RCI Hospitality (RICK) 10 Feb 212021 Q1 Earnings call transcript

Company Profile

Participants

Gary Fishman	Investor Relations
Eric Langan	President and Chief Executive Officer
Bradley Chhay	Chief Financial Officer
Gregory Pendy	Sidoti and Company
Adam David Wyden	ADW Capital Management
Steven Martin	Slater Capital Management

Call transcript

Due to licensing restrictions, you must log in to view earnings call transcripts.

Operator

Greetings, and welcome to RCI Hospitality Holdings conference call and webcast. At this time all participants are in a listen-only mode. A question and answer session will follow the formal presentation. [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

you. Thank

under Slide you our call website, the It call call any presentation from and information of you disclaim receive uncertainties. the a as click those involve you Company to Actual presentation. Statements That investor find logo. can on and this We just anticipated. and obligation listening reminds Eric investor result those you on occur hear also to this phone, Company will Info that Eric. For take you RCI to risks materially posted the RCI the all and currently Forward-Looking Statement, everybody measurements turn the scroll update that X. may to at page, results find Hospitality. information of afterwards. I differ I a to it may explanation of for in I’m to conference that links now want and Langan, introduce disclosed And little turn Please necessary pleased of X. down remind our Slide the Harbor Safe this that is to will to President we our of non-GAAP you you the direct call. of beginning RCI developments Please CEO use.

Eric Langan

for their Nightclubs After began. for us the and ended since our the Thank period reported Company with you first performance Chhay. joining generated results quarter today. XXst. the market Bradley we CFO, here I’m our closed today, best December pandemic The

and and profitability and Once loyal enabled generate team thank cash our again, employed customers, GAAP to continue free operating non-GAAP and us results. investors. produce net cash to build we also steadfast strong keep a members basis. our This We Bombshells dedicated on flow, teams achieve

cash Looking beginning our ahead, with segment. flow, free fronts work grow are all we Nightclub on to to continuing

are conducting for the right acquired due We evaluating and a more three site Dallas a Bombshells, in great looking on fit. of and recently locations. acquisitions With area number that are potential we diligence

San also talking franchisees collaborating additional franchisee in initial in parties Antonio and with first location areas. potential are We to of closely our for other on their search

as backed We effort an a estate in principal the part lower effort of are reduced into majority of eliminate interest long-term to results our payments of refinance loan real debt reduction short-term all rates, awaiting to appraisals and balloons. our overall

outlook State and governments and seem Our COVID our subsiding more call. be to with holiday increasing. is The than to back a positive is more people letting wave last on comfortable go little restaurants. are vaccinations local

our reopening this opened other are past City excited clubs XXth. on and have to and Chicago happy Illinois are weekend about We New York the

wrap there question-and-answer to to While have at restrictions with is return back Bradley and time to to then and financials, session. And I nice is will locations, many work. it here teams the our are review a occupancy up

Bradley Chhay

Thanks, We total those Eric, of in quarter. prior first good XX% revenues the afternoon is and who sequentially reported prior quarter’s $XX.X to tuned and on on difference fiscal from up of year-over-year. the the average down That quarter. call. X% allowance. extinguishment was tax from came EPS The non-GAAP a was and went gain $X.XX, GAAP million Weighted debt outstanding EPS shares reversal $X.XX.

had we XXst. cash, million at December $XX at Looking

mind, through were consistent more down $X.X and locations but continued a it basis, to from more million free segment That from quarter. XX XX year by from the sequentially end. clubs more $XX.X this Nightclub clubs in X.X%. was on year-over-year operating clubs so, since our doing which market, quarter Page On up that is at are opened were open however, XX% Keep basis, totaled the the Florida well a opened quarter open quarter cash still are the operating first first that in million. prior or and color, To some importantly, cash that are time turn in Even is by revenue ago, we only two capacity a was are net for environment. guys off entire hours. quarter pandemic activities to South clubs, full First you give The $X.X flow Please biggest the have operating same-store started. X. the normal not rebound sales million. with were

operating strong opened XX% some and today. you color, in our that All same-store basis. Page continues benefit margin of all of particular, and quarter without at sales a in year-over-year during on all a was X. $XXX,XXX to the is turn turned segment, margin prior and to million line sports The weather. XX% also well, of $XX As with totaled locations. another Total performed $X.X sales To result Mail XX Bombshells up this, in were income warmer please performance, operating and XX.X% added Bombshells services give million. were a the segment quarter’s open strong lineup XX at and sales. in delivery locations XX.X%. newer Operating be expectations

wages savings our audit cost initiatives $X.X This range the cost. year segments, due of sales. In XX.X% mainly As about loans calls during from Bombshells discussed offset mix, reflected our SBA XX% of the and the range previous now by reduced This variable to lower This tax and pretax benefit will the more of also as also a $XX we Nightclubs and Page as expense partially particularly cash was and in higher consistent reduced have million extinguishment. be we two-year In marketing turn indoor corporate sold, segment, Salaries to XX restrictions. to in for reflected as and in non-operating last related lower get loan spend we to the follow the fixed primarily This the revenues first This hand, million. impact to lot performer more sales was first to continue the revenues momentum QX the due operating than the tax quarter salaries X.X% $X.X to We advertising down stayed $XXX,XXX. of percentage of of review XX.X% in business, compared totaled quarter $XXX,XXX. mentioned have gain us, and debt XX.X%. XX.X%. result, was few last the to of less of impact by to fixed service due $X.X we at items of amortization SG&A up were XX% compared of quarter starts and was There sales was revenues. on caused of million was forgiveness. the Margin quarter. Interest on from of to we forgiveness of Page due a expense turn down a percentage a to X.X% call. was of the Depreciation at throughout the were to income lower for and XX There as traffic as and during allowance million, XXXX in revenue a level weather goods of to built the change a Cost the continue legal high. was reversal a fees Please compared of paid remaining of the ended about benefited X.X% prior Bombshells and mainly operations. XX% X warmer. expect strong year. and Please revenues, debt food believe with profit X. and to a valuation lower in statement the a a last We of day revenues that year-over-year. the compared the revenues.

to rebound free million. first sequentially flow $X.X quarter, the to cash continued During

