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

1. GENK reported total revenue of $208.4 million for 2024, exceeding forecasts. 2. Q1 2025 saw a 1% increase in comparable restaurant sales year-to-date. 3. Nine new locations were opened since March 2024, with 10-13 planned in 2025. 4. Introduced international expansion in South Korea with two locations planned. 5. The Board approved a $5 million stock buyback program, signaling confidence.

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Why Bullish?

Strong revenue growth and expansion plans can positively affect investor sentiment. Historical examples show companies like Chipotle saw stock rises after similar growth announcements.

How important is it?

The article highlights strong financial results and growth plans, critical for investor confidence and stock performance.

Why Long Term?

Positive sales growth and expansion efforts will yield benefits over several quarters, as evidenced by past restaurant chains leveraging similar growth strategies.

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DINEATCMG
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  Total revenue grew 21.2% year-over-year to $54.7 million for the fourth quarter and increased 15.1% to $208.4 million for 2024.Achieved restaurant-level adjusted EBITDA(1) margins approaching 18% of total revenue for 2024.Adjusted EBITDA(1) increased 25.0% to $2.1 million and 3.8% of revenue inclusive of pre-opening expense of $1.6 million for the fourth quarter and was $16.7 million and 8.0% of revenue inclusive of pre-opening expense of approximately $5.3 million for the full year.GEN opened nine new locations since March 2024, including six locations in 2024 and three locations in early 2025 that were originally planned for 2024. The Company expects to open 10-13 new units in 2025, excluding the three delayed locations from 2024.Introduces international expansion into South Korea with at least two Company-owned locations slated to open in 2025.Net income before income taxes for the full year was $4.9 million, which equated to $0.13 per diluted share of Class A common stock.Adjusted net income(1) for the full year of 2024 was $7.4 million, which equated to $0.21 per diluted share of Class A common stock.Initiated a successful gift card program with Costco in 2024.Cash and cash equivalents at December 31, 2024 was $23.7 million.As a sign of confidence in the Company’s future, the Board of Directors have approved a stock buyback program for up to $5 million. (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:   Cost of goods sold increased by 146 basis points compared to the fourth quarter of 2023, largely due to a higher restaurant count and the premium menu.Payroll and benefits decreased 128 basis points compared to the fourth quarter of 2023.Occupancy costs increased 27 basis points compared to the fourth quarter of 2023, largely due to the six new restaurant openings over the last twelve months.Other operating costs decreased by 137 basis points compared to the fourth quarter of 2023.Depreciation and amortization increased 34 basis points compared to the fourth quarter of 2023.Restaurant pre-opening expenses increased to $2.3 million for the fourth quarter of 2024 from $1.6 million in the fourth quarter of 2023 due to additional new restaurant openings compared to the year ago period. 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: Cost of goods sold increased 76 basis points primarily due to higher costs associated with the launch of the premium menu and increased restaurant count.Payroll and benefits decreased 56 basis points.Occupancy costs increased 31 basis points primarily due to the six new restaurants opened in the past twelve months.Other operating costs increased 37 basis points.Depreciation and amortization increased 58 basis points.Restaurant pre-opening expenses increased to $7.6 million for 2024 from $3.7 million in 2023 due to a higher volume of new store openings. 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, 2025Time: 5:00 p.m. Eastern time (2:00 p.m. Pacific time)Toll-free dial-in number: 1-844-825-9789International dial-in number: 1-412-317-5180Conference 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: 1-844-512-2921International replay number: 1-412-317-6671Replay 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 CreeGateway Group, Inc.1-949-574-3860GENK@gateway-grp.com Media Relations Contact:Zach Kadletz and Jade BoltonGateway Group, Inc.1-949-574-3860GENK@gateway-grp.com  GEN RESTAURANT GROUPCondensed Consolidated Income Statements(in thousands, except per share amounts)         Three months ended December 31,  Year ended December 31,   2024  2023  2024  2023   (unaudited)    Revenue $54,654  $45,108  $208,380  $181,007 Restaurant operating expenses:            Food cost  18,620   14,707   68,730   58,322 Payroll and benefits  16,831   14,470   64,322   56,889 Occupancy expenses  4,726   3,777   17,524   14,653 Operating expenses  5,354   5,035   21,538   18,043 Depreciation and amortization  1,797   1,332   6,735   4,808 Pre-opening costs  2,253   1,557   7,607   3,680 Total restaurant operating expenses  49,581   40,878   186,456   156,395 General and administrative  6,373   5,115   21,326   12,937 Consulting fees - related party  —   —   —   2,325 Management fees  —   —   —   1,176 Depreciation and amortization - corporate  33   26   122   84 Total costs and expenses  55,987   46,019   207,904   172,917 Income from operations  (1,333)  (911)  476   8,090 Employee retention credits  —   —   199   2,483 Gain on remeasurement of previously held interest  —   —   3,402   — Interest income (expense), net  95   553   829   347 Equity in income (loss) of equity method investee  —   16   (17)  535 Net (loss) income before income taxes  (1,238)  (342)  4,889   11,455 Provision for income taxes  159   (149)  357   21 Net income  (1,397)  (193)  4,532   11,434 Less: Net income attributable to noncontrolling interest  (1,193)  (169)  3,940   3,028 Net income attributable to GEN Restaurant Group, Inc.  (204)  (24)  592   8,406              Net income attributable to Class A common stock per share - basic and diluted(1) $(204)  (24) $592   324              Weighted-average shares of Class A common stock outstanding - basic(1)  4,913   4,140   4,668   4,140 Weighted-average shares of Class A common stock outstanding - diluted(2)  4,913   4,140   4,668   4,140              Net income before taxes per share $(0.04) $(0.01) $0.13  $0.08 Net income per share of Class A common stock - diluted $(0.04) $(0.01) $0.13  $0.08                   (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.  GEN RESTAURANT GROUPSelected Balance Sheet Data and Selected Operating Data(in thousands, except restaurants and percentages)      Twelve months ended December 31,   2024  2023 (amounts in thousands)   Selected Balance Sheet Data:      Cash and cash equivalents $23,675  $32,631 Total assets $240,415  $183,870 Total liabilities $194,798  $146,352 Total Stockholders' equity $44,117  $36,018    Three months ended December 31,  Twelve months ended December 31,   2024  2023  2024  2023 Selected Operating Data      Restaurants at end of period  43   37   43   37 Comparable restaurant sales performance  (4.8)%  (0.2)%  (5.6)%  0.5%Net income $(1,397) $(193) $4,532  $11,434 Net income margin  (2.6)%  (0.4)%  2.2%  6.3%             Adjusted EBITDA $2,056  $1,645  $16,735  $18,848 Adjusted EBITDA margin  3.8%  3.6%  8.0%  10.4%             Income from operations $(1,333) $(911) $476  $8,090 Income from operations margin  (2.4)%  (2.0)%  0.2%  4.5%             Restaurant level Adjusted EBITDA  9,305   7,196   36,943   33,479 Restaurant level Adjusted EBITDA margin  17.0%  16.0%  17.7%  18.5%                   GEN RESTAURANT GROUPReconciliation of Net Income to EBITDA and Adjusted EBITDA(in thousands, except percentages)       (amounts in thousands) Three months ended December 31,  Year ended December 31,   2024  2023  2024  2023   (unaudited)    EBITDA:            Net income $(1,397) $(193) $4,532  $11,434 Net Income Margin  (2.6)%  (0.4)%  2.2%  6.3%Interest income (expense), net  (95)  (553)  (829)  (347)Provision for income taxes  159   (149)  357   21 Depreciation and amortization  1,830   1,358   6,857   4,892 EBITDA $497  $463  $10,917  $16,000 EBITDA Margin  0.9%  1.0%  5.2%  8.8%             Adjustments to EBITDA:            EBITDA $497  $463  $10,917  $16,000 Stock-based compensation expense(1)  734   759   2,986   1,517 Consulting fees - related party(2)  —   —   —   2,325 Employee retention credits(3)  —   —   (199)  (2,483)Non-cash lease expense(4)  182   77   677   379 Non-cash lease expense related to pre-opening costs(5)  643   346   2,354   1,110 Adjusted EBITDA $2,056  $1,645  $16,735  $18,848 Adjusted EBITDA Margin  3.8%  3.6%  8.0%  10.4%                   Reconciliation of Income from Operations to Restaurant-level Adjusted EBITDA(in thousands, except percentages; unaudited)         Three months ended December 31,  Year Ended December 31,   2024  2023  2024  2023   (unaudited)    Income from Operations $(1,333) $(911) $476  $8,090 Income Margin from Operations  (2.4)%  (2.0)%  0.2%  4.5%Depreciation and amortization  1,830   1,358   6,857   4,892 Pre-opening costs  2,253   1,557   7,607   3,680 General and administrative  6,373   5,115   21,326   12,937 Consulting fees - related party  —   —   —   2,325 Management Fees  —   —   —   1,176 Non-cash lease expense  182   77   677   379 Restaurant-Level Adjusted EBITDA $9,305  $7,196  $36,943  $33,479 Restaurant-Level Adjusted EBITDA Margin  17.0%  16.0%  17.7%  18.5%                  (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.  Reconciliation of Net Income before income taxes to Adjusted Net Income and Adjusted Net Income EPS(in thousands, except percentages; unaudited)         Three months ended December 31,  Twelve months ended December 31, (in thousands, except per share amounts) 2024  2023  2024  2023   (unaudited)    Net income before income taxes $(1,238) $(342) $4,889  $11,455 Stock based compensation  734   759   2,986   1,517 Tax impact of adjustment  (31)  (30)  (125)  (59)Provision for income taxes  159   (149)  357   21 Adjusted Net income  (694)  536   7,393   12,892 Less: Net income attributable to noncontrolling interest  (603)  467   6,427   3,028 Net income attributable to GEN Restaurant Group, Inc.  (91)  70   966   9,864              Adjusted Net income attributable to Class A common stock per share - basic and diluted(1) $(91) $70  $966  $510              Weighted-average shares of Class A common stock outstanding - basic(1)  4,913   4,140   4,668   4,140 Weighted-average shares of Class A common stock outstanding - diluted(2)  4,913   4,140   4,668   4,140              Adjusted Net income per share of Class A common stock - basic(1) $(0.02) $0.02  $0.21  $0.12 Adjusted Net income per share of Class A common stock - diluted(2) $(0.02) $0.02  $0.21  $0.12                   (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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