RCI Hospitality (RICK) 10 May 222022 Q2 Earnings call transcript

Good afternoon, ladies and gentlemen. Greetings, and welcome to RCI Hospitality Holdings Second Quarter Earnings Call.

The first ever earnings call by a publicly-traded company hosted on the Twitter Spaces platform.

You can find today's presentation pinned to the top of this space's page.

Now please turn with me to slide number 2 of our presentation. of Communications and and Head a at Moran, Street Wall Media Mark Business Operations Development Litquidity, I'm firm. I'll call be today. our the host of Hospitality; Eric CEO of I'm President company. and RCI the with CFO Bradley here Chhay Langan, of and

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you already, doing like through @RicksCEO this you search Space easy to click that need to to remind the question pinned will if If Twitter so participate Spaces, device. joining On would Space. ask be you a the Twitter a it's with aren't want you Twitter and on to Tweets. We Twitter mobile

In is this ever formal this being through time, Spaces available call Twitter be session listen-only addition At are presentation. traditional With doing on a this participants question-and-answer to the a differently. in Spaces, making this bit earnings we're follow first all webcasting. the going mode RCI landline to and and call will

with fireside engage. we'll For for participate. and a into opportunity and to the off our Be selected portion move to sure equity re-share Q&A chat to research have this then analysts start all format shareholders

result disclaim a statements obligation as to Actual and from Now our please and disclosed call. It that harbor developments may results we this uncertainties. me turn posted anticipated I after this that is safe of the hear the at beginning call and any risks statement. see it those remind update everybody reminds page involve forward-looking want may presentation X. to with you that or differ of currently you materially in to occur information of

non-GAAP to to also me use. with I turn direct please we you of an explanation that X. measurements Now slide

Street in X this if everyone being adult for area me located to like to the just RSVP at XXX you country meet XXXrd ask clubs the reminder Eric at and tonight also is and listening I have Tootsie's Eric in at top recorded. o'clock in door. a North Cabaret revenue-generating Miami, of club. And South West an is the top join to Florida management or one Tootsie's invite RCI's at me conference the As

pleasure my President RCI Langan, Eric of Hospitality. Now privilege to and and it's my introduce CEO

York and April quarter We to the joining today board. Bombshells continue everyone. Thank perform service Bombshells half. Nearly across and recent second our us includes you well that the are digits High-margin our the and Total outstanding first market were key revenues continuing. in company-owned Nightclubs up New especially trends an acquisitions XX all had for thanks Arlington, of quarter Mark to and revenues year-over-year new for Texas. continued and club double favorable rebound our our in March. in exceeded metrics

our plan. under a are In growth executing we We also contract. well made and second Nightclubs have acquisition one on we

have acquired another real we Bombshells, we For and company-owned other estate locations location two under contract. for

all moving opening. Our first harness our location second first announced their Antonio first planned. open ahead in And franchisee is very drive San new franchisee close club efforts traffic with to in Their to we've to are Alabama. technologies to location plans Huntsville, a as and

We have now quarter. back conditions of take Bradley also here's buy market review the financials continued advantage to to for the shares. to And

to good all listening. those afternoon Thanks and Eric

the year-ago in unless of be All our call this will noted. comparisons to otherwise second quarter

million, stronger. and have We the generated million, $XX.X in then of hit X.X%. which report mind, X. weeks Non-GAAP we operating March I'm was turn EPS record million, million, been totaled quarter of page Nonetheless, million, $XX.X revenues first activities of was $XX.X XX%. was XX.X%. to Since Holdings the revenue Net totaled an by cash to up reduced in affected XX.X% $X.XX. adjusted $XX And was pleased cash lastly Net second XX.X%. it six from million. COVID growing up to quarter. even RCI EPS EBITDA up of $XX.X With second increased close four income increase the to attributed year-over-year. Please Omicron XX.X% XXXX. to to estimate flow XX.X%. anniversary since which up The up strong Hospitality marks sales $X.XX, $X Free that is

year-over-year. Non-GAAP year. million million increase once revenues, XX.X% The up margin operating million operating ago year. significantly Segment totaled to $XX and second last year-over-year. margin Operating a grew XX% quarter were grew million Nightclubs profit up from XX.X% was segment that's $XX.X profit was income totaled up attributed operating year-over-year. $XX.X from year-over-year segment operating from was from $XX.X factors. Revenues year and increase operations XX.X% margin all XX.X% XX.X%, up Revenues Non-GAAP last some quarter XX.X%, again.

