RICK - Earnings call transcript Q3 2020 | RCI Hospitality Holdings, Inc.

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Operator

Greetings, and welcome to the RCI Hospitality Holdings Conference Call and Webcast. [Operator Instructions] As a reminder, this conference is being recorded. It is now my pleasure to introduce Gary Fishman who handles Investor Relations for RCI.

Gary Fishman

Thank you, Rob. Please everybody accept our apologies for the delay. used will vendor present do ever again. obviously call set-up this – happening we and our use a to third-part the from We best to Thank you.

safe all phone, Slide listening RCI the call. our involve and uncertainties. down I you click logo. It's reminds that remind beginning Company the just call you urge may you of risks of That and see at presentation Information website; to that a I you'll our Investor harbor the find hear call you those statements find It our statement. you conference on Please presentation. to For or posted the it. Actual under disclosed Scroll update you and to little will can currently of on this developments for afterward. this to differ page. any materially RCI that as to result the may information Investor disclaim We results the a everybody links info from occur anticipated. to those X. obligation forward-looking Company want turn necessary in call and of this read take

non-GAAP X. please the of Now direct use. measurements you that Slide also explanation we to turn I to

RCI introduce President Eric I'm Now to pleased and Hospitality. CEO Langan, of Eric?

Eric Langan

the of and locations Keep $X.X of revenues results joining number the the We and of of so Total and the a remain able a our safety our open market in were had the quarter. ones today. closed June mind have pandemic able ended per are $XX CFO, period Controller, during Thanks been share. After loss that quarter April, this our stay the million. to or for just were and net you we and us far, loved our closed I'm get May million following reported Bradley Marshall; recommendations. balance limited beginning hope Phil $X.XX with in here third everybody Chhay. I that XXth. our to today, all for all through under

we to in enter quarter positive. our partake in July. procedures flow, we performed instead well of the in cash tax and all on give revenue generated we're star. quarterly operating order almost operate of an food operating a generated or update entertainment third Nightclubs considering XX $X.X fourth were in margins that the nightclub targets was at our $XX ended in had the entertainment. including original Bombshells May We segment open Operationally receivable, how to were the well be with restaurants standard income eat to slightly for revenue able large environment. you accounts to Looking $X.X record and June locations. The receivable. million million doing in To guests exceeded million cash all of Most that XXXX our with drinking to Nightclubs as quarter, requiring in and

XX have locations open We today.

in this how March. through back subsidiaries pandemic. been than five furloughs our competent become finances we’ve After and bring Our able months, more about to the extensive our to of team after members in more half manage business have

We more resilient. have acted quickly. been agile, We have believe innovative made the we and company

for we fiscal at of near-term the are the year, remains anticipated as flows cash start outlook strong. So not the business our

the over made Slide the to from understand Please next progress generate have we the XX quarter. over operations to cash to X. It's flow of the course important expect We months. adequate turn

low if keeping necessary closing we very and them as adept can, at costs have adept with then opening as at and locations, in sorry, reopening We I'm while the state change regulations, to – local due possible. very become government them

$X.X April to million number the in monthly virtually May to quarter, of of sales nothing million locations went course from the the open June. in While in over fluctuated $X.X

ways We new all this in we performance our and and falling developed social hourly restrictions. have effective math, regulations, environment. And serve distancing, have business occupancy, market, health achieved this our safety and to mandatory including while guests our

result, lines As are Attracting we problems. get into our had locations. to customers have common no a

business extraordinary continued slower are July Bombshells posted Xth X. We weekend, a team these turn operating sales compared our to during has the of A during were increases the the expensing job open. they Please pandemic. hours on before clubs Slide done steadier performance fourth terrific starting our After The in flow trends of couple under into actually to year-over-year have circumstances generally based a month May. quarter. the

to run Please revenue our [indiscernible] XX.X%. like annual and This XX% fixed hit locations an operating our XX% also with out XX for note million exceeds achievement all set open. was I incurring range. our out turn having we That margin operating X. is pleased Slide particularly rate $XX for this year to million. earlier that May. of would are target to to $XX to am We goal, locations in line closed April I early in costs this

the on at the sites the our we own two after during talking strategies. capital using $X.X the down close and million. to about proceeds debt of selling our I'm were able longer for to We Bombshell selling $X parcel term on of the parcels first During return and for invested. about potential sold-off some quarter, the available completed to work increase pay million. Bombshells quarter second we for excess is land This this I-XX;

This additional Salaries, of non-cash and million to staff food. greater a at to I-XX cost-cutting of gain that a non-cash. to expense Slide Interest number protect third shares expense of X% would of pay on and Bombshells a common offices. million reflected second partially result, the nearly in total pay customers to had impairment. weighted Cost a lower due sales was our we Nightclubs dropped million goods sale offset profit. added the quarter. sales related to about of subsidiaries higher average during segment were items due go on statement our offset was year. down, and X. Please in nearly it most turn parcel. no our tax There remaining a with than by debt got loss, we COVID and debt versus COVID turn two-thirds and a quarter. The about by operations. Bombshells half As investment as reflected proportion right declined segment had of I-XX X. the wages the and more X bank of the $X of a in quarter; This of indicates was outstanding in few I month due of XX%. SG&A repurchases charges operating from prior, benefit Please Slide operating over one-third. to percentage by our and reduced like partially to downs a Other $X last cost

use. you are on cash As and generation imagine, focused very we can

$XX.X As quarter with of mentioned, the we ended I million cash.

