Financial Data and Key Metrics Changes - Sales in the first quarter were up 0.7% year-over-year on an organic basis, or 2.3% on a daily organic basis, with strength in residential HVAC, aerospace, and energy markets [11][12] - Adjusted gross margin was 37.9%, up 50 basis points year-over-year, while adjusted EBITDA margin was 21.8%, up 30 basis points [13][14] - Adjusted earnings per share in the quarter was $2.15, up 7.5% year-over-year, or approximately 10% adjusted for the impact of the Industrial Systems divestiture [14] - Free cash flow generated in the quarter was nearly $86 million, up 32% year-over-year, contributing to a debt reduction of $164 million [14][32] Business Line Data and Key Metrics Changes - Automation and Motion Control (AMC) net sales were up 40 basis points year-over-year on an organic basis, driven by strength in aerospace and defense, and a return to growth in discrete automation [22] - Industrial Powertrain Solutions (IPS) net sales were down 3.4% year-over-year on an organic basis, reflecting weakness in the machinery off-highway market [25] - Power Efficiency Solutions (PES) net sales were up 8% year-over-year on an organic basis, largely due to strong growth in residential HVAC, which was up nearly 30% [28][29] Market Data and Key Metrics Changes - IPS sales in North America were up low single digits, while sales in China, Europe, and the rest of the world experienced weakness [26] - Orders in IPS were up nearly 9% in the first quarter, reflecting further outgrowth in attractive markets [26] - Organic orders in April were down 1.8%, largely due to aerospace project timing in AMC and anticipated order rebalancing in PES [12] Company Strategy and Development Direction - The company is focused on executing growth, synergy, and cash flow acceleration plans, while implementing robust tariff mitigation strategies [10][14] - The humanoid robot market is identified as a significant growth opportunity, with expectations of strong double-digit CAGRs for the next decade [15][19] - The company aims to leverage its automation portfolio to gain market share in the humanoid space, with recent wins worth over $20 million in annual sales [20] Management's Comments on Operating Environment and Future Outlook - Management expressed cautious optimism about improving growth prospects, noting three quarters of positive orders growth and a belief that most end markets are near trough levels of demand [7][9] - The company reaffirmed its earnings guidance for the year, despite macroeconomic uncertainties and tariff-related challenges [9][33] - Management emphasized confidence in achieving tariff-related cost and margin neutrality by mid-2026 [42][44] Other Important Information - The company ended the quarter with total debt of approximately $5.3 billion and net debt just below $5 billion [32] - The company plans to continue deploying the majority of its free cash flow to debt reduction in 2025 [32] Q&A Session Summary Question: Dynamics of long cycle versus short cycle orders - Management noted good momentum in winning longer cycle projects, especially in IPS, while short cycle orders remained stable [48][50] Question: Competitive positioning and share gains - Management highlighted a net advantageous position due to global manufacturing footprint and dual country sourcing strategies, expecting share opportunities to arise [53][54] Question: EBITDA margin outlook and drivers - Management expects a step-up in EBITDA margins in the second half, driven by mix, volume, and price synergies [58][59] Question: PES revenue outlook and conservatism in guidance - Management expressed caution regarding the second half outlook for PES due to macroeconomic factors, despite strong first quarter performance [63] Question: Mitigation of tariff impacts - Management outlined that supply chain realignments and production relocations are primary mitigation strategies, with pricing actions also contributing [69][70] Question: IPS margin guide and mix effects - Management confirmed that the margin guide for IPS is primarily affected by mix rather than tariff pressures [83] Question: Humanoid market opportunities - Management indicated that the $100 million opportunity funnel is global, with recent wins not primarily based in China [100]

Financial Data and Key Metrics Changes - Total sales for the first quarter declined 3.6% to $1,200,000,000, impacted by weakness in new residential construction, partially offset by growth in commercial and industrial sectors [8][17] - Adjusted EBITDA totaled $234,800,000, with an EBITDA margin of 19%, representing an 80 basis point decline compared to the previous year [19][20] - Volume declined 7.4%, with M&A contributing 2.6% and pricing contributing 1.2% to offset the decline [16][17] Business Line Data and Key Metrics Changes - The installation segment, comprising about 62% of total sales, reported a mid-single-digit sales decline, with sales down 6.7% to $745,500,000 [9][17] - Specialty Distribution segment, representing approximately 38% of total revenue, grew sales by 2.6% to $559,800,000, with volume declining 2.2% [9][17] - Recurring revenue in the Specialty Distribution segment accounts for about 25% of segment revenue, driven by certain industrial verticals [10] Market Data and Key