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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) October 22, 2024
Dennys.gif
DENNY’S CORPORATION
(Exact name of registrant as specified in its charter)
Delaware0-1805113-3487402
(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)

Not Applicable
(Former name or former address, if changed since last report)
 
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 classTrading Symbol(s) Name of each exchange on which registered
$.01 Par Value, Common StockDENN 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 October 22, 2024, Denny's Corporation (the "Company") issued a press release announcing financial results for the third quarter ended September 25, 2024. A copy of the press release is attached as Exhibit 99.1 hereto and incorporated herein by reference.

Item 7.01 Regulation FD Disclosure.

Beginning at 9:00 a.m. Eastern time on Tuesday, October 22, 2024, the Company will be hosting an Investor Day in New York, as well as a live webcast. The management of the Company will also conduct meetings with members of the investment community during October, November and December 2024. A copy of the investor presentation to be used during the Investor Day and 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
104Cover 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: October 22, 2024/s/ Robert P. Verostek
 Robert P. Verostek
 Executive Vice President and
 Chief Financial Officer




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DENNY’S CORPORATION REPORTS RESULTS FOR THIRD QUARTER 2024
AND HOSTS INVESTOR DAY TODAY


SPARTANBURG, S.C., October 22, 2024 - 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 third quarter ended September 25, 2024 and provided a business update on the Company’s operations.

Kelli Valade, Chief Executive Officer, stated, “Our third quarter sales results directly reflect ongoing brand investments and dedicated focus on value that resulted in outpacing the category. Denny’s domestic system-wide same-restaurant sales** outperformed the BBI Family Dining index for the third consecutive quarter driven by the relaunch of our fan favorite $2-$4-$6-$8 value menu and the continued expansion of off-premises with our third virtual brand, Banda Burrito. Keke’s also experienced significant sequential improvement in same-restaurant sales** as our initiatives to enact foundational marketing strategies and expand the alcohol program continued our efforts to close the gap to the competitive set. We are also very excited to be hosting an Investor Day today.”

Beginning at 9:00am EST this morning, the Company will be hosting an Investor Day in New York, as well as a live webcast, to detail strategic initiatives to build on its third quarter progress and ensure long-term financial opportunities for its brands. The investor day will highlight the Company’s plan to grow average unit volume sales, margins and the portfolio, while balancing capital allocations to maximize shareholder returns.


Third Quarter 2024 Highlights(1)

•Total operating revenue was $111.8 million compared to $114.2 million for the prior year quarter.
•Denny's domestic system-wide same-restaurant sales** were (0.1%) compared to the equivalent fiscal period in 2023, including (0.1%) at domestic franchised restaurants and (0.4%) at company restaurants.
•Opened two Denny's domestic franchised restaurants.
•Completed six Denny's remodels, including three company remodels.
•Operating income was $11.7 million compared to $14.0 million for the prior year quarter.
•Adjusted franchise operating margin* was $30.1 million, or 51.0% of franchise and license revenue, and Adjusted company restaurant operating margin* was $6.2 million, or 11.8% of company restaurant sales.
•Net income was $6.5 million, or $0.12 per diluted share.
•Adjusted net income* and adjusted net income per share* were $7.2 million and $0.14, respectively.
•Adjusted EBITDA* was $20.0 million.

(1) Beginning fiscal 2024, the Company has evolved its definition of non-GAAP measures. Please see the definitions, explanations, and reconciliations further in this release.






1

Third Quarter 2024 Results

Total operating revenue was $111.8 million compared to $114.2 million for the prior year quarter.

Franchise and license revenue was $59.1 million compared to $61.0 million for the prior year quarter. This change was primarily driven by a decrease in initial and other fees associated with the sale of kitchen equipment in the prior year quarter, and decreases in equivalent units and franchise occupancy revenue, partially offset by an increase in franchise advertising revenue primarily related to higher local advertising co-op contributions for the current quarter.

Company restaurant sales were $52.7 million compared to $53.2 million for the prior year quarter primarily driven by four 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 $30.1 million, or 51.0% of franchise and license revenue, compared to $31.1 million, or 51.0% for the prior year quarter. This margin change was primarily driven by the impact of fewer equivalent units on royalty revenues and lease terminations.

Adjusted company restaurant operating margin* was $6.2 million, or 11.8% of company restaurant sales, compared to $7.6 million, or 14.3% for the prior year quarter. This margin change was primarily due to investments in marketing and higher occupancy costs, including general liability insurance costs, for the current quarter.

Total general and administrative expenses were $19.8 million compared to $18.2 million in the prior year quarter. This change was primarily due to an increase in corporate administration expense.

The provision for income taxes was $1.5 million, reflecting an effective tax rate of 18.5% for the current quarter.

Net income was $6.5 million, or $0.12 per diluted share. Adjusted net income* per share was $0.14.

The Company ended the quarter with $272.0 million of total debt outstanding, including $261.0 million of borrowings under its credit facility.

Capital Allocation

The Company invested $7.8 million in cash capital expenditures, which included Keke's new development and Denny's company remodels.

During the quarter, the Company allocated $1.8 million to share repurchases resulting in approximately $89.2 million remaining under its existing repurchase authorization.











2

Business Outlook

The following full year 2024 expectations reflect management's expectations that the current consumer and economic environment will not change materially, as well as the Company's strategic initiative to accelerate the closure of lower volume Denny's restaurants.

•Denny's domestic system-wide same-restaurant sales** between (1%) and 0% (vs. between (1%) and 1%).
•Consolidated restaurant openings of 30 to 40, including 12 to 16 new Keke's restaurants, with a consolidated net decline of 45 to 55 (vs. 20 to 30).
•Commodity inflation of approximately 2% (vs. between 0% and 2%).
•Labor inflation between 3% and 4%.
•Total general and administrative expenses between $82 million and $85 million, including approximately $11 million related to share-based compensation expense which does not impact Adjusted EBITDA*.
•Adjusted EBITDA* between $81 million and $84 million (vs. between $83 million and $87 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 third quarter ended September 25, 2024 and its investor day on a webcast today, Tuesday, October 22, 2024 at 9:00 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 September 25, 2024, the Company consisted of 1,586 restaurants, 1,514 of which were franchised and licensed restaurants and 72 of which were company operated.

The Company consists of the Denny’s brand and the Keke’s brand. As of September 25, 2024, the Denny's brand consisted of 1,525 global restaurants, 1,464 of which were franchised and licensed restaurants and 61 of which were company operated. As of September 25, 2024, the Keke's brand consisted of 61 restaurants, 50 of which were franchised restaurants and 11 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.


3

Non-GAAP Definition Changes

The Company has evolved its definition of non-GAAP financial measures starting in fiscal 2024 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 legal settlement expenses, 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*. Lastly, the Company has transitioned to utilizing GAAP cash flows included in its SEC filed documents in lieu of a non-GAAP financial measure.

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).


Investor Contact:    877-784-7167

Media Contact:    864-597-8005
4

DENNY’S CORPORATION
Consolidated Balance Sheets
(Unaudited)
($ in thousands)9/25/2412/27/23
Assets
Current assets
Cash and cash equivalents$1,466 $4,893 
Investments2,902 1,281 
Receivables, net17,038 21,391 
Inventories1,835 2,175 
Assets held for sale— 1,455 
Prepaid and other current assets10,610 12,855 
Total current assets33,851 44,050 
Property, net101,532 93,494 
Finance lease right-of-use assets, net6,411 6,098 
Operating lease right-of-use assets, net121,169 116,795 
Goodwill66,357 65,908 
Intangible assets, net92,112 93,428 
Deferred financing costs, net1,225 1,702 
Other noncurrent assets38,966 43,343 
Total assets$461,623 $464,818 
Liabilities
Current liabilities
Current finance lease liabilities$1,457 $1,383 
Current operating lease liabilities15,076 14,779 
Accounts payable14,685 24,070 
Other current liabilities56,474 63,068 
Total current liabilities87,692 103,300 
Long-term liabilities  
Long-term debt261,000 255,500 
Noncurrent finance lease liabilities9,540 9,150 
Noncurrent operating lease liabilities117,390 114,451 
Liability for insurance claims, less current portion7,160 6,929 
Deferred income taxes, net4,619 6,582 
Other noncurrent liabilities28,705 31,592 
Total long-term liabilities428,414 424,204 
Total liabilities516,106 527,504 
Shareholders' deficit
Common stock533 529 
Paid-in capital13,129 6,688 
Deficit(7,009)(21,784)
Accumulated other comprehensive loss, net(43,445)(41,659)
Treasury stock(17,691)(6,460)
Total shareholders' deficit(54,483)(62,686)
Total liabilities and shareholders' deficit$461,623 $464,818 
Debt Balances
Credit facility revolver due 2026$261,000 $255,500 
Finance lease liabilities10,997 10,533 
Total debt$271,997 $266,033 
5

