DRVN - Earnings call transcript Q2 2024 | Driven Brands Holdings Inc.

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Operator

Good morning, ladies and gentlemen, and welcome to the Driven Brands, Inc. Q2 '24 Earnings Call. [Operator Instructions] This call is being recorded on August 1, 2024. I would now like to turn the conference over to Mr. Chris Thompson, Senior Director of Treasury and Investor Relations. ahead. go Please

Unknown Executive

investors.drivenbrands.com. welcome Conference and ratio Brands Quarter website Second are Good The to earnings Earnings at our on Call. for leverage release XXXX available morning, download Driven and reconciliation the

through and will On the call and financial and quarter. Officer. a me our Chief today Joel President Jonathan, walk Arnao, Rivera, Vice and Operating President moment, Chief and Financial performance Fitzpatrick, Executive Interim operating are Daniel Chief for Executive Jonathan with you President Joel Officer; Senior Danny and Vice Officer. In the

you our management financial Before I'd we begin remarks, refer like non-GAAP to certain remind that to will measures.

can company's Securities Commission. You comparable the Investor directly Relations most website and Exchange its to the the find and the with on GAAP financial measures in reconciliations filings

events remarks by also up a and results of statements and Exchange of and to and results expectations. limit to the question question-and-answer risks X course for We X and this forward-looking and see Today's our could filings cause contemplated release follow-up. followed differ to current guarantees may from and not are other these with uncertainties performance are actual events and we Securities call, of Please forward-looking plans, Commission to information. ask you more make our our the will materially be earnings prepared statements. future and subject These session. beliefs factors by regards that in yourself number During a to statements

Jonathan. Now I'll turn over to it

Jonathan Fitzpatrick

delighted dynamic to how as announce our CFO. amazing and To acknowledge driven our to Driven financial national appreciate macroeconomic XX,XXX our today discuss second Brands' I'm that quarter the strong begin, and joining search, more an by extremely want results. members Brands for us than I they We morning. execution Diamond Mike joined a very thorough Driven has to everyone environment. After hard team continue franchisees work navigate Good XXXX to

excess some less start delivering it portfolio Danny of down free initiatives will segments on year-end debt levered businesses quarter finally, most in our background The to today. pay Companies. couple super is target join CFO target be highlights terrific was and year-end to a here our in job start to financial second will Mike and than multiunit Mike's results of operating this our a of XXXX to Xx. We're our then focus and And second has of of terrific And cash and discuss for and our thank then with read earnings he release. over past using management. review our Finance, me at full moment I also a over less corporate a recently quarter with active turn flow and recognize Senior XXXX, with to year of who want about outlook outlook. has him in Mike have done Arnao, a officially Although such can Joel My weeks, you Michaels Vice the CFO than take team. I as and XXXX X.Xx Joel, excited President who to a quarter. continues detail who and will will Interim a background

consecutive versus X.X% adjusted growth same-store For $XXX and the revenue sales growth, same-store and of XXXX, up by $XXX.X stores sales of in resulting adjusted million, EPS new of million quarter of XXX QX delivered X% EBITDA XXth year, we net $X.XX. positive prior diluted supported our

Driven worth same-store performance a X solid of our the delivered and X-year on noting XXXX. And sales to businesses, X.X% being continue Take be oil pleased all basis, franchise QX change a is key contributors We by to it growth. that

Change, comp which and segment, of biggest our delivered fastest-growing X-year that and XX.X%. of comp a of X a than Oil X-year XX% PC comp delivered business Take more represents G XX.X%. Our And

continue call, consumer QX mentioned inflationary be earnings on that we of the that the into likely impacted will We environment I in ongoing and households that saw it QX taking most spending believe pressure updated impacted. results, XXXX we throughout expectations. our will our and to are still lower-income account As the balance this

that few start now like be to provide of migration details on our uncertainty. began Now our outlook this XXXX XXXX platform remain corporate we at ongoing our new more a consumer believe the despite in QX. somewhat minutes key businesses. pressure some on to on I'd business Joel strength offset by commercial outlook delivering the We our shortly. spend initiatives. We needs-based ERP this and will our will focused

an pipeline far, so QX, and work to In a Information million QX, of Karen of received by total the million entire the hard testament a million U.S. approximately $XXX on million. we proceeds. to The carwash of we're incremental our Year-to-date, divesting implementation. pleased approximately progress $XX extensive team the in Chief approximate is Officer, are properties. at the we continuing led with progress make we received And $XXX from Conrad. team, is of And now good preparation for This proceeds. $XX

was million Our previous least at for $XXX fiscal target XXXX.

wash Now that half of achieved U.S. we're at that, divestitures delivering another in least the $XX in million XXXX. we've confident car in second

mentioned, of previously my reducing leverage our X I primary is overall As objectives.

