HOUSTON, Aug. 8, 2024
/PRNewswire/ -- RCI Hospitality Holdings, Inc. (Nasdaq: RICK) today
reported results for the fiscal 2024 third quarter ended
June 30, 2024. The company also filed
its Form 10-Q today.
|
Summary Financials
(in millions except EPS)
|
3Q24
|
3Q23
|
9M24
|
9M23
|
|
Total
revenues
|
$76.2
|
$77.1
|
$222.4
|
$218.5
|
|
EPS
|
$(0.56)
|
$0.96
|
$0.30
|
$2.91
|
|
Non-GAAP
EPS1
|
$1.35
|
$1.30
|
$3.11
|
$3.80
|
|
Other charges,
net
|
$18.3
|
$2.6
|
$26.5
|
$5.7
|
|
Net cash provided by
operating activities
|
$15.8
|
$15.3
|
$40.2
|
$47.0
|
|
Free cash
flow1
|
$13.8
|
$14.3
|
$35.3
|
$42.1
|
|
Net income (loss)
attributable to RCIHH common stockholders
|
$(5.2)
|
$9.1
|
$2.8
|
$27.1
|
|
Adjusted
EBITDA1
|
$20.1
|
$22.7
|
$54.8
|
$64.8
|
|
Weighted average shares
used in computing EPS – basic and diluted
|
9.28
|
9.43
|
9.33
|
9.31
|
|
1 See
"Non-GAAP Financial Measures" below
|
Share Repurchases
In 3Q24, RCI repurchased 202,630 common shares for $9.2 million (average $45.27 per share). As of August 5, 2024, RCI repurchased an additional
133,244 common shares for $6.0
million (average $44.86 per
share), resulting in 8,996,546 shares of common stock outstanding
and $22.9 million in remaining
purchase authorization.
Eric Langan, President and
CEO, said:
"The third quarter reflected the first full quarter of our Back
to Basics approach to business and our Capital Allocation Strategy.
We are taking aggressive action to increase revenues, reduce costs,
and expand margins, concentrating on our club business and buying
back stock, all with the goal of increasing free cash flow per
share.
"Nightclubs achieved record revenues, increasing year over year,
on a same-store basis, and from last quarter. While operating
margin was negatively impacted by non-cash impairments, it
increased sequentially on a non-GAAP basis.
"Bombshells revenues are now up two quarters in a row. While
operating margin was similarly affected by non-cash impairments, it
expanded sequentially on a non-GAAP basis. These improvements
reflected the new marketing and cost cutting moves implemented
mid-February.
"Finally, I'm pleased to report that as of last week we have
reached our short-term buyback objective of reducing shares
outstanding to less than 9 million. As part of that effort, we
bought back a total of 700,000 shares in the open market since
February 2022, reducing our share
count by the same number used in our big October 2021 and March
2023 acquisitions, and we did it at a 22% discount to the
average share price used in those transactions.2
"Looking ahead, we are laser focused on opening our reformatted
and new clubs and Bombshells currently under development;
rebuilding Baby Dolls Fort Worth as quickly and efficiently as
possible; reviewing all operating units to ensure they meet our
financial objectives; selling non-income producing real estate to
free up more cash and/or reduce debt; and using our cash flow to
facilitate the buyback of more shares and acquisition of
clubs."
X-Spaces Conference Call at 4:30 PM
ET Today
Hosted by RCI President & CEO Eric
Langan, CFO Bradley Chhay,
and Mark Moran of Equity Animal
Call link: https://x.com/RicksCEO/status/1821258346877612301
(X log in required)
Presentation link:
https://www.rcihospitality.com/investor-relations/
To ask questions during Q&A: Participants must join the X
Space using a mobile device
To listen only: Participants can access the X Space from a
computer
There will be no other types of telephone or webcast access
3Q24 Results (Comparisons are to the year-ago period
unless indicated otherwise)
Nightclubs segment: Revenues of $62.8 million increased by 0.6%, primarily
reflecting 1.7% same-store sales growth and two new and reformatted
clubs, partially offset by the temporary closing of clubs being
reformatted to liquor from BYOB and severe weather in Texas and South
Florida.3 By type of revenue, alcoholic beverages
increased by 4.9%; food, merchandise and other increased by 5.1%;
and service decreased by 5.3%. The differing growth rates primarily
reflected a higher alcohol and lower service sales mix from clubs
acquired over the past year and a half.
