Driven Brands Holdings Inc
For the period ended Sep 28, 2024. Filed Nov 7, 2024.
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A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Sep 28, 2024 · Filed Nov 7, 2024
DRVN$11.89-1.6%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2024-06-29; filed 2024-08-08.
0001804745-24-000020
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2024-09-28; filed 2024-11-07.
0001804745-24-000029
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 213 previous paragraphs and 226 current paragraphs.
99 unchanged; 67 reworded; 59 added; 44 removed; 3 previous and 1 current paragraphs rearranged.
Tables are not compared: 22 previous and 24 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (59)
Current report
•Net loss decreased $784 million to $15 million or $0.09 loss per diluted share, primarily relating to decreased impairment charges, net new store growth, and improved margins across the Paint, Collision & Glass, Car Wash, and Platform Services segments, partially offset by increased employee related benefit costs, including share-based compensation expense, reduced margins within the Maintenance segment, and increased income tax expense.
Current report
(f) Relates to a goodwill impairment within the Car Wash segment. Refer to Note 6 for additional information.
Current report
(h) Represents charges incurred related to the Company’s partial repayment of Senior Secured Notes in conjunction with the sale of its Canadian distribution business.
Current report
Net Loss
Current report
We recognized a net loss of $15 million, or $0.09 loss per diluted share, for the three months ended September 28, 2024 compared to a net loss of $799 million, or $4.83 loss per diluted share, for the three months ended September 30, 2023. The improvement of approximately $784 million was primarily due to the following:
Current report
•a non-cash goodwill impairment charge in the prior year period of $851 million;
Current report
•non-cash asset impairment charges of $24 million in the current period relating to assets held for sale as well as property and equipment and right-of-use assets at closed stores compared to $111 million in the prior year period, which primarily related to Car Wash assets including approved store closures, underperforming stores, and assets held for sale;
Current report
•positive same store sales across all segments, net new store openings, primarily within the Maintenance segment, and operating margin improvements within the Paint, Collision & Glass, Car Wash, and Platform Services segments; and
Current report
•a positive impact from foreign exchange.
Current report
These increases were partially offset by:
Current report
•an increase in tax expense of $162 million, primarily relating to impairment charges in the prior year;
Current report
•increased payroll and employee benefit costs, including $10 million of additional share-based compensation expense primarily relating to the modification of pre-IPO awards in the fourth quarter of 2023; and
Current report
•positive same store sales across all segments, net new store openings, primarily within the Maintenance segment, and operating margin improvements within the Paint, Collision & Glass, Car Wash, and Platform Services segments; and
Current report
•a positive impact from foreign exchange.
Current report
•positive same store sales across all segments, net new store openings, primarily within the Maintenance segment, and operating margin improvements within the Paint, Collision & Glass, Car Wash, and Platform Services segments.
Current report
Franchise royalties and fees increased $2 million, or 4%, primarily due to the addition of 101 net new franchised stores and increased franchise system-wide sales of $27 million, or 2%, driven by franchise same store sales growth within the Paint, Collision & Glass and Maintenance segments, partially offset by decreased franchise system-wide sales within the Platform Services Segment.
Current report
Company-operated store expenses decreased $20 million, or 8%, primarily due to improved labor efficiency, reduced property related expenses, and lower inventory costs in the current period.
Current report
Independently-operated store expenses (comprised entirely of expenses from the international car wash locations) increased $4 million, or 14%, primarily related to variable costs associated with the increase in sales and increased rent charges.
Current report
Selling, general and administrative expenses increased $27 million, or 22%, primarily due to increased payroll and employee benefit costs, including $10 million of additional share-based compensation expense primarily relating to the modification of pre-IPO awards in the fourth quarter of 2023, marketing expenses, closed store expenses, and third-party legal and professional fees. This increase was partially offset by decrease in the loss on sale or disposal of assets of $8 million in the current period compared to a $14 million loss in the prior year period.
Current report
Depreciation and amortization expense decreased $2 million, or 5%, primarily relating to a one-time adjustment of $4 million for property and equipment placed in service in the prior year quarter.
Current report
Goodwill Impairment
Current report
Goodwill impairment charge of $851 million in the three months ended September 30, 2023 is directly attributable to our Car Wash segment. For more information, refer to Note 6 in our consolidated financial statements included in this 10-Q.
Current report
Interest expense, net increased $2 million, or 6%, primarily due to costs associated with the issuance of the 2024-1 Senior Notes of $2 million as well as the increased fixed rate of 6.372% associated with the 2024-1 Senior Notes issued in July 2024 compared to the fixed rate of 4.739% associated with Series 2018-1 Senior Notes, which was repaid concurrently with the issuance of the 2024-1 Senior Notes, partially offset by reduced Term Loan interest as a result of principal payments of $101 million in the current year.
