Domestic System-Wide Same-Store Sales** | ||||||||||||||||||||||||||||||||
System Year-to-Date October 2021 1: (6%) | ||||||||||||||||||||||||||||||||
Jan | Feb | Mar | Apr | May | Jun | Jul | Aug | Sep | Oct 1 | |||||||||||||||||||||||
System | (31%) | (25%) | (9%) | (2%) | (3%) | 1% | 3% | (2%) | (1%) | 1% | ||||||||||||||||||||||
24/7 Units | (20%) | (16%) | 2% | 11% | 11% | 14% | 15% | 9% | 9% | 10% | ||||||||||||||||||||||
Limited Hour Units | (38%) | (32%) | (16%) | (11%) | (12%) | (8%) | (7%) | (10%) | (10%) | (9%) | ||||||||||||||||||||||
1.October results are preliminary. |
Domestic Average Units | ||||||||||||||||||||||||||||||||
Jan | Feb | Mar | Apr | May | Jun | Jul | Aug | Sep | Oct 1 | |||||||||||||||||||||||
System | 1,504 | 1,501 | 1,501 | 1,499 | 1,498 | 1,497 | 1,495 | 1,493 | 1,495 | 1,494 | ||||||||||||||||||||||
24/7 Units | 519 | 532 | 569 | 566 | 561 | 566 | 576 | 590 | 626 | 665 | ||||||||||||||||||||||
Limited Hour Units | 939 | 928 | 912 | 920 | 926 | 920 | 909 | 894 | 861 | 822 | ||||||||||||||||||||||
Temporary Closures | 46 | 41 | 20 | 13 | 11 | 11 | 10 | 9 | 8 | 7 | ||||||||||||||||||||||
1.October results are preliminary. |
DENNY’S CORPORATION | ||||||||||||||||||||
Condensed Consolidated Balance Sheets | ||||||||||||||||||||
(Unaudited) | ||||||||||||||||||||
(In thousands) | 9/29/21 | 12/30/20 | ||||||||||||||||||
Assets | ||||||||||||||||||||
Current assets | ||||||||||||||||||||
Cash and cash equivalents | $ | 10,203 | $ | 3,892 | ||||||||||||||||
Investments | 2,082 | 2,272 | ||||||||||||||||||
Receivables, net | 16,903 | 21,349 | ||||||||||||||||||
Inventories | 1,230 | 1,181 | ||||||||||||||||||
Assets held for sale | 1,627 | 1,125 | ||||||||||||||||||
Prepaid and other current assets | 14,550 | 18,847 | ||||||||||||||||||
Total current assets | 46,595 | 48,666 | ||||||||||||||||||
Property, net | 81,897 | 86,154 | ||||||||||||||||||
Financing lease right-of-use assets, net | 9,403 | 9,830 | ||||||||||||||||||
Operating lease right-of-use assets, net | 131,616 | 139,534 | ||||||||||||||||||
Goodwill | 36,884 | 36,884 | ||||||||||||||||||
Intangible assets, net | 50,559 | 51,559 | ||||||||||||||||||
Deferred financing costs, net | 3,123 | 2,414 | ||||||||||||||||||
Deferred income taxes, net | 18,069 | 23,210 | ||||||||||||||||||
Other noncurrent assets | 32,878 | 32,698 | ||||||||||||||||||
Total assets | $ | 411,024 | $ | 430,949 | ||||||||||||||||
Liabilities | ||||||||||||||||||||
Current liabilities | ||||||||||||||||||||
Current finance lease liabilities | $ | 2,016 | $ | 1,839 | ||||||||||||||||
Current operating lease liabilities | 15,907 | 16,856 | ||||||||||||||||||
Accounts payable | 15,152 | 12,021 | ||||||||||||||||||
Other current liabilities | 56,985 | 46,462 | ||||||||||||||||||
Total current liabilities | 90,060 | 77,178 | ||||||||||||||||||
Long-term liabilities | ||||||||||||||||||||
Long-term debt | 170,000 | 210,000 | ||||||||||||||||||
Noncurrent finance lease liabilities | 12,825 | 13,530 | ||||||||||||||||||
Noncurrent operating lease liabilities | 129,409 | 137,534 | ||||||||||||||||||
Liability for insurance claims, less current portion | 9,037 | 10,309 | ||||||||||||||||||
Other noncurrent liabilities | 89,330 | 112,844 | ||||||||||||||||||
Total long-term liabilities | 410,601 | 484,217 | ||||||||||||||||||