Non-cash impairment totaled $7.6
million compared to $2.6
million, resulting in operating income and margin of
$13.6 million and 21.7% of revenues
compared to $20.4 million and 32.7%,
respectively. Non-GAAP operating income and margin was $21.9 million and 34.9% of revenues compared to
$23.6 million and 37.7%,
respectively.
Compared to last quarter, revenues increased by 5.8%, and
operating margin was 21.7% compared to 18.6%. On a non-GAAP basis,
operating margin was 34.9% compared to 33.4%. The non-GAAP margin
increase reflected higher sales, including service, and reduced
costs.
Bombshells segment: Revenues of $13.1 million declined 8.7%, primarily reflecting
a 16.2% decline in SSS and temporary closings due to severe weather
in Texas, partially offset by
three locations not in SSS (Bombshells in San Antonio and Stafford in Texas and Cherry Creek Food Hall & Brewery
in Greenwood Village, CO, with its
Bombshells Kitchen).3
Non-cash impairment totaled $10.3
million, resulting in an operating loss and margin of
$8.9 million and (67.8)% of revenues
compared to income of $1.7 million
and 11.8%, respectively. Non-GAAP operating income and margin was
$1.4 million and 10.8% of revenues
compared to $1.8 million and 12.8%,
respectively. The decline in profitability primarily reflected
lower SSS.
Compared to last quarter, revenues increased 2.9%, and operating
margin was (67.8)% of revenues compared to 5.5%. On a non-GAAP
basis, operating margin was 10.8% compared to 5.9%. The revenue and
non-GAAP margin increases reflect the first full quarter of changes
initiated mid-February 2024.
Corporate segment: Expenses totaled $7.2 million or 9.4% of total revenues compared
to $6.3 million and 8.1%,
respectively. Non-GAAP expenses totaled $6.4
million or 8.4% of total revenues compared to $5.8 million or 7.5%, respectively. The expense
increase primarily reflected additional corporate level management,
accounting and professional services due to recently acquired
clubs, and new projects. Compared to 2Q24, expenses increased 5.4%
and expense margin was flat at 9.4%, and on a non-GAAP basis, 8.4%
compared to 8.8%.
Other charges included $7.6
million in goodwill, SOB and leasehold improvements
impairment related to six clubs and $10.3
million in operating lease right-of-use asset and leasehold
improvements impairment related to five Bombshells.
Income taxes were a benefit of $1.4 million compared to an expense of
$2.3 million. The effective income
tax rate was 21.5% compared to 20.1%.
Weighted average shares outstanding of 9.28 million
decreased 1.6% due to share buybacks partially offset by shares
issued in the 2Q23 Baby Dolls-Chicas Locas acquisition.
Debt was $245.4 million at
June 30, 2024 compared to
$231.9 million at March 31, 2024. The increase reflected a
previously announced $20 million bank
loan, partially offset by scheduled pay downs.
|
2 A total of
700,000 shares valued at $46.0 million were used in our big October
2021 (500,000 shares @ $60) and March 2023 acquisitions (200,000
shares @ $80). The first 700,000 shares bought back in the open
market since February 2022 after the 2021 acquisition were acquired
for $35.9 million (average $51.31 per share). This represents a
discount of $10.1 million or 22% of the value of shares used in the
two acquisitions.