Metrics Changes - New residential construction demand remained soft, with economic uncertainty eroding consumer confidence [5][6] - Commercial and industrial markets showed positive trends, particularly in data center construction and healthcare sectors [6][7] - Tariffs and trade restrictions are being monitored, with minimal direct impact anticipated on the company's business [7][22] Company Strategy and Development Direction - The company is focused on acquisitions as a top priority for capital allocation, recently closing the acquisition of SealRite [13][21] - Operational improvements include a footprint optimization project that consolidated 33 facilities, expected to drive ongoing efficiencies [12][18] - The company aims to leverage its core strengths and maintain a disciplined approach to drive shareholder returns [13][21] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the long-term prospects of the business despite current macroeconomic challenges [5][6] - The company anticipates continued meaningful growth in commercial and industrial sectors, while residential sales are expected to decline [24] - Full-year sales guidance is maintained at $5,050,000,000 to $5,350,000, with expectations for residential sales to be down high single digits [23][24] Other Important Information - The company has returned $215,600,000 in capital to shareholders through share buybacks [21] - Total liquidity at the end of the quarter was $746,400,000, with net debt totaling $1,070,000,000 [20][21] - The company published its 2024 sustainability report, emphasizing its commitment to sustainability and energy efficiency [15] Q&A Session Summary Question: Insights on commercial and industrial project financing - Management noted that projects previously delayed are now moving forward as stakeholders have accepted the current financing environment, aided by effective execution of their vertical market strategy [28][30] Question: Pricing dynamics and competitive advantage - Management indicated that while they do not expect new pricing in 2025, they have successfully held onto pricing and leveraged their size for competitive advantage [32][34][36] Question: Guidance on residential market outlook - Management acknowledged a slight reduction in residential outlook due to anticipated slower single-family sales, offset by stronger commercial and industrial sales [40][42] Question: Impact of footprint optimization on guidance - Management confirmed that the consolidation of facilities is expected to yield about $30,000,000 or more in annual savings, which is included in their guidance [48][49] Question: Material pricing trends - Management indicated that material prices have remained flattish, with some fluctuations, but they expect pricing to moderate as the year progresses [52][53] Question: Regional performance differences in housing markets - Management provided insights into varying market conditions across regions, noting that while some areas like Florida and Texas are soft, others like Dallas and the Midwest are showing strength [98][100][103]

Financial Data and Key Metrics Changes - Sales in Q1 2025 increased by 0.7% year-over-year on an organic basis, or 2.3% on a daily organic basis, with notable strength in residential HVAC, aerospace, and energy markets [10][12] - Adjusted gross margin was 37.9%, up 50 basis points year-over-year, while adjusted EBITDA margin was 21.8%, up 30 basis points [12][13] - Adjusted earnings per share in the quarter was $2.15, reflecting a 7.5% increase year-over-year, or approximately 10% adjusted for the impact of the Industrial Systems divestiture [13] - Free cash flow generated in the quarter was nearly $86 million, up 32% year-over-year, contributing to a $164 million debt repayment [13][33] Business Line Data and Key Metrics Changes - Automation and Motion Control (AMC) net sales were up 40 basis points year-over-year on an organic basis, driven by strength in aerospace and defense, with discrete automation returning to growth [22][23] - Industrial Powertrain Solutions (IPS) net sales decreased by 3.4% year-over-year on an organic basis, reflecting weakness in the machinery off-highway market, but orders were up nearly 9% [25][27] - Power Efficiency Solutions (PES) net sales increased by 8% year-over-year on an organic basis, primarily due to strong growth in residential HVAC, which was up nearly 30% [29][30] Market Data and Key Metrics Changes - IPS sales in North America were up low single digits, while sales in China, Europe, and the rest of the world experienced declines [26] - Orders in IPS were up nearly 9% in Q1, indicating strong performance in metals and mining and marine markets [27] - Organic orders in April were down 1.8%, largely due to aerospace project timing in AMC and anticipated order rebalancing in PES [11] Company Strategy and Development Direction - The company is focused on executing growth, synergy, and cash flow acceleration plans while implementing robust tariff mitigation strategies [8][10] - Regal Rexnord is well-positioned in the humanoid robot market, with expectations for significant growth opportunities in the coming years [14][19] - The company aims to achieve EBITDA margin neutrality by mid-2026 through effective tariff mitigation actions [40][43] Management's