Twitter Spaces Conference Call at 4:30
PM ET Today; Meet Management at 7 PM
ET Tonight
HOUSTON, May 10, 2023
/PRNewswire/ -- RCI Hospitality Holdings, Inc. (Nasdaq: RICK)
today reported results and filed its Form 10-Q for the fiscal 2023
second quarter ended March 31,
2023.
Summary Financials
|
2Q23
|
Change YoY
|
6M23
|
Change YoY
|
Total
Revenues
|
$71.5M
|
12.3 %
|
$141.5M
|
12.7 %
|
EPS
|
$0.83
|
-27.8 %
|
$1.94
|
-14.9 %
|
Non-GAAP
EPS*
|
$1.30
|
9.2 %
|
$2.50
|
9.2 %
|
Net Cash from Operating
Activities
|
$16.8M
|
44.8 %
|
$31.7M
|
13.7 %
|
Free Cash
Flow*
|
$14.8M
|
33.3 %
|
$27.8M
|
5.5 %
|
Net Income Attributable
to RCIHH Common Shareholders
|
$7.7M
|
-29.4 %
|
$18.0M
|
-16.5 %
|
Adjusted
EBITDA*
|
$21.7M
|
8.8 %
|
$42.1M
|
11.2 %
|
Weighted Average Basic
& Diluted Shares Outstanding
|
9.3M
|
-2.4 %
|
9.2M
|
-2.1 %
|
* See "Non-GAAP
Financial Measures" below.
|
Eric Langan, President and
CEO of RCI Hospitality Holdings, Inc., said: "We moved
ahead on a number of fronts during the second quarter. Revenues
grew to $71.5 million, an increase of
12.3% year over year, reflecting both same-store sales and
acquisitions. Free cash flow grew 33.3% to $14.8 million or 20.6% of revenues, and adjusted
EBITDA rose 8.8% to $21.7 million or
30.3% of revenues."
"We completed our 5-club, Baby Dolls-Chicas Locas acquisition
and look forward to optimizing their contribution. On a sequential
quarter basis, our Bombshells turnaround program has started to
produce results. We also advanced many of our projects involving
club acquisition and development, Rick's Cabaret Steakhouse &
Casino in Colorado, and new
Bombshells. 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/1kvJpmEEwjgxE
- Hosted by:
@RicksCEO, @BradleyChhay, and @itsmarkmoran
|
- Toll Free
877-545-0523
- International:
973-528-0016
- Passcode:
368166
|
- https://www.webcaster4.com/Webcast/Page/2209/48295
|
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
2Q23 Segments (Comparisons are to 2Q22 unless
indicated otherwise)
- Nightclubs: Revenues were $57.0
million, an increase of 18.4% compared to $48.2 million. The increase was driven by
$6.9 million from acquired and
remodeled clubs, and same store sales growth.1 Operating
income was $18.0 million or 31.6% of
revenues compared to $19.1 million or
39.7%. 2Q23 operating income included $3.1
million legal settlement accrual and $0.7 million non-cash impairment. Non-GAAP
operating income was $22.4 million or
39.3% of revenues compared to $19.0
million or 39.5%. On a sequential quarter basis, revenues
increased 1.3%, primarily driven by acquisitions, and non-GAAP
operating margin declined 1.1 percentage points, primarily
reflecting the Baby Dolls and Chicas Locas acquisition, which in
two weeks of ownership did not allow for enough time for full
operating optimization.
- Bombshells: Revenues were $14.3
million, a decline of 6.6% compared to $15.3 million in 2Q22, which was the segment's
last major peak stimulus/post-Covid quarter. Revenues included
$1.3 million from Bombshells San
Antonio (acquired February 2023) and
Grange Food Hall (acquired December
2022). Same-store sales declined.1 Operating
profit was $1.8 million or 12.4% of
revenues compared to $3.5 million or
22.6%. 2Q23 operating profit included $0.4
million of accelerated non-cash amortization of Grange food
stall leases. Non-GAAP operating profit was $2.2 million or 15.4% of revenues compared to
$3.5 million or 22.7%. On a
sequential quarter basis, revenues increased 6.6%, primarily driven
by acquisitions, and non-GAAP operating margin increased 1.6
percentage points, reflecting the segment's turnaround plan.
