Good afternoon, ladies and gentlemen. Thank you for standing by. Welcome to the BJ's Restaurants, Inc. First Quarter 2013 Results Conference Call. [Operator Instructions] At this time, I'd like to turn the conference over to Greg Trojan, President and CEO. Please go ahead, sir.

Thank you, operator. Good afternoon, everybody. Welcome to BJ's Restaurants First Quarter 2013 Investor Conference Call, which we are also broadcasting live over the Internet. I am Greg Trojan, BJ's Chief Executive Officer. And joining me on the call today is Greg Levin, our Chief Financial Officer; and Greg Lynds, our Chief Development Officer; and Wayne Jones, our Chief Restaurant Operations Officer. After the market closed today, we released our financial results for the first quarter of fiscal 2013 that ended on Tuesday, April 2, 2013. You can also view the full text of our earnings release on our website at www.bjsrestaurants.com. Our agenda today will start with me providing an overview of the first quarter, followed by a brief discussion of our key initiatives through the remainder of the year. I will then turn the call over to Greg Lynds, who will provide a summary of our development progress. Greg Levin will then provide a financial review of the quarter and some commentary on the rest of 2013. After that, we will open it up to questions. But before we begin with our prepared remarks, Dianne Scott, our Director of Corporate Relations, will provide our standard cautionary disclosure with respect to forward-looking statements. Dianne, go ahead, please.

Thank you, Greg. 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, April 25, 2013. 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. As I noted in our press release today, I am proud of how our team navigated maybe the most turbulent sales period casual dining has seen since the early days of the great recession in late '08 and '09. Our total revenues were up 13% to $188.6 million, driven primarily by a continued strong execution of our new restaurant development pipeline. Our comparable restaurant sales were up 0.4% for the quarter, successfully lapping a 3.3% increase 1 year ago and a 7.8% increase in 2011. While not at the level we have come to expect from BJ's, once again, we outperformed the industry average as reported by both Knapp-Track and Black Box, continuing our track record of taking share from large number of vulnerable, tired concepts in our space [ph] . Our reported diluted net income per share for the quarter was $0.29 compared to $0.30 in last year's first quarter. Included in this year's first quarter is approximately $600,000 in expense related to our expanded television testing. Excluding the cost of the television test, which only impacted sales for 56 operating weeks out of a total of 1,690 or a 3% of the total weeks in the first quarter, our net income per diluted share on a non-GAAP adjusted basis would have been approximately $0.02 higher. Despite the challenging top line environment, our operating team did an excellent job driving overall productivity, while at the same time, improving most every guest-facing metric as well. One of our key initiatives for the first half of this year is to minimize disruption in our restaurants and let our operators digest the various initiatives we introduced in the latter part of 2012. Our new labor management system, our unprecedented number of new menu introductions, including new pizza process and our…

Thank you, Greg. And as Greg just mentioned, our 2013 and 2014 new restaurant development pipelines, they're in excellent shape, and we continue to be very pleased with the site opportunities that we are seeing and the overall retail development environment. As we mentioned in our last call, we currently expect to open 17 new restaurants during 2013, which includes the relocation of our older small-format legacy restaurant in Eugene, Oregon to a new location in Eugene and reopen this restaurant at a large-format Brewhouse restaurant. As we stated before, it's difficult to precisely predict the actual timing of our 2013 new restaurant opening due to many factors that are outside of our control. So with that in mind, as of this date, we plan to open 4 new restaurants in the second quarter, which includes the one we did open in the second quarter in Oklahoma City, 7 new restaurants in the third quarter, 5 new restaurants in the fourth quarter. And, again, we'll keep everyone advised of future changes on our quarterly calls. We continue to develop our new restaurants in a clustering strategy, which will allow us to continue leveraging our brand position, consumer awareness, supply chain infrastructure and our field supervision resource. In the first quarter just ended, we opened our first restaurant of the year in Puyallup, Washington, which is the suburb of Seattle, which is our third restaurant state joining our 2 very successful restaurants in Tukwila and Tacoma. And this past Monday, we just opened in Oklahoma City, Oklahoma on a freestanding pad at the main entrance of the recently opened new mall, the Outlet Shoppes of Oklahoma City. This is our third restaurant in the trade area joining our successful restaurants in Norman, Oklahoma and up north in the Quail Springs Mall.…

Thanks, Greg. I'm now going to turn it over to the third Greg, that is Greg Levin, our Chief Financial Officer, for his financial commentary on the quarter.

