Good afternoon, ladies and gentlemen and welcome to the BJ’s Restaurants Incorporated Fourth Quarter 2007 Results Conference Call. (Operator Instructions). I would like to turn the conference over to Mr. Jerry Deitchle, President and CEO. Please go ahead, sir.

Thanks, Joshua, and hello, everybody. I am Jerry Deitchle of BJ’s Restaurants and welcome to our quarterly investor conference call which we are also broadcasting live over the internet. Joining me on the call today are Greg Levin, our Executive VP and CFO; Greg Lynds, our Executive VP and Chief Development Officer and Dianne Scott, our Director of Corporate Relations. I think everybody knows that after the market closed today, we released our financial results for the fourth quarter of fiscal 2007 that ended on January the 2nd, 2008 and if you hadn’t had a chance to see our press release today, you can view it on our website, that’s www.bjsrestaurants.com Our agenda today for the call will be as follows. First, I’ll provide brief business and operational overview for the fourth quarter and full year of 2007. And then Greg Lynds will give us an update on the status of our new restaurant development pipeline which is in excellent shape. And then Greg Levin will then comment on our consolidated income statement, balance sheet and liquidity position as of the end of the fourth quarter, which is also in great shape. And then after that, we will be happy to answer your questions. So, we would like to wrap up the call in about 45 minutes or so. And we will get started right after Dianne provides our standard cautionary disclosure with respect to forward-looking statements. Dianne, go ahead.

Our comments on the conference call today will contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements involve known and unknown risks, uncertainties and other factors that may cause the actual results, performance or achievements of the company to be materially different from any future results, performance or achievements expressed or implied by forward-looking statements. Investors are cautioned that forward-looking statements are not guarantees of future performance and that undue reliance should not be placed on such statements. Our forward-looking statements speak only as of today’s date February 14th, 2008. We undertake no obligation to publicly update or revise any forward-looking statements or to make any other forward-looking statements whether as a results of new information, future events or otherwise, unless required to do so by the Securities laws. Investors are referred to the full discussions of risks and uncertainties associated with forward-looking statements contained in the company’s filings with the Securities and Exchange Commission.

Thanks, Dianne. As we indicated in our press release today, our leadership team was very pleased with BJ’s financial results for the fourth quarter and full year of 2007. Just briefly going over our consolidated financial results compared to the same quarter last year, our revenues for the fourth quarter increased a strong 29% to $85.2 million. Our net income increased an impressive 31% to $3.7 million and our diluted net income per share increased 27% to $0.14. Now for the full year of 2007, our revenues increased a strong 32% to $316.1 million compared to the prior fiscal year and our net income and diluted net income per share increased to about 33% and 20% respectively to $13.1 million and $0.49 respectively, when excluding the effect of a non-cash pre-tax charge of $2 million that we took in the first quarter in 2007 related to certain asset disposals. Now, that’s a non-GAAP comparison. So, please refer to the reconciliation of GAAP to non-GAAP results that’s included in our press release today. We also mentioned in our press release today that despite the continuing difficult operating environment in general, for casual dinning overall, BJ’s achieved a very solid 4.9% increase in comparable restaurant sales for the fourth quarter and a 6.2% increase in comparable restaurant sales for the year. Our 4.9% increase in comp sales during the fourth quarter represented our 45th consecutive quarter of positive comparisons on that measure, since BJ’s IPO back in 1996. Additionally, after adjusting for non-cash stock compensation and our restaurant labor, our four wall restaurant operating cash flow margin increased to 20.2% for the fourth quarter and compared to 19.7% for the same quarter last year, thus indicated that our efforts to offset the impact of prior commodity cost, particularly cheese and other planned…