DENNY’S CORPORATION
Condensed Consolidated Statements of Income
(Unaudited)
Quarter Ended
($ in thousands, except per share amounts)9/25/249/27/23
Revenue:
Company restaurant sales$52,701 $53,153 
Franchise and license revenue59,058 61,030 
Total operating revenue111,759 114,183 
Costs of company restaurant sales, excluding depreciation and amortization46,820 45,893 
Costs of franchise and license revenue, excluding depreciation and amortization28,999 29,810 
General and administrative expenses19,831 18,237 
Depreciation and amortization3,622 3,605 
Operating (gains), losses and other charges, net746 2,620 
Total operating costs and expenses, net100,018 100,165 
Operating income11,741 14,018 
Interest expense, net4,571 4,381 
Other nonoperating (income) expense, net(824)43 
Income before income taxes7,994 9,594 
Provision for income taxes1,478 1,686 
Net income$6,516 $7,908 
Net income per share - basic$0.12 $0.14 
Net income per share - diluted$0.12 $0.14 
Basic weighted average shares outstanding52,148 55,869 
Diluted weighted average shares outstanding52,207 56,082 
Comprehensive (loss) income$(2,468)$20,469 
General and Administrative Expenses
Corporate administrative expenses$15,875 $14,580 
Share-based compensation3,006 2,864 
Incentive compensation447 1,049 
Deferred compensation valuation adjustments503 (256)
Total general and administrative expenses$19,831 $18,237 

6

DENNY’S CORPORATION
Condensed Consolidated Statements of Income
(Unaudited)
Three Quarters Ended
($ in thousands, except per share amounts)9/25/249/27/23
Revenue:
Company restaurant sales$159,391 $161,486 
Franchise and license revenue178,269 187,083 
Total operating revenue337,660 348,569 
Costs of company restaurant sales, excluding depreciation and amortization142,516 138,953 
Costs of franchise and license revenue, excluding depreciation and amortization89,801 92,657 
General and administrative expenses61,539 58,515 
Depreciation and amortization10,938 10,878 
Goodwill impairment charges20 — 
Operating (gains), losses and other charges, net1,984 2,467 
Total operating costs and expenses, net306,798 303,470 
Operating income30,862 45,099 
Interest expense, net13,564 13,288 
Other nonoperating (income) expense, net(1,685)9,470 
Income before income taxes18,983 22,341 
Provision for income taxes4,208 5,298 
Net income$14,775 $17,043 
Net income per share - basic$0.28 $0.30 
Net income per share - diluted$0.28 $0.30 
Basic weighted average shares outstanding52,635 56,764 
Diluted weighted average shares outstanding52,739 56,973 
Comprehensive income$12,989 $31,980 
General and Administrative Expenses
Corporate administrative expenses$46,843 $43,919 
Share-based compensation8,406 8,477 
Incentive compensation4,868 5,335 
Deferred compensation valuation adjustments1,422 784 
Total general and administrative expenses$61,539 $58,515 
7

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 EndedThree Quarters Ended
($ in thousands, except per share amounts)
9/25/249/27/239/25/249/27/23
Net income$6,516 $7,908 $14,775 $17,043 
Provision for income taxes1,478 1,686 4,208 5,298 
Goodwill impairment charges— — 20 — 
Operating (gains), losses and other charges, net
746 2,620 1,984 2,467 
Other nonoperating (income) expense, net(824)43 (1,685)9,470 
Share-based compensation expense3,006 2,864 8,406 8,477 
Deferred compensation plan valuation adjustments503 (256)1,422 784 
Interest expense, net4,571 4,381 13,564 13,288 
Depreciation and amortization3,622 3,605 10,938 10,878 
Legal settlement expenses152 245 1,809 475 
Pre-opening expenses209 105 766 130 
Other adjustments40 (78)2,532 (75)
Adjusted EBITDA$20,019 $23,123 $58,739 $68,235 
Net income$6,516 $7,908 $14,775 $17,043 
Losses and amortization on interest rate swap derivatives, net194 94 502 10,838 
Losses (gains) on sales of assets and other charges, net6 (88)(88)(2,132)
Impairment charges (1)
78 1,711 812 1,840 
Legal settlement expenses152 245 1,809 475 
Pre-opening expenses209 105 766 130 
Other adjustments40 (78)2,532 (75)
Tax effect (2)
(4)(237)(1,406)(2,581)
Adjusted net income$7,191 $9,660 $19,702 $25,538 
Diluted weighted average shares outstanding52,207 56,082 52,739 56,973 
Net income per share - diluted$0.12 $0.14 $0.28 $0.30 
Adjustments per share0.02 0.03 0.09 0.15 
Adjusted net income per share$0.14 $0.17 $0.37 $0.45 

(1)Impairment charges include goodwill impairment charges of less than $0.1 million for the year-to-date period ended September 25, 2024.
(2)Tax adjustments for the quarter and year-to-date period ended September 25, 2024 reflect effective tax rates of 0.6% and 22.2%, respectively. Tax adjustments for the quarter and year-to-date period ended September 27, 2023 reflect effective tax rates of 11.9% and 23.3%, respectively.




8

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 EndedThree Quarters Ended
($ in thousands)9/25/249/27/239/25/249/27/23
Operating income$11,741 $14,018 $30,862 $45,099 
General and administrative expenses19,831 18,237 61,539 58,515 
Depreciation and amortization3,622 3,605 10,938 10,878 
Goodwill impairment charges— — 20 — 
Operating (gains), losses and other charges, net746 2,620 1,984 2,467 
  Restaurant-level operating margin$35,940 $38,480 $105,343 $116,959 
Restaurant-level operating margin consists of:
 Company restaurant operating margin (1)
$5,881 $7,260 $16,875 $22,533 
 Franchise operating margin (2)
30,059 31,220 88,468 94,426 
  Restaurant-level operating margin$35,940 $38,480 $105,343 $116,959 
    Adjustments (3)
401 272 5,107 530 
  Adjusted restaurant-level operating margin$36,341 $38,752 $110,450 $117,489 
(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 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 September 25, 2024 include a $2.6 million distribution to franchisees related to a review of advertising costs.
9

DENNY’S CORPORATION
Operating Margins
(Unaudited)
Quarter Ended
($ in thousands)9/25/249/27/23
Company restaurant operations: (1)
Company restaurant sales$52,701 100.0 %$53,153 100.0 %
Costs of company restaurant sales, excluding depreciation and amortization:
Product costs13,611 25.8 %13,587 25.6 %
Payroll and benefits19,838 37.6 %19,754 37.2 %
Occupancy4,443 8.4 %4,085 7.7 %
Other operating costs:
Utilities1,959 3.7 %2,120 4.0 %
Repairs and maintenance964 1.8 %996 1.9 %
Marketing1,859 3.5 %1,393 2.6 %
Legal settlements152 0.3 %245 0.5 %
Pre-opening costs209 0.4 %105 0.2 %
Other direct costs3,785 7.2 %3,608 6.8 %
Total costs of company restaurant sales, excluding depreciation and amortization$46,820 88.8 %$45,893 86.3 %
Company restaurant operating margin (non-GAAP) (2)
$5,881 11.2 %$7,260 13.7 %
Adjustments (3)
3610.7 %3500.7 %
Adjusted company restaurant operating margin (non-GAAP) (2)
$6,242 11.8 %$7,610 14.3 %
Franchise operations: (4)
Franchise and license revenue:
Royalties$29,101 49.3 %$29,703 48.7 %
Advertising revenue20,172 34.2 %19,297 31.6 %
Initial and other fees1,639 2.8 %3,388 5.6 %
Occupancy revenue8,146 13.8 %8,642 14.2 %
Total franchise and license revenue$59,058 100.0 %$61,030 100.0 %
Costs of franchise and license revenue, excluding depreciation and amortization:
Advertising costs$20,172 34.2 %$19,297 31.6 %
Occupancy costs5,256 8.9 %5,389 8.8 %
Other direct costs3,571 6.0 %5,124 8.4 %
Total costs of franchise and license revenue, excluding depreciation and amortization$28,999 49.1 %$29,810 48.8 %
Franchise operating margin (non-GAAP) (2)
$30,059 50.9 %$31,220 51.2 %
Adjustments (3)
40 0.1 %(78)(0.1)%
Adjusted franchise operating margin (non-GAAP) (2)
$30,099 51.0 %$31,142 51.0 %
Total operating revenue (5)
$111,759 100.0 %$114,183 100.0 %
Total costs of operating revenue (5)
75,819 67.8 %75,703 66.3 %
Restaurant-level operating margin (non-GAAP) (5)
$35,940 32.2 %$38,480 33.7 %
(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 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.
10