Total liabilities | 500,661 | 561,395 | ||||||||||||||||||
Shareholders' deficit | ||||||||||||||||||||
Common stock | 642 | 640 | ||||||||||||||||||
Paid-in capital | 132,436 | 123,833 | ||||||||||||||||||
Deficit | (159,896) | (194,514) | ||||||||||||||||||
Accumulated other comprehensive loss, net | (56,256) | (60,405) | ||||||||||||||||||
Treasury Stock | (6,563) | — | ||||||||||||||||||
Total shareholders' deficit | (89,637) | (130,446) | ||||||||||||||||||
Total liabilities and shareholders' deficit | $ | 411,024 | $ | 430,949 | ||||||||||||||||
Debt Balances | ||||||||||||||||||||
Credit facility revolver due 2026 | $ | 170,000 | $ | 210,000 | ||||||||||||||||
Finance lease liabilities | 14,841 | 15,369 | ||||||||||||||||||
Total debt | $ | 184,841 | $ | 225,369 |
DENNY’S CORPORATION | |||||||||||||||||
Condensed Consolidated Statements of Operations | |||||||||||||||||
(Unaudited) | |||||||||||||||||
Quarter Ended | |||||||||||||||||
(In thousands, except per share amounts) | 9/29/21 | 9/23/20 | |||||||||||||||
Revenue: | |||||||||||||||||
Company restaurant sales | $ | 46,470 | $ | 27,849 | |||||||||||||
Franchise and license revenue | 57,324 | 43,795 | |||||||||||||||
Total operating revenue | 103,794 | 71,644 | |||||||||||||||
Costs of company restaurant sales, excluding depreciation and amortization | 38,569 | 27,370 | |||||||||||||||
Costs of franchise and license revenue, excluding depreciation and amortization | 27,469 | 24,073 | |||||||||||||||
General and administrative expenses | 16,497 | 13,694 | |||||||||||||||
Depreciation and amortization | 3,822 | 4,048 | |||||||||||||||
Operating (gains), losses and other charges, net | (215) | (781) | |||||||||||||||
Total operating costs and expenses, net | 86,142 | 68,404 | |||||||||||||||
Operating income | 17,652 | 3,240 | |||||||||||||||
Interest expense, net | 3,671 | 4,422 | |||||||||||||||
Other nonoperating income, net | (2,368) | (8,477) | |||||||||||||||
Income before income taxes | 16,349 | 7,295 | |||||||||||||||
Provision for income taxes | 4,084 | 818 | |||||||||||||||
Net income | $ | 12,265 | $ | 6,477 | |||||||||||||
Basic net income per share | $ | 0.19 | $ | 0.10 | |||||||||||||
Diluted net income per share | $ | 0.19 | $ | 0.10 | |||||||||||||
Basic weighted average shares outstanding | 65,447 | 63,793 | |||||||||||||||
Diluted weighted average shares outstanding | 65,829 | 64,027 | |||||||||||||||
Comprehensive income | $ | 13,089 | $ | 7,489 | |||||||||||||
General and Administrative Expenses | |||||||||||||||||
Corporate administrative expenses | $ | 11,157 | $ | 9,820 | |||||||||||||
Share-based compensation | 3,352 | 1,998 | |||||||||||||||
Incentive compensation | 1,893 | 1,290 | |||||||||||||||
Deferred compensation valuation adjustments | 95 | 586 | |||||||||||||||
Total general and administrative expenses | $ | 16,497 | $ | 13,694 |
DENNY’S CORPORATION | |||||||||||||||||
Condensed Consolidated Statements of Operations | |||||||||||||||||
(Unaudited) | |||||||||||||||||
Three Quarters Ended | |||||||||||||||||
(In thousands, except per share amounts) | 9/29/21 | 9/23/20 | |||||||||||||||
Revenue: | |||||||||||||||||
Company restaurant sales | $ | 127,611 | $ | 85,268 | |||||||||||||
Franchise and license revenue | 162,924 | 123,232 | |||||||||||||||
