Cover Page
Cover Page - shares | 3 Months Ended | |
Mar. 29, 2023 | Apr. 27, 2023 | |
Cover [Abstract] | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Mar. 29, 2023 | |
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 | $.01 Par Value, Common Stock | |
Trading Symbol | DENN | |
Security Exchange Name | NASDAQ | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Accelerated Filer | |
Entity Small Business | false | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 56,043,779 | |
Entity Central Index Key | 0000852772 | |
Current Fiscal Year End Date | --12-27 | |
Document Fiscal Year Focus | 2023 | |
Document Fiscal Period Focus | Q1 | |
Amendment Flag | false |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) $ in Thousands | Mar. 29, 2023 | Dec. 28, 2022 |
Current assets: | ||
Cash and cash equivalents | $ 8,895 | $ 3,523 |
Investments | 3,051 | 1,746 |
Receivables, net | 23,443 | 25,576 |
Inventories | 3,253 | 5,538 |
Assets held for sale | 2,312 | 1,403 |
Prepaid and other current assets | 9,877 | 12,529 |
Total current assets | 50,831 | 50,315 |
Property, net of accumulated depreciation of $155,429 and $153,334, respectively | 92,205 | 94,469 |
Finance lease right-of-use assets, net of accumulated amortization of $10,194 and $9,847, respectively | 6,117 | 6,499 |
Operating lease right-of-use assets, net | 123,013 | 126,065 |
Goodwill | 72,142 | 72,740 |
Intangible assets, net | 94,622 | 95,034 |
Deferred financing costs, net | 2,179 | 2,337 |
Other noncurrent assets | 39,338 | 50,876 |
Total assets | 480,447 | 498,335 |
Current liabilities: | ||
Current finance lease liabilities | 1,514 | 1,683 |
Current operating lease liabilities | 15,230 | 15,310 |
Accounts payable | 18,251 | 19,896 |
Other current liabilities | 50,407 | 56,762 |
Total current liabilities | 85,402 | 93,651 |
Long-term liabilities: | ||
Long-term debt | 264,000 | 261,500 |
Noncurrent finance lease liabilities | 9,237 | 9,555 |
Noncurrent operating lease liabilities | 120,140 | 123,404 |
Liability for insurance claims, less current portion | 7,138 | 7,324 |
Deferred income taxes, net | 7,673 | 7,419 |
Other noncurrent liabilities | 31,859 | 32,598 |
Total long-term liabilities | 440,047 | 441,800 |
Total liabilities | 525,449 | 535,451 |
Shareholders' deficit | ||
Common stock $0.01 par value; 135,000 shares authorized; March 29, 2023: 65,468 shares issued and 56,392 outstanding; December 28, 2022: 64,998 shares issued and 56,728 shares outstanding | 655 | 650 |
Paid-in capital | 142,258 | 142,136 |
Deficit | (41,132) | (41,729) |
Accumulated other comprehensive loss, net | (42,340) | (42,697) |
Treasury stock, at cost, 9,076 and 8,270 shares, respectively | (104,443) | (95,476) |
Total shareholders' deficit | (45,002) | (37,116) |
Total liabilities and shareholders' deficit | $ 480,447 | $ 498,335 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Thousands | Mar. 29, 2023 | Dec. 28, 2022 |
Assets | ||
Accumulated depreciation | $ 155,429 | $ 153,334 |
Accumulated amortization | $ 10,194 | $ 9,847 |
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) | 65,468,000 | 64,998,000 |
Common stock, shares outstanding (in shares) | 56,392,000 | 56,728,000 |
Treasury stock, at cost (in shares) | 9,076,000 | 8,270,000 |
Consolidated Statements of Oper
Consolidated Statements of Operations - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | |
Mar. 29, 2023 | Mar. 30, 2022 | |
Revenue: | ||
Total operating revenue | $ 117,471 | $ 103,107 |
Costs of company restaurant sales, excluding depreciation and amortization: | ||
Product costs | 14,039 | 11,244 |
Payroll and benefits | 20,240 | 17,086 |
Occupancy | 4,094 | 3,240 |
Other operating expenses | 8,119 | 7,055 |
Total costs of company restaurant sales, excluding depreciation and amortization | 46,492 | 38,625 |
Costs of franchise and license revenue, excluding depreciation and amortization | 32,387 | 30,669 |
General and administrative expenses | 20,118 | 16,958 |
Depreciation and amortization | 3,656 | 3,548 |
Operating (gains), losses and other charges, net | (1,329) | 0 |
Total operating costs and expenses, net | 101,324 | 89,800 |
Operating income | 16,147 | 13,307 |
Interest expense, net | 4,505 | 2,960 |
Other nonoperating expense (income), net | 10,093 | (19,615) |
Income before income taxes | 1,549 | 29,962 |
Provision for income taxes | 952 | 8,107 |
Net income | $ 597 | $ 21,855 |
Net income per share - basic (in dollars per share) | $ 0.01 | $ 0.35 |
Net income per share - diluted (in dollars per share) | $ 0.01 | $ 0.34 |
Basic weighted average shares outstanding (in shares) | 57,638 | 63,343 |
Diluted weighted average shares outstanding (in shares) | 57,840 | 63,580 |
Company restaurant sales | ||
Revenue: | ||
Total operating revenue | $ 53,452 | $ 43,976 |
Franchise and license revenue | ||
Revenue: | ||
Total operating revenue | $ 64,019 | $ 59,131 |
Consolidated Statements of Comp
Consolidated Statements of Comprehensive Income - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 29, 2023 | Mar. 30, 2022 | |
Statement of Comprehensive Income [Abstract] | ||
Net income | $ 597 | $ 21,855 |
Other comprehensive income (loss), net of tax: | ||
Minimum pension liability adjustment, net of tax of $22 and $8, respectively | 67 | 24 |
Changes in the fair value of cash flow hedges, net of tax of $321 and $1,673, respectively | 942 | 5,015 |
Reclassification of cash flow hedges to interest expense, net of tax of $(236) and $248, respectively | (694) | 742 |
Amortization of unrealized losses related to interest rate swaps to interest expense, net of tax of $14 and $0, respectively | 42 | 0 |
Other comprehensive income | 357 | 5,781 |
Total comprehensive income | $ 954 | $ 27,636 |
Consolidated Statements of Co_2
Consolidated Statements of Comprehensive Income (Parenthetical) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 29, 2023 | Mar. 30, 2022 | |
Statement of Comprehensive Income [Abstract] | ||
Tax effect of minimum pension liability adjustment | $ 22 | $ 8 |
Changes in fair value of cash flow derivatives, tax | 321 | 1,673 |
Reclassification of cash flow derivatives to interest expense, tax | (236) | 248 |
Reclassification of unrealized losses related to derivatives to interest expense, tax | $ 14 | $ 0 |
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. 29, 2021 | 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) | |||||
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) | (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 | |||||
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) | |||||
Balance as of beginning of period (in shares) at Dec. 28, 2022 | 64,998 | 64,998 | ||||
Balance as of beginning of period at Dec. 28, 2022 | $ (37,116) | $ 650 | $ (95,476) | 142,136 | (41,729) | (42,697) |
Balance as of beginning of period, treasury stock (in shares) at Dec. 28, 2022 | (8,270) | (8,270) | ||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Net income | $ 597 | 597 | ||||
Other comprehensive income | 357 | 357 | ||||
Share-based compensation on equity classified awards, net of withholding tax | $ 127 | 127 | ||||
Purchase of treasury stock (in shares) | (800) | (806) | ||||
Purchase of treasury stock | $ (8,967) | $ (8,967) | ||||
Issuance of common stock for share-based compensation (in shares) | 470 | |||||
Issuance of common stock for share-based compensation | $ 0 | $ 5 | (5) | |||
Balance as of end of period (in shares) at Mar. 29, 2023 | 65,468 | 65,468 | ||||
Balance as of end of period at Mar. 29, 2023 | $ (45,002) | $ 655 | $ (104,443) | $ 142,258 | $ (41,132) | $ (42,340) |
Balance as of end of period, treasury stock (in shares) at Mar. 29, 2023 | (9,076) | (9,076) |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 29, 2023 | Mar. 30, 2022 | |
Cash flows from operating activities: | ||
Net income | $ 597 | $ 21,855 |
Adjustments to reconcile net income to cash flows provided by (used in) operating activities: | ||
Depreciation and amortization | 3,656 | 3,548 |
Operating (gains), losses and other charges, net | (1,329) | 0 |
Losses (gains) and amortization on interest rate swaps, net | 10,662 | (20,253) |
Amortization of deferred financing costs | 159 | 158 |
Losses (gains) on investments | (5) | 65 |
Gains on early termination of debt and leases | 0 | 24 |
Deferred income tax expense | 133 | 4,436 |
Share-based compensation expense | 3,094 | 4,015 |
Changes in assets and liabilities, excluding acquisitions and dispositions: | ||
Receivables | 1,814 | (3,567) |
Inventories | 2,284 | (4,768) |
Prepaids and other current assets | 2,652 | 3,451 |
