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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 8-K
 
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
 
Date of Report (Date of earliest event reported) August 1, 2023

Dennys.gif

DENNY’S CORPORATION
(Exact name of registrant as specified in its charter)
Delaware 0-18051 13-3487402
(State or other jurisdiction (Commission (IRS Employer
of incorporation) File Number) 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)
 
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
 
☐  Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

☐ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

☐   Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

☐   Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

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 is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

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. ☐



Item 2.02 Results of Operations and Financial Condition.

On August 1, 2023, Denny's Corporation (the "Company") issued a press release announcing financial results for the second quarter ended June 28, 2023. A copy of the press release is attached as Exhibit 99.1 hereto and incorporated herein by reference.

Item 7.01 Regulation FD Disclosure.

The management of the Company will conduct meetings with members of the investment community during August and September 2023. A copy of the investor presentation to be used during these meetings is attached to this Current Report on Form 8-K as Exhibit 99.2 and is also available at the Company's investor relations website at investor.dennys.com.

The information in this Item 7.01 of this Current Report on Form 8-K, including Exhibit 99.2 hereto, shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liabilities of that section. The information in this Item 7.01 of this Current Report on Form 8-K shall not be deemed to be incorporated by reference in any filing under the Securities Act of 1933, as amended, or the Exchange Act, except as expressly set forth by specific reference in such filing.

Item 9.01 Financial Statements and Exhibits.

(d) Exhibits

See the Exhibit Index below, which is incorporated by reference herein.


EXHIBIT INDEX
Exhibit
number		 Description
99.1
99.2
104 Cover Page Interactive Data File (formatted as Inline XBRL)




SIGNATURES
 
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
 
 
 
  Denny's Corporation
   
   
Date: August 1, 2023 /s/ Robert P. Verostek
  Robert P. Verostek
  Executive Vice President and
  Chief Financial Officer



EX-99.1 2 q22023ex991earningspressre.htm EX-99.1 Document

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DENNY’S CORPORATION REPORTS RESULTS FOR SECOND QUARTER 2023 REITERATES FULL YEAR 2023 ADJUSTED EBITDA GUIDANCE


SPARTANBURG, S.C., August 1, 2023 - Denny’s Corporation (the "Company") (NASDAQ: DENN), owner and operator of Denny's Inc. ("Denny's") and Keke's Inc. ("Keke's") today reported results for its second quarter ended June 28, 2023 and provided a business update on the Company’s operations.


Kelli Valade, Chief Executive Officer, stated, "We were pleased to report 3.0% Denny's domestic system-wide same-restaurant sales**, expansion of restaurant-level margins, and even higher growth in adjusted EBITDA for the quarter. We also nearly doubled adjusted free cash flow compared to the year-ago period, supporting our ability to repurchase shares under our authorization. As we continue to gain rich insights about our guests, we are excited about the opportunities to execute focused, long-term brand revitalization strategies at Denny's while also expanding the reach of Keke's."


Second Quarter 2023 Highlights

•Total operating revenue grew 1.7% to $116.9 million compared to the prior year quarter.
•Denny's domestic system-wide same-restaurant sales** grew 3.0% compared to the equivalent fiscal period in 2022, including increases of 3.0% at domestic franchised restaurants and 3.0% at company restaurants.
•Opened 10 franchised restaurants, including 4 international Denny's locations and 1 Keke's location.
•Completed four Denny's remodels, including three franchised restaurant remodels.
•Operating income was $14.9 million compared to $13.9 million in the prior year quarter.
•Franchise Operating Margin* was $31.6 million, or 50.9% of franchise and license revenue, and Company Restaurant Operating Margin* was $8.3 million, or 15.1% of company restaurant sales.
•Net income was $8.5 million, or $0.15 per diluted share.
•Adjusted Net Income* and Adjusted Net Income Per Share* were $8.2 million and $0.14, respectively.
•Adjusted EBITDA* was $22.3 million.
•Cash provided by (used in) operating, investing, and financing activities was $19.5 million, ($0.6) million, and ($26.7) million, respectively.
•Adjusted Free Cash Flow* was $12.7 million.
•Repurchased $10.4 million of common stock.








1

Second Quarter 2023 Results

Total operating revenue increased 1.7% to $116.9 million compared to $115.0 million in the prior year quarter.

Franchise and license revenue was $62.0 million compared to $65.9 million in the prior year quarter. This change was primarily driven by a $5.2 million decrease in initial and other fees, associated with the sale of kitchen equipment in the prior year quarter. These impacts were partially offset by Denny's franchised restaurants same-restaurant sales** growth and $1.7 million of Keke's franchise revenue in the current quarter.

Company restaurant sales were $54.9 million compared to $49.2 million in the prior year quarter. This growth was primarily due to $3.7 million of Keke's company restaurant sales in the current quarter and benefits from Denny's price increases compared to the prior year quarter.

Franchise Operating Margin* was $31.6 million, or 50.9% of franchise and license revenue, compared to $30.6 million, or 46.4%, in the prior year quarter. Approximately 440 basis points of the favorable change in margin rate resulted from a lower kitchen modernization rollout impact in the current year quarter.

Company Restaurant Operating Margin* was $8.3 million, or 15.1% of company restaurant sales, compared to $4.3 million, or 8.8%, in the prior year quarter. This margin change was primarily due to approximately $2.3 million of unfavorable legal reserve adjustments in the prior year quarter, as well as the improvement in sales performance at company restaurants in the current year quarter.

Total general and administrative expenses were $20.2 million, compared to $16.6 million in the prior year quarter. This change was primarily due to increases in deferred compensation valuation adjustments, corporate administration expenses, and performance-based incentive compensation, partially offset by a reduction in share-based compensation expense.

The provision for income taxes was $2.7 million, reflecting an effective tax rate of 23.8% for the quarter. Approximately $3.4 million in cash taxes were paid during the quarter.
Net income was $8.5 million, or $0.15 per diluted share, compared to $23.0 million, or $0.37 per diluted share, in the prior year quarter. This change in net income was primarily due to $21.7 million of gains related to dedesignated interest rate swap valuation adjustments in the prior year quarter. Adjusted Net Income* per share was $0.14 compared to $0.11 in the prior year quarter.

The Company ended the quarter with $257.8 million of total debt outstanding, including $247.0 million of borrowings under its credit facility.

Adjusted Free Cash Flow* and Capital Allocation

Adjusted Free Cash Flow* in the quarter was $12.7 million after investing $2.0 million in cash capital expenditures, including one company restaurant remodel and facilities maintenance.

During the quarter, the Company allocated $10.4 million to share repurchases resulting in approximately $133.1 million remaining under its existing repurchase authorization.





2

Business Outlook

The following full year 2023 guidance reflects management's expectations that the current consumer and economic environment will not change materially:

•Denny's domestic system-wide same-restaurant sales** between 3% and 6%.
•Consolidated restaurant openings of 35 to 45, including 8 to 12 new Keke's restaurants, with a consolidated net decline of 15 to 25.
•Commodity inflation between 1% and 3% (vs. between 4% and 6%).
•Labor inflation of approximately 4% (vs. approximately 5%).
•Consolidated total general and administrative expenses between $78 million and $80 million (vs. between $79 million and $82 million), including approximately $12 million (vs. approximately $14 million) related to share-based compensation expense which does not impact Consolidated Adjusted EBITDA*.
•Consolidated Adjusted EBITDA* between $86 million and $90 million.

*    Please refer to the Reconciliation of Net Income and Net Cash Provided by Operating Activities to Non-GAAP Financial Measures, as well as the Reconciliation of Operating Income to Non-GAAP Financial Measures included in the tables below. The Company is not able to reconcile the forward-looking non-GAAP estimates set forth above to their most directly comparable U.S. generally accepted accounting principles (GAAP) estimates without unreasonable efforts because it is unable to predict, forecast or determine the probable significance of the items impacting these estimates, including gains, losses and other charges, with a reasonable degree of accuracy. Accordingly, the most directly comparable forward-looking GAAP estimates are not provided.

** Same-restaurant sales include sales at company restaurants and non-consolidated franchised and licensed restaurants that were open during the comparable periods noted. Total operating revenue is limited to company restaurant sales and royalties, advertising revenue, initial and other fees and occupancy revenue from non-consolidated franchised and licensed restaurants. Accordingly, domestic franchise same-restaurant sales and domestic system-wide same-restaurant sales should be considered as a supplement to, not a substitute for, the Company's results as reported under GAAP.


Conference Call and Webcast Information

The Company will provide further commentary on the results for the second quarter ended June 28, 2023 on its quarterly investor conference call today, Tuesday, August 1, 2023 at 4:30 p.m. Eastern Time. Interested parties are invited to listen to a live broadcast of the conference call accessible through the Company's investor relations website at investor.dennys.com.

