RICK - Earnings call transcript Q4 2021 | RCI Hospitality Holdings, Inc.

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Operator

Greetings and welcome to the 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

John. you, Thank

you you our of of and the result you involve and anticipated will phone, Information the developments Please afterward. to Actual Information & For to New Scroll page. on and listening the results find down take invite update that the That number logo. presentation the find Company uncertainties. Page club. the RCI risks any can Company conference under Investor all those listening in remind non-GAAP turn also reminds you'll we RCI on direct at X. to website. disclaim like us turn differ Investor one a safe obligation harbor our that Please links. of the necessary hear forward-looking of of Page X to York, or and I'd It our statements at that that everybody posted City call this join to materially presentation. explanation you Rick's use. of currently gentleman's you Cabaret everyone we may management in to the to information that at tonight to York I you beginning our Click want measurements presentation. occur New to see Manhattan's from And area meet those disclosed I may X:XX as statement call

from and and Empire Hoops the Bar Building. XXrd around located club, You door. sister between XX Cabaret Sports Street Broadway, can tour the Avenue also it's corner State West at next Fifth It's

the or Langan Eric for at ask RSVP-ed haven't you door. If me

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

Eric Langan

we Chhay. market performance revenues with today. quarter generation. for with and year I'm Thanks numbers. our cash record We closed, CFO, joining strong After Bradley our here quarter fourth fiscal another year-end and Thanks, revenues, fourth had us the reported Gary.

support. for As members team and always, investors loyal our thank steadfast we their customers, dedicated

executing bank New The $XX of XXth October and opened growth we and fiscal our Bombshells all Brad in clubs end of Mansion location in to at quarter, our rates refinancing Texas We and At states the week, estate are first the close it's later. in will market on our the about and of we Newburgh, in million XXXX. the for six real to Antonio. York. first Arlington, growth Last XX more talk acquisition In in November, San big on our franchise is continuing on and closed I aspects work terms. better opening our plans Dallas plan closed we

here's Now, Bradley to review financials. the

Bradley Chhay

and good Eric afternoon are Thanks, who those to listening. all

During by XXXX. That EPS revenues is non-GAAP we from rebounded fiscal and but impacted reported clubs was $X.XX the pre-pandemic was also a up $X.XX. fourth EPS total the noncash GAAP ago quarter million. GAAP through $XX.X in favorable significantly quarter, a of year impairment $XX.X was a charge quarter the from trajectory. of XX% up XX% on EPS Most million. fourth year

restriction, COVID-XX from was flow full adjusted had million. $X.X was from stringent as was $XX.X million million projected. the cash year as previously the contribution, was Net locations clubs activities certain a not for million did However, quarter. which EBITDA for and in more Net cash free $X.X recover income fourth and the fast operating $X.X

activities was by the $XX million from and cash GAAP year was revenues was impairment was equivalent. ended with For GAAP free a $XXX.X million cash We and $XX.X EPS net $X.XX. from ago of fiscal flow up million. and $XX.X charge XXXX, That year X% from the quarter EPS but fiscal full total was a non-GAAP EPS also XX% cash impacted The cash million. year for is noncash of the year. in XXXX. full $XX.X operating million the $X.XX up we reported

Now, if significantly operations up margin operating were you'll income from revenues, to X. all segment year-over-year. and Nightclubs Page turn

result, a income revenue XX.X% from was million GAAP which non-GAAP a great operating whopping and to increased $XX.X quarter. $XX.X XX.X%. margin million As margin seasonally non-GAAP is operations to rose operating was for million. $X.X slower fourth was our GAAP and

did high-margin Florida well grew clubs Our year-over-year. particularly revenues, mainly our clubs, our sequentially Northern and from service states

basis fourth results Looking increased GAAP at on revenues pre-COVID on a X% Income a were impairments. up and XXXX, from compared to non-GAAP quarter operations XX% which of excludes basis XX%.

please of and of XX% were less in XX% the this quarters higher Operating lower to year first fiscal pre-COVID $X on quarter was quarter Now, XX.X% income below with the of unusually Page great of year revenues to was they XX% million. third X. sequentially; quarter and if operations of Revenues Bombshells of were units XXXX. the had ago second strong fourth from operating million, turn of the more you'll fourth and $XX.X leverage. there margin margin a compared GAAP and operating quarter. XXXX But way

the experienced heavily were impacted costs. food and inflation During labor we fourth by quarter, and

month. was earlier preopening for Page had record also Please which a in Bombshells to We X. year expenses Bombshells. like our I'd Still, moment to this spend turn fiscal Arlington a progress. to related opened reviewing year XXXX

and to revenues We've operating increase points percentage Now XXX% XX increase the last years, in margin. X grown over seen five locations. we've an of GAAP X in from a

the really at has average business. higher selection Number average David are that And one, site that better done number it. and compares job concept team, we of 'XX our great lastly, in locations pro, the per driving location. a and to there restaurant biggest resulted led several two, nicely believe some very Simmons. We unit Bombshells factors our sales Bombshells believe refining a is fiscal in success: Our brands are by we've and fine best volume the

and Certain that's expenses goods such right and revenues please growing Nightclub sold, operations. of revenues, higher, a lower. the legal, in Page our part, this to Now, costs were overall during wages insurance and in to In were margins due and of and attributable of as all a cost review fourth quarter. were quarter there. There's consolidated to service CFO salaries high-margin ago quarter XX% a turn to lower. general, Sales X to were year. year from statement significantly analysis the total of Improvement XX% the higher SG&A

operating a X.X% As GAAP XX.X%. operating margin and non-GAAP result, was margin was