Thanks, Greg. I'm going to take a couple of minutes while I go through some of the highlights for the first quarter and provide some forward-looking commentary for the rest of fiscal 2013. All such commentary is subject to the risks and uncertainties regarding forward-looking statements that are included in our SEC filings. Additionally, my commentary may also refer to certain non-GAAP financial measures that we use in our internal review of the business and that we believe will help provide insight into our ongoing operations. As Greg Trojan mentioned, our revenues increased approximately 13% to $188.6 million from $167.6 million in the prior year's comparable quarter. This increase is due to an approximate 13% increase in operating weeks. Our weekly sales average was basically flat compared to the prior year's comparable quarter, and our comparable restaurant sales were up 0.4%. Although we would certainly like to see more robust comparable restaurant sales in the quarter, we once again outperformed both the Black Box index and the Knapp-Track index for casual dining comparable restaurant sales. Our patterns during the quarter pretty closely followed those reported by both Knapp-Track and Black Box; that is, January's comparable restaurant sales started off positive but turned negative towards the end of the month and remained negative through the first few weeks of February before, in general, turning positive again in March. All of our core markets were positive, except for California, which was slightly negative. There was no specific market or region in California that stood out. In general, higher sales tax and the higher state income tax in California, coupled with higher gasoline prices earlier in the quarter, all of which exceeded what was experienced in other parts of the U.S., may have affected our comparable restaurant sales in that state. Excluding the…

Thanks, Greg. As many of you know, I am closing in on my third month as CEO of BJ's, and I am more excited today about the future of our company as I was when I decided to join the team late last year. Many people often point to our ability to open hundreds of restaurants in the years ahead as the most exciting aspect of our growth potential and rightfully so, but I can tell you that I'm equally excited about the upside as we develop a scale as an organization to drive our brand awareness, our restaurant operating expertise and our prototype evolution to all-time new levels. Thanks for your time today. And operator, please open the line for questions.

[Operator Instructions] Our first question comes from line of Jeffrey Bernstein with Barclays Capital.

This is Aroon on for Jeff. So I wanted to ask you a little bit more about your loyalty program and, specifically, any early warnings from tests and, more importantly, any ability that maybe has to impact sales trends near-term.

Sure. Well, Jeff (sic) [Aroon] , the -- this is Greg Trojan. We are pleased -- it's still early, but we're pleased with the early days. The sign-up increase has been steady and at a point where we have about 0.5 million folks in our loyalty database. And we've -- in the kind of targeted promotions that we've done, we've seen it move. People have reacted, and the response rates have been quite high. And so that tells me that there's something there. And people are engaged in the program when we put something out there that's frankly worth responding to. So I think that's where the value of this program really lies. The run-of-the-mill game points and track points is a necessary foundation, and people are engaged by that to a certain amount, but really, the opportunity is for us to do more targeted campaigns to certain regions and certain restaurants that we think are -- need the most help from a sales perspective in day-parts and periods of time where we have the most capacity. So we're working on developing that capability to the extent that we would like. It's a bit, technologically, process-wise, more cumbersome than it needs to be. And -- but we expect to be able to do more of those kind of promotions and, frankly, with a lot less lead time here in the second half of the year.

Our next question is from the line of Jeff Farmer with Wells Fargo.

I think I heard you right. I think you said that you wanted to drive some cost cuts to help fund some increased advertising. So I guess I'm just curious where, theoretically, you would target those cost cuts. And, again, I think you said that you're spending 1.6% of sales now. Where would you be happy to have that number go? Sort of what level are you targeting moving forward?

Jeff, this is -- well, we should probably be using last names on the call since I could say this is Greg and might not know which Greg. So this is Greg Levin here. And there's a couple of things there. As we've looked through our business and continue to look through our business, as we mentioned on today's call, for instance, just looking at the labor productivity, there's definitely opportunity for us as we get better to leverage some of that labor. And I think Wayne Jones, he's here with us in the room, has done a great job with his team in regards to some of that labor operations. The other side of it is in the operating and occupancy line, which, over the years, has creeped up, even excluding the marketing line, as we've gotten more complex over the years and brought in different inventory items, different platewares, different other items, we haven't necessarily maybe taken as much look -- or maybe discerning look as maybe we could. And now that we're getting more scale, as Greg Trojan mentioned, there's areas within that operating occupancy line that I believe we can go back to. It's not really about simplifying or going to cheaper products, it's really about using some of our scale for purchasing and getting a little bit more efficient in that area and then using those savings more for some of that additional marketing. I'll take a stab at the marketing, and then I'm sure Greg Trojan...