point assets, of is three and declined our time. is Excluding That's our for Please XX Current line to estate, that at loan, long-term the pie as liabilities key million. with SBA are the past by to $XX such been equipment. in performance. for debt that charts. XX% debt I'd $XXX clubs of like some real secured our debt million communicate to lowest The it's turn Page

has unsecured and Texas or to X% partially Looking the portion, a settlement. be potential of comptroller's forgiven, is loan. total at the the is This X% completely SBA debt the

unsecured XX% than in less XX. Please traditional to So the Page sense. is turn

amortizing moved reported, to years balloons the give we out As converted we million to of in loans half fiscal non-realty the to about or during first year, more or $XX us flexibility. have near-term

approximately million debt quarter. We million in strategy deferred servicing in have quarter, fourth in in of the $X – we the bank debt in to the payment debt defer continued due this the July. would due We third $X.X

to Page additional and have – be contract one the we Bombshells for build under For parcel parcels contract under for sold. Turn to more sale flexibility XX. under to strategy, sale listed

capital strategy cash slides, shares the looked that excess buy this to allocation show at we how world our part you put in using most still of to of We strategy. our is core Here's here this pre-COVID. back is

allocation on grow we more be hand than looking million. to capital currently $XX to are able We our strategy. to will pick-up with cash Then

our will greater City When Clubs, be locations all the open restrictions. with structure the future. more such have years, New our for As we allocating foreseeable flow to excess York as been we to capital five allowed this cost or past doing are for generate cupboard even of way potential Florida should our continue believe marketing with free South larger and cash

recap, believe months, reduced have company To cash with burn. the operating have our subsidiaries we we quickly Slide last to five over resilient significantly made and we agility; the and XX. more and structure acting cost Turning its

and members. personnel We team many rehired have fellow key retained

more lot a of have a business also and the our become lot in COVID. age competence of managing We comfortable

reopened to have safely businesses. and We how learned closed open,

COVID have manner. serve effective market guests safe to a and developed We ways business our in

called teams job. have milestones our dedication important ample and team been know effort, give third unbelievable. achieved our analysis staying given also long positive terrific quarter sales to operating I but XXXX Bombshells. the did well ended to clubs earlier, to have and Nightclub strategies. I members. final power. work, In all the hours, challenges of a closing, done like flow we out pursue continuing we and We long-term are everyone's the a special thanks we with margin small cash and would Open hard Bombshells Also all but has a In with

greatest are to assets. RCI’s Operator, let's the call questions. You open

Operator

Sidoti. Our Thank proceed Greg with your comes question. you. your with [Operator Please from question. question Pendy Please with first Instructions] proceed

Greg Pendy

of in little any initiatives even of or insight expectations? bit as learning or Maybe place kind just more, you you've your know you the put had that I margins Bombshells, process been the color us that? Can some onto give past above off in on paying little goes along. a you why the bit a were think

Eric Langan

better. it segment segment we and opened always opening locations pre the going to all didn't We our was were small once that margins, we a the opening Bombshell the of much Well, our separated said all costs, be costs because overall have the never we company.

a that's So that's it. part a, of

is other that business with long got many so and and have times it's and getting pretty thing other nice our locations peak we now we're – all still peak flow The time. a the closed have day to and we're peak much used seeing we've hours

meet a night popular in even drinks, at longer. because else and and open people of your more those money Bombshells the of Bombshells else finish go staying stay seeing to seeing have you your is drink actually becoming and appetizer place, evening someplace So someplace they're the spend anymore. was well, come we're more and and We're and since then has more and greet and your it. Bombshells even you food an and so couple you customers and

Greg Pendy

I more, of XX guys in one Great. just on that? sort the of – changes the XX past, that think crowd, differences you any That’s XX then over behaviors helpful. And And then mentioned going under and

Eric Langan

people with I feeling think come are to mask. wearing with everyone safe out I again think masks,

wearing I were they, than with customer we're the are everyone a State doing open now has that's clubs. And a an clientele mass. much older think than mandate, you course are especially for of clubs The seeing Texas base especially when broader in at been much help the Texas. The better us. businesses of they in pre, know, majority of mass big our

Taxes, Minnesota now. have We and right Illinois

only places the we're basically are operating. We

Greg Pendy

some I'll other chance. quarter. on Great. That’s Congratulations another helpful. the That's give Thanks. Okay. people

Eric Langan

Alright, thanks.

Operator

Vadim question Investor. Our from Perelman, Private Please a is question. with proceed next your

Vadim Perelman

want through managing job I go Great back guys. in very this difficult period. time. Hey to

which I got when aggressive different. in think to think very your what starting you was allocation your and time your company period, capital of is sort share So XXXX, policy XXXX instituted I about The and buybacks. implement

Today, much different COVID doing $X. something made free disruption, was $XXX obviously and have business, was million cash probably temporary to plus million this better million, You today. we sales buck, $XXX a a and $XXX post you're about flow, earning a although and of sales, like like power and I $X were very million so earnings share, $XX nascent a EBITDA Bombshells could it's

and trades the stock a do can higher when like to healthy give are yield, given anything set-up you XX%, the the resilient on for facts it while maybe those credit given even Well, what's advantage is very there you business? been obviously and, of a So, the doesn't market that take for, very the where cash-flow ground?

Eric Langan

open. get the Florida Well, open, going if change. Charlotte, of States, said, get were the to open that's like New think other we Or Pittsburgh, you Phoenix, locations York just some I know, some cities we that those drastically I of Chicago, we our or get other, other

we'll Those immediately run plus $XX our back once it's about right to If back to, businesses having Basically, million, per cash We're applying unemployment prices, we we're starting rate are think we start with situation, I as You cash come flow cash see million who it's people is think change mean, now set seeing or the at to train know, so million depend new hires come so cash-flow I on that's to be aren't X basically stocks at – be neutral our on stock I'm expand it kind We survives. goes that, customers start cash the anywhere these numbers. I per we so, range. we're that and million grow recovers to that'll I to to to hand neutral more of week. positive XX flow. as where to our cash our think here get $XXX putting on now and going going to that probably continue flow our having going the can then in. we depending and plus. to when on strategy. hand week we'll locations it. and be really are starting $XX customers our million existing our at new capital our cap and open, allocation sorry. to grow increasing on excess understand our We're And see start we we'll If $X.X going what

