Good day, everyone, and welcome to the Chuy's Holdings Fourth Quarter 2021 Earnings Conference Call. Today's call is being recorded. At this time, all participants have been placed in a listen-only mode, and the lines will be open for your questions following the presentation. On today's call, we have Steve Hislop, President and Chief Executive Officer, and Jon Howie, Vice President and Chief Financial Officer of Chuy's Holdings, Incorporated. At this time, I'll turn the conference over to Mr. Howie. Please go ahead, sir. Thank you, operator, and good afternoon. By now, everyone should have access to our fourth quarter 2021 earnings release. If not, it can be found on our website at chuys.com in the investors section. Before we begin our review of formal remarks, I need to remind everyone that part of our discussions today will include forward-looking statements. These forward-looking statements are not a guarantee of future performance, and therefore, you should not put undue reliance on them. These statements are also subject to numerous risks and uncertainties that could cause actual results to differ materially from what we expect. We refer all of you to our recent SEC filings for a more detailed discussion of the risks that could impact our future operating results and financial condition. With that out of the way, I'd like to turn the call over to Steve. Thank you, Jon. Good afternoon, everyone, and thank you for joining us on the fourth quarter earnings call today. I hope everyone is staying safe and healthy. Our solid fourth quarter results are a direct testament to the tenacity and resilience of our team members in the face of uncertain economic conditions and the COVID-19 environment. Not only did we grow our top line by over 25%, but our continued focus on cost management and operating efficiencies have allowed us to improve our profitability by 100 basis points compared to last year and 700 basis points compared to 2019. As we mentioned previously, we continue to anticipate approximately 300 basis points-350 basis points of margin improvement over 2019, even after factoring in the current inflationary pressure. Comparable restaurant sales increased over 20% compared to 2020 and decreased 0.7% compared to 2019. It's worth noting that our fourth quarter 2021 performance was negatively impacted by the timing of Christmas compared to fiscal 2019. Excluding this Christmas shift, our fourth quarter comparable restaurant sales would have increased approximately 0.2% compared to 2019. All in all, we are pleased with our business trajectory and how our key pillars of safety, convenience, and value continue to provide a strong foundation for our operations. Nevertheless, we will remain nimble in the current environment, and we are focusing on several key aspects of our business to help us manage the external challenges. First, let me touch on staffing since it's a topic on everyone's mind. As I've noted before, our people are the most valuable asset, and retention is something deeply rooted in our culture. We have historically prided ourselves on having a very low turnover rate, and that continues to be the case. In fact, our management and hourly turnover are some of the best in casual dining sector and were lower in 2021 than pre-pandemic, 2019. If you recall, we paid out $1.6 million retention bonuses for our managers during last year's second and third quarter as a thank you for their efforts of being in the line of fire to serve our guests every single day. We believe that when you stabilize your management team, you will also stabilize your hourly team members, which generally leads to higher performing stores. We have found that to be the case in practice. To further capitalize upon our hourly retention, we continue to pay referral bonus to our team members, rewarding them for bringing new people they would enjoy working with and looking for other creative ways to increase staffing within our restaurants. As a result, we continue to believe that we are in good position with regard to our overall staffing in the current tough labor environment. Switching to menu development, our guests come to our restaurants to enjoy our made from scratch food and drinks at a tremendous value. To that end, starting earlier this month, we have decided to bring back eight items into our menu, primarily combination plates. In addition, we are also in the process of introducing a new happy hour menu this month, which has been proven very popular with our guests in the past. We consider these menu additions to be a good mix of items with excellent margin profile and little added complexity to our kitchen operations. We should bode well for our top line growth and profitability as our traffic returns to more normalized levels. Turning to off-premise, we are pleased with our 28% mix during the fourth quarter. While we have seen a spike into the 30%+ range with the spread of the Omicron variant, we continue to believe that our menus can maintain a low- to mid-20% off-premise mix longer term. We also look forward to expanding our catering offerings. We ended 2021 with catering in 14 markets. While we postponed adding catering in additional markets at the onset of the pandemic, we are now planning to add catering to the remaining of our system by the end of 2022. Another important aspect we are currently focused on is our marketing effort. As you remember, our marketing spend came down during the pandemic. In conjunction with the new addition to our menu, we are slowly ramping back up in our marketing initiatives to 2019 levels. For 2022, we will heavily utilize digital media, including our recent use of TikTok to not only introduce and highlight new menu items but also as a recruiting tool. Other digital marketing initiatives include an organic influencer program on Instagram, YouTube video advertising, promotional advertising