Greg Trojan - President, CEO, Dianne Scott - Director of Corporate Relations Greg Levin - CFO, EVP, Secretary.

Nicole Miller - Piper Jaffray Matt DiFrisco - Buckingham Research Brian Bittner - Oppenheimer Jonathan Komp - Robert W. Baird Will Slabaugh - Stephens Incorporated Jeff Farmer - Wells Fargo Jeffrey Bernstein – Barclays Courtney O'Brien - Morgan Stanley Chris O'Cull - KeyBanc Capital Markets Sharon Zackfia - William Blair.

Please standby. Good day and welcome to the BJ's Restaurants Incorporated Third Quarter 2014 Results Conference Call. Today's conference is being recorded. At this time, I would like to turn the conference over to Greg Trojan, President and Chief Executive Officer. Please go ahead, sir..

Thank you, operator. Good afternoon, everybody, and welcome to BJ's Restaurants fiscal 2014 third quarter investor conference call and webcast. I'm Greg Trojan, BJ's Chief Executive Officer; and joining me on the call today is Greg Levin, our Chief Financial Officer.

And we also have Greg Lynds, our Chief Development Officer on hand for the Q&A session. After the market closed today, we released our financial results for the third quarter of fiscal 2014 that ended on Tuesday, September 30th. You can view the full text of our earnings release on our Web site at www.bjsrestaurants.com.

Our agenda today will start with Dianne Scott, our Director of Corporate Relations, providing our standard cautionary disclosure with respect to forward-looking statements. I will then provide an update on our business and current initiatives.

And then Greg Levin, our Chief Financial Officer, will provide a recap of the quarter and some commentary regarding the rest of 2014 and some preliminary views on fiscal 2015. After that, we'll open it up to questions. So Dianne, please..

Thank you, Greg. 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.

Investors are cautioned that forward-looking statements are not guarantees of future performance, and that undue reliance should not be placed on such statements. Our forward-looking statements speak only as of today's date, October 23, 2014.

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..

Thanks Dianne. Our third quarter results demonstrate that our initiatives to build sales and enhance margins are taking hold. And helping BJ's improve our competitive positioning and overall financial performance.

Organization wide, we are keenly focused on driving top line sales by improving our value, our affordability, our food quality and innovation, speed hospitality and brand awareness. While our 0.3% comparable sales for Q3 were relatively inline with the Knapp-Track measure of casual dining sales.

Our increase in traffic outpaced the industry by approximately 300 basis points a wide margin. We are committed to growing sales consistently and sustainably by driving more guest traffic through our restaurants.

Our traffic momentum combining with the double-digit expansion related to our new restaurant openings means we are taking share where it matters most and that is guest visits. We are building traffic on top of our already number one position in our industry in terms of guest traffic per square foot.

And what makes this momentum even more encouraging is that we accomplish our traffic growth even as we lapped two weeks of television advertising in most of our major markets last year versus no TV this year, while curtailing promotional discounting as well.

We have been enhancing our core value proposition by leveraging the success of our newest menu items, while moderating price increases even in the phase of labor and commodity cost inflation. Introduced earlier this year, our newest menu items are delivering great value.

Thanks to price points that are in many cases below $10, while also addressing heightened guest demand for lighter and healthier food choices. The combination of limited price increases and new menu items at lower price points led to a 40 bps decline in our guest check year-over-year roughly consistent with our previous quarter.

Overall, our effective pricing as measured by average check lags our competitors by about 300 basis points extrapolating the Knapp-Track data.

This important investment in our concept that is making BJ's even a better value for our guests' requires an equal of Knapp greater effort to find operating cost efficiencies so that we can expand margins even as guest checks and commodity and labor costs work against us.

I'm happy to say that is exactly what our team accomplished in the third quarter. We improved restaurant level margins about 130 bps year-over-year by reducing cost through the middle of the restaurant P&L.

We discussed many of these initiatives on the last few calls and at our Analyst Day earlier this year and our Bottoms Up initiatives ranging from linen usage to oven repair contracts to take out packaging and janitorial supplies, they add up to significant savings. In addition, we positively leveraged labor cost by 20 bps.

Despite a significant increase and minimum wage in our home state of California where as you know 63 of our 154 restaurants are located and where we don't benefit from a tip credit offset.

Importantly, virtually all of this labor efficiencies being derived from our Project Q efforts which are effectively and consistently reducing complexity in our menu and kitchen processes.

We are asking our team members to work smarter not harder and their value input as allowed us to reduce average kitchen hours in comparable restaurants by 3.4% year-over-year this quarter, even as we slightly increased hours for front of house servers and hosts to improve speed of service and overall hospitality and guest experience.

Notably all of our kitchen metrics improved as we implemented these changes and made BJ's more efficient. Our theoretical food cost variance, cook times, guest duration and cost food percentage all improved year-over-year. The point is we are not cutting cost at the expense of our quality or service.

We are actually improving speed and quality by eliminating unnecessary processes. The third quarter also marked an important milestone in our real estate development strategy as we opened the first restaurant using our new smaller footprint in Oviedo, Florida.

Within initial sales at this restaurant eclipsing $160,000 per week, we clearly have the capacity to execute the same high sales volumes despite a smaller footprint.

This successful opening was followed by three additional openings featuring the smaller, higher return prototype, including two in Texas and one in Richmond, Virginia which opened in the fourth quarter. We still have refinements to make but our operators love the new layout and the guest response has been very, very positive.

We expect to achieve our goal of reducing our average unit investment by 20% or $1 million through the use of this new smaller prototype. Looking ahead to the fourth quarter and into 2015, we intend to further execute our strategy that is delivering results.

That is to continue to drive traffic by accentuating our value proposition and new unique menu items. And we will continue to improve operating margins by leveraging our scale and working smarter throughout our restaurant operations.

Furthermore, we expect to generate improved returns on our investment by building right-sized restaurants enabling more efficient operations and profitable guest traffic. With respect to the menu, in Q4 we will be focusing on our outstanding seasonal beers, our October fest and pumpkin ale are off to a great start this year for example.

Our new seasonal pumpkin pizookie is exceeding our initial forecast by almost 2 to 1. In addition, we will feature menu combinations to build check in the holiday season and feature several new appetizers and a lasagna entrée which leverages the BJ's brand equity and legacy as they will be cooked and served in our deep-dish pizza pans.