I'll help you with that, Greg. Look, Jeff, we don't have an absolute number in mind, but it just -- it doesn't -- it's pretty obvious, given where we are on overall awareness and when we spike that awareness through TV or any other means, it works really well and particularly given the stickiness of our concept. So I don't have a number of predicting where we approach media efficiency on the spend side. I -- conceptually, we come from a place where we don't see BJ's getting to a level of spend of mass casual guys or certainly even fast casual guys in the 3%, 4% of sales and beyond, but it's pretty clear to us that the next step function forward of spend would be highly productive. But we're committed to figuring out how we can do that by funding it through the expense side of the P&L, driving the top line through greater demand spending and that would, in turn, drive margins even higher as we scale a pretty high fixed cost concept at the end of the day. [Audio Gap] component. So all those work really well when we get that top line going. Jerry [ph] and his concepts have a great history of making people understand that, first and foremost, we're sales builders. It's something I hear everything single day at BJ's. So figuring out how we can do that as tremendous leverage -- operating leverage in our system, and that's really the idea here.

Okay. And then just one real quick one on -- you had mentioned, I believe, the California have seen some, I guess, worse than system same-store sales performances. You've acknowledged in the past that you have seen some cannibalization in Southern California, your home market, and you're willing to sort of tolerate that because the volumes are so high. But is that still the case where you're getting to a point where you probably really have done about as much as you can from a development front in Southern California, and you guys are going to leave that market alone despite the fact that it does generate high volumes? Are you guys ready to sort of walk away from that, not entirely but focused a lot more development outside of Southern California and, hopefully, you'll get a little bit of a smaller same-store sales headwind drag as a result?

Jeff, this is Greg Levin in this case, and Greg Lynds will jump in here in a second. But there's a couple of things there. I think one is that you look at our development going forward and even the last couple of years. At one time, we talked about kind of a 1/3, 1/3, 1/3 strategy, 1/3 being in California more or less, and then 1/3 being in contiguous states and 1/3 kind of new markets. California will continue to play lesser of a role there. You're not going to see 1/3 1/3, 1/3 strategy because of where we are, and it becomes a little bit more opportunistic at times. I don’t think we would sacrifice the volumes in California and not build new restaurants. Even this year, we're going to open up in Orange, California and then one in San Jose. So there's some great areas there. But there's no doubt, though, as we open those restaurants, they are having some cannibalization impact on our current California restaurants, but the return on investment, which obviously leads to our return to shareholders, is tremendous. So we're not going to leave California from that standpoint, it'd just probably be a little bit smaller portion of our unit growth just based on the fact that we are pretty penetrated in the state.

I'm just going to say in 2014, 2015, 2016, you'll definitely see development slow down compared to where it was earlier years, in California. There's just not as many sites available. So that's our plan.

Our next question comes from the line of Nick Setyan with Wedbush Securities.

I just wanted to focus a little bit on the cost items here. On the labor side, you guys talked about some of the labor initiatives driving some benefits. In the second half, can we expect that to result in some leverage year-over-year, assuming that the comps kind of stay where they are? Or are we going to -- will we still see some deleverage, even despite some of that labor initiatives being in place?

No. Yes, Nick, it's a great question. If you think about BJ's this year and for 2013 versus 2012 and if you look at 2012, the first 2 quarters of last year were solid quarters in regards to [indiscernible] margin. They're were in the 19-plus-percent range, and I think even hit the 20% range in the second quarter of last year when went up against the 4% comp. Most of the commentary on space cost focus on the fact that we bit off a lot in the second half of last year. And as we took that big bite last year, you saw our labor number really spiked up in Q3 and was up a little bit, I guess, in Q4 based on where we would like it to be even though that margin is a decent margin in Q4 of 34% or so, at 34.3%. But if you think at the end of Q3 and Q4, based on our new IPOH [ph] system and some of the other things that we're working on, I think we have an absolutely great opportunity to continue to leverage that labor line going into the second half of this year.

Okay. Basically, the same question on operating and occupancy. Can we see maybe you guys taking your foot off the pedal a bit on the marketing in the second half, so maybe that line comes down to maybe below 21%?

Getting below 21%, I think, really is going to be more determined based on comp sales and leveraging the fixed nature of those costs. When I look at the operating occupancy line, in general, over the last, let's just say this last year, it's probably averaging about $24,000 per week, per restaurant week. So if you kind of line that number up of $24,000 per restaurant week, I think this first quarter was $24,000 even. Last year, it was $23,700, so for all of last year. If you take a look at that number and you straight line it for what you think restaurant weeks are, frankly, to some degrees, it's going to be how you drive comp sales above or below that to see some of those efficiencies. For the short term, we're still planning about 1.6% to 1.7% marketing spend this year, and I don't see anything changing on that. If the environment gets better, maybe it changes a little bit. But right now, we don't have any real major changes to address in regards to the marketing side, and I think you can hear that, that number of $24,000, that's kind of where it's going to be. And I think, based on your sales, you'll see where that goes from a percentage sales perspective.

