First Quarter 2024 Financial and Recent Operational Highlights
- Total revenue increased 16% to
$50.8 million compared to the first quarter of 2023. - Income from operations was
$108 thousand and 0.2% of revenue. - Restaurant-level adjusted EBITDA(1) was
$8.4 million and 16.6% of revenue. - Net Income was
$3.7 million and 7.3% of revenue. - Adjusted EBITDA(1) was
$6.4 million and 12.5% of revenue inclusive of pre-opening expense of approximately$1.9 million . - Cash and cash equivalents at
March 31, 2024 was$28.1 million . - Opened two new locations during the first quarter of 2024 in
Seattle, Washington andDallas, Texas . Opened a third location inJacksonville, Florida duringApril 2024 . - Launched new Premium Menu at all 40 nationwide locations featuring 10 gourmet protein options at an additional cost of
$20 per guest. - Completed an acquisition to buy out the Company’s 50% partner in
GKBH Restaurant LLC , which included acquiring the rights the partner had to participate in future GEN restaurants in theState of Hawaii , onFebruary 19, 2024 . The Company now wholly owns all 40 of its locations.
(1) Adjusted EBITDA and restaurant-level adjusted EBITDA are non-GAAP measures. For reconciliations of adjusted EBITDA and restaurant-level adjusted EBITDA 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
“Our first quarter performance reflects continued execution on our strategic growth initiatives to rapidly expand GEN’s geographic coverage,” said
“In February, we bought out our partner in
First Quarter 2024 Financial Results
Total revenue increased 16% to
Total restaurant operating expenses (excluding pre-opening expenses) as a percentage of revenue increased 327 basis points to 86.8% in the first quarter of 2024 from 83.5% in the first quarter of 2023, primarily driven by the following:
- Cost of goods sold increased 81 basis points primarily due to more restaurants in operation and the introduction of the Company's new premium menu.
- Payroll and benefits increased 70 basis points due to increases in minimum wage rates in certain markets in which the Company operates, primarily
California ; higher short-term labor costs in newly open restaurants as the Company trains staff and management; and an increase in manager training in preparation for the Company’s ramp-up in new restaurant development. On a sequential basis, payroll and benefits decreased by 26 basis points compared to the fourth quarter of 2023. - Occupancy costs increased 63 basis points primarily due to new restaurant openings over the last twelve months.
- Other operating costs increased 64 basis points. On a sequential basis, other operating costs decreased 112 basis points compared to the fourth quarter of 2023.
- Depreciation and amortization increased 49 basis points.
- Restaurant pre-opening expenses increased to
$1.9 million for the first quarter of 2024 from$0.5 million in the first quarter of 2023 due to the timing of new store openings.
General and administrative expenses increased by
Net income was
Adjusted EBITDA increased to
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
Conference Call
GEN will conduct a conference call today at
Date:
Time:
Toll-free dial-in number: 1-844-825-9789
International dial-in number: 1-412-317-5180
Conference ID: 10188729
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
The conference call will be broadcast live 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
Toll-free replay number: 1-844-512-2921
International replay number: 1-412-317-6671
Replay ID: 10188729
About
GEN Korean BBQ is a fast-growing cook-it-yourself casual dining concept with over 40 locations in 8 states. The Company offers guests a unique dining experience 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. For more information, please visit GEN’s website at www.genkoreanbbq.com.
