RICK - Earnings call transcript Q1 2022 | RCI Hospitality Holdings, Inc.

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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

John. you, Thank

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

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

And I’m Eric? Eric to and introduce of Langan, at Eric the Hospitality. for If you pleased ask haven’t Langan RCI now, CEO President door. or RSVP-ed me

Eric Langan

want the Bombshells didn’t well. to Chhay. All Thanks, Gary. from We Texas today. our our we cycled perform any We quarter. noticeable Nightclubs contributed first and and Bombshells for XX strong Today, Omicron the part reported CFO, impact Thanks our has December joining here results it after in new recent continued company-owned quarter Bradley I’m experience markets. results. club acquisitions thank through delivering quickly us another to our quarter. Arlington, of virus. market our the also And for closed, teams with for until

are aspects our execute to We continuing of plan on growth fiscal all for XXXX.

achieve to expect with We progress recent our acquisitions. club further

a franchisee open quarter should Our same or our San and timeframe. the during Bombshells’ this quarter, first do early Antonio soft in AdmireMe website next launch should

new our as recently actively loans. are club and capital pursuing us helping Bombshells locations strategy new We as allocation implement company-owned franchisees, acquisitions our well as bank announced

Now here’s the Bradley financials. to review

Bradley Chhay

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

and XXXX. non In from $X.XX GAAP GAAP we a of will EPS year-over-year the We PPP our this noted. All our $X.X included XX% pre-tax to call generated million, quarter ago GAAP EPS that compared at up $X.XX. first the quarter EPS per of totaled $XX.X fiscal the extinguishment to $X.XX, that with quarter, equaled be debt is XX% comparisons of pre-pandemic first share million up loan. $X.XX, unless total a gain year in reported of revenues and year-ago otherwise to

increased increase Excluding was up a cash million. which was Net million, standard XX.X% Free $X.XX Net from and $XX.X $XX.X was of items, totaled operating million, ago. EPS to flow debt year $XX.X other activities cash an XXX%. non-GAAP income XXX%.

years mid-October, XX year-over-year the increased and operating and to clubs was includes XXX% another quarter. were the recent reflected of This in in year-over-year our non-GAAP income continue the to up acquisition adjusted acquired northern first quarter to X% of million. other also rebuild in increase our net clubs COVID benefit sales our XX.X% was and from from revenue. reflects XXX% also to margin as to income. XX.X%, the the basis, XXX% segment revenues, segment of VIP early increase in of operating of year-ago Revenues operating in the primarily Revenues and up XX% were and high-margin EBITDA significantly income government-related November. increase of Page XX% million. strong approximately heavily performance They compared and the $XX.X The the XX% year-ago compared to income ago. grew the contributed and turn benefited XXX% margin the to up a restrictions to up success from quarter. operations from quarter X. club clubs, $XX.X Nightclubs revenues margin still by approximately all $XX which addition operating compared year-ago on were Please service Now they operations impacted from their increased Same-store since business. two in million, the This XX%

are progress. explained, acquisitions work-in As we’ve

to Our is through plan year. service, and continue margins staffing, move to the revenues as we improve

Page to the quarter of to to revenues two two inflation. at XX% for any had and strong margin quarter December, and revenue another Bombshells. a in revenues performance set record month first by operations XX% success quarter of of of X% believe to a done turn from million. please $X.X solid million, without other approximately revenues first The reflects of and Arlington. margin for for compared and than XX we’ve Bombshells quarter, with in our the months would, Arlington, to income the sales years early Since its Bombshells increase. sales from also operating of increase managing and Texas. were $XX.X revenues million, its income of income $XX million. year-ago of XX% you Bombshells compares more if This in great new great affected Overall, the first Arlington costs X. XXXX and opening of benefit preopening of operations new Same-store impact reflect up Now $X.X operating job XX.X% a XX% The our up we were from food compared ago. of the contributed Operating margin labor quarter

As margin XX%. of the result, within operating a target to XX% stayed range

of Going forward, of operating preopening margins the four without these effects costs. Arlington from should benefit quarters Bombshells

X please to Nightclub to goods in of of some all the continuing cost our to of operations. margins and salaries SG&A cost COVID as higher consolidated statement Improvements first attributed Now quarter and in the are Page items as sold, well wages margins turn of revenues review and during quarter, our savings.

significantly also Interest left we Please in the XX with October cash. loan although which acquired due a million turn million January, with a forgiveness. $XX quarter, Miami Real As million to closed than dollar of year-ago a balance of revenue, million to we XX.X% operating Scarlett’s with and On XX. expense margin of debt Estate cash higher result, were associated November. benefited Non-operating as approximately December percentage to X. bank GAAP a compared that was clubs of was Page expense slightly in $X month cash. the December the from With debt XX.X%. $XX acquisition the January declined lower XX, of This for ended of as we a in the us Cabaret gains $XX

part cash million. would the The purchase Scarlett’s Scarlett’s was of bank we not exclude the a had have we the of $XX January loan. balance Now of approximately property, property if

year our quarter increase increased strong a to and by will XXX%. net ago. finance our Free activities, point, XXX% it to of operating maintenance CapEx. So cash at by increase compared increased primarily we a portion good This a Adjusted first due get from partially out. cash small cash some was offset in from in flow EBITDA

XX% XX% free of percentage flow revenue, a to from increased EBITDA Adjusted to XX%. cash as in from increased year-ago quarter. Now the XX%