DENNY’S CORPORATION
Operating Margins
(Unaudited)
Three Quarters Ended
($ in thousands)9/25/249/27/23
Company restaurant operations: (1)
Company restaurant sales$159,391 100.0 %$161,486 100.0 %
Costs of company restaurant sales, excluding depreciation and amortization:
Product costs40,554 25.4 %41,796 25.9 %
Payroll and benefits60,805 38.1 %60,482 37.5 %
Occupancy13,687 8.6 %12,259 7.6 %
Other operating costs:
Utilities5,309 3.3 %6,037 3.7 %
Repairs and maintenance2,977 1.9 %2,667 1.7 %
Marketing5,339 3.3 %4,207 2.6 %
Legal settlements1,809 1.1 %475 0.3 %
Pre-opening costs766 0.5 %130 0.1 %
Other direct costs11,270 7.1 %10,900 6.7 %
Total costs of company restaurant sales, excluding depreciation and amortization$142,516 89.4 %$138,953 86.0 %
Company restaurant operating margin (non-GAAP) (2)
$16,875 10.6 %$22,533 14.0 %
Adjustments (3)
2,575 1.6 %605 0.4 %
Adjusted company restaurant operating margin (non-GAAP) (2)
$19,450 12.2 %$23,138 14.3 %
Franchise operations: (4)
Franchise and license revenue:
Royalties$88,421 49.6 %$90,106 48.2 %
Advertising revenue59,098 33.2 %58,818 31.4 %
Initial and other fees5,903 3.3 %10,994 5.9 %
Occupancy revenue24,847 13.9 %27,165 14.5 %
Total franchise and license revenue$178,269 100.0 %$187,083 100.0 %
Costs of franchise and license revenue, excluding depreciation and amortization:
Advertising costs$59,098 33.2 %$58,818 31.4 %
Occupancy costs15,482 8.7 %16,853 9.0 %
Other direct costs15,221 8.5 %16,986 9.1 %
Total costs of franchise and license revenue, excluding depreciation and amortization$89,801 50.4 %$92,657 49.5 %
Franchise operating margin (non-GAAP) (2)
$88,468 49.6 %$94,426 50.5 %
Adjustments (3)
2,532 1.4 %(75)0.0 %
Adjusted franchise operating margin (non-GAAP) (2)
$91,000 51.0 %$94,351 50.4 %
Total operating revenue (5)
$337,660 100.0 %$348,569 100.0 %
Total costs of operating revenue (5)
232,317 68.8 %231,610 66.4 %
Restaurant-level operating margin (non-GAAP) (5)
$105,343 31.2 %$116,959 33.6 %
(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 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 September 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.
11

DENNY’S CORPORATION
Statistical Data
(Unaudited)
Denny'sKeke's
Changes in Same-Restaurant Sales (1)
Quarter EndedThree Quarters EndedQuarter EndedThree Quarters Ended
(Increase (decrease) vs. prior year)9/25/249/27/239/25/249/27/239/25/249/27/239/25/249/27/23
Company Restaurants(0.4)%(1.4)%(2.0%)4.1%(1.7)%(3.4)%(2.4%)(3.4)%
Domestic Franchise Restaurants(0.1)%2.1%(0.6%)4.3%(0.9)%(5.3)%(3.2%)(5.3)%
Domestic System-wide Restaurants(0.1)%1.8%(0.7%)4.3%(1.0)%(5.0)%(3.1%)(5.0)%
Average Unit Sales
($ in thousands)
Company Restaurants$771$755$2,288$2,303$423$429$1,323$1,354
Franchised Restaurants$465$458$1,395$1,376$439$430$1,368$1,397
(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 ActivityDenny's
Keke's
FranchisedFranchised
Company & LicensedTotalCompany& LicensedTotal
Ending Units June 26, 202464 1,477 1,541 11 51 62 
Units Opened— 2 2 — — — 
Units Refranchised(3)3 — — — — 
Units Closed— (18)(18)— (1)(1)
Net Change(3)(13)(16)— (1)(1)
Ending Units September 25, 202461 1,464 1,525 11 50 61 
Equivalent Units
Third Quarter 202462 1,470 1,532 11 50 61 
Third Quarter 202366 1,523 1,589 8 48 56 
Net Change(4)(53)(57)3 2 5 
Ending Units December 27, 202365 1,508 1,573 8 50 58 
Units Opened— 10 10 4 — 4 
Units Refranchised(3)3 — (1)1 — 
Units Closed(1)(57)(58)— (1)(1)
Net Change(4)(44)(48)3 — 3 
Ending Units September 25, 202461 1,464 1,525 11 50 61 
Equivalent Units
Year-to-Date 202463 1,485 1,548 10 50 60 
Year-to-Date 202365 1,525 1,590 8 47 55 
Net Change(2)(40)(42)2 3 5 
12

 
CHIEF EXECUTIVE OFFICER KELLI VALADE

 
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 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). 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 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. See Appendix for non-GAAP reconciliations to the following GAAP measures: $ Millions (except per share amounts) 2018 2019 2020 2021 2022 2023 YTD Sep 2024 Operating Income $73.6 $165.0 $6.7 $104.1 $60.6 $52.8 $30.9 Net Income (Loss) $43.7 $117.4 ($5.1) $78.1 $74.7 $19.9 $14.8 Net Income (Loss) per Share $0.67 $1.90 ($0.08) $1.19 $1.23 $0.35 $0.28

 
1 Q3 2024 RESULTS 2 STATE OF THE INDUSTRY 3 DENNY’S 4 KEKE’S 5 FRANCHISEE Q&A 6 LONG-RANGE OUTLOOK AGENDA

 
5 GOALS FOR TODAY Opportunity to hear from members of talented executive leadership team Communicate ambition and path to revenue and cash flow growth Provide long-range outlook 1 2 3

 
THE EXECUTIVE LEADERSHIP TEAM David Schmidt President – Keke’s Inc. September 2022 Stephen Dunn EVP, Chief Global Development Officer October 2004 Chris Bode President – Denny’s Inc. September 2024 Kelli Valade Chief Executive Officer June 2022 Gail Sharps-Myers EVP, Chief Legal & Administrative Officer and Corporate Secretary June 2020 Robert Verostek EVP, Chief Financial Officer June 1999 Patty Trevino SVP, Chief Brand Officer August 2024 Jay Gilmore SVP, Chief Accounting Officer and Corporate Controller February 1999 Minh Le SVP, Chief Technology Officer September 2024 Monigo Saygbay-Hallie EVP, Chief People Officer August 2024 ~

 
Q3 2024 RESULTS

 
8 Q3 2024 HIGHLIGHTS – DENNY’S • Domestic system-wide same- restaurant sales* of (0.1%). • Sequential improvement of 50bps. • Outperformed the BBI Family Dining sales benchmark for the third consecutive quarter. • Outperformed the BBI Casual Dining sales benchmark for six out of the last seven quarters. • Outperformed test results and is driving incremental traffic. • Rolled out Banda Burrito to nearly 1,000 restaurants which increased same- restaurant sales* by 70bps. • Total off-premises sales of 20%. • Completed six remodels, including three company restaurants. *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.

 
9 Q3 2024 HIGHLIGHTS – KEKE’S • Alcohol program rollout to ~80% of the system increased same-restaurant sales* by 110bps. • Signed additional development commitments resulting in a total pipeline of over 140. • Established remodel program lift target of 6%-8% based on testing performance. • Opened first cafe in Colorado in October. • System-wide same- restaurant sales* of (1.0%) represented sequential improvement of 360bps. • Outperformed BBI Family Dining sales benchmark in Florida by over 120bps. • Launched new and improved website resulting in ~100bps of additional online sales. *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.

 
10 Q3 2024 Highlights – DENNY’S CORPORATION $111.8M $11.7M $20.0M Adjusted EBITDA* $0.14 Adjusted Net Income Per Share* $6.2M 11.8% Adjusted Company Restaurant Operating Margin* $30.1M 51.0% Adjusted Franchise Operating Margin* Total Operating Revenue Total Operating Income $7.8M Capital Expenditures Denny’s: (0.1%) Keke’s: (1.0%) Same-Restaurant Sales* Additionally, see Appendix for reconciliation of Net Income (Loss) to Non-GAAP Financial Measures, as well as the reconciliation of Operating Income to Non-GAAP Financial Measures. *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.

 
11 (1.0%) Q3 2024 SYSTEM-WIDE SAME-RESTAURANT SALES* (3.1%) Q3 2024 YTD SYSTEM-WIDE SAME-RESTAURANT SALES* 3 # OF STATES $1.8M Q3 2024 LTM AUV SALES 2006 YEAR FOUNDED 82% FRANCHISE MIX 16% OFF-PREMISES SALES MIX 62 # OF CAFES (0.1%) Q3 2024 DOMESTIC SYSTEM- WIDE SAME- RESTAURANT SALES* (0.7%) Q3 2024 YTD DOMESTIC SYSTEM- WIDE SAME- RESTAURANT SALES* 15 COUNTRIES & U.S. TERRITORIES $1.9M Q3 2024 LTM AUV SALES 1953 YEAR FOUNDED 96% FRANCHISE MIX 20% OFF-PREMISES SALES MIX 1,525 # OF RESTAURANTS DENNY’S CORPORATION AT A GLANCE Denny’s Domestic System- Wide Same-Restaurant Sales* (1%) – 0% 75 - 95 Total G&A Expense Including ~$11M Related to Share-Based Compensation $82M - $85M30-40 Restaurant Openings Including 12-16 Keke’s Cafes Adjusted EBITDA* $81M - $84M UPDATED FULL YEAR 2024 GUIDANCE Restaurant Closures in a Strategic Initiative to Accelerate Lower Volume Closures *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. Additionally, see Appendix for reconciliation of Net Income (Loss) to Non-GAAP Financial Measures, as well as the reconciliation of Operating Income to Non-GAAP Financial Measures. (1) Keke’s unit data includes one additional franchise opening subsequent to the end of Q3 2024 in Colorado. Data through Q3 2024 Data through Q3 2024(1)

 
STATE OF THE INDUSTRY

 
13 CHOPPY ECONOMIC CONDITIONS WILL PERSIST IN THE NEAR-TERM

 
14 PERSONAL SAVINGS RATES TRAIL PRE-PANDEMIC AVERAGE 0.0 5.0 10.0 15.0 20.0 25.0 30.0 2018 2019 2020 2021 2022 2023 2024 Personal Savings Rate Pre-Pandemic Average Stimulus Stimulus Source: Federal Reserve Bank of St. Louis Federal Reserve FRED database.