2Q23 Consolidated (Comparisons are to 2Q22 and % are
of total revenues unless indicated otherwise)
- Cost of goods sold: 12.7% compared to 13.8% and 12.9% in
1Q23. The year-over-year decline primarily reflected a 19.5%
increase in high-margin service revenues.
- Salaries and wages: 27.2% compared to 26.0% and 26.7% in
1Q23. 2Q23 primarily reflected higher minimum wage in many states
where RCI clubs operate as well as higher labor costs relating to
the newly acquired clubs.
- SG&A: 30.8% compared to 28.9% and 32.5% in 1Q23. The
year-over-year increase reflected FY23 acquisitions that have yet
to be fully optimized. The sequential decline reflected the absence
of year-end audit expenses in 2Q23.
- Depreciation and amortization: 5.3% compared to 4.5% and
4.7% in 1Q23. 2Q23 reflected $0.4
million in accelerated one-time, non-cash amortization of
Grange food stall leases.
- Other charges (gains), net: Charges of $3.8 million compared to $7 thousand and a $0.7
million gain in 1Q23. 2Q23 included $3.1 million legal settlement accrual and
$0.7 million non-cash impairment
charge.
- Operating margin: 18.8% compared to 26.8% and 24.2% in
1Q23 (non-GAAP of 26.6% compared to 26.9% and 25.6% in 1Q23).
- Interest expense: 5.1% compared to 4.5% and 5.3% in
1Q23. 2Q23 included the cost of $35.5
million in new debt associated with the mid-March Baby
Dolls-Chicas Locas acquisition.
- Income tax expense: $2.1
million compared to $3.4
million and $3.0 million in
1Q23. The effective tax rate was 21.8% compared to 23.4% and 22.8%
in 1Q23.
- Weighted average shares outstanding: Decreased 2.4%
year-over-year due to prior period repurchases. They increased 0.4%
sequentially due to 200,000 restricted shares of RCI common stock
valued at $16.0 million used in the
Baby Dolls-Chicas Locas acquisition.
- Debt: $245.8 million at
3/31/23 compared to $211.2 million at 12/31/22. The increase
primarily reflected $35.5 million in
financing for the 5-club Baby Dolls-Chicas Locas acquisition,
partially offset by regular paydowns of other debt.
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, and (f) 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 gains or losses on equity securities, (f) settlement of
lawsuits, (g) gain on debt extinguishment, (h) stock-based
compensation, and (i) 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 22.3% and 21.8% effective tax rate of the
pre-tax non-GAAP income before taxes for the six months ended
March 31, 2023 and 2022,
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 our unleveraged performance return on our
investments. Adjusted EBITDA is also the target benchmark for our
acquisitions of nightclubs.
- We also use certain 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 April 11,
2023 news release on 2Q23 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 Six Months
Ended
|
|
March 31,
2023
|
|
March 31,
2022
|
|
March 31,
2023
|
|
March 31,
2022
|
|
Amount
|
|
% of
Revenue
|
|
Amount
|
|
% of
Revenue
|
|
Amount
|
|
% of
Revenue
|
|
Amount
|
|
% of
Revenue
|
Revenues
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Sales of alcoholic
beverages
|
$
30,136
|
|
42.1 %
|
|
$
27,335
|
|
42.9 %
|
|
$
59,786
|
|
42.3 %
|
|
$
