Ladies and gentlemen, thanks very much for standing by. Good day and welcome to the Red Robin Gourmet Burgers, Inc. third quarter 2009 financial results conference call. (Operator Instructions) It's now my pleasure to turn the floor over to your host, Katie Scherping, Chief Financial Officer of Red Robin.

Thanks, Kevin. Before I get started, I need to remind everyone that part of today's discussion will include forward-looking statements. These statements will include but not be limited to references to our margins, new restaurant openings or NRO, trends, costs and administrative expenses and other expectations. Also, these statements are based on what we expect as of this conference call, and we undertake no obligation to update these statements to reflect events or circumstances that might arise after this call. These forward-looking statements are not guarantees of future performance and therefore investors should not place undue reliance on them. We refer all of you to our 10-K and our 10-Q filings with the SEC for a more detailed discussion of the risks that could impact our future operating results and financial condition. We plan to file our 10-Q for the fiscal third quarter of 2009 by close of business tomorrow. And I want to inform our listeners that we will be making some references to non-GAAP financial measures today during our call. You'll find supplemental data in our press release on Schedules 1 and 2, which reconcile our non-GAAP measures to our GAAP results. Now I'll turn the call over to Denny Mullen, Chairman and Chief Executive Officer. Denny?

Thanks Katie, and thanks everyone for joining us today. We also have with us Eric Houseman, our President and Chief Operating officer, and Susan Lintonsmith, our Chief Marketing Officer. Eric will provide detail on the third quarter results and an update on our operations initiatives, and Susan will update you on our traffic, building and loyalty efforts. Then Katie will review in detail our most recent financial performance and our business outlook, but first I want to share with you some of the recent developments on the marketing front. As you have seen from our earnings press release, our comp store sales decreased 14.9% in the third quarter. In our call last August we told you that our comps were down 15.3% for the first four weeks of Q3 as we lapped our third-best comps in the first four weeks of Q3 '08. In response to the very challenging business environment, we've implemented a variety of marketing and promotional tactics to support our overall marketing strategy of product news, which has been our strategy since the beginning of 2009. Specifically, we recently introduced our most recent product news and our fall promotion, the Wise Guy Burger and Chicken Caprese Sandwich, with three weeks of local, network and cable TV in 10 markets covering about 100 of our restaurants. These great products were featured with bottomless steak fries at a $5.99 price point as part of a limited time offer. Since the ads began the last week of Q3 and ran through the first two weeks of Q4, the impact on the third quarter results was nominal; however, we are pleased with the campaign's results, and Susan will cover those in greater detail in a few minutes. On the restaurant development side, we did not have any company opening restaurants in…

Thanks, Denny, and good afternoon, everyone. In the third quarter of 2009 our comp store sales decrease of 14.9% was driven by a 13.8% decrease guest counts and a 1.1% decrease in average check. This compares to being down 2.2% in the third quarter last year. As Denny mentioned, we did not realize a significant impact from television advertising in the third quarter of this year since only one of the three weeks of TV advertising to support our Wise Guy Burger and Chicken Caprese Sandwich LTO was in the third quarter. For the first four weeks of the fourth quarter of this year, which include the last two of the three-week LTO TV ads in our 10 TV markets, our comp store sales trended better on a sequential basis as they were down 11.6%. This compares to down 8% in the first four-week period of the fourth quarter of 2008, which did include two weeks of national cable television advertising. Average weekly sales for the restaurants in our comparable base were $51,964 during the third quarter of 2009 compared to $62,182 for a comparable base in the third quarter of '08. Average weekly sales for our 35 non-comparable restaurants were $49,385 during the third quarter of 2009. This compared to $56,111 for our non-comp restaurants a year earlier. Continuing along with the operations update, you'll recall that a restaurant enters our comparable base five full quarters after it opens. The 15 franchise restaurants that we acquired early in the second quarter of 2008 did join our comparable base beginning in the third quarter this year, so our third quarter had 269 company-owned comparable restaurants out of the 304 total company-owned restaurants. For all company-owned restaurants, average weekly sales were $51,667 from 3,648 operating weeks in the third quarter of…