– smaller going these there. a to of I out restaurants, closings if don't And for mean, and lot is definitely this for the going seen they a of reopen. some think survival to reason right lot operators they're they're story now I saying, survive we've a not restaurant never

restaurants. clubs look And at coming retrofit maybe in and now. advantage that find take can lease so online right way. if properties We were can that they we service acquisitions are expand a because already we from be also Bombshells We can of position cheaply, to full can that

lot how I of in assets and anymore. a the the Club they going to owners they up got be think of future to industry Owner’s October, in the future the basically we're industry, the meetings don't their about can in if Gentleman's want of lot their a set after club decide expo. they I've with industry monetize

lines, of opportunities. a lot those So along

Vadim Perelman

you or clubs is? all on – hurdle What think That’s lines, the buying fronts. retrofit investing in hurry build. or or cost for you the super investments? squads helpful think think return all cheaply, mentioned, follow-up. the you versus about distressed in Along Like agreed through making rate about that those growth what deploying a capital that and on quick stock, just How do do Bombshells what opportunity buying exactly it of about How new either the

Eric Langan

so on risk, at on want I to cash, cash to times, areas is we we the talking the on to groups different I'd depending around basically so are about different Well model some depend really with three times going right franchising is franchise Bombshells us. – Yes. now. least two high the think, for it in want that's appealing now country why Right

hey, the based open or which that, run seeing right are going numbers we reinvestment of is out, going last restaurants There’s there always a of months, from we I right? that'll to coming think to market the times mean, I now. – and we're Houston bombshells think that depends We've see probably returns of on help going risk was the what that the some games have chains $XX called we – but I'm into competitive, more with times as said, here three to I out games guess, get less can't those getting the excited less say, We've are getting, they've just town going opportunities. basketball in is to to now. are everything reopen. – my and I'm at the calls more the our competitive in out I get of and football go as the need to rate, people from aren't about in and a public and stock I more stuff those two in about been if I use on there in on to that that at if baseball up going I now, based couple numbers lot had, Bombshells city, people overall low hurdle million become rate. us, said wherever think we're access calls risk, these market, entertainment high to regard, we're continue we now. to own And two is once Fans think getting I opening one so in so are I think right the games it's If risk and want

of was disposable that that spent all those entertainment. income of those So on entertainment not being on being types spent is types

Astros go those to watch Astros seeing more. game, to come people lot Bombshells the we're who would a the So down and game

we're kind think clubs of game girls some up pick at food with the at hang people drink and clubs of maybe out That's, seeing out – those more out the hanging hanging as what right and hang and the the and going well. and I get see clubs we're the to to visiting what now. that's out

however continues to entertainment amazing that there out it's we right forward There's long, move less used aren't now. that that there's – there, choices concerts, no all no as just the that for out competition. if So there's be

think have forward the get very as effect company going to a on positive open. I and move that's we

Vadim Perelman

job, great a a doing while for chief the to off had [indiscernible]. and lot, lot. a Thanks Thanks

Bradley Chhay

you. Thank Yes.

Operator

your Investment. with Douglas question. next comes from Our Please DSW with question proceed Weiss

Douglas Weiss

think you as was to come about, back? low talk as to are revenues expected, what happen a pretty right those little has revenues now. think the I kind just I Could bit service you Can talk as, you've of about Thanks. start before

Eric Langan

locations food get not mean, instead. of it. A charging charge. to I buy of the lot you We're the cover a more have open. were really reality clubs We that's just making

so our going food is those, to So going cover up, revenues down. be charge to be are our but

rebels will model bit. up a in a It's now service right code environment. this be at our down will revenues different just So food be little

and, food, much category now really forward it not iron liquor, concerned really and I'm really have as and we've to far as the I'm right are just get got where open Chicago, now. hitting about get the revenues concerned right in got open as rest service service, move in whatever. got that Pittsburgh, we'll that probably that we've to the have big the So are the, we've are locations Florida the get Arizona. as Those, those revenues that our are locations we we to out, the of revenue those affecting New to York,

Douglas Weiss

impact week Okay. And market? be or in; you I are I guess the from sort basis know, mean, because would to then COVID on it’s seeing obviously day-to-day main week You any of a news?

Eric Langan

does. We're July. weeks very of trying. Yes, Like it first two the

one to locations in You a remember June XX. we point got week we had later had XX open,

as low locations. we locations a think And to then XX today of have we got of XX down I or XX open.

are we yes, it. seeing So

would days; our were paying closed get voluntarily to five a we tested. employee few for locations. an fact, positive employees task. In all We'd of close for rapid have three reported testing. We location the a that We

rapid Once have get pay the is reopen, test our reopen. tested location increase that positive. employees. we that's to employees of no results we'll an If the, testing we'll test employees enough our so comfortable can some have negative So we get we're we for other costs for instant

we've those had to So time. businesses. types react quick come in We've they've any with gone things. basically very incidences actual But of our been and

in to I the last in think weeks, down zero we're instances five our establishment.

But warmer on of not an our mark day both were of only really sides one. from the believe customers. think helped. do were employees all I we mark one it requiring of side is issue have I were and the the

a, issues Now put we've, that at our customers, on required our I locations of having kind a all of quash our any on, now. real put locations we've of think

it's back, about big down bit a like So news they to people a a little start more. stay creates news seeing bit. slows the right? I'm cycle, cycle. media it little cycle fear, about a a create on fear It's really home The cycle, two If hits fear the week a right? business big news then

New cycle really that back. that's June. old And gets experienced people through what come we've

biggest weeks than The we has first other been the we've open. when week had third the week August XX of one had locations June of of

safety cases very stay I'm that keep and forward are provided get wear back that aren't and going following we right masks distancing wearing low everything from people mask their the and follow with recommendations, social away aren't that now optimistic large groups people can the So are where open. and new that,

Douglas Weiss

Right.

club And other the it then you they kind the to last not see do with question. What competitors Are side? your clubs? make there clubs – or some going as as happening other of your on Okay. far in hanging during of competitors