Current report
Foreign Currency Transaction Loss, Net
Current report
Loss on Debt Extinguishment
Current report
Represents charges incurred related to the Company’s partial repayment of Senior Secured Notes in conjunction with the sale of its Canadian distribution business.
Current report
Income Tax Expense (Benefit)
Current report
Results of Operations for the Nine Months Ended September 28, 2024 Compared to the Nine Months Ended September 30, 2023
Current report
Net Income (Loss)
Current report
•a non-cash goodwill impairment charge in the prior year period of $851 million;
Current report
•non-cash asset impairment charges of $56 million in the current period, which primarily related to assets held for sale as well as property and equipment and right-of-use assets at closed stores in the current period compared to $117 million in the prior year period, which primarily related to Car Wash assets including store closures, underperforming stores, and assets held for sale;
Current report
•a net gain of $8 million primarily comprised of the sale of assets held for sale, a gain on the sale of of our Canadian distribution business, and sale leaseback transactions, partially offset primarily by the disposals of property and equipment in our Car Wash business during the nine months ended September 28, 2024 compared to a loss of $2 million during the nine months ended September 30, 2023; and
Current report
•positive same store sales within the Maintenance and Paint, Collision & Glass segments, net new store openings, primarily within the Maintenance segment, and operating margin improvements within the Maintenance, Paint, Collision & Glass, and Platform Services segments.
Current report
These increases were partially offset by:
Current report
•increased tax expense of $154 million, primarily relating to impairment charges in the prior year;
Current report
•increased payroll and employee benefit costs, including $26 million of additional share-based compensation expense primarily relating to the modification of pre-IPO awards in the fourth quarter of 2023;
Current report
•increased marketing expenditures; and
Current report
•positive same store sales within the Maintenance and Paint, Collision & Glass segments, net new store openings, primarily within the Maintenance segment, and operating margin improvements within the Maintenance, Paint, Collision & Glass, and Platform Services segments.
Current report
•positive same store sales within the Maintenance and Paint, Collision & Glass segments, net new store openings, primarily within the Maintenance segment, and operating margin improvements within the Maintenance, Paint, Collision & Glass, and Platform Services segments.
Current report
Franchise royalties and fees increased $4 million, or 3%, primarily due to the addition of 101 net new franchised stores and an increase in franchise system-wide sales of $139 million, or 4%, driven by franchise same store sales growth within the Paint, Collision & Glass and Maintenance segments, partially offset by decreased franchise system-wide sales within the Platform Services Segment.
Showing the first 40 of 59 passages. Open the source sections for the rest.
Removed paragraphs (44)
Previous report
•Net Income decreased $8 million to $30 million or $0.18 per diluted share, primarily relating to increased payroll and employee benefit costs, impairment charges, and reduced gains recognized relating to decreased sale leaseback activity in the current period, partially offset by lower interest expense and income tax expense.
Previous report
Net Income
Previous report
We recognized net income of $30 million, or $0.18 per diluted share, for the three months ended June 29, 2024 compared to $38 million, or $0.22 per diluted share, for the three months ended July 1, 2023. The decrease of approximately $8 million was primarily due to the following:
Previous report
•non-cash impairment charges of $12 million relating to assets held for sale in the current period compared to $6 million in the prior year period, primarily related to certain property and equipment and operating lease right-of-use assets at closed and underperforming locations;
Previous report
•a gain primarily relating assets held for sale and sale leaseback transactions of approximately $3 million during the three months ended June 29, 2024 compared to a gain of $14 million during the three months ended July 1, 2023 primarily relating to sale leaseback transactions;
Previous report
•increased payroll and employee benefit costs, including $6 million of additional share-based compensation expense primarily relating to the modification of pre-IPO awards in the fourth quarter of 2023; and
Previous report
These decreases were partially offset by:
Previous report
•decreased interest expense of $9 million, primarily due to reduced interest associated with the Tax Receivable Agreement and interest income;
Previous report
•a decrease in tax expense of $2 million; and
Previous report
•decreased interest expense of $9 million, primarily due to reduced interest associated with the Tax Receivable Agreement and interest income; and
Previous report
Franchise royalties and fees remained flat primarily due to increased franchise royalty and fees revenue within the Maintenance segment as a result of a $26 million, or 9%, increase in franchised system-wide sales from same store sales growth and 93 net new franchise stores, offset by decreased franchise and royalty fees revenue within the Paint, Collision & Glass segment due to a $12 million, or 1%, decrease in franchise system-wide sales.
