Katie Scherping - Chief Financial Officer Dennis B. Mullen - Chairman and Chief Executive Officer Eric C. Houseman – President and Chief Operating Officer Susan Lintonsmith - Chief Marketing Officer Brat Mandicar with Quebec Capital Market

Thomason Wade with Pacifial Research Joseph Barsley of Bank of America Matthew DiFrisco – Oppenheimer & Co

Good day and welcome to the Red Robin Gourmet Burgers Incorporated first quarter 2009 financial results conference call. At this time all participants have been placed in a listen only mode and the floor will be open for your questions following the presentation. It is now my pleasure to turn the floor over to your host Ms. Katie Scherping, Chief Financial Officer of Red Robin. Please go ahead. Katherine L. Scherping: Thanks Gwen. Before I get started I need to remind everyone that part of today’s discussion particularly but not limited to our outlook and development expectations will include forward-looking statements. These statements will include but not be limited to references to our margins, new restaurant openings or NROs, trends, costs and administrative expenses and other expectations. Also these statements are based on what we expect as of this conference call and we undertake no obligation to update these statements to reflect events or circumstances that might arise after this call. These forward-looking statements are not guarantees of future performance and therefore investors should not place undue reliance on them. We refer all of you to our 10-K and our 10-Q filings with the SEC for a more detailed discussion of the risks that could impact our future operating results and financial conditions. We plan to file our 10-Q for the fiscal first quarter of 2009 by the close of business tomorrow. I also want to inform our listeners that we will make some references to non-GAAP financial measures today during our call. You will find supplemental data in our press release on schedules one and two which reconcile our non-GAAP measures to our GAAP results. Now, I’d like to turn the call over to Denny Mullen, Chairman and Chief Executive Officer. Dennis B. Mullen: Thanks Katie and thanks everyone for joining us today, we also have with us Eric Houseman, our President, Chief Operating Officer and Susan Lintonsmith, our Chief Marketing Officer. Eric will provide detail on first quarter results and an update on our operations initiatives, and Susan will share what our marketing team has been doing to drive guest traffic and retention. Then Katie will review in detail our most recent financial results and discuss our business outlook. First, I’ll start with a quick review of our fiscal first quarter 2009 results compared to a year ago. Total revenues increased 6.0% to $270.8 million while company-owned comparable sales decreased 8.1% compared to the first quarter of last year. As we said during our last earnings call, we expected that the year-over-year sales comparisons would be difficult for the first quarter of the year as we lapped over our most successful quarter of 2008, which included national cable advertising that began in early February last year. As you know, we did not have nation cable television advertising in the first quarter of this year. Restaurant-level operating profit decreased 1.7% to $47.1 million or 17.7% of revenue compared to 19.1% a year ago. Adjusted or non-GAAP diluted earnings per share for the 2009 first quarter were $0.47 compared to $0.43 in the first quarter a year ago, an increase of 9.3%. And finally in the first quarter of this year, we opened a total of nine new Red Robin restaurants, seven company-owned and two franchised locations, ending the quarter with 298 company-owned and 130 franchise locations for a total of 428 Red Robin locations across North America. We are on target to open additional seven to eight company-owned restaurants in 2009 for a total of 14 to 15 restaurants all of which will be funded from our operating cash flow. Three more restaurants opened at the end of the second quarter and another three are under construction. We also expect our franchisees to open a total of five to six new restaurants in 2009 including a franchised restaurant that opened early in the second quarter, three new franchised restaurants have already opened so far in 2009 and one is under construction. Regarding development decisions beyond 2009, our plans are still on the works so we do not have details to share at this time. However, we will continue to maintain broad flexibility and a sound discipline in any commitments that we do make. As we said before we expect to have many options available to us. So with that as an overview, given the unpredictability of the current operating environment, we will continue to focus on things that we can control including our targeted marketing efforts, the investments to strengthen our teams and our great service and exciting menu offerings that make a connection with our guests, all while driving efficiencies and excellence across every area of our business. Now before I turn the call over to Eric, I wanted to highlight our stock ownership guidelines that the Compensation Committee of our board established for our directors and executive officers. My ownership guidelines represent four times my annual base salary and stock ownership, and the other five executives’ guidelines are based on their positions and require between one and a half and two times the value of their annual salary be held in company stock for the entire term of our employment. We’ve outlined these guidelines in our proxy but I wanted you all to be aware of this and understand that there are only three other restaurants companies of the 15 in our peer group that have any level of stock ownership guidelines. Also outlined in the proxy is the amount of tender offer proceeds received by the executive team for which substantially all of it was used for the acquisition of company stock. We and our board believe the ownership guidelines support and strengthen increased alignment with our stockholders. With that I’ll turn the call over to Eric. Eric C. Houseman: Thanks Danny, good afternoon everyone. In the first quarter of 2009, our comp store sales decreased of 8.1% which is driven by a 10.2% decrease in guest counts partially offset by a 2.1% increase in average check. We expected the first quarter of 2009 to be the most difficult comparison of 2009 as we went up against our strongest quarter last year. In the first quarter a year ago, our comp store sales were up 3.9% driven by a 0.4% lower guest count that was more than offset by a 4.3% higher price and mix. In addition to the tough year-over-year comparison and the fact that we did not have the benefit of TV in Q1 of this year as we had for most of the first quarter of last year, we continue to operate in a very difficult economic environment where we are contending with very aggressive discounting and promotions for many casual dining chains. During the first four weeks of the second quarter, our comp store sales were down 11.1% versus being up 0.5% in the first four weeks of the second quarter a year ago. Please note that the year-ago four week period has two weeks of national cable advertising, so we are cycling through that media spend that we had in 2008 in addition to facing a more intense competitive landscape this year. Susan will talk about some of the marketing strategies that we have deployed in Q1 and what we have planned for Q2. You will recall a restaurant enters our comparable base five full quarters after it opens. Our first quarter had 244 company-owned comparable restaurants out of the 298 total company owned restaurants. Average weekly sales for the restaurants in our comp base were $58,079 during the first quarter of 2009 compared to $63,196 for the same restaurants in the first quarter of 2008. Average weekly sales for our 41 non-comparable restaurants was $55,245 during the first quarter of 2009 compared with $55,165 for the 42 non-comparable restaurants a year earlier. For all company-owned restaurants, average weekly sales were $57,352 generated from 4,768 operating weeks in the first quarter of 2009 compared to $62,945 generated from 4,075 operating weeks, in the first quarter of 2008. The 15 franchised restaurants that we acquired early in the second quarter of 2008 will be included in the comparable base beginning in the third quarter of this year. These 15 restaurants’ AUVs were $52,555 during the first quarter of 2009. Our first quarter 2009 restaurant level operating margins of 17.7% were 140 basis points below the 19.1 margins in the first quarter of 2008. Our margins in the first quarter this year were negatively impacted by higher food, beverage, labor and occupancy costs and de-leveraging from lower average restaurant sales volumes. These were only partially offset by a decrease in operating costs which reflected the lower year over year contributions to our national advertising funds. Without a doubt, the environment we are operating in continues to be extremely tough But as Danny said earlier, we are focusing on the things we can control and that includes the investments we continue to make to execute in our restaurants, manage costs and strengthen our teams so that they can continue to offer our guests craveable gourmet burgers and superior unbridled service. For example we recently began implementing a system-wide initiative to streamline our operations in our kitchens in ways that are not only intended to reduce costs but also allow our restaurant leaders to spend more of their time building and supporting our teams during daily shift operations. The goals include strategically reducing the amount of raw materials or SKUs in our restaurants that the teams have to manage and improve the schematics and efficiency in the heart of the house using various tools, processes and procedures. We are currently in the second of three phases of this initiative with the final phase commencing during our June 15th menu roll out. We are encouraged with the initial results that we are seeing through the first two phases and we are very happy with the changes that further enhance and build upon our cornerstones, specifically the quality of our burgers, our [inaudible] and our managers’ ability to impact and develop our great team members. We are also extending this philosophy to other cost centers of our business such as our refreshment center and our supply category, and we expect to see more cost savings through these initiatives and efficiencies in the remaining part of this year and into the future. On the NRO front, we are seeing more encouraging results from the work that we’ve been doing over the last 18 months in regard to NROs, strengthening their performance and making sure that they open complike. In fact, we’ve been achieving new all-time opening weekly sales volume records and then breaking them consistently with their Q1 NROs. With our three most recent openings at the start of Q2, we not only set a new system-wide opening sales record of $145,000 during the opening week near Evansville, Indiana location, but two of these three restaurants have had four consecutive weeks of six-figure sales, and those three NROs alone have generated nearly $1.5 million in sales during their four weeks of operation. We are also very pleased with the profit performance of our NROs and they continue to raise the bar on their restaurant operating profits, further demonstrating solid results from our implementation and our strategic and scaleable process for NRO training and leadership, and the point early in the NRO process is really paying off. In addition, during our last call we shared some details of some system-wide operational training initiatives that are helping our team members across our system deliver a consistently outstanding Red Robin guest experience. We are calling it Make a Connection, and it is designed to create [inaudible] guest and increased frequency. The roll out and ongoing training of this program is well underway in our restaurants and we believe it is already resonating with our guests as the percentage of positive unsolicited Internet feedback we have been receiving is the highest we have seen in years. In conjunction with this training initiative we have identified the top 10 loyalty drivers with our guests that increase frequency. We have recently implemented a strategic and measurable guest satisfaction tool that measures against these loyalty drivers every month and keeps our operators focused on the incredible unbroken service our brand is known for. Finally, the investments that we continue to make in our team members are not only making our operation more effective and productive, but it is also increasing their engagement and helping us reduce turn over which is down significant among our restaurant managers as well as our hourly team members. So with that overview of our operations let me turn it over to Susan to talk about the results and the plans we have related to marketing.

