RCI Hospitality (RICK) 9 Feb 232023 Q1 Earnings call transcript

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

You can find RCI's presentation on the company's website. Click Company and Investor Information under the RCI logo. That will take you to the company and investor information page. Scroll down and you'll find all the necessary links.

to of me presentation. with turn slide our two Please of I'm CEO Animal. Mark Moran, Equity the our host be will I of call today. I'm Eric Langan, managed by Hospitality; York of my City CEO of Brooks. Club Houston, New CFO, RCI Onyx clubs in Chhay, and here of Bradley one is home Josh favorite President in and who with

Please turn me with to slide three.

titled already, need On Rick the in the computer. through and webcasting. select Twitter Twitter to Spaces. Space Twitter question, call If XQ to is Call. participate the with you'll the Hospitality 'XX listen-only, you traditional call To landline RCI to personal space a this aren't Holdings Inc. join listen-only RCI a ask To mobile for it's device. easy doing and on join also go so @RicksCEO Earnings Space on can you making Twitter available a

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to turn want slide me everyone of statement. to four. I safe with our Please harbor remind

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

encourage would to I you, date. the to like Rick's to share direct measurements. Slide also turn with me I X. to Please explanation of retweet non-GAAP this everyone, and

meet Rick's New RCI's clubs. New and tonight to me of to like Eric at top York in invite Cabaret, to City X:XX I'd everyone area one revenue-generating the Finally, listening York, at join management

from at little XXrd and Broadway, located Avenue in Fifth Street is between Square. West a XX, Herald Rick's

will an RSVPed, own deploying my X:XX I allocation be ask me If where p.m. you strategy for after the capital or door at Eric have

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

EPS generally in affected non-GAAP revenue difficult and having and cash maintenance Nightclub repairs quarter. joining EPS in that activities as Thanks This first net occurred segment us everyone, were the GAAP came you, cash today. another for Mark. operating great comparisons. flow by expected from Thank offset Total free performance. with CapEx and Bombshells and

GAAP got important to $X.XX The mission acquisitions. to stock-based that and our and $XX.X off cash. with quarter. year the compensation intangible adjusted big happened EPS with to quarter in in up and higher real revenue and making flow in of is estate three the non-cash, base. EBITDA start most a year also club a terrific EBITDA cash growing was that free continue Probably, thing the included amortization we That and initiative. of a number of ago compared was our after we quarter, is goal XX.X% year-over-year Nonetheless, ended million restaurant a

-- Now, Texas. Colorado. acquisitions in a we Baby and pending numerous five in our Rick's Casino we now clubs have Dolls acquisition of Central and group Chicas Locas have projects and Steakhouse include City, development. Cabaret The Highlights of

in Alabama, lineup we and Bombshells locations Colorado even have of three states In addition, new Texas. stronger an in

back you questions. and be I'll answer to more tell

review Now, financials. here's to Bradley

Eric everybody. Thanks, and good afternoon,

X%. mainly the a XX.X%. up year, at books up $X.XX, GAAP million, to compared million. the EPS first on numbers more of was were revenues activities $XX.X in cash That's ago. X.X% liabilities because $X.XX, down we for less operating our paid off from from $XX up last Net Looking the year quarter X.X%. quarter, the total sum than was EPS major Non-GAAP was

to shares first fell and $XX.X outstanding about in And maintenance $X weighted due up $XX net that the million, was repurchase cash that's operating last flow Free the Adjusted was XX.X%. more year. CapEx year-over-year, EBITDA off XX.X% over cash quarter. from the average because in million, of change declined million X.X% activities

Page XX.X%. which up was service operating million, licenses amortization reflected locations. operating XX.X%. Please GAAP was by This margin leverage and increased to Nightclub increased turn XX.X%. club offset non-GAAP $XX.X higher-margin to in review particular revenues, That increased partially totaled Revenues at from of segment. X, lease higher sales

As operating income a result increased XX.X%.

XXXX we quarter in clubs same-store acquired our on current white fall sales. same-store some second XXXX Illinois Now clubs. acquisitions growth collar million added will the were this fiscal XX sales blue in softness the $XX.X and trends sales. year should New in into reflected and growth from sales. in by offset up strong York, partially our and X.X%. in This quarter, Based In October Florida, clubs result first collar Same-store contribution mainly

turn page million $XX.X which totaled stimulus local government leverage. income Bombshells reflecting review sales. was margin economic to $XX.X combination million in $X.X to and down reduced the experiencing with X the environment to sales and last the million. compared in last returning December XXXX operating of Revenues Operating segment when competition. Arlington, Same-store primarily were million added Please was opened chain $X.X to Operating people was work XX.X%, Bombshells a compared year. little year favorable very me. to

However, our quarter compared up to December pre-COVID, sales first were X.X%. quarter of same-store fiscal XXXX,

reflected approximately and page mix. turn Salaries operations ago quarter noted. increased margin comps compared service otherwise at Cost to sold continued percentage revenues as to in statement our goods a to low me. This were XX.X%. of XX.X%. Please higher the X of the review unless a at and wages with consolidated All of revenue year sales

$XXX,XXX reflected of This $XXX,XXX XX.X%. of was SG&A and non-cash repairs. compensation stock-based Now

we these The associated non-cash as was locations compensation stock-based percentage will their two of ongoing revenues a reopened subside newly have these sales item. build. an Now to SG&A is and quarter, acquired compared a Expenses which as items, if ago with exclude been would XX.X% XX.X%. year

are we repair While have every quarter. in large were this as as they quarter, expenses not typically they

locations. X.X%. clubs amortizations margin debt from This in acquired It from last higher was expense and lease X.X% Operating non-GAAP non-cash from our XX.X% and same versus Bombshells and were reflected course of club the the acquisitions over licenses an as XX.X% increase was constructed at site Depreciation increased This year. year. the Interest units. also assets X.X%. of and newly depreciable reflected included amortization the

