Driven Brands Holdings Inc. Reports Third Quarter 2025 Results
4 november, 13:15
Driven Brands Holdings Inc. (NASDAQ: DRVN) (“Driven Brands” or the “Company”) today reported financial results for the third quarter ending September 27, 2025.
For the third quarter, Driven Brands delivered revenue of $535.7 million, an increase of 6.6% versus the prior year. System-wide sales increased 4.7% to $1.6 billion, driven by a 2.8% increase in same store sales and 3.5% increase in store count versus the prior year.
Net income from continuing operations was $60.9 million or $0.37 per diluted share versus a net loss from continuing operations of $11.5 million or $(0.07) per diluted share in the prior year. Adjusted Net Income1 was $56.2 million or $0.34 per diluted share versus $38.1 million or $0.23 per diluted share in the prior year. Adjusted EBITDA1 was $136.3 million, an increase of $4.3 million versus the prior year.
“Driven Brands delivered another strong quarter, highlighted by continued growth in our Take 5 business,” said Danny Rivera, President and Chief Executive Officer. “Same store sales increased for the 19th consecutive quarter, with high single-digit growth in Take 5 driving solid gains in revenue, adjusted EBITDA and adjusted earnings per share.”
“As we look to the balance of the year, our narrowed fiscal 2025 outlook reflects continued execution of our Growth and Cash strategy - with expansion from Take 5 Oil Change, reliable cash generation from our franchise and car wash segments, and ongoing progress reducing leverage. While the consumer environment remains dynamic, our resilient, needs-based model and disciplined focus on execution position us well to continue delivering long-term shareholder value,” Rivera concluded.
Third Quarter 2025 Key Performance Indicators by Segment
System-wide Sales | Store Count | Same Store | Revenue | Adjusted EBITDA | ||||||
Take 5 | $ | 411.6 | 1,282 | 6.8 | % | $ | 306.4 | $ | 107.3 | |
Franchise Brands | 1,091.6 | 2,676 | 0.7 | % | 75.3 | 49.7 | ||||
Car Wash | 51.4 | 717 | 3.9 | % | 54.1 | 15.0 | ||||
Corporate and Other | 70.8 | 213 | N/A | 99.9 | (35.8 | ) | ||||
Total | $ | 1,625.4 | 4,888 | 2.8 | % | $ | 535.7 | $ | 136.3 |
Note: Certain columns may not add due to rounding.
Capital and Liquidity
The Company ended the third quarter with a net leverage ratio of 3.8x Adjusted EBITDA and total liquidity of $755.7 million consisting of $162.0 million in cash and cash equivalents and $593.7 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.
Seller Note Divestiture and Debt Refinancing
As disclosed previously, on July 25, 2025, Driven Brands divested the seller note received in connection with the sale of the former U.S. car wash business for $113.0 million in cash proceeds. Net proceeds were used to pay off all outstanding term loan principal as well as $65.0 million of the drawn balance on its revolving credit facility.
On October 20, 2025, as previously disclosed, the Company completed an offering by certain of its subsidiaries for $500 million of Series 2025 Class A-2 senior notes maturing in October 2055, with an anticipated repayment date in October 2030. Proceeds from the notes, combined with funding from the Company’s revolving credit facility, were primarily used to repay the Company’s 2019-1 and 2022-1 Fixed Rate Senior Secured Notes.
Fiscal Year 2025 Outlook
The Company narrowed its financial outlook for fiscal year ending December 27, 2025, as follows:
2025 Outlook | |
Revenue | ~$2.10 - $2.12 billion |
Adjusted EBITDA1 | ~$525 - $535 million |
Adjusted Diluted EPS1 | ~$1.23 - $1.28 |
The Company now expects same store sales growth at the low end of its original range of 1% to 3%; and continues to expect net store growth of approximately 175 to 200.
Note: 2025 Outlook excludes the impact of any potential M&A and divestitures other than the completed sale of the U.S. car wash business.
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 Corporate and Other as it is a non-reportable segment. The same store sales results for any applicable businesses within Corporate and Other are included in the Company’s overall same store sales results. |
Conference Call
Driven Brands will host a conference call to discuss third quarter 2025 results today, Tuesday, November 4, 2025, 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 services, 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®, Meineke Car Care Centers®, Maaco®, 1-800-Radiator & A/C®, Auto Glass Now®, and CARSTAR®. Driven Brands has approximately 4,900 locations across the United States and 13 other countries, and services tens of millions of vehicles annually. Driven Brands’ network generates approximately $2.1 billion in annual revenue from approximately $6.3 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) potential post-closing obligations and liabilities relating to the sale of our U.S. car wash business; (ii) the current geopolitical environment, including the impact, both direct and indirect, of government actions, such as proposed and enacted tariffs and governmental shutdowns; (iii) our strategy, outlook, and growth prospects; (iv) our operational and financial targets and dividend policy; (v) general economic trends and trends in the industry and markets; (vi) the risks and costs associated with the integration of, and or ability to integrate, our stores and business units successfully; (vii) the proper application of generally accepted accounting principles, which are highly complex and involve many subjective assumptions, estimates, and judgments; and (viii) 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 28, 2024 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 27, | September 28, | September 27, | September 28, | |||||||||||
Net revenue: | |||||||||||||||
Franchise royalties and fees | $ | 50,824 | $ | 49,475 | $ | 144,714 | $ | 144,549 | |||||||
Company-operated store sales | 331,259 | 298,798 | 978,670 | 884,944 | |||||||||||
Independently-operated store sales | 51,410 | 49,959 | 189,841 | 163,286 | |||||||||||
Advertising contributions | 27,883 | 26,823 | 80,249 | 75,804 | |||||||||||
Supply and other revenue | 74,308 | 77,284 | 209,361 | 234,544 | |||||||||||
Total net revenue | 535,684 | 502,339 | 1,602,835 | 1,503,127 | |||||||||||