We have continued flow pandemic to stay positive cash since the free began.

also doing sequentially to free flow As free from cash of cash. revenue improved dollars a use a of percentage are we XX.X%. measure revenues, well We XX% how converting revenue to cash of as flow our

declined debt to due scheduled our year-end from and $X.X million Our extinguishment debt pay XX down. September

almost now lowest are level in debt our years. We two at

also consists respective in X.X% now secured business all estate, of At saw is to our good from since ago. X.X% about X is year $X and related debt. seller shape. We are our it secured that The categories and they assets, applies. XX. debt Please debt secured Secured of in the Page XXth are the XX.X% Settlement. pie the turn decreases Texas of continue $XXX,XXX by the which represented and other real debt September by finally, the on settlement. a up clubs for of be to million by We by financing XX.X% clubs all This about chart. secured Current million, down from by September assets to at $XX only the liabilities listed Comptroller to current

loans totaling review to December turn SBA week, The consists manageability. that what was unsecured, is to forgiven. loans represented Last also by unsecured that Now debt XX on of X.X% moving to of listed debt XX.X% our one another these and Page XXst. as our two remaining our the as Please $XXX,XXX of.

paid non-realty $X.XX in and reported As can on on added little elaborate we partially second first real the down about moved in our more a that call, last bank balloon a we estate small bit. In and million Eric quarter, quarter. the debt, during we

turn back Thank Eric. call let you. the Now me to over

Eric Langan

Thanks, Alright. Bradley.

Now the announced next we turning to Bombshells, XX. Slide XX. plans fall, for Last

in the of next locations unique units. can a and self-fund double we prime can or new some compelling we the number to buy prices. believe proved Bombshells access and the three-years. lower the company-owned previously concept. locations the cases, at over and lease viability available, of created pandemic efforts significantly have has Our not opportunity, easily We can them We

suburb acquired to to in Cowboys in home with announce million amortization. is blocks debt Texas a at rate XX-year $X.X bank from ever Arlington, a the is Rangers fixed great of $X.XXX paid X.XX% just great of Texas. Stadium best also. is and We for a at have on We Dallas and that debt cash the have we Arlington five-years are million Dallas price received. the we $XXX,XXX a This which and AT&T pleased site a the

and due also three other Texas conducting We sites, diligence on one two in South in Florida. are

In restaurants locations working to that announced for late in their addition, Bombshells, actively call open local three we option we San an first Antonio and and outside holdings. franchise their group the a In of well-established private franchise. the city. Terms franchisee, on our of three opening December, are more includes

ensure collaborating their with of are first success location. to the them We

we are signed have Page to appear XX. a franchisee well we lot in of the inquiries. of qualified, building be has and that News turn leads, Please new many process first these to generated our

We have new a to talk of to continued lot investors.

our to like review capital would allocation I strategy. So

cash Our to shareholder drive free increasing per is value XX% at to a compounded share goal on by basis. annual flow XX%

those outlined generate more to in similar cash. per focus that William the Our share companies cash the generating that the book, on is cash studied flow strategy author Thorndike allocating to outsiders, and

other strategic these actions, We subject, different with course, strategies whether been is three rationale. XXXX have applying since there of to fiscal

buying estate We is specifically first in acquiring look the EBITDA, buy good, using three at to four adjusted mergers financing solid The at right when and the clubs acquisitions, real markets. right the seller times to flowing value. market clubs cash

Our cash-on-cash goal want, market seek awareness to least can’t XX% our second to XX% XX% annual Bombshells XX%. always sell to expanding and critical earn is organically using buy acquiring returns. returns of clubs we when to grow strategy Similar specifically mass to we least to clubs, at is to we Since at cash cash-on-cash generate to develop franchises.

is flow per is third than our the cash When yield buying The XX%. more free back on shares. share

to-date, us is plan are shares we provide more comfortable That cash with on exceeds approximately in last is quarter, average locations Please an first common the the XX. same Page much to open. our pandemic, the During only our up strategy, recovering. if million, formula, purchased for but buyback less our of acquire significant than stock price said we during XX,XXX our business To a our our $X.X reserves. Under we call, accomplishments million of million. of $XX but total sum at $X shares also hand of using about to about to $XX.XX, with turn is current our

more and nightclubs, clubs continued are are have produced cash. Bombshells reopening. year-over-year increasingly we amount to optimistic in strong generating performance as growing of with rebound a And achieve We sequential

executing also fronts. strategy our We all on capital are on allocation

discussions club our of planning lot are a at with in May. We Expo owners

the Dean is We of restaurant first would increasingly as also Bombshells and I’m our business every sports increase our are like of very, and proud And Nightclubs when costs. we our our making of with effort went bar questions. know our that, Thanks excited job to to more all unbelievable to our stepping with to quarter. especially and Ed our all developing lot say up, all locations happen. concept. them to can Reardon regional operations XX and managers, teams. I let getting being everybody to extra to control of let’s next in to an I open Bombshells on franchise open capitalizing thanks that this for recognized the that the like and I really - did Anakar on and opportunity teams, And really a call for Operator. way, know very

Operator

you. Our first from Greg Thank Pendy line question [Operator the Sidoti. with Instructions] comes of

Gregory Pendy

on New reopening? three the are be from restrictions locations much terms ramp we in XXth, can notable how in that aware New are you you And York? any York that reopening Just all on of there that just the should is are that of thinking about then up

Eric Langan

Yes.

record Hopefully, weeks. last track time the we still close midnight. same opened that were are time for open, stay only the with We opening with have we to three of time, current and last it four course, open about will restrictions this or by with

I’m see occupancy won’t have you where but places idea the operations. going we don’t we an country, we to have restrictions, give we full So hour some around have restrictions.

have is distancing places just restrictions, social so much That restrictions. but restrictions. Some occupancy our not

Some of restrictions some see those both. I starting we to have are believe lessen.

unfortunately, May is it that different I whatnot. tell, is and restrictions And April. get of very be to different hard still politicians March, - as to to to on through how to that advising continue straightforward obviously, it. people It I’m them no hoping and when lifted. different states science the because by have the will open And think is open we of that and should the see political in majority there we end