Now please quarter XX% of XX%. below was the turn cash $XX.X little targets revenues cash XX% flow EBITDA and with page That's million. XX. a equivalents of and and respectively. was our We of Free adjusted ended cash XX%, to

our primarily location. Please deal, Net in a Lubbock, of at This turn from million the Food to to increase the That's million and an Denver of $X.X page XX acquisition financing Atlanta, Hall loan debt of review debt XXth. used Dickinson, down metrics. $XXX.X increase Bombshells reflected September in Texas, was for Heartbreakers December costs, Texas XXst.

X.XX% rate X.XX% ago. to ago year compares and average this X.XX% five interest continued a weighted years Our at

flow. Our amortization to manageable annual range $XX continues which to be within the very our $X cash is with million million

Page below level December Now as three. please our of our ratio comfort XX, review XX other adjusted metrics. turn some MAX The of debt-related of well debt to of to was X.Xx EBITDA to around

occupancy weren't X.X% continues X% affected Our to to dramatically when by range the average This COVID. were of costs within sales revenues. which be well X%

Please to turn debt XX at pie Page to look chart. our XX December

the and of clubs other finance secured estate by secured applies Our XX.X% real seller debt. by which X% is by respective to secured its by estate, X.X% real assets XX.X% secured at debt the debt of by to, -- unsecured debt now secured is consists

Please turn to Page XX.

capital I'd take Now new allocation we a continue our to to like review so strategy. to talk moment investors, to

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

Our The to those book, Thorndike. similar William outlined strategy the is in by Outsiders

rationale is actions We strategic to three applying with to do strategies different these have whether subject been since there XXXX otherwise. fiscal

like to The first real seller market one clubs clubs M&A, is right value. at solid markets. buy and cash flowing buying Xx Xx the EBITDA to will right use estate specifically in adjusted and acquire at We financing the

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

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

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

big year Now growth let to turn me Eric back over call our three review initiative. the to

turn acquired help Please the finish should Heartbreakers end At We involving Slide remodel In we Bradley. increase to area. currently that in in contribution development clubs. and Galveston acquisitions February the of clubs its XX. October, shift. you, day the We nine forward. plan we projects Thank and reopened in January, have the to

Antonio we reformatted December, location and late Club. a reopened Jaguars the San as in In

be The clubs five of first quarter contributor going but definitive will In we bigger forward. group Locas provided agreements mid-December, we announced a and it expect little Chicas in Texas. a contribution, acquire Baby to Dolls

of are awaiting We licenses. liquor transfer

and XXXX. another And the in to acquiring of we million $XX Worth EBITDA. to in $XX plans, million club year The our contribute PT million occur should half they The club. EBITDA is in once announced we the Fort second remodeling underway December, create In expansion in fiscal one. club show complete reopening in $XX should assets contribute should

from year, domain opening issue in had restaurant XXXX another It of is the state we and intimate Jaguars our fiscal full club second openings benefit three Lubbock, in we construction expected a because and of the year. also us. club the to an made XXXX. will year half XX under Fiscal and acquisitions the acquired is we last paid club-related location money Last close currently with Club of Texas

That in original management the the I'd assets of value means we for of estimate increased Xx October and clubs. like to our operating to our Xx our paid highlight EBITDA. optimization, Based added pre-COVID-adjusted big XX%. on EBITDA we the acquisition compared XX XXXX we their adjusted

Please turn XX. to slide

development. we hall. We Denver have process of nine acquisition area late locations acquired December, In the in the food or

February, increased the contribution be is We installing remodeling of are it in to end currently expected an Bombshells That and and March. completed the by kitchen.

at $X debt. market. one been Greater our we week, permits our for our Bombshells. continuing for cash, area. in is This $XX this million Construction Earlier Roulette Stafford Greater the best-performing location the in Dallas Houston and Building have Antonio location of is San approved bought out the franchisee in million

We construction are currently bids. reviewing

location. In building permit a are awaiting Lubbock, for our we

Our Austin now pending Texas second site in is review. location

a to will it in location estimate well take about We $X open. have Denver with in and LOI work or building it for Bombshells, that an existing less work we very an for million will get Downtown

of is building Huntsville. franchisee permits and indexation Alabama city land his into Huntsville, of awaiting Our the his

Regarding with location Aurora, plans in process our our Denver other are city. the in

announced foot building in Steakhouse only & downtown If In XX. XX,XXX Cabaret we square a Rick's Casino. our City December, Central you'll for million $X.X turn acquiring to for slide

are full this. and license, casino master moving our for steam applied on ahead have We

acquisition XX. fiscal improvements for development in for last million in development year. will be in far I and properties build expenditures million allocation this to we some and Altogether, slide to and are these $XX.X – year, used the repurchased major all first for at of year, approximately about still fiscal last allocating still we compiles capital that the to additional quarter This so estimate the pending. $XX in properties Turning looking this capital date our for have including are we shares slide the

As year I've about goal is average per on years. over said, the our three allocate to $XXX million next

slide to Bombshells. our XXXX, updated Texas revenue of turn the XX XX%, In XX%. quarter on focus. geographic first breakdown Please for including our was an regional Florida

at quarter each York states other higher This New Illinois a of X% little our than for Colorado and XXXX. XX% revenue. the X%, demonstrates geographic and fourth combined diversity. eight

business and Our Florida like areas. Texas, effort. and growth their it and do to to can't all key clusters you. in want without to for dedicated I hard states exposure teams our work loyal develop thank you all of and Colorado, We how say we

Mark. here's Now

out to you give to much while Eric your speaking. retweet share this I everyone encourage Cynthia a profile, Bradley. Eric and much, was shout like And want Space. Thank and Daniels. was special I very enjoying to I'd to very

your If done Space, any are background you to your in question, microphone Twitter a noise. question asking ask please eliminate the hand your you like would mute when to please raise

like back a To free have from of to of questions, number its RICK's and largest start After move question, your to audience speakers may up off, then Space's. we'd things some to you analysts the shareholders. We limited take we Space.