Eric Langan

I think little we're both. bit a of seeing

guys think some open. hustling, there out seeing you're hard, trying are get I to working that

guys We're We're some we I into going watching that that strategy I think open states is and open And go are to from for there. it look you've or in make they're think, can't some long-term won't. that. right will where and get our play struggling. – they opportunities think nothing for very certain got

we we I October see talk to will are what And who think regularly, be business. a us real see saying. telltale mean, has like locations country a business, his locations is lot making I he's only our I are just doing know guys make the ends and pretty any well, And some the we sign in lock meet. open. XX convention so are as very it. I of that's said, there. five he's struggling to of But And around for well, they that far operator some think very I not that multi-club not I

restaurants. the seeing in it I think you are

I gyms. seeing the in are you think it

you you and hair I businesses. in know, the nail are seeing think it,

on are this I give people our we're most the companies were present lot but what's our ready shareholders just And that that us. and of it, company as that seeing are to to opportunities border know best do You themselves going be up. and hope a going to can for survive

Douglas Weiss

Okay, All right. Thanks.

Operator

next question. question proceed your with Please Slater. Out comes with Martin Steven from

Steven Martin

it I a characterize comps calculate basis impossible when quarter, a consistently, stayed the to that it weekly comps? you have for was look for the know Yes, at but how monthly basis or would your you units on open

Eric Langan

say year-over-year. would the you of most up I I bombshells are club can It Houston is is up in XX% a particular year-over-year. XX% about give XXX% to amazing. a

down clubs reinvent open now. real back is the clubs. they ourselves. as trouble of again, and had been open locations for Some We consistently open. have consistently They've very are weeks, been closed for weeks, but three XX%, few two we've open XX% club. been haven't a can't you opened consistently to be The No

follow building, wait, our can said, how study working. down. follow that we how We and at working had X,XXX company, we what of We food unemployment. at said, I entertainers done. these Well, people entertainment, down. to be it and about back we started I compliant, oh, can is can't And opened the mean, rules enough restaurant money, mean, serving our and with we open And just so we with keep money speak you make a And, the that's can't unemployment, that's can rules we didn't we've to if think if to mess. and stand was the people close in beginning restaurant pay these looked okay, the people in order trying getting we've least to get locations become every really, We or have what employees job We rules? regulations. contract really get the be open plus a we've great I a new make we back to that some done start still X,XXX has in COVID food, – got you off we bars, close Okay, licenses. at some out make laid again. that we buy we what customer as XX that got permits. the

our now to best And back Because money? first. money. in people work try that's do do got for we work, how as business get we so then we us to what said, And to back okay, to people the we make make to

both? And work. kind that's do our we can to really people those were marching back – of two get orders, how So

let's to job now this to we we hoping October, country shows, is that's Typically of think very this. hopefully December, And have. kind normal. the as quarter, how this quarter we successful a we're deal. move think into quarter to If we're with Okay, what and that we figure with money can out get through this I that. And a we have make to November, continue see normal we profitable back as across the a when then And our of have we I'm back be open I for what did going and downfall, we two off quarters us.

first and because hopefully quarter to off fiscal quarter December, And of a November, just normalized that get we're October, we back then We have our next off a buy more then a little can XXXX, run bit. rate. back on maybe quarters

Steven Martin

bombshells focusing that bombshell range? shouldn't So said, is comps second, a that on end of as for $XX said to you as much rate with $XX the a be up run you upper million million at

Eric Langan

duplicate last – closer in zero $XX so has scale can XX-month months if I could right revenues. a period, we're the but If we closed, Yes, think included we was the April now to million. it April two for we million $XX to rate, probably run

can location one bombshells really we're idea to this what of trying I get all period. We locations keep good what currently open that's can work for closed. we're think going really that's have to And a do if do for. we XX-week the

with going are of the some are operate a location. restaurant. can't They State on have Texas that litigation on We we saying as that we bar

we ten eight about hearing I date days. coming up a in or have think

open back can that we successful open. shortly. that all locations hopefully at location here we’ll hearing have So be get And XX then to

So we're bombshells the of operating nine right locations. on now

Steven Martin

you respect, are Patron All a the and on had what want stand And that with right. Texas ramifications put that you ruling where does know Tax, out the I forward? court going

Eric Langan

Well extending right COVID everyone answer. court, on case with in to months of million now that for The a It's appeal. course, is appeal. is

case be going quite for time. that So is on some appeal to

were are the we just the we process those want We we to in the up have money. now, didn't fees money. didn't because give right paying And not

Originally our taxes. two have a paid for until We're moves quarters that go-forward forward. We'll didn't on appeals an before was pay. the courts collections a of answer we not the would as the in start. to thought have court pay didn't We just time from negotiating COVID of several not are normal, probably that in court settlement timely – a The the basis that because manner. now the pay happen. appeals didn't just we in it because such right plan That tax not we'd process moving

to we strategy So our had there. rethink

time going basis until try our that court the on get to and rules So such go-forward be a then appeals paying obviously we're to we'll back. tax money

protest. under paying We’re

successful in to a have if hundred So percent the right appeals court. we we’re a refund

Steven Martin

going the that to future? estimated are that you to pay in What annual basis an amount the not pay may is you have on

Phil Marshall

$X.X closed. they are about they I mean, was million COVID it open, closed, are pre-COVID, are open, right? been Well, it's $X annually. with are inconsistent, to totally clubs they million But

can't So tell I you.

something wasn't or $XXX,XXX much. Tax, Patron quarter this think I

Eric Langan

I quarters the Yes, two think. both $XXX,

Phil Marshall

first we Yes. quarter. most the Well open were

XXX four in first probably quarter. second the something the and quarter something in So

Steven Martin

All right, thanks a lot.

