--Revenue increased 12% powered by 6%
same-store sales growth and 6% net store growth--
--Reaffirms fiscal year 2023 financial
outlook--
CHARLOTTE, N.C.,
Nov. 1,
2023 /PRNewswire/ -- Driven Brands Holdings Inc.
(NASDAQ: DRVN) ("Driven Brands" or the "Company") today reported
financial results for the third quarter ended September 30,
2023.
For the third quarter, Driven Brands delivered revenue of
$581.0 million, up 12 percent versus
the prior year. System-wide sales were $1.6
billion, up 10 percent versus the prior year driven by 6
percent same-store sales growth and 6 percent net store growth. The
Company added 55 net new stores in the quarter.
During the third quarter, we had an $851
million non-cash goodwill impairment in the Car Wash segment
as well as $111 million in non-cash
asset impairment charges and lease terminations. This drove a Net
Loss of $799.3 million or a Net Loss
of $4.83 per diluted share versus Net
Income of $38.4 million in the prior
year. Adjusted Net Income1 decreased 39 percent to
$33.7 million or $0.20 per diluted share1, and Adjusted
EBITDA1 decreased 2 percent to $127.2 million. Cash provided by operating
activities for the nine months ended September 30, 2023,
increased 26 percent to $212.0 million compared to
$167.7 million in the prior year.
"This quarter, we continued to see meaningful growth and strong
operational performance across our portfolio excluding our US Car
Wash and Glass businesses. I'm delighted to report we recently
opened our 300th franchised Take 5 Oil Change location and I'm
looking forward to celebrating our 1,000th location in the fourth
quarter," said Jonathan Fitzpatrick,
President and Chief Executive Officer.
"As discussed at our Investor Day on September 20, we remain focused on operational
improvements in the US Car Wash business, while making steady
progress on the US Glass integration. Given continued weak consumer
demand and increasing competition in the US Car Wash sector, we are
strategically pausing capital investment in this business. Looking
ahead to 2024, the Driven Brands team is prioritizing continued
progress in our US Car Wash and US Glass businesses, disciplined
deployment of capital, and generating free cash flow, which will
primarily be used to pay down debt."
Third Quarter 2023 Key Performance Indicators by
Segment
|
System-wide
Sales
(in millions)
|
Store
Count
|
Same-Store
Sales
|
Revenue
(in
millions)
|
Segment Adjusted
EBITDA1
(in
millions)
|
|
Maintenance
|
$
502.5
|
1,732
|
9.1 %
|
$
244.4
|
$
86.5
|
|
Car
Wash
|
141.7
|
1,133
|
(4.0) %
|
142.8
|
24.4
|
|
Paint, Collision
& Glass
|
845.6
|
1,920
|
8.6 %
|
129.4
|
32.8
|
|
Platform
Services
|
119.2
|
208
|
(4.6) %
|
55.9
|
22.4
|
|
Corporate /
Other
|
N/A
|
N/A
|
N/A
|
8.5
|
|
|
Total
|
$
1,609.0
|
4,993
|
6.4 %
|
$
581.0
|
Capital and Liquidity
The Company ended the third quarter with total liquidity of
$386.8 million consisting of
$211.3 million in cash and cash
equivalents, and $175.5 million of
undrawn capacity on its variable funding securitization senior
notes and revolving credit facility. This does not include the
additional $135.0 million Series 2022
Class A-1 Notes that expand the Company's variable funding note
borrowing capacity when the Company elects to exercise it, assuming
certain conditions continue to be met.
Share Repurchase Program
During the three months ended September
30, 2023, the Company repurchased 3,601,694 shares of its
common stock for approximately $50
million at an average price of $13.87, completing the repurchase authorization
approved by the Board of Directors in August 2023. All
repurchases were made on the open market.