Other noncurrent assets | 1,119 | 4,085 |
Operating lease assets and liabilities | (246) | (244) |
Accounts payable | (1,131) | (2,405) |
Other accrued liabilities | (6,534) | (14,964) |
Other noncurrent liabilities | (772) | (2,500) |
Net cash flows provided by (used in) operating activities | 16,153 | (7,064) |
Cash flows from investing activities: | ||
Capital expenditures | (1,304) | (2,778) |
Proceeds from sales of restaurants, real estate and other assets | 1,715 | 108 |
Investment purchases | (1,300) | (1,200) |
Collections on notes receivable | 320 | 67 |
Net cash flows used in investing activities | (569) | (3,803) |
Cash flows from financing activities: | ||
Revolver borrowings | 35,000 | 13,825 |
Revolver payments | (32,500) | (12,325) |
Repayments of finance leases | (506) | (503) |
Tax withholding on share-based payments | (2,846) | (2,165) |
Purchase of treasury stock | (9,041) | (12,498) |
Net bank overdrafts | (319) | 0 |
Net cash flows used in financing activities | (10,212) | (13,666) |
Increase (decrease) in cash and cash equivalents | 5,372 | (24,533) |
Cash and cash equivalents at beginning of period | 3,523 | 30,624 |
Cash and cash equivalents at end of period | $ 8,895 | $ 6,091 |
Introduction and Basis of Prese
Introduction and Basis of Presentation | 3 Months Ended |
Mar. 29, 2023 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Introduction and Basis of Presentation | Introduction and Basis of Presentation Denny’s Corporation, or the Company, is one of America’s largest full-service restaurant chains based on number of restaurants. As of March 29, 2023, the Company consisted of 1,648 restaurants, 1,574 of which were franchised/licensed restaurants and 74 of which were company operated. The Company consists of the Denny’s brand ("Denny's") and the Keke’s Breakfast Café brand (“Keke’s”). Keke’s was acquired on July 20, 2022. As of March 29, 2023, the Denny's brand consisted of 1,594 restaurants, 1,528 of which were franchised/licensed restaurants and 66 of which were company operated. At March 29, 2023, the Keke's brand consisted of 54 restaurants, 46 of which were franchised restaurants and eight of which were company operated. Through the current quarter ended March 29, 2023, many Denny’s restaurants have not returned to full operating hours, since closing or reducing hours in 2020 due to the COVID-19 pandemic, particularly at the late night daypart. Additionally, our restaurant operations have been negatively impacted by a tight labor market and inflated commodity costs. Our operating results substantially depend upon the sales volumes, restaurant profitability, and financial stability of our company and franchised and licensed restaurants. We cannot currently estimate the duration or future negative financial impact of these economic conditions on our business. Ongoing material adverse effects of these economic conditions 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 for interim financial information. 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 28, 2022 which are contained in our audited Annual Report on Form 10-K for the fiscal year ended December 28, 2022. The results of operations for the interim periods presented are not necessarily indicative of the results for the entire fiscal year ending December 27, 2023. 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. 29, 2023 | |
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”. Additionally, in December 2022, the FASB issued ASU 2022-06, “Reference Rate Reform (Topic 848): Deferral of the Sunset Date of Topic 848”, which allows ASU 2020-04 to be adopted and applied prospectively to contract modifications made on or before December 31, 2024. 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, 2024. 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. 29, 2023 | |
Receivables [Abstract] | |
Receivables | Receivables Receivables consisted of the following: March 29, 2023 December 28, 2022 (In thousands) Receivables, net: Trade accounts receivable from franchisees $ 14,863 $ 13,314 Other receivables from franchisees 4,469 6,731 Vendor receivables 2,070 3,466 Credit card receivables 707 896 Other 1,621 1,545 Allowance for doubtful accounts (287) (376) Total receivables, net $ 23,443 $ 25,576 |
Goodwill and Intangible Assets
Goodwill and Intangible Assets | 3 Months Ended |
Mar. 29, 2023 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Goodwill and Intangible Assets | Goodwill and Intangible Assets The following tables reflect the changes in carrying amounts of goodwill and goodwill by segment: March 29, 2023 (In thousands) Balance, beginning of year $ 72,740 Reclassifications to assets held for sale (598) Balance, end of period $ 72,142 March 29, 2023 December 28, 2022 (In thousands) Goodwill by segment Denny’s $ 37,527 $ 37,527 Other 34,615 35,213 Total goodwill $ 72,142 $ 72,740 Intangible assets consisted of the following: March 29, 2023 December 28, 2022 Gross Carrying Amount Accumulated Amortization Gross Carrying Amount Accumulated Amortization (In thousands) Intangible assets with indefinite lives: Trade names $ 79,687 $ — $ 79,687 $ — Liquor licenses 120 — 120 — Intangible assets with definite lives: Reacquired franchise rights 10,489 5,947 10,489 5,697 Franchise agreements 10,700 427 10,700 265 Intangible assets, net $ 100,996 $ 6,374 $ 100,996 $ 5,962 Amortization expense for intangible assets with definite lives totaled $0.4 million and $0.3 million for the quarters ended March 29, 2023 and March 30, 2022, respectively. |
Other Current Liabilities
Other Current Liabilities | 3 Months Ended |
Mar. 29, 2023 | |
Other Liabilities, Current [Abstract] | |
Other Current Liabilities | Other Current Liabilities Other current liabilities consisted of the following: March 29, 2023 December 28, 2022 (In thousands) Accrued payroll $ 13,546 $ 17,903 Current portion of liability for insurance claims 3,415 3,492 Accrued taxes 4,035 4,452 Accrued advertising 5,820 6,069 Gift cards 6,286 7,675 Accrued legal settlements 5,538 5,446 Other 11,767 11,725 Other current liabilities $ 50,407 $ 56,762 |
Fair Value of Financial Instrum
Fair Value of Financial Instruments | 3 Months Ended |
Mar. 29, 2023 | |
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 29, 2023: Deferred compensation plan investments (1) $ 10,742 $ 10,742 $ — $ — Interest rate swaps (2) 7,988 — 7,988 — Investments (3) 3,051 — 3,051 — Total $ 21,781 $ 10,742 $ 11,039 $ — Fair value measurements as of December 28, 2022: Deferred compensation plan investments (1) $ 10,818 $ 10,818 $ — $ — Interest rate swaps (2) 20,047 — 20,047 — Investments (3) 1,746 — 1,746 — Total $ 32,611 $ 10,818 $ 21,793 $ — (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, forward yield curves and credit risk adjustments that are necessary to reflect the probability of default by the counterparty or us. For disclosures about the fair value measurements of our derivative instruments, see Note 7. (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. Those assets and liabilities measured at fair value on a non-recurring basis are summarized below: Significant Unobservable Inputs Impairment Charges (In thousands) Fair value measurements for the year-to-date period ended March 29, 2023: Assets held for sale (1) $ 100 $ 129 (1) As of March 29, 2023, assets held for sale were written down to their estimated fair value. The fair value of assets held for sale is based on Level 2 inputs, which include anticipated sales agreements. Assets that are measured at fair value on a non-recurring basis include property, operating right-of-use assets, finance right-of-use assets, goodwill and intangible assets. During the quarter ended March 29, 2023, we recognized impairment charges of $0.1 million related to certain of these assets. See Note 9. |
Long-Term Debt
Long-Term Debt | 3 Months Ended |
Mar. 29, 2023 | |
Debt Disclosure [Abstract] | |
