RCI Reports 2Q22 Results: Total Revenues $63.7M, GAAP EPS $1.15, Non-GAAP EPS $1.19
First Company to Use Twitter Spaces for Earnings Call – Today at 4:30 PM ET
HOUSTON, May 9, 2022 /PRNewswire/ -- RCI Hospitality Holdings, Inc. (Nasdaq: RICK) today reported results and filed its Form 10-Q for the fiscal 2022 second quarter and six months ended March 31, 2022.
Summary Financials | 2Q22 | Change YoY | 6M22 | Change YoY | ||||
Total Revenues | $63.7M | +44.6% | $125.5M | +52.2% | ||||
EPS | $1.15 | +69.1% | $2.28 | +30.3% | ||||
Non-GAAP EPS* | $1.19 | +58.0% | $2.29 | +100.1% | ||||
Net Cash from Operating Activities | $11.6M | +5.7% | $27.9M | +61.6% | ||||
Free Cash Flow* | $11.1M | +23.3% | $26.3M | +79.8% | ||||
Net Income Attributable to RCIHH Common Stockholders | $11.0M | +79.8% | $21.5M | +36.8% | ||||
Adjusted EBITDA* | $19.9M | +46.8% | $37.9M | +70.2% | ||||
Diluted Shares | 9.489M | +5.4% | 9.448M | +4.9% |
*See "Non-GAAP Financial Measures" below.
Eric Langan, President and CEO of RCI Hospitality Holdings, Inc., stated: "We had an outstanding quarter across the board. We ended the quarter with $38.1 million in cash, and favorable trends are continuing, with total revenues in April exceeding March. Thanks to all our teams for making all of this possible."
Expansion efforts are moving ahead. This includes continuing to improve the performance of clubs acquired in 1Q22, acquiring new ones, harnessing new technology to drive club traffic, and expanding Bombshells. Recent developments:
Nightclubs
- South Florida club acquired last week
- Fort Worth club under contract to buy
- New Rick's Steakhouse & Lounge opened in Miami
- Reformatted club opening soon in San Antonio
- AdmireMe.com social media fan site in full beta
- Tip-N-Strip non-fungible token (NFT) guest benefits program on track to mint in June
Bombshells
- Property acquired for a 12th Bombshells (Houston)
- Two other locations (Dallas and Lubbock, TX) under contract to buy
- Bombshells' first franchisee expected to open its first location in San Antonio this quarter
- Bombshells' second franchisee (announced last week) planning its first location for Huntsville, Alabama
Conference Call Today at 4:30 PM ETParticipants need to use Twitter Spaces on their mobile phones to ask questions during the Q&A
Telephone | Webcast | |
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Meet Management Tonight at 8:00 PM ET
- Investors are invited to meet management at RCI's top revenue generating club
- Tootsie's Cabaret Miami, 150 NW 183rd St., Miami, FL 33169
- To be on the guest list, RSVP your contact information to [email protected] by 5:00 PM ET today
2Q22 Segments
Nightclubs
- Revenues of $48.2 million increased by 56.5% compared to the prior-year quarter, when COVID-19 related government restrictions were just starting to ease.
- Newly acquired clubs contributed 50% of the $17.4 million increase in segment revenues. Same-store sales growth contributed 20%, and eight northern clubs (not open enough days in 2Q21 to qualify for same-store sales) contributed 30%.
- Operating margin was 39.7% vs. 34.0% in 2Q21 and 39.5% vs. 38.8% non-GAAP. Operating margin expanded primarily due to an 88% year-over-year increase in high-margin service revenues.
Bombshells
- Revenues of $15.3 million increased by 16.7% compared to the prior-year quarter.
- Bombshells Arlington, which opened in December, contributed 85% of the $2.2 million segment revenue increase. Same-store sales growth contributed 14%.
- Operating margin was 22.6% vs. 23.9% in the year ago quarter and 19.0% in the previous quarter, which was negatively affected by Arlington's pre-opening costs without the benefit of a full quarter of sales.
