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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported) February 12, 2025
DENNY’S CORPORATION
(Exact name of registrant as specified in its charter)
| | | | | | | | |
| Delaware | 0-18051 | 13-3487402 |
| (State or other jurisdiction | (Commission | (IRS Employer |
| of incorporation) | File Number) | Identification No.) |
203 East Main Street
Spartanburg, South Carolina 29319-0001
(Address of principal executive offices)
(Zip Code)
(864) 597-8000
(Registrant’s telephone number, including area code)
Not Applicable
(Former name or former address, if changed since last report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
☐ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
☐ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
☐ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
☐ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
Securities registered pursuant to Section 12(b) of the Act:
| | | | | | | | | | | | | | |
| Title of each class | | Trading Symbol(s) | | Name of each exchange on which registered |
| $.01 Par Value, Common Stock | | DENN | | The Nasdaq Stock Market LLC |
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging growth company ☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Item 2.02 Results of Operations and Financial Condition.
On February 12, 2025, Denny's Corporation (the "Company") issued a press release announcing financial results for the fourth quarter and year ended December 25, 2024. A copy of the press release is attached as Exhibit 99.1 hereto and incorporated herein by reference.
Item 7.01 Regulation FD Disclosure.
The management of the Company will conduct meetings with members of the investment community during February, March and April 2025. A copy of the investor presentation to be used during these meetings is attached to this Current Report on Form 8-K as Exhibit 99.2 and is also available at the Company's investor relations website at investor.dennys.com.
The information in this Item 7.01 of this Current Report on Form 8-K, including Exhibit 99.2 hereto, shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liabilities of that section. The information in this Item 7.01 of this Current Report on Form 8-K shall not be deemed to be incorporated by reference in any filing under the Securities Act of 1933, as amended, or the Exchange Act, except as expressly set forth by specific reference in such filing.
Item 9.01 Financial Statements and Exhibits.
(d) Exhibits
See the Exhibit Index below, which is incorporated by reference herein.
EXHIBIT INDEX
| | | | | |
Exhibit
number | Description |
| 99.1 | |
| 99.2 | |
| 104 | Cover Page Interactive Data File (formatted as Inline XBRL) |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
| | | | | |
| | Denny's Corporation |
| | |
| | |
| Date: February 12, 2025 | /s/ Robert P. Verostek |
| | Robert P. Verostek |
| | Executive Vice President and |
| | Chief Financial Officer |
DENNY’S CORPORATION REPORTS RESULTS FOR FOURTH QUARTER AND FULL YEAR 2024
SPARTANBURG, S.C., February 12, 2025 - Denny’s Corporation (the "Company") (NASDAQ: DENN), owner and operator of Denny's Inc. ("Denny's") and Keke's Inc. ("Keke's") today reported results for its fourth quarter and full year ended December 25, 2024 and provided a business update on the Company’s operations.
Kelli Valade, Chief Executive Officer, stated, "We are proud of our progress through 2024, culminating in strong performances from both Denny's and Keke's, which outperformed their respective BBI Family Dining indices in the fourth quarter. We have made significant progress in our strategy to enhance the overall health of our flagship brand by accelerating the closure of lower-volume restaurants and completing 23 remodels, and also opened a record number of Keke’s cafes while expanding into six new states. Looking ahead to 2025, there is still work to be done within our brands, particularly as we navigate near-term consumer sentiment that has been affected by macroeconomic factors. With the actions we are taking to maintain our position as a value leader, invest in our brands, reduce costs, and drive traffic, we are well positioned to deliver shareholder value.”
Fourth Quarter 2024 Highlights(1)
•Total operating revenue was $114.7 million compared to $115.4 million for the prior year quarter.
•Denny's domestic system-wide same-restaurant sales** were 1.1%.
•Keke's domestic system-wide same-restaurant sales** were 3.0%.
•Denny's opened four franchised restaurants and closed 30 franchise restaurants as part of the planned acceleration of lower-volume restaurant closures.
•Reignited Denny's Diner 2.0 remodel program and completed six remodels.
•Keke's opened eight new cafes and entered four new states including California, Colorado, Nevada, and Texas.
•Keke's expanded its first ever remodel test program to two additional company cafes.
•Operating income was $14.5 million compared to $7.7 million for the prior year quarter.
•Adjusted franchise operating margin* was $31.9 million, or 51.2% of franchise and license revenue, and adjusted company restaurant operating margin* was $5.9 million, or 11.3% of company restaurant sales.
•Net income was $6.8 million, or $0.13 per diluted share.
•Adjusted net income* and adjusted net income per share* were $7.6 million and $0.14, respectively.
•Adjusted EBITDA* of $22.2 million increased 11.1% compared to the prior year quarter.
Full Year 2024 Highlights(1)
•Total operating revenue was $452.3 million compared to $463.9 million for the prior year.
•Denny's domestic system-wide same-restaurant sales** were (0.2%).
•Keke's domestic system-wide same-restaurant sales** were (1.7%).
•Denny's opened 14 franchised restaurants and closed 88 restaurants as part of the planned acceleration of lower-volume restaurant closures.
•Reignited Denny's Diner 2.0 remodel program and completed 23 remodels, including seven at company restaurants, or over 11% of the Denny's company fleet.
•Record 12 Keke's openings in a single year, while growing to six different states.
•Completed three Keke's remodels at company cafes.
•Operating income was $45.3 million compared to $52.8 million for the prior year.
•Adjusted franchise operating margin* was $123.0 million, or 51.1% of franchise and license revenue, and adjusted company restaurant operating margin* was $25.8 million, or 12.2% of company restaurant sales.
•Net income was $21.6 million, or $0.41 per diluted share.
•Adjusted net income* and adjusted net income per share* were $28.6 million and $0.54, respectively.
•Adjusted EBITDA* was $81.4 million.
(1) The Company has evolved its definition of non-GAAP measures. Please see the definitions, explanations, and reconciliations further in this release.
Fourth Quarter 2024 Results
Total operating revenue was $114.7 million compared to $115.4 million for the prior year quarter.
Franchise and license revenue was $62.3 million compared to $61.3 million for the prior year quarter. This change was primarily driven by higher local advertising co-op contributions for the current quarter and positive same-restaurant sales** at both brands, partially offset by decreases in equivalent units and franchise occupancy revenue at Denny's.
Company restaurant sales were $52.4 million compared to $54.0 million for the prior year quarter. This change was primarily driven by six fewer Denny's equivalent units, including three refranchised units, partially offset by three additional Keke's equivalent units for the current quarter.
Adjusted franchise operating margin* was $31.9 million, or 51.2% of franchise and license revenue, compared to $31.5 million, or 51.4% for the prior year quarter. This margin increase was primarily driven by positive same-restaurant sales** at both brands, partially offset by fewer Denny's equivalent units.
Adjusted company restaurant operating margin* was $5.9 million, or 11.3% of company restaurant sales, compared to $6.1 million, or 11.4% for the prior year quarter. This margin change was primarily due to investments in marketing and expected new cafe opening inefficiencies, partially offset by lower legal settlement expense.
Total general and administrative expenses were $18.7 million compared to $19.3 million in the prior year quarter. This change was due to lower deferred compensation valuation adjustments, corporate administrative expenses, and incentive compensation.
The provision for income taxes was $3.5 million, reflecting an effective tax rate of 33.8% for the current quarter.
Net income was $6.8 million, or $0.13 per diluted share. Adjusted net income* per share was $0.14.
The Company ended the quarter with $271.9 million of total debt outstanding, including $261.3 million of borrowings under its credit facility.
Capital Allocation
The Company invested $10.9 million in cash capital expenditures during the current quarter, and $28.6 million on the full year, which included Keke's new cafe development and company remodels at both brands.
The Company also allocated $11.2 million to share repurchases for the full year resulting in approximately $89.2 million remaining under its existing repurchase authorization.
Business Outlook
The following full year 2025 (53 operating weeks) expectations reflect performance through the first six fiscal weeks and the expectation that recent shifts in consumer sentiment due to macro events will moderate over time.
•Denny's domestic system-wide same-restaurant sales** between (2.0%) and 1.0%.
•Consolidated restaurant openings of 25 to 40.
•Consolidated restaurant closures between 70 and 90.
•Commodity inflation between 2.0% and 4.0%.
•Labor inflation between 2.5% and 3.5%.
•Total general and administrative expenses between $80 million and $85 million, inclusive of:
◦Corporate and administrative expenses between $60 million and $62 million, including approximately $1 million related to the 53rd week;
◦Incentive compensation between $6 million and $9 million; and,
◦Approximately $14 million related to share-based compensation expense which does not impact Adjusted EBITDA*.
•Adjusted EBITDA* between $80 million and $85 million, inclusive of approximately $2 million related to the 53rd week.
•Share repurchases between $15 million and $25 million.
* Please refer to the Reconciliation of Net Income to Non-GAAP Financial Measures, as well as the Reconciliation of Operating Income to Non-GAAP Financial Measures included in the tables below. The Company is not able to reconcile the forward-looking non-GAAP estimate set forth above to its most directly comparable U.S. generally accepted accounting principles (GAAP) estimates without unreasonable efforts because it is unable to predict, forecast or determine the probable significance of the items impacting these estimates, including gains, losses and other charges, with a reasonable degree of accuracy. Accordingly, the most directly comparable forward-looking GAAP estimate is not provided.
** Same-restaurant 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, initial and other fees and occupancy revenue from non-consolidated franchised and licensed restaurants. Accordingly, domestic franchise same-restaurant sales and domestic system-wide same-restaurant 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
The Company will provide further commentary on the results for the fourth quarter ended December 25, 2024 on a webcast today, Wednesday, February 12, 2025 at 8:30 a.m. Eastern Time. Interested parties are invited to listen to the webcast accessible through the Company's investor relations website at investor.dennys.com.
About Denny's Corporation
Denny’s Corporation is one of America’s largest full-service restaurant chains based on number of restaurants. As of December 25, 2024, the Company consisted of 1,568 restaurants, 1,493 of which were franchised and licensed restaurants and 75 of which were company operated.
