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Driven Brands (DRVN) - 2025 Q1 - Quarterly Results

First Quarter 2025 Financial Highlights Overall Performance In the first quarter of 2025, Driven Brands reported a 7% year-over-year increase in revenue to $516.2 million and a 2% rise in system-wide sales to $1.5 billion, marking its 17th consecutive quarter of same-store sales growth Q1 2025 Key Financial Metrics | Metric | Q1 2025 | Q1 2024 | Change | | :--- | :--- | :--- | :--- | | Revenue (in millions) | $516.2M | $482.0M | +7% | | System-Wide Sales (in billions) | $1.5B | $1.5B | +2% | | Same Store Sales | +1% | N/A | N/A | | Net Income (in millions) | $6.0M | $4.0M | +50% | | Diluted EPS | $0.04 | $0.02 | +100% | | Adjusted Net Income (in millions) | $44.0M | $40.0M | +10% | | Adjusted Diluted EPS | $0.27 | $0.25 | +8% | | Adjusted EBITDA (in millions) | $125.0M | $122.8M | +2% | Segment Performance The Take 5 Oil Change segment was a standout performer, delivering 15% revenue growth and 8% same-store sales growth, while the Franchise Brands segment experienced a 2.9% decline in same-store sales - Take 5 Oil Change achieved its 19th consecutive quarter of same-store sales growth, with revenue up 15% and same-store sales up 8%13 Q1 2025 Key Performance Indicators by Segment | Segment | System-wide Sales (in millions) | Store Count | Same Store Sales | Revenue (in millions) | Adjusted EBITDA (in millions) | | :--- | :--- | :--- | :--- | :--- | :--- | | Take 5 | $387.5 | 1,203 | 8.0% | $293.4 | $100.9 | | Franchise Brands | $1,033.4 | 2,660 | (2.9)% | $71.7 | $44.4 | | Car Wash | $66.6 | 718 | 26.2% | $68.0 | $24.4 | | Corporate and Other | $59.3 | 216 | N/A | $83.0 | $(44.6) | Management Commentary & Corporate Developments Management highlighted the successful divestiture of the U.S. car wash business in April 2025, with proceeds primarily used for debt reduction, and announced Danny Rivera as the new CEO - Successfully completed the sale of the U.S. car wash business in early April, using the proceeds mainly to reduce debt13 - The company remains committed to paying down debt as the business grows3 - Danny Rivera has been appointed as the new CEO, with former CEO Jonathan Fitzpatrick remaining as Chair of the board4 Financial Outlook and Liquidity Fiscal Year 2025 Outlook Driven Brands reaffirmed its financial outlook for the fiscal year 2025, anticipating revenue between $2.05 billion and $2.15 billion and same-store sales growth of 1% to 3% Fiscal Year 2025 Outlook | Metric | 2025 Outlook | | :--- | :--- | | Revenue (in billions) | ~$2.05 - $2.15 | | Adjusted EBITDA (in millions) | ~$520 - $550 | | Adjusted Diluted EPS | ~$1.15 - $1.25 | - The company also expects same-store sales growth of 1% - 3% and net store growth of approximately 175 - 200 for fiscal year 202513 Capital and Liquidity The company concluded the first quarter with a strong liquidity position of $640.8 million, comprising $152.0 million in cash and cash equivalents and $488.7 million in undrawn capacity on its credit facilities - Ended Q1 with total liquidity of $640.8 million, consisting of $152.0 million in cash and $488.7 million of undrawn capacity on credit facilities7 Consolidated Financial Statements (Unaudited) Consolidated Statements of Operations For the first quarter ended March 29, 2025, total net revenue increased to $516.2 million from $482.0 million in the prior-year period, while operating income decreased to $61.3 million from $68.1 million Q1 2025 vs Q1 2024 Statement of Operations (in thousands) | Account | Three Months Ended Mar 29, 2025 | Three Months Ended Mar 30, 2024 | | :--- | :--- | :--- | | Total net revenue | $516,163 | $481,992 | | Total operating expenses | $454,898 | $413,910 | | Operating income | $61,265 | $68,082 | | Interest expense, net | $36,534 | $43,751 | | Net income from continuing operations | $17,490 | $11,552 | | Net income | $5,506 | $4,261 | | Diluted earnings per share | $0.04 | $0.02 | Consolidated Balance Sheets As of March 29, 2025, Driven Brands reported total assets of $5.30 