FALSE000093541900009354192023-08-092023-08-09

United States
Securities and Exchange Commission
Washington, D.C. 20549
FORM 8-K
Current Report
Pursuant to Section 13 or 15(d) of
The Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): August 9, 2023
RCI HOSPITALITY HOLDINGS, INC.
(Exact Name of Registrant as Specified in Its Charter)
Texas001-1399276-0458229
(State or Other Jurisdiction
of Incorporation)
(Commission
File Number)
(IRS Employer
Identification No.)
10737 Cutten Road
Houston, Texas 77066
(Address of Principal Executive Offices, Including Zip Code)
(281) 397-6730
(Issuer’s Telephone Number, Including Area Code)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
oWritten communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
oSoliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a -12)
oPre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d -2(b))
oPre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e -4(c))
Securities registered pursuant to Section 12(b) of the Act:
Title of each classTrading Symbol(s)Name of each exchange on which registered
Common stock, $0.01 par valueRICKThe Nasdaq Global Market
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging growth company o
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. o


ITEM 2.02 RESULTS OF OPERATIONS AND FINANCIAL CONDITION.

On August 9, 2023, we issued a press release announcing results for the fiscal quarter ended June 30, 2023 and the filing of our quarterly report on Form 10-Q for that quarter. Also on August 9, 2023, we will hold a conference call to discuss these results and related matters. A copy of the press release is furnished as Exhibit 99.1 to this current report on Form 8-K.
 
This information shall not be deemed “filed” for the purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or incorporated by reference in any filing under the Securities Act of 1933, as amended, or the Exchange Act, except as shall be expressly set forth by specific reference in such a filing.

ITEM 9.01 FINANCIAL STATEMENTS AND EXHIBITS
 
(d) Exhibits
 
Exhibit Number Description
   
99.1 
104 Cover Page Interactive Data File (embedded within the Inline XBRL document)
2

SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
RCI HOSPITALITY HOLDINGS, INC.
Date: August 9, 2023By:/s/ Eric Langan
Eric Langan
President and Chief Executive Officer
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RCI Reports 3Q23 Results: Total Revenues $77.1M, GAAP EPS $0.96, Non-GAAP EPS $1.30
Conference Call on X (formerly Twitter) Spaces at 4:30 PM ET Today; Meet Management at 7 PM ET Tonight
HOUSTON—August 9, 2023—RCI Hospitality Holdings, Inc. (Nasdaq: RICK) today reported results and filed its Form 10-Q for the fiscal 2023 third quarter ended June 30, 2023.
Summary Financials (in millions except EPS)3Q233Q229M239M22
Total revenues$77.1$70.7$218.5$196.2
EPS$0.96$1.48$2.91$3.76
Non-GAAP EPS1
$1.30$1.60$3.80$3.89
Net cash from operating activities$15.3$18.9$47.0$46.8
Free cash flow1
$14.3
$18.02
$42.1
$44.42
Net income attributable to RCIHH common stockholders$9.1$13.9$27.1$35.4
Adjusted EBITDA1
$22.7$24.6$64.8$62.5
Weighted average shares used in computing EPS – basic and diluted9.439.399.319.43
1 See “Non-GAAP Financial Measures” below
2 3Q22 and 9M22 free cash flow included receipt of $2.2M tax refund
Eric Langan, President and CEO of RCI Hospitality Holdings, Inc., said: “Third quarter revenues of $77.1 million increased 9.0% year over year, generating free cash flow of $14.3 million and adjusted EBITDA of $22.7 million. As a result, FCF and adjusted EBITDA margins were generally in line year-to-date with our respective 20% and 30% targets.
“It should be noted the year-ago quarter, aided by the end of Covid restrictions, had one of the highest levels of operating leverage that we have experienced the last five years which affects direct comparisons to 3Q23. Having said that, we do believe 3Q23 same store sales were held back by the increase in vacation travel, the extreme Texas heat, and economic uncertainty.”
“To date in 4Q23, we have repurchased 10,440 common shares for $725,423 or an average of $69.48 each. Currently, we still have $18.0 million in available stock repurchase authorization.”
“Later in 4Q23, we expect to open a new Bombshells in Stafford, TX. In FY24, we plan to relaunch a temporarily closed club and open two new clubs in Fort Worth and in Lubbock, TX. We are working on the launch of three new Bombshells in Lubbock and Rowlett, TX, and downtown Denver. We also hope to open our Rick’s Cabaret Steakhouse & Casino and Bombshells Sports Casino, both in Central City, CO, and we will continue to pursue new club acquisitions in FY24.”
Conference Call at 4:30 PM ET Today
Participants need to use X (formerly Twitter) Spaces on their mobile phones to ask questions during the Q&A
X (formerly Twitter) SpacesTelephoneWebcast, Slides & Replay
•https://x.com/i/spaces/1kvJpmbgaWmxE
•Hosted by: @RicksCEO, @BradleyChhay, and @itsmarkmoran
•Toll Free 888-506-0062
•International: 973-528-0011
•Passcode: 124757
•https://www.webcaster4.com/Webcast/Page/2209/48794
Meet Management at 7:00 PM ET Tonight
•Investors are invited to Meet Management at one of RCI’s top revenue generating clubs
•Rick’s Cabaret New York, 50 W 33rd St, New York, NY 10001
•RSVP your contact information to gary.fishman@anreder.com by 5:00 PM ET today
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3Q23 Segments (Comparisons are to 3Q22 unless indicated otherwise)
•Nightclubs: Revenues were $62.4 million, an increase of 14.2%, primarily reflecting an increase from newly acquired and remodeled clubs, partially offset by a same-store sales decline.3 By revenue type, service increased 4.8%, alcoholic beverage 24.1%, and food, merchandise and other 17.7%. The year-over-year changes reflect in part the lower proportion of service revenues in the newly acquired Baby Dolls-Chicas Locas clubs sales mix as compared to Nightclubs average. Operating income was $20.4 million compared to $22.5 million or 32.7% of revenues compared to 41.1%. 3Q23 included higher impairment and amortization of SOB licenses. Non-GAAP operating income was $23.6 million compared to $23.3 million or 37.7% of revenues compared to 42.7%.
•Bombshells: Revenues were $14.4 million, a decline of 8.8%, primarily reflecting a decline in same-store sales, partially offset by an increase from newly acquired and opened units.3 By revenue type, food and merchandise fell 11.8% and alcoholic beverage decreased 7.7%. Operating income was $1.7 million compared to $3.1 million or 11.8% of revenues compared to 19.4%. Non-GAAP operating income was $1.8 million compared to $3.7 million or 12.8% of revenues compared to 23.6%. The change in Bombshells performance mainly reflects higher year-ago guest traffic and customer spending.
3See our July 11, 2023 news release on 3Q23 sales for more details
3Q23 Consolidated (Comparisons are to 3Q22 and % are of total revenues unless indicated otherwise)
•Operating margin was 20.1% compared to 29.0%. On a non-GAAP basis, it was 25.3% compared to 31.2%. The year-over-year difference reflects 3Q22’s unusually high operating leverage. Otherwise, 3Q23’s non-GAAP operating margin was in line with 1Q23’s 25.6% and 2Q23’s 26.6%.
•Interest expense was 5.6% compared to 4.3% as a result of higher average debt mostly from seller-financed promissory notes related to FY22-23 acquisitions.
•Weighted average shares outstanding increased 0.4% year over year due to shares used in the 2Q23 Baby Dolls-Chicas Locas acquisition.
•Debt: $243.8 million at 6/30/23 compared to $245.8 million at 3/31/23 primarily due to paydowns.
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) 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 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, (h) stock-based compensation, 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 21.6% and 21.6% effective tax rate of the pre-tax non-GAAP income before taxes for the nine months ended June 30, 2023 and 2022, 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, (i) gain on debt extinguishment, and (j) 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.
2