Our interest expense percentage about revenue. I'll also talk this I of more when slides. debt declined analysis to as later a the of get

turn X. Now, to if Page you'll please

year. million. $XX.X related a flow As to million Free the for $X.X scheduled while cash million record million our I debt on also paydowns a $XXX.X quarter was and debt earlier, quarter property. decline to and a paydown fell we cash with million mentioned for reflected the of sole total $X.X of two-year The a low million hand, $X.X ended $XX.X the

pay period. lot the affects quarter. know, our a fourth you cash This of flow net cash from free for As in our bills operating the and we activities

the quarter of back EBITDA over and of they not many $XX.X was bounce $XX.X our XXXX, locations are While were now. million their for as to Adjusted course open for fiscal year. million the capacity they full the

the acquisitions. to related refinance the show the September back of to that the debt took a debt then as and our result on our Now slides November and October three we new debt; next

the million estate down start debt $XX.X $XX.X financing our Real cash paid in chart real we interest Let's $XXX.X with to Page debt X/XX/XX out million debt Page estate, million seller to June higher-rate that XX. million manageability. $X turn XX review from debt. our we Then in increased and pie XX September pulled the on from higher-rate to unsecured X/XX Please using XX.

to to in continue costs of X% and occupancy Our our trend below right the are XX%. well target range direction

As weighted primarily continued a they due and This quarter percentage the current X% to the the were revenue, the compared in average interest quarter in of fourth in in reduce ago higher quarter sales was to rate. and expense. decline to the fourth interest of quarter We've XX.X% XXXX. year our in X.X%

it years, year. down the from X.XX% come this of fiscal fiscal five last in the fourth quarter X.XX% in XXXX the quarter of Over to fourth has

interest X/XX, XXX than debt. rate and X/XX weighted points paying average interest higher-rate due basis to lower Our down refinancing was the the primarily

the club periodic into September, commercial us unsecured real just refinancings, other discussed, debt. did bank we estate As we've convert to one acquisitions financing our and lower-rate financing the like in higher-rate seller enables in used

also fiscal more year in refi maturity schedule. to smooth In to September also us enables payments us Refi debt than balloon this enabled case, refinancing us the annually. due out amortization in XXXX. million periodic to by our eliminate principal Our enabled $X million reduce $X

chart. pie turn our Now, debt to look if XX/XX you'll Page please to XX at

of to into Now form to the end have we're debt. was amount acquisition like also left. slide used and November, million that forgiveness new debt and of reached of of October seller able make this to take our through the have on repayment note our I'd a financing that recent unsecured This on SBA clubs going we our in and was real of small and loan $XX.X estate.

We are Settlement. end also of the the Texas nearing Comptroller

Now, you. let over turn over and the me thank back to Eric call --

Eric Langan

Thanks, Bradley.

like you'll to capital new allocation continued review If I'd to Slide to turn so talk XX. investors, our with strategy. We've

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

He book, Our cash. by that strategy William cash and per cash more outlined that The focused in to effectively Outsiders studied the share those generating to Thorndike. on generate is similar allocating companies

is other actions, clubs Xx the subject, to acquisitions, value. right Xx good, the and mergers strategic to fiscal three adjusted right clubs EBITDA, at specifically and real whether the We markets. strategies One different been seller these to We acquire use applying estate since have XXXX otherwise. with to there's course, buy rationale solid, market at buying in do financing of like cash-flowing some

develop Another organically, to strategy specifically awareness grow franchises. cash market using Bombshells and mass, is sell expanding to critical

returns Our to annual XX% goal organic growth least of generate M&A at is and cash-on-cash XX%. to both in

free back action per believe than more we yield is buying Currently, our yield on within shares buy range. share the third XX%. our flow cash the when is The is

opportunities Bombshells opportunities as to XX% we well seeing to as additional with are to purchases some cash-on-cash expand However, earn of XX%. returns club great

open in the $XX be the the we yield current cash these range becomes, buy better our deploy the more if to under the what stock stay share. to use We feel we is gets we in cash great continues our at returns, And can market aggressive point cash Once been would letting have share. to plan price a $XX per stock beyond to to excess build. $XX per quickly of

growth initiatives, For Page XX. to please our turn

Here our initiatives. is growth update current on an

We have on. lot going a

similar XX% clubs to we of is acquired are are The 'XX their up the back effort in important first of clubs did a COVID-rebuilding This fiscal the in with half making clubs with October. rate. We new about that run in progress to own what we XX pre-COVID fiscal 'XX. our

with staff right the to them continuing people. are We

expect -- happens, over next toward next to quarters. this the progress As we make the two continued

well doing Arlington is a start new our record is Mansion, with and Bombshells. Our Bombshells sales The a other terrific acquisition, single-week off for to in

Our first during the Antonio club our is reopen franchise fiscal and in quarter San we we expect and location second open that in quarter, March Also should to in the rebranding reformatting club San Louisiana remodeled are in our Antonio. quarter. which

of is processor our the testing obtaining in second credit for scheduled We process in card beta The also admireme.com. are quarter. site or the

week, We for under contract contract as access that sale. Bombshells land in under we are purchasing two locations us for market. properties have four This would last two new in Dallas. give And we for announced

contract us in market. would purchasing which give Houston for Stafford, land We under are the Texas in Bombshells nine also

franchisees. owners new are As to should and another talk always, well. clubs we our for Bombshells about our Sales their for look first continue quarter With doing we acquisitions, have we quarter. acquiring great to and to locations continue

big a questions, With that, and always, hard let's thanks all all, your for and As teams, to Merry and lines open Bombshells the our nightclubs, for work goes dedication. Christmas. out Thank you, corporate operator.

Operator

[Operator question Company. from Instructions] Sidoti And is from you. first the Anthony Lebiedzinski coming Thank &

is line Your live.

