Cover Page
Cover Page - shares | 3 Months Ended | |
Mar. 30, 2022 | Apr. 28, 2022 | |
Cover [Abstract] | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Mar. 30, 2022 | |
Document Transition Report | false | |
Entity File Number | 0-18051 | |
Entity Registrant Name | DENNY’S CORPORATION | |
Entity Incorporation, State or Country Code | DE | |
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 | |
Title of 12(b) Security | $.01 Par Value, Common Stock | |
Trading Symbol | DENN | |
Security Exchange Name | NASDAQ | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Large Accelerated Filer | |
Entity Small Business | false | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 61,712,452 | |
Entity Central Index Key | 0000852772 | |
Current Fiscal Year End Date | --12-28 | |
Document Fiscal Year Focus | 2022 | |
Document Fiscal Period Focus | Q1 | |
Amendment Flag | false |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) shares in Thousands, $ in Thousands | Mar. 30, 2022 | Dec. 29, 2021 |
Current assets: | ||
Cash and cash equivalents | $ 6,091 | $ 30,624 |
Investments | 3,687 | 2,551 |
Receivables, net | 23,161 | 19,621 |
Inventories | 9,829 | 5,060 |
Assets held for sale | 1,322 | 0 |
Prepaid and other current assets | 7,941 | 11,393 |
Total current assets | 52,031 | 69,249 |
Property, net of accumulated depreciation of $150,914 and $151,836, respectively | 89,878 | 91,176 |
Financing lease right-of-use assets, net of accumulated amortization of $9,772 and $11,210, respectively | 7,399 | 7,709 |
Operating lease right-of-use assets, net | 125,012 | 128,727 |
Goodwill | 36,884 | 36,884 |
Intangible assets, net | 49,892 | 50,226 |
Deferred financing costs, net | 2,813 | 2,971 |
Deferred income taxes, net | 5,139 | 11,502 |
Other noncurrent assets | 32,346 | 37,083 |
Total assets | 401,394 | 435,527 |
Current liabilities: | ||
Current finance lease liabilities | 1,962 | 1,952 |
Current operating lease liabilities | 15,406 | 15,829 |
Accounts payable | 12,998 | 15,595 |
Other current liabilities | 48,524 | 64,146 |
Total current liabilities | 78,890 | 97,522 |
Long-term liabilities: | ||
Long-term debt | 171,500 | 170,000 |
Noncurrent finance lease liabilities | 10,374 | 10,744 |
Noncurrent operating lease liabilities | 122,470 | 126,296 |
Liability for insurance claims, less current portion | 7,860 | 8,438 |
Other noncurrent liabilities | 58,055 | 87,792 |
Total long-term liabilities | 370,259 | 403,270 |
Total liabilities | 449,149 | 500,792 |
Shareholders' deficit | ||
Common stock $0.01 par value; 135,000 shares authorized; March 30, 2022: 64,457 shares issued and 61,713 outstanding; December 29, 2021: 64,200 shares issued and 62,210 shares outstanding | 645 | 642 |
Paid-in capital | 137,332 | 135,596 |
Deficit | (94,586) | (116,441) |
Accumulated other comprehensive loss, net | (48,689) | (54,470) |
Treasury stock, at cost, 2,744 and 1,990 shares, respectively | (42,457) | (30,592) |
Total shareholders' deficit | (47,755) | (65,265) |
Total liabilities and shareholders' deficit | $ 401,394 | $ 435,527 |
Common stock, shares outstanding (in shares) | 61,713 | 62,210 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Thousands | Mar. 30, 2022 | Dec. 29, 2021 |
Assets | ||
Accumulated depreciation | $ 150,914 | $ 151,836 |
Accumulated amortization | $ 9,772 | $ 11,210 |
Shareholders' deficit | ||
Common stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Common stock, shares authorized (in shares) | 135,000,000 | 135,000,000 |
Common stock, shares issued (in shares) | 64,457,000 | 64,200,000 |
Common stock, shares outstanding (in shares) | 61,713,000 | 62,210,000 |
Treasury stock, at cost, shares (in shares) | 2,744,000 | 1,990,000 |
Consolidated Statements of Oper
Consolidated Statements of Operations - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | |
Mar. 30, 2022 | Mar. 31, 2021 | |
Revenue: | ||
Total operating revenue | $ 103,107 | $ 80,576 |
Costs of company restaurant sales, excluding depreciation and amortization: | ||
Product costs | 11,244 | 8,272 |
Payroll and benefits | 17,086 | 12,965 |
Occupancy | 3,240 | 2,850 |
Other operating expenses | 7,055 | 6,077 |
Total costs of company restaurant sales | 38,625 | 30,164 |
Costs of franchise and license revenue, excluding depreciation and amortization | 30,669 | 23,758 |
General and administrative expenses | 16,958 | 16,947 |
Depreciation and amortization | 3,548 | 3,661 |
Operating (gains), losses and other charges, net | 0 | 532 |
Total operating costs and expenses, net | 89,800 | 75,062 |
Operating income | 13,307 | 5,514 |
Interest expense, net | 2,960 | 4,277 |
Other nonoperating income, net | (19,615) | (30,048) |
Income before income taxes | 29,962 | 31,285 |
Provision for income taxes | 8,107 | 8,104 |
Net income | $ 21,855 | $ 23,181 |
Net income per share - basic (in dollars per share) | $ 0.35 | $ 0.36 |
Net income per share - diluted (in dollars per share) | $ 0.34 | $ 0.35 |
Basic weighted average shares outstanding (in shares) | 63,343 | 65,251 |
Diluted weighted average shares outstanding (in shares) | 63,580 | 65,749 |
Company restaurant sales | ||
Revenue: | ||
Total operating revenue | $ 43,976 | $ 33,569 |
Franchise and license revenue | ||
Revenue: | ||
Total operating revenue | $ 59,131 | $ 47,007 |
Consolidated Statements of Comp
Consolidated Statements of Comprehensive Income - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 30, 2022 | Mar. 31, 2021 | |
Statement of Comprehensive Income [Abstract] | ||
Net income | $ 21,855 | $ 23,181 |
Other comprehensive income, net of tax: | ||
Minimum pension liability adjustment, net of tax of $8 and $10, respectively | 24 | 30 |
Changes in the fair value of cash flow derivatives, net of tax of $1,673 and $763, respectively | 5,015 | 2,215 |
Reclassification of cash flow derivatives to interest expense, net of tax of $248 and $255, respectively | 742 | 740 |
Amortization of unrealized losses related to dedesignated derivatives to interest expense, net of tax of $0 and $31, respectively | 0 | 90 |
Other comprehensive income | 5,781 | 3,075 |
Total comprehensive income | $ 27,636 | $ 26,256 |
Consolidated Statements of Co_2
Consolidated Statements of Comprehensive Income (Loss) (Parenthetical) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 30, 2022 | Mar. 31, 2021 | |
Statement of Comprehensive Income [Abstract] | ||
Tax effect of minimum pension liability adjustment | $ 8 | $ 10 |
Changes in fair value of cash flow derivatives, tax | 1,673 | 763 |
Reclassification of cash flow derivatives to interest expense, tax | 248 | 255 |
Reclassification of unrealized losses related to derivatives to interest expense, tax | $ 0 | $ 31 |
Consolidated Statements of Shar
Consolidated Statements of Shareholders' Deficit - USD ($) shares in Thousands, $ in Thousands | Total | Common Stock | Treasury Stock | Paid-in Capital | Deficit | Accumulated Other Comprehensive Loss, Net |
Balance as of beginning of period (in shares) at Dec. 30, 2020 | 63,962 | |||||
Balance as of beginning of period at Dec. 30, 2020 | $ (130,446) | $ 640 | $ 0 | $ 123,833 | $ (194,514) | $ (60,405) |
Balance as of beginning of period, treasury stock (in shares) at Dec. 30, 2020 | 0 | |||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Net income | 23,181 | 23,181 | ||||
Other comprehensive income | 3,075 | 3,075 | ||||
Share-based compensation on equity classified awards, net of withholding tax | 2,002 | 2,002 | ||||
Issuance of common stock for share-based compensation (in shares) | 153 | |||||
Issuance of common stock for share-based compensation | 0 | $ 1 | (1) | |||
Exercise of common stock options (in shares) | 30 | |||||
Exercise of common stock options | 116 | 116 | ||||
Balance as of end of period (in shares) at Mar. 31, 2021 | 64,145 | |||||
Balance as of end of period at Mar. 31, 2021 | $ (102,072) | $ 641 | $ 0 | 125,950 | (171,333) | (57,330) |
Balance as of end of period, treasury stock (in shares) at Mar. 31, 2021 | 0 | |||||
Balance as of beginning of period (in shares) at Dec. 29, 2021 | 64,200 | 64,200 | ||||
Balance as of beginning of period at Dec. 29, 2021 | $ (65,265) | $ 642 | $ (30,592) | 135,596 | (116,441) | (54,470) |
Balance as of beginning of period, treasury stock (in shares) at Dec. 29, 2021 | (1,990) | (1,990) | ||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Net income | $ 21,855 | 21,855 | ||||
