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RCI Reports 4Q18 and FY18 Results and Files 10-K

Dec 31, 2018 4:05 PM

HOUSTON, Dec. 31, 2018 /PRNewswire/ -- RCI Hospitality Holdings, Inc. (Nasdaq: RICK) today reported 4Q18 and FY18 results and the filing of its 10-K for the fiscal year ended September 30, 2018.

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

4Q18 vs. 4Q17

  • Loss of $0.27 per share compared to a loss of $0.23
  • Non-GAAP* profit of $0.41 per diluted share compared to $0.36
  • GAAP results included $5.5 million in other charges compared to $6.2 million in 4Q17, mostly non-cash in both periods
  • Free cash flow (FCF) totaled $2.7 million based on net cash provided by operating activities of $3.4 million, less maintenance capital expenditures of $0.7 million
  • Total revenues of $40.7 million compared to $39.2 million on 43 and 45 units, respectively

FY18 vs. FY17

  • Diluted EPS of $2.23 compared to $0.85
  • Non-GAAP Diluted EPS of $2.18 compared to $1.43
  • FCF totaled $23.2 million based on net cash provided by operating activities of $25.8 million, less maintenance capital expenditures of $2.5 million
  • Total revenues of $165.7 million compared to $144.9 million

FY19 Initial Outlook

  • FY19 is expected to benefit from, in addition to other factors, recent nightclub acquisitions in Chicago and Pittsburgh, the opening of additional Bombshells Restaurant & Bar locations in the Houston area, and the sale or lease of non-income producing properties.

Conference Call Today at 4:30 PM ET

  • A conference call to discuss 4Q18 results, outlook and related matters will be held today, December 31, 2018, at 4:30 PM ET
  • Live Participant Dial In: Toll Free at 877-407-9210 and International at 201-689-8049
  • To access the live webcast, slides or replay, visit: https://www.investornetwork.com/event/presentation/41443
  • Phone replay: Toll Free at 877-481-4010 and International at 919-882-2331 (Passcode: 41443) 

CEO Comment

"We performed well in Fiscal 2018," said Eric Langan, President & CEO. "Revenues increased 14.4%, a combination of 4.6% in consolidated same-store sales and solid results from our club acquisitions and new Bombshells. The only challenge was a number of one-time factors that affected Bombshells growth in 4Q18, but we're in the process of rebuilding and it's headed in the right direction. FY18 free cash flow exceeded our original target of $23 million, and non-GAAP EPS diluted increased 52.4% to $2.18.

"During the fourth quarter, which is our seasonally weakest period, revenues increased 3.7%, a combination of 2.1% in consolidated same-store sales and contributions from acquisitions and new restaurants. FCF was $2.7 million, and non-GAAP EPS diluted of $0.41 increased 13.9% year over year.

"FY19 should benefit from the Chicago and Pittsburgh acquisitions, the opening of new Bombshells in the Houston area, the sale or lease of non-income producing properties, and other factors. Blush and VIP's, both to be rebranded Rick's Cabaret, have performed well since their November acquisitions, while the new Bombshells has also performed well since opening December 19th.

"For the first two months of 1Q19, Nightclubs total and comparable same store-sales increased year over year, while Bombshells total sales increased compared to the first two months of 4Q18. Bombshells will have challenging year over year same-store comparisons because of extra business generated in October 2017 when the Houston Astros were in the pro baseball championship. 1Q19 club and restaurant sales are scheduled to be announced January 10, 2019. We'll hold a related conference call that day.

"Now that we've reported results, we'll resume our capital allocation strategy as it applies to buybacks. That calls for repurchasing shares in the open market if the yield on our FCF run rate relative to our market cap approaches or exceeds double digits. With an FCF run rate of $26 million that would correspond to a share price of approximately $27. As of September 30, 2018, we had $3.1 million in remaining share repurchase authorization."