Page turn This Debt million increase $XX review to debt $XXX used an the debt primarily please net loan would, debt and Now increase if XXXX as our X reflected costs previously million. you acquisitions. October finance to XX, to club December of was of of reported manageability.

our We rates. average continue reduce to interest weighted

XX X.XX%, was Our ago. pay first a the down due rate lower higher than year primarily debt. quarter This basis and points rate refinancing to of was

Our years ago. from points down five rate XXX almost is basis

the in periodic into financing, estate commercial club did one unsecured like we rate acquisitions convert other seller lower enables to bank financing in Our September, and used higher rates, refinancing, debt. us real

also refinancings schedule. Our our us enables maturity out smooth debt to

when range I XX/XX our year as of manageable our X% weren’t This dramatically – costs to is averaged five by to impacted at with sales XX/XX, next Page million well see, revenues. COVID. Now, X% of turn about Please within we’ve chart our and the X.X% can that averages a Occupancy were you which very our – would is $X say. look flow. we cash years, amortization to debt XX for pie

is the X.X% secured Our which the January financing. real other will listed our second secured it clubs higher as debt respective a seller This as by And of now assets. refinancing, a lastly, result of XXXX quarter secured secured XX.X% consists XX.X% applies. estate. of in little This debt be of to by by

which balance to comparable Our unsecured debt our consists of XX.X% our debt, is sheet. X/XX/XXXX of

As I our we have are last of reached and our a loan forgiveness mentioned small SBA through with end of on left the repayment. amount call,

Texas well. of We our the Comptroller end as nearing Settlement are

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

Eric Langan

Please Bradley. XX. Thanks, Slide turn to

Noble’s and talk to Conferences continuing January, result Capital a in of Markets Coverage. our We’re through the meetings Initiation to investors. Sidoti ICR new This is

allocation So to capital I’d strategy. review like our

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

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

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

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

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

shares The Please share to the third when is back than buying yield our more free – on Slide of XX%. flow per action XX. is turn cash our

making in clubs we quarter. Nightclubs, Regarding we are first with important acquired the progress the

rebuilding The on see and this Louisiana for by coming expect quarter this and our the revenue anticipate is or a improving mobile run fruition. in rebranding COVID As this next. We rates. San reopening materialize, in AdmireMe Antonio club And soft rebuilt Step, friendly Step effort. is as rebranded quarter, mentioned and to is we to last I this call, later site a launch margin remodeled next early scheduled and our quarter. club

are We talk owners businesses. their with club to continuing acquiring about

there part investor we in our our clubs As target we adjusted is $XX presentation, about fiscal that can to said XXXX. of buy million – add said in recent current EBITDA

in company-owned very is Arlington new location our doing well. Bombshells, Regarding

Bombshells. mentioned, Bradley As new it record month for December the for in revenues a set first a

for land Dallas Stafford in Sapphire specific purchase to – permit looking market, Houston another Dallas contract and in two new in area we under the the another a couldn’t necessary the Bombshells, market. are We We at. for Dallas location one in Bay in use were get that in

looking we’re other at so And sites.

and the Phoenix as We the continue in Florida, market for locations. to to North well West talk brokers company-owned as South more

store to franchisees. talk to by Our first end should this first the in be and part San of other or potential the Antonio continue opened quarter next, franchisee of we

Regarding we cash. to capital Scarlett’s management, in $X Bradley something as property we’ve is had This million acquired planned for mentioned, do.

strategy big This us questions. all for to with access work more dedication. line for and Nightclubs, formal hard bank A Bombshells, our the your implement corporate we sale. for thank two teams, resources capital with that, all million still $XX.X And ends open presentation. contract our have and allocation the loan under provides you to properties Our we’ll and

Operator

floor Instructions] is and question first Ladies And Gomes Noble you. gentlemen, Joe the Thank from coming is [Operator now Capital. for questions. the from open

line Your is live.

Joe Gomes

Good you me? hear evening. Can

Eric Langan

Yes.

Joe Gomes

Great. Excellent guys. quarter,

the the question quick the it the at us acquired better million were detail worse, $X you the more a revenue. where a on had how first weeks that Is color just maybe acquired that math expecting doing the that we’re a acquired of clubs for – real on the generating give they is envelope looks integration little Just some or progressing? over them, quick about little you’re of Nightclubs, of kind here back of

Eric Langan

weren’t mean, Sure. hours be going October on knew it we when They we I They a was to full staffed. XX. took short challenge. yet, open were over

issue there. to knew there’s be going issues some – we So

momentum. clubs, very As stuff other people around able fill have were country start an in spaces, of were existing we building were they we some not with get to some some the our brought corporate, from to some and from did used the staff going, that. We that issue

staff existing as some and So well. turnover, we have

problem. the had we So into to so compounded hit that certain to throughout January, – country. by locations Then the early the late added December, going COVID

very The are that. about getting been And of better But better forward. locations. as at dealing going with excited and so now, the we’ve I’m numbers

exceeding are Some some numbers, XX%. of and about XXXX locations are the still at

So we’ll continue locations those to get and the push right on to grow things.