partnership with DoorDash. A launch of our new website later this year. All of which are designed to reach a broader audience group and allow us to better connect with the new and returning guests. Lastly, let me quickly discuss our development for 2022. For 2022, we are now planning to open between five to eight new restaurants, the majority of which will be in the back half of this year, due to the ongoing labor shortages and supply chain issues that have negatively impacted the construction process industry-wide. With that, I'll now turn the call over to our Chief Financial Officer, Jon Howie, to discuss the fourth quarter results in greater detail. Thanks, Steve. Revenues for the fourth quarter ended December 26th, 2021, increased 25.4% to $98.7 million, compared to $78.7 million in the same quarter last year. The increase was primarily related to growth in customer traffic as we continued to relax indoor dining capacity restrictions for all our restaurants, as well as $3.6 million of incremental revenue from new restaurants opened during fiscal 2021. For the fourth quarter of 2021, our off-premise sales were approximately 28% of total revenue, compared to approximately 33% in 2020 and 14.6% in 2019. In total, we had approximately 1,248 operating weeks during the fourth quarter of 2021. Comparable restaurant sales increased 20.8% during the fourth quarter versus last year, and included a 19% increase in average weekly customers and a 1.8% increase in average check. Comparable restaurant sales declined 0.7% versus 2019. However, as Steve mentioned earlier, this decline was primarily due to the timing of Christmas as compared to fiscal 2019. Without that shift, comparable sales would have increased 0.2% versus 2019. Turning to expenses, cost of sales as a percentage of revenue increased 140 basis points to 25.8%, primarily due to commodity inflation of approximately 9.7%, partially offset by a decrease in the mix of Fajita Family Kits sold as compared to the prior year. Commodity inflation during the quarter was slightly higher than we originally anticipated, driven by higher beef and chicken costs. As we look ahead, we expect our first quarter 2022 commodity inflation to be in the mid- to high teens as compared to 2021. Labor costs as a percentage of revenue decreased approximately 60 basis points to 29.1%, primarily due to sales leverage on management labor, partially offset by hourly labor rate inflation of approximately 12.6%, driven in part by increased overtime. As labor challenges persist, we expect hourly labor inflation to remain at elevated levels of approximately 12%-14% for the first quarter of 2022 as compared to 2021. Operating costs as a percent of revenue improved 30 basis points to 15.4% due to sales leverage on fixed restaurant operating costs. Marketing expense as a percent of revenue decreased 10 basis points to 1%. Our occupancy cost as a percentage of revenue decreased 140 basis points to 7.3% as a result of sales leverage on fixed occupancy expenses, partially offset by higher percentage rent. General and administrative expenses increased to $6.1 million in the fourth quarter from $6 million in the same period last year, driven by higher insurance premiums and technical services, partially offset by lower management salaries and performance-based bonuses due to the timing of the reinstatement and makeup of reduced management salaries and bonuses during fiscal 2021. Or excuse me, during fiscal 2020. As a percentage of revenue, G&A decreased 140 basis points to 6.2%. In summary, net income for the fourth quarter of 2021 increased 236.3% to $6 million or $0.30 per diluted share, compared to $1.8 million or $0.09 per diluted share in the same period last year. During the fourth quarter of 2021, we incurred $2.5 million or $1.9 million net of tax in impairment, closed restaurant and other costs. Taking that into account, adjusted net income for the fourth quarter of 2021 increased 104.2% to $7.9 million or $0.40 per share per diluted share, compared to $3.9 million or $0.19 per diluted share in the same period last year. Moving to our liquidity and balance sheet, as of the end of the quarter, we had $106.6 million in cash and cash equivalents, no debt, and $35 million of availability from our credit facility. During the fourth quarter of 2021, we purchased approximately 265,000 shares of our common stock for a total of $8.4 million. In total, we repurchased 461,500 shares of our common stock for a total of $14.5 million for the full year of 2021. However, subsequent to the fourth quarter of 2021, we repurchased an additional 546,747 shares of our common stock for a total of $15 million. As of February 17th, 2021, we had approximately $26.6 million remaining under our $50 million repurchase program, which will re-expire on December 31st, 2023. Lastly, while we are still not in a position to provide our usual financial guidance, we will give you some directional metrics for fiscal 2022 that I hope will be helpful. As Steve mentioned earlier, we are now expecting to open between five to eight new restaurants in 2022. We expect net capital expenditures, net of tenant improvement allowances to be approximately $25 million-$40 million. We are expecting restaurant pre-opening expenses to be approximately $2 million-$3 million in 2022. Lastly, our effective annual tax rate is expected to be approximately 13%-15%. With that, I'll turn the call back over to Steve. Thanks, Jon. Our team members continue to do their best to manage various external challenges by focus on what makes Chuy's different. From attaining the best talent and offer high quality made from scratch food and drinks at a tremendous value to continue focus on cost management and operating efficiencies. Our underlying business remains strong, and we are well-positioned to continue our recovery in fiscal till 2022. Again, none of this