RCI HOSPITALITY HOLDINGS, INC.

Previous wording

Through our subsidiaries, as of March 31, 2026, we operated a total of 67 establishments that offer live adult entertainment and sports bars and restaurants. We also operated a leading business communications company serving the multi-billion-dollar adult nightclubs industry. We have two principal reportable segments: Nightclubs and Bombshells. We combine operating segments not included in Nightclubs and Bombshells into “Other.” In the context of club and restaurant/sports bar operations, the terms the “Company,” “we,” “our,” “us” and similar terms used in this report refer to subsidiaries of RCIHH. RCIHH was incorporated in the State of Texas in 1994. Our corporate offices are located in Houston, Texas.

Current wording

Through our subsidiaries, as of June 30, 2026, we operated a total of 68 establishments that offer live adult entertainment and sports bars and restaurants. We also operated a leading business communications company serving the multi-billion-dollar adult nightclubs industry. We have two principal reportable segments: Nightclubs and Bombshells. We combine operating segments not included in Nightclubs and Bombshells into “Other.” In the context of club and restaurant/sports bar operations, the terms the “Company,” “we,” “our,” “us” and similar terms used in this report refer to subsidiaries of RCIHH. RCIHH was incorporated in the State of Texas in 1994. Our corporate offices are located in Houston, Texas.

Previous wording

•Total revenues were $68.7 million compared to $65.9 million, a 4.3% increase (Nightclubs revenue of $60.3 million compared to $57.5 million, a 4.8% increase; and Bombshells revenue of $8.4 million compared to $8.2 million, a 1.6% increase)

Current wording

•Total revenues were $73.9 million compared to $71.1 million, a 3.9% increase (Nightclubs revenue of $63.0 million compared to $62.3 million, a 1.0% increase; and Bombshells revenue of $10.8 million compared to $8.6 million, a 25.4% increase)

Previous wording

•Consolidated same-store sales decreased by 1.9% (Nightclubs decreased by 0.7%, while Bombshells decreased by 11.1%) (refer to the definition of same-store sales in the discussion of revenues below)

Current wording

•Consolidated same-store sales decreased by 0.2% (Nightclubs decreased by 0.8%, while Bombshells increased by 4.7%) (refer to the definition of same-store sales in the discussion of revenues below)

Previous wording

•Basic and diluted earnings per share (“EPS”) of $0.04 loss compared to $0.36 income

Current wording

•Basic and diluted earnings per share (“EPS”) of $0.83 compared to $0.46

Previous wording

•Non-GAAP diluted EPS* of $0.78 compared to $0.65

Current wording

•Non-GAAP diluted EPS* of $0.90 compared to $0.77

Previous wording

•Total revenues were $139.6 million compared to $137.4 million, a 1.6% increase (Nightclubs revenue of $122.6 million compared to $119.3 million, a 2.8% increase; and Bombshells revenue of $16.7 million compared to $17.8 million, an 6.0% decrease)

Current wording

•Total revenues were $213.5 million compared to $208.5 million, a 2.4% increase (Nightclubs revenue of $185.6 million compared to $181.6 million, a 2.2% increase; and Bombshells revenue of $27.5 million compared to $26.4 million, a 4.2% increase)

Previous wording

•Basic and diluted EPS of $0.63 loss compared to $1.38 income

Current wording

•Basic and diluted EPS of $0.16 compared to $1.84

Previous wording

•Non-GAAP diluted EPS* of $1.52 compared to $1.46

Current wording

•Non-GAAP diluted EPS* of $2.41 compared to $2.23

Previous wording

Consolidated revenues for the second quarter increased by $2.8 million, or 4.3%, versus the comparable prior-year quarter due primarily to a $3.4 million increase in sales from new locations and a $1.2 million increase from reformatted/rebranded locations, partially offset by a $1.2 million impact of the decrease in consolidated same-stores sales and a $500,000 impact of closed locations.

Current wording

Consolidated revenues for the third quarter increased by $2.8 million, or 3.9%, versus the comparable prior-year quarter due primarily to a $2.8 million increase in sales from new locations and a $1.4 million increase from reformatted/rebranded locations, partially offset by a $121,000 impact of the decrease in consolidated same-stores sales and a $1.2 million impact of closed locations.

