Denny’s Corporation (NASDAQ: DENN), franchisor and operator of one of America's largest full-service restaurant chains, today reported results for its second quarter ended June 27, 2012.
Second Quarter Summary
- System-wide same-store sales grew 0.8%, which marks the fifth consecutive quarter that system-wide same-store sales have been positive, achieving two-year same-store sales of positive 2.8%.
- Opened nine franchised units, including two international units in the Dominican Republic and Canada.
- Signed largest international development agreement to date for 50 units in southern China.
- Franchise operating margin increased 0.8 percentage points to 66.0% compared with the prior year.
- Company restaurant operating margin increased 1.5 percentage points to 14.8% compared with the prior year.
- Adjusted EBITDA* margin increased 1.7 percentage points to 17.0% compared with the prior year.
- Net income of $4.6 million, or $0.05 per diluted share, was impacted by a charge to other nonoperating expense of $7.9 million as a result of the refinancing of our credit facility in April 2012.
- Adjusted Income Before Taxes* grew 34.6% to $12.9 million compared with the prior year.
- Free Cash Flow* increased 14.5% to $15.0 million compared with the prior year.
- Reduced outstanding term loan debt by $7 million to $183 million bringing Total Debt to Adjusted EBITDA Ratio below 2.5x.
- Repurchased 1.4 million shares in the second quarter bringing total shares repurchased since November 2010 to 8.1 million.
John Miller, President and Chief Executive Officer, stated, “During the second quarter, we achieved our fifth consecutive quarter of positive system-wide same-store sales along with the highest quarterly two-year same-store sales we have generated in almost five years. Despite the persistently challenging economic environment, we continue to deliver solid financial results and make progress in our efforts to differentiate Denny’s in the market place. By executing on our strategies to further reinforce our position as America’s Diner and globally as your local diner, we will build on our efforts to increase shareholder value. As Denny’s approaches its 60th anniversary and 1,700th location, we believe that Denny’s will become one of the largest American full service brands in the world. Our recent partnership to open units in southern China is the first significant step toward that goal.”