Good day, ladies and gentlemen, and welcome to the Papa John's Fourth Quarter and Full Year 2015 Conference Call and Webcast. At this time, all participants are in a listen-only mode. Later, we will conduct a question-and-answer session, and instructions will follow at that time. As a reminder, today's conference is being recorded. I would like to introduce your host for today's conference, Mr. Lance Tucker, Chief Financial Officer. Sir, please go ahead. Lance F. Tucker - Senior Vice President, Chief Financial Officer, Treasurer & Chief Administrative Officer: Thank you, Michelle, and good morning, everyone. Joining me on the call today are our Founder, Chairman and CEO, John Schnatter; our President and COO, Steve Ritchie; as well as other members of our senior management team. After the financial update, John and Steve will have comments about the business and the management team will then be available for Q&A. Our discussion today will contain forward-looking statements that involve risks related to future events. Actual events may differ materially from the projections discussed today. All forward-looking statements should be considered in conjunction with the cautionary statements in our earnings press release, and to the risk factors included in our SEC filings. And all statements made on this call are as of today. Please refer to our earnings press release and the Investor Relations section of our website for a reconciliation and other disclosures related to our discussion of non-GAAP financial measures on this call. Unless otherwise noted, all comparisons are versus the comparable periods from a year ago. This call is being taped, and a replay will be available for a limited time on our website and in downloadable podcast format. Now, onto a discussion of our fourth quarter results: EPS in the fourth quarter was $0.62, and 2015 adjusted EPS was…

Thank you. Our first question comes from the line of Alexander Slagle with Jefferies. Your line is open. Please go ahead.

Hey. Thanks. And congrats on your 2015 results. A question on the development, and maybe you could talk a bit more about the guidance for fewer net new units in 2016, and perhaps thoughts on your franchisees' appetite for growth? Steve M. Ritchie - President & Chief Operating Officer: Yeah, Alex. It's Steve. Thanks for the question. First off, I'd just say the unit economics and really the brand perception around the world remain extremely strong. We're really pleased with our 230 net unit openings globally last year. And I would just break this down a little bit for 2016 to explain some of the changes. So, in 2015, we had 26 conversion units in our International business. We have no similar conversions planned for that in 2016. I think the key thing to focus on is the acceleration and pace of the growth in some of our key markets, fast approaching 400 stores in the UK, fast approaching 400 stores in the region of Latin America, and fast approaching over 100 stores in Russia, still focusing on some challenges throughout Asia. But really if you back out those conversions, that's really kind of the clear explanation of some of the slowdown you see in the guidance.

That makes sense. And maybe you could reconcile also the average weekly sales metrics that we see in the 10-K. Just seems like they've been slowing in recent quarters more so than your same-store sales. If you could provide some perspective on why we might be seeing that? Lance F. Tucker - Senior Vice President, Chief Financial Officer, Treasurer & Chief Administrative Officer: Alex, this is Lance. I'll start with that one and let somebody else jump in, if they'd like to. I presume you're talking about the non-comp units that we see in our 10-K. And a lot of those numbers include non-traditional units. Those PSAs can jump around a bit based on how many non-trads we have, where those non-traditional units are located. So unfortunately, it's a little bit hard to segregate out the new from the non-comp from the data that we've given you. Although I would tell you, though, that the new units, we really have not seen a decrease in our new unit PSAs. It's the non-comps that are making that – the non-traditionals that are making that number look funny to you.

Great. That makes sense. Thank you.

Thank you. And our next question comes from the line of Alton Stump with Longbow Research. Your line is open. Please go ahead.

Thank you. Good morning. Great job on the quarter. Steve M. Ritchie - President & Chief Operating Officer: Thanks, Alton. Lance F. Tucker - Senior Vice President, Chief Financial Officer, Treasurer & Chief Administrative Officer: Thanks, Alton.

