RCI Hospitality (Nasdaq: RICK) swings to 1Q26 GAAP loss on buybacks
Filing Impact
Filing Sentiment
Form Type
8-K
Rhea-AI Filing Summary
RCI Hospitality Holdings reported fiscal 2026 first-quarter results for the period ended December 31, 2025. Total revenue was $70.8 million, slightly below $71.5 million a year earlier. GAAP EPS swung to a loss of $0.57 from earnings of $1.01, largely due to a $9.9 million premium on stock repurchases and other pre‑tax net charges totaling $10.1 million versus $3.2 million in net gains in 1Q25.
On an adjusted basis, non‑GAAP EPS was $0.74, modestly below $0.80 in the prior year, while adjusted EBITDA held essentially flat at $15.7 million. Free cash flow declined to $6.7 million from $12.1 million as operating cash flow fell to $7.8 million from $13.3 million. Nightclub revenue grew 0.9% to $62.3 million, while Bombshells revenue fell 12.6% to $8.4 million.
The company has repurchased more than one million shares in fiscal 2026 to date as of May 1, 2026, leaving approximately 7,651,500 shares outstanding. Debt was $256.4 million at December 31, 2025, up from $235.8 million at September 30, 2025, mainly from seller financing related to the ADW transaction.
Positive
- Adjusted performance remained resilient, with non-GAAP EPS of $0.74 only modestly below $0.80 a year earlier and adjusted EBITDA steady at $15.7 million, indicating core profitability despite significant non-operating and capital allocation charges.
- RCI executed a sizable share repurchase, buying back more than one million shares in fiscal 2026 to date, reducing outstanding shares to about 7,651,500 and potentially enhancing per-share metrics over time.
Negative
- GAAP results weakened materially, with EPS dropping from $1.01 profit to a $0.57 loss and net income moving from a $9.0 million gain to a $4.7 million loss, driven by a $9.9 million premium on stock repurchases and other non-operating charges.
- Cash generation softened, as net cash from operating activities fell to $7.8 million from $13.3 million and free cash flow declined to $6.7 million from $12.1 million, while total debt rose to $256.4 million from $235.8 million at September 30, 2025.
Insights
RCI posts GAAP loss driven by buyback costs and softer cash flow.
RCI Hospitality delivered essentially flat revenue at $70.8M with $15.7M adjusted EBITDA matching the prior year, but GAAP results deteriorated sharply. A $9.9M premium on stock repurchases and other items turned last year’s profit into a $4.7M net loss.
Operating trends were mixed: nightclubs revenue rose 0.9% to $62.3M, while Bombshells revenue fell 12.6% to $8.4M and flipped from income to loss. Free cash flow dropped to $6.7M from $12.1M, and operating cash flow declined to $7.8M from $13.3M.
The company has repurchased over one million shares in FY26 to date, reducing the share count to about 7.65M but also contributing to the GAAP loss and higher leverage. Total debt increased to $256.4M at December 31, 2025, up from $235.8M three months earlier, partly tied to the ADW transaction.
8-K Event Classification
2 items: 2.02, 9.01
2 items
Item 2.02
Results of Operations and Financial Condition
Financial
Disclosure of earnings results, typically an earnings press release or preliminary financials.
Item 9.01
Financial Statements and Exhibits
Exhibits
Financial statements, pro forma financial information, and exhibit attachments filed with this report.
Key Figures
Total revenue: $70.8 million
GAAP EPS: $(0.57) per share
Non-GAAP EPS: $0.74 per share
+5 more
8 metrics
Total revenue
$70.8 million
Fiscal 2026 first quarter vs $71.5 million in 1Q25
GAAP EPS
$(0.57) per share
Fiscal 2026 first quarter vs $1.01 in 1Q25
Non-GAAP EPS
$0.74 per share
Fiscal 2026 first quarter vs $0.80 in 1Q25
Adjusted EBITDA
$15.7 million
Fiscal 2026 first quarter, unchanged from $15.7 million in 1Q25
Free cash flow
$6.7 million
Fiscal 2026 first quarter vs $12.1 million in 1Q25
Net income (loss)
$(4.7) million
Net loss attributable to common stockholders in 1Q26 vs $9.0 million income in 1Q25
Total debt
$256.4 million
Debt at December 31, 2025 vs $235.8 million at September 30, 2025
Shares outstanding
Approximately 7,651,500 shares
Shares outstanding in FY26 to date as of May 1, 2026 after buybacks
Key Terms
Adjusted EBITDA, free cash flow, non-GAAP operating income, premium on stock repurchase, +1 more
5 terms
Adjusted EBITDA financial
"Adjusted EBITDA 1 | $15.7 | $15.7"
Adjusted EBITDA is a way companies measure how much money they make from their core operations, like running a business, by removing certain costs or income that aren’t part of regular business activities. It helps investors see how well a company is doing without distractions from unusual expenses or gains, making it easier to compare companies or track performance over time.