Thanks Eric, as most of you know we used national cable TV in 2007 and 2008 to drive brand awareness and understanding especially in our newer markets. In 2009, we decided to capitalize on the brand awareness gains and focus our marketing dollars on more targeted traffic driving and retention initiatives including a robust online digital media plan, targeted direct mail with coupons promotions, and local restaurant initiatives. Based on this more targeted focus, restaurant contributions to our national advertising fund were reduced in 2009 to 0.25 % of our national revenue from 1.5 % in 2008. The 2009 marketing plan is based on driving traffic by supporting product news. We started off the year celebrating the 40th anniversary of the Red Robin brand by highlighting some of our long time Red Robin favorites including our royal Red Robin burger which has a fried egg on top, and our famous towering onion rings. Our Feb. March promotion which included our innovated and spicy Burning Love Burger and Southwest Ancho Chicken Salad, both featuring both our new jalapeno coins. To drive incremental traffic we supported the Burning Love Burger with a targeted direct mail piece in mid February that communicated the fun ingredients, a bottomless steak fries and limited time only call to action. The mailing supported all our company owned locations targeting approximately 5000 households within a 3 mile radius of each restaurant, offering a $3.00 off incentive to try the new burger. The Burning Love Burger incentive achieved a redemptions rate of more than 8%. Which is significantly higher than what is typical for these type of mailings. We also had a strong internet media program from February through early April that included banner heads, a 15 seconds online video supporting the Burning Love Burger. Given the success of this burger which was among the top 10 menu items ordered by guests in that time period, we will be adding the Burning Love Burger to our menu in June. Another key initiative in 2009 is driving gift card sales both inside and outside the restaurants. In 2008, in August we launched third party gift card distribution in several major grocery chains and to date we have had great responses across the country and currently our gift cards are in 2400 retail locations with plans to expand in two more locations throughout the year. We expect to add as more as 4800 additional retailer locations this year which will make our gift cards available in about 7200 retail locations outside of the restaurant by the end of the 2009. Even though this program is still ramping up, we are already among the top 10 % of our third party gift card distributor clients based on total dollars sales in the local and regional gift cards category. We are also doing more to drive gift card sales both online and in our restaurants. To increase the appeal of our gift cards, we have added several card styles that are specific to popular gift card occassions. Including birthdays, Mother’s days, Father’s days, and graduations. In several markets, we are testing the new gift cards in store merchandiser for our restaurant lobbies that feature our gift cards and more. We are very pleased with our gift card results to date which are exceeding our expectations. In Q1 we also launched our guest satisfaction survey program that Eric mentioned to support all company-owned restaurants and several franchise restaurants. This is a new restaurant level web and telephone survey that we are calling guests voice. And allows us gathre timely feedback on key loyalty drivers such as good quality, service experience, restaurant atmosphere and cleanliness. We are using the actionable information at the restaurant level to identify where our teams should focus there efforts to improve our service experience and continue making meaningful connections with our guests. The biggest news may be the return of our popular steak sliders for the summer promotion that began this week. We first promoted steak sliders in February and March of last year and it was one our strongest new product promotions we have ever had and we are responding to guests demands by bringing them back this time with the option of either, 2 or 3 steak sliders served with our garlic parmesan steak fries cole slaw. Based on the excitement and sales generated by our steak sliders in 2008, we are increasing our marketing support behind this promotion to drive national awareness that our sliders are back. This will include 3 weeks of national cable television starting the week of June 8th, which will be funded primarily through our corporate marketing budget in Q2. We will run 15 second ads on national cable TV and we will also support the slider promotion with direct mail coupon drops, similar to the successful February and March campaign. Combined with online ads and other marketing vehicle. Sliders are still a hot items in this industry and we believe that our sliders are differentiated and will stand above the competition and we are including them in our new menu that will be in company restaurants in June. We are encouraged by some of the results from our Q1 marketing plans and in Q2 we look forward to being on TV again as an additional marketing element to the promoter of steak sliders. So those are some of the marketing headlines. Now I will turn the call back over to Katie to review our financial results in greater details. Katherine L. Scherping: Thanks Susan, first of all, if you haven’t already seen our news release on the quarter’s results you can find it on our websites at redrobin.com in the investor relations section. The fiscal first quarter of 2009 was a 16-week period ending April 19th . Compared to the fiscal 1st quarter last year, total revenues including restaurant sales and franchise royalties increased 6% to $270.8 million. Restaurant sales grew 6.3% to $266.6 million and consisted of $221.2 million in sales from our comp restaurant, $12.5 million in sales from the 2008 acquired restaurants, and about $32.9 million in sales from our non-comparable restaurants. As Eric mentioned, the 15 franchise restaurants acquired in second quarter of 2008 have not been included in our comp-store sales metrics yet. Franchise royalties and fees decreased 10.4% in the first quarter to $4.2 million and exclude the $517,000 in royalty’s contribution from the 2008 acquired restaurant. The 98 comp restaurants in the US franchise system reported a 7.2% decrease in same-store sales while the 18 comp restaurants in the Canadian franchise system reported a 0.8% increase in same-store sales for the first quarter. Our restaurant level operating profit margin was 17.7% which compares to the 19.1% that we reported in the 1st quarter of 2008. The 140 basis point margin decrease was driven by 80 basis points of higher costs of sales, 40 basis points of higher labor costs, 30 basis points of stock compensation expense related to the restaurant team member stock options that