The conference will begin shortly. To raise and lower your hand during Q&A, you can dial star one one. Good afternoon, welcome to today's Noodles & Company's Fourth Quarter 2022 Earnings Conference Call. At this time, all participants are now in a listen-only mode. After the presenters' remarks, there will be a question and answer session. As a reminder, this call is being recorded. I would now like to introduce Noodles & Company's Chief Financial Officer, Carl Lukach. You may begin. Thank you and good afternoon e veryone. Welcome to our Fourth Quarter 2022 Earnings C all. Here with me this afternoon is Dave Boennighausen, our Chief Executive Officer. I'd like to start by going over a few regulatory matters. During our opening remarks and in response to your questions, we may make forward-looking statements regarding future events or the future financial performance of the company. Any such items, including details relating to our future performance, should be considered forward-looking statements within the meaning of the Private Securities Litigation Reform Act. Such statements are only projections and actual events or results could differ materially from those projections due to a number of risks and uncertainties. The safe harbor statements in this afternoon's news release and the cautionary statement in the company's annual report on Form 10-K for its 2021 fiscal year and subsequent filings with the SEC are considered a part of this conference call, including the portions of each that set forth the risks and uncertainties related to the company's forward-looking statements. I refer you to the documents the company files from time to time with the Securities and Exchange Commission, specifically the company's annual report on Form 10-K for its 2021 fiscal year and subsequent filings we have made. These documents contain and identify important factors that could cause actual results to differ materially from those contained in our projections or forward-looking statements. During the call, we will discuss non-GAAP measures, which we believe can be useful in evaluating the company's operating performance. These measures should not be considered in isolation or as a substitute for our financial results prepared in accordance with GAAP. A reconciliation of these measures to our most directly comparable GAAP measures is available in our fourth quarter 2022 earnings release and our supplemental information. To the extent that the company provides guidance, it does so only on a non-GAAP basis and does not provide reconciliations of such forward-looking non-GAAP measures to GAAP measures. Quantitative reconciling information for these measures is unavailable without unreasonable efforts. The corresponding GAAP measures are not accessible on a forward-looking basis. I would like to turn it over to Dave Boennighausen, our Chief Executive Officer. Thanks Carl. Good afternoon everyone. We're pleased with our fourth quarter results as we executed across all three levers of our growth algorithm, resulting in Adjusted EBITDA increasing over 100% versus prior year. We delivered strong top-line results driven by a 10.2% increase in company comparable restaurant sales and positive traffic. Restaurant margins increased 280 basis points year-over-year, driven by significant leverage across the P&L, and we successfully opened five new company restaurants. We anticipate the earnings growth trend in Q4 to continue throughout 2023, including a significant reduction in our cost of goods sold line, which given our newly contracted cost, should yield COGS improvement of roughly 200 basis points during 2023 relative to last year, equating to approximately $10 million of EBITDA expansion for that line item alone. As we look ahead, we believe Noodles & Company is well positioned for significant growth in 2023, driven by continued top-line expansion, supported by strength in digital and loyalty, a normalized cost of goods sold environment, identified efficiencies in multiple expense areas, continued improvement in staffing operations, and our strong unit pipeline. I would first like to start with our strength in digital and our rapidly growing rewards program. As we've discussed in the past, Noodles & Company's resonance with the off-premise occasion, combined with our best-in-class digital ecosystem, results in some of the best digital metrics in the industry. During the fourth quarter, digital sales grew 11% versus prior year and accounted for over 54% of sales, an increase of 240 basis points versus the third quarter. This momentum has continued into 2023, even lapping the impact of Omicron, as digital has accounted for over 55% of sales year- to- date. This growth in digital has broadened access to the brand, fostered increased engagement with our guests, and supported meaningful growth in our Noodles Rewards program. The Noodles Rewards program now accounts for nearly 25% of our sales. We completed 2022 with 4.5 million members, a 12.5% increase over 2021. We continue to leverage the rewards program to gain valuable insights about guest behavior, become more targeted with our messaging, and develop deeper