53,766
|
|
42.8 %
|
Sales of food and
merchandise
|
11,005
|
|
15.4 %
|
|
11,160
|
|
17.5 %
|
|
21,352
|
|
15.1 %
|
|
22,054
|
|
17.6 %
|
Service
revenues
|
25,690
|
|
35.9 %
|
|
21,501
|
|
33.8 %
|
|
51,253
|
|
36.2 %
|
|
42,377
|
|
33.8 %
|
Other
|
4,686
|
|
6.6 %
|
|
3,696
|
|
5.8 %
|
|
9,094
|
|
6.4 %
|
|
7,331
|
|
5.8 %
|
Total
revenues
|
71,517
|
|
100.0 %
|
|
63,692
|
|
100.0 %
|
|
141,485
|
|
100.0 %
|
|
125,528
|
|
100.0 %
|
Operating
expenses
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost of goods
sold
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Alcoholic beverages
sold
|
5,365
|
|
17.8 %
|
|
4,896
|
|
17.9 %
|
|
10,739
|
|
18.0 %
|
|
9,730
|
|
18.1 %
|
Food and merchandise
sold
|
3,737
|
|
34.0 %
|
|
3,840
|
|
34.4 %
|
|
7,323
|
|
34.3 %
|
|
7,797
|
|
35.4 %
|
Service and
other
|
16
|
|
0.1 %
|
|
24
|
|
0.1 %
|
|
65
|
|
0.1 %
|
|
124
|
|
0.2 %
|
Total cost of goods
sold (exclusive of items shown below)
|
9,118
|
|
12.7 %
|
|
8,760
|
|
13.8 %
|
|
18,127
|
|
12.8 %
|
|
17,651
|
|
14.1 %
|
Salaries and
wages
|
19,428
|
|
27.2 %
|
|
16,530
|
|
26.0 %
|
|
38,104
|
|
26.9 %
|
|
33,035
|
|
26.3 %
|
Selling, general and
administrative
|
22,026
|
|
30.8 %
|
|
18,437
|
|
28.9 %
|
|
44,758
|
|
31.6 %
|
|
36,923
|
|
29.4 %
|
Depreciation and
amortization
|
3,760
|
|
5.3 %
|
|
2,877
|
|
4.5 %
|
|
7,067
|
|
5.0 %
|
|
5,071
|
|
4.0 %
|
Other charges (gains),
net
|
3,758
|
|
5.3 %
|
|
7
|
|
0.0 %
|
|
3,104
|
|
2.2 %
|
|
(144)
|
|
-0.1 %
|
Total operating
expenses
|
58,090
|
|
81.2 %
|
|
46,611
|
|
73.2 %
|
|
111,160
|
|
78.6 %
|
|
92,536
|
|
73.7 %
|
Income from
operations
|
13,427
|
|
18.8 %
|
|
17,081
|
|
26.8 %
|
|
30,325
|
|
21.4 %
|
|
32,992
|
|
26.3 %
|
Other income
(expenses)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest
expense
|
(3,677)
|
|
-5.1 %
|
|
(2,864)
|
|
-4.5 %
|
|
(7,364)
|
|
-5.2 %
|
|
(5,468)
|
|
-4.4 %
|
Interest
income
|
90
|
|
0.1 %
|
|
112
|
|
0.2 %
|
|
181
|
|
0.1 %
|
|
218
|
|
0.2 %
|
Non-operating gains,
net
|
-
|
|
0.0 %
|
|
-
|
|
0.0 %
|
|
-
|
|
0.0 %
|
|
84
|
|
0.1 %
|
Income before income
taxes
|
9,840
|
|
13.8 %
|
|
14,329
|
|
22.5 %
|
|
23,142
|
|
16.4 %
|
|
27,826
|
|
22.2 %
|
Income tax
expense
|
2,147
|
|
3.0 %
|
|
3,356
|
|
5.3 %
|
|
5,178
|
|
3.7 %
|
|
6,289
|
|
5.0 %
|
Net income
|
7,693
|
|
10.8 %
|
|
10,973
|
|
17.2 %
|
|
17,964
|
|
12.7 %
|
|
21,537
|
|
17.2 %
|
Net loss (income)
attributable to noncontrolling interests
|
39
|
|
0.1 %
|
|
(21)
|
|
0.0 %
|
|
6
|
|
0.0 %
|
|
(10)
|
|
0.0 %
|
Net income attributable
to RCIHH common shareholders
|
$
7,732
|
|
10.8 %
|
|
$
10,952
|
|
17.2 %
|
|
$
17,970
|
|
12.7 %
|
|
$
21,527
|
|
17.1 %
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings per
share
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic and
diluted
|
$
0.83
|
|
|
|
$
1.15
|
|
|
|
$
1.94
|
|
|
|
$
2.28
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average shares
outstanding
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic and
diluted
|
9,265,781
|
|
|
|
9,489,085
|
|
|
|
9,247,824
|
|
|
|
9,447,854
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Dividends per
share
|
$
0.06
|
|
|
|
$
0.05
|
|
|
|
$
0.11
|
|
|
|
$
0.09
|
|
|
RCI HOSPITALITY
HOLDINGS, INC.
