Core Insights - Headwaters Capital Management's third-quarter 2025 investor letter focused on AI and reported a portfolio return of -2.7% (-2.9% net), underperforming the Russell Mid Cap Index which gained +5.3% [1] Company Summary - Driven Brands Holdings Inc. (NASDAQ:DRVN) was highlighted as a key stock in the investor letter, providing automotive services to retail and commercial customers [2] - The one-month return for Driven Brands Holdings Inc. was -12.49%, while its shares increased by 4.42% over the last 52 weeks [2] - As of October 13, 2025, Driven Brands Holdings Inc. closed at $15.13 per share, with a market capitalization of $2.486 billion [2] - The company was recommended for a starter position by Headwaters Capital Management during the quarter [3]

Core Insights - Alpine Income Property Trust, Inc. has acquired a three-property portfolio for $2.8 million, with a weighted average going-in cash yield of 8.5% [1][2] Property Details - The acquired portfolio consists of properties located in Illinois, Virginia, and Louisiana, totaling 8,890 square feet [2] - Two properties are net leased to Hardee's, a national quick-service restaurant chain, while the third is net leased to Jiffy Lube, a leading automotive services franchise [2] Company Overview - Alpine Income Property Trust, Inc. is a publicly traded real estate investment trust (REIT) focused on delivering attractive risk-adjusted returns and dependable cash dividends [3] - The company invests in, owns, and operates a diversified portfolio of single-tenant net leased commercial income properties, primarily leased to high-quality publicly traded and credit-rated tenants [3]

Core Insights - SunCar Technology Group Inc. is a leader in the B2B automotive after-sales services and online insurance market in China, particularly for electric vehicles [2] - The company utilizes AI and blockchain technology to enhance vehicle services and customer experience [4] - SunCar has established partnerships with 20 electric vehicle companies, indicating a strong presence in the global EV market [4] Company Overview - Founded in 2007, SunCar operates online platforms that connect drivers with various automotive services and insurance options [2] - The company's cloud-based platform allows enterprise clients to manage customer databases and access a wide range of services from numerous providers [2] - Breaux Walker, the Chief Strategy Officer, has extensive experience in business development and corporate finance, particularly in technology and fintech sectors [3] Industry Trends - The global electric vehicle market is experiencing significant innovation, with companies like SunCar leading the way in integrating advanced technologies [4] - The current environment in China for electric vehicles is favorable, supporting the growth of companies like SunCar [4]

Core Insights - Autozi Internet Technology (Global) Ltd. reported a significant revenue increase of 65.9% year-over-year, reaching US$79.9 million for the first half of fiscal year 2025, primarily driven by the growth in its auto parts and accessories business [4][12]. - The company's strategic focus has shifted towards the auto parts and accessories sector, which now constitutes 98.7% of total revenues, up from 48.5% in the previous year, indicating a successful repositioning of its business model [4][12]. - Despite the revenue growth, the company experienced an operating loss of US$8.1 million, widening from US$2.1 million in the same period of the previous year, largely due to increased operating expenses [5][17]. Financial Performance - Total revenues increased to US$79.9 million, a rise of US$31.7 million compared to US$48.1 million in the same period of fiscal year 2024 [12]. - Gross profit improved to US$1.4 million, up from US$0.1 million, with gross margin increasing to 1.7% from 0.2% [14]. - Operating expenses surged by 336.9% to US$9.5 million, driven by higher selling and marketing costs associated with the auto parts and accessories business [15]. Strategic Directions - The company is focusing on two main strategic directions: electrification and servicization, aiming to align with the growing electric vehicle market and enhance its automotive supply chain service platform [6][9]. - The electrification strategy is particularly relevant as electric vehicle sales in China have surpassed those of fuel-powered cars, presenting a significant growth opportunity [6]. - The servicization strategy aims to create a more resilient and scalable business model through innovation-driven services and recurring revenue streams [7][9]. Challenges and Outlook - The company acknowledges challenges related to profitability and liquidity, but is addressing these through operational efficiency and strategic focus [8][10]. - As of March 31, 2025, Autozi reported an accumulated deficit of US$134.8 million and negative working capital of US$19.0 million, raising concerns about its ability to continue as a going concern [18][21]. - The management is implementing plans to improve operational efficiency, control costs, and seek additional capital to support ongoing operations [19][20].

