Denny`s Corporation Reports Results for the Third Quarter 2009

* Reuters is not responsible for the content in this press release.

Thu Oct 29, 2009 4:34pm EDT

http://www.businesswire.com/news/home/20091029006482/en

Denny`s Updates Key Components of Full Year 2009 Guidance
SPARTANBURG, S.C.--(Business Wire)--
Denny`s Corporation (NASDAQ:DENN) today reported results for the third quarter
ended September 30, 2009. 

Third Quarter Highlights

* Opened nine new franchised restaurants and sold seven company restaurants
under Denny`s Franchise Growth Initiative (FGI) - franchised restaurants now 83%
of Denny`s system 
* Net income was $10.0 million, which included $3.1 million from gains on sales
of assets 
* Adjusted income before taxes grew 6.9% to $9.1 million 
* Reduced debt by an additional $9.8 million 
* Same-store sales decreased 6.6% at company units and 7.3% at franchised units 
* Company restaurant operating margin improved 3.0 percentage points to 16.3% of
sales, primarily due to favorable workers` compensation claims developments

Nelson Marchioli, President and Chief Executive Officer, stated, "We continue to
execute towards our strategic goals of building new units, refranchising company
units, paying down debt, and growing profitability. Our ability to accomplish
these goals despite the on-going same-store sales challenges faced by the
industry and Denny`s is evidence of the strength of the Denny`s brand." 

"Although we are making progress towards our strategic goals, our sales trends
must improve. Denny`s is focused on driving sales by delivering new and
craveable products at an affordable price and with great guest service. We are
confident our focus, which includes strengthened communication with our target
customers, will drive improvement to guest counts over time." 

Third Quarter Results

For the third quarter of 2009, Denny`s reported total operating revenue,
including company restaurant sales and franchise revenue, of $146.1 million
compared with $189.3 million in the prior year quarter. Company restaurant sales
decreased $44.0 million due primarily to 89 fewer equivalent company restaurants
compared with the prior year quarter resulting from the sale of company
restaurants to franchisees under FGI. During the third quarter, Denny`s sold
seven restaurants to franchisee operators. Denny`s did not open or close any
company restaurants during the quarter. 

Company restaurant operating margin (as a percentage of company restaurant
sales) for the third quarter was 16.3%, an increase of 3.0 percentage points
compared with the same period last year. Excluding the workers` compensation
benefit of 2.2 percentage points noted below, company operating margin would
have been 14.1%. The improved margin rate was also driven by the factors
discussed below. 

Product costs for the third quarter decreased 1.1 percentage points to 23.1% of
sales due primarily to a higher average guest check, favorable mix impacts, and
solid management at the unit level. This was partially offset by commodity
inflation. 

Payroll and benefit costs decreased 2.4 percentage points to 38.4% of sales.
Excluding $2.3 million of favorable workers` compensation claims developments,
payroll and benefits costs would have been 40.6%. Management and team labor
efficiency gains that were realized through FGI, management staffing level
improvements and crew labor productivity gains were largely offset by sales
deleverage. 

Occupancy costs increased 0.8 percentage points to 6.7% of sales due primarily
to the decrease in same-store sales and the positive development of general
liability claims in the prior year quarter. Utility costs decreased 0.7
percentage points to 5.0% due to lower natural gas and electric rates. Marketing
expenses increased 0.4 percentage points to 3.9% of sales due to the
establishment of local market advertising cooperatives with Denny`s franchisees.
Legal settlement expense decreased 0.4 percentage points. Other costs increased
0.7 percentage points due primarily to the loss of business interruption income
and the subsequent pre-opening expenses incurred as Denny's reopened one of its
company units on the Las Vegas strip. 

For the third quarter of 2009, Denny`s reported franchise and license revenue of
$29.5 million compared with $28.7 million in the prior year quarter. Franchise
revenue increased $0.8 million, or 2.8%, due primarily to an additional 90
equivalent franchise restaurants compared with the prior year period. The growth
in franchise revenue included a $1.5 million increase in occupancy revenue, flat
royalty revenue growth and a $0.7 million decrease in initial and other fee
revenue driven primarily by fewer refranchised units this quarter. During the
third quarter, Denny`s franchisees opened nine new restaurants, closed eight and
purchased seven company restaurants. 