Actually I ask about this, what has been sort of a lot of hype, like somewhat media driven about a price war in pizza category, even your year-to-date. Yet as you probably know, one of your major peers is saying that they're not really seeing – please touch on – I know you mentioned, John, that you saw overall competition pick up, I think you said slightly in the fourth quarter. Any read on how things have gone as you look at the overall competitive environment so far year-to-date? John H. Schnatter - Founder, Chairman & Chief Executive Officer: Well, I'll handle part of the question and then turn it over to Steve, Alton. One of our largest competitors last year, Q4 and Q1 kind of got way off the strategy. And I think they got a little bit better on strategy this year. So I think we felt the benefits of it in a year ago. And I think we feel a little bit of the other way this year. But really if you go back 10, 15, 20 years, it's always been really competitive. And I think it will always be a really competitive category. So I feel like our job is to differentiate ourselves by owning that quality position, because at the end of the day I think the consumer can really tell the difference between a quality product and a mediocre product. Steve? Steve M. Ritchie - President & Chief Operating Officer: Yeah, John. It's Steve, Alton. I'll just add a couple more comments here too as well. So I think the important thing for our brand is price is what you pay, value is what you receive. Papa John's is the brand that clearly has the highest perceived value. So you look at our business, we don't manage the business quarter-to-quarter, we manage the business long term. In fact, we look at the business day-to-day and those daily decisions drive our annual business. And that's clearly noted by we are the only brand who has had 12 consecutive years of even or positive sales. No other brand in the pizza category can say that. If you look at our fourth quarter, yes, a little bit lighter in terms of the trend that you saw in the previous quarters in the year. But if you look at our – back to the long term, if you look at our three-year comps, they are over 15%, as I alluded to that on the three-year full year comps of 15%. We did see, as John alluded to, some slightly heavier discounting towards the tail end of the fourth quarter. Those things are going to play some factors in our business, but we are going to stay very focused on what our brand represents in that higher perceived value and believe we can deliver our 13th consecutive year and hit that 2% to 4% comp guidance.

Helpful. Thanks, guys. And then just, as I look at store growth, obviously, most of the focus is on International platform and it certainly makes sense why that's the case. But as you look at the U.S., is there a couple of pockets or regions that you feel like whether it's next year or two, or over the next five, 10 years that you could add out more stores than what you have currently, either company-owned or franchised? Steve M. Ritchie - President & Chief Operating Officer: Are you speaking to the U.S., Alton?

Yes. Steve M. Ritchie - President & Chief Operating Officer: I think – and we've talked about this in the past. I think we have targeted that 4,000 total units in the U.S. The opportunity to go beyond 4,000 units is there. That would be non-traditional opportunities. You look at that in addition to – as our average unit volumes continue to grow, as you can see the three-year clip at a 15% combined comp, you get to the point of where we start carving up some trade areas, and one store becomes two stores in very high volume zones. We have not targeted that because that's more on the long-term side. But as you alluded to, five years out, that certainly is a possibility to get over that 4,000 number in the U.S.

Great. And then just one last one and I'll hop back in the queue here. I think last quarter, Lance, you mentioned obviously you guys had some insurance cost issues pop up in 2015. I think you said that in your view that 2016 was going to be a flattish impact as compared to 2015 on the insurance cost front. Is that still your view or is there any opportunity for any potential tailwind there? Lance F. Tucker - Senior Vice President, Chief Financial Officer, Treasurer & Chief Administrative Officer: That is still our view, Alton. We expect insurance costs to remain at roughly the same level, even be maybe just slightly elevated over 2015, and that's all incorporated into our guidance. I think the one thing you may see is, hopefully you'll see it, we're certainly planning it for it to – the total insurance costs to be more evenly spread between quarters. Now, if we were to have something spring up on us again, that would obviously hit in one quarter, but the plan would be for the number to be very similar to last year and to be pretty evenly disbursed among quarters, based on what we know today.

Got it. Great. Thanks, guys.

Thank you. And our next question comes from the line of Chris O'Cull with KeyBanc. Your line is open. Please go ahead.