for substantial in also high-margin look Newly margin do for of days their XX.X% from that included Segment year-over-year. businesses. rebuild sales accounted forward continued These acquisitions that to including were northern service not clubs same-store progress, they in were they clubs, as opened continue to XX% was that. days, of accounted benefited year-ago acquired that. operating clubs, sales which clubs were not revenues, enough the enough quarter. We our the northern XX% opened same-store Clubs our with as for up VIP recent our about in XX% that about acquisitions which of eight not for and accounted business, qualified any of were

continued strong look to performance also from We our other clubs. forward

up Bombshells XX.X%. which Now was that's totaled had year-over-year. December. year-over-year. million please margin Bombshells XX% XX.X% a second in of Operating Revenues grew $XX.X $X.X to came turn early to compared up Page million quarter. that XX.X% Revenues Arlington, good also opened X. from

Another sales. increase same-store XX% an in came from

in first came at XX%, significantly improved XX.X% and quarter. from operating the margin in Our

two our operating Arlington. months first was affected quarter Now costs, sales than Bombshells of recall, if more by margin you location our for preopening without newest

well. great and progress We of $X.X XX.X% forward at segment quarter. in represents As a that inflation. from of and job doing to that a profit of the XX.X% XX.X% percentage in increase increase operating believe continued revenue, as sold we Please XXXX. are second quarter Cost million impact quarter a to fourth compared of in to Overall, this is XX.X% year second the the and Margin XX.X%, to was to of look revenues to the also strong result, compared a review Page of an operations. Small mix, the segment the wage from This ago. as reflected primarily segment. consolidated and year-over-year sales managing within the were improvement improved turn since percentage the approximately a of level X, units XX.X% our price those quarter, along statement preceding performance best quarter variable we a the to margin goods expenses represented Nightclubs food as sales second some quarter. as higher-margin wages in service of reflected year Xst states Salaries performance. in the which wages -- sales in the sales. mandates, the increase which contributed Bombshells quarter revenues to year-ago in the segment, related minimum in acquired ago employees, increases increased Service addition at revenue. increased in, we SG&A January as and new Nightclubs of Salaries our SG&A reflected of and operate. new with

dollar XX.X% sales a reflects grow a As in lower decline Interest SG&A to salary percentage to XX.X%. by was financing the XX.X%. of related debt was percentage should of rate, average the partially This operating weighted and operating in and revenues related club estate sales amount higher first continued second margin quarter interest quarter. was although slightly the to and acquisitions expense acquired higher revenues, at declined of compared XX.X% Non-GAAP as offset as margin to revenue. Consolidated units compared costs higher. the real

Now flow for please Page XX. quarter. and Cash went adjusted EBITDA of turn already the $XX.X a I March cash and cash record on equivalents XXst. numbers free million, our over to were

time was I'd focus months So this the trend. for -- of Free million, XX.X% $XX.X up the was XX% on first to flow like which six take year-over-year. year to the half cash actually

$XX.X rest of the year, quarter a the year-over-year. As low more number about free EBITDA for to in we was our XX.X% little was with expectations. the of Maintenance the a million half which second cash quarter up normalized percentage expect CapEx half $X XX%, year. million, Adjusted a the return our to in flow line it normalized was -- be for first for revenue, but was

our manageability. from Debt the debt of XX.X% was in percentage it that's a real and to $XXX.X also The XXXX January costs $XX.X primarily of turn increase million reflected with Please increase Page debt loan revenues, expectations. line net estate was an As review December XXst. March our of to loans. XXst, at XX, million

We average weighted continue interest reduce to rate. our

was to compares Our That and second ago X.XX%. five ago. quarter X.XX% year a X.XX%, rate years favorably

bank estate used properties portfolio. financing refinancing financing debt. periodic acquisitions, multiple and borrow into should have lower enables seller currently need can us Our we commercial convert in higher against rate capital. real additional unsecured to in club them, We our We unencumbered rates other

sales smooth and for within flows. cash range costs impacted dramatically next is us is amortization when a million debt with COVID. X% about weren't our range Occupancy five of we've by to revenues. is manageable year enables $X million refinancings out to X% years, schedules our This Our averaged, the which currently very maturity $X our were X% well to

Now debt please chart. XX turn pie March Page our at XX to look to

of has consists which million secured the debt of the Our which Settlement. clubs our total secured This we year of is debt by it of of we which And us less a Unsecured about XX.X% is news. seller been our assets Texas in have XX.X% financing mentioned this $X.X primarily is as last secured to on end cash estate, great than respective by of costing flow of call, our and is assets. real debt. reached applies by debt Comptroller XX% to X.X% is consists debt, other our

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

All Bradley. you, right. Thank

to XX the presentation. please Page turn of Now

to our allocation have to We Spaces, new like investors go I'd on Twitter over are and strategy. so continually this several talking capital

