Good day, ladies and gentlemen, and thank you for standing by. Welcome to the GEN Restaurant Group, Inc. Q3 2023 Earnings Conference Call. At this time, all participants have been placed in a listen-only mode, and the lines will be open for your questions following the presentation. Please note that this conference is being recorded today, November 14th 2023. Now, I would like to turn the conference over to Thomas Croal, the company's Chief Financial Officer. Please go ahead. Thank you, operator, and good afternoon. By now, everyone should have access to our third quarter 2023 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 securities laws, including, but not limited to, statements regarding 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 third quarter of 2023 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 registration statement on Form S-1, for a more detailed discussion of the risks that could 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. We will file our quarterly report on Form 10-Q for the third quarter of 2023 later today and would encourage you to review that document at your earliest convenience. During today's call, we will discuss some non-GAAP financial measures, which we believe will 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 current, directly comparable GAAP financial measures are available in our earnings press release and in our SEC filings, which are available in the Investor Relations section of our website. Now, I would like to turn it over to our Board Chair and Co-CEO, David Kim. David? Thank you, and good afternoon, everybody. Since the last time we spoke, we've had many accomplishments, including completing our first full quarter as a public company and opened another successful restaurant in Houston, Texas, with two more restaurants expected to open by the end of the year. Starting with our new restaurants, we are proud of the results we're seeing from our four new restaurants in Chandler, Manhattan, Miracle Mile, and Webster. These restaurants are collectively generating annualized average unit volumes of around $5 million and currently on track for an average payback period of approximately 2.1 years, in line with our expectations. Our outlier for us is Fort Lauderdale, as the opening was delayed to the summer months, which is seasonally slower time in that marketplace. Importantly, while this restaurant opening is slower than normal, it is still better than break even today. Let me now provide you an update on our expansion plans. In the fourth quarter, we expect to open three new restaurants, including Houston, Texas, which opened in October. For 2024, we currently have three additional restaurant units under construction, all of which are expected to open in the first or second quarter of next year. In addition, we have 12 leases signed or in final signing stages for new units and an additional eight locations in the LOI stage of negotiations, for a total of 20 expected future locations. With leases for the majority of our new 2024 locations signed or in final stages of negotiations, we are now in the process of further expanding our unit pipeline as we secure our 2025 and 2026 locations. We remain committed to expanding our number of restaurants and achieving our growth targets. With our unit returns among the best in the industry, we believe the opportunity ahead of us is substantial. Next, I want to touch on our transition to Sysco as our distribution partner. The switch from US Foods is going, and we are making great progress. The transition is currently approximately 80% complete, and we expect it to be complete by mid-December. We continue to be excited to have Sysco as a partner to support our growth, as they will allow us to seamlessly expand across all 50 states while minimizing potential additional disruptions. Once the Sysco transition has been complete, we will be introducing new menu items. In addition, we've recently signed a new agreement with Coca-Cola, which will provide co-marketing incentives and consistent pricing. As a result, we'll offer new promotional drink products at our restaurants on an ongoing basis. Finally, in the coming months, we will introduce Korean Capri Soju as a new alcohol option under our new beer and wine licenses. All of these changes will help improve our customer experience. In closing, let me reiterate that we remain focused and steadfast in the long-term trajectory of the company. We will stay on course with our development and growth plans, meeting the expectations that we laid out during our IPO process. Our team at GEN Korean Barbecue has already demonstrated our ability to succeed through many different economic environments and regions in the United States, and we believe we can succeed in any macroeconomic conditions. I've never been more sure of our ability to capture the opportunity ahead of us, and we're thrilled to share our story and unique dining experience for years to come. With that, I would now like to turn the call over to our CFO, Thomas V. Croal, to discuss our results. Thank you, David. For the third quarter ended September 30th, 2023, revenue increased 7.4% to $45.6 million, compared to $42.4 million in the third quarter of 2022, driven by new unit openings and partially offset by a 1.2% decrease in comparable restaurant sales. The