Q4 2020 RCI Hospitality Holdings Inc Earnings Call
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[music].
Greetings and welcome to our C.I. Hospitality Holdings conference call and webcast.
At this time all participants are in the listen only mode. The question and answer session will follow the formal presentation. If anyone should require operator assistance. During the conference. Please press star Zero and your telephone keypad as a reminder of this conference is being reported.
My pleasure to introduce Gary Fishman, who handles the investor relations for RCC.
Thank you for those of you listening to this call and the phone you can find a presentation on the artist the other website.
The company and Investor information just under the Rcs logo that will take you to the company and Investor and full page scroll down a little and you'll find all the necessary links for this call.
Please turn to the next the page I want to remind everybody of our safe Harbor statement. Its posted at the beginning of our conference call presentation reminds you that you may hear or see forward looking statements and involve risks and uncertainties and.
Actual results may differ materially from those currently anticipated.
We disclaim any obligation to update information disclosed and this call is the result of the Goldman developments that occur afterwards.
Please turn to slide free I also director of just the explanation of non-GAAP measurements that we use.
No actually it's just Eric Langan, President and CEO of RCR and hospitality Eric.
Thank you Gary Thank you for joining us today.
I'm here with our CFO Bradley Shane I hope everybody and their loved ones have continued to get the the pandemic and that you are following all the safety recommendations.
[laughter] after the market close yesterday, we reported our fourth quarter and fiscal year for the period ending September thirtyth.
We continued to make good progress dealing with the effects of COVID-19.
Total revenues of $28.8 million nearly doubled from the third quarter.
Both our Bombshells and night club segment exceeded expectations and particular bombshells.
We generated net cash from operating activities of $3.5 million and free cash flow of $3.4 million.
EPS was the loss of 31 cents, mainly due to some additional year and non cash cobot are weighted impairments and the tax valuation allowance, which will explain on.
On a non-GAAP basis, we earned 15 cents per share.
Looking at the first quarter of 2021, we're estimating the first Corp, first quarter club and restaurant revenue should come in and around $35 million to $37 million, assuming no further closings or restrictions, we think that's pretty good considering the spiked and COVID-19 cases, we've seen since the beginning of November.
Currently we have 36 locations open based on the 26 clubs and all 10 of our bombshells and $18 million cash on hand.
Looking forward, we are proceeding with our plan to develop 10, the bombshells and we are actively pursuing new club acquisitions. We believe we are well positioned to reap the benefits of COVID-19 vaccines could have on the economy consumer spending and our business now I'd like to turn the call over the Bradley to review the financials and then I'll return to wrap.
GAAP Bradley.
Thank you Eric restarting the page five.
Bombshells itself for a record of $15.5 million for the fourth quarter and operating margin hit a record of 32.7%.
As a result operating income was more than $5 million yet another record sales benefited from more locations open on a more consistent basis compared to the third quarter in particular, our new locations are doing really well. We also benefited from renewed interest in sports and particularly our pro basketball and book.
Baseball and the beginning of Pro College.
The beginning of college and Pro Football and addition, new meal delivery services out of $365000 of revenue.
Operating income benefited from a higher level of cells and more consistent occupancy throughout the day.
As we continue to follow and all restrictions.
While our performance of my tone down a little to the new normal which at the end of the pro basketball and baseball season as one of the cooler weather. We believe that we built a lot of momentum at our locations and bombshells, what cuts and you have to be a drop of warm.
Please turn to slide six.
Nightclub revenues of $13.1 million for the fourth quarter more than doubled from the third quarter. Some sort of bombshells, that's reflected more locations being open on a more consistent basis throughout the entire quarter and.
All locations continues the limit occupancy in accordance with Cobot Nike say the bad.
Not all club operating at full schedules in line with other restrictions given those limitations our customers came back to a newly opened newly reopened locations and could do you to frequent open locations in particular, our younger patients.
Most clubs experience good cells, and a steady of flow of business, there and operating hours look.
Looking at operating income the segment broke even this mainly what it's like the $1.4 million of additional impairment and other net charges of $450000, primarily due to hurricane related losses, what you reported the smoke, which we reported on our small Louisiana club.
However, we anticipate recovering those from the insurances.
On a non-GAAP basis, nightclubs and $2.1 million on 60.1% margin.
The actually pleased to see that considering everything going on.
Please turn to page seven to review the field and many items and our fourth quarter statement of operations.
Cost of goods sold as a percentage of revenue was higher due to the change of sales mix man, the more food and less revenue services.
Salaries and wages at about 28% of revenue is held steady due to the effect of labor cost management and the face of continually changing cold and 19 of our unmet.
S.G. and they as a percentage of revenue.
As well the depreciation and amortization increased due to fixed costs on a lower revenue base. That's DNA was partially offset by some cost savings.
Interest expense.
<unk> was down approximately 4% due to debt pay downs prior to and during the fourth quarter.
Income tax was settlement of $69000 expense.
However, this did include a non cash 1.3 million dollar expense for recognizing a deferred tax asset valuation allowance.
And please turn to slide eight.
We ended the quarter with $15.6 million of cash on hand, and currently have approximately about $80 million.
During the fourth quarter free cash flow rebounded to $3.4 million.
As you can see so far through the <unk> over the effect. The second third fourth quarters, we have remain free cash flow positive. This is the huge testament to our businesses our teams our management and strategies.
That's about $1.3 million from June Thirtyth due to previously mentioned Paydowns.
Current liabilities increased about $4 million due to the annual renewal of our interest coverage. This out of similar effect and a year ago fourth quarter, otherwise fourth quarter of the current liabilities would have been flat with June thirtyth.
Having said that September Thirtyth current liabilities did include the effect of some notes on the portal, but we are current on all our debt payments as of today.
Slide nine please turn to page nine or that Pie chart.
It is down to $1.3 million from our June thirtyth quarter, with small decreases and almost all categories.
Secured debt consist of the.
The 61% of and that is secured by real estate, the 18% list and I saw the financing is secured by the respective club the which it applies.
The 6% is secured by other assets.
And lastly, the 1.5 per cent represent and the Texas comfortable the settlement. This the secured by businesses and assets of of clubs related to the settlement.
Our unsecured debt consist of the 9.9% is listed as unsecured and the 3.8%.
Per cent represented by SPX flow.
Last Thursday, and last Friday, we learned that 10 out of our 12 SBL loans have been forgiven for a total of $4.9 million.
Please turn to page 10 to review our debt Manageability.
As we reported during the first nine months of fiscal 20, we move and or converted about $14 million and near term non realty balloons out.