|
|
3 See our
July 11, 2024, news release on 3Q24 sales for more
details
|
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) settlement of lawsuits,
(d) gains or losses on sale of businesses and assets, (e) gains or
losses on insurance, 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 or loss attributable to RCIHH common stockholders and
diluted earnings per share. Adjustment items are: (a) amortization
of intangibles, (b) impairment of assets, (c) settlement of
lawsuits, (d) gains or losses on sale of businesses and assets, (e)
gains or losses on insurance, (f) stock-based compensation, and (g)
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 11.7% and
21.6% effective tax rate of the pre-tax non-GAAP income before
taxes for the nine months ended June 30,
2024 and 2023, 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 or loss attributable
to RCIHH common stockholders: (a) depreciation and amortization,
(b) impairment of assets, (c) income tax expense (benefit), (d) net
interest expense, (e) settlement of lawsuits, (f) gains or losses
on sale of businesses and assets, (g) gains or losses on insurance,
and (h) 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) (X:
@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, 2023, 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
|
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 Nine Months
Ended
|
|
June 30,
2024
|
June 30,
2023
|
June 30,
2024
|
June 30,
2023
|
|
Amount
|
% of
Revenue
|
Amount
|
% of
Revenue
|
Amount
|
% of
Revenue
|
Amount
|
% of
Revenue
|
|
Revenues
|
|
|
|
|
|
|
|
|
|
Sales of alcoholic
beverages
|
$
34,442
|
45.2 %
|
$
34,151
|
44.3 %
|
$
100,665
|
45.3 %
|
$
93,937
|
43.0 %
|
|
Sales of food and
merchandise
|
11,736
|
15.4 %
|
11,405
|
14.8 %
|
33,606
|
15.1 %
|
32,757
|
15.0 %
|
|
Service
revenues
|
25,268
|
33.2 %
|
26,663
|
34.6 %
|
73,951
|
33.3 %
|
77,916
|
35.7 %
|
|
Other
|
4,734
|
6.2 %
|
4,836
|
6.3 %
|
14,148
|
6.4 %
|
13,930
|
6.4 %
|
|
Total
revenues
|
76,180
|
100.0 %
|
77,055
|
100.0 %
|
222,370
|
100.0 %
|
218,540
|
100.0 %
|
|
Operating
expenses
|
|
|
|
|
|
|
|
|
|
Cost of goods
sold
|
|
|
|
|
|
|
|
|
|
Alcoholic beverages
sold
|
6,273
|
18.2 %
|
6,397
|
18.7 %
|
18,445
|
18.3 %
|
17,136
|
18.2 %
|
|
Food and merchandise
sold
|
4,197
|
35.8 %
|
4,106
|
36.0 %
|
12,228
|
36.4 %
|
11,429
|
34.9 %
|
|
Service and
other
|
36
|
0.1 %
|
26
|
0.1 %
|
111
|
0.1 %
|
91
|
0.1 %
|
|
Total cost of goods
sold (exclusive of items shown below)
|
10,506
|
13.8 %
|
10,529
|
13.7 %
|
30,784
|
13.8 %
|
28,656
|
13.1 %
|
|
Salaries and
wages
|
20,992
|
27.6 %
|
20,578
|
26.7 %
|
63,299
|
28.5 %
|
58,682
|
26.9 %
|
|
Selling, general and
administrative
|
25,057
|
32.9 %
|
23,803
|
30.9 %
|
74,911
|
33.7 %
|
68,561
|
31.4 %
|
|
Depreciation and
