RCI Hospitality Holdings, Inc. (NASDAQ:RICK) Q3 2020 Earnings Conference Call - Preliminary Transcript

Aug 10, 2020 • 04:30 pm ET


RCI Hospitality Holdings, Inc. (NASDAQ:RICK) Q3 2020 Earnings Conference Call - Preliminary Transcript


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Greetings, and welcome to the RCI Hospitality Holdings Conference Call and Webcast. At this time, all participants are in a listen-only mode. A question-and-answer session will follow the formal presentation. As a reminder, this conference is being recorded.

It is now my pleasure to introduce Gary Fishman who handles Investor Relations for RCI.

Gary Fishman

Thank you, Rob. Please everybody accept our apologies for the delay. We use -- obviously used a third-part vendor to set-up the call and we will do our best to present this from ever happening again. Thank you. For those of you listening to this call on the phone, you can find our presentation on the RCI website; click Company and Investor Information just under the RCI logo. That will take you to the Company and Investor info page. Scroll down a little and you'll find all the necessary links for this call.

Please turn to Slide two. I want to remind everybody of our safe harbor statement. It's posted at the beginning of our conference call presentation. It reminds you that you may hear or see forward-looking statements that involve risks and uncertainties. I urge you to read it. Actual results may differ materially from those currently anticipated. We disclaim any obligation to update information disclosed in this call as a result of developments that occur afterward. Now please turn to Slide three. I also direct you to the explanation of non-GAAP measurements that we use.

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

Eric Langan

Thanks for joining us today. I'm here with our CFO, Phil Marshall; and our Controller, Bradley Chhay. I hope that everybody and our loved ones have been able to get through this pandemic so far, and that you are following all the safety recommendations.

After the market closed today, we reported our third quarter results for the period ended June 30th. Total revenues were just under $15 million. Keep in mind all of our locations remain closed in April, and the beginning of May and a limited number were able to stay open during the balance of the quarter. We had a net loss of $5.5 million or $0.60 per share. Looking at operating cash flow, we were slightly positive. We ended the third quarter 2020 with almost $15 million in cash and $5.5 million in accounts receivable, including a large income tax receivable.

Operationally Bombshells was the star. The segment generated record revenue in May and June and quarterly operating margins that exceeded our original targets for all 10 locations. Nightclubs that were open performed well considering the environment. Most of our Nightclubs had to operate as restaurants with entertainment instead of our standard nightclub procedures requiring all guests to enter to eat food in order to be able to partake in drinking or entertainment. To give you an update on how well we're doing in the fourth quarter, we generated $7.6 million of revenue in July.

We have 31 locations open today. Our subsidiaries have