Cover Page
Cover Page - shares | 3 Months Ended | |
Apr. 01, 2023 | May 04, 2023 | |
Cover [Abstract] | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Apr. 01, 2023 | |
Document Transition Report | false | |
Entity File Number | 001-39898 | |
Entity Registrant Name | Driven Brands Holdings Inc. | |
Entity Incorporation, State or Country Code | DE | |
Entity Tax Identification Number | 47-3595252 | |
Entity Address, Address Line One | 440 South Church Street | |
Entity Address, Address Line Two | Suite 700 | |
Entity Address, City or Town | Charlotte | |
Entity Address, State or Province | NC | |
Entity Address, Postal Zip Code | 28202 | |
City Area Code | 704 | |
Local Phone Number | 377-8855 | |
Title of 12(b) Security | Common Stock, $0.01 par value | |
Trading Symbol | DRVN | |
Security Exchange Name | NASDAQ | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Large Accelerated Filer | |
Entity Small Business | false | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 167,560,270 | |
Entity Central Index Key | 0001804745 | |
Amendment Flag | false | |
Document Fiscal Year Focus | 2023 | |
Document Fiscal Period Focus | Q1 | |
Current Fiscal Year End Date | --12-30 |
CONSOLIDATED STATEMENTS OF OPER
CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited) - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | |
Apr. 01, 2023 | Mar. 26, 2022 | |
Revenue: | ||
Revenue | $ 562,467 | $ 468,323 |
Operating Expenses: | ||
Selling, general, and administrative expenses | 112,328 | 92,220 |
Acquisition costs | 1,847 | 4,318 |
Store opening costs | 1,025 | 506 |
Depreciation and amortization | 38,198 | 33,023 |
Asset impairment charges and lease terminations | 167 | 898 |
Total operating expenses | 485,281 | 394,603 |
Operating income | 77,186 | 73,720 |
Other expenses, net: | ||
Interest expense, net | 38,141 | 25,353 |
(Gain) loss on foreign currency transactions | (1,675) | 971 |
Other expense, net | 36,466 | 26,324 |
Income before taxes | 40,720 | 47,396 |
Income tax expense | 10,971 | 12,968 |
Net income | 29,749 | 34,428 |
Net loss attributable to non-controlling interest | 0 | (15) |
Net income attributable to Driven Brands Holdings Inc. | $ 29,749 | $ 34,443 |
Earnings per share: | ||
Basic (in dollars per share) | $ 0.18 | $ 0.21 |
Diluted (in dollars per share) | $ 0.17 | $ 0.20 |
Weighted average shares outstanding | ||
Basic (shares) | 162,784 | 162,762 |
Diluted (shares) | 166,874 | 166,748 |
Franchise royalties and fees | ||
Revenue: | ||
Revenue | $ 43,515 | $ 37,888 |
Company-operated store sales | ||
Revenue: | ||
Revenue | 376,066 | 292,391 |
Operating Expenses: | ||
Operating expenses | 243,409 | 177,867 |
Independently-operated store sales | ||
Revenue: | ||
Revenue | 52,532 | 63,089 |
Operating Expenses: | ||
Operating expenses | 29,364 | 33,299 |
Advertising contributions | ||
Revenue: | ||
Revenue | 21,677 | 19,698 |
Operating Expenses: | ||
Operating expenses | 21,677 | 19,698 |
Supply and other revenue | ||
Revenue: | ||
Revenue | 68,677 | 55,257 |
Operating Expenses: | ||
Operating expenses | $ 37,266 | $ 32,774 |
CONSOLIDATED STATEMENTS OF COMP
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) (Unaudited) - USD ($) $ in Thousands | 3 Months Ended | |
Apr. 01, 2023 | Mar. 26, 2022 | |
Statement of Comprehensive Income [Abstract] | ||
Net income | $ 29,749 | $ 34,428 |
Other comprehensive income (loss): | ||
Foreign currency translation adjustments | 11,351 | (5,574) |
Unrealized (loss) gain from cash flow hedges, net of tax benefit of ($2) and $0, respectively | (200) | 132 |
Actuarial gain of defined benefit pension plan, net of tax expense of $0 and $0, respectively | 16 | 0 |
Other comprehensive income (loss), net | 11,167 | (5,442) |
Total comprehensive income | 40,916 | 28,986 |
Comprehensive loss attributable to non-controlling interests | (1) | (2) |
Comprehensive income attributable to Driven Brands Holdings Inc. | $ 40,917 | $ 28,988 |
CONSOLIDATED BALANCE SHEETS (Un
CONSOLIDATED BALANCE SHEETS (Unaudited) - USD ($) $ in Thousands | Apr. 01, 2023 | Dec. 31, 2022 |
Current assets: | ||
Cash and cash equivalents | $ 190,841 | $ 227,110 |
Restricted cash | 792 | 792 |
Accounts and notes receivable, net | 216,621 | 179,888 |
Inventory | 77,848 | 72,040 |
Prepaid and other assets | 54,149 | 40,084 |
Income tax receivable | 12,715 | 15,075 |
Advertising fund assets, restricted | 48,618 | 36,421 |
Total current assets | 601,584 | 571,410 |
Other assets | 22,773 | 30,561 |
Property and equipment, net | 1,710,057 | 1,545,738 |
Operating lease right-of-use assets | 1,312,568 | 1,299,189 |
Deferred commissions | 6,691 | 7,121 |
Intangibles, net | 761,597 | 765,903 |
Goodwill | 2,287,960 | 2,277,065 |
Deferred tax assets | 2,925 | 2,911 |
Total assets | 6,706,155 | 6,499,898 |
Current liabilities: | ||
Accounts payable | 88,862 | 60,606 |
Accrued expenses and other liabilities | 300,813 | 317,318 |
Income tax payable | 2,617 | 4,454 |
Current portion of long-term debt | 33,263 | 32,986 |
Income tax receivable liability | 53,554 | 53,328 |
Advertising fund liabilities | 47,572 | 36,726 |
Total current liabilities | 526,681 | 505,418 |
Long-term debt | 2,816,493 | 2,705,281 |
Deferred tax liabilities | 282,709 | 276,749 |
Operating lease liabilities | 1,202,359 | 1,177,501 |
Income tax receivable liability | 117,915 | 117,915 |
Deferred revenue | 29,506 | 30,046 |
Long-term accrued expenses and other liabilities | 31,450 | 33,419 |
Total liabilities | 5,007,113 | 4,846,329 |
Preferred Stock $0.01 par value; 100,000,000 shares authorized; none issued or outstanding | 0 | 0 |
Common stock, $0.01 par value, 900,000,000 shares authorized: and 167,560,449 and 167,404,047 shares outstanding; respectively | 1,675 | 1,674 |
Additional paid-in capital | 1,633,460 | 1,628,904 |
Retained earnings | 114,544 | 84,795 |
Accumulated other comprehensive loss | (51,267) | (62,435) |
Total shareholders’ equity attributable to Driven Brands Holdings Inc. | 1,698,412 | 1,652,938 |
Non-controlling interests | 630 | 631 |
Total shareholders' equity | 1,699,042 | 1,653,569 |
Total liabilities and shareholders' equity | $ 6,706,155 | $ 6,499,898 |
CONSOLIDATED BALANCE SHEETS (_2
CONSOLIDATED BALANCE SHEETS (Unaudited) (Parenthetical) - $ / shares | Apr. 01, 2023 | Dec. 31, 2022 |
Statement of Financial Position [Abstract] | ||
Preferred , par value (in dollars per share) | $ 0.01 | $ 0.01 |
Preferred stock, shares authorized (in shares) | 100,000,000 | 100,000,000 |
Preferred stock, shares issued (in shares) | 0 | |
Preferred stock, shares outstanding (in shares) | 0 | 0 |
Common stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Common stock, shares authorized (in shares) | 900,000,000 | 900,000,000 |
CONSOLIDATED STATEMENTS OF SHAR
CONSOLIDATED STATEMENTS OF SHAREHOLDERS’/MEMBERS’ EQUITY (Unaudited) - USD ($) $ in Thousands | Total | Common stock | Additional paid-in capital | Retained earnings | Accumulated other comprehensive income (loss) | Non-controlling interests |
Beginning balance (in shares) at Dec. 25, 2021 | 167,380,450 | |||||
Beginning balance at Dec. 25, 2021 | $ 1,674 | $ 1,605,890 | $ 41,607 | $ (5,028) | $ 1,099 | |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Stock issued relating to Employee Stock Purchase Plan (in shares) | 111,924 | |||||
Stock issued related to Employee Stock Purchase Plan | 2,091 | |||||
Shares issued for exercise/vesting of share-based compensation awards (in shares) | 14,455 | |||||
Equity-based compensation expense | 2,618 | |||||
Tax withholding on stock option exercises | (14) | |||||
Net income | $ 34,428 | 34,443 | (15) | |||
Other comprehensive income (loss) | (5,442) | (5,455) | 13 | |||
Divestiture of Denmark car wash operations | (432) | |||||
Ending balance (in shares) at Mar. 26, 2022 | 167,506,829 | |||||
Ending balance at Mar. 26, 2022 | $ 1,678,492 | $ 1,675 | 1,610,585 | 76,050 | (10,483) | 665 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Preferred stock (in shares) | 0 | |||||
Preferred stock | $ 0 | |||||
Preferred stock (in shares) | 0 | |||||
Beginning balance (in shares) at Dec. 31, 2022 | 167,404,047 | |||||
Beginning balance at Dec. 31, 2022 | $ 1,653,569 | $ 1,674 | 1,628,904 | 84,795 | (62,435) | 631 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Stock issued relating to Employee Stock Purchase Plan (in shares) | 26,358 | |||||
Stock issued related to Employee Stock Purchase Plan | $ 1 | 612 | ||||
Shares issued for exercise/vesting of share-based compensation awards (in shares) | 130,044 | |||||
Shares issued for exercise/vesting of share-based compensation awards | $ 1 | |||||
Equity-based compensation expense | 2,564 | |||||
Exercise of stock options | 1,500 | |||||
Tax withholding on stock option exercises | (120) | |||||
Net income | 29,749 | 29,749 | ||||
Other comprehensive income (loss) | 11,167 | 11,168 | (1) | |||
Ending balance (in shares) at Apr. 01, 2023 | 167,560,449 | |||||
Ending balance at Apr. 01, 2023 | $ 1,699,042 | $ 1,675 | $ 1,633,460 | $ 114,544 | $ (51,267) | $ 630 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Preferred stock (in shares) | 0 | |||||
Preferred stock | $ 0 |
CONSOLIDATED STATEMENTS OF SH_2
CONSOLIDATED STATEMENTS OF SHAREHOLDERS’/MEMBERS’ EQUITY (Parenthetical) (Unaudited) - $ / shares | Apr. 01, 2023 | Dec. 31, 2022 | Mar. 26, 2022 |
Statement of Stockholders' Equity [Abstract] | |||
Preferred , par value (in dollars per share) | $ 0.01 | $ 0.01 | $ 0.01 |