amortization
|
3,901
|
5.1 %
|
4,041
|
5.2 %
|
11,638
|
5.2 %
|
11,108
|
5.1 %
|
|
Other charges,
net
|
18,260
|
24.0 %
|
2,589
|
3.4 %
|
26,452
|
11.9 %
|
5,693
|
2.6 %
|
|
Total operating
expenses
|
78,716
|
103.3 %
|
61,540
|
79.9 %
|
207,084
|
93.1 %
|
172,700
|
79.0 %
|
|
Income (loss) from
operations
|
(2,536)
|
(3.3) %
|
15,515
|
20.1 %
|
15,286
|
6.9 %
|
45,840
|
21.0 %
|
|
Other income
(expenses)
|
|
|
|
|
|
|
|
|
|
Interest
expense
|
(4,240)
|
(5.6) %
|
(4,316)
|
(5.6) %
|
(12,455)
|
(5.6) %
|
(11,680)
|
(5.3) %
|
|
Interest
income
|
130
|
0.2 %
|
87
|
0.1 %
|
320
|
0.1 %
|
268
|
0.1 %
|
|
Income (loss) before
income taxes
|
(6,646)
|
(8.7) %
|
11,286
|
14.6 %
|
3,151
|
1.4 %
|
34,428
|
15.8 %
|
|
Income tax expense
(benefit)
|
(1,426)
|
(1.9) %
|
2,269
|
2.9 %
|
378
|
0.2 %
|
7,447
|
3.4 %
|
|
Net income
(loss)
|
(5,220)
|
(6.9) %
|
9,017
|
11.7 %
|
2,773
|
1.2 %
|
26,981
|
12.3 %
|
|
Net loss (income)
attributable to noncontrolling interests
|
(13)
|
(0.0) %
|
68
|
0.1 %
|
(6)
|
(0.0) %
|
74
|
0.0 %
|
|
Net income (loss)
attributable to RCIHH common shareholders
|
$
(5,233)
|
(6.9) %
|
$
9,085
|
11.8 %
|
$
2,767
|
1.2 %
|
$
27,055
|
12.4 %
|
|
|
|
|
|
|
|
|
|
|
Earnings (loss) per
share
|
|
|
|
|
|
|
|
|
|
Basic and
diluted
|
|
|
|
|
|
|
|
|
|
$
(0.56)
|
|
$
0.96
|
|
$
0.30
|
|
$
2.91
|
|
|
Weighted average shares
used in computing earnings (loss) per share
|
|
|
|
|
|
|
|
|
|
Basic and
diluted
|
9,278,921
|
|
9,430,225
|
|
9,332,249
|
|
9,308,624
|
|
|
RCI HOSPITALITY
HOLDINGS, INC.
|
|
SEGMENT
INFORMATION
|
|
(in
thousands)
|
|
|
|
|
|
|
For the Three Months
Ended
|
For the Nine Months
Ended
|
|
June 30,
2024
|
June 30,
2023
|
June 30,
2024
|
June 30,
2023
|
|
Revenues
|
|
|
|
|
|
Nightclubs
|
$
62,823
|
$
62,449
|
$
183,228
|
$
175,805
|
|
Bombshells
|
13,139
|
14,397
|
38,641
|
42,143
|
|
Other
|
218
|
209
|
501
|
592
|
|
$
76,180
|
$
77,055
|
$
222,370
|
$
218,540
|
|
|
|
|
|
|
Income (loss) from
operations
|
|
|
|
|
|
Nightclubs
|
$
13,640
|
$
20,392
|
$
45,030
|
$
61,127
|
|
Bombshells
|
(8,914)
|
1,701
|
(8,129)
|
5,323
|
|
Other
|
(108)
|
(300)
|
(581)
|
(653)
|
|
Corporate
|
(7,154)
|
(6,278)
|
(21,034)
|
(19,957)
|
|
$
(2,536)
|
$
15,515
|
$
15,286
|
$
45,840
|
|
RCI HOSPITALITY
HOLDINGS, INC.
|
|
CONSOLIDATED
STATEMENTS OF CASH FLOWS
|
|
(in
thousands)
|
|
|
|
|
|
|
For the Three Months
Ended
|
For the Nine Months
Ended
|
|
June 30,
2024
|
June 30,
2023
|
June 30,
2024
|
June 30,
2023
|
|
CASH FLOWS FROM
OPERATING ACTIVITIES
|
|
|
|
|
|
Net income
(loss)
|
$
(5,220)
|
$
9,017
|
$
2,773
|
$
26,981
|
|
Adjustments to
reconcile net income (loss) to net cash provided by operating
activities:
|
|
|
|
|
|
Depreciation and
amortization
|
3,901
|
4,041
|
11,638
|
11,108
|
|
Impairment of
assets
|
17,931
|