 
15 FOOD AWAY FROM HOME INFLATION CONTINUES TO OUTPACE -2.0 0.0 2.0 4.0 6.0 8.0 10.0 12.0 14.0 16.0 2018 2019 2020 2021 2023 2024 Food Away From Home Food At Home Source: Federal Reserve Bank of St. Louis Federal Reserve FRED database.

 
16 GUESTS ARE MANAGING THEIR SPEND Order from restaurant less often Seek out deals / specials Seek cheaper restaurants Order more takeout to avoid delivery fee Order less expensive items No impact 13% 19% 32% 38% 40% 55% Source: Technomic Q1 2024 Consumer & Operator Outlook Report. Based: 1,000 consumers ages 18+.

 
17 ESPECIALLY <$50,000 HH INCOME

 
18 FAMILY DINING HAS LOST THE MOST TRAFFIC Source: Black Box Intelligence.

 
19 AND YET...

 
20 RESILIENCE & RELEVANCE Relevant in cultural conversation New restaurant openings outperform system averages Outperform peer BBI indices Guest net sentiment scores continue to improve

 
21 0.7% 1.3% 0.5% 2.8% 5.8% 0.9% 1.1% 0.8% 2.0% 6.3% 3.6% 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 Denny's BBI Family CONSISTENT, SOLID SAME-RESTAURANT SALES* SMOOTHED FOR COVID IMPACT After strong growth in 2022 and 2023, guiding same-restaurant sales* of (1%) – 0% for 2024. Pandemic Same-Restaurant Sales* Q1 2023 Q2 2023 Q3 2023 Denny’s (1.3%) (0.6%) (0.1%) vs. BBI Family +0.22% +0.03% +0.53% *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. Source: Black Box Intelligence.

 
22 Strategy: Two Complementary Breakfast-Forward Brands that are Asset-Light and Generate Significant Cash Flow Create Leading Edge Tech Solutions Robust New Café Growth Assemble Best-in- Class People & Teams Validate & Optimize the Business Model Elevate Profitable Traffic Purpose Vision Key Areas of Focus We Create Fresh Starts for Everyone, Every Day To Serve 40M Fresh Starts Annually by 2030 Strengthen the Core Rapid Growth We Love to Feed People – Body, Mind & Soul Grow AUVs to $2.2M through increased guest frequency and expanding the guest base Take Back Breakfast Regain Value Leadership Accelerate Off-Premises DENNY’S CORPORATION

 
23 FAMILY DINING OVERVIEW Units / % Franchised 1,525 / 96% 1,809 / 100% 658 / 0% 357 / 99% 1,985 / 23% 435 / 0% International Presence 167 / 11% 124 / 7% 0 / 0% 0 / 0% 0 / 0% 0 / 0% System-Wide Sales $3.0B $3.6B $2.7B $1.6B $1.4B $782M Domestic Average Unit Volume $1.9M $2.0M $4.0M $4.6M $0.7M $1.8M Total Unit CAGR vs 2019 (2.3%) (0.4%) (0.1%) (7.3%) (0.5%) (2.5%) Domestic AUV CAGR vs 2019 2.3% 0.8% 1.1% 6.5% (1.4%) 2.5% Source: Technomic Top 1,500 Chain Restaurants Performance Data 2024 for Golden Corral, Waffle House, and Bob Evans. Most recent public documents for Denny’s, IHOP, and Cracker Barrel.

 
24 (4.2%) (2.6%) (1.9%) (2.4%) (1.0%) (0.5%) (1.3%) 0.2% 0.03% 0.5% (1.4%) (2.0%) (1.9%) 1.0% 1.5% 1.2% 1.1% 2.4% (0.7%) 1.2% (6.0%) (4.0%) (2.0%) 0.0% 2.0% 4.0% Q 2 2 2 Q 3 2 2 Q 4 2 2 Q 1 2 3 Q 2 2 3 Q 3 2 3 Q 4 2 3 Q 1 2 4 Q 2 2 4 Q 3 2 4 Domestic System-Wide Same-Restaurant Sales* Gap vs Family Dining Gap vs Casual Dining FULL-SERVICE DINING OVERVIEW $5,112 $4,784 $4,357 $4,023 $3,958 $3,399 $2,830 $2,808 $2,694 $2,688 Olive Garden Texas Roadhouse Applebee's Chili's Grill & Bar Buffalo Wild Wings IHOP Outback Steakhouse LongHorn Steakhouse Denny's Cracker Barrel Family Dining Accounts for 30% of the Top 10 U.S. Full-Service Restaurants Denny’s has outperformed BBI Family Dining the last three quarters and exceeded BBI Casual Dining in six of the last seven quarters Top 10 U.S. Full Service Restaurants (2023 U.S. System-Wide Sales) ($ in 000’s) 908 638 1,536 1,230 1,264 1,696 688 580 1,407 662 U.S. Units as of 2023# #9 FSR *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. Sources: Technomic Top 1,500 Chain Restaurants Performance Data 2024 and Black Box Intelligence.

 
25 DAYTIME EATERY OVERVIEW Units / % Franchised 61 / 82% 538 / 15% 67 / 0% 97 / 62% 71 / 100% 63 / 0% U.S. Geography Southeast Southeast Nationwide Nationwide South South / Northeast System-Wide Sales $108M $1.2B $191M $184M $81M $78M Average Unit Volume $1.8M $2.2M $3.1M $2.1M $1.2M $1.3M Total Unit CAGR vs 2019 6.1% 7.7% 13.8% 9.3% 17.7% 17.5% AUV CAGR vs 2019 2.4% 13.9% 1.2% 8.9% 7.4% 1.6% Source: Technomic Top 1,500 Chain Restaurants Performance Data 2024 for all except Keke’s and First Watch which references most recent public documents.

 
26 DAYTIME EATERY OVERVIEW 538 97 71 67 63 61 46 38 27 21 4 5 Unit Count Daytime Eatery Profile Hours & Menu Growth Economics Limited hour breakfast brands primarily operate during the breakfast and lunch dayparts Fastest growing category with ample white space With limited hours and a focus on breakfast food and alcohol, margins outpace other FSR. 17% 3% Breakfast Full-service Restaurant Unit Growth Outpaces FSR 2023 Year-over-Year Unit Growth (1) Source: Technomic Top 1,500 Chain Restaurants Performance Data 2024 for all except Keke’s and First Watch which references most recent public documents. (1) Breakfast includes Another Broken Egg Café, Broken Yolk Café, Eggs Up Grill, First Watch, Keke’s Breakfast Cafe, Ruby Slipper Cafe, Snooze, and the Toasted Yolk Cafe.

 
27 ACQUISITION OF KEKE’S HAS CREATED EXCITING GROWTH OPPORTUNITIES Unit Economics Solid Margins Brand Strength Commands Premium Pricing vs. Denny's Growth Potential No Scaled National Franchisor Poised for Growth New Customer Reach Only 11% Visit Overlap with Denny’s Trade-Area Opportunities Complementary to Denny’s Leveraging Strengths Franchise Model Breakfast Strength Scale of Shared Services

 
28 TWO COMPLEMENTARY BREAKFAST-FORWARD BRANDS Household Income $1.9M $1.8M Average Check $63k $78k Off-Premises % of Sales $16 $18 Alcohol Mix 20% 16% Net Sentiment <1% 3% 49 Average Unit Volume 69 Data through Q3 2024.

 
29 IMPORTANTLY, KEKE’S IS A COMPLEMENTARY BREAKFAST PLAYER TO DENNY’S 89% 11% Denny’s Guests shared with Keke’s Denny’s Guests that do not visit Keke’s $78,000 $63,000 Guest Overlap Each have strength in differing guest profiles and needs, exemplified here both by income levels as well as low incidence of shared visits Guest Household Income Sources: Guest Household Income - Technomic (Q2 2024 LTM); Guest Overlap – eSite Analytics.