Franchise operating margin decreased $0.7 million, to $19.2 million in the third
quarter. Net occupancy income grew by $0.2 million driven by the FGI program.
This was offset primarily by a decrease in initial fees due to 14 fewer
refranchisings than in the prior year quarter. The increase in royalties driven
by the additional 90 equivalent units was offset by the negative same-store
sales. Franchise operating margin (as a percentage of franchise and license
revenue) for the third quarter was 65.0%, a decrease of 4.5 percentage points
compared with the same period last year. The franchise margin decrease was due
primarily to the increasing contribution of lower-margin occupancy revenue as
leased company restaurant units are in turn subleased to franchisees through
FGI. 

General and administrative expenses for the third quarter decreased $0.6
million, or 3.9%, from the same period last year resulting primarily from
Denny`s continued migration towards a more franchised based company. This
benefit was partially offset by a $1.0 million increase in deferred compensation
costs and a $0.3 million increase in share-based compensation costs. 

Depreciation and amortization expense for the third quarter declined by $2.1
million compared with the prior year period primarily as a result of the sale of
restaurants and real estate over the past year. Operating gains, losses and
other charges, net, which reflect restructuring charges, exit costs, impairment
charges and gains or losses on the sale of assets, decreased $1.6 million in the
quarter. This decrease was primarily the result of a $2.2 million decrease in
gains on sales of company restaurants and real estate. 

Operating income for the third quarter decreased $2.1 million from the prior
year period to $18.6 million. Excluding gains, losses, and other charges in both
periods, operating income decreased only $0.4 million despite a $43.2 million
decrease in total operating revenue attributable primarily to the sale of
company restaurants. 

Interest expense for the third quarter decreased $0.6 million, or 7.4%, to $8.1
million as a result of a $32.3 million reduction in debt from the prior year
period. Other nonoperating income increased $1.0 million in the third quarter
due primarily to the recognition of unrealized gains and losses related to our
interest rate swap and natural gas hedge. 

Denny`s reported net income of $10.0 million for the third quarter, or $0.10 per
diluted common share, compared with prior year period net income of $10.6
million, or $0.11 per diluted common share. Adjusted income before taxes,
Denny`s metric for earnings guidance, increased $0.6 million, or 6.9%, in the
third quarter to $9.1 million. This measure, which is used as an internal
profitability metric, excludes restructuring charges, exit costs, impairment
charges, asset sale gains and losses, share-based compensation, other
nonoperating expenses and income taxes. 

Franchise Growth Initiative (FGI)

Denny`s continued its strategic initiative to increase franchise restaurant
development through the sale of certain company restaurants. During the third
quarter, the company sold seven restaurants to four franchisee operators under
FGI bringing the number sold since the program began in early 2007 to 268 or 52%
of the pre-FGI company restaurants. 

Denny`s ended the third quarter of 2009 with a system mix of 83% franchised and
licensed restaurants and 17% company restaurants compared with 66% franchised
and licensed restaurants and 34% company restaurants before the FGI program
began in the first quarter of 2007. 

Year-to-date 2009, the sale of company restaurant operations and other real
estate assets generated net sales proceeds of $22.4 million of which $20.7
million was received in cash and the remaining $1.7 million in the form of notes
receivable. The majority of cash proceeds were used to reduce debt by $22.0
million during the first three quarters of 2009. 

Business Outlook

Based on year-to-date results and management`s expectations at this time,
Denny`s is updating the following components of its financial guidance for
full-year 2009 relative to the guidance given in its fourth quarter 2008
earnings release on February 18, 2009. 

Mark Wolfinger, Executive Vice President, Chief Administrative Officer and Chief
Financial Officer, stated, "Denny`s updated fiscal 2009 full year guidance
reflects the top line sales challenge that the industry and Denny`s continues to
confront. Furthermore, the material benefits Denny`s has derived by its ongoing
transition to a franchised focused business model are also incorporated and
include a stronger new unit development pipeline as well as a more predictable
and consistent ability to grow profitability."