Long-Term Debt | Long-Term Debt The Company 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 maturity date for the credit facility is August 26, 2026. 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 credit facility contains provisions specifying alternative interest rate calculations to be used at such time LIBOR ceases to be available as a benchmark due to reference rate reform. Subsequent to March 29, 2023, the credit facility was amended to change the benchmark interest rate from LIBOR to Adjusted Daily Simple SOFR. See Note 17. The credit facility is available for working capital, capital expenditures and other general corporate purposes. The credit facility is guaranteed by the Company and its material subsidiaries and is secured by assets of the Company 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 29, 2023. As of March 29, 2023, we had outstanding revolver loans of $264.0 million and outstanding letters of credit under the credit facility of $12.3 million. These balances resulted in unused commitments of $123.7 million as of March 29, 2023 under the credit facility. As of March 29, 2023, borrowings under the credit facility bore interest at a rate of LIBOR plus 2.25%, and the commitment fee, paid on the unused portion of the credit facility, was set to 0.35%. Prior to considering the impact of our interest rate swaps, described below, the weighted-average interest rate on outstanding revolver loans was 6.90% and 6.37% as of March 29, 2023 and December 28, 2022, 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 5.34% and 5.31% as of March 29, 2023 and December 28, 2022, respectively. Interest Rate Hedges We have receive-variable, pay-fixed interest rate swaps to hedge the forecasted cash flows of our floating rate debt. A summary of our interest rate swaps as of March 29, 2023 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 $ 3,969 2.44 % October 1, 2015 March 29, 2018 March 31, 2026 $ 50,000 $ 1,926 2.46 % February 15, 2018 March 31, 2020 December 31, 2033 $ 26,000 (1) $ 2,093 3.19 % Total $ 196,000 $ 7,988 (1) The notional amounts of the swaps entered into on February 15, 2018 increase periodically until they reach the maximum notional amount of $335 million on August 31, 2033. Termination and Designation of Certain Interest Rate Swaps During the quarter ended March 29, 2023, we terminated a portion of our hedging relationship entered into in 2018 (“2018 Swaps”), reducing the previous maximum notional amount of $425 million on August 31, 2033 to $335 million. As a result, we expect our total swaps to approximate 80% of our outstanding debt prospectively. We received $1.5 million of cash as a result of the termination which is recorded as a component of operating activities in our Consolidated Statements of Cash Flow for the quarter end March 29, 2023. In addition, during the quarter, we designated the remaining 2018 Swaps as cash flow hedges of our exposure to variability in future cash flows attributable to variable rate interest payments due on forecasted notional amounts. The fair value of $0.4 million related to the 2018 Swaps at the date of designation will be amortized 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 29, 2023, we amortized less than $0.1 million of designation date fair value to interest expense, net related to the designation of the 2018 Swaps. At March 29, 2023, $0.3 million of designation date fair value was included in accumulated other comprehensive loss, net in our Consolidated Statements of Shareholders' Deficit. We expect to amortize $0.1 million of the designation date fair value to interest expense, net in our Consolidated Statements of Operations during the next 12 months. See Previously Dedesignated Interest Rate Swaps below for information on the 2018 Swaps prior to their designation as cash flow hedges. Interest Rate 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 (loss). The interest rate swaps entered into in 2015 and 2018 are designated as cash flow hedges with unrealized gains and losses recorded as a component of accumulated other comprehensive loss, net. As of March 29, 2023, the fair value of the swaps designated as cash flow hedges was an asset of $8.0 million, recorded as a component of other noncurrent assets. 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 $4.9 million from accumulated other comprehensive loss, net as a reduction to interest expense, net in our Consolidated Statements of Operations related to swaps designated as cash flow hedges during the next 12 months. Previously Dedesignated Interest Rate Swaps During the year ended December 30, 2020, we determined that a portion of the underlying cash flows related to our 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 in 2020. As a result, we reclassified a portion of losses from accumulated other comprehensive loss, net to other nonoperating expense (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 quarters ended March 29, 2023 and March 30, 2022, unrealized losses of less than $0.1 million were reclassified to interest expense, net related to the dedesignated 2018 Swaps. At March 29, 2023, $64.1 million (before taxes) of unrealized losses remained in accumulated other comprehensive loss, net. These amounts will continue to amortize from accumulated other comprehensive loss, net subsequent to the redesignation of the 2018 Swaps. See Termination and Designation of Certain Interest Rate Swaps above. We expect to amortize $0.3 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 12 months. As a result of the dedesignated cash flow relationship related to the 2018 Swaps, changes in the fair value of the 2018 Swaps were recorded as a component of other nonoperating expense (income), net in our Consolidated Statements of Operations for the periods prior to their designation as cash flow hedges during the quarter ended March 29, 2023. See Termination and Designation of Certain Interest Rate Swaps |
Revenues
Revenues | 3 Months Ended |
Mar. 29, 2023 | |
Revenue from Contract with Customer [Abstract] | |
Revenues | Revenues The following table disaggregates our revenue by sales channel and type of good or service: Quarter Ended March 29, 2023 March 30, 2022 (In thousands) Company restaurant sales $ 53,452 $ 43,976 Franchise and license revenue: Royalties 30,027 26,525 Advertising revenue 19,668 18,206 Initial and other fees 4,990 4,507 Occupancy revenue 9,334 9,893 Franchise and license revenue 64,019 59,131 Total operating revenue $ 117,471 $ 103,107 Franchise occupancy revenue consisted of the following: Quarter Ended March 29, 2023 March 30, 2022 (In thousands) Operating lease revenue $ 6,871 $ 7,418 Variable lease revenue 2,463 2,475 Total occupancy revenue $ 9,334 $ 9,893 Balances related to contracts with customers consists of receivables, contract assets, deferred franchise revenue and deferred gift card revenue. See Note 3 for details on our receivables. 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 will begin amortizing into revenue when the related restaurants are opened. Deferred franchise revenue represents our remaining performance obligations to our franchisees, excluding amounts of variable consideration related to sales-based royalties and advertising. The components of the change in deferred franchise revenue are as follows: (In thousands) Balance, December 28, 2022 $ 20,751 Fees received from franchisees 455 Revenue recognized (1) (745) Balance, March 29, 2023 20,461 Less current portion included in other current liabilities 2,210 Deferred franchise revenue included in other noncurrent liabilities $ 18,251 (1) Of this amount $0.7 million was included in the deferred franchise revenue balance as of December 28, 2022. We record contract assets related to incentives and subsidies provided to franchisees related to new unit openings and/or equipment upgrades. These amounts will be recognized as a component of franchise and license revenue over the remaining term of the related franchise agreements. The components of the change in contract assets are as follows: (In thousands) Balance, December 28, 2022 $ 5,361 Franchisee deferred costs 942 Contract asset amortization (291) Balance, March 29, 2023 6,012 Less current portion included in other current assets 839 Contract assets included in other noncurrent assets $ 5,173 During 2021, 2022 and 2023, the Company purchased equipment related to a kitchen modernization program for franchise restaurants. We bill our franchisees and recognize revenue when the related equipment is installed, less amounts contributed from the Company, which have been deferred as contract assets in the table above. We recognized $2.2 million of revenue related to the sale of kitchen equipment to franchisees during the quarters ended March 29, 2023 and March 30, 2022, respectively. As of March 29, 2023, we had $1.3 million in inventory and $4.7 million in receivables related to the kitchen equipment rollout. As of December 28, 2022, we had $3.6 million in inventory and $6.6 million in receivables 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 29, 2023 and December 28, 2022 was $6.3 million and $7.7 million, respectively. During the quarter ended March 29, 2023, 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. 29, 2023 | |
