ISS / RiskMetrics Group Recognizes Substantial Operational Issues and Underperformance at Denny's and Supports Change to Board of Directors

CHICAGO, May 7 /PRNewswire/ -- The Committee to Enhance Denny's today announced that ISS / RiskMetrics Group, the nation's leading proxy advisory firm, has recommended that shareholders of Denny's Corporation (Nasdaq: DENN) vote on the Committee's GOLD proxy card to elect Jonathan Dash to the Board of Directors of Denny's at the annual meeting of shareholders scheduled to be held on May 19, 2010.  The Committee urges all shareholders to vote the GOLD proxy card to elect all three of its nominees -- Jonathan Dash, David Makula and Patrick Arbor-- by telephone, Internet or by signing, dating and returning the GOLD proxy card today.

In making its recommendation that shareholders vote for the election of Jonathan Dash, ISS / RiskMetrics stated that Mr. Dash has "a successful track record of creating value in the restaurant business..." and that it believes "Mr. Dash's experience would enhance the board's industry expertise and help deal with operational issues."

ISS / RiskMetrics performed a detailed analysis of both sides' positions with respect to the election contest and carefully considered Denny's operational, financial and share price performance as compared to its peers, particularly DineEquity's IHOP.  ISS / RiskMetrics expressed concerns shared by the Committee with certain key financial metrics and poor total shareholder returns.  Specifically, ISS / RiskMetrics stated:

• "In summary, our review of Denny's financial metrics shows long term underperformance compared to IHOP in terms of the restaurant footprint, revenue growth and [same store sales ("SSS")] metrics.  Denny's total unit count has declined since the current management took charge in 2001. Contracting restaurant footprint coupled with greater number of franchised stores has translated in substantially lower revenue for the company in 2009 than in 2001.  The declining trend for Denny's cannot be attributable to macro-economic or industry conditions, as during the same period IHOP has benefited from strong unit and revenue growth.  Moreover, Denny's has suffered from faster decline in SSS growth, accompanied by falling guest count."
• "Further, in terms of share price performance, Denny's underperformed DineEquity and its peers, even if we credit the entire stock rally post dissident Schedule 13D filing to the Flying J/Pilot Travel deal as the company suggests, which we don't believe is entirely appropriate, over 1-year, 3-year and 5-year periods ending May 3, 2010."
• "As such, given the long-term underperformance issues, we believe dissidents have made a reasonable case for change at the board."

David Makula, Co-Chairman of the Committee, stated, "We are pleased that ISS / RiskMetrics recognizes Denny's long-term underperformance and that it supports our call for change on the Board.  We believe the need for positive change at Denny's is clear, and support from ISS / RiskMetrics, the nation's leading proxy advisory firm, is an important step in achieving this.  However, it is imperative that shareholders vote for all three of our independent and highly-qualified nominees -- Jonathan Dash, David Makula and Patrick Arbor -- to help ensure that our plan to maximize shareholder value is implemented."  

SOURCE The Committee to Enhance Denny's