About Denny's Corporation

Denny’s Corporation is one of America’s largest full-service restaurant chains based on number of restaurants. As of June 28, 2023, the Company consisted of 1,646 restaurants, 1,572 of which were franchised and licensed restaurants and 74 of which were company operated.

3

Denny's Corporation consists of the Denny’s brand and the Keke’s brand. As of June 28, 2023, the Denny's brand consisted of 1,591 global restaurants, 1,525 of which were franchised and licensed restaurants and 66 of which were company operated. As of June 28, 2023, the Keke's brand consisted of 55 restaurants, 47 of which were franchised restaurants and 8 of which were company operated.

For further information on Denny's Corporation, including news releases, links to SEC filings, and other financial information, please visit investor.dennys.com.



Cautionary Language Regarding Forward-Looking Statements

The Company urges caution in considering its current trends and any outlook on earnings disclosed in this press release. In addition, certain matters discussed in this release may constitute forward-looking statements. These forward-looking statements, which reflect management's best judgment based on factors currently known, are intended to speak only as of the date such statements are made and involve risks, uncertainties, and other factors that may cause the actual performance of Denny’s Corporation, its subsidiaries, and underlying restaurants to be materially different from the performance indicated or implied by such statements. Words such as “expect”, “anticipate”, “believe”, “intend”, “plan”, “hope”, "will", and variations of such words and similar expressions are intended to identify such forward-looking statements. Except as may be required by law, the Company expressly disclaims any obligation to update these forward-looking statements to reflect events or circumstances after the date of this release or to reflect the occurrence of unanticipated events. Factors that could cause actual performance to differ materially from the performance indicated by these forward-looking statements include, among others: economic, public health and political conditions that impact consumer confidence and spending, commodity and labor inflation; the ability to effectively staff restaurants; the Company's ability to maintain adequate levels of liquidity for its cash needs, including debt obligations, payment of dividends, planned share repurchases and capital expenditures as well as the ability of its customers, suppliers, franchisees and lenders to access sources of liquidity to provide for their own cash needs; competitive pressures from within the restaurant industry; the Company's ability to integrate and derive the expected benefits from its acquisition of Keke's Breakfast Cafe; the level of success of the Company’s operating initiatives and advertising and promotional efforts; adverse publicity; health concerns arising from food-related pandemics, outbreaks of flu viruses or other diseases; changes in business strategy or development plans; terms and availability of capital; regional weather conditions; overall changes in the general economy (including with regard to energy costs), particularly at the retail level; political environment and geopolitical events (including acts of war and terrorism); and other factors from time to time set forth in the Company’s SEC reports and other filings, including but not limited to the discussion in Management’s Discussion and Analysis and the risks identified in Item 1A. Risk Factors contained in the Company’s Annual Report on Form 10-K for the year ended December 28, 2022 (and in the Company’s subsequent Quarterly Reports on Form 10-Q and Current Reports on Form 8-K).


Investor Contact:
Curt Nichols
877-784-7167

Media Contact:
Hadas Streit, Allison+Partners
646-428-0629
4

DENNY’S CORPORATION
Consolidated Balance Sheets
(Unaudited)
($ in thousands) 6/28/23 12/28/22
Assets
Current assets
Cash and cash equivalents $ 1,130  $ 3,523 
Investments 3,075  1,746 
Receivables, net 18,469  25,576 
Inventories 2,534  5,538 
Assets held for sale 1,551  1,403 
Prepaid and other current assets 10,043  12,529 
Total current assets 36,802  50,315 
Property, net 91,407  94,469 
Finance lease right-of-use assets, net 6,239  6,499 
Operating lease right-of-use assets, net 120,136  126,065 
Goodwill 72,142  72,740 
Intangible assets, net 94,220  95,034 
Deferred financing costs, net 2,020  2,337 
Other noncurrent assets 42,659  50,876 
Total assets $ 465,625  $ 498,335 
Liabilities
Current liabilities
Current finance lease liabilities $ 1,449  $ 1,683 
Current operating lease liabilities 15,179  15,310 
Accounts payable 13,079  19,896 
Other current liabilities 56,968  56,762 
Total current liabilities 86,675  93,651 
Long-term liabilities    
Long-term debt 247,000  261,500 
Noncurrent finance lease liabilities 9,355  9,555 
Noncurrent operating lease liabilities 117,218  123,404 
Liability for insurance claims, less current portion 7,020  7,324 
Deferred income taxes, net 8,937  7,419 
Other noncurrent liabilities 32,038  32,598 
Total long-term liabilities 421,568  441,800 
Total liabilities 508,243  535,451 
Shareholders' deficit
Common stock 657  650 
Paid-in capital 144,506  142,136 
Deficit (32,594) (41,729)
Accumulated other comprehensive loss, net (40,321) (42,697)
Treasury stock (114,866) (95,476)
Total shareholders' deficit (42,618) (37,116)
Total liabilities and shareholders' deficit $ 465,625  $ 498,335 
Debt Balances
Credit facility revolver due 2026 $ 247,000  $ 261,500 
Finance lease liabilities 10,804  11,238 
Total debt $ 257,804  $ 272,738 
5

DENNY’S CORPORATION
Condensed Consolidated Statements of Operations
(Unaudited)
Quarter Ended
($ in thousands, except per share amounts) 6/28/23 6/29/22
Revenue:
Company restaurant sales $ 54,881  $ 49,167 
Franchise and license revenue 62,034  65,850 
Total operating revenue 116,915  115,017 
Costs of company restaurant sales, excluding depreciation and amortization 46,568  44,828 
Costs of franchise and license revenue, excluding depreciation and amortization 30,460  35,265 
General and administrative expenses 20,160  16,623 
Depreciation and amortization 3,617  3,590 
Operating (gains), losses and other charges, net 1,176  846 
Total operating costs and expenses, net 101,981  101,152 
Operating income 14,934  13,865 
Interest expense, net 4,402  2,878 
Other nonoperating income, net (666) (19,795)
Income before income taxes 11,198  30,782 
Provision for income taxes 2,660  7,779 
Net income $ 8,538  $ 23,003 
Net income per share - basic $ 0.15  $ 0.37 
Net income per share - diluted $ 0.15  $ 0.37 
Basic weighted average shares outstanding 56,787  62,306 
Diluted weighted average shares outstanding 57,051  62,430 
Comprehensive income $ 10,557  $ 25,411 
General and Administrative Expenses
Corporate administrative expenses $ 15,160  $ 13,162 
Share-based compensation 2,519  3,505 
Incentive compensation 1,899  1,639 
Deferred compensation valuation adjustments 582  (1,683)
Total general and administrative expenses $ 20,160  $ 16,623 

6

DENNY’S CORPORATION
Condensed Consolidated Statements of Operations
(Unaudited)
Two Quarters Ended
($ in thousands, except per share amounts) 6/28/23 6/29/22
Revenue:
Company restaurant sales $ 108,333  $ 93,143 
Franchise and license revenue 126,053  124,981 
Total operating revenue 234,386  218,124 
Costs of company restaurant sales, excluding depreciation and amortization 93,060  83,453 
Costs of franchise and license revenue, excluding depreciation and amortization 62,847  65,934 
General and administrative expenses 40,278  33,581 
Depreciation and amortization 7,273  7,138 
Operating (gains), losses and other charges, net (153) 846 
Total operating costs and expenses, net 203,305  190,952 
Operating income 31,081  27,172 
Interest expense, net 8,907  5,838 
Other nonoperating expense (income), net 9,427  (39,410)
Income before income taxes 12,747  60,744 
Provision for income taxes 3,612  15,886 
Net income $ 9,135  $ 44,858 
Net income per share - basic $ 0.16  $ 0.71 
Net income per share - diluted $ 0.16  $ 0.71 
Basic weighted average shares outstanding 57,212  62,822 
Diluted weighted average shares outstanding 57,423  63,003 
Comprehensive income $ 11,511  $ 53,047 
General and Administrative Expenses
Corporate administrative expenses $ 29,339  $ 24,545 
Share-based compensation 5,613  7,520 
Incentive compensation 4,286  3,758 
Deferred compensation valuation adjustments 1,040  (2,242)
Total general and administrative expenses $ 40,278  $ 33,581 
7

DENNY’S CORPORATION
Reconciliation of Net Income and Net Cash Provided by Operating Activities to Non-GAAP Financial Measures
(Unaudited)