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 29, 2023 March 30, 2022 (In thousands) Gains on sales of assets and other, net $ (1,522) $ (146) Restructuring charges and exit costs 64 146 Impairment charges 129 — Operating (gains), losses and other charges, net $ (1,329) $ — We recorded impairment charges of $0.1 million related to property during the quarter ended March 29, 2023, resulting from assets being classified as held for sale. As of March 29, 2023, we had recorded assets held for sale at the lesser of carrying value or fair value amount of $2.3 million (consisting of property of $1.4 million, goodwill of $0.6 million and other assets of $0.3 million) related to three parcels of real estate and three Keke's restaurants. As of December 28, 2022, we had recorded assets held for sale at their carrying amount of $1.4 million (consisting of property of $1.1 million and other assets of $0.3 million) related to four parcels of real estate. Restructuring charges and exit costs consisted of the following: Quarter Ended March 29, 2023 March 30, 2022 (In thousands) Exit costs $ — $ 12 Severance and other restructuring charges 64 134 Total restructuring charges and exit costs $ 64 $ 146 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 29, 2023 and December 28, 2022, we had accrued severance and other restructuring charges of $0.4 million and $0.7 million, respectively. The balance as of March 29, 2023 is expected to be paid during the next 12 months. |
Share-Based Compensation
Share-Based Compensation | 3 Months Ended |
Mar. 29, 2023 | |
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 29, 2023 March 30, 2022 (In thousands) Employee share awards $ 2,847 $ 3,794 Restricted stock units for board members 247 221 Total share-based compensation $ 3,094 $ 4,015 Employee Share Awards During the quarter ended March 29, 2023, we granted certain employees 0.3 million performance share units ("PSUs") with a weighted average grant date fair value of $18.36 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 0.3 million PSUs with a weighted average grant date fair value of $11.92 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 29, 2022 and ending December 31, 2025. 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 0.5 million of these PSU awards over the entire performance period on a straight-line basis, with compensation cost for the remaining 0.1 million PSU awards recognized on a graded-vesting basis due to the accelerated vesting terms for certain retirement eligible individuals. During the quarter ended March 29, 2023, we also granted certain employees 0.7 million restricted stock units ("RSUs") with a weighted average grant date fair value of $11.85 per share. These RSUs generally vest evenly over the three year fiscal period beginning December 29, 2022 and ending December 31, 2025. 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 29, 2023, we issued 0.5 million shares of common stock related to vested PSUs and RSUs. In addition, 0.3 million shares of common stock were withheld in lieu of taxes related to vested PSUs and RSUs. As of March 29, 2023, we had $24.1 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. |
Income Taxes
Income Taxes | 3 Months Ended |
Mar. 29, 2023 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income TaxesThe effective income tax rate was 61.5% for the quarter ended March 29, 2023, compared to 27.1% for the prior year period. The effective income tax rate for the quarter ended March 29, 2023 included a 36.6% discrete item relating to share-based compensation. |
Net Income Per Share
Net Income Per Share | 3 Months Ended |
Mar. 29, 2023 | |
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 29, 2023 March 30, 2022 (In thousands, except per share amounts) Net income $ 597 $ 21,855 Weighted average shares outstanding - basic 57,638 63,343 Effect of dilutive share-based compensation awards 202 237 Weighted average shares outstanding - diluted 57,840 63,580 Net income per share - basic $ 0.01 $ 0.35 Net income per share - diluted $ 0.01 $ 0.34 Anti-dilutive share-based compensation awards 807 829 |
Shareholders' Deficit
Shareholders' Deficit | 3 Months Ended |
Mar. 29, 2023 | |
Stockholders' Equity Attributable to Parent [Abstract] | |
Shareholders' Deficit | Shareholders' Deficit Share Repurchases Our credit facility permits the repurchase of the Company'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 29, 2023, we repurchased a total of 0.8 million shares of our common stock for $9.0 million under the current authorization. This brings the total amount repurchased under the current authorization to $106.4 million, leaving $143.6 million that can be used to repurchase our common stock under this authorization as of March 29, 2023. Repurchased shares are included as treasury stock in our Consolidated Balance Sheets and our Consolidated Statements of Shareholders' Deficit. As of March 29, 2023, 9.1 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 28, 2022 $ (555) $ (42,142) $ (42,697) Amortization of net loss (1) 89 — 89 Changes in the fair value of cash flow hedges — 1,263 1,263 Reclassification of cash flow hedges to interest expense, net (2) — (930) (930) Amortization of unrealized losses related to interest rate swaps to interest expense, net — 56 56 Income tax expense related to items of other comprehensive income (loss) (22) (99) (121) Balance as of March 29, 2023 $ (488) $ (41,852) $ (42,340) (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 Statement of Operations during the quarter ended March 29, 2023. (2) Amounts reclassified from accumulated other comprehensive loss, net into interest expense, net in our Consolidated Statement of Operations represent payments either (received from) or made to the counterparty for the interest rate hedges. See Note 7 for additional details. |
Commitments and Contingencies
Commitments and Contingencies | 3 Months Ended |
Mar. 29, 2023 | |
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. 29, 2023 | |
Supplemental Cash Flow Information [Abstract] | |
Supplemental Cash Flow Information | Supplemental Cash Flow Information Quarter Ended March 29, 2023 March 30, 2022 (In thousands) Income taxes paid, net $ 489 $ 449 Interest paid $ 4,253 $ 2,849 Noncash investing and financing activities: Issuance of common stock, pursuant to share-based compensation plans $ 5,257 $ 4,081 Execution of finance leases $ 14 $ 133 Treasury stock payable $ 468 $ — |
Segment Reporting
Segment Reporting | 3 Months Ended |
Mar. 29, 2023 | |
Segment Reporting [Abstract] | |
Segment Information | Segment Information We manage our business by brand and as a result have identified two operating segments, Denny’s and Keke’s. In addition, we have identified Denny’s as a reportable segment. The Denny’s reportable segment includes the results of all company and franchised and licensed Denny’s restaurants. Our Keke’s operating segment, which includes the results of all company and franchise restaurants, is included in Other. The primary sources of revenues for all operating segments are the sale of food and beverages at our company restaurants and the collection of royalties, advertising revenue, initial and other fees, including occupancy revenue, from restaurants operated by our franchisees. We do not rely on any major customer as a source of sales and the customers and assets of all operating segments are located predominantly in the United States. There are no material transactions between segments. Management’s measure of segment income is restaurant-level operating margin. The Company defines restaurant-level operating margin as operating income excluding the following three items: general and administrative expenses, depreciation and amortization, and operating (gains), losses and other charges, net. The Company excludes general and administrative expenses, which include primarily non restaurant-level costs associated with support of company and franchised restaurants and other activities at their corporate office. The Company excludes depreciation and amortization expense, substantially all of which is related to company restaurant-level assets, because such expenses represent historical sunk costs which do not reflect current cash outlays for the restaurants. The Company excludes operating (gains), losses and other charges, net, to provide a clearer perspective of its ongoing operating performance. Restaurant-level operating margin is used by our chief operating decision maker (“CODM”) to evaluate restaurant-level operating efficiency and performance. The following tables present revenues by segment and a reconciliation of restaurant-level operating margin to operating income: Quarter Ended March 29, 2023 March 30, 2022 Revenues by operating segment: (In thousands) Denny’s $ 112,230 $ 103,107 Other 5,241 — Total operating revenue $ 117,471 $ 103,107 Segment income: Denny’s $ 36,640 $ 33,813 Other 1,952 — Total restaurant-level operating margin $ 38,592 $ 33,813 General and administrative expenses $ 20,118 $ 16,958 Depreciation and amortization 3,656 3,548 Operating (gains), losses and other charges, net (1,329) — Total other operating expenses 22,445 20,506 Operating income 16,147 13,307 Interest expense, net 4,505 2,960 Other nonoperating expense (income), net 10,093 (19,615) Net income before income taxes 1,549 29,962 Provision for income taxes 952 8,107 Net income $ 597 $ 21,855 March 29, 2023 December 28, 2022 Segment assets: (In thousands) Denny’s $ 377,616 $ 394,051 Other 102,831 104,284 Total assets $ 480,447 $ 498,335 |