free cash flow financial
"Free cash flow 1 | $6.7 | $12.1"
Free cash flow is the amount of money a company has left over after paying all its expenses and investing in its business, like buying equipment or updating facilities. It shows how much cash is available to reward shareholders, pay down debt, or save for future growth. This helps investors understand if a company is financially healthy and able to grow.
non-GAAP operating income financial
"Non-GAAP operating income, which excludes other net charges and gains"
Non-GAAP operating income is a measure of a company's profit from its core business activities, calculated by excluding certain expenses or income that are not part of regular operations. It provides a clearer picture of how well the business is performing by focusing on ongoing operations, helping investors compare companies more consistently and make better-informed decisions.
Accounting Standards Update (ASU) 2023-07 regulatory
"The Company has adopted Accounting Standards Update (ASU) 2023-07"
Accounting Standards Update (ASU) 2023-07 is a formal change issued by the U.S. accounting standard setter that requires companies to provide clearer, more detailed information about their operating segments and the revenue and performance measures used to evaluate them. For investors it matters because the rule makes it easier to see which parts of a business drive results—think of it as breaking a company’s financial “black box” into labeled compartments so you can better compare performance, spot risks, and make more informed investment decisions.
Earnings Snapshot
Revenue: $70.8 million
Fiscal 2026 first quarter ended December 31, 2025
Revenue
$70.8 million
Compared with $71.5 million in the fiscal 2025 first quarter
GAAP EPS
$(0.57)
Compared with $1.01 in the fiscal 2025 first quarter
Non-GAAP EPS
$0.74
Compared with $0.80 in the fiscal 2025 first quarter
Adjusted EBITDA
$15.7 million
Equal to $15.7 million in the fiscal 2025 first quarter
Free cash flow
$6.7 million
Compared with $12.1 million in the fiscal 2025 first quarter
Net income (loss)
$(4.7) million
Compared with $9.0 million net income in the fiscal 2025 first quarter
United States
Securities and Exchange Commission
Washington, D.C. 20549
FORM 8-K
Current Report
Pursuant to Section 13 or 15(d) of
The Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): May 7, 2026
(Exact Name of Registrant as Specified in Its Charter)
(State or Other Jurisdiction of Incorporation) | (Commission File Number) | (IRS Employer Identification No.) | ||||||
(Address of Principal Executive Offices, Including Zip Code)
(281 ) 397-6730
(Issuer’s Telephone Number, Including Area Code)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
| Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) | |||||
| Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a -12) | |||||
| Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d -2(b)) | |||||
| Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e -4(c)) | |||||
Securities registered pursuant to Section 12(b) of the Act:
| Title of each class | Trading Symbol(s) | Name of each exchange on which registered | ||||||||||||
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging growth company o
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. o
ITEM 2.02 RESULTS OF OPERATIONS AND FINANCIAL CONDITION.
On May 7, 2026, we issued a press release announcing results for the fiscal quarter ended December 31, 2025, and the filing of our quarterly report on Form 10-Q for that quarter. Also on May 7, 2026, we will hold a conference call to discuss these results and related matters. A copy of the press release is furnished as Exhibit 99.1 to this current report on Form 8-K.
This information shall not be deemed “filed” for the purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or incorporated by reference in any filing under the Securities Act of 1933, as amended, or the Exchange Act, except as shall be expressly set forth by specific reference in such a filing.
ITEM 9.01 FINANCIAL STATEMENTS AND EXHIBITS
(d) Exhibits
| Exhibit Number | Description | |||||||
| 99.1 | Press release of RCI Hospitality Holdings, Inc. dated May 7, 2026 | |||||||
| 104 | Cover Page Interactive Data File (embedded within the Inline XBRL document) | |||||||
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
RCI HOSPITALITY HOLDINGS, INC. | ||||||||
| Date: May 7, 2026 | By: | /s/ Travis Reese | ||||||
| Travis Reese | ||||||||
| Interim President and Chief Executive Officer | ||||||||
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RCI Files 10-Q, Reports 1Q26 Results, Hosts X Spaces Call at 4:30 PM ET Today
HOUSTON—May 7, 2026—RCI Hospitality Holdings, Inc. (Nasdaq: RICK) today filed its Form 10-Q and reported results for the fiscal 2026 first quarter ended December 31, 2025.
