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RCI Reports Preliminary 2Q19 Financial Results

HOUSTON, July 25, 2019 /PRNewswire/ -- RCI Hospitality Holdings, Inc. (RICK) today reported preliminary unaudited financial results for the second quarter of Fiscal 2019 ended March 31, 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.

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

2Q19 vs. 2Q18

  • Diluted EPS of $0.70 compared to $0.48
  • Diluted Non-GAAP* EPS of $0.63 compared to $0.65
  • 2Q19 GAAP included net pre-tax gains of $1.0 million on the sale of one parcel of excess Bombshells land and a former club parking lot vs. net pre-tax charges of $2.3 million in 2Q18
  • Total revenues of $44.8 million compared to $41.2 million on 47 and 43 units, respectively
  • Repurchased 70,700 shares in 2Q19 for $1.6 million ($22.71 average per share)
  • Free cash flow (FCF) of $8.8 million based on net cash provided by operating activities of $9.5 million, less maintenance capital expenditures of $0.7 million
  • Lifetime retained earnings exceeded $100 million for the first time

CEO Comment (All comparisons to year ago periods unless otherwise noted)

"We generated strong top and bottom line results and achieved many strategic and financial objectives during the second quarter, enabling us to exceed $100 million in lifetime retained earnings," said Eric Langan, President and CEO.

"Total revenues for 2Q19 grew 8.7% primarily due to our Nightclubs and Bombshells segments. Operating income expanded 35.7% due to revenue growth and margin expansion in Nightclubs, and gains on the sale of excess real estate. EPS totaled $0.70 GAAP and $0.63 non-GAAP. Nightclubs benefitted from our improved club lineup. Bombshells revenues benefitted from the strong performance of new locations. Segment operating income and margin continued to demonstrate sequential quarterly improvement."

"We achieved initial progress with part of our Bombshells development strategy through the sale of our first excess parcel for a gain of more than 80%. With our other asset sale, we continued the liquidation of non-income producing properties. During 3Q19, we also sold or leased four more non-income producing-properties, including the sale of another parcel of excess Bombshells property, adjacent to the new I-10 location, for a hotel development. We hope to conclude the sale or lease of remaining non-income-producing properties by year-end FY19 or early FY20."

"During 2Q19, long-term debt was reduced by $3.3 million. By April 30th, we paid off the $5.0 million unsecured bank term loan used to help finance the Chicago and Pittsburgh club acquisitions. 2Q19 FCF was $8.8 million, up 66.3%. For the first six months of FY19, FCF totaled $20.0 million, up 54.9%."

2Q19 REVIEW (All comparisons to year ago periods unless otherwise noted)

  • Total Revenues: Total revenues of $44.8 million grew $3.6 million with increases of $1.1 million (+6.4%) in alcoholic beverages, $1.0 million (+18.7%) in food, $846K (+5.2%) in service, and $625K (+27.2%) in other. Revenues increased with the addition of the Chicago and Pittsburgh clubs, club same-store sales growth (ex-Minneapolis), and three new Houston area Bombshells (Pearland and I-10 for the entire quarter and 249 in Tomball for a few days). This more than offset strong year-ago revenues from our three large Minneapolis clubs due to high traffic from the 2018 pro football championship in that city and the negative effects on revenue during 2Q19 caused by the unusually cold weather in late January-early February 2019 in many locations across the country.
  • Operating Income: Operating income of $11.2 million (24.9% of revenues) increased $2.9 million from $8.2 million (20.0%). Excluding other gains and charges, expenses increased 12.9% or $4.0 million to $34.6 million (77.3%) from $30.7 million (74.4%). The increase reflected new Bombshells and those in development. It also reflected higher corporate expenses year-over-year as a result of the timing of certain items in 2Q18. The $1.0 million of net gains in 2Q19 compared to net charges of $2.3 million in 2Q18. On a non-GAAP basis, which excludes these gains/charges and other items, operating income was $10.3 million (23.1%) compared to $10.6 million (25.7%).
  • Nightclubs Segment: Revenues of $37.0 million increased $1.6 million or 4.5%, with 39 units compared to 38. Operating income increased $3.2 million or 26.9% to $15.1 million (40.7% of revenues) from $11.9 million (33.5%). 2Q19 included the $1.0 million in gains on the sale of the two previously mentioned properties. On a non-GAAP basis, segment income increased $1.7 million or 13.7% to $14.2 million from $12.5 million as segment margin expanded to 38.2% from 35.1%.
  • Bombshells Segment: Revenues of $7.5 million increased $1.9 million or 34.4%, with 8 units compared to 5. New units more than offset the previously reported decline in comparable same-store sales. Operating income was $738K (9.8% of revenues) compared to $965K (17.2%). This reflected reduced operating leverage due to the same-store sales decline. It also reflected expenses without the benefit of corresponding revenues from Bombshells 249, which opened March 27, 2019, and locations in development. While down from 2Q18, same-store sales and operating income and margin demonstrated continued sequential quarterly improvement in FY19.
  • Interest & Taxes: Interest expense of $2.6 million (5.9% of revenues) increased $0.5 million from $2.1 million (5.1%) due to higher debt related to the Pittsburgh and Chicago club acquisitions and new Bombshells development, and a lower average interest rate. Income tax expense increased $0.4 million while the effective tax rate fell to 22.3% from 24.2% with the full effect in Fiscal 2019 of the federal Tax Cuts and Jobs Act.
  • Asset Management: There were two sales: (i) a small portion of the excess land around newly opened Bombshells 249 in Tomball for $1.4 million cash for a $638K pre-tax gain after closing costs (proceeds were used in part to pay down $980K in debt on the entire Bombshells 249 property); and (ii) an excess parking lot near the former Club Onyx Dallas for $1.4 million, consisting of $250K in cash and $1.15 million in an 8%, 3-year note, for a $383K pre-tax gain after closing costs.