 
THIS TRANSFORMATION IS AND WILL CONTINUE TO BE DRIVEN BY OUR CRAVE FRAMEWORK FOR GROWTH

 
31 C-R-A-V-E STRATEGIC FRAMEWORK Va l ida te & Opt imize the Bus iness Model to Max imize Res tauran t Margins E l eva te Pro f i t ab le Tra f f ic Th rough the Gues t Exper ience & Un ique ly C raveable Food C rea te Lead ing Edge So lu t ions Wi th Technology & Innova t ion Robust New Res tauran t G row th as the Franch isor o f Cho ice Assemble Bes t I n C l ass Peop le and Teams Through Cu l tu re, Tools & Sys tems

 
32 KEY THEMES AUV Growth Restaurant Growth Margin Growth Cash Flow & Capital Allocation

 
DENNY’S AMERICA’S DINER FOR TODAY’S AMERICA

 
34 DENNY’S LEADERSHIP TEAM Patty Trevino SVP – Chief Brand Officer August 2024 Ethan Gallagher SVP – Finance January 2024 Chris Bode President – Denny’s Inc. September 2024 Fasika Melaku SVP – Human Resources & Chief Learning Officer September 2015 ~

 
35 OFFERING GUESTS AN EVER-IMPROVING EXPERIENCE IS CRITICAL DENNY’S FAMILY DINING RESTAURANT INDUSTRY Overall Net Sentiment (BBI) Denny’s Year-Over-Year Change +11 +10 +8 +22Overall ’24 vs. ‘192022 2023 2024 20 31 41 49 23 28 32 40 28 32 23 27 2021 2022 2023 2024 Data through Q3 2024.

 
36 3.76 3.79 3.83 3.99 4.22 4.36 2019 2020 2021 2022 2023 YTD 2024 SERVICE IMPROVEMENTS ARE SHOWING MEASURABLE GAINS +0.6 Average Google Rating Data through Q3 2024.

 
37 FOCUSED ON NARROWING VARIABILITY BETWEEN RESTAURANTS Primary Learning Plan Completion Net Sentiment Score Top 20% 88% 51 Difference 17pp 30 Bottom 20% 71% 21

 
38 TRAINING IMPROVEMENTS DIRECTLY IMPACT BBI & KEY RESULTS Franchisee A Franchisee B Franchisee C 88% 69% 2022 +29% vs. 32% 2022 Sales 1.6pp Traffic 0.7pp vs. Brand +18pts vs. 26% 2022 Sales 1.4pp Traffic 1.5pp vs. Brand 83% vs. 50% 2022 85% vs. 43% 2022 +17% vs. 43% 2022 Sales 1.6pp Traffic 1.4pp vs. Brand Learning Completion Overall BBI Progress Sales Impact

 
39 INVESTMENTS IN EQUIPMENT DRIVING PRODUCT QUALITY KITCHEN EQUIPMENT INVESTMENTS Improved Product Quality Consistent Execution Greater Efficiency New Product Opportunities

 
40 INVESTMENTS IN TECHNOLOGY DRIVING EFFICIENCY GAINS Server Tablets Kitchen Video Systems Improved Accuracy and Speed QR Pay Enabled GUEST FACING TECHNOLOGY ENHANCEMENTS IMPROVED GUEST EXPERIENCE XENIAL MARGINS ENHANCEMENTS $5K-$10K PER RESTAURANT Labor Efficiencies Increased Productivity Lower Waste Increased Frequency

 
With More Investments To Go! • Product Quality • Value Leadership • Off-Premises • Remodels • Portfolio Optimization

 
SVP – DENNY’S CHIEF BRAND OFFICER DENNY’S PATH TO OUTPACING CATEGORY TRAFFIC TRENDS PATTY TREVINO ~

 
LOOKING FORWARD, WE ARE FOCUSED ON LEVERAGING OUR BRAND STRENGTHS TO RECLAIM TRAFFIC THROUGH INCREASED FREQUENCY AND AN EXPANDING GUEST BASE.

 
44 DENNY’S PATH TO OUTPACING CATEGORY TRAFFIC Start with Strengths Win Key Use Occasions Engage With the Next Generation of Devotees Increasing from 2.2 visits per year to 2.5 delivers +$400K in AUV growth Increasing frequency and expanding the guest base by focusing on strengths and taking share in relevant use occasions

 
45 “Denny’s is a place where dreams and waffles come true.” - Stephen Colbert “Denny’s is like the Louvre. If the Louvre had a gumball machine and half the paintings were velvet.” - Patton Oswalt “Denny’s transcends all cultural and ethnic and economic boundaries. It’s a beautiful place. You can find everybody in Denny’s. I was just there.” - Flea of Red Hot Chili Peppers “It had all the coffee you could drink and no one would chase you out.” - Jensen Huang HOLD A PLACE IN RELEVANT CONVERSATIONS

 
46 EARNING MAJOR HEADLINES

 
47 DENNY’S IS ‘AMERICA’S DINER’ Only Denny’s can claim the title of America’s Diner for Today’s America Open for All Generational Spanning Memory-Maker Always-there-for-you Hospitality

 
48 MATERIAL VIDEO

 
49 FURTHER STRENGTHENING STRATEGIES BY BUILDING ON GUEST INSIGHTS WHO WE SERVE WHERE WE PLAY HOW WE WIN

 
50 WHO WE SERVE & WHERE WE PLAY Guests are highly diversified across multiple demographics Past 12-Month Users Denny’s Guest Profile Generation Z 18% Millennials 28% Generation X 19% Baby Boomers 32% Matures 3% Asian 10% Black / African American 15% Hispanic / Latino 34% Other 8% White (non-Hispanic / Latino) 33% Source: Technomic Consumer Survey Data Q3’23 through Q2’24 - Denny’s (n=9,498); G e n e ra ti o n E th n ic it y

 
51 LEVERAGING MULTIPLE ATTRIBUTES TO GROW 1. BREAKFAST food leadership OFF-PREMISES expansion VALUE leadership in family diningOff-Premises 1 2 3 Breakfast Value

 
52 Off-Premises Breakfast Value REIGNITE BREAKFAST GROWTH THROUGH 3 AREAS OF FOCUS CORE MENU OPTIMIZATION QUALITY INVESTMENT NEW INNOVATION

 
53 CRAVE-WORTHY BREAKFAST WINS UNDERWAY Menu Optimization Study Improved Bacon NEW Strawberry Stuffed French Toast Slam NEW Grand Slam Burrito (Banda) Off-Premises Breakfast Value

 
54 SOLIDIFY VALUE LEADERSHIP THROUGH BARBELL STRATEGY VALUE UPSELL Leverage brand strength to offer compelling value consistently, to both build traffic and add value beyond price Drive traffic through compelling value offerings Value consists of price, portion and quality Menu engineering to ensure the most profitable plates are highlighted Premium offerings featured in restaurant which facilitate new trial and elevate Denny’s image around food quality Off-Premises Breakfast Value

 
55

 
56 BEETLEJUICE COMMERCIAL Off-Premises Breakfast Value

 
57 COMMERCIAL Off-Premises Breakfast Value

 
58 Off-Premises Breakfast Value $2 $4 $6 $8 EXCITEMENT FROM FANS

 
+2.0% to +2.5% SALES LIFT Date Range: 8/22/2024 – 9/25/2024 (5 weeks).

 
60 ACCELERATE OFF-PREMISES GROWTH BY INVESTING IN EASE AND ACCESS Third-Party Marketplaces First-Party Channels (Web and App) Off-Premises Breakfast Value

 
61 GROW DIGITAL AND OFF-PREMISES SALES Off-Premises Breakfast Value HIGH LIFETIME VALUE 1% OVERLAP BETWEEN GUESTS LATE NIGHT BUSINESS PAID DIGITAL CHANNELS

 
62 VIRTUAL BRANDS SUPPORT OFF-PREMISES GROWTH ~$77M +15% >65% <3% Traffic During Dinner & Late Night Dayparts Growth Since 2022 Guest Overlap with Denny’s Sales Contribution Today Off-Premises Breakfast Value Q3 2024 LTM

 
63 UNLOCKING THE POWER OF THIS ICONIC BRAND Owning Brand Positioning Optimized Media Support Personalization through Loyalty/CRM

 
64 BRAND POSITIONING Personalization through CRM Brand Positioning Increased Media Support EMBRACING “AMERICA’S DINER” BRAND POSITIONING

 
65 LEVERAGING MARKETING CO-OP OPPORTUNITY Personalization through CRM Brand Positioning Media Optimization 54 Co-ops — 100% Opt-in 1,106 restaurants 85% of the Denny’s System Co-op program provides a match to Co-ops that contribute 0.5% into the program. ($8.6M Franchisee Contributions) 16 Co-ops reactivated since 2023

 
66 PERSONALIZATION THROUGH CRM Personalization through CRM Brand Positioning Increased Media Support 72% of CONSUMERS ONLY ENGAGE WITH PERSONALIZED MESSAGES Smart Insights Study 2020 81% of CONSUMERS WANT BRANDS TO UNDERSTAND THEM BETTER…AND KNOW WHEN AND HOW TO APPROACH THEM Accenture Study 2019

 
67 PERSONALIZATION THROUGH CRM Personalization through CRM Brand Positioning Increased Media Support IDENTIFYING the Customer where they are available to connect the Brand Value UNDERSTANDING what the Customer needs and how they are open to engaging with Denny’s ENGAGING the right message to those Customers who are going to help us achieve our goals PERSONALIZATION & RELEVANCY

 
68 REDESIGNING AND RELAUNCHING LOYALTY PROGRAM Off-Premises Breakfast Value COUPON DISTRIBUTION EASY AND PERSONALIZED • ~5M Active Members •Loyalty Guests Visit 1.4x More Per Year • +$44M In System Sales Contribution • No Personalization • New Digital Team Leading the Redesign •New Program Targeted for 2H 2025 •Points Based System Incentivizing Earn/Burn for Easy Data Collection •Leverage Data for Offer Personalization •External Communication for Member Acquisition •Potential Sales Lift through Database Growth and Frequency FROM TO

