
|
$1.15
|
342.3 %
|
$4.91
|
45.7 %
|
Non-GAAP
EPS*
|
$1.45
|
-8.2 %
|
$5.38
|
31.9 %
|
Net Cash from Operating
Activities
|
$17.8M
|
81.7 %
|
$64.5M
|
53.6 %
|
Free Cash
Flow*
|
$14.5M
|
71.6 %
|
$58.9M
|
63.3 %
|
Net Income Attributable
to RCIHH Common Stockholders
|
$10.6M
|
361.4 %
|
$46.0M
|
51.8 %
|
Adjusted
EBITDA*
|
$24.2
|
37.8 %
|
$86.7M
|
44.0 %
|
Basic & Diluted
Shares
|
9.3M
|
2.8 %
|
9.4M
|
4.2 %
|
* See "Non-GAAP Financial Measures" below.
Status FY23 Share
Buybacks
|
Repurchased
Shares
|
Cash Used for
Repurchase
|
Average Price Per
Share
|
1Q23 to Date as of
12/9/22**
|
1,500
|
$97,530
|
$65.02
|
** Remaining stock purchase authorization of $18.8 million.
Eric Langan, President and
CEO of RCI Hospitality Holdings, Inc., said: "We
had a great FY22 and look forward to a strong FY23. Our nightclub
business should see the full year benefit of the 15 acquisitions
and two reopenings in FY22; the addition of the FY23 acquisition of
Heartbreakers and the pending acquisition of the Baby Dolls and
Chicas Locas chains; and other possible acquisitions under
consideration. We'll also be developing our exciting new Rick's
Cabaret Steakhouse & Casino in Central City, CO. The focus of our Bombshells
business will be creating a strong lineup of new company-owned and
franchised units in Texas,
Alabama, and Colorado that should start opening in FY24. As
always, thanks to our loyal and dedicated teams for all their hard
work and effort."
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
|
•
https://twitter.com/i/spaces/1PlJQpoNQVaGE
•
Hosted by: @RicksCEO,
@ZeroTangoTango, @BradleyChhay,
and @itsmarkmoran
|
•
Toll Free 888-506-0062
•
International: 973-528-0011
•
Passcode: 847129
|
•
https://www.webcaster4.com/Webcast/Page/2209/47126
|
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
4Q22 Segments
- Nightclubs: Revenues of $56.6
million, operating margin of 39.7% (41.6% non-GAAP), and
operating income of $22.5 million
($23.6 million non-GAAP). The fourth
quarter of FY22 was the second period since 1Q20 not affected by
COVID. The 15 new club acquisitions in FY22 contributed sales of
$14.9 million, high-margin service
revenues increased 53.6% year-over-year, and same-store sales
increased.1
- Bombshells: Revenues of $14.0
million, operating margin of 15.5%, and operating income of
$2.2 million. The company-owned
Arlington, TX, location (opened
December 2021) contributed
$1.4 million in sales, and same-store
sales declined.1 The first full quarter of the
franchise-owned San Antonio
location (opened late June 2022)
contributed more than $0.1 million in
royalties and incurred $0.3 million
in start-up expenses as per the franchising agreement. Excluding
these costs, segment operating margin would have been approximately
18%.
4Q22 Consolidated (Comparisons are to 4Q21 and % are
of total revenues unless indicated otherwise)
- Cost of goods sold: 12.9% vs. 14.9% due to the increased
mix of higher-margin service revenues of 36.5% vs. 31.0%.
- Salaries and wages: Approximately level at 25.3% vs.
25.6%.
- SG&A: 31.3% vs. 27.6%. 4Q22 included increased
expenses related to newly acquired and reopened locations. SG&A
also included $2.4 million non-cash
stock-based compensation related to previously announced
$100 per share options granted to a
limited number of top executives and management team members.
Excluding stock-based compensation, 4Q22 SG&A would have been
approximately 28%.
- Depreciation and amortization: 6.7% vs. 3.7%. 4Q22
reflected non-cash amortization of intangible assets on newly
acquired leased locations.
- Other charges and gains: The Nightclubs segment included
a $1.7 million gain on sales of a
business and assets in 4Q22 compared to $11.9 million impairment in 4Q21.
- Operating margin: 25.2% vs. 6.6% (30.0% vs. 28.4%
non-GAAP).
- Interest expense: 4.8% vs. 5.3% reflecting higher sales
partially offset by higher debt from club and Bombshells site
acquisitions over the course of the year.