Out years, what's the amortizing loans to give us more financial flexibility.
We have continued this strategy and the fourth quarter converting about 2.1 man lot of Realty balloons to a 15 year note.
The additional financial flexibility, we have excess we have one access parcel under contract to sell and for access parcels and that has to be sold around existing bombshells.
Currently we are in discussions with other banks to refinance some of our debt for a lower rate and longer term.
Now I'd like to turn the call back to Eric Thank you.
Hi, Thank you Bradley [noise].
Last month, we announced our plans to double the number of company owned bombshells over the next three years.
Oh, the 19 has created a unique and compelling opportunity the.
The concept has proven itself the do well see the pandemic. Unlike some other casual dining chains.
From inception through the end of fiscal 2020, the cash on cash return of the first 10 as matter of capital allocation of the objectives. The.
They have more than covered the cash invested and them and can easily self onto the new units.
Because so many restaurant chains have had COVID-19 difficulties, we can access prime locations not previously and available and in some cases buy or lease them at significantly lower prices.
Our plan is the opened 10 new units over the next 36 months.
But only if we can find the right locations and structure of the development of each and line with our capital allocation strategy.
The target markets are three we know well the Dallas Fort worth where we have one bombshells.
Houston market, where we have eight the market is so big here. We believe we have found some additional opportunities and the Miami Fort Lauderdale area. We believe the demographics and highway patterns are ideal for bombshells concept.
We also have existing club and restaurant management, and all free markets to provide us with additional operating leverage.
Please turn to page 12 [noise].
[noise], we've been talking to a lot of new investors. So I'd like to review our capital allocation strategy.
We're very focused on growing free cash flow to enhance shareholder value.
Our strategy of similar to those outlined and the book the outsiders by William Thorndyke. The company. If we study our companies. He studied focused on how they generated cash per share and allocated the cash and generate more cash. They also realized equity was not cheap form of capital, but a very expensive one and.
Included in their capital allocation, we're buying back shares but only of shares were represented a compelling way to increase free cash flow per share.
We have been applying the strategies since fiscal 2016 with three different actions subject of of course, the whether theyre strategic rationale the do otherwise the first is mergers and acquisitions, specifically buying the right clubs and the right markets, we'd like the by good clubs solid.
Cash flow in clubs at three to four times adjusted EBITDA you.
You seller financing and acquire the real estate at market value of our goal is to generate and annual cash on cash return of at least 25% to 33%. So.
If we can't always by class when we won our second strategy is using cash to grow organically, specifically expanding bombshells to develop critical mass market awareness and the sell franchises.
Similar to acquiring clubs, we like the see at least the 25% to 33% cash on cash return.
The third is buying back our stock when the owner of free cash flow per share has more than 10% and the pandemic. Our plan is acquiring shares the using the same formula but only of our cash on hand exceed $18 million to provide us the significant resources and our last call we had indicated $15 million.
Our ultimate goal is to drive shareholder value by increasing free cash flow per share, 10% to 15% on a compounded annual basis.
Please turn to slide 13.
On the final page of our formal presentation I'd like to spend a moment talking.
Talking about our fiscal 2020 accomplishments, we collectively demonstrated strength resiliency agility and unity through adversity created by Cobot, 19, and our people processes and systems passed with flying colors.
We turned on a dime and March to the new reality and began to open our clubs and restaurants as soon as we were able to do so during the last three cobot impact the quarters, we have not been profitable on a GAAP basis, mainly due to COVID-19 weighted impairments.
But we have been cash flow positive, which we believe is more important and the financial analysis and we approve of the value of the bombshells of our bombshells investment during all of this we also resolved the FCC situation with our new auditors are second and third quarter queues and 10-K have been filed and a timely manner and we seamlessly transit.
And the <unk>, our new CFO position to Bradley shape.
I've seen a lot and my 30, plus years, and the nightclub and restaurant industry and I'm proud to say and it's easy to recognize that we have the best teams and the business ultimately that's how we got through fiscal 20.
It was with our people and our culture of hard work and dedication.
And I'd like to take a moment the really thank some of our team members.
Especially our restaurant guys and Bombshells, David Semmens, James Watkins Raphael and Marco you guys have been unbelievable force.
Really carried us through a couple of quarters and also to our management team at the club level and and a car the in reared and and all of our regional managers, who have really put in a lot of effort traveling around the country when they're when their markets were closed to help out and other market as we were getting them open because we are short staff.
And and short.
Management and its been a really impressive to see what you guys have been able to do and keep this company going and with that let's open the call to the question and answer session. Thanks operator.
Thank you and we would like to ask the question. Please press star one and your telephone keypad and confirmation till the indicate your line is of the question. The kill you may price dark value. If you would like to review of your question for the Q and.
Okay, and just did use the speaker of letting the it may be necessary to pick up your handset before passing of sorry. He is.
Our first question is from Greg Pendy with Sidoti. Please proceed.
Hi, guys. Thanks for taking my questions. My first question just on the Bombshells operating margin of 32, seven I know, that's probably not sustainable can you just talk to us about the puts and takes and maybe.
Well it might be different than what you had the as an operating margin target their pre kind of it.
Well, we were shooting for 18% to 22% that's kind of always been our our key what we think is our consider success rate.
We just had unbelievable sales of the outdoor patios the weather basketball going every single day, four or five games the day, while they were in the bubble.
Fantastic for us as well really helped our alcohol sales.
Which you know are much higher margin.
I think we'll return, but I think I think that.
With one of them seen on closings like a lot of little small neighborhood sports bars aren't reopening a lot of little things like that.
A lot of small restaurants, a lot of older chains that have been around for a long time are very regional.
Werent, we're seeing them close down I think the restaurant associate instead of a 110000 restaurants.
Or change the closed and they're expecting up to maybe 3 million more if this continues I kind of for a lot of.
A lot of closures. So I mean, I think our new new margins could be a little higher.
And then maybe maybe 22% to 28%.
As we move forward, it's just really hard to know at this point because we just don't know what normal is but I don't believe that will be below the 18% to 22% again.
I think that's the that's the that's the key part of it.
But I think it will be a little higher for the foreseeable future anyway.
Great and then just on the M&A comments that you made can you just has there been any transactions outside of the you guys, but can you just give us a little bit of color on maybe by our sellers and become a little bit more reasonable post coupled with do you think or just kind of what's going on what you're seeing in that environment broad based I mean, I think three to five.
Pretty reasonable to begin with so you say more reasonable I don't think it's really more reasonable I think there's a few sellers out there to become a little more desperate they want to get out to their tired of the industry or maybe the older and the don't want to be exposed.
