HOUSTON, Feb. 13, 2020 /PRNewswire/ — RCI Hospitality Holdings, Inc. (Nasdaq: RICK) today filed its 10-K and reported 4Q19 and FY19 results for the year ended September 30, 2019.

RCI Hospitality Holdings Corporate Logo (PRNewsFoto/RCI Hospitality Holdings, Inc.) (PRNewsfoto/RCI Hospitality Holdings, Inc.)

 

4Q19 vs. 4Q18

FY19 vs. FY18

•  Diluted EPS of $0.05 compared to ($0.36)
• 
Non-GAAP* diluted EPS of $0.48 compared to
$0.41

•  GAAP results included $4.9 million in other
charges compared to $6.4 million in 4Q18

•  Free cash flow (FCF) totaled $7.0 million (based
on net cash provided by operating activities of
$8.8 million, less maintenance capital
expenditures of $1.8 million) compared to $2.7
million

•  Total revenues of $45.2 million compared to
$40.7 million on 45 and 43 units, respectively

•  Diluted EPS of $1.99 compared to $2.15, which
included a large tax benefit

•  Non-GAAP diluted EPS of $2.31 compared to
$2.18

•  GAAP results included $2.6 million in other
charges compared to $9.2 million in FY18

•  FCF totaled $33.3 million (based on net cash
provided by operating activities of $37.2 million,
less maintenance capital expenditures of $3.9
million) compared to $23.2 million

•  Total revenues of $181.1 million compared to
$165.7 million

Conference Call 4:30 PM ET Today

Meet Management 6-8 PM ET Tonight

•  A conference call to discuss 4Q19 results, outlook
and related matters
• 
Live Participant Phone Number: Toll Free 877-
407-9210, International 201-689-8049

•  To access the live webcast, slides or replay, visit:
https://www.webcaster4.com/Webcast/Page/2209/33080

•  Toll Free 877-481-4010, International 919-882-
2331, Passcode: 58853

•  Meet management at Rick’s Cabaret New York,
Manhattan’s No. 1 gentlemen’s club, and tour its
sister club, Hoops Cabaret and Sports Bar, next
door

•  Where: Rick’s Cabaret New York, at 50 W. 33rd
Street, New York, NY, between Fifth Avenue and
Broadway

•  RSVP: With your contact information, to
gary.fishman@anreder.com

 

CEO Comment

«With a solid performance in the fourth quarter, total revenues for the year increased 9.2%, to a record $181.1 million, and free cash flow increased 43.3%, to a record $33.3 million,» said Eric Langan, President & CEO. «We had FY 2017 and FY 2018 reaudited in conjunction with the FY 2019 audit, where our auditors issued an unqualified opinion on those financial statements. Utilizing our strong cash generating power, we also reduced shares outstanding another 1% in FY19. Now that the year-end audit is complete, we are preparing our 1Q20 10-Q for filing later this month.

«We’re looking forward to a strong FY20. Total club and restaurant sales were up 10% in 1Q20. Nightclubs experienced added business from the big mixed-martial arts fight in January and the pro football championship in February. We expect the rebound in Bombshells same-store sales and margins to continue. New locations, including the most recently opened unit in Houston, are doing well.

«We have approximately $6.7 million in excess property sales under contract, and we expect to continue to generate strong free cash flow, which we’ll deploy for the optimal return according to our capital allocation strategy.»

4Q19 & FY19 REVIEW (All comparisons to year ago periods unless otherwise noted)

Revenues

  • 4Q19: Total revenues of $45.2 million increased 11.1%. By revenue line, growth reflected increases of $2.5 million (+15.3%) in alcoholic beverages, $1.1 million (+20.4%) in food, $680K (+4.3%) in service, and $210K (+6.8%) in other, which includes Drink Robust business and Gentlemen’s Club Expo trade show in August.
  • FY19: Total revenues of $181.1 million increased 9.2%. By revenue line, growth reflected increases of $6.0 million (+8.7%) in alcoholic beverages, $4.0 million (+6.2%) in service, $3.4 million (+15.1%) in food, and $1.9 million (+19.3%) in other.

