Good morning, ladies and gentlemen, and welcome to the Red Robin Gourmet Burgers Incorporated First Quarter 2016 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 of 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 technology, development and remodel, performance of remodeled and acquired restaurants, new technology, devices, systems, and service offerings, 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 and expectations 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 the risks, uncertainties, and other factors that could impact the company's future operating results and financial condition. The company has posted its fiscal first quarter 2016 press release and supplemental financial information related to the quarter's results on its website at www.redrobin.com in the Investors' section. I would now like to turn the call over to Mr. Steve Carley, Chief Executive Officer of Red Robin. Please go ahead, sir.

Thank you, Hannah. Good morning, everyone. With me on the call are Stuart Brown, our Chief Financial Officer, and Denny Post, our President. After we deliver our prepared remarks, we will be happy to take any questions you might have. I would like to start by saying that during the first quarter we were pleased to achieve higher year-over-year revenues and adjusted earnings per share. And we were encouraged by the sequential improvement in our performance versus Q4 of 2015. That notwithstanding we are disappointed that we did not gain more traction on same store sales and our guest count certainly did not meet our expectations. As you know many of our casual dining peers were similarly challenged by the shifting consumer landscape and intense discounting. But our goal at Red Robin continues to be to consistently outperform our peers and significantly grow our business in the long term. As recently as our call in February, we shared with you our plan for achieving this and doubling EBITDA by 2020. This long term strategic plan which we have dubbed Red Squared focuses on revenue growth, expense management and efficient capital deployment. To strengthen our top line performance, we are working on a number of operational and marketing initiatives to increase the rate of revenue growth over the coming years. One powerful example of this is our focus on improving ticket times, table management and seating efficiency. We made great progress on this with our kitchen display system and table management software which we are targeting to implement by the end of Q3. This initiative will further elevate our food quality by ensuring our great burgers are always served hot and our guests can get in and out faster reducing wait times and growing four wall revenue. Another example of our…

Thank you, Steve. While Q1 did not turn out as we expected, we did gather key learning that has already impacted our marketing plans and we did see modest sequential improvement quarter-over-quarter. Our fundamental, our menu, our culture, unique brand promise and guest loyalty remain strong. Guest research consistently bears this out. Our priority opportunities are, one, to cast a wider net to increase our guest base; two, to recapture our competitive edge on guest engagement and service time reliability; three, to reinvigorate elements of everyday value, and four, to find new and more effective ways to go to market. We have selected a new advertising agency partner who will be announced soon and we have begun working aggressively on a new playbook which will impact the second half of 2016. It is time for us to redouble our innovation pipeline and strike a new direction in our go to market plans. As to what happened in Q1, well, frankly, not content to stand back from the competitive fray coming into the New Year, we launched a limited time meal deal tactic to $15, double tavern, double fluff meal for two, that had tested very well in concept and was well received by our Red Robin royalty members. However, it failed to break through on television to a broader audience to meet our goals. It played out as a Me too offer with high misattribution to other bar and grill concepts. We were reminded that however tempting, playing in the sea of sameness does not support our very special brand. We are not going to win long term by temporarily discounting to drive traffic. We will leave that to others. Our formula for success is built on rewarding those who are most loyal, and reaching new guests with compelling everyday…

Thank you, Denny and appreciate everyone for joining us today. I would like to start by referring everyone to our earnings release and supplemental package for complete information on our results as I will only be discussing key trends and business matters in my prepared remarks. Our first quarter EBITDA increased 8.5% to $51 million adjusted to exclude the impact of the litigation contingencies, restaurant impairment costs as well as last year's benefit from changes to our gift card breakage estimates. Earnings per diluted share in the 16-week first quarter were $1.03 on a GAAP basis. After adjustments earnings per share was $1.27, an increase of 15.5% from a $1.10 in the first quarter a year ago. As you have already heard, the casual dining environment has remained challenging on two fronts. First, the consumer has pulled back spending in casual dining despite generally good news in areas like wages. Second, the competitive environment has remained highly promotional. Denny already talked about the first quarter actions we took to bridge to new initiatives that we can own and control to improve traffic. While our relative traffic performance improved 60 basis points sequentially according to Black Box, our absolute comparable restaurant traffic was negative 4.1%. We underperformed peers 90 basis points in the first quarter but this was still better than a 150 basis points in the fourth quarter of 2015. Compared to a year ago, we invested more in discounts and value promotions while at the same time had lower media rates. Average check increased 1.5%, which was mostly price resulting in comparable restaurant sales of negative 2.6% on a constant currency basis. The tactic of delivering value to our guest through deals resulted in some mixed trade down but as a means to bolster traffic in the quarter was…

