Shareholders' Deficit

9 Months Ended

Sep. 29, 2021

Stockholders' Equity Attributable to Parent [Abstract]

Shareholders' Deficit

Shareholders' Deficit

Share Repurchases

Our New 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 25, 2020, we suspended share repurchases as of February 27, 2020 and terminated our previously approved Rule 10b5-1 Repurchase Plan effective March 16, 2020 in light of uncertain market conditions arising from the COVID-19 pandemic. Prior to the refinancing of our New Credit Facility in the third quarter of 2021, share repurchase restrictions were in place under our Old Credit Facility. As a result of refinancing of our credit facility in the third quarter of 2021, we resumed our share repurchase program.

During the quarter ended September 29, 2021, we repurchased a total of 0.4 million shares of our common stock for approximately $6.6 million. This brings the total amount repurchased under the current authorization to approximately $8.6 million, leaving approximately $241.4 million that can be used to repurchase our common stock under this authorization as of September 29, 2021. Repurchased shares are included as treasury stock in our Condensed Consolidated Balance Sheets and our Condensed Consolidated Statement of Shareholders' Deficit.

In the fourth quarter of fiscal 2020, the Board approved the retirement of 54.0 million shares of treasury stock at a weighted average share price of $10.26. As of September 29, 2021, 0.4 million shares were held in treasury stock.

Issuance and Sale of Common Stock

During the quarter ended September 23, 2020, the Company entered into an underwriting agreement with Wells Fargo Securities, LLC, as representative of the several underwriters named therein, for the issuance and sale by the Company of 8,000,000 shares of its common stock, par value $0.01 per share, in an underwritten public offering at a price to the public of $9.15 per share. On July 6, 2020, the Company received net proceeds of $69.6 million from the sale of shares, after deducting the underwriters' discounts and commissions and offering expenses.

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 30, 2020	$	(978)	$	(59,427)	$	(60,405)
Amortization of net loss (1)	120		—		120
Changes in the fair value of cash flow derivatives	—		2,282		2,282
Reclassification of cash flow derivatives to interest expense, net (2)	—		3,010		3,010
Amortization of unrealized losses related to dedesignated derivatives to interest expense, net (3)	—		166		166
Income tax expense related to items of other comprehensive income	(31)		(1,398)		(1,429)
Balance as of September 29, 2021	$	(889)	$	(55,367)	$	(56,256)

(1)    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 Condensed Consolidated Statements of Operations during the three quarters ended September 29, 2021.

(2)    Amounts reclassified from accumulated other comprehensive loss, net into interest expense, net in our Condensed 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.

(3)    The losses related to the 2018 Swaps will continue to be included in accumulated other comprehensive loss, net and will be amortized as a component of interest expense, net in our Consolidated Statements of Operations over the remaining term of the 2018 Swaps. For the three quarters ended September 29, 2021, we amortized approximately $0.2 million of losses to interest expense, net related to the 2018 Swaps. We expect to amortize less than $0.1 million from accumulated other comprehensive loss related to our interest rate swaps during the next 12 months. See Note 7 for additional details.