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      Driven Brands Holdings Inc. Reports Third Quarter Results

      (PRNewsfoto/Driven Brands)

      News provided by

      Driven Brands

      Nov 01, 2023, 06:55 ET

      Share this article

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      --Revenue increased 12% powered by 6% same-store sales growth and 6% net store growth--

      --Reaffirms fiscal year 2023 financial outlook--

      CHARLOTTE, N.C., Nov. 1, 2023 /PRNewswire/ -- Driven Brands Holdings Inc. (NASDAQ: DRVN) ("Driven Brands" or the "Company") today reported financial results for the third quarter ended September 30, 2023.

      For the third quarter, Driven Brands delivered revenue of $581.0 million, up 12 percent versus the prior year. System-wide sales were $1.6 billion, up 10 percent versus the prior year driven by 6 percent same-store sales growth and 6 percent net store growth. The Company added 55 net new stores in the quarter.

      During the third quarter, we had an $851 million non-cash goodwill impairment in the Car Wash segment as well as $111 million in non-cash asset impairment charges and lease terminations. This drove a Net Loss of $799.3 million or a Net Loss of $4.83 per diluted share versus Net Income of $38.4 million in the prior year. Adjusted Net Income1 decreased 39 percent to $33.7 million or $0.20 per diluted share1, and Adjusted EBITDA1 decreased 2 percent to $127.2 million. Cash provided by operating activities for the nine months ended September 30, 2023, increased 26 percent to $212.0 million compared to $167.7 million in the prior year.

      "This quarter, we continued to see meaningful growth and strong operational performance across our portfolio excluding our US Car Wash and Glass businesses. I'm delighted to report we recently opened our 300th franchised Take 5 Oil Change location and I'm looking forward to celebrating our 1,000th location in the fourth quarter," said Jonathan Fitzpatrick, President and Chief Executive Officer.

      "As discussed at our Investor Day on September 20, we remain focused on operational improvements in the US Car Wash business, while making steady progress on the US Glass integration. Given continued weak consumer demand and increasing competition in the US Car Wash sector, we are strategically pausing capital investment in this business. Looking ahead to 2024, the Driven Brands team is prioritizing continued progress in our US Car Wash and US Glass businesses, disciplined deployment of capital, and generating free cash flow, which will primarily be used to pay down debt."

      Third 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

      $                          502.5

      1,732

      9.1 %

      $                  244.4

      $                            86.5

      Car Wash

      141.7

      1,133

      (4.0) %

      142.8

      24.4

      Paint, Collision & Glass

      845.6

      1,920

      8.6 %

      129.4

      32.8

      Platform Services

      119.2

      208

      (4.6) %

      55.9

      22.4

      Corporate / Other

      N/A

      N/A

      N/A

      8.5


      Total

      $                       1,609.0

      4,993

      6.4 %

      $                  581.0

      Capital and Liquidity

      The Company ended the third quarter with total liquidity of $386.8 million consisting of $211.3 million in cash and cash equivalents, and $175.5 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 it, assuming certain conditions continue to be met.

      Share Repurchase Program

      During the three months ended September 30, 2023, the Company repurchased 3,601,694 shares of its common stock for approximately $50 million at an average price of $13.87, completing the repurchase authorization approved by the Board of Directors in August 2023.  All repurchases were made on the open market.

      Fiscal Year 2023 Outlook

      The Company reaffirms its financial outlook for fiscal year 2023.


      Current Outlook

      Revenue

      ~$2.30 billion

      Adjusted EBITDA1

      ~$535 million

      Adjusted EPS1

      ~$0.92

      Note: The Company has not included future M&A in its guidance for fiscal year 2023.








      1 Adjusted EBITDA, Adjusted Net Income and Adjusted EPS are non-GAAP financial measures. See "Reconciliation of Non-GAAP Financial Measures" for additional information on non-GAAP financial measures and a reconciliation to the most comparable GAAP measures.  Forward-looking estimates of Adjusted EBITDA and Adjusted EPS are made in a manner consistent with the relevant definitions and assumptions noted herein.

      Conference Call

      Driven Brands will host a conference call to discuss third quarter 2023 results today, Wednesday, November 1, 2023, at 8:30am 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 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 more than 4,900 locations across 14 countries, and services over 70 million vehicles annually. Driven Brands' network generates approximately $2.3 billion in annual revenue from approximately $6.2 billion in system-wide sales.

