Driven Brands (DRVN) 22 Feb 232022 Q4 Earnings call transcript

Good morning, and welcome to Driven Brands Fourth Quarter and Fiscal 2022 Earnings Conference Call. My name is Rob, and I will be your operator today.

As a reminder, this call is being recorded.

I would now like to turn the conference over to Kristy Moser, Vice President of Investor Relations.

Thanks very much, and welcome, everybody, to Driven Brands' fourth quarter and fiscal 2022 earnings conference call.

results. earnings available is website for summarizing fourth the reconciliation leverage at to our infographic and download quarter addition release, a there ratio investorrelations.drivenbrands.com, In at our

Jonathan for On you financial Fitzpatrick, and the year. through Mason, President a our Officer. Vice the and the Chief Executive me Tiffany moment, call today Jonathan Tiffany President Chief and quarter Executive with and and Officer; Financial In performance and operating are will walk

like to management I'd you we that certain call, remarks, Before begin this remind will non-GAAP on our financial to refer measures.

the You can its find directly Commission. financial reconciliations Investor Exchange and and to measures company's in in Relations Securities website most the GAAP the with filings comparable

to also beliefs statements subject and current make statements. cause are to and our could advised future and risks that materially expectations. and the guarantees factors differ and and regards forward-looking of number be Please during other may these the in forward-looking a plans, that to statements contemplated performance by course from of are results These not uncertainties actual management of events this events call, results

as These with risks our earnings filings update revise required or otherwise. as forth undertake and result obligation set and we only new no a the whether of are of statements any in to Securities or hereof, uncertainties Exchange our and These and, except made release include information, of Commission. future as forward-looking date those the by events them, law,

and by session. one you a yourself We follow-up. question-and-answer kindly prepared question that Today's limit will be ask to followed remarks one

call over turn now Jonathan. to I'll the that, With

Thank you, morning. and good

benefits progress our performance Brands. record of competitive deepened our with offerings Driven year for resonated network differentiated moat customers. We by our a and significant our as strategic expanding and XXXX

embracing convenient. a by care friendlier car faster, and mindset, are and simplicity industry more customer-first making the redefining We

adjusted to proven category, gain this $XXX to drive We footprint. large, significant aftermarket our our highly our automotive and expanding we've revenue Since while growth. continue leveraging XXXX, long-term, quadrupled significantly billion playbook tripled fragmented EBITDA, our in sustainable share growing and

of EBITDA revenue XX% In ahead adjusted growth, X% to results translated XX% and same-store XXXX, which new we guidance, supported delivered growth. growth, store with sales by our growth XX%

navigate and challenging resilience in and reinvest of continue macro environment, That which consistent to business offerings. share. demonstrating used We needs-based strong further our service a cash gain to the market execution our generated we the flow,

Now all customers. members, credit loyal to franchisees long-term our goes and team Brands' XX,XXX our our Driven amazing

resilient. Our business remains

on the Our line and of both team is executing, to bottom including seventh the top in sales the and we fourth double-digit strong growth quarter, quarter deliver continued growth. same-store consecutive

first and entered the quarter XXXX our excellent expense visibility base. of with momentum We into

and of Our automotive record and of momentum XXXX category morning continued the confidence released guidance services this our platform, the diversified execution. resilience that our track strong a in reflects

We remain flow creating to cash growth. capacity highly generative, reinvest in

Our growth. deliver continues openings future into buy. line unit have expand, to that giving sight growth: build pipeline levers to And or of franchise, we multiple of multiyear

of our a our complemented of through diversification carefully well and by the together benefits a collectively and offering. provide and This tangible. as breadth additional our offerings to is diversification on power is platform The the as The network businesses scale the create curated significant balance benefits these resilience scale of that significant business. Driven bringing natural brands

the our more in These revenue continued for unlocking we on value cost The and from customers. million delivering XX Analyst procurement; to grow we for compound with that wallet Day to benefits category network unique and upcoming at our share forward largest look our and sales diversified May. the as sharing database benefits platform, commercial growth customers; from in network the savings benefits include: driving more and of

we that of of XXXX. strength the us end adjusted Dream confidence to meet the on Big by are Plan Our with continued of $XXX exceed execution, EBITDA of combined business million track our our or gives model,

business Lube, our And Car playbook cash share level key enhancing perspective, market and across to continue and the our consolidated growth from unit Wash Glass, strong progress Quick As growth. and our proven flow, simplifying supporting drove performance a for solutions-oriented and experience is we to gains leveraging categories, significant customer our our growth strong approach make our economics. across resonating segments,

drive starting customer our sales, both ticket further the the to Quick competition. quarter continuing differentiated fourth best-in-category quick same-store and model, continues with Change, Take X XX-minute Oil which accelerated acquisitions driven over Lube. traffic, Now in stay-in-your-car lube outpace by and to XX%, to

has As grown, our has unit awareness. so count our brand unaided

is Driven Brands now just after most quick brand years lube X the U.S., entered recognized six second the Take category. the in

become a for friendlier there dealerships, consumers gain alternative faster, a price more aware, and market As change oil at more is we to share. their simpler than continue cost-effective

American locations. to franchise addition close our to locations, sales North In our XXX we strong year-over-year to same-store XXX performance, footprint including XX% grew

on expand of XXX to XXXX. primarily continued franchise made in our has predictable we're sustainable pipeline locations, runway up grow to growth. by to footprint long XX% a track additional us And giving Our and units, for an

Shifting wash. car to

footprint cash-on-cash with business, the Car car Wash provider become the car almost locations. of and express returns. of profitability wash the what U.S. X,XXX largest comprised wash opportunity are The in a single growing strong more services compelling and a XXX over branded within We of established largest long-term has with business remains with globally locations provider international quickly the

the that a As in shortly. quarter experience discuss macroeconomic we result softer we to and will quarter, related fourth to continued the volume foreign exchange Tiffany cautioned some last environment of headwinds retail as

the a environment and new rationalize competitive competitive current of beginning remain to the entrants. as experience intensity will advantage significant is scale Our

to broader the look cycles, remained resilient past as Additionally, the to we industry. relative industry retail

openings pipeline growth. selective over enabling with XXX to at following us open greenfield to M&A, locations, our proven for playbook expected in with Our XX for be robust the roughly remains U.S. in XXXX, more tuck-in

was brand awareness, positioning, Take our elevating market we our our experience. system migrate of customer and under standardizing footprint approximately which year-end, we complete operations, As are X as brand, the XX%

data in turn, X This, capabilities. us enhance our and capture our program integrate allows to Take Unlimited