Previous wording

Consolidated revenues for the six months increased by $2.2 million, or 1.6%, versus the comparable prior-year six-month period due primarily to a $8.4 million increase in sales from new locations and a $2.3 million increase from reformatted/rebranded locations, partially offset by a $6.5 million impact of the decrease in consolidated same-stores sales and a $1.9 million impact of closed locations.

Current wording

Consolidated revenues for the nine months increased by $5.0 million, or 2.4%, versus the comparable prior-year nine-month period due primarily to a $11.2 million increase in sales from new locations and a $3.7 million increase from reformatted/rebranded locations, partially offset by a $6.6 million impact of the decrease in consolidated same-stores sales and a $3.2 million impact of closed locations.

Previous wording

Nightclubs revenues increased by 4.8% during the second quarter compared to the same quarter last year primarily due to the $2.4 million contribution of newly acquired clubs and $1.2 million from clubs that have been reformatted and/or rebranded, partially offset by the $358,000 impact of the decrease in same-store sales and the $500,000 impact of closed clubs. For clubs that were open enough days to qualify as a same-store location (refer to the definition of same-store sales in the preceding paragraph), sales decreased by 0.7%. By type of revenue, alcoholic beverage sales decreased by 0.9%, food, merchandise and other revenue increased by 3.8%, while service revenues increased by 11.3%.

Current wording

Nightclubs revenues increased by 1.0% during the third quarter compared to the same quarter last year primarily due to the $950,000 contribution of newly acquired clubs and $1.4 million from clubs that have been reformatted and/or rebranded, partially offset by the $493,000 impact of the decrease in same-store sales and the $1.2 million impact of closed clubs. For clubs that were open enough days to qualify as a same-store location, sales decreased by 0.8%. By type of revenue, alcoholic beverage sales decreased by 4.2%, food, merchandise and other revenue decreased by 1.4%, while service revenues increased by 7.6%.

Previous wording

During the six-month period, Nightclubs revenues increased by 2.8% mainly due to the $5.6 million contribution of newly acquired clubs and $2.3 million from clubs that have been reformatted and/or rebranded, partially offset by the $3.8 million impact of the decrease in same-store sales and the $756,000 impact of closed clubs. By type of revenue, alcoholic beverage sales decreased by 2.8%, food, merchandise and other revenue increased by 2.8%, while service revenues increased by 8.9%.

Current wording

During the nine-month period, Nightclubs revenues increased by 2.2% mainly due to the $6.5 million contribution of newly acquired clubs and $3.7 million from clubs that have been reformatted and/or rebranded, partially offset by the $4.3 million impact of the decrease in same-store sales and the $2.0 million impact of closed clubs. By type of revenue, alcoholic beverage sales decreased by 3.3%, food, merchandise and other revenue increased by 1.3%, while service revenues increased by 8.5%.

Previous wording

Bombshells second quarter revenues increased by 1.6% primarily due to sales from a new location, partially offset by the decline in same-store sales. By type of revenue, food and merchandise sales decreased by 0.3%, while alcoholic beverage sales increased by 4.0%.

Current wording

Bombshells third quarter revenues increased by 25.4% primarily due to the increase in same-store sales and sales from a new location. By type of revenue, food and merchandise sales increased by 16.3%, while alcoholic beverage sales increased by 33.6%.

Previous wording

During the six-month period, Bombshells revenues decreased by 6.0%. This was mainly caused by a $2.7 million decrease in same-store sales and a $1.2 million decrease from closed locations, partially offset by a $2.8 million contribution from new locations. By type of revenue, alcoholic beverage sales decreased by 6.7% while food, merchandise and other decreased by 5.2%.

Current wording

During the nine-month period, Bombshells revenues increased by 4.2%. This was mainly caused by a $2.3 million decrease in same-store sales and a $1.2 million decrease from closed locations, partially offset by a $4.6 million contribution from new locations. By type of revenue, alcoholic beverage sales increased by 6.2% while food, merchandise and other increased by 2.0%.

Previous wording

Total operating expenses, as a percent of revenues, increased to 94.5% from 87.6% from last year’s second quarter, and increased to 89.4% from 83.9% for the six-month period. Year-over-year change was a $7.2 million decrease, or 12.5%, for the quarter and a $9.4 million increase, or 8.2%, for the six months. Significant contributors to the changes in operating expenses are explained below.

Current wording

Total operating expenses, as a percent of revenues, decreased to 82.5% from 87.8% from last year’s third quarter, and increased to 87.0% from 85.2% for the nine-month period. Year-over-year change was a $1.5 million decrease, or 2.3%, for the quarter and an $8.0 million increase, or 4.5%, for the nine months. Significant contributors to the changes in operating expenses are explained below.