Operating Expenses: | |||||||||||||||
Company-operated store expenses | 193,129 | 177,510 | 565,391 | 525,529 | |||||||||||
Independently-operated store expenses | 30,178 | 29,382 | 104,713 | 90,693 | |||||||||||
Advertising expenses | 27,884 | 26,823 | 80,249 | 75,804 | |||||||||||
Supply and other expenses | 42,552 | 35,779 | 116,939 | 112,531 | |||||||||||
Selling, general, and administrative expenses | 145,177 | 149,789 | 471,347 | 393,418 | |||||||||||
Depreciation and amortization | 34,828 | 33,418 | 102,883 | 97,358 | |||||||||||
Total operating expenses | 473,748 | 452,701 | 1,441,522 | 1,295,333 | |||||||||||
Operating income | 61,936 | 49,638 | 161,313 | 207,794 | |||||||||||
Other expenses, net: | |||||||||||||||
Interest expense, net | 23,603 | 43,674 | 91,496 | 119,241 | |||||||||||
Foreign currency transaction (gain) loss, net | (5,419 | ) | 765 | (17,406 | ) | 5,767 | |||||||||
Loss on debt extinguishment | 4,549 | 205 | 4,549 | 205 | |||||||||||
Other expenses, net | 22,733 | 44,644 | 78,639 | 125,213 | |||||||||||
Income before taxes from continuing operations | 39,203 | 4,994 | 82,674 | 82,581 | |||||||||||
Income tax (benefit) expense | (21,659 | ) | 16,474 | (7,487 | ) | 45,292 | |||||||||
Net income (loss) from continuing operations | $ | 60,862 | $ | (11,480 | ) | $ | 90,161 | $ | 37,289 | ||||||
Gain on sale of discontinued operations, net of tax | — | — | 37,367 | — | |||||||||||
Net loss from discontinued operations, net of tax | — | (3,467 | ) | (13,596 | ) | (17,816 | ) | ||||||||
Net income (loss) | $ | 60,862 | $ | (14,947 | ) | $ | 113,932 | $ | 19,473 | ||||||
Basic earnings (loss) per share: | |||||||||||||||
Continuing Operations | $ | 0.37 | $ | (0.07 | ) | $ | 0.55 | $ | 0.23 | ||||||
Discontinued Operations | — | (0.02 | ) | 0.14 | (0.11 | ) | |||||||||
Net basic earnings (loss) per share | $ | 0.37 | $ | (0.09 | ) | $ | 0.69 | $ | 0.12 | ||||||
Diluted earnings (loss) per share: | |||||||||||||||
Continuing Operations | $ | 0.37 | $ | (0.07 | ) | $ | 0.55 | $ | 0.23 | ||||||
Discontinued Operations | — | (0.02 | ) | 0.14 | (0.11 | ) | |||||||||
Net diluted earnings (loss) per share | $ | 0.37 | $ | (0.09 | ) | $ | 0.69 | $ | 0.12 | ||||||
Weighted average shares outstanding | |||||||||||||||
Basic | 163,900 | 159,804 | 162,434 | 159,743 | |||||||||||
Diluted | 165,124 | 159,804 | 163,686 | 160,713 |
DRIVEN BRANDS HOLDINGS INC. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS (UNAUDITED) | |||||||
(in thousands, except share and per share amounts) | September 27, 2025 | December 28, 2024 | |||||
Assets | |||||||
Current assets: | |||||||
Cash and cash equivalents | $ | 162,028 | $ | 149,573 | |||
Restricted cash | 335 | 358 | |||||
Accounts and notes receivable, net | 188,208 | 177,654 | |||||
Inventory | 65,195 | 66,539 | |||||
Prepaid and other assets | 35,178 | 37,841 | |||||
Income tax receivable | 16,025 | 14,294 | |||||
Advertising fund assets, restricted | 63,617 | 49,716 | |||||
Assets held for sale | 54,540 | 77,616 | |||||
Current assets of discontinued operations | — | 83,847 | |||||
Total current assets | 585,126 | 657,438 | |||||
Other assets | 120,802 | 125,422 | |||||
Property and equipment, net | 758,874 | 711,505 | |||||
Operating lease right-of-use assets | 570,213 | 524,442 | |||||
Deferred commissions | 7,589 | 7,246 | |||||
Intangibles, net | 655,792 | 665,896 | |||||
Goodwill | 1,445,383 | 1,403,056 | |||||
Deferred tax assets | 9,151 | 8,206 | |||||
Non-current assets of discontinued operations | — | 1,158,576 | |||||
Total assets | $ | 4,152,930 | $ | 5,261,787 | |||
Liabilities and shareholders' equity | |||||||
Current liabilities: | |||||||
Accounts payable | $ | 89,355 | $ | 85,843 | |||
Accrued expenses and other liabilities | 226,515 | 193,638 | |||||
Income tax payable | 13,190 | 6,860 | |||||
Current portion of long-term debt | 277,770 | 32,232 | |||||
Income tax receivable liability | 22,674 | 22,676 | |||||
Advertising fund liabilities | 18,644 | 22,030 | |||||
Current liabilities of discontinued operations | — | 70,616 | |||||
Total current liabilities | 648,148 | 433,895 | |||||
Long-term debt | 1,936,610 | 2,656,308 | |||||
Deferred tax liabilities | 72,249 | 87,485 | |||||
Operating lease liabilities | 541,110 | 491,282 | |||||
Income tax receivable liability | 110,907 | 110,935 | |||||
Deferred revenue | 29,641 | 31,314 | |||||
Long-term accrued expenses and other liabilities | 20,775 | 20,122 | |||||
Non-current liabilities of discontinued operations | — | 823,112 | |||||
Total liabilities | 3,359,440 | 4,654,453 | |||||
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 164,454,218 and 163,842,248 shares outstanding; respectively | 1,645 | 1,638 | |||||
Additional paid-in capital | 1,725,174 | 1,699,851 | |||||
Accumulated deficit | (888,651 | ) | (1,002,583 | ) | |||
Accumulated other comprehensive loss | (44,678 | ) | (91,572 | ) | |||
Total shareholders’ equity | 793,490 | 607,334 | |||||
Total liabilities and shareholders' equity | $ | 4,152,930 | $ | 5,261,787 |
DRIVEN BRANDS HOLDINGS INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) | |||||||
Nine Months Ended | |||||||
(in thousands) | September 27, | September 28, | |||||
Net income | $ | 113,932 | $ | 19,473 | |||
Adjustments to reconcile net income to net cash provided by operating activities: | |||||||
Depreciation and amortization | 105,109 | 131,219 | |||||
Share-based compensation expense | 28,269 | 35,641 | |||||
(Gain) loss on foreign denominated transactions | (21,560 | ) | 8,744 | ||||
Loss (gain) on foreign currency derivatives | 4,154 | (2,977 | ) | ||||
(Gain) loss on sale and disposal of businesses, fixed assets, and sale leaseback transactions | (21,560 | ) | 32,998 | ||||
Loss on fair value of Seller Note | 17,000 | — | |||||
Reclassification of interest rate hedge to income | (5,980 | ) | (1,560 | ) | |||
Bad debt expense | 13,275 | 5,759 | |||||
Asset impairment charges and lease terminations | 19,747 | 15,008 | |||||
Amortization of deferred financing costs and bond discounts | 7,441 | 7,240 | |||||
Amortization of cloud computing | 15,190 | 3,436 | |||||
(Benefit) provision for deferred income taxes | (36,628 | ) | 13,571 | ||||
Loss on extinguishment of debt | 4,549 | 205 | |||||