Recent Developments

  • Philadelphia: In October 2018, subsidiaries sold the former Club Onyx gentlemen's club business for $1.0 million ($375K cash and 10-year note at 9%), and entered into a 10-year triple net lease with the new club's owners to rent the real estate.
  • Chicago: In November 2018, a subsidiary acquired VIP's Gentlemen's Club and associated real estate. With its ability to generate $2 million annually in adjusted EBITDA, the club was acquired for $2.0 million cash and $4.5 million in seller financing, and the associated real estate for $4.0 million cash.
  • Pittsburgh: In November 2018, a subsidiary acquired Blush Gentlemen's Club & Sports Bar and associated real estate. With its ability to generate $3 million-plus annually in adjusted EBITDA, the club was acquired for $2.5 million cash and $7.5 million in seller financing, and the associated real estate for $5.0 million cash.
  • Houston: In December 2018, a subsidiary opened a Bombshells Restaurant & Bar on I-10 East, the chain's 7th location. Three more Houston area units are under construction: US 249 in Tomball (north of the city) should open February 2019; Katy (west of the city) in April-May 2019; and US 59 (southwest Houston) in May-June 2019.
  • Debt Financing: In 4Q18, $3.1 million was borrowed from banks to acquire club real estate in Philadelphia and finance Bombshells land acquisition in the Houston area, and $5.0 million was borrowed from a bank and $2.8 million from third parties to finance part of the cash needed to complete the Pittsburgh and Chicago club and real estate acquisitions.

4Q18 & FY18 REVIEW

All comparisons to year ago periods unless otherwise noted

Revenue Analysis

  • 4Q18: Total revenues of $40.7 million increased 3.7%. Growth reflected 2.1% increase in consolidated same-store sales and contributions from new units, namely Bombshells Restaurant & Bar in Pearland (just south of Houston), which opened in April, and Kappa Men's Club in Central Illinois, acquired in May. By revenue line, growth reflected increases of $629K (+4.2%) in service revenues, $472K (+9.3%) in food, and $434K (+16.3%) in other. The increase in other reflected the revitalization of the Drink Robust business and a strong Gentlemen's Club Expo trade show in August.
  • FY18: Total revenues of $165.7 million increased 14.4%. Growth reflected 4.6% increase in consolidated same-store sales and contributions from new units, namely Scarlett's Cabarets in St. Louis and Miami, which were acquired in 3Q17; Bombshells on Highway 290 in Houston, which opened in July 2017; and Bombshells in Pearland and Kappa Men's Club as mentioned above. By revenue line, growth reflected increases of $8.7 million (+14.4%) in beverage, $6.0 million (+10.3%) in service, $4.2 million (+22.9%) in food, and $2.0 million (+25.1%) in other.

Operating Income

  • 4Q18: Operating income increased 6.8% to $1.5 million (3.8% of revenues) from $1.4 million (3.7%). Expenses increased $1.4 million, but as a percent of revenues, declined 11 basis points to 96.2%. Most of the dollar increase was due to state sales tax settlements. Other charges, consisting primarily of year-end impairments and loss on sale of assets, decreased $707K. On a non-GAAP basis, operating income was $7.1 million (17.6%) compared to $7.7 million (19.7%). The difference was largely due to the fact that our non-GAAP methodology does not exclude sales tax settlements.
  • FY18: Operating income increased 22.7% to $28.4 million (17.1% of revenues) from $23.1 million (16.0%). Operating expenses increased $15.6 million, but as a percent of revenues, declined 116 basis points to 82.9%. Other charges increased $1.0 million due to lawsuit settlements. On a non-GAAP basis, operating income increased 20.6% to $37.0 million (22.3%) from $30.7 million (21.2%).

Nightclubs Segment

  • 4Q18: Sales increased 3.9% to $34.1 million, with 37 units compared to 40. Same-store sales increased 6.1%. Operating income increased 36.7% to $6.6 million (19.4% of sales) from $4.8 million (14.7%) primarily due to lower club impairments as mentioned above. On a non-GAAP basis, operating income increased 8.5% to $10.8 million (31.6%) from $9.9 million (30.2%).
  • FY18: Sales increased 12.3% to $140.1 million. Same-store sales increased 5.8%. Operating income increased 26.5% to $44.5 million (31.7% of sales) from $35.1 million (28.2%) primarily due to lower club impairments as mentioned above. On a non-GAAP basis, operating income increased 19.1% to $49.1 million (35.1%) from $41.2 million (33.1%).

