RCI Reports Preliminary 3Q19 Financial Results
HOUSTON, Aug. 9, 2019 /PRNewswire/ -- RCI Hospitality Holdings, Inc. (Nasdaq: RICK) today reported preliminary unaudited financial results for the Fiscal 2019 third quarter ended June 30, 2019.
The preliminary financial information presented in this news release has not been reviewed by an independent registered public accounting firm. See "Financial Information Is Preliminary and Subject to Change" below. All comparisons in this news release are to year-ago periods, unless otherwise noted.
RCI noted it will file a Form 12b-25 with the Securities and Exchange Commission today reporting that it will not be able to timely file its Form 10-Q for the FY19 third quarter ended June 30, 2019 as it is still in the process of selecting a new independent registered public accounting firm.
3Q19 vs. 3Q18
- Diluted EPS of $0.59 compared to $0.55
- Diluted non-GAAP* EPS of $0.59 compared to $0.58
- 3Q19 GAAP included net pre-tax gains of $172K vs. net pre-tax charges of $440K in 3Q18
- Total revenues of $47.0 million compared to $42.6 million on 46 and 44 units, respectively
- Repurchased 17,302 shares in April 2019 for $0.4 million ($23.36 average per share)
- Free cash flow for the first nine months of FY19 ended June 30, 2019 totaled $26.3 million based on net cash provided by operating activities of $28.4 million, less maintenance capital expenditures of $2.1 million.
CEO Comment
"Third quarter total revenues grew 10.3% primarily due to our Nightclubs and Bombshells segments, operating income increased 5.1%, and EPS totaled $0.59," said Eric Langan, President and CEO. "Nightclubs revenues benefitted from our solid club lineup and Bombshells from the strong performance of new locations. In July, Bombshells same-store sales were up year-over-year for the second month in a row."
"We continued to achieve progress with part of our Bombshells development strategy through the sale of a second excess parcel for a gain of more than 40% of cost. We also continued the liquidation of other non-income producing assets. During and subsequent to the quarter, this resulted in cash proceeds of $2.5 million and the pay down of $2.2 million in related debt. We hope to conclude the sale or lease of remaining non-income-producing properties by year-end FY19 or early FY20."
"3Q19 free cash flow totaled $6.5 million, enabling us to generate FCF of $26.3 million for the first nine months of FY19, hitting our initial FY19 FCF run rate. Adjusted EBITDA increased 2.6% to $12.2 million. Looking at the June 30, 2019 balance sheet compared to March 31, 2019, cash increased $2.7 million to $11.0 million, long-term debt fell $3.2 million, and total stockholder's equity reached $168.9 million."
3Q19 Review
- Total Revenues: Total revenues of $47.0 million grew $4.4 million with increases of $1.9 million (+10.8%) in alcoholic beverages, $983K (+6.0%) in service, $871K (+14.1%) in food, and $627K (+25.2%) in other. Revenues increased primarily due to the addition of Rick's Cabarets in Chicago and Pittsburgh in Nightclubs and two new Bombshells (I-10 and 249).
- Operating Income: Operating income of $10.0 million (21.2% of revenues) increased $482K from $9.5 million (22.3%). Non-GAAP operating income of $10.0 million was level in dollars compared to 3Q18, with margin of 21.2% compared to 23.4%. This primarily reflected greater contribution from Nightclubs offset by reduced contribution from Bombshells and higher corporate overhead due to legal fees associated with the previously-announced inquiry.
- Nightclubs Segment: Revenues of $37.9 million increased $2.6 million or 7.5%, with 38 units in both periods. Operating income increased 11.5% to $14.0 million (37.0% of revenues) from $12.6 million (35.7%). On a non-GAAP basis, segment income increased 11.2% to $13.9 million from $12.5 million with margin expanding to 36.6% from 35.4%.