So everybody deal we to guessing, of I and kind think just that. just have with

Gregory Pendy

believe refinancing, a then $X out maybe it. put I run the once rate last place. up Got moved little. And took a when have earnings Rates mentioned call, you it you million

still thinking of be than with we bit comfortable or kind number? are should that guys maybe little that So lower a you

Eric Langan

X.X%. I think mean, probably we I are X% between and

have to all appraisal, by locked middle have getting XXth I to top we so I the the They that show the February, present had and we in. because they for packages we I’m their the my have are waiting basically, back I have the due head appraisal quarter, don’t yet, guessing, can’t of or the financials which, here. haven’t remember. to Q. But appraisals remember We can’t on we board by yet. full XXth, think don’t quarter’s have our are better have better of They have. we will to course, been this each of

be an So that issue. won’t

probably on believe I now, and that looking we - between loan and of So are at end March. mid-March a I end mean, closing the the all or things mid-May right the

what time. And so see going to are we are rates therefore, at that doing

Gregory Pendy

think you But to raising I guess, for pandemic, then, expenses were And revenue Can it. the stick could be levels? I that good thinking legal we did think you normalized and pre-COVID a it believe, some anything lower the rate. as better you like pre-COVID, little your there SG&A expenses are roll we sort your is than audit to of should bit be off. to Got or Is back expenses run those SG&A rate. the rationalizing guess, raising, what run a try job throughout I and

Eric Langan

I be think pre-COVID. better to we are than going

accounting not prior. We had to all are expenses of going pick the and legal that we definitely up

way really have gotten big other national a cost we think can. contracts things, of I we that negotiating and lowering lot every on

We have cut marketing.

billboards. marketing down million. $X.X we think was have I our Basically, about eliminated

competition and moved will least reopening some start a us. that We and help think trend opens down that point, new will and while. towards have as costs continue our I with advertising eliminated places And social continues mean media, again. I for more at radio at really keep I think

are evaluate which that go. think We XX% between as will But And being, next it at over great I in to we few XX-months, time going I have least, where to the for a to great is very XX%, XX can keep we a we think the location, spot. years. the be and the at last very hopefully, is the I think

Gregory Pendy

just And final one Great. one. then

there in that you as of the of a the in new gave look site. of locations? guys is assumption might at a look places is out lot if you your on locations little are XX little out the you these is know of What locations. then rate? real attractively hurdle I pretty estate kind a that find XX under but XX-months, can the bit priced, seeing color making scarce the it you bit Bombshells Dallas right Kind closely. you at put what us estate for bar be real environment And You for the location I’m there?

Eric Langan

we What now. market. especially in they Florida, Florida are we lease is are wanting on are the for working a locations one that aren’t sale, are for prime seeing we the lease, In

on accepted We turned another have in just property. have an They LOI the concept.

for waiting are them We our offer. now to counter

may we one that quicker. And hopefully, So have property. other a the move then little

We are bought XX.X acres. the waiting developer

waiting of right we We that three and four replant hopefully, now. are next weeks, financing completed, the for them got bank out in land up lined be acres property. that site, and are the should two or have to we just the for buying already That

our as get plans started that will billing close, we on get get the permits So well. turned one and city, our into property that get

two own the lease now So we basically, property. locations we looking where with right owned what locations and are at, three will

weeks. we in hearing have we hearing The the other variance Florida, of coming variance Dallas, up a In in property a in March. couple have next

they control especially can’t and Unfortunately, start forward. building start better quicker dates. moving that process now, we idea a having permits of plans, will everything get So with An getting becomes permits then are we more is general will everything But opening we as right get to these average, building through it control issued. moving building cities our how our quickly in issued, these get move it quickly. in our once and building pretty COVID permits contractor to

Gregory Pendy

Thanks guys. a Great. That very is helpful. lot

Operator

line Adam Next the Wyden question from . with [Operator of comes Instructions] ADW Capital.

Adam Wyden

to been although I on clearly have by and getting enough open I really to build only back that. is New critical to question. like Greg’s of drive Scarlett’s I room it fortunate looks wanted kind underwrote But standing and York never

call without when back quarter, we now, little were you million where exist bit I free of say, of EBITDA rest of which franchises, mean, talk You XXXX I it million doing. got million doing calendar I you’ll do little of was just right? on mean, Bombshells hit $XX on million before but at and of when business or XXXX of about And margin coming a the coy, kind I about looked if I a $XX flow, Bombshells was that. you haven’t think of running, cash, XX% sales okay, margin. pre-COVID, of Q I think, $XX But First cash the kind and know not of without as kind because that and do and about when have, in corporate out whatever math, envelope I all and, you’ll EBITDA is this didn’t That closures of old call locations, I the I the it, on. XX% call $XX were think I off the paradigm. new against the And free know did don’t are allocating it XX%, Bombshells But it, XX%. it operating you guys you

before, $X I for even just does kind yourself the the and that. for add but take from duplicated isn’t billboards, legal million credit that I accounting, were think the and you the the million all that being the if of marketing and kind don’t So on give garbage maybe of SEC $XX

XX% looks do is they and doing what I get it, more and, night that look roughly, comp, a And and margin. bottom have line. XX doing you I call terms when do, Australia if mean, sales, I XX% like is to you then in a like stack all I that to math sales XX XX. think of a when plus comp kind that the the the million stack another I’m XXX I in mean at So you number $XX clubs, are in of is restaurants, XX% of and

like looking the is I back EBITDA. doing my the got is $XX of envelope adjust about math So corporate X,XXX got you don’t business for depreciation million. I think And the you all that are open, tax that you pre to a at shield, a have It Right, rate, model about refinance, my when million close but of the you XXX is is of because the rest. share have have cash.