Common stock, par value (in dollars per share) | $ 0.01 | $ 0.01 | $ 0.01 |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) - USD ($) $ in Thousands | 3 Months Ended | |
Apr. 01, 2023 | Mar. 26, 2022 | |
Statement of Cash Flows [Abstract] | ||
Net income | $ 29,749 | $ 34,428 |
Adjustments to reconcile net income (loss) to net cash provided by operating activities: | ||
Depreciation and amortization | 38,198 | 33,023 |
Equity-based compensation expense | 2,564 | 2,618 |
Loss on foreign denominated transactions | 161 | 970 |
(Gain) loss on foreign currency derivatives | (1,836) | 2,702 |
Loss (gain) on sale of businesses, fixed assets, and sale-leaseback transactions | 1,671 | (618) |
Reclassification of interest rate hedge to income | (519) | 0 |
Bad debt expense | 82 | 372 |
Asset impairment costs | 167 | 898 |
Amortization of deferred financing costs and bond discounts | 1,850 | 2,224 |
Provision for deferred income taxes | 4,650 | 132 |
Other, net | 4,043 | 5,231 |
Changes in assets and liabilities, net of acquisitions: | ||
Accounts and notes receivable, net | (44,084) | (21,123) |
Inventory | (5,473) | (1,787) |
Prepaid and other assets | (13,867) | 6,133 |
Advertising fund assets and liabilities, restricted | 906 | (1,204) |
Other Assets | (7,382) | (5,736) |
Deferred commissions | 455 | (39) |
Deferred revenue | 161 | 455 |
Accounts payable | 25,597 | 509 |
Accrued expenses and other liabilities | (960) | (61,624) |
Income tax receivable | 659 | 11,476 |
Cash provided by operating activities | 36,792 | 9,040 |
Cash flows from investing activities: | ||
Capital expenditures | (169,155) | (68,967) |
Cash used in business acquisitions, net of cash acquired | (29,307) | (224,526) |
Proceeds from sale-leaseback transactions | 16,772 | 37,781 |
Proceeds from sale or disposal of businesses and fixed assets | 0 | 2,380 |
Cash used in investing activities | (181,690) | (253,332) |
Cash flows from financing activities: | ||
Repayment of long-term debt | (7,002) | (4,820) |
Proceeds from revolving lines of credit and short-term debt | 140,000 | 0 |
Repayments of revolving lines of credit and short-term debt | (25,000) | 0 |
Repayment of principal portion of finance lease liability | (854) | (879) |
Stock option exercises | 1,380 | 0 |
Other, net | (32) | (20) |
Cash provided by (used in) financing activities | 108,492 | (5,719) |
Effect of exchange rate changes on cash | 2,392 | (592) |
Net change in cash, cash equivalents, restricted cash, and cash included in advertising fund assets, restricted | (34,014) | (250,603) |
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 | 190,841 | 270,681 |
Cash included in advertising fund assets, restricted, end of period | 35,126 | 40,716 |
Restricted cash, end of period | 792 | 792 |
Cash, cash equivalents, restricted cash, and cash included in advertising fund assets, restricted, end of period | 226,759 | 312,189 |
Supplemental cash flow disclosures - non-cash items: | ||
Capital expenditures included in accrued expenses and other liabilities | 39,534 | 2,940 |
Deferred consideration included in accrued expenses and other liabilities | 19,069 | 14,617 |
Supplemental cash flow disclosures - cash paid for: | ||
Interest | 37,942 | 24,238 |
Income taxes | $ 5,671 | $ 321 |
CONSOLIDATED STATEMENTS OF CO_2
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) (Unaudited) (Parenthetical) - USD ($) $ in Thousands | 3 Months Ended | |
Apr. 01, 2023 | Mar. 26, 2022 | |
Statement of Comprehensive Income [Abstract] | ||
Unrealized gain (loss) from cash flow hedges, net of tax benefit | $ (2) | $ 0 |
Actuarial gain of defined benefit pension plan, tax expense | $ 0 | $ 0 |
Description of Business
Description of Business | 3 Months Ended |
Apr. 01, 2023 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Description of Business | 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 4,800 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. Approximately 75% of the Company’s locations are franchised or independently-operated. 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 current and former 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. The tax receivable agreement is effective as of the date of the Company’s IPO. The Company recorded a current tax receivable liability of $54 million and $53 million as of April 1, 2023 and December 31, 2022, respectively, and a non-current tax receivable liability of $118 million as of April 1, 2023 and December 31, 2022, on the unaudited consolidated balance sheets. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 3 Months Ended |
Apr. 01, 2023 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | 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 in December and fiscal quarters ending on the 13th Saturday of each quarter (or 14th Saturday when applicable with respect to the fourth fiscal quarter). The three months ended April 1, 2023 and March 26, 2022, each consisted of 13 weeks, respectively. The Car Wash segment is currently consolidated based on a calendar month end. Basis of Presentation The unaudited consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America ("U.S. GAAP") for interim financial information and pursuant to the rules and regulations of the Securities and Exchange Commission. In the opinion of management, the unaudited interim financial data includes all adjustments, consisting only of normal recurring adjustments, necessary for a fair statement of the results of operations, balance sheet, cash flows, and shareholders’/members’ equity for the interim periods presented. The adjustments include the accounts of the Company and its wholly-owned subsidiaries. All significant intercompany balances and transactions have been eliminated in consolidation. These unaudited interim consolidated financial statements should be read in conjunction with the consolidated financial statements as of and for the year ended December 31, 2022. Certain information and note disclosures normally included in the unaudited financial statements prepared in accordance with U.S. GAAP have been condensed or omitted pursuant to such rules and regulations. The results of operations for the three months ended April 1, 2023 may not be indicative of the results to be expected for any other interim period or the year ending December 30, 2023. Certain prior year amounts have been reclassified to conform to current year presentation. Use of Estimates The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts in the unaudited consolidated financial statements and the related notes to the unaudited consolidated financial statements. Significant items that are subject to estimates and assumptions include, but are not limited to, valuation of intangible assets and goodwill; income taxes; allowances for credit losses; valuation of derivatives; self-insurance claims; and stock-based compensation. Management evaluates its estimates on an ongoing basis and may employ outside experts to assist in its evaluations. Changes in such estimates, based on historical experience, current conditions, and various other additional information, may affect amounts reported in future periods. Actual results could differ due to uncertainty inherent in the natures of these estimates. Fair Value of Financial Instruments Financial assets and liabilities are categorized, based on the inputs to the valuation technique, into a three-level fair value hierarchy. The fair value hierarchy gives the highest priority to the quoted prices in active markets for identical assets and liabilities and the lowest priority to unobservable inputs. Observable market data, when available, is required to be used in making fair value measurements. When inputs used to measure fair value fall within different levels of the hierarchy, the level within which the fair value measurement is categorized is based on the lowest level input that is significant to the fair value measurement. The Company classifies and discloses assets and liabilities carried at fair value in one of the following three categories: Level 1: Inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities that the reporting entity has the ability to access at the measurement date; Level 2: Inputs are inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly; or Level 3: Inputs are unobservable inputs for the asset or liability. Unobservable inputs are used to measure fair value to the extent that observable inputs are not available, thereby allowing for situations in which there is little, if any, market activity for the asset or liability at the measurement date. Financial assets and liabilities measured at fair value on a recurring basis as of April 1, 2023 and December 31, 2022 are summarized as follows: Items Measured at Fair Value at April 1, 2023 (in thousands) Level 1 Level 2 Total Mutual fund investments held in rabbi trust $ 577 $ — $ 577 Derivative assets, recorded in other assets — 2,116 2,116 Derivative liabilities, recorded in accrued expenses and other liabilities — 2,336 2,336 Items Measured at Fair Value at December 31, 2022 (in thousands) Level 1 Level 2 Total Mutual fund investments held in rabbi trust $ 758 $ — $ 758 Derivative assets, recorded in prepaid and other assets — 158 158 Derivative assets, recorded in other assets — 2,148 2,148 Derivative liabilities, recorded in accrued expenses and other liabilities — 5,005 5,005 The fair value of the Company’s foreign currency derivative instruments are derived from valuation models, which use Level 2 observable inputs such as quoted market prices, interest rates, and forward yield curves. The carrying value and estimated fair value of total long-term debt were as follows: April 1, 2023 December 31, 2022 (in thousands) Carrying value Estimated fair value Carrying value Estimated fair value Long-term debt $ 2,891,763 $ 2,662,415 $ 2,784,175 $ 2,477,456 Recently Issued Accounting Standards In March 2020, the FASB issued ASU 2020-04, Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting . This ASU provides optional expedients and exceptions for applying generally accepted accounting principles to contracts, hedging relationships, and other transactions affected by reference rate reform if certain criteria are met. In response to the concerns about structural risks of interbank offered rates and, particularly, the risk of cessation of LIBOR, regulators in several jurisdictions around the world have undertaken reference rate reform initiatives to identify alternative reference rates that are more observable or transaction based and less susceptible to manipulation. The ASU provides companies with optional guidance to ease the potential accounting burden associated with transitioning away from reference rates that are expected to be discontinued. This guidance is effective immediately and the amendments may be applied |