The Company believes that, in addition to GAAP measures, certain non-GAAP financial measures are appropriate indicators to assist in the evaluation of operating performance and liquidity on a period-to-period basis. The Company uses Adjusted EBITDA, Adjusted Free Cash Flow, Adjusted Net Income and Adjusted Net Income Per Share internally as performance measures for planning purposes, including the preparation of annual operating budgets, and for compensation purposes, including incentive compensation for certain employees. Adjusted EBITDA is also used in the calculation of financial covenant ratios in accordance with the Company’s credit facility. Adjusted Free Cash Flow is also used as a non-GAAP liquidity measure by Management to assess the Company’s ability to generate cash and plan for future operating and capital actions. Management believes that the presentation of Adjusted EBITDA, Adjusted Net Income, Adjusted Net Income Per Share and Adjusted Free Cash Flow provide useful information to investors and analysts about the Company’s operating results, financial condition or cash flows. However, each of these non-GAAP financial measures should be considered as a supplement to, not a substitute for, operating income, net income, net income per share, net cash provided by operating activities, or other financial performance and liquidity measures prepared in accordance with GAAP.
Quarter Ended Two Quarters Ended
($ in thousands) 6/28/23 6/29/22 6/28/23 6/29/22
Net income $ 8,538  $ 23,003  $ 9,135  $ 44,858 
Provision for income taxes 2,660  7,779  3,612  15,886 
Operating (gains), losses and other charges, net
 1,176  846  (153) 846 
Other nonoperating expense (income), net (666) (19,795) 9,427  (39,410)
Share-based compensation expense 2,519  3,505  5,613  7,520 
Deferred compensation plan valuation adjustments 582  (1,683) 1,040  (2,242)
Interest expense, net 4,402  2,878  8,907  5,838 
Depreciation and amortization 3,617  3,590  7,273  7,138 
Cash payments for restructuring charges and exit costs
 (408) (208) (998) (381)
Cash payments for share-based compensation
 (159) (2,693) (3,122) (5,147)
Adjusted EBITDA $ 22,261  $ 17,222  $ 40,734  $ 34,906 



























8

DENNY’S CORPORATION
Reconciliation of Net Income and Net Cash Provided by Operating Activities
to Non-GAAP Financial Measures (Continued)
(Unaudited)
Quarter Ended Two Quarters Ended
($ in thousands) 6/28/23 6/29/22 6/28/23 6/29/22
Net cash provided by operating activities $ 19,498  $ 16,673  $ 35,651  $ 9,609 
Capital expenditures (2,003) (2,993) (3,307) (5,771)
Cash payments for restructuring charges and exit costs (408) (208) (998) (381)
Cash payments for share-based compensation (159) (2,693) (3,122) (5,147)
Deferred compensation plan valuation adjustments 582  (1,683) 1,040  (2,242)
Other nonoperating expense (income), net (666) (19,795) 9,427  (39,410)
Gains (losses) on investments 24  (158) 29  (223)
Losses on early termination of debt and leases —  —  —  (24)
Amortization of deferred financing costs (158) (159) (317) (317)
Gains (losses) and amortization on interest rate swap derivatives, net (82) 21,671  (10,744) 41,924 
Interest expense, net 4,402  2,878  8,907  5,838 
Cash interest expense, net (1)
 (4,161) (3,449) (8,264) (7,175)
Deferred income tax expense (577) (6,330) (710) (10,766)
Provision for income taxes 2,660  7,779  3,612  15,886 
Income taxes paid, net (3,421) (4,195) (3,910) (4,644)
Changes in operating assets and liabilities, excluding acquisitions and dispositions
Receivables (4,946) (148) (6,760) 3,419 
Inventories (720) 2,380  (3,004) 7,148 
Other current assets 164  (112) (2,488) (3,563)
Other noncurrent assets 872  (2,040) (247) (6,125)
Operating lease assets and liabilities 113  222  359  466 
Accounts payable 6,623  (864) 7,754  1,541 
Other accrued liabilities (4,888) (3,902) 1,646  11,062 
Other noncurrent liabilities (73) 3,711  699  6,211 
Adjusted Free Cash Flow $ 12,676  $ 6,585  $ 25,253  $ 17,316 
(1) Includes cash interest income, net and cash receipts of approximately $0.2 million for dedesignated interest rate swap derivatives for the year-to-date period ended June 28, 2023. Includes cash interest expense, net and cash payments of approximately $0.7 and $1.7 million for dedesignated interest rate swap derivatives for the quarter and year-to-date period ended June 29, 2022, respectively.










9

DENNY’S CORPORATION
Reconciliation of Net Income and Net Cash Provided by Operating Activities
to Non-GAAP Financial Measures (Continued)
(Unaudited)
Quarter Ended Two Quarters Ended
($ in thousands, except per share amounts) 6/28/23 6/29/22 6/28/23 6/29/22
Adjusted EBITDA $ 22,261  $ 17,222  $ 40,734  $ 34,906 
Cash interest expense, net (1)
 (4,161) (3,449) (8,264) (7,175)
Cash paid for income taxes, net (3,421) (4,195) (3,910) (4,644)
Cash paid for capital expenditures (2,003) (2,993) (3,307) (5,771)
Adjusted Free Cash Flow $ 12,676  $ 6,585  $ 25,253  $ 17,316 
Net income $ 8,538  $ 23,003  $ 9,135  $ 44,858 
(Gains) losses and amortization on interest rate swap derivatives, net 82  (21,671) 10,744  (41,924)
Gains on sales of assets and other charges, net (522) (99) (2,044) (245)
Impairment charges —  266  129  266 
Tax effect (2)
 132  5,451  (2,278) 10,979 
Adjusted Net Income $ 8,230  $ 6,950  $ 15,686  $ 13,934 
Diluted weighted average shares outstanding 57,051  62,430  57,423  63,003 
Net Income Per Share - Diluted $ 0.15  $ 0.37  $ 0.16  $ 0.71 
Adjustments Per Share (0.01) (0.26) 0.11  (0.49)
Adjusted Net Income Per Share $ 0.14  $ 0.11  $ 0.27  $ 0.22 
(1) Includes cash interest income, net and cash receipts of approximately $0.2 million for dedesignated interest rate swap derivatives for the year-to-date period ended June 28, 2023. Includes cash interest expense, net and cash payments of approximately $0.7 million and $1.7 million for dedesignated interest rate swap derivatives for the quarter and year-to-date period ended June 29, 2022, respectively.
(2) Tax adjustments for the quarter and year-to-date period ended June 28, 2023 reflect effective tax rates of 30.0% and 25.8%, respectively. Tax adjustments for the quarter and year-to-date period ended June 29, 2022 reflect effective tax rates of 25.3% and 26.2%, respectively.





















10

DENNY’S CORPORATION
Reconciliation of Operating Income to Non-GAAP Financial Measures
(Unaudited)

The Company believes that, in addition to GAAP measures, certain other non-GAAP financial measures are appropriate indicators to assist in the evaluation of restaurant-level operating efficiency and performance of ongoing restaurant-level operations. The Company uses Restaurant-level Operating Margin, Company Restaurant Operating Margin and Franchise Operating Margin internally as performance measures for planning purposes, including the preparation of annual operating budgets, and these three non-GAAP measures are used to evaluate operating effectiveness.

The Company defines Restaurant-level Operating Margin as operating income excluding the following three items: general and administrative expenses, depreciation and amortization, and operating (gains), losses and other charges, net. Restaurant-level Operating Margin is presented as a percent of total operating revenue. The Company excludes general and administrative expenses, which include primarily non-restaurant-level costs associated with support of company and franchised restaurants and other activities at their corporate office. The Company excludes depreciation and amortization expense, substantially all of which is related to company restaurant-level assets, because such expenses represent historical sunk costs which do not reflect current cash outlays for the restaurants. The Company excludes special items, included within operating (gains), losses and other charges, net, to provide investors with a clearer perspective of its ongoing operating performance and a more relevant comparison to prior period results.

Restaurant-level Operating Margin is the total of Company Restaurant Operating Margin and Franchise Operating Margin. The Company defines Company Restaurant Operating Margin as company restaurant sales less costs of company restaurant sales (which include product costs, company restaurant level payroll and benefits, occupancy costs, and other operating costs including utilities, repairs and maintenance, marketing and other expenses) and presents it as a percent of company restaurant sales. The Company defines Franchise Operating Margin as franchise and license revenue (which includes franchise royalties and other non-food and beverage revenue streams such as initial franchise and other fees, advertising revenue and occupancy revenue) less costs of franchise and license revenue and presents it as a percent of franchise and license revenue.

