RCI Hospitality (RICK) 9 Aug 232023 Q3 Earnings call transcript

Company Profile

Participants

Mark Moran	Chief Executive Officer, Equity Animal
Eric Langan	Chairman, President and Chief Executive Officer
Bradley Chhay	Chief Financial Officer
Scott Buck	H.C. Wainwright & Co., LLC
Anthony Lebiedzinski	Sidoti & Company, LLC.
Lynne Collier	Water Tower Research
Robert McGuire	Granite Research
Joseph Gomes	Noble Capital Markets

Call transcript

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Mark Moran

Greetings, and welcome to RCI Hospitality Holdings Third Quarter Fiscal 2023 Earnings Call.

You can find the company’s presentation on RCI’s website, click Company and Investor Information under the RCI logo. That will take you to the company and investor info page, scroll down and you’ll find all the necessary links.

Please turn to Slide 2 of our presentation. I’m Mark Moran, CEO of Equity Animal. of today. host the be our call I’ll I’m and CEO New York Langan, President with Eric of here in RCI Hospitality. CFO, from Bradley Houston. participating Chhay is

me Please Slide with turn to X.

the it’s aren’t To Spaces. Twitter ask X earnings Hospitality X @RicksCEO space Space to you so question, on with Holdings webcast. mobile you a to traditional X, already, a select RICK If join participate known you’ll doing RCI listen-only, the Go in to landline device. call. this titled for computer. can call and personal the as Inc. on formerly join ‘XX making easy RCI call Space need a To and also listen-only a is available XQ through

listen-only This will mode. The At time, this question-and-answer conference is a follow. being recorded. all participants in call session are

turn harbor Please our of I me X. Slide with remind want everyone to to statement. safe

currently Actual occur obligation and differ call You materially that involved in that disclosed result may risks as those We forward-looking statements this a hear of results may or update information anticipated. developments uncertainties. afterward. disclaim see from to any

please me to Slide measures. to the X. Now explanation of turn non-GAAP financial also direct Rick’s I with you

between everyone Rick’s to is invite management located at tonight clubs. to Ave the like Herald West City Cabaret Broadway, in Xth New Street Square. area and in Rick’s at from I’d Finally, X:XX O’clock York RCI’s of join revenue-generating top New me and a meet Eric listening at to York, little XXrd one XX

door. ask or the Shkreli us Martin for If an RSVPed, you have at

away. take of introduce RCI Now and Eric, President to CEO I’m pleased it Eric Langan, Hospitality.

Eric Langan

It in Please this X-month we’d We our by Thank aided third noted, quarter quarter, place. you year-ago had the begin in of year. levels end of of Mark. results turn restrictions, Page comparisons third This to last X. joining the have to should that thought experienced X for the today. COVID us been summarizing and of one affects be Thanks, leverage direct quarter operating the that highest years. one by

the included $X.X that the year $X.XX. $X.XX it tax second better than by of Comparisons similar flow refund. are was the earnings benefit share free of affected non-GAAP was quarter of with per cash quarter’s the ago, and also to third first fact quarter non-GAAP million approximately from Otherwise, X% a a EPS

Now let’s Year-to-date, generated margins are of We with We our in and achieved X $XX.X takeaways. quarter the targets in third to turn flow share per the the Slide free record line EBITDA respectively. earnings adjusted key revenues million up non-GAAP. of X% XX% and cash for year-over-year. $X.XX XX%,

view Texas. After as Nightclub to road that same-store continued view be economy, a seeing in the as and We third and The doubt, AUVs. the a No of been by same-store extreme sales we $X of time-to-time. uncertain sales quarter in to back decline third solid. growth, Bombshells business to in bump amount clubs the in we the decline return profitable. pre-COVID sales the quarters both were from the million held run Bombshells the be we’ve travel continues the of heat vacation for X experience huge quarter rates

Bombshells, remaining strong fiscal lineup an ‘XX, for XXXX. fourth $XX a at new the got stock casinos, XX,XXX quarter have fourth shares we’ve ready purchased in each. And We date, average $XX.XX and getting authorization. still we To common repurchase million of quarter clubs, our

details Now over here’s financial Bradley results. more to our go of

Bradley Chhay

Revenues same-store the Thanks, sales remodeled year-over-year Nightclubs reflecting review the an clubs turn in increased segment. performance by partially, to of X Eric. increase Page and to newly decline. XX.X% primarily Please acquired offset

Dolls-Chicas revenues at X.X% in at service mix changes acquired from part, year-over-year the as proportion increased beverages reflect, nightclub to alcoholic averages. while Baby XX.X% service lower food the up revenue, of compared sales The and XX.X% Locas the of type newly By increase.

results million versus couple a $XX.X $XX.X Operating the $XX.X margins income also related of in was I’ll talk relatively impairment slides. X noncash a flat $XX.X clubs. On million. about million at $X.X non-GAAP million. million in basis, more versus to included GAAP it was

the units. Please same-store our turn to partially Bombshells a Page $X.X an million. reflecting versus year-over-year, by was newly offset declined X acquired income in X.X% to Revenues decline performance and review of primarily in $X.X million segment. sales, increase open Operating

We work quarter revenues do basis, have on however, to the in still a increased row. sequential more quarters now X On a margins. have

to to our review operating turn XX please Slide Now consolidated margin.