Acquisitions and Dispositions
Acquisitions and Dispositions | 3 Months Ended |
Apr. 01, 2023 | |
Business Combination and Asset Acquisition [Abstract] | |
Acquisitions and Dispositions | Acquisitions and Dispositions The Company strategically acquires companies and assets in order to increase its footprint and offer products and services that diversify its existing offerings, primarily through asset purchase agreements. These acquisitions are accounted for as business combinations using the acquisition method, whereby the purchase price is allocated to the assets acquired and liabilities assumed, based on their fair values as of the date of the acquisition with the remaining amount recorded in goodwill. 2023 Acquisitions The Company completed two acquisitions in the Maintenance segment during the three months ended April 1, 2023, representing two sites. The aggregate cash consideration for these acquisitions, net of cash acquired and liabilities assumed, was approximately $2 million. The Company completed one acquisition in the Car Wash segment during the three months ended April 1, 2023, representing one site. The aggregate cash consideration for this acquisition, net of cash acquired and liabilities assumed, was approximately $11 million. The Company estimated the fair value of acquired assets and liabilities as of the date of acquisition based on information currently available. As the Company finalizes the fair value of assets acquired and liabilities assumed, additional purchase price adjustments may be recorded during the measurement period. The provisional amounts for assets acquired and liabilities assumed for the 2023 acquisitions are as follows: Maintenance Segment (in thousands) Maintenance Assets: Operating lease right-of-use assets $ 658 Property and equipment, net 1,655 Goodwill 695 Assets acquired 3,008 Liabilities: Accrued Expenses and other liabilities 17 Operating lease liabilities 641 Total liabilities assumed 658 Cash consideration, net of cash acquired 2,255 Deferred consideration 95 Total consideration, net of cash acquired $ 2,350 Car Wash Segment (in thousands) Car Wash Assets: Property and equipment, net $ 8,270 Goodwill 2,724 Assets acquired 10,994 Total consideration, net of cash acquired $ 10,994 Goodwill represents the excess of the consideration paid over the fair value of net assets acquired and includes the expected benefit of synergies within the existing segments and intangible assets that do not qualify for separate recognition. Goodwill, which was allocated to the Car Wash and Maintenance segments, is substantially all deductible for income tax purposes. Deferred Consideration and Transaction Costs Deferred consideration is typically paid six months to one-year after the acquisition closing date once all conditions under the purchase agreement have been satisfied. Three Months Ended (in thousands) April 1, 2023 March 26, 2022 Deferred consideration at beginning of period $ 35,007 $ 16,000 Change in accrual 95 1,673 Payments (16,033) (3,056) Deferred consideration at end of period $ 19,069 $ 14,617 The Company incurred less than $1 million and approximately $2 million of transaction costs during the three months ended April 1, 2023 and March 26, 2022. 2022 Disposition On March 16, 2022, the Company disposed of its 75% owned subsidiary, IMO Denmark ApS, for consideration of $2 million. As a result of the sale, a $1 million loss was recognized within selling, general, and administrative expenses during the three months ended March 26, 2022. Also, a noncontrolling interest of less than $1 million was derecognized. The Company allocated less than $1 million of goodwill as part of the sale. |
Revenue from Contracts with Cus
Revenue from Contracts with Customers | 3 Months Ended |
Apr. 01, 2023 | |
Revenue from Contract with Customer [Abstract] | |
Revenue from Contracts with Customers | Revenue from Contracts with Customers The Company records contract assets for the incremental costs of obtaining a contract with a customer if it expects the benefit of those costs to be longer than one year and if such costs are material. Commission expenses, a primary cost associated with the sale of franchise licenses, are amortized to selling, general and administrative expenses in the consolidated statements of operations ratably over the life of the associated franchise agreement. Capitalized costs to obtain a contract as of April 1, 2023 and December 31, 2022 were $7 million and $7 million, respectively, and are presented within deferred commissions on the consolidated balance sheets. The Company recognized less than $1 million of costs during the three months ended April 1, 2023 and March 26, 2022 that were recorded as a contract asset at the beginning of the periods. |
Segment Information
Segment Information | 3 Months Ended |
Apr. 01, 2023 | |
Segment Reporting [Abstract] | |
Segment Information | Segment Information The Company’s worldwide operations are comprised of the following reportable segments: Maintenance, Car Wash, Paint, Collision & Glass, and Platform Services. In addition to the reportable segments, the Company’s consolidated financial results include “Corporate and Other” activity. Corporate and Other incurs costs related to advertising fund revenu es and expenses and shared service costs, which are related to finance, information technology, human resources, legal, supply chain, and other support services. Corporate and Other activity includes the adjustments necessary to eliminate intercompany transactions, namely sales by the Platform Services segment to the Paint, Collision & Glass and Maintenance segments. Segment results for the three months ended April 1, 2023 and March 26, 2022 are as follows: Three months ended April 1, 2023 (in thousands) Maintenance Car Wash Paint, Platform Corporate Total Franchise royalties and fees $ 12,443 $ — $ 24,298 $ 6,774 $ — $ 43,515 Company-operated store sales 195,260 102,446 77,479 881 — 376,066 Independently-operated store sales — 52,532 — — — 52,532 Advertising fund contributions — — — — 21,677 21,677 Supply and other revenue 19,965 2,002 19,026 44,378 (16,694) 68,677 Total revenue $ 227,668 $ 156,980 $ 120,803 $ 52,033 $ 4,983 $ 562,467 Segment Adjusted EBITDA $ 72,986 $ 44,309 $ 35,712 $ 17,030 $ (41,184) $ 128,853 Three months ended March 26, 2022 (in thousands) Maintenance Car Wash Paint, Platform Corporate Total Franchise royalties and fees $ 9,635 $ — $ 21,365 $ 6,888 $ — $ 37,888 Company-operated store sales 156,828 94,495 39,916 1,152 — 292,391 Independently-operated store sales — 63,089 — — — 63,089 Advertising fund contributions — — — — 19,698 19,698 Supply and other revenue 12,279 1,691 18,080 35,126 (11,919) 55,257 Total revenue $ 178,742 $ 159,275 $ 79,361 $ 43,166 $ 7,779 $ 468,323 Segment Adjusted EBITDA $ 52,485 $ 55,720 $ 28,930 $ 14,165 $ (32,280) $ 119,020 The reconciliations of Income before taxes to Segment Adjusted EBITDA for the three months ended April 1, 2023 and March 26, 2022 are as follows: Three months ended (in thousands) April 1, 2023 March 26, 2022 Income before taxes $ 40,720 $ 47,396 Depreciation and amortization 38,198 33,023 Interest expense, net 38,141 25,353 Acquisition related costs (a) 1,847 4,318 Non-core items and project costs, net (b) 1,824 866 Store opening costs 1,025 506 Straight-line rent adjustment (c) 4,365 4,093 Equity-based compensation expense (d) 2,564 2,618 Foreign currency transaction (gain) / loss, net (e) (1,675) 971 Asset sale leaseback loss (gain), impairment and closed store expenses (f) 1,844 (124) Segment Adjusted EBITDA $ 128,853 $ 119,020 (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. (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) Represents non-cash equity-based compensation expense. (e) 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. (f) Relates to (gains) losses, net on sale leasebacks, impairment of certain fixed assets and operating lease right-of-use assets related to closed locations, and lease exit costs and other costs associated with stores that were closed prior to the respective lease termination dates. |
