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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(Mark One)
☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended March 30, 2022
or
☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from _______________ to ________________
Commission File Number 0-18051
DENNY’S CORPORATION
(Exact name of registrant as specified in its charter)

Delaware |  | 13-3487402
(State or other jurisdiction of incorporation or organization) |  | (I.R.S. Employer Identification No.)
203 East Main Street |  |
Spartanburg, | South Carolina |  | 29319-0001
(Address of principal executive offices) |  | (Zip Code)

(864) 597-8000
(Registrant’s telephone number, including area code)
Securities registered pursuant to Section 12(b) of the Act:

Title of each class |  | Trading Symbol(s) |  | Name of each exchange on which registered
$.01 Par Value, Common Stock |  | DENN |  | The Nasdaq Stock Market LLC

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ý No ☐
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ý No ☐
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large Accelerated Filer | ý | Accelerated Filer | ☐ | Non-Accelerated Filer | ☐ | Smaller Reporting Company | ☐ | Emerging Growth Company | ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ¨
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).
Yes ☐ No ý
As of April 28, 2022, 61,712,452 shares of the registrant’s common stock, par value $0.01 per share, were outstanding.

TABLE OF CONTENTS

| Page
PART I - FINANCIAL INFORMATION |
Item 1. Financial Statements (Unaudited) |
Consolidated Balance Sheets | 3
Consolidated Statements of Operations | 4
Consolidated Statements of Comprehensive Income | 5
Consolidated Statements of Shareholders' Deficit | 6
Consolidated Statements of Cash Flows | 7
Notes to Consolidated Financial Statements | 8
Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations | 17
Item 3. Quantitative and Qualitative Disclosures About Market Risk | 24
Item 4. Controls and Procedures | 25
PART II - OTHER INFORMATION |
Item 1. Legal Proceedings | 26
Item 1A. Risk Factors | 26
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds | 26
Item 6. Exhibits | 27
Signatures | 28

2

PART I - FINANCIAL INFORMATION
Item 1. Financial Statements
Denny’s Corporation and Subsidiaries
Consolidated Balance Sheets
(Unaudited)

| March 30, 2022 |  | December 29, 2021
| (In thousands)
Assets |  |  |
Current assets: |  |  |
Cash and cash equivalents | $ | 6,091 |  |  | $ | 30,624 |
Investments | 3,687 |  |  | 2,551 |
Receivables, net | 23,161 |  |  | 19,621 |
Inventories | 9,829 |  |  | 5,060 |
Assets held for sale | 1,322 |  |  | — |
Prepaid and other current assets | 7,941 |  |  | 11,393 |
Total current assets | 52,031 |  |  | 69,249 |
Property, net of accumulated depreciation of $150,914 and $151,836, respectively | 89,878 |  |  | 91,176 |
Financing lease right-of-use assets, net of accumulated amortization of $9,772 and $11,210, respectively | 7,399 |  |  | 7,709 |
Operating lease right-of-use assets, net | 125,012 |  |  | 128,727 |
Goodwill | 36,884 |  |  | 36,884 |
Intangible assets, net | 49,892 |  |  | 50,226 |
Deferred financing costs, net | 2,813 |  |  | 2,971 |
Deferred income taxes, net | 5,139 |  |  | 11,502 |
Other noncurrent assets | 32,346 |  |  | 37,083 |
Total assets | $ | 401,394 |  |  | $ | 435,527 |
Liabilities |  |  |
Current liabilities: |  |  |
Current finance lease liabilities | $ | 1,962 |  |  | $ | 1,952 |
Current operating lease liabilities | 15,406 |  |  | 15,829 |
Accounts payable | 12,998 |  |  | 15,595 |
Other current liabilities | 48,524 |  |  | 64,146 |
Total current liabilities | 78,890 |  |  | 97,522 |
Long-term liabilities: |  |  |
Long-term debt | 171,500 |  |  | 170,000 |
Noncurrent finance lease liabilities | 10,374 |  |  | 10,744 |
Noncurrent operating lease liabilities | 122,470 |  |  | 126,296 |
Liability for insurance claims, less current portion | 7,860 |  |  | 8,438 |
Other noncurrent liabilities | 58,055 |  |  | 87,792 |
Total long-term liabilities | 370,259 |  |  | 403,270 |
Total liabilities | 449,149 |  |  | 500,792 |
Shareholders' deficit |  |  |
Common stock $0.01 par value; 135,000 shares authorized; March 30, 2022: 64,457 shares issued and 61,713 outstanding; December 29, 2021: 64,200 shares issued and 62,210 shares outstanding | $ | 645 |  |  | $ | 642 |
Paid-in capital | 137,332 |  |  | 135,596 |
Deficit | (94,586) |  |  | (116,441) |
Accumulated other comprehensive loss, net | (48,689) |  |  | (54,470) |
Treasury stock, at cost, 2,744 and 1,990 shares, respectively | (42,457) |  |  | (30,592) |
Total shareholders' deficit | (47,755) |  |  | (65,265) |
Total liabilities and shareholders' deficit | $ | 401,394 |  |  | $ | 435,527 |

See accompanying notes
3

Denny’s Corporation and Subsidiaries
Consolidated Statements of Operations
(Unaudited)

|  |  | Quarter Ended
|  |  |  |  | March 30, 2022 |  | March 31, 2021
|  |  |  |  | (In thousands, except per share amounts)
Revenue: |  |  |  |  |  |  |
Company restaurant sales |  |  |  |  | $ | 43,976 |  |  | $ | 33,569 |
Franchise and license revenue |  |  |  |  | 59,131 |  |  | 47,007 |
Total operating revenue |  |  |  |  | 103,107 |  |  | 80,576 |
Costs of company restaurant sales, excluding depreciation and amortization: |  |  |  |  |  |  |
Product costs |  |  |  |  | 11,244 |  |  | 8,272 |
Payroll and benefits |  |  |  |  | 17,086 |  |  | 12,965 |
Occupancy |  |  |  |  | 3,240 |  |  | 2,850 |
Other operating expenses |  |  |  |  | 7,055 |  |  | 6,077 |
Total costs of company restaurant sales |  |  |  |  | 38,625 |  |  | 30,164 |
Costs of franchise and license revenue, excluding depreciation and amortization |  |  |  |  | 30,669 |  |  | 23,758 |
General and administrative expenses |  |  |  |  | 16,958 |  |  | 16,947 |
Depreciation and amortization |  |  |  |  | 3,548 |  |  | 3,661 |
Operating (gains), losses and other charges, net |  |  |  |  | — |  |  | 532 |
Total operating costs and expenses, net |  |  |  |  | 89,800 |  |  | 75,062 |
Operating income |  |  |  |  | 13,307 |  |  | 5,514 |
Interest expense, net |  |  |  |  | 2,960 |  |  | 4,277 |
Other nonoperating income, net |  |  |  |  | (19,615) |  |  | (30,048) |
Income before income taxes |  |  |  |  | 29,962 |  |  | 31,285 |
Provision for income taxes |  |  |  |  | 8,107 |  |  | 8,104 |
Net income |  |  |  |  | $ | 21,855 |  |  | $ | 23,181 |
Net income per share - basic |  |  |  |  | $ | 0.35 |  |  | $ | 0.36 |
Net income per share - diluted |  |  |  |  | $ | 0.34 |  |  | $ | 0.35 |
Basic weighted average shares outstanding |  |  |  |  | 63,343 |  |  | 65,251 |
Diluted weighted average shares outstanding |  |  |  |  | 63,580 |  |  | 65,749 |

See accompanying notes
4

Denny’s Corporation and Subsidiaries
Consolidated Statements of Comprehensive Income
(Unaudited)

|  |  | Quarter Ended
|  |  |  |  | March 30, 2022 |  | March 31, 2021
|  |  |  |  | (In thousands)
Net income |  |  |  |  | $ | 21,855 |  |  | $ | 23,181 |
Other comprehensive income, net of tax: |  |  |  |  |  |  |
Minimum pension liability adjustment, net of tax of $8 and $10, respectively |  |  |  |  | 24 |  |  | 30 |
Changes in the fair value of cash flow derivatives, net of tax of $1,673 and $763, respectively |  |  |  |  | 5,015 |  |  | 2,215 |
Reclassification of cash flow derivatives to interest expense, net of tax of $248 and $255, respectively |  |  |  |  | 742 |  |  | 740 |
Amortization of unrealized losses related to dedesignated derivatives to interest expense, net of tax of $0 and $31, respectively |  |  |  |  | — |  |  | 90 |
Other comprehensive income |  |  |  |  | 5,781 |  |  | 3,075 |
Total comprehensive income |  |  |  |  | $ | 27,636 |  |  | $ | 26,256 |