We continue to look to optimize our media spend by continuing to get more efficient with our digital using our targeted loyalty campaigns along with television and markets where our restaurant density allows us to generate the right return for our spend. Last but certainly not least.

We will continue to work hard at attracting, developing and retaining the industry's talent. Today's challenging macroeconomic and competitive environment demands the ability to embrace continuous improvement in addition to our long-term organic growth strategies.

And I'm proud to say that the team members working in our restaurants are responsible for a majority of the ideas that then become tests, then projects and ultimately initiatives rolled out across our operations that lead to new levels of efficiency and gust satisfaction I just talked about.

Our teams ability to take on new ways of doing things has been fundamental to the progress we have achieved to-date and to our expectations for ongoing improvements. Before turning the call over to Greg Levin, I want to comment on the 8-K filed this afternoon regarding the resignation of our Chief Restaurant Operations Officer, Wayne Jones.

Wayne resigned to pursue a new leadership position opportunity in the restaurant industry which has been a long held career goal for him. Myself, our senior leadership team and everyone at BJ's thanks Wayne for his contribution to BJ's over the last five plus years.

While we will miss Wayne, I believe we have tremendous operations bench strength and the best restaurant operating team in the industry. We are confident that our teams will carry on emerging driving additional sales, operating improvements and expansions in the coming quarters and years ahead.

Greg?.

Thanks Greg. As we noted in our press release today, our revenues for the 2014 third quarter increased by approximately 9.7% to $206.5 million, while our net income and diluted net income per share rose approximately by 77% to $6.5 million and $0.23 respectively.

The 9% or 9.7% increase in third quarter revenues reflects an approximate 10.4% increase in total operating weeks partially offset by an approximate 0.6% decrease in our weekly sales average. Our comparable restaurant sales increased 0.3% during the quarter compared with the decrease of 2.2% than last year's third quarter.

This represented a first increase in comparable restaurant sales since the first quarter of 2013.

The 0.3% increase in comparable restaurant sales in the third quarter is attributable to a traffic increase of about 0.7% which Greg Trojan touched upon and it more than offset an average check decline of approximately 0.4% and that was driven primarily by our menu mix and incident rates. In the third quarter, we had a little over 2% in menu pricing.

As we mentioned on our second quarter call, with the July 4th, holiday moving to a Friday this year from a Thursday last year, the restaurant industry and in particular casual dining in BJ's had a challenging start to the third quarter. As a result, our comparable restaurant sales for the first week of July were down a little over 5%.

However, since the first weekend of July our comparable restaurant sales throughout the quarter generally fluctuated between down 1% and positive 1% driven by a positive guest count that were partially offset by menu mix and incident rates as we continue to deliver everyday affordability.

From a monthly standpoint, August was the strongest month of the quarter as well as our most consistent month for us.

We did experience more choppiness in our business in September as we are up against TV advertising last year in markets which we have approximately 75 restaurants including our core markets of Southern and Northern California and the Dallas-Fort worth and San Antonio, Texas markets.

From a margin perspective, our third quarter is typically our most challenging quarter of the year as we generally experience our lowest weekly sales averages due to seasonality and some of our highest operating cost due to summer utility rates.

However, despite these seasonal headwinds, the benefits we are seeing from Project Q around labor and our cost containment and expense management initiatives coupled with a slight improvement in comparable restaurant sales allowed us to achieve four wall restaurant level margin of 17.6% this quarter.

That's an improvement of over 130 basis points versus last year. Specifically our cost of sales was 25.1% which is up 30 basis points compared to last year's third quarter and flat sequentially from the second quarter. The increase over last year is primarily due to an approximate 2.5% increase in commodities as well as a menu mix changes.

The commodity increase of about 2.5% were higher than we originally projected as both cheese and ground beef remains stubbornly high throughout the quarter. Labor during the third quarter was 35.5% down 20 basis points as Greg Trojan mentioned from last year's third quarter.

This decrease is a result of improved hourly productivity related to our Project Q initiative as Greg described.

In fact, when we analyzed our labor productivity, if we exclude the impact from California minimum wage which we estimate to be about 30 basis points, our hourly labor would have actually been down to 35.2% of sales which would have been a 50 basis points improvement versus last year compared to the 20 basis points.

Our operating occupancy cost were 21.7% of sales for the third quarter a decrease of 150 basis points from last year's third quarter, including operating occupancy cost is approximately $4.5 million of marketing spend which equates to 2.2% of sales. Marketing spend in the prior year quarter was about $4.1 million also about 2.2% of sales last year.

Excluding marketing, our weekly operating occupancy cost in the third quarter averaged approximately 20,600 compared to 22,200 for the same quarter last year. This decline of a little over 7% highlights the benefits of many of the initiatives we began implementing earlier in the year which were more fully realized in this third quarter.

Our G&A was $12.8 million in the third quarter representing a 6.2% of sales. G&A came in about $700,000 better than anticipated and this is primarily due to lower training cost for new managers, less incentive compensation and equity compensation expense and lower legal and other corporate expenses.

Our depreciation and amortization was approximately $14 million or 6.8% of sales, it averaged a little over 7100 per restaurant week and that's been pretty much inline with our most recent depreciation and amortization trends.

Our pre-opening cost is $1.3 million during the quarter and are preliminary represents the cost for the three restaurants we opened during the quarter. Our tax rate was only 21% or so for the quarter and it was lower than the anticipated 27% rate. And this is primarily due to increased federal tax credit, coupled with our tax planning initiatives.

The variance and the actual rate versus the anticipated rate amounts really to only about a $0.01 during the quarter. With regards to liquidity, we ended the third quarter with a little over $24 million of cash and $32 million of funded debt on our line of credit.

During the quarter, we expanded our line of credit to $150 million from $75 million to provide more flexibility as we continue our national expansion program and return capital to shareholders through our share repurchase plan. This new facility does not expire until September 2019.

As noted in our release today, we allocated approximately $61.6 million towards the purchase of about 1.7 million shares of our common stock in the third quarter.

In total, we have purchased and retired approximately 2 million shares of BJ's stock for approximately $71.4 million since the authorization of our initial share repurchase program in April. This leaves us with approximately $78.6 million remaining under our current authorized share repurchase plan.

In regard to CapEx, today we have spent approximately $68 million and continued to expect our growth CapEx for this year for fiscal 2014 to be around $90 million before expected tenant improvement allowances and sale leaseback proceeds.

