Company Quick10K Filing
RCI Hospitality
Price17.53 EPS2
Shares10 P/E10
MCap170 P/FCF5
Net Debt-11 EBIT24
TEV159 TEV/EBIT7
TTM 2019-06-30, in MM, except price, ratios
10-Q 2020-06-30 Filed 2020-08-10
10-Q 2020-03-31 Filed 2020-05-11
10-Q 2019-12-31 Filed 2020-02-27
10-K 2019-09-30 Filed 2020-02-13
10-Q 2019-06-30 Filed 2019-09-24
10-Q 2019-03-31 Filed 2019-09-24
10-Q 2018-12-31 Filed 2019-02-11
10-K 2018-09-30 Filed 2018-12-31
10-Q 2018-06-30 Filed 2018-08-09
10-Q 2018-03-31 Filed 2018-05-10
10-Q 2017-12-31 Filed 2018-03-07
10-K 2017-09-30 Filed 2018-02-14
10-Q 2017-06-30 Filed 2017-08-09
10-Q 2017-03-31 Filed 2017-05-09
10-Q 2016-12-31 Filed 2017-02-09
10-K 2016-09-30 Filed 2016-12-13
10-Q 2016-06-30 Filed 2016-08-04
10-Q 2016-03-31 Filed 2016-05-10
10-Q 2015-12-31 Filed 2016-02-09
10-K 2015-09-30 Filed 2015-12-14
10-Q 2015-06-30 Filed 2015-08-10
10-Q 2015-03-31 Filed 2015-05-11
10-Q 2014-12-31 Filed 2015-02-09
10-K 2014-09-30 Filed 2014-12-15
10-Q 2014-06-30 Filed 2014-08-11
10-Q 2014-03-31 Filed 2014-05-12
10-Q 2013-12-31 Filed 2014-02-10
10-K 2013-09-30 Filed 2013-12-16
10-Q 2013-06-30 Filed 2013-08-08
10-Q 2013-03-31 Filed 2013-05-09
10-Q 2012-12-31 Filed 2013-02-11
10-K 2012-09-30 Filed 2012-12-14
10-Q 2012-06-30 Filed 2012-08-09
10-Q 2012-03-31 Filed 2012-05-10
10-Q 2011-12-31 Filed 2012-02-07
10-K 2011-09-30 Filed 2011-12-14
10-Q 2011-06-30 Filed 2011-08-09
10-Q 2011-03-31 Filed 2011-05-10
10-Q 2010-12-31 Filed 2011-02-09
10-K 2010-09-30 Filed 2010-12-14
10-Q 2010-06-30 Filed 2010-08-16
10-Q 2010-03-31 Filed 2010-05-11
10-Q 2009-12-31 Filed 2010-02-16
8-K 2020-09-04 Earnings, Regulation FD, Exhibits
8-K 2020-08-10 Earnings, Exhibits
8-K 2020-07-09 Earnings, Exhibits
8-K 2020-04-09
8-K 2020-03-02
8-K 2020-02-27
8-K 2020-02-13
8-K 2020-02-13
8-K 2020-01-09
8-K 2019-12-19
8-K 2019-12-16
8-K 2019-12-10
8-K 2019-10-03
8-K 2019-09-30
8-K 2019-09-24
8-K 2019-08-12
8-K 2019-08-12
8-K 2019-08-08
8-K 2019-07-25
8-K 2019-07-22
8-K 2019-07-12
8-K 2019-07-09
8-K 2019-05-17
8-K 2019-05-10
8-K 2019-02-11
8-K 2019-01-10
8-K 2018-12-31
8-K 2018-12-04
8-K 2018-10-09
8-K 2018-08-29
8-K 2018-08-09
8-K 2018-07-10
8-K 2018-05-15
8-K 2018-05-10
8-K 2018-05-01
8-K 2018-04-10
8-K 2018-03-28
8-K 2018-03-08
8-K 2018-03-07
8-K 2018-03-02
8-K 2018-02-16
8-K 2018-02-14
8-K 2018-01-09
8-K 2018-01-02
8-K 2017-12-29

RICK 10Q Quarterly Report

Part I Financial Information
Item 1. Financial Statements.
Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations.
Item 3. Quantitative and Qualitative Disclosures About Market Risk.
Item 4. Controls and Procedures.
Part II - Other Information
Item 1. Legal Proceedings.
Item 1A. Risk Factors.
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.
Item 6. Exhibits.
EX-31.1 ex31-1.htm
EX-31.2 ex31-2.htm
EX-32 ex-32.htm

RCI Hospitality Earnings 2020-06-30

Balance SheetIncome StatementCash Flow
3552842131427102012201420172020
Assets, Equity
503928187-22012201420172020
Rev, G Profit, Net Income
1581-6-13-202012201420172020
Ops, Inv, Fin