      Disclosure Regarding Forward-Looking Statements

      This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements are generally identified by the use of forward-looking terminology, including the terms "anticipate," "believe," "continue," "could," "estimate," "expect," "intend," "likely," "may," "plan," "possible," "potential," "predict," "project," "should," "target," "will," "would" and, in each case, their negative or other various or comparable terminology. All statements other than statements of historical facts contained in this Quarterly Report, including statements regarding our strategy, future operations, future financial position, future revenue, projected costs, prospects, trends, plans, objectives of management, impact of accounting standards and guidance, impairments, and expected market growth are forward-looking statements. In particular, forward-looking statements include, among other things, statements relating to: (i) our strategy, outlook and growth prospects; (ii) our operational and financial targets and dividend policy; (iii) general economic trends and trends in the industry and markets; (iv) the risks and costs associated with the integration of, and our ability to integrate, our stores and business units successfully to achieve anticipated synergies; (v) the proper application of generally accepted accounting principles, which are highly complex and involve many subjective assumptions, estimates, and judgments and (vi) the competitive environment in which we operate. Forward-looking statements are not based on historical facts, but instead represent our current expectations and assumptions regarding our business, the economy and other future conditions, and involve known and unknown risks, uncertainties and other important factors that may cause our actual results, performance, or achievements to be materially different from any future results, performance, or achievements expressed or implied by the forward-looking statements. It is not possible to predict or identify all such risks. These risks include, but are not limited to, the risk factors that are described under the section titled "Risk Factors" in our Annual Report on Form 10-K for the fiscal year ended December 31, 2022 as well as in our other filings with the Securities and Exchange Commission, which are available on its website at www.sec.gov. Given these uncertainties, you should not place undue reliance on these forward-looking statements.

      DRIVEN BRANDS HOLDINGS INC. AND SUBSIDIARIES
      CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)



      Three months ended


      Nine months ended

      (in thousands, except per share amounts)

      September 30,
      2023


      September 24,
      2022


      September 30,
      2023


      September 24,
      2022

      Revenue:








      Franchise royalties and fees

      $             47,362


      $             45,562


      $           140,682


      $           128,300

      Company-operated store sales

      389,041


      341,211


      1,159,685


      957,487

      Independently-operated store sales

      43,582


      40,469


      157,647


      158,500

      Advertising contributions

      27,121


      22,018


      73,547


      63,807

      Supply and other revenue

      73,928


      67,334


      218,791


      185,447

      Total revenue

      581,034


      516,594


      1,750,352


      1,493,541

      Operating Expenses:








      Company-operated store expenses

      262,282


      209,562


      762,731


      580,368

      Independently-operated store expenses

      25,773


      23,254


      87,095


      85,396

      Advertising expenses

      27,121


      22,018


      73,547


      63,807

      Supply and other expenses

      38,816


      41,042


      118,188


      109,616

      Selling, general, and administrative
      expenses

      123,012


      82,460


      332,155


      272,657

      Acquisition related costs

      1,667


      2,325


      7,264


      9,981

      Store opening costs

      1,372


      753


      3,774


      1,925

      Depreciation and amortization

      45,639


      36,518


      129,256


      107,628

      Goodwill impairment

      850,970


      —


      850,970


      —

      Trade name impairment

      —


      —


      —


      125,450

      Asset impairment charges and lease
      terminations

      111,239


      2,894


      117,450


      2,910

      Total operating expenses

      1,487,891


      420,826


      2,482,430


      1,359,738

      Operating (loss) income

      (906,857)


      95,768


      (732,078)


      133,803

      Other expenses, net:








      Interest expense, net

      41,292


      27,323


      120,304


      78,946

      Loss on foreign currency transactions

      2,980


      15,582


      3


      30,490

      Other expense, net

      44,272


      42,905


      120,307


      109,436

      (Loss) income before taxes

      (951,129)


      52,863


      (852,385)


      24,367

      Income tax (benefit) expense

      (151,818)


      14,472


      (120,572)


      8,592

      Net (loss) income

      (799,311)


      38,391


      (731,813)


      15,775

      Net loss attributable to non-controlling interest

      —


      —


      —


      (15)

      Net (loss) income attributable to Driven
      Brands Holdings Inc.