The Company consists of the Denny’s brand and the Keke’s brand. As of December 25, 2024, the Denny's brand consisted of 1,499 global restaurants, 1,438 of which were franchised and licensed restaurants and 61 of which were company operated. As of December 25, 2024, the Keke's brand consisted of 69 restaurants, 55 of which were franchised restaurants and 14 of which were company operated.
For further information on Denny's Corporation, including news releases, links to SEC filings, and other financial information, please visit investor.dennys.com.
Non-GAAP Definition Changes
The Company has evolved its definition of non-GAAP financial measures to provide more clarity and comparability relative to peers. Denny's Corporation management uses certain non-GAAP measures in analyzing operating performance and believes that the presentation of these measures provides investors and analysts with information that is beneficial to gaining an understanding of the Company's financial results. Non-GAAP disclosures should not be viewed as a substitute for financial results determined in accordance with GAAP.
The Company excludes certain legal settlement expenses not considered to be normal and recurring, pre-opening expenses, and other items management does not consider in the evaluation of its ongoing core operating performance from adjusted operating margin*, adjusted net income*, adjusted net income per share*, and adjusted EBITDA*. In addition, the Company no longer deducts cash payments for restructuring and exit costs, or cash payments for share-based compensation from Adjusted EBITDA*.
Reconciliations of these non-GAAP measures are included in the tables of this press release and a recast of historical non-GAAP financial measures can be found on the Company's website, or its most recent investor presentation.
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: economic, public health and political conditions that impact consumer confidence and spending, commodity and labor inflation; the ability to effectively staff restaurants and support personnel; the Company's ability to maintain adequate levels of liquidity for its cash needs, including debt obligations, payment of dividends, planned share repurchases and capital expenditures as well as the ability of its customers,
suppliers, franchisees and lenders to access sources of liquidity to provide for their own cash needs; competitive pressures from within the restaurant industry; the Company's ability to integrate and derive the expected benefits from its acquisition of Keke's Breakfast Cafe; 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 and geopolitical events (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 27, 2023 (and in the Company’s subsequent Quarterly Reports on Form 10-Q and Current Reports on Form 8-K).
Investor Contact: 877-784-7167
Media Contact: 864-597-8005
| | | | | | | | | | | | | | | | | | | | |
| DENNY’S CORPORATION |
| Consolidated Balance Sheets |
| (Unaudited) |
| | | | | | |
| ($ in thousands) | 12/25/24 | | 12/27/23 |
| Assets | | | |
| Current assets | | | |
| | Cash and cash equivalents | $ | 1,698 | | | $ | 4,893 | |
| | Investments | 1,106 | | | 1,281 | |
| | Receivables, net | 24,433 | | | 21,391 | |
| | Inventories | 1,747 | | | 2,175 | |
| | Assets held for sale | 381 | | | 1,455 | |
| | Prepaid and other current assets | 10,628 | | | 12,855 | |
| | | Total current assets | 39,993 | | | 44,050 | |
| Property, net | 111,417 | | | 93,494 | |
| Finance lease right-of-use assets, net | 6,200 | | | 6,098 | |
| Operating lease right-of-use assets, net | 124,738 | | | 116,795 | |
| Goodwill | 66,357 | | | 65,908 | |
| Intangible assets, net | 91,739 | | | 93,428 | |
| Deferred financing costs, net | 1,066 | | | 1,702 | |
| | | | |
| Other noncurrent assets | 54,764 | | | 43,343 | |
| | | Total assets | $ | 496,274 | | | $ | 464,818 | |
| | | | | | |
| Liabilities | | | |
| Current liabilities | | | |
| | | | | |
| | Current finance lease liabilities | $ | 1,284 | | | $ | 1,383 | |
| | Current operating lease liabilities | 15,487 | | | 14,779 | |
| | Accounts payable | 19,985 | | | 24,070 | |
| | Other current liabilities | 58,842 | | | 63,068 | |
| | | Total current liabilities | 95,598 | | | 103,300 | |
| Long-term liabilities | | | |
| | Long-term debt | 261,300 | | | 255,500 | |
| | Noncurrent finance lease liabilities | 9,284 | | | 9,150 | |
| | Noncurrent operating lease liabilities | 120,841 | | | 114,451 | |
| | Liability for insurance claims, less current portion | 5,866 | | | 6,929 | |
| | Deferred income taxes, net | 9,964 | | | 6,582 | |
| | Other noncurrent liabilities | 27,446 | | | 31,592 | |
| | | Total long-term liabilities | 434,701 | | | 424,204 | |
| | | Total liabilities | 530,299 | | | 527,504 | |
| | | | | | |
| Shareholders' deficit | | | |
| | Common stock | 513 | | | 529 | |
| | Paid-in capital | — | | | 6,688 | |
| | Deficit | (2,499) | | | (21,784) | |
| | Accumulated other comprehensive loss, net | (32,039) | | | (41,659) | |
| | Treasury stock | — | | | (6,460) | |
| | | Total shareholders' deficit | (34,025) | | | (62,686) | |
| | | Total liabilities and shareholders' deficit | $ | 496,274 | | | $ | 464,818 | |
| | | | | | |
| Debt Balances |
| Credit facility revolver due 2026 | $ | 261,300 | | | $ | 255,500 | |
| Finance lease liabilities | 10,568 | | | 10,533 | |
| | Total debt | $ | 271,868 | | | $ | 266,033 | |
| | | | | | | | | | | | | | | | | |
| DENNY’S CORPORATION |
Condensed Consolidated Statements of Income |
| (Unaudited) |
| | | | | |
| | | Quarter Ended |
| ($ in thousands, except per share amounts) | 12/25/24 | | 12/27/23 |
| Revenue: | | | |
| Company restaurant sales | $ | 52,390 | | | $ | 54,046 | |
| Franchise and license revenue | 62,284 | | | 61,307 | |
| | Total operating revenue | 114,674 | | | 115,353 | |
| Costs of company restaurant sales, excluding depreciation and amortization | 47,228 | | | 48,646 | |
| Costs of franchise and license revenue, excluding depreciation and amortization | 30,425 | | | 29,795 | |
| General and administrative expenses | 18,658 | | | 19,255 | |
| Depreciation and amortization | 3,919 | | | 3,507 | |
| Goodwill impairment charges | — | | | 6,363 | |
| Operating (gains), losses and other charges, net | (10) | | | 63 | |
| | Total operating costs and expenses, net | 100,220 | | | 107,629 | |
| Operating income | 14,454 | | | 7,724 | |
| Interest expense, net | 4,410 | | | 4,309 | |
| Other nonoperating income, net | (222) | | | (1,182) | |
| Income before income taxes | 10,266 | | | 4,597 | |
| Provision for income taxes | 3,470 | | | 1,695 | |
| Net income | $ | 6,796 | | | $ | 2,902 | |
| | | | | |
| Net income per share - basic | $ | 0.13 | | | $ | 0.05 | |
| Net income per share - diluted | $ | 0.13 | | | $ | 0.05 | |
| | | | | |
| Basic weighted average shares outstanding | 52,103 | | | 53,648 | |
| Diluted weighted average shares outstanding | 52,258 | | | 53,893 | |
| | | | | |
| Comprehensive income (loss) | $ | 18,202 | | | $ | (10,997) | |
| | | |
| General and Administrative Expenses | |
| Corporate administrative expenses | $ | 15,504 | | | $ | 16,420 | |
| Share-based compensation | 2,272 | | | 403 | |
| Incentive compensation | 591 | | | 1,305 | |
| Deferred compensation valuation adjustments | 291 | | | 1,127 | |
| | Total general and administrative expenses | $ | 18,658 | | | $ | 19,255 | |
| | | | | | | | | | | | | | | | | |
| DENNY’S CORPORATION |
Condensed Consolidated Statements of Income |
| (Unaudited) |
| | | | | |
| | | Fiscal Year Ended |
| ($ in thousands, except per share amounts) | 12/25/24 | | 12/27/23 |
| Revenue: | | | |
| Company restaurant sales | $ | 211,781 | | | $ | 215,532 | |
| Franchise and license revenue | 240,553 | | | 248,390 | |
| | Total operating revenue | 452,334 | | | 463,922 | |
| Costs of company restaurant sales, excluding depreciation and amortization | 189,744 | | | 187,599 | |
| Costs of franchise and license revenue, excluding depreciation and amortization | 120,226 | | | 122,452 | |
| General and administrative expenses | 80,197 | | | 77,770 | |
| Depreciation and amortization | 14,857 | | | 14,385 | |
| Goodwill impairment charges | 20 | | | 6,363 | |
| Operating (gains), losses and other charges, net | 1,974 | | | 2,530 | |
| | Total operating costs and expenses, net | 407,018 | | | 411,099 | |
| Operating income | 45,316 | | | 52,823 | |
| Interest expense, net | 17,974 | | | 17,597 | |
| Other nonoperating (income) expense, net | (1,907) | | | 8,288 | |
| Income before income taxes | 29,249 | | | 26,938 | |
| Provision for income taxes | 7,678 | | | 6,993 | |
| Net income | $ | 21,571 | | | $ | 19,945 | |
| | | | | |
| Net income per share - basic | $ | 0.41 | | | $ | 0.36 | |
| Net income per share - diluted | $ | 0.41 | | | $ | 0.35 | |
| | | | | |
| Basic weighted average shares outstanding | 52,499 | | | 55,984 | |
| Diluted weighted average shares outstanding | 52,614 | | | 56,196 | |
| | | | | |
| Comprehensive income | $ | 31,191 | | | $ | 20,983 | |
| | | |
| General and Administrative Expenses | |
| Corporate administrative expenses | $ | 62,347 | | | $ | 60,339 | |
| Share-based compensation | 10,678 | | | 8,880 | |
| Incentive compensation | 5,459 | | | 6,640 | |
| Deferred compensation valuation adjustments | 1,713 | | | 1,911 | |
| | Total general and administrative expenses | $ | 80,197 | | | $ | 77,770 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| DENNY’S CORPORATION |
| Reconciliation of Net Income to Non-GAAP Financial Measures |
| (Unaudited) |
The Company believes that, in addition to GAAP measures, certain non-GAAP financial measures are useful information to investors and analysts to assist in the evaluation of operating performance on a period-to-period basis. However, non-GAAP measures should be considered as a supplement to, not a substitute for, operating income, net income, and net income per share, or other financial performance measures prepared in accordance with GAAP. The Company uses adjusted EBITDA, 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. These non-GAAP measures are adjusted for certain items the Company does not consider in the evaluation of its ongoing core operating performance. These adjustments are either non-recurring in nature or vary from period to period without correlation to the Company's ongoing core operating performance.