 Component - Full Year 2009            Original Guidance    Updated Guidance               
 Franchise Same-Store Sales            (5.0%) to (3.0%)     Low end of original guidance   
 Company Same-Store Sales              (3.0%) to (1.0%)     (3.75%) to (3.0%)              
 New Franchise Units                   30                   More than 30                   
 New Company Units                     3                    1                              
 Adjusted EBITDA* ($M)                 $73 to $78           High end of original guidance  
 Adjusted Income Before Taxes* ($M)    $15 to $20           $21 to $22                     
 Cash Capital Expenditure ($M)         $23                  Closer to $20                  


* Key consideration for understanding the Company`s outlook for fiscal 2009
compared with its 2008 results: 2009 includes a typical 52 operating weeks
compared with 2008 which included an additional week that contributed
approximately $3.0 million to income

* Please refer to the historical reconciliation of net income to adjusted income
before taxes and adjusted EBITDA included in the tables below. 

Further Information

Denny`s will provide further commentary on its third quarter 2009 results on its
quarterly investor conference call today, Thursday, October 29th, 2009 at 5:00
p.m. ET. Interested parties are invited to listen to a live broadcast of the
conference call accessible through the investor relations section of Denny`s
website at ir.dennys.com . A replay of the call may be accessed at the same
location later in the day and will remain available for 30 days. 

Denny`s is one of America`s largest full-service family restaurant chains,
consisting of 1,289 franchised and licensed units and 256 company-owned units,
with operations in the United States, Canada, Costa Rica, Guam, Mexico, New
Zealand and Puerto Rico. For further information on Denny`s, including news
releases, links to SEC filings and other financial information, please visit the
Denny`s investor relations website. 

The Company urges caution in considering its current trends and any outlook on
earnings disclosed in this press release.In addition, certain matters discussed
in this release may constitute forward-looking statements.These forward-looking
statements involve risks, uncertainties, and other factors that may cause the
actual performance of Denny`s Corporation, its subsidiaries and underlying
restaurants to be materially different from the performance indicated or implied
by such statements.Words such as "expects", "anticipates", "believes",
"intends", "plans", "hopes", and variations of such words and similar
expressions are intended to identify such forward-looking statements.Except as
may be required by law, the Company expressly disclaims any obligation to update
these forward-looking statements to reflect events or circumstances after the
date of this release or to reflect the occurrence of unanticipated
events.Factors that could cause actual performance to differ materially from the
performance indicated by these forward-looking statements include, among
others:the competitive pressures from within the restaurant industry; the level
of success of the Company`s strategic and operating initiatives, advertising and
promotional efforts; adverse publicity; changes in business strategy or
development plans; terms and availability of capital; regional weather
conditions; overall changes in the general economy, particularly at the retail
level; political environment (including acts of war and terrorism); and other
factors from time to time set forth in the Company`s SEC reports, including but
not limited to the discussion in Management`s Discussion and Analysis and the
risks identified in Item 1A. Risk Factors contained in the Company`s Annual
Report on Form 10-K for the year ended December 31, 2008 (and in the Company`s
subsequent quarterly reports on Form 10-Q).

                                                                                                                                          
 DENNY`S CORPORATION                                                                                                                      
 Condensed Consolidated Statements of Operations                                                                                          
 (Unaudited)                                                                                                                              
                                                                                                                                  
                                                                                Quarter                     Quarter               
                                                                                Ended                       Ended                 
 (In thousands, except per share amounts)                                         9/30/09                    9/24/08              
                                                                                                                                  
