What changed in GEN Restaurant Group, Inc.'s 10-K — 2023 vs 2024
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Paragraph-level year-over-year comparison of GEN Restaurant Group, Inc.'s 2023 and 2024 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2024 report.
+275 added−314 removedSource: 10-K (2025-03-10) vs 10-K (2024-03-06)
Top changes in GEN Restaurant Group, Inc.'s 2024 10-K
275 paragraphs added · 314 removed · 203 edited across 1 sections
- Item 1C. Cybersecurity+275 / −314 · 203 edited
Item 1C. Cybersecurity
Cybersecurity — threats and controls disclosure
203 edited+72 added−111 removed128 unchanged
Item 1C. Cybersecurity
Cybersecurity — threats and controls disclosure
203 edited+72 added−111 removed128 unchanged
2023 filing
2024 filing
Biggest changeConsolidated Statements of Cash Flows For the year ended December 31, (in thousands) 2023 2022 Cash flows from operating activities Net Income $ 11,434 $ 11,732 Adjustments to reconcile net income to cash provided by operating activities Depreciation and amortization 4,892 4,353 Equity in income of equity method investee, net of distributions 95 ( 429 ) Gain on extinguishment of debt, PPP — ( 387 ) Stock-based compensation 1,517 — Amortization of operating lease assets 4,642 2,568 Aborted deferred IPO costs written off — 4,036 Interest income earned on Notes receivable from related party ( 150 ) ( 164 ) Changes in operating assets and liabilities: Inventories 2,082 ( 1,413 ) Prepaid expenses and other current assets ( 2,584 ) 454 Other assets ( 67 ) ( 19 ) Accounts payable 3,009 1,969 Accrued salaries and benefits 684 509 Accrued interest ( 133 ) ( 86 ) Other current liabilities ( 45 ) 1,700 Operating lease liabilities ( 3,115 ) ( 1,424 ) Deferred tax asset ( 97 ) Income tax payable — — Net cash provided by operating activities 22,164 23,399 Cash flows from investing activities Proceeds from recovery of Notes receivable from related party 12,950 13,325 Advances made to related party ( 2,100 ) ( 2,650 ) Purchase of property and equipment ( 17,157 ) ( 8,104 ) Net cash (used in) provided by investing activities ( 6,307 ) 2,571 Cash flows from financing activities Proceeds from issuance of Class A common stock sold in IPO, net of underwriting 46,167 — Payments to members for advances ( 2,000 ) — Advance from members 262 2,442 Payments for deferred offering costs ( 2,479 ) ( 2,420 ) Proceeds from PPP and EIDL loans — 2,700 Payments on PPP and EIDL loans ( 87 ) ( 213 ) Payments on finance leases ( 194 ) ( 207 ) Payments on third party loans ( 2,440 ) ( 509 ) Payments on related party loans ( 2,088 ) ( 7,684 ) Payment on line of credit ( 7,993 ) ( 1,000 ) Proceeds from line of credit 1,100 7,893 Proceeds from third party loans 1,300 — Proceeds from related party loans 500 3,518 Member distributions ( 26,469 ) ( 29,185 ) Net cash provided by (used in) financing activities 5,579 ( 24,665 ) Net increase in cash and cash equivalents 21,436 1,305 Cash and cash equivalents at beginning of year 11,195 9,890 Cash and cash equivalents at end of the year $ 32,631 $ 11,195 Supplemental disclosures of other cash flow information: Cash paid for interest $ 195 $ 736 Cash paid for taxes 175 — Non-cash investing and financing activities: Unpaid purchases of property and equipment 927 568 Receivable for member contributions — 60 Unpaid deferred offering cost 125 - Leased assets obtained in exchange for new operating lease liabilities 13,355 92,281 Purchase of PPE through finance lease - 15 Conversion of related party loans to member's equity 871 - See accompanying notes to consolidated financial statements.
Biggest changeConsolidated Statements of Cash Flows For the year ended December 31, (in thousands) 2024 2023 Cash flows from operating activities Net Income $ 4,532 $ 11,434 Adjustments to reconcile net income to cash provided by operating activities Depreciation and amortization 6,857 4,892 Equity in income of equity method investee, net of distributions 17 95 Gain on remeasurement of previously held interest ( 3,402 ) — Stock-based compensation 2,986 1,517 Amortization of operating lease assets 6,814 4,642 Interest income earned on Notes receivable from related party ( 33 ) ( 150 ) Deferred tax expense 333 87 Changes in operating assets and liabilities: Accounts receivable ( 3,487 ) — Inventories ( 266 ) 2,082 Prepaid expenses and other current assets ( 2,613 ) ( 2,584 ) Other assets ( 432 ) ( 67 ) Accounts payable 730 3,008 Accrued salaries and benefits 583 684 Accrued interest 18 ( 133 ) Gift card liabilities 5,983 — Other current liabilities 221 ( 228 ) Operating lease liabilities ( 1,014 ) ( 3,115 ) Net cash provided by operating activities 17,827 22,164 Cash used in from investing activities Proceeds from recovery of Notes receivable from related party — 12,950 Advances made to related party — ( 2,100 ) Purchase of property and equipment ( 23,825 ) ( 17,157 ) Acquisition of GKBH, net of cash acquired ( 2,976 ) — Net cash (used in) investing activities ( 26,801 ) ( 6,307 ) Cash flows from financing activities Proceeds from issuance of Class A common stock sold in IPO, net of underwriting discount — 46,167 Payments to members for advances ( 881 ) ( 2,000 ) Advance from members — 262 Payments for deferred offering costs — ( 2,479 ) Payments on EIDL loans ( 90 ) ( 87 ) Payments on finance leases ( 100 ) ( 194 ) Payments on third party loans ( 3,770 ) ( 2,440 ) Payments on related party loans ( 296 ) ( 2,088 ) Payment on line of credit — ( 7,993 ) Proceeds from line of credit 3,000 1,100 Proceeds from third party loans 3,000 1,300 Proceeds from related party loans — 500 Member distributions ( 845 ) ( 26,469 ) Net cash provided by financing activities 18 5,579 Net change in cash and cash equivalents ( 8,956 ) 21,436 Cash and cash equivalents at beginning of period 32,631 11,195 Cash and cash equivalents at end of the period $ 23,675 $ 32,631 Supplemental disclosures of other cash flow information: Cash paid for interest $ 288 $ 195 Cash paid for taxes 114 175 Non-cash investing and financing activities: Unpaid purchases of property and equipment 1,904 927 Unpaid deferred offering costs - 125 Leased assets obtained in exchange for new operating lease liabilities 39,229 13,355 Conversion of related party loans and advances from members to Class A common stock 1,436 871 Issuance of promissory note for business acquisition 3,000 — Contribution by shareholder in final IPO settlement 1,277 — See accompanying notes to consolidated financial statements.
However, substantial increases in costs and expenses could impact our operating results to the extent that such increases cannot be offset by menu price increases or operational adjustments. Inflation Risk The primary areas where inflation impacts our operations are food, beverage, labor and energy costs.
However, substantial increases in costs and expenses could impact our operating results to the extent that such increases cannot be offset by menu price increases or operational adjustments. Inflation Risk The primary areas where inflation impacts our operations are in food, beverage, labor and energy costs.
Operating lease payments exclude contingent rent payments that may be due under certain of our leases based on a percentage of sales in excess of specified thresholds. See “Note 11—Leases” to the financial statements in this annual report for further details. 54 (2) Reflects the principal and interest payments during the lease terms.
Operating lease payments exclude contingent rent payments that may be due under certain of our leases based on a percentage of sales in excess of specified thresholds. See “Note 11—Leases” to the financial statements in this annual report for further details. (2) Reflects the principal and interest payments during the lease terms.