Thanks, Stuart. To wrap up, while we did not meet expectations for the first quarter, we remain confident in the strength of our strategic plan. We know what we need to do to improve the business; drive the top line and return to results that consistently outperform our casual dining competitors. We are making progress and believe we are on track to reach our long-term goals for building the Red Robin brand, achieving operational excellence in growing our business. As Denny mentioned, we are designing an entirely new go to market strategy. We continue to make the necessary investments in resources and tactics to expand our base of loyal Red Robin fans and reignite the top line. And as we drill down deeper with our guests, we have also identified areas of opportunity in our operations execution and we are diligently working to address them. On that front as Denny mentioned, we are very excited to welcome Carin Stutz, an experienced and well-seasoned operator and senior leader. Last but not least, we have got great teams across the enterprise and are extremely proud for we have been recently named one of America's best employers by Forbes. This award demonstrates our commitment to our team and our dedication to making our company better every day for all of our stakeholders. As always I want to express my deepest appreciation for all of our team members for their hard work and commitment. At this point, operator, let’s open the call for questions.

[Operator Instructions] We will go first with Will Slabaugh with Stephens, Incorporated.

Yes, thanks guys. If one of you could just talk a bit more about your value platform as it stands today, the tavern platform? And then, sort of how real do you think you [address valuables] to your royalty check guests as well as your TV guests? And if we think that needs to be revamped in a way or how we might need to readdress those two different audiences in order to breakthrough a little bit more effectively? Just sort of any way you want to wrap around the whole value conversation, it will be helpful.

Well, thanks, Will for calling out value because that's clearly the way we are going to win overtime and there is resident value in our bottomless proposition. So we are redoubling our efforts to ensure that every guest gets offered the opportunity to have a more of our Great Steak Fries and some other things that will help us at the restaurant level. Secondly, with our most loyal guests, we continue to see strong responsiveness to our segmented offers and we will continue to use those. I think those have continued to be a bright spot in our guests that are more engaged there are seeing the resident value in our ongoing loyalty program. The third area is the one that’s probably been the trickiest for us without a doubt and that is creating enough news around value, everyday value, not discounting, and I was - looking back, I think the discounting is the thing that took us into the realm of meals for two, took us into high level of misattribution and engagement with our competitors. Everyday value is represented by the tavern platform. We have the opportunity for news there and you can look forward to seeing that.

Got it, thank you. And then just really quickly about your - whenever you look at the EBITDA for this quarter which came in actually above consensus and I'm assuming above internal projections as well, can you talk about what led to that guide down? Was it just top line driven or was there something else going on there as well?

No, the guide - this is Stuart, Will. No, the guide down is really, again, industry traffic so it's really revenue as well as just - the time that's going to take for us to really come out of the trough that was happening in the fourth quarter. We talked in February that it would take us a little while to get the new creative and the new media, Denny mentioned the new ad agency that we expect to announce soon. So we are working on some things that sort of bridge us through that but it's going to take a little bit longer than we thought given the competitive environment.

Got it, thank you.

Next we will go to Chris O’Cull with KeyBanc. Chris O’Cull: Thanks, good morning guys. On the last call you guys stated that selling expense would be flat year-over-year and you were not going to cut back on advertising, and it sounds like you cleared called an audible here in the first quarter. But do you expect, how should we think about advertising levels for the remaining quarters?

Hey, Chris, this is Stuart. The word I used in my script was delayed. Again, we would rather lean in to Media and Advertising with the new creative and so we have delayed some of the media spending, so we did have little bit lower TRPs in the first quarter and we still expect for the year to be spending the same percentage of sales. Chris O’Cull: Okay. And then, when I think about value in the interim here, Denny, will coupons or discounts or any kind of email distribution system you guys use, will that be used more aggressively here in the interim?

Not any kind of broad couponing or discounting. We continue again to segment offer to our Red Robin loyalty members and I envision us using that consistently throughout the year. I mean we have some opportunities coming up this year, much like four years ago when things like Olympics and other things, we need to focus on. So we will use it very strategically but there is certainly no intent to do any kind produce discounting or any of that kind of effort. Chris O’Cull: Okay, great. Thanks guys.

Next we will go to Imran Ali with Wells Fargo.

Good morning and thanks for taking my questions. Can you just talk about what commodity deflation you saw in Q1 and what your quarterly commodity inflation expectations are for the year?

Hey, Imran. So you have got the cost deflation in the first quarter was around 4%. And we talked about how the [indiscernible] can be front half loaded so for the year we have got cost deflation expectations now - deflation of around 1%. So we’ve definitely got some inflation expectations for the second half on ground B as we start to cycle over. Last year's big drop late in the summer and then the flip side of that question is really then probably on the labor side and the labor inflation that we are staying, we have a guidance that’s about 4.5% to 5%.