      $         (799,311)


      $             38,391


      $         (731,813)


      $             15,790









      (Loss) earnings per share:








      Basic

      $                (4.82)


      $                  0.23


      $                (4.40)


      $                  0.10

      Diluted

      $                (4.83)


      $                  0.23


      $                (4.41)


      $                  0.09

      Weighted average shares outstanding








      Basic

      162,398


      162,760


      162,698


      162,768

      Diluted

      162,398


      166,831


      162,698


      166,663

      DRIVEN BRANDS HOLDINGS INC. AND SUBSIDIARIES

      CONSOLIDATED BALANCE SHEETS (UNAUDITED)


      (in thousands, except share and per share amounts)

      September 30, 2023


      December 31, 2022

      Assets




      Current assets:




      Cash and cash equivalents

      $                    211,280


      $                 227,110

      Restricted cash

      657


      792

      Accounts and notes receivable, net

      165,573


      179,888

      Inventory

      83,423


      72,040

      Prepaid and other assets

      42,208


      40,084

      Income tax receivable

      19,641


      15,075

      Assets held for sale

      271,006


      —

      Advertising fund assets, restricted

      63,983


      36,421

      Total current assets

      857,771


      571,410

      Other assets

      42,273


      30,561

      Property and equipment, net

      1,408,970


      1,545,738

      Operating lease right-of-use assets

      1,394,384


      1,299,189

      Deferred commissions

      6,072


      7,121

      Intangibles, net

      741,732


      765,903

      Goodwill

      1,433,775


      2,277,065

      Deferred tax assets

      2,817


      2,911

      Total assets

      $                 5,887,794


      $              6,499,898

      Liabilities and shareholders' equity




      Current liabilities:




      Accounts payable

      $                      90,440


      $                   60,606

      Accrued expenses and other liabilities

      256,347


      317,318

      Income tax payable

      3,546


      4,454

      Current portion of long-term debt

      31,869


      32,986

      Income tax receivable liability

      54,791


      53,328

      Advertising fund liabilities

      38,341


      36,726

      Total current liabilities

      475,334


      505,418

      Long-term debt

      2,877,059


      2,705,281

      Deferred tax liabilities

      141,965


      276,749

      Operating lease liabilities

      1,334,539


      1,177,501

      Income tax receivable liability

      117,915


      117,915

      Deferred revenue

      30,525


      30,046

      Long-term accrued expenses and other liabilities

      29,530


      33,419

      Total liabilities

      5,006,867


      4,846,329

      Preferred Stock $0.01 par value; 100,000,000 shares authorized; none issued or outstanding

      —


      —

      Common stock, $0.01 par value, 900,000,000 shares authorized: and 163,959,225 and
      167,404,047 shares outstanding; respectively

      1,639


      1,674

      Additional paid-in capital

      1,646,831


      1,628,904

      Retained (deficit) earnings

      (696,938)


      84,795

      Accumulated other comprehensive loss

      (71,236)


      (62,435)

      Total shareholders' equity attributable to Driven Brands Holdings Inc.

      880,296


      1,652,938

      Non-controlling interests

      631


      631

      Total shareholders' equity

      880,927


      1,653,569

      Total liabilities and shareholders' equity

      $                 5,887,794


      $              6,499,898

      DRIVEN BRANDS HOLDINGS INC. AND SUBSIDIARIES

      CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)



      Nine Months Ended

      (in thousands)

      September 30,
      2023


      September 24,
      2022

      Net (loss) income

      $            (731,813)


      $                15,775

      Adjustments to reconcile net (loss) income to net cash provided by operating activities:




      Depreciation and amortization

      129,256


      107,628

      Goodwill impairment

      850,970


      —

      Trade name impairment

      —


      125,450

      Equity-based compensation expense

      9,730


      12,159

      Loss on foreign denominated transactions

      3,706


      30,490

      Gain on foreign currency derivatives

      (3,704)


      (2,981)

      Loss (gain) on sale and disposal of businesses, fixed assets, and sale-leaseback transactions

      1,730


      (12,183)

      Reclassification of interest rate hedge to income

      (1,358)


      —

      Bad debt expense

      1,244


      1,011

      Asset impairment costs

      117,450


      2,910

      Amortization of deferred financing costs and bond discounts

      6,287


      6,807

      Benefit for deferred income taxes

      (134,266)


      (38,216)

      Other, net

      24,422


      15,620

      Changes in assets and liabilities, net of acquisitions:




      Accounts and notes receivable, net

      2,464


      (40,296)

      Inventory

      (12,531)


      (17,898)

      Prepaid and other assets

      (3,909)


      850

      Advertising fund assets and liabilities, restricted

      (10,923)


      (4,612)

      Other Assets

      (29,210)


      (3,767)

      Deferred commissions

      658


      917

      Deferred revenue

      1,961


      2,222

      Accounts payable

      24,913


      (12,321)

      Accrued expenses and other liabilities

      (29,442)


      (59,844)

      Income tax receivable

      (5,612)


      37,931

      Cash provided by operating activities

      212,023


      167,652

      Cash flows from investing activities:




      Capital expenditures

      (482,633)


      (276,222)

      Cash used in business acquisitions, net of cash acquired

      (53,641)


      (652,085)

      Proceeds from sale-leaseback transactions

      172,230


      150,112

      Proceeds from sale or disposal of businesses and fixed assets

      2,837


      6,427

      Cash used in investing activities

      (361,207)


      (771,768)

      Cash flows from financing activities:




      Repayment of long-term debt

      (20,969)


      (15,772)

      Proceeds from revolving lines of credit and short-term debt

      335,000


      300,000

      Repayments of revolving lines of credit and short-term debt

      (120,000)


      —

      Repayment of principal portion of finance lease liability

      (2,020)


      (2,229)

      Share repurchases

      (49,945)


      —

      Stock option exercises

      6,117


      —

      Other, net

      (322)


      581

      Cash provided by financing activities

      147,861


      282,580

      Effect of exchange rate changes on cash

      365


      (7,705)

      Net change in cash, cash equivalents, restricted cash, and cash included in advertising fund
      assets, restricted

      (958)


      (329,241)

      Cash and cash equivalents, beginning of period

      227,110


      523,414

      Cash included in advertising fund assets, restricted, beginning of period

      32,871


      38,586

      Restricted cash, beginning of period

      792


      792

      Cash, cash equivalents, restricted cash, and cash included in advertising fund assets,
      restricted, beginning of period

      260,773


      562,792

      Cash and cash equivalents, end of period

      211,280


      190,373

      Cash included in advertising fund assets, restricted, end of period

      47,877


      42,386

      Restricted cash, end of period

      657


      792

      Cash, cash equivalents, restricted cash, and cash included in advertising fund assets,
      restricted, end of period

      $              259,814


      $              233,551

      RECONCILIATION OF NON-GAAP FINANCIAL MEASURES

      The following information provides definitions and reconciliations of the non-GAAP financial measures presented in this earnings release to the most directly comparable financial measures calculated and presented in accordance with generally accepted accounting principles (GAAP). The Company has provided this non-GAAP financial information, which is not calculated or presented in accordance with GAAP, as information supplemental and in addition to the financial measures presented in this earnings release that are calculated and presented in accordance with GAAP. Such non-GAAP financial measures should not be considered superior to, as a substitute for or alternative to, and should be considered in conjunction with, the GAAP financial measures presented in this earnings release. The non-GAAP financial measures in this earnings release may differ from similarly titled measures used by other companies.

      Non-GAAP Financial Measures in Guidance

      Driven Brands includes Adjusted EBITDA and Adjusted EPS in the Company's Fiscal Year 2023 Guidance. Adjusted EBITDA and Adjusted EPS are non-GAAP financial measures and have not been reconciled to the most comparable GAAP outlook because it is not possible to do so without unreasonable efforts due to the uncertainty and potential variability of reconciling items, which are dependent on future events and often outside of management's control and which could be significant. Because such items cannot be reasonably predicted with the level of precision required, we are unable to provide outlook for the comparable GAAP measures. Forward-looking estimates of Adjusted EBITDA and Adjusted EPS are made in a manner consistent with the relevant definitions and assumptions noted herein and in our filings with the SEC.

      Adjusted Net Income and Adjusted Earnings Per Share

      Adjusted net income attributable to Driven Brands Holdings Inc. ("Adjusted Net Income") and Adjusted diluted earnings per share attributable to Driven Brands common stockholders ("Adjusted Earnings Per Share") are considered non-GAAP financial measures under the SEC's rules because they exclude certain amounts included in the net income attributable to Driven Brands common  stockholders and diluted earnings per share attributable to Driven Brands common stockholders calculated in accordance with GAAP. Management believes that Adjusted Net Income and Adjusted EPS are meaningful measures to share with investors because they facilitate comparison of the current period performance with that of the comparable prior period. In addition, Adjusted Net Income and Adjusted Earnings Per Share afford investors a view of what management considers to be Driven Brands' core earnings performance as well as the ability to make a more informed assessment of such earnings performance with that of the prior period.

