RCI Reports Strong Increase in 2Q21 EPS and Free Cash Flow
HOUSTON, May 10, 2021 /PRNewswire/ -- RCI Hospitality Holdings, Inc. (Nasdaq: RICK) today reported results for the fiscal 2021 second quarter ended March 31, 2021 and filed its Form 10-Q.
Highlights (all comparisons in this news release are 2Q21 vs. 2Q20 unless otherwise noted)
- GAAP EPS of $0.68 compared to ($0.37)
- Non-GAAP* EPS of $0.75 compared to $0.47
- GAAP results included a $1.4 million impairment and $431,000 net non-operating gain (both pre-tax)
- Net cash from operating activities of $11.0 million and free cash flow* of $9.0 million
- $20.2 million cash and cash equivalents on March 31, 2021
- Total revenues of $44.1 million (+9.0%)
- Nightclubs segment revenues of $30.8 million with 34.0% operating margin (38.8% non-GAAP)
- Bombshells segment revenues of $13.1 million with 23.9% operating margin (24.3% non-GAAP)
Eric Langan, President & CEO, said: "2Q21 reflected a continued rebound in financial performance through the COVID-19 pandemic. Nightclubs had their best overall performance since the pandemic began. Bombshells served up another strong quarter. This enabled us to keep our teams employed and generate higher levels of free cash flow and profitability. Once again, we thank our loyal customers, dedicated team members, and steadfast investors.
"We hope these trends continue as the COVID-19 situation continues to improve. As of today, 36 clubs and 10 Bombshells are open. Nightclubs and Bombshells sales exceeded $18 million in April. Restrictive curfews, which have affected many of our northern clubs, are beginning to end. Minnesota, where we have three clubs, lifted its 11 PM curfew on Friday. New York, where we have three clubs, plans to eliminate its midnight curfew May 31. We hope the curfew in Chicago, where we have one club, will be lifted soon."
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Nightclubs Segment
- Revenue was $30.8 million (-1.8%) with same-store sales +3.6%.
- Cost of goods sold was 12.3% of segment revenue compared to 11.3% due to a lower proportion of service revenues, while other expenses in aggregate declined.
- Segment profitability increased to $10.5 million from $2.3 million. GAAP operating margin expanded to 34.0% from 7.3% in 2Q20. There were $1.4 million and $8.0 million of impairments, respectively, in 2Q21 and 2Q20.
- On a non-GAAP basis, profitability increased to $12.0 million (+16.1%) as operating margin expanded to 38.8% from 32.8%. This is the segment's best performance since 2Q20, when the COVID-19 pandemic was declared mid-March 2020.
- During 2Q21, 29 of 38 clubs were open for the full quarter and 37 by period-end with 21 closed for several days in mid-February due to the Texas Freeze. Most locations limited occupancy voluntarily or in accordance with coronavirus safety plans. Not all clubs operated at full schedules in line with local government restrictions, although curfews became less restrictive, particularly in March. Currently, two clubs are temporarily closed.
- During 2Q20, all 38 clubs were closed in mid-March 2020 as local and state restrictions went into effect.
Bombshells Segment
- Bombshells revenue was $13.1 million (+49.2%) with same-store sales +48.7%.
- Cost of goods sold was 22.8% of segment revenue compared to 24.7% due to higher revenue and lower cost of goods, while other expenses in aggregate as a percent of revenues also declined.
- Segment profitability increased to $3.1 million (+356.7%). GAAP operating margin expanded to 23.9% from 7.8%. On a non-GAAP basis, profitability increased to $3.2 million (+240.7%) as operating margin expanded to 24.3% from 10.6%.
- During 2Q21, all 10 Bombshells were open with the exception of several days due to the Texas Freeze. Capacity increased from 75% to 100% in mid-March.
- During 2Q20, the nine existing Bombshells at the start of the quarter and a new location, which opened late January 2020, were closed in mid-March as restrictions went into effect.
Consolidated
- Salaries and wages were 25.4% of revenues compared to 30.2%.
- SG&A was 28.6% of revenues compared to 35.7%.
- The improvements reflected better Nightclubs and Bombshells segment margins, cost-saving initiatives, and lower audit and legal fees as compared to the prior year.
- Other charges, net, reflected the above-mentioned impairments in the Nightclubs segment.
- Interest expense decreased 3.9% primarily due to lower debt balances.
- Non-operating gains of $431,000 pre-tax were primarily due to debt extinguishment of forgiven loans.