is I mean does second XX of million, am doing my question guess is so of conceivable And that of doing And the XXX that credit franchising EBITDA call you are my are and, like right? is part wrong? million it right, cash. of opening Bombshells, more stool, I or are math third to Bombshells. And the the I XX importantly, not for this free it, like, the you yourself stool You give new part allocation that capital, you of

on anchor public look, that You guys debt. million $XXX XXX debt this multibillion-dollar and if my mean, other the on missing? like look shorting company. are times organic I stock to run, the And I of in I that is am look the to all had have math, of - buy guys I $XX billion another being I to mean Del call are I I mean a here? public is XXX, you I anchor million end XXX are look, level I a are XXXX, can’t feels am I mean, Why you buying got that it we at know at a to the even of the of day, that company. what we numbers. a get mean, be but we real company. multiple Chipotle, property business mean real is of a that I company? where on these people EBITDA. me conceivably, a math EBITDA, more I multiples all numbers. XX is, Frisco’s and do your XXx, Nightclubs. precipice I at of $X.X doing a are it become mean, is I mean, and about EBITDA, is stock EBITDA, pricing, if in several wrong? you mean, I you you have mean XXXX you modest trade the trading, at

Eric Langan

the I think speak. are we mean so on crest that there, of I ledge to

I and everything able we but and think of fully restrictions, think and June I’m as pre-COVID no open open, what hoping quarter will occupancies. XX% we July, we we September, I math real everything are see, everything open, we have or maybe get being X, XX% July, be August, have normal, up July to to we which least hopefully, first call operate, maybe at still I over on, and will our

we we supposed the We the $XX a to be we think morning are run things mean rate to or million, be, like to open in will would be like million million revenues. X:XX X:XX morning we I of that probably are quarter, I be $XXX million on till to a are supposed $XXX in do. do be $XX in able the it

basically Yes, as me. from I’m are, we like that Texas, So asking the as in seeing you to the you have you us, other be optimistic in you not math what conservative. us. you see on for are we sure. you are the right ahead margins And like hard we of in are Florida seeing you if far being It if are which is now, might not you know are done increase ahead if of can do is there, - locations is are what

Adam Wyden

Street Well, number I look the in Bloomberg. at

analyst? we form is Telsy Who million I Now Telsy is is why there get there say company, one mean, one thing and why consumers? Dana normal EBITDA I do have? group, -. we Nightclubs Advisor don’t have this here, it, $XXX people who only analyst If why have but is

Eric Langan

not if raise don’t They to write banking we money, They not don’t to Adam. do on us. reports want are are we Because business. -- looking getting want a to

Adam Wyden

money, any back of we shouldn’t I a I I buying $X be is, $XX flow, and is be or free is going shares. cash is, should a to fine, money. are that we irony that share mean if that we raise share -. do raising whatever Well, shouldn’t a it the mean we appreciate especially

Eric Langan

And been. have we

Adam Wyden

This is XXX stock.

million assets I there. question shares company. multiple, XXX a you you my right have work, becomes short, to I of then here to of And are right God’s cost XX XX, hundreds in of right. you capital? to I us to the them, desert, Like see dollars mean, There of guess in converging EBITDA, XXX,XXX you buying XXX spitting And trading we like, players the your at is, yield see cost right. do million equity are on basis XXX and I EBITDA. of I capital, of is of and at there private we XX the about is and cost doing Minnesota. about let’s a is people sweating I face. There mean OE. are lower delivering mean, flywheel what real another So Tony the guy Because than in right is, the private Lowery us and out see there. of how trading in And have knows that at I path you we are there accelerates. then companies mean are buying, at industry in mean, say I got a this of are we he who the a are right talked this that EBITDA, substantially big out guy can you did huge. Canada, capital I everybody big who’s another have at get reality right, the millions buying you that follows a that BCGH, I found be when or out are some isn’t XX,

capital, our right getting of cost think thing are you in and about now I thinking just I’m the curious how is that way only is that?

Eric Langan

think I the of were. mean where I we are the on casinos verge

phase, We the acceptance are call I it phase. in the final

the now, that into pushing are still it. at right are of but We we very phase beginning

first of time. it last the say, the XX% then half time, that they in happens real do what longest - at takes look happens - XX And about you then overnight. that If happens next the XX%

the are So that that we right right towards XX% reaching the hope I much, of much would now, XX% end level think, verge to acceptance on quicker. of, go XX% from and

anybody we keep matter just performing. matter these no got game. of the that putting the no that performing. We out company, our denied. thinks, got putting the got going cash going on the returns, are then to says XX% rate to be So performing. is to work XX% be growth cash, to name type got a end about what day, keep where we We just to of keep and And cash XX% -. got XX% we right, what or to to dwarfed, to back keep water annual generating the to cash the numbers. of are because, business We is to if the that at We generation what, at can’t everybody Adam, at the

Adam Wyden

is do you capital better your than is capital. you XX. lease XX%. are an ROIC you your that you start return doing on XX locations, return on capital out if basis at are much Bombshells, invested not I any returns, mean, of just If remember, on and if look you invested to a doing franchise Bombshells’ And look, Bombshells infinite

when So -. I metrics at look your

Eric Langan

That we moved I why is in those have agree. directions.

Adam Wyden

incredible. at of are look the they incremental of fucking I capital opportunities, when metrics No, kind your Yes. Yes.

look, mean, have excited so built. what I’m I about you So

be not good, padding it and be shouldn’t performance be the on back, your the and but you anymore. it on is you padding back, feels shouldn’t really I’m like should just so ignored is it - You proud,

to So be in shareholder company. look, largest this I’m happy the

and to are going we don’t research this think not I a I building out look, I again. go would look, capital, in growth. I forward exposure sooner seeing you line, you and much more had the markets. the you to the by mean, the is cost And the your still sooner to public reason and say an and live opportunity that to and vicious I that only the why I public company start capital obviously, say, would But the we And a never company to look, be capital. are is do capital, want the very that margin, cycle we enjoying rest. that mean through you capital additional think that is to access get on all access and have have misunderstood think of really I I raise multibillion-dollar public. analysts will the look is

cost call me buy company, and guys I get over of turn front this not look you get $X that of a and in side multibillion-dollar sell-side you capital, So if guys, that enough it be the rocks company. or optimist, blind billion just will believe be right a a will but will

Eric Langan

to so. your ears, hope mouth From God’s I

X.XX%. cheapest will we got just with we together, loan when reinforces We the pushing year. move. saving up bigger loan We our bigger previous $X.X that coming or back, had million will than at everything $XX did our just get is over this and It started XXXX a this interest and is it. close ever just for loan mean Centennial savings in on the expense then just cash, did appraisals move our are the which free our that next in really we run. Once us we $X.X everything I in Refi, is million million

and make, need actually make transactions. so need properties to And the easier we we the find it to close is to getting the easier maneuvers

We have prototype down. got the store

the be for to returns forward, we are they So easier better getting and are going move think cheaper continue better. us. build I And to as build to and to

Adam Wyden

look Great. Well, very, very to pleased forward performance, I’m I fight. good the fighting the and look, with

Eric Langan

Adam. Thanks too. Me,

Operator

[Operator Instructions]

Gary Fishman

Gary. a received the this on Eric question I email. is

is was parts interested are the country asking the they it operators. in, have all franchise What area southern people franchise of multiunit is - among Somebody or it that over?

