Thank you for standing by. You're currently on hold for today's Denny's Corporation First Quarter 2022 earnings conference call. At this time, we are still admitting additional participants and expect to be underway shortly. We do thank you for your patience, and please continue to stand by. Please stand by. We're about to begin. Good day, everyone, and welcome to the Denny's Corporation First Quarter 2022 earnings call. As a reminder, today's conference is being recorded. At this time, I would like to turn the conference over to Curt Nichols, Vice President, Investor Relations and Financial Planning and Analysis. Please go ahead, sir. Thank you, Melinda, and good afternoon, everyone. Thank you for joining us for Denny's first quarter 2022 earnings conference call. With me today from management are John Miller, Denny's Chief Executive Officer, and Robert Verostek, Denny's Executive Vice President and Chief Financial Officer. Please refer to our website at investor.dennys.com to find our first quarter earnings press release, along with the reconciliation of any non-GAAP financial measures mentioned on the call today. This call is being webcast, and an archive of the webcast will be available on our website later today. I will begin today's call with a business update. Robert will then provide a development update and recap of our first quarter financial results before commenting on our guidance. After that, we will open it up for questions. Before we begin, let me remind you that in accordance with the Safe Harbor provisions of the Private Securities Litigation Reform Act of 1995, the company notes that certain matters to be discussed by members of management during this call may constitute forward-looking statements. Management urges caution in considering its current trends and any outlook on earnings provided during this call. Such statements are subject to risk, uncertainties, and other factors that may cause the actual performance of Denny's to be materially different from the performance indicated or implied by such statements. Such risks and factors are set forth in the company's most recent annual report on Form 10-K for the year ended December 29th, 2021, and in any subsequent Forms 8-K and quarterly reports on Form 10-Q. With that, I will now turn the call over to John Miller, Denny's Chief Executive Officer. John. Thank you, Curt, and good afternoon, everyone. The future of our business indeed is very bright. We made two exciting announcements today that I am confident will accelerate our momentum. I will cover each of those in a moment, but first, let me discuss our sales trends, followed by an update on our previously announced transformative investments, which are being skillfully guided by our experienced management team and dedicated franchisees. The spike in Omicron cases weighed on our same-store sales in early January, followed by improving trends in February as case counts declined. We anticipated moderating trends in March as we completed our rollover of both the soft start to 2021 and the third round of fiscal stimulus payments. However, global events in March contributed to additional inflation, concerns, driving record high gas prices and additional supply chain disruptions, which ultimately weighed on our consumer sentiment and sales trends in March. Despite these challenges, Denny's delivered system-wide same-store sales of positive 23.3% in Q1 compared to 2021. As April gas prices started retreating from mid-March highs, consumer sentiment began to improve, and we have experienced a corresponding improvement in sales trends in April. We believe the improving labor market has enabled the consumer to exhibit considerable resilience to date in face of broad inflation. While we continue to offer value products, guests remain willing to pay for the full-service dining experience they have missed over the last two years, and our check growth has helped address the inflationary headwinds which Robert will cover in more detail in a moment. Approximately half of our same-store sales growth in Q1 came from higher guest check average, comprised of approximately 6% carryover pricing, approximately 1.5% of additional effective pricing taken in February, and nearly 4% of product mix benefits, mostly from higher beverage sales with increased dine-in transactions and reduced value product incidents. Now, our on-premise sales remain strong at nearly double 2019 levels, driven by robust third-party channels and our two new virtual brands. We continue to make steady progress expanding our hours of operation with approximately 51% of our domestic system currently operating 24/7. Approximately 80% of our domestic restaurants were operating at least 18 hours per day at the end of March, which represents an 8 percentage point improvement from the end of the fourth quarter. Both hourly and management turnover at our company restaurants remains consistently below industry benchmarks, and we believe this is largely due to our comprehensive training programs and competitive wages. In fact, on average, when you include tips, our servers at company restaurants make 165% of the full state minimum wage across the states where we operate company restaurants. With 100% of our company restaurants now staffed with a general manager, we believe other levels of staffing and key metrics will continue to improve as we focus on our retention efforts. This allows us to shift our focus to reminding both new and tenured employees how we were voted by Newsweek as one of America's most loved workplaces. We estimate that domestic