Denny’s Corporation Reports Results for First Quarter 2021

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Tuesday, May 4, 2021 - 9:05pm
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Denny's Corporation
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SPARTANBURG, S.C., May 04, 2021 (GLOBE NEWSWIRE) -- Denny’s Corporation (NASDAQ: DENN), franchisor and operator of one of America's largest franchised full-service restaurant chains, today reported results for its first quarter ended March 31, 2021 and provided a business update on the impact of the COVID-19 pandemic on the Company’s operations.

John Miller, Chief Executive Officer, stated, “We entered 2021 confident in the resilience of Denny's given the strength of our franchisees and team that continues to persevere and deliver a great experience to our guests. Our initial optimism is now being supported by sequential sales improvements, as our dining rooms have reopened in various capacities with the increase of vaccine distributions. The easing of dine-in restrictions, coupled with fiscal stimulus and the rollout of our new virtual brands, have resulted in our same-store sales trending toward pre-pandemic levels."

First Quarter 2021 Highlights

  • Total Operating Revenue was $80.6 million.
  • Domestic system-wide same-store sales** decreased 20.0% compared to the equivalent fiscal period in 2019.
  • Domestic system-wide same-store sales** decreased 9.7% compared to the equivalent fiscal period in 2020.
  • Opened three franchised restaurants, including two international locations.
  • Operating Income was $5.5 million.
  • Franchise Operating Margin* was $23.2 million, or 49.5% of franchise and license revenue, and Company Restaurant Operating Margin* was $3.4 million, or 10.1% of company restaurant sales.
  • Net Income was $23.2 million, or $0.35 per diluted share.
  • Adjusted Net Income* was $0.5 million, or $0.01 per diluted share.
  • Adjusted EBITDA* was $11.8 million.
  • Cash provided by operating, investing, and financing activities was $10.2 million, $0.2 million, and $0.2 million, respectively.
  • Adjusted Free Cash Flow* was $5.2 million.

Current Trends

Domestic system-wide same-store sales** sequentially improved on a monthly basis during the first quarter ended March 31, 2021, compared to the equivalent fiscal periods in 2019. This is due to expanding vaccine deployment which has led to the easing of stay-at-home orders and capacity restrictions. As the number of Denny's restaurants operating with open dining rooms steadily improved to 98% of the domestic system, off-premise sales have remained strong.

Additionally, the Company began a phased rollout of its first virtual brand, The Burger Den, during the first quarter. In April 2021, the Burger Den rollout was substantially complete at over 1,100 domestic locations, and the Company began the phased rollout of its second virtual brand, The Meltdown. Transactions for these two virtual brands are highly incremental and leverage labor during underutilized dayparts.

Furthermore, subsequent to the end of the first quarter, the Company paid down an additional $15 million on its revolving credit facility bringing the outstanding balance as of April 30, 2021 to $200 million.

In an effort to provide greater transparency due to the COVID-19 pandemic, Denny's is providing the following tables that present monthly results for 2021 compared to the equivalent fiscal periods in 2019:

Domestic System-Wide Same-Store Sales** Compared to 2019 Fiscal Periods and Domestic Average Units for 2021 Fiscal Periods

  Domestic System-Wide Same-Store Sales**  
  Fiscal Year 20211  
  Jan Feb Mar Apr 1  
System (31%) (25%) (9%) (2%)  
           
Open Dining Rooms (15%) (17%) (5%) (2%)  
Closed Dining Rooms (55%) (40%) (23%) (7%)  
           
24/7 Units (20%) (16%) 2% 11%  
Limited Hour Units (38%) (32%) (16%) (11%)  
  1. April results are preliminary.  


  Domestic Average Units  
  Fiscal Year 20211  
  Jan Feb Mar Apr 1  
System 1,504 1,501 1,501 1,498  
           
Open Dining Rooms 927 1,038 1,253 1,472  
Closed Dining Rooms 531 422 228 15  
           
24/7 Units 519 532 569 565  
Limited Hour Units 939 928 912 922  
           
Temporary Closures 46 41 20 11  
  1. April results are preliminary.  