      The tables below reflect the calculation of Adjusted Net Income and Adjusted Earnings Per Share for the three and nine months ended September 30, 2023, compared to the three and nine months ended September 24, 2022.

      Net (Loss) Income to Adjusted Net Income and Adjusted Earnings Per Share (Unaudited)



      Three months ended


      Nine months ended

      (in thousands, except per share amounts)

      September 30,
      2023


      September 24,
      2022


      September 30,
      2023


      September 24,
      2022

      Net (loss) income

      $          (799,311)


      $                38,391


      $            (731,813)


      $                15,775

      Acquisition related costs(a)

      1,667


      2,325


      7,264


      9,981

      Non-core items and project costs, net(b)

      1,486


      851


      6,113


      3,436

      Straight-line rent adjustment(c)

      5,193


      3,220


      14,196


      11,530

      Cloud computing amortization(d)

      991


      —


      991


      —

      Equity-based compensation expense(e)

      2,681


      5,308


      9,730


      12,159

      Foreign currency transaction (gain) loss,
      net(f)

      2,980


      15,582


      3


      30,490

      Bad debt recovery(g)

      —


      (449)


      —


      (449)

      Goodwill impairment(h)

      850,970


      —


      850,970


      —

      Trade name impairment(i)

      —


      —


      —


      125,450

      Asset sale leaseback (gain) loss,
      impairment and closed store expenses(j)

      125,473


      (14,186)


      119,637


      (20,248)

      Amortization related to acquired
      intangible assets(k)

      9,252


      7,212


      23,564


      18,284

      Provision for uncertain tax positions(l)

      —


      —


      —


      76

      Adjusted net income before tax impact
      of adjustments

      201,382


      58,254


      300,655


      206,484

      Tax impact of adjustments(m)

      (167,662)


      (3,290)


      (175,452)


      (44,086)

      Adjusted net income

      33,720


      54,964


      125,203


      162,398

      Net loss attributable to non-controlling
      interest

      —


      —


      —


      (15)

      Adjusted Net Income attributable to
      Driven Brands Holdings Inc.

      $              33,720


      $                54,964


      $              125,203


      $              162,413









      Adjusted Earnings Per Share








      Basic1

      $                   0.20


      $                     0.33


      $                     0.75


      $                     0.98

      Diluted1

      $                   0.20


      $                     0.32


      $                     0.74


      $                     0.96









      Weighted average shares outstanding








      Basic

      162,398


      162,760


      162,698


      162,768

      Diluted

      165,850


      166,831


      166,557


      166,663

      (1)

      Adjusted Earnings Per Share is calculated under the two-class method. Under the two-class method, adjusted earnings per share is calculated using adjusted net income attributable to common shares, which is derived by reducing adjusted net income by the amount attributable to participating securities. Adjusted Net Income attributable to participating securities used in the basic earnings per share calculation was $1 million and $3 million for the three and nine months ended September 30, 2023, respectively, and Adjusted Net Income attributable to participating securities used in the diluted earnings per share calculation was $1 million and $2 million for the three and nine months ended September 30, 2023, respectively.

      Adjusted EBITDA

      Adjusted EBITDA is considered a non-GAAP financial measure under the Securities and Exchange Commission's ("SEC") rules because it excludes certain amounts included in net income calculated in accordance with GAAP. Management believes that Adjusted EBITDA is a meaningful measure to share with investors because it facilitates comparison of the current period performance with that of the comparable prior period. In addition, Adjusted EBITDA affords investors a view of what management considers to be Driven Brand's core operating performance as well as the ability to make a more informed assessment of such operating performance as compared with that of the prior period.

      Please see the company's Annual Report on Form 10-K for the fiscal year ended December 31, 2022, filed with the SEC on March 1, 2023, for additional information on Adjusted EBITDA. The tables below reflect the calculation of Adjusted EBITDA for the three and nine months ended September 30, 2023, compared to the three and nine months ended September 24, 2022.