Subsequent Event
Subsequent Event | 3 Months Ended |
Mar. 29, 2023 | |
Subsequent Events [Abstract] | |
Subsequent Event | Subsequent EventOn March 31, 2023, the Company entered into an amendment of its credit facility. The amendment transitions our credit facility benchmark interest rate from LIBOR to Adjusted Daily Simple SOFR. The conversion to Adjusted Daily Simple SOFR is not expected to have a material impact on the Company's consolidated financial position or results of operations. |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 3 Months Ended |
Mar. 29, 2023 | |
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”. Additionally, in December 2022, the FASB issued ASU 2022-06, “Reference Rate Reform (Topic 848): Deferral of the Sunset Date of Topic 848”, which allows ASU 2020-04 to be adopted and applied prospectively to contract modifications made on or before December 31, 2024. 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, 2024. 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. 29, 2023 | |
Receivables [Abstract] | |
Schedule of Receivables, Net | Receivables consisted of the following: March 29, 2023 December 28, 2022 (In thousands) Receivables, net: Trade accounts receivable from franchisees $ 14,863 $ 13,314 Other receivables from franchisees 4,469 6,731 Vendor receivables 2,070 3,466 Credit card receivables 707 896 Other 1,621 1,545 Allowance for doubtful accounts (287) (376) Total receivables, net $ 23,443 $ 25,576 |
Goodwill and Intangible Assets
Goodwill and Intangible Assets (Tables) | 3 Months Ended |
Mar. 29, 2023 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of Changes in Carrying Amounts of Goodwill | The following tables reflect the changes in carrying amounts of goodwill and goodwill by segment: March 29, 2023 (In thousands) Balance, beginning of year $ 72,740 Reclassifications to assets held for sale (598) Balance, end of period $ 72,142 March 29, 2023 December 28, 2022 (In thousands) Goodwill by segment Denny’s $ 37,527 $ 37,527 Other 34,615 35,213 Total goodwill $ 72,142 $ 72,740 |
Schedule of Indefinite-Lived Intangible Assets | Intangible assets consisted of the following: March 29, 2023 December 28, 2022 Gross Carrying Amount Accumulated Amortization Gross Carrying Amount Accumulated Amortization (In thousands) Intangible assets with indefinite lives: Trade names $ 79,687 $ — $ 79,687 $ — Liquor licenses 120 — 120 — Intangible assets with definite lives: Reacquired franchise rights 10,489 5,947 10,489 5,697 Franchise agreements 10,700 427 10,700 265 Intangible assets, net $ 100,996 $ 6,374 $ 100,996 $ 5,962 |
Schedule of Finite-Lived Intangible Assets | Intangible assets consisted of the following: March 29, 2023 December 28, 2022 Gross Carrying Amount Accumulated Amortization Gross Carrying Amount Accumulated Amortization (In thousands) Intangible assets with indefinite lives: Trade names $ 79,687 $ — $ 79,687 $ — Liquor licenses 120 — 120 — Intangible assets with definite lives: Reacquired franchise rights 10,489 5,947 10,489 5,697 Franchise agreements 10,700 427 10,700 265 Intangible assets, net $ 100,996 $ 6,374 $ 100,996 $ 5,962 |
Other Current Liabilities (Tabl
Other Current Liabilities (Tables) | 3 Months Ended |
Mar. 29, 2023 | |
Other Liabilities, Current [Abstract] | |
Schedule of Other Current Liabilities | Other current liabilities consisted of the following: March 29, 2023 December 28, 2022 (In thousands) Accrued payroll $ 13,546 $ 17,903 Current portion of liability for insurance claims 3,415 3,492 Accrued taxes 4,035 4,452 Accrued advertising 5,820 6,069 Gift cards 6,286 7,675 Accrued legal settlements 5,538 5,446 Other 11,767 11,725 Other current liabilities $ 50,407 $ 56,762 |
Fair Value of Financial Instr_2
Fair Value of Financial Instruments (Tables) | 3 Months Ended |
Mar. 29, 2023 | |
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 29, 2023: Deferred compensation plan investments (1) $ 10,742 $ 10,742 $ — $ — Interest rate swaps (2) 7,988 — 7,988 — Investments (3) 3,051 — 3,051 — Total $ 21,781 $ 10,742 $ 11,039 $ — Fair value measurements as of December 28, 2022: Deferred compensation plan investments (1) $ 10,818 $ 10,818 $ — $ — Interest rate swaps (2) 20,047 — 20,047 — Investments (3) 1,746 — 1,746 — Total $ 32,611 $ 10,818 $ 21,793 $ — (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, forward yield curves and credit risk adjustments that are necessary to reflect the probability of default by the counterparty or us. For disclosures about the fair value measurements of our derivative instruments, see Note 7. (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. |
Fair Value Measurements, Nonrecurring | Those assets and liabilities measured at fair value on a non-recurring basis are summarized below: Significant Unobservable Inputs Impairment Charges (In thousands) Fair value measurements for the year-to-date period ended March 29, 2023: Assets held for sale (1) $ 100 $ 129 (1) As of March 29, 2023, assets held for sale were written down to their estimated fair value. The fair value of assets held for sale is based on Level 2 inputs, which include anticipated sales agreements. |
Long-Term Debt (Tables)
Long-Term Debt (Tables) | 3 Months Ended |
Mar. 29, 2023 | |
Debt Disclosure [Abstract] | |
Schedule of Interest Rate Swaps | A summary of our interest rate swaps as of March 29, 2023 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 $ 3,969 2.44 % October 1, 2015 March 29, 2018 March 31, 2026 $ 50,000 $ 1,926 2.46 % February 15, 2018 March 31, 2020 December 31, 2033 $ 26,000 (1) $ 2,093 3.19 % Total $ 196,000 $ 7,988 (1) The notional amounts of the swaps entered into on February 15, 2018 increase periodically until they reach the maximum notional amount of $335 million on August 31, 2033. |
Revenues (Tables)
Revenues (Tables) | 3 Months Ended |
Mar. 29, 2023 | |
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 29, 2023 March 30, 2022 (In thousands) Company restaurant sales $ 53,452 $ 43,976 Franchise and license revenue: Royalties 30,027 26,525 Advertising revenue 19,668 18,206 Initial and other fees 4,990 4,507 Occupancy revenue 9,334 9,893 Franchise and license revenue 64,019 59,131 Total operating revenue $ 117,471 $ 103,107 |
Schedule of Components of Lease Income | Franchise occupancy revenue consisted of the following: Quarter Ended March 29, 2023 March 30, 2022 (In thousands) Operating lease revenue $ 6,871 $ 7,418 Variable lease revenue 2,463 2,475 Total occupancy revenue $ 9,334 $ 9,893 |
Schedule of Components of the Change in Contract Asset and Contract Liability | The components of the change in deferred franchise revenue are as follows: (In thousands) Balance, December 28, 2022 $ 20,751 Fees received from franchisees 455 Revenue recognized (1) (745) Balance, March 29, 2023 20,461 Less current portion included in other current liabilities 2,210 Deferred franchise revenue included in other noncurrent liabilities $ 18,251 (1) Of this amount $0.7 million was included in the deferred franchise revenue balance as of December 28, 2022. The components of the change in contract assets are as follows: (In thousands) Balance, December 28, 2022 $ 5,361 Franchisee deferred costs 942 Contract asset amortization (291) Balance, March 29, 2023 6,012 Less current portion included in other current assets 839 Contract assets included in other noncurrent assets $ 5,173 |
Operating (Gains), Losses and_2
Operating (Gains), Losses and Other Charges, Net (Tables) | 3 Months Ended |