Other comprehensive income | 5,781 | 5,781 | ||||
Share-based compensation on equity classified awards, net of withholding tax | $ 1,739 | 1,739 | ||||
Purchase of treasury stock (in shares) | (800) | (754) | ||||
Purchase of treasury stock | $ (11,865) | $ (11,865) | ||||
Issuance of common stock for share-based compensation (in shares) | 257 | |||||
Issuance of common stock for share-based compensation | $ 0 | $ 3 | (3) | |||
Balance as of end of period (in shares) at Mar. 30, 2022 | 64,457 | 64,457 | ||||
Balance as of end of period at Mar. 30, 2022 | $ (47,755) | $ 645 | $ (42,457) | $ 137,332 | $ (94,586) | $ (48,689) |
Balance as of end of period, treasury stock (in shares) at Mar. 30, 2022 | (2,744) | (2,744) |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 30, 2022 | Mar. 31, 2021 | |
Cash flows from operating activities: | ||
Net income | $ 21,855 | $ 23,181 |
Adjustments to reconcile net income to cash flows provided by (used in) operating activities: | ||
Depreciation and amortization | 3,548 | 3,661 |
Operating (gains), losses and other charges, net | 0 | 532 |
Gains and amortization on interest rate swap derivatives, net | (20,253) | (29,733) |
Amortization of deferred financing costs | 158 | 344 |
Losses on investments | 65 | 8 |
Losses on early termination of debt and leases | 24 | 34 |
Deferred income tax expense | 4,436 | 4,099 |
Share-based compensation expense | 4,015 | 3,472 |
Changes in assets and liabilities: | ||
Receivables | (3,567) | 353 |
Inventories | (4,768) | 13 |
Prepaids and other current assets | 3,451 | 5,294 |
Other noncurrent assets | 4,085 | (201) |
Operating lease assets and liabilities | (244) | (604) |
Accounts payable | (2,405) | 1,820 |
Accrued payroll | (7,475) | (1,704) |
Accrued taxes | (1) | (380) |
Other accrued liabilities | (7,488) | 1,195 |
Other noncurrent liabilities | (2,500) | (1,149) |
Net cash flows provided by (used in) operating activities | (7,064) | 10,235 |
Cash flows from investing activities: | ||
Capital expenditures | (2,778) | (1,583) |
Proceeds from sales of restaurants, real estate and other assets | 108 | 1,348 |
Investment purchases | (1,200) | 0 |
Proceeds from sale of investments | 0 | 200 |
Collections on notes receivable | 67 | 215 |
Net cash flows provided by (used in) investing activities | (3,803) | 180 |
Cash flows from financing activities: | ||
Revolver borrowings | 13,825 | 7,500 |
Revolver payments | (12,325) | (2,500) |
Long-term debt payments | (503) | (473) |
Proceeds from exercise of stock options | 0 | 116 |
Tax withholding on share-based payments | (2,165) | (1,309) |
Deferred financing costs | 0 | (8) |
Purchase of treasury stock | (12,498) | 0 |
Net bank overdrafts | 0 | (3,125) |
Net cash flows provided by (used in) financing activities | (13,666) | 201 |
Increase (decrease) in cash and cash equivalents | (24,533) | 10,616 |
Cash and cash equivalents at beginning of period | 30,624 | 3,892 |
Cash and cash equivalents at end of period | $ 6,091 | $ 14,508 |
Introduction and Basis of Prese
Introduction and Basis of Presentation | 3 Months Ended |
Mar. 30, 2022 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Introduction and Basis of Presentation | Introduction and Basis of Presentation Denny’s Corporation, or Denny’s or the Company, is one of America’s largest full-service restaurant chains based on number of restaurants. At March 30, 2022, the Denny's brand consisted of 1,634 restaurants, 1,569 of which were franchised/licensed restaurants and 65 of which were company operated. The global crisis resulting from the spread of coronavirus ("COVID-19") has had a substantial impact on our restaurant operations starting in the quarter ended March 25, 2020 with continuing impacts into the current quarter ended March 30, 2022. While we have seen improvements compared to earlier periods during the COVID-19 pandemic, we cannot currently estimate the duration or future financial impact of the COVID-19 pandemic on our business. Ongoing material adverse effects of the COVID-19 pandemic for an extended period could negatively affect our business, results of operations, liquidity and financial condition and could impact our impairment assessments of accounts receivable, intangible assets, long-lived assets and goodwill. Our unaudited consolidated financial statements have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission. Therefore, certain information and notes normally included in financial statements prepared in accordance with U.S. generally accepted accounting principles (“GAAP”) have been condensed or omitted. In our opinion, all adjustments considered necessary for a fair presentation of the interim periods presented have been included. Such adjustments are of a normal and recurring nature. The preparation of these financial statements requires us to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses, and related disclosure of contingent assets and liabilities. Actual results may differ from these estimates under different assumptions or conditions; however, we believe that our estimates are reasonable. These interim consolidated financial statements should be read in conjunction with our consolidated financial statements and notes thereto as of and for the fiscal year ended December 29, 2021 which are contained in our audited Annual Report on Form 10-K for the fiscal year ended December 29, 2021. The results of operations for the interim periods presented are not necessarily indicative of the results for the entire fiscal year ending December 28, 2022. Our significant interim accounting policies include the recognition of advertising and marketing costs, generally in proportion to revenue, and the recognition of income taxes using an estimated annual effective rate. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 3 Months Ended |
Mar. 30, 2022 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | Summary of Significant Accounting Policies Newly Adopted Accounting Standards In March 2020, the FASB issued ASU 2020-04, “Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting” which was later clarified in January 2021 by ASU 2021-01, “Reference Rate Reform (Topic 848): Scope”. The guidance provides optional guidance, for a limited time, to ease the potential burden in accounting for or recognizing the effects of reference rate reform on financial reporting. The Company adopted ASU 2020-04 on March 12, 2020. The adoption of and future elections under this new guidance did not and are not expected to have a material impact on the Company’s consolidated financial position or results of operations. The guidance is effective through December 31, 2022. Accounting Standards to be Adopted We reviewed all other newly issued accounting pronouncements and concluded that they are either not applicable to our business or are not expected to have a material effect on our consolidated financial statements as a result of future adoption. |
Receivables
Receivables | 3 Months Ended |
Mar. 30, 2022 | |
Receivables [Abstract] | |
Receivables | Receivables Receivables consisted of the following: March 30, 2022 December 29, 2021 (In thousands) Receivables, net: Trade accounts receivable from franchisees $ 12,897 $ 13,430 Financing receivables from franchisees 2,811 1,027 Vendor receivables 2,803 4,041 Credit card receivables 625 747 Other 4,574 950 Allowance for doubtful accounts (549) (574) Total receivables, net $ 23,161 $ 19,621 Other noncurrent assets: Financing receivables from franchisees $ 252 $ 293 |
Intangible Assets
Intangible Assets | 3 Months Ended |
Mar. 30, 2022 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Intangible Assets | Intangible Assets Intangible assets consisted of the following: March 30, 2022 December 29, 2021 Gross Carrying Amount Accumulated Amortization Gross Carrying Amount Accumulated Amortization (In thousands) Intangible assets with indefinite lives: Trade names $ 44,087 $ — $ 44,087 $ — Liquor licenses 120 — 120 — Intangible assets with definite lives: Reacquired franchise rights 11,801 6,116 12,218 6,199 Intangible assets, net $ 56,008 $ 6,116 $ 56,425 $ 6,199 |
Other Current Liabilities
Other Current Liabilities | 3 Months Ended |
Mar. 30, 2022 | |
Other Liabilities, Current [Abstract] | |
