Driven Brands Holdings Inc. Files Q3 2024 10-Q Report

Ticker: DRVN · Form: 10-Q · Filed: Nov 7, 2024 · CIK: 1804745

Sentiment: neutral

Topics: 10-Q, quarterly-report, financials

Related Tickers: DRVN

TL;DR

**DRVN filed its 10-Q for Sept 28, 2024. Check financials.**

AI Summary

Driven Brands Holdings Inc. filed its quarterly report for the period ended September 28, 2024. The company, incorporated in Delaware, operates under the trading symbol DRVN on The Nasdaq Global Select Market. This report details its financial performance and operational status for the specified quarter.

Why It Matters

This filing provides investors with an update on Driven Brands' financial health and operational performance, crucial for understanding the company's trajectory in the automotive services sector.

Risk Assessment

Risk Level: low — This is a routine quarterly filing providing standard financial and operational disclosures.

Key Players & Entities

FAQ

What is the primary purpose of this Form 10-Q filing?

The Form 10-Q is a quarterly report filed by companies to provide a comprehensive update on their financial performance and operational status for the preceding quarter.

For what period does this 10-Q report cover?

This report covers the quarterly period ended September 28, 2024.

On which stock exchange is Driven Brands Holdings Inc. traded?

Driven Brands Holdings Inc. common stock is traded on The Nasdaq Global Select Market.

What is the trading symbol for Driven Brands Holdings Inc.?

The trading symbol for Driven Brands Holdings Inc. is DRVN.

Is Driven Brands Holdings Inc. considered a large accelerated filer?

Yes, the filing indicates that Driven Brands Holdings Inc. is a large accelerated filer.

Filing Stats: 4,528 words · 18 min read · ~15 pages · Grade level 18.2 · Accepted 2024-11-07 16:36:41

Key Financial Figures

Filing Documents

FINANCIAL INFORMATION

PART I. FINANCIAL INFORMATION

Financial Statements (Unaudited)

Item 1. Financial Statements (Unaudited) 3 Consolidated Statements of Operations 3 Consolidated Statements of Comprehensive Income (Loss) 4 Consolidated Balance Sheets 5 Consolidated Statements of Shareholders' Equity 6 Consolidated Statements of Cash Flows 8 Notes to the Consolidated Financial Statements 10

Management's Discussion and Analysis of Financial Condition and Results of Operations

Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations 23

Quantitative and Qualitative Disclosures About Market Risk

Item 3. Quantitative and Qualitative Disclosures About Market Risk 47

Controls and Procedures

Item 4. Controls and Procedures 48

. OTHER INFORMATION

PART II . OTHER INFORMATION

Legal Proceedings

Item 1. Legal Proceedings 49

Risk Factors

Item 1A. Risk Factors 49

Unregistered Sales of Equity Securities and Use of Proceeds

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds 49

Defaults Upon Senior Securities

Item 3. Defaults Upon Senior Securities 49

Other Information

Item 5. Other Information 49

Exhibits

Item 6. Exhibits 50

Forward-Looking Statements

Forward-Looking Statements This Quarterly Report on Form 10-Q 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 or ability to integrate, our stores and business units successfully; (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 expre

Financial Information

Part I. Financial Information

Financial Statements (Unaudited)

Item 1. Financial Statements (Unaudited) DRIVEN BRANDS HOLDINGS INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited) Three Months Ended Nine Months Ended (in thousands, except per share amounts) September 28, 2024 September 30, 2023 September 28, 2024 September 30, 2023 Net revenue: Franchise royalties and fees $ 49,475 $ 47,362 $ 144,549 $ 140,682 Company-operated store sales 388,132 389,041 1,157,269 1,159,685 Independently-operated store sales 49,959 43,582 163,286 157,647 Advertising contributions 26,823 27,121 75,804 73,547 Supply and other revenue 77,290 73,928 234,563 218,791 Total net revenue 591,679 581,034 1,775,471 1,750,352 Operating Expenses: Company-operated store expenses 242,073 262,282 738,300 762,731 Independently-operated store expenses 29,382 25,773 90,693 87,095 Advertising expenses 26,823 27,121 75,804 73,547 Supply and other expenses 35,790 38,816 112,560 118,188 Selling, general, and administrative expenses 149,766 123,012 387,291 332,155 Acquisition related costs ( 606 ) 1,667 1,459 7,264 Store opening costs 1,476 1,372 3,679 3,774 Depreciation and amortization 43,357 45,639 131,219 129,256 Goodwill impairment — 850,970 — 850,970 Asset impairment charges and lease terminations 24,111 111,239 55,934 117,450 Total operating expenses 552,172 1,487,891 1,596,939 2,482,430 Operating income 39,507 ( 906,857 ) 178,532 ( 732,078 ) Other expenses, net: Interest expense, net 43,677 41,292 119,245 120,304 Foreign currency transaction loss, net 765 2,980 5,767 3 Loss on debt extinguishment 205 — 205 — Other expense, net 44,647 44,272 125,217 120,307 (Loss) income before taxes ( 5,140 ) ( 951,129 ) 53,315 ( 852,385 ) Income tax expense (benefit) 9,807 ( 151,818 ) 33,842 ( 120,572 ) Net (loss) income $ ( 14,947 ) $ ( 799,311 ) $ 19,473 $ ( 731,813 ) (Loss) earnings per share: Basic $ ( 0.09 ) $ ( 4.82 ) $ 0.12 $ ( 4.40 ) Diluted $ ( 0.09 ) $ ( 4.83 ) $ 0.12 $ ( 4.41 ) Weighted average shares outst

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) Note 1— Description of Business Description of Business Driven Brands Holdings Inc. together with its subsidiaries (collectively, the "Company") is a Delaware corporation and is the parent holding company of Driven Brands, Inc. and Shine Holdco (UK) Limited (collectively, "Driven Brands"). Driven Brands is the largest automotive services company in North America with a growing and highly-franchised base of more than 5,100 franchised, independently-operated, and company-operated locations across 49 U.S. states and 13 other countries. The Company has a portfolio of highly recognized brands, including Take 5 Oil Change , Take 5 Car Wash , Meineke Car Care Centers , MAACO , CARSTAR , Auto Glass Now , and 1-800-Radiator & A/C that compete in the automotive services industry. Tax Receivable Agreement The Company expects to be able to utilize certain tax benefits which are related to periods prior to the effective date of the Company's IPO and are attributed to our pre-IPO shareholders. The Company previously entered into a Tax Receivable Agreement which provides our pre-IPO shareholders with the right to receive payment of 85 % of the amount of cash savings, if any, in U.S. and Canadian federal, state, local, and provincial income tax that the Company will actually realize or divests. The Tax Receivable Agreement was effective as of the date of the Company's IPO. The Company recorded a current tax receivable liability of $ 56 million as of December 30, 2023 and a non-current tax receivable liability of $ 134 million and $ 118 million as of September 28, 2024 and December 30, 2023, respectively, on the consolidated balance sheets. We made payments of approximately $ 38 million under the Tax Receivable Agreement in 2024. Note 2— Summary of Significant Accounting Policies Fiscal Year The Company operates and reports financial information on a 52- or 53-week year with the fiscal year ending on the last Saturday

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