Bradley Chhay

you. Yes, thank

Operator

from Wyden comes question ADW question. next with your Capital. Adam proceed Please with Our

Adam Wyden

any basically plus not a Hi, platform a flexible environment, global years in surprising terrific survive including look, XX you've to to quarter. Eric, is pandemic. And this life your invested create

that give you had the what this comping operating to XX% what's a just on on compounding it's that back the in of So out to XX and But of wives bomb years here. able downturn. with And money reading to pat think here, of looks the up, said, you And yourself of your here we a are happy have you like We terms building to many couple door in should company our come. many articles we're team one closed, of issues been acquire look shells very XX multiples their to and this are up And ahead. results. so housekeeping there's Steve occupancy. in the way we're XX% almost it a look, from forward

So – numbers, margin when the nine Bombshells nine April, and closing off with did entire closed operating the being and at month about of of I opening you clubs with with end XX% kind a parsed whack-a-mole. then and the ons some and with sorry open

the you like feels not open like margins XX%. it are XX%, but as Texas, Bombshells million of the When in importantly, more, or with of all kind it will the the looks it looks revenue down, like are math, Now, more run open. get $XX look I of kind XX guys XXth numbers operating you maybe closer running Bombshells are looking to way

other $XX in for shrimp little seeing XX% closing. Now, Dan takes company. the I Gump. the he in he types an who docks, are of it's puts all XX%, goes and we to shrimp, where and think, fruit and sports with small assume catches but, bar service seen knows and can't into I if ever doing whether Forrest we the we're bit and million mean, I of into don't a restaurants acid could any restaurants to given what you market boat kind I a sustain then table fair and and that it can got all of Lieutenant in movie, there the probably catch know comes got Forrest crashed he XX%, out you you've boats the of kind look that's of concepts. mean, at this I like EBIT. And $XX million sustain

in only like things the multiples. market's short history, mean, the have conceivable a the capital have you've corporate interest I you closed. that of these if what insane, I assets then buy be value Bombshells. million, about to $XXX And valuation the mean. in XXX incredible debt, million high pretty lots none here, do I things, think could think aren't and assured I easily that it's you interest got borderline company's mean, is worth entirely going on are sole just Bombshells, and to the how on? it's got mean, in town about mean, that game of other people it's trading of EBIT million you You've where is I you depending level asset the out the you could to cross-collateralized. mean, I stock the relative think no $XX

Eric Langan

club Adam, club understand don't but not We in the business. say, the strip do business. I we're you they restaurant what strip oh, the think People estate that They we're in is in we've understand always our business, been the misunderstood just as business. business, a are understand real company.

additional new comprise properties non of equity and huge we been a XXXX, but We're off another on our to. million been properties able entertainment lot going businesses business. sold $X.X we're XXXX year our that, basically another estate where cash real We a up able even on we're that tap into to debt. take that our prior bank refinance, since have loan refi, now it to source some we And Bombshells for newer properties adult of have a now all couldn't us XX-year our us, as these to – of finance in put and that setting we've has save and a next roll

Adam Wyden

ask me the a do $XX before a right I you open XX%, before you and that's on mean, any looking million close that's franchising. up margin you're question. million Bombshells, if separate consider can to locations $XX XX% well, just doing Let probably at more guys willing, you

who a opened a I'm between you the got worth real mismatch are value the equity value got strip which it clubs, used I have to of the $XX shit, this it's of Tootsies mean, any with, block, I on Chevron wife there was a mean, I probably people there line X:XX short that this I saying, my back they I ridiculous saying, block These son, around open AM. with say there the Twitter now or that's option God, mean, boogeyman million, at at was worked real to The right? my manure, standing right. go XX:XX a like at one this to short were just $XX and no had line was these Tootsies contracts $XX million, was a buying worse arguably you've as go right, So and thesis, So ever Tootsies, estate, don't something. mean line you've in to strip sellers tons club. he estate. value. to you be up. they and look clubs is Florida, in million around lot, in going Costco strip here the put at like mean, you've that PM company, and got kid Tootsies, worth right. to thing's minute oh of used

value are for getting any it. You not

in partner those the every I Bombshells. Bombshells you well out many company. bases are think now, operating And you it, Not we're I you back, that get a strategic roll right. you flexibility franchise How give partner is shit, in if XX%, on in Bombshells that you the And XX% United about sell $XXX and this and can so told gain go take there the so say, stake right you partner think you I million, to XXX mean, going my a to much, in the you of States? it question is. strip have, ton allowing right. to $XXX a shares to you club. going States strategic financial And why do Hooters mean, we that into a United buy at we're to I right. small and a base, of help a to can to mean, whatever value could, monetizing Hooters have you in war, million, a sell military repurchase not there's could holding cash military only to that Bombshells nationwide probably shares a ton or

You have come Bombshells? think doing I getting mean, how strategic it's one question going Twitter to something mean, I you coming is a these people knuckleheads do back. mean, of no are back. saying, on ever open. about, with just I

Eric Langan

think Bombshells’ said, value, another that's sure with probably the concept somebody multiple past I standalone And soon. that's we that and time with away only we've we're guys have But the knowledge, knowledge. I think sell talking knowledge. way now. opened, I operators, options we're interested It we us not it win-win to to take I what proposal, smaller mean, present Bombshells. a the to can weren't to it for golden we're actually us capital, the that's a negotiations it, it we always at I got I sit think, same of the we're expand the they been with with to do. we recognize restaurant partner plan we the process, had down at not, restaurant can said everyone. down – process would going mean goose you Bombshells. and company because, course now. to right are out up And We're actually guys, We've before take we with we're with sit if time, looking we the monetize little done been at own There's the for on at right on in always the capital. we've bit if we're in talk who that up longer, entire we to some the speed the can value past figure I real look more know going have speed than bit cap worth, cannot now we're always It's in but all cheap, what, that. we've our the it's we to but are may it and both, franchise first giving we mean, capital company to would partners. talking right of for the going the And and sign it, capital But with us so point, we're whole before? a going like the is franchisee we today. to market In created of value open. And something got shareholders to looking little the a we if to it. hoping If love And were We're a started if worth the have find I and Of think, for company. always the what not open really help call didn't like have do the we listen. don't operators, have the don't franchisees we've I that knowledge, would guys the who somebody not are our

Adam Wyden

you something. ask let So me

Eric Langan

Okay.