Other Current Liabilities | Other Current Liabilities Other current liabilities consisted of the following: March 30, 2022 December 29, 2021 (In thousands) Accrued payroll $ 13,232 $ 20,676 Current portion of liability for insurance claims 3,947 4,285 Accrued taxes 4,532 4,533 Accrued advertising 9,538 15,355 Gift cards 5,818 7,170 Other 11,457 12,127 Other current liabilities $ 48,524 $ 64,146 |
Fair Value of Financial Instrum
Fair Value of Financial Instruments | 3 Months Ended |
Mar. 30, 2022 | |
Fair Value Disclosures [Abstract] | |
Fair Value of Financial Instruments | Fair Value of Financial Instruments Financial assets and liabilities measured at fair value on a recurring basis are summarized below: Total Quoted Prices in Active Markets for Identical Assets/Liabilities Significant Other Observable Inputs Significant Unobservable Inputs (In thousands ) Fair value measurements as of March 30, 2022: Deferred compensation plan investments (1) $ 12,925 $ 12,925 $ — $ — Interest rate swaps, net (2) (23,264) — (23,264) — Investments (3) 3,687 — 3,687 — Total $ (6,652) $ 12,925 $ (19,577) $ — Fair value measurements as of December 29, 2021: Deferred compensation plan investments (1) $ 13,726 $ 13,726 $ — $ — Interest rate swaps (2) (52,121) — (52,121) — Investments (3) 2,551 — 2,551 — Total $ (35,844) $ 13,726 $ (49,570) $ — (1) The fair values of our deferred compensation plan investments are based on the closing market prices of the elected investments and are included in other noncurrent assets in our Consolidated Balance Sheets. (2) The fair values of our interest rate swaps are based upon Level 2 inputs, which include valuation models. The key inputs for the valuation models are quoted market prices, interest rates and forward yield curves. See Note 7 for details on the interest rate swaps. (3) The fair values of our investments are valued using a readily determinable net asset value per share based on the fair value of the underlying securities. There are no significant redemption restrictions associated with these investments. The carrying amounts of cash and cash equivalents, receivables, accounts payable and accrued expenses are deemed to approximate fair value due to the immediate or short-term maturity of these instruments. The fair value of notes receivable approximates the carrying value after consideration of recorded allowances and related risk-based interest rates. The outstanding senior secured revolver is carried at historical cost, which approximates fair value. The fair value of our senior secured revolver approximates its carrying value since it is a variable rate facility (Level 2). |
Long-Term Debt
Long-Term Debt | 3 Months Ended |
Mar. 30, 2022 | |
Debt Disclosure [Abstract] | |
Long-Term Debt | Long-Term Debt Denny's and certain of its subsidiaries have a credit facility consisting of a five-year $400 million senior secured revolver (with a $25 million letter of credit sublimit). The credit facility includes an accordion feature that would allow us to increase the size of the facility to $450 million. Borrowings bear a tiered interest rate, which is based on the Company's consolidated leverage ratio. The maturity date for the credit facility is August 26, 2026. The credit facility is available for working capital, capital expenditures and other general corporate purposes. The credit facility is guaranteed by Denny's and its material subsidiaries and is secured by assets of Denny's and its subsidiaries, including the stock of its subsidiaries (other than its insurance captive subsidiary). It includes negative covenants that are usual for facilities and transactions of this type. The credit facility also includes certain financial covenants with respect to a maximum consolidated leverage ratio and a minimum consolidated fixed charge coverage ratio. We were in compliance with all financial covenants as of March 30, 2022. As of March 30, 2022, we had outstanding revolver loans of $171.5 million and outstanding letters of credit under the credit facility of $15.7 million. These balances resulted in unused commitments of $212.8 million as of March 30, 2022 under the credit facility. As of March 30, 2022, borrowings under the credit facility bore interest at a rate of LIBOR plus 1.75% and the commitment fee, paid on the unused portion of the credit facility, was set to 0.25%. Prior to considering the impact of our interest rate swaps, described below, the weighted-average interest rate on outstanding revolver loans was 1.98% and 2.09% as of March 30, 2022 and December 29, 2021, respectively. Taking into consideration our interest rate swaps that are designated as cash flow hedges, the weighted-average interest rate of outstanding revolver loans was 4.19% and 4.44% as of March 30, 2022 and December 29, 2021, respectively. Interest Rate Hedges We have receive-variable, pay-fixed interest rate swaps to hedge the forecasted cash flows of our floating rate debt. We initially designated the interest rate swaps as cash flow hedges of our exposure to variability in future cash flows attributable to variable interest payments due on forecasted notional amounts. A summary of our interest rate swaps as of March 30, 2022 is as follows: Trade Date Effective Date Maturity Date Notional Amount Fair Value Fixed Rate (In thousands) Swaps designated as cash flow hedges March 20, 2015 March 29, 2018 March 31, 2025 $ 120,000 $ 104 2.44 % October 1, 2015 March 29, 2018 March 31, 2026 $ 50,000 $ (59) 2.46 % Dedesignated swaps February 15, 2018 March 31, 2020 December 31, 2033 $ 120,000 (1) $ (23,309) 3.19 % Total $ 290,000 $ (23,264) (1) The notional amounts of the swaps entered into on February 15, 2018 increase periodically until they reach the maximum notional amount of $425.0 million on September 28, 2029. Swaps Designated as Cash Flow Hedges To the extent the swaps are highly effective in offsetting the variability of the hedged cash flows, changes in the fair value of the swaps are not included in the Consolidated Statements of Operations but are reported as a component of other comprehensive income. The interest rate swaps entered into in 2015 are designated as cash flow hedges with unrealized gain and losses recorded as a component of accumulated other comprehensive loss, net. As of March 30, 2022, the fair value of the swaps designated as cash flow hedges was a net asset of less than $0.1 million. One was recorded as an asset of $0.1 million as a component of other noncurrent assets and the other as a liability of $0.1 million as a component of other noncurrent liabilities. The designated swaps have an offsetting amount (before taxes) recorded as a component of accumulated other comprehensive loss, net in our Consolidated Balance Sheets. See Note 13 for amounts recorded in accumulated other comprehensive loss related to interest rate swaps. We expect to reclassify approximately $3.4 million from accumulated other comprehensive loss, net to interest expense, net in our Consolidated Statements of Operations related to swaps designated as cash flow hedges during the next twelve months. Dedesignated Interest Rate Hedges During the year ended December 30, 2020, we determined that a portion of the underlying cash flows related to our hedging relationship entered into in 2018 (“2018 Swaps”) were no longer probable of occurring over the term of the interest rate swaps. Accordingly, we dedesignated the cash flow relationship and discontinued hedge accounting treatment for the 2018 Swaps. As a result, we reclassified a portion of losses from accumulated other comprehensive loss, net to other nonoperating income, net in our Consolidated Statements of Operations and began amortizing the remaining amounts of unrealized losses related to the 2018 Swaps from accumulated other comprehensive loss, net into our Consolidated Statements of Operations as a component of interest expense, net over the remaining term of the 2018 Swaps. For the quarter ended March 30, 2022, no unrealized losses were reclassified to interest expense, net related to the 2018 Swaps. For the quarter ended March 31, 2021, we reclassified unrealized losses of approximately $0.1 million to interest expense, net related to the 2018 Swaps. At March 30, 2022, approximately $64.2 million (before taxes) of unrealized losses remained in accumulated other comprehensive loss, net. We expect to amortize less than $0.1 million from accumulated other comprehensive loss, net to interest expense, net in our Consolidated Statements of Operations related to dedesignated interest rate swaps during the next twelve months. |
