BJ's Restaurants Inc (BJRI) 2010 Q1 法說會逐字稿

Good afternoon, ladies and gentlemen. Thank you for standing by. Welcome to the BJ's Restaurants, Incorporated first quarter 2010 results conference call. During today's presentation, all parties will be in a listen-only mode. Following the presentation, the conference will be open for questions. (Operator Instructions) This conference is being recorded today, the 22 of April, 2010. I would now like to turn the conference over to our host, Jerry Deitchle, Chairman and CEO. Please go ahead, sir.

Thanks, Operator. Hello everybody. I'm Jerry Deitchle with BJ's Restaurants, and welcome to our first quarter 2010 investor conference call, which we are also broadcasting live over the Internet. After the market closed today, we released our financial results for our first quarter of fiscal 2010, that ended on March 30, 2010. You can view the full text of our earnings release on our website at www.bjsrestaurants.com.

Joining me on the call today is Greg Levin, our Executive VP and Chief Financial Officer; Greg Lynds, our Executive VP and Chief Development Officer; and Diane Scott, our Director of Corporate Relations. We'll get started on the call right after Diane provides our standard cautionary disclosure with respect to forward-looking statements. Diane, go ahead, please.

Our comments on the conference call today will contain forward-looking statements, within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements involve known and unknown risks, uncertainties, and other factors that may cause the actual results, performance, or achievements of the Company to be materially different from any future results, performance, or achievements expressed or implied by forward-looking statements.

Our forward-looking statements speak only as of today's date, April 22, 2010. We undertake no obligation to publicly update or revise any forward-looking statements, or to make any other forward-looking statements whether as a result of new information, future events, or otherwise, unless required to do so by the securities laws. Investors are referred to the full discussion of risks and uncertainties associated with forward-looking statements contained in the Company's filings with the Securities and Exchange Commission. Investors are cautioned that forward-looking statements are not guarantees of future performance, and that undue reliance should not be placed on such statements.

Thanks, Diane. As we noted in our press release today, our leadership team was very pleased to report double-digit percentage increases in both sales and earnings for the first quarter of 2010, compared with the same quarter last year. Equally as important, BJ's also achieved a 19% increase in our share of the casual dining market during the quarter. Later in our call today, Greg Levin, our CFO, will comment in more detail about our financial performance for the first quarter. But there are a few financial metrics that I'd like to specifically comment on before Greg gets to his review.

Let's start off with a few comments about our top-line results for the quarter. BJ's achieved positive comparisons on all three key top-line metrics during the first quarter, and we believe that's a very strong hat trick achievement for any competitor in the casual dining segment as of late. Compared to the same quarter last year, our average weekly sales increased about 6%, our comparable restaurant sales increased 4.4%, and our estimated comparable restaurant guest traffic increased approximately 3%. With respect to guest traffic, that's the first increase in comparable restaurant guest traffic that we've reported here at BJ's since the third quarter of 2007. So when you combine our hat trick metrics with our 12% increase in total restaurant operating [weeks] for the quarter, they collectively produce that 19% increase in total sales and total market share gain for BJ's in the quarter.

So by all measures, our top-line performance was very strong during the first quarter. Our analysis of the underlying factors for our strong top-line results suggest that it was a combination of both macro and BJ's-specific factors, but more of the latter. The first, the sales from our newer restaurants, not yet in our comparable sales base, continue to well exceed our expectations in the aggregate.

In particular, sales for our most recent five restaurant openings in our home-court state of California have been very strong -- Downey, California, Concord, Carlsbad, San Rafael, and Culver City. Collectively, these five newer restaurants had average sales in excess of $140,000 per week during the first quarter. Additionally, sales for our two most recent Texas openings, both in the Dallas-Fort Worth market, also averaged in excess of $130,000 per week during the quarter. Now, all of these new restaurants were opened in mature, densely populated trade areas, with fairly stable levels of retail sales, and that's our principal development strategy going forward. And so these results continue to give a [sign] of confidence as to the competitive power of the BJ's Restaurant concept and the ability to continue to gain market share as we continue to execute our national expansion plan in a careful and controlled manner.

Next, in our comparable sales base of 78 restaurants during the first quarter, we experienced sales increases across the board in nearly every geographical trade area that we operate. We think that's due to four primary factors. First, we sense that macro conditions affecting consumer discretionary spending in many of our markets have begun to slightly improve. I think that's also evidenced by recent retail sales reports that we've all seen. But here at BJ's, we're not ready to declare an end to the pressure on the consumer just yet, particularly given the continuing weakness of the job market in general, and the tough economic conditions, particularly in California, where we have over half of our restaurants at present.

Now, the other three factors that drove our favorable sales are BJ's-specific factors. First, our new Small Bites & Snacks menu offering, priced between $2.95 and $3.95, have been initially quite well-received by our guests to date. We've seen an incremental lift in the average guest check, and average gross profit per guest since this introduction, coupled with an increase in appetizer incident rates.

This new menu category is also very strategically important to us, because it really solidifies the lower-price value side of our menu, and thus provides us with an opportunity to work on the higher-price value side of our menu during the next several months, which really needs our attention. We also rolled out a new Kids Menu, and additional lunch specials during the quarter which have also been well-received by our guests. In fact, our kids meal incidence rate is up double-digit compared to last year.

Secondly, in light of all of our menu enhancements, we made a decision to push harder to fill all authorized restaurant management positions in our restaurants, particularly in our kitchens. We're now running close to 100% management staffing, compared to about 97% at this time last year. Full management staffing levels typically facilitate faster cooking service times and better quality execution in our concept.

We also made a decision to strategically add some additional service hours to our dining room operations during the quarter to facilitate faster service, but we don't want to rush our guests. We believe that all of these investments collectively helped us to run our restaurants a little quicker, particularly at peak meal periods.

Thirdly, that as the economy continues to recover over time, all casual dining restaurants will likely not benefit equally from a stronger consumer. We think that consumers will first increase their visits to their most favorite restaurants, and particularly those that took really good care of them during the tough times. On the other hand, those restaurants that reacted to the pressures of the down economy by cutting back on their restaurant management team, by deferring R&M spending on their facilities, by excessively discounting their menu offerings, by deferring new menu introductions, by reducing certain employee benefits, by eliminating some of the amenities that they offered their guests, you know, those restaurants might have hurt their brand equities and reputations a little, particularly with their more loyal requests.