- Debt was $132.4 million at 3/31/21 compared to $134.8 million at 12/31/20. This reflected regular paydowns and debt extinguishment.
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. Lower sales, as caused by local, state and national guidelines, could lead to adverse financial results. However, we will continually monitor and evaluate our cash flow situation and will determine any further measures to be instituted, including refinancing several of our debt obligations.
- 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 24.2% and 7.6% effective tax rate of the pre-tax non-GAAP income before taxes for the six months ended March 31, 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) | |||||||||||||||||||
For the Three Months Ended March 31, | For the Six Months Ended March 31, | ||||||||||||||||||
2021 | 2020 | 2021 | 2020 | ||||||||||||||||
Amount | % of | Amount | % of | Amount | % of | Amount | % of | ||||||||||||
Revenues | |||||||||||||||||||
Sales of alcoholic beverages | $ 20,273 | 46.0% | $ 16,919 | 41.9% | $ 37,633 | 45.6% | $ 37,662 | 42.4% | |||||||||||
Sales of food and merchandise | 9,538 | 21.6% | 6,479 | 16.0% | 18,147 | 22.0% | 13,926 | 15.7% | |||||||||||
Service revenues | 11,502 | 26.1% | 14,348 | 35.5% | 21,562 | 26.1% | 31,541 | 35.5% | |||||||||||
Other | 2,746 | 6.2% | 2,680 | 6.6% | 5,115 | 6.2% | 5,691 | 6.4% | |||||||||||
Total revenues | 44,059 | 100.0% | 40,426 | 100.0% | 82,457 | 100.0% | 88,820 | 100.0% | |||||||||||
Operating expenses | |||||||||||||||||||
Cost of goods sold | |||||||||||||||||||
Alcoholic beverages sold | 3,730 | 18.4% | 3,435 | 20.3% | 6,992 | 18.6% | 7,581 | 20.1% | |||||||||||
Food and merchandise sold | 3,029 | 31.8% | 2,271 | 35.1% | 5,918 | 32.6% | 4,846 | 34.8% | |||||||||||
Service and other | 43 | 0.3% | 76 | 0.4% | 96 | 0.4% | 131 | 0.4% | |||||||||||
Total cost of goods sold (exclusive of items shown below) | 6,802 | 15.4% | 5,782 | 14.3% | 13,006 | 15.8% | 12,558 | 14.1% | |||||||||||
Salaries and wages | 11,200 | 25.4% | 12,222 | 30.2% | 22,686 | 27.5% | 25,445 | 28.6% | |||||||||||
Selling, general and administrative | 12,618 | 28.6% | 14,450 | 35.7% | 24,770 | 30.0% | 30,981 | 34.9% | |||||||||||
Depreciation and amortization | 2,117 | 4.8% | 2,257 | 5.6% | 4,140 | 5.0% | 4,461 | 5.0% | |||||||||||
Other charges, net | 1,481 | 3.4% | 8,190 | 20.3% | 1,431 | 1.7% | 8,164 | 9.2% | |||||||||||
Total operating expenses | 34,218 | 77.7% | 42,901 | 106.1% | 66,033 | 80.1% | 81,609 | 91.9% | |||||||||||
Income (loss) from operations | 9,841 | 22.3% | (2,475) | -6.1% | 16,424 | 19.9% | 7,211 | 8.1% | |||||||||||
Other income (expenses) | |||||||||||||||||||
Interest expense | (2,364) | -5.4% | (2,459) | -6.1% | (4,798) | -5.8% | (4,944) | -5.6% | |||||||||||
Interest income | 62 | 0.1% | 85 | 0.2% | 122 | 0.1% | 183 | 0.2% | |||||||||||
Non-operating gains (losses), net | 431 | 1.0% | (62) | -0.2% | 5,347 | 6.5% | (134) | -0.2% | |||||||||||
Income (loss) before income taxes | 7,970 | 18.1% | (4,911) | -12.1% | 17,095 | 20.7% | 2,316 | 2.6% | |||||||||||
Income tax expense (benefit) | 1,938 | 4.4% | (1,418) | -3.5% | 1,554 | 1.9% | 175 | 0.2% | |||||||||||
Net income (loss) | 6,032 | 13.7% | (3,493) | -8.6% | 15,541 | 18.8% | 2,141 | 2.4% | |||||||||||