majority of our comparable restaurant sales decrease resulted from the impact of Hurricane Hilary on the West Coast, in addition to weather-related power outages, causing 12 days of closure during the third quarter, which is the highest number we've ever had since our inception. In the middle of the quarter, we also instituted a price increase to our menu, benefiting our comp growth by 0.9% in the quarter, allowing us to help offset inflationary pressures while maintaining the substantial value offering to our guests. Turning to expenses. Cost of goods sold as a percentage of company restaurant sales decreased by 100 basis points versus the third quarter of 2022 to 31.9%. This is primarily due to more favorable commodity pricing and ongoing negotiations with our vendors. Payroll and benefits as a percentage of company restaurant sales increased by 190 basis points versus the third quarter of 2022 to 31.7%. This is due to increases in minimum wage rates in certain markets which we operate, primarily California, to short-term high labor costs in newly opened restaurants as we train staff and management, an increase in managers in training in preparation for our ramp-up in new restaurant development. Additionally, as we work to integrate the two operating companies after the IPO, we have faced incremental labor costs to ensure a consistent operation across all of our restaurants. This integration has taken longer than we expected. Adjusted restaurant-level EBITDA as a percentage of total sales was 18.4%, compared to 20.3% in the third quarter of 2022. If you exclude our new restaurants, adjusted restaurant-level EBITDA as a percentage of revenue was 19%, in line with our expectations. Please refer to our earnings release for a reconciliation of non-GAAP measures. G&A during the quarter was approximately $3 million, excluding stock-based compensation, relative to our guidance we provided last quarter of $3 million-$3.5 million. In addition, we had non-cash stock-based compensation of approximately $800,000 during the quarter. Adjusted EBITDA was $5 million, including pre-opening costs, which is in line with expectations. This compares to $5.9 million in the third quarter of 2022. The decrease versus the third quarter of last year was driven by higher pre-opening costs as we built additional units and incremental public company costs. Without pre-opening costs, adjusted EBITDA would be approximately $5.4 million. Net income was $2.6 million this year, compared to $2.8 million in the third quarter of 2022, driven by the same factors I previously mentioned. Turning to liquidity, as of September 30, 2023, we had no long-term debt except for $5 million of government-funded EIDL loans. At the end of the third quarter, we entered into a new loan agreement, which provides a $20 million revolving line of credit. Importantly, we maintain a strong balance sheet with $32 million in cash and cash equivalents and have generated strong cash flow, allowing us to self-fund $8 million of capital expenditures so far this year. We anticipate 2024 cash flow will provide enough funding to cover development of our new restaurants without significant use of our existing cash. Based on our results to date, we would like to provide the following guidance for the fourth quarter. Total sales between $43.5 million and $45.5 million, including 1 restaurant opened in late October and 2 additional restaurants opened in the final weeks of the year. Adjusted Restaurant-Level EBITDA margin in the 18% to 19% range. Third, general and administrative expenses of $3.1 million-$3.6 million, excluding non-cash stock-based compensation expense. I want to reiterate the strengths of our company, as we have been cash flow positive and net income profitable since inception, except for the impact of the pandemic. We currently generate in excess of $20 million in annual cash flow, with each additional restaurant opening adding to this total. In addition, we have $30 million in cash and a $20 million line of credit, giving us availability of over $70 million to further grow the company. This concludes our prepared remarks. We'd like to thank you again for joining us on the call today, and we are now happy to answer any questions that you may have. Operator, please open the line for questions. Thank you. We will now be conducting a question and answer session. If you would like to ask a question, please press star one on your telephone keypad. A confirmation tone will indicate your line is in the question queue. You may press star two if you would like to remove your questions from the queue. For participants using speaker equipment, it may be necessary to pick up your handset before pressing the star keys. One moment please while we poll for questions. The first question comes from the line of Todd Brooks with The Benchmark Company. Please go ahead. Questions. I've got two for you, and then I'll jump back in queue. The first one, congrats on the pipeline of new locations. Looks like you're in good shape for fiscal 2024 openings. I think you talked about 3 units under construction already, if I heard that right. How does the cadence look for openings across fiscal 2024, as we're just thinking about how to build our models going forward? This is David. Hi, Todd, by the way, good to hear from you. Hi, guys. It is a