franchise restaurants operating 24/7 have achieved staffing levels similar to pre-pandemic staffing, and limited hour franchise restaurants are operating at approximately 80% of the staffing levels they had pre-pandemic. We are encouraged to see applicant flow across the domestic system continue to run higher than our historical average and believe staffing levels will continue to improve in due course. In turning to our other recently announced strategic initiatives, we are in the rollout stage of our new equipment package that will deliver quality improvements to our current breakfast proteins and breads, making bacon crispier, sausage more evenly browned, and allowing for freshly baked bread. Currently, we have installed new kitchen equipment at over 300 locations across the domestic system, and the balance of installations are expected to be completed later this year. Our new cloud-based restaurant technology platform will soon be entering the beta testing phase and is still on schedule to be rolled out to all domestic locations by the end of 2023. Both the kitchen equipment and the technology platforms are expected to enhance the guest experience and drive operational efficiencies, while the former also provides the ability to further upgrade our menu across all day parts. Building on these initiatives, today we announced the exciting addition to the Denny's family as we have entered into an agreement to acquire Keke's Breakfast Cafe, a privately held AM eatery concept consisting of 52 restaurants in Florida, including eight company locations. This is an exciting opportunity to participate in the fast-growing AM eatery segment through a complementary brand that we believe our experienced team can develop across multiple states with the goal of becoming the AM eatery franchisor of choice. The current founders have done a great job establishing a brand in a category frequently used by Millennials and Gen Z families with kids whose household income levels skew above $75,000. Keke's entree prices are approximately 20% higher than Denny's, and their locations are in different trade areas, resulting in very low risk of guest cannibalization from Denny's. With strong AUVs and unit-level margins, Keke's made it through the pandemic without closing a single restaurant. In 2021, the brand delivered same-store sales of +18% versus 2019, and same-store sales in 2022 are up approximately 12% year to date versus 2021. We are excited to welcome the Keke's management team to our family, and we look forward to supporting their efforts to accelerate unit growth. Keke's and Denny's will operate with independent leadership teams, each driving their own strategies, products, marketing, operations, and development initiatives, with both reporting into the chief executive officer. Robert will provide some specific details related to the transaction and brand-specific metrics shortly, so let me now address another piece of the exciting news. We are delighted to announce that Kelli Valade will become our next Chief Executive Officer and President. She has 30 years of restaurant industry experience in multiple executive leadership positions and brings a proven history of developing and executing bold strategies. She is absolutely the right person for the job with the energy to not only drive our business forward, but to accelerate our growth. Kelli will begin work on June thirteenth, and I will remain involved through August third to ensure a seamless leadership transition. At the same time, we will be saying goodbye to Mark Wolfinger, who has decided to retire effective June first after faithfully serving Denny's for 17 years as our Chief Financial Officer, Chief Administrative Officer, and most recently as our President. I join our board, employees, and franchisees in expressing our sincere appreciation for his many contributions and congratulate him on his well-deserved retirement. as I said earlier, and will reiterate again, the future of this organization is indeed bright. We have a steadfast and thoughtful board of directors, a new, energetic, and experienced CEO and president joining shortly, an exceptionally talented and tenured management team, and a new complementary brand that will accelerate our growth. That is on top of a fantastic group of franchisees ready to invest in Denny's future through development commitments, new kitchen equipment, new restaurant technology platforms, and remodels, which will collectively transform the Denny's guest experience through continued enhancements to our food, service, and atmosphere. I'm so proud of our teams and franchisees for their commitment and dedication to this brand. I'm so thankful to be a part of such a dynamic, innovative, and agile organization whose best days are yet to come. With that, I'll turn the call over to Robert Verostek, Denny's Chief Financial Officer. Robert? Thank you, John, and good afternoon, everyone. I will provide a development update and a review of our first quarter financial results before sharing a few details around the Keke's acquisition and guidance comments. Starting with our development highlight, the compelling Heritage 2.0 remodel return led franchisees to complete six remodels during the quarter, and we completed three company remodels. Franchisees opened five new restaurants during the quarter, including one international location in Canada and two ghost kitchen locations in Baltimore through our new partnership with REEF Technology. These ghost kitchen locations will serve as a testing ground for new consumer reach in underrepresented