were tendered, and 70 basis points of higher occupancy costs. These higher costs were partially offset by 80 basis points of lower operating costs. Now I would like to go through our food costs in a fair amount of since some of Red Robin’s trends might be different from what other restaurant companies are experiencing generally. Our food and beverage costs increased by 80 basis points in the first quarter 2009 compared to the first quarter of last year. The increase was due primarily to higher ground beef cost and the cost of potatoes used to make our steak fries. As you may recall we get contracts to the price of our ground beef in 2008, a price that was well below the stock market for the majority of 2008. We have taken the opportunity to contract 100% of our ground beef used in 2009 through June and just under half of our volume has been contracted for the remainder of 2009. Unfortunately, our 2009 contracted price for ground beef this year has been above our very favorable pricing from last year and slightly above the stock price in the first quarter. The stock markets for our ground beef packs continues to climb into the second quarter and we hope our contract in the second quarter will prove favorable to the stock for we know will be above the 2008 contract pricing in any case. Our potatoes prices are locked in until October when the new crops will be processed for steak fries. Ground beef and steak price contributed about 60 basis points to the pressures on margins in the first quarter this year, and we expect that trend will continue. In addition we introduced our Prime Rib Dip to our menu in the second quarter of 2008, so, we have an increase year over year in the first quarter of about 30 basis points due to the addition of that protein to our food costs this year. We expect to see slightly favorable cost trends above cheese and fry oil which will help us offset some of these pressures, but our steak slider promotion may cause some additional pressure on food costs in the 2nd quarter depending on how popular this promotion turns out to be. Our total labor cost increased of 70 basis points that’s attributed to a couple of items. First, the labor cost was up 30 basis points as a result of the stock compensation expense from auctions tendered by our restaurant team members as well as about 20 basis points of minimum wage threats that we identified at the beginning of the year. We are also experiencing increases in insurance expense for our team members. As Eric mentioned before, teams are doing a great job of managing the controllable costs in the business even as they face declining sales volume. Our occupancy cost is largely a fixed cost representing both base and percentage rent as well as common area maintenance charges and real property taxes and insurance. The primary reason for the increase of 70 basis points is the de-leveraging of the tightly fixed costs as we have seen our average restaurant sales volumes decline since last year, combined with slightly higher fixed rent particularly from our more recent restaurant opening and from the acquired properties. Other restaurant costs increased by 80 basis points as we reduced our national advertising fund contribution at the beginning of 2009 to 25 basis points from 150 basis points last year. Offsetting this 125 basis points decrease was an increase in corporate marketing spending of about 20 basis points to support several of the initiatives Suzan talked about earlier, and the remainder in deleveraging from the fixed component of this expense related primarily to utilities and maintenance expense. Depreciation and amortization expense during the first quarter was 6.5% of total revenues, about 70 basis points higher than a year ago primarily due to revenue deleverage and assets we acquired in 2008. General administrative expenses were $20.2 million or 7.4% of total revenues in the first quarter of 2009 compared to $22.5million or 8.8% of total revenue in the first quarter of 2008. G&A expenses were lower as a percentage of revenue primarily due to reduction in compensation expense on an ongoing basis, stock compensation expenses on an ongoing basis which represented $611,000 in the first quarter of 2009 versus $1.5 million in 2008 for the first quarter. In addition the reduction in our manager turn over and decreased development has resulted in significantly less manager training expense. Lastly our G&A in the first quarter 2008 included an expense of about $465,000 attributed to the national marketing fund compared to a reversal of about $330,000 in the first quarter this year related to the fund. As we discussed in our call in February, the tender offer for certain outstanding stock options of our team members was completed in the first quarter. As a result of the offer, we incurred a one-time charge of $4 million related to the acceleration of unvested options that were tendered, of which about $886,000 was related to options tendered by team members in our restaurant which is the 30 basis points I mentioned earlier in my discussion of restaurant labor and $3.1 million of the one-time charge was attributable to options tendered by administrative team members. Our total cash paid for options was $3.5 million and is reflected in our statement of cash flows and charged to additional paid in capital. Our pre-opening expense in the first quarter was about the same amount compared to a year ago. Our pre opening cost per unit so far this year has been about $275,000 compared to $294,000 per unit in 2008. We are currently budgeting about $285 000 per year in the pre-opening spend for 2009 NRO As we previously announced, we closed 4 restaurants during the first quarter 2009. This decision was the result of a process to identify those restaurants that are in declining trade areas, performing below accepted profitability levels, and or require significant capital expenditure. The locations that were selected for closure represented all the restaurants whose leases were not extended or were in need of significant capital improvement that were not projected to provide acceptable returns in the foreseeable future. We recorded a charge of approximately $586,000 during the first quarter of 2009 related to lease termination costs based on estimated remaining lease obligation, net of estimated sublease income and other closing related costs. Net interest expense was $2.1 million in the fiscal first quarter of 2009 compared to $2.3 million during the same period in 2008. Our interest expense in the first quarter of 2009 decreased from the prior year due to a lower average interest rate of 3% versus 4.9% in 2008 offset by a higher outstanding debt balance. Our effective income tax rate for the first quarter of 2009 was 25.3% compared to 30.3% for the first quarter of 2008. This decrease from 2008 is primarily due to federal income tax credit. We anticipate that our full year 2009 effective tax rate will be approximately 25.3% Net