Anthony Lebiedzinski

terrific the a good afternoon, and as year terrific well. a quarter for thank taking and Yes, you questions. Certainly,

looking the quarter segment for margins, just the the So very at year. both strong performance and obviously,

So as operating how forward? in margins food segment we we think about should going think costs, about costs labor and the rise

Eric Langan

But bit. well. preopening if rise just Obviously, considerable we've get little costs and will to costs, quarter. also the of have Bombshells those mean pass think we're Arlington most costs those about margins unable as pass revenue the I this on, We four store I some continue weeks for obviously, those under a been to the of we had as on. to squeezed able could again will

So of that offset will some that. help

probably will has of stay I And so been which margins think Bombshells target. range the XX% XX% our our within to

come in As back service far out. as revenues increase go, to as the our we're think I our in we Nightclubs the for see increase quarter, markets seeing Northern people continue --

at going We there's new be everything York I or no if than club think else, mandates this that. we're markets. that, in margins this just become And strong well. -- very I other We're will that, way hold to watching new have they're judge to factor on see, mask obviously, with other real from The as variant will They think no could anything a at. or the does expand in currently -- point New how But started so affects not. where that. our it Monday, to

Anthony Lebiedzinski

Got it, far that. okay. a on then, And just as as follow-up

that do as fiscal for quarter expect what far was costs, you what As for the And the first should those quarter? preopening we preopening? for have numbers, the

Eric Langan

our existing down have locations. really don't we No, it broken basically, train we because at

but quarter It's necessarily that can what a are our tell labor inflation. costs of training. is lot the in I cost you is not So cost labor up

cost said, most of in pricing to is the on but of I like been cost pass increases. Some it inflation, able that inflation we've

too And all move forward being not And in as stores, as to new think are see store in employees of Arlington. so by their will that the we this worried return hit I'm the more normal margins our employed now I margins about labor point. you'll margins some at existing

we've So in different go -- the been been that's for stores all the away. will is that training -- company, last spread basically the six around months, for doing

Anthony Lebiedzinski

trends then to date, And that Understood. pretty mentioned the QX good. you the are

just ticket you are is that increases in mostly well? So Or seeing average also as traffic-driven?

Eric Langan

the have said I we'll have we're XX -- to think don't bit. I continue right spend now, more as mean locations really some But service a seeing a is don't solid. a next grow -- which a -- right locations end rebuild breakdown I've and have new those why I quarter the very it's I to just are, -- Q, on locations really to we watching those we're on now. higher better is I a on continue the been of those we see idea time. we'll as and percentage micro the much I get in what But this macro don't little I We're revenues VIP the seeing the have COVID of more But -- full more of more locations. at numbers level. like this of set said,

open fully so their owners previous just locations had opened. in they had all opened hours. hours. for to, restricted barely all Some hours, normal limited October of They've be The the didn't business necessarily

we out believe expanding start So think on the be to the full-time, in And of we're run we'll a in staffing business process of seeing I open growth a locations. And scenario, I XXX% by rate get XXXX basically back those hours, worst-case March, then we'll be getting everything those May. what better. -- of back that kind can locations probably we'll

Anthony Lebiedzinski

Got it.

of Okay. Well, thank best and forward. you luck going

Eric Langan

All right, you. thank

Operator

Adam from question Okay. Wyden Capital. coming from is The next AW

is line Your live.

Adam Wyden

can Eric, hear all me right? you

Eric Langan

Yes.

Adam Wyden

I maybe cap although I hospitality a you million $XXX in of company kind $XX million million more pretty $XX often to some guys But cheaper $XX it are Lowrie the $XXX I run you're and fiscal do. alluded rate and sound I with million I -- mean, doing bit market of what Bombshells bridging a wanted I quarter of bar. seasonality. not. Xx With out little new in nearly broken it, doing and think, When mean burdened I to want kind getting before market these mean back or seeing them up million record, the million and preopening call or I I to doing I about EBITDA or see the more a like on million M&A. mean I'm look, to got sense that's to was Perfect. maybe But you marketplace. before restaurant the or math. slower whatnot. don't a million than is kind terms shares maybe add a running, value? for locations. mean gap of the narrow perhaps capital But which and any maybe of the buying obviously, to is that's or mean a $XXX X.Xx, to and when EBITDA, I was at a at prices the of fourth seasonally $XX business if quarter cost that's want adjusted and than you I annualize of take million pretty get Anthony, EBITDA of I of the it's whatever makes quarter just that $XXX it, $XX by little just I trading much I mean at costs do another EBITDA, this. -- high

Eric Langan

And buying opportunities at we Yes, doing. have. well we're think I range all you our asked I the right that's But what we're why agree. looking within I are We're the now. said things

We the IRC are doing at March. We're going We're April. to I'm conference looking in the Sidoti possible a also maybe in Noble conference January. conference in in January. doing

to going locations of to But going continue to that to the by million clubs So what said, getting right effects I be run them that run $XXX to in XX%. we're when take get see over story. these on XX% that coming building between rate now out. thing there. going on telling and to do EBITDA then going we March the May, that rate is we We're from starting and March, think but I our like and speed up that's typically Lowrie grow with go-forward the focus off do I to to believe main cash growing the a little we're free we're and keep the flow,

I new everything had getting We're We've And before see like one close all development a record meeting a on I a at fantastic on think working be going started. property property. end deal. had stuff hopefully February. the in is It's in afternoon week. talked a -- this that call. of this play. location. Arlington the that good got the into we Rowlett we'll just location. growth The about Looks early Bombshells that It's XX-day to Grapevine on we'll January, the come

the started process. think December X I for days it -- started XX that

those other started in got I've going. early that under in moving location them contract new be on down forward under that those meeting other locations them eight couple all franchisees talking with And one as is very on They're get trying And shortly So the excited hopefully, we're We'll bit. and get multiple a And open thereafter. we've well. the stages be as working of with process the to Houston want of discussed is with construction a going. January, properties our that we're I and of and get to get the the locations in and we're talking out course, to early construction we've Bombshells. eight been right to the before that that build current that franchisee got continue a LOIs little now Super on we're and or hopefully past February couple in to negotiating line opening Bowl. We're also well. get we've

think million headed So for right looks be We these like originally they a that we things I wanted they'd times. -- in to and we've where open now. they're of told them, December We've kind mid-January built look, but that's about figured them. make achievable be watched

us end to done think with going Bombshells results by franchisee. the up open starts we'll then, to value able be and of which franchisees continue And I will once people get the going I more out, concept. to see our they and up, even February should to think that grow it franchising we're their are give franchisee first if putting they So by