As of December 31, 2023, the Company did not have any dilutive securities that could, potentially, be exercised or converted into Class A common stock and then share in the earnings of the Company. As a result, diluted income (loss) per share is the same as basic income (loss) per share for the period presented.
As of December 31, 2024 and 2023, the Company did not have any dilutive securities that could, potentially, be exercised or converted into Class A common stock and then share in the earnings of the Company. As a result, diluted income (loss) per share is the same as basic income (loss) per share for the period presented.
The Company works third party companies to assess, identify, manage, and mitigate material cybersecurity threats, as well as to respond to and recover from cybersecurity incidents. The Company recognizes the importance of maintaining our technology and data systems. Our cybersecurity policies, standards, processes, and practices are integrated across our operational departments.
The Company works with third party companies to assess, identify, manage, and mitigate material cybersecurity threats, as well as to respond to and recover from cybersecurity incidents. The Company recognizes the importance of maintaining our technology and data systems. Our cybersecurity policies, standards, processes, and practices are integrated across our operational departments.
We base our estimates on past experience and other assumptions that we believe are reasonable under the circumstances, and we evaluate these estimates on an ongoing basis. Our critical accounting policies are those that materially affect our financial statements and involve subjective or complex judgments by management.
We base our estimates on past experience and other assumptions that we believe are reasonable under the circumstances, and we evaluate these estimates on an ongoing basis. Our critical accounting estimates are those that materially affect our financial statements and involve subjective or complex judgments by management.
Factors considered by us in estimating future cash flows include, but are not limited to: significant underperformance relative to expected historical or projected future operating results; significant changes in the manner of use of the acquired assets; and significant negative industry or economic trends.
Factors considered by us in estimating future cash flows include, but are not limited to: significant underperformance relative to expected historical or projected future operating results; significant changes in the 55 manner of use of the acquired assets; and significant negative industry or economic trends.
Following the successful consummation of the IPO in June 2023, deferred offering costs of approximatel y $ 3.3 m illion were recorded in the Company’s stockholders’ equity as a reduction of additional paid-in capital. The Company had no remaining deferred offering costs assets at December 31, 2023 .
Following the successful consummation of the IPO in June 2023, deferred offering costs of approximatel y $ 3.3 m illion were recorded in the Company’s stockholders’ equity as a reduction of additional paid-in capital. The Company had no remaining deferred offering costs assets at December 31, 2024 .
We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (“PCAOB”) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) ("PCAOB") and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
All of our restaurant and office leases are classified as operating leases and some of our equipment leases are classified as finance leases. Assets we acquired under finance lease arrangements are recorded at the lower of the present value of future minimum lease payments or fair value of the assets at the inception of the lease.
All of our restaurant and office leases are classified as operating leases and some of our equipment leases are classified as finance leases. Assets we acquired under finance lease arrangements were recorded at the lower of the present value of future minimum lease payments or fair value of the assets at the inception of the lease.
During March 2023, a member owner loaned another $ 500 thousand to the Company of which $ 150 thousand was repaid prior to the IPO and as part of the IPO, the remaining loan balance was repaid in full and immediately contributed to owners’ equity.
During March 2023, a member owner loaned $ 500 thousand to the Company of which $ 150 thousand was repaid prior to the IPO and as part of the IPO, the remaining loan balance was repaid in full and immediately contributed to owners’ equity.
Croal (incorporated by reference to the Company’s Form 8-K, Exhibit 10.3, filed August 4, 2023) 10.10 Non-competition Agreement David Kim (incorporated by reference to the Company’s Form 8-K, Exhibit 10.4, filed August 4, 2023) 10.11 Non-competition Agreement Jae Chang (incorporated by reference to the Company’s Form 8-K, Exhibit 10.5, filed August 4, 2023) 10.12 Master Services Agreement by and between Sysco Los Angeles Inc. and GEN Restaurant Group, dated as of August 1, 2023 (incorporated by reference to the Company’s Form 8-K, Exhibit 10.1, filed August 7, 2023) 10.13 Business Loan Agreement among GEN Restaurant Group, Inc., GEN Restaurant Companies, LLC and PCB Bank, effective as of September 25, 2023 (incorporated by reference to the Company’s Form 8-K, Exhibit 10.1, filed October 4, 2023) 21.1* Subsidiaries of the Registrant 23.1* Consent of Marcum, LLP, independent registered public accounting firm the Company’s Form S-8, 24.1* Power of Attorney (included on the signature page hereto) 31.1* Certification of Principal Executive Officer Pursuant to Rules 13a-14(a) and 15d-14(a) under the Securities Exchange Act of 1934, as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. 31.2* Certification of Principal Financial Officer Pursuant to Rules 13a-14(a) and 15d-14(a) under the Securities Exchange Act of 1934, as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. 60 32.1** Certification of Principal Executive Officer Pursuant to 18 U.S.C.
Croal (incorporated by reference to the Company’s Form 8-K, Exhibit 10.3, filed August 4, 2023) 10.10 Non-competition Agreement David Kim (incorporated by reference to the Company’s Form 8-K, Exhibit 10.4, filed August 4, 2023) 10.11 Non-competition Agreement Jae Chang (incorporated by reference to the Company’s Form 8-K, Exhibit 10.5, filed August 4, 2023) 10.12 Master Services Agreement by and between Sysco Los Angeles Inc. and GEN Restaurant Group, dated as of August 1, 2023 (incorporated by reference to the Company’s Form 8-K, Exhibit 10.1, filed August 7, 2023) 10.13 Business Loan Agreement among GEN Restaurant Group, Inc., GEN Restaurant Companies, LLC and PCB Bank, effective as of September 25, 2023 (incorporated by reference to the Company’s Form 8-K, Exhibit 10.1, filed October 4, 2023) 19.1* Insider Trading Policy 21.1* Subsidiaries of the Registrant 23.1* Consent of Marcum, LLP, independent registered public accounting firm the Company’s Form S-8, 24.1* Power of Attorney (included on the signature page hereto) 31.1* Certification of Principal Executive Officer Pursuant to Rules 13a-14(a) and 15d-14(a) under the Securities Exchange Act of 1934, as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. 31.2* Certification of Principal Financial Officer Pursuant to Rules 13a-14(a) and 15d-14(a) under the Securities Exchange Act of 1934, as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. 60 32.1** Certification of Principal Executive Officer Pursuant to 18 U.S.C.
They will provide briefings to the Audit Committee on a periodic basis regarding cybersecurity matters, including but not limited to the following: • Current cybersecurity landscape and emerging threats; • Status of ongoing cybersecurity initiatives and strategies; • Incident reporting, if any, and learning from any cybersecurity events; • Risk mitigation efforts and insurance, and • Compliance with regulatory requirements and industry standard. 40 It em 2.
They will provide briefings to the Audit Committee on a periodic basis regarding cybersecurity matters, including but not limited to the following : • Current cybersecurity landscape and emerging threats; • Status of ongoing cybersecurity initiatives and strategies; • Incident reporting, if any, and learning from any cybersecurity events; • Risk mitigation efforts and insurance, and • Compliance with regulatory requirements and industry standard. 39 It em 2.
Although the outcome of these and other claims cannot be predicted with certainty, we do not believe the ultimate resolution of the current matters will have a material adverse effect on our business, financial condition, results of operations or cash flows. It em 4. Mine Safety Disclosures. Not applicable. 41 PART II It em 5.
Although the outcome of these and other claims cannot be predicted with certainty, we do not believe the ultimate resolution of the current matters will have a material adverse effect on our business, financial condition, results of operations or cash flows. It em 4. Mine Safety Disclosures. Not applicable. 40 PART II It em 5.
