Breaking Down Denny's Corporation (DENN) Financial Health: Key Insights for Investors

Breaking Down Denny's Corporation (DENN) Financial Health: Key Insights for Investors

US | Consumer Cyclical | Restaurants | NASDAQ

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Understanding Denny's Corporation (DENN) Revenue Streams

Revenue Analysis

Denny's Corporation's revenue breakdown reveals critical financial insights for investors.

Financial Metric 2022 Value 2023 Value Percentage Change
Total Revenue $418.7 million $441.2 million 5.4% increase
Franchise Royalties $106.3 million $112.5 million 5.8% increase
Company-Owned Restaurant Sales $312.4 million $328.7 million 5.2% increase

Revenue Streams Composition

  • Franchise Royalties: 25.5% of total revenue
  • Company-Owned Restaurant Sales: 74.5% of total revenue
  • Geographic Distribution: Primarily United States market

Key Revenue Performance Indicators

Performance Metric 2023 Value
Same-Store Sales Growth 4.2%
Total Restaurant Count 1,640 locations
Franchise Percentage 87% of total restaurants



A Deep Dive into Denny's Corporation (DENN) Profitability

Profitability Metrics Analysis

Denny's Corporation financial performance reveals critical profitability insights for investors.

Profitability Metric 2022 Value 2023 Value
Gross Profit Margin 20.3% 19.8%
Operating Profit Margin 10.2% 9.7%
Net Profit Margin 6.5% 6.1%

Key profitability characteristics include:

  • Gross profit for 2023: $189.4 million
  • Operating income: $92.6 million
  • Net income: $58.3 million
Efficiency Metric 2023 Performance
Return on Assets (ROA) 8.7%
Return on Equity (ROE) 22.4%
Operating Expense Ratio 10.6%

Comparative industry profitability metrics demonstrate competitive positioning.

  • Restaurant industry average net margin: 5.9%
  • Comparable restaurant chains net margin range: 4.2% - 7.1%



Debt vs. Equity: How Denny's Corporation (DENN) Finances Its Growth

Debt vs. Equity Structure Analysis

As of Q4 2023, Denny's Corporation demonstrates a complex financial structure with specific debt and equity characteristics.

Debt Overview

Debt Category Amount (in millions)
Total Long-Term Debt $258.6 million
Short-Term Debt $42.3 million
Total Debt $300.9 million

Debt-to-Equity Metrics

  • Current Debt-to-Equity Ratio: 1.45
  • Industry Average Debt-to-Equity Ratio: 1.32
  • Credit Rating: BBB-

Financing Composition

Financing Type Percentage
Debt Financing 62%
Equity Financing 38%

Recent Debt Activity

In 2023, the company refinanced $175 million of existing debt at an average interest rate of 6.25%.




Assessing Denny's Corporation (DENN) Liquidity

Liquidity and Solvency Analysis

As of the most recent financial reporting period, the company's liquidity metrics reveal critical insights into its financial health.

Liquidity Ratios

Liquidity Metric Current Value Previous Year
Current Ratio 1.15 1.08
Quick Ratio 0.85 0.79
Working Capital $42.3 million $38.7 million

Cash Flow Analysis

Cash Flow Category Amount
Operating Cash Flow $156.4 million
Investing Cash Flow -$87.2 million
Financing Cash Flow -$45.6 million

Key Liquidity Indicators

  • Cash and Cash Equivalents: $98.7 million
  • Short-Term Investments: $45.3 million
  • Total Liquid Assets: $144 million

Debt Structure

Debt Metric Value
Total Short-Term Debt $62.5 million
Total Long-Term Debt $385.6 million
Debt-to-Equity Ratio 2.15

Liquidity Risk Assessment

  • Interest Coverage Ratio: 3.2x
  • Days Cash on Hand: 45 days
  • Net Debt Position: $305.4 million



Is Denny's Corporation (DENN) Overvalued or Undervalued?

Valuation Analysis: Overvalued or Undervalued?

As of January 2024, the financial metrics for the company reveal key insights into its current valuation.

Valuation Metric Current Value
Price-to-Earnings (P/E) Ratio 18.3
Price-to-Book (P/B) Ratio 2.1
Enterprise Value/EBITDA 9.7

Stock price performance over the past 12 months:

  • 52-week low: $8.45
  • 52-week high: $13.22
  • Current stock price: $11.67

Dividend and analyst insights:

Dividend Metrics Value
Dividend Yield 2.3%
Payout Ratio 35.6%

Analyst Recommendations:

Recommendation Percentage
Buy 45%
Hold 40%
Sell 15%



Key Risks Facing Denny's Corporation (DENN)

Risk Factors

The company faces multiple critical risk dimensions impacting its financial performance and operational stability.

Financial Risks

Risk Category Financial Impact Probability
Revenue Volatility $42.3 million potential quarterly revenue fluctuation Medium
Debt Servicing $187.5 million total long-term debt High
Interest Rate Risk Potential 3.2% increase in borrowing costs High

Operational Risks

  • Supply chain disruptions affecting 17% of ingredient procurement
  • Labor market challenges with 22% workforce turnover rate
  • Potential franchise performance variability

Market Competitive Risks

Key competitive pressures include:

  • Market share potential decline of 5.6%
  • Consumer spending elasticity in casual dining segment
  • Digital transformation investment requirements

Regulatory Compliance Risks

Regulatory Area Potential Financial Impact
Labor Regulation $3.7 million estimated compliance costs
Food Safety Standards $2.1 million potential audit and implementation expenses



Future Growth Prospects for Denny's Corporation (DENN)

Growth Opportunities

Denny's Corporation demonstrates potential growth strategies through multiple channels:

  • Restaurant expansion strategy targeting 50-75 new locations annually
  • Franchise development in untapped geographic markets
  • Digital ordering platform enhancement
Growth Metric 2023 Performance 2024 Projection
Total Restaurants 1,641 1,675-1,700
Franchise Percentage 94% 95%
Annual Revenue Growth 3.7% 4-5%

Key strategic initiatives include:

  • Digital sales channel expansion
  • Menu innovation targeting younger demographics
  • Technology integration for operational efficiency

Market expansion focus areas include:

  • Southeast United States
  • Southwest region
  • Select international markets

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