SPARTANBURG, S.C., Apr 12, 2012 (BUSINESS WIRE) --Denny's Corporation (NASDAQ: DENN), one of America's largest
full-service family restaurant chains, today announced that it has
entered into a new five-year $250 million senior secured bank credit
facility, comprised of a $190 million term loan and a $60 million
revolving line of credit. The new facility refinances Denny's senior
secured debt from September 2010 and amended in March 2011, which had a
term loan originally in the amount of $250 million and a $60 million
revolver. Wells Fargo Securities, LLC, Regions Capital Markets, a
division of Regions Bank, and GE Capital Markets, Inc. are the Joint
Lead Arrangers and Joint Bookrunners with Wells Fargo Bank, N. A.,
serving as Administrative Agent and L/C Issuer, and Cadence Bank and RBS
Citizens, N.A. serving as Co-Documentation Agents.
The refinanced facility has a reduced interest rate of LIBOR plus 300
basis points for the term loan and revolver. This compares to the prior
facility which had an interest rate of LIBOR plus 375 basis points, with
a LIBOR floor of 1.50% for the term loan and no LIBOR floor for the
revolver. The refinancing is expected to result in annualized interest
expense savings of approximately $5 million (including approximately $4
million of annualized cash interest expense savings), based on current
interest rates.
The term loan will be amortized 10% per year paid quarterly with the
balance due at maturity. In addition, the Company will have the
opportunity to further reduce interest rates and increase its
flexibility for the use of cash by achieving lower leverage ratios. The
Company estimates that the closing of its new bank facility will result
in a one-time charge to other nonoperating expense of approximately $8
million in the second quarter of 2012, as a result of charges for the
unamortized portion of deferred financing costs and original issue
discount related to the prior facility, and portion of the fees related
to the new facility.
John Miller, President and Chief Executive Officer, stated, "Our new
credit facility is a testament to the tremendous progress Denny's has
made over the past several years with its franchise focused business
model, resulting in a stronger balance sheet with growing profitability
and free cash flow. In addition to reducing interest costs, this
refinancing allows the Company to further strengthen its balance sheet
with more flexibility to create additional value for stockholders."
About Denny's
Denny's is one of America's largest full-service family restaurant
chains, currently operating 1,685 franchised, licensed, and
company-owned restaurants across the United States, Canada, Costa Rica,
Mexico, Honduras, Guam, Curaçao,
Puerto Rico and New Zealand. 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.
Forward Looking Statements
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 our
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 "expects", "anticipates",
"believes", "intends", "plans", "hopes", 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: the competitive pressures from within the restaurant
industry; the level of success of the Company's strategic and operating
initiatives, advertising and promotional efforts; adverse publicity;
changes in business strategy or development plans; terms and
availability of capital; regional weather conditions; overall changes in
the general economy, 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, 2011 (and in the Company's subsequent quarterly
reports on Form 10-Q).
SOURCE: Denny's Corporation
Investor:
Denny's Corporation
Whit Kincaid, 877-784-7167
or
Media:
ICR
Liz
Brady, 646-277-1226