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

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

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

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

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

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

for of total a review initiatives. as last progress million In average For At of Page Please Lounge making $X.X growth to & In our in in clubs same we first our Louisiana segment, end back the quarter. Miami. are bought May, Rick's a we XXXX, club XX,XXX we for turn we the the $XX.XX. of for our March Scarlett's XX opened rebranded in fiscal acquired of as Steakhouse we Scarlett's Cabaret. or Nightclubs in Friday, the building an shares price of good at reopened

We club a open And in – club reformatted we a South reformed acquired quarter expect Florida. San in May this in to another Antonio.

contract adjusted efforts a XXXX. other fiscal These of very We Arlington Bombshells $XX Fort of doing segment, under active is a owners. EBITDA the we have our discussions and with store part to in million In club in our well. add new are are Worth in acquisitions of number club

Florida more second Houston property in we are and Rowlett, in Stafford XXth in the and Texas. we And a for our of to one Texas, look under of two Arizona. suburb locations for Dallas, locations Dallas Austin, in acquired contract purchase continue location to a quarter, During more one Lubbock we suburb a and

to expects its be over with San are serious agreement costs open in we potential five the groups. for to Huntsville franchise talks franchisee franchisee location second in three first Antonio with soon years and first Our Alabama, three in and locations first the our in

reported, previously first end for we acquired of Regarding $X million Scarlett's in the property capital as the cash at this we management, quarter.

an bank access million resources capital the more $XX.X Our for in real allocation second January to implement we estate sold $X.X provided strategy million loan quarter. with parcel us our and in

customers. drive of $X.X estate sale by contract transactions more the are pieces more real for clubs, of end expected Acceptance South have early review XX. a Tootsie's and right under all of traffic like method minute turn two good, than new Page here a in next the taking these flagship our Florida has at to out Miami. year. Scarlett's currently to Please Bitcoin I'd of We for conferences to March, total investment million how In technology the in and starting particular we light attract generation close really and our club in to another payment rolling we particularly take as harnessing fiscal are of began been in place the at clubs. to of crypto-related

Our Steakhouse called April, Lounge announced & is program Tip-N-Strip. new also we Rick's accepting Miami NFT benefits In Bitcoin. in guest

a this hard planned the on is to content and well an parties, to Internet June. This That our will payment club their later it to formal our The and it presentation as Similar reaction can other now big commence for has OnlyFans their good the social with soft a Mark so dedication. ultimate full expect later entertainers to and questions. and testing that benefits. launch been end thanks enables And an to all of party staff let's from the of range they post and VIP by We clubs go in your teams, business beta business. work we sometime line Nightclubs, of our wide particularly receive expect platform media to other admirers open pass Bombshells for annual AdmireMe, quarter. new this at our a all quarter. build corporate for experiences as access be with with sale and the ends private with party

We for will our take Markets. floor Gomes audience. Thank Joe you, We're going question to Instructions] now questions. opened is Eric [Operator of The the and first to have from Noble now be Capital Bradley.

Joe Gomes. Hello. This me? is Can hear you

Loud. Joe. Hey,

Perfect.

fantastic. questions. actually So this taking Twitter Thanks the stuff is working, Great quarter. for

the goal So cost contract. to Florida first in $XX details along they goal? add you follow-ups. far in to club I top-line? my And multiples is EBITDA jump under one one any that provide the paying million expect you about, Can Fort you that get had South wanted a Worth in of how and to the that you So they them what or you the to of of are acquisitions the had adding with would I you're mentioned one. first do couple to one

real will about four the EBITDA, Sure. Well million that we We the the acquisition so about million estimate estate. $X real the plus estate $XX million. South filed million includes see the Friday, you on it at times X-K Florida it add over the of was $XX in acquisition $X just price

location passed -- As far had as -- the Fort Worth owner and location property this available the at it's his family for the family have licenses the closed and is that time sale. his away a club basically this

remodel the value build So location. purchasing basically do real and the of the club the for We'll out. we'll of we're a full estate probably

various waiting diligence probably of up stages several acquisition. with country a around well. size financials including the talking due operators to additional now are $X as also financials -- for multi-club other in one We're reviewing significant on for EBITDA We other around line right million acquisitions rating

that problem definitely fiscal end will million next be add So we -- through all. the your And I without $XX by at I'll too the question. of to XXXX able much take suspect

Hey, Joe.

You again unmute for follow-up. yourself need to speak to the

about that. Sorry,

So was on yesterday the this side of FX Miami. the was in year that big race event events the one for

the clubs that race Just the FX in little of area - them? Tootsie's how that the -Eric impression for and us a how went give maybe Scarlett's helped

Overall so fantastic the first without sales exceeded we To time million last is sure. very $X did well. suitable for Yes, town, million a company idea for Miami week an first week did Tootsie's you give in it's the us. which $X

for which And is location. a great overall the Kentucky Louisville the are our levels Derby have also of lot just super high in at locations performing right Louisville We now.

