Driven Brands Holdings Inc. Reports Third Quarter 2024 Results

Rhea-AI Summary

Driven Brands Holdings (NASDAQ: DRVN) reported Q3 2024 results with revenue of $592 million, up 2% year-over-year, and system-wide sales of $1.6 billion. The company posted a net loss of $14.9 million ($0.09 per share), compared to a loss of $799.3 million in the prior year. Adjusted EBITDA grew 14% to $138.8 million. Take 5 Oil Change showed strong performance with 15% revenue growth and 5% same-store sales growth. The company achieved its net leverage target of 4.5x ahead of schedule and reaffirmed its FY24 outlook, expecting revenue of $2.33-2.43 billion and Adjusted EBITDA of $529-559 million.

Positive

• 15th consecutive quarter of same-store sales growth at 1.1%
• Take 5 Oil Change segment achieved 15% revenue growth
• Adjusted EBITDA increased 14% to $138.8 million
• Adjusted Net Income improved to $41.8 million vs $29.9 million prior year
• Strong liquidity position of $655.3 million

Negative

• Net loss of $14.9 million in Q3
• Modest overall revenue growth of only 2%
• Lowered full-year revenue guidance by $18 million due to Canadian distribution business sale

Insights

Financial Analyst

Q3 results show mixed performance with some concerning signals. While revenue grew 2% to $592 million, the company posted a net loss of $14.9 million. The bright spot is Take 5 Oil Change's 15% revenue growth and 5% same-store sales growth, demonstrating strength in the maintenance segment.

The company's leverage reduction to 4.5x ahead of schedule is positive, but liquidity position of $655.3 million needs monitoring given the operating loss. The guidance reaffirmation, excluding Canadian distribution business disposition, suggests management confidence in core operations despite headwinds. The adjusted EBITDA of $138.8 million, up 14%, indicates underlying operational stability, though margin pressure remains a concern.

Market Research Analyst

The company's segment performance reveals important trends. Maintenance leads with $278.2 million revenue and highest segment EBITDA at $96.7 million. The Car Wash segment's modest 1.8% same-store growth and Paint, Collision & Glass's 1.3% suggest market saturation challenges. The planned net store growth of 205-220 units indicates continued expansion strategy, but execution risks exist given current profitability challenges. The 1.1% overall same-store sales growth, while positive, shows slowing momentum that warrants attention.

--15^th consecutive quarter of same store sales growth--

--Take 5 Oil Change delivers 15% revenue growth and 5% same store sales growth--

--Net Loss of $15 million and Adjusted EBITDA of $139 million--

--Re-affirms FY24 Revenue, Adj. EBITDA and Adj. EPS outlook excluding disposition--

CHARLOTTE, N.C.--(BUSINESS WIRE)-- Driven Brands Holdings Inc. (NASDAQ: DRVN) (“Driven Brands” or the “Company”) today reported financial results for the third quarter ending September 28, 2024.

For the third quarter, Driven Brands delivered revenue of $592 million, up 2% versus the prior year. System-wide sales were $1.6 billion, up 2% versus the prior year primarily driven by 1.1% same store sales growth and 56 net new units.

Net loss was $14.9 million or $0.09 per diluted share versus a net loss of $799.3 million or $4.83 per diluted share in the prior year. Adjusted Net Income¹ was $41.8 million or $0.26 per diluted share versus $29.9 million or $0.18 per diluted share in the prior year. Adjusted EBITDA¹ was $138.8 million, up 14% versus the prior year.

“We are proud to report our 15th consecutive quarter of same store sales growth, a testament to the reliable one-two punch of Take 5 Oil Change and our stable franchise businesses. In particular, Take 5 Oil Change continues to execute at a high level, and we anticipate continued growth supported by our robust unit pipeline. Our performance was further supplemented by the steady results of our legacy franchise brands,” said Jonathan Fitzpatrick, President and Chief Executive Officer.

“We have achieved our net leverage target of 4.5x ahead of schedule and remain committed to further deleveraging. In the remainder of the year, we look to continue our momentum by delivering our financial outlook and positioning Driven for continued growth.” Fitzpatrick concluded.

Third Quarter 2024 Key Performance Indicators by Segment

	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

Capital and Liquidity

The Company ended the third quarter with total liquidity of $655.3 million consisting of $204.2 million in cash and cash equivalents and $451.1 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.

Fiscal Year 2024 Outlook

The Company is re-affirming its prior outlook; the following reflects the impact of sale of our Canadian distribution business, which is expected to reduce full-year revenue by approximately $18 million and adjusted EBITDA by approximately $6 million.

	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

The Company also expects:

• Same-store sales growth of 1% to 3%

• Net store growth of approximately 205 to 220

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.

2 The Company does not provide same store sales results for the Platform Services segment because it only applied to the 1-800-Radiator brand which is not a representative indicator of the segment’s performance. 1-800-Radiator’s same store sales performance is included in the Company’s overall same store sales results.

Conference Call

Driven Brands will host a conference call to discuss third quarter 2024 results today, Thursday, October 31, 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 5,100 locations across 14 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								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

DRIVEN BRANDS HOLDINGS INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS (UNAUDITED)
(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

DRIVEN BRANDS HOLDINGS INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
	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

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 nine months ended September 28, 2024, compared to the three and nine months ended September 30, 2023.

Net (Loss) Income to Adjusted Net Income and Adjusted Earnings Per Share (Unaudited)

	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

(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 28, 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 nine months ended September 30, 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 nine months ended September 28, 2024, compared to the three and nine months ended September 30, 2023.

Net (Loss) Income to Adjusted EBITDA Reconciliation (Unaudited)

	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

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 shared-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 a goodwill impairment within the Car Wash segment.
(g)	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.
(h)	Represents charges incurred related to the Company’s partial repayment of Senior Secured Notes in conjunction with the sale of its Canadian distribution business.
(i)	Consists of amortization related to acquired intangible assets as reflected within depreciation and amortization in the unaudited consolidated statement of operations.
(j)	Represents valuation allowances on income tax carryforwards in certain domestic jurisdictions that are not more likely than not to be realized.
(k)	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 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

DRIVEN BRANDS HOLDINGS INC. AND SUBSIDIARIES
ADDITIONAL INFORMATION ON KEY PERFORMANCE INDICATORS (UNAUDITED)
	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

 

View source version on businesswire.com: https://www.businesswire.com/news/home/20241031804831/en/

Shareholder/Analyst inquiries:

Dawn Francfort

ICR, Inc.

investors@drivenbrands.com

(203) 682-8200

Media inquiries:

Taylor Blanchard

taylor.blanchard@drivenbrands.com

(704) 644-8129

Source: Driven Brands

FAQ

What was Driven Brands (DRVN) revenue in Q3 2024?

Driven Brands reported revenue of $592 million in Q3 2024, representing a 2% increase compared to the prior year.

How much was Driven Brands (DRVN) Q3 2024 net loss?

The company reported a net loss of $14.9 million, or $0.09 per diluted share, in Q3 2024.

What is Driven Brands (DRVN) full-year 2024 revenue guidance?

Driven Brands expects full-year 2024 revenue between $2.33-2.43 billion, adjusted down from original guidance due to the sale of Canadian distribution business.

How did Take 5 Oil Change perform in Q3 2024 for DRVN?

Take 5 Oil Change delivered strong performance with 15% revenue growth and 5% same-store sales growth in Q3 2024.