 Revenue:                                                                                                                           
                   Company restaurant sales                                      $     116,579             $     160,608       
                   Franchise and license revenue                                       29,485                    28,667        
                                          Total operating revenue                     146,064                   189,275       
 Costs of company restaurant sales                                                      97,591                    139,252       
 Costs of franchise and license revenue                                                 10,308                    8,757         
 General and administrative expenses                                                    14,313                    14,894        
 Depreciation and amortization                                                          7,865                     9,977         
 Operating gains, losses and other charges, net                                         (2,648   )                (4,294   )    
                                          Total operating costs and expenses          127,429                   168,586       
 Operating income                                                                       18,635                    20,689        
 Other expenses:                                                                                                                    
                   Interest expense, net                                               8,117                     8,761         
                   Other nonoperating expense (income), net                            (363     )                677           
                                          Total other expenses, net                   7,754                     9,438         
 Income before income taxes                                                             10,881                    11,251        
 Provision for income taxes                                                             848                       689           
 Net income                                                                       $     10,033              $     10,562        
                                                                                                                                  
                                                                                                                                  
 Net income per share:                                                                                                              
                   Basic                                                         $     0.10                $     0.11          
                   Diluted                                                       $     0.10                $     0.11          
                                                                                                                                  
 Weighted average shares outstanding:                                                                                               
                   Basic                                                               96,506                    95,333        
                   Diluted                                                             99,158                    98,332        


 DENNY`S CORPORATION                                                                                                                   
 Condensed Consolidated Statements of Operations                                                                                       
 (Unaudited)                                                                                                                           
                                                                                                                                  
                                                                              Three Quarters             Three Quarters           
                                                                              Ended                      Ended                    
 (In thousands, except per share amounts)                                       9/30/09                    9/24/08                  
                                                                                                                                  
 Revenue:                                                                                                                           
                   Company restaurant sales                                    $      377,655           $      493,434         
                   Franchise and license revenue                                      89,982                   82,109          
                                          Total operating revenue                    467,637                  575,543         
 Costs of company restaurant sales                                                     324,783                  433,446         
 Costs of franchise and license revenue                                                32,295                   25,448          
 General and administrative expenses                                                   44,067                   46,046          
 Depreciation and amortization                                                         24,592                   30,110          
 Operating gains, losses and other charges, net                                        (6,101   )               (9,980   )      
                                          Total operating costs and expenses         419,636                  525,070         
 Operating income                                                                      48,001                   50,473          
 Other expenses:                                                                                                                    
                   Interest expense, net                                              24,847                   26,845          
                   Other nonoperating expense (income), net                           (1,594   )               4,436           
                                          Total other expenses, net                  23,253                   31,281          
 Income before income taxes                                                            24,748                   19,192          
 Provision for income taxes                                                            1,072                    1,355           
 Net income                                                                     $      23,676            $      17,837          
                                                                                                                                  
 Net income per share:                                                                                                              
                   Basic                                                       $      0.25              $      0.19            
                   Diluted                                                     $      0.24              $      0.18            
                                                                                                                                  
 Weighted average shares outstanding:                                                                                               
                   Basic                                                              96,221                   95,059          
                   Diluted                                                            98,295                   99,191          


                                                                                                                                   
 DENNY`S CORPORATION                                                                                                                    
 Condensed Consolidated Balance Sheets                                                                                                  
 (Unaudited)                                                                                                                            
                                                                                                                                   
 (In thousands)                                                                                   9/30/09           12/31/08     
                                                                                                                                   
 ASSETS                                                                                                                              
                 Current Assets                                                                                                     
                                         Cash and cash equivalents                           $  29,886         $  21,042       
                                         Receivables, net                                       12,620            15,146       
                                         Assets held for sale                                   5,019             2,285        
                                         Other                                                  18,364            14,986       
                                                                                                65,889            53,459       
                                                                                                                                   
                 Property, net                                                                   134,777           159,978      
                 Goodwill                                                                        38,342            40,006       
                 Intangible assets, net                                                          55,997            58,832       
                 Other assets                                                                    35,713            34,920       
                                         Total Assets                                        $  330,718        $  347,195      
                                                                                                                                   