- Bombshells Segment: Revenues of $8.8 million increased $1.6 million or 23.0%, with 8 units compared to 6. Operating income was $686K (7.8% of revenues) compared to $1.4 million (19.5%). This reflected reduced operating leverage due to the previously reported decline in same-store sales as well as expenses without the benefit of corresponding revenues from two locations expected to open in 4Q19. While down from 3Q18, same-store sales continued their sequential quarterly improvement in FY19.
- Interest & Taxes: Interest expense of $2.5 million (5.4% of revenues) increased $235K from $2.3 million (5.4%) due to higher debt related to the Pittsburgh and Chicago club acquisitions and new debt on acquired real estate for Bombshells development, and a lower weighted average interest rate. Income tax expense was level with 3Q18 as the effective tax rate fell to 24.1% from 25.3% with the full effect in FY19 of the federal Tax Cuts and Jobs Act.
- Asset Management: There were two real estate sales: (i) a portion of excess land around newly opened Bombshells I-10 in Houston sold for $1.1 million cash and a $331K pre-tax gain after closing costs with proceeds used in part to pay down $942K in debt on the entire Bombshells I-10 property; and (ii) a small property in Lubbock, TX sold for $350K cash and a $376K loss after closing costs with proceeds used in part to pay down $331K remaining debt on the property. During and subsequent to 3Q19, both excess aircraft were sold for a total of $1.1 million in cash and a small gain after closing costs with proceeds used to pay down $883K in remaining debt on the assets. Also during 3Q19, both the former Club Onyx and Foxy's Cabaret locations in Dallas were leased out.
- Balance Sheet Highlights (June 30, 2019 compared to March 31, 2019): Cash and cash equivalents of $11.0 million increased $2.7 million. Total stockholder's equity of $168.9 million increased $5.0 million due to retained earnings. Total debt of $146.6 million declined $3.2 million.
Financial Information Is Preliminary and Subject to Change
The unaudited interim financial information presented in this news release is preliminary and has not been reviewed by an independent registered public accounting firm. When RCI files its Quarterly Report on Form 10-Q for the March 31, 2019 and June 30, 2019 periods, the financial statements for the three and nine months ended June 30, 2019 may differ from the results disclosed in this news release and the differences may be material. The final financial results reported for the three and nine months ended June 30, 2019 may also differ from the results reported in this release as a result of review procedures to be performed by an independent registered public accounting firm.
*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: amortization of intangibles, gains or losses on sale of assets, gain on insurance, and 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 shareholders and diluted earnings per share. Excluded items are: amortization of intangibles, costs and charges related to debt refinancing, income tax expense (benefit), gains or losses on sale of assets, gain on insurance, and settlement of lawsuits. Included item is the non-GAAP provision for current and deferred income taxes, calculated at 22.8% and 26.5% effective tax rate of the pre-tax non-GAAP income before taxes for the nine months ended June 30, 2019 and 2018, respectively. 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 shareholders: depreciation expense, amortization of intangibles, income tax expense (benefit), net interest expense, gains or losses on sale of assets, gain on insurance, and settlement of lawsuits. 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.