Other, net | (2,500 | ) | 3,219 | ||||
Changes in operating assets and liabilities, net of acquisitions: | |||||||
Accounts and notes receivable, net | (30,866 | ) | (37,752 | ) | |||
Inventory | 2,657 | 1,337 | |||||
Prepaid and other assets | 2,242 | 7,648 | |||||
Advertising fund assets and liabilities, restricted | (14,845 | ) | (4,209 | ) | |||
Other assets | (18,210 | ) | (63,015 | ) | |||
Deferred commissions | (343 | ) | 642 | ||||
Deferred revenue | (1,679 | ) | 1,248 | ||||
Accounts payable | (533 | ) | 11,504 | ||||
Accrued expenses and other liabilities | 39,296 | 27,359 | |||||
Income tax receivable | 16,588 | (8,230 | ) | ||||
Cash provided by operating activities | 234,745 | 208,508 | |||||
Cash flows from investing activities: | |||||||
Capital expenditures | (167,384 | ) | (219,307 | ) | |||
Cash used in business acquisitions, net of cash acquired | (8,112 | ) | (2,759 | ) | |||
Proceeds from sale leaseback transactions | 35,279 | 17,944 | |||||
Proceeds from Seller Note | 113,000 | — | |||||
Proceeds from sale or disposal of businesses and fixed assets | 277,062 | 255,548 | |||||
Cash provided by (used in) investing activities | 249,845 | 51,426 | |||||
Cash flows from financing activities: | |||||||
Payment of debt extinguishment and issuance costs | (1,414 | ) | (9,646 | ) | |||
Proceeds from the issuance of long-term debt | — | 274,794 | |||||
Repayment of long-term debt | (370,915 | ) | (422,492 | ) | |||
Proceeds from revolving lines of credit and short-term debt | 121,000 | 46,000 | |||||
Repayment of revolving lines of credit and short-term debt | (236,000 | ) | (71,000 | ) | |||
Repayment of principal portion of finance lease liability | (3,581 | ) | (4,301 | ) | |||
Payment of Tax Receivable Agreement | — | (38,374 | ) | ||||
Acquisition of non-controlling interest | — | (644 | ) | ||||
Tax obligations for share-based compensation | (3,907 | ) | (998 | ) | |||
Cash used in financing activities | (494,817 | ) | (226,661 | ) | |||
Effect of exchange rate changes on cash | 4,709 | 71 | |||||
Net change in cash, cash equivalents, restricted cash, and cash included in advertising fund assets, restricted | (5,518 | ) | 33,344 | ||||
Cash and cash equivalents, beginning of period | 169,954 | 176,522 | |||||
Cash included in advertising fund assets, restricted, beginning of period | 38,930 | 38,537 | |||||
Restricted cash, beginning of period | 358 | 657 | |||||
Cash, cash equivalents, restricted cash, and cash included in advertising fund assets, restricted, beginning of period | 209,242 | 215,716 | |||||
Cash and cash equivalents, end of period | 162,028 | 204,181 | |||||
Cash included in advertising fund assets, restricted, end of period | 41,361 | 40,465 | |||||
Restricted cash, end of period | 335 | 4,414 | |||||
Cash, cash equivalents, restricted cash, and cash included in advertising fund assets, restricted, end of period | $ | 203,724 | $ | 249,060 |
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 2025 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 27, 2025, compared to the three and nine months ended September 28, 2024.
Net Income to Adjusted Net Income and Adjusted Earnings Per Share (Unaudited)
Three Months Ended | Nine Months Ended | ||||||||||||||
(in thousands, except per share data) | September 27, | September 28, | September 27, | September 28, | |||||||||||
Net income (loss) from continuing operations | $ | 60,862 | $ | (11,480 | ) | $ | 90,161 | $ | 37,289 | ||||||
Adjustments: | |||||||||||||||
Acquisition related costs(a) | (214 | ) | (393 | ) | 784 | 1,572 | |||||||||
Non-core items and project costs, net(b) | 18,557 | 6,424 | 32,770 | 16,166 | |||||||||||
Cloud computing amortization(c) | 6,055 | 1,022 | 15,191 | 3,436 | |||||||||||
Share-based compensation expense(d) | 5,191 | 12,798 | 28,269 | 35,641 | |||||||||||
Foreign currency transaction (gain) loss, net(e) | (5,419 | ) | 765 | (17,406 | ) | 5,767 | |||||||||
Asset sale leaseback (gain) loss, net, impairment, notes receivable loss, and closed store expenses(f) | 9,907 | 29,036 | 63,387 | 36,213 | |||||||||||
Loss on debt extinguishment (g) | 4,549 | 205 | 4,549 | 205 | |||||||||||
Amortization related to acquired intangible assets(h) | 4,295 | 5,375 | 13,482 | 17,713 | |||||||||||
Acceleration of interest rate hedge(i) | (4,422 | ) | — | (4,422 | ) | — | |||||||||
Valuation allowance for deferred tax asset(j) | (34,275 | ) | 7,032 | (31,841 | ) | 8,287 | |||||||||
Adjusted net income before tax impact of adjustments | 65,086 | 50,784 | 194,924 | 162,289 | |||||||||||
Tax impact of adjustments(k) | (8,891 | ) | (12,703 | ) | (35,410 | ) | (23,818 | ) | |||||||
Adjusted net income from continuing operations | $ | 56,195 | $ | 38,081 | $ | 159,514 | $ | 138,471 | |||||||
Basic earnings (loss) per share from continuing operations | $ | 0.37 | $ | (0.07 | ) | $ | 0.55 | $ | 0.23 | ||||||
Diluted earnings (loss) per share from continuing operations | $ | 0.37 | $ | (0.07 | ) | $ | 0.55 | $ | 0.23 | ||||||
Adjusted basic earnings per share from continuing operations(1) | $ | 0.34 | $ | 0.23 | $ | 0.97 | $ | 0.85 | |||||||
Adjusted diluted earnings per share from continuing operations(1) | $ | 0.34 | $ | 0.23 | $ | 0.97 | $ | 0.85 | |||||||
Weighted average shares outstanding | |||||||||||||||
Basic | 163,900 | 159,804 | 162,434 | 159,743 | |||||||||||
Diluted | 165,124 | 159,804 | 163,686 | 160,713 | |||||||||||
Weighted average shares outstanding for Adjusted Net Income | |||||||||||||||
Basic | 163,900 | 159,804 | 162,434 | 159,743 | |||||||||||
Diluted | 165,124 | 161,113 | 163,686 | 160,713 |
(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 calculations was less than $1 million and $1 million for the three and nine months ended September 27, 2025, respectively, and $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 calculation was less than $1 million for the three and nine months ended September 27, 2025 and September 28, 2024. |
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 28, 2024, filed with the SEC on February 26, 2025, for additional information on Adjusted EBITDA. The tables below reflect the calculation of Adjusted EBITDA for the three and nine months ended September 27, 2025, compared to the three and nine months ended September 28, 2024.