Net loss attributable to noncontrolling interests | 59 | 0.1% | 41 | 0.1% | 193 | 0.2% | 41 | 0.0% | |||||||||||
Net income (loss) attributable to RCIHH common shareholders | $ 6,091 | 13.8% | $ (3,452) | -8.5% | $ 15,734 | 19.1% | $ 2,182 | 2.5% | |||||||||||
Earnings (loss) per share | |||||||||||||||||||
Basic and diluted | $ 0.68 | $ (0.37) | $ 1.75 | $ 0.24 | |||||||||||||||
Weighted average shares outstanding | |||||||||||||||||||
Basic and diluted | 9,000 | 9,225 | 9,010 | 9,274 | |||||||||||||||
Dividends per share | $ 0.04 | $ 0.04 | $ 0.08 | $ 0.07 | |||||||||||||||
RCI HOSPITALITY HOLDINGS, INC. | ||||||||
NON-GAAP FINANCIAL MEASURES | ||||||||
(in thousands, except per share and percentage data) | ||||||||
For the Three Months | For the Six Months | |||||||
Ended March 31, | Ended March 31, | |||||||
2021 | 2020 | 2021 | 2020 | |||||
Reconciliation of GAAP net income (loss) to Adjusted EBITDA | ||||||||
Net income (loss) attributable to RCIHH common stockholders | $ 6,091 | $ (3,452) | $ 15,734 | $ 2,182 | ||||
Income tax expense (benefit) | 1,938 | (1,418) | 1,554 | 175 | ||||
Interest expense, net | 2,302 | 2,374 | 4,676 | 4,761 | ||||
Settlement of lawsuits | 1 | - | 153 | 24 | ||||
Impairment of assets | 1,401 | 8,210 | 1,401 | 8,210 | ||||
Loss (gain) on sale of businesses and assets | 91 | (7) | 86 | (37) | ||||
Gain on debt extinguishment | (380) | - | (5,329) | - | ||||
Unrealized loss on equity securities | 34 | 62 | 67 | 134 | ||||
Gain on insurance | (12) | (13) | (209) | (33) | ||||
Depreciation and amortization | 2,117 | 2,257 | 4,140 | 4,461 | ||||
Adjusted EBITDA | $ 13,583 | $ 8,013 | $ 22,273 | $ 19,877 | ||||
Reconciliation of GAAP net income (loss) to non-GAAP net income | ||||||||
Net income (loss) attributable to RCIHH common stockholders | $ 6,091 | $ (3,452) | $ 15,734 | $ 2,182 | ||||
Amortization of intangibles | 79 | 157 | 158 | 313 | ||||
Settlement of lawsuits | 1 | - | 153 | 24 | ||||
Impairment of assets | 1,401 | 8,210 | 1,401 | 8,210 | ||||
Loss (gain) on sale of businesses and assets | 91 | (7) | 86 | (37) | ||||
Gain on debt extinguishment | (380) | - | (5,329) | - | ||||
Unrealized loss on equity securities | 34 | 62 | 67 | 134 | ||||
Gain on insurance | (12) | (13) | (209) | (33) | ||||
Net income tax effect | (522) | (633) | (1,741) | (659) | ||||
Non-GAAP net income | $ 6,783 | $ 4,324 | $ 10,320 | $ 10,134 | ||||
Reconciliation of GAAP diluted earnings (loss) per share to non-GAAP diluted earnings per share | ||||||||
Diluted shares | 9,000 | 9,225 | 9,010 | 9,274 | ||||
GAAP diluted earnings (loss) per share | $ 0.68 | $ (0.37) | $ 1.75 | $ 0.24 | ||||
Amortization of intangibles | 0.01 | 0.02 | 0.02 | 0.03 | ||||
Settlement of lawsuits | 0.00 | - | 0.02 | 0.00 | ||||
Impairment of assets | 0.16 | 0.89 | 0.16 | 0.89 | ||||
Loss (gain) on sale of businesses and assets | 0.01 | (0.00) | 0.01 | (0.00) | ||||
Gain on debt extinguishment | (0.04) | - | (0.59) | - | ||||
Unrealized loss on equity securities | 0.00 | 0.01 | 0.01 | 0.01 | ||||
Gain on insurance | (0.00) | (0.00) | (0.02) | (0.00) | ||||
Net income tax effect | (0.06) | (0.07) | (0.19) | (0.07) | ||||
Non-GAAP diluted earnings per share | $ 0.75 | $ 0.47 | $ 1.15 | $ 1.09 | ||||
Reconciliation of GAAP operating income to non-GAAP operating income | ||||||||