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, 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 the risks and uncertainties associated with operating and managing an adult business, the business climates in cities where it operates, the success or lack thereof in launching and building the company's businesses, risks and uncertainties related to cybersecurity, conditions relevant to real estate transactions, and 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 [email protected] and [email protected]
RCI HOSPITALITY HOLDINGS, INC. | |||||||||||||||||||
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF INCOME | |||||||||||||||||||
(in thousands, except per share data) | |||||||||||||||||||
For the Three Months Ended June 30, | For the Nine Months Ended June 30, | ||||||||||||||||||
2019(a) | 2018 | 2019(a) | 2018 | ||||||||||||||||
Amount | % ofRevenue | Amount | % ofRevenue | Amount | % ofRevenue | Amount | % ofRevenue | ||||||||||||
Revenues | |||||||||||||||||||
Sales of alcoholic beverages | $ 19,570 | 41.6% | $ 17,658 | 41.4% | $ 56,366 | 41.5% | $ 52,835 | 42.2% | |||||||||||
Sales of food and merchandise | 7,046 | 15.0% | 6,175 | 14.5% | 19,175 | 14.1% | 16,906 | 13.5% | |||||||||||
Service revenues | 17,299 | 36.8% | 16,316 | 38.3% | 51,609 | 38.0% | 48,338 | 38.6% | |||||||||||
Other | 3,112 | 6.6% | 2,485 | 5.8% | 8,726 | 6.4% | 6,993 | 5.6% | |||||||||||
Total revenues | 47,027 | 100.0% | 42,634 | 100.0% | 135,876 | 100.0% | 125,072 | 100.0% | |||||||||||
Operating expenses | |||||||||||||||||||
Cost of goods sold | |||||||||||||||||||
Alcoholic beverages sold | 4,015 | 20.5% | 3,632 | 20.6% | 11,541 | 20.5% | 10,976 | 20.8% | |||||||||||
Food and merchandise sold | 2,565 | 36.4% | 2,140 | 34.7% | 6,857 | 35.8% | 6,198 | 36.7% | |||||||||||
Service and other | 121 | 0.6% | 94 | 0.5% | 307 | 0.5% | 173 | 0.3% | |||||||||||
Total cost of goods sold (exclusive of items shown below) | 6,701 | 14.2% | 5,866 | 13.8% | 18,705 | 13.8% | 17,347 | 13.9% | |||||||||||
Salaries and wages | 13,164 | 28.0% | 11,362 | 26.7% | 37,168 | 27.4% | 33,086 | 26.5% | |||||||||||
Selling, general and administrative | 14,895 | 31.7% | 13,476 | 31.6% | 43,263 | 31.8% | 39,136 | 31.3% | |||||||||||
Depreciation and amortization | 2,465 | 5.2% | 1,998 | 4.7% | 6,718 | 4.9% | 5,806 | 4.6% | |||||||||||
Other charges (gains), net | (172) | -0.4% | 440 | 1.0% | (2,250) | -1.7% | 2,834 | 2.3% | |||||||||||
Total operating expenses | 37,053 | 78.8% | 33,142 | 77.7% | 103,604 | 76.2% | 98,209 | 78.5% | |||||||||||
Income from operations | 9,974 | 21.2% | 9,492 | 22.3% | 32,272 | 23.8% | 26,863 | 21.5% | |||||||||||
Other income (expenses) | |||||||||||||||||||
Interest expense | (2,543) | -5.4% | (2,308) | -5.4% | (7,709) | -5.7% | (7,493) | -6.0% | |||||||||||
Interest income | 92 | 0.2% | 52 | 0.1% | 218 | 0.2% | 187 | 0.1% | |||||||||||
Non-operating loss | (38) | -0.1% | - | 0.0% | (408) | -0.3% | - | 0.0% | |||||||||||
Income before income taxes | 7,485 | 15.9% | 7,236 | 17.0% | 24,373 | 17.9% | 19,557 | 15.6% | |||||||||||
Income tax expense (benefit) | 1,806 | 3.8% | 1,829 | 4.3% | 5,547 | 4.1% | (4,899) | -3.9% | |||||||||||
Net income | 5,679 | 12.1% | 5,407 | 12.7% | 18,826 | 13.9% | 24,456 | 19.6% | |||||||||||
Net income attributable to noncontrolling interests | (41) | -0.1% | (18) | 0.0% | (109) | -0.1% | (71) | -0.1% | |||||||||||