As we mentioned in the past, our expansion strategy and overall business model is predicated on leasing our restaurant locations. However, from time-to-time we made purchasing the underlying land for a new restaurant if that is the only way to secure a highly desirable site.

In these cases, we generally will sell the underlying land once the restaurant is opened. So in 2014, we expect to receive proceeds from tenant allowances and sale leaseback transactions of approximately $10 million. And therefore, our plan net CapEx continues to be in the $80 million.

We currently expect to fund our ongoing expansion, our capital expenditures, and our share repurchases from our cash on hand, cash book from operations proceeds from tenant improvement allowances, our sale leaseback transactions as well as through our line of credit.

Now, before we open the call up to questions, let me spend a couple of minutes providing some commentary on our outlook for the rest of fiscal 2014 as well as some preliminary commentary for fiscal 2015.

All of this commentary is subject to the risks and uncertainties associated with forward-looking statements as discussed in our filings with the SEC. Our comp sales trends to-date in October are running in the 0.5% positive range.

Most like we experienced in September, we continued to see choppiness to-date which we believe is primarily due to the continuation of the television testing in 2013, which ended on October 13th, of last year.

We currently have around 2% of menu pricing as I mentioned and we actually expect to be adding somewhere in the neighborhood of about 0.5% of pricing in the November timeframe to get ahead of commodity cost and other inflationary pressures going into fiscal 2015.

In modeling sales trends in the fourth quarter and into the first quarter of next year, I expect continued pressure on average check levels until the end of the first quarter when we will anniversary our new menu that was launched February 25, 2014.

Also in this year's fourth quarter Halloween moves to a Friday compared to a Thursday last year and New Year's Eve will be on the first day of fiscal 2015 as opposed to the last day of fiscal 2013. The last time this occurred was in fiscal 2008, ended up negatively impacting our comparable sales by 50 to 60 basis points in that quarter.

Therefore, I'm anticipating that the momentum of those two holidays will have the same 50 to 60 basis points negative impact on our comp sales for this year's fiscal fourth quarter. However, the first quarter of 2015 should get off to a stronger start.

For the fourth quarter, I would expect approximately 2014 restaurant operating weeks based on the construction of three new restaurants to be opened in the fourth quarter. I would expect our cost of sales to be in the mid 25% range, which would be a little higher than this past quarter.

As I mentioned commodity costs were up about 2.5% compared to last year despite lower grain prices and currently we have really not seen the lower grain prices translate into materially lower commodity costs.

Based on the recent sales trends and the benefits that we are seeing from initiatives around Project Q, labor should be in the mid 35% range in the fourth quarter. However, labor is also significantly influenced by comparable sales increases or decreases.

During the fourth quarter, I'm expecting total operating occupancy cost to be in the range of $23,500 a week including this number is a total of about $4.8 million in marketing spend and that approximates about $2,400 per operating week. Total operating occupancy cost last year were approximately $25,000 per operating week.

I would anticipate G&A in Q4 will be up on a quarterly sequential basis to approximately $13.5 million as we are expecting more managers and training to get ready for our 2005 opening as well as additional travel related to our newer restaurants.

Pre-opening cost should be in the $1.5 million range to slightly higher in the fourth quarter that's going to be for the opening of the three restaurants plus some cost associated with several new restaurants that we expect to open in the first quarter of 2015.

Based on our tax planning initiatives as well as credits expected to be realized in the fourth quarter, our effective tax rate for Q4 should be around 24%. Based on our share repurchase to-date, I would anticipate our diluted shares outstanding will be in the low $27 million.

Now, looking ahead to 2015, we are currently putting together our 2015 financial plan and operating plan and that gets presented to our Board of Directors in December for approval.

Therefore, while I do not have an approved plan to review with the investment community today, let me provide you with some of the management's preliminary expectations for 2015. Based on our latest information, this is still very preliminary, we currently anticipate the cost for aggregate commodity basket to increase about 2.5% next year.

This estimate is primarily based on chicken and beef price are staying high despite the lower input cost from grain. With regard to labor next year, our open enrollment for benefits does not take place until mid-November. So as of today, we still do not know the expected total impact on our business from the Affordable Care Act.

However, based on preliminary planning, we believe that can be managed through prudent menu pricing, menu designs and cost savings initiatives currently underway.

As we already noted, we are seeing improved labor productivity from our Project Q initiative and we do believe there was additional labor savings and improved productivity as we continue to implement many of these Project Q initiatives as well as testing our smaller menu.

We do believe some of these savings maybe able to help offset some of the cost from the Affordable Care Act.

In regards to our operating, the occupancy cost for next year, our cost savings initiatives has significantly reduced this cost this year and our goal is to hold the line on these savings and use additional savings to offset some of the normal inflationary pressure we get each year.

While we have not yet finalized our marketing plans for fiscal 2015, I expect our marketing to be somewhere in the neighborhood of 2% to 2.3% of sales. Again, this is very preliminary and I note that we do not target marketing from a top down perspective.

We will build our marketing plans from Bottoms Up approach and therefore marketing maybe lower or higher than this range. We will do our best demands through these cost pressures using a combination of marketing and operational initiatives coupled with prudent menu price adjustments and menu mix management.

We will also have to watch the menu pricing actions of our competitors in the current and can promotional environment. In November, we will be adding some additional menu pricing as I mentioned and therefore, I expect our menu pricing to be in the upper 2% range to be in fiscal 2015.

At the end of February, at the end of February 2015 that is we will be lapping the 1.4% of menu pricing that we took this past year when we launched our new menu and branding campaign. Therefore I see menu pricing in the mid 1% range beginning in March and running through July.

We do note that this is as of today and is based on commodity pressures, labor and other inflationary factors and therefore, this can change in either direction as we get more information going into 2015.

I expected our menu mix to begin to normalize next year as we anniversary the November 2013 introduction of the Brewhouse Burgers and the new menu, we introduced in February of 2014, which focused on everyday affordability and introduced a number of lower priced menu items.

This may give us some positive momentum on top of our already positive guest counts as we have seen in Q3.

In regards to G&A for 2015, our continued goal is to gain leverage as we grow as such we will strive to ensure that our G&A cost for 2015 grow at a rate less than our expected revenue growth, which will benefit from an expected 10% increase or so in total restaurant operating week plus increased comparable restaurant sales.