Income (loss) from operations | $ 9,841 | $ (2,475) | $ 16,424 | $ 7,211 | ||||
Amortization of intangibles | 79 | 157 | 158 | 313 | ||||
Settlement of lawsuits | 1 | - | 153 | 24 | ||||
Impairment of assets | 1,401 | 8,210 | 1,401 | 8,210 | ||||
Loss (gain) on sale of businesses and assets | 91 | (7) | 86 | (37) | ||||
Gain on insurance | (12) | (13) | (209) | (33) | ||||
Non-GAAP operating income | $ 11,401 | $ 5,872 | $ 18,013 | $ 15,688 | ||||
Reconciliation of GAAP operating margin to non-GAAP operating margin | ||||||||
GAAP operating margin | 22.3% | -6.1% | 19.9% | 8.1% | ||||
Amortization of intangibles | 0.2% | 0.4% | 0.2% | 0.4% | ||||
Settlement of lawsuits | 0.0% | 0.0% | 0.2% | 0.0% | ||||
Impairment of assets | 3.2% | 20.3% | 1.7% | 9.2% | ||||
Loss (gain) on sale of businesses and assets | 0.2% | 0.0% | 0.1% | 0.0% | ||||
Gain on insurance | 0.0% | 0.0% | -0.3% | 0.0% | ||||
Non-GAAP operating margin | 25.9% | 14.5% | 21.8% | 17.7% | ||||
Reconciliation of net cash provided by operating activities to free cash flow | ||||||||
Net cash provided by operating activities | $ 10,972 | $ 1,708 | $ 17,246 | $ 11,981 | ||||
Less: Maintenance capital expenditures | 1,986 | 1,090 | 2,591 | 2,111 | ||||
Free cash flow | $ 8,986 | $ 618 | $ 14,655 | $ 9,870 | ||||
RCI HOSPITALITY HOLDINGS, INC. | |||||||||
SEGMENT INFORMATION | |||||||||
(in thousands) | |||||||||
For the Three Months | For the Six Months | ||||||||
Ended March 31, | Ended March 31, | ||||||||
2021 | 2020 | 2021 | 2020 | ||||||
Revenues | |||||||||
Nightclubs | $ 30,787 | $ 31,367 | $ 55,984 | $ 69,226 | |||||
Bombshells | 13,135 | 8,803 | 26,141 | 19,153 | |||||
Other | 137 | 256 | 332 | 441 | |||||
$ 44,059 | $ 40,426 | $ 82,457 | $ 88,820 | ||||||
Income (loss) from operations | |||||||||
Nightclubs | $ 10,468 | $ 2,284 | $ 18,963 | $ 16,040 | |||||
Bombshells | 3,142 | 688 | 5,859 | 2,259 | |||||
Other | (139) | (146) | (214) | (331) | |||||
General corporate | (3,630) | (5,301) | (8,184) | (10,757) | |||||
$ 9,841 | $ (2,475) | $ 16,424 | $ 7,211 | ||||||
RCI HOSPITALITY HOLDINGS, INC. | ||||||||||||||||||||
NON-GAAP SEGMENT INFORMATION | ||||||||||||||||||||
($ in thousands) | ||||||||||||||||||||
For the Three Months Ended March 31, 2021 | For the Three Months Ended March 31, 2020 | |||||||||||||||||||
Nightclubs | Bombshells | Other | Corporate | Total | Nightclubs | Bombshells | Other | Corporate | Total | |||||||||||
Income (loss) from operations | $ 10,468 | $ 3,142 | $ (139) | $ (3,630) | $ 9,841 | $ 2,284 | $ 688 | $ (146) | $ (5,301) | $ (2,475) | ||||||||||
Amortization of intangibles | 47 | 3 | 29 | - | 79 | 57 | 4 | 96 | - | 157 | ||||||||||
Settlement of lawsuits | (4) | - | 5 | - | 1 | - | - | - | - | - | ||||||||||
Impairment of assets | 1,401 | - | - | - | 1,401 | 7,965 | 245 | - | - | 8,210 | ||||||||||
Loss (gain) on sale of businesses and assets | 14 | 47 | - | 30 | 91 | (3) | - | - | (4) | (7) | ||||||||||
Loss (gain) on insurance | 32 | - | - | (44) | (12) | - | - | - | (13) | (13) | ||||||||||
Non-GAAP operating income (loss) | $ 11,958 | $ 3,192 | $ (105) | $ (3,644) | $ 11,401 | $ 10,303 | $ 937 | $ (50) | $ (5,318) | $ 5,872 | ||||||||||
GAAP operating margin | 34.0% | 23.9% | -101.5% | -8.2% | 22.3% | 7.3% | 7.8% | -57.0% | -13.1% | -6.1% | ||||||||||
