GEN Restaurant Group, Inc. Announces Fourth Quarter and Full Year 2024 Financial Results

About this update from Gen Restaurant Group, Inc.

2024 Total Revenue of $208.4 Million Exceeds Company’s Full Year Outlook Strong Start to 2025 with Comparable Restaurant Sales for Q1 Quarter-to-Date Increasing 1% Through the End of February, a 6% Improvement Compared to Q4 2024 Company Remains on Track with New Unit Openings for 2025 CERRITOS, Calif., March 06, 2025 (GLOBE NEWSWIRE) -- GEN Restaurant Group, Inc. (“GEN” or the “Company”) (Nasdaq: GENK), owner of GEN Korean BBQ, a fast-growing casual dining concept with an extensive menu and signature “grill at your table” experience, is announcing financial results for the fourth quarter and full year ended December 31, 2024. Fourth Quarter and Full Year 2024 Financial and Recent Operational Highlights (1)   Adjusted EBITDA, restaurant-level adjusted EBITDA, and adjusted net income are non-GAAP measures. For reconciliations of adjusted EBITDA, restaurant-level adjusted EBITDA, and adjusted net income to the most directly comparable GAAP measure see the accompanying financial tables. For definitions and a discussion of why we consider them useful, see “Non-GAAP Measures” below. Management Commentary “Closing out 2024, we achieved our highest total annual revenue figure as a public company while maintaining healthy unit level economics as demonstrated by our results,” said David Kim, Chairman and Chief Executive Officer of GEN. “Driven by the success of new restaurants, for the year we delivered an impressive 15% increase in total revenue to $208.4 million, exceeding both our 2024 guidance and analysts’ expectations. We also achieved a restaurant-level adjusted EBITDA margin approaching 18%, which was in line with our 2024 outlook. “Moving into 2025, our priority remains on executing our growth initiatives and capitalizing on the growing demand for Korean BBQ. We’re very pleased to report that our first quarter comparable restaurant sales through the end of February returned to positive growth of 1% as a result of continued success with our premium menu and modest pricing adjustments. We’ve opened three new restaurants in early 2025, with an additional 10-13 new units slated to open throughout the year. We’re also excited to bring GEN to the global stage as we plan to open at least two new restaurants in South Korea. Supported by over $23 million in cash and cash equivalents, strong cash flow from operations and no material long-term debt, we believe we’re well positioned to drive sustainable growth and profitability through execution of our strategic expansion strategy.” Fourth Quarter 2024 Financial Results Total revenue increased 21.2% to $54.7 million in the fourth quarter of 2024 compared to $45.1 million in the fourth quarter of 2023. Comparable restaurant sales decreased 4.8% in the fourth quarter of 2024 compared to the same period last year. Total restaurant operating expenses (excluding pre-opening expenses) as a percentage of revenue decreased 58 basis points to 86.6% in the fourth quarter of 2024 from 87.2% in the fourth quarter of 2023. The year-over-year and quarter-over-quarter changes as a percentage of revenue are primarily driven by the following: General and administrative expenses increased to $5.6 million, or 10.3% as a percentage of total revenue, excluding non-cash stock compensation expense, for the fourth quarter of 2024, primarily due to additional personnel required for new restaurant development. Net loss before income taxes was $1.2 million, which equated to $(0.04) per diluted share of Class A common stock for the fourth quarter of 2024, compared to $(0.3) million, which equated to $(0.01) per diluted share of Class A common stock in the fourth quarter of 2023. The decrease was largely due to higher expenses related to new restaurant development, including pre-opening costs. Adjusted net loss was $0.7 million, which equated to $(0.02) per diluted share of Class A common stock for the fourth quarter of 2024. Adjusted EBITDA increased 25.0% to $2.1 million or 3.8% of revenue inclusive of pre-opening expense of approximately $1.6 million for the fourth quarter of 2024, compared to $1.6 million or 3.6% of revenue inclusive of pre-opening expenses of $1.2 million in the prior year period. 2024 Financial Results Revenue increased 15.1% to $208.4 million in 2024 compared to $181.0 million in 2023. Comparable restaurant sales decreased 5.6% in 2024 compared to 2023. Total restaurant operating expenses before pre-opening expenses as a percentage of revenue increased 146 basis points to 85.8% in 2024 from 84.4% in 2023 primarily driven by the following: General and administrative expenses excluding non-cash stock compensation expense increased year-over-year to $18.3 million in 2024 compared to $12.6 million in 2023, which included management fees. As a percentage of revenues, general and administrative expenses excluding non-cash stock compensation expense were approximately 8.8% in 2024. The increase is primarily attributable to additional fees for consulting and management following the Company’s IPO in 2023 as well as additional personnel required for new restaurant development. Net income before income taxes was $4.9 million, which equated to $0.13 per diluted share of Class A common stock, compared to $11.5 million, which equated to $0.08 per diluted share of Class A common stock in 2023. The decrease is largely due to increased expenses from restaurant development. Adjusted net income, which represents net income plus non-cash stock-based compensation, was $7.4 million, which equated to $0.21 per diluted share of Class A common stock for 2024. Adjusted EBITDA was $16.7 million and 8.0% of revenue inclusive of pre-opening expense of approximately $5.3 million, compared to $18.8 million and 10.4% of revenue inclusive of pre-opening expense of approximately $2.6 million in 2023. Without pre-opening expense, adjusted EBITDA was $22.0 million for 2024. As of December 31, 2024, the Company had $23.7 million in cash and cash equivalents. The Company continues to operate with no long-term debt, aside from approximately $4.3 million in government-funded EIDL loans, and has access to $40.7 million in total available liquidity, plus annual cash flow from operations of approximately $20 million. Non-GAAP Measures Restaurant-level adjusted EBITDA represents income (loss) from operations plus adjustments to add-back the following expenses: depreciation and amortization, pre-opening costs, general and administrative expenses, related party consulting fees, management fees and non-cash lease expense. Management believes that restaurant-level