Expansion Plans - As of December 31, 2024, GEN Inc. operates 43 company-owned restaurants across multiple states, with plans for continued expansion into new markets[21]. - The company plans to open 10 to 13 new locations in 2025, with a long-term goal of opening 10 to 12 new restaurants annually starting in 2026[27]. - GEN Inc. is introducing international expansion into South Korea with at least two company-owned locations slated to open in 2025[28]. - The company opened six new restaurants in 2023 and 2024, indicating ongoing expansion efforts[59]. - The company plans to continue expanding into new markets, which may lead to unpredictable operating results due to unfamiliarity with local conditions and consumer preferences[62]. Financial Performance - New restaurants opened in 2022 generated an average Payback Period of approximately 1.9 years, equating to an ROI of over 50%, while those opened in 2023 and 2024 had a Payback Period of approximately 2.2 years and an ROI of about 45%[22]. - The average Net Build-Out Costs for new restaurants increased from approximately $1.9 million in 2022 to $2.2 million in 2024, with a target of less than $3.0 million going forward[29]. - The percentage of sales for food costs increased from 32.2% in 2023 to 33.0% in 2024, while payroll and benefits costs decreased from 31.4% to 30.9%[58]. - The company’s growth strategy may be impacted by future changes in tax laws or effective tax rates, potentially reducing net returns to stockholders[59]. - The average restaurant sales and comparable restaurant sales may not increase at historical rates, impacting overall business performance[66]. Cost Management - During 2024, Sysco accounted for approximately 76.3% of food costs, highlighting the company's reliance on key suppliers for food products[35]. - The company has established a strong supplier network, with Pacific Global and Wise Universal providing significant portions of total operating expenses and food costs[34]. - The company has experienced inflationary pressures affecting costs for food, labor, and utilities, which may impact revenues and results of operations[55]. - Labor costs are a primary component of operating expenses, and increases in minimum wage could adversely affect profitability[115]. - California's minimum wage has increased routinely over the past three years, significantly impacting labor costs[122]. Regulatory and Compliance Risks - The company is subject to various federal, state, and local regulations that could delay restaurant openings or operations[43]. - Compliance with evolving nutritional labeling laws may incur additional costs and operational challenges for the company[96]. - The company is subject to various federal, state, and local regulations that could affect its ability to open new restaurants[127]. - Compliance with environmental laws may result in significant fines and penalties for noncompliance[130]. Market and Economic Conditions - Economic conditions, including unemployment and consumer confidence, significantly influence consumer discretionary spending, which could adversely affect restaurant traffic and sales[63]. - Economic conditions, such as low consumer confidence and high unemployment, could lead to decreased sales as consumers dine out less frequently[88]. - Intense competition in the restaurant industry may impact the company's financial condition, with competitors increasing their product offerings and opening new locations[84]. Operational Challenges - The company may face challenges in successfully expanding operations due to uncertainties in site selection and market conditions[60]. - The company faces risks related to supply chain disruptions, as reliance on a limited number of suppliers could lead to increased costs and shortages[77][81]. - The company may need to invest more in advertising and promotional activities in new markets to build brand awareness, potentially affecting profitability[62]. - The company relies on technology and equipment for restaurant operations, and mechanical failures could result in significant operational disruptions and financial losses[98]. Internal Controls and Governance - The company has completed remediation of two material weaknesses in internal control over financial reporting as of December 31, 2024[60]. - The company identified two material weaknesses in its internal control over financial reporting in 2023, which were remediated in 2024[185]. - The company may incur additional costs if it fails to maintain effective internal controls, which could adversely affect its financial reporting and market confidence[192]. - The company is classified as an "emerging growth company" and a "smaller reporting company," allowing it to follow reduced disclosure requirements[187]. Tax and Financial Liabilities - GEN Inc. anticipates future payments under the Tax Receivable Agreement to total approximately $99.6 million based on an assumed Class A common stock price of $12.00 per share[145]. - Payments under the Tax Receivable Agreement will be 85% of the net cash tax savings realized by GEN Inc., which could significantly reduce available cash for reinvestment or dividends[144]. - The actual amount and timing of payments under the Tax Receivable Agreement will vary based on multiple factors, including stock price and tax attributes[146]. - Future changes to tax laws could materially and adversely affect the company and reduce net returns to stockholders[153]. Cybersecurity and Data Privacy - The company has faced past security breaches and cyber incidents, highlighting the need for effective cybersecurity measures[200]. - The company is subject to numerous privacy laws, which may require significant changes to data handling practices and incur additional costs[207]. - The company has a risk management program focused on cybersecurity, with oversight from the Board of Directors[214]. Management and Leadership - The company has co-CEOs, which may lead to management challenges and affect operational efficiency[198]. - The company is dependent on the continued service of its senior management team, and their departure could adversely impact business prospects[198].