0000935419 false Accelerated Filer true --09-30 Q3 2020 false 0000935419 2019-10-01 2020-06-30 0000935419 2020-08-07 0000935419 2020-06-30 0000935419 2019-09-30 0000935419 2020-04-01 2020-06-30 0000935419 2019-04-01 2019-06-30 0000935419 2018-10-01 2019-06-30 0000935419 RICK:SalesofAlcoholicBeveragesMember 2020-04-01 2020-06-30 0000935419 RICK:SalesofAlcoholicBeveragesMember 2019-04-01 2019-06-30 0000935419 RICK:SalesofAlcoholicBeveragesMember 2019-10-01 2020-06-30 0000935419 RICK:SalesofAlcoholicBeveragesMember 2018-10-01 2019-06-30 0000935419 us-gaap:FoodAndBeverageMember 2020-04-01 2020-06-30 0000935419 us-gaap:FoodAndBeverageMember 2019-04-01 2019-06-30 0000935419 us-gaap:FoodAndBeverageMember 2019-10-01 2020-06-30 0000935419 us-gaap:FoodAndBeverageMember 2018-10-01 2019-06-30 0000935419 us-gaap:ServiceMember 2020-04-01 2020-06-30 0000935419 us-gaap:ServiceMember 2019-04-01 2019-06-30 0000935419 us-gaap:ServiceMember 2019-10-01 2020-06-30 0000935419 us-gaap:ServiceMember 2018-10-01 2019-06-30 0000935419 RICK:OtherMember 2020-04-01 2020-06-30 0000935419 RICK:OtherMember 2019-04-01 2019-06-30 0000935419 RICK:OtherMember 2019-10-01 2020-06-30 0000935419 RICK:OtherMember 2018-10-01 2019-06-30 0000935419 RICK:ServiceandOtherMember 2020-04-01 2020-06-30 0000935419 RICK:ServiceandOtherMember 2019-04-01 2019-06-30 0000935419 RICK:ServiceandOtherMember 2019-10-01 2020-06-30 0000935419 RICK:ServiceandOtherMember 2018-10-01 2019-06-30 0000935419 us-gaap:CommonStockMember 2019-09-30 0000935419 us-gaap:AdditionalPaidInCapitalMember 2019-09-30 0000935419 us-gaap:RetainedEarningsMember 2019-09-30 0000935419 us-gaap:AccumulatedOtherComprehensiveIncomeMember 2019-09-30 0000935419 us-gaap:TreasuryStockMember 2019-09-30 0000935419 us-gaap:NoncontrollingInterestMember 2019-09-30 0000935419 us-gaap:CommonStockMember 2019-10-01 2019-12-31 0000935419 us-gaap:AdditionalPaidInCapitalMember 2019-10-01 2019-12-31 0000935419 us-gaap:RetainedEarningsMember 2019-10-01 2019-12-31 0000935419 us-gaap:AccumulatedOtherComprehensiveIncomeMember 2019-10-01 2019-12-31 0000935419 us-gaap:TreasuryStockMember 2019-10-01 2019-12-31 0000935419 us-gaap:NoncontrollingInterestMember 2019-10-01 2019-12-31 0000935419 2019-10-01 2019-12-31 0000935419 us-gaap:CommonStockMember 2019-12-31 0000935419 us-gaap:AdditionalPaidInCapitalMember 2019-12-31 0000935419 us-gaap:RetainedEarningsMember 2019-12-31 0000935419 us-gaap:AccumulatedOtherComprehensiveIncomeMember 2019-12-31 0000935419 us-gaap:TreasuryStockMember 2019-12-31 0000935419 us-gaap:NoncontrollingInterestMember 2019-12-31 0000935419 2019-12-31 0000935419 us-gaap:CommonStockMember 2020-01-01 2020-03-31 0000935419 us-gaap:AdditionalPaidInCapitalMember 2020-01-01 2020-03-31 0000935419 us-gaap:RetainedEarningsMember 2020-01-01 2020-03-31 0000935419 us-gaap:AccumulatedOtherComprehensiveIncomeMember 2020-01-01 2020-03-31 0000935419 us-gaap:TreasuryStockMember 2020-01-01 2020-03-31 0000935419 us-gaap:NoncontrollingInterestMember 2020-01-01 2020-03-31 0000935419 2020-01-01 2020-03-31 0000935419 us-gaap:CommonStockMember 2020-03-31 0000935419 us-gaap:AdditionalPaidInCapitalMember 2020-03-31 0000935419 us-gaap:RetainedEarningsMember 2020-03-31 0000935419 us-gaap:AccumulatedOtherComprehensiveIncomeMember 2020-03-31 0000935419 us-gaap:TreasuryStockMember 2020-03-31 0000935419 us-gaap:NoncontrollingInterestMember 2020-03-31 0000935419 2020-03-31 0000935419 us-gaap:CommonStockMember 2020-04-01 2020-06-30 0000935419 us-gaap:AdditionalPaidInCapitalMember 2020-04-01 2020-06-30 0000935419 us-gaap:RetainedEarningsMember 2020-04-01 2020-06-30 0000935419 us-gaap:AccumulatedOtherComprehensiveIncomeMember 2020-04-01 2020-06-30 0000935419 us-gaap:TreasuryStockMember 2020-04-01 2020-06-30 0000935419 us-gaap:NoncontrollingInterestMember 2020-04-01 2020-06-30 0000935419 us-gaap:CommonStockMember 2020-06-30 0000935419 us-gaap:AdditionalPaidInCapitalMember 2020-06-30 0000935419 us-gaap:RetainedEarningsMember 2020-06-30 0000935419 us-gaap:AccumulatedOtherComprehensiveIncomeMember 2020-06-30 0000935419 us-gaap:TreasuryStockMember 2020-06-30 0000935419 us-gaap:NoncontrollingInterestMember 2020-06-30 0000935419 us-gaap:CommonStockMember 2018-09-30 0000935419 us-gaap:AdditionalPaidInCapitalMember 2018-09-30 0000935419 us-gaap:RetainedEarningsMember 2018-09-30 0000935419 us-gaap:AccumulatedOtherComprehensiveIncomeMember 2018-09-30 0000935419 us-gaap:TreasuryStockMember 2018-09-30 0000935419 us-gaap:NoncontrollingInterestMember 2018-09-30 0000935419 2018-09-30 0000935419 us-gaap:CommonStockMember 2018-10-01 2018-12-31 0000935419 us-gaap:AdditionalPaidInCapitalMember 2018-10-01 2018-12-31 0000935419 us-gaap:RetainedEarningsMember 2018-10-01 2018-12-31 0000935419 us-gaap:AccumulatedOtherComprehensiveIncomeMember 2018-10-01 2018-12-31 0000935419 us-gaap:TreasuryStockMember 2018-10-01 2018-12-31 0000935419 us-gaap:NoncontrollingInterestMember 2018-10-01 2018-12-31 0000935419 2018-10-01 2018-12-31 0000935419 us-gaap:CommonStockMember 2018-12-31 0000935419 us-gaap:AdditionalPaidInCapitalMember 2018-12-31 0000935419 us-gaap:RetainedEarningsMember 2018-12-31 0000935419 us-gaap:AccumulatedOtherComprehensiveIncomeMember 2018-12-31 0000935419 us-gaap:TreasuryStockMember 2018-12-31 0000935419 us-gaap:NoncontrollingInterestMember 2018-12-31 0000935419 2018-12-31 0000935419 us-gaap:CommonStockMember 2019-01-01 2019-03-31 0000935419 us-gaap:AdditionalPaidInCapitalMember 2019-01-01 2019-03-31 0000935419 us-gaap:RetainedEarningsMember 2019-01-01 2019-03-31 0000935419 us-gaap:AccumulatedOtherComprehensiveIncomeMember 2019-01-01 2019-03-31 0000935419 us-gaap:TreasuryStockMember 2019-01-01 2019-03-31 0000935419 us-gaap:NoncontrollingInterestMember 2019-01-01 2019-03-31 0000935419 2019-01-01 2019-03-31 0000935419 us-gaap:CommonStockMember 2019-03-31 0000935419 us-gaap:AdditionalPaidInCapitalMember 2019-03-31 0000935419 us-gaap:RetainedEarningsMember 2019-03-31 0000935419 us-gaap:AccumulatedOtherComprehensiveIncomeMember 2019-03-31 0000935419 us-gaap:TreasuryStockMember 2019-03-31 0000935419 us-gaap:NoncontrollingInterestMember 2019-03-31 0000935419 2019-03-31 0000935419 us-gaap:CommonStockMember 2019-04-01 2019-06-30 0000935419 us-gaap:AdditionalPaidInCapitalMember 2019-04-01 2019-06-30 0000935419 us-gaap:RetainedEarningsMember 2019-04-01 2019-06-30 0000935419 us-gaap:AccumulatedOtherComprehensiveIncomeMember 2019-04-01 2019-06-30 0000935419 us-gaap:TreasuryStockMember 2019-04-01 2019-06-30 0000935419 us-gaap:NoncontrollingInterestMember 2019-04-01 2019-06-30 0000935419 us-gaap:CommonStockMember 2019-06-30 0000935419 us-gaap:AdditionalPaidInCapitalMember 2019-06-30 0000935419 us-gaap:RetainedEarningsMember 2019-06-30 0000935419 