Previous wording

Cost of goods sold. Cost of goods sold for the second quarter increased by $394,000, or 4.7%, and increased by $154,000, or 0.9%, for the six-month period mainly due to higher sales. As a percent of total revenues, cost of goods sold was flat at 12.8% during the quarter and decreased to 12.9% from 13.0% during the six-month period mainly due to shift in sales mix to higher-margin service revenues. Nightclubs cost of goods sold during the quarter decreased to 11.2% from 11.3% and for the six months decreased to 11.3% from 11.4%. Bombshells cost of goods sold increased to 24.7% from 22.9% during the quarter and increased to 24.2% from 23.4% during the six months.

Current wording

Cost of goods sold. Cost of goods sold for the third quarter increased by $548,000, or 6.0%, and increased by $702,000, or 2.6%, for the nine-month period mainly due to higher sales. As a percent of total revenues, cost of goods sold was increased to 13.1% from 12.8% during the quarter and was flat at 13.0% during the nine-month period. Nightclubs cost of goods sold during the quarter decreased to 11.2% from 11.3% and for the nine months decreased to 11.3% from 11.4%. Bombshells cost of goods sold increased to 24.1% from 23.7% during the quarter and increased to 24.2% from 23.5% during the nine months.

Previous wording

Salaries and wages. Salaries and wages increased by $751,000, or 3.7%, for the quarter and increased by $1.6 million, or 4.0%, for the six-month period mainly due to new clubs and Bombshells units. As a percent of total revenues, salaries and wages decreased to 30.9% from 31.1% for the quarter and increased to 30.6% from 29.9% for the six months. During the quarter, Nightclubs decreased to 24.2% from 24.5%, Bombshells decreased to 33.7% from 33.9%, while Corporate increased to 5.4% from 5.3%. During the six-month period, Nightclubs increased to 23.9% from 23.5%, Bombshells increased to 34.0% from 31.4%, and Corporate increased to 5.3% from 5.2%.

Current wording

Salaries and wages. Salaries and wages increased by $944,000, or 4.5%, for the quarter and increased by $2.6 million, or 4.2%, for the nine-month period mainly due to new clubs and Bombshells units. As a percent of total revenues, salaries and wages increased to 29.6% from 29.4% for the quarter and increased to 30.2% from 29.7% for the nine months. During the quarter, Nightclubs increased to 23.3% from 22.9%, Bombshells decreased to 30.5% from 33.2%, while Corporate was flat at 5.1%. During the nine-month period, Nightclubs increased to 23.7% from 23.3%, Bombshells increased to 32.6% from 32.0%, and Corporate increased to 5.3% from 5.2%.

Previous wording

Selling, general, and administrative expenses. Total selling, general, and administrative expenses increased by $297,000, or 1.3%, for the quarter and decreased by $1.2 million, or 2.5%, for the six-month period. Dollar amounts in the tables below are in thousands, except percentages.

Current wording

Selling, general, and administrative expenses. Total selling, general, and administrative expenses decreased by $768,000, or 2.9%, for the quarter and decreased by $2.0 million, or 2.6%, for the nine-month period. Dollar amounts in the tables below are in thousands.

Previous wording

Insurance expense decreased due to last year's estimated self-insurance reserve. Charge card fees, supplies and services, utilities, and repairs and maintenance increased due to increase in sales.

Current wording

Insurance expense decreased due to last year's estimated self-insurance reserve. Taxes and permits, charge card fees, supplies and services, utilities, and repairs and maintenance increased due to the increase in sales. Stock-based compensation decreased due to the completion of the expense recognition of the 2022 stock options in February 2026.

Previous wording

Depreciation and amortization. Depreciation and amortization increased by $241,000, or 6.4%, during the quarter and increased by $859,000, or 11.7%, during the six-month period primarily due to additional assets from last year's club acquisitions and newly opened Bombshells.

Current wording

Depreciation and amortization. Depreciation and amortization increased by $138,000, or 3.5%, during the quarter and increased by $997,000, or 8.9%, during the nine-month period primarily due to additional assets from last year's club acquisitions and newly opened Bombshells.