  Domestic Capacity Restrictions as of April 30, 20211:
  % of Domestic System
  75% Capacity or Social Distancing 39%
  50% - 66% Capacity 29%
  25% - 33% Capacity 9%
  Off-Premise Only 1%
  No Restrictions 22%
  Temporarily Closed <1%
  Total 100%
  1. Preliminary results.  
     

First Quarter Results

Denny’s total operating revenue was $80.6 million compared to $96.7 million in the prior year quarter. Franchise and license revenue was $47.0 million compared to $54.4 million in the prior year quarter. Company restaurant sales were $33.6 million compared to $42.3 million in the prior year quarter. These changes were primarily due to the impact of the COVID-19 pandemic on sales and fewer equivalent units.

Franchise Operating Margin* was $23.2 million, or 49.5% of franchise and license revenue, compared to $25.2 million, or 46.4%, in the prior year quarter. This margin decrease was primarily due to the impact of the COVID-19 pandemic on sales and fewer equivalent units, partially offset by abatements and bad debt expense recorded in the prior year quarter.

Company Restaurant Operating Margin* was $3.4 million, or 10.1% of company restaurant sales, compared to $6.2 million, or 14.6%, in the prior year quarter. This change in margin was primarily due to the impact of the COVID-19 pandemic on sales and fewer equivalent units.

Total general and administrative expenses were $16.9 million, compared to $7.7 million in the prior year quarter. This change was primarily due to increases in share-based compensation expense, market valuation changes in the Company's deferred compensation plan liabilities, and performance-based incentive compensation compared to the prior year quarter. These increases were partially offset by a $0.9 million improvement in corporate administrative expenses related to previous reductions in personnel due to the COVID-19 pandemic and other cost savings initiatives.

Denny’s ended the quarter with $229.9 million of total debt outstanding, including $215.0 million of borrowings under its credit facility.

The provision for income taxes was $8.1 million, compared to $2.3 million in the prior year quarter, reflecting an effective tax rate of 25.9%. Approximately $0.4 million in cash taxes were paid during the quarter.

Net income was $23.2 million, or $0.35 per diluted share, compared to net income of $9.0 million, or $0.16 per diluted share, in the prior year quarter. Adjusted Net Income* per diluted share was $0.01 compared to Adjusted Net Income* per diluted share of $0.17 in the prior year quarter.

Adjusted Free Cash Flow* and Capital Allocation

Denny’s Adjusted Free Cash Flow* in the quarter was $5.2 million after investing $1.6 million in cash capital expenditures, including maintenance capital.

Business Outlook

Given the dynamic and evolving impact of the COVID-19 pandemic on the Company's operations and uncertainty about the timing and extent of an anticipated recovery, the Company cannot reasonably provide a business outlook for the fiscal year ending December 29, 2021 at this time.

* Please refer to the Reconciliation of Net Income and Net Cash Provided by Operating Activities to Non-GAAP Financial Measures, as well as the Reconciliation of Operating Income to Non-GAAP Financial Measures included in the following tables.
   
** Same-store sales include sales at company restaurants and non-consolidated franchised and licensed restaurants that were open during the comparable periods noted. Total operating revenue is limited to company restaurant sales and royalties, advertising revenue, fees and occupancy revenue from non-consolidated franchised and licensed restaurants. Accordingly, domestic franchise same-store sales and domestic system-wide same-store sales should be considered as a supplement to, not a substitute for, the Company's results as reported under GAAP.

Conference Call and Webcast Information

Denny’s will provide further commentary on the results for the first quarter ended March 31, 2021 on its quarterly investor conference call today, Tuesday, May 4, 2021 at 4:30 p.m. Eastern Time. Interested parties are invited to listen to a live broadcast of the conference call accessible through the investor relations section of Denny’s website at investor.dennys.com.