Great. And sneak could just here. one if more in I

think program bit the just revenue the I a high source So do ongoing those clubs mining a NFTs. and for little more the wanted on generate to an revenue you new for generate Were NFT Ricks the basis? help talk of margin will about of

big NFT it's product money program streams creating including annual our of benefits about bunch or for of basically it's end party. revenue users creating users a our and for The about raising itself for -- creating Sure. is not our -- those a community

think users. said clubs of creating I I revenues increase made of long a will think the But be to by I the NFT over those the a following it like run loyalty generator. don't really is itself revenue

queue. Thanks I’ll Eric. Great, questions. jump taking for back in the

Thanks. right. All

to speaking see will I add speaking for of One thing Joe, Thanks to thing the is you mute weeks One a you Tip-N-Strip utility can will of his birthday I video is go ago. Joe. can please. questions, we of Eric's add the There few to a go. profile

for are Now Anthony to going be Anthony, of are Anthony, going our we're we next Co. up. for Sidoti your…. ready you to question &

about of few My for sort seconds. – that. Sorry, apologies hear you

So bit congrats better little momentum talk a March. kind just go it you was seeing on you're the than quarter. Can said like about you April the into of that

you driving us just that? a talk more little can about momentum about what's So give that details bit

mean, I clubs just that, having are operating they The the all teams cylinders. are very on an – are think exciting fun. time. our very, I We're

revenues total used XX%, energy as spend that percentage spending online. comes will social well our more of our XX% of more I moving as from up traditionally Minnesota heading you a we're bringing back as we in especially on new where think is revenues. guests of saw closer VIP hopefully, time as back the coming see to in lots as media service from be, to the North revenues a And increase we're and and in to

that's one NFT of for conventions XX Bank the from May Stadium US for the to XXth our the convention It'll major in be major the Beacon the a first have of We and Minneapolis. that be Two very on great to Gary path know think going to team. of are clubs I stadium. collector. basically right And for our well business. the They'll

Our lagging will bringing Minneapolis also clubs it's think up I team pretty guests It's help at April, promoting some utility sales NFT in our But there our into this back. and market bring benefits that see strong came the markets of back help hopefully still the so they can NFT. will firsthand be in that but of the kind conference owning of – and time. bring other from

for think the point The last across basically noticed – I smaller that, for in the I'm thing, convention basically, couple our said, just little And the minor I this been board. hoping it's town I a weakness --- So month. bit blue just strong this turnaround be week a will that. of had the of only first of like is clubs collar very but that's week we're college typical

than any we And see seeing so pushing But downturn it. the to every or of of this have if watching type I'm over any the of start to really in. put keep coming do, at I customers that few to recession next into figure we all not quantity the just no type week I'll signs discounting be mean, at point, recession we quality stronger. or out getting worried door we of if I those more weeks customers things type about of kind we to go of have of for any – start to

Got you.

you this there you hypothetically to was would a mean, buy better Okay. do right, prices? Thanks I recession, enable And at more think if for speaking clubs that. then

don't up good in past, certain In change markets. catch soon fast pretty acquisitions not make don't down turn down made or the some guys things when Certainly, we enough. the

that. of we've taken So advantage definitely

and stuff. – of fear a mean, like different has I club owners lot and last calls I XX a from week got think the had of brokers downturn people I

with and starting some fear there So out sure downturn that's I there I think for whatnot. the mean, market especially

So what find the our to We're and looking are absolute We're we at use. we're us be believe everything. capital the acquisitions getting calls. for going going to best put

million. with ended see, $XX the you As we quarter about

I think We end were we counts week, to the Tuesday Miami April, on and suspect on to spent think sitting we're cash probably million million, by $XX payment the by last range. tomorrow, $X at cash week by next last prior will I again. of $XX the closer million in in – I be $XX acquisition million down about

million of these and on want week about amount buyback hold to right tremendous every we're into a as about generating stock now do now, cash cash only week we I right about we're $XXX,XXX hand because acquisitions. our So putting $XX

stock philosophy, So getting $XX. we over of stock start significantly kind we are significantly the right but gets the yields or cheaper, that's higher the the under philosophy much now that if if where change holds may

acquisition. okay. And about to just club you Miami follow-up then the Got

you club? So at wanted look Just look the for did at to better to you with results? the a pre-COVID XXXX or valuation when adjusted as how understanding EBITDA you that valuation revenue up get XXXX Miami came

using and we're What now Sure. XX is XXXX months. trailing right year full

down and whether think we that. about a valuation times is guess what why looking at basically basically versus based we difference way XXXX to X.X of fair on kind we XX that's months our what viable so seeing like up of And really two this plus out the gauge XXXX, I So we're look EBITDA. X.X normally, – XXXX would but worked we one those is – way what trailing and at coming we're isn't times, up market is is kind decided with

Terrific.

