Driven Brands (US:DRVN)2025-11-04 12:22Financial Performance - Driven Brands reported Q3 2025 revenue of $535.7 million, a 6.6% increase year-over-year[2] - Net income from continuing operations was $60.9 million, or $0.37 per diluted share, compared to a net loss of $11.5 million, or $(0.07) per diluted share, in the prior year[3] - Adjusted EBITDA for the quarter was $136.3 million, up $4.3 million from the previous year[3] - Net income for the nine months ended September 27, 2025, was $113,932,000, a significant increase from $19,473,000 for the same period in 2024, representing a growth of 484%[20] - Adjusted net income from continuing operations for the three months ended September 27, 2025, was $56,195,000, up from $38,081,000 in the prior year, representing a 47.6% increase[27] - Adjusted EBITDA for the three months ended September 27, 2025, was $136,260,000, compared to $131,943,000 for the same period in 2024, reflecting a 3.5% increase[32] Sales and Revenue Growth - System-wide sales increased by 4.7% to $1.6 billion, driven by a 2.8% rise in same store sales and a 3.5% increase in store count[2] - The Take 5 segment revenue increased by 14%, marking the 19th consecutive quarter of growth in same store sales[1] - Total system-wide sales for the three months ended September 27, 2025, reached $1,625,432,000, a significant increase from $1,552,422,000 for the same period in 2024, representing a year-over-year growth of approximately 4.7%[36] - Total system-wide sales for the nine months ended September 27, 2025, were $4,797,037,000, compared to $4,641,368,000 for the same period in 2024, representing an increase of approximately 3.4%[37] Outlook and Projections - The company narrowed its fiscal year 2025 revenue outlook to approximately $2.10 - $2.12 billion and Adjusted EBITDA to approximately $525 - $535 million[10] - Same store sales growth is expected at the low end of the original range of 1% to 3%, with net store growth projected at approximately 175 to 200[10] - Adjusted EBITDA and Adjusted EPS are included in the company's Fiscal Year 2025 Outlook, although specific figures were not provided due to the uncertainty of future events[24] Cash Flow and Liquidity - The net leverage ratio improved to 3.8x Adjusted EBITDA, with total liquidity of $755.7 million[7] - Cash provided by operating activities for the nine months ended September 27, 2025, was $234,745,000, compared to $208,508,000 for the same period in 2024, indicating an increase of approximately 12.5%[20] - The company experienced a net change in cash, cash equivalents, and restricted cash of $(5,518,000) for the period, compared to an increase of $33,344,000 in the prior year[21] Assets and Liabilities - Total assets decreased to $4,152,930,000 as of September 27, 2025, down from $5,261,787,000 as of December 28, 2024, reflecting a decline of approximately 21%[19] - Total current liabilities increased to $648,148,000 as of September 27, 2025, compared to $433,895,000 as of December 28, 2024, marking an increase of about 49%[19] - Total liabilities decreased to $3,359,440,000 as of September 27, 2025, from $4,654,453,000 as of December 28, 2024, representing a decline of approximately 28%[19] - The company reported an accumulated deficit of $(888,651,000) as of September 27, 2025, an improvement from $(1,002,583,000) as of December 28, 2024[19] Segment Performance - The company reported a total revenue of $107,307,000 from the Take 5 segment for the three months ended September 27, 2025, an increase from $93,287,000 in the prior year[35] - Franchise Brands generated $49,734,000 in revenue for the three months ended September 27, 2025, slightly down from $50,196,000 in the same period of 2024[35] - The Car Wash segment reported revenue of $15,030,000 for the three months ended September 27, 2025, compared to $16,000,000 in the prior year[35] - Corporate and Other segments reported a loss of $35,811,000 for the three months ended September 27, 2025, compared to a loss of $27,540,000 in the same period of 2024[35] Store Count and Expansion - The total store count as of September 27, 2025, was 4,888, which includes 3,165 franchise stores, 1,006 company-operated stores, and 717 independently operated stores[36] - The number of franchise stores increased from 3,078 in September 2024 to 3,165 in September 2025, showing a growth of 2.8%[36] - The company plans to continue expanding its store count and enhancing its service offerings to drive future growth[36] Strategic Initiatives - The company expects to continue incurring acquisition-related costs and non-core items as part of its strategic transformation initiatives[33] - The company is focusing on new product development and technology advancements to improve customer experience and operational efficiency[36]