 
69 GUEST FIRST APPROACH turning tactics into meaning

 
IGNITE CRAVE IGNITE CONNECTION IGNITE CULTURE FOOD THAT’S CRAVEABLE AND OWNABLE EASY TO ACCESS DENNY’S AMPLIFY OUR VOICE

 
EVP – CHIEF DEVELOPMENT OFFICER PORTFOLIO GROWTH AND OPTIMIZATION STEVE DUNN

 
72 STRONG PARTNERSHIP WITH FRANCHISEES Well Diversified, Experienced & Energetic Group of 201 Franchisees (1) • 33 franchisees with more than 10 restaurants each collectively comprise approximately 66% of the franchise system • Approximately 20% of franchisees operate multiple concepts (1) providing a well-rounded perspective within the industry Ownership of 1,464 Franchisee Restaurants (1) Number of Franchised Units Number of Franchisees Franchisees as % of Total Total Franchised Units Franchised Units as % of Total 1 76 38% 76 5% 2–5 63 31% 198 14% 6–10 29 14% 223 15% 11–20 17 9% 241 16% 21–35 7 4% 192 13% >35 9 4% 534 37% Total 201 100% 1,464 100% (1) Data through September 25, 2024.

 
73 DOMESTIC FOOTPRINT 5 8 44 30 3 11 6 13 27 26 4 4 23 4 3 2 1 82 360 19 119 5 22 2 7 4 23 40 13 30 17 9 20 33 9 196 41 4 2 3 1 3 20 1 2 34 1 2 3 5 6 Total of 1,358 restaurants in the U.S. with strongest presence in California, Texas, Florida and Arizona (1). Top DMAs Number of Restaurants 42% of Domestic System Los Angeles 170 12.5% Houston 65 4.8% Phoenix 64 4.7% Dallas / Ft. Worth 50 3.7% Sacramento / Stockton 44 3.2% Orlando / Daytona 39 2.9% San Francisco / Oakland 38 2.8% San Diego 35 2.6% Las Vegas 34 2.5% Miami / Ft. Lauderdale 33 2.4% (1) Data through September 2023 3 27 8 6 5 10 44 30 11 12 26 4 4 23

 
74 INTERNATIONAL FOOTPRINT Countries & U.S. Territories Number of Restaurants United States 1,358 Canada 86 Philippines 16 Puerto Rico 15 Mexico 15 Honduras 7 New Zealand 7 United Arab Emirates 5 Guatemala 4 Costa Rica 3 El Salvador 3 Guam 2 Indonesia 2 Curacao 1 United Kingdom 1 Total System 1,525 Denny’s Global Footprint (1) Strong International Prescence of 167 restaurants with over 50% in Canada(1). (1) Data through September 2023

 
75 GLOBAL DEVELOPMENT PIPELINE (1) Data through September 2023 16 12 12 20 17 7 14 8 8 8 11 3 30 20 20 28 28 10 0 5 10 15 20 25 30 35 2019 2020 2021 2022 2023 Q3 2024 YTD Domestic Openings International Openings System Openings 2024 Guidance 18 - 24 Robust Pipeline of Nearly 150 Global Development Commitments

 
76 PORTFOLIO ASSESSMENT – PREPARING FOR GROWTH Domestic Franchise Portfolio Quintile Assessment Average AUV Average EBITDA Strategies Quintile 1 $2.9M $250k - $350k Continue growing; benefitted from pricing power and growing off- premises businessQuintile 2 $2.1M Quintile 3 $1.7M $125k - $175k Strategies to improve sales and profitability will continue to lift these restaurantsQuintile 4 $1.4M Quintile 5 $1.1M <$25k Some closures will be necessary, some will be acquired by stronger operators, some will improve based on execution of strategies Key Growth Units Assess for Closure / Rehabilitation (1) As of latest quintile assessment for the LTM period as of August 2023. Steady Contributors (1)

 
77 Rehabilitate ~40% Consider for Closure Through 2025 ~60% ~150 total restaurants ~50 to close in 2024 By closing lower volume restaurants and opening higher volume restaurants, the overall health of the brand is improving and will result in higher AUVs and net unit growth in the future PORTFOLIO OPTIMIZATION – PREPARING FOR GROWTH Quintile 5 Assessment: Evaluate closures based on demand and cash flow results • Comprehensive operations business reviews • Improved customer service training efforts • Incremental local store marketing efforts • Review lease terms for potential savings Playbook to Elevate Performance

 
78 $1.1 $1.9 $2.3 Franchise Closures Existing Franchise New Franchise Openings NEW RESTAURANTS OUTPERFORM Average Unit Sales Volumes ($Ms)

 
79 DENNY’S VIDEO

 
80 REMODELS UNDERWAY +6.4% SALES LIFT +6.5% TRAFFIC LIFT 17 REMODELS COMPLETED TO DATE ~$250k AVERAGE INVESTMENT Results based on APT pre/post vs. control analysis.

 
81 LOW INVESTMENT, HIGH LIFT IN V E S TM E N T SALES LIFT Source: Restaurant Research LLC: 2024 Chain Remodeling Analysis Report $300K $200K $100K $500K+ $400K 2% 6%4% 8% 6.4% SALES LIFT

 
82 HELPING FRANCHISEE GROW Remodel Financial Support Upfront cash after completion of remodel in exchange for a higher royalty rate Remodel Acceleration Incentives Increased incentives for each year a remodel is accelerated compared to the due date Supported Financing Third-party $25M remodel loan pool 1 2 3

 
CHIEF EXECUTIVE OFFICER RISE OF A NEW DAY & KEY TAKEAWAYS KELLI VALADE

 
84 • Growth in TRAFFIC • Ownable, Clear Value Proposition • Optimized Digital & Off-Premises Channels • Traffic Driving Creative & Media Plan • Best In Class CRM & Loyalty Program • Net Positive Unit Growth • Stronger ROI from Investments in Food, Technology & Restaurant Image • Growth from CHECK • Discounting Throughout the Menu • Digital & Off-Premises Channels • Improved Messaging & Working Media • Customer Database • Negative Unit Growth • Proven, Tested Initiatives RISE OF A NEW DAY Where We Are GoingToday

 
85 KEY THEMES AUV Growth Restaurant Growth Margin Growth Cash Flow & Capital Allocation

 
Q&A

 
PRESIDENT, KEKE’S INC. DAVID SCHMIDT

 
88 THE KEKE'S LEADERSHIP TEAM David Schmidt President September, 2022 Manuel Rodriguez VP of Operations March, 2023 Annalise Miller VP People & Culture May, 2023

 
OUR PURPOSE: TO CREATE FRESH STARTS FOR EVERYONE, EVERY DAY. OUR VISION: TO SERVE 40 MILLION FRESH STARTS ANNUALLY BY 2030. WELCOME TO KEKE'S BREAKFAST CAFE

 
90 BRAND HISTORY Keke's grew to 53 locations before the acquisition by focusing on quality ingredients, operational excellence, and service – with no marketing. These core competencies are critical to protect and weave into the brand's story as we look to the future. First Keke’s Breakfast Cafe opens in Orlando, FL November 2006 50th cafe opens in Wesley Chapel, FL February 2021 Acquired by Denny’s Corporation May 2022 First cafe outside of Florida opens in Hendersonville, TN January 2024 First cafes in Colorado and California open Keke's is now coast to coast! October 2024

 
91 KEKE’S BREAKFAST CAFE BY THE NUMBERS of operating experience since opening in 2006. Extensive restaurant experience. 11 Company Cafes 51 Franchised Cafes 3 States and Growing Strong revenues with limited operating hours of 7:00am– 2:30pm. Top performing cafes generate $3M+ AUV. Primarily in-line locations with footprints of 3,800– 4,500 ft2 require less upfront capital and have lower maintenance costs. 18 Years 62 Cafes(1) $1.8M+ AUV <4,500 ft2 Product Mix Combines great economics and rapid growth trajectory with industry-leading service and quality standards. Data through October 19, 2024. After the end of Q3 2024, Keke’s opened one additional franchise cafe in Colorado.

 
92 FOOTPRINT Orlando Tampa Gainesville Jacksonville Tallahassee West Palm BeachFort Myers DMA Cafes % of FL Sales Orlando 25 44% Tampa 20 31% Jacksonville 5 7% West Palm Beach 4 9% Fort Myers 3 5% Gainesville 1 2% Tallahassee 1 2% Florida Tennessee 2 Nashville Colorado 1 Denver Data through October 19, 2024. After the end of Q3 2024, Keke’s opened one additional franchise cafe in Colorado.