Thanks, Jerry, and good afternoon, everyone. As we mentioned in our press release today, our 2007 new restaurant development growth targets were achieved. For 2007, we opened 13 successful new restaurants and increased our total operating weeks by approximately 24%. In the fourth quarter, we opened four restaurants, Temple, Texas, Montebello, California and Glendale, all opened in the month of October and our Austin, Texas restaurant opened on November 5th. In 2007, we opened our first restaurants in the Eastern Time zone, as we successfully extend our brand into Orlando, Florida, Tampa, Florida and Columbus, Ohio. Additionally, we opened two new restaurants in Oklahoma, which is also a new state for BJ’s. Initial sales volumes for our new restaurants continued to exceed our expectations and we are well positioned to build the brand in the Ohio Valley, Florida and other strategic mid-West and East Coast markets going forward into 2008 and beyond. I would also like to recognize our construction and development teams as they did an excellent job in 2007 of delivering all of our restaurants before our internal goal of December 1st. There was also a lot of rain in the Texas and Oklahoma markets in 2007. Moving onto our targeted 2008 new restaurant development pipeline, we currently expect to open as many as 15 restaurants this year and increase our total restaurant operating weeks by approximately 20 to 25%. As of today, all of our potential 2008 openings have been secured with signed leases or letters of intent and nine of the restaurants are already under construction. In the first half of 2008, our development plan called for continued growth in the Ohio Valley region in Central Florida. As Jerry mentioned, we had a successful opening at Cincinnati, Ohio on Monday and a later this month or…

Hey, thanks for the update, Greg. You know BJ’s only has 69 restaurants open today in only 9 states and we continue to believe that there is room for at least 300 BJ’s restaurants domestically of various sizes and site types. As Greg mentioned, we continue to plan to increase our productive capacity as we think about it in terms of total restaurant operating weeks by 20 to 25% for the next few years or so, but having said that, we are going to maintain the discipline to execute our growth plan in a very careful and controlled manner and with the right operational talent, infrastructure and modern tool sets in place. I am going to comment on two more areas of our business before I turn the call over to Greg Levin. First with respect to our G&A expenses. Our plan for 2008 calls for a mid-teen percentage increase in absolute G&A expense dollars compared to fiscal 2007’s approximate 31% increase in absolute G&A expense dollars versus 2006. In other words, we are planning a 50% reduction in the rate of growth in this expense category in 2008. I think most of our longer-term investors know that we have been intentionally strengthening our field supervision and home office support infrastructures for a growth during the past couple of years. But the good news is substantially all of what I would call, our catch up investments in that respect have now been completed and we should be on more of a more normalized incremental G&A investment pattern going forward in our business. We are going to continue to make incremental investments in our restaurant manager recruiting, training, development and retention programs, as that’s really the most critical resource or requirement of future growth and our business model. We are a…

Hi. Thanks, Jerry. I am going to take a couple of minutes to go through some of the highlights for the fourth quarter, and I will provide some forward-looking commentary for 2008. As Jerry previously noted our total revenues for BJ’s fourth quarter of 2007 increased 29% to approximately 85.2 million from 65.9 million in prior year, the increase is a result of approximately 24% more operating weeks, coupled with an approximate 4.2% increase in our weekly sales average. The operating week increase is due to 30 new restaurants that we opened this full year, and a full quarter of operating weeks from the four restaurants we opened in the fourth quarter of last year. Our comparable restaurant sales for the quarter were solid 4.9%. During the quarter, all of the states that we operate in had in aggregate, positive comparable restaurant sales. Our Texas restaurants continue to show some of the best comparable restaurant sales for our company, and collectively, the Texas region again, had comparable restaurant sales in the double-digit range. We also continue to be very pleased with our new restaurants in our new markets. Just to name a few, the Polaris restaurant in Columbus, Ohio continues to generate sales of approximately 100,000 a week, and our Pinellas Park restaurant, which is a suburb of Tampa, is generating sales in excess of 100,000 a week. Our restaurants in the Bay Area of Northern California also had very strong comparable restaurant sales in the fourth quarter. In fact, our Cupertino and our San Jose restaurants, all up in the Bay Area, had comparable restaurant sales of 10% and 12% respectively. As we mentioned in our third quarter conference call, we began to see some weakness in two of our restaurants in the Inland Empire area, Southern California during…

