Core Viewpoint - A class action lawsuit has been filed against Driven Brands Holdings Inc. due to the company's announcement of financial statement restatements, which led to a significant drop in stock price [1][2]. Group 1: Company Overview - Driven Brands Holdings Inc. is a holding company for various automotive aftermarket services, including Take 5 Oil Change, Meineke Car Care Centers, Maaco, and Auto Glass Now [1]. - The company has acknowledged material weaknesses in its internal control over financial reporting [2]. Group 2: Financial Issues - Driven Brands announced that its financial statements for fiscal years 2023 and 2024, as well as quarterly financial statements for 2025, could not be relied upon and would need to be restated [2]. - The restatement was attributed to a range of errors that resulted in the overstatement of cash and revenue while understating expenses for fiscal years 2023 and 2024 [2]. Group 3: Stock Performance - Following the announcement of the financial restatement, Driven Brands' stock price fell by 40%, from $16.61 per share on February 24, 2026, to $9.99 per share on February 25, 2026 [2]. Group 4: Legal Action - Investors who purchased Driven Brands' stock during the class period (May 9, 2023, to February 24, 2026) and sustained losses are encouraged to participate in the class action lawsuit [3]. - The deadline for investors to submit a motion to be appointed as lead plaintiff is May 8, 2026 [3]. Group 5: Law Firm Background - Barrack, Rodos & Bacine has over four decades of experience in prosecuting securities law class actions, achieving significant recoveries for investors in past cases [4]. - The firm has secured some of the largest recoveries in U.S. history, including $6.19 billion for WorldCom investors and $3.32 billion for Cendant investors [4].

Core Viewpoint - Driven Brands is facing significant financial challenges, leading to a downgrade in its stock rating and a substantial decline in stock price [2][5]. Financial Performance - Driven Brands' stock is currently priced at $11.60, reflecting a decrease of $5.01 or -30.16% [4][5]. - The stock has experienced a 35% decline following the announcement of material errors in its financial statements [2][5]. - The company's market capitalization is approximately $1.91 billion, with a trading volume of 14.87 million shares [4]. Financial Statement Issues - The company has identified material errors in its financial statements for 2023 and 2024, including lease recording problems, expense misclassification, and cash account discrepancies [3][5]. - As a result of these issues, Driven Brands will restate its financials for the past two years and delay its Q4 2025 results [3][5].

Core Viewpoint - Driven Brands has announced material errors in its previously issued consolidated financial statements for the fiscal years ended December 28, 2024, and December 30, 2023, leading to a significant drop in its stock price by 35% [1][4]. Financial Reporting Issues - The company identified errors related to the completeness and accuracy of lease recordings, misclassification of supply and other expenses, and unreconciled cash account differences [1][4]. - Driven Brands stated that its financial statements for the past two years "should not be relied upon" and will need to be restated [4]. Impact on Financial Performance - Driven Brands has not reported a profit in three years and carries approximately $2.6 billion in net debt [6]. - Analysts had anticipated that 2025 would be a turnaround year for profitability, but this outlook is now uncertain due to the recent developments [6][7]. Future Reporting and Compliance - The company plans to file a Form 12b-25 with the SEC to request a 15-day extension for filing its Annual Report for fiscal 2025 [4]. - There is uncertainty regarding whether Driven Brands will meet this extended deadline [5].

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, attributed to claim avoidance and high total loss rates [49] - 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 focuses on growth through new unit openings, targeting 150+ locations annually, with a preference for a 2:1 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 align with operational and financial fit [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 operates a diversified platform, with only a portion of its business exposed to electric vehicles, while the rest remains EV-agnostic [29] - The company has a strong cash flow generation from its franchise segment, which supports growth initiatives in higher-margin businesses like Take 5 [44][58] 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 it operates in a non-discretionary market, allowing for price adjustments without significant elasticity response [73][74] Question: What are the expectations for market consolidation in the industry? - Management expects the trend of consolidation among a few players to continue, without significant acceleration [75]

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]

Financial Data and Key Metrics Changes - For Q4 2024, Driven Brands reported revenue of $564 million, a 2% increase year-over-year, with adjusted EBITDA of $130.7 million and diluted adjusted EPS of $0.30 [10][11] - For the full fiscal year 2024, revenue reached $2.3 billion, with adjusted EBITDA of $553 million, reflecting a 2% and 7% increase respectively compared to the previous year [11][57] - The company achieved a net leverage ratio of 4.4x in Q4, improving from 4.5x in Q3, and paid down approximately $248 million of debt throughout the year [19][54] Business Line Data and Key Metrics Changes - The Take 5 Oil Change segment experienced 9.2% same-store sales growth in Q4, marking the 18th consecutive quarter of positive growth, with a total of 174 net new stores opened in fiscal year 2024 [21][43] - The Paint, Collision & Glass segment generated revenue of $97.3 million and adjusted EBITDA of $33 million in Q4, with same-store sales increasing by 1% despite a 7% decline in industry-wide collision repair estimates [39] - The Platform Services segment reported revenue of $40.2 million and adjusted EBITDA of $16.3 million in Q4 [40] Market Data and Key Metrics Changes - System-wide sales for Driven Brands grew by 5.5% in Q4 to $1.6 billion, with total revenue for the quarter increasing by 1.9% year-over-year [49] - The company noted that lower-income households are most affected by ongoing inflationary pressures, which may impact consumer spending in 2025 [12][60] Company Strategy and Development Direction - The company plans to focus on three key priorities for 2025: delivering the 2025 outlook, utilizing cash flow to reduce debt, and active portfolio management [9][27] - A definitive agreement has been made to sell the U.S. car wash business, with the transaction expected to close in Q2 2025 [13][41] - The company will adopt a simplified segment structure starting Q1 2025, with Take 5 Oil Change becoming a stand-alone segment to better reflect its growth potential [14][66] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in navigating the dynamic macroeconomic environment, despite anticipated pressures on consumer spending [12][60] - The company expects a more normalized level of same-store sales growth in 2025, while still maintaining a strong growth outlook for Take 5 Oil Change [37][86] - Management highlighted the importance of investing in frontline employees and maintaining high levels of customer loyalty [36][38] Other Important Information - The company has sold approximately $208 million of assets in fiscal year 2024, with over 75% of the divestiture process completed [18][54] - The company plans to provide quarterly unaudited pro forma results for FY 2024 in the new segment structure by mid-March 2025 [68] Q&A Session Summary Question: Can you provide color on the 2025 outlook and expected growth? - Management indicated that the U.S. car wash business contributed approximately $50 million of adjusted EBITDA, and the growth in 2025 will primarily come from Take 5 Oil Change, which has a strong unit pipeline and customer engagement [73][74] Question: What is the expected breakdown of unit growth between segments? - The majority of the expected net unit growth of 175 to 200 units will come from the Take 5 pipeline, with a historical trend of 2/3 being franchise stores and 1/3 company-owned [105][108] Question: What drove the increase in corporate costs in Q4? - The increase was attributed to performance-based compensation and share-based compensation related to IPO grants, reflecting strong company performance [102][103] Question: What is the plan for the Auto Glass Now segment? - Management confirmed that the TPA deal signed in Q4 2024 will start generating revenue in Q1 2025, with a focus on growing regional and national insurance partnerships [117][118] Question: Is there an appetite for M&A following the car wash sale? - Management stated that while they have historically been acquisitive, the focus will be on organic growth, but they remain open to accretive opportunities in the automotive aftermarket space [128]