Here at BJ's, we took none of those actions. Instead, we made a decision to stay focused on our longer-term growth opportunity, and we kept prudently investing in the very core of our business, now by further improving the quality and differentiation of the BJ's concept. Now we believe that our recent top-line results confirm that we made a hell of a good decision.

So going forward, we remain confident that BJ's will continue to emerge from the current tough economy as an even stronger restaurant brand, concept company, and, more importantly, market share taker. Before we leave the topic of our top-line results, we should note that our comparable sales trends for the first three weeks of fiscal April continue to be in the plus-4% range, and we're also continuing to see positive guest traffic comparisons.

Now having said that, we always caution that our comparable sales results for any partial period of time may not necessarily represent what our results might be for a full period of time. Our daily and weekly comparable sales comparisons continue to be choppy during the current economy, and therefore aren't of much value in helping us to accurately predict the future. And for those of you that are in the business of forecasting sales, we always suggest that you keep your sales estimates on the conservative side.

Now I'm going to shift gears and briefly comment on our bottom-line performance for the first quarter. While we did report a double-digit increase in our net income for the quarter, there were a number of factors both within and outside of our control that absorbed some of the benefits from our favorable top-line performance during the quarter. Greg is going to cover these in more detail in his comments later today, but I want to take a minute and mention a few.

At first, as we mentioned on our last conference call and as we mentioned in our press release today, we scheduled one additional menu update this year, that being the Small Bites & Snacks, kids, and lunch specials rollout that we just experienced here in late February. We estimate that the total direct and indirect cost of that extra menu update, including foods, training, supplies, marketing, start-up inefficiencies, was about two cents a share, but it was an investment definitely worth making -- worth making. Some better news going forward, our next menu update, scheduled for late May, will be less complicated and less costly than this last update and will also cost less than our May menu update last year.

Secondly, we experienced higher payroll and unemployment insurance taxes during the quarter of about $400,000, or about a penny a share, which we did not entirely expect. Third, as we did expect, we experienced an unfavorable timing variance related to restaurant management recruitment and training expenses of about $400,000, or another penny per share during the quarter. This timing variance should marginally be offset as we move throughout the rest of the year.

Finally, we experienced a higher than expected level of legal and related expenses of about $300,000, or almost another penny a share during the quarter. Now all of those factors add up to a lot of bucks for a small company of a relatively small size, but nevertheless, we were able to overcome them and still achieve a double-digit increase in our net income, quarter over quarter.

The number-one operating principle of every consumer chain store company that I've worked with during the past 35 years is, as long as you've got the sales, you will have the opportunity to steadily improve your productivity and efficiency over time. And BJ's definitely has the sales. Without the sales, your only operating option is to try to save your rate of success, and that's a short-term operating option. And your best option is to grow your way to success in a profitable and efficient manner, and we believe that BJ's is just one of a handful of publicly held casual dining companies that has continuing strong potential to do just that.

With a restaurant concept like BJ's that continues to steadily increase its fan base, we also have the opportunity to continue to be successful in profitably growing our share of the estimated $80 billion casual dining market over time. And we also continue to believe that our recent performance confirms that BJ's is on the optimal strategic path by competing as a higher quality, more differentiated and contemporary casual dining concept that has broad approachability and great value for the consumer.

We continue to believe that the battle for market share is going to be a much more significant factor for casual dining companies going forward than it has been historically, primarily because casual dining just doesn't have as strong of a macro tailwind that it once had. We think that the ultimate market share takers in casual dining are going to be those concepts that either excel as low-cost providers of dining convenience, or those that excel as higher quality differentiators that provide a better overall dining experience at a solid value for the consumer. BJ's has chosen to compete as a higher quality differentiator with great value.

By definition, that's going to require continuous investment in the very core of our business and the quality of our food, our beverages, our facilities, and most importantly, the quality of the talent and the engagement level of all of our team members. When we developed our internal business and operational plan for this year, we thought that it was very important that we carefully balanced our managerial time and capital resource allocations between new restaurant expansion, which is usually the most fun and exciting part of building a restaurant business, and the need to reinvest in our established restaurants, which are the very core of our business. So, invest in the core and build market share is the key theme for BJ's during 2010.

To that end, all of our 2010 key sales building and productivity initiatives that we outlined on our last call are well underway as of this date. We have several of them scheduled for implementation during the remainder of this year. Here are a few updates on a few of them. With respect to our CapEx-driven productivity initiatives, we should complete about half of our 20 expanded guest beer tap retrofits and about half of our 25 deuce seating conversions before the end of the second quarter. We only had a few of each completed in the first quarter, so all of that potential sales upside is yet to come.

Likewise, we're completing the final testing of our automated inventory prep system and our real-time shift management scoreboard with rollouts to commence during the second half of this year. We have just completed an enhancement to our web-based labor scheduling system that enables us to schedule hourly team members in five-minute increments instead of 15-minute increments. This has the potential to free up a small number of effective labor hours that we can either more productively redeploy or eliminate.

Moving to our restaurant expansion program, our execution is solidly underway to open as many as 10 to 11 new BJ's during 2010. We believe BJ's is one of just a few publicly held casual dining restaurant companies to have achieved double-digit capacity growth last year and that also plans to achieve double-digit capacity growth during 2010 and 2011. Now I'm going to turn the call over to Greg Lynds, our Chief Development Officer, for his update on our new restaurant development pipeline. Greg, go ahead.

Thank you, Jerry. As noted earlier today in our call, our 2010 and 2011 new restaurant development pipeline remains in excellent shape and we continue to be very pleased with the overall quality of the new sites that we are seeing. Our new restaurant development strategy continues to focus on acquiring triple-A quality locations in mature, densely populated trade areas with premier co-tenants whose plans and operations are consistent with the BJ's brand and operation.

We've worked hard over the past five years to better position BJ's as a higher quality, more differentiated, casual-plus dining concept, and our new restaurant designs and site selection strategy continue to strengthen this positioning. A development plan for this year calls for all of our new restaurants to be built within our current 13-state footprint, which will allow us to continue leveraging our brand position and consumer awareness with supply chain infrastructure.

So far in 2010, we have opened two successful restaurants. On February 22, we opened in Fort Worth, Texas, at the main entry of the Alliance Town Center regional shopping center. And on March 29, we opened in northern San Diego County, as part of the newest addition to the million-square-foot North County Fair regional mall. All of our remaining 2010 openings have been identified and secured with signed leases or letters of intent. Six of these restaurants are currently under construction. We plan to start construction on two to three more restaurants within the next 60 to 90 days.

