Good afternoon ladies and gentlemen. And welcome to the Good Times Restaurants, Inc. Fiscal 2017 Fourth Quarter Earnings Call. By now, everyone should have access to the company's fourth quarter earnings release. If not, it can be found at www.goodtimesburgers.com, in the Investors section. As a reminder, a part of today's discussion will include forward-looking statements within the meaning of federal securities laws. These forward-looking statements are not guarantees of future performance and therefore, you should not put undue reliance on them. These statements are also subject to numerous risks and uncertainties that could cause actual results to differ materially from what we expect and, therefore, investors should not place undue reliance on them. And the company undertakes no obligation to update these statements to reflect the events or circumstances that might arise after this call. The company refers you to their recent SEC filings for a more detailed discussion of the risks that could impact our future operating results and financial conditions. Lastly, during today's call, the company will discuss non-GAAP measures, which they believe can be useful in evaluating our performance. The presentation of the additional information should not be considered in isolation or as a substitute for the results prepared in accordance with the GAAP and reconciliation to comparable GAAP measures available in our earnings release. Please note that this event is being recorded. And I would now, like to turn the call over to Boyd Hoback. Please go ahead, sir.

Thank you, William and thanks again everyone for joining us again this afternoon. With me today is, Ryan Zink, our Chief Financial Officer. I'll cover a summary of our fourth quarter and our current developments and Ryan will provide more details on our financial results for the quarter and the fiscal year as well as some additional color on our guidance for fiscal 2018. We're again generally pleased with our results for the fourth quarter particularly with our continued outpacing of our industry segment and our top-line sales trends at both brands. However, we again faced continued cost of sales increases due to escalation in all of our protein costs particularly impacting our fourth quarter operating margins. Ryan will give a little more detail and what we are expecting for fiscal 2018. But we have seen some moderation in beef and baking costs in our first quarter 2018. We took small increases of both brands on August -- price increases on August 1 and which partially offset some of the cost of sales increases in the quarter and we plan to take another small price increase on January 1st of both brands. Due to the disproportionate increase in labor costs in Colorado, we anticipate that our pricing in Colorado during fiscal 2018 and potentially beyond will be more aggressive than elsewhere for our Bad Daddy’s brand, with our primary goal of maintaining our guests’ traffic. Our total revenues increased 31% to $22.584 million during the quarter with comp sales increasing 1.4% of Bad Daddy’s and that’s 1.9% when we factor out the Cherry Creek location increased 33.9% at Good Times. The sales at Good Times marks the fifth straight quarter of sequential improvement in comp sales, and they were slightly better than the guidance given last quarter of plus 3%…

Thanks, Boyd. At our Good Times brand sales increased 11.7% from $7,500,000 last year in the fourth quarter to $8,546,000 in the current year, driven by the 3.9% comps plus strong sales in our new Greeley restaurants those opened during the year. The 3.9% comps for the quarter were slightly better than our guidance of 3%. For the quarter, traffic increased about 0.5% at our comparable units and we have a year-over-year menu price increase of approximately 3.5%. For the year sales increased $1,828,000 in the current year to $30,689,000 again driven by comparable sales of 2.1% for the year and the continued above average performance of our Greeley restaurant. Food and packaging cost at Good Times were 33.4% for the quarter and 32.6% for the year, an increase of 1.0% versus last year's fourth quarter and 0.2% versus fiscal 2016. This increase in the fourth quarter was driven by increased pricing in our key commodities, primarily beef and baking and as Boyd alluded to, which is reflected in the sequential increase of 0.7%. Total labor cost at Good Times increased to 33.4% from 32.4% for the quarter last year and 34.4% for the year versus 32.7% in fiscal 2016. Most of this relates to an increase in the average wage rate of approximately 9% to 10% for the quarter versus the last year. This was due to the extremely competitive labor market we continue to experience here in Colorado. As we've mentioned in past calls, as well as the statutory increase in the Colorado minimum wage of 12% that took place at the beginning of calendar 2017. Restaurant level operating profit, again a non-GAAP measures at Good Times increased $20,000 to $1,333,000 from $1,313,000 last year during the quarter. As a percent of sales, the restaurant level operating margin…