•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, 2022, 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
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RCI HOSPITALITY HOLDINGS, INC.
CONSOLIDATED STATEMENTS OF INCOME
(in thousands, except per share, number of shares and percentage data)
For the Three Months EndedFor the Nine Months Ended
June 30, 2023June 30, 2022June 30, 2023June 30, 2022
Amount% of RevenueAmount% of RevenueAmount% of RevenueAmount% of Revenue
Revenues
Sales of alcoholic beverages$34,151 44.3 %$29,738 42.1 %$93,937 43.0 %$83,504 42.6 %
Sales of food and merchandise11,405 14.8 %11,574 16.4 %32,757 15.0 %33,628 17.1 %
Service revenues26,663 34.6 %25,444 36.0 %77,916 35.7 %67,821 34.6 %
Other4,836 6.3 %3,958 5.6 %13,930 6.4 %11,289 5.8 %
Total revenues77,055 100.0 %70,714 100.0 %218,540 100.0 %196,242 100.0 %
Operating expenses
Cost of goods sold
Alcoholic beverages sold6,397 18.7 %5,177 17.4 %17,136 18.2 %14,907 17.9 %
Food and merchandise sold4,106 36.0 %3,959 34.2 %11,429 34.9 %11,756 35.0 %
Service and other26 0.1 %46 0.2 %91 0.1 %170 0.2 %
Total cost of goods sold (exclusive of items shown below)10,529 13.7 %9,182 13.0 %28,656 13.1 %26,833 13.7 %
Salaries and wages20,578 26.7 %17,387 24.6 %58,682 26.9 %50,422 25.7 %
Selling, general and administrative23,803 30.9 %19,572 27.7 %68,561 31.4 %56,495 28.8 %
Depreciation and amortization4,041 5.2 %2,565 3.6 %11,108 5.1 %7,636 3.9 %
Other charges, net2,589 3.4 %1,501 2.1 %5,693 2.6 %1,357 0.7 %
Total operating expenses61,540 79.9 %50,207 71.0 %172,700 79.0 %142,743 72.7 %
Income from operations15,515 20.1 %20,507 29.0 %45,840 21.0 %53,499 27.3 %
Other income (expenses)
Interest expense(4,316)(5.6)%(3,028)(4.3)%(11,680)(5.3)%(8,496)(4.3)%
Interest income87 0.1 %103 0.1 %268 0.1 %321 0.2 %
Non-operating gains, net— — %127 0.2 %— — %211 0.1 %
Income before income taxes11,286 14.6 %17,709 25.0 %34,428 15.8 %45,535 23.2 %
Income tax expense2,269 2.9 %3,767 5.3 %7,447 3.4 %10,056 5.1 %
Net income9,017 11.7 %13,942 19.7 %26,981 12.3 %35,479 18.1 %
Net loss (income) attributable to noncontrolling interests68 0.1 %(40)(0.1)%74 — %(50)— %
Net income attributable to RCIHH common shareholders$9,085 11.8 %$13,902 19.7 %$27,055 12.4 %$35,429 18.1 %
Earnings per share
Basic and diluted$0.96 $1.48 $2.91 $3.76 
Weighted average shares used in computing earnings per share
Basic and diluted9,430,225 9,389,675 9,308,624 9,428,461
Dividends per share$0.06 $0.05 $0.17 $0.14 