See accompanying notes
5

Denny’s Corporation and Subsidiaries
Consolidated Statements of Shareholders’ Deficit
For the Quarter Ended March 30, 2022 and March 31, 2021
(Unaudited)

| Common Stock |  | Treasury Stock |  | Paid-in Capital |  | Deficit |  | Accumulated Other Comprehensive Loss, Net |  | Total Shareholders’ Deficit
| Shares |  | Amount |  | Shares |  | Amount |  |  |  |
| (In thousands)
Balance, December 29, 2021 | 64,200 |  |  | $ | 642 |  |  | (1,990) |  |  | $ | (30,592) |  |  | $ | 135,596 |  |  | $ | (116,441) |  |  | $ | (54,470) |  |  | (65,265) |
Net income | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | 21,855 |  |  | — |  |  | 21,855 |
Other comprehensive income | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | 5,781 |  |  | 5,781 |
Share-based compensation on equity classified awards, net of withholding tax | — |  |  | — |  |  | — |  |  | — |  |  | 1,739 |  |  | — |  |  | — |  |  | 1,739 |
Purchase of treasury stock | — |  |  | — |  |  | (754) |  |  | (11,865) |  |  | — |  |  | — |  |  | — |  |  | (11,865) |
Issuance of common stock for share-based compensation | 257 |  |  | 3 |  |  | — |  |  | — |  |  | (3) |  |  | — |  |  | — |  |  | — |
Balance, March 30, 2022 | 64,457 |  |  | $ | 645 |  |  | (2,744) |  |  | $ | (42,457) |  |  | $ | 137,332 |  |  | $ | (94,586) |  |  | $ | (48,689) |  |  | $ | (47,755) |

| Common Stock |  | Treasury Stock |  | Paid-in Capital |  | Deficit |  | Accumulated Other Comprehensive Loss, Net |  | Total Shareholders’ Deficit
| Shares |  | Amount |  | Shares |  | Amount |  |  |  |
| (In thousands)
Balance, December 30, 2020 | 63,962 |  |  | $ | 640 |  |  | — |  |  | $ | — |  |  | $ | 123,833 |  |  | $ | (194,514) |  |  | $ | (60,405) |  |  | $ | (130,446) |
Net income | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | 23,181 |  |  | — |  |  | 23,181 |
Other comprehensive income | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | 3,075 |  |  | 3,075 |
Share-based compensation on equity classified awards, net of withholding tax | — |  |  | — |  |  | — |  |  | — |  |  | 2,002 |  |  | — |  |  | — |  |  | 2,002 |
Issuance of common stock for share-based compensation | 153 |  |  | 1 |  |  | — |  |  | — |  |  | (1) |  |  | — |  |  | — |  |  | — |
Exercise of common stock options | 30 |  |  | — |  |  | — |  |  | — |  |  | 116 |  |  | — |  |  | — |  |  | 116 |
Balance, March 31, 2021 | 64,145 |  |  | $ | 641 |  |  | — |  |  | $ | — |  |  | $ | 125,950 |  |  | $ | (171,333) |  |  | $ | (57,330) |  |  | $ | (102,072) |

See accompanying notes

6

Denny’s Corporation and Subsidiaries
Consolidated Statements of Cash Flows
(Unaudited)

| Quarter Ended
| March 30, 2022 |  | March 31, 2021
| (In thousands)
Cash flows from operating activities: |  |  |
Net income | $ | 21,855 |  |  | $ | 23,181 |
Adjustments to reconcile net income to cash flows provided by (used in) operating activities: |  |  |
Depreciation and amortization | 3,548 |  |  | 3,661 |
Operating (gains), losses and other charges, net | — |  |  | 532 |
Gains and amortization on interest rate swap derivatives, net | (20,253) |  |  | (29,733) |
Amortization of deferred financing costs | 158 |  |  | 344 |
Losses on investments | 65 |  |  | 8 |
Losses on early termination of debt and leases | 24 |  |  | 34 |
Deferred income tax expense | 4,436 |  |  | 4,099 |
Share-based compensation expense | 4,015 |  |  | 3,472 |
Changes in assets and liabilities: |  |  |
Receivables | (3,567) |  |  | 353 |
Inventories | (4,768) |  |  | 13 |
Prepaids and other current assets | 3,451 |  |  | 5,294 |
Other noncurrent assets | 4,085 |  |  | (201) |
Operating lease assets and liabilities | (244) |  |  | (604) |
Accounts payable | (2,405) |  |  | 1,820 |
Accrued payroll | (7,475) |  |  | (1,704) |
Accrued taxes | (1) |  |  | (380) |
Other accrued liabilities | (7,488) |  |  | 1,195 |
Other noncurrent liabilities | (2,500) |  |  | (1,149) |
Net cash flows provided by (used in) operating activities | (7,064) |  |  | 10,235 |
Cash flows from investing activities: |  |  |
Capital expenditures | (2,778) |  |  | (1,583) |
Proceeds from sales of restaurants, real estate and other assets | 108 |  |  | 1,348 |
Investment purchases | (1,200) |  |  | — |
Proceeds from sale of investments | — |  |  | 200 |
Collections on notes receivable | 67 |  |  | 215 |
Net cash flows provided by (used in) investing activities | (3,803) |  |  | 180 |
Cash flows from financing activities: |  |  |
Revolver borrowings | 13,825 |  |  | 7,500 |
Revolver payments | (12,325) |  |  | (2,500) |
Long-term debt payments | (503) |  |  | (473) |
Proceeds from exercise of stock options | — |  |  | 116 |
Tax withholding on share-based payments | (2,165) |  |  | (1,309) |
Deferred financing costs | — |  |  | (8) |
Purchase of treasury stock | (12,498) |  |  | — |
Net bank overdrafts | — |  |  | (3,125) |
Net cash flows provided by (used in) financing activities | (13,666) |  |  | 201 |
Increase (decrease) in cash and cash equivalents | (24,533) |  |  | 10,616 |
Cash and cash equivalents at beginning of period | 30,624 |  |  | 3,892 |
Cash and cash equivalents at end of period | $ | 6,091 |  |  | $ | 14,508 |

See accompanying notes
7

Denny’s Corporation and Subsidiaries
Notes to Consolidated Financial Statements
(Unaudited)
Note 1. Introduction and Basis of Presentation
Denny’s Corporation, or Denny’s or the Company, is one of America’s largest full-service restaurant chains based on number of restaurants. At March 30, 2022, the Denny's brand consisted of 1,634 restaurants, 1,569 of which were franchised/licensed restaurants and 65 of which were company operated.
The global crisis resulting from the spread of coronavirus ("COVID-19") has had a substantial impact on our restaurant operations starting in the quarter ended March 25, 2020 with continuing impacts into the current quarter ended March 30, 2022. While we have seen improvements compared to earlier periods during the COVID-19 pandemic, we cannot currently estimate the duration or future financial impact of the COVID-19 pandemic on our business. Ongoing material adverse effects of the COVID-19 pandemic for an extended period could negatively affect our business, results of operations, liquidity and financial condition and could impact our impairment assessments of accounts receivable, intangible assets, long-lived assets and goodwill.
Our unaudited consolidated financial statements have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission. Therefore, certain information and notes normally included in financial statements prepared in accordance with U.S. generally accepted accounting principles (“GAAP”) have been condensed or omitted. In our opinion, all adjustments considered necessary for a fair presentation of the interim periods presented have been included. Such adjustments are of a normal and recurring nature. The preparation of these financial statements requires us to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses, and related disclosure of contingent assets and liabilities. Actual results may differ from these estimates under different assumptions or conditions; however, we believe that our estimates are reasonable.
These interim consolidated financial statements should be read in conjunction with our consolidated financial statements and notes thereto as of and for the fiscal year ended December 29, 2021 which are contained in our audited Annual Report on Form 10-K for the fiscal year ended December 29, 2021. The results of operations for the interim periods presented are not necessarily indicative of the results for the entire fiscal year ending December 28, 2022. Our significant interim accounting policies include the recognition of advertising and marketing costs, generally in proportion to revenue, and the recognition of income taxes using an estimated annual effective rate.
Note 2. Summary of Significant Accounting Policies
Newly Adopted Accounting Standards
In March 2020, the FASB issued ASU 2020-04, “Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting” which was later clarified in January 2021 by ASU 2021-01, “Reference Rate Reform (Topic 848): Scope”. The guidance provides optional guidance, for a limited time, to ease the potential burden in accounting for or recognizing the effects of reference rate reform on financial reporting. The Company adopted ASU 2020-04 on March 12, 2020. The adoption of and future elections under this new guidance did not and are not expected to have a material impact on the Company’s consolidated financial position or results of operations. The guidance is effective through December 31, 2022.
Accounting Standards to be Adopted
We reviewed all other newly issued accounting pronouncements and concluded that they are either not applicable to our business or are not expected to have a material effect on our consolidated financial statements as a result of future adoption.
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Note 3. Receivables
Receivables consisted of the following:

| March 30, 2022 |  | December 29, 2021
| (In thousands)
Receivables, net: |  |  |
Trade accounts receivable from franchisees | $ | 12,897 |  |  | $ | 13,430 |
Financing receivables from franchisees | 2,811 |  |  | 1,027 |
Vendor receivables | 2,803 |  |  | 4,041 |
Credit card receivables | 625 |  |  | 747 |
Other | 4,574 |  |  | 950 |
Allowance for doubtful accounts | (549) |  |  | (574) |
Total receivables, net | $ | 23,161 |  |  | $ | 19,621 |
Other noncurrent assets: |  |  |
Financing receivables from franchisees | $ | 252 |  |  | $ | 293 |