2Q22 ConsolidatedComparisons are to 2Q21 and % are of total revenues unless indicated otherwise
- Cost of goods sold improved (13.8% vs. 15.4%), reflecting the increase in sales mix of higher-margin service revenues (33.8% vs. 26.1%).
- Salaries and wages (26.0% vs. 25.4%) and SG&A (28.9% vs. 28.6%) were approximately level, reflecting new employees from new units and increased variable expenses related to sales in 2Q22.
- Operating margin was 26.8% vs. 22.3% and 26.9% vs. 25.9% non-GAAP.
- Interest expense increased $500,000 primarily due to higher debt related to the 1Q22 acquisitions, but declined to 4.5% from 5.4% of revenues.
- Income tax expense was $3.4 million compared to $1.9 million. The effective tax rate was 23.4% vs. 24.3%.
- Weighted average shares outstanding increased 5.4% due to shares issued for clubs acquired in 1Q22.
- 83,343 shares were bought back in the open market 2Q22 and 3Q22 through May 6, 2022, for $5.2 million, or an average of $62.37 per share.
- Debt was $178.1 million at 3/31/22 compared to $161.9 million at 12/31/21. The increase primarily reflected the January 2022 bank loan secured by real estate, most of which was acquired for cash in acquisitions.
NoteAs 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 determine 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 MeasuresIn 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, and (d) 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) 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 21.8% and 24.2% effective tax rate of the pre-tax non-GAAP income before taxes for the six months ended March 31, 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.comWith more than 50 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, and Scarlett's Cabaret. Sports bars/restaurants operate under the brand name Bombshells Restaurant & Bar.
Forward-Looking StatementsThis 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 ContactsGary 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 March 31, | For the Six Months Ended March 31, | ||||||||||||||||||
2022 | 2021 | 2022 | 2021 | ||||||||||||||||
Amount | % ofRevenue | Amount | % ofRevenue | Amount | % ofRevenue | Amount | % ofRevenue | ||||||||||||
Revenues | |||||||||||||||||||
Sales of alcoholic beverages | $ 27,335 | 42.9% | $ 20,273 | 46.0% | $ 53,766 | 42.8% | $ 37,633 | 45.6% | |||||||||||
Sales of food and merchandise | 11,160 | 17.5% | 9,538 | 21.6% | 22,054 | 17.6% | 18,147 | 22.0% | |||||||||||
Service revenues | 21,501 | 33.8% | 11,502 | 26.1% | 42,377 | 33.8% | 21,562 | 26.1% | |||||||||||
Other | 3,696 | 5.8% | 2,746 | 6.2% | 7,331 | 5.8% | 5,115 | 6.2% | |||||||||||
Total revenues | 63,692 | 100.0% | 44,059 | 100.0% | 125,528 | 100.0% | 82,457 | 100.0% | |||||||||||
Operating expenses | |||||||||||||||||||
Cost of goods sold | |||||||||||||||||||
Alcoholic beverages sold | 4,896 | 17.9% | 3,730 | 18.4% | 9,730 | 18.1% | 6,992 | 18.6% | |||||||||||
