Welcome to the Red Robin Gourmet Burgers Incorporated fourth quarter 2008 financial results conference call. At this time all participants have been placed in a listen only mode and the floor will be open for your questions following the presentation. It is now my pleasure to turn the floor over to your host Katie Scherping, Chief Financial Officer of Red Robin.

Before I get started I need to remind everyone that part of today’s discussion particularly but not limited to our outlook and development expectations will include forward-looking statements. These statements will include but not be limited to references to our margins, new restaurant openings or NROs, trends, costs and administrative expenses and other expectations. Also these statements are based on what we expect as of this conference call and we undertake no obligation to update these statements to reflect events or circumstances that might arise after this call. These forward-looking statements are not guarantees of future performance and therefore investors should not place undue reliance on them. We refer all of you to our 10K and our 10Q filings with the SEC for a more detailed discussion of the risks that could impact our future operating results and financial conditions. I also want to inform our listeners that we will make some references to non-GAAP financial measures today during our call. You will find supplemental data in our press release on schedules one and two which reconcile our non-GAAP measures to our GAAP results. Now, I’d like to turn the call over to Denny Mullen, Chairman and Chief Executive Officer.

We also have with us Eric Houseman, our President and Chief Operating Officer and Susan Lintonsmith, our Chief Marketing Officer. Eric will provide some details on fourth quarter results as well as an update on our operations initiatives and Susan will talk about what we are doing on the marketing front to drive guest traffic in the current business environment which continues to be very challenging. Then Katie will review in detail the most recent financial statements and discuss our business outlook. But first, let’s start off with a quick review of the fiscal 2008 results compared to fiscal 2007. Total revenues increased almost 14% to $869.2 million while company owned comparable restaurant sales decreased 1.4% for the full fiscal year. Restaurant level operating profit increased 2.8% to $157.2 million or 18.4% of revenue compared to 20.5% a year ago. GAAP basis diluted earnings per share for the fiscal year 2008 were $1.69 compared to $1.82 last year and $0.38 for the 2008 fiscal fourth quarter compared to $0.60 in the fourth quarter 2007. Adjusted or non-GAAP diluted EPS for the 2008 fiscal year were $1.81 compared to $1.98 in 2007 and $0.43 in the 2008 fourth quarter compared to $0.60 in the fourth quarter a year ago. In 2008 we acquired the assets of an additional 15 existing franchise Red Robin restaurants in four states which added more than $25 million in sales and $0.06 per diluted share to our results. Finally, in 2008 we opened a total of 41 new Red Robin restaurants, 31 company owned and 10 franchise locations ending the year with 294 company owned restaurants and 129 franchise locations for a total of 423 Red Robin locations in North America. We are proud of what we were able to accomplish in 2008 despite all the…

In the fourth quarter of 2008 our comp store sales decrease of 7.4% was driven by a 9.6% decrease in guest counts partially offset by a 2.2% increase in average check. Please note that the extremely poor weather in December in the Pacific Northwest where nearly one fifth of our company owned restaurants are located negatively impacted our total comp store sales by about 1% during Q4. For comparison we reported a 2.7% comp store sales increase in the fourth quarter of 2007 driven by a 1.5% decrease in guest counts that was more than offset by a 4.2% higher price in mix. Clearly, we’re facing challenges in guest counts in this difficult environment. During the first seven weeks of the 16 week first quarter our comp store sales were down 4.6%. Week expect the first quarter 2009 to be the most difficult comparison of the year as we go up against our most successful quarter of 2008 in which comps were up 3.8%. We are just now going up against our advertising that begin on February 4th of last year so for those next few weeks we expect to see our comp store sales comparisons get even more challenging. You will recall that a restaurant enters our comparable base five full quarters after it opens. Our fourth quarter had 241 company owned comparable restaurants out of the 294 total company owned restaurants. Average weekly sales for the restaurants in our comparable base was $57,073 during the fourth quarter of 2008 compared to $61,635 for the same restaurants in the fourth quarter of last year. Average weekly sales for our 39 non-comparable restaurants was 55,188 during the fourth quarter of 2000 compared with $54,022 for the 41 non-comparable restaurants a year earlier. The 15 franchise restaurants that we acquired in…

