Red Robin Gourmet Burgers, Inc. (RRGB) Q2 2015 Earnings Report, Transcript and Summary

Please stand by. We're about to begin. Good morning, ladies and gentlemen, and welcome to the Red Robin Gourmet Burgers, Inc. Second Quarter 2015 Earnings Call. Today's call is being recorded. As a reminder, part of today's discussion will include forward-looking statements within the meaning of federal securities laws. These statements are commonly identified by words such as anticipate, continue, plan, expect, intend, should, will, and other terms with similar meaning. These statements include, but will not be limited to, statements that reflect the company's current expectations with respect to the macroeconomic and competitive environment, the financial condition of the company, results of operation, strategy, objectives, and future performance, including the company's traffic and revenue-driving initiatives, sales growth, operating margin and operating weeks, costs, expenses, expense management, deployment of capital, restaurant development and remodel, performance of remodeled and acquired restaurants, new technology devices and systems, and other expectations discussed within the course of this call. Although the company believes the assumptions upon which preliminary or initial results, financial information and forward-looking statements are based are reasonable as of today's date, these forward-looking statements are not guarantees of future performance, and therefore, investors should not place undue reliance on them. Also, these statements are based upon facts known and expected as of the date of this conference call, and the company undertakes no obligation to update these statements to reflect events or circumstances that might arise after this call. Participants on the call today should refer to the company's Form 10-K and other filings with the SEC for a more detailed discussion of risks and uncertainties and other factors that could impact the company's future operating results and financial condition. The company has posted its fiscal second quarter 2015 press release and supplemental financial information related to the quarter's results on its website at www.redrobin.com in the Investors section. Now, I would like to turn the call over to Mr. Steve Carley, Chief Executive Officer of Red Robin. Please go ahead, sir. Stephen E. Carley - Chief Executive Officer & Director: Thank you, Jamie, and good morning, everyone. Thanks for joining us this morning. With me today are Stuart Brown, our Chief Financial Officer, and Denny Post, our Chief Concept Officer. After we deliver our prepared remarks, we'll be happy to answer questions. Before I turn it over to Denny for an update on our engagement initiatives, let me briefly recap the quarter's results. I'm very pleased to report that guests are continuing to respond to our menu improvements, our restaurants brand transformation remodels, new locations and enhanced service. Restaurant revenue was up 14.6% year-over-year and same-store sales were up 2.9%. Restaurant level profit improved by 30 basis points to 22.5% and net income was up 13.6%. Adjusted earnings per share came in at $0.78, up 14.7% from last year. We continued to outpace the casual dining category by profitably building traffic. According to Black Box, Red Robin's traffic in Q2 was 230 basis points ahead of the competitive set in spite of aggressive discounting and the burger-centric menu and promotional activity of our competitors. We have now outperformed our peers on a comparable sales basis for four straight years. With that, let me turn it over to Denny to address what's been driving our performance.