| | | | | | | | | | | | | | | | | | | | | | | |
| Quarter Ended | | Fiscal Year Ended |
($ in thousands, except per share amounts) | 12/25/24 | | 12/27/23 | | 12/25/24 | | 12/27/23 |
| Net income | $ | 6,796 | | | $ | 2,902 | | | $ | 21,571 | | | $ | 19,945 | |
| Provision for income taxes | 3,470 | | | 1,695 | | | 7,678 | | | 6,993 | |
| Goodwill impairment charges | — | | | 6,363 | | | 20 | | | 6,363 | |
Operating (gains), losses and other charges, net | (10) | | | 63 | | | 1,974 | | | 2,530 | |
| Other nonoperating (income) expense, net | (222) | | | (1,182) | | | (1,907) | | | 8,288 | |
| Share-based compensation expense | 2,272 | | | 403 | | | 10,678 | | | 8,880 | |
| Deferred compensation plan valuation adjustments | 291 | | | 1,127 | | | 1,713 | | | 1,911 | |
| Interest expense, net | 4,410 | | | 4,309 | | | 17,974 | | | 17,597 | |
| Depreciation and amortization | 3,919 | | | 3,507 | | | 14,857 | | | 14,385 | |
| Non-recurring legal settlement expenses | — | | | 590 | | | 2,165 | | | 679 | |
| Pre-opening expenses | 782 | | | 158 | | | 1,548 | | | 288 | |
Other adjustments (1) | 443 | | | — | | | 3,083 | | | — | |
| Adjusted EBITDA | $ | 22,151 | | | $ | 19,935 | | | $ | 81,354 | | | $ | 87,859 | |
| | | | | | | |
| Net income | $ | 6,796 | | | $ | 2,902 | | | $ | 21,571 | | | $ | 19,945 | |
| Losses and amortization on interest rate swap derivatives, net | 258 | | | 121 | | | 760 | | | 10,959 | |
| Goodwill impairment charges | — | | | 6,363 | | | 20 | | | 6,363 | |
| Operating (gains), losses and other charges, net | (10) | | | 63 | | | 1,974 | | | 2,530 | |
| Non-recurring legal settlement expenses | — | | | 590 | | | 2,165 | | | 679 | |
| Pre-opening expenses | 782 | | | 158 | | | 1,548 | | | 288 | |
Other adjustments (1) | 443 | | | — | | | 3,083 | | | — | |
Tax effect (2) | (719) | | | (2,054) | | | (2,512) | | | (5,205) | |
| Adjusted net income | $ | 7,550 | | | $ | 8,143 | | | $ | 28,609 | | | $ | 35,559 | |
| | | | | | | |
| Diluted weighted average shares outstanding | 52,258 | | | 53,893 | | | 52,614 | | | 56,196 | |
| | | | | | | |
| Net income per share - diluted | $ | 0.13 | | | $ | 0.05 | | | $ | 0.41 | | | $ | 0.35 | |
| Adjustments per share | 0.01 | | | 0.10 | | | 0.13 | | | 0.28 | |
| Adjusted net income per share | $ | 0.14 | | | $ | 0.15 | | | $ | 0.54 | | | $ | 0.63 | |
| | | | | |
| (1) | Other adjustments for the quarter ended December 25, 2024 include $0.4 million of leadership transition costs. Other adjustments for the year-to-date period ended December 25, 2024 include $0.4 million of leadership transition costs and a $2.6 million distribution to franchisees related to a review of advertising costs. |
| (2) | Tax adjustments for the quarter and year-to-date period ended December 25, 2024 reflect effective tax rates of 48.8% and 26.3%, respectively. Tax adjustments for the quarter and year-to-date period ended December 27, 2023 reflect effective tax rates of 28.2% and 25.0%, respectively. |
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| 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 useful information to investors and analysts to assist in the evaluation of restaurant-level operating efficiency and performance of ongoing restaurant-level operations. However, non-GAAP measures should be considered as a supplement to, not a substitute for, operating income, net income, and net income per share, or other financial performance measures prepared in accordance with GAAP. 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 for compensation purposes, including incentive compensation for certain employees.
Restaurant-level operating margin is the total of company restaurant operating margin and franchise operating margin and excludes: (i) 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; (ii) 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; (iii) 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.
Company restaurant operating margin is defined 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. Adjusted company operating restaurant margin is defined as company restaurant operating margin less certain items such as legal settlement expenses, pre-opening expenses, and other items the Company does not consider in the evaluation of its ongoing core operating performance.
Franchise operating margin is defined as franchise and license revenue (which includes franchise royalties and other non-food and beverage revenue streams such as initial franchise and other fees, advertising revenue and occupancy revenue) less costs of franchise and license revenue and presents it as a percent of franchise and license revenue. Adjusted franchise operating margin is defined as franchise operating margin less certain items the Company does not consider in the evaluation of its ongoing core operating performance.
Adjusted restaurant-level operating margin is the total of adjusted company restaurant operating margin and adjusted franchise operating margin and is defined as restaurant-level operating margin adjusted for certain items the Company does not consider in the evaluation of its ongoing core operating performance. These adjustments are either non-recurring in nature or vary from period to period without correlation to the Company's ongoing core operating performance.
| | | | | | | | | | | | | | | | | | | | | | | |
| Quarter Ended | | Fiscal Year Ended |
| ($ in thousands) | 12/25/24 | | 12/27/23 | | 12/25/24 | | 12/27/23 |
| Operating income | $ | 14,454 | | | $ | 7,724 | | | $ | 45,316 | | | $ | 52,823 | |
| General and administrative expenses | 18,658 | | | 19,255 | | | 80,197 | | | 77,770 | |
| Depreciation and amortization | 3,919 | | | 3,507 | | | 14,857 | | | 14,385 | |
| Goodwill impairment charges | — | | | 6,363 | | | 20 | | | 6,363 | |
| Operating (gains), losses and other charges, net | (10) | | | 63 | | | 1,974 | | | 2,530 | |
| Restaurant-level operating margin | $ | 37,021 | | | $ | 36,912 | | | $ | 142,364 | | | $ | 153,871 | |
| | | | | | | |
| Restaurant-level operating margin consists of: | | | | | | | |
Company restaurant operating margin (1) | $ | 5,162 | | | $ | 5,400 | | | $ | 22,037 | | | $ | 27,933 | |
Franchise operating margin (2) | 31,859 | | | 31,512 | | | 120,327 | | | 125,938 | |
| Restaurant-level operating margin | $ | 37,021 | | | $ | 36,912 | | | $ | 142,364 | | | $ | 153,871 | |
Adjustments (3) | 782 | | | 748 | | | 6,353 | | | 967 | |
| Adjusted restaurant-level operating margin | $ | 37,803 | | | $ | 37,660 | | | $ | 148,717 | | | $ | 154,838 | |
| | | | | |
| (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, excluding depreciation and amortization; 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, excluding depreciation and amortization; less company restaurant sales. |
| (3) | Adjustments include non-recurring legal settlement expenses, pre-opening costs, and other adjustments the Company does not consider in the evaluation of its ongoing core operating performance. Adjustments for the year-to-date period ended December 25, 2024 include a $2.6 million distribution to franchisees related to a review of advertising costs. |
| | | | | | | | | | | | | | | | | | | | | | | | | | |
| DENNY’S CORPORATION |
| Operating Margins |
| (Unaudited) |
| | | | | | |
| | | | Quarter Ended |
| ($ in thousands) | 12/25/24 | | 12/27/23 |
Company restaurant operations: (1) | | | | | |
| Company restaurant sales | $ | 52,390 | | 100.0 | % | | $ | 54,046 | | 100.0 | % |
| Costs of company restaurant sales, excluding depreciation and amortization: | | | | | |
| | Product costs | 13,377 | | 25.5 | % | | 13,993 | | 25.9 | % |
| | Payroll and benefits | 19,800 | | 37.8 | % | | 20,184 | | 37.3 | % |
| | Occupancy | 4,442 | | 8.5 | % | | 4,550 | | 8.4 | % |
| | Other operating costs: | | | | | |
| | | Utilities | 1,645 | | 3.1 | % | | 1,811 | | 3.4 | % |
| | | Repairs and maintenance | 1,046 | | 2.0 | % | | 994 | | 1.8 | % |
| | | Marketing | 2,511 | | 4.8 | % | | 1,396 | | 2.6 | % |
| | | Legal settlements | (109) | | (0.2) | % | | 1,827 | | 3.4 | % |
| | | Pre-opening costs | 782 | | 1.5 | % | | 158 | | 0.3 | % |
| | | Other direct costs | 3,734 | | 7.1 | % | | 3,733 | | 6.9 | % |
| Total costs of company restaurant sales, excluding depreciation and amortization | $ | 47,228 | | 90.1 | % | | $ | 48,646 | | 90.0 | % |
| Company restaurant operating margin (non-GAAP) (2) | $ | 5,162 | | 9.9 | % | | $ | 5,400 | | 10.0 | % |
| | | Adjustments (3) | 782 | 1.5 | % | | 748 | 1.4 | % |
| Adjusted company restaurant operating margin (non-GAAP) (2) | $ | 5,944 | | 11.3 | % | | $ | 6,148 | | 11.4 | % |
| | | | | | | | |
Franchise operations: (4) | | | | | |
| Franchise and license revenue: | | | | | |
| Royalties | $ | 30,284 | | 48.6 | % | | $ | 30,025 | | 49.0 | % |
| Advertising revenue | 20,875 | | 33.5 | % | | 19,676 | | 32.1 | % |