us-gaap:AccumulatedOtherComprehensiveIncomeMember 2019-06-30 0000935419 us-gaap:TreasuryStockMember 2019-06-30 0000935419 us-gaap:NoncontrollingInterestMember 2019-06-30 0000935419 2019-06-30 0000935419 us-gaap:AccountingStandardsUpdate201602Member 2019-10-02 0000935419 RICK:CaresActMember RICK:TenOfOurRestaurantMember srt:MinimumMember 2020-05-07 2020-05-08 0000935419 RICK:CaresActMember RICK:TenOfOurRestaurantMember srt:MaximumMember 2020-05-07 2020-05-08 0000935419 RICK:CaresActMember RICK:TenOfOurRestaurantMember 2020-05-07 2020-05-08 0000935419 RICK:CaresActMember RICK:OurSharedServicesMember 2020-05-07 2020-05-08 0000935419 RICK:CaresActMember RICK:OneOfOurLoungesMember 2020-05-07 2020-05-08 0000935419 RICK:NightclubsMember RICK:SalesofAlcoholicBeveragesMember 2020-04-01 2020-06-30 0000935419 RICK:BombshellsMember RICK:SalesofAlcoholicBeveragesMember 2020-04-01 2020-06-30 0000935419 RICK:OtherMember RICK:SalesofAlcoholicBeveragesMember 2020-04-01 2020-06-30 0000935419 RICK:NightclubsMember RICK:SalesofAlcoholicBeveragesMember 2019-04-01 2019-06-30 0000935419 RICK:BombshellsMember RICK:SalesofAlcoholicBeveragesMember 2019-04-01 2019-06-30 0000935419 RICK:OtherMember RICK:SalesofAlcoholicBeveragesMember 2019-04-01 2019-06-30 0000935419 RICK:NightclubsMember us-gaap:FoodAndBeverageMember 2020-04-01 2020-06-30 0000935419 RICK:BombshellsMember us-gaap:FoodAndBeverageMember 2020-04-01 2020-06-30 0000935419 RICK:OtherMember us-gaap:FoodAndBeverageMember 2020-04-01 2020-06-30 0000935419 RICK:NightclubsMember us-gaap:FoodAndBeverageMember 2019-04-01 2019-06-30 0000935419 RICK:BombshellsMember us-gaap:FoodAndBeverageMember 2019-04-01 2019-06-30 0000935419 RICK:OtherMember us-gaap:FoodAndBeverageMember 2019-04-01 2019-06-30 0000935419 RICK:NightclubsMember us-gaap:ServiceMember 2020-04-01 2020-06-30 0000935419 RICK:BombshellsMember us-gaap:ServiceMember 2020-04-01 2020-06-30 0000935419 RICK:OtherMember us-gaap:ServiceMember 2020-04-01 2020-06-30 0000935419 RICK:NightclubsMember us-gaap:ServiceMember 2019-04-01 2019-06-30 0000935419 RICK:BombshellsMember us-gaap:ServiceMember 2019-04-01 2019-06-30 0000935419 RICK:OtherMember us-gaap:ServiceMember 2019-04-01 2019-06-30 0000935419 RICK:NightclubsMember RICK:OtherRevenuesMember 2020-04-01 2020-06-30 0000935419 RICK:BombshellsMember RICK:OtherRevenuesMember 2020-04-01 2020-06-30 0000935419 RICK:OtherMember RICK:OtherRevenuesMember 2020-04-01 2020-06-30 0000935419 RICK:OtherRevenuesMember 2020-04-01 2020-06-30 0000935419 RICK:NightclubsMember RICK:OtherRevenuesMember 2019-04-01 2019-06-30 0000935419 RICK:BombshellsMember RICK:OtherRevenuesMember 2019-04-01 2019-06-30 0000935419 RICK:OtherMember RICK:OtherRevenuesMember 2019-04-01 2019-06-30 0000935419 RICK:OtherRevenuesMember 2019-04-01 2019-06-30 0000935419 RICK:NightclubsMember 2020-04-01 2020-06-30 0000935419 RICK:BombshellsMember 2020-04-01 2020-06-30 0000935419 RICK:OtherMember 2020-04-01 2020-06-30 0000935419 RICK:NightclubsMember 2019-04-01 2019-06-30 0000935419 RICK:BombshellsMember 2019-04-01 2019-06-30 0000935419 RICK:OtherMember 2019-04-01 2019-06-30 0000935419 RICK:NightclubsMember us-gaap:TransferredAtPointInTimeMember 2020-04-01 2020-06-30 0000935419 RICK:BombshellsMember us-gaap:TransferredAtPointInTimeMember 2020-04-01 2020-06-30 0000935419 RICK:OtherMember us-gaap:TransferredAtPointInTimeMember 2020-04-01 2020-06-30 0000935419 us-gaap:TransferredAtPointInTimeMember 2020-04-01 2020-06-30 0000935419 RICK:NightclubsMember us-gaap:TransferredAtPointInTimeMember 2019-04-01 2019-06-30 0000935419 RICK:BombshellsMember us-gaap:TransferredAtPointInTimeMember 2019-04-01 2019-06-30 0000935419 RICK:OtherMember us-gaap:TransferredAtPointInTimeMember 2019-04-01 2019-06-30 0000935419 us-gaap:TransferredAtPointInTimeMember 2019-04-01 2019-06-30 0000935419 RICK:NightclubsMember us-gaap:TransferredOverTimeMember 2020-04-01 2020-06-30 0000935419 RICK:BombshellsMember us-gaap:TransferredOverTimeMember 2020-04-01 2020-06-30 0000935419 RICK:OtherMember us-gaap:TransferredOverTimeMember 2020-04-01 2020-06-30 0000935419 us-gaap:TransferredOverTimeMember 2020-04-01 2020-06-30 0000935419 RICK:NightclubsMember us-gaap:TransferredOverTimeMember 2019-04-01 2019-06-30 0000935419 RICK:BombshellsMember us-gaap:TransferredOverTimeMember 2019-04-01 2019-06-30 0000935419 RICK:OtherMember us-gaap:TransferredOverTimeMember 2019-04-01 2019-06-30 0000935419 us-gaap:TransferredOverTimeMember 2019-04-01 2019-06-30 0000935419 RICK:NightclubsMember RICK:SalesofAlcoholicBeveragesMember 2019-10-01 2020-06-30 0000935419 RICK:BombshellsMember RICK:SalesofAlcoholicBeveragesMember 2019-10-01 2020-06-30 0000935419 RICK:OtherMember RICK:SalesofAlcoholicBeveragesMember 2019-10-01 2020-06-30 0000935419 RICK:NightclubsMember RICK:SalesofAlcoholicBeveragesMember 2018-10-01 2019-06-30 0000935419 RICK:BombshellsMember RICK:SalesofAlcoholicBeveragesMember 2018-10-01 2019-06-30 0000935419 RICK:OtherMember RICK:SalesofAlcoholicBeveragesMember 2018-10-01 2019-06-30 0000935419 RICK:NightclubsMember us-gaap:FoodAndBeverageMember 2019-10-01 2020-06-30 0000935419 RICK:BombshellsMember us-gaap:FoodAndBeverageMember 2019-10-01 2020-06-30 0000935419 RICK:OtherMember us-gaap:FoodAndBeverageMember 2019-10-01 2020-06-30 0000935419 RICK:NightclubsMember us-gaap:FoodAndBeverageMember 2018-10-01 2019-06-30 0000935419 RICK:BombshellsMember us-gaap:FoodAndBeverageMember 2018-10-01 2019-06-30 0000935419 RICK:OtherMember us-gaap:FoodAndBeverageMember 2018-10-01 2019-06-30 0000935419 RICK:NightclubsMember us-gaap:ServiceMember 2019-10-01 2020-06-30 0000935419 RICK:BombshellsMember us-gaap:ServiceMember 2019-10-01 2020-06-30 0000935419 RICK:OtherMember us-gaap:ServiceMember 2019-10-01 2020-06-30 0000935419 RICK:NightclubsMember us-gaap:ServiceMember 2018-10-01 2019-06-30 0000935419 RICK:BombshellsMember us-gaap:ServiceMember 2018-10-01 2019-06-30 0000935419 RICK:OtherMember us-gaap:ServiceMember 2018-10-01 2019-06-30 0000935419 RICK:NightclubsMember RICK:OtherRevenuesMember 2019-10-01 2020-06-30 0000935419 RICK:BombshellsMember RICK:OtherRevenuesMember 2019-10-01 2020-06-30 0000935419 RICK:OtherMember RICK:OtherRevenuesMember 2019-10-01 2020-06-30 0000935419 RICK:OtherRevenuesMember 2019-10-01 2020-06-30 0000935419 RICK:NightclubsMember RICK:OtherRevenuesMember 2018-10-01 2019-06-30 0000935419 RICK:BombshellsMember RICK:OtherRevenuesMember 2018-10-01 2019-06-30 0000935419 RICK:OtherMember RICK:OtherRevenuesMember 2018-10-01 2019-06-30 0000935419 RICK:OtherRevenuesMember 2018-10-01 2019-06-30 0000935419 RICK:NightclubsMember 2019-10-01 2020-06-30 0000935419 RICK:BombshellsMember 2019-10-01 2020-06-30 0000935419 RICK:OtherMember 2019-10-01 2020-06-30 0000935419 RICK:NightclubsMember 2018-10-01 