While we have been able to partially offset inflation and other changes in the costs of core operating resources by gradually increasing menu prices, coupled with more efficient purchasing practices, productivity improvements and greater economies of scale, there can be no assurance that we will be able to continue to do so in the future.
While we have been able to partially offset inflation and other changes in the costs of core operating resources by gradually increasing menu prices, coupled with the implementation of more efficient purchasing practices, productivity improvements and greater economies of scale, there can be no assurance that we will be able to 56 continue to do so in the future.
The information with respect to principal accountant fees and services contained under the caption “Proposal to ratify appointment of independent registered public accounting firm” in our proxy statement for the 2024 annual meeting of stockholders is incorporated herein by reference to such proxy statement. 59 PART IV It em 15. Exhibits and Financial Statement Schedules.
The information with respect to principal accountant fees and services contained under the caption “Proposal to ratify appointment of independent registered public accounting firm” in our proxy statement for the 2025 annual meeting of stockholders is incorporated herein by reference to such proxy statement. 59 PART IV It em 15. Exhibits and Financial Statement Schedules.
General and administrative expenses are expected to grow as our sales grow, including incremental legal, accounting, insurance and other expenses incurred as a public company including becoming compliant with the requirements of Sarbanes-Oxley and addressing our internal control weaknesses through implementing new accounting systems and hiring additional staff. 46 Consulting fees — related party.
General and administrative expenses are expected to grow as our sales grow, including incremental legal, accounting, insurance and other expenses incurred as a public company including becoming compliant with the requirements of Sarbanes-Oxley and addressing our internal control weaknesses through implementing new accounting systems and hiring additional staff. 45 Consulting fees — related party.
Cash Flows Provided by (Used in) Financing Activities Net cash provided by financing activities during the year ended December 31, 2023 was $5.6 million, primarily due to $46.2 million in proceeds from the issuance of Class A common stock in the IPO, offset partially by $26.5 million in member distributions, and payments on loans of $14.1 million.
Net cash provided by financing activities during the year ended December 31, 2023 was $5.6 million, primarily due to $46.2 million in proceeds from the issuance of Class A common stock in the IPO, offset partially by $26.5 million in member distributions, and payments on loans of $14.1 million.
Following our IPO, these consulting fees were eliminated as services transitioned to us, although corporate general and administrative expenses have increased correspondingly. Management fees . Management fees include expenses paid to a third-party entity, which provides fixed fees for 12 restaurants and a percentage of gross revenue for one restaurant in exchange for management services.
Following our IPO, these consulting fees were eliminated as services transitioned to us, although corporate general and administrative expenses have increased correspondingly. Management fees . Management fees included expenses paid to a third-party entity, which provides fixed fees for 12 restaurants and a percentage of gross revenue for one restaurant in exchange for management services.
Consulting fees include expenses paid to a related party entity, which provides for annual fees of up to 25% of gross revenue in exchange for various consulting services. The related party is 100% owned by an executive officer, the services were for 21 of the restaurants, and such consulting fees were only paid to the extent we had adequate resources.
Consulting fees include expenses paid to a related party entity, which provided for annual fees of up to 25% of gross revenue in exchange for various consulting services. The related party is 100% owned by an executive officer, the services were for 21 of the restaurants, and such consulting fees were only paid to the extent we had adequate resources.
We include restaurants in the comparable restaurant base that have been in operation for at least 12 full months prior to the accounting period presented. Once a restaurant has been open 12 full months, it must have had continuous operations during both the current period and the prior year period being measured to remain a comparable restaurant.
We include restaurants in the comparable restaurant base that have been in operation for at least 18 full months prior to the accounting period presented. Once a restaurant has been open 18 full months, it must have had continuous operations during both the current period and the prior year period being measured to remain a comparable restaurant.
The information contained under the caption “Compensation committee interlocks and insider participation” in our proxy statement for the 2024 annual meeting of stockholders is incorporated herein by reference to such proxy statement. It em 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters.
The information contained under the caption “Compensation committee interlocks and insider participation” in our proxy statement for the 2025 annual meeting of stockholders is incorporated herein by reference to such proxy statement. It em 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters.
Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. 97.1* GEN Restaurant Group Clawback Policy. 101.INS+ Inline XBRL Instance Document – the instance document does not appear in the Interactive Data File because XBRL tags are embedded within the Inline XBRL document. 101.SCH+ Inline XBRL Taxonomy Extension Schema With Embedded Linkbase Documents 104+ Cover Page Interactive Data File (embedded within the Inline XBRL document) * Filed herewith. # Denotes management compensatory plan or arrangement. ** These certifications accompany this Annual Report on Form 10-K; they are not deemed “filed” with the SEC and are not to be incorporated by reference in any filing of the Company under the Securities Act of the Exchange Act, whether made before or after the date hereof and irrespective of any general incorporation language in any filings, except to the extent that the Company specifically incorporates it by reference. + XBRL information is furnished and not filed or a part of a registration statement or prospectus for purposes of Sections 11 or 12 of the Securities Act is deemed not filed for purposes of Section 18 of the Exchange Act and otherwise is not subject to liability under these sections.
Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. 97.1 GEN Restaurant Group Clawback Policy (incorporated by reference to the Company’s 10-K dated March 7, 2024 as Exhibit 97.1) 101.INS+ Inline XBRL Instance Document – the instance document does not appear in the Interactive Data File because XBRL tags are embedded within the Inline XBRL document. 101.SCH+ Inline XBRL Taxonomy Extension Schema With Embedded Linkbase Documents 104+ Cover Page Interactive Data File (embedded within the Inline XBRL document) * Filed herewith. # Denotes management compensatory plan or arrangement. ** These certifications accompany this Annual Report on Form 10-K; they are not deemed “filed” with the SEC and are not to be incorporated by reference in any filing of the Company under the Securities Act of the Exchange Act, whether made before or after the date hereof and irrespective of any general incorporation language in any filings, except to the extent that the Company specifically incorporates it by reference. + XBRL information is furnished and not filed or a part of a registration statement or prospectus for purposes of Sections 11 or 12 of the Securities Act is deemed not filed for purposes of Section 18 of the Exchange Act and otherwise is not subject to liability under these sections.
The terms “we”, “our”, and “us” as used herein refer to the Operating Company and its consolidated subsidiaries prior to the Transactions (as defined in Note 1 to such consolidated financial statements) and to GEN Restaurant Group, Inc. and its consolidated subsidiaries, including the Operating Company, following the Transactions. This discussion contains forward-looking statements that involve risks and uncertainties.
The terms “we”, “our”, and “us” as used herein refer to the Operating Company and its consolidated subsidiaries prior to the Transactions (as defined in Note 1 to such consolidated financial statements) and to GEN Inc. and its consolidated subsidiaries, including the Operating Company, following the Transactions. This discussion contains forward-looking statements that involve risks and uncertainties.
The information that is contained under the captions “Security ownership of certain beneficial owners” and “Security ownership of directors and management” in our proxy statement for the 2024 annual meeting of stockholders is incorporated herein by reference to such proxy statement. It em 13. Certain Relationships and Related Transactions, and Director Independence.
The information that is contained under the captions “Security ownership of certain beneficial owners” and “Security ownership of directors and management” in our proxy statement for the 2025 annual meeting of stockholders is incorporated herein by reference to such proxy statement. It em 13. Certain Relationships and Related Transactions, and Director Independence.
(e) Cash and Cash Equivalents The Company and its related entities consider all highly liquid instruments with a maturity of three months or less when purchased to be cash equivalents. As of December 31, 2023, cash and cash equivalents consist principally of cash, money market accounts and short-term investments.
(e) Cash and Cash Equivalents The Company and its related entities consider all highly liquid instruments with a maturity of three months or less when purchased to be cash equivalents. As of December 31, 2024, cash and cash equivalents consist principally of cash, money market accounts and short-term investments.
