Good day and welcome to the BJ's Restaurants Inc. Fourth Quarter and Fiscal 2014 Results Conference Call. Today's conference is being recorded. At this time, I would like to turn the conference over to Greg Trojan, President and Chief Executive Officer.

Thank you, operator. Good afternoon, everyone and welcome to BJ's Restaurants fiscal 2014 fourth quarter investor conference call and webcast. I'm Greg Trojan, BJ's Chief Executive Officer; and joining me on the call today is Greg Levin, our Chief Financial Officer. And we also have Greg Lynds, our Chief Development Officer and Kevin Mayer, our Chief Marketing Officer on hand for Q&A. After the market closed today, we released our financial results for the fourth quarter of fiscal 2014, which ended on Tuesday, December 30th, 2014. You can view the full text of our earnings release on our Web site at www.bjsrestaurants.com. Our agenda today will start with Dianne Scott, our Director of Corporate Relations, providing our standard cautionary disclosure with respect to forward-looking statements. I will then provide an update on our business and current initiatives. And then Greg Levin, our Chief Financial Officer, will provide a recap of the quarter and some commentary regarding fiscal 2015. After that, we'll open it up to questions. So Dianne, please.

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 18, 2015. We undertake no obligation to publicly update or revise any forward-looking statements or to make any other forward-looking statements, whether as a result of new information, future events or otherwise, unless required to do so by the securities laws. Investors are referred to the full discussion of risks and uncertainties associated with forward-looking statements contained in the company's filings with the Securities and Exchange Commission.

Thanks Dianne. Before I get into my formal remarks for the quarter, I'd like to mention that this will Dianne's last conference call with us thus she is going to retire. So on behalf of everyone at BJ's we'd like to thank her for her 19 years of dedication and loyalty to BJ's. We're going to miss Dianne as an addition to taking care of the investor calls for us, she has up our licensing and corporate governance areas and is largely responsible for obtaining the licenses for the majority of our 158 restaurants. We are all going to miss her and wish her the very best.

Thank you, Greg.

Our Q4 results again demonstrate the important strategies we're making against the key components of the strategic plan outlined last year to drive our top line and we've made comp sales while also maintaining a focus across standard products by managing cost and driving efficiency. Our 7.1% sales growth in Q4 was a result of our continued methodical new restaurant growth along with positive comp sales of 1.2%. A nice acceleration particularly considering we overlapping higher levels of TV advertising, promotional discounting and overall marketing than last year. Our significant restaurant level margin improvement of 330 basis points to 18.4% and the substantial increase in net income to 8.3 million was driven by our positive comp sales coupled with our success and eliminating a reducing cost that do not directly affect the quality and overall value of the BJ's dining experience. We were also more targeted with our promotional efforts versus fiscal 2013 which slowed our traffic momentum a bit but created a much more profitable sales mix in our restaurants. While our guest traffic was relatively flat for the quarter we still outpaced our competition. Our team’s cost management efforts led to some of the best per restaurant weekly operating and cost performances we have seen over the past several years and touched every significant cost center of our business. Notably we have retained significant minimum wage increases in California a state where we also generate benefit from tip credits and actually improved overall labor efficiency by 150 bps which was driven primarily from lower hourly labor cost. Equally impressive is our team’s diligence in driving efficiency in kitchen supplies, repair and maintenance and other operating occupancy costs excluding marketing expense where we improved by approximately 140 basis points versus year ago. Over the last year we looked at…

