Good afternoon, ladies and gentlemen, and welcome to the Red Robin Gourmet Burgers, Incorporated Fourth Quarter 2016 Earnings Call. Today's conference is being recorded. During the course of this conference call, the company may make forward-looking statements about the company's business outlook and expectations. These forward-looking statements and all other statements that are not historical facts, reflect the company's beliefs and predictions as of today and, therefore, are subject to risks and uncertainties, as described in the Safe Harbor discussion found in the company's SEC filings. During the call, the company will also discuss non-GAAP financial measures. These non-GAAP measures are not prepared in accordance with generally accepted accounting principles, but are intended to illustrate an alternative measure of the company's operating performance that maybe useful. A reconciliation of the non-GAAP financial measures to the most directly comparable GAAP measures can be found in the company's earnings release available on its website. The company has posted its fiscal fourth quarter and full year 2016 press release and supplemental financial information related to the results on its website at www.redrobin.com in the Investors' section. And now, I'd like to turn the call over to Ms. Denny Marie Post of Red Robin. Please go ahead, Ms. Post.

Thank you, Diana. Good afternoon, everyone, and thank you for choosing to be on the call today. I'm joined by Guy Constant, Chief Financial Officer, who hit the ground running just after the New Year. Guy and I will briefly share our perspective on 2016, and spend the majority of our time today on our outlook for 2017. After we finish our prepared remarks, Carin Stutz, Chief Operating Officer; and Terry Harryman, who, with Guy's arrival, has been named VP Finance, Planning and Investor Relations, will join for Q&A. As we shared on our January 10 in our Q4 pre-release, while revenue fell short of plan, we were able to regain traffic momentum. Specifically, we outperformed our peer set as defined by Black Box by over 200 basis points in Q4, which was a complete turnaround from our performance the year prior, and double our outperformance in Q3, 2016. We credit this improvement to a combination of improved operations and added news in our $6.99 everyday value Tavern Double line. As a reminder, during Q4, we also made some difficult, but much needed decisions to close a number of underperforming restaurants to consolidate services for our 18 units in Canada into the United States, by closing the office in Vancouver, to cut planned restaurant openings in half for 2017 and 2018, to reduce above-restaurant overhead with streamlined leadership and to rationalize our in-restaurant technology partners. The service improvements and value news that fueled our traffic outperformance at the end of last year will continue to be our focus coming into 2017. Our operations team under Carin's highly experienced leadership have already made significant strides in the past six months, and our guests are taking notice. The operators have turned up the volume on what matters most to those guests, speed-to-table…

All right. Thank you, Denny, and good afternoon, everyone. Before I begin, let me first take a moment to acknowledge the excellent work done by Terry over the past few quarters in his role as the Interim Chief Financial Officer for Red Robin. Terry's professionalism and attention to detail served the shareholders, the analyst community and our management team well over that time, and we appreciate his efforts. Given the high standards set by both Terry and Stuart before him, I indeed have a high bar to try and clear. As I walk through the highlights of the financial results for the fourth quarter, please note that the numbers I present are on a recurring basis, excluding special items. As Denny mentioned, the restaurant industry is going through a period of substantive change, and so is Red Robin. Given that change, we believe that we need to provide you with greater transparency in order to provide insight into how our business is performing and how we are adapting to that change. As a result, we're providing a little more of that detail in our remarks today as well as in our future filings and presentations. We see this as an area of continuous improvement on our part and hope you'll find it helpful as you learn about and evaluate the Red Robin business. Adjusted EBITDA for the quarter was $30.2 million, down 13.8% or $4.8 million as compared to a year ago. Adjusted earnings per diluted share were $0.35 as compared to $0.86 in the fourth quarter of 2015. Consistent with the results shared within our pre-release on January 10, total company revenues increased 1.8% to $291.5 million, up from $286.3 million a year ago. This included an increase of $19.6 million related to new restaurant openings and acquired restaurants,…