Great. Thanks. I just had a couple of follow-ups from some of the earlier questions. Lance, given the comp guidance is ahead of the fourth quarter results, should we assume that the trends improved here recently or are you expecting it to improve during the course of the year? Steve M. Ritchie - President & Chief Operating Officer: Chris, it's Steve. I'll start with that and Lance might chime in on that. I think, as I alluded to before, we're not going to manage business quarter-to-quarter, we look at this thing day-to-day, and we're always going to look at the business on an annual basis, because that's more long-term for us. Confidently affirming our 2% to 4% guidance for the full year, things are going to bounce around. Clearly, you can look at the first quarter and it's remained extremely competitive in terms of pricing, driven by the commodity environment that's been very favorable, not only within the pizza category with lower cheese prices, but very favorable commodities in the hamburger market with low beef prices. So share of stomach is going to be a challenge out there, but we feel very confident in our full year guidance.

Okay. Fair enough. And just the current promotion that you guys are running the large pie with five toppings for $9.99. I mean, it reminds me of the Any Pie promotion that ran several years ago for $10. Am I missing something, though, with the promotional construct where it's actually a higher ticket or does the current environment really require you guys to be aggressive with an offer like that? Steve M. Ritchie - President & Chief Operating Officer: Hey, good question, Chris. It's Steve again. So I think the design and layout of the strategy behind the $9.99 promotion was directly aligned with our Quality Guarantee. Our Quality Guarantee was implemented to really drive new customers from other brands to try the Papa John's high quality product, to really get a higher conversion on the new customer side. It's different from the Any (25:20) promotions that we have done historically where those were inclusive of all pizzas, including specialties. So the $9.99 offering a great value and a great choice, but excluding the specialty pizzas.

Yeah. Okay. That makes sense. And then, John, I know – or, Steve, I know that franchisees are always focused on improving FLM margin and sometimes, I guess, at the expense of trying to grow sales. Has there been any discussion about providing franchisees with incentives to grow sales at existing units? Steve M. Ritchie - President & Chief Operating Officer: Yeah, Chris. I think that – good question. And as you may well know, we've used incentives historically. And we always align those incentives for driving the top line. We know market share gains are the number one priority for our brand, still being – we're the younger of the top four chains. We know that our runway is clearly much longer than the other chains. And the route to that light at the end of the tunnel is certainly by driving top line sales. So we continue to pick our spots on how we view incentives and in 2016 we'll also be taking consideration for using incentives to drive top line sales. John H. Schnatter - Founder, Chairman & Chief Executive Officer: Chris, this is John. As you know, we look at the restaurant manager as the center of the universe. Our corporate profits have doubled and getting ready to triple over four or five years ago. Triple. That's a really good thing because the more profit that comes from the restaurants, the more the manager makes, the more the assistant manager makes, the more the drivers make. So it's a win, win, win, win, win. But Steve and Evan and the team have almost tripled corporate profitability at the restaurant level.

Why not provide some similar incentives to the franchisees or even their store managers to try to create that incentive to grow the sales dollars rather than the margin percent? John H. Schnatter - Founder, Chairman & Chief Executive Officer: I'll take a shot at that and then, Steve, you can kind of jump in. I don't think the franchisees quite have the same mindset of growing the top line and making sure that manager makes a healthy bonus, as we do. I don't say that they don't have it at all, but the tendency in the past – and this took us probably three or four years to get the system out of this habit, is they would look at FLM and we would look at profit after FLM. And I can honestly say they are coming around. And we're trying to lead by example. And the fact that our corporate stores are making a lot of money does I think lead them and helps guide them to a better way to run the business. But when you look at profit after FLM, you're looking at the business two or three or four years down the road. And that's what we did four or five years ago and we're bearing fruit. When you look at FLM, you're squeezing costs every day. And this is a top line gain. Steve? Steve M. Ritchie - President & Chief Operating Officer: Yeah, John. I would just add that I'm pretty proud of the franchisees over the last five years. You look at the last five years, Chris, of the franchisees' performance and compare that to the previous five years, the franchisees have gotten educated in understanding that priority number one is growing profitable transactions. And they've done quite well. This is why,…