4

RCI HOSPITALITY HOLDINGS, INC.
NON-GAAP FINANCIAL MEASURES
(in thousands, except per share and percentage data)
For the Three Months EndedFor the Nine Months Ended
June 30, 2023June 30, 2022June 30, 2023June 30, 2022
Reconciliation of GAAP net income to Adjusted EBITDA
Net income attributable to RCIHH common stockholders$9,085 $13,902 $27,055 $35,429 
Income tax expense2,269 3,767 7,447 10,056 
Interest expense, net4,229 2,925 11,412 8,175 
Settlement of lawsuits63 132 3,183 709 
Impairment of assets2,631 1,722 3,293 1,722 
Gain on sale of businesses and assets(105)(266)(692)(666)
Gain on debt extinguishment— (53)— (138)
Unrealized loss on equity securities— — — 1 
Gain on insurance— (87)(91)(408)
Stock-based compensation470 — 2,117 — 
Depreciation and amortization4,041 2,565 11,108 7,636 
Adjusted EBITDA$22,683 $24,607 $64,832 $62,516 
Reconciliation of GAAP net income to non-GAAP net income
Net income attributable to RCIHH common stockholders$9,085 $13,902 $27,055 $35,429 
Amortization of intangibles918 25 2,722 124 
Settlement of lawsuits63 132 3,183 709 
Impairment of assets2,631 1,722 3,293 1,722 
Gain on sale of businesses and assets(105)(266)(692)(666)
Gain on debt extinguishment— (53)— (138)
Unrealized loss on equity securities— — — 1 
Gain on insurance— (87)(91)(408)
Stock-based compensation470 — 2,117 — 
Net income tax effect(812)(312)(2,258)(59)
Non-GAAP net income$12,250 $15,063 $35,329 $36,714 
Reconciliation of GAAP diluted earnings per share to non-GAAP diluted earnings per share
Diluted shares9,430,225 9,389,675 9,308,624 9,428,461 
GAAP diluted earnings per share$0.96 $1.48 $2.91 $3.76 
Amortization of intangibles0.10 0.00 0.29 0.01 
Settlement of lawsuits0.01 0.01 0.34 0.08 
Impairment of assets0.28 0.18 0.35 0.18 
Gain on sale of businesses and assets(0.01)(0.03)(0.07)(0.07)
Gain on debt extinguishment0.00 (0.01)0.00 (0.01)
Unrealized loss on equity securities0.00 0.00 0.00 0.00 
Gain on insurance0.00 (0.01)(0.01)(0.04)
Stock-based compensation0.05 0.00 0.23 0.00 
Net income tax effect(0.09)(0.03)(0.24)(0.01)
Non-GAAP diluted earnings per share$1.30 $1.60 $3.80 $3.89 
Reconciliation of GAAP operating income to non-GAAP operating income
Income from operations$15,515 $20,507 $45,840 $53,499 
Amortization of intangibles918 25 2,722 124 
Settlement of lawsuits63 132 3,183 709 
Impairment of assets2,631 1,722 3,293 1,722 
Gain on sale of businesses and assets(105)(266)(692)(666)
Gain on insurance— (87)(91)(408)
Stock-based compensation470 — 2,117 — 
Non-GAAP operating income$19,492 $22,033 $56,372 $54,980 
5