Summary Financials (in millions, except EPS) | 1Q26 | 1Q25 | ||||||
Total revenues | $70.8 | $71.5 | ||||||
EPS | $(0.57) | $1.01 | ||||||
Non-GAAP EPS1 | $0.74 | $0.80 | ||||||
Net cash provided by operating activities | $7.8 | $13.3 | ||||||
Free cash flow1 | $6.7 | $12.1 | ||||||
Net income (loss) attributable to RCIHH common stockholders | $(4.7) | $9.0 | ||||||
Adjusted EBITDA1 | $15.7 | $15.7 | ||||||
Weighted average shares used in computing EPS – basic and diluted | 8.30 | 8.92 | ||||||
1 See “Non-GAAP Financial Measures” below.
Summary (Comparisons are to year-ago periods unless indicated otherwise)
Travis Reese, Interim President and CEO, said: "The year‑over‑year decline in net income primarily reflects pre-tax operating and non-operating items of $10.1 million in net charges in 1Q26 and $3.2 million in net gains in 1Q25."
"As previously reported, total nightclub sales were stable, with contributions from new venues offsetting same‑store performance and the closure of underperforming locations, while new Bombshells sports bars-restaurants offset most same‑store declines. Despite sales headwinds tied to customer uncertainty during the U.S. government shutdown in October and November, higher‑margin club service revenues increased 6.7% year over year.”
"In line with our 5-Year Capital Allocation Plan, we have bought back more than one million shares in FY26 to date as of May 1, 2026, resulting in approximately 7,651,500 shares outstanding."
X Spaces Conference Call at 4:30 PM ET Today
•Call link: https://x.com/i/spaces/1qxvvkXrjaqxB (X log in required).
•Presentation link: https://www.rcihospitality.com/investor-relations/.
•To ask questions: Participants must join the X Space using a mobile device.
•To listen only: Participants can access the X Space from a computer.
•There will be no other types of telephone or webcast access.
1Q26 Results (Comparisons are to year-ago periods unless indicated otherwise)
Nightclubs segment: Revenues of $62.3 million increased by 0.9%. Sales primarily reflected $4.9 million from five newly acquired and reopened clubs and $56.9 million from the 52 same-store clubs. Two small Texas clubs closed during the quarter.2 By revenue type, service increased 6.7%; food, merchandise and other increased 1.8%; and alcoholic beverages declined 4.6%.
Other charges, net of $0.2 million (mainly impairments offset by favorable settlement of a lawsuit and gain on insurance) compared to other gains, net of $0.8 million (mainly a gain on insurance).
Operating income was $18.7 million (30.0% of segment revenues) compared to $20.9 million (33.8%). Non-GAAP operating income, which excludes other net charges and gains, was $19.5 million (31.3% of segment revenues) compared to $20.6 million (33.4%).
1
Bombshells segment: Revenues of $8.4 million declined 12.6%. Sales reflected $1.8 million from two newly opened locations, $6.6 million from the nine same-store locations, and the absence of $1.2 million from four underperforming locations divested/closed in 1Q25.2
Operating loss was $139,000 (-1.7% of segment revenues) compared to income of $1.9 million (20.3%), which included a gain on sale of a location of $1.3 million. Non-GAAP operating loss, which excludes other net charges (mainly impairments), was $110,000 (-1.3% of segment revenues) compared to income of $616,000 (6.4%), which excludes the gain on sale.
Corporate segment: Expenses totaled $7.4 million (10.4% of total revenues) compared to $8.8 million (12.3%). Most of the year over year change reflected lower insurance costs partially offset by higher accounting and professional fees in the current year due to delayed filing of our annual report and year end audit. Non-GAAP expenses totaled $7.0 million (9.9% of total revenues) compared to $8.4 million (11.8%).
Impairments and other charges, net within consolidated operations totaled $0.2 million compared to net gains of $2.2 million. 1Q26 also included a non-operating charge of $9.9 million compared to a non-operating gain of $1.0 million.
Income tax expense was $1.5 million compared to $1.8 million.
Weighted average shares outstanding of 8.30 million declined 7.0% due to share buybacks.
Debt of $256.4 million at December 31, 2025 increased 8.8% from $235.8 million at September 30, 2025, primarily reflecting seller-financing from the previously-announced ADW transaction. Compared to a year ago, debt increased 8.9%.
2 See our January 13, 2026 news release on 1Q26 sales for more details.
Non-GAAP Financial Measures
In addition to our financial information presented in accordance with GAAP, management uses certain non-GAAP financial measures, within the meaning of the SEC Regulation G, to clarify and enhance understanding of past performance and prospects for the future. Generally, a non-GAAP financial measure is a numerical measure of a company’s operating performance, financial position or cash flows that excludes or includes amounts that are included in or excluded from the most directly comparable measure calculated and presented in accordance with GAAP. We monitor non-GAAP financial measures because it describes the operating performance of the Company and helps management and investors gauge our ability to generate cash flow, excluding (or including) some items that management believes are not representative of the ongoing business operations of the Company, but are included in (or excluded from) the most directly comparable measures calculated and presented in accordance with GAAP. Relative to each of the non-GAAP financial measures, we further set forth our rationale as follows:
Non-GAAP Operating Income and Non-GAAP Operating Margin. We calculate non-GAAP operating income and non-GAAP operating margin by excluding the following items from income from operations and operating margin: (a) amortization of intangibles, (b) impairment of assets, (c) settlement of lawsuits, net of recoveries, (d) gains or losses on sale of businesses and assets, (e) gains or losses on insurance, and (f) stock-based compensation. We believe that excluding these items assists investors in evaluating period-over-period changes in our operating income and operating margin without the impact of items that are not a result of our day-to-day business and operations.