2019-06-30 0000935419 RICK:BombshellsMember 2018-10-01 2019-06-30 0000935419 RICK:OtherMember 2018-10-01 2019-06-30 0000935419 RICK:NightclubsMember us-gaap:TransferredAtPointInTimeMember 2019-10-01 2020-06-30 0000935419 RICK:BombshellsMember us-gaap:TransferredAtPointInTimeMember 2019-10-01 2020-06-30 0000935419 RICK:OtherMember us-gaap:TransferredAtPointInTimeMember 2019-10-01 2020-06-30 0000935419 us-gaap:TransferredAtPointInTimeMember 2019-10-01 2020-06-30 0000935419 RICK:NightclubsMember us-gaap:TransferredAtPointInTimeMember 2018-10-01 2019-06-30 0000935419 RICK:BombshellsMember us-gaap:TransferredAtPointInTimeMember 2018-10-01 2019-06-30 0000935419 RICK:OtherMember us-gaap:TransferredAtPointInTimeMember 2018-10-01 2019-06-30 0000935419 us-gaap:TransferredAtPointInTimeMember 2018-10-01 2019-06-30 0000935419 RICK:NightclubsMember us-gaap:TransferredOverTimeMember 2019-10-01 2020-06-30 0000935419 RICK:BombshellsMember us-gaap:TransferredOverTimeMember 2019-10-01 2020-06-30 0000935419 RICK:OtherMember us-gaap:TransferredOverTimeMember 2019-10-01 2020-06-30 0000935419 us-gaap:TransferredOverTimeMember 2019-10-01 2020-06-30 0000935419 RICK:NightclubsMember us-gaap:TransferredOverTimeMember 2018-10-01 2019-06-30 0000935419 RICK:BombshellsMember us-gaap:TransferredOverTimeMember 2018-10-01 2019-06-30 0000935419 RICK:OtherMember us-gaap:TransferredOverTimeMember 2018-10-01 2019-06-30 0000935419 us-gaap:TransferredOverTimeMember 2018-10-01 2019-06-30 0000935419 RICK:AdRevenueMember 2019-09-30 0000935419 RICK:AdRevenueMember 2019-10-01 2020-06-30 0000935419 RICK:AdRevenueMember 2020-06-30 0000935419 RICK:ExpoRevenueMember 2019-09-30 0000935419 RICK:ExpoRevenueMember 2019-10-01 2020-06-30 0000935419 RICK:ExpoRevenueMember 2020-06-30 0000935419 RICK:OtherMember 2019-09-30 0000935419 RICK:OtherMember 2020-06-30 0000935419 RICK:TwoRealEstatePropertiesForSaleMember 2018-10-01 2019-09-30 0000935419 RICK:RealEstatePropertiesForSaleMember 2019-10-01 2019-12-31 0000935419 RICK:HeldForSalePropertyMember 2020-04-01 2020-06-30 0000935419 RICK:OneRealEstatePropertyForSaleMember 2020-06-30 0000935419 RICK:ScarlettsAcquisitionMember 2019-12-31 0000935419 2019-12-01 2019-12-31 0000935419 RICK:PrivateLenderMember 2020-02-29 0000935419 RICK:PrivateLenderMember 2020-02-01 2020-02-29 0000935419 RICK:PrivateLenderMember RICK:AugustTwoThousandAndTwentyOneMember 2020-02-29 0000935419 RICK:DecemberTwoThousandSeventeenRefinancingLoanMember 2020-02-29 0000935419 RICK:DecemberTwoThousandSeventeenRefinancingLoanMember 2020-06-30 0000935419 RICK:DecemberTwoThousandSeventeenRefinancingLoanMember 2020-02-01 2020-02-29 0000935419 RICK:DecemberTwoThousandSeventeenRefinancingLoanMember RICK:OctoberTwoThousandAndTwentyOneMember 2020-02-29 0000935419 srt:ScenarioForecastMember 2020-11-01 0000935419 2020-05-01 0000935419 2020-04-29 2020-05-01 0000935419 RICK:NewDebtMember RICK:LenderMember 2020-04-29 2020-05-01 0000935419 RICK:NewDebtMember RICK:LenderMember srt:ScenarioForecastMember 2020-11-01 0000935419 RICK:JuneThirtyTwoThousandTwentyOneMember 2020-06-30 0000935419 RICK:JuneThirtyTwoThousandTwentyTwoMember 2020-06-30 0000935419 RICK:JuneThirtyTwoThousandTwentyThreeMember 2020-06-30 0000935419 RICK:JuneThirtyTwoThousandTwentyFourMember 2020-06-30 0000935419 RICK:JuneThirtyTwoThousandTwentyFiveMember 2020-06-30 0000935419 RICK:JuneThirtyTwoThousandTwentyFiveAndTherafterMember 2020-06-30 0000935419 RICK:PPPLoansMember 2020-06-30 0000935419 RICK:PPPLoansMember RICK:DecemberSixTwoThousandTwentyMember 2020-06-30 0000935419 RICK:PPPLoansMember RICK:DecemberSixTwoThousandTwentyMember 2020-01-01 2020-06-30 0000935419 2019-01-01 2019-06-30 0000935419 RICK:BoardOfDirectorsMember 2020-02-05 2020-02-06 0000935419 us-gaap:SubsequentEventMember 2020-07-06 2020-07-07 0000935419 2020-01-01 2020-06-30 0000935419 2015-06-01 2015-06-30 0000935419 2015-06-30 0000935419 2015-04-01 2015-06-30 0000935419 RICK:SettlementAgreementMember 2017-03-01 2017-03-31 0000935419 RICK:IndemnityInsuranceCorporationMember 2019-10-01 2020-06-30 0000935419 RICK:JAIPhoenixMember RICK:CompensatoryDamagesMember 2017-04-01 2017-04-30 0000935419 RICK:JAIPhoenixMember RICK:PunitiveDamagesMember 2017-04-01 2017-04-30 0000935419 RICK:SettlementOfLawsuitsMember 2020-06-30 0000935419 RICK:SettlementOfLawsuitsMember 2019-09-30 0000935419 RICK:DefinitiveAgreementsMember 2019-11-04 2019-11-05 0000935419 RICK:GeneralCorporateMember 2020-04-01 2020-06-30 0000935419 RICK:GeneralCorporateMember 2019-04-01 2019-06-30 0000935419 RICK:GeneralCorporateMember 2019-10-01 2020-06-30 0000935419 RICK:GeneralCorporateMember 2018-10-01 2019-06-30 0000935419 RICK:NightclubsMember 2020-06-30 0000935419 RICK:NightclubsMember 2019-09-30 0000935419 RICK:BombshellsMember 2020-06-30 0000935419 RICK:BombshellsMember 2019-09-30 0000935419 RICK:OtherMember 2020-06-30 0000935419 RICK:OtherMember 2019-09-30 0000935419 RICK:GeneralCorporateMember 2020-06-30 0000935419 RICK:GeneralCorporateMember 2019-09-30 0000935419 2018-11-01 0000935419 RICK:EdAnakarMember 2018-11-01 0000935419 RICK:SherwoodForestCreationsLLCMember 2020-04-01 2020-06-30 0000935419 RICK:SherwoodForestCreationsLLCMember 2019-10-01 2020-06-30 0000935419 RICK:SherwoodForestCreationsLLCMember 2019-04-01 2019-06-30 0000935419 RICK:SherwoodForestCreationsLLCMember 2018-10-01 2019-06-30 0000935419 RICK:SherwoodForestCreationsLLCMember 2020-06-30 0000935419 RICK:SherwoodForestCreationsLLCMember 2019-09-30 0000935419 RICK:TWMechanicalLLCMember RICK:ThirdPartyGeneralContractorMember 2020-04-01 2020-06-30 0000935419 RICK:TWMechanicalLLCMember RICK:ThirdPartyGeneralContractorMember 2019-10-01 2020-06-30 0000935419 RICK:TWMechanicalLLCMember RICK:ThirdPartyGeneralContractorMember 2019-04-01 2019-06-30 0000935419 RICK:TWMechanicalLLCMember RICK:ThirdPartyGeneralContractorMember 2018-10-01 2019-06-30 0000935419 RICK:TWMechanicalLLCMember 2020-04-01 2020-06-30 0000935419 RICK:TWMechanicalLLCMember 2019-10-01 2020-06-30 0000935419 RICK:TWMechanicalLLCMember 2019-04-01 2019-06-30 0000935419 RICK:TWMechanicalLLCMember 2018-10-01 2019-06-30 0000935419 RICK:TWMechanicalLLCMember 2020-06-30 0000935419 RICK:TWMechanicalLLCMember 2019-09-30 0000935419 srt:ChiefExecutiveOfficerMember 2020-04-01 2020-06-30 0000935419 srt:ChiefExecutiveOfficerMember 2019-10-01 2020-06-30 0000935419 srt:ChiefExecutiveOfficerMember 2019-04-01 2019-06-30 0000935419 srt:ChiefExecutiveOfficerMember 2018-10-01 2019-06-30 0000935419 RICK:PrincipalPaymentsMember 2020-06-30 0000935419 RICK:InterestPaymentsMember 2020-06-30 0000935419 us-gaap:EquipmentMember 2020-04-01 2020-06-30 0000935419 us-gaap:EquipmentMember 2019-10-01 2020-06-30 iso4217:USD xbrli:shares iso4217:USD xbrli:shares xbrli:pure RICK:Integer