Total operating revenue | 290,535 | 208,500 | |||||||||||||||
Costs of company restaurant sales, excluding depreciation and amortization | 106,546 | 83,094 | |||||||||||||||
Costs of franchise and license revenue, excluding depreciation and amortization | 79,962 | 68,487 | |||||||||||||||
General and administrative expenses | 50,992 | 34,589 | |||||||||||||||
Depreciation and amortization | 11,380 | 12,252 | |||||||||||||||
Operating (gains), losses and other charges, net | 204 | 2,319 | |||||||||||||||
Total operating costs and expenses, net | 249,084 | 200,741 | |||||||||||||||
Operating income | 41,451 | 7,759 | |||||||||||||||
Interest expense, net | 12,014 | 13,320 | |||||||||||||||
Other nonoperating expense (income), net | (16,165) | 3,851 | |||||||||||||||
Income (loss) before income taxes | 45,602 | (9,412) | |||||||||||||||
Provision for (benefit from) income taxes | 10,984 | (1,937) | |||||||||||||||
Net income (loss) | $ | 34,618 | $ | (7,475) | |||||||||||||
Basic net income (loss) per share | $ | 0.53 | $ | (0.13) | |||||||||||||
Diluted net income (loss) per share | $ | 0.53 | $ | (0.13) | |||||||||||||
Basic weighted average shares outstanding | 65,413 | 59,350 | |||||||||||||||
Diluted weighted average shares outstanding | 65,814 | 59,350 | |||||||||||||||
Comprehensive income (loss) | $ | 38,767 | $ | (34,720) | |||||||||||||
General and Administrative Expenses | |||||||||||||||||
Corporate administrative expenses | $ | 32,374 | $ | 31,302 | |||||||||||||
Share-based compensation | 10,212 | 1,972 | |||||||||||||||
Incentive compensation | 7,011 | 1,305 | |||||||||||||||
Deferred compensation valuation adjustments | 1,395 | 10 | |||||||||||||||
Total general and administrative expenses | $ | 50,992 | $ | 34,589 |
DENNY’S CORPORATION | |||||||||||||||||||||||||||||
Reconciliation of Net Income (Loss) and Net Cash Provided by (Used in) Operating Activities to Non-GAAP Financial Measures | |||||||||||||||||||||||||||||
(Unaudited) |
Quarter Ended | Three Quarters Ended | ||||||||||||||||||||||||||||
(In thousands) | 9/29/21 | 9/23/20 | 9/29/21 | 9/23/20 | |||||||||||||||||||||||||
Net income (loss) | $ | 12,265 | $ | 6,477 | $ | 34,618 | $ | (7,475) | |||||||||||||||||||||
Provision for (benefit from) income taxes | 4,084 | 818 | 10,984 | (1,937) | |||||||||||||||||||||||||
Operating (gains), losses and other charges, net | (215) | (781) | 204 | 2,319 | |||||||||||||||||||||||||
Other nonoperating expense (income), net | (2,368) | (8,477) | (16,165) | 3,851 | |||||||||||||||||||||||||
Share-based compensation expense | 3,352 | 1,998 | 10,212 | 1,972 | |||||||||||||||||||||||||
Deferred compensation plan valuation adjustments | 95 | 586 | 1,395 | 10 | |||||||||||||||||||||||||
Interest expense, net | 3,671 | 4,422 | 12,014 | 13,320 | |||||||||||||||||||||||||
Depreciation and amortization | 3,822 | 4,048 | 11,380 | 12,252 | |||||||||||||||||||||||||
Cash payments for restructuring charges and exit costs | (274) | (1,032) | (1,548) | (2,406) | |||||||||||||||||||||||||
Cash payments for share-based compensation | — | (13) | (1,565) | (3,224) | |||||||||||||||||||||||||
Adjusted EBITDA | $ | 24,432 | $ | 8,046 | $ | 61,529 | $ | 18,682 | |||||||||||||||||||||
DENNY’S CORPORATION | |||||||||||||||||||||||||||||
