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$1.57 -0.29 (-15.59%)
12/1/2008 3:59 PM

Denny's Corp (DENN)

CAPS Rating:
***

The Company is America's family-style restaurant chain in terms of market share and number of units. Through its wholly owned subsidiaries, Denny's Holdings, Inc. and Denny's, Inc., it owns and operates the restaurant brand.

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Avatar NetscribeRstrnts (< 20) Submitted: 1/04/07 7:48 AM : Outperform Start Price: $4.77 DENN Score: -25.22

Denny’s is America’s largest full-service family restaurant chain. It is a family-style restaurant chain that owns and operates the Denny's restaurant brand, through its wholly owned subsidiaries Denny's Holdings Inc. and Denny's Inc. The company operates 526 company-owned units and 1,024 franchised and licensed units, which are located in the United States, Canada, Costa Rica, Guam, Mexico, New Zealand and Puerto Rico. Its menu features traditional American-style food such as breakfast items, appetizers, sandwiches, dinner entrees and desserts.

The company recently reported a system wide sales growth of 4.5%, a 12th consecutive quarter of positive growth. The company is back on track and has been reporting an increase in net income since the past three quarters after incurring losses in the previous quarters.

The company is focusing on reducing its leverage and decreasing the associated interest cost. In line with its goal, the company has started reducing its debt by selling off its non-performing assets, which happened in the recent quarter. It has brought the debt balances down by 15% since the end of last year, which has endowed it with the strongest financial position in the last 15 years.

The company has also started making some organizational changes like establishing a new post of Chief Operating Officer to bring in operational efficiencies. Inline with this approach it has also started giving its key employees dual responsibilities to improve the performance.

Denny’s is eying on optimizing its restaurant portfolio by closing underperforming units, refranchising some company units and developing high volume flagship restaurants. All these initiatives are expected to increase the cash flow and strengthen the company’s financial position to reward its stockholders with good returns.

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Avatar NetscribeRstrnts (< 20) Submitted: 4/18/07 5:09 AM

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Denny’s reported a drop in the same store sales for first quarter of fiscal 2007 after a positive streak of 13 quarters. But the company’s sales performance along with its franchises over the last three year is a clear indication of the direction and relative strength of the Denny’s brand. The company is America’s largest full-service family restaurant chain. It is a family-style restaurant chain that owns and operates the Denny's restaurant brand, through its wholly owned subsidiaries Denny's Holdings Inc. and Denny's Inc

For the fiscal year 2006, Denny's Corporation's revenues rose 2% to $994.0M which reflects an increase in company restaurant sales. Net income before accounting change totaled $30.1M vs. a loss of $7.3M reflecting the increasing operational efficiency in the company. The company has reduced 100M or 18% of its total outstanding debt, which is expected to decrease its interest expense by approximately $11 million. Moreover the company’s operational improvements combined with the focus on asset returns and cash generation positioned it to complete a very successful refinancing in the fourth quarter.

The company’s new promotional offerings and new menu items such as its current mega break fast reinforces its strong value proposition. Moreover in 2007 the company is planning to roll up new appetizers and entres targeted specifically at its late-night customers. The company has recently introduced new sweet and tangy barbecue trio which includes Buffalo wings, chicken strips and shrimp in its new barbecue sauce. All these initiative are expected to keep the company ahead of the competition and help it put forward a robust performance in the coming months.

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