As of this date, the company currently expects to open as many as 10 to 11 restaurants during the full year of 2010. As we discussed before, it's difficult to precisely estimate the actual timing of our 2010 openings, due to many factors outside of our control. So with that in mind, we plan to open as many as two restaurants during the second quarter, as many as four restaurants during the third quarter, and as many as two to three restaurants during the fourth quarter. Again, our quarterly opening schedule can fluctuate, and we'll keep you advised of future changes.

Looking forward into 2011 and 2012, our current growth goal is to achieve double-digit capacity increases each of those years, as measured by total restaurant offering [waits]. For 2010, we have set a goal to increase our total operating weeks by 13%. And as of this date, we remain confident that we can achieve that goal. We have not yet set a specific operating week growth target for 2011, but will be able to provide more insight on that target during the next quarter or so with our 2011 development pipeline firms up.

Geographically, our development plan for the next two to three years still calls for about 1/3 of our new restaurants to be built in California, which is our home court, which is also where we have most of our highest volume restaurants. Another third are planned to be built in western states outside of California, and another third are planned to be built in our current midwest and Florida markets. Approximately a few new markets that are contiguous to our existing operations. With solid new restaurant growth over the last few years, we now have a stronger base of restaurants from coast to coast, and we are well-positioned to continue building and leveraging the BJ's brand nationally. We continue to believe that we have room to open at least 300 BJ's restaurants in various site types and sizes across the country over time.

Lastly, and as indicated on our last call, our development team views the current slowdown in retail and restaurant development as a time to capitalize on securing high-quality prime sites in densely populated, more mature trade areas with proven levels of retail sales. Our team will remain disciplined in approach on site selection and lease economics, so that our new restaurants will be well-positioned to take market share in each new trade area. Our team's looking forward to the next several years, and are confident that BJ's should have many years of high quality, solid new restaurant growth to come. Jerry, back to you.

Okay, thanks, Greg. We continue to believe that BJ's economics are sound, and they clearly support a continued, steady pace of new restaurant expansion. And we're always going to pick equal over quantity when it comes to our new restaurant -- quality over quantity when it comes to our new restaurant location. We'll turn it over to Greg Levin, our CFO, for his comments. Go ahead.

Thanks, Jerry. I'm going to take a couple of minutes and go through the highlights of the first quarter and go back and forth with commentary for the rest of 2007. All commentary is subject to the risks and uncertainties regarding forward-looking statements that are included in our SEC filings. Additionally, my commentary may also refer to certain non-GAAP financial measures that we use in our internal review of the business and that we believe will help provide insight into our ongoing operations. As Jerry previously noted, our total revenues for BJ's first quarter increased approximately 19% to approximately $121.7 million from $102.4 million in the prior year's comparable quarter. This increase is the result of approximately 12% more operating weeks and an approximate 6% increase in our weekly sales average. As Jerry mentioned, our aggregate comparable restaurant sales increased for the first quarter was 4.4%. While we do not give out monthly comparable restaurant sales or we don'ts give them out each period, I'd like to note that January, February, and March were all positive, with March being our strongest period.

We believe some of the strength in the March period was due to the Easter holiday and related Spring Break vacations as compared to the prior year which also seems to be consistency based on the public information regarding retail and restaurant sales to date. With regards to comparable restaurant sales for the quarter as Jerry mentioned, we saw strong sales gains in virtually all geographic areas during the quarter, and also in all year classes of restaurants. For example, the Arizona market was up over 8% in the quarter, and the Florida market was up in the low double digits for the quarter. Additionally, Texas continues to be a solid market for us with comparable restaurant sales up almost 8% for the quarter, as well. And for those of you wondering, the class of 2007 which pressured comparable restaurant sales in 2009, had comparable restaurant sales increases in aggregate of approximately 7% in this first quarter. Our 6% increase in our weekly sales average during the first quarter is really the result of the continued strength and honeymoon from our current recent openings of new restaurants. Please remember that as the last seven openings, five have been in California where we expect our weekly sales average to be greater than our company average. As such right now we have a favorable geographic mix of new restaurants that will abate as we continue to open new restaurants outside of California this year. Therefore, I would caution investors not to reads too much into the initial sales -- to read too much into the initial sales volumes of new restaurants while they're still in the grand opening honeymoon period, as well as changes in our weekly sales averages as compared to our weekly sales. During the quarter the pricing menu factor was 1.4%. And we anticipate introducing our regular Spring menu in early June and, therefore, we anticipate menu pricing in the second quarter to be around 2% or so.

However, we have not yet finalized our Spring menu update and, therefore, as the pricing pact provided may change base odds numerous factors including the commodities market and/or changes in consumers' discretionary behavior. With regards to the P&L, our cost of sales was 24.7%, of sales which is pretty much in line with last year's cost of sales of 24.8%, and down about 30 basis points from a trailing two -- from the trailing two quarters. In general we continue to see benign commodity cost increases. We are anticipating about a 1% increase in the market commodities this year, and that was predicated on a 30% increase on cheese prices. However, in the first quarter, our average cheese prices increased only about a few percent or so, as compared to last year, which is more than offset by savings we've had with some of our other contracts for this year. As a result, our commodities were down slightly in the first quarter as compared to last year. Our labor and benefits during the first quarter was 35.7%, which was 30 basis points higher than last year's first quarter.

As Jerry noted and we stated in our January, 2010, conference call, in the first quarter we introduced our new menu that resulted in 30 basis points in training and learning curve related labor as compared to last year's first quarter. Additionally we continue to work through our other learning curve inefficiencies related to labor changes to our service standards which we believe improve our overall guest dining experience at BJ's and is one of the reasons we were able to process the additional guest counts that we were offered during the first quarter. Additionally, in regards to labor, a percentage of sales analysis, we did get leverage in restaurant management labor. However, in a dollar per operating week, our restaurant management labor was up due to higher stacking levels as Jerry had mentioned last year, as well as higher effective compensation due to our sales restaurant performance.