Wash Club In locations grew delivered the members EBITDA the locations than quarter, complete, to be same-store higher was we the of our in fact, margin subscriptions. aggregate, sales XXX,XXX adjusted end By positive and where to rebranding yet total mid-single-digit rebranded.

have of one If plan bullish our X entirely growth Wash two brand our X you X,XXX combine XXX branded XXXX, brand, soon locations the will great and locations. we across Lube nearly Car We operate XXX Take leveraging around long-term synergies Take with Quick that include locations businesses. the will remain over for under

quarter, Glass. as position XXX continued largest the and used growth in fragmented we auto in to enhance the XXX the fourth $X mobile year highly playbook Wash. category, Car Quick Lube we over locations U.S. that player and with servicing same Now ending wrapping up with our States. the following units glass the second And United In in over the we're billion

We are openings, smaller greenfield the best store which portfolio compelling towards the returns shifting now our unit tuck-in in given mobile level have acquisitions cash-on-cash and and economics.

services implementation see increase relationships. further consumers, our growth, Glass Auto migrate with early as under it capture our procedures volume. and In upgrades only standardizes recognition our commercial addition also unit to to systems from to our Now, commercial benefits volumes as that strengthens brand us operating the calibration that footprint our not to we And expanding enables our and we begin strong of store continue

continue locations commercial XXXX year, fleet late to regional addition expect short and the in insurers through volume with insurers We grow of XXXX. and the to at national term and the in our large

year and continued the will growth more to space increase our several about Glass further from the economics. as We next approximately footprint significant of over with couldn't scale of excited already covers the a there benefits provide XX% current remains The tailwind long-term expansion consumers the that mature we commercial business. the of today, be business U.S. over potential years. the the next compelling white in And for footprint

and Now Driven giving years. site growth future. positioned over opportunity secured predictable there is are capitalize better, Within our Driven across development continued locations category, over which visibility into to this we approximately better the X,XXX space, than grow for a remains or same-store and strong sales runway creating growth significant highly And that there looking growth, Brands. market one unit no robust us believe few the XX% unit next to in on to large pipeline has fragmented Brands, sustainable, white long expansion

unit Beyond significant create growth, the same-store our and enabling strength breadth store network incremental benefits scale savings. and competitive moat capabilities brands, our cost our shared profits, of growth our sales and further business, service deepen and differentiate that our

rewarding ahead. focus and data, care these We technology on Over customers car include scale. continue road will our network simplifying benefits to and they can so time, the leverage

these So, network let's with Beginning commercial of some benefits. talk business. about

creating to collision local represent and top of and to for insurance resilience the including additional XX a carriers business. up of start the insurance continue was top in large business, estimates and our Within approximately regional carriers, sales Our BXB our digits BXB of QX year. fleet sales, our XX our high-single layer an system-wide and carriers our business. the half from XX% up the are volume growing

Glass. will remain with in same-store segments, partners Our tailwind expand give to and across our expanding BXB Brands Continuing XXXX our insurance, insurance relationship for us to of confidence a all focus our including continue offering in with partners, to fleet Driven a major sales.

procurement. to shifting Now,

test input optimize recently from of and Advantage, over benefits branded the for million our continue It's our we begin our XX-location Brands costs In of stock, expectations. launched performing centralized will as days, our even stores procurement We which the early begins $XX will is function. approximately Driven XX% which year-over-year. in keeps be course pilot network out marketplace, roll to of procurements still to stabilize. XXXX. continue but EBITDA, XXXX, with And the the helps to contributed to in adjusted up line This a new differentiator to generate Driven market

our from to cost Brands Driven revenue capital. over thousands through to material the to value by great without of value expanding dollars growth it Brands, our driving one-stop buying a significant a working being through we to addition driver believe SKUs, to to annually to and to a XX,XXX by continue for franchisees. impact save offering Driven Brands, providing shop of Driven generation partners volume per tens SKUs provide and vendor value franchisees XXX,XXX savings Giving opportunity our will location, In

over our as validate and learn assumptions quarter. to continue test we our first complete the will We

the We meaningful over for continue to be time. it growth for EBITDA by revenue Driven generate to potential excited and

And now wallet. share of to turning

to is data leveraging for wallet to business. benefits our brands component a power Another of our of network is our generated priority grow share. unlock strategic that our all from the is This ecosystem

contributed which databases XX% which has tangible the of $XX are customers, in XX unique equates the total today in XXXX. revenue of through direct-to-consumer by X% one by marketing, category driving most grown million we revenue consumer X% Underpinned over robust than to in more with year-over-year, million which of or revenue, results

Take We're We're Wash integrating retention Car in acquisition services brand Lube Car our our and the serving Quick will customer drive across to surface be potential the to us focus beginning differentiated customer as our which bringing quick awareness of low-cost XXXX. X lube. scratch platform, brand, of Wash a share for under business for point wallet only the long-term to acquisition, and a and

confidence Now the together, enable And capabilities on incremental in business, early and and to the are long needs-based short, gains the runway goals. in and our will innings with fragmented ability growth growing continued network power in of all value, bringing industry. a of to scale further this market deliver medium- that highly our benefits long-term still benefits we of share and volume giving our us these profitability future

momentum a of strong XXXX, back the quarter. has the continued first On in

and are taking the growing, we share cash, reinvesting which flywheel growth. are of We generating into

a Our scale advantage. gives us competitive compounding and

and We us. multiyear us the have of significant in unit proven that into opportunities growth a playbook confidence ahead gives visibility

$XXX Our by million of of least much EBITDA Dream confident Big ability to in the our end very Plan XXXX adjusted of and remains we're on track, at it. beat

that, the for year XXXX to guidance. QX financials deeper dive let Tiffany a into full me XXXX with over turn Tiffany? it Now and

Jonathan, and Thanks, everyone. morning, good

XXXX. in print strong another delivered has Brands Driven

In of our EBITDA ended year XX% ahead guidance. the original fact, we adjusted

delivering both to commercial services Our needs-based best-in-class and well, customers. executed team consumer

continue We of track build and record to inorganic strong growth. organic on our

revenue, growing XX% As EBITDA, Jonathan mentioned CAGR, CAGR. tripled a earlier, and quadrupled at XX% we since have growing at a adjusted XXXX,

and much quarter be to resilient, like continues fourth business we the Our unfolded anticipated. incredibly

our delivering sales We growth this as have strength, behalf same-store XXXX of in execute with category and entered resilient we unit on customers.