|
NON-GAAP FINANCIAL
MEASURES
|
(in thousands, except
per share and percentage data)
|
|
|
|
|
|
|
|
|
|
For the Three Months
Ended
|
|
For the Six Months
Ended
|
|
March
31,
|
|
March
31,
|
|
March
31,
|
|
March
31,
|
|
2023
|
|
2022
|
|
2023
|
|
2022
|
Reconciliation of
GAAP net income to Adjusted EBITDA
|
|
|
|
|
|
|
|
Net income attributable
to RCIHH common stockholders
|
$
7,732
|
|
$
10,952
|
|
$
17,970
|
|
$
21,527
|
Income tax
expense
|
2,147
|
|
3,356
|
|
5,178
|
|
6,289
|
Interest expense,
net
|
3,587
|
|
2,752
|
|
7,183
|
|
5,250
|
Settlement of
lawsuits
|
3,120
|
|
385
|
|
3,120
|
|
577
|
Impairment of
assets
|
662
|
|
-
|
|
662
|
|
-
|
Loss (gain) on sale of
businesses and assets
|
3
|
|
(58)
|
|
(587)
|
|
(400)
|
Gain on debt
extinguishment
|
-
|
|
-
|
|
-
|
|
(85)
|
Unrealized loss on
equity securities
|
-
|
|
-
|
|
-
|
|
1
|
Gain on
insurance
|
(27)
|
|
(320)
|
|
(91)
|
|
(321)
|
Stock-based
compensation
|
706
|
|
-
|
|
1,647
|
|
-
|
Depreciation and
amortization
|
3,760
|
|
2,877
|
|
7,067
|
|
5,071
|
Adjusted
EBITDA
|
$ 21,690
|
|
$
19,944
|
|
$
42,149
|
|
$
37,909
|
|
|
|
|
|
|
|
|
Reconciliation of
GAAP net income to non-GAAP net income
|
|
|
|
|
|
|
|
Net income attributable
to RCIHH common stockholders
|
$
7,732
|
|
$
10,952
|
|
$
17,970
|
|
$
21,527
|
Amortization of
intangibles
|
1,109
|
|
49
|
|
1,804
|
|
99
|
Settlement of
lawsuits
|
3,120
|
|
385
|
|
3,120
|
|
577
|
Impairment of
assets
|
662
|
|
-
|
|
662
|
|
-
|
Loss (gain) on sale of
businesses and assets
|
3
|
|
(58)
|
|
(587)
|
|
(400)
|
Gain on debt
extinguishment
|
-
|
|
-
|
|
-
|
|
(85)
|
Unrealized loss on
equity securities
|
-
|
|
-
|
|
-
|
|
1
|
Gain on
insurance
|
(27)
|
|
(320)
|
|
(91)
|
|
(321)
|
Stock-based
compensation
|
706
|
|
-
|
|
1,647
|
|
-
|
Net income tax
effect
|
(1,246)
|
|
291
|
|
(1,446)
|
|
253
|
Non-GAAP net
income
|
$ 12,059
|
|
$
11,299
|
|
$
23,079
|
|
$
21,651
|
|
|
|
|
|
|
|
|
Reconciliation of
GAAP diluted earnings per share to non-GAAP diluted earnings per
share
|
|
|
|
|
|
|
|
Diluted
shares
|
9,265,781
|
|
9,489,085
|
|
9,247,824
|
|
9,447,854
|
GAAP diluted earnings
per share
|
$
0.83
|
|
$
1.15
|
|
$
1.94
|
|
$
2.28
|
Amortization of
intangibles
|
0.12
|
|
0.01
|
|
0.20
|
|
0.01
|
Settlement of
lawsuits
|
0.34
|
|
0.04
|
|
0.34
|
|
0.06
|
Impairment of
assets
|
0.07
|
|
-
|
|
0.07
|
|
-
|
Loss (gain) on sale of
businesses and assets
|
0.00
|
|
(0.01)
|
|
(0.06)
|
|
(0.04)
|
Gain on debt
extinguishment
|
-
|
|
-
|
|
-
|
|
(0.01)
|
Unrealized loss on
equity securities
|
-
|
|
-
|
|
-
|
|
0.00
|
Gain on
insurance
|
(0.00)
|
|
(0.03)
|
|
(0.01)
|
|
(0.03)
|
Stock-based