You have to actually operate these locations.
So I think thats part of it.
We're seeing a lot of no.
Ill just like I said, a lot of guys the mono.
Okay, well what does that what does my club really worth of now with co of it.
And then we're we're talking to a lot of a lot of new new faces I should say guys.
Guys, we didnt didn't really talk to in the past as much about selling their locations or are considering it now.
And with our stock performing the part of our sockets and is performing and gets the gets our yield better that's going to give us even even more opportunity.
To maybe make the right deals. So that's kind of things were looking at right now and I think we're going to continue to see that though we have a convention and may where I believe we're going to.
Talked of a lot more people.
Perfect and then just one final one I know you gave us a lot of color on the openings and closings and keep us the updated there but is there any kind of key restrictions at some of your big marquee clubs, maybe Miami, New York does types of clubs on the our disclosed again yesterday.
Yeah, and the aren't just closed again yesterday for and definitely we don't you know who knows.
And now the side, let us open they only close the schools for about a week or so so maybe we'll get lucky and ER and get open pretty soon.
And Florida, Miami Dade County half the have the curfew that we're dealing with we are dealing with more curfews and other markets now and.
And closures and Minneapolis, we're still close to think through December 18th I don't know, if that's been extended or not I'm going to have the share.
Second of that I think I'm, probably the next couple of days, we'll hear some news on that.
But those are kind of thing and Chicago markets been closed and we've got open for very very short period of time couple of weeks or something kind of.
Closed again.
So we do have some markets that are very difficult to operate in and then we have markets.
You know that we're doing the doing very well and.
And we're following our safety protocols, we're doing our social this and thing or limiting our occupancy.
And and doing the best we can do.
The key people working it's Christmas time, and it's really sad when you when our employees and just get back the work and after being off for six months and and I get the word for two months and now they're back off work again, we don't know for how long.
They are saying if we read a lot of these things even even the New York came out yesterday and said there the 74% of their tracing found that the the.
They're cobas cases are being transferred and small household.
The meeting areas, where people don't wear masks not and businesses you know so I think I'm, hoping that the that they'll realize that the businesses of the favorite place for these people to be there.
Our force to wear masks Air force the social distance.
Versus when you have something in your own home you get comfortable and it's a little different so.
And we'll keep pushing and we'll keep working on it. The we've had to do a couple of cities. We've had the see states. The we've had to see the counties and.
In some places the stay open and we've been fairly successful with that if the last resort, it's nothing we'd like to do.
Hey meeting court.
But at the same time, and we've got to keep our employees, working and and earning a living and paying the bills.
And and keep our business is flourishing.
All right and the other question.
No that's helpful.
Absolutely nothing.
[laughter].
Im sorry, which the Graham.
I just wanted to add agile appoint the.
To the first comment that the first question on Bombshells, just wanted to add that our newest locations bombshells of the United The Bombshells. Katie was also instrumental to the extreme margin because they're our best performing stores in terms of revenue and operating margin.
And the opened in the earlier part of fiscal 2020.
Got it thanks.
As a reminder to star one from your telephone keypad. If you would like to ask the question. Our next question is from Jeff more with the borough capital. Please proceed.
Yes, thanks for taking the question guys.
Looking out say free quarters from now where do you guys have to be in terms of the bombshells openings and share repurchases and.
All the acquisitions and and kind of an average scenario.
I'd have to go and what you see.
Not accelerating reopenings or re openings.
Taking forever and to have that.
Well, I mean, I think and and three quarters everything's going to be you know what the vaccine I think everything's going to be back open I think we're going to see pretty strong openings Reopenings March through May and I think we're going to get pretty normal occupancy ease and whatnot.
Definitely by June July August.
So.
By the end of our fiscal 21.
Which is September Thirtyth, I think we are going to be running on all cylinders and what's going to be going.
We're in the process of these bombshells now.
Typically of Bombshells can take us anywhere from eight to 14 months to get open depending on for building from the ground up doing remodels.
Different city permitting.
Things like that so I think we get the.
And the next three quarters of at least one of those locations open opening a second location not far off.
We're also pushing the.
Forward with a with a couple of franchisees that were that we've been talking with and hopefully we'll get one of those signed up here very soon.
And maybe even get one of their stores open in the next.
And the next nine months of.
The ones, we're talking to are both looking at the doing the remodel versus a ground up build so could be a little quicker.
And that's for the Bombshells for the club side the.
And we're looking at multiple acquisitions, we probably in the next three quarters close at least one.
Possibly two of those acquisitions.
And the get everything up and running I think.
We're going to be well over 200 plus million and revenue maybe to 21 million and revenue on of going forward run rate, maybe even maybe even more I mean, I just I'd trends on the club acquisitions.
And how quickly we can get them integrated into the systems.
Okay, and the what about share repurchase what would you like to have done by then.
We don't have a goal on share repurchase our share repurchase of real simple, we have excess cash and we haven't we have what we call our cash reserve, which is our safety net.
We have the ran at 80 or 15 million for a while the with the cobot shutdowns. We have increased the 18 million cash on hand, and anytime that we have cash in excess of that amount the.
And we don't have the you know.
Something to put it into a bombshells location or whatever then we buy back stock.
I think you can see that the.
We bought back about 50000 shares.
Last quarter all of those shares were bought in the last three days of the quarter.
Our four days maybe for next week 20, something for not 30 or 40 days last four days of the quarter.
And and that's because we just we were set on a ton of cash and it with overall reserves and we didn't have anything that we are really going to put it into.
Before we would of rebuilt it. So we said okay lets the let's buy back stock.
If you look at the the 10-K, you'll see that we continue the buyback stock of this quarter and we now have.
8.999 million 910 shares outstanding.
And we will continue to do so and we have cash in excess of our.
Safety net and no immediate use for it we will continue to buy back stock provided the yield on our stock is over 10% of what we consider forward going free cash flow.
Okay. Thanks, and then one last question regarding Bombshells has there been any progress with the third party valuation or the.
So the bringing and the strategic partner.
There haven't been at this time of.
Were they were very very early talks with that.
We're going to continue to pursue it.
But in the meantime, we're not on the slows down and we're going to continue to build the brand regardless.
If we could take in the growth partner or something we may we may want to do that we may not.
Just going to depend on the terms I mean that we're going to evaluate everything.
You know I don't know kind of as it comes basis.
No we have no real expectations, one way or the other on it.
Okay. Thanks, very much of the clarity of great quarter, guys Yep. Thanks.
Okay.
Our next question is from Adam Wyden with ADW capital. Please proceed.