Food and merchandise sold | 3,840 | 34.4% | 3,029 | 31.8% | 7,797 | 35.4% | 5,918 | 32.6% | |||||||||||
Service and other | 24 | 0.1% | 43 | 0.3% | 124 | 0.2% | 96 | 0.4% | |||||||||||
Total cost of goods sold (exclusive of items shown below) | 8,760 | 13.8% | 6,802 | 15.4% | 17,651 | 14.1% | 13,006 | 15.8% | |||||||||||
Salaries and wages | 16,530 | 26.0% | 11,200 | 25.4% | 33,035 | 26.3% | 22,686 | 27.5% | |||||||||||
Selling, general and administrative | 18,437 | 28.9% | 12,618 | 28.6% | 36,923 | 29.4% | 24,770 | 30.0% | |||||||||||
Depreciation and amortization | 2,877 | 4.5% | 2,117 | 4.8% | 5,071 | 4.0% | 4,140 | 5.0% | |||||||||||
Other charges (gains), net | 7 | 0.0% | 1,481 | 3.4% | (144) | -0.1% | 1,431 | 1.7% | |||||||||||
Total operating expenses | 46,611 | 73.2% | 34,218 | 77.7% | 92,536 | 73.7% | 66,033 | 80.1% | |||||||||||
Income from operations | 17,081 | 26.8% | 9,841 | 22.3% | 32,992 | 26.3% | 16,424 | 19.9% | |||||||||||
Other income (expenses) | |||||||||||||||||||
Interest expense | (2,864) | -4.5% | (2,364) | -5.4% | (5,468) | -4.4% | (4,798) | -5.8% | |||||||||||
Interest income | 112 | 0.2% | 62 | 0.1% | 218 | 0.2% | 122 | 0.1% | |||||||||||
Non-operating gains, net | - | 0.0% | 431 | 1.0% | 84 | 0.1% | 5,347 | 6.5% | |||||||||||
Income before income taxes | 14,329 | 22.5% | 7,970 | 18.1% | 27,826 | 22.2% | 17,095 | 20.7% | |||||||||||
Income tax expense | 3,356 | 5.3% | 1,938 | 4.4% | 6,289 | 5.0% | 1,554 | 1.9% | |||||||||||
Net income | 10,973 | 17.2% | 6,032 | 13.7% | 21,537 | 17.2% | 15,541 | 18.8% | |||||||||||
Net loss (income) attributable to noncontrolling interests | (21) | 0.0% | 59 | 0.1% | (10) | 0.0% | 193 | 0.2% | |||||||||||
Net income attributable to RCIHH common shareholders | $ 10,952 | 17.2% | $ 6,091 | 13.8% | $ 21,527 | 17.1% | $ 15,734 | 19.1% | |||||||||||
Earnings per share | |||||||||||||||||||
Basic and diluted | $ 1.15 | $ 0.68 | $ 2.28 | $ 1.75 | |||||||||||||||
Weighted average shares outstanding | |||||||||||||||||||
Basic and diluted | 9,489,085 | 8,999,910 | 9,447,854 | 9,009,604 | |||||||||||||||
Dividends per share | $ 0.05 | $ 0.04 | $ 0.09 | $ 0.08 | |||||||||||||||
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, | |||||||
2022 | 2021 | 2022 | 2021 | |||||
Reconciliation of GAAP net income (loss) to Adjusted EBITDA | ||||||||
Net income attributable to RCIHH common stockholders | $ 10,952 | $ 6,091 | $ 21,527 | $ 15,734 | ||||
Income tax expense (benefit) | 3,356 | 1,938 | 6,289 | 1,554 | ||||
Interest expense, net | 2,752 | 2,302 | 5,250 | 4,676 | ||||
Settlement of lawsuits | 385 | 1 | 577 | 153 | ||||
Impairment of assets | - | 1,401 | - | 1,401 | ||||
Loss (gain) on sale of businesses and assets | (58) | 91 | (400) | 86 | ||||
Gain on debt extinguishment | - | (380) | (85) | (5,329) | ||||
Unrealized loss on equity securities | - | 34 | 1 | 67 | ||||
Gain on insurance | (320) | (12) | (321) | (209) | ||||