Operating Income

  • 4Q19: Operating income more than tripled, to $2.4 million. Margin expanded to 5.4% of revenues from 1.7%. Other charges declined 23.3% to $4.9 million due to gains on insurance and property sales, and all other costs and expenses increased 158 basis points greater than sales growth due to higher accounting and related legal costs. On a non-GAAP basis, operating income increased 4.3% to $7.4 million, with a margin at 16.5% of revenues compared to 17.6%.
  • FY19: Operating income increased 25.9% to $34.7 million as margin expanded to 19.2% of revenues from 16.6%. Other charges declined $6.6 million due to gains on sale of business and assets compared to losses, and from lower legal settlements. All other costs and expenses increased 156 basis points greater than sales growth due to higher accounting and related legal costs. On a non-GAAP basis, operating income increased 2.6% to $37.9 million, with a margin of 21.0% compared to 22.3%.

Other Charges

  • 4Q19: Other charges, net of $4.9 million primarily reflected: (i) two impairments in Fort Worth ($3.6 million of Cabaret East’s building and land, and $1.1 million of Rick’s Cabaret goodwill), (ii) two gains ($747K from insurance covering costs earlier in FY19 to repair two clubs) and from the sale of excess property ($1.6 million proceeds and $677K gain); and (iii) miscellaneous smaller impairments, gains and losses related to 9 other assets.
  • FY19: Other charges, net of $2.6 million reflected: (i) $2.9 million in gains primarily from the sale of eight excess properties in Texas and (ii) 4Q19 items mentioned above.

Nightclubs Segment

  • 4Q19: Sales increased 5.3% to $35.9 million, with 37 units in both periods. Sales growth reflected larger new locations (Rick’s Chicago and Pittsburgh) more than offsetting smaller closed locations. Operating income increased 7.5% to $6.2 million. Margin expanded to 17.3% of sales from 17.0%. The increase in segment profit and profitability was due to improved revenues and lower other charges. On a non-GAAP basis, operating income increased 1.9% to $11.0 million, with a margin of 30.6% of sales compared to 31.6%.
  • FY19: Sales increased 6.1% to $148.6 million. Operating income increased 16.3% to $50.7 million. Margin expanded to 34.1% of sales from 31.1%. The increase in segment profit and profitability reflected improved revenues and margins and lower other charges. On a non-GAAP basis, operating income increased 8.5% to $53.3 million, with a margin of 35.9% of sales compared to 35.1%.

Bombshells Segment

  • 4Q19: Sales increased 53.9% to $8.5 million, with 8 units compared to 6. Sales from new locations (Pearland, I-10 and Tomball) increased 194.4%. Comparable same-store sales increased 19.4%. Operating income improved $2.0 million, to $764K (9.0% of sales) from a loss of $1.2 million (-21.8% of sales). 4Q18 included $1.4 million in other charges, net. On a non-GAAP basis, operating income quadrupled to $790K, with margin at 9.3% of sales compared to 3.3%.
  • FY19: Sales increased 27.9% to $30.8 million. Sales from new locations increased 201.9%, which more than offset a 6.1% decline in same-store sales in FY19. Operating income increased 13.1% to $2.3 million, with margin at 7.5% of sales compared to 8.5%. On a non-GAAP basis, operating income was $2.3 million (7.6% of sales) compared to $3.6 million (15.1%).
  • Non-GAAP operating income included pre-opening costs without the benefit of revenues related to the four new Bombshells over the course of FY19. These costs ended in late January 2020 with the recent opening of the fourth of these new Bombshells on US 59 in Houston.

Other Metrics

  • Cash and cash equivalents of $14.1 million at September 30, 2019 increased 28.7% from June 30, 2019 and declined 20.5% from September 30, 2018. 4Q18 balances benefitted from funds borrowed in advance to fund club acquisitions in 1Q19.
  • Long-term debt of $143.5 million at September 30, 2019 fell 2.1% from June 30, 2019 and increased 2.1% from September 30, 2018.
  • Occupancy costs (rent and interest expense as a percentage of total revenues) fell to 7.6% from 7.8%, 4Q19 vs. 4Q18, and increased to 7.8% from 7.7%, FY19 vs. FY18.
  • Adjusted EBITDA increased 7.3% to $9.6 million, 4Q19 vs. 4Q18, and 4.2% to $46.2 million, FY19 vs. FY18.
  • Effective Tax Rate for FY19 was an expense of 20.1% compared to a FY18 benefit of 17.5%, which included the benefit of $8.8 million as a final calculation of the reduction of deferred tax liability because of the new Tax Cuts and Jobs Act. The FY18 ETR resulted in a 4Q18 income tax increase to adjust for the year. On a non-GAAP basis, FY18 ETR was an expense of 24.5%, which resulted in a 4Q18 income tax reduction to adjust for the year.