For a discussion of why we consider these measures to be useful and their material risks and limitations, see “ Non-GAAP Financial Measures .” Restaurant-Level Adjusted EBITDA and Restaurant-Level Adjusted EBITDA Margin Restaurant-Level Adjusted EBITDA is Income 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.
For a discussion of why we consider these measures to be useful and their material risk and limitations, see “Non-GAAP Financial Measures. ” Restaurant-Level Adjusted EBITDA and Restaurant-Level Adjusted EBITDA Margin Restaurant-Level Adjusted EBITDA is Income 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.
We believe we offer our customers a unique dining experience in which guests cook the majority of the food themselves, reducing the need for chefs and servers and providing a similar customer experience across the restaurants. We expect to continue growing our number of restaurants in the future.
We believe we offer our customers a unique dining experience in which guests cook the majority of the food themselves, reducing the need for chefs and servers and providing a similar customer experience across the restaurants. We expect to continue to grow our number of restaurants in the future.
Historically, until 2023, inflation has not had a material effect on our results of operations. Severe increases in inflation, however, could affect the global and U.S. economies and could have an adverse impact on our business, financial condition or results of operations.
Historically, until 2024, inflation has not had a material effect on our results of operations. Severe increases in inflation, however, could affect the global and U.S. economies and could have an adverse impact on our business, financial condition or results of operations.
The information contained under the captions “Related person transactions” and “Director independence” in our proxy statement for the 2024 annual meeting of stockholders is incorporated herein by reference to such proxy statement. Ite m 14. Principal Accountant Fees and Services.
The information contained under the captions “Related person transactions” and “Director independence” in our proxy statement for the 2025 annual meeting of stockholders is incorporated herein by reference to such proxy statement. Ite m 14. Principal Accountant Fees and Services.
Level 3 - Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets of liabilities. As of December 31, 2023, all of the Company's financial assets that were subject to fair value measurement were valued using observable inputs.
Level 3 - Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets of liabilities. As of December 31, 2024, all of the Company's financial assets that were subject to fair value measurement were valued using observable inputs.
For the year ended December 31, 2023 , the Company did no t have any unrecognized tax benefits as a result of tax positions taken during a prior period or during the current period. No interest or penalties have been recorded as a result of tax uncertainties.
For the year ended December 31, 2024 , the Company did no t have any unrecognized tax benefits as a result of tax positions taken during a prior period or during the current period. No interest or penalties have been recorded as a result of tax uncertainties.
The following tables lists the Company’s entities in operation as of December 31, 2023 : Name Operating Name State Purpose GEN Restaurant Group, LLC GEN Tustin CA Restaurant GEN Huntington Beach CA Restaurant GEN Oxnard CA Restaurant JC Group International Inc.
The following tables lists the Company’s entities in operation as of December 31, 2024 : Name Operating Name State Purpose GEN Restaurant Group, LLC GEN Tustin CA Restaurant GEN Huntington Beach CA Restaurant GEN Oxnard CA Restaurant JC Group International Inc.
Although these estimates are based on management’s best knowledge of current events and actions that may impact us in the future, actual results may be materially different from the estimates. We believe the following critical accounting policies are affected by significant judgments and estimates used in the preparation of our financial statements and that the judgments and estimates are reasonable.
Although these estimates are based on management’s best knowledge of current events and actions that may impact us in the future, actual results may be materially different from the estimates. We believe the following are affected by significant judgments and estimates used in the preparation of our financial statements and that the judgments and estimates are reasonable.
The information contained under the captions “Director compensation” and “Executive compensation” in our proxy statement for the 2024 annual meeting of stockholders is incorporated herein by reference to such proxy statement, provided that the Compensation Committee report shall not be deemed filed with this Form 10-K.
Executive Compensation. The information contained under the captions “Director compensation” and “Executive compensation” in our proxy statement for the 2025 annual meeting of stockholders is incorporated herein by reference to such proxy statement, provided that the Compensation Committee report shall not be deemed filed with this Form 10-K.
Cash Flows (Used in) Provided by Investing Activities Net cash used in investing activities during the year ended December 31, 2023 was $6.3 million, reflecting $10.9 million in the net recovery of proceeds from advances made to a related party, offset by $17.2 million for the purchase of property and equipment.
Net cash used in investing activities during the year ended December 31, 2023 was $6.3 million, reflecting $10.9 million in the net recovery of proceeds from advances made to a related party, partially offset by $17.2 million for the purchase of property and equipment.
In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2023 and 2022, and the results of their operations and its cash flows for each of the two years in the period ended December 31, 2023 in conformity with accounting principles generally accepted in the United States of America.
In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2024 and 2023, and the results of its operations and its cash flows for each of the two years in the period ended December 31, 2024, in conformity with accounting principles generally accepted in the United States of America.
It em 16. Form 10-K Summary None. 61 SIGNATURES Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, as amended, the Registrant has duly caused this Report to be signed on its behalf by the undersigned, thereunto duly authorized . GEN RESTAURANT GROUP, INC. Date: March 6, 2024 By: /s/ Thomas V.
It em 16. Form 10-K Summary None. 61 SIGNATURES Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, as amended, the Registrant has duly caused this Report to be signed on its behalf by the undersigned, thereunto duly authorized . GEN RESTAURANT GROUP, INC. Date: March 7, 2025 By: /s/ Thomas V.
Our restaurant operations are subject to federal and state minimum wage and other laws governing such matters as working conditions, overtime and tip credits. Significant numbers of our restaurant personnel are paid at rates related to the federal and/or state minimum wage and, accordingly, increases in the minimum wage increase our labor costs.
Our restaurant operations are subject to federal and state minimum wage laws and other laws governing such matters as working conditions, overtime and tip credits. Significant numbers of our restaurant personnel are paid at rates dependent on the federal and/or state minimum wage and, accordingly, increases in the minimum wage increase our labor costs.
Accordingly, GEN Inc. will be 52 dependent on distributions from GEN LLC to pay its taxes, its obligations under the Tax Receivable Agreement and other expenses. In connection with the Reorganization, certain members of GEN LLC received the right to receive future payments pursuant to the Tax Receivable Agreement.
Accordingly, GEN Inc. is dependent on distributions from GEN LLC to pay its taxes, its obligations under the Tax Receivable Agreement and other expenses. 52 In connection with the Reorganization, certain members of GEN LLC received the right to receive future payments pursuant to the Tax Receivable Agreement.
Cowan (Director) /s/ Jonathan Gregory Jonathan Gregory March 6, 2024 Jonathan Gregory (Director) 62 INDEX TO CONSOLIDATED FINANCIAL STATEMENTS Report of Independent Registered Public Accounting Firm F- 2 Consolidated Balance Sheets as of December 31, 2023 and 2022 F- 3 Consolidated Income Statements for the Years ended December 31, 2023 and 2022 F- 4 Consolidated Statements of Changes in Permanent Equity (deficit) for the Years ended December 31, 2023 and 2022 F- 5 Consolidated Statements of Cash Flows for the Years ended December 31, 2023 and 2022 F- 7 Notes to Consolidated Financial Statements F- 8 F- 1 Rep ort of Independent Registered Public Accounting Firm To the Stockholders and Board of Directors of Gen Restaurant Group, Inc.
Cowan (Director) /s/ Jonathan Gregory Jonathan Gregory March 7, 2025 Jonathan Gregory (Director) /s/ David Park David Park March 7, 2025 David Park (Director) 62 INDEX TO CONSOLIDATED FINANCIAL STATEMENTS Report of Independent Registered Public Accounting Firm F- 2 Consolidated Balance Sheets as of December 31, 2024 and 2023 F- 3 Consolidated Income Statements for the Years ended December 31, 2024 and 2023 F- 4 Consolidated Statements of Changes in Permanent Equity (deficit) for the Years ended December 31, 2024 and 2023 F- 5 Consolidated Statements of Cash Flows for the Years ended December 31, 2024 and 2023 F- 7 Notes to Consolidated Financial Statements F- 8 F- 1 Rep ort of Independent Registered Public Accounting Firm To the Stockholders and Board of Directors of GEN Restaurant Group, Inc.
