EX-99.1 2 ex991_pressreleasefor12312.htm EX-99.1 Document

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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.
3

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

4

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