*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, and (f) gains or losses on settlement of patron tax case. 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 shareholders and diluted earnings per share. Adjustment items are: (a) amortization of intangibles, (b) impairment of assets, (c) costs and charges related to debt refinancing, (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) settlement of lawsuits, (h) gains or losses on settlement of patron tax case, and (i) 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 20.1%, 24.5% and 37.0% effective tax rate of the pre-tax non-GAAP income before taxes for 2019, 2018 and 2017, 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. The calculated amount for adjustment (i) above in fiscal 2018 was significantly affected by the change in the statutory federal corporate tax rate caused by the Tax Act.
  • Adjusted EBITDA. We calculate adjusted EBITDA by excluding the following items from net income attributable to RCIHH common shareholders: (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) gains or losses on settlement of patron tax case. 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.

Notes

  • Unit counts above are at period end.
  • All references to the «company,» «we,» «our,» and similar terms include RCI Hospitality Holdings, Inc. and its subsidiaries, unless the context indicates otherwise.
  • Planned opening dates are subject to change due to weather, which could affect construction schedules, and scheduling of final municipal inspections.

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) our ability to regain and maintain compliance with the filing requirements of the SEC and the Nasdaq Stock Market, and (vii) numerous other factors such as laws governing the operation of adult entertainment businesses, competition and dependence on key personnel. 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 and percentage data)

For the Three Months Ended September 30,

For the Twelve Months Ended September 30,

2019

2018

2019

2018

Amount

% of
Revenue

Amount

% of
Revenue

Amount

% of
Revenue

Amount

% of
Revenue

Revenues

Sales of alcoholic beverages

$  18,774

41.6%

$  16,285

40.0%

$  75,140

41.5%

$  69,120

41.7%

Sales of food and merchandise

6,655

14.7%

5,527

13.6%

25,830

14.3%

22,433

13.5%

Service revenues

16,446

36.4%

15,766

38.8%

68,055

37.6%

64,104

38.7%

Other

3,308

7.3%

3,098

7.6%

12,034

6.6%

10,091

6.1%

Total revenues

45,183

100.0%

40,676

100.0%

181,059

100.0%

165,748

100.0%

Operating expenses

Cost of goods sold

Alcoholic beverages sold

3,762

20.0%

3,351

20.6%

15,303

20.4%

14,327

20.7%

Food and merchandise sold

2,199

33.0%

1,935

35.0%

9,056

35.1%

8,133

36.3%

Service and other

271

1.4%

276

1.5%

578

0.7%

449

0.6%

Total cost of goods sold (exclusive of items shown below)

6,232

13.8%

5,562

13.7%

24,937

13.8%

22,909

13.8%

Salaries and wages

12,665

28.0%

11,461

28.2%

49,833

27.5%

44,547

26.9%

Selling, general and administrative

16,633

36.8%

14,688

36.1%

59,896

33.1%

53,824

32.5%

Depreciation and amortization

2,354

5.2%

1,916

4.7%

9,072

5.0%

7,722

4.7%

Other charges, net

4,870

10.8%

6,350

15.6%

2,620

1.4%

9,184

5.5%

Total operating expenses

42,754

94.6%

39,977

98.3%

146,358

80.8%

138,186

83.4%

Income from operations

2,429

5.4%

699

1.7%

34,701

19.2%

27,562

16.6%

Other income (expenses)

Interest expense

(2,500)

-5.5%

(2,461)

-6.1%

(10,209)

-5.6%

(9,954)

-6.0%

Interest income

91

0.2%

47

0.1%

309

0.2%

234

0.1%

Non-operating loss

(204)

-0.5%

0.0%

(612)

-0.3%

0.0%

Income before income taxes

(184)

-0.4%

(1,715)

-4.2%

24,189

13.4%

17,842

10.8%

Income tax expense (benefit)

(684)

-1.5%

1,781

4.4%

4,863

2.7%

(3,118)

-1.9%

Net income (loss)

500

1.1%

(3,496)

-8.6%

19,326

10.7%

20,960

12.6%

Net income attributable to noncontrolling interests

(42)

-0.1%

(10)

0.0%

(151)

-0.1%

(81)

0.0%

Net income (loss) attributable to RCIHH common shareholders

$        458

1.0%

$  (3,506)

-8.6%

$  19,175

10.6%

$  20,879

12.6%

Earnings (loss) per share

Basic and diluted

$      0.05

$    (0.36)

$      1.99

$      2.15

Weighted average shares outstanding

Basic and diluted

9,616

9,719

9,657

9,719

Dividends per share

$      0.04

$      0.03

$      0.13

$      0.12

 

RCI HOSPITALITY HOLDINGS, INC.