Previous wording

Impairments and other charges (gains), net. Impairments and other charges (gains), net changed mainly due to impairment of assets, the recovery in the current quarter from a previously recorded lawsuit settlement, and the sale of our Bombshells location in Austin, Texas, which was significantly impaired in a prior period, and the insurance recovery for a club razed by fire in last year's first quarter.

Current wording

Impairments and other charges, net. Impairments and other charges, net changed mainly due to current-year increased impairment of assets, lower lawsuit settlements in the current year, and the sale of our Bombshells location in Austin, Texas, which was significantly impaired in a prior period, and the insurance recovery for a club razed by fire in last year's first quarter.

Previous wording

By segment, impairment and other charges (gains), net are as follows (in thousands):

Current wording

By segment, impairment and other charges, net are as follows (in thousands):

Previous wording

For the three and six months ended March 31, 2026, and 2025, our consolidated operating margin was 5.5% and 12.4%, and 10.6% and 16.1%, respectively. Segment contribution to income (loss) from operations is presented in the table below (in thousands):

Current wording

For the three and nine months ended June 30, 2026, and 2025, our consolidated operating margin was 17.5% and 12.2%, and 13.0% and 14.8%, respectively. Segment contribution to income (loss) from operations is presented in the table below (in thousands):

Previous wording

Excluding certain items, the six months ended March 31, 2026, and 2025 non-GAAP operating income (loss) and non-GAAP operating margin are computed in the tables below (dollars in thousands).

Current wording

Excluding certain items, the nine months ended June 30, 2026, and 2025 non-GAAP operating income (loss) and non-GAAP operating margin are computed in the tables below (dollars in thousands).

Previous wording

Interest expense increased by $467,000, or 11.5%, while interest income decreased by $57,000, or 41.0%, during the quarter. Interest expense increased by $665,000, or 8.1%, while interest income decreased by $137,000, or 43.1%, during the six-month period. Non-operating gains and losses include premium on stock repurchase and gain on lease termination. Premium on stock repurchase resulted from the November 2025 block stock buyback. Gain on lease termination was from a settlement of lease obligation related to a closed Bombshells unit in a prior period.

Current wording

Interest expense increased by $422,000, or 10.5%, while interest income decreased by $31,000, or 26.5%, during the quarter. Interest expense increased by $1.1 million, or 8.9%, while interest income decreased by $168,000, or 38.6%, during the nine-month period. Non-operating gains and losses include premium on stock repurchase and gain on lease termination. Premium on stock repurchase resulted from the November 2025 block stock buyback. Gain on lease termination was from a settlement of lease obligation related to a closed Bombshells unit in a prior period.

Previous wording

Our total occupancy costs, which we define as the sum of operating lease expense and interest expense, were $6.1 million and $5.6 million for the quarters ended March 31, 2026, and 2025, respectively. As a percentage of revenue, total occupancy costs were 8.9% and 8.5% during the quarters ended March 31, 2026, and 2025, respectively. Total occupancy costs were $12.1 million and $11.3 million for the six months ended March 31, 2026, and 2025, respectively. As a percentage of revenue, total occupancy costs were 8.7% and 8.3% during the six months ended March 31, 2026, and 2025, respectively.

Current wording

Our total occupancy costs, which we define as the sum of operating lease expense and interest expense, were $6.1 million and $5.6 million for the quarters ended June 30, 2026, and 2025, respectively. As a percentage of revenue, total occupancy costs were 8.3% and 7.9% during the quarters ended June 30, 2026, and 2025, respectively. Total occupancy costs were $18.2 million and $17.0 million for the nine months ended June 30, 2026, and 2025, respectively. As a percentage of revenue, total occupancy costs were 8.5% and 8.1% during the nine months ended June 30, 2026, and 2025, respectively.

Previous wording

Income tax was a $398,000 benefit and a $1.1 million expense during the three months ended March 31, 2026, and 2025, respectively. The effective income tax rate was approximately 64.5% and 25.1% for the three months ended March 31, 2026, and 2025, respectively. Income tax expense was $1.2 million and $2.9 million during the six months ended March 31, 2026, and 2025, respectively. The effective income tax rate approximately was 31.0% and 19.2% for the six months ended March 31, 2026, and 2025, respectively. Our effective income tax rate is affected by state taxes, permanent differences, and tax credits, including the FICA tip credit, for both years, and the impact of the nondeductible premium on stock repurchase on a pretax loss during the current year, particularly a low pretax loss in the current quarter.