Note 4. Intangible Assets
Intangible assets consisted of the following:

| March 30, 2022 |  | December 29, 2021
| Gross Carrying Amount |  | Accumulated Amortization |  | Gross Carrying Amount |  | Accumulated Amortization
| (In thousands)
Intangible assets with indefinite lives: |  |  |  |  |  |  |
Trade names | $ | 44,087 |  |  | $ | — |  |  | $ | 44,087 |  |  | $ | — |
Liquor licenses | 120 |  |  | — |  |  | 120 |  |  | — |
Intangible assets with definite lives: |  |  |  |  |  |  |
Reacquired franchise rights | 11,801 |  |  | 6,116 |  |  | 12,218 |  |  | 6,199 |
Intangible assets, net | $ | 56,008 |  |  | $ | 6,116 |  |  | $ | 56,425 |  |  | $ | 6,199 |

Note 5. Other Current Liabilities
Other current liabilities consisted of the following:

| March 30, 2022 |  | December 29, 2021
| (In thousands)
Accrued payroll | $ | 13,232 |  |  | $ | 20,676 |
Current portion of liability for insurance claims | 3,947 |  |  | 4,285 |
Accrued taxes | 4,532 |  |  | 4,533 |
Accrued advertising | 9,538 |  |  | 15,355 |
Gift cards | 5,818 |  |  | 7,170 |
Other | 11,457 |  |  | 12,127 |
Other current liabilities | $ | 48,524 |  |  | $ | 64,146 |

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Note 6. Fair Value of Financial Instruments
Financial assets and liabilities measured at fair value on a recurring basis are summarized below:

| Total |  | Quoted Prices in Active Markets for Identical Assets/Liabilities (Level 1) |  | Significant Other Observable Inputs (Level 2) |  | Significant Unobservable Inputs (Level 3)
| (In thousands)
Fair value measurements as of March 30, 2022: |  |  |  |  |  |  |
Deferred compensation plan investments (1) | $ | 12,925 |  |  | $ | 12,925 |  |  | $ | — |  |  | $ | — |
Interest rate swaps, net (2) | (23,264) |  |  | — |  |  | (23,264) |  |  | — |
Investments (3) | 3,687 |  |  | — |  |  | 3,687 |  |  | — |
Total | $ | (6,652) |  |  | $ | 12,925 |  |  | $ | (19,577) |  |  | $ | — |
Fair value measurements as of December 29, 2021: |  |  |  |  |  |  |
Deferred compensation plan investments (1) | $ | 13,726 |  |  | $ | 13,726 |  |  | $ | — |  |  | $ | — |
Interest rate swaps (2) | (52,121) |  |  | — |  |  | (52,121) |  |  | — |
Investments (3) | 2,551 |  |  | — |  |  | 2,551 |  |  | — |
Total | $ | (35,844) |  |  | $ | 13,726 |  |  | $ | (49,570) |  |  | $ | — |

(1) The fair values of our deferred compensation plan investments are based on the closing market prices of the elected investments and are included in other noncurrent assets in our Consolidated Balance Sheets.
(2) The fair values of our interest rate swaps are based upon Level 2 inputs, which include valuation models. The key inputs for the valuation models are quoted market prices, interest rates and forward yield curves. See Note 7 for details on the interest rate swaps.
(3) The fair values of our investments are valued using a readily determinable net asset value per share based on the fair value of the underlying securities. There are no significant redemption restrictions associated with these investments.
The carrying amounts of cash and cash equivalents, receivables, accounts payable and accrued expenses are deemed to approximate fair value due to the immediate or short-term maturity of these instruments. The fair value of notes receivable approximates the carrying value after consideration of recorded allowances and related risk-based interest rates. The outstanding senior secured revolver is carried at historical cost, which approximates fair value. The fair value of our senior secured revolver approximates its carrying value since it is a variable rate facility (Level 2).
Note 7. Long-Term Debt
Denny's and certain of its subsidiaries have a credit facility consisting of a five-year $400 million senior secured revolver (with a $25 million letter of credit sublimit). The credit facility includes an accordion feature that would allow us to increase the size of the facility to $450 million. Borrowings bear a tiered interest rate, which is based on the Company's consolidated leverage ratio. The maturity date for the credit facility is August 26, 2026.
The credit facility is available for working capital, capital expenditures and other general corporate purposes. The credit facility is guaranteed by Denny's and its material subsidiaries and is secured by assets of Denny's and its subsidiaries, including the stock of its subsidiaries (other than its insurance captive subsidiary). It includes negative covenants that are usual for facilities and transactions of this type. The credit facility also includes certain financial covenants with respect to a maximum consolidated leverage ratio and a minimum consolidated fixed charge coverage ratio. We were in compliance with all financial covenants as of March 30, 2022.
As of March 30, 2022, we had outstanding revolver loans of $171.5 million and outstanding letters of credit under the credit facility of $15.7 million. These balances resulted in unused commitments of $212.8 million as of March 30, 2022 under the credit facility.
As of March 30, 2022, borrowings under the credit facility bore interest at a rate of LIBOR plus 1.75% and the commitment fee, paid on the unused portion of the credit facility, was set to 0.25%.
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Prior to considering the impact of our interest rate swaps, described below, the weighted-average interest rate on outstanding revolver loans was 1.98% and 2.09% as of March 30, 2022 and December 29, 2021, respectively. Taking into consideration our interest rate swaps that are designated as cash flow hedges, the weighted-average interest rate of outstanding revolver loans was 4.19% and 4.44% as of March 30, 2022 and December 29, 2021, respectively.
Interest Rate Hedges
We have receive-variable, pay-fixed interest rate swaps to hedge the forecasted cash flows of our floating rate debt. We initially designated the interest rate swaps as cash flow hedges of our exposure to variability in future cash flows attributable to variable interest payments due on forecasted notional amounts. A summary of our interest rate swaps as of March 30, 2022 is as follows:

Trade Date |  | Effective Date |  | Maturity Date |  | Notional Amount |  | Fair Value |  | Fixed Rate
|  |  |  |  |  | (In thousands) |  |
Swaps designated as cash flow hedges |  |  |  |  |  |  |  |  |  |
March 20, 2015 |  | March 29, 2018 |  | March 31, 2025 |  | $ | 120,000 |  |  | $ | 104 |  |  | 2.44 | %
October 1, 2015 |  | March 29, 2018 |  | March 31, 2026 |  | $ | 50,000 |  |  | $ | (59) |  |  | 2.46 | %
Dedesignated swaps |  |  |  |  |  |  |  |  |  |
February 15, 2018 |  | March 31, 2020 |  | December 31, 2033 |  | $ | 120,000 |  | (1) | $ | (23,309) |  |  | 3.19 | %
Total |  |  |  |  |  | $ | 290,000 |  |  | $ | (23,264) |  |  |

(1) The notional amounts of the swaps entered into on February 15, 2018 increase periodically until they reach the maximum notional amount of $425.0 million on September 28, 2029.
Swaps Designated as Cash Flow Hedges
To the extent the swaps are highly effective in offsetting the variability of the hedged cash flows, changes in the fair value of the swaps are not included in the Consolidated Statements of Operations but are reported as a component of other comprehensive income. The interest rate swaps entered into in 2015 are designated as cash flow hedges with unrealized gain and losses recorded as a component of accumulated other comprehensive loss, net.
As of March 30, 2022, the fair value of the swaps designated as cash flow hedges was a net asset of less than $0.1 million. One was recorded as an asset of $0.1 million as a component of other noncurrent assets and the other as a liability of $0.1 million as a component of other noncurrent liabilities. The designated swaps have an offsetting amount (before taxes) recorded as a component of accumulated other comprehensive loss, net in our Consolidated Balance Sheets. See Note 13 for amounts recorded in accumulated other comprehensive loss related to interest rate swaps. We expect to reclassify approximately $3.4 million from accumulated other comprehensive loss, net to interest expense, net in our Consolidated Statements of Operations related to swaps designated as cash flow hedges during the next twelve months.
Dedesignated Interest Rate Hedges
During the year ended December 30, 2020, we determined that a portion of the underlying cash flows related to our hedging relationship entered into in 2018 (“2018 Swaps”) were no longer probable of occurring over the term of the interest rate swaps. Accordingly, we dedesignated the cash flow relationship and discontinued hedge accounting treatment for the 2018 Swaps. As a result, we reclassified a portion of losses from accumulated other comprehensive loss, net to other nonoperating income, net in our Consolidated Statements of Operations and began amortizing the remaining amounts of unrealized losses related to the 2018 Swaps from accumulated other comprehensive loss, net into our Consolidated Statements of Operations as a component of interest expense, net over the remaining term of the 2018 Swaps. For the quarter ended March 30, 2022, no unrealized losses were reclassified to interest expense, net related to the 2018 Swaps. For the quarter ended March 31, 2021, we reclassified unrealized losses of approximately $0.1 million to interest expense, net related to the 2018 Swaps. At March 30, 2022, approximately $64.2 million (before taxes) of unrealized losses remained in accumulated other comprehensive loss, net. We expect to amortize less than $0.1 million from accumulated other comprehensive loss, net to interest expense, net in our Consolidated Statements of Operations related to dedesignated interest rate swaps during the next twelve months.
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As a result of the dedesignated cash flow relationship related to the 2018 Swaps, changes in the fair value of the 2018 Swaps are recorded as a component of other nonoperating income, net in our Consolidated Statements of Operations. For the quarter ended March 30, 2022, we recorded income of approximately $20.3 million as a component of other nonoperating income, net related to the 2018 Swaps resulting from changes in fair value. For the quarter ended March 31, 2021, we recorded income of approximately $29.9 million as a component of other nonoperating income, net related to the 2018 Swaps resulting from changes in fair value. As of March 30, 2022, the fair value of the dedesignated interest rate swaps was a liability of $23.3 million, $0.3 million of which was recorded as a component of other current liabilities and $23.0 million of which was recorded as a component of other noncurrent liabilities in our Consolidated Balance Sheets.
Note 8. Revenues
Our revenues are derived primarily from two sales channels, which we operate as one segment: company restaurants and franchised and licensed restaurants. The following table disaggregates our revenue by sales channel and type of good or service:

|  |  | Quarter Ended
|  |  |  |  | March 30, 2022 |  | March 31, 2021
|  |  |  |  | (In thousands)
Company restaurant sales |  |  |  |  | $ | 43,976 |  |  | $ | 33,569 |
Franchise and license revenue: |  |  |  |  |  |  |
Royalties |  |  |  |  | 26,525 |  |  | 20,844 |
Advertising revenue |  |  |  |  | 18,206 |  |  | 14,111 |
Initial and other fees |  |  |  |  | 4,507 |  |  | 1,838 |
Occupancy revenue |  |  |  |  | 9,893 |  |  | 10,214 |
Franchise and license revenue |  |  |  |  | 59,131 |  |  | 47,007 |
Total operating revenue |  |  |  |  | $ | 103,107 |  |  | $ | 80,576 |

Franchise occupancy revenue consisted of the following:

|  |  | Quarter Ended
|  |  |  |  | March 30, 2022 |  | March 31, 2021
|  |  |  |  | (In thousands)
Operating lease revenue |  |  |  |  | $ | 7,418 |  |  | $ | 7,913 |
Variable lease revenue |  |  |  |  | 2,475 |  |  | 2,301 |
Total occupancy revenue |  |  |  |  | $ | 9,893 |  |  | $ | 10,214 |

Balances related to contracts with customers consist of receivables, deferred franchise revenue and deferred gift card revenue. See Note 3 for details on our receivables.
The components of the change in deferred franchise revenue are as follows:

| (In thousands)
Balance, December 29, 2021 | $ | 19,896 |
Fees received from franchisees | 1,199 |
Franchisee deferred costs (1) | (626) |
Revenue recognized, net (2) | (739) |
Balance, March 30, 2022 | 19,730 |
Less current portion included in other current liabilities | 1,928 |
Deferred franchise revenue included in other noncurrent liabilities | $ | 17,802 |

(1) Deferred costs are contract assets consisting of incentives given to franchisees related to the rollout of kitchen equipment to all franchise locations.
(2) Of this amount $0.6 million was included in the deferred franchise revenue balance as of December 29, 2021.
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Deferred franchise revenue consists primarily of the unamortized portion of initial franchise fees that are currently being amortized into revenue and amounts related to development agreements and unopened restaurants that we will begin amortizing into revenue when the related restaurants are opened net of certain deferred costs. Deferred franchise revenue represents our remaining performance obligations to our franchisees, excluding amounts of variable consideration related to sales-based royalties and advertising.
The Company has entered into equipment purchase contracts of approximately $18.3 million related to the rollout of kitchen equipment for franchise restaurants, which will be paid by the franchisees as the equipment is installed, less approximately $5.7 million in commitments from the Company. Amounts committed from the Company are contract assets that have been netted against deferred revenue and will be recognized as a component of franchise and license revenue over the remaining term of the related franchise agreement. At March 30, 2022, our remaining obligation under these contracts was approximately $9.2 million, $1.6 million of which is included in accounts payable. At March 30, 2022, we had approximately $8.4 million in inventory and $0.7 million in contract assets related to the kitchen equipment rollout.
Deferred gift card liabilities consist of the unredeemed portion of gift cards sold in company restaurants and at third party locations. The balance of deferred gift card liabilities represents our remaining performance obligations to our customers. The balance of deferred gift card liabilities as of March 30, 2022 and December 29, 2021 was $5.8 million and $7.2 million, respectively. During the quarter ended March 30, 2022, we recognized revenue of $0.2 million from gift card redemptions at company restaurants.
Note 9. Operating (Gains), Losses and Other Charges, Net
Operating (gains), losses and other charges, net consisted of the following:

|  |  | Quarter Ended
|  |  |  |  | March 30, 2022 |  | March 31, 2021
|  |  |  |  | (In thousands)
Gains on sales of assets and other, net |  |  |  |  | $ | (146) |  |  | $ | (942) |
Restructuring charges and exit costs |  |  |  |  | 146 |  |  | 1,474 |
Operating (gains), losses and other charges, net |  |  |  |  | $ | — |  |  | $ | 532 |

As of March 30, 2022, we had recorded assets held for sale at their carrying amount of $1.3 million (consisting of property of $1.0 million and other assets of $0.3 million) related to three parcels of real estate. There were no assets held for sale recorded as of December 29, 2021.
Restructuring charges and exit costs consisted of the following:

|  |  | Quarter Ended
|  |  |  |  | March 30, 2022 |  | March 31, 2021
|  |  |  |  | (In thousands)
Exit costs |  |  |  |  | $ | 12 |  |  | $ | 82 |
Severance and other restructuring charges |  |  |  |  | 134 |  |  | 1,392 |
Total restructuring charges and exit costs |  |  |  |  | $ | 146 |  |  | $ | 1,474 |

Exit costs primarily consist of costs related to closed restaurants. Exit cost liabilities related to lease costs are included as a component of operating lease liabilities in our Consolidated Balance Sheets.
As of March 30, 2022 and December 29, 2021, we had accrued severance and other restructuring charges of $0.1 million and $0.1 million, respectively. The balance as of March 30, 2022 is expected to be paid during the next 12 months.
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Note 10. Share-Based Compensation
Total share-based compensation included as a component of general and administrative expenses was as follows:

|  |  | Quarter Ended
|  |  |  |  | March 30, 2022 |  | March 31, 2021
|  |  |  |  | (In thousands)
Employee share awards |  |  |  |  | $ | 3,794 |  |  | $ | 3,253 |
Restricted stock units for board members |  |  |  |  | 221 |  |  | 219 |
Total share-based compensation |  |  |  |  | $ | 4,015 |  |  | $ | 3,472 |

Employee Share Awards
During the quarter ended March 30, 2022, we granted certain employees approximately 233,000 performance share units ("PSUs") with a grant date fair value of $24.51 per share that vest based on the total shareholder return (“TSR”) of our common stock compared to the TSRs of a group of peer companies and approximately 233,000 PSUs with a grant date fair value of $15.59 per share that vest based on our Adjusted EPS growth rate versus plan, as defined under the terms of the award. As the TSR based PSUs contain a market condition, a Monte Carlo valuation was used to determine the grant date fair value. The performance period for these PSUs is the three year fiscal period beginning December 30, 2021 and ending December 25, 2024. The PSUs will completely vest and be earned at the end of the performance period at which point the relative TSR and Adjusted EPS growth rate achievement percentages will be applied to the vested units (from 0% to 200% of the target award). We recognize compensation cost associated with approximately 312,000 of these PSU awards over the entire performance period on a straight-line basis, with compensation cost for the remaining 154,000 PSU awards recognized on a graded-vesting basis due to the accelerated vesting terms for certain retirement eligible individuals.
We also granted certain employees approximately 310,000 restricted stock units ("RSUs") with a grant date fair value of $15.59 per share. The RSUs vest evenly over the three year fiscal period beginning December 30, 2021 and ending December 25, 2024. We recognize compensation cost associated with these RSU awards on a straight-line basis over the entire performance period of the award.
During the quarter ended March 30, 2022, we issued 257,000 shares of common stock related to vested PSUs and RSUs. In addition, approximately 24,000 shares of common stock were deferred and approximately 136,000 shares of common stock were withheld in lieu of taxes related to vested PSUs and RSUs.
As of March 30, 2022, we had approximately $22.9 million of unrecognized compensation cost related to unvested PSU awards and RSU awards outstanding, which have a weighted average remaining contractual term of 2.3 years.
Restricted Stock Units for Board Members
As of March 30, 2022, we had approximately $0.1 million of unrecognized compensation cost related to unvested RSU awards outstanding, which have a weighted average remaining contractual term of 0.2 years.
Note 11. Income Taxes
The effective income tax rate was 27.1% for the quarter ended March 30, 2022, compared to 25.9% for the prior year period.
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Note 12. Net Income Per Share
The amounts used for the basic and diluted net income per share calculations are summarized below:

|  |  | Quarter Ended
|  |  |  |  | March 30, 2022 |  | March 31, 2021
|  |  |  |  | (In thousands, except per share amounts)
Net income |  |  |  |  | $ | 21,855 |  |  | $ | 23,181 |
Weighted average shares outstanding - basic |  |  |  |  | 63,343 |  |  | 65,251 |
Effect of dilutive share-based compensation awards |  |  |  |  | 237 |  |  | 498 |
Weighted average shares outstanding - diluted |  |  |  |  | 63,580 |  |  | 65,749 |
Net income per share - basic |  |  |  |  | $ | 0.35 |  |  | $ | 0.36 |
Net income per share - diluted |  |  |  |  | $ | 0.34 |  |  | $ | 0.35 |
Anti-dilutive share-based compensation awards |  |  |  |  | 829 |  |  | 273 |