H.C. of Our of of Scott five Grant of Research Research, Cole McGuire Lynn Gomes Anthony and Capital are Joe Tower Markets. Sidoti, Buck Rob analysts Wainwright, Noble Water of

we Buck. Scott, away. First it take up, have Scott

questions. my Hi, guys. Thank taking for you

collar bit Eric, the part and is January the one, clubs, some in about kind the or in itself a trends pockets in the clubs talk you soft of that could February? Still you're First blue little seeing of out? the seeing of worked first

little deal little over sales trending was December, January. think mean -- looking I a I a This a over total over there's everything sorry still I'm I November, January four-month a little weakness. I at going with October October, total November December's and were revenues. Yes. mean

So, I promising think a that's deal.

affect six months. we Typically when us these see for slowdowns, about they

based November I'm in started slowdown on the seeing. think I what

little a be us. be that turnaround and is it hoping big I'm So to think shorter going that will March for I the

we Bowl this Super week. course have Of

out be and this to that's great as we'll help abnormally I the a weekend, Phoenix teams City this as help for going with in to in Kansas well I one-time lot a Bowl, Bombshells with in Super event the Texas So market a two as the especially -- the well by and affected think. the week Eagles It's think viewership. be

question, anticipated a and my pull these repair to? Bradley, future And this should or is costs think higher second addition helpful. about as than That's forward Great. maintenance from quarters in we

million Now, same to in the last $X.X was maintenance wanted CapEx. We clarify year I something. thing. had

our $X we we year year that. last So million as had had And this target.

be. per So X.X quarter CapEx our maintenance what should

flow. free impact an to that's cash Now

that done in anticipate some all stuff of However than higher what is repairs repairs going We don't and winter about maintenance forward. and maintenance expected expense and and were we're repairs plumbing. storm part the Those talking costs.

the additional Appreciate color. Great.

Yeah.

much, Thank you Scott. very

going up, Anthony, it we're Anthony. take Next have to away.

thank for Good taking questions. the afternoon and you

we as So about operating than margins how happened And of the going there there what were as should margins then segment think there? far lower where kind had forward? talk Can just Bombshells, you about projected. we

Yes.

late to that XX% contribute Houston, Houston we The was of anything Texas did as a mean bit at I move little I more year, of -- margins at will October a this in normal hurts weakness a mean the late to The return forward. in extremely some all little think market The and which we surprised think December. I marketplace. got weak. November XX% not

of after Overall was I closed. were first there little previous of were in we've some Bombshells growing after that places think were and -- only bit some the pains in the marketplace, competition less years gone has open a buildings. so through a COVID. of vacant We many We places the to that lot had in open COVID, because

been the new honeymoon those marketplace. in the market, businesses, new. vacant I last buildings they're into And in reopened the their going especially think through and moved restaurants they're have over because come have year Dallas and Houston new And and periods,

rushes so a place for everybody while. to And the new

back kind the But as return going than their around some no of I start honeymoon that think few to we're seeing more longer customers they where float were those to next a periods. over of normal are than months little the places

XXXX up sales like from also X.X% everybody would that remind I to same-store were still pre-COVID our numbers.

some segment. Bombshells Bombshells we still cost because course. on the put Food that Hall overall in is do the -- have So is We Grange restaurant segment the restaurants, it's a in

first the the Friday new last So, Bombshells think kitchen were in, we should revenue. contribute And I and there the by the we're in, the December finished some actual are construction next have doing games starts hope cost remodel are open in Saturday or by of TVs March. to Tuesday, Grange, XX of really didn’t the the that as be days -- that first

contribution they discussed partner of the process our this us lost the just location. the partners sell somebody and the going than February -- as well in the course and franchisee and more trying then for wanted operating to as also investment over quarter took location But decided March as from a have we to them franchising we they go Grange rather have the whole finding from we on -- we'll lot selling and so through their Xst year forward. And operations this

$X seller that a financed We note. million cash five-year $X.X and down with location a million

about $XXX,XXX a averaging year about very a That's that sales location for us a $X a unit. note So, with manageable week. of million

built could for don't the cost. have unit that I we So, even think

pick We're lose in But some a franchising franchisee. at location us. So, it's fantastic the the point future. for ourselves. the It's hopeful on model sad successful. that will upgrade we be guy Huntsville a the same at we Maybe really an who's for up time

locations about you you food good That's specials and to Bombshells, maybe for traffic strategy how then far do blue collar more like And or as are thinking perhaps that? drinks, of the to hear. as are given in Okay. rethinking or your in maybe the choppiness guys promotional both

we We and Year's for fantastic -- we stuff. don't weekend crazy affected was and did decent early preplanned get -- Yes get it pretty absolutely. I modes off to about parties want bit in of pre-Christmas mean December did and a New between have New Christmas a down too we switched us. in Year's We little was -- then because of lot the December. kind Year's have week slowed was a it and New little was been Christmas but party

