RICK - Earnings call 1 2024 | RCI Hospitality Holdings, Inc.

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Mark Moran

Greetings, and welcome to RCI Hospitality Holdings First Quarter 2024 Earnings Conference Call.

You can find the company's presentation on the RCI website. Go to the Investor Relations section, and you'll find all the necessary links at the top of the page.Please turn with me to Slide 2 of our presentation. I'm Mark Moran, CEO of Equity Animal. I will be the host of our call today. from you to coming New York. I'm President Bradley Chhay, Langan, Slide and with CEO CFO, and X. Hospitality; RCI are to of me Eric in turn Houston.Please

me in it aren't Earnings X, of to Call. Slide Inc. want conference titled harbor as to @RicksCEO This easy doing $RICK you to known on call so, [Operator to go statement. recorded.Please selected If to spaces. Instructions] already formally turn participate I is XQXX and everyone the Twitter, Log-in RCI call X Holdings, with is X. being remind Space safe Hospitality our

occur hear Hospitality. take this differ that involve Langan, materially call of to developments with as may the to update disclaim of risks X. may RICK's currently direct see those am to results also and We financial President a me anticipated. CEO result Actual introduce You forward-looking from explanation I any that Eric, or pleased in and you disclosed measures.Now it statements RCI I obligation away. uncertainties. information to non-GAAP Eric afterwards.Please turn Slide of

Eric Langan

Thank for today. joining you, and Mark, thanks, everyone, us

If turn you'll to please Slide X.

per free very X% flow be other expecting, respectively.Please activities and detail Slide quarter in going for revenues were They cash at compared the line we fundamental side sales business Brad offset declined than same-store X% reflect $XX.X lower later.EPS share will well. sales cash key of of talking with were what same-store decline expecting. due X.X% This and $X.XX. about. remains most everybody X.X%.The non-GAAP more been were Nightclub only is operating to Nightclub acquisitions, million, people up had Net was Margins the year. Bombshells believe that more to which up in totaled takeaways. last on solid. primarily first with club Our macroeconomic turn from what X held They to than uncertainty a was We $X.XX mainly into consolidated business.

quarter, that are to pleased report We progress make to the our initiatives. during quarter toward and we continue after the key

solid AdmireMe revenue margins a in online plan strategic business. relaunch goals.The to an to with have entertainment We and lower return mobile costs, already newest a and development their agreement the partner adult our to is target increase

During Nightclub quarter, sufficient the to cash also buy we we confident Slide to our to development shares we implement plans.Please first to and plans. access to continued review turn resources X remain have back

and XX% value to Sales the fourth Dolls-Chicas to quarter every We quarter since owned the we've from Baby continue have acquisition. were in quarter our improved up add first them.

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We casinos: XXXX. and weeks Steakhouse Cabaret anticipate about on Bombshells Casino has In since continue our Casino. June with new of on the in and developments interior New gaming few license. Central there been Rick to our Rick's been Sports our & City, completion Christmas be Year's, we Colorado construction excited and no Meanwhile, Casino progressing have the schedule,

can We our casino.For devices for install, the await to waiting so systems and in we permit. the then test will configure of license gaming are building and open the we issuance that order Casino, Bombshells

to their we've to casinos been significant as both they XX% adjusted represent recent we've because $XXX, to monetize stronger and XX/X with $XXX service anticipate we City averaged fiscal gross do.Please plan XX. out, were developing to customers. their slots Black we the proceeds that most on turn Colorado's will develop XXXX that and flow day we to recently Central opportunity. Based retaining club continue is does open mainly Hawk In worked a in agreement a nearby per fiscal relationships Slide AdmireMe run they and We cash content help free year, ownership. signed, entertainers

to et highly improving will greater has we with infrastructure obtain necessary that live a we and less capabilities. we credit international did will cost technology a with the This day, to a waitress, cetera, video worldwide The make and of prerecorded.Our traffic, the will contractors strong physical interactive entity receive is collection and overnight, brands, it new technology become and distribution, extension the year. to partner later club media that it want the customer days relaunched XX% connecting continue money, owning interact hours through alone. video be streaming the of own if existing significant live access come This door workers disbursement or both social result at and a a and easy on provide of with revenue We all tens even safety and the largest RCI digital week, streaming. service valued waitresses adult vision name.This X an potential entertainers their platform relationships our way includes create Our publicly-traded days with for XXX is a a entertainers lines, far thousands to in so card and June who to and platform seamless an quarter be a front content. entertainers controls, monetize partner need under XX than our and new domestic they will to can processing, Internet

come the Slide development in on club, the the into Bombshells club.Please up program. our and visit themselves, customers walk promoting subscribe then to you to review and are the platform and getting entertainers to back them them to XX turn sign If

July on ready have getting get location, begin that Houston is is this developments, in fourth are our moves of awaiting the an to location, of for downtown well.We our Huntsville sale it us plan Denver as newest After as building of future Austin still Colorado Rowlett for are all existing or is better Stafford, in to suburb late any and permits. operational the and construction to soon focus opportunities. issue mid-November. this includes business.Now remodel our Bombshells a 'XX second permits.The which list are in partner here's a restaurant franchisee Since quick in into our to major other a we we remodeling help location, team, we of Our details location have the and this Lubbock Construction is and from we location we've June also selling to results. or quarter quarter, decided made hold. our Aurora, site underway, the or opened as receive performance intended improve Bradley location simple continuing should structural is open options the bigger Bombshells' to open turnaround open.As lease our a seen an building go The we considering be and more well that site to plan year, of potentially Both performance. his to changes management we in put to results on seeking on

Bradley Chhay

to says turn hear he can XX hear Please Slide our can't -- guys Fourth me. segment. to me? Eric. review you He quarter Thanks, revenues Nightclub