leverage COVID that of restrictions this operating of years. As that Eric to the was had we’ve one noted, had in quarter levels experienced the last highest the of sales. due on end year ever of X the believe the ago We benefit

result, XX.X% a margin non-GAAP XX.XX% ago year was quarter. a compared As operating to

performance, the looking However, second year, of margin in at XX.X% in quarter our quarter operating and was generally non-GAAP line this XX.X% third in the first with quarter. the

ended cash line level to other We cash cash $XX.X million. from quarter XX we have March the with Slide up was Free metrics. of X flow generating was of million our some at Please and that for look last This million been at key quarters. XX. the $XX.X with equivalents turn the $XX.X to in

that and included was refund as million. XX.X% disclosed EBITDA XX.X% Adjusted previously and free from free adjusted $X.X Year-to-date, amount Again, tax respectively. was this This XX.X% year. it flow to flow. XX.X% year million quarterly a mentioned, for flow was highest Eric boosted margin EBITDA. Free ago cash date $XX.X cash fiscal the was cash our

declined from on with line rate Page turn some quarter. interest was June XX million The to average metrics. Weighted paying. debt X.XX%, Please we’ve been debt in our XX to of what review March XX our at debt $X

debt we to X% fully our we’ve costs Total range increase to of is to properties that but This within or X%. increased X% to relates new well occupancy opened that optimized yet, X%. used buy haven’t

debt maturities charts similar reasons, adjusted at second X.X%, stayed pie our to For XX. are versus June and XX-month debt-to-trailing March the similar EBITDA flat relatively quarter. XX Debt

me of skip Now Eric. the presentation in the and turn to back XX let Slide interest time,

Eric Langan

turn in Outsiders outlined similar the Please around Slide strategy Everything William centered The Thorndike. we Bradley. do allocation which Thanks, to XX. book, capital those is to our is by

our foremost, and a cash with otherwise. the basis. shareholder to at rationale there on to since different whether to XX% to at goal the X compound by We’ve drive XX% First stuck implementation free flow of actions, XXXX strategy annual per share a value is strategic to increasing subject fiscal do end is

acquisitions. and mergers one,

estate buy to Specifically, in at solid using Xx the Xx cash-flowing right financing real clubs market like value. seller adjusted markets. the We the to buy and at acquire clubs EBITDA, right

awareness. to expanding Second specifically is mass, organically, growing Bombshells market develop critical

organic on is least annual generate cash on And than back growth to to free three XX%. when is Our share buying returns at cash shares per of basis cash goal and our a yield more in XX%. both flow our XX% M&A is

Turning the to fiscal on Slide quarter for new benefit works Baby In the Fourth the an late of XX. expanded remodeled XXXX. June and should update we our Worth. Dolls, and newly completion have from line the sales quarter in with allocation strategy, projects capital here’s fourth nightclub Fort

nightclub media being club changing Tye, in and a a Worth are party club We ‘XX, personnel, looking currently In should some social marketing. Both Texas. reformatted also packages at and developing and new new fiscal our are keyword in searches remodeled. promotions, open drink Fort adjusting

opening also anticipate We Texas. replacement Lubbock, the club in

Rowlett suburb from started XXXX. site. open location are for to in these both fiscal in Lubbock our should opening in Denver Remodeling of Stafford. begin soon new Downtown new should of sales benefit Fourth the our X expected has of Construction on quarter Houston locations and Texas. Bombshells All locations a

the Colorado City, Central the Casino. fiscal Both our XXXX. continuing Cabaret Building to through liquor have process Casino submitted gaming Steakhouse at begin or Looking and has Rick’s open year license permits projects, are to been and & Bombshells process Casino review expected is for begun and license Rick’s remodeling planned the location to city are the in Sports soon.

XX. to turn Please

be Las our numbers Q&A, great. anniversary into I in our XXth Hotel Judging everyone to block, Vegas. by XX at August remind hotel block fantastic. XX go are attendance we want the room is we’ll Convention Paris XXX% so EXPO full, A Club through August Gentleman’s Before looks holding

Recently, is be of and for I’m he hopefully are willing team who looking to Ed me his with the meeting EXPO Baby to sell. integration forward Anakar, told of ready Management President ready – will I has completed owners more. Dolls-Chicas and acquisition talked to Company, that Locas

to and work Thanks hard all We effort. their of all our dedicated do and teams for can’t them. without local

Mark. here’s Now

Mark Moran

Thank much, you very Eric and Bradley.

I’d launched Before the to we Q&A encourage at the shop.ricks.com. like everyone get into out segment, Ricks check to Store recently

Q&A. the for Now

the question, a eliminate If raise you please in Space. finish, to please microphone to ask mute When hand your background you X noise. like your would

free We may of move have of the we After spaces. your number limited to back the you to speaker up space. a audience question,

then and off, things from take larger start some its to analysts we’d shareholders. like of Rick’s questions To

Mark Moran

away. Buck off, please HC First Wainwright. Scott, Scott it we of have take

Scott Buck

afternoon, new clubs guys. questions. relaunched for the the for X existing Eric, taking or first, to Thanks period what’s revenue the I’m see clubs? start clubs. those the my similar, ramp Baby Typically, whether Doll to guess, I profiles good as Hi, it’s curious

Eric Langan

it, continue quickly a to X new and up will take where has and like about it to basically. very typically, Doll about to pretty club taken steady up level then months into we’ll we up But turn Baby doing up – for is flows and will a about grow where months well. ramp XX to

Scott Buck

the comps Bombshells start when to could Is side? it curious, here I’m quarter? going And on get the a this helpful. That’s us easier you up little year-over-year remind

Eric Langan

patios This you last still car, XX makes in eat. the the I even quarter, be XX, to experienced as use. for I’d can’t I set minutes impossible Texas. hardly mean outside over mean, we’ve X the XXX-plus walk alone expect to your degrees quarters. about let same it’s It to

So, that back. well, suspect really are we I that, need hopefully our happen our doing patios but will mid-September. interiors

who I break. earlier. the easier. It break little Texas, It’s a think comps But knows. could will the get weather