Net income attributable to RCIHH common shareholders | $ 5,638 | 12.0% | $ 5,389 | 12.6% | $ 18,717 | 13.8% | $ 24,385 | 19.5% | |||||||||||
Earnings per share | |||||||||||||||||||
Basic and diluted | $ 0.59 | $ 0.55 | $ 1.94 | $ 2.51 | |||||||||||||||
Weighted average shares outstanding | |||||||||||||||||||
Basic and diluted | 9,620 | 9,719 | 9,671 | 9,719 | |||||||||||||||
Dividends per share | $ 0.03 | $ 0.03 | $ 0.09 | $ 0.09 | |||||||||||||||
(a) | The unaudited condensed consolidated Statements of Income for the three and nine months ended June 30, 2019 are preliminary and therefore subject to adjustments in connection with subsequent events arising through the date of the company's filing of its Quarterly Report on Form 10-Q. The filing of the Form 10-Q will be completed as soon as practicable after the appointment of an independent registered public accounting firm and the completion of review procedures by such firm. The final financial results reported for these periods may differ from the results reported in this release as a result of review procedures to be performed by an independent registered public accounting firm. |
RCI HOSPITALITY HOLDINGS, INC. | ||||||||
NON-GAAP FINANCIAL MEASURES | ||||||||
(in thousands, except per share and percentage data) | ||||||||
For the Three Months | For the Nine Months | |||||||
Ended June 30, | Ended June 30, | |||||||
2019(a) | 2018 | 2019(a) | 2018 | |||||
Reconciliation of GAAP net income to Adjusted EBITDA | ||||||||
Net income attributable to RCIHH common shareholders | $ 5,638 | $ 5,389 | $ 18,717 | $ 24,385 | ||||
Income tax expense (benefit) | 1,806 | 1,829 | 5,547 | (4,899) | ||||
Interest expense, net | 2,451 | 2,256 | 7,491 | 7,306 | ||||
Settlement of lawsuits | - | 474 | 144 | 1,274 | ||||
Impairment of assets | - | - | - | 1,550 | ||||
Loss (gain) on sale of assets | (265) | (34) | (2,487) | 30 | ||||
Unrealized loss (gain) on equity securities | 38 | - | 408 | - | ||||
Loss (gain) on insurance | 93 | - | 93 | (20) | ||||
Depreciation and amortization | 2,465 | 1,998 | 6,718 | 5,806 | ||||
Adjusted EBITDA | $ 12,226 | $ 11,912 | $ 36,631 | $ 35,432 | ||||
Reconciliation of GAAP net income to non-GAAP net income | ||||||||
Net income attributable to RCIHH common shareholders | $ 5,638 | $ 5,389 | $ 18,717 | $ 24,385 | ||||
Amortization of intangibles | 165 | 65 | 474 | 161 | ||||
Settlement of lawsuits | - | 474 | 144 | 1,274 | ||||
Impairment of assets | - | - | - | 1,550 | ||||
Loss (gain) on sale of assets | (265) | (34) | (2,487) | 30 | ||||
Unrealized loss (gain) on equity securities | 38 | - | 408 | - | ||||
Loss (gain) on insurance | 93 | - | 93 | (20) | ||||
Costs and charges related to debt refinancing | - | - | - | 827 | ||||
Income tax effect of adjustments above | (6) | (218) | 327 | (11,076) | ||||
Non-GAAP net income | $ 5,663 | $ 5,676 | $ 17,676 | $ 17,131 | ||||
Reconciliation of GAAP diluted earnings per share to non-GAAP diluted earnings per share | ||||||||
Diluted shares | 9,620 | 9,719 | 9,671 | 9,719 | ||||
GAAP diluted earnings per share | $ 0.59 | $ 0.55 | $ 1.94 | $ 2.51 | ||||
Amortization of intangibles | 0.02 | 0.01 | 0.05 | 0.02 | ||||
Settlement of lawsuits | - | 0.05 | 0.01 | 0.13 | ||||
Impairment of assets | - | - | - | 0.16 | ||||