Hey, thanks, Greg for an excellent financial review. And so now we are going to wrap up our prepared remarks. Once again, we had very solid results for the fourth quarter and the full year of 2007, in this difficult operating environment, where consumer spending for casual dining occasions and the prime cost of doing business, will likely continue to be under significant pressure. We believe the more successful casual dining concepts are going to be those that really work hard to protect the overall approachability to the consumer for all dining occasions, and for those concepts that offer even greater quality differentiation and overall value to the consumer. Those have always been the competitive strengths of the BJ’s concept; in fact, the 30th anniversary of the opening of the first BJ’s restaurant will be on March 27th of this year, results. The BJ’s concept has been around for 30 years, it has proven its ability to pass the best of time, and I believe the concept through its various evolutions, over those 30 years, has ever been stronger from a competitive point of view. We have mentioned our pipeline for 2008 in terms of new restaurant development is in excellent shape, we have got a comprehensive strategic and tactical plan in place. So, now our challenge is to continue to correctly and consistently execute our plan and keep our unwavering focus on the longer term growth and success of BJ’s. So that wraps up our prepaid remarks, at this time, we are going to open up the call for questions. And again, if we don’t have time to get to your question on this call, please feel free to call us at our offices, we will help you as much as we can. So, Joshua we are going to open it up here.

Thank you. (Operator Instructions). Our first question comes from the line of Larry Miller, RBC Capital Markets. Please go ahead.

Yeah. Hi guys. I had couple of questions. First, can you just talk about what the economics of the contract brewing is to you guys?

We are not really prepared to really get into those specific economics at this time. We would like to finish the execution of our agreement, and then, probably we will be in a better position to talk about those economics as we get into some actual production. Obviously, over the longer run, when you are able to move a great deal of your beer production into a larger contract brewing situation where they have much greater economies of scale or they can brew in batch sizes of 4 or 500 barrels at a time, we would expect to have a significantly favorable production economics, given what we are able to do on our own. But to really get into specifics of that, I think we got to get our agreement finalized, and get a few brewing runs underneath our belt, and then I think we will be able to talk about it.

I guess, I was just thinking, Jerry in general terms, because obviously it’s something that we don’t model so specifically. So, does it help on the dedicated labor side, and the cost of sales effectively would come down, is that how we should think about it? I wasn’t asking for the terms of the agreement per se?

I’m sorry, I misunderstood you, Larry. Well, obviously, the cost of our beer, whether it’s internally brewed or externally brewed, is reflected in our cost of goods sold. And overtime, we would expect again a favorable impact of that component, but we are not in a position yet to really put a dimension on that.

Okay, that’s fair. And then you talked briefly about some of those investments that you made in the last couple of years, and how they might help in ‘08. Can you kind of give us some flavor for how some of these things could help sales or at least how you hope they might help sales?

Well, I think that when you – first of all, we have a technological platform in our business, within the four walls of our restaurants that I believe frankly is second to none, for casual dining companies of our size and scope of operations. So, when you take a look at KDS when you look at our POS system, when you look at our automated table management system, when you look at our technology with respect to car-side cashiering, when you look at the ability to use handhelds in the dining room on peak meal periods, to process orders, when you look at our upcoming online ordering capability, when you look at call ahead seating and how that can dovetail into our operation using the strength of our table management system, I believe that the synergistic impact of all of the technological investments that we’ve made within the four walls of our restaurants over the past couple of years, are going to be able for us to improve guest satisfaction to effectively process all of the business that’s being offered to us. And frankly, during peak meal periods, to actually increase our productive capacity, we’ve spoken in the past about our off-premise sales channel being quite underdeveloped for BJ’s with only 4 to 5% of our total sales coming through that channel. We know that the mass market casual dining chains over a period of time have doubled from say 5 to 10% based on information that we’ve seen the percentage of their sales in their curbside programs or off-premise channels. So, these are all opportunities from a technological point of view that I think we can leverage. On the other side of the coin, we’ve made significant investments in the overall quality of the BJ’s concept. And it’s hard…

No. I think you, I think you stated a lot there, Jerry. I think, I guess, the only thing to add on there is, I really do think we are differentiated in the mass market casual dining players. And if you are going to go out, and you got to make that decision and you are spending $12, I think the BJ’s dining experience is right now I think better than a lot of mass market players.