Thanks, Steve. I'm happy to have a chance to talk about how the teams continue to elevate the Red Robin brand, increasing market share and shareholder value as a result. I've got a lot to cover, so I'm going to move quickly; brand transformation, Ziosk, Kids Menu mix and marketing updates. Regarding brand transformation, we are on track to complete 150 remodels in 2015 which will get us to over 70% of corporate restaurants updated to new standards by yearend. This is a process we expect to complete by the end of 2016. We remain bullish on the transformation for two reasons. First, because guest voice results are significantly higher in those transformed restaurants; and secondly, because of the locations that we and our franchisees have updated this year are up 4% on average versus trend while locations we have transformed in the past two years continue to comp positively. The guest is discovering and loving our new environment. Regarding the rollout of Ziosk tabletop devices, after a thorough testing, we have begun the national rollout which will be complete no later than yearend. While the device offers several guest advantages, most notably of course the ability to pay when they are ready, we are most excited about how it helps our servers engage with the guests, eliminating non-value headed trips across the dining room in favor of more time table-side, connecting with that guest. We are using the rollout and the associated training to reinforce all components of our Triple R service model. We continue to drive positive food and beverage mix to improve quality, menu innovation, and creative presentation. Our current Burgers and a Movie tie-in is with the latest Terminator film, and it's featuring a limited time only Genisys burger, which is topped with roasted jalapeños, jalapeño aioli, bacon, and avocado. Guests receive a free movie ticket with the purchase of a $25 limited edition Terminator Genisys gift card. And I'm sorry to let The Rock know, also known has Hercules, that the big man, Arnold, trumped him big time, with Terminator gift card sales up promotion to-date 25% versus total sales for Hercules last year. We just refreshed our Kids Menu and our presentation with some new and updated entrees like Meatball Lollipops, and Mini Corn Dogs. All of the meals are served on fun new plates that play off with a quirky artwork on our walls. The kids are sporting moustaches on their straws while entertaining themselves with chalkboards and placemats. Families remain core to our business and we will stay ahead of the curve on fun, food and environment for kids. Along with that new Kids Menu and the Terminator items, we took the opportunity to update our salad lineup. We are committed to ensuring all menu items are as delicious and distinctive as our burgers and the changes to salads are a major stride in that direction. For example, our new Insane Romaine is a twist on your classic, boring, chopped Caesar salad. The new salad features fire-charred romaine hearts, roasted tomatoes and parmesan cheese that is a real wow in presentation. Continuing on that menu improvement theme, guests continue to respond also to the updated lineup of appetizers, desserts and beers that we've launched over the last two years. Combined, they drove PPA over 100 basis points in this quarter as more guests opted in. The Finest burger lineup also continues to do very well and, in fact, exceeded our expectations on mix this summer. We will have more news on Finest this year. To support the Brews half of our new Gourmet Burgers and Brews positioning, we recently committed to a multiyear sponsorship of the Great American Beer Festival which is the premier annual gathering of craft brewers. We believe this partnership will help elevate the new branding and bring more attention to our broad beer selection. We will feature some of the winning craft beers as available regionally in our restaurants, just as we continue to bring our winning selection from the South Beach Food & Wine Festival Burger Bash successfully to our menu every year. Chef-inspired burgers and craft beers equal a great combination for this burger authority. In terms of TV advertising, we finished the quarter supporting our Burgers and a Movie tie-in and returned to promoting the compelling every day value of Red's Tavern Double with Bottomless Fries starting at $6.99. We still have a long way to go to drive awareness of Tavern Double. This starting price still appeals to value-conscious guests, while bringing in others who often choose to trade up to Gourmet or Finest Burgers. We continue to engage guests and build loyalty profitably through Red Robin Royalty. We just launched an added feature called Burgers for Better Schools which allows guests to direct our investment to schools of their choice in communities where we do business. Red Robin Royalty members select a school and every time they dine at Red Robin, 1% of their check will go to that organization. After a full school year of market testing, we are very excited to launch this program nationally. As the NFL teams are already in training camp and gearing up for preseason, this is a good time to update you all on the status of our sports sponsorships. This season, we will only be affiliated with the Super Bowl almost-winning Seattle Seahawks. We are replacing the three NFL sponsorships we chose not to renew with more profitable and predictable traffic-driving programs. We are also engaging with guests and team members through local activities that benefit communities in other ways. On August 20, we will celebrate National Lemonade Day in more than 450 restaurants and collect donations to help fund the fight against childhood cancer. Our goal is to raise at least $100,000 on that day. And in fact, we are on track to hit $1 million total raised by the end of this year through sales of our signature Freckled Lemonade, one glass $0.10 at a time to benefit our national charity partner, Alex's Lemonade Stand Foundation. We are also proud to be participating in the 100,000 Opportunities Initiative that begins later this week in Chicago alongside some of America's most influential companies. The initiative will help guide thousands of young people across the country to start their careers, careers we'd love to see some of them play out at Red Robin. In short, we remain focused on building guest engagement that profits our company and our communities. With that, I'll turn it over to Stuart.

