Exhibit 99.1
RCI Reports Record Revenues and Free Cash Flow for 3Q21
HOUSTON—August 5, 2021—RCI Hospitality Holdings, Inc. (Nasdaq: RICK) today reported results for the fiscal 2021 third quarter ended June 30, 2021, and filed its Form 10-Q.
Highlights 3Q21 vs 3Q20
| ● | Record total revenues of $57.9 million compared to $14.7 million |
| ● | Record net cash from operating activities of $15.0 million and record free cash flow* of $13.0 million |
| ● | Record Nightclubs segment revenues of $41.0 million with 44.7% operating margin |
| ● | Record Bombshells segment revenues of $16.1 million with 27.4% operating margin |
| ● | Consolidated operating margins of 32.0% |
| ● | Strong EPS of $1.37 compared to net loss per share of $0.60 |
| ● | Net income of $12.3 million and adjusted EBITDA* of $20.4 million |
| ● | $29.1 million cash and cash equivalents at the end of the period |
Eric Langan, President and CEO, said: “Both our Nightclubs and Bombshells segments had their best overall performance in company history. Special thanks to our team members for managing the influx of customers at our locations and helping to shatter our sales records while keeping our costs in line. We continue to press ahead with our growth initiatives. Recently we announced an agreement to acquire 11 clubs in six states and related real estate for $88.0 million in stock, cash and debt. In addition, we are seeking out more nightclub acquisitions, developing more Bombshells, and expanding our list of potential Bombshells franchisee locations.”
Conference Call Today at 5:00 PM ET
| ● | Live Participant Phone: Toll Free 877-545-0320, International 973-528-0016, Passcode: 417610 |
| ● | Live webcast, slides or replay link: https://www.webcaster4.com/Webcast/Page/2209/42364 |
| ● | Phone replay: Toll Free 877-481-4010, International 919-882-2331, Passcode: 42364 |
Meet Management Tonight at 7:00 PM ET
Investors are invited to meet management at one of RCI’s top revenue generating clubs.
| ● | Thursday, August 5, 2021, 7:00 PM to 9:00 PM ET |
| ● | Rick’s Cabaret New York, 50 W. 33rd Street, New York, NY, between Fifth Avenue and Broadway |
| ● | RSVP your contact information to [email protected] by 5:00 PM ET today |
Nightclubs Segment
| ● | 3Q21 vs 3Q20: Revenues of $41.0 million compared to $6.0 million, an increase of 582.4%. Thirty-six clubs were open all of 3Q21 compared to the year ago quarter, when all clubs were closed the month of April 2020, in line with local and state pandemic regulations, and then in May-June 2020 a limited number began to reopen, but with restrictive curfews and occupancies. 3Q21 operating margin expanded to 44.7% from (50.5%) in 3Q20 due to higher sales and a more favorable sales mix. As a result, segment operating income increased to $18.4 million from a loss of $3.0 million. |
| ● | 3Q21 vs 2Q21: Revenues of $41.0 million compared to $30.8 million, an increase of 33.3%, reflecting more clubs open on a more consistent basis, the elimination of restrictions on our northern clubs by the beginning of June, and the ongoing return of our loyal customer base, benefitting from increased vaccinations. Operating margin expanded to 44.7% from 34.0% due to higher sales, in particular, a 46.5% increase in service revenues, primarily from northern clubs. As a result, segment operating income increased by 75.3% to $18.4 million from $10.5 million. |
Bombshells Segment
| ● | 3Q21 vs 3Q20: Revenues of $16.1 million compared to $8.5 million, an increase of 88.5%. All 10 Bombshells were open during all of 3Q21 compared to the year-ago quarter, when all units were closed the month of April 2020 in line with local and state pandemic regulations and then in May 2020 began to reopen, but with restrictive curfews and limited occupancies. Operating margin expanded to 27.4% from 21.7% due to higher sales. As a result, segment operating income increased by 138.1% to $4.4 million from $1.9 million. |
| ● | 3Q21 vs 2Q21: Revenues of $16.1 million compared to $13.1 million, an increase of 22.4%, reflecting greater brand recognition, more sports events, and increased consumer confidence. Operating margin expanded to 27.4% from 23.9% due to higher sales. As a result, segment operating income increased by 40.2% to $4.4 million from $3.1 million. |
Consolidated 3Q21 vs 3Q20
| ● | Cost of goods sold declined to 15.3% of total revenues from 16.2% due to higher sales and the change in sales mix, in particular, an increase in service revenues to 29.2% from 19.7% of total revenues. |
| ● | Salaries and wages declined to 24.0% of revenues from 36.8%, SG&A improved to 25.4% from 60.5%, and depreciation and amortization decreased to 3.6% from 15.2%. |
| ● | The improvements reflected higher Nightclubs and Bombshells sales and margins, cost-saving initiatives, and lower SG&A expenses relative to sales as compared to the prior year. |
| ● | Operating margin was 32.0% compared to (31.6%) in 3Q20 and 22.3% in 2Q21. |
| ● | Interest expense decreased 7.2% primarily due to lower debt balances. |