      Net Income (Loss) to Adjusted EBITDA Reconciliation (Unaudited)



      Three months ended


      Nine months ended

      (in thousands)

      September 30,
      2023


      September 24,
      2022


      September 30,
      2023


      September 24,
      2022

      Net (loss) income

      $            (799,311)


      $                38,391


      $            (731,813)


      $                15,775

      Income tax (benefit) expense

      (151,818)


      14,472


      (120,572)


      8,592

      Interest expense, net

      41,292


      27,323


      120,304


      78,946

      Depreciation and amortization

      45,639


      36,518


      129,256


      107,628

      EBITDA

      (864,198)


      116,704


      (602,825)


      210,941

      Acquisition related costs(a)

      1,667


      2,325


      7,264


      9,981

      Non-core items and project costs, net(b)

      1,486


      851


      6,113


      3,436

      Straight-line rent adjustment(c)

      5,193


      3,220


      14,196


      11,530

      Cloud computing amortization(d)

      991


      —


      991


      —

      Equity-based compensation expense(e)

      2,681


      5,308


      9,730


      12,159

      Foreign currency transaction (gain)
      loss, net(f)

      2,980


      15,582


      3


      30,490

      Bad debt recovery(g)

      —


      (449)


      —


      (449)

      Goodwill impairment(h)

      850,970


      —


      850,970


      —

      Trade name impairment(i)

      —


      —


      —


      125,450

      Asset sale leaseback (gain) loss,
      impairment and closed store expenses(j)

      125,473


      (14,186)


      119,637


      (20,248)

      Adjusted EBITDA

      $              127,243


      $              129,355


      $              406,079


      $              383,290

      Adjusted EBITDA, Adjusted Net Income and Adjusted Earnings Per Share Footnotes



      (a)

      Consists of acquisition costs as reflected within the unaudited consolidated statements of operations, including legal, consulting and other fees, and expenses incurred in connection with acquisitions completed during the applicable period, as well as inventory rationalization expenses incurred in connection with acquisitions. We expect to incur similar costs in connection with other acquisitions in the future and, under U.S. GAAP, such costs relating to acquisitions are expensed as incurred and not capitalized.

      (b)

      Consists of discrete items and project costs, including third party consulting and professional fees associated with strategic transformation initiatives as well as non-recurring payroll-related costs.

      (c)

      Consists of the non-cash portion of rent expense, which reflects the extent to which our straight-line rent expense recognized under U.S. GAAP exceeds or is less than our cash rent payments.

      (d)

      Includes non-cash amortization expenses relating to the amortization of cloud computing arrangements.

      (e)

      Represents non-cash equity-based compensation expense.

      (f)

      Represents foreign currency transaction (gains) losses, net that primarily related to the remeasurement of our intercompany loans, which are partially offset by unrealized gains and losses on remeasurement of cross currency swaps and forward contracts.

      (g)

      Represents the recovery of previously uncollectible receivables outside of normal operations.

      (h)

      Relates to goodwill impairment charges within the Car Wash segment.

      (i)

      Certain indefinite-lived Car Wash trade names were impaired as the Company elected to discontinue their use.

      (j)

      Relates to (gains) losses, net on sale leasebacks, impairment of certain fixed assets and operating lease right-of-use assets related to closed and underperforming locations, assets held for sale, and lease exit costs and other costs associated with stores that were closed prior to the respective lease termination dates.

      (k)

      Consists of amortization related to acquired intangible assets as reflected within depreciation and amortization in the unaudited consolidated statements of operations.

      (l)

      Represents uncertain tax positions recorded for tax positions, inclusive of interest and penalties.

      (m)

      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. 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.

      DRIVEN BRANDS HOLDINGS INC. AND SUBSIDIARIES

      ADJUSTED EBITDA AND SEGMENT ADJUSTED EBITDA RECONCILIATION (UNAUDITED)



      Three months ended


      Nine months ended

      (in thousands)

      September 30,
      2023


      September 24,
      2022


      September 30,
      2023


      September 24,
      2022

      Segment Adjusted EBITDA:  








      Maintenance

      $             86,493


      $             68,763


      $           245,232


      $           185,324

      Car Wash

      24,429


      39,098


      112,001


      148,495

      Paint, Collision & Glass

      32,763


      38,919


      109,724


      100,847

      Platform Services

      22,417


      19,765


      61,984


      54,471

      Corporate and other

      (37,487)