remodeling to CapEx the done. have We

So we’re of waiting, most done. that is

one if March and by that we want through XXX%, rental the not property downtown of City Rick’s look landlord. in that on that York change but It’s of working project yet, major be Denver. There the Cabaret we’re one New X. be Now only make we the more and approvals still majority, a started suspect storefront properties, that and to like done remodel to haven’t will our we left it

the here street well will the get next done right center. that as convention months. in the So from across few hopefully It’s

great and the help I has look going, we be I’m March back is excited XXX%, we’re about as with at somewhere still overall, that, where as them see to potential Other think growth is to on between think definitely everything great a But that that want these – And locations. So we clubs it from just else take May and property it get in. really income. that be XXX%, schedule. far the and existing about revenues to those locations schedule purchased. than could increase very should we’re which We been our

Joe Gomes

Do northern think for there’s the the getting the partly, service to this you obviously, Okay, as mentioned, you quarter VIP back business. And the much in are going growth extent thanks from of type out won’t revenues, contribution awesome Or color. people of that kind that? more the back we that to in played the upside is full terms see forward? of clubs

Eric Langan

see to going we’re growth in think that. I more

revenues. You’re used return our – revenue to going of to be to see mean over it XX% service more the

right I think we’re XXs still the now. down

of there’s it think to lot have bandwidth weather, with could considerable as I weather So nicer. there. the A do gets

very, good going to going of of the April, I as go-forward very sense at as And going looking – the quarter. our of some to May going months is are whole to to like what is one know I company. get on think be strong three our March, the very we’re basis be I April, part May still those and a be of a part a quarter for think we’re March be primetime. strongest of periods. second third will But

baseball, so kind the I three seems us think of of Hopefully, be the as last away spot. that to Omicron that will saying. time a great would Madness with We wave very during started to And in which us a they’re great just, COVID nothing Texas go hopefully a gone. I other to should those and think, new season that’s us very, a exciting will Dallas some freezing the this prime last bands up, good, out. there’s way be this comes for it in freezing very an And months. rain hopefully actually of going to big March It and April, basketball And all some and up gets across to for down be better, coincide. week coming the storm hopefully, all be I’m strong. weakening, sports lineup give coming just into Northeast, again we market, back the little going weather coming got snow a

and week primetime. first last it’s So hit us February. of second which our in is third year the time hitting This our week February, of

four in six-week run weeks then hoping two six the get this I’m weeks that’ll the in and into the run last of a kind we’ll we quarter, March. February, of past as and weeks of nice So blow last

seven seven maybe run. So week, week even nice

very was in little million quarter to for quarter a come still good. $XX us. January. closer was we I a this is So January still thinking over solid sales for in would we’re $XX million,

will than be that So October. did in better still we

rate a weeks us. we’ll how forward quarter. these next for have play very So going see quarter this on last to ahead for quarter run quarter, second hopefully out, first of just strong still nine And

Joe Gomes

Super get know I – race the in in this a that, like And one-time you Right, sporting a that, X really right. have be nice towards a that know some when speaking it is location, events uptick. Outside where any can I of events, Miami And Bowl you will there into coming April. big locations year see that other are any club your of coming – Formula are?

Eric Langan

some are Bitcoin that of to areas. think some mean, I and like I our coming big there’s Conferences NFT

We’re of in coming in our Bitcoin big April. of conference with the up the think I will help process in which at locations, Bitcoin starting our accepting dramatically Miami some there location,

We’re hoping in that by then. place have to

some landing club. We’re helicopter requests a some because land pad on want tootsies They several the helicopter other we’ve their at cool things working VIPs. to had Miami, like big in from

out, like, well, that work We’re we I think.

the process of up club running just now. that doing that is do numbers us. dreamed numbers be right volume mean, is I we’re we I doing that still that. The pre-COVID that incredible So record to never going we’re could – mean, in location doing or The for phenomenal we now. is like is race stuff the that even

the to know to which lot the from it are our X’s think still still Texas money clubs get ways. when business Formula brings We is there. Austin, Austin, a area of track big I of in various and XX in Formula miles X we from XX

the tootsies this, know literally track, but not of think, from there. blocks, it’s I I’m just tracks the So I blocks XXX% sure

draw So as should for be well. us a big really

Joe Gomes

I’ll if and queue. then get more back may in I One

What quarter. in metrics you about Just for of kind in looking quarter, launch are the you’re site third soft of early launch? maybe the a second AdmireMe soft talking the the

Eric Langan

initial on creators is new put and X,XXX clubs creators get or our girls site – goal. our to the I the that, To clubs. on creators X,XXX site partners’ our from want that

– to combined, and goes and think – Hopefully, Try to that continue more we’ll involved creators, convert we’re balance with then initial So more acquisitions around about need be just where to to of we’ll can egg country X,XXX maybe mode let At not to it creators. of balance many has well let to there But or enough have get its promotion expansion more build. creators and launch. XX creators then more creators of customers bring and either the as in going a through trying its for time there’s site. of we metric in think then, and chicken build customers. on the it and creators. add partnerships a and through clubs from goal owners ourselves XX the we’ll are and those own And where not – we I on the need course, too through has club then I can really own guests and about many hitting enough just as clubs X,XXX ahead the other the enough we and their too that just first be effect with build other and momentum our on build to that not customers, our customers

us. the I balance delicate think that’s for

looking good How is by So handle my we’ll thoughts on a I May have the that’s personal what call that. think on really that.