These non-GAAP financial measures provide a meaningful comparison between periods and enable investors to focus on the performance of restaurant-level operations by excluding revenues and costs unrelated to food and beverage sales in addition to corporate general and administrative expense, depreciation and amortization, and operating (gains), losses and other charges, net. However, each of these non-GAAP financial measures should be considered as a supplement to, not a substitute for, operating income, net income or other financial performance measures prepared in accordance with GAAP. Restaurant-level Operating Margin, Company Restaurant Operating Margin and Franchise Operating Margin do not accrue directly to the benefit of shareholders because of the aforementioned excluded items and are not indicative of the overall results for the Company.

Quarter Ended Two Quarters Ended
($ in thousands) 6/28/23 6/29/22 6/28/23 6/29/22
Operating income $ 14,934  $ 13,865  $ 31,081  $ 27,172 
General and administrative expenses 20,160  16,623  40,278  33,581 
Depreciation and amortization 3,617  3,590  7,273  7,138 
Operating (gains), losses and other charges, net 1,176  846  (153) 846 
  Restaurant-level Operating Margin $ 39,887  $ 34,924  $ 78,479  $ 68,737 
Restaurant-level Operating Margin consists of:
 Company Restaurant Operating Margin (1)
 $ 8,313  $ 4,339  $ 15,273  $ 9,690 
 Franchise Operating Margin (2)
 31,574  30,585  63,206  59,047 
  Restaurant-level Operating Margin $ 39,887  $ 34,924  $ 78,479  $ 68,737 
(1) Company Restaurant Operating Margin is calculated as operating income plus general and administrative expenses; depreciation and amortization; operating (gains), losses and other charges, net; and costs of franchise and license revenue, excluding depreciation and amortization; less franchise and license revenue.
(2) Franchise Operating Margin is calculated as operating income plus general and administrative expenses; depreciation and amortization; operating (gains), losses and other charges, net; and costs of company restaurant sales, excluding depreciation and amortization; less company restaurant sales.
11

DENNY’S CORPORATION
Operating Margins
(Unaudited)
Quarter Ended
($ in thousands) 6/28/23 6/29/22
Company restaurant operations: (1)
Company restaurant sales $ 54,881  100.0  % $ 49,167  100.0  %
Costs of company restaurant sales, excluding depreciation and amortization:
Product costs 14,170  25.8  % 13,168  26.8  %
Payroll and benefits 20,488  37.3  % 18,336  37.3  %
Occupancy 4,105  7.5  % 3,782  7.7  %
Other operating costs:
Utilities 1,860  3.4  % 1,650  3.4  %
Repairs and maintenance 782  1.4  % 889  1.8  %
Marketing 1,419  2.6  % 1,330  2.7  %
Legal settlements 121  0.2  % 2,379  4.8  %
Other direct costs 3,623  6.6  % 3,294  6.7  %
Total costs of company restaurant sales, excluding depreciation and amortization $ 46,568  84.9  % $ 44,828  91.2  %
Company restaurant operating margin (non-GAAP) (2)
 $ 8,313  15.1  % $ 4,339  8.8  %
Franchise operations: (3)
Franchise and license revenue:
Royalties $ 30,376  49.0  % $ 28,759  43.7  %
Advertising revenue 19,853  32.0  % 19,486  29.6  %
Initial and other fees 2,616  4.2  % 7,779  11.8  %
Occupancy revenue 9,189  14.8  % 9,826  14.9  %
Total franchise and license revenue $ 62,034  100.0  % $ 65,850  100.0  %
Costs of franchise and license revenue, excluding depreciation and amortization:
Advertising costs $ 19,853  32.0  % $ 19,486  29.6  %
Occupancy costs 5,792  9.3  % 6,064  9.2  %
Other direct costs 4,815  7.8  % 9,715  14.8  %
Total costs of franchise and license revenue, excluding depreciation and amortization $ 30,460  49.1  % $ 35,265  53.6  %
Franchise operating margin (non-GAAP) (2)
 $ 31,574  50.9  % $ 30,585  46.4  %
Total operating revenue (4)
 $ 116,915  100.0  % $ 115,017  100.0  %
Total costs of operating revenue (4)
 77,028  65.9  % 80,093  69.6  %
Restaurant-level operating margin (non-GAAP) (4)(2)
 $ 39,887  34.1  % $ 34,924  30.4  %
Other operating expenses: (4)(2)
General and administrative expenses $ 20,160  17.2  % $ 16,623  14.5  %
Depreciation and amortization 3,617  3.1  % 3,590  3.1  %
Operating losses and other charges, net 1,176  1.0  % 846  0.7  %
Total other operating expenses $ 24,953  21.3  % $ 21,059  18.3  %
Operating income (4)
 $ 14,934  12.8  % $ 13,865  12.1  %
(1) As a percentage of company restaurant sales.
(2) Other operating expenses such as general and administrative expenses and depreciation and amortization relate to both company and franchise operations and are not allocated to costs of company restaurant sales and costs of franchise and license revenue. As such, operating margin is considered a non-GAAP financial measure. Operating margins should be considered as a supplement to, not as a substitute for, operating income, net income or other financial measures prepared in accordance with GAAP.
(3) As a percentage of franchise and license revenue.
(4) As a percentage of total operating revenue.
12

DENNY’S CORPORATION
Operating Margins
(Unaudited)
Two Quarters Ended
($ in thousands) 6/28/23 6/29/22
Company restaurant operations: (1)
Company restaurant sales $ 108,333  100.0  % $ 93,143  100.0  %
Costs of company restaurant sales, excluding depreciation and amortization:
Product costs 28,209  26.0  % 24,412  26.2  %
Payroll and benefits 40,728  37.6  % 35,422  38.0  %
Occupancy 8,199  7.6  % 7,022  7.5  %
Other operating costs:
Utilities 3,917  3.6  % 3,227  3.5  %
Repairs and maintenance 1,671  1.5  % 1,714  1.8  %
Marketing 2,814  2.6  % 2,537  2.7  %
Legal settlements 230  0.2  % 2,656  2.9  %
Other direct costs 7,292  6.7  % 6,463  6.9  %
Total costs of company restaurant sales, excluding depreciation and amortization $ 93,060  85.9  % $ 83,453  89.6  %
Company restaurant operating margin (non-GAAP) (2)
 $ 15,273  14.1  % $ 9,690  10.4  %
Franchise operations: (3)
Franchise and license revenue:
Royalties $ 60,403  47.9  % $ 55,284  44.2  %
Advertising revenue 39,521  31.4  % 37,692  30.2  %
Initial and other fees 7,606  6.0  % 12,286  9.8  %
Occupancy revenue 18,523  14.7  % 19,719  15.8  %
Total franchise and license revenue $ 126,053  100.0  % $ 124,981  100.0  %
Costs of franchise and license revenue, excluding depreciation and amortization:
Advertising costs $ 39,521  31.4  % $ 37,692  30.2  %
Occupancy costs 11,464  9.1  % 12,441  10.0  %
Other direct costs 11,862  9.4  % 15,801  12.6  %
Total costs of franchise and license revenue, excluding depreciation and amortization $ 62,847  49.9  % $ 65,934  52.8  %
Franchise operating margin (non-GAAP) (2)
 $ 63,206  50.1  % $ 59,047  47.2  %
Total operating revenue (4)
 $ 234,386  100.0  % $ 218,124  100.0  %
Total costs of operating revenue (4)
 155,907  66.5  % 149,387  68.5  %
Restaurant-level operating margin (non-GAAP) (4)(2)
 $ 78,479  33.5  % $ 68,737  31.5  %
Other operating expenses: (4)(2)
General and administrative expenses $ 40,278  17.2  % $ 33,581  15.4  %
Depreciation and amortization 7,273  3.1  % 7,138  3.3  %
Operating (gains), losses and other charges, net (153) (0.1) % 846  0.4  %
Total other operating expenses $ 47,398  20.2  % $ 41,565  19.1  %
Operating income (4)
 $ 31,081  13.3  % $ 27,172  12.5  %
(1) As a percentage of company restaurant sales.
(2) Other operating expenses such as general and administrative expenses and depreciation and amortization relate to both company and franchise operations and are not allocated to costs of company restaurant sales and costs of franchise and license revenue. As such, operating margin is considered a non-GAAP financial measure. Operating margin should be considered as a supplement to, not as a substitute for, operating income, net income or other financial measures prepared in accordance with GAAP.
(3) As a percentage of franchise and license revenue.
(4) As a percentage of total operating revenue.
13

DENNY’S CORPORATION
Statistical Data
(Unaudited)
Denny's
Keke's (2)
Changes in Same-Restaurant Sales (1)
 Quarter Ended Two Quarters Ended Quarter Ended Two Quarters Ended
(Increase vs. prior year) 6/28/23 6/29/22 6/28/23 6/29/22 6/28/23 6/29/22 6/28/23 6/29/22
Company Restaurants 3.0% 3.8% 7.0% 14.9% N/A N/A N/A N/A
Domestic Franchise Restaurants 3.0% 2.4% 5.5% 11.2% N/A N/A N/A N/A
Domestic System-wide Restaurants 3.0% 2.5% 5.6% 11.5% N/A N/A N/A N/A
Average Unit Sales
($ in thousands)
Company Restaurants $786 $761 $1,548 $1,443 $459 N/A $ 925  N/A
Franchised Restaurants $466 $442 $918 $846 $476 N/A $ 967  N/A
(1) Same-restaurant sales include sales at company restaurants and non-consolidated franchised and licensed restaurants that were open during the comparable periods noted. Total operating revenue is limited to company restaurant sales and royalties, advertising revenue, initial and other fees and occupancy revenue from non-consolidated franchised and licensed restaurants. Accordingly, domestic franchise same-restaurant sales and domestic system-wide same-restaurant sales should be considered as a supplement to, not a substitute for, the Company's results as reported under GAAP.
Keke's comparable same-restaurant sales will not be reported for the first year following the acquisition.
(2)
Effective July 20, 2022, the Company acquired Keke's, as such the data represents post-acquisition results.