- Income tax: $4.0 million
expense compared to $1.6 million
benefit. The FY22 effective tax rate was 23.4% vs. 11.7%.
- Weighted average shares outstanding: Increased 2.8% due
to shares issued for clubs acquired in October 2021, partially offset by subsequent
share repurchases.
- Debt: $202.5 million at
9/30/22 compared to $188.0 million at 6/30/22. The increase primarily
reflected seller financing used in the July
2022 Cheetah acquisition.
Note
The novel coronavirus (COVID-19) pandemic has disrupted and may
continue to disrupt our business, which has and could continue to
materially affect our operations, financial condition, and results
of operations for an extended period of time. 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, (e) settlement of
lawsuits, (f) costs and charges related to debt refinancing, and
(g) stock-based compensation. 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 loss on equity securities, (f) settlement of lawsuits,
(g) gain on debt extinguishment, (h) costs and charges related to
debt refinancing, (i) stock-based compensation, (j) the income tax
effect of the above-described adjustments, and (k) 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 22.8%, 13.5%, and 26.0%
effective tax rate of the pre-tax non-GAAP income before taxes for
the 2022, 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, (i) gain on debt
extinguishment, and (j) stock-based compensation. 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) (Twitter:
@RCIHHinc)
With more than 60 locations, RCI Hospitality Holdings, Inc.,
through its subsidiaries, is the country's leading company in adult
nightclubs and sports bars/restaurants. See all our brands at
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,
including, but not limited to, the risks and uncertainties
associated with (i) operating and managing an adult entertainment
or restaurant 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 or restaurant
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, 2022, 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
1 See our October 11,
2022 news release on 4Q22 sales for more details.
RCI HOSPITALITY
HOLDINGS, INC.
|
CONSOLIDATED
STATEMENTS OF INCOME
|
(in thousands, except
per share, number of shares and percentage data)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For the Three Months
Ended
|
|
For the Twelve
Months Ended
|
|
September 30,
2022
|
|
September 30,
2021
|
|
September 30,
2022
|
|
September 30,
2021
|
|
Amount
|
|
% of
Revenue
|
|
Amount
|
|
% of
Revenue
|
|
Amount
|
|
% of
Revenue
|
|
Amount
|
|
% of
Revenue
|
Revenues
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Sales of alcoholic
beverages
|
$
29,812
|
|
41.8 %
|
|
$
23,960
|
|
43.6 %
|
|
$ 113,316
|
|
42.3 %
|
|
$
86,685
|
|
44.4 %
|
Sales of food and
merchandise
|
10,666
|
|
14.9 %
|
|
10,906
|
|
19.9 %
|
|
44,294
|
|
16.6 %
|
|
41,111
|
|
21.1 %
|
Service
revenues
|
26,067
|
|
36.5 %
|
|
17,019
|
|
31.0 %
|
|
93,888
|
|
35.1 %
|
|
55,461
|
|
28.4 %