November that go in started XXXX, first see little strong pretty in you of you’ll December. a in mid-October, about to a bit of slippage seeing quarter and If continued slippage ran back we

the about right that’s up beginning exciting lot at of – We’ve Dolls-Chicas the a of well March. the end the of X old months be coming acquisition thing. we Baby Locas So at as nice things closed quarter, as got will

start about EBITDA. if seeing X especially through flow it, that of to to new it takes get flowing you bottom back when and take quarter historically, that to acquisition, we you that months own look And the X and we revenue over increase lot multi-club a a us to line an properly third everything acquisition,

and very the of comps XXXX stuff us So first going of rate how at to really a exciting and quarter looks, about time put peak same for excited I’m and should easier growth run a lot into all of nice the kind XXXX. that’s

Scott Buck

for And then last me. one

looks that little allocation attractive from back at Are level kind of bit didn’t at a $XX buy threshold stock. we sitting that guys where capital here a You standpoint? about of

Eric Langan

Yes, a we be stock said, buying $XX. I – back so. we talked days, we I basically, back for the buying mean in well, we day. started it’s $XX. $XX about I and XXX,XXX We were think and few below should office stock above below a Then went up went guess

get want the Haven’t to probably but the this days. couple probably back market. out at pull So, And there new information in on out. as depending take the stock be next all to of as price time look we week early the does next before we definitely get what earnings when anything would Friday, we the market bought back it week, the over

Mark Moran

much, Thanks Scott. so

Anthony Sidoti Anthony, it away. up, we have Next & of Co. take

Anthony Lebiedzinski

taking for you the questions. thank and afternoon Good

it your revenue, of little to, just or you as seeing high-margin category traffic So service to a Baby and component I get mean, I lag said I bit you. sales. lower wanted looking more insight since food it something just into to service about that’s average get of that for But less your a you the little more just business bit are Dolls. insight is ticket? with the a at did know alcohol growth a wanted

Eric Langan

a Sure. answer. That’s two-part

allow Dallas VIP So, doesn’t rooms.

market. we therefore, a room of lot Dallas the in And so revenue lose that private

affect of total the service those So, revenues percentage in markets. a that sales as will

sales same-store of reality that the June, our lower vacations out just and European the And biggest the and portion that high-end especially saw the with is to we Caribbean clubs. in on wherever, million. But about or come doing not in guys the families service in or we they’re and $X New are of because vacationing, believe the customers that York – also Miami is, whatnot, revenue big spending they’re and tickets their or

the when a think we’ll up we have those in we’ll – Texas as of school in end announced headed of I really also, August, And of can we the to give and mid-August Florida idea has us October, where how pretty good idea that starts customers and returning. that predict July, pretty we project good for good August the start back that September seeing and numbers. we’ll have of a a early quarter that In XXXX. first feel

Anthony Lebiedzinski

Got it.

your as first us as few rest far what to quarter? you the as far give seeing business, the So, I can update you’re of maybe in so an weeks mean, in the just fourth

Eric Langan

Well, I we’re guess. only days July, X in

July. have We

Anthony Lebiedzinski

you would August? What like for in early

Eric Langan

a It kind kind depends It’s in seeing That’s first we’ve June. holding in of tapered why comes back. May really mean with we’ve quickly went on of this June. experienced be It’s basically more what we’re I flat quarter to these I done of maybe I bit that April, better. quarters, VIP in pretty said, X little and steady. down May, how how expect spend

I weekend. fight. know we’ve good especially with a actually – was really couple a VIPs got of It decent the this We weekend, have

that helped. back But in the knew those VIPs we back and home So, clubs.

put to a we make is, door up $XX,XXX. $XXX. through and we drops The that it takes Put spend that guy the guys lot club of problem at the have people to $XX,XXX them can of in $XXX lot a good a

the kind now. we’re of through right And so going process that’s

We accounts. seeing are strong customer

X the with that customer back up X in to next just We’re VIP weeks. happy come counts. to want We the see spend

Anthony Lebiedzinski

And then other just question. quick

struggled you that cash lower so As Bombshells, far certainly of segment looking portion expand as guys you’re and that. to Admittedly, your flow. a overall have in

to think invest segment that your to we the should performance? given recent in as how willingness that just continue far as So about

Eric Langan

I we’re working numbers. the on top mean, line

to grow We’re little seeing start a quarter-over-quarter. numbers those bit

our that to XX% back on And that for. to get got XX% getting so margins we’re we’re that we’ve to now where just the point shooting line to rate focusing bottom and

there be quickly, the we’ll pretty X in hopefully, quarters. think I next

with did everything, to some pricing certain costs. items reviewed get line just minor We increases more in

cost couple of a points of have We treat. labor to

food like them are we to Our now levels where costs be. back to pre-COVID

and got I’ve of other said, up items normalized course, those XX%. get little marketing then, I like that few more items back a And we other we helping a adjust people and can level, of margins just So, to need to a costs are bring XX% the bring couple to to so there. that in adjust the

Anthony Lebiedzinski

Well, that XX% Okay. would you be Yes, in that get margins XX% wonderful. to could good. couple of those quarters sounds if back that to

forward. much best So, all and right. Well, thank you very going of luck

Eric Langan

Thank you very much,

Mark Moran

Thank Anthony. very much you

Collier up, Water of Research. is going Tower we’re the Next have floor Lynne Lynne, to yours.