Previous report
Company-operated store expenses decreased $3 million, or 1%, primarily due to decreased company-operated store sales resulting in reduced variable costs, partially offset by increased rent expense at properties converted to leases through sale leasebacks that occurred during the prior 12 months.
Previous report
Independently-operated store expenses, which are entirely related to the Car Wash segment, remained flat due to reduced variable costs associated with the decrease in volume and a favorable impact from foreign exchange offset by increased rent and property charges.
Previous report
Selling, general and administrative expenses increased $24 million, or 25%, primarily due to the reduction in gains recognized in the current period compared to the prior period. The Company recognized a gain relating to assets held for sale and sale leaseback transactions of approximately $3 million during the three months ended June 29, 2024 compared to a gain of $14 million during the three months ended July 1, 2023, primarily relating to sale leaseback transactions. In addition, payroll and employee benefit costs, including $6 million of additional share-based compensation expense primarily relating to the modification of pre-IPO awards in the fourth quarter of 2023, increased in the current period.
Previous report
Depreciation and amortization expense decreased $1 million, or 2%, due to finite-lived intangible assets that fully amortized during the prior 12 months.
Previous report
Interest expense, net decreased $9 million, or 22%, primarily due to reduced interest expense associated with the Tax Receivable Agreement and interest income in the current period.
Previous report
Foreign Currency Transaction Loss (Gain), Net
Previous report
Income Tax Expense
Previous report
Results of Operations for the Six Months Ended June 29, 2024 Compared to the Six Months Ended July 1, 2023
Previous report
Net Income
Previous report
•non-cash impairment charges of $32 million, primarily relating to assets held for sale in the current period compared to $6 million in the prior year period primarily related to certain property and equipment and operating lease right-of-use assets at closed and underperforming locations;
Previous report
•increased payroll and employee benefit costs, including $16 million of additional share-based compensation expense primarily relating to the modification of pre-IPO awards in the fourth quarter of 2023;
Previous report
•increased marketing expenditures;
Previous report
•increased depreciation and amortization expenses of $4 million relating to capital expenditures and new store openings that occurred in the prior 12 months; and
Previous report
These decreases were partially offset by:
Previous report
•decreased tax expense of $7 million;
Previous report
•a gain primarily relating to the sale of a business, assets held for sale, and favorable lease terminations of approximately $16 million during the six months ended June 29, 2024 compared to a gain relating to sale leaseback transactions of $12 million during the six months ended July 1, 2023;
Previous report
•decreased interest expense, net, of $3 million, primarily due to reduced interest associated with the Tax Receivable Agreement and interest income; and
Previous report
•decreased tax expense of $7 million;
Previous report
•decreased interest expense, net, of $3 million, primarily due to reduced interest associated with the Tax Receivable Agreement and interest income; and
Previous report
Franchise royalties and fees increased $2 million, or 2%, primarily due to same store sales growth and a net increase of 87 franchised stores, partially offset by a decrease in average royalty rates primarily within the Paint, Collision & Glass segment. Franchised system-wide sales increased $112 million, or 5%.
Previous report
Company-operated store expenses decreased $4 million, or 1%, primarily due to the decreased company-operated store sales resulting in reduced variable costs and margin improvements primarily within the Maintenance segment, partially offset by increased rent expense at properties converted to leases through sale leasebacks that occurred during the prior 12 months.
Previous report
Independently-operated store expenses, which are entirely related to the Car Wash segment, remained flat due to reduced variable costs associated with the decrease in volume offset by increased rent and property charges.
Previous report
Supply and other expenses decreased $3 million, or 3%, due to decreased product and payroll costs associated with supply and other revenue.
Previous report
Selling, general, and administrative expenses increased $28 million, or 14%, primarily due to payroll and employee benefit costs, including $16 million of additional share-based compensation expense primarily relating to the modification of pre-IPO awards in the fourth quarter of 2023 as well as increased marketing expenditures. These expenses were partially offset by a gain primarily relating to the sale of a business, assets held for sale, and favorable lease terminations of approximately $16 million during the six months ended June 29, 2024 compared to a gain relating to sale leaseback transactions of $12 million during the six months ended July 1, 2023.
Previous report
Interest expense, net decreased $3 million, or 4%, primarily due to reduced interest expense associated with the Tax Receivable Agreement and interest income.
Previous report
Foreign Currency Transaction Loss (Gain), Net
Previous report
Income Tax Expense
Previous report
Maintenance Segment Adjusted EBITDA increased $18 million, or 21%, primarily due to revenue growth, cost management, and operational leverage.
Previous report
Car Wash Segment Adjusted EBITDA decreased by $6 million, or 15%, primarily driven by decreased same store sales within company-operated stores and increased costs relating to marketing expenditures and rent associated with sale leaseback transactions during the prior 12 months.
Showing the first 40 of 44 passages. Open the source sections for the rest.
Reworded paragraphs (67)
Previous wording
The following discussion and analysis for Driven Brands Holdings Inc. and Subsidiaries (“Driven Brands,” “the Company,” “we,” “us,” or “our”) should be read in conjunction with our consolidated financial statements and the related notes to our consolidated financial statements included elsewhere in this quarterly report. We operate on a 52 or 53-week fiscal year, which ends on the last Saturday in December. The three months ended June 29, 2024 and July 1, 2023 were both 13 weeks periods. The six months ended June 29, 2024 and July 1, 2023 were both 26 week periods.
Current wording
The following discussion and analysis for Driven Brands Holdings Inc. and Subsidiaries (“Driven Brands,” “the Company,” “we,” “us,” or “our”) should be read in conjunction with our consolidated financial statements and the related notes to our consolidated financial statements included elsewhere in this quarterly report. We operate on a 52 or 53-week fiscal year, which ends on the last Saturday in December. The three months ended September 28, 2024 and September 30, 2023 were both 13 weeks periods. The nine months ended September 28, 2024 and September 30, 2023 were both 39 week periods.
Previous wording
Driven Brands is the largest automotive services company in North America with a growing and highly-franchised base of more than 5,000 locations across 49 U.S. states and 13 other countries. Our scaled, diversified platform fulfills an extensive range of core retail and commercial automotive needs, including paint, collision, glass, and repair services, as well as a variety of high-frequency services, such as oil changes and car washes.
Current wording
Driven Brands is the largest automotive services company in North America with a growing and highly-franchised base of more than 5,100 locations across 49 U.S. states and 13 other countries. Our scaled, diversified platform fulfills an extensive range of core retail and commercial automotive needs, including paint, collision, glass, and repair services, as well as a variety of high-frequency services, such as oil changes and car washes.
Previous wording
We have continued to grow our base of consistent recurring revenue by adding new franchised and company-operated stores and same store sales growth. Driven Brands generated net revenue of approximately $612 million and $1.2 billion during the three and six months ended June 29, 2024, respectively, an increase of 1% compared to the prior year comparative periods, and system-wide sales of approximately $1.7 billion and $3.3 billion during the three and six months ended June 29, 2024, respectively, an increase of 1% and 3% from the prior year comparative periods.
Current wording
We have continued to grow our base of consistent recurring revenue by adding new franchised and company-operated stores and same store sales growth. Driven Brands generated net revenue of approximately $592 million and $1.8 billion during the three and nine months ended September 28, 2024, respectively, an increase of 2% and 1%, respectively, compared to the prior year comparative periods, and system-wide sales of approximately $1.6 billion and $4.9 billion during the three and nine months ended September 28, 2024, respectively, an increase of 2% and 3% from the prior year comparative periods.
Previous wording
Although we have continued to experience total Company same store sales growth for 14 consecutive quarters through our diversified customer base and service offerings, we have experienced and expect to continue experiencing softening demand across several of our segments, primarily as a result of inflationary pressures, increased competition, industry dynamics, and negative weather patterns.
Current wording
Although we have continued to experience total Company same store sales growth for 15 consecutive quarters through our diversified customer base and service offerings, we have experienced and expect to continue experiencing softening demand across several of our segments, primarily as a result of inflationary pressures, increased competition, industry dynamics, and negative weather patterns, including hurricanes.
Previous wording
•Net revenue increased 1% to $1,184 million, driven by higher product and service revenue due to an increase in system-wide sales and net new store growth.
Current wording
•Net revenue increased 2% to $592 million, driven by higher product and service revenue due to an increase in system-wide sales, net new store growth, and a positive impact from foreign exchange.
Previous wording
•The Company added 45 net new stores during the quarter.
Current wording
•The Company added 56 net new stores during the quarter.
Previous wording
•Adjusted Net Income (non-GAAP) increased 27% to $58 million or $0.35 per diluted share. The increase was primarily due to margin improvements across the Maintenance, Paint, Collision & Glass, and Platform Services segments as well as decreased interest expense.
Current wording
•Adjusted Net Income (non-GAAP) increased 40% to $42 million or $0.26 per diluted share. The increase was primarily due to net new store growth, and margin improvements across the Paint, Collision & Glass, Car Wash, and Platform Services segments, partially offset by increased employee related benefit costs and reduced margins within the Maintenance segment.