income for the first quarter of 2009 was $3.8 million or $0.25 per diluted share compared to net income of $7.3 million or $0.43 per diluted share in the first quarter of 2008. Excluding the impact of $0.19 per diluted related to tender offer for stock options and $0.03 per diluted share for cost related to the closing of the four restaurants, our non-GAAP first quarter 2009 earnings per diluted share was $0.47. Schedule two of our earnings press provides the detail of this GAAP to non GAAP reconciliation. Looking at the cash flow statement, our cash in operations of $25.8 million in the first quarter 2009 exceeded our development capital expenditure of $20.9 million. On April 19th 2009 we had $8.6 million in cash and equivalents, and had a total outstanding debt balance of $218.9 million including $130.2 million in borrowings under our $150 million term loan, $82 million of borrowing as well as $4.4 million of letters of credit outstanding under our $150 million revolving credit facility. We have made $2.8 million of the scheduled $15 million in payments required by the term loan term loan portion of our existing credit facility in 2009. Since the end of the first quarter, we have made additional debt repayments of $6 million on a revolving facility. We are subject to a number of customary covenants under our credit agreement. As of April 19th 2009, we were in compliance with all debt covenants and we expect to remain in compliance through fiscal year 2009 which I will elaborate on in a moment. Let’s talk about our outlook for 2009. For the second quarter of 2009 which is a twelve week quarter, we expect to open six new company owned, and two new franchise restaurants. Three new company owned and one new franchise restaurant have already opened during the second quarter this year and three company owned and one franchise restaurant are currently under construction. As Jenny mentioned, we expect to open 14 to 15 new company-owned restaurants while our franchisees are expected to open 5 to 6 new restaurants. As Suzan reminded you, all company-owned and franchise restaurants in our system now contribute 25 basis points as direct restaurant revenue to our national advertising fund down from 1.5% of revenue in 2008, and depending on actual revenue performance in 2009, this contribution change could result in approximately $11 million less in the company’s advertising expenditures in 2009 or about $50 million less on a system wide basis. We will now be providing full year EPS or revenue guidance at the time. For fiscal year 2009 which is a 52-week period, we expect comparable restaurant sales to continue to decline based on the current macroeconomic environment and the significant reduction in our national cable television advertising which will create more difficult comparison during certain periods. We are not currently planning any menu price increases for 2009, but we will carry 1.1% price mix into Q2 which we will roll off in June making a weighted average price mix assumption of about 0.7% for Q2. In addition as I said earlier, we expect certain costs and revenue deleverage to continue to put pressure on our restaurant level profitability. Therefore we currently anticipate that without any additional menu price increases, restaurant levels operating margins could decline by 50 to 80 basis points during 2009 even after considering the benefit from reduced national advertising contribution and other cost reduction activities. For every 10 basis point basis change in restaurant level operating profit during the full year 2009, diluted EPS is estimated to be impacted by approximately $0.04. As a result of the completion of the tender offer, future compensation expense associated with tendered unvested options has been eliminated. On an ongoing basis for outstanding equity grant in 2009, we expect to incur stock compensation expense, exclusive of the one-time tender offer charge of about $2.8 million of which 17% will be charged direct on labor and 83% will be expensed in G&A. Excluding the one-time charge related to the tender offer for stock options in the first quarter, we expect full-year 2009 G&A expense to increase by approximately $2 million. Depreciation and amortization expense should increase approximately 12% year-over-year in 2009. And interest expense will be lower than 2008 assuming average interest rates are lower than 2008 and we pay down our debt down during 2009. As we said earlier, we will fund our new restaurant development during 2009 using our operating cash flow. Taking into consideration, our full fiscal year 2009 capital expenditure estimates of around $45 million, we expect to use our remaining cash flow to pay down our outstanding debt during 2009 and may make opportunistic purchase of our common stock. I want to remind everyone how our debt calculation works. The total debt outstanding which was $218.9 million at April 19th of 2009 plus our outstanding letter of credit of $4.4 million is the debt that we use to compute the ratio on. Our debt does not include operating license. Our last 12 months of EBITA excludes the non-cash charges for stock compensation expense, acquisition related reacquired franchise costs and the asset impairment charges or restaurant closing costs. Our debt-to-EBIDTA ratio for purposes of our covenant was 2.11 to 1 at April 19th 2009. Assuming we use our expected free cash flow to pay down debt in 2009 including $15 million with scheduled term loan payment, we will stay well below our maximum debt leverage ratio of 2.5 to 1, allowed by our credit agreement for all of 2009. I also want to remind everyone that $206,000 of pre-tax earnings or expense equals penny per diluted share for the full year of 2009, which is equivalent to about 2 basis point as a percent of revenue. This illustrates the sensitivity level of our business from sale, costs of EPS which in an uncertain business climate makes accurate forecast extremely challenging. With that I will turn back the call over to Dennis. Dennis B. Mullen: Thanks Jenny. I would like to leave you with a few thoughts before we go to the Q&A portion of our call. We fully appreciate the challenges we face and we’re confident we have the right strategy to meet them head on and emerge even stronger as and when the operating environment improves. To go to the top line, we will continue to focus on targeted marketing strategies to drive incremental traffic and frequency and we will make a connection with our guests through our great gourmet burgers, superior service while we invest in our team members that make it happen and continue to manage control of cost at both the restaurant and at corporate level. We expect to generate significant free cash flow this year and will continue to pay down debt as reflected in our recent actions further strengthening our balance sheet. In closing, I am very thankful to be working with such a dedicated team. With that operator, we are ready for questions.