Non-GAAP was turn in and a On the to to By was segment decline the sales increase a sales than Nightclub in $XX,XXX location food from revenues locations million Hall the XX million effective is operating that Slide San basis, The million of XX.X% Slide other $X.X Food is $X.X non-GAAP rate taxes, same-store by operating income declined were Bombshells to combined newly Okay.Please Stafford, Fourth $X.X due to they million Kitchen. other permanent XX. a $XXX,XXX acquired was X.X%.Please an including different quarter or acquired turn are our I were Cherry year-over-year. year-over-year. credits, our last XX.X%. to $XX revenues million of or revenues. with and please from and income XX.X% was loss from or revenues locations. X.X%. wage was mix FICO $X $XXX,XXX XX.X% and profit and The Heartbreakers, to operating and the The revenues. Bombshells, acquired Meanwhile, tax alcoholic of the $XXX,XXX less. Chicas acquisitions Margins non-GAAP from Locas in differences, and and state primarily the segment. revenues quarter by clubs, declined Bombshells and segment. Baby a mid-November.GAAP X.X% compared tax by was This to review increased a a operating million turn million new from alcohol also type, revenue credit.Now profit $XXX,XXX Dolls of $XX.X X.X%. service year. was tip of XX.X%, for affected food Slide sales. in of our reflected turn higher year The corporate club.GAAP Slide lower newly XX. rate service mix primarily a This $X.X income Bombshells beverages about acquired decline new affected Creek increased growth same-store sales less which note increase The XX.X% Fourth rates different reflected that wanted end opened to Antonio its inflation.Please XX or to review newly

ended the and which free couple In of this GAAP up turn are income.Now key XX the quarter of of to you that will and advance of wanted discuss We present with metrics. cash other to with EBITDA, on operating net We please flow at closest million. cash to and equivalents $XX.X a look cash that, some Slide non-GAAP. which equivalents our slides have adjusted are slide, coming we

to During first million $X.X back we quarter, shares. the used buy

$XX.X First cash or was revenues. of of revenues. quarter flow XX% million $XX.X Adjusted XX% free EBITDA was million or

bit bit, -- that range comfort quarter XX-month in both of but EBITDA trailing that in little to a XX to from just Slide of our review and Our sequential more December X.Xx, adjusted The and At occupancy weighted little costs been developing X.XX%, percentage downs. recent as adjusted service interest on free XX reflect are occupancy also less reflect are declined $X.X note up basis, what be but still debt turn our to X.X%, with cash our Xx.Please than pay number rate Nightclub of line rates EBITDA sequential XX Debt we cost to a adjusted we of we continues in please conversion EBITDA flow due inched was XX%. average paying. of have our zone revenues lower a a from projects. the business.Now to debt a comfort million inched September up metrics. fact Total quarter at scheduled to a in was debt

they As manageable. should continue and decline. generating to begin Debt and remain and EBITDA debt to adjusted EBITDA, maturities and cost revenues reasonable occupancy we open

million turn We estate.Please $XX our process a completing in bank for are of pie unencumbered to cashout the using our also million debt real $XX Slide loan chart. XX of

the our We the The let back of pieces slices largely me pay quarter.Now of different Eric. continue to our percentage turn as debt down to fourth all our of remained the share presentation debt. same

Eric Langan

turn Thanks, Slide XX. Bradley. Please to

mergers yield our XX.X% is our into cash do ultimate XX.X% on acquisitions, sticking allocation know for approaches annual a this at driving go is by XX%. shareholder than XX% By for flow subject To shares X we compelling free since visit capital a XX. least rcihh.com.Please centered and for adjusted All and our increasing per everything turn Before free strategy investors, capital with I the basis. We value about is share of on annual around fiscal our to our have flow the new of rationale back the more more to XX% there revenues, to by XXXX, to for allocation of this cash employ whether when end Slide website at EBITDA, goal to organic that we compound per to please being do rates otherwise: XX.X% Q&A buying strategy. generated growth cash want share you different growth we see free compound strategy, done flow. is new

our We We'll we diluted shares have also done. make resources get in fully and acquisitions.But including The for the straight line. share nothing a up point acquisitions. used expertise tools, reduced is to the more count, job plans, goes key

effort we to have to before.I some, and our the taken flow it a to disappointing have do we a are will up as will current to all team's be open in economic running, little reach get targets. possible.Now our get ask will environment, that as ability our future believe projects but will a have numbers of members here's drag locations past. EBIT with who these disappointing we XX% Thank the adjusted longer to our you work Unfortunately, we their taking the and and and and back have I to downturns open new margins little and our faith I success While dedicated they behind and us, Mark. our for us, and make improve.We and the free XX% team know and are cash dealt longer loyal doors the to you little in numbers all that hard but shareholders will in has our -- us

Mark Moran

if to mute. like from we Anthony into questions moving Sidoti analysts larger RICK's start general & have much, Eric very some before not up, and things we'd of you Bradley. sure its Instructions] off, take you're Anthony, [Operator To Thank Company. shareholders Q&A.First and on of I'm

that can we move works -- Anthony While now to out,

Anthony Lebiedzinski

Can you hear me now?