|
Other
|
4,833
|
|
6.8 %
|
|
3,056
|
|
5.6 %
|
|
16,122
|
|
6.0 %
|
|
12,001
|
|
6.1 %
|
Total
revenues
|
71,378
|
|
100.0 %
|
|
54,941
|
|
100.0 %
|
|
267,620
|
|
100.0 %
|
|
195,258
|
|
100.0 %
|
Operating
expenses
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost of goods
sold
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Alcoholic beverages
sold
|
5,248
|
|
17.6 %
|
|
4,270
|
|
17.8 %
|
|
20,155
|
|
17.8 %
|
|
15,883
|
|
18.3 %
|
Food and merchandise
sold
|
3,781
|
|
35.4 %
|
|
3,833
|
|
35.1 %
|
|
15,537
|
|
35.1 %
|
|
13,794
|
|
33.6 %
|
Service and
other
|
147
|
|
0.5 %
|
|
70
|
|
0.3 %
|
|
317
|
|
0.3 %
|
|
374
|
|
0.6 %
|
Total cost of goods
sold (exclusive of items
shown below)
|
9,176
|
|
12.9 %
|
|
8,173
|
|
14.9 %
|
|
36,009
|
|
13.5 %
|
|
30,051
|
|
15.4 %
|
Salaries and
wages
|
18,025
|
|
25.3 %
|
|
14,071
|
|
25.6 %
|
|
68,447
|
|
25.6 %
|
|
50,627
|
|
25.9 %
|
Selling, general and
administrative
|
22,352
|
|
31.3 %
|
|
15,141
|
|
27.6 %
|
|
78,847
|
|
29.5 %
|
|
54,608
|
|
28.0 %
|
Depreciation and
amortization
|
4,755
|
|
6.7 %
|
|
2,041
|
|
3.7 %
|
|
12,391
|
|
4.6 %
|
|
8,238
|
|
4.2 %
|
Other charges (gains),
net
|
(890)
|
|
-1.2 %
|
|
11,898
|
|
21.7 %
|
|
467
|
|
0.2 %
|
|
13,186
|
|
6.8 %
|
Total operating
expenses
|
53,418
|
|
74.8 %
|
|
51,324
|
|
93.4 %
|
|
196,161
|
|
73.3 %
|
|
156,710
|
|
80.3 %
|
Income from
operations
|
17,960
|
|
25.2 %
|
|
3,617
|
|
6.6 %
|
|
71,459
|
|
26.7 %
|
|
38,548
|
|
19.7 %
|
Other income
(expenses)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest
expense
|
(3,454)
|
|
-4.8 %
|
|
(2,913)
|
|
-5.3 %
|
|
(11,950)
|
|
-4.5 %
|
|
(9,992)
|
|
-5.1 %
|
Interest
income
|
90
|
|
0.1 %
|
|
59
|
|
0.1 %
|
|
411
|
|
0.2 %
|
|
253
|
|
0.1 %
|
Non-operating gains
(losses), net
|
-
|
|
0.0 %
|
|
(26)
|
|
0.0 %
|
|
211
|
|
0.1 %
|
|
5,330
|
|
2.7 %
|
Income before income
taxes
|
14,596
|
|
20.4 %
|
|
737
|
|
1.3 %
|
|
60,131
|
|
22.5 %
|
|
34,139
|
|
17.5 %
|
Income tax expense
(benefit)
|
4,015
|
|
5.6 %
|
|
(1,551)
|
|
-2.8 %
|
|
14,071
|
|
5.3 %
|
|
3,989
|
|
2.0 %
|
Net income
|
10,581
|
|
14.8 %
|
|
2,288
|
|
4.2 %
|
|
46,060
|
|
17.2 %
|
|
30,150
|
|
15.4 %
|
Net loss (income)
attributable to noncontrolling interests
|
31
|
|
0.0 %
|
|
12
|
|
0.0 %
|
|
(19)
|
|
0.0 %
|
|
186
|
|
0.1 %
|
Net income attributable
to RCIHH common shareholders
|
$
10,612
|
|
14.9 %
|
|
$
2,300
|
|
4.2 %
|
|
$
46,041
|
|
17.2 %
|
|
$
30,336
|
|
15.5 %
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings per
share
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic and
diluted
|
$
1.15
|
|
|
|
$
0.26
|
|
|
|
$
4.91
|
|
|
|
$
3.37
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average shares
outstanding
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic and
diluted
|
9,249,864
|
|
|
|
8,999,910
|
|
|
|
9,383,445
|
|
|
|
9,004,744
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Dividends per
share
|
$
0.05
|
|
|
|
$
0.04
|
|
|
|
$
0.19
|
|
|
|
$
0.16
|
|
|
RCI HOSPITALITY
HOLDINGS, INC.