Our expected income tax rate for 2015 should be in the 27% range and we expect that diluted shares outstanding for 2015 will likely be in the mid 27 million range. Also for those of you building your models, I would anticipate around $500,000 or so of interest expense for next year based on kind of our current funded debt balance.

Finally, from a very high level perspective, in February at the investor day and our analyst day that Greg Trojan referenced earlier, we review with the investment community a comprehensive 3-year plan to recapture a restaurant level margins in the 19% plus range.

Year-to-date we are currently in the mid-17% range and have made some good progress on our operating occupancy comp line as more recently a labor line. As I think about next year, I believe we have an opportunity to see further margin expansion into the 18% range on the full year basis. This sets us up nicely going into fiscal 2016.

And again, some of this is predicated on comparable restaurant sales but I believe based on the progress we have made to-date, we are on track to achieve that plan that we laid out in the February of this year.

In summary, our operating initiatives are bearing success, restaurant margins are heading in the right direction, guest traffic per square foot is solid and is increasing and our organic restaurant expansion plan is on track. In addition, our balance sheet is strong.

Our repurchase activity is prudent and complement to our restaurant expansion and operating initiatives and we have a great senior management, corporate staff and restaurant level operating team which together have fostered a collaborative workplace environment that prioritizes a deep appreciation for our guests and supports our efforts to generate a hidden shareholder value.

That's it for our formal remarks. Operator, let's please open up the lines for questions..

Thank you. (Operator Instructions) We will go first to Nicole Miller with Piper Jaffray..

Thanks. Good afternoon.

Could you talk a little bit about the unit openings for next year, 10% operating week flow is that so close to 15 stores and if that's right, how did they fall out by quarter approximately, please?.

Hey, Nicole, its Greg Levin..

Hi..

So we are targeting – we are still targeting the 15 as of today, our pipeline is significantly deeper than that and so there could be some moment, where they kind of look at what we got lined up here, it looks like we will get three in, in the first quarter or so. And then maybe another 6 or so kind of coming in the second quarter.

So it will be somewhere in the neighborhood about 9 in the first half or so. And then I will probably say 6 in the second half and that's how we subject to change. So we usually know obviously, the current quarter and maybe six months out a little bit better, it can run into construction delays and other permitting delays..

I would say a good way to look at it also Nicole is, if we think about 15 restaurants and opening evenly throughout the year for our operating team. So that's our goal as a development team. I think about 26 operating weeks per restaurant over the 15 restaurants..

And then just obviously quick back at the envelope math that's about 2x pre-opening dollars first of this year, is that about right?.

2x pre-opening dollars?.

Yes. This year pre-openings are on 5.5 million, so it should be 10 plus million pre-opening next year..

Well, I think the way we probably continue to look at is….

That's right. We got – yes..

Yes. Cost is about 500,000 or some pre-opening. We are actually doing a little bit better than that this year with some of the change that we made and maybe get better than that going forward because of the new prototype.

But, from now, we are still looking at about 500,000 and again, 15 restaurants that puts you about 7.5 million, this year 11; its 500 would be about 5.5 million..

Excellent. Just a final comment, can you just tell us commodity items in your basket, I know prices changed, and mix has changed, it can move around, but the last I had with grocery, meats produce, seafood, poultry being all about 10%, can you just let's know if anything changed? Thanks again..

Yes. Nothing is too maturely changed there. I think with the introduction of our newer menu in February. We have seen higher seafood. Salmon is a bigger category for us, it was maybe a year ago or so and obviously, if we continue to see higher beef prices again, somewhere in that 8% to 10%. So there has really been no changes.

Again, chicken breast probably the largest had about 12% to 13%, ground beef is in that 8% to 10% range same thing with cheese that we use for pizza which unfortunately has been higher this year than we are anticipating..

Thanks again..

You're welcome..

We will go next to Matt DiFrisco with Buckingham Research..

Thank you. Looking at your average check Greg either Greg, it looks as though you not – I realize you didn't do the Brewhouse until February of 2015 with the new menu introduction. But, you did some discounting in the fourth quarter of last year that impacted your average check negatively.

Do you by guiding to not recouping some of that average check, how should we read into that? Is that that your – wouldn't that offset the incremental check degradation you are getting from the Brewhouse or are you expecting to return to some of that level of discounting?.

Matt, first of all, I don't think we expect to return to that level of discounting in this year's fourth quarter those are some of things that we tested last year. And we got good information on their returns, some of them worked maybe they are part of our arsenal of use in the future.

But, when I think about it going into the fourth quarter and I kind of line up the numbers here. We probably might get some check improvement over that timeframe.

And again, last year we didn't have the February menu rolled out, so if you think about some of the discounting, everything has drop down that check that would technically be gone this year, to some degree it might get offset by the February 2014 menu.

I also think that as we think – as we look at the fourth quarter, the ability to get some check improvement and maybe that drives comp sales, some of that's going to get unfortunately offset just by the way the holiday shifts..

Understood, okay. But there is, I guess….

Hi, Matt. This is Greg Trojan. I might have misheard you, but Brewhouse Burger is just rolled out in November of last year prior to the February menu. I thought I heard you say they weren't until February, but just to clarify that..

Right.

But they were at a lower price point, I think by $1 and then you lowered them to $7.99 later on in February?.

No. Now, the Brewhouse Burger came out in November, let's call it $2 or greater than our traditional burgers. Then in February of 2014, end of February, we rolled out 15 new menu items all basically priced around $10 or less. Some that were a little bit more less expensive than other entrées.

So really, when I think about the check, our average check once we get at February timeframe, I think that's where you start to see our check normalize or maybe even increase..

And then since then we have been continued to push on the value with things like starter salads and appetizers, some lower price appetizers. There are two major impacts than the Brewhouse Burgers in the February menu, but we are continuing to push in that direction with some other – in some other categories as well..

And just as a follow-up to your marketing comments. Can you talk a little bit about, we heard that you pulled some advertising weeks, is it correct to assume that you did not have as much advertising in the full quarter of 3Q than you did last year, it's just an aggregate because your spend stayed the same as a percentage of sales it appears.

Yet your, I heard some comments about September being choppy, and all I'm hearing is the taking away of weeks.

So where is that spending going or where did that extra marketing dollars get directed to that wasn't put in September?.

Look the shorter answer to that question is, we are looking at becoming both more targeted in local.