Non-GAAP Net Income and Non-GAAP Net Income per Diluted Share. We calculate non-GAAP net income and non-GAAP net income per diluted share by excluding or including certain items to net income or loss attributable to RCIHH common stockholders and diluted earnings per share. Adjustment items are: (a) amortization of intangibles, (b) impairment of assets, (c) settlement of lawsuits, net of recoveries, (d) gains or losses on sale of businesses and assets, (e) gains or losses on insurance, (f) stock-based compensation, (g) premium on stock repurchase, (h) gains or losses on lease termination, and (i) the income tax effect of the above-described adjustments. Included in the income tax effect of the above adjustments is the net effect of the non-GAAP provision for income taxes, calculated at approximately 22.8% and 17.7% effective tax rate of the pre-tax non-GAAP income before taxes for the three months ended December 31, 2025, and 2024, respectively, and the GAAP income tax expense (benefit). We believe that excluding and including such items help management and investors better understand our operating activities.
Adjusted EBITDA. We calculate adjusted EBITDA by excluding the following items from net income or loss attributable to RCIHH common stockholders: (a) depreciation and amortization, (b) income tax expense, (c) net interest expense, (d) impairment of assets, (e) settlement of lawsuits, net of recoveries, (f) gains or losses on sale of businesses and assets, (g)
2
gains or losses on insurance, (h) stock-based compensation, (i) premium on stock repurchase, and (j) gains or losses on lease termination. 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.
We also use certain non-GAAP cash flow measures such as free cash flow. Free cash flow is derived from net cash provided by operating activities less maintenance capital expenditures. We use free cash flow as the baseline for the implementation of our capital allocation strategy.
Accounting Standards Update (ASU) 2023-07
The Company has adopted Accounting Standards Update (ASU) 2023-07, which requires enhanced reportable segment disclosures. As a result, certain prior-year segment information has been recast.
About RCI Hospitality Holdings, Inc. (Nasdaq: RICK) (X: @RCIHHinc)
With more than 60 locations, RCI Hospitality Holdings, Inc., through its subsidiaries, is the country’s leading company in adult nightclubs and sports bars-restaurants. See all our brands at www.rcihospitality.com.
Forward-Looking Statements
This press release may contain forward-looking statements that involve a number of risks and uncertainties that could cause the Company's actual results to differ materially from those indicated, including, but not limited to, the risks and uncertainties associated with (i) operating and managing an adult entertainment or restaurant business, (ii) the business climates in cities where it operates, (iii) the success or lack thereof in launching and building the Company's businesses, (iv) cyber security, (v) conditions relevant to real estate transactions, (vi) numerous other factors such as laws governing the operation of adult entertainment or restaurant businesses, competition and dependence on key personnel, and (vii) our ability to regain and maintain compliance with the filing requirements of the SEC and the Nasdaq Stock Market. For more detailed discussion of such factors and certain risks and uncertainties, see RCI's annual report on Form 10-K for the year ended September 30, 2025, as well as its other filings with the U.S. Securities and Exchange Commission. The Company has no obligation to update or revise the forward-looking statements to reflect the occurrence of future events or circumstances.
Media & Investor Contacts
Gary Fishman and Michael Wichman at 212-883-0655 or gfishman@pondel.com and mwichman@pondel.com.