Revenues
Revenues | 3 Months Ended |
Mar. 30, 2022 | |
Revenue from Contract with Customer [Abstract] | |
Revenues | Revenues Our revenues are derived primarily from two sales channels, which we operate as one segment: company restaurants and franchised and licensed restaurants. The following table disaggregates our revenue by sales channel and type of good or service: Quarter Ended March 30, 2022 March 31, 2021 (In thousands) Company restaurant sales $ 43,976 $ 33,569 Franchise and license revenue: Royalties 26,525 20,844 Advertising revenue 18,206 14,111 Initial and other fees 4,507 1,838 Occupancy revenue 9,893 10,214 Franchise and license revenue 59,131 47,007 Total operating revenue $ 103,107 $ 80,576 Franchise occupancy revenue consisted of the following: Quarter Ended March 30, 2022 March 31, 2021 (In thousands) Operating lease revenue $ 7,418 $ 7,913 Variable lease revenue 2,475 2,301 Total occupancy revenue $ 9,893 $ 10,214 Balances related to contracts with customers consist of receivables, deferred franchise revenue and deferred gift card revenue. See Note 3 for details on our receivables. The components of the change in deferred franchise revenue are as follows: (In thousands) Balance, December 29, 2021 $ 19,896 Fees received from franchisees 1,199 Franchisee deferred costs (1) (626) Revenue recognized, net (2) (739) Balance, March 30, 2022 19,730 Less current portion included in other current liabilities 1,928 Deferred franchise revenue included in other noncurrent liabilities $ 17,802 (1) Deferred costs are contract assets consisting of incentives given to franchisees related to the rollout of kitchen equipment to all franchise locations. (2) Of this amount $0.6 million was included in the deferred franchise revenue balance as of December 29, 2021. Deferred franchise revenue consists primarily of the unamortized portion of initial franchise fees that are currently being amortized into revenue and amounts related to development agreements and unopened restaurants that we will begin amortizing into revenue when the related restaurants are opened net of certain deferred costs. Deferred franchise revenue represents our remaining performance obligations to our franchisees, excluding amounts of variable consideration related to sales-based royalties and advertising. The Company has entered into equipment purchase contracts of approximately $18.3 million related to the rollout of kitchen equipment for franchise restaurants, which will be paid by the franchisees as the equipment is installed, less approximately $5.7 million in commitments from the Company. Amounts committed from the Company are contract assets that have been netted against deferred revenue and will be recognized as a component of franchise and license revenue over the remaining term of the related franchise agreement. At March 30, 2022, our remaining obligation under these contracts was approximately $9.2 million, $1.6 million of which is included in accounts payable. At March 30, 2022, we had approximately $8.4 million in inventory and $0.7 million in contract assets related to the kitchen equipment rollout. Deferred gift card liabilities consist of the unredeemed portion of gift cards sold in company restaurants and at third party locations. The balance of deferred gift card liabilities represents our remaining performance obligations to our customers. The balance of deferred gift card liabilities as of March 30, 2022 and December 29, 2021 was $5.8 million and $7.2 million, respectively. During the quarter ended March 30, 2022, we recognized revenue of $0.2 million from gift card redemptions at company restaurants. |
Operating (Gains), Losses and O
Operating (Gains), Losses and Other Charges, Net | 3 Months Ended |
Mar. 30, 2022 | |
Other Income and Expenses [Abstract] | |
Operating (Gains), Losses and Other Charges, Net | Operating (Gains), Losses and Other Charges, Net Operating (gains), losses and other charges, net consisted of the following: Quarter Ended March 30, 2022 March 31, 2021 (In thousands) Gains on sales of assets and other, net $ (146) $ (942) Restructuring charges and exit costs 146 1,474 Operating (gains), losses and other charges, net $ — $ 532 As of March 30, 2022, we had recorded assets held for sale at their carrying amount of $1.3 million (consisting of property of $1.0 million and other assets of $0.3 million) related to three parcels of real estate. There were no assets held for sale recorded as of December 29, 2021. Restructuring charges and exit costs consisted of the following: Quarter Ended March 30, 2022 March 31, 2021 (In thousands) Exit costs $ 12 $ 82 Severance and other restructuring charges 134 1,392 Total restructuring charges and exit costs $ 146 $ 1,474 Exit costs primarily consist of costs related to closed restaurants. Exit cost liabilities related to lease costs are included as a component of operating lease liabilities in our Consolidated Balance Sheets. As of March 30, 2022 and December 29, 2021, we had accrued severance and other restructuring charges of $0.1 million and $0.1 million, respectively. The balance as of March 30, 2022 is expected to be paid during the next 12 months. |
Share-Based Compensation
Share-Based Compensation | 3 Months Ended |
Mar. 30, 2022 | |
Share-based Payment Arrangement [Abstract] | |
Share-Based Compensation | Share-Based Compensation Total share-based compensation included as a component of general and administrative expenses was as follows: Quarter Ended March 30, 2022 March 31, 2021 (In thousands) Employee share awards $ 3,794 $ 3,253 Restricted stock units for board members 221 219 Total share-based compensation $ 4,015 $ 3,472 Employee Share Awards During the quarter ended March 30, 2022, we granted certain employees approximately 233,000 performance share units ("PSUs") with a grant date fair value of $24.51 per share that vest based on the total shareholder return (“TSR”) of our common stock compared to the TSRs of a group of peer companies and approximately 233,000 PSUs with a grant date fair value of $15.59 per share that vest based on our Adjusted EPS growth rate versus plan, as defined under the terms of the award. As the TSR based PSUs contain a market condition, a Monte Carlo valuation was used to determine the grant date fair value. The performance period for these PSUs is the three year fiscal period beginning December 30, 2021 and ending December 25, 2024. The PSUs will completely vest and be earned at the end of the performance period at which point the relative TSR and Adjusted EPS growth rate achievement percentages will be applied to the vested units (from 0% to 200% of the target award). We recognize compensation cost associated with approximately 312,000 of these PSU awards over the entire performance period on a straight-line basis, with compensation cost for the remaining 154,000 PSU awards recognized on a graded-vesting basis due to the accelerated vesting terms for certain retirement eligible individuals. We also granted certain employees approximately 310,000 restricted stock units ("RSUs") with a grant date fair value of $15.59 per share. The RSUs vest evenly over the three year fiscal period beginning December 30, 2021 and ending December 25, 2024. We recognize compensation cost associated with these RSU awards on a straight-line basis over the entire performance period of the award. During the quarter ended March 30, 2022, we issued 257,000 shares of common stock related to vested PSUs and RSUs. In addition, approximately 24,000 shares of common stock were deferred and approximately 136,000 shares of common stock were withheld in lieu of taxes related to vested PSUs and RSUs. As of March 30, 2022, we had approximately $22.9 million of unrecognized compensation cost related to unvested PSU awards and RSU awards outstanding, which have a weighted average remaining contractual term of 2.3 years. Restricted Stock Units for Board Members |
Income Taxes
Income Taxes | 3 Months Ended |
Mar. 30, 2022 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income TaxesThe effective income tax rate was 27.1% for the quarter ended March 30, 2022, compared to 25.9% for the prior year period. |
Net Income Per Share
Net Income Per Share | 3 Months Ended |
Mar. 30, 2022 | |
Earnings Per Share [Abstract] | |