| ● | The effective tax rate was an expense of 24.4% compared to a benefit of 20.5%. |
| ● | Debt was $127.6 million at 6/30/21 compared to $132.4 million at 3/31/21. This reflected scheduled paydowns and a $2.0 million paydown related to a sold property. |
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. Closures and operating restrictions, as caused by local, state and national guidelines, could lead to adverse financial results. However, we will continually monitor and evaluate the situation and will determine any further measures 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) impairment of assets, and (e) settlement of lawsuits. We believe that excluding these items assists investors in evaluating period-over-period changes in our operating income and operating margin without the impact of items that are not a result of our day-to-day business and operations. |
| ● | Non-GAAP Net Income and Non-GAAP Net Income per Diluted Share. We calculate non-GAAP net income and non-GAAP net income per diluted share by excluding or including certain items to net income attributable to RCIHH common stockholders and diluted earnings per share. Adjustment items are: (a) amortization of intangibles, (b) gains or losses on sale of businesses and assets, (c) gains or losses on insurance, (d) unrealized gains or losses on equity securities, (e) impairment of assets, (f) settlement of lawsuits, (g) gain on debt extinguishment, and (h) the income tax effect of the above described adjustments. Included in the income tax effect of the above adjustments is the net effect of the non-GAAP provision for income taxes, calculated at 24.3% and 26.9% effective tax rate of the pre-tax non-GAAP income before taxes for the nine months ended June 30, 2021 and 2020, respectively, and the GAAP income tax expense (benefit). We believe that excluding and including such items help management and investors better understand our operating activities. |
| ● | Adjusted EBITDA. We calculate adjusted EBITDA by excluding the following items from net income attributable to RCIHH common stockholders: (a) depreciation and amortization, (b) income tax expense (benefit), (c) net interest expense, (d) gains or losses on sale of businesses and assets, (e) gains or losses on insurance, (f) unrealized gains or losses on equity securities, (g) impairment of assets, (h) settlement of lawsuits, and (i) gain on debt extinguishment. We believe that adjusting for such items helps management and investors better understand our operating activities. Adjusted EBITDA provides a core operational performance measurement that compares results without the need to adjust for federal, state and local taxes which have considerable variation between domestic jurisdictions. The results are, therefore, without consideration of financing alternatives of capital employed. We use adjusted EBITDA as one guideline to assess our unleveraged performance return on our investments. Adjusted EBITDA is also the target benchmark for our acquisitions of nightclubs. |
| ● | Management also uses non-GAAP cash flow measures such as free cash flow. Free cash flow is derived from net cash provided by operating activities less maintenance capital expenditures. We use free cash flow as the baseline for the implementation of our capital allocation strategy. |
About RCI Hospitality Holdings, Inc. (Nasdaq: RICK)
With more than 40 units, RCI Hospitality Holdings, Inc., through its subsidiaries, is the country’s leading company in gentlemen’s clubs and sports bars/restaurants. Clubs in New York City, Chicago, Dallas/Ft. Worth, Houston, Miami, Minneapolis, St. Louis, Charlotte, Pittsburgh, and other markets operate under brand names such as Rick’s Cabaret, XTC, Club Onyx, Vivid Cabaret, Jaguars Club, Tootsie’s Cabaret, and Scarlett’s Cabaret. Sports bars/restaurants operate under the brand name Bombshells Restaurant & Bar. Please visit http://www.rcihospitality.com/
Forward-Looking Statements
This press release may contain forward-looking statements that involve a number of risks and uncertainties that could cause the company’s actual results to differ materially from those indicated in this press release, including, but not limited to, the risks and uncertainties associated with (i) operating and managing an adult business, (ii) the business climates in cities where it operates, (iii) the success or lack thereof in launching and building the company’s businesses, (iv) cyber security, (v) conditions relevant to real estate transactions, (vi) the impact of the COVID-19 pandemic, and (vii) numerous other factors such as laws governing the operation of adult entertainment businesses, competition and dependence on key personnel. For more detailed discussion of such factors and certain risks and uncertainties, see RCI’s annual report on Form 10-K for the year ended September 30, 2020, as well as its other filings with the U.S. Securities and Exchange Commission. The company has no obligation to update or revise the forward-looking statements to reflect the occurrence of future events or circumstances.