challenge to open new stores, especially the kind of square footage and the amount of engineering and exhaust that we have to deal with. This is not a simple restaurant to open. For example, on the roadshow, we have explained what our concept is. A normal restaurant might have maybe 3 ventilated hoods. You have to look at it as 50+ ventilated hoods with us because every table has a ventilation. So why I'm bringing all this issue up is, after COVID, it is harder to open restaurants, either from the perspective of the governmental issuance of permits to the contractors building these restaurants outside of our core market. Most of the pressure is coming from the governmental side. We have one restaurant that we should be starting construction soon, and that agency has taken over one year to get a building permit to build. So we are having to float more restaurants to hedge the risk that is out there of delayed openings. But, you know, we are steadfast in what we are looking at. What we have proposed today of the openings that we are anticipating in 2024, we anticipate to line more up. So this is as of, today, of what we're working on. So it is harder to, in terms of time delays and opening, but it doesn't deter us from not adjusting by lining more, restaurants up. That's very helpful. Thanks, David. If you look at next year's slate of openings, can you talk to maybe the quality of locations that you're seeing now since coming public, and a mix of maybe openings in at least states where the brand is established versus new states? Yes. So we have a good amount of restaurants that we will be opening in Texas, as that is our strongest market for us. We will be having more in Florida, new states like Washington, Seattle, those are very good. Portland, we are in drawing stages now. Let me see. Boston is an area that we're excited to go forward with. We're almost done with two deals, and we'll be opening more in New York, 'cause we're doing very well with New York. And Colorado will be entering the market, and that's 2024. We're looking at maybe areas like Oklahoma and what's that other state? Utah. Utah, yes. So we're starting to branch out there, to establish those markets. Okay, great. My final one, and I'll get back in queue, but thanks for the time. If you're looking at your consumer and what you're seeing in their behaviors in the restaurant, Tom, you kind of highlighted some one-time headwinds around the power outages and the hurricanes, and I know you've positioned it, that the volumes are so mature when the stores open, that GEN is not really a same store sales story. But if you dig down to your consumer level, how is the health of the consumer? How are wait times hanging in there? Average check, I know it'd just be really attachment, if that's all you can need, but anything you can give us as far as the health of the GEN consumer would be great. Thanks. I would say, Todd, so far what we're seeing is the consumer is consistent. There isn't an uptick in the consumer. There isn't really a downtick. It's just kind of even flow with our consumers. I know there's been a lot of discussion around the impact of the new drugs, like Ozempic and that. We haven't seen any impact from those on our, you know, volume of people coming into the restaurants. So as we look into 2024, we see it as just being kind of the same. I would like to add to that. We're always looking as to what our local competitors are doing in our space, and the non-branded competitors, especially in California, the Los Angeles area, we are still hearing that they're down double digit, but we're not. So we're maintaining our brand and our customer base. We haven't seen a drop yet. Okay, great. Thank you both. Thank you. Next question comes from the line of Jeremy Hamblin with Craig-Hallum. Please go ahead. Hey, Jeremy. Thanks for taking the question. Hey, so I wanted to just start and make sure I understood the menu pricing that you're carrying today, and whether or not you expect to take any menu pricing going forward, given, you know, you're, I think, priced at about a 10 to 20, 25% discount to competitors. Then, two, is just an understanding of where, you know, embedded within that sales guidance for Q4, you know, what, what are kind of the same stores sales tracking at quarter to date, and whether or not you've seen any change in the cadence here over the last couple of months? Yeah, thanks, Jeremy. From a pricing standpoint, we don't have any new price increases on the horizon. The price increase that we did do was at several of our restaurants, but only for dinner. And, we're still in most of our restaurants, as we've discussed in the past, under $30 for our pricing. So I'm trying to think if that completely answered your question. Well, then I wanted to understand with the guidance, the sales guidance range that you provided for Q4, you know, one, if you can provide, like, a quarter-to-date same store sales figure. Then, two, what kind of same store sales is implied by that guidance, you know, given that you had to open one location in Houston, Texas in October, and then it sounded like the other two locations you're hoping to get open before the end of the year were gonna be, you know, last couple of weeks of December. Maybe I can chime in a little bit in terms of, let's say, the new restaurant we just