denn-20230329

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended March 29, 2023

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from _______________ to ________________

Commission File Number 0-18051

DENNY’S CORPORATION

(Exact name of registrant as specified in its charter)


Delaware		13-3487402
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification No.)

203 East Main Street
Spartanburg,	South Carolina	29319-0001
(Address of principal executive offices)		(Zip Code)

(864) 597-8000

(Registrant’s telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:

Title of each class

Trading Symbol(s)

Name of each exchange on which registered

$.01 Par Value, Common Stock

DENN

The Nasdaq Stock Market LLC

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ý No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ý No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large Accelerated Filer

☐

Accelerated Filer

Non-Accelerated Filer

☐

Smaller Reporting Company

☐

Emerging Growth Company

☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ¨

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

Yes ☐ No ý

As of April 27, 2023, 56,043,779 shares of the registrant’s common stock, par value $0.01 per share, were outstanding.

TABLE OF CONTENTS


			Page
PART I - FINANCIAL INFORMATION

Item 1. Financial Statements (Unaudited)
Consolidated Balance Sheets			3
Consolidated Statements of Operations			4
Consolidated Statements of Comprehensive Income			5
Consolidated Statements of Shareholders' Deficit			6
Consolidated Statements of Cash Flows			7
Notes to Consolidated Financial Statements			8
Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations			19
Item 3. Quantitative and Qualitative Disclosures About Market Risk			28
Item 4. Controls and Procedures			29

PART II - OTHER INFORMATION

Item 1. Legal Proceedings			29
Item 1A. Risk Factors			29
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds			29
Item 6. Exhibits			30
Signatures			31

PART I - FINANCIAL INFORMATION

Item 1. Financial Statements

Denny’s Corporation and Subsidiaries

Consolidated Balance Sheets

(Unaudited)


	March 29, 2023		December 28, 2022
	(In thousands, except per share amounts)
Assets
Current assets:
Cash and cash equivalents	$	8,895	$	3,523
Investments	3,051		1,746
Receivables, net	23,443		25,576
Inventories	3,253		5,538
Assets held for sale	2,312		1,403
Prepaid and other current assets	9,877		12,529
Total current assets	50,831		50,315
Property, net of accumulated depreciation of $155,429 and $153,334, respectively	92,205		94,469
Finance lease right-of-use assets, net of accumulated amortization of $10,194 and $9,847, respectively	6,117		6,499
Operating lease right-of-use assets, net	123,013		126,065
Goodwill	72,142		72,740
Intangible assets, net	94,622		95,034
Deferred financing costs, net	2,179		2,337

Other noncurrent assets	39,338		50,876
Total assets	$	480,447	$	498,335
Liabilities
Current liabilities:
Current finance lease liabilities	$	1,514	$	1,683
Current operating lease liabilities	15,230		15,310
Accounts payable	18,251		19,896
Other current liabilities	50,407		56,762
Total current liabilities	85,402		93,651
Long-term liabilities:
Long-term debt	264,000		261,500
Noncurrent finance lease liabilities	9,237		9,555
Noncurrent operating lease liabilities	120,140		123,404
Liability for insurance claims, less current portion	7,138		7,324
Deferred income taxes, net	7,673		7,419
Other noncurrent liabilities	31,859		32,598
Total long-term liabilities	440,047		441,800
Total liabilities	525,449		535,451
Shareholders' deficit
Common stock $0.01 par value; 135,000 shares authorized; March 29, 2023: 65,468 shares issued and 56,392 outstanding; December 28, 2022: 64,998 shares issued and 56,728 shares outstanding	$	655	$	650
Paid-in capital	142,258		142,136
Deficit	(41,132)		(41,729)
Accumulated other comprehensive loss, net	(42,340)		(42,697)
Treasury stock, at cost, 9,076 and 8,270 shares, respectively	(104,443)		(95,476)
Total shareholders' deficit	(45,002)		(37,116)
Total liabilities and shareholders' deficit	$	480,447	$	498,335

See accompanying notes

Denny’s Corporation and Subsidiaries

Consolidated Statements of Operations

(Unaudited)

Quarter Ended

March 29, 2023

March 30, 2022

(In thousands, except per share amounts)

Revenue:

Company restaurant sales

53,452

SEC Form 10-Q filed by Denny's Corporation