Thanks, Guy. It's great to have you on board. Moving forward, we're going where the guest wants us to be, focused on differentiating service both in restaurant and off premise. Our guests look to us for gourmet burgers served quickly and with that extra measure of care that makes them better for being here, without having to break the bank to fill up on great food. We have over 6.7 million loyal Red Robin Royalty members who are ready to learn about our new choices. And at our core, our B.U.R.G.E.R. values of Bottomless Fun, Unwavering Integrity, Relentless Focus on Improvement, Genuine Spirit of Service, Extraordinary People, and being the Recognized Burger Authority mean we have the makings of the best teams in our restaurants, field leadership and home office, while we will remain the one and only Red Robin and will move with the guest to ensure we meet their changing needs at every turn. Before we take questions as a team, we want to acknowledge someone who is sadly missing from the queue today. Here is to one of the best, Joe Buckley. We will miss that gravelly voice and unmistakable laugh in Q&A today. Operator, with that, let's turn it over to questions.

Thank you. And we'll take our first question from Will Slabaugh with Stephens.

Yeah. Thank you very much. I wanted to ask on the guidance for the year, especially on the comp guidance of 0.5% to 1.5%, just sort of given where we ended 4Q, and the guide for that nicely positive comp for the year, I'm wondering, how steep we should expect that cadence to be throughout the year. And if your comments around 1Q are indicative of what you're seeing out there to start the year off, it would be appreciated. Thank you.

Hey, Will, good to hear from you. So, given that, as you may recall, we expanded the emphasis on value in the third quarter last year. So we're still faced with at least in the front half of the year lapping the impact that's had on PPA. So we would expect on balance the challenges in comp sales related to that to be more in the front half than the second half. In addition, the discussion we had about rolling out some of the on-premise initiatives that we have are certainty more skewed towards the back half of the year versus the front half of the year as well. So those two factors are certainly contributing. As for the other things that are impacting the front half of the year, I think it's no secret that January results for the industry have taken a bit of a turn to the positive from what we saw late in the fourth quarter, but February has certainly been challenging for the industry, in part contributed by the fact that the lateness of the income tax refund has certainly had a contributing impact to that as well. So with all of that, yes, we would expect the comp sales benefit to be more back half than front half.

Understood, if I could follow up real quickly on the 1Q guide, so you talked about the $0.40 to $0.60 number, I'm curious how much of that is top line driven and if there are any costs that we should be aware of that might be out of the ordinary in that first quarter.

Nothing out of the ordinary, but as we mentioned earlier, an extension of things we'd seen in the fourth quarter and continuing wage inflation pressure that we've seen as well that will impact the fourth quarter. So, I'd say a blend of both top line and middle of the P&L impact.

Okay. Thank you very much.

Yes.

And we'll take our next question from Gregory Francfort with Bank of America.

Hey, guys. I know you're going to get into a bunch of the details in May, but maybe can you talk sort of early high level, what are the biggest piece of opportunity that you have outside of addressing value from an operating standpoint? Are there technology changes that have to be made or is sort of server changes or server structure changes, labor changes? I guess what are the biggest opportunities on improving the four-wall margin and the four-wall returns?

I will start with the top line opportunity. Obviously, we've referenced it here, Gregory, the biggest opportunity for us is to get into off-premise. And we're putting all those enablers in place to get going on that and piloting a number of initiatives. So we'll see a lot of that come together. In terms of the four-wall margins, Guy, you want to speak a little bit to what you think there?

Yeah. Greg, at a high level, and you're right, we will provide a lot more of this detail in May. Denny already made the reference in her comments about the fact that our off-premise average mix is much lower than the rest of the space. Our overall EBITDA margins are a couple of hundred basis points lower than the space. So we do think there are opportunities in the middle of the P&L, enabled in part by the introduction of KDS. It should help us do a better job managing waste, and being more efficient with our labor, but we do think there are other potential opportunities to address there as well. We've talked about how our company/franchise mix is probably skewed a little more to company than on an average to the spaces. So we think that presents an opportunity. And then, of course, just overall, improving our returns which really encompasses all those things we just talked about represents the opportunity as well. So we think, on a number of fronts, there is an opportunity for us to make progress from where we are today.