psychological. adjusting this been out So, go money earn keeps bad. a to money it's are prices it's get now. can are Because and it People call a strange right in saying things a of a -- And say psychological that people this very it's I are go -- higher. plenty little recession things there's to would been easily It's I just jobs. strange make little going -- Everybody and seeing right? to bad, going

a there's And out certain I there. so still think items prices sticker certain and shock little on

three But than month have that March I'm by we in our short January by overall and days. the think total revenues. get -- plans. so only XX like November we I February March I seeing we've don't We're thinking days, out better December was said those adjusted extra

is So, March January. how you summer. week path per I February us and And to we going through the run how think if be on have from we'll in. to will see sales, we'll or see comes But February basis expect I an daily average do up a back I this put on think

luck. of best Thank you much Got and it. very

much Thank you Anthony. very

Collier Tower Next have up Water of Research. Lynne we are going to

provide progress the of other you have much. I terms the casino Eric, in ask any that you to you're do you color Thank can you making? on very wanted

to Overall, going no. partner for Well, We to I that which hopefully We're yes the think next will to us. Super -- in do now. negotiations we layouts. and up Monday process by get exciting national to layouts some floor XD would are week some patterns of team but yet, we've be We're working we're of our architect. color operational with there with scans. that's we'll we're a our Bowl that -- not actually We're the right going be after -- on on try some by next done to for done quite we'll complete get all our starting flow and location -- the

hope three depend have and whether get X have roofing replacements able ready by My suspect our only to and hopefully and X. I completed typically on And June much takes personal end may goal of the that four to that we A the casino turnkey because we'll which by in months. and be sooner. to so lot it is of started will do systems about open approval HVAC or April. we preliminary six repairs it have we by April that's the should can November

guess months. been I about about We've January on X.X in licensing going December

on from will four based you market we've operators other that approval historic heard from get what months casino preliminary hopefully typically you your So between in setup. can your start is the six so and Colorado

turnkey be goes So by we'll if November everything X. right ready

they table think million. else everything that participation machines, or $XX the what systems stuff building land total cost leases you -- that the $X.X will do our of of is million call should is of cost machines the on what lot come our security the machines. and We're call remodel the between we're games type a not going including under we buying most to And in of just

$X build-out figure I $X.X leave for another and gaming start-up. us on bank spend we're about about million going basically devices and So to million

end has you the so great. another can just so but the It in would weather sounds impacted know only Texas? how weather have Dallas last That few all of pretty on in you much. being or days of question. unfavorable. and we're comment been February, I the Thank weeks at couple I has a

closed Yes. for Six closed We for two XX those that a locations third locations day. were had of were days.

Fuqua closed couple for had days. a in location also a It was Houston. hit We South tornado our that of

your the some we there was Texas. While of repairs the -- got that done town part of and electricity no part down on

garbage We that's which. units, metal metal a off seen [indiscernible] get of the top tornado. on I the it It news roof fence and our the damaged. HVAC dumpster was out You've the it of where But it tornado of the beginning or the actually think it it system actually to repaired. was got the on bad We tail AC sure ripped just pretty had blew the the I'm or that like hit. not

now of have worry two part the we're we'll We insurance so it days. later. closed getting fixed. everything for just Back the insurance Right about store about

days then that most think but So some X. and there January there were of was minor stuff in February I two

I been days remember. three might It think at the January. end have I all of

were which numbers by those January as I November better closings our So affected well. stores than XX were said and December

from So little been three those we've a those days I stores. better gotten think and XX XX those stores with off we've

So..

color. in one great have that's question to I Colorado. restaurants many anticipate the in the over you so able about of next being How years? Thank just and Denver you or units build That's do area couple Bombshells final much.

that looking the we have we're locations six about Right We -- area one now have into. locations or site Aurora. in

to center location, close have I be call think a kitchen -- very location building, just The going won't an great And operator so cosmetic. We downtown I was location. -- equipment in is but the to that do It the pretty will it's is we're there. Denver large unbelievable close. left previous location. operation, Everything the a the it's everything a a convention turnkey it current all

be have open week in football negotiation the when in we the could that Denver actually the this our That's that get goal the is home first for next going time get to that to Broncos And can we're one. I that location under in have season their we to game. think -- contract get close. if contract that And and hopefully, we'll done

million very the so one very could and the the of buying We're than on cost on purchase. on purchase. we bank have be bank opened Total $X have less financing inexpensive. and quickly the we'll probably financing build-out that So property

So a us. fast return it well will cash-on-cash as be super for

So about excited that I'm location.

much. That's so great. Thanks

quarter for I’m on Congratulations taking another I and think thanks good again question. now. great for my

it. Appreciate you. Thank

I give much, second $X.X wanted so to San you the that have to Eric million believe million? the was And a clarify for you because Lynne. acquired just something, said might Bombshells I Thank Antonio $XX versus franchise you

in Well, note and cash what $X.X $X is a million million I thought I said.

So the that than could that a was I'm if five-year total like million in purchase which misspoke is I said sorry million, for. promissory it's is $X.X probably -- location $X price cash we million that the on note. I And less $X.X build

Thank so Eric thank Lynne. much, again, you then and you Phenomenal.