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 period, the financial statements for the three and six months ended March 31, 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 six months ended March 31, 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 22.1% and 26.5% effective tax rate of the pre-tax non-GAAP income before taxes for the six months ended March 31, 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. (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 gary.fishman@anreder.com and steven.anreder@anreder.com


 

RCI HOSPITALITY HOLDINGS, INC.

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF INCOME

(in thousands, except per share data)


























For the Three Months Ended March 31,


For the Six Months Ended March 31,






2019(a)


2018


2019(a)


2018






Amount


% of
Revenue


Amount


% of
Revenue


Amount


% of
Revenue


Amount


% of
Revenue

Revenues


















Sales of alcoholic beverages


$  18,486


41.2%


$  17,372


42.1%


$  36,796


41.4%


$  35,177


42.7%


Sales of food and merchandise


6,439


14.4%


5,424


13.2%


12,129


13.7%


10,731


13.0%


Service revenues


16,979


37.9%


16,133


39.1%


34,310


38.6%


32,022


38.8%


Other


2,922


6.5%


2,297


5.6%


5,614


6.3%


4,508


5.5%



Total revenues


44,826


100.0%


41,226


100.0%


88,849


100.0%


82,438


100.0%

Operating expenses


















Cost of goods sold



















Alcoholic beverages sold


3,790


20.5%


3,589


20.7%


7,526


20.5%


7,344


20.9%



Food and merchandise sold


2,308


35.8%


1,964


36.2%


4,292


35.4%


4,058


37.8%



Service and other


94


0.5%


43


0.2%


186


0.5%


79


0.2%




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


6,192


13.8%


5,596


13.6%


12,004


13.5%


11,481


13.9%


Salaries and wages


11,908


26.6%


10,347


25.1%


24,004


27.0%


21,724


26.4%


Selling, general and administrative


14,341


32.0%


12,848


31.2%


28,368


31.9%


25,660


31.1%


Depreciation and amortization


2,200


4.9%


1,899


4.6%


4,253


4.8%


3,808


4.6%


Other charges (gains), net


(981)


-2.2%


2,305


5.6%


(2,078)


-2.3%


2,394


2.9%



Total operating expenses


33,660


75.1%


32,995


80.0%


66,551


74.9%


65,067


78.9%

Income from operations


11,166


24.9%


8,231


20.0%


22,298


25.1%


17,371


21.1%

Other income (expenses)


















Interest expense


(2,645)


-5.9%


(2,106)


-5.1%


(5,166)


-5.8%


(5,185)


-6.3%


Interest income


75


0.2%


68


0.2%


126


0.1%


135


0.2%


Non-operating gain (loss)