 LIABILITIES AND SHAREHOLDERS` DEFICIT                                                                                               
                 Current Liabilities                                                                                                
                                         Current maturities of notes and debentures          $  2,431          $  1,403        
                                         Current maturities of capital lease obligations        3,549             3,535        
                                         Accounts payable                                       17,550            25,255       
                                         Other current liabilities                              72,260            76,924       
                                                                                                95,790            107,117      
                 Long-Term Liabilities                                                                                              
                                         Notes and debentures, less current maturities          279,496           300,617      
                                         Capital lease obligations, less current maturities     20,125            22,084       
                                         Other                                                  82,037            91,414       
                                                                                                381,658           414,115      
                 Total Liabilities                                                               477,448           521,232      
                 Total Shareholders' Deficit                                                     (146,730  )       (174,037  )  
                 Total Liabilities and Shareholders' Deficit                                  $  330,718        $  347,195      
                                                                                                                                   
 Debt Balances                                                                                                                       
                                                                                                                                   
 (In thousands)                                                                                   9/30/09           12/31/08     
                                                                                                                                   
 Credit facility revolver loans due 2011                                                       $  -              $  -            
 Credit facility term loans due 2012                                                              106,652           126,652      
 Capital leases and other debt                                                                    23,949            25,987       
 Senior notes due 2012                                                                            175,000           175,000      
                 Total Debt                                                                   $  305,601        $  327,639      


                                                                                                                                                                          
 DENNY`S CORPORATION                                                                                                                                                               
 Income, EBITDA and G&A Reconciliations                                                                                                                                            
 (Unaudited)                                                                                                                                                                       
                                                                                                                                                                          
                                                                                                                                                                          
                                                                         Quarter                 Quarter                 Three Quarters            Three Quarters         
 Income and EBITDA Reconciliation                                          Ended                   Ended                   Ended                     Ended                  
 (In millions)                                                             9/30/09                9/24/08                9/30/09                  9/24/08               
                                                                                                                                                                          
 Net Income                                                                $     10.0            $     10.6            $      23.7             $      17.8          
                                                                                                                                                                          
 Provision for income taxes                                                      0.8                   0.7                    1.1                     1.4           
 Operating gains, losses and other charges, net                                  (2.6  )               (4.3  )                (6.1   )                (10.0  )      
 Other nonoperating (income) expense, net                                        (0.4  )               0.7                    (1.6   )                4.4           
 Share-based compensation                                                        1.2                   0.8                    3.9                     2.5           
                                                                                                                                                                          
 Adjusted income before taxes (1)                                          $     9.1             $     8.5             $      21.0             $      16.2          
                                                                                                                                                                          
 Interest expense, net                                                           8.1                   8.8                    24.8                    26.8          
 Depreciation and amortization                                                   7.9                   10.0                   24.6                    30.1          
 Cash payments for restructuring charges and exit costs                          (1.0  )               (3.6  )                (4.6   )                (7.3   )      
 Cash payments for share-based compensation                                      (0.4  )               (0.6  )                (2.2   )                (0.9   )      
                                                                                                                                                                          
 Adjusted EBITDA (1)                                                       $     23.6            $     23.1            $      63.6             $      64.9          
                                                                                                                                                                          
                                                                         Quarter                 Quarter                 Three Quarters            Three Quarters         
 General and Administrative Expenses Reconciliation                        Ended                   Ended                   Ended                     Ended                  
 (In millions)                                                             9/30/09                9/24/08                9/30/09                  9/24/08               
                                                                                                                                                                          
                      Share-based compensation                            $     1.2             $     0.8             $      3.9              $      2.5           
                      Other general and administrative expenses           $     13.1            $     14.0                   40.2             $      43.5          
                      Total general and administrative expenses           $     14.3            $     14.9            $      44.1             $      46.0          
                                                                                                                                                                          
 (1) We believe that, in addition to other financial measures, Adjusted Income Before Taxes and Adjusted EBITDA are appropriate indicators to assist in the evaluation of our operating performance on a period-to-period basis. We also use Adjusted Income and Adjusted EBITDA internally as performance measures for planning purposes, including the preparation of annual operating budgets, and for compensation purposes, including bonuses for certain employees. Adjusted EBITDA is also used to evaluate our ability to 
 service debt because the excluded charges do not have an impact on our prospective debt servicing capability and these adjustments are contemplated in our senior credit facility for the computation of our debt covenant ratios. However, Adjusted Income and Adjusted EBITDA should be considered as a supplement to, not a substitute for, operating income, net income or other financial performance measures prepared in accordance with U.S. generally accepted accounting principles. 