Bombshells Segment

  • 4Q18: Sales were approximately level at $5.5 million, with 6 units compared to 5. Comparable same-store sales declined 21.3%, but that was offset by the addition of the Bombshells in Pearland. Operating income was a loss of $1.2 million (-21.8% of sales) compared to a profit of $0.953 million (17.2%). The operating loss reflected $1.4 million to write down fixed and other assets, partially offset by a small profit. On a non-GAAP basis, operating income was $183K (3.3%) compared to $933K (16.8%).
  • FY18: Sales increased 28.0% to $24.1 million compared to $18.8 million. Comparable same-store sales declined 3.3%, which was more than offset by the addition of Bombshells in Pearland. Operating income declined 33.9% to $2.0 million (8.5% of sales) compared to $3.1 million (16.4%). On a non-GAAP basis, operating income was $3.6 million (15.1%) compared to $3.1 million (16.4%).

Other Metrics

  • Cash and cash equivalents of $17.7 million at September 30, 2018 increased 34.6% from $13.2 million at June 30, 2018 and 78.7% from $9.9 million at September 30, 2017. The year-end cash position included proceeds from debt later used to finance the two November club and related real estate acquisitions.
  • Occupancy costs (rent and interest expense as a percentage of total revenues) fell to 7.8% from 9.2%, 4Q18 vs. 4Q17, and to 7.7% from 8.3%, FY18 vs. FY17.
  • Adjusted EBITDA was $9.0 million in 4Q18 compared to $9.6 million in 4Q17 and increased 18.8% to $44.4 million in FY18 from $37.3 million in FY17.
  • Effective Tax Rate for FY18 was a benefit of 16.7%, which included the benefit of $8.8 million as a final calculation of the reduction of deferred tax liability as a consequence 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.
  • RCI's FY19 FCF Target of $26 million is based on estimated net cash provided by operating activities of approximately $29 million, less projected maintenance capex of approximately $3 million.

*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, gain on settlement of patron tax case, gains or losses on sale of assets, impairment of assets, stock-based compensation, settlement of lawsuits, and gain on insurance. 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, gain on settlement of patron tax case, income tax expense (benefit), impairment charges, gains or losses on sale of assets, stock-based compensation, settlement of lawsuits, costs and charges related to debt refinancing, and gain on insurance. Included item is the non-GAAP provision for current and deferred income taxes, calculated as the tax effect at 24.5%, 37%, and 35% in 2018, 2017, and 2016, respectively, effective tax rate of the pre-tax non-GAAP income before taxes. 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, impairment of assets, income tax expense (benefit), interest expense, interest income, gains or losses on sale of assets, settlement of lawsuits, gain on settlement of patron tax case, and gain on insurance. 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 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.

CONDENSED CONSOLIDATED STATEMENTS OF INCOME

(in thousands, except per share data)



