Depreciation and amortization | 2,877 | 2,117 | 5,071 | 4,140 | ||||
Adjusted EBITDA | $ 19,944 | $ 13,583 | $ 37,909 | $ 22,273 | ||||
Reconciliation of GAAP net income (loss) to non-GAAP net income | ||||||||
Net income attributable to RCIHH common stockholders | $ 10,952 | $ 6,091 | $ 21,527 | $ 15,734 | ||||
Amortization of intangibles | 49 | 79 | 99 | 158 | ||||
Settlement of lawsuits | 385 | 1 | 577 | 153 | ||||
Impairment of assets | - | 1,401 | - | 1,401 | ||||
Loss (gain) on sale of businesses and assets | (58) | 91 | (400) | 86 | ||||
Gain on debt extinguishment | - | (380) | (85) | (5,329) | ||||
Unrealized loss on equity securities | - | 34 | 1 | 67 | ||||
Gain on insurance | (320) | (12) | (321) | (209) | ||||
Net income tax effect | 291 | (522) | 253 | (1,741) | ||||
Non-GAAP net income | $ 11,299 | $ 6,783 | $ 21,651 | $ 10,320 | ||||
Reconciliation of GAAP diluted earnings (loss) per share to non-GAAP diluted earnings per share | ||||||||
Diluted shares | 9,489,085 | 8,999,910 | 9,447,854 | 9,009,604 | ||||
GAAP diluted earnings per share | $ 1.15 | $ 0.68 | $ 2.28 | $ 1.75 | ||||
Amortization of intangibles | 0.01 | 0.01 | 0.01 | 0.02 | ||||
Settlement of lawsuits | 0.04 | 0.00 | 0.06 | 0.02 | ||||
Impairment of assets | - | 0.16 | - | 0.16 | ||||
Loss (gain) on sale of businesses and assets | (0.01) | 0.01 | (0.04) | 0.01 | ||||
Gain on debt extinguishment | - | (0.04) | (0.01) | (0.59) | ||||
Unrealized loss on equity securities | - | 0.00 | 0.00 | 0.01 | ||||
Gain on insurance | (0.03) | (0.00) | (0.03) | (0.02) | ||||
Net income tax effect | 0.03 | (0.06) | 0.03 | (0.19) | ||||
Non-GAAP diluted earnings per share | $ 1.19 | $ 0.75 | $ 2.29 | $ 1.15 | ||||
Reconciliation of GAAP operating income to non-GAAP operating income | ||||||||
Income (loss) from operations | $ 17,081 | $ 9,841 | $ 32,992 | $ 16,424 | ||||
Amortization of intangibles | 49 | 79 | 99 | 158 | ||||
Settlement of lawsuits | 385 | 1 | 577 | 153 | ||||
Impairment of assets | - | 1,401 | - | 1,401 | ||||
Loss (gain) on sale of businesses and assets | (58) | 91 | (400) | 86 | ||||
Gain on insurance | (320) | (12) | (321) | (209) | ||||
Non-GAAP operating income | $ 17,137 | $ 11,401 | $ 32,947 | $ 18,013 | ||||
Reconciliation of GAAP operating margin to non-GAAP operating margin | ||||||||
GAAP operating margin | 26.8% | 22.3% | 26.3% | 19.9% | ||||
Amortization of intangibles | 0.1% | 0.2% | 0.1% | 0.2% | ||||
Settlement of lawsuits | 0.6% | 0.0% | 0.5% | 0.2% | ||||
Impairment of assets | 0.0% | 3.2% | 0.0% | 1.7% | ||||
Loss (gain) on sale of businesses and assets | -0.1% | 0.2% | -0.3% | 0.1% | ||||
Gain on insurance | -0.5% | 0.0% | -0.3% | -0.3% | ||||
Non-GAAP operating margin | 26.9% | 25.9% | 26.2% | 21.8% | ||||
Reconciliation of net cash provided by operating activities to free cash flow | ||||||||
Net cash provided by operating activities | $ 11,597 | $ 10,972 | $ 27,861 | $ 17,246 | ||||