Restaurant Unit Activity Denny's
Keke's
Franchised Franchised
Company  & Licensed Total Company & Licensed Total
Ending Units March 29, 2023 66  1,528  1,594  8  46  54 
Units Opened —  9  9  —  1  1 
Units Closed —  (12) (12) —  —  — 
Net Change —  (3) (3) —  1  1 
Ending Units June 28, 2023 66  1,525  1,591  8  47  55 
Equivalent Units
Second Quarter 2023 65  1,525  1,590  8  47  55 
Second Quarter 2022 64  1,567  1,631  —  —  — 
Net Change 1  (42) (41) 8  47  55 
Denny's
Keke's
Franchised Franchised
Restaurant Unit Activity Company & Licensed Total Company & Licensed Total
Ending Units December 28, 2022 66 1,536 1,602 8 46 54
Units Opened — 14 14 — 1 1
Units Closed — (25) (25) — — —
Net Change — (11) (11) — 1 1
Ending Units June 28, 2023 66 1,525 1,591 8 47 55
Equivalent Units
Year-to-Date 2023 65 1,527 1,592 8 46 54
Year-to-Date 2022 64 1,570 1,634 — — —
Net Change 1 (43) (42) 8 46 54
14
EX-99.2 3 denninvestordeckaugust20.htm EX-99.2 denninvestordeckaugust20
D E N N Y ’ S C O R P O R AT I O N INVESTOR PRESENTATION A U G U S T T H R O U G H S E P T E M B E R 2 0 2 3

 
FORWARD-LOOKING STATEMENTS AND NON-GAAP FINANCIAL MEASURES The Company urges caution in considering its current trends and any outlook on earnings disclosed either in this presentation or in its press releases. In addition, certain matters discussed in either this presentation or related press releases may constitute forward- looking statements. These forward-looking statements, which reflect management's best judgment based on factors currently known, are intended to speak only as of the date such statements are made and involve risks, uncertainties, and other factors that may cause the actual performance of Denny’s Corporation, its subsidiaries, and underlying restaurants to be materially different from the performance indicated or implied by such statements. Words such as “expect”, “anticipate”, “believe”, “intend”, “plan”, “hope”, "will", and variations of such words and similar expressions are intended to identify such forward-looking statements. Except as may be required by law, the Company expressly disclaims any obligation to update these forward-looking statements to reflect events or circumstances after the date this presentation was published or to reflect the occurrence of unanticipated events. Factors that could cause actual performance to differ materially from the performance indicated by these forward-looking statements include, among others: economic, public health and political conditions that impact consumer confidence and spending; commodity and labor inflation; the ability to effectively staff restaurants; the Company's ability to maintain adequate levels of liquidity for its cash needs, including debt obligations, payment of dividends, planned share repurchases and capital expenditures as well as the ability of its customers, suppliers, franchisees and lenders to access sources of liquidity to provide for their own cash needs; competitive pressures from within the restaurant industry; the Company's ability to integrate and derive the expected benefits from its acquisition of Keke's Breakfast Cafe; the level of success of the Company’s operating initiatives and advertising and promotional efforts; adverse publicity; health concerns arising from food-related pandemics, outbreaks of flu viruses or other diseases; changes in business strategy or development plans; terms and availability of capital; regional weather conditions; overall changes in the general economy (including with regard to energy costs), particularly at the retail level; political environment and geopolitical events (including acts of war and terrorism); and other factors from time to time set forth in the Company’s SEC reports and other filings, including but not limited to the discussion in Management’s Discussion and Analysis and the risks identified in Item 1A. Risk Factors contained in the Company’s Annual Report on Form 10-K for the year ended December 28, 2022 (and in the Company’s subsequent Quarterly Reports on Form 10-Q and Current Reports on Form 8-K). The presentation includes references to the Company’s non-GAAP financials measures. All such measures are designated by an asterisk (*). The Company believes that, in addition to U.S. generally accepted accounting principles (GAAP) measures, certain non-GAAP financial measures are appropriate indicators to assist in the evaluation of operating performance and liquidity on a period-to-period basis. The Company uses Adjusted EBITDA, Adjusted Free Cash Flow, Adjusted Net Income and Adjusted Net Income Per Share internally as performance measures for planning purposes, including the preparation of annual operating budgets, and for compensation purposes, including incentive compensation for certain employees. Adjusted EBITDA is also used in the calculation of financial covenant ratios in accordance with the Company’s credit facility. Adjusted Free Cash Flow is also used as a non-GAAP liquidity measure by Management to assess the Company’s ability to generate cash and plan for future operating and capital actions. Management believes that the presentation of Adjusted EBITDA, Adjusted Net Income, Adjusted Net Income Per Share and Adjusted Free Cash Flow provide useful information to investors and analysts about the Company’s operating results, financial condition or cash flows. However, each of these non-GAAP financial measures should be considered as a supplement to, not a substitute for, operating income, net income, net income per share, net cash provided by (used in) operating activities, or other financial performance and liquidity measures prepared in accordance with U.S. generally accepted accounting principles. See Appendix for non-GAAP reconciliations to the following GAAP measures: $ Millions (except per share amounts) 2018 2019 2020 2021 2022 YTD Jun 2023 Operating Income $73.6 $165.0 $6.7 $104.1 $60.6 $31.1 Net Income (Loss) $43.7 $117.4 ($5.1) $78.1 $74.7 $9.1 Net Income (Loss) per Share $0.67 $1.90 ($0.08) $1.19 $1.23 $0.16 Cash Provided By (Used In): Operating Activities $73.7 $43.3 ($3.1) $76.2 $39.5 $35.7 Investing Activities ($32.0) $105.0 $4.7 $29.0 ($86.6) ($1.2) Financing Activities ($41.6) ($150.0) ($1.0) ($78.5) $20.0 ($36.9) 2

 
Q2 2023 HIGHLIGHTS 𝟏 Same-restaurant sales include sales at company restaurants and non-consolidated franchised and licensed restaurants that were open during the comparable periods noted. Total operating revenue is limited to company restaurant sales and royalties, advertising revenue, initial and other fees and occupancy revenue from non- consolidated franchised and licensed restaurants. Accordingly, domestic franchise same-restaurant sales and domestic system-wide same-restaurant sales should be considered as a supplement to, not a substitute for, the Company’s results as reported under GAAP. * See Appendix for reconciliation of Net Income (Loss) and Net Cash Provided by Operating Activities to Non-GAAP Financial Measures, as well as the reconciliation of Operating Income (Loss) to Non-GAAP Financial Measures. 3 $116.9M Total Operating Revenue Denny’s Domestic System-Wide Same-Restaurant Sales 1 $22.3M 29.3% Increase vs Prior Year Quarter Adjusted EBITDA* Portfolio Share RepurchasesAdjusted Free Cash Flow* $12.7M 92.5% Increase vs Prior Year Quarter $10.4M Total Debt to Adjusted EBITDA* Leverage Ratio 3.1x % of Denny’s Domestic Units Operating at Least 18 Hours Per Day 93% At End of Quarter 3.0% Versus 2022 Nine New Openings Including Four International Openings One New Opening

 
DENNY’S INC.