Joe Gomes

Okay, ask else again. for Great quarter. you. all I’ll someone Thank great. Eric. questions. Thanks some let that, Appreciate

Eric Langan

you. Thank right. All

Operator

coming Anthony your next from The Sidoti. Instructions] [Operator live. from line is Lebiedzinski is question Anthony,

Anthony Lebiedzinski

the taking you Eric, at there what take perhaps questions. thank Certainly the Omicron way very impressive the shot Omicron. was you estimating a is and for can sales with a the the on afternoon, any Good quarter? even fiscal with year of start headwinds you. to some impact for Thank

Eric Langan

this probably In February from. same. us our the our kind I it our corporate we’ll was affected done part, I I it’s February For – the – December. the effect out course in Texas I it’s about most But I would now. say, January, think markets. wiped least of it’s office. in any around mean, it Texas, probably don’t kind think of see at difficult. rally think somebody major XX% its markets, quarter, And in for all care getting work getting that COVID done? are of Because I day mean, be about we himself. A great up other went positive, and we in and it. of did to get we a actually were little able a come very can’t this I queue were all finished skeleton “Oh, staff, Like now.” going worried points. So of the couple else taken every through job handled was, I’m and to

they So total luckily, of was all he was yeah, three were two or They it days. than knows, times. of it hold hold with so. more out mean, the changed all five about precautionary for that’s short, us very we the the to to did they a with – But them XX-day and days I was weren’t sick for weeks – just, really most before sick, a most five all before

XX get that them because offices, keep tests, were we all So negative we’re key we there. couldn’t let making that the people, people days, type our in before especially back losing people stuff afford of to

We coming at other, do had on each close done quarter the whatever this have out night to queue out in we the get to time. for avoid and get to people

Anthony Lebiedzinski

Gotcha.

that glad everyone I’m well, healthy. is Okay,

the to in and Now able guys corporate so XX-Q you it on. sounds office, like finish the were up

as here, forward operating the segment margin. as far looking So

did for the into obviously, Bombshells location. the new So Arlington preopening of expenses take account the some

think that safe should the the sequentially, should comment it you as you there? there? to could margins segment, Nightclubs So And about is better just op how we see if margin to operating the assume on

Eric Langan

see for picks We the Yeah, on I and maxing But are March. is really little as I doing month expected again, could don’t – a the there. for market to know, guys us, the the better doing. are up think – we’re I Nightclubs, I the Nightclubs they mean, the numbers would March its tootsies service between then continues bit saying as The think. kind to revenue Denver grow of of

XX% we’re But As going going rate. very to be maybe stay occasionally, up I XX% the margin to say some with far XX%, that us the segment to to And have that range. Bombshells, events in Bombshells if in big I’m that to XX%. happy blow XX%, XX% we we’re as going to think very

nice have so or As will issues we three be a the get many XX% But labor target locations I to in can came not We’ve to to – pass the going weight Obviously, the we I tough were in I’ve good – when less the love the of that less our underperforming most that staying really running the – on today. issues has our there, margin that are expand stay kind any short-term target couple everyone the unhappy. range was before of very Omicron been having those we’re as very mean, and talked to And with costs. new for most that to. the we demographic for having, that those that is through XX%-plus had older locations two – some years, the effect. figured well. I’m out some But locations it XX% see at I and management brand we Bombshells guys, this don’t we that the – helps point. first are so markets to part. more of through. been able those obviously, healthy on for really the for was of if locations a is did underperforming locations range, the add do we But way as – we

people. you’re you’re We’re you’re missing already management, missing you have missing sudden, bartenders. missing cooks, short, you’re then and

But I some for up what think of a that in bit some will think that more January. January effect effect December, and all I in had we’ll see did. make than little of March

be mean, than think, that our the be know going going already stronger, to January January we was. I much March – October. I December And to Our our is is much, beat

us good against be kind new So and is projects give we’re February And and have it’s and we acquisition. clubs run how going. to then XXX will we’ll does goal. kind new idea, of where really really see our April think a XXX And we’ll total of think, I idea September which through close add that get And revenues, between I then of an then rates. and through November, how will our as

get all the As we’ll how to we through into numbers plays as year, of well. that later the see that have part

Anthony Lebiedzinski

Gotcha.

great expense to was And higher bit then general That’s estimated Okay. a than here. hear. we the corporate what

notable know there? integrating if wondering of as how if we I there were corporate the were Just items, was don’t But any about it’s then the should – going rate the quarterly sort anything meaningful acquisitions, sorry, if there I’m any you think out just expenses. call just non-recurring, non-recurring. And obviously, wondering maybe forward? expenses to for the run

Eric Langan

SOX Yeah, acquisitions that the quarter, a clubs. impacted year-end top work as And lot especially always third-party you our at as first for the that work. control the requires well the which audit, by year-end a work, of internal work, quarter is couple of any lot with due diligence

you’re normalized going On a rate. a see bit run to million for that higher rate, a little $X.X normalized up there. I’m ramp So segment about it on saying

Anthony Lebiedzinski

it. Got

and you, best thank Okay, of luck.

Eric Langan

Yep. Thank you.