Less: Maintenance capital expenditures | 518 | 1,986 | 1,516 | 2,591 | ||||
Free cash flow | $ 11,079 | $ 8,986 | $ 26,345 | $ 14,655 | ||||
RCI HOSPITALITY HOLDINGS, INC. | |||||||||
SEGMENT INFORMATION | |||||||||
(in thousands) | |||||||||
For the Three Months | For the Six Months | ||||||||
Ended March 31, | Ended March 31, | ||||||||
2022 | 2021 | 2022 | 2021 | ||||||
Revenues | |||||||||
Nightclubs | $ 48,174 | $ 30,787 | $ 94,955 | $ 55,984 | |||||
Bombshells | 15,333 | 13,135 | 30,104 | 26,141 | |||||
Other | 185 | 137 | 469 | 332 | |||||
$ 63,692 | $ 44,059 | $ 125,528 | $ 82,457 | ||||||
Income (loss) from operations | |||||||||
Nightclubs | $ 19,126 | $ 10,468 | $ 37,862 | $ 18,963 | |||||
Bombshells | 3,468 | 3,142 | 6,270 | 5,859 | |||||
Other | (34) | (139) | (77) | (214) | |||||
General corporate | (5,479) | (3,630) | (11,063) | (8,184) | |||||
$ 17,081 | $ 9,841 | $ 32,992 | $ 16,424 | ||||||
RCI HOSPITALITY HOLDINGS, INC. | ||||||||||||||||||||
NON-GAAP SEGMENT INFORMATION | ||||||||||||||||||||
($ in thousands) | ||||||||||||||||||||
For the Three Months Ended March 31, 2022 | For the Three Months Ended March 31, 2021 | |||||||||||||||||||
Nightclubs | Bombshells | Other | Corporate | Total | Nightclubs | Bombshells | Other | Corporate | Total | |||||||||||
Income (loss) from operations | $ 19,126 | $ 3,468 | $ (34) | $ (5,479) | $ 17,081 | $ 10,468 | $ 3,142 | $ (139) | $ (3,630) | $ 9,841 | ||||||||||
Amortization of intangibles | 47 | 1 | - | 1 | 49 | 47 | 3 | 29 | - | 79 | ||||||||||
Settlement of lawsuits | 277 | - | - | 108 | 385 | (4) | - | 5 | - | 1 | ||||||||||
Impairment of assets | - | - | - | - | - | 1,401 | - | - | - | 1,401 | ||||||||||
Loss (gain) on sale of businesses and assets | (125) | 4 | - | 63 | (58) | 14 | 47 | - | 30 | 91 | ||||||||||
Gain on insurance | (320) | - | - | - | (320) | 32 | - | - | (44) | (12) | ||||||||||
Non-GAAP operating income (loss) | $ 19,005 | $ 3,473 | $ (34) | $ (5,307) | $ 17,137 | $ 11,958 | $ 3,192 | $ (105) | $ (3,644) | $ 11,401 | ||||||||||
GAAP operating margin | 39.7% | 22.6% | -18.4% | -8.6% | 26.8% | 34.0% | 23.9% | -101.5% | -8.2% | 22.3% | ||||||||||
Non-GAAP operating margin | 39.5% | 22.7% | -18.4% | -8.3% | 26.9% | 38.8% | 24.3% | -76.6% | -8.3% | 25.9% | ||||||||||
For the Six Months Ended March 31, 2022 | For the Six Months Ended March 31, 2021 | |||||||||||||||||||
Nightclubs | Bombshells | Other | Corporate | Total | Nightclubs | Bombshells | Other | Corporate | Total | |||||||||||
Income (loss) from operations | $ 37,862 | $ 6,270 | $ (77) | $ (11,063) | $ 32,992 | $ 18,963 | $ 5,859 | $ (214) | $ (8,184) | $ 16,424 | ||||||||||
Amortization of intangibles | 94 | 4 | - | 1 | 99 | 94 | 7 | 57 | - | 158 | ||||||||||
Settlement of lawsuits | 454 | 10 | - | 113 | 577 | 114 | 34 | 5 | - | 153 | ||||||||||
Impairment of assets | - | - | - | - | - | 1,401 | - | - | - | 1,401 | ||||||||||
