DENN Dennys Corporation

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 fourth quarter and full year ended December 25, 2024 and provided a business update on the Company’s operations.

Kelli Valade, Chief Executive Officer, stated, "We are proud of our progress through 2024, culminating in strong performances from both Denny's and Keke's, which outperformed their respective BBI Family Dining indices in the fourth quarter. We have made significant progress in our strategy to enhance the overall health of our flagship brand by accelerating the closure of lower-volume restaurants and completing 23 remodels, and also opened a record number of Keke’s cafes while expanding into six new states. Looking ahead to 2025, there is still work to be done within our brands, particularly as we navigate near-term consumer sentiment that has been affected by macroeconomic factors. With the actions we are taking to maintain our position as a value leader, invest in our brands, reduce costs, and drive traffic, we are well positioned to deliver shareholder value.”

Fourth Quarter 2024 Highlights(1)

• Total operating revenue was $114.7 million compared to $115.4 million for the prior year quarter.
• Denny's domestic system-wide same-restaurant sales** were 1.1%.
• Keke's domestic system-wide same-restaurant sales** were 3.0%.
• Denny's opened four franchised restaurants and closed 30 franchise restaurants as part of the planned acceleration of lower-volume restaurant closures.
• Reignited Denny's Diner 2.0 remodel program and completed six remodels.
• Keke's opened eight new cafes and entered four new states including California, Colorado, Nevada, and Texas.
• Keke's expanded its first ever remodel test program to two additional company cafes.
• Operating income was $14.5 million compared to $7.7 million for the prior year quarter.
• Adjusted franchise operating margin* was $31.9 million, or 51.2% of franchise and license revenue, and adjusted company restaurant operating margin* was $5.9 million, or 11.3% of company restaurant sales.
• Net income was $6.8 million, or $0.13 per diluted share.
• Adjusted net income* and adjusted net income per share* were $7.6 million and $0.14, respectively.
• Adjusted EBITDA* of $22.2 million increased 11.1% compared to the prior year quarter.

Full Year 2024 Highlights(1)

• Total operating revenue was $452.3 million compared to $463.9 million for the prior year.
• Denny's domestic system-wide same-restaurant sales** were (0.2%).
• Keke's domestic system-wide same-restaurant sales** were (1.7%).
• Denny's opened 14 franchised restaurants and closed 88 restaurants as part of the planned acceleration of lower-volume restaurant closures.
• Reignited Denny's Diner 2.0 remodel program and completed 23 remodels, including seven at company restaurants, or over 11% of the Denny's company fleet.
• Record 12 Keke's openings in a single year, while growing to six different states.
• Completed three Keke's remodels at company cafes.
• Operating income was $45.3 million compared to $52.8 million for the prior year.
• Adjusted franchise operating margin* was $123.0 million, or 51.1% of franchise and license revenue, and adjusted company restaurant operating margin* was $25.8 million, or 12.2% of company restaurant sales.
• Net income was $21.6 million, or $0.41 per diluted share.
• Adjusted net income* and adjusted net income per share* were $28.6 million and $0.54, respectively.
• Adjusted EBITDA* was $81.4 million.

(1) The Company has evolved its definition of non-GAAP measures. Please see the definitions, explanations, and reconciliations further in this release.

Fourth Quarter 2024 Results

Total operating revenue was $114.7 million compared to $115.4 million for the prior year quarter.

Franchise and license revenue was $62.3 million compared to $61.3 million for the prior year quarter. This change was primarily driven by higher local advertising co-op contributions for the current quarter and positive same-restaurant sales** at both brands, partially offset by decreases in equivalent units and franchise occupancy revenue at Denny's.

Company restaurant sales were $52.4 million compared to $54.0 million for the prior year quarter. This change was primarily driven by six fewer Denny's equivalent units, including three refranchised units, partially offset by three additional Keke's equivalent units for the current quarter.

Adjusted franchise operating margin* was $31.9 million, or 51.2% of franchise and license revenue, compared to $31.5 million, or 51.4% for the prior year quarter. This margin increase was primarily driven by positive same-restaurant sales** at both brands, partially offset by fewer Denny's equivalent units.

