LEXINGTON, Ky., April 22, 2025 /PRNewswire/ -- Valvoline Inc. (NYSE: VVV), the quick, easy, trusted leader in preventive automotive maintenance, today announced that it plans to report financial results for its fiscal second quarter on May 8, 2025. A live audio webcast with analysts and investors will also be held on May 8, 2025 at 9 a.m. ET. The webcast and slide presentation will be available on the company's Investor Relations website at http://investors.valvoline.com. Shortly after the call concludes, a ...

Core Points - Valvoline Inc. announced that it and Greenbriar Equity Group received a Second Request from the U.S. Federal Trade Commission regarding the acquisition of Breeze Autocare [1] - The Second Request extends the waiting period under the Hart-Scott-Rodino Antitrust Improvements Act until 30 days after compliance with the requests [2] - The acquisition's completion is contingent on the expiration of the waiting period and other customary closing conditions, with expectations to close in the second half of fiscal 2025 [3] Company Overview - Valvoline Inc. operates over 2,000 service centers in the U.S. and Canada, providing more than 28 million services annually, including oil changes and maintenance services [4]

Core Viewpoint - Valvoline Inc. has signed a definitive agreement to acquire Breeze Autocare for approximately $625 million in cash, aiming to enhance its network and growth potential in the preventive automotive maintenance sector [1][7]. Company Overview - Valvoline Inc. operates over 2,000 service centers across the U.S. and Canada, providing quick automotive maintenance services [12]. - Breeze Autocare operates nearly 200 stores primarily under the Oil Changers brand across 17 states, generating $200 million in net sales for its most recent fiscal year [2][7]. Strategic Benefits - The acquisition will increase Valvoline's store count to over 2,200 locations, supporting its goal of expanding to more than 3,500 stores [3]. - The transaction is expected to deliver top-line sales and profit growth, enhancing Valvoline's already strong cash flow profile [8]. - The purchase price represents a multiple of 10.7 times Breeze Autocare's adjusted EBITDA, indicating a strategic investment [7][8]. Operational Integration - Breeze Autocare stores will initially continue to operate under their current branding while Valvoline develops a long-term integration plan [3]. - The acquisition is anticipated to leverage scale advantages, including retail-specific technology investments and fleet sales expansion [8]. Financial Aspects - The transaction is expected to close in fiscal Q3 2025, subject to customary closing conditions and regulatory approvals [9]. - Valvoline plans to fund the acquisition with a newly issued Term Loan B and will pause its share repurchase activity [9].

Financial Data and Key Metrics Changes - System-wide store sales grew 14% to $820 million, with same-store sales growth of 8% for the quarter [8] - Net sales increased 11% to $414 million, and adjusted EBITDA rose 14% to $103 million [8][21] - Adjusted net income increased 9% to $42 million, with adjusted EPS up 10% to $0.32 per share [27][29] Business Line Data and Key Metrics Changes - Non-oil change revenue was a significant contributor to ticket growth, with continued focus on improving service presentation [14][23] - The company added 35 net new stores during the quarter and completed refranchising of 39 stores in Central and West Texas [9][20] Market Data and Key Metrics Changes - System-wide same-store sales grew 8%, with company stores up 8.2% and franchise stores up 7.8% [22] - Transaction growth contributed nearly 50% of the same-store sales comp, indicating a balanced contribution from ticket and transaction growth [23] Company Strategy and Development Direction - The company remains focused on three strategic priorities: driving full potential in existing business, accelerating network growth, and targeting customer and service expansion [10] - The company aims to develop a robust pipeline for new store openings, targeting a network of over 3,500 stores [16][19] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in achieving new store growth goals and delivering strong growth in fiscal year 2025 [34] - The company anticipates some deceleration in same-store sales comp due to lapping previous pricing and non-oil change initiatives [24][40] Other Important Information - The company was recognized as the leading automotive services retailer and ranked 24th on the Entrepreneur Franchise 500 list for 2025 [19] - Cash flows from operating activities were $41 million, with free cash flow improving to negative $12 million [30] Q&A Session Summary Question: Same-store sales outlook for Q2 - Management noted good momentum at the beginning of the quarter but expected some deceleration due to lapping previous initiatives and the impact of Leap Day [40][41] Question: Clarification on "substantially in line" with expectations - Management clarified that while performance was generally in line, there were slight variations above and below expectations [51][54] Question: Update on investment outlay for new units - Management discussed efforts to reduce build-out costs by redesigning prototypes and value-engineering equipment, targeting a 10% to 20% reduction [59][63] Question: Impact of transaction performance on future guidance - Management indicated strong transaction growth driven by an expanding customer base, with no significant competitive changes impacting performance [78][79] Question: Waste oil pricing and its impact on margins - Management expects minimal impact from waste oil recoveries, with any reductions offset by lower product costs [130][132] Question: Seasonality of non-oil change business - Management highlighted that while some services are seasonal, most non-oil change revenue is driven by vehicle mileage rather than seasonality [138] Question: Franchise unit growth targets - Management confirmed strong engagement from franchise partners and confidence in achieving long-term growth targets [125][124]