Media & Investor Contacts
Gary Fishman and Steven Anreder at 212-532-3232 or [email protected] and [email protected]
RCI
HOSPITALITY HOLDINGS, INC.
CONSOLIDATED
STATEMENTS OF OPERATIONS
(in
thousands, except per share and percentage data)
%
of
Revenue
%
of
Revenue
%
of
Revenue
%
of
Revenue
For
the Three Months Ended June 30,
For
the Nine Months Ended June 30,
2021
2020
2021
2020
Amount
Amount
Amount
Amount
Revenues
Sales
of alcoholic beverages
$
25,092
43.4
%
$
7,623
51.8
%
$
62,725
44.7
%
$
45,285
43.7
%
Sales
of food and merchandise
12,058
20.8
%
3,452
23.4
%
30,205
21.5
%
17,378
16.8
%
Service
revenues
16,880
29.2
%
2,907
19.7
%
38,442
27.4
%
34,448
33.3
%
Other
3,830
6.6
%
739
5.0
%
8,945
6.4
%
6,430
6.2
%
Total
revenues
57,860
100.0
%
14,721
100.0
%
140,317
100.0
%
103,541
100.0
%
Operating
expenses
Cost
of goods sold
Alcoholic
beverages sold
4,621
18.4
%
1,245
16.3
%
11,613
18.5
%
8,826
19.5
%
Food
and merchandise sold
4,043
33.5
%
1,128
32.7
%
9,961
33.0
%
5,974
34.4
%
Service
and other
208
1.0
%
17
0.5
%
304
0.6
%
148
0.4
%
Total
cost of goods sold (exclusive of items shown below)
8,872
15.3
%
2,390
16.2
%
21,878
15.6
%
14,948
14.4
%
Salaries
and wages
13,870
24.0
%
5,421
36.8
%
36,556
26.1
%
30,866
29.8
%
Selling,
general and administrative
14,697
25.4
%
8,908
60.5
%
39,467
28.1
%
39,889
38.5
%
Depreciation
and amortization
2,057
3.6
%
2,235
15.2
%
6,197
4.4
%
6,696
6.5
%
Other
charges, net
(143
)
-0.2
%
424
2.9
%
1,288
0.9
%
8,588
8.3
%
Total
operating expenses
39,353
68.0
%
19,378
131.6
%
105,386
75.1
%
100,987
97.5
%
Income
(loss) from operations
18,507
32.0
%
(4,657
)
-31.6
%
34,931
24.9
%
2,554
2.5
%
Other
income (expenses)
Interest
expense
(2,281
)
-3.9
%
(2,459
)
-16.7
%
(7,079
)
-5.0
%
(7,403
)
-7.1
%
Interest
income
72
0.1
%
80
0.5
%
194
0.1
%
263
0.3
%
Non-operating
gains (losses), net
9
0.0
%
31
0.2
%
5,356
3.8
%
(103
)
-0.1
%
Income
(loss) before income taxes
16,307
28.2
%
(7,005
)
-47.6
%
33,402
23.8
%
(4,689
)
-4.5
%
Income
tax expense (benefit)
3,986
6.9
%
(1,437
)
-9.8
%
5,540
3.9
%
(1,262
)
-1.2
%
Net
income (loss)
12,321
21.3
%
(5,568
)
-37.8
%
27,862
19.9
%
(3,427
)
-3.3
%
Net
loss attributable to noncontrolling interests
(19
)
0.0
%
94
0.6
%
174
0.1
%
135
0.1
%
Net
income (loss) attributable to RCIHH common shareholders
$
12,302
21.3
%
$
(5,474
)
-37.2
%
$
28,036
20.0
%
$
(3,292
)
-3.2
%
Earnings (loss) per
share
Basic
and diluted
$
1.37
$
(0.60
)
$
3.11
$
(0.36
)
Weighted average
shares outstanding
Basic
and diluted
9,000
9,125
9,006
9,224
Dividends per share
$
0.04
$
0.03
$
0.12
$
0.10
