BJ's Restaurants, Inc.

Good day and welcome to the BJ's Restaurants, Inc. second quarter 2024 earnings release conference call. All participants will be in a listen-only mode. Should you need assistance, please signal a conference specialist by pressing the star key followed by zero. After today's remarks, there will be an opportunity to ask questions. To ask a question, you may press star then one on your touchtone phone. To withdraw your question, please press star then two. Please note that this event is being recorded. I would now like to turn the conference over to Ronna Schirmer, Director of SEC Reporting. Please go ahead.

Thank you, Operator. Good afternoon, everyone, and welcome to our Fiscal 2024 Second Quarter Investor Call and Webcast. After the market closed today, we released our financial results for our Fiscal 2024 Second Quarter. You can view the full text of our earnings release on our website at www.bjsrestaurants.com. I will begin by reminding you that our comments on the conference call today will contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Investors are cautioned that forward-looking statements are not guarantees of future performance and that undue reliance should not be placed on such statements. These statements are based on management's current business and market expectations, and our actual results could differ materially from those projected in the forward-looking statements. 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. We will start today's call with prepared remarks from Greg Levin, our Chief Executive Officer and President, and Tom Hodick, our Chief Financial Officer, after which we will take your questions. And with that, I will turn the call over to Greg Levin. Greg?

Thank you, Rana. BJA has delivered another quarter of restaurant-level margin growth and adjusted EBITDA growth of 13% over the same period last year. These solid results, again, highlight the benefits of the strategies we shared at our investor day in November. Our approach focuses on driving sales through our familiar made brew house fabulous culinary initiative, increasing and enhancing our brand awareness, improving our operational excellence through our people initiative centered on our gracious hospitality and enhancing our ambiance through our remodel initiative. Additionally, our holistic top line approach to driving sales is complimented with our margin expansion initiative through productivity and cost savings enhancements. These strategies are working and continue to establish a solid foundation for financial and restaurant growth and enhancement of shareholder value. We finished the quarter with total sales of 349.9 million, while comp sales were slightly negative at 0.6%. However, throughout the quarter, we saw month-over-month improvement in comp sales driven by guest affinity for the BJ's concept and choosing BJ's to celebrate important moments like Mother's Day, Father's Day, and graduations. Reflecting this strong guest affinity to the BJ's concept, 107 restaurants broke either daily or weekly sales records in Q2. Furthermore, our restaurant margins continued to expand and rose to 15.5%, representing an increase of 100 basis points from the prior year. Our restaurant-level cash flow per operating week was approximately 19,200, just slightly behind fiscal 2019's restaurant-level cash flow per week of 19,300. So while percentage margins were still behind 2019's levels, we closed the gap on the dollars per restaurant week. Adjusted EBITDA in the quarter rose to 36.1 million, an increase of 4.3 million, or 13% higher than prior year. Our teams did an amazing job focusing on driving throughput in our restaurants this past quarter as we rolled out the second phase of our gracious hospitality people initiative. If you recall, the first part of this initiative focused on new server scripting and was launched last year. In April, we initiated our enhanced service model, which balances the number of tables per server, food runners, and quality fast expediter positions in our restaurants. These changes allow servers to get to our guests sooner so we can get orders into the kitchen and the bar faster. It also frees up our managers so that they have more time to be in the dining room to ensure we are delivering the gold standard level of operational excellence for our guests. And it elevates table turnover, which in essence expands the capacity of our existing platform. The goals of these changes are to improve our pace and throughput in our restaurants and further improve our already high standards of service and hospitality. Based on our consumer research, we know that pace and throughput is another opportunity for us that will drive top line sales. In addition to enhancing our service model, we are also evaluating and testing other technological enhancements that will help us further improve throughput in our restaurants. These include changes to the way our kitchen display system informs our team when to fire or begin cooking an item, to changes to our server tablets that can inform our team members where the guest is during their dining experience with BJ's. I want to thank our team members for diligently implementing these service model changes. It was a large undertaking, and our teams executed it flawlessly, knowing that these changes deliver a better guest experience, which ultimately continues to drive top line sales. Our next gracious hospitality phase will be new hourly training for all restaurants, and that is expected to roll out later in Q3 and in Q4. This will include additional side-by-side training for all new hourly team members. Overall, we continue to expect these initiatives to take the better part of Q3 and Q4 of this year and have a slight impact on training labor for these quarters. These investments in our team are critical elements to driving top line sales since every additional sales dollar leverages the six elements of our restaurant's cost structure. As we've said on past occasions, the best way for us to improve our restaurant level cash flow is by driving sales. and we have a proven playbook and strategies that are helping us meet this goal. We also continue to execute against our remodel initiative that is similarly driving improved sales and traffic. We have now completed 19 remodels year to date, and we expect to do approximately five more this year. By the end of this year, we will have remodeled approximately 70 restaurants since we began this initiative. We will finish fiscal 2024 with approximately half of our restaurants either recently remodeled or one of our newer prototypes. With the success of our remodel initiatives, we have been effectively and prudently deploying capital. To date, we have opened one new restaurant in Brookfield, Wisconsin, and we expect to open our next two restaurants in August and September of this year. Both new restaurants will feature our new prototype that will cost approximately $1 million less to build, bringing the investment cost down to around $6 million on average, and that's net of landlord allowances. This new prototype also provides greater operating efficiencies and higher and faster returns, while incorporating our learnings from our remodel initiative, which includes lighter colors and a more contemporary bar featuring the 130-inch television as the focal point. Our long-term model for our business continues to be to drive top line sales in this eight to 10% range through a combination of five plus percent unit growth and comparable restaurant sales in the low to mid single digits. However, as we've communicated previously, we are going to do so with the right quality and at the right investment cost to continue to drive strong new restaurant investment returns that deliver shareholder value. At the same time, we continue to expand margins through sales leverage and productivity and savings initiatives. Our continuous focus on optimizing the business and our solid financial cadence results in significant free cash flow, which we will translate into enhanced shareholder value over the medium and longer term. Now, let me turn it over to Tom to provide a more detailed update for the quarter and the current trends. Tom?