relationships and loyalty with our guests. We feel there remains significant opportunity in digital. During 2023, we will bolster this strength through both investment in a full 360-degree view customer data platform, as well as the implementation of digital menu boards and digital marketing signage throughout the system. From a culinary perspective, the innovation from the past two years, including last year's introduction of the great-tasting, low-carb LEANguini noodle has resulted in a menu that offers guests a wide variety of fresh, craveable, made to order dishes that meet a broad range of lifestyle needs. Consequently, our focus in 2023 is to leverage our digital assets, both through web and app channels, as well as through digital menu boards to better highlight and showcase the meaningful strengths in our menu, as well as communicate key marketing opportunities. As an example of the potential for digital menu boards, during the holiday season, we leveraged these boards to promote gift cards more actively, resulting in gift card sales at restaurants with digital menu boards that were double of those without. Additionally, digital menu boards afford us the flexibility to quickly implement changes to featured menu items and in pricing. As we continue to see top line expansion, we additionally anticipate significant opportunity to increase restaurant level margins in 2023. As I noted earlier, we have entered into fixed cost contracts for the full year for our boneless chicken breast, which accounts for nearly 20% of our overall food spend. These contracted rates are meaningfully below the price that we paid last year and should yield approximately 200 basis points of cost improvement relative to 2022. Additionally, we anticipate continuing to leverage fixed costs throughout the P&L, as well as realizing initial benefits surrounding our initiatives on menu simplification and equipment optimization. Supporting our efficiency initiatives will be the continued strengthening in our people and operations metrics. We remain at full operating hours with staffing at or better than pre-COVID levels. Importantly, during the past four months, general manager turnover rates have been over 30% better than the same time frame the prior year. Improved staffing has yielded meaningful improvement in guest metrics such as friendliness, taste of food, and overall Net Promoter Score. Average cook times thus far in 2023 are nearly 45 seconds better than what they were just a few months ago. While the strength of our people is essential to maintaining momentum at our existing restaurants, they're also critical in the continued success of our recent new restaurant classes. As we mentioned last quarter, our new restaurants continue to have strong performance. Our 2019 and 2020 cohorts, which have entered our comp base, delivered fourth quarter unit volumes above company average, while restaurant level margins exceeded the rest of the system by over 200 basis points. Finally, on the new unit development. During the fourth quarter, we opened five company restaurants. Thus far in 2023, three restaurants have opened, including two restaurants that had to be pushed into early 2023 because of inspection delays related to poor weather over the last two weeks of December. These restaurants have opened exceptionally well, giving us continued confidence in our unit development going forward. We do not anticipate any further openings during the first quarter and currently have seven restaurants under construction for the second quarter. From time to time, we will close underperforming restaurants that are at or near the lease end, where we believe we are not well positioned for current consumer trends or their future relocation candidates. For context, in 2022, we closed five locations, which represents a typical year for lease end closures. Currently, between sites that are open, under construction, or under lease for 2023, our pipeline remains 3 x higher than where we were at this point in 2022, supporting our guidance of 7.5% system-wide gross openings in 2023, inclusive of the two restaurants that were delayed from Q4 into this first quarter. We do expect that our openings will be more concentrated in the back half of 2023, driven by extended development schedules resulting from delayed landlord deliveries and longer permitting cycles. As we look to have more balanced openings in future years, encouragingly, we have already 21 locations under lease or in lease negotiations for 2024. Looking ahead to the balance of the year, we feel that the three levers of our growth algorithm all have meaningful tailwinds. Our comparable restaurant sales continue to be strong as we leverage the core strengths of our menu, the ongoing benefit of our digital ecosystem, and the concept's ability to meet the needs of today's consumer. We anticipate the margin expansion that we delivered in Q4 to extend throughout 2023 on the strength of reduced cost of goods sold, including the benefit of full year pricing contracts for chicken in 2023 and additional sales leverage throughout the P& L. Finally, our new units are performing above our glide