Thanks, Denny, and good morning, everyone. We are pleased with the strong second quarter cash flow and earnings growth our teams delivered through effectively leveraging 14.4% higher revenue, favorable commodities, and additional operating efficiencies. Our second quarter adjusted EBITDA increased 19.6% from the prior year to $35 million, while our EBITDA margin increased to 12%. These are adjusted to exclude management transition cost of about $550,000 recorded a year ago. As you can see on slide 10 of our supplemental reporting package, adjusted EBITDA over the trailing four quarters totaled $138.7 million, an increase of $25.6 million or almost 23% over the four quarters ended Q2 2014. Adjusted earnings per diluted share increased 14.7% in the second quarter over last year to $0.78 per share. As Steve touched on the second quarter casual dining traffic trends, we're softer than we expected. Industry unit counts continued to grow and the environment remained highly competitive. Our comparable traffic growth, however, was positive 0.5% and outperformed the industry by 230 basis points with 20% less national cable than a year ago and more targeted Red Robin Royalty offers. The traffic outperformance accelerated from 210 basis points in the first quarter and is on top of 50 basis points of traffic outperformance a year ago according to Black Box. Our guests continue to respond positively to our brand transformation remodels, and we continue to be pleased with the sales contributions from these locations, which contributed to our 2.9% comparable revenue growth. I also want to take a moment to step back and look at the bigger picture. Our performance over a broader timeframe. We are pleased that our comparable revenue growth has remained above the industry for each of the past five years. Our comparable revenue growth has exceeded our peers by an average 2.3% per year, or 11.5% cumulatively over the last five years. As any good fund manager will tell you though, past results are no guarantee of future performance. We believe that continuing to make Red Robin a better place for guests and for team members though will also continue to deliver attractive results. Restaurant level margins exceeded our expectations in the quarter largely due to lower ground beef inflation than we anticipated and faster improvement at the restaurants we acquired last year. Commodity inflation was about 1.5% in the second quarter. Benefit costs were lower than we expected, but much closer to historical levels than the favorability we experienced in the first quarter. Depreciation was in line with expectations with a $3.1 million increase related mainly to restaurants acquired last year, new openings and remodels. General and administrative together with selling costs were in line with our expectations at 11.7% of sales. EBITDA year-to-date as adjusted was $82 million compared to capital expenditures of $70 million. Year-to-date, we have invested $31 million remodeling to our new brand standards, $17 million in new and relocated units, $15 million in restaurant technology and systems, as well as about $7 million in ongoing maintenance. Our capital expenditure guidance of $170 million for the year remains unchanged, as we plan to remodel 150 units and open 20 Red Robins. However, we continue to be impacted by permitting issues and landlord delays, which have setback the timing of openings. We have already opened 4 new Red Robins in the first half and expect to open 6 locations in the third quarter and 10 more in the fourth. Regarding Red Robin Burger Works, we opened three units in the first half and expect to open two more in Q4 with timing dependent upon receiving final permits. Further, we are working to increase our restaurant development pipeline, which will allow us to accelerate growth in coming years if conditions warrant. Our balance sheet remained solid, though our leverage should increase somewhat over the next two quarters, as the pace of remodels and new restaurant openings pick up. While adjusted EBITDA growth will slow slightly in the second half as we cycle over the acquisitions, we expect growth approaching 20% for the year compared to 2014's EBITDA of $122.9 million as adjusted. Our outlook for the rest of 2015 reflects an expectation that third quarter and fourth quarter comparable restaurant revenue will remain relatively consistent with the first half. Restaurant level margins are anticipated to be better than previously guided and north of 22% due mainly to lower-than-expected commodity inflation. Our outlook for general and administrative expenses has increased a bit due to higher incentive compensation, as well as team member hiring and training costs. Similar to many of our peers, we are experiencing an increase in team member turnover as the labor market tightens from significant industry hiring. Selling, general and administrative cost, together as a percentage of revenue, is expected to be around 11% in the third quarter and 10% in the fourth quarter. As you can see, we had a solid second quarter with sales and traffic outperforming the industry once again, and we believe we're on track for better EBITDA and earnings growth in the second half of the year compared to our original outlook. While 2016 will bring a winding down of our remodels to largely complete the program, we are preparing to ramp up Red Robin and Burger Works development from current levels to capitalize on opportunities to grow our brand. Steve, I'll turn the call over to you for final comments. Stephen E. Carley - Chief Executive Officer & Director: Thanks, Stuart. In conclusion, we are pleased about the results we're getting from the Brand Transformation Initiative. We have a strong pipeline of craveable new food and beverage offerings, and we continue to make great progress on finding efficiencies in the business that do not compromise guest service. As always, I'd like to thank our great Red Robin team members for their hard work and dedication this last quarter. They continue to transform the Red Robin brand and greet our guests with a healthy dash of bottomless fun and a genuine spirit of service. Our teams are the reason we continue to be the recognized burger authority. At this point, operator, let's open it up for questions.

