Denny’s Corporation Reports Results For Fourth Quarter And Full Year 2016

SPARTANBURG, S.C. - Feb. 15, 2017 // GLOBE NEWSWIRE // - Denny’s Corporation (NASDAQ:DENN), franchisor and operator of one of America's largest franchised full-service restaurant chains, today reported results for its fourth quarter and full year ended December 28, 2016.

Full Year 2016 Highlights

  • Domestic system-wide same-store sales increased 0.9%, including an increase of 1.1% at company restaurants and an increase of 0.8% at domestic franchised restaurants.
  • Opened 50 system restaurants including 14 international franchised locations.
  • Completed 240 remodels including 27 at company restaurants.
  • Company restaurant operating margin grew 11.1% to $65.2 million while franchise operating margin grew 4.2% to $98.8 million.
  • Net Income was $19.4 million, or $0.25 per diluted share, including a pre-tax settlement loss of $24.3 million resulting from the Company's pension plan liquidation.
  • Adjusted Net Income* grew 15.2% to $42.3 million while Adjusted Net Income per Share* grew 26.5% to $0.55.
  • Adjusted EBITDA* improved by 12.0% to $99.4 million.
  • Generated $51.1 million of Free Cash Flow*, after cash capital expenditures of $34.0 million.
  • Allocated $58.7 million towards share repurchases.

Fourth Quarter Highlights

  • Domestic system-wide same-store sales increased 0.5%, including an increase of 0.1% at company restaurants and an increase of 0.6% at domestic franchised restaurants.
  • Opened 12 system restaurants including four international franchised locations.
  • Completed 51 remodels including 10 at company restaurants.
  • Company restaurant operating margin expanded 22.3% to $16.6 million while franchise operating margin grew 3.7% to $25.2 million.
  • Net Income increased 28.7% to $11.3 million, or $0.15 per diluted share.
  • Adjusted Net Income* grew 41.3% to $12.6 million while Adjusted Net Income per Share* grew 52.9% to $0.17.
  • Adjusted EBITDA* improved by 17.8% to $25.8 million.
  • Generated $14.4 million of Free Cash Flow*, after cash capital expenditures of $6.5 million.
  • Allocated $39.0 million towards share repurchases.

"We are pleased with our performance during the fourth quarter and full year, particularly in light of the pervasive challenges within the restaurant industry," commented John Miller, Denny's President and Chief Executive Officer. "Throughout the year, we continued to successfully execute our brand revitalization strategy and delivered an improved and differentiated experience for our guests across food, service, and atmosphere. These efforts resulted in market share gains and impressive growth in company and franchise margins. In addition, we delivered our best year of unit expansion in the past five years. Moving forward, despite an uncertain industry outlook, Denny's remains committed to further elevating the guest experience, consistently growing same-store sales, and expanding the brand across the globe, leading to value creation for all franchisees and shareholders."

Fourth Quarter Results

Denny’s domestic system-wide same-store sales increased 0.5%, including a 0.1% increase at company restaurants and a 0.6% increase at domestic franchised restaurants. During the quarter, the Company acquired one franchised restaurant. Denny’s franchisees opened 12 restaurants and closed seven restaurants, bringing the total number of restaurants to 1,733.

Denny’s total operating revenue grew 4.5% to $129.6 million due to an increase in both company restaurant sales and franchise royalties. Company restaurant sales improved 6.1% to $94.6 million due to a greater number of company restaurants compared to the prior year quarter and same-store sales growth. Franchise and licensing revenue grew 0.5% to $35.0 million primarily due to higher royalty revenue, partially offset by a decrease in occupancy revenue.

Company restaurant operating margin of $16.6 million, or 17.5% of company restaurant sales, increased $3.0 million, or 230 basis points. Franchise operating margin of $25.2 million, or 72.1% of franchise and licensing revenue, increased $0.9 million, or 220 basis points.

Total general and administrative expenses were $17.3 million compared to $16.8 million in the prior year quarter as lower incentive compensation was offset by higher stock-based compensation. Interest expense of $3.3 million increased $0.7 million due to higher borrowings compared to the prior year quarter. Denny’s ended the quarter with $245.6 million of total debt outstanding, including $218.5 million of borrowings under its revolving credit facility. Depreciation and amortization expense of $6.0 million increased $0.3 million.