| Initial and other fees | 2,808 | | 4.5 | % | | 2,888 | | 4.7 | % |
| Occupancy revenue | 8,317 | | 13.4 | % | | 8,718 | | 14.2 | % |
| Total franchise and license revenue | $ | 62,284 | | 100.0 | % | | $ | 61,307 | | 100.0 | % |
| | | | | | | | |
| Costs of franchise and license revenue, excluding depreciation and amortization: | | | | | |
| Advertising costs | $ | 20,875 | | 33.5 | % | | $ | 19,676 | | 32.1 | % |
| Occupancy costs | 5,057 | | 8.1 | % | | 5,307 | | 8.7 | % |
| Other direct costs | 4,493 | | 7.2 | % | | 4,812 | | 7.8 | % |
| Total costs of franchise and license revenue, excluding depreciation and amortization | $ | 30,425 | | 48.8 | % | | $ | 29,795 | | 48.6 | % |
| Franchise operating margin (non-GAAP) (2) | $ | 31,859 | | 51.2 | % | | $ | 31,512 | | 51.4 | % |
| | Adjustments (3) | — | | — | % | | — | | — | % |
| Adjusted franchise operating margin (non-GAAP) (2) | $ | 31,859 | | 51.2 | % | | $ | 31,512 | | 51.4 | % |
| | | | | | | | |
Total operating revenue (5) | $ | 114,674 | | 100.0 | % | | $ | 115,353 | | 100.0 | % |
Total costs of operating revenue (5) | 77,653 | | 67.7 | % | | 78,441 | | 68.0 | % |
Restaurant-level operating margin (non-GAAP) (5) | $ | 37,021 | | 32.3 | % | | $ | 36,912 | | 32.0 | % |
| | | | | | | | |
| (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 and adjusted operating margin are considered non-GAAP financial measures and should be considered as a supplement to, not as a substitute for, operating income, net income or other financial measures prepared in accordance with GAAP. |
| (3) | Adjustments include non-recurring legal settlement expenses, pre-opening costs, and other adjustments the Company does not consider in the evaluation of its ongoing core operating performance. |
| (4) | As a percentage of franchise and license revenue. |
| (5) | As a percentage of total operating revenue. |
| | | | | | | | | | | | | | | | | | | | | | | | | | |
| DENNY’S CORPORATION |
| Operating Margins |
| (Unaudited) |
| | | | | | |
| | | | Fiscal Year Ended |
| ($ in thousands) | 12/25/24 | | 12/27/23 |
Company restaurant operations: (1) | | | | | |
| Company restaurant sales | $ | 211,781 | | 100.0 | % | | $ | 215,532 | | 100.0 | % |
| Costs of company restaurant sales, excluding depreciation and amortization: | | | | | |
| | Product costs | 53,931 | | 25.5 | % | | 55,789 | | 25.9 | % |
| | Payroll and benefits | 80,605 | | 38.1 | % | | 80,666 | | 37.4 | % |
| | Occupancy | 18,129 | | 8.6 | % | | 16,809 | | 7.8 | % |
| | Other operating costs: | | | | | |
| | | Utilities | 6,954 | | 3.3 | % | | 7,848 | | 3.6 | % |
| | | Repairs and maintenance | 4,023 | | 1.9 | % | | 3,661 | | 1.7 | % |
| | | Marketing | 7,850 | | 3.7 | % | | 5,603 | | 2.6 | % |
| | | Legal settlements | 1,700 | | 0.8 | % | | 2,302 | | 1.1 | % |
| | | Pre-opening costs | 1,548 | | 0.7 | % | | 288 | | 0.1 | % |
| | | Other direct costs | 15,004 | | 7.1 | % | | 14,633 | | 6.8 | % |
| Total costs of company restaurant sales, excluding depreciation and amortization | $ | 189,744 | | 89.6 | % | | $ | 187,599 | | 87.0 | % |
| Company restaurant operating margin (non-GAAP) (2) | $ | 22,037 | | 10.4 | % | | $ | 27,933 | | 13.0 | % |
| | Adjustments (3) | 3,713 | | 1.8 | % | | 967 | | 0.4 | % |
| Adjusted company restaurant operating margin (non-GAAP) (2) | $ | 25,750 | | 12.2 | % | | $ | 28,900 | | 13.4 | % |
| | | | | | | | |
Franchise operations: (4) | | | | | |
| Franchise and license revenue: | | | | | |
| Royalties | $ | 118,705 | | 49.3 | % | | $ | 120,131 | | 48.4 | % |
| Advertising revenue | 79,973 | | 33.2 | % | | 78,494 | | 31.6 | % |
| Initial and other fees | 8,711 | | 3.6 | % | | 13,882 | | 5.6 | % |
| Occupancy revenue | 33,164 | | 13.8 | % | | 35,883 | | 14.4 | % |
| Total franchise and license revenue | $ | 240,553 | | 100.0 | % | | $ | 248,390 | | 100.0 | % |
| | | | | | | | |
| Costs of franchise and license revenue, excluding depreciation and amortization: | | | | | |
| Advertising costs | $ | 79,973 | | 33.2 | % | | $ | 78,494 | | 31.6 | % |
| Occupancy costs | 20,539 | | 8.5 | % | | 22,160 | | 8.9 | % |
| Other direct costs | 19,714 | | 8.2 | % | | 21,798 | | 8.8 | % |
| Total costs of franchise and license revenue, excluding depreciation and amortization | $ | 120,226 | | 50.0 | % | | $ | 122,452 | | 49.3 | % |
| Franchise operating margin (non-GAAP) (2) | $ | 120,327 | | 50.0 | % | | $ | 125,938 | | 50.7 | % |
| Adjustments (3) | 2,640 | | 1.1 | % | | — | | 0.0 | % |
| Adjusted franchise operating margin (non-GAAP) (2) | $ | 122,967 | | 51.1 | % | | $ | 125,938 | | 50.7 | % |
| | | | | | | | |
Total operating revenue (5) | $ | 452,334 | | 100.0 | % | | $ | 463,922 | | 100.0 | % |
Total costs of operating revenue (5) | 309,970 | | 68.5 | % | | 310,051 | | 66.8 | % |
Restaurant-level operating margin (non-GAAP) (5) | $ | 142,364 | | 31.5 | % | | $ | 153,871 | | 33.2 | % |
| | | | | | | | |
| (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 and adjusted operating margin are considered non-GAAP financial measures and should be considered as a supplement to, not as a substitute for, operating income, net income or other financial measures prepared in accordance with GAAP. |
| (3) | Adjustments include non-recurring legal settlement expenses, pre-opening costs, and other adjustments the Company does not consider in the evaluation of its ongoing core operating performance. Adjustments for the year-to-date period ended December 25, 2024 include a $2.6 million distribution to franchisees related to a review of advertising costs. |
| (4) | As a percentage of franchise and license revenue. |
| (5) | As a percentage of total operating revenue. |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| DENNY’S CORPORATION |
| Statistical Data |
| (Unaudited) |
| | | | | | | | | | | | | | | | | |
| | | Denny's | | Keke's |
Changes in Same-Restaurant Sales (1) | Quarter Ended | | Fiscal Year Ended | | Quarter Ended | | Fiscal Year Ended |
| (Increase (decrease) vs. prior year) | 12/25/24 | | 12/27/23 | | 12/25/24 | | 12/27/23 | | 12/25/24 | | 12/27/23 | | 12/25/24 | | 12/27/23 |
| Company Restaurants | 0.0% | | (1.2)% | | (1.5%) | | 2.7% | | (3.7)% | | 0.7% | | (2.7%) | | (1.1)% |
| Domestic Franchise Restaurants | 1.2% | | 1.5% | | (0.1%) | | 3.6% | | 4.1% | | (3.8)% | | (1.6%) | | (4.4)% |
| Domestic System-wide Restaurants | 1.1% | | 1.3% | | (0.2%) | | 3.6% | | 3.0% | | (3.1)% | | (1.7%) | | (3.9)% |
| | | | | | | | | | | | | | | | | |
| Average Unit Sales | | | | | | | |
| ($ in thousands) | | | | | | | | | | | | | | | |
| Company Restaurants | $800 | | $770 | | $3,086 | | $3,073 | | $407 | | $442 | | $1,728 | | $1,796 |
| Franchised Restaurants | $482 | | $467 | | $1,875 | | $1,843 | | $459 | | $432 | | $1,829 | | $1,828 |
| | | | | | | | | | | | | | | | | |
| (1) | Same-restaurant 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, initial and other fees and occupancy revenue from non-consolidated franchised and licensed restaurants. Accordingly, domestic franchise same-restaurant sales and domestic system-wide same-restaurant sales should be considered as a supplement to, not a substitute for, the Company's results as reported under GAAP. |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Restaurant Unit Activity | Denny's | | Keke's |
| | | | | Franchised | | | | | | Franchised | | |
| | | Company | | & Licensed | | Total | | Company | | & Licensed | | Total |
| Ending Units September 25, 2024 | 61 | | | 1,464 | | | 1,525 | | | 11 | | | 50 | | | 61 | |
| Units Opened | — | | | 4 | | | 4 | | | 3 | | | 5 | | | 8 | |
| | | | | | | | | | | | |
| | | | | | | | | | | | |
| | | | | | | | | | | | |
| | | | | | | | | | | | |
| Units Closed | — | | | (30) | | | (30) | | | — | | | — | | | — | |
| | Net Change | — | | | (26) | | | (26) | | | 3 | | | 5 | | | 8 | |
| Ending Units December 25, 2024 | 61 | | | 1,438 | | | 1,499 | | | 14 | | | 55 | | | 69 | |
| | | | | | | | | | | | | |
| Equivalent Units | | | | | | | | | | | |
| Fourth Quarter 2024 | 59 | | | 1,454 | | | 1,513 | | | 11 | | | 51 | | | 62 | |
| Fourth Quarter 2023 | 65 | | | 1,512 | | | 1,577 | | | 8 | | | 50 | | | 58 | |
| | Net Change | (6) | | | (58) | | | (64) | | | 3 | | | 1 | | | 4 | |
| | | | | | | | | | | | | |
| | | | | |
| | | | | | | | | | | | | |
| | | | | | | | | | | |
| Ending Units December 27, 2023 | 65 | | | 1,508 | | | 1,573 | | | 8 | | | 50 | | | 58 | |
| Units Opened | — | | | 14 | | | 14 | | | 7 | | | 5 | | | 12 | |
| | | | | | | | | | | | |
| | | | | | | | | | | | |
| | | | | | | | | | | | |
| Units Refranchised | (3) | | | 3 | | | — | | | (1) | | | 1 | | | — | |
| Units Closed | (1) | | | (87) | | | (88) | | | — | | | (1) | | | (1) | |
| | Net Change | (4) | | | (70) | | | (74) | | | 6 | | | 5 | | | 11 | |