Adam Wyden

like capital. Bombshells. before, if on great. Obviously, mean were revenue on The on think royalty XXX% of mean, XX%. showing return are you returns franchise Bombshells decks economics look is XX% the you or But on levered -- a in one at I basis, invested your they're cash-on-cash I

mean all you of things these EBITDA you've I mean estate an Chipotle EBITDA and kind better right? when trading that And XXx you've franchised segment Chipotle but And and at returns. base all is with this cash-on-cash it's got trading company-owned return got at granted, profile. Wingstop Wingstop's insane those we're I XXXx at EBITDA. So real with still with X.Xx then, leases, owned got arguably

a pre-COVID with or reported look, So was. quarter. it's -- you EBITDA And doing obviously, you great it whatever guys look, were XX

trying double. impressive. your I Now it's you're initiatives 'XX the can I put and mean expanding any No, and think with get on exiting to a efforts look, super you of public audience not be think, market. cost appreciation the appropriate I will I the guess, I is almost beneficial. obviously, in company a... mean getting, it's the we're Because, executing and capital, base

Eric Langan

to we'll The weaker is think this keep -- we've I I a the information out got putting there. is, mean little get overall, right there. market now.

sick afraid this all. We've we are people well. XX. but fear of as I the great week. reading hasn't through us the it weeks continue it that X people the the slowed think I run as X, XX week had last going week And great reports a of little the this getting our the through seems XX to going to a be X down for and it's from new it, week, I We that by is kind variant really I'm first think from and aren't business think at at that as from a

I And through it which keeps strong coming going is a very we'll in seeing. think to us we've so I going And just December, think to these been January, that to as have getting February, very That's weeks lead quarter. what better. March, strong we a then December see

that. So, I see think we'll continue to

Adam Wyden

Yes. maybe but... little getting million of EBITDA $XXX light bit Well, is my then a

Eric Langan

like Well, working I'm for for, that's the [ph]. making under a what me change

Adam Wyden

jump off you. to Thank good but a be up my I right, Oh for wouldn't work. goodness, keep All guys, that the nice. Zoom have

Eric Langan

a All right. one. good Have

Operator

coming Capital Noble Okay. question from is The Gomes next Markets. from Joe

live. is line Your

Joshua Zoepfel

that I XX is just know guys question just acquisition just four are guys, first with? And dealing the trend Joe that for of in looking? those based guys acquisitions? like it going those on. Gomes. strategy sort Zoepfel exposure Joshua on finalizing for My a you're clubs. markets this I is you Hi kind Is filling like pipeline are you it a noticed new seeing of you new But is there's are guys how

Eric Langan

Well, The we've most a was less current that or for our aggressive. we acquisition more EBITDA gotten In Xx past, were we of did like for acquisition paying them, I think new the Xx acquisitions. four some locations, in we And markets. only said, in those basically those the some markets markets and you great with dominate they are of those just locations locations.

about excited that some look that. very owners "I said, Xx. we're woken said, me other only It's Xx. up I thought So we'll that "well, didn't your you're have clubs paying some quality pay you stuff. I at know

Xx. If then multiple clubs pay going higher where would you certain what markets a that supermarkets, I -- pay there to for certain and are I'm call some, in Xx that to there's clubs. certain And I

lot can get calls And make to happy owners if of so from them we cash right There's just deal and of Xx simply considering clubs now fit have. getting the see and to We're I'm are starting some now. people ratio of Xx they a a amount those because that of large we discuss where where in that done.

lot million cash look you cash with with million million If for $X in us. coming this up On down. put deal, of cash $XX XXXX, payment back $XX or up down a we

over But to time. do to every few XX-year another month. I'm are years I'll I the which am looking XX old, money. XX every need deals much I next talking payment being to I back you just able So cash slowly I Look, want guaranteed probably years we're more than attractive month these is want a and annuities. for to owners, that pay and the that for XX years. live actually bigger cash paid a obviously, larger

So some on right some owners got that, deals like that we're to talking we've now.

So course. a there, lot of of exciting there's out stuff

Joshua Zoepfel

like know of Bombshells I see over is I at franchising of at? to there to possibility want want the to you alluded state a kind Texas. Is other of portion. outside looking the states I you're as that how to Arizona switch going. a maybe looking you're just

Eric Langan

for stores. mean, looking the at I market we're Phoenix company-owned for Arizona,

it other getting For in. franchising, of One talking an out. we've having they states to have three they a done curb get got curb the without road kind a -- we're into a thought the fight up a groups with in now. going ended property. Transportation We picked of had to And is put were problem about the and then right extra we Department cut with they cut, that

So the it land would -- about lost there property spots wasn't work. site enough parking make there the XX usable. have makes to which not They

they're another spot. So for looking now

So going love then bit Florida looking look in. of be in of possible their we've obviously We'd always right -- in current The think Tampa we're to on but to as hopefully, kind We're we're in guess say, we're Naples location going Florida. are area for I got second looking that them going. soon little Orlando interested I it to in they'll well open their they're the in those the as now several a talking to get to open and and now look we from, look and discussing still location. And to can about then others one vetting maybe in find Miami excited those our franchisees and and of get they're with Coast even as that markets areas and stores started talking company-owned the second companies, well. West down on already, expansion get that Jacksonville. markets

Joshua Zoepfel

increased the I that, cost are like well. your that like Is traffic, better one initiatives may. that of saw clubs any just in question, Great. going Florida if more reason there And those? then I particularly doing for slides into one kind of

Eric Langan

week. York mean growth Florida in, state New And customers believe on with $XX think especially after year, record business Miami, Tootsie's that's it's Lauderdale alone year in probably our that I friendly. plus that think $XX area did the been I of that's was of there. almost helped $XX million clubs very is doing, all And down Well, I'm politics I after I already run that but just the week market This to big I the best at current do phenomenal. is The think helping the recovery our mean Fort was our moved has week tremendously. we I that doing after ever. Florida. is not and million last rate numbers site definitely a million week location.