Net Income to Adjusted EBITDA Reconciliation (Unaudited)
Three Months Ended | Nine Months Ended | |||||||||||||
(in thousands) | September 27, | September 28, | September 27, | September 28, | ||||||||||
Net income (loss) from continuing operations | $ | 60,862 | $ | (11,480 | ) | $ | 90,161 | $ | 37,289 | |||||
Income tax (benefit) expense | (21,659 | ) | 16,474 | (7,487 | ) | 45,292 | ||||||||
Interest expense, net | 23,603 | 43,674 | 91,496 | 119,241 | ||||||||||
Depreciation and amortization | 34,828 | 33,418 | 102,883 | 97,358 | ||||||||||
EBITDA | 97,634 | 82,086 | 277,053 | 299,180 | ||||||||||
Acquisition related costs(a) | (214 | ) | (393 | ) | 784 | 1,572 | ||||||||
Non-core items and project costs, net(b) | 18,557 | 6,424 | 32,770 | 16,166 | ||||||||||
Cloud computing amortization(c) | 6,055 | 1,022 | 15,191 | 3,436 | ||||||||||
Share-based compensation expense(d) | 5,191 | 12,798 | 28,269 | 35,641 | ||||||||||
Foreign currency transaction (gain) loss, net(e) | (5,419 | ) | 765 | (17,406 | ) | 5,767 | ||||||||
Asset sale leaseback (gain) loss, net, impairment, notes receivable loss, and closed store expenses(f) | 9,907 | 29,036 | 63,387 | 36,213 | ||||||||||
Loss on debt extinguishment(g) | 4,549 | 205 | 4,549 | 205 | ||||||||||
Adjusted EBITDA | $ | 136,260 | $ | 131,943 | $ | 404,597 | $ | 398,180 |
Adjusted EBITDA, Adjusted Net Income and Adjusted Earnings Per Share Footnotes
(a) | Consists of acquisition costs as reflected within the 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. As acquisitions occur in the future, we expect to incur similar costs 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 professional costs associated with strategic transformation initiatives as well as non-recurring payroll-related costs and non-ordinary course legal settlements. | |
(c) | Includes non-cash amortization expenses relating to cloud computing arrangements. | |
(d) | Represents non-cash share-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. | |
(f) | Consists of the following items (i) (gains) losses, net on sale leasebacks, disposal of assets, or sale of business; (ii) net losses (gains) on sale for assets held for sale; (iii) impairment of certain fixed assets and operating lease right-of-use assets related to closed and underperforming locations, lease exit costs and other costs associated with stores that were closed prior to the respective lease termination dates; and (iv) loss on fair value of the Seller Note. | |
(g) | Represents charges incurred related to the Company’s full repayment of the Term Loan in conjunction with the sale of the U.S. Car Wash business in the current year and charges incurred related to the Company’s partial repayment of Senior Secured Notes in conjunction with the sale of its Canadian distribution business in the prior year. | |
(h) | Consists of amortization related to acquired intangible assets as reflected within depreciation and amortization in the consolidated statement of operations. | |
(i) | Consists of the accelerated amortization of an interest rate hedge associated with the Series 2022-1 Senior Securitization Notes, which was refinanced in October 2025. | |
(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 from continuing operations and Adjusted Net Income, excluding the provision for uncertain tax positions and valuation allowance for certain deferred tax assets. 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 RECONCILIATION (UNAUDITED) | |||||||||||||||
Three Months Ended | Nine Months Ended | ||||||||||||||
(in thousands) | September 27, | September 28, | September 27, | September 28, | |||||||||||
Take 5 | $ | 107,307 | $ | 93,287 | $ | 316,378 | $ | 280,583 | |||||||
Franchise Brands | 49,734 | 50,196 | 139,560 | 151,989 | |||||||||||
Car Wash | 15,030 | 16,000 | 66,715 | 56,200 | |||||||||||
Corporate and Other | (35,811 | ) | (27,540 | ) | (118,056 | ) | (90,592 | ) | |||||||
Adjusted EBITDA | $ | 136,260 | $ | 131,943 | $ | 404,597 | $ | 398,180 |
DRIVEN BRANDS HOLDINGS INC. AND SUBSIDIARIES ADDITIONAL INFORMATION ON KEY PERFORMANCE INDICATORS (UNAUDITED) | ||||||||||||||
Three Months Ended September 27, 2025 | ||||||||||||||
(in thousands) | Take 5 | Franchise | Car Wash | Corporate and | Total | |||||||||
System-wide Sales | ||||||||||||||
Franchise stores | $ | 155,871 | $ | 1,086,892 | $ | — | $ | — | $ | 1,242,763 | ||||
Company-operated stores | 255,749 | 4,720 | — | 70,790 | 331,259 | |||||||||
Independently operated stores | — | — | 51,410 | — | 51,410 | |||||||||
Total System-wide Sales | $ | 411,620 | $ | 1,091,612 | $ | 51,410 | $ | 70,790 | $ | 1,625,432 | ||||
Store Count (in whole numbers) | ||||||||||||||
Franchise stores | 502 | 2,663 | — | — | 3,165 | |||||||||
Company-operated stores | 780 | 13 | — | 213 | 1,006 | |||||||||
Independently operated stores | — | — | 717 | — | 717 | |||||||||
Total Store Count | 1,282 | 2,676 | 717 | 213 | 4,888 | |||||||||
Three Months Ended September 28, 2024 | ||||||||||||||
(in thousands) | Take 5 | Franchise | Car Wash | Corporate | Total | |||||||||
System-wide Sales | ||||||||||||||
Franchise stores | $ | 118,846 | $ | 1,084,819 | $ | — | $ | — | $ | 1,203,665 | ||||
Company-operated stores | 231,021 | 4,674 | — | 63,103 | 298,798 | |||||||||
Independently operated stores | — | — | 49,959 | — | 49,959 | |||||||||
Total System-wide Sales | $ | 349,867 | $ | 1,089,493 | $ | 49,959 | $ | 63,103 | $ | 1,552,422 | ||||
Store Count (in whole numbers) | ||||||||||||||
Franchise stores | 425 | 2,653 | — | — | 3,078 | |||||||||
Company-operated stores | 695 | 13 | — | 216 | 924 | |||||||||
Independently operated stores | — | — | 719 | — | 719 | |||||||||
Total Store Count | 1,120 | 2,666 | 719 | 216 | 4,721 |
Nine Months Ended September 27, 2025 | |||||||||||||||
(in thousands) | Take 5 | Franchise | Car Wash | Corporate | Total | ||||||||||
System-wide Sales | |||||||||||||||
Franchise stores | $ | 441,678 | $ | 3,186,848 | $ | — | $ | — | $ | 3,628,526 | |||||
Company-operated stores | 763,998 | 13,366 | — | 201,306 | 978,670 | ||||||||||
Independently operated stores | — | — | 189,841 | — | 189,841 | ||||||||||
Total System-wide Sales | $ | 1,205,676 | $ | 3,200,214 | $ | 189,841 | $ | 201,306 | $ | 4,797,037 | |||||
Store Count (in whole numbers) | |||||||||||||||
Franchise stores | 502 | 2,663 | — | — | 3,165 | ||||||||||
Company-operated stores | 780 | 13 | — | 213 | 1,006 | ||||||||||
Independently operated stores | — | — | 717 | — | 717 | ||||||||||
Total Store Count | 1,282 | 2,676 | 717 | 213 | 4,888 | ||||||||||
Nine Months Ended September 28, 2024 | |||||||||||||||
(in thousands) | Take 5 | Franchise | Car Wash | Corporate | Total | ||||||||||
System-wide Sales | |||||||||||||||
Franchise stores | $ | 340,424 | $ | 3,252,714 | $ | — | $ | — | $ | 3,593,138 | |||||
Company-operated stores | 682,701 | 14,286 | — | 187,957 | 884,944 | ||||||||||
Independently operated stores | — | — | 163,286 | — | 163,286 | ||||||||||
Total System-wide Sales | $ | 1,023,125 | $ | 3,267,000 | $ | 163,286 | $ | 187,957 | $ | 4,641,368 | |||||
Store Count (in whole numbers) | |||||||||||||||
Franchise stores | 425 | 2,653 | — | — | 3,078 | ||||||||||
Company-operated stores | 695 | 13 | — | 216 | 924 | ||||||||||
Independently operated stores | — | — | 719 | — | 719 | ||||||||||
Total Store Count | 1,120 | 2,666 | 719 | 216 | 4,721 |
View source version on businesswire.com: https://www.businesswire.com/news/home/20251104850553/en/
Ämnen i artikeln
Driven Brands Holdings Inc. Reports Third Quarter 2025 Results
4 november, 13:15
Driven Brands Holdings Inc. (NASDAQ: DRVN) (“Driven Brands” or the “Company”) today reported financial results for the third quarter ending September 27, 2025.