Fiscal Year 2023 Outlook
The Company reaffirms its financial outlook for fiscal year
2023.
|
Current
Outlook
|
|
Revenue
|
~$2.30
billion
|
|
Adjusted
EBITDA1
|
~$535
million
|
|
Adjusted
EPS1
|
~$0.92
|
|
Note: The Company has
not included future M&A in its guidance for fiscal year
2023.
|
|
|
|
|
|
|
|
|
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 third
quarter 2023 results today, Wednesday,
November 1, 2023, at 8:30am
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 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 4,900 locations across 14 countries, and services over
70 million vehicles annually. Driven Brands' network generates
approximately $2.3 billion in
annual revenue from approximately $6.2 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 Quarterly Report, 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
guidance, 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 to achieve
anticipated synergies; (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 31, 2022 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
|
|
Nine months
ended
|
|
(in thousands,
except per share amounts)
|
September 30,
2023
|
|
September 24,
2022
|
|
September 30,
2023
|
|
September 24,
2022
|
|
Revenue:
|
|
|
|
|
|
|
|
|
Franchise royalties
and fees
|
$
47,362
|
|
$
45,562
|
|
$
140,682
|
|
$
128,300
|
|
Company-operated store
sales
|
389,041
|
|
341,211
|
|
1,159,685
|
|
957,487
|
|
Independently-operated
store sales
|
43,582
|
|
40,469
|
|
157,647
|
|
158,500
|
|
Advertising
contributions
|
27,121
|
|
22,018
|
|
73,547
|
|
63,807
|
|
Supply and other
revenue
|
73,928
|
|
67,334
|
|
218,791
|
|
185,447
|
|
Total
revenue
|
581,034
|
|
516,594
|
|
1,750,352
|
|
1,493,541
|
|
Operating
Expenses:
|
|
|
|
|
|
|
|
|
Company-operated store
expenses
|
262,282
|
|
209,562
|
|
762,731
|
|
580,368
|
|
Independently-operated
store expenses
|
25,773
|
|
23,254
|
|
87,095
|
|
85,396
|
|
Advertising
expenses
|
27,121
|
|
22,018
|
|
73,547
|
|
63,807
|
|
Supply and other
expenses
|
38,816
|
|
41,042
|
|
118,188
|
|
109,616
|
|
Selling, general, and
administrative
expenses
|
123,012
|
|
82,460
|
|
332,155
|
|
272,657
|
|
Acquisition related
costs
|
1,667
|
|
2,325
|
|
7,264
|
|
9,981
|
|
Store opening
costs
|
1,372
|
|
753
|
|
3,774
|
|
1,925
|
|
Depreciation and
amortization
|
45,639
|
|
36,518
|
|
129,256
|
|
107,628
|
|
Goodwill
impairment
|
850,970
|
|
—
|
|
850,970
|
|
—
|
|
Trade name
impairment
|
—
|
|
—
|
|
—
|
|
125,450
|
|
Asset impairment
charges and lease
terminations
|
111,239
|
|
2,894
|
|
117,450
|
|
2,910
|
|
Total operating
expenses
|
1,487,891
|
|
420,826
|
|
2,482,430
|
|
1,359,738
|
|
Operating (loss)
income
|
(906,857)
|
|
95,768
|
|
(732,078)
|
|
133,803
|
|
Other expenses,
net:
|
|
|
|
|
|
|
|
|
Interest expense,
net
|
41,292
|
|
27,323
|
|
120,304
|
|
78,946
|
|
Loss on foreign
currency transactions
|
2,980
|
|
15,582
|
|
3
|
|
30,490
|
|
Other expense,
net
|
44,272
|
|
42,905
|
|
120,307
|
|
109,436
|
|
(Loss) income before
taxes
|
(951,129)
|
|
52,863
|
|
(852,385)
|
|
24,367
|
|
Income tax (benefit)
expense
|
(151,818)
|
|
14,472
|
|
(120,572)
|
|
8,592
|
|
Net (loss)
income
|
(799,311)
|
|
38,391
|
|
(731,813)
|
|
15,775
|
|
Net loss attributable
to non-controlling interest
|
—
|
|
—
|
|
—
|
|
(15)
|
|
Net (loss) income
attributable to Driven
Brands Holdings Inc.
|
$
(799,311)
|
|
$
38,391
|
|
$
(731,813)
|
|
$
15,790
|
|
|
|
|
|
|
|
|
|
(Loss) earnings per
share:
|
|
|
|
|
|
|
|
|
Basic
|
$
(4.82)
|
|
$
0.23
|
|
$
(4.40)
|
|
$
0.10
|
|
Diluted
|
$
(4.83)
|
|
$
0.23
|
|
$
(4.41)
|
|
$
0.09
|
|
Weighted average
shares outstanding
|
|
|
|
|
|
|
|
|
Basic
|
162,398
|
|
162,760
|
|
162,698
|
|
162,768
|
|
Diluted
|
162,398
|
|
166,831
|
|
162,698
|
|
166,663
|
|
DRIVEN BRANDS
HOLDINGS INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE
SHEETS (UNAUDITED)
|
|
|
(in thousands,
except share and per share amounts)
|
September 30,
2023
|
|
December 31,
2022
|
|
Assets
|
|
|
|
|
Current
assets:
|
|
|
|
|
Cash and cash
equivalents
|
$
211,280
|
|
$
227,110
|
|
Restricted
cash
|
657
|
|
792
|
|
Accounts and notes
receivable, net
|
165,573
|
|
179,888
|
|
Inventory
|
83,423
|
|
72,040
|
|
Prepaid and other
assets
|
42,208
|
|
40,084
|
|
Income tax
receivable
|
19,641
|
|
15,075
|
|
Assets held for
sale
|
271,006
|
|
—
|
|
Advertising fund
assets, restricted
|
63,983
|
|
36,421
|
|
Total current
assets
|
857,771
|
|
571,410
|
|
Other assets
|
42,273
|
|
30,561
|
|
Property and equipment,
net
|
1,408,970
|
|
1,545,738
|
|
Operating lease
right-of-use assets
|
1,394,384
|
|
1,299,189
|
|
Deferred
commissions
|
6,072
|
|
7,121
|
|
Intangibles,
net
|
741,732
|
|
765,903
|
|
Goodwill
|
1,433,775
|
|
2,277,065
|
|
Deferred tax
assets
|
2,817
|
|
2,911
|
|
Total
assets
|
$
5,887,794
|
|
$
6,499,898
|
|
Liabilities and
shareholders' equity
|
|
|
|
|
Current
liabilities:
|
|
|
|
|
Accounts
payable
|
$
90,440
|
|
$
60,606
|
|
Accrued expenses and
other liabilities
|
256,347
|
|
317,318
|
|
Income tax
payable
|
3,546
|
|
4,454
|
|
Current portion of
long-term debt
|
31,869
|
|
32,986
|
|
Income tax receivable
liability
|
54,791
|
|
53,328
|
|
Advertising fund
liabilities
|
38,341
|
|
36,726
|
|
Total current
liabilities
|
475,334
|
|
505,418
|
|
Long-term
debt
|
2,877,059
|
|
2,705,281
|
|
Deferred tax
liabilities
|
141,965
|
|
276,749
|
|
Operating lease
liabilities
|
1,334,539
|
|
1,177,501
|
|
Income tax receivable
liability
|
117,915
|
|
117,915
|
|
Deferred
revenue
|
30,525
|
|
30,046
|
|
Long-term accrued
expenses and other liabilities
|
29,530
|
|
33,419
|
|
Total
liabilities
|
5,006,867
|
|
4,846,329
|
|
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 163,959,225 and
167,404,047 shares outstanding; respectively
|
1,639
|
|
1,674
|
|
Additional paid-in
capital
|
1,646,831
|
|
1,628,904
|
|
Retained (deficit)
earnings
|
(696,938)
|
|
84,795
|
|
Accumulated other
comprehensive loss
|
(71,236)
|
|
(62,435)
|
|
Total shareholders'
equity attributable to Driven Brands Holdings Inc.
|
880,296
|
|
1,652,938
|
|
Non-controlling
interests
|
631
|
|
631
|
|
Total shareholders'
equity
|
880,927
|
|
1,653,569
|
|
Total liabilities
and shareholders' equity
|
$
5,887,794
|
|
$
6,499,898
|
|
DRIVEN BRANDS
HOLDINGS INC. AND SUBSIDIARIES
CONSOLIDATED
STATEMENTS OF CASH FLOWS (UNAUDITED)
|
|
|
Nine Months
Ended
|
|
(in
thousands)
|
September 30,
2023
|
|
September 24,
2022
|
|
Net (loss)
income
|
$
(731,813)
|
|
$
15,775
|
|
Adjustments to
reconcile net (loss) income to net cash provided by operating
activities:
|
|
|
|
|
Depreciation and
amortization
|
129,256
|
|
107,628
|
|
Goodwill
impairment
|
850,970
|
|
—
|
|
Trade name
impairment
|
—
|
|
125,450
|
|
Equity-based
compensation expense
|
9,730
|
|
12,159
|
|
Loss on foreign
denominated transactions
|
3,706
|
|
30,490
|
|
Gain on foreign
currency derivatives
|
(3,704)
|
|
(2,981)
|
|
Loss (gain) on sale and
disposal of businesses, fixed assets, and sale-leaseback
transactions
|
1,730
|
|
(12,183)
|
|
Reclassification of
interest rate hedge to income
|
(1,358)
|
|
—
|
|
Bad debt
expense
|
1,244
|
|
1,011
|
|
Asset impairment
costs
|
117,450
|
|
2,910
|
|
Amortization of
deferred financing costs and bond discounts
|
6,287
|
|
6,807
|
|
Benefit for deferred
income taxes
|
(134,266)
|
|
(38,216)
|
|
Other, net
|
24,422
|
|
15,620
|
|
Changes in assets
and liabilities, net of acquisitions:
|
|
|
|
|
Accounts and notes
receivable, net
|
2,464
|
|
(40,296)
|
|
Inventory
|
(12,531)
|
|
(17,898)
|
|
Prepaid and other
assets
|
(3,909)
|
|
850
|
|
Advertising fund assets
and liabilities, restricted
|
(10,923)
|
|
(4,612)
|
|
Other Assets
|
(29,210)
|
|
(3,767)
|
|
Deferred
commissions
|
658
|
|
917
|
|
Deferred
revenue
|
1,961
|
|
2,222
|
|
Accounts
payable
|
24,913
|
|
(12,321)
|
|
Accrued expenses and
other liabilities
|
(29,442)
|
|
(59,844)
|
|
Income tax
receivable
|
(5,612)
|
|
37,931
|
|
Cash provided by
operating activities
|
212,023
|
|
167,652
|
|
Cash flows from
investing activities:
|
|
|
|
|
Capital
expenditures
|
(482,633)
|
|
(276,222)
|
|
Cash used in business
acquisitions, net of cash acquired
|
(53,641)
|
|
(652,085)
|
|
Proceeds from
sale-leaseback transactions
|
172,230
|
|
150,112
|
|
Proceeds from sale or
disposal of businesses and fixed assets
|
2,837
|
|
6,427
|
|
Cash used in
investing activities
|
(361,207)
|
|
(771,768)
|
|
Cash flows from
financing activities:
|
|
|
|
|
Repayment of long-term
debt
|
(20,969)
|
|
(15,772)
|
|
Proceeds from revolving
lines of credit and short-term debt
|
335,000
|
|
300,000
|
|
Repayments of revolving
lines of credit and short-term debt
|
(120,000)
|
|
—
|
|
Repayment of principal
portion of finance lease liability
|
(2,020)
|
|
(2,229)
|
|
Share
repurchases
|
(49,945)
|
|
—
|
|
Stock option
exercises
|
6,117
|
|
—
|
|
Other, net
|
(322)
|
|
581
|
|
Cash provided by
financing activities
|
147,861
|
|
282,580
|
|
Effect of exchange rate
changes on cash
|
365
|
|
(7,705)
|
|
Net change in cash,
cash equivalents, restricted cash, and cash included in advertising
fund
assets, restricted
|
(958)
|
|
(329,241)
|
|
Cash and cash
equivalents, beginning of period
|
227,110
|
|
523,414
|
|
Cash included in
advertising fund assets, restricted, beginning of period
|
32,871
|
|
38,586
|
|
Restricted cash,
beginning of period
|
792
|
|
792
|
|
Cash, cash
equivalents, restricted cash, and cash included in advertising fund
assets,
restricted, beginning of period
|
260,773
|
|
562,792
|
|
Cash and cash
equivalents, end of period
|
211,280
|
|
190,373
|
|
Cash included in
advertising fund assets, restricted, end of period
|
47,877
|
|
42,386
|
|
Restricted cash, end of
period
|
657
|
|
792
|
|
Cash, cash
equivalents, restricted cash, and cash included in advertising fund
assets,
restricted, end of period
|
$
259,814
|
|
$
233,551
|
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 Guidance
Driven Brands includes Adjusted EBITDA and Adjusted EPS in the
Company's Fiscal Year 2023 Guidance. Adjusted EBITDA and Adjusted
EPS are non-GAAP financial measures and have not been reconciled to
the most comparable GAAP outlook 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 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 attributable to Driven Brands Holdings Inc.
("Adjusted Net Income") and Adjusted diluted earnings per share
attributable to Driven Brands common stockholders ("Adjusted
Earnings Per Share") 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 Earnings Per Share 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 nine months ended
September 30, 2023, compared to the
three and nine months ended September 24,
2022.
|
Net (Loss) Income to
Adjusted Net Income and Adjusted Earnings Per Share
(Unaudited)
|
|
|
Three months
ended
|
|
Nine months
ended
|
|
(in thousands,
except per share amounts)
|
September 30,
2023
|
|
September 24,
2022
|
|
September 30,
2023
|
|
September 24,
2022
|
|
Net (loss)
income
|
$
(799,311)
|
|
$
38,391
|
|
$
(731,813)
|
|
$
15,775
|
|
Acquisition related
costs(a)
|
1,667
|
|
2,325
|
|
7,264
|
|
9,981
|
|
Non-core items and
project costs, net(b)
|
1,486
|
|
851
|
|
6,113
|
|
3,436
|
|
Straight-line rent
adjustment(c)
|
5,193
|
|
3,220
|
|
14,196
|
|
11,530
|
|
Cloud computing
amortization(d)
|
991
|
|
—
|
|
991
|
|
—
|
|
Equity-based
compensation expense(e)
|
2,681
|
|
5,308
|
|
9,730
|
|
12,159
|
|
Foreign currency
transaction (gain) loss,
net(f)
|
2,980
|
|
15,582
|
|
3
|
|
30,490
|
|
Bad debt
recovery(g)
|
—
|
|
(449)
|
|
—
|
|
(449)
|
|
Goodwill
impairment(h)
|
850,970
|
|
—
|
|
850,970
|
|
—
|
|
Trade name
impairment(i)
|
—
|
|
—
|
|
—
|
|
125,450
|
|
Asset sale leaseback
(gain) loss,
impairment and closed store expenses(j)
|
125,473
|
|
(14,186)
|
|
119,637
|
|
(20,248)
|
|
Amortization related to
acquired
intangible assets(k)
|
9,252
|
|
7,212
|
|
23,564
|
|
18,284
|
|
Provision for uncertain
tax positions(l)
|
—
|
|
—
|
|
—
|
|
76
|
|
Adjusted net income
before tax impact
of adjustments
|
201,382
|
|
58,254
|
|
300,655
|
|
206,484
|
|
Tax impact of
adjustments(m)
|
(167,662)
|
|
(3,290)
|
|
(175,452)
|
|
(44,086)
|
|
Adjusted net
income
|
33,720
|
|
54,964
|
|
125,203
|
|
162,398
|
|
Net loss attributable
to non-controlling
interest
|
—
|
|
—
|
|
—
|
|
(15)
|
|
Adjusted Net Income
attributable to
Driven Brands Holdings Inc.
|
$
33,720
|
|
$
54,964
|
|
$
125,203
|
|
$
162,413
|
|
|
|
|
|
|
|
|
|
Adjusted Earnings Per
Share
|
|
|
|
|
|
|
|
|
Basic1
|
$
0.20
|
|
$
0.33
|
|
$
0.75
|
|
$
0.98
|
|
Diluted1
|
$
0.20
|
|
$
0.32
|
|
$
0.74
|
|
$
0.96
|
|
|
|
|
|
|
|
|
|
Weighted average shares
outstanding
|
|
|
|
|
|
|
|
|
Basic
|
162,398
|
|
162,760
|
|
162,698
|
|
162,768
|
|
Diluted
|
165,850
|
|
166,831
|
|
166,557
|
|
166,663
|
|
(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 $3 million for the three and nine
months ended September 30, 2023, respectively, and Adjusted Net
Income attributable to participating securities used in the diluted
earnings per share calculation was $1 million and $2 million for
the three and nine months ended September 30, 2023,
respectively.
|
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 31, 2022,
filed with the SEC on March 1, 2023,
for additional information on Adjusted EBITDA. The tables below
reflect the calculation of Adjusted EBITDA for the three and nine
months ended September 30, 2023,
compared to the three and nine months ended September 24, 2022.
|
Net Income (Loss) to
Adjusted EBITDA Reconciliation (Unaudited)
|
|
|
Three months
ended
|
|
Nine months
ended
|
|
(in
thousands)
|
September 30,
2023
|
|
September 24,
2022
|
|
September 30,
2023
|
|
September 24,
2022
|
|
Net (loss)
income
|
$
(799,311)
|
|
$
38,391
|
|
$
(731,813)
|
|
$
15,775
|
|
Income tax (benefit)
expense
|
(151,818)
|
|
14,472
|
|
(120,572)
|
|
8,592
|
|
Interest expense,
net
|
41,292
|
|
27,323
|
|
120,304
|
|
78,946
|
|
Depreciation and
amortization
|
45,639
|
|
36,518
|
|
129,256
|
|
107,628
|
|
EBITDA
|
(864,198)
|
|
116,704
|
|
(602,825)
|
|
210,941
|
|
Acquisition related
costs(a)
|
1,667
|
|
2,325
|
|
7,264
|
|
9,981
|
|
Non-core items and
project costs, net(b)
|
1,486
|
|
851
|
|
6,113
|
|
3,436
|
|
Straight-line rent
adjustment(c)
|
5,193
|
|
3,220
|
|
14,196
|
|
11,530
|
|
Cloud computing
amortization(d)
|
991
|
|
—
|
|
991
|
|
—
|
|
Equity-based
compensation expense(e)
|
2,681
|
|
5,308
|
|
9,730
|
|
12,159
|
|
Foreign currency
transaction (gain)
loss, net(f)
|
2,980
|
|
15,582
|
|
3
|
|
30,490
|
|
Bad debt
recovery(g)
|
—
|
|
(449)
|
|
—
|
|
(449)
|
|
Goodwill
impairment(h)
|
850,970
|
|
—
|
|
850,970
|
|
—
|
|
Trade name
impairment(i)
|
—
|
|
—
|
|
—
|
|
125,450
|
|
Asset sale leaseback
(gain) loss,
impairment and closed store expenses(j)
|
125,473
|
|
(14,186)
|
|
119,637
|
|
(20,248)
|
|
Adjusted
EBITDA
|
$
127,243
|
|
$
129,355
|
|
$
406,079
|
|
$
383,290
|
|
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)
|
Consists of the
non-cash portion of rent expense, which reflects the extent to
which our straight-line rent expense recognized under U.S. GAAP
exceeds or is less than our cash rent payments.
|
|
(d)
|
Includes non-cash
amortization expenses relating to the amortization of cloud
computing arrangements.
|
|
(e)
|
Represents non-cash
equity-based compensation expense.
|
|
(f)
|
Represents foreign
currency transaction (gains) losses, net that primarily related to
the remeasurement of our intercompany loans, which are partially
offset by unrealized gains and losses on remeasurement of cross
currency swaps and forward contracts.
|
|
(g)
|
Represents the recovery
of previously uncollectible receivables outside of normal
operations.
|
|
(h)
|
Relates to goodwill
impairment charges within the Car Wash segment.
|
|
(i)
|
Certain
indefinite-lived Car Wash trade names were impaired as the Company
elected to discontinue their use.
|
|
(j)
|
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.
|
|
(k)
|
Consists of
amortization related to acquired intangible assets as reflected
within depreciation and amortization in the unaudited consolidated
statements of operations.
|
|
(l)
|
Represents uncertain
tax positions recorded for tax positions, inclusive of interest and
penalties.