Loss (gain) on sale of assets | (0.03) | (0.00) | (0.26) | 0.00 | ||||
Unrealized loss (gain) on equity securities | 0.00 | - | 0.04 | - | ||||
Loss (gain) on insurance | 0.01 | - | 0.01 | (0.00) | ||||
Costs and charges related to debt refinancing | - | - | - | 0.09 | ||||
Income tax effect of adjustments above | (0.00) | (0.02) | 0.03 | (1.14) | ||||
Non-GAAP diluted earnings per share | $ 0.59 | $ 0.58 | $ 1.83 | $ 1.76 | ||||
Reconciliation of GAAP operating income to non-GAAP operating income | ||||||||
Income from operations | $ 9,974 | $ 9,492 | $ 32,272 | $ 26,863 | ||||
Amortization of intangibles | 165 | 65 | 474 | 161 | ||||
Settlement of lawsuits | - | 474 | 144 | 1,274 | ||||
Impairment of assets | - | - | - | 1,550 | ||||
Loss (gain) on sale of assets | (265) | (34) | (2,487) | 30 | ||||
Loss (gain) on insurance | 93 | - | 93 | (20) | ||||
Non-GAAP operating income | $ 9,967 | $ 9,997 | $ 30,496 | $ 29,858 | ||||
Reconciliation of GAAP operating margin to non-GAAP operating margin | ||||||||
GAAP operating margin | 21.2% | 22.3% | 23.8% | 21.5% | ||||
Amortization of intangibles | 0.4% | 0.2% | 0.3% | 0.1% | ||||
Settlement of lawsuits | 0.0% | 1.1% | 0.1% | 1.0% | ||||
Impairment of assets | 0.0% | 0.0% | 0.0% | 1.2% | ||||
Loss (gain) on sale of assets | -0.6% | -0.1% | -1.8% | 0.0% | ||||
Loss (gain) on insurance | 0.2% | 0.0% | 0.1% | 0.0% | ||||
Non-GAAP operating margin | 21.2% | 23.4% | 22.4% | 23.9% | ||||
Reconciliation of GAAP net cash provided by operating activities to non-GAAP free cash flow | ||||||||
Net cash provided by operating activities | $ 7,443 | $ 8,334 | $ 28,414 | $ 22,411 | ||||
Less: Maintenance capital expenditures | 955 | 585 | 2,072 | 1,847 | ||||
Free cash flow | $ 6,488 | $ 7,749 | $ 26,342 | $ 20,564 | ||||
(a) | The condensed consolidated schedule of Non-GAAP Financial Measures for the three and nine months ended June 30, 2019 are preliminary and therefore subject to adjustments in connection with subsequent events arising through the date of the company's filing of its Quarterly Report on Form 10-Q. The filing of the Form 10-Q will be completed as soon as practicable after the appointment of an independent registered public accounting firm and the completion of review procedures by such firm. The final financial results reported for these periods may differ from the results reported in this release as a result of review procedures to be performed by an independent registered public accounting firm. |
RCI HOSPITALITY HOLDINGS, INC. | |||||||||
UNAUDITED SEGMENT INFORMATION | |||||||||
(in thousands) | |||||||||
For the Three Months | For the Nine Months | ||||||||
Ended June 30, | Ended June 30, | ||||||||
2019(a) | 2018 | 2019(a) | 2018 | ||||||
Revenues | |||||||||
Nightclubs | $ 37,889 | $ 35,253 | $ 112,664 | $ 105,914 | |||||
Bombshells | 8,755 | 7,120 | 22,295 | 18,550 | |||||
Other | 383 | 261 | 917 | 608 | |||||
$ 47,027 | $ 42,634 | $ 135,876 | $ 125,072 | ||||||
Income (loss) from operations | |||||||||
Nightclubs | $ 14,034 | $ 12,584 | $ 44,499 | $ 37,835 | |||||
Bombshells | 686 | 1,391 | 1,543 | 3,247 | |||||
Other | (111) | (328) | (406) | (547) | |||||
General corporate | (4,635) | (4,155) | (13,364) | (13,672) | |||||
$ 9,974 | $ 9,492 | $ 32,272 | $ 26,863 | ||||||