path with a pipeline that continues to strengthen to support accelerated unit growth. I'd now like to turn it over to Carl Lukach to share some of our financial highlights from the fourth quarter and our expectations for 2023. Thank you Dave and good afternoon everyone. During the fourth quarter, system-wide comparable restaurant sales increased 8.7%, including 10.2% at company-owned restaurants and 1.3% at franchise locations. On a two-year stack basis, fourth quarter company-owned and franchise restaurant sales increased 19.7% and 22.1% respectively. Entering 2023, we've continued to see top line strength even as comparables have become more difficult following the Omicron lap in January. Overall, we anticipate company comparable restaurant sales of high single digits for the first quarter of 2023, driven by the momentum we have in the business and our strong January results. Pricing during the fourth quarter was approximately 9% related to pricing actions taken during the H1 of 2022. In February of 2023, we took incremental price of approximately 5% across our core menu, which we expect to result in first quarter pricing just above 10%. We do not anticipate any additional pricing this year unless there is a meaningful change in the economic environment. Our fourth quarter revenue increased 18.9% to $136.5 million compared to last year, driven by strong comparable restaurant sales growth and revenue generated from units opened since 2022. We estimate that revenue was favorably impacted by approximately $9 million related to the 53rd week in the fourth quarter, with the extra week of sales mostly offset by an extra week of costs and expenses. Average unit volumes grew to $1.38 million for the fourth quarter. For the first quarter of 2023, we anticipate total revenues to range between $125 million and $128 million. For the fourth quarter, restaurant level contribution margin was 15.2%, a 280 basis point increase compared to last year. This improvement was the result of meaningful leverage in our labor, occupancy, and operating expenses. While cost of goods sold increased 100 basis points versus the prior year, on a sequential basis, cost of goods sold benefited from more normalized chicken prices and improved 120 basis points relative to the third quarter of 2022. Looking ahead, we have contracted the majority of our food basket on either fixed or formula-based pricing, including full year fixed pricing contracts for both grilled chicken and parmesan chicken. For 2023, we anticipate our cost of goods sold percentage in the high 25% area, driven by 2% commodity deflation and including cost of goods sold in the 26% area for the first quarter. Labor costs for the fourth quarter were 31.2% of sales, improving 200 basis points compared to last year. During the quarter, the benefit from labor efficiencies and the rollout from steamers was partially offset by wage inflation of nearly 11%. While wage inflation is moderating, we anticipate elevated levels will continue throughout 2023. We expect our labor expenses as a percentage of sales in 2023, including the first quarter, to be fairly consistent to slightly higher than the labor costs we saw in 2022. Other operating costs for the quarter were 17.9% of sales, compared to 18.4% last year, reflecting strong sales leverage throughout our restaurant expenses. We anticipate that restaurant level expenses will remain relatively consistent versus prior year in 2023. Occupancy expense for the fourth quarter was 8.9% of sales, compared to 10.1% last year, driven by sales leverage. We anticipate continued leverage in our occupancy expense throughout 2023 to further support margin expansion. Overall, we expect our contribution margin in the first quarter to be in the range of 12.5%-12.8%, roughly 300 basis points higher than prior year, driven by improvements in cost of goods sold and leverage in occupancy expense. As a reminder, the first quarter is our seasonally lowest quarter of the year. We expect higher quarterly margins for the balance of the year relative to Q1. For the full year 2023, we anticipate restaurant level margins between 16%-17%. G&A for the fourth quarter was $13.7 million, compared to $11.4 million in 2021, with the increase driven by the 53rd week. G&A included non-cash stock-based compensation of approximately $1 million during the fourth quarter, compared to approximately $700,000 last year. For the first quarter of 2023, we anticipate G&A of $13.5 million-$14 million, including stock-based compensation of $1.4 million. This compares to G&A of $11.8 million last year, including stock-based compensation of $1.2 million. The largest driver of the increase is the assumption of an accrued bonus at Target following reduced bonus expense in 2022. GAAP net income for the fourth quarter was $975,000, or $0.02 per diluted share, compared to a net loss of $4.7 million last year, or a negative $0.10 per diluted share. Non-GAAP diluted earnings per share was $0.03 compared to a negative $0.05 last year. Please refer to our earnings release for reconciliations of non-GAAP measures. For the full year 2023, we expect adjusted EBITDA of approximately $45 million-$50 million and adjusted EPS of $0.10-$0.20. Our 2023 guidance is based on a more normalized commodity environment where we have contracted fixed rate prices on chicken. The commodity environment alone is expected to support nearly $10 million of EBITDA growth compared to 2022. Our guidance anticipates continued sales leverage across the P&L, particularly in occupancy. It is also important to note that our guidance assumes no material changes in consumer behavior or broader macroeconomic trends. For further detail on our 2023 expectations, please refer to the supplemental information in our fourth quarter earnings release. Turning to the balance sheet. At quarter end, we had cash and cash equivalents of $1.5 million and a total debt balance of approximately $47.7 million. We maintained nearly $75 million of incremental liquidity available for future borrowings under our amended credit facility. For the full year, we expect $53 million-$58 million of capital expenditures, which includes approximately $9 million-$11 million during the first quarter. We anticipate a majority of our capital investment will support new unit growth in addition to continued innovation of our website, mobile app, and digital capabilities. Our capital plan also includes the investment of a full digital menu board rollout and upgraded network capabilities in all of our locations by year-end. With that, I would like to turn the call back over to Dave for final remarks. Thanks Carl. We're proud of the progress that we've made in the fourth quarter of 2022, including double-digit company comparable sales, 280 basis points of margin expansion, and a $5 million increase in EBIT year-over-year. As we look at the three levers of earnings growth, comparable sales growth, margin expansion, and unit growth, we feel confident that each of these have meaningful tailwinds as we have entered 2023, and we look forward to sharing with you our progress throughout the year. Thank you for your time today. Please open the lines for Q&A. Thank you. As a reminder, to ask a question, please press star one one on your telephone and wait for your name to be announced. To withdraw your question, please press star one one again. Please stand by while we compile the Q&A roster. One moment for our first question. Our first question comes from Joshua Long from Stephens. Your line is now open. Great. Thank you for taking our question. Exciting to see the momentum in the brand and hear that it has continued thus far into 1Q. You mentioned strong January trends, just, you know, as we work through kind of the high level thought process of just the pushes and pulls over the last couple years, is that something that you'd be willing to quantify at this point in time? I'm sorry. I actually missed the question. To push the what, Josh? Yeah. Just trying to get some sense of how strong January was? You called out the strength into the. Got it. Of the year, and obviously you've got some good, high single digit comps on deck for 1 Q. Just curious if you. Sure. Would be willing to add a little bit more texture to January trends. Yeah, absolutely. What was, I think, exciting, Josh, is that the same store sales, even as you go back through Q4, was actually pretty consistently strong all the way across the full Q4, from October all the way through December and then into January. You know, certainly we've seen it through the industry that there was the lap of Omicron, which led to particularly strong results in January. As we look at the momentum in the business today, it hasn't skipped a beat as we look at February. While it's still premature to say what ultimately the assumptions will be for the balance of the year in terms of economic conditions, we're very pleased with what we've seen, even as we've lapped Omicron, not just in our performance, but in the current health of the consumer. I'll tell you a few areas we look at, Josh, from, you know, how we expect trends to go forward looking at the health of that consumer. We're seeing the frequency of our guests, is stable, if not increasing. Second, we're not really seeing any trade down. As the consumer potentially would be under pressure, we're not seeing any trade down within the menu. In fact, mix is actually positive. Even in the consumer channels, another avenue we look at to see the health of the business, even as we lap, some of the benefit of Omicron, we continue to see really good momentum across all of those channels, including higher priced channels such as delivery. Overall, yes, January was a little bit stronger than you saw maybe through the full Q4 as well as, in February. Overall, the health of the business is extremely strong. That's very helpful. Appreciate that color. When we think about kind of the components of the comp, perhaps you mentioned it in your section, Carl Lukach, if so, I missed it. Can we walk through kind of the price mix? I mean, Dave Boennighausen, you just called out that mix was positive. Can you talk through the price mix components there, what you saw kind of on the traffic piece in the quarter? As we think about the pricing you have in place for, you