 SPARTANBURG, S.C., July 28, 2020 GLOBE NEWSWIRE -- Dennys Corporation NASDAQ: DENN, franchisor and operator of one of Americas largest franchised full-service restaurant chains, today reported results for its second quarter ended June 24, 2020 and provided a business update on the impact of the COVID-19 pandemic on the Companys operations. John Miller, Chief Executive Officer, stated, Through enhanced health and safety training and protocols, Dennys team members continue to work together to protect our guests, employees, and suppliers to serve our communities. I am especially encouraged by their willingness to pivot to new operational standards with respect to our off-premise, curbside, outdoor dining, or dine-in channels, proving that We Love to Feed People during both good and challenging times. These actions, coupled with easing dine-in restrictions, resulted in a sequential increase in sales over the course of the second quarter. Although many states have since reinstated dine-in restrictions due to an increase in COVID-19 cases, we have not experienced a significant drop in sales. We attribute our stabilization to our dedicated Dennys team members who are innovative and eager to adapt to their environment.Miller continued, During the second quarter, we provided additional financial relief to franchisees, while remaining focused on cost savings. Subsequent to the quarter, we closed on an opportunistic capital raise to further fortify what I believe is one of the strongest balance sheets in the industry. As we look ahead, we believe we are well-positioned to effectively navigate further impacts of the pandemic while preparing for eventual and future growth.Second Quarter 2020 Highlights Total Operating Revenue was 40.2 million. Domestic system-wide same-store sales decreased 56.9. Completed 3 remodels, including 2 at franchised restaurants. Operating Loss was 13.5 million. Franchise Operating Margin was 9.8 million, or 39.1 of franchise and license revenue, and Company Restaurant Operating Margin was 4.5 million, or 29.6 of company restaurant sales. Net Loss was 23.0 million, or 0.41 per diluted share. Adjusted Net Loss was 13.7 million, or 0.25 per diluted share. Adjusted EBITDA was 5.1 million. Adjusted Free Cash Flow was 11.5 million.Current TrendsDomestic system-wide same-store sales sequentially improved on a weekly basis during the second quarter ended June 24, 2020, as compared to the equivalent weeks of 2019. During the second quarter, dine-in restrictions continued to ease with most restaurants operating with streamlined menus and reduced operating hours. Due to the recent significant increase in COVID-19 cases, various states reinstated dining room closures, and the Company experienced a slight decline in domestic system-wide same-store sales in fiscal July.In an effort to provide greater transparency due to COVID-19, Dennys is providing the following tables that present second and third quarter weekly results compared to the equivalent fiscal weeks in 2019:Domestic System-Wide Same-Store Sales for the Weeks Ended:Fiscal April: 76Fiscal May: 65Fiscal June: 41 401408415422429506513520527603610617624 79787672726863605547393729 Fiscal July: 391 7017087157221 33424141 1. Preliminary resultsNumber of Domestic Restaurants Operating with Open Dining Rooms for the Weeks Ended:Fiscal AprilFiscal MayFiscal June 401408415422429506513520527603610617624 7222113395216469671,1161,2341,3551,424 Fiscal July 701708715722 1,4301,1241,0321,035 Average unit volumes of off-premise sales have almost doubled from February 2020 to July 2020, supported by temporarily waived delivery fees, new Dine-Thru curbside service programs, and recently launched shareable family meal packs.As of July 22, 2020, 97 of domestic Dennys restaurants were operating, most with take-out and delivery options, streamlined menus, and reduced operating hours, which impacted same-store sales results. Also as of July 22, 2020, 55 Dennys restaurants remain temporarily closed, including 47 domestic franchise restaurants and 8 international franchise restaurants. Additionally, 1,035 domestic restaurants were operating with open dining rooms with capacity limitations across 28 states.LiquidityOn July 6, 2020, the Company raised net proceeds of 69.6 million that were used to pay down its credit facility through the issuance and sale of 8.0 million shares of common stock. Subsequent to these two transactions, the Company had approximately 12.0 million of cash on hand and 237.0 million outstanding on the credit facility, or approximately 100 million of total available liquidity after considering the current liquidity covenant.Pursuant to the underwriting agreement, the Company also granted the underwriters a 30-day option to purchase up to an additional 