Got it. So -- and then just on the G&A, even when we x the stock comp in G&A, I think, of 6.7%, this year, it was at 6.4%. Again, that's x stock comp and I think your guidance of $13 million in June is around -- it's still kind of calls for a little bit of deleverage on the G&A line. I mean, what's driving that? What are some of the investments you guys are making? And how should we think about the second half of the year again?

Well, I think there's a couple, when you look at G&A. One is the fact that we've taken out some additional square footage here at the restaurant support center. So that's kind of that increase there. If you look at the G&A in the fourth quarter of last year, I think we finished at $12.8 million. This first quarter here, it was $12.7 million. So it's kind of running fairly close at, at the most, recent trends from the standpoint. The increase from this quarter to the next quarter really is the fact that we opened one restaurant this year -- this first quarter. As we go into the next quarter, we plan on opening 4 and then even more of that going in the second half. So you're going to see more MITs or we call advanced managers coming into our program. That's going to take that up a little bit. We also have in the first half here a little bit more in the payroll taxes start to subside for the second half. So you can see that number come down a little bit. This year, just happens to be a little bit more of a step function as we transition to -- obviously, Greg Trojan coming on board, taking on additional square footage. Some those things that have kind of come on board this year is, frankly, on top of the lower comp sales having given us quite the leverage that we'd like. So we'll continue to evaluate G&A going forward, but I do think our overall plan continues to be in area that we want to leverage G&A. And we're going to continue to be mindful on it. But the rate it's running right now is fairly similar to Q4 of last year.

Our next question comes from the line of Grant Robinson with Robert W. Baird. Grant A. Robinson - Robert W. Baird & Co. Incorporated, Research Division: Grant Robinson on for David Tarantino. Wanted to take as step back maybe on all these initiatives that you guys were talking about: marketing, loyalty, service initiatives and maybe even driving value with lower pricing. As you kind of think about what the biggest opportunities within those buckets are for BJ's and how you might rank order them in the short term versus the long term, kind of how are you thinking about where the biggest opportunities are within those timeframes?

This is Greg. I think the biggest opportunity, short and longer term, is on the brand awareness and positioning work that we're doing and really understanding media mix and how do we drive awareness of the concept. I mean we're just at the stage in our development, where that is a huge opportunity. And we have this advantage that people fundamentally really like this concept when they try it. So as we've been talking about from a number of different perspectives is -- there's nothing that makes the P&L work better than driving that top line. And we are in a position to look at ways to do that, now that we've reached the level of scale a bit more effectively. We're still challenged by our scale versus our larger competitors. But I think that's the area which presents the biggest opportunity. Grant A. Robinson - Robert W. Baird & Co. Incorporated, Research Division: Great. And then maybe a question on the development pipeline. It sounds like 2013 is in pretty good shape and starting to build out in 2014 and beyond. I was wondering if you could maybe share some color on kind of what you're hearing from the development environment and kind of how that's progressed. And maybe any thoughts on specifics and what it might entail?

Yes, as I said in our comments, we are starting to see new projects from the major developers. A lot of the REITs; the Simons, the Westfields, are starting some planning of projects. And we see the environment in late 2014 and 2015 pretty prosperous in terms of new developments. So largely retail projects with freestanding pads, where we typically do very, very well. And as of today, we're still seeing the high-quality AAA sites are difficult to find, the pricing is expensive on it, and there's a lot of people after them. But longer term, we see more products becoming available. And as I mentioned earlier, I think 2014 and 2015, our pipelines are full. And we'll continue to build out the Mid-Atlantic. We're going to start this year in 2013, and we see a lot of opportunity there.

Our next question comes from the line of Matthew DiFrisco with Lazard Asset Management.

This is Phan Le, in for Matt. Just had a question for you guys. At the beginning of the year, I know you guys had mentioned or highlighted the competitive environment as one of the biggest challenges in the California and Texas markets, though more recently it looks more like the macro picture is becoming sort of the obstacle in terms of the payroll tax, the tax [indiscernible] gas prices. So would you say it's fair to say that the competitive environment or the promotional environment has eased a bit it in light of this?

No, this is Greg. I -- you raised a good point. Because I think that we definitely did get more promotional in the first quarter. Our level of discounting was quite a bit higher than we saw a year ago. And we did that, obviously, consciously. And we still see a lot of spend out there and very aggressive offers and -- competitively. So we're still spending a whole lot less than other folks out there. We're discounting a whole lot less for, I think, appropriately. But we did turn up the nozzle on the aggressiveness scale, and that's something that we monitor, obviously, pretty closely. I don't see it easing or getting much worse than what we saw in the first quarter thus far.

It's definitely not easing up, Phan. I mean, if you turn your TV and you see what's out there for some of the big change everybody's talking about price promotion and other things related around that kind of messaging. So I don't think anything has changed there from a promotional standpoint.