Reconciliation of Net Income (Loss) and Net Cash Provided by (Used in) Operating Activities to Non-GAAP Financial Measures | |||||||||||||||||||||||||||||
(Unaudited) | |||||||||||||||||||||||||||||
Quarter Ended | Three Quarters Ended | ||||||||||||||||||||||||||||
(In thousands) | 9/29/21 | 9/23/20 | 9/29/21 | 9/23/20 | |||||||||||||||||||||||||
Net cash provided by (used in) operating activities | $ | 19,858 | $ | (3,652) | $ | 63,229 | $ | (11,610) | |||||||||||||||||||||
Capital expenditures | (2,213) | (1,000) | (5,321) | (5,476) | |||||||||||||||||||||||||
Cash payments for restructuring charges and exit costs | (274) | (1,032) | (1,548) | (2,406) | |||||||||||||||||||||||||
Cash payments for share-based compensation | — | (13) | (1,565) | (3,224) | |||||||||||||||||||||||||
Deferred compensation plan valuation adjustments | 95 | 586 | 1,395 | 10 | |||||||||||||||||||||||||
Other nonoperating expense (income), net | (2,368) | (8,477) | (16,165) | 3,851 | |||||||||||||||||||||||||
Gains on investments | 14 | 26 | 11 | 117 | |||||||||||||||||||||||||
Gains (losses) on early termination of debt and leases | (20) | 10 | 52 | (43) | |||||||||||||||||||||||||
Amortization of deferred financing costs | (258) | (251) | (946) | (591) | |||||||||||||||||||||||||
Gains (losses) and amortization on interest rate swap derivatives, net | 2,265 | 7,281 | 14,771 | (4,185) | |||||||||||||||||||||||||
Interest expense, net | 3,671 | 4,422 | 12,014 | 13,320 | |||||||||||||||||||||||||
Cash interest expense, net (1) | (4,195) | (4,698) | (13,236) | (13,135) | |||||||||||||||||||||||||
Deferred income tax (expense) benefit | (1,502) | (1,200) | (3,713) | 2,505 | |||||||||||||||||||||||||
Provision for (benefit from) income taxes | 4,084 | 818 | 10,984 | (1,937) | |||||||||||||||||||||||||
Income taxes paid, net | (3,696) | (268) | (5,638) | (545) | |||||||||||||||||||||||||
Changes in operating assets and liabilities | |||||||||||||||||||||||||||||
Receivables | (3,425) | 1,877 | (4,182) | (7,465) | |||||||||||||||||||||||||
Inventories | (49) | (90) | 49 | (265) | |||||||||||||||||||||||||
Other current assets | 2,381 | 1,272 | (4,296) | 3,865 | |||||||||||||||||||||||||
Other noncurrent assets | (296) | (368) | 1,021 | (474) | |||||||||||||||||||||||||
Operating lease assets and liabilities | 329 | 538 | 1,150 | (1,231) | |||||||||||||||||||||||||
Accounts payable | (740) | 8,003 | (6,360) | 8,540 | |||||||||||||||||||||||||
Accrued payroll | 530 | (2,780) | (1,462) | 8,739 | |||||||||||||||||||||||||
Accrued taxes | (819) | (1,683) | (1,253) | (971) | |||||||||||||||||||||||||
Other accrued liabilities | (1,241) | (39) | (5,890) | 6,512 | |||||||||||||||||||||||||
Other noncurrent liabilities | 2,197 | 2,798 | 4,233 | 5,625 | |||||||||||||||||||||||||
Adjusted Free Cash Flow | $ | 14,328 | $ | 2,080 | $ | 37,334 | $ | (474) | |||||||||||||||||||||
(1) | Includes cash interest expense, net and cash payments of approximately $0.8 million and $2.3 million for dedesignated interest rate swap derivatives for the quarter and year-to-date periods ended September 29, 2021, respectively. Includes cash interest expense, net and cash payments of approximately $0.6 million and $1.1 million for dedesignated interest rate swap derivatives for the quarter and year-to-date periods ended September 23, 2020, respectively. |