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RCI HOSPITALITY HOLDINGS, INC. | |||||||||||||||||||||||
CONSOLIDATED STATEMENTS OF INCOME | |||||||||||||||||||||||
(in thousands, except per share, number of shares, and percentage data) | |||||||||||||||||||||||
Three Months Ended | |||||||||||||||||||||||
December 31, 2025 | December 31, 2024 | ||||||||||||||||||||||
Amount | % of Revenue | Amount | % of Revenue | ||||||||||||||||||||
Revenues | |||||||||||||||||||||||
Sales of alcoholic beverages | $ | 30,139 | 42.6 | % | $ | 32,188 | 45.0 | % | |||||||||||||||
Sales of food and merchandise | 9,966 | 14.1 | % | 10,106 | 14.1 | % | |||||||||||||||||
Service revenues | 25,811 | 36.4 | % | 24,181 | 33.8 | % | |||||||||||||||||
Other | 4,912 | 6.9 | % | 5,008 | 7.0 | % | |||||||||||||||||
Total revenues | 70,828 | 100.0 | % | 71,483 | 100.0 | % | |||||||||||||||||
Operating expenses | |||||||||||||||||||||||
Cost of goods sold | |||||||||||||||||||||||
Alcoholic beverages sold | 5,511 | 18.3 | % | 5,846 | 18.2 | % | |||||||||||||||||
Food and merchandise sold | 3,629 | 36.4 | % | 3,563 | 35.3 | % | |||||||||||||||||
Service and other | 101 | 0.3 | % | 72 | 0.2 | % | |||||||||||||||||
Total cost of goods sold (exclusive of items shown below) | 9,241 | 13.0 | % | 9,481 | 13.3 | % | |||||||||||||||||
Salaries and wages | 21,443 | 30.3 | % | 20,564 | 28.8 | % | |||||||||||||||||
Selling, general and administrative | 24,704 | 34.9 | % | 26,207 | 36.7 | % | |||||||||||||||||
Depreciation and amortization | 4,187 | 5.9 | % | 3,569 | 5.0 | % | |||||||||||||||||
Impairments and other charges (gains), net | 217 | 0.3 | % | (2,244) | (3.1) | % | |||||||||||||||||
Total operating expenses | 59,792 | 84.4 | % | 57,577 | 80.5 | % | |||||||||||||||||
Income from operations | 11,036 | 15.6 | % | 13,906 | 19.5 | % | |||||||||||||||||
Other income (expenses) | |||||||||||||||||||||||
Interest expense | (4,350) | (6.1) | % | (4,152) | (5.8) | % | |||||||||||||||||
Interest income | 99 | 0.1 | % | 179 | 0.3 | % | |||||||||||||||||
Premium on stock repurchase | (9,885) | (14.0) | % | — | — | % | |||||||||||||||||
Gain on lease termination | — | 0.0 | % | 979 | 1.4 | % | |||||||||||||||||
Income (loss) before income taxes | (3,100) | (4.4) | % | 10,912 | 15.3 | % | |||||||||||||||||
Income tax expense | 1,549 | 2.2 | % | 1,847 | 2.6 | % | |||||||||||||||||
Net income (loss) | (4,649) | (6.6) | % | 9,065 | 12.7 | % | |||||||||||||||||
Net income attributable to noncontrolling interests | (85) | (0.1) | % | (41) | (0.1) | % | |||||||||||||||||
Net income (loss) attributable to RCIHH common shareholders | $ | (4,734) | (6.7) | % | $ | 9,024 | 12.6 | % | |||||||||||||||
Earnings (loss) per share | |||||||||||||||||||||||
Basic and diluted | $ | (0.57) | $ | 1.01 | |||||||||||||||||||
Weighted average shares used in computing earnings (loss) per share | |||||||||||||||||||||||
Basic and diluted | 8,295,880 | 8,920,774 | |||||||||||||||||||||
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RCI HOSPITALITY HOLDINGS, INC. | |||||||||||
SEGMENT INFORMATION | |||||||||||
(in thousands) | |||||||||||
Three Months Ended | |||||||||||
December 31, 2025 | December 31, 2024 | ||||||||||
Revenues | |||||||||||
Nightclubs | $ | 62,309 | $ | 61,724 | |||||||
Bombshells | 8,381 | 9,587 | |||||||||
Other | 138 | 172 | |||||||||
$ | 70,828 | $ | 71,483 | ||||||||
Income (loss) from operations | |||||||||||
Nightclubs | $ | 18,722 | $ | 20,853 | |||||||
Bombshells | (139) | 1,945 | |||||||||
Other | (150) | (103) | |||||||||
Corporate | (7,397) | (8,789) | |||||||||
$ | 11,036 | $ | 13,906 | ||||||||
5
RCI HOSPITALITY HOLDINGS, INC. | |||||||||||
CONSOLIDATED STATEMENTS OF CASH FLOWS | |||||||||||
(in thousands) | |||||||||||
Three Months Ended | |||||||||||
December 31, 2025 | December 31, 2024 | ||||||||||
CASH FLOWS FROM OPERATING ACTIVITIES | |||||||||||
Net income (loss) | $ | (4,649) | $ | 9,065 | |||||||
Adjustments to reconcile net income (loss) to net cash provided by operating activities: | |||||||||||
Depreciation and amortization | 4,187 | 3,569 | |||||||||
Impairment of assets | 1,163 | — | |||||||||
Deferred income tax benefit | — | (389) | |||||||||
