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Revenues
 6 Months Ended
Mar. 31, 2021
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 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. Due to the pandemic, the Expo convention, initially scheduled in August 2020, was moved to May 2021, hence, no Expo-related revenue in fiscal 2020. 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 13.

 

 

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 11), are shown below (in thousands):

 

 Schedule of Disaggregation of Segment Revenues

   Three Months Ended March 31, 2021   Three Months Ended March 31, 2020 
   Nightclubs   Bombshells   Other   Total   Nightclubs   Bombshells   Other   Total 
Sales of alcoholic beverages  $12,634   $7,639   $-   $20,273   $11,860   $5,059   $-   $16,919 
Sales of food and merchandise   4,082    5,456    -    9,538    2,799    3,680    -    6,479 
Service revenues   11,446    56    -    11,502    14,290    58    -    14,348 
Other revenues   2,625    (16)   137    2,746    2,418    6    256    2,680 
   $30,787   $13,135   $137   $44,059   $31,367   $8,803   $256   $40,426 
                                         
Recognized at a point in time  $30,382   $13,134   $136   $43,652   $30,977   $8,803   $252   $40,032 
Recognized over time   405*   1    1    407    390*   -    4    394 
   $30,787   $13,135   $137   $44,059   $31,367   $8,803   $256   $40,426 

 

   Six Months Ended March 31, 2021   Six Months Ended March 31, 2020 
   Nightclubs   Bombshells   Other   Total   Nightclubs   Bombshells   Other   Total 
Sales of alcoholic beverages  $22,268   $15,365   $-   $37,633   $26,544   $11,118   $-   $37,662 
Sales of food and merchandise   7,505    10,642    -    18,147    6,063    7,863    -    13,926 
Service revenues   21,444    118    -    21,562    31,384    157    -    31,541 
Other revenues   4,767    16    332    5,115    5,235    15    441    5,691 
   $55,984   $26,141   $332   $82,457   $69,226   $19,153   $441   $88,820 
                                         
Recognized at a point in time  $55,217   $26,140   $329   $81,686   $68,411   $19,153   $430   $87,994 
Recognized over time   767*   1    3    771    815*   -    11    826 
   $55,984   $26,141   $332   $82,457   $69,226   $19,153   $441   $88,820 

 

* 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

March 31, 2021

 
Ad revenue  $92   $356   $(278)  $170 
Expo revenue   211    105    -    316 
Other   33    108    (4)   137 
   $336   $569   $(282)  $623 

 

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 operations.

 

On December 22, 2020, the Company signed a franchise development agreement with a group of private investors to open three Bombshells locations 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. Revenue from initial franchise fees is recognized as the performance obligations are satisfied over the term of the franchise agreement.

 

 

RCI HOSPITALITY HOLDINGS, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)