GEN Restaurant Group, Inc.

Greetings. Welcome to Gen Restaurant Group 2024 earnings call. At this time, all participants are in a listen-only mode. A question and answer session will follow the formal presentation. If anyone should require operator assistance during the conference, please press star zero on your telephone keypad. Please note this conference is being recorded. I will now turn the conference over to Tom Corral, CFO. Thank you. You may begin.

Thank you, operator, and good afternoon. By now, everyone should have access to our second 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 meeting of federal security laws, including but not limited to statements about 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 ended June 30, 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 risks that could impact our future operating results and financial conditions. 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 earnings 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 second quarter, we continued executing on our strategic growth initiatives to expand GEN's geographic coverage and overall market share. This quarter, we delivered another strong revenue performance, achieving a 16% year-over-year increase in total revenue for the second quarter in a row. while delivering a restaurant level adjusted EBITDA margin ahead of our expectations at 19% due to operational efficiencies. I'm proud to say that we exceeded nearly all consensus estimates as we continue to deliver on the strategy we've laid out. With the sustained profitability of existing stores, strong revenue growth from new stores, and ongoing cost optimization incentives, we're well positioned to continue executing through the remainder of the year. For those new or newer to our story, I always like to start these calls by giving you a recap of who Gen Korean BBQ is, what differentiates us, and why our model positions us for sustainable future growth. Gen Korean barbecue is an 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 as well as salad alternatives across both lunch and dinner at affordable, all-inclusive price. Our unique business model both optimizes and minimizes kitchen staff and space, allowing us to offer consumers an exceptional dining experience at an incredible value, which is our core proposition. Going forward, we expect our proven model to generate at least, on average, a cash-on-cash return of 40% and a payback period of approximately two to two and a half years driven by an average of 4 million to 5 million in annual unit volume and restaurant level adjusted even a margin of 18 to 20%. It's worth noting that our payback period includes pre-opening costs. If you were to exclude these costs, as some of our other peers do, we are at an even more attractive level of less than two years. For further context, our 10 most recent new restaurants are showing 2.5 years payback and getting better. Overall, we're bullish on the long-term potential of our concept, further underscoring our confidence is the increasing popularity of Asian dining concepts across the millennial and Gen Z age group. In fact, we've seen ample press coverage over the past several months on this very topic. Reputable outlets such as Nation's Restaurant News, FSR, CNN, and others have all cited this shift towards Asian-focused cuisine driven by both changing ethnic demographics and younger audience seeking new and unique flavor profiles. We are proud to be at the forefront of this emerging trend and believe we have the necessary expansion strategy in place to continue introducing are unique and innovative concepts to many new customers. Now let's dive into our restaurant development. In the second quarter, we opened new restaurants in Jacksonville, Florida, bringing our total stores for 2024 up to three. We also began construction on seven additional locations across the country. We expect to open one restaurant next month and the remaining six by the end of the year or sooner. As a result, with these planned new locations making significant progress towards opening, we're adjusting our guidance from eight new restaurants to 10 to 11 new restaurants for 2024. In addition to the 10 to 11 restaurants in 2024, We have 11 or more locations with leases either being signed or in the process of being signed. Also, we have 15 to 20 additional leases and negotiations which should lead to our 2026 projections. We're raising the bottom end of our guidance for the end of 2026 and now expect to have 75 to 80 locations. Looking ahead to our overarching expansion roadmap, we're experiencing strong momentum and maintain high confidence in achieving our long-term growth goals. Moving forward, our robust pipeline of new restaurant openings and lease agreements reflect our confidence in scaling our footprint and achieving our growth targets. With a solid foundation, a profitable operating model, and a healthy balance sheet, we're achieving sustained success and are committed to delivering significant value to our shareholders in the years ahead. Thank you for your continued support and partnership on this exciting journey. I would now like to turn the call over to our CFO, Tom Crowe, to discuss our second quarter results in more detail.