Mark Moran

hear can Yes, you. can hear we we you,

So, Anthony. we'll on stay

Anthony Lebiedzinski

phone for over have new so apologies that. about Sorry that. a I here,

Eric, you've quote a bit the about in anyway, versus also we've hopefully, release, same-store ticket same-store declines saying about I do the January your worst given average talked you more numbers uncertain I macro that sales seen. So into that the conditions. get hopefully think -- basically was want of the the sales that as sales traffic seen little as to far And

And So just couple wondering if as a questions have you true. think that's well. of still I other

Eric Langan

from the for the Then sales was a numbers, the December starting has Yes, last the I is same-store the was sure. mean had call. decline We got couple obviously January okay. we much not but issues middle of December changed finished decent. weather off weeks, very strongly.

results and mean, the we March an Madness. don't as We've February Bombshells management we're how The and of I numbers make me those those And a there But worst hopefully, in we'll us is those too cost just all good for us. think early into seeing we'll has first issue. week been it have same-store I of structural get week for sales had hopefully, operating breakdowns yet. on and of is soon.I it's to have behind to January still those start changes for because some locations. overall. idea changes an some February move

Madness, big push some other March Madness, doing with changes. launch today We rate for March think Thursday. I started we're for a our March

that evening our fun at to normal basics and hours. range especially much in back get we're and have a sales. it making little few doing, to want things, little restaurant what our a of think the alcohol focus and back got kind [ on So place take started keeping concept, operations and do going be the team I declined again, to the and risky Those we've the bit, more too more to to make sales XX% ].I of the Bombshells is we're to a which get

we're kind now. of that's So right on what focused

Anthony Lebiedzinski

new Bombshells. better as kind And that to Director for your what know as And are recently he What then plans? what you hired shape? get any done has you Can in as far I a assistant doing of share to of far? segment Operations specifics you're of so

Eric Langan

more done get them to replace some managers, us back individual management the stores, focus and left level, We've at other of to in individual stores, allowed rid taking on cost-cutting sure. working general our managers to having He'll Yes, been Arlington underperforming by regional put not which and some them Dallas Dallas. that guy moving the through now be naturally new get have those training in -- location left has attrition on the again in Houston. managers locations, around.The the at which He's in people been service, just promoting, do, some are consider And think would focused operations operations. hang our doing major focusing think shape, the they've of sure restaurant and sales making things people out. what on I I the said that really place formats, that's key.We've biggest are fun decliners, earlier And back music I in like changes said, in I to kind alcohol I DJs. and making customer than they the that made

of just weren't things -- current has been it shoppers Some on have and of as to. just with the we direction in, went visiting we the stores secret that team happy our of some that taking things management found the the kind

we're on have March-April-May And direct months more so we'll changes continue or to also and into make we'll as these well. into we a And we'll stores, that. regionals then there the changes in significant moving see management lot accountability move by as

Anthony Lebiedzinski

far be this any How to gears, you talked you about as financial with the switching from as If far guys? And should a as relaunch you that we would new could a add then this additional color, what great. mean AdmireMe think about strategic as partner. perspective could

Mark Moran

Are Hello? you speaking?

Eric Langan

Yes, sorry. sorry. I'm I'm

some itself back turn my mute on. reason, For

already running partner the new site, their the site. has that. and about for another for up our on Sorry Thanks, Mark.So new basically software

that white label So we're software. basically going to

which in hopefully skins on month cost $XX,XXX waiting a testing in done about to get So for tremendously lowers programmers now, and we We'll our begin are basically April. be this AdmireMe next right up will sometime to running. we're full launch be early the and quarter.It that done spending because trying

is cut $X.X So will which from in expenses million our basically, now. of budget to cut right quarter a expenses, part our it overall from over year million our a about a $X cut in

have of we going and for a video knows to some site -- weren't continue that move so to that.And part this forward be with will cost to that. new at big to AdmireMe launching AdmireMe on we streaming, have get which and time And what didn't on who we'll weren't

I basically, moves the The create the So of entertainers wait staff in light same content it employees are just is interested still our a think means software all do that ahead. years creating to to concept and and have to get content and so.

Mark Moran

bring of Wainwright. up, next Buck H.C. And we'll Scott

Scott Buck

your curious I'm Eric, you get properties But little nervous I'm know licensing. ability at in don't us. you an on do fiscal 'XX? have start to update year-end for I get what to curious the point open by the a

Eric Langan

X need May. May, If to not We have take the by going we're we on between be by approval. months, be from -- to it on days the somewhere somewhere May. get go-live need difficult. so certifications do It's agenda very need for will get to approval all and between and the install X final probably all gaming XX to testing the and XXX to we

end no May. if we September, that -- later really to the we open approval licensing we itself to of the for need want So than in have

them. next week have We updates about The is from update now. with quarterly a

issued applied. that better worry of overall the issuing start getting have as the the of hopefully information process.As bunch really other course, other that to a about where at they start they're have other licenses operators have licenses we unless, I to on me don't we'll all update, So once worried, far -- getting in

all there were City there's licenses If approved now, to was in are I those would think be for of on as no I right applied Central start the getting getting concern. agenda, But right and concerned. ours X now. not

Colorado of of Gaming does I the operations Department way and the the flow their think it's investigations. just normal

Scott Buck

those And what's open? them CapEx I'm get the properties -- on X remaining curious, to the

Eric Langan

we It depends really certain things. on how do

deal. just I right contract all on some in, that the on for far, systems last about $X.X million the we're now. major update are Rick's, signed the million about gotten. in my to $X We HVAC Denver overall believe, a includes changes And construction those which So I've pretty

as their same the time all we're So permits be as roof unit. they the weather they soon because will a put get ducks the and they replacing can at installed in row

and this set should pull of So think, They'll It basically, March be the all the going roof. off units stuff done, will to no time. building.So curbs at going We're existing and would to the for they're units be then that I put the the the considerable. reroof they'll end the than in new later roofing.

have other And and and think or that in running. weeks more should machines X that We everything actual PC so we'll X completed than all be up in final the sometime the June. have building gaming construction

Mark Moran

you have we Scott, if another can't hear question. you

Scott Buck

Yes.

