GEN Restaurant Group, Inc.

Good afternoon and welcome to the GEN Restaurant Group first quarter 2024 earnings conference call. All participants will be in listen only mode. Should you need assistance, please signal a conference specialist by pressing the star key followed by zero. After today's presentation, there will be an opportunity to ask questions. To ask a question, you may press star then one on your telephone keypad. To withdraw your question, please press star then two. Please note, this event is being recorded. I would now like to turn the conference over to Tom Kroll, the company's Chief Financial Officer. Please go ahead.

Thank you, Operator, and good afternoon. By now, everyone should have access to our first quarter 2024 earnings release. If not, it can be found at www.genkoreanbbq.com in the Investor Relations section. Before we begin our formal remarks, I need to remind everyone that our discussions today will include forward-looking statements within the meaning of federal security laws, including, but not limited to, statements regarding how growth plans and potential new store openings, as well as those types of statements identified in our quarterly report on Form 10-Q for the period March 31, 2024, and our subsequent reports filed with the SEC. These forward-looking statements are not guarantees of future performance, and therefore, you should not put undue reliance on them. These statements represent our views only as of the date of this call and are also subject to numerous risks and uncertainties that could cause actual results to differ materially from what we currently expect. We refer you to our recent SEC filings, including our quarterly report on Form 10-Q, for a more detailed discussion of the risk that can impact our future operating results and financial condition. Except as required by law, we undertake no obligation to update or revise these forward-looking statements in light of new information or future events. During today's call, we will discuss some non-GAAP financial measures, which we believe can be useful in evaluating our performance. The presentation of this additional information should not be considered in isolation or as a substitute for results prepared in accordance with GAAP. Reconciliations of the non-GAAP financial measures to the most directly comparable GAAP financial measures are available in our press release and our SEC filings, which are available in the investor relations section of our website. Now I'd like to turn it over to our board chair and co-CEO, David Kim.

Thank you, Tom, and good afternoon, everyone. In the first quarter, we continued executing on our strategic growth roadmap to expand GEN's geographic coverage and overall market share. This quarter, we achieved a 16% year over year increase in total revenue, largely driven by the opening of two new locations, both of which have been performing at or above our expectations. Additionally, we bought out our 50% partner in Hawaii and can now consolidate the revenues and results of operations in our financial statements starting in the second half of February. We also completed the build out of our business development infrastructure, which provides us with a much clearer view into our growth pipeline and gives us the ability to accelerate restaurant openings moving forward. We experienced an improvement in the second half of the quarter by achieving stronger margins as a result of implementing operational efficiencies, which we've also seen continue into April. As a result, I'm proud to report that our overall financial performance was in line with expectations for the quarter, and we remain on track to achieve our goals for 2024 and excited to see the positive momentum building. Before I discuss our performance in more detail, I'd like to reiterate who we are, what makes Gen Korean BBQ truly unique, and why we believe it sets the stage for sustained successful going forward. Gen Korean BBQ is and all-you-can-eat, full-service, cook-it-yourself-at-your-table casual dining restaurant concept that offers consumers a variety of best-in-class proteins, including steak, pork, chicken, seafood, as well as salad alternatives across both lunch and dinner, all at an affordable, all-inclusive price. is value concept. Unlike other restaurant concepts, Jan Kareem Barbecue's model allows us to minimize our kitchen space and maximize the number of tables while benefiting from the absence of costly traditional kitchen staff because we don't make anything as all products come pre-made. Because of this, less labor is required. Thus, we can keep our prices low and provide the best value to our guests. This is incredibly important to keep in mind as we continue to navigate an uncertain consumer demand environment where value becomes a key component for today's consumer's decision making. We've been able to replicate this model over and over again by opening new restaurants with an average unit volume of $4 to $5 million per year, generating $800 plus per square feet and 18 to 20% restaurant level adjusted EBITDA margin. These attractive unit level economics allows us to generate on average a cash on cash return of 40% and a payback period of approximately two to two and a half years, which ranks amongst the best in the industry. With that background, I'd like to address our restaurant development. In the first quarter, we opened two new restaurants in Seattle, Washington and Dallas, Texas. And most recently in April, we opened a new restaurant in Jacksonville, Florida. With these three locations plus our acquisitions of the remaining ownership of our Hawaii location and five others starting construction that are expected to open by year end, we have made significant progress towards reaching our goal of at least eight to nine new restaurants in 2024. We also have an additional 10 plus leases in various stages of negotiations in new markets as well as existing markets that we would expect to open in 2025. As we look at our broader expansion plan, we have strong forward momentum and remain highly confident in our ability to achieve our five-year plan that we discussed at the time we went public. In addition to the 2024 and 2025 restaurant developments I mentioned, we expect to develop 20 to 30 additional new restaurants, totaling between 70 to 80 by the end of 2026. We'll have more than double the size of the company since our IPO. With our attractive unit level economics, we believe this positions us well to deliver notable profitable growth and expand shareholders' value over the next three years. We're doing all this primarily using free cash flow with minimum debt. Recently, we launched our new premium menu at all 40 locations nationwide that features gourmet options for an additional charge per guest. The new menu options helped us improve our revenues in the month of March. It is proving to be a valuable addition to our overall consumer experience, and we believe the additional premium menu pricing will begin to increase our average customer check in the coming quarters. Additionally, we have started testing our new premium drinks. We'll provide more data on this program in the coming quarters. In conclusion, we are confident about our growth prospect moving forward. We're a company that was profitable when we went public. It is still profitable and will be profitable going forward. This makes us among the best in the industry. Our culture of growing while maintaining profitability is a core principle and value of our management team. With that, I would like to turn the call over to our CFO, Tom Kroll, to discuss our quarter one financial results.