Adjusted company restaurant operating margin* was $5.9 million, or 11.3% of company restaurant sales, compared to $6.1 million, or 11.4% for the prior year quarter. This margin change was primarily due to investments in marketing and expected new cafe opening inefficiencies, partially offset by lower legal settlement expense.

Total general and administrative expenses were $18.7 million compared to $19.3 million in the prior year quarter. This change was due to lower deferred compensation valuation adjustments, corporate administrative expenses, and incentive compensation.

The provision for income taxes was $3.5 million, reflecting an effective tax rate of 33.8% for the current quarter.

Net income was $6.8 million, or $0.13 per diluted share. Adjusted net income* per share was $0.14.

The Company ended the quarter with $271.9 million of total debt outstanding, including $261.3 million of borrowings under its credit facility.

Capital Allocation

The Company invested $10.9 million in cash capital expenditures during the current quarter, and $28.6 million on the full year, which included Keke's new cafe development and company remodels at both brands.

The Company also allocated $11.2 million to share repurchases for the full year resulting in approximately $89.2 million remaining under its existing repurchase authorization.

Business Outlook

The following full year 2025 (53 operating weeks) expectations reflect performance through the first six fiscal weeks and the expectation that recent shifts in consumer sentiment due to macro events will moderate over time.

• Denny's domestic system-wide same-restaurant sales** between (2.0%) and 1.0%.
• Consolidated restaurant openings of 25 to 40.
• Consolidated restaurant closures between 70 and 90.
• Commodity inflation between 2.0% and 4.0%.
• Labor inflation between 2.5% and 3.5%.
• Total general and administrative expenses between $80 million and $85 million, inclusive of:
  • Corporate and administrative expenses between $60 million and $62 million, including approximately $1 million related to the 53rd week;
  • Incentive compensation between $6 million and $9 million; and,
  • Approximately $14 million related to share-based compensation expense which does not impact Adjusted EBITDA*.
• Adjusted EBITDA* between $80 million and $85 million, inclusive of approximately $2 million related to the 53rd week.
• Share repurchases between $15 million and $25 million.

*

Please refer to the Reconciliation of Net Income 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 estimate set forth above to its 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 estimate is 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 fourth quarter ended December 25, 2024 on a webcast today, Wednesday, February 12, 2025 at 8:30 a.m. Eastern Time. Interested parties are invited to listen to the webcast 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 December 25, 2024, the Company consisted of 1,568 restaurants, 1,493 of which were franchised and licensed restaurants and 75 of which were company operated.

The Company consists of the Denny’s brand and the Keke’s brand. As of December 25, 2024, the Denny's brand consisted of 1,499 global restaurants, 1,438 of which were franchised and licensed restaurants and 61 of which were company operated. As of December 25, 2024, the Keke's brand consisted of 69 restaurants, 55 of which were franchised restaurants and 14 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.

Non-GAAP Definition Changes

The Company has evolved its definition of non-GAAP financial measures to provide more clarity and comparability relative to peers. Denny's Corporation management uses certain non-GAAP measures in analyzing operating performance and believes that the presentation of these measures provides investors and analysts with information that is beneficial to gaining an understanding of the Company's financial results. Non-GAAP disclosures should not be viewed as a substitute for financial results determined in accordance with GAAP.

The Company excludes certain legal settlement expenses not considered to be normal and recurring, pre-opening expenses, and other items management does not consider in the evaluation of its ongoing core operating performance from adjusted operating margin*, adjusted net income*, adjusted net income per share*, and adjusted EBITDA*. In addition, the Company no longer deducts cash payments for restructuring and exit costs, or cash payments for share-based compensation from Adjusted EBITDA*.

Reconciliations of these non-GAAP measures are included in the tables of this press release and a recast of historical non-GAAP financial measures can be found on the Company's website, or its most recent investor presentation.

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 and support personnel; 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 27, 2023 (and in the Company’s subsequent Quarterly Reports on Form 10-Q and Current Reports on Form 8-K).