NON-GAAP FINANCIAL MEASURES

(in thousands, except per share and percentage data)

For the Three Months

For the Twelve Months

Ended September 30,

Ended September 30,

2019

2018

2019

2018

Reconciliation of GAAP net income (loss) to Adjusted EBITDA

Net income (loss) attributable to RCIHH common shareholders

$     458

$ (3,506)

$  19,175

$  20,879

Income tax expense (benefit)

(684)

1,781

4,863

(3,118)

Interest expense, net

2,409

2,414

9,900

9,720

Settlement of lawsuits

81

395

225

1,669

Impairment of assets

6,040

4,020

6,040

5,570

Loss (gain) on sale of businesses and assets

(390)

1,935

(2,877)

1,965

Unrealized loss on equity securities

204

612

Gain on insurance

(861)

(768)

(20)

Depreciation and amortization

2,354

1,916

9,072

7,722

Adjusted EBITDA

$  9,611

$   8,955

$  46,242

$  44,387

Reconciliation of GAAP net income (loss) to non-GAAP net income

Net income (loss) attributable to RCIHH common shareholders

$     458

$ (3,506)

$  19,175

$  20,879

Amortization of intangibles

150

93

624

254

Settlement of lawsuits

81

395

225

1,669

Impairment of assets

6,040

4,020

6,040

5,570

Loss (gain) on sale of businesses and assets

(390)

1,935

(2,877)

1,965

Unrealized loss on equity securities

204

612

Gain on insurance

(861)

(768)

(20)

Costs and charges related to debt refinancing

827

Net income tax effect of adjustments above

(1,071)

1,092

(744)

(9,984)

Non-GAAP net income

$  4,611

$   4,029

$  22,287

$  21,160

Reconciliation of GAAP diluted earnings (loss) per share to non-GAAP diluted earnings per share

Diluted shares

9,616

9,719

9,657

9,719

GAAP diluted earnings (loss) per share

$    0.05

$   (0.36)

$      1.99

$      2.15

Amortization of intangibles

0.02

0.01

0.06

0.03

Settlement of lawsuits

0.01

0.04

0.02

0.17

Impairment of assets

0.63

0.41

0.63

0.57

Loss (gain) on sale of businesses and assets

(0.04)

0.20

(0.30)

0.20

Unrealized loss on equity securities

0.02

0.06

Gain on insurance

(0.09)

(0.08)

(0.00)

Costs and charges related to debt refinancing

0.09

Net income tax effect of adjustments above

(0.11)

0.11

(0.08)

(1.02)

Non-GAAP diluted earnings per share

$    0.48

$      0.41

$      2.31

$      2.18

Reconciliation of GAAP operating income to non-GAAP operating income

Income from operations

$  2,429

$       699

$  34,701

$  27,562

Amortization of intangibles

150

93

624

254

Settlement of lawsuits

81

395

225

1,669

Impairment of assets

6,040

4,020

6,040

5,570

Loss (gain) on sale of businesses and assets

(390)

1,935

(2,877)

1,965

Gain on insurance

(861)

(768)

(20)

Non-GAAP operating income

$  7,449

$   7,142

$  37,945

$  37,000

Reconciliation of GAAP operating margin to non-GAAP operating margin

GAAP operating margin

5.4%

1.7%

19.2%

16.6%

Amortization of intangibles

0.3%

0.2%

0.3%

0.2%

Settlement of lawsuits

0.2%

1.0%

0.1%

1.0%

Impairment of assets

13.4%

9.9%

3.3%

3.4%

Loss (gain) on sale of businesses and assets

-0.9%

4.8%

-1.6%

1.2%

Gain on insurance

-1.9%

0.0%

-0.4%

0.0%

Non-GAAP operating margin

16.5%

17.6%

21.0%

22.3%

Reconciliation of net cash provided by operating activities to free cash flow

Net cash provided by operating activities

$  8,760

$   3,358

$  37,174

$  25,769

Less: Maintenance capital expenditures

1,786

680

3,858

2,527

Free cash flow

$  6,974

$   2,678

$  33,316

$  23,242

 

RCI HOSPITALITY HOLDINGS, INC.