Financial Performance - Net revenues for the three months ended December 31, 2024, increased to $414.3 million, up 10.4% from $373.4 million in the same period of 2023[9] - Gross profit rose to $152.9 million, representing a 13.4% increase compared to $134.8 million in the prior year[9] - Operating income significantly improved to $143.8 million, up 128.5% from $62.8 million in the previous year[9] - Net income for the quarter was $91.6 million, a substantial increase of 187.5% from $31.9 million in the same quarter of 2023[9] - Basic earnings per share increased to $0.71, compared to $0.24 in the prior year, reflecting a growth of 195.8%[9] - Comprehensive income for the quarter was $84.7 million, compared to $36.1 million in the same quarter of 2023[9] - Income from continuing operations grew 177% to $93.9 million, with diluted earnings per share increasing 181% to $0.73[52] - Adjusted EBITDA rose by 14% over the prior year period, driven by strong top-line growth and operational efficiencies[52] - Gross profit margin improved to 36.9% in Q1 2025 from 36.1% in Q1 2024[62] Cash Flow and Capital Management - Cash flows from operating activities totaled $41.2 million, up from $19.9 million in the same period last year[13] - The company repurchased $45.7 million of common stock during the quarter, compared to $171.7 million in the same period of the previous year[13] - Total cash, cash equivalents, and restricted cash decreased to $60.4 million as of December 31, 2024, from $420.7 million a year earlier[41] - Cash provided by operating activities was $41.4 million, an increase of $19.5 million from the prior year[79] - Free cash flow from continuing operations was $(12.2) million, reflecting higher capital expenditures for new store construction[84] - The company repurchased 0.6 million shares for $20.5 million, leaving $325.0 million remaining under the share repurchase authorization[45] - During the three months ended December 31, 2024, the Company repurchased 1.0 million shares of its common stock for $39.3 million, leaving $345.5 million available for repurchase as of December 31, 2024[86] - The share repurchase authorization is part of a broader capital allocation framework aimed at delivering value to shareholders through profitable growth and returning excess capital[88] Assets and Liabilities - Total current assets decreased to $212.7 million from $255.4 million as of September 30, 2024[11] - Total assets decreased to $2,349.8 million from $2,438.7 million as of September 30, 2024[11] - Total debt as of December 31, 2024, was $1,033.1 million, down from $1,093.8 million as of September 30, 2024[31] - Valvoline's total assets at fair value amounted to $27.2 million as of December 31, 2024, with $23.5 million classified as Level 1 inputs[26] - Valvoline's total liabilities at fair value were $22.8 million as of December 31, 2024, with deferred compensation obligations accounting for the entire amount[26] - As of December 31, 2024, Valvoline had cash and cash equivalents of $60.0 million, total debt of $1,033.1 million, and total remaining borrowing capacity of $401.5 million[89] Tax and Other Income - The effective tax rate for the three months ended December 31, 2024, was 26.2%, slightly up from 26.0% in the prior year, primarily due to an increase in pre-tax income[35] - Other income increased by $71.5 million, primarily due to a $73.9 million gain on the sale of operations related to a refranchising transaction[71] Operational Highlights - System-wide same-store sales (SSS) growth was 8.0%, contributing to the overall revenue increase[52] - Same-store sales growth for company-operated stores was 8.2%, while system-wide same-store sales growth was 8.0%[63] - System-wide store sales increased to $820.3 million for the three months ended December 31, 2024, representing a year-over-year growth of 13.5%[63] - Valvoline operates and franchises over 2,000 service center locations, with a focus on expanding its retail footprint[50] - The company plans to target customer and service expansion, particularly in the fleet business and non-oil change services[52] Internal Controls and Risk Management - A material weakness in internal control over financial reporting was identified due to the implementation of a new ERP system, which is being addressed through various remedial measures[99] - Management has established a plan to stabilize the ERP and enhance access controls, with completion expected during fiscal 2025[103] - There were no material changes to the Company's risk factors during the period covered by this report[108] - Management reassessed critical accounting estimates and determined there were no changes in the three months ended December 31, 2024[92] - The Company continues to generate positive cash flows from operations, which are dependent on general economic conditions and competitive environment[89] - Management believes the Company has sufficient liquidity to meet its cash and operating requirements for the next twelve months[90]