compensation
|
0.08
|
|
-
|
|
0.18
|
|
-
|
Net income tax
effect
|
(0.13)
|
|
0.03
|
|
(0.16)
|
|
0.03
|
Non-GAAP diluted
earnings per share
|
$
1.30
|
|
$
1.19
|
|
$
2.50
|
|
$
2.29
|
|
|
|
|
|
|
|
|
Reconciliation of
GAAP operating income to non-GAAP operating income
|
|
|
|
|
|
|
|
Income from
operations
|
$ 13,427
|
|
$
17,081
|
|
$
30,325
|
|
$
32,992
|
Amortization of
intangibles
|
1,109
|
|
49
|
|
1,804
|
|
99
|
Settlement of
lawsuits
|
3,120
|
|
385
|
|
3,120
|
|
577
|
Impairment of
assets
|
662
|
|
-
|
|
662
|
|
-
|
Loss (gain) on sale of
businesses and assets
|
3
|
|
(58)
|
|
(587)
|
|
(400)
|
Gain on
insurance
|
(27)
|
|
(320)
|
|
(91)
|
|
(321)
|
Stock-based
compensation
|
706
|
|
-
|
|
1,647
|
|
-
|
Non-GAAP operating
income
|
$ 19,000
|
|
$
17,137
|
|
$
36,880
|
|
$
32,947
|
|
|
|
|
|
|
|
|
Reconciliation of
GAAP operating margin to non-GAAP operating margin
|
|
|
|
|
|
|
|
GAAP operating
margin
|
18.8 %
|
|
26.8 %
|
|
21.4 %
|
|
26.3 %
|
Amortization of
intangibles
|
1.6 %
|
|
0.1 %
|
|
1.3 %
|
|
0.1 %
|
Settlement of
lawsuits
|
4.4 %
|
|
0.6 %
|
|
2.2 %
|
|
0.5 %
|
Impairment of
assets
|
0.9 %
|
|
0.0 %
|
|
0.5 %
|
|
0.0 %
|
Loss (gain) on sale of
businesses and assets
|
0.0 %
|
|
-0.1 %
|
|
-0.4 %
|
|
-0.3 %
|
Gain on
insurance
|
0.0 %
|
|
-0.5 %
|
|
-0.1 %
|
|
-0.3 %
|
Stock-based
compensation
|
1.0 %
|
|
0.0 %
|
|
1.2 %
|
|
0.0 %
|
Non-GAAP operating
margin
|
26.6 %
|
|
26.9 %
|
|
26.1 %
|
|
26.2 %
|
|
|
|
|
|
|
|
|
Reconciliation of
net cash provided by operating activities to free cash
flow
|
|
|
|
|
|
|
|
Net cash provided by
operating activities
|
$ 16,789
|
|
$
11,597
|
|
$
31,684
|
|
$
27,861
|
Less: Maintenance
capital expenditures
|
2,021
|
|
518
|
|
3,885
|
|
1,516
|
Free cash
flow
|
$ 14,768
|
|
$
11,079
|
|
$
27,799
|
|
$
26,345
|
RCI HOSPITALITY
HOLDINGS, INC.
|
SEGMENT
INFORMATION
|
(in
thousands)
|
|
|
|
|
|
|
|
|
|
For the Three Months
Ended
|
|
For the Six Months
Ended
|
|
March
31,
|
|
March
31,
|
|
March
31,
|
|
March
31,
|
|
2023
|
|
2022
|
|
2023
|
|
2022
|
Revenues
|
|
|
|
|
|
|
|
Nightclubs
|
$
57,031
|
|
$
48,174
|
|
$
113,356
|
|
$
94,955
|
Bombshells
|
14,315
|
|
15,333
|
|
27,746
|
|
30,104
|
Other
|
171
|
|
185
|
|
383
|
|
469
|
|
$
71,517
|
|
$
63,692
|
|
$
141,485
|
|
$
125,528
|
|
|
|
|
|
|
|
|
Income (loss) from
operations
|
|
|
|
|
|
|
|
Nightclubs
|
$
17,995
|
|
$
19,126
|
|
$
40,735
|
|
$
37,862
|
Bombshells
|
1,775
|
|
3,468
|
|
3,622
|
|
6,270
|
Other
|
(168)
|
|
(34)
|
|
(353)
|
|
(77)
|
Corporate
|
(6,175)
|
|
(5,479)
|
|
(13,679)
|
|
(11,063)
|
|
$
13,427
|
|
$
17,081
|
|
$
30,325
|
|
$
32,992
|
RCI HOSPITALITY
HOLDINGS, INC.