metropolitan markets. Details for our new upfront cash development incentive program are coming together, and we expect formal sign-ups to begin later this year in connection with an upcoming franchisee lender summit, enabling domestic franchisees to capitalize on market rationalization opportunities. Now turning to our financial results for the quarter. John mentioned we delivered domestic system-wide same-store sales of + 23.3% during the first quarter versus 2021. Franchise and license revenue increased 25.8% to $59.1 million, primarily due to pandemic-related dine-in restrictions and limited operating hours in the prior year quarter. Franchise operating margin was $28.5 million or 48.1% of franchise and license revenue compared to $23.2 million or 49.5% in the prior year quarter. This margin dollar increase was primarily due to the improvement in sales performance at franchised restaurants. I would like to note that while the franchise margin dollar was not significantly impacted due to the kitchen equipment rollout, the franchise margin rate was impacted by approximately 2 percentage points due to revenue recognition accounting related to the kitchen equipment rollout during the quarter. More information can be found in our 10-Q. However, we expect this margin rate impact to both increase and persist through the remaining rollout of the kitchen equipment while still having no impact to franchise margin dollars. Company restaurant sales of $44.0 million were up 31.0%, primarily due to the improvement in sales from reduced dine-in restrictions and limited operating hours in the prior year quarter. Company restaurant operating margin was $5.4 million or 12.2% compared to $3.4 million or 10.1% in the prior year quarter, primarily due to the improvement in sales performance at company restaurants. We experienced commodity inflation of approximately 15% for the quarter and labor inflation of approximately 10%. These inflationary pressures were partially offset by the improving transaction counts, pricing, and product mix benefits, which John described earlier. We will continue to monitor this inflationary environment in collaboration with our franchisees to execute effective pricing strategies, and we have additional opportunities to make adjustments throughout 2022 as needed. Total general and administrative expenses were $17.0 million compared to $16.9 million in the prior year quarter. A benefit from deferred compensation valuation adjustments was offset by increases in share-based compensation expense and general administrative expenses. As a reminder, share-based compensation expense and market valuation changes are non-cash items and do not impact adjusted EBITDA. These results collectively contributed to adjusted EBITDA of $17.7 million, an increase of $5.9 million compared to the prior year quarter. The provision for income taxes was $8.1 million, reflecting an effective income tax rate of 27.1%. Net adjusted net income per share was $0.11 compared to an adjusted net loss per share of $0.01 in the prior year quarter. During the first quarter, we generated adjusted free cash flow of $10.7 million compared to $5.2 million in the prior year quarter, primarily due to improvements in sales performance at both company and franchise restaurants. As previously announced, we had expected to acquire an additional parcel of real estate during the first quarter of 2022 through a like-kind exchange. However, that transaction did not materialize. Our quarter-end total debt to adjusted EBITDA leverage ratio was 2.0x, and we had approximately $184 million of total outstanding debt, including $17.5 million borrowed under our credit facility. During the quarter, we allocated $11.9 million to share repurchases prior to suspending repurchases as we considered a Keke's transaction. Accordingly, we had approximately $206 million remaining under our existing repurchase authorization at the end of the quarter. Since beginning our share repurchase program in late 2010, we have allocated over $596 million to repurchase approximately 57 million shares at an average purchase price of $10.51 per share, reducing our total net share count by approximately 38%. Now I would like to provide some additional comments around the Keke's Breakfast Cafe acquisition. As we have mentioned in previous earnings calls, our financial flexibility and ability provides the opportunity to continue our long-standing practice of returning capital to shareholders while also investing in the business. This has included previously announced brand investments to optimize our real estate portfolio, transform the technology in our restaurants, modernize our kitchen equipment, as well as the new cash development incentive program. Our asset-light business model converts approximately 50% of adjusted EBITDA into adjusted free cash flow. Our financial flexibility has now allowed us to enter into an agreement to acquire 100% of the assets of Keke's Breakfast Cafe at a purchase price of $82.5 million. Utilizing both cash on hand and a revolving credit facility, this purchase price represents a multiple of approximately 12x Keke's EBITDA. The expected adjusted EBITDA contribution of between $6.5 million and $7 million is driven by average unit volumes of approximately $1.9 million across the 44 franchise and eight company restaurants, with company margins in the high teens to low 20% range. The transaction will be settled in cash and financed through additional borrowing under our revolving credit facility. Accordingly, we are adjusting our target leverage range