RCI Hospitality Holdings, Inc. (NASDAQ:RICK) Q1 2023 Earnings Call Transcript

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Eric Langan: Yes absolutely. I mean we have been — we kind of switched modes in early December. We don’t want to get too crazy about it in December because we did have a lot of preplanned parties and Christmas party and stuff. We did get affected a little bit — pre-Christmas was pretty decent and it slowed down the week between Christmas and New Year’s was a little off but then New Year’s was — New Year’s weekend was fantastic for us. So, it’s been a strange — I would say it’s been a little strange adjusting to it right? Because this — I call this a psychological recession in that there’s plenty of jobs. People can go out and earn money and make money very easily right now. It’s just — it’s psychological. Everybody keeps saying things are going to get bad, things are going to go bad.

And people are seeing prices a little higher. And so I think there’s still a little sticker shock on certain items and certain prices out there. But overall I think that by March — I’m thinking by March out we’ve adjusted our plans. We’re seeing like I said January was better than December and November in total revenues. February the short month we only have 28 days, so we don’t get those extra three days. So, we’ll see how February comes in. But I think on a per week basis or if you do an average daily sales, I think February is going to be up from January. And I expect March will put us back on the path and we’ll have to see how we run through this summer.

Anthony Lebiedzinski: Got it. Thank you very much and best of luck.

Mark Moran: Thank you very much Anthony. Next up we are going to have Lynne Collier of Water Tower Research.

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

Eric Langan: Well, yes and no. We’re in some negotiations right now. We would try to complete with a national partner that’s not quite done yet, but we’re working on that process hopefully by the next — by next week we’ll get some color on that which I think will be exciting for us. Overall, we are — we’ve done our 3D scans. We’re starting all of our layouts. We’re going — we’ll be up there Monday after Super Bowl to — with some of our operational team we’re going to actually do floor layouts and flow patterns for the location to get to the architect. I suspect and hope that we’ll have the roofing and HVAC systems repairs and replacements started in April and hopefully completed by the end of April. My personal goal is to have the casino turnkey ready to open by November 1.

A lot of that will depend on whether we can get our preliminary approval by June 1 which we should be able to do because that’s about six months. And typically it only takes three or four so we may have it much sooner. We’ve been in licensing I guess going on about December January about 2.5 months. So hopefully based on what we’ve heard from historic from other operators in the Colorado market is that between four and six months you typically will get your preliminary approval so you can start your casino setup. So if everything goes right we’ll be turnkey ready by November 1. And our total cost on that is we’re buying most of our machines. We’re not going to do a lot of leases or what we call they call participation machines will — should come in just under $10 million between the remodel the machines, the table games everything else the security systems that type of stuff is what you think including the land and building cost of $2.4 million.

So basically I figure we’re going to spend about another $6.5 million on build-out and gaming devices and leave us about $1 million bank for start-up.

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