RCI Reports 3Q22 Results: Total Revenues $70.7M, GAAP EPS $1.48, Non-GAAP EPS $1.60
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
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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 [email protected] 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 [email protected] and [email protected]
RCI HOSPITALITY HOLDINGS, INC. | |||||||||||||||||||
CONSOLIDATED STATEMENTS OF INCOME | |||||||||||||||||||
(in thousands, except per share, number of shares and percentage data) | |||||||||||||||||||
For the Three Months Ended June 30, | For the Nine Months Ended June 30, | ||||||||||||||||||
2022 | 2021 | 2022 | 2021 | ||||||||||||||||
Amount | % of | Amount | % of | Amount | % of | Amount | % of | ||||||||||||
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 | |||||||||||||||
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 | ||||||
SOURCE RCI Hospitality Holdings, Inc.
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