Note 13. Shareholders' Deficit
Share Repurchases
Our credit facility permits the repurchase of Denny’s stock and the payment of cash dividends subject to certain limitations. Our Board of Directors approves share repurchases of our common stock. Under these authorizations, we may, from time to time, purchase shares in the open market (including pre-arranged stock trading plans in accordance with the guidelines specified in Rule 10b5-1 under the Securities Exchange Act of 1934, as amended) or in privately negotiated transactions, subject to market and business conditions. Currently, we are operating under a $250 million share repurchase authorization approved by the Board of Directors in December 2019.
During the quarter ended March 30, 2022, we repurchased a total of 0.8 million shares of our common stock for approximately $11.9 million. This brings the total amount repurchased under the current authorization to approximately $44.5 million, leaving approximately $205.5 million that can be used to repurchase our common stock under this authorization as of March 30, 2022. Repurchased shares are included as treasury stock in our Consolidated Balance Sheets and our Consolidated Statement of Shareholders' Deficit.
As of March 30, 2022, 2.7 million shares were held in treasury stock.
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Accumulated Other Comprehensive Loss, Net
The components of the change in accumulated other comprehensive loss, net were as follows:

| Defined Benefit Plans |  | Derivatives |  | Accumulated Other Comprehensive Loss, Net
| (In thousands)
Balance as of December 29, 2021 | $ | (900) |  |  | $ | (53,570) |  |  | $ | (54,470) |
Amortization of net loss (1) | 32 |  |  | — |  |  | 32 |
Changes in the fair value of cash flow derivatives | — |  |  | 6,688 |  |  | 6,688 |
Reclassification of cash flow derivatives to interest expense, net (2) | — |  |  | 990 |  |  | 990 |
Income tax expense related to items of other comprehensive income | (8) |  |  | (1,921) |  |  | (1,929) |
Balance as of March 30, 2022 | $ | (876) |  |  | $ | (47,813) |  |  | $ | (48,689) |

(1) Before-tax amount related to our defined benefit plans that was reclassified from accumulated other comprehensive loss, net and included as a component of pension expense within general and administrative expenses in our Consolidated Statements of Operations during the quarter ended March 30, 2022.
(2) Amounts reclassified from accumulated other comprehensive loss, net into interest expense, net in our Consolidated Statements of Operations represent payments either received from or made to the counterparty for the interest rate swaps. See Note 7 for additional details.
Note 14. Commitments and Contingencies
Legal Proceedings
There are various claims and pending legal actions against or indirectly involving us, incidental to and arising out of the ordinary course of the business. In the opinion of management, based upon information currently available, the ultimate liability with respect to these proceedings and claims will not materially affect our consolidated results of operations or financial position.
Note 15. Supplemental Cash Flow Information

| Quarter Ended
| March 30, 2022 |  | March 31, 2021
| (In thousands)
Income taxes paid, net | $ | 449 |  |  | $ | 421 |
Interest paid | $ | 2,849 |  |  | $ | 4,743 |
Noncash investing and financing activities: |  |  |
Issuance of common stock, pursuant to share-based compensation plans | $ | 4,081 |  |  | $ | 2,435 |
Execution of finance leases | $ | 133 |  |  | $ | — |

Note 16. Subsequent Event
On May 3, 2022, the Company entered into an Asset Purchase Agreement, by and between the Company, as purchaser, and K2 Restaurants, Inc. together with the other sellers and principals party thereto (the "Purchase Agreement") for the acquisition of certain assets and assumption of certain liabilities of the franchise business, Keke's Breakfast Cafe ("Keke's"), and eight Keke’s restaurants owned and operated by the sellers (the "Acquisition"). The Company anticipates that the Acquisition will close during the Company’s second fiscal quarter of 2022.
The aggregate consideration payable to Keke's equityholders will be $82,500,000, payable in cash, subject to certain adjustments. The Company expects to fund the purchase price with a combination of cash on hand and funds available under its existing credit agreement.
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Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations
Forward-Looking Statements
This report includes forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, as codified in Section 27A of the Securities Act and Section 21E of the Securities Exchange Act of 1934, as amended. The Company urges caution in considering its current trends and any outlook on its operations and financial results disclosed in this report. In addition, certain matters discussed in this report may constitute forward-looking statements. These forward-looking statements, which reflect management's 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”, "will" 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 report 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: the evolving COVID-19 pandemic and related containment measures, including the potential for further operational disruption from government mandates affecting restaurants; economic, public health and political conditions that impact consumer confidence and spending, including COVID-19; commodity and labor inflation; the ability to effectively staff restaurants; our ability to maintain adequate levels of liquidity for our cash needs, including debt obligations, payment of dividends, planned share repurchases and capital expenditures as well as the ability of our customers, suppliers, franchisees and lenders to access sources of liquidity to provide for their own cash needs; competitive pressures from within the restaurant industry; our ability to successfully complete the acquisition and subsequent integration of Keke's Breakfast Cafe; 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, 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 and geopolitical events (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 29, 2021, this report on Form 10-Q and in the Company's subsequent quarterly reports on Form 10-Q.
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Statements of Operations
The following table contains information derived from our Consolidated Statements of Operations expressed as a percentage of total operating revenue, except as noted below. Percentages may not add due to rounding.

|  |  | Quarter Ended
|  |  |  |  | March 30, 2022 |  | March 31, 2021
|  |  |  |  |  |  |  |  | (Dollars in thousands)
Revenue: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Company restaurant sales |  |  |  |  |  |  |  |  | $ | 43,976 |  |  | 42.7 | % |  | $ | 33,569 |  |  | 41.7 | %
Franchise and license revenue |  |  |  |  |  |  |  |  | 59,131 |  |  | 57.3 | % |  | 47,007 |  |  | 58.3 | %
Total operating revenue |  |  |  |  |  |  |  |  | 103,107 |  |  | 100.0 | % |  | 80,576 |  |  | 100.0 | %
Costs of company restaurant sales, excluding depreciation and amortization (a): |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Product costs |  |  |  |  |  |  |  |  | 11,244 |  |  | 25.6 | % |  | 8,272 |  |  | 24.6 | %
Payroll and benefits |  |  |  |  |  |  |  |  | 17,086 |  |  | 38.9 | % |  | 12,965 |  |  | 38.6 | %
Occupancy |  |  |  |  |  |  |  |  | 3,240 |  |  | 7.4 | % |  | 2,850 |  |  | 8.5 | %
Other operating expenses |  |  |  |  |  |  |  |  | 7,055 |  |  | 16.0 | % |  | 6,077 |  |  | 18.1 | %
Total costs of company restaurant sales |  |  |  |  |  |  |  |  | 38,625 |  |  | 87.8 | % |  | 30,164 |  |  | 89.9 | %
Costs of franchise and license revenue, excluding depreciation and amortization (a) |  |  |  |  |  |  |  |  | 30,669 |  |  | 51.9 | % |  | 23,758 |  |  | 50.5 | %
General and administrative expenses |  |  |  |  |  |  |  |  | 16,958 |  |  | 16.4 | % |  | 16,947 |  |  | 21.0 | %
Depreciation and amortization |  |  |  |  |  |  |  |  | 3,548 |  |  | 3.4 | % |  | 3,661 |  |  | 4.5 | %
Operating (gains), losses and other charges, net |  |  |  |  |  |  |  |  | — |  |  | — | % |  | 532 |  |  | 0.7 | %
Total operating costs and expenses, net |  |  |  |  |  |  |  |  | 89,800 |  |  | 87.1 | % |  | 75,062 |  |  | 93.2 | %
Operating income |  |  |  |  |  |  |  |  | 13,307 |  |  | 12.9 | % |  | 5,514 |  |  | 6.8 | %
Interest expense, net |  |  |  |  |  |  |  |  | 2,960 |  |  | 2.9 | % |  | 4,277 |  |  | 5.3 | %
Other nonoperating income, net |  |  |  |  |  |  |  |  | (19,615) |  |  | (19.0) | % |  | (30,048) |  |  | (37.3) | %
Income before income taxes |  |  |  |  |  |  |  |  | 29,962 |  |  | 29.1 | % |  | 31,285 |  |  | 38.8 | %
Provision for income taxes |  |  |  |  |  |  |  |  | 8,107 |  |  | 7.9 | % |  | 8,104 |  |  | 10.1 | %
Net income |  |  |  |  |  |  |  |  | $ | 21,855 |  |  | 21.2 | % |  | $ | 23,181 |  |  | 28.8 | %
Other Data: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Company average unit sales |  |  |  |  |  |  |  |  | $ | 682 |  |  |  |  | $ | 523 |  |  |
Franchise average unit sales |  |  |  |  |  |  |  |  | $ | 404 |  |  |  |  | $ | 326 |  |  |
Company equivalent units (b) |  |  |  |  |  |  |  |  | 64 |  |  |  |  | 64 |  |  |
Franchise equivalent units (b) |  |  |  |  |  |  |  |  | 1,572 |  |  |  |  | 1,583 |  |  |
Company same-store sales increase (decrease) vs. prior year (c)(d) |  |  |  |  |  |  |  |  | 30.6 | % |  |  |  | (9.4) | % |  |
Domestic franchise same-store sales increase (decrease) vs. prior year (c)(d) |  |  |  |  |  |  |  |  | 22.8 | % |  |  |  | (9.7) | % |  |

