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

Page 4 of 21

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

Eric Langan: Yes. We had 10 locations that were closed for two days. Six of those locations were closed for a third day. We also had a tornado that hit our Fuqua location in South Houston. It was closed for a couple of days. While we got the — some of the repairs done and there was no electricity on that part of town down your part Texas. You’ve seen it on the news that’s where the tornado actually hit. We just got the tail of it I think or the beginning of it I’m not sure which. But it was pretty bad tornado. It actually ripped a metal the metal top off of our garbage dumpster and it blew out the fence on the roof like the AC units, HVAC or the system was damaged. We had to get that repaired. We have insurance so we’ll worry about the insurance part of it later.

Right now we’re just getting everything fixed. Back the store closed for about two days. So there were some minor stuff but most of that I think there was two days in January and then February 1. I think I remember. It might have been all three days at the end of January. So our January numbers which I said were better than November and December were affected by those 10 stores closings as well. So I think we’ve been a little better off with those 10 stores and we’ve gotten those three days from those 10 stores. So..

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

Eric Langan : We have about six site locations — or area locations that we’re looking into. Right now we have the one in Aurora. We have a downtown Denver location very close to the convention center that I think will be just an unbelievable location. And it’s a — I won’t call it a turnkey location, but it’s pretty close. Everything we’re going to do is cosmetic. The current — the previous operator left everything in the building, so all the kitchen equipment is there. It was a large operation, great location. And hopefully, we’ll — we’re in the contract negotiation to get that under contract and close. And I think that if we can get this done in the next week that we could actually have that location open in time for the football season when the Denver Broncos have their first home game.

That’s going to be our goal is to get that one. So that one could be opened very quickly and very inexpensive. Total cost of probably less than $1 million on the build-out and we have bank financing on the purchase. We’re buying the property so we’ll have bank financing on the purchase. So it will be a super fast cash-on-cash return as well for us. So I’m excited about that location.

Lynne Collier: That’s great. Thanks so much. I think I’m good for now. Congratulations on another great quarter and thanks again for taking my question.

Page 4 of 21