Core Viewpoint - GEN Restaurant Group, Inc. continues its expansion in Texas, opening its eighth restaurant in 2025, indicating strong performance and progress towards its expansion goals [1][2]. Group 1: Expansion and Growth - The new GEN Korean BBQ location in Waco, Texas, is part of the company's strategy to share its all-inclusive, value-focused dining experience with more communities [2]. - The Waco location is strategically positioned near Baylor University, allowing access to a diverse demographic [2]. Group 2: Company Overview - GEN Korean BBQ is one of the largest Asian casual dining concepts in the U.S., founded in 2011, and has grown to over 40 company-owned locations [3]. - 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 [3].

Core Insights - GEN Restaurant Group, Inc. has opened its first international location in Ilsan, South Korea, marking a significant milestone in its global expansion strategy [1][2] - The company aims to honor its cultural heritage while enhancing its domestic offerings by introducing authentic Korean flavors to the international market [2] - The Ilsan location is the first of three planned international sites in South Korea, indicating a strategic approach to growth in a competitive dining market [3] Company Overview - GEN Korean BBQ is one of the largest Asian casual dining concepts in the United States, founded in 2011 by two Korean immigrants in Los Angeles [3] - The brand operates over 40 company-owned locations, offering a unique dining experience where guests grill their own meals at the table [3] - The menu features a wide range of traditional Korean and Korean-American dishes, appealing to a diverse customer base [3]

Financial Data and Key Metrics Changes - In Q1 2025, the company reported a 13% year-over-year increase in total revenues to $57.3 million, driven by restaurant expansion and existing location success [5][18] - Same store sales decreased by 0.7% in Q1 2025, a significant improvement from a 5.6% decline in 2024 [6][7] - Restaurant level adjusted EBITDA margin was 15.6%, slightly below the annual goal of 17-18% due to costs from new openings [7][20] - The company experienced a net loss before income taxes of $2.1 million in Q1 2025, compared to a net income of $3.8 million in Q1 2024, which included a one-time gain [22][23] Business Line Data and Key Metrics Changes - The company opened six new restaurants in Q1 2025, increasing the total to 49 locations, with plans for 12-13 new stores by February 2026 [6][28] - Adjusted EBITDA for Q1 2025 was $1.2 million, down from $6.4 million in Q1 2024, but improved when excluding a one-time gain [23][24] Market Data and Key Metrics Changes - The company is expanding into South Korea, planning to open three new restaurants in 2025, with the first expected by the end of Q2 [15][16] - The construction cost for new units in South Korea is projected to be 25-30% lower than in the US, enhancing potential returns [58] Company Strategy and Development Direction - The company focuses on a value-priced all-inclusive dining model, which is expected to support long-term growth [5][18] - Initiatives include enhancing training programs, expanding gift card sales through major retailers, and testing dual concept stores [11][12][13] - The company is prepared to pause new unit expansion if tariffs significantly impact construction costs [17][50] Management's Comments on Operating Environment and Future Outlook - Management acknowledged macroeconomic pressures affecting consumer demand, particularly in recent months [32][33] - The company remains confident in achieving revenue targets of $245-250 million for 2025 and an annual run rate approaching $300 million by year-end [16][28] Other Important Information - The company has a strong liquidity position with $15.4 million in cash and only $5 million in long-term debt [24][27] - The founding group retains 85% ownership, aligning their interests with public shareholders [25] Q&A Session Summary Question: Can you discuss same store sales progression in Q1 and current trends? - Management noted strong performance in January and February, but a slight decline in March and continuing negative trends in April and May [32][33] Question: What gives confidence in achieving the 17-18% EBITDA margin target for 2025? - Management indicated that Q1 is typically the lowest quarter and expects to improve margins as the year progresses [47][48] Question: What are the expectations regarding the impact of tariffs on new builds? - Management expressed uncertainty about price increases for equipment and materials from China but is prepared to pause construction if necessary [50][51] Question: How are the new restaurant openings performing? - Management stated it is too early to assess performance, with mixed results from the new locations [52] Question: Can you break down Q1 performance in terms of average check versus traffic? - Management reported a 2.5% increase in average check but a 10-11% reduction in customer traffic, resulting in a less than 1% overall decline [56] Question: What are the expectations for the South Korean market? - Management highlighted the competitive landscape and lower construction costs, indicating potential for strong returns despite economic pressures [58][60] Question: What is the current redemption rate for gift cards? - Management reported stabilization around 65%, with indications that gift card users tend to spend more during visits [61][62]