Loss (gain) on sale of businesses and assets | 30 | (1,463) | |||||||||
Amortization and writeoff of debt discount and issuance costs | 137 | 63 | |||||||||
Credit loss expense on notes receivable | 75 | — | |||||||||
Gain on insurance | (141) | (1,150) | |||||||||
Noncash lease expense | 734 | 658 | |||||||||
Stock-based compensation | 392 | 470 | |||||||||
Premium on stock repurchase | 9,885 | — | |||||||||
Changes in operating assets and liabilities: | |||||||||||
Receivables | (354) | 2,373 | |||||||||
Inventories | 25 | (4) | |||||||||
Prepaid expenses, other current, and other assets | (2,822) | (598) | |||||||||
Accounts payable, accrued, and other liabilities | (846) | 750 | |||||||||
Net cash provided by operating activities | 7,816 | 13,344 | |||||||||
CASH FLOWS FROM INVESTING ACTIVITIES | |||||||||||
Proceeds from sale of businesses and assets | 600 | 129 | |||||||||
Proceeds from insurance | 138 | 1,150 | |||||||||
Proceeds from notes receivable | 50 | 71 | |||||||||
Payments for property and equipment and intangible assets | (2,331) | (5,754) | |||||||||
Net cash used in investing activities | (1,543) | (4,404) | |||||||||
CASH FLOWS FROM FINANCING ACTIVITIES | |||||||||||
Proceeds from debt obligations | 2,253 | 2,963 | |||||||||
Payments on debt obligations | (4,952) | (5,694) | |||||||||
Purchase of treasury stock | (9,831) | (3,218) | |||||||||
Payment of dividends | (545) | (623) | |||||||||
Payment of loan origination costs | (40) | — | |||||||||
Investment from noncontrolling partner | 1,800 | — | |||||||||
Payments to noncontrolling interests | (36) | — | |||||||||
Net cash used in financing activities | (11,351) | (6,572) | |||||||||
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS | (5,078) | 2,368 | |||||||||
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD | 33,709 | 32,350 | |||||||||
CASH AND CASH EQUIVALENTS AT END OF PERIOD | $ | 28,631 | $ | 34,718 | |||||||
6
RCI HOSPITALITY HOLDINGS, INC. | |||||||||||||||||
CONSOLIDATED BALANCE SHEETS | |||||||||||||||||
(in thousands) | |||||||||||||||||
December 31, 2025 | September 30, 2025 | December 31, 2024 | |||||||||||||||
ASSETS | |||||||||||||||||
Current assets | |||||||||||||||||
Cash and cash equivalents | $ | 28,631 | $ | 33,709 | $ | 34,718 | |||||||||||
Receivables, net | 4,221 | 3,940 | 3,519 | ||||||||||||||
Inventories | 4,832 | 4,857 | 4,640 | ||||||||||||||
Prepaid expenses and other current assets | 7,820 | 4,968 | 4,226 | ||||||||||||||
Assets held for sale | 4,463 | 3,394 | — | ||||||||||||||
Total current assets | 49,967 | 50,868 | 47,103 | ||||||||||||||
Property and equipment, net | 276,333 | 279,027 | 282,621 | ||||||||||||||
Operating lease right-of-use assets, net | 25,053 | 25,781 | 25,573 | ||||||||||||||
Notes receivable, net of current portion | 3,797 | 3,849 | 4,103 | ||||||||||||||
Goodwill | 62,242 | 62,725 | 61,911 | ||||||||||||||
Intangibles, net | 170,164 | 171,948 | 162,881 | ||||||||||||||
Other assets | 2,706 | 2,737 | 2,026 | ||||||||||||||
Total assets | $ | 590,262 | $ | 596,935 | $ | 586,218 | |||||||||||
LIABILITIES AND EQUITY | |||||||||||||||||
Current liabilities | |||||||||||||||||
Accounts payable | $ | 4,499 | $ | 5,836 | $ | 5,010 | |||||||||||
Accrued liabilities | 33,928 | 32,607 | 20,514 | ||||||||||||||
Current portion of debt obligations, net | 34,431 | 21,198 | 17,788 | ||||||||||||||
Current portion of operating lease liabilities | 3,386 | 3,314 | 3,008 | ||||||||||||||
Total current liabilities | 76,244 | 62,955 | 46,320 | ||||||||||||||
Deferred tax liability, net | 21,689 | 21,689 | 22,304 | ||||||||||||||
Debt, net of current portion and debt discount and issuance costs | 221,997 | 214,583 | 217,741 | ||||||||||||||
Operating lease liabilities, net of current portion | 26,442 | 27,320 | 27,471 | ||||||||||||||
Other long-term liabilities | 8,214 | 9,509 | 3,611 | ||||||||||||||
Total liabilities | 354,586 | 336,056 | 317,447 | ||||||||||||||
Commitments and contingencies | |||||||||||||||||
Equity | |||||||||||||||||
Preferred stock | — | — | — | ||||||||||||||
Common stock | 78 | 87 | 89 | ||||||||||||||
Additional paid-in capital | 29,144 | 50,908 | 58,731 | ||||||||||||||