would have been possible without the hard work and dedication of each of our team members, and I'm proud to be working alongside them every single day. With that, we're happy to answer any questions. Thank you. Thank you. If you'd like to ask a question, please signal by pressing star one on your telephone keypad. If you're using a speakerphone, please make sure your mute function is turned off to allow your signal to reach our equipment. Again, press star one to ask a question. We'll pause a moment so that everyone has an opportunity to signal for questions. We will go first to Mary Hodes of Baird. Good afternoon. Thanks for taking the question. I guess first, would you be willing to share an update on how comps or average weekly sales are tracking to date in Q1, understanding that there might have been a slowdown from Q4 mid Omicron? Yeah. I tell you what, Mary, it's very cloudy and obviously Omicron was an issue, but the other issue in all our markets was weather. So I'd like to get that out there. I mean, we lost over $1 million in closed door days related to weather during the first quarter. It's very murky given Omicron and the weather to really give you any other, I guess, statistics other than that. Yeah. Got it. Okay. On the development, I guess, what are you seeing on development and construction costs, and how does that play into the returns you expect to achieve on the current class of openings? I'll take the front side, you can take the return. It's definitely, we're probably seeing it out there as of right now, and that's why we have pushed them back probably to the, you know, I think we'll have one in the second quarter and the rest will be near the end of the year. Hopefully, some of the costs can reduce a little bit. Right now, we're in that 25%-26% increase in construction costs across the board. Yeah. As far as the margins, we expect some probably a little higher margins than what we have in the past, given where we're opening these stores. The returns are gonna be a little lower this year than kind of our target just because of, like Steve said, the construction costs. They will be a little lower than our targeted 25%-30%. Got it. Okay. Just last one would be on G&A, that ratio has obviously been elevated in 2020 and 2021 relative to where you were pre-COVID. Is there a way to dimensionalize either how you're thinking about the trajectory of the ratio in 2022 and 2023 versus where you were pre-COVID, or just philosophically, how you think about how G&A should grow relative to revenue in upcoming years? Yeah. I mean, again, as we get back to growing, as you know, we haven't really grown that much. As we get back to growing, we like to limit our G&A growth to about 80% of the percentage of store growth. I think that's what we'll get back to. Great. Thank you. I'll leave it there. Thank you. We'll hear next from Andrew Strelzik of BMO Capital Markets. Hey, good afternoon. I guess I wanted to ask about the inflation outlook. Obviously, first quarter is gonna be elevated. How are you expecting that to kind of trend throughout the year? Understanding there's a lot of volatility. I think last quarter you said you expected restaurant margins in 2022 to be in that 18%-20% range. Has the inflationary outlook changed that at all, or how you're thinking about pricing? No. I mean, I think we've. You're absolutely right. We said that it'd be kind of in that range. To the extent that we didn't think we could meet that range, we would start looking possibly at a price increase later in the year. Like I was saying on the call, we are looking at inflation in both labor and cost of sales over 2021 numbers in kind of the mid-teens level. That's increased. With that being said, a lot of that's already in our numbers, right? Because in the fourth quarter, right here in the first quarter, we're only subsequent to the fourth quarter. We're only increasing kind of inflation about 5% over what we were in Q4 in commodity. With that being said, I mean, commodities are going kind of crazy right now. Mm-hmm. We still expect them to come down towards the latter half of the year. Right now, chicken's, you know, at its all-time high. Oils, which we contract, soybean oil, and if you've looked at a chart of soybeans lately, it's going off the charts. We contract soybean oil for our mayonnaise and some other things, so that's going off the charts. We are locked in to beef through the first half of the year, and hopefully floating the back half so that we get better prices. That's our thought right now, Andrew, is just that we think we'll get better pricing in the back half of the year. The first quarter or two, you know, we're expecting some pretty high inflation numbers. Okay, that's helpful. Then, the other thing I wanted to ask about was you mentioned that the favorable turnover numbers. Unless I missed that, I didn't hear anything on staffing. I believe you said last quarter you were at about 80%-85%, and it was having some impact on sales. Just looking for an update on where that stands today, understanding earlier in the first quarter, maybe some challenges. Now, where do you sit now as we think going forward? Thanks. Yeah. With the Omicron starting to get better, as of really this week, it has been pretty bad. We're still right around that 85%, which, during Omicron, we felt pretty good about. We're moving forward, and I think we're better than most out there, but we still got a little ways to go. Got it. Thank you very much. Thank you. As a reminder, you may press star one on your telephone keypad if you have a question. We'll move next to Chris O'Cull of Stifel. Hey, good afternoon, guys. Hey, Chris. I also had another question related to staffing as well. I'm just curious, Steve, if you can talk a little bit about maybe the impact it's had on guest service or guest satisfaction, because I know, you know, you mentioned