The provision for income taxes was $1.9 million, reflecting an effective tax rate of 14.4%. During the quarter, amended federal tax returns for prior years were filed in order to claim foreign tax credits in lieu of foreign tax deductions. These returns generated $1.7 million in additional tax credits and $0.9 million in federal income tax refunds. The Company paid $1.9 million in cash taxes during the quarter.

Denny's Net Income of $11.3 million, or $0.15 per diluted share, grew 28.7%. Adjusted Net Income per Share* of $0.17 grew 52.9% compared to the prior year quarter and included $0.04 per share resulting from the amended tax return filings.

Free Cash Flow* and Capital Allocation

Denny’s generated $14.4 million of Free Cash Flow* in the quarter after investing $6.5 million in cash capital expenditures, including the acquisition of one franchised restaurant and the remodeling of 10 company restaurants.

During the quarter, the Company allocated $39.0 million to share repurchases, including a $25.0 million accelerated share repurchase agreement entered into in November 2016 and completed in February 2017. As part of this agreement, approximately 1.5 million shares were repurchased during the fourth quarter and approximately 0.5 million shares were repurchased following the close of the fourth quarter. As of December 28, 2016, the Company had approximately $79 million remaining in authorized share repurchases, including the impact of the accelerated share repurchase agreement.

Business Outlook

The following full year 2017 estimates are based on management’s expectations at this time.

  • Same-store sales growth at company and domestic franchised restaurants between 0% and 2%.
  • 45 to 50 new restaurant openings, with net restaurant growth of 10 to 20 restaurants.
  • Total operating revenue between $523 and $532 million including franchise and licensing revenue between $140 and $142 million.
  • Company restaurant margin between 17.5% and 18% and franchise restaurant margin between 71% and 71.5%.
  • Total general and administrative expenses between $68 and $71 million.
  • Adjusted EBITDA* between $101 and $103 million.
  • Depreciation and amortization expense between $23 and $24 million.
  • Net interest expense between $12.5 and $13 million.
  • Effective income tax rate between 35% and 37% with cash taxes between $7 and $9 million.
  • Cash capital expenditures between $22 and $24 million including the relocation of three high-performing company restaurants due to impending loss of property control.
  • Free Cash Flow* between $58 and $60 million.

* Adjusted Net Income excludes debt refinancing charges, impairment charges, gains on sales of assets, and other adjustments including the pension settlement loss. The forward looking non-GAAP estimates set forth above are provided only on a non-GAAP basis. The Company is not able to reconcile these forward-looking non-GAAP estimates to their most directly comparable GAAP estimates without unreasonable efforts because it is unable to predict or forecast the items impacting these estimates with a reasonable degree of accuracy. The Company is unable to determine the probable significance of the unavailable information. Please refer to the historical reconciliation of Net Income to Adjusted Income Before Taxes, Adjusted Net Income, Adjusted Net Income per Share, Adjusted EBITDA, and Free Cash Flow included in the following tables.

Conference Call and Webcast Information

Denny’s will provide further commentary on the results for the fourth quarter and full year ended December 28, 2016 on its quarterly investor conference call today, Wednesday, February 15, 2017 at 4:30 p.m. Eastern Time. Interested parties are invited to listen to a live broadcast of the conference call accessible through the investor relations section of Denny’s website at investor.dennys.com. A replay of the call may be accessed at the same location later in the day and will remain available for 30 days.

About Denny’s

Denny's Corporation is the franchisor and operator of one of America's largest franchised full-service restaurant chains, based on the number of restaurants. As of December 28, 2016, Denny’s had 1,733 franchised, licensed, and company restaurants around the world with combined sales of $2.8 billion including 123 restaurants in Canada, Puerto Rico, Mexico, New Zealand, Honduras, Costa Rica, Dominican Republic, the United Arab Emirates, Guam, the Philippines, Curaçao, El Salvador, and Trinidad and Tobago. For further information on Denny's, including news releases, links to SEC filings, and other financial information, please visit the Denny's investor relations website at investor.dennys.com.