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
Investor Relations Contact:
1-949-574-3860
GENK@gateway-grp.com
GEN RESTAURANT GROUP Condensed Consolidated Income Statements (in thousands, except per share amounts) | ||||||||
Three months ended | ||||||||
(in thousands, except per share amounts) | 2024 | 2023 | ||||||
(unaudited) | ||||||||
Revenue | $ | 50,760 | $ | 43,862 | ||||
Restaurant operating expenses: | ||||||||
Food cost | 16,968 | 14,305 | ||||||
Payroll and benefits | 16,152 | 13,652 | ||||||
Occupancy expenses | 4,293 | 3,432 | ||||||
Operating expenses | 5,098 | 4,126 | ||||||
Depreciation and amortization | 1,537 | 1,113 | ||||||
Pre-opening costs | 1,901 | 519 | ||||||
Total restaurant operating expenses | 45,949 | 37,147 | ||||||
General and administrative | 4,674 | 2,055 | ||||||
Consulting fees - related party | — | 880 | ||||||
Management fees | — | 588 | ||||||
Depreciation and amortization - corporate | 29 | 18 | ||||||
Total costs and expenses | 50,652 | 40,688 | ||||||
Income from operations | 108 | 3,174 | ||||||
Employee retention credits | — | 1,165 | ||||||
Gain on remeasurement of previously held interest | 3,402 | — | ||||||
Interest income (expense), net | 276 | (189 | ) | |||||
Equity in income (loss) of equity method investee | (17 | ) | 381 | |||||
Net income before income taxes | 3,769 | 4,531 | ||||||
Provision for income taxes | (71 | ) | — | |||||
Net income | 3,698 | 4,531 | ||||||
Less: Net income attributable to noncontrolling interest | 3,202 | 397 | ||||||
Net income attributable to | 496 | 4,134 | ||||||
Net income attributable to Class A common stock per share - basic and diluted (1) | $ | 496 | — | |||||
Weighted-average shares of Class A common stock outstanding - basic (1) | 4,324 | — | ||||||
Weighted-average shares of Class A common stock outstanding - diluted (2) | 4,324 | — | ||||||
Net income per share of Class A common stock - basic | $ | 0.11 | — | |||||
Net income per share of Class A common stock - diluted | $ | 0.11 | — | |||||
(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 GROUP Selected Balance Sheet Data and Selected Operating Data (in thousands, except restaurants and percentages) | ||||||||
For the period ending | ||||||||
(amounts in thousands) | (unaudited) | |||||||
Selected Balance Sheet Data: | ||||||||
Cash and cash equivalents | $ | 28,122 | $ | 32,631 | ||||
Total assets | $ | 214,511 | $ | 183,870 | ||||
Total liabilities | $ | 172,649 | $ | 146,352 | ||||
Total Stockholders' equity | $ | 40,362 | $ | 36,018 |
Three months ended | ||||||||
(in thousands) | 2024 | 2023 | ||||||
Selected Operating Data | (unaudited) | |||||||
Restaurants at end of period | 39 | 31 | ||||||
Comparable restaurant sales performance | -1.8 | % | 3.9 | % | ||||
Net income | 3,698 | 4,531 | ||||||
Net income margin | 7.3 | % | 10.3 | % | ||||
Adjusted EBITDA | 6,366 | 5,845 | ||||||
Adjusted EBITDA margin | 12.5 | % | 13.3 | % | ||||
Income from operations | 108 | 3,174 | ||||||
Income from operations margin | 0.2 | % | 7.2 | % | ||||
Restaurant level Adjusted EBITDA | 8,433 | 8,407 | ||||||
Restaurant level Adjusted EBITDA margin | 16.6 | % | 19.2 | % | ||||
GEN RESTAURANT GROUP Reconciliation of Net Income to EBITDA and Adjusted EBITDA (in thousands) | ||||||||
(amounts in thousands) | Three months ended | |||||||
2024 | 2023 | |||||||
(unaudited) | ||||||||
EBITDA: | ||||||||
Net income | $ | 3,698 | $ | 4,531 | ||||
Net Income Margin | 7.3 | % | 10.3 | % | ||||
Interest income (expense), net | (276 | ) | 189 | |||||
Provision for income taxes | 71 | — | ||||||
Depreciation and amortization | 1,566 | 1,131 | ||||||
EBITDA | $ | 5,059 | $ | 5,851 | ||||
EBITDA Margin | 10.0 | % | 13.3 | % | ||||
Adjustments to EBITDA: | ||||||||
EBITDA | $ | 5,059 | $ | 5,851 | ||||
Stock-based compensation expense (1) | 759 | — | ||||||
Consulting fees - related party (2) | — | 880 | ||||||
Employee retention credits (3) | — | (1,165 | ) | |||||
Non-cash lease expense (4) | 184 | 60 | ||||||
Non-cash lease expense related to pre-opening costs (5) | 364 | 219 | ||||||
Adjusted EBITDA | $ | 6,366 | $ | 5,845 | ||||
Adjusted EBITDA Margin | 12.5 | % | 13.3 | % | ||||
Reconciliation of Income from Operations to Restaurant-level Adjusted EBITDA (in thousands) | ||||||||
(amounts in thousands) | Three months ended | |||||||
2024 | 2023 | |||||||
(unaudited) | ||||||||
Income from Operations | $ | 108 | $ | 3,174 | ||||
Income Margin from Operations | 0.2 | % | 7.2 | % | ||||
Depreciation and amortization | 1,566 | 1,131 | ||||||
Pre-opening costs | 1,901 | 519 | ||||||
General and administrative | 4,674 | 2,055 | ||||||
Consulting fees - related party | — | 880 | ||||||
Management Fees | — | 588 | ||||||
Non-cash lease expense | 184 | 60 | ||||||
Restaurant-Level Adjusted EBITDA | $ | 8,433 | $ | 8,407 | ||||
Restaurant-Level Adjusted EBITDA Margin | 16.6 | % | 19.2 | % |
(1) | Stock-based compensation expense: During the first quarter of 2024, 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: Cost for stores in development in which the lease expense is greater than the contractual rent. |
Source:
2024 GlobeNewswire, Inc., source