About Denny’s

Denny's Corporation is the franchisor and operator of one of America's largest franchised full-service restaurant chains, based on the number of restaurants. As of March 31, 2021, Denny’s had 1,649 franchised, licensed, and company restaurants around the world including 148 restaurants in Canada, Puerto Rico, Mexico, the Philippines, New Zealand, Honduras, the United Arab Emirates, Costa Rica, Guam, Guatemala, El Salvador, Indonesia, and the United Kingdom. For further information on Denny's, including news releases, links to SEC filings, and other financial information, please visit the Denny's investor relations website at investor.dennys.com.

 

Cautionary Language Regarding Forward-Looking Statements

The Company urges caution in considering its current trends and any outlook on earnings disclosed in this press release. In addition, certain matters discussed in this release may constitute forward-looking statements. These forward-looking statements, which reflect management's best judgment based on factors currently known, are intended to speak only as of the date such statements are made and involve risks, uncertainties, and other factors that may cause the actual performance of Denny’s Corporation, its subsidiaries, and underlying restaurants to be materially different from the performance indicated or implied by such statements. Words such as “expect”, “anticipate”, “believe”, “intend”, “plan”, “hope”, "will", and variations of such words and similar expressions are intended to identify such forward-looking statements. Except as may be required by law, the Company expressly disclaims any obligation to update these forward-looking statements to reflect events or circumstances after the date of this release or to reflect the occurrence of unanticipated events. Factors that could cause actual performance to differ materially from the performance indicated by these forward-looking statements include, among others: the rapidly evolving COVID-19 pandemic and related containment measures, including the potential for further operational disruption from government mandates affecting restaurants; economic, public health, social and political conditions that impact consumer confidence and spending with respect to social unrest and the COVID-19 pandemic; competitive pressures from within the restaurant industry; the level of success of the Company’s operating initiatives and advertising and promotional efforts; adverse publicity; health concerns arising from food-related pandemics, outbreaks of flu viruses or other diseases; changes in business strategy or development plans; terms and availability of capital; regional weather conditions; overall changes in the general economy (including with regard to energy costs), particularly at the retail level; political environment (including acts of war and terrorism); and other factors from time to time set forth in the Company’s SEC reports and other filings, including but not limited to the discussion in Management’s Discussion and Analysis and the risks identified in Item 1A. Risk Factors contained in the Company’s Annual Report on Form 10-K for the year ended December 30, 2020 (and in the Company’s subsequent Quarterly Reports on Form 10-Q and Current Reports on Form 8-K).

 
 
DENNY’S CORPORATION
Condensed Consolidated Balance Sheets
(Unaudited)
             
(In thousands) 3/31/21   12/30/20
Assets      
  Current assets      
    Cash and cash equivalents $ 14,508       $ 3,892    
    Investments 2,064       2,272    
    Receivables, net 20,821       21,349    
    Assets held for sale 1,620       1,125    
    Other current assets 14,721       20,028    
      Total current assets 53,734       48,666    
  Property, net 83,963       86,154    
  Financing lease right-of-use assets, net 9,401       9,830    
  Operating lease right-of-use assets, net 135,004       139,534    
  Goodwill 36,884       36,884    
  Intangible assets, net 51,226       51,559    
  Deferred income taxes, net 18,052       23,210    
  Other noncurrent assets, net 34,661       35,112    
      Total assets $ 422,925       $ 430,949    
             
Liabilities      
  Current liabilities      
    Current finance lease liabilities $ 1,808       $ 1,839    
    Current operating lease liabilities 16,210       16,856    
    Accounts payable 10,632       12,021    
    Other current liabilities 47,169       46,462    
      Total current liabilities 75,819       77,178    
  Long-term liabilities      
    Long-term debt 215,000       210,000    
    Noncurrent finance lease liabilities 13,116       13,530    
    Noncurrent operating lease liabilities 133,051       137,534    
    Other 88,011       123,153    
      Total long-term liabilities 449,178       484,217    
      Total liabilities 524,997       561,395    
             
Shareholders' deficit      
    Common stock 641       640    
    Paid-in capital 125,950       123,833    
    Deficit (171,333 )     (194,514 )  
    Accumulated other comprehensive loss, net (57,330 )     (60,405 )  
      Total shareholders' deficit (102,072 )     (130,446 )  
      Total liabilities and shareholders' deficit $ 422,925       $ 430,949    
             