Founded in 2011 by two Korean immigrants, since the opening of our first restaurant in September 2011 we have grown to 37 company-owned restaurants located in California, Arizona, Hawaii, Nevada, Texas, New York and Florida. Our restaurants have modern décor, lively Korean pop music playing in the background and embedded grills in the center of each table.
Founded in 2011 by two Korean immigrants, since the opening of our first restaurant in September 2011 we have grown to 46 company-owned restaurants located in California, Arizona, Hawaii, Nevada, Texas, New York, Oregon, New Jersey, and Florida. Our restaurants have modern décor, lively Korean pop music playing in the background and embedded grills in the center of each table.
Outstanding obligations for supply purchases from PGD of approximately $ 137 thousand and $ 86 thousand are included in accounts payable as of December 31, 2023, and December 31, 2022, respectively. In 2016, the Company entered into a management agreement with JL Restaurant Management, Inc (formerly known as J&J Management Group, Inc.) a third party which shares offices with Mr.
Outstanding obligations for supply purchases from PGD of approximately $ 20 thousand and $ 137 thousand are included in accounts payable as of December 31, 2024, and December 31, 2023, respectively. In 2016, the Company entered into a management agreement with JL Restaurant Management, Inc (formerly known as J&J Management Group, Inc.) a third party which shares offices with Mr.
We have been able to partially offset cost increases that have resulted from a number of factors, including market conditions, shortages or interruptions in supply due to weather or other conditions beyond our control and governmental regulations and inflation, by increasing our menu prices as well as making other operational adjustments that increase productivity.
We have been able to partially offset cost increases that resulted from a number of factors, including market conditions, shortages or interruptions in supply due to weather or other conditions beyond our control and governmental regulations and inflation. We accomplished this by increasing our menu prices and making other operational adjustments that increase productivity.
(9) Notes Payable Notes Payable to Bank On September 13, 2017, the Company and a commercial bank entered into a loan agreement in the amount of $ 3.0 million with a maturity date of September 15, 2024 , at an interest rate of 6.00 %.
(9) Notes Payable Notes Payable to Bank The Company and a commercial bank entered into a loan agreement in the amount of $ 3.0 million in 2024 with a maturity date of September 15, 2024 , at an interest rate of 6.00 %.
As a percentage of revenue, depreciation and amortization expenses at the restaurant-level were 2.7% in 2023 and 2.6% in 2022. Pre-opening costs . Pre-opening costs were $3.6 million for the year ended December 31, 2023 compared to $1.5 million for the year ended December 31, 2022. This increase was due to more restaurants under development in 2023 than in 2022.
As a percentage of revenue, depreciation and amortization expenses at the restaurant-level were 3.2% in 2024 and 2.7% in 2023. Pre-opening costs . Pre-opening costs were $7.6 million for the year ended December 31, 2024 compared to $3.7 million for the year ended December 31, 2023. This increase was due to more restaurants under development in 2024 than in 2023.
From time to time, competitive conditions could limit our menu pricing flexibility. In addition, macroeconomic conditions could make additional menu price increases imprudent.
From time to time, competitive conditions could limit our menu pricing flexibility. In addition, macroeconomic conditions could render additional menu price increases imprudent.
We cannot predict whether COVID-19 outbreaks will reoccur or whether variants will spike, what additional restrictions may be enacted, to what extent we can maintain sales volumes during or following any resumption of mandated social distancing protocols or vaccination or mask mandates and what long-lasting effects the COVID-19 pandemic may have on the restaurant industry as a whole.
We cannot predict whether future pandemic outbreaks will reoccur or whether additional restrictions may be enacted, to what extent we can maintain sales volumes during or following any resumption of mandated social distancing protocols or vaccination or mask mandates and what long-lasting effects a pandemic may have on the restaurant industry as a whole.
For a discussion of why we consider these measures to be useful and their material risks and limitations, see “ Non-GAAP Financial Measures .” 44 Average Unit Volume “Average Unit Volume” or “AUV” means the average annual restaurant sales for all restaurants open for a full 12 months before the end of the period measured.
For a discussion of why we consider these measures to be useful and their material risks and limitations, see “ Non-GAAP Financial Measures .” 43 Average Unit Volume “Average Unit Volume” (“AUV”) means the average annual restaurant sales for all restaurants open for a full 18 months before the end of the period measured.
“Financial Statements and Supplementary Data.” The table below shows the locations of our restaurants as of December 31, 2023: City State Opened City State Opened Tustin CA Sep-11 Las Vegas/Sahara NV Dec-17 Huntington Beach CA Nov-12 Concord CA Jan-18 Alhambra CA Dec-12 Westgate CA Jan-18 Oxnard CA Jun-13 San Diego CA May-18 Cerritos CA Jan-14 Mountain View CA Nov-18 Torrance CA Aug-14 Sacramento CA Mar-19 Rancho Cucamonga CA Dec-14 Pearlridge HI Apr-19 San Jose CA Aug-15 Frisco TX Jun-19 Henderson NV Aug-15 Houston TX Oct-19 West Covina CA Sep-15 Webster TX May-22 Corona CA Dec-15 Las Vegas/Miracle Mile NV Jun-22 Northridge CA Dec-15 New York NY Dec-22 Chino Hills CA Apr-16 Cerritos CA Apr-23 Carrollton TX Sep-16 Chandler AZ Jun-23 Honolulu HI Mar-17 Fort Lauderdale FL Jun-23 Glendale CA Mar-17 Westheimer TX Oct-23 Fullerton CA Jul-17 Kapolei HI Nov-23 Fremont CA Aug-17 Arlington TX Dec-23 Tempe AZ Sep-17 Ite m 3.
“Financial Statements and Supplementary Data.” The table below shows the locations of our restaurants as of December 31, 2024: City State Opened City State Opened Tustin CA Sep-11 Westgate CA Jan-18 Huntington Beach CA Nov-12 San Diego CA May-18 Alhambra CA Dec-12 Mountain View CA Nov-18 Oxnard CA Jun-13 Sacramento CA Mar-19 Cerritos CA Jan-14 Pearlridge HI Apr-19 Torrance CA Aug-14 Frisco TX Jun-19 Rancho Cucamonga CA Dec-14 Houston TX Oct-19 San Jose CA Aug-15 Webster TX May-22 Henderson NV Aug-15 Las Vegas/Miracle Mile NV Jun-22 West Covina CA Sep-15 New York NY Dec-22 Corona CA Dec-15 Cerritos CA Apr-23 Northridge CA Dec-15 Chandler AZ Jun-23 Chino Hills CA Apr-16 Fort Lauderdale FL Jun-23 Carrollton TX Sep-16 Westheimer TX Oct-23 Honolulu HI Mar-17 Kapolei HI Nov-23 Glendale CA Mar-17 Arlington TX Dec-23 Fullerton CA Jul-17 Seattle WA Mar-24 Fremont CA Aug-17 Jacksonville FL Apr-24 Tempe AZ Sep-17 Pflugerville TX Oct-24 Dallas TX Feb-24 Maui HI Sep-24 Las Vegas/Sahara NV Dec-17 Tigard OR Oct-24 Concord CA Jan-18 Ite m 3.