 

 

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

FORM 10-Q

 

QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

 

For the quarterly period ended June 30, 2020

 

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

 

Commission File Number: 001-13992

 

RCI HOSPITALITY HOLDINGS, INC.

(Exact name of registrant as specified in its charter)

 

Texas   76-0458229

(State or other jurisdiction of

incorporation or organization)

 

(I.R.S. Employer

Identification No.)

 

10737 Cutten Road

Houston, Texas 77066

(Address of principal executive offices) (Zip Code)

 

(281) 397-6730

(Registrant’s telephone number, including area code)

 

Securities registered pursuant to Section 12(b) of the Act:

 

Title of each class   Trading Symbol(s)   Name of each exchange on which registered
Common stock, $0.01 par value   RICK   The Nasdaq Global Market

 

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

 

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

 

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. Large accelerated filer ☐ Accelerated filer ☒ Non-accelerated filer ☐ Smaller reporting company ☐ Emerging growth company

 

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. ☐

 

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No

 

As of August 7, 2020, 9,125,281 shares of the registrant’s common stock were outstanding.

 

 

 

 

 

 

NOTE ABOUT FORWARD-LOOKING STATEMENTS

 

This Quarterly Report on Form 10-Q contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These statements include, among other things, statements regarding plans, objectives, goals, strategies, future events or performance and underlying assumptions and other statements, which are other than statements of historical facts. Forward-looking statements may appear throughout this report, including, without limitation, the following sections: Part I, Item 2 “Management’s Discussion and Analysis of Financial Condition and Results of Operations.” Forward-looking statements generally can be identified by words such as “anticipates,” “believes,” “estimates,” “expects,” “intends,” “plans,” “predicts,” “projects,” “will be,” “will continue,” “will likely result,” and similar expressions. These forward-looking statements are based on current expectations and assumptions that are subject to risks and uncertainties, which could cause our actual results to differ materially from those reflected in the forward-looking statements. Factors that could cause or contribute to such differences include, but are not limited to, those discussed in this Quarterly Report on Form 10-Q and those discussed in other documents we file with the Securities and Exchange Commission (“SEC”). Important factors that in our view could cause material adverse effects on our financial condition and results of operations include, but are not limited to, the risks and uncertainties associated with (i) operating and managing an adult business, (ii) the business climates in cities where it operates, (iii) the success or lack thereof in launching and building the company’s businesses, (iv) cyber security, (v) conditions relevant to real estate transactions, (vi) our ability to maintain compliance with the filing requirements of the SEC and the Nasdaq Stock Market, (vii) the impact of the COVID-19 pandemic, and (viii) numerous other factors such as laws governing the operation of adult entertainment businesses, competition and dependence on key personnel. We undertake no obligation to revise or publicly release the results of any revision to any forward-looking statements, except as required by law. Given these risks and uncertainties, readers are cautioned not to place undue reliance on such forward-looking statements.

 

As used herein, the “Company,” “we,” “our,” and similar terms include RCI Hospitality Holdings, Inc. and its subsidiaries, unless the context indicates otherwise.

 

2

 

 

RCI HOSPITALITY HOLDINGS, INC.

FORM 10-Q

TABLE OF CONTENTS

 

    Page
PART I FINANCIAL INFORMATION  
     
Item 1. Financial Statements 4
     
  Condensed Consolidated Balance Sheets as of June 30, 2020 (unaudited) and September 30, 2019 4
     
  Condensed Consolidated Statements of Operations (unaudited) for the three and nine months ended June 30, 2020 and 2019 5
     
  Condensed Consolidated Statements of Changes in Equity (unaudited) for the three and nine months ended June 30, 2020 and 2019 6
     
  Condensed Consolidated Statements of Cash Flows (unaudited) for the nine months ended June 30, 2020 and 2019 7
     
  Notes to Condensed Consolidated Financial Statements (unaudited) 8
     
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations 22
     
Item 3. Quantitative and Qualitative Disclosures about Market Risk 35
     
Item 4. Controls and Procedures 35
     
PART II OTHER INFORMATION  
     
Item 1. Legal Proceedings 36
     
Item1A. Risk Factors 36
     
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds 37
     
Item 6. Exhibits 38
     
  Signatures 39

 

3

 

 

PART I FINANCIAL INFORMATION

 

Item 1. Financial Statements.

 

RCI HOSPITALITY HOLDINGS, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(in thousands, except par value)

 

   June 30, 2020   September 30, 2019 
   (unaudited)     
ASSETS          
Current assets          
Cash and cash equivalents  $14,795   $14,097 
Accounts receivable, net   5,529    6,289 
Current portion of notes receivable   219    954 
Inventories   2,627    2,598 
Prepaid insurance   1,415    5,446 
Other current assets   1,752    2,521 
Assets held for sale   2,013    2,866 
Total current assets   28,350    34,771 
Property and equipment, net   181,960    183,956 
Operating lease right-of-use assets, net   25,962    - 
Notes receivable, net of current portion   2,896    4,211 
Goodwill   47,109    53,630 
Intangibles, net   73,224    75,951 
Other assets   873    1,118 
Total assets  $360,374   $353,637 
           
LIABILITIES AND EQUITY          
Current liabilities          
Accounts payable  $3,955   $3,810 
Accrued liabilities   10,286    14,644 
Current portion of long-term debt, net   17,249    15,754 
Current portion of operating lease liabilities   1,586    - 
Total current liabilities   33,076    34,208 
Deferred tax liability, net   20,141    21,658 
Long-term debt, net of current portion and debt discount and issuance costs   125,487    127,774 
Operating lease liabilities, net of current portion   25,863    - 
Other long-term liabilities   372    1,696 
Total liabilities   204,939    185,336 
           
Commitments and contingencies (Note 10)   -     -  
           
Equity          
Preferred stock, $0.10 par value per share; 1,000 shares authorized; none issued and outstanding   -    - 
Common stock, $0.01 par value per share; 20,000 shares authorized; 9,125 and 9,591 shares issued and outstanding as of June 30, 2020 and September 30, 2019, respectively   91    96 
Additional paid-in capital   52,829    61,312 
Retained earnings   102,837    107,049 
Total RCIHH stockholders’ equity   155,757    168,457 
Noncontrolling interests   (322)   (156)
Total equity   155,435    168,301 
Total liabilities and equity  $360,374   $353,637 

 

See accompanying notes to unaudited condensed consolidated financial statements.