Finally, as Jerry mentioned, we saw significant increases in payroll taxes during the first quarter, particularly in state unemployment insurance rate as many states have increased their tax rates and dollar limits to make up for deficits in their unemployment accounts. By operating, cost as a percent of sales increased 21 basis points. This increase resulted primarily from additional marketing spend, primarily related to the additional new menu enhancements rolled out in the first quarter of 2010 as compared to last year. Our G&A expenses were 7% of sales in the first quarter, which was flat with last year's first quarter. Including G&A is $778,000 of equity compensation for 2010, which is 0.6% of sales compared to 600,000 of equity compensation for 2009's first quarter which also was 0.6% of sales. Excluding equity compensation, G&A increased approximately $1.2 million.

As we mentioned in the past, G&A for us really consists of three areas -- first, there's the manager in training portion of G&A that includes the recruiting and training of new managers, plus the restaurant opening teams. Generally this area represents about 15% to 20% of our G&A and will grow each year approximately at a capacity growth rate. Second, there is the field supervision of our restaurants which is around 20% to 25% or so of our G&A, and will grow at a rate less than our capacity growth. And third, there is the infrastructure support for our restaurants which is around 60% of our G&A, and should grow significantly less than our capacity growth. Therefore, specifically in G&A, as Jerry mentioned, our manager in training program increased by 40% or approximately $400,000 compared to the prior year. This increase was primarily due to increased managers in our training program as compared to last year.

In last year's first quarter, due to the back end loading of new restaurant openings for 2009, we averaged only 13 MIT per week as compared to 44 MIT's per week during this year's first quarter second to the MIT program we saw absolute dollars increased due to legal costs and consulting costs for our mystery shopper program that we implemented in this first quarter. Our restaurant opening expenses were approximately $1.1 million during the first quarter of 2010, which includes preopening costs related to the two restaurants that opened, as well as approximately $100,000 or so related to the reopening of our Huntington Beach restaurant after its extension expansion and remodel. We did incur approximately $140,000 or so in disposal costs during the quarter, with the majority related to remodel and the legacy-Huntington beach restaurants. Our cap rate for the first quarter was approximately 27%. That was due to greater benefits in our FICA tax tip credits than anticipated. Our total gross capital expenditure in the first quarter was approximately $12.1 million. That's before any landlord liens.

Before I turn the call back to Jerry, let me comment on our liquidity position and also provide some forward-looking commentary for 2010. In regards to our liquidity, we ended the quarter with approximately $37 million of cash and investments. Our line of credit was $45 million does not expire until 2012, of which we only have $2.5 million outstanding. As we previously mentioned, we believe our cash flow from operations as well as our expected landlord allowances and our current cash and investment balances should provide us the necessary liquidity to -- provide us the necessary liquidity. All this commentary is subject to the risks and uncertainties associated with forward-looking statements, as discussed in our filings with the SEC. As Jerry mentioned, we continue to see positive comparable restaurant sales in April. However, we have seen some increased choppiness in April due to the Easter and Spring Break holiday calendar shift, as compared to the prior month. As such, it is very difficult to get a read on comparable restaurant trends until we get further away from the ups and downs related to the Easter holiday and Spring Break timeframe. Therefore, I would be cautious to not read too much into the April trends to date.

Additionally, over the last two years at BJ's, we have tended to have a fairly strong quarter one in regards to comparable restaurant sales on a relative basis, and somewhat softer quarters two and three. And while it appears that the economy is slowly mending, we still have an approximate 10% national unemployment rate and almost 13% unemployment rate in California, where 50 of our 94 restaurants are located. Therefore, we always suggest that sales estimates be kept on the conservative side. In the second quarter, we anticipate opening two new restaurants and, therefore, targeting an increase in operating weeks of approximately 13%. While over the last two quarters we have seen a nice increase in the weekly sales average, I would expect that our weekly sales averages will come more in line with our comparable restaurant sales throughout 2010 as our new California restaurants come off their honeymoon volume and we begin to open more restaurants outside of California. In regards to menu pricing for 2010, as we've said before, BJ's competitive strategy has always been focused on providing a higher quality, more contemporary, casual-plus dining experience at about the same average guest check as many of our mass market competitors. Accordingly, to the extent as food commodities continue to be lower than expected we will be able to better protect our value concept positioning with consumers and thereby keep our expected menu price increases as small as we can. Base odds what we know and expect as of today we can keep our 2010 price increases, and this excludes any carryover pricing in the 1.5% to 2.5% range and protect a profit margin, everything else being equal. Based on the information available and our expectations as of today, we are not anticipating the cost of our commodity basket to significantly increase in the second quarter or the remainder of the year.

However, this is predicated on chief prices staying where they are and no significant changes in produce price, as well. Cheese represents about 8% of our commodities and is currently not under contract. Last year at this time we had about 1/3 of our cheese under contract, at a price higher than today's spot market price. Additionally, while we do have contracts for the majority of our produce spend, which in total is around 14% of our total food cost, these contract are agreements for which we have and therefore can be exposed to some minimal movement in the cost of produce. In total, approximately 85%-plus of our commodities are in contracts of six months or longer. Therefore, we anticipate cost of sales to remain in the upper 24% range or 25% range for the full year of 2010 with some variations by individual quarter due to seasonality and the timing of new restaurant openings. In regards to labor, I do expect that as we move away from the first quarter, we should see our normal reduction in payroll taxes as we will hit the state cap. Additionally we should continue to gain efficiencies related to our new labor service guidelines and our new menu and, therefore, we should be able to reduce our labor as a percent of sales from the current 35.7% rate to the low 35% range. I continue to anticipate that our operating and occupancy costs will be in the low 21% of sales range for the rest of 2010. I would anticipate our G&A to be somewhat in line with our first-quarter run rate of approximately $7.5 million to $7.7 million excluding equities compensation. As I've mentioned we currently expect restaurant opening costs to be about $500,000 per restaurants.

However, we will incur preopening noncash as much as five or six months before a restaurants opens and, therefore, restaurant openings before any quarter may not be indicative of any restaurants that open before that quarter. Base odds current openings schedule, I would anticipate preopening schedules of around $1.3 million. We currently expect our income tax rate for 2010 to be in the 28% range, down from last year, and that's, again, due to the higher expected FICA tax tip credit. We expect our diluted shares outstanding for 2010 will likely be in the $27.5 million to $28 million range. We continue to target growth capital expenditures to be around $60 million, and that's before any landlord contributions for fiscal 2010. At the current time, we expect to collect approximately $6 million in landlord allowances, and that's going to reduce our net capital expenditures to around $54 million. Our capital expenditure plan for 2010 takes into consideration CapEx for as many as 10 or 11 new restaurants, as well as the sales building and productivity initiatives and maintenance and remodel CapEx. All of our net $54 million of planned CapEx for 2010 should be able to be entirely financed by expected cash flow from our existing operations during the year. Jerry, back to you.

