Denny’s Corporation Releases Preliminary Financial Results For Fourth Quarter And Fiscal Year 2021
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Denny’s Corporation Releases Preliminary Financial Results For Fourth Quarter And Fiscal Year 2021

Reiterates 2021 Outlook

SPARTANBURG, S.C., Jan. 10, 2022 // GLOBE NEWSWIRE // - Denny’s Corporation (NASDAQ: DENN) today reported selected preliminary and unaudited results for its fourth quarter and fiscal year ended December 29, 2021, and made several announcements regarding important brand initiatives.

John Miller, Chief Executive Officer, stated, “We were pleased that our fourth quarter domestic system-wide same-store sales** exceeded pre-pandemic levels. While the spread of the Omicron variant has caused some near-term uncertainty, we are moving forward with the launch of our exciting revitalization initiatives to further propel this iconic brand forward. We believe that these efforts, supported by an extraordinary group of dedicated franchisees who share our long-term vision, will position Denny’s for continued success.”

2021 Preliminary Results

  Domestic System-Wide Same-Store Sales** Compared to 2019 Fiscal Periods
  Fiscal Year 2021 1: (5%)
  Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec 1
System (31%) (25%) (9%) (2%) (3%) 1% 3% (2%) (1%) 1% 4% (2%)
                         
24/7 Units (20%) (16%) 2% 11% 11% 14% 15% 9% 9% 10% 13% 7%
Limited Hour Units (38%) (32%) (16%) (11%) (12%) (8%) (7%) (10%) (10%) (9%) (6%) (11%)
  1. December results are preliminary.              

        

  Domestic Units Hours of Operations
  Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec 1
24/7 35% 35% 38% 38% 37% 38% 39% 40% 42% 45% 46% 48%
18 - 23 Hours 10% 12% 14% 14% 16% 16% 17% 18% 20% 26% 24% 24%
< than 18 Hours 55% 53% 48% 48% 47% 46% 44% 42% 38% 29% 30% 28%
  1. December results are preliminary.

In 2021, Denny’s opened 20 restaurants, including 8 international locations, and closed 30 restaurants, bringing the year-end total restaurant count to 1,640. In addition, nine remodels were completed during the fiscal year, including four at company restaurants.

In the fourth quarter, the Company allocated $24.0 million to share repurchases, resulting in $30.6 million allocated to share repurchases for the full year. As of December 29, 2021, the Company had approximately $217 million remaining under its existing repurchase authorization.

Real Estate Transactions

In December 2021, the Company sold two parcels of real estate for approximately $49 million. Approximately $13 million of these proceeds will be used to purchase real estate under four existing company restaurants through a series of like-kind exchange transactions.

Transformational Brand Initiatives

As previously disclosed during the third quarter earnings call, the Company is progressing on its rollout of a new restaurant technology platform and starting a new kitchen modernization initiative across the domestic system.

Today, the Company is also announcing three additional brand initiatives: a Heritage 2.0 remodel restart program, a new partnership with REEF, and a new cash development incentive program for domestic franchisees.

The Heritage 2.0 remodel restart program was developed collaboratively with franchisees. With approximately two years of delayed remodels, the Company recognizes that it must balance capital requirements within the franchise system with updating the brand image. Therefore, the Company has extended the remodel cycle from seven years to eight years and has worked with franchisees who have multiple remodels due to map out a more normalized capital spending expectation.

The Company has entered into a new delivery partnership with REEF that should enable Denny's to penetrate markets in which the brand is currently underrepresented, especially dense metropolitan locations.

Business Outlook

Based on preliminary results, Denny’s is reiterating its full year 2021 guidance expectations provided with the Company’s third quarter 2021 results, which were announced on November 2, 2021:

Total general and administrative expenses between $67 million and $69 million, including approximately $13.5 million related to share-based compensation.
Adjusted EBITDA* between $84 and $86 million.

Denny’s expects to release financial and operating results for its fourth quarter and fiscal year ended December 29, 2021, along with annual guidance for 2022, after the market closes on Tuesday, February 15, 2022.

 
Preliminary Results
(Unaudited)
               
Changes in Same-Store Sales ** vs. 2019 Quarter Ended   Fiscal Year Ended
(Increase (decrease)) 12/29/21       12/29/21    
Company Restaurants 5.1 %       (3.5 )%    
Domestic Franchised Restaurants 0.4 %       (4.8 )%    
Domestic System-wide Restaurants 0.7 %       (4.7 )%    
               
Changes in Same-Store Sales ** vs. Prior Year Quarter Ended   Fiscal Year Ended
(Increase (decrease)) 12/29/21   12/30/20   12/29/21   12/30/20
Company Restaurants 58.6 %   (34.9 )%   55.3 %   (36.7 )%
Domestic Franchised Restaurants 48.3 %   (32.8 )%   40.1 %   (30.9 )%
Domestic System-wide Restaurants 49.0 %   (32.9 )%   41.1 %   (31.4 )%
               
      Franchised        
Restaurant Unit Activity Company   & Licensed   Total    
Ending Units September 29, 2021 65     1,582     1,647      
Units Opened     7     7      
Units Closed     (14 )   (14 )    
Net Change     (7 )   (7 )    
Ending Units December 29, 2021 65     1,575     1,640      
               
      Franchised        
Restaurant Unit Activity Company   & Licensed   Total    
Ending Units December 30, 2020 65     1,585     1,650      
Units Opened     20     20      
Units Closed     (30 )   (30 )    
Net Change     (10 )   (10 )    
Ending Units December 29, 2021 65     1,575     1,640      
             

*The Company is not able to reconcile the forward-looking non-GAAP estimates set forth above to their most directly comparable 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 estimates are not provided.

**Same-store sales include sales at company restaurants and non-consolidated franchised and licensed restaurants that were open the same period in the prior year. 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.

Upcoming Investor Conference Presentation

Denny's will be participating virtually in the 2022 Annual ICR Conference. Denny’s presentation will take place on Tuesday, January 11, 2022, at 10:30 a.m. Eastern Time. Investors and interested parties may listen to a live audio webcast of the presentation, which will be available online in the Investor Relations section of Denny's website.

SOURCE Denny’s Corporation

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