|
NON-GAAP FINANCIAL
MEASURES
|
(in thousands, except
per share and percentage data)
|
|
|
|
|
|
|
|
|
|
For the Three Months
Ended
|
|
For the Twelve
Months Ended
|
|
September
30,
|
|
September
30,
|
|
September
30,
|
|
September
30,
|
|
2022
|
|
2021
|
|
2022
|
|
2021
|
Reconciliation of
GAAP net income to Adjusted EBITDA
|
|
|
|
|
|
|
|
Net income attributable
to RCIHH common stockholders
|
$
10,612
|
|
$
2,300
|
|
$
46,041
|
|
$
30,336
|
Income tax
expense
|
4,015
|
|
(1,551)
|
|
14,071
|
|
3,989
|
Interest expense,
net
|
3,364
|
|
2,854
|
|
11,539
|
|
9,739
|
Settlement of
lawsuits
|
708
|
|
1,069
|
|
1,417
|
|
1,349
|
Impairment of
assets
|
166
|
|
11,940
|
|
1,888
|
|
13,612
|
Gain on sale of
businesses and assets
|
(1,709)
|
|
(67)
|
|
(2,375)
|
|
(522)
|
Gain on debt
extinguishment
|
-
|
|
-
|
|
(138)
|
|
(5,329)
|
Unrealized loss on
equity securities
|
(1)
|
|
26
|
|
-
|
|
84
|
Gain on
insurance
|
(55)
|
|
(1,044)
|
|
(463)
|
|
(1,253)
|
Depreciation and
amortization
|
4,755
|
|
2,041
|
|
12,391
|
|
8,238
|
Stock-based
compensation
|
2,353
|
|
-
|
|
2,353
|
|
-
|
Adjusted
EBITDA
|
$
24,208
|
|
$
17,568
|
|
$
86,724
|
|
$
60,243
|
|
|
|
|
|
|
|
|
Reconciliation of
GAAP net income to non-GAAP net income
|
|
|
|
|
|
|
|
Net income attributable
to RCIHH common stockholders
|
$
10,612
|
|
$
2,300
|
|
$
46,041
|
|
$
30,336
|
Amortization of
intangibles
|
1,994
|
|
49
|
|
2,118
|
|
258
|
Settlement of
lawsuits
|
708
|
|
1,069
|
|
1,417
|
|
1,349
|
Impairment of
assets
|
166
|
|
11,940
|
|
1,888
|
|
13,612
|
Gain on sale of
businesses and assets
|
(1,709)
|
|
(67)
|
|
(2,375)
|
|
(522)
|
Costs and charges
related to debt refinancing
|
-
|
|
694
|
|
-
|
|
694
|
Gain on debt
extinguishment
|
-
|
|
-
|
|
(138)
|
|
(5,329)
|
Unrealized loss on
equity securities
|
(1)
|
|
26
|
|
-
|
|
84
|
Gain on
insurance
|
(55)
|
|
(1,044)
|
|
(463)
|
|
(1,253)
|
Stock-based
compensation
|
2,353
|
|
-
|
|
2,353
|
|
-
|
Change in deferred tax
asset valuation allowance
|
-
|
|
(632)
|
|
343
|
|
(632)
|
Net income tax
effect
|
(670)
|
|
(143)
|
|
(729)
|
|
(1,845)
|
Non-GAAP net
income
|
$
13,398
|
|
$
14,192
|
|
$
50,455
|
|
$
36,752
|
|
|
|
|
|
|
|
|
Reconciliation of
GAAP diluted earnings per share to non-GAAP diluted earnings per
share
|
|
|
|
|
Diluted
shares
|
9,249,864
|
|
8,999,910
|
|
9,383,445
|
|
9,004,744
|
GAAP diluted earnings
per share
|
$
1.15
|
|
$
0.26
|
|
$
4.91
|
|
$
3.37
|
Amortization of
intangibles
|
0.22
|
|
0.01
|
|
0.23
|
|
0.03
|
Settlement of
lawsuits
|
0.08
|
|
0.12
|
|
0.15
|
|
0.15
|
Impairment of
assets
|
0.02
|
|
1.33
|
|
0.20
|
|
1.51
|
Gain on sale of
businesses and assets
|
(0.18)
|
|
(0.01)
|
|
(0.25)
|
|
(0.06)
|
Costs and charges
related to debt refinancing
|
-
|
|
0.08
|
|
-
|
|
0.08
|
Gain on debt
extinguishment
|
-
|
|
-
|
|
(0.01)
|
|
(0.59)
|
Unrealized loss on
equity securities
|
(0.00)
|
|
0.00
|
|
-
|
|
0.01
|
Gain on
insurance
|
(0.01)
|
|
(0.12)
|
|
