Denny's Corporation (DENN) has reported a 28.71 percent rise in profit for the quarter ended Dec. 28, 2016. The company has earned $11.27 million, or $0.15 a share in the quarter, compared with $8.76 million, or $0.11 a share for the same period last year. On the other hand, adjusted net income for the quarter stood at $12.58 million, or $0.17 a share compared with $8.90 million or $0.11 a share, a year ago.
Revenue during the quarter grew 4.50 percent to $129.60 million from $124.02 million in the previous year period. Gross margin for the quarter expanded 171 basis points over the previous year period to 32.26 percent. Total expenses were 87.64 percent of quarterly revenues, down from 88.15 percent for the same period last year. This has led to an improvement of 51 basis points in operating margin to 12.36 percent.
Operating income for the quarter was $16.02 million, compared with $14.70 million in the previous year period.
However, the adjusted EBITDA for the quarter stood at $25.82 million compared with $21.92 million in the prior year period. At the same time, adjusted EBITDA margin improved 224 basis points in the quarter to 19.92 percent from 17.68 percent in the last year period.
"We are pleased with our performance during the fourth quarter and full year, particularly in light of the pervasive challenges within the restaurant industry", commented John Miller, Denny's President and Chief Executive Officer. "Throughout the year, we continued to successfully execute our brand revitalization strategy and delivered an improved and differentiated experience for our guests across food, service, and atmosphere. These efforts resulted in market share gains and impressive growth in company and franchise margins. In addition, we delivered our best year of unit expansion in the past five years. Moving forward, despite an uncertain industry outlook, Denny's remains committed to further elevating the guest experience, consistently growing same-store sales, and expanding the brand across the globe, leading to value creation for all franchisees and shareholders."
For financial year 2017, Denny's Corporation projects revenue to be in the range of $523 million to $532 million.
Working capital remains negative
Working capital of Denny's Corporation was negative $57.46 million on Dec. 28, 2016 compared with negative $65.14 million on Dec. 30, 2015. Current ratio was at 0.38 as on Dec. 28, 2016, up from 0.36 on Dec. 30, 2015.
Days sales outstanding were almost stable at 7 days for the quarter, when compared with the last year period.
At the same time, days payable outstanding went up to 13 days for the quarter from 11 for the same period last year.
Debt moves up
Denny's Corporation has witnessed an increase in total debt over the last one year. It stood at $245.59 million as on Dec. 28, 2016, up 13.83 percent or $29.85 million from $215.74 million on Dec. 30, 2015. Total debt was 80.22 percent of total assets as on Dec. 28, 2016, compared with 72.63 percent on Dec. 30, 2015. Interest coverage ratio deteriorated to 4.82 for the quarter from 5.64 for the same period last year.
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