(a) | The unaudited schedule of Segment Information for the three and nine months ended June 30, 2019 are preliminary and therefore subject to adjustments in connection with subsequent events arising through the date of the company's filing of its Quarterly Report on Form 10-Q. The filing of the Form 10-Q will be completed as soon as practicable after the appointment of an independent registered public accounting firm and the completion of review procedures by such firm. The final financial results reported for these periods may differ from the results reported in this release as a result of review procedures to be performed by an independent registered public accounting firm. |
RCI HOSPITALITY HOLDINGS, INC. | ||||||||||||||||||||
NON-GAAP SEGMENT INFORMATION | ||||||||||||||||||||
($ in thousands) | ||||||||||||||||||||
For the Three Months Ended June 30, 2019(a) | For the Three Months Ended June 30, 2018 | |||||||||||||||||||
Nightclubs | Bombshells | Other | Corporate | Total | Nightclubs | Bombshells | Other | Corporate | Total | |||||||||||
Income (loss) from operations | $ 14,034 | $ 686 | $ (111) | $ (4,635) | $ 9,974 | $ 12,584 | $ 1,391 | $ (328) | $ (4,155) | $ 9,492 | ||||||||||
Amortization of intangibles | - | - | - | 165 | 165 | - | - | - | 65 | 65 | ||||||||||
Settlement of lawsuits | - | - | - | - | - | 474 | - | - | - | 474 | ||||||||||
Impairment of assets | - | - | - | - | - | - | - | - | - | - | ||||||||||
Loss (gain) on sale of assets | (260) | - | - | (5) | (265) | (588) | - | 63 | 491 | (34) | ||||||||||
Loss (gain) on insurance | 93 | - | - | - | 93 | - | - | - | - | - | ||||||||||
Non-GAAP operating income (loss) | $ 13,867 | $ 686 | $ (111) | $ (4,475) | $ 9,967 | $ 12,470 | $ 1,391 | $ (265) | $ (3,599) | $ 9,997 | ||||||||||
GAAP operating margin | 37.0% | 7.8% | -29.0% | -9.9% | 21.2% | 35.7% | 19.5% | -125.7% | -9.7% | 22.3% | ||||||||||
Non-GAAP operating margin | 36.6% | 7.8% | -29.0% | -9.5% | 21.2% | 35.4% | 19.5% | -101.5% | -8.4% | 23.4% | ||||||||||
For the Nine Months Ended June 30, 2019(a) | For the Nine Months Ended June 30, 2018 | |||||||||||||||||||
Nightclubs | Bombshells | Other | Corporate | Total | Nightclubs | Bombshells | Other | Corporate | Total | |||||||||||
Income (loss) from operations | $ 44,499 | $ 1,543 | $ (406) | $ (13,364) | $ 32,272 | $ 37,835 | $ 3,247 | $ (547) | $ (13,672) | $ 26,863 | ||||||||||
Amortization of intangibles | - | - | - | 474 | 474 | - | - | - | 161 | 161 | ||||||||||
Settlement of lawsuits | 129 | 3 | - | 12 | 144 | 1,074 | 200 | - | - | 1,274 | ||||||||||
Impairment of assets | - | - | - | - | - | - | - | - | 1,550 | 1,550 | ||||||||||
Loss (gain) on sale of assets | (2,412) | 1 | - | (76) | (2,487) | (588) | - | 63 | 555 | 30 | ||||||||||
Loss (gain) on insurance | 93 | - | - | - | 93 | - | - | - | (20) | (20) | ||||||||||
Non-GAAP operating income (loss) | $ 42,309 | $ 1,547 | $ (406) | $ (12,954) | $ 30,496 | $ 38,321 | $ 3,447 | $ (484) | $ (11,426) | $ 29,858 | ||||||||||
GAAP operating margin | 39.5% | 6.9% | -44.3% | -9.8% | 23.8% | 35.7% | 17.5% | -90.0% | -10.9% | 21.5% | ||||||||||
Non-GAAP operating margin | 37.6% | 6.9% | -44.3% | -9.5% | 22.4% | 36.2% | 18.6% | -79.6% | -9.1% | 23.9% | ||||||||||