to be between 2.5x and 3.5x our adjusted EBITDA. Let me now take a few minutes to expand on the business outlook section of our earnings release. Given the volatility around commodity inflation and labor availability, we cannot reasonably provide a business outlook for full fiscal year 2022 at this time. However, the following estimates for our fiscal second quarter 2022 ending June 29, 2022 reflect management's expectations that the current economic environment will not materially change. Additionally, the following estimates do not include any material impact from the Keke's transaction, which is expected to close late in the second quarter. With that said, we anticipate second quarter domestic system-wide same-store sales to be between 3% and 5%. Our expectations for total general and administrative expenses are between $18.5 million and $19.5 million, including approximately $4.0 million related to share-based compensation expense, which does not impact adjusted EBITDA. Based on the guidance I just described, we anticipate adjusted EBITDA of between $17 million and $19 million, including approximately $4 million related to cash payments for share-based compensation associated with awards granted in 2020, which will fully vest and be awarded to participants in May. Our model generates a considerable amount of adjusted free cash flow, which will be enhanced by the acquisition of Keke's, and I want to reiterate our commitment to return capital to shareholders through our successful share repurchase program. In closing, we are well on our way through the recovery curve, and I am excited about the bright future with all the opportunities in front of us to extend our operating hours with improved staffing, to elevate the guest experience through Heritage 2.0 remodels, to grow the collective footprint of Denny's and Keke's locations, to upgrade products through updated kitchen equipment, and to create a more seamless digital experience through restaurant technology upgrades. I want to thank our dedicated franchisees and Denny's team members who have remained focused on serving our guests while progressing on an exciting revitalization initiative. Finally, I want to welcome the Keke's Breakfast Cafe franchisees and Denny's and team members to the Denny's family. I want to reiterate John's appreciation for Mark's consistent leadership and wise counsel over the last 17 years, and I want to express how thrilled we are that Kelli Valade will become our next CEO and president. That wraps up our prepared remarks. I will now turn the call over to the operators to begin the Q&A portion of our call. Thank you, sir. If you would like to ask a question, please signal by pressing star one on your telephone keypad. We ask that you do limit yourself to one question and one follow-up to allow everyone an opportunity to ask a question. If you're using a speakerphone, please ensure your mute function is turned off to allow your signal to reach our equipment. Once again, that is star one to ask a question. We'll take our first question from Michael Tamas with Oppenheimer. Hi. Thanks. Good afternoon. First, congratulations to John and Mark on their retirements and Kelli when she joins. You know, just regarding the Keke's Breakfast Cafe acquisition, I mean, first, can you sort of walk through the thought process and on why you are looking to acquire something like Keke's, specifically in the breakfast daypart, which you obviously already compete in pretty well. Then you mentioned, you know, using your capabilities as a franchise-focused business to help grow Keke's. Can you expand on that? Is that you're gonna tap into your existing franchisees to grow that brand? Or are you just gonna lend all of your capabilities and expertise to their franchisees to let them grow? Thank you. Great questions, and I appreciate that. The thought process, sort of, you look out there to see what's going on in the landscape and, you know, one of the hottest categories in full service is the AM eatery category. We compete as an all-day diner, and you know, which has its own benefits. You know, we're a scaled brand that's gonna continue to grow and improve and modernize. But at the same time, you know, with 50+ of these brands out there in some size or another, the most scaled being First Watch, and then smaller brands that are growing, it is a hot category. Right now, they tend to skew to higher-end neighborhoods where we're not. On the one hand, using sort of the Lexus, you know, Camry analogy, you see that our franchisees, when they're close to home in certain markets, they wanna continue to expand into some trade areas that they're reluctant to go into with Denny's, where historically the higher incomes, they might have been looking for a different experience. We have value-based products and lower pricing than what those neighborhoods bear, different plateware, different finish detail, different expectations. To have a brand be two things at the same time is a little more challenging, and it just made sense to have something that could fill in those markets. One real big benefit to our current franchise base is that they right now buy, they would be excluded from another breakfast. They would not be allowed to compete in this in their current franchise agreement. This would give them permission under their current franchisor to do so. You can see the benefits. Benefit number one is they don't have to go as far from home or have as many other brands in their portfolio if they're a multiple brand franchisee to expand. They've got a trusted franchisor. I