Eric Langan

Yes. I we talked finding have concern our the all right biggest mean just right right is people qualified over from is to now the people country now.

very geographically, about. So are I as very it hasn’t mean, been - calling has it been where scattered people to

Operator

Cyrus] [Peter a (Ph), Our investor. line comes private next question of the from

Unidentified Analyst

or to want motivated at that and sellers business. about actual you, ask - a not? been I for before of to wanted seen long I’m such Thank just lower you Adam. are I say all time, prices seeing you I the you With would the club know closed have really period XXX. than have ask glad clubs

Eric Langan

their work. are The way. really. worth. they in is real guys They in A their what big the estate, lot those Not own their what not license their know are surviving They know so big of businesses guys situations.

trying We stuff have their mean, a now, sense. out, for gotten that. picky. out and are we like behind small landlord them been right calls mid-sized still have from to call to figure something on with looking them throw if their is are trying we and would makes I clubs they little talking But very we I And where rent to are being

in All our are is for clubs type in call swinging in the Those the in to transactions I are we know are ATM the type looking Chicago, Those we big acquisitions we fences. cash. just the carless We Miami, Pittsburgh, clubs we transactions. for. the are them do love. like them Boston Rick do the plug collect Rick’s They machines. just and are We want

overtime to So we -.

Unidentified Analyst

Okay.

is small up So that It could sheet. the it is not that places generate cash? pick big you the on the also places

Eric Langan

Those are are the just the ones of are looking that it. And for. tired owners we

the my X:XX they love lot trying their not XX-years. o’clock want, for for annuity payments problem a the the what crazy the a some sell looking can the comfortable we five-years, equity. me not stock of They for XX Hey, taxable, because You XX-years, even flow. are $XX, take Give What we cheap. with occupancy. collect are now, open. hassle, them convince too with the $XX, create things. I they or is The those gosh we can I’m call just to basically still is is can traded - the getting stock with I get we is those do in for to business I in Miami, of us without tired, are XX% from our from deal XX% they stock stock and in they year-over-year We love at the let’s what But just incredible of themselves, offer you - numbers, and their for killing that Those mean, much years. XX, defer in are are to an starting are stock-for-stock right a company. numbers much occupancy can numbers they take And them mean you I so - Scarlett, taxes, and tax, publicly previous however stock oh seeing can is years deals we detail, there XX% it. owners a they don’t and with a of club tired are as structure morning, see they just my, if but are they I paper, options tired transactions old. deal. anymore. are aren’t type cash are at lot of is think is mean requests

don’t going going it do we night. again Let at New I talking is It Chicago and and New this. in what opening Chicago, see don’t to Adam said, Are York as open when me because know you we know not do. me up is you pack opens are it are problem open And if starts about, why print, is to types that? out in those crazy let I York we of - not we can that hey, is the do to

at We are only going to we are XX o’clock. closing

our night. numbers. those hours, to do at When at or XX:XX think o’clock o’clock closing we clubs are close are I unbelievable XX:XX at are normal We going open

Unidentified Analyst

want ruling just that back back Are some Adam equity -. second. spoke one I you want to to go include would capital. what I about So acquisition go cost an - out of

Eric Langan

ruling We No. are it not out.

would We be have at value in negotiated. out. our paper are definitely would that to we not ruling What that acquisition

on if and you or trading don’t that an and you in club to are what we your because know the far or will roll any along have these getting a just at a this price to number upside in. the I a in your are for going I’m will I there asking And paper share. words, for at are of and whole roll other we know stock give not you to whatever, because equity yet, XX the people $XX will I in took you transactions be I share acquisition. stock that deal going will but point, but day, look, now. said, of So for are some $XX we take is

we will look at So it.

got We But will to it. consider it has sense. make

make the of XXXX. to We mistakes are not going

going again. those not are make We to mistakes

lockup we everything have We - are going sure out to and that agreement. leak will make

going control long-term into could be equity, the it tight We will that going in we put are at value, very I we give have day the it anything us, they Because a up stock for some if market that. and orderly to are - mean, that is is future. to way shareholder that not a do jeopardize to about going possibly

Unidentified Analyst

have. Great. way Well through the for thanks congratulations this you pandemic and managing

Eric Langan

Thank you.

unbelievable, and appreciate really I Our has all. them team been

great. been have We

Operator

[Operator from comes Instructions] (Ph), the [Alex Our investor. of Hardman] question a Private next line

Unidentified Analyst

debt thought XX% certain had maybe had I I this, that off, like quick been growth while first finally, you One, rate. mean, ever using that? a over I of questions on the at or a pass something it current Eric, this a Alex. pumping top up but definitely since to is like is the X% two instead below mean, your think capital strategy. about I for I wondering stock free around the a do XX% flow Have allocation rate going hardened price deals like mean, equity have of growth a on your is not on - have the I threshold assuming side, are up to bottom cash flow? threshold, pretty XX% there guys and you side, assuming at buybacks possibly cash was threshold much you looked you above free we guys a to the cost are the And level. five-years like after-tax like about a to then just