Previous wording
•Adjusted EBITDA (non-GAAP) increased 4% to $152 million. The increase was primarily due to margin improvements across the Maintenance, Paint, Collision & Glass, and Platform Services segments.
Current wording
•Adjusted EBITDA (non-GAAP) increased 14% to $139 million. The increase was primarily due to net new store growth and margin improvements across the Paint, Collision & Glass, Car Wash, and Platform Services segments, partially offset by increased employee related benefit costs and reduced margins within the Maintenance segment.
Previous wording
Q2 2024 Six Months Ended Highlights and Key Performance Indicators
Current wording
Q3 2024 Nine Months Ended Highlights and Key Performance Indicators
Previous wording
•Net revenue increased 1% to $612 million, driven by higher product and service revenue due to an increase in system-wide sales and net new store growth.
Current wording
•Net revenue increased 1% to $1,775 million, driven by higher product and service revenue due to an increase in system-wide sales, net new store growth, and a positive impact from foreign exchange.
Previous wording
•The Company added 65 net new stores during the first six months of 2024.
Current wording
•The Company added 121 net new stores during the first nine months of 2024.
Previous wording
•Net Income decreased $33 million to $34 million or $0.21 per diluted share, primarily relating to impairment charges, increased employee related benefit costs, including share-based compensation expense, and lower operating margins within the Car Wash segment, partially offset by lower income tax expense and improved operating margins within the Maintenance, Platform Services, and Paint, Collision & Glass segments.
Current wording
•Net Income increased $751 million to $19 million or $0.12 per diluted share, primarily relating to decreased impairment charges in the current period, net new store growth, improved operating margins within the Maintenance, Platform Services, and Paint, Collision & Glass segments, and increased gains relating to the sale of assets and businesses, partially offset by increased employee related benefit costs, including share-based compensation expense, increased income tax expense, and reduced margins within the Car Wash segment.
Previous wording
•Adjusted Net Income (non-GAAP) increased 13% to $96 million or $0.59 per diluted share. The increase was primarily due to margin improvements within our Maintenance, Platform Services, and Paint, Collision & Glass segments as well as decreased interest expense, partially offset by increased depreciation expense and reduced margins within the Car Wash segment.
Current wording
•Adjusted Net Income (non-GAAP) increased 20% to $138 million or $0.84 per diluted share. The increase was primarily due to net new store growth and margin improvements within our Maintenance, Platform Services, and Paint, Collision & Glass segments as well as decreased interest expense, partially offset by increased employee related benefit costs and reduced margins within the Car Wash segment.
Previous wording
•Adjusted EBITDA (non-GAAP) increased 5% to $283 million. The increase was primarily due to improved margins within our Maintenance, Platform Services, and Paint, Collision & Glass segments, partially offset by reduced margins within the Car Wash segment.
Current wording
•Adjusted EBITDA (non-GAAP) increased 8% to $422 million. The increase was primarily due to net new store growth and improved margins within our Maintenance, Platform Services, and Paint, Collision & Glass segments, partially offset by increased employee related benefit costs and reduced margins within the Car Wash segment.
Previous wording
Segment Adjusted EBITDA. We define Segment Adjusted EBITDA as earnings before interest expense, net, income tax expense, and depreciation and amortization, with further adjustments for acquisition-related costs, equity compensation, loss on debt extinguishment, foreign currency transaction related gains or losses, store opening costs, cloud computing amortization, and certain non-recurring and non-core, infrequent or unusual charges. Segment Adjusted EBITDA is a supplemental measure of operating performance of our segments and may not be comparable to similar measures reported by other companies. Segment Adjusted EBITDA is a performance metric utilized by our Chief Operating Decision Maker to allocate resources to and assess performance of our segments. Refer to Note 5 in our consolidated financial statements for a reconciliation of income before taxes to Segment Adjusted EBITDA for the three and six months ended June 29, 2024 and July 1, 2023.
Current wording
Segment Adjusted EBITDA. We define Segment Adjusted EBITDA as earnings before interest expense, net, income tax expense, and depreciation and amortization, with further adjustments for acquisition related costs, equity compensation, loss on debt extinguishment, foreign currency transaction related gains or losses, store opening costs, cloud computing amortization, and certain non-recurring and non-core, infrequent or unusual charges. Segment Adjusted EBITDA is a supplemental measure of operating performance of our segments and may not be comparable to similar measures reported by other companies. Segment Adjusted EBITDA is a performance metric utilized by our Chief Operating Decision Maker to allocate resources to and assess performance of our segments. Refer to Note 5 in our consolidated financial statements for a reconciliation of income before taxes to Segment Adjusted EBITDA for the three and nine months ended September 28, 2024 and September 30, 2023.