Lynne Collier

a much. Thank you so Congratulations on great quarter.

somewhat Just then have a couple one of questions that and general are specific.

you geographically. I you First issues, what weather you’re of of any trends to seeing you’re across it has Any and ask that Texas the but geographically that country? all, know want I sort slower trends about seeing seeing? are is

Eric Langan

call you And that late cities we that the I everybody have – Chicago, little see pretty not kept I It’s Yes. I the is we’re see mean, a down mean, The what very locations longer. up overall, few from you a are strongly XXXX. – locked – think still Denver. that I bloomers.

some sales. country other seeing those declines markets, But seeing still the in slight we’re in markets. boost in the across same-store We’re generally, nice

see Thanks said, out of call But country, for the is I’m can’t our VIP to they’re get we’re I Stuff to that like VIPs throw we I’ll make part invite. VIP it. the parties, you back. revenue. I that. try I of will like, And parties going throw like host and the and biggest the when

guests have tell VIP of And quarter vacations, that. November, pick so it’s we’re actually those Wall lot nice Journal big just postponing to we’re see talking December a are that in not VIP parties, like to us. to That try I a as we’re October, back. welcome that parties. Street that from we in up we everyone throw think We’ll against. saying, lot comps I And we’ll And try a boost when our we know spenders our and articles of the easier that going said, on

will So, think it be I right.

we on typically us side. sales for will X in you run it Now, a If Nightclub to quarters, up the see starts our historically, same-store and downturn whenever that back look then last

Now has comps. tougher little for the been a Bombshells us and a in different little

And heat XXX-degree said, at is like of that I helping all. course, this not

will Houston end Dallas forecast and day about it’s or look XXX degree that like every my soon. I hopefully, XX-day is XXX degree So, But just day. at and every

So, for the going those days know XX some next at pretty to tough in we’re least, we markets. have weather

So, we’ll out. it ride

pushing keep Well, I stuff. indoor say, like we’ll

some has once think said, think I like – other trying social We’re media the patio some faces different dying our know stuff, But – go some Bombshells. I mean, I back I new and starting to come I marketing to our bringing some new that – sit outside. I’m into other back, do

in meal like of where love. and I mean, in XX% not, almost and spend I a it’s is there beautiful. really because really lot Colorado. I now to, the sitting time XX restaurants in probably indoors Colorado degrees I’d And what up my of outdoors

Texas. to back So see we’d in love that

think consumers once our the right weather back our will I be patios on permits.

Lynne Collier

just observing it’s it one Texas, so seeing are But hot, lot just, can a of regarding weather? is trade obviously anything hot very about, or know Texas tickets down in in go one it’s question I else other which Texas no any have spoken in you’ve sure. terms here Dallas, outside? in you I than and Are for you being more

Eric Langan

said, ticket we’re really. I big spenders. mean, Not we’re what That’s I missing like missing.

is I everybody It the run town. wealthy year. another the a and on was was I go happen I would the all before, fancy run to predict and actually Europe last off United it year would I these took run vacations. the out and that out of reality that to Caribbean of by went – year think of States I And,

I European up crazy find if it’s hotels European flights. mean, them. and If you you can look

to If of in booking they they even filling last And just last south. started year to Vrbos no anything the you everybody all ran people And go overbooked expensive. ran started but left so year, the – didn’t available, this every find benefit and United all last All the you year. it’s was They and They think, ran place country. the ran. can extremely look States mean, I all one we Miami. year, up. got – all tourist I

of lot in And down, this especially the being areas. year, about hearing you’re a empty, being Vrbos them tourist

And our last were are good And year. That $XX,XXX, guys. guys. certain ticket $XX,XXX, they’re in In think those really bigger sales affecting off – being the $XX,XXX, so markets spenders. are $X,XXX smaller year. little mean, to $XXXX order were your markets, those I – in that those our really, I big that’s a this are those markets are $XX,XXX

So with take $X of them of million guys it a out town those doesn’t revenue. lot for of

Lynne Collier

you Do Thank you. follow-up about on figure. a Bombshells, how much comment I last have one pricing. approximately you’re pricing menu know carrying year this ballpark just of your Bombshells Just versus quick year?

Eric Langan

much, We’ve also tried adjustments, some based down. made but to costs price on inflation food coming we’ve pretty with

steady So held the just down. costs some came actually because maybe food items we,

we’d marked food already So it up for the costs.

that we took the adjustment So on side.

other So are increase about to costs we’re where run food the we we across as raise board and But, to had say X% can. I’d on X% the to we a prices. overall, best moved the side, up trying

Mark Moran

much, Thanks Lynne. so

it Granite Next please Rob away. will take we Research. of McGuire have up, Rob,

Robert McGuire

XXXX. point? this laid anything out for you’ve Eric, looking Hey, vision at you in afternoon. XXXX your Are Good at

Eric Langan

XX at point. down I yes, not to enough things we we’re have have XX I’m like, about this think, we on, I now. mean, projects – really

of the that casinos and the running be projects have we are think we X the about right get clubs, If now. them. open, X that’ll X I Bombshells X XX

items, or course, we So with, we’ll can that acquisitions. shoot I burner of And, on for mean. the XXXX X XXXX have still about

months to of and we set. need So the I new plan already the that. we think, before need to be focus are toward to for really to end as Bombshells to open will end is things, XX There’ll be And we the for so target find or more XX it rest the because one these X ‘XX, we’ll locations only of about ‘XX. those have end for worry ‘XX, new the of won’t close

those of May the casinos investment and and hopefully February unknown. that April, spending licensing, big depending April on or heavily course, that’s hoping I’m in will for openings, close in the between be late involved

the and in. to the And those want now, get on HVAC we lead early There’s I protection end want any before the fire have units something pipe have times us, work, or And don’t to – long the systems I heat but we something buildings. some the because in air money but a conditioning real just stuff there in have winter until very at not do the to which without systems. the get on, turned off. any don’t and we we or heat we freeze puts water decided right spend February, heat of have and do in the January, those of expensive to

of So, buildings units, put September. end units one of by the of the all one the the in, will hopefully, – have their

