Financial Data and Key Metrics Changes - For Q3 2021, revenue increased by 39% to $371 million compared to Q3 2020, with adjusted EBITDA rising by 42% to $98 million and adjusted EPS increasing by 30% to $0.26 per share [9][36][42] - Consolidated same-store sales grew by 13% year-over-year, driven by a healthy balance of new customers and increased repeat rates [10][36] Business Line Data and Key Metrics Changes - The maintenance segment posted positive same-store sales growth of 17%, benefiting from targeted digital marketing and increased car count [43] - The car wash segment achieved a same-store sales growth of 6%, with wash club subscriptions increasing to over 49% of sales [45] - The Paint, Collision & Glass segment reported positive same-store sales growth of 11%, supported by improved direct repair programs with insurance customers [48] Market Data and Key Metrics Changes - System-wide sales reached $1.2 billion for the quarter, with a strong performance across all segments contributing to growth [36][37] - Vehicle miles traveled (VMT) showed a positive trend, rebounding in September after a slight dip in August due to concerns over the Delta variant [11] Company Strategy and Development Direction - The company aims for organic double-digit revenue growth and adjusted EBITDA growth, leveraging its asset-light business model to generate significant cash for acquisitions [8][34] - The company has a robust pipeline for new unit openings, with over 1,000 units identified for future growth, including 250 expected openings in 2022 [17][20] - M&A is a core strength, with the company having acquired 70 car wash units in 2021, contributing to a total of 288 units in the U.S. [22][25] Management's Comments on Operating Environment and Future Outlook - Management remains optimistic about the consumer outlook for 2022, expecting VMT to return to pre-pandemic levels [12] - The company raised its full-year adjusted EBITDA guidance to $350 million, reflecting strong performance in Q3 [31][55] - Management acknowledged ongoing challenges from inflation and supply chain disruptions but emphasized confidence in the company's ability to navigate these issues [62][88] Other Important Information - The company closed a $450 million whole business securitization issuance, improving its debt portfolio and providing liquidity for strategic growth [52][53] - The company has a total liquidity of $268 million, which will support its growth initiatives [51] Q&A Session All Questions and Answers Question: Store growth and segment performance - Management confirmed that some underperforming operators were pruned from the coalition business, impacting net store growth in the short term, but emphasized the importance of maintaining strong relationships with insurance partners [59][60] Question: Full-year EBITDA guidance and conservatism - Management acknowledged a conservative approach to guidance, maintaining Q4 forecasts despite raising the full-year EBITDA estimate due to strong Q3 performance [61][63] Question: Car wash segment performance - Management noted that the car wash segment remains strong despite a slight slowdown, with confidence in long-term potential and ongoing unit growth [68] Question: Maintenance segment margins - Management indicated that improvements in labor trends are expected to continue, contributing to margin expansion as the business shifts more towards franchising [70][71] Question: Inflation impact - Management reported mid-single-digit cost inflation year-to-date but has successfully passed these costs to consumers, maintaining strong average ticket prices [80] Question: Market share gains - Management highlighted strong performance across all segments, particularly in maintenance and car wash, indicating significant market share gains [85][86]
Driven Brands (DRVN) - 2021 Q3 - Earnings Call Transcript