Yeah. This is Shane, John. Exactly right. And I go back to win-win. That's the way we manage the business. We're tinkering with incentive plans quite a bit because we are trying to drive results. So we test a lot of different things throughout the year. When they work, we replicate them, which is exactly the plan here. We really like what we saw. The team members loved it. It drove exactly what we all wanted. And now we're looking to replicate that through all 10 centers in the U.S. in 2016.

Thanks, guys.

Thank you. And our next question comes from the line of Peter Saleh with BTIG. Your line is open. Please go ahead.

Great. Thanks. I just wanted to ask, in your conversations I guess with the franchisees, how do they feel about, I guess, the decision not to discount aggressively, not to match or at least come down to some of the price points in the industry during the fourth quarter? Do you feel like they would agree that this was the right decision not to discount a little bit more aggressively? John H. Schnatter - Founder, Chairman & Chief Executive Officer: Well, Peter, this is John. There's always dynamic tension between franchisees and corporate on how to price the products because, different parts of the country you can get more for the product, different parts of the country you get less. With that being said, I don't know if it's just the success we're having or Steve's leadership, but the relationship with our franchisees is probably more collaborative than it's been since maybe in the early 1990s when we were just getting started. So it is collaborative. Now, we do challenge each other's judgment. And it is at times a little tense, because if somebody gets locked in on a $12 price point and somebody else is locked in on a $9, there is some tension there, but we seem to be able to work through it in pretty smooth way. Steve M. Ritchie - President & Chief Operating Officer: Yeah. John, I would just add. Peter, it's Steve. So, I think a couple of unique things about the Papa John's brand that might contrast to some of our competitors is from a national to a local. So we provide a significant amount of flexibility with the local marketing spend, so they can choose and pick their spots, to John's point. In California, clearly, we can command a higher price point than maybe we can here in Louisville, Kentucky. So, that level of flexibility from a media standpoint on TV to their digital flexibility, provides the franchisees the opportunity to what they have to do to compete and win.

Got it. And then, just on general industry big picture. Are you still seeing or are we seeing the closures of some of the independent, some of the smaller chains? Is that still ongoing in the industry, or has the decline in the cheese prices really, I guess helped some of these guys stay in business a little bit longer? John H. Schnatter - Founder, Chairman & Chief Executive Officer: This is John. I think there's no doubt the lower cheese price has helped us all. I think it's fair to say that the independents and the regionals are still shrinking somewhat, but there's two types of independents and regionals. There's independents that make a high-quality pizza, we actually think they're doing quite well. And there's independents that sell on-price, we think those folks are the ones that are getting hurt.

Got it. And then, Lance, just real quick on the unit growth commentary, or just the average weekly sales volumes. Has the mix of the non-traditional units, has that been increasing for the past couple of years, or has that been staying the same? Lance F. Tucker - Senior Vice President, Chief Financial Officer, Treasurer & Chief Administrative Officer: Peter, it's been going up just a little bit, the non-trad side of it. I don't have the exact numbers in front of me as far as the exact mixes, but they have been going up a little bit on the non-trad side.

Got it. Great. And then just last question from me. I saw you guys rolled out the Brookie. Should we think of that as really incremental given you have similar items on your menu already? Is that something that could drive incremental check? Or is that going to cannibalize some of the other sales of some of the other desserts on the menu? Steve M. Ritchie - President & Chief Operating Officer: Yeah. Peter, it's Steve. I'll answer that one. So, a little bit of both. There is a level of incrementality that we expected with the introduction of the Brookie, but we did also anticipate a slight cannibalization of the existing dessert. But the way we look at it is the overall mix and we did see and experienced overall mix, incremental mixes in our dessert line as we experienced in some of the sides we've added over the last couple of years. The overall incremental mix continues to gain, which is we like driving ticket through product mix, not ticket through price increases. So that's worked quite well for us.