know, that you're gonna take here in February, if you didn't take any more, which is in line with the plans you outlined, how does that pricing flow over the course of the year, or how does it fall off as we get to the back part of 2023? Sure Josh. I'll start with the fourth quarter. Fourth quarter pricing was approximately 9%. Most of that was relative to actions that we took during the first half of 2022. You're correct, as you pointed out, in February, we did take an incremental price of 5% across the menu. When you think about the pricing decisions that we made last year and that rolling off, the back half of 2023, we expect that to be in mid-single digits from a pricing perspective. Got it. That's helpful. One last one for me. When we think about some of the strength in the new unit, new unit performance that you called out, how do you think about that? I mean, is that a function of just knowing where that consumer is, what the sites are that you like? I mean, talk about some of those recent classes, the strength you've seen there, and what you've learned as you have optimized new unit development at the brand. Yeah. As a reminder, what we discussed was that the class of 2019 and 2020, as they've entered the same store sales space, their average unit volumes in Q4 were above company average. Their margin was actually 200 basis points below or above, I'm sorry, above the company average. What that's done is it's validated that a lot of the work we were already doing even before pre-COVID before COVID environment, whether it be the smaller square footage pickup windows, incorporating digital into many of our new restaurants. Those are all paying dividends in terms of that overall shift towards off-premise and digital that we were doing even as we entered COVID. As we've now gone through COVID and seen how the brand has been able to be resilient and showcase its strength, actually give us even more confidence in terms of. The learnings we've had, certainly you see, you know, continually less reliance on office generators, on retail generators, more so on residential, and that's right in the heart of where the Noodles & Company portfolio is and where our strengths are. Suburban restaurants, higher income, little higher education with that smaller square footage off-premise oriented footprint, most of which have that order ahead pickup window, just gives us continued confidence that the pipeline that we have, which is now considerably strengthening, for sites for the back half of 2023 and beyond, will continue to be a very strong high return on investment class. Great. Thank you. Thank you. One moment for our next question. Our next question comes from Jake Bartlett from Truist. Your line is now open. Great. Thanks for taking the questions. You know, I wanted just to build on that first one that Josh had and see if I can get a little more out of you know, on the trend in February. Specifically the commentary in February that it remained strong. Sounds like January was stronger, but that February remained, If you could contextualize how February's done, that would just, I think, help us understand the trajectory here. I think last year you had given us real, you know, fact, you know, what the January, you know, 2.7%, I think, then it went to 7.5% last year in February. I don't know, any more detail, any more color to help us understand the trajectory in January and February this year would be helpful. Yeah, sure. February remained in the high single digits, which is reflected in our overall guidance for Q1, where I think it becomes a little bit more challenging, Jake, is as you look beyond Q1. I mean, Q1, we feel very strong with the results we're seeing, the health of the consumer. As you look at exiting Q1 into Q2, we still feel that momentum is there, just feel it's a little bit premature to make too many assumptions on what the economic conditions will be as you get further on through the year. February's growth was still in that high single-digit range. Great. Great. I just wanted to make sure I understood the margin guidance for the restaurant level margin guidance. You know, you expect about, you know, 210 - 310 basis points of restaurant margin expansion in 2023. 200 comes from COGS. I think if I heard right, there's a little deleverage on labor, but then you get that back in occupancy and other. Is that right? I mean, did I get the pieces right there? That's fair to say. From the margin guidance perspective, we have a lot of visibility on the cost of goods sold expansion that's embedded in the guidance because we're in these long-term full year fixed price contracts, particularly within chicken and other proteins. That gives us the confidence in that favorability from the COGS perspective. For the rest of the P&L, you're right. There's probably gonna be some leverage as we think about the sales growth within the year, you know, down the P&L, particularly in occupancy. On the labor side, we have been seeing some inflation level persist as we go into 2023. Our, you know, embedded in that forecast is that that inflation does moderate but does continue into the year. That's where the