For the third quarter, Driven Brands delivered revenue of $535.7 million, an increase of 6.6% versus the prior year. System-wide sales increased 4.7% to $1.6 billion, driven by a 2.8% increase in same store sales and 3.5% increase in store count versus the prior year.
Net income from continuing operations was $60.9 million or $0.37 per diluted share versus a net loss from continuing operations of $11.5 million or $(0.07) per diluted share in the prior year. Adjusted Net Income1 was $56.2 million or $0.34 per diluted share versus $38.1 million or $0.23 per diluted share in the prior year. Adjusted EBITDA1 was $136.3 million, an increase of $4.3 million versus the prior year.
“Driven Brands delivered another strong quarter, highlighted by continued growth in our Take 5 business,” said Danny Rivera, President and Chief Executive Officer. “Same store sales increased for the 19th consecutive quarter, with high single-digit growth in Take 5 driving solid gains in revenue, adjusted EBITDA and adjusted earnings per share.”
“As we look to the balance of the year, our narrowed fiscal 2025 outlook reflects continued execution of our Growth and Cash strategy - with expansion from Take 5 Oil Change, reliable cash generation from our franchise and car wash segments, and ongoing progress reducing leverage. While the consumer environment remains dynamic, our resilient, needs-based model and disciplined focus on execution position us well to continue delivering long-term shareholder value,” Rivera concluded.
Third Quarter 2025 Key Performance Indicators by Segment
System-wide Sales | Store Count | Same Store | Revenue | Adjusted EBITDA | ||||||
Take 5 | $ | 411.6 | 1,282 | 6.8 | % | $ | 306.4 | $ | 107.3 | |
Franchise Brands | 1,091.6 | 2,676 | 0.7 | % | 75.3 | 49.7 | ||||
Car Wash | 51.4 | 717 | 3.9 | % | 54.1 | 15.0 | ||||
Corporate and Other | 70.8 | 213 | N/A | 99.9 | (35.8 | ) | ||||
Total | $ | 1,625.4 | 4,888 | 2.8 | % | $ | 535.7 | $ | 136.3 |
Note: Certain columns may not add due to rounding.
Capital and Liquidity
The Company ended the third quarter with a net leverage ratio of 3.8x Adjusted EBITDA and total liquidity of $755.7 million consisting of $162.0 million in cash and cash equivalents and $593.7 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.
Seller Note Divestiture and Debt Refinancing
As disclosed previously, on July 25, 2025, Driven Brands divested the seller note received in connection with the sale of the former U.S. car wash business for $113.0 million in cash proceeds. Net proceeds were used to pay off all outstanding term loan principal as well as $65.0 million of the drawn balance on its revolving credit facility.
On October 20, 2025, as previously disclosed, the Company completed an offering by certain of its subsidiaries for $500 million of Series 2025 Class A-2 senior notes maturing in October 2055, with an anticipated repayment date in October 2030. Proceeds from the notes, combined with funding from the Company’s revolving credit facility, were primarily used to repay the Company’s 2019-1 and 2022-1 Fixed Rate Senior Secured Notes.
Fiscal Year 2025 Outlook
The Company narrowed its financial outlook for fiscal year ending December 27, 2025, as follows:
2025 Outlook | |
Revenue | ~$2.10 - $2.12 billion |
Adjusted EBITDA1 | ~$525 - $535 million |
Adjusted Diluted EPS1 | ~$1.23 - $1.28 |
The Company now expects same store sales growth at the low end of its original range of 1% to 3%; and continues to expect net store growth of approximately 175 to 200.
Note: 2025 Outlook excludes the impact of any potential M&A and divestitures other than the completed sale of the U.S. car wash business.
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 Corporate and Other as it is a non-reportable segment. The same store sales results for any applicable businesses within Corporate and Other are included in the Company’s overall same store sales results. |
Conference Call
Driven Brands will host a conference call to discuss third quarter 2025 results today, Tuesday, November 4, 2025, 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 services, 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®, Meineke Car Care Centers®, Maaco®, 1-800-Radiator & A/C®, Auto Glass Now®, and CARSTAR®. Driven Brands has approximately 4,900 locations across the United States and 13 other countries, and services tens of millions of vehicles annually. Driven Brands’ network generates approximately $2.1 billion in annual revenue from approximately $6.3 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) potential post-closing obligations and liabilities relating to the sale of our U.S. car wash business; (ii) the current geopolitical environment, including the impact, both direct and indirect, of government actions, such as proposed and enacted tariffs and governmental shutdowns; (iii) our strategy, outlook, and growth prospects; (iv) our operational and financial targets and dividend policy; (v) general economic trends and trends in the industry and markets; (vi) the risks and costs associated with the integration of, and or ability to integrate, our stores and business units successfully; (vii) the proper application of generally accepted accounting principles, which are highly complex and involve many subjective assumptions, estimates, and judgments; and (viii) 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 28, 2024 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 27, | September 28, | September 27, | September 28, | |||||||||||
Net revenue: | |||||||||||||||
Franchise royalties and fees | $ | 50,824 | $ | 49,475 | $ | 144,714 | $ | 144,549 | |||||||
Company-operated store sales | 331,259 | 298,798 | 978,670 | 884,944 | |||||||||||
Independently-operated store sales | 51,410 | 49,959 | 189,841 | 163,286 | |||||||||||
Advertising contributions | 27,883 | 26,823 | 80,249 | 75,804 | |||||||||||
Supply and other revenue | 74,308 | 77,284 | 209,361 | 234,544 | |||||||||||
Total net revenue | 535,684 | 502,339 | 1,602,835 | 1,503,127 | |||||||||||
Operating Expenses: | |||||||||||||||
Company-operated store expenses | 193,129 | 177,510 | 565,391 | 525,529 | |||||||||||