 
93 SOLIDIFYING FOUNDATION Leadership Team Training Technology Insights & Analytics Marketing Supply Chain Culture Operations

 
94 VIDEO

 
"There are two types of guests–those who love Keke's Breakfast Cafe and those who haven't tried us yet!” BRAND DIFFERENTIATORS

 
96 DAYTIME EATERY CATEGORY IS HIGHLY SEGMENTED The Daytime Eatery category is highly regional and fragmented

 
97 UNIQUELY POSITIONED TO LEAD IN THIS FAST-GROWING CATEGORY Franchised Structure Visionary Leadership Winning Recipe Denny’s Partnership

 
98 SIGNIFICANT COMPETITIVE ADVANTAGE Franchised Structure Visionary Leadership Winning Recipe Denny’s Partnership 1. World-Class Franchisor 2. Shared Support Structure 3. Benefits of Scale

 
99 ASSET LIGHT GROWTH STRATEGY LEVERAGES DENNY’S EXPERTISE Franchised Structure Visionary Leadership Winning Recipe Denny’s Partnership 1. No franchisor of scale in Daytime Eatery space 2. Existing franchisees eager to grow 3. Operational experience in difficult markets

 
100 EXPERIENCED LEADERSHIP Franchised Structure Visionary Leadership Winning Recipe Denny’s Partnership 1. Experienced Leadership Team 2. Small but mighty 3. Culture of Accountability, Recognition & Collaboration

 
101 WELL-LOVED BRAND WITH EXCEPTIONAL GUEST LOYALTY Franchised Structure Visionary Leadership Winning Recipe Denny’s Partnership 1. Abundance (Portion size) 2. Fresh/Quality 3. Service 4. Atmosphere

 
102 AWARD WINNING RECOGNITION FOR QUALITY FOOD

 
103 53 54 58 63 68 73 0 10 20 30 40 50 60 70 80 90 Q2 2023 Q3 2023 Q4 2023 Q1 2024 Q2 2024 Q3 2024 Net Sentiment LEADS CATEGORY IN GUEST SATISFACTION METRICS Note: BBI data as of 10.04.24 YTD Net Sentiment Keke’s Family Dining First Watch Snooze Food 59 30 43 45 Beverage 39 17 38 34 Service 76 44 43 32 Ambiance 63 25 34 30 Intent to Return 71 52 60 56 Net Sentiment 69 39 46 42 Total Net Sentiment Continues To Improve Sequentially YTD Net Sentiment Outpacing Peer Set

 
104 OVERALL GOOGLE STAR RATING IS BEST IN CLASS Note: BBI data as of 10.04.24 Average rating 4.45 4.75 4.54 2022 2023 2024YTD

 
105 FLORIDA SALES TRENDS Same-Restaurant Sales* Have Experienced Recent Improvements – Closed the Gap in Q3 2024 Florida has Trailed the US Same-Restaurant Sales Benchmarks for Seven Consecutive Quarters -6% -4% -2% 0% 2% 4% 6% 8% 10% 12% Q1 2023 Q2 2023 Q3 2023 Q4 2023 Q1 2024 Q2 2024 Q3 2024 Florida Same-Restaurant Sales* BBI Family - US BBI Family - FL Keke's *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.

 
106 SIGNIFICANT AUV GROWTH OPPORTUNITIES Design & Remodel • First cafe with new design opened in Jan 2024 • First remodel completed in July 2024 Beverage Program • Phase 1 rolled out Q2/Q3 ’24 • Phase 2 testing in New Cafes Marketing • 1% marketing contribution initiated in mid-2023 • Increased to 2% in 2024 Traffic Driving Levers Off-Premises • Active in 97% of cafes • Q3 2024 - 16% of sales

 
107 BEVERAGE PROGRAM Design & Remodel Off-Premises Beverage Program Marketing • Phase 1 Complete • Mimosa, Bellini, Sangria • Rolled out in Q1 2024 • Active in 80% of system • 4%-6% Incremental Sales • Phase 2 Testing • Includes expanded cocktail menu and espresso beverages

 
108 EVOLVING MARKETING PROGRAM Design & Remodel Off-Premises Beverage Program Marketing • First paid media campaign in Q3’24 • 4%-6% Transaction Lift

 
109 DESIGN & REMODEL INITIATIVE Design & Remodel Off-Premises Beverage Program Marketing • Six new cafes currently on the updated image • First remodel completed in July 2024

 
11 0 EARLY REMODEL PROGRAM RESULTS +6%-8% SALES LIFT +30% IRR ~25%+ CASH ON CASH $150K+ CAPEX Target Metrics

 
111 OFF-PREMISES Design& Remodel Off-Premises Beverage Program Marketing • Early Phase of Opportunity • Grown from 14% in 2023 to 16% in Q3 2024 • Target 18%-20% of sales

 
112 KEKE’S GROWING PARTNERSHIP WITH FRANCHISEES Ownership of 51 Franchisee Restaurants (1) Number of Franchised Units Number of Franchisees Franchisees as % of Total Total Franchised Units Franchised Units as % of Total 1 9 47% 9 18% 2–5 8 42% 28 54% 6–10 2 11% 14 27% Total 19 100% 51 100% Rapidly Expanding Group of 19 Franchisees (1) • 2 franchisees with more than 5 restaurants each collectively comprise approximately 27% of the franchise system • Majority of existing franchisees are solely focused on operating Keke’s franchises • Company seeks to leverage both Keke's and Denny's existing franchisee networks for the 250+ franchised Keke’s units expected to open over the next five years (1) Data through October 19, 2024

 
113 1 0 0 0 1 1 2 3 4 5 6 7 8 7 3 2 3 4 14 0 2 4 6 8 10 12 14 16 18 20 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 LONG RANGE OUTLOOK - PORTFOLIO GROWTH New Cafe Openings (2006 – 2024) New Cafe Growth Pipeline of Over 140 Expected to Come From: 2024 Midpoint of Guidance Long-Range Outlook 25%-30% Cafe Growth CAGR Additional Development Expected through Seed & Feed Strategy and New Franchisees

 
114 IMPLEMENTING SEED & FEED STRATEGY Build New Company Cafes Refranchise Cash Outflow • Launch into new market • Build initial market presence • Establish efficiencies Cash Inflow • Capital return • Secure additional development commitments • Franchisee to build out market • Targeting an 85%-90% franchise mix

 
115 UNTAPPED WHITE-SPACE – OVER 140 DEVELOPMENT COMMITMENTS

 
116 RISE OF A NEW DAY • Small, but Expanding Regional Chain • Leveraging Shared Services Support From Denny’s Corporation • Updated Design Menu • Building Marketing Foundation • Slow and Steady Growth • Tested Remodel Image • Largest National Franchisor in the Daytime Eatery Space • Maximizing Shared Services Support from Denny’s Corporation • Strategic Menu Engineering • Leveraging a Robust Brand Building Fund to Drive Incremental Sales • Aggressive Growth • System Gains From Remodel Rollout Where We Are GoingToday

 
117 KEY THEMES AUV Growth Restaurant Growth Margin Growth Cash Flow & Capital Allocation

 
Q&A

 
BREAK

 
FRANCHISEE FIRESIDE CHAT

 
121 ROLAND SPONGBERG ✓ Joined the Denny’s franchise system in 2004 ✓ Largest Denny’s franchisee with 108 restaurants nationwide ✓ 23% of portfolio is non-traditional travel center locations ✓ Early adopter of the new remodel design and POS rollout ✓Diversified portfolio consisting of Wendy’s, El Pollo Loco, Krispy Kreme and Blaze Pizza

 
122 CLYDE RUCKER ✓ Joined the Denny’s franchise system in 2017 and expanded his portfolio through Denny’s refranchising and development program ✓ 9th largest Denny’s franchisee with 36 restaurants across Texas and Florida ✓Was an early adopter of the new remodel program and has invested to convert over 35% of his portfolio already ✓ Early adopter of the new POS rollout ✓Diversified portfolio includes Jack In the Box

 
123 ✓Opened their first Keke’s Cafe in 2017 ✓Owns 6 Keke’s Cafes in the Orlando and Ft Myers areas ✓ Currently has 2 additional Keke’s Cafes under construction ✓Has the 2nd largest AUV cafe in the Keke’s system JOHN EHRHARD

 
124 ✓Opened their first Keke’s Cafe in 2014 ✓Operate 7 Keke’s Cafes in the Tampa/St. Petersburg DMA ✓ Plans to expand into Georgia very soon! JORDAN & ASHLEY SWAN

 
125 FRANCHISEE Q&A MODERATED BY RAPHAEL GROSS Roland Spongberg Clyde Rucker John Ehrhard Ashley Swan

 
EVP – CHIEF FINANCIAL OFFICER LONG-RANGE OUTLOOK ROBERT VEROSTEK

 
127 KEY THEMES AUV Growth Restaurant Growth Margin Growth Cash Flow & Capital Allocation

 
128 RECALIBRATING G&A $63 $9 Q3 2024 LTM Corporate Administrative Expenses Franchise Operating Margin G&A $72M 5%-6% Reduction1 G&A reduction partially offset in 2025 by ~1.5% due to the 53rd week.