2,631
|
25,964
|
3,293
|
|
Deferred income tax
benefit
|
(4,508)
|
(790)
|
(6,419)
|
(790)
|
|
Loss (gain) on sale of
businesses and assets
|
79
|
(183)
|
116
|
(872)
|
|
Amortization and
writeoff of debt discount and issuance costs
|
150
|
162
|
462
|
453
|
|
Doubtful accounts
expense on notes receivable
|
—
|
—
|
22
|
—
|
|
Gain on
insurance
|
—
|
—
|
—
|
(91)
|
|
Noncash lease
expense
|
783
|
763
|
2,318
|
2,226
|
|
Stock-based
compensation
|
471
|
470
|
1,412
|
2,117
|
|
Changes in operating
assets and liabilities, net of business acquisitions:
|
|
|
|
|
|
Accounts
receivable
|
1,985
|
772
|
3,052
|
1,480
|
|
Inventories
|
(70)
|
—
|
(212)
|
79
|
|
Prepaid expenses, other
current, and other assets
|
2,936
|
2,103
|
(3,484)
|
(3,602)
|
|
Accounts payable,
accrued, and other liabilities
|
(2,674)
|
(3,666)
|
2,591
|
4,622
|
|
Net cash provided by
operating activities
|
15,764
|
15,320
|
40,233
|
47,004
|
|
CASH FLOWS FROM
INVESTING ACTIVITIES
|
|
|
|
|
|
Proceeds from sale of
businesses and assets
|
1,950
|
1
|
1,950
|
2,811
|
|
Proceeds from
insurance
|
—
|
—
|
—
|
91
|
|
Proceeds from notes
receivable
|
63
|
57
|
179
|
170
|
|
Payments for property
and equipment and intangible assets
|
(6,417)
|
(9,029)
|
(19,219)
|
(31,119)
|
|
Acquisition of
businesses, net of cash acquired
|
—
|
—
|
—
|
(29,000)
|
|
Net cash used in
investing activities
|
(4,404)
|
(8,971)
|
(17,090)
|
(57,047)
|
|
CASH FLOWS FROM
FINANCING ACTIVITIES
|
|
|
|
|
|
Proceeds from debt
obligations
|
20,000
|
—
|
22,657
|
11,595
|
|
Payments on debt
obligations
|
(6,507)
|
(4,950)
|
(17,137)
|
(11,431)
|
|
Purchase of treasury
stock
|
(9,173)
|
—
|
(12,775)
|
(98)
|
|
Payment of
dividends
|
(552)
|
(565)
|
(1,674)
|
(1,580)
|
|
Payment of loan
origination costs
|
(154)
|
(34)
|
(290)
|
(239)
|
|
Share in return of
investment by noncontrolling partner
|
—
|
—
|
—
|
(600)
|
|
Net cash provided by
(used in) financing activities
|
3,614
|
(5,549)
|
(9,219)
|
(2,353)
|
|
NET INCREASE (DECREASE)
IN CASH AND CASH EQUIVALENTS
|
14,974
|
800
|
13,924
|
(12,396)
|
|
CASH AND CASH
EQUIVALENTS AT BEGINNING OF PERIOD
|
19,973
|
22,784
|
21,023
|
35,980
|
|
CASH AND CASH
EQUIVALENTS AT END OF PERIOD
|
$
34,947
|
$
23,584
|
$
34,947
|
$
23,584
|
|
RCI HOSPITALITY
HOLDINGS, INC.
|
|
CONSOLIDATED BALANCE
SHEETS
|
|
(in
thousands)
|
|
|
|
|
|
June 30,
2024
|
September 30,
2023
|
June 30,
2023
|
|
ASSETS
|
|
|
|
|
Current
assets
|
|
|
|
|
Cash and cash
equivalents
|
$
34,947
|
$
21,023
|
$
23,584
|
|
Accounts receivable,
net
|
6,794
|
9,846
|
7,433
|
|
Current portion of
notes receivable
|
263
|
249
|
244
|
|
Inventories
|
4,624
|
4,412
|
4,571
|
|
Prepaid expenses and
other current assets
|
5,457
|
1,943
|
5,028
|
|
Total current
assets
|
52,085
|
37,473
|
40,860
|
|
Property and equipment,