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, | |||||||||||||||
| 2021 | 2020 | 2021 | 2020 | |||||||||||||
| Reconciliation of GAAP net income (loss) to Adjusted EBITDA | ||||||||||||||||
| Net income (loss) attributable to RCIHH common stockholders | $ | 12,302 | $ | (5,474 | ) | $ | 28,036 | $ | (3,292 | ) | ||||||
| Income tax expense (benefit) | 3,986 | (1,437 | ) | 5,540 | (1,262 | ) | ||||||||||
| Interest expense, net | 2,209 | 2,379 | 6,885 | 7,140 | ||||||||||||
| Settlement of lawsuits | 127 | 50 | 280 | 74 | ||||||||||||
| Impairment of assets | 271 | 982 | 1,672 | 9,192 | ||||||||||||
| Gain on sale of businesses and assets | (541 | ) | (608 | ) | (455 | ) | (645 | ) | ||||||||
| Gain on debt extinguishment | - | - | (5,329 | ) | - | |||||||||||
| Unrealized loss (gain) on equity securities | (9 | ) | (31 | ) | 58 | 103 | ||||||||||
| Gain on insurance | - | - | (209 | ) | (33 | ) | ||||||||||
| Depreciation and amortization | 2,057 | 2,235 | 6,197 | 6,696 | ||||||||||||
| Adjusted EBITDA | $ | 20,402 | $ | (1,904 | ) | $ | 42,675 | $ | 17,973 | |||||||
| Reconciliation of GAAP net income (loss) to non-GAAP net income | ||||||||||||||||
| Net income (loss) attributable to RCIHH common stockholders | $ | 12,302 | $ | (5,474 | ) | $ | 28,036 | $ | (3,292 | ) | ||||||
| Amortization of intangibles | 51 | 149 | 209 | 462 | ||||||||||||
| Settlement of lawsuits | 127 | 50 | 280 | 74 | ||||||||||||
| Impairment of assets | 271 | 982 | 1,672 | 9,192 | ||||||||||||
| Gain on sale of businesses and assets | (541 | ) | (608 | ) | (455 | ) | (645 | ) | ||||||||
| Gain on debt extinguishment | - | - | (5,329 | ) | - | |||||||||||
| Unrealized loss (gain) on equity securities | (9 | ) | (31 | ) | 58 | 103 | ||||||||||
| Gain on insurance | - | - | (209 | ) | (33 | ) | ||||||||||
| Net income tax effect | 39 | (1,840 | ) | (1,702 | ) | (2,499 | ) | |||||||||
| Non-GAAP net income | $ | 12,240 | $ | (6,772 | ) | $ | 22,560 | $ | 3,362 | |||||||
| Reconciliation of GAAP diluted earnings (loss) per share to non-GAAP diluted earnings per share | ||||||||||||||||
| Diluted shares | 9,000 | 9,125 | 9,006 | 9,224 | ||||||||||||
| GAAP diluted earnings (loss) per share | $ | 1.37 | $ | (0.60 | ) | $ | 3.11 | $ | (0.36 | ) | ||||||
| Amortization of intangibles | 0.01 | 0.02 | 0.02 | 0.05 | ||||||||||||
| Settlement of lawsuits | 0.01 | 0.01 | 0.03 | 0.01 | ||||||||||||
| Impairment of assets | 0.03 | 0.11 | 0.19 | 1.00 | ||||||||||||
| Gain on sale of businesses and assets | (0.06 | ) | (0.07 | ) | (0.05 | ) | (0.07 | ) | ||||||||
| Gain on debt extinguishment | - | - | (0.59 | ) | - | |||||||||||
