Driven Brands (US:DRVN)2022-04-27 20:26Financial Data and Key Metrics Changes - Consolidated same-store sales increased by 16% compared to Q1 2021 [7] - Revenue rose by 42% to $468 million [7] - Adjusted EBITDA increased by 52% to $119 million [7] - Adjusted EPS grew by 47% to $0.28 [7] - System-wide sales reached $1.3 billion [32] Business Line Data and Key Metrics Changes - Maintenance segment posted same-store sales growth of 19% [37] - Car Wash segment achieved same-store sales growth of 7% [37] - Glass segment reported same-store sales growth of 14% [39] - Platform Services segment experienced same-store sales growth of 31% [40] Market Data and Key Metrics Changes - The total addressable market for the company is over $300 billion, with less than 5% market share [4] - The company added 114 net new stores in Q1, including 79 Auto Glass Now sites [33] Company Strategy and Development Direction - The company aims for at least $850 million of adjusted EBITDA by 2026, with a focus on exceeding this target [6][29] - Growth priorities include Quick Lube, Car Wash, and Glass, leveraging a diversified portfolio for revenue and profit growth [14] - The company is pursuing a strategy of franchising, building, and acquiring new stores [6][14] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in consumer demand remaining stable despite inflationary pressures [8][44] - The company is not experiencing material impacts from rising gas prices or labor challenges [8][9] - Management remains optimistic about the balance of 2022, expecting continued strong performance [43][45] Other Important Information - The company ended Q1 with $271 million in cash and cash equivalents, and $397 million of undrawn capacity on revolving credit facilities, totaling $668 million in liquidity [42] - The net leverage ratio at the end of Q1 was 4.8 times [42] Q&A Session Summary Question: Insights on same-store sales split between car count and inflation - Management noted positive car count and ticket growth, with performance skewed more towards ticket due to inflation and complexity of vehicles [48][49] Question: Car Wash segment EBITDA margin sustainability - The Car Wash segment's margin expansion was driven by strong volume in the international business, particularly due to dust storms [51][52] Question: Impact of rising interest rates on M&A and leverage - Rising interest rates do not change the company's M&A strategy, which focuses on improving acquired assets [60][62] Question: Price increases in U.S. Car Wash and subscription attrition - No systematic price increases have been taken in the U.S. Car Wash business, and subscription attrition rates remain stable [63][65] Question: Guidance philosophy and future updates - The company plans to provide annual guidance and update it mid-year based on performance and M&A activity [70][71] Question: Supply chain pressures in Platform Services - Platform Services is experiencing significant supply chain pressures, but the company is managing these challenges effectively [72][73] Question: Surprises from the Auto Glass Now acquisition - The biggest surprise has been the growth potential in the glass repair market, driven by calibration services required for modern vehicles [78][79]