It back that. about Yes. Sorry went on to mute.

and strategic exploration. or So you Bombshells least talked potential on about at sale the a review,

point, You along? internally at do are looking of kind opportunities at guys speed this hired still that Or something? help to of some you outside kind to process

Eric Langan

We working outside an group well. well things as now as right a own on done our as are with few

making can my changes difference we've AdmireMe really -- period exploring whatnot, sale far people. for we listing as haven't because as this say everywhere. getting when as we rates, at hoping the to seen far right partner listing liking. a far with is for did doing quick point So talking of if as time either find lots we're I of going are a the and now or kind our them in gone and done right But that enough we mean with we're like internally as We're everything, looking as we make we

are that's it. with where So at we

Scott Buck

in just timing out the cash kind already acquisitions? you about with on What's quickly. loan? look then thing conversations the like are last potential folks And of And

Eric Langan

cash talk down pushing been we in would payments. with because We're need the have several outside loan significant operators and

loan in been get on because had studies should this next weeks. the March. of would updated, for look properties to -- the be of We on to That's going either close our to working hope So try books. February, on loan. We've to That's environmental about last committee couple we're appraisals they for of so.So current. that week to get the to all weren't cash is a X our and sitting the in close I sometime week just we in first going week or

So both Black for hopefully the operators, was casinos time very It's Hawk well in past or on City as we well and vetting[Audio can in as stay Hawk, Department Gaming that many was the Central whatnot long in up comes XX-some years. very nothing of comes of that nothing that ran as Gap]ran It line of out the committee casinos employees missed as knowledgeable. the Black Central by area. known other in City,

Scott Buck

you casinos? about can but see the where point budget I'm where when complete up will budget talk a -- the for you the you earlier, casinos And be sorry, to do little the do you you your broke believe what

Eric Langan

repeat I'm sorry. you sorry, I'm that? can

Scott Buck

us to give what up. the earlier, idea broke of I it -- will kind mentioned you but was believe you like can casinos? Yes, budget of complete look that an the you

Eric Langan

$XX is budget million. We both The casinos million for deal. purchases including Sure. $X for about Okay. are another $X.X the on about The purchases. spent properties, real overall estate real the probably estate about the million

do money. If pay amount we going like the But we're will also that spend. significant with making that cash are operators. -- installed We more how for the terms after for $XX some savings all are be create depends the have we about but get We So machines. some We'll to are of to XX do a famous pay, very we're months there us. we've But payments going that. it spend do or got don't still on to would time can have to some how to that start to -- share we'd going also machines to outlay can million cash. we're like still looks machines, rev cash have do it

Scott Buck

collar, you've of we kind white I to And -- just think macroeconomic you beyond up? general, been this the the discussing, of customers in have uncertainty? you lastly, do to are still if collar that time take move it's And with area your that holding then or blue regards it then uncertainty period confirm in to see what macroeconomic can how

Eric Langan

that how we stuff go and hear mean, and in in get great the things this have people, that, talking I Well, in to media marketplace. because jobs out It's read funny and you Street on of and -- but rid uncertainty you with into start the are when the you you Main they're going to X well are What my seeing to Am uncertain. Is Even are be?And still as be the be to doing are from still rates is doing people well? very now jobs in months right uncertain. job here their now? the we're I in interest going customer. going that

behavior. the seeing You're is recessionary customer trade down, typically so which

come not seeing We're the as maybe often. seeing down. customer definitely the we're trade So customer

on us slower other we time. what Mondays becoming dynamic the and Wednesdays going like than only certain are do start I call recessionary pricing, which and basically our all days is kind on to you're rather of So days it some seeing discounting do

moving We've these see to going spend to things customer customer's that get that already of forward. right So money. as to I continue place is confidence we're happen back, into to lot and customer got think we're figure now. going a that in bring we're to until out going that ways have And to

Mark Moran

to encourage And we're Next up you we'll spot. going speaker up, hand, to everyone their raise to question I'd like a bring has have to and the who [indiscernible].

Unknown Analyst

on? be X.X dealing are you're AdmireMe long guys into been have that you to partner How the you or going go Let's that this doing. bringing engaging with

Eric Langan

they've registered X working We of of like, purchased we've We agreement they're myself. -- look with and going we've August, kind have expo the been both some better to site's out what them like, Sorry, the and the with that, other. talking how on Vegas domain started signed look about each And I unmute I from weeks probably expectations We've or on believe. ideas to comfortable domain. skinning to going in it's to foundation the ago, And at had a the get sides. laid in developed relationship. going what

with launch. we ready shooting need we It's excited the up that a except we click making end their previous with -- properly from our don't end So or go which of new don't those for seeing all you everything we're actually website. to on sure lot link testing have to testing design a of basically very site content software. some just on the up so for the really that -- And something and they're flows do

to is just to basically hopefully everything everything full May putting then properly. be specific ready start and couple and And then it's entertainers do working at launch. by through sure getting June, launch from plan. basically is clubs those a we'll make the clubs of rolling company-wide going first, So on a We'll

Unknown Analyst

And terms business? been handle in then the this performers business processing the basically like or in of the has doing all You're long of partner that the credit they're to aspect the entertainers? card how this of going for supplying

Eric Langan

mean, still Kind will of. our through yes, be company. I it

be other relationships the AdmireMe and but processing medium video We entertainers about different dorm just didn't and go early said, didn't put at concept than knew -- banks the And talking have we're really right that then.So like we will be the that base we with idea. been the all the been customer it's back software. right business when their it we as see the to So back and was when think to since well started funny I'm same 'XX, dancer and where these big have the we early we with basically they do back streaming, when XXXXs. to of the And to then because I who time kind thing that to throughout doing. in full a it They've the be back in has were with, as software, XXXXs stuff, seems longer up Because with from people, in both And days. able optimistic the of the same had vendors have we're the going right back kind that. funny and going very our I the they together. excited business RICK's working different with industry meet people we stronger to they've are worked much in

very going where about to I'm excited go. that's So

Unknown Analyst

as do independent you're firm. entertainers at offer how within least being many this contractor an going by And an think many? the be to How to you option able

Eric Langan

I we we entertainers mean had contracted XXXX, -- XX,XXX in Well, had over nationwide.