Financial Data and Key Metrics Changes - In Q1 2025, the company reported a 13% year-over-year increase in total revenues to $57.3 million, driven by restaurant expansion and success in existing locations [5][19] - Same store sales decreased by 0.7% in Q1 2025, a significant improvement from a 5.6% decline in 2024 [7] - Restaurant level adjusted EBITDA margin was approximately 15.6%, slightly below the annual goal of 17-18% due to costs from new restaurant openings [7][19] - The company reported a net loss before income taxes of $2.1 million, compared to a net income of $3.8 million in Q1 2024, which included a one-time gain [21][22] Business Line Data and Key Metrics Changes - The company opened six new restaurants in Q1 2025, increasing the total to 49, with plans to open 12-13 new stores by February 2026 [6][16] - Adjusted EBITDA for Q1 2025 was $1.2 million, down from $6.4 million in Q1 2024, but adjusted EBITDA excluding one-time gains was $3.3 million, only slightly down from $3.6 million in Q4 2024 [22] Market Data and Key Metrics Changes - The company is expanding into South Korea, planning to open three new restaurants in 2025, with the first expected to open by the end of Q2 [15][16] - The construction cost for new units in South Korea is projected to be 25-30% lower than in the US, providing compelling potential returns [55] Company Strategy and Development Direction - The company focuses on a value-priced all-inclusive dining model, which is expected to support long-term growth [5] - The dual concept store model, combining Jen and Con Sushi, aims to capture more customers and improve operational efficiency [13][14] - The company is exploring partnerships for gift card sales to enhance brand strength and customer engagement [12] Management's Comments on Operating Environment and Future Outlook - Management acknowledged macroeconomic pressures affecting consumer demand, particularly in early 2025 [30][31] - The company remains confident in achieving its revenue target of $245-250 million for 2025 and aims for an annual run rate approaching $300 million by the end of the year [16][26] - Management is prepared to pause new restaurant development if tariff-related cost increases significantly impact ROI [17][47] Other Important Information - The company has a strong liquidity position with $15.4 million in cash and only $5 million in long-term debt [23][25] - The founder's ownership of 85% aligns their interests with public shareholders, supporting long-term growth strategies [24] Q&A Session Summary Question: Can you discuss same store sales progression in Q1 and current trends in Q2? - Management noted strong performance in January and February, but a slight decline in March and continued negative trends in April and May [30][31] Question: What gives confidence in achieving the 17-18% EBITDA margin target for 2025? - Management indicated that Q1 is typically the lowest quarter and expects to improve margins as the year progresses [43][44] Question: What are the expectations for build costs in 2025 amid tariff impacts? - Management expressed uncertainty about price increases for kitchen equipment and construction materials from China, indicating a potential pause in construction if costs rise significantly [47][48] Question: How are the new restaurant openings performing? - Management stated it is too early to assess performance, with mixed results from the new locations [49] Question: Can you break down Q1 performance in terms of average check versus traffic? - Management reported a 2.5% increase in average check but a 10-11% reduction in customer traffic, resulting in a net decline of less than 1% [52] Question: What are the prospects for the South Korean market? - Management highlighted the competitive landscape and lower construction costs, indicating a cautious but optimistic approach to expansion in South Korea [55][56] Question: What is the current redemption rate for gift cards? - Management indicated that the redemption rate has stabilized around 65%, which is above the industry average [58]