| Unrealized loss (gain) on equity securities | (0.00 | ) | (0.00 | ) | 0.01 | 0.01 | ||||||||||
| Gain on insurance | - | - | (0.02 | ) | (0.00 | ) | ||||||||||
| Net income tax effect | 0.00 | (0.20 | ) | (0.19 | ) | (0.27 | ) | |||||||||
| Non-GAAP diluted earnings per share | $ | 1.36 | $ | (0.74 | ) | $ | 2.50 | $ | 0.36 | |||||||
| Reconciliation of GAAP operating income to non-GAAP operating income | ||||||||||||||||
| Income (loss) from operations | $ | 18,507 | $ | (4,657 | ) | $ | 34,931 | $ | 2,554 | |||||||
| Amortization of intangibles | 51 | 149 | 209 | 462 | ||||||||||||
| Settlement of lawsuits | 127 | 50 | 280 | 74 | ||||||||||||
| Impairment of assets | 271 | 982 | 1,672 | 9,192 | ||||||||||||
| Gain on sale of businesses and assets | (541 | ) | (608 | ) | (455 | ) | (645 | ) | ||||||||
| Gain on insurance | - | - | (209 | ) | (33 | ) | ||||||||||
| Non-GAAP operating income | $ | 18,415 | $ | (4,084 | ) | $ | 36,428 | $ | 11,604 | |||||||
| Reconciliation of GAAP operating margin to non-GAAP operating margin | ||||||||||||||||
| GAAP operating margin | 32.0 | % | -31.6 | % | 24.9 | % | 2.5 | % | ||||||||
| Amortization of intangibles | 0.1 | % | 1.0 | % | 0.1 | % | 0.4 | % | ||||||||
| Settlement of lawsuits | 0.2 | % | 0.3 | % | 0.2 | % | 0.1 | % | ||||||||
| Impairment of assets | 0.5 | % | 6.7 | % | 1.2 | % | 8.9 | % | ||||||||
| Gain on sale of businesses and assets | -0.9 | % | -4.1 | % | -0.3 | % | -0.6 | % | ||||||||
| Gain on insurance | 0.0 | % | 0.0 | % | -0.1 | % | 0.0 | % | ||||||||
| Non-GAAP operating margin | 31.8 | % | -27.7 | % | 26.0 | % | 11.2 | % | ||||||||
| Reconciliation of net cash provided by operating activities to free cash flow | ||||||||||||||||
| Net cash provided by operating activities | $ | 14,971 | $ | 166 | $ | 32,217 | $ | 12,147 | ||||||||
| Less: Maintenance capital expenditures | 2,017 | - | 4,608 | 2,111 | ||||||||||||
| Free cash flow | $ | 12,954 | $ | 166 | $ | 27,609 | $ | 10,036 | ||||||||
RCI
HOSPITALITY HOLDINGS, INC.
SEGMENT
INFORMATION
(in
thousands)
For
the Three Months
For
the Nine Months
Ended
June 30,
Ended
June 30,
2021
2020
2021
2020
Revenues
Nightclubs
$
41,031
$
6,013
$
97,015
$
75,239
Bombshells
16,077
8,531
42,218
27,684
Other
752
177
1,084
618
$
57,860
$
14,721
$
140,317
$
103,541
Income
(loss) from operations
Nightclubs
$
18,350
$
(3,038
)
$
37,313
$
13,002
Bombshells
4,404
1,850
10,263
4,109
Other
321
(92
)
107
(423
)
General
corporate
(4,568
)
(3,377
)
(12,752
)
(14,134
)
$
18,507
$
(4,657
)
$
34,931
$
2,554
RCI HOSPITALITY HOLDINGS, INC.