Thank you, sir. And we'll take our first caller, Joseph Buckley with Bank of America.

Thank you. A couple of questions. Denny, can I ask you to go through the gift card comments you made around the Terminator promotion?

Sure, glad to. We are still in the promotion for Terminator. So, we still have a few more weeks related to that. And we are already up 25% in total gift card sales versus what we did last year for the total promotion for Hercules. So, we'll see where we end up in the end. But right now, it looks as though Terminator, certainly from a gift card sales perspective, has well outplayed last year's promotion.

And do the gift cards have any timing aspect of them in terms of redemption?

No. They are open-ending. They are $25 gift card to use when they choose. The $5 element or the gift, the free movie ticket, is something they can get right away.

Okay. And then broader question. Talk about sales maybe during the quarter, how they paced? The comparison was a lot easier and the two-year numbers were lower. And just kind of curious what you saw as the quarter transpired.

We don't go through details of in-quarter and never have. But I can tell you that category trends overall for the quarter have been softer, I think, than any of us expected. The consumer has been a little bit more cautious to come back. That said, I'm very happy to see us up 50 basis points in traffic versus being down almost 200 basis points for the category. And most importantly, I'm focused primarily and we are as a team on driving profitable traffic. And that means that we've targeted some of our Red Robin Royalty offers a bit more tightly than in the past. And also, we're playing a bit around with our media mix and some of the elements of our spending which could have some impact in quarter but, overall, I think we've played it pretty well compared to the category.

And then one last one, just the occupancy costs as a percent of sales are up again year-over-year and just kind of curious the factors that play into that. Does it tie into the acquisition and should that ease as we lap the acquisition from a year ago?

Joe, yeah, the biggest impact is clearly the acquisition, so we'll start lapping that now in the third quarter. So that's the biggest – they've got higher occupancy costs with lower volume, so as a percentage. And also in the quarter, we were hit with a little bit higher general liability costs than trend and over last year. So those two things combined drove the occupancy costs.

Okay. Thank you.

We'll take our next question from Chris O'Cull with KeyBanc.

Thanks. Good morning, guys.

Morning.

Stuart, can you tell us how much did the remodel program contribute to the traffic growth during the quarter? And then maybe how should we think about the remodel program going forward in terms of its contribution and just the average spend you're going to be – or average investment you're going to be making?

I think when you look at the first quarter, when we talked about 30 basis points to 40 basis points contribution from the BTI to total comp growth. So, absent the remodels, comp growth wouldn't have been 2.9%, it would have been closer to 2.5%. And that was – I'm sorry – in the second quarter, it contributed about 50 basis points. So, it's continuing to ramp up as we get more and more completed. And so, when you get to yearend and we should be around somewhere 75 basis points to 100 basis points contribution by the time you get around to fourth quarter, and that will really start to peak then as we complete them. So, if you think about it from a return standpoint, the minimum returns that we're expecting of low teens from an IRR perspective, we're still very comfortable with, with the sales numbers, the sales growth that Denny talked about.