net
|
283,834
|
282,705
|
277,530
|
|
Operating lease
right-of-use assets, net
|
26,880
|
34,931
|
35,683
|
|
Notes receivable, net
of current portion
|
4,228
|
4,443
|
4,507
|
|
Goodwill
|
61,911
|
70,772
|
78,684
|
|
Intangibles,
net
|
170,709
|
179,145
|
181,262
|
|
Other assets
|
1,342
|
1,415
|
1,581
|
|
Total assets
|
$
600,989
|
$
610,884
|
$
620,107
|
|
|
|
|
|
LIABILITIES AND
EQUITY
|
|
|
|
|
Current
liabilities
|
|
|
|
|
Accounts
payable
|
$
5,519
|
$
6,111
|
$
7,762
|
|
Accrued
liabilities
|
20,155
|
16,051
|
17,732
|
|
Current portion of debt
obligations, net
|
28,889
|
22,843
|
23,824
|
|
Current portion of
operating lease liabilities
|
3,161
|
2,977
|
2,923
|
|
Total current
liabilities
|
57,724
|
47,982
|
52,241
|
|
Deferred tax liability,
net
|
22,724
|
29,143
|
30,146
|
|
Debt, net of current
portion and debt discount and issuance costs
|
216,511
|
216,908
|
219,999
|
|
Operating lease
liabilities, net of current portion
|
32,779
|
35,175
|
35,941
|
|
Other long-term
liabilities
|
318
|
352
|
355
|
|
Total
liabilities
|
330,056
|
329,560
|
338,682
|
|
|
|
|
|
Commitments and
contingencies
|
|
|
|
|
|
|
|
|
Equity
|
|
|
|
|
Preferred
stock
|
—
|
—
|
—
|
|
Common stock
|
91
|
94
|
94
|
|
Additional paid-in
capital
|
68,950
|
80,437
|
82,091
|
|
Retained
earnings
|
202,143
|
201,050
|
199,425
|
|
Total RCIHH
stockholders' equity
|
271,184
|
281,581
|
281,610
|
|
Noncontrolling
interests
|
(251)
|
(257)
|
(185)
|
|
Total equity
|
270,933
|
281,324
|
281,425
|
|
Total liabilities and
equity
|
$
600,989
|
$
610,884
|
$
620,107
|
|
RCI HOSPITALITY
HOLDINGS, INC.
|
|
NON-GAAP FINANCIAL
MEASURES
|
|
(in thousands, except
per share and percentage data)
|
|
|
|
|
|
|
For the Three Months
Ended
|
For the Nine Months
Ended
|
|
June 30,
2024
|
June 30,
2023
|
June 30,
2024
|
June 30,
2023
|
|
Reconciliation of
GAAP net income (loss) to Adjusted EBITDA
|
|
|
|
|
|
Net income (loss)
attributable to RCIHH common stockholders
|
$
(5,233)
|
$
9,085
|
$
2,767
|
$
27,055
|
|
Income tax expense
(benefit)
|
(1,426)
|
2,269
|
378
|
7,447
|
|
Interest expense,
net
|
4,110
|
4,229
|
12,135
|
11,412
|
|
Depreciation and
amortization
|
3,901
|
4,041
|
11,638
|
11,108
|
|
Impairment of
assets
|
17,931
|
2,631
|
25,964
|
3,293
|
|
Settlement of
lawsuits
|
141
|
63
|
308
|
3,183
|
|
Loss (gain) on sale of
businesses and assets
|
188
|
(105)
|
180
|
(692)
|
|
Gain on
insurance
|
—
|
—
|
—
|
(91)
|
|
Stock-based
compensation
|
471
|
470
|
1,412
|
2,117
|
|
Adjusted
EBITDA
|
$
20,083
|
$
22,683
|
$
54,782
|
$
64,832
|
|
|
|
|
|
|
Reconciliation of
GAAP net income (loss) to non-GAAP net income
|
|
|
|
|
|
Net income (loss)
attributable to RCIHH common stockholders
|
$
(5,233)
|
$
9,085
|
$
2,767
|
$
27,055
|
|
Amortization of
intangibles