Long-Term Debt
Long-Term Debt | 3 Months Ended |
Apr. 01, 2023 | |
Debt Disclosure [Abstract] | |
Long-Term Debt | Long-Term Debt The Company’s long-term debt obligations consist of the following: (in thousands) April 1, 2023 December 31, 2022 Series 2018-1 Securitization Senior Notes, Class A-2 $ 261,250 $ 261,938 Series 2019-1 Securitization Senior Notes, Class A-2 287,250 288,000 Series 2019-2 Securitization Senior Notes, Class A-2 265,375 266,063 Series 2020-1 Securitization Senior Notes, Class A-2 170,188 170,625 Series 2020-2 Securitization Senior Notes, Class A-2 439,875 441,000 Series 2021-1 Securitization Senior Notes, Class A-2 443,250 444,375 Series 2022-1 Securitization Senior Notes, Class A-2 363,175 364,088 Term Loan Facility 495,000 496,250 Revolving Credit Facility 115,000 — Other debt (a) 51,400 51,836 Total debt 2,891,763 2,784,175 Less: unamortized debt issuance costs (42,007) (45,908) Less: current portion of long-term debt (33,263) (32,986) Total long-term debt, net $ 2,816,493 $ 2,705,281 (a) Consists primarily of finance lease obligations. Series 2019-3 Variable Funding Securitization Senior Notes In December 2019, Driven Brands Funding, LLC (the “Issuer”) issued Series 2019-3 Variable Funding Senior Notes, Class A-1 (the “2019 VFN”) in the revolving amount of $115 million. The 2019 VFN have a final legal maturity date in January 2050. The commitment under the 2019 VFN was set to expire in July 2022, with the option of three one-year extensions. In July 2022, the Company exercised the option to extend an additional year. The 2019 VFN are secured by substantially all assets of the Issuer and are guaranteed by the Securitization Entities. The Issuer may elect interest at the Base Rate plus an applicable margin or London Interbank Offered Rate (“LIBOR”) plus an applicable margin (the LIBOR rate as the applicable interest rate). No amounts were outstanding under the 2019 VFN as of April 1, 2023 and no borrowings or repayments were made during the three months ended April 1, 2023. As of April 1, 2023, there were $25 million of outstanding letters of credit which reduced the borrowing availability under the 2019 VFN. Driven Holdings Revolving Credit Facility In May 2021, Driven Holdings, LLC, (“the Borrower”) a Delaware limited liability company and indirect wholly-owned subsidiary of Driven Brands Holdings Inc., entered into a credit agreement to secure a revolving line of credit with a group of financial institutions (“Revolving Credit Facility”), which provides for an aggregate amount of up to $300 million, and has a maturity date in May 2026 (“Credit Agreement”). Adjusted Base Rate (“ABR”) borrowings incur interest at the highest of (i) the federal funds rate plus 0.50% per annum, (ii) the U.S. prime rate, and (iii) the one-month adjusted LIBOR plus 1.00% per annum, in each case, plus an applicable margin of 0.50%, which may increase to 0.75% based on the Net First Lien Leverage Ratio under the Revolving Credit Facility. Eurocurrency borrowings incur interest at an adjusted LIBOR plus an applicable margin of 1.50%, which may increase to 1.75% based on the Net First Lien Leverage Ratio under the Revolving Credit Facility. The Revolving Credit Facility also includes periodic commitment fees based on the available unused balance and a quarterly administrative fee. There was $115 million outstanding on the Revolving Credit Facility as of April 1, 2023 with $140 million of borrowings and $25 million of repayments made during the three months ended April 1, 2023. The Company’s debt agreements are subject to certain quantitative and qualitative covenants. As of April 1, 2023, the Company and its subsidiaries were in compliance with all covenants. |
Leases
Leases | 3 Months Ended |
Apr. 01, 2023 | |
Leases [Abstract] | |
Leases | Leases During the three months ended April 1, 2023, the Company sold one maintenance and five car wash properties in various locations throughout the United States for a total of $17 million, resulting in a net gain of $3 million. Concurrent with the closing of these sales, the Company entered into various operating lease agreements pursuant to which the Company leased back the properties. These lease agreements have terms of 20 years. The Company does not include option periods in its determination of the lease term unless renewals are deemed reasonably certain to be exercised. The Company recorded an operating lease right-of-use asset and operating lease liability of $10 million and $10 million, respectively, related to these lease arrangements as of April 1, 2023. Supplemental cash flow information related to the Company’s lease arrangements for the three months ended April 1, 2023 and March 26, 2022, respectively, was as follows: Three Months Ended (in thousands) April 1, 2023 March 26, 2022 Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows used in operating leases $ 29,558 $ 28,073 Operating cash flows used in finance leases 475 370 Financing cash flows used in finance leases 529 414 |
Leases | Leases During the three months ended April 1, 2023, the Company sold one maintenance and five car wash properties in various locations throughout the United States for a total of $17 million, resulting in a net gain of $3 million. Concurrent with the closing of these sales, the Company entered into various operating lease agreements pursuant to which the Company leased back the properties. These lease agreements have terms of 20 years. The Company does not include option periods in its determination of the lease term unless renewals are deemed reasonably certain to be exercised. The Company recorded an operating lease right-of-use asset and operating lease liability of $10 million and $10 million, respectively, related to these lease arrangements as of April 1, 2023. Supplemental cash flow information related to the Company’s lease arrangements for the three months ended April 1, 2023 and March 26, 2022, respectively, was as follows: Three Months Ended (in thousands) April 1, 2023 March 26, 2022 Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows used in operating leases $ 29,558 $ 28,073 Operating cash flows used in finance leases 475 370 Financing cash flows used in finance leases 529 414 |
Equity-based Compensation
Equity-based Compensation | 3 Months Ended |
Apr. 01, 2023 | |
Share-Based Payment Arrangement [Abstract] | |
Equity-based Compensation | Equity-based Compensation The Company granted new awards during the three months ended April 1, 2023, consisting of 312,617 restricted stock units (“RSUs”) and 575,267 performance stock units (“PSUs”). Awards are eligible to vest provided that the employee remains in continuous service on each vesting date. The RSUs vest ratably in three installments on each of the first three three-year performance period. The number of PSUs that vest is contingent on the Company achieving certain performance goals, one being a market condition and the other being a performance condition. The number of PSU shares that vest may range from zero to 200% of the original grant, based upon the level of performance. The awards are considered probable of meeting vesting requirements, and therefore, the Company has started recognizing expense. The fair value of the total RSUs, performance based PSUs and market based PSUs granted during the three months ended April 1, 2023 were $9 million, $10 million and $8 million, respectively. The Company based the fair value of the RSUs and performance based PSUs on the Company’s stock price on the grant date. The Company determined the fair value of the market based PSUs granted during the three months ended April 1, 2023 by using a Monte Carlo simulation, using the following assumptions: (i) an expected term of 2.8 years, (ii) an expected volatility of 38.80%, (iii) a correlation of the S&P Mid-cap Index peer group of 60.20%, and (iv) no expected dividend. The Company determined the fair value of the market based PSUs granted during the three months ended March 26, 2022 by using a Monte Carlo simulation, using the following assumptions: (i) an expected term of 3 years, (ii) an expected volatility of 40.90%, (iii) a correlation of the S&P Mid-cap Index peer group of 50.70%, and (iv) no expected dividend. |
Earnings per share
Earnings per share | 3 Months Ended |
Apr. 01, 2023 | |
Earnings Per Share [Abstract] | |
Earnings per share | Earnings per share The Company calculates basic and diluted earnings per share using the two-class method. The following table sets forth the computation of basic and diluted earnings per share attributable to common shareholders: Three Months Ended (in thousands, except per share amounts) April 1, 2023 March 26, 2022 Basic earnings per share: Net income attributable to Driven Brands Holdings Inc. $ 29,749 34,443 Less: Net income attributable to participating securities, basic 626 735 Net income after participating securities, basic 29,123 33,708 Weighted-average common shares outstanding 162,784 162,762 Basic earnings per share $ 0.18 $ 0.21 Three Months Ended (in thousands, except per share amounts) April 1, 2023 March 26, 2022 Diluted earnings per share: Net income attributable to Driven Brands Holdings Inc. $ 29,749 $ 34,443 Less: Net income attributable to participating securities, diluted 559 657 Net income after participating securities, diluted $ 29,190 $ 33,786 Weighted-average common shares outstanding 162,784 162,762 Dilutive effect of share-based awards 4,090 3,986 Weighted-average common shares outstanding, as adjusted 166,874 166,748 Diluted earnings per share $ 0.17 $ 0.20 Basic earnings per share is computed by dividing the net income attributable to Driven Brands Holdings Inc. by the weighted-average number of common shares outstanding for the period. In addition, the Company’s participating securities are related to certain restricted stock awards issued to Section 16 officers which include non-forfeitable dividend rights. The Company has 5,351,252 shares of performance awards that are contingent on performance conditions which have not yet been met, and therefore have been excluded from the computation of weighted average shares for the three months ended April 1, 2023. The following securities were not included in the computation of diluted shares outstanding because the effect would be antidilutive: Three Months Ended Number of securities (in thousands) April 1, 2023 March 26, 2022 Restricted stock units 41 — Performance stock units — — Stock Options 2,003 — Total 2,044 — |