Okay. Okay. And then, Steve, it sounds like you plan to accelerate unit development once you get through the remodel program. Have you guys put any numbers around the unit potential of the brand domestically? And then maybe what areas of the country are going to be best suited for development or accelerated development? Stephen E. Carley - Chief Executive Officer & Director: Yeah, Chris. We have taken a look at that. You can look at some of our competitors' unit counts and that gives you an idea of how high is up. The other thing to think about is there's many parts of the country that are robust from an economic standpoint that we're very underpenetrated in. There are more Red Lobsters in Orlando than we have Red Robins in the whole state of Florida. Texas is another market where we're significantly underpenetrated and virtually all the restaurants we have there are franchise. So, if you did a white-space analysis, we probably have an opportunity for 400-plus new units, but that's not considering the quality of the trade area or the support of the retail around it. So, we're comfortable that there's a couple of 100 more Red Robins here in the next three years to five years given where we're under-penetrated and where the growth of the underlying markets are.

Do you anticipate that growth coming from the company? And do you think you could get to an expansion rate of double-digit, so like 10%? Stephen E. Carley - Chief Executive Officer & Director: The growth will primarily come from company. And we're not going to chase an arbitrary number. We want to make sure that we do a thoughtful job with both the real estate selection, and even more importantly, the human resource pipeline. But we do think there is some upside from the current growth rate.

Great. Thanks, guys.

And we'll take our next question from Will Slabaugh with Stephens.

Yeah. Thanks, guys. I had a quick question on pricing first. Could you update us on what actual menu pricing is running currently and then where it's set to go in the back half of the year? And then as a follow-up there, just considering that you are in some of the areas where you're seeing minimum wage and labor pressures creep up a little bit, curious if you've considered taking more than that kind of typical 1.5%-ish to 2% in the coming quarters?

Will, I mean our guidance, our outlook includes pricing of around 1.5% for the year, which is what we talked about last quarter. The second quarter had about 1.8% of price in it. And given we've been cautious on taking price as commodities and labor inflation has ticked up because we anticipated commodity inflation to start going the other way, which is what we're starting to see now a little bit earlier than what we expected. So, we didn't want to get pricing from a consumer value perspective out ahead of cost, and so we're very comfortable with where we are right now and don't anticipate taking any more price this year.

And we do tier pricing by region based on the economics of those areas, so you'll see, I think, five different tiers at this point in our pricings.

Got it. Thank you. And just another follow-up on same-store sales growth if I could. You get some pretty positive commentary on the movie tie-in but taking into account that the two-year same-store sales growth did slow somewhat, I'm curious if that's sort of all attributed to what you're seeing in casual dining right now? And yet, I'm kind of contrasting that with the fact that you did raise your same-store sales outlook to the high end of the previous guidance. So, is that because of something that you're seeing in the marketplace right now? I guess what sort of gives you that optimism to raise the guidance for that high end?

Will, people have asked us a lot about two-year stacked same-store sales growth. And the fact of the matter is that we've got a lot of initiatives going on every quarter. As Denny touched on, we're really focused on profitable traffic growth. So, if you look at the second quarter comp growth of 2.9% on revenue, comp restaurant level profit was up 8.5%, right? That's what's important to us, is to keep driving profitable traffic growth, and so that's what we're going to keep doing. We've got some changes, as Denny mentioned. We're looking at media mix and some other things. But if you look at our traffic outlook for the rest of the year, we've still got some major drivers, right? BTI being a primary one. We do have price and traffic mix for the year sort of implies around the 1.5% continued growth in those, which is pretty consistent with what we had in the first half. So, we're pretty comfortable with where we are from a traffic growth perspective.

Got it. And one more if I could on development, just to follow-up with that last question. So, you talked about the big potential longer term. I'm curious if you could speak to where you may ramp that, the number of units you might build per year per concept or if it's sort of early innings there?