less at is year the goal to than finish X.Xx. Our

which and we essentially leverage QX, of less our by $XXX we were from WBS XXXX. I'm to $XXX million coming neutral. focus down saw X-year reduction in remain paying the towards debt XXXX levered that QX due our of issuing report to than on by Xx of XXXX to goal notes we pleased on target we'll new target a moderate continue end year-end to by long-term achieve successfully April notes, While refinanced million

notes XXXX. variable our increased million from $XXX which of notes also We funding addition replaced liquidity through our $XXX million of funding variable the

fully Our variable remain undrawn. funding notes

average due QX a of years. Our stack no coming and with WBS notes There of comprised X.X of weighted debt maturity is rate XXXX. fixed until are blended X.X% XX% approximately a maturities

few very XXXX positive QX on Take spend Now continued by marks growth Driven by grew minutes same-store change, the our sales Advantage. XXth Glass X results. me EBITDA to X Revenue 'XX. quarter growth. and compared XX% strong of consecutive priorities. Take and Auto to grew XX% a let QX Now oil deliver

Promoter seen of units grew while in approximately of executing efficiency unit and year-to-date, the has Take X Mocal Additionally, change points team franchises. are new X customers majority satisfied XXX and oil manifested Net [ operational playbook on strong margins Score over Take basis team adding robust growth, XX asset-light a focused sales the by our XX%. ] which QX. to The drive remains maintaining

additional count end of second half. locations over the franchisees approximately of anticipate are the almost quarter, time. and we Take period, XX% for a total XX% add stores At to expect Over stores our also to XXX account doubled, store has franchised. in franchise of X-year the We X approximately

to existing new new drive our and to Our attract agreements. unit franchisees development economics franchisees continue sign

Now looking last X at change. quarters the for oil X Take

a net franchise Some of KPIs unit combined include company revenue for X-year on XX.X%, growth XX.X% a growth XX.X%, XX.X% growth XX.X%. of growth measured unit of and of unit system-wide of CAGR sales growth

across performance strong very summary, metrics. all In

longer-term can to will time, take because do we and want prospects our of it time we to about medium Now and take that for importance and to of Now, business build excited commercial sustainable Auto Glass long-term Earning scale it momentum. remain the U.S. and switching business, the right business know insurance glass partnerships. this and

revenue business. for insurance commercial over than X/X And retail we AGN faster our grow blended the and X/X and has X/X expect Now approximately revenue insurance. retail, to time, commercial

These customers. retail of our with pay an are start let's with check average So typically $XXX. out-of-pocket approximately

we very revenue, early retail estimator we shops rates. online to and adoption with in the allowing Now avoid customers rolled quotes, additional to in the to out QX. order pleased We late capture the coming for are

Next, approximately seeing of managers of The and fleets customers car average $XXX contracts attachment who XX%. We're with that have in major check rate to signed half a commercial QX our volume start approximately materialize we'll the pleased of are large X rental of XXXX. companies second vehicles. national with calibration in and is owners

calibration regional this rate will flowing have XXXX. of approximately that finalized half in our insurance I'm agreements and check $XXX in partners report pleased of XX%. volume of also and we attachment start new X average second customers the with to QX, Finally, approximately an

in increasing will over medium- presenting We growing regional national and currently opportunities. and are carriers momentum carriers to long-term of the The RFPs. it and business. with build as also multiple pipeline multiple have and several I a times quarters, time this take build to mentioned And continue interest have past

more this optimistic franchisees already have very future affiliates remain is the its SKUs XXXX, eligible to begun partners, paint, our services we vendor about and can approximately XX,XXX of company QX marketplace XX% products than from purchase stores, where launch in platform. category. Driven oil nascent XX our online the Since over However, and from of locations ranging supplies equipment. purchasing office on and Advantage

contribution revenue in half new revenue include: added our from almost benefits Driven of of in show and entirely the the X,XXX While sales are $XXX million, further were the the from XXXX advertising partners. capabilities up our first of first up to and We $XX XXXX majority Advantage highlights operating in of approximately some now XXXX, like from half customers XXXX. promotions reordering, increase vendor launched our first segments, automatic we've of vendor first from half half the from million franchisees and in affiliates. Sales generating up

the growing on platform. a Advantage companies benefits sell see from to industry stores, This as our interest the Driven driven. use Advantage see partners Both their that platform also created powerful looking automotive suppliers from third a we own locations. Driven is franchisees, that to vendor parties company uniquely and have more and We other automotive looking in at

outlook actively is in Now on again, and my XXXX, managing reducing debt the portfolio. our delivering focus

a our reinvestment over generates a to time. for mirror incredibly returns high motivated have valuation returns with We we're that runway see and steady-state platform at our attractive long results

over our to me Danny, our partner, my Operating it segments. let discuss key Now hand to business Officer, Chief