Net Income Per Share | Net Income Per Share The amounts used for the basic and diluted net income per share calculations are summarized below: Quarter Ended March 30, 2022 March 31, 2021 (In thousands, except per share amounts) Net income $ 21,855 $ 23,181 Weighted average shares outstanding - basic 63,343 65,251 Effect of dilutive share-based compensation awards 237 498 Weighted average shares outstanding - diluted 63,580 65,749 Net income per share - basic $ 0.35 $ 0.36 Net income per share - diluted $ 0.34 $ 0.35 Anti-dilutive share-based compensation awards 829 273 |
Shareholders' Deficit
Shareholders' Deficit | 3 Months Ended |
Mar. 30, 2022 | |
Stockholders' Equity Attributable to Parent [Abstract] | |
Shareholders' Deficit | Shareholders' Deficit Share Repurchases Our credit facility permits the repurchase of Denny’s stock and the payment of cash dividends subject to certain limitations. Our Board of Directors approves share repurchases of our common stock. Under these authorizations, we may, from time to time, purchase shares in the open market (including pre-arranged stock trading plans in accordance with the guidelines specified in Rule 10b5-1 under the Securities Exchange Act of 1934, as amended) or in privately negotiated transactions, subject to market and business conditions. Currently, we are operating under a $250 million share repurchase authorization approved by the Board of Directors in December 2019. During the quarter ended March 30, 2022, we repurchased a total of 0.8 million shares of our common stock for approximately $11.9 million. This brings the total amount repurchased under the current authorization to approximately $44.5 million, leaving approximately $205.5 million that can be used to repurchase our common stock under this authorization as of March 30, 2022. Repurchased shares are included as treasury stock in our Consolidated Balance Sheets and our Consolidated Statement of Shareholders' Deficit. As of March 30, 2022, 2.7 million shares were held in treasury stock. Accumulated Other Comprehensive Loss, Net The components of the change in accumulated other comprehensive loss, net were as follows: Defined Benefit Plans Derivatives Accumulated Other Comprehensive Loss, Net (In thousands) Balance as of December 29, 2021 $ (900) $ (53,570) $ (54,470) Amortization of net loss (1) 32 — 32 Changes in the fair value of cash flow derivatives — 6,688 6,688 Reclassification of cash flow derivatives to interest expense, net (2) — 990 990 Income tax expense related to items of other comprehensive income (8) (1,921) (1,929) Balance as of March 30, 2022 $ (876) $ (47,813) $ (48,689) (1) Before-tax amount related to our defined benefit plans that was reclassified from accumulated other comprehensive loss, net and included as a component of pension expense within general and administrative expenses in our Consolidated Statements of Operations during the quarter ended March 30, 2022. (2) Amounts reclassified from accumulated other comprehensive loss, net into interest expense, net in our Consolidated Statements of Operations represent payments either received from or made to the counterparty for the interest rate swaps. See Note 7 for additional details. |
Commitments and Contingencies
Commitments and Contingencies | 3 Months Ended |
Mar. 30, 2022 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Commitments and ContingenciesLegal ProceedingsThere are various claims and pending legal actions against or indirectly involving us, incidental to and arising out of the ordinary course of the business. In the opinion of management, based upon information currently available, the ultimate liability with respect to these proceedings and claims will not materially affect our consolidated results of operations or financial position. |
Supplemental Cash Flow Informat
Supplemental Cash Flow Information | 3 Months Ended |
Mar. 30, 2022 | |
Supplemental Cash Flow Information [Abstract] | |
Supplemental Cash Flow Information | Supplemental Cash Flow Information Quarter Ended March 30, 2022 March 31, 2021 (In thousands) Income taxes paid, net $ 449 $ 421 Interest paid $ 2,849 $ 4,743 Noncash investing and financing activities: Issuance of common stock, pursuant to share-based compensation plans $ 4,081 $ 2,435 Execution of finance leases $ 133 $ — |
Subsequent Event
Subsequent Event | 3 Months Ended |
Mar. 30, 2022 | |
Subsequent Events [Abstract] | |
Subsequent Event | Subsequent Event On May 3, 2022, the Company entered into an Asset Purchase Agreement, by and between the Company, as purchaser, and K2 Restaurants, Inc. together with the other sellers and principals party thereto (the "Purchase Agreement") for the acquisition of certain assets and assumption of certain liabilities of the franchise business, Keke's Breakfast Cafe ("Keke's"), and eight Keke’s restaurants owned and operated by the sellers (the "Acquisition"). The Company anticipates that the Acquisition will close during the Company’s second fiscal quarter of 2022. The aggregate consideration payable to Keke's equityholders will be $82,500,000, payable in cash, subject to certain adjustments. The Company expects to fund the purchase price with a combination of cash on hand and funds available under its existing credit agreement. |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 3 Months Ended |
Mar. 30, 2022 | |
Accounting Policies [Abstract] | |
Newly Adopted Accounting Standards and Accounting Standards to be Adopted | Newly Adopted Accounting Standards In March 2020, the FASB issued ASU 2020-04, “Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting” which was later clarified in January 2021 by ASU 2021-01, “Reference Rate Reform (Topic 848): Scope”. The guidance provides optional guidance, for a limited time, to ease the potential burden in accounting for or recognizing the effects of reference rate reform on financial reporting. The Company adopted ASU 2020-04 on March 12, 2020. The adoption of and future elections under this new guidance did not and are not expected to have a material impact on the Company’s consolidated financial position or results of operations. The guidance is effective through December 31, 2022. Accounting Standards to be Adopted We reviewed all other newly issued accounting pronouncements and concluded that they are either not applicable to our business or are not expected to have a material effect on our consolidated financial statements as a result of future adoption. |
Receivables (Tables)
Receivables (Tables) | 3 Months Ended |
Mar. 30, 2022 | |
Receivables [Abstract] | |
Schedule of Receivables, Net | Receivables consisted of the following: March 30, 2022 December 29, 2021 (In thousands) Receivables, net: Trade accounts receivable from franchisees $ 12,897 $ 13,430 Financing receivables from franchisees 2,811 1,027 Vendor receivables 2,803 4,041 Credit card receivables 625 747 Other 4,574 950 Allowance for doubtful accounts (549) (574) Total receivables, net $ 23,161 $ 19,621 Other noncurrent assets: Financing receivables from franchisees $ 252 $ 293 |
Intangible Assets (Tables)
Intangible Assets (Tables) | 3 Months Ended |
Mar. 30, 2022 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of Indefinite-Lived Intangible Assets | Intangible assets consisted of the following: March 30, 2022 December 29, 2021 Gross Carrying Amount Accumulated Amortization Gross Carrying Amount Accumulated Amortization (In thousands) Intangible assets with indefinite lives: Trade names $ 44,087 $ — $ 44,087 $ — Liquor licenses 120 — 120 — Intangible assets with definite lives: Reacquired franchise rights 11,801 6,116 12,218 6,199 Intangible assets, net $ 56,008 $ 6,116 $ 56,425 $ 6,199 |
Schedule of Finite-Lived Intangible Assets | Intangible assets consisted of the following: March 30, 2022 December 29, 2021 Gross Carrying Amount Accumulated Amortization Gross Carrying Amount Accumulated Amortization (In thousands) Intangible assets with indefinite lives: Trade names $ 44,087 $ — $ 44,087 $ — Liquor licenses 120 — 120 — Intangible assets with definite lives: Reacquired franchise rights 11,801 6,116 12,218 6,199 Intangible assets, net $ 56,008 $ 6,116 $ 56,425 $ 6,199 |
Other Current Liabilities (Tabl
Other Current Liabilities (Tables) | 3 Months Ended |
Mar. 30, 2022 | |
Other Liabilities, Current [Abstract] | |