Independently-operated store expenses | 30,178 | 29,382 | 104,713 | 90,693 | |||||||||||
Advertising expenses | 27,884 | 26,823 | 80,249 | 75,804 | |||||||||||
Supply and other expenses | 42,552 | 35,779 | 116,939 | 112,531 | |||||||||||
Selling, general, and administrative expenses | 145,177 | 149,789 | 471,347 | 393,418 | |||||||||||
Depreciation and amortization | 34,828 | 33,418 | 102,883 | 97,358 | |||||||||||
Total operating expenses | 473,748 | 452,701 | 1,441,522 | 1,295,333 | |||||||||||
Operating income | 61,936 | 49,638 | 161,313 | 207,794 | |||||||||||
Other expenses, net: | |||||||||||||||
Interest expense, net | 23,603 | 43,674 | 91,496 | 119,241 | |||||||||||
Foreign currency transaction (gain) loss, net | (5,419 | ) | 765 | (17,406 | ) | 5,767 | |||||||||
Loss on debt extinguishment | 4,549 | 205 | 4,549 | 205 | |||||||||||
Other expenses, net | 22,733 | 44,644 | 78,639 | 125,213 | |||||||||||
Income before taxes from continuing operations | 39,203 | 4,994 | 82,674 | 82,581 | |||||||||||
Income tax (benefit) expense | (21,659 | ) | 16,474 | (7,487 | ) | 45,292 | |||||||||
Net income (loss) from continuing operations | $ | 60,862 | $ | (11,480 | ) | $ | 90,161 | $ | 37,289 | ||||||
Gain on sale of discontinued operations, net of tax | — | — | 37,367 | — | |||||||||||
Net loss from discontinued operations, net of tax | — | (3,467 | ) | (13,596 | ) | (17,816 | ) | ||||||||
Net income (loss) | $ | 60,862 | $ | (14,947 | ) | $ | 113,932 | $ | 19,473 | ||||||
Basic earnings (loss) per share: | |||||||||||||||
Continuing Operations | $ | 0.37 | $ | (0.07 | ) | $ | 0.55 | $ | 0.23 | ||||||
Discontinued Operations | — | (0.02 | ) | 0.14 | (0.11 | ) | |||||||||
Net basic earnings (loss) per share | $ | 0.37 | $ | (0.09 | ) | $ | 0.69 | $ | 0.12 | ||||||
Diluted earnings (loss) per share: | |||||||||||||||
Continuing Operations | $ | 0.37 | $ | (0.07 | ) | $ | 0.55 | $ | 0.23 | ||||||
Discontinued Operations | — | (0.02 | ) | 0.14 | (0.11 | ) | |||||||||
Net diluted earnings (loss) per share | $ | 0.37 | $ | (0.09 | ) | $ | 0.69 | $ | 0.12 | ||||||
Weighted average shares outstanding | |||||||||||||||
Basic | 163,900 | 159,804 | 162,434 | 159,743 | |||||||||||
Diluted | 165,124 | 159,804 | 163,686 | 160,713 |
DRIVEN BRANDS HOLDINGS INC. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS (UNAUDITED) | |||||||
(in thousands, except share and per share amounts) | September 27, 2025 | December 28, 2024 | |||||
Assets | |||||||
Current assets: | |||||||
Cash and cash equivalents | $ | 162,028 | $ | 149,573 | |||
Restricted cash | 335 | 358 | |||||
Accounts and notes receivable, net | 188,208 | 177,654 | |||||
Inventory | 65,195 | 66,539 | |||||
Prepaid and other assets | 35,178 | 37,841 | |||||
Income tax receivable | 16,025 | 14,294 | |||||
Advertising fund assets, restricted | 63,617 | 49,716 | |||||
Assets held for sale | 54,540 | 77,616 | |||||
Current assets of discontinued operations | — | 83,847 | |||||
Total current assets | 585,126 | 657,438 | |||||
Other assets | 120,802 | 125,422 | |||||
Property and equipment, net | 758,874 | 711,505 | |||||
Operating lease right-of-use assets | 570,213 | 524,442 | |||||
Deferred commissions | 7,589 | 7,246 | |||||
Intangibles, net | 655,792 | 665,896 | |||||
Goodwill | 1,445,383 | 1,403,056 | |||||
Deferred tax assets | 9,151 | 8,206 | |||||
Non-current assets of discontinued operations | — | 1,158,576 | |||||
Total assets | $ | 4,152,930 | $ | 5,261,787 | |||
Liabilities and shareholders' equity | |||||||
Current liabilities: | |||||||
Accounts payable | $ | 89,355 | $ | 85,843 | |||
Accrued expenses and other liabilities | 226,515 | 193,638 | |||||
Income tax payable | 13,190 | 6,860 | |||||
Current portion of long-term debt | 277,770 | 32,232 | |||||
Income tax receivable liability | 22,674 | 22,676 | |||||
Advertising fund liabilities | 18,644 | 22,030 | |||||
Current liabilities of discontinued operations | — | 70,616 | |||||
Total current liabilities | 648,148 | 433,895 | |||||
Long-term debt | 1,936,610 | 2,656,308 | |||||
Deferred tax liabilities | 72,249 | 87,485 | |||||
Operating lease liabilities | 541,110 | 491,282 | |||||
Income tax receivable liability | 110,907 | 110,935 | |||||
Deferred revenue | 29,641 | 31,314 | |||||
Long-term accrued expenses and other liabilities | 20,775 | 20,122 | |||||
Non-current liabilities of discontinued operations | — | 823,112 | |||||
Total liabilities | 3,359,440 | 4,654,453 | |||||
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 164,454,218 and 163,842,248 shares outstanding; respectively | 1,645 | 1,638 | |||||
Additional paid-in capital | 1,725,174 | 1,699,851 | |||||
Accumulated deficit | (888,651 | ) | (1,002,583 | ) | |||
Accumulated other comprehensive loss | (44,678 | ) | (91,572 | ) | |||
Total shareholders’ equity | 793,490 | 607,334 | |||||
Total liabilities and shareholders' equity | $ | 4,152,930 | $ | 5,261,787 |
DRIVEN BRANDS HOLDINGS INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) | |||||||
Nine Months Ended | |||||||
(in thousands) | September 27, | September 28, | |||||
Net income | $ | 113,932 | $ | 19,473 | |||
Adjustments to reconcile net income to net cash provided by operating activities: | |||||||
Depreciation and amortization | 105,109 | 131,219 | |||||
Share-based compensation expense | 28,269 | 35,641 | |||||
(Gain) loss on foreign denominated transactions | (21,560 | ) | 8,744 | ||||
Loss (gain) on foreign currency derivatives | 4,154 | (2,977 | ) | ||||
(Gain) loss on sale and disposal of businesses, fixed assets, and sale leaseback transactions | (21,560 | ) | 32,998 | ||||
Loss on fair value of Seller Note | 17,000 | — | |||||
Reclassification of interest rate hedge to income | (5,980 | ) | (1,560 | ) | |||
Bad debt expense | 13,275 | 5,759 | |||||
Asset impairment charges and lease terminations | 19,747 | 15,008 | |||||
Amortization of deferred financing costs and bond discounts | 7,441 | 7,240 | |||||
Amortization of cloud computing | 15,190 | 3,436 | |||||
(Benefit) provision for deferred income taxes | (36,628 | ) | 13,571 | ||||
Loss on extinguishment of debt | 4,549 | 205 | |||||
Other, net | (2,500 | ) | 3,219 | ||||
Changes in operating assets and liabilities, net of acquisitions: | |||||||