Business Trends Although we temporarily paused our new restaurant opening plans during the pandemic, our long-term growth strategy is to continue to open new restaurants in locations that we believe will achieve profitability levels consistent with our pre-pandemic experience. During 2022, we opened three new restaurants and during 2023 we opened six new restaurants.
Business Trends Although we temporarily paused our new restaurant opening plans during the COVID-19 pandemic, our long-term growth strategy is to continue to open new restaurants in locations that we believe will achieve profitability levels consistent with our pre-pandemic experience. During 2022, we opened three new restaurants, and we opened six new restaurants during both of 2023 and 2024.
Represents federal, state, and local current and deferred income tax expense (benefit). 47 Results of Operations for the years ended December 31, 2023 and December 31, 2022 The following table presents selected comparative results of operations from our audited financial statements for the year ended December 31, 2023 and December 31, 2022.
Represents federal, state, and local current and deferred income tax expense (benefit). 46 Results of Operations for the years ended December 31, 2024 and December 31, 2023 The following table presents selected comparative results of operations from our audited financial statements for the year ended December 31, 2024 and December 31, 2023.
(r) Advertising Costs Advertising costs are expensed as incurred and are included in general and administrative expenses in the accompanying consolidated income statements. The Company incurred approximately $ 187 thousand and $ 169 thousand in advertising expenses for the years ended December 31, 2023 and December 31, 2022 , respectively. (s) Risks and Uncertainties.
(r) Advertising Costs Advertising costs are expensed as incurred and are included in general and administrative expenses in the accompanying consolidated income statements. The Company incurred approximately $ 661 thousand and $ 187 thousand in advertising expenses for the years ended December 31, 2024 and December 31, 2023 , respectively. (s) Risks and Uncertainties.
Shares of Class B common stock do not share in the earnings or losses of GEN Inc. and are therefore not participating securities. Separate calculations of basic and diluted net income per share for Class B common stock has not been presented.
Shares of Class B common stock do not share in the earnings or losses of GEN Inc. and are therefore not participating securities. Separate calculations of basic and diluted net income per share for Class B common stock has not been presented. F- 26 GEN RESTAURANT GROUP, INC.
In addition, there can be no assurance that we will generate sales growth in an amount sufficient to offset inflationary or other cost pressures. Interest Rate Risk We are exposed to market interest rates if we were to access the line of credit, which bears an interest rate at the Wall Street Journal Prime Rate plus 0.25%. Ite m 8.
In addition, there can be no assurance that we will generate sales growth in an amount sufficient to offset inflationary or other cost pressures. Interest Rate Risk We are exposed to market interest rates by accessing our line of credit, which bears an interest rate at the Wall Street Journal Prime Rate plus 0.25%. Ite m 8.
The increase in occupancy expenses reflects the addition of six new locations in 2023. As a percentage of revenue, occupancy expenses were 8.1% in 2023 compared to 7.4% in 2022. Operating expenses .
The increase in occupancy expenses reflects the addition of six new locations in 2024. As a percentage of revenue, occupancy expenses were 8.4% in 2024 compared to 8.1% in 2023. Operating expenses .
(the “Company”) as of December 31, 2023 and 2022, the related consolidated income statements and changes in permanent equity (deficit) and of cash flows for each of the two years in the period ended December 31, 2023, and the related notes (“collectively referred to as the “financial statements”).
(the “Company”) as of December 31, 2024 and 2023, the related consolidated statements of income, changes in permanent equity (deficit) and cash flows for each of the two years in the period ended December 31, 2024, and the related notes (collectively referred to as the “financial statements”).
(S Corp) GEN Henderson NV Restaurant GEN West Covina CA Restaurant GEN Corona CA Restaurant GEN Restaurant Investment, LLC GEN Glendale CA Restaurant GEN California, LLC GEN Fullerton CA Restaurant GEN Mira Mesa CA Restaurant GEN Arizona, LLC GEN Tempe AZ Restaurant GEN Chandler, LLC GEN Chandler AZ Restaurant GEN Nevada, LLC GEN Sahara NV Restaurant GEN Miracle Mile NV Restaurant GEN Alhambra, LLC GEN Alhambra CA Restaurant GEN Arlington, LP GEN Arlington TX Restaurant GEN Cerritos, LLC GEN Cerritos CA Restaurant GEN Cerritos II, LP Gen Cerritos II CA Restaurant GEN Torrance, LLC GEN Torrance CA Restaurant GEN Rancho Cucamonga, LP GEN Rancho Cucamonga CA Restaurant GEN San Jose, LP GEN San Jose CA Restaurant GEN Northridge, LP GEN Northridge CA Restaurant GEN Chino Hills, LP GEN Chino Hills CA Restaurant GEN Carrollton, LP GEN Carrollton TX Restaurant GEN Fort Lauderdale, LP GEN Fort Lauderdale FL Restaurant GEN Fremont, LP GEN Fremont CA Restaurant GEN Concord, LP GEN Concord CA Restaurant GEN Webster, LP GEN Webster TX Restaurant GEN Westgate, LP GEN Westgate CA Restaurant GEN Westheimer, LLC GEN Westheimer TX Restaurant GEN Manhattan NYU, LP GEN Manhattan NY Restaurant GEN Mountain View, LP GEN Mountain View CA Restaurant GKBH Restaurant, LLC GEN Korean BBQ HI Restaurant GEN Hawaii, LLC Investment Company HI Management of GKBH GEN Online, LLC GEN Online CA Website sales GEN Sacramento, LP GEN Sacramento CA Restaurant GEN Pearlridge, LLC GEN Pearlridge HI Restaurant GEN Kapolei, LP GEN Kapolei HI Restaurant GEN Frisco, LP GEN Frisco TX Restaurant GEN Houston, LLC GEN Houston TX Restaurant GEN Texas, LLC Investment Company TX Management of GEN Houston and GEN Webster GEN Master, LLC Holding Company NV Management GEN Restaurant Management, LLC GRM DE Management F- 8 GEN RESTAURANT GROUP, INC.
(S Corp) GEN Henderson NV Restaurant GEN West Covina CA Restaurant GEN Corona CA Restaurant GEN Restaurant Investment, LLC GEN Glendale CA Restaurant GEN California, LLC GEN Fullerton CA Restaurant GEN Mira Mesa CA Restaurant GEN Arizona, LLC GEN Tempe AZ Restaurant GEN Chandler, LLC GEN Chandler AZ Restaurant GEN Nevada, LLC GEN Sahara NV Restaurant GEN Miracle Mile NV Restaurant GEN Alhambra, LLC GEN Alhambra CA Restaurant GEN Arlington, LP GEN Arlington TX Restaurant GEN Cerritos, LLC GEN Cerritos CA Restaurant GEN Cerritos II, LP Gen Cerritos II CA Restaurant GEN Torrance, LLC GEN Torrance CA Restaurant GEN Rancho Cucamonga, LP GEN Rancho Cucamonga CA Restaurant GEN San Jose, LP GEN San Jose CA Restaurant GEN Northridge, LP GEN Northridge CA Restaurant GEN Chino Hills, LP GEN Chino Hills CA Restaurant GEN Carrollton, LP GEN Carrollton TX Restaurant GEN Fort Lauderdale, LP GEN Fort Lauderdale FL Restaurant GEN Fremont, LP GEN Fremont CA Restaurant GEN Concord, LP GEN Concord CA Restaurant GEN Webster, LP GEN Webster TX Restaurant GEN Westgate, LP GEN Westgate CA Restaurant GEN Westheimer, LLC GEN Westheimer TX Restaurant GEN Manhattan NYU, LP GEN Manhattan NY Restaurant GEN Maui, LP GEN Maui HI Restaurant GEN Mountain View, LP GEN Mountain View CA Restaurant GKBH Restaurant, LLC GEN Korean BBQ HI Restaurant GEN Hawaii, LLC Investment Company HI Management of GKBH GEN Online, LLC GEN Online CA Website sales GEN Sacramento, LP GEN Sacramento CA Restaurant GEN Pearlridge, LLC GEN Pearlridge HI Restaurant GEN Kapolei, LP GEN Kapolei HI Restaurant GEN Frisco, LP GEN Frisco TX Restaurant GEN Houston, LLC GEN Houston TX Restaurant GEN Seattle, LP GEN Seattle WA Restaurant GEN Jacksonville, LP GEN Jacksonville FL Restaurant GEN Dallas, LP GEN Dallas TX Restaurant GEN Pflugerville, LP GEN Pflugerville TX Restaurant GEN Tigard, LP GEN Tigard OR Restaurant GEN Texas, LLC Investment Company TX Management of GEN Houston and GEN Webster GEN Master, LLC Holding Company NV Management GEN Grills, LP GEN Grills DE Hibachi Concept GEN Restaurant Management, LLC GRM DE Management F- 8 GEN RESTAURANT GROUP, INC.