Schedule of Other Current Liabilities | Other current liabilities consisted of the following: March 30, 2022 December 29, 2021 (In thousands) Accrued payroll $ 13,232 $ 20,676 Current portion of liability for insurance claims 3,947 4,285 Accrued taxes 4,532 4,533 Accrued advertising 9,538 15,355 Gift cards 5,818 7,170 Other 11,457 12,127 Other current liabilities $ 48,524 $ 64,146 |
Fair Value of Financial Instr_2
Fair Value of Financial Instruments (Tables) | 3 Months Ended |
Mar. 30, 2022 | |
Fair Value Disclosures [Abstract] | |
Schedule of Financial Assets and Liabilities Measured at Fair Value on a Recurring Basis | Financial assets and liabilities measured at fair value on a recurring basis are summarized below: Total Quoted Prices in Active Markets for Identical Assets/Liabilities Significant Other Observable Inputs Significant Unobservable Inputs (In thousands ) Fair value measurements as of March 30, 2022: Deferred compensation plan investments (1) $ 12,925 $ 12,925 $ — $ — Interest rate swaps, net (2) (23,264) — (23,264) — Investments (3) 3,687 — 3,687 — Total $ (6,652) $ 12,925 $ (19,577) $ — Fair value measurements as of December 29, 2021: Deferred compensation plan investments (1) $ 13,726 $ 13,726 $ — $ — Interest rate swaps (2) (52,121) — (52,121) — Investments (3) 2,551 — 2,551 — Total $ (35,844) $ 13,726 $ (49,570) $ — (1) The fair values of our deferred compensation plan investments are based on the closing market prices of the elected investments and are included in other noncurrent assets in our Consolidated Balance Sheets. (2) The fair values of our interest rate swaps are based upon Level 2 inputs, which include valuation models. The key inputs for the valuation models are quoted market prices, interest rates and forward yield curves. See Note 7 for details on the interest rate swaps. (3) The fair values of our investments are valued using a readily determinable net asset value per share based on the fair value of the underlying securities. There are no significant redemption restrictions associated with these investments. |
Long-Term Debt (Tables)
Long-Term Debt (Tables) | 3 Months Ended |
Mar. 30, 2022 | |
Debt Disclosure [Abstract] | |
Schedule of Interest Rate Swaps | A summary of our interest rate swaps as of March 30, 2022 is as follows: Trade Date Effective Date Maturity Date Notional Amount Fair Value Fixed Rate (In thousands) Swaps designated as cash flow hedges March 20, 2015 March 29, 2018 March 31, 2025 $ 120,000 $ 104 2.44 % October 1, 2015 March 29, 2018 March 31, 2026 $ 50,000 $ (59) 2.46 % Dedesignated swaps February 15, 2018 March 31, 2020 December 31, 2033 $ 120,000 (1) $ (23,309) 3.19 % Total $ 290,000 $ (23,264) (1) The notional amounts of the swaps entered into on February 15, 2018 increase periodically until they reach the maximum notional amount of $425.0 million on September 28, 2029. |
Revenues (Tables)
Revenues (Tables) | 3 Months Ended |
Mar. 30, 2022 | |
Revenue from Contract with Customer [Abstract] | |
Schedule of Disaggregation of Revenue | The following table disaggregates our revenue by sales channel and type of good or service: Quarter Ended March 30, 2022 March 31, 2021 (In thousands) Company restaurant sales $ 43,976 $ 33,569 Franchise and license revenue: Royalties 26,525 20,844 Advertising revenue 18,206 14,111 Initial and other fees 4,507 1,838 Occupancy revenue 9,893 10,214 Franchise and license revenue 59,131 47,007 Total operating revenue $ 103,107 $ 80,576 |
Schedule of Components of Lease Income | Franchise occupancy revenue consisted of the following: Quarter Ended March 30, 2022 March 31, 2021 (In thousands) Operating lease revenue $ 7,418 $ 7,913 Variable lease revenue 2,475 2,301 Total occupancy revenue $ 9,893 $ 10,214 |
Schedule of Components of the Change in Deferred Franchise Revenue | The components of the change in deferred franchise revenue are as follows: (In thousands) Balance, December 29, 2021 $ 19,896 Fees received from franchisees 1,199 Franchisee deferred costs (1) (626) Revenue recognized, net (2) (739) Balance, March 30, 2022 19,730 Less current portion included in other current liabilities 1,928 Deferred franchise revenue included in other noncurrent liabilities $ 17,802 (1) Deferred costs are contract assets consisting of incentives given to franchisees related to the rollout of kitchen equipment to all franchise locations. (2) Of this amount $0.6 million was included in the deferred franchise revenue balance as of December 29, 2021. |
Operating (Gains), Losses and_2
Operating (Gains), Losses and Other Charges, Net (Tables) | 3 Months Ended |
Mar. 30, 2022 | |
Other Income and Expenses [Abstract] | |
Schedule of Operating Gains Losses and Other Charges, Net | Operating (gains), losses and other charges, net consisted of the following: Quarter Ended March 30, 2022 March 31, 2021 (In thousands) Gains on sales of assets and other, net $ (146) $ (942) Restructuring charges and exit costs 146 1,474 Operating (gains), losses and other charges, net $ — $ 532 |
Schedule of Restructuring Charges and Exit Costs | Restructuring charges and exit costs consisted of the following: Quarter Ended March 30, 2022 March 31, 2021 (In thousands) Exit costs $ 12 $ 82 Severance and other restructuring charges 134 1,392 Total restructuring charges and exit costs $ 146 $ 1,474 |
Share-Based Compensation (Table
Share-Based Compensation (Tables) | 3 Months Ended |
Mar. 30, 2022 | |
Share-based Payment Arrangement [Abstract] | |
Schedule of Total Share-based Compensation | Total share-based compensation included as a component of general and administrative expenses was as follows: Quarter Ended March 30, 2022 March 31, 2021 (In thousands) Employee share awards $ 3,794 $ 3,253 Restricted stock units for board members 221 219 Total share-based compensation $ 4,015 $ 3,472 |
Net Income Per Share (Tables)
Net Income Per Share (Tables) | 3 Months Ended |
Mar. 30, 2022 | |
Earnings Per Share [Abstract] | |
Schedule of Basic and Diluted Net Income Per Share | The amounts used for the basic and diluted net income per share calculations are summarized below: Quarter Ended March 30, 2022 March 31, 2021 (In thousands, except per share amounts) Net income $ 21,855 $ 23,181 Weighted average shares outstanding - basic 63,343 65,251 Effect of dilutive share-based compensation awards 237 498 Weighted average shares outstanding - diluted 63,580 65,749 Net income per share - basic $ 0.35 $ 0.36 Net income per share - diluted $ 0.34 $ 0.35 Anti-dilutive share-based compensation awards 829 273 |
Shareholders' Deficit (Tables)
Shareholders' Deficit (Tables) | 3 Months Ended |
Mar. 30, 2022 | |
Stockholders' Equity Attributable to Parent [Abstract] | |
Schedule of Components of Accumulated Other Comprehensive Income (Loss) | The components of the change in accumulated other comprehensive loss, net were as follows: Defined Benefit Plans Derivatives Accumulated Other Comprehensive Loss, Net (In thousands) Balance as of December 29, 2021 $ (900) $ (53,570) $ (54,470) Amortization of net loss (1) 32 — 32 Changes in the fair value of cash flow derivatives — 6,688 6,688 Reclassification of cash flow derivatives to interest expense, net (2) — 990 990 Income tax expense related to items of other comprehensive income (8) (1,921) (1,929) Balance as of March 30, 2022 $ (876) $ (47,813) $ (48,689) (1) Before-tax amount related to our defined benefit plans that was reclassified from accumulated other comprehensive loss, net and included as a component of pension expense within general and administrative expenses in our Consolidated Statements of Operations during the quarter ended March 30, 2022. (2) Amounts reclassified from accumulated other comprehensive loss, net into interest expense, net in our Consolidated Statements of Operations represent payments either received from or made to the counterparty for the interest rate swaps. See Note 7 for additional details. |
Supplemental Cash Flow Inform_2
Supplemental Cash Flow Information (Tables) | 3 Months Ended |
Mar. 30, 2022 | |
Supplemental Cash Flow Information [Abstract] | |
Schedule of Supplemental Cash Flow Information | Quarter Ended March 30, 2022 March 31, 2021 (In thousands) Income taxes paid, net $ 449 $ 421 Interest paid $ 2,849 $ 4,743 Noncash investing and financing activities: Issuance of common stock, pursuant to share-based compensation plans $ 4,081 $ 2,435 Execution of finance leases $ 133 $ — |
Introduction and Basis of Pre_2