Got it. And then, just maybe on the carry-out business, is that being driven by a change in diner behavior? There is a lot of the brands are talking about the carry-out business now, and it seems to be sort of picking up steam. Is consumer behavior changing? Is it that you're sort of able to get that technology to work on the online ordering side and you weren't able to do before, I guess what sort of inflection are you seeing in maybe the overall industry as well?

Yeah. Gregory, this is Denny, and then also Carin might have an added point on the four-wall margins. But in terms of the inflection point we've seen, and again, we did an occasion study five years ago, we updated it just last year. And the unplanned dinner occasion which is that you don't know where you're going tonight, what's convenient. We always did really well at that occasion. And as I said in my remarks, we've seen a doubling in demand for carry-out at that time period now. So, instead of loading the family up and coming out for a quick meal, increasingly the convenience is being defined as bringing it into the house, and just keeping everybody in place and continuing to do what they're doing. So, we're definitely seeing growing demand. And then certainly, the technologies, the availability of third-party delivery, a lot of things are really rising up to support it, and to give the guest a lot of option. So, it's a time of real change here. And I think we have a great opportunity, even though we're late to the party in terms of carry-out to do it very, very well. So, that's what we're committed to doing. Carin, did you want to add a point at all on the prior question that Gregory had?

Yeah. I just wanted to say, in addition to us really focusing on, as Denny put it, where the guest is going and off-premise, we're still very focused on high level of execution within the four walls, and we still think we have opportunity to make a big improvement there. Denny referenced our NPS scores, which have been going up in a nice trajectory, and we hope that's a leading indicator for what's to come. So, assuming demand, we think that the guests coming in today are going to have a better experience, and I could just evidence that by KDS. One of the things that we talked about in the past, our acceptable level of service was around 16 minutes. Today, we set a new goal at our Annual Conference that our expectation is that a shift will run at 10 minutes or less on average and we're seeing a lot of that already. So, the addition of KDS and the returns that we're going to get from that, wonderful piece of technology is starting to make a difference.

Great. Thank you, guys.

You're welcome, Greg.

And we'll take our next question from Alex Slagle with Jefferies.

Thanks. I had a follow-up question from Will's same-store sales guidance question earlier. I want to know what sort of casual dining industry traffic assumptions you have for 2017, and just to get an idea are you going to continue to plan to take share of traffic in the category and what kind of traffic growth needed to hit that target.

Yeah. I mean we're definitely planning to continue to take share and outperform in terms of traffic. We are anticipating the category to continue to be down. We've estimated – what, down 2%? Down 2% across the year for the category, which some would argue might be conservative or not conservative.

Okay. And then, on the alcoholic beverage sales and your efforts to further accelerate that business, I mean what can you do to really build excitement and awareness about this? And what should we look for as we look out into 2017?

Well, I'd like to think of it as – and we spoke about this in our Leadership Conference as well, thinking of it as every burger deservers a great beverage, right? So, every burger is made better with the perfect beer carrying or perhaps even a non-alcoholic beverage. So we're very much focused on ensuring that the dine-in guest is being encouraged to enjoy, be at one of our 12 now draft beers or one of our specialty beverages of any kind with that burger. So, we think we can continue to build. It's slow. I mean we were down to, what, low 5s, four or five years ago, when we've rebuilt to about 8% mix on our alcoholic beverage mix. And we're holding where the rest of the category is going down, as off-premise builds, that's going to challenge total mix. So we're very focused on occasions and making sure that as you walk through the restaurant, every burger has got a beverage sit next to it. The only thing it makes me unhappy is a glass of water.

