RCI Reports 4Q22 Results: Total Revenues $71.4M, GAAP EPS $1.15, Non-GAAP EPS $1.45
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, | • Toll Free 888-506-0062 • International: 973-528-0011 • Passcode: 847129 |
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
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 [email protected] and [email protected]
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 | Amount | % of | Amount | % of | Amount | % of | ||||||||
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 | 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, | September 30, | September 30, | September 30, | ||||
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 | |
SOURCE RCI Hospitality Holdings, Inc.
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