Let and The new the the System-wide highlights versus growth. me stores sales were driven billion, up XX% of net XXX sales the begin same-store XX% $X.X growth prior addition with of year. full by was year. both

complexity account increasing an our the the year was our gains, cost franchise share market the you reported increase revenue actions $X to vehicles, from of for benefit and to continue XX%. We for mix, inflation. pricing offset of retail of When billion,

expense perspective, the portfolio. mobile across continue to an site From expenses carefully manage we

the revenue growth. was year, In And improving drove fact, margin at prudent leverage above driven volumes expense points, as SG&A management, of shop, strong percentage together of XX% with company-operated four-wall XX% our basis sales XXX a on the largely for stores. by

adjusted Adjusted XX%, of an XX XX%. in of the year. margin the prior year, increase resulted EBITDA This ahead was million $XXX basis EBITDA points of for

those Pulling adjusted $X.XX, adjusted that week and together, of $XX adjusted which contributed XX% net $XXX in XX% revenue, up adjusted fiscal million EBITDA we respectively. XXXX $X of year-over-year, $X.XX and EPS million The to million delivered of income of results. were EPS and XXrd of

EPS and EBITDA in reconciliation find adjusted release. can adjusted You of today's income, net adjusted a

the in million generation the XXXX, we performance significant cash In continue year allowed to operations. strong cash flow in that delivered $XXX during resulted invest to business. Our from us of

portfolio, the generation on acquisition decreased flow absolute related expense XXXX. $XX and success the basis, capital quarter with our the cash one-time remains enough fuel plans and it to cash in fee paid AGN credit estate revolving million strategic our approximately strong than our first interest an to together facilities growth million primarily the in year, While year-over-year. us That prior to more due from generation, real higher provide $XX

priority return this in category. investing number billion one fragmented given the continues in Our $XXX be the strong business, profile highly to

with liquidity, X.Xx. of our notes credit continue comprised the exercised cash does include the certain leverage funding company's of cash $XXX and which and end revolving undrawn be $XXX of issued year In million million This of $XXX our ended in the net can million ratio the we At conditions quarter, million the met. capacity to year, fact, be equivalents on in additional not the was discretion, variable fourth of $XXX at assuming facility.

You can Relations net Investor find posted website. ratio our a leverage on reconciliation of our

up driven Now prior System-wide XX billion, double clicking the by sales sales year, million our growth growth. quarter XX% results. of fourth generated XX% up quarter versus $X.X revenue, we XX% of new the versus net which prior same-store year. was in on were System-wide $XXX stores and sales from addition

as we year XXX company-operated for the driven percentage items: stores. the an XX% And tax of From perspective, we prior was expense the drove receivable above shop, of SG&A by from revenue four-wall margin points XX% result $XX growth. first, partially at layering These filing two entered increasing to expense into were incremental items, leverage agreement million basis a to of that quarter, a equity-based true-up compensation which grant. IPO a on on returns; at of another the the grants as in adjustments outperformance our tax EBITDA, on annual million $X earlier and are offset based by XXXX our both of related second,

Adjusted of up to $XX million XXX the amortization EBITDA the was and year the points fourth the of in year. prior quarter from Adjusted company-operated stores. was XXXX. the was was versus million expense Depreciation from $X basis margin quarter, EBITDA million. increase This an $XXX for growth prior increase XX% attributable XX%,

from LIBOR a point debt XX This was XXX-basis our Car basis LIBOR an loan points, million levels point we term and of into three-month the Glass to expense plus businesses, $XX points a basis year XXX-basis Wash rate spread. Interest opportunities the increase was adjustment lean a floating our to primarily XXX prior Lube, across increased million. $XX of and mid-December debt versus Quick in initial plus of attributable XX-month as spread

quarter. allows change savings a us tax recognize NOLs can result forward a tax the we elevated our the optimize impact The effective tax to U.S., that of XX% rate cash the strategy. the as one-time in rate in providing was in quarter the change Our despite going in

For the respectively. net income XX% of adjusted of $XX $X.XX, were and fourth quarter, which delivered year-over-year, we up million EPS XX% and adjusted

quarter enhancements we've on And along year-over-year, Take ticket. count. of oil average results more increased positive from continues color while segment an driving marketing, XX%. passed our digital segments. bit to in Lube successfully driving Maintenance targeted mix fourth to X maintaining premium price Quick increases sales car retail The same-store Now a our posted by increase benefit

our in primarily of year-over-year to attachment result strong air expansion filters blades, Net X% and EBITDA cabin wiper mitigate incurred contributing adjusted margin Promoter while remained over coolant the is The Despite supply XX%, stable, increased XXXX oil The ticket. Score a repeat year-over-year. products as retail higher filters, rate rates ancillary the exchange, supply increases lapping of months, costs at air also such XX in past engine nearly average higher price to alternative shortages. have remained segment

Wash Car segment of same-store posted The sales XX%. negative

had rate the U.S., we movement to We the are impact Take negative continued approximately XXX prior the In the to as as XX% a under operating exchange outsized mentioned and points. of evolving are to outperforming Foreign rebranded, Jonathan standard. our end yet footprint the single year of be have year, an brand basis car wash which the versus of earlier. X business, banner roughly operating of

are rebrand the We track of rest XXXX. the the of to estate on fiscal by end

retail remained great focus Take a grow higher quarter, that but a to While We the customers drive this LTV versus from compelling. members Driven and stream important is retail be for of compounding proving sticky a customer The higher Xx also provides business, it Unlimited revenue Brands. washes predictability in level Unlimited now continued steady. total X is of mix this subscriptions again recurring an to effect shifts over we X XXX,XXX our This have to subscription retention not soft Take was and dollar is rate program. has only to and volume a

decline segment of primary year-over-year. retail was the Softer adjusted the margin traffic EBITDA driver