77


0.2%


-


0.0%


(370)


-0.4%


-


0.0%

Income before income taxes


8,673


19.3%


6,193


15.0%


16,888


19.0%


12,321


14.9%

Income tax expense (benefit)


1,930


4.3%


1,499


3.6%


3,741


4.2%


(6,728)


-8.2%

Net income


6,743


15.0%


4,694


11.4%


13,147


14.8%


19,049


23.1%

Net income attributable to noncontrolling interests


(8)


0.0%


(9)


0.0%


(68)


-0.1%


(53)


-0.1%

Net income attributable to RCIHH common shareholders


$    6,735


15.0%


$    4,685


11.4%


$  13,079


14.7%


$  18,996


23.0%





















Earnings per share


















Basic and diluted


$      0.70




$      0.48




$      1.35




$       1.95























Weighted average shares outstanding


















Basic and diluted


9,679




9,719




9,696




9,719























Dividends per share


$      0.03




$      0.03




$      0.06




$       0.06





(a)

The unaudited condensed consolidated Statements of Income for the three and six months ended March 31, 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 Six Months



Ended March 31,


Ended March 31,



2019(a)


2018


2019(a)


2018

Reconciliation of GAAP net income to Adjusted EBITDA









Net income attributable to RCIHH common shareholders


$    6,735


$    4,685


$  13,079


$  18,996

Income tax expense (benefit)


1,930


1,499


3,741


(6,728)

Interest expense, net


2,570


2,038


5,040


5,050

Settlement of lawsuits


84


773


144


800

Impairment of assets


-


1,550


-


1,550

Loss (gain) on sale of assets


(1,065)


(18)


(2,222)


64

Unrealized loss (gain) on equity securities


(77)


-


370


-

Gain on insurance


-


-


-


(20)

Depreciation and amortization


2,200


1,899


4,253


3,808

Adjusted EBITDA


$  12,377


$  12,426


$  24,405


$  23,520










Reconciliation of GAAP net income to non-GAAP net income









Net income attributable to RCIHH common shareholders


$    6,735


$    4,685


$  13,079


$  18,996

Amortization of intangibles


153


48


309


96

Settlement of lawsuits


84


773


144


800

Impairment of assets


-


1,550


-


1,550

Loss (gain) on sale of assets


(1,065)


(18)


(2,222)


64

Unrealized loss (gain) on equity securities


(77)


-


370


-

Gain on insurance


-


-


-


(20)

Costs and charges related to debt refinancing


-


-


-


827

Income tax effect of adjustments above


223


(763)


333


(10,858)

Non-GAAP net income


$    6,053


$    6,275


$  12,013


$  11,455










Reconciliation of GAAP diluted earnings per share to non-GAAP diluted earnings per share







Diluted shares


9,679


9,719


9,696


9,719

GAAP diluted earnings per share


$      0.70


$      0.48


$      1.35


$      1.95

Amortization of intangibles


0.02


0.00


0.03


0.01

Settlement of lawsuits


0.01


0.08


0.01


0.08

Impairment of assets


-


0.16


-


0.16

Loss (gain) on sale of assets


(0.11)


(0.00)


(0.23)


0.01

Unrealized loss (gain) on equity securities


(0.01)


-


0.04


-

Gain on insurance


-


-


-


(0.00)

Costs and charges related to debt refinancing


-


-


-


0.09

Income tax effect of adjustments above


0.02


(0.08)


0.03


(1.12)

Non-GAAP diluted earnings per share


$      0.63


$      0.65


$      1.24


$      1.18










Reconciliation of GAAP operating income to non-GAAP operating income









Income from operations


$  11,166


$    8,231


$  22,298


$  17,371

Amortization of intangibles


153


48


309


96

Settlement of lawsuits


84


773


144


800

Impairment of assets


-


1,550


-


1,550

Loss (gain) on sale of assets


(1,065)


(18)


(2,222)


64

Gain on insurance


-


-


-


(20)