Current wording

Income tax expense was $2.1 million and $733,000 during the three months ended June 30, 2026, and 2025, respectively. The effective income tax rate was approximately 24.7% and 15.3% for the three months ended June 30, 2026, and 2025, respectively. Income tax expense was $3.3 million and $3.6 million during the nine months ended June 30, 2026, and 2025, respectively. The effective income tax rate approximately was 66.8% and 18.3% for the nine months ended June 30, 2026, and 2025, respectively. Our effective income tax rate is affected by state taxes, permanent differences, and tax credits, including the FICA tip credit, for both years, and the impact of the nondeductible premium on stock repurchase during the current year.

Previous wording

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 22.3% and 18.1% effective tax rate of the pre-tax non-GAAP income before taxes for the six months ended March 31, 2026, and 2025, 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.

Current wording

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 net income tax effect of the above adjustments is the net effect of the non-GAAP provision for income taxes, calculated at approximately 23.2% and 17.4% effective tax rate of the pre-tax non-GAAP income for the nine months ended June 30, 2026, and 2025, 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.

Previous wording

The following tables present our non-GAAP performance measures for the three and six months ended March 31, 2026, and 2025 (in thousands, except per share, number of shares, and percentages):

Current wording

The following tables present our non-GAAP performance measures for the three and nine months ended June 30, 2026, and 2025 (in thousands, except per share, number of shares, and percentages):

Previous wording

At March 31, 2026, our cash and cash equivalents were approximately $26.9 million compared to $33.7 million at September 30, 2025. Because of the large volume of cash we handle, we have very stringent cash controls. As of March 31, 2026, we had negative working capital of $32.7 million compared to a negative working capital of $12.1 million as of September 30, 2025. We believe that we can borrow capital if needed but currently we do not have unused credit facilities so there can be no guarantee that additional liquidity will be readily available or available on favorable terms.

Current wording

At June 30, 2026, our cash and cash equivalents were approximately $26.4 million compared to $33.7 million at September 30, 2025. Because of the large volume of cash we handle, we have very stringent cash controls. As of June 30, 2026, we had negative working capital of $30.4 million compared to a negative working capital of $12.1 million as of September 30, 2025. We believe that we can borrow capital if needed but currently we do not have unused credit facilities so there can be no guarantee that additional liquidity will be readily available or available on favorable terms.

Previous wording

Net cash provided by operating activities was lower in the current six-month period by 19.2% primarily due to the higher vendor payments and higher interest expense paid, partially offset by higher cash collection from sales.

Current wording

Net cash provided by operating activities was lower in the current nine-month period by 18.8% primarily due to the higher vendor payments and higher interest expense paid, partially offset by higher cash collection from sales and lower income tax payments.

Previous wording

Following is a breakdown of our payments for property and equipment and intangible assets for the six months ended March 31, 2026, and 2025 (in thousands):

Current wording

Following is a breakdown of our payments for property and equipment and intangible assets for the nine months ended June 30, 2026, and 2025 (in thousands):

Previous wording

We purchased 177,061 shares of our common stock in the open market at an average price of $24.11 during the six months ended March 31, 2026, while we purchased 122,875 shares of our common stock in the open market at an average price of $49.76 during the six months ended March 31, 2025. As of March 31, 2026, we have approximately $4.9 million authorization remaining to purchase additional shares. On April 2, 2026, our board of directors approved a $20.0 million increase in the Company's share repurchase program. Outside of our open-market stock repurchase program, on November 21, 2025, the Company repurchased in a privately negotiated transaction 821,000 shares of its own common stock from a single stockholder for $30.0 million, paid $8.0 million in cash and $22.0 million under a two-year 12% unsecured promissory note.

Current wording

We purchased 218,561 shares of our common stock in the open market at an average price of $24.23 during the nine months ended June 30, 2026, while we purchased 198,200 shares of our common stock in the open market at an average price of $46.21 during the nine months ended June 30, 2025. As of June 30, 2026, we have approximately $23.9 million authorization remaining to purchase additional shares. On April 2, 2026, our board of directors approved a $20.0 million increase in the Company's share repurchase program. Outside of our open-market stock repurchase program, on November 21, 2025, the Company repurchased in a privately negotiated transaction 821,000 shares of its own common stock from a single stockholder for $30.0 million, paid $8.0 million in cash and $22.0 million under a two-year 12% unsecured promissory note.

