10/31/2024 | Press release | Distributed by Public on 10/31/2024 05:41
System-wide Sales (in millions)
|
Store Count
|
Same-Store Sales2
|
Revenue
(in millions)
|
Segment Adjusted EBITDA
(in millions)
|
|||||
Maintenance
|
$ | 535.9 | 1,899 | 3.0 | % | $ | 278.2 | $ | 96.7 |
Car Wash
|
140.4 | 1,107 | 1.8 | % | 142.2 | 25.6 | |||
Paint, Collision & Glass
|
857.2 | 1,897 | 1.3 | % | 109.0 | 34.7 | |||
Platform Services
|
108.2 | 206 | N/A | 52.2 | 22.5 | ||||
Corporate / Other
|
N/A
|
N/A
|
N/A
|
10.1 | |||||
Total
|
$ | 1,641.8 | 5,109 | 1.1 | % | $ | 591.7 |
Original Outlook | Outlook Adjusted for Disposition | Current Range Expectations | |
Revenue
|
~$2.35 - $2.45 billion |
~$2.33 - $2.43 billion
|
Low-end |
Adjusted EBITDA1
|
~$535 - $565 million |
~$529 - $559 million
|
Mid - to High-end |
Adjusted EPS1
|
~$0.88 - $1.00 | ~$0.88 - $1.00 | High-end |
Three Months Ended | Nine Months Ended | |||||||
(in thousands, except per share amounts) | September 28, 2024 | September 30, 2023 | September 28, 2024 | September 30, 2023 | ||||
Net Revenue: | ||||||||
Franchise royalties and fees | $ | 49,475 | $ | 47,362 | $ | 144,549 | $ | 140,682 |
Company-operated store sales | 388,132 | 389,041 | 1,157,269 | 1,159,685 | ||||
Independently-operated store sales | 49,959 | 43,582 | 163,286 | 157,647 | ||||
Advertising contributions | 26,823 | 27,121 | 75,804 | 73,547 | ||||
Supply and other revenue | 77,290 | 73,928 | 234,563 | 218,791 | ||||
Total net revenue | 591,679 | 581,034 | 1,775,471 | 1,750,352 | ||||
Operating Expenses: | ||||||||
Company-operated store expenses | 242,073 | 262,282 | 738,300 | 762,731 | ||||
Independently-operated store expenses | 29,382 | 25,773 | 90,693 | 87,095 | ||||
Advertising expenses | 26,823 | 27,121 | 75,804 | 73,547 | ||||
Supply and other expenses | 35,790 | 38,816 | 112,560 | 118,188 | ||||
Selling, general, and administrative expenses | 149,766 | 123,012 | 387,291 | 332,155 | ||||
Acquisition related costs | (606) | 1,667 | 1,459 | 7,264 | ||||
Store opening costs | 1,476 | 1,372 | 3,679 | 3,774 | ||||
Depreciation and amortization | 43,357 | 45,639 | 131,219 | 129,256 | ||||
Goodwill impairment | - | 850,970 | - | 850,970 | ||||
Asset impairment charges and lease terminations | 24,111 | 111,239 | 55,934 | 117,450 | ||||
Total operating expenses | 552,172 | 1,487,891 | 1,596,939 | 2,482,430 | ||||
Operating income (loss) | 39,507 | (906,857) | 178,532 | (732,078) | ||||
Other expenses, net: | ||||||||
Interest expense, net | 43,677 | 41,292 | 119,245 | 120,304 | ||||
Foreign currency transaction loss, net | 765 | 2,980 | 5,767 | 3 | ||||
Loss on debt extinguishment | 205 | - | 205 | - | ||||
Other expense, net | 44,647 | 44,272 | 125,217 | 120,307 | ||||
Income (loss) before taxes | (5,140) | (951,129) | 53,315 | (852,385) | ||||
Income tax expense (benefit) | 9,807 | (151,818) | 33,842 | (120,572) | ||||
Net (loss) income | (14,947) | (799,311) | 19,473 | (731,813) | ||||
(Loss) Earnings per share: | ||||||||
Basic | $ | (0.09) | $ | (4.82) | $ | 0.12 | $ | (4.40) |
Diluted | $ | (0.09) | $ | (4.83) | $ | 0.12 | $ | (4.41) |
Weighted average shares outstanding | ||||||||
Basic | 159,804 | 162,398 | 159,743 | 162,698 | ||||
Diluted | 159,804 | 162,398 | 160,713 | 162,698 |
(in thousands, except share and per share amounts)
|
September 28, 2024 | December 30, 2023 | ||
Assets | ||||
Current assets: | ||||
Cash and cash equivalents | $ | 204,181 | $ | 176,522 |
Restricted cash | 4,414 | 657 | ||
Accounts and notes receivable, net | 171,887 | 151,259 | ||
Inventory | 69,857 | 83,171 | ||
Prepaid and other assets | 37,483 | 46,714 | ||
Income tax receivable | 18,429 | 15,928 | ||
Assets held for sale | 185,985 | 301,229 | ||
Advertising fund assets, restricted | 54,939 | 45,627 | ||
Total current assets | 747,175 | 821,107 | ||
Other assets | 116,046 | 56,565 | ||
Property and equipment, net | 1,418,352 | 1,438,496 | ||
Operating lease right-of-use assets | 1,362,917 | 1,389,316 | ||
Deferred commissions | 6,955 | 6,312 | ||
Intangibles, net | 677,277 | 739,402 | ||
Goodwill | 1,427,467 | 1,455,946 | ||
Deferred tax assets | 3,627 | 3,660 | ||
Total assets | $ | 5,759,816 | $ | 5,910,804 |
Liabilities and shareholders' equity | ||||
Current liabilities: | ||||
Accounts payable | $ | 78,759 | $ | 67,526 |
Accrued expenses and other liabilities | 254,341 | 242,171 | ||
Income tax payable | 1,016 | 5,404 | ||
Current portion of long-term debt | 32,872 | 32,673 | ||
Income tax receivable liability | - | 56,001 | ||
Advertising fund liabilities | 26,668 | 23,392 | ||
Total current liabilities | 393,656 | 427,167 | ||
Long-term debt | 2,732,572 | 2,910,812 | ||
Deferred tax liabilities | 164,713 | 154,742 | ||
Operating lease liabilities | 1,311,895 | 1,332,519 | ||
Income tax receivable liability | 133,611 | 117,915 | ||
Deferred revenue | 31,750 | 30,507 | ||
Long-term accrued expenses and other liabilities | 28,812 | 30,419 | ||
Total liabilities | 4,797,009 | 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 164,113,794 and 163,965,231 shares outstanding; respectively
|
1,641 | 1,640 | ||
Additional paid-in capital | 1,687,948 | 1,652,401 | ||
Accumulated deficit | (690,614) | (710,087) | ||
Accumulated other comprehensive loss | (36,168) | (37,875) | ||
Total shareholders' equity attributable to Driven Brands Holdings Inc. | 962,807 | 906,079 | ||
Non-controlling interests | - | 644 | ||
Total shareholders' equity | 962,807 | 906,723 | ||
Total liabilities and shareholders' equity | $ | 5,759,816 | $ | 5,910,804 |
Nine Months Ended | ||||
(in thousands) | September 28, 2024 | September 30, 2023 | ||
Net income (loss) | $ | 19,473 | $ | (731,813) |
Adjustments to reconcile net income (loss) to net cash provided by operating activities: | ||||
Depreciation and amortization | 131,219 | 129,256 | ||
Goodwill impairment | - | 850,970 | ||
Equity-based compensation expense | 35,641 | 9,730 | ||
Loss on foreign denominated transactions | 8,744 | 3,706 | ||
Gain on foreign currency derivatives | (2,977) | (3,704) | ||
Gain on sale and disposal of businesses, fixed assets, and sale-leaseback transactions | (4,102) | 1,730 | ||
Reclassification of interest rate hedge to income | (1,560) | (1,358) | ||
Bad debt expense | 5,759 | 1,244 | ||
Asset impairment charges and lease terminations
|
55,934 | 117,450 | ||
Amortization of deferred financing costs and bond discounts | 5,877 | 6,287 | ||
Amortization of cloud computing | 3,436 | 991 | ||
Provision for deferred income taxes | 13,571 | (134,266) | ||
Loss on extinguishment of debt | 205 | - | ||
Other, net | (19,489) | 23,441 | ||
Changes in assets and liabilities, net of acquisitions: | ||||
Accounts and notes receivable, net | (37,752) | 2,464 | ||
Inventory | 1,337 | (12,531) | ||
Prepaid and other assets | 7,648 | (3,909) | ||
Advertising fund assets and liabilities, restricted | (4,209) | (10,923) | ||
Other assets | (63,015) | (29,210) | ||
Deferred commissions | 642 | 658 | ||
Deferred revenue | 1,248 | 1,961 | ||
Accounts payable | 11,504 | 24,913 | ||
Accrued expenses and other liabilities | 13,754 | (29,442) | ||
Income tax receivable | (8,234) | (5,612) | ||
Cash provided by operating activities | 174,654 | 212,033 | ||
Cash flows from investing activities: | ||||
Capital expenditures | (185,453) | (482,633) | ||
Cash used in business acquisitions, net of cash acquired | (2,759) | (53,641) | ||
Proceeds from sale leaseback transactions | 17,944 | 172,230 | ||
Proceeds from sale or disposal of businesses and fixed assets | 255,548 | 2,837 | ||
Cash provided by (used in) investing activities | 85,280 | (361,207) | ||
Cash flows from financing activities: | ||||
Payment of debt extinguishment and issuance costs | (9,646) | - | ||
Proceeds from the issuance of long-term debt | 274,794 | - | ||
Repayment of long-term debt | (422,492) | (20,969) | ||
Proceeds from revolving lines of credit and short-term debt | 46,000 | 335,000 | ||
Repayments of revolving lines of credit and short-term debt | (71,000) | (120,000) | ||
Repayment of principal portion of finance lease liability | (4,301) | (2,020) | ||
Payment of Tax Receivable Agreement | (38,374) | - | ||
Acquisition of non-controlling interest | (644) | - |
Share repurchases | - | (49,956) | ||
Tax obligations for share-based compensation | (998) | - | ||
Stock option exercises | - | 6,117 | ||
Other, net | - | (322) | ||
Cash (used in) provided by financing activities | (226,661) | 147,850 | ||
Effect of exchange rate changes on cash | 71 | 365 | ||
Net change in cash, cash equivalents, restricted cash, and cash included in advertising fund assets, restricted | 33,344 | (959) | ||
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 | 204,181 | 211,280 | ||
Cash included in advertising fund assets, restricted, end of period | 40,465 | 47,877 | ||
Restricted cash, end of period | 4,414 | 657 | ||
Cash, cash equivalents, restricted cash, and cash included in advertising fund assets, restricted, end of period | $ | 249,060 | $ | 259,814 |
Three Months Ended | Nine Months Ended | |||||||
(in thousands, except per share data) | September 28, 2024 | September 30, 2023 | September 28, 2024 | September 30, 2023 | ||||
Net (loss) income | $ | (14,947) | $ | (799,311) | $ | 19,473 | $ | (731,813) |
Acquisition related costs(a)
|
(606) | 1,667 | 1,459 | 7,264 | ||||
Non-core items and project costs, net(b)
|
6,426 | 1,486 | 16,263 | 6,113 | ||||
Cloud computing amortization(c)
|
1,022 | 991 | 3,436 | 991 | ||||
Share-based compensation expense(d)
|
12,798 | 2,681 | 35,641 | 9,730 | ||||
Foreign currency transaction loss , net(e)
|
765 | 2,980 | 5,767 | 3 | ||||
Goodwill impairment(f)
|
- | 850,970 | - | 850,970 | ||||
Asset sale leaseback (gain) loss, net, impairment and closed store expenses(g)
|
36,275 | 125,473 | 55,465 | 119,637 | ||||
Loss on debt extinguishment (h)
|
205 | - | 205 | - | ||||
Amortization related to acquired intangible assets(i)
|
5,980 | 9,252 | 19,528 | 23,564 | ||||
Valuation allowance for deferred tax asset(j)
|
7,941 | - | 9,196 | - | ||||
Adjusted net income before tax impact of adjustments | 55,859 | 196,189 | 166,433 | 286,459 | ||||
Tax impact of adjustments(k)
|
(14,100) | (166,320) | (28,543) | (171,783) | ||||
Adjusted net income | 41,759 | 29,869 | 137,890 | 114,676 | ||||
(Loss) earnings per share | ||||||||
Basic | $ | (0.09) | $ | (4.82) | $ | 0.12 | $ | (4.40) |
Diluted | $ | (0.09) | $ | (4.83) | $ | 0.12 | $ | (4.41) |
Adjusted earnings per share(1)
|
||||||||
Basic | $ | 0.27 | $ | 0.18 | $ | 0.84 | $ | 0.69 |
Diluted | $ | 0.26 | $ | 0.18 | $ | 0.84 | $ | 0.68 |
Weighted average shares outstanding | ||||||||
Basic | 159,804 | 162,398 | 159,743 | 162,698 | ||||
Diluted | 159,804 | 162,398 | 160,713 | 162,698 | ||||
Weighted average shares outstanding for Adjusted Net Income | ||||||||
Basic | 159,804 | 162,398 | 159,743 | 162,698 | ||||
Diluted | 161,113 | 165,850 | 160,713 | 166,557 | ||||
Three Months Ended | Nine Months Ended | |||||||
(in thousands) | September 28, 2024 | September 30, 2023 | September 28, 2024 | September 30, 2023 | ||||
Net (loss) income | $ | (14,947) | $ | (799,311) | $ | 19,473 | $ | (731,813) |
Income tax expense (benefit) | 9,807 | (151,818) | 33,842 | (120,572) | ||||
Interest expense, net | 43,677 | 41,292 | 119,245 | 120,304 | ||||
Depreciation and amortization | 43,357 | 45,639 | 131,219 | 129,256 | ||||
EBITDA | 81,894 | (864,198) | 303,779 | (602,825) | ||||
Acquisition related costs(a)
|
(606) | 1,667 | 1,459 | 7,264 | ||||
Non-core items and project costs, net(b)
|
6,426 | 1,486 | 16,263 | 6,113 | ||||
Cloud computing amortization(c)
|
1,022 | 991 | 3,436 | 991 | ||||
Share-based compensation expense(d)
|
12,798 | 2,681 | 35,641 | 9,730 | ||||
Foreign currency transaction loss, net(e)
|
765 | 2,980 | 5,767 | 3 | ||||
Goodwill impairment(f)
|
- | 850,970 | - | 850,970 | ||||
Asset sale leaseback (gain) loss, net, impairment and closed store expenses(g)
|
36,275 | 125,473 | 55,465 | 119,637 | ||||
Loss on debt extinguishment (h)
|
$ | 205 | - | 205 | - | |||
Adjusted EBITDA | $ | 138,779 | $ | 122,050 | $ | 422,015 | $ | 391,883 |
Three Months Ended | Nine Months Ended | |||||||
(in thousands) | September 28, 2024 | September 30, 2023 | September 28, 2024 | September 30, 2023 | ||||
Segment Adjusted EBITDA: | ||||||||
Maintenance | $ | 96,666 | $ | 85,483 | $ | 291,037 | $ | 242,528 |
Car Wash | 25,563 | 20,494 | 88,469 | 101,303 | ||||
Paint, Collision & Glass | 34,703 | 32,545 | 100,695 | 109,052 | ||||
Platform Services | 22,467 | 22,396 | 67,649 | 61,923 | ||||
Corporate and other | (39,144) | (37,497) | (122,156) | (119,149) | ||||
Store opening costs | (1,476) | (1,372) | (3,679) | (3,774) | ||||
Adjusted EBITDA | $ | 138,779 | $ | 122,049 | $ | 422,015 | $ | 391,883 |
Three Months Ended September 28, 2024 | ||||||||||
(in thousands) | Maintenance | Car Wash |
Paint, Collision & Glass |
Platform Services |
Total | |||||
System-wide Sales | ||||||||||
Franchise stores | $ | 304,892 | $ | - | $ | 791,830 | $ | 106,943 | $ | 1,203,665 |
Company-operated stores | 231,050 | 90,451 | 65,380 | 1,251 | 388,132 | |||||
Independently operated stores | - | 49,959 | - | - | 49,959 | |||||
Total System-wide Sales | $ | 535,942 | $ | 140,410 | $ | 857,210 | $ | 108,194 | $ | 1,641,756 |
Store Count (in whole numbers) | ||||||||||
Franchise stores | 1,204 | - | 1,669 | 205 | 3,078 | |||||
Company-operated stores | 695 | 388 | 228 | 1 | 1,312 | |||||
Independently operated stores | - | 719 | - | - | 719 | |||||
Total Store Count | 1,899 | 1,107 | 1,897 | 206 | 5,109 | |||||
Three Months Ended September 30, 2023 | ||||||||||
(in thousands) | Maintenance | Car Wash |
Paint, Collision & Glass |
Platform Services |
Total | |||||
System-wide Sales | ||||||||||
Franchise stores | $ | 298,022 | $ | - | $ | 760,437 | $ | 117,957 | $ | 1,176,416 |
Company-operated stores | 204,460 | 98,132 | 85,207 | 1,242 | 389,041 | |||||
Independently operated stores | - | 43,582 | - | - | 43,582 | |||||
Total System-wide Sales | $ | 502,482 | $ | 141,714 | $ | 845,644 | $ | 119,199 | $ | 1,609,039 |
Store Count (in whole numbers) | ||||||||||
Franchise stores | 1,108 | - | 1,662 | 207 | 2,977 | |||||
Company-operated stores | 624 | 418 | 258 | 1 | 1,301 | |||||
Independently operated stores | - | 715 | - | - | 715 | |||||
Total Store Count | 1,732 | 1,133 | 1,920 | 208 | 4,993 |
Nine Months Ended September 28, 2024 | ||||||||||
(in thousands) | Maintenance | Car Wash |
Paint, Collision & Glass |
Platform Services |
Total | |||||
System-wide Sales | ||||||||||
Franchise stores | $ | 888,316 | $ | - | $ | 2,406,078 | $ | 298,744 | $ | 3,593,138 |
Company-operated stores | 682,730 | 275,889 | 195,412 | 3,238 | 1,157,269 | |||||
Independently operated stores | - | 163,286 | - | - | 163,286 | |||||
Total System-wide Sales | $ | 1,571,046 | $ | 439,175 | $ | 2,601,490 | $ | 301,982 | $ | 4,913,693 |
Store Count (in whole numbers) | ||||||||||
Franchise stores | 1,204 | - | 1,669 | 205 | 3,078 | |||||
Company-operated stores | 695 | 388 | 228 | 1 | 1,312 | |||||
Independently operated stores | - | 719 | - | - | 719 | |||||
Total Store Count | 1,899 | 1,107 | 1,897 | 206 | 5,109 | |||||
Nine Months Ended September 30, 2023 | ||||||||||
(in thousands) | Maintenance | Car Wash |
Paint, Collision & Glass |
Platform Services |
Total | |||||
System-wide Sales | ||||||||||
Franchise stores | $ | 823,656 | $ | - | $ | 2,305,420 | $ | 324,608 | $ | 3,453,684 |
Company-operated stores | 605,393 | 302,193 | 248,796 | $ | 3,303 | 1,159,685 | ||||
Independently operated stores | - | 157,647 | - | - | 157,647 | |||||
Total System-wide Sales | $ | 1,429,049 | $ | 459,840 | $ | 2,554,216 | $ | 327,911 | $ | 4,771,016 |
Store Count (in whole numbers) | ||||||||||
Franchise stores | 1,108 | - | 1,662 | 207 | 2,977 | |||||
Company-operated stores | 624 | 418 | 258 | 1 | 1,301 | |||||
Independently operated stores | - | 715 | - | - | 715 | |||||
Total Store Count | 1,732 | 1,133 | 1,920 | 208 | 4,993 |