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Santikos Military - 2020 is a disappointing year for cinemas. During the pandemic, home office has declined by 80% since 2019, as actors stay at home, opting to watch services and movies on streaming platforms like Disney Plus, Netflix, and Amazon Prime.

Locally, San Antonio-based Santicos Enterprises has also been heard about, despite being open since May with COVID-19 safety measures such as weekly virus testing for employees, and cleaning and sanitizing of its theaters. According to CEO Tim Hendren, a typical year of revenue would range from $110 to $115 million dollars. Last year's usage was only a third of that. Not only is this bad for the open market, but it also means no profits are funneled into the San Antonio Area Foundation, which Santikos Video contributes to under the direction of the late owner, John L. Santocos.

Santikos Military

Looking ahead to 2021, Hendren said, "If we can get back to where we were at 50 percent before, that's great."

Santikos Hopes For 2021: '50 Percent Of Normal'

Vaccination means that there is light at the end of a long darkness, but what about the other side? A few days before Christmas I spoke with Tim Hendren on Zoom. We began our discussion by discussing the details of the federal Street Lending Program and the $50 million loan Santicos received in December from a local sponsor, The Bank of San Antonio. Hendren also offers changes in the company's future expansion plans, and mentions new security measures in theaters: "We're innovating in a very different way. ...It's around noise and predictability." It's not around, it's around the safety and security of our guests and our employees."

This post has been edited for clarity and length. To listen to the full interview, use the audio link at the top of this story.

Nathan Cone: I'll start with using video. In "Philadelphia," Denzel Washington is saying all the time, "Okay, explain to me like I'm six years old." And so I want to start like this. Explain to me like a six year old. What does a $50 million loan from the Bank of San Antonio do for Santikos' books now, and in the near future?

Tim Hendren: So let me give you a little background on where we were before we got the loan. So when John Santikos died in 2014 and left this gift to the community, his businesses, his real estate business, the arts, it was not without cost. John left several hundred million dollars in debt to build the theater. So let's fast forward to 2020. We are still indebted to many of these performances. And because we live in an industry where companies feel a lot of stress, they see us as ... banking, they call it "work" or "special assets". Property is a certain way of behaving, we think you have a problem and we don't think you will. And so what they do - it's a business practice, I don't pass judgment - but what they do is they like to look at the health of the company first and they say we should cut as much as possible. To pay off your debts from your company... at a time when we were trying to follow the company to keep all our cash, cut off all our debts and just hang on and survive. Many people in the entertainment industry, hotel business, bars, restaurants have done the same. So, our bankers are just breathing down our necks saying "You have to pay your debts."

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And we looked at these loans. It's actually called a Main Street loan from Bank of San Antonio as our sponsoring bank. But the truth is that the loan came from the Federal Reserve System in Boston. They said, "We want to provide a bridge for companies that need it. We know you're going to have debt or you're going to have debt that you can't pay anymore. We'll lend you up to $50 million. What we're going to do. What we're going to do with the loan is we won't require you to pay principal and interest for the first year. That's about six million dollars a year with our instant loans. That's what we Having to pay once. It is difficult when our income is high, so get this loan, what it allows us to do is to pay the lender who gave us to pay our debt, and continue to pay. To keep, or help with our debt. It allows us to defer for one year without paying interest, without money, and the second year we pay only interest, and so that will be our time. So from the cash flow, I don't have to pay the debt. I can use whatever cash we have to land our employees. pays for and pays our operating expenses. But I don't have to worry about paying for T. limit for the next 12 months and interest only for the additional 12 months. This is a big deal.

You said a while back that there was a federal loan behind it, but the Bank of San Antonio had to approve it for you... is that how it works?

We needed to find a bank that was willing to work with us... and the Bank of San Antonio... they leaned in at a time when we needed them because they felt our business was good, we were a strong company yes And when they wrote to us earlier in the year, they liked what they saw. So, yes, they are a bank sponsor to get us through the Federal Reserve application process and they have little risk. They carry about five percent of the risk of all loans. They don't risk the entire $50 million. They actually brought in two and a half million dollars.

In addition to its theaters, Santikos has many buildings throughout the community. Is it something that can be used for future loan payments?

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Buyers have debts owed to them. When I talk about Bank of San Antonio who knows us well ... we refinanced a lot of our real estate debt around the mall with Bank of San Antonio in early [2020]. And that's how they really understand our business practices and business. So they are already leveraged. Again, that's part of the $200 million in debt that John left behind, which is part of it.

Looking ahead to 2021, what income do you need to generate, and hope to generate in the future to ensure a stable path to future employment and loans? (Although they are useful in the first few years of content.)

This is the crystal that everyone is trying to get out. What will happen in 2021 in terms of consumer behavior? If we can get 50 percent back to normal by the end of 2021, that would be great. In a typical year, we'll do about $110 to $115 million in gross revenue. And if we can get back to where we are at 50 percent, that's fantastic. This will put us in a position where we keep track of all our expenses and our expenses are low. And then we can help go back to the San Antonio Area Foundation, the benefits of our work.

I was talking about this at lunch with my family, and I said it looks like one day Newman's Own can't sell their pasta and salad dressing, and sales go down. And so they were unable to contribute to the foundation that Newman laid. Is this a good comparison for all of this?

Santikos Casa Blanca Theatre

This is a perfect example, because, again, when John Santikos died, he left his two businesses, the real estate business and the theater business, in trust to be controlled by management, but the results of these activities have returned. . All ways to redistribute district foundations to the community. If you look at what we've done in the last couple of years since John's death, just over $63 million has gone back into the community in the form of profits or capital gains, well, that's a very valuable thing as a source of income. of Food in continuous community. This year we will make zero contribution as it is a loss year for this business.

What is Santikos doing to try to bring people back to the theater? What are your plans for 2021 to make people comfortable? I mean, the reaction will