DENNY’S CORPORATION | |||||||||||||||||||||||||||||
Reconciliation of Net Income (Loss) and Net Cash Provided by (Used in) Operating Activities to Non-GAAP Financial Measures | |||||||||||||||||||||||||||||
(Unaudited) | |||||||||||||||||||||||||||||
Quarter Ended | Three Quarters Ended | ||||||||||||||||||||||||||||
(In thousands, except per share amounts) | 9/29/21 | 9/23/20 | 9/29/21 | 9/23/20 | |||||||||||||||||||||||||
Adjusted EBITDA | $ | 24,432 | $ | 8,046 | $ | 61,529 | $ | 18,682 | |||||||||||||||||||||
Cash interest expense, net (1) | (4,195) | (4,698) | (13,236) | (13,135) | |||||||||||||||||||||||||
Cash paid for income taxes, net | (3,696) | (268) | (5,638) | (545) | |||||||||||||||||||||||||
Cash paid for capital expenditures | (2,213) | (1,000) | (5,321) | (5,476) | |||||||||||||||||||||||||
Adjusted Free Cash Flow | $ | 14,328 | $ | 2,080 | $ | 37,334 | $ | (474) | |||||||||||||||||||||
Net income (loss) | $ | 12,265 | $ | 6,477 | $ | 34,618 | $ | (7,475) | |||||||||||||||||||||
(Gains) losses and amortization on interest rate swap derivatives, net | (2,265) | (7,281) | (14,771) | 4,185 | |||||||||||||||||||||||||
(Gains) losses on sales of assets and other, net | (93) | (1,202) | (1,100) | (2,260) | |||||||||||||||||||||||||
Impairment charges | — | 338 | — | 2,519 | |||||||||||||||||||||||||
Tax effect (2) | 636 | 2,093 | 3,825 | (1,142) | |||||||||||||||||||||||||
Adjusted Net Income (Loss) | $ | 10,543 | $ | 425 | $ | 22,572 | $ | (4,173) | |||||||||||||||||||||
Diluted weighted average shares outstanding | 65,829 | 64,027 | 65,814 | 59,350 | |||||||||||||||||||||||||
Diluted Net Income (Loss) Per Share | $ | 0.19 | $ | 0.10 | $ | 0.53 | $ | (0.13) | |||||||||||||||||||||
Adjustments Per Share | $ | (0.03) | $ | (0.09) | $ | (0.19) | $ | 0.06 | |||||||||||||||||||||
Adjusted Net Income (Loss) Per Share | $ | 0.16 | $ | 0.01 | $ | 0.34 | $ | (0.07) | |||||||||||||||||||||
(1) | Includes cash interest expense, net and cash payments of approximately $0.8 million and $2.3 million for dedesignated interest rate swap derivatives for the quarter and year-to-date periods ended September 29, 2021, respectively. Includes cash interest expense, net and cash payments of approximately $0.6 million and $1.1 million for dedesignated interest rate swap derivatives for the quarter and year-to-date periods ended September 23, 2020, respectively. | ||||
(2) | Tax adjustments for the quarter and year-to-date periods ended September 29, 2021 reflect an effective tax rate of 27.0% and 24.1%, respectively. Tax adjustments are calculated using an effective tax rate of 25.7% for the quarter and year-to-date periods ended September 23, 2020. |
DENNY’S CORPORATION | |||||||||||||||||||||||||||||
Reconciliation of Operating Income to Non-GAAP Financial Measures | |||||||||||||||||||||||||||||
(Unaudited) |
Quarter Ended | Three Quarters Ended | ||||||||||||||||||||||
(In thousands) | 9/29/21 | 9/23/20 | 9/29/21 | 9/23/20 | |||||||||||||||||||
Operating income | $ | 17,652 | $ | 3,240 | $ | 41,451 | $ | 7,759 | |||||||||||||||
General and administrative expenses | 16,497 | 13,694 | 50,992 | 34,589 | |||||||||||||||||||
Depreciation and amortization | 3,822 | 4,048 | 11,380 | 12,252 | |||||||||||||||||||