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 its 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”, 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: competitive pressures from within the restaurant industry; the level of success of our operating initiatives and advertising and promotional efforts; adverse publicity; health concerns arising from food-related pandemics, outbreaks of flu viruses, such as avian flu, or other diseases; changes in business strategy or development plans; terms and availability of capital; regional weather conditions; overall changes in the general economy (including with regard to energy costs), particularly at the retail level; political environment (including acts of war and terrorism); and other factors from time to time set forth in the Company’s SEC reports and other filings, including but not limited to the discussion in Management’s Discussion and Analysis and the risks identified in Item 1A. Risk Factors contained in the Company’s Annual Report on Form 10-K for the year ended December 30, 2015 (and in the Company’s subsequent quarterly reports on Form 10-Q).

DENNY’S CORPORATION
Condensed Consolidated Balance Sheets
(Unaudited)
             
(In thousands) 12/28/16   12/30/15
Assets      
  Current assets      
    Cash and cash equivalents $ 2,592     $ 1,671  
    Receivables 19,841     16,552  
    Assets held for sale 1,020     931  
    Other current assets 12,454     17,260  
      Total current assets 35,907     36,414  
  Property, net 133,102     124,816  
  Goodwill 35,233     33,454  
  Intangible assets, net 54,493     46,074  
  Deferred income taxes 17,683     29,159  
  Other noncurrent assets 29,733     27,120  
      Total assets $ 306,151     $ 297,037  
             
Liabilities      
  Current liabilities      
    Current maturities of capital lease obligations $ 3,285     $ 3,246  
    Accounts payable 25,289     20,759  
    Other current liabilities 64,796     77,548  
      Total current liabilities 93,370     101,553  
  Long-term liabilities      
    Long-term debt, less current maturities 218,500     195,000  
    Capital lease obligations, less current maturities 23,806     17,499  
    Other 41,587     43,580  
      Total long-term liabilities 283,893     256,079  
      Total liabilities 377,263     357,632  
             
Shareholders' deficit      
    Common stock 1,071     1,065  
    Paid-in capital 577,951     565,364  
    Deficit (382,843 )   (402,245 )
    Accumulated other comprehensive loss, net of tax (1,407 )   (23,777 )
    Treasury stock (265,884 )   (201,002 )
      Total shareholders' deficit (71,112 )   (60,595 )
      Total liabilities and shareholders' deficit $ 306,151     $ 297,037  
             
Debt Balances
(In thousands) 12/28/16   12/30/15
Credit facility revolver due 2020 $ 218,500     $ 195,000  
Capital leases 27,091     20,745  
  Total debt $ 245,591     $ 215,745  

 

DENNY’S CORPORATION
Condensed Consolidated Statements of Comprehensive Income
(Unaudited)
           
      Quarter Ended
(In thousands, except per share amounts) 12/28/16   12/30/15
Revenue:      
  Company restaurant sales $ 94,592     $ 89,183  
  Franchise and license revenue 35,013     34,842  
    Total operating revenue 129,605     124,025  
Costs of company restaurant sales 78,030     75,639  
Costs of franchise and license revenue 9,768     10,502  
General and administrative expenses 17,269     16,831  
Depreciation and amortization 5,971     5,712  
Operating (gains), losses and other charges, net 2,545     644  
    Total operating costs and expenses, net 113,583     109,328  
Operating income 16,022     14,697  
Interest expense, net 3,327     2,605  
Other nonoperating income, net (474 )   (399 )
Net income before income taxes 13,169     12,491  
Provision for income taxes 1,895     3,732  
Net income $ 11,274     $ 8,759  
           
           
Basic net income per share $ 0.16     $ 0.11  
Diluted net income per share $ 0.15     $ 0.11  
           
Basic weighted average shares outstanding 72,657     78,650  
Diluted weighted average shares outstanding 74,650     80,783  
           
Comprehensive income $ 19,675     $ 10,828  
       
General and Administrative Expenses Quarter Ended
(In thousands) 12/28/2016   12/30/2015
Share-based compensation $ 1,985     $ 1,130  
Other general and administrative expenses 15,284     15,701  
  Total general and administrative expenses $ 17,269     $ 16,831  

 

DENNY’S CORPORATION
Condensed Consolidated Statements of Comprehensive Income
(Unaudited)
           