 

4

 

 

RCI HOSPITALITY HOLDINGS, INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(in thousands, except per share data)

(unaudited)

 

   2020   2019   2020   2019 
   For the Three Months   For the Nine Months 
   Ended June 30,   Ended June 30, 
   2020   2019   2020   2019 
Revenues                    
Sales of alcoholic beverages  $7,623   $19,570   $45,285   $56,366 
Sales of food and merchandise   3,452    7,046    17,378    19,175 
Service revenues   2,907    17,299    34,448    51,609 
Other   739    3,112    6,430    8,726 
Total revenues   14,721    47,027    103,541    135,876 
Operating expenses                    
Cost of goods sold                    
Alcoholic beverages sold   1,245    4,015    8,826    11,541 
Food and merchandise sold   1,125    2,565    5,917    6,857 
Service and other   20    121    205    307 
Total cost of goods sold (exclusive of items shown separately below)   2,390    6,701    14,948    18,705 
Salaries and wages   5,421    13,164    30,866    37,168 
Selling, general and administrative   8,908    14,895    39,889    43,263 
Depreciation and amortization   2,235    2,465    6,696    6,718 
Other charges (gains), net   424    (172)   8,588    (2,250)
Total operating expenses   19,378    37,053    100,987    103,604 
Income (loss) from operations   (4,657)   9,974    2,554    32,272 
Other income (expenses)                    
Interest expense   (2,459)   (2,543)   (7,403)   (7,709)
Interest income   80    92    263    218 
Unrealized gain (loss) on equity securities   31    (38)   (103)   (408)
Income (loss) before income taxes   (7,005)   7,485    (4,689)   24,373 
Income tax expense (benefit)   (1,437)   1,806    (1,262)   5,547 
Net income (loss)   (5,568)   5,679    (3,427)   18,826 
Net loss (income) attributable to noncontrolling interests   94    (41)   135    (109)
Net income (loss) attributable to RCIHH common stockholders  $(5,474)  $5,638   $(3,292)  $18,717 
                     
Earnings (loss) per share                    
Basic and diluted  $(0.60)  $0.59   $(0.36)  $1.94 
                     
Weighted average number of common shares outstanding                    
Basic and diluted   9,125    9,620    9,224    9,671 
                     
Dividends per share  $0.03   $0.03   $0.10   $0.09 

 

See accompanying notes to unaudited condensed consolidated financial statements.

 

5

 

 

RCI HOSPITALITY HOLDINGS, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY

(in thousands)

(unaudited)

 

   Shares   Amt   Amt   Amt   Amt   Shares   Amt   Amt   Total 
                   Accumulated                 
   Common Stock   Additional       Other   Treasury Stock         
   Number       Paid-In   Retained   Comprehensive   Number       Noncontrolling   Total 
   of Shares   Amount   Capital   Earnings   Income   of Shares   Amount   Interests   Equity 
Balance at September 30, 2019   9,591   $96   $61,312   $107,049   $-    -   $-   $(156)  $168,301 
Purchase of treasury shares   -    -    -    -    -    (333)   (6,441)   -    (6,441)
Canceled treasury shares   (333)   (3)   (6,438)   -    -    333    6,441    -    - 
Payment of dividends   -    -    -    (279)   -    -    -    -    (279)
Payment to noncontrolling interest   -    -    -    -    -    -    -    (10)   (10)
Net income (loss)   -    -    -    5,634    -    -    -    -    5,634 
Balance at December 31, 2019   9,258    93    54,874    112,404    -    -    -    (166)   167,205 
Purchase of treasury shares   -    -    -    -    -    (133)   (2,047)   -    (2,047)
Canceled treasury shares   (133)   (2)   (2,045)   -    -    133    2,047    -    - 
Payment of dividends   -    -    -    (368)   -    -    -    -    (368)
Payment to noncontrolling interest   -    -    -    -    -    -    -    (21)   (21)
Net income (loss)   -    -    -    (3,452)   -    -    -    (41)   (3,493)
Balance at March 31, 2020   9,125    91    52,829   $108,584    -    -    -    (228)   161,276 
Payment of dividends   -    -    -    (273)   -    -    -    -    (273)
Net income (loss)   -    -    -    (5,474)   -    -    -    (94)   (5,568)
Balance at June 30, 2020   9,125   $91   $52,829   $102,837   $-    -   $-   $(322)  $155,435 
                                              
Balance at September 30, 2018   9,719   $97   $64,212   $88,906   $220    -   $-   $(103)  $153,332 
Reclassification upon adoption of ASU 2016-01   -    -    -    220    (220)   -    -    -    - 
Purchase of treasury shares   -    -    -    -    -    (14)   (355)   -    (355)
Canceled treasury shares   (14)   -    (355)   -    -    14    355    -    - 
Payment of dividends   -    -    -    (291)   -    -    -    -    (291)
Net income (loss)   -    -    -    6,344    -    -    -    60    6,404 
Balance at December 31, 2018   9,705    97    63,857    95,179    -    -    -    (43)   159,090 
Purchase of treasury shares   -    -    -    -    -    (71)   (1,606)   -    (1,606)
Canceled treasury shares   (71)   (1)   (1,605)   -    -    71    1,606    -    - 
Payment of dividends   -    -    -    (291)   -    -    -    -    (291)
Net income (loss)   -    -    -    6,735    -    -    -    8    6,743 
Balance at March 31, 2019   9,634    96    62,252    101,623    -    -    -    (35)   163,936 
Purchase of treasury shares   -    -    -    -    -    (17)   (403)   -    (403)
Canceled treasury shares   (17)   -    (403)   -    -    17    403    -    - 
Payment of dividends   -    -    -    (285)   -    -    -    -    (285)
Payment to noncontrolling interest   -    -    -    -    -    -    -    (21)   (21)
Net income (loss)   -    -    -    5,638    -    -    -    41    5,679 
Balance at June 30, 2019   9,617   $96   $61,849   $106,976   $-    -   $-   $(15)  $168,906 

 

See accompanying notes to unaudited condensed consolidated financial statements.

 

6

 

 

RCI HOSPITALITY HOLDINGS, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(in thousands)

(unaudited)

 

   2020   2019 
   For the Nine Months 
   Ended June 30, 
   2020   2019 
CASH FLOWS FROM OPERATING ACTIVITIES          
Net income (loss)  $(3,427)  $18,826 
Adjustments to reconcile net income (loss) to net cash provided by operating activities:          
Depreciation and amortization   6,696   6,718 
Deferred income tax expense (benefit)   (1,517)   1,237 
Gain on sale of businesses and assets   (749)   (2,704)
Impairment of assets   9,192    - 
Unrealized loss on equity securities   103    408 
Amortization of debt discount and issuance costs   194    276 
Deferred rent   -    236 
Noncash lease expense   1,244    - 
Loss (gain) on insurance   (33)   93 
Doubtful accounts expense on notes receivable   495    - 
Changes in operating assets and liabilities:          
Accounts receivable   (53)   2,305 
Inventories   (29)   (87)
Prepaid insurance, other current and other assets   4,942    4,199 
Accounts payable, accrued and other liabilities   (4,911)   (3,093)
Net cash provided by operating activities   12,147    28,414 
CASH FLOWS FROM INVESTING ACTIVITIES          
Proceeds from sale of businesses and assets   2,041    5,106 
Proceeds from insurance   945    - 
Proceeds from notes receivable   1,555    107 
Issuance of note receivable   -    (420)
Payments for property and equipment and intangible assets   (5,565)   (16,901)
Acquisition of businesses, net of cash acquired   -    (13,500)
Net cash used in investing activities   (1,024)   (25,608)
CASH FLOWS FROM FINANCING ACTIVITIES          
Proceeds from debt obligations   6,503    12,330 
Payments on debt obligations   (7,489)   (18,634)
Purchase of treasury stock   (8,488)   (2,364)
Payment of dividends   (920)   (867)
Payment of loan origination costs   -    (20)
Distribution to noncontrolling interests   (31)   (21)
Net cash used in financing activities   (10,425)   (9,576)
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS   698    (6,770)
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD   14,097    17,726 
CASH AND CASH EQUIVALENTS AT END OF PERIOD  $14,795   $10,956 
           