Comments on Operating Environment and Future Outlook - Management expressed cautious optimism about improving growth prospects, noting that most end markets are at or near trough levels of demand and starting to rebound [6][7] - The company reaffirmed its 2025 guidance, indicating confidence in its ability to manage through tariff-related uncertainties while maintaining a positive outlook on order momentum [34][45] - Management highlighted the potential for share gains due to tariff-related pricing and strategic opportunities [38][45] Other Important Information - The company ended the quarter with total debt of approximately $5.3 billion and net debt just below $5 billion, with plans to continue deploying free cash flow to debt reduction [33] - The company has a funnel of opportunities worth approximately $100 million in the humanoid robot market, with several recent wins worth over $20 million in annual sales [20][104] Q&A Session Summary Question: Dynamics of long cycle vs short cycle orders - Management noted good momentum in winning longer cycle projects, particularly in IPS, while short cycle orders remained stable [49][50] Question: Competitive positioning and share gains - Management emphasized a net advantageous position due to global manufacturing footprint and dual country sourcing strategies, expecting share opportunities to arise [53][54] Question: EBITDA margin outlook and tariff impacts - Management expects a step-up in EBITDA margins in the second half of the year, primarily driven by mix and volume improvements, with confidence in achieving EBITDA neutrality by year-end [59][60] Question: PES revenue outlook and conservatism in guidance - Management indicated that while pleased with Q1 performance, they remain cautious about the second half due to macroeconomic factors [63] Question: Mitigation of tariff impacts - Management outlined that supply chain realignments and production relocations are primary mitigation strategies, with pricing actions also contributing [70][71] Question: Humanoid market opportunities - Management clarified that the $100 million opportunity funnel is global, with recent wins primarily not based in China [102][104]

Financial Data and Key Metrics Changes - First quarter revenue was $777.9 million, a decline of 1.8% from the prior year quarter, but exceeded the midpoint of guidance by $13.1 million [19][4] - Adjusted EBITDA for the first quarter was $127.9 million, down 19.3% year-over-year, with an adjusted EBITDA margin of 16.4% [5][22] - Free cash flow was negative $100,000, an improvement from negative $38.9 million in the prior year quarter [5][23] Business Line Data and Key Metrics Changes - **Sleep Health Segment**: Revenue decreased by 2.8% to $316.4 million, with new setups at approximately 113,000, slightly below expectations [20] - **Respiratory Health Segment**: Revenue increased by 3.3% to $165.5 million, driven by stronger oxygen new setups [21] - **Diabetes Health Segment**: Revenue declined by 8% to $138.8 million, but showed signs of recovery with improved new starts and the lowest attrition rate in two years [21][12] - **Wellness at Home Segment**: Revenue increased by 0.7% to $157.2 million, offsetting revenue lost from disposed assets [22] Market Data and Key Metrics Changes - The addressable markets within the four segments are growing in aggregate by mid-single digits, driven by an aging U.S. population and increasing prevalence of chronic conditions [8][6] - The company serves 4.2 million patients across over 660 locations in all 50 states, indicating a strong geographic footprint [8] Company Strategy and Development Direction - The company aims to deliver consistent, sustainable organic growth by focusing on its four core segments and enhancing patient service excellence [6][10] - There is a commitment to improving operational workflows and patient experience, particularly in the Diabetes Health segment [10][12] - The company is reducing debt and exiting non-core product lines to sharpen strategic focus [14][24] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the ability to manage potential tariff impacts, indicating that current exposure is contained and manageable [15][16] - The company remains optimistic about the growth potential in the Diabetes Health segment and overall business despite current challenges [12][30] Other Important Information - The company has reduced its debt balance by $25 million in the first quarter, totaling $195 million over the last five quarters [13][24] - Full-year revenue expectations have been reduced by $40 million due to the sale of certain incontinence assets [25] Q&A Session Summary Question: Can you provide additional color on the improvement in the diabetes business? - Management noted positive movement in the pump business and sequential growth in new starts for continuous glucose monitors (CGMs) [28][29] Question: What is the situation with new starts in the sleep segment? - Management acknowledged a slight decline in new starts but emphasized confidence in addressing the issue through detailed plans [32][33] Question: Can you clarify the guidance changes related to asset sales? - The guidance change is exclusively for the incontinence asset sale, with no comments on the infusion asset sale until it is closed [29] Question: Are there opportunities for acquisitions in troubled markets? - Management confirmed ongoing M&A discussions and the potential for modest tuck-in acquisitions [60][59] Question: What is the company's exposure to tariffs for fiscal 2026? - Management indicated that they are feeling better about tariff exposure based on recent clarifications regarding product classifications [46][47] Question: How is the company positioned in the sleep market? - Management stated that improvements are needed in certain states to regain market share, with plans in place to address these challenges [54][55]