Debt Balances
(In thousands) 3/31/21   12/30/20
Credit facility revolver due 2022 $ 215,000       $ 210,000    
Finance lease liabilities 14,924       15,369    
  Total debt $ 229,924       $ 225,369    


 
DENNY’S CORPORATION
Condensed Consolidated Statements of Operations
(Unaudited)
           
      Quarter Ended
(In thousands, except per share amounts) 3/31/21   3/25/20
Revenue:      
  Company restaurant sales $ 33,569       $ 42,291    
  Franchise and license revenue 47,007       54,404    
    Total operating revenue 80,576       96,695    
Costs of company restaurant sales, excluding depreciation and amortization 30,164       36,118    
Costs of franchise and license revenue, excluding depreciation and amortization 23,758       29,170    
General and administrative expenses 16,947       7,742    
Depreciation and amortization 3,661       4,146    
Operating (gains), losses and other charges, net 532       1,473    
    Total operating costs and expenses, net 75,062       78,649    
Operating income 5,514       18,046    
Interest expense, net 4,277       3,951    
Other nonoperating expense (income), net (30,048 )     2,763    
Income before income taxes 31,285       11,332    
Provision for income taxes 8,104       2,319    
Net income $ 23,181       $ 9,013    
           
           
Basic net income per share $ 0.36       $ 0.16    
Diluted net income per share $ 0.35       $ 0.16    
           
Basic weighted average shares outstanding 65,251       56,300    
Diluted weighted average shares outstanding 65,749       58,106    
           
Comprehensive income (loss) $ 26,256       $ (23,659 )  
       
General and Administrative Expenses Quarter Ended
(In thousands) 3/31/21   3/25/20
Corporate administrative expenses $ 10,872       $ 11,781    
Share-based compensation 3,472       (1,537 )  
Incentive compensation 2,086       14    
Deferred compensation valuation adjustments 517       (2,516 )  
  Total general and administrative expenses $ 16,947       $ 7,742    


 
DENNY’S CORPORATION
Reconciliation of Net Income and Net Cash Provided by Operating Activities to Non-GAAP Financial Measures
(Unaudited)

The Company believes that, in addition to GAAP measures, certain non-GAAP financial measures are appropriate indicators to assist in the evaluation of operating performance and liquidity on a period-to-period basis. The Company uses Adjusted EBITDA, Adjusted Free Cash Flow, Adjusted Net Income and Adjusted Net Income Per Share internally as performance measures for planning purposes, including the preparation of annual operating budgets, and for compensation purposes, including incentive compensation for certain employees. Adjusted EBITDA is also used in the calculation of financial covenant ratios in accordance with the Company’s credit facility. Adjusted Free Cash Flow is also used as a non-GAAP liquidity measure by Management to assess the Company’s ability to generate cash and plan for future operating and capital actions. Management believes that the presentation of Adjusted EBITDA, Adjusted Net Income, Adjusted Net Income Per Share and Adjusted Free Cash Flow provide useful information to investors and analysts about the Company’s operating results, financial condition or cash flows. However, each of these non-GAAP financial measures should be considered as a supplement to, not a substitute for, operating income, net income, net cash provided by operating activities, or other financial performance and liquidity measures prepared in accordance with U.S. generally accepted accounting principles.

  Quarter Ended
(In thousands) 3/31/21   3/25/20
Net income $ 23,181       $ 9,013    
Provision for income taxes 8,104       2,319    
Operating (gains), losses and other charges, net 532       1,473    
Other nonoperating expense (income), net (30,048 )     2,763    
Share-based compensation expense (benefit) 3,472       (1,537 )  
Deferred compensation plan valuation adjustments 517       (2,516 )  
Interest expense, net 4,277       3,951    
Depreciation and amortization 3,661       4,146    
Cash payments for restructuring charges and exit costs (405 )     (684 )  
Cash payments for share-based compensation (1,496 )     (3,211 )  
Adjusted EBITDA $ 11,795       $ 15,717    
       