adjusted EBITDA is useful to investors because this measure highlights trends in our core business that may not otherwise be apparent to investors when relying solely on GAAP financial measures and enabling investors to more effectively compare the Company’s performance to prior and future periods. Adjusted EBITDA represents net income (loss) before net interest expense, income taxes, depreciation and amortization, and consulting fees paid to a related party and we also exclude non-recurring items, such as stock-based compensation expense, gain on extinguishment of debt, and Restaurant Revitalization Fund, or RRF, grants, employee retention credits, litigation accruals, aborted deferred IPO costs written off, non-cash lease expenses and non-cash lease expense related to pre-opening costs. Management believes that restaurant-level adjusted EBITDA is useful to investors because this measure highlights trends in our core business that may not otherwise be apparent to investors when relying solely on GAAP financial measures and enabling investors to more effectively compare the Company’s performance to prior and future periods. Adjusted Net Income represents net income plus non-cash stock-based compensation net of the tax impact. Management believes that adjusted net income is useful to investors because this measure highlights trends in our core business that may not otherwise be apparent to investors when relying solely on GAAP financial measures and enabling investors to more effectively compare the Company’s performance to prior and future periods. Conference Call GEN will conduct a conference call today at 5:00 p.m. Eastern time to discuss its financial results for the fourth quarter and full year 2024 ended December 31, 2024. Chairman and Chief Executive Officer David Kim and Chief Financial Officer Tom Croal will host the conference call, followed by a question-and-answer session. Date: Thursday, March 6, 2025 Time: 5:00 p.m. Eastern time (2:00 p.m. Pacific time) Toll-free dial-in number: 1-844-825-9789 International dial-in number: 1-412-317-5180 Conference ID: 10196747 Please call the conference telephone number 5-10 minutes prior to the start time. An operator will register your name and organization. If you have any difficulty connecting with the conference call, please contact Gateway Group at 949-574-3860. The conference call will be broadcast live via webcast here and available for replay via the investor relations section of the Company’s website at www.genkoreanbbq.com . A telephonic replay of the conference call will also be available after 8:00 p.m. Eastern Time on the same day through March 13, 2025. Toll-free replay number: 1-844-512-2921 International replay number: 1-412-317-6671 Replay ID: 10196747 About GEN Restaurant Group, Inc. 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, the brand has now grown to more than 40 company-owned locations where guests serve as their own chefs, preparing meals on embedded grills in the center of each table. The extensive menu consists of traditional Korean and Korean-American food, including high-quality meats, poultry, seafood and mixed vegetables. With its unique culinary experience alongside its modern décor and lively atmosphere, GEN Korean BBQ delivers an engaging and interactive dining experience that appeals to a vast segment of the population. For more information, GenKoreanBBQ.com  and follow the brand on  Facebook  and  Instagram . Forward-Looking Statements This press release contains forward-looking statements. Forward-looking statements may be identified by the use of words such as “believe,” “intend,” “expect”, “will,” “may”, and other similar words or expressions that predict or indicate future events. All statements that are not statements of historical fact are forward-looking statements, including any statements regarding our strategy, future operations, and growth prospects, any statements regarding future economic conditions or performance, any statements of belief or expectation, and any statements of assumptions underlying any of the foregoing or other future events. Forward-looking statements are based on current information available at the time the statements are made and on management’s reasonable belief or expectations with respect to future events, and are subject to risks and uncertainties, many of which are beyond the Company’s control, that could cause actual performance or results to differ materially from the belief or expectations expressed in or suggested by the forward-looking statements. Additional factors or events that could cause actual results to differ may also emerge from time to time, and it is not possible for the Company to predict all of them. Forward-looking statements speak only as of the date on which they are made, and the Company undertakes no obligation to update any forward-looking statement to reflect future events, developments or otherwise, except as may be required by applicable law.  Investors are referred to the Company’s Annual Report on Form 10-K for the year ended December 31, 2024, and in our subsequent filings with the Securities and Exchange Commission (“SEC”), which are available on the SEC’s website at www.sec.gov , for additional information regarding the risks and uncertainties that may cause actual results to differ materially from those expressed in any forward-looking statement. Investor Relations Contact: Cody Slach and Cody Cree Gateway Group, Inc. 1-949-574-3860 [email protected] Media Relations Contact: Zach Kadletz and Jade Bolton Gateway Group, Inc. 1-949-574-3860 [email protected] (1) (2) Basic and diluted net income per share of Class A common stock is presented only for the period after the Company’s organization transactions. (1)  Stock-based compensation expense: During the three and twelve months ended December 31, 2024 and 2023, we incurred expenses related to the granting of Restricted Stock Units (“RSUs”) to employees. (2)  Consulting fees—related party: These costs ended following the completion of the IPO. (3)  Employee retention credits: These are refundable credits recognized under the provisions of the CARES Act. (4)  Non-cash lease expense: This reflects the extent to which lease expense is greater than or less than contractual rent. (5)  Non-cash lease expense related to pre-opening costs: This reflects cost for stores in development in which the lease expense is greater than the contractual rent. (1) (2) Basic and diluted adjusted net income per share of Class A common stock is presented only for the period after the Company’s organization transactions effective June 30, 2023.

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