Retained earnings | 204,037 | 210,106 | 210,160 | ||||||||||||||
Total RCIHH stockholders' equity | 233,259 | 261,101 | 268,980 | ||||||||||||||
Noncontrolling interests | 2,417 | (222) | (209) | ||||||||||||||
Total equity | 235,676 | 260,879 | 268,771 | ||||||||||||||
Total liabilities and equity | $ | 590,262 | $ | 596,935 | $ | 586,218 | |||||||||||
7
RCI HOSPITALITY HOLDINGS, INC. | |||||||||||
NON-GAAP FINANCIAL MEASURES | |||||||||||
(in thousands, except per share, number of shares, and percentage data) | |||||||||||
Three Months Ended | |||||||||||
December 31, 2025 | December 31, 2024 | ||||||||||
Reconciliation of GAAP net income (loss) to Adjusted EBITDA | |||||||||||
Net income (loss) attributable to RCIHH common stockholders | $ | (4,734) | $ | 9,024 | |||||||
Income tax expense | 1,549 | 1,847 | |||||||||
Interest expense, net | 4,251 | 3,973 | |||||||||
Depreciation and amortization | 4,187 | 3,569 | |||||||||
Impairment of assets | 1,163 | — | |||||||||
Settlement of lawsuits | (802) | 179 | |||||||||
Loss (gain) on sale of businesses and assets | 33 | (1,406) | |||||||||
Gain on insurance | (177) | (1,017) | |||||||||
Stock-based compensation | 392 | 470 | |||||||||
Premium on stock repurchase | 9,885 | — | |||||||||
Gain on lease termination | — | (979) | |||||||||
Adjusted EBITDA | $ | 15,747 | $ | 15,660 | |||||||
Reconciliation of GAAP net income (loss) to non-GAAP net income | |||||||||||
Net income (loss) attributable to RCIHH common stockholders | $ | (4,734) | $ | 9,024 | |||||||
Amortization of intangibles | 615 | 580 | |||||||||
Impairment of assets | 1,163 | — | |||||||||
Settlement of lawsuits | (802) | 179 | |||||||||
Stock-based compensation | 392 | 470 | |||||||||
Loss (gain) on sale of businesses and assets | 33 | (1,406) | |||||||||
Gain on insurance | (177) | (1,017) | |||||||||
Premium on stock repurchase | 9,885 | — | |||||||||
Gain on lease termination | — | (979) | |||||||||
Net income tax effect | (261) | 310 | |||||||||
Non-GAAP net income | $ | 6,114 | $ | 7,161 | |||||||
Reconciliation of GAAP diluted earnings (loss) per share to non-GAAP diluted earnings per share | |||||||||||
Diluted shares | 8,295,880 | 8,920,774 | |||||||||
GAAP diluted earnings (loss) per share | $ | (0.57) | $ | 1.01 | |||||||
Amortization of intangibles | 0.07 | 0.07 | |||||||||
Impairment of assets | 0.14 | — | |||||||||
Settlement of lawsuits | (0.10) | 0.02 | |||||||||
Stock-based compensation | 0.05 | 0.05 | |||||||||
Loss (gain) on sale of businesses and assets | 0.00 | (0.16) | |||||||||
Gain on insurance | (0.02) | (0.11) | |||||||||
Premium on stock repurchase | 1.19 | — | |||||||||
Gain on lease termination | — | (0.11) | |||||||||
Net income tax effect | (0.03) | 0.03 | |||||||||
Non-GAAP diluted earnings per share | $ | 0.74 | $ | 0.80 | |||||||
8
Three Months Ended | |||||||||||
December 31, 2025 | December 31, 2024 | ||||||||||
Reconciliation of GAAP operating income to non-GAAP operating income | |||||||||||
Income from operations | $ | 11,036 | $ | 13,906 | |||||||
Amortization of intangibles | 615 | 580 | |||||||||
Impairment of assets | 1,163 | — | |||||||||
Settlement of lawsuits | (802) | 179 | |||||||||
Stock-based compensation | 392 | 470 | |||||||||
Loss (gain) on sale of businesses and assets | 33 | (1,406) | |||||||||
Gain on insurance | (177) | (1,017) | |||||||||
Non-GAAP operating income | $ | 12,260 | $ | 12,712 | |||||||
Reconciliation of GAAP operating margin to non-GAAP operating margin | |||||||||||
GAAP operating margin | 15.6 | % | 19.5 | % | |||||||
Amortization of intangibles | 0.9 | % | 0.8 | % | |||||||
Impairment of assets | 1.6 | % | — | % | |||||||
Settlement of lawsuits | (1.1) | % | 0.3 | % | |||||||
Stock-based compensation | 0.6 | % | 0.7 | % | |||||||
Loss (gain) on sale of businesses and assets | 0.0 | % | (2.0) | % | |||||||
Gain on insurance | (0.2) | % | (1.4) | % | |||||||
Non-GAAP operating margin | 17.3 | % | 17.8 | % | |||||||
Reconciliation of net cash provided by operating activities to free cash flow | |||||||||||
Net cash provided by operating activities | $ | 7,816 | $ | 13,344 | |||||||
Less: Maintenance capital expenditures | 1,136 | 1,276 | |||||||||