Next Granite in position. take a hold up of Rob away. Rob, Research McGuire we have it

around Can give that? baby you any And those perhaps color licenses, an alcohol Nice or going anything update quarter us with on guys. when on dolls close? unusual could

and to X. thought I was February closed by we'd February ready were by prepared really my Yes. close That We plan. X.

have set of outstanding line our need had to going transaction. soon credit down issues. We draw is now to as as they we a it on on up What's through bank close right of the ready couple a

And Beverage an hold Texas Commission administrative transfers. so on the put has the

stuff ours can now is to issues processing issued. other cities, aren't in So the so It's they be And ready Beverage of a of in but can't in. their couple due licenses our Commission. with with all yet ours turn the

say they the on as government. waiting -- We're

waiting by are be the discussions get working. closed February seven color have XX, agencies. sense Surely is, do it state XX. you'll I could hopefully just it their to weeks. we sense think quarter. XX. by X, urgency. here Probably process the but our could They But at time. dealing they close have even this with love attorneys go. speed of sitting have know want of a will based urgency March would That's March can be through get issues resolve be I in us their we'll we and don't I And just a March it to they to see So more on The but problem

close on to We're everything go. is our But transaction. the end ready ready to

bank like -- have line We the to of we're And good have I in money the said, credit the go. setup. they

So ready. teams are our

final me We've so those POS that go -- our all POS we just everything immediately preordered on waiting equipment, approvals. excuse so in -- we're have already can the the we'll side for

March So guess, could or be could could be it March -- it be Xst, it XXst. be it could I March XXth,

So I a think of on deadlines gave me it in sometime these that time time, typical do they to time takes things. couple

And I mean and date seeing XXth one third March something or a XX XX March April or -- remember like I think was March I date something.

So the sometime day close we'll get that in think But are day licenses plan as -- soon done. probably I will try it after. sometime the as approved, in basically to the next or the

six Denver, about, area -- talk to potential you're Bombshell turning just at locations. can looking then, And you. you Thank

you acquire your two four got Do seen with there? we've for you to other continue expand under And Texas. what able the expect less that expand been belt. that trend You've than to continue you've if or to land in locations,

are expensive But more they Texas Unlike, than still time. period pro-longer were there's market. I at of that out properties lot a so. we a Texas, that in opened vacant think look closed space some which I there. pretty mean, for of quickly, restaurant much

out So there. still of call would lot locations walked I a their better what operators

lot a and think stuff land, tied issues. still in there's of and courts I leases So up

So locations. we're right to sorting the trying that through find all

I'm in a now, seven right Obviously, I hurry. so plate on have my not

XXXX. for lined up are We

this lining what acquisitions COVID. because for weren't normally like -- we in like -- the I I is, year, I'm we have think of the we don't these XXXX, things think -- XXXX to like weren't problems grow realize one and XXXX XXXX and XXXX of through people in because only doing sorry, any we have growth would -- up

that bit taken coming a Bombshells, of -- brand for little the we're online growth excitement dulls of as think some back well. so, kind has now here. a And But I has and the new having the pause that not

forward. some So that on have as move could we effect us,

we with out energize And -- end as some to again. this up our the great we I as start start of Bombshells And year. new we're management see think teams I mobility things opening locations to we But going we the think get of again. brand upward

our And our million-plus like XX-plus EBITDA for another I that to think will be three again, as part shutdown brand, very, ever kind we years to division. very next to or get $XX brand of don't that get us out of COVID that well us of over have and units the anything plan restaurant

getting So I problem don't any have there. think we'll

-- Nightclubs. then staying that. I And the shifting in Denver to appreciate shifting but

talked talk operations Acquisition continue the the, on to that? the about Nightclub And just backdrop for about You them lock you us but improvement here? you improve in potential can substantial made, to give XX from

Sure.

in is New with to Denver. the that convert has the location the there a markets name April. know from all and waiting out and remodel for which we plan there. Cabaret We've long country will very, we signed operates, permits for are to starting outside been well think into people that York been and and permits for time. come travel RCI I very in business and that the But will converted location Rick's the that, So other by have that Chicago, brand Rick's approvals major of where do the hopefully the convention there on other Miami

Well, that’s congratulations and much the quarter. so Thank it on for you me.

Thank Yes. you, Rob.

$X The Antonio Thanks. million out wanted million there. point. Bombshells $X.X five-year two-year note, know all that Just I down, clarifying balloon put to and Eric said one San just X%? location. franchise but Brad Hey.

check Rob's not so you’re question. Thanks, the recent balloon to everyone Bradley to so And the hovering that industry. want of much, good much encourage entertainment also thank recently to over. you and misconceptions adult Rob, was video these on out for I referring thing five

move we called our would to open be Gomes like Q&A to Joe ask people encourage I able research final session. their before to Joe, going bring Now hand raise analyst questions. in take as away. to equity questions. We're to up into to to our be ask out, it

quarter. the on Congrats Thanks.

it detail as Just to of a back And Eric Bombshells dead here, know wanted to know is on so. your pre-COVID, or color beating the more How the here. speak? that the better Bombshells same-store sales we're I you attract operator kind somewhat additional give to maybe negative us though is of to last I to performing efforts how quarters basis and Antonio four second. been a franchisees? for don't San left little horse a than can even impacting kind has But so go

than I at and the lot gas I things. other – changed your psychological of sure. recession, your maybe squeezed for it up a franchise by very investment. XX% – now the maybe XX especially the I are Yes – And them of mean getting right it's current top calls $X foods we're for where call people million-plus probably population for economy those nothing's really a the bottom getting guess because not a people psychological with

go did unemployment week. time jobs a even of for work tech off there's are the – in last within claims – read But tech laid people to laid Unemployment payments thousands plenty the and you most especially recession went of back in On were people layoffs, if reports of the off down. up. with in hundreds one the reports, as were

jobs. of plenty there's So

of I adjust so get worse And business changing too. therefore those habits. things I are our changing say expecting mean when are we psychological, have what to And they people and habits so are model to

we're job doing of fantastic I think a that.