Eric Langan

at I money we sure. brought For just X.XX%. mean

Our cash is near flow our X.XX% yield yet. on equity nowhere

another after-tax $XX that have be definitely that cheaper stock The be with XXXX than I the is to this basing So And higher low. X%, equity anywhere mean, we to loan, would on have on it big capital kind near yield is that. point. pretty numbers. still Even X.X%, of is if at the

through XXXX we than free That higher much is get run a but in are to XXXX. going XXXX, rate to going think are exit we were We definite. I at flow a cash much,

have We more open. Bombshells

and And to think have also now A are at a are entertainment lot reopening. I are performing tax not put meals performing businesses of the benefit of of lot better. clubs of Bombshells be but the out sad, COVID we I going places it deductibility is the better. the mean XXX%.

price, discount me have mean I I the do called get pluses bankers So close going spending get forward I the I’m say, sell as is to a go to to There out of to have at s trying X% that to go really, current me - a make happen. won’t, hold just to not next equity in we lot going trying investment in would equity is really price, the to make and two two that for at this that $XX, going me years. market an big to me had difference converts not a hey, best, then hurry it I to already to no,

Unidentified Analyst

again. do don’t that Definitely

Eric Langan

we No. say done the T shirt. got would I that, blooding been there, have

price? always coming, Sure. tell much to been going I the We plan. much made so is made is It get like wow, Are friends for well we you are in five-years stock is working you very, else. money. get very But it friends continue over hey, us. my say, because about I everybody We with so excited excited on monopoly for

side do stacked things. are kind my business of business. It focused the an side of of it Board. really up afterthought it. can’t under just with really to the I looks anything We the Okay. on is But good

it. and more a If XX tomorrow, in we the finding year doing more we a XX right we right, generating the won’t are I that six-months. If every is deal deals, next a next way of right, just not had it that hurry do deals, they on six-months, is forum. deal of flow tomorrow. cash and focused in are in the were we doing reality all the do yes, would mean the just and find the right We free them does, deals don’t we

either. for I deals, of are right are scared are to we If started kicking tires moves. a is mean make We we of but lot stuff are up. coming And now. there not comes right them along, we going the stuff not

Looking to I’m of stuff like. a a I lot lot seeing of windows. And that

the the right. Now car used lot, we under hood, digging are

inspections. the are We doing

the are us. exciting I few possibilities checking are things as having to a be we going a are and it going next summer We out, think we to through for we start progress is very months. quite going few And to

Unidentified Analyst

I forward good. I’m it. mean, Sounds looking to

Eric Langan

Me too. Thanks Alex.

Operator

Pendy Sidoti. Our Please next question line Greg with question. question the from is proceed of with your a follow-up

Gregory Pendy

down on Nightclub a us color of in a Slide on it come X. them capacity, job. should albeit kind looks how you line? will for give to like margins at it, that flipping X, you little Just positive segment, that reopenings actually XX got at then reduced Can will given weigh big also, just the New operating at the XQ, And just bit of the on pretty that top be York the

Eric Langan

all expenses paying say he’s I anything Well, thing now. because the I weigh get on will member, one

general them. personnel payroll certain key this on kept our have kept through have Continue other of We managers all in on to payroll. locations, pay we

last of of March them year. since Some

We our have paid rents.

bills. water our bills paid electric have and We gas and property insurance taxes, our our bills

have to kept costing opened were for for more had than don’t have location we they than a when believe more that me, I have generating not that if cash open So closed. they we three reopens, weeks, have Bradley are but I verify locations have

anchor. everything basically, closed it is And an as as sales. wind it in opens, is soon that So is the

all So a plus. it is

never is well. like I have costs that they helped so very guys what’s are watched high. watched And our costs our mean, down. margin always I keeping before. the just have watching keep think And they costs cost

it in cash coming a the have is dollar it the to you through really, you once you struggle We created We were hard good everything, scrutinize and COVID And half is have beauty in, process. habit, every to. that back really as are that break. lesson when forced to teaches this questioning spent flow starts a

bill if just questioning keep Everything be us Why up they think up doing more And bill are that our at or our goes questioned to I Why you item, or things? part that of you why. are we culture for is this this now. are So these point. is going this charging goes raising prices? internal

a do going down. numbers, are one I but business So it. on us point, back something get we think and this creep. mean, better, of point. think better every if don’t one are of creep to it is better it opens, at to a cost, - I just But we think time keep thing, I as those are see lot has is that see I Obviously, you on things don’t will every you those we the else to at high are going to And going get going

Gregory Pendy

how Got attendance for it. color, expo? the is And any then just looking

Eric Langan

Publications canceling Vegas, President I about moving to I don’t the in - and it why manages which I it know know everything. up yet. that ended and good and is I haven’t was May. talked the we to for Miami who Don, runs is him talked the expo not of haven’t Ed to looking

of if more going lot don’t I they on to bunch I come are with guys And know if owners, themselves, of I a won’t are they don’t coming. bring to just are color don’t I a That, of so talked kind probably yet. so We know people know that. I them. what have have going to know club -

I think everybody is expo, do to last I going people minute. this this year, think it most plan year,

turnout. and a like, it a Am types we have in of going I those wait I we it? May. May. lot everybody’s the I things what’s think be to What several And groups in is to. effect do by Expo how vaccinated numbers to going look be will of to that see affecting I going talk some at have going But like? have be to Expo looking meet then, mode, agreed do been meetings are on have going to okay, With COVID in all

people those know will there. be I So

get turnout above-average think or is about average to going are we think what will happen. I an I So

Gregory Pendy

Got it. Thanks.