Adam Wyden

XXX at intuitively goes have running is margins, are concept. at kind looking go better, goes to there saying XXX, Hooters saying XX bombshell looking everything, just maybe build the I'm number we can't of Now, you're food right. but right business, why right, like, of XX yourself, got of any Hooters, I them you've So and not out reason Bombshells? at Maybe of XX% going business, concepts – you've your every is out like mean, right. them good, the works got crap, I'm

Eric Langan

is think a not Hooters I Yes, realize Peaks. to Bombshells that or that got Twin people

there, kids generational, cross cross a people their comes bring We there. everyone are like gendered,

long. we little flaunt a after themed our than get Twin a p.m. at quite are risky don't base. might – XX% our night, or basically our we our get stuff We of and rest completely Yes, we weeks, business don't XX% they all customers, not but during have We of in some so we're And risky Peaks, risky a little competitive. the themed a we whatnot, where daytime. female-friendly, XX:XX and during mean, catered girls, Hooters day weeks is summer do Other only but have girls their the more business family-friendly I restaurant. the customer

Adam Wyden

I why have units? against mind there vacuum, any it, you and strategic partner XXX So right is there be sheet is couldn't in or reason operating in a this balance any… your execute but right mean, to the the assuming

Eric Langan

in our XXX overlap. XXX do was much Bombshells initial without U.S. we initial the target, – could XXX, units was our XXX

Adam Wyden

why why point, could trades, mean, have mean, the you built. don't got insane. you life I in these that incredible. even XX% it It's who always half I have stake tweeny. got monetize buying, sell do and and you ability, where entire or I absolutely this these You Twitter kind knuckleheads the Bombshells of buyback building worth like, company? put with XX estate shorting fact has mean, I rights. equity IP trades or the concept mean, can at options myself, of just a it's I mean, in you the mean, say I you on got kids thing And is XX% wouldn't it's market to your is disrespectful. insane I invested the value And private than years thing. and this this you've I firm mean, The of that someone partner real more criminal. your cap proof-of-concept. to you equity things? almost you've the

Eric Langan

I start with model after don't our I be thing but, what And coming as the is shape people going a might people this know are realizing to club. not that still and COVID misjudged the going what fact. guess, are thing It's long to hopefully the think, I like just to happens, close. think they just real model – you're business would they to habit was that it's back I business good a solid, still may pretty be they're clubs. work, as that strip come mask, your in That eyes wearing our pretty

Adam Wyden

you ask me something. Let

I get And you COVID mask, going Blasio indoor to down, go two-sided one masks the So cases York got With be there. keep are Arizona there's getting and where marketplace, with up you've you No, is it's able this open the you've to mask markets go $XX de New working. you've people York, New seen EBITDA two-sided Texas mean, been seen closed forever. million I good. to right. has right not right. is effectively, open going zero dining mean, you and mask two-sided wearing

the are which to yet… that well, it. is end think is right, Florida Like sloping XXXX low almost a close and Florida. mean, are think XXXX, of just contain by You to mean, you working $XX I we've open I able where even up I red certainly a open Florida, these Texas shown don't I But states I is been everything mean, EBITDA. they expectation, this unemployment, down. you there's – forward. that we've of mean, think mean, I mean, assume the get you but event. reasonable I million

Eric Langan

the XX by don’t internal goal. September get kind You that's of hopefully, been

have open So by you October don’t X? everything

Phil Marshall

I in Bombshells math $XX said XXXX there's run April, sales right. Musk $XX at XXXX. And let's XXX, back or is zero just you're by million, Elon be say cases assuming that going are to no new. think If I Steve the million running,

business a growth at million of don't end free in You right. business, first quarter, be $XX looking were the million, you at get closer mean, the think incremental XXX EBITDA I we'll if the And flow $XX Bombshells. have I be that could probably at we're to the $XX something was to to doing cash looking $XX pre-cash $XX and $XX a million those $XX at on a we're numbers million $XX close could million million, in EBITDA. I with of million million, XXXX. looking open mean, everything

Eric Langan

in when everything projections has at know think, a doing as for a because that world. our were the quarter I to these you're all my going world are already if forward, more is But at, one is perfect than perfect momentum up big be going our that such for pre-COVID. the – drastically thing original paid. really sales, in they were fixed we of what we've where increased absolutely all we seen that. opinion. no reality the talking as probably locations do And Look we and Everything probably better because is thing we're grow should somewhere keep know, between doing and is margins where do we can we end events, costs We are open there's high in type past, to sure

profitable dollars us why us, we revenue month, average that's is of the for from bottom. very, focus dollars dollars every revenue the very time so those revenue – to one to each end we those all month, the that incremental important. we of each are gets every that That's the on need the at why our maximizing location over because $X.XX, at So And what extra that's rolls down do $X.XX way those

Adam Wyden

a comp are the in right. that's in math, just the million XXX if Bombshells, just I it manifests served about think Right. I mean, table XX% you two the right? XX% of of like – restaurants the the right. years. say in service mean, that got a COVID think And it, closing, right? If and XX% you this, table, let's XX% $XX If and sales in you of nightclubs, itself nightclubs, have over pre the comp set that's about

pay to XX% a So in stack I the comp, when mandate a I I comp that's call it, you're cover bottle the thing sales the same-store charging XX%, about, of “your you to you mean, $XXX thing this line. with basis, at are what charge and call $XX making now bottom you least or I what XX% people nightclub between because dollar make have XX% the incredible. bottle estate $XX the a it's I business we're year, I incredible flows unless a a to a unlike, you you're you tell the mean, that all because own impressed so night, real on to should would charge allows competition top, you million it's it's $XXX mean, $XXX, you service. as the whole well I admittance. right. like, EBITDA clubs, of occupancy, talking because the a and and mean, service. all said, $X,XXX $XX On flow-through of XX% $XX a margin or variable in to all about this take closes”, $XX charge new it's difference to liquor the all incremental cover that talking liquor, a being get it mean, other $XXX EBITDA can't the of is that all, was from margins,