DENNY’S CORPORATION
Consolidated Balance Sheets
(Unaudited)
($ in thousands)				12/25/24				12/27/23
Assets
	Current assets
		Cash and cash equivalents		$	1,698			$	4,893
		Investments			1,106				1,281
		Receivables, net			24,433				21,391
		Inventories			1,747				2,175
		Assets held for sale			381				1,455
		Prepaid and other current assets			10,628				12,855
			Total current assets		39,993				44,050
	Property, net				111,417				93,494
	Finance lease right-of-use assets, net				6,200				6,098
	Operating lease right-of-use assets, net				124,738				116,795
	Goodwill				66,357				65,908
	Intangible assets, net				91,739				93,428
	Deferred financing costs, net				1,066				1,702
	Other noncurrent assets				54,764				43,343
			Total assets	$	496,274			$	464,818
Liabilities
	Current liabilities
		Current finance lease liabilities		$	1,284			$	1,383
		Current operating lease liabilities			15,487				14,779
		Accounts payable			19,985				24,070
		Other current liabilities			58,842				63,068
			Total current liabilities		95,598				103,300
	Long-term liabilities
		Long-term debt			261,300				255,500
		Noncurrent finance lease liabilities			9,284				9,150
		Noncurrent operating lease liabilities			120,841				114,451
		Liability for insurance claims, less current portion			5,866				6,929
		Deferred income taxes, net			9,964				6,582
		Other noncurrent liabilities			27,446				31,592
			Total long-term liabilities		434,701				424,204
			Total liabilities		530,299				527,504
Shareholders' deficit
		Common stock			513				529
		Paid-in capital			—				6,688
		Deficit			(2,499	)			(21,784	)
		Accumulated other comprehensive loss, net			(32,039	)			(41,659	)
		Treasury stock			—				(6,460	)
			Total shareholders' deficit		(34,025	)			(62,686	)
			Total liabilities and shareholders' deficit	$	496,274			$	464,818
Debt Balances
	Credit facility revolver due 2026			$	261,300			$	255,500
	Finance lease liabilities				10,568				10,533
		Total debt		$	271,868			$	266,033

DENNY’S CORPORATION
Condensed Consolidated Statements of Income
(Unaudited)
			Quarter Ended
($ in thousands, except per share amounts)			12/25/24				12/27/23
Revenue:
	Company restaurant sales		$	52,390			$	54,046
	Franchise and license revenue			62,284				61,307
		Total operating revenue		114,674				115,353
Costs of company restaurant sales, excluding depreciation and amortization				47,228				48,646
Costs of franchise and license revenue, excluding depreciation and amortization				30,425				29,795
General and administrative expenses				18,658				19,255
Depreciation and amortization				3,919				3,507
Goodwill impairment charges				—				6,363
Operating (gains), losses and other charges, net				(10	)			63
		Total operating costs and expenses, net		100,220				107,629
Operating income				14,454				7,724
Interest expense, net				4,410				4,309
Other nonoperating income, net				(222	)			(1,182	)
Income before income taxes				10,266				4,597
Provision for income taxes				3,470				1,695
Net income			$	6,796			$	2,902
Net income per share - basic			$	0.13			$	0.05
Net income per share - diluted			$	0.13			$	0.05
Basic weighted average shares outstanding				52,103				53,648
Diluted weighted average shares outstanding				52,258				53,893
Comprehensive income (loss)			$	18,202			$	(10,997	)
General and Administrative Expenses
	Corporate administrative expenses		$	15,504			$	16,420
	Share-based compensation			2,272				403
	Incentive compensation			591				1,305
	Deferred compensation valuation adjustments			291				1,127
		Total general and administrative expenses	$	18,658			$	19,255