All right, thanks Greg. As reflected in our results I noted in this afternoon's press release. Throughout 2014 we made excellent progress against our initiative to create a more efficient organization while leveraging our industry leading guest traffic levels and long term expansion program all of which contributed to the significant earnings per share outperformance in Q4. Revenues for the 2014 fourth quarter increased approximately 7.1% year-over-year to 213.9 million while net income and diluted net income per share increased to 8.3 million and $0.31 respectively. The 7.1% increase in fourth quarter revenues reflects in approximate 7.5% increase in total operating week and a slight decrease in average weekly sales of about 0.4%. Our comparable restaurant sales increased 1.2% during the quarter compared with a decrease of 2.7% in last year's fourth quarter. As mentioned on our third quarter conference call, with Halloween moving to Saturday night and New Year is moving into the first quarter of 2015 our comparable restaurant sales in fourth quarter were negatively impacted by about 40 basis points. The 1.2% increase in comparable restaurant sales in the fourth quarter reflects a higher check of approximately 1.4%, which is more than offset by a slight decrease in traffic of 0.2%. The average check increased reflects better menu pricing and comparatively less discounting relative to last year's fourth quarter. Recall in the fiscal 2013 fourth quarter we discounted through the holidays which reduced our average check and led to deleverage margins and revenue flow through. This year we were successful in offering targeted promotions on select items which built the average check during the holiday. In the fourth quarter we had about 2.5% in menu pricing, however as I just mentioned our average check increased approximately 1.4% due to our investment in value this past year. From…

Thank you. [Operator Instructions] We will now take our first question from Brian Bittner with Oppenheimer.

Congratulations, guys. When we go back to February, 2014, you talked about it, you laid out a goal to get to 6% EBIT margins by 2016. Would you say where you stand today, a year later, are you ahead of that goal internally? And, on top of that, when you think about your comps, we just saw incredible leverage off of the low 2% comp. What type of comp do we need, maybe, going forward, to possibly hit that target earlier than the end of 2016 in an optimistic situation?

Brian first of all thank you. In regards to our plan we still continue to look at three year plan that we're going to achieve if you remember that February plan one of things that we talked about there was getting reasonable comp sales. I think we use 2% in the number there and I think that is still something that we look at in regard to trying to leverage our business and grow the overall margin up into that 6% operating number and getting the restaurant other margin to 19%. If you look at the fourth quarter yes we're happy with 18-4 it was on a 1% comp. So you could probably see that if we didn’t get additional comp sales or there should be additional leverage to kind of come through. At the same time we phased on may be some headwinds that we’re fully I know that’s a contemplate but you didn’t understand how the market was going to react overtime and what I mean by that is we saw higher food cost inflation. So even as we put together our three year plan we expect to cost sales frankly to say closer to 25% they bumped up to 25-6 we've got a work through that year with some of the other initiatives are going on that’s one of those things that will help us get closer to the 19% margin I think the other things that we're working on will continue to drive the cost side of our business. And then as I said the most important part of that is driving top line sales and we're still going to stick to the fact that we need reasonable comp sales probably in two plus percent range to continue to leverage I was seeing throughout our entire P&L.

We'll now take our next question from David Tarantino with Robert W. Baird.

Congratulations on great results. So my question is about the sales strength you're seeing in the first quarter and just wondering if you kind a step back and think about all the reasons why sales might be accelerating the way they are what are your thoughts on why you've seen such strong comps so far. I think you mentioned Greg that you're not seeing a weather benefit so is it something you're doing internally or do you think maybe the economy is getting better or some combination of that.

We are seeing some weather benefit we just not see to the same aspect given our the 5% of our restaurant in California in particular but Texas was hit hard last year by ice storms and Oklahoma et cetera and our Ohio restaurants. So please don’t misunderstand us we are seeing some of that benefit, just not to the same extent perhaps so of other. I think the biggest driver on a macro basis because we're not the only ones out there seeing this momentum is and the entire industry thinks that will result early this year is be a fundamentally the consumer seeing the end on more confident plays overall. We do think this tax return dynamic is an interesting one you look at the data and clearly the timing and the acceleration of returns versus last year is pretty significantly different. So we do think that was a benefit to your early parts of the quarter obviously between now and April that will even out. But that we think is helped gas price have helped and we've said all along we didn’t see the perhaps that effecting our business credit as much as other people were forecasting and the latest retail numbers sort of there out. But it certainly has occurred right and that’s been another help. So all of those macro factors together have been big benefits and then we have hammered for quite a long time and focusing on this traffic and through value and innovation in the value and speed and getting better that marketing. So as was usually the case of the combination we think our traffic numbers in particularly there are out that we're outperforming even the rising tight because of the things that we’re doing particularly menu and for speed et cetera. But at the end of the day we're happy to have a combination of both working in our favor.

