Denny’s Corporation (NASDAQ: DENN), franchisor and operator of one of America's largest full-service restaurant chains, today reported results for its third quarter ended September 26, 2012.
Third Quarter Summary
- System-wide same-store sales grew 0.4%, which marks the sixth consecutive quarter that system-wide same-store sales have been positive.
- Opened 12 franchised units, including the first international university unit located in Canada at the Southern Alberta Institute of Technology.
- Signed first international development agreement in South America for 10 units in Chile.
- Franchise operating margin increased $1.0 million to $22.3 million while franchise operating margin (as a percentage of franchise and license revenue) was 64.9%.
- Company restaurant operating margin increased 0.6 percentage points to 14.7% compared with the prior year, and was impacted by $1.3 million for unfavorable workers’ compensation claims development.
- Adjusted Income Before Taxes* grew 9.3% to $13.1 million compared with the prior year.
- Net income of $5.4 million, or $0.06 per diluted share, was impacted by $2.5 million in impairment expense and $1.3 million for unfavorable workers’ compensation claims development.
- Generated $12.9 million of Free Cash Flow* in the quarter which was used to reduce outstanding term loan debt by $7.0 million and repurchase 1.0 million shares.
John Miller, President and Chief Executive Officer, stated, “We are pleased that we achieved our sixth consecutive quarter of positive system-wide same-store sales despite the ongoing challenging consumer economic environment. We continue to grow and revitalize the brand and are making progress in our efforts to differentiate Denny’s in the market place. As Denny’s approaches its 60th anniversary and 1,700th location, we believe that Denny’s will grow its position as one of the largest American full-service brands in the world. Our recent partnership to open units in South America is another step toward that goal. By executing on our strategies to further reinforce our position as America’s Diner, we will build on our efforts to grow the brand and increase shareholder value.”