I So be X% get so and X,XXX. would them, we if get If XX%, we'd X,XXX on. mean, can we can have that of

whatnot, that be course, count outside know, don't interested I clubs door some waitresses site. whether any front and or bartenders So in on house doesn't this of or being people then, girls, might staff, And other other well. really that there's or as and

growing of fix their when software. -- into the hundreds we at quickly.We're and think then already and decent in of But stop as The try have tried up beauty ready running on were back and putting time. we I to times pushing people that soon will as pretty AdmireMe. a push problems it to and relatively software people we've we would is hundreds So handle is run any it it the we bugs doing the grow to to it, and hold few and site, start

So the be in pushing plus that's a us big going channel. for to

Unknown Analyst

Are at and any of in are lot want competitors only to the being it forefront clubs one-stop guys a or doing other shop board, something maybe stuff join the just because are competitors is becomes would that is first going to like marketplace really to this on this other this like this where fans seems like this? entertainers markets market? Or clubs about you the not in other be of

Eric Langan

much that any start -- Look, get with other how and other of too know don't to now. much. try there, I do I when costs, cost be I any think looking what to it it haven't don't it's operators are is And going know heard trying us they anything. before, at right to trying I to

look, working. is of and where at. It's a partner of it about got million going market. light we're where we're at this can get the everything. -- thing And first be So of to keep trying I don't not we're And terms going, out think who's another spend like, years got that here, the to give they'll kind XX% to we ahead going $X guy being a -- to deal to We I we're the rate do it. got

trying of there someone the some with contact up.I out as there's tried in wrap market. do the have want I some we to competitors. go start entertainers to like know well as that didn't But So they have our sites else and to these entertainer people, other the tap don't direct the I think

well, through able site be for on residual put entertainers to their them offer them incentives they'll earn and as income programs. so will referral our to We

So and to them we interest get to and which else as is get incredible. is the on up, going what everything our be provide show software Basically, do entertainers they our operator we do new the new to there. is we All well. is do have

Unknown Analyst

last going with does the I Is to XX% to platform. typically XX-XX And know then share one to XX% to and that? question. OnlyFans an the yours entertainers just revenue similar OnlyFans be

Eric Langan

little it It's as of AdmireMe way. and exactly a end we or clubs, XX% set and over referral in part for also up from in our using percentage. the same from as influencers may them have we other other offer time are we big entertainment, whether bring may seen period, our of that may the we clubs fees some and a up more the And the also sites you've same

than will dollars our in the promotions -- at be be XX% It to point, and some less the will standards those little as But we -- a refer marketing make end. we'll just So there beginning. may the basically, then may

Mark Moran

Tindell. Evan have will we up, Next

Evan Tindell

in that of Nightclub of same-store that me of kind performance thing about you sales -- opinion are is way you the The segment think talked similar a happening the the guys kind makes

Bradley Chhay

is Tin, We missed you the Bradley. sorry, it. question? I'm part Can repeat this the first of

Evan Tindell

Sorry.

the was the think part call. thanking you for first taking I me just

clubs. results the guys the other negative guys at clubs kind that sales. macro terms So the And opinion at talked you environment similarly make the that of of have same-store obviously, of are it about we think in the you of are kind

was just you guys in inbound the of pay increasing poor wondering of multiples can have kind terms So guys are little you offers of the the kind lower at might that given a other acquisitions or results I that's if make the recent clubs performance.

Eric Langan

other several I've Yes. club with operators. talked

locations the weekend from similar very between declines clubs and XX% around with the They're In this operator declines people fact, him highs. declines some about basically that going at and I'm all hearing to as their some a XX% lot one with be club of partners XX ours. country. in -- in of are from as a than higher I'm even much certain their his

we talking wants yes, definitely that's their going all. a lot is there it to was so on issue. based targets. we demand there, The to was problem several an numbers. and But out acquisition it more today we're interest And reality as and don't And is there everybody higher biggest exist in XXXX free a be uncertainty. as with have far sell The doesn't of that lot of economic rates of cash more pent-up offers,

and when aren't of a at XXXX, repeatable. multiple we're so can't Xx buying I that XXXX those And numbers in be I know

Evan Tindell

And then one more question.

in And help user threads warning one you just just was financials there or some warnings those and like concerns like the address the years people XX-Ks kind the XX-Qs kind about are or know access I IP about controls. there be the the internal one for first of couple was and of there's of for that that about explain those don't wondering, of are the I was on some So to the time? reading of could about might goodwill over kind impairments Twitter was And systems. a just of about maybe what wondering if

Eric Langan

Yes, sure.