DENNY’S CORPORATION
Condensed Consolidated Statements of Income
(Unaudited)
			Fiscal Year Ended
($ in thousands, except per share amounts)			12/25/24				12/27/23
Revenue:
	Company restaurant sales		$	211,781			$	215,532
	Franchise and license revenue			240,553				248,390
		Total operating revenue		452,334				463,922
Costs of company restaurant sales, excluding depreciation and amortization				189,744				187,599
Costs of franchise and license revenue, excluding depreciation and amortization				120,226				122,452
General and administrative expenses				80,197				77,770
Depreciation and amortization				14,857				14,385
Goodwill impairment charges				20				6,363
Operating (gains), losses and other charges, net				1,974				2,530
		Total operating costs and expenses, net		407,018				411,099
Operating income				45,316				52,823
Interest expense, net				17,974				17,597
Other nonoperating (income) expense, net				(1,907	)			8,288
Income before income taxes				29,249				26,938
Provision for income taxes				7,678				6,993
Net income			$	21,571			$	19,945
Net income per share - basic			$	0.41			$	0.36
Net income per share - diluted			$	0.41			$	0.35
Basic weighted average shares outstanding				52,499				55,984
Diluted weighted average shares outstanding				52,614				56,196
Comprehensive income			$	31,191			$	20,983
General and Administrative Expenses
	Corporate administrative expenses		$	62,347			$	60,339
	Share-based compensation			10,678				8,880
	Incentive compensation			5,459				6,640
	Deferred compensation valuation adjustments			1,713				1,911
		Total general and administrative expenses	$	80,197			$	77,770

DENNY’S CORPORATION

Reconciliation of Net Income to Non-GAAP Financial Measures

(Unaudited)

The Company believes that, in addition to GAAP measures, certain non-GAAP financial measures are useful information to investors and analysts to assist in the evaluation of operating performance on a period-to-period basis. However, non-GAAP measures should be considered as a supplement to, not a substitute for, operating income, net income, and net income per share, or other financial performance measures prepared in accordance with GAAP. The Company uses adjusted EBITDA, 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. These non-GAAP measures are adjusted for certain items the Company does not consider in the evaluation of its ongoing core operating performance. These adjustments are either non-recurring in nature or vary from period to period without correlation to the Company's ongoing core operating performance.

	Quarter Ended								Fiscal Year Ended
($ in thousands, except per share amounts)	12/25/24				12/27/23				12/25/24				12/27/23
Net income	$	6,796			$	2,902			$	21,571			$	19,945
Provision for income taxes		3,470				1,695				7,678				6,993
Goodwill impairment charges		—				6,363				20				6,363
Operating (gains), losses and other charges, net		(10	)			63				1,974				2,530
Other nonoperating (income) expense, net		(222	)			(1,182	)			(1,907	)			8,288
Share-based compensation expense		2,272				403				10,678				8,880
Deferred compensation plan valuation adjustments		291				1,127				1,713				1,911
Interest expense, net		4,410				4,309				17,974				17,597
Depreciation and amortization		3,919				3,507				14,857				14,385
Non-recurring legal settlement expenses		—				590				2,165				679
Pre-opening expenses		782				158				1,548				288
Other adjustments (1)		443				—				3,083				—
Adjusted EBITDA	$	22,151			$	19,935			$	81,354			$	87,859
Net income	$	6,796			$	2,902			$	21,571			$	19,945
Losses and amortization on interest rate swap derivatives, net		258				121				760				10,959
Goodwill impairment charges		—				6,363				20				6,363
Operating (gains), losses and other charges, net		(10	)			63				1,974				2,530
Non-recurring legal settlement expenses		—				590				2,165				679
Pre-opening expenses		782				158				1,548				288
Other adjustments (1)		443				—				3,083				—
Tax effect (2)		(719	)			(2,054	)			(2,512	)			(5,205	)
Adjusted net income	$	7,550			$	8,143			$	28,609			$	35,559
Diluted weighted average shares outstanding		52,258				53,893				52,614				56,196
Net income per share - diluted	$	0.13			$	0.05			$	0.41			$	0.35
Adjustments per share		0.01				0.10				0.13				0.28
Adjusted net income per share	$	0.14			$	0.15			$	0.54			$	0.63

(1	)	Other adjustments for the quarter ended December 25, 2024 include $0.4 million of leadership transition costs. Other adjustments for the year-to-date period ended December 25, 2024 include $0.4 million of leadership transition costs and a $2.6 million distribution to franchisees related to a review of advertising costs.
(2	)	Tax adjustments for the quarter and year-to-date period ended December 25, 2024 reflect effective tax rates of 48.8% and 26.3%, respectively. Tax adjustments for the quarter and year-to-date period ended December 27, 2023 reflect effective tax rates of 28.2% and 25.0%, respectively.