Daniel Rivera

Jonathan. Thanks,

franchisees Before for deliver leaders. shareholders results, to acknowledge brand and Dream I diving our to our want continue and driven who and Big employees our embody model Hard our results of our work into

the for While certain continues X,XXX our legacy restating delight our trajectory X our EBITDA more consistent on against driven Take continue by now advantage strategically franchise ground of begin worked customers. I'd the and the like employees success Auto car growth our unchanged. deliver the that improve by boots , tirelessly margins at to ultimately that excess Insure position team U.S. brands at my is to of to than driven produce XX%. to [indiscernible] remain for generate here who our grow wash to Glass that driven business, continues make and to in growth, XXXX works priorities defined franchisees future locations

of streak the adjusted happy and of the results our to revenue EBITDA adjusted major growth delivered. Turning sales. to XX We is adjusted X margin in positive quarters driver QX. revenue, with continues I achieved against straight EBITDA of team our Take same-store growth and QX our year-over-year the our while and EBITDA results. am deliver in continuing expectations

Our and also remains business with steady BXB insurance channel and commercial consistent, partners. our strong from predictable

of come As a from commercial system-wide XX% customers. reminder, BXB about sales our

business U.S. yet on and right steadily Both quarters. businesses revenue X Now our all Glass Car Auto While the direction. firing and Wash for the in the cylinders, businesses are in saw adjusted are EBITDA past not moving fully growth sequential

to legacy Our drive and X-XXX-Radiator, continue excess MAACO, adjusted like of steadily in XX%. EBITDA brands margins CARSTAR perform franchise and Meineke, all

XX continues had our segment EBITDA to adjusted Take and the In XX.X% the the system-wide between revenue, in strength segment, EBITDA increase margin XX split driven which increase Take XXX prior oil year-over-year margin. units X by now franchise. a EBITDA adjusted increases to quarter, adjusted basis achieved X a sales, Maintenance and be while expanded Performance revenue in our points. In QX and change. in year, company-owned opened XX.X% EBITDA, and sequential in Maintenance of adjusted XX we Turning versus

Take grown of each XXX have years. for for Over and about XX% openings units by our X past on we months, target the of year remain the XX track the X number next

premium in stack and XXs. deliver low-pressure Mo of to in year-over-year sales President of through we Khalid, This see and X-year of ticket mix in selling the premium while sales continued financial customers attachment record X.X%, we resulting to a positive a continue Additionally, growth results business in NPS same-store simultaneously achieved scores Take same-store achieved to continues oil upper natural XX.X%. X quarter, delighting ancillary our environment. In the and grow strong rates. team growth with our the sales

of X.X%. represent were revenue and down same-store Looking $XX to EBITDA our margin adjusted adjusted PC&G delievered quarter. QX of EBITDA segment, of $XXX sequential versus all XX.X%, sales the of million, improvements prior million QX which

and a strong caused consistent is However, XXXX sales grew The X-year XX.X%, refranchising execution. of over our company-owned softness that to and disproportionately is by XX comping record quarter stack revenue hailstorms due locations same-store mostly business. in demonstrating in our the

glass Auto to our Glass business. over Moving North American Now, company-owned

year-over-year multiyear sequentially strategy grew as EBITDA Glass care Macaluso, segment, previously the added X while said, team as good national increased while progress the rental Now with EBITDA Auto we business Michael We we've of resources being insurance bullish delivering. Shifting and As and continues As growth QX, X.X% adjusted margin is building. also are to Platform stated, the happy XX.X%, segment providers. team and Now QX, our respectively. we continue the deliver Services about carriers portfolio I'm and on momentum journey. and is X signing feel and growth and Auto this remain to In revenue to meaningful this a partners. with seeing as signing focus car and a industry our improvements well adjusted on expansion, to commercial revenue In Glass agreements sequential That major part momentum

EBITDA adjusted points XXX margins While increased to XX.X%. basis

Driven mentioned, procurement in-house our well. grow to Jonathan as platform As continues Advantage,

total saw thanks Kyle XX%. XX% franchisees for of using of which in continued performance. continued adoption $XX through his all growth This is sequential approximately a and sales This to driven by our the from million of growth expansion and franchisees of Many quarter, Marshall platform, go the represents offerings eligible the strong platform. team the with our we

to like discuss Lastly, Car I segment. Wash would our

adjusted around see and to progress and work respectively. to XX.X%, and by sequentially quarter, the to continue segment hard we momentum. revenue In turn X.X% this EBITDA continue and grew We

to our also with business, the QX heavy focus experiencing continued of XXX Car on our for able While We headwinds rain. growing basis presented headwinds, margins these adjusted of EBITDA calendar Wash by some days points. XX% were U.S. particularly some the membership. quarter strong overcome with in

our I've we've As extremely and XXX,XXX rate remain added focused Austin Tim conversion and growing of our mentioned Wash the customers team our throughout nearly we've improvement on significant members have Year-to-date, members. seen and retail new before, U.S. year. to Car business, over membership tripled

it a hard thank generate that, Joel. results. continues and to our Auto franchisees XXXX plans, Change Glass deliver board. international our U.S. to Wash to continued like made legacy Tracey margin am once expansion partner, and together Car Driven business, franchise to track continues Wash employees Now solid to sequential Gellin the the will growth sales, grow in the results and and that I show our we thousands in businesses this delivered by delivered cash. Our EBITDA We When revenue, strong worked that Take quarter softer Oil I'd sequential it of the and to margins. priorities continue grow continues considering put another strong exceptional momentum with again pleