Driven Brands Holdings Inc. (NASDAQ: DRVN) (“Driven Brands” or the “Company”) today reported financial results for the second quarter ending June 29, 2024.
For the second quarter, Driven Brands delivered revenue of $612 million, up 1% versus the prior year. System-wide sales were $1.7 billion, up 1% versus the prior year primarily driven by 0.5% same store sales growth and 115 net new units.
Net Income was $30.2 million or $0.18 per diluted share versus $37.7 million or $0.22 per diluted share in the prior year. Adjusted Net Income1 was $58.0 million or $0.35 per diluted share versus $45.7 million or $0.27 per diluted share in the prior year. Adjusted EBITDA1 was $152.2 million, up 4% versus the prior year.
“We are proud to report that the Driven platform delivered its 14th straight quarter of same store sales growth. Take 5 Oil Change led the charge once again this quarter, with revenue growth of 16% underpinned by 6% same store sales growth and 19% year-over-year unit growth,” said Jonathan Fitzpatrick, President and Chief Executive Officer.
“We are pleased with our first half performance, driven by our essential non-discretionary businesses. Looking ahead, our key priorities remain continuing to achieve strong financial results, reducing debt with free cash flow, and actively managing our portfolio,” Fitzpatrick concluded.
Second Quarter 2024 Key Performance Indicators by Segment
System-wide Sales
| Store Count | Same-Store
| Revenue
| Segment Adjusted
| |||||
Maintenance | $ | 535.4 | 1,853 | 4.3 | % | $ | 277.9 | $ | 102.9 |
Car Wash | 155.5 | 1,108 | (4.1 | )% | 156.9 | 33.8 | |||
Paint, Collision & Glass | 862.2 | 1,887 | (0.5 | )% | 112.0 | 35.2 | |||
Platform Services | 115.8 | 205 | N/A | 61.2 | 25.3 | ||||
Corporate / Other | N/A | N/A | N/A | 3.5 | |||||
Total | $ | 1,668.8 | 5,053 | 0.5 | % | $ | 611.6 | ||
Capital and Liquidity
The Company ended the second quarter with total liquidity of $316.1 million consisting of $148.8 million in cash and cash equivalents and $167.3 million of undrawn capacity on its variable funding securitization senior notes and revolving credit facility. This did not include the additional $135.0 million Series 2022 Class A-1 Notes that expand the Company’s variable funding note borrowing capacity if the Company elects to exercise them, assuming certain conditions continue to be met.
On July 29, 2024, the Company closed an offering by certain of its subsidiaries for $275.0 million in Series 2024 Class A-2 senior notes and $400.0 million in variable funding securitization senior notes, which were undrawn at closing. The 2024 variable funding notes replaced the $115.0 million Series 2019-3 variable funding notes, increasing total liquidity and undrawn capacity by $285.0 million.
Michael Diamond Appointed as Chief Financial Officer of Driven Brands Holdings Inc.
In a separate release today, the Company announced that it appointed Michael Diamond as the Chief Financial Officer (CFO), effective August 9, 2024. Mr. Diamond joins the Company from The Michaels Companies where he served as the CFO since 2020. He has extensive financial and multi-unit retail experience. Joel Arnao, who has served as interim CFO since May 2024, will remain with the Company and continue in his role as Senior Vice President, FP&A, Investor Relations, and Treasury.
Fiscal Year 2024 Outlook
The Company updates its financial outlook for fiscal year 2024:
Original Outlook | Current Range Expectations | |
Revenue | ~$2.35 - $2.45 billion | Low-end |
Adjusted EBITDA1 | ~$535 - $565 million | Mid - to High-end |
Adjusted EPS1 | ~$0.88 - $1.00 | High-end |
The Company also expects:
- Same-store sales growth of 1% to 3% from the original outlook of 3% to 5%
- Net store growth of approximately 205 to 220 consistent with the original outlook
Note: The Company has not included potential future M&A in its outlook for fiscal year 2024.
__________ |
1 Adjusted EBITDA, Adjusted Net Income and Adjusted EPS are non-GAAP financial measures. See “Reconciliation of Non-GAAP Financial Measures” for additional information on non-GAAP financial measures and a reconciliation to the most comparable GAAP measures. Forward-looking estimates of Adjusted EBITDA and Adjusted EPS are made in a manner consistent with the relevant definitions and assumptions noted herein. |
Conference Call
Driven Brands will host a conference call to discuss second quarter 2024 results today, Thursday, August 1, 2024, at 8:30 a.m. ET. The call will be available by webcast and can be accessed by visiting Driven Brands’ Investor Relations website at investors.drivenbrands.com. A replay of the call will be available for at least three months.