Mar. 29, 2023 | |
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 29, 2023 March 30, 2022 (In thousands) Gains on sales of assets and other, net $ (1,522) $ (146) Restructuring charges and exit costs 64 146 Impairment charges 129 — Operating (gains), losses and other charges, net $ (1,329) $ — |
Schedule of Restructuring Charges and Exit Costs | Restructuring charges and exit costs consisted of the following: Quarter Ended March 29, 2023 March 30, 2022 (In thousands) Exit costs $ — $ 12 Severance and other restructuring charges 64 134 Total restructuring charges and exit costs $ 64 $ 146 |
Share-Based Compensation (Table
Share-Based Compensation (Tables) | 3 Months Ended |
Mar. 29, 2023 | |
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 29, 2023 March 30, 2022 (In thousands) Employee share awards $ 2,847 $ 3,794 Restricted stock units for board members 247 221 Total share-based compensation $ 3,094 $ 4,015 |
Net Income Per Share (Tables)
Net Income Per Share (Tables) | 3 Months Ended |
Mar. 29, 2023 | |
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 29, 2023 March 30, 2022 (In thousands, except per share amounts) Net income $ 597 $ 21,855 Weighted average shares outstanding - basic 57,638 63,343 Effect of dilutive share-based compensation awards 202 237 Weighted average shares outstanding - diluted 57,840 63,580 Net income per share - basic $ 0.01 $ 0.35 Net income per share - diluted $ 0.01 $ 0.34 Anti-dilutive share-based compensation awards 807 829 |
Shareholders' Deficit (Tables)
Shareholders' Deficit (Tables) | 3 Months Ended |
Mar. 29, 2023 | |
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 28, 2022 $ (555) $ (42,142) $ (42,697) Amortization of net loss (1) 89 — 89 Changes in the fair value of cash flow hedges — 1,263 1,263 Reclassification of cash flow hedges to interest expense, net (2) — (930) (930) Amortization of unrealized losses related to interest rate swaps to interest expense, net — 56 56 Income tax expense related to items of other comprehensive income (loss) (22) (99) (121) Balance as of March 29, 2023 $ (488) $ (41,852) $ (42,340) (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 Statement of Operations during the quarter ended March 29, 2023. (2) Amounts reclassified from accumulated other comprehensive loss, net into interest expense, net in our Consolidated Statement of Operations represent payments either (received from) or made to the counterparty for the interest rate hedges. See Note 7 for additional details. |
Supplemental Cash Flow Inform_2
Supplemental Cash Flow Information (Tables) | 3 Months Ended |
Mar. 29, 2023 | |
Supplemental Cash Flow Information [Abstract] | |
Schedule of Supplemental Cash Flow Information | Quarter Ended March 29, 2023 March 30, 2022 (In thousands) Income taxes paid, net $ 489 $ 449 Interest paid $ 4,253 $ 2,849 Noncash investing and financing activities: Issuance of common stock, pursuant to share-based compensation plans $ 5,257 $ 4,081 Execution of finance leases $ 14 $ 133 Treasury stock payable $ 468 $ — |
Segment Reporting (Tables)
Segment Reporting (Tables) | 3 Months Ended |
Mar. 29, 2023 | |
Segment Reporting [Abstract] | |
Schedule of Segment Reporting Information, by Segment | The following tables present revenues by segment and a reconciliation of restaurant-level operating margin to operating income: Quarter Ended March 29, 2023 March 30, 2022 Revenues by operating segment: (In thousands) Denny’s $ 112,230 $ 103,107 Other 5,241 — Total operating revenue $ 117,471 $ 103,107 Segment income: Denny’s $ 36,640 $ 33,813 Other 1,952 — Total restaurant-level operating margin $ 38,592 $ 33,813 General and administrative expenses $ 20,118 $ 16,958 Depreciation and amortization 3,656 3,548 Operating (gains), losses and other charges, net (1,329) — Total other operating expenses 22,445 20,506 Operating income 16,147 13,307 Interest expense, net 4,505 2,960 Other nonoperating expense (income), net 10,093 (19,615) Net income before income taxes 1,549 29,962 Provision for income taxes 952 8,107 Net income $ 597 $ 21,855 March 29, 2023 December 28, 2022 Segment assets: (In thousands) Denny’s $ 377,616 $ 394,051 Other 102,831 104,284 Total assets $ 480,447 $ 498,335 |
Introduction and Basis of Pre_2
Introduction and Basis of Presentation (Details) | Mar. 29, 2023 restaurant |
Franchisor Disclosure [Line Items] | |
Number of restaurants | 1,648 |
Denny's Brand | |
Franchisor Disclosure [Line Items] | |
Number of restaurants | 1,594 |
Keke's | |
Franchisor Disclosure [Line Items] | |
Number of restaurants | 54 |
Franchised/licensed Restaurants | |
Franchisor Disclosure [Line Items] | |
Number of restaurants | 1,574 |
Franchised/licensed Restaurants | Denny's Brand | |
Franchisor Disclosure [Line Items] | |
Number of restaurants | 1,528 |
Franchised/licensed Restaurants | Keke's | |
Franchisor Disclosure [Line Items] | |
Number of restaurants | 46 |
Company Restaurants | |
Franchisor Disclosure [Line Items] | |
Number of restaurants | 74 |
Company Restaurants | Denny's Brand | |
Franchisor Disclosure [Line Items] | |
Number of restaurants | 66 |
Company Restaurants | Keke's | |
Franchisor Disclosure [Line Items] | |
Number of restaurants | 8 |
Receivables - Receivables, Net
Receivables - Receivables, Net (Details) - USD ($) $ in Thousands | Mar. 29, 2023 | Dec. 28, 2022 |
Receivables, net: | ||
Trade accounts receivable from franchisees | $ 14,863 | $ 13,314 |
Other receivables from franchisees | 4,469 | 6,731 |
Allowance for doubtful accounts | (287) | (376) |
Receivables, net | 23,443 | 25,576 |
Vendor receivables | ||
Receivables, net: | ||
Other receivables, gross, current | 2,070 | 3,466 |
Credit card receivables | ||
Receivables, net: | ||
Other receivables, gross, current | 707 | 896 |
Other | ||
Receivables, net: | ||
Other receivables, gross, current | $ 1,621 | $ 1,545 |
Goodwill and Intangible Asset_2
Goodwill and Intangible Assets - Schedule of Changes in Carrying Amounts of Goodwill (Details) $ in Thousands | 3 Months Ended |
Mar. 29, 2023 USD ($) | |
Goodwill [Roll Forward] | |
Balance, beginning of period | $ 72,740 |
Reclassifications to assets held for sale | (598) |
Balance, end of period | 72,142 |
Total goodwill | 72,142 |
Denny’s | |
Goodwill [Roll Forward] | |
Balance, beginning of period | 37,527 |
Balance, end of period | 37,527 |
Total goodwill | 37,527 |
Other | |
Goodwill [Roll Forward] | |
Balance, beginning of period | 35,213 |
Balance, end of period | 34,615 |
Total goodwill | $ 34,615 |
Goodwill and Intangible Asset_3
Goodwill and Intangible Assets - Finite-Lived and Indefinite-Lived Intangible Assets (Details) - USD ($) $ in Thousands | Mar. 29, 2023 | Dec. 28, 2022 |
Intangible Assets | ||
Trade names | $ 79,687 | $ 79,687 |
Liquor licenses | 120 | 120 |
Finite-Lived Intangible Assets [Line Items] | ||
Accumulated Amortization | 6,374 | 5,962 |
Intangible assets, net | 100,996 | 100,996 |
Reacquired franchise rights | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | 10,489 | 10,489 |
Accumulated Amortization | 5,947 | 5,697 |
Franchise agreements | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | 10,700 | 10,700 |
Accumulated Amortization | $ 427 | $ 265 |
Goodwill and Intangible Asset_4
Goodwill and Intangible Assets - Narrative (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 29, 2023 | Mar. 30, 2022 | |
Goodwill and Intangible Assets Disclosure [Abstract] | ||
Amortization expense for intangible assets | $ 0.4 | $ 0.3 |
Other Current Liabilities (Deta
Other Current Liabilities (Details) - USD ($) $ in Thousands | Mar. 29, 2023 | Dec. 28, 2022 |
Other Liabilities, Current [Abstract] | ||
Accrued payroll | $ 13,546 | $ 17,903 |
Current portion of liability for insurance claims | 3,415 | 3,492 |
Accrued taxes | 4,035 | 4,452 |
Accrued advertising | 5,820 | 6,069 |
Gift cards | 6,286 | 7,675 |
Accrued legal settlements | 5,538 | 5,446 |
Other | 11,767 | 11,725 |
Other current liabilities | $ 50,407 | $ 56,762 |
Fair Value of Financial Instr_3
Fair Value of Financial Instruments - Schedule of Financial Assets and Liabilities Measured at Fair Value on a Recurring Basis (Details) - Recurring - USD ($) $ in Thousands | Mar. 29, 2023 | Dec. 28, 2022 |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Deferred compensation plan investments | $ 10,742 | $ 10,818 |
Interest rate swaps, net | 7,988 | 20,047 |
Investments | 3,051 | 1,746 |
Total | 21,781 | 32,611 |
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 | 10,742 | 10,818 |
Interest rate swaps, net | 0 | 0 |