For the Three Months Ended September 30,


For the Twelve Months Ended September 30,






2018


2017


2018


2017






Amount


% of
Revenue


Amount


% of
Revenue


Amount


% of
Revenue


Amount


% of
Revenue

Revenues


















Sales of alcoholic beverages


$  16,285


40.0%


$  16,354


41.7%


$  69,120


41.7%


$  60,439


41.7%


Sales of food and merchandise


5,527


13.6%


5,055


12.9%


22,433


13.5%


18,256


12.6%


Service revenues


15,766


38.8%


15,137


38.6%


64,104


38.7%


58,132


40.1%


Other


3,098


7.6%


2,664


6.8%


10,091


6.1%


8,069


5.6%



Total revenues


40,676


100.0%


39,210


100.0%


165,748


100.0%


144,896


100.0%

Operating expenses


















Cost of goods sold



















Alcoholic beverages sold


3,351


20.6%


3,511


21.5%


14,327


20.7%


13,114


21.7%



Food and merchandise sold


1,935


35.0%


2,042


40.4%


8,133


36.3%


7,398


40.5%



Service and other


276


1.5%


50


0.3%


449


0.6%


209


0.3%




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


5,562


13.7%


5,603


14.3%


22,909


13.8%


20,721


14.3%


Salaries and wages


11,461


28.2%


10,758


27.4%


44,547


26.9%


40,029


27.6%


Selling, general and administrative


14,688


36.1%


13,206


33.7%


53,824


32.5%


46,775


32.3%


Depreciation and amortization


1,916


4.7%


1,984


5.1%


7,722


4.7%


6,920


4.8%


Other charges, net


5,516


13.6%


6,223


15.9%


8,350


5.0%


7,312


5.0%



Total operating expenses


39,143


96.2%


37,774


96.3%


137,352


82.9%


121,757


84.0%

Income from operations


1,533


3.8%


1,436


3.7%


28,396


17.1%


23,139


16.0%

Other income (expenses)


















Interest expense


(2,461)


-6.1%


(2,632)


-6.7%


(9,954)


-6.0%


(8,764)


-6.0%


Interest income


47


0.1%


79


0.2%


234


0.1%


266


0.2%

Income before income taxes


(881)


-2.2%


(1,117)


-2.8%


18,676


11.3%


14,641


10.1%

Income tax expense (benefit)


1,781


4.4%


1,112


2.8%


(3,118)


-1.9%


6,359


4.4%

Net income


(2,662)


-6.5%


(2,229)


-5.7%


21,794


13.1%


8,282


5.7%

Net loss (income) attributable to noncontrolling interests


(10)


0.0%


(10)


0.0%


(81)


0.0%


(23)


0.0%

Net income (loss) attributable to RCIHH common shareholders


$  (2,672)


-6.6%


$  (2,239)


-5.7%


$  21,713


13.1%


$    8,259


5.7%





















Earnings (loss) per share


















Basic


$    (0.27)




$    (0.23)




$      2.23




$      0.85




Diluted


$    (0.27)




$    (0.23)




$      2.23




$      0.85



Weighted average shares outstanding


















Basic


9,719




9,719




9,719




9,731




Diluted


9,719




9,719




9,719




9,743























Dividends per share


$      0.03




$      0.03




$      0.12




$      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,



2018


2017


2018


2017

Reconciliation of GAAP net income (loss) to Adjusted EBITDA









Net income (loss) attributable to RCIHH common shareholders


$ (2,672)


$ (2,239)


$  21,713


$    8,259

Income tax expense (benefit)


1,781


1,112


(3,118)


6,359

Interest expense, net


2,414


2,553


9,720


8,498

Settlement of lawsuits


395


14


1,669


317

Impairment of assets


3,186


6,228


4,736


7,639

Loss (gain) on sale of assets


1,935


(19)


1,965


(542)

Gain on insurance


-


-


(20)


-

Gain on settlement of patron tax


-


-


-


(102)

Depreciation and amortization


1,916


1,984


7,722


6,920

Adjusted EBITDA


$   8,955


$   9,633


$  44,387


$  37,348










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









Net income (loss) attributable to RCIHH common shareholders


$ (2,672)


$ (2,239)


$  21,713


$    8,259

Amortization of intangibles


93


67


254


217

Income tax expense (benefit)


1,781


1,112


(3,118)


6,359

Settlement of lawsuits


395


14


1,669


317

Impairment of assets


3,186


6,228


4,736


7,639

Loss (gain) on sale of assets


1,935


(19)


1,965


(542)

Gain on insurance


-


-


(20)


-

Gain on settlement of patron tax


-


-


-


(102)

Costs and charges related to debt refinancing


-


-


827


-

Effect of change in effective tax rate and uncertain tax position in the fourth quarter


-


962


-


-

Non-GAAP income tax benefit (expense)


(689)


(2,589)


(6,866)


(8,194)