SEGMENT INFORMATION

(in thousands)

For the Three Months

For the Twelve Months

Ended September 30,

Ended September 30,

2019

2018

2019

2018

Revenues

Nightclubs

$  35,942

$  34,146

$  148,606

$  140,060

Bombshells

8,533

5,544

30,828

24,094

Other

708

986

1,625

1,594

$  45,183

$  40,676

$  181,059

$  165,748

Income (loss) from operations

Nightclubs

$    6,225

$    5,789

$    50,724

$    43,624

Bombshells

764

(1,207)

2,307

2,040

Other

97

295

(309)

(252)

General corporate

(4,657)

(4,178)

(18,021)

(17,850)

$    2,429

$        699

$    34,701

$    27,562

 

RCI HOSPITALITY HOLDINGS, INC.

NON-GAAP SEGMENT INFORMATION

($ in thousands)

For the Three Months Ended September 30, 2019

For the Three Months Ended September 30, 2018

Nightclubs

Bombshells

Other

Corporate

Total

Nightclubs

Bombshells

Other

Corporate

Total

Income (loss) from operations

$    6,225

$        764

$      97

$   (4,657)

$    2,429

$    5,789

$  (1,207)

$   295

$   (4,178)

$        699

Amortization of intangibles

150

150

93

93

Settlement of lawsuits

40

41

81

366

29

395

Impairment of assets

5,920

120

6,040

4,447

1,123

5,570

Loss (gain) on sale of businesses and assets

(446)

26

30

(390)

188

267

(63)

(7)

385

Gain on insurance

(747)

(114)

(861)

Non-GAAP operating income (loss)

$  10,992

$        790

$      97

$   (4,430)

$    7,449

$  10,790

$        183

$   232

$   (4,063)

$    7,142

GAAP operating margin

17.3%

9.0%

13.7%

-10.3%

5.4%

17.0%

-21.8%

29.9%

-10.3%

1.7%

Non-GAAP operating margin

30.6%

9.3%

13.7%

-9.8%

16.5%

31.6%

3.3%

23.5%

-10.0%

17.6%

For the Twelve Months Ended September 30, 2019

For the Twelve Months Ended September 30, 2018

Nightclubs

Bombshells

Other

Corporate

Total

Nightclubs

Bombshells

Other

Corporate

Total

Income (loss) from operations

$  50,724

$    2,307

$ (309)

$ (18,021)

$  34,701

$  43,624

$    2,040

$ (252)

$ (17,850)

$  27,562

Amortization of intangibles

624

624

254

254

Settlement of lawsuits

169

3

53

225

1,440

200

29

1,669

Impairment of assets

5,920

120

6,040

4,447

1,123

5,570

Loss (gain) on sale of businesses and assets

(2,858)

27

(46)

(2,877)

(400)

267

2,098

1,965

Gain on insurance

(654)

(114)

(768)

(20)

(20)

Non-GAAP operating income (loss)

$  53,301

$    2,337

$ (309)

$ (17,384)

$  37,945

$  49,111

$    3,630

$ (252)

$ (15,489)

$  37,000

GAAP operating margin

34.1%

7.5%

-19.0%

-10.0%

19.2%

31.1%

8.5%

-15.8%

-10.8%

16.6%

Non-GAAP operating margin

35.9%

7.6%

-19.0%

-9.6%

21.0%

35.1%

15.1%

-15.8%

-9.3%

22.3%

 

RCI HOSPITALITY HOLDINGS, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

(in thousands)

For the Three Months Ended

For the Twelve Months Ended

September 30, 2019

September 30, 2018

September 30, 2019

September 30, 2018

CASH FLOWS FROM OPERATING ACTIVITIES

Net income (loss)

$                      500

$                (3,496)

$                19,326

$                20,960

Adjustments to reconcile net income (loss) to net cash provided by operating activities:

Depreciation and amortization

2,354

1,916

9,072

7,722

Deferred tax expense (credit)