Our main driver of brand awareness in 2007 and 2008 was our department of deliciousness advertising campaign on national cable television. The intent of this national campaign was to drive brand awareness and understanding especially in our newer markets and based on our latest third party research we achieved this goal. We drove higher brand awareness in all markets with significant gains in our less established Red Robin markets. Also, the campaign drove strong gains in trial as new guests saw our ads and they came in to try us. In the second half of 2008 while we continued our brand building campaign on national cable TV we began to see a slowdown in incremental traffic so to help inform our 2009 plan we tested both pricing and product news on TV in two markets in Q4. Based on this test and the overall results of our advertising in the second half of 2008, we concluded that in this current economic environment it would be more prudent to capitalize on the awareness gains and focus our marketing dollars on more targeted traffic driving and retention initiatives in 2009. Therefore, we made the decision to reduce our contribution to the national advertising fund to .25% of revenue in 2009 down from 1.5% in 2008. We believe awareness and purchase intent for Red Robin remain strong at this current environment even without national television. We feel that TV momentum has helped us in recent new restaurant openings. Two of our new restaurants last month broke company records in their opening weeks. In 2009 we’re investing significantly more in our national online plan which continues to work really well for us as well as targeted direct mail campaigns and local initiatives which all support product news. We’ll focus our marketing communication on our…

First of all if you haven’t already seen our news release for this quarter’s results you can find it on our website at www.RedRobin.com in the investor relations section. Our fourth quarter 2008 was a 12 week period ending December 28th. Total revenues for the quarter which consist of restaurant sales and franchise royalties increased 8% to $198.6 million from $183.8 million last year. Restaurant sales grew 8.4% to $195.6 million from $180.4 million and consisted of $151.4 million in sales from our 241 comp restaurants, $9.2 million from the 2008 acquired restaurants and $25 million in sales from our 39 non-comparable restaurants. As Eric mentioned the 15 franchise restaurants acquired in 2008 have not been included in our comp stores sales metric yet. Franchise royalties and fees decreased 14.1% in the fourth quarter to $3 million and exclude the royalty contributions from these 2008 acquired restaurants from which we recognized $355,000 in royalty revenue in the fourth quarter of 2007. The 96 comp restaurants in the US franchise system reported a 5.3% decrease in same store sales while the 18 comp restaurants in the Canadian franchise system reported a 0.5% increase in the same store sales for the fourth quarter. Our restaurant level operating profit margin was 17.1% which compared to 21.4% reported in the fourth quarter of 2007. The decreases attributed to commodity cost pressures that we’ve experienced throughout 2008 and also the deleveraging of fixed costs as we saw declines in average restaurant sales volumes from the fourth quarter of 2007. For the full year our restaurant level operating profit margin declined to 18.4% from 20.5% in 2007 or 210 basis points which is about what we expected. Depreciation and amortization expense during the fourth quarter was 6.5% of total revenues, about 50 basis points higher than…

Without a doubt it continues to be a tough operating environment. We have aggressive plans to drive traffic, we have a strong brand and we will continue to manage costs and our capital expenditures carefully to maximize cash flow and strengthen our balance sheet. We also believe that we have an opportunity to take market share as the number of casual dining seats shrink. Most importantly we know we have the best team members in the casual dining business to make that happen. With that I’ll be ready to take your questions.

(Operator Instructions) Your first question comes from Matthew DiFrisco – Oppenheimer & Co. Matthew DiFrisco – Oppenheimer & Co.: Denny, I guess just following up on the last comment there with respect to gaining share. I guess you’re not going to be advertising as much as you did the year before and you’re going to be slowing your growth. How, do you expect to gain share I guess is just the question? And, do you expect then overall that you’re going to see continuation of contraction throughout ’09 as it appears in your traffic guidance number in your press release?

I think it’s going to be individual location by individual location where we have a number of instances where both our chain competitors and private operators have closed and we would expect we would clearly gain share in those markets so I think it is a building process. It isn’t going to happen next week and next month but it will happen as we go forward and as we make decisions about continuing development. Also, we haven’t given guidance so we will see how our marketing efforts work as they can help us drive share as we go forward. Matthew DiFrisco – Oppenheimer & Co.: Well, if I’m not mistaken there’s 25 basis points less than what you also spent in ’07?

Yes. We spent about $11 million system wide in 2007. Matthew DiFrisco – Oppenheimer & Co.: To clarify, I think when you were helping us calculate the credit covenant, the debt covenant you then do not have to capitalize your operating leases?

No, we do not.

