• Domestic system-wide same-store sales increased 2.6%, including growth of 2.7% at company restaurants and an improvement of 2.6% at domestic franchised restaurants.
• Opened eight system restaurants, including seven franchised restaurants and one company restaurant.
• Completed 52 remodels at franchised restaurants.
• Operating Income was $17.0 million.
• Company restaurant operating margin* grew 1.7% to $16.7 million while franchise operating margin* grew 1.8% to $24.8 million.
• Net Income was $8.7 million, or $0.12 per diluted share.
• Adjusted Net Income* was $9.9 million, while Adjusted Net Income per Share*  was $0.14.
• Adjusted EBITDA* improved 2.5% to $26.7 million.
• Generated $12.7 million of Adjusted Free Cash Flow*, after cash capital expenditures of $8.3 million.
• Allocated $24.4 million towards share repurchases.

John Miller, President and Chief Executive Officer, stated, "Despite challenges within the full-service dining environment, we achieved positive system same-store sales and continued to outperform key industry benchmarks during the second quarter.  Our highly franchised business model, coupled with our efforts to further differentiate Denny's as a relevant and compelling brand, continues to generate strong cash flows which support ongoing investments in Denny's brand revitalization and company restaurants, and the return of capital to our shareholders.  As we continue to successfully execute our brand revitalization strategy, we remain committed to further elevating the guest experience, consistently growing same-store sales, and expanding our global reach, leading to value creation for all franchisees and shareholders."

Denny's total operating revenue grew 7.3% to $133.4 million primarily due to an increase in company restaurant sales.  Company restaurant sales grew 10.3% to $98.4 million due to a greater number of company restaurants compared to the prior year quarter and same-store sales growth.  Franchise and licensing revenue was $35.0 million compared to $35.1 million in the prior year quarter as an increase in royalty revenue was offset by a decrease in occupancy revenue due to scheduled lease terminations and a decrease in initial fees.

Company restaurant operating margin* was $16.7 million, or 16.9% of company restaurant sales, compared to $16.4 million, or 18.4%, in the prior year quarter, driven by increases in product costs, workers' compensation expense, and minimum wages, partially offset by higher sales.  Franchise operating margin* was $24.8 million, or 70.7% of franchise and licensing revenue, compared to $24.3 million, or 69.4%, in the prior year quarter, driven by higher royalty revenue and an improved occupancy margin.

Total general and administrative expenses were $16.6 million compared to $16.2 million in the prior year quarter.  Interest expense was $3.7 million versus $3.0 million in the prior year quarter.  Denny's ended the quarter with $264.7 million of total debt outstanding, including $235.0 million of borrowings under its revolving credit facility.  The provision for income taxes was $4.9 million, reflecting an effective tax rate of 36.0%.  Due to the use of net operating loss and tax credit carryforwards, the Company paid $2.3 million in cash taxes during the quarter.

• Same-store sales growth at company and domestic franchised restaurants between 0% and 2%.
• 45 to 50 new restaurant openings, with net restaurant growth of 5 to 15 restaurants (vs. 10 to 20 restaurants).
• Total operating revenue between $523 and $532 million including franchise and licensing revenue between $140 and $142 million.
• Company restaurant operating margin* between 17.0% and 17.5% (vs. 17.5% and 18%) and franchise operating margin* between 71% and 71.5%.
• Total general and administrative expenses between $67 and $70 million (vs. $68 and $71 million).
• Adjusted EBITDA* between $101 and $103 million.
• Depreciation and amortization expense between $23 and $24 million.
• Net interest expense between $14.5 and $15 million (vs. $12.5 and $13 million).
• Effective income tax rate between 35% and 37% with cash taxes between $6 and $8 million (vs. $7 and $9 million).
• Cash capital expenditures between $25 and $27 million (vs. $22 and $24 million).
• Adjusted Free Cash Flow* between $55 and $57 million (vs. $58 and $60 million).

* Please refer to the historical reconciliation of Net Income to Adjusted Income Before Taxes, Adjusted EBITDA, Adjusted Free Cash Flow, Adjusted Net Income, and Adjusted Net Income per Share, as well as the reconciliation of Operating Income to non-GAAP financial measures included in the following tables.  The Company is not able to reconcile the forward-looking non-GAAP estimates set forth above to their most directly comparable GAAP estimates without unreasonable efforts because it is unable to predict, forecast or determine the probable significance of the items impacting these estimates, including gains, losses and other charges, with a reasonable degree of accuracy.  Accordingly, the most directly comparable forward-looking GAAP estimates are not provided.

Denny's will provide further commentary on the results for the second quarter ended June 28, 2017 on its quarterly investor conference call today, Tuesday, August 1, 2017 at 4:30 p.m. Eastern Time.  Interested parties are invited to listen to a live broadcast of the conference call accessible through the investor relations section of Denny's website at investor.dennys.com.  A replay of the call may be accessed at the same location later in the day and will remain available for 30 days.

Denny's Corporation is the franchisor and operator of one of America's largest franchised full-service restaurant chains, based on the number of restaurants.  As of June 28, 2017, Denny's had 1,724 franchised, licensed, and company restaurants around the world including 125 restaurants in Canada, Puerto Rico, Mexico, New Zealand, Honduras, Costa Rica, Dominican Republic, the United Arab Emirates, the Philippines, Guam, Curaçao, and El Salvador.  For further information on Denny's, including news releases, links to SEC filings, and other financial information, please visit the Denny's investor relations website at investor.dennys.com.

