Denny's Corp (DENN) Reports In-Line Q4 EPS, Revenues Beat; Provides FY19 Business Outlook

Denny's Corp (NASDAQ: DENN) reported Q4 EPS of $0.18, in-line with the analyst estimate of $0.18. Revenue for the quarter came in at $159.5 million versus the consensus estimate of $158.23 million.

• Total Operating Revenue grew 17.7% to $159.5 million, primarily due to the benefit of revenue recognition changes.
• Domestic system-wide same-store sales** grew 1.4%, including increases of 2.1% at company restaurants and 1.2% at domestic franchised restaurants.
• Completed 41 remodels at franchised restaurants.
• Operating Income increased 4.8% to $19.8 million.
• Company Restaurant Operating Margin* was $16.9 million and Franchise Operating Margin* was $26.6 million.
• Net Income was $11.5 million, or $0.18 per diluted share.
• Adjusted Net Income* was $11.7 million, or $0.18 per diluted share.
• Adjusted EBITDA* was $28.4 million.
• Adjusted Free Cash Flow* increased 15.0% to $17.7 million.
• Allocated $30.5 million towards share repurchases.

John Miller, President and Chief Executive Officer, stated, “Denny's delivered its eighth consecutive year of positive system-wide same-store sales**. The Company's total operating revenue growth coupled with a disciplined focus on costs also resulted in strong cash flow generation. Our refranchising and development strategy is now under way, and we look forward to further evolving into a franchisor of choice that provides more focused support services while yielding a higher quality, more asset-light business model."

Business Outlook

The following full year 2019 estimates are based on management's expectations at this time:

• Same-store sales** growth at company and domestic franchised restaurants between 0% and 2%.
• 35 to 45 new restaurant openings, with approximately flat net restaurant growth.
• Company Restaurant Operating Margin* between 15.0% and 16.5% and Franchise Operating Margin* between 46.5% and 48.0%.
• Total general and administrative expenses between $66 and $69 million.
• Adjusted EBITDA* between $95 and $100 million.
• Net interest expense between $21 and $23 million.
• Effective income tax rate between 20% and 23% with cash taxes between $13 and $16 million, including between $9 and $12 million related to anticipated gains from refranchising transactions.
• Cash capital expenditures between $35 and $40 million, including between $20 and $25 million of real estate acquisitions through like-kind exchanges.
• Adjusted Free Cash Flow* between $23 and $26 million.

For earnings history and earnings-related data on Denny's Corp (DENN) click here.

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