Well, it's still early innings to sit down and talk about how high is up. When you look at Red Robin, the new midsized prototype we have and our ability to grow those as Steve mentioned, it's about pipeline of people. We want to do it smart. We want to make sure we're picking great locations. I think in our peak we opened up 30 to 35 a year. That's not completely unreasonable as long as you got a good mix of new markets and existing markets, right, in terms of how you seed them and how you open them. And Burger Works, we haven't really talked about. We're also preparing Burger Works sites. Those dense urban area of 2,000 square foot sites, they'll remain the most competitive and the most sought after out there. So, we'd like to be growing that today actually faster than we are. But again, trying to make sure that the ones we're opening are great locations so we get them opened well.

Got it. Thanks, guys.

And we'll take our next question from Brian Vaccaro with Raymond James. Mr. Vaccaro, if you'd check your mute button, at this time we cannot hear you. Brian M. Vaccaro - Raymond James & Associates, Inc.: Sorry about that. A little technologically-challenged. So, thank you and good morning. Just a quick follow up on the pricing. Stuart, can you remind us when you roll off pricing mix or more explicitly, what we could model for the third quarter and fourth quarter on pricing?

Yeah. We roll off pricing in – and November will be the next – when we roll off last year's pricing which is around 1.1%. Brian M. Vaccaro - Raymond James & Associates, Inc.: I'm sorry, 1.4% you said?

1.1%. Brian M. Vaccaro - Raymond James & Associates, Inc.: 1.1%. Okay. Thank you. And I think you said, year-on-year inflation, thinking about your COGS ratio in the second quarter, I think you said year-on-year inflation in the quarter was up 1.5%. The leverage on that line I guess was a little better than I would have expected. Were there incremental cost savings you're finding in that line or perhaps it was the mix shift benefit that you're seeing? Any color you could provide there would be helpful.

Yeah. We're definitely seeing some mix shift which is helpful as we continue to fine tune changes around that and really happy with how our menu and teams are doing on that. Also, the other thing to remember is also, lower oil prices are also lowering distribution costs and utilities and some other lines as well. So all-in-all, quite pleased with how the second half of the year is going to be shaping up. Brian M. Vaccaro - Raymond James & Associates, Inc.: Okay. Great. Great. And then just one last one on that food cost outlook. As you think about the second half of 2015, what are you currently expecting in terms of food inflation or maybe give an update on the annual food inflation outlook? And then if you could, what are you specifically assuming on the ground beef side given where we're seeing current spot prices and how are you thinking about that as we start to lap some of the quite elevated prices from the second half of 2014?

Yeah. So commodities for the full year, we're anticipating to be around 1.5% inflation on commodities. The first half was a little bit higher than that. Ground beef, in particular, year-over-year was up. So, the first quarter was up around 2.5% and the second quarter up around 1.5%. And so, right now ground beef costs are down year-over-year, and so we expect it for the year to be about mid single-digits. Brian M. Vaccaro - Raymond James & Associates, Inc.: Okay. All right. And then just one quick last one for me. Obviously, the franchise comps continue to be very strong in the outperformance of the company, but I think it was 6.5%, 6.6%, something like that in the supplemental. Can you just remind us what you think is driving that outperformance whether it be regional, whether it be specific initiatives, maybe the lag impact of some of those initiatives that you led with a couple years ago? Just sort of parse that out for us, please.

Yeah. This is Denny, Brian. I think there's two primary things. Regionality as you called out. Some of our largest franchisees are located in rebounding markets that we do not do business in, so certainly very strong economic tailwinds for them. And then in addition, some of the BTI initiatives that our franchisees have undertaken on a relatively small base are certainly helping them as well. Brian M. Vaccaro - Raymond James & Associates, Inc.: Excellent. Thank you.

And we'll go next to Robert Derrington with Wunderlich Securities.

Yeah. Thank you. Steve, can you give us some perspective on what you're learning around the new smaller Red Robin prototype? Is it performing as you expected? Average unit sales, efficiencies, et cetera? And then I've got a follow-up. Stephen E. Carley - Chief Executive Officer & Director: Sure, Bob. I think the two takeaways so far with the existing ones that we've built is we still got a little work to do from a design and a flow standpoint inside the restaurant to deliver the three different kinds of guest experiences we can deliver in the transformed full size restaurant. The good news is we're going to have that design open here in the second half of this year, the one that we think is optimized, allows us to give that guest three different experiences in a significantly smaller footprint. We are also very pleased with the financial performance of these units. They are significantly less expensive from a capital standpoint. We have the ability to both use them to minimize our financial risk in new markets and also to use them to infill where we have very mature markets. And the volumes are meeting our expectations and so the returns are very, very strong.