Hey, guys can you hear me yeah, how you doing.
I'm doing great. Thank you Eric the.
And the depth of large did I did I ever really believe that things would the that you guys would rally like this and.
By the way.
And unparalleled and buyer of and it's just it's really remarkable that the testament to the team that you have that and.
You know look I'm I'm tickle, the it's to be the largest shareholder and the company and the you know I'm really looking forward to in this company quote unquote level up I think as you said you know you spent the last 30 years kind of waiting through through a lot of crap you know whether it be the FCC of the audit.
The door, you know bad bad and that advice from investment bankers as what the capital allocation and the last five years, you've clearly demonstrated good here you are pretty consistent capital allocation strategy that being said look I think the short interest in this company is as high as it's ever been.
So clearly there are people betting against steel you basically built the concept bombshells. The know about now whether you've got the third party partner or not I totally agree with you and if you can and the capital and a 50% to 60% Unlevered return and Bombshells can do these type of number and then you look at numbers don't lot of people do so.
Some of the going to pay for it you know and if it's not inside a wreck it's in a sale or a spin out or something of that so I'm not particularly nervous you. The 30 gross and operating margins for long nobody people or people are going to be asked all of that back.
Back to the back look at Buffalo Wild wings and their early days they were easily achieved 35%.
Locational the margin you can actually go look at what they were doing on a consolidated basis and they didnt EBIT on their listing so.
So.
Talking about the article possible I definitely don't think.
Obviously, no one wants to underwrite to a 30, but I I don't think it's unrealistic that numbers could could settle and around the high Twentys I mean remember I think you guys are running through these margins. So you're obviously benefiting from the fact that you're buying the land building and Chen.
And.
And I'll stop parceling out and and getting to those numbers.
But.
The little bit more philosophical and and I don't want to sound like a dead horse or repeat myself over and over again, but I go back to kind of the the map I've been doing and obviously building more Bob Jones is incremental club acquisition very incremental but when you look at what the business was doing pre code that you weren't the only thing about 60 million of EBITDA.
Maybe even a little bit more and you still have you were still the burden by all of those costs from the previous audit and the FCC and use that there's a copy of the clean up your cost structure, you've done some refinances, so and I look at the stock and I'd say the myself you know you weren't doing $45 million of free cash and the easy 40.
40 to 45 without even opening and I live and that was before kind of this bump and bombshell the.
The like when I think about that and I think about the price.
Private market cost of capital and look at what the power is done the Greek median I mean, there are all sorts of private equity firms that would be chomping at the bit the buy this thing and really take it out underneath.
Well look I know, you've got all types of control and things like that to protect shareholders.
At the end of the day, it's very hard to turn away of 40 or $45 per offer with the stock trading at 30, you obviously like the stock at Ford and will buy and 5000 share there on average.
Okay can.
And we can you talk to me about.
Your initiatives.
Range, the public and what I would call of public and private market valuation or we can talk about the financials and all of these things the before going against you, but you pass all of those tests with flying colors. The through co. The that you are generating cash I mean, if I'm, a private equity firm and I am looking for ways to put money to work in the kind of a cold the rebound.
The first thing I would do is make the public offer for Rick. So the way you put the deepest against that as you make it too expensive for them to go ask the how do we think about that.
You know, we just keep pushing forward and we buyer stock when one of the time to buy the stock and you know we don't we think about the.
And a lot of private equity kind of talk the is in the past, but the cant remember our industry you have to run it.
You have to manage it so.
And it's not something that Theres a lot of people out there.
The have experienced doing something especially the size of our of our organization.
If you look at the private sector even.
And there is not there is not too many companies out there of our size and our industry.
Maybe two maybe two other operators out there.
That could possibly operate the.
This large and our you can bring outside of the blend, but they don't understand the tricks of the trade so to speak.
And they will they will make some minor mistakes and.
Can affect your cash flow really quickly.
As my opinion, but at the same time.
You know I would never say never kind of guy and if I figured out I don't think of the smartest Guy and the room. So I think there's probably plenty of other people out there the configured out if they want to you know if they wanted to and.
You know the we think about of share we always think about especially when or if we don't really think about as much when our stock of the as high as it is when it was down at $8 and 10 dollar statewide and somebody come by our whole company and I mean this is.
This is crazy, our underlying real estate values and man.
And just the the bombshells concept alone and.
And the and the cash flow I mean that we took three or four of our major clubs.
And on Miami too.
The two clubs of Miami, the free clubs in New York.
Now Chicago.
The the recall was the Minnesota I mean, there's there's a lot of there is a lot of hidden value.
I think are locked out of value still in this company based on.
The value of our individual licenses and certain markets.
So.
Yes, and kind of what I mean, my math is quite simple now well, obviously, we can talk about the opportunity of bombshells right well you know the.
Your job as an operator and I don't pretend to think that I could have a run. This thing you did and then and you Mark and the capital allocation on your all that being said you know when I look at Bombshells and I say the myself. Okay. Fine. If we can open up and this is need and franchise is company owned stores and Viking by the real estate Subparts of what out and do all.
Thats the off at the 40 50, 60% Unlevered return and maybe you can make an argument that the better investment the buying your own stock at four times EBITDA, but I mean, the simple math the I'm doing right is your 256 market cap, you've got 130 million and net debt, you've got all of which non cross collateralized property.
Well the mortgages Youre doing you probably have another $15 million to $20 million I would call unencumbered non income producing real estate right. So I look at myself and Mike Okay. The things got a book and the net debt right under Levered.
No.
Your $360 million kind of the against the $80 million.
EBITDA, which I think could be conservative.
As it relates to the.
As it relates to the kind of the near term for Cold day, but let's say in the 80 million normalized I mean, you're basically by the.
A retail restaurant concept the growing export high I mean, that's kind of a hard to be and so.
The question of already comes look I totally get the bombshells, but like how do you justified and club acquisitions with the stock trading of 30 Bucks I mean I get it at 40, 50, I mean I'd have to spread it out but I mean at this point, but it seems like the only thing the only make.
As buying back sooner bye.
The buyback shares and deal and Bombshells my thinking about the well you say that well you got remember one of the way we've done all of our club acquisitions from 2017 on.
Basically been a 100% debt.
Right and what we do as we go and we look at the as we go in and we look at and we say, okay. This clubs and making X amount.
We're going to give 70 per day and this is their free cash flow, we're going to get 70% of that free cash flow back of the owner, we're going to keep the 30% of that free cash flow, we're going to the I'd say, the owner or debt holders owner debtholders gonna get 70% of the free cash flow, we're going to take 30, we're going to manage it sort of basically managing the own and we get 100% of the upside.