Great. And the second, I'd like to ask from a question about just the TV testing that you guys have recently done. In the past, you had mentioned you've done some testing and there was a nice, little halo effect even after the commercial went off air. Just wondering if you continue to see that in the newer markets that you usually [ph] tested. Can you share any other learnings apart from the TV testing? Any maybe you actually -- what would you like to see or what do you need to see to be comfortable of rolling out a consistent on-air message in any particular market?

Okay. It's still too early in the second half [ph] testing. We're still looking at that halo effect, Phan, that you are referring to. And that's one of the reasons we're not -- we don't have a firm feel on the specifics of the test. We know that it moved the needle pretty well as Greg said, particularly, in newer markets where our awareness is lower than others, right? So we don't have a great feel on the tail because it's not been very long since we stopped the actual advertising. It only ended the end -- really, at the end of the quarter. So the -- what we'd like to see is -- let me answer the question a little -- maybe a bit differently and what the next steps are in testing as I see it. This first couple of rounds was, how responsive will our guests be to a pretty fundamental message around what BJ's is, and it potentially kind of moved the needle. And while we've seen enough to declare victory on that front, what we need to do in this next round is try to a different kind of media mix even in the TV realm so that we can bring down the effective costs, so that it makes more economic sense and our sales hurdles, including the halo effect, can be at levels where we could pull the trigger with more confidence that we can today. So we didn't want to go into our first experiences with TV wondering if it worked or didn't work because of the media buy, if that makes sense to you. So we went and bought out straight spot rates that were -- in the higher end of placement and et cetera. So -- and reasonable ways that we were like, "Okay, let's make sure we bought at that level to understand how much that needle will move." Given our scale and our density in these respective markets, the next round is really to understand variations on that buy that -- we have a pretty dramatic difference on the cost of acquisition of television advertising that will eventually permit us to be on air in some degree of time in our more developed markets.

Our next question comes from the line of Nicole Miller Regan with Piper Jaffray.

This is Josh Long for Nicole. Wanted to revisit the commodities update you provided. Greg, it looks like the range of the expected inflation ticked down a little bit about 50 bps. I wanted to see if you might able to walk through what the pushes and pulls were on the basket. And then maybe you can provide an update on how much you have contracted, if you'd be willing to share that?

Josh, I don’t have all that detail with me on the contract side unfortunately. But we did see lower pricing on some of our seafood. And also, in the first quarter, actually, cheese price came in lower than our original expectation. Cheese is going up a little bit in the second half then we have contracts that come in, in the second half. That's one of the reasons that we're expecting it to come up. But overall, the commodity environments are a little bit more benign than what we're anticipating going into the year. And I can talk to you off air in regards to let you know what the -- what we have contract. I just didn't bring that sheet in with me today.

Some of the -- our team did a good job of proactively substituting and looking for alternatives that were -- helped us from a commodity mix perspective as well there. So the best part of the cost-reduction opportunities for us is to look at alternatives that, in no way, sacrifice quality in any way. In fact, I think the substitutions that we made on the first part of this year have improved the consistency and the quality of the product and, at the same time, saved us some money.

That's helpful. And so kind of on that same note, the cost-saving opportunities you say in the back of the house, is that -- just philosophically, is that more about -- around processes? Or is that on maybe testing new kitchen equipment that might be able to lower the labor hour or cost-per-hour side of the equation?

Yes. Josh, this is Wayne Jones. I think that our kitchen sets [ph] are currently configured to function pretty well. We clearly have -- as Greg alluded to earlier, we'll always have, I think efficiency opportunities when it comes to labor productivity. And as we continue to gain traction with our IPOH [ph] program, I think you'll see that come into play. As far as equipment, improving the speed of a particular item, I think when the line is as complex as ours and a menu of our size, I don't know that there's any particular silver bullet that will allow us to do that. However, over the course of time, we can inspect and look at new equipment that they could accelerate the cooking process or enhance quality. It's something we're looking at this year. We don't have -- we don't necessarily see any major breakthroughs there, but it's something we always keep our eye on.

Josh, I think a large part of what we will see, and this is a process in it's early days that Wayne is leading, but it's just looking at the complexity of food prep and recipe execution. But over time, as -- there's been quite a bit, as you probably know, of increasing both the quality and the breadth of the menu at BJ's in a relatively short period of time over the last several years, right? And all of those incremental adds to the jobs in the kitchen, it's just a great time now to step back and look at how they all work together. And the example that we used a lot internally is -- every incremental recipe that has tomatoes in it, we were asking people to cut the tomatoes slightly differently, right? And really, the guest doesn't care, for the most part, whether the angle of the tomato cut or whether the width is 1/4-inch or 3/8-inch. But as we develop those incremental recipes, we were optimizing each of those individually without looking at the impact in total, right? And so that -- there's a -- we think that there's quite a bit of execution upside and efficiency that'll come out of taking that complexity that they're -- that's not adding to the guest experience at the end of the day.