Financial Data and Key Metrics Changes - For the full year 2024, the company reported revenue of $208 million, exceeding the guidance range of $200 million to $205 million [8] - Restaurant-level adjusted EBITDA for the year was $36.9 million, with a margin of 17.7%, aligning with expectations [31] - Total adjusted EBITDA for 2024 was $16.7 million, a decrease from $18.8 million in 2023, primarily due to increased preopening costs [32] Business Line Data and Key Metrics Changes - The company opened six new restaurants in 2024, with three additional openings in January 2025, bringing the total to 46 locations [15] - Comparable same-store sales for 2024 were down 5.6% year-over-year, but early 2025 saw a return to growth with positive 1% comp figures [17][19] Market Data and Key Metrics Changes - The company experienced a 21% year-over-year total revenue growth in Q4 2024, with revenue reaching $54.7 million [12][26] - The cost of goods sold as a percentage of restaurant sales increased by 160 basis points in Q4 2024 compared to the previous year [26] Company Strategy and Development Direction - The company aims to open 10 to 13 new restaurants in 2025, with a medium-term goal of around 75 total restaurants by the end of 2026 [22][36] - The company is planning international expansion, with at least two locations in South Korea planned for 2025 [22][23] Management's Comments on Operating Environment and Future Outlook - Management noted that the business model does not rely on comparable restaurant sales growth but focuses on expanding store count [17] - The board approved a stock buyback program for up to $5 million, reflecting confidence in the company's future [19] Other Important Information - The company reported a net loss before income taxes of $1.2 million in Q4 2024, attributed to preopening costs [29] - The company maintains a healthy liquidity position with $23.7 million in cash and cash equivalents and no material long-term debt aside from government-funded loans [33][34] Q&A Session Summary - No specific questions or answers were documented in the provided content, indicating that the Q&A session may not have occurred or was not included in the records [38]

GEN Restaurant Group, Inc. (NASDAQ:GENK) Q4 2024 Earnings Call March 6, 2025 5:00 PM ET Company Participants Tom Croal - Chief Financial Officer David Kim - Chairman and Chief Executive Officer Operator Good day, and welcome to the GEN Restaurant Group, Inc. Fourth Quarter and Full Year 2024 Earnings Call. All participants will be in listen-only mode. After today's presentation, there will be an opportunity to ask questions. Please note this event is being recorded. I would now like to turn the conference o ...

Revenue Performance - Total revenue for 2024 reached $208.4 million, a 15.1% increase from $181.0 million in 2023[5] - Fourth quarter revenue grew 21.2% year-over-year to $54.7 million, compared to $45.1 million in Q4 2023[8] - Revenue for Q4 2024 reached $54.654 million, a 21.1% increase from $45.108 million in Q4 2023[29] Comparable Restaurant Sales - Comparable restaurant sales decreased 5.6% for the full year 2024 and 4.8% in Q4 2024[13][8] - Comparable restaurant sales performance declined by 4.8% in Q4 2024, compared to a decrease of 0.2% in Q4 2023[31] Profitability Metrics - Adjusted EBITDA for 2024 was $16.7 million, representing 8.0% of revenue, down from $18.8 million and 10.4% in 2023[15] - Adjusted EBITDA for Q4 2024 was $2.056 million, representing a margin of 3.8%, slightly up from 3.6% in Q4 2023[31] - Restaurant-level Adjusted EBITDA for Q4 2024 was $9.305 million, with a margin of 17.0%, compared to 16.0% in Q4 2023[34] - Net income margin for the year ended December 31, 2024, was 2.2%, down from 6.3% in 2023[31] - Net loss for Q4 2024 was $1.397 million, compared to a loss of $0.193 million in Q4 2023[29] - Adjusted net income for Q4 2024 was $(694) thousand, compared to $536 thousand in Q4 2023[36] Expenses and Financial Position - General and administrative expenses increased to $18.3 million in 2024, up from $12.6 million in 2023[13] - Total restaurant operating expenses for Q4 2024 were $49.581 million, up 21.3% from $40.878 million in Q4 2023[29] - Cash and cash equivalents as of December 31, 2024, were $23.7 million, with no material long-term debt[16] - Total assets increased to $240.415 million in 2024 from $183.870 million in 2023[31] Expansion Plans - The company opened nine new locations since March 2024, with plans to open 10-13 new units in 2025[5] - The company plans to expand internationally with at least two new locations in South Korea in 2025[5] - The number of restaurants at the end of Q4 2024 was 43, up from 37 in Q4 2023[31] Special Programs - The company initiated a successful gift card program with Costco in 2024[5]