Investments | 0 | 0 |
Total | 10,742 | 10,818 |
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, net | 7,988 | 20,047 |
Investments | 3,051 | 1,746 |
Total | 11,039 | 21,793 |
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, net | 0 | 0 |
Investments | 0 | 0 |
Total | $ 0 | $ 0 |
Fair Value of Financial Instr_4
Fair Value of Financial Instruments - Assets and Liabilities on Nonrecurring Basis (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 29, 2023 | Mar. 30, 2022 | |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Impairment charges | $ 129 | $ 0 |
Fair Value, Nonrecurring | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Impairment charges | 100 | |
Fair Value, Nonrecurring | Significant Other Observable Inputs (Level 2) | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Assets held for sale | $ 100 |
Long-Term Debt - Narrative (Det
Long-Term Debt - Narrative (Details) - USD ($) | 3 Months Ended | ||||
Mar. 29, 2023 | Mar. 30, 2022 | Mar. 28, 2023 | Dec. 28, 2022 | Dec. 29, 2021 | |
Line of Credit Facility [Line Items] | |||||
Notional Amount | $ 196,000,000 | ||||
Outstanding debt (as percent) | 80% | ||||
Fair Value | $ 7,988,000 | ||||
Total shareholders' deficit | (45,002,000) | $ (47,755,000) | $ (37,116,000) | $ (65,265,000) | |
Accumulated Other Comprehensive Loss, Net | |||||
Line of Credit Facility [Line Items] | |||||
Total shareholders' deficit | (42,340,000) | (48,689,000) | (42,697,000) | $ (54,470,000) | |
Derivatives | |||||
Line of Credit Facility [Line Items] | |||||
Reclassification (less than) | 56,000 | ||||
Derivatives | |||||
Line of Credit Facility [Line Items] | |||||
Reclassification (less than) | (930,000) | ||||
Total shareholders' deficit | (41,852,000) | $ (42,142,000) | |||
Interest Rate Swap 2020-2033 | |||||
Line of Credit Facility [Line Items] | |||||
Notional Amount | 26,000,000 | ||||
Termination fee | 1,500,000 | ||||
Fair Value | 2,093,000 | ||||
Reclassification (less than) | 100,000 | ||||
Interest Rate Swap 2020-2033 | Maximum | |||||
Line of Credit Facility [Line Items] | |||||
Notional Amount | 335,000,000 | $ 425,000,000 | |||
Interest Rate Swap 2020-2033 | Derivatives | |||||
Line of Credit Facility [Line Items] | |||||
Expected reclassification within next twelve months | 100,000 | ||||
Interest Rate Swaps 2018 | |||||
Line of Credit Facility [Line Items] | |||||
Fair Value | 400,000 | ||||
Interest Rate Swaps 2018 | Accumulated Other Comprehensive Loss, Net | |||||
Line of Credit Facility [Line Items] | |||||
Fair Value | 300,000 | ||||
Effective Interest Rate Swaps | |||||
Line of Credit Facility [Line Items] | |||||
Derivative asset | 8,000,000 | ||||
Expected reclassification within next twelve months | 4,900,000 | ||||
Dedesignated Interest Rate Swaps | Other Nonoperating Income (Expense) | |||||
Line of Credit Facility [Line Items] | |||||
Unrealized gain (loss) on derivatives | (10,600,000) | 20,300,000 | |||
Dedesignated Interest Rate Swaps | Derivatives | |||||
Line of Credit Facility [Line Items] | |||||
Expected reclassification within next twelve months | 300,000 | ||||
Dedesignated Interest Rate Swaps | Derivatives | |||||
Line of Credit Facility [Line Items] | |||||
Reclassification (less than) | 100,000 | $ 100,000 | |||
Dedesignated Interest Rate Swaps | Derivatives | |||||
Line of Credit Facility [Line Items] | |||||
Total shareholders' deficit | $ 64,100,000 | ||||
Senior Secured Revolver | |||||
Line of Credit Facility [Line Items] | |||||
Line of credit facility, term (in years) | 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 | 264,000,000 | ||||
Availability under the credit facility | $ 123,700,000 | ||||
Commitment fee, percent | 0.35% | ||||
Weighted-average interest rate | 6.90% | 6.37% | |||
Senior Secured Revolver | Interest Rate Swap | |||||
Line of Credit Facility [Line Items] | |||||
Weighted-average interest rate | 5.34% | 5.31% | |||
Senior Secured Revolver | LIBOR | |||||
Line of Credit Facility [Line Items] | |||||
Basis spread on variable rate debt (as a percent) | 2.25% | ||||
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 | $ 12,300,000 |
Long-Term Debt - Interest Rate
Long-Term Debt - Interest Rate Swaps (Details) - USD ($) | Mar. 29, 2023 | Mar. 28, 2023 |
Derivative [Line Items] | ||
Notional Amount | $ 196,000,000 | |
Fair Value | 7,988,000 | |
Interest Rate Swap 2018-2025 | ||
Derivative [Line Items] | ||
Notional Amount | 120,000,000 | |
Fair Value | $ 3,969,000 | |
Fixed Rate | 2.44% | |
Interest Rate Swap 2018-2026 | ||
Derivative [Line Items] | ||
Notional Amount | $ 50,000,000 | |
Fair Value | $ 1,926,000 | |
Fixed Rate | 2.46% | |
Interest Rate Swap 2020-2033 | ||
Derivative [Line Items] | ||
Notional Amount | $ 26,000,000 | |
Fair Value | $ 2,093,000 | |
Fixed Rate | 3.19% | |
Interest Rate Swap 2020-2033 | Maximum | ||
Derivative [Line Items] | ||
Notional Amount | $ 335,000,000 | $ 425,000,000 |
Revenues - Schedule of Disaggre
Revenues - Schedule of Disaggregation of Revenue (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 29, 2023 | Mar. 30, 2022 | |
Disaggregation of Revenue [Line Items] | ||
Total operating revenue | $ 117,471 | $ 103,107 |
Company restaurant sales | ||
Disaggregation of Revenue [Line Items] | ||
Total operating revenue | 53,452 | 43,976 |
Royalties | ||
Disaggregation of Revenue [Line Items] | ||
Total operating revenue | 30,027 | 26,525 |
Advertising revenue | ||
Disaggregation of Revenue [Line Items] | ||
Total operating revenue | 19,668 | 18,206 |
Initial and other fees | ||
Disaggregation of Revenue [Line Items] | ||
Total operating revenue | 4,990 | 4,507 |
Occupancy revenue | ||
Disaggregation of Revenue [Line Items] | ||
Total operating revenue | 9,334 | 9,893 |
Franchise and license revenue | ||
Disaggregation of Revenue [Line Items] | ||
Total operating revenue | $ 64,019 | $ 59,131 |
Revenues - Schedule of Componen
Revenues - Schedule of Components of Lease Income (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 29, 2023 | Mar. 30, 2022 | |
Revenue from Contract with Customer [Abstract] | ||
Operating lease revenue | $ 6,871 | $ 7,418 |
Variable lease revenue | 2,463 | 2,475 |
Total occupancy revenue | $ 9,334 | $ 9,893 |
Revenues - Schedule of Compon_2
Revenues - Schedule of Components of the Change in Deferred Franchise Revenue (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended |
Mar. 29, 2023 | Dec. 28, 2022 | |
Movement In Deferred Revenue Roll Forward | ||
Balance, December 28, 2022 | $ 20,751 | |
Fees received from franchisees | 455 | |
Revenue recognized, net | (745) | |
Balance, March 29, 2023 | 20,461 | $ 20,751 |
Less current portion included in other current liabilities | 2,210 | |
Deferred franchise revenue included in other noncurrent liabilities | $ 18,251 | |
Deferred revenue recognized | $ 700 |
Revenues - Change In Contract A
Revenues - Change In Contract Assets (Details) $ in Thousands | 3 Months Ended |
Mar. 29, 2023 USD ($) | |
Contract with Customer, Asset, Allowance for Credit Loss [Roll Forward] | |
Balance, December 28, 2022 | $ 5,361 |
Franchisee deferred costs | 942 |
Contract asset amortization | (291) |
Balance, March 29, 2023 | 6,012 |
Less current portion included in other current assets | 839 |
Contract assets included in other noncurrent assets | $ 5,173 |
Revenues - Narrative (Details)
Revenues - Narrative (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |
Mar. 29, 2023 | Mar. 30, 2022 | Dec. 28, 2022 | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |||
Contract assets | $ 6,012 | $ 5,361 | |
Revenue recognized | 117,471 | $ 103,107 | |
Receivables, net | 23,443 | 25,576 | |
Liability balance | 2,210 | ||
Deferred revenue recognized | 700 | ||
Gift Card Redemption | |||
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |||
Liability balance | 6,300 | 7,700 | |
Deferred revenue recognized | 200 | ||
Kitchen Modernization Program For Franchise Restaurants | |||
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |||
Revenue recognized | 2,200 | $ 2,200 | |
Inventory related to kitchen equipment rollout | 1,300 | 3,600 | |
Receivables, net | $ 4,700 | $ 6,600 |
Operating (Gains), Losses and_3
Operating (Gains), Losses and Other Charges, Net - Schedule of Operating Gains Losses and Other Charges, Net (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 29, 2023 | Mar. 30, 2022 | |
Other Income and Expenses [Abstract] | ||
Gains on sales of assets and other, net | $ (1,522) | $ (146) |
Restructuring charges and exit costs | 64 | 146 |
Impairment charges | 129 | 0 |