                                                                                                                                        
 DENNY`S CORPORATION                                                                                                                             
 Operating Margins                                                                                                                               
 (Unaudited)                                                                                                                                     
                                                                                                                                        
                                                                                                                                        
                                                                            Quarter                         Quarter                       
                                                                            Ended                           Ended                         
 (In millions)                                                                 9/30/09                         9/24/08                       
                                                                                                                                        
 Company restaurant operations: (2)                                                                                                        
             Company restaurant sales                                             116.6      100.0  %         160.6      100.0  %   
             Costs of company restaurant sales:                                                                                           
                               Product costs                                     26.9       23.1   %         38.8       24.2   %   
                               Payroll and benefits                              44.7       38.4   %         65.6       40.8   %   
                               Occupancy                                         7.8        6.7    %         9.5        5.9    %   
                               Other operating costs:                                                                                    
                                                 Utilities                      5.9        5.0    %         9.1        5.7    %   
                                                 Repairs and maintenance        2.5        2.1    %         3.7        2.3    %   
                                                 Marketing                      4.5        3.9    %         5.7        3.5    %   
                                                 Legal settlements              0.0        0.0    %         0.7        0.4    %   
                                                 Other                          5.3        4.5    %         6.2        3.8    %   
             Total costs of company restaurant sales                          $   97.6       83.7   %     $   139.3      86.7   %   
             Company restaurant operating margin (3)                          $   19.0       16.3   %     $   21.4       13.3   %   
                                                                                                                                        
 Franchise operations: (4)                                                                                                                 
             Franchise and license revenue                                                                                                
             Royalty and license revenue                                      $   17.8       60.4   %     $   17.8       62.1   %   
             Initial and other fee revenue                                        0.7        2.2    %         1.4        4.8    %   
             Occupancy revenue                                                    11.0       37.4   %         9.5        33.1   %   
             Total franchise and license revenue                              $   29.5       100.0  %     $   28.7       100.0  %   
                                                                                                                                        
             Costs of franchise and license revenue                                                                                       
             Direct franchise costs                                           $   1.7        5.7    %     $   1.4        4.9    %   
             Occupancy costs                                                      8.6        29.3   %         7.4        25.6   %   
             Total costs of franchise and license revenue                     $   10.3       35.0   %     $   8.8        30.5   %   
             Franchise operating margin (3)                                   $   19.2       65.0   %     $   19.9       69.5   %   
                                                                                                                                        
                                                                                                                                        
 Total operating revenue (1)                                                   $   146.1      100.0  %     $   189.3      100.0  %   
 Total costs of operating revenue (1)                                              107.9      73.9   %         148.0      78.2   %   
 Total operating margin (1)(3)                                                 $   38.2       26.1   %     $   41.3       21.8   %   
                                                                                                                                        
 Other operating expenses: (1)(3)                                                                                                          
             General and administrative expenses                                  14.3       9.8    %         14.9       7.9    %   
             Depreciation and amortization                                        7.9        5.4    %         10.0       5.3    %   
             Operating gains, losses and other charges, net                       (2.6   )   (1.8   %)        (4.3   )   (2.3   %)  
             Total other operating expenses                                   $   19.5       13.4   %     $   20.6       10.9   %   
                                                                                                                                        
 Operating income (1)                                                          $   18.6       12.8   %     $   20.7       10.9   %   
                                                                                                                                        