Collision XX%. positive Glass segment sales same-store Paint, posted and of The

the need of about a entering XX the increasing windshield the govern Assistance after the Advanced expansion to Driver excited in U.S. vehicle's the calibration our months associated repair camera with Glass offering for We of complexity is the glass market ago. safety significant just features. due that Systems are

As parts we customers increase, of and margins. tailwind our and expect ticket as both these commercial car grow the a see as proportion of mix features a to to

continues. recovery Collision the business the in Also,

industry In added consistently carriers grow, industry. fourth repair outpaced shops direct fact, programs insurance with XXX and to in the our the quarter. for the We estimate continue counts have

the Driven and one and a expanding differentiator to with partnerships of Brands. testament national for our commercial Our clear a provider are working scale strength is ease large

segment decline scaled year-over-year of result the build-out of new business support adjusted is the has business. Glass margin investing and growth. The in to our future This U.S. we're rapidly

that customers While commercial we as pressures calibration the margins increase to today, and expand of we expect margins the penetration of mix Glass services.

the of finally, segment same-store sales Platform Services X%. And posted positive

scale We leveraged are supply our and X-XXX-Radiator ensure the franchisees our in creating consistently for despite chain brand. to the disruption, customer have industry leadership loyalty long-term stock in

customers the continue acquired we the benefit disruption, from begun While we selling year-over-year prices a average as of to supply have result normalize. chain to

at ahead fiscal XXXX, remain Looking well we positioned.

consumer in based. Our allows versus comes the and economic volatility diverse X% approximately retail. and resilience the category executing in up changes miles for withstand that XXXX, its team to are is the in other our forecast and and were VMT customers This needs to proving X% us to grow Vehicle both well, We traveled with better is is commercial X%. categories for environment. and serve XXXX services any

growth proven continue a playbook we for sophistication and delivering as Our the competitive growth is across areas. navigate us And our key finally, provide environment. scale to our advantage

have to approximately and our a growth release which continued we in store strong we growth units. result X% XXXX, with is in expect deliver earnings $X.XX billion, by XXX XXXX net this of growth. momentum guidance. we the performance revenue driven X% As XXXX, sales This approximately issued morning, our fiscal same-store proudly XXXX of to and our In entered of organic

included not future have guidance. in our We M&A

expect is approximately EBITDA EBITDA stable of We adjusted at margin million. remain approximately $XXX XX%. to Adjusted expected

average $X.XX outstanding. based XXX EPS shares million on weighted expect we And adjusted approximately of

other your a update models, few will points. you data As be to helpful it have

annual equity-based grant we compensation approximately $XX to million be on post First, the IPO. is third expected layer expense as

million Second, we growth. store amortization expense depreciation of result $XXX as and a of anticipate new approximately

is result our as loan rate to revolving our approximately recent approximately of rate rate capital term our debt. adjustment is interest instrument term XX%. expected tax The debt And Third, loan expected our effective expense million $XXX only is to our and floating outside be finally, floating be a of rate credit of raise facilities. the

million We of expect flow XX% since to deliver $XXX from a CAGR cash approximately XXXX. operations,

partially million in expenditures are capital opportunistic organic That growth owned results by be selective our more sale our CapEx is as in Wash, new and in as real follow M&A. to Gross of expected open. playbook expected $XXX million. shifting locations growth CapEx primarily $XXX and tuck-in complemented offset by of Wash to approximately Car $XXX approximately our million to be net estate, leasebacks Glass focus for Car of we This

in And result, a the with XXXX. naturally adjusted As to any fiscal to add expect EBITDA, not deleverage. debt do we incremental expect we growth in projected

performance With the we same-store with low. about range and only high across the between the a how expect we sales regards quarters, X-point year range to fairly anticipate the of a unfold, to tight

to rebranding as of our We activity the the a EBITDA than margin in quarter, in our likely as of integration as rate of adjusted XXX be timing full U.S. points the Car Wash well business. lowest basis Glass year, lower the acquisitions result first the recent for expect rate

$XXX the $XXX EBITDA adjusted XX% over delivering million increase fiscal XXXX. milestone closing, at be end a from by least of path XXXX, In fiscal an to XXXX million on of the of will great

expect deliver results, We strong continue to market. this portfolio differentiated the to outperforming

are on scaled that formula with a proven diversified. and focused platform our We is

that generation is we business. margins. reinvest new simple. significant add cash same-store we stores, We deliver results sales, grow formula the and in we This in stable flow Our

like up call the we'd for open Operator, questions. to now

from Your line Gutman Instructions] comes first Morgan from the question [Operator Simeon of Stanley.

open. is line Your

any U.S. current for Wash. It question you like My why everyone. or like why the just talk And about first compares? been doesn't versus any they X share you -- of could rate about the And comp? looks if but improvement, the it it, anything about it they mass. critical run talk Curious better get if than comp morning, branded? the the on forecast Take thinking look is abroad? Car Can on should driving Good 'XX? have are you than haven't enough the reshape why you to then other probably And

the morning. and good question, for thanks Simeon, Hey,

start, on Let have and rebrand. I'll around Jonathan add color some then me the

So, obviously, segments. the we don't guide specific

So, there's no specific this for segment guidance morning XXXX. outlook in the

Car to give some though, regard With Wash I'll you commentary. qualitative

compelling, we I'd the about confident scripted continue remarks. you've First, say, we business as this view economics and to of Jonathan level his heard mentioned remain morning unit the in long-term trajectory. And this that

will I and continue expect softness at to lap say But Again, also And retail the significant the question. we to some see least outpace those would headwinds, that started half, Wash your qualitatively, pretty second we Car rebranded. to half. part was we the rebranded which through those have second we in continue exercise, completed not rebranding been have our of FX stores first

there? add additional to want anything you Jonathan,

this continues morning, Good incredibly business fantastic profile compelling. the run, the be is Simeon. over a Look, to long Yes. return and

any We well are doesn't higher expectations of which change positioning LTV. Take the pressures of a We're environment, our Quick target has this convenient, has for long-term very, And very and returns. friendly fast, short-term business X customers there's with while our value growing that with proposition some our in Lube subscription, resonated Xx business. macro which in a

