On May 1, restaurateur and Moons Over My Hammy specialist Denny's (NASDAQ:DENN) released first-quarter earnings for the period ended March 28.
- Reducing interest expenses by 23% from a voluntary prepayment of outstanding debt helped profit rise 63.3%.
- Slow sales, along with increasing labor wages, led to a decline in gross margin.
- Margins were also affected by rising commodity prices for orange juice and shell eggs.
- Motley Fool CAPS investors seem to prefer breakfast from their local Denny's. It rates four stars, compared to competitors IHOP (NYSE:IHP) and Applebee's (NASDAQ:APPB), which rate three stars and one star respectively.
(Figures in millions, except per-share data)
Income Statement Highlights
|
Q1 2007 |
Q1 2006 |
Change | |
|---|---|---|---|
|
Sales |
$236.8 |
$248.0 |
(4.5%) |
|
Net Profit |
$1.2 |
$0.7 |
63.3% |
|
EPS |
$0.01 |
$0.01 |
0.0% |
|
Diluted Shares |
99.0 |
96.9 |
2.1% |
Get back to basics with the income statement.
Margin Checkup
|
Q1 2007 |
Q1 2006 |
Change* | |
|---|---|---|---|
|
Gross Margin |
16.4% |
18.3% |
(1.9) |
|
Operating Margin |
5.4% |
6.1% |
(0.7) |
|
Net Margin |
0.5% |
0.3% |
0.2 |
Margins are the earnings engine.
Balance Sheet Highlights
|
Assets |
Q1 2007 |
Q1 2006 |
Change |
|---|---|---|---|
|
Cash + ST Invest. |
$35.2 |
$29.9 |
17.6% |
|
Accounts Rec. |
$13.5 |
$16.6 |
(18.7%) |
|
Inventory |
$8.3 |
$7.2 |
15.3% |
|
Liabilities |
Q1 2007 |
Q1 2006 |
Change |
|---|---|---|---|
|
Accounts Payable |
$40.4 |
$40.9 |
(1.2%) |
|
Long-Term Debt |
$436.3 |
$544.7 |
(19.9%) |
The balance sheet reflects the company's health.
Cash Flow Highlights
|
YTD 2007 |
YTD 2006 |
Change | |
|---|---|---|---|
|
Cash From Ops. |
$14.5 |
$7.2 |
101.4% |
|
Capital Expenditures |
$4.6 |
$7.0 |
(34.3%) |
|
Free Cash Flow |
$9.9 |
$0.2 |
-- |
Free cash flow is a Fool's best friend.
Related Foolishness:
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