guidance on the labor margin as a percentage of sales is relatively in line to just slightly worse to last year. Okay, great. I had a question on development. I wanted to gauge Dave, if you could just talk about the visibility you have in, you know, in the growth in 2023. I know that, you know, continuing to suffer as all others are on, you know, challenges getting stores open. You know, what level of confidence do you have in that? I think the math is roughly, you know, roughly 34 openings to get that 7.5%. Just wanna kind of, you know, is there a buffer in there? Is there kind of a, you know, margin of error if these headwinds don't ease? The second part of it is just on the net unit growth part. You know, I count, you know, by what we're seeing, it looks like, you know, there's been, I think, three stores closed, you know, just in the first quarter here. If you can just level set us, make sure we understand what we should thinking about for net growth in 2023. Sure. Let's go ahead and start with that second question. Actually two restaurants have been closed that were nearing their lease term end thus far in 2023. The other one that you're likely referring to, Jake, is one that when there was a significant cold spell in Wisconsin, there was a water main break that ultimately that restaurant is going to be closed for a couple months in order to get it back online. That is purely a temporary closure. That is one aspect, just to clarify. What we expect, as we said, is that a typical year for us, it's gonna be about 1% of our units that as they're approaching lease end, they've been there for 10 years, and ultimately we see that trade area has shifted. Maybe it's not as well positioned for the post-COVID environment, which is a little bit different, or they're potential relocation candidates. That is an appropriate way to look at closures on an ongoing basis. What gives us great confidence in terms of the 7.5% guidance for this year, even though it is a bit backloaded, where we're at from a pipeline perspective, in terms of sites that have been signed with leases or we're close to lease negotiations, construction has already started. Again, it's about 3 x higher than where we were at this point in 2022. So those are deals that are already real. They're already being worked on. That gives us more confidence than ever that there is a margin of error given the environment. What we are assuming in our guidance, is that there isn't an improvement in the overall environment. We assume that it's going to remain challenging in terms of the delays that you've seen from a permitting perspective and landlord delivery date. That is already incorporated into our guidance and into our overall pipeline. And as we said, we've already got 21 sites, that are already very far along for 2024 openings, giving us even more buffer as we look at ultimately getting to a very balanced pipeline. Great. I appreciate it. Thank you. Thank you. One moment for our next question. Our next question comes from Andy Barish from Jefferies. Your line is now open. Good evening, guys. wondering if, understand the dynamics on labor for this year. Wondering if the Profitality stuff that you're working on in 2023 is expected to drive some benefits in 2024 and any, you know, any early learnings on any of that would be helpful. To give perspective on those on the call that maybe are not familiar with Profitality work, if you go back several years, we instituted a Kitchen of the Future initiative using a third party called Profitality, which came into our restaurants and looked at every task that's done, 500 tasks throughout the day, and identified time motion aspects of it to understand where were their pinch points, where were there opportunities for us to be more efficient. The result of that project was ultimately the taking out of over 10% of our crew labor hours that were necessary inside the restaurants. While that happened, we actually improved taste of food scores, we improved temperature, we improved cook times. It was a win across the organization. Starting late last year, we reengaged with Profitality, recognizing that versus pre-COVID, the move has been even more off-premise. There is a different type of opportunity that we see in terms of what is the Kitchen of the Future. Where we're at in that process, Andy, still too early to quantify. What we have seen is that they have been able to identify that, yes, the work we had done to get rid of certain bottlenecks, particularly like the sauté line, that has been solved. Where there are still potential opportunities, involve certain areas around expo, where we garnish the food and then deliver it, as well as in the protein manufacturing. Where we're at in the process is we will, in the next few weeks, actually receive the layouts, the design, the equipment recommendations on how we can then activate that both for existing restaurants as well as for new units to even reduce the square footage even further and reduce costs out of the build-out. Too early to quantify how many labor hours do we expect out of this, but it is important to know that embedded in the guidance, we