Operator

question is ADW next coming Instructions] Wyden [Operator Capital. from from The Adam

Your is live. line

Adam Wyden

time the do of year. four this to on This favorite my here. congratulations great times I get only Eric, quarter. is Hey, a

of look, let obviously, But get made I you’ve So progress won’t what cost your all capital a it to not show. our in relative some listeners of improving terms real was. of

the a I remember, there the a and point, during trading COVID. was $XX to that stupid obviously going it was don’t stock share, the discount at this like, I is you mean, a big look, a of flow. restaurant rest cash free thing and are were of share mean, people $X shorting bar, X I know, hospitality were you we were I at And some very Now, do low number. to trading space. still

tinker $X million for to about XX% think doing give well, for of the call when on really perhaps of mean, or look people right, your that, you new real through of it, it say, a XXXX. more margins million, locations. opening $XX your margins, real to schedule I the sales had give the $XX I the that bit. They’re Bombshells And today, estate. fact you’ve because beyond estate you cadence be real estate, credit you XX% history of at kind say sense when with with it little $X and kind X% business booking million, like, like of people a helpful might that’s, got I got talk I million, store terms you’re the it’s XX you’ve in

if So than or would whatever, worth basically that that’s be $XX million entire a $XX I like market floated that cap. the more of million of $XX got EBIT. you business, doing mean, EBIT million, was publicly,

of a mean, public billion. subscale worth course, that’s a $X But I Now, company. that’s

And really you’ve so brand Bombshells this amazing is my in some basically to took it. you tinkering fix built that question

walk But for the hard could the think the can how counter opportunity? intermediate invest be to is the growth restaurant of many some – disagree kind you what you people mean, obviously, what I long-term and we understand of to unit people term in strip really You’re potential, the are for and that. over be cadence that – think can the agree I people on it’d clubs or think interesting through you because

Eric Langan

the by talking people franchising possibly our think that way even And going it’s now. if by point up going to into open And weeks, weeks. every ideas two we actually a a and Well, store XXXX, eight with every the XXXX, opening the XXXX to, we’re end of the store where six of end the be months. for XXXX, we’re to every picks

more questions. and getting more We’re

it’s We’re seeing qualified people. We’ve had people always getting interested, just we’re qualified interest, that solid but interest from the now. getting more

to XXXX, So we’re open XXXX locations see teams. separate two a them. opening like in talking XX to us being or by I would able year with with XX

teams two a weeks. that or could every get you six opening weeks separate So every unit eight do

between like And weeks XX unit do the a probably so really every opening teams.

Adam Wyden

Okay.

math second… some do let’s So for a

Eric Langan

[Multiple we three Speakers] And opening well. as don’t maybe have teams, I know.

Adam Wyden

I’m something. tell or other some the you And COVID let’s this Bitcoins or because is I math the viewers, the drugs doing for of back math and know, maybe of But do doing. me they Because So if envelope they’re the hours. the after over, stuff. rest anymore, on idiots I’m these the shorting stock some COVID is mean, have that don’t don’t maybe all I are guys,

talking stores you calendar correct? in right? XXXX, you’re Okay, six XXXX, so got And

Eric Langan

Yes, calendar. Yes.

Adam Wyden

All right.

following stores some let’s million. all But newer So and maybe your the you At than new these Bombshells to weeks, think doing margin of right, just of income, new you the stores organic, more XX% million about $XX every EBITDA make estate got and say say one EBITDA And that. the off be real million AUVs, then just it’s six the running higher And following that’s simple ramped that if the I let’s map funded sales mean, close do you’ve that’s stores, gets $XX because fully right? right? of another organic, year. a – of six you when with growth. million fully are $XX geographies, the year, of That’d are stores operating from $XX XX%

So basically you Bombshells can so XX… your think you cadence every year, XX% grow can grow XX,

Eric Langan

to three, But the A for plan. couple next do of that’s every two we the can possibly, yes, years, it year. know I

Adam Wyden

Okay.

of that’s saying that. I the mean, year, I you of But I’m a could you’ve be is mean, out in build EBITDA, now business a the EBITDA And… the following is and of that year Bombshells? operations growing business, guess, the a $XX I intent, XX near-term you XX, side. on and to that going after this that’ll million your the what – So – it to is, be be Nightclub part got meaningful precludes XX

Eric Langan

a to it could We Bombshells be the if us two-sided to the is for magic That’s taken that million when option, think Bombshells, have number. the be standalone or has Bombshells entity $XX seriously. we way continues restaurant would willing us money fast acquire setup an for to looking the pay big into at that the this even it current be fit RCI, – growth chain. the is currently to or

a there’s of lot up So number. we that to open Bombshells hit us that when

Adam Wyden

Hooters I around. in up they’ve I know [ph] we mean, this sale, Hooters if is that going mean, So locations wings concept be, I the mean, Who knows could stupid million? X be – down. they’re on I at the mean, got anywhere? I’m this $XXX and puts XXX some locations point estate, whatnot could real for you to right, and that’s about million you if margin, doing crazy operating about can a talked that including is a get math Wild million XXX Buffalo which is we at Wings million… think $XXX the at if that box, XX% at is X

Eric Langan

close. stores. it’s box, couple your of a few at you I a you a mean, if I X.X, need need extra mean, you’re so if look X.X you extra,

So I mean, yeah, I Bombshells. XXX think that’s not an issue of

that looking at don’t we’re all. difficult XXX think Now locations in at is Florida, we’re I looking Arizona,

Adam Wyden

So locations a EBITDA is XXX business. million $XXX

Eric Langan

Yes.