(0.05)
|
|
(0.14)
|
Stock-based
compensation
|
0.25
|
|
-
|
|
0.25
|
|
-
|
Change in deferred tax
asset valuation allowance
|
-
|
|
(0.07)
|
|
0.04
|
|
(0.07)
|
Net income tax
effect
|
(0.07)
|
|
(0.02)
|
|
(0.08)
|
|
(0.20)
|
Non-GAAP diluted
earnings per share
|
$
1.45
|
|
$
1.58
|
|
$
5.38
|
|
$
4.08
|
|
|
|
|
|
|
|
|
Reconciliation of
GAAP operating income to non-GAAP operating income
|
|
|
|
|
|
|
Income from
operations
|
$
17,960
|
|
$
3,617
|
|
$
71,459
|
|
$
38,548
|
Amortization of
intangibles
|
1,994
|
|
49
|
|
2,118
|
|
258
|
Settlement of
lawsuits
|
708
|
|
1,069
|
|
1,417
|
|
1,349
|
Impairment of
assets
|
166
|
|
11,940
|
|
1,888
|
|
13,612
|
Gain on sale of
businesses and assets
|
(1,709)
|
|
(67)
|
|
(2,375)
|
|
(522)
|
Costs and charges
related to debt refinancing
|
-
|
|
57
|
|
-
|
|
57
|
Gain on
insurance
|
(55)
|
|
(1,044)
|
|
(463)
|
|
(1,253)
|
Stock-based
compensation
|
2,353
|
|
-
|
|
2,353
|
|
-
|
Non-GAAP operating
income
|
$
21,417
|
|
$
15,621
|
|
$
76,397
|
|
$
52,049
|
|
|
|
|
|
|
|
|
Reconciliation of
GAAP operating margin to non-GAAP operating margin
|
|
|
|
|
|
|
GAAP operating
margin
|
25.2 %
|
|
6.6 %
|
|
26.7 %
|
|
19.7 %
|
Amortization of
intangibles
|
2.8 %
|
|
0.1 %
|
|
0.8 %
|
|
0.1 %
|
Settlement of
lawsuits
|
1.0 %
|
|
1.9 %
|
|
0.5 %
|
|
0.7 %
|
Impairment of
assets
|
0.2 %
|
|
21.7 %
|
|
0.7 %
|
|
7.0 %
|
Gain on sale of
businesses and assets
|
-2.4 %
|
|
-0.1 %
|
|
-0.9 %
|
|
-0.3 %
|
Costs and charges
related to debt refinancing
|
0.0 %
|
|
0.1 %
|
|
0.0 %
|
|
0.0 %
|
Gain on
insurance
|
-0.1 %
|
|
-1.9 %
|
|
-0.2 %
|
|
-0.6 %
|
Stock-based
compensation
|
3.3 %
|
|
0.0 %
|
|
0.9 %
|
|
0.0 %
|
Non-GAAP operating
margin
|
30.0 %
|
|
28.4 %
|
|
28.5 %
|
|
26.7 %
|
|
|
|
|
|
|
|
|
Reconciliation of
net cash provided by operating activities to free cash
flow
|
|
|
|
|
|
|
Net cash provided by
operating activities
|
$
17,755
|
|
$
9,774
|
|
$
64,509
|
|
$
41,991
|
Less: Maintenance
capital expenditures
|
3,213
|
|
1,299
|
|
5,598
|
|
5,907
|
Free cash
flow
|
$
14,542
|
|
$
8,475
|
|
$
58,911
|
|
$
36,084
|
RCI HOSPITALITY
HOLDINGS, INC.
|
SEGMENT
INFORMATION
|
(in
thousands)
|
|
|
|
|
|
|
|
|
|
For the Three Months
Ended
|
|
For the Twelve
Months Ended
|
|
September
30,
|
|
September
30,
|
|
September
30,
|
|
September
30,
|
|
2022
|
|
2021
|
|
2022
|
|
2021
|
Revenues
|
|
|
|
|
|
|
|
Nightclubs
|
$
56,612
|
|
$
40,333
|
|
$ 206,251
|
|
$
137,348
|
Bombshells
|
14,032
|
|
14,403
|
|
59,925
|
|
56,621
|
Other
|
734
|
|
205
|
|
1,444
|
|
1,289
|
|
$
71,378
|
|
$
54,941
|
|
$ 267,620
|
|
$
195,258
|
|
|
|
|
|
|
|
|
Income (loss) from
operations
|
|
|
|
|
|
|
|
Nightclubs
|
$
22,477
|
|
$
6,502
|
|
$
82,798
|
|
$
43,815
|
Bombshells
|
2,169
|
|
3,001
|
|
11,504
|
|
13,264
|
Other
|
216
|
|
(72)
|
|
57
|
|
35
|
Corporate
|
(6,902)
|
|
(5,814)
|
|
(22,900)
|
|
(18,566)
|
|
$
17,960
|
|
$
3,617
|
|
$
71,459
|
|
$
38,548
|
RCI HOSPITALITY
HOLDINGS, INC.