wanted to be ensured that that guidance incorporated things that we knew we had great visibility on, such as the COGS expansion from those fixed contracts. We believe that as we go forward with labor, there could potentially be upside but at the moment, our intent is execute on what we already know and then ensure that as we enter into 2024 and look at the long-term potential of the brand, that we'll be able to capitalize on opportunities such as what Profitality presents. Excellent. Just to follow up on the occupancy line, which, you know, is also a driver to the margin expansion this year. I guess it's a little bit difficult to quantify, but how much of what you're expecting is just leverage from sales versus the mix of these smaller units maybe coming in with, you know, lower occupancy costs versus the existing fleet? From a pure math perspective, the number of new units is such that the leverage you're seeing is almost entirely on the existing fleet. What we saw in Q4, we expect to see a continuation throughout 2023. Where I think it's exciting is that what we're seeing is that even with that smaller square footage, on a rent per square foot, you're not really paying much of a premium. As you look at that class of 2019 and 2020 that was able to hit company average and just barely and beat it from an AUV perspective, but actually surpass margin, a big part of that is the fact that they're able to get that occupancy leverage. That gives us even just increased confidence in the overall unit growth opportunity for us, that even in an elevated cost environment, we're able to still meet those cash-on-cash return objectives. Thank you very much. Thank you. If you would like to ask a question, that is star one one. Again, that is star one one. One moment for our next question. Our next question comes from Todd Brooks, The Benchmark Company. Your line is now open. Hey, great. Thanks for taking my questions. Carl, I wanna start out, you gave us some G&A guidance for the first quarter in that $13 million range. I look at the other items of annual guidance, and they're all kind of as expected. Where do you think the G&A number annualizes to, and can you give us some detail on how much of that is the full accrual of bonuses in your thinking? Sure. Todd, I think that the first quarter is a good indication of a quarterly cadence to the rest of the year when I think about G&A. The largest driver, which I mentioned on the call is the accrued bonus at Target following the reduced bonus expense in 2022. To a much lesser extent, there is some G&A that is expected due to the increase in our investment in the CDP platform, the customer data platform, and overall increased technology costs with some of our existing vendors. Okay, great. That's helpful. Thanks. Giving to franchisees, two questions on this front. One, looks like a pretty big spread between corporate store performance and franchisee same-store sales performance in the quarter. Thoughts on what that driver of that spread might be. If we can talk prospectively about the franchising pipeline, obviously the environment's gotten tougher to get deals across the finish line. As you're thinking about unit growth going forward over the next few years, how does accelerated franchisee growth figure into that? Yeah. Let's start with the same-store sales spread that you saw in Q4. From a two-year stack base, it's actually the franchise group which was going against an extremely strong Q4 of 2021. They actually were still very high, up north of 20% on a 2-year basis, even above the company. I think when you look at the overall health of the system, what's important to know is even as we look at quarter to date, every single market we have is positive same-store sales, whether it's company or franchise. This is an organization that we're in 29 states as it is. The spread of success and the momentum we're seeing is very widespread. From the second part of your question, in terms of the franchise pipeline, we're actually seeing some improvement now. It has been a challenging environment versus what we first expected when we launched kind of a franchise sales initiative. Expect the first restaurants to open later on this year, very early in 2024 for the California franchisee that we signed, as well as for the El Paso, Southeast New Mexico franchisee. We're seeing there's been an increase in leads as the environment has stabilized for certain aspects of the economy, and then particularly for us in regards to inflation. The visibility we have that our cost of goods sold is actually going to deflate has led to an increase in overall franchise interest. We expect that to even further as we continue to progress and hit the metrics we expect and that we're seeing the visibility in throughout 2023. We are seeing some improvement in that environment overall. Okay, great. Thanks, Dave. The final one, and I'll jump back into queue. Digital menu boards, you gave the concrete example about gift card sales being double in stores that had them versus stores that didn't. Are there other early learnings that you can point to as far as average ticket lift when you've got the digital