 
129 Near-Term Expectations • Expect higher portion of free cash flow to be deployed against capital expenditures: • Accelerating company remodels for both brands through 2026 • At least 50% of new Keke’s openings expected to be company cafes followed by a seed and feed strategy BALANCING CAPITAL ALLOCATION FOR LONG-TERM GAIN $27 $16 $14 $17 $22 $27 $20 $22 $14 $7 $7 $7 $12 $10 $18 $4 $22 $22 $25 $36 $106 $59 $83 $68 $96 $34 $31 $65 $52 $11 $31 $38 $36 $42 $58 $133 $78 $105 $82 $103 $41 $38 $77 $62 $29 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 YTD Q3 2024 Capital Expenditures Share Repurchases Total Investments

 
130 Rise of a New Day 5% - 7% Adjusted EBITDA* Growth CAGR Flat to Slightly Positive Same- Restaurant Sales* 3% Net Unit Growth CAGR 5% - 6% G&A Reduction Over Next 12 Months Balancing Seed & Feed with Share Repurchases 2.5x – 3.5x Debt Leverage LONG-RANGE OUTLOOK 0% - 1% UNIT GROWTH CAGR $2.2M AUV TARGET Mid-Teens COMPANY MARGIN TARGET 25% - 30% UNIT GROWTH CAGR $2.2M AUV TARGET Upper-Teens COMPANY MARGIN TARGET *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. Additionally, see Appendix for reconciliation of Net Income (Loss) to Non-GAAP Financial Measures, as well as the reconciliation of Operating Income to Non-GAAP Financial Measures.

 
CHIEF EXECUTIVE OFFICER CLOSING THOUGHTS KELLI VALADE

 
132 RECAP OF COMPELLING BUSINESS MODEL Largest National Franchisor in the Daytime Eatery Space Maximizing Shared Services Support from Denny’s Corporation Strategic Menu Engineering Leveraging a Robust Brand Building Fund to Drive Incremental Sales Aggressive Growth System Gains From Remodel Rollout % of Sales (a) Growth in TRAFFIC Ownable, Clear Value Proposition Optimized Digital & Off-Premises Channels Traffic Driving Creative & Media Plan Best In Class CRM & Loyalty Program Net Positive Unit Growth Stronger ROI from Investments in Food, Technology & Restaurant Image Enhanced Long-Term Cash Flow Generation Higher Total Shareholder Return

 
Q&A

 

 
Appendix

 
136 RECONCILIATION OF NET INCOME (LOSS) TO NON-GAAP FINANCIAL MEASURES $ Millions 2018 2019 20201 2021 2022 2023 YTD Sep 2024 Net Income (Loss) $43.7 $117.4 ($5.1) $78.1 $74.7 $19.9 $14.8 Provision for (Benefit from) Income Taxes 8.6 31.8 (2.0) 26.0 24.7 7.0 4.2 Goodwill Impairment Charges - - - - - 6.4 0.0 Operating (Gains) Losses and Other Charges, Net 2.6 (91.2) 1.8 (46.1) (1.0) 2.5 2.0 Other Nonoperating Expense (Income), Net 0.6 (2.8) (4.2) (15.2) (52.6) 8.3 (1.7) Share‐Based Compensation Expense 6.0 6.7 7.9 13.6 11.4 8.9 8.4 Deferred Compensation Plan Valuation Adjustments (1.0) 2.6 1.6 2.1 (2.2) 1.9 1.4 Interest Expense, Net 20.7 18.5 18.0 15.1 13.8 17.6 13.6 Depreciation and Amortization 27.0 19.8 16.2 15.4 14.9 14.4 10.9 Legal Settlement Expenses 0.3 1.1 0.5 2.1 4.2 2.3 1.8 Pre-Opening Expenses 0.1 0.0 - - - 0.3 0.8 COVID-19 Related Expenses - - 3.5 (1.4) - - - Leadership Transition Costs - - - - 0.3 - - Acquisition Costs - - - - 0.6 - - Other Adjustments 0.2 (0.0) 0.0 - (0.1) (0.1) 2.5 Adjusted EBITDA $108.8 $104.0 $38.2 $89.8 $88.8 $89.4 $58.7 Adjusted EBITDA Margin % 17.3% 19.2% 13.0% 22.6% 19.4% 19.3% 17.4% Net Income (Loss) $43.7 $117.4 ($5.1) $78.1 $74.7 $19.9 $14.8 (Gains) Losses and Amort. on Interest Rate Swap Derivatives, Net - - (2.2) (12.6) (55.0) 11.0 0.5 Losses (Gains) on Sales of Assets and Other, Net (0.5) (93.6) (4.7) (47.8) (3.4) (2.2) (0.1) Impairment Charges2 1.6 - 4.1 0.4 1.0 8.6 0.8 Legal Settlement Expenses 0.3 1.1 0.5 2.1 4.2 2.3 1.8 Pre-Opening Expenses 0.1 0.0 - - - 0.3 0.8 COVID-19 Related Expenses - - 3.5 (1.4) - - - Leadership Transition Costs - - - - 0.3 - - Acquisition Costs - - - - 0.6 - - Other Adjustments 0.2 (0.0) 0.0 - (0.1) (0.1) 2.5 Tax Effect3 (0.3) 23.8 (0.3) 14.8 13.0 (5.0) (1.4) Adjusted Net Income (Loss) $45.0 $48.6 ($4.2) $33.6 $35.4 $34.8 $19.7 Net Income (Loss) Per Share - Diluted $0.67 $1.90 ($0.08) $1.19 $1.23 $0.35 $0.28 Adjustments Per Share $0.02 ($1.11) $0.01 ($0.68) ($0.65) $0.27 $0.09 Adjusted Net Income (Loss) Per Share $0.69 $0.79 ($0.07) $0.51 $0.58 $0.62 $0.37 Diluted Weighted Average Shares Outstanding (000’s) 65,562 61,833 60,812 65,573 60,879 56,196 52,739 1. Includes 53 operating weeks. 2. Impairment charges include goodwill impairment charges of $6.4 million and less than $0.1 million for full year 2023 and for year-to-date period ended June 26, 2024, respectively. 3. Tax adjustments for full year 2018, 2019, 2020, 2021, 2022, 2023 and year-to-date period ended September 25, 2024 reflect an effective tax rate of 16.4%, 25.7%, 25.6%, 25.0%, 24.9%, 25.0% and 22.2%, respectively.

 
137 RECONCILIATION OF OPERATING INCOME TO NON-GAAP FINANCIAL MEASURES 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. See most recent press release for a further breakdown of adjusted restaurant-level operating margin. $ Millions 2018 2019 20201 2021 2022 2023 YTD Sep 2024 Operating Income $73.6 $165.0 $6.7 $104.1 $60.6 $52.8 $30.9 General and Administrative Expenses 63.8 69.0 55.0 68.7 67.2 77.8 61.5 Depreciation and Amortization 27.0 19.8 16.2 15.4 14.9 14.4 10.9 Goodwill Impairment Charges - - - - - 6.4 0.0 Operating (Gains) Losses and Other Charges, Net 2.6 (91.2) 1.8 (46.1) (1.0) 2.5 2.0 Restaurant-Level Operating Margin $167.1 $162.7 $79.7 $142.1 $141.6 $153.9 $105.3 Restaurant-Level Operating Margin Consists Of: Company Restaurant Operating Margin (2) 63.2 48.0 3.6 28.1 20.3 27.9 16.9 Franchise Operating Margin (3) 104.0 114.7 76.1 114.0 121.3 125.9 88.5 Restaurant-Level Operating Margin $167.1 $162.7 $79.7 $142.1 $141.6 $153.9 $105.3 Adjustments (4) 0.6 1.1 6.4 1.3 4.2 2.5 5.1 Adjusted Restaurant-Level Operating Margin $167.7 $163.7 $86.1 $143.4 $145.8 $156.4 $110.5 Adjusted Restaurant-Level Operating Margin Consists Of: Adjusted Company Restaurant Operating Margin 63.5 49.0 2.6 30.4 24.5 30.5 19.5 Adjusted Franchise Operating Margin 104.1 114.7 83.6 112.9 121.3 125.9 91.0 Adjusted Restaurant-Level Operating Margin $167.7 $163.7 $86.1 $143.4 $145.8 $156.4 $110.5 1. Includes 53 operating weeks. 2. 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. 3. 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. 4. Adjustments include 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 quarter and year-to-date period ended September 25, 2024 include a $2.6 million distribution to franchisees related to a review of advertising costs.

 
v3.24.3
Cover Page
Oct. 22, 2024
Cover [Abstract]  
Document Type 8-K
Document Period End Date Oct. 22, 2024
Entity Registrant Name DENNY’S CORPORATION
Entity Central Index Key 0000852772
Amendment Flag false
Entity Incorporation, State or Country Code DE
Entity File Number 0-18051
Entity Tax Identification Number 13-3487402
Entity Address, Address Line One 203 East Main Street
Entity Address, City or Town Spartanburg
Entity Address, State or Province SC
Entity Address, Postal Zip Code 29319-0001
City Area Code 864
Local Phone Number 597-8000
Entity Information, Former Legal or Registered Name Not Applicable
Written Communications false
Soliciting Material false
Pre-commencement Tender Offer false
Pre-commencement Issuer Tender Offer false
Title of 12(b) Security $.01 Par Value, Common Stock
Trading Symbol DENN
Security Exchange Name NASDAQ
Entity Emerging Growth Company false
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