Restaurant Expansion - GEN Restaurant Group opened six new restaurants in Q1 2025, bringing the total to 49 locations, up from 39 in Q1 2024[155]. - The company expects to open a total of 12 to 13 locations in fiscal year 2025[143]. - The company opened six new restaurants in Q1 2025, all of which were self-funded[192]. - The number of restaurants open increased to 49 in the three months ended March 31, 2025, from 39 in the same period of 2024[172]. Financial Performance - Revenue for the three months ended March 31, 2025, was $57.3 million, an increase of $6.5 million or 13.0% compared to $50.8 million in the same period of 2024[172]. - Comparable restaurant sales decreased by 0.7% for the three months ended March 31, 2025, compared to a decline of 1.8% in the same period of 2024[154]. - Adjusted net income attributable to GEN Restaurant Group, Inc. was $216,000 for Q1 2025, down from $383,000 in Q1 2024, reflecting a decrease of approximately 43.5%[190]. - Net loss for the three months ended March 31, 2025, was $1.964 million, a decrease of $5.662 million or 153.1% compared to a net income of $3.698 million in 2024[172]. Expenses and Costs - Total restaurant operating expenses increased by $7.2 million or 15.6%, reaching $53.1 million for the three months ended March 31, 2025, compared to $45.9 million in 2024[172]. - General and administrative expenses rose by $1.7 million or 36.3%, totaling $6.4 million for the three months ended March 31, 2025, compared to $4.7 million in 2024[179]. - Pre-opening costs increased by $747 thousand or 39.3%, amounting to $2.6 million for the three months ended March 31, 2025, compared to $1.9 million in 2024[178]. - Food costs increased by $2.3 million or 13.5%, totaling $19.3 million for the three months ended March 31, 2025, compared to $17.0 million in 2024[173]. - Occupancy expenses rose by $0.8 million or 18.6%, reaching $5.1 million for the three months ended March 31, 2025, compared to $4.3 million in 2024[175]. Cash Flow and Financing - Net cash provided by operating activities was $2.154 million in Q1 2025, down from $3.514 million in Q1 2024, representing a decrease of approximately 38.7%[201]. - Net cash used in investing activities was $6.829 million in Q1 2025, slightly lower than $7.076 million in Q1 2024[204]. - Net cash used in financing activities was $3.636 million in Q1 2025, compared to $947,000 in Q1 2024, indicating a significant increase in financing outflows[205]. - As of March 31, 2025, the company had $15.4 million in cash and negative working capital of $13.0 million, compared to $23.7 million in cash and negative working capital of $7.2 million as of December 31, 2024[191]. - The company had $9.2 million in contractual obligations related to debt as of March 31, 2025, which are expected to be paid within the next 12 months[206]. Credit and Debt - A $20 million line of credit was established with PCB bank, maturing on September 25, 2025, with a variable interest rate of 7.75%[144]. - The company is exposed to market interest rates through its line of credit, which is tied to the Wall Street Journal Prime Rate plus 0.25%[220]. Strategic Outlook - The company has a target Payback Period of less than 3 years for new restaurant units, equating to an ROI of 33% to 40%[142]. - The company expects to pay approximately $99.6 million under the Tax Receivable Agreement through 2037, based on anticipated tax benefits[196]. - The company assessed its financial condition and results of operations in conjunction with its quarterly and annual reports filed with the SEC[140]. - Adjusted EBITDA and Adjusted EBITDA Margin are key performance measures, although specific figures were not disclosed in the provided content[147]. Market Conditions - The company has partially offset inflation and cost changes by gradually increasing menu prices and improving purchasing practices[219]. - There is uncertainty regarding the ability to continue offsetting future cost increases with menu price increases[219]. - Competitive conditions may limit menu pricing flexibility, impacting sales growth[219]. - Macroeconomic conditions could render additional menu price increases imprudent[219]. - The company is classified as an "emerging growth company" and is utilizing certain exemptions from reporting requirements under the JOBS Act[214]. Performance Metrics - Average Unit Volume (AUV) for the twelve months ended March 31, 2025, was $5,403, a decrease from $5,842 in the previous year[151]. - Restaurant-Level Adjusted EBITDA was $8.959 million for the three months ended March 31, 2025, compared to $8.433 million in 2024, reflecting an increase of $526 thousand or 6.2%[188]. - Adjusted EBITDA for the three months ended March 31, 2025, was $1.249 million, a decrease of $1.715 million or 57.8% compared to $2.964 million in 2024[184]. - No impairment charges were recorded for long-lived assets in any of the periods presented[144].

Core Insights - GEN Restaurant Group, Inc. reported a strong start to 2025 with the opening of six new restaurants, including a dual-concept location in Austin, Texas, combining GEN Korean BBQ and Kan Sushi [4][8] - The company anticipates total revenue for the year to be between $245 million and $250 million, with a restaurant-level adjusted EBITDA margin projected between 17% and 18% [5][8] - Despite a cautious consumer spending environment, the company achieved a 13% increase in total revenue year-over-year for Q1 2025, reaching $57.3 million compared to $50.8 million in Q1 2024 [6][8] Financial Performance - Total revenue increased by 13.0% to $57.3 million in Q1 2025 compared to $50.8 million in Q1 2024 [6][8] - Restaurant-level adjusted EBITDA rose by 6.0% to $9.0 million from $8.4 million in the prior year [8] - The company reported a net loss before income taxes of $2.1 million, equating to $(0.06) per diluted share, compared to a net income of $3.8 million or $0.11 per diluted share in Q1 2024 [11][32] Operational Highlights - The company opened six new locations in Q1 2025, bringing the total to 49 locations across eleven states [8][25] - Comparable restaurant sales decreased by 0.7% in Q1 2025, a slight improvement from a 5.6% decline for all of 2024 [8][25] - The company has a robust development pipeline, aiming to open 12 to 13 new restaurants in fiscal 2025, including three international locations in South Korea [5][8] Cost and Expense Analysis - Total restaurant operating expenses as a percentage of revenue increased by 120 basis points to 88.0% in Q1 2025 from 86.8% in Q1 2024 [7][8] - General and administrative expenses increased to $5.6 million, or 9.8% of total revenue, reflecting increased personnel for new restaurant development and additional marketing expenditures [10][8] - Pre-opening expenses rose to $2.6 million in Q1 2025 from $1.9 million in Q1 2024 due to the opening of six new restaurants [17][8] Cash Position and Liquidity - As of March 31, 2025, the company had $15.4 million in cash and cash equivalents, with no material long-term debt and full access to a $20 million line of credit [13][8] - The company maintains a strong cash flow position, which supports its strategic priorities for growth [5][8]