Previous wording
The following table sets forth our key performance indicators for the three and six months ended June 29, 2024 and July 1, 2023:
Current wording
The following table sets forth our key performance indicators for the three and nine months ended September 28, 2024 and September 30, 2023:
Previous wording
The following table provides a reconciliation of Net Income to Adjusted Net Income and Adjusted Earnings per Share:
Current wording
The following table provides a reconciliation of Net (Loss) Income to Adjusted Net Income and Adjusted Earnings per Share:
Previous wording
The following table provides a reconciliation of Net Income to Adjusted EBITDA:
Current wording
The following table provides a reconciliation of Net (Loss) Income to Adjusted EBITDA:
Previous wording
(g)Consists of amortization related to acquired intangible assets as reflected within depreciation and amortization in the unaudited consolidated statement of operations.
Current wording
(i)Consists of amortization related to acquired intangible assets as reflected within depreciation and amortization in the unaudited consolidated statement of operations.
Previous wording
(h)Represents valuation allowances on income tax carryforwards in certain domestic jurisdictions that are not more likely than not to be realized.
Current wording
(j)Represents valuation allowances on income tax carryforwards in certain domestic jurisdictions that are not more likely than not to be realized.
Previous wording
(i)Represents the tax impact of adjustments associated with the reconciling items between net income and Adjusted Net Income, excluding the provision for uncertain tax positions and valuation allowance for certain deferred tax assets. To determine the tax impact of the deductible reconciling items, we utilized statutory income tax rates ranging from 9% to 36% depending upon the tax attributes of each adjustment and the applicable jurisdiction.
Current wording
(k)Represents the tax impact of adjustments associated with the reconciling items between net income and Adjusted Net Income, excluding the provision for uncertain tax positions and valuation allowance for certain deferred tax assets. To determine the tax impact of the deductible reconciling items, we utilized statutory income tax rates ranging from 9% to 36% depending upon the tax attributes of each adjustment and the applicable jurisdiction.
Previous wording
Adjusted net income was $58 million, or $0.35 per diluted share, for the three months ended June 29, 2024 compared to $46 million, or $0.27 per diluted share, for the three months ended July 1, 2023. This increase of $12 million was primarily due to the following:
Current wording
Adjusted net income was $42 million, or $0.26 per diluted share, for the three months ended September 28, 2024 compared to $30 million, or $0.18 per diluted share, for the three months ended September 30, 2023. This increase of $12 million was primarily due to the following:
Previous wording
Adjusted EBITDA was $152 million for the three months ended June 29, 2024 compared to $146 million for the three months ended July 1, 2023. The increase of $6 million in Adjusted EBITDA was primarily due to:
Current wording
Adjusted EBITDA was $139 million for the three months ended September 28, 2024 compared to $122 million for the three months ended September 30, 2023. The increase of $17 million in Adjusted EBITDA was primarily due to:
Previous wording
Company-operated store sales remained flat primarily due to an increase of $25 million within the Maintenance segment, offset by decreases of $19 million and $6 million related to the Paint, Collision & Glass and Car Wash segments, respectively. The sales increase in the Maintenance segment was primarily due to same store sales growth and 66 net new company-operated stores. The sales decrease in the Paint, Collision & Glass segment was primarily associated with the sale of nine company-operated stores to a franchisee in the current year as well as decreased same store sales due to reduced volume within the U.S. glass business. The decrease in Car Wash sales is primarily due to the net reduction of 27 company-operated stores during the prior 12 months and a decrease in same store sales primarily relating to lower volume. In total, the Company added 24 company-operated stores year-over-year.
Current wording
Company-operated store sales decreased less than $1 million of which $20 million and $8 million related to a decrease in the Paint, Collision & Glass and Car Wash segments, respectively, partially offset by an increase of $27 million within the Maintenance segment. The sales decrease in the Paint, Collision & Glass segment was primarily associated with the sale of nine company-operated stores to a franchisee in the current year, as well as decreased company-operated same store sales due to reduced volume. The decrease in Car Wash sales is primarily due to a decrease in company-operated same store sales primarily relating to lower volume from our retail customers as a result of unfavorable weather conditions, partially offset by an increase in membership revenue. The sales increase in the Maintenance segment was primarily due to same store sales growth and 71 net new company-operated stores. In total, the Company added 11 net new company-operated stores year-over-year.
Previous wording
Independently-operated store sales (comprised entirely of sales from the international car wash locations) decreased by $1 million, or 2%, primarily due to decreased volume and unfavorable impacts from foreign exchange.