First Quarter Fiscal 2025 Earnings Lori Flees, CEO & President Mary Meixelsperger, CFO Elizabeth Clevinger, Investor Relations 02.06.2025 SAFE HARBOR Forward-Looking Statements Certain statements herein, other than statements of historical fact, are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Such forward-looking statements may include, without limitation, executing on the growth strategy to create shareholder value by driving the full potential in ...

Core Insights - Valvoline reported revenue of $414.3 million for the quarter ended December 2024, marking an 11% increase year-over-year and a surprise of +4.04% over the Zacks Consensus Estimate of $398.2 million [1] - The earnings per share (EPS) for the quarter was $0.32, up from $0.29 in the same quarter last year, with an EPS surprise of +3.23% compared to the consensus estimate of $0.31 [1] Financial Performance Metrics - Same-store sales growth was reported at 8%, exceeding the average estimate of 7.2% from six analysts [4] - System-wide stores included 995 franchised stores, which is below the average estimate of 1,116 based on four analysts [4] - Total system-wide stores reached 2,045, slightly below the average estimate of 2,052 from four analysts [4] - Same-store sales growth for company-operated stores was 8.2%, surpassing the four-analyst average estimate of 7.2% [4] - Same-store sales growth for franchised stores was 7.8%, compared to the estimated 7.6% from four analysts [4] - Company-operated stores totaled 895, which is lower than the estimated 936 by four analysts [4] - Franchised stores opened numbered 19, exceeding the three-analyst average estimate of 17 [4] - Company-operated stores opened were 19, below the estimated 22 from three analysts [4] Stock Performance - Valvoline's shares have returned +5.7% over the past month, outperforming the Zacks S&P 500 composite's +2.1% change [3] - The stock currently holds a Zacks Rank 4 (Sell), indicating potential underperformance relative to the broader market in the near term [3]

Core Viewpoint - Valvoline reported quarterly earnings of $0.32 per share, exceeding the Zacks Consensus Estimate of $0.31 per share, and showing an increase from $0.29 per share a year ago, indicating a positive earnings surprise of 3.23% [1] Financial Performance - The company achieved revenues of $414.3 million for the quarter ended December 2024, surpassing the Zacks Consensus Estimate by 4.04% and up from $373.4 million in the same quarter last year [2] - Over the last four quarters, Valvoline has exceeded consensus EPS estimates three times and has also topped consensus revenue estimates three times [2] Stock Performance and Outlook - Valvoline shares have increased by approximately 1.8% since the beginning of the year, while the S&P 500 has gained 3.1% [3] - The company's earnings outlook is crucial for investors, as it includes current consensus earnings expectations for upcoming quarters and any recent changes to these expectations [4] Estimate Revisions - The trend for estimate revisions ahead of the earnings release was unfavorable, resulting in a Zacks Rank 4 (Sell) for the stock, indicating expected underperformance in the near future [6] - The current consensus EPS estimate for the upcoming quarter is $0.37 on revenues of $406.38 million, and for the current fiscal year, it is $1.64 on revenues of $1.71 billion [7] Industry Context - The Automotive - Retail and Wholesale - Parts industry, to which Valvoline belongs, is currently ranked in the top 16% of over 250 Zacks industries, suggesting a favorable industry outlook [8]