|
NON-GAAP SEGMENT
INFORMATION
|
($ in
thousands)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For the Three Months
Ended March 31, 2023
|
|
For the Three Months
Ended March 31, 2022
|
|
Nightclubs
|
|
Bombshells
|
|
Other
|
|
Corporate
|
|
Total
|
|
Nightclubs
|
|
Bombshells
|
|
Other
|
|
Corporate
|
|
Total
|
Income (loss) from
operations
|
$
17,995
|
|
$
1,775
|
|
$
(168)
|
|
$
(6,175)
|
|
$ 13,427
|
|
$
19,126
|
|
$
3,468
|
|
$ (34)
|
|
$
(5,479)
|
|
$ 17,081
|
Amortization of
intangibles
|
628
|
|
417
|
|
60
|
|
4
|
|
1,109
|
|
47
|
|
1
|
|
-
|
|
1
|
|
49
|
Settlement of
lawsuits
|
3,117
|
|
3
|
|
-
|
|
-
|
|
3,120
|
|
277
|
|
-
|
|
-
|
|
108
|
|
385
|
Impairment of
assets
|
662
|
|
-
|
|
-
|
|
-
|
|
662
|
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
Loss (gain) on sale of
businesses and assets
|
(12)
|
|
16
|
|
-
|
|
(1)
|
|
3
|
|
(125)
|
|
4
|
|
-
|
|
63
|
|
(58)
|
Gain on
insurance
|
-
|
|
-
|
|
-
|
|
(27)
|
|
(27)
|
|
(320)
|
|
-
|
|
-
|
|
-
|
|
(320)
|
Stock-based
compensation
|
-
|
|
-
|
|
-
|
|
706
|
|
706
|
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
Non-GAAP operating
income (loss)
|
$
22,390
|
|
$
2,211
|
|
$
(108)
|
|
$
(5,493)
|
|
$ 19,000
|
|
$
19,005
|
|
$
3,473
|
|
$ (34)
|
|
$
(5,307)
|
|
$ 17,137
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP operating
margin
|
31.6 %
|
|
12.4 %
|
|
-98.2 %
|
|
-8.6 %
|
|
18.8 %
|
|
39.7 %
|
|
22.6 %
|
|
-18.4 %
|
|
-8.6 %
|
|
26.8 %
|
Non-GAAP operating
margin
|
39.3 %
|
|
15.4 %
|
|
-63.2 %
|
|
-7.7 %
|
|
26.6 %
|
|
39.5 %
|
|
22.7 %
|
|
-18.4 %
|
|
-8.3 %
|
|
26.9 %
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For the Six Months
Ended March 31, 2023
|
|
For the Six Months
Ended March 31, 2022
|
|
Nightclubs
|
|
Bombshells
|
|
Other
|
|
Corporate
|
|
Total
|
|
Nightclubs
|
|
Bombshells
|
|
Other
|
|
Corporate
|
|
Total
|
Income (loss) from
operations
|
$
40,735
|
|
$
3,622
|
|
$
(353)
|
|
$ (13,679)
|
|
$ 30,325
|
|
$
37,862
|
|
$
6,270
|
|
$ (77)
|
|
$ (11,063)
|
|
$ 32,992
|
Amortization of
intangibles
|
1,256
|
|
419
|
|
121
|
|
8
|
|
1,804
|
|
94
|
|
4
|
|
-
|
|
1
|
|
99
|
Settlement of
lawsuits
|
3,117
|
|
3
|
|
-
|
|
-
|
|
3,120
|
|
454
|
|
10
|
|
-
|
|
113
|
|
577
|
Impairment of
assets
|
662
|
|
-
|
|
-
|
|
-
|
|
662
|
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
Loss (gain) on sale of
businesses and assets
|
(581)
|
|
16
|
|
-
|
|
(22)
|
|
(587)
|
|
(80)
|
|
17
|
|
-
|
|
(337)
|
|
(400)
|
Gain on
insurance
|
(48)
|
|
-
|
|
-
|
|
(43)
|
|
(91)
|
|
(321)
|
|
-
|
|
-
|
|
-
|
|
(321)
|
Stock-based
compensation
|
-
|
|
-
|
|
-
|
|
1,647
|
|
1,647
|
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
Non-GAAP operating
income (loss)
|
$
45,141
|
|
$
4,060
|
|
$
(232)
|
|
$ (12,089)
|
|
$ 36,880
|
|
$
38,009
|
|
$
6,301
|
|
$ (77)
|
|
$ (11,286)
|
|
$ 32,947
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP operating
margin
|
35.9 %
|
|
13.1 %
|
|
-92.2 %
|
|
-9.7 %
|
|
21.4 %
|
|
39.9 %
|
|
20.8 %
|
|
-16.4 %
|
|
-8.8 %
|
|
26.3 %
|
Non-GAAP operating
margin
|
39.8 %
|
|
14.6 %
|
|
-60.6 %
|
|
-8.5 %
|
|
26.1 %
|
|
40.0 %
|
|
20.9 %
|
|
-16.4 %
|
|
-9.0 %
|
|
26.2 %
|
RCI HOSPITALITY
HOLDINGS, INC.
