Spartanburg-based Denny’s Corp. announced Monday its earnings increased nearly 17 percent during the first quarter.
The family dining chain reported its net income during the first three months of the year hit almost $10 million, compared with more than $8.5 million during the same period of 2015.
Denny’s said its system-wide same-store sales increased 2.5 percent, including a 3.5 percent increase at its company-owned restaurants and a 2.3 percent increase at franchise stores.
“Our start to the year was quite positive as we grew same-store sales on top of one of our strongest quarters of growth in the prior year,” John Miller, president and CEO of Denny’s, said in a statement. “Our revenue growth, coupled with our ongoing focus on costs, resulted in margin improvement and growth in key profitability metrics. We remain focused on executing our brand revitalization strategy to offer affordable and craveable products delivered with consistent service in an inviting environment.”
The company said it opened 12 restaurants during the quarter and completed 57 store upgrades under its Heritage remodel program. Miller noted that only about one-third of the company’s stores have been renovated under the program.
Denny’s reported its total operating revenue increased 3.7 percent to $124.6 million, compared to about $120 million during the first quarter of 2015.
The company said it generated $14.4 million of free cash flow after capital expenditures of $5.3 million, and allocated $3.9 million towards share repurchases. Denny’s reported its total debt increased by about 2.6 percent to $221.4 million during the first quarter, compared with $215.7 million during the fourth quarter of 2015.
The company said its Advantica Pension Plan, which was closed to new participants at the end of 1999, was liquidated in April, which resulted in Denny’s making a $9.5 million contribution. The restaurant chain said it expects to record an operating loss of $24 million during the second quarter.
“Our continued execution drove another quarter of growth in revenue, margins and profitability,” said Mark Wolfinger, Denny’s CFO, in a statement. “We believe that an additional avenue of growth will be opportunistic acquisitions of franchised restaurants.”
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