menu boards items per transaction? You're starting to get a little bit of meat now behind having this in a period of stores for a period of time here. Anything else you can share with us on the benefit of this investment? Thanks. Areas that we're also seeing increase in, such as our Make It a Meal program, which allows people to get a drink and then a choice of a side or a dessert, where we featured that in digital restaurants have seen about a 50% lift in the uptake in those in those items. Seeing something similar in terms of LEANguini because we're able to be much more compelling with how we communicate that messaging. Across the organization, we feel, you know, certainly digital menu boards aren't necessarily new in the restaurant space. It's all about how you use them. For us, we've developed that strong rewards program, that strong knowledge of our guest, as well as the overall digital ecosystem that we see there's tremendous upside for a brand that thrives on variety and that thrives on offering guest customization made to order. Us being able to connote and really message all of those strengths to our guests, we feel that digital menu boards are just extremely well tailored for us, not to mention the increase in flexibility that they give you from a pricing perspective, a testing perspective, et cetera. We feel that the digital menu boards are a really transformative investment for us for 2023. Some of the momentum that you already see, whether it's gift cards sales, LEANguini mix, or Make It a Meal, as our team continues to evolve and use data and do the AB testing to really optimize those, we feel there's a nice tailwind that we can have from the AB perspective as well as profit. Okay, great. Thanks to you both. Thank you. One moment for our next follow-up question. Our next follow-up question comes from Jake Bartlett from Truist. Your line is now open. Great. Thanks for taking the follow-up. A quick one here. On the CapEx, you know, how much of that CapEx you're guiding to in 2023, is gonna be the menu boards or other kind of, you know, maybe digital initiative that's gonna be temporary in nature? I'm just kind of wondering, just trying to figure out how CapEx would trend after that. Then, and then also, you know, I don't know if, Carl, if you can tell us whether you think that, given the CapEx guide, whether you think free cash flow would be positive or negative, maybe flat, you know, in 2023? Sure. In terms of the CapEx guidance, a majority of this, as you alluded to, is our growth initiatives regarding the new restaurant openings and the anticipated investment in the digital menu boards. Maintenance CapEx is around $5 million, really the majority here is those investments. As we think about our free cash flow position for 2023, we do anticipate that our operating free cash flow is supportive of these capital investments that we're making. And having said that, we do feel very good about our liquidity position. We have $75 million available to us in liquidity with our new credit agreement that remains highly favorable and flexible to us. Feel like we're in a good position from a liquidity and capital spend perspective. Got it. just in, the menu board rollout, that's just happening in 2023. Is that, is that right? Or is that something that would spread into 2024? I'm just trying to figure out, you know, when that goes away, what you know, if there's a way you can help us understand what the menu board rollout is. Sure. how that's impacting, CapEx. Yeah. That, no, that's correct. What can you expect from a debt perspective or a free cash flow perspective? Q1 naturally is the lowest seasonality that we have throughout the year. You can expect that there's going to be some negative free cash flow here during the Q1. As we implement the digital menu boards, as we go forward, beyond the investment in digital menu boards, we don't foresee any material type of investment along the lines of the digital menu boards, which are in the neighborhood of about $10 million, maybe a little bit north of that for 2023. It's kind of a one-time investment to really bring the restaurants up to speed. That said, that investment we feel has a high return based on everything I talked about earlier in terms of our ability to be flexible, to be able to drive check, to be able to drive traffic and brand regard, as well as it does reduce some costs in terms of the physical menu boards and all of the investment that occurred every time that you do a physical menu board layouts change. Great. Thank you so much. Thank you. I'm showing no further questions. I would now like to turn the call back over to Dave Boennighausen for closing remarks. Thanks, Justin, thank you again everyone for your time. We achieved strong same-store sales, significant margin expansion, outsized EBITDA growth in Q4, and we feel we have strong visibility into continued expansion here into 2023. Combined with a strong new unit pipeline, we look forward to the balance of the year and discussing our progress in future calls. Have a great day. This concludes today's conference call. Thank you for participating. You may now disconnect.