Operating (gains), losses and other charges, net | (215) | (781) | 204 | 2,319 | |||||||||||||||||||
Restaurant-level Operating Margin | $ | 37,756 | $ | 20,201 | $ | 104,027 | $ | 56,919 | |||||||||||||||
Restaurant-level Operating Margin consists of: | |||||||||||||||||||||||
Company Restaurant Operating Margin (1) | $ | 7,901 | $ | 479 | $ | 21,065 | $ | 2,174 | |||||||||||||||
Franchise Operating Margin (2) | 29,855 | 19,722 | 82,962 | 54,745 | |||||||||||||||||||
Restaurant-level Operating Margin | $ | 37,756 | $ | 20,201 | $ | 104,027 | $ | 56,919 |
(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) | 9/29/21 | 9/23/20 | ||||||||||||||||||||||||
Company restaurant operations: (1) | ||||||||||||||||||||||||||
Company restaurant sales | $ | 46,470 | 100.0 | % | $ | 27,849 | 100.0 | % | ||||||||||||||||||
Costs of company restaurant sales: | ||||||||||||||||||||||||||
Product costs | 11,430 | 24.6 | % | 7,106 | 25.5 | % | ||||||||||||||||||||
Payroll and benefits | 17,404 | 37.5 | % | 11,925 | 42.8 | % | ||||||||||||||||||||
Occupancy | 3,013 | 6.5 | % | 2,638 | 9.5 | % | ||||||||||||||||||||
Other operating costs: | ||||||||||||||||||||||||||
Utilities | 1,660 | 3.6 | % | 1,281 | 4.6 | % | ||||||||||||||||||||
Repairs and maintenance | 722 | 1.6 | % | 711 | 2.6 | % | ||||||||||||||||||||
Marketing | 1,239 | 2.7 | % | 1,045 | 3.8 | % | ||||||||||||||||||||
Other direct costs | 3,101 | 6.7 | % | 2,664 | 9.6 | % | ||||||||||||||||||||
Total costs of company restaurant sales | $ | 38,569 | 83.0 | % | $ | 27,370 | 98.3 | % | ||||||||||||||||||
Company restaurant operating margin (non-GAAP) (2) | $ | 7,901 | 17.0 | % | $ | 479 | 1.7 | % | ||||||||||||||||||
Franchise operations: (3) | ||||||||||||||||||||||||||
Franchise and license revenue: | ||||||||||||||||||||||||||
Royalties | $ | 27,336 | 47.7 | % | $ | 17,896 | 40.9 | % | ||||||||||||||||||
Advertising revenue | 18,215 | 31.8 | % | 13,927 | 31.8 | % | ||||||||||||||||||||
Initial and other fees | 1,442 | 2.5 | % | 1,890 | 4.3 | % | ||||||||||||||||||||
Occupancy revenue | 10,331 | 18.0 | % | 10,082 | 23.0 | % | ||||||||||||||||||||
Total franchise and license revenue | $ | 57,324 | 100.0 | % | $ | 43,795 | 100.0 | % | ||||||||||||||||||
Costs of franchise and license revenue: | ||||||||||||||||||||||||||
Advertising costs | $ | 18,216 | 31.8 | % | $ | 13,927 | 31.8 | % | ||||||||||||||||||
Occupancy costs | 6,445 | 11.2 | % | 6,858 | 15.7 | % | ||||||||||||||||||||
Other direct costs | 2,808 | 4.9 | % | 3,288 | 7.5 | % | ||||||||||||||||||||
Total costs of franchise and license revenue | $ | 27,469 | 47.9 | % | $ | 24,073 | 55.0 | % | ||||||||||||||||||
Franchise operating margin (non-GAAP) (2) | $ | 29,855 | 52.1 | % | $ | 19,722 | 45.0 | % | ||||||||||||||||||
Total operating revenue (4) | $ | 103,794 | 100.0 | % | $ | 71,644 | 100.0 | % | ||||||||||||||||||
Total costs of operating revenue (4) | 66,038 | 63.6 | % | 51,443 | 71.8 | % | ||||||||||||||||||||
Restaurant-level operating margin (non-GAAP) (4)(2) | $ | 37,756 | 36.4 | % | $ | 20,201 | 28.2 | % | ||||||||||||||||||
Other operating expenses: (4)(2) | ||||||||||||||||||||||||||
General and administrative expenses | $ | 16,497 | 15.9 | % | $ | 13,694 | 19.1 | % | ||||||||||||||||||
Depreciation and amortization | 3,822 | 3.7 | % | 4,048 | 5.7 | % | ||||||||||||||||||||