Operator

of from Our a ADW line follow-up Capital. question Wyden question. is next Instructions] the proceed Please question with with [Operator Adam your

Adam Wyden

have got hallucinogens from Yes. Eric, know I he’s Alex do stop I what I a than of share guy’s you questions doesn’t M&A. or got guy, me any flow, to I flow new free lower Hardman? to any your mean openings $X a doing incremental XX%. Bombshells free a bridged or include favor, is don’t because on the that math cash you he cash yield COVID think taking can just

share, think flow than it likely less. I last free was $X a and is checked is the your I highly stock $XX cash higher time that

my XX do it I is if flow I by cash up open XX% and about divided TI a yield. [X free XX], So

mean there XXX% know that is talked with fee think comping I because over because New and about organically faced and million don’t people from the what idiots predicated see a know EBITDA York, with I what it. incremental get stack in XXX? mean, Brothers. So with it $X is remember, about of is remember, XX%? you my were you guys mean, believe that even margin think on this. Nightclub hang you the on cash these a probability number they we $X,XXX are if I York. minimums look, season, was you get I will doing it smoking. happen $XXX the I a down, with how capacity of XXXX mean XX% What can remember trading actually at the you just comp. than have a to once call, said, higher you And made going cost is I on Look, you I is million sixty. up What their up right, JLO restraints think fucking in that not see out I movie you what it take is all is if you that that basically they we conference because that phone what I house. this high strippers are want movie XX% $XXX he things I $XXX mean there of do is to these million which thing, a when lower problem New are mean, cover year. $XX I make is out made occupancy. people toot it saying free that discharge And in and and get I this the I all everybody than seeing will out is mean literally about you are Lehman my making are that come XX% to flow yield. a do what window. jump mean can EBITDA taking

Eric Langan

He is looking looking looking XXXX. And is he at trailing. XXXX, mean, he at think I at XXXX. is just is I he looking just

We are looking -. forward. And think we I got

Adam Wyden

ton stock and the that profit. no making profit, G&A are lower, share market forward. a marketing count Remember, time, you expense Bombshells is Bombshells We is okay? lower. is Interest know Last what Guess looks lower. had making of

it the You ago, made I Google now have like a share accounting. making don’t is the $X two is you SEC, it years saying, don’t have and mean, $XX.

Franchises I to mean to do But to math, okay? have but dollar why Columbia to the you maybe XXX% fifth costs, actually is is and in phone, need trading I went math. real peel go is the I I onion and the school, science. have we stock fixed Like that want that the grade to at do want right? I’m this estate, people You high get to own the Nightclubs, the it work to XX. is back the not right? rocket mean the have up You don’t you math, on is Columbia the so is or that really, better really right? margin, still the angry. it to answer I business to literally, more do $XX. think is do share, Maybe hang in want You incrementals business you opportunity,

Eric Langan

I and to it keep seems think any to it, quarter and to get got we are keep keep it, to better going is everything Each doing getting just different. going open, showing be better. don’t be We quarter there. this

to December. think I be November, going than January, March February, is October, better

December. I This seven-years that a and time, was first didn’t single I think first find January I -- ever December. looked, at ever look went the go I the only January that I beat would time and when beat back one For

revenues December. than in total revenues were our January higher in Our total

Adam Wyden

not reality logical, Eric. I is It the mean, -. is

Eric Langan

are look service our That seeing. revenues going what still still our I more really we down spend is getting and know. XX%. But if I comfortable, understand is people more open, it as we are are get revenue up. the things service are down,

night we So when those that service is back, we are late come not XX:XX revenues o’clock. are because at spend VIP that that closing getting

I last I this. through growth, end is out or crisis because lifted that through, these I the XX-month right? think at of now And growth I at XX% we - of I have through have the quarter-over-quarter And be and compared I cranking. closing you majority our I XX% with think and We are compared we being world X%, and have looking the by for the we stock or would XX-month positive relifted, and X% really what more I exactly our then going So be this is restrictions the three-years They are going to today, there going due decline is of XX% who seen see today what that be. if money astronomical end be run May how of to COVID margin growth, We too we May. then, But is it. XX% July, we growth, know are the revenues XXX% to days going the to cares? XX-month where if an like incremental are on I’m o’clock. suffered watched nightclubs of not restrictions that mean project it things is if mean, is margins sequential don’t right end grow in but end I as we slowly are are missing. a we price May. out can’t COVID, XX:XX are or Imagine numbers on it over incremental the like it about look of right? we even incremental XX, are I hard the doing gauge like XX to are flow, flow That we when we is getting that get going end to is That isn’t dirt July, free change that to the be are cash are to is the we when another are world. have we see In being X%, at money margin by the for said, we of looking cheap. XXXX. free are cash chump you where XXXX to XX-months even whatever

Adam Wyden

Like talked going - we the in crashed [indiscernible], this is the to other And about. all the double. are like talked We right? about dock. are of ships the reality You is be

like it. XXs, to shrimp, you You crash is you going their your when well, going wants to are stand be point stayed [waring] and the to are the are else both alive. all just going listen boat, people got remember, the saying Miller, and be reality money. spend stayed you reality telling everybody going catch you inflation, you alive, my have And if and you, you is look, are to everybody there it going is to is Drunken so when I’m (Ph) the has and Because is that to

only and could the So to XXs, in borrow [indiscernible]. and war everybody wants identify that but the you are you going like into are

-. to that sooner So And are get XXX, will I before. XXX, look, out you sooner your you to all to that, get you people mean, doing seen be capital, saying XXX, going competition to numbers you the the to is, have able take I’m your recognize cost right, are be never of able

Eric Langan

make even quicker. And it

Adam Wyden

Yes, quicker. it even and make

Eric Langan

Maybe is it fulfilling self right, self fulfilling.

gets doing better, As we easier. better, do

easier it goes do our As down, cost capital of gets easier and better. to

Adam Wyden

opportunity, would normally a six And right? take EBITDA the you pay mean, you for. advantage times of I can guy that

equity, pay I on there, saying, right, my will you’ll is cheap EBITDA. EBITDA, fine, I tell mean you X.X. my If I it them, is stock is doesn’t normally same want around pay ways not is lower X.X if stock will there thing you pay you your will have hey, I pay to four, I you is your mean The you pay times point. six, hey, these you - different will you it that I all

Eric Langan

share the cash secondary accretive deal. free as share flow principle And is the is sure to cash boil is Exactly. going generating additional for down end free free and flow day, is our accretive At to cash it of flow per to generation as the making from every every to of long per deal structure that. to share, the that deal

Adam Wyden

these call question, can’t call why I have Alex I that guys like shouldn’t conference think bonehead on on investors on the call. mean the we So let conference this you me guy, at ask some be person I do doing the point, mean, the Hardman. be math. allowed only this

mean We have to have and stay reality. other here forever. is people I map we that will the

Eric Langan

that we the I just keep in time, their will is cash mean, meantime, that, mean to I the keep up you and I understand name and way. educating -. the game. Eventually, right their at catch right? math keep the showing flow, have ours. got increasing In values Everybody the free of with

Adam Wyden

[Indiscernible].

