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Revenues
 9 Months Ended
Jun. 30, 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):

 

   Three Months Ended June 30, 2021   Three Months Ended June 30, 2020 
   Nightclubs   Bombshells   Other   Total   Nightclubs   Bombshells   Other   Total 
Sales of alcoholic beverages  $16,130   $8,962   $-   $25,092   $1,777   $5,846   $-   $7,623 
Sales of food and merchandise   5,062    6,996    -    12,058    774    2,678    -    3,452 
Service revenues   16,772    108    -    16,880    2,906    1    -    2,907 
Other revenues   3,067    11    752    3,830    556    6    177    739 
   $41,031   $16,077   $752   $57,860   $6,013   $8,531   $177   $14,721 
                                         
Recognized at a point in time  $40,599   $16,075   $751   $57,425   $5,781   $8,531   $175   $14,487 
Recognized over time   432*   2    1    435    232*   -    2    234 
   $41,031   $16,077   $752   $57,860   $6,013   $8,531   $177   $14,721 

 

   Nine Months Ended June 30, 2021   Nine Months Ended June 30, 2020 
   Nightclubs   Bombshells   Other   Total   Nightclubs   Bombshells   Other   Total 
Sales of alcoholic beverages  $38,398   $24,327   $-   $62,725   $28,321   $16,964   $-   $45,285 
Sales of food and merchandise   12,567    17,638    -    30,205    6,837    10,541    -    17,378 
Service revenues   38,216    226    -    38,442    34,290    158    -    34,448 
Other revenues   7,834    27    1,084    8,945    5,791    21    618    6,430 
   $97,015   $42,218   $1,084   $140,317   $75,239   $27,684   $618   $103,541 
                                         
Recognized at a point in time  $95,816   $42,215   $1,080   $139,111   $74,192   $27,684   $605   $102,481 
Recognized over time   1,199*   3    4    1,206    1,047*   -    13    1,060 
   $97,015   $42,218   $1,084   $140,317   $75,239   $27,684   $618   $103,541 

 

* Lease revenue (included in Other Revenues) is 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

June 30, 2021

 
Ad revenue  $92   $456   $(477)  $71 
Expo revenue   211    247    (448)   10 
Other   33    123    (6)   150 
   $336   $826   $(931)  $231 

 

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.