So our digital spend rate is higher year-over-year, and are targeted part of our discounting, I mean using our loyalty program also we are that part just even though our overall discounting was less, we used our loyalty program to become more specific and targeted in markets as well..

So and was….

So you are right. The average – the aggregate spend was the same, but it was spent in a better way..

It was spent differently over last year to be a little bit more in Q3 related to television some of that television by the way, and cost of television went into Q4, in that regard. This year as well, the dollars seem as a percent of sales seeing about the same, obviously we have more restaurant week.

But it is just allocated differently more towards digital, more towards the local restaurant marketing as well..

Well, I guess, I'm just trying to measure the optimism as far as the success or the lack of degradation that you are seeing in some of your major markets when you shut off the TV or lap some of those TV advertisers in the year ago.

Is it overly optimistic to assume that you might be able to cut deeper into marketing, while continuing to improve traffic trends?.

I don't know if we know the answer to that because we still continue to work through marketing looking for the best ROI. If I have to look at our trends which actually were a little bit different than Knapp-Track, I think September improved over August as I mentioned, September wasn't as strong as August in that regard.

So I'm not sure, I can draw quite conclusion that you can reduce marketing per se and generate maybe the type of top line sales. Obvious it's kind of have to have the right ROI. But again, looking at my formal comments August less stronger than September, a little bit different than the industry.

We know specifically in September that we went over some big marketing spends last year in regards to the television side of it. And we did see more choppiness there. So it's not quite as maybe black or white as maybe I made it sound or maybe you are thinking..

Okay. And last question, I promise, when you start opening up in the Northeast I heard that comment in your press release where you say you sort of have a platform now from the Mid-Atlantic to sort of go into the Northeast. I think your first store might be coming soon in NYAC, New York.

What type of margin structure would those stores be coming into the base obviously your core California has high labor already, you do have a high Texas presence and then you have very favorable business environment, how should we – is there anything that you want to call out that we should know when you model in some of these stores coming in, the obvious would be volumes I think would be big considering they are coming into high income areas, is there anything else that we should consider, whether its travel expenses with pre-opening or G&A or anything of that nature that might be different?.

Matt, not at this current time as we continue to push through our annual operating plans for next year. We will layer in and travel to those locations that might impact G&A per se. But, our goal as we've always said is to continue leverage G&A as we grow the business.

When we lay out these new restaurants we sit down with supply chain; we sit down with talent development; we sit down with the brewery team and kind of model out all those costs. And frankly, they are not that significantly different than the cost of our other restaurants..

In fact Matt, it's just unbalanced, our proposition of tip credit state development versus since we are doing less in California actually we are doing none in California in the next year is going to help us unbalancing it from a margin structure perspective..

As the no development in California helped your comp as well as far as cannibalization or lack there off?.

I'm sure based on the fact that those restaurants are cannibalizing the restaurants have slowly moved on from their initial honeymoons, have the opening of new restaurants that we got some benefits there. But, when I look at California, we talked about it before.

When we rolled out the new menu, and we did our television advertising back in kind of the March timeframe with the new branding. We saw a market improvement in California, and that seem to have held up throughout the rest of this year..

Thanks very much..

And we will go next to Brian Bittner with Oppenheimer..

Thank you. Congrats on the strong margin performance guys..

Thank you..

You have a 6% operating margin target for 2016, it sounds like you are pretty darn comfortable with that as we stand here to-date.

But, when I think about the strong leverage that you got particularly this quarter on such small against to a sales increase, I kind of want to think about 2015 and is there past to get to that 6% operating margin, goal that you have in 2016, so pulling a forward year under a certain comp scenario?.

Well, I think Brian, you hit it up on it at the end there, it's that comp scenario. When I look at our numbers, I don't want to go through a pure history lesson here.

But, if you look at BJ's and go back 4 or 5 years ago, you can see the – you can see how we are actually performing versus maybe 2008, 2009 which were kind of in the recession years and we did kind of flattish comps, which is where we are today.

And we are pretty similar in regards to some of those things, we obviously have the higher marketing spend, but that's little bit of an impact there. And we add to a higher depreciation and amortization which for addressing through this smaller restaurants, so that's going to take some time to come through.

You pulled that aside though and you start to think about the fact that if we can get some comp acceleration going through here with our Project Q and cost containment initiatives that you put in place there.

There is the ability to enhance margins greater and I think even Greg Trojan mentioned that kind of in the formal remarks as well as in our press release today. So there is that capacity there, it really comes down to what people think about comp sales for next year.

I still take a very conservative approach, we are still seeing kind of a slower growth mature industry as much as we are seeing the nice comp sales by some of our peers out there, they are seem to be doing it all on pricing. We want to be doing, if we are growing guest traffic and minimizing pricing as best we can.

We have always said that pricing is the last lever we want to go to. And I think there is opportunity still in our business to continue to be more efficient and then we will look towards pricing if we could drive comp sales I think maybe there is ability to move these things out further and get to our numbers maybe quicker than we anticipated.

But, I think where we are today and what we laid out in February, we are executing against and frankly, we are executing against maybe a little faster than people thought. So we are pretty – we are happy as to where we are going, we are definitely not satisfied..

That's helpful. I guess let me just ask a little more directly.

You know what pricing like would it be in 2015 and you know what mix is probably going to be in 2015, what type of traffic would you need to hit your 6% 2016 margin go in 2015?.

I don't know the answer to that one as of today. I mean I really don't. We are not putting a big comp sales on next year. I think we still are in this kind of mature marketplace right now, we are not seeing huge casual dining traffic growth..

So Brian….

Okay..

Sort of reinforcement what Greg said is, we rather be in a position of planning for a continued frankly difficult customer – core customer economy. It's still very choppy out there if you look at consumer segments in our kind of price point and core middle there consumer.

So we rather stay a little conservative and pessimistic and work hard on growing our business the harder way frankly and if the headwinds surprise us we will get there sooner to your point. But, we are not accounting on it..

And couple of things to think about Brian as well, we comp up next year in regards to opening 15 restaurants from 11. They didn't have pre-opening is going to be a higher percentage as sales was this year that's going to impact margins. Depreciation and amortization that number is going to take a while to go down.

I think you can start looking at BJ's on an EBITDA basis on that cash flow, you probably be more impressed maybe if how the margins are moving..