Thanks, Eric. Our marketing strategy continues to be focused on supporting product news with targeted tactics to drive incremental traffic and retention. Our focus is greater emphasis on product news, quality, value and variety versus pure brand-building initiatives that in prior years were successful in strengthening awareness for Red Robin. We used the results of our Steak Slider TV advertising in Q2 of this year to determine how to best use TV to support product news going forward. We called out we supported Steak Sliders without a price point for three weeks on national cable TV in June. While we saw a slight shift or lift in sales from the TV ads, we learned several things that we've applied to the latest round of television that Denny described earlier. In our last call we mentioned that we were exploring local TV advertising as an additional tactic to support our limited time offer or LTO product news - the Wise Guy Burger and the Chicken Caprese Sandwich. Both products are craveable and represent the quality, value and variety that are core to our Red Robin menu. We decided in early September to make a $1.1 million investment to run local TV advertising in 10 company markets to promote the two LTO products for a value price point of $5.99 each. We were pleased with the TV creative that blended product news with messages of quality, value and variety and with media weights that were significantly higher than our weights with the Steak Sliders in 2Q. The TV media ran for three weeks, ending on October 18th, in 10 markets, covering about 100 of our restaurants or a third of our company base. We were pleased by the positive traffic and sales results, which I will share with you now. In the…

Thanks, Susan. First of all, if you haven't already seen our news release on the quarter's results, you can find it on our website at RedRobin.com in the Investor Relations section. The fiscal third quarter of 2009 was the 12-week period ending October 4, 2009. Compared to the fiscal third quarter last year, total revenue, including restaurant sales and franchise royalties, decreased 10.4% to $187 million. Restaurant sales decreased 10.4% to $183.9 million and consisted of $163.5 million in sales from our comp restaurants, which include the 2008 acquired restaurants since they're now part of our comp base, and $20.4 million in sales from our non-comparable restaurants. Franchise royalties and fees decreased 8% in the third quarter to $3 million. The 101 comp restaurants in the U.S. franchise system reported a 4.4% decrease in same-store sales, while the 18 comp restaurants in the Canadian franchise system reported a 0.2% decrease in same-store sales for the third quarter. As Eric said, our restaurant-level operating profit margin was 16.5% in Q3 2009. The 200 basis point decrease from the third quarter last year was driven by a 160 basis point increase in labor costs and about 100 basis points of higher occupancy costs due mainly to deleveraging from lower average restaurant volumes year-over-year. These higher costs were partially offset by 30 basis points of lower food and beverage costs and 30 basis points of lower operating costs. From a cost of goods standpoint, we did see some relief in a good portion of our commodity basket in the quarter in addition to receiving some benefit from a true-up of food and beverage rebates. Our hamburger pricing, which had been running above our contract at 2008 pricing through the first half of the year, saw a reduction in the third quarter that averaged…

Thanks, Katie. In closing, as we've seen from last quarter's results, the operating environment remains difficult, but our teams continue to focus on the right things to strengthen our business and build the Red Robin brand. We've cited many examples, such as the progress our restaurant teams continue to make in growing our leadership talent, managing controllable costs, delivering great gourmet burgers and making a connection with our guests. Our marketing strategies and tactics are now even more focused on driving traffic and loyalty and at the same time communicating quality, variety and value that Red Robin offers our guests. And our development teams are on track to complete the first of our new locations in 2010 that represent continued and prudent new restaurant expansion at average investment costs that are lower than we've seen in several years. Across the company our team members are contributing to the continued growth and strength of our brand, and I want to thank them for all their hard work and dedication to each other and to our guests. With that, we welcome your questions. Thank you.

(Operator Instructions) Your first question comes from [Andrew Chiles] - BAS-ML.

Could you talk a little bit about the pressure that you're seeing from double cheeseburger competition at the QSR level?

Well, there's competition across all levels, so we have nothing specific to respond to on any particular double cheeseburger promotion.

And also the first four weeks of the quarter in October same-store sales, what are you guys lapping for the November and December of 2008?

