Segment Information

12 Months Ended

Dec. 28, 2022

Segment Reporting [Abstract]

Segment Information

Segment Information

We manage our business by brand and as a result have identified two operating segments, Denny’s and Keke’s. In addition, we have identified Denny’s as a reportable segment. The Denny’s reportable segment includes the results of all company and franchised and licensed Denny’s restaurants. Our Keke’s operating segment, which includes the results of all company and franchise restaurants, is included in Other.

The primary sources of revenues for all operating segments are the sale of food and beverages at our company restaurants and the collection of royalties, advertising revenue, initial and other fees, including occupancy revenue, from restaurants operated by our franchisees. We do not rely on any major customer as a source of sales and the customers and assets of all operating segments are located predominantly in the United States. There are no material transactions between segments.

Management’s measure of segment income is restaurant-level operating margin. The Company defines restaurant-level 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. The Company excludes general and administrative expenses, which include primarily non restaurant-level costs associated with support of company and franchised restaurants and other activities at their corporate office. The Company excludes 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. The Company excludes operating (gains), losses and other charges, net, to provide a clearer perspective of its ongoing operating performance and a more relevant comparison to prior period results. Restaurant-level operating margin is used by our chief operating decision maker (“CODM”) to evaluate restaurant-level operating efficiency and performance.

The following tables present revenues by segment and a reconciliation of restaurant-level operating margin to operating income:

	Fiscal Year Ended
	December 28, 2022		December 29, 2021		December 30, 2020
Revenues by operating segment:	(In thousands)
Denny’s	$	447,687	$	398,174	$	288,605
Other	8,742		—		—
Total operating revenue	$	456,429	$	398,174	$	288,605
Segment income:
Denny’s	$	138,555	$	142,102	$	79,688
Other	3,089		—		—
Total restaurant-level operating margin	$	141,644	$	142,102	$	79,688
General and administrative expenses	$	67,173	$	68,686	$	55,040
Depreciation and amortization	14,862		15,446		16,161
Operating (gains), losses and other charges, net	(1,005)		(46,105)		1,808
Total other operating expenses	81,030		38,027		73,009
Operating income	60,614		104,075		6,679
Interest expense, net	13,769		15,148		17,965
Other nonoperating income, net	(52,585)		(15,176)		(4,171)
Net income (loss) before income taxes	99,430		104,103		(7,115)
Provision for (benefit from) income taxes	24,718		26,030		(1,999)
Net income (loss)	$	74,712	$	78,073	$	(5,116)

	Fiscal Year Ended
	December 28, 2022		December 29, 2021
Segment assets:	(In thousands)
Denny’s	$	394,051	$	422,852
Other	104,284		12,675
Total assets	$	498,335	$	435,527