Got it, that’s very helpful. And just a clarification because I might have missed it earlier. What level of stock-based comp you are assuming in your updated adjusted EBITDA guidance?

Sorry, one more time.

In your adjusted EBITDA guidance, do you have a level of embedded stock-based comp that you are assuming?

Yes, the stock-based compensation is in the supplemental. There is a breakout that shows the full reconciliation.

Oh no, I was asking for your advice, 2016 guidance for EBITDA outlook?

There won't be any significant changes in the stock comp guidance year-over-year.

Okay, got it. And if I could squeeze in just one more. Can you talk about what your menu pricing plans are as you go through the year?

Yes, I mean pricing that we had in the first quarter was about 1.3%. We have actually taken - in last quarter we talked about taking pricing north of 1.5% for the year, we brought that guidance down again with lower cost, we are not going to take much price and so price for the full year will be somewhere around probably 1% to 3%.

Got it. Thanks very much.

Next we will go to Joe Buckley with Bank of America Merrill Lynch.

Hi, thank you. Quick question on the thoughts you share on casual dining segment and then the full year guidance was flat to slightly negative comps and in conjunction with your answer to that, that pricing question, talk about individuality or the game plan to get traffic counts back, you have to get that full year comp guidance.

Yes, in terms of that we have seen sequential improvement quarter-over-quarter and continue to see some progress internally. I am certainly not going to tip our hand to exactly what we have planned for the back half of the year but I am confident with the assistance of a new partner that we have an opportunity to go to market differently and we are revisiting every element of our plan so that coupled with continued product news, continued innovation and product news, which continues to support our brand very effectively. We feel like we are in good steps to reach what we set out to do.

And, Joe, there are other both marketing and operations initiatives that we have got in the pipeline and again, we don't want to go into them because there is a lot of people going to school and each other trying to figure how they can out game each other. But the guidance does assume that the traffic - the guest can’t stay negative in the back half of the year. So over the next couple of quarters, it’s like move back the outperformance, I mean in light of where the industry is we think will be negative for the year.

Okay. And then you mentioned casual dining competition. Do you think the QSR competition is having an impact on you as they have gotten so much more aggressive?

There might be some impact there. I haven't seen - I know you're seeing some growth there that's been unusual for the last two quarters. It's no doubt between retail and restaurants the guest behavior is changing, and they're staying home, they're ordering from home, they are taking food home, and that is an arena that we don't play in right now at all, or very minor basis. So again, just pointing forward, as Steve called out, piloting online ordering and to-go for us is going to be important because that's really the only growing segment in the casual dining category right now. So it points the upside for us down the road, certainly. But I'd say I don't know that QSR, we haven't seen any major shift in our day parts at all and if anything you would expect to see that in lunch, and I know some of our competitors who called that out, we simply haven't seen it.

Okay, thank you.

Next, we'll go to Peter Saleh with BTIG.

Great, thanks. I just wanted to ask about 1Q and if there were any kind of one-time items in terms of weather this year versus last year that may have impacted the comp a little bit and/or if there's any regional disparities you guys can talk about?

Peter, I think it's a possible cold weather every one-time because you have it every year, so we don't never really talk about it or use it as an excuse. I mean, and because of our 16-week first quarter, we don't have some of the holiday shifts that other people have to deal with. So if you look at sort of market by market performance, I would say that we're - our performance has been stronger in the southern market, southwest and southeast and where we've underperformed a little bit relatively is more in the northeast. So as we continue to build out our brand recognition up there and get the remodels completed. We got an opportunity to lean into some of the markets that we're underperforming in, and pretty confident that we'll [indiscernible] those trends.

And then on the - Stuart, you mentioned the delay in investment in the marketing advertising. How should we think about that for either 2Q or is there going to be more in the back end of the year or is it going to be a spread out between the next three quarters?

Well first, I'd remind you that our marketing spending compared to our competitors is very low. So it's not necessarily a market mover in that sense. I think our solid operations returning to our base and rewarding our loyal customers and then driving news will be the most important. So it was - certainly we did push some out of Q1 year-over-year, but we'll be investing that back against new campaigns and new approaches as those emerge. And so, they said you'll see that probably in the second half of the year before we'll really be able to have an impact there.

And then lastly, can you give us an update on where you stand with the alcohol mix?