(416)

2,884

821

(6,775)

Loss (gain) on sale of businesses and assets

(262)

2,092

(2,966)

2,162

Unrealized loss on equity securities

204

612

Amortization of debt discount and issuance costs

58

91

334

560

Deferred rent expense (credit)

46

(21)

282

203

Impairment of assets

6,040

4,020

6,040

5,570

Gain on insurance settlements

(381)

(288)

(20)

Debt prepayment penalty

543

Changes in operating assets and liabilities:

Accounts receivable

(729)

(1,834)

1,576

(3,622)

Inventories

(129)

58

(216)

(199)

Prepaid expenses, other current assets and other assets

(4,880)

(3,853)

(681)

(2,589)

Accounts payable and accrued liabilities

6,355

1,501

3,262

1,254

Net cash provided by operating activities

8,760

3,358

37,174

25,769

CASH FLOWS FROM INVESTING ACTIVITIES

Proceeds from sale of businesses and assets

2,117

182

7,223

811

Proceeds from insurance

100

100

20

Proceeds from notes receivable

51

29

158

127

Issuance of notes receivable

(420)

Additions to property and equipment

(3,807)

(6,436)

(20,708)

(25,263)

Acquisition of businesses, net of cash acquired

(1,550)

(13,500)

(2,034)

Net cash used in investing activities

(1,539)

(7,775)

(27,147)

(26,339)

CASH FLOWS FROM FINANCING ACTIVITIES

Proceeds from long-term debt

1,181

11,846

13,511

84,233

Payments on long-term debt

(4,290)

(2,386)

(22,924)

(72,830)

Debt prepayment penalty

(543)

Purchase of treasury stock

(537)

(2,901)

Payment of dividends

(385)

(292)

(1,252)

(1,168)

Payment of loan origination costs

(178)

(20)

(1,138)

Distribution to noncontrolling interests

(49)

(18)

(70)

(180)

Net cash provided by (used in) financing activities

(4,080)

8,972

(13,656)

8,374

NET INCREASE (DECREASE) IN CASH AND CASH

EQUIVALENTS

3,141

4,555

(3,629)

7,804

CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD

10,956

13,171

17,726

9,922

CASH AND CASH EQUIVALENTS AT END OF PERIOD

$                14,097

$                17,726

$                14,097

$                17,726

 

RCI HOSPITALITY HOLDINGS, INC.

CONSOLIDATED BALANCE SHEETS

(in thousands)

September 30,

June 30,

September 30,

2019

2019

2018

ASSETS

Current assets

Cash and cash equivalents

$       14,097

$    10,956

$       17,726

Accounts receivable, net

6,289

5,001

7,320

Current portion of notes receivable

954

1,152

Inventories

2,598

2,502

2,353

Prepaid insurance

5,446

896

4,910

Other current assets

2,521

2,090

1,591

Assets held for sale

2,866

2,902

Total current assets

34,771

22,597

36,802

Property and equipment, net

183,956

191,493

172,403

Notes receivable, net of current portion

4,211

3,810

2,874

Goodwill

53,630

55,271

43,591

Intangibles, net

75,951

76,285

71,532

Other assets

1,118

1,422

2,530

Total assets

$     353,637

$  350,878

$     329,732

LIABILITIES AND STOCKHOLDERS’ EQUITY

Current liabilities

Accounts payable

$         3,810

$      2,544

$         2,825

Accrued liabilities

14,644

9,117

11,973

Current portion of long-term debt

15,754

16,374

19,047

Total current liabilities

34,208

28,035

33,845

Deferred tax liability, net

21,658

22,076

19,552

Long-term debt, net of current portion

127,774

130,205

121,580

Other long-term liabilities

1,696

1,656

1,423

Total liabilities

185,336

181,972

176,400

Commitments and contingencies

Stockholders’ equity

Preferred stock

Common stock

96

96

97

Additional paid-in capital

61,312

61,849

64,212

Retained earnings

107,049

106,976

88,906

Accumulated other comprehensive income

220

Total RCIHH stockholders’ equity

168,457

168,921

153,435

Noncontrolling interests

(156)

(15)

(103)

Total stockholders’ equity

168,301

168,906

153,332

Total liabilities and stockholders’ equity

$     353,637

$  350,878

$     329,732

 

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SOURCE RCI Hospitality Holdings, Inc.