|
NON-GAAP SEGMENT
INFORMATION
|
($ in
thousands)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For the Three Months
Ended September 30, 2022
|
|
For the Three Months
Ended September 30, 2021
|
|
Nightclubs
|
|
Bombshells
|
|
Other
|
|
Corporate
|
|
Total
|
|
Nightclubs
|
|
Bombshells
|
|
Other
|
|
Corporate
|
|
Total
|
Income (loss) from
operations
|
$ 22,477
|
|
$
2,169
|
|
$
216
|
|
$ (6,902)
|
|
$ 17,960
|
|
$
6,502
|
|
$
3,001
|
|
$
(72)
|
|
$ (5,814)
|
|
$
3,617
|
Amortization of
intangibles
|
1,925
|
|
1
|
|
61
|
|
7
|
|
1,994
|
|
46
|
|
3
|
|
-
|
|
-
|
|
49
|
Stock-based
compensation
|
-
|
|
-
|
|
-
|
|
2,353
|
|
2,353
|
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
Settlement of
lawsuits
|
709
|
|
-
|
|
-
|
|
(1)
|
|
708
|
|
38
|
|
21
|
|
-
|
|
1,010
|
|
1,069
|
Costs and charges
related to debt refinancing
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
|
17
|
|
-
|
|
-
|
|
40
|
|
57
|
Impairment of
assets
|
166
|
|
-
|
|
-
|
|
-
|
|
166
|
|
11,940
|
|
-
|
|
-
|
|
-
|
|
11,940
|
Loss (gain) on sale of
businesses and assets
|
(1,666)
|
|
-
|
|
-
|
|
(43)
|
|
(1,709)
|
|
(82)
|
|
16
|
|
-
|
|
(1)
|
|
(67)
|
Gain on
insurance
|
(55)
|
|
-
|
|
-
|
|
-
|
|
(55)
|
|
(1,044)
|
|
-
|
|
-
|
|
-
|
|
(1,044)
|
Non-GAAP operating
income (loss)
|
$ 23,556
|
|
$
2,170
|
|
$
277
|
|
$ (4,586)
|
|
$ 21,417
|
|
$ 17,417
|
|
$
3,041
|
|
$
(72)
|
|
$ (4,765)
|
|
$ 15,621
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP operating
margin
|
39.7 %
|
|
15.5 %
|
|
29.4 %
|
|
-9.7 %
|
|
25.2 %
|
|
16.1 %
|
|
20.8 %
|
|
-35.1 %
|
|
-10.6 %
|
|
6.6 %
|
Non-GAAP operating
margin
|
41.6 %
|
|
15.5 %
|
|
37.7 %
|
|
-6.4 %
|
|
30.0 %
|
|
43.2 %
|
|
21.1 %
|
|
-35.1 %
|
|
-8.7 %
|
|
28.4 %
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For the Twelve
Months Ended September 30, 2022
|
|
For the Twelve
Months Ended September 30, 2021
|
|
Nightclubs
|
|
Bombshells
|
|
Other
|
|
Corporate
|
|
Total
|
|
Nightclubs
|
|
Bombshells
|
|
Other
|
|
Corporate
|
|
Total
|
Income (loss) from
operations
|
$ 82,798
|
|
$ 11,504
|
|
$
57
|
|
$
(22,900)
|
|
$ 71,459
|
|
$ 43,815
|
|
$ 13,264
|
|
$
35
|
|
$
(18,566)
|
|
$ 38,548
|
Amortization of
intangibles
|
2,042
|
|
6
|
|
61
|
|
9
|
|
2,118
|
|
187
|
|
14
|
|
57
|
|
-
|
|
258
|
Stock-based
compensation
|
-
|
|
-
|
|
-
|
|
2,353
|
|
2,353
|
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
Settlement of
lawsuits
|
1,287
|
|
18
|
|
-
|
|
112
|
|
1,417
|
|
275
|
|
59
|
|
5
|
|
1,010
|
|
1,349
|
Costs and charges
related to debt refinancing
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
|
17
|
|
-
|
|
-
|
|
40
|
|
57
|
Impairment of
assets
|
1,238
|
|
650
|
|
-
|
|
-
|
|
1,888
|
|
13,612
|
|
-
|
|
-
|
|
-
|
|
13,612
|
Loss (gain) on sale of
businesses and assets
|
(2,010)
|
|
17
|
|
-
|
|
(382)
|
|
(2,375)
|
|
(580)
|
|
72
|
|
-
|
|
(14)
|
|
(522)
|
Gain on
insurance
|
(463)
|
|
-
|
|
-
|
|
-
|
|
(463)
|
|
(1,209)
|
|
-
|
|
-
|
|
(44)
|
|
(1,253)
|
Non-GAAP operating
income (loss)
|
$ 84,892
|
|
$ 12,195
|
|
$
118
|
|
$
(20,808)
|
|
$ 76,397
|
|
$ 56,117
|
|
$ 13,409
|
|
$
97
|
|
$
(17,574)
|
|
$ 52,049
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP operating
margin
|
40.1 %
|
|
19.2 %
|
|
3.9 %
|
|
-8.6 %
|
|
26.7 %
|
|
31.9 %
|
|
23.4 %
|
|
2.7 %
|
|
-9.5 %
|
|
19.7 %
|
Non-GAAP operating
margin
|
41.2 %
|
|
20.4 %
|
|
8.2 %
|
|
-7.8 %
|
|
28.5 %
|
|
40.9 %
|
|
23.7 %
|
|
7.5 %
|
|
-9.0 %
|
|
26.7 %
|
RCI HOSPITALITY
HOLDINGS, INC.