About Driven Brands
Driven Brands™, headquartered in Charlotte, NC, is the largest automotive services company in North America, providing a range of consumer and commercial automotive needs, including paint, collision, glass, vehicle repair, oil change, maintenance and car wash. Driven Brands is the parent company of some of North America’s leading automotive service businesses including Take 5 Oil Change®, Take 5 Car Wash®, Meineke Car Care Centers®, Maaco®, 1-800-Radiator & A/C®, Auto Glass Now®, and CARSTAR®. Driven Brands has more than 5,000 locations across 13 countries, and services approximately 70 million vehicles annually. Driven Brands’ network generates approximately $2.3 billion in annual revenue from approximately $6.4 billion in system-wide sales.
Disclosure Regarding Forward-Looking Statements
This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements are generally identified by the use of forward-looking terminology, including the terms “anticipate,” “believe,” “continue,” “could,” “estimate,” “expect,” “intend,” “likely,” “may,” “plan,” “possible,” “potential,” “predict,” “project,” “should,” “target,” “will,” “would” and, in each case, their negative or other various or comparable terminology. All statements other than statements of historical facts contained in this Press Release, including statements regarding our strategy, future operations, future financial position, future revenue, projected costs, prospects, trends, plans, objectives of management, impact of accounting standards and outlook, impairments, and expected market growth are forward-looking statements. In particular, forward-looking statements include, among other things, statements relating to: (i) our strategy, outlook and growth prospects; (ii) our operational and financial targets and dividend policy; (iii) general economic trends and trends in the industry and markets; (iv) the risks and costs associated with the integration of, and our ability to integrate, our stores and business units successfully; (v) the proper application of generally accepted accounting principles, which are highly complex and involve many subjective assumptions, estimates, and judgments and (vi) the competitive environment in which we operate. Forward-looking statements are not based on historical facts, but instead represent our current expectations and assumptions regarding our business, the economy and other future conditions, and involve known and unknown risks, uncertainties and other important factors that may cause our actual results, performance, or achievements to be materially different from any future results, performance, or achievements expressed or implied by the forward-looking statements. It is not possible to predict or identify all such risks. These risks include, but are not limited to, the risk factors that are described under the section titled “Risk Factors” in our Annual Report on Form 10-K for the fiscal year ended December 30, 2023 as well as in our other filings with the Securities and Exchange Commission, which are available on its website at www.sec.gov. Given these uncertainties, you should not place undue reliance on these forward-looking statements.
DRIVEN BRANDS HOLDINGS INC. AND SUBSIDIARIES | ||||||||||||||
CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED) | ||||||||||||||
Three Months Ended | Six Months Ended | |||||||||||||
(in thousands, except per share amounts) | June 29, 2024 | July 1, 2023 | June 29, 2024 | July 1, 2023 | ||||||||||
Net Revenue: | ||||||||||||||
Franchise royalties and fees | $ | 50,029 | $ | 49,805 | $ | 95,074 | $ | 93,320 | ||||||
Company-operated store sales | 394,681 | 394,578 | 769,137 | 770,644 | ||||||||||
Independently-operated store sales | 60,280 | 61,533 | 113,327 | 114,065 | ||||||||||
Advertising contributions | 24,911 | 24,749 | 48,981 | 46,426 | ||||||||||
Supply and other revenue | 81,665 | 76,186 | 157,273 | 144,863 | ||||||||||
Total net revenue | 611,566 | 606,851 | 1,183,792 | 1,169,318 | ||||||||||
Operating Expenses: | ||||||||||||||
Company-operated store expenses | 254,174 | 257,040 | 496,227 | 500,449 | ||||||||||
Independently-operated store expenses | 31,956 | 31,958 | 61,311 | 61,322 | ||||||||||
Advertising expenses | 24,911 | 24,749 | 48,981 | 46,426 | ||||||||||
Supply and other expenses | 40,554 | 42,106 | 76,770 | 79,372 | ||||||||||
Selling, general, and administrative expenses | 121,123 | 96,815 | 237,525 | 209,143 | ||||||||||
Acquisition related costs | 271 | 3,750 | 2,065 | 5,597 | ||||||||||
Store opening costs | 940 | 1,377 | 2,203 | 2,402 | ||||||||||
Depreciation and amortization | 44,633 | 45,419 | 87,862 | 83,617 | ||||||||||
Asset impairment charges and lease terminations | 12,497 | 6,044 | 31,823 | 6,211 | ||||||||||
Total operating expenses | 531,059 | 509,258 | 1,044,767 | 994,539 | ||||||||||
Operating income | 80,507 | 97,593 | 139,025 | 174,779 | ||||||||||
Other expenses, net: | ||||||||||||||
Interest expense, net | 31,796 | 40,871 | 75,568 | 79,012 | ||||||||||
Foreign currency transaction loss (gain), net | 681 | (1,302 | ) | 5,002 | (2,977 | ) | ||||||||
Other expense, net | 32,477 | 39,569 | 80,570 | 76,035 | ||||||||||
Income before taxes | 48,030 | 58,024 | 58,455 | 98,744 | ||||||||||
Income tax expense | 17,871 | 20,275 | 24,035 | 31,246 | ||||||||||
Net income | 30,159 | 37,749 | 34,420 | 67,498 | ||||||||||
Earnings per share: | ||||||||||||||
Basic | $ | 0.18 | $ | 0.23 | $ | 0.21 | $ | 0.41 | ||||||
Diluted | $ | 0.18 | $ | 0.22 | $ | 0.21 | $ | 0.40 | ||||||
Weighted average shares outstanding | ||||||||||||||
Basic | 159,795 | 162,911 | 159,713 | 162,848 | ||||||||||
Diluted | 160,765 | 166,888 | 160,683 | 166,882 | ||||||||||
DRIVEN BRANDS HOLDINGS INC. AND SUBSIDIARIES | ||||||||
CONSOLIDATED BALANCE SHEETS (UNAUDITED) | ||||||||
(in thousands, except share and per share amounts) | June 29, 2024 | December 30, 2023 | ||||||
Assets | ||||||||
Current assets: | ||||||||
Cash and cash equivalents | $ | 148,814 | $ | 176,522 | ||||
Restricted cash | 4,414 | 657 | ||||||
Accounts and notes receivable, net | 195,327 | 151,259 | ||||||
Inventory | 70,527 | 83,171 | ||||||
Prepaid and other assets | 44,426 | 46,714 | ||||||
Income tax receivable | 13,893 | 15,928 | ||||||
Assets held for sale | 237,183 | 301,229 | ||||||
Advertising fund assets, restricted | 43,039 | 45,627 | ||||||
Total current assets | 757,623 | 821,107 | ||||||
Other assets | 103,746 | 56,565 | ||||||
Property and equipment, net | 1,422,961 | 1,438,496 | ||||||
Operating lease right-of-use assets | 1,378,264 | 1,389,316 | ||||||
Deferred commissions | 6,740 | 6,312 | ||||||
Intangibles, net | 721,691 | 739,402 | ||||||
Goodwill | 1,431,555 | 1,455,946 | ||||||
Deferred tax assets | 3,627 | 3,660 | ||||||
Total assets | $ | 5,826,207 | $ | 5,910,804 | ||||
Liabilities and shareholders' equity | ||||||||
Current liabilities: | ||||||||
Accounts payable | $ | 72,118 | $ | 67,526 | ||||
Accrued expenses and other liabilities | 236,586 | 242,171 | ||||||
Income tax payable | 2,053 | 5,404 | ||||||
Current portion of long-term debt | 33,332 | 32,673 | ||||||
Income tax receivable liability | — | 56,001 | ||||||
Advertising fund liabilities | 15,115 | 23,392 | ||||||
Total current liabilities | 359,204 | 427,167 | ||||||
Long-term debt | 2,855,823 | 2,910,812 | ||||||
Deferred tax liabilities | 157,271 | 154,742 | ||||||
Operating lease liabilities | 1,317,342 | 1,332,519 | ||||||
Income tax receivable liability | 133,623 | 117,915 | ||||||
Deferred revenue | 31,472 | 30,507 | ||||||
Long-term accrued expenses and other liabilities | 28,682 | 30,419 | ||||||
Total liabilities | 4,883,417 | 5,004,081 | ||||||
Preferred Stock $0.01 par value; 100,000,000 shares authorized; none issued or outstanding | — | — | ||||||
Common stock, $0.01 par value, 900,000,000 shares authorized: and 164,082,430 and 163,965,231 shares outstanding; respectively | 1,641 | 1,640 | ||||||
Additional paid-in capital | 1,674,766 | 1,652,401 | ||||||
Accumulated deficit | (675,667 | ) | (710,087 | ) | ||||
Accumulated other comprehensive loss | (57,950 | ) | (37,875 | ) | ||||
Total shareholders’ equity attributable to Driven Brands Holdings Inc. | 942,790 | 906,079 | ||||||
Non-controlling interests | — | 644 | ||||||
Total shareholders' equity | 942,790 | 906,723 | ||||||
Total liabilities and shareholders' equity | $ | 5,826,207 | $ | 5,910,804 | ||||
DRIVEN BRANDS HOLDINGS INC. AND SUBSIDIARIES | ||||||||
CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) | ||||||||
Six Months Ended | ||||||||
(in thousands) | June 29, 2024 | July 1, 2023 | ||||||
Net income | $ | 34,420 | $ | 67,498 | ||||
Adjustments to reconcile net income to net cash provided by operating activities: | ||||||||
Depreciation and amortization | 87,862 | 83,617 | ||||||
Equity-based compensation expense | 22,843 | 7,049 | ||||||
Loss (gain) on foreign denominated transactions | 9,923 | (1,723 | ) | |||||
Gain on foreign currency derivatives | (4,921 | ) | (1,254 | ) | ||||
Gain on sale and disposal of businesses, fixed assets, and sale-leaseback transactions | (16,359 | ) | (12,230 | ) | ||||
Reclassification of interest rate hedge to income | (1,044 | ) | (1,039 | ) | ||||
Bad debt expense | 1,738 | 602 | ||||||
Asset impairment charges and lease terminations | 31,823 | 6,211 | ||||||
Amortization of deferred financing costs and bond discounts | 4,933 | 4,343 | ||||||
Amortization of cloud computing | 2,414 | — | ||||||
Provision for deferred income taxes | 5,036 | 18,812 | ||||||
Other, net | 7,322 | 9,641 | ||||||
Changes in assets and liabilities, net of acquisitions: | ||||||||
Accounts and notes receivable, net | (47,245 | ) | (30,373 | ) | ||||
Inventory | 11,310 | (11,108 | ) | |||||
Prepaid and other assets | 7,986 | (7,894 | ) | |||||
Advertising fund assets and liabilities, restricted | (12,220 | ) | (8,768 | ) | ||||
Other assets | (47,699 | ) | (25,456 | ) | ||||
Deferred commissions | (428 | ) | 330 | |||||
Deferred revenue | 971 | 1,585 | ||||||
Accounts payable | 3,968 | 16,231 | ||||||
Accrued expenses and other liabilities | 8,022 | (1,171 | ) | |||||
Income tax receivable | (3,431 | ) | (320 | ) | ||||
Cash provided by operating activities | 107,224 | 114,583 | ||||||
Cash flows from investing activities: | ||||||||
Capital expenditures | (155,920 | ) | (320,071 | ) | ||||
Cash used in business acquisitions, net of cash acquired | (2,759 | ) | (44,868 | ) | ||||
Proceeds from sale-leaseback transactions | 11,808 | 143,622 | ||||||
Proceeds from sale or disposal of businesses and fixed assets | 112,845 | 217 | ||||||
Cash used in investing activities | (34,026 | ) | (221,100 | ) | ||||
Cash flows from financing activities: | ||||||||
Payment of debt extinguishment and issuance costs | (871 | ) | — | |||||
Repayment of long-term debt | (34,005 | ) | (13,961 | ) | ||||
Proceeds from revolving lines of credit and short-term debt | 46,000 | 230,000 | ||||||
Repayments of revolving lines of credit and short-term debt | (71,000 | ) | (120,000 | ) | ||||
Repayment of principal portion of finance lease liability | (2,199 | ) | (1,889 | ) | ||||
Payment of Tax Receivable Agreement | (38,362 | ) | — | |||||
Acquisition of non-controlling interest | (644 | ) | — | |||||
Purchase of common stock | (2 | ) | (716 | ) | ||||
Tax obligations for share-based compensation | (980 | ) | — | |||||
Stock option exercises | — | 1,758 | ||||||
Other, net | — | (64 | ) | |||||
Cash (used in) provided by financing activities | (102,063 | ) | 95,128 | |||||
Effect of exchange rate changes on cash | (1,615 | ) | 2,087 | |||||
Net change in cash, cash equivalents, restricted cash, and cash included in advertising fund assets, restricted | (30,480 | ) | (9,302 | ) | ||||
Cash and cash equivalents, beginning of period | 176,522 | 227,110 | ||||||
Cash included in advertising fund assets, restricted, beginning of period | 38,537 | 32,871 | ||||||
Restricted cash, beginning of period | 657 | 792 | ||||||
Cash, cash equivalents, restricted cash, and cash included in advertising fund assets, restricted, beginning of period | 215,716 | 260,773 | ||||||
Cash and cash equivalents, end of period | 148,814 | 212,123 | ||||||
Cash included in advertising fund assets, restricted, end of period | 32,008 | 38,691 | ||||||
Restricted cash, end of period | 4,414 | 657 | ||||||
Cash, cash equivalents, restricted cash, and cash included in advertising fund assets, restricted, end of period | $ | 185,236 | $ | 251,471 | ||||
RECONCILIATION OF NON-GAAP FINANCIAL MEASURES
The following information provides definitions and reconciliations of the non-GAAP financial measures presented in this earnings release to the most directly comparable financial measures calculated and presented in accordance with generally accepted accounting principles (GAAP). The Company has provided this non-GAAP financial information, which is not calculated or presented in accordance with GAAP, as information supplemental and in addition to the financial measures presented in this earnings release that are calculated and presented in accordance with GAAP. Such non-GAAP financial measures should not be considered superior to, as a substitute for or alternative to, and should be considered in conjunction with, the GAAP financial measures presented in this earnings release. The non-GAAP financial measures in this earnings release may differ from similarly titled measures used by other companies.
Non-GAAP Financial Measures in Outlook
Driven Brands includes Adjusted Earnings Before Interest, Tax, Depreciation and Amortization (“Adjusted EBITDA”) and Adjusted Earnings per Share (“Adjusted EPS”) in the Company’s Fiscal Year 2024 Outlook. Adjusted EBITDA and Adjusted EPS are non-GAAP financial measures and have not been reconciled to the most comparable GAAP financial measures because it is not possible to do so without unreasonable efforts due to the uncertainty and potential variability of reconciling items, which are dependent on future events and often outside of management’s control and which could be significant. Because such items cannot be reasonably predicted with the level of precision required, we are unable to provide an outlook for the comparable GAAP measures. Forward-looking estimates of Adjusted EBITDA and Adjusted EPS are made in a manner consistent with the relevant definitions and assumptions noted herein and in our filings with the SEC.
Adjusted Net Income and Adjusted Earnings Per Share
Adjusted Net Income and Adjusted EPS are considered non-GAAP financial measures under the SEC’s rules because they exclude certain amounts included in the net income attributable to Driven Brands common stockholders and diluted earnings per share attributable to Driven Brands common stockholders calculated in accordance with GAAP. Management believes that Adjusted Net Income and Adjusted EPS are meaningful measures to share with investors because they facilitate comparison of the current period performance with that of the comparable prior period. In addition, Adjusted Net Income and Adjusted EPS afford investors a view of what management considers to be Driven Brands’ core earnings performance as well as the ability to make a more informed assessment of such earnings performance with that of the prior period.
The tables below reflect the calculation of Adjusted Net Income and Adjusted Earnings Per Share for the three and six months ended June 29, 2024, compared to the three and six months ended July 1, 2023.
Net Income to Adjusted Net Income and Adjusted Earnings Per Share (Unaudited) | ||||||||||||||||
Three Months Ended | Six Months Ended | |||||||||||||||
(in thousands, except per share data) | June 29, 2024 | July 1, 2023 | June 29, 2024 | July 1, 2023 | ||||||||||||
Net income | $ | 30,159 | $ | 37,749 | $ | 34,420 | $ | 67,498 | ||||||||
Acquisition related costs(a) | 271 | 3,750 | 2,065 | 5,597 | ||||||||||||
Non-core items and project costs, net(b) | 5,126 | 2,803 | 9,837 | 4,627 | ||||||||||||
Cloud computing amortization(c) | 1,069 | — | 2,414 | — | ||||||||||||
Equity-based compensation expense(d) | 10,982 | 4,485 | 22,843 | 7,049 | ||||||||||||
Foreign currency transaction loss (gain), net(e) | 681 | (1,302 | ) | 5,002 | (2,977 | ) | ||||||||||
Asset sale leaseback (gain) loss, impairment and closed store expenses(f) | 9,630 | (7,680 | ) | 19,190 | (5,836 | ) | ||||||||||
Amortization related to acquired intangible assets(g) | 6,528 | 8,276 | 13,548 | 14,312 | ||||||||||||
Valuation allowance for deferred tax asset(h) | 121 | — | 1,255 | — | ||||||||||||
Adjusted net income before tax impact of adjustments | 64,567 | 48,081 | 110,574 | 90,270 | ||||||||||||
Tax impact of adjustments(i) | (6,558 | ) | (2,378 | ) | (14,443 | ) | (5,463 | ) | ||||||||
Adjusted net income | 58,009 | 45,703 | 96,131 | 84,807 | ||||||||||||
Earnings per share | ||||||||||||||||
Basic | $ | 0.18 | $ | 0.23 | $ | 0.21 | $ | 0.41 | ||||||||
Diluted | $ | 0.18 | $ | 0.22 | $ | 0.21 | $ | 0.40 | ||||||||
Adjusted earnings per share(1) | ||||||||||||||||
Basic | $ | 0.36 | $ | 0.27 | $ | 0.59 | $ | 0.51 | ||||||||
Diluted | $ | 0.35 | $ | 0.27 | $ | 0.59 | $ | 0.50 | ||||||||
Weighted average shares outstanding | ||||||||||||||||
Basic | 159,795 | 162,911 | 159,713 | 162,848 | ||||||||||||
Diluted | 160,765 | 166,888 | 160,683 | 166,882 | ||||||||||||
(1) | Adjusted Earnings Per Share is calculated under the two-class method. Under the two-class method, adjusted earnings per share is calculated using adjusted net income attributable to common shares, which is derived by reducing adjusted net income by the amount attributable to participating securities. Adjusted Net Income attributable to participating securities used in the basic earnings per share calculation was $1 million and $2 million for the three and six months ended June 29, 2024, respectively. Adjusted Net Income attributable to participating securities used in the diluted earnings per share calculations was $1 million and $2 million for the three and six months ended July 1, 2023. |
Adjusted EBITDA
Adjusted EBITDA is considered a non-GAAP financial measure under the Securities and Exchange Commission’s (“SEC”) rules because it excludes certain amounts included in net income calculated in accordance with GAAP. Management believes that Adjusted EBITDA is a meaningful measure to share with investors because it facilitates comparison of the current period performance with that of the comparable prior period. In addition, Adjusted EBITDA affords investors a view of what management considers to be Driven Brand’s core operating performance as well as the ability to make a more informed assessment of such operating performance as compared with that of the prior period.
Please see the company’s Annual Report on Form 10-K for the fiscal year ended December 30, 2023, filed with the SEC on February 28, 2024, for additional information on Adjusted EBITDA. The tables below reflect the calculation of Adjusted EBITDA for the three and six months ended June 29, 2024, compared to the three and six months ended July 1, 2023.
Net Income to Adjusted EBITDA Reconciliation (Unaudited)
Three Months Ended | Six Months Ended | |||||||||||||
(in thousands) | June 29, 2024 | July 1, 2023 | June 29, 2024 | July 1, 2023 | ||||||||||
Net income | $ | 30,159 | $ | 37,749 | $ | 34,420 | $ | 67,498 | ||||||
Income tax expense | 17,871 | 20,275 | 24,035 | 31,246 | ||||||||||
Interest expense, net | 31,796 | 40,871 | 75,568 | 79,012 | ||||||||||
Depreciation and amortization | 44,633 | 45,419 | 87,862 | 83,617 | ||||||||||
EBITDA | 124,459 | 144,314 | 221,885 | 261,373 | ||||||||||
Acquisition related costs(a) | 271 | 3,750 | 2,065 | 5,597 | ||||||||||
Non-core items and project costs, net(b) | 5,126 | 2,803 | 9,837 | 4,627 | ||||||||||
Cloud computing amortization(c) | 1,069 | — | 2,414 | — | ||||||||||
Equity-based compensation expense(d) | 10,982 | 4,485 | 22,843 | 7,049 | ||||||||||
Foreign currency transaction loss (gain), net(e) | 681 | (1,302 | ) | 5,002 | (2,977 | ) | ||||||||
Asset sale leaseback (gain) loss, impairment and closed store expenses(f) | 9,630 | (7,680 | ) | 19,190 | (5,836 | ) | ||||||||
Adjusted EBITDA | $ | 152,218 | $ | 146,370 | $ | 283,236 | $ | 269,833 | ||||||
Adjusted EBITDA, Adjusted Net Income and Adjusted Earnings Per Share Footnotes | ||
(a) | Consists of acquisition costs as reflected within the unaudited consolidated statements of operations, including legal, consulting and other fees, and expenses incurred in connection with acquisitions completed during the applicable period, as well as inventory rationalization expenses incurred in connection with acquisitions. We expect to incur similar costs in connection with other acquisitions in the future and, under U.S. GAAP, such costs relating to acquisitions are expensed as incurred and not capitalized. | |
(b) | Consists of discrete items and project costs, including third party consulting and professional fees associated with strategic transformation initiatives as well as non-recurring payroll-related costs. | |
(c) | Includes non-cash amortization expenses relating to cloud computing arrangements. | |
(d) | Represents non-cash equity-based compensation expense. | |
(e) | Represents foreign currency transaction (gains) losses, net that primarily related to the remeasurement of our intercompany loans as well as gains and losses on cross currency swaps and forward contracts. | |
(f) | Relates to (gains) losses, net on sale leasebacks, impairment of certain fixed assets and operating lease right-of-use assets related to closed and underperforming locations, assets held for sale, and lease exit costs and other costs associated with stores that were closed prior to the respective lease termination dates. | |
(g) | Consists of amortization related to acquired intangible assets as reflected within depreciation and amortization in the unaudited consolidated statement of operations. | |
(h) | Represents valuation allowances on income tax carryforwards in certain domestic jurisdictions that are not more likely than not to be realized. | |
(i) | Represents the tax impact of adjustments associated with the reconciling items between net income and Adjusted Net Income, excluding the provision for uncertain tax positions. To determine the tax impact of the deductible reconciling items, we utilized statutory income tax rates ranging from 9% to 36% depending upon the tax attributes of each adjustment and the applicable jurisdiction. | |
DRIVEN BRANDS HOLDINGS INC. AND SUBSIDIARIES | ||||||||||||||||
ADJUSTED EBITDA AND SEGMENT ADJUSTED EBITDA RECONCILIATION (UNAUDITED) | ||||||||||||||||
Three Months Ended | Six Months Ended | |||||||||||||||
(in thousands) | June 29, 2024 | July 1, 2023 | June 29, 2024 | July 1, 2023 | ||||||||||||
Segment Adjusted EBITDA: | ||||||||||||||||
Maintenance | $ | 102,935 | $ | 84,812 | $ | 194,371 | $ | 157,045 | ||||||||
Car Wash | 33,772 | 39,761 | 62,906 | 80,809 | ||||||||||||
Paint, Collision & Glass | 35,172 | 41,057 | 65,992 | 76,507 | ||||||||||||
Platform Services | 25,311 | 22,519 | 45,182 | 39,527 | ||||||||||||
Corporate and other | (44,032 | ) | (40,402 | ) | (83,012 | ) | (81,653 | ) | ||||||||
Store opening costs | (940 | ) | (1,377 | ) | (2,203 | ) | (2,402 | ) | ||||||||
Adjusted EBITDA | $ | 152,218 | $ | 146,370 | $ | 283,236 | $ | 269,833 | ||||||||
DRIVEN BRANDS HOLDINGS INC. AND SUBSIDIARIES | |||||||||||||||
ADDITIONAL INFORMATION ON KEY PERFORMANCE INDICATORS (UNAUDITED) | |||||||||||||||
Three Months Ended June 29, 2024 | |||||||||||||||
(in thousands) | Maintenance | Car Wash | Paint,
| Platform
| Total | ||||||||||
System-wide Sales | |||||||||||||||
Franchise stores | $ | 304,563 | $ | — | $ | 794,633 | $ | 114,649 | $ | 1,213,845 | |||||
Company-operated stores | 230,809 | 95,211 | 67,523 | 1,138 | 394,681 | ||||||||||
Independently operated stores | — | 60,280 | — | — | 60,280 | ||||||||||
Total System-wide Sales | $ | 535,372 | $ | 155,491 | $ | 862,156 | $ | 115,787 | $ | 1,668,806 | |||||
Store Count (in whole numbers) | |||||||||||||||
Franchise stores | 1,177 | — | 1,654 | 204 | 3,035 | ||||||||||
Company-operated stores | 676 | 388 | 233 | 1 | 1,298 | ||||||||||
Independently operated stores | — | 720 | — | — | 720 | ||||||||||
Total Store Count | 1,853 | 1,108 | 1,887 | 205 | 5,053 | ||||||||||
Three Months Ended July 1, 2023 | |||||||||||||||
(in thousands) | Maintenance | Car Wash | Paint,
| Platform
| Total | ||||||||||
System-wide Sales | |||||||||||||||
Franchise stores | $ | 278,951 | $ | — | $ | 806,420 | $ | 117,548 | $ | 1,202,919 | |||||
Company-operated stores | 205,673 | 101,615 | 86,110 | 1,180 | 394,578 | ||||||||||
Independently operated stores | — | 61,533 | — | — | 61,533 | ||||||||||
Total System-wide Sales | $ | 484,624 | $ | 163,148 | $ | 892,530 | $ | 118,728 | $ | 1,659,030 | |||||
Store Count (in whole numbers) | |||||||||||||||
Franchise stores | 1,084 | — | 1,657 | 207 | 2,948 | ||||||||||
Company-operated stores | 610 | 415 | 248 | 1 | 1,274 | ||||||||||
Independently operated stores | — | 716 | — | — | 716 | ||||||||||
Total Store Count | 1,694 | 1,131 | 1,905 | 208 | 4,938 | ||||||||||
Six Months Ended June 29, 2024 | |||||||||||||||
(in thousands) | Maintenance | Car Wash | Paint,
| Platform
| Total | ||||||||||
System-wide Sales | |||||||||||||||
Franchise stores | $ | 583,424 | $ | — | $ | 1,614,248 | $ | 191,801 | $ | 2,389,473 | |||||
Company-operated stores | 451,680 | 185,438 | 130,032 | 1,987 | 769,137 | ||||||||||
Independently operated stores | — | 113,327 | — | — | 113,327 | ||||||||||
Total System-wide Sales | $ | 1,035,104 | $ | 298,765 | $ | 1,744,280 | $ | 193,788 | $ | 3,271,937 | |||||
Store Count (in whole numbers) | |||||||||||||||
Franchise stores | 1,177 | — | 1,654 | 204 | 3,035 | ||||||||||
Company-operated stores | 676 | 388 | 233 | 1 | 1,298 | ||||||||||
Independently operated stores | — | 720 | — | — | 720 | ||||||||||
Total Store Count | 1,853 | 1,108 | 1,887 | 205 | 5,053 | ||||||||||
Six Months Ended July 1, 2023 | |||||||||||||||
(in thousands) | Maintenance | Car Wash | Paint,
| Platform
| Total | ||||||||||
System-wide Sales | |||||||||||||||
Franchise stores | $ | 525,634 | $ | — | $ | 1,544,983 | $ | 206,651 | $ | 2,277,268 | |||||
Company-operated stores | 400,933 | 204,061 | 163,589 | $ | 2,061 | 770,644 | |||||||||
Independently operated stores | — | 114,065 | — | — | 114,065 | ||||||||||
Total System-wide Sales | $ | 926,567 | $ | 318,126 | $ | 1,708,572 | $ | 208,712 | $ | 3,161,977 | |||||
Store Count (in whole numbers) | |||||||||||||||
Franchise stores | 1,084 | — | 1,657 | 207 | 2,948 | ||||||||||
Company-operated stores | 610 | 415 | 248 | 1 | 1,274 | ||||||||||
Independently operated stores | — | 716 | — | — | 716 | ||||||||||
Total Store Count | 1,694 | 1,131 | 1,905 | 208 | 4,938 | ||||||||||
View source version on businesswire.com: https://www.businesswire.com/news/home/20240801081200/en/