opened in Houston. Because every restaurant we open going forward, we will be, like, micro looking at the details of how it's performing. The one that we just opened in Texas is performing as we expected, as good as we expected. So as we, when we announced what these $5 million averages with the 2.1-year returns, we're hitting some good numbers on these. So new store openings going forward, they seem to be in very good areas, so we're very comfortable with the guidance. In terms of sales numbers, was a little soft in October, but we're making it all up in November. So, our guidance still stays the same. You know, some months we pick up, some months we lose, but it averages out. I do wanna say that as we transition to be one operational company, and we've disclosed that we had some delays in what we expected. But now that we are one, it's taking a very good direction that everybody is now engaged. Now it's not two different operations. So we're very optimistic about how we're gonna now start approaching different kind of programs that we are going to be implementing that we have not shared with the street on this quarter, but most likely on the next quarter, we'll start sharing those approaches. So don't know if I've answered some of your questions directly here. No, it's helpful. It sounds like embedded within the guidance is around a flat or maybe even slightly negative comp, just based on the math and the timing of those openings. So I, I'd wanted to just ask one other question here, and I'll hop out of the queue. In regards to your G&A expenses and the commentary around stock comp expense, it was a little over $750,000 in Q3. Was hoping you might be able to provide, you know, is that kind of... now that you're a public company, is that a fairly typical number that you're expecting based on the size of the organization today or was that unusual anyway? Anything you might be able to help share color on that that would be great. Yeah. Thank you. That will be kind of what I'll say is an ongoing quarterly amount. I think we announced in the last quarter that we had issued RSUs in connection with the IPO to certain employees, and those RSUs vest over a 4-5-year period. And so the expense will be recorded over that 4-5-year period, so it'll be consistent for the next few years. Got it. Thanks, and best wishes for a strong finish to the year. Thank you. Thank you. Thank you. Next question comes from the line of George Kelly with Roth Capital Partners. Please go ahead. Hi, guys. Thank you. Hi, George. I lost my voice, so I'll be brief here. Two questions. First, as part of your S-1, I remember that you were targeting 10-12 openings per year. I was wondering if that still seems achievable for 2024? And then secondly, in your prepared remarks, you talked about Sysco and the potential for new menu items. I was curious if you could just expand on that. So thank you. Sure. We are gonna keep our guidance in 2024, as we have said. The openings, a lot of the openings could be towards the fourth quarter because a lot of them are in the stage of architectural and building permit stages, and some are in the finishes of the leases. So we will keep our guidance on 10 to 20. So that will not change. The second question. Was around Sysco. Sysco, yes. Once we establish, and we are almost there, in getting all the operations to be functioning in a cohesive togetherness here, we're going to now introduce different, better products to elevate our menu and our, our, and our products so that we are keeping up and not being stale in old products. So the business we're in, we offer a lot of meat products that's been with us for over 10 years, and there are now new cuts that we are exploring and being tested. After COVID, the production and the product lines were not consistent, but now they're all coming to consistency. Meaning, we, we're going into the areas and the time in which we won't have disruption in supply line. So now we don't have that issue. We can start looking at better products that we can elevate ourselves for our guests. Okay, understood. And then I guess just one more quick one. Tom, you mentioned that you were talking about restaurant contribution margin, and you mentioned that there was an adjustment or some kind of special item, I believe, that would have brought it to 19%. Can you just walk through that again? I missed that. Oh, what I said was, if you take out the new restaurants, that, you know, that are ramping up, if you took those out, it would be 19% instead of 18.4%. Okay, understood. Thank you very much. Thank you. Thank you. Ladies and gentlemen, we have reached the end of question and answer session. I would now like to turn the call back over to Mr. David Kim for closing comments. Well, thank you for being on this call with us, and thank you for having an interest for GEN Korean Barbecue. We are continuously going to stay focused on the operations, and we're gonna stay focused on the growth. This is a company that we generate a lot of cash and profits, and it's not exciting, but it's very everyday focus and execution is what we do very well. So we'll continue that. We call it the boring business, but yet a business that makes money. Thank you. This concludes today's teleconference. You may disconnect your lines at this time. Thank you for your participation.