Driven Brands Holdings Inc., operators of service brands in the service and repair, oil change, car wash, collision repair and glass replacement segments, reported a 13% increase in revenues for the fiscal year in its financial results for the fourth quarter and fiscal year ended December 30, 2023.
Fiscal Year 2023 Highlights
For the fiscal year, Driven Brands delivered revenue of $2.3 billion, up 13% versus the prior year. System-wide sales were $6.3 billion, up 12% versus the prior year driven by 7% same-store sales growth and 4% net store growth. The Company added 183 net new stores during fiscal 2023.
Figrues in USD.
During the fiscal year, the Company recognized an $851.0 million non-cash goodwill impairment in the Car Wash segment as well as $132.9 million in non-cash asset impairment charges and lease terminations. These drove a Net Loss of $745.0 million or a Net Loss of $4.53 per diluted share versus Net Income of $43.2 million or Net Income of $0.25 per diluted share in the prior year. Adjusted Net Income1 was $155.9 million and Adjusted EPS1 was $0.93, a decrease of 25% and 24%, respectively from the prior year. Adjusted EBITDA1 was $535.1 million, up 4% versus the prior year. Cash provided by operating activities increased 19% to $235.2 million compared to $197.2 million in the prior year.
“We are happy to announce that we delivered on our updated 2023 outlook for all financial metrics, while also pivoting our strategy and adapting to the dynamic market. In the fourth quarter, our performance was driven by strong execution in our Maintenance segment, specifically in our industry-leading Take 5 Oil Change business, and we’re encouraged by the progress made in our U.S. Glass and U.S. Car Wash businesses,” said Jonathan Fitzpatrick, President and Chief Executive Officer.
“Our goals in the second half of 2023 were to deliver on our full-year outlook and set ourselves up for a successful 2024, and we did just that. In 2024, we are focused on accelerating growth, reducing debt, and making sure that Driven has the right assets to execute on both our short- and long-term goals,” Fitzpatrick concluded.
Fourth Quarter 2023 Highlights
For the fourth quarter, Driven Brands delivered revenue of $553.7 million, up 3% versus the prior year. System-wide sales were $1.5 billion, up 3% versus the prior year driven by 4% same-store sales growth. Net Loss was $13.1 million or a Net Loss of $0.08 per diluted share versus Net Income of $27.4 million, or $0.16 per diluted share in the prior year. Adjusted Net Income was $30.7 million and Adjusted EPS was $0.19, a decrease of 27% and 24%, respectively from the prior year. Adjusted EBITDA was $129.0 million, down 1% versus the prior year.
| Fiscal Year 2023 Key Performance Indicators by Segment | |||||
| System-wide Sales (in millions) | Store Count | Same-Store Sales | Revenue(in millions) | Segment Adjusted EBITDA1(in millions) | |
| Maintenance | $ 1,899.8 | 1,786 | 9.2 % | $ 960.4 | $ 332.8 |
| Car Wash | 591.8 | 1,108 | (5.6) % | 597.7 | 143.0 |
| Paint, Collision & Glass | 3,389.6 | 1,888 | 11.4 % | 500.4 | 141.5 |
| Platform Services2 | 402.6 | 206 | N/A | 216.0 | 80.6 |
| Corporate / Other | N/A | N/A | N/A | 29.5 | |
| Total | $ 6,283.7 | 4,988 | 7.4 % | $ 2,304.0 | |
| Fourth Quarter 2023 Key Performance Indicators by Segment | |||||
| System-wide Sales (in millions) | Store Count | Same-Store Sales | Revenue(in millions) | Segment Adjusted EBITDA1(in millions) | |
| Maintenance | $ 470.8 | 1,786 | 4.7 % | $ 246.0 | $ 87.5 |
| Car Wash | 131.9 | 1,108 | (3.3) % | 133.2 | 31.0 |
| Paint, Collision & Glass | 835.3 | 1,888 | 6.4 % | 117.0 | 31.7 |
| Platform Services2 | 74.7 | 206 | N/A | 50.7 | 18.6 |
| Corporate / Other | N/A | N/A | N/A | 6.7 | |
| Total | $ 1,512.7 | 4,988 | 3.9 % | $ 553.7 | |
Capital and Liquidity
The Company ended the fourth quarter with total liquidity of $319.0 million consisting of $176.5 million in cash and cash equivalents and $142.5 million of undrawn capacity on its variable funding securitization senior notes and revolving credit facility. This does not include the additional $135.0 million Series 2022 Class A-1 Notes that expand the Company’s variable funding note borrowing capacity when the Company elects to exercise them, assuming certain conditions continue to be met.