Financial Data and Key Metrics Changes - Driven Brands reported Q1 2025 revenue of $516 million, a 7.1% increase year-over-year, supported by 177 net new stores and 0.7% same-store sales growth, marking the seventeenth consecutive quarter of positive same-store sales growth [7][19] - Diluted adjusted EPS from continuing operations was $0.27, and adjusted EBITDA was $125 million, reflecting a 1.9% increase [8][21] - Operating income declined by $6.8 million to $61.3 million for Q1, while adjusted EBITDA margin decreased by approximately 120 basis points to 24.2% [20][21] Business Line Data and Key Metrics Changes - Take Five Oil Change achieved same-store sales growth of 8% and revenue growth of 15.3%, with adjusted EBITDA of $100.9 million, reflecting a 13.5% increase [10][22] - Franchise Brands experienced a 2.9% decline in same-store sales, with segment revenue down by $4.6 million or 6.1% [11][24] - The international car wash segment reported same-store sales growth of 26.2%, with adjusted EBITDA increasing by $6.4 million to $24.4 million [12][25] Market Data and Key Metrics Changes - System-wide sales for the company grew by 2.2% in Q1 to $1.5 billion [19] - The company closed a net of 19 units in the Franchise Brands segment due to the departure of a franchisee [19][24] - The U.S. Car Wash transaction closed on April 10, 2025, providing liquidity for debt repayment and simplifying the company's portfolio [13][28] Company Strategy and Development Direction - The company aims to utilize excess free cash flow to reduce debt, targeting a net leverage ratio of three times by the end of 2026 [7][14] - Driven Brands is focused on maintaining growth in its Take Five business while managing the performance of its franchise segment [32][33] - The divestiture of the U.S. Car Wash business is expected to support the company's outlook for net capital expenditures, which are projected to be approximately $70 million less than the previous year [13][14] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's ability to deliver results despite macroeconomic uncertainties, emphasizing the essential nature of their services [15][17] - The company remains cautious about the potential impact of tariffs on margins and demand but believes its diversified sourcing strategy will mitigate risks [14][30] - Management reiterated its fiscal 2025 outlook, expecting moderate growth in Take Five and continued softness in the discretionary business, Mako [31][32] Other Important Information - The company has paid down nearly $290 million in debt since the beginning of 2025, with total debt repaid exceeding $5 billion since 2024 [8][27] - Free cash flow for the quarter was $27.6 million, driven by strong operating performance [26] Q&A Session Summary Question: Can you discuss the margin management for Take Five? - Management noted that margin pressure was due to increased repair and maintenance and rent expenses, but they remain confident in the team's ability to manage costs effectively [35][36] Question: What is the outlook for Franchise Brands if same-store sales softness continues? - Management indicated that while there are limited levers in a franchise model, they are optimistic about the long-term trajectory of the franchise brands despite current softness [37][38] Question: What are the expectations for Q2 comps? - Management refrained from providing specific quarter guidance but indicated they expect to see trends stabilize, with a potential for 1% to 3% growth based on current trends [42][44] Question: How is the Auto Glass business performing? - Management confirmed that the Auto Glass business is still in the early stages of growth, with positive developments in securing insurance and commercial accounts [50][63] Question: Are there any signs of increased price competition in the Quick Lubes market? - Management reported no significant material changes in competitive pricing dynamics, although some localized competition may exist [100] Question: How does the company view the impact of economic downturns on its business? - Management emphasized that the majority of their services are nondiscretionary, which positions them well during economic uncertainty, as consumers will still need vehicle maintenance [90][112]