|
|
(m)
|
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
|
|
Nine months
ended
|
|
(in
thousands)
|
September 30,
2023
|
|
September 24,
2022
|
|
September 30,
2023
|
|
September 24,
2022
|
|
Segment Adjusted
EBITDA:
|
|
|
|
|
|
|
|
|
Maintenance
|
$
86,493
|
|
$
68,763
|
|
$
245,232
|
|
$
185,324
|
|
Car Wash
|
24,429
|
|
39,098
|
|
112,001
|
|
148,495
|
|
Paint, Collision &
Glass
|
32,763
|
|
38,919
|
|
109,724
|
|
100,847
|
|
Platform
Services
|
22,417
|
|
19,765
|
|
61,984
|
|
54,471
|
|
Corporate and
other
|
(37,487)
|
|
(36,437)
|
|
(119,088)
|
|
(103,922)
|
|
Store opening
costs
|
(1,372)
|
|
(753)
|
|
(3,774)
|
|
(1,925)
|
|
Adjusted
EBITDA
|
$
127,243
|
|
$
129,355
|
|
$
406,079
|
|
$
383,290
|
|
DRIVEN BRANDS
HOLDINGS INC. AND SUBSIDIARIES
ADDITIONAL
INFORMATION ON KEY PERFORMANCE INDICATORS
(UNAUDITED)
|
|
|
|
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
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three months ended
September 24, 2022
|
|
(in
thousands)
|
|
Maintenance
|
|
Car
Wash
|
|
Paint,
Collision
&
Glass
|
|
Platform
Services
|
|
Total
|
|
System-wide
Sales
|
|
|
|
|
|
|
|
|
|
|
|
Franchise
stores
|
|
$
239,290
|
|
$
—
|
|
$
711,816
|
|
$
129,320
|
|
$
1,080,426
|
|
Company-operated
stores
|
|
172,162
|
|
98,235
|
|
69,383
|
|
1,431
|
|
341,211
|
|
Independently operated
stores
|
|
—
|
|
40,469
|
|
—
|
|
—
|
|
40,469
|
|
Total System-wide
Sales
|
|
$
411,452
|
|
$
138,704
|
|
$
781,199
|
|
$
130,751
|
|
$
1,462,106
|
|
|
|
|
|
|
|
|
|
|
|
|
Store Count (in
whole numbers)
|
|
|
|
|
|
|
|
|
|
|
|
Franchise
stores
|
|
1,023
|
|
—
|
|
1,625
|
|
201
|
|
2,849
|
|
Company-operated
stores
|
|
574
|
|
369
|
|
197
|
|
1
|
|
1,141
|
|
Independently operated
stores
|
|
—
|
|
717
|
|
—
|
|
—
|
|
717
|
|
Total Store
Count
|
|
1,597
|
|
1,086
|
|
1,822
|
|
202
|
|
4,707
|
|
DRIVEN BRANDS
HOLDINGS INC. AND SUBSIDIARIES
ADDITIONAL
INFORMATION ON KEY PERFORMANCE INDICATORS
(UNAUDITED)
|
|
|
|
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
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Nine months ended
September 24, 2022
|
|
(in
thousands)
|
|
Maintenance
|
|
Car
Wash
|
|
Paint,
Collision
&
Glass
|
|
Platform
Services
|
|
Total
|
|
System-wide
Sales
|
|
|
|
|
|
|
|
|
|
|
|
Franchise
stores
|
|
$
670,079
|
|
$
—
|
|
$
2,003,401
|
|
$
348,890
|
|
$
3,022,370
|
|
Company-operated
stores
|
|
497,638
|
|
294,526
|
|
161,348
|
|
$
3,975
|
|
957,487
|
|
Independently operated
stores
|
|
—
|
|
158,500
|
|
—
|
|
—
|
|
158,500
|
|
Total System-wide
Sales
|
|
$
1,167,717
|
|
$
453,026
|
|
$
2,164,749
|
|
$
352,865
|
|
$
4,138,357
|
|
|
|
|
|
|
|
|
|
|
|
|
Store Count (in
whole numbers)
|
|
|
|
|
|
|
|
|
|
|
|
Franchise
stores
|
|
1,023
|
|
—
|
|
1,625
|
|
201
|
|
2,849
|
|
Company-operated
stores
|
|
574
|
|
369
|
|
197
|
|
1
|
|
1,141
|
|
Independently operated
stores
|
|
—
|
|
717
|
|
—
|
|
—
|
|
717
|
|
Total Store
Count
|
|
1,597
|
|
1,086
|
|
1,822
|
|
202
|
|
4,707
|
View original content to download
multimedia:https://www.prnewswire.com/news-releases/driven-brands-holdings-inc-reports-third-quarter-results-301973457.html
SOURCE Driven Brands