Thank you, if you would like to ask a question at this time please press star 1 on your touch tone phone. After you connect your speaker phone please make sure your mute function is turned off to allow your signal to reach our equipment. Once again that is star 1 if you do have a question we’ll go first to Matthew DiFrisco with Oppenheimer & Co. Matthew DiFrisco – Oppenheimer & Company: I just, can you quantify or what do you estimate how much of these comp lag par se the Malcolm math number that just came out would you say is quantifiable due to the offer of the cable advertising?

You cut out the last part of your question Matt. Can you repeat that? Matthew DiFrisco – Oppenheimer & Company: Sure, Censure Sales your current trends that you are doing now like around 10% or so what Malcolm master supported of better than down five or better down than 4.5 is, can you tell us how much of that difference is due to the cable advertising, the lack of during the year? Dennis B. Mullen: That’s pretty difficult for us to quantify specifically we know we had two weeks last year during these first four weeks of the quarter that we were on advertising, again with the residual from the first quarter advertising as well and we were up quite a bit year over a year even last year, when we do a two year trend for our own business for, you know looking year over a year on two year trend we are still running above the nap track average through the first quarter. Matthew DiFrisco – Oppenheimer & Company: And then I guess have you seen a change of your consumer, I know you’ve talked tins and twins before used before but looking through the unemployment data it looks like the teenage unemployment level is rising and could be pretty bad this summer, what do you see in this, is there anything a strategy you are kind of get that team into your store if they are not trafficking other, may be your neighboring retailers. Dennis B. Mullen: Matt we haven’t seen any other discernible difference and our active guest chat is almost unchanged. Matthew DiFrisco – Oppenheimer & Company: Okay, thank you.