Previous wording

We paid $0.08 per share in quarterly dividends during the quarter ended March 31, 2026, while we paid $0.07 per share in quarterly dividends during each of the quarters ended December 31, 2024, March 31, 2025, and December 31, 2025.

Current wording

We paid $0.08 per share in quarterly dividends during the second and third of fiscal 2026, while we paid $0.07 per share in quarterly dividends during each of the quarters from the first quarter of fiscal 2025 to the first quarter of fiscal 2026.

Previous wording

We have paid all our debts on time and have not defaulted nor requested forbearance on any of our debts during the six months ended March 31, 2026, and 2025.

Current wording

We have paid all our debts on time and have not defaulted nor requested forbearance on any of our debts during the nine months ended June 30, 2026, and 2025.

Previous wording

Our free cash flow for the quarter decreased by 20.5% compared to the comparable prior-year period primarily due to the higher vendor payments and higher interest expense paid, partially offset by higher cash collection from sales and lower maintenance capital expenditures.

Current wording

Our free cash flow for the nine-month period decreased by 20.4% compared to the comparable prior-year period primarily due to the higher vendor payments and higher interest expense paid, partially offset by higher cash collection from sales, lower income tax payments, and lower maintenance capital expenditures.

Previous wording

Other than the impact of uncertainties caused by near-term macro environment, including commodity and labor inflation, and our contractual debt and lease obligations, we are not aware of any event or trend that would adversely impact our liquidity. In our opinion, working capital is not a true indicator of our financial status. Typically, businesses in our industry carry current liabilities in excess of current assets because businesses in our industry receive substantially immediate payment for sales, with nominal receivables, while inventories and other current liabilities normally carry longer payment terms. Vendors and purveyors often remain flexible with payment terms, providing businesses in our industry with opportunities to adjust to short-term business downturns. We consider the primary indicators of financial status to be the long-term trend of revenue growth, the mix of sales revenues, overall cash flow, profitability from operations and the level of long-term debt. We continue to monitor the macro environment and will adjust our overall approach to capital allocation as events and trends unfold.

Current wording

Other than the impact of uncertainties caused by the current macro environment, including commodity and labor inflation, and our contractual debt and lease obligations, we are not aware of any event or trend that would adversely impact our liquidity. In our opinion, working capital is not a true indicator of our financial status. Typically, businesses in our industry carry current liabilities in excess of current assets because businesses in our industry receive substantially immediate payment for sales, with nominal receivables, while inventories and other current liabilities normally carry longer payment terms. Vendors and purveyors often remain flexible with payment terms, providing businesses in our industry with opportunities to adjust to short-term business downturns. We consider the primary indicators of financial status to be the long-term trend of revenue growth, the mix of sales revenues, overall cash flow, profitability from operations and the level of long-term debt. We continue to monitor the macro environment and will adjust our overall approach to capital allocation as events and trends unfold.

Previous wording

The following table presents a summary of such indicators for the six months ended March 31 (in thousands, except percentages):

Current wording

The following table presents a summary of such indicators for the nine months ended June 30 (in thousands, except percentages):

Previous wording

In December 2024, we launched our five-year Back-to-Basics strategy where we focus on improving performance of existing clubs and Bombshells units to fuel our capital allocation priorities. For the allocation of our free cash flow, we currently divide it among club acquisitions (investing), share buybacks (financing), and dividends (financing). Our financial targets by fiscal 2029 are to achieve:

Current wording

In December 2024, we launched our five-year Back-to-Basics strategy where we focus on improving performance of existing clubs and Bombshells units to fuel our capital allocation priorities. For the allocation of our free cash flow, we currently divide it among club acquisitions (investing), share buybacks (financing), and dividends (financing). Our goals by the end of fiscal 2029 are to achieve:

Previous wording

As of March 31, 2026, ten of the eleven existing Bombshells restaurants were located in Texas, with one location in Denver, Colorado. As part of managing our free cash flow to fuel growth, we are evaluating our Bombshells program in view of recent performance trends. Currently, we have one Bombshells location that is under construction and do not plan to add anymore locations after that.

Current wording

As of June 30, 2026, eleven of the twelve existing Bombshells restaurants were located in Texas, with one location in Denver, Colorado. As part of managing our free cash flow to fuel growth, we are evaluating our Bombshells program in view of recent performance trends. We opened one Bombshells location in Rowlett, Texas, in June 2026 and we do not plan to add anymore locations.