Make sense. Thank you..

We go next to Jonathan Komp with Robert W. Baird..

Hi, thank you. Greg Levin, if I can maybe just ask one more question about the margins, I look at the year-over-year improvement for the labor and the other operating lines both of those seem to be improving or the rate of changes even improving in the most recent quarters.

And I know the traffic has improved but can you maybe just talk a little bit more how you are seeing additional layers of some of the cost containments efforts that you are doing starting to shine through or the teams just getting better in operating some of those or what's going on there?.

I think the combination of both. If I take labor specifically lot of the Project Q initiatives really didn't start to role out here until the third quarter this year. By our nature, we are a conservative group and I know that can be frustrating from a Street perspective at times.

But we are not going to do anything that degrades our business to our guests. Ultimately, its about driving guest count. So we work through some of the things on Project Q, we test them in our restaurants. We make sure they work the right way and they can be executed right the way and don't have any impact from our guests dining experience.

So some of those start to come through a little bit here in Q3 and we have to make efficiencies in that labor number from that standpoint. On our operating occupancy cost, I don't think there is any – I think its accelerating or anything from that standpoint.

I think its kind of where we planned it maybe gotten a little bit better but there haven't been any major cause differently than what we have expected..

Got it. An helpful perspective. Thank you.

And then, another question for Greg Trojan maybe just piggybacking on some of the early discussion on pricing, but when I look at your traffic performance, its encouraging to see it turned positive this quarter, after a couple of years it had been negative and that follows four quarters where your check as significantly lagged the overall industry check growth.

So I wondered, as you look at the results of the last few quarters and the traffic inflection that you have seen, is that all change your view on the check growth going forward and is there any internal discussion or thought about maybe further eliminating the check growth for more an extended period?.

Well, I would say we are committed to continuing to improve the value equation for BJ's as a concept. We will be lapping two of the major guest check events if you will being Brewhouse Burgers and the cumulative number of items that we rolled out in February Jonathan. So that will help in terms of future ability on guest check growth.

And we are going to continue to look at other opportunities to improve value, however, but I think those were rather significant in terms of scale in major category. So it – if anything it reinforces our commitment that continue to be leaders in value of anything else and we will always try to strike that out.

Look we are trying to grow guest check in an absolute basis. But, we knew we are going to be sacrificing effective pricing or guest check growth with these significant rollouts. But they have been tremendously popular and successful and we would rather grow traffic at the end of the day than grow through pricing or guest check..

Got it. Thank you..

We will go next to Will Slabaugh with Stephens Incorporated..

Yes. Thanks guys.

I wondered actually about the traffic, you saw turn positive in the quarter, and this maybe tough to break down, but did you feel like it was more to do with the menu item introduction that's really taking hold, is it an execution, free of service issue or some combination of that you maybe able to break down for us?.

Yes. We don't – all we can tell you Will is, we can – we would have to interview every guest obviously, so it had to determine with driving frequency or new use obviously.

But, I can tell you the way they are committed to getting years by complexity reduction, the reason I say that is, we are not degrading fundamental, in fact we are improving on fundamental guest service metrics here. So I do think it really is a combination of both. So our speed of service, we know our average duration is getting shorter.

Our average cook times are getting quicker. So and we are actually I mentioned that reinforce we put a little bit of labor back into the front of our – house of our restaurants as well. So I do think our service and quality are improving. And but I think value leads the way if you were to ask me.

I think value combined with the thing that a lot of folk don't talk enough about is, the items we've rolled out truly are compelling from a taste profile perspective. And they are differentiated in terms of our Chicken Mediterranean Tacos continued to build and are probably at their highest incidence rates since we roll them out last February.

So our new solids are continuing to do really well. So that tells me that guests are coming back and they are ordering these new items because they can't get them else where and that they are very compelling values.

So again, it's impossible to allocate between the two but I think those are the best and most important reason is value in compelling offerings..

That's helpful.

And just a quick follow-up if I could, do you know what the mix is of this new item that you have introduced over the past year is the lower price under $10 items?.

I don't know if we actually have it, 10% to 20% of our…..

I don't know it's been combined way..

Yes. We tend to look at it in categories so first as Greg was talking about the Mediterranean chicken tacos it actually lead this category. I think our killing breakfast is about solid is number two in that category of solid. But we actually haven't looked at how they are within the entire menu mix of the company. Good question, Will..

Got. Thanks guys. Congrats on the quarter..

Thank you..

We will go next to Jeff Farmer with Wells Fargo..

Thanks. Good afternoon guys. Wanted to follow-up on some of the commodity questions, most of them you guys performed pretty well, I think there was a little bit of fear even going into this print that that there might be something to be worried about really there was not.

But in terms of understanding that a little bit, so I think you pointed to 2.5% commodity inflation. I think you made a reference to ground beef and cheese. But looking at our deck, your annual stay deck, it looks like cheese was roughly 7% of COGS, dairy another 4%, I think there are both spots, you obviously had a little bit of beef exposure.

So you put all those pieces together and that roughly 2.5% commodity inflation on the basket just seemed like a pretty low number.

So just out of curiosity, how are you able sidestep some of that pretty dramatic inflation that some of your peers had seen in the Q3 or at least largely sidestep?.

Actually Jeff, I don't think we sidestepped it to be perfectly honest. Don't forget we take we took menu pricing around July 1st. And if you think about we took our menu pricing and we didn't see it really kind of come down to the bottom line, we kind of held our own to that regard. So it did come through.

I think one of the bigger items that we don't mention, as much I did mention that I think when we call out the question about our total mix, we have a higher see through mix maybe we had a year ago because of this many have rolled out in the February timeframe and things like Cherry Chipotle, Glazed Salmon are just rocketing up in regard to number, rocketing up as in regards to entrées being a high seller course.

That's got a little bit higher food cost maybe than certain other items.

So there is a couple things that play in there salmon is a little bit more expensive than I think chicken is year-over-year from us in that standpoint, still a little bit higher in the shrimp cost and those are coming down what we locked in a lot of shrimp at the end of the fourth quarter last year.

So I'm not sure we survived it any better than anybody else, it might have just seen coincidence when we rolled out the menu pricing.