Brands but all results Driven other have across to enables not consolidated phenomenal look, businesses us industry, firing that things of at deliver I'd still a the great is thing diversified is, possibly portfolio Driven add, our level. So, at and Simeon needs-based all about one the cylinders, the

And then, a Okay. follow-up...

just maybe Simeon, last point there. one

You asked about the rebrand.

end of that was into at QX portion while rebranded there of that fleet activity in other XX% have The is share thing significant late there the we of and year, our the a I'd happened QX.

at start the we're yield line year, XX% of that the at when see we'll to end but from we over the So, the snap XXXX.

one And Maintenance follow-up that. on for the comp. then, Thanks

I XX% X. think Take Jonathan the mentioned in

Is a that there's in it business insight used the the drive side Is break the the don't occurred I call out, I at could you probably it, next how And in? to look you at -- it what don't Any If it over know that it the years. couple know the but of over the that much inning top? XX abating? of benefit into Is cycle? what Maintenance you that from the last XX other could would wave months? car, be business,

new incredibly Yes. and Driven. availability we last and seen car prices of and that north Cars environment Simeon, car new car average for is the years. a think tailwind of Used -- for sort Look, XX used you've the have XX is years. natural challenging. grow prices now age are

think that Middle a I recently given there's a vehicle, the of stat literally priced new sort out of America is cost.

products which their them customers mileage holding and longer of we more those sort So, see repair as high vehicles older vehicles premium on oil. naturally such to drives into incremental and and maintenance

a as net future. the this we for foreseeable tailwind So, see

luck. Take care. Thanks. Good

Seth line Your Barclays. question the Sigman next from comes of from

is Your line open.

to on to Nice the everybody. quarter. congrats you talk Hey, guys, and

wanted just I first. outlook comp to So, on touch the

long-term some lines? targets And which across to just the think discuss tight. on maybe the you So, specifically around imply quarter comps, Can to X% comment X% that the being business comment every very around there's cadence, X%. that range was strong. last comment the you're seems is But you've to X% had. into It that guiding also assumptions of still then QX momentum I a above

an You just XX% did comp.

reconcile just you. trying little bit, a that too. to Thank So

Hey, for question, your sentiment Seth, appreciate I morning. this and the thanks

planned but half which XXXX. see for in the modest, particularly with it XXXX. start first We'll of just see points qualitative of be backdrop there. we've Couple inflation to course will macro-related the continue with to pressure the over the VMT first macro me continued moderate grow forecast let to will consumer, more inflation, is We certainly will there the So, but X%. a think we X% on of year,

to solid sales X% X% same-store growth to we've rate, healthy net adjusted So, store guided XX% plus a and growth. EBITDA

So obviously, a to execute industry. well in continue what is going we're to we needs-based believe

performance a sales this so the in high you're about right, To about my across tight only cadence, fairly the the comments the script point between range same-store around and morning, low. X% the quarters. And range

all over the the mentioned just tight course the it's So, in for year I macro of backdrop. the reasons

I Car Wash on already. think we've touched

benefit a consumers I mix think, premium industry that of well rest continue to throughout the we the recommendations tailwinds over the long part OE run. our for from as as segment natural is of oil

specific EBITDA that you Thank with around just pretty that. back? been question mix And historically. what's X% a one to be X% anything cost But should follow-up stronger dynamic? which Is for Like, curious, the is that? Are over flow-through around there on guidance about the pulled embedded consistent is in you've that there guidance Okay. business that how the we comp, I'm where thinking XX%, margins just pressures? just

Yes, that's great.

let in me stable put Our and of margin is right? XXXX about same reflects, XX%, our into perspective, already a at guidance strong XX% XX%. again, EBITDA at it increase margin first very So, that dollars

we've challenges margin disruption year macro like we Now, and supply each expanded significant public, went even with since chain inflation.

suggest on than also remember overall Glass the that lapped average is acquisition of AGN six portfolio I'd months you anniversary our and less our we old.

that integrating we're So, business. still

margins. calibration the which we're last again number like be you going the have margins in to just run, the over tailwind the of and U.S. they to to U.S. XXXX, increasing of of mix are over commercial a years. And expect Glass, be customers Glass penetration exclude specifically, If expanding long once we services

healthy this a that really, business bit business, about the great So, is really of continues a it mix to well. the is perform but

you that. all for great. Okay, Thank

of question Christopher next J.P. Morgan. from line from Horvers the comes Your

Your line is open.

and Thanks, morning. good

over M&A acquired you then, totality, can during is simply us the the is, how in And question of about fourth in carry EBITDA first how help EBITDA much in my think XXXX? from XXXX much So, was quarter?

Sure, Chris. morning. Good

So, in XXXX I'm speak to total. to going

we EBITDA So, $XX net course million AGN we of the of acquired and did both recognized that the acquisitions the from of of year. That's the as well about transaction SLB. of inclusive as tuck-in, rest the Glass over it's the

$XXX I if from this was EBITDA is, of million one, to so you -- remove print think, important million. you $XXX $XXX the highlight versus organic really If our M&A million, adjusted our original guide call on that point of EBITDA

account course, course, of XXXX, we've, of to some just taken that performing in is of your and business EBITDA, our will again, into that then, And point, So lap tremendously. guidance. into

store of are across can But there? across including longer I the term, you mentioned is then, affect units that what these stores extent what much longer you Wash -- out all-new the you segments? view more unit does Car Are opens? about Jonathan, seeing add you then, and business. sort how pretty the things how up many you're your talk could Wash type guess, opportunities over down of Car this segment, And calming growth And broadly, And brownfield to locations? all Understood. it stepping side. every on

develop have Yes, pipeline greenfield thanks. good morning, Chris, and of Look, that the to required competencies on there's across core company our set we really franchise businesses. pipeline, and the skills a both today

over about over is units, Wash we XXX pipeline of rate secured X,XXX Our mentioned site and better for a XX%. at with Car a

for next we the company this amazing continuing decade. new and and stores both greenfield, So, see franchise deliver grow to

stores degree those And high these teams the stores coming truly up really online. are then opening building our optimism of where new and got and real are finding around those greenfield estate, units. So, we're we've stores

So expands that the expand. reason unit And so that just attractive. underlying are because continues level economics the to is

one. that's number So

terms overall XX,XXX Driven Chris, in to time we've ever over the feel space, to two, Number time, against time. we get around and about plan ability as of for as the bullish over talked units, execute that ability to white over

unit So growth. that's what I'd say about

I X% it's side? year. more opportunistic the year standard? Is is new this And of of organic this then, is quick this a -- think an just sort as this -- on rate a of sort follow-up, this Or

Look, without pipeline. builds incredible this we can't an this No. who deliver team again,

sort build, rate this pipeline the that of would growth the expect sort would unit minimally be new to continues over of as hopefully of time. we and So, standard expand

Excellent. Thanks so much.