Thanks, Ryan. We believe we are on track to build some significant value for our shareholders. A measure probably aware or maybe aware two of our existing directors filed an amendment to their Form 13D suggesting a partial new board slate along with some strategic initiatives and a focus on improved near-term profitability with an evaluation of the productivity of all of our existing assets. We are working cooperatively with them with them being existing Board members, to really fully understand their ideas and the impact of their suggested strategic initiatives including the balancing of near-term profitability with our longer term growth opportunity to maximize shareholder value. We do not yet have resolution on the proposed Board slate, nor do we have schedule for our annual shareholder meeting, but we hope to have that in the very near future. I’d also like to again to take the opportunity to thank our management and team members for all their hard work and commitment at both Good Times and Bad Daddy's. Appreciate your time with us today. With that, operator we'll open the call for questions.

Thank you. We will now begin the question-and-answer session. [Operator Instructions] And the first question today will be Will Slabaugh with Stephens Inc. Please go ahead.

Good afternoon, guys and thanks for taking my question. This is actually Hugh on for Will today. And my first question centers around value and specifically can you maybe give some early color any changes on what your value proposition will look like for 2018? Just given it appears that the competitive dynamics and consumer preferences will continue to focus on value?

Sure, yes we anticipate particularly after the beginning of the calendar year that that will probably intensify again as it tends to do every year. Our primary value propositions are really three fold. One we have a breakfast value proposition with our 225 Burritos, that is a really strong and competitive price points and that's help sustain our breakfast mix over the last couple of years. The West Coast and the West Coast Double, we had those on a promotional price of $3 and $5. They continue to sustain a really strong sales mix at $3.49 and $5.49, and we'll continue to promote those as part of our key value proposition. We also have the expanded kids meals, again that we've been running at $3 even at $3.99, we think that that's a very competitive value for kids and is drawing in quite a bit of family traffic. We plan on introducing a new spicy chicken sandwich, which we don't have on the menu currently, and that's one of the highest incidents. Sandwiches in QSR and while not specifically a value promotion we think it's going to be a meaningful new product introduction. On the clustered side, next spring and summer, we've done a series where we've offered a little free pod benders, which is our little custard for dogs, which is resonated really strongly and driven meaningful traffic. And we'll do selective LTOs as we move into spring and summer around the custard side. We're still avoiding any permanently low price points in the $1, $2, $3 range. We haven't done any bundling in the 4 for 4 or 2 for 2 or 2 for 6 and all the things that you see competitively. And so far we've been able to sustain our traffic in our same-store sales. So…

Thanks, great. Thank you. And one more if I could, you talked a little bit about this in your prepared remarks. But could you just provide a little bit more color on any updates of what you're expecting to see on the cost of goods or labor inflation outlook in 2018 as a whole?

Sure. We're expecting cost of goods from where we ran in our third and fourth quarter are expecting those actually to be down a little bit, particularly in our core proteins beef and bacon being the big ones are fairly stable and are projected I think to be stable and down a little bit. The pricing that we've taken and fairly aggressive pricing we plan to take will have obviously some positive effect and our goal is to maintain traffic while we do that. So we're planning on slightly lower cost to sales in 2018 than we ran in 2017. Most of the pricing that we're taking is really to absorb the minimum wage increase in Colorado. We are planning again as Ryan said, I think a 3.5% price increase for the balance of 2018 and a little less than on Bad Daddy’s. So the biggest margin difference that you will see on Bad Daddy’s as we continue to open stores and the impact of the Colorado margin hit we take on labor will become less and less impactful. We are anticipating expansion of our operating margin and lower overall labor because we run about a 5.5% lower labor on the same volume in our Southeast restaurants that we do in Colorado. Labor never the less is obviously we are still seeing some escalation in that, most of that is driven by the statutory increase in Colorado, but we’re paying above that minimum in both brands, but it tends to effect the scale overall. We are not seeing quite as much escalation and inflation in the lower minimum wage states, but it is still a tight labor market and we are seeing some inflation. But in Colorado was 8% to 9% last year, which is very, very significant.

Hey, Hugh, this is Ryan. I would just add to that on the costs of goods sold. For both brands over the year, we are in our guidance; I would say we are assuming roughly the same cost of sales that we ran at both at Good Times and at Bad Daddy’s for the entire fiscal 2017. I would tell you that the way that stacks up quarter by quarter is Q1 is a little bit higher and quarters two through four is much closer if not slightly below what we ran for the year in total.