 
D E N N Y ’ S D O M E S T I C A V E R A G E W E E K LY S A L E S 3 & S A M E - R E S TA U R A N T S A L E S 1 $4.0 $3.8 $4.1 $4.2 $8.4 $8.0 $7.9 $8.8 $8.1 $7.0 $7.2 $7.0 $6.5 $6.1 $6.5 $6.5 $6.2 $0.4 $1.1 $1.0 $1.0 $0.9 $0.9 $0.9 $1.1 $1.1 $1.0 $30.1 $29.7 $30.0 $26.5 $6.4 $14.4 $15.4 $17.3 $25.3 $26.2 $27.0 $25.2 $28.3 $28.1 $28.9 $29.1 $30.3 $34.0 $33.6 $34.1 $30.8 $14.9 $22.4 $23.3 $26.6 $34.5 $34.3 $35.2 $33.1 $35.7 $35.1 $36.5 $36.7 $37.5 4% 1% 2% -6% -57% -34% -33% -20% -1% 0% 1% -2% 2% 2% 3% 8% 3% -70% -50% -30% -10% 10% 30% $0.0 $5.0 $10.0 $15.0 $20.0 $25.0 $30.0 $35.0 $40.0 Q2 '19 Q3 '19 Q4 '19 Q1 '20 Q2 '20 Q3 '20 Q4 '20 Q1 '21 Q2 '21 Q3 '21 Q4 '21 Q1 '22 Q2 '22 Q3 '22 Q4 '22 Q1 '23 Q2 '23 D om es tic S ys te m -W id e S am e- R es ta ur an t S al es 1 A ve ra ge W ee kl y S al es ( $0 00 s) 3 Denny's Off-Premise Sales Virtual Brands Off-Premise Sales Denny's On-Premise Sales Denny's Total Sales Denny's Domestic System-Wide Same-Restaurant Sales 𝟏 Same-restaurant sales include sales at company restaurants and non-consolidated franchised and licensed restaurants that were open during the comparable periods noted. Total operating revenue is limited to company restaurant sales and royalties, advertising revenue, initial and other fees and occupancy revenue from non-consolidated franchised and licensed restaurants. Accordingly, domestic franchise same-restaurant sales and domestic system-wide same-restaurant sales should be considered as a supplement to, not a substitute for, the Company’s results as reported under GAAP. 𝟐 2021 and 2022 Denny’s domestic system-wide same-restaurant sales 1 are versus 2019. 𝟑 Domestic average weekly sales reflect sales for company and franchised restaurants on Denny’s proprietary point of sale (POS) system. Denny’s Q2 ‘23 Domestic Average Weekly Sales Outperformed Q2 ‘22 by 4.9% 2 5

 
DENNY’S OFF-PREMISE SALES 47% 46% 44% 42% 43% 44% 42% 41% 43% 50% 52% 53% 56% 55% 54% 56% 57% 56% 3% 3% 2% 2% 2% 2% 1% 1% 1% 0% 20% 40% 60% 80% 100% Q2 2021 Q3 2021 Q4 2021 Q1 2022 Q2 2022 Q3 2022 Q4 2022 Q1 2023 Q2 2023 Domestic Off-Premise Sales By Channel Delivery - Online Dispatch Delivery - 3rd Party (Includes Virtual Brands) Carry Out 𝟏 Data for the Fiscal Second Quarter 2023. The Bu r ger Den i s cu r ren t l y a c t i ve i n o v er 1 , 190 domes t i c l o ca t ions . The Me l t down i s cu r r en t l y a c t i ve i n o v e r 990 domes t i c l o c a t ions . 67% 48% 24% 34%33% 52% 76% 66% 0% 20% 40% 60% 80% Dine In Off-Premise The Burger Den The Meltdown Sales Mix by Daypart1 Breakfast & Lunch Dinner & Late-Night 59% 62% 68% 69% 41% 38% 32% 31% 0% 20% 40% 60% 80% Dine In Off-Premise The Burger Den The Meltdown Sales Mix Weekday vs. Weekend1 Weekday Weekend Off-Premise Sales Over-Index At the Dinner & Late-Night Dayparts, Which Are More Popular With Younger Generations and More Diverse Guests. 6

 
7𝟏 Data through Fiscal June ended June 28, 2023. Total of 1,426 Restaurants in the U.S. with Strongest Presence in California, Texas, Florida, and Arizona 1 Top 10 U .S . Mar ke t s 1 DMA Number of Restaurants Los Angeles 172 Houston 66 Phoenix 66 Dallas/Ft. Worth 53 Sacramento/Stockton 45 Orlando/Daytona 40 San Francisco/Oakland 40 San Diego 38 Miami/Ft. Lauderdale 34 Las Vegas 33 % of Domestic System 41% DENNY’S DOMESTIC FOOTPRINT 3 24 2 6 6 5 1 6

 
8 I n t e rna t i ona l Foo tp r i n t 1 Country Number of Restaurants United States 1,426 Canada 86 Puerto Rico 15 Mexico 15 Philippines 15 New Zealand 7 Honduras 6 United Arab Emirates 5 Guatemala 4 Costa Rica 3 El Salvador 3 Guam 2 Indonesia 2 Curaçao 1 United Kingdom 1 Total System 1,591 International Presence of 165 Restaurants in 14 Countries and U.S. Territories Grown by ~90% Since Year End 2010 1 𝟏 Data through Fiscal June ended June 28, 2023. DENNY’S INTERNATIONAL FOOTPRINT

 
9 Well Diversified, Experienced, and Energetic Group of 212 Franchisees 1 • 35 franchisees with more than 10 restaurants each collectively comprise approximately 66% of the franchise system. • Approximately 20% of our franchisees operate multiple concepts1 providing a well-rounded perspective within the industry. Ownership o f 1 ,525 Franchisee Res taurants 1 Number of Franchised Units Number of Franchisees Franchisees as % of Total Total Franchised Units Franchised Units as % of Total 1 78 37% 78 5% 2–5 72 34% 222 15% 6–10 27 13% 211 14% 11–15 15 7% 193 13% 16–30 8 4% 170 11% >30 12 6% 651 43% Total 212 100% 1,525 100% 𝟏 Data through Fiscal June ended June 28, 2023. DENNY'S STRONG PARTNERSHIP WITH FRANCHISEES

 
KEKE’S

 
KEKE’S FOOTPRINT AND PERFORMANCE 11 63 3 3 1 Total of 55 Restaurants Across Florida with Heavy Concentrations in the Orlando and Tampa Areas1 𝟏 Data through Fiscal June ended June 28, 2023. 𝟐 Keke’s data is annualized based on the reported Average Unit Volumes following acquisition. Ownership of 47 Franchisee Restaurants 1 Number of Franchised Units Number of Franchisees Franchisees as % of Total Total Franchised Units Franchised Units as % of Total 1 8 44% 8 17% 2–5 8 44% 24 51% 6–10 2 11% 15 32% Total 18 100% 47 100% 8 Company and 47 Franchised Restaurants $1.7 $1.2 $1.6 $1.8 $1.6 $1.2 $1.9 $1.8 $0.0 $1.0 $2.0 $3.0 2019 2020 2021 2022 $M s System Restaurant AUVs Comparison Denny's Keke's 22 17 2

 
DENNY’S CORPORATION

 
HISTORY OF CONSISTENTLY RETURNING CAPITAL TO SHAREHOLDERS $50 $25 $25 $3.9 $21.6 $22.2 $24.7 $36.0 $105.8 $58.7 $82.9 $67.9 $96.2 $34.2 $30.6 $64.9 $19.4 Q4 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 ASR Total Share Repurchases In $ Millions• During Q2 2023, we allocated approximately $10.4 million to share repurchases. • Since late 20101, we have repurchased over 64 million shares at an average of $10.45 per share resulting in a 44% net reduction in our share count. • Approximately $133 million remaining under existing repurchase authorization2. 𝟏 Data from November 2010 through Fiscal June ended June 28, 2023. 𝟐 Data through Fiscal June ended June 28, 2023. Average Price of $10.45 Multi-year share repurchase program suspended from February 2020 through August 2021 Over $669 Million Allocated Towards Share Repurchases Since We Started Returning Capital to Shareholders in late 2010 1 2 13