And how we the.
And with the Chicago tallied on Pittsburgh of how we did Scarlett.
And.
A couple of the cap a couple of the other locations, we don't really use the company's free cash flow to buy the club acquisitions Weve used.
The financing our reputation and our ability to actually go in there and operate operate the businesses.
And our reputation and with the owners and the industry all of our.
Of our ability to pay them, regardless of what their club does we still pay we pay them and but we have been very successful in not only.
Generating the cash flow out of the business would actually increasing and actually increasing our side of the cash flow as well.
And that's been the very successful for US we've put some short term balloons, and which if we werent able to then go and get longer term financing and what would force us to put some of our cash out but so far every time of balloons come due we have been able to roll it into the with our other existing real estate portfolios or through other invests.
Matters or what not been able to roll that debt forward.
And the.
And most time lower interest rates as we do it so the basic what you're saying is you think you're creating the well bass that net of synergy and multiples lower than what you're.
Yes exactly.
Yeah.
All right well look from your mouth, the God's ears, I mean, if you can do deals on the reported a half times EBITDA and the Bill brand and the build the mode and you can buy back stock and.
Look I'll quit my hedge fund and I'll come work for you Eric I mean share. This is going to be a $10 billion company pretty impressive. So look I'm I'm happy to be the largest shareholder and this company. So it's pretty impressive and I'm I'm I'm looking forward the to seeing guys level up because the business performance is there and the market the market.
Oh, so please let us know how else we can be helpful. Net.
And I'll sorry, I appreciate it thanks for everything out of.
As a reminder of just one and your telephone keypad. If you would like to ask the question. Our next question is from Jason and share with Archer well. Please proceed.
Hey, guys.
Great quarter, I like to hear everything you're going I kind of one of some clarification, though how are you guys looking time wise and.
From the the debt restructuring at these record low interest rates and how much do you think you could like bundle together.
And get a better rate.
And with the cost savings like the.
Sure our goal of $115 million.
We're trying to close before February 28.
It's been we had to get the K out we had have current financials.
So part of the cash flow.
Whatnot. So we just basically send everything to the bank.
And last night after after we filed.
And so were moving forward, we'll probably start.
Working on the appraisals soon because were not forget the phrase of what base a lot of the properties were already financed some are not.
The.
And most of our survey should be currently we have a few surveys the gap. We may have a couple of environmental studies to get phase one environmentals get done basically get the whole package.
The wrapped up but now that the case done we'll be pushing for full speed ahead on that so if.
Every 28 of the what 10 weeks and now so hopefully we'll have clean of we'll have some news.
By the time, we file the next Q.
Okay, and then in terms of work.
Give me any ideas of what the new rate might be range wide.
I was going to be in the 5% to 5.5% range.
Okay.
And then what if you look at slide number nine basically youre going to take obviously all of the current real estate range.
Brian.
We're going to take the VIP and blush seller note 10.1 million, 7.47% that will be rolled in there.
And we'll be rolling in the 14.1 million and unsecured debt and that'll all be rolled and there.
And so that will be here no that's going to be basically your 115, it's actually not even 115 million anymore. I think we pay down some of the so its price like a 112 now something like that so.
Really the lower the amount of we'll pull 3 million and cash out depending on what the bank of let us do and.
Thats all going to depend on the appraisal of the price we're going to have to come in at the right at the right level.
Our current debt service on that and the is $1.174 million.
I'm, sorry, $78000 and when we do the new payment, we will be paying $768000.
A month, so we're going to save about $410000 a month and.
Cash outlay for debt service.
Our about $5 million or you're just under $5 million of year. So.
It's very significant.
And that we that we get all of this.
Rolled up and done and it will give us basically instead of all these payments we have right now we'll have basically one loan payment.
There will have the unsecured buy other assets that will have the top comptrollers debt and as we've learned we still have the SB eight loans on there, but the 4.9 million of that has been.
Forgive and now and we're working we're waiting to hear.
On the other two there are pending so we'll see what happens with those.
And.
Should be should be very good for us on a go forward basis. Once we get all that the get that done.
A couple of the industry question first one.
The big clubs that you guys would target and you're going to have confidence in may the speaking.
The operators what percentage of the clubs are basically owned by groups of people and how many of them are you dealing just with like some guy that started the business of 40 years of you know.
Fourth and usually it's the one guy that we're dealing with he may have a group of smaller investors, but.
But usually there is one control person.
That we're dealing with we're not dealing with the group of control people, there's occasional deals where there's two equal partners.
And deals the satellite.
The stuff like that but the but the majority of the clubs I believe are just they are basically owned or controlled by one guy one entity.
Okay.
Yes and.
And the other thing was with the Bombshell design with hope and now have you guys had any discussions like with the architectural structure to meet and increase the overall footprint. So that may be you get weighted at a higher.
Half of the like let's just say instead of having 200 people in a restaurant you can have 300 Jets and case. These guys turned around and they will you can only operate at 30% half of the what the 30% capacity with the new design.
The only like 60% of what you were originally and.
The patios have no occupancy requirements because they're outdoors.
The interior.
The of typical bombshells is 450 to 550 people already.
So you know we don't really need we already have extremely large restaurants, I think thats been of.
The big key to our success is that our restaurants are so large.
Matt.
The people have been able to.
To get in.
The place teams busy, but you're not set and on top of each other and you go to of 4500 square foot to 6500 square foot standard.
Brinker Darden restaurants, and you put 50 people in there and there the you're starting to get close together.
And our locations because of our 8100 square foot indoor 2400, plus outdoor.
You know, we can put a 150 people indoor or 200 people indoors and.
And still everybody be all the table there are still six feet apart.
So it's been it's been really good for us our patios, while there is no number occupancy we do you know and force social this and thing.
You can't walk around the restaurants are the bars you can't.
The bar areas and stuff you have to be ceded you had to have two of your up and you have to have your mass on.
You know, we've been able to do the and I think thats created.
A little sense of security for our for our guests and I think thats why they like the locations I think that's why they come back.
And then I guess, the other thing too about the bombshells the.
Overall concept and when you guys of pitching this any perspective franchisees and stuff like that I'm, assuming compared to most of the other one day out there overall liquor sales relative to food costs are just so much higher than the industry of the whole is that right.
Well they are up from 10 PM the two am.
Because that's when we really kind of convert.
We bring the DJ then we sell a lot more appetizers, it's more appetizers and mix. It's typically 25 to 35 year old guests that are.
I call it the meat and replaced were going to meet and greet up here, we're going to grab a couple of drinks because our drinks are cheaper than the high and bars of they're going to go to afterwards and.