Introduction and Basis of Presentation (Details) | Mar. 30, 2022restaurant |
Franchisor Disclosure [Line Items] | |
Number of restaurants | 1,634 |
Franchised/licensed Restaurants | |
Franchisor Disclosure [Line Items] | |
Number of restaurants | 1,569 |
Company Restaurants | |
Franchisor Disclosure [Line Items] | |
Number of restaurants | 65 |
Receivables - Receivables, Net
Receivables - Receivables, Net (Details) - USD ($) $ in Thousands | Mar. 30, 2022 | Dec. 29, 2021 |
Receivables, net: | ||
Trade accounts receivable from franchisees | $ 12,897 | $ 13,430 |
Financing receivables from franchisees | 2,811 | 1,027 |
Allowance for doubtful accounts | (549) | (574) |
Receivables, net | 23,161 | 19,621 |
Other noncurrent assets: | ||
Financing receivables from franchisees | 252 | 293 |
Vendor receivables | ||
Receivables, net: | ||
Other receivables, gross, current | 2,803 | 4,041 |
Credit card receivables | ||
Receivables, net: | ||
Other receivables, gross, current | 625 | 747 |
Other | ||
Receivables, net: | ||
Other receivables, gross, current | $ 4,574 | $ 950 |
Intangible Assets - Finite-Live
Intangible Assets - Finite-Lived and Indefinite-Lived Intangible Assets (Details) - USD ($) $ in Thousands | Mar. 30, 2022 | Dec. 29, 2021 |
Intangible Assets | ||
Trade names | $ 44,087 | $ 44,087 |
Liquor licenses | 120 | 120 |
Reacquired franchise rights | 11,801 | 12,218 |
Accumulated Amortization | 6,116 | 6,199 |
Intangible assets, net | $ 56,008 | $ 56,425 |
Other Current Liabilities - Oth
Other Current Liabilities - Other Current Liabilities (Details) - USD ($) $ in Thousands | Mar. 30, 2022 | Dec. 29, 2021 |
Other Liabilities, Current [Abstract] | ||
Accrued payroll | $ 13,232 | $ 20,676 |
Current portion of liability for insurance claims | 3,947 | 4,285 |
Accrued taxes | 4,532 | 4,533 |
Accrued advertising | 9,538 | 15,355 |
Gift cards | 5,818 | 7,170 |
Other | 11,457 | 12,127 |
Other current liabilities | $ 48,524 | $ 64,146 |
Fair Value of Financial Instr_3
Fair Value of Financial Instruments - Assets and Liabilities on Recurring Basis (Details) - Recurring - USD ($) $ in Thousands | Mar. 30, 2022 | Dec. 29, 2021 |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Deferred compensation plan investments | $ 12,925 | $ 13,726 |
Interest rate swaps | (23,264) | (52,121) |
Investments | 3,687 | 2,551 |
Total | (6,652) | (35,844) |
Quoted Prices in Active Markets for Identical Assets/Liabilities (Level 1) | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Deferred compensation plan investments | 12,925 | 13,726 |
Interest rate swaps | 0 | 0 |
Investments | 0 | 0 |
Total | 12,925 | 13,726 |
Significant Other Observable Inputs (Level 2) | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Deferred compensation plan investments | 0 | 0 |
Interest rate swaps | (23,264) | (52,121) |
Investments | 3,687 | 2,551 |
Total | (19,577) | (49,570) |
Significant Unobservable Inputs (Level 3) | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Deferred compensation plan investments | 0 | 0 |
Interest rate swaps | 0 | 0 |
Investments | 0 | 0 |
Total | $ 0 | $ 0 |
Long-Term Debt - Narrative (Det
Long-Term Debt - Narrative (Details) - USD ($) | 3 Months Ended | |||
Mar. 30, 2022 | Mar. 31, 2021 | Dec. 29, 2021 | Dec. 30, 2020 | |
Line of Credit Facility [Line Items] | ||||
Unrealized losses remained in accumulated other comprehensive loss, net | $ 47,755,000 | $ 102,072,000 | $ 65,265,000 | $ 130,446,000 |
Derivatives | ||||
Line of Credit Facility [Line Items] | ||||
Reclassification | 990,000 | |||
Unrealized losses remained in accumulated other comprehensive loss, net | 47,813,000 | $ 53,570,000 | ||
Effective Interest Rate Swaps | ||||
Line of Credit Facility [Line Items] | ||||
Cash flow hedge, net asset value (less than) | 100,000 | |||
Other noncurrent asset | 100,000 | |||
Other noncurrent liability | 100,000 | |||
Expected reclassification within next twelve months | 3,400,000 | |||
Dedesignated Interest Rate Swaps | ||||
Line of Credit Facility [Line Items] | ||||
Other noncurrent liability | 23,000,000 | |||
Interest rate swaps | 23,300,000 | |||
Other current liability | 300,000 | |||
Dedesignated Interest Rate Swaps | Other Nonoperating Income (Expense) | ||||
Line of Credit Facility [Line Items] | ||||
Unrealized gain (loss) on derivatives | 20,300,000 | 29,900,000 | ||
Dedesignated Interest Rate Swaps | Derivatives | ||||
Line of Credit Facility [Line Items] | ||||
Reclassification | $ 100,000 | |||
Dedesignated Interest Rate Swaps | Derivatives | ||||
Line of Credit Facility [Line Items] | ||||
Unrealized losses remained in accumulated other comprehensive loss, net | 64,200,000 | |||
Dedesignated Interest Rate Swaps | Derivatives | ||||
Line of Credit Facility [Line Items] | ||||
Expected reclassification within next twelve months | $ 100,000 | |||
Revolving Credit Facility | ||||
Line of Credit Facility [Line Items] | ||||
Line of credit facility, term | 5 years | |||
Line of credit facility, current borrowing capacity | $ 400,000,000 | |||
Line of credit facility, borrowing capacity, accordion feature | 450,000,000 | |||
Outstanding amount under credit facility | 171,500,000 | |||
Availability under the credit facility | $ 212,800,000 | |||
Commitment fee, percent | 0.25% | |||
Weighted-average interest rate | 1.98% | 2.09% | ||
Revolving Credit Facility | Interest Rate Swap | ||||
Line of Credit Facility [Line Items] | ||||
Weighted-average interest rate | 4.19% | 4.44% | ||
Revolving Credit Facility | Libor | ||||
Line of Credit Facility [Line Items] | ||||
Basis spread on variable rate debt (as a percent) | 1.75% | |||
Letter of Credit | ||||
Line of Credit Facility [Line Items] | ||||
Line of credit facility, current borrowing capacity | $ 25,000,000 | |||
Outstanding amount of letters of credit | $ 15,700,000 |
Long-Term Debt - Interest Rate
Long-Term Debt - Interest Rate Swaps (Details) | Mar. 30, 2022USD ($) |
Derivative [Line Items] | |
Notional Amount | $ 290,000,000 |
Fair Value | (23,264,000) |
Interest Rate Swap 2018-2025 | |
Derivative [Line Items] | |
Notional Amount | 120,000,000 |
Fair Value | $ 104,000 |
Fixed Rate | 2.44% |
Interest Rate Swap 2018-2026 | |
Derivative [Line Items] | |
Notional Amount | $ 50,000,000 |
Fair Value | $ (59,000) |
Fixed Rate | 2.46% |
Interest Rate Swap 2020-2033 | |
Derivative [Line Items] | |
Notional Amount | $ 120,000,000 |
Fair Value | $ (23,309,000) |
Fixed Rate | 3.19% |
Interest Rate Swap 2020-2029 | Maximum | |
Derivative [Line Items] | |
Notional Amount | $ 425,000,000 |
Revenues - Disaggregation of Re
Revenues - Disaggregation of Revenues (Details) $ in Thousands | 3 Months Ended | |
Mar. 30, 2022USD ($)segmentchannel | Mar. 31, 2021USD ($) | |
Revenue from Contract with Customer [Abstract] | ||
Number of sales channels | channel | 2 | |
Number of segments | segment | 1 | |
Disaggregation of Revenue [Line Items] | ||
Total operating revenue | $ 103,107 | $ 80,576 |
Company restaurant sales | ||
Disaggregation of Revenue [Line Items] | ||
Total operating revenue | 43,976 | 33,569 |
Royalties | ||
Disaggregation of Revenue [Line Items] | ||
Total operating revenue | 26,525 | 20,844 |
Advertising revenue | ||
Disaggregation of Revenue [Line Items] | ||
Total operating revenue | 18,206 | 14,111 |
Initial and other fees | ||
Disaggregation of Revenue [Line Items] | ||
Total operating revenue | 4,507 | 1,838 |
Occupancy revenue | ||
Disaggregation of Revenue [Line Items] | ||
Total operating revenue | 9,893 | 10,214 |
Franchise and license revenue | ||
Disaggregation of Revenue [Line Items] | ||
Total operating revenue | $ 59,131 | $ 47,007 |
Revenues - Components of Lease
Revenues - Components of Lease Income (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 30, 2022 | Mar. 31, 2021 | |
Revenue from Contract with Customer [Abstract] | ||
Operating lease revenue | $ 7,418 | $ 7,913 |
Variable lease revenue | 2,475 | 2,301 |
Total occupancy revenue | $ 9,893 | $ 10,214 |
Revenues - Components of the Ch
Revenues - Components of the Change in Deferred Franchise Revenue (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended |
Mar. 30, 2022 | Dec. 29, 2021 | |
Movement In Deferred Revenue Roll Forward | ||
Balance, December 29, 2021 | $ 19,896 | |
Fees received from franchisees | 1,199 | |
Franchisee deferred costs | (626) | |
Revenue recognized | (739) | |
Balance, March 30, 2022 | 19,730 | $ 19,896 |