| Ending Units December 25, 2024 | 61 | | | 1,438 | | | 1,499 | | | 14 | | | 55 | | | 69 | |
| | | | | | | | | | | | | |
| Equivalent Units | | | | | | | | | | | |
| Year-to-Date 2024 | 62 | | | 1,478 | | | 1,540 | | | 11 | | | 50 | | | 61 | |
| Year-to-Date 2023 | 65 | | | 1,522 | | | 1,587 | | | 8 | | | 48 | | | 56 | |
| | Net Change | (3) | | | (44) | | | (47) | | | 3 | | | 2 | | | 5 | |
| |
DENNY’S CORPORATION INVESTOR PRESENTATION FEBRUARY THROUGH APRIL 2025
2 The Company urges caution in considering its current trends and any outlook on earnings disclosed either in this presentation or in its press releases. In addition, certain matters discussed in either this presentation or related press releases 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 this presentation was published 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: economic, public health and political conditions that impact consumer confidence and spending; commodity and labor inflation; the ability to effectively staff restaurants and support personnel; the Company's ability to maintain adequate levels of liquidity for its cash needs, including debt obligations, payment of dividends, planned share repurchases and capital expenditures as well as the ability of its customers, suppliers, franchisees and lenders to access sources of liquidity to provide for their own cash needs; competitive pressures from within the restaurant industry; the Company's ability to integrate and derive the expected benefits from its acquisition of Keke's Breakfast Cafe; 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 and geopolitical events (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 27, 2023 (and in the Company’s subsequent Quarterly Reports on Form 10-Q and Current Reports on Form 8-K). The presentation includes references to the Company’s non-GAAP financials measures. All such measures are designated by an asterisk (*). The Company believes that, in addition to GAAP measures, certain non-GAAP financial measures are useful information to investors and analysts to assist in the evaluation of operating performance on a period-to-period basis. However, non-GAAP measures should be considered as a supplement to, not a substitute for, operating income, net income, and net income per share, or other financial performance measures prepared in accordance with GAAP. The Company uses adjusted EBITDA, 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. These non-GAAP measures are adjusted for certain items the Company does not consider in the evaluation of its ongoing core operating performance. These adjustments are either non-recurring in nature or vary from period to period without correlation to the Company's ongoing core operating performance. See Appendix for non-GAAP reconciliations to the following GAAP measures: FORWARD-LOOKING STATEMENTS AND NON-GAAP FINANCIAL MEASURES $ Millions (except per share amounts) 2018 2019 2020 2021 2022 2023 2024 Operating Income $73.6 $165.0 $6.7 $104.1 $60.6 $52.8 $45.3 Net Income (Loss) $43.7 $117.4 ($5.1) $78.1 $74.7 $19.9 $21.6 Net Income (Loss) per Share $0.67 $1.90 ($0.08) $1.19 $1.23 $0.35 $0.41
3 +3.0% Q4 2024 SYSTEM-WIDE SAME-RESTAURANT SALES* (1.7%) 2024 FY SYSTEM-WIDE SAME-RESTAURANT SALES* 6 # OF STATES $1.8M 2024 FY SYSTEM AUV SALES 2006 YEAR FOUNDED 80% FRANCHISE MIX 16% 2024 FY OFF-PREMISES SALES MIX 69 CAFES +1.1% Q4 2024 DOMESTIC SYSTEM- WIDE SAME- RESTAURANT SALES* (0.2%) 2024 FY DOMESTIC SYSTEM- WIDE SAME- RESTAURANT SALES* 15 COUNTRIES & U.S. TERRITORIES $1.9M 2024 FY SYSTEM AUV SALES 1953 YEAR FOUNDED 96% FRANCHISE MIX 20% 2024 FY OFF-PREMISES SALES MIX 1,499 RESTAURANTS *Same-restaurant 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, initial and other fees and occupancy revenue from non-consolidated franchised and licensed restaurants. Accordingly, domestic franchise same-restaurant sales and domestic system-wide same-restaurant sales should be considered as a supplement to, not a substitute for, the Company’s results as reported under GAAP. Additionally, see Appendix for reconciliation of Net Income (Loss) to Non-GAAP Financial Measures, as well as the reconciliation of Operating Income to Non-GAAP Financial Measures. Data Through 2024 Data Through 2024 DENNY’S CORPORATION AT A GLANCE
4 Q4 & FY 2024 HIGHLIGHTS • Q4 domestic system-wide same- restaurant sales* of +1.1%. • Sequential improvement of 120bps from Q3 2024. • Outperformed the BBI Family Dining sales benchmark for the fourth consecutive quarter. • FY domestic system-wide same- restaurant sales* of (0.2%) represents a 2-year stack of +3.4%. • Relaunched iconic value menu during Q3 providing 2.0-2.5% sales lift since launch with minimal impact to check. • Strong performance in California and meaningful trend shifts relative to BBI Family Dining sales benchmark in California. • Total value incidence of ~19% during Q4. • Rolled out Banda Burrito starting in Q2 to over 1,000 restaurants which increased same-restaurant sales* by 70bps in both Q3 and Q4. • Total off-premises sales of 21% in Q4. • Opened 14 new franchised restaurants in FY 2024. • Average unit sales of $2.3M for new openings. • Closed 88 restaurants to strategically accelerate lower volume closures and enhance the overall health of the brand. • Completed 23 remodels in FY 24 including 7 company restaurants. *Same-restaurant 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, initial and other fees and occupancy revenue from non-consolidated franchised and licensed restaurants. Accordingly, domestic franchise same-restaurant sales and domestic system-wide same-restaurant sales should be considered as a supplement to, not a substitute for, the Company’s results as reported under GAAP.
5 Q4 & FY 2024 HIGHLIGHTS1 • Alcohol program rollout to ~80% of the system increased same-restaurant sales* by 110bps in Q4. • Launched new and improved website resulting in ~100bps of additional online sales. • Total off-premises sales of 16% in Q4. • First paid media campaign in Q3 drove 4%-6% traffic lift. • Opened 12 cafes in FY 2024. • Expanded from one state to now being in six different states. • Signed additional development commitments resulting in a total pipeline of over 140. • Q4 domestic system-wide same-restaurant sales* of 3.0%. • Sequential improvement of 400bps from Q3 2024. • Outperformed the BBI Family Dining sales benchmark in Florida for the second consecutive quarter. • Q4 domestic system-wide same-restaurant sales* were impacted by ~110bps related to hurricanes. • Established remodel program lift target of 6%-8% based on testing performance. • Completed three remodels in FY 2024 at company cafes. *Same-restaurant 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, initial and other fees and occupancy revenue from non-consolidated franchised and licensed restaurants. Accordingly, domestic franchise same-restaurant sales and domestic system-wide same-restaurant sales should be considered as a supplement to, not a substitute for, the Company’s results as reported under GAAP.
DENNY’S We Love to Feed People – Body, Mind and Soul
7 DENNY’S DOMESTIC SYSTEM-WIDE SAME-RESTAURANT SALES* Outperformed BBI Family Dining Index for Four Consecutive Quarters (2.4%) (1.0%) (0.5%) (1.3%) 0.2% 0.03% 0.5% 0.2% 8.4% 3.0% 1.8% 1.3% (1.3%) (0.6%) (0.1%) 1.1% (4.0%) (2.0%) 0.0% 2.0% 4.0% 6.0% 8.0% 10.0% Q1 2023 Q2 2023 Q3 2023 Q4 2023 Q1 2024 Q2 2024 Q3 2024 Q4 2024 vs BBI Family Dining Denny's Domestic System-Wide Same-Restaurant Sales* FY 2024 (0.2%), 2-YR Stack of +3.4% *Same-restaurant 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, initial and other fees and occupancy revenue from non-consolidated franchised and licensed restaurants. Accordingly, domestic franchise same-restaurant sales and domestic system-wide same-restaurant sales should be considered as a supplement to, not a substitute for, the Company’s results as reported under GAAP.
8 DENNY’S DOMESTIC SALES Denny’s Q4 2024 Domestic Average Weekly Sales of Approximately $38,900 $8.0 $8.1 $7.9 $7.4 $7.1 $7.6 $7.5 $7.2 $7.0 $7.6 $7.5 $7.5 $7.4 $8.1 $26.2 $27.0 $25.2 $28.3 $28.1 $28.9 $29.1 $30.3 $29.6 $30.0 $29.2 $30.6 $29.8 $30.8 $34.3 $35.2 $33.1 $35.7 $35.1 $36.5 $36.7 $37.5 $36.5 $37.7 $36.8 $38.1 $37.2 $38.9 23% 23% 24% 21% 20% 21% 21% 19% 19% 20% 20% 20% 20% 21% 0% 5% 10% 15% 20% 25% 30% $0.0 $5.0 $10.0 $15.0 $20.0 $25.0 $30.0 $35.0 $40.0 Q3 '21 Q4 '21 Q1 '22 Q2 '22 Q3 '22 Q4 '22 Q1 '23 Q2 '23 Q3 '23 Q4 '23 Q1 '24 Q2 '24 Q3 '24 Q4 '24 To ta l O ff- P re m is es S al es a s % o f To ta l S al es A ve ra ge W ee kl y S al es ( $0 00 s) 1 Denny's Total Off-Premises Sales Denny's On-Premises Sales Denny's Total Sales Total Off-Premises Sales as % of Total Sales 1. Domestic average weekly sales reflect sales for company and restaurants on Denny’s proprietary point of sale (POS) system.