DENNY’S CORPORATION
Reconciliation of Net Income and Net Cash Provided by Operating Activities to Non-GAAP Financial Measures
(Unaudited)
      Quarter Ended
(In thousands) 3/31/21   3/25/20
Net cash provided by operating activities $ 10,235       $ 1,901    
Capital expenditures (1,583 )     (2,818 )  
Cash payments for restructuring charges and exit costs (405 )     (684 )  
Cash payments for share-based compensation (1,496 )     (3,211 )  
Deferred compensation plan valuation adjustments 517       (2,516 )  
Other nonoperating expense (income), net (30,048 )     2,763    
Gains (losses) on investments (8 )     116    
Losses on termination of leases (34 )     (28 )  
Amortization of deferred financing costs (344 )     (152 )  
Gains on interest rate swap derivatives, net 29,733          
Interest expense, net 4,277       3,951    
Cash interest expense, net (1) (4,586 )     (3,720 )  
Deferred income tax (expense) benefit (4,099 )     2,577    
Provision for income taxes 8,104       2,319    
Income taxes paid, net (421 )     (224 )  
Changes in operating assets and liabilities      
Receivables (353 )     (15,815 )  
Inventories (13 )     4    
Other current assets (5,294 )     (4,111 )  
Other noncurrent assets 201       (1,578 )  
Operating lease assets and liabilities 604       18    
Accounts payable (1,820 )     7,465    
Accrued payroll 1,704       12,783    
Accrued taxes 380       971    
Other accrued liabilities (1,195 )     6,337    
Other noncurrent liabilities 1,149       2,607    
Adjusted Free Cash Flow $ 5,205       $ 8,955    


(1) Includes cash interest expense, net and cash payments of approximately $0.8 million for dedesignated interest rate swap derivatives for the quarter ended March 31, 2021.


 
DENNY’S CORPORATION
Reconciliation of Net Income and Net Cash Provided by Operating Activities to Non-GAAP Financial Measures
(Unaudited)
      Quarter Ended
(In thousands) 3/31/21   3/25/20
Adjusted EBITDA $ 11,795       $ 15,717    
Cash interest expense, net (1) (4,586 )     (3,720 )  
Cash paid for income taxes, net (421 )     (224 )  
Cash paid for capital expenditures (1,583 )     (2,818 )  
Adjusted Free Cash Flow $ 5,205       $ 8,955    
       
  Quarter Ended
(In thousands, except per share amounts) 3/31/21   3/25/20
Net income $ 23,181       $ 9,013    
Gains on interest rate swap derivatives, net (29,733 )        
Gains on sales of assets and other, net (942 )     (1,070 )  
Impairment charges       2,181    
Tax effect (2) 7,945       (228 )  
Adjusted Net Income $ 451       $ 9,896    
       
Diluted weighted average shares outstanding 65,749       58,106    
       
Diluted Net Income Per Share $ 0.35       $ 0.16    
Adjustments Per Share $ (0.34 )     $ 0.01    
Adjusted Net Income Per Share $ 0.01       $ 0.17    
           


(1) Includes cash interest expense, net and cash payments of approximately $0.8 million for dedesignated interest rate swap derivatives for the quarter ended March 31, 2021.
(2) Tax adjustments for the quarter ended March 31, 2021 reflect an effective tax rate of 25.9%. Tax adjustments for the quarter ended March 25, 2020 are calculated using an effective tax rate of 20.5%.


 
DENNY’S CORPORATION
Reconciliation of Operating Income to Non-GAAP Financial Measures
(Unaudited)

The Company believes that, in addition to GAAP measures, certain other non-GAAP financial measures are appropriate indicators to assist in the evaluation of restaurant-level operating efficiency and performance of ongoing restaurant-level operations. The Company uses Restaurant-level Operating Margin, Company Restaurant Operating Margin and Franchise Operating Margin internally as performance measures for planning purposes, including the preparation of annual operating budgets, and these three non-GAAP measures are used to evaluate operating effectiveness.