1.2 million shares of common stock, and currently expects the option will expire unexercised.Second Quarter ResultsDennys total operating revenue was 40.2 million compared to 151.9 million in the prior year quarter. Franchise and license revenue was 25.0 million compared to 56.4 million in the prior year quarter. Company restaurant sales were 15.1 million compared to 95.4 million in the prior year quarter. These changes were primarily due to the impact of COVID-19 on sales, the Companys refranchising and development strategy which was substantially complete by the end of 2019, and the related 3.0 million royalty abatement in the second fiscal quarter of 2020.Franchise Operating Margin was 9.8 million, or 39.1 of franchise and license revenue, compared to 27.6 million, or 48.8, in the prior year quarter. This margin decrease was primarily driven by the impact of COVID-19 on sales and the related 3.0 million royalty abatement, partially offset by an increase in occupancy margin from additional leases and subleases to franchisees as a result of the Companys refranchising and development strategy in 2019.Company Restaurant Operating Margin was 4.5 million, or 29.6 of company restaurant sales, compared to 15.6 million, or 16.4, in the prior year quarter. This margin decrease was primarily due to the impact of COVID-19 on sales, as well as fewer equivalent units through the Companys refranchising and development strategy.Total general and administrative expenses were 13.2 million, compared to 18.5 million in the prior year quarter. This change was due to reductions in performance-based incentive compensation, personnel costs, and share-based compensation expense, partially offset by market valuation changes in the Companys deferred compensation plan liabilities.Interest expense, net was 4.9 million, compared to 5.4 million in the prior year quarter, primarily due to a reduction in financing leases. Dennys ended the quarter with 323.1 million of total debt outstanding, including 307.0 million of borrowings under its credit facility.During the quarter, the Company recorded 11.5 million of other non-cash, nonoperating expenses related to the discontinuance of hedge accounting for a portion of its interest rate hedges. The expenses include a 7.4 million reclassification of amounts previously recorded in accumulated other comprehensive loss, net to expense, 3.8 million related to changes in fair value associated with the portion of interest rate hedges for which hedge accounting was discontinued, and 0.3 million of expense recognized related to amounts remaining in accumulated other comprehensive loss, net that will be recognized in other nonoperating expense income, net over the remaining term of the interest rate hedges for which hedge accounting was discontinued.The benefit from income taxes was 5.1 million, reflecting an effective tax rate of 18.1. Approximately 0.1 million in cash taxes was paid during the quarter.Net loss was 23.0 million, or 0.41 per diluted share, compared to net income of 34.2 million, or 0.55 per diluted share, in the prior year quarter. Adjusted Net Loss per diluted share was 0.25 compared to Adjusted Net Income per diluted share of 0.23 in the prior year quarter.Adjusted Free Cash Flow and Capital AllocationDennys Adjusted Free Cash Flow in the quarter after investing 1.7 million in cash capital expenditures, including maintenance capital and remodels, was 11.5 million.Business OutlookOn March 16, 2020, the Company announced that it had withdrawn its guidance for the fiscal year ending on December 30, 2020. Given the dynamic and evolving impact of the COVID-19 pandemic on the Companys operations and substantial uncertainty about future performance, the Company cannot reasonably provide an updated business outlook at this time. Please refer to the Reconciliation of Net Income Loss to Non-GAAP Financial Measures, as well as the Reconciliation of Operating Income Loss to Non-GAAP Financial Measures included in the following tables. Same-store sales include sales at company restaurants and non-consolidated franchised and licensed restaurants that were open the same period in the prior year. Total operating revenue is limited to company restaurant sales and royalties, advertising revenue, fees and occupancy revenue from non-consolidated franchised and licensed restaurants. Accordingly, domestic franchise same-store sales and domestic system-wide same-store sales should be considered as a supplement to, not a substitute for, the Companys results as reported under GAAP.Conference Call and Webcast InformationDennys will provide further commentary on the results for the second quarter ended June 24, 2020 on its quarterly investor conference call today, Tuesday, July 28, 2020 at 4:30 p.m. Eastern Time. 