That's helpful. And so just coming down on the same note, would it be fair to differentiate the process or the kind of reflection you just offered out to say the difference between -- then saying, "Well, it might be cheaper if we were to just bring in pre-shredded cheese in the restaurant," which would obviously not speak to the core values or the quality nature of it. That's not would be -- maybe that would be kind of a good way to juxtapose how you're thinking about [indiscernible].

[indiscernible] is absolutely non-negotiable. We are not going to make one step in the direction of endangering quality. In fact, we are convinced that this will -- the biggest driver is as we call it Project Q, for project quality, not Project Save Cost, right? It's Project Q because we think we'll end up delivering a more consistent, higher-quality product here. And we just won't flat out consider something that we don't think it's as good, if not better, in terms of process, ingredients, et cetera.

Our next question is from the line of Conrad Lyon with B. Riley & Co.

Question for Greg Levin. I'm not sure, did you talk about what you expect average weekly sales growth to be going forward here?

I did, Conrad. And what we've seen over the last -- really, over the last year, is our average weekly sales had been probably about 0.5% less than our comp sales. It's kind of in the trend -- I -- looking at our development going forward, knowing as we talked earlier, that there's not as many California, let's call it, restaurants that tend to have a higher average unit volume, I would probably consider that a reasonable trend. I do believe once we get in to the Mid-Atlantic later this year, that we'll probably see some big booming restaurants that come up from that. And again, I think where we are today with only 132 restaurants, it's much more about the geography of where we're opening restaurants that drive that average in volume versus the fact that we're out of great locations, so to speak. It's that clustering strategy that we take on at BJ's.

Yes, got you. And let me use that to segue in the next question. With wages being somewhat of an issue, I should say hikes and Obamacare, is there any more of an effort to go towards tip credit states [ph] for development? Or is that still perhaps maybe something that's considered more of a thing lower on the totem pole, so to speak?

That's really a byproduct. What we do, we look at prices. Obviously, we look at densities and sales traffics from there. And let Wayne Jones articulate in regards to how it is from a hiring and employment standpoint. Those are much more important. As we talked here about California, as expensive as it is to do in California or to operate a business in California, you end up having some of the highest average unit volumes in California or your [indiscernible] is growing in California. So there's other benefits that continue to help California, where we end up getting great margins in this current state. So again, tip credit decision is much more a byproduct of looking for great real estate.

Got you. Final question here. Of all the promotional activity that occurred in the first quarter, call it, bounce-backs, inserts, even TV, what would you consider was your most effective?

So we're kind of looking at each other.

And let me qualify it this way, the reason I asked is just I'm curious what you think is the most cost effective?

Most cost effective? Beyond the road, loyalty probably can be in the sense that we're able to engage with the consumer one-on-one directly through electronic means. But we talked about it, I think, at a earlier conference and Greg Trojan going through a lot of detail on it. But using the loyalty program more and the Surprise and Delight. We did some testing of that in the fourth quarter of last year with having to redeem those points in the first quarter of this year showed some pretty good traction. And that's where I think the loyalty program -- that's where I think we would like the loyalty program to go when we're trying to discuss a little bit earlier. And I think that will have the best benefit for us going forward and probably the best cost. But it's something there we're still working on. And it's kind of a little bit of my assumption based on what I see. And I don't know...

Look, and I think the tried-and-true direct mail vehicle has the most dollar impact because they're the most round [ph] . They're not the most efficient from a cost perspective. But they definitely are an arsenal in our tool set. And in this economic environment, work quite well. From an efficiency perspective, although they didn't have the impact of -- because of the scale of direct mail, some of the heavy ad spending that we did and just some dips into the digital arena and the loyalty work that Greg was alluding to are definitely the highest impact for cost. We just got to keep working on how to expand the scale of them, so they can really move the needle across our chain.

Our next question is from the line of Brian Bittner with Oppenheimer & Co. Brian J. Bittner - Oppenheimer & Co. Inc., Research Division: When you think about just the marketing, what you've implemented in the 6 markets, what type of comp [ph] are you seeing in those markets? Are you able to talk about that?

It's Greg Levin. We haven't given out that information in regards to what type of lift we've seen or what type of return we want to get. And we're still, to be perfectly honest, we're probably kind of keeping that close to the vest as we work through those things. I think -- as we mentioned, generally, we've seen a lift in comp sales in all those markets. The lower-awareness markets tend to have a larger lift. That's what we saw, both this time and the last time. But we haven't gone out yet, specifically, and said what that lift is and what type of return we'd expect from that. Brian J. Bittner - Oppenheimer & Co. Inc., Research Division: Okay. How about where you're seeing a lift without quantifying it? Are you seeing it most in the middle of the week? Are you seeing it just pretty much across the 7 days of the week? Or are you seeing it more that on the weekend?