(a) | The condensed schedule of Non-GAAP Financial Segment Information for the three and nine months ended June 30, 2019 are preliminary and therefore subject to adjustments in connection with subsequent events arising through the date of the company's filing of its Quarterly Report on Form 10-Q. The filing of the Form 10-Q will be completed as soon as practicable after the appointment of an independent registered public accounting firm and the completion of review procedures by such firm. The final financial results reported for these periods may differ from the results reported in this release as a result of review procedures to be performed by an independent registered public accounting firm. |
RCI HOSPITALITY HOLDINGS, INC. | ||||||||||
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS | ||||||||||
(in thousands) | ||||||||||
For the Three Months Ended | For the Nine Months Ended | |||||||||
June 30, 2019(a) | June 30, 2018 | June 30, 2019(a) | June 30, 2018 | |||||||
CASH FLOWS FROM OPERATING ACTIVITIES | ||||||||||
Net income | $ 5,679 | $ 5,407 | $ 18,826 | $ 24,456 | ||||||
Adjustments to reconcile net income to net cash provided by operating activities: | ||||||||||
Depreciation and amortization | 2,465 | 1,998 | 6,718 | 5,806 | ||||||
Deferred tax expense (credit) | 106 | - | 1,237 | (9,659) | ||||||
Loss (gain) on sale of assets | (507) | (70) | (2,704) | 70 | ||||||
Unrealized loss on equity securities | 38 | - | 408 | - | ||||||
Amortization of debt discount and issuance costs | 74 | 85 | 276 | 469 | ||||||
Deferred rent | 47 | 75 | 236 | 224 | ||||||
Impairment of assets | - | - | - | 1,550 | ||||||
Loss (gain) on insurance settlements | 93 | - | 93 | (20) | ||||||
Debt prepayment penalty | - | - | - | 543 | ||||||
Changes in operating assets and liabilities: | ||||||||||
Accounts receivable | 578 | 245 | 2,305 | (1,788) | ||||||
Inventories | 95 | 26 | (87) | (257) | ||||||
Prepaid expenses and other assets | 649 | 560 | 4,199 | 1,264 | ||||||
Accounts payable and accrued liabilities | (1,874) | 8 | (3,093) | (247) | ||||||
Net cash provided by operating activities | 7,443 | 8,334 | 28,414 | 22,411 | ||||||
CASH FLOWS FROM INVESTING ACTIVITIES | ||||||||||
Proceeds from sale of assets | 2,240 | (3) | 5,106 | 629 | ||||||
Proceeds from insurance | - | - | - | 20 | ||||||
Proceeds from notes receivable | 39 | 30 | 107 | 98 | ||||||
Issuance of note receivable | - | - | (420) | - | ||||||
Additions to property and equipment | (2,999) | (9,816) | (16,901) | (18,827) | ||||||
Acquisition of businesses, net of cash acquired | - | (484) | (13,500) | (484) | ||||||
Net cash used in investing activities | (720) | (10,273) | (25,608) | (18,564) | ||||||
CASH FLOWS FROM FINANCING ACTIVITIES | ||||||||||
Proceeds from long-term debt | 2,034 | 9,934 | 12,330 | 72,387 | ||||||
Payments on long-term debt | (5,347) | (6,926) | (18,634) | (70,444) | ||||||
Debt prepayment penalty | - | - | - | (543) | ||||||
Purchase of treasury stock | (403) | - | (2,364) | - | ||||||
Payment of dividends | (285) | (293) | (867) | (876) | ||||||
Payment of loan origination costs | - | (51) | (20) | (960) | ||||||
Distribution to noncontrolling interests | (21) | (54) | (21) | (162) | ||||||
Net cash provided by (used in) financing activities | (4,022) | 2,610 | (9,576) | (598) | ||||||
NET INCREASE (DECREASE) IN CASH AND CASH | ||||||||||
EQUIVALENTS | 2,701 | 671 | (6,770) | 3,249 | ||||||
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD | 8,255 | 12,500 | 17,726 | 9,922 | ||||||