Financial Performance - Valvoline reported Q1 2025 net revenues of $414.3 million, an 11% increase year-over-year[5] - Income from continuing operations reached $93.9 million, a 177% increase, with diluted earnings per share (EPS) of $0.73, up 181%[5] - Adjusted EBITDA for the quarter was $102.8 million, reflecting a 14% increase, while adjusted EPS rose by 10% to $0.32[6] - Valvoline reported a net income of $91.6 million for the three months ended December 31, 2024, compared to $31.9 million in the same period of 2023, representing a significant increase[19] - Reported diluted earnings per share from continuing operations increased to $0.73, up from $0.26 in the prior year[24] - Adjusted EBITDA from continuing operations was $102.8 million, compared to $90.2 million in the same quarter of 2023, indicating improved operational performance[26] - Valvoline's net profit margin for the quarter was 22.7%, significantly higher than 9.1% in the previous year[26] Sales and Store Growth - System-wide same-store sales (SSS) grew by 8.0%, contributing to a 14% increase in system-wide store sales totaling $820 million[6] - System-wide store sales reached $820.3 million, reflecting a year-over-year growth of 13.5% compared to $722.9 million in 2023[20] - Same-store sales growth for company-operated stores was 8.2%, while franchised stores saw a growth of 7.8%[20] - The total number of system-wide stores increased to 2,045, marking an 8.2% year-over-year growth from 1,890 stores[20] - The company added 35 stores in the quarter, including 14 franchise stores, bringing the total system-wide store count to 2,045[6] - The company opened 15 new company-operated stores during the first quarter of 2025, while 14 franchised stores were opened[22] Cash Flow and Debt - Valvoline's cash and cash equivalents stood at $60 million, with total debt of $1.0 billion[7] - Operating cash flow from continuing operations was $41 million, while free cash flow was negative at ($12) million[7] - Free cash flow from continuing operations was reported at $(12.2) million, a decrease from $(20.4) million in the previous year[29] - Valvoline's operating cash flows from continuing operations were $41.4 million, up from $21.9 million in the same period last year[29] - The company returned $39 million to shareholders through share repurchases, with $346 million remaining under the share repurchase authorization[7] Strategic Goals and Guidance - Valvoline aims to grow its network to over 3,500 stores through new builds, acquisitions, and franchise support[3] - The company remains on track for its full-year guidance following the completion of recent refranchising projects[7] Non-GAAP Measures and Expenses - Management uses non-GAAP measures to exclude unusual, infrequent, or non-operational activities impacting comparability of operational results[35] - Net pension and other postretirement plan expenses are influenced by changes in plan assets and obligations driven by debt and equity markets, reflecting current global market conditions[37] - Legacy and separation-related expenses include costs associated with the separation from Valvoline's former parent company and adjustments to indemnity obligations[38] - Information technology transition costs are incurred for implementing stand-alone enterprise resource planning and human resource information systems, beginning in fiscal 2023[39] - Investment and divestiture-related income includes costs associated with significant acquisitions and divestitures, which are not reflective of ongoing operational performance[40]

Financial Performance - Valvoline Inc. reported net revenues of $414.3 million for Q1 2025, representing an 11% increase year-over-year [4][6][19] - Operating income reached $143.8 million, a significant increase of 129% compared to the previous year [4][6] - Income from continuing operations was $93.9 million, up 177%, with diluted earnings per share (EPS) of $0.73, reflecting an increase of 181% [4][6][19] Store Expansion and Operations - The company added 35 stores in the first quarter, including 14 new franchise stores, bringing the total system-wide store count to 2,045 [2][4][25] - System-wide same-store sales (SSS) grew by 8.0%, with company-operated stores showing an 8.2% increase and franchised stores at 7.8% [4][6][23] - Valvoline aims to expand its network to over 3,500 stores through new builds, acquisitions, and support for franchise partners [2][6] Adjusted Financial Metrics - Adjusted EBITDA for the quarter was $102.8 million, a 14% increase year-over-year, while adjusted EPS was $0.32, up 10% [4][6][29] - System-wide store sales totaled $820.3 million, reflecting a 13.5% year-over-year growth [6][23] - The company reported a net profit margin of 22.7% and an adjusted EBITDA margin of 24.8% [29] Cash Flow and Balance Sheet - Operating cash flow from continuing operations was $41.4 million, while free cash flow was negative at ($12.2) million [15][31] - The company returned $39 million to shareholders through share repurchases, with a remaining authorization of $346 million [15][31] - As of December 31, 2024, Valvoline had cash and cash equivalents of $60 million and total debt of $1.0 billion [15][21]