We don't disclose period to period. Our first quarter of 2008 was down 7.4% for the full quarter, so we began with a negative 8 in the first four weeks.

Your next question comes from [Rachel Schechter] - Oppenheimer & Co. Rachel Schechter - Oppenheimer & Co.: Just regarding your comps, if you could comment on your traffic trend at lunch versus dinner and weekday versus weekend, and also if you see any change in major geographies?

The lunch versus dinner mix has not changed, Rachel. It's been the same that we've seen for several years, and we've kept our eye on that after the competition question. We've watched that very carefully, and we haven't seen any degradation there. And the weekday trends haven't really changed, so that's still about the same. They're pretty consistent all the way across the week. Rachel Schechter - Oppenheimer & Co.: And then any major geography changes?

Not really. We called out California, Arizona, Nevada awhile ago when they first starting impacting us significantly early in 2008, and we haven't seen any material changes in any region since then. Rachel Schechter - Oppenheimer & Co.: And then some of the other calls we've been listening to have mentioned that they expect a negative impact on same-store sales from the Halloween and Christmas weekend shift this year. Are you expecting to see the same?

We looked at our past history when Halloween and Christmas fell on the same days, and we really didn't see a significant impact. So maybe 10 basis points in a quarter, but it's not significant.

Halloween was Friday last year and Saturday this, so they're both big nights for us, so we wouldn't have seen a material change there. Rachel Schechter - Oppenheimer & Co.: And then also I know recently there was some snowfall in Denver. Did that affect your October comp at all?

No, I don't think materially. We didn't close any restaurants. We actually had a Board meeting and went out to dinner at the Red Robin that evening. It had some effect, but we always have snow in Colorado. Rachel Schechter - Oppenheimer & Co.: And just a last question. Given your guidance of 150 to 160 basis points decline restaurant margins, does that mean you're expecting Q4 restaurant margins to be sub-15%?

Well, it depends on what you expect the top line to be, and I'm not going to guide you there. So, yes, for the full year we gave you 150 to 160, and you can do the math on whatever you think your top line's going to be.

Your next question comes from Jeffrey Omohundro - Wells Fargo Securities.

My question relates to average check and the decline in the period, pricing versus mix. What kind of activity are you seeing among your guests in terms of their search for value? It sounds like from the LTO there's significant pent-up demand there. Just in general what your thinking is around that; a little more elaboration would be helpful.

From a price mix standpoint, our price mix has been declining a bit since obviously prices rolled off. We've seen a little bit of a mix shift headed away from some of the entrees into the burger category, but it's hard to tell if that's coming from more restaurants opening, people trying the burgers and shifting promotion to the burger category like we were talking about. We've seen a lot bigger increase in that, so we have lost some mix shift from that. But that's really about it. And then as far as value, etc., I'll let Susan comment on that.

What I can say is that we did see quite a few people capitalize on the $5.99 Chicken Caprese Sandwich and the Wise Guy Burger. That didn't materially impact our guest check average. We did see about $0.40.

In those 10 markets.

In those 10 markets.

$0.40 in those 10 markets where the two products that we promoted represented around 10% of sales.

Correct.

That's really remarkable. Did you happen to do any testing around guest satisfaction in those markets?

Well, we're continuing to test that or to monitor that with our Guest Voice program. And we have been seeing some gradual improvements period-over-period in our guest satisfaction rating, and we started off at higher than the industry average on those anyway, so we've been really pleased to see guest satisfaction increase overall in TV and non-TV markets.

So that's overall, not specific to these 10 markets where I would assume they're probably spiking?

We will be getting that data as we roll forward here as it gets sent in or put in through the Internet. And we talked to team members, etc., and general managers, etc., while the promotion was going on in all the markets to try to gauge guest reaction. It certainly increased the traffic big time.

(Operator Instructions) Your next question comes from Brad Ludington - KeyBanc Capital Markets.

I wanted to ask, one thing I might have missed a little bit trying to keep up with the commentary on marketing was obviously it sounds like you're going to have some more television advertisements in 2010, but what kind of focus will you have on the direct mail and loyalty program going forward?