Financial Data and Key Metrics Changes - Driven Brands reported approximately $6.5 billion in system-wide sales and $2 billion in revenue, primarily from non-discretionary services [4][5] - The company aims for mid-30% EBITDA margins, with some quarter-over-quarter variations noted [41][42] Business Line Data and Key Metrics Changes - Take 5 Oil Change has grown from 40 units in 2016 to 1,300 locations today, with system-wide sales expected to reach $1.4 billion [9] - Same-store sales growth for Take 5 has been in the mid to high single-digit range, driven by store maturation, new store openings, and increased ticket sizes [12][13][14] - Non-oil change revenue currently accounts for about 20% of sales, with an attach rate in the upper 40% [15][17] Market Data and Key Metrics Changes - The collision repair industry is facing a 10% year-over-year decline in estimate counts, attributed to claim avoidance and high total loss rates [48] - The average age of vehicles in the U.S. is at an all-time high of 12.8 years, benefiting maintenance businesses like Meineke [54] Company Strategy and Development Direction - Driven Brands focuses on growth through Take 5, with plans to open over 150 new locations annually, primarily through franchising [25][36] - The company is committed to maintaining its promise of a 10-minute oil change experience while exploring new service offerings that fit operational and financial criteria [26][27] Management's Comments on Operating Environment and Future Outlook - Management reiterated a positive outlook for the second half of the year despite some headwinds, particularly in discretionary spending [69] - The company believes it can thrive in the automotive service market through the 2020s and 2030s, even with the rise of electric vehicles [31] Other Important Information - Driven Brands operates a diversified platform, with only one business segment exposed to electric vehicles, while the rest remain EV-agnostic [29] - The franchise segment generates robust cash flow and EBITDA margins north of 60%, which supports growth in other areas [43][44] Q&A Session Summary Question: What is the outlook for the core consumer in the second half of the year? - Management reiterated their outlook, noting some headwinds but feeling comfortable with their projections [69] Question: How does pricing impact your business? - The company has not had to pass along price increases due to its non-discretionary nature, with growth driven by premiumization rather than price hikes [72] Question: What is the expectation for market consolidation in the industry? - The trend of consolidation among a few players acquiring smaller ones is expected to continue, without significant acceleration [74]

Financial Data and Key Metrics Changes - Driven Brands reported approximately $6.5 billion in system-wide sales and $2 billion in revenue, primarily from non-discretionary services [4][5] - The company aims for mid-30% EBITDA margins, with some quarter-over-quarter variations noted [42][43] Business Line Data and Key Metrics Changes - Take 5 Oil Change has grown from 40 units in 2016 to 1,300 locations today, with system-wide sales projected to reach $1.4 billion [9] - Same-store sales growth for Take 5 has been consistent in the mid to high single-digit range, driven by store maturation, advertising, and premiumization of services [12][14] - Non-oil change revenue currently accounts for about 20% of total revenue, with an attach rate in the upper 40% [15][16] Market Data and Key Metrics Changes - The collision repair industry is facing a 10% year-over-year decline in estimate counts due to claim avoidance and high total loss rates, but Driven Brands is gaining market share [49][50] - The average age of vehicles in the U.S. is at an all-time high, benefiting vehicle maintenance services like Meineke [55] Company Strategy and Development Direction - Driven Brands plans to open over 150 new locations annually, with a focus on franchise growth, aiming for a two-to-one ratio of franchise to company-operated stores [25][36] - The company is committed to maintaining its promise of a 10-minute oil change experience while exploring new service offerings that fit operational and financial criteria [26][27] Management's Comments on Operating Environment and Future Outlook - Management reiterated a positive outlook for the second half of the year despite some headwinds, particularly in discretionary spending [70] - The company believes it can thrive in the automotive service market through the 2020s and 2030s, even with the rise of electric vehicles [31] Other Important Information - Driven Brands' franchise segment generates robust cash flow with EBITDA margins exceeding 60%, which supports growth in other areas like Take 5 [44][58] - The company is leveraging its position in the fragmented auto glass market, focusing on insurance and commercial opportunities for growth [63][66] Q&A Session Summary Question: What is the outlook for the core consumer in the second half of the year? - Management reiterated their outlook for the second half, noting some headwinds but feeling comfortable with their projections [70] Question: How do you see pricing elasticity affecting your business? - The company noted that they operate in a non-discretionary market, allowing them to pass along prices if necessary, but they have not had to do so significantly [73][74] Question: What are your expectations for market consolidation in the industry? - Management expects the trend of consolidation among a few players to continue, without significant acceleration or deceleration [75]

Core Viewpoint - Daktronics, Inc. has announced the nomination of Mark Bowser and Neil Glat for election to its Board of Directors at the upcoming 2025 Annual Meeting of Shareholders, indicating a strategic move to enhance board capabilities and governance [1][4]. Group 1: Nominees' Background - Mark Bowser has extensive experience as a former CFO and EVP at Cox Automotive, where he led finance and strategy teams, and has a strong background in accounting, financial planning, and mergers and acquisitions [2][5]. - Neil Glat is a seasoned executive with a background in sports and entertainment, having served as President of the New York Jets and held senior roles at the NFL, focusing on corporate development and strategy [3][6]. Group 2: Board Composition Changes - The board will not nominate Kevin McDermott for re-election due to a Cooperation Agreement with Alta Fox Capital Management, marking a significant change in board composition [4]. - McDermott has been a director since 2015 and has contributed significantly as Chair of the Audit Committee and Lead Director [4]. Group 3: Company Overview - Daktronics is the world's largest supplier of large-screen video displays, electronic scoreboards, and related control systems, serving various sectors including live events and transportation [8].