Financial Data and Key Metrics Changes - Total sales for the first quarter declined 3.6% to $1,200 million, impacted by weakness in new residential construction, partially offset by growth in commercial and industrial sectors [6][15] - Adjusted EBITDA totaled $234.8 million, with an EBITDA margin of 19%, representing an 80 basis point decline compared to the previous year [19][20] - Volume declined 7.4%, with M&A contributing 2.6% and pricing contributing 1.2% [15][16] Business Line Data and Key Metrics Changes - The installation segment, accounting for about 62% of total sales, reported a mid-single-digit sales decline, driven by the residential end market [7][16] - Specialty Distribution segment, representing approximately 38% of total revenue, grew sales by low single digits, with acquisitions adding 3.4% and pricing contributing 1.4% [7][18] - The Service Partners business experienced declines due to softened residential demand, while the DI mechanical insulation business in the U.S. and Canada showed healthy growth [9][10] Market Data and Key Metrics Changes - New residential construction demand remained soft, with economic uncertainty eroding consumer confidence, negatively impacting housing demand [4][5] - Commercial and industrial markets showed positive trends, particularly in data center construction and healthcare sectors [5][6] - The company noted that tariffs and trade restrictions have minimal direct impact on its business, with potential tariff impacts estimated at less than 5% of cost of sales [22] Company Strategy and Development Direction - The company is focused on acquisitions as a top priority for capital allocation, recently closing the acquisition of SealRite [12][21] - Operational improvements include a footprint optimization project that consolidated 33 facilities, expected to drive ongoing efficiencies [11][48] - The company remains committed to returning capital to shareholders, having repurchased nearly 694,000 shares in the first quarter [12][21] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the long-term prospects of the business despite current macroeconomic challenges [5][14] - The company anticipates continued meaningful growth in commercial and industrial sectors, while residential sales are expected to decline by high single digits for the full year [23][24] - Management highlighted the importance of monitoring the economic environment closely, particularly regarding tariffs and their potential impacts [22] Other Important Information - The company celebrated its ten-year anniversary as a public company, emphasizing the importance of its workforce and culture [13] - The 2024 sustainability report was published, reflecting the company's commitment to energy efficiency and sustainability [14] Q&A Session Summary Question: What has improved in the commercial and industrial side? - Management noted that projects have moved forward as teams have accepted the current financing environment, and execution of the vertical market strategy has contributed to this improvement [28][30] Question: How does pricing dynamics affect the company? - Management indicated that while they do not expect new pricing in 2025, they have been able to hold on to pricing due to strong execution and relationships with manufacturers [32][36] Question: What is the outlook for residential sales? - The company has lowered its residential sales outlook to down high single digits, driven by expectations of slower single-family sales [40][42] Question: How does the footprint optimization impact the business? - The consolidation of facilities is expected to yield about $30 million or more in annual savings, which is already included in the guidance [49][50] Question: What is the current state of the M&A pipeline? - The M&A pipeline remains healthy with a variety of opportunities across all segments, and management is actively engaging with potential sellers [59][109] Question: How are different regions performing in the housing market? - Management provided insights into regional performance, noting that while Florida and Texas are slower, areas like Dallas and the Midwest are showing positive trends [96][99]

Financial Data and Key Metrics Changes - First quarter sales were $284 million, down 17% year-over-year due to repositioning actions in Performance Chemicals and weak industrial demand [10] - Adjusted gross profit increased by 10% to $129 million, with gross margin improving over 1,000 basis points [10] - Adjusted EBITDA rose by $17 million, with margins improving from 21.9% to 32.1%, marking the fourth consecutive quarter of year-over-year margin improvement [11][12] - Free cash flow improved by $44 million year-over-year to $15 million, reflecting benefits from repositioning actions [12] Business Line Data and Key Metrics Changes - Performance Materials saw higher sales due to favorable regional and product mix, with EBITDA margins remaining near 54% [13][15] - Advanced Polymer Technologies (APT) experienced lower overall sales, but EBITDA increased by $3 million, with margins rising to 29.6% [19] - Performance Chemicals sales decreased by 35% primarily due to repositioning actions, but segment EBITDA showed year-over-year improvement of $10 million [21][22] Market Data and Key Metrics Changes - North American auto production is expected to decline by approximately 10% year-over-year, impacting guidance for the Performance Materials segment [8][15] - Volume growth was observed in China due to government incentives driving higher vehicle sales, while North American volumes were down year-over-year [13][14] Company Strategy and Development Direction - The company is focused on disciplined execution of