Is it safe to say that by the end of this calendar year, the likelihood is that you'll be ready to begin using that prototype for 2016's development? Stephen E. Carley - Chief Executive Officer & Director: I think it's safe to say that we're already using that prototype for the majority of our new unit openings right now.

If you look at the supplemental, you'll see some of the exterior pictures that we're working on on the exterior of the new Patriot place relocation.

And if you could remind us for a second, Stuart, what's the cost differential between that and the previous prototype?

It varies, but I think, on average, it's $200,000 to $300,000 price differential. Obviously, New England overall is more expensive but the differential would be about the same.

Got you. And then last question, as we look out – and I know it's early to talk about 2016. Given the comments about development and with the new prototype, is it reasonable to expect at least in line with if not slightly better than development from this year into next year?

Yeah. When you think about the average development pipeline of being 18 months probably on average, yeah, we're starting to pick that up, and so you can expect it at least probably slightly better and then really focused on making sure we've got a great pipeline for 2017 and beyond. But next year should pick up a little bit.

Okay. Terrific. Thanks, guys.

And we'll go next to Chris O'Cull with KeyBanc.

Yeah. Thanks. I just had a follow-up. Denny, could you elaborate on what functionality the Tabletop Tablets will have when they're rolled out and then maybe how you envision the functionality evolving over time?

Sure. We've focused on a few things. First, obviously bringing our Red Robin Royalty opportunity to the front of the transaction to ensure our guests is engaged with that. We'll have the ability for the guests to do the typical kind of games play, et cetera, use it also to reorder and order appetizers and drinks. And then, lastly of course, the pay-at-the table component that we spoke about which is very important to us. Over time, we think we can use it to benefit and feature some of our partners in terms of content. And we continue to focus on making sure that it works seamlessly for the team member, so that they adopt it and see it as their partner in serving the guest.

Do you ever envision able to order either an express lunch menu or more of the core menu items?

It's always possible down the road. Right now we're focused on the add-ons.

Okay. And then, it also seems like you're trying to find promotions and messaging that deliver more consistent sales year-over-year and just more consistent sales demand, I guess. Is that true? And then where is that – or maybe talk about how you plan to accomplish that I guess over the next several quarters?

Sure. Glad to do it. First and foremost, we spend considerably less on measured media than our competitors do. So, frankly, we can't afford to come and go with promotions, one-off kind of opportunities. So, we focus on continuing to build awareness of our Tavern Double which as I alluded to is still an opportunity for us. We are very focused in the restaurant on bringing our finest mix forward in terms of promoting it in restaurants and we're seeing a lot of benefit from that. But again, I don't know. Maybe I'm getting too old for roller coaster rides, but I'm kind of fond of steady growth, and we're trying to focus as much as we can on that pulsing strategy of media, moving our mix around to ensure that we're hitting the guests at the time they're making the decision about where to go, and hitting them with a compelling every day value offer, not a temporary discount. And then Red Robin Royalty is a heavy investment for us because it works so strongly as a one-to-one marketing element. Again, Red Robin Royalty, there are many others trying to come into the loyalty space. We've been at this now for almost five years. And I can tell you that the Ziosk opportunity on the table and its ability to capture new guests and techs to join that we've just put in as a functionality continues to build that program. And things like Burgers for Better Schools and other opportunities are ways that we mine that program to really make a big benefit.

Great. Thanks.

And that does conclude our question-and-answer session. At this time, I'd like to turn the call back to you Mr. Carley for any additional or closing remarks. Stephen E. Carley - Chief Executive Officer & Director: Thanks, everybody, for your time and attention this morning. And we look forward to chatting with you again at the end of Q3. Thanks and have a great day.