Reconciliation of GAAP operating margin to non-GAAP operating margin
Income from operations20.1 %29.0 %21.0 %27.3 %
Amortization of intangibles1.2 %0.0 %1.2 %0.1 %
Settlement of lawsuits0.1 %0.2 %1.5 %0.4 %
Impairment of assets3.4 %2.4 %1.5 %0.9 %
Gain on sale of businesses and assets(0.1)%(0.4)%(0.3)%(0.3)%
Gain on insurance0.0 %(0.1)%0.0 %(0.2)%
Stock-based compensation0.6 %0.0 %1.0 %0.0 %
Non-GAAP operating margin25.3 %31.2 %25.8 %28.0 %
Reconciliation of net cash provided by operating activities to free cash flow
Net cash provided by operating activities$15,320 $18,893 $47,004 $46,754 
Less: Maintenance capital expenditures1,064 869 4,949 2,385 
Free cash flow$14,256 $18,024 $42,055 $44,369 
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RCI HOSPITALITY HOLDINGS, INC.
SEGMENT INFORMATION
(in thousands)
For the Three Months EndedFor the Nine Months Ended
June 30, 2023June 30, 2022June 30, 2023June 30, 2022
Revenues
Nightclubs$62,449 $54,684 $175,805 $149,639 
Bombshells14,397 15,789 42,143 45,893 
Other209 241 592 710 
$77,055 $70,714 $218,540 $196,242 
Income (loss) from operations
Nightclubs$20,392 $22,459 $61,127 $60,321 
Bombshells1,701 3,065 5,323 9,335 
Other(300)(82)(653)(159)
Corporate(6,278)(4,935)(19,957)(15,998)
$15,515 $20,507 $45,840 $53,499 
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RCI HOSPITALITY HOLDINGS, INC.
NON-GAAP SEGMENT INFORMATION
($ in thousands)
For the Three Months Ended June 30, 2023For the Three Months Ended June 30, 2022
NightclubsBombshellsOtherCorporateTotalNightclubsBombshellsOtherCorporateTotal
Income (loss) from operations$20,392 $1,701 $(300)$(6,278)$15,515 $22,459 $3,065 $(82)$(4,935)$20,507 
Amortization of intangibles624 81 208 5 918 23 1 — 1 25 
Settlement of lawsuits57 6 — — 63 124 8 — — 132 
Impairment of assets2,631 — — — 2,631 1,072 650 — — 1,722 
Loss (gain) on sale of businesses and assets(153)50 — (2)(105)(264)— — (2)(266)
Gain on insurance— — — — — (87)— — — (87)
Stock-based compensation— — — 470 470 — — — — — 
Non-GAAP operating income (loss)$23,551 $1,838 $(92)$(5,805)$19,492 $23,327 $3,724 $(82)$(4,936)$22,033 
GAAP operating margin32.7 %11.8 %(143.5)%(8.1)%20.1 %41.1 %19.4 %(34.0)%(7.0)%29.0 %
Non-GAAP operating margin37.7 %12.8 %(44.0)%(7.5)%25.3 %42.7 %23.6 %(34.0)%(7.0)%31.2 %
For the Nine Months Ended June 30, 2023For the Nine Months Ended June 30, 2022
NightclubsBombshellsOtherCorporateTotalNightclubsBombshellsOtherCorporateTotal
Income (loss) from operations$61,127 $5,323 $(653)$(19,957)$45,840 $60,321 $9,335 $(159)$(15,998)$53,499 
Amortization of intangibles1,880 500 329 13 2,722 117 5 — 2 124 
Settlement of lawsuits3,174 9 — — 3,183 578 18 — 113 709 
Impairment of assets3,293 — — — 3,293 1,072 650 — — 1,722 
Loss (gain) on sale of businesses and assets(734)66 — (24)(692)(344)17 — (339)(666)
Gain on insurance(48)— — (43)(91)(408)— — — (408)
Stock-based compensation— — — 2,117 2,117 — — — — — 
Non-GAAP operating income (loss)$68,692 $5,898 $(324)$(17,894)$56,372 $61,336 $10,025 $(159)$(16,222)$54,980 
GAAP operating margin34.8 %12.6 %(110.3)%(9.1)%21.0 %40.3 %20.3 %(22.4)%(8.2)%27.3 %
Non-GAAP operating margin39.1 %14.0 %(54.7)%(8.2)%25.8 %41.0 %21.8 %(22.4)%(8.3)%28.0 %
8