its strategy to optimize the portfolio and drive business performance, aiming to create significant value for shareholders [8][24] - The strategic review of Industrial Specialties and the North Charleston refinery is progressing well, with expectations to communicate a path forward before the end of the year [22] Management's Comments on Operating Environment and Future Outlook - Management is actively monitoring developments related to tariffs and macro demand conditions, believing the direct impact on the business will be minimal [7][24] - Despite headwinds, the company is confident in its ability to deliver strong profitability in 2025 and beyond [8][24] Other Important Information - The company has introduced a new President for APT, who brings over 25 years of experience in transforming business profitability [20] - The average age of automobiles in the U.S. is at an all-time high, suggesting a future need for replacements [15] Q&A Session Summary Question: Pricing in Performance Materials business - Management indicated that they have a strong position and are seeing encouraging performance, with pricing being a lever they can pull if needed [29][30][32] Question: Update on strategic review of Industrial Specialties - The process is progressing well with a broad degree of interest, and management is being deliberate in their approach [34][36] Question: Strategic and operational priorities in a volatile environment - The focus remains on disciplined execution, optimizing business performance, and reducing leverage [40][41] Question: Cash flow forecast amidst potential auto production decline - Management is confident in free cash flow generation even in a declining sales environment due to effective working capital management [43][44] Question: Impact of EV slowdown on forecasts - While EVs are slowing down, management remains optimistic about the adoption of new technologies and their investment in Nexeon [47][48][50] Question: Filtration market capacity for potential volume shifts - The filtration market is sizable and can absorb underutilized capacity, although it is a lower margin market compared to auto [53][54] Question: Long-term leverage goals - The long-term target for leverage remains between 2 to 2.5 times [58]

Financial Data and Key Metrics Changes - First quarter revenue was $777.9 million, a decline of 1.8% from the prior year quarter, but exceeded the midpoint of guidance by $13.1 million [18][4] - Adjusted EBITDA for the first quarter was $127.9 million, down 19.3% year-over-year, with an adjusted EBITDA margin of 16.4% [21][5] - Free cash flow was negative $100,000, an improvement from negative $38.9 million in the prior year quarter [5][22] Business Line Data and Key Metrics Changes - **Sleep Health Segment**: Revenue decreased 2.8% to $316.4 million, with new setups at approximately 113,000, slightly below expectations [19][18] - **Respiratory Health Segment**: Revenue increased 3.3% to $165.5 million, driven by stronger oxygen new setups during a severe flu season [20][18] - **Diabetes Health Segment**: Revenue declined 8% to $138.8 million, but showed signs of recovery with improved new starts and the lowest attrition rate in two years [20][12] - **Wellness at Home Segment**: Revenue increased 0.7% to $157.2 million, offsetting revenue lost from disposed assets [21] Market Data and Key Metrics Changes - The addressable markets within the four segments are believed to be growing in aggregate by mid-single digits, driven by an aging U.S. population and increasing prevalence of chronic conditions [6][7] - The company serves 4.2 million patients across over 660 locations in all 50 states, indicating a broad geographic footprint [7] Company Strategy and Development Direction - The company aims to deliver consistent, sustainable organic growth by focusing on its four core segments and enhancing patient service excellence [6][10] - There is a commitment to improving operational workflows and patient experience, particularly in the Diabetes Health segment [10][12] - The company is reducing debt and exiting non-core product lines to sharpen strategic focus [14][23] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the ability to manage potential impacts from international trade policies and tariffs, indicating that current exposure is contained [15][16] - The company remains optimistic about the future of its Diabetes Health segment, citing improvements in processes and patient service [12][30] Other Important Information - The company has reduced its debt balance by $25 million in the first quarter, totaling $195 million over the last five quarters [13][23] - Full-year revenue expectations have been reduced by $40 million due to the sale of certain incontinence assets [24] Q&A Session Summary Question: Can you provide additional color on the improvement in the diabetes business? - Management noted positive movement in the pump business and a second consecutive quarter of growth in new starts for continuous glucose monitors (CGMs) [28][30] Question: What is the situation with new starts in the sleep segment? - Management acknowledged a slight decline in new starts but emphasized that it is not due to external factors, and plans are in place to address performance in certain geographies [32][34] Question: Can you clarify the guidance changes related to asset sales? - The guidance change is exclusively for the incontinence asset sale, with no comments on the infusion asset sale until it is closed [29][30] Question: What are the expectations for the second quarter? - Management expects flat revenue year-over-year with adjusted EBITDA margins between 18.3% and 19.3%, impacted by previous revenue mix shifts [36][38] Question: Are there opportunities for acquisitions in troubled markets? - Management confirmed ongoing M&A discussions and the potential for modest tuck-in acquisitions to enhance market position [62][63]

