Published Feb. 21, 2013
Spartanburg-based Denny’s Corp., the franchisor and operator of Denny’s restaurant chains, opened 40 new restaurants systemwide, including six international restaurants, in 2012.
Thirteen of those restaurants opened in the fourth quarter of 2012, including one company restaurant in downtown Las Vegas and one international restaurant in Honduras. The franchise also acquired one franchised restaurant located in the San Diego market for $1.4 million.
Denny’s Corp. reported a 1.3% increase in systemwide, same-store sales during the full year ended Dec. 26, 2012, compared with the year prior. Those sales grew 1.7% during the fourth quarter compared with the year prior.
For the fourth quarter of 2012, franchise and license revenue increased 7.5% to $34.2 million compared with $31.8 million in the prior-year quarter.
“Denny’s delivered another year of solid results while generating our second consecutive year of positive company and franchise same-store sales,” Denny’s President and CEO John Miller said in a news release. “This is a testament to our positioning as America’s diner, emphasizing everyday affordability with attractive limited time only products.”
Company restaurant sales of $81.7 million decreased $16.6 million in the fourth quarter due to 49 fewer equivalent company restaurants. The decrease reflects the continuing impact of selling company restaurants to franchisees as part of its refranchising strategy that was completed at the end of 2012, Denny’s said.
During the quarter, Denny’s closed 11 franchised restaurants, one company restaurant and sold eight company restaurants to franchisees.
“Although we are encouraged about the progress we have made thus far, we believe there is much work to be done in our revitalization plan to drive additional value. In our efforts to increase long-term shareholder value, we will continue to work closely with our franchisees to increase sales, profitability and new restaurant growth through our franchised-focused business model,” Miller said in a news release.
The restaurant chain’s full-year net income of $22.3 million, or $0.23 per diluted share, was impacted by a $7.9 million charge to a nonoperating expense as a result of refinancing its credit facility; $3.7 million of impairment expense; and $7.1 million in gains on the sale of assets, the company said.
Denny’s Corp. is traded on the Nasdaq under “DENN.”