Adam Wyden

on XX XX, or XXXX. doing we’re right? XX because So right, All

that a XXX if means it’s million business? get we profit $XXX to So,

Eric Langan

I we Yeah. I points. It’s as said, very going significant – ignore can’t those be to question, can’t

Adam Wyden

look on look, it, want he we’re to got here, I I like we allocation more Donald there’s around. to something capital, he to got I high thought this get about because, and massive at thing doing going we not went I I go to cash Well what you man. mean, front? to if all offer? like, you wanted about and the Hardware went a so to was you’re I flow said Or mean, guys we’re you’ve because Have Have swamp. costs and much right? But Trump. I Friedman like – mean, now, when to thought something XX,XXX, he the quote sloshing or insane, because going aggressive have doing repurchase it Bitcoin is the did. Bitcoin. studied if wash, know, to? absolutely swamp you capital big from don’t thought a doing X,XXX, thought I grow want Restoration is $X.XX our this every maybe these Gary interesting tender ever share saw about and drain to remember, don’t drain a I mean, to mean, you generating and mean, this.

Eric Langan

I makes – have mean, hasn’t we hand I we’re on, that’s again, XX be basis, down stock our do we just we it stock buy gets just buy When buying we – and continue prepared the to on we’re hit sense. of the need will buy up. XX. range, $XX was that’s week the again. over we preparing – to at mean, in Even to start when it because buying Because working few down stock, point, though each up ran a going now last we’re cash we started to enough that it. our on to cash getting were into it deals were – regenerate so I share. saying that watching don’t the to days, our it again. In and range just We stock. It build

we to do plate right May now the have things through in our We enough on have chest the war June. or least at

develop we get today. the we’re we’re And generating and that As but of change, cash. farther could where some at acquisitions, into that’s

keep balances going cash Our up.

a This think quarter, flow quarter, cash the second little be I will the less.

we income didn’t nice taxes. We’re as going last in in taxes this we to quarter pay significant much the quarter, where credit to a pay had have

up maybe we So $XX same our cash million could $X revenue quarter revenue, right million But revenue. this being the flow $XX it ends and in in more million million do bring on up. also only more back $X

watch if to got goes. that we’ve So

Adam Wyden

of question. of a not seasonally brings your quarter to second kind your – it’s strongest, was which kind fourth The seasonally me

XX I right? some you did the When effectively, I from as didn’t about obviously, you burdening then that you get of had costs EBITDA annualized you have Lowrie. think business, said. and obviously and a the million Obviously was million you had that $XXX okay, sales in say, If quarter, quarter, costs. preopening margins, about Now stuff quarter fourth in of you preopening didn’t other think this the you full synergies,

when looking So kind want Lowrie the be York, is the on on of maybe get million, Bombshells New anyway. right? where getting layer be in back return terms you’re huge in next $XX back and right, plus is $XX getting to least that to from the incremental you on you then – And million or going of up sales in I another the million out, at and to getting most at you to less, but you maybe mean, $XX margins, minus. Nightclubs you’re continuing return from Nightclubs, of to growth fixed,

like when are Bombshells think you about extra running his million hard are. So They’ve way. on where the whole basically the clubs, they been $XX

could – I just XX if of that’s XX additional be another be as say say, will much million excess, That’s know, EBITDA. in it M&A. be conservative don’t no business but I mean, as another let’s XX%. assuming this incremental, you So XX% and

in I of mean, that’s right? I this well $XXX mean, of million excess going XXXX. $XXX think calendar of excess rate in We’re middle be I of EBITDA, million would to exiting of well by we’re run how… EBITDA of year,

Eric Langan

forward, to – that. a On and we’re be I close going

think close looking we’re to I to now would right be think, probably going I XX%. at we’re

we’re $X January, I about call margin. a a think a well, really million hit XX% hit this in we January, for in million, incremental March, or got December, hit quarter, January, $X million I is when February, get we going or couple got about think couple in XX% to million it of just of in

million and each in EBITDA like that’s those. of So $X

were about missing we’re at So We XX%. two.

maybe XX%. at Maybe So XX%. we’re at we’re

We’ve our going, Omicron be the going type going And and more. really more spring got scare will over on sure to effects. shouldn’t just think for that’s know a does. we get run XX% scare for see a have. And we month March stuff can or when product a We’ve So should operation. back The between I for to type hopefully, and until clubs and weather March the we’re Madness need now the fever have COVID what what We much clean out I right XX% and the somewhere the don’t whole we on. rate normalized we’re really got we over. basis. see real see is can just demand But to going – people

Adam Wyden

and… had I you front, I mean, – Lowrie going huge on a the be huge employee on up there’s turnover. Also to utilizations jump amount of lost you mean, a that’s

Eric Langan

Denver like our mean, think I December. Oh, I March, in I yes. market… March, think By by

Adam Wyden

I’m look, right? middle of January, about by don’t what saying, care February, Yeah, I the the year,

Eric Langan

end of I’m the end by the By thinking of May. may.

to next XX to us, the to going because March, that come next going look okay, we’re what to that’s As exactly by and for that’s think be mean, – May be see, know we’re huge then we’re to to is at I going it’s feel I months, now going think XXX. going to I said, May, the fruition. see look a to good know that’s in hey, get like we’re three of, that we’re really April, able at when to we’re we’re for going when going XX, I months,

Adam Wyden

know I’ve you at pretty I’m Well, good pretty been consistent. me, modeling.

EBITDA I think, where that’s May my be guess of of is end you’ll the June, in of early or XXX I’m by at. excess

it’ll XXX? be think I XXX to

Eric Langan

every we And numbers keep done they I’ve I Well, when were feature even doing them. do and to thought time. can crazy everything I

where I high and definitely a for working hope keep that’s at to going right it’s probability that you’re and that. we’re of definitely be possibility we’ll – So I

Adam Wyden

Okay.