Great that’s helpful and may be one for Greg Levin. You gave some fairly detailed assumptions on the cost ratios you're making cost ratios across the PNL you're making for this year what is that assume as far as comps I think maybe you eluted to it in the last question. Where do you assume comp settle into after the first quarter.

David we don’t give specific comp guidance in that standpoint as I mentioned while we see a mid-single digits right now I do expect it to come down a little bit and I think we're still picking somewhere hopefully not a low single digit from that standpoint.

We’ll take our next question from John Glass with Morgan Stanley.

Can you talk a little about what you're expectations for mixes in 2015. If you look over that menu roll out from last year this mix flat now or do you think you still have to see similar value promotions to drive mix down then we falls from advertising result.

In general we're not looking at anything at the level of last year for sure. But we do have some menu innovations to that we think will be great additions to the menu throughout this year. But they don’t represent a change from overall guests chat perspective like we experienced last year. So in general I would answer that question as it’s more flat than driving it or negatively impacting it from that perspective.

In the current advertising that was a percentage of sales do you think that’s sustainable or over time do you think that goes higher given that to increase your share seem to be rather defilements to the level for the brand for the next couple of years?

I think we’re still young in that concept we’re generally filling our way to ultimately where that balance is but in the near term 2015 we’re thinking about the levels that you have seen us spend in the last year.

We’ll take our next question from Jeffrey Bernstein with Barclays.

Two questions, just one on the unit growth side. Just wondering conceptually or wonder if you can tell us maybe your percentage of stores in new versus existing markets but is it safe to assume that when you first go into these new markets the AUVs would be are you seeing AUVs be a little lower because of the lack of brand recognition and the quite higher because of just lack of efficiency when you first go into a new market or perhaps opposite that the AUVs are actually stronger because it’s kind of the new brand and address some initial excitement? I am just wondering what the mix of new and existing is and then what you see from an AUV and margin standpoint in a new market? And then I had one follow up.

Jeff, this is Greg Levin here. So a couple of things here one is the majority of our restaurants going forward you can kind of quantify what we say I guess got there in new markets and what I mean by that is as we talked about it over the last year we currently aren’t building really any in California and very little in Texas kind of our two biggest markets that are basically 90 of a 158 restaurants or so those two markets. We’re still adding some restaurants in Florida the majority of our restaurants are going to be kind of in the mid-Atlantic and going at to East Coast it’s going to be a few restaurants in the Ohio valley and then also kind of connecting Texas and Florida in the Southeast area. And while we already have some restaurants in those areas so we don’t consider them entirely new markets we’re building out the cluster in those areas versus maybe three or four years ago when it was really there is California, Texas and beginning in Florida from a build out standpoint. So there is a little change and what that means and what we’re seeing out of that is with the lack of brand awareness the restaurants coming out of the gate are probably maybe a little less than what we’ve seen in the past from the top line sales perspective. However the hard part about that and I talked about this before is the fact that they’re just not California restaurant and what I mean by that for those that have followed BJ’s we have consistently said look in California our restaurants again open up at a 170% of volume and we’re going to settling that a 120% or 130% of volume and frankly they…

Got it, and then just the one other question you mentioned the couple of times in the call your comps and I guess you’ve benchmarked I think you mentioned Knapp-Track you also mentioned black box as well so just wondering who do you define as your one of those your kind of the main competitive set and how would you think it performed versus those I mean in terms of get one talking about and improving macro and everyone seem their early trends. But didn’t know whether you think that you would be outpacing that index or whether because you have volumes and what not but you would perhaps not see as much of a bounce back in recovery stage I think we’ve heard that from Cheesecake Factory where they sort of just not as likely that we see as much upside as the industry because maybe we didn’t lose as much or maybe their volumes are already still high. So I am just wondering how you think you are performing and improving that across the industry?