Financial Data and Key Metrics Changes - Driven Brands reported Q1 2025 revenue of $516 million, a 7.1% increase year-over-year, supported by 177 net new stores and 0.7% same-store sales growth, marking the seventeenth consecutive quarter of positive same-store sales growth [5][18] - Adjusted EBITDA for Q1 increased by 1.9% to $125.1 million, with an adjusted EBITDA margin of 24.2%, a decrease of approximately 120 basis points compared to the previous year [20][21] - The company generated diluted adjusted EPS from continuing operations of $0.27, up $0.02 from Q1 last year, driven by strong operating performance and continued debt paydown [6][20] Business Line Data and Key Metrics Changes - Take Five Oil Change achieved same-store sales growth of 8% for the quarter, marking its nineteenth consecutive quarter of positive same-store sales, with revenue growth of 15.3% and adjusted EBITDA growth of 13.5% [8][21] - The Franchise Brands segment experienced a 2.9% decline in same-store sales, primarily due to softness in the Mako brand, with segment revenue declining by 6.1% [10][22] - The international car wash segment reported same-store sales growth of 26.2%, with revenue and adjusted EBITDA increasing by 2536% year-over-year [11][24] Market Data and Key Metrics Changes - System-wide sales for the company grew by 2.2% in Q1 to $1.5 billion [18] - The company closed a net of 19 units in the Franchise Brands segment due to the negotiated departure of a franchisee [17] Company Strategy and Development Direction - The company aims to utilize excess free cash flow to reduce debt, with a target of reducing net leverage to three times by the end of 2026 [5][12] - The divestiture of the U.S. Car Wash business is expected to simplify the portfolio and support the goal of reducing net CapEx [12][28] - The company remains focused on growing the Take Five business and maintaining the strength of its franchise segment while generating cash and executing its deleveraging plan [32][33] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's ability to deliver despite macroeconomic uncertainties, highlighting the essential nature of their services [14][32] - The company anticipates that the second half of 2025 will contribute a percentage in the low 50s for full-year revenue and adjusted EBITDA [32] - Management noted that while there may be softness in discretionary services like Mako, the overall business model remains resilient due to the nondiscretionary nature of most services [91][92] Other Important Information - The company has paid down nearly $290 million in debt since the beginning of 2025, with total debt repaid exceeding $5 billion since the start of 2024 [6][29] - The company extended its revolving credit facility for an additional five years, maintaining a capacity of $300 million [26][27] Q&A Session Summary Question: Regarding Take Five's EBITDA margin and potential for margin increase if same-store sales slow - Management indicated that margin pressure was due to increased repair and maintenance and rent expenses, but they remain confident in the team's ability to manage costs effectively [38][39] Question: Update on Franchise Brands and potential for driving EBITDA amidst softness - Management noted that while there are limited levers in a franchise business, they are optimistic about the long-term trajectory of the franchise brands despite current softness [40] Question: Expectations for Q2 comps and potential acceleration in the back half of the year - Management refrained from providing specific quarter guidance but indicated that they expect some moderation in growth due to the larger base created by new openings [44][46] Question: Update on the Auto Glass business performance - Management confirmed that the Auto Glass business is still in the early stages of growth, with positive developments in securing insurance and commercial accounts [50][52] Question: Observations on oil change customer behavior amidst economic pressures - Management reported strong performance in the Take Five business, with no significant changes in customer trends despite economic pressures [59][61] Question: Insights on the impact of tariffs on franchisee costs - Management acknowledged the potential impact of tariffs but indicated that they have not seen significant effects on costs thus far [72][73] Question: Discussion on the performance of the Mako brand and collision repair services - Management confirmed that Mako is experiencing softness due to its discretionary nature, but they believe they can get the business back on track in the second half of the year [81][84]

欧盟委员会副主席谢夫乔维奇：另有1700亿欧元对美出口可能受关税影响。 ...