Current wording
Independently-operated store sales (comprised entirely of sales from the international car wash locations) increased by $6 million, or 15%, primarily due to same store sales growth as a result of improved price realization, new product offerings, and favorable impacts from foreign exchange.
Previous wording
Advertising fund contributions increased by less than 1%, primarily due to an increase in franchise system-wide sales of approximately 1%, from same store sales growth and net franchise store growth. Our franchise agreements typically require the franchisee to pay continuing advertising fund fees based on a percentage of franchisee gross sales.
Current wording
Advertising fund contributions remained flat primarily due to franchise system-wide sales mix. Our franchise agreements typically require the franchisee to pay continuing advertising fund fees based on a percentage of franchisee gross sales or a stated fee.
Previous wording
Supply and other revenue increased $5 million, or 7%, primarily from growth in product and service revenue within the Maintenance and Platform Services segments as a result of an increase in system-wide sales and net store growth.
Current wording
Supply and other revenue increased $3 million, or 5%, primarily from growth in product and service revenue within the Maintenance segment as a result of an increase in system-wide sales and net store growth, partially offset by decreased volume within the Paint, Collision & Glass segment and the sale of our Canadian distribution business in the current period.
Previous wording
Advertising fund expenses increased less than 1%, which is commensurate to the increase in advertising fund contributions during the period. Advertising fund expenses generally trend consistent with advertising fund contributions.
Current wording
Advertising fund expenses remained flat which is commensurate to advertising fund contributions during the period. Advertising fund expenses generally trend consistent with advertising fund contributions.
Previous wording
Supply and other expenses decreased $2 million, or 4%, due to inventory and payroll cost savings in the current period.
Current wording
Supply and other expenses decreased $3 million, or 8%, due to lower inventory and payroll costs, primarily relating to the sale of our Canadian distribution business in the current period.
Previous wording
Acquisition related costs decreased $3 million, or 93%, primarily due to decreased acquisition activity in the current period.
Current wording
Acquisition related costs decreased $2 million, or 136%, primarily due to decreased acquisition activity in the current period and changes in estimates.
Previous wording
Store opening costs decreased by less than $1 million, primarily associated with Take 5 Oil Change (“Take 5 Oil) new store openings in the current period compared with store opening costs associated with our U.S. glass business in the prior period.
Current wording
Store opening costs increased by less than $1 million, primarily associated with Take 5 Oil Change (“Take 5 Oil”) new store openings in the current period compared with store opening costs associated with our Take 5 Oil and U.S. glass business in the prior period.
Previous wording
Asset impairment charges and lease terminations increased $6 million for the three months ended June 29, 2024 compared to the three months ended July 1, 2023. During the three months ended June 29, 2024, the Company recorded impairment charges primarily related to assets held for sale. For more information, refer to Note 6 in our consolidated financial statements included within this Form 10-Q. During the three months ended July 1, 2023, asset impairment charges primarily related to certain property and equipment and operating lease right-of-use assets at closed and underperforming locations.
Current wording
Asset impairment charges and lease terminations decreased $87 million for the three months ended September 28, 2024 compared to the three months ended September 30, 2023. During the three months ended September 28, 2024, impairment charges were primarily related to assets held for sale as well as assets associated with closed stores within the Car Wash segment. During the three months ended September 30, 2023, asset impairment charges were primarily related to property and equipment and right-of-use assets relating to 29 stores management approved for closure, underperforming stores, and assets held for sale or abandoned within the Car Wash segment. For more information, refer to Note 6 in our consolidated financial statements included within this Form 10-Q.
Previous wording
The foreign currency transaction loss for the three months ended June 29, 2024 was primarily comprised of transaction losses in our foreign operations of $2 million, partially offset by a gain of less than $2 million on foreign currency hedges. The foreign currency transaction gain for the three months ended July 1, 2023 was comprised of transaction gains in our foreign operations of $2 million, partially offset by a loss of less than $1 million on foreign currency hedges.
Current wording
The foreign currency transaction loss for the three months ended September 28, 2024 was primarily comprised of a loss on foreign currency hedges of $2 million, partially offset by a gain of $1 million on transaction gains in our foreign operations. The foreign currency transaction gain for the three months ended September 30, 2023 was primarily comprised of transaction losses in our foreign operations of $5 million, partially offset by a gain of $2 million on foreign currency hedges.
Previous wording
Income tax expense was $18 million for the three months ended June 29, 2024 compared to $20 million for the three months ended July 1, 2023. The effective income tax rate for the three months ended June 29, 2024 was 37.2% compared to 34.9% for the three months ended July 1, 2023. The net decrease in income tax expense and increase in effective tax rate for the three months ended June 29, 2024 was primarily driven by asset impairment charges and non-deductible share-based compensation expense.