Non-GAAP net income


$   4,029


$   3,536


$  21,160


$  13,953










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







Fully diluted shares


9,719


9,719


9,719


9,743

GAAP diluted earnings (loss) per share


$   (0.27)


$   (0.23)


$      2.23


$      0.85

Amortization of intangibles


0.01


0.01


0.03


0.02

Income tax expense (benefit)


0.18


0.11


(0.32)


0.65

Settlement of lawsuits


0.04


0.00


0.17


0.03

Impairment of assets


0.33


0.64


0.49


0.78

Loss (gain) on sale of assets


0.20


(0.00)


0.20


(0.06)

Gain on insurance


-


-


(0.00)


-

Gain on settlement of patron tax


-


-


-


(0.01)

Costs and charges related to debt refinancing


-


-


0.09


-

Effect of change in effective tax rate and uncertain tax position in the fourth quarter


-


0.10


-


-

Non-GAAP income tax benefit (expense)


(0.07)


(0.27)


(0.71)


(0.83)

Non-GAAP diluted earnings per share


$      0.41


$      0.36


$      2.18


$      1.43










Reconciliation of GAAP operating income to non-GAAP operating income









Income from operations


$   1,533


$   1,436


$  28,396


$  23,139

Amortization of intangibles


93


67


254


217

Settlement of lawsuits


395


14


1,669


317

Impairment of assets


3,186


6,228


4,736


7,639

Loss (gain) on sale of assets


1,935


(19)


1,965


(542)

Gain on insurance


-


-


(20)


-

Gain on settlement of patron tax


-


-


-


(102)

Non-GAAP operating income


$   7,142


$   7,726


$  37,000


$  30,668










Reconciliation of GAAP operating margin to non-GAAP operating margin









GAAP operating margin


3.8%


3.7%


17.1%


16.0%

Amortization of intangibles


0.2%


0.2%


0.2%


0.1%

Settlement of lawsuits


1.0%


0.0%


1.0%


0.2%

Impairment of assets


7.8%


15.9%


2.9%


5.3%

Loss (gain) on sale of assets


4.8%


0.0%


1.2%


-0.4%

Gain on insurance


0.0%


0.0%


0.0%


0.0%

Gain on settlement of patron tax


0.0%


0.0%


0.0%


-0.1%

Non-GAAP operating margin


17.6%


19.7%


22.3%


21.2%










Reconciliation of GAAP net cash provided by operating activities to non-GAAP free cash flow







Net cash provided by operating activities


$   3,358


$   3,197


$  25,769


$  21,094

Less: Maintenance capital expenditures


680


508


2,527


1,813

Free cash flow


$   2,678


$   2,689


$  23,242


$  19,281

 

RCI HOSPITALITY HOLDINGS, INC.

SEGMENT INFORMATION

(in thousands)














For the Three Months


For the Twelve Months




Ended September 30,


Ended September 30,




2018


2017


2018


2017

Revenues










Nightclubs


$  34,146


$  32,863


$  140,060


$  124,687


Bombshells


5,544


5,549


24,094


18,830


Other


986


798


1,594


1,379




$  40,676


$  39,210


$  165,748


$  144,896











Income (loss) from operations










Nightclubs


$    6,623


$    4,845


$    44,458


$    35,138


Bombshells


(1,207)


953


2,040


3,084


Other


295


171


(252)


(522)


General corporate


(4,178)


(4,533)


(17,850)


(14,561)




$    1,533


$    1,436


$    28,396


$    23,139











 

RCI HOSPITALITY HOLDINGS, INC.