Thanks, Greg. As usual, a very thorough review. So we're going wrap up our prepared comments and get to questions here in just a second. And again, just to conclude, we were very pleased with our solid results for the first quarter of 2010. We're continuing our forward momentum so far in the second quarter of 2010. We're looking forward to executing our 2010 restaurant expansion plan and all of the key initiatives that we've got on the docket for the full year. In our view, BJ's ability to continue to take additional market share in the casual dining segment is steadily strengthening as time goes on. We believe that the best years of growth are still well ahead of us at BJ's, and I don't think you can say that about many publicly held casual dining concepts and companies today. So that concludes our formal remarks. And now we'll open up the call for questions. Operator, go ahead.

Thank you, sir.

(Operator Instructions)

And our first question comes from the line of Nicole Miller with Piper Jaffray. Please go ahead.

Good afternoon. If you did say it, I missed it, but the price within the comp, what was the price? And then there's been a lot of conversation with your peers around price, I see it sneaking back in. So how much pricing power do you feel you have, and how quick would you be willing to turn it on if commodities do in fact, inflate?

Nicole, this is Greg. In regards to pricing for the first quarter, it's 1.4%. As we just rolled out this last menu, we took very minimal price, I think less than half a percent or right in there in that regard. In regards to pricing going forward, I'm going to let Jerry kind of talk about that.

Yes, thanks, Greg. Hello, Nicole. I think our pricing strategy going forward will be more reactive to input cost pressures. We always take those into consideration. However, if the consumer is feeling is a little bit better, there may be some opportunities in certain parts of our menu, where we have more signature products or specialized offerings to perhaps be a slightly little more aggressive on some of our thinking with respect to pricing going forward throughout the rest of the year. Our next menu change will happen here toward the end of May. We'll be making those pricing decisions shortly. I think Greg mentioned in his commentary, in his comments that we're probably going to shoot for somewhere around the 2% to maybe a 2.5% incremental price to be added on to whatever price is carrying over from last year.

That should put us somewhere around 3%, 3.5% if my back of the envelope calculations are correct. I do think, however, at the BJ's restaurant concept, I think we've probably had more inherent pricing power than most of our mass market casual dining competitors in the varied menu space. And I think what we clearly want to do, is to take advantage of that if the market is going to allow us to do that. But having said that, we don't want to get carried away. We want to be very, very careful about maintaining our relative price point versus that of our mass market competitors. But I do think there's probably going to be a little better opportunity to get a little more aggressive. But I think we're going to have to be very, very careful about taking advantage of it.

And a second and last question. I've seen some of your peers going to the grocery aisle with -- primarily with frozen product. Is that anything you would consider doing, and what do you see as the benefit or the pitfalls?

The answer is yes, Nicole. In fact, this year, our supply chain has one of their key initiatives to work a couple of those opportunities. And as we make additional progress, we're going to be able to be talking about it here probably toward the end of the year. We do see an opportunity to leverage the BJ's brands and retail distribution channels, not only in the signature food side but also, perhaps, in the beverage side not only with our hand-crafted beer but also with our hand-crafted rootbeer. So we're pursuing three different avenues with some potential partners in that respect. And we should have more to report on by the end of this year. But we do think it's an opportunity as a brand extension for BJ's.

Thank you.

You're welcome.

Thank you. And our next question comes from the line of Matt DiFrisco with Oppenheimer Funds. Please go ahead.

Thanks. Actually, Greg, I'm sorry -- I loved how you gave all that detail. But I'm going to ask for some more. I tried to write down as fast as I could. With the G&A, it sounded like some of the stuff in Jerry's comments were legal, and then also the -- the management training program. It didn't seem like all of that would continue throughout the rest of the year. But then you mentioned in G&A that it looks like in the noncomp-based, nonequity-based comp side would stay consistent with what you saw in 1Q. I just wanted to reconcile how-- are you expecting the legal fee to stay around $300,000 to $400,000. And you're expecting to have an impact from the management -- from the MIT program?

Yes. A couple things. I believe that MIT program will stay where it is in regards to absolute dollars. It was a timing issue year-over-year, last year where we only had 13 MITs. and it started to creep up toward the end of the year. This year while it's maybe getting more front end loaded, as we start to think about 2011's development, we'll increase MITs or keep them consistent with our growth rate. That cost from a comparison standpoint is a timing difference, but the cost will be in G&A throughout this year. In regards to the number, there was about $200,000 or so of additional payroll taxes that will kind of come out of that number. So start thinking about that 7.7, that's where it can drop down a little bit. Legal, to some degree it's anybody's guess. I mean, I hates to use -- I hate to use that as an answer, but in California, it's a difficult regulatory environment. We'd like to put some of these things behind us, and I think we will this year. But to get it behind us, it will take a little more legal cost to get them resolved.

Okay. So to understand then in the tax conversation, you also had an impact -- you had a little more, you were surprised in the labor line as far as payroll. Then there's also some on the G&A side that you came to encounter?

That's correct. So on both sides of our P&L, in the labor we incurred I think Jerry said $400,000 in total for payroll taxes. And it was encountered in both areas. 200 more or less up at the restaurant level, and 200 or so at the G&A level.

Okay. That's helpful. Then I guess just to understand the portion that is payroll related. I mean, I guess you're making -- that's almost a direct offset with your lower tax right, correct?

Lower tax as in income tax right?

Exactly. Because you're having the FICA tip tax, and that's a large portion of that is showing up in the labor line today, where it didn't last year?

That's absolutely true, because what ends up happening is we have more restaurants in California. California is already at the minimum wage. Therefore, all those tips technically that are collected at the restaurant level, you get the entire benefit for your FICA tax tip credit.

Because you don't have a tip credit in California.

You pay higher at the labor line in California, but you make it up on the tax rate. That's correct.

It's important to understand that it's not as though you're just benefiting from a lower tax rate. You're getting it from both sides, so it's a zero sum game.

That's correct.

On the weekly sales trend, it actually popped up for a couple of quarters, you're outpacing your same-store sales pace -- which is always attractive, and I know you don't want us to get too excited as it's opening in California, and it's good to see good volumes off of new stores. But given the forecast of staying in a third, a third, a third, is how you broke that out, all still being markets where you are existing, California, Texas, and Florida and the midwest, should we assume then that the gap or pace of average weekly sales should stay ahead of the same store sales, given the projection of rolling out into those markets and the storage outside the comp base, presumably modeled to stay above the comp?