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 useful information to investors and analysts to assist in the evaluation of restaurant-level operating efficiency and performance of ongoing restaurant-level operations. However, non-GAAP measures should be considered as a supplement to, not a substitute for, operating income, net income, and net income per share, or other financial performance measures prepared in accordance with GAAP. 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 for compensation purposes, including incentive compensation for certain employees.

Restaurant-level operating margin is the total of company restaurant operating margin and franchise operating margin and excludes: (i) 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; (ii) 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; (iii) 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.

Company restaurant operating margin is defined 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. Adjusted company operating restaurant margin is defined as company restaurant operating margin less certain items such as legal settlement expenses, pre-opening expenses, and other items the Company does not consider in the evaluation of its ongoing core operating performance.

Franchise operating margin is defined 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. Adjusted franchise operating margin is defined as franchise operating margin less certain items the Company does not consider in the evaluation of its ongoing core operating performance.

Adjusted restaurant-level operating margin is the total of adjusted company restaurant operating margin and adjusted franchise operating margin and is defined as restaurant-level operating margin adjusted for certain items the Company does not consider in the evaluation of its ongoing core operating performance. These adjustments are either non-recurring in nature or vary from period to period without correlation to the Company's ongoing core operating performance.

	Quarter Ended							Fiscal Year Ended
($ in thousands)	12/25/24				12/27/23			12/25/24			12/27/23
Operating income	$	14,454			$	7,724		$	45,316		$	52,823
General and administrative expenses		18,658				19,255			80,197			77,770
Depreciation and amortization		3,919				3,507			14,857			14,385
Goodwill impairment charges		—				6,363			20			6,363
Operating (gains), losses and other charges, net		(10	)			63			1,974			2,530
Restaurant-level operating margin	$	37,021			$	36,912		$	142,364		$	153,871
Restaurant-level operating margin consists of:
Company restaurant operating margin (1)	$	5,162			$	5,400		$	22,037		$	27,933
Franchise operating margin (2)		31,859				31,512			120,327			125,938
Restaurant-level operating margin	$	37,021			$	36,912		$	142,364		$	153,871
Adjustments (3)		782				748			6,353			967
Adjusted restaurant-level operating margin	$	37,803			$	37,660		$	148,717		$	154,838

(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.
(3	)	Adjustments include non-recurring legal settlement expenses, pre-opening costs, and other adjustments the Company does not consider in the evaluation of its ongoing core operating performance. Adjustments for the year-to-date period ended December 25, 2024 include a $2.6 million distribution to franchisees related to a review of advertising costs.