We do not.

Your next question comes from Jeffrey D. Farmer – Jefferies & Company. Jeffrey D. Farmer – Jefferies & Company: If you look at the 28 weeks in ’08 that you were not running national cable versus the 24 weeks or so that you were running cable, was there a meaningful difference in same store sales and traffic especially as you got towards the back half of ’08? All of ’08 in general but in terms of when the macroeconomic situation got sort of far worse?

If I think I understand your question, in the first quarter of ’08 we were up 3.8% and we started TV in the earlier ’08 than we did in ’07, we started it the Monday after Super Bowl so that’s why we said the first quarter our comparisons would be much more difficult and we weren’t impacted at that point we didn’t feel we were impacted by the macroeconomic environment. The second flights and the third flights were kind of pretty much lined up until the very end when we had three weeks that were standalone that weren’t there in ’07 and we saw as we reported in the quarterly calls continued declines throughout the back half of last year. Jeffrey D. Farmer – Jefferies & Company: When you finally pull your advertising in ’09 which you already have a lot of your franchisees believe that because it was more of a brand based advertising campaign that it won’t have as great of an impact as some have feared. I was just curious if you agreed with that?

Only if you tell me which franchisees you’re talking about. I don’t have any comment on that. That’s why we’re not making projections. We’ll find out pretty quickly.

Your next question comes from [Brad Lettington – Keybanc Capital Markets]. [Brad Lettington – Keybanc Capital Markets]: I wanted to start of talking about on the G&A line if you include I guess roughly $3.1 million that will be the one-time non-cash charge is there opportunity on an absolute dollar basis and again, including that non-cash charge to be relatively flat year-over-year or is that still going to go up?

The charge that we’re talking about related to the tender offer is that what you’re asking? [Brad Lettington – Keybanc Capital Markets]: Yes.

It’s $4 million. [Brad Lettington – Keybanc Capital Markets]: But I thought 23% of that went in to the restaurant level?

You’re right, so that component it’s the same percentage roughly as we’ve incurred over the years G&A split so our total spend including the one-time charge is going to be 6.5 very comparable to the 6.1 we’ve taken in the past so that won’t really [inaudible] your G&A. So, year-over-year we’ll see about $6 million more related to performance based bonus assumptions. So, if you just take 2008 and add $6 million to it that’s about where we think we’ll land in 2009. [Brad Lettington – Keybanc Capital Markets]: So then probably close, it’s an absolute dollar over that $64.2 million, $5 to $7 million more?

That’s about right? [Brad Lettington – Keybanc Capital Markets]: Then looking at your guidance, it says if no price increase were taken this is where margins would go potentially. Now, that’s not saying that you definitely won’t take a price it’s just that there’s not one planned at this point in time, is that correct?

That’s correct. [Brad Lettington – Keybanc Capital Markets]: Also, should we expect any additional closures in ’09 or are you still evaluating other stores at this point?

Brad, this is a continuous process. Based on the evaluation that we did in the fourth quarter the decision was made on these four. We’ll continue to evaluate as we move forward. We don’t have any decisions at this time for any more than four.

Your next question comes from Joseph Buckley – Bank of America. Joseph Buckley – Bank of America: You shared the 4.6% comp decline for the first seven weeks of ’08 but you mentioned the advertising in ’08 started February 4th so I guess I’m curious what that down 4.6% compares against for the first seven weeks just to kind of gage how we should think about the full quarter?

The rest of the quarter gets much more difficult.

As we said the TV started so obviously it gets more difficult. We’re not going to get granular by week. We gave you the first seven weeks to give you some indication of where we were since we weren’t getting guidance so we didn’t get too far of track there. It will be more difficult as we go forward offset by the fact that we don’t have the media expense along with it.

Keep in mind last year that for the first quarter 2008 we did 3.9, we had 4.3% running in price. Joseph Buckley – Bank of America: What I’m trying to figure is it 200 or 300 basis points difference in the back nine weeks in terms of the compare?

It gets more difficult. We’re not going to say which is why we’re not giving out guidance.

We’re not sitting here waiting for it. We’ve obviously rolled out some marketing programs, etc. so we don’t know what the offsets are. We just don’t know at this point. Joseph Buckley – Bank of America: Then Katie, I think you did clarify this already but so the stock compensation expense is split between G&A and operating expenses, the marketing expenses is all in the restaurant operating expenses?