Eric Langan

open that It – door, definitely money. not or there's part we that to line, kind want don't wait day you line. any we to side, have to increases you haven't definitely just you has money. big that the lines. of just, certain. of anything been kind it's have we're spend of And of on that at the people a number in done is And to for success Bombshells, for money don't all But the the but still have It's to the then spend locations long. people kind busy wait control way that'll price in sure, spend of a, And if us been that for a club Bombshells of

Adam Wyden

you've single restaurant operating that, it's mean, company don't walking there's I I I of a are & people a incredible. Buster's a comping get mean, own like, mask, these have fact difference mean, on operating Petri the this day. to estate no It's I a leases dish. that I'm guys tourism and we're generated I are kind calls in to Caribbean, bucket cruise variable think the look, forward of onerous real distance. RCI or at that of Dave that look, I and everyone $XXX. the between don't all your insane. customer Royal put and it's restaurants this one this positive that is really a tremendous your want I people there if you the I'm a there's and wearing a got you insane wearing I job. that's not And burning this to opportunity senior they're mean go that of stunned things, look stand a And social cash it's just ship. whole mean, thought boogeyman staying here, just, oh, single flow down cash all, same isn't restaurant. I or there's a creates. good you it. Airlines up And mask, citizens model. $XX, couple no, Caribbean a these I in Royal look, mean, thing the every into are thesis $XX, of seeing I quarter. kids, the either. first it's on as market doing but conference it's and

job. great a X.XX% on I again all I look congratulations ride, And this the got right. So of forward to thing.

know I'm everybody there to with So needs you.

Bradley Chhay

you. Thank appreciate it. I

Adam Wyden

You're welcome.

Operator

private your next Our Max from a Ellis, Instructions] proceed is Please investor. question question. with [Operator

Max Ellis

Eric, on great congrats quarter. Hey, the

that one you had had told day two me you ago, you ago, years but asked have had would nightclub the really… save If if segment, you years I you or Bombshells me crazy, two called hoped

Eric Langan

section there. I section. and before down we're getting only X:XX just my up like, was the the food, eat lots is we these six lines people said, over build all we're look, wanted there start. I of where prove open to had to everybody, right which a the the people up kind did. that sections from out and numbers other the seating going the worry, got team Don’t I was our said, of worry. locations went that why And We and I amazed outside man, I afternoon, the in Don't concept. I afternoon, mean, It's we believed two now. from. to ready sit back period. locations. able They're And hurt day at an But it bought line looks always really XX-month mean, went like, look, those amazing. in o'clock There I to understand pretty in to The I involved, concept, was okay, they anyway. of I lot we're at have sometimes margins. do the there mean, it I that inside to left – ahead those even the in the go at look, we And no X cost I'll in that really we're sat And there go locations I it in crazy. these open. believed six come

Bombshells the are remarkable how it well So is doing.

again. obviously busy, growing have are quick, pains We get having when that we that you

had I we Some envisioned many all of man, people like, man, laughing fast all this we our guys never day, but were day long. down, thought this every this

this we really team putting in definitely been out a really, us and quarter. bailed all the they appreciate that efforts in So hours And they've of really has lot done.

Max Ellis

a absolutely. Yes, of whole deserves big round The team applause.

happy. it story the tall man is which think the doesn't in I six-foot this only everybody right who matter can't liquidity My is very average, knows that maintain five you stock was the matter to during of biggest debt-holders, I'm worth if is, shareholder, pandemic, five see a if and river it priced you deep, in it As – COVID of any your under if concern a doesn't now on $XX drowned criminally how you it it's through? years out called by $XXX, can or it get matters, the liquidity feet

Eric Langan

will we until you And have as May know, April, months deferments three and for June. – for our

end first of Our due payments the became at June.

payments. we note June XX time started our all started our next payments. we paying payments. – our payment. So payments first of is XX, August Again, we of paying last we're in bank paid our the payments our XX paid all making And June July through was We

come payment next that after XX. our Now will on due August

We have banks, the letters our XX due of we’ll become September, next end deferment October asked August for received with this deferments deferments August, – but for the XX, have do not October, and banks. November will from of end working at we payment on starting the are But point.

us both on the $X.X We which bank up on banks $X.X give deferments. and give depending us or working that, would to are one million free between million

payments. if see weeks. But even I make few progresses don't, we'll think, that to so next they we'll And the the over manage how

what are of But of quarter. open periods all it Our the cash time we've throughout depending locations closed at payments. tight get our could on really paid different or

have think I vendors. current our to with attorneys with is all XX. through really our the, we up for caught June with our We've paid. current vendors, have paid what’s We're important people payments our that required of finally understand been again. we're paid to We be all

days. back we're teams. with everything float back to there XX-day as if our to is So bill a as is we're to But normal legal to normal. our XX-day Basically all a within these normal back far payments,

payment don't real yet. missed a see I I issues. so And any haven't we mean

mean, liens, have issues we So notices this at before first, have any or of late type about I even We'd don't on have to for point. foreclosures, while a like be we'd a worry that. late or payment right. to

in we're good shape there. So

of have We cash. plenty

tax flow in – That either the the overall sales a finally that money over August, puts of we're to like negative, flow first said, were it good for our cash from $X tax now position. of quarter, back that the July us. amount I get we On a we did in did much some this think, refund from We I us August. XXXX income the have we got And late probably around filed. week We IRS And a December think but I million million sales, or coming in think I should with cash big positive hit sometime back pretty returns right will little $X.X wasn't we first – which week a August, significant at in the just July. in for quarter.

we're So, And I the more like to locations be think, good around hopefully get get open. move hopefully up, school September. to country starts just And through I going go. forward by October everything starts back going, we said, we'll

Max Ellis

things Yes, were absolutely. that. to we running all agree tight. just And I I did think not – imply that I mean