Fiscal Year 2024 Outlook
Beginning in fiscal 2024, the Company changed its definitions for Adjusted Net Income, Adjusted EPS, and Adjusted EBITDA. Specifically, the Company will no longer include straight-line rent adjustments in its non-GAAP adjustments. See “Reconciliation of Non-GAAP Financial Measures” below for additional details of these changes and a reconciliation of the definitions prior to fiscal 2024 to allow for like-for-like comparisons to the new definitions for all periods presented.
The table below sets forth the Company’s fiscal year 2023 results and 2024 outlook using the revised methodology to calculate Adjusted EBITDA, and Adjusted EPS.
| 2023 Results | 2024 Outlook | |
| Revenue | $2.30 billion | ~$2.35 – $2.45 billion |
| Adjusted EBITDA1 | $516.9 million | ~$535 – $565 million |
| Adjusted EPS1 | $0.85 | ~$0.88 – $1.00 |
The Company also expects:
- Same-store sales growth of 3% to 5%
- Net new store growth of approximately 205 to 220
- Maintenance: approximately 165 to 185 stores of which approximately 65% will be franchise and 35% company-operated
- Car Wash: approximately 5 to 10 stores all from the international business
- Paint Collision & Glass: approximately 25 to 35 stores of which approximately 85% will be franchise and 15% company-operated
- Maintenance: approximately 165 to 185 stores of which approximately 65% will be franchise and 35% company-operated
The Company has not included future M&A in its outlook for fiscal year 2024.
1 Adjusted Net Income, Adjusted EPS, and Adjusted EBITDA are non-GAAP financial measures. Beginning in fiscal 2024, the company has made certain changes to how it defines these metrics that impact the comparability to prior periods. See “Reconciliation of Non-GAAP Financial Measures” for additional information on changes to these non-GAAP financial measures, a reconciliation to the most comparable GAAP measures, and a reconciliation between the differences in metric definitions for all periods presented. Forward-looking estimates of Adjusted EBITDA and Adjusted EPS are made in a manner consistent with the relevant definitions and assumptions noted herein.
2 Platform Services same store sales were removed as a Key Performance Indicator as sales included within the calculation represented less than 20% of Platform Services revenue.
Conference Call
Driven Brands will host a conference call to discuss fourth quarter and year-end 2023 results today, Thursday, February 22, 2024, at 8:30 a.m. ET. The call will be available by webcast and can be accessed by visiting Driven Brands’ Investor Relations website at investors.drivenbrands.com. A replay of the call will be available for at least three months.
About Driven Brands
Driven Brands, headquartered in Charlotte, NC, is the largest automotive services company in North America, providing a range of consumer and commercial automotive needs, including paint, collision, glass, vehicle repair, oil change, maintenance and car wash. Driven Brands is the parent company of some of North America’s leading automotive service businesses including Take 5 Oil Change, Take 5 Car Wash, Meineke Car Care Centers, Maaco, 1-800-Radiator & A/C, Auto Glass Now, and CARSTAR. Driven Brands has approximately 5,000 locations across 13 countries, and services over 70 million vehicles annually. Driven Brands’ network generates approximately $2.3 billion in annual revenue from approximately $6.3 billion in system-wide sales.
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