Short-term investments are classified available for sale securities, which are carried at fair value, with changes in fair value reported in earnings. Cash equivalents also include credit card transactions in transit. As of December 31, 2023 and December 31, 2022 , there were deposits in excess of federally insured amounts of $ 8.8 million and $ 3.5 million, respectively.
Short-term investments are classified available for sale securities, which are carried at fair value, with changes in fair value reported in earnings. Cash equivalents also include credit card transactions in transit. As of December 31, 2024 and December 31, 2023 , there were deposits in excess of federally insured amounts of $ 2.9 million and $ 8.8 million, respectively.
Year Ended December 31, 2023 2022 Comparable restaurant sales change (%) 0.6 % N/A Comparable restaurant base 29 N/A Since opening new restaurants is expected to be a significant component of our sales growth, comparable restaurant sales change is only one measure of how we evaluate our performance.
Year Ended December 31, 2024 2023 Comparable restaurant sales change (%) (5.6 )% 0.5 % Comparable restaurant base 33 29 Since opening new restaurants is expected to be a significant component of our sales growth, comparable restaurant sales change is only one measure of how we evaluate our performance.
The following management’s discussion and analysis of our financial condition and results of operations should be read in conjunction with the audited consolidated financial statements and related notes of GEN Restaurant Group, Inc., included in Part II, Item 8 of this Annual Report on Form 10-K, and with the audited consolidated financial statements and related notes of GEN Restaurant Companies, LLC (the “Operating Company”) for the years ended December 31, 2023 and 2022..
The following management’s discussion and analysis of our financial condition and results of operations should be read in conjunction with the audited consolidated financial statements and related notes of GEN Inc., included in Part II, Item 8 of this Annual Report on Form 10-K, which includes GEN Restaurant Companies, LLC (the “Operating Company”) for the year ended December 31, 2024 and 2023.
Reserved 42 It em 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations.
Reserved 41 It em 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations.
During the year ended December 31, 2023 and December 31, 2022, we recorded an aggregate benefit of $ 2.5 million and $ 3.5 million, respectively, in our consolidated income statements to reflect the ERC. (u) Deferred Offering Costs The Company capitalized certain legal, accounting, and other third-party fees that were directly attributable to the IPO.
During the years ended December 31, 2024 and 2023 , we recorded an aggregate benefit of $ 199 thousand and $ 2.5 million, respectively, in our consolidated income statements to reflect the ERC. (u) Deferred Offering Costs The Company capitalized certain legal, accounting, and other third-party fees that were directly attributable to the IPO.
Refer to “Note 10—Related Party Notes Payable” to the financial statements included in this annual report. Off-Balance Sheet Arrangements As of December 31, 2023 and December 31, 2022 we did not have any material off-balance sheet arrangements. Critical Accounting Policies and Estimates Our discussion and analysis of operating results and financial condition are based upon our financial statements.
Refer to “Note 9—Notes Payable” to the financial statements included in this annual report. 54 Off-Balance Sheet Arrangements As of December 31, 2024 and December 31, 2023 we did not have any material off-balance sheet arrangements. Critical Accounting Policies and Estimates Our discussion and analysis of operating results and financial condition are based upon our financial statements.
March 6, 2024 Costa Mesa, CA PCAOB ID No. 688 F- 2 PART I—FIN ANCIAL INFORMATION Ite m 1. Financial Statements. GEN RESTAURANT GROUP, INC.
March 7, 2025 Costa Mesa, CA PCAOB ID No. 688 F- 2 PART I—FIN ANCIAL INFORMATION Ite m 1. Financial Statements . GEN RESTAURANT GROUP, INC.
Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities. Our common stock trades on the NASDAQ stock exchange under the symbol “GENK.” As of February 5, 2024, there were approximately four shareholders of record. This does not include persons whose stock is held in nominee or “street name” accounts through brokers.
Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities. Our common stock trades on the Nasdaq Global Market under the symbol “GENK.” As of February 26, 2025, there were approximately 14 shareholders of record. This does not include persons whose stock is held in nominee or “street name” accounts through brokers.
Management fees were $1.2 million for the year ended December 31, 2023 and $2.3 million for the year ended December 31, 2022. These were paid to a third-party entity and consist of fixed fees for twelve restaurants and a percentage of gross revenue for one restaurant in exchange for management services.
These fees were eliminated following the IPO in June 2023. Management Fees . Management fees were $1.2 million for the year ended December 31, 2023. These were paid to a third-party entity and consist of fixed fees for twelve restaurants and a percentage of gross revenue for one restaurant in exchange for management services.
In order to mitigate price volatility, the Company monitors cost fluctuations and may adjust its menu prices accordingly. The Company’s ability to compensate for higher costs through increased pricing may be limited by the competitive environment in which the Company operates.
In order to mitigate price volatility, the Company monitors cost fluctuations and may adjust its menu prices accordingly. The Company’s ability to compensate for higher costs through increased pricing may be limited by the competitive environment in which the Company operates. F- 14 GEN RESTAURANT GROUP, INC.
The key measures for determining how our business is performing include Net Income Margin, Adjusted EBITDA, Adjusted EBITDA Margin, Restaurant-Level Adjusted EBITDA, Restaurant-Level Adjusted EBITDA Margin, Average Unit Volumes, comparable restaurant sales growth, the number of restaurant openings and revenue per square foot. Net Income Margin Net Income Margin is net income measured under GAAP divided by revenue.
The key measures for determining how our business is performing include Net Income Margin, Adjusted EBITDA, Adjusted EBITDA Margin, Adjusted net income, Adjusted net income EPS, Restaurant-Level Adjusted EBITDA, Restaurant-Level Adjusted EBITDA Margin, Average Unit Volumes, comparable restaurant sales growth, the number of restaurant openings and revenue per square foot.
F- 5 Redeemable Class B Common Members' equity Class A Common Stock Class B Common Stock Additional paid-in Retained Non- Controlling Stockholders' Equity/ Members' equity (in thousands) Units (deficit) Shares Amount Shares Amount capital Earnings Interest (deficit) Balance, December 31, 2022 $ - $ ( 10,011 ) $ - $ - $ - $ 3,250 $ ( 6,761 ) Activities prior to the initial public offering and related organizational transactions: Net income prior to the organizational transactions 8,084 827 8,911 Conversion of related party loans to equity 871 871 Member distributions ( 26,469 ) ( 26,469 ) Effects of initial public offering and related organization transactions: - Effects of the organizational transactions ( 23,448 ) 27,525 ( 4,077 ) 23,448 Issuance of Class A common stock in the IPO, net of underwriting discount 3,600,000 3 40,141 40,144 Issuance of Class A common stock to underwriters upon exercise of overallotment option 540,000 1 6,025 6,026 Issuance of Class B common stock in the IPO, net of underwriting discount 28,141,566 28 ( 28 ) - Conversion of Class B common units into Class B Shares 23,448 ( 23,447 ) ( 23,447 ) Capitalization of initial public offering costs ( 3,265 ) ( 3,265 ) Establishment of liabilities under tax receivable agreement and related changes to deferred tax assets associated with increase in tax basis 12,520 12,520 Activities subsequent to the initial public offering and related organizational transactions: Net income 322 2,201 2,523 Stock-based compensation 1,517 1,517 NCI adjustment ( 26,351 ) 26,351 - Balance, December 31, 2023 $ - $ - 4,140,000 $ 4 28,141,566 $ 28 $ 7,112 $ 322 $ 28,552 $ 36,018 F- 6 GEN RESTAURANT GROUP, INC.
