Denny’s earnings increase during third quarter

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Spartanburg-based Denny’s Corp. announced Tuesday its earnings increased nearly 9 percent during the third quarter.

The family-dining chain reported its net income grew to $9.7 million, compared with $8.95 million during the same quarter of 2015.

Denny’s said its domestic system-wide same-store sales increased 1 percent, including 1 percent increases at both company-owned and franchise-owned restaurants.

The company said it generated $3.7 million of free cash flow after $18.1 million in capital expenditures and allocated $11.9 million to share repurchase program.

“As we continue to build one of the leading franchise systems in the country, our strategic initiatives have resulted in consistent revenue and earnings growth along with stable free cash flow generation,” said John Miller, president and CEO of Denny’s, in a statement. “During the third quarter, we achieved positive system same-store sales and significantly improved both our company and franchise operating margins as we continued with our improvements in guest appeal.”

The company said its total operating revenue increased 3.7 percent to $128.4 million due to growth in company restaurant sales and franchise royalties.

In total, Denny’s company restaurant sales improved by 4.3 percent to $93.1 million, while franchise and licensing revenue increased 2.2 percent to $35.5 million.

The company’s total debt increased to more than $228 million during the quarter, compared with just under $216 million in December 2015.

The company said it opened 13 restaurants, including 10 domestic and three international franchised locations, during the quarter. It also completed 62 remodels of existing restaurants.

“With our marketing efforts focused on driving additional gains in traffic, ongoing enhancements to our menu and atmosphere, and improved execution for our guests, we remain enthusiastic as we look ahead,” Miller said. “As our successful brand revitalization program accelerates throughout the system, we are confident in our ability to deliver profitable system sales growth while we expand our global reach and position Denny’s for long-term success.”

As of Sept. 28, the company said it had 1,728 restaurants in the U.S., Canada, Puerto Rico, Mexico, New Zealand, Honduras, Costa Rica, Dominican Republic, the United Arab Emirates, Guam, Curaçao, El Salvador and Trinidad and Tobago.

“By successfully delivering a differentiated and relevant brand, we once again outperformed key industry benchmarks and increased our market share,” said Mark Wolfinger, Denny’s CFO, said in a statement. “In addition, we continued to strategically acquire select franchised restaurants that we intend to reinvigorate and reposition in order to enhance our return on invested capital.  With one of the industry’s strongest balance sheets, we have the financial capacity to support our continued growth initiatives while simultaneously returning value to our shareholders with our ongoing share repurchase program.”

For more information visit www.dennys.com.

 

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