Let me gears. shift

Bombshells, about We about we talked So that, on we did talked bridge that helpful. was the the sales.

in Jon blew I But a buying I lawsuit bow, with had million Jon mean Can it you of a OA. his I after M&A, I you in obviously, buying Lowrie, those you call, say the was Lowrie Corzine of for as was mean haven’t that up Tepper wouldn’t across all house as that you $XX crazy buying David was inorganic Hamptons. talk right. shot about I mean, mean, of Okay. Corzine’s this basically, the been him Lowrie money on kind

XX market. years. mean, bought for at I an VCGH You Lowrie. stock. asset the for this was got really a got mean, great you. been I metropolitan coup It’s This you is you’ve

the because equity XXXX, where cap. in your get about mean sophisticated sell owners, you that And obviously, as acquisitions? you that. think [ph] to some said, time at owner was you scale, large, you’re think to see Other XX the how mean, going multi-MSO had do how hurrah a You’re you on now to right? these willing you multi-club, I equity, EBITDA large you. actually do had about I last

for of one XX about another I do geographically big men? mean, Lowrie. you how about of diversified only business you’re EBITDA. think more forma now, far a deal deals, taking But $XXX at million EBITDA you’re just big I Lowrie pro two year You’re on or where

Eric Langan

clubs, as branch with clubs, love talking have we’re but clubs, on – that four do we’re I that deals the three there it. mean, ability some out may working to to they’re decent now. bring same there, to would with we’re not six pretty right some right and of we guys I XX deals We clubs we’re to in the of well. and that and have working on we’re the working close on out But one-off transaction. now type Lowrie there’s EBITDA did as two

Adam Wyden

I you working remember Yeah, were on million… $X Boston

Eric Langan

a in million acquisition. single $X

Adam Wyden

big club. I Right. mean, that mean… but EBITDA $X fizzle, was $X I that Boston deal. a million, was a million million or $X

Eric Langan

and very owners big enforce. I think sold they and interested And the estate. a What killed that that very, was without got happened? then The have just not the the desperate, would in estate, it real we’re club – deal. just COVID real

Adam Wyden

shouldn’t You be.

XX think So those are – the know I – spots there? That’s be tootsies other that would are unique States? big be grew I out could I I you tootsies are those I you United what right another I if mean, I and could not assets math Vegas, on know in I those EBITDA, you mean, can think do mean, right? assets, I there do XX. now don’t mean, to tootsies there mean, Scarlett’s. mean, – you look, I the don’t mean, I mean, at – mean, in

Eric Langan

and – surprised. going their really – doing found it. I tax you numbers I that’s on are “Wow, Rick’s returns, actually And those the very go another give the recently you to with that of clubs, under kinds another least. I numbers. at and NDA through And problem know are they guys and that a go, don’t private club, go to Scarlett’s owners of take until New York them get were at what the talking you was you you. a you look get didn’t

no I Now, idea. had

acquisitions. out as we’re all call XX buy clubs, a larger there And as our very takes I’ll on be so those finding energy takes mean, It interested buy are to we’re much and one right the club the listening, just and say to effort And owners us team… it now. I things might the that in

Adam Wyden

We guys years, super the next trading I grow? to owners two clubs at our should in report. send the be is, Lowrie the owners message we’re time business XX. mean, mean, instructive that really to to going that to scale? And at any the Eric stocks are I is of this allocate can allocator. at Because club still because really, personally I reality look, multiple a talented Troy look And trade low hard the in a X,XXX ability look attest to out club of all United a there’s interesting fact I’ll only hopefully look, an a a and And there’s where that to States. the the themselves, multiple. Noble put five Langan going capital which is, and very a is capital

other we’re clubs, another tootsies there, So there told be. penetrated. mean, he got there’s right? I The just isn’t out XX% X% another to me, it’s math,

so equity, it’s incredible and an trade And capital I’m private I what allocate – And the instructive and convinced and we game going mean to ESG that, opportunity. a some multiple point, at that to and at of because this town. of our we are are growth. only in ability

of I and if front thing, last get So, keep look, great we’ll I this. about getting you there. talk you I keep can days bit about AdmireMe? of and mean, financial forgot Oh, – doing go a work. the these a metrics hitting investor from people And little in the almost you to encourage

kind if have you get girl subscriptions. a people, some the X,XXX is you share have of guys penciling guys you like you the thought like average paper, If of the on know, have work revenue any done about $XX I month,

Eric Langan

much are average the to mean, I girls number. lower going a be

because comfortable significant where powerful girls have a very, frequency ramp the very girls brick-and-mortar, my their think increase the to the know. you girls it’s month, ramp-up, – if get the I – XXX,XXX there, and of through off. we they get and intimidated. and guys work to find to thing come XX lot get on it’s XXX, starting club. get maybe pretty that’s XX I them clubs that’s I don’t to all a that I going plus a of a I’m it’s or But – lot think have if working on through with with back that’s of for see a Internet, are us, to able and us in bring started I more girl X.X try a and children. fact mean, them, And But clubs can increase first be little sudden next really girls and into out presence then days, maybe there, forth, on going done of the kick the and guys I’m going are on I average the to that up. XXX, they our I Internet, the on to my think for I chat XX,XXX because maybe can year that million I And the think I come my it’s be be it’s X,XXX X,XXX, message doing can the can a

her table? a girl with to And to that goes, I’m when the night, go was – and he I last go no, to come fact, shy. bring talking over. In don’t I said, the girl like, Oh, want get me bring guy no, her Man, to talk we okay. no, well, over. really Don’t I’m over talk you