Consolidated Statements of C hanges in Permanent Equity (Deficit) Year ended December 31, 2024 and December 31, 2023 Redeemable Class B Common Members' equity Class A Common Stock Class B Common Stock Additional paid-in Retained Non- Controlling Stockholders' Equity/ Members' equity (in thousands except share outstanding ) Units (deficit) Shares Amount Shares Amount capital Earnings Interest (deficit) Balance, December 31, 2022 - $ ( 10,011 ) $ - $ - $ - $ 3,250 $ ( 6,761 ) Activities prior to the initial public offering and related organizational transactions: Net income prior to the organizational transaction 8,084 827 8,911 Conversion of related party loans to equity 871 871 Member distributions ( 26,469 ) ( 26,469 ) Effects of initial public offering and related organization transactions: - Effects of the organizational transactions ( 23,448 ) 27,525 ( 4,077 ) 23,448 Issuance of Class A common stock in the IPO, net of underwriting discount 3,600,000 3 40,141 40,144 Issuance of Class A common stock to underwriters upon exercise of overallotment option 540,000 1 6,025 6,026 Issuance of Class B common stock in the IPO, net of underwriting discount 28,141,566 28 ( 28 ) - Conversion of Class B common units into Class B Shares 23,448 ( 23,447 ) ( 23,447 ) Capitalization of initial public offering costs ( 3,265 ) ( 3,265 ) Establishment of liabilities under tax receivable agreement and related changes to deferred tax assets associated with increase in tax basis 12,520 12,520 Activity subsequent to the initial public offering and related organizational transactions: Net income 322 2,201 2,523 Stock-based compensation 1517 1,517 NCI Adjustment ( 26,351 ) 26,351 - Balance, December 31, 2023 - $ - 4,140,000 $ 4 28,141,566 $ 28 $ 7,112 $ 322 $ 28,552 $ 36,018 See accompanying notes to consolidated financial statements.
Properties. As of December 31, 2023, there were 37 restaurants owned and operated by Gen Restaurant Group, Inc. Our main office is located at 11480 South Street, Suite 205, Cerritos, CA 90703 and our telephone number is (562) 356-9929. We lease our main office and substantially all of the properties on which we operate restaurants.
Properties. As of December 31, 2024, there were 43 restaurants owned and operated by GEN Inc. Our main office is located at 11480 South Street, Suite 205, Cerritos, CA 90703 and our telephone number is (562) 356-9929. We lease our main office and substantially all of the properties in which we operate restaurants.
Components of the provision for incomes taxes are as follows: Year ended December 31, (in thousands) 2023 2022 Current tax: U.S. Federal ( 61 ) - U.S. State and local ( 47 ) - $ ( 108 ) $ - Deferred tax: U.S. Federal 71 - U.S.
Components of the provision for incomes taxes are as follows: Year ended December 31, (in thousands) 2024 2023 Current tax: U.S. Federal 9 ( 61 ) U.S. State and local 15 ( 47 ) $ 24 $ ( 108 ) Deferred tax: U.S. Federal ( 186 ) 71 U.S.
(b) Recently Issued Accounting Pronouncement s In March 2023, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2023-01, Leases (Topic 842): Common Control Arrangements.
In March 2023, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2023-01, Leases (Topic 842): Common Control Arrangements.
F- 7 GEN RESTAURANT GROUP, INC. Notes to Consolidated Financial Statements December 31, 2023 and 2022 ( 1) Organization and Description of Business The accompanying consolidated financial statements represent the consolidated balance sheets, income statements, changes in permanent equity (deficit), and cash flows of GEN Restaurant Group, Inc.
F- 7 GEN RESTAURANT GROUP, INC. Notes to Consolidated Financial Statements December 31, 2024 and 2023 ( 1) Organization and Description of Business The accompanying consolidated financial statements represent the consolidated balance sheets, income statements, changes in permanent equity (deficit), and cash flows of GEN Restaurant Group, Inc., Gen Restaurant Companies, LLC and its consolidated subsidiaries (the “Company”).
During the year ended December 31, 2023 and December 31, 2022, the Company paid approximately $ 30 thousand and $ 102 thousand to Fast Fabrications, LLC (“Fast Fabrications”), for services related to restaurant interior construction. Fast Fabrications is an affiliate that is 100 % owned by an employee of the Company.
During the year ended December 31, 2024 and December 31, 2023, the Company paid approximat ely $ 0 thousand and $ 30 thousand to Fast Fabrications, LLC (“Fast Fabrications”), for services related to restaurant interior construction. Fast Fabrications is an affiliate that is 100 % owned by an employee of the Company.
The following table shows the revenue per square foot for the year ended December 31, 2023 and 2022: Year Ended December 31, 2023 2022 Revenue per square foot $ 862 $ 890 Components of Results of Operations Revenues. Revenues represent sales of food and beverages in restaurants and, to a minor extent, through our online portal.
The following table shows the revenue per square foot for the year ended December 31, 2024 and 2023: For the period ending December 31, 2024 2023 Revenue per square foot $ 801 $ 857 Components of Results of Operations Revenues. Revenues represent sales of food and beverages in restaurants and, to a minor extent, through our online portal.
Under GAAP, a tax position is recognized as a benefit only if it is “more likely than not” that the tax position would be sustained in a tax examination, with a tax examination being presumed to occur. The amount recognized is the largest amount of tax benefit that is greater than 50 % likely of being realized on examination.
Under GAAP, a tax position is recognized as a benefit only if it is “more likely than not” that the tax position would be sustained in a tax examination, with a tax examination being presumed to occur.
These operating leases are expected to commence in fiscal year 2024 and have lease terms, including option periods, of 20 to 25 years. The Company is obligated under finance leases covering certain property and equipment that expire at various dates during the next 2 years.
These additional leases will total $ 62.2 million in future lease payment commitments. These operating leases are expected to commence in fiscal year 2025 and have lease terms, including option periods, of 20 to 25 years. The Company is obligated under finance leases covering certain property and equipment that expire at various dates during the next year.
Liquidity and Capital Resources As of December 31, 2023 we had $32.6 million of cash and $5.5 million of working capital, which is calculated as current assets minus current liabilities, compared with $11.2 million of cash and ($22.5) million of working capital as of December 31, 2022.
Liquidity and Capital Resources As of December 31, 2024 we had $23.7 million of cash and ($7.2) million of working capital deficit, which is calculated as current assets minus current liabilities, compared with $32.6 million of cash and $5.5 million of working capital as of December 31, 2023.
The operating lease liabilities are subsequently measured at the carrying amount of the lease liability adjusted for initial direct costs, prepaid or accrued lease payments, and lease incentives.
Operating lease assets are initially measured based on the lease liability, adjusted for initial direct costs, prepaid or deferred rent, and lease incentives. The operating lease liabilities are subsequently measured at the carrying amount of the lease liability adjusted for initial direct costs, prepaid or accrued lease payments, and lease incentives.
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