Got it. Thank you.

And we'll take our next question from John Glass with Morgan Stanley. Christopher E. Carril - Morgan Stanley & Co. LLC: Hi. This is Chris on for John. I was hoping to get a little bit more color on the discounting and casual dining right now. I think you touched upon it briefly in the prepared remarks, but if there is anything else you can tell us about that. And at what point you think that starts to turn? Is it going to be commodity driven or is it going to, I mean, really just be a function of traffic improving? Anything on that would be helpful.

I don't know that we've specifically seen – I mean, we see a lot of deals. And, of course, again lot of people are using e-mail clubs to deliver deals daily of all kinds. And I'm increasingly now starting to see them associated with off-premise. 20% off, if you come in and pick up a carry-out meal for the weekend, that kind of thing, it's pretty aggressive. We continue to stay focused on what we've engineered over time to be the best balance of a barbell of burgers, everything from $6.99 to our latest item which is $14.79. So we have a wide range for the guest, and it's great quality and a great quantity of food every single time. And then we reserved our dealing for the most part to surprise and delight for our Red Robin Royalty guests. Now, as we're starting to build our reach, we're using some traditional methods like direct mail and we'll certainly work with some of the third-party delivery services to incent our guests to give us a try. But I don't know in terms of what do you think is going to change it. I think there is always going to be people swing in for traffic, and I don't see any letup in the near future. Christopher E. Carril - Morgan Stanley & Co. LLC: Thanks.

We'll go next to Brian Vaccaro with Raymond James. Brian M. Vaccaro - Raymond James & Associates, Inc.: Thank you, and good evening. Denny, I was wondering if you could share more about what you've seen in the delivery test with DoorDash and color on the sales lift, and profitability to those sales, and as the test has been expanded from I think the original 70 units (34:19) in the original test.

We have expanded with DoorDash, Brian. I'd like to get more time under our belt with the various delivery services to talk to. But I'll tell you overall, the size of the order is larger than what we see in restaurants, so we're definitely seeing that. And that's consistent with what others have experienced. We are partnered with DoorDash now, and in limited partnership with Amazon Prime Now, total locations, unduplicated about 83 or 84.

Correct.

So still a relatively small percentage of our system. But I'm encouraged, and our – we are waiting now for some research. They share with us the results from what their guest tells them, so we are relatively benchmarked to other products that are delivered. But we're doing our own research to try to get some sense to make sure the guest is positive about that experience before we move forward aggressively. But, yeah, I'm not sure what else to say other than, as we get closer to this, and we have seen pretty high incrementality as well or we would not have chosen to go forward, particularly obviously with the Amazon Prime offering, where they have such a large user base to market to. It's made a big difference for us. Brian M. Vaccaro - Raymond James & Associates, Inc.: Okay. Great. That's helpful. I wanted to also circle back on the key ops and potential cost savings initiatives in 2017. I noticed the guidance referenced, I think it was menu optimization and labor productivity. Can you provide some more color on each of those?

This is Carin. We're going to comment more on that in our May meeting that's coming up. Our teams have several things they just started testing right now. And we'll be excited to share what we think works best at that time.

(36:06) Brian M. Vaccaro - Raymond James & Associates, Inc.: All right.

I think the menu optimization piece, the teams are working really well together to make sure we're setting up the restaurants for max productivity.

Yeah. We've really been talking about simplification, and I think that's really important right now. So, we're teamed up with Jonathan Muhtar's team. And we're really looking at everything from the number of ingredients to number of items that we prepare. And I think that's been really helpful. But another thing we look at, as the guests tell us that speed is still important in a casual dining experience, is how long each menu item takes to prepare. So that's now another filter, when Jonathan introduces a new item, is that we can get it to the guest in a time that they think is really important and meets their needs. Brian M. Vaccaro - Raymond James & Associates, Inc.: Okay. Two quick ones, just on the guidance if I could. Guy, in terms of the labor cost outlook, what are you expecting in terms of wage inflation and benefit cost inflation in 2017?

