Ryman Hospitality Properties, Inc. (RHP) Earnings Call Transcript & Summary

Welcome to the 2021 Ryman Hospitality Properties, Inc. Annual Meeting of Stockholders. I would now like to introduce the first presenter, Scott Lynn, Presiding Officer at today's meeting.

Good morning. I'm Scott Lynn, the Executive Vice President and General Counsel of the company and the Presiding Officer at today's meeting. I would like to welcome you and formally convene the 2021 Annual Meeting of Stockholders and call the meeting to order. I would now like to recognize Colin Reed, the Chairman and Chief Executive Officer of the company.

Good afternoon, and thank you for joining us today at our Annual Stockholder Meeting. In typical fashion, I'll begin today by introducing our Board, all of whom are here with us at the Gaylord Palms in person, except one who is attending virtually. Then we will take care of some formal administrative items, including voting on the matters outlined in the proxy statement. And while we are tabulating your votes, I will provide you with some of my thoughts about 2020. Then we will close with some additional formalities, including the announcement of the results of the vote. So with that in mind, allow me to first introduce our Board members and nominees for Director that were included in the 2021 proxy statement for consideration by our shareholders. First, Rachna Bhasin, who is Founder and CEO of EQ Partners; Alvin Bowles, who is Vice President, Global Marketing Solutions for Facebook. Christian Brickman, who is the President and CEO of Sally Beauty Holdings, Inc. and a first-time nominee for Director of our company. Welcome, Christian. Fazal Merchant, who is Director of Ariel Investments and a private consultant; Patrick Moore, who is Executive Vice President, North America Retail for Carter's Inc.; Christine Pantoya, who is the CFO of Omnichannel Acquisition Corp.; and Bob Prather, who is President and CEO of Heartland Media and Allen Media Broadcasting. I would also like to recognize Michael Roth, the Executive Chairman of Interpublic Group of Companies and a long-standing Director of our company, who is not standing for reelection to our Board. And I'll have a few more words to say about Mr. Roth in a minute. So thank you, Directors. I would also like to recognize Brent Wyper, a representative of Ernst & Young, our auditor, who is also here with us today. Stockholders will have an opportunity to meet with me and our management, the members of our Board and with representatives of E&Y following conclusions of the meeting. As a reminder, our stockholders are always free to reach out to me or other members of our management at any time if there is any issue that you wish to raise with our company. It is now time for the formal business portion of our meeting. I want to acknowledge the appointment of [ Ken Frank ] of Broadridge, now the Inspector of Elections for today's meeting. He will determine the presence of a quorum and will serve as in charge of voting on all matters requiring stockholder vote at this meeting. Mr. Lynn will serve as the Secretary of the annual meeting this morning. The Secretary has a list of all stockholders entitled to vote at this meeting and has demonstrated the proper notice of the meeting was given to all stockholders of record as of the close of business on March 26, 2021. Scott, have you determined whether a quorum is present?

Yes. The Inspector has informed me that the shareholder list shows that holders of 55,049,856 shares of common stock of the company are entitled to vote at the meeting. They are represented in person or by proxy of 49,430,752 shares of common stock or approximately 90% of all the shares entitled to vote at the meeting. A quorum is therefore present, and I declare that this meeting is legally convened and ready to transact business. I recognize Colin.