auditors new continually they're change, make you the -- us, to internal whether to we in entire auditing single But typically, And are year. bill material to and or clean be weakness be or like companies year. by by trying when found, health, every our changes problem If you by noticed, our independent has and ourselves, they of continuously auditors is, correct get the whether right. them. order for auditors immediately adjust It's fixed to the third-party have it by some find a

a get off, So was even something if was that you weakness. day it material one

to your the they material and keep say, even have hoping we home ever restatement we a and stop these you all have working a if. to can deal So to come it's and and in as your you have example say ever was the is and your things somebody say. to use if, well, with into if home of necklace keep necklace the will things of that's in that always never none I your used being any necklace, or -- found is they way that.I'm found steal pushing weaknesses security the I a and a break caused fixing up they've just And I weakness. fraud house, all system of keep still do of financials, if, and old anything like always have saying they've It's like vault never what able what if, have to -- turn from with that. stolen, circumvent bank steal they you out all home, to a stuff what your though the of what

you've And new to now this so what-if. got fix

you stuff, was a backups. company is think, as to the it has things that have a certain so the that's the face.And the we happen a notifications don't what who for and We we've the beginning, change but of in mean, in. growing are happened, are happen." system, to come up somebody to software things alive, corrected else. to and and you been adjust resolved is we think if detail now changed or do what where "Oh, every on they it the know always happen taken, always though we've those our little fix I certain that to don't able access. did IT happen the that basically, CEO an to basically our with in But happened it's little has constantly check happened, of monitoring or does basically say has employee Even of very has whatnot.And software whatnot, And day, powers this other of never running and the had I things system we system guy and as decisions have didn't That's know ability was majority hasn't high or is that what or until has ever -- have him. just through at ifs never our happened, could the when make it think you thing I have every could ERP our -- responsible paid one -- happens, so to put And obviously those the company say, keeping in to once could they even we've with and stuff. and And and end people software, somebody anything this like the system all system. can't never IT

working So with, those and on keep the are that. things deal we just we

Mark Moran

Next up, of we Capital. Adam ADW have Wyden

Adam Wyden

are I this still and doing the couple spend other spend, live here. in entertainment, things. was but the I'm willing more Dave bottom of promoting with A to thought that willing press sort maybe people's that commentary but release wrote It consistent that that, and the in seen you encouraging of like & and stuff same-store you've differently, you sales are Buster's, still spend. stuff. to It all you're seems people like Bowl, people think

weakest seasonally this XX% So that's at your EBITDA, least That's good. quarter about is And of I historically. like anyway. guess

sort little mentioned is roughly a But you that Bombshells, quarter. Nightclubs, corporate. from? you talk gives of in about Is couple think baseline where That's million come you of sort a cost sort of cost a questions.You EBITDA. annualized are. to nice of $X it $X you So of of going Can that procedural where bit of million per

Eric Langan

get producing sweep, needed could we been producing where I get and we lot waive, but to it, continue. call for changes, possible down When it. I sit can expense and subsidiaries. how got make the We've to going a XX-some single We're what through cuts, could could going rid we every mean, COVID, there's to assets down. we COVID or closed down doing doing we're go make had we we of, of mean, of. non-income I what to what we Well, non-income sit we're And properties operating as rid

working to of we've basically But results the on still quarter. past lot go a through. since So there's we been internally had from this subsidiaries

to So a the to SG&A AdmireMe. lot Bringing at forward. it's be on change reduction going major with significant be of a making with We're AdmireMe, was it going there for all looking going places.A partner a part cost is of us figuring We're it's XXXX out back do at -- all basically every by club and looking when in can expenses. security, club, it's whether cuts where to we it's whether little whether just COVID had cost employees, make we hit. like the

Adam Wyden

COVID. did you excellent cutting guys during costs Well, job Yes. an

you obviously, make margin So guys that revenues. have guys with shown you can lower

clubs.Secondly, but to $X more relates a from million million or capital repurchase So to lot you as able cash properties. you open, talked the flow share obviously casinos being non-income if would about look, welcomed another allocate to into $XX cost, producing perspective expect it a be of can get you to well do it,

does if sort to people the understanding on sort to just trying improve. got, sales in reopened. waiting I an mean look, is nothing can't of of I or here, mind not don't what that same-store of come give like it from potential remodeled not enumerate being sales straight, Do you're sort trying don't sort all know, of you back. I You've I'm to -- revenue that clubs, so and sort EBITDA obviously think same-store keep are Those contribution? being of, sort of to company you of are X

cost You and of a worse, from numbers you of million in the get don't EBITDA the and baseline reopening, X clubs things EBITDA get revenue today. you gives which are, and of you sort the that think don't sort get another from not what's of million they $X-plus assuming

of is where add multiply reduction you XX you If clubs So it you you XX. of sense you EBITDA can understand cost gives sort sort of ex going? casinos. take a $X to I'm million gets normalized and of it's the XX%, by plus the what then Do X,

Eric Langan

got you. I Yes,

get we And down a hours. closed couldn't that because a is we get one late to liquor the going remodel, So actually Then only remodeled that's and the license. were we've Abilene.

short so did the back the went to late for of then And BYOB that, a to there period get very with we hour. us And once time. basically up work us we the city

we're to So still going sell be able a.m. now we -- X to beverage alcoholic have

rebranded well Lubbock We is have hopefully now it club well. as open March near Dolls should as in we as to open then in rebranded completion March.And It it well. we've Dolls. Baby and the Baby So to will doing so

be have of week around both alcohol of $X gone or So $X to those locations. revenue I'm somewhere rate guessing we margin months between Both X of clubs, use we're clubs those sales locations get $XX,XXX here. XX% BYOB margin clubs. at rate and a of million from to XX% should $XX,XXX somewhere and where the sales so should annualized million a

both have not I clubs to should and will be think those plenty service location quarter have XXXX. so able open revenue the first probably until we VIP third of area, at of will both locations.The

Worth, the a lot But We're in rebuild So is large the there. of it Texas to in We're so doing contribute of and floor. property, a -- location club second bought This revamp it's going a it a very really we're location. Fort building. won't million building where about the bought reopen we XXXX. we $X

location of is $X much so that up, margins tearing will a in but off new building basically roof building, That for between even typical club somewhere I still probably also maybe of margins much the but larger a ratio a will $XXX,XXX to a that be going location think all think be we're parking whatnot.So around our And portion it it So bigger to will the part will location higher. be down million. there, turning $X larger deal, reopened, And of in when the I and at closer that. XX% week the and big contribute and size. much very it $XXX,XXX million