Some of the might be hungry sort of going to grab.
Appetizer orders couple of drinks and then they're going to head out for the night to where they're going.
Our key success has been.
A group of growth come in and they are going to meet up they're going to have some place else. The guys come in there and meet up they're going to add some place else, but when they get the bombshells they meet each other and the enough staying the bombshells till two o'clock in the morning, They don't they never leave and go to another place.
And thats been a real key to success and for those late night hours and you can see it and the numbers were.
The location the do extremely extremely well as far, especially on higher our higher margins like like you said, our two newest stores.
Thats because we started the concept out correctly from the very beginning we've built that late night, we focused on that late night build and and.
And done very well with it and that's where I can say we really.
The reap the reward of high margins.
Because of showing high margin appetizers of you're selling in the high margin drinks.
And the brand.
For the force solid hours of that you're doing very well.
And then just one last thing to dispel the whole politically correct crowd Oh, what what would you say the breakdown of the customers coming into the bombshell the men and women.
Oh, I probably say.
We're probably.
Hi.
40% men, 30% and women and then.
The rest of mixed I mean, and and then late night I mean.
It can be I've been and bombshells, where there's more women and men and at the in the evening times.
All right the certain locations.
And of the little things I like the here and the politically correct world Yeah, well I mean, I think the problem is as everybody tries to associate us with with the Hooters or twin peaks and while we have a little flair of Hooters twin peaks and.
And that's for our slow ours thats, our two to five the EMS and are in our kind of as we move from lunch to dinner and as we move from dinner to late night.
The kind of where those what of that business comes and helps that's 20% of our business maybe.
But the.
Because of our large menus.
Our drink menus.
Our ferri female friendly I mean, all of our and our all basically all of our drinks and our menu.
Cater to females right because the guys don't guide and they know what they want right all I Wanna whiskey or I want this beer I want this on the rocks are Scott's whatever.
One of the the.
The the female of the come and they want.
Free drinks they want a big drink they don't always want they want and so they have all these different.
Different drinks on the menu and it's been worked very very well same with our food.
If you look at our menu, we have salads and wraps and.
Different seafood and different chickens, and and everything that caters to basically a much much larger crowd, where if you go into.
Hooters for our twin peaks and they have a very what I call male centric menu.
And we've done everything we do the stay away from that and that male centric menu.
And the make everybody feel welcome we have kids menu is the fold up in the middle Army half of it gets put on the army has they have of games on him. So I mean, we're very family friendly and we're very female friendly.
Or not and.
I know, we get thrown into that restaurant category a lot, but I just don't think thats. What our concept is I think it's it's a very small part of our concept just because we have the girls and the uniforms, but and and they have fun and and we make it a fun place because that's the real key right nobody wants to go out and have a boring experience and at a restaurant and I will now and if it's an experience that's not.
I'm going to go if you want to eat you're going to go casual dining are going to go to a faulty you're going to go to pay the way you're going to go to these quick fast casual dining deals.
But if you if you're gonna go on and have an experience that's where bombshells is about it's about the experience not just the food.
Lets bring all right well, thanks again, guys the fantastic quarter and I'm looking forward. Thank you doing especially with the bombshells expansion, yes. Thank you.
Thanks.
Our next question is from Eric named Eric with one Cat One main capital. Please proceed.
Hi, guys congrats on a strong quarter.
And second everything Adam Wyden said earlier in terms of you guys managing through the crisis.
I still remember and March and April I was telling you that every three days basket. If you were comfortable of your cash balance and the thing that you manage through as well as you did.
No.
All right I'll lie and got pretty scary GAAP pretty scary around here.
The the money came in at the exact moment, we needed it I mean right when the.
And we weren't sure what was going to go on and we weren't we're like Okay. What are we going to do from here I think we were down to 4 million cash on hand of the time.
Lastly, we were we were hearing the resource the opening the bombshells. The were actually were we opened four and we Didnt open all of them because we just things were tight and so we tried to open four were going over a few of the time, we didn't know how they were going to do we didn't even know of customers are going to come.
And so yeah, yeah, no interest on getting grew I think ethane and through I mean, I think it.
It's rare to have a combination, especially and small and mid cap line of.
The company that has been incredibly strong business of the wide mode. Like you guys have at the low valuation.
With the with a really great management team of insider ownership and with the ability to redeploy capital of the rates of return you guys actually on the you guys can deploy capital and so I think it's the trifecta I'm excited to be a shareholder of the on what we're going to the we're going to cure that low valuation, that's that's a work and yeah.
The only thing I would the only thing I disagree with Adam on and I Hope you guys don't even considered the on the company for 45 Bucks because I think you got kind of how we would I mean I I.
I'm not looking to sell the company. We just we just built it to this machine that weve yet we've created the now with the the the teams that we put together and the the new accounting software that Bradley put in and the systems Bradley's put enforce it give us just an immediate access to information that and used to take weeks to get.
And now Brad we can give it to a set of click of a button.
And if it's amazing the and that's how I mean, you know.
Without without the systems and they created and the ability to get this information and the teams.
On the and the on the inside of the accounting side of things I mean.
And maybe in a different story.
Our our manager can do so much but without the data and not correct data.
There are decisions may not have always been the best but with we always had.
The best the data that we could of possibly had at the time.
On what was going on and that it made a big difference.
Yes. The so that's the main question I have is I mean, you touched earlier on.
And the fact that when you do club acquisitions, a lot of times you call on them with that whether its seller note and mortgage growth and mortgages on the properties and.
The other returns on equity and those are basically and and then clearly the returns on the most recent recent bombshells, which it took you allow the tweak and find the right locations and the right build out but like the returns on bombshells or are also of extraordinary and so you guys have these long term targets out there of growing free cash flow per share of kind of it.
9% and I'm, just wondering why you guys can't be growing free cash flow per share of 25% given given the fact that youre going to have excess capital, especially if you guys. I mean, it sounds great. The here that you said, you think or any other franchisees on the bombshells side. So you could potentially be in a scenario, where you have other people building bombshells with their capital where you get paid on the.
Perhaps the you're putting into your own bombshells, earning I don't know, 50% of ROE, either something and and and the acquisitions you guys are doing on the club side or infinite are always so if you're taking your cash and reinvesting of that infinity per center of 50%.
Why can't free cash flow per share growth those types of rate well.
Well, if you look at our five year since we started the capital allocation strategy, we're averaging about 22%.
But if I say, 25% and grow 22, everybody goes, though if I say, 10% to 15% and grow 20% everybody says Oh, great good job.