      Fiscal Year Ended
(In thousands, except per share amounts) 12/28/16   12/30/15
Revenue:      
  Company restaurant sales $ 367,310     $ 353,073  
  Franchise and license revenue 139,638     138,220  
    Total operating revenue 506,948     491,293  
Costs of company restaurant sales 302,096     294,357  
Costs of franchise and license revenue 40,805     43,345  
General and administrative expenses 67,960     66,602  
Depreciation and amortization 22,178     21,472  
Operating (gains), losses and other charges, net 26,910     2,366  
    Total operating costs and expenses, net 459,949     428,142  
Operating income 46,999     63,151  
Interest expense, net 12,232     9,283  
Other nonoperating (income) expense, net (1,109 )   139  
Net income before income taxes 35,876     53,729  
Provision for income taxes 16,474     17,753  
Net income $ 19,402     $ 35,976  
           
           
Basic net income per share $ 0.26     $ 0.44  
Diluted net income per share $ 0.25     $ 0.42  
           
Basic weighted average shares outstanding 75,325     82,627  
Diluted weighted average shares outstanding 77,206     84,729  
           
Comprehensive income $ 41,772     $ 36,801  
       
General and Administrative Expenses Fiscal Year Ended
(In thousands) 12/28/16   12/30/15
Share-based compensation $ 7,610     $ 6,635  
Other general and administrative expenses 60,350     59,967  
  Total general and administrative expenses $ 67,960     $ 66,602  


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

The Company believes that, in addition to GAAP measures, certain other non-GAAP financial measures are appropriate indicators to assist in the evaluation of operating performance on a period-to-period basis.  The Company uses Adjusted Income Before Taxes, Adjusted EBITDA, Free Cash Flow and Adjusted Net Income internally as performance measures for planning purposes, including the preparation of annual operating budgets, and for compensation purposes, including bonuses for certain employees.  Adjusted EBITDA is also used to evaluate the ability to service debt because the excluded charges do not have an impact on prospective debt servicing capability and these adjustments are contemplated in our credit facility for the computation of our debt covenant ratios. Free Cash Flow, defined as Adjusted EBITDA less cash portion of interest expense net of interest income, capital expenditures, and cash taxes, is used to evaluate operating effectiveness and decisions regarding the allocation of resources.  However, each of these non-GAAP financial measures should be considered as a supplement to, not a substitute for, operating income, net income or other financial performance measures prepared in accordance with U.S. generally accepted accounting principles.

  Quarter Ended   Fiscal Year Ended
(In thousands, except per share amounts) 12/28/16   12/30/15   12/28/16   12/30/15
Net income $ 11,274     $ 8,759     $ 19,402     $ 35,976  
Provision for income taxes 1,895     3,732     16,474     17,753  
Operating (gains), losses and other charges, net 2,545     644     26,910     2,366  
Other nonoperating (income) expense, net (474 )   (399 )   (1,109 )   139  
Share-based compensation 1,985     1,130     7,610     6,635  
Adjusted Income Before Taxes $ 17,225     $ 13,866     $ 69,287     $ 62,869  
               
Interest expense, net 3,327     2,605     12,232     9,283  
Depreciation and amortization 5,971     5,712     22,178     21,472  
Cash payments for restructuring charges and exit costs (706 )   (259 )   (1,810 )   (1,475 )
Cash payments for share-based compensation         (2,529 )   (3,440 )
Adjusted EBITDA $ 25,817     $ 21,924     $ 99,358     $ 88,709  
               
Cash interest expense, net (3,082 )   (2,348 )   (11,232 )   (8,299 )
Cash paid for income taxes, net (1,872 )   (448 )   (3,012 )   (5,364 )
Cash paid for capital expenditures (6,460 )   (12,018 )   (34,031 )   (32,780 )
Free Cash Flow $ 14,403     $ 7,110     $ 51,083     $ 42,266  
               
  Quarter Ended   Fiscal Year Ended
(In thousands, except per share amounts) 12/28/16   12/30/15   12/28/16   12/30/15
Net income $ 11,274     $ 8,759     $ 19,402     $ 35,976  
Pension settlement loss         24,297      
Gains on sales of assets and other, net 793     (50 )   29     (93 )
Impairment charges 1,098     264     1,098     935  
Loss on debt refinancing             293  
Tax effect (1) (584 )   (71 )   (2,492 )   (375 )
Adjusted Net Income $ 12,581     $ 8,902     $ 42,334     $ 36,736  
               