think many of these folks prefer doing business with Denny's the Denny's way, so there's benefit number two. Benefit number three is in these deeply penetrated markets like L.A., San Francisco, Las Vegas, San Diego, Phoenix, there's room for Denny's to continue to grow, but we're deeply penetrated there. The challenges of growth, you know, are. It's a headwind to grow materially more in those markets. Some of our best franchisees operating there looking for an opportunity to grow, they can now do it inside the same family. Finally, they just don't compete. You know, we've pressure tested this where other AM eateries have opened in and around a Denny's that have a higher average household income. We see very little impact. We've seen that there's just no impact on the Keke's overlay with the Denny's customer. Finally, the higher average household income tends to hold on to employment longer. I wouldn't say recession-proof per se, but it's much more recession resistant. Having those both in the Denny's portfolio, we felt like made a lot of sense. I think that pretty much gets to the answer. The other question about, you know, managing it, obviously the idea here is to keep them very independent, so when it comes to product development, marketing, merchandising, training, learning and development structures, brand leadership, all will be completely isolated and independent. Support services, there are some synergies and benefits to having a very expert development franchising group that we have here at Denny's, to having a world-class technology support group, tax and treasury, you know, HR compliance, and so there are a number of areas where we have expertise and scale, and top industry talent that can support a small and emerging brand. Procurement will be independent at launch. Thank you, sir. Next, we'll hear from Nick Setyan with Wedbush Securities. Thanks. John and Mark, you'll be missed. I mean, just an amazing, you know, career and contribution to Denny's. You know, good luck on whatever it is that you guys are going to pursue next. I do wanna focus on the Q2, you know, margin guidance or the EBITDA guidance. Can you maybe just bridge that gap from, you know, the comp guidance of 3%-5% to that EBITDA guide, if possible in terms of maybe the unit level margin that we should expect in Q2, the franchise margin? Hey, Nick. This is Robert. Yeah, thanks for that question, and I reiterate all those sentiments about John and Mark that you expressed, and I'm sure they appreciate that. When you look at the guidance, right? Let's break it down a little bit to make sure we understand that. That $17 million-$19 million is being impacted by that $4 million of share-based compensation. It's pretty technical, but the shares that are utilized for withholding purposes are cash hit in our adjusted EBITDA calculation. When you add that back to the midpoint, you get to about a $22 million number, roughly. Just to right size that piece of the conversation before we get started. That, if you recall, that share-based compensation was a function of a pandemic grant that happened in May of 2020, so a kind of an off cycle for us. We didn't have one in January that year, and it matured on a two-year cycle as opposed to three-year cycle. We'll get back to the grant this year in January of this year was back on our normal three-year cycle, as the one in 2021. Just to right size all of that first. With regard to the margin improvements, we still will be impacted, right? It's choppy out there. You can't underestimate that impact of the labor inflation that I quoted in my script of 10%, the commodity inflation of about 15%. That all went into the expectation that setting of that expectation of that $17 million-$19 million range within there. We do expect that likely will continue into Q2, but we don't believe that is ultimately persistent long term. We just don't know when that begins to abate. We do have a sense commodity abate in the back half of the year, but would more like more want to underpromise and overdeliver there than to get out on a full guide there. We haven't given the exact percentage with regard to the company margin. We did improve year-over-year with that, with 2 percentage points. And do believe that we will continue making progress there. We have effectively priced. We do have two pricing cycles that get opportunities again in June and October to address any additional inflation that we may not be seeing. We continue to drive beyond the 12% this quarter, although we have not hit within a specific number there, but do really see a bright future ahead. We consider these roadblocks and temporary challenges that we're experiencing but really believe in that bright future that we hit upon multiple times in our scripts. Thank you, sir. Next, we'll hear from Jake Bartlett with Truist Securities. Great. Thanks for taking the question. Again, my congrats to John and Mark. My question is on the 2022 guidance as well, and it's on the sales guidance. Looking back, there's been a pretty large divergence between average weekly sales growth and same-store sales growth, which is how we model it and kind of look at the difference there. It makes it a little tough to understand exactly how the same-store sales is impacting average weekly sales. For instance, in the first quarter, average weekly sales grew faster than same-store sales. You know, in the context of the 3%-5% same- store sales, I'm hoping you can maybe get us a little closer to what you expect for revenue. Maybe if you could frame it in average weekly sales or, you