Results being what they are, many public restaurant companies try to turn the spotlight off their numbers when conferring with investors. Not Denny’s, despite the bitterness of the figures it shared during Tuesday’s conference call with Wall Street analysts.
Management noted, for instance, that fending off an attempt by dissident shareholders to seize control of the board cost the company $1.5 million.
Although the executives didn’t say as much, that unsuccessful raid precipitated the departure of longtime CEO Nelson Marchioli, leaving Denny’s with a $1.8-million “exit restructuring cost,” as CFO Mark Wolfinger put it. The number could climb appreciably. It includes an $800,000 payment to Marchioli, apparently as severance pay. But Wolfinger noted that Marchioli is contesting the amount. Arbitration could raise the exit payment to as much as $3.2 million, Wolfinger noted.
Call participants learned that Denny’s has already transformed 21 Flying J truck stop restaurants into Denny’s outlets, at a cost of roughly $565,000 per store. But those conversions will only contribute about $1 million to Denny’s coffers during fiscal 2010, executives revealed.
But not all the numbers were a splash of cold water. Acting CEO Debra Smithart-Oglesby disclosed that Denny’s is embarking on a refurbishment drive. The cost, she said, will be about $50,000 per store, “versus a full remodel of $250,000,” she said.
In tests, the facelift yielded another positive number, a 2-percent lift in guest counts, the former Chili’s exec noted.