Accounts and notes receivable, net | (30,866 | ) | (37,752 | ) | |||
Inventory | 2,657 | 1,337 | |||||
Prepaid and other assets | 2,242 | 7,648 | |||||
Advertising fund assets and liabilities, restricted | (14,845 | ) | (4,209 | ) | |||
Other assets | (18,210 | ) | (63,015 | ) | |||
Deferred commissions | (343 | ) | 642 | ||||
Deferred revenue | (1,679 | ) | 1,248 | ||||
Accounts payable | (533 | ) | 11,504 | ||||
Accrued expenses and other liabilities | 39,296 | 27,359 | |||||
Income tax receivable | 16,588 | (8,230 | ) | ||||
Cash provided by operating activities | 234,745 | 208,508 | |||||
Cash flows from investing activities: | |||||||
Capital expenditures | (167,384 | ) | (219,307 | ) | |||
Cash used in business acquisitions, net of cash acquired | (8,112 | ) | (2,759 | ) | |||
Proceeds from sale leaseback transactions | 35,279 | 17,944 | |||||
Proceeds from Seller Note | 113,000 | — | |||||
Proceeds from sale or disposal of businesses and fixed assets | 277,062 | 255,548 | |||||
Cash provided by (used in) investing activities | 249,845 | 51,426 | |||||
Cash flows from financing activities: | |||||||
Payment of debt extinguishment and issuance costs | (1,414 | ) | (9,646 | ) | |||
Proceeds from the issuance of long-term debt | — | 274,794 | |||||
Repayment of long-term debt | (370,915 | ) | (422,492 | ) | |||
Proceeds from revolving lines of credit and short-term debt | 121,000 | 46,000 | |||||
Repayment of revolving lines of credit and short-term debt | (236,000 | ) | (71,000 | ) | |||
Repayment of principal portion of finance lease liability | (3,581 | ) | (4,301 | ) | |||
Payment of Tax Receivable Agreement | — | (38,374 | ) | ||||
Acquisition of non-controlling interest | — | (644 | ) | ||||
Tax obligations for share-based compensation | (3,907 | ) | (998 | ) | |||
Cash used in financing activities | (494,817 | ) | (226,661 | ) | |||
Effect of exchange rate changes on cash | 4,709 | 71 | |||||
Net change in cash, cash equivalents, restricted cash, and cash included in advertising fund assets, restricted | (5,518 | ) | 33,344 | ||||
Cash and cash equivalents, beginning of period | 169,954 | 176,522 | |||||
Cash included in advertising fund assets, restricted, beginning of period | 38,930 | 38,537 | |||||
Restricted cash, beginning of period | 358 | 657 | |||||
Cash, cash equivalents, restricted cash, and cash included in advertising fund assets, restricted, beginning of period | 209,242 | 215,716 | |||||
Cash and cash equivalents, end of period | 162,028 | 204,181 | |||||
Cash included in advertising fund assets, restricted, end of period | 41,361 | 40,465 | |||||
Restricted cash, end of period | 335 | 4,414 | |||||
Cash, cash equivalents, restricted cash, and cash included in advertising fund assets, restricted, end of period | $ | 203,724 | $ | 249,060 |
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 2025 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 27, 2025, compared to the three and nine months ended September 28, 2024.
Net Income to Adjusted Net Income and Adjusted Earnings Per Share (Unaudited)
Three Months Ended | Nine Months Ended | ||||||||||||||
(in thousands, except per share data) | September 27, | September 28, | September 27, | September 28, | |||||||||||
Net income (loss) from continuing operations | $ | 60,862 | $ | (11,480 | ) | $ | 90,161 | $ | 37,289 | ||||||
Adjustments: | |||||||||||||||
Acquisition related costs(a) | (214 | ) | (393 | ) | 784 | 1,572 | |||||||||
Non-core items and project costs, net(b) | 18,557 | 6,424 | 32,770 | 16,166 | |||||||||||
Cloud computing amortization(c) | 6,055 | 1,022 | 15,191 | 3,436 | |||||||||||
Share-based compensation expense(d) | 5,191 | 12,798 | 28,269 | 35,641 | |||||||||||
Foreign currency transaction (gain) loss, net(e) | (5,419 | ) | 765 | (17,406 | ) | 5,767 | |||||||||
Asset sale leaseback (gain) loss, net, impairment, notes receivable loss, and closed store expenses(f) | 9,907 | 29,036 | 63,387 | 36,213 | |||||||||||
Loss on debt extinguishment (g) | 4,549 | 205 | 4,549 | 205 | |||||||||||
Amortization related to acquired intangible assets(h) | 4,295 | 5,375 | 13,482 | 17,713 | |||||||||||
Acceleration of interest rate hedge(i) | (4,422 | ) | — | (4,422 | ) | — | |||||||||
Valuation allowance for deferred tax asset(j) | (34,275 | ) | 7,032 | (31,841 | ) | 8,287 | |||||||||
Adjusted net income before tax impact of adjustments | 65,086 | 50,784 | 194,924 | 162,289 | |||||||||||
Tax impact of adjustments(k) | (8,891 | ) | (12,703 | ) | (35,410 | ) | (23,818 | ) | |||||||
Adjusted net income from continuing operations | $ | 56,195 | $ | 38,081 | $ | 159,514 | $ | 138,471 | |||||||
Basic earnings (loss) per share from continuing operations | $ | 0.37 | $ | (0.07 | ) | $ | 0.55 | $ | 0.23 | ||||||
Diluted earnings (loss) per share from continuing operations | $ | 0.37 | $ | (0.07 | ) | $ | 0.55 | $ | 0.23 | ||||||
Adjusted basic earnings per share from continuing operations(1) | $ | 0.34 | $ | 0.23 | $ | 0.97 | $ | 0.85 | |||||||
Adjusted diluted earnings per share from continuing operations(1) | $ | 0.34 | $ | 0.23 | $ | 0.97 | $ | 0.85 | |||||||
Weighted average shares outstanding | |||||||||||||||
Basic | 163,900 | 159,804 | 162,434 | 159,743 | |||||||||||
Diluted | 165,124 | 159,804 | 163,686 | 160,713 | |||||||||||
Weighted average shares outstanding for Adjusted Net Income | |||||||||||||||
Basic | 163,900 | 159,804 | 162,434 | 159,743 | |||||||||||
Diluted | 165,124 | 161,113 | 163,686 | 160,713 |
(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 calculations was less than $1 million and $1 million for the three and nine months ended September 27, 2025, respectively, and $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 calculation was less than $1 million for the three and nine months ended September 27, 2025 and September 28, 2024. |
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 28, 2024, filed with the SEC on February 26, 2025, for additional information on Adjusted EBITDA. The tables below reflect the calculation of Adjusted EBITDA for the three and nine months ended September 27, 2025, compared to the three and nine months ended September 28, 2024.