question sense the me, And last you've as to at thus Okay. far launch seen from the what us beta Miami? just some from can give you

of that we in have back also us course obviously. out through We've of still We war went the increased pages. some problem bugs put just set and Ukraine. worked Well, the still gotten We're developers Ukraine developers performance biggest speed program, our working are the up with pictures is has items they a changing a enhancement those but is those. few recently that live load with of of Ukranian who had with The Brazil, considerably. a team Ukraine of of from were set backup which in who helping newer some we drastically

the girls we're get and few as get guys content. tokens starting well more on happy spend more more to starting trying I'm site are that. buying So And We're to girls. on add the to money a who very with

that And chicken keep enough of between customers so need two, trying keep to right while delicate We to We balance now to keep girls happy nice a out hopefully we're the then really clubs push to and keyword through the through the and full site fill influence in entertainers this themselves through need their the and as beta the the enough their media clubs happy. launch well. girls mode and it's through customers balance and just buys the egg. at social and

So -- I for quarter. I hard say, another really really a on think right would probably start push before we're that we this XX days toward

Got it.

thank Okay. of Well, you luck. and best

Okay. Thank you.

Wonderful and you Joe for that. Anthony. Thank

But Now this on introduction. up. individual needs to may our RCI. is normally you Adam who we're X.XXX next shareholder is. add not Wyden percentage we're And of going to so some He know no of Adam move going call who to for you

take Let's it away.

Can hear you me? guys

We now. can

and Eric COVID. be as you Yes, But at guys I you know celebrating got I'd Tootsie. sorry. with

But here. I'm don't over think X.XX% quarantining anymore. I'm a So shareholder I actually

buyback XX,XXX the XX%. put us think over I share

So I housekeeping suspect Eric March. filing. been Omicron my to and effect over just CFO in want of couple has January things. has February to and a amending go I talking our about But be

a month that. and commented even record April I you that was think better March was than

June that he May that for as rate, that operating run by of able in Eric EBITDA the imply the you've basically or sustain we leverage Given EBITDA kind on are the if run rate that July, thought productivity million got $XXX kind and maybe starting commenting Bradley would could or step to revenue a in point? here of what and March comment business

morning. Good Adam. Hey,

Hey.

definitely I if in if and quarter revenue was everybody a is of you I we've $XX had million we're on times macroeconomics that But theoretically, almost And in get EBITDA four, in but can XX%. any marginalize beat recession speaking adjusted want don't make given call, the so. commitment the which ratio environment. looking Theoretically you we yes, our is seen there, what to to at March industry proof, revenue that full million our But not then what multiplied recession-resistant, $XX knows and April about right? said the

a as So starting that's helpful point.

And so be about it might your to helpful talk maybe mix.

Bombshells incremental does kind margin, estate I I so night club mean or of mean, your gentlemen's like to what backed it's operating a real including you at into dollar, margins and And you doing. estate clubs XX% kind including again XX% Tootsie's itself. of or real when look each like a Scarlett's are XX% well-run at

If you that XXX% today comp on Tootsie's raised XXX% fees Tootsie's because XXX% on the side, I because and you margin. that's government's your all Scarlett's, incremental are I mean, right? your mean, margin at I possible in like for mean, but is people on own the you in or margins the it XX% as drop mean, food is is drivers real of -- Like that's Your less up. a The clubs New sales so are costs are as own and Bombshells, keep prices on margin. many growth I Scarlett's your drive higher, alcohol you XX%, right? estate. nightclub revenue margin. cover for charges for idea, the booze drive going to you theoretically service in York,

in nightclub right could high. very side the on margins very, the be theory like incremental So like

Yes.

a the ,mean XXXX, hitting I in the right the -- Just I head XX% it looking to particular used the at you're And hitting XXXX, I sometimes Nightclub of XXs, go sales still the I'm year, right. in the in the New look kind But you there. high of service segment in When and at high that like XXs. this definitely then rate first business. it's run service look low states the northern look there's revenue of at when York, quarter second Minneapolis, margin mix, it's be at the our XXXX just revenues I on seeing see right

line. dollars drop got we to includes cover would margin, all revenue levels? now to that So pre-COVID which bottom back All room charge dance the Yes. rentals, service that the

Right.

kind work of for right. you So a minute, just backwards

aren't clearly, lower going So, sales. margins on higher

or So that new $XXX you in million include say if anything And else. EBITDA basically and kind of Florida that into rate. implies you it you club doesn't run the March back a bought

So I assume EBITDA? our $XXX that kind we call mean $XX on of fiscal EBITDA it that of fair path complete we million it assuming million could is at year exit to M&A we're calendar

