GEN Restaurant Group (GENK) investor relations material

Executive summary

• Signed a binding LOI with Chubby Group for restaurant operations at 47 U.S. locations, valued at up to $100 million; definitive agreements remain under negotiation and the transaction is not assured.

• Planned transition retains the CPG business and Cerritos restaurant; restaurant transfers are expected in four phases over 12 months.

• Strategy shifts toward CPG growth, overhead reductions and debt repayment; end-2027 targets include a $40 million annualized CPG revenue run rate and positive consolidated net income on a run-rate basis.

Financial highlights

• Q3 revenue was $48.7 million, down 3.3% YoY; operating loss widened to $6.0 million from $3.7 million and net loss to $5.5 million from $3.6 million.

• Q3 loss attributable to Class A stockholders was $1.0 million, or $0.16/share, versus $0.6 million, or $0.11/share, a year earlier.

• Q3 G&A declined 15.3% to $5.5 million as lower corporate costs and stock-based compensation offset CPG go-to-market investment.

• Nine-month revenue was $158.4 million versus $162.8 million; net loss was $17.3 million versus $7.3 million.

• Nine-month operating cash flow was negative $6.4 million; investing cash outflow was $6.7 million and financing cash inflow was $13.7 million.

Outlook and guidance

• CPG target is a $40 million annualized revenue run rate by end-2027, with positive consolidated net income on a run-rate basis targeted by then, subject to the proposed transaction and overhead restructuring.

• Newly secured retail placements are expected to begin reaching shelves in Q2 2027; these placements were not reflected in Q3 CPG revenue.

• Ready To Eat fully cooked refrigerated products are planned for rollout in late Q1 or early Q2 2027; frozen products remain in the portfolio.

• New restaurant development has slowed, with construction at certain leased sites suspended; capital spending weighs restaurant returns against CPG investment.