We But unit, smaller will remodel, the smaller on casino. it’s on begin, remodel cost lower on that. a

it will expense less quicker. and be take So

of So are right where now. kind we

Robert McGuire

so the We’ve present. at a inflationary XXXX pre-COVID somewhat to back look they’ve been flattish when somewhat been comps, in nightclub I the in environment,

feel that. you for us a could if wondering give Just

Eric Langan

is marketing pretty that kind look I doing and The kind of blue Their collar of mean, got quarters We’ve first was you the down. kind stabilized We collar. kind now. it’s we’re of solid were if of leveled quarter, the customer – this spends discounting, of at to X that I kind right off. like right said, leveled has – blue the there. the

started suspect service that the And, start year pretty said, I than not just It started spend like, April. was this was – X over come had it declined, the look the back. It And I’d you drop at to pretty – the breakdown, in mid-May June, at you can to you I biggest or June think, guess, but, about this you’ll strong sales our July little seeing mid-May. was and we lot. If better, weeks quarter. a next and revenue look can see look dropping I bad. but a like

bit this We saw of weekend. little it

see just for don’t going right think we So know back – everybody have keep school to I said, right I don’t gets back up starts But in come on starts we’ll there. I – back. the back. and going now. it see as you and when may just it’s weekends watching know just to back spend when their guess, that when from and back work, vacations I to come we’ll settling

Robert McGuire

When we price emerge Do from an you a coming RCI tends the environment like a raising be stronger prices find leader of COVID, to that into you do out it lagger? to economy? be tend

Eric Langan

lagged of our we we’re plenty and see is we’re raising I very doing our well we accounts. competitors not – I And would with say. we’re making prices. Actually, customer mean, money what

hold that, especially well. lower do collar, to end, will very of – We able we take on off on the and the some that blue were the

quickly. very seen, off steadied you’ve we’ve As

X little it, we’re building said, I on, bit and saying said, us. for earlier into we actually some the with this now blue like the a a be I month it to trend tends I like little weakening and in collar about Like said, markets. level a off of that, quarter seeing Or saw

to have That’s going end collar watch high to spend, believe, So key on the side. the we’re just to nightclub I spend. white the success, the

raise enough changes needed May did to Bombshells, those towards a we of and April I and do. made of adjustments we when open. were get and to from like data the obviously, patios prices, the it need lot was out said, but where On as June we end we We to headed figure we got what the

I which seeing why this that – or not quarter. XX% this in XX% XX% is of margins between results were, you’re Bombshells So XX% quarter, any the for think

we in that July, to And margins not I to XX% – back. closer be that XXXX, definitely those suspect XX%, September that hopeful going do get August bring the quarter of XX% we’re and to the I XX%. as if in first the through think to very will I’m we we’re

new open. construction, in will The be store along. stores are other There’s moving

again. about them of starting and And They’re COVID some energize So promise chains, restaurant to team. Bombshells. that. new there’s keep your they hard it’s away people, getting try without growth to all top excited at the them the growth other can growth, chains steal the to positions right, and because stopped

going it. the part So, to process. attract sure of that we that that’s, The can I Bombshells need, make think, we and growth part is management of team we keep want keep and

Robert McGuire

last And Okay. cash laid At projects? financing The of point. point obtained those for company’s a bank see out question. projects or at number for financing lot you of would this a bank what

Eric Langan

money not keep I it, need I sitting I when don’t bank a we’re the can cash. Well, see And get cash. using million go to in from $XX anytime. still on our reason just

cash the up. We’re tying

oh, let’s money back such The rate discount that with think, is cash thing always borrow like we’ve done. have a to only a other to buy we’ll stock, flow and day use we buy do buy not in a I in just stock. $XXX,XXX back normal stock it. And The huge our stock’s

trying to not price. We’re affect the stock

for our need don’t price I the best for our for the the get just term could to cash. trying get stock long shareholders. We’re we

$XX in months think, got cash. mean, I $XX out we’ve last X million, to about we’ve the put – million I in

but we’re So building balance being up going fantastic to not on the it’s invested give us sheet, is returns. that

million think carrying we’ve the in how million, $XX debt. we’ve costs. in past, added We’ve typically you those had When $XX grown about debt

stuff the interest new you’re still so And carrying expense. when that opens

on property the to to utilities things, through open, out as line, operating interest drag, is have those little bottom which is, carrying going going and We’re and with paid they taxes will the to the increase stop operations from be these new expense what which flow cost all revenue. very little there

to – going for So to is great I be XXXX be think I us. it’s a going year think

days. we we hitting we closed beat into had I before days, previous off in right March we us, just our February, XX mean, January, still COVID taken were year that for really think for momentum ran – Even quarter. that without we’re We hit XX the stride, I XXXX closed having rolling though right? were

you all of at you’re another ‘XX, acquisition. ‘XX look if to jumps. going ‘XX. I those to we’re And of have that’s So going think see one no And types over with

Ed. is Dolls do in meet I running. talked They’ve team with at Like acquisition I’ve got the with Baby the team Ed They’ve in is teams is me. – greet place Ed His believe great I now. the tonight. ready. all up ready. got and He’ll said, management New be York

Our are place. in systems

We’re X to enter growth see X to month revenue starting we as we see the that expect period. to that

decent lower that get to some of that like to of great we picked acquisition. meeting the comes – flow everything a with the I point think We’re that XXXX. some working said, had quarter early of pretty starting we adjustments kind to the to And, first line. the bottom I Making up costs

I’m – excited very for excited So XXXX.

– just ever. going think best to I that’s year be our it’s

Mark Moran

Thanks so questions, the Rob. much for

of Next Josh Noble. please it up, Josh, we will have take away.

Joseph Gomes

for questions. Hey, Thanks my guys. taking good afternoon,

Eric Langan

Thanks, Joe.