I think that's a reasonable assumption, but it will abate over time. So, I think Q1 is still a very strong number, as we just saw. But in Q2 opening two more restaurants outside of California, so that will bring that down a little bit. And as you get into the fourth quarter, it's probably going to be flat if not negative, because you're going to be going over those large honeymoons for new restaurants. Well, we feel really good about the restaurant pipelines. I mean, it's a solid pipeline, as strong as last year's. But being the fact that there right now, looks to be two to three in California, I think you just have to take that conservative approach, and note that the weekly sales average over time will come more in line with comparable sales levels.

I appreciate your conservativeness. Okay. And then, looking at the last thing. You made a reference to something that I look at also as the operating week, labor per operating week. And you brought it into terms of it was basically dead on, or offset a little bit of -- little bit of it grew faster than sales. So it looks as though from your guidance, you are also modeling labor to continue to be around almost 6% to 7% per operating week it would appear. If you're going to stay in that -- and deleverage throughout the rest of the year. Is that correct?

I think last year, we ran in the upper 34s in some of the labor numbers, and I think I mentioned kind of in general that it would probably be in the 35s. If you look at the difference between the two, that would be possibly some deleveraging there. I would hope that as we continue to grow sales, and get efficient with our new menu and everything, that we can get back the last year's numbers, if not even better from that perspective. I think right now again, you want to take a conservative side or a conservative approach to it.

Okay. Actually, I -- I promised it was the last question, but I do have one more. The comment that you made -- I think, Jerry, you said that you didn't get the benefit from some of those sales initiatives that we talked about in the last couple of calls, and you expect they came at then of the quarter. So, should I also read into that, then the investment came in in the first quarter when you look at other restaurant expenses, such as the tables and such as the TAP program, was that weightier in that it was an expense without offsetting sales? So in a relative expense, was that line item skewed down because of that?

No, I don't think so. What I -- what I was attempting to say is that we really didn't make as much progress during the first quarter on those CapEx related sales building initiatives. We only had a couple of each completed by the end of the first quarter. But we're going to catch up in a big way during the second quarter. There's really very little expense associated with the rollouts of those CapEx initiatives. It's frankly all sales of productivity driven initiatives.

There is the CapEx outlay, of course, but in terms of any startup training or other related expenses, there's very little, if any, associated with those initiatives. So what I was trying to say is that most of that productivity enhancing CapEx has yet to be deployed, but you'll see it deployed more heavily in the second quarter.

Matt, real quick on the labor numbers coming back to that, as well -- I forgot, Jerry had mentioned it. One of the other reasons to think about labor probably getting deleveraging this year versus last year, is the fact that we're running our management bars, at a higher level this year as of right now than where we were last year. And that's in my assumption of things going through the year.

Got it. Okay. That's good to know. Thank you very much for all the answers.

You're welcome.

Thank you, and our next question comes from the line of Steve West with Stifel Nicolaus. Please go ahead.

Yes, it's Matt in for Steve. My first question, I guess revolves around the commodity basket here. You said you don't have any contracts on cheese. And last year you did. I guess where -- how quickly can you put those on, or are those available, and maybe what's your thinking regarding that if you see cheese prices start to rise with some actual demand-driven fundamentals underneath it?

Hey, Matt. With regards to cheese, we are always out there looking for the ability to take on a contract. Our supply chain guys do a great job of looking at it every day. And in fact, there are different contacts out there to see if anybody wants to bite on it. So we do have the ability to lock into a contract. We spend a lot of time looking at ways to find demand, in regard to cheese, to determine if it makes sense to lock it in or not. Currently we still think the futures market or at least the contract, it's too far above maybe the futures market to lock in at the current time. We are always taking a look in that regard because we know it's one of our areas that provides us an opportunity either way.

Okay. And then I guess based on that, is do you have any opportunities to sort of manage your costs on a more regional basis, or do you have any big fluctuations in terms of supply chain costs or sourcing costs? Do you get any leverage for having more stores in California versus more spread out in other territories?

That's a great question, and it's actually a part of our growth strategy, as we talked about a third, a third, a third. Because we want to cluster restaurants. And one of those reasons, is because of supply chain economics. However, that supply chain economics is really driven by the distribution cost side of things. And as we get more restaurants in an area, we can lower this distribution cost per se. But generally, as we're set up today, our cost basket is pretty homogeneous across the board. There could be a couple items higher here or there, but it's not significant. What tends to drive this -- the cost sales for us now is menu mix per se.

Okay. I guess kind of -- that was going to be my next question on the menu mix trends. Have you seen any big changes, whether it be higher incidents of beverage sales helping drive the comp here. Or did -- I guess the addition of small bites, did that have a big impact? I guess any color there would be good.

Yes, this is Jerry. Really we haven't seen much change in our menu mix over the past couple of years. The small bites program, as I indicated in my comments, has increased overall appetizer incidents. These are really individual appetizers priced at $2.95 to $3.95. They're an excellent add-on to an entree. If you're not otherwise purchasing one of our appetizers to share. And we do 22% of our business in alcoholic beverages. We have a very active bar. And we believe that a lot of our bar patrons which may have not purchased anything to eat in the past, are now taking advantage of our small bites and snacks offerings as an add-on to their beverages. So we have seen an increase in our appetizer incidence per 100 guests. We've seen a slight lift in our average check, and our average gross profit of per -- of per guest. So all of those indicators are favorable with respect to the small bites and snacks program. But the rest of our menu, there have been some slight moves over the past couple of years. But really nothing material.

Okay. And then, as a final question, have there been any delays, or I guess, potential removal of delays that you thought were going to happen on the development fronts, any, I guess, development areas have been slowed down or sped up?

In terms of our current 2010 pipeline, other than normal factors due to weather and so forth, we really haven't had any delays whatsoever versus our plan, in terms of the execution of our new restaurant openings for this year. I think we can say, however, that compared to the pre-recessionary period, it's -- it certainly is a little more volatile today, in terms of the landlord's ability to more specifically commit to delivering you a site at a specific time. And particularly when you don't have hardly any new retail projects being built today, it's a little more challenging to really go out and -- and source the sites to meet all of our development qualifications. But I think Greg Lynds and his team have done an excellent job in executing a well balanced and spread out pipeline for 2010. That will be our intention for 2011 as that pipeline continues to firm up. Greg, would you like to add anything to that?