9 DENNY’S DOMESTIC SALES MIX Approximately 65% of Denny’s Overall Domestic FY 2024 Sales Were During the Breakfast and Lunch Dayparts, With Virtual Brands Over-Indexing at the Dinner and Light -Night Dayparts 28% 37% 19% 16% 0% 10% 20% 30% 40% Breakfast Lunch Dinner Late-Night FY 2024 Sales Mix by Daypart 65% 71% 72% 71% 72% 35% 29% 28% 29% 28% 0% 20% 40% 60% 80% Dine In Off-Premise The Burger Den The Meltdown Banda Burrito FY 2024 Sales Mix Weekday vs. Weekend Weekday Weekend Dine In f remises (Excl. Virtual) 68% 53% 25% 38% 43% 32% 47% 75% 62% 57% 0% 20% 40% 60% 80% Dine In Off-Premise The Burger Den The Meltdown Banda Burrito FY 2024 Sales Mix by Daypart Breakfast & Lunch Dinner & Late-Night Dine In remises (Excl. Virtual)
10 REMODELS UNDERWAY +6.4% SALES LIFT +6.5% TRAFFIC LIFT 23 REMODELS COMPLETED IN FY 2024 ~$250k AVERAGE INVESTMENT Results based on APT pre/post vs. control analysis.
11 GUEST FEEDBACK Average Google Rating 3.76 3.79 3.83 3.99 4.22 4.39 3.00 3.50 4.00 4.50 5.00 2019 2020 2021 2022 2023 2024 Overall Net Sentiment 27 28 20 31 41 50 29 30 23 28 32 40 31 30 28 32 23 26 15 20 25 30 35 40 45 50 55 2019 2020 2021 2022 2023 2024 Denny's BBI Family BBI Industry
12 1 Total of 1,334 Restaurants in the U.S. with Strongest Presence in California, Texas, Florida, and Arizona 1. International Presence of 165 Restaurants in 14 Countries and U.S. Territories 1. 354 80 29 194 6 4 5 10 117 9 174 8 7 40 21 18 4 26 10 20 2 18 7 4 3 3 43 30 26 33 33 41 2 3 1 13 23 12 3 1 2 4 2 5 6 1 23 DENNY’S FOOTPRINT Denny ’ s G loba l Foo tp r i n t 1 Country Number of Restaurants United States 1,334 Canada 86 Mexico 15 Puerto Rico 15 Philippines 14 Honduras 7 New Zealand 7 United Arab Emirates 5 Guatemala 4 Costa Rica 3 El Salvador 3 Guam 2 Indonesia 2 Curaçao 1 United Kingdom 1 Total System 1,499 1 Data through Fiscal December ended December 25, 2024. 5 2
13 Well Diversified, Experienced, and Energetic Group of 203 Franchisees 1. • 32 franchisees with more than 10 restaurants each collectively comprise approximately 65% of the franchise system. • Approximately 20% of our franchisees operate multiple concepts1 providing a well-rounded perspective within the industry. Ownership o f 1 ,438 Franchise Res taurants 1 Number of Franchised Units Number of Franchisees Franchisees as % of Total Total Franchised Units Franchised Units as % of Total 1 78 38% 78 5% 2–5 65 32% 206 14% 6–10 28 14% 218 15% 11–20 17 8% 238 17% 21–35 6 3% 170 12% >35 9 4% 528 37% Total 203 100% 1,438 100% DENNY'S STRONG PARTNERSHIP WITH FRANCHISEES 1 Data through Fiscal December ended December 25, 2024.
KEKE’S BREAKFAST CAFE We Create Fresh Starts for Everyone, Every day
15 KEKE’S DOMESTIC SYSTEM-WIDE SAME-RESTAURANT SALES* Outperformed BBI Family Dining Florida Index for Two Consecutive Quarters (4.1%) (2.6%) (1.8%) (1.9%) 1.2% 0.03% (5.0%) (3.1%) (3.6%) (4.6%) (1.0%) 3.0% (6.0%) (5.0%) (4.0%) (3.0%) (2.0%) (1.0%) 0.0% 1.0% 2.0% 3.0% 4.0% Q3 2023 Q4 2023 Q1 2024 Q2 2024 Q3 2024 Q4 2024 vs BBI Family Dining Florida Keke's Domestic System-Wide Same-Restaurant Sales* Hurricanes Impacted System- Wide Same-Restaurant Sales* by ~110bps in Q4 2024 *Same-restaurant 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, initial and other fees and occupancy revenue from non-consolidated franchised and licensed restaurants. Accordingly, domestic franchise same-restaurant sales and domestic system-wide same-restaurant sales should be considered as a supplement to, not a substitute for, the Company’s results as reported under GAAP.
16 GUEST FEEDBACK Average Google Rating 4.45 4.54 4.78 3.00 3.50 4.00 4.50 5.00 2022 2023 2024 Overall Net Sentiment 27 40 72 15 25 35 45 55 65 75 2024 BBI Industry BBI Family Keke's
17 CURRENT DESIGN NEW DESIGN NEW KEKE’S DESIGN
18 EARLY REMODEL PROGRAM RESULTS +6%-8% SALES LIFT +30% IRR ~25%+ CASH ON CASH $150K+ CAPEX Target Metrics
19 KEKE’S GROWING PARTNERSHIP WITH FRANCHISEES Ownership of 55 Franchisee Restaurants1 Number of Franchised Units Number of Franchisees Franchisees as % of Total Total Franchised Units Franchised Units as % of Total 1 9 50% 9 16% 2–5 8 44% 25 45% 6–10 3 17% 21 38% Total 18 100% 55 100% Rapidly Expanding Group of 18 Franchisees1 • 3 franchisees with more than 5 restaurants and collectively comprise approximately 38% of the franchise system. • Majority of existing franchisees are solely focused on operating Keke’s franchises. • Company seeks to primarily leverage both Keke's and Denny's existing franchisee networks to grow the portfolio in the near- term. 1 Data through Fiscal December ended December 25, 2024.
20 KEKE’S FOOTPRINT AND DEVELOPMENT COMMITMENTS © GeoNames, Microsoft, TomTom Powered by Bing Over 140 Development Commitments in 10 Different States1 1 Data through Fiscal December ended December 25, 2024. • Keke’s cafes are in six different states1 • Over 65% of Keke’s cafes are in the Orlando and Tampa DMAs1. State Cafes Florida 61 Tennessee 3 Texas 2 California 1 Colorado 1 Nevada 1
DENNY’S CORPORATION
22 $286.5 $240.0 $210.0 $170.0 $261.5 $255.5 $261.3 $30.6 $16.5 $15.4 $12.7 $11.2 $10.5 $10.6 3.0x 2.7x 2.1x 3.4x 3.3x 3.9x 0.0x 1.0x 2.0x 3.0x 4.0x 5.0x 2018 2019 2020 2021 2022 2023 2024 $0.0 $100.0 $200.0 $300.0 $400.0 $500.0 To ta l D eb t ( $ M ill io ns ) Credit Facility Finance Leases Total Debt Leverage Ratio 3 SOLID BALANCE SHEET WITH FLEXIBILITY $25.0 $42.9 $96.2 $34.2 $30.6 $64.9 $52.1 $11.2 $67.9 2018 2019 2020 2021 2022 2023 2024 2025 ASR Open Market $ In Millions Disciplined Focus on Debt Leverage with Financial Flexibility to Make Brand Investments & Return Capital to Shareholders • Allocated over $712 million towards share repurchases since program began in late 20102. • Repurchased approximately 69 million shares at an average of $10.35 per share resulting in a 48% net reduction in share count2. • Approximately $89 million remaining under existing repurchase authorization1. 4 1 Data through Fiscal December ended December 25, 2024. Includes 1% excise tax on the value of corporate share repurchases (net of issuance). 2 Data from November 2010 through preliminary Fiscal December ended December 25, 2024. 3 Total debt leverage ratio was waived starting in Q2 ’20 through Q1 ‘21. 4 Increased borrowings under the credit facility in 2022 were primarily due to the Keke’s acquisition. 1 2025 Guidance $15M -$25M • Expect to refinance existing credit facility prior to going current in August 2025. • Debt leverage expected to moderate throughout 2025. • Long-term debt leverage target of 2.5x – 3.5x.
23 C-R-A-V-E STRATEGIC FRAMEWORK Va l ida te & Op t imize the Bus iness Mode l to Max imize Res taurant Marg ins E l eva te Pro f i t ab le Tra f f ic Through the Gues t Exper ience & Un iquely Craveable Food C rea te Lead ing Edge So lu t ions With Technology & Innova t ion Robust New Res taurant G row th as the Franchisor o f Cho ice Assemble Bes t In Class Peop le and Teams Through Cu l tu re, Too ls & Sys tems
24 Rise of a New Day 5% - 7% Adjusted EBITDA* Growth CAGR Flat to Slightly Positive Same- Restaurant Sales* 3% Net Unit Growth CAGR 5% - 6% G&A Reduction Over Next 12 Months Balancing Seed & Feed with Share Repurchases 2.5x – 3.5x Debt Leverage LONG-RANGE OUTLOOK1 0% - 1% UNIT GROWTH CAGR $2.2M AUV TARGET Mid-Teens COMPANY MARGIN TARGET 25% - 30% UNIT GROWTH CAGR $2.2M AUV TARGET Upper-Teens COMPANY MARGIN TARGET 1. As presented on 10/22/24 in conjunction with Denny’s Corporation Investor Day. *Same-restaurant 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, initial and other fees and occupancy revenue from non-consolidated franchised and licensed restaurants. Accordingly, domestic franchise same-restaurant sales and domestic system-wide same-restaurant sales should be considered as a supplement to, not a substitute for, the Company’s results as reported under GAAP. Additionally, see Appendix for reconciliation of Net Income (Loss) to Non-GAAP Financial Measures, as well as the reconciliation of Operating Income to Non-GAAP Financial Measures.