There is a couple of things there we’re not look at first of all we look at both of them I think both of them relevant and it give good information both on from how trends are going and we try to see, there is obviously differences there what's going on to kind of analyze our business against them. One of the most important things that we tend to look at is our comp sales are going to be dominated really by kind of three main areas and that is California, Texas and Florida to some degree. And so what we tend to do is try to look at those different entities indexes I guess and look at them and those specific markets and we look at them really both on top line sales and guest traffic and right now because of the decision that we've made over the last year where we're taking a little bit of menu mix hit, we tend to look at what's going on with guest traffic and can we outperform it? Now I'll tell you everybody sitting in this room and frankly I'd venture to guest that the same thing in every other office out there in restaurant phase that everybody is really down competitively and frankly I want to be beating those indexes, I know Greg Trojan does - BJ's does. So we look at it and we get very happy that we're beaten them from a guest traffic stand point frankly I would like to be beaten them from the sales standpoint and I think we have an opportunity there. In regard to our high average unit volume it always makes it more challenging but the fact is that's what we're here to do, figure out better ways to drive more guest into our restaurant whether it's using the mobile app, whether it's looking at - and Project Q to be fastening our kitchen to service more guest those are offering that we'll continue to look at to drive more guest into our restaurants.

And what we've shown, just to add on to Greg's comment there is no one internally here ever - what we're doing already doing someone's business we can't grow comp sales then and our traffic numbers which is really the limiting factor in terms of capacity I've shown that over the last few quarters and last year's trend and beating traffic pretty delightedly to increase - those industries. And as Greg mentioned the factor has been on the same store sales where we've liked a little bit has been we've taken our guest check and kept that essentially flat versus some pretty significant pricing out there -- so, John asked a question earlier, we don't see that same kind of guest check headwind in this coming year as we saw last year. We should be able to leverage those traffic gains into same kind of overall same store sale being better or commenced - traffic that's the medium to long term -- .

We will take our next question from Jeff Farmer with Wells Fargo.

Great, thanks. Greg Levin, thinking about how we're going to position, so looking back to 2014 or several periods where you called out some same store sales choppiness as you shifted from both sort of markets and planned periods I think you just call about potentially mid-March as a potential mismatch rolling over 2014 and new venue introduction. Are there any other periods that we should be thinking about as we sort of model comps Q2, Q3, Q4 moving forward?

No, I don't think so. Jeff, I don't have the full calendar in front of me, but is there kind of still phase in Q2 not moving around from a weak standpoint. Spring break - when the colleges are from that standpoint. New Year's eve for Q4 will be again in 2016 from this standpoint so I think overall everything kind of aligns up the same. In regards to really thinking about from a media or marketing spending, March was our heaviest marketing of last year really with the launch of that new menu while we've mainly lower overlapped here with some FSIs or digital or everything as we do but not to the extent really in March.

All right, that's helpful and then you gave us a lot of color but bottom line was just looking at all four quarters of '14 you pretty handily beat your guidance on both the labor occupancy and operating lines, so I guess I'm just curious that's the function of I guess delivering the Project Q initiatives or seeing results from the Project Q initiatives more quickly that you'd expected or it was just sort of a greater opportunity that you'd expected with Project Q?

I'd want to clarify this point, because it's a lot. Project Q is really around labor, top line sales, menu innovation and so on and then the operating occupancy is kind of a separate project for say. So when I look at between those two areas, I think Project Q changes that we've implemented really start to hit more towards the second half of this year some of it - a little bit by California minimum wage and some of that unfortunately get a masked a little bit here by the affordable carrack in 2015 but not having Project Q out there would have been a lot more stress I think on that the labor line in our restaurant. In regards to the operating occupancy cost, when I look at that and look at it from trend standpoint, Q1 and Q2 both were around 21,000-21,500 for operating as the Q2 is our highest weakly sales average so in Q3 and Q4 we've been able to drop that down into the mid-20,500 per week, this excludes marketing. So, I don't necessarily know as you came on quicker that what we were expecting, I think one of the things that people miss a little bit Jeff is unfortunately we have to go through 2013 to get the improvement of 2014 and what I mean by this is, we've spent a lot of time in 2013 planning for these things. So that's how they start to rollout into 2014 for example, we brought in new place as you talked about in several way brought that in from overseas at a lower price - it takes six months to get that to rollout. So we are working on that in 2013 to get that a rollout in 2014. So I'm not sure it move in quicker than what we expected I think it's kind of moving online I think really the factor matter that in the last two quarters Q3 and Q4 we have some positive comp sales and that helps to leverage you leverage you overall on entire P&L.