CASH PAID DURING PERIOD FOR:          
Interest (net of amounts capitalized of $155 and $447, respectively)  $7,303   $7,769 
Income taxes  $2,067   $1,827 
           
Noncash investing and financing transactions:          
Notes receivable received as proceeds from sale of assets  $-   $625 
Operating lease right-of-use assets established upon adoption of ASC 842  $27,310   $- 
Deferred rent liabilities reclassified upon adoption of ASC 842  $1,241   $- 
Operating lease liabilities established upon adoption of ASC 842  $28,551   $- 
Unpaid liabilities on capital expenditures  $6   $- 

 

Non-cash and other transactions:
 

During the nine months ended June 30, 2019, in conjunction with the borrowings of $2.35 million from certain investors, the Company exchanged two notes payable with principal balances of $300,000 and $100,000 for two new notes amounting to $450,000 and $200,000, respectively. The Company received cash amounting to $1.95 million on the entire transaction.

 

During the nine months ended June 30, 2019, the Company acquired two clubs for a total acquisition price of $25.5 million by paying a total of $13.5 million at closing and executing three seller-financed notes for a total of $12.0 million.

 

During the nine months ended June 30, 2019, the Company sold a nightclub in Philadelphia for a total sales price of $1.0 million, payable $375,000 in cash at closing and a $625,000 note receivable.

 

During the nine months ended June 30, 2019, the Company sold a held-for-sale property in Dallas, Texas for a total sales price of $1.4 million, payable $163,000 in cash at closing, net of closing costs and property taxes of $87,000, and a $1.15 million note receivable.

 

See accompanying notes to unaudited condensed consolidated financial statements.

 

7

 

 

RCI HOSPITALITY HOLDINGS, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

 

1. Basis of Presentation

 

The accompanying unaudited condensed consolidated financial statements of RCI Hospitality Holdings, Inc. (the “Company or “RCIHH”) have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP” or “U.S. GAAP”) for interim financial information and with the instructions to Form 10-Q of Regulation S-X. They do not include all information and footnotes required by GAAP for complete financial statements. The September 30, 2019 consolidated balance sheet data were derived from audited financial statements but do not include all disclosures required by GAAP. However, except as disclosed herein, there has been no material change in the information disclosed in the notes to the consolidated financial statements for the year ended September 30, 2019 included in the Company’s Annual Report on Form 10-K, as filed with the Securities and Exchange Commission on February 13, 2020. The interim unaudited condensed consolidated financial statements should be read in conjunction with those consolidated financial statements included in the Form 10-K. In the opinion of management, all adjustments considered necessary for a fair statement of the financial statements, consisting solely of normal recurring adjustments, have been made. Operating results for the three and nine months ended June 30, 2020 are not necessarily indicative of the results that may be expected for the year ending September 30, 2020.

 

2. Recent Accounting Standards and Pronouncements

 

In February 2016, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2016-02, Leases (Topic 842), on accounting for leases which requires lessees to recognize most leases on their balance sheets for the rights and obligations created by those leases. The guidance requires enhanced disclosures regarding the amount, timing, and uncertainty of cash flows arising from leases, and will be effective for interim and annual periods beginning after December 15, 2018. Early adoption is permitted. In July 2018, the FASB issued ASU 2018-11 providing for certain practical expedients in the implementation of ASU 2016-02. The guidance requires the use of a modified retrospective approach. We adopted ASU 2016-02 and related amendments as of October 1, 2019 and elected the package of practical expedients permitted under the transition guidance within the new standard, which among other things, allows us to retain historical lease classification, as well as relief from reviewing expired and existing contracts to determine if they contain leases. Our adoption of the new leasing standard resulted in an increase of $27.3 million in our total assets as of October 1, 2019 due to the recognition of operating lease right-of-use assets net of the reclassification of deferred rent liability of $1.2 million and an increase in total liabilities due to the recognition of a $28.6 million operating lease liabilities. Our adoption of ASC 842 did not have an impact on our consolidated statements of operations and cash flows, except for additional required disclosures. See additional disclosures in Note 14.

 

In June 2016, the FASB issued ASU 2016-13, Financial Instruments—Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments. This ASU requires, among other things, the measurement of all expected credit losses for financial assets held at the reporting date based on historical experience, current conditions, and reasonable and supportable forecasts. ASU 2016-13 replaces the existing incurred loss impairment model with an expected loss model which requires the use of forward-looking information to calculate credit loss estimates. It also eliminates the concept of other-than-temporary impairment and requires credit losses related to available-for-sale debt securities to be recorded through an allowance for credit losses rather than as a reduction in the amortized cost basis of the securities. These changes will result in earlier recognition of credit losses. The ASU is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2019. Early application will be permitted for all entities for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2018. Our evaluation indicates that our consolidated financial statements will not be significantly impacted upon adoption of this guidance.

 

8

 

 

RCI HOSPITALITY HOLDINGS, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

 

In February 2018, the FASB issued ASU 2018-02, Income Statement—Reporting Comprehensive Income (Topic 220): Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income. This ASU provides financial statement preparers with an option to reclassify stranded tax effects within accumulated other comprehensive income (“AOCI”) to retained earnings in each period in which the effect of the change in the U.S. federal corporate income tax rate in the Tax Cuts and Jobs Act (“Tax Act”) is recorded. The ASU requires financial statement preparers to disclose (1) a description of the accounting policy for releasing income tax effects from AOCI; (2) whether they elect to reclassify the stranded income tax effects from the Tax Act; and (3) information about the other income tax effects that are reclassified. The amendments affect any organization that is required to apply the provisions of Topic 220, Income Statement—Reporting Comprehensive Income, and has items of other comprehensive income for which the related tax effects are presented in other comprehensive income as required by GAAP. The ASU is effective for all organizations for fiscal years beginning after December 15, 2018, and interim periods within those fiscal years. Early adoption is permitted. Organizations should apply the proposed amendments either in the period of adoption or retrospectively to each period (or periods) in which the effect of the change in the U.S. federal corporate income tax rate in the Tax Act is recognized. We adopted ASU 2018-02 as of October 1, 2019. Our adoption of this guidance did not have an impact on our consolidated financial statements.

 

In August 2018, the FASB issued ASU No. 2018-13, Fair Value Measurement (Topic 820): Disclosure Framework—Changes to the Disclosure Requirements for Fair Value Measurement. ASU 2018-13 modifies the disclosure requirements of Accounting Standards Codification (“ASC”) Topic 820 with certain removals, modifications, and additions. Eliminated disclosures that may affect the Company include (1) transfers between level 1 and level 2 of the fair value hierarchy, and (2) policies related to valuation processes and the timing of transfers between levels of the fair value hierarchy. Modified disclosures that may affect the Company include (1) a requirement to disclose the timing of liquidation of an investee’s assets and the date when restrictions from redemption might lapse if the entity has communicated the timing publicly for investments in certain entities that calculate net asset value, and (2) clarification that the measurement uncertainty disclosure is to communicate information about the uncertainty in measurement as of the reporting date. Additional disclosures that may affect the Company include (1) disclosure of changes in unrealized gains and losses for the period included in other comprehensive income for recurring level 3 fair value measurements held at the end of the reporting period, and (2) disclosure of the range and weighted average of significant unobservable inputs used to develop level 3 fair value measurements. The update is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2019. Early adoption is permitted for any removed or modified disclosures upon issuance of the ASU and delay adoption of the additional disclosures until the effective date. Our evaluation indicates that fair value disclosures in our consolidated financial statements will be minimally impacted by the requirements of this ASU.