Current wording
Income tax expense was $10 million for the three months ended September 28, 2024 compared to an income tax benefit of $152 million for the three months ended September 30, 2023. The effective income tax rate for the three months ended September 28, 2024 was (190.8%) primarily driven by the recognition of valuation allowances on income tax carryforwards in certain domestic jurisdictions that are not more likely than not to be realized, non-deductible share-based compensation, and state taxes related to pre-tax income compared to 16.0% for the three months ended September 30, 2023.
Previous wording
We recognized net income of $34 million, or $0.21 per diluted share, for the six months ended June 29, 2024, compared to $67 million, or $0.40 per diluted share, for the six months ended July 1, 2023. The decrease of approximately $33 million was primarily due to the following:
Current wording
We recognized net income of $19 million, or $0.12 per diluted share, for the nine months ended September 28, 2024, compared to a net loss of $732 million, or $4.41 loss per diluted share, for the nine months ended September 30, 2023. The improvement of approximately $751 million was primarily due to the following:
Previous wording
•unfavorable impact from foreign exchange of $8 million;
Current wording
•an unfavorable impact from foreign exchange of $6 million;
Previous wording
Adjusted net income was $96 million for the six months ended June 29, 2024 compared to $85 million for the six months ended July 1, 2023. This increase of $11 million was primarily due to the following:
Current wording
Adjusted net income was $138 million for the nine months ended September 28, 2024 compared to $115 million for the nine months ended September 30, 2023. This increase of $23 million was primarily due to the following:
Previous wording
Adjusted EBITDA was $283 million for the six months ended June 29, 2024 compared to $270 million for the six months ended July 1, 2023. The increase of $13 million was primarily due to:
Current wording
Adjusted EBITDA was $422 million for the nine months ended September 28, 2024 compared to $392 million for the nine months ended September 30, 2023. The increase of $30 million was primarily due to:
Previous wording
Company-operated store sales decreased $2 million, or less than 1%, of which approximately $34 million and $19 million related to a decrease in the Paint, Collision & Glass and Car Wash segments, respectively, partially offset by an increase of $51 million in the Maintenance segment. The sales decrease in the Paint, Collision & Glass segment was primarily driven by revenue associated with the sale of nine company-operated stores to a franchisee in the current period as well as decreased volume within the U.S. glass business. The decrease in Car Wash sales is primarily due to the net reduction of 27 company-operated stores during the prior 12 months and a decrease in same store sales primarily relating to lower volume. The sales increase in the Maintenance segment was primarily due to same store sales growth and 66 net new company-operated stores. In aggregate, the Company added a net 24 company-operated stores year-over-year.
Current wording
Company-operated store sales decreased $2 million, or less than 1%, of which approximately $53 million and $26 million related to a decrease in the Paint, Collision & Glass and Car Wash segments, respectively, partially offset by an increase of $77 million in the Maintenance segment. The sales decrease in the Paint, Collision & Glass segment was primarily driven by revenue associated with the sale of nine company-operated stores to a franchisee in the current period as well as decreased volume. The decrease in Car Wash sales is primarily due to the net reduction of 30 company-operated stores and a decrease in same store sales primarily relating to lower volume. The sales increase in the Maintenance segment was primarily due to same store sales growth and 71 net new company-operated stores. In aggregate, the Company added a net 11 company-operated stores year-over-year.
Previous wording
Independently-operated store sales (comprised entirely of sales from the international car wash locations) decreased $1 million, or less than 1%, primarily due to a decrease in same store sales due to lower volume, partially offset by a favorable impact from foreign exchange.
Current wording
Independently-operated store sales (comprised entirely of sales from the international car wash locations) increased $6 million, or 4%, due to same store sales growth as a result of improved price realization, new product offerings, and favorable impacts from foreign exchange.
Showing the first 40 of 67 pairs. Open the source sections for the rest.
Rearranged current paragraphs (1)
Current report — wording carried from elsewhere
•Consolidated same store sales increased 1%.
Rearranged previous paragraphs (3)
Previous report — wording carried elsewhere
•Consolidated same store sales increased less than 1%.
Previous report — wording carried elsewhere
•decreased operating margins within the Car Wash segments.
Previous report — wording carried elsewhere
Paint, Collision & Glass Segment Adjusted EBITDA decreased $11 million, or 14%, primarily due to decreased volume associated with company-operated stores as well as the Adjusted EBITDA associated with the nine company-operated stores sold to a franchisee in the current year, partially offset by an improvement in operating margin.