So increase XX% at a is post-COVID XX%. you're Tootsie's. Scarlett's talking up about

acquisitions, I we're are clubs numbers and mean, think to get great. even right? your always, us. restraints, now, of northern on there, haven't is used restraints, don't see I restraints, can't we're coming starting muscle the an I sort bigger first numbers lie. are these you it's of take We we as put restraints call little the the as as a them week. influx So online say, COVID math And in while, you new to when I the the have as our the going And see past off kind

And so and will very, gym up. March strong We're up. into and now May. definitely very every be I we believe, locations, the through move going day to we're as building building we're those And

Joshua Zoepfel

to Great, and That the on year. for thank would more all for the you that. the Look be quarter forward on congrats [ph]. color me. But

Eric Langan

We are too.

Operator

from is from The Okay. Wealth. Orchard question Scheurer next Jason coming

Your line is live.

Jason Scheurer

months? other say, about from they're the quarter the let's Thought doing. the balance much you your do business congratulations. it sheet, slowest, next going question sales to are it's how sales pitiful; of quarters think was was for locations. A fourth new makes your to XX in for the some guys guys, excellent, look considering add What Hey you you unbelievable

Eric Langan

$XX run million $XX if months we'd in to We're -- -- me million of ask EBITDA. have I'm $XX rate million. about million sorry, $XX would I or that Well, $XX about XX% revenue, about or you'd million revenue, thought that. on $XX running so of already ago, a be million we're at three revenue of About XX%

nine So XX% only -- for we've about based we're a what, had run that's now, mean, I rate. on weeks But weeks now. eight them only

markets, tell. getting early a but It's to because employment in markets of hours been still not their it's where So in just very open difficult. hard some we're the stuff has little we're

new hire and new people move bring or to people. people having So in train we're and in people

a full staffing been longer if full whatnot. taking and hours that's they'd it little already open or So bit had would than

XX% adding So into I on believe trajectory to or XX% that, we'll XXXX. XX% said, April it. about March do over months to that's why going a I it's be three about -- growth like

doing were at be XXXX, we'd million, million we'd XX% $XX XX% be $XX $XX they at So in million.

So $XX $X $X.X I'm million, goes the revenue. by say extra $XX that end XX% line. of of at on million going to And guess about I go-forward would million in March, the extra million, of a we're to least so bottom rate

million maybe. we million, to million. $XX little million bit, it from $XX a to we goes down $XX Maybe So round go $XX

I'm that. So any million on March. see with issue it rate what of end an EBIT run don't right the That's by level, we're projecting $XX on And a and $XX million now. I

I at certain up close reopened. talking they we've close to they those mean couple I again. days, of get days stronger. open with think hours get they're 'XX at XXX% full running to have certain their ramping been restaffed just gotten I've clubs to management. hours. corner, of They turned close now XXX%. those the A the or We're and their hours reopened, the got

of So day. by bit it a take will little it's time, day

Jason Scheurer

On XX% you XX% to margins you're Bombshells the do the said margins range your for the -- clubs? looking you range is What operating see at. your earlier, operating like for

Eric Langan

during think towns, think lot, the -- events going between are finals events the the I contenders revenue -- be just the normal around tickets for probably the out here NBA -- local you games, playoffs period than just club's teams And the what to on X-month take XX% higher locations been toward executives depends lot. I and because sporting a if beside sporting and I that Basically, really those they're mail. York, us. XX% Knicks going would on affect not us do. if XX%, was is the mean depending York big and New Certain finals, it Garden were affect the the our not The right in giving us to mean what the in we're New I a

of So hockey every to who games. game. we streak and the were depends all of goes to a it customers got games, real who just after on The full a on hot sudden, comes Rangers

one market -- at to time it's market, varies of time, our I difference. just it hit markets So to time. If mean, from big a all that's

think low with on XX% XX% the XX%, judge But side. the to I everything. side, hard on it's high So

Jason Scheurer

is Okay. do those have dancers a give to you're that the going What's and this going you are guys every along them going plan like be I is rollout to doing, to free with something the one or is site question encouraged that? going fans this And only something lines? then, your the like with to be to of be that

Eric Langan

promoting to course, clubs and business business lot of bring into then, our and with to come with help think, clubs. to the them online going I popular -- in of encouraging definitely travelers our promote it their clubs at especially, be see very business clubs communicate our them customers. be to clubs We're customers business will A where build their our our their and the

the call because town will guys it times there very a town, so he the year stay online the time to, to business, town, able can be each create club think come comes what and come that he when I visit that he'll typically, well. on I right? and and to popular girls are to coming not relationship he's fancy be touch can as several into the coming relationship, in And

Jason Scheurer

but I'm I guys lower numbers Yes. for just Sure. quarter, numbers. with Again, your those the you very was -- happy numbers. Usually exceeded expecting I'm slow

So congratulations.

Eric Langan

-- real, I we're was ourselves; this sometimes were this -- we is mean so is understand. like we Yes, it real,

Jason Scheurer

Awesome. Thanks, again, guys.

Eric Langan

thank you. Yes,

Operator

Hollingworth [Operator Instructions] Advisors. from coming Holland from question The Andrew is next

live. is line Your

Andrew Hollingworth

I'm from I'm you just much. hear, sure can because the very making calling thanks Hi, U.K.