                                                                                                                                        
 (1) As a percentage of total operating revenue                                                                                                  
 (2) As a percentage of company restaurant sales                                                                                                 
 (3) Other operating expenses such as general and administrative expenses and depreciation and amortization relate to both company and franchise operations and are not allocated to costs of company restaurant sales and costs of franchise and license revenue. As such, operating margin is considered a non-GAAP financial measure. Operating margins should be considered as a supplement to, not as a substitute for, operating income, net income or other financial measures prepared in accordance with U.S. generally 
 accepted accounting principles.                                                                                                                 
 (4) As a percentage of franchise and license revenue                                                                                            


 DENNY`S CORPORATION                                                                                                                                               
 Operating Margins                                                                                                                                                 
 (Unaudited)                                                                                                                                                       
                                                                                                                                                        
                                                                            Three Quarters                           Three Quarters                         
                                                                            Ended                                    Ended                                  
 (In millions)                                                                 9/30/09                                  9/24/08                                
                                                                                                                                                        
 Company restaurant operations: (2)                                                                                                                        
             Company restaurant sales                                              377.7            100.0  %           493.4            100.0  %    
             Costs of company restaurant sales:                                                                                                           
                               Product costs                                      88.5             23.4   %           119.8            24.3   %    
                               Payroll and benefits                               154.6            40.9   %           208.3            42.2   %    
                               Occupancy                                          24.9             6.6    %           30.0             6.1    %    
                               Other operating costs:                                                                                                    
                                                 Utilities                       18.3             4.8    %           25.5             5.2    %    
                                                 Repairs and maintenance         7.6              2.0    %           11.0             2.2    %    
                                                 Marketing                       14.1             3.7    %           16.9             3.4    %    
                                                 Legal settlements               0.4              0.1    %           1.6              0.3    %    
                                                 Other                           16.4             4.3    %           20.4             4.1    %    
             Total costs of company restaurant sales                          $    324.8            86.0   %      $    433.4            87.8   %    
             Company restaurant operating margin (3)                          $    52.9             14.0   %      $    60.0             12.2   %    
                                                                                                                                                        
 Franchise operations: (4)                                                                                                                                 
             Franchise and license revenue                                                                                                                
             Royalty and license revenue                                      $    53.7             59.7   %      $    51.8             63.1   %    
             Initial and other fee revenue                                         3.6              4.0    %           3.6              4.4    %    
             Occupancy revenue                                                     32.7             36.3   %           26.7             32.5   %    
             Total franchise and license revenue                              $    90.0             100.0  %      $    82.1             100.0  %    
                                                                                                                                                        
             Costs of franchise and license revenue                                                                                                       
             Direct franchise costs                                           $    7.1              7.8    %      $    4.7              5.7    %    
             Occupancy costs                                                       25.2             28.1   %           20.8             25.3   %    
             Total costs of franchise and license revenue                     $    32.3             35.9   %      $    25.4             31.0   %    
             Franchise operating margin (3)                                   $    57.7             64.1   %      $    56.7             69.0   %    
                                                                                                                                                        
 Total operating revenue (1)                                                   $    467.6            100.0  %      $    575.5            100.0  %    
 Total costs of operating revenue (1)                                               357.1            76.4   %           458.9            79.7   %    
 Total operating margin (1)(3)                                                 $    110.6            23.6   %      $    116.6            20.3   %    
                                                                                                                                                        
 Other operating expenses: (1)(3)                                                                                                                          
             General and administrative expenses                                   44.1             9.4    %           46.0             8.0    %    
             Depreciation and amortization                                         24.6             5.3    %           30.1             5.2    %    
             Operating gains, losses and other charges, net                        (6.1   )         (1.3   %)          (10.0  )         (1.7   %)   
             Total other operating expenses                                   $    62.6             13.4   %      $    66.2             11.5   %    
                                                                                                                                                        
 Operating income (1)                                                          $    48.0             10.3   %      $    50.5             8.8    %    
                                                                                                                                                        