Operating (gains), losses and other charges, net | (215) | (0.2) | % | (781) | (1.1) | % | ||||||||||||||||||||
Total other operating expenses | $ | 20,104 | 19.4 | % | $ | 16,961 | 23.7 | % | ||||||||||||||||||
Operating income (4) | $ | 17,652 | 17.0 | % | $ | 3,240 | 4.5 | % | ||||||||||||||||||
(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 margins should be considered as a supplement to, not as a substitute for, operating income (loss), net income (loss) 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 | ||||||||||||||||||||||||||
Operating Margins | ||||||||||||||||||||||||||
(Unaudited) | ||||||||||||||||||||||||||
Three Quarters Ended | ||||||||||||||||||||||||||
(In thousands) | 9/29/21 | 9/23/20 | ||||||||||||||||||||||||
Company restaurant operations: (1) | ||||||||||||||||||||||||||
Company restaurant sales | $ | 127,611 | 100.0 | % | $ | 85,268 | 100.0 | % | ||||||||||||||||||
Costs of company restaurant sales: | ||||||||||||||||||||||||||
Product costs | 31,149 | 24.4 | % | 21,541 | 25.3 | % | ||||||||||||||||||||
Payroll and benefits | 47,339 | 37.1 | % | 37,070 | 43.5 | % | ||||||||||||||||||||
Occupancy | 8,707 | 6.8 | % | 8,529 | 10.0 | % | ||||||||||||||||||||
Other operating costs: | ||||||||||||||||||||||||||
Utilities | 4,275 | 3.4 | % | 3,815 | 4.5 | % | ||||||||||||||||||||
Repairs and maintenance | 1,890 | 1.5 | % | 1,928 | 2.3 | % | ||||||||||||||||||||
Marketing | 3,571 | 2.8 | % | 2,771 | 3.2 | % | ||||||||||||||||||||
Other direct costs | 9,615 | 7.5 | % | 7,440 | 8.7 | % | ||||||||||||||||||||
Total costs of company restaurant sales | $ | 106,546 | 83.5 | % | $ | 83,094 | 97.5 | % | ||||||||||||||||||
Company restaurant operating margin (non-GAAP) (2) | $ | 21,065 | 16.5 | % | $ | 2,174 | 2.5 | % | ||||||||||||||||||
Franchise operations: (3) | ||||||||||||||||||||||||||
Franchise and license revenue: | ||||||||||||||||||||||||||
Royalties | $ | 75,297 | 46.2 | % | $ | 48,462 | 39.3 | % | ||||||||||||||||||
Advertising revenue | 50,926 | 31.3 | % | 38,685 | 31.4 | % | ||||||||||||||||||||
Initial and other fees | 5,346 | 3.3 | % | 4,933 | 4.0 | % | ||||||||||||||||||||
Occupancy revenue | 31,355 | 19.2 | % | 31,152 | 25.3 | % | ||||||||||||||||||||
Total franchise and license revenue | $ | 162,924 | 100.0 | % | $ | 123,232 | 100.0 | % | ||||||||||||||||||
Costs of franchise and license revenue: | ||||||||||||||||||||||||||
Advertising costs | $ | 50,927 | 31.3 | % | $ | 38,685 | 31.4 | % | ||||||||||||||||||
Occupancy costs | 19,863 | 12.2 | % | 20,096 | 16.3 | % | ||||||||||||||||||||
Other direct costs | 9,172 | 5.6 | % | 9,706 | 7.9 | % | ||||||||||||||||||||
Total costs of franchise and license revenue | $ | 79,962 | 49.1 | % | $ | 68,487 | 55.6 | % | ||||||||||||||||||
Franchise operating margin (non-GAAP) (2) | $ | 82,962 | 50.9 | % | $ | 54,745 | 44.4 | % | ||||||||||||||||||
Total operating revenue (4) | $ | 290,535 | 100.0 | % | $ | 208,500 | 100.0 | % | ||||||||||||||||||
Total costs of operating revenue (4) | 186,508 | 64.2 | % | 151,581 | 72.7 | % | ||||||||||||||||||||
Restaurant-level operating margin (non-GAAP) (4)(2) | $ | 104,027 | 35.8 | % | $ | 56,919 | 27.3 | % | ||||||||||||||||||
Other operating expenses: (4)(2) | ||||||||||||||||||||||||||