The Company defines Restaurant-level Operating Margin as operating income excluding the following three items: general and administrative expenses, depreciation and amortization, and operating (gains), losses and other charges, net. Restaurant-level Operating Margin is presented as a percent of total operating revenue. The Company excludes general and administrative expenses, which include primarily non-restaurant-level costs associated with support of company and franchised restaurants and other activities at their corporate office. The Company excludes depreciation and amortization expense, substantially all of which is related to company restaurant-level assets, because such expenses represent historical sunk costs which do not reflect current cash outlays for the restaurants. The Company excludes special items, included within operating (gains), losses and other charges, net, to provide investors with a clearer perspective of its ongoing operating performance and a more relevant comparison to prior period results.

Restaurant-level Operating Margin is the total of Company Restaurant Operating Margin and Franchise Operating Margin. The Company defines Company Restaurant Operating Margin as company restaurant sales less costs of company restaurant sales (which include product costs, company restaurant level payroll and benefits, occupancy costs, and other operating costs including utilities, repairs and maintenance, marketing and other expenses) and presents it as a percent of company restaurant sales. The Company defines Franchise Operating Margin as franchise and license revenue (which includes franchise royalties and other non-food and beverage revenue streams such as initial franchise fees, advertising revenue and occupancy revenue) less costs of franchise and license revenue and presents it as a percent of franchise and license revenue.

These non-GAAP financial measures provide a meaningful comparison between periods and enable investors to focus on the performance of restaurant-level operations by excluding revenues and costs unrelated to food and beverage sales in addition to corporate general and administrative expense, depreciation and amortization, and operating (gains), losses and other charges, net. However, each of these non-GAAP financial measures should be considered as a supplement to, not a substitute for, operating income, net income or other financial performance measures prepared in accordance with U.S. generally accepted accounting principles. Restaurant-level Operating Margin, Company Restaurant Operating Margin and Franchise Operating Margin do not accrue directly to the benefit of shareholders because of the aforementioned excluded items, and are not indicative of the overall results for the Company.

  Quarter Ended
(In thousands) 3/31/21   3/25/20
Operating income $ 5,514     $ 18,046  
General and administrative expenses 16,947     7,742  
Depreciation and amortization 3,661     4,146  
Operating (gains), losses and other charges, net 532     1,473  
Restaurant-level Operating Margin $ 26,654     $ 31,407  
       
Restaurant-level Operating Margin consists of:      
Company Restaurant Operating Margin (1) $ 3,405     $ 6,173  
Franchise Operating Margin (2) 23,249     25,234  
Restaurant-level Operating Margin $ 26,654     $ 31,407  


(1) Company Restaurant Operating Margin is calculated as operating income plus general and administrative expenses; depreciation and amortization; operating (gains), losses and other charges, net; and costs of franchise and license revenue; less franchise and license revenue.
(2) Franchise Operating Margin is calculated as operating income plus general and administrative expenses; depreciation and amortization; operating (gains), losses and other charges, net; and costs of company restaurant sales; less company restaurant sales.


 
DENNY’S CORPORATION
Operating Margins
(Unaudited)
             
        Quarter Ended
(In thousands) 3/31/21   3/25/20
Company restaurant operations: (1)          
  Company restaurant sales $ 33,569   100.0 %   $ 42,291   100.0 %
  Costs of company restaurant sales:          
    Product costs 8,272   24.6 %   10,130   24.0 %
    Payroll and benefits 12,965   38.6 %   17,106   40.4 %
    Occupancy 2,850   8.5 %   3,163   7.5 %
    Other operating costs:          
      Utilities 1,225   3.6 %   1,436   3.4 %
      Repairs and maintenance 533   1.6 %   789   1.9 %
      Marketing 967   2.9 %   1,119   2.6 %
      Other direct costs 3,352   10.0 %   2,375   5.6 %
  Total costs of company restaurant sales $ 30,164   89.9 %   $ 36,118   85.4 %
  Company restaurant operating margin (non-GAAP) (2) $ 3,405   10.1 %   $ 6,173   14.6 %
                 