DENNY’S CORPORATION
Operating Margins
(Unaudited)
					Quarter Ended
($ in thousands)					12/25/24						12/27/23
Company restaurant operations: (1)
	Company restaurant sales				$	52,390		100.0	%		$	54,046	100.0	%
	Costs of company restaurant sales, excluding depreciation and amortization:
			Product costs			13,377		25.5	%			13,993	25.9	%
			Payroll and benefits			19,800		37.8	%			20,184	37.3	%
			Occupancy			4,442		8.5	%			4,550	8.4	%
			Other operating costs:
				Utilities		1,645		3.1	%			1,811	3.4	%
				Repairs and maintenance		1,046		2.0	%			994	1.8	%
				Marketing		2,511		4.8	%			1,396	2.6	%
				Legal settlements		(109	)	(0.2)%				1,827	3.4	%
				Pre-opening costs		782		1.5	%			158	0.3	%
				Other direct costs		3,734		7.1	%			3,733	6.9	%
	Total costs of company restaurant sales, excluding depreciation and amortization				$	47,228		90.1	%		$	48,646	90.0	%
	Company restaurant operating margin (non-GAAP) (2)				$	5,162		9.9	%		$	5,400	10.0	%
				Adjustments (3)		782		1.5	%			748	1.4	%
	Adjusted company restaurant operating margin (non-GAAP) (2)				$	5,944		11.3	%		$	6,148	11.4	%
Franchise operations: (4)
	Franchise and license revenue:
	Royalties				$	30,284		48.6	%		$	30,025	49.0	%
	Advertising revenue					20,875		33.5	%			19,676	32.1	%
	Initial and other fees					2,808		4.5	%			2,888	4.7	%
	Occupancy revenue					8,317		13.4	%			8,718	14.2	%
	Total franchise and license revenue				$	62,284		100.0	%		$	61,307	100.0	%
	Costs of franchise and license revenue, excluding depreciation and amortization:
	Advertising costs				$	20,875		33.5	%		$	19,676	32.1	%
	Occupancy costs					5,057		8.1	%			5,307	8.7	%
	Other direct costs					4,493		7.2	%			4,812	7.8	%
	Total costs of franchise and license revenue, excluding depreciation and amortization				$	30,425		48.8	%		$	29,795	48.6	%
	Franchise operating margin (non-GAAP) (2)				$	31,859		51.2	%		$	31,512	51.4	%
			Adjustments (3)			—		—	%			—	—	%
	Adjusted franchise operating margin (non-GAAP) (2)				$	31,859		51.2	%		$	31,512	51.4	%
Total operating revenue (5)					$	114,674		100.0	%		$	115,353	100.0	%
Total costs of operating revenue (5)						77,653		67.7	%			78,441	68.0	%
Restaurant-level operating margin (non-GAAP) (5)					$	37,021		32.3	%		$	36,912	32.0	%
(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 and adjusted operating margin are considered non-GAAP financial measures and 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		)	Adjustments include non-recurring legal settlement expenses, pre-opening costs, and other adjustments the Company does not consider in the evaluation of its ongoing core operating performance.
(4		)	As a percentage of franchise and license revenue.
(5		)	As a percentage of total operating revenue.

DENNY’S CORPORATION
Operating Margins
(Unaudited)
					Fiscal Year Ended
($ in thousands)					12/25/24					12/27/23
Company restaurant operations: (1)
	Company restaurant sales				$	211,781	100.0	%		$	215,532	100.0	%
	Costs of company restaurant sales, excluding depreciation and amortization:
			Product costs			53,931	25.5	%			55,789	25.9	%
			Payroll and benefits			80,605	38.1	%			80,666	37.4	%
			Occupancy			18,129	8.6	%			16,809	7.8	%
			Other operating costs:
				Utilities		6,954	3.3	%			7,848	3.6	%
				Repairs and maintenance		4,023	1.9	%			3,661	1.7	%
				Marketing		7,850	3.7	%			5,603	2.6	%
				Legal settlements		1,700	0.8	%			2,302	1.1	%
				Pre-opening costs		1,548	0.7	%			288	0.1	%
				Other direct costs		15,004	7.1	%			14,633	6.8	%
	Total costs of company restaurant sales, excluding depreciation and amortization				$	189,744	89.6	%		$	187,599	87.0	%
	Company restaurant operating margin (non-GAAP) (2)				$	22,037	10.4	%		$	27,933	13.0	%
			Adjustments (3)			3,713	1.8	%			967	0.4	%
	Adjusted company restaurant operating margin (non-GAAP) (2)				$	25,750	12.2	%		$	28,900	13.4	%
Franchise operations: (4)
	Franchise and license revenue:
	Royalties				$	118,705	49.3	%		$	120,131	48.4	%
	Advertising revenue					79,973	33.2	%			78,494	31.6	%
	Initial and other fees					8,711	3.6	%			13,882	5.6	%
	Occupancy revenue					33,164	13.8	%			35,883	14.4	%
	Total franchise and license revenue				$	240,553	100.0	%		$	248,390	100.0	%
	Costs of franchise and license revenue, excluding depreciation and amortization:
	Advertising costs				$	79,973	33.2	%		$	78,494	31.6	%
	Occupancy costs					20,539	8.5	%			22,160	8.9	%
	Other direct costs					19,714	8.2	%			21,798	8.8	%
	Total costs of franchise and license revenue, excluding depreciation and amortization				$	120,226	50.0	%		$	122,452	49.3	%
	Franchise operating margin (non-GAAP) (2)				$	120,327	50.0	%		$	125,938	50.7	%
	Adjustments (3)					2,640	1.1	%			—	0.0	%
	Adjusted franchise operating margin (non-GAAP) (2)				$	122,967	51.1	%		$	125,938	50.7	%
Total operating revenue (5)					$	452,334	100.0	%		$	463,922	100.0	%
Total costs of operating revenue (5)						309,970	68.5	%			310,051	66.8	%
Restaurant-level operating margin (non-GAAP) (5)					$	142,364	31.5	%		$	153,871	33.2	%
(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 and adjusted operating margin are considered non-GAAP financial measures and 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		)	Adjustments include non-recurring legal settlement expenses, pre-opening costs, and other adjustments the Company does not consider in the evaluation of its ongoing core operating performance. Adjustments for the year-to-date period ended December 25, 2024 include a $2.6 million distribution to franchisees related to a review of advertising costs.
(4		)	As a percentage of franchise and license revenue.
(5		)	As a percentage of total operating revenue.