Your from Karen Suisse. Short next from of question the comes line Credit

open. is line Your

then you Hi. I'm couple a clarify 'XX? exactly or what it was things. think in just -- you Thanks very exactly And will what of rate the interests inflation be wondering the much. Can for XQ? sorry,

Hi, Karen, good morning.

year moderate. terms low certainly to we last my in expect macro we've environment inflation to we've to of XX start I seen in that as seen months, said commentary, the So, the over a double-digit rate. what inflationary in And

in still single-digit but XXXX, expect in range. the something we inflation, So, obviously,

maybe for because, that Obviously, prospects Okay. outlook And your a guide levered context about of in higher triangulating in then has leverage changed just on the maybe M&A. But your the front, terms M&A. to you and appetite appetite little terms talk of but just of color for don't M&A scenario including also anything, in little this obviously, a companies. bit

just maybe little a that. wondering So, bit talk you about could if

and with We're to Glass that done has the for is Glass. part we Look, Hi, M&A the the use now grow Driven. And continue with and Driven M&A we'll expect greenfield phenomenal to environment platforms Lube, to growth. been Car of Quick M&A that at M&A our Lube. of levers to Jonathan with we've Karen. with sort our we decade, our the start an as all migrate one Wash, our last it then our important Wash That team, Car said, opportunities ultimately here. and and of our more and Sure. cross We've do business, at story M&A Quick to desks businesses. look at to build doing here that we have being a outlined continue

definitely I debt in of M&A seeing specifically frothy velocity around area Car years. markets, after happening Wash the sort some some moderation auto for and in that most the of terms And In levels. XXXX, last the busy definitely in there. see we've given some services I changing both That of seen macro we're the the in price couple of moderation and what's think conditions was space. don't in

States. the again, mentioned in that United has really number both from of tuck-in second small a then, And and growth XXXX, been greenfield out franchise growth moving of scripted but job Lube Glass, a did and in company growth, greenfield last continue acquisitions towards story our as proven Quick building remarks, years. for playbook do player we becoming to zero some in platform phenomenal my in we'll largest the the Glass, to

how we So that's think about M&A.

And just appetite on leverage -- update?

that Yes. one. Karen, happy to take

think growth laid Jonathan vertical shifting as predominantly sort from of you So, playbook into the M&A vertical about and out our by M&A, greenfield. for plan,

strategy. and we we're generates that flow, you of course, that operating a deploying, in we've 'XX generating the deploying are And really healthy $XXX returns. And $XXX growth fiscal million. as we're remain excess with capital to long-term just XX% of guided obviously, million business So expectation of know, of net assets in our cash our into committed CapEx cash flow

plans below more the for and to XXXX. to don't projecting have naturally markets we ended at EBITDA We expect point. we our that deleverage capital financing. that than go incremental expect year growth levered growth back our debt We to So, the fund to with we're capital XXXX, enough in X.Xx in for

Thanks much. very Great.

next Your Suzuki of America. from the line Liz comes of question from Bank

open. is line Your

Great. Thank you.

network benefits share about of Just talked you wallet. unlocking the and

tell convert do about stats to just about And percentage one the visit a then, your for any that learnings multichannel also car early more year, you cobranding like wash of the into Take the than have car in do So, Meineke you of as those customers opportunity given did your brands to customers X of what wash customers go service? customers? in

talked sort what the at reveal big Hey, in We've a Analyst ultimately about the aspirations few super we're it call. our of look, do Jonathan on We'll But Thanks May. up is for and excited our download a question. following. about are Liz, opportunity. this Liz, Day times coming And here. the

to the brands all of understand customers. the customer or that if to services we operate offer various will the, Brands' to Driven comes any Any mothership connected or through services you that our like, be

services really provided one. sure there's are that the Driven that's a It's suite business under motive that aftermarket of Brands So, umbrella. with who does anyone number us making understands auto

that XXXX The like could we're and excited beyond. in Driven to and level, second is and at loyalty look lean into a rewards about what

to incremental a for of our services the the and there think opportunity to in we of any customer of come take rest of any advantage brands So, massive sort through is our network. understand

we're in is something lot Analyst that in more we'll Day about, detail excited super about our at a So and talk May.

hearing look to Great. forward Yes. that. I

year-after-year. thinking Just evolution a Brands time and quick you've into over follow-up, kind expanded of Driven about the what of

other more opportunity or you like is for could the you wash medium-term car replacement, potentially customers than a clearly, oil interact about your to which how frequency mean touch I increasing Just you areas charging increase see more like expand Driven services high-frequency service other think that into collision. points? with change like frequent do do But with an services tire or EV Brands?

always about services incremental categories. potentially our add we're whether I service that's value Liz, customers, how question. new great or thinking we would big our question, And what is say can more businesses existing to that with

of So, Last a Driven business. sort space. if X.X entered Brands, the at which glass wash the is entered the last we car years look phenomenal you we of space, year,

landscape is going right within continue we're strategically, obvious will in about and changing of that customers we But there think of forward. last in, markets both aftermarket So, that look large about we the automotive and the think to that proven at Driven have whether addressable the not terms X.X sort think years fit within for that's the aftermarket I service. automotive

Great. you. Thank

of the Stifel. comes from line from next Chris O'Cull Your question

is line Your open.