Franchise operations: (3)          
  Franchise and license revenue:          
  Royalties $ 20,844   44.4 %   $ 23,847   43.8 %
  Advertising revenue 14,111   30.0 %   17,526   32.2 %
  Initial and other fees 1,838   3.9 %   1,697   3.1 %
  Occupancy revenue 10,214   21.7 %   11,334   20.8 %
  Total franchise and license revenue $ 47,007   100.0 %   $ 54,404   100.0 %
                 
  Costs of franchise and license revenue:          
  Advertising costs $ 14,111   30.0 %   $ 17,526   32.2 %
  Occupancy costs 6,539   13.9 %   7,409   13.6 %
  Other direct costs 3,108   6.6 %   4,235   7.8 %
  Total costs of franchise and license revenue $ 23,758   50.5 %   $ 29,170   53.6 %
  Franchise operating margin (non-GAAP) (2) $ 23,249   49.5 %   $ 25,234   46.4 %
                 
Total operating revenue (4) $ 80,576   100.0 %   $ 96,695   100.0 %
Total costs of operating revenue (4) 53,922   66.9 %   65,288   67.5 %
Restaurant-level operating margin (non-GAAP) (4)(2) $ 26,654   33.1 %   $ 31,407   32.5 %
                 
Other operating expenses: (4)(2)          
  General and administrative expenses $ 16,947   21.0 %   $ 7,742   8.0 %
  Depreciation and amortization 3,661   4.5 %   4,146   4.3 %
  Operating (gains), losses and other charges, net 532   0.7 %   1,473   1.5 %
  Total other operating expenses $ 21,140   26.2 %   $ 13,361   13.8 %
                 
Operating income (4) $ 5,514   6.8 %   $ 18,046   18.7 %
                 
(1)   As a percentage of company restaurant sales.
(2)   Other operating expenses such as general and administrative expenses and depreciation and amortization relate to both company and franchise operations and are not allocated to costs of company restaurant sales and costs of franchise and license revenue. As such, operating margin is considered a non-GAAP financial measure. Operating margin should be considered as a supplement to, not as a substitute for, operating income, net income or other financial measures prepared in accordance with U.S. generally accepted accounting principles.
(3)   As a percentage of franchise and license revenue.
(4)   As a percentage of total operating revenue.


 
DENNY’S CORPORATION
Statistical Data
(Unaudited)
               
Changes in Same-Store Sales (1) Quarter Ended    
(decrease vs. 2019) 3/31/21        
  Company Restaurants (23.9 ) %        
  Domestic Franchised Restaurants (19.6 ) %        
  Domestic System-wide Restaurants (20.0 ) %        
               
Changes in Same-Store Sales (1) Quarter Ended    
(decrease vs. prior year) 3/31/21   3/25/20    
  Company Restaurants (9.4 ) %   (9.4 ) %    
  Domestic Franchised Restaurants (9.7 ) %   (6.0 ) %    
  Domestic System-wide Restaurants (9.7 ) %   (6.3 ) %    
               
Average Unit Sales Quarter Ended    
(In thousands) 3/31/21   3/25/20    
  Company Restaurants $ 523       $ 627        
  Franchised Restaurants $ 326       $ 384        
               
          Franchised    
Restaurant Unit Activity Company   & Licensed   Total
Ending Units December 30, 2020 65       1,585       1,650    
  Units Opened       3       3    
  Units Closed       (4 )     (4 )  
    Net Change       (1 )     (1 )  
Ending Units March 31, 2021 65       1,584       1,649    
               
Equivalent Units          
  Year-to-Date 2021 64       1,583       1,647    
  Year-to-Date 2020 67       1,631       1,698    
    Net Change (3 )     (48 )     (51 )  
               
(1) Same-store sales include sales at company restaurants and non-consolidated franchised and licensed restaurants that were open during the comparable periods noted. Total operating revenue is limited to company restaurant sales and royalties, advertising revenue, fees and occupancy revenue from non-consolidated franchised and licensed restaurants. Accordingly, domestic franchise same-store sales and domestic system-wide same-store sales should be considered as a supplement to, not a substitute for, the Company's results as reported under GAAP.


Investor Contact:
Curt Nichols
877-784-7167

Media Contact:
Hadas Streit, Allison+Partners
646-428-0629

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