Less current portion included in other current liabilities | 1,928 | |
Deferred franchise revenue included in other noncurrent liabilities | $ 17,802 | |
Deferred revenue recognized | $ 600 |
Revenues - Narrative (Details)
Revenues - Narrative (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended |
Mar. 30, 2022 | Dec. 29, 2021 | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | ||
Liability balance | $ 1,928 | |
Deferred revenue recognized | $ 600 | |
Gift Card Redemption | ||
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | ||
Liability balance | 5,800 | $ 7,200 |
Deferred revenue recognized | 200 | |
Kitchen Equipment Rollout For Franchise Restaurants | ||
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | ||
Equipment purchase contract | 18,300 | |
Amount committed by the company | 5,700 | |
Purchase obligations | 9,200 | |
Inventory related to kitchen equipment rollout | 8,400 | |
Contract assets | 700 | |
Kitchen Equipment Rollout For Franchise Restaurants | Accounts Payable | ||
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | ||
Purchase obligations | $ 1,600 |
Operating (Gains), Losses and_3
Operating (Gains), Losses and Other Charges, Net - Operating Gains Losses and Other Charges, Net and Restructuring Charges and Exit Costs (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 30, 2022 | Mar. 31, 2021 | |
Other Income and Expenses [Abstract] | ||
Gains on sales of assets and other, net | $ (146) | $ (942) |
Restructuring charges and exit costs | 146 | 1,474 |
Operating (gains), losses and other charges, net | 0 | 532 |
Restructuring Charges [Abstract] | ||
Exit costs | 12 | 82 |
Severance and other restructuring charges | 134 | 1,392 |
Total restructuring charges and exit costs | $ 146 | $ 1,474 |
Operating (Gains), Losses and_4
Operating (Gains), Losses and Other Charges, Net - Narrative (Details) | Mar. 30, 2022USD ($)real_estate | Dec. 29, 2021USD ($) |
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||
Severance and other restructuring charges | $ 100,000 | $ 100,000 |
Held-for-sale | ||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||
Carrying amount | 1,300,000 | $ 0 |
Property | 1,000,000 | |
Other assets | $ 300,000 | |
Number of real estate properties | real_estate | 3 |
Share-Based Compensation - Tota
Share-Based Compensation - Total Share-Based Compensation (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 30, 2022 | Mar. 31, 2021 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Total share-based compensation | $ 4,015 | $ 3,472 |
Employee share awards | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Total share-based compensation | 3,794 | 3,253 |
Restricted stock units for board members | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Total share-based compensation | $ 221 | $ 219 |
Share-Based Compensation - Narr
Share-Based Compensation - Narrative (Details) $ / shares in Units, shares in Thousands, $ in Millions | 3 Months Ended |
Mar. 30, 2022USD ($)$ / sharesshares | |
Certain Employee | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Unrecognized compensation cost | $ | $ 22.9 |
Unrecognized contractual term | 2 years 3 months 18 days |
PSUs, TSR | Certain Employee | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Grants in periods (in shares) | 233 |
Fair value of units granted (in dollars per share) | $ / shares | $ 24.51 |
PSUs, Adjusted EPS | Employee Share Awards | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Grants in periods (in shares) | 233 |
Fair value of units granted (in dollars per share) | $ / shares | $ 15.59 |
Performance Shares | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Compensation cost, straight-line basis | 312 |
Compensation cost, graded-vesting basis | 154 |
Performance Shares | Certain Employee | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Period of performance | 3 years |
Performance Shares | Employee Share Awards | Minimum | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Percentage of target achievement | 0.00% |
Performance Shares | Employee Share Awards | Maximum | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Percentage of target achievement | 200.00% |
Restricted Stock Units | Certain Employee | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Grants in periods (in shares) | 310 |
Fair value of units granted (in dollars per share) | $ / shares | $ 15.59 |
Period of performance | 3 years |
Restricted Stock Units | Board Members | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Unrecognized compensation cost | $ | $ 0.1 |
Unrecognized contractual term | 2 months 12 days |
PSUs and RSUs | Certain Employee | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Common stock, shares issued (in shares) | 257 |
Deferred common stock (in shares) | 24 |
Shares paid for tax withholding (in shares) | 136 |
Income Taxes (Details)
Income Taxes (Details) | 3 Months Ended | |
Mar. 30, 2022 | Mar. 31, 2021 | |
Income Tax Disclosure [Abstract] | ||
Effective tax rate expense (benefit), percent | 27.10% | 25.90% |
Net Income Per Share - Basic an
Net Income Per Share - Basic and Diluted Net Income Per Share (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | |
Mar. 30, 2022 | Mar. 31, 2021 | |
Earnings Per Share [Abstract] | ||
Net income | $ 21,855 | $ 23,181 |
Weighted average shares outstanding - basic (in shares) | 63,343 | 65,251 |
Effect of dilutive share-based compensation awards (in shares) | 237 | 498 |
Weighted average shares outstanding - diluted (in shares) | 63,580 | 65,749 |
Net income per share - basic (in dollars per share) | $ 0.35 | $ 0.36 |
Net income per share - diluted (in dollars per share) | $ 0.34 | $ 0.35 |
Anti-dilutive share-based compensation awards (in shares) | 829 | 273 |
Shareholders' Deficit - Narrati
Shareholders' Deficit - Narrative (Details) - USD ($) shares in Thousands | 3 Months Ended | ||
Mar. 30, 2022 | Dec. 29, 2021 | Dec. 25, 2019 | |
Equity, Class of Treasury Stock [Line Items] | |||
Purchase of treasury stock (in shares) | 800 | ||
Purchase of treasury stock | $ 11,865,000 | ||
Treasury stock, at cost, shares (in shares) | 2,744 | 1,990 | |
Share Repurchase Program 2019 | |||
Equity, Class of Treasury Stock [Line Items] | |||
Share repurchase, authorized amount | $ 250,000,000 | ||
Purchase of treasury stock | $ 44,500,000 | ||
Remaining shares to be repurchased | $ 205,500,000 |
Shareholders' Deficit - Compone
Shareholders' Deficit - Components of Accumulated Other Comprehensive Income (Loss) (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 30, 2022 | Mar. 31, 2021 | |
AOCI Attributable to Parent, Net of Tax [Roll Forward] | ||
Balance as of beginning of period | $ (65,265) | $ (130,446) |
Income tax expense related to items of other comprehensive income | (1,929) | |
Balance as of end of period | (47,755) | (102,072) |
Defined Benefit Plans | ||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | ||
Balance as of beginning of period | (900) | |
Reclassification | 32 | |
Income tax expense related to items of other comprehensive income | (8) | |
Balance as of end of period | (876) | |
Derivatives | ||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | ||
Balance as of beginning of period | (53,570) | |
Reclassification | 990 | |
Changes in the fair value of cash flow derivatives | 6,688 | |
Income tax expense related to items of other comprehensive income | (1,921) | |
Balance as of end of period | (47,813) | |
Accumulated Other Comprehensive Loss, Net | ||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | ||
Balance as of beginning of period | (54,470) | (60,405) |
Balance as of end of period | $ (48,689) | $ (57,330) |
Supplemental Cash Flow Inform_3
Supplemental Cash Flow Information (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 30, 2022 | Mar. 31, 2021 | |
Supplemental Cash Flow Information [Abstract] | ||
Income taxes paid, net | $ 449 | $ 421 |
Interest paid | 2,849 | 4,743 |
Noncash investing and financing activities: | ||
Issuance of common stock, pursuant to share-based compensation plans | 4,081 | 2,435 |
Execution of finance leases | $ 133 | $ 0 |
Subsequent Event - Narrative (D
Subsequent Event - Narrative (Details) - Subsequent Event - Keke's $ in Thousands | May 03, 2022USD ($)restaurant |
Subsequent Event [Line Items] | |
Number of franchises acquired | restaurant | 8 |
Total purchase price | $ | $ 82,500 |