you're 85% of the staffing level you'd like to be at. I'm just wondering if it's had any implications to the experience. I think that's a great question, Chris. You know, the key for us is we're living in a world that, you know, especially through this pandemic, with the things that we did, whether it be to go or then started opening our dining rooms, the one thing that I preach up to everybody is you do what you can with what you have. And that's the big thing. Okay. So what that does mean is if, Chris, you know, if we have five table stations and five servers show up, that means I'm only sitting 25 tables. That's all that means. If you're gonna ever wait, you're gonna wait at the door, not at a table, because it's unacceptable at any table to keep your standards the way they are. You know, that's the key for us. What you do is it does add on a little bit of waits, but as far as the environment of sitting down, eating at the tables, where our scores are better than they've been on Yelp. Okay, that's helpful. Jon, do you still expect if you get back to that staffing level that you were in 2019, that you can achieve that 32%-33% range for labor costs as a percentage of sales? We do, Chris. We're not looking to get back again to the 2019 staffing levels because with how we've changed our business, you know, that's probably gonna be at, you know, 90%-95% of what we were in 2019. Yes, we do. The 85% you quoted, that's relative to your par levels today, not to where you were in 2019. Yes, sir. Correct. Okay. Just one other question. What drove the sequential improvement in the average check for the quarter? Because I think it was negative in the third. Kind of, where do you expect it to shake out here in the first quarter? Yeah. I think the deal is. What we did was we ran over some more comparable numbers when you're looking at the fajita kit. The mix wasn't as great as a decrease as what it was in the past. Does that make sense? I think so. As we increase the dine-in, you know, it makes those fajita kits that were really driving the cost. Got it. ... less. When we really started rolling over the to go only or those, then it really had a dramatic impact. Now we're starting to roll over numbers that are more comparable from a dine-in perspective, and so it wasn't as dramatic, and so it drove it up a little bit. Okay, thank you. Mm-hmm. Thanks, Chris. We'll go next to Todd Brooks of The Benchmark Company. Hey, good afternoon, guys. Good afternoon, Todd. A couple quick questions for you, kind of follow-ups. We kind of touched on both these. Omicron, I know it's noisy to talk about kind of year-to-date impact. Can you talk about maybe where first half of December was trending versus 2019 before the impact started to ramp up during that month? You want that, Jake? Let me just give you comp sales for like period 10 and period 11. We were running a positive 0.8%, and then positive 1% in period 11, and then in period 12, then you had Omicron, plus you also had the shift in Christmas that caused that when you're comparing to 2019. The numbers are really kind of mismatched there, but that last two to three weeks of the year, along with Christmas, really drove that down to, I don't know, the half- 0.7% What was the period 12 number? Let me see here. I'll get that number for you. I thought I had it, but I don't. Okay. Okay, great. Easy. Can we talk about the nature of the Omicron impact? If you're attributing what percent of the impact was related to staffing levels. Steve, you talked about listen, we're only gonna seat five tables per server. We're not going above that. Versus how are the customers responding during it from a demand standpoint? Is this a customer demand issue or a labor availability issue that constrained the business during this variant? Labor availability. It's a little bit of both, but labor availability. Okay, great. One other. Just on the staffing side, I know Omicron probably muddied it a little bit for you, but some of the peers have talked about much better applicant flow, maybe 5x or 6x the number of applicants they were seeing in September and October for open positions. Even though you haven't inflected up from the 85% level yet, how do you feel about the ability now to really ramp that number, given maybe what you're seeing on the front end as far as applicant flow? I don't know if I'd say it's up 5%-10% or up 5x, but I definitely have seen an applicant flow, specifically the last two weeks, as there have been lessening of the Omicron virus in a lot of our markets. We're definitely seeing some more traffic walking in, as we've seen a little pickup in the sales. If I'm trying to think of the slope, what does it take from here in mid-February to get to that new kind of 90%-95% of fiscal 2019 levels of staffing, which is fully staffed at the current pars? Yeah. I, again, something that we're working on. It's our number one thing we're working on. To give you an exact date when that's gonna happen, it's a little bit murky for me. Okay. Okay, great. Thanks. I'll jump back in queue. Thank you. Todd, just to answer in period 12, because of the Christmas and because of Omicron, we were down 3.1%. Of the 3.1%, Christmas impact had a 2.2% of that. You can kind of see where we're running. We're running about a 1% up in period 10 and period 11. That differential kind of gives you the Omicron impact- Mm-hmm. If you will, in December. Okay, great. For the last two weeks. Thanks, Jon. Mm-hmm. Yep, thanks. With no other questions in the queue, I would now like to turn the call over to Steve Hislop for any additional or closing comments. Thank you so much. Jon and I appreciate your continued interest in Chuy's, and we will always be available to answer any and all questions. Again, thank you, stay healthy, and have a good evening. This concludes today's call. Thank you for your participation. You may now disconnect.