know, expected unit volumes. But just, you know, there's two things going on here, and you gave us one piece. I just want to make sure we're on the same page as to kind of what you're really expecting for the top line here. Hey, Jake, this is Robert again. Happy to try to address that one too. So when you look at it, and I think it's in our investor deck that we put out. We do have the average weekly sales per restaurant, and it'll go in there and talk about the $33.1 thousand dollars per restaurant per week. That is comprised of that split between on-prem and off-prem, that doubling of the effect that we've held on to during the pandemic timeframe. What you'll also kind of note within there is the cadence of the average weekly volumes, right? If you look at it, Q2 and Q3 tend to be somewhat higher volumes, whereas Q1 tends to be the lowest volume. I... When you look at that, 3%-5%, you need to be applying it to the right quarter. I would imagine you are, but again, they're much higher. The Q2 and Q3 quarters are much higher. The other thing to take into account with regard to that, and I imagine you're completely getting this, is the 23.3% that we delivered in Q1 was still benefiting from the rollover of highly impacted COVID implications in the, like California, Washington, that were much more slowly to evolve out of their COVID restrictions. So that we are actually now entering into what will be considered more normalized same-store sales as we move into Q2, and the guides will look more normalized. I don't know if I can add much more than that at the moment. Thank you, sir. Next, we'll hear from Todd Brooks with The Benchmark Company. Hey. I also want to share my congratulations with John and Mark both. Job well done, so congrats. Thank you. You're welcome, John. Just wondering if we could talk about franchisee health. I mean, the beauty of the Denny's model, highly franchised, is you are protected from a large amount of this inflationary pressure. Obviously, it hits the corporate store margins, but you're highly franchised. If you look at the franchisee level, I guess, what are we seeing as far as the inflation that they're having to absorb? If you have any kind of benchmark on franchisee pricing versus what you're running in the corporate store right now. Any kind of view that you can give us into the health of the franchisees, just given this kind of historic intra-quarter inflation that we're seeing currently. Right. These are great questions. Of course, we've got the pulse of our franchisees. There's considerable assets in the Denny's brand, and this is a tradition that's carried on for years. I can't say we're, you know, give ourselves a pat on the back for being experts yet, but we are, I'd say, pretty good listeners, with ear to the ground to the pulse of the franchisees. We just completed a meeting in San Diego, which we call our Annual Allied Partner Summit, which we conduct once a year with vendors. The mood was, you know, really high. There's a lot of excitement about investments. There's a lot of conversation about margin and pricing and value strategies and new menu introductions and getting everything just right for each day part. I'd say there's general confidence. On the slimmer end of the equation, you know, we had a few more closings in the quarter. You see sort of that purge, much like we had during the pandemic. We saw in this quarter a little bit more of an acceleration of what might have happened over a longer period of time. But other than that, franchisees taking the opportunity to sort of take a hard look at their portfolio. You see a lot of confidence in the brand. I don't know if that gets to the heart of the question. The larger franchisees did not get the same PPP benefits that smaller ones did. Smaller ones tend to be, you know, going into the year in really good shape, balance sheet, and confident about their investments, many paying cash for their new ovens. The larger franchisees, I'd say, are a little bit more tempered. They want to get through the winter, and they're looking forward to the spring. Thank you, Mr. Brooks. Next, we'll hear from Eric Gonzalez with KeyBanc Capital Markets. Hey, thanks for the question, and John Miller, congrats and best of luck on your future endeavors. Maybe you could talk about the health of the consumer. You know, given your demographic skew, are you seeing any shifts in consumer behavior? I know you mentioned the gas prices, wondering, you know, maybe why the consumer might react to gasoline and not to higher food prices in terms of their willingness to dine out. Then secondarily, there was some improvement in average hours this quarter, but maybe you could talk about what it's going to take before we see a much bigger inflection in the number of 24-hour units. Thanks. Great. Great questions. This is one that it's like a big circular reference, this thing between real disposable income, consumer confidence, and then the pace at which the market can be disrupted all at once. For our brand, I can't speak for everybody that has sort of the footprint we have, but sort of a middle income, middle America consumer, you know, I'd say, you know, many of which are working class, not all, but, you know, our customers, you know, represent, you know, America, and so when their confidence is a little lower, they go to the grocery store a little more, brown bag it a little bit more often. With Omicron, with Delta, with high gas prices peaking all at once, any of these things, we tend to have a reactive consumer that sort of pulls back. You heard us