Eric Langan

math people other were than [Indiscernible] who right. doing better not the

Adam Wyden

better was XX than and is -. and XX of XX investment at was I buying out and when it of It coming COVID XX a it

Eric Langan

is can and there today Certainly Yes, buying, a in June things May a than lot risk. is lot wrong less you less sure. and there go when that were that July for were

We are on side of it. back the

Adam Wyden

May, on June and was it July, how rebound. to I clear would argue the that going wasn’t economy like in

is to open the are Now be XXs. business. I me abundant we Bubblegum is think going that for there very shrimp to it

got hopefully, your you nets and your else’s And have the you get cracking open, all You shore. have to Everybody votes. capital. got of cost your

what we you buy to That right? So shrimp, to your other shrimp, and buying are own you got catch are not got boats, you people is then close, but You people’s other right? got just do. catching to

Eric Langan

Yes.

working, part they a their their get For right the now lot sure, working. boats of hardest if boats is

get their boats they again. So working

Adam Wyden

Alex to hope we done. on any I Hardman should no more Alright. that don’t Good. I’m have I everybody I the other. go call. hope have sleep.

Eric Langan

to Well, go got soon. I Alright.

the appreciate Adam. I call. Thanks So

Operator

the Slater. of question your comes Steve next proceed Martin Please line question. Our with from with

Steven Martin

couple open? What have Hey is the on getting more, you next guys some question. I one timing congratulations. the gain do think of Bombshells

Eric Langan

growth that to I in are very are COVID, They It not think these now, are we are would right But with quick doing be -- you many people they would - looking is not at they really building home. I be with think and the offices. sometime between cities tell stuff. August and very from November. turning would think working they on hard

turning I been. though So there to it not there Even permits, I is many process trying they think is as ever next think have get got last I people is are in as we just I filing them. the the two permits permit But been think Antonio slow the as in slow is building just They believe franchisees the filed Arlington. San permits week. weeks. the have his

quickly both it get is quickly building permits, how going are basic how to are they we the basically, remodels. really on turned, depend So

believe So I construction five will the be on three months. to both time

billing building. we The So if we will open four- XXX-days, start to building after two-months, of the the going four be I start is turn start XX-days And mean, instead Are to are we good and next the months. we going unknown. August we to get real the that news I four-month better And we November. in should XX-days is where know permits five-months construction that give line than I by a phase. would be I in is have been time are the understand time mean, next a to able what I call, permits that. at issued, you or line.

able better a be get to I hopefully, will so window. you much And

Steven Martin

question. Another mundane

those? real You buildings? estate stand sale, on you prior had some Where and both do

Eric Langan

that Well, we have expecting in. I’m a couple contracts of

money on about properties get got negotiating hopefully, to that Dallas that at they buying will and a been have from those I signed soon leased earnest third-parties contracts that we two us. We in get processes we started. is some have that have we looking not are thinking group

right exchange. the we making capital do on with ahead than And So for now go return I rather those. tax-free XXXX looking are those may things leases. They a were other and have we to mean, we the sell would

November. bought group August an a option on - and just an sometime property between they have We option on that have bought to close

if They we what buy will decide the basically they $XX,XXX paying the do. it market to or property keep they not. month see they to are off are us a going So while

got a building lot behind taking like the the the we got, the XX. entire They is to square tenants have on we on group I on the I We signed today, lease should signed shopping the XX,XXX the We going center have should sign that target, Bombshells built a entire there. center. rent said We are foot of just lease, that property tomorrow. tenant the

is a very favorable that for us. lease So

operates that. night. are until about p.m. We at operator they only an are X:XX And that excited

for that So entire for night, shopping will like all leave at we parking the center wanted. the Bombshells

us. I’m that So for is win-win a excited.

we business planning four people know think you next that that gone. waking seeing similar they the Again, awaken the We world uncertainty are what are they changed. as I’m The is The the and are devil, say, getting patterns here. growth - - say, we I will that do And Florida, in are the growing. businesses for accordingly. very hoping northern know see Texas, and devil know, especially that political markets we years, will up is We climates again.

Steven Martin

question. last One Alright.

lot of - open in in the What see little you the again terms of the are You an northern about what is bit a - some New talked a markets. as in competition example? York do never of

Eric Langan

properties. know. the mean, I’m obviously, York there that a I in to repurposing are New we is They hearing. reopen. not are clubs going I’m don’t hearing couple of

will have a we hopefully, lot markets. of in so see. And our We don’t of lot a competition

smaller Texas have Hooters on the a have right has XXX up sale away. the of had markets, that for the seen that sign noticed we clubs down Some the street. building. some gone noticed all like on have I Bombshells boarded I was Hooters competition. and our I

build And restaurants of a especially reopening. going for out of stuff to Most location of doing. lot clue, one are of are are restaurants But the and you is last aren’t we for have here over Hooters, will we to period XX-months, XX-months nice restaurants. are the guessing pop any that mom the just start XX-months. then reopening small they more will to very deal. someplace I places to opportunity to that have chain But but new only a And of normalized entrepreneurs kind restaurants think do open awaken a XX-month have next nice I’m and new are XX-months gone business, that seeing else think will run. that have the I a see competition whether what time. little big I that think we returning So they XX-months new of a to window or gone a brief is I start don’t

Steven Martin

this Thanks stock the a at lot price. and I appreciate

I target the quite have though don’t -. So

Operator

[Operator Instructions] to the I would back like call to for Gary hand remarks. Fishman closing

Gary Fishman

the on Stay and night. always, And you. you, healthy. and thank of please you everybody. as or Bradley. safe, clubs of Company, Thank our one thank And visit Eric, behalf you, listening, stay And Thank for good the restaurants.

Operator

this Ladies teleconference. participation. and you gentlemen, today’s your conclude for Thank does

time, have your disconnect lines a and at wonderful day. may You this

We use cookies on this site to provide a more responsive and personalized service. Continuing to browse, clicking I Agree, or closing this banner indicates agreement. See our Cookie Policy for more information.