I think the key change is just very little development, new development from developers, at most of the sites that we're seeing, and our peers, as well, is redevelopment or repositioning of existing restaurants in the coverage area.

Okay. All right, thank you very much.

Thank you.

Thank you. Our next question comes from the line of Larry Miller with RBC. Please go ahead.

Yes, hi, guys.

Hey, Larry.

How you guys doing?

Good.

Good. Good to see a positive call. And that's really what my question is. If you do get a 4% comp, I'm just curious on your viewpoint here, Greg. Shouldn't you be able to leverage operating profits at that point? Is that your view?

I think there's a definite opportunity for us to to. Really we had unexpected things in the first quarter, really outside of the new menu. We had a new menu that we guided to a little bit. And it actually probably cost us a little bit more, just because of the complexity of adding an entire new section per se to our menu versus just adding just a couple new items on there.

The thing that really, frankly surprised me -- it was the increase in the unemployment rate. It kind of shocked me. I sat down with my group, and we went through the rates. It was surprising that way. Some of the other things that came through. Taking those things out, there's definitely opportunities, that a 4% comp with the way the current inflationary environment is, we have an opportunity to see our margins continue to increase from where they are today. Absolutely.

I would second that comment, very intensely.

Great. And just so, I can kind of put my own glasses on, how to view the calls. Jerry, I think you said 3% to 3.5% price this summer, if that's correct. I'll make my own traffic assumption. But it doesn't -- I just want to make sure that's right.

Well, I think we're going to try to target somewhere between a 2.5% and 3% price. That's correct. But those decisions have yet to be made. But if the economy will give us that, and if we believe that we have the ability to take it in certain parts of our menu, then we're going to try to be a little more aggressive, yes.

Okay, great. And then stock compensation, is that a good rate to use, Greg? That $800,000 a quarter?

Yed. That is a good rate.

Okay. Perfect, thanks, guys.

Okay.

Thank you. Our next question comes from the line of [Jonathan Compe] with Robert W. Baird. Please go ahead.

Hi, thanks. I had all my questions answered already.

Okay, thank you.

Our next question comes from the line of Jeff Farmer with Jefferies and Company. Please go ahead.

Thanks. Hey guys, (inaudible) with Jefferies and Company. I wanted to ask about your return to positive traffic. Do you guys think you're seeing more customers or is it increased frequency from existing customers?

I don't think we have any specific data to indicate it either way. But if I were answering the question based on anecdotal data, I think you're seeing increased frequency primarily at this time.

Yes, to add on a little what Jerry said, a couple things here. One, was comparable restaurant sales in the first quarter were positive. For lack of a better term, the three big parts, day parts, lunch, dinner, and the business.

Lunch was stronger in regards to the comparable restaurant sales. When you think about the last two years, the softening of the economic environment, lunch was the area that went away as people were more concerned about their jobs. They were brown bagging it, or they didn't have a job. And I think now as people got a little more confident that they'll have a job tomorrow, they can maybe re-introduce a lunch in the middle of the week, that maybe they had to pull back in from in the past. I think that to Jerry's point -- I can tell you that it was an existing guest coming in there, or if that was a new guest.

Got it. Okay.

And I -- for the weak part, you're saying that, the comp improvement has also been widespread throughout the week? Or do you think it's more bifurcated between weekdays and weekends, Or --

Lunch and the Monday through Thursday was the stronger part than the weekends. However, I would say, in general there was not a huge difference between them. It wasn't like lunch was a positive 15, dinner was a positive 1, and it netted to 4.5. It was between 200 basis points fell between for both of them. Same thing for the weekend versus middle of the week.

Okay. Great. Thank you very much.

Thank you. Our next question comes from the line of Brad Luddington with Key Banc.. Please go ahead.

Thank you. I wanted to start off with, you know, some of your peers are indicating that they're seeing stabilization in alcohol sales. Alcohol has already been strong for you. But the indication's being maybe customers are buying the second beer, second glass of wine instead of just stopping at one. Are you guys seeing a similar type of strength in the bar sales?

Year-over-year, whether we look at our incident rates for 1 -- when we look at our incident rates for 100 guests we have seen an increased incident for beer year over year. And I think our overall alcoholic beverage mix as a percentage of sales is perhaps up slightly. So I think we are beginning to see a little greater incidence in alcoholic beverage sales, yes.

Okay. And then I just wanted to clarify something. I think you said that we should expect the higher legal cost really every single quarter this year than we saw in the first quarter.

Yes. I think the way on the legal cost is -- I really don't have any answer for you in that regards. Our goal is to get some of these -- these legal claims behind us. And as it gets to the point of getting behind us, we tend to spend more legal costs. It's just the time that the attorneys are working to move it forward. I would at least plan on this in Q2, maybe it goes away in Q3 or Q4. But I think right now I would probably continue to think about it in Q2. And I guess the better way tong about it would be -- way to think about it would be the guidance rate of a $7.5 million range as a guidance number. I would probably go with that.

Okay, thank you.

You're welcome.

Thank you. Our next question comes from the line of Greg Ruedy with Stephens.

Good afternoon. I think you mentioned incremental investment during the quarter. In the service levels. Can you talk about any change in the ticket times coming out of the kitchen, or are you getting faster table times from that labor investment?

Answer is yes. I was speaking with Wayne Jones, our chief restaurant operations officer, yesterday on this very point. And based on all of the metrics that we track in our business, we believe that we have about a 3% to 5% improvement in overall execution time for the dining experience from the time that the guest enters to the time that we present the final checked out check to the guest. And I think when you take a look at our increased guest pass particularly at lunch, I think we're much better suited because of some of those service changes that we've made to process business a little more quickly without seeing any quality degradation whatsoever. And BJ's is the way we think about service, we -- we stress quality fast service. Not just quality service or not just fast service, but quality-fast service. And so we have made some investments, and I think we're getting a good return on those so far.

Follow on there, I believe there's kitchen technology out there that allows QSR's to broaden their offering and allows casual dine force maybe speed up their check times -- diners maybe to speeds up their check times. What do you see in kitchen packages, or is that something you can sidestep just through your talents?