NON-GAAP SEGMENT INFORMATION
($ in thousands)
| For the Three Months Ended June 30, 2021 | For the Three Months Ended June 30, 2020 | |||||||||||||||||||||||||||||||||||||||
| Nightclubs | Bombshells | Other | Corporate | Total | Nightclubs | Bombshells | Other | Corporate | Total | |||||||||||||||||||||||||||||||
| Income (loss) from operations | $ | 18,350 | $ | 4,404 | $ | 321 | $ | (4,568 | ) | $ | 18,507 | $ | (3,038 | ) | $ | 1,850 | $ | (92 | ) | $ | (3,377 | ) | $ | (4,657 | ) | |||||||||||||||
| Amortization of intangibles | 47 | 4 | - | - | 51 | 49 | 3 | 96 | - | 148 | ||||||||||||||||||||||||||||||
| Settlement of lawsuits | 123 | 4 | - | - | 127 | 50 | - | - | - | 50 | ||||||||||||||||||||||||||||||
| Impairment of assets | 271 | - | - | - | 271 | 982 | - | - | - | 982 | ||||||||||||||||||||||||||||||
| Loss (gain) on sale of businesses and assets | (512 | ) | 9 | - | (38 | ) | (541 | ) | (619 | ) | 16 | - | (4 | ) | (607 | ) | ||||||||||||||||||||||||
| Gain on insurance | - | - | - | - | - | - | - | - | - | - | ||||||||||||||||||||||||||||||
| Non-GAAP operating income (loss) | $ | 18,279 | $ | 4,421 | $ | 321 | $ | (4,606 | ) | $ | 18,415 | $ | (2,576 | ) | $ | 1,869 | $ | 4 | $ | (3,381 | ) | $ | (4,084 | ) | ||||||||||||||||
| GAAP operating margin | 44.7 | % | 27.4 | % | 42.7 | % | -7.9 | % | 32.0 | % | -50.5 | % | 21.7 | % | -52.0 | % | -22.9 | % | -31.6 | % | ||||||||||||||||||||
| Non-GAAP operating margin | 44.5 | % | 27.5 | % | 42.7 | % | -8.0 | % | 31.8 | % | -42.8 | % | 21.9 | % | 2.3 | % | -23.0 | % | -27.7 | % | ||||||||||||||||||||
| For the Nine Months Ended June 30, 2021 | For the Nine Months Ended June 30, 2020 | |||||||||||||||||||||||||||||||||||||||
| Nightclubs | Bombshells | Other | Corporate | Total | Nightclubs | Bombshells | Other | Corporate | Total | |||||||||||||||||||||||||||||||
| Income (loss) from operations | $ | 37,313 | $ | 10,263 | $ | 107 | $ | (12,752 | ) | $ | 34,931 | $ | 13,002 | $ | 4,109 | $ | (423 | ) | $ | (14,134 | ) | $ | 2,554 | |||||||||||||||||
| Amortization of intangibles | 141 | 11 | 57 | - | 209 | 163 | 11 | 287 | - | 461 | ||||||||||||||||||||||||||||||
| Settlement of lawsuits | 237 | 38 | 5 | - | 280 | 74 | - | - | - | 74 | ||||||||||||||||||||||||||||||
| Impairment of assets | 1,672 | - | - | - | 1,672 | 8,947 | 245 | - | - | 9,192 | ||||||||||||||||||||||||||||||
| Loss (gain) on sale of businesses and assets | (498 | ) | 56 | - | (13 | ) | (455 | ) | (619 | ) | 16 | - | (41 | ) | (644 | ) | ||||||||||||||||||||||||
| Gain on insurance | (165 | ) | - | - | (44 | ) | (209 | ) | (20 | ) | - | - | (13 | ) | (33 | ) | ||||||||||||||||||||||||
| Non-GAAP operating income (loss) | $ | 38,700 | $ | 10,368 | $ | 169 | $ | (12,809 | ) | $ | 36,428 | $ | 21,547 | $ | 4,381 | $ | (136 | ) | $ | (14,188 | ) | $ | 11,604 | |||||||||||||||||
| GAAP operating margin | 38.5 | % | 24.3 | % | 9.9 | % | -9.1 | % | 24.9 | % | 17.3 | % | 14.8 | % | -68.4 | % | -13.7 | % | 2.5 | % | ||||||||||||||||||||
| Non-GAAP operating margin | 39.9 | % | 24.6 | % | 15.6 | % | -9.1 | % | 26.0 | % | 28.6 | % | 15.8 | % | -22.0 | % | -13.7 | % | 11.2 | % | ||||||||||||||||||||
RCI HOSPITALITY HOLDINGS, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands)