(a)Costs of company restaurant sales percentages are as a percentage of company restaurant sales. Costs of franchise and license revenue percentages are as a percentage of franchise and license revenue. All other percentages are as a percentage of total operating revenue.
(b)Equivalent units are calculated as the weighted average number of units outstanding during a defined time period.
(c)Same-store sales include sales from company restaurants or non-consolidated franchised and licensed restaurants that were open during the comparable periods noted.
(d)Prior year amounts have not been restated for 2022 comparable units.
18

Unit Activity

|  |  | Quarter Ended
|  |  |  |  | March 30, 2022 |  | March 31, 2021
Company restaurants, beginning of period |  |  |  |  | 65 |  |  | 65 |
Units opened |  |  |  |  | — |  |  | — |
Units closed |  |  |  |  | — |  |  | — |
End of period |  |  |  |  | 65 |  |  | 65 |
Franchised and licensed restaurants, beginning of period |  |  |  |  | 1,575 |  |  | 1,585 |
Units opened |  |  |  |  | 5 |  |  | 3 |
Units closed |  |  |  |  | (11) |  |  | (4) |
End of period |  |  |  |  | 1,569 |  |  | 1,584 |
Total restaurants, end of period |  |  |  |  | 1,634 |  |  | 1,649 |

Company Restaurant Operations
Company restaurant sales increased $10.4 million, or 31.0%, for the quarter ended March 30, 2022 as compared to the prior year period. The increase in sales was primarily due to easing of prior year period dine-in restrictions and limited operating hours related to the COVID-19 pandemic in addition to current quarter increases in guest check average. Company same-store sales increased 30.6% for the current year quarter as compared to the prior year period.
Total costs of company restaurant sales as a percentage of company restaurant sales were 87.8% for the quarter ended March 30, 2022 compared to 89.9%, for the prior year period.
Product costs were 25.6% of company restaurant sales for the quarter compared to 24.6% for the prior year period, primarily due to increased commodity costs.
Payroll and benefits were 38.9% of company restaurant sales for the quarter compared to 38.6% in the prior year period. For the current quarter, staff payroll increased 2.0 percentage points as a percentage of sales primarily due to labor inflation, partially offset by a 1.8 percentage point decrease in management payroll due to the leveraging effect of higher sales. Additionally, the current quarter included a 0.8 percentage point increase in workers' compensation costs, partially offset by a 0.7 percentage point decrease in group benefit costs.
Occupancy costs were 7.4% of company restaurant sales for the quarter compared to 8.5% in the prior year period. The decrease as a percentage of sales was primarily due to the leveraging effect of higher sales, partially offset by higher percentage rents due to the increase in sales.
Other operating expenses consist of the following amounts and percentages of company restaurant sales:

|  |  | Quarter Ended
|  |  |  |  | March 30, 2022 |  | March 31, 2021
|  |  |  |  |  |  |  |  | (Dollars in thousands)
Utilities |  |  |  |  |  |  |  |  | $ | 1,577 |  |  | 3.6 | % |  | $ | 1,225 |  |  | 3.6 | %
Repairs and maintenance |  |  |  |  |  |  |  |  | 825 |  |  | 1.9 | % |  | 533 |  |  | 1.6 | %
Marketing |  |  |  |  |  |  |  |  | 1,207 |  |  | 2.7 | % |  | 967 |  |  | 2.9 | %
Other direct costs |  |  |  |  |  |  |  |  | 3,446 |  |  | 7.8 | % |  | 3,352 |  |  | 10.0 | %
Other operating expenses |  |  |  |  |  |  |  |  | $ | 7,055 |  |  | 16.0 | % |  | $ | 6,077 |  |  | 18.1 | %

Other direct costs were lower as a percentage of sales due to the leveraging effect of higher sales and a 1.7 percentage point reduction in legal settlement costs.
19

Franchise Operations
Franchise and license revenue and costs of franchise and license revenue consisted of the following amounts and percentages of franchise and license revenue for the periods indicated:

|  |  | Quarter Ended
|  |  |  |  | March 30, 2022 |  | March 31, 2021
|  |  |  |  |  |  |  |  | (Dollars in thousands)
Royalties |  |  |  |  |  |  |  |  | $ | 26,525 |  |  | 44.9 | % |  | $ | 20,844 |  |  | 44.4 | %
Advertising revenue |  |  |  |  |  |  |  |  | 18,206 |  |  | 30.8 | % |  | 14,111 |  |  | 30.0 | %
Initial and other fees |  |  |  |  |  |  |  |  | 4,507 |  |  | 7.6 | % |  | 1,838 |  |  | 3.9 | %
Occupancy revenue |  |  |  |  |  |  |  |  | 9,893 |  |  | 16.7 | % |  | 10,214 |  |  | 21.7 | %
Franchise and license revenue |  |  |  |  |  |  |  |  | $ | 59,131 |  |  | 100.0 | % |  | $ | 47,007 |  |  | 100.0 | %
Advertising costs |  |  |  |  |  |  |  |  | $ | 18,206 |  |  | 30.8 | % |  | $ | 14,111 |  |  | 30.0 | %
Occupancy costs |  |  |  |  |  |  |  |  | 6,377 |  |  | 10.8 | % |  | 6,539 |  |  | 13.9 | %
Other direct costs |  |  |  |  |  |  |  |  | 6,086 |  |  | 10.3 | % |  | 3,108 |  |  | 6.6 | %
Costs of franchise and license revenue |  |  |  |  |  |  |  |  | $ | 30,669 |  |  | 51.9 | % |  | $ | 23,758 |  |  | 50.5 | %

Franchise and license revenue increased $12.1 million, or 25.8%, for the quarter compared to the prior year period. Royalties increased $5.7 million, or 27.3%, for the current quarter compared to the prior year period. Advertising revenue increased $4.1 million, or 29.0%, for the current quarter compared to the prior year period. The increases in royalty and advertising revenue primarily resulted from a 22.8% increase in domestic same-store sales. These increases were partially offset by a decrease of 11 equivalent units for the quarter.
Initial and other fees increased $2.7 million, or 145.2%, for the quarter compared to the prior year period. The increase in initial and other fees primarily resulted from the recognition of $2.2 million of revenue from the sale and installation of kitchen equipment purchased by franchisees. The revenue recorded related to the sale of equipment has an equal and offsetting expense recorded in other direct costs as described below. Occupancy revenue decreased $0.3 million, or 3.1%, for the current quarter compared to the prior year period.
Costs of franchise and license revenue increased $6.9 million, or 29.1%, for the quarter compared to the prior year period. The increase was primarily related to the increase in advertising costs, which corresponded to the related advertising revenue increase noted above. Occupancy costs decreased $0.2 million, or 2.5%, for the current quarter compared to the prior year period. The decreases in occupancy costs for the current quarter primarily resulted from lease terminations, partially offset by increased percentage rent from higher sales. Other direct franchise costs increased $3.0 million, or 95.7%, for the current quarter compared to the prior year period. The increase in other direct franchise costs was primarily due to $2.2 million in expense recorded as part of the rollout of kitchen equipment to franchisees as mentioned above and a $0.5 million increase in franchise administrative costs in the current period. As a result, costs of franchise and license revenue increased to 51.9% for the quarter ended March 30, 2022 from 50.5% for the prior year period.
Other Operating Costs and Expenses
Other operating costs and expenses such as general and administrative expenses and depreciation and amortization expense relate to both company and franchise operations.
20

General and administrative expenses consisted of the following:

|  |  | Quarter Ended
|  |  |  |  | March 30, 2022 |  | March 31, 2021
|  |  |  |  | (In thousands)
Corporate administrative expenses |  |  |  |  | $ | 11,383 |  |  | $ | 10,872 |
Share-based compensation |  |  |  |  | 4,015 |  |  | 3,472 |
Incentive compensation |  |  |  |  | 2,119 |  |  | 2,086 |
Deferred compensation valuation adjustments |  |  |  |  | (559) |  |  | 517 |
Total general and administrative expenses |  |  |  |  | $ | 16,958 |  |  | $ | 16,947 |