DENNY’S CORPORATION
Statistical Data
(Unaudited)
			Denny's																Keke's
Changes in Same-Restaurant Sales (1)			Quarter Ended								Fiscal Year Ended								Quarter Ended								Fiscal Year Ended
(Increase (decrease) vs. prior year)			12/25/24				12/27/23				12/25/24				12/27/23				12/25/24				12/27/23				12/25/24				12/27/23
	Company Restaurants			0.0	%			(1.2	)%			(1.5	%)			2.7	%			(3.7	)%			0.7	%			(2.7	%)			(1.1	)%
	Domestic Franchise Restaurants			1.2	%			1.5	%			(0.1	%)			3.6	%			4.1	%			(3.8	)%			(1.6	%)			(4.4	)%
	Domestic System-wide Restaurants			1.1	%			1.3	%			(0.2	%)			3.6	%			3.0	%			(3.1	)%			(1.7	%)			(3.9	)%
Average Unit Sales
($ in thousands)
	Company Restaurants		$	800			$	770			$	3,086			$	3,073			$	407			$	442			$	1,728			$	1,796
	Franchised Restaurants		$	482			$	467			$	1,875			$	1,843			$	459			$	432			$	1,829			$	1,828
(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.

Restaurant Unit Activity			Denny's									Keke's
						Franchised									Franchised
			Company			& Licensed			Total			Company			& Licensed			Total
Ending Units September 25, 2024			61			1,464			1,525			11			50			61
	Units Opened		—			4			4			3			5			8
	Units Closed		—			(30	)		(30	)		—			—			—
		Net Change	—			(26	)		(26	)		3			5			8
Ending Units December 25, 2024			61			1,438			1,499			14			55			69
Equivalent Units
	Fourth Quarter 2024		59			1,454			1,513			11			51			62
	Fourth Quarter 2023		65			1,512			1,577			8			50			58
		Net Change	(6	)		(58	)		(64	)		3			1			4
Ending Units December 27, 2023			65			1,508			1,573			8			50			58
	Units Opened		—			14			14			7			5			12
	Units Refranchised		(3	)		3			—			(1	)		1			—
	Units Closed		(1	)		(87	)		(88	)		—			(1	)		(1	)
		Net Change	(4	)		(70	)		(74	)		6			5			11
Ending Units December 25, 2024			61			1,438			1,499			14			55			69
Equivalent Units
	Year-to-Date 2024		62			1,478			1,540			11			50			61
	Year-to-Date 2023		65			1,522			1,587			8			48			56
		Net Change	(3	)		(44	)		(47	)		3			2			5

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