Well, we plan at this point to continue with both. The loyalty, first off, is in the pilot right now and we do plan to roll that out in 2010. And direct mail, we've been very pleased with the results of that to date, and so just currently we are looking at having that as part of our tactics for 2010. But all of it is, again, to support our LTO product news.

And then in those markets, when you ran the $5.99 for the rollout of the Chicken Caprese and the Wise Guy, as that $5.99 price point rolled off, did you see a big drop off in traffic or did traffic still at least maintain to some level?

Well, we actually have continued that price point through the entire promotion in those 10 TV markets, so it continued past those three weeks.

It actually goes to Sunday.

Yes, it goes until Sunday, November 8th.

And then the product will be out of the restaurants, so it's not a discount of anything that's currently on the menu.

And do you have a schedule for LTOs going forward? Should we expect one a quarter or is that still kind of being decided?

It's still being decided right now, but we definitely are looking at having a couple of pulses similar to what we had this year with product news in 2010, and this time probably supported with television in whatever markets we think make sense.

We have a good pipeline of products to choose from going forward, so we'll make those decisions as we move forward into the 2010 planning phase.

And then just given a similar number of store openings, should we expect similar CapEx, $40 to $45 million, in 2010?

Yes, that's how we're modeling it.

Your next question comes from Greg Ruedy - Stephens Inc.

Following up on the price points on the Wise Guy and the Caprese, is that $5.99 an average? Were you scaling different price points across those 10 markets? Or was it just $5.99 across the board?

We did $5.99 in all 10 markets.

A question for Eric. The heart of the house efficiencies, I appreciate the color on the two hours of prep that you've been able to pull. Can you talk about further opportunities to get more efficiencies out of the back of the house or are we at the point where really the easiest labor saves are out of the four walls?

No, Greg, great question. We actually were able to pull more than the two hours. That's the net-net. We were actually able to pull closer to five but reinvested another three hours in the business. We'll continue to examine the heart of the house efficiencies. There is some opportunity there. We don't have major initiatives right now. We're focusing more of our attention in the front of the house. So just more to come on that, but too early in the analysis to quantify any savings there.

Your next question comes from Tommy Halloran - Courage Capital Management.

I have two questions. The first is: On the burgers that you are discounting, I mean, excuse me, limited time offering, are they the same size as the burgers that are currently on the menu?

Yes, they are. Yes.

And then secondly, when you all are talking about looking for cost savings on the labor side in the front of the house, where do you begin to feel like you're getting into territory that begins to impair the guest experience?

Yes, there's a balance, Tommy. We'd never sacrifice labor in terms of eroding the guest experience; however, we would look at how to utilize technology in different areas of the business to effectively improve our efficiencies as well as managing the shoulders of our business better.

Your next question comes from [Amal Duci] - Johnson Rice.

The 10 markets you're referring to, what is that as a percentage of your total system?

Of our company restaurants it's about a third of our restaurants.

In terms of the two-year poultry contract that you signed, how much of a premium did you have to pay over spot to lock in a longer timeframe?

We don't disclose the terms of our contract. Just suffice it to say it's a contract that's more favorable than the two-year contract that just expired, so we are looking forward to some relief on poultry pricing going forward.

Regarding the sequential decline in G&A, how much of that is the result of the headcount reduction and is there anything else in that number?

For the overall full year we don't expect that to be material at all. There's some severance expense that'll hit us in Q4, but it won't be material for the year.

So how should I think about a G&A number of 2010? Can you help with that, please?

We're not going to give guidance on that yet. We need to fully make our G&A plans and we're in the process of doing that right now.

With that, ladies and gentlemen, there are no other questions. We'll conclude the question-and-answer session. I'll turn things back over to our speakers for any additional or closing remarks today.

Well, thank you all for your questions, and certainly thanks to our great team members out there at Red Robins. We appreciate it. Thank you.

Thanks again for joining us everyone. That will conclude today's call. Have a good afternoon.