And when I do look at the numbers, I've seen it sequentially go up through the quarter meaning July, August, September, our cost of sales have come up and that's one of the reasons that as I think about the fourth quarter, I could see that number up a little bit also due to the fact that in the fourth quarter you tend to get people that want to try entrées, more the celebratory like items, so they will send in a plate protein items that will increase our cost of sales a little bit, should increase our per person average maybe a little bit in that regard versus Q3.

So might help labor a little bit that's when I think about margins for the fourth quarter. But at the end of the day, I think we saw that pressure and I think maybe we just had a little bit of benefit when we rolled out pricing..

That's very helpful. And then on a completely driven topic, I think and correct me if I'm wrong.

I think you loyalty program is – did that account for about 11% to 12% of your transactions right now that in the ballpark?.

Yes. That numbers, I don't think we gotten that specific in past, yes..

So should we not say that's about, right, a mysterious about the evolution of that program, future opportunities as you move forward, that seems like a pretty big number. It seems like you could do a lot with that group.

So just curious what's your thoughts are there?.

Look Jeff, if we're continuing to – we're using loyalty more as a – we have a lot of email address to work with. And we see great activation when we do everything from advertiser, beer dinners to offer free pizookies to a variety of both incentives and thank yous. And I love being able to do that to thank our most loyal guests.

So we're seeing good activation rates and we're also happy that the number of loyalty guests continues to increase rather dramatically actually and we nearly doubled the number of loyalty guests versus where we are at last year.

So we don't – there is still ways to go and really optimally utilizing the program, but we think of it much more as an ability to target and to even more specifically market to guests giving their preferences and demographics and we're going down that road. And we're optimistic about using it more.

And we love the fact that we continue to pick momentum up not in terms of people engaging with the loyalty program, which has helped by the way with to our app. And our technology that we unveiled this year, I think has been instrumental in that..

Thank you..

We'll go next to Jeffrey Bernstein with Barclays..

Great. Thank you very much. Two questions maybe one just specific to the quarter just ended.

On that operating your occupancy line and then you gave some color but it seemed like again just breaking into the components, if the marketing dollars are relatively stable and I think Greg you mentioned that there were no big drivers to that line in terms of savings. And you mentioned, it goes down 7% in terms of operating week year-on-year.

So I'm just wondering but the comp relatively flat just doesn't seem like enough to drive you to leverage.

So what was the big driver of that 7% reduction and that's – how you think is sustainable or with the things perhaps in the year ago period that let with looking still favorable?.

Jeff, we kind of mention a little bit on the formal remarks that it's a Bottoms Up basically – a bottoms up small dollar approach. There is not many homeruns out there. We're kind of playing singles and moving the runner over from first base to second base. We put in demand management systems around electricity.

We've gone and looked at – we talked about this at our analyst day, we are rolling out at New China in glassware and silverware and that was the fact that we are sourcing it domestically, we can source it outside of China and bring it over, but it was going to take a while to come and place there.

We're putting some centralized planning around our facilities in repair and maintenance set up in that regard. We would work with our vendors in regard to linen napkins, janitorial contracts. It's a lot of small things. There is not gee last year, we incurred X dollars, we were able to get rid off it this year. So I think there is ability to hold it.

As I mentioned, that's our goal there is to make sure we hold it moving forward, continue to monitor it. One of the big things that we do at BJ is we always done it and it's the best way for us to look at it. We don't get caught on percentage sales. We look at the linen cost per guest. When normally guests come in and we know we will take for linen.

So we can wind up all those restaurants and see which restaurants seem to be using too much linen based on the guests’ counts coming here. We know how much janitorial chemical should be per guests in that regards. So it really kind of comes down to a lot of hard work by our operators they suggest a lot of great ideas to us.

One of the things that we really worked on this year is to get with our operators and have them kind of come back and doesn't say hey why don't we do this, or have we thought about this and it's worked out well for us. I think as we said earlier, as well we go through we have to be safe.

We want to make sure we are not taking anything away from the guests. So it's probably why they got maybe a little bit more acceleration in Q3 and Q3 versus prior quarters because we're going to test them this stuff in the restaurants first..

No, I mean for a lot of small things that was 150 basis points a leverage that's very impressive. And then the other point I was going to ask you, in terms of the – I know you haven't finalized your plans to next year, but you gave tremendous amount of detail for having that finalized.

But just wondering I mean you mentioned you want to kind of do it the tough way, you're going to assume the consumer environment remains challenged into next year would seems like the prudent approach, but based on all those line items of detail like what's the top of that model what's the comp assumed to arrive at all that granular line tem detail I mean presumably you have something in there, I'm just wondering whether sustaining kind of up a half point or – ballpark, what's the comp assumption that leads you to that granular details for each of those line items?.

Well, I think the way we can continue to look at it is worth thinking were going to be summers like we are like now as we think about our business..

Okay. So that would be very modest sub-1% as the way you are now kind of ballpark at the assumption that generates all those details..

It something that we go into where the difference comes in is, we look at all that stuff and look at it versus mix versus guest traffic versus pricing look as much as I would love to be able to sit here and talk about getting comp sales of 3% all on pricing, guess what, on pricing about 90% of that chip slowed down at bottom line maybe 85% of that.

So you got very different metrics in regards to how your margins were outpaced and how comp sales come through. If we comp sales like we are getting it today. We have to do it by being more efficient and more effective in the middle of our P&L to get the throughout which we have been able to accomplish.

If we have pricing, tier-pricing in the sense our average check is growing, you see margin expansion on top of the fact that we are getting the efficiencies of what we are doing. So as – as I put together our plan, I work with my finance team which is the frankly golden standard in regard to people I work with.

We put through all of those assumptions in regards to how that's going to flow through. And ultimately I think in today's environment you still want to take a very modest approach and that's kind of what we lined up on our three year plan and we are kind of sticking to that approach really..

Understood now. Thank you very much..

You are welcome..

We will go next to John Glass with Morgan Stanley..

Hey, guys its Courtney in for John. And just two quick questions, first, I think you said previously that the California minimum wage impact would be about 70 bps on a run rate. And then you mentioned today there was only 30.

Are you seeing less pressure than you are expecting or is that just from the productivity initiative?.

Hey, guys its Courtney in for John. And just two quick questions, first, I think you said previously that the California minimum wage impact would be about 70 bps on a run rate. And then you mentioned today there was only 30.

Are you seeing less pressure than you are expecting or is that just from the productivity initiative?.