Income Taxes
Income Taxes | 3 Months Ended |
Apr. 01, 2023 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income TaxesThe Company’s tax provision is comprised of the most recent estimated annual effective tax rate applied to year-to-date ordinary income before taxes. The tax impacts of unusual or infrequently occurring items, including changes in judgment about valuation allowances and effects of changes in tax laws or rates, are recorded discretely in the interim period in which they occur. Income tax expense was $11 million and $13 million for the three months ended April 1, 2023 and March 26, 2022, respectively. The effective income tax rate for the three months ended April 1, 2023 was 26.9% compared to 27.4% for the three months ended March 26, 2022. The decrease in income tax expense and tax rate was primarily driven by the inclusion of foreign disregarded entity losses for the three months ended April 1, 2023. |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 3 Months Ended |
Apr. 01, 2023 | |
Accounting Policies [Abstract] | |
Fiscal Year | 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 in December and fiscal quarters ending on the 13th Saturday of each quarter (or 14th Saturday when applicable with respect to the fourth fiscal quarter). The three months ended April 1, 2023 and March 26, 2022, each consisted of 13 weeks, respectively. The Car Wash segment is currently consolidated based on a calendar month end. |
Basis of Presentation | Basis of Presentation The unaudited consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America ("U.S. GAAP") for interim financial information and pursuant to the rules and regulations of the Securities and Exchange Commission. In the opinion of management, the unaudited interim financial data includes all adjustments, consisting only of normal recurring adjustments, necessary for a fair statement of the results of operations, balance sheet, cash flows, and shareholders’/members’ equity for the interim periods presented. The adjustments include the accounts of the Company and its wholly-owned subsidiaries. All significant intercompany balances and transactions have been eliminated in consolidation. These unaudited interim consolidated financial statements should be read in conjunction with the consolidated financial statements as of and for the year ended December 31, 2022. Certain information and note disclosures normally included in the unaudited financial statements prepared in accordance with U.S. GAAP have been condensed or omitted pursuant to such rules and regulations. The results of operations for the three months ended April 1, 2023 may not be indicative of the results to be expected for any other interim period or the year ending December 30, 2023. Certain prior year amounts have been reclassified to conform to current year presentation. |
Use of Estimates | Use of Estimates The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts in the unaudited consolidated financial statements and the related notes to the unaudited consolidated financial statements. Significant items that are subject to estimates and assumptions include, but are not limited to, valuation of intangible assets and goodwill; income taxes; allowances for credit losses; valuation of derivatives; self-insurance claims; and stock-based compensation. Management evaluates its estimates on an ongoing basis and may employ outside experts to assist in its evaluations. Changes in such estimates, based on historical experience, current conditions, and various other additional information, may affect amounts reported in future periods. Actual results could differ due to uncertainty inherent in the natures of these estimates. |
Fair Value of Financial Instruments | Fair Value of Financial Instruments Financial assets and liabilities are categorized, based on the inputs to the valuation technique, into a three-level fair value hierarchy. The fair value hierarchy gives the highest priority to the quoted prices in active markets for identical assets and liabilities and the lowest priority to unobservable inputs. Observable market data, when available, is required to be used in making fair value measurements. When inputs used to measure fair value fall within different levels of the hierarchy, the level within which the fair value measurement is categorized is based on the lowest level input that is significant to the fair value measurement. The Company classifies and discloses assets and liabilities carried at fair value in one of the following three categories: Level 1: Inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities that the reporting entity has the ability to access at the measurement date; Level 2: Inputs are inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly; or Level 3: Inputs are unobservable inputs for the asset or liability. Unobservable inputs are used to measure fair value to the extent that observable inputs are not available, thereby allowing for situations in which there is little, if any, market activity for the asset or liability at the measurement date. |
Derivative Instruments | The fair value of the Company’s foreign currency derivative instruments are derived from valuation models, which use Level 2 observable inputs such as quoted market prices, interest rates, and forward yield curves. |
Recently Issued Accounting Standards | Recently Issued Accounting Standards In March 2020, the FASB issued ASU 2020-04, Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting . This ASU provides optional expedients and exceptions for applying generally accepted accounting principles to contracts, hedging relationships, and other transactions affected by reference rate reform if certain criteria are met. In response to the concerns about structural risks of interbank offered rates and, particularly, the risk of cessation of LIBOR, regulators in several jurisdictions around the world have undertaken reference rate reform initiatives to identify alternative reference rates that are more observable or transaction based and less susceptible to manipulation. The ASU provides companies with optional guidance to ease the potential accounting burden associated with transitioning away from reference rates that are expected to be discontinued. This guidance is effective immediately and the amendments may be applied |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies (Tables) | 3 Months Ended |
Apr. 01, 2023 | |
Accounting Policies [Abstract] | |
Schedule of Financial Assets and Liabilities Measured at Fair Value on a Recurring Basis | Financial assets and liabilities measured at fair value on a recurring basis as of April 1, 2023 and December 31, 2022 are summarized as follows: Items Measured at Fair Value at April 1, 2023 (in thousands) Level 1 Level 2 Total Mutual fund investments held in rabbi trust $ 577 $ — $ 577 Derivative assets, recorded in other assets — 2,116 2,116 Derivative liabilities, recorded in accrued expenses and other liabilities — 2,336 2,336 Items Measured at Fair Value at December 31, 2022 (in thousands) Level 1 Level 2 Total Mutual fund investments held in rabbi trust $ 758 $ — $ 758 Derivative assets, recorded in prepaid and other assets — 158 158 Derivative assets, recorded in other assets — 2,148 2,148 Derivative liabilities, recorded in accrued expenses and other liabilities — 5,005 5,005 |
Schedule of Carrying Values and Estimated Fair Value of Total Long-Term Debt | The carrying value and estimated fair value of total long-term debt were as follows: April 1, 2023 December 31, 2022 (in thousands) Carrying value Estimated fair value Carrying value Estimated fair value Long-term debt $ 2,891,763 $ 2,662,415 $ 2,784,175 $ 2,477,456 |
Schedule of Accumulated Other Comprehensive Income (Loss) |
Acquisitions and Dispositions (
Acquisitions and Dispositions (Tables) | 3 Months Ended |
Apr. 01, 2023 | |
Business Combination and Asset Acquisition [Abstract] | |
Schedule of Estimated Purchase Price Allocation | The provisional amounts for assets acquired and liabilities assumed for the 2023 acquisitions are as follows: Maintenance Segment (in thousands) Maintenance Assets: Operating lease right-of-use assets $ 658 Property and equipment, net 1,655 Goodwill 695 Assets acquired 3,008 Liabilities: Accrued Expenses and other liabilities 17 Operating lease liabilities 641 Total liabilities assumed 658 Cash consideration, net of cash acquired 2,255 Deferred consideration 95 Total consideration, net of cash acquired $ 2,350 Car Wash Segment (in thousands) Car Wash Assets: Property and equipment, net $ 8,270 Goodwill 2,724 Assets acquired 10,994 Total consideration, net of cash acquired $ 10,994 |