Non-GAAP operating income


$  10,338


$  10,584


$  20,529


$  19,861










Reconciliation of GAAP operating margin to non-GAAP operating margin









GAAP operating margin


24.9%


20.0%


25.1%


21.1%

Amortization of intangibles


0.3%


0.1%


0.3%


0.1%

Settlement of lawsuits


0.2%


1.9%


0.2%


1.0%

Impairment of assets


0.0%


3.8%


0.0%


1.9%

Loss (gain) on sale of assets


-2.4%


0.0%


-2.5%


0.1%

Gain on insurance


0.0%


0.0%


0.0%


0.0%

Non-GAAP operating margin


23.1%


25.7%


23.1%


24.1%










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







Net cash provided by operating activities


$    9,519


$    5,932


$  20,971


$  14,077

Less: Maintenance capital expenditures


741


654


1,117


1,262

Free cash flow


$    8,778


$    5,278


$  19,854


$  12,815



(a)

The condensed consolidated schedule of Non-GAAP Financial Measures for the three and six months ended March 31, 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 Six Months




Ended March 31,


Ended March 31,




2019(a)


2018


2019(a)


2018

Revenues










Nightclubs


$  37,047


$  35,443


$  74,775


$  70,661


Bombshells


7,527


5,602


13,540


11,430


Other


252


181


534


347




$  44,826


$  41,226


$  88,849


$  82,438











Income (loss) from operations










Nightclubs


$  15,078


$  11,880


$  30,465


$  25,251


Bombshells


738


965


857


1,856


Other


(176)


(82)


(295)


(219)


General corporate


(4,474)


(4,532)


(8,729)


(9,517)




$  11,166


$    8,231


$  22,298


$  17,371



(a)

The unaudited schedule of Segment Information for the three and six months ended March 31, 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 March 31, 2019(a)


For the Three Months Ended March 31, 2018



Nightclubs


Bombshells


Other


Corporate


Total


Nightclubs


Bombshells


Other


Corporate


Total

Income (loss) from operations


$  15,078


$        738


$ (176)


$ (4,474)


$  11,166


$  11,880


$        965


$   (82)


$ (4,532)


$    8,231

Amortization of intangibles


-


-


-


153


153


-


-


-


48


48

Settlement of lawsuits


84


-


-


-


84


573


200


-


-


773

Impairment of assets


-


-


-


-


-


-


-


-


1,550


1,550

Loss (gain) on sale of assets


(1,000)


1


5


(71)


(1,065)


-


-


-


(18)


(18)

Gain on insurance


-


-


-


-


-


-


-


-


-


-

Non-GAAP operating income (loss)


$  14,162


$        739


$ (171)


$ (4,392)


$  10,338


$  12,453


$    1,165


$   (82)


$ (2,952)


$  10,584






















GAAP operating margin


40.7%


9.8%


-69.8%


-10.0%


24.9%


33.5%


17.2%


-45.3%


-11.0%


20.0%

Non-GAAP operating margin


38.2%


9.8%


-67.9%


-9.8%


23.1%


35.1%


20.8%


-45.3%


-7.2%


25.7%
























For the Six Months Ended March 31, 2019(a)


For the Six Months Ended March 31, 2018



Nightclubs


Bombshells


Other


Corporate


Total


Nightclubs


Bombshells


Other


Corporate


Total

Income (loss) from operations


$  30,465


$        857


$ (295)


$ (8,729)


$  22,298


$  25,251


$    1,856


$ (219)


$ (9,517)


$  17,371

Amortization of intangibles


-


-


-


309


309


-


-


-


96


96

Settlement of lawsuits


129


3


-


12


144


600


200


-


-


800

Impairment of assets


-


-


-


-


-


-


-


-


1,550


1,550

Loss (gain) on sale of assets


(2,152)


1


-


(71)


(2,222)


-


-


-


64


64

Gain on insurance


-


-


-


-


-


-


-


-


(20)


(20)

Non-GAAP operating income (loss)


$  28,442


$        861


$ (295)


$ (8,479)


$  20,529


$  25,851


$    2,056


$ (219)


$ (7,827)


$  19,861






















GAAP operating margin


40.7%


6.3%


-55.2%


-9.8%


25.1%


35.7%


16.2%


-63.1%


-11.5%


21.1%

Non-GAAP operating margin


38.0%


6.4%


-55.2%


-9.5%


23.1%


36.6%


18.0%


-63.1%


-9.5%


24.1%



(a)

The condensed schedule of Non-GAAP Financial Segment Information for the three and six months ended March 31, 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 Six Months Ended





March 31, 2019(a)