|
598
|
918
|
1,897
|
2,722
|
|
Impairment of
assets
|
17,931
|
2,631
|
25,964
|
3,293
|
|
Settlement of
lawsuits
|
141
|
63
|
308
|
3,183
|
|
Stock-based
compensation
|
471
|
470
|
1,412
|
2,117
|
|
Loss (gain) on sale of
businesses and assets
|
188
|
(105)
|
180
|
(692)
|
|
Gain on
insurance
|
—
|
—
|
—
|
(91)
|
|
Net income tax
effect
|
(1,554)
|
(812)
|
(3,475)
|
(2,258)
|
|
Non-GAAP net
income
|
$
12,542
|
$
12,250
|
$
29,053
|
$
35,329
|
|
|
|
|
|
|
Reconciliation of
GAAP diluted earnings (loss) per share to non-GAAP diluted earnings
per share
|
|
|
|
|
|
Diluted
shares
|
9,278,921
|
9,430,225
|
9,332,249
|
9,308,624
|
|
GAAP diluted earnings
(loss) per share
|
$
(0.56)
|
$
0.96
|
$
0.30
|
$
2.91
|
|
Amortization of
intangibles
|
0.06
|
0.10
|
0.20
|
0.29
|
|
Impairment of
assets
|
1.93
|
0.28
|
2.78
|
0.35
|
|
Settlement of
lawsuits
|
0.02
|
0.01
|
0.03
|
0.34
|
|
Stock-based
compensation
|
0.05
|
0.05
|
0.15
|
0.23
|
|
Loss (gain) on sale of
businesses and assets
|
0.02
|
(0.01)
|
0.02
|
(0.07)
|
|
Gain on
insurance
|
0.00
|
0.00
|
0.00
|
(0.01)
|
|
Net income tax
effect
|
(0.17)
|
(0.09)
|
(0.37)
|
(0.24)
|
|
Non-GAAP diluted
earnings per share
|
$
1.35
|
$
1.30
|
$
3.11
|
$
3.80
|
|
|
|
|
|
|
Reconciliation of
GAAP operating income (loss) to non-GAAP operating
income
|
|
|
|
|
|
Income (loss) from
operations
|
$
(2,536)
|
$
15,515
|
$
15,286
|
$
45,840
|
|
Amortization of
intangibles
|
598
|
918
|
1,897
|
2,722
|
|
Impairment of
assets
|
17,931
|
2,631
|
25,964
|
3,293
|
|
Settlement of
lawsuits
|
141
|
63
|
308
|
3,183
|
|
Loss (gain) on sale of
businesses and assets
|
188
|
(105)
|
180
|
(692)
|
|
Gain on
insurance
|
—
|
—
|
—
|
(91)
|
|
Stock-based
compensation
|
471
|
470
|
1,412
|
2,117
|
|
Non-GAAP operating
income
|
$
16,793
|
$
19,492
|
$
45,047
|
$
56,372
|
|
|
|
|
|
|
Reconciliation of
GAAP operating margin to non-GAAP operating margin
|
|
|
|
|
|
Income (loss) from
operations
|
(3.3) %
|
20.1 %
|
6.9 %
|
21.0 %
|
|
Amortization of
intangibles
|
0.8 %
|
1.2 %
|
0.9 %
|
1.2 %
|
|
Impairment of
assets
|
23.5 %
|
3.4 %
|
11.7 %
|
1.5 %
|
|
Settlement of
lawsuits
|
0.2 %
|
0.1 %
|
0.1 %
|
1.5 %
|
|
Loss (gain) on sale of
businesses and assets
|
0.2 %
|
(0.1) %
|
0.1 %
|
(0.3) %
|
|
Gain on
insurance
|
0.0 %
|
0.0 %
|
0.0 %
|
(0.0) %
|
|
Stock-based
compensation
|
0.6 %
|
0.6 %
|
0.6 %
|
1.0 %
|
|
Non-GAAP operating
margin
|
22.0 %
|
25.3 %
|
20.3 %
|
25.8 %
|
|
|
|
|
|
|
Reconciliation of
net cash provided by operating activities to free cash
flow
|
|
|
|
|
|
Net cash provided by
operating activities
|
$
15,764
|
$
15,320
|
$
40,233
|
$
47,004
|
|
Less: Maintenance
capital expenditures
|
1,986
|
1,064
|
4,980
|
4,949
|
|
Free cash
flow
|
$
13,778
|
$
14,256
|
$
35,253
|
$
42,055
|
|
RCI HOSPITALITY
HOLDINGS, INC.