 
SOLID BALANCE SHEET WITH FLEXIBILITY $240.2 $198.1 $170.0 $153.0 $140.0 $195.0 $218.5 $259.0 $286.5 $240.0 $210.0 $170.0 $261.5 $247.0 $23.1 $22.5 $20.1 $20.1 $18.8 $20.7 $27.1 $30.2 $30.6 $16.5 $15.4 $12.7 $11.2 $10.8 3.5x 2.7x 2.4x 2.2x 1.9x 2.5x 2.5x 2.8x 3.0x 2.7x 2.1x 3.4x 3.1x 0.0x 0.5x 1.0x 1.5x 2.0x 2.5x 3.0x 3.5x 4.0x 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 Q2 2023 $0.0 $100.0 $200.0 $300.0 $400.0 $500.0 $600.0 To ta l D eb t ($ M ill io ns ) Finance Leases Credit Facility Total Debt / Adjusted EBITDA* 2 Disciplined Focus on Debt Leverage with Financial Flexibility to Make Brand Investments & Return Capital to Shareholders Target Total Debt / Adjusted EBITDA* Leverage Ratio Range of 2.5x to 3.5x 1 Total Debt / Adjusted EBITDA* leverage ratio was waived starting in Q2 ’20 through Q1 ‘21. 2 Increased borrowings under the credit facility in 2022 are primarily due to the Keke’s acquisition. * See Appendix for reconciliation of Net Income (Loss) and Net Cash Provided by Operating Activities to Non-GAAP Financial Measures, as well as the reconciliation of Operating Income (Loss) to Non-GAAP Financial Measures 14 Debt amendments provided temporary covenant relief 1

 
STRATEGIC PRIORITES C • Create leading edge solutions with technology & innovation R • Robust new Restaurant growth as the franchisor of choice A • Assemble best in class people and teams through culture, tools & systems V • Validate & optimize the business model to maximize restaurant margins E • Elevate profitable traffic through the guest experience & uniquely craveable food 15

 
APPENDIX

 
17 $1.8 $1.9 $2.0 $2.1 $2.2 $2.3 $2.3 $2.3 $2.5 $1.8 $2.7 $3.0 $0.0 $1.0 $2.0 $3.0 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 $M s Denny’s Company Restaurant AUVs $1.4 $1.4 $1.4 $1.5 $1.6 $1.6 $1.6 $1.6 $1.7 $1.2 $1.6 $1.7 $0.0 $1.0 $2.0 $3.0 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 $M s Denny’s Franchised Restaurant AUVs History of Steady Growth in Franchised and Company Average Unit Volumes Refranchising Strategy Benefited AUVs at Both Franchised and Company Restaurants in 2019 DENNY’S FRANCHISED AND COMPANY RESTAURANT SALES

 
18 Approximately $500 Million in Adjusted Free Cash Flow* Generated Over Last 12 Fiscal Years Adjusted Free Cash Flow* Impacted by ~$21 Million of Real Estate Acquisitions Between 2019 and 2021 ¹ Includes cash interest expense, net and cash payments of approximately $1.9 million, $3.3 million, and $1.8 million for dedesignated interest rate swap derivatives for full year 2020, 2021, and 2022, respectively. * See Appendix for reconciliation of Net Income (Loss) and Net Cash Provided by Operating Activities to Non-GAAP Financial Measures, as well as the reconciliation of Operating Income (Loss) to Non-GAAP Financial Measures. ~$11 ~$10 $17 $12 $9 $8 $8 $11 $15 $20 $18 $18 $17 $15 $1 $2 $3 $4 $5 $3 $6 $3 $24 $0 $10 $9 $16 $16 $21 $22 $33 $34 $31 $32 $25 $18 $13 $82 $79 $78 $83 $89 $100 $103 $105 $97 $27 $86 $78 $48 $49 $45 $49 $42 $52 $51 $50 $30 $2 $41 $41 $0 $20 $40 $60 $80 $100 $120 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 $ M ill io ns Real Estate Acquisitions Cash Interest Cash Taxes Cash Capital Adjusted EBITDA* Adjusted Free Cash Flow* Cash capital expenditures include real estate acquisitions through like- kind exchange transactions 1 ADJUSTED FREE CASH FLOW*

 
19 Michael L. Furlow, Executive Vice President, Chief Information Officer. Prior to joining Denny’s in 2017, served as Chief Information Officer and Senior Vice President of IT at Red Robin Gourmet Burgers and CEC Entertainment, Inc. (an operator and franchisor of Chuck E. Cheese’s and Peter Piper Pizza). Jay C. Gilmore, Senior Vice President, Chief Accounting Officer and Corporate Controller. Joined Denny’s in 1999 as Director of Accounting and Assistant Corporate Controller and was named Senior Vice President, Chief Accounting Officer and Corporate Controller in 2021. Prior experience includes serving as a Senior Manager with KPMG LLP. John W. Dillon, President of Denny’s. Prior to joining Denny’s in 2007, held multiple marketing leadership positions with various organizations, including 10 years with YUM! Brands/Pizza Hut and was Vice President of Marketing for the National Basketball Association’s Houston Rockets. Robert P. Verostek, Executive Vice President, Chief Financial Officer. Joined Denny’s in 1999 and served in numerous leadership positions across the Finance and Accounting teams. Named Vice President of Financial Planning and Analysis in 2012 and Chief Financial Officer is 2020. Prior experience includes various accounting roles for Insignia Financial Group. Kelli A. Valade, Chief Executive Officer. Prior to joining Denny's in June 2022, served as CEO of Red Lobster, CEO of Black Box Intelligence, and held various management positions at Chili’s including Brand President, Chief Operating Officer and Senior Vice President of Human Resources. Gail S. Myers, Executive Vice President, Chief Legal Officer, Chief People Officer and Secretary. Prior to joining Denny’s in 2020, served as Executive Vice President, General Counsel, Secretary and Chief Compliance Officer for American Tire Distributors, Inc., Senior Vice President, Deputy General Counsel and Chief Compliance Counsel at U.S. Foods and Senior Vice President, General Counsel and Secretary at Snyder's-Lance, Inc. David P. Schmidt, President of Keke’s Breakfast Café. Prior to joining Keke’s in September 2022, served as CFO of Red Lobster and worked for Bloomin’ Brands where he held various leadership roles throughout his tenure including Group Vice President and CFO of Bloomin’ Brand’s Casual Dining. Stephen C. Dunn, Executive Vice President, Chief Global Development Officer. Prior to joining Denny’s in 2004, held executive-level positions with Church's Chicken, El Pollo Loco, Mr. Gatti's, and TCBY. Earned the distinction of Certified Franchise Executive by the International Franchise Association Educational Foundation. Served as an Infantry Officer in the United States Army. EXPERIENCED AND COMMITTED LEADERSHIP TEAM

 
20 1 Includes 53 operating weeks. $ Millions 2018 2019 20201 2021 2022 YTD Jun 2023 Net Income (Loss) $43.7 $117.4 ($5.1) $78.1 $74.7 $9.1 Provision for (Benefit from) Income Taxes 8.6 31.8 (2.0) 26.0 24.7 3.6 Operating (Gains) Losses and Other Charges, Net 2.6 (91.2) 1.8 (46.1) (1.0) (0.2) Other Nonoperating Expense (Income), Net 0.6 (2.8) (4.2) (15.2) (52.6) 9.4 Share‐Based Compensation Expense 6.0 6.7 7.9 13.6 11.4 5.6 Deferred Compensation Plan Valuation Adjustments (1.0) 2.6 1.6 2.1 (2.2) 1.0 Interest Expense, Net 20.7 18.5 18.0 15.1 13.8 8.9 Depreciation and Amortization 27.0 19.8 16.2 15.4 14.9 7.3 Cash Payments for Restructuring Charges and Exit Costs (1.1) (2.6) (3.0) (1.8) (1.1) (1.0) Cash Payments for Share‐Based Compensation (1.9) (3.6) (4.6) (1.8) (5.1) (3.1) Adjusted EBITDA $105.3 $96.8 $26.6 $85.6 $77.5 $40.7 Adjusted EBITDA Margin % 16.7% 17.9% 9.2% 21.5% 17.0% 17.4% RECONCILIATION OF NET INCOME (LOSS) TO NON-GAAP FINANCIAL MEASURES