March 31, 2018


March 31, 2019(a)


March 31, 2018

CASH FLOWS FROM OPERATING ACTIVITIES









Net income


$                6,743


$           4,694


$             13,147


$        19,049

Adjustments to reconcile net income to net cash provided by operating activities:










Depreciation and amortization


2,200


1,899


4,253


3,808


Deferred tax expense (credit)


673


38


1,131


(9,659)


Loss (gain) on sale of assets


(1,021)


-


(2,197)


140


Unrealized loss on equity securities


(77)


-


370


-


Amortization of debt discount and issuance costs


107


60


202


384


Deferred rent


47


74


189


149


Impairment of assets


-


1,550


-


1,550


Gain on insurance settlements


-


-


-


(20)


Debt prepayment penalty


-


-


-


543


Changes in operating assets and liabilities:











Accounts receivable


4


(1,107)


1,727


(2,033)



Inventories


(19)


(13)


(182)


(283)



Prepaid expenses and other assets


1,611


(340)


3,550


704



Accounts payable and accrued liabilities


(749)


(923)


(1,219)


(255)


Net cash provided by operating activities


9,519


5,932


20,971


14,077

CASH FLOWS FROM INVESTING ACTIVITIES









Proceeds from sale of assets


1,621


-


2,866


632

Proceeds from insurance


-


-


-


20

Proceeds from notes receivable


36


40


68


68

Issuance of note receivable


(420)


-


(420)


-

Additions to property and equipment


(6,607)


(6,242)


(13,902)


(9,011)

Acquisition of businesses, net of cash acquired


-


-


(13,500)


-


Net cash used in investing activities


(5,370)


(6,202)


(24,888)


(8,291)

CASH FLOWS FROM FINANCING ACTIVITIES









Proceeds from long-term debt


4,644


3,533


10,296


62,453

Payments on long-term debt


(8,008)


(2,262)


(13,287)


(63,518)

Debt prepayment penalty


-


-


-


(543)

Purchase of treasury stock


(1,606)


-


(1,961)


-

Payment of dividends


(291)


(291)


(582)


(583)

Payment of loan origination costs


(20)


(110)


(20)


(909)

Distribution to noncontrolling interests


-


(54)


-


(108)


Net cash provided by (used in) financing activities


(5,281)


816


(5,554)


(3,208)

NET INCREASE (DECREASE) IN CASH AND CASH









EQUIVALENTS


(1,132)


546


(9,471)


2,578

CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD


9,387


11,954


17,726


9,922

CASH AND CASH EQUIVALENTS AT END OF PERIOD


$                8,255


$        12,500


$                8,255


$        12,500



(a)

The unaudited condensed consolidated Statements of Cash Flows for the three and six months ended March 31, 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, except per share data)














March 31,


September 30,






2019(a)


2018

ASSETS





Current assets






Cash and cash equivalents


$      8,255


$       17,726


Accounts receivable, net


5,579


7,320


Inventories


2,597


2,353


Prepaid insurance


2,097


4,910


Other current assets


1,521


1,591


Assets held for sale


668


2,902



Total current assets


20,717


36,802

Property and equipment, net


191,966


172,403

Notes receivable


5,001


2,874

Goodwill


55,271


43,591

Intangibles, net


76,441


71,532

Other assets


1,477


2,530




Total assets


$  350,873


$     329,732









LIABILITIES AND STOCKHOLDERS' EQUITY





Current liabilities






Accounts payable


$      3,632


$         2,825


Accrued liabilities


9,911


11,973


Current portion of long-term debt


10,447


19,047



Total current liabilities


23,990


33,845

Deferred tax liability, net


21,970


19,552

Long-term debt, net of current portion


139,371


121,580

Other long-term liabilities


1,606


1,423



Total liabilities


186,937


176,400









Commitments and contingencies













Stockholders' equity






Preferred stock


-


-


Common stock


96


97


Additional paid-in capital


62,252


64,212


Retained earnings


101,623


88,906


Accumulated other comprehensive income


-


220



Total RCIHH stockholders' equity


163,971


153,435


Noncontrolling interests


(35)


(103)



Total stockholders' equity


163,936


153,332




Total liabilities and stockholders' equity


$  350,873


$     329,732



(a)

 The unaudited condensed consolidated Balance Sheet at March 31, 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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