I don’t have the answer to that. I haven't really looked at it from that standpoint. I'm thinking about our daily comp sales, how they've come through. And it looks like it was -- and again, this is a little bit anecdotal so I'm kind of going off the top of my memory here. It appears to be a little bit more in the middle of the week and going into that early weekend. And I guess -- Wayne Jones is shaking his head as well. And I think that's because most of the television advertising that we did, a lot of it would be seen during that middle of the week and play that top-of-mind awareness. So it's a little bit of the anecdotal, but I believe that's what we saw.

Yes. Also keeping in mind that our restaurants are obviously very busy on the weekend and we have greater capacity during the weekend [ph] . So I think that's where it's likely we're seeing the greatest pick-up. Brian J. Bittner - Oppenheimer & Co. Inc., Research Division: Okay. And just lastly on this current comp trend that you're seeing. You talked about the mid-2 range. But you think the underlying trend is more like 1%. I mean, is that simply because that's what the trend's been the last couple of weeks?

Well, obviously, that's what my comment was in the sense that's why we saw the higher comp in the first week if you kind of strip that out, the trend -- the comments around that 1%. It's getting back to being a little bit more volatile than we've seen in the past. Frankly, there's been a couple of surprisingly strong days in there. And then all of a sudden, it trends back down to the flattish number. Well, I think in the first quarter, it started a little bit more volatile. But it's start to get a little bit more consistent as we enter the spring break timeframe.

Our next question is from the line of Larry Miller with RBC Capital Markets.

Let me start there with the same-store sales trend. Just in a larger sense, anything you've seen in the business that makes you more optimistic relative to where you were a quarter or 2 ago for the rest of the year?

Yes, I would think so, if you a said couple of periods ago. February was really interesting. We all saw the Knapp-Track number is down to negative 5. We want it there, while we didn't take it specific monthly. We never do. I was -- tend to tell you, BJ's always has a much shorter band or smaller band, I would say, from month-to-month to maybe what we see in Knapp-Track. But the trends that picked up in March has carry over a little bit to April, probably not quite as robust as you got back to more -- as you got out of spring break. But I think that trend looked a little bit better currently that maybe what we saw earlier in the beginning of last quarter.

Okay, great. And then the investment story for you guys had been 2 parts, right? Unit growth and margin expansion. And so I think you've talked about, longer term, 8% to 10% sort of operating margin targets. And you're making a lot of investments, and this year it doesn't look like you're going to have operating margin growth. I'd like to know if you actually think you might. And then last year, you didn't. So how do you think about some of the investments you're making? Are they positive to that target? Are they within that target? Are they actually impairing the target? There's obviously things that are going there that are hurting such as commodities and same-store sales. But just from a higher level, how do you think about that sort of target?

I don't think that target changes at all, Larry, in that regards. I think we have definite opportunity to get there. When you take a step back, really, the third quarter last year kind of derailed 2012. And frankly, we're starting to come out of that little bit. Now the macro environment hasn't helped as much in regards to maybe getting a little bit more top line sales from a comp sales perspective. But I still look at the BJ's concept and look at where we know we can go and figure that. That 8% to 9% to 10% operating margin is still out there. It's still very, very achievable. In fact, as we talked about on these prior calls, Q1 and Q2 of last year, we were running restaurant level margins in the mid-19% and 20-plus-percent range. Then we came into Q3 and even in Q3, we did a 2%, 2-plus-percent comp, which, frankly, is not a bad comp number. We just threw a lot of initiatives at our operators. And Q1 is always the most challenging in the sense that you have higher payroll taxes and other things that kind of roll out: new contracts for food costs, et cetera. But the operating and financial improvement that we made in Q1, that to some degree, gets a little bit masked, is pretty impressive, meaning our cook times are better, theoretical food costs versus waste is better right now. The hourly labor system that was put in place has really produced some tremendous results there. And I think, as we continue to kind of work through this year and maybe the macro environment gets a little bit better, I think, frankly, the ability to leverage this business is in a better position right now than it was 6 months ago. And when I say that, that means it's not, "Hey, we need 3% or 4% to get back to margins." We might need less comp sales on that because of some of the things that we're doing. So I'm really opportunistic. I feel really good about the future, both from a margin standpoint and probably I've never felt that better in regards to development, especially looking at where our new restaurants are going and our existing restaurants and the markets or even [ph] the sales volumes. I mean, I think it's an exciting time.