Loss (gain) on sale of businesses and assets | (80) | 17 | - | (337) | (400) | 14 | 47 | - | 25 | 86 | ||||||||||
Gain on insurance | (321) | - | - | - | (321) | (165) | - | - | (44) | (209) | ||||||||||
Non-GAAP operating income (loss) | $ 38,009 | $ 6,301 | $ (77) | $ (11,286) | $ 32,947 | $ 20,421 | $ 5,947 | $ (152) | $ (8,203) | $ 18,013 | ||||||||||
GAAP operating margin | 39.9% | 20.8% | -16.4% | -8.8% | 26.3% | 33.9% | 22.4% | -64.5% | -9.9% | 19.9% | ||||||||||
Non-GAAP operating margin | 40.0% | 20.9% | -16.4% | -9.0% | 26.2% | 36.5% | 22.7% | -45.8% | -9.9% | 21.8% | ||||||||||
RCI HOSPITALITY HOLDINGS, INC. | ||||||||||
CONSOLIDATED STATEMENTS OF CASH FLOWS | ||||||||||
(in thousands) | ||||||||||
For the Three Months Ended | For the Six Months Ended | |||||||||
March 31, 2022 | March 31, 2021 | March 31, 2022 | March 31, 2021 | |||||||
CASH FLOWS FROM OPERATING ACTIVITIES | ||||||||||
Net income | $ 10,973 | $ 6,032 | $ 21,537 | $ 15,541 | ||||||
Adjustments to reconcile net income to net cash | ||||||||||
provided by operating activities: | ||||||||||
Depreciation and amortization | 2,877 | 2,117 | 5,071 | 4,140 | ||||||
Loss (gain) on sale of businesses and assets | (185) | 91 | (708) | 86 | ||||||
Impairment of assets | - | 1,401 | - | 1,401 | ||||||
Unrealized loss on equity securities | - | 34 | 1 | 67 | ||||||
Amortization of debt discount and issuance costs | 85 | 50 | 136 | 101 | ||||||
Gain on debt extinguishment | - | (378) | (83) | (5,298) | ||||||
Noncash lease expense | 609 | 427 | 1,238 | 848 | ||||||
Gain on insurance | (321) | (44) | (321) | (294) | ||||||
Doubtful accounts expense (reversal) on notes receivable | 36 | 35 | 53 | (58) | ||||||
Changes in operating assets and liabilities: | ||||||||||
Accounts receivable | (279) | 1,704 | 1,065 | 3,137 | ||||||
Inventories | 169 | (9) | (276) | (31) | ||||||
Prepaid expenses, other current assets and other assets | 1,159 | 369 | (5,360) | 1,494 | ||||||
Accounts payable, accrued and other liabilities | (3,526) | (857) | 5,508 | (3,888) | ||||||
Net cash provided by operating activities | 11,597 | 10,972 | 27,861 | 17,246 | ||||||
CASH FLOWS FROM INVESTING ACTIVITIES | ||||||||||
Proceeds from sale of businesses and assets | 2,107 | 8 | 2,910 | 8 | ||||||
Proceeds from insurance | 300 | 44 | 485 | 294 | ||||||
Proceeds from notes receivable | 48 | 35 | 82 | 61 | ||||||
Payments for property and equipment and intangible assets | (4,140) | (5,429) | (13,990) | (6,718) | ||||||
Acquisition of businesses, net of cash acquired | - | - | (39,302) | - | ||||||
Net cash used in investing activities | (1,685) | (5,342) | (49,815) | (6,355) | ||||||
CASH FLOWS FROM FINANCING ACTIVITIES | ||||||||||
Proceeds from debt obligations | 18,740 | 2,176 | 35,742 | 2,176 | ||||||
Payments on debt obligations | (4,802) | (4,232) | (7,290) | (5,977) | ||||||
Purchase of treasury stock | (2,845) | - | (2,845) | (1,794) | ||||||