General and administrative expenses | $ | 50,992 | 17.6 | % | $ | 34,589 | 16.6 | % | ||||||||||||||||||
Depreciation and amortization | 11,380 | 3.9 | % | 12,252 | 5.9 | % | ||||||||||||||||||||
Operating (gains), losses and other charges, net | 204 | 0.1 | % | 2,319 | 1.1 | % | ||||||||||||||||||||
Total other operating expenses | $ | 62,576 | 21.5 | % | $ | 49,160 | 23.6 | % | ||||||||||||||||||
Operating income (4) | $ | 41,451 | 14.3 | % | $ | 7,759 | 3.7 | % | ||||||||||||||||||
(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 (loss), net income (loss) 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) vs. 2019 | Quarter Ended | Three Quarters Ended | |||||||||||||||||||||||||||
(Increase (decrease)) | 9/29/21 | 9/29/21 | |||||||||||||||||||||||||||
Company Restaurants | 1.9 | % | (6.4) | % | |||||||||||||||||||||||||
Domestic Franchised Restaurants | (0.3) | % | (6.7) | % | |||||||||||||||||||||||||
Domestic System-wide Restaurants | (0.1) | % | (6.7) | % | |||||||||||||||||||||||||
Changes in Same-Store Sales (1) vs. Prior Year | Quarter Ended | Three Quarters Ended | |||||||||||||||||||||||||||
(Increase (decrease)) | 9/29/21 | 9/23/20 | 9/29/21 | 9/23/20 | |||||||||||||||||||||||||
Company Restaurants | 67.7 | % | (40.2) | % | 54.1 | % | (37.4) | % | |||||||||||||||||||||
Domestic Franchised Restaurants | 48.9 | % | (33.1) | % | 37.2 | % | (30.1) | % | |||||||||||||||||||||
Domestic System-wide Restaurants | 50.2 | % | (33.6) | % | 38.3 | % | (30.7) | % | |||||||||||||||||||||
Average Unit Sales | Quarter Ended | Three Quarters Ended | |||||||||||||||||||||||||||
(In thousands) | 9/29/21 | 9/23/20 | 9/29/21 | 9/23/20 | |||||||||||||||||||||||||
Company Restaurants | $ | 717 | $ | 423 | $ | 1,974 | $ | 1,313 | |||||||||||||||||||||
Franchised Restaurants | $ | 424 | $ | 282 | $ | 1,166 | $ | 868 | |||||||||||||||||||||
Franchised | |||||||||||||||||||||||||||||
Restaurant Unit Activity | Company | & Licensed | Total | ||||||||||||||||||||||||||
Ending Units June 30, 2021 | 65 | 1,580 | 1,645 | ||||||||||||||||||||||||||
Units Opened | — | 7 | 7 | ||||||||||||||||||||||||||
Units Closed | — | (5) | (5) | ||||||||||||||||||||||||||
Net Change | — | 2 | 2 | ||||||||||||||||||||||||||
Ending Units September 29, 2021 | 65 | 1,582 | 1,647 | ||||||||||||||||||||||||||
Equivalent Units | |||||||||||||||||||||||||||||
Third Quarter 2021 | 65 | 1,578 | 1,643 | ||||||||||||||||||||||||||
Third Quarter 2020 | 66 | 1,608 | 1,674 | ||||||||||||||||||||||||||
Net Change | (1) | (30) | (31) | ||||||||||||||||||||||||||
Franchised | |||||||||||||||||||||||||||||
Restaurant Unit Activity | Company | & Licensed | Total | ||||||||||||||||||||||||||
Ending Units December 30, 2020 | 65 | 1,585 | 1,650 | ||||||||||||||||||||||||||
Units Opened | — | 13 | 13 | ||||||||||||||||||||||||||
Units Closed | — | (16) | (16) | ||||||||||||||||||||||||||
Net Change | — | (3) | (3) | ||||||||||||||||||||||||||
Ending Units September 29, 2021 | 65 | 1,582 | 1,647 | ||||||||||||||||||||||||||
Equivalent Units | |||||||||||||||||||||||||||||
Year-to-Date 2021 | 65 | 1,581 | 1,646 | ||||||||||||||||||||||||||
Year-to-Date 2020 | 65 | 1,620 | 1,685 | ||||||||||||||||||||||||||
Net Change | — | (39) | (39) | ||||||||||||||||||||||||||
(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. |