Excellent. And then I just have actually one more. Cheese contracted for 2016, are you guys, at least on the company side, are you predominately locked up? Or do you have a lot floating still for 2016? Lance F. Tucker - Senior Vice President, Chief Financial Officer, Treasurer & Chief Administrative Officer: Peter, it's Lance. We're kind of following our normal procedure, which means we do in fact have some locked up for 2016 in similar amounts to what we've seen in the prior years.

Excellent. Thank you very much.

Our next question comes from the line of Mark Smith with Feltl & Company. Your line is open. Please go ahead. Mark E. Smith - Feltl & Co.: Hey. Good morning, guys. First off and sorry if I missed this, can you give us an update on acquisitions of franchisees, kind of what you still expect here in the first half of the year? And any change in kind of your strategy? John H. Schnatter - Founder, Chairman & Chief Executive Officer: Mark, I'll start with that and let Steve jump in if he needs to. So, we did have a 19 store acquisition that we closed on in the first quarter of some stores down in Florida. They were a good fit with our current corporate base. And so we will be opportunistic, as we always are, around markets. There's no long-term strategy change, though. We still expect to be in the 20% range for corporate. As markets make sense for us to buy or sell, we'll evaluate those, but no significant changes in strategy and nothing else really going on in the pipeline right now. Steve M. Ritchie - President & Chief Operating Officer: Mark, it's Steve. The only thing I would add, which we like this, is we're seeing a lot of excitement from our larger franchisees that are out pursuing to acquire larger markets. Clearly they like our stores, so we get a lot of phone calls from our larger franchisees looking to acquire our business. But as we've alluded to, the success that we've continued to build on our corporate restaurants there's no really change in the way we're looking at this thing for 2016. Mark E. Smith - Feltl & Co.: Okay. And then second, can you just give us anymore update on the…

Thank you. And our next question comes from the line of Kieran McCabe with Sidoti & Company. Your line is open. Please go ahead. Kieran McCabe - Sidoti & Co. LLC: Yes. I just had a couple of questions on the costs. I was wondering if you could provide any color on what you're seeing in the labor market, labor pressures and how that may be impacting? And then, it seemed like operating expenses were a bit better. Are you seeing any kind of benefit or synergies from some of the technology initiatives that you put through recently, flowing through there? John H. Schnatter - Founder, Chairman & Chief Executive Officer: Kieran, I'll take this from kind of a macro and let Steve take it in a little bit more detail. We are getting better in every single discipline in the business every day. I mean Shane and his team with the distribution, they just get better. Cynthia and her team in IS, to your point, we get more efficient, we're getting better. Sean Muldoon with -- is now our Chief Ingredient Officer as we talked to earlier, he's getting better. We think we're getting better at sifting through franchisees and good and bad with Tim O'Hern and his team, and I think we are getting better with our openings. So you cannot not get better in this business and survive. So, the mind set of just constantly improving and beating our previous best is something we do every day. Steve M. Ritchie - President & Chief Operating Officer: Yeah. John, I couldn't agree more. And Kieran, the only thing I'd add, just on the wage question. Clearly, 80% of our stores in the U.S. are franchised, 20% corporate. So our franchisees, there's a lot of volatility from state to…

Thank you. And I am showing no further questions at this time, and I would like to turn the conference back over to Mr. Lance Tucker for any closing remarks. Lance F. Tucker - Senior Vice President, Chief Financial Officer, Treasurer & Chief Administrative Officer: Great. Thank you, Michelle, and thanks to everybody for being on the call. John H. Schnatter - Founder, Chairman & Chief Executive Officer: Thanks, Michelle. Steve M. Ritchie - President & Chief Operating Officer: Thank you.

Ladies and gentlemen, thank you for participating in today's conference. This does conclude the program and you may all disconnect. Everyone have a great day.