Joseph Gomes

Hey.

you club to owners kind any the of is new acquisitions, obviously looking want this environment? guys see are mine, just how of for overall most how in like potential answered cautionary of So, I just kind but being just of kind just environment

Eric Langan

other we’ve called X I’ve mean, really got in me don’t that we under told to last the this I acquisition months Yes, our I haven’t know. get belt. almost has that pursued, so everyone

working on it. We’re

talk EXPO. Let’s at

already, – hoping be Let’s seeing hotel I people I’m going EXPO. talk full lots count to of there. the there’s at mean, room means

going some I’ve while people up, to And out to that we to set there. us that talk optimistic people and we’re meetings some got there. we’re make So sure to, that want out talk I’m while I’m – very and

multiples what’s So timing us get and together to in And, list we’ve for But and years. doing and quickest figure XX think easiest of EXPO, put best the I deal the try what a the and been start – for we’ll and what pick process. always a kind year talk out the make XX, we best last we’ll at clubs always is. and cherry like the EXPO we every someone locations

So, we reality how is just it. can the do quickly

close we We’re ready could pretty something now, so quick quickly.

value that under would loan. approximately if real of we million loan about XX% have, million I’m $XX think in to I a we could or real unencumbered pull million. to worth $XX estate At $XX correct, roll encumbered or estate

to the we’d With million million, parts under $X pay off. have encumbered probably $X

$XX our So now we we payment if million out down need could a from right pull bank easily it.

we we hit our credit, of to. we of – line our line paid needed again we could counting so could not if a down bit little that of so hit credit line credit probably I’m

we’re still good on shape. cash So books. we And million in have $XX the

we’re we’re using So Obviously, equity these shape prices. make acquisition. not in an to great at

would acquisition it cash be in right a So now. debt,

some runs the uncertainty I of weeks, the stock out next back over it’s market over at, the few unless, where course, up [indiscernible] the which, of there. $XX don’t –

that’s think I unlikely. probably

give So we love because us it that I to more did, even would a in would it go EXPO weeks. few ammunition, as

just continue cash a of bit following keep week buy at there’s XXXX it allocation no under, flaw this proven back But, there’s far just point. it to and, our then if our works. capital so And little we’ll stays We’ve from some with every no on, on strategy. it

do. Yeah. we just we’ll doing keep think I what So

Joseph Gomes

couple think question. of Perfect. Yes, the Do this last goal leap I just the know talked that this kind I’m investment – quarters. of company right the year? see of the guess, just of, kind million now. just of this achieve the frogs you about guys kind you into want $XXX goal to can I I status

Eric Langan

in going it before And We very is $XXX I’ve year. it’s the year. think first may each million year. said be by I September The per million difficult but $XXX goal not to hit XX,

of of year the period damn X EBITDA get want. think However, can I amount we pretty over a buying close we

Obviously, did million a acquisition. $XX.X we

think We’re $XX about at million, and between $XX million. or million – $XX.X I

you million. We’d that $XX I know $XX of. another July out we’re in put million, X that, probably if do So

There’s $XXX a couple now. plus of right only months left. we’re million So

mean, to least going but in money that acquisition, $XXX we’d million, We we could. get we could I not probably So probably up. but at find lined close it, wouldn’t an August. have

that have have, we we invest with we a XX $XX bit projects there, out going, than to everything million $XX we’re still We going maybe over probably another little that. to have about more million that these where we know

So up. is it lined

know, and to put following getting November be $XXX my have – don’t so million we know all million the I least year. I probably million at close allocated probably – get another of April allocated $XXX the basically find to we not acquisition, $XXX to then between, sometime We’ve may the can I’m allocating we’d this year, for $XX will million. out guess. go

Joseph Gomes

Is on you how? then, and I guess, me. And updates on working of quarter one really perfect. Okay, for know bug AdmireMe? I the first last the there any guys how mentioned new fixes team, they’re

Eric Langan

is Yes. and running. up It

You can now. actually go the on site

entertainers feature stars new some on featured and have there. We

EXPO. the coming going feature to the have at site are and start that a be, push, week doing that doing some so we bunch hard going launch a that site of to live some entertainers actually week, on We’re – traffic.

We’ll to start out get and to do happens. some going traffic some there marketing. We’re see what it flowing and

traffic goes. call site we’ll interesting, get they see the ramping have it next start they or directing regular, Once how on months posting and more the – we We’ll then whatever. Once optimistic to should the should that site get have site. girls I’m them the on, finally. an with AdmireMe. But them using on we up, and X

I’ve been lie. things. year. won’t And war through there. new for model And, of finally, everything back to had of a difficult, course, a it and team go your not destroyed the very make it but, pre-coded they to worked on we now to and I done. that have it’s and a switch programmers had get programmer, understanding I learn then, team some the and mean, Ukrainian The I’m kind and pretty a pessimistic,

take – company another over. had we throughout would program on, it’s Ukrainian was because lost there, where that but then program worked the And, we programmers one year

that coding fixed whatnot. was be had And and so there some to issues

environment. features And it’s of a how and starting post like I’ve they’re almost on fairly right the starting I whenever on think to from active believe adding to we’re the to done, that girls features, there now, basis the or regularly But a really they all pretty are. to I that environment weekly the that actually program new talked come biweekly along upload is good. couple

a group platforms how basically our what and practice environment. environment, been need in that in environment, us brought going feedback We’ve we it. of need a feature the, as to live platform the to do they’ve the come and entertainers, that programming well. not to do other given we on lot They’ve And, to not the are of are

So we that changes, make sure – they’re properly as then the basically very they test well. It going or fixes they were could to in environment. work able could, seems be through. they And made to beta and working basically

biweekly the on environment, to weekly like in starting the see And a to live we’re said, I basis. changes

excited see goes the about it. it I’m very over We’ll how months. X So next

Mark Moran

you Thank of analysts. to all Josh, so much, and our research

in I’d has now space. Q&A encourage like going to and and and please we’ll open to to your hand, to retweet raise audience the to like everyone queue. everyone you We’re to encourage a up would who question share the the broader also this put

Wealth]. First [Orchard Orchard, we’re floor have think going I to need is you to Hey, up, unmute. The yours.

Unidentified Analyst

Hey, go. a things. of we quick There just couple

what I it think should looks casino the be be. really cash the because I bigger the originally for focus just than thought main flow a next about here year, would talking plans lot

How guys you might now many locations with? for in machines you think different market do X total got coming the You’ve to be casinos market. slot

Eric Langan

is games But about be tables. This estimate will gaming XXX less slots, current XX cable the devices. and includes about than XXX. those of Well,

going mainly, to So it’s be slots.