Yes. It was lumpy in 2008 based on when we did our media flights. It neutralized for the full year so there really wasn’t an impact for the full year but in 2009 it will be fairly smooth throughout the year we won’t see that lumpiness hitting the G&A like we saw in 2007 and 2008. Joseph Buckley – Bank of America: What are bonuses based on for 2009?

An internal plan. Joseph Buckley – Bank of America: Based on what metrics?

Various metrics.

Including EBTIDA.

Your next question comes from John S. Glass – Morgan Stanley. John S. Glass – Morgan Stanley: In your 50 to 100 basis point decline in restaurant margins, I know you’re not giving comp guidance but the biggest driver of that would be comp store sales so can you give a range of what you embedded in that guidance for comps?

We’re not going to give you a specific range but you’re right it is within a band. We have some internal sensitivities that we’ve done to look at that. We think kind of a likely scenario is that 50 to 100 basis points but we’re not going to get specific because there are just so many variables that impact those models. John S. Glass – Morgan Stanley: Then just going to the G&A question again I just want to understand this or make sure I understand this, it’s going to be up $6 million in absolute year-over-year. You’re going to have $4 million less stock-based compensation charge so $3 million and change that flows to the G&A line, correct?

Actually we will have a one-time charge of $4 million in Q1.

Of ’09. John S. Glass – Morgan Stanley: Are you including that in up $6 million for the year?

Yes. John S. Glass – Morgan Stanley: So after the first quarter G&A ought to decline year-over-year?

Yes. John S. Glass – Morgan Stanley: So actually G&A probably does end up – excluding that charge it actually declines year-over-year?

Because the first quarter has a $1 million hit so it’s weighted in the first quarter where last year it was more evenly spread throughout the year. That stock comp charge was getting spread evenly quarter-to-quarter, you just get loaded up in Q1 2009 with that $4 million this year and then the bonus gets spread out evenly throughout ’09 as we earn it.

Because we didn’t pay out bonus John in ’08. John S. Glass – Morgan Stanley: Then does the tender offer impact the share count in any way in 2009?

No because those were all options that were anti dilutive so those don’t count in your share count because they were all under water or most of them were under water. There was only an insignificant number that were added to the share count. John S. Glass – Morgan Stanley: Then I guess non-comp AWS got better year-over-year in the fourth quarter, maybe sequentially you weren’t that much different than the prior quarters. But, was there any specific reason for that? Were there openings that were better later in the year or did you see improved performance.

We talked about the fourth quarter impact from weather and those are all in comp stores so that did impact the comp stores where it wouldn’t have impacted it significantly on the non comp base. John S. Glass – Morgan Stanley: Because you didn’t open any new stores in the weather impacted areas?

Right.

Your next question comes from Bryan C. Elliott – Raymond James & Associates. Bryan C. Elliott – Raymond James & Associates: I wanted to make sure I understood the hamburger contract properly so I believe Katie you said that you’re 50% contracted for the year?

A little less than that, yes. Bryan C. Elliott – Raymond James & Associates: And it’s up year-on-year because you had a favorable below spot last year?

That’s correct. Bryan C. Elliott – Raymond James & Associates: But spot hamburger prices are in freefall and so the portion that you’re buying spot would that more than offset and would your hamburger prices right now sort of 50% spot 50% contract not be down?

No, it’s not down. Bryan C. Elliott – Raymond James & Associates: Is the 50% spread through the year or are you 100% contracted for the first half or something like that?

We’re 50% of our volume is contracted for the full year, or less than 50% it’s about 40% roughly of our volume.

Your next question comes from Jeffrey F. Omohundro – Wachovia Securities. Jeffrey F. Omohundro – Wachovia Securities: I wonder if you could talk a little bit about your in store activities, the next menu update? And, what your thoughts might be around LTOs, the table tops, should we expect perhaps more frequency and intensity around those efforts to provide new news to your regular customers? Really, just what you’re thinking around the menu.

First off, to answer your menu question, yes we are planning to launch a new menu in our company restaurants in June and there’s going to be quite a bit of new news on that menu. At the same time within our restaurant we are going to continue to do the limited time offers on our cubes. And as I mentioned, we’re supporting that news outside of our restaurants as well with the direct mail, continuing with our email, talking to our eClub and then making sure that people know about that news as well as the strengths we talked about earlier, reinforcing those, our bottomless value, etc. So, yes definitely continuing with the news both inside but promoting it outside as well. Jeffrey F. Omohundro – Wachovia Securities: Is it a meaningful change from what we saw in ’08 just in terms of the intensity of these efforts?