full originally M&A. least is EBITDA your Patrick you in I million that the opportunities Chris. you look forward? where target based are where the underlying are? and then target you the Thanks, believe based on year from what Great. for still just But to the you is strength today -- This that Jonathan, changed frame as in $XXX indicated growth a up that million $XXX would the right $XXX that run rate on a number? acquired as Or follow-up on see today morning. come on guys. maybe far, so you million that basis at mix And you've can Good question, you where relative know has earlier that you given to organic

XXXX you over model of year of the after we will I the into that or our a convert Thanks, of the legacy million years, acquisition. roll model XX% that sort one sort it and acquire of then tell then organic EBITDA, at growth growing year of rate business sort in you five acquired Good EBITDA shared of individual November would is any morning. shows What on $XXX we Patrick. Yes. that should

to good your So models. still that number is cumulative million $XXX in use a number

towards already that As $XXX $XXX-plus EBITDA years of extremely million. minimally like of target another could million we but by sort assume I Very always of importantly, of end M&A, that has over in a build million think beat the Driven that Patrick, over safe about of to said, in XXXX, $XXX are the we end to meet, And to four $XXX we've story. there typically ability acquired of beat, as be the million next included it's XXXX. to little our three, we're plan the the in confident which

could you Wash. car to car of and Lube there. you know wash you're But counts actually bit you That's would in is I new car past them. between what the sites update presuming in Quick were mentioned you're Take X units frequent Quick the it's little seen counts several up some And more these the that if tests, helpful. Lube I up side mean, testing seeing then, And locations? X higher an ramp you've Take Car just guys co-located as aging a of that and next the just I'm if have And of on that help those and thesis Great. that curious located ramp if out pan provide with

XX Yes. of And I in stores think Good these about to XXXX. XX question, opened Patrick. primarily we've

of on year, you'll that, make underwriting businesses we're brand, which locations those under locations And North ultimately, in X,XXX from location. of of name. thesis real and will enable to one obviously, great which end brand Take co-developed sure is Patrick, estate to other. one with capitalize synergies cross have, X we're those with the and the Take the customers this both in businesses trade will operate with very of the, getting mentioned, that along those X part meeting to branding, of a which construction America, the efficient two is and the customers I to cross-promote on us shifting moving and at about of happy two with between strategy, sort the then So, as assets broader use that see That terms those

of we're have this bigger to Take XX I branding very that say So, is it pleased X would with XX really opened, but sort strategy. of stores the part

guys. Thanks Great.

question comes Zackfia next Blair. line Sharon the of from Your William from

line open. Your is

curious just out, opportunity morning. this, commercial I that be if was the about so think do How in good My material over I really but time? Hi, apologize asked Glass. could phone cut someone you

that of expect then, there bandwidth we roll know segment, those are how any just color secondarily, And I any off particularly on But for Tiffany, said segment you processes comps. -- might X inflation should thought this overall you within comps, -- some points think segments? of Thanks. for as about

in levers Good in And of understand business, this. I morning, Sharon, as I'll opportunity commercial the it's to sort take the first think the Glass. part, important which nice There's multiple opportunities. really see is which Glass we

we're in and add ticket. a today. will and Tiffany seeing the is That ticket, we grow, is expansion services portfolio we today. growth to going repair that talked glass within first calibration that typically margin calibration replacement calibration for When to see need about within that The our

So that calibration feels the on good side. really

retail three which of there's us. here, would point In an terms our of of the customer for opportunity, customers, layers what call Sharon. customers, customers BXC regular anchor really, I is is One sort

The commercial. our second is

believe into some about insurance that or relationships those the XXXX, we've space. of that starting capture as end think rolling collision large you our national we'll local to we're if to of in right So, Such then, within be by fleet into had. position now. we've lean customers sort And as insurance great well partnerships a customers, XXXX, of said, we

a customers. and on term BXC long -- all heavily fleet, right space. into national We've of insurance flow local sort insurance then of and calibration it's sort focused really, through now, will So, that

going of years. incredibly excited about the with happen So, what's Glass over next to couple

X-point with we, well question, sales fairly reiterate And range a high quarters as to sales what Sharon, to expect around low. this is the only your With remarks, as same-store between tight Tiffany. we and so same-store is regard across scripted range both my again, cadence about just the performance the expectations, segment

to you So, guided in be to X%, range. to that X% quarter if we've can expect every

into perspective, don't about half we that we're an suggested question we in retail guide while from get thinking significant getting and we business in as also the the half, be segments, well Car further pressure Wash a and I end that year. fully then lap first earlier -- rebranded we specific into as the in as rebranding the second that our qualitatively, of start continues softness to by to FX

picks the go year. think through steam we we Wash Car So, up as

We navigating in low Again, the to last high that to point, it think, to starts it's particularly in think rate we maintenance less in I was moderate XX inflation, of the around of inflation with And then, double-digit were that question XX your dealing inflation. a think inflation ticket, to moderate, moderate. months. Obviously, about as last double-digit instead inflation. we tailwind segment starts that as

And qualitative I so the factor about you give other that's quarters. you, the as think

you. Thank

question comes the of from next Your Peter Piper line Sandler. Keith from

open. is line Your

morning. same of turned a gets Take that the sales up has segment around turned on marketing Jonathan. same-store Driven ecosystem thanks, X. seeing of wrapping year Hey, engine XXXX comp think with bit good on XXXX seen to this the kind as maybe Car Should for marketing as Car when of The nice potentially you've benefit? Wash we engine. on the Day a the and really acceleration some of to and Wash Congrats Maintenance the Analyst on nice the preview year. Pivoting rebranding is a It's and of

is sure any overall market that about, of we Brands sort One commercialization with service Driven I is be it's portfolio. Yes, in focus multi-layered do business for make with talked continuous I sort Peter, the of offering And but our of coming to the in a XXXX. the that that's answer space customers approach. will understand a like all a brands look, within that us, to think

we And and those cross-promoting, top like customers then, So services rewards layer those sustainable makes cross-branding that a at it on long-term then Driven loyalty number are of level. what the looks that, to that's sure one. and program

So, excited about things. I think we're those pretty

we're activities. think of it multiyear talking look, Peter, a So, will mark will journey, these commercialization about the year XXXX be where but I

Car do pushback overall? it the we really don't Wash or that much I segment, give on performing feedback we One Could think have still some of but non-FX or Wash. how That's on I'll Okay. Maybe can get of the been European stick Europe piece segment. good of you overall checks Car is us U.S. the on visibility on Great. below above Is on comp? has color two-thirds business, Europe.