Financial Performance - Sales increased to $301.0 million, a 2.7% increase compared to $293.2 million in Q1FY25 [13] - Same-store sales increased by 5.7% compared to a decrease of 9.9% in Q1FY25 [11, 13] - Gross margin decreased by 170 bps to 35.5% [13] - Adjusted diluted EPS remained flat at $0.22 [13] Strategic Initiatives - Successfully closed 145 underperforming stores by the end of May [6] - Expects store optimization plan to reduce total sales by approximately $45 million in fiscal 2026 [19] - Reduced inventory levels by approximately $10 million [11] Capital Allocation and Liquidity - Received approximately $3 million in divestiture proceeds [17] - Capital expenditures totaled approximately $7 million [17] - Principal payments for financing leases amounted to approximately $10 million [17] - Paid approximately $9 million in dividends [17] - Availability under the credit facility was approximately $398 million, with cash and equivalents of approximately $8 million as of June 2025 [17]

Core Insights - CARFAX has been recognized as a Top Workplace by USA Today for the fourth consecutive year, and has also received accolades from the Washington Post and the St. Louis Post-Dispatch [2][3] - The awards are based on anonymous employee surveys conducted by an independent third party, evaluating workplace experiences, policies, and practices [2] - CARFAX has also received five additional distinctions in the Top Workplaces program, including awards for Leadership, Compensation & Benefits, Work-Life Flexibility, Innovation, and Purpose & Values [3] Company Culture - The CEO of CARFAX emphasizes the importance of empowering, supporting, and inspiring employees, highlighting the excellence of the company's culture [3] - Employees appreciate the benefits of working at CARFAX, including a strong work ethic and a healthy work-life balance, with perks such as Summer Fridays [4] - The company is moving to new state-of-the-art offices at Reston Station, which is designed to foster collaboration, innovation, and continued growth [4] Company Overview - CARFAX, part of S&P Global Mobility, has been a leader in providing vehicle history information since 1984, helping millions of people shop, buy, service, and sell used cars with confidence [6] - The company owns the world's largest vehicle history database and is recognized nationally as a top workplace [6][7]

Core Insights - Investors are increasingly focusing on artificial intelligence (AI) as a significant opportunity for growth, similar to past successes with companies like Amazon and Nvidia [1] Group 1: Company Summaries - **The Honest Company**: Specializes in personal and baby care products with clean ingredients, reported $97 million in revenue for Q1 2025, a 13% year-over-year increase, and is positioned for profitable growth [4] - **Stride**: A technology-based learning company with an 18% year-over-year revenue increase to $613 million in Q3 fiscal 2025, and profits of $99 million, with analysts predicting a 14% rise in stock price [6] - **Revolve Group**: An online fashion retailer utilizing AI, reported a 10% year-over-year sales increase and a 5% rise in net income, with mixed analyst opinions on stock price targets [8][9] - **Nomad**: A European frozen foods company with a 6% compound annual growth rate over the past decade, despite a recent sales decrease, all analysts rate it a buy with a target price 40% higher than current levels [10] - **Driven Brands**: Offers automotive services, reported a 7% sales increase in Q1, and plans to open 200 new stores in 2025, with a 30% average price target increase anticipated [11] - **Oddity Tech**: A cosmetics and skincare company using AI, reported a 27% revenue increase in Q1, but is seen as potentially expensive in the short term [12] - **Urban Outfitters**: Experienced an 11% revenue increase in Q1 fiscal 2026, with earnings per share nearly doubling, and all analysts expect further stock price increases [13] - **Shake Shack**: Reported a 10.5% sales increase in Q1 and more than doubled net income, with a positive long-term outlook despite a recent stock price surge [14] - **Academy Sports**: A sporting goods retailer facing short-term pressure but has long-term growth potential through new store openings and digital expansion, with a 20% average price target increase [16] - **Chef's Warehouse**: A specialty foods distributor with a 9% revenue increase in Q1 and earnings per share rising from $0.05 to $0.25, all analysts predict an 8% to 20% stock price increase [17][18]