Financial Performance - Total revenue increased by 13.0% year-over-year to $57.3 million for Q1 2025, compared to $50.8 million in Q1 2024[6] - Net loss before income taxes for Q1 2025 was $2.1 million, equating to $(0.06) per diluted share, compared to a net income of $3.8 million or $0.11 per diluted share in Q1 2024[10] - Adjusted EBITDA for Q1 2025 was $1.2 million, or 2.2% of revenue, significantly down from $6.4 million or 12.5% of revenue in the prior year period[11] - Net loss for the quarter was $1,964 compared to a net income of $3,698 in the same period last year, representing a significant decline[29] - Adjusted EBITDA decreased to $1,249, down 57.8% from $2,964 in the same period last year[29] - Adjusted net income attributable to GEN Restaurant Group, Inc. was $216, down 43.6% from $383 in the same period last year[32] - Adjusted net (loss) income per share of Class A common stock was $0.04, down from $0.09 in the same period last year[32] Operational Highlights - Restaurant-level adjusted EBITDA rose by 6.0% to $9.0 million, up from $8.4 million in the prior year period[6] - Same-store sales decreased by 0.7% in Q1 2025, an improvement from a decline of 5.6% for all of 2024[6] - The company opened six new locations in Q1 2025, bringing the total to 49 locations across eleven states[6] - Comparable restaurant sales performance was (0.7)%, an improvement from (1.8)% in the same period last year[27] - Restaurant-level Adjusted EBITDA increased to $8,959, up 6.2% from $8,433 in the same period last year[30] - The number of restaurants at the end of the period increased to 49, up from 39 in the same period last year[27] Financial Position - Cash and cash equivalents as of March 31, 2025, were $15.4 million, with no material long-term debt and full access to a $20 million line of credit[7] - Cash and cash equivalents decreased to $15,364, down 35.1% from $23,675 in the same period last year[27] - Total assets decreased to $232,363, down 3.9% from $240,415 in the same period last year[27] - Total stockholders' equity decreased to $42,792, down 3.0% from $44,117 in the same period last year[27] Expense Management - Pre-opening expenses increased to $2.6 million in Q1 2025 from $1.9 million in Q1 2024 due to six new restaurant openings[12] - General and administrative expenses for Q1 2025 increased to $6.4 million, or 11.1% of total revenue, reflecting higher personnel costs for new restaurant development[9] Future Outlook - The full-year outlook anticipates total revenue between $245 million and $250 million, with an annual run rate approaching $300 million once new restaurants are operational[7]

Core Viewpoint - GEN Restaurant Group, Inc. will hold a conference call on May 13, 2025, to discuss its financial results for Q1 2025, which ended on March 31, 2025 [1] Company Overview - GEN Korean BBQ is one of the largest Asian casual dining restaurant concepts in the U.S., 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 demographic [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] - Date and Time: May 13, 2025, at 5:00 p.m. Eastern time (2:00 p.m. Pacific time) [2] - Dial-in numbers: Toll-free 1-844-825-9789, International 1-412-317-5180, with Conference ID 10199261 [2] - A live webcast will be available, and a replay will be accessible through the investor relations section of the company's website [3]

Core Insights - GEN Restaurant Group, Inc. has opened its first location in North Carolina, marking a significant milestone in its strategic growth plan [2] - The new restaurant is located in Cary, strategically positioned to serve a thriving population in the Triangle region of North Carolina [2][3] - GEN Korean BBQ operates over 40 company-owned locations across the United States, offering a unique dining experience where guests grill their own meals at the table [3] Company Overview - GEN Korean BBQ is one of the largest Asian casual dining restaurant concepts in the U.S., founded in 2011 by two Korean immigrants in Los Angeles [3] - The restaurant features an extensive menu that includes traditional Korean and Korean-American dishes, focusing on high-quality meats, poultry, seafood, and mixed vegetables [3] - The dining experience is characterized by modern décor and a lively atmosphere, appealing to a broad segment of the population [3]

Core Insights - GEN Restaurant Group, Inc. is expanding its presence in Texas with a new location in Austin, which opened on March 12, 2025, following previous successes in the state [1][2] - The Austin location is part of a broader strategy to operate in all four major metropolitan areas of Texas, capitalizing on the state's growth opportunities [2] - Austin is recognized as a top foodie destination, making it a strategic choice for GEN's expansion [2] Company Overview - GEN Korean BBQ is one of the largest Asian casual dining concepts in the U.S., founded in 2011, with over 40 company-owned locations [4] - The dining experience features a "grill at your table" concept, allowing guests to prepare their meals, which includes a diverse menu of traditional Korean and Korean-American dishes [4] - The brand aims to provide an engaging and interactive dining atmosphere that appeals to a wide demographic [4]