If now, about look right a City in the Central keep average take you is $XXX the day. at

middle, I somewhere you. $XXX at be in day. you to If something hope a to be look Black Hawk, the honest with it’s about

range a machine days somewhere each range day, to $XXX per the in year. XXX $XXX – So $XXX

You up year weather because XX a lose there. maybe of days

to can a do deal day XXX pretty use the a you math you So of XXX and nice day instead a year, there. you’re going get year

and XX% then, on then margins that. costs all you’ve got your gross your about everything, And of casino revenue. And after typically, you’re running

everything’s that, types we with being that all keep our can are player our budgets in That’s up being of rewards, built. all things, how if set budget. fair So those that’s

So it be pretty. should should,

have And the revenues. club the night sale alcohol revenue, the then you and table and games food

I than we we’re more anticipated. sportsbook. originally little more a well. money machines the a does than bit there think, do casinos getting anticipated we And space bit could lot – But the yeah, that in are include in we little originally as

so. well, a to as sportsbook have going We’re

Unidentified Analyst

receive assuming you’re When approval – as gaming already as you license the people, talking about the soon that sportsbook? then, from people I’m with is

Eric Langan

last issued. Yes, talking We’ve be our absolutely. to deal it until done, with prior a week sportsbook. is issued, being but license have effective won’t that We’ll about skin been license

August and between hoping – we of preliminary I’m approval And September. the of originally, getting end anticipated, hopefully, a sometime the end

process right to short behind. been Colorado what from we the now. have the with They are hoping running staffing Gaming, talking issues are up hiring staffed. of and on They And working here, However, Department speed understand. They

maybe as be But us preliminary, I’d before say maybe preliminary. our it we as, our December November, – about be, Once could XX get could XX have we late days it’ll take get to XXX. days. everything, It

but quickly can now So construction. I it’s openings also to May and time. of that’s AC April how I’m same the why it’s I’m the at saying. It’s That all than kind longer get wanted, do earliest. with to – predicting you the at all the has together coming

us. actually working for out So beneficial it’s

Unidentified Analyst

Okay.

to on the $XXX – you’re machines. in So – guys, town do of The you just they kind slot I’m their Black next to Hawk, going town

Eric Langan

It in machine it tell don’t public you – of keep, ran their you by is, old slot numbers haven’t I available. but you data that’s tell City, of because won’t casino. it’ll give their recently. won’t how tell all their It every to keep, all Central information coin Department just of can the know all that right its those the all by you of I ins, believe are that’s go Colorado now. all I I Gaming’s city. But website,

with same Hawk, Black Creek. Cripple with Same

Colorado Creek, Cribble can actually down as at in you look of, south Springs well. So

how $X So can coin this and billion many of than. math how your cities this a amount in are and, is their then was, on And kind X the XXX, what do of do is you keep basis, you machines and did the get math. by of average kept in. They it this all – what money. we see divide machine They and it get a just you per

Unidentified Analyst

mean, you in When with backwards but pay a between pay though. talking to about and you’re off slot from you Well, million million, just – you’re about you left the top. $XX number, work XX% got do after that your Colorado, the haircut to a numbers $X bills. I XX% are all machine

Eric Langan

much. pretty Yes,

Unidentified Analyst

Okay.

at guys the – in, like per the you something town of it are are is neighborhood about Is looking that open day. $XX XX/X in per – you’re or in casinos So machine

Eric Langan

No.

Unidentified Analyst

not? They’re

Eric Langan

No. That’s why I o’clock. X:XX – by they close think most them we will run of higher

am. Hawk, It’s just Some different Black a close open XX it’s Hawk. most day. hours than And some yes, Black at X:XX close different – is – by Black a midnight, in – it’s everything Hawk

look publicly – some have properties. the their years. one traded for you if operators Casinos, casino, – open got they that owned now, You’ve are Century they’re XX as They’ve been up there these They casino are well, hours.

a So in XX as Central the be I they’re City. Like, the day well. hours might Z casino it’s open Casino only think

– that. I So not about I always or XX on than Less some Street day guess forget are. there. them I Main open because the should Z forget hours the of always Casino I to say on Z half it’s say machines the are a It’s downhill. about

Unidentified Analyst

Okay.

guys XX/X, to it number, so be I’ve open got are look to So up, I going you if to go speak. in that assume

Eric Langan

Yes.

Unidentified Analyst

And that XXX slot the town, come machine, got people some sort with they of in when up do I factor. half to plus the a

Okay.

Eric Langan

Yeah, exactly.

Unidentified Analyst

right. All

want just – about do doing $XXX could So think to the I you why revenue I – doesn’t understand same. modeling $XXX you you’re why Do to understand you’re

Eric Langan

we’re I going that have Well, to going that entertainment other have. it we’re the and and XX of casinos think don’t other part fact that be is open Yeah. food, hours, the the to

they a employees where entertainers and and we days away up have back split bartenders, and going XX our minutes base deal Colorado. We’re waitresses, X draw days type Denver, in, X shift of where can – then younger have, home. as work have a split to I the we They’re a work lot we think in mountains in from

on interesting, Black of we’re have the that an Hawk casinos at service Black to Hawk we’ll think to be will customer – I it an Casinos. of versus most quality able interesting So our offer going draw the be

of of in employed up you If revenue numbers, Black XXXX. went the XX% Hawk COVID their with staff had about XXX% their look pre they that

definitely there’s a there’s a shortage of employees there. So up

we which Bombshells with Bombshells get, with employees, openings, talking to another we’ve we excited prior our these our we’ll casinos we’ll that the open from have in with very you if staffing, can the new employees Denver market. They’re believe So get the XXX, draw talking well. can get to XXX people. been as

draw excited have very we’re to the that there to the up about the do. able younger people been potential So other casinos not

Unidentified Analyst

right. All Okay.

the in going from go Bombshells year, XX we’re next to or So to XX give take.

going going X XX. clubs Not counting so and to You’re XX with have be new to go any you’re forth, from to at going and reopenings make you’re casinos. acquisitions the Right? that you

Eric Langan

Yes. acquisitions. Correct. no make we If

Mark Moran

Sephora]. up, take Next Please to we’re going it [Adi have away.