Diluted weighted average shares outstanding 74,650     80,783     77,206     84,729  
               
Adjusted Net Income Per Share $ 0.17     $ 0.11     $ 0.55     $ 0.43  
 
(1) Tax adjustment for the loss on pension termination for the three months and year ended December 28, 2016 are calculated using an effective tax rate of 8.8%. The remaining tax adjustments for the three months and year ended December 28, 2016 are calculated using the Company's year-to-date effective tax rate of 30.9%, which excludes the impact of the pension termination. Tax adjustments for the three months and year ended December 30, 2015 are calculated using the Company's 2015 year-to-date effective tax rate of 33.0%.

 

DENNY’S CORPORATION
Operating Margins
(Unaudited)
             
        Quarter Ended
(In thousands) 12/28/16   12/30/15
Company restaurant operations: (1)          
  Company restaurant sales $ 94,592   100.0 %   $ 89,183   100.0 %
  Costs of company restaurant sales:          
    Product costs 23,234   24.6 %   23,051   25.8 %
    Payroll and benefits 38,275   40.5 %   35,508   39.8 %
    Occupancy 4,836   5.1 %   5,471   6.1 %
    Other operating costs:          
      Utilities 3,194   3.4 %   3,041   3.4 %
      Repairs and maintenance 1,513   1.6 %   1,521   1.7 %
      Marketing 2,989   3.2 %   2,679   3.0 %
      Other 3,989   4.2 %   4,368   4.9 %
  Total costs of company restaurant sales $ 78,030   82.5 %   $ 75,639   84.8 %
  Company restaurant operating margin (2) $ 16,562   17.5 %   $ 13,544   15.2 %
                 
Franchise operations: (3)          
  Franchise and license revenue:          
  Royalties $ 24,722   70.6 %   $ 23,896   68.6 %
  Initial fees 636   1.8 %   819   2.3 %
  Occupancy revenue 9,655   27.6 %   10,127   29.1 %
  Total franchise and license revenue $ 35,013   100.0 %   $ 34,842   100.0 %
                 
  Costs of franchise and license revenue:          
  Occupancy costs $ 6,689   19.1 %   $ 7,172   20.6 %
  Other direct costs 3,079   8.8 %   3,330   9.6 %
  Total costs of franchise and license revenue $ 9,768   27.9 %   $ 10,502   30.1 %
  Franchise operating margin (2) $ 25,245   72.1 %   $ 24,340   69.9 %
                 
Total operating revenue (4) $ 129,605   100.0 %   $ 124,025   100.0 %
Total costs of operating revenue (4) 87,798   67.7 %   86,141   69.5 %
Total operating margin (4)(2) $ 41,807   32.3 %   $ 37,884   30.5 %
                 
Other operating expenses: (4)(2)          
  General and administrative expenses $ 17,269   13.3 %   $ 16,831   13.6 %
  Depreciation and amortization 5,971   4.6 %   5,712   4.6 %
  Operating (gains), losses and other charges, net 2,545   2.0 %   644   0.5 %
  Total other operating expenses $ 25,785   19.9 %   $ 23,187   18.7 %
                 
Operating income (4) $ 16,022   12.4 %   $ 14,697   11.9 %
                 
(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, net income or other financial measures prepared in accordance with U.S. generally accepted accounting principles.
(3 ) As a percentage of franchise and license revenue.
(4 ) As a percentage of total operating revenue.

 

DENNY’S CORPORATION
Operating Margins
(Unaudited)
             
        Fiscal Year Ended
(In thousands) 12/28/16   12/30/15
Company restaurant operations: (1)          
  Company restaurant sales $ 367,310   100.0 %   $ 353,073   100.0 %
  Costs of company restaurant sales:          
    Product costs 90,487   24.6 %   89,660   25.4 %
    Payroll and benefits 142,823   38.9 %   136,626   38.7 %
    Occupancy 19,557   5.3 %   20,443   5.8 %
    Other operating costs:          
      Utilities 12,426   3.4 %   12,866   3.6 %
      Repairs and maintenance 6,406   1.7 %   6,017   1.7 %
      Marketing 13,112   3.6 %   12,527   3.5 %
      Other 17,285   4.7 %   16,218   4.6 %
  Total costs of company restaurant sales $ 302,096   82.2 %   $ 294,357   83.4 %
  Company restaurant operating margin (2) $ 65,214   17.8 %   $ 58,716   16.6 %
                 