APPENDIX
26 FRANCHISED AND COMPANY RESTAURANT SALES 1 Same-restaurant 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, initial and other fees and occupancy revenue from non-consolidated franchised and licensed restaurants. Accordingly, domestic franchise same-restaurant sales and domestic system-wide same-restaurant sales should be considered as a supplement to, not a substitute for, the Company’s results as reported under GAAP. 2 2021 and 2022 Denny’s domestic system-wide same-restaurant sales1 are versus 2019. 1.8% 1.9% (36.7%) (3.5%) 6.7% 2.7% (1.5%) 2018 2019 2020 2021 2022 2023 2024 0.6% 2.0% (30.9%) (4.8%) 1.0% 3.6% (0.1%) 2018 2019 2020 2021 2022 2023 2024 $1.6 $1.7 $1.2 $1.6 $1.7 $1.8 $1.8 2018 2019 2020 2021 2022 2023 2024 $M s $2.3 $2.5 $1.8 $2.7 $3.0 $3.1 $3.1 2018 2019 2020 2021 2022 2023 2024 $M s FRANCHISE RESTAURANT AUVs1 DOMESTIC FRANCHISED SAME-RESTAURANT SALES1,2 COMPANY RESTAURANT AUVs1 COMPANY SAME-RESTAURANT SALES1,2
27 (5.3%) (3.8%) (4.0%) (4.6%) (0.9%) 4.1% Q2 23 Q4 23 Q1 24 Q2 24 Q3 24 Q4 24 (3.4%) 0.7% (1.1%) (4.4%) (1.7%) (3.7%) Q3 23 Q4 23 Q1 24 Q2 24 Q3 24 Q4 24 KEKE’S FRANCHISED AND COMPANY RESTAURANT SALES 1 Keke’s 2022 restaurant AUVs are annualized based on the reported Average Unit Volumes following acquisition. 2 Same-restaurant 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, initial and other fees and occupancy revenue from non-consolidated franchised and licensed restaurants. Accordingly, domestic franchise same-restaurant sales and domestic system-wide same-restaurant sales should be considered as a supplement to, not a substitute for, the Company’s results as reported under GAAP. $1.5 $1.3 $1.8 $1.8 $1.8 $1.8 2019 2020 2021 2022 2023 2024 $M s $1.7 $1.3 $1.8 $1.7 $1.8 $1.7 2019 2020 2021 2022 2023 2024 $M s KEKE’S FRANCHISE RESTAURANTS AUVs1,2 KEKE’S FRANCHISED SAME-RESTAURANT SALES2 KEKE’S COMPANY RESTAURANTS AUVs1,2 KEKE’S COMPANY SAME-RESTAURANT SALES2
28 BRAND PORTFOLIOS 30 30 20 20 28 28 14 (56) (36) (73) (30) (66) (57) (88) (90) (70) (50) (30) (10) 10 30 2018 2019 2020 2021 2022 2023 2024 System Openings System Closures 8 7 3 2 3 4 12 (1) (2) 0 2 4 6 8 10 12 14 2018 2019 2020 2021 2022 2023 2024 System Openings System Closures 1 Keke’s 2018 – 2021 portfolio activity was prior to Denny’s Corporation acquisition of the brand. 2 One Keke’s opening during 2022 was prior to Denny’s Corporation acquisition of the brand. 2 1 Long-Range Outlook 25%-30% Cafe Growth CAGRLong-Range Outlook 0%-1% Restaurant Growth CAGR
29 NON-GAAP FINANCIAL MEASURES 1. Includes 53 operating weeks. * See Appendix for reconciliation of Net Income (Loss) and Net Cash Provided by Operating Activities to Non-GAAP Financial Measures, as well as the reconciliation of Operating Income (Loss) to Non-GAAP Financial Measures 15.4% 15.8% 1.8% 16.5% 12.1% 13.4% 12.2% 2018 2019 2020 2021 2022 2023 2024 $108.4 $103.3 $37.8 $88.6 $88.5 $87.9 $81.4 2018 2019 2020 2021 2022 2023 2024 $M s $46.0 $50.0 ($2.8) $33.6 $36.3 $35.6 $28.6 $0.70 $0.81 ($0.05) $0.51 $0.60 $0.63 $0.54 2018 2019 2020 2021 2022 2023 2024 Adjusted Net Income (Loss)* Adjusted Net Income (Loss) Per Share* 47.6% 48.8% 47.4% 50.6% 47.3% 50.7% 51.1% 2018 2019 2020 2021 2022 2023 2024 ADJUSTED COMPANY OPERATING MARGIN %* ADJUSTED FRANCHISE OPERATING MARGIN %* ADJUSTED EBITDA* ADJUSTED NET INCOME (LOSS)* $M s ex ce pt p er s ha re d at a Long Term Outlook 5% - 7% Growth CAGR Denny’s Long Term Outlook Mid-Teens Keke’ s Long Term Outlook Upper Teens 1 1 1 1
30 EXPERIENCED AND COMMITTED LEADERSHIP TEAM KELLI F. VALADE Chief Executive Officer CHRISTOPHER D. BODE President and Chief Operating Officer, Denny’s Inc. DAVID P. SCHMIDT President, Keke’s Inc. STEPHEN C. DUNN Executive Vice President, Chief Global Development Officer GAIL SHARPS MYERS Executive Vice President, Chief Legal & Administrative Officer MONIGO G. SAYGBAY-HALLIE Executive Vice President, Chief People Officer ROBERT P. VEROSTEK Executive Vice President, Chief Financial Officer JAY C. GILMORE Senior Vice President, Chief Accounting Officer & Corporate Controller MINH LE Senior Vice President, Chief Technology Officer PATTY TREVINO Senior Vice President, Chief Brand Officer
31 $ Millions 2018 2019 20201 2021 2022 2023 2024 Net Income (Loss) $43.7 $117.4 ($5.1) $78.1 $74.7 $19.9 $21.6 Provision for (Benefit from) Income Taxes 8.6 31.8 (2.0) 26.0 24.7 7.0 7.7 Goodwill Impairment Charges - - - - - 6.4 0.0 Operating (Gains) Losses and Other Charges, Net 2.6 (91.2) 1.8 (46.1) (1.0) 2.5 2.0 Other Nonoperating Expense (Income), Net 0.6 (2.8) (4.2) (15.2) (52.6) 8.3 (1.9) Share‐Based Compensation Expense 6.0 6.7 7.9 13.6 11.4 8.9 10.7 Deferred Compensation Plan Valuation Adjustments (1.0) 2.6 1.6 2.1 (2.2) 1.9 1.7 Interest Expense, Net 20.7 18.5 18.0 15.1 13.8 17.6 18.0 Depreciation and Amortization 27.0 19.8 16.2 15.4 14.9 14.4 14.9 Non-Recurring Legal Settlement Expenses - 0.4 0.1 0.9 3.9 0.7 2.2 Pre-Opening Expenses 0.1 0.0 - - - 0.3 1.5 COVID-19 Related Expenses - - 3.5 (1.4) - - - Leadership Transition Costs - - - - 0.3 - 0.4 Acquisition Costs - - - - 0.6 - - Other Adjustments - - - - - - 2.6 Adjusted EBITDA $108.4 $103.3 $37.8 $88.6 $88.5 $87.9 $81.4 Adjusted EBITDA Margin % 17.2% 19.1% 13.1% 22.2% 19.4% 18.9% 18.0% Net Income (Loss) $43.7 $117.4 ($5.1) $78.1 $74.7 $19.9 $21.6 (Gains) Losses and Amort. on Interest Rate Swap Derivatives, Net - - (2.2) (12.6) (55.0) 11.0 0.8 Goodwill Impairment Charges - - - - - 6.4 0.0 Operating (Gains) Losses and Other Charges, Net 2.6 (91.2) 1.8 (46.1) (1.0) 2.5 2.0 Non-Recurring Legal Settlement Expenses - 0.4 0.1 0.9 3.9 0.7 2.2 Pre-Opening Expenses 0.1 0.0 - - - 0.3 1.5 COVID-19 Related Expenses - - 3.5 (1.4) - - - Leadership Transition Costs - - - - 0.3 - 0.4 Acquisition Costs - - - - 0.6 - - Other Adjustments - - - - - - 2.6 Tax Effect2 (0.4) 23.3 (0.8) 14.8 12.7 (5.2) (2.5) Adjusted Net Income (Loss) $46.0 $50.0 ($2.8) $33.6 $36.3 $35.6 $28.6 Net Income (Loss) Per Share - Diluted $0.67 $1.90 ($0.08) $1.19 $1.23 $0.35 $0.41 Adjustments Per Share $0.03 ($1.09) $0.03 ($0.68) ($0.63) $0.28 $0.13 Adjusted Net Income (Loss) Per Share $0.70 $0.81 ($0.05) $0.51 $0.60 $0.63 $0.54 Diluted Weighted Average Shares Outstanding (000’s) 65,562 61,833 60,812 65,573 60,879 56,196 52,614 RECONCILIATION OF NET INCOME (LOSS) TO NON-GAAP FINANCIAL MEASURES 1. Includes 53 operating weeks. 2. Tax adjustments for full year 2018, 2019, 2020, 2021, 2022, 2023 and 2024 reflect an effective tax rate of 16.4%, 25.7%, 25.6%, 25.0%, 24.9%, 25.0% and 26.3%, respectively.
