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Revenues
 3 Months Ended
Dec. 31, 2020
Revenue from Contract with Customer [Abstract]  
Revenues

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 income. 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. See Note 12.

 

 

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 10), are shown below (in thousands):

 

   Three Months Ended December 31, 2020   Three Months Ended December 31, 2019 
   Nightclubs   Bombshells   Other   Total   Nightclubs   Bombshells   Other   Total 
Sales of alcoholic beverages  $9,634   $7,726   $-   $17,360   $14,684   $6,059   $-   $20,743 
Sales of food and merchandise   3,423    5,186    -    8,609    3,264    4,183    -    7,447 
Service revenues   9,998    62    -    10,060    17,094    99    -    17,193 
Other revenues   2,142    32    195    2,369    2,817    9    185    3,011 
   $25,197   $13,006   $195   $38,398   $37,859   $10,350   $185   $48,394 
                                         
Recognized at a point in time  $24,835   $13,006   $193   $38,034   $37,434   $10,350   $178   $47,962 
Recognized over time   362*   -    2    364    425*   -    7    432 
   $25,197   $13,006   $195   $38,398   $37,859   $10,350   $185   $48,394 

 

* Lease revenue (included in Other Revenues) as covered by ASC 842. All other revenues are covered by ASC 606.

 

The Company does not have contract assets with customers. The Company’s unconditional right to consideration for goods and services transferred to the customer is included in accounts receivable, net in our unaudited condensed consolidated balance sheet. A reconciliation of contract liabilities with customers is presented below (in thousands):

 

  

Balance at

September 30, 2020

   Consideration Received   Recognized in Revenue  

Balance at

December 31, 2020

 
Ad revenue  $92   $200   $(159)  $133 
Expo revenue   211    18    -    229 
Other   33    52    (27)   58 
   $336   $270   $(186)  $420 

 

Contract liabilities with customers are included in accrued liabilities as unearned revenues in our unaudited condensed consolidated balance sheets (see also Note 5), while the revenues associated with these contract liabilities are included in other revenues in our unaudited condensed consolidated statements of income.

 

On December 22, 2020, the Company signed a franchise development agreement with a group of private investors to open three Bombshells location in San Antonio, Texas over a period of five years, and the right of first refusal for three more locations in Corpus Christi, New Braunfels, and San Marcos, all in Texas. Upon execution of the agreement, the Company collected $75,000 in development fees representing 100% of the initial franchise fee of the first restaurant and 50% of the initial franchise fee of the second restaurant.