Operating (gains), losses and other charges, net | $ (1,329) | $ 0 |
Operating (Gains), Losses and_4
Operating (Gains), Losses and Other Charges, Net - Narrative (Details) $ in Thousands | 3 Months Ended | ||
Mar. 29, 2023 USD ($) restaurant parcel | Mar. 30, 2022 USD ($) | Dec. 28, 2022 USD ($) parcel | |
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||
Impairment charges | $ 129 | $ 0 | |
Assets held for sale | $ 2,312 | $ 1,403 | |
Number of restaurants | restaurant | 1,648 | ||
Severance and other restructuring charges | $ 400 | 700 | |
Held-for-sale | |||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||
Impairment charges | 100 | ||
Assets held for sale | 2,300 | 1,400 | |
Property | 1,400 | 1,100 | |
Goodwill | 600 | ||
Other assets | $ 300 | $ 300 | |
Number of real estate properties | parcel | 3 | 4 | |
Number of restaurants | restaurant | 3 |
Operating (Gains), Losses and_5
Operating (Gains), Losses and Other Charges, Net - Schedule of Restructuring Charges and Exit Costs (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 29, 2023 | Mar. 30, 2022 | |
Restructuring charges and exit costs [Abstract] | ||
Exit costs | $ 0 | $ 12 |
Severance and other restructuring charges | 64 | 134 |
Total restructuring charges and exit costs | $ 64 | $ 146 |
Share-Based Compensation - Sche
Share-Based Compensation - Schedule of Total Share-based Compensation (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 29, 2023 | Mar. 30, 2022 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Total share-based compensation | $ 3,094 | $ 4,015 |
Employee share awards | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Total share-based compensation | 2,847 | 3,794 |
Restricted stock units for board members | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Total share-based compensation | $ 247 | $ 221 |
Share-Based Compensation - Narr
Share-Based Compensation - Narrative (Details) $ / shares in Units, shares in Millions, $ in Millions | 3 Months Ended |
Mar. 29, 2023 USD ($) $ / shares shares | |
Certain Employee | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Unrecognized compensation cost | $ | $ 24.1 |
Unrecognized contractual term (in years) | 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) | 0.3 |
Fair value of units granted (in dollars per share) | $ / shares | $ 18.36 |
PSUs, Adjusted EPS | Certain Employee | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Grants in periods (in shares) | 0.3 |
Fair value of units granted (in dollars per share) | $ / shares | $ 11.92 |
Performance Shares | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Compensation cost, straight-line basis (in shares) | 0.5 |
Compensation cost, graded-vesting basis (in shares) | 0.1 |
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% |
Performance Shares | Employee Share Awards | Maximum | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Percentage of target achievement | 200% |
Restricted Stock Units | Certain Employee | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Grants in periods (in shares) | 0.7 |
Fair value of units granted (in dollars per share) | $ / shares | $ 11.85 |
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 (in years) | 1 month 6 days |
PSUs and RSUs | Certain Employee | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Common stock, shares issued (in shares) | 0.5 |
Shares paid for tax withholding (in shares) | 0.3 |
Income Taxes (Details)
Income Taxes (Details) | 3 Months Ended | |
Mar. 29, 2023 | Mar. 30, 2022 | |
Income Tax Disclosure [Abstract] | ||
Effective tax rate expense (benefit), percent | 61.50% | 27.10% |
Share-based compensation, percent | 36.60% |
Net Income Per Share (Details)
Net Income Per Share (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | |
Mar. 29, 2023 | Mar. 30, 2022 | |
Earnings Per Share [Abstract] | ||
Net income | $ 597 | $ 21,855 |
Weighted average shares outstanding - basic (in shares) | 57,638 | 63,343 |
Effect of dilutive share-based compensation awards (in shares) | 202 | 237 |
Weighted average shares outstanding - diluted (in shares) | 57,840 | 63,580 |
Net income per share - basic (in dollars per share) | $ 0.01 | $ 0.35 |
Net income per share - diluted (in dollars per share) | $ 0.01 | $ 0.34 |
Anti-dilutive share-based compensation awards (in shares) | 807 | 829 |
Shareholders' Deficit - Narrati
Shareholders' Deficit - Narrative (Details) - USD ($) shares in Thousands | 3 Months Ended | |||
Mar. 29, 2023 | Mar. 30, 2022 | Dec. 28, 2022 | Dec. 25, 2019 | |
Equity, Class of Treasury Stock [Line Items] | ||||
Purchase of treasury stock (in shares) | 800 | |||
Purchase of treasury stock | $ 8,967,000 | $ 11,865,000 | ||
Remaining shares to be repurchased | $ 143,600,000 | |||
Treasury stock, at cost (in shares) | 9,076 | 8,270 | ||
Share Repurchase Program 2019 | ||||
Equity, Class of Treasury Stock [Line Items] | ||||
Share repurchase, authorized amount | $ 250,000,000 | |||
Purchase of treasury stock | $ 106,400,000 |
Shareholders' Deficit - Compone
Shareholders' Deficit - Components of Accumulated Other Comprehensive Income (Loss) (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 29, 2023 | Mar. 30, 2022 | |
AOCI Attributable to Parent, Net of Tax [Roll Forward] | ||
Balance as of beginning of period | $ (37,116) | $ (65,265) |
Income tax expense related to items of other comprehensive income (loss) | (121) | |
Balance as of end of period | (45,002) | (47,755) |
Defined Benefit Plans | ||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | ||
Balance as of beginning of period | (555) | |
Income tax expense related to items of other comprehensive income (loss) | (22) | |
Balance as of end of period | (488) | |
Amortization of net loss | ||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | ||
Reclassification | 89 | |
Derivatives | ||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | ||
Balance as of beginning of period | (42,142) | |
Reclassification | (930) | |
Changes in the fair value of cash flow hedges | 1,263 | |
Income tax expense related to items of other comprehensive income (loss) | (99) | |
Balance as of end of period | (41,852) | |
Amortization of unrealized losses related to interest rate swaps to interest expense, net | ||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | ||
Reclassification | 56 | |
Accumulated Other Comprehensive Loss, Net | ||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | ||
Balance as of beginning of period | (42,697) | (54,470) |
Balance as of end of period | $ (42,340) | $ (48,689) |
Supplemental Cash Flow Inform_3
Supplemental Cash Flow Information (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 29, 2023 | Mar. 30, 2022 | |
Supplemental Cash Flow Information [Abstract] | ||
Income taxes paid, net | $ 489 | $ 449 |
Interest paid | 4,253 | 2,849 |
Noncash investing and financing activities: | ||
Issuance of common stock, pursuant to share-based compensation plans | 5,257 | 4,081 |
Execution of finance leases | 14 | 133 |
Treasury stock payable | $ 468 | $ 0 |
Segment Reporting (Details)
Segment Reporting (Details) $ in Thousands | 3 Months Ended | ||
Mar. 29, 2023 USD ($) segment | Mar. 30, 2022 USD ($) | Dec. 28, 2022 USD ($) | |
Segment Reporting [Abstract] | |||
Number of operating segments | segment | 2 | ||
Segment Reporting Information [Line Items] | |||
Total operating revenue | $ 117,471 | $ 103,107 | |
General and administrative expenses | 20,118 | 16,958 | |
Depreciation and amortization | 3,656 | 3,548 | |
Operating (gains), losses and other charges, net | (1,329) | 0 | |
Total other operating expenses | 22,445 | 20,506 | |
Operating income | 16,147 | 13,307 | |
Interest expense, net | 4,505 | 2,960 | |
Other nonoperating expense (income), net | 10,093 | (19,615) | |
Net income before income taxes | 1,549 | 29,962 | |
Provision for income taxes | 952 | 8,107 | |
Net income | 597 | 21,855 | |
Total assets | 480,447 | $ 498,335 | |
Operating Segments | |||
Segment Reporting Information [Line Items] | |||
Total operating revenue | 117,471 | 103,107 | |
Total restaurant-level operating margin | 38,592 | 33,813 | |
Total assets | 480,447 | 498,335 | |
Operating Segments | Denny’s | |||
Segment Reporting Information [Line Items] | |||
Total operating revenue | 112,230 | 103,107 | |
Total restaurant-level operating margin | 36,640 | 33,813 | |
Total assets | 377,616 | 394,051 | |
Operating Segments | Other | |||
Segment Reporting Information [Line Items] | |||
Total operating revenue | 5,241 | 0 | |
Total restaurant-level operating margin | 1,952 | $ 0 | |
Total assets | $ 102,831 | $ 104,284 |