Payment of dividends | (474) | (360) | (854) | (720) | ||||||
Payment of loan origination costs | (418) | (25) | (418) | (25) | ||||||
Net cash provided by (used in) financing activities | 10,201 | (2,441) | 24,335 | (6,340) | ||||||
NET INCREASE IN CASH AND CASH EQUIVALENTS | 20,113 | 3,189 | 2,381 | 4,551 | ||||||
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD | 17,954 | 16,967 | 35,686 | 15,605 | ||||||
CASH AND CASH EQUIVALENTS AT END OF PERIOD | $ 38,067 | $ 20,156 | $ 38,067 | $ 20,156 | ||||||
RCI HOSPITALITY HOLDINGS, INC. | |||||||||
CONSOLIDATED BALANCE SHEETS | |||||||||
(in thousands) | |||||||||
March 31, | September 30, | March 31, | |||||||
2022 | 2021 | 2021 | |||||||
ASSETS | |||||||||
Current assets | |||||||||
Cash and cash equivalents | $ 38,067 | $ 35,686 | $ 20,156 | ||||||
Accounts receivable, net | 6,262 | 7,570 | 3,630 | ||||||
Current portion of notes receivable | 292 | 220 | 214 | ||||||
Inventories | 3,361 | 2,659 | 2,403 | ||||||
Prepaid expenses and other current assets | 6,880 | 1,928 | 5,020 | ||||||
Assets held for sale | 6,126 | 4,887 | 7,382 | ||||||
Total current assets | 60,988 | 52,950 | 38,805 | ||||||
Property and equipment, net | 203,434 | 175,952 | 175,153 | ||||||
Operating lease right-of-use assets, net | 36,180 | 24,308 | 24,698 | ||||||
Notes receivable, net of current portion | 5,411 | 2,839 | 2,892 | ||||||
Goodwill | 54,484 | 39,379 | 45,686 | ||||||
Intangibles, net | 125,284 | 67,824 | 73,070 | ||||||
Other assets | 1,771 | 1,367 | 806 | ||||||
Total assets | $ 487,552 | $ 364,619 | $ 361,110 | ||||||
LIABILITIES AND EQUITY | |||||||||
Current liabilities | |||||||||
Accounts payable | $ 6,255 | $ 4,408 | $ 4,021 | ||||||
Accrued liabilities | 15,576 | 10,403 | 12,321 | ||||||
Current portion of long-term debt, net | 11,177 | 6,434 | 16,380 | ||||||
Current portion of operating lease liabilities | 2,306 | 1,780 | 1,692 | ||||||
Total current liabilities | 35,314 | 23,025 | 34,414 | ||||||
Deferred tax liability, net | 22,040 | 19,137 | 20,390 | ||||||
Debt, net of current portion and debt discount and issuance costs | 166,903 | 118,734 | 116,032 | ||||||
Operating lease liabilities, net of current portion | 35,517 | 24,150 | 24,583 | ||||||
Other long-term liabilities | 355 | 350 | 357 | ||||||
Total liabilities | 260,129 | 185,396 | 195,776 | ||||||
Commitments and contingencies | |||||||||
Equity | |||||||||
Preferred stock | - | - | - | ||||||
Common stock | 94 | 90 | 90 | ||||||
Additional paid-in capital | 77,553 | 50,040 | 50,040 | ||||||
Retained earnings | 150,366 | 129,693 | 115,811 | ||||||
Total RCIHH stockholders' equity | 228,013 | 179,823 | 165,941 | ||||||
Noncontrolling interests | (590) | (600) | (607) | ||||||
Total equity | 227,423 | 179,223 | 165,334 | ||||||
Total liabilities and equity | $ 487,552 | $ 364,619 | $ 361,110 | ||||||
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SOURCE RCI Hospitality Holdings, Inc.