Corporate administrative expenses increased $0.5 million for the quarter ended March 30, 2022 compared to the prior year period. The increase for the quarter was primarily due to temporary cost reductions in the prior year related to the COVID-19 pandemic. Share-based compensation increased $0.5 million for the quarter compared to the prior year period. Changes in deferred compensation valuation adjustments have offsetting gains or losses on the underlying nonqualified deferred plan investments included as a component of other non-operating expense (income), net, for the corresponding periods.
Depreciation and amortization consisted of the following:

|  |  | Quarter Ended
|  |  |  |  | March 30, 2022 |  | March 31, 2021
|  |  |  |  | (In thousands)
Depreciation of property and equipment |  |  |  |  | $ | 2,647 |  |  | $ | 2,715 |
Amortization of financing lease right-of-use assets |  |  |  |  | 442 |  |  | 428 |
Amortization of intangible and other assets |  |  |  |  | 459 |  |  | 518 |
Total depreciation and amortization expense |  |  |  |  | $ | 3,548 |  |  | $ | 3,661 |

The decreases in depreciation and amortization expense during the quarter were primarily due to certain assets becoming fully amortized in the prior year.
Operating (gains), losses and other charges, net consisted of the following:

|  |  | Quarter Ended
|  |  |  |  | March 30, 2022 |  | March 31, 2021
|  |  |  |  | (In thousands)
Gains on sales of assets and other, net |  |  |  |  | $ | (146) |  |  | $ | (942) |
Restructuring charges and exit costs |  |  |  |  | 146 |  |  | 1,474 |
Operating (gains), losses and other charges, net |  |  |  |  | $ | — |  |  | $ | 532 |

Restructuring charges and exit costs consisted of the following:

|  |  | Quarter Ended
|  |  |  |  | March 30, 2022 |  | March 31, 2021
|  |  |  |  | (In thousands)
Exit costs |  |  |  |  | $ | 12 |  |  | $ | 82 |
Severance and other restructuring charges |  |  |  |  | 134 |  |  | 1,392 |
Total restructuring and exit costs |  |  |  |  | $ | 146 |  |  | $ | 1,474 |

Restructuring and exit costs decreased by $1.3 million for the current quarter compared to the prior year period. The decrease for the current quarter was primarily due to prior period relocation costs associated with moving certain employees to our support center in the Dallas, Texas area.
21

Operating income was $13.3 million for the quarter ended March 30, 2022, compared to $5.5 million for the quarter ended March 31, 2021.
Interest expense, net consisted of the following:

|  |  | Quarter Ended
|  |  |  |  | March 30, 2022 |  | March 31, 2021
|  |  |  |  | (In thousands)
Interest on credit facility |  |  |  |  | $ | 899 |  |  | $ | 1,701 |
Interest on interest rate swaps |  |  |  |  | 990 |  |  | 995 |
Interest on financing lease liabilities |  |  |  |  | 607 |  |  | 768 |
Letters of credit and other fees |  |  |  |  | 309 |  |  | 355 |
Interest income |  |  |  |  | (4) |  |  | (8) |
Total cash interest, net |  |  |  |  | 2,801 |  |  | 3,811 |
Amortization of deferred financing costs |  |  |  |  | 158 |  |  | 344 |
Amortization of interest rate swap losses |  |  |  |  | — |  |  | 121 |
Interest accretion on other liabilities |  |  |  |  | 1 |  |  | 1 |
Total interest expense, net |  |  |  |  | $ | 2,960 |  |  | $ | 4,277 |

Total cash interest expense, net decreased by $1.0 million for the current quarter compared to the prior year period. Interest on credit facility borrowings decreased by $0.8 million for the current quarter. This decrease primarily resulted from decreased average borrowings and lower average interest rates in the current quarter compared to the respective prior year period. Interest rates on our borrowings primarily decreased as a result of our credit facility refinancing on August 26, 2021.
Other nonoperating income, net was income of $19.6 million for the current quarter, compared to income of $30.0 million for the prior year period. Other nonoperating income, net for the current quarter primarily consisted of $20.3 million of gains related to valuation adjustments for dedesignated interest rate hedges, partly offset by losses of $0.6 million on deferred compensation plan investments. Prior year other nonoperating income, net for the current quarter primarily consisted of $29.9 million of gains related to interest rate swap valuation adjustments.
Provision for income taxes was $8.1 million for both the current and prior year periods. The effective tax rate was 27.1% for the current quarter compared to 25.9% for the prior year period.
Net income was $21.9 million for the quarter ended March 30, 2022, compared to $23.2 million for the prior year period.
Liquidity and Capital Resources
Our primary sources of liquidity and capital resources are cash generated from operations and borrowings under our credit facility (as described below). Principal uses of cash are operating expenses, capital expenditures and the repurchase of shares of our common stock.
The following table presents a summary of our sources and uses of cash and cash equivalents for the periods indicated:

| Quarter Ended
| March 30, 2022 |  | March 31, 2021
| (In thousands)
Net cash provided by (used in) operating activities | $ | (7,064) |  |  | $ | 10,235 |
Net cash provided by (used in) investing activities | (3,803) |  |  | 180 |
Net cash provided by (used in) financing activities | (13,666) |  |  | 201 |
Increase (decrease) in cash and cash equivalents | $ | (24,533) |  |  | $ | 10,616 |

22

Net cash flows used in operating activities were $7.1 million for the quarter ended March 30, 2022 compared to net cash flows provided by operating activities of $10.2 million for the quarter ended March 31, 2021. The decrease in cash flows provided by (used in) operating activities was primarily due to the timing of prior year accrual payments, collections of receivables and purchases of inventory for our kitchen equipment project. We believe that our estimated cash flows from operations for 2022, combined with our capacity for additional borrowings under our credit facility and cash on hand, will enable us to meet our anticipated cash requirements and fund capital expenditures over the next 12 months.
Net cash flows used in investing activities were $3.8 million for the quarter ended March 30, 2022. These cash flows primarily consisted of capital expenditures of $2.8 million and investments purchases of $1.2 million. Net cash flows provided by investing activities were $0.2 million for the quarter ended March 31, 2021. These cash flows primarily consisted of proceeds from sales of real estate of $1.3 million, proceeds from sales of investments of $0.2 million and collections on notes receivable of $0.2 million, partially offset by capital expenditures of $1.6 million.
Our principal capital requirements have been largely associated with the following:

| Quarter Ended
| March 30, 2022 |  | March 31, 2021
| (In thousands)
Facilities | $ | 913 |  |  | $ | 997 |
Remodeling | 1,310 |  |  | 340 |
Information technology | 214 |  |  | 189 |
Other | 341 |  |  | 57 |
Capital expenditures | $ | 2,778 |  |  | $ | 1,583 |

Net cash flows used in financing activities were $13.7 million for the quarter ended March 30, 2022, which included cash payments for stock repurchases of $12.5 million and payments of tax withholding on share-based compensation of $2.2 million, partially offset by net long-term debt borrowings of $1.0 million. Net cash flows provided by financing activities were $0.2 million for the quarter ended March 31, 2021, which included net long-term debt borrowings of $4.5 million, partially offset by net bank overdraft payments of $3.1 million and payments of tax withholdings on share-based compensation of $1.3 million.
Our working capital deficit was $26.9 million at March 30, 2022 compared to $28.3 million at December 29, 2021. We are able to operate with a substantial working capital deficit because (1) restaurant operations and most food service operations are conducted primarily on a cash (and cash equivalent) basis with a low level of accounts receivable, (2) rapid turnover allows for a limited investment in inventories, and (3) accounts payable for food, beverages and supplies usually becomes due after the receipt of cash from the related sales.
Credit Facility
Denny's and certain of its subsidiaries have a credit facility consisting of a five-year $400 million senior secured revolver (with a $25 million letter of credit sublimit). The credit facility includes an accordion feature that would allow us to increase the size of the facility to $450 million. Borrowings bear a tiered interest rate, which is based on the Company's consolidated leverage ratio. The maturity date for the credit facility is August 26, 2026.
The credit facility is available for working capital, capital expenditures and other general corporate purposes. The credit facility is guaranteed by Denny's and its material subsidiaries and is secured by assets of Denny's and its subsidiaries, including the stock of its subsidiaries (other than its insurance captive subsidiary). It includes negative covenants that are usual for facilities and transactions of this type. The credit facility also includes certain financial covenants with respect to a maximum consolidated leverage ratio and a minimum consolidated fixed charge coverage ratio. We were in compliance with all financial covenants as of March 30, 2022.
As of March 30, 2022, we had outstanding revolver loans of $171.5 million and outstanding letters of credit under the credit facility of $15.7 million. These balances resulted in unused commitments of $212.8 million as of March 30, 2022 under the credit facility.
As of March 30, 2022, borrowings under the credit facility bore interest at a rate of LIBOR plus 1.75% and the commitment fee, paid on the unused portion of the credit facility, was set to 0.25%.
23