                                                                                                                                                        
 (1) As a percentage of total operating revenue                                                                                                                    
 (2) As a percentage of company restaurant sales                                                                                                                   
 (3) Other operating expenses such as general and administrative expenses and depreciation and amortization relate to both company and franchise operations and are not allocated to costs of company restaurant sales and costs of franchise and license revenue. As such, operating margin is considered a non-GAAP financial measure. Operating margins should be considered as a supplement to, not as a substitute for, operating income, net income or other financial measures prepared in accordance with U.S. generally 
 accepted accounting principles.                                                                                                                                   
 (4) As a percentage of franchise and license revenue                                                                                                              


 DENNY`S CORPORATION                                                                                                                                          
 Statistical Data                                                                                                                                             
 (Unaudited)                                                                                                                                                  
                                                                                                                                                    
                                                Quarter                Quarter                  Three Quarters             Three Quarters           
 Same-Store Sales                                 Ended                  Ended                    Ended                      Ended                    
 (increase/(decrease) vs. prior year)                  9/30/09               9/24/08                 9/30/09                  9/24/08         
                                                                                                                                                    
 Same-Store Sales                                                                                                                                     
 Company Restaurants                                   (6.6     %)           (2.7     %)             (2.9     %)              (0.9     %)     
 Franchised Restaurants                                (7.3     %)           (6.1     %)             (4.5     %)              (3.6     %)     
 System-wide Restaurants                               (7.1     %)           (5.1     %)             (4.1     %)              (2.8     %)     
                                                                                                                                                    
 Company Restaurant Sales Detail                                                                                                                      
 Guest Check Average                                   0.8      %            6.7      %              1.1      %               6.3      %      
 Guest Counts                                          (7.3     %)           (8.8     %)             (4.0     %)              (6.7     %)     
                                                                                                                                                    
                                                                                                                                                    
                                                Quarter                Quarter                  Three Quarters             Three Quarters           
 Average Unit Sales                               Ended                  Ended                    Ended                      Ended                    
 ($ in thousands)                                      9/30/09               9/24/08                 9/30/09                  9/24/08         
                                                                                                                                                    
 Company Restaurants                              $    450.2           $     459.4            $      1,364.7           $      1,334.7         
                                                                                                                                                    
 Franchised Restaurants                           $    348.4           $     376.9            $      1,067.2           $      1,111.7         
                                                                                                                                                    
                                                                                                                                                    
                                                                                                                                                    
                                                                       Franchised                                                                   
 Restaurant Unit Activity                         Company                & Licensed               Total                                               
                                                                                                                                                    
 Ending Units 7/1/09                                   263                   1,281                   1,544                                      
                                                                                                                                                    
 Units Opened                                          0                     9                       9                                          
 Units Refranchised                                    (7       )            7                       0                                          
 Units Closed                                          0                     (8       )              (8       )                                 
 Net Change                                            (7       )            8                       1                                          
                                                                                                                                                    
 Ending Units 9/30/09                                  256                   1,289                   1,545                                      
                                                                                                                                                    
 Equivalent Units                                                                                                                                     
 Third Quarter 2009                                    259                   1,285                   1,544                                      
 Third Quarter 2008                                    348                   1,195                   1,543                                      
                                                     (89      )            90                      1                                          
                                                                                                                                                    
                                                                       Franchised                                                                   
 Restaurant Unit Activity                         Company                & Licensed               Total                                               
                                                                                                                                                    
 Ending Units 12/31/08                                 315                   1,226                   1,541                                      
                                                                                                                                                    
 Units Opened                                          1                     29                      30                                         
 Units Refranchised                                    (59      )            59                      0                                          
 Units Closed                                          (1       )            (25      )              (26      )                                 
 Net Change                                            (59      )            63                      4                                          
                                                                                                                                                    
 Ending Units 9/30/09                                  256                   1,289                   1,545                                      
                                                                                                                                                    
 Equivalent Units                                                                                                                                     
 Year-to-Date 2009                                     277                   1,266                   1,543                                      
 Year-to-Date 2008                                     369                   1,177                   1,546                                      
                                                     (92      )            89                      (3       )                                 


Investor Contact
Denny's
Enrique Mayor-Mora, 877-784-7167
or
Media Contact
Hill & Knowlton, 786-553-1542 



Copyright Business Wire 2009

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