Denny’s(DENN)2024-07-30 20:10Financial Performance - Company restaurant sales were $54.3 million, a decrease from $54.9 million in the prior year quarter, primarily due to a decrease in same-restaurant sales[1]. - Total operating revenue was $115.9 million compared to $116.9 million for the prior year quarter[5]. - Net income was $3.6 million, or $0.07 per diluted share, with adjusted net income of $6.9 million and adjusted net income per share of $0.13[24]. - Net income for the quarter was $3,568, a decline of 58.2% compared to $8,538 in the prior year[35]. - Operating income decreased to $9,115, down 39.2% from $14,934 in the same quarter last year[35]. - Net income for the two quarters ended June 26, 2024, was $8.26 million, compared to $9.14 million for the same period in 2023, reflecting a decrease of approximately 9.6%[61]. - Comprehensive income for the two quarters ended June 26, 2024, was $15.46 million, an increase from $11.51 million in the same period last year, reflecting a growth of approximately 34.5%[61]. Operating Margins - Adjusted company restaurant operating margin was $7.2 million, or 13.2% of company restaurant sales, down from $8.5 million, or 15.4% in the prior year quarter[7]. - Company restaurant operating margin was $10,994, which is 10.3% of company restaurant sales, down from 14.1% in the same quarter last year[48]. - The company restaurant operating margin (non-GAAP) was 12.5% for the quarter, compared to 15.1% in the same quarter last year[70]. - Adjusted EBITDA for the quarter ended June 26, 2024, was $20,286,000, down 11.7% from $22,985,000 in the same quarter last year[63]. - Adjusted EBITDA is expected to be between $83 million and $87 million, down from the previous guidance of $87 million to $91 million[11]. Sales Performance - Denny's domestic system-wide same-restaurant sales were (0.6%), including (0.4%) at domestic franchised restaurants and (2.6%) at company restaurants[20]. - Company restaurant sales for the quarter ended June 26, 2024, were $54,348, a decrease of 0.97% from $54,881 in the same quarter last year[35]. - Company restaurant sales for the two quarters ended June 26, 2024, were $106.69 million, a decrease from $108.33 million for the same period in 2023, representing a decline of approximately 1.5%[61]. - Average unit sales for company restaurants were $774, down from $786 in the previous year, while franchised restaurants saw an increase to $473 from $466[50]. Expenses - Total general and administrative expenses were $20.5 million, slightly up from $20.2 million in the prior year quarter[23]. - General and administrative expenses increased to $20,486, up 1.6% from $20,160 year-over-year[35]. - The total costs of operating revenue were $156,498,000, representing 69.3% of total operating revenue[73]. - Legal settlement expenses for the quarter were $208,000, compared to $121,000 in the same quarter last year[70]. Debt and Future Plans - The company ended the quarter with $267.4 million of total debt outstanding, including $257.5 million of borrowings under its credit facility[9]. - The company plans to open 30 to 40 new restaurants, including 12 to 16 new Keke's restaurants, with a consolidated net decline of 20 to 30[11]. - The company plans to exclude legal settlement expenses and pre-opening costs from adjusted operating margin and other financial measures moving forward[55]. Franchise Revenue - Franchise and license revenue for the quarter was $61,579, a slight decrease from $62,034 in the previous year[45]. - Franchise and license revenue decreased to $119.21 million for the two quarters ended June 26, 2024, down from $126.05 million in the prior year, reflecting a decline of about 5.4%[61]. - Adjusted franchise operating margin was $30,791, or 50.0% of franchise and license revenue, compared to 50.9% in the previous year[45]. Tax Rate - The effective tax rate for the quarter was 24.8%, compared to 32.5% in the same quarter last year[39].