Adam Wyden

a for me minute. humor So

million I That's $XX you million like of and not your a mean million. cost M&A XX%, same-store to say math? $X the of Bombshells, XX% capital improving saying, getting by of a do X, and and around going at the this allocation $XX I'm give but another an the you're EBITDA, your improve. sort sweep, perspective. margin. you X nothing year, If casinos, $X of Then for you open, right. don't $XXX it the without EBITDA saying basis, math you all that's do I including add reductions, Again, I'm do do That's then XX sort following for your like more. you M&A. to casinos, million And a talked And clubs clubs operating including basis. of just on without sort even COVID without sort if like like people of sort looking of normalized and XX baseline on $XXX assuming nothing a do like my is are i.e. looks million not little get number about that $X something million you're sales not million maybe of at I'm it and club of multiply for a sort to just like million get take $X big on

Eric Langan

have sales we your to math. But have yes, out, have same-store bottom do following and I Yes, have same-store I'm [Technical sales think we to Difficulty].

Mark Moran

cutting you're out. Eric,

Adam Wyden

Yes.

You lost said sales same-store then you. have to and have we we

Eric Langan

me hear you Can now?

Mark Moran

Yes.

Eric Langan

Okay.

I return at. We're and same-store where open going $XX Bombshells very order your million X% million direction. right to stores their if we're get to XX% Bombshells, without I to X% XX% are quarter. think new to to bottoming Then opening, back to figure that this new to a probably XX%, fix they think number.Right be margins to need to where got that back I growth anything their you've these not -- now, It's our the obviously you the provided sales up in have you back good $XXX-and-some we to is probably was to margins have mean X but deal. have headed X%, worst

and some do business, should right. I really, seasonality we in it's said, to think that definitely which means huge year. we have to see there -- March.And but think basically start March things I are things weekends spring Madness we happen in March XXXX I have to the March we X And Madness the XXXX like a month. doable, that big year. for turnaround this I that, to fever type should suspect returned go typical be be have seeing us should some really in March this So

January, which So was weaker, January while January -- weekends year, tough had in may had weather year. had seem some in and in where little this I that we -- think, the we a we February, pretty X last previous it weakness year

So we'll have to quarter end than of see get how the optimistic out to much will as But we February. the better very weighs this I'm quarter. be last that

Adam Wyden

was trying did last not trying to last to for do, Eric, Well, then like just this one this is I -- quarter the got what question, bridge audience weakest. what and trying I you're I seasonally do, quarter that to was is

like way, "Hey, the things them EBITDA. And the right, year, a to today", about to are these years. by you things know for whether say, I you credit doing in if all are then were the full So think XX% full get for you of we it's

of a like think I lot things the to basis, in think sort on run rate audience basis. normalized a of about people

does quarter, that not look I until you and exiting the club having end like, things not type the get get up the that's do of the to end right? same-store think then too. bottom then cost the of if saying clubs about about year you saying casinos have cuts even does either, what you all sales I'm get when year. you're of the being the open, million you and going Obviously, everybody so annualized you right? the in sort just -- open, of those think like equal, numbers can all like trying business business clubs I'm like of to the these normalized open, sort $X understands thing.That's big And think I'm cost just look And and what the the

Eric Langan

Yes. declined the same-store a mean, club of But have where sales the had standpoint, part I of couple here I a very mean quarters been same-store have big We've little it's our the bit. our clubs been and at from sales it's a a decline to declines, sales Bombshells. though has has of XX% start the stop. significant those are -- part that when sales you Even sales, much been XX%, smaller looking strong. store

We have changes. have some to major -- made we

we've bottomed at definitely think I Bombshells.

follow asked the you're us, lying off going with promotions lingerie chances, when changes.We and take when a people take to promotions us the make to had big have like Tuesdays do Thursdays. hard risk, it's let's I down, to we're on so kick fact, We've Tuesdays that got really In meeting the some really that started Monday, those Wednesdays. we ready we -- clubs The some clubs Wednesday are for clubs on gotten build numbers which weaker XXXX, did getting in the big -- to up and era. XXXX for XXXX nights, for back other

and to Everything bring I see get up.So guess, why where in Wednesday don't or million weeks. Nothing's I will And all million be can and back changed. beginning $XXX hopefully, few for the here that is Tuesdays do numbers of to that our yes, next to Wednesdays So some and going Tuesdays really in lined stuff up. all, not. $XX at, of we we're EBITDA? we're

drain was EBITDA now, quarter right buck. they generating going it's and March double us drain of for the cost But a start This all in on be opened July that money they're in open they projects money. bang off. basically the as that to and online little contributing, June, now we as costing -- all coming Instead a that a far as are have a on the as are our

been the basis, rate also we get, lose a they've only not run the revenue, income and on the new only we drag So not causing. that new

Adam Wyden

also you have casinos in million. we businesses. mean this those and probably either. 'XX, the margin I mean are -- don't of in I the XX% well you number excess in XX%, those have should do are casinos Well, if open potentially $XXX

significant of both going open, contributor have be mean, a to So that's as you if those well. I

Eric Langan

there's remain very open licenses. I casinos issues by the basically sitting can our Until mean -- a get lot optimistic our we we the whole provided that not the licenses, Yes. state issues gaming of that September, you're ] those will I [ we're here do. state. at can

ready company that be weeks few probably think.For We the think will the going will the in have forth permits city's June. on I completed, construction Casino does close, in go We're come that Bombshells, provided with and we're in, third-party back close Rick's the the building next to reviews. very And that the well. like plan we very as all

but get will we think that probably and hopefully. in August. should maybe closer June, ready be go, I that to casino to And built

they you to and tell licenses where be think visit or will if in at don't just feedback they're They they know So completed. process months, you of come the give to the right. go. just at will you those next they're you they if can on where you, issued be when process don't tell they really need tell real get X they're we going good when in any I don't the types anything, they something, because things, and but the