 
21 $ Millions 2018 2019 20201 2021 2022 YTD Jun 2023 Net Cash Provided By (Used In) Operating Activities $73.7 $43.3 ($3.1) $76.2 $39.5 $35.7 Capital Expenditures (22.0) (14.0) (7.0) (7.4) (11.8) (3.3) Acquisition of Restaurants and Real Estate2 (10.4) (11.3) - (10.4) (0.8) - Cash Payments for Restructuring Charges and Exit Costs (1.1) (2.6) (3.0) (1.8) (1.1) (1.0) Cash Payments for Share‐Based Compensation (1.9) (3.6) (4.6) (1.8) (5.1) (3.1) Deferred Compensation Plan Valuation Adjustments3 (1.0) 2.6 1.6 2.1 (2.2) 1.0 Other Nonoperating Expense (Income), Net 0.6 (2.8) (4.2) (15.2) (52.6) 9.4 Gains (Losses) on Investments 0.0 0.2 0.1 (0.0) (0.3) 0.0 Gains (Losses) on Early Termination of Debt and Leases 0.2 0.0 (0.2) 0.5 0.0 - Amortization of Deferred Financing Costs (0.6) (0.6) (0.9) (1.1) (0.6) (0.3) Gains (Losses) and Amortization on Interest Rate Swap Derivatives, Net - - 2.2 12.6 55.0 (10.7) Interest Expense, Net 20.7 18.5 18.0 15.1 13.8 8.9 Cash Interest Expense, Net3 (19.6) (17.6) (18.0) (17.2) (14.9) (8.3) Deferred Income Tax Expense (6.2) (16.0) (4.0) (14.1) (14.7) (0.7) Decrease (Increase) in Tax Valuation Allowance (0.1) 2.9 3.0 5.0 (0.5) - Provision for (Benefit from) Income Taxes 8.6 31.8 (2.0) 26.0 24.7 3.6 Income Taxes Paid, Net (3.3) (24.1) (0.0) (9.9) (9.3) (3.9) Changes in Operating Assets and Liabilities Receivables 4.7 2.0 (6.4) (1.4) 5.9 (6.8) Inventories (0.1) (1.7) (0.1) 3.9 0.5 (3.0) Other Current assets (0.9) 4.1 3.9 (7.5) 1.1 (2.5) Other Noncurrent Assets (0.0) 4.6 1.8 1.9 2.1 (0.2) Operating Lease Assets and Liabilities - 0.6 (0.8) 1.5 0.7 0.4 Accounts Payable 5.1 5.2 10.7 (6.6) (3.9) 7.8 Other Accrued Liabilities (0.8) 10.0 9.1 (15.5) 8.8 1.6 Other Noncurrent Liabilities 4.4 (1.9) 5.5 5.5 6.5 0.7 Adjusted Free Cash Flow $50.0 $29.8 $1.6 $40.8 $40.7 $25.3 ¹ Includes 53 operating weeks. 2 For 2022, amount includes cash paid for the acquisition of a Denny's franchise restaurant and excludes capital paid for the acquisition of Keke’s. 3 Includes cash interest expense (income), net and cash payments of approximately $1.9 million, $3.3 million, $1.8 million and $0.2 million for dedesignated interest rate swap derivatives for full year 2020, 2021, 2022 and year-to-date 2023, respectively. RECONCILIATION OF NET CASH PROVIDED BY OPERATING ACTIVITIES TO NON- GAAP FINANCIAL MEASURES

 
22 $ Millions (except per share amounts) 2018 2019 20201 2021 2022 YTD Jun 2023 Adjusted EBITDA $105.3 $96.8 $26.6 $85.6 $77.5 $40.7 Adjusted EBITDA Margin % 16.7% 17.9% 9.2% 21.5% 17.0% 17.4% Cash Interest Expense, Net2 (19.6) (17.6) (18.0) (17.2) (14.9) (8.3) Cash Paid for Income Taxes, Net (3.3) (24.1) (0.0) (9.9) (9.3) (3.9) Cash Paid for Capital Expenditures and Acquisition of Restaurants and Real Estate3 (32.4) (25.3) (7.0) (17.7) (12.6) (3.3) Adjusted Free Cash Flow $50.0 $29.8 $1.6 $40.8 $40.7 $25.3 Net Income (Loss) $43.7 $117.4 ($5.1) $78.1 $74.7 $9.1 (Gains) Losses and Amort. on Interest Rate Swap Derivatives, Net - - (2.2) (12.6) (55.0) 10.7 (Gains) Losses on Sales of Assets and Other, Net (0.5) (93.6) (4.7) (47.8) (3.4) (2.0) Impairment Charges 1.6 - 4.1 0.4 1.0 0.1 Tax Effect4 (0.2) 24.1 0.7 15.0 14.3 (2.3) Adjusted Net Income (Loss) $44.6 $47.9 ($7.2) $33.1 $31.6 $15.7 Diluted Net Income (Loss) Per Share $0.67 $1.90 ($0.08) $1.19 $1.23 $0.16 Adjustments Per Share $0.01 ($1.13) ($0.04) ($0.69) ($0.71) $0.11 Adjusted Net Income (Loss) Per Share $0.68 $0.77 ($0.12) $0.50 $0.52 $0.27 Diluted Weighted Average Shares Outstanding (000’s) 65,562 61,833 60,812 65,573 60,879 57,423 1 Includes 53 operating weeks. 2 Includes cash interest expense (income), net and cash payments of approximately $1.9 million, $3.3 million, $1.8 million and $0.2 million for dedesignated interest rate swap derivatives for full year 2020, 2021, 2022 and year-to-date 2023, respectively. 3 For 2022, amount includes cash paid for capital expenditures and the acquisition of a Denny's franchise restaurant, and excludes capital paid for the acquisition of Keke's. 4 Tax adjustments for full year 2018 use full year effective tax rates of 16.4%. Tax adjustments for the gains on sales of assets and other, net in 2019 are calculated using an effective rate of 25.7%. Tax adjustments for full year 2020, 2021, 2022 and year-to-date 2023 reflect an effective tax rate of 25.6%, 25.0%, 24.9%, and 25.8%, respectively. RECONCILIATION OF NET INCOME (LOSS) AND NET CASH PROVIDED BY OPERATING ACTIVITIES TO NON-GAAP FINANCIAL MEASURES

 
23 $ Millions 2018 2019 20201 2021 2022 YTD Jun 2023 Operating Income $73.6 $165.0 $6.7 $104.1 $60.6 $31.1 General and Administrative Expenses 63.8 69.0 55.0 68.7 67.2 40.3 Depreciation and Amortization 27.0 19.8 16.2 15.4 14.9 7.3 Operating (Gains) Losses and Other Charges, Net 2.6 (91.2) 1.8 (46.1) (1.0) (0.2) Restaurant-Level Operating Margin $167.1 $162.7 $79.7 $142.1 $141.6 $78.5 Restaurant-Level Operating Margin Consists Of: Company Restaurant Operating Margin 63.2 48.0 3.6 28.1 20.3 15.3 Franchise Operating Margin 104.0 114.7 76.1 114.0 121.3 63.2 Restaurant-Level Operating Margin $167.1 $162.7 $79.7 $142.1 $141.6 $78.5 𝟏 Includes 53 operating weeks. The Company believes that, in addition to GAAP measures, certain other non-GAAP financial measures are appropriate indicators to assist in the evaluation of restaurant-level operating efficiency and performance of ongoing restaurant-level operations. The Company uses Restaurant-level Operating Margin, Company Restaurant Operating Margin and Franchise Operating Margin internally as performance measures for planning purposes, including the preparation of annual operating budgets, and these three non-GAAP measures are used to evaluate operating effectiveness. The Company defines Restaurant-level Operating Margin as operating income excluding the following three items: general and administrative expenses, depreciation and amortization, and operating (gains), losses and other charges, net. Restaurant-level Operating Margin is presented as a percent of total operating revenue. The Company excludes general and administrative expenses, which include primarily non-restaurant-level costs associated with support of company and franchised restaurants and other activities at their corporate office. The Company excludes depreciation and amortization expense, substantially all of which is related to company restaurant-level assets, because such expenses represent historical sunk costs which do not reflect current cash outlays for the restaurants. The Company excludes special items, included within operating (gains), losses and other charges, net, to provide investors with a clearer perspective of its ongoing operating performance and a more relevant comparison to prior period results. Restaurant-level Operating Margin is the total of Company Restaurant Operating Margin and Franchise Operating Margin. The Company defines Company Restaurant Operating Margin as company restaurant sales less costs of company restaurant sales (which include product costs, company restaurant level payroll and benefits, occupancy costs, and other operating costs including utilities, repairs and maintenance, marketing and other expenses) and presents it as a percent of company restaurant sales. The Company defines Franchise Operating Margin as franchise and license revenue (which includes franchise royalties and other non-food and beverage revenue streams such as initial franchise and other fees, advertising revenue and occupancy revenue) less costs of franchise and license revenue and presents it as a percent of franchise and license revenue. These non-GAAP financial measures provide a meaningful comparison between periods and enable investors to focus on the performance of restaurant-level operations by excluding revenues and costs unrelated to food and beverage sales in addition to corporate general and administrative expense, depreciation and amortization, and operating (gains), losses and other charges, net. However, each of these non-GAAP financial measures should be considered as a supplement to, not a substitute for, operating income, net income or other financial performance measures prepared in accordance with U.S. generally accepted accounting principles. Restaurant-level Operating Margin, Company Restaurant Operating Margin and Franchise Operating Margin do not accrue directly to the benefit of shareholders because of the aforementioned excluded items and are not indicative of the overall results for the Company. RECONCILIATION OF OPERATING INCOME TO NON-GAAP FINANCIAL MEASURES