Deferred Consideration and Transaction Costs | Three Months Ended (in thousands) April 1, 2023 March 26, 2022 Deferred consideration at beginning of period $ 35,007 $ 16,000 Change in accrual 95 1,673 Payments (16,033) (3,056) Deferred consideration at end of period $ 19,069 $ 14,617 |
Segment Information (Tables)
Segment Information (Tables) | 3 Months Ended |
Apr. 01, 2023 | |
Segment Reporting [Abstract] | |
Schedule of Segment Results | Segment results for the three months ended April 1, 2023 and March 26, 2022 are as follows: Three months ended April 1, 2023 (in thousands) Maintenance Car Wash Paint, Platform Corporate Total Franchise royalties and fees $ 12,443 $ — $ 24,298 $ 6,774 $ — $ 43,515 Company-operated store sales 195,260 102,446 77,479 881 — 376,066 Independently-operated store sales — 52,532 — — — 52,532 Advertising fund contributions — — — — 21,677 21,677 Supply and other revenue 19,965 2,002 19,026 44,378 (16,694) 68,677 Total revenue $ 227,668 $ 156,980 $ 120,803 $ 52,033 $ 4,983 $ 562,467 Segment Adjusted EBITDA $ 72,986 $ 44,309 $ 35,712 $ 17,030 $ (41,184) $ 128,853 Three months ended March 26, 2022 (in thousands) Maintenance Car Wash Paint, Platform Corporate Total Franchise royalties and fees $ 9,635 $ — $ 21,365 $ 6,888 $ — $ 37,888 Company-operated store sales 156,828 94,495 39,916 1,152 — 292,391 Independently-operated store sales — 63,089 — — — 63,089 Advertising fund contributions — — — — 19,698 19,698 Supply and other revenue 12,279 1,691 18,080 35,126 (11,919) 55,257 Total revenue $ 178,742 $ 159,275 $ 79,361 $ 43,166 $ 7,779 $ 468,323 Segment Adjusted EBITDA $ 52,485 $ 55,720 $ 28,930 $ 14,165 $ (32,280) $ 119,020 |
Schedule of Reconciliation of Segment Adjusted EBITDA to Income Before Taxes | The reconciliations of Income before taxes to Segment Adjusted EBITDA for the three months ended April 1, 2023 and March 26, 2022 are as follows: Three months ended (in thousands) April 1, 2023 March 26, 2022 Income before taxes $ 40,720 $ 47,396 Depreciation and amortization 38,198 33,023 Interest expense, net 38,141 25,353 Acquisition related costs (a) 1,847 4,318 Non-core items and project costs, net (b) 1,824 866 Store opening costs 1,025 506 Straight-line rent adjustment (c) 4,365 4,093 Equity-based compensation expense (d) 2,564 2,618 Foreign currency transaction (gain) / loss, net (e) (1,675) 971 Asset sale leaseback loss (gain), impairment and closed store expenses (f) 1,844 (124) Segment Adjusted EBITDA $ 128,853 $ 119,020 (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. (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) Represents non-cash equity-based compensation expense. (e) 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. (f) Relates to (gains) losses, net on sale leasebacks, impairment of certain fixed assets and operating lease right-of-use assets related to closed locations, and lease exit costs and other costs associated with stores that were closed prior to the respective lease termination dates. |
Long-Term Debt (Tables)
Long-Term Debt (Tables) | 3 Months Ended |
Apr. 01, 2023 | |
Debt Disclosure [Abstract] | |
Schedule of Long-term Debt | The Company’s long-term debt obligations consist of the following: (in thousands) April 1, 2023 December 31, 2022 Series 2018-1 Securitization Senior Notes, Class A-2 $ 261,250 $ 261,938 Series 2019-1 Securitization Senior Notes, Class A-2 287,250 288,000 Series 2019-2 Securitization Senior Notes, Class A-2 265,375 266,063 Series 2020-1 Securitization Senior Notes, Class A-2 170,188 170,625 Series 2020-2 Securitization Senior Notes, Class A-2 439,875 441,000 Series 2021-1 Securitization Senior Notes, Class A-2 443,250 444,375 Series 2022-1 Securitization Senior Notes, Class A-2 363,175 364,088 Term Loan Facility 495,000 496,250 Revolving Credit Facility 115,000 — Other debt (a) 51,400 51,836 Total debt 2,891,763 2,784,175 Less: unamortized debt issuance costs (42,007) (45,908) Less: current portion of long-term debt (33,263) (32,986) Total long-term debt, net $ 2,816,493 $ 2,705,281 |
Leases (Tables)
Leases (Tables) | 3 Months Ended |
Apr. 01, 2023 | |
Leases [Abstract] | |
Schedule of Lease Cost and Supplemental Cash Flow Information | Supplemental cash flow information related to the Company’s lease arrangements for the three months ended April 1, 2023 and March 26, 2022, respectively, was as follows: Three Months Ended (in thousands) April 1, 2023 March 26, 2022 Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows used in operating leases $ 29,558 $ 28,073 Operating cash flows used in finance leases 475 370 Financing cash flows used in finance leases 529 414 |
Earnings per share (Tables)
Earnings per share (Tables) | 3 Months Ended |
Apr. 01, 2023 | |
Earnings Per Share [Abstract] | |
Schedule of Basic and Diluted Earnings Per Share Attributable to Common Shareholders | The following table sets forth the computation of basic and diluted earnings per share attributable to common shareholders: Three Months Ended (in thousands, except per share amounts) April 1, 2023 March 26, 2022 Basic earnings per share: Net income attributable to Driven Brands Holdings Inc. $ 29,749 34,443 Less: Net income attributable to participating securities, basic 626 735 Net income after participating securities, basic 29,123 33,708 Weighted-average common shares outstanding 162,784 162,762 Basic earnings per share $ 0.18 $ 0.21 Three Months Ended (in thousands, except per share amounts) April 1, 2023 March 26, 2022 Diluted earnings per share: Net income attributable to Driven Brands Holdings Inc. $ 29,749 $ 34,443 Less: Net income attributable to participating securities, diluted 559 657 Net income after participating securities, diluted $ 29,190 $ 33,786 Weighted-average common shares outstanding 162,784 162,762 Dilutive effect of share-based awards 4,090 3,986 Weighted-average common shares outstanding, as adjusted 166,874 166,748 Diluted earnings per share $ 0.17 $ 0.20 |
Schedule of Antidilutive Shares | The following securities were not included in the computation of diluted shares outstanding because the effect would be antidilutive: Three Months Ended Number of securities (in thousands) April 1, 2023 March 26, 2022 Restricted stock units 41 — Performance stock units — — Stock Options 2,003 — Total 2,044 — |
Description of Business (Detail
Description of Business (Details) $ in Thousands | Apr. 01, 2023 USD ($) franchise_location | Dec. 31, 2022 USD ($) | Jan. 14, 2021 |
Subsidiary, Sale of Stock [Line Items] | |||
Number of locations franchised, independently-operated, and company-operated | 4,800,000 | ||
Number of states in which entity operates | 49 | ||
Number of countries across Europe in which entity operates | 13 | ||
Percentage of locations franchised or independently operated | 0.75 | ||
Income tax receivable liability, current | $ | $ 53,554 | $ 53,328 | |
Income tax receivable liability, noncurrent | $ | $ 117,915 | $ 117,915 | |
Pre-IPO Stockholders | |||
Subsidiary, Sale of Stock [Line Items] | |||
Income taxes receivable (percent) | 0.85 |
Summary of Significant Accoun_4
Summary of Significant Accounting Policies - Schedule of Financial Assets and Liabilities Measured at Fair Value on a Recurring Basis (Details) - Fair Value, Recurring - USD ($) $ in Thousands | Apr. 01, 2023 | Dec. 31, 2022 |
Subsidiary, Sale of Stock [Line Items] | ||
Mutual fund investments held in rabbi trust | $ 577 | $ 758 |
Prepaid Expenses and Other Current Assets | ||
Subsidiary, Sale of Stock [Line Items] | ||
Derivative asset | 158 | |
Other Assets | ||
Subsidiary, Sale of Stock [Line Items] | ||
Derivative asset | 2,116 | 2,148 |
Other Noncurrent Liabilities | ||
Subsidiary, Sale of Stock [Line Items] | ||
Derivative liability | 2,336 | 5,005 |
Level 1 | ||
Subsidiary, Sale of Stock [Line Items] | ||
Mutual fund investments held in rabbi trust | 577 | 758 |
Level 1 | Prepaid Expenses and Other Current Assets | ||
Subsidiary, Sale of Stock [Line Items] | ||
Derivative asset | 0 | |
Level 1 | Other Assets | ||
Subsidiary, Sale of Stock [Line Items] | ||
Derivative asset | 0 | 0 |
Level 1 | Other Noncurrent Liabilities | ||
Subsidiary, Sale of Stock [Line Items] | ||
Derivative liability | 0 | 0 |
Level 2 | ||
Subsidiary, Sale of Stock [Line Items] | ||
Mutual fund investments held in rabbi trust | 0 | 0 |
Level 2 | Prepaid Expenses and Other Current Assets | ||
Subsidiary, Sale of Stock [Line Items] | ||
Derivative asset | 158 | |
Level 2 | Other Assets | ||
Subsidiary, Sale of Stock [Line Items] | ||
Derivative asset | 2,116 | 2,148 |
Level 2 | Other Noncurrent Liabilities | ||
Subsidiary, Sale of Stock [Line Items] | ||
Derivative liability | $ 2,336 | $ 5,005 |
Summary of Significant Accoun_5
Summary of Significant Accounting Policies - Schedule of Carrying Values and Estimated Fair Value of Total Long-Term Debt (Details) - USD ($) $ in Thousands | Apr. 01, 2023 | Dec. 31, 2022 |
Carrying value | ||
Subsidiary, Sale of Stock [Line Items] | ||
Long-term debt | $ 2,891,763 | $ 2,784,175 |
Estimated fair value | ||
Subsidiary, Sale of Stock [Line Items] | ||
Long-term debt | $ 2,662,415 | $ 2,477,456 |
Acquisitions and Dispositions -
Acquisitions and Dispositions - Narrative (Details) $ in Thousands | 3 Months Ended | |||