Our next question comes from Will Slabaugh with Stephens Inc.

I hate to beat a dead horse with the margin here. As you get 18.4% this quarter thinking about that longer term 19% level of about '16 I wonder and realizing this in to know that you're wonder sort of as we approached next year, in your mind what potential is for us to be go ahead and hit that earlier and if you have a longer term it should be on that in mind to this point.

Will I guess the best way to answer that question is when we go said your 19% margin that’s on an annual basis. So will there be a quarter or two we're above the 19%. I think there is an opportunity there in Q2 of this year to five negative 1.7% negative comp we have restaurant level EBITA of 18.6% so I could see us with solid comps getting above that from certain quarters. But I wanted to finish the year and that 19% and then continue to drive it from there. Once we reached 19% it’s now like we've got to the top of the mountain and we're going roll out our picnic basket we're here to continue working and drive this business and become more efficient and leverage our business thus we can.

One quick follow up if I could the longer term unit growth picture. You talk about that per footage growth in the 10% range for a while now and I realize the math’s works out you being only 12 below that for 1Q in terms of 2015. But considering the improvements that you're seeing now is that give you more confidence to maybe take that percentage growth rate up a little bit or you going to be comfortable longer term in that low double digit range.

The limiting factor ultimately for us and there is some variability when we say low double digit right. But we’re not going to we're not going to be 20% in restaurant re-growth company unless we figure out how to come mass the produce people. And the experience managers and the folk that take to run our restaurant we're everybody thinks that are concept in retail and restaurant is different but the volumes that we run in our restaurant we just can't tie our folks other concepts and they come as general manager of these days. So that tends to be a limiting factor we do think we have the capability to open more restaurants on an absolute number and give some of what more aggressive there but it's not going to be a - because of the people factors that it take to do this the right way.

Our next question comes from Andy Barish with Jeffries.

Hey guys wondering on marketing for 2015 if there are significant shifts falling in couple years of looking at TV and using a lot of print and then secondly can you give us an update sort of the BJs app and how that’s performed kind of versus your expectations.

I think I'll answer the Media mix question in the way we're that is something that we continue to test and evolve in we have a better idea of where and you're getting more of efficient as I mentioned my remarks around TV and we're seeing even better results in some of our key areas that we've been running in. So we see that being a continuing part of our mixed and we're also seeing some encouraging results on the things we're doing on the digital side that range from traffic driving in the world of search. But also in social et cetera all the usual areas you hear people talking about. But as obviously quite measurable and we're seeing some underlying dynamic there that our quite encouraging. So in general much like you're hearing other people talk about is our shifts towards digital spend I wouldn’t call it again world changing but we're definitely waiting more resources on the digital side overall and then last but not least we are working on having success on mining is been then base to our loyalty program and doing that in segmented focus way we're leading almost active discounting to folks we haven’t seen in a while and that’s driving some real traffic for us as well. So that’s in general have thinking about it. We're still testing all kinds of media outside of that, different forms within those umbrellas. You know, on and market basis but in general that’s however thinking about the trends.

And in regards to the app it's performing exactly kid of where we thought it was going to be. We said we're early we're not expecting somebody with your usage meaning your amount of vacations in casual dining is as great and let’s call it QSR in the coffee from that standpoint. We continued to get great feedback from the guests that use it and love it especially for the table side of things for take-out for putting their name on the wait list and mobile pay is phenomenal if you guys have ever used the mobile pay and now we’ve got our new restaurant in Nanuet on the East Coast that can get out there. Mobile pay is an unbelievable changer in regard to casual dining and I do think over time it will catch on different from that standpoint and the other thing that we would say is we’re actually kind of happy that we’re seeing other casual dining concepts go into this areas of business because it provides a little bit wider adoption for consumers to think about it. So it’s a small part of our business but something that we continue to like having out there and like having to first mover advantage for us.