Somewhere between 5% and 6%, Brian. Brian M. Vaccaro - Raymond James & Associates, Inc.: On the wage front or sort of a blend between the two?

Blend between the two. Brian M. Vaccaro - Raymond James & Associates, Inc.: Okay. Great. And then, last one, the CapEx budget, could you provide the primary component to that in terms of new units, maintenance, and other investments that are embedded in your CapEx guidance?

Hey, Brian. This is Terry. Yes, our relo and remodel budget would be in the range of $15 million to $20 million, maintenance CapEx in the range of $20 million, projects in the neighborhood of $10 million, and our NROs should be in the range of $40 million to $45 million. Brian M. Vaccaro - Raymond James & Associates, Inc.: Great. Thank you.

Thanks, Brian.

We'll go next to Howard Penney with Hedgeye Risk Management.

Thank you for the question. I had two questions. The first one is focused on the structural changes you made to the store closures, and how sharp your knife was, and will there be more of those? And then, if you could put that in context with what you think the optimum balance is of franchise and company-owned stores. And then, the second question relates to your real estate profile. I remember in years back, and I may not remember this correctly, but there was a site selection strategy associated with opening stores next to movie theaters or malls or something along those lines. If that's correct, would that prevent you from getting to an average take-out/delivery order or would it actually allow you to go further than what an average casual dining chain does?

Hey, Howard. Good to talk to you. Let me take the second question first, and then I will kick it to Guy to speak about the closures. You're absolutely right, our traditional location strategy was near, what we call, the power center. It had about a 12 mile radius in terms of what we believe we attracted guests into. And that certainly did not set us up necessarily well to take full advantage of all the carry-out opportunities. That said, as the portfolio stands today, we have about 17% of our restaurants that are in line, those are the ones where we will be most challenged to develop any kind of curbside or guest carry-out. They're simply not going to come into the mall to do that. So we'll rely on those to develop other opportunities and other types of business, be it catering down the road or some other things, where we can go out from those locations and use perhaps third-party delivery, et cetera. But beyond that, the majority of our locations I think are well set up to support curbside carry-out, and we feel like are well positioned to help us going forward. So, it's not as heavily mall-dependent as you might have expected. And with that, we think we can still support a pretty strong carry-out business.

Howard, on your original question, hey, you're ahead of the game on us a little bit on that one. We're certainly looking hard in making assessments to the restaurant portfolio, what needs to be in the portfolio and what doesn't, what makes sense from a company franchise mix as we move forward. We have a really good franchisee base. And I think there is increasing interest in starting to build new units on their part and their markets which tend to be a little less penetrated than maybe some of our markets. And then, certainly, there are our own markets, where we are underpenetrated and as we look forward at potential development, assuming we get the four-wall economics right and earn our right to grow. But it's likely there will be markets that we won't get to for some time and that may make more sense for us down the road to be franchised as opposed to company owned. So, we're catching this kind of right in the middle of that analysis, but that would certainly be something we would want to address at the Analyst Day we would be having in May.

Thank you. And just one last question, the $20 million in maintenance CapEx, is that an ongoing – is what you would expect your ongoing maintenance spending would be? Thanks.

Yes, Howard. Yes.

Perfect. Thank you.

Great. Thank you, Howard.

And at this time, I'd like to turn the call back to Ms. Post for any additional or closing remarks.

All right. Thank you, all. Thanks to all the Red Robin team members, franchise and corporate, who deliver on our promise every day. And thank you all for joining us this afternoon. We look forward to speaking with you again on our Q2 call, and hosting you at our Analyst Meeting, May 22 and May 23 here in Denver. Everybody, have a great day.

Thank you. And that does conclude today's conference. Thank you for your participation. You may now disconnect.