Our final question comes from the line of Will Slabaugh with Stephens.

Just want to ask you quickly about consumer trends, in general. I think, Greg Levin, last call, you talked about some softness you were seeing during the week as opposed to the weekends. And so I wanted to -- and then also, some other things, so I just really want to contrast that as much as possible with what you're seeing now. I think, if I heard you correctly, in that, that trend has improved. But I wanted to get comment on that, if that is indeed the case. And then any other guest trends or feedbacks that stand out?

Yes, the trend has improved. And some of that could be due to the fact that the earlier spring break and how that played out. Because obviously, you're -- you've got more availability during the middle of the week. When I look through the first quarter, as I mentioned, all the day parts were more or less positive. I would say, though, that the mid-afternoon and late-night day parts were a little bit more positive than maybe the lunch and the dinner. Maybe that has to do with a little, again, the availability because of the spring break. Looking at this quarter, again, only a few weeks in. But it seems pretty consistent in regards to comp sales, whether it's a weekend or a middle of the weekday, they both are -- have kind of come together, so to speak. We're not seeing one major difference between the middle of the week or the weekend.

And just a quick follow-up to that. Wondered if you could talk about the impact from some of these initiatives you have going on and how you would dissect that. And one being the more intentional marketing that you discussed, either whether that'd be true with the new reserve line of beers, et cetera; and then the value push being the other side of that as far as 2 for $14.95 at lunch and things like that; and where you're seeing maybe a bigger impact with one versus the other.

Yes, I'm thinking about your question here for a minute, Will because you asked a lot of different things there. The first one is some of the operational initiatives then -- I'm not sure there's as many four-wall operational initiatives here in this first half of the year or the first quarter than in the past. Most of it has been outside, which gets back to kind of that -- the marketing question I was asked a little bit earlier. And we've kind of talked about the different marketing initiatives that we've done. I don't think any of them had any major impact on the four-wall economics of the restaurant in regards to execution from that standpoint. Looking forward, as Greg Trojan kind of listed 4 different areas to look at, one of those that he talked about being the complexities and other things that's in our restaurant, ultimately, that's going to help our restaurant. And we're kind of hammering that right now internally, and then we're going to testing out a couple of other restaurants. And that's made the -- actually improved the execution and improved the quality within the restaurant. So I don't know if I directly answered your question. So if I didn't, if you want to rephrase it, maybe I can get you -- get the answer.

The only other side of that just being -- if you're seeing a nice improvement or, at least, seeing some impact there as you make a value push of the lunch, 2 for $14.95, or other offers that you make, either from a discounting perspective or just trying to get people in the doors?

Yes. It's definitely making an impact there. When we -- one of things that we've done -- we've never really talked about this because frankly, it's not that overall material. But we do look at how many checks come in that are using a "2 can dine for $19.99" or the lunch special, "2 can dine for $14 (sic) [$14.95] ", so to speak. And -- this first quarter, I think about 3% of our checks were promotional-related checks. Last year, in the first quarter, about 2% was, so you saw about 100-basis-point increase there. It's still -- from a discount, from of gross PPA [ph] down to being net PPA [ph], or for gross check down to a net check, it's still less than 1%. But that number has cost to retail or cost from gross to net price, basically double in that regards for the last year to this year, meaning if you're selling it for $10 and you -- it was your gross price or your menu pricing, sold it for $7, at that $2 discount, that percentage there is -- has doubled but still less than 1%. But it definitely has been an increased area for this year.

So Will, I think that's an important way that we look at, at least I look at, measuring not just the effectiveness but how much of an impact it's having overall. And we saw that kind of uptick, which isn't massive in the overall P&L. But it's a significant difference. I mean, looking at that level of promotion, up 1/3, and the dollars of discounting up around 50%, we view that as a good thing because it's a -- I think a -- fundamentally a good way to reinforce the value message. And you can be so much more targeted with it, even more targeted than we are today. So I think that's a tool in the shed here that we can use -- we use surgically versus through mass meetings can really drive some of the areas of our business where we have capacity.

Will, this is Wayne Jones. Just one other point on the beer. Beer is essentially our brand positioning and the new reserve line has been extremely well received by our guests. And while obviously, we want to sell more beer in the short term, it really is more of a long-term proposition. We have 10 beers on tap now that are there every single day in addition to our seasonal lineup, which pretty much encompasses the entire year. So the reserve line, they speak to our creativity, to our craft, to our heritage and how we position the brand over the long run.

And at this time, I'd like to turn the conference back to Mr. Trojan for any closing remarks.

Thank you, operator. I appreciate everybody's time, and we'll talk to you next quarter.

Thank you, sir. Ladies and gentlemen, that does conclude our conference for today. Thank you very much for your participation. You may now disconnect.