So able that. want be is to he even could whatever, know I about, more you’ll if her know to her to want that’s I what to first. about do AdmireMe I said, well, I – don’t – all wanted get is first,

me to And little insight so of kind and a at it see a gave of bit work.

to all now. The it’s to right or very and the it to all should just processing the very and so work or So think a I well. on got in run everything’s up it get approved, get security close. think and site We go next we we’re here – that APIs going with the – credit they’re very, I card working security out live the week all that and company, just

some up So we’ll of or that, within do and launch say, two I here next, operating quick the soft in be of very do and week two think. weeks, that it weeks all testing probably and should

March So invite-only, where we’ll site customers XXth the we’re March, beta have where be password or a the definitely We’ll of XXth have protected. a running, basically be It in. by will allowing it’ll – the of on – their open first are the that then loading that’s once the it we’ll invite ones the girls customers And smoothly, and site general onto site. in, we’re can be public. to they’ll running

Adam Wyden

fight, hard the Keep the we Eric. stuff, good Good fighting and appreciate work.

Eric Langan

Yep. Thank Adam. you,

Operator

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

Gary Fishman

any while We Gary. Jonathan has of questions got is Cabaret $X this waiting emailed a we’re John, It’s to questions. what’s of that the from have anybody the million Scarlett’s a acquisition Chesapeake Miami Advisory. significance of see question couple Eric, Hollander of whether property? been else

Eric Langan

Sure. That’s based by rate on up at year. closing. rent goes cap rent X% time the the of CPI every The

effect So January. in that January, increase into would we X% have just had a went

over you’ve rate If consider the a – cap next own what we and years, just becomes property. rents you a XX.XX% if a the X% the on consider XX it would X% be CPI,

that forever. the was left our So XX years on location now There destiny control we lease. at

it $X we had came told risk. believe well, – they Originally, or to they return a million XX $X We buy Last $X So million years for we and to X% wait, stick year, as million. that it. year, real that couldn’t the XX% that lease. down down million. about couldn’t The million weren’t on over This down turn they with we in property we for turn next property, an down, $X.X we $X.X we’ll cap $X.X rate to appraised and wanted them, million the with property. came almost –

the so title closed that probably clearance. main reason, about cash. got actual part till the we than The worth it’s and in days in XX% escrowed deal So discount we of more quickly two then as we money literally paid

So deal out closed That is well. it worked very completely now.

title else. full have insurance We and everything

pay it but for significant real the normally. feeds very to – – well it’s estate for what into us. pickup a So we And

Gary Fishman

from Great, family Protopapas Antonis thanks. And office. in one his last one

the What service that reopening? cover For pop mostly et a revenue, driver or the our rooms, just story high-margin behind cetera? is executive was there charges,

Eric Langan

Minnesota especially and and in second And that, York. again, very end New week and by November in we and week that right. hard, markets. New December. back All customers of the through did of about hit little hit And a being had Also January. And decline York where New the revenue since that markets January, York are week the recovering. was again into the It started They the through November. time, those staff Omicron club now that saw to probably a very starting the second we to in. early October back of virus slowdown second to see that December, of through Texas, full we’re December mainly well coming January, back bit then our as see similar at open now Those

better I’m the of end going reservations had very some issues of are on there, and through first – we system this weather have optimistic of between, We those numbers getting we but reservation bottle the week at have February, numbers use, February. a for that some I’ve looked

service October, in will going all we’re that that to think to actually, short will Denver period over it online. we’re XX% a service and exceed I get And of revenues So March, I grow back going was on revenue again comes course that time, see think see through I especially to think November. bounce back where of revenues in Yeah.

Gary Fishman

just York City we the from changed in competitive Martin. landscape Yeah, post-COVID? got in New Steve another question Has

Eric Langan

fund club because managers feet hedge our Two did for club But that Street stuff That’s I square space reopen. think the New of Florida. foot City. not scores of York us. moved better adult half that’s good, basically The in to XX,XXX on on didn’t all XXth away It’s and reopen. probably and gotten major went XX,XXX executive XXth square

very of are York. these doing two well New So in

but missing is customers, to New it’s back three city, to and the few York club. days the seeing When him they come back when come for work visit. four nice a we’re typically they they’re here to at or two for days, in three

in few we the going to we weeks. ice as better get gets for that’s past us and well So I that snow, think to what working that need and weather very in regard. And be I see the out it’s saw great, the by supposed March, think shadow, see we’re know little here. in winter great next the to shape. groundhog so more we’re a I But

Gary Fishman

we’re it John, and have looks no questioners an hour. Eric. hitting we Thanks, almost like more

So thank So Eric wrap don’t we up? Bradley. you, and

For joined meet who those between York of New and at management you us Fifth at you can XX late, tonight at starting X Broadway. West Cabaret Rick’s XXrd o’clock

of door. or RSVP-ed Company. me Noble to in behalf stay On April subsidiaries, you Stay restaurants. And for Florida, the which safe, following Eric, our Hollywood, thank company We’d the ask Bradley, through at Sidoti visit & RCI, of good welcome you Capital please the Noble is our and now always, along one If or XX healthy. Conference We’ll Markets, at Eric be as night. haven’t XX. clubs and like Small-Cap with

Eric Langan

you. Thank

Operator

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

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

RCI Hospitality (RICK) 10 Feb 222022 Q1 Earnings call transcript