We’ll take our next question from Joshua Long with Piper Jaffray.

I was curious as you’ve executed against project Q and then continue to roll out the new smaller prototype which is maybe easier or less complex on a relative basis to your older format. If that has changed your thinking in terms of what complexity means in terms of the BJ’s menu? So you’ve gone from 180 down to now 137 menu items as you’ve gotten more comfortable and you’ve cut out a lot of the more complex things. Is that maybe creates more opportunity for reduction or maybe even go the other way with allowing some of these menu innovations to the additions to the menu? Just trying to think about kind of where the ultimate menu might shake out as you gotten better at executing on complexity?

What I would say overall Joshua is we don’t have hard and fast number in mind here but having said that we don’t feel and I don’t believe that we’re done in terms of getting our menu down a bit further. And we’ve been quite cautious in our core legacy market particularly in California where people are attached to the items and we don’t have things on our menu today that aren’t selling so we figured we’d eliminated those long ago. So, just as a frame reference our new restaurants are opening with a menu that’s closer in the low ones quantities and so folks that are used to BJ’s find that to be as plenty of diversity and lots of variety on our menu. So that may give you a sense of sort of the range that we think is reasonable somewhere in that range in that ballpark. And then in terms of new items one of the reasons we’re doing this is though we make space and effective capacity in our kitchen so that we can introduce new items. But again not a hard and fast rule but for items that we’re contemplating as permanent members of the menu versus LTOs in general we have a conversation around we’re going to take in the sustained number of items off the menu if not a few more than we add, so that over time we’re not back to where we were a year and half ago where we were basically maxed out. So we’re trying to maintain quite a good discipline in regards to that that doesn’t mean menu to menu it’s going to exactly work that way but philosophically maintaining that level of discipline so that we can execute in the kitchen is important.

Understood, and then thinking more about off premise sales opportunities something we’ve talked about in the past and we spend a lot of time talking about things that are going on in the restaurant in terms of menu innovations and then just easing the overall guest experience. So I was curious if you can provide an update around off premise sales whether that catering or two go and then is there an opportunity to leverage some of these tech tools that you have invested in overtime to drive that pizza business as well?

Josh this is Greg Levin. First of all as I mentioned I think earlier the mobile app is great for off premise and take out and we get a lot of guests users for that and the ability as you can imagine the place your order pay for and then just then just pick it up is tremendous and that’s going to help grow that channel there. We’ll continue to work off premise usually through local restaurant marketing events and everything for last year it wasn’t one of the highest priorities for us meaning we didn’t we still have specific initiatives against it. But we continue to evaluate our catering offering from off premise standpoint and we’re looking at is there other ways on the mobile app to do things around party packs and everything. So it’s something that we’ll continue to evaluate especially with our deep dish pizza we think it can be more so we’ll continue to work it but it wasn’t for at least 2014 one of our major initiatives versus some of the other things we are working on.

We’ll take our next question from Sharon Zackfia with William Blair.

You talked a little bit about the new prototype and how it seem like it might even be a more labor efficient. I was just wondering if you could give us any kind of inside on what the restaurant level margin differential might be between the new prototype and the former format that you used.