The two places where it’s a little bit bigger, we have a bigger [inaudible], we have even more news that we are testing and that we are launching but the places where we are promoting it even more is online. I mentioned that we’re significantly investing more in online throughout the year as well we’re doing it with targeted direct mail around all of our locations. So, making sure we are communicating very well with our product initiatives.

The largest areas as Susan said [inaudible] pipeline of limited time offers which are supported by the promotions last year the television didn’t support, the television was branding only.

We have five promotional windows this year and we’re bringing back our popular sliders which I know you loved.

Your next question comes from Destin M. Tompkins – Morgan, Keegan & Co. Destin M. Tompkins – Morgan, Keegan & Co.: Given how aggressive the competition is for traffic right now and the fact that you’re saving some on advertising do any of the traffic initiatives that you have look to get more aggressive with your price points? Are any of the LTOs focused on price points or is there not an opportunity to give something back to the consumer from what you’re saving on the advertising?

Well, first off we are providing our value message through the bottomless proposition and we’re communicating that even more in all of our marketing communications but we are not discounting within the restaurants. We are supporting the new product news as Eric and Denny mentioned outside in a very targeted way so we are via our direct mail incenting guests. We’re telling them about the promotions and giving them some kind of incentive to come in and try the product. But, we’re doing it targeted, we’re not just doing it full market. We are using the company that we feel has some very strong targeting metrics and so we’re making sure that as much as possible whatever incentives we’re using are targeting is driving incremental traffic. Destin M. Tompkins – Morgan, Keegan & Co.: Are any of the new products maybe lower price point products? Or maybe, offer or support that more compelling value message?

We have a mix. We have a mix from bringing back our sliders that Eric mentioned to some slightly lower priced burgers. So, yes it’s a mix.

Our next question comes from Steven B. Rees – JP Morgan. Steven B. Rees – JP Morgan: I guess I was just looking for a little bit more color on the comps, you know with the deceleration you saw in the fourth quarter and so far in the first quarter. Maybe you can just comment on your traffic trend on lunch versus dinner, perhaps weekday versus weekend and if you’ve seen any change in any major geographies for you?

We’re still 50/50 lunch/dinner. We have been for years, no changes there. Geographies the only comment we have is on the weather in the Northwest in the fourth quarter that impacted us so we felt that did have – we wanted to call that out but geographically there’s no commentary in any other particular area that we would call out at this time. Steven B. Rees – JP Morgan: Then just do you have an estimate Katie of your overall commodity inflation that you expect in 2009 versus what you saw in 2008?

Probably somewhere in the 6% range. Steven B. Rees – JP Morgan: Of the $45 million of cap ex, about how much of that would be for maintenance or remodel cap ex?

About $11 to $12 million roughly.

Your next question comes from Matthew DiFrisco – Oppenheimer & Co. Matthew DiFrisco – Oppenheimer & Co.: I had a question on the four stores that you closed, where were they closed?

We’re not going to comment on that. There are four stores, a couple in declining trade areas. We have not necessarily notified all of our team members at this point so we’re going to be quite on that. Matthew DiFrisco – Oppenheimer & Co.: It looks like you closed a store in the fourth quarter, is that true?

Yes, it was a store that came off its lease. It was a lease termination. It was in Colorado Springs. Matthew DiFrisco – Oppenheimer & Co.: Could you comment on how much the national advertising campaign diluted restaurant level margins in 2008 given the lift you saw on comps and how much it cost you?

It was 50 basis points increase year-over-year. We were at 1% in 2007, we went to 1.5% and then I think with declining store comps it’s hard to know where we would have been otherwise without is so we don’t comment on that.

There are no further question at this time. I’d like to turn the call back over to Denny Mullen for any closing or additional remarks.

With all our fellow team members as always I want to express our deep gratitude for your continued focus and hard work. In good times and tough times we’ll always recognize and take care of our team members who in term will make the connection with our guests and we’ll continue to grow our company for the benefit of team members, guests and shareholders alike. With that I bid you goodnight. Thank you very much.

Ladies and gentlemen this does conclude today’s conference. We thank you for your participation. Have a wonderful day. You may now disconnect.