Derby I hard to two better the are Formula Adam. but is seasonality. like mean, me trends May, on we're for say there's with mean, doing April favorable March. means can't months I say, in that I And than use which trend. One, I path continuing, It's as what Kentucky I've can seen a just and also

like that earlier, macroeconomics with discretionary trendy. mentioned I and stuff recessions As is

QX have the So, see I'd like through summer to to brings. we'd it but QX predict wait what and be able to to

increase would Adam, to XX% flow give we would -- cash a the to one. free the million. do EBITDA margins I'll EBITDA of same increase our quarter had in free were a question our or second. cash easy three Marches, our your me -- answer quarter mean flow. not increase about Marches to and EBITDA would if about we I basically would $XX.X to If

basically be So we Marches in sitting. have that's three a we where row would

April March. Right. better than And was

So in a more, right? just Let We row. a need right got of two now, couple we me…

first of all exactly a affected not COVID. will we very been said, once through get idea time very, why rate what That's we good our run have is, along because I by June May we’ve and

and on me And a great historian, look crisis that mean and in Texas. and looks different analyst is it a kind like which much weren't Let it and of look very talking and that back as what go had about you this pro-cyclical XXXX, didn't Florida a you stock else. a I York guys than was something at a lot looked now business. me had Vegas I was you lot New you guys of then, right? ask Ricks are then Twitter that and and the in and Vegas got XXXX bought Street going hit micro the as was have Wall financial you in You had -- super or

at kind look even well? now level or into look I gives the you clubs and Bombshells to and -- you are of And you business COVID. of COVID, the night in of to so, when mean you or maybe consumer-led if COVID kind do that elements look even are this you the of we can kind how going on at kind during that pretty that confidence your how countercyclical at a some perhaps business of recession little bit a say can confidence guys about economic go speak look resistant during the

Well, like because any there's it we're if are coming, of we recession type looks not seeing lagging slowdown. any it,

negatively some increases fact, be looking. great seen said, excited right rate change to in we in coming early convention. difference the got decisions mean We've I summer. now. week-after-week. mortgage or conventions month-after-month, -- we've us at into don't is as point. don't seem up very I any In see affecting one changing about two points I We've I anything June the May now. been it's said, right think like way doesn't I move the got big this Like we've very, anybody's

comes soon I in think back a that of especially I reality come items. that furniture, demand And high. think the is as supply supply-side of is ticket big inflation some, is the the And with as some oil, cars, especially will the prices down too with driven. lot this

forever. it and really of that majority see the the boats You see don't our available think off I is sit affecting once that now. right? mean supply said, the some And like to We'll I of see that. I eventually, -- right base customer can't it's on come ports I just I got eventually, don't

seemed four three a In well base, have then to week Blue go I Week of fact, the normal three, don't do affecting in see clubs back month. other like very, it where very, week any than they're back; That of four, very said it two comes I to of they slow then, the week bit. a little customer very is really our typical they trend that the big down of again. base. and week one month And week customer Collar

matter a first with of still So we fantastic. first of the seeing week ordinary. or the the single out out was as slowdown. doing there's the Every the were nothing clubs week what even of those that ordinary month -- weren't was And week third any

to trend clubs, little but to trend on we've back normal So downward bit type seen trend a to of not normal. of just those any

high-end the high-end As and continuous continuous we're at clubs. spend just far growth seeing as clubs, the

you and mean you your a for I'll But the had mean you a company following for All sold question previous thing you that maybe later. you log have last Robert been I to Eric. has out this you for of right. This this in a of the been I labor has Ricks. with Watters many But few and come from been I baseball me this and card get going who merged log. of then, vended collection, is then mean clubs Ricks I'm where those for years, back this look, labor into

You've million. to of gone EBITDA $XXX from $X million

You wanted whatever. to buy Lowrie,

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and for would we we million I that would that was we at times so is out The of us all beat flow. -- doing, million did okay of we be Free have kind think flow -- had three know know are cash $XX that we this? thing be lost now. for this, March we the cash that what what stick you're we everybody are can is sure. be revenues in for to about to $X basis, you do going rates I Look had only a revenues. EBITDA. the to me we would And is analysts going that the That because or $X And pushing run the is million $XX reality March you in to numbers going On in million, that take you had rise I the revenue. to go-forward can don't be $XX tell million -- matters. in say

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something question? I thought. train my you what lost I was So else. sorry second your know I'm asked of

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question So second is the the marketing more around schematics.

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Awesome. Appreciate that Eric.