billion, a slight increase from $5.26 billion at the end of fiscal 2024, with total liabilities remaining stable at $4.66 billion Balance Sheet Highlights (in thousands) | Account | March 29, 2025 | December 28, 2024 | | :--- | :--- | :--- | | Cash and cash equivalents | $152,042 | $149,573 | | Total current assets | $671,381 | $657,438 | | Total assets | $5,301,651 | $5,261,787 | | Long-term debt | $2,616,272 | $2,656,308 | | Total liabilities | $4,658,408 | $4,654,453 | | Total shareholders' equity | $643,243 | $607,334 | Consolidated Statements of Cash Flows In the first quarter of 2025, cash provided by operating activities increased to $75.1 million from $60.3 million in the prior year, while cash used in investing activities was $44.0 million and cash used in financing activities increased to $47.8 million Q1 2025 vs Q1 2024 Statement of Cash Flows (in thousands) | Account | Three Months Ended Mar 29, 2025 | Three Months Ended Mar 30, 2024 | | :--- | :--- | :--- | | Cash provided by operating activities | $75,131 | $60,283 | | Cash used in investing activities | $(44,012) | $(34,280) | | Cash used in financing activities | $(47,767) | $(33,220) | Reconciliation of Non-GAAP Financial Measures Adjusted Net Income and Adjusted EPS Reconciliation For Q1 2025, Adjusted Net Income from continuing operations was $44.2 million, up from $40.0 million in Q1 2024, with adjustments to GAAP net income including share-based compensation and amortization of acquired intangibles Reconciliation to Adjusted Net Income (in thousands) | Description | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Net income from continuing operations | $17,490 | $11,552 | | Share-based compensation expense | $11,788 | $11,861 | | Asset sale leaseback (gain) loss, net, etc. | $11,753 | $3,976 | | Amortization related to acquired intangible assets | $4,659 | $6,415 | | Other adjustments, net | $7,649 | $12,112 | | Tax impact of adjustments | $(9,160) | $(7,004) | | Adjusted net income from continuing operations | $44,179 | $40,012 | Adjusted EPS | Description | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Adjusted basic EPS from continuing operations | $0.27 | $0.25 | | Adjusted diluted EPS from continuing operations | $0.27 | $0.25 | Adjusted EBITDA Reconciliation Adjusted EBITDA for Q1 2025 was $125.1 million, a 2% increase from $122.8 million in the prior year, primarily driven by the Take 5 segment's contribution of $100.9 million Net Income to Adjusted EBITDA Reconciliation (in thousands) | Description | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Net income from continuing operations | $17,490 | $11,552 | | Income tax expense | $7,031 | $8,458 | | Interest expense, net | $36,534 | $43,751 | | Depreciation and amortization | $33,152 | $31,116 | | EBITDA | $94,207 | $94,877 | | Adjustments (Acquisition costs, Share-based comp, etc.) | $30,891 | $27,915 | | Adjusted EBITDA | $125,098 | $122,792 | Adjusted EBITDA by Segment (in thousands) | Segment | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Take 5 | $100,918 | $88,888 | | Franchise Brands | $44,383 | $47,589 | | Car Wash | $24,388 | $17,985 | | Corporate and Other | $(44,591) | $(31,670) | | Total Adjusted EBITDA | $125,098 | $122,792 | Supplemental Information Key Performance Indicators by Segment The company's total store count grew to 4,797 in Q1 2025, a net increase of 177 stores year-over-year, primarily driven by the Take 5 segment's expansion System-wide Sales & Store Count by Segment (Q1 2025) | Segment | System-wide Sales (in thousands) | Total Store Count | | :--- | :--- | :--- | | Take 5 | $387,488 | 1,203 | | Franchise Brands | $1,033,366 | 2,660 | | Car Wash | $66,640 | 718 | | Corporate and Other | $59,339 | 216 | | Total | $1,546,833 | 4,797 | System-wide Sales & Store Count by Segment (Q1 2024) | Segment | System-wide Sales (in thousands) | Total Store Count | | :--- | :--- | :--- | | Take 5 | $326,427 | 1,035 | | Franchise Brands | $1,074,541 | 2,647 | | Car Wash | $53,047 | 718 | | Corporate and Other | $58,889 | 220 | | Total | $1,512,904 | 4,620 |