Non-GAAP operating margin | 38.8% | 24.3% | -76.6% | -8.3% | 25.9% | 32.8% | 10.6% | -19.5% | -13.2% | 14.5% | ||||||||||
For the Six Months Ended March 31, 2021 | For the Six Months Ended March 31, 2020 | |||||||||||||||||||
Nightclubs | Bombshells | Other | Corporate | Total | Nightclubs | Bombshells | Other | Corporate | Total | |||||||||||
Income (loss) from operations | $ 18,963 | $ 5,859 | $ (214) | $ (8,184) | $ 16,424 | $ 16,040 | $ 2,259 | $ (331) | $ (10,757) | $ 7,211 | ||||||||||
Amortization of intangibles | 94 | 7 | 57 | - | 158 | 114 | 8 | 191 | - | 313 | ||||||||||
Settlement of lawsuits | 114 | 34 | 5 | - | 153 | 24 | - | - | - | 24 | ||||||||||
Impairment of assets | 1,401 | - | - | - | 1,401 | 7,965 | 245 | - | - | 8,210 | ||||||||||
Loss (gain) on sale of businesses and assets | 14 | 47 | - | 25 | 86 | - | - | - | (37) | (37) | ||||||||||
Gain on insurance | (165) | - | - | (44) | (209) | (20) | - | - | (13) | (33) | ||||||||||
Non-GAAP operating income (loss) | $ 20,421 | $ 5,947 | $ (152) | $ (8,203) | $ 18,013 | $ 24,123 | $ 2,512 | $ (140) | $ (10,807) | $ 15,688 | ||||||||||
GAAP operating margin | 33.9% | 22.4% | -64.5% | -9.9% | 19.9% | 23.2% | 11.8% | -75.1% | -12.1% | 8.1% | ||||||||||
Non-GAAP operating margin | 36.5% | 22.7% | -45.8% | -9.9% | 21.8% | 34.8% | 13.1% | -31.7% | -12.2% | 17.7% | ||||||||||
RCI HOSPITALITY HOLDINGS, INC. | ||||||||||
CONSOLIDATED STATEMENTS OF CASH FLOWS | ||||||||||
(in thousands) | ||||||||||
For the Three Months Ended | For the Six Months Ended | |||||||||
March 31, 2021 | March 31, 2020 | March 31, 2021 | March 31, 2020 | |||||||
CASH FLOWS FROM OPERATING ACTIVITIES | ||||||||||
Net income (loss) | $ 6,032 | $ (3,493) | $ 15,541 | $ 2,141 | ||||||
Adjustments to reconcile net income (loss) to net cash | ||||||||||
provided by operating activities: | ||||||||||
Depreciation and amortization | 2,117 | 2,257 | 4,140 | 4,461 | ||||||
Deferred income tax benefit | - | (1,005) | - | (1,155) | ||||||
Loss (gain) on sale of businesses and assets | 91 | (6) | 86 | (36) | ||||||
Impairment of assets | 1,401 | 8,210 | 1,401 | 8,210 | ||||||
Unrealized loss on equity securities | 34 | 62 | 67 | 134 | ||||||
Amortization of debt discount and issuance costs | 50 | 68 | 101 | 129 | ||||||
Gain on debt extinguishment | (378) | - | (5,298) | - | ||||||
Noncash lease expense | 427 | 496 | 848 | 825 | ||||||
Gain on insurance | (44) | (13) | (294) | (33) | ||||||
Doubtful accounts expense (reversal) on notes receivable | 35 | - | (58) | - | ||||||
Changes in operating assets and liabilities: | ||||||||||
Accounts receivable | 1,704 | (428) | 3,137 | 1,917 | ||||||
Inventories | (9) | 4 | (31) | (137) | ||||||
Prepaid expenses, other current assets and other assets | 369 | 1,275 | 1,494 | 2,840 | ||||||
Accounts payable, accrued and other liabilities | (857) | (5,719) | (3,888) | (7,315) | ||||||
Net cash provided by operating activities | 10,972 | 1,708 | 17,246 | 11,981 | ||||||
CASH FLOWS FROM INVESTING ACTIVITIES | ||||||||||
Proceeds from sale of businesses and assets | 8 | 54 | 8 | 105 | ||||||
Proceeds from insurance | 44 | 13 | 294 | 945 | ||||||
Proceeds from notes receivable | 35 | 46 | 61 | 403 | ||||||
Payments for property and equipment and intangible assets | (5,429) | (1,265) | (6,718) | (5,323) | ||||||