Franchise operations: (3)          
  Franchise and license revenue:          
  Royalties $ 98,416   70.5 %   $ 94,755   68.6 %
  Initial fees 2,717   1.9 %   2,478   1.8 %
  Occupancy revenue 38,505   27.6 %   40,987   29.7 %
  Total franchise and license revenue $ 139,638   100.0 %   $ 138,220   100.0 %
                 
  Costs of franchise and license revenue:          
  Occupancy costs $ 28,062   20.1 %   $ 30,416   22.0 %
  Other direct costs 12,743   9.1 %   12,929   9.4 %
  Total costs of franchise and license revenue $ 40,805   29.2 %   $ 43,345   31.4 %
  Franchise operating margin (2) $ 98,833   70.8 %   $ 94,875   68.6 %
                 
Total operating revenue (4) $ 506,948   100.0 %   $ 491,293   100.0 %
Total costs of operating revenue (4) 342,901   67.6 %   337,702   68.7 %
Total operating margin (4)(2) $ 164,047   32.4 %   $ 153,591   31.3 %
                 
Other operating expenses: (4)(2)          
  General and administrative expenses $ 67,960   13.4 %   $ 66,602   13.6 %
  Depreciation and amortization 22,178   4.4 %   21,472   4.4 %
  Operating gains, losses and other charges, net 26,910   5.3 %   2,366   0.5 %
  Total other operating expenses $ 117,048   23.1 %   $ 90,440   18.4 %
                 
Operating income (4) $ 46,999   9.3 %   $ 63,151   12.9 %
                 
(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, net income or other financial measures prepared in accordance with U.S. generally accepted accounting principles.
(3 ) As a percentage of franchise and license revenue.
(4 ) As a percentage of total operating revenue.

 

DENNY’S CORPORATION
Statistical Data
(Unaudited)
                   
Same-Store Sales Quarter Ended   Fiscal Year Ended
(increase vs. prior year) 12/28/16   12/30/15   12/28/16   12/30/15
  Company Restaurants 0.1 %   3.5 %   1.1 %   6.5 %
  Domestic Franchised Restaurants 0.6 %   2.8 %   0.8 %   5.7 %
  Domestic System-wide Restaurants 0.5 %   2.9 %   0.9 %   5.8 %
  System-wide Restaurants 0.6 %   2.0 %   0.7 %   4.9 %
                   
Average Unit Sales Quarter Ended   Fiscal Year Ended
(In thousands) 12/28/16   12/30/15   12/28/16   12/30/15
  Company Restaurants $ 565     $ 557     $ 2,254     $ 2,217  
  Franchised Restaurants $ 389     $ 388     $ 1,563     $ 1,555  
                   
          Franchised        
Restaurant Unit Activity Company    & Licensed   Total    
Ending Units September 28, 2016 168     1,560     1,728      
  Units Opened     12     12      
  Units Reacquired 1     (1 )        
  Units Refranchised              
  Units Closed     (7 )   (7 )    
    Net Change 1     4     5      
Ending Units December 28, 2016 169     1,564     1,733      
                   
Equivalent Units              
  Fourth Quarter 2016 167     1,563     1,730      
  Fourth Quarter 2015 160     1,543     1,703      
    Net Change 7     20     27      
                   
          Franchised        
Restaurant Unit Activity Company    & Licensed   Total    
Ending Units December 30, 2015 164     1,546     1,710      
  Units Opened 1     49     50      
  Units Reacquired 10     (10 )        
  Units Refranchised (6 )   6          
  Units Closed     (27 )   (27 )    
    Net Change 5     18     23      
Ending Units December 28, 2016 169     1,564     1,733      
                   
Equivalent Units              
  Year-to-Date 2016 163     1,556     1,719      
  Year-to-Date 2015 159     1,538     1,697      
    Net Change 4     18     22      

Investor Contact:

Curt Nichols
877-784-7167

Media Contact:

Jessica Liddell
ICR
203-682-8208

SOURCE Denny's Corporation

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