| For the Three Months Ended | For the Nine Months Ended | |||||||||||||||
| June 30, 2021 | June 30, 2020 | June 30, 2021 | June 30, 2020 | |||||||||||||
| CASH FLOWS FROM OPERATING ACTIVITIES | ||||||||||||||||
| Net income (loss) | $ | 12,321 | $ | (5,568 | ) | $ | 27,862 | $ | (3,427 | ) | ||||||
| Adjustments to reconcile net income (loss) to net cash provided by operating activities: | ||||||||||||||||
| Depreciation and amortization | 2,057 | 2,235 | 6,197 | 6,696 | ||||||||||||
| Deferred income tax benefit | (430 | ) | (362 | ) | (430 | ) | (1,517 | ) | ||||||||
| Gain on sale of businesses and assets | (712 | ) | (713 | ) | (626 | ) | (749 | ) | ||||||||
| Impairment of assets | 271 | 982 | 1,672 | 9,192 | ||||||||||||
| Unrealized loss (gain) on equity securities | (9 | ) | (31 | ) | 58 | 103 | ||||||||||
| Amortization of debt discount and issuance costs | 59 | 65 | 160 | 194 | ||||||||||||
| Gain on debt extinguishment | - | - | (5,298 | ) | - | |||||||||||
| Noncash lease expense | 434 | 419 | 1,282 | 1,244 | ||||||||||||
| Gain on insurance | - | - | (294 | ) | (33 | ) | ||||||||||
| Doubtful accounts expense (reversal) on notes receivable | 36 | 495 | (22 | ) | 495 | |||||||||||
| Changes in operating assets and liabilities: | ||||||||||||||||
| Accounts receivable | 1,172 | (1,970 | ) | 4,309 | (53 | ) | ||||||||||
| Inventories | (76 | ) | 108 | (107 | ) | (29 | ) | |||||||||
| Prepaid expenses, other current assets and other assets | 852 | 2,102 | 2,346 | 4,942 | ||||||||||||
| Accounts payable, accrued and other liabilities | (1,004 | ) | 2,404 | (4,892 | ) | (4,911 | ) | |||||||||
| Net cash provided by operating activities | 14,971 | 166 | 32,217 | 12,147 | ||||||||||||
| CASH FLOWS FROM INVESTING ACTIVITIES | ||||||||||||||||
| Proceeds from sale of businesses and assets | 3,205 | 1,936 | 3,213 | 2,041 | ||||||||||||
| Proceeds from insurance | - | - | 294 | 945 | ||||||||||||
| Proceeds from notes receivable | 34 | 1,152 | 95 | 1,555 | ||||||||||||
| Payments for property and equipment and intangible assets | (4,070 | ) | (242 | ) | (10,788 | ) | (5,565 | ) | ||||||||
| Net cash provided by (used in) investing activities | (831 | ) | 2,846 | (7,186 | ) | (1,024 | ) | |||||||||
| CASH FLOWS FROM FINANCING ACTIVITIES | ||||||||||||||||
| Proceeds from debt obligations | - | 5,623 | 2,176 | 6,503 | ||||||||||||
| Payments on debt obligations | (4,868 | ) | (3,392 | ) | (10,845 | ) | (7,489 | ) | ||||||||
| Purchase of treasury stock | - | - | (1,794 | ) | (8,488 | ) | ||||||||||
| Payment of dividends | (360 | ) | (273 | ) | (1,080 | ) | (920 | ) | ||||||||
| Payment of loan origination costs | - | - | (25 | ) | - | |||||||||||
| Distribution to noncontrolling interests | - | - | - | (31 | ) | |||||||||||
| Net cash provided by (used in) financing activities | (5,228 | ) | 1,958 | (11,568 | ) | (10,425 | ) | |||||||||
| NET INCREASE IN CASH AND CASH EQUIVALENTS | 8,912 | 4,970 | 13,463 | 698 | ||||||||||||
| CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD | 20,156 | 9,825 | 15,605 | 14,097 | ||||||||||||
| CASH AND CASH EQUIVALENTS AT END OF PERIOD | $ | 29,068 | $ | 14,795 | $ | 29,068 | $ | 14,795 | ||||||||
RCI HOSPITALITY HOLDINGS, INC.