CASH AND CASH EQUIVALENTS AT END OF PERIOD | $ 10,956 | $ 13,171 | $ 10,956 | $ 13,171 | ||||||
(a) | The unaudited condensed consolidated Statements of Cash Flows for the three and nine months ended June 30, 2019 are preliminary and therefore subject to adjustments in connection with subsequent events arising through the date of the company's filing of its Quarterly Reports on Form 10-Q. The filing of the Form 10-Q will be completed as soon as practicable after the appointment of an independent registered public accounting firm and the completion of review procedures by such firm. The final financial results reported for these periods may differ from the results reported in this release as a result of review procedures to be performed by an independent registered public accounting firm. |
RCI HOSPITALITY HOLDINGS, INC. | |||||||
UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS | |||||||
(in thousands) | |||||||
June 30, | September 30, | ||||||
2019(a) | 2018 | ||||||
ASSETS | |||||||
Current assets | |||||||
Cash and cash equivalents | $ 10,956 | $ 17,726 | |||||
Accounts receivable, net | 5,001 | 7,320 | |||||
Inventories | 2,502 | 2,353 | |||||
Prepaid insurance | 896 | 4,910 | |||||
Other current assets | 2,090 | 1,591 | |||||
Assets held for sale | - | 2,902 | |||||
Total current assets | 21,445 | 36,802 | |||||
Property and equipment, net | 191,493 | 172,403 | |||||
Notes receivable | 4,962 | 2,874 | |||||
Goodwill | 55,271 | 43,591 | |||||
Intangibles, net | 76,285 | 71,532 | |||||
Other assets | 1,422 | 2,530 | |||||
Total assets | $ 350,878 | $ 329,732 | |||||
LIABILITIES AND STOCKHOLDERS' EQUITY | |||||||
Current liabilities | |||||||
Accounts payable | $ 2,544 | $ 2,825 | |||||
Accrued liabilities | 9,117 | 11,973 | |||||
Current portion of long-term debt | 16,374 | 19,047 | |||||
Total current liabilities | 28,035 | 33,845 | |||||
Deferred tax liability, net | 22,076 | 19,552 | |||||
Long-term debt, net of current portion | 130,205 | 121,580 | |||||
Other long-term liabilities | 1,656 | 1,423 | |||||
Total liabilities | 181,972 | 176,400 | |||||
Commitments and contingencies | |||||||
Stockholders' equity | |||||||
Preferred stock | - | - | |||||
Common stock | 96 | 97 | |||||
Additional paid-in capital | 61,849 | 64,212 | |||||
Retained earnings | 106,976 | 88,906 | |||||
Accumulated other comprehensive income | - | 220 | |||||
Total RCIHH stockholders' equity | 168,921 | 153,435 | |||||
Noncontrolling interests | (15) | (103) | |||||
Total stockholders' equity | 168,906 | 153,332 | |||||
Total liabilities and stockholders' equity | $ 350,878 | $ 329,732 | |||||
(a) | The unaudited condensed consolidated Balance Sheet at June 30, 2019 is preliminary and therefore subject to adjustments in connection with subsequent events arising through the date of the company's filing of its Quarterly Reports on Form 10-Q. The filing of the Form 10-Q will be completed as soon as practicable after the appointment of an independent registered public accounting firm and the completion of review procedures by such firm. The final financial results reported for this period may differ from the results reported in this release as a result of review procedures to be performed by an independent registered public accounting firm. |
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SOURCE RCI Hospitality Holdings, Inc.