|
CONSOLIDATED
STATEMENTS OF CASH FLOWS
|
(in
thousands)
|
|
|
|
|
|
|
|
|
|
For the Three Months
Ended
|
|
For the Six Months
Ended
|
|
March 31,
2023
|
|
March 31,
2022
|
|
March 31,
2023
|
|
March 31,
2022
|
CASH FLOWS FROM
OPERATING ACTIVITIES
|
|
|
|
|
|
|
|
Net income
|
$
7,693
|
|
$
10,973
|
|
$
17,964
|
|
$
21,537
|
Adjustments to
reconcile net income to net cash
|
|
|
|
|
|
|
|
provided by operating
activities:
|
|
|
|
|
|
|
|
Depreciation and
amortization
|
3,760
|
|
2,877
|
|
7,067
|
|
5,071
|
Stock-based
compensation
|
706
|
|
-
|
|
1,647
|
|
-
|
Gain on sale of
businesses and assets
|
(3)
|
|
(185)
|
|
(689)
|
|
(708)
|
Impairment of
assets
|
662
|
|
0
|
|
662
|
|
0
|
Unrealized loss on
equity securities
|
-
|
|
-
|
|
-
|
|
1
|
Amortization of debt
discount and issuance costs
|
147
|
|
85
|
|
291
|
|
136
|
Gain on debt
extinguishment
|
-
|
|
-
|
|
-
|
|
(83)
|
Noncash lease
expense
|
744
|
|
609
|
|
1,463
|
|
1,238
|
Gain on
insurance
|
(27)
|
|
(321)
|
|
(91)
|
|
(321)
|
Doubtful accounts
expense on notes receivable
|
-
|
|
36
|
|
-
|
|
53
|
Changes in operating
assets and liabilities:
|
|
|
|
|
|
|
|
Accounts
receivable
|
(739)
|
|
(279)
|
|
708
|
|
1,065
|
Inventories
|
173
|
|
169
|
|
79
|
|
(276)
|
Prepaid expenses, other
current assets and other assets
|
1,503
|
|
1,159
|
|
(5,705)
|
|
(5,360)
|
Accounts payable,
accrued and other liabilities
|
2,170
|
|
(3,526)
|
|
8,288
|
|
5,508
|
Net cash provided by
operating activities
|
16,789
|
|
11,597
|
|
31,684
|
|
27,861
|
CASH FLOWS FROM
INVESTING ACTIVITIES
|
|
|
|
|
|
|
|
Proceeds from sale of
businesses and assets
|
26
|
|
2,107
|
|
2,810
|
|
2,910
|
Proceeds from
insurance
|
27
|
|
300
|
|
91
|
|
485
|
Proceeds from notes
receivable
|
58
|
|
48
|
|
113
|
|
82
|
Payments for property
and equipment and intangible assets
|
(8,337)
|
|
(4,140)
|
|
(20,890)
|
|
(13,990)
|
Acquisition of
businesses, net of cash acquired
|
(26,200)
|
|
-
|
|
(30,200)
|
|
(39,302)
|
Net cash used in
investing activities
|
(34,426)
|
|
(1,685)
|
|
(48,076)
|
|
(49,815)
|
CASH FLOWS FROM
FINANCING ACTIVITIES
|
|
|
|
|
|
|
|
Proceeds from debt
obligations
|
10,095
|
|
18,740
|
|
11,595
|
|
35,742
|
Payments on debt
obligations
|
(3,120)
|
|
(4,802)
|
|
(6,481)
|
|
(7,290)
|
Purchase of treasury
stock
|
-
|
|
(2,845)
|
|
(98)
|
|
(2,845)
|
Payment of
dividends
|
(553)
|
|
(474)
|
|
(1,015)
|
|
(854)
|
Payment of loan
origination costs
|
(109)
|
|
(418)
|
|
(205)
|
|
(418)
|
Share in return of
investment by noncontrolling partner
|
-
|
|
-
|
|
(600)
|
|
-
|
Net cash provided by
financing activities
|
6,313
|
|
10,201
|
|
3,196
|
|
24,335
|
NET INCREASE (DECREASE)
IN CASH AND CASH EQUIVALENTS
|
(11,324)
|
|
20,113
|
|
(13,196)
|
|
2,381
|
CASH AND CASH
EQUIVALENTS AT BEGINNING OF PERIOD
|
34,108
|
|
17,954
|
|
35,980
|
|
35,686
|
CASH AND CASH
EQUIVALENTS AT END OF PERIOD
|
$
22,784
|
|
$
38,067
|
|
$
22,784
|
|
$
38,067
|
RCI HOSPITALITY
HOLDINGS, INC.