Well then back to Brat Mandicar with Quebec Capital Market. Brat – Quebec Capital Market: Good afternoon thank you. I need to ask First of, what is this $15 schedule the payment when is that due? Dennis B. Mullen: The 15 million is a quarterly payment that we pay over $2.8 million in our first quarter’s schedule repayments, I think it increases to about 4.8 million in the last couple of payments in June and September so the quarterly pay down. Brat – Quebec Capital Market: Okay, and now the stakes sliders you are going to do the marketing the cable advertisement for that rule out, can you quantify how much that will be in the second quarter marketing expenditures, I mean is there something that we may be not expecting here previously. Dennis B. Mullen: Yeah we are planning on spending roughly 1.3 million in the media buy and approximately half of that as incremental spend half of that is coming from other, just being allocated from other resources of other things that we are directing into this. Brat – Quebec Capital Market: Okay Dennis B. Mullen: And it’s all on Q2. Brat – Quebec Capital Market: All in Q2, alright and that will be all in operating expenses? Dennis B. Mullen: Exactly yeah it’s in the marketing media spend, it’ll be absorbed in the in offerings Eric C. Houseman: In GNA not offerings Brat – Quebec Capital Market: In GNA, okay and then last question, you talked about the kitchen initiative and how you are in faith to do that right now and you are encouraged by the results can you talk about specific results that qualify what the encouraging data points are. Dennis B. Mullen: You know Brat a lot of it is since we are in the middle of the roll outs and we are chucking, I don’t think we will really go into detail yet and doing only from the fields we are seeing a lot more efficiencies and we’ll start we’re measuring it when all its all in effects come in June 15 with the new menu roll-up. Brat – Quebec Capital Market: Alright thank you very much.

We’ll go next to Nicole Miller with Piper Jaffray Nicole Miller – Piper Jaffray: Thanks good afternoon, I just want to better understand if this slider of marketing is the same period over a year and then I believe in your first quarter you have your, I’m not sure if its labeled G or at MIG conference but, can you tell us if this kind of settlement from your partners on this field and would there be an opportunity for you to go back on T.V advertising in an economic recovery.