Eric Langan

can we you. Yes, hear

Andrew Hollingworth

reporting else, the for Thanks thanks. like fantastic Great, Again, everyone period. taking question.

on going for in Just based a segmental couple I you the questions of that. about the [indiscernible] to ask me. margin was

Just to much that how the the revenue lift you're sort But margin structural range. run sort of seen of clubs you done answered of you're and you've low that good cost sort be is we've the from the getting the margin, structural clear the of on that current the over terms is going is period? that, terms that coming the base so much how in that the of in ask of trading to I obviously, what really was is coming from is level sort of sense last of in think of rate the us of you changes in telling end what of of two-year

the XX% I'm comparable to that's talked making basically question. to first just So that you XX% about is Slide just X; sure

Eric Langan

years. three stuff. our Yes. we over systems we've with last from of streamlined think about Then comes margin we've zero I basically made -- COVID, accounting from revenue upgraded five the days. to some -- tons in day I went the We've or mean huge one of

some made And company. what the so call in pretty cuts fat the I we in big

years, Now some as XX you fat. XX, have you grow over

started of we But rid when 'XX that in you 'XX we've we gotten lot at application some got of move lot we a -- there. Now adopted and we cutting in you XXXX thought revenue 'XX. your put the strategy by fat and fat a into and as still realize zero

ship our tight conscious and keeping and of focused the cut So, very our staying very some we've I were and able more about tight adding tight, that a it to controls on running keeping just back, margins. been think we costs not

that, back. But markets not we're is it come but some that of is some So high seeing spend now certain is VIP from customers. our it in from right

be. be those depends that's If but the huge you big full to a when XX%, -- back, difference is that spend. VIP why I force, that it huge customers margin say all come -- XX% spend that's VIP on -- margin we'll As comes big then is back that's where XX% in going a say to

Andrew Hollingworth

Okay.

to I think just talk difficult it's very about...

Eric Langan

cutting bit you're I'm a now. sorry, out sorry. little I'm

Andrew Hollingworth

Okay.

having six while. of it of Just to slow talked a then sort down second. In of trading can a about previous good sort periods you for and of time, eight quarters

margin So in next period eight probably from then slower the now it not of six of be much to a to a XX%, in period could the end quarter or slower telling or this Do us wonderful and end ended that? in period. you that a that's range, trading lower the think up XX% of quarters, obviously range terms that had bottom of for is used but to sort now, than is range say what quarter the of be whereas that range you're bottom years you

Eric Langan

but for that Yes. we had I think and property -- years that own, anchors. long we cost years return with we look mean that making on we if 'XX. I And back clubs a carrying of much you clubs And concerned didn't we a revenue that or lot and rid own call on money gotten so what legacy still you line 'XX, in go We to when as investment as back had weren't any worry. it. pre-'XX, that we've those term, especially had that we eliminated were top really started I doing attention XXXX we were clubs those of pay we in didn't we'd

that were those were so to the losing is XX% low that's drag a clubs why see a and margins we margin, from went one. when you times we X% lower had And

And we what asset. not those If locations so we now, move it's reallocate have we those underperforming that the then are margin will and coming a much do locations, is or we that that and dropped gone location will to into back. margin to XX%. capital do sell have X% drag Well, higher locations,

Andrew Hollingworth

really clear. Adam terms well, a really I that's for in help out really of one ask and business you've Okay, outlook the with given impressive Can past of of terms laid helpful. is obviously, well capital from calls obviously your presentations appealing That's more? bit just allocation. on the it's in I and think as the and,

that run. of I'm look a really what for you this the that. shareholder me only goes the I when And that is mind at congratulate comes question business wrong. in I I for to fund the company So

happened that And last talk little bit the so I to and the you in to like so. and what's months be -- Mastercard or companies. Visa and of situation face certain in of a you others the just about seems six sort lovely just like sort of sort hear it world to some doesn't particularly the And governments be in have where situation against and would the businesses

or society politicians... to talk if about us Just

Eric Langan

government... the of beauty the Well,

Andrew Hollingworth

that? appease to do you can What

Eric Langan

and much or can we we I settled, through it the two, right? can't, then up another Yes. us except we A there's we out. use not think. So every the get Well, city a have tie target. until council that then pretty then these with government And deals deals settlements lot a maneuver we of us for new changes is beauty to the years, six it work over when litigation And constant four administration moving courts really we that's it do move we with is forward. we that or and and

San in We're we earlier Antonio. are today are battle reopened do a be towns that squeeze still to a this don't try cities with morning, San the Antonio. going passed going inspections -- inspections. then there few go in that But soon. come and there compromise we've to passed get they we here were to We inspections every now stores with nice and had to to us the we to them and I have and the and there's protections understand think like to

So that's moving forward.

there. just always It's always And noise, always There's white white so noise there. it's I on legal some on going some battle noise. We some going have right? call I out here, it, white it's mean,

that's deal if one. And we've where At Every we And department. You to right. try fall. payments. we so win then, we're slip like because gotten you wrong, we have made we've Walmart. It's and it lose you some now settlement and the point, most legal of have some times, with legal to. just to And get big, do a

You've them. seen the payments, we disclose

we times, And we payments. some win. a And so lot sometimes make of

that hear battles try about we lawsuits. and don't we're put to brag we we winning, we and just our have we going we think But out. out in win go out don't But way. get to not not where it's and and pick to -- our we can XX-Ks battles the If fight away you don't we cheaper, our course, win. we fight our times Of frivolous that XX-Qs money can on we throw about get because the

have stays a money rather higher insurance. pay our frivolous on we legal spend than lawsuits, great but will so We a attorneys our little

insurance. keeping costs have only I We negatives real line now. continue right to out keep think a deals. are the the relationship that hope occasional We company great that reputation going, And -- insurance that's in the our our only with for really and there

had you that. in survived closed we survived downturn XXXX, the We Now we've the pandemic, XXXX, being down. survived obviously,

after trend. as they company, even us it we'll I years throughout something then back -- and us and they time continue we stronger a at our think everything the throw we've, this hopefully, come proven now through was that every and keep and throwing figure that each thrown way year that at

Andrew Hollingworth

all bigger think it, of hopefully. become be there stepped as rest to suppose rolling you're to of really as much is to I'm I trying successful sort be do you're half going going if And look [indiscernible]. in from you're I -- at you're all the a up the the slightly terms you to sort and like company, of up Miami industry

just I'm And wondering reputational... from a so

Eric Langan

figure the That's going that growth, to Because quick. mass. it's critical pretty compounded to When it's what you to we've you grow do. gotten needed statistically,