 

9

 

 

RCI HOSPITALITY HOLDINGS, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

 

In March 2019, the FASB issued ASU No. 2019-01, Leases (Topic 842): Codification Improvements. ASU 2019-01 aligns the guidance for fair value of the underlying asset by lessors with existing guidance in Topic 842. The ASU requires that the fair value of the underlying asset at lease commencement is its cost reflecting in volume or trade discounts that may apply. However, if there has been a significant lapse of time between the date the asset was acquired and the lease commencement date, the definition of fair value as outlined in Topic 820 should be applied. In addition, the ASU exempts both lessees and lessors from having to provide certain interim disclosures in the fiscal year in which a company adopts the new leases standard. The update is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2019. Our evaluation indicates that our consolidated financial statements will not be significantly impacted upon adoption of this guidance.

 

In December 2019, the FASB issued ASU 2019-12, Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes. This ASU simplifies accounting for income taxes by removing the following exceptions: (1) exception to the incremental approach for intraperiod tax allocation, (2) exceptions to accounting for basis differences when there are ownership changes in foreign investments, and (3) exception in interim period income tax accounting for year-to-date losses that exceed anticipated losses. The ASU also improves financial statement preparers’ application of income tax related guidance for franchise taxes that are partially based on income; transactions with a government that result in a step up in the tax basis of goodwill; separate financial statements of legal entities that are not subject to tax; and enacted changes in tax laws in interim periods. The ASU is effective for public business entities for fiscal years beginning after December 15, 2020, and interim periods within those fiscal years. Early adoption is permitted for public business entities for periods for which financial statements have not been issued. An entity that elects early adoption in an interim period should reflect any adjustments as of the beginning of the annual period that includes that interim period. Additionally, an entity that elects early adoption should adopt all the amendments in the same period. We are still evaluating the impact of this ASU on the Company’s consolidated financial statements.

 

10

 

 

RCI HOSPITALITY HOLDINGS, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

 

3. Liquidity and Impact of COVID-19 Pandemic

 

In March 2020, President Donald Trump declared the coronavirus disease 2019 (“COVID-19”) pandemic as a national public health emergency. COVID-19 is the disease caused by a novel strain of a coronavirus that originated from Wuhan, China in November 2019. The declaration resulted in a significant reduction in customer traffic in our clubs and restaurants due to changes in consumer behavior as social distancing practices, dining room closures and other restrictions that were mandated or encouraged by federal, state and local governments, and since March 2020, we have temporarily closed and reopened several of our clubs and restaurants.

 

The closure of our clubs and restaurants caused by the COVID-19 pandemic has presented operational challenges. Our strategy is to open locations in accordance with local and state guidelines and it is too early to know when and if they will generate positive cash flows for us. Depending on the timing and number of locations we get open, and their ability to generate positive cash flow, we may need to borrow funds to meet our obligations or consider selling certain assets. The COVID-19 pandemic is adversely affecting the availability of liquidity generally in the credit markets, and there can be no guarantee that additional liquidity will be readily available or available on favorable terms, especially the longer the COVID-19 pandemic lasts.

 

To augment an expected decline in operating cash flows caused by the COVID-19 pandemic, we instituted the following measures:

 

  Arranged and continue to arrange for deferment of principal and interest payment on certain of our debts;
     
  Furloughed employees working at our clubs and restaurants, except for a limited number of managers;
     
  Pay cut for all remaining salaried and hourly employees and deferral of board of director compensation;
     
  Deferred or modified certain fixed monthly expenses such as insurance, rent, and taxes, among others;
     
  Canceled certain non-essential expenses such as advertising, cable, pest control, point-of-sale system support, and investor relations coverage, among others.

 

On May 8, 2020, the Company received approval and funding under the Paycheck Protection Program (“PPP”) of the CARES Act for its restaurants, shared service entity and lounge. See Notes 7 and 9. Ten of our restaurant subsidiaries received amounts ranging from $271,000 to $579,000 for an aggregate amount of $4.2 million; our shared-services subsidiary received $1.1 million; and one of our lounges received $124,000. None of our adult nightclub and other non-core business subsidiaries received funding under the PPP.

 

As of the release of this report, we do not know the extent and duration of the impact of COVID-19 on our businesses due to the uncertainty about the spread of the virus. Lower sales, as caused by social distancing guidelines, could lead to adverse financial results. However, we will continually monitor and evaluate the situation and will determine any further measures to be instituted, including refinancing several of our debt obligations.

 

We continue to adhere to state and local government mandates regarding the pandemic and, since March 2020, have closed and reopened several of our locations depending on changing government mandates. As of the release of this report, we have reopened many of our club and Bombshells locations with limited occupancy but some of our bigger clubs are still closed.

 

Valuation of Goodwill, Indefinite-Lived Intangibles and Long-Lived Assets

 

We consider the COVID-19 pandemic as a triggering event in the assessment of recoverability of the goodwill, indefinite-lived intangibles, and long-lived assets in our clubs and restaurants that are affected. We evaluated forecasted cash flows considering future assumed impact of COVID-19 pandemic on sales. Based on our evaluation as of June 30, 2020, we determined our assets are impaired in a total amount of approximately $9.2 million comprised of $6.5 million in goodwill, $2.3 million in SOB licenses, $302,000 in property and equipment, and $104,000 in right-of-use operating lease assets.

 

4. Revenues

 

The Company recognizes revenue from the sale of alcoholic beverages, food and merchandise, service and other revenues at the point-of-sale upon receipt of cash, check, or credit card charge, net of discounts and promotional allowances based on consideration specified in implied contracts with customers. Sales and liquor taxes collected from customers and remitted to governmental authorities are presented on a net basis in the accompanying unaudited condensed consolidated statements of operations. The Company recognizes revenue when it satisfies a performance obligation (point in time of sale) by transferring control over a product or service to a customer.

 

Commission revenues, such as ATM commission, are recognized when the basis for such commission has transpired. Revenues from the sale of magazines and advertising content are recognized when the issue is published and shipped. Revenues and external expenses related to the Company’s annual Expo convention are recognized upon the completion of the convention, which normally occurs during our fiscal fourth quarter. Lease revenue (included in other revenues) is recognized when earned (recognized over time) and is more appropriately covered by guidance under ASC 842, Leases (ASC 840 in prior year). See Note 14.

 

11

 

 

RCI HOSPITALITY HOLDINGS, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

 

Revenues, as disaggregated by revenue type, timing of recognition, and reportable segment (see also Note 12), are shown below (in thousands):

 

 

   Three Months Ended June 30, 2020   Three Months Ended June 30, 2019 
   Nightclubs   Bombshells   Other   Total   Nightclubs   Bombshells   Other   Total 
Sales of alcoholic beverages  $1,777   $5,846   $-   $7,623   $14,597   $4,973   $-   $19,570 
Sales of food and merchandise   774    2,678    -    3,452    3,313    3,733    -    7,046 
Service revenues   2,906    1    -    2,907    17,257    42    -    17,299 
Other revenues   556    6    177    739    2,722    7    383    3,112 
   $6,013   $8,531   $177   $14,721   $37,889   $8,755   $383   $47,027 
                                         
Recognized at a point in time  $5,781   $8,531   $175   $14,487   $37,457   $8,755   $369   $46,581 
Recognized over time   232*   -    2    234    432*   -