|
|
NON-GAAP SEGMENT
INFORMATION
|
|
($ in
thousands)
|
|
|
|
|
|
|
|
|
|
|
|
|
For the Three Months
Ended June 30, 2024
|
For the Three Months
Ended June 30, 2023
|
|
Nightclubs
|
Bombshells
|
Other
|
Corporate
|
Total
|
Nightclubs
|
Bombshells
|
Other
|
Corporate
|
Total
|
|
Income (loss) from
operations
|
$
13,640
|
$
(8,914)
|
$
(108)
|
$
(7,154)
|
$
(2,536)
|
$
20,392
|
$
1,701
|
$
(300)
|
$
(6,278)
|
$
15,515
|
|
Amortization of
intangibles
|
578
|
16
|
—
|
4
|
598
|
624
|
81
|
208
|
5
|
918
|
|
Impairment of
assets
|
7,619
|
10,312
|
—
|
—
|
17,931
|
2,631
|
—
|
—
|
—
|
2,631
|
|
Settlement of
lawsuits
|
141
|
—
|
—
|
—
|
141
|
57
|
6
|
—
|
—
|
63
|
|
Stock-based
compensation
|
—
|
—
|
—
|
471
|
471
|
—
|
—
|
—
|
470
|
470
|
|
Loss (gain) on sale of
businesses and assets
|
(76)
|
6
|
—
|
258
|
188
|
(153)
|
50
|
—
|
(2)
|
(105)
|
|
Gain on
insurance
|
—
|
—
|
—
|
—
|
—
|
—
|
—
|
—
|
—
|
—
|
|
Non-GAAP operating
income (loss)
|
$
21,902
|
$
1,420
|
$
(108)
|
$
(6,421)
|
$
16,793
|
$
23,551
|
$
1,838
|
$
(92)
|
$
(5,805)
|
$
19,492
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP operating
margin
|
21.7 %
|
(67.8) %
|
(49.5) %
|
(9.4) %
|
(3.3) %
|
32.7 %
|
11.8 %
|
(143.5) %
|
(8.1) %
|
20.1 %
|
|
Non-GAAP operating
margin
|
34.9 %
|
10.8 %
|
(49.5) %
|
(8.4) %
|
22.0 %
|
37.7 %
|
12.8 %
|
(44.0) %
|
(7.5) %
|
25.3 %
|
|
|
|
|
|
|
|
|
|
|
|
|
For the Nine Months
Ended June 30, 2024
|
For the Nine Months
Ended June 30, 2023
|
|
Nightclubs
|
Bombshells
|
Other
|
Corporate
|
Total
|
Nightclubs
|
Bombshells
|
Other
|
Corporate
|
Total
|
|
Income (loss) from
operations
|
$
45,030
|
$
(8,129)
|
$
(581)
|
$ (21,034)
|
$
15,286
|
$
61,127
|
$
5,323
|
$
(653)
|
$ (19,957)
|
$
45,840
|
|
Amortization of
intangibles
|
1,758
|
126
|
—
|
13
|
1,897
|
1,880
|
500
|
329
|
13
|
2,722
|
|
Impairment of
assets
|
15,652
|
10,312
|
—
|
—
|
25,964
|
3,293
|
—
|
—
|
—
|
3,293
|
|
Settlement of
lawsuits
|
308
|
—
|
—
|
—
|
308
|
3,174
|
9
|
—
|
—
|
3,183
|
|
Stock-based
compensation
|
—
|
—
|
—
|
1,412
|
1,412
|
—
|
—
|
—
|
2,117
|
2,117
|
|
Loss (gain) on sale of
businesses and assets
|
(70)
|
10
|
—
|
240
|
180
|
(734)
|
66
|
—
|
(24)
|
(692)
|
|
Gain on
insurance
|
—
|
—
|
—
|
—
|
—
|
(48)
|
—
|
—
|
(43)
|
(91)
|
|
Non-GAAP operating
income (loss)
|
$
62,678
|
$
2,319
|
$
(581)
|
$ (19,369)
|
$
45,047
|
$
68,692
|
$
5,898
|
$
(324)
|
$ (17,894)
|
$
56,372
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP operating
margin
|
24.6 %
|
(21.0) %
|
(116.0) %
|
(9.5) %
|
6.9 %
|
34.8 %
|
12.6 %
|
(110.3) %
|
(9.1) %
|
21.0 %
|
|
Non-GAAP operating
margin
|
34.2 %
|
6.0 %
|
(116.0) %
|
(8.7) %
|
20.3 %
|
39.1 %
|
14.0 %
|
(54.7) %
|
(8.2) %
|
25.8 %
|
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SOURCE RCI Hospitality Holdings, Inc.