Eric Langan

now. No, appreciate in wanted We're but everyone we're right that where a our really very right and ability question we're spot the now. sure no there I because good at out not in make I confident understands, to really you,

Max Ellis

looked the to facility? street to refi even that potentially at debt the into under priority with debt have And some actually main loan you existing all point, cheaper out program

Eric Langan

not can a of of We've see as the course we we one entertainment we the for controversy are of it's paid take We out money just looked the employees want companies of where And the for it. it's any huge but we adults stuff, the The did at lot dividends nightclub company, PVP a didn't just from restricted tea. of lot needed us our results, that to because paid And and able for keep for on it's money. our you any owned the were of shared today. PVP all, to worked some at our us. we Bombshells our services and of very PPP public not Bombshells cup what clubs and we be with and got

Max Ellis

just that's the say on quarter. I Oh yes, questions great Well, have. I wanted to absolutely. the it congrats on

I think, really a quarter. is For testament. great a It it's me,

to up follow Thank the you. and really good continuing and keep forward you for happy work. to the So Look shareholders. progress the

Bradley Chhay

Alright, thanks so much.

Operator

with Our with next question is please from ADW Adam proceed your Capital, Wyden question.

Adam Wyden

note a revolver, basically is whether to guy's I incredibly lenders you have I business. not a They don't you your adult mortgage point on have people them. you the pay want you reality is any debt zero. you to question, want can other like pay mean, you I to that real take in the debt that isn't building theory, saying, decide to to estate want have liens is don't to to mean, this don't cost out have mean, in you against is, take don't wanted I don't but shoo, I your could have people don't or you your all pay to seller of if you’re I unique follow-up. that think business that your pay are just whenever is Look, mean, want. They night and the clubs finance, and look, you back. back. Yes, me want take model

that laughable, even fact liquidity people is the asking right. borderline about like So

cash. of tons have You

from sell that have can you like real parcels estate that's Bombshells You estate real sell not, the can around. you

salmon, you've mean, are people I like stake mean I a in sell you a could Bombshells You right little in floating cash got – are – mean, you you're fine. mean, now. I I

Phil Marshall

options have available. many many many, we many, have We options –

Adam Wyden

out mean, lever tiny sell away you it on. I stake from million a are for can rear mean, $XX what it stake is take up to the $XX short you of the the can question not it's bigger come like going sellers? to pull put Bombshells, a – and The I your Bombshells mind in these in cash guys and shouldn't are end going I guys mean, million, in you squeeze to – shouldn't it. style. I understand going business. of They they be make mean, like it's the on question the it's don't Twitter, be these question oh, like, you're my

a American This no day. You're Airlines. burning of tens isn't There's millions of of capital dollars intensity. cash

real own You the estate.

going it's a I this shut joke. costs was it's better can find is guys. take mean, You right laughable the that us borderline I zero. joke. cash? the to So It's to a can question you liquidity, before didn't thing that freaking where you are you the mean, these and saying down guy kill have

Eric Langan

think, they estate. It's said that's he the there, earlier, complicated that who that's – was said, like right their He was was just of And the understand I and a just there. think and that’s don’t overall I I restaurant than own property talking company when what don't out it leases company. all real Well said I saying. you like doesn't their concern typical asking you more to

how be working we've can now I below that's as allocation And as money years goes what for we're ranges You're stock on the day will refinancers one get mean, the owning right been and we And it I borrow we our right, stays in stock. of target done go conservative how then pay able and we're we to is of we that's and these that off things our move like we've – capital real because rent all these estate at out. of just in much all looking principal every against again. we through these focus and Because in the price, forward market, back month, to things, cash so have the pull if every our to how say, as back. we're stays the back buying down

Adam Wyden

cruise years. I lot huge driving look, I number. extract reality are look, stake And of autonomous for I mean, of lot or a you they your mean, the I their and sold and I and took – spinning maybe think I was Bombshells the for ways brainchild. from talking look look, are a it center, mean, Bombshells is it selling of front heat about now companies, at monetize GM mean, in GM. off think, Well there's golden a to division. I there a goose, And plenty think, is

rights the lot I'm predicament asking shorting kind that or knuckleheads the your is accounting this your bunch in stock, can what franchise not from I'm cheap. of out says business, you mean, can't give the Well weird just cards. where you won’t and on $XX the a Sunday. collect the our solve you an you got when fact mean, And finance the counting subsidiary someone front. The figure with give to you the can and And like you are still you what XX that is, start do it. franchise licenses. you reality at doing Bombshells, – sell of a when business, me it one you've way is owner that’s So [indiscernible] own couldn't of you you've algebra tells sun buy just got the saying, you look, partnering questions because don't get only that rights give the cat a you I you million, go reality money it you shine. own. no when fine. levers got can different now it, with whether is deal them got why – you master guy and selling it's to JV, these maybe the you've I you that asked it give the and there's incredible start a you guys master pull, mean, it's franchise the franchise a understands I this and ways $XX is, royalties and they'd up you million $XX loyalty million, they from that skin

not about. I’m money. our count can’t worried You

Eric Langan

out. it figure to going They’re

Adam Wyden

to it are out. They figure going

Eric Langan

been We’ve showing.

Adam Wyden

good. You’re them. going to All show right sounds

Bradley Chhay

I right Thanks appreciate it. All Adam.

Operator

questions. no over Fishman At to time are call Gary the There for back turn this I’d further closing comments. like to

Gary Fishman

apologize again. happen the Thank please joining subsidiaries I stay you. night. not you, had everybody. Thank for Thank Stay On earlier behalf people of like would for that us. the healthy. thank of one safe, Eric, thank to the our you you Eric. signing And And everybody will on our it in always, visit delay on company call, you, as or and restaurants. good and Again clubs

Operator

teleconference. That today's concludes

You this lines participation. at your for disconnect you time. your Thank may

RCI Hospitality (RICK) 10 Aug 202020 Q3 Earnings call transcript