look, a hard up the saw and spaces time to we all going were we've were those we as that expected We and for comps. very the knew Bombshells being we at effective to get these new going period were As these construction being as locations. going of – that restaurants all knew we far be leased

back I model. our excuse XX% things need margins think XX% me. it's – going take get to their doing do the to adjusting Bombshells time. And We're just to to we to We're

We like earnings XXs. have that. saw share to the $X.XX our And the like from per just work in had we time through when it everything – dropped XXXX, XXXX, that when anything – we first experienced was the back –

took that we've little I think And us And our models we models so, longer. adjust to a this adjusted time, very quickly. had our

case systems why -- we're a recession for to basis and whatever in information that that's slowdown, place because Bradley this regional I to certain do Instead -- the say recession of or we been the or you this want clubs. spend down money not and slows in affected it's it and keep period of they us, save the decide of end, has whether know in to globally, the consumer the as trying point the to other has their past where have able put club-by-club on clubs

country, able we And and target XXXX, in clubs positive. see And switching did like still locations we specific our model all were across make XXXX, the you'll of so to at adjustments. those the of instead are the clubs

positive. market in and our the The of a are Texas. majority geographically Our as not the are. as It's Bombshells is diversified all Houston, it's are Houston Texas-based, locations still where clubs mainly clubs little comping different

so, affected. sports sports affected like we by We're said, bar. because I we're And a were

first-round Bombshells games are bit. effected when of won, been shouldn't a market So they winning them in are that of after, the Texans are and kind three one because those the year lost little the have things a

XX we're Mark a Suite Texas That's move April. we Madness, event us be at of have to March, As for the going Stadium. into huge NRG to Xst this in Houston going year

get same-store still we're a back margins are to XXXX to little remind So very like everybody against for sales overall I that going bunch where new while some we're just a off from now of going revenues the comps. we line. opening in because businesses at locations like basis adjustments comping I Bombshells those forward, think easier now, said, honeymooning, had period strong X.X% comps up our are And against segment, looking a other But making I a our in on right we're pre-COVID.

strong when is as costs some very brand it of but liquor line. as as like it only overall, difficult. maybe is was It's So the strong in today very the overall. in still still in the one solid you're not just get said I as town, selling to XXXX, got We've

have has labor that daily, is price loosening. change Your costs creep, your had beef your prices change chicken daily,

cost, can come having chicken they with in whatnot -- all has some our shortages way end like chicken think down at I egg point. but it up up may shortages and these back go

keep got and our the and line direction. got we've right things prices watch to things. keep them in those to to in adjust We working So,

One here. me for more Eric. Thanks,

an didn't just anything was today? Thanks. all program me. You maybe talk admire at update on about I us stands give where today that wondering,

Sure.

bug and as a just Ukraine-based came So we with been developers. was the we stick and the in group have our It X, our tried as replace was of knows. unable a that war getting code, to Ukraine will a all new our in suspect to together. The about January They January on code standards -- We they again. took viable what in a works get of the They're product. correctly lot hope. X. a about they're bug everything basically that us now call fixes fix the the That's to everyone company. very and time that And tough wanted. they've developer six making I weeks months fixes, get meet perform learn decision. three is time, company lines the would we

else, money and pay something properly, were they spending that trying just weren't them problem – think, break all while to the just the with fix fix working we something and that things because get we I to they we The well have the far they coherent some They're major group improvements are work very fixed. in all things team. very seen team. as a a We've working coherent is didn't that as together. the weren't site new bugs

quarterly have about that I months, front. we're company for on number in Meta. a low technology billions much better at dollars problem not that with but We're inexpensive But relatively – more keeping suspect three we'll cost on – of our would next transaction.. call relatively like have we'll the some guess, that's news I least I maybe

insight the Great. quarter. Thanks for on again the Eric. Congrats

you. Thank

few office. just much by the so walked the interrupted Thank got for a actually who you individuals questions Joe. into We

We Portnoy for you like look Thanks large of you Tyler, coming Moore do and to Dave Tyler you you guys. Barstool question got want a do Sports. anything? have – ask

what Congratulations are about I plans Colorado. I the that a spending you on a know to in little about quarter, the quite space. expansion guys seems It bit Eric. little gaming to like bit a just quarter do. out you're to want what about more bit talk Yeah, the get Great are I there. into want doing

we're Thanks out an creating The right doing there zone. Sure. for the main is question. thing now entertainment

Sports fun familiar know I you're There's Ameristar If one there no would night great Barstool property clubs. and places, Gaming than no but favorites, there's my the no entertainment. of say have Penn out I other casinos. There's

the hit tables to there. spot. gamble a all want great to you You hit the That's if out you want

the try But up outdoors as This They I I when mean, great. work casinos Then big new. had looking the to market go like is to passed, and a bet. started go almost nightlife that Why has nothing started they minute. wait would for $X And it's because there younger something to Colorado we people, and was of want and for nobody one since on. XXXXs been as well, had this you said, things If bet. study well, I I so I years? $XXX far do to for and come XX this able a first

XX, Hawk billion was Black The money keep In It's was amount area. trailing X%. June of machine $X in into The through XXXX months Now City went the Central limit. there's no XX slot huge. huge. average

how well, we be come same And to we I are ourselves? don't okay said to get differentiate so the thing. going just

And so we let's saw build a club.

and Rick's a let Cabaret up nightlife build Let's you have here, entertainment.

music turn up and let's Let's the here, the now they right up, come XX-year-olds up draw rarely because here.