say in the script, "Look, we were counting on March to continue to accelerate." We had momentum coming through the quarter and then decelerated and it missed, you know, our internal expectations for sure. April went, you know, as people go, "Okay, well, that's the price of gas." It came down a little, but it didn't come down to where it was. People go, "Okay, I got over the shock," you know, back to normal. We do tend to have a little bit of a confidence hit and a reaction, you know, as the sort of leading edge. On the other hand, as people have real disposable income growth at or beyond the level of inflation. I'd say wage growth has been solid. It gives some sense of confidence to the future of, you know, savings rates and money to spend. On the other hand, some things, you know, interest rates and what will happen to my adjustable rate mortgage and when will gas come back down, it has our customer a little nervous. That's improving in April, and we expect it'll continue to improve. The kind of way we look at it, and forgive the long answer here, but, you know, you sort of look at all these different buckets. There's food inflation. It might drive some quick serve or value orientation, but we're not staffed. As we staff more fully, we're willing to go back to our playbook of more value promotions to drive more transactions. We've not done that in a while. We've actually, us in our category, I wouldn't say fully abandoned it, but we've really left that to quick service and the grocery. All these things in our playbook that are yet to operationalize are just now coming back into consideration. Our confidence that we know what to do, we just aren't there yet. We did come back with a value promotion, with an endless breakfast and, you know, the little modest media. We floated it out there. We didn't merchandise it as strongly as we had two portion segments in the past. It's got a real strong barbell to add proteins at the other end of it to give our franchisees confidence. We'll work back into those as we become more fully staffed. We'll add hours. We'll add, you know, confidence, and our consumers are gonna continue to come back as a result. Yes, you know, they kind of took a hit and then now they're coming back. I'd say nothing to worry about, but enough for us to say there's too many pieces in the soup here. Let's guide next quarter rather than this one. On the hours, we do believe there's momentum, both in staffing and training and retention, even though you hear about the Great Resignation. That is true. You know, we'll have a higher number of people to start and then decide, you know what, I'll go back on unemployment. That seems to be improving. The momentum is building and, you know, it sort of has a doubling rate out there another quarter or so down the road. It's slower than we had originally hoped, but we think that pace will continue to quicken to add hours and quality staffing and good training programs before we add those hours so that we come back with some confidence. It's all coming in the right direction. It's just a bit delayed. Thank you, sir. As a reminder, that is star one if you would like to ask a question at this time. Also, if you've previously asked a question and have more, please press star one to re-queue. Next, we'll hear from Brett Levy with MKM Partners. Mr. Levy, your line is open. Please go ahead. Hearing no response, we'll move on to Jake Bartlett with Truist Securities. Great. Thanks for taking the follow-up. You know, Robert, I'm wondering maybe just to help me. I'm going back to the question I had asked before. I just wanted to better understand, you know, when I look at a three-year geometric stack for same store sales, so you calculate geometrically, there's the 4% implies a pretty sharp deceleration from the first quarter. Just remind me why that might be happening. Hey, is there, you know, what is there a, you know, nuance as to how you calculate same store sales? Just so I can understand how that might be happening. You know, maybe if you could also confirm, I guess that in that answer, but confirm that April sales levels, like average weekly sales, you know, have improved from, you know, already from the first quarter. Hey, Jake, this is Robert again. Yeah, I get it. We're all looking a little quizzical in the room because our Q2 3%-5% would not, from our perspective here in the room, necessarily represent a deceleration in comp. Looking back at an anchor point, I don't know if you're looking at 2019 or 2020 or how that stack looks in your world, but we don't see that deceleration that you are referencing there. I can confirm, as John mentioned it in script, that we did accelerate from March into April in a meaningful way. We were pleased with that. Again, we're not seeing what you're seeing, so I don't know exactly how to answer that question. Okay. Got it. Can I ask a follow-up here? Please, yeah. Am I still there? Good, because it cut me off before, so I just want to make sure about that. You know, another question, you know, on the impact of the cash stock comp, and that's obviously a big impact on your guidance for adjusted EBITDA. Can you just remind us, help us. That's having a big impact. Had a big impact in the first quarter as well, just versus expectations. Can you just make sure we're on the same page about, you know, when. Are there any other grants that we should be aware of as we're making our estimates going out? Or, you know, typically these hit in the first quarter. You know, should it be about the same. I mean, anything kind of that we should be