Great, thanks so much for that color.

And our next question comes from Jeremy Hamblin with Dougherty & Company. Please go ahead.

Hi, this is David Burdick on for Jeremy. Thanks for taking my question and congrats on the nice quarter. Just wanted to start out on the Bad Daddy’s side and specifically the new units, kind of given the two that shifted to Q1 with the cadence view then three opening in Q1 and still two in the remaining quarters or could you maybe just walk us through the timing of the 2018 openings?

Yes, sure David, I can walk you through that. So for the balance of this quarter, we do not expect any other openings. And so for Q1 we expect two to be the number that we will open. We will open -- in our guidance we have provided, we have one opening in Q2, which will be near the beginning of Q2 really in the first couple of weeks of January and then we have three in each of the remaining quarters.

Okay, great thank you. And then maybe could you maybe just talk about kind of these the 2007 class of openings and how they have been performing. And then I know it’s still early on the two that opened on October but was hoping maybe you could provide how those two locations have performed as well?

Sure, feel free to jump in Ryan. But we have had generally really strong opening and I think the one of the surprises is the honeymoon periods we have had on the initial openings on some of the stores including the two that opened in October have just opened at extraordinarily high volume. And it takes typically four to six months for them to settle into their stabilized sales trends. As I mentioned in the prepared remarks, we’re anticipating for all eight stores based on how they have opened up to be running a little higher than our average. So we are really happy with that. We have had one opening in Colorado that’s just a little bit under the average, but it’s growing and we expect it to be right at about average as we move into 2018. You want to add on that. But generally David we’re throughout 2017 openings and certainly hope we can do that same thing on these next seven stores in ‘18.

Okay. And then on the Cherry Creek location, not sure I caught what you said, but could you maybe update us on the kind of the progress of the construction around the site and expected timeline?

Well, Boyd I’ll let you kind of handle the construction, because you are little more familiar with that schedule than I am. What I could tell you as it relates to Cherry Creek for the quarter, I think the impact was approximately five-tenth of 1% on cost to sales. As we have entered into the New Year -- on same store sales, yes I apologize. As we've entered into the New Year the impact of that has been significantly less both due to the number of stores and also due to the relative year-over-year performance of the Cherry Creek location. And in the first nine weeks of the period, the impact of Cherry Creek location has had our cost of sales is approximately one-tenth of 1% -- on same-store sales is approximately one-tenth of 1%.

And the comments I made were that the hotel that's been really the most disruptive to is because it comes right up to our -- the line of our patio and is closed the street in front of those for the last nine months or so. That's due to be completed with our grand opening in March we're anticipating this street to open prior to that and get back to two way traffic and our pedestrian traffic hopefully back to normal. And get our patio back which has been -- which we didn't have really all of last summer get that backed by spring time as weather comes around again. So, while we're lapping really pure sales from last year so the same-store sales impact isn't quite as great. We anticipate that should turn hopefully very positive come spring time when the Jacquard Hotel opens next door to us.

Okay, great. Good to hear. And then just a follow-up on margins and wanted to kind to see if you guys see any areas where you can maybe improve margins going forward, is there may be an opportunity on operation side of the business managing hours and kind of the efficiency. Just trying to get an idea of how to think about margins in kind of FY18 and beyond?

Yes, so and it's a little bit different. We run very lean on good times meaning all of our management folks are in production position most of the time. Bad Daddy's it's a little bit different where we have our management managing the store and outer of position. We're working pretty diligently right now on refining our labor model both front of the house and back of house on Bad Daddy’s. We’re looking at products for example that we do from scratch that maybe we're not getting credit for, that can be outsourced we're looking at very prep intensive items and we can ease the prep hours associated with those. Our line functions, it's tough to modify those very much on the back of the house, but we're really looking at more refining our scheduling process from a productivity standpoint on the fringe times as we come in and out of our peak times. Where we have opportunity, we believe is in the front of the house and we're already working on that with our host hours, our server hour and our bar hours to try and lean those up a little bit, we're not a fan nor do we think it fits our concept to go with the tablets on the table. We still run four table stations most of the time. We are -- now that we have more experienced servers we are allowing them to go to five table stations during certain times that allows to staff to make more money, better energy in the restaurant. So, long story short is yes, we think there is some opportunity. It's not a couple points, but we think there is maybe a half to a full point as we continue to refine our labor model on the Bad Daddy’s…