Yes, we're up about 20 basis points year-over-year, so we continue to make modest progress. We're encouraged by our initiatives particularly around beers, as I mentioned. We have a multi-year partnership with the Great American Beer Festival. We brought some of those forward this year. Craft beer is where it's at in terms of growth, and we're continuing to move forward to improve our offerings there, increase our top lines and do other things that will support our burgers and brews promise.

Great, thank you very much.

Next, we'll go to Brian Vaccaro with Raymond James.

Thank you, and good morning. Just wanted to circle back on the first quarter comps if I could, obviously the intense competitive environment. But wanted to ask is there anything to parch from your day part trend as to where you're seeing most of the impact on your business.

Hey, Brian, this is Stuart. Actually the day part trends have not changed that much. And we've hung in there at - of essentially 50-50 lunch, dinner business. So that may tie it back to the QSR question a little bit, which some people may have reported as hurting their lunch business. We have not seen that.

Okay, that's helpful. And also, I'm curious, are you seeing the material difference in performance of units that are located near malls, for the traditional malls?

It's interesting you asked that. Yes, it's historically sort of bounced around a little bit of mall versus non-mall performance. We saw that widen in the, I would say mall, which would include pad sites near malls, underperformed non-mall locations, a little bit more in the first quarter. So it's not enough of a data point to say this is a real trend. But it is something we're watching and something that I think would be consistent with what you saw from a lot of the apparel retailers who didn't see traffic. So it could be the mall locations, they just got less foot traffic in the first quarter. Is that because people are shopping more online or is the weather, or other things, are those that keep drawing people into Red Robin.

Yes, okay, all right. And just one more if I could. Back to the advertising, can you help us with the magnitude - currently, [indiscernible] the TRPs on TV where there in the first quarter?

It was about 15%, 17% lower TRPs in the first quarter. Again, Denny always likes to remind to us that we don't have many TRPs to begin with but it was 17% lower.

That’s the market [indiscernible] sorry, I have to keep in my head. It’s played out as [fewer weeks on air].

Okay. And I guess just to make sure we're on the same page on sort of the next few quarters, last year in the second quarter your ad spend or your selling cost as a percent of sales were by far the highest in the second quarter. It sounds like we should expect second quarter to be down year-on-year pretty meaningfully as you delay and you work towards launching the new creative with your new ad agency and that the back half of the year would be up year-on-year. Did I hear that correctly?

Well, I would say we did buy in the upfront, so we're committed quarter-by-quarter. So actually you won't see a material difference quarter-over-quarter. It's more how we're timing it and how we're sliding it, and with that I'm not going to say anymore.

Yes, and the other thing, so, yes, the year-over-year is just to remember too, Brian, is on actually the pre-opening cost. We're getting much better at getting restaurants opened earlier in the year. So you'll see an increase in the pre-opening cost in the second quarter from a year ago.

Okay, very helpful. Thank you.

Next, we'll go to Steve Anderson with Maxim Group.

This is a question on revised EBITDA guidance. Does that reduced guidance take into account the $4.7 million in charges that you took for the litigation as well as for the write-down of the asset impairment charges?

Right, if it’s adjusted EBITDA guidance, it would take those - so it excludes those or it adjusts for those.

Okay. And just going back to what you saw with the reduced healthcare claims in the first quarter of 2015, what effect is this in terms of basis points?

It was about 60 basis points year-over-year change because we had such a favorable number last year.

Okay, thank you.

[Operator Instructions] And we'll take our next question from Will Slabaugh with Stephens Incorporated.

Thanks, guys. I just want to circle back to what occurred in the sales front. Can you help us out a little bit more with what you saw as the quarter went along? Did you see anything in the monthly trends that gave you confidence as the quarter passed or is it safe to assume that you saw a similar pattern of sort of the March slowdown that everyone else talked about and then April softened as the industry numbers are reflected?

I would say that our relative performance generally improved as we moved through the quarter. But it was volatile. I mean I think overall when you look at the industry trends and our absolute performance, it was pretty volatile as we moved through the quarter. And my personal conclusion is as the consumer continues to remain skidish and very careful about how they're spending their money and whether it's going more towards rent or healthcare costs or saving, whatever it is, you're continuing to see them focus on value, which means we got to be given - continue to give a great experience on the operating front, make sure we've got Ramen Burger and really great products that resonate with them coming in.

Yes, and I just want to reinforce what Stuart is saying on the operating front. That is so much a part of the value, it's not just the price you pay. And we have traditionally and continued to want to reinforce that we provide a unique experience for families and kids, now for adults in the bar, and with Carin on board, we're really looking forward to reinvigorating our work to make sure that we stay a unique dining experience for those guests.

Thank you.

And that concludes today's question-and-answer session. Mr. Carley, I would like to turn the conference back over to you for any additional or closing remarks.