aware of as we project forward beyond the second quarter? Yeah, that's a really good question, Jake. It was the grant in 2020 was different than any other grant that we had done previously. That was a two-year grant, and it was delayed given the effects of the COVID pandemic launching in there in March. Everything was delayed to get a sense of where we were. That was granted in May. It was a two-year grant. Historically, for us, they're three-year grants, typically granted late January, early February, runs on a three-year cycle. You see that three-year impact. We do now, and this is all in the proxy, a portion of this of the grants are now in restricted stock units. In 2021, that was a 1/3 of that grant. In 2022, that was 40% of that grant. Those mature on the. Our issues are a one-year maturity. They pay out the following January. You'll see that piece trickle into January of 2023. Although there will not be a significant payout because the grant in 2020 matured here in May and thus will not impact January of 2023. Although you will see some. The biggest component of that is sitting back here in May. Kind of skipping a cycle, and I know this is a long, complicated answer, but the next bigger piece will now sit out into January of 2024. And we. Again, I know this is complicated. This is all within the proxy, so we'll be able to speak to this more clearly to get you the exact cadence of those payments. Great. Thanks a lot. I appreciate it. One time only, not to be repeated in May. Correct. The pandemic two-year grant was a one-time RSU grant. We've gone back to our highly high-performance based grants subsequent to that one grant. Thank you, sir. We'll take a follow-up question from Todd Brooks with The Benchmark Company. Hey, thanks for the follow-up. I was just wondering, can we talk to virtual brand performance, what type of sales layer it was, how sturdy those businesses seem to be as dine-in's reopening, and just outlook for any further rollout across the base? Thanks. Yeah. Yeah. Well, Robert. Go ahead, John. Robert's gonna grab some numbers there. Great question. All in all, it's, you know, modest momentum in both brands. There is a really strong consumer reaction, and our franchise base likes it because it's another storefront without brick and mortar to get some product credibility that will have a long-term, you know, benefit to the Denny's reputation for product quality. The artisan bread, the high-quality ingredients, and some of these are starting to work their way into the Denny's menu under a same or similar name or, you know, same. In the merchandising, the fact that these are coming from a Denny's is It's out there as well. We like what they've done. These are products we think deserve a spot as a hero on our menu. At the end of the day when you blend the two efforts together, it's not an additional SKU. There are a few right now, but at the end of the day, this will be something we think fits our diner positioning, but it also has a Burger Den and Meltdown second brand where, you know, people might discover us there when they weren't shopping for Denny's. Denny's has an all-day breakfast reputation. We're building our diner all day daypart reputation. In the meantime, someone might find a burger or a sandwich somewhere else, and our franchisees that participate tend to like the exposure. Todd, just to give you some sense of the numbers, and this is in our investor presentation, slide six, but it's representing about 3% between The Burger Den and The Meltdown. It has been very consistent at that level, and we're really quite excited about that. Any initiative that we can come up with that'll drive 3% in sales, we'll launch those all day long. Really excited about that in the fact that it's been very consistent since launch. Great. Thanks, Robert. There are no further questions at this time. We'll turn the conference back over to you for any additional or closing remarks. All right. Thank you for joining us on today's call. We are pleased with the progress we have made navigating a noisy recovery and are encouraged by the level of adjusted EBITDA and adjusted free cash flow generated by our highly franchised business model during the first quarter, despite the inflationary headwinds. We are making steady progress with staffing levels and extending operating hours, which will provide additional potential for our brand. Our on-premise sales remain strong at nearly double the 2019 levels, driven by robust third-party channels and our two new virtual brands. We believe the meaningful investments we are making in kitchen equipment and restaurant technology platforms will prepare our business forward with exciting high-quality product opportunities and an enhanced guest experience. We are excited to relaunch our successful Heritage Remodel program, along with the opportunity to enhance our existing development pipeline through our new franchise incentive program, our partnership with Reef, and a new complimentary brand that we believe will accelerate our growth. Finally, we have a new energetic and experienced CEO joining shortly, representing the culmination of a thoughtful succession plan by our board of directors, and she will be supported by an exceptionally talented management team. I believe our future is indeed very bright, and we look forward to our next earnings conference call in early August, when we will discuss our second quarter 2022 results. Thanks everybody, and have a great evening. That does conclude today's conference. We thank you for your participation. You may now disconnect.