Well, I think that BJ's during my 5 1/2 years with -- BJ's during my five and a half years with the business has been more more aggressive with the deployment of the technology within the four walls of a restaurants than just about any casual dining company that I know about. We have tested and continued to be as a very strong interest in handhelds for our servers, for both order taking as well as for checkout.

And as technology continues to improve, as, you know, some of the apples of the world and special of their competitors come up with even better technology and a smaller box that's lightweight and reliable, has a strong battery life and servers don'ts object to carrying in their -- don'ts object to carrying in their aprons and don't break when they drop them, we believe that there's a strong application for that in our business, and we believe that the vast majority of our guests would welcome that because it does speed up that part of the dining experience that is within our control.

We never want to rush a guest. But I can tell you probably one of the most frustrating things in the casual dining business from a consumer's perspective are, A, getting my order placed after I've gotten seated and, B, getting my check when I'm ready to go. So these types of handheld technologies I think can really help solve those particular issues from a server's perspective, and we continue to have an interest in them and test them, quite frankly.

All right. The -- with respect to the last menu update you had, the small bite snack plates. When we get to May, are there more additions, or are we -- are we at the right menu size, or are we a one-on, one-off point? How much bigger can the menu get?

I think overall, we'd like to maintain the size of our menu at roughly where it is today. Roughly 100 or so different menu items. The small bites and snacks category is strategically important for BJ's. And, you know, we've clearly seen some success from a few of our competitors with their versions of that particular menu category. We studied it, and I think we applied it in a very, very thoughtful way here at BJ's. And what that does, is that it really solidifies the low price value end of the BJ's menu.

And now it enables us to go and start working on the higher priced value end of our menu that frankly has been neglected -- frankly, has been neglected for some time here. And that I believe and my colleagues here believe represents a wonderful opportunity for us to perhaps offer some great center of the plate protein offerings with seafood and chicken and beef priced at the $10, $11, $12 price point, maybe a little bit higher with tremendous value for the consumer, so that we can offer those dishes to consumers if they want to purchase them, and perhaps gradually over time manage the BJ's average check to about $1, perhaps higher, than where it is today.

And by managing up from, say, $12.50 to $13.50, that will not dislocate us from most of the average checks of our mass markets and casual dining competitors and, frankly, will still keep us less of an average check than all of the Darden concepts which have done very, very well over time. Particularly, the Olive Garden concept, which currently has an average check of $15.50 to $16.

They do a wonderful job of managing their menu offerings with a low-end value offering and a higher-end offerings, and that's something that we believe can be applied here at BJ's. And so by really solidifying the small bites and snacks portion of the menu, we're going to -- start to work on some of the other higher end value items and perhaps manage that average check to be about $1 higher or so over the next year or so. That is our menu strategy.

But in order to really do that and maintain absolute value in the concept, we thought it was very, very important strategically to get the small bites and snacks menu solidly positioned. What we're going to do with that part of our menu category is about every six months or so, we'll probably rotate a few of the lower sellers off and put exciting items on. We'll keep that category at six, seven, eight at the most, to really keep excitement and new public sector news in that category at the particular low price value entry point for our concept.

Thanks for the granularity. That was great.

Okay, thank you.

Thank you. And our final question comes from the line of Paul Westrow with Cohen and company. Please go ahead.

Thanks. One or two quick ones. You ramp up your -- ramp down your development, your square footage page from under 20 to over 15. Curious looking out the next three to five years, assuming a more normalized kind of recovery scenario. When do you think your most comfortable pace is? In the business and taking advantage of the opportunity as far as -- development looking out at 2013 to 2015?

That's a great question, Paul. At this point in time given the visibility that we have and the development pipelines, our radar kind of only goes out a couple of years right now. There is nothing more than we would like to do than to gradually ramp up our operating week growth steadily every year but to actually pencil in a specific growth target at this time given the limited visibility that we have in our development pipelines, particularly until we start to see some new project development begun to be -- begin to become available for us, it's very, very difficult to peg an absolute growth goal five years out from now. We do know that there's room for at least 300 BJ's of various site types and sizes across the country. There's probably room for many more than that. I think we've tended to be conservative about that.

We very much would like to steadily ramp up our operating growth year after year after year, but a lot of it's going to be driven not by the availability of capital or by necessarily the availability of quality restaurant count which is very, very important to us, but a lot of it has to do with the absolute site availability. The other thing, too, that we've -- that we're probably self-limiting ourselves by trying to be very careful and very controlled or very disciplined in our expansion, is that for the next couple of years we're trying to really fill in our 13-state footprint today so that we can build additional leverage in our business model and our supply chain leverage, from leveraging our infrastructure, leveraging our management talent, and more importantly, building the overall awareness of the BJ's brand and things we want to fill in.

Everybody wants leverage in the business model and that's frankly how you get it. Believe me, we get calls all the time from the major retail project owners in America to come to Baltimore, to come to Philadelphia, to come to Atlanta, to come to Kansas City, to come to the northeast, to come to St. Louis, to come to Chicago, and believe me, there are many, many tremendous sites available to us today and all of those markets that we know would be well above average sales opportunities for us. So, what we're trying to do is have this very, very careful discipline to not outrun our supply chain, to be very, very careful as we continue to grow, to build some more leverage in the model, to manage the -- the exposure of our concept to excessive new market risk which as you know and as I know from all of our years of being in this business are -- or analyzing the business, it can really wobble your business if you gets too much new market risk in at any one time.

So, we're kind of self-limiting ourselves in that respect. But we would like nothing more and certainly intend to gradually ramp up in development and excellent numbers year after year after year. Where that tops out or where we target specifically over the next five years is very, very difficult to peg a specific number. But believe me, we're ready to go and there's plenty of room for many more BJ's across America. That's for sure.

Great. Thanks. I'll follow up with more offline, minor follow-ups later. Congratulations on a great quarter.

Okay. Thank you, Paul. Any more questions?

Mr. Deitchle, there are no further questions at this time. Please go ahead with any closing remarks you may have.

Well, thank you, all, for listening in on the call today. We're going to go back to work and we'll be here for a while if you want to call us at our offices. Thank you.

Ladies and gentlemen, this concludes BJ Restaurants, Inc. first quarter 2010 results conference call. This conference will be available for replay after 8:00 PM Eastern Standard Time today through the 29th of April at Midnight. You may access the replay system at any time by dialing 1-800-406-7325, and entering the access code of 4282223. For International Participants you may dial 303-590-3030 with again the access code of 4282223 Thank you for your participation. You may now disconnect.