Okay. And then just to reconfirm, none of that productivity that you just talked about is really in the 1 to 3% same store sales guidance?

Well, most of that productivity, a lot of that was put in place in the last couple of years, from the pure productivity within the four walls. I think, as Jerry talked about all those initiatives, most of those are going to rollout in the second half of this year, and as a rule, that’s where we think we might have some ability to be on the upside in regards to maybe our comparable restaurant sales.

Well, particularly with respect to the off-premise channel. Once we get online ordering out of test and into a national rollout mode, and you can combine that with car-side cashiering with the handheld devices similar to where you go when you turn in your rental car, to be able to be cashed out in your car, and to really build that channel with improved packaging and then to promote it. That’s one thing that BJ’s frankly, we have been around for 30 years. BJ’s has really never been much of an external promoter of its business with respect to media whether print or radio. The fact of the matter is it has always been a small business until this point. It’s still kind of a small business, and we don’t really get the traditional efficiencies of mass market media that the mass market casual dining guys do with thousands of restaurants obviously. But now we are getting to the point of size, where in certain pockets of our company in certain markets, we do have some early efficiencies, and we are going to get out and be a little more aggressive as I mentioned in my prepared remarks with respect to promoting car side cashiering and online ordering and some of these things that we believe provide a clear differentiation for our concept.

Okay. Thanks, guys.

Okay, Larry.

Our next question comes from the line of Sharon Zackfia, William Blair. Please go ahead.

Hi. Good afternoon. It sounds...

Hi, Sharon.

Hey, Sharon.

Hi. It sounds like you were hinting pretty strongly that comps have gone down to that 1 to 3% range, and we have been really spoiled by you in the past, where you have given these kinds of ranges, and then you completely beat them time and time again. And I guess, I am curious as to, we know there has been weather in California. Are the units outside of California showing any softening?

Not that we’ve noticed. When we think about our comp restaurants, and I think, we said 33 of 50 restaurants are in California. Well, the only other area that we have got a strong base is Texas, where I think we have 11 restaurants today, and probably 7 of those are in the comp base, so that puts you up to 40, and then you’ve got Arizona as well. Arizona has been a little bit softer, I think, people have talked about that. That’s an area of obviously high growth over the last few years. Texas has continued to do extremely well for us even into 2008.

So, I would summarize in saying that again we really prefer not to comment on monthly same-store sales data or inter-quarter same-store sales data by market, because short periods of time don’t necessarily make a trend. And we really hesitate to comment on specific markets, because that kind of gives our competitors a roadmap to go as to where we are doing well. But again to summarize, I think, it’s fair to say that the Texas has really been on target with respect to our same-store sales expectations. It has really been California, particularly Southern California that I think has experienced a little bit of weakness here quarter-to-date. Although consolidated our same-store sales remain up slightly on a quarter-to-date basis. And we’ll just have to see how when this weather gets out of the numbers, and we get past Valentine’s Day and get into March, I think, we’ll have a better assessment and judgment as to what some of the factors might be.

Okay. And then separately, I had a cost question. I know that through the operating and occupancy expense line, we have been seeing some of those initiatives, such as the tableware and linens run through that, and you mentioned some media that you are going to be exploring. So are we going to see – I had previously thought we would just see pressure there in the first half of the year. But, is it more prudent to expect that throughout the full year as you experiment more with media?