Prior to considering the impact of our interest rate swaps, described below, the weighted-average interest rate on outstanding revolver loans was 1.98% and 2.09% as of March 30, 2022 and December 29, 2021, respectively. Taking into consideration our interest rate swaps that are designated as cash flow hedges, the weighted-average interest rate of outstanding revolver loans was 4.19% and 4.44% as of March 30, 2022 and December 29, 2021, respectively.
Kitchen Modernization and Technology Transformation Initiatives
The Company is currently in the process of upgrading and improving its kitchen equipment throughout the domestic system. The rollout began during the first quarter of 2022 and is expected to be substantially complete by the end of 2022. This investment is expected to yield long-term benefits through menu enhancements across all dayparts but especially the dinner daypart with new and improved food offerings. The new equipment is also expected to provide immediate benefits through increased kitchen efficiency and productivity while also reducing food waste.
The Company has entered into equipment purchase contracts of approximately $18.3 million related to the rollout of kitchen equipment for franchise restaurants, which will be paid by the franchisees as the equipment is installed, less approximately $5.7 million in commitments from the Company. Amounts committed from the Company are contract assets that have been netted against deferred revenue and recognized as a component of franchise and license revenue over the remaining term of the related franchise agreement. At March 30, 2022, our remaining obligation under these contracts was approximately $9.2 million, $1.6 million of which is included in accounts payable. At March 30, 2022, we had approximately $8.4 million in inventory and $0.7 million in contract assets related to the kitchen equipment rollout.
The Company intends to initiate the rollout of a new cloud-based restaurant technology platform throughout the domestic system which will lay the foundation for future technology initiatives to further enhance the guest experience. The rollout is expected to begin during the second half of 2022 and be substantially complete by the end of 2023.
The Company has committed to investing approximately $10 million towards the cost and installation of the kitchen equipment package (approximately $5.7 million) and the new cloud-based restaurant technology platform (approximately $4.3 million) in domestic franchise restaurants. Additionally, the Company has negotiated favorable financing terms on behalf of its franchisees for the remaining cost.
Critical Accounting Policies and Estimates
For information regarding our Critical Accounting Policies and Estimates, see the "Critical Accounting Policies and Estimates" section in Part II, Item 7, "Management’s Discussion and Analysis of Financial Condition and Results of Operations" in our Annual Report on Form 10-K for the fiscal year ended December 29, 2021.
Implementation of New Accounting Standards
Information regarding the implementation of new accounting standards is incorporated by reference from Note 2 to our unaudited Consolidated Financial Statements set forth in Part I, Item 1 of this report.
Item 3. Quantitative and Qualitative Disclosures About Market Risk
Interest Rate Risk
We have exposure to interest rate risk related to certain instruments entered into for other than trading purposes. Specifically, as of March 30, 2022, borrowings under our credit facility bore interest at variable rates based on LIBOR plus 1.75% per annum.
We have receive-variable, pay-fixed interest rate swaps to hedge the forecasted cash flows of our floating rate debt.
24

A summary of our interest rate swaps as of March 30, 2022 is as follows:

Trade Date |  | Effective Date |  | Maturity Date |  | Notional Amount |  | Fair Value |  | Fixed Rate
|  |  |  |  |  | (In thousands) |  |
Swaps designated as cash flow hedges |  |  |  |  |  |  |  |  |  |
March 20, 2015 |  | March 29, 2018 |  | March 31, 2025 |  | $ | 120,000 |  |  | $ | 104 |  |  | 2.44 | %
October 1, 2015 |  | March 29, 2018 |  | March 31, 2026 |  | $ | 50,000 |  |  | $ | (59) |  |  | 2.46 | %
Dedesignated swaps |  |  |  |  |  |  |  |  |  |
February 15, 2018 |  | March 31, 2020 |  | December 31, 2033 |  | $ | 120,000 |  | (1) | $ | (23,309) |  |  | 3.19 | %
Total |  |  |  |  |  | $ | 290,000 |  |  | $ | (23,264) |  |  |

(1) The notional amounts of the swaps entered into on February 15, 2018 increase periodically until they reach the maximum notional amount of $425.0 million on September 28, 2029.
As of March 30, 2022, the total notional amount of our interest rate swaps was in excess of 100% of our floating rate debt. Based on the portion of the swaps in excess of our floating rate debt as of March 30, 2022, a hypothetical change of 100 basis points in LIBOR would change our annual cash flow by approximately $1.2 million. Depending on market considerations, fluctuations in the fair values of our interest rate swaps could be significant. With the exception of these changes in the fair value of our interest rate swaps and in the levels of borrowings under our credit facility, there have been no material changes in our quantitative and qualitative market risks since the prior reporting period. For additional information related to our interest rate swaps, including changes in the fair value, refer to Notes 6, 7 and 13 to our unaudited Consolidated Financial Statements in Part I, Item 1 of this report.
Item 4. Controls and Procedures
As required by Rule 13a-15(b) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), our management conducted an evaluation (under the supervision and with the participation of our Chief Executive Officer, John C. Miller, and our Executive Vice President and Chief Financial Officer, Robert P. Verostek) as of the end of the period covered by this Quarterly Report on Form 10-Q, of the effectiveness of our disclosure controls and procedures as defined in Rule 13a-15(e) under the Exchange Act. Based on that evaluation, Messrs. Miller and Verostek each concluded that our disclosure controls and procedures are effective to provide reasonable assurance that information required to be disclosed in the reports that we file or submit under the Exchange Act (i) is recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission's rules and forms and (ii) is accumulated and communicated to our management, including Messrs. Miller and Verostek, as appropriate to allow timely decisions regarding required disclosure.
There were no changes in our internal control over financial reporting identified in connection with the evaluation required by Rule 13a-15(d) of the Exchange Act that occurred during our fiscal quarter ended March 30, 2022 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
25

PART II - OTHER INFORMATION
Item 1. Legal Proceedings
Information regarding legal proceedings is incorporated by reference from Note 14 to our unaudited Consolidated Financial Statements set forth in Part I, Item 1 of this report.
Item 1A. Risk Factors
There have been no material changes in the risk factors set forth in Part I, Item 1A, “Risk Factors” in our Annual Report on Form 10-K for the fiscal year ended December 29, 2021.
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
Purchases of Equity Securities by the Issuer
The table below provides information concerning repurchases of shares of our common stock during the quarter ended March 30, 2022.

Period | Total Number of Shares Purchased |  | Average Price Paid Per Share (1) |  | Total Number of Shares Purchased as Part of Publicly Announced Programs (2) |  | Approximate Dollar Value of Shares that May Yet be Purchased Under the Programs (2)
| (In thousands, except per share amounts)
December 30, 2021 - January 26, 2022 | 422 |  |  | $ | 15.71 |  |  | 422 |  |  | $ | 210,768 |
January 27, 2022 - February 23, 2022 | 332 |  |  | 15.73 |  |  | 332 |  |  | $ | 205,547 |
February 24, 2022 - March 30, 2022 | — |  |  | — |  |  | — |  |  | $ | 205,547 |
Total | 754 |  |  | $ | 15.72 |  |  | 754 |  |  |

(1)Average price paid per share excludes commissions.
(2)On December 2, 2019, we announced that our Board of Directors approved a share repurchase program, authorizing us to repurchase up to an additional $250 million of our common stock (in addition to prior authorizations). Such repurchases may take place from time to time in the open market (including pre-arranged stock trading plans in accordance with the guidelines specified in Rule 10b5-1 under the Exchange Act) or in privately negotiated transactions, subject to market and business conditions. During the quarter ended March 30, 2022, we purchased 0.8 million shares of our common stock for an aggregate consideration of approximately $11.9 million pursuant to the share repurchase program.
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Item 6. Exhibits
The following are included as exhibits to this report:

Exhibit No. |  | Description
10.1 |  | 2022 Long-Term Incentive Program Restricted Stock Unit Award Certificate.
10.2 |  | 2022 Long-Term Incentive Program Performance Share Unit Award Certificate.
31.1 |  | Certification of John C. Miller, Chief Executive Officer of Denny's Corporation, pursuant to Rule 13a-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
31.2 |  | Certification of Robert P. Verostek, Executive Vice President and Chief Financial Officer of Denny's Corporation, pursuant to Rule 13a-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
32.1 |  | Certification of John C. Miller, Chief Executive Officer of Denny's Corporation, and Robert P. Verostek, Executive Vice President and Chief Financial Officer of Denny's Corporation, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
101.INS |  | Inline XBRL Instance Document (the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document)
101.SCH |  | Inline XBRL Taxonomy Extension Schema Document
101.CAL |  | Inline XBRL Taxonomy Extension Calculation Linkbase Document
101.LAB |  | Inline XBRL Taxonomy Extension Label Linkbase Document
101.PRE |  | Inline XBRL Taxonomy Extension Presentation Linkbase Document
101.DEF |  | Inline XBRL Taxonomy Extension Definition Linkbase Document
104 |  | Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101)

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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

|  | DENNY'S CORPORATION |
Date: | May 3, 2022 | By: | /s/ Robert P. Verostek |
|  |  | Robert P. Verostek |
|  |  | Executive Vice President and Chief Financial Officer |
Date: | May 3, 2022 | By: | /s/ Jay C. Gilmore |
|  |  | Jay C. Gilmore |
|  |  | Senior Vice President, Chief Accounting Officer and Corporate Controller |

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