The Company urges caution in considering its current trends and any outlook on earnings disclosed in this press release.  In addition, certain matters discussed in this release may constitute forward-looking statements.  These forward-looking statements, which reflect its best judgment based on factors currently known, are intended to speak only as of the date such statements are made and involve risks, uncertainties, and other factors that may cause the actual performance of Denny's Corporation, its subsidiaries, and underlying restaurants to be materially different from the performance indicated or implied by such statements.  Words such as "expect", "anticipate", "believe", "intend", "plan", "hope", and variations of such words and similar expressions are intended to identify such forward-looking statements.  Except as may be required by law, the Company expressly disclaims any obligation to update these forward-looking statements to reflect events or circumstances after the date of this release or to reflect the occurrence of unanticipated events.  Factors that could cause actual performance to differ materially from the performance indicated by these forward-looking statements include, among others:  competitive pressures from within the restaurant industry; the level of success of our operating initiatives and advertising and promotional efforts; adverse publicity; health concerns arising from food-related pandemics, outbreaks of flu viruses, such as avian flu, or other diseases; changes in business strategy or development plans; terms and availability of capital; regional weather conditions; overall changes in the general economy (including with regard to energy costs), particularly at the retail level; political environment (including acts of war and terrorism); and other factors from time to time set forth in the Company's SEC reports and other filings, including but not limited to the discussion in Management's Discussion and Analysis and the risks identified in Item 1A. Risk Factors contained in the Company's Annual Report on Form 10-K for the year ended December 28, 2016 (and in the Company's subsequent quarterly reports on Form 10-Q).

The Company believes that, in addition to GAAP measures, certain other non-GAAP financial measures are appropriate indicators to assist in the evaluation of operating performance on a period-to-period basis.  The Company uses Adjusted Income Before Taxes, Adjusted EBITDA, Adjusted Free Cash Flow and Adjusted Net Income internally as performance measures for planning purposes, including the preparation of annual operating budgets, and for compensation purposes, including bonuses for certain employees.  Adjusted EBITDA is also used to evaluate the ability to service debt because the excluded charges do not have an impact on prospective debt servicing capability and these adjustments are contemplated in our credit facility for the computation of our debt covenant ratios.  We define Adjusted Free Cash Flow for a given period as Adjusted EBITDA less the cash portion of interest expense net of interest income, capital expenditures, and cash taxes.  Management believes that the presentation of Adjusted Free Cash Flow provides useful information to investors because it represents a liquidity measure used to evaluate, among other things, operating effectiveness and is used in decisions regarding the allocation of resources.  However, each of these non-GAAP financial measures should be considered as a supplement to, not a substitute for, operating income, net income or other financial performance measures prepared in accordance with U.S. generally accepted accounting principles.

The Company believes that, in addition to GAAP measures, certain other non-GAAP financial measures are appropriate indicators to assist in the evaluation of restaurant-level operating efficiency and performance of ongoing restaurant-level operations.  The Company uses Total Operating Margin, Company Restaurant Operating Margin and Franchise Operating Margin internally as performance measures for planning purposes, including the preparation of annual operating budgets, and these three non-GAAP measures are used to evaluate operating effectiveness.

We define Total Operating Margin as operating income excluding the following three items: general and administrative expenses, depreciation and amortization, and operating (gains), losses and other charges, net.  We present Total Operating Margin as a percent of total operating revenue.  We exclude general and administrative expenses, which includes primarily non-restaurant-level costs associated with support of company and franchise restaurants and other activities at our corporate office. We exclude depreciation and amortization expense, substantially all of which is related to company restaurant-level assets, because such expenses represent historical sunk costs which do not reflect current cash outlays for the restaurants. We exclude special items, included within operating (gains), losses and other charges, net, to provide investors with a clearer perspective of the Company's ongoing operating performance and a more relevant comparison to prior period results.

Total Operating Margin is the total of Company Restaurant Operating Margin and Franchise Operating Margin. We define Company Restaurant Operating Margin as company restaurant sales less costs of company restaurant sales (which include product costs, company restaurant level payroll and benefits, occupancy costs, and other operating costs including utilities, repairs and maintenance, marketing and other expenses) and present it as a percent of company restaurant sales. We define Franchise Operating Margin as franchise and license revenue (which includes franchise royalties and other non-food and beverage revenue streams such as initial franchise fees and occupancy revenue) less costs of franchise and license revenue and present it as a percent of franchise and license revenue.

These non-GAAP financial measures provide a meaningful comparison between periods and enable investors to focus on the performance of restaurant-level operations by excluding revenues and costs unrelated to food and beverage sales in addition to corporate general and administrative expense, depreciation and amortization, and other gains and charges. However, each of these non-GAAP financial measures should be considered as a supplement to, not a substitute for, operating income, net income or other financial performance measures prepared in accordance with U.S. generally accepted accounting principles. Total Operating Margin, Company Restaurant Operating Margin and Franchise Operating Margin do not accrue directly to the benefit of shareholders because of the aforementioned excluded costs, and are not indicative of the overall results for the Company.