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and bit a something that's Is thing, of business. first little two a bit you you're an a mentioned kind of of franchisees area off on that that more start one. of one-off, forward? one second to little guys your work for about is the kind about more I You launching your wanted guys that you are exciting hear at the that look or the to side in

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property. three pieces of but basically we're can going We in to So typical right -- Basically we the it's our range to do bottom some own in. prefer line. the be go million to our remodels stores to investing up $X

lot to way and is It gets franchisees' now not much But going grow It's a because bank just recognition. me think faster, cash-on-cash quicker. increase brand property leverage that the lot right to us model for looking will been of able is at which there help the and much so a fantastic. at markets far. brand X% I to us we're get risk even that us doing we've to the returns the financing are the X% owning we with less

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I'm a to the and right So to the franchisee working model. price the because collection the other a now. in you works, on We're We've with very two three excited has location. franchisees be third. -- until the we're get specific we're the tied franchise potential that process I they franchising location have think talking to approved we've getting the got way specific The of contract with sign contract about can't that got

the We meet zoning process. the make requirements and part the requirements to of on the due sure that's So want all a they time get there. some build feasibility done to that property, diligence licensing Bombshell

those kind go so are to And of have through. the steps we

I point grows we it years, stores going maybe prepared turns see it really my the opening XX now. as it opening six we depend an to love point I stores goes bring year love and however or year point we're set from on we're six, So doing year. maybe and XX right franchises. is we’re going at we're then XX XX We'll a a some team. where open a on more company additional we're to and be to we'll they to would and few a be grow franchisees up plan separate year six a That's stores get mean, but opening see franchisees, next to open It every to over point out. XX we're so get for could where to the going we're there. and six a and how eight to I'd us

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so $XX times about ago back a at that been about were we've Well, We offered roll into by at going grow to months years be million. million of $XX you're to would to which going for three $XXX the over we're you looked to XX eight and multiple. us million group give us But okay, said, million, this over doing value this. $XXX next

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on are love generate we're going present most at it's restaurant we're we're people a cash free business. business. lot. even the themselves. We're continue end the opportunities tools of to create flow company. the to use not that not as estate to strip get And our love we we club business. that the in. We on in real think can flow that We business to say capital cash value doing the and it I value the attention confused, what monopolize And going in in allocation all and this We business. love We're We're day what the I not in those strategy, free Bombshells the use the the gets. for We're concept.

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is more AdmireMe. one question. about have I It

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has the And on and Ukrainian company But really our -- only the one there. affected our programmers a the it. war that's that affected to about Ukrainian that's anticipated I probably think we're really were forward the taking continue It's that. So little of is push I'm things I very prospects long-term there. originally of because we'll excited longer of based It for because war. than getting think

Fantastic.

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up [ph] will be bring in people let's now Stamford transcript on recorded then the this that's read which stamford_sam Next, when Sam future.

next. you Sam? So let's with have Stamford Are up you us,

Yeah. Hey.

along this in see here material in sometime XXXX. Anyway, there put would I'm I've up saying the believe Qs, chatter past Q. some be they originated recent Ks most of in some so It I get will discussed some K, place Sorry, the past difficulties. Twitter few Spaces we of the few provisions this the that something resolved weakness popped and paraphrasing in lines used that, that it's And believe I here that reading was technical see done I I wording had soon. your about that,

on possibly So, what sort additional that how could on, that revolves you issue? give correcting of is us process the and around color some

Go Go ahead. Yeah. ahead Bradley.

Are talking the about you tax provision material?

Yes.

Yeah.

on, XXXX, item, item discrete a as And you agree we Congress as be say, be couldn't our auditors as a on stance a item a should and not. or took stance it. took whether it that off, the in should at and or deemed it time PPP forgiveness So started counted non-discrete whether IRS,

it that as said, And then, material a had to we it, being material weakness just entry. you provision tax fast forward So our to was weakness, have of adjustment an on opinion. we make another difference because

as these accrual that come estimates up of just non-cash All are entries.

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XX $XX And forma EBITDA. so buy and debt. some the money as you idea from I number of around it'd be recall, this it whatever And was was million you pro the paid

in less you're restaurant one like and of that geography that $X will that you one club doing you'll corporation XXX million to goal buying end like think capital some sales that fact gets guys to $XX available why a thing. $XX and on part you. getting might I think than EBITDA, your one promotion clarify well, that without XX cost back And clarify the is business? XXX that's business trading the sort to this I this with of one different you'll to Xx having becoming think and at in is said, to you EBITDA capital, But aren't a it's a commit you absence mean be That's do a part intelligently. asked it like worth things Because just buy stock. is buy the you're important accordingly, the important on it you're of of – the capital fraction strategy obviously think what and in cheap than should I clubs you like the multiple and in to XXX Difficulty] other selling to I able [Technical people get from to of day, stock a of going of to so being of at Samford cost a and business if I the million acquiring. I things your be mean if have think of lot of you're basis grow to the not

you be effort to this to Bradley you think market strategy. on can where guys speak the that. and trade is assets think on for execute can educate helpful mean your I would these about I it so an I

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on we it. of bit cheaper I So little than thought just got we a upright And the wouldn't any issue stock that.

