Denny’s Corporation (NASDAQ: DENN), one of America’s largest full-service family restaurant chains, today reported results for its third quarter ended September 28, 2011.
Third Quarter Summary
- System-wide same-store sales grew 0.9% with a 0.8% increase at franchised units and a 1.1% increase at company-owned units marking the second consecutive quarter that both franchise and company same-store sales have been positive.
- Same-store guest counts decreased 0.2% at company-owned units with two-year same-store guest counts of positive 2.1%.
- Opened 11 system-wide units, including three Flying J Travel Center conversion sites, three university units, and one international unit.
- Franchise operating margin of $21.3 million grew $0.5 million, compared to the prior year quarter. Franchise operating margin, as a percentage of franchise and license revenue, increased 3.1 percentage points to 66.4%, compared with the prior year quarter.
- Net income of $8.0 million, or $0.08 per diluted share, was impacted by $2.2 million in impairment expense.
- Adjusted income before taxes* increased 28% to $12.0 million compared with the prior year quarter adjusted income of $9.4 million.
- Reduced outstanding debt by $10 million bringing total term loan debt repayment to $40 million since October 2010 refinancing.
- Repurchased 1.3 million shares in the third quarter bringing total shares repurchased to 6.1 million in last 10 months.
John Miller, President and Chief Executive Officer, stated, “Denny’s generated positive same-store sales and positive two-year same-store guest counts in the face of a very challenging consumer and inflationary economic environment. This is a testament to the success of our positioning as America’s favorite diner, emphasizing everyday affordability with attractive Limited Time Only products. We also achieved an increase in profitability despite the headwinds coming from inflationary pressures. We are working closely with our franchisees to continue building on our success in growing units, sales and profitability which has enabled Denny’s to grow free cash flow, pay down debt and repurchase shares in its efforts to increase long-term shareholder value.”