Core Insights - GEN Restaurant Group, Inc. reported total revenue of $208.4 million for 2024, marking a 15% increase year-over-year and exceeding the company's guidance and analysts' expectations [4][7][12] - The company achieved a restaurant-level adjusted EBITDA margin of approximately 18% for 2024, consistent with its outlook [4][7] - Comparable restaurant sales for Q1 2025 have shown a positive growth of 1% through the end of February, a 6% improvement compared to Q4 2024 [1][5] Financial Performance - Total revenue for Q4 2024 was $54.7 million, a 21.2% increase from $45.1 million in Q4 2023 [7][8] - Adjusted EBITDA for Q4 2024 increased by 25% to $2.1 million, representing 3.8% of revenue, while for the full year, adjusted EBITDA was $16.7 million, or 8% of revenue [7][16] - The net income before income taxes for the full year was $4.9 million, equating to $0.13 per diluted share of Class A common stock [15][27] Operational Highlights - The company opened nine new locations since March 2024, including six in 2024 and three in early 2025, with plans to open an additional 10-13 new units throughout 2025 [5][7] - GEN is expanding internationally, with at least two new restaurants planned to open in South Korea in 2025 [5][7] - As of December 31, 2024, the company had $23.7 million in cash and cash equivalents and no material long-term debt, positioning it well for future growth [17][29] Cost Management - Total restaurant operating expenses as a percentage of revenue decreased to 86.6% in Q4 2024 from 87.2% in Q4 2023 [9] - General and administrative expenses increased to $5.6 million in Q4 2024, primarily due to additional personnel for new restaurant development [9][12] - Restaurant pre-opening expenses rose to $2.3 million in Q4 2024 from $1.6 million in Q4 2023, reflecting the higher volume of new store openings [13][14]

Core Viewpoint - GEN Restaurant Group, Inc. will hold a conference call on March 6, 2025, to discuss its financial results for Q4 and the full year ended December 31, 2024 [1]. Company Overview - GEN Korean BBQ is one of the largest Asian casual dining restaurant concepts in the United States, founded in 2011 by two Korean immigrants in Los Angeles [3]. - The brand has expanded to over 40 company-owned locations, offering a unique dining experience where guests grill their own meals at the table [3]. - The menu features traditional Korean and Korean-American dishes, including high-quality meats, poultry, seafood, and mixed vegetables [3]. - The restaurant's modern décor and lively atmosphere create an engaging and interactive dining experience appealing to a broad customer base [3]. Conference Call Details - The conference call will be hosted by Chairman and CEO David Kim and CFO Tom Croal, followed by a Q&A session [2]. - The call is scheduled for March 6, 2025, at 5:00 p.m. Eastern time, with a toll-free dial-in number provided for participants [2]. - A live webcast of the conference call will be available, along with a replay option through the investor relations section of the company's website [3].

Core Insights - GEN Restaurant Group, Inc. has opened a new restaurant location in San Antonio, Texas, marking its third opening in January 2025, following successful launches in Edison, New Jersey, and Orlando, Florida [1][2] Company Expansion - The new San Antonio location is part of GEN's strategy to expand its presence in Texas, where existing locations have performed strongly [2] - The company aims to continue its growth momentum throughout 2025, having started the year with three successful openings [2] Unique Dining Experience - GEN Korean BBQ offers a distinctive "grill at your table" experience, which aligns well with San Antonio's rich food culture and love for barbecue [2] - The restaurant features an extensive menu that includes traditional Korean and Korean-American dishes, allowing guests to prepare their meals on embedded grills [4] Company Background - Founded in 2011, GEN Korean BBQ has grown to over 40 company-owned locations across the United States, making it one of the largest Asian casual dining concepts in the country [4] - The brand is known for its engaging and interactive dining experience, appealing to a wide demographic [4]