Sharon I can’t it’s a great question and the reason I can’t -- and first of all the restaurants are less than six months old so they haven’t necessarily reached for full maturity from that standpoint the bigger thing that I’ve seen and I talked about this - forgive me if I rehashed stuff I talked about in the past and that is I always describe our margins kind of like a football game and that is, as a first six months or so you move the ball down the field and you get down to about the 20 yard line and this takes the remaining six months to a year to get over from 20 yard line into the end zone and I'd tell you right now based on our newer restaurants we marched the ball down the field to the 20 yard line faster than where we've in the past. So, it took six months maybe it's taken five or four months right now to get down there all through a combination of mini things by the way it's not just a new prototype it's a back as Greg Trojan just mentioned that our newer restaurants are opening up with 137 menu items or less in certain locations. And then the restaurants themselves being a little bit of smaller makes it easy. So, it's a combination of that and other things around Project Q but until we get probably a year end to this meaning until next August, it's hard to see where they're exactly going to settle but I'd tell you just a fact that getting to mature margins quicker that in itself is worth a whole lot in regards to return on investment capital.

Our next question comes from Nick Setyan with Wedbush Securities.

Hi, -- congrats again on a great quarter. My question is more trying to clarify the - group of locations. Are those included in the 15 units for next year and I think of the comment that they just have a small testing room, is that in addition to like a restaurants Greg, or is that - how should think about, how would it be sales little bit differently?

Yes, Nick it's a great question. Those will just having small testing rooms, they will not be in our sales from that standpoint. It's not count in the 15 restaurants, so 15 restaurants we're building basically two brewpubs by the small testing room. Whatever we sell in that testing room will basically be a credit against your cost so to speak.

Our final question today comes from Paul Westra with Stifel.

Great, thanks, good afternoon. Couple of follow up questions, one is on your commodity cost outlook, you've got it for the 15 years to be stay 1.5 versus your target 2.5, can you give a little color where that savings coming from and how much you contracted now as there into calendar '15? And I have one more follow up.

All right, couple of things in regard to that specifically we contracted about 60% of our commodities are contracted for the full year and where we've seen the come down is two areas, one is chickens come down a little bit from we thought it was going to be but frankly chicken is going to be more expensive for us as well as continued beef in that regard. But where we're expecting to get it to come down a little bit really Paul is the dairy cost and cheese and we've locked in I'd say about 50% as are achieved for next year. So that's the big are that's coming down as well as couple of other areas going to next year and sea food will be lower as well. So, dairy and sea food come down pretty much contracted and then chicken and beef are up a little bit.

Great and then a last question is I think you said mid to low 18% range and I hope total margins you hit this calendar year is obviously just throughout 18.4, seasonally fourth quarter is usually one of your weakest but not the weakest quarter so we think that why not perhaps a little bit more than that or is there maybe something some other conservatives - on that?

Well, first of all, I'm always going to take the conservative wrote but as I look through just this last year, Q1 was 17, Q2 pumped up at 18.6, Q3 was 17.6 and maybe just hit an 18.4 in Q4. So you look through its still kind of up and down based on weekly sales averages through last year. The other thing is the inflationary environment as we go into next year will get offset a little bit by project and some of other cost containment but they're getting come through a little bit. So for instance the throughput that we just saw here in Q4 all of the sudden come Q1 of next year and we're going to get that 30 to 40 basis points increase from the affordable carrack. So, I think we've ability to offset it, we're not going to be able to get the entire Project Q savings dollar for dollar flowing through because some of it will be offset from the ACA. So, that's why when I trying to look at how we're stair stepping our business I tend to think that will end up 2014 kind of in that 18% range as I talked about on an annual basis setting ourselves up for 2016 to get to the 19 plus percent range.

Kind of maybe one last question, pricing is at 3% here in the first quarter than 2.5 in the second we assume 2.5 reminder of the year?

I don't know exactly nowhere the reminder of the year is going to be but if you remember last year at this time Paul we rolled out our new menu of 1.4%, that kind of for lack of the better term rolled out March 01st, is called the new menu. So, we're sitting at about 3% right now or so and then the one four rolls off so put you down in some kind of the middle whatever 1.5 range I guess and then we're going to have about 1% or so kind of come on right at the same time that's how we get to the kind of the mid to 2.5% range and then as we get closer to the summer, we'll give you an idea of what we're seeing in regards to maybe additional pricing.

Ladies and gentlemen, that concludes today's question-and-answer session and today's presentation. Thank you for your participation and have a good night.