Well, I don’t think I would characterize our media, our print media spending as experimental. We spend less than 1% of sales on advertising at BJ’s. I would think that in this environment, we are going to have to get a little more aggressive, but I don’t see us going to 2% or 3% or anything like that. And the types of print media that we will deploy, we do a pretty rigorous ROI analysis, and we really set breakeven guest count hurdle rates that are very, very reasonable for the amount of media that we may consider deploying. So we are not projecting any margin deterioration from ramping up our print media programs a little bit here throughout the rest of the year, because of those factors I have just described.

Okay. Thank you very much.

You are welcome.

(Operator Instructions).

I think...

Our next question is from the line of Greg Ruedy with Stephens, Incorporated. Please go ahead.

Thanks. Good afternoon. As we have rolled into this deteriorating macro, can you kind of walk us through your expectations of the length of the honeymoon period, any changes there versus home and away markets?

Not really. In fact, looking at our new restaurants last year, and we commented both on Columbus as well as Tampa, but even our restaurants in California have opened up really strong and continue to do really well. In fact, I think, we made the comment that the two in the Inland Empire are still over 5 million, they are great ROIs. Every one of our restaurants in California is a really strong restaurant. And we are not seeing any real changes in honeymoon factors or anything from that standpoint. And we wouldn’t stay away, we wouldn’t shy away from building in California at all.

Okay. Given that, before we talk your off-premise opportunities, how many of the 33 in the California comp base do you have close to capacity?

Do we have close to capacity, meaning actual sales capacity, is that what you are...?

Yeah.

I’d probably say none. I think all of our restaurants have the ability to increase sales both at off-peak meal periods. I think all of our restaurants in California still have the ability to increase off-premise sales. So I think there is ability to continue to increase capacity and build real sales in the sense of guest counts in all of our restaurants, both in California as well as in the other restaurants.

All right. Moving to the – your HR build out over the last couple of years, as you have built the pipeline, can you kind of walk us through some of the profiles of maybe where you have had some hits and some misses from the types of people you have brought on, and how do you narrow that focus going forward? And then what’s the leverage opportunity left there? Thanks.

Well, with respect to HR, I would assume, Greg, that you are talking about our restaurant manager pipeline. Last year, we recruited 200 managers, higher quality mangers to join BJ’s. This year, I think, we are going to need about 275, 280 to support our planned growth this year as well as to cover attrition. Back when I got involved with BJ’s -- I am starting my fourth year this month -- but about three years ago, BJ’s generally sourced its restaurant management recruits from the mass market casual dining companies. And at that time, the recruitment, the assessment, the selection, the compensation that was applied to those recruits was pretty much of a mass market casual dining nature. In order for us to successfully elevate the complexity, the quality, the operation, the basic competitive positioning of the BJ’s concept and clearly elevate it to the casual plus level, we needed to make investments, not only in the amount of actual management talent in the pipeline, but the quality of the pipeline. So over the past three years, we have really addressed each one of those factors with respect to that pipeline. We have dramatically upgraded our experience requirements. We have improved the level of assessments in our interview process to ensure a higher quality, more successful candidate that will pop out at the end. We have increased our base levels of compensation slightly to position our compensation from a base perspective, where our concept is -- in between the mass market casual dining players, but not as high as the upscale casual dining players. We have also added additional developmental programs in terms of training and development, including our home office, the corporate portion of that training. So basically, those are all of the things that we have done.…

That does help. That’s great color. Thanks. I will pass it along.

Okay. Thank you. Any other questions. Operator, I believe, we have no other questions at this time.

That is correct, sir. Please go ahead with any closing or concluding remarks.

Well, thank you all for your support, and we look forward to any calls that you might want to send our way here at the home office. Thank you.

Ladies and gentlemen, this does conclude the BJ’s Restaurants Incorporated fourth quarter 2007 results conference call. We would like to thank you for your participation. Have a pleasant day. You may now disconnect.