Thank you. We are convened today to vote on the following 3 proposals properly brought before the meeting by the company. One, to elect as directors the 8 nominees identified in the proxy statement, Rachna Bhasin, Alvin Bowles, Christian Brinkman, Fazal Merchant, Patrick Moore, Christine Pantoya, Bob Prather and Colin Reed to serve until the next annual meeting of the stockholders and until their successors are duly elected and qualified. To approve -- second, to approve on an advisory basis the company's executive compensation program. And three, to ratify the appointment of Ernst & Young LLP as the company's independent registered public accounting firm for the 2021 fiscal year. I now declare the polls of this meeting to be open to vote upon the 3 proposals presented by the company. If any of you present today in person have a ballot to turn in, I ask you to do so at this time. After the votes are counted, I will ask Scott to announce the results of the voting. While the votes are being tabulated, I want to share some thoughts about 2020. Last year was, without question, the most difficult and unusual year of my long career in the hospitality industry. In Nashville, the year started with a series of tornadoes that created widespread destruction. Soon after those events, our nation felt the impact of the global pandemic that we now know affectionately as COVID-19. And if that's not bad enough, in Nashville, a Christmas Day bomb created massive damage to our historic Second Avenue downtown. This series of events was unlike anything any of us have experienced in our lifetimes. And I'm very proud of the way our leaders have navigated this last year. Our team, by and large, has led this organization for almost 2 decades. And in that time, they have been so successful navigating our company through many difficult periods such as 9/11, the global financial crisis of 2008, the great flood in Nashville in 2010. And just like these previous crises, I expect Ryman Hospitality Properties to emerge from the current challenges a stronger and more resilient company. Throughout these difficult times, we've tried to be as transparent as we can because we believe our people, our communities and our shareholders need to know and understand the actions we have taken as we navigated through these very unusual times. As a company, we were decisive on swiftly closing our hotels as well as our entertainment businesses to protect the health of our employees and our customers. Early on in the pandemic, we made the decision to retain most of our sales folks in our hotels so they could work with the meeting planners and our customers, to rebook canceled business for sometime in the future. This was a really good decision because to date, we've rebooked just about 63% of all canceled room nights. Within our Entertainment business, even though all of our venues were closed to live audiences, we decided to hold a weekly Grand Ole Opry show audience free. I find it remarkable that since we adopted this course of action, the Saturday Opry show has been streamed over 60 million times. As you may know, we launched Circle TV on January 1, 2020. With folks locked at home -- in their homes since mid-March of last year, our distribution of this platform has grown tremendously, not only through our partnerships with Gray and other local affiliates but also on digital platforms like Roku and Peacock. At this time, our Circle network is available to about 150 million users across these digital platforms based on publicly reported data. Due to the great work that our finance team undertook with our banks both in '19 and during last year, we had ample liquidity to weather this once-in-a-lifetime event. And I'm very excited and optimistic about Ryman's prospects as the nation recovers from COVID. It is our strong belief that over the coming months, consumers across the nation will be returning to the things they love, be they conventions, vacations, concerts or watching their favorite sport team. Certain organizations, particularly those who have treated their customers and their employees well during this last year, have a chance to grow their market share. We see ourselves in that group. And with the things that we have learned through COVID, we are optimistic that we will be a stronger company in a year from now than we were a year ago. We have so many good things ahead of us as the consumer returns to our hotels, including a new expansion here at the Gaylord Palms, a renovated Gaylord National and the continued maturity of Gaylord Rockies and now 100% control of that asset that we announced last week, SoundWaves at Gaylord Opryland and the Gaylord Texas expansion. And we also had a strong book of group business for the back half of this year and the following several years. In regards to our leisure offerings, our resort's physical attributes and programmatic qualities are exceptional and are primed to take advantage of the surge in leisure business as consumers become confident in travel. In our Entertainment business, we also have lots of opportunity, be they maturity of our Circle network or the expansion of our Ole Red brand and the continued expansion of the digital distribution of the Grand Ole Opry performances. Indeed, we're very excited about our future and are quickly putting this last year behind us. As I reflect on this last year, I'm extremely proud of the work our Board has done. Our management team has performed. Our partners and employees rose to the occasion despite the sense of loss that we've all felt at different times over these last 14 months. Everyone on our team has made significant personal sacrifices that allowed us not only to navigate the early days of the crisis but also to record some meaningful accomplishments throughout this year. On a final note, I want to recognize Michael Roth. As you know, Michael is not standing for reelection to our Board this year. But the good news for the company and for me personally is we have created a Director Emeritus role for Michael and convinced him he needs to stay around the hoop. So our hope is we're able to draw on his extraordinary experience from time to time as well as his deep knowledge of our company. While the road to recovery on this pandemic is likely to be longer than anyone would have imagined back in March of 2020, the light at the end of the tunnel has already got significantly brighter, and better days are just around the corner. Now back to the formal part of the meeting. Scott, will you share the voting results?

Thanks, Colin. All ballots have been received and the polls are now closed. And the results show that each of the 8 directors nominated by the Board for election have received the requisite number of votes cast for election; that with respect to the approval on an advisory basis of the company's executive compensation program, 90% of the votes cast today voted in favor of approval; and that with respect to the ratification of the company's independent registered public accounting firm for 2021, 99.5% of the votes cast today voted in favor of ratification. All of the 3 proposals before you today submitted by the company have passed and are duly adopted. Final voting results will be published in an 8-K to be filed with the SEC on Monday, May 17. I will now entertain a motion for adjournment of the formal business portion of the meeting.

So moved.

Got a second?

Second.

All in favor.

Okay. So thank you, Scott. We have received 3 questions online, which I will do my best to answer. The first one is if things continue to improve, could you estimate when we will start paying dividends? The answer to this question is it's very difficult to know precisely when that will happen. But I'm pretty confident that it's going to happen sometime in the not-too-distant future. The reason is things are changing at such a rapid pace here all positively across the country, and we're seeing it in our business. The issue for us paying dividends is, one, we've got a bit of a job to do here over the next 12 months to delever the company's balance sheet. That is a function of how much cash flow we generate in our businesses. But there is a desire by the management and the Board to return paying dividends as quickly as we possibly can. The second question is along the same lines. This one is a little bit more colorful. If stockholders get no dividends, what cuts are being made to directors and upper management's compensation to conserve resources? The way I would answer this question is I think we -- as an organization, last year, we were extremely -- I think we were extremely thorough in managing the cash flows of the company and the problems that we were facing. Both the Board and the management took pay cuts. And I can tell you, there was a lot of sacrifices made with this company to get us back -- to stabilize the organization. The other thing I would say on this subject is this, that if you go back and look at the way our company has performed from a shareholder-friendly perspective, if you go back and you look on -- from 2019 or on a 1-year, 3-year, 5-year, 8-year basis, we generated the best shareholder returns in the segment that we operate in. And so it is our desire to continue to do that over the period ahead. And we will be a responsible organization as it relates to fairness with our shareholders. So that's the way I would answer that question. The third one, will management commit to opposing efforts of "left-wing activists" to impose cancel culture standards on the company, on the company's managers and other employees? Look, we operate today in a very different world than we operated in 10, 15 years ago world. And our Board and our management will always do what we think is in the best interest of the people that come to work for this organization, the customers that reward us for their loyalty. And so that's how I would answer that question. Scott, are there any more questions?

There are no more questions, Colin.

No more questions? Since there are no more questions, the meeting is formally adjourned. And thank you for your time today.

And operator, you may disconnect.

The 2021 Ryman Hospitality Properties Inc. Annual Meeting of Stockholders. [Audio Gap] Thank you for attending. You may now disconnect.