Mar. 16, 2022 USD ($) | Apr. 01, 2023 USD ($) maintenance_site acquisition car_wash_site | Mar. 26, 2022 USD ($) | Dec. 31, 2022 USD ($) | |
Business Acquisition [Line Items] | ||||
Cash used in business acquisitions, net of cash acquired | $ 29,307 | $ 224,526 | ||
Acquisition costs (less than) | 1,847 | 4,318 | ||
Consideration received | 17,000 | |||
Net loss on disposal (less than) | (3,000) | |||
Goodwill | $ 2,287,960 | $ 2,277,065 | ||
Minimum | ||||
Business Acquisition [Line Items] | ||||
Deferred consideration payment period | 6 months | |||
Maximum | ||||
Business Acquisition [Line Items] | ||||
Deferred consideration payment period | 1 year | |||
Disposal Group, Disposed of by Sale, Not Discontinued Operations | ||||
Business Acquisition [Line Items] | ||||
Ownership interest disposed of (as a percent) | 75% | |||
Consideration received | $ 2,000 | |||
Net loss on disposal (less than) | $ 1,000 | |||
Derecognized noncontrolling interest | $ 1,000 | |||
Goodwill | $ 1,000 | |||
2023 Acquisitions | Car Wash | ||||
Business Acquisition [Line Items] | ||||
Number of businesses acquired | acquisition | 1 | |||
Cash used in business acquisitions, net of cash acquired | $ 11,000 | |||
Number of car wash sites | car_wash_site | 1 | |||
2023 Acquisitions | Maintenance | ||||
Business Acquisition [Line Items] | ||||
Number of businesses acquired | acquisition | 2 | |||
Number of maintenance sites | maintenance_site | 2 | |||
Cash used in business acquisitions, net of cash acquired | $ 2,000 | |||
Business Acquisition | ||||
Business Acquisition [Line Items] | ||||
Acquisition costs (less than) | $ 1,000 | $ 2,000 |
Acquisitions and Dispositions_2
Acquisitions and Dispositions - Schedule of Estimated Purchase Price Allocation (Details) - USD ($) $ in Thousands | 3 Months Ended | ||
Apr. 01, 2023 | Mar. 26, 2022 | Dec. 31, 2022 | |
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Assets [Abstract] | |||
Goodwill | $ 2,287,960 | $ 2,277,065 | |
Liabilities: | |||
Cash used in business acquisitions, net of cash acquired | 29,307 | $ 224,526 | |
2023 Maintenance Acquisitions | |||
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Assets [Abstract] | |||
Operating lease right-of-use assets | 658 | ||
Property and equipment, net | 1,655 | ||
Goodwill | 695 | ||
Assets acquired | 3,008 | ||
Liabilities: | |||
Accrued Expenses and other liabilities | 17 | ||
Operating lease liabilities | 641 | ||
Total liabilities assumed | 658 | ||
Cash used in business acquisitions, net of cash acquired | 2,255 | ||
Deferred consideration | 95 | ||
Total consideration, net of cash acquired | 2,350 | ||
2023 Car Wash Acquisitions | |||
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Assets [Abstract] | |||
Property and equipment, net | 8,270 | ||
Goodwill | 2,724 | ||
Assets acquired | 10,994 | ||
Liabilities: | |||
Total consideration, net of cash acquired | $ 10,994 |
Acquisitions and Dispositions_3
Acquisitions and Dispositions - Deferred Consideration and Transaction Costs (Details) - 2022 Acquisitions - USD ($) $ in Thousands | 3 Months Ended | |
Apr. 01, 2023 | Mar. 26, 2022 | |
Deferred Consideration [Roll Forward] | ||
Deferred consideration at beginning of period | $ 35,007 | $ 16,000 |
Change in accrual | 95 | 1,673 |
Payments | (16,033) | (3,056) |
Deferred consideration at end of period | $ 19,069 | $ 14,617 |
Revenue from Contracts with C_2
Revenue from Contracts with Customers (Details) - USD ($) $ in Millions | 3 Months Ended | ||
Apr. 01, 2023 | Mar. 26, 2022 | Dec. 31, 2022 | |
Revenue from Contract with Customer [Abstract] | |||
Capitalized costs to obtain a contract | $ 7 | $ 7 | |
Contract assets | 1 | 1 | |
Contract liabilities | 30 | $ 29 | |
Revenue recognized (less than) | $ 1 | $ 1 |
Segment Information - Schedule
Segment Information - Schedule of Segment Results (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Apr. 01, 2023 | Mar. 26, 2022 | |
Segment Reporting Information [Line Items] | ||
Total revenue | $ 562,467 | $ 468,323 |
Segment Adjusted EBITDA | 128,853 | 119,020 |
Franchise royalties and fees | ||
Segment Reporting Information [Line Items] | ||
Total revenue | 43,515 | 37,888 |
Company-operated store sales | ||
Segment Reporting Information [Line Items] | ||
Total revenue | 376,066 | 292,391 |
Independently-operated store sales | ||
Segment Reporting Information [Line Items] | ||
Total revenue | 52,532 | 63,089 |
Advertising fund contributions | ||
Segment Reporting Information [Line Items] | ||
Total revenue | 21,677 | 19,698 |
Supply and other revenue | ||
Segment Reporting Information [Line Items] | ||
Total revenue | 68,677 | 55,257 |
Operating Segments | Maintenance | ||
Segment Reporting Information [Line Items] | ||
Total revenue | 227,668 | 178,742 |
Segment Adjusted EBITDA | 72,986 | 52,485 |
Operating Segments | Maintenance | Franchise royalties and fees | ||
Segment Reporting Information [Line Items] | ||
Total revenue | 12,443 | 9,635 |
Operating Segments | Maintenance | Company-operated store sales | ||
Segment Reporting Information [Line Items] | ||
Total revenue | 195,260 | 156,828 |
Operating Segments | Maintenance | Independently-operated store sales | ||
Segment Reporting Information [Line Items] | ||
Total revenue | 0 | 0 |
Operating Segments | Maintenance | Advertising fund contributions | ||
Segment Reporting Information [Line Items] | ||
Total revenue | 0 | 0 |
Operating Segments | Maintenance | Supply and other revenue | ||
Segment Reporting Information [Line Items] | ||
Total revenue | 19,965 | 12,279 |
Operating Segments | Car Wash | ||
Segment Reporting Information [Line Items] | ||
Total revenue | 156,980 | 159,275 |
Segment Adjusted EBITDA | 44,309 | 55,720 |
Operating Segments | Car Wash | Franchise royalties and fees | ||
Segment Reporting Information [Line Items] | ||
Total revenue | 0 | 0 |
Operating Segments | Car Wash | Company-operated store sales | ||
Segment Reporting Information [Line Items] | ||
Total revenue | 102,446 | 94,495 |
Operating Segments | Car Wash | Independently-operated store sales | ||
Segment Reporting Information [Line Items] | ||
Total revenue | 52,532 | 63,089 |
Operating Segments | Car Wash | Advertising fund contributions | ||
Segment Reporting Information [Line Items] | ||
Total revenue | 0 | 0 |
Operating Segments | Car Wash | Supply and other revenue | ||
Segment Reporting Information [Line Items] | ||
Total revenue | 2,002 | 1,691 |
Operating Segments | Paint, Collision & Glass | ||
Segment Reporting Information [Line Items] | ||
Total revenue | 120,803 | 79,361 |
Segment Adjusted EBITDA | 35,712 | 28,930 |
Operating Segments | Paint, Collision & Glass | Franchise royalties and fees | ||
Segment Reporting Information [Line Items] | ||
Total revenue | 24,298 | 21,365 |
Operating Segments | Paint, Collision & Glass | Company-operated store sales | ||
Segment Reporting Information [Line Items] | ||
Total revenue | 77,479 | 39,916 |
Operating Segments | Paint, Collision & Glass | Independently-operated store sales | ||
Segment Reporting Information [Line Items] | ||
Total revenue | 0 | 0 |
Operating Segments | Paint, Collision & Glass | Advertising fund contributions | ||
Segment Reporting Information [Line Items] | ||
Total revenue | 0 | 0 |
Operating Segments | Paint, Collision & Glass | Supply and other revenue | ||
Segment Reporting Information [Line Items] | ||
Total revenue | 19,026 | 18,080 |
Operating Segments | Platform Services | ||
Segment Reporting Information [Line Items] | ||
Total revenue | 52,033 | 43,166 |
Segment Adjusted EBITDA | 17,030 | 14,165 |
Operating Segments | Platform Services | Franchise royalties and fees | ||
Segment Reporting Information [Line Items] | ||
Total revenue | 6,774 | 6,888 |
Operating Segments | Platform Services | Company-operated store sales | ||
Segment Reporting Information [Line Items] | ||
Total revenue | 881 | 1,152 |
Operating Segments | Platform Services | Independently-operated store sales | ||
Segment Reporting Information [Line Items] | ||
Total revenue | 0 | 0 |
Operating Segments | Platform Services | Advertising fund contributions | ||
Segment Reporting Information [Line Items] | ||
Total revenue | 0 | 0 |
Operating Segments | Platform Services | Supply and other revenue | ||
Segment Reporting Information [Line Items] | ||
Total revenue | 44,378 | 35,126 |
Corporate and Other | ||
Segment Reporting Information [Line Items] | ||
Total revenue | 4,983 | 7,779 |
Segment Adjusted EBITDA | (41,184) | (32,280) |
Corporate and Other | Franchise royalties and fees | ||
Segment Reporting Information [Line Items] | ||
Total revenue | 0 | 0 |
Corporate and Other | Company-operated store sales | ||
Segment Reporting Information [Line Items] | ||
Total revenue | 0 | 0 |
Corporate and Other | Independently-operated store sales | ||
Segment Reporting Information [Line Items] | ||
Total revenue | 0 | 0 |
Corporate and Other | Advertising fund contributions | ||
Segment Reporting Information [Line Items] | ||
Total revenue | 21,677 | 19,698 |
Corporate and Other | Supply and other revenue | ||
Segment Reporting Information [Line Items] | ||
Total revenue | $ (16,694) | $ (11,919) |
Segment Information - Reconcili
Segment Information - Reconciliation of Segment Adjusted EBITDA to Income Before Taxes (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Apr. 01, 2023 | Mar. 26, 2022 | |
Segment Reporting Information [Line Items] | ||
Income before taxes | $ 40,720 | $ 47,396 |