|
CONSOLIDATED BALANCE
SHEETS
|
(in
thousands)
|
|
|
|
|
|
|
|
March
31,
|
|
September
30,
|
|
March
31,
|
|
2023
|
|
2022
|
|
2022
|
ASSETS
|
|
|
|
|
|
Current
assets
|
|
|
|
|
|
Cash and cash
equivalents
|
$
22,784
|
|
$
35,980
|
|
$
38,067
|
Accounts receivable,
net
|
6,755
|
|
8,510
|
|
6,262
|
Current portion of
notes receivable
|
239
|
|
230
|
|
292
|
Inventories
|
4,571
|
|
3,893
|
|
3,361
|
Prepaid expenses and
other current assets
|
6,870
|
|
1,499
|
|
6,880
|
Assets held for
sale
|
-
|
|
1,049
|
|
6,126
|
Total current
assets
|
41,219
|
|
51,161
|
|
60,988
|
Property and equipment,
net
|
295,861
|
|
224,615
|
|
203,434
|
Operating lease
right-of-use assets, net
|
37,244
|
|
37,048
|
|
36,180
|
Notes receivable, net
of current portion
|
4,569
|
|
4,691
|
|
5,411
|
Goodwill
|
84,051
|
|
67,767
|
|
54,484
|
Intangibles,
net
|
156,331
|
|
144,049
|
|
125,284
|
Other assets
|
1,856
|
|
1,407
|
|
1,771
|
Total assets
|
$
621,131
|
|
$ 530,738
|
|
$
487,552
|
|
|
|
|
|
|
LIABILITIES AND
EQUITY
|
|
|
|
|
|
Current
liabilities
|
|
|
|
|
|
Accounts
payable
|
$ 7,743
|
|
$
5,482
|
|
$ 6,255
|
Accrued
liabilities
|
20,958
|
|
11,328
|
|
15,576
|
Current portion of
debt, net
|
21,016
|
|
11,896
|
|
11,177
|
Current portion of
operating lease liabilities
|
2,951
|
|
2,795
|
|
2,306
|
Total current
liabilities
|
52,668
|
|
31,501
|
|
35,314
|
Deferred tax liability,
net
|
30,936
|
|
30,562
|
|
22,040
|
Debt, net of current
portion and debt discount and issuance costs
|
224,751
|
|
190,567
|
|
166,903
|
Operating lease
liabilities, net of current portion
|
36,429
|
|
36,001
|
|
35,517
|
Other long-term
liabilities
|
383
|
|
349
|
|
355
|
Total
liabilities
|
345,167
|
|
288,980
|
|
260,129
|
|
|
|
|
|
|
Commitments and
contingencies
|
|
|
|
|
|
|
|
|
|
|
|
Equity
|
|
|
|
|
|
Preferred
stock
|
-
|
|
-
|
|
-
|
Common stock
|
94
|
|
92
|
|
94
|
Additional paid-in
capital
|
85,082
|
|
67,227
|
|
77,553
|
Retained
earnings
|
190,905
|
|
173,950
|
|
150,366
|
Total RCIHH
stockholders' equity
|
276,081
|
|
241,269
|
|
228,013
|
Noncontrolling
interests
|
(117)
|
|
489
|
|
(590)
|
Total equity
|
275,964
|
|
241,758
|
|
227,423
|
Total liabilities and
equity
|
$
621,131
|
|
$ 530,738
|
|
$
487,552
|
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SOURCE RCI Hospitality Holdings, Inc.