CONSOLIDATED BALANCE SHEETS
(in thousands)
| June 30, | September 30, | June 30, | ||||||||||
| 2021 | 2020 | 2020 | ||||||||||
| ASSETS | ||||||||||||
| Current assets | ||||||||||||
| Cash and cash equivalents | $ | 29,068 | $ | 15,605 | $ | 14,795 | ||||||
| Accounts receivable, net | 2,458 | 6,767 | 6,648 | |||||||||
| Current portion of notes receivable | 217 | 201 | 219 | |||||||||
| Inventories | 2,479 | 2,372 | 2,627 | |||||||||
| Prepaid expenses and other current assets | 4,062 | 6,488 | 3,167 | |||||||||
| Assets held for sale | 4,887 | - | 2,013 | |||||||||
| Total current assets | 43,171 | 31,433 | 29,469 | |||||||||
| Property and equipment, net | 178,087 | 181,383 | 181,960 | |||||||||
| Operating lease right-of-use assets, net | 24,481 | 25,546 | 25,962 | |||||||||
| Notes receivable, net of current portion | 2,819 | 2,908 | 2,896 | |||||||||
| Goodwill | 45,440 | 45,686 | 47,109 | |||||||||
| Intangibles, net | 73,019 | 73,077 | 73,224 | |||||||||
| Other assets | 922 | 900 | 873 | |||||||||
| Total assets | $ | 367,939 | $ | 360,933 | $ | 361,493 | ||||||
| LIABILITIES AND EQUITY | ||||||||||||
| Current liabilities | ||||||||||||
| Accounts payable | $ | 4,909 | $ | 4,799 | $ | 3,955 | ||||||
| Accrued liabilities | 11,738 | 14,573 | 10,286 | |||||||||
| Current portion of long-term debt, net | 13,695 | 16,304 | 17,249 | |||||||||
| Current portion of operating lease liabilities | 1,720 | 1,628 | 1,586 | |||||||||
| Total current liabilities | 32,062 | 37,304 | 33,076 | |||||||||
| Deferred tax liability, net | 19,960 | 20,390 | 20,141 | |||||||||
| Long-term debt, net of current portion and debt discount and issuance costs | 113,908 | 125,131 | 125,487 | |||||||||
| Operating lease liabilities, net of current portion | 24,360 | 25,439 | 25,863 | |||||||||
| Other long-term liabilities | 354 | 362 | 372 | |||||||||
| Total liabilities | 190,644 | 208,626 | 204,939 | |||||||||
| Commitments and contingencies | ||||||||||||
| Equity | ||||||||||||
| Preferred stock | - | - | - | |||||||||
| Common stock | 90 | 91 | 91 | |||||||||
| Additional paid-in capital | 50,040 | 51,833 | 52,829 | |||||||||
| Retained earnings | 127,753 | 100,797 | 103,956 | |||||||||
| Total RCIHH stockholders’ equity | 177,883 | 152,721 | 156,876 | |||||||||
| Noncontrolling interests | (588 | ) | (414 | ) | (322 | ) | ||||||
| Total equity | 177,295 | 152,307 | 156,554 | |||||||||
| Total liabilities and equity | $ | 367,939 | $ | 360,933 | $ | 361,493 | ||||||