32 $ Millions 2018 2019 20201 2021 2022 2023 2024 Operating Income $73.6 $165.0 $6.7 $104.1 $60.6 $52.8 $45.3 General and Administrative Expenses 63.8 69.0 55.0 68.7 67.2 77.8 61.5 Depreciation and Amortization 27.0 19.8 16.2 15.4 14.9 14.4 14.9 Goodwill Impairment Charges - - - - - 6.4 0.0 Operating (Gains) Losses and Other Charges, Net 2.6 (91.2) 1.8 (46.1) (1.0) 2.5 2.0 Restaurant-Level Operating Margin $167.1 $162.7 $79.7 $142.1 $141.6 $153.9 $142.4 Restaurant-Level Operating Margin Consists Of: Company Restaurant Operating Margin (2) 63.1 48.0 3.6 28.1 20.3 27.9 22.0 Franchise Operating Margin (3) 104.0 114.7 76.1 114.0 121.3 125.9 120.3 Restaurant-Level Operating Margin $167.1 $162.7 $79.7 $142.1 $141.6 $153.9 $142.4 Adjustments (4) 0.1 0.4 6.0 (0.3) 4.0 0.9 6.3 Adjusted Restaurant-Level Operating Margin $167.2 $163.1 $85.7 $141.8 $145.6 $154.8 $148.7 Adjusted Restaurant-Level Operating Margin Consists Of: Adjusted Company Restaurant Operating Margin 63.2 48.4 2.1 28.9 24.2 28.9 25.7 Adjusted Franchise Operating Margin 104.0 114.7 83.6 112.9 121.4 125.9 123.0 Adjusted Restaurant-Level Operating Margin $167.2 $163.1 $85.7 $141.8 $145.6 $154.8 $148.7 The Company believes that, in addition to GAAP measures, certain other non-GAAP financial measures are useful information to investors and analysts to assist in the evaluation of restaurant-level operating efficiency and performance of ongoing restaurant-level operations. However, non-GAAP measures should be considered as a supplement to, not a substitute for, operating income, net income, and net income per share, or other financial performance measures prepared in accordance with GAAP. 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 for compensation purposes, including incentive compensation for certain employees. Restaurant-level operating margin is the total of company restaurant operating margin and franchise operating margin and excludes: (i) 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; (ii) 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; (iii) 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. Company restaurant operating margin is defined 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. Adjusted company operating restaurant margin is defined as company restaurant operating margin less certain items such as non-recurring legal settlement expenses, pre-opening expenses, and other items the Company does not consider in the evaluation of its ongoing core operating performance. Franchise operating margin is defined as franchise and license revenue (which includes franchise royalties and other non-food and beverage revenue streams such as initial franchise and other fees, advertising revenue and occupancy revenue) less costs of franchise and license revenue and presents it as a percent of franchise and license revenue. Adjusted franchise operating margin is defined as franchise operating margin less certain items the Company does not consider in the evaluation of its ongoing core operating performance. Adjusted restaurant-level operating margin is the total of adjusted company restaurant operating margin and adjusted franchise operating margin and is defined as restaurant-level operating margin adjusted for certain items the Company does not consider in the evaluation of its ongoing core operating performance. These adjustments are either non-recurring in nature or vary from period to period without correlation to the Company's ongoing core operating performance. See most recent press release for a further breakdown of adjusted restaurant-level operating margin. RECONCILIATION OF OPERATING INCOME TO NON-GAAP FINANCIAL MEASURES 1. Includes 53 operating weeks. 2. 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, excluding depreciation and amortization; less franchise and license revenue. 3. 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, excluding depreciation and amortization; less company restaurant sales. 4. Adjustments include non-recuring legal settlement expenses, pre-opening costs, and other adjustments the Company does not consider in the evaluation of its ongoing core operating performance. Adjustments for 2024 include a $2.6 million distribution to franchisees related to a review of advertising costs.
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- DefinitionA unique 10-digit SEC-issued value to identify entities that have filed disclosures with the SEC. It is commonly abbreviated as CIK. Reference 1: http://www.xbrl.org/2003/role/presentationRef
-Publisher SEC
-Name Exchange Act
-Number 240
-Section 12
-Subsection b-2
| Name: |
dei_EntityCentralIndexKey |
| Namespace Prefix: |
dei_ |
| Data Type: |
dei:centralIndexKeyItemType |
| Balance Type: |
na |
| Period Type: |
duration |
|
| X |
- DefinitionIndicate if registrant meets the emerging growth company criteria. Reference 1: http://www.xbrl.org/2003/role/presentationRef
-Publisher SEC
-Name Exchange Act
-Number 240
-Section 12
-Subsection b-2
| Name: |
dei_EntityEmergingGrowthCompany |
| Namespace Prefix: |
dei_ |
| Data Type: |
xbrli:booleanItemType |
| Balance Type: |
na |
| Period Type: |
duration |
|
| X |
- DefinitionCommission file number. The field allows up to 17 characters. The prefix may contain 1-3 digits, the sequence number may contain 1-8 digits, the optional suffix may contain 1-4 characters, and the fields are separated with a hyphen.
| Name: |
dei_EntityFileNumber |
| Namespace Prefix: |
dei_ |
| Data Type: |
dei:fileNumberItemType |
| Balance Type: |
na |
| Period Type: |
duration |
|
| X |
- DefinitionTwo-character EDGAR code representing the state or country of incorporation.
| Name: |
dei_EntityIncorporationStateCountryCode |
| Namespace Prefix: |
dei_ |
| Data Type: |
dei:edgarStateCountryItemType |
| Balance Type: |
na |
| Period Type: |
duration |
|
| X |
- DefinitionThe exact name of the entity filing the report as specified in its charter, which is required by forms filed with the SEC. Reference 1: http://www.xbrl.org/2003/role/presentationRef
-Publisher SEC
-Name Exchange Act
-Number 240
-Section 12
-Subsection b-2
| Name: |
dei_EntityRegistrantName |
| Namespace Prefix: |
dei_ |
| Data Type: |
xbrli:normalizedStringItemType |
| Balance Type: |
na |
| Period Type: |
duration |
|
| X |
- DefinitionThe Tax Identification Number (TIN), also known as an Employer Identification Number (EIN), is a unique 9-digit value assigned by the IRS. Reference 1: http://www.xbrl.org/2003/role/presentationRef
-Publisher SEC
-Name Exchange Act
-Number 240
-Section 12
-Subsection b-2
| Name: |
dei_EntityTaxIdentificationNumber |
| Namespace Prefix: |
dei_ |
| Data Type: |
dei:employerIdItemType |
| Balance Type: |
na |
| Period Type: |
duration |
|
| X |
- DefinitionLocal phone number for entity.
| Name: |
dei_LocalPhoneNumber |
| Namespace Prefix: |
dei_ |
| Data Type: |
xbrli:normalizedStringItemType |
| Balance Type: |
na |
| Period Type: |
duration |
|
| X |
- DefinitionBoolean flag that is true when the Form 8-K filing is intended to satisfy the filing obligation of the registrant as pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act. Reference 1: http://www.xbrl.org/2003/role/presentationRef
-Publisher SEC
-Name Exchange Act
-Number 240
-Section 13e
-Subsection 4c
| Name: |
dei_PreCommencementIssuerTenderOffer |
| Namespace Prefix: |
dei_ |
| Data Type: |
xbrli:booleanItemType |
| Balance Type: |
na |
| Period Type: |
duration |
|
| X |
- DefinitionBoolean flag that is true when the Form 8-K filing is intended to satisfy the filing obligation of the registrant as pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act. Reference 1: http://www.xbrl.org/2003/role/presentationRef
-Publisher SEC
-Name Exchange Act
-Number 240
-Section 14d
-Subsection 2b
| Name: |
dei_PreCommencementTenderOffer |
| Namespace Prefix: |
dei_ |
| Data Type: |
xbrli:booleanItemType |
| Balance Type: |
na |
| Period Type: |
duration |
|
| X |
- DefinitionTitle of a 12(b) registered security. Reference 1: http://www.xbrl.org/2003/role/presentationRef
-Publisher SEC
-Name Exchange Act
-Number 240
-Section 12
-Subsection b
| Name: |
dei_Security12bTitle |
| Namespace Prefix: |
dei_ |
| Data Type: |
dei:securityTitleItemType |
| Balance Type: |
na |
| Period Type: |
duration |
|
| X |
- DefinitionName of the Exchange on which a security is registered. Reference 1: http://www.xbrl.org/2003/role/presentationRef
-Publisher SEC
-Name Exchange Act
-Number 240
-Section 12
-Subsection d1-1
| Name: |
dei_SecurityExchangeName |
| Namespace Prefix: |
dei_ |
| Data Type: |
dei:edgarExchangeCodeItemType |
| Balance Type: |
na |
| Period Type: |
duration |
|
| X |
- DefinitionBoolean flag that is true when the Form 8-K filing is intended to satisfy the filing obligation of the registrant as soliciting material pursuant to Rule 14a-12 under the Exchange Act. Reference 1: http://www.xbrl.org/2003/role/presentationRef
-Publisher SEC
-Name Exchange Act
-Number 240
-Section 14a
-Subsection 12
| Name: |
dei_SolicitingMaterial |
| Namespace Prefix: |
dei_ |
| Data Type: |
xbrli:booleanItemType |
| Balance Type: |
na |
| Period Type: |
duration |
|
| X |
- DefinitionTrading symbol of an instrument as listed on an exchange.
| Name: |
dei_TradingSymbol |
| Namespace Prefix: |
dei_ |
| Data Type: |
dei:tradingSymbolItemType |
| Balance Type: |
na |
| Period Type: |
duration |
|
| X |
- DefinitionBoolean flag that is true when the Form 8-K filing is intended to satisfy the filing obligation of the registrant as written communications pursuant to Rule 425 under the Securities Act. Reference 1: http://www.xbrl.org/2003/role/presentationRef
-Publisher SEC
-Name Securities Act
-Number 230
-Section 425
| Name: |
dei_WrittenCommunications |
| Namespace Prefix: |
dei_ |
| Data Type: |
xbrli:booleanItemType |
| Balance Type: |
na |
| Period Type: |
duration |
|
Dennys (NASDAQ:DENN)
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