      (36,437)


      (119,088)


      (103,922)

      Store opening costs

      (1,372)


      (753)


      (3,774)


      (1,925)

           Adjusted EBITDA

      $           127,243


      $           129,355


      $           406,079


      $           383,290

      DRIVEN BRANDS HOLDINGS INC. AND SUBSIDIARIES

      ADDITIONAL INFORMATION ON KEY PERFORMANCE INDICATORS (UNAUDITED)




      Three months ended September 30, 2023

      (in thousands)


      Maintenance


      Car Wash


      Paint,

      Collision &

      Glass


      Platform

      Services


      Total

      System-wide Sales











      Franchise stores


      $        298,022


      $                  —


      $        760,437


      $        117,957


      $    1,176,416

      Company-operated stores


      204,460


      98,132


      85,207


      1,242


      389,041

      Independently operated stores


      —


      43,582


      —


      —


      43,582

      Total System-wide Sales


      $        502,482


      $        141,714


      $        845,644


      $        119,199


      $    1,609,039












      Store Count (in whole numbers)











      Franchise stores


      1,108


      —


      1,662


      207


      2,977

      Company-operated stores


      624


      418


      258


      1


      1,301

      Independently operated stores


      —


      715


      —


      —


      715

      Total Store Count


      1,732


      1,133


      1,920


      208


      4,993














      Three months ended September 24, 2022

      (in thousands)


      Maintenance


      Car Wash


      Paint,

      Collision &

      Glass


      Platform

      Services


      Total

      System-wide Sales











      Franchise stores


      $        239,290


      $                  —


      $        711,816


      $        129,320


      $    1,080,426

      Company-operated stores


      172,162


      98,235


      69,383


      1,431


      341,211

      Independently operated stores


      —


      40,469


      —


      —


      40,469

      Total System-wide Sales


      $        411,452


      $        138,704


      $        781,199


      $        130,751


      $    1,462,106












      Store Count (in whole numbers)











      Franchise stores


      1,023


      —


      1,625


      201


      2,849

      Company-operated stores


      574


      369


      197


      1


      1,141

      Independently operated stores


      —


      717


      —


      —


      717

      Total Store Count


      1,597


      1,086


      1,822


      202


      4,707

      DRIVEN BRANDS HOLDINGS INC. AND SUBSIDIARIES

      ADDITIONAL INFORMATION ON KEY PERFORMANCE INDICATORS (UNAUDITED)




      Nine months ended September 30, 2023

      (in thousands)


      Maintenance


      Car Wash


      Paint,

      Collision &

      Glass


      Platform

      Services


      Total

      System-wide Sales











      Franchise stores


      $        823,656


      $             —


      $    2,305,420


      $        324,608


      $    3,453,684

      Company-operated stores


      605,393


      302,193


      248,796


      3,303


      1,159,685

      Independently operated stores


      —


      157,647


      —


      —


      157,647

      Total System-wide Sales


      $    1,429,049


      $        459,840


      $    2,554,216


      $        327,911


      $    4,771,016












      Store Count (in whole numbers)











      Franchise stores


      1,108


      —


      1,662


      207


      2,977

      Company-operated stores


      624


      418


      258


      1


      1,301

      Independently operated stores


      —


      715


      —


      —


      715

      Total Store Count


      1,732


      1,133


      1,920


      208


      4,993














      Nine months ended September 24, 2022

      (in thousands)


      Maintenance


      Car Wash


      Paint,

      Collision &

      Glass


      Platform

      Services


      Total

      System-wide Sales











      Franchise stores


      $        670,079


      $                  —


      $    2,003,401


      $        348,890


      $    3,022,370

      Company-operated stores


      497,638


      294,526


      161,348


      $            3,975


      957,487

      Independently operated stores


      —


      158,500


      —


      —


      158,500

      Total System-wide Sales


      $    1,167,717


      $        453,026


      $    2,164,749


      $        352,865


      $    4,138,357












      Store Count (in whole numbers)











      Franchise stores


      1,023


      —


      1,625


      201


      2,849

      Company-operated stores


      574


      369


      197


      1


      1,141

      Independently operated stores


      —


      717


      —


      —


      717

      Total Store Count


      1,597


      1,086


      1,822


      202


      4,707

      SOURCE Driven Brands

      Modal title

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