Tracy is business magnificent a that lives since Europe European job fabulous we've and in our run Gehlan, owned who So, executive, has X.X done about business a over by for years.

some trajectory out take you We've Peter, FX, in with If think I capital very business. the of deployed we're pleased that there. the

we've rebrandings have team Tracy countries across So, we digital footprint remodels European her sort in expanded Europe. brand extensive the And XX one over the have there. business. and in the -- and done digital of

war from that's going challenging, in inflationary of horrible that there. think the to So, perspective, of sort last is the factor that on over I you thing environment has to other sort the macro the European have year been not mention both a

incredibly how under business for we So, pleased with prospects remain long-term Tracy excited pretty and team. her our business performed about that has and the

Okay. luck. Thank Good you very much.

comes question next from Benchmark. Your of from Lawrence line John the

is line Your open.

you procurement how a a no the having that jump. about today, -- the please? Could speak to morning. to business. say have from about bit talk do Good XXX,XXX a And quite product and is you to of not talk Could I expansion, this little the base you in for about that was often you expansion? categories the Thanks talked little questions. XX,XXX moving bit interested SKU

platform. for Driven more it One businesses make the is things, and trying they Brands an to John, them of franchisees products run Procurement the our make services Yes, to that couple the a buy we're effectively. profitable question. need and thanks unsung easy their to is, John. hero for Ultimately, within achieve

Driven providing second The Driven for Driven our sure that system. lever efforts make that known to provide there Advantage, is platform that getting shopping paid its is is, to this as as to one-stop broader

of sure franchise to on with relationships best they're basis weekly sure giving terms is have great thirdly stores. our company vendors levels our service make vendor to the conditions both to then, all continued that and we and that a us and make working and we're And

tests marketplace we've franchisees marketplace that in connectivity over of our to this years sort in So, and we have the is with It last our where world-class now is that. all vendors and invested access a test. X.X of have full obviously,

new the had older enabled is movement the So, we've SKUs that from that investments XX,XXX new technology SKUs XXX,XXX partly made. the platform an to by

next for we So our for about stores, profitability franchise again, we three creating feel ultimately look with really procurement the the five sort Driven, ahead for of capturing good vendors opportunity years. as our incremental to and to

quickly Yes. you had we when that, of And would just be type XXX,XXX, talking north that get on what of products the tail products what of that at on are end haven't about kind you before? that of

Yes.

I business. our sort if items paints or filters, core of you any we've of that's our ancillary business, or got, think, products whether think look, about or within oil obviously, the

we think it, I'll of, service as and probably need into over sundries stores I the move -- company have services their the franchisees I'd to supplies the capturing time, of we'll businesses the ability run sort then franchisees XXX,XXX And use. the what XX% if -- office use But You like, we're today, of then, our to XX% SKU call that well. you with add and potential effectively. that say have count some to our franchisees

Great. Thanks. Good luck.

from line the Justin comes question last of Kleber your And from Baird.

line Your open. is

the everyone. the rebranded it more it board an Thanks ticket, car like to wash Hey, brand uplift Is Wanted up ask as success leverage counts driving as X in it question. customers a washes? you the dollar car taking I menu higher what's in morning, of to the more equity? and Take is you're having good you're trading increase sounds Or function about assume for the locations? about optimizing

any point-of-sale Yes, whether Justin, rebranding We've the to got putting that but stores. CapEx equipment all and deferred not got I on signage also of systems important stores it's technology new We've we've it, merchandising. those it's new team maintenance the this think just upgrades. that incremental camera stores We've or better had. We've we is got included, understand got in a that included uniforms. technology

goes one these So, of feels really big when that a stores, customer a store. rebranded remodel to to like it

that's one. So number

converting XXX,XXX Take the wash what the is growth job two we team Number Unlimited members retail customers now by X Wash evidenced into at Club to is, subscription a terrific call doing over car members. as

I to those menu construct think the board other stores. pricing is on thing that we're and continuing at work

offering sort our better, right good, best to at customers right price the got we've that sure making the of So, point.

think combination I it's -- a have who to may traffic and not in gone and really for post may the whole terms of of So, rebranding. both the experience and who pre have check new our a store customers

a in your to it. the the to color. M&A seeing within of Got rationalize that the entrants That's guess just also if pullback of I you helpful environment? from a I'd I peers. just be comment related pace any mean, larger in you're your curious greenfield Wash new some mentioned And development beginning space. Jonathan, into remarks environment Car was follow-up, current that then

Yes.

that the effect are were being in definitely getting seeing very both. and completed. that just is, not have were some think and we're multiples in that processes One Justin, moderated sort it's lofty of I XXXX -- XXXX

So the about of buyers think pace moderation then the flipping in the I greenfield you that's stores and And stores, a years, to M&A we're this those market seeing of think activity. front. sort last there's had on for over building when then, lot and two three of you because people no

their some of businesses, on for built. the put double that sort some you secondly, new of levels we're these the seeing into stores ability store of in the moderation rationalizing. when about growth. hit. is, being handicapping is multiples Again, think One I of entrants some So, new are to think and capital were leverage And incremental that multiples seeing a new amount these paid we're

So greenfield again, multiple and pace moderation.

All Thank you. Best right. of luck.

And remarks. to this final Jonathan ends call you Fitzpatrick, for turn our the session. over closing Mr. back I question-and-answer some

Thank thank all joining and today. you, for and you us for time your

entering a to resilient diversified strong and the growth year competitive category, momentum tangible Driven advantages. and profitability Brands powered deliver a with in by continues platform

executing. and gains share performance proven in shareholder our remain delivering enhance dynamic a in playbooks leveraging growth is for our deliver value. We're profitable record environment, ability growth. team long-term Our We confident and to

if be after Investor available the Relations And as will Kristy has call anyone Thank with always, questions. you. any further

Thank call. conference your participation. today's for concludes This you

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