And the reality is we just need a realistic goal right. I mean, we're sure. We may have some years of 25%, but to do that every single year year after year.
I think it's a little more difficult and that's why I think a reasonable.
Goal is 10% to 15% and and we want to overachieve.
And hopefully we'll continue to overachieve.
As we move forward.
Obviously covert is the has thrown a big wrench and that but I still think.
We're going to see as soon as we reopen everything a return right back up and we're going to see a significant increase.
And they are 21 or 22 numbers versus our our 19 run rate with what are the 19 run rate was and that's going to be because I'm not even aware of the big Manisco and.
And I don't even like free covered most of it I mean, once you get back and your baseline like.
Like I don't know why you guys can't grow at 25% every year, if you're taking all of your cash and reinvesting it and these projects every year that and.
Theory generate returns that are way higher and we may as we and as we get our debt service.
Even more manageable than it is right now with.
With it with the new long term note.
Saving us.
Almost 5 million of here and cash layouts for debt service. That's five millions of another two bombshells, if we want to do two more bombshells at the.
The call acquisition, we could.
Let's say pay of high interest and we won't have any I understand left so.
The only thing we'll have to do the only thing we're happy with our cash is either buyback our stock or.
Put put margin used by buying more operations.
Growing operations, Joe and front end of probably do both of you generate cash that's I mean, it sounds like and the 15% of the over promise under delivery of target I mean, that's what we try to do I mean, that's always we we don't want to we didn't we don't want to fall short of the work of our 10% to 15%. That's that's that's for certain and of course and we'd like to the we'd like to the better when we can.
Right. Okay, that's helpful and and keep my my second and last question is can you just give some more color on the on your you kind of get some color on these franchisees, there's two of them and.
How far along are you and what do you think the likelihood of of.
Of one of them getting signs here I I think definitely buy if not this quarter next quarter, we'll have our first franchisees signed up.
And from there I think once you do your first one I'm, hoping I have heard from from other from other operators and other guys that the that I know very well that once they sign up there first of all on it.
It's kind of roll pretty fast warm and got get kind of crazy.
We're preparing for that I think it'll be a little slower for us just because of covance.
I think the you know.
We'll probably really pick up right at the end of this fiscal year. So this summer.
The one in July August September.
Or maybe even in the next quarter October November December and that's when I think will really start to see and a lot more interest and bombshells.
I think once we open up our and it could take of the could take longer it could take the we open up of nil. The couple of our Florida locations and show. The Hey, This isn't just a Texas thing because that's what I get from a lot of guys, where you have this concept works and Texas with the military and everything but and I don't know of what's going to work in this market of that market and.
And I just wonder how much of the Militarys of another small part of the piece, it's not the concept and.
And I to be honest with you I can't even explain the full concept and why we're so successful.
I see all the little pieces and I think we just put all these little pieces together and it created the.
This and just this beautiful.
Puzzled put came together and.
It's just working very very well so.
And we'll keep doing it will keep focusing on the things that the.
The important for the bombshells brand and and keep growing it the.
To put out of the.
Another another menu change here soon.
And with some new items take on some items and aren't selling so well and keep everything fresh and I think thats just from the key.
We constantly reinventing net we're constantly keeping and fresh and and and and fun and exciting and.
It's worked out real well force.
Got it thanks, guys. That's all for me.
Our next question is from Steven Martin with Slater Capital Management. Please proceed.
And group.
Hi, Steve Hi.
Having been a shareholder for.
Quite a while I had more than enough confidence that if there was a management team that could manage through this crisis. It was you guys.
Didn't know how bad the crisis would be so you know it's hard to gauge, but I echo the sentiments of the previous callers that you guys have done a great job in the very tough environment.
I know having talked you through the period the on any given day you never knew what was open and close what the hours were going to be or how the staffing was going to be but you guys rose to dedication.
Thank you certainly tried.
A couple of things one of the previous callers question about you know growing cash flow and all that.
I just wanted to say that while I I'm supportive of growth I'd, rather I'd rather see.
Controlled intelligent growth and reckless growth for.
To achieve some ridiculous target.
You know you guys have done a great job and of rationalizing growing on a controlled basis and I'd love to continue to see that.
Yes, I think Thats, what you will always see from us because everything is fifth grade math, Steve I mean, we we look at everything we take it to the capital allocation strategy and we look at out all of you know and the cap. Okay strategy I mean, while we simplify it here for you guys and the slides internally, it's much it's much different and and much deeper than men and the.
And just a simple slide and that we we look at total debt to EBITDA ratios. The we look at I mean, we have all these different metrics and each deal has to fit and make each of those metrics, where we just you know I.
Go back to 2016, and which we call the do nothing the do nothing motor I. We just go back on the do nothing what we said and we wait and we let the cash build up and we let the cash interest and if our stock price of cheap the buyback our stock and we wait for the right deal.
We're in no hurry to do a deal.
We're quite happy with the current cash flow that we have and we always seem to be able to find ways to.
You know it took to meet our goals without without taking on any undue stress we don't like the stressed the systems at all and that's the real key to keep everything growing without stressing the systems, our management systems, our internal systems.
Accounting systems, everything and no system wants to be stretched no systems going to be pushed to a limit.
Because that's when we that's when we make mistakes.
And and we've we've learned from that over the last the 30 years.
But and.
And the end of the good at the end of the day.
One mistake and cost us.
Two three years of of growth and it's just not worth it so we'd like to take it nice nice my slow and steady well I appreciate that.
And you actually went into my next question for Bradley on now that you've got the systems you know in place and you did some cost savings and reduction during the pandemic. When you look out over the next two or three years at the ability to grow.
[music].
What do you think your incremental.
Overhead or gionee might be if you were to start to grow again, I don't know three or four clubs. The other three or four restaurants, a year and one or two club acquisitions.
What would it cost you on the margin.
Sorry, I take myself off mute Hey, we're not exactly sure you had just given the fact that this years data is kind of skewed and it's an anomaly.
I know that we trimmed the lot of fat and these last three quarters and we don't expect that to come back on but on our normalized margin. We know the direction that we're going so.
It's very hard to say because until we get about you know couple of quarters worth of normalized margins whatever the back open at.
The right occupancy at the right hours with our normal staffing very hard to say I can't give you that information and I want to get and.
Bradley I was more addressing the corporate overhead side.
Let less about the divisional expenses and restaurant margins, but more your ability to add units and grow the the retail side and control the corporate G and H.
That's the plan the plan is always to control of fixed cost cuts or.
Our overhead and terms of salaries and wages SG and age and negotiate with our insurance company and three.