to to going me this because the that Black talking that's "Hey, to XX were our we age go As to all group clubs, in no was I all want do. there's wait with bar said especially reason people go to entertainers Hawk to to go to I clubs, or There's nothing staff I crowd to Central the all City, tonight, why? you the want XX-year-old all the tenders,

area. Main they XX:XX, – it's closed do take Central, the residential so can the some let's festivals, got what the City And do Street what so do the create in music control want let's a have is street of on we already do meantime, we festivals, some, the street nightlife, to do in if we but all stuff. And say and

built can buildings. there. down of goes unbelievable XX:XX. nightclubs we call I up stuff the all some into do up everybody We business couple a the So, the and music turn or We think

so Phenomenal. Thank you that question. much for

ahead. Instructions] you think go Adam Adam Now Adam, bring up. next Wyden you mute. up [Operator Adam? on let's And I before are

you Can hear me?

Yeah.

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Yeah.

All Perfect. right.

disclosure lot have presentation -- of this the in had guys You you good that past. a didn't

through just some I sort then want and to talk picture. go So logistical bigger of questions

on about and development lot and of XX, you lot clubs that the be whole and I on remodels you So grading you will -- repair be or you a to as CapEx about lot had the going lot acquisition of stuff as a and the suspect know mean is and of but maintenance, of when clubs and that development. Slide sort restaurants down, club acquisition talked shut a had running roll have haul, you in in Bradley maintenance club you're you XX through Slide running your a that And the you're a -- P&L center Bombshells beer doing were to a thing profit to reformat, that I cost XXXX. a center business,

the that periods? of all million call sort associated around start casino Baby reversed legal it have future will terms try have in sort much -- sort and how onetime but onetime, be sort give onetime revenue that in cost stuff growth with or transaction we of of our more sort of work And $X whatever on arms sort front. you're of investment is sort doing a preopening Is million sort and of to inflation of sort much or then recurring of $X that us of hit, of not EBITDA, will a and sort that you I -- in that, on can coming CapEx don't the periods. sense the but you mean place of in top manifest of and good of I of Dolls do -- of you how sort or of just itself sort sort

Yeah.

than every real these one now location, real it Other that San own. make franchisee the simple, estate involve Antonio we properties of okay? So

of And time. real estate purchased ahead that so we

things. most for costs. costs those Like Those So of there's survey are costs, expensed you the carrying said there's not Those part. are capitalized. types legal

there's yes, so And cost.

carrying interest are You also now things So expense, carrying these have interest. right?

we're to properties, lot it starts becomes not expense. up a many add having when it at you and this a number. so of larger But -- it's And look

the we're And I what able not Heartbreakers, maybe going we the end they of second you're into or fourth but the done certainly of hopefully should over of you're will half or Jaguar, the I of going done. I think definitely XXXX, move units quarter see be -- in to see, as XXXX early Antonio XXXX, to acquisition San to open if with get not we're by be this -- I closed March this all XX. mean by then, work these

to each the they like out Texas of just with have waiting of a seller side and said we're is couple issues I done. on other. We Our the -- state work

club those are they is but cash out sub. right a that's to as now, Jaguars soon as open double going are it’s open in in soon source. -- construction The as reverse Lubbock those which taking locations the and All under as PT

of those and got see year, $X.XX we between start right. to a So million unit the to $X.XX big swings, million sudden $X now $X going you here, units say are sudden all let's making million spending or and million you're each

the EBITDA. in So if million you're $X swing $X.XX losing or make $X.XX million you million

those things, And so come we to are solution. going to see

I food with of up, in day Denver shift to well March February us to the really definitely have a pick open and the grand unbelievable mark. into think to lead you're set hall know as end will the the Heartbreakers opening in couple really I with of up locations an is the see the new march the construction. going

I The construction last and lights is were was doing I they complete. room XX% VIP upstairs when about know there. sound week down

that's should all site done quick. pretty That being done. be So

food in. hall All Denver TVs Monday. I was the the new just on are at

to up. bunch what it have the Business very before. compared XXX-inch is of up. televisions there all place, it was are is around excited. A We Everyone unbelievable screen looks a XX-inch

needs it's sales this about to -- largest single were were because up that's year; of booth January still we think out, that the sales moved the it be lost where into. is I -- January And where over year But sales XX%. their XX% moving over yet. not last Bombshells January

And that to March, big going so, in that's reopens location when that. for be

coming lot a have you of So in. income

for location construction. right XXXX. is Stafford ahead They're a now little targeted on

So we runs which over. nicely hopefully changed two get will that maybe one little or usually construction a small and be early, month cell a

get done early. So I'll be excited if they

the us the the high, finally the We not roulette. and roads in, like on were developer, to put doing were developer bunch had that. everything stuff made they They out bids a close the worked because had work that extremely very We're plans. of them put our on our city us with because --

part of everybody so, build that. had And that's those, thought we to developer’s the but

got out. So finally we worked that

start So should that soon. construction

The construction We're started. club has waiting has construction permits. Fort The the in started. club Lubbock, in Worth,

construction only the starting Huntsville So probably and from Lubbock is a a months few is construction. from few months starting

the a lot that's lot these on of main -- We paid out paid of a there's all we cost. spent our stuff paid So this is, things, the this building We going thing of but for permits. lot We -- a to is for right? the stuff in be going we've architects.

move we as better much get forward. will that So

Okay. Perfect.

includes of that qualitative Baby know put more Dolls this and to this XXXX you're added casino. Heartbreaker slide and allocation Moving that. I to two Buyback more year going million and fiscal and got -- I've On got more kind I the XX then one. money of a you And capital in $XX and and