|
CONSOLIDATED
STATEMENTS OF CASH FLOWS
|
(in
thousands)
|
|
|
|
|
|
|
|
|
|
For the Three Months
Ended
|
|
For the Twelve
Months Ended
|
|
September 30,
2022
|
|
September 30,
2021
|
|
September 30,
2022
|
|
September 30,
2021
|
CASH FLOWS FROM
OPERATING ACTIVITIES
|
|
|
|
|
|
|
|
Net income
|
$
10,581
|
|
$
2,288
|
|
$
46,060
|
|
$
30,150
|
Adjustments to
reconcile net income to net cash
|
|
|
|
|
|
|
|
provided by operating
activities:
|
|
|
|
|
|
|
|
Depreciation and
amortization
|
4,755
|
|
2,041
|
|
12,391
|
|
8,238
|
Deferred income tax
benefit
|
3,489
|
|
(823)
|
|
3,080
|
|
(1,253)
|
Gain on sale of
businesses and assets
|
(1,688)
|
|
(88)
|
|
(2,970)
|
|
(714)
|
Impairment of
assets
|
166
|
|
11,940
|
|
1,888
|
|
13,612
|
Unrealized loss (gain)
on equity securities
|
(1)
|
|
26
|
|
-
|
|
84
|
Amortization of debt
discount and issuance costs
|
115
|
|
151
|
|
314
|
|
311
|
Gain on debt
extinguishment
|
-
|
|
-
|
|
(83)
|
|
(5,298)
|
Stock-based
compensation
|
2,353
|
|
-
|
|
2,353
|
|
-
|
Noncash lease
expense
|
882
|
|
447
|
|
2,607
|
|
1,729
|
Gain on
insurance
|
(55)
|
|
(1,043)
|
|
(463)
|
|
(1,337)
|
Doubtful accounts
expense (reversal) on notes receivable
|
-
|
|
(58)
|
|
753
|
|
(80)
|
Changes in operating
assets and liabilities:
|
|
|
|
|
|
|
|
Accounts
receivable
|
(3,586)
|
|
(5,078)
|
|
(175)
|
|
(769)
|
Inventories
|
(62)
|
|
(180)
|
|
(554)
|
|
(287)
|
Prepaid expenses, other
current assets and other assets
|
3,658
|
|
1,774
|
|
387
|
|
4,120
|
Accounts payable,
accrued and other liabilities
|
(2,852)
|
|
(1,623)
|
|
(1,079)
|
|
(6,515)
|
Net cash provided by
operating activities
|
17,755
|
|
9,774
|
|
64,509
|
|
41,991
|
CASH FLOWS FROM
INVESTING ACTIVITIES
|
|
|
|
|
|
|
|
Proceeds from sale of
businesses and assets
|
6,058
|
|
2,202
|
|
10,669
|
|
5,415
|
Proceeds from
insurance
|
133
|
|
858
|
|
648
|
|
1,152
|
Proceeds from notes
receivable
|
55
|
|
35
|
|
182
|
|
130
|
Payments for property
and equipment and intangible assets
|
(6,830)
|
|
(2,723)
|
|
(24,003)
|
|
(13,511)
|
Acquisition of
businesses, net of cash acquired
|
(10,991)
|
|
-
|
|
(55,293)
|
|
-
|
Net cash provided by
(used in) investing activities
|
(11,575)
|
|
372
|
|
(67,797)
|
|
(6,814)
|
CASH FLOWS FROM
FINANCING ACTIVITIES
|
|
|
|
|
|
|
|
Proceeds from debt
obligations
|
-
|
|
36,314
|
|
35,820
|
|
38,490
|
Payments on debt
obligations
|
(4,180)
|
|
(38,333)
|
|
(14,894)
|
|
(49,178)
|
Purchase of treasury
stock
|
(3,040)
|
|
-
|
|
(15,097)
|
|
(1,794)