Adam Wyden

Bombshells mean, your I way where you the but it's sort of financial of things you senior those. with a still changes they're leadership, or sort sorry, and on side, interest the executed? mean, someone like a Twin senior if someone Bombshells. has someone mean, on seen of go Nightclub I on mean about of structuring they've the strip Locos sort that culture up of the on sort other more I a I but And from sorry, the you talked You your -- whatnot, which at I -- get get that hard. senior, create guess some they restaurant at head you there? club mean management side, think have of are of managers don't of you by they've of the margin doing management you some of of the time, the for you in have pool. beyond company, participate side RCI something many that about XX%, management are sort and restaurant sort managed a of the sort they seems long mean, of Nightclubs of down think entrepreneurial sort that a -- you are tip some in in look or eons sort where unique means and the It's still of think of feels the sort similar on or doesn't been sort program bringing knows I sort Ojos sort looks and thought with holding from over of I have or down of a I program your culture.I has sort like businesses has real business what side. I it's unlike sort entrepreneurial mean, worked who like of peers and Ed the Nightclub it means business? so revenue Nightclub have you a the success share obviously Bombshells sort mean and an them. down that of opportunity.It on like or aren't share weakness, It I business profit in Peaks someone good perhaps the where know, that has bringing well your because manage of side, another considered peers don't the and business like sort really I of

management. have you there sort So sell the proper it easier you sort it opportunity it that it through sort out? I you day you in, of feels make mean, that margin do don't might get someone or discuss anything decide there's that? if because really sorted on day a XX% of with to sell is of like you can And want mean maybe to I can that front?

Eric Langan

few mean I started I basically the through of that quarter. all December. end of changes those happy options We testing not are process. we currently changes. the and at our mean were we made process with working a in the We

making seeing results. and started the January additional were rain in when we Bombshells started results freeze of came more We in X as We weeks changes days changes. weather, then flooding. affected Texas have by in, the and made We

of doing January phone management couple we're go of urgency. being that that had part sure and current we we immediate helping I we the the things right changes monitoring are now and to -- sites that Bowl results.I problem made early will the seeing of not So working visiting Sunday. that just calls make we as over that the I team there in October are we sense the that as know you weeks will We to next issues stores out myself do changes the working not? think and need in that hourly understand was is have the are did dailies, December with or through in made Ed Bombshells making and Super that through tell place on sales some in am involved

to going the think sense results. going well And see to the think that concept we to they going I results that. the a get until definitely to make to concept. we wait were this that to more And this this great. And the results going changes direction if next wait they results we're see see we until and of in are going we're get aren't until understand The have is to after or is the got want, see we is or food we're to at No, formula time. going the great correct.I going the week. results -- urgency a week week under we're March May not results

And highest taken lacked that the think the changes in things. service. And and We've ball bar on the service team lacked really the we've And and of where -- margins. couple was DJs. the to quarter I bar in a in lacked to showed asked think course, certain sales focus music sales. are not told this off the a current been has them I think I the on we've the places. customer that make on formats, few We profit in last the of to of the in restaurant strictly and

way like businesses not a clubs turned turnaround, relatively that of then right. were this get changes with this need around I that there tomorrow And many is for. my of business if will will nice was what additional that not be is being monitored being anymore. why are today. they And next Bombshells be got not I'm this putting no the and Those in today, changes easiest used Some now. daily going to now basis.And -- sense and I about in Sense needed get in can't today, be giving the the be but is I'm not start out quickly, time. I'd of fixing I say or the I turned doing there I'm those on tomorrow, urgency week, made I've that's be formula the we exactly -- figured making done and to place. urgency that's and it asked to until around, people right times. them and not buying

Mark Moran

to going We're last call up one question.

Unknown Analyst

can me? Hello, you hear

Mark Moran

can you. hear We

Unknown Analyst

Mark, for Eric. you? Bradley, and does have look Eric, quarter question In But you, years, ideal a like that what for I supporter RICKS time longtime fan RCI. X big of Yes.

Eric Langan

to I to XX% the I want next open. cash years, X In see grow free at our want a rate. flow continue mean I the casinos to

a acquisition a that the we management call, I we out the first I'd like with another, in stroke, we need in did acquisition like take we're chain. we to with think of XXXX like to XX, player And major us did major another the of out within -- our acquisition the bought one the I industry when Birch we BCGH. course, of did see large Jaguars XX buying X single so XX, years, next in clubs what in

I'd to like years. So like -- take well, the the we'll us wouldn't casinos to have in major I next of another the casinos. X from see operations see results the chain that

entertainment/casino what can if Vegas know not take casino we'll to call Las are states, Nevada, regional we maybe what and even regional of whether in state other markets, small but the casinos outside Mississippi, even model states, So small the of itself. Iowa, I Indiana, Vegas other that's in

private in at look our whether to whether Bombshells that.And able out a grow years. equity be then So of the into to kind franchiseable take large from and see we'll I energies going and going where see having take to X That's put us out we're chain like I'd and us to have change is obviously, very that someplace efforts them or else.

Mark Moran

On Thank the question, thank you of Eric, and good behalf and Bradley, night. you and Eric you, our Bradley. company thank for so much and that subsidiaries,

the great to a visit have please hi until or and always, Say one As of our next restaurants. clubs at evening time. door

RCI Hospitality (RICK) 8 Feb 242024 Q1 Earnings call transcript