Andrew Hollingworth

how work there it somebody is to is come know want think happened an and made forced perception in react. of more of stink is a with And terms organization trying as more issues a to it in just what about the wrong More that more just business years it? they therefore, the position you So is I question to just right? Visa of about could public go sort then than ultimately, and of that about question My Mastercard. what and to I'm put lawsuits, of in and myself was just to sort were

Eric Langan

Yes. it. reputation we I about obviously, we and our -- work care mean, through we

Dallas XXX businesses clubs these and end. days Worth all You low clubs biker and Fort on more We've expand A popular had the multimillion-dollar there's clubs bars all -- aren't from happy and few people strip or they have just and that. smaller think in in very as keep like they're the pick 'XXs marketplace. of not we are the anymore; all It's lot City disappeared all the the the of I nowadays. especially the them. the of XXXXs -- learned Bombshells were time. clubs But in when I to more, really can't mainstream, mean, the

kind You to have the operators. rules operating as bars for operating without a resurgence SOBs. while skirting that. but tend the and I of in way. certain markets They're last right do little what call with don't things on bikini a rogue They they They're

being negative then any present away our -- or -- we do negative headlines there. haters just and We there's best either continue do business thing. we try a our Obviously, the eventually, the side tax to do do. our people think do impossible things I we long continue them operating good best think, it's So do of avoid and somebody The to and how best the to we always is that, why I neighbor to as we things. But headlines. and out key, successful. operating we And can go we'll just do avoid all continue get they can because as to we be to for

Andrew Hollingworth

appreciate answer. I Thank the way enough. Good time. the the your I you you for appreciate taking questions, take

Eric Langan

thank you. Okay,

Operator

from question Craig private next investor. Instructions] is Smith [Operator The [ph], coming

live. Your line is

Unidentified Analyst

Hi, question million had just impairment. so the I on one $XX.X

what's area? Or any in with market of particular months triggered that was that COVID-XX now So XX sort on?

Eric Langan

opened numbers -- do multiple in other and the management -- back course, up just a no really year, colleges quick there's got college can't weaknesses markets non-COVID XX-month of some easy. the in you material that's on argued you York mainly and just opened It's just meet you where COVID see clubs, the period. towns New we the give that you markets. Texas exception haven't basis, in late I'll our when We -- the because the have and of we a and impairment so Northern easy and some basically that if Sure. It's used our the fully GAAP.

of and a said, have you very no auditors and months So blah, we're rebuild. said this COVID course, six to doing, or our this count we and projections at. nine is growth This don't because COVID period what there's of we really of where these it. about that, took dry; out months it we out was months GAAP, no do ended cut the and in problem. impairments used we of way, COVID long is under it's for came when just really there's numbers we're This said, believe, these the like so COVID We term, no markets. in no up we some And do COVID one -- But said, you what we exception. in some with every redid I okay, cover And included the markets. We and follow rules. GAAP, exception those blah of

Unidentified Analyst

Okay.

part sort if of future see that So of do reversing demand... in maybe the you

Eric Langan

reverse it write gone. off, Well, it's Once you can't you it.

anyway. You a yes, -- I no in We But company If our had where get million cash in what based gauge be be really value. a free written use it numbers of would much cash numbers is to get on non-GAAP worth our probably of kind go-forward our cash back. did, value. right now, the on generation, company don't worth would mean, the see value how generate can we our book a flow use EBITDA don't you doing. Tootsie's going, Tootsie's they're to It's you write-up book as we we basis. never write-off value -- $XX and and up we're numbers, just

another us, book So I number. not mean, is just value to overly so the important

Unidentified Analyst

this. floating? your that is just related other, a that is rate not new one so But debt on financing, or loan to And fixed

Eric Langan

in and with onetime the a remember years ceiling the of not. if for or but XX-year at on I five a it's at adjustment end carries another adjustment amortization. can't it XX with -- But years, five floor for ballooned rate which fixed for five it's of It's years becomes years, end a a one it -- then there basically, was

Unidentified Analyst

Okay.

if tomorrow impacting So you rates increase, guys? really not that's

Eric Langan

us for It won't five impact years.

Unidentified Analyst

Okay, thank you.

Eric Langan

from five a could years it have Then in now. small impact

Operator

The from Jason Okay. is Scheurer question from Wealth. Orchard coming next

line is Your live.

Jason Scheurer

the a stock I'm at million deal sorry, on just was shares to wanted crazy a guys. under guys just going X.X gave back of you Hey, printing impression share. $XX, buying the get money, under little you again Anything be part because the clarification that's are to because right? I buybacks. $XX away more

Eric Langan

That's it. the way we look at

I much think we're aggressive. more

We I build our now, the acquisition. see out a holidays, think plate. on We we've up. I'm million made I'm getting trying -- right cash letting huge cash lot through got in $XX today. know borrow the we're guessing head stuff or I we what of did a would top on to I the of some end we of cash don't I'm but that. don't hand we'll so the now finish right know million my of quarter. the how but right off $XX paid

are for of debt acquisition We financing clear new free estate on all own the loan. property pieces other couple the of Arlington working and a first and that plus real that a we weren't location the in in the of