Do the as much as possible.
We're doing that the with the best information that we can what we learned and co bit is the.
You know a lot of our vendors are willing to work with us.
When we're stressed we can press some form of discounts and whatnot and work with them and we're seeing opportunities and different markets EBIT at the corporate level you know.
And what about head count.
I expect the revenue per head count the continued to grow a lot of our systems are basically leverage now we have a lot of automation and so before whenever I had two or three profit centers I would have to add a.
A couple of head count and there a lot of our systems and would continue to use artificial intelligence and AI to bridge the gap between how do we get our data really fast quickly and accurately and to our corporate environment. So as we continue to automate I expect our.
Okay.
And you to manage our salaries and wages will continue to keep growing average.
Revenue per head count and margins breakout at a reasonable rate.
Alright, Thank you very much.
You're welcome.
As the army to the end of our our we are going to take one final follow up from Adam Wyden with ADW capital Adam. Please proceed.
Sorry, the sorry to keep you guys all of your Eric the but at this browser and probably tired.
I guess I just want to clarify one thing on the our two things actually on the Euro calm and he said you know well ill add on the be an advocate of solid and the stock for 45 Bucks I mean look if you guys really want me to I can do it on Twitter I think I can pencil. It out why this is the triple digit stock easy today, and Thats before using our imagination of bombshells.
So by no means the my indicating that you should sell for $45, what I'm, saying is that your Apollo or some sharkey private equity firm right. Why don't you step in there by a bunch of share and make the public offer right you and I. Both know that one of the great things about being a net net take citizen and the FCC and the public markets is that like.
No. This is this is the consists of the country and this is the this is why I'm in the hedge fund business is the country of manifest destiny, if I want something I go out of Britain got it and the by Leon Black or one of the guys I'm going out and buying all these share some contracting Renaissance and Adam Wyden, all the people telling US why you know Eric can't get the stock up and he's and button and global model.
And so the 45 and look look what's happened the great Canadian gaming Apollo's feeling the company non-GAAP.
And the nice thing that your son, Patsy and right now and you you've done the unbelievable I I was just the implying that like.
There is there are there aren't the types of value opportunities I don't see a lot of companies that can do 100 of EBITDA coming out of coal bid and then have this you know and.
Right. All 500 unit franchise company owned supposedly Buffalo Wild wings Lollapalooza in front of them I mean, what the I mean, that's pretty quick and incredible and till the time, but no me and I mean I didnt.
The milling share.
Because I wanted to sort of 45 I want to sort of 400. So I don't I don't believe that I was just saying look you know I'm not that smart of the guy and if someone like me Who's got a basic like you said, we can do fifth grade math and you know get on Google can see why can't you.
Harvard and da and New York City, So I was just saying and a lucky in the.
Value Creamer guidance, you have wants a cream rises to the crop numbers don't lie people do however, you want to say it this is going to become obvious the folks and I, just I want us to be able to get the full scope of that opportunity. That's what I was saying and and and then I wanted and you can answer the other than the other question I had what you.
And you mentioned, the you know the refinance coming and and the end of December and use the roughly $400000 per month and savings that was not in my free cash flow analysis, and and exiting 2019, so as far as I can tell that's about 5 million and all the free cash flow and even a 10 multiple the one could argue why the.
Should trade at the bottom right I mean, if you're growing free cash flow of 15% of year and created a pod. That's the 20% total return on bump and that that's an acceptable terms for most investors. So I mean I could easily tell you why this thing the $5 the free cash flow and I think it will be much more out of 20 multiple of $100 stock and that's really just kind of any growth at and.
Bombs. So that's I guess, the my hunger and.
But as it relates to the refinance opportunity and that alone I mean, even if you don't believe and the multiple out of constant kind of multiple that's $50 per share at nine and nine 9 million shares outstanding that's.
What is that.
Of the hour and saw a little less than $6 the ceremony.
Some of the Doctor within the conference call I would have expected the socket. The walk by some fraction of that I don't know, 75% I mean, it's just completely ludicrous and I follow the company as well as anybody I didn't really think about a $5 million refinancing and that that's you know almost $6 of equity share folder, you don't have to do anything other than the <unk>.
Paul.
Well, we'll just keep question and that's all we can do right now and.
And the I think the loan of clothes and February not December just Oh, I was confused by that but that's okay.
But other than that everything else is very accurate I mean, and we just what is going to keep the what we do that's the you know the market of catch up Thats, what the above and says there I don't worry about the market does run your business and the market of catch up so.
The.
And we're just sit and wait for the market the catch up so in the meantime, we're taking advantage of we've taken our share count down from.
The almost fully diluted the 10.8 million back and in 2014 or 15, and we're under 9 million shares now.
And as of the filing of the K and the.
We're setting the basically on our reserve amount. So if we can continue to.
You know to keep generating cash flow.
And even with these close downs and whatnot until we get everything reopened of what we know we may have less shares outstanding.
I know, we're going to be working on the closing.
Closing on a couple of these the bombshells locations here, saying, we're working with the bank fine.
The financing on the on the real estate side of that right now.
And we'll get those started the.
And it was X of just right now the plan is just keep moving forward and we just we're focusing on.
Our day to day operations. There are open and we are focused on the on.
On adding some new locations as we move into the fiscal 21.
Well good Eric look I think you guys are doing the tremendous job and and the Bradley sounds great on the call and it sounds like you've got the as well oiled machine going so I look forward to many more of these things and especially the box and triple digits. So you know hopefully sooner rather than later.
All right well and you know when you said it was going to go to 30, I thought you're crazy nicely and 100, I think I'm just I'm, just saying, okay. We will keep doing it and you'll get US there I mean this is the thing just keeps rolling as long as we keep producing so.
And and that's less than the what we've had in the past we've had share holders that they pay and see the stock goes up they also out and I really appreciate you staying here with US now and you know you're on the.
Right side of the trade and the and.
We're going to keep the keep pushing it up and keep.
Keep growing free cash.
The fresh Eric.
Hi, Eric have a nice holiday if I don't speak the alright, alright, you too thanks a lot.
We have reached the end of our question and answer session I would like to turn it back over to the management for closing remarks.
Thank you Eric and thank you to all our investors for your questions on behalf of Eric Bradley The company and our subsidiaries. Thank you have a great day and best wishes for a happy holiday season, and new years day sales stay healthy is and always and as always please visit one of our clubs or.
Restaurants.
Thank you. This does conclude today's conference you may disconnect. Your lines at this time and the had the pleasure.
Pleasant day.
Thank you.
So.
[laughter].