Net cash used in investing activities | (5,342) | (1,152) | (6,355) | (3,870) | ||||||
CASH FLOWS FROM FINANCING ACTIVITIES | ||||||||||
Proceeds from debt obligations | 2,176 | 562 | 2,176 | 880 | ||||||
Payments on debt obligations | (4,232) | (2,016) | (5,977) | (4,097) | ||||||
Purchase of treasury stock | - | (2,047) | (1,794) | (8,488) | ||||||
Payment of dividends | (360) | (368) | (720) | (647) | ||||||
Payment of loan origination costs | (25) | - | (25) | - | ||||||
Distribution to noncontrolling interests | - | (21) | - | (31) | ||||||
Net cash used in financing activities | (2,441) | (3,890) | (6,340) | (12,383) | ||||||
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS | 3,189 | (3,334) | 4,551 | (4,272) | ||||||
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD | 16,967 | 13,159 | 15,605 | 14,097 | ||||||
CASH AND CASH EQUIVALENTS AT END OF PERIOD | $ 20,156 | $ 9,825 | $ 20,156 | $ 9,825 | ||||||
RCI HOSPITALITY HOLDINGS, INC. | ||||||||
CONSOLIDATED BALANCE SHEETS | ||||||||
(in thousands) | ||||||||
March 31, | September 30, | March 31, | ||||||
2021 | 2020 | 2020 | ||||||
ASSETS | ||||||||
Current assets | ||||||||
Cash and cash equivalents | $ 20,156 | $ 15,605 | $ 9,825 | |||||
Accounts receivable, net | 3,630 | 6,767 | 4,678 | |||||
Current portion of notes receivable | 214 | 201 | 675 | |||||
Inventories | 2,403 | 2,372 | 2,735 | |||||
Prepaid expenses and other current assets | 5,020 | 6,488 | 5,148 | |||||
Assets held for sale | 7,382 | - | 4,825 | |||||
Total current assets | 38,805 | 31,433 | 27,886 | |||||
Property and equipment, net | 175,153 | 181,383 | 182,234 | |||||
Operating lease right-of-use assets, net | 24,698 | 25,546 | 26,485 | |||||
Notes receivable, net of current portion | 2,892 | 2,908 | 4,087 | |||||
Goodwill | 45,686 | 45,686 | 47,109 | |||||
Intangibles, net | 73,070 | 73,077 | 74,251 | |||||
Other assets | 806 | 900 | 963 | |||||
Total assets | $ 361,110 | $ 360,933 | $ 363,015 | |||||
LIABILITIES AND EQUITY | ||||||||
Current liabilities | ||||||||
Accounts payable | $ 4,021 | $ 4,799 | $ 2,805 | |||||
Accrued liabilities | 12,321 | 14,573 | 8,671 | |||||
Current portion of long-term debt, net | 16,380 | 16,304 | 14,771 | |||||
Current portion of operating lease liabilities | 1,692 | 1,628 | 1,552 | |||||
Total current liabilities | 34,414 | 37,304 | 27,799 | |||||
Deferred tax liability, net | 20,390 | 20,390 | 20,503 | |||||
Long-term debt, net of current portion and debt discount and issuance costs | 116,032 | 125,131 | 125,669 | |||||
Operating lease liabilities, net of current portion | 24,583 | 25,439 | 26,275 | |||||
Other long-term liabilities | 357 | 362 | 374 | |||||
Total liabilities | 195,776 | 208,626 | 200,620 | |||||
Commitments and contingencies | ||||||||
Equity | ||||||||
Preferred stock | - | - | - | |||||
Common stock | 90 | 91 | 91 | |||||
Additional paid-in capital | 50,040 | 51,833 | 52,829 | |||||
Retained earnings | 115,811 | 100,797 | 109,703 | |||||
Total RCIHH stockholders' equity | 165,941 | 152,721 | 162,623 | |||||
Noncontrolling interests | (607) | (414) | (228) | |||||
Total equity | 165,334 | 152,307 | 162,395 | |||||
Total liabilities and equity | $ 361,110 | $ 360,933 | $ 363,015 | |||||
SOURCE RCI Hospitality Holdings, Inc.
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