It's two-fold there, Courtney. I think we talked about it being 60 to 70 basis points prior to menu pricing. And then I had to pull up my transcript from the last call but I think we said in menu pricing we are offset about 30 bps for that.

So I think when I guide this last in the second quarter I thought labor would be closer to 36% because I didn't know the all the Project Q initiative is coming through. And now is based on about 30 basis point increase or so after pricing..

Okay. Got you. And then, just in terms of the buyback I think you got it with low 27 million shares for next year.

Should we expect this similar piece as you did this quarter or will it be a little bit later?.

Okay. Got you. And then, just in terms of the buyback I think you got it with low 27 million shares for next year.

Should we expect this similar piece as you did this quarter or will it be a little bit later?.

Yes. We don't discuss what we are doing in regards to our buyback except on these quarterly calls. We think it's a good use of shareholder capital. We think where our stock prices – it makes sense for us to be opportunistic.

So we don't necessarily have a plan in place saying that every year we are going to get 5% of our earnings growth by returning a capital back to our shareholders. And it's more about the things that we are doing. We believe in our strategy, I think it proved itself this year.

And we know based on that strategy where we plan to get to, I mean we can lay that out back in February. And I think we are executing and frankly, if the market doesn't want to believe in that strategy that's fine. We will go ahead and be buyer of our stock..

Okay. Great. Thanks guys..

Okay. Great. Thanks guys..

We will go next to Chris O'Cull with KeyBanc Capital Markets..

Okay. Thanks guys.

Greg, I know you guys are looking at reducing cook times for some of your core items, can you give us an update on maybe that project and if there are any initiatives right now that are improving throughput?.

There are quite a few Chris, I mean this isn't a one change kind of thing. I mean we are reviewing the process of everything on our menu. And I meant what I said in the conclusion of remarks most of these ideas have come from folks that are working in our restaurants everyday.

So that continues to be the case where we are looking at what we think to be a big help in terms of our pizza process that is in test and are looking to reduce oven cook times with obviously one of our most important products.

So it really is spread throughout our menu and as we introduced new items, we are being very conscientious about one of our criteria of looking at product introductions is, okay how complex is it, is it using, first of all, new ingredients, are we going to bring new items to the line.

And then, from a process perspective, they would use different multiple stations on our lines and overall grade our culinary development on a complexity index. So to speak, so it's not just our existing item, it's what we're introducing and changing as well as we introduced new items..

Will the changes to the – some of the pizza that you mentioned or any of these changes will they require new equipments or any type of major investment rollout to the larger group of stores..

No that we are not contemplating any changes to our line other than, we're looking hard at that in terms of our new prototype and being more efficient in the line. But we're not -- we're not altering cooking methods here and at this time point and that's something that, we're looking at different alternatives there.

But that's not part of the thinking up to do in terms of what we're going out after in the near-term..

Okay.

And then one last, when markets benefited from TV last year, I thought you mentioned in Texas markets and then are there any other mismatches to the balance of this year you're anticipating, because of TV being all not on this year?.

Yes. They were California and significant Texas markets we're overlapping a year ago..

And then we're past that now through October, right?.

That's correct..

Okay.

And there is no more in November, December?.

In terms of overlap, we're looking at some limited TV and in a market or two that would run incrementally, so would lap in the 2014 over 2013 version but there are no negative overlaps for the remainder of the year..

Okay, great. Thanks guys..

Okay, great. Thanks guys..

We'll take our last question from Sharon Zackfia with William Blair..

Hi, and under the wire, just a couple of quick questions, I was curious I didn't think I heard this, but I was wondering if the app had helped your lunch day part at all, if you saw the improvement in traffic kind of similarly across dinner and lunch?.

I would describe the up churn is helping us in our core customer group and then on the loyalty front. It is not at this point a driver, it's not driving our traffic increases at this point.

We're pleased with the base and where we've started here, but we're in a lot of ways changing fundamental behavior, the idea of people ordering ahead and using an app and then dining in the restaurant is still, is still a different way of thinking about how to use casual dining.

So it has helped our engagement tremendously and the recruitment on the loyalty front we have some very heavy users of that app. We're still working on and anticipate steady penetration on that front. I'm sure I'm answering your question, but that would be my general thoughts on..

No that's helpful.

So you are excited to be relatively slow adoption is that fair?.

I think so, I think it's a benefit to everyone as more alternatives are out there and it becomes more common place for people to think about the option of even paying with their phones et cetera. So we're happy to be ahead of the curve on this front, but it wasn't our expectation that would be a significant driver in the near-term.

And we're going to continue to add some pretty interesting functionality, we are in the test days of that currently that, we think we'll make some of these features more compelling.

So again, we don't have outside expectations, but we like how people are engaging with it and we think it's great for the brand and over time will be a driver of efficiency.

I mean one of the benefits we have given the capacity constraints at times that we have in our busy restaurants is, I think we spend the benefit more than other concepts and that it will be speed – it does – we know it does speed the duration of service here right.

So there is more upside for us for getting this penetration increase on apps like this than perhaps others..

Okay. And then just a quick question for Greg and I apologize if this was already asked, I had hopped off for a minute, but I heard the comp was up, I think 25% so far quarter-to-date and I heard you said about Halloween and New Year, but I also remember your sales really fell off last year after October.

So I don't remember if you quantify the weather impact last year, I mean are there things that work in your favor after October in terms of the comparisons on weather or anything of the like?.

I don't have this specific, I think if I pulled up the Q4 call I probably do. The first two weeks of December I think we commented a lot about in our Q4 conference call.

There is two things there I think some storm came through Texas and just a shift of Thanksgiving later last year everybody is expecting that real holiday rush that you get, it really never came in. Those were the two weeks, or probably the biggest challenge to us in Q4 of last year.

To your point, I think at this time last year, we were only down about 0.5% or so in October three weeks through and then we finished down in the 2% range. So it does get a little bit easier if we talk about it from a year-over-year perspective.

To me when I look at that I think, yes, it gets easier and then all of a sudden unfortunately it gets clipped by this too big holiday flip flop..

Okay. All right. Thank you..

You are welcome..

That does conclude today's question-and-answer session. I will now turn the call back to Greg Trojan for any additional or closing remarks..

Thank you, operator. Just thanks everybody for your time and as usual if there is any follow-up, you can get hold of Greg in the next couple of days or into next week..

Thank you everyone..

Thank you..

This does conclude today's conference. We thank you for your participation..