Unidentified Analyst

Hey, Eric. congrats Hey, Bradley, have on great the two really I questions. quarter, fellas.

the can mentioned IP one brand. you is one The assets most, And first Outsiders. you around, your or accretive is of have The

IP your don’t that roadmap something natural that think stop Why you something is have on bigger and there leveraging wondering, I’m that in about where kind building And brand presence. more up? first. buying of you around And organic own a your Bombshells, might investing answer of

Eric Langan

at us especially to If team. in acquisition I team that do someone us. the trade growth with then we other multiple of it we and at multiple bring If and we Yeah. look buy think would would on that, type, with merge basically at the similar provide a a at we the be ours, restaurant multiple up I to if right versus have that management at. could we depend to it to looked expansion could was mean, obviously, multiple definitely chains now, strong willing the they a rating management willing

expand brand build us as team have we’re build have our While to and – buying, most to the concept, only to numbers our it would But as me. the us make the and well. not run well restaurant we’re help but but and only that to have me the a right to going then it that build on not the to true with important have is division, brand sense and take brand help right that’s bringing

basically together, clubs we’ve repeat, that rinse right. it team, And been it do XX that right we for, then, course, and successful, – then we can with get of put that’s if doing wash, strip we We years.

acquisitions, rest the acquisitions So, the said, math, and right? math I do right people. just, are Anybody the like it’s can is just

up far at the want doing teams. to So buy to to process people we restaurants. the have I build for been anybody team. mean, restaurants. for out together same the situation do the it good have we I’ve don’t to in a putting the And of pretty I build pick then right just clubs, our the

our building We’re team.

building than process acquisition the Just always is process. the slower

Unidentified Analyst

glad up No, that people that was you second my makes brought kind question. I’m because sense. of

automating era the know AI. and ChatGPT you run XXXX, even do basic it’s pretty how members guys decentralized. team workflows know, or other and seeing guys productivity you about I even changes? on You think of But

Eric Langan

areas, these FICA different for and up people, office markets, employment these doing corporate all earning of Bradley Well, different using been credits, credits great I can of you different has enterprise – a of all lower. mean, these tip things. been keeping other zones, costs and job costs our get hiring, technology, office in learning down We’ve to more different credits keep tax picking different

historic actually casinos We’re in zone. as of historic building, a one the on working a

we’re So get to all going credits tax for improvement. historic the

going used been usable. years, in it make a building to We’re that taking XX hasn’t and

on going that, to we’re believe. tax So credits get we

probably I out it kind better build half explain me kind it one point. where think. we’re help of at than of Bradley too. government’s Federal basically us of It’s our at. to going But So it’s this casinos, of what works can

Unidentified Analyst

the congrats probably lot was – on I’d that finally A Well, I’ll like you see meet in-person XXrd, at quarter so Awesome. to celebrate. once to tonight again. guys

Mark Moran

for so question. much Fantastic. Thank that you

for we before submitted Now raise anyone on to a to here on go I’d call you. their hand us encourage to to like question,

comfortable So, that from levels? with Are of downgrades macro to you performance been proven risk audience. debt by structure in its question The in we higher current calculus? allocation Fed a submitted was other have that your rates since the interest to capital increases longer Eric, a change the does has factors, Ratings follower XXXX. addition and

Eric Langan

debt I’ve to said comfortable moment. want under our the we mean, at past, I’m in I levels Xx. Obviously, with keep, the current say,

at X.Xx. We’re

back So that – comes new but I think spend December, ‘XX. in November, will October, stuff our drop VIP number opens down as

drop come back in to in see EBITDA bunch down a probably going and You’re the revenue, new new X.Xx that range. of

us So of that plenty room additional take to debt. on gives

Of we up the EBITDA course, pick that as helps keep acquisition buy level debt in that from well any check. we anything

worried too not I’m about it.

was in my think house and I bought I interest rate X.XX%. XXXX first my

So, X.XX% is not horrendous.

I think still rates below are that.

So from XXXX we’re I house. still not at the my level when bought first

too about So I I’m right now. not it worried

X.XX%. is I think our weighted

were to of right readjust our would get refinance we a into all I one probably a and XXX% thing, debt around If X.X%. now

we think loan X.XX%. a just closed at I

on in think raise debt. or to going of which end mean, million a world take money, growth our that from the nothing get point loan, $XXX stop to amount interest X.X% wouldn’t stop on So a we I to to of be considerable our continuing us the that’s debt, is but

Mark Moran

Eric earnings much, you the all Thank so that, we will be segment and Bradley Q&A asked to Fantastic. of and who concluding call. the With questions.

encourage Store Eric I’d to @RicksCEO. like follow everyone to Rick’s and out to the check shop.ricks.com at

as from a little For his tonight. giveaway the be XX,XXXth well doing to as follower, going store with we’re merchandise

Rick’s able generating and those one is XXrd to you’ll Cabaret For between X:XX located at New of Rick’s Xth RCI’s a joined who of Square. clubs. you Street XX tonight Herald Broadway, little us management top from o’clock in revenue West late, be meet York, Ave at

ask myself, please Shkreli yet, Langan, Eric at or door. RSVPed haven’t you If DKNY Martin the for

and Eric, thank subsidiaries, company good you as behalf the Bradley On night. a and of well as have our

clubs As always, please and our restaurants all. Thank you, a visit time. or have one of phenomenal

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