RCI HOSPITALITY HOLDINGS, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands)
For the Three Months EndedFor the Nine Months Ended
June 30, 2023June 30, 2022June 30, 2023June 30, 2022
CASH FLOWS FROM OPERATING ACTIVITIES
Net income$9,017 $13,942 $26,981 $35,479 
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization4,041 2,565 11,108 7,636 
Impairment of assets2,631 1,722 3,293 1,722 
Deferred income tax benefit(790)(409)(790)(409)
Stock-based compensation470 — 2,117 — 
Loss (gain) on sale of businesses and assets(183)(574)(872)(1,282)
Unrealized loss on equity securities— — — 1 
Amortization of debt discount and issuance costs162 63 453 199 
Gain on debt extinguishment— — — (83)
Noncash lease expense763 487 2,226 1,725 
Gain on insurance— (87)(91)(408)
Doubtful accounts expense on notes receivable— 700 — 753 
Changes in operating assets and liabilities:
Accounts receivable772 2,346 1,480 3,411 
Inventories— (216)79 (492)
Prepaid expenses, other current and other assets2,103 2,089 (3,602)(3,271)
Accounts payable, accrued and other liabilities(3,666)(3,735)4,622 1,773 
Net cash provided by operating activities15,320 18,893 47,004 46,754 
CASH FLOWS FROM INVESTING ACTIVITIES
Proceeds from sale of businesses and assets1 1,701 2,811 4,611 
Proceeds from insurance— 30 91 515 
Proceeds from notes receivable57 45 170 127 
Payments for property and equipment and intangible assets(9,029)(3,183)(29,919)(17,173)
Acquisition of businesses, net of cash acquired— (5,000)(30,200)(44,302)
Net cash used in investing activities(8,971)(6,407)(57,047)(56,222)
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from debt obligations— 78 11,595 35,820 
Payments on debt obligations(4,950)(3,424)(11,431)(10,714)
Purchase of treasury stock— (9,212)(98)(12,057)
Payment of dividends(565)(468)(1,580)(1,322)
Payment of loan origination costs(34)(27)(239)(445)
Share in return of investment by noncontrolling partner— — (600)— 
Net cash provided by (used in) financing activities(5,549)(13,053)(2,353)11,282 
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS800 (567)(12,396)1,814 
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD22,784 38,067 35,980 35,686 
CASH AND CASH EQUIVALENTS AT END OF PERIOD$23,584 $37,500 $23,584 $37,500 
9


RCI HOSPITALITY HOLDINGS, INC.
CONSOLIDATED BALANCE SHEETS
(in thousands)
June 30, 2023September 30, 2022June 30, 2022
ASSETS
Current assets
Cash and cash equivalents$23,584 $35,980 $37,500 
Accounts receivable, net7,433 8,510 3,955 
Current portion of notes receivable244 230 226 
Inventories4,571 3,893 3,749 
Prepaid expenses and other current assets5,028 1,499 4,475 
Assets held for sale— 1,049 6,989 
Total current assets40,860 51,161 56,894 
Property and equipment, net277,530 224,615 208,710 
Operating lease right-of-use assets, net35,683 37,048 37,753 
Notes receivable, net of current portion4,507 4,691 4,750 
Goodwill78,684 67,767 61,399 
Intangibles, net181,262 144,049 130,585 
Other assets1,581 1,407 2,088 
Total assets$620,107 $530,738 $502,179 
LIABILITIES AND EQUITY
Current liabilities
Accounts payable$7,762 $5,482 $5,767 
Accrued liabilities17,732 11,328 12,888 
Current portion of debt obligations, net23,824 11,896 12,295 
Current portion of operating lease liabilities2,923 2,795 2,730 
Total current liabilities52,241 31,501 33,680 
Deferred tax liability, net30,146 30,562 24,074 
Debt, net of current portion and debt discount and issuance costs219,999 190,567 175,670 
Operating lease liabilities, net of current portion35,941 36,001 36,719 
Other long-term liabilities355 349 351 
Total liabilities338,682 288,980 270,494 
Commitments and contingencies
Equity
Preferred stock— — — 
Common stock94 92 93 
Additional paid-in capital82,091 67,227 68,342 
Retained earnings199,425 173,950 163,800 
Total RCIHH stockholders' equity281,610 241,269 232,235 
Noncontrolling interests(185)489 (550)
Total equity281,425 241,758 231,685 
Total liabilities and equity$620,107 $530,738 $502,179 
10