we player. many getting create assets current much many, This [ph]. I'm mind about. stock years. haven't sell one The employees, to wealth than the So I stock do valuation money. want point. to I've a our trying more don't and it's is I to on the you to thought to We you our RICK is value when use. company for and our able fair this cheap sold was don't our XXXX, to stock for up that this been about. for ran that well, purchase I our maybe it's to assets I've should multiple it. that's me we And capitalization stock, I'm those valuation way our current pick saying, stock the I about were on the fair opportunity deal are we since mean said, able what a can leverage and of really finally we debt. we at create issue asset I wealth XXXX. assets There's the sell can that been that's I is times wealth. said, thought the really form what more is able that issue of capital This some who and at arbitrage the stock up myself, we XXs want I I And would would but need cheapest – in to we or that not other and more between shares. the I in to between sell one cut more a the was some point been to trades business our picking with at thought a stock like market stock, – to lower about stock give Bladeways for many for – sell long-term arbitrage was – the wealth us about were creating two. shareholders being we're need shareholders, being multiple higher this at everybody is to that should

I circles. Street think that our company is very misunderstood in Wall certain

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where at. is the So that's focus

speaker you added follow-up for not speaker Jack as Reins, you on be a up and have the can step request to please any Adam But that. And [ph] back then if this? to if you plate a

been here. team the guys the do and to revenue revenue. comes to accepting get about much revenue granted fees Twitter you that out ATM Somebody already I that realized It's crypto speaker Spaces. some for you like the question transactions? had getting guys do me on those from by speak that one you you really this. and for Bradley And how Eric,. thank will like from you think transaction like themselves, whole coming – Do doing on cool these you clubs companies? revenue ATM guys that the so by or of withdrawal ATM within by affect is clubs, and and

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we ATMs for of own we through most the for right? So getting ATMs a all Is what have our cut we in Bombshells commission that they're processor. ATMs from we example So the commission have processed ATMs we're in get right? and Nightclubs, a in machines, the own you're our of Because is that asking? facility the

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question problem. And Bitcoin. the answer on No your to

people misunderstand. I think

payment. form the the that just processor of the paid we It's Bitcoin Bitcoin mean buys Visa accept dollars. the get When we expect That Mastercard from Express, Bitcoin. we of in exact American like Bitcoin, the take time us doesn't US We at as transaction.

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quarter? question ATMs. last on follow-up year One fees much Thanks. those it. you the did Got realize How revenue guys from ATM or last

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Thanks, Jack.

is Now for picture our call a to going I'm T And up the handle question, Grand be Tiger. that with of Capital. going grand-cub to next Tiger

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sheet of you that but do do your unlock heavy debt do out $XX estate understandable, of? thinking you real of about own own Because about you a Just foresee or leases? seeing cash debt million if is debt. the some Is is then and this guys million estate, real and you here, some can the about $XXX you debt operate balance if And payoff? this load -- of you How you the value? on because

at old one. Yeah, an be you must looking

today filed plus current have we $XX in we Our just cash. million Q,

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now in a us about about is hope that those So you our of estate right debt pay side that on cost the loans. bit, helps equity reduction but $X million a little year real we

are a the I know Because that air own? you know can't you club there That's that near properties some if Do in strip obviously of fantastic. place rights school. you a

or industrial. where selling value air real areas could unlock heavy be to I potentially build off And has know one those can estate. there's rights demand, some of got there by industrial you So in so you zoning

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plus We offer $X and replace even when the of value, appraised going million, or the $XX leased space parties. XXX,XXX us that have can't to over square retail is other year. third indoor this $X they million they XX,XXX that's Tootsie's parking square warehouse But is feet make million in to feet

keep telling there's a of property, tend other have and them go I uses. lot away but like we that. make -- to talk them this So on properties can another we they of We're and zero add lots

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that. Thank of on say would awesome real some the That's you is estate the you LTV color. average XX%? for What

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about down do I on LTV knock short first when LTV we Our bank to period, we but think, loans were the additional back XX.X% did on for paid XX% recent. XX%. year that a principal to We

I'd some the back really the shutdown, right very appraisals stuff appraisals fairly got did bad. I our on we've of loans are So and now bad some we appraisals think the because new. of say our But during COVID so came

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get we of for with build But estate our So wait And going three depends we it when higher enough to to on the capital acquisition inflation EBITDA. make course real we if real and real to going our more we'll appraisals. probably inflation potentially least refinance then buy for some estate more equity it we'll look to need on basically four loans more out up out at could equity have years probably won't to and just those refinance then worthwhile. we estate an pull pull that

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and And restaurants. always, please night. everyone. On you you one and our company clubs of thank all So thank as of subsidiaries, a Eric, visit stay our safe, the or Bradley, behalf have healthy. good Stay