Net Income to Adjusted EBITDA Reconciliation (Unaudited)
Three Months Ended | Nine Months Ended | |||||||||||||
(in thousands) | September 27, | September 28, | September 27, | September 28, | ||||||||||
Net income (loss) from continuing operations | $ | 60,862 | $ | (11,480 | ) | $ | 90,161 | $ | 37,289 | |||||
Income tax (benefit) expense | (21,659 | ) | 16,474 | (7,487 | ) | 45,292 | ||||||||
Interest expense, net | 23,603 | 43,674 | 91,496 | 119,241 | ||||||||||
Depreciation and amortization | 34,828 | 33,418 | 102,883 | 97,358 | ||||||||||
EBITDA | 97,634 | 82,086 | 277,053 | 299,180 | ||||||||||
Acquisition related costs(a) | (214 | ) | (393 | ) | 784 | 1,572 | ||||||||
Non-core items and project costs, net(b) | 18,557 | 6,424 | 32,770 | 16,166 | ||||||||||
Cloud computing amortization(c) | 6,055 | 1,022 | 15,191 | 3,436 | ||||||||||
Share-based compensation expense(d) | 5,191 | 12,798 | 28,269 | 35,641 | ||||||||||
Foreign currency transaction (gain) loss, net(e) | (5,419 | ) | 765 | (17,406 | ) | 5,767 | ||||||||
Asset sale leaseback (gain) loss, net, impairment, notes receivable loss, and closed store expenses(f) | 9,907 | 29,036 | 63,387 | 36,213 | ||||||||||
Loss on debt extinguishment(g) | 4,549 | 205 | 4,549 | 205 | ||||||||||
Adjusted EBITDA | $ | 136,260 | $ | 131,943 | $ | 404,597 | $ | 398,180 |
Adjusted EBITDA, Adjusted Net Income and Adjusted Earnings Per Share Footnotes
(a) | Consists of acquisition costs as reflected within the 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. As acquisitions occur in the future, we expect to incur similar costs 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 professional costs associated with strategic transformation initiatives as well as non-recurring payroll-related costs and non-ordinary course legal settlements. | |
(c) | Includes non-cash amortization expenses relating to cloud computing arrangements. | |
(d) | Represents non-cash share-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. | |
(f) | Consists of the following items (i) (gains) losses, net on sale leasebacks, disposal of assets, or sale of business; (ii) net losses (gains) on sale for assets held for sale; (iii) impairment of certain fixed assets and operating lease right-of-use assets related to closed and underperforming locations, lease exit costs and other costs associated with stores that were closed prior to the respective lease termination dates; and (iv) loss on fair value of the Seller Note. | |
(g) | Represents charges incurred related to the Company’s full repayment of the Term Loan in conjunction with the sale of the U.S. Car Wash business in the current year and charges incurred related to the Company’s partial repayment of Senior Secured Notes in conjunction with the sale of its Canadian distribution business in the prior year. | |
(h) | Consists of amortization related to acquired intangible assets as reflected within depreciation and amortization in the consolidated statement of operations. | |
(i) | Consists of the accelerated amortization of an interest rate hedge associated with the Series 2022-1 Senior Securitization Notes, which was refinanced in October 2025. | |
(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 from continuing operations and Adjusted Net Income, excluding the provision for uncertain tax positions and valuation allowance for certain deferred tax assets. 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 RECONCILIATION (UNAUDITED) | |||||||||||||||
Three Months Ended | Nine Months Ended | ||||||||||||||
(in thousands) | September 27, | September 28, | September 27, | September 28, | |||||||||||
Take 5 | $ | 107,307 | $ | 93,287 | $ | 316,378 | $ | 280,583 | |||||||
Franchise Brands | 49,734 | 50,196 | 139,560 | 151,989 | |||||||||||
Car Wash | 15,030 | 16,000 | 66,715 | 56,200 | |||||||||||
Corporate and Other | (35,811 | ) | (27,540 | ) | (118,056 | ) | (90,592 | ) | |||||||
Adjusted EBITDA | $ | 136,260 | $ | 131,943 | $ | 404,597 | $ | 398,180 |
DRIVEN BRANDS HOLDINGS INC. AND SUBSIDIARIES ADDITIONAL INFORMATION ON KEY PERFORMANCE INDICATORS (UNAUDITED) | ||||||||||||||
Three Months Ended September 27, 2025 | ||||||||||||||
(in thousands) | Take 5 | Franchise | Car Wash | Corporate and | Total | |||||||||
System-wide Sales | ||||||||||||||
Franchise stores | $ | 155,871 | $ | 1,086,892 | $ | — | $ | — | $ | 1,242,763 | ||||
Company-operated stores | 255,749 | 4,720 | — | 70,790 | 331,259 | |||||||||
Independently operated stores | — | — | 51,410 | — | 51,410 | |||||||||
Total System-wide Sales | $ | 411,620 | $ | 1,091,612 | $ | 51,410 | $ | 70,790 | $ | 1,625,432 | ||||
Store Count (in whole numbers) | ||||||||||||||
Franchise stores | 502 | 2,663 | — | — | 3,165 | |||||||||
Company-operated stores | 780 | 13 | — | 213 | 1,006 | |||||||||
Independently operated stores | — | — | 717 | — | 717 | |||||||||
Total Store Count | 1,282 | 2,676 | 717 | 213 | 4,888 | |||||||||
Three Months Ended September 28, 2024 | ||||||||||||||
(in thousands) | Take 5 | Franchise | Car Wash | Corporate | Total | |||||||||
System-wide Sales | ||||||||||||||
Franchise stores | $ | 118,846 | $ | 1,084,819 | $ | — | $ | — | $ | 1,203,665 | ||||
Company-operated stores | 231,021 | 4,674 | — | 63,103 | 298,798 | |||||||||
Independently operated stores | — | — | 49,959 | — | 49,959 | |||||||||
Total System-wide Sales | $ | 349,867 | $ | 1,089,493 | $ | 49,959 | $ | 63,103 | $ | 1,552,422 | ||||
Store Count (in whole numbers) | ||||||||||||||
Franchise stores | 425 | 2,653 | — | — | 3,078 | |||||||||
Company-operated stores | 695 | 13 | — | 216 | 924 | |||||||||
Independently operated stores | — | — | 719 | — | 719 | |||||||||
Total Store Count | 1,120 | 2,666 | 719 | 216 | 4,721 |
Nine Months Ended September 27, 2025 | |||||||||||||||
(in thousands) | Take 5 | Franchise | Car Wash | Corporate | Total | ||||||||||
System-wide Sales | |||||||||||||||
Franchise stores | $ | 441,678 | $ | 3,186,848 | $ | — | $ | — | $ | 3,628,526 | |||||
Company-operated stores | 763,998 | 13,366 | — | 201,306 | 978,670 | ||||||||||
Independently operated stores | — | — | 189,841 | — | 189,841 | ||||||||||
Total System-wide Sales | $ | 1,205,676 | $ | 3,200,214 | $ | 189,841 | $ | 201,306 | $ | 4,797,037 | |||||
Store Count (in whole numbers) | |||||||||||||||
Franchise stores | 502 | 2,663 | — | — | 3,165 | ||||||||||
Company-operated stores | 780 | 13 | — | 213 | 1,006 | ||||||||||
Independently operated stores | — | — | 717 | — | 717 | ||||||||||
Total Store Count | 1,282 | 2,676 | 717 | 213 | 4,888 | ||||||||||
Nine Months Ended September 28, 2024 | |||||||||||||||
(in thousands) | Take 5 | Franchise | Car Wash | Corporate | Total | ||||||||||
System-wide Sales | |||||||||||||||
Franchise stores | $ | 340,424 | $ | 3,252,714 | $ | — | $ | — | $ | 3,593,138 | |||||
Company-operated stores | 682,701 | 14,286 | — | 187,957 | 884,944 | ||||||||||
Independently operated stores | — | — | 163,286 | — | 163,286 | ||||||||||
Total System-wide Sales | $ | 1,023,125 | $ | 3,267,000 | $ | 163,286 | $ | 187,957 | $ | 4,641,368 | |||||
Store Count (in whole numbers) | |||||||||||||||
Franchise stores | 425 | 2,653 | — | — | 3,078 | ||||||||||
Company-operated stores | 695 | 13 | — | 216 | 924 | ||||||||||
Independently operated stores | — | — | 719 | — | 719 | ||||||||||
Total Store Count | 1,120 | 2,666 | 719 | 216 | 4,721 |
View source version on businesswire.com: https://www.businesswire.com/news/home/20251104850553/en/
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