|
Payment of
dividends
|
(462)
|
|
(360)
|
|
(1,784)
|
|
(1,440)
|
Payment of loan
origination costs
|
(18)
|
|
(1,149)
|
|
(463)
|
|
(1,174)
|
Net cash provided by
(used in) financing activities
|
(7,700)
|
|
(3,528)
|
|
3,582
|
|
(15,096)
|
NET INCREASE (DECREASE)
IN CASH AND CASH EQUIVALENTS
|
(1,520)
|
|
6,618
|
|
294
|
|
20,081
|
CASH AND CASH
EQUIVALENTS AT BEGINNING OF PERIOD
|
37,500
|
|
29,068
|
|
35,686
|
|
15,605
|
CASH AND CASH
EQUIVALENTS AT END OF PERIOD
|
$
35,980
|
|
$
35,686
|
|
$
35,980
|
|
$
35,686
|
RCI HOSPITALITY
HOLDINGS, INC.
|
CONSOLIDATED BALANCE
SHEETS
|
(in
thousands)
|
|
|
|
|
|
September
30,
|
|
September
30,
|
|
2022
|
|
2021
|
ASSETS
|
|
|
|
Current
assets
|
|
|
|
Cash and cash
equivalents
|
$
35,980
|
|
$
35,686
|
Accounts receivable,
net
|
8,510
|
|
7,570
|
Current portion of
notes receivable
|
230
|
|
220
|
Inventories
|
3,893
|
|
2,659
|
Prepaid expenses and
other current assets
|
1,499
|
|
1,928
|
Assets held for
sale
|
1,049
|
|
4,887
|
Total current
assets
|
51,161
|
|
52,950
|
Property and equipment,
net
|
224,615
|
|
175,952
|
Operating lease
right-of-use assets, net
|
37,048
|
|
24,308
|
Notes receivable, net
of current portion
|
4,691
|
|
2,839
|
Goodwill
|
67,767
|
|
39,379
|
Intangibles,
net
|
144,049
|
|
67,824
|
Other assets
|
1,407
|
|
1,367
|
Total assets
|
$
530,738
|
|
$
364,619
|
|
|
|
|
LIABILITIES AND
EQUITY
|
|
|
|
Current
liabilities
|
|
|
|
Accounts
payable
|
$
5,482
|
|
$
4,408
|
Accrued
liabilities
|
11,328
|
|
10,403
|
Current portion of
long-term debt, net
|
11,896
|
|
6,434
|
Current portion of
operating lease liabilities
|
2,795
|
|
1,780
|
Total current
liabilities
|
31,501
|
|
23,025
|
Deferred tax liability,
net
|
30,562
|
|
19,137
|
Long-term debt, net of
current portion and debt discount and issuance costs
|
190,567
|
|
118,734
|
Operating lease
liabilities, net of current portion
|
36,001
|
|
24,150
|
Other long-term
liabilities
|
349
|
|
350
|
Total
liabilities
|
288,980
|
|
185,396
|
|
|
|
|
Commitments and
contingencies
|
|
|
|
|
|
|
|
Equity
|
|
|
|
Preferred
stock
|
-
|
|
-
|
Common stock
|
92
|
|
90
|
Additional paid-in
capital
|
67,227
|
|
50,040
|
Retained
earnings
|
173,950
|
|
129,693
|
Total RCIHH
stockholders' equity
|
241,269
|
|
179,823
|
Noncontrolling
interests
|
489
|
|
(600)
|
Total equity
|
241,758
|
|
179,223
|
Total liabilities and
equity
|
$
530,738
|
|
$
364,619
|
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SOURCE RCI Hospitality Holdings, Inc.