Depreciation and amortization | 38,198 | 33,023 |
Interest expense, net | 38,141 | 25,353 |
Acquisition related costs | 1,847 | 4,318 |
Store opening costs | 1,025 | 506 |
Straight-line rent adjustments | 4,365 | 4,093 |
Segment Adjusted EBITDA | 128,853 | 119,020 |
Segment Reconciling Items | ||
Segment Reporting Information [Line Items] | ||
Acquisition related costs | 1,847 | 4,318 |
Non-core items and project costs, net | 1,824 | 866 |
Equity-based compensation expense | 2,564 | 2,618 |
Foreign currency transaction (gain) / loss, net | (1,675) | 971 |
Asset sale leaseback loss (gain), impairment and closed store expenses | 1,844 | (124) |
Segment Adjusted EBITDA | $ 128,853 | $ 119,020 |
Long-Term Debt - Schedule of Lo
Long-Term Debt - Schedule of Long-term Debt (Details) - USD ($) $ in Thousands | Apr. 01, 2023 | Dec. 31, 2022 |
Debt Instrument [Line Items] | ||
Total debt | $ 2,891,763 | $ 2,784,175 |
Less: unamortized debt issuance costs | (42,007) | (45,908) |
Less: current portion of long-term debt | (33,263) | (32,986) |
Total long-term debt, net | 2,816,493 | 2,705,281 |
Senior notes | Series 2018-1 Securitization Senior Notes, Class A-2 | ||
Debt Instrument [Line Items] | ||
Total debt | 261,250 | 261,938 |
Senior notes | Series 2019-1 Securitization Senior Notes, Class A-2 | ||
Debt Instrument [Line Items] | ||
Total debt | 287,250 | 288,000 |
Senior notes | Series 2019-2 Securitization Senior Notes, Class A-2 | ||
Debt Instrument [Line Items] | ||
Total debt | 265,375 | 266,063 |
Senior notes | Series 2020-1 Securitization Senior Notes, Class A-2 | ||
Debt Instrument [Line Items] | ||
Total debt | 170,188 | 170,625 |
Senior notes | Series 2020-2 Securitization Senior Notes, Class A-2 | ||
Debt Instrument [Line Items] | ||
Total debt | 439,875 | 441,000 |
Senior notes | Series 2021-1 Securitization Senior Notes, Class A-2 | ||
Debt Instrument [Line Items] | ||
Total debt | 443,250 | 444,375 |
Senior notes | Series 2022-1 Securitization Senior Notes, Class A-2 | ||
Debt Instrument [Line Items] | ||
Total debt | 363,175 | 364,088 |
Term Loan Facility | ||
Debt Instrument [Line Items] | ||
Total debt | 495,000 | 496,250 |
Revolving Credit Facility | Revolving Credit Facility | ||
Debt Instrument [Line Items] | ||
Total debt | 115,000 | 0 |
Other debt | ||
Debt Instrument [Line Items] | ||
Total debt | $ 51,400 | $ 51,836 |
Long-Term Debt - Narrative (Det
Long-Term Debt - Narrative (Details) | 1 Months Ended | 3 Months Ended | |||
May 31, 2021 USD ($) | Dec. 31, 2019 USD ($) extension_option | Apr. 01, 2023 USD ($) | Mar. 26, 2022 USD ($) | Dec. 31, 2022 USD ($) | |
Debt Instrument [Line Items] | |||||
Debt outstanding | $ 2,891,763,000 | $ 2,784,175,000 | |||
Proceeds from revolving lines of credit and short-term debt | 140,000,000 | $ 0 | |||
Repayments of revolving lines of credit and short-term debt | (25,000,000) | $ 0 | |||
Revolving Credit Facility | Revolving Credit Facility | |||||
Debt Instrument [Line Items] | |||||
Debt outstanding | 115,000,000 | $ 0 | |||
Revolving Credit Facility | Series 2019-3 Variable Funding Senior Notes, Class A-1 | |||||
Debt Instrument [Line Items] | |||||
Aggregate principal amount | $ 115,000,000 | ||||
Number of extension options | extension_option | 3 | ||||
Extension period | 1 year | ||||
Outstanding debt | 0 | ||||
Borrowings or repayments of debt | 0 | ||||
Outstanding letters of credit | $ 25,000,000 | ||||
Revolving Credit Facility | Driven Holdings Revolving Credit Facility | |||||
Debt Instrument [Line Items] | |||||
Aggregate principal amount | $ 300,000,000 | ||||
Revolving Credit Facility | Driven Holdings Revolving Credit Facility | Revolving Credit Facility | London Interbank Offered Rate (LIBOR) | |||||
Debt Instrument [Line Items] | |||||
Margin rate | 1% | ||||
Revolving Credit Facility | Driven Holdings Revolving Credit Facility | Revolving Credit Facility | London Interbank Offered Rate (LIBOR) | Euro Currencies | |||||
Debt Instrument [Line Items] | |||||
Margin rate | 1.50% | ||||
Revolving Credit Facility | Driven Holdings Revolving Credit Facility | Revolving Credit Facility | London Interbank Offered Rate (LIBOR) | Maximum | |||||
Debt Instrument [Line Items] | |||||
Margin rate | 0.75% | ||||
Revolving Credit Facility | Driven Holdings Revolving Credit Facility | Revolving Credit Facility | London Interbank Offered Rate (LIBOR) | Maximum | Euro Currencies | |||||
Debt Instrument [Line Items] | |||||
Margin rate | 1.75% | ||||
Revolving Credit Facility | Driven Holdings Revolving Credit Facility | Revolving Credit Facility | Federal Funds Rate | |||||
Debt Instrument [Line Items] | |||||
Margin rate | 0.50% |
Leases - Narrative (Details)
Leases - Narrative (Details) $ in Thousands | 3 Months Ended | ||||
Apr. 01, 2023 USD ($) | Apr. 01, 2023 USD ($) | Apr. 01, 2023 maintenance_site | Apr. 01, 2023 car_wash_site | Dec. 31, 2022 USD ($) | |
Lessee, Lease, Description [Line Items] | |||||
Number cash wash properties sold | 1 | 5 | |||
Total consideration | $ 17,000 | ||||
Net gain on sale | $ 3,000 | ||||
Operating lease right-of-use assets | 1,312,568 | $ 1,299,189 | |||
March 2021 Operating Lease Agreements | |||||
Lessee, Lease, Description [Line Items] | |||||
Operating lease right-of-use assets | 10,000 | ||||
Operating lease liability | $ 10,000 | ||||
Maximum | March 2021 Operating Lease Agreements | |||||
Lessee, Lease, Description [Line Items] | |||||
Lease term | 20 years |
Leases - Cash Flows Related to
Leases - Cash Flows Related to Lease Arrangements (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Apr. 01, 2023 | Mar. 26, 2022 | |
Cash paid for amounts included in the measurement of lease liabilities: | ||
Operating cash flows used in operating leases | $ 29,558 | $ 28,073 |
Operating cash flows used in finance leases | 475 | 370 |
Financing cash flows used in finance leases | $ 529 | $ 414 |
Equity-based Compensation (Deta
Equity-based Compensation (Details) $ in Thousands | 3 Months Ended | ||
Apr. 01, 2023 USD ($) franchise_location shares | Sep. 24, 2022 | Mar. 26, 2022 USD ($) | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Equity-based compensation expense | $ 2,564 | $ 2,618 | |
Restricted stock units | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Number of granted new awards (in shares) | shares | 312,617 | ||
Grant-date fair value of PSUs granted | $ 9,000 | ||
Performance stock units | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Number of granted new awards (in shares) | shares | 575,267 | ||
Number of vesting installments | franchise_location | 3 | ||
Award vesting period | 3 years | ||
Expected term | 2 years 9 months 18 days | 3 years | |
Expected volatility rate | 38.80% | 40.90% | |
Risk-free interest rate | 60.20% | 50.70% | |
Performance stock units | Minimum | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Award vesting rights percentage | 0% | ||
Performance stock units | Maximum | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Award vesting rights percentage | 200% | ||
Restricted stock award, performance based PSUs | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Grant-date fair value of PSUs granted | $ 10,000 | ||
Restricted stock award, market-based PSUs | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Grant-date fair value of PSUs granted | $ 8,000 |
Earnings per share - Schedule o
Earnings per share - Schedule of Basic and Diluted Loss Per Share (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | |
Apr. 01, 2023 | Mar. 26, 2022 | |
Basic earnings per share: | ||
Net income attributable to Driven Brands Holdings Inc. | $ 29,749 | $ 34,443 |
Less: Net income attributable to participating securities, basic | 626 | 735 |
Net income after participating securities, basic | $ 29,123 | $ 33,708 |
Weighted-average common shares outstanding (in shares) | 162,784 | 162,762 |
Basic earnings per share (in dollars per share) | $ 0.18 | $ 0.21 |
Diluted earnings per share: | ||
Less: Net income attributable to participating securities, diluted | $ 559 | $ 657 |
Net income after participating securities, diluted | $ 29,190 | $ 33,786 |
Dilutive effect of share-based awards (in shares) | 4,090 | 3,986 |
Weighted-average common shares outstanding, as adjusted (in shares) | 166,874 | 166,748 |
Diluted earnings per share (in dollars per share) | $ 0.17 | $ 0.20 |
Earnings per share - Narrative
Earnings per share - Narrative (Details) | 3 Months Ended |
Apr. 01, 2023 shares | |
Earnings Per Share [Abstract] | |
Performance awards contingent on performance conditions which have not been met yet (in shares) | 5,351,252 |
Earnings per share - Schedule_2
Earnings per share - Schedule of Antidilutive Shares (Details) - shares shares in Thousands | 3 Months Ended | |
Apr. 01, 2023 | Mar. 26, 2022 | |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Antidilutive securities (in shares) | 2,044 | 0 |
Restricted stock units | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Antidilutive securities (in shares) | 41 | 0 |
Performance stock units | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Antidilutive securities (in shares) | 0 | 0 |
Stock Options | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Antidilutive securities (in shares) | 2,003 | 0 |
Income Taxes (Details)
Income Taxes (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Apr. 01, 2023 | Mar. 26, 2022 | |
Income Tax Disclosure [Abstract] | ||
Income tax expense | $ 10,971 | $ 12,968 |
Effective income tax rate | 26.90% | 27.40% |