So quarter, cash. the we package being could get that if that, on so. us end there's of in at get get the closed When -- give a or by we some small more $XX million we quarter the into together put

year, to We've be doing we've a speak, lot good feel our on getting plus after and know been maybe been into really we've whatnot probably we acquisition $XXX,XXX and week. January through -- busy. getting lot get done. cash a done, of end move quarter the week we of trying a get just Xst a this to flow. done, $XXX,XXX, free getting cycle said, free homework I growing I've this and rate I million after everything we're right $X at for think -- now, going been of I really of and I'll February cash homework, the K a that run service to the like don't it's so just just and got even as debt good this

when so And maybe So an we all back I'm by a and actually in that back -- get is old you, look, kind strict probably better But public we of office Minnesota -- with quarter, anybody out going There think our think flow, going I the this restrictions and don't cash I the those police is. is is voting -- was don't just a I last is like Council a in deep get I we know do huge like there. next this is tell And our the just of I at with do quarter even what you you'll well election. stock think the big rate, what chart four basically we February, I close if I mean the we're back just down. the on to where deal much show because it. probably the midnight be south put going May I'd is May week to of it if buying I in run was city our to out -- very, exactly in, haven't everything, north, can understanding down. pre-COVID, free allow chart off. to got do don't think City right? that. really can or to slides that close going hoping have to And think when they're and -- there very nailed this old to it's I back crazy, think hard and slides that go to a from this really markets, It's been exactly price in we're see we going you buy. want some voted members our

there's I out. want our think we We we at anymore. able want to we to go home don't open, -- want want go -- sit big to a we eat, to go So turn want be businesses to we want like our

I we're out in in idea I that's much to be a by our hopefully. able of think I the -- May May where of end March, and the by back quarter said, So favor. get the weighing we'll think that better hopefully Like at slides, have positive

Jason Scheurer

coming good XX the the have told being that... also from clubs you Well, numbers

Eric Langan

Yes. the where so is know, is on are. I the right to based I at. And we're that other back say they're at -- this, how seeing then -- to weeks can Based as today, but I going idea, trick say we've can nine solidly that, to once this we'll on based because now. is, easy we're buy trajectories I are calculate is figuring them price. said, use And stock want or grow. this mean, we and better what new, that's seasonality, super on we that's really we we not clubs where to have so projection mean can what where problem I still this get growth that's got to that snapshot back not the But that XXXX they're our be but I eight at like a all in soon. the when free I projections to cash at. Then yet stock; think to flow And then we're to we're we're get the projection, they're yield

Jason Scheurer

a anything you thank much. -- you deal. around Anyway, very just is $XX know, Yes, complete

Eric Langan

buying we're buy definitely close; getting and under It's we'd let's If it. Yes buying We're it. it. tomorrow. so happens it's $XX, what see

Jason Scheurer

right. Thanks, again. All

Eric Langan

you. thank Yes,

Jason Scheurer

Bye.

Operator

This is chance the last Instructions] final any for Are questions. [Operator there questions?

a an Michael He's [ph]. Juradio coming individual investor. we have question from Okay,

is line live. Your

Unidentified Analyst

least dividend. it Hello, Thank call or had about that I just the had effect. few question to considering maybe you I back, a a a you last taking remember minute the slightly for you at were mentioned here. something question raising on everyone. quarters

buy if I I So on that guidance love same to distributed cash cash to I token, businesses market. do economic a stock you guess, I -- and with provide the you into integrate deploy in I any me, characteristics love could by was able you wanted are good but that mean, could being because there the great say to just see I -- couldn't myself guys things and

as the now ahead. So about yes, having it necessarily as I have thinking one don't or far another -- go -- view

Eric Langan

about it have the at I of a would would we This growth big talk meetings. I see I increase. Probably, have -- don't to at want we you have x up But be think to Board rate. be mean, due those our we'll you to look when year. got a the come rates screens, quarters to dividend annual in growth the rate We've continue [ph]. basically, when

I we're $X.XX think trajectory. So -- our see $X.XX depending see to see two right on group of I March now have. the we're at a two a quarters things, going It's going we go the sure quarters actually paid really efficiency our growth can can dividend use worst of screens of $X.XX that. like or But we'll longer. of frothy can a a you and buy with It's $X.XX us a quarter agenda and like more it lot But maybe, a hold $X.XX paying or and gives capital make review and I that I puts I we're possibly lot before to keeping us said, of us as us also mean, that. is it in and year. feeling to It to and broader and our investors just be allows something investor's year, allocation -- a capital paying on that strategy. tax the $X.XX reviewing doesn't

don't course, like -- mind being shareholder, the like those I aspect So checks do And of that of we I quarterly either. a personally dividend. very large

Unidentified Analyst

on that. A really it? pipeline Does the is your of not -- much would factor question is all? at on entering factor? into is process that follow-up acquisition a thought -- Or it How a that a

Eric Langan

a million Look, know we year. $X.XX, year, $XX We $XXX,XXX talking in a I $XXX,XXX a -- got if cash. raise not had dividend, the dividend. you're it generated even we've On we

So doesn't I dent. mean, $XXX,XXX, it even

have effect dividend coming those feel increase like that base of we and got low now, type the know every what setting you things up no thought certain that's even I what and all. X.X%, about on said, our really quarter know small And and like I our has owning So right? said, so good, cash a is about I and shareholder the that's it's very, of a growth stock. field I right cash. You good at very it's portion process X.X% we're mean really yields,

when meetings. So at those Board are we things we it discuss weigh

like And I it. weigh said, the factor. to continuing continue will those on So growth

I we do growth keep trajectory, trajectory the people searches on growth a in that's when that and important it's that up screenings; think coming so would that think stock important. that keep all I go

Unidentified Analyst

you. Thank

Operator

like Okay. to turn to remarks. I'd for Fishman floor back now Gary the closing

Gary Fishman

you, and and Bradley. John you, Eric Thank thank

we've Noble conferences in Virtual thank in our of our We'll subsidiaries, safe, what at first Bradley, And Hollywood, Stay please Markets Eric, April the Conference, invited Thank the and And investment Small Conference calendar visit to night. stay and and of company always, 'XX Orlando, as XX. Cap healthy. January XX 'XX. Just you. of had or to Small We'll behalf you the at through be good Florida, Sidoti XX Eric XX clubs a the January be one been Capital on restaurants. in the and to number XXXX. of the reiterate Cap we'll ICR half conference mentioned, the be participating

Operator

does ladies you, This today's conclude gentlemen. and call. Thank conference

You may this your Thank disconnect have your time and at a wonderful lines participation. for you day. phone

RCI Hospitality (RICK) 17 Dec 212021 Q4 Earnings call transcript