NON-GAAP SEGMENT INFORMATION

($ in thousands)
























For the Three Months Ended September 30, 2018


For the Three Months Ended September 30, 2017



Nightclubs


Bombshells


Other


Corporate


Total


Nightclubs


Bombshells


Other


Corporate


Total

Income from operations (loss)


$    6,623


$  (1,207)


$   295


$   (4,178)


$    1,533


$    4,845


$        953


$   171


$   (4,533)


$    1,436

Amortization of intangibles


-


-


-


93


93


-


-


-


67


67

Settlement of lawsuits


366


-


-


29


395


14


-


-


-


14

Impairment of assets


3,613


1,123


-


-


4,736


5,072


-


-


1,156


6,228

Loss (gain) on sale of assets


188


267


(63)


(7)


385


10


(20)


(1)


(8)


(19)

Gain on insurance


-


-


-


-


-


-


-


-


-


-

Gain on settlement of patron tax


-


-


-


-


-


-


-


-


-


-

Non-GAAP operating income (loss)


$  10,790


$        183


$   232


$   (4,063)


$    7,142


$    9,941


$        933


$   170


$   (3,318)


$    7,726






















GAAP operating margin


19.4%


-21.8%


29.9%


-10.3%


3.8%


14.7%


17.2%


21.4%


-11.6%


3.7%

Non-GAAP operating margin


31.6%


3.3%


23.5%


-10.0%


17.6%


30.2%


16.8%


21.3%


-8.5%


19.7%
























For the Twelve Months Ended September 30, 2018


For the Twelve Months Ended September 30, 2017



Nightclubs


Bombshells


Other


Corporate


Total


Nightclubs


Bombshells


Other


Corporate


Total

Income from operations (loss)


$  44,458


$    2,040


$ (252)


$ (17,850)


$  28,396


$  35,138


$    3,084


$ (522)


$ (14,561)


$  23,139

Amortization of intangibles


-


-


-


254


254


-


-


-


217


217

Settlement of lawsuits


1,440


200


-


29


1,669


317


-


-


-


317

Impairment of assets


3,613


1,123


-


-


4,736


6,483


-


-


1,156


7,639

Loss (gain) on sale of assets


(400)


267


-


2,098


1,965


(594)


-


88


(36)


(542)

Gain on insurance


-


-


-


(20)


(20)


-


-


-


-


-

Gain on settlement of patron tax


-


-


-


-


-


(102)


-


-


-


(102)

Non-GAAP operating income (loss)


$  49,111


$    3,630


$ (252)


$ (15,489)


$  37,000


$  41,242


$    3,084


$ (434)


$ (13,224)


$  30,668






















GAAP operating margin


31.7%


8.5%


-15.8%


-10.8%


17.1%


28.2%


16.4%


-37.9%


-10.0%


16.0%

Non-GAAP operating margin


35.1%


15.1%


-15.8%


-9.3%


22.3%


33.1%


16.4%


-31.5%


-9.1%


21.2%

 

RCI HOSPITALITY HOLDINGS, INC.

CONDENSED CONSOLIDATED BALANCE SHEET

(in thousands, except per share data)














September 30,


September 30,






2018


2017

ASSETS





Current assets






Cash and cash equivalents


$       17,726


$         9,922


Accounts receivable, net


7,320


3,187


Inventories


2,353


2,149


Prepaid insurance


4,910


3,826


Other current assets


1,591


1,399


Assets held for sale


2,902


5,759



Total current assets


36,802


26,242

Property and equipment, net


172,403


148,410

Notes receivable


2,874


4,993

Goodwill


44,425


43,866

Intangibles, net


71,532


74,424

Other assets


2,530


1,949




Total assets


$     330,566


$     299,884









LIABILITIES AND STOCKHOLDERS' EQUITY





Current liabilities






Accounts payable


$         2,825


$         2,147


Accrued liabilities


11,973


11,524


Current portion of long-term debt


19,047


17,440



Total current liabilities


33,845


31,111

Deferred tax liability


19,552


25,541

Long-term debt


121,580


106,912

Other long-term liabilities


1,423


1,095



Total liabilities


176,400


164,659









Commitments and contingencies













Stockholders' equity






Preferred stock


-


-


Common stock


97


97


Additional paid-in capital


64,212


63,453


Retained earnings


89,740


69,195


Accumulated other comprehensive income


220


-



Total RCIHH stockholders' equity


154,269


132,745


Noncontrolling interests


(103)


2,480



Total stockholders' equity


154,166


135,225




Total liabilities and stockholders' equity


$     330,566


$     299,884

 

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SOURCE RCI Hospitality Holdings, Inc.