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

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

(MORE TO FOLLOW) Dow Jones Newswires

March 06, 2025 16:05 ET (21:05 GMT)