$XXX But doing committed year. you of sort million a to

on that yes, $XX so do of another at closed, year Lowrie. invest sort that another you you've said think even fill or big, Baby of invested to of that acquisition, can or Dolls already you size you can another mean, be XXX? to Cheetahs of sort large I least or out that sort get think, if top you or another mean get deal mediums I do a this I few still announced obviously, big still couple two Now, -- of million? -- mean, what you could another another you you I be $XX million could far. think

right? units million, definitely we right? want to $XXX about about I $XXX million, several invested closed at Cheetah last year. happen. several think, closed Or year about still Thinking club We're the with million, you the We've with in We August get million we smaller $XX We're could Club million. And, this get We talking $XX in and $XX $XX Playmates. got so yes, May. put million, another operators. about

up We're months barely So, I of got time. and nine we plenty mean, million a-third yes, year is into four $XXX the -- it's right? literally we've days over and of investment far. year, lined so over the So

that the months, that and up don't in take next a long another so guess, plan to I I So vacation but million we miss, can't -- I doing $XX think could eight line on

through a that stock person, with is the turn isn't helpful I'm it's people question earning this was the then, older, in sort went and internally firm said weren't and at bank these of getting sometimes going Eric, about I of but just and are non-stock like my to old -- they all in the Yes. a helpful. got they that pandemic. of sort isn't have guys but to order, analyst, And out money having days, talking global it and you an someone well works they any and

the actually giving seller finance, making. you see I 'XXs. them of point we're that X% cost sort and is you're this in mean, the a their Now capital there's to

of and there's see sort think seen you up, sort and sort cost you in interest to of mortgage. smaller guys club. rates my get COVID just this want to going could of their through pay bring do interest out, going X% the higher and when You say the mean, go a squeezed from periods to guys me a through money consolidation. I rates on I me money another downturn. Eric, give cash, going is to some look, of actually these X% He's go don't stock,

as I in down to mean, some rates to and of an this bring sell? where use saying a people I'm I'm opportunity mean, coming to you guys interest you has capital go think ready you look, that sort environment actually sort don't could like sell, itself this finally going to of I that say, cost lends to this older do environment think in because theory. consolidation and might back

we're has in kind calls, those players, which Denver us. been you major know I COVID been mean, getting interested of we've I think from got getting those acquisition, as selling fantastic -- was calls. for pretty some the

number that growth. XX I going still months, to XX their think And mean is months, think there's today, better. increases be see think I over to still room. increase numbers. from we'll have trailing in We're even that trailing going XX% more I XXXX I

move So I as of we opportunity think forward, certainly us. there plenty there's out for

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you to take, for of give to pay the be what happy you cash willing finance want your want to you sure if flow, to I'm the I'll if portion and paper, carry free that. take Now

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Thanks Adam. Appreciate it.

that plural. for you one actually more much Thank Phenomenal than question, so question Adam.

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thanks for throw out to Travis that say that there too. to want I So,

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in don't question. of and let's same similar to terms question then vein, going about Robust that the into you This vision, is second actually individual energy that me Eric, Also first plans answer submitted to is ask it know for of Robust one in move those we'll who drink. the a curious was to the Now that anonymously. I'm brewery. was And the

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answer. Fantastic, phenomenal

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and Fantastic. question great Eric. answer, Great

I on last the ask ended what Now forward? I'm what the talking going to earnings about to wanted And vision you Empire is now that? for last moving call of it the with today. your is question Eric, And your update vision Building. ask

pretty I we've on how we're on well XX and laid out Slide XX what doing doing think we been and that it.

So at have looked you that.

that we what to cash continue basically to grade we we used think do investments I make math expected an have on do. as cash we to have And that is make return. these sure that fifth

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these AutoZone roll-ups. So Carnation all and and they to Management comparisons start doing Waste and

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multiple I you're than targets do When you really so have of does individuals to operators targets about XXX amount time. XXX it multiple have and of those players, probably XXX of take deals with, a so less there's multi-club talking that considerable

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we're I takes think to We're going buy going continue -- just it year. see every -- an to to that. It's time.

be Some some single-clubs will multi-clubs.

times $XXX EBITDA. But here up million million million I'm in $XXX be would additional times a three-year our next $XXX very the to four -- to this and confident roll EBITDA $XXX plan grow EBITDA level four really in at to from million in at

So think for moon. the so a shooting I on --

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get only And into the I stratosphere.

million. I target. get That's a growth over exceeding still So to only period, $XXX significantly our to $XXX XX% XX% three-year million or

And our to will it the so And do again, be. I'm I shareholders it I long say as very excited, as going say can every it Twitter happy. on I say that, call, all hopefully very I'll time. be And

guys or to do, that for three momentum what after. long-term years. looking investors. guys. They're with next not We're us quarter for care We're everyone. for for not looking for We're not going looking we the be We're quarter

Let all let's us And together. plan. execute wealthy our get

together. with all that, Bradley. Eric Amazing. And wealthy Thank you, get let's and

revenue-generating Cabaret, York For at us clubs. who can you tonight late, those of one X:XX New meet management RCI's joined top at Rick's

a at West XX Square. Harold Street, at little XXrd located Broadway, is in and from Fifth between Rick's

an implementing If door, for busy I be ask RSVPed have p.m. Langan my or at strategy. however Eric will capital the you allocation me after X:XX own

Instagram subsidiaries our and on On thank good favorite and you behalf the company, of Eric, dancer my [indiscernible] Bradley, night.

please visit of or and always, fun. As restaurants one have clubs our