Nicole this is Susan I’ll answer the first part of your question. We had during Q-2 five weeks of television in 2008 and we’ll have three weeks this year, it was more front loaded last year part of the quarter and it was you know blinking so we are on one week of next week, what we are doing this year is three solid weeks in a row on a national cable Dennis B. Mullen: Last year it was Bradley Nicole, this year the three weeks will be totally focused on sliders

And sliders last year was on February March and this year sliders will be on Q-2 and then on the menu from June 4 Dennis B. Mullen: Nicole in terms of your franchise leadership question we got some of the highest reviews scores from the leadership seminar in terms of Take home value, we did well make the connection in the as well as our leadership platform in breakouts there, obviously with the economic financing environment its making it very difficult for Franchise East to grow, however I think its still a great testament even during those tough economic times as we know there is not a lot of lending going on, that our franchise partners will deal with 5 to 6 and still have new units in the piper so I think that speaks to the confidence that they have long time in the brand. Eric C. Houseman: Thank you and just to be clear in those three weeks of T.V fund the year was at the TV in the bar cards Dennis B. Mullen: We have many commemorators this time, we are seeking knowledge, we are rolling out this campaign and we’ll make decisions as we go forward Nicole Nicole Miller – Piper Jaffray: Thank you very much Dennis B. Mullen: Thank you.

Next we have Thomas with Morgan Keegan Thomas – Morgan Keegan: Thanks, hey guys, just wanted to also follow up on the addition to the TV program in Q2, I thought I remembered you guys testing some products to specific promotion at the end of last year and I just be curious kind of what you think is changed or what you think makes you feel more comfortable about rolling something out now at this point that’s a little more products specific Dennis B. Mullen: One of the things that’s different this time is that we know that sliders is something that was very successful, very popular last year, we have gotten so many guest comments, when are you bringing your stakes sliders back, so we know this is news worthy and instead of doing it in a local market, this is going to be like I said national awareness and that it was probably a down economic time for one of the markets that we selected in Q-4 of last year so that, that didn’t help, this time we think that with the product news in the whole, thing of them coming back, this is a great time to go back on with the, with product focus in a real fun TV sport just to let people know how you want them in the back of their… Dennis B. Mullen: And Jest was local that we did back in the year winter Thomas – Morgan Keegan: Okay great, thank you.

We’ll go next to Steven Ray of JP Morgan Steven Ray – JP Morgan: Hi thanks, it appears as if the competition of burgers is specifically becoming a lot more aggressive with price point and discounting of sandwiches and burgers, and so I’d be curious how you can start unpacking your business if you’ve seen a notice of change in trends when with the competition becomes more aggressive. Dennis B. Mullen: We’ll we definitely noticed that there are is a lot of discounting out there and one of the things we don’t want to do, I cant speculate and say if they are discounting current guests or truly driving in incremental guests but I can say that when we have targeted a prospects we then offer to try our new product with the products we have received, you know really high redemption rate on it, but we have not necessarily noticed any change in our business from their specific discounting. Steven Ray – JP Morgan: And then Katie thanks for the color on the …instead of just talk about your full year and fresh importation 60% of that change and how………

We are still working on recovery missing single digit of somewhere between 5 and 7 Steven Ray – JP Morgan: Okay and then how is that going to progress throughout the year based on, you know all the contracts you have in place today?

Yeah I mean I think a lot of it is going to depend on the spot for hamburger, we feel like you know we have contracted and that’s why we have only contracted for about 40% to 60% of our volume in the back up of the year, we are hoping we might be able to broaden that with some capability that, may be we will see if that will back up the year so we don’t know if for too much of a volume to the back up of the year, so its really hard to speculate what we’re going to see when. We do know that cheese is coming off and we’ll probably start to benefit from the reduction in cost of cheese prior coming down and we’ll start to see that sometimes starting in June, so we do know that there is some favorability in certain commodities we talk about we don’t know what the potato crop is going to be there this year, hopefully the grains wont trump the potato planting and you know cause a fragmental supply to price orders again. But that’s again speculation that’s why we are going to use the 5% to 7% range and as we move throughout the year we will get more visibility but right now it’s hard to put as when. Steven Ray – JP Morgan: Okay and just finally on the labor component, I guess a 40 basis point excluding the charge will look pretty good, you know despite being done at 50%, so just perhaps you can just talk about what you are doing at the store level to manage labor and if we should expect those sort of trends to continue throughout the year, you know in a negative track environment Dennis B. Mullen: Yes Steven , we’ve been obviously focused on picking the picks and neutralizing some proprietor software that we have in terms of forecasting, we’re definitely not cutting corners or increasing section sizes, some of the benefits that we are seeing or have initially seen is in the hardware house with the simplicity to the project initially that I spoke to, we are taking anywhere between you know 3 and 4 hours a day out of the hardware house, we are investing a portion of that to improve sales we are, we will not get through however expensive our team members of our guests, so we will not go to 5 , 6 , 7 table sections, that’s not the way to maximize peak hour sales, so we’re using old processes and it’s a daily commitment to make sure that we pick into… Steven Ray – JP Morgan: Great thank you very much