So, in terms of the guidance I would say that at Bad Daddy’s of Colorado, we've modeled between half a point and 400 basis points of labor cost inflation, but that’s offset by significantly greater development in North Carolina. And also we've modeled in about 20 basis points of labor cost deflation there. A combination of just being able to run more efficiently as well as the impact leveraging of better higher pricing menu pricing. I would echo what Boyd had us to say specifically about labor costs and cost of sales and the approach we're taking there. We don't want to damage the concept by try and too cheap in the concept, we are committed to a full service model. But at the same time, both from some of the specific initiatives Boyd talked about as well as just a heightened focus and focus on ops excellence. We hope that we will be able to gain some efficiencies that are not provided in the guidance.

Great guys, thanks for taking my questions and good luck in 2018.

Thanks, David.

[Operator Instructions]. And our next questioner will be Steven Anderson with Maxim Group. Please go ahead.

Yes, good afternoon. I missed part of the call earlier, but I wanted to look at your first of all what kind of rate of labor cost inflation you expect for fiscal '18 how that compared with '17? And I have a follow-up.

Well so. and as I just mentioned, I think the way we've modeled it in Bad Daddy's Colorado is between five-tenth of a percent, a full percent increase in as a percent of sales in labor about two-tenth improvement as a percent of sales in Bad Daddy's outside of Colorado. And then on the Good Times side, we're looking at again it's very similar to what we've modeled for Bad Daddy's Colorado somewhere in the range of 50 to 100 basis points.

Okay, that makes sense. And my follow-up question wanted to just the some of your potential opportunities in off-premise and maybe online mobile sales. Don't know if you looked at that for either for Bad Daddy's or for Good Times. I know Good Times you already have large portion of your sales are in -- to go business, but wanted to see if there is any opportunity for you to maybe use of a technology to maybe get more efficient operations in the back of the house that maybe you get some increased throughput.

Yes, very definitely. We're in test right now with DoorDash here in Colorado with Bad Daddy's. There is certain dynamics I think to make delivery really work and to really gain meaningful sales opportunities there. One is average check, two is just the nature of locations. It tends to work much better in urban locations than suburban locations. But we think that there is opportunity there. We're going to take that as I've said in prior calls kind of a step at a time there is an enormous amount of change going on in that business right now. Some of it is driven by how efficient we can be. We're developing online ordering platform right now that we anticipate will be done close to the end of this month or by mid-January so that we can have full online ordering, which will give us a lot more efficiency in store. Right now, we do a fair amount of takeout business, and we don't know how much exactly of that is delivery, because we're on the different providers websites that we don't know about. But we think that we have an opportunity to increase our takeout sales not only with delivery, but simply by being more efficient in store. I would say we do an average job on takeout right now. And so we're looking at dedicated spaces in our restaurants, we're looking at moderating the number of tables for our line efficiency on how much volume the kitchen can really handle versus the number of seats we have and maybe an opportunity for us to create a section in the restaurant that's more dedicated to takeout and then leveraging that with delivery overtime.

Okay. And just for my reference, what percentage of sales do you get from takeout at Bad Daddy's?

Overall, we're in the kind of low-to-mid single-digits. We have a couple of stores that are in the mid-teens and not coincidentally that happen to be real urban type locations. And so going from 4% to 5% there is probably a few points of opportunity there. I think overtime, as that whole business model gets figured out, I think there is much larger opportunity. Our focus is still growing our sales in the four walls in our trade areas because we think we have still lots of opportunity there as the brand awareness built. But incrementally I think takeout and delivery is an opportunity.

The other thing I would say Steven is we currently do not have online order on our website and that puts us at a competitive disadvantage. During the first quarter we have signed an agreement with a leading online ordering provider, we anticipate having that completed in the next I would say 8 to 10 weeks. At least in test in one location by that point in time.

Great, thanks.

And there are no further questions, so this will conclude the question-and-answer session. I would like to turn the conference back over to Boyd Hoback for any closing remarks.

Thanks for listening today, thanks for your questions and look forward to fiscal 2018. Thank you.