Core Insights - GEN Restaurant Group, Inc. is expanding its operations by opening two new locations in Edison, New Jersey, and Orlando, Florida, as part of its national expansion strategy [1][2]. Expansion Strategy - The CEO of GEN, David Kim, expressed satisfaction with the progress of the company's national expansion plans, highlighting the importance of reaching new audiences in New Jersey and Florida [2]. - The Edison location is strategically chosen for its cultural richness and culinary scene, aligning with GEN's goal to introduce its "grill at your table" concept in key markets [2]. - Orlando's diverse population and status as a tourist destination make it an ideal market for GEN, aiming to attract both locals and visitors seeking unique dining experiences [3]. Location Details - The Edison, New Jersey location is situated in Festival Plaza and operates from 11:00 a.m. to 10:30 p.m. Monday to Thursday, and 11:00 a.m. to 11:00 p.m. Friday to Sunday [4]. - The Orlando, Florida location is located in Waterford Lakes Town Center, with operating hours from 11:00 a.m. to 10:30 p.m. Sunday to Thursday, and 11:00 a.m. to 11:30 p.m. Friday to Saturday [4]. Company Overview - GEN Korean BBQ is one of the largest Asian casual dining restaurant concepts in the U.S., founded in 2011, and has grown to over 40 company-owned locations [6]. - The restaurant offers a unique dining experience where guests prepare their meals on embedded grills, featuring a menu that includes traditional Korean and Korean-American dishes [6].

Leadership Changes - Co-Founder Jae Chang has stepped down as Co-CEO effective January 8, 2025, but will remain on the Company's board [1] - David Kim, the Chairman and Co-CEO, is now the sole CEO of the Company [1] Company Overview - GEN Korean BBQ is one of the largest Asian casual dining restaurant concepts in the United States, founded in 2011 [3] - The brand has grown to over 40 company-owned locations, offering a unique dining experience where guests prepare meals on embedded grills [3] - The menu features traditional Korean and Korean-American food, including high-quality meats, poultry, seafood, and mixed vegetables [3] Future Outlook - David Kim expressed confidence in continuing the growth strategy and building upon the foundation laid by Jae Chang [2]

Financial Data and Key Metrics Changes - Total revenue for Q3 2024 was $49.1 million, representing an increase of nearly 8% year-over-year from $45.6 million in Q3 2023 [10][27] - Net income was $0.2 million or $0.01 per diluted share, compared to $2.6 million or $0.08 per diluted share in Q3 2023 [32] - Adjusted net income was $0.9 million or $0.03 per diluted share, exceeding estimates that predicted a loss for the quarter [10][32] - Adjusted restaurant-level EBITDA margin was slightly over 18%, consistent with expectations for the quarter [12][33] Business Line Data and Key Metrics Changes - Same-store sales growth declined by 9.6% year-over-year, impacted by external factors such as hurricanes and extreme weather [13][14] - Restaurant-level adjusted EBITDA margin was maintained above 18% for Q3 2024 [33] Market Data and Key Metrics Changes - The consumer environment remained mixed, with ongoing inflationary pressures affecting discretionary spending [13] - The company experienced temporary disruptions due to hurricanes and extreme summer heat, which affected customer traffic [14] Company Strategy and Development Direction - The company aims to open 10 to 11 new restaurants in 2024, with a long-term goal of reaching 75 to 80 locations by the end of 2026 [20][21] - Initiatives include a gift card program launched at Costco, which has seen strong sales and is expected to enhance brand visibility [22][23] - The company is testing new concepts like GEN Grills and participating in outdoor fairs to drive additional sales [15][46] Management's Comments on Operating Environment and Future Outlook - Management noted improvements in October and November, with a reduction in negative same-store sales by at least 50% compared to Q3 [41][51] - The company remains confident in its growth trajectory, citing strong performance from new restaurant openings and a robust pipeline of future locations [21][25] Other Important Information - The company maintained a healthy balance sheet with $22.1 million in cash and cash equivalents and no long-term debt, except for government-funded loans [34] - Total adjusted EBITDA for Q3 was $3.4 million, down from $5 million in Q3 2023, primarily due to increased G&A and preopening costs [33] Q&A Session Summary Question: Trends in same-store sales and improvements in October and November - Management acknowledged various factors contributing to negative sales in Q3, including high-volume restaurant shutdowns and external weather impacts, but noted improvements in the first six weeks of Q4 [39][41] Question: Success factors for new restaurant openings - Management expressed surprise at the performance of new units, attributing success to focused management and operational details [43][44] Question: Investment trade-offs for new initiatives - Management clarified that new initiatives are aimed at revenue generation rather than marketing opportunities, with a focus on increasing sales through various channels [46][48] Question: Magnitude of improvements in October and November - Management indicated that negative same-store sales have improved by at least 50% compared to Q3, with both traffic and premium menu sales contributing to this improvement [51] Question: Premium menu mix and future goals - The premium menu currently represents about 5% of total sales, with a goal to reach 10% [53] Question: Margin performance and sustainability - Management highlighted ongoing focus on operational details as key to maintaining improved margins, with stable commodity prices contributing to better food cost management [55][56]