We’ll go next to Joe Barsley of Bank of America Joseph Buckley – Bank of America: Hi to you, could you, I had an. earlier on the kitchen streamlining and… to use, are you… Kitchens stream lining and the removal of SKU’s. Are you simmering the menus? To some extent could you do that? Dennis B. Mullen: Well, Joe, we are looking at the menu very strategically, Suzan and her team as well as our Food and Beverage division. I’ll give you an example, we have a burger item that’s on the menu that sells for a day, and that menu item actually requires 3 preparatory SKU’s and two prep recipes. So we’ll look at that by eliminating a single item that’s a little bit a lot on the lower end of guest preference, we’re able to take prep out of the equation as well as SKU’s. And replace it with an item that we think is even going to have stronger guest appeal. One small example of many of the things that we’re doing to streamline the operations back there. It’s not going to be a considerably smaller menu however. Joseph Buckley – Bank of America: Okay, and then I got a question on the second quarter advertising plans, and then you said half of the 1.3 million is incremental. Is that 50 or 60,000 entirely a corporate expense or system wide expense of the franchise will be share? Katherine L. Sherping: It’s primarily a corporate expense Joseph Buckley – Bank of America: Okay. Could you remind us how the advertising in the fourth quarter last year, I think you just said you earned second quarter last year for five weeks, what you earned for the first quarter and if you have it what you going for third and fourth quarter really? Katherine L. Sherping: Yes. So in the first quarter of ’08 we were on for eight weeks. And they were – it was a pretty solid start since we were launching two new brand spots. In Q2 it was the continuation of those brand spots, and it was on a week, off a week, on a week, off a week, on a week, off a week. So five weeks but they were like I said, forced. And so that was five weeks and we’re coming in roughly over the force and doing three weeks straight. Joseph Buckley – Bank of America: Okay. And back to last year were you on a certain number of weeks in the third and fourth quarter? Katherine L. Sherping: We’re on, as you know, 23 weeks total, so in Q3 we’re on seven weeks and then three weeks in Q4 Joseph Buckley – Bank of America: Okay. Thank you.

Sure.

Welcome back to John Glass with Morgan Stanley John Glass – Morgan Stanley: Hi, thanks. On the 11% comp that you talked about in the first four weeks in this quarter this year? Again what was the comparable period last year? Katherine L. Sherping: Up point five. John Glass – Morgan Stanley: Okay. And how did the last four weeks compare to the prior four weeks? It would seem like its down probably sequential, is that true? Dennis B. Mullen: Slightly. Slightly John Glass – Morgan Stanley: Got you. Okay. And then, Kay, what kind of comp are you planning on for that down 50 to 80 basis points for restaurant margins. Could you achieve that? Katherine L. Sherping: [Inaudible] and I didn’t answer. It is based on a range of comp assumptions but we are not going to try to box in a guidance number at this point on sales, there are a lot of variables that also play into, you know labour and commodities, they drive that as well. So we’re not going to give you a range but it is based on a range that we’ve done internally. John Glass – Morgan Stanley: Could you achieve it with comps where they are today?

Yes John Glass – Morgan Stanley: Okay. And then, that’s important. And then you said down 50 to 80, in last quarter you said down 50 to 100 so what got better incrementally on margins from last quarter?

One of the things that we thought was, you know, some better than we’d hoped for Q1 results, so our estimates of Q1 came in a little bit better. And then in - again we talked about some of the commodities that we could see may not be material you know what else scenario for our commodities in the remainder of the year, so there is some potential for up side there as well. John Glass – Morgan Stanley: Got you. Okay, great. Thank you

At this time we’ll take our last question from Thomason Wade with Pacifial Research

Great. Good afternoon everybody. I got a question on the ad campaign. So in the back half was it all brand advertising as well? Dennis B. Mullen: Yes

In the back half of 2008, yes. Yes it was all brand advertising. We launched two new creative spots though in the beginning of Q3

Okay. And then what you’re planning to do with these? national advertising for the sliders?

That’s correct. Its national cable advertising.

Okay. As you look back on this, on the ad campaign that you ran in the last year or two, do you feel like you got an adequate pay off from it? Or is the fact that it was mainly brand advertising kind of hindered any sort of traffic that you were able to generate?

We did feel that we got benefit from the television primarily to advertising awareness and understanding. Especially in our newer markets, we did see our unaided and aided awareness increase significantly in those markets. So that was very successful on our minds, but as we mentioned in our past calls we believe that our strategy of focusing on product news and that’s what were doing with these stake sliders, is the way to drive traffic for us.

Going forward is national advertising going to be part of that – your budget and your thoughts on marketing

There’ll definitely be a consideration if the return is there, yes.

Okay. Well, I guess a good question is more of do you feel like you got a good return? I mean here we are in the first quarter, you had a down eight, and yet you’ve got up earnings and your full level, your EBITA margin is you know, flattish. It can arguably be said in a more competitive environment.

Yes. We felt we got the return out of the TV.

Okay. Thanks

Thank you

And that concludes our Question and Answer session I’d like to turn the conference back to our speakers for any closing remarks. Dennis B. Mullen: Well, at this point we thank you for your time today, it’s been a long call, Katie’s out of breath but we appreciate your time and look forward to talking to you again. Thank you.

Thanks everyone that concludes today’s conference, we thank you for your participation.