Free cash flow | $ | 6,680 | $ | 12,068 | |||||||
9
RCI HOSPITALITY HOLDINGS, INC. | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
NON-GAAP SEGMENT INFORMATION | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
($ in thousands) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Three Months Ended December 31, 2025 | Three Months Ended December 31, 2024 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Nightclubs | Bombshells | Other | Corporate | Total | Nightclubs | Bombshells | Other | Corporate | Total | ||||||||||||||||||||||||||||||||||||||||||||||||||
Income (loss) from operations | $ | 18,722 | $ | (139) | $ | (150) | $ | (7,397) | $ | 11,036 | $ | 20,853 | $ | 1,945 | $ | (103) | $ | (8,789) | $ | 13,906 | |||||||||||||||||||||||||||||||||||||||
Amortization of intangibles | 613 | — | — | 2 | 615 | 574 | 1 | — | 5 | 580 | |||||||||||||||||||||||||||||||||||||||||||||||||
Impairment of assets | 1,163 | — | — | — | 1,163 | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||||||
Settlement of lawsuits | (827) | 25 | — | — | (802) | 179 | — | — | — | 179 | |||||||||||||||||||||||||||||||||||||||||||||||||
Stock-based compensation | — | — | — | 392 | 392 | — | — | — | 470 | 470 | |||||||||||||||||||||||||||||||||||||||||||||||||
Loss (gain) on sale of businesses and assets | 22 | 4 | — | 7 | 33 | 16 | (1,330) | — | (92) | (1,406) | |||||||||||||||||||||||||||||||||||||||||||||||||
Gain on insurance | (177) | — | — | — | (177) | (1,017) | — | — | — | (1,017) | |||||||||||||||||||||||||||||||||||||||||||||||||
Non-GAAP operating income (loss) | $ | 19,516 | $ | (110) | $ | (150) | $ | (6,996) | $ | 12,260 | $ | 20,605 | $ | 616 | $ | (103) | $ | (8,406) | $ | 12,712 | |||||||||||||||||||||||||||||||||||||||
GAAP operating margin | 30.0 | % | (1.7) | % | (108.7) | % | (10.4) | % | 15.6 | % | 33.8 | % | 20.3 | % | (59.9) | % | (12.3) | % | 19.5 | % | |||||||||||||||||||||||||||||||||||||||
Non-GAAP operating margin | 31.3 | % | (1.3) | % | (108.7) | % | (9.9) | % | 17.3 | % | 33.4 | % | 6.4 | % | (59.9) | % | (11.8) | % | 17.8 | % | |||||||||||||||||||||||||||||||||||||||
10
FAQ
How did RCI Hospitality (RICK) perform in its fiscal 2026 first quarter?
RCI Hospitality reported 1Q26 revenue of $70.8 million, slightly below $71.5 million a year earlier. GAAP results swung to a net loss of $4.7 million and EPS of $(0.57), compared with net income of $9.0 million and EPS of $1.01 in 1Q25.
What caused RCI Hospitality’s earnings to swing to a loss in 1Q26?
The company’s GAAP loss mainly reflects $10.1 million in net pre-tax charges in 1Q26 versus $3.2 million in net gains in 1Q25. These include a $9.9 million premium on stock repurchases, which significantly reduced reported earnings despite relatively stable adjusted operating performance.
How did RCI Hospitality’s Nightclubs and Bombshells segments perform in 1Q26?
In 1Q26, Nightclubs revenue rose 0.9% to $62.3 million, supported by newly acquired and reopened clubs. The Bombshells segment declined 12.6% to $8.4 million, reflecting same-store softness and prior closures, and shifted from operating income of $1.9 million to a small operating loss of $139,000.
What were RCI Hospitality’s key non-GAAP metrics for 1Q26?
Non-GAAP results showed adjusted EBITDA of $15.7 million, essentially flat with $15.7 million a year earlier. Non-GAAP net income was $6.1 million versus $7.2 million, and non-GAAP diluted EPS was $0.74, modestly below $0.80 in 1Q25, highlighting relatively stable underlying operations.
How did cash flow and free cash flow trend for RCI Hospitality in 1Q26?
Net cash provided by operating activities was $7.8 million, down from $13.3 million in 1Q25. After maintenance capital expenditures of $1.1 million, free cash flow totaled $6.7 million, compared with $12.1 million a year earlier, indicating weaker cash generation this quarter.
How much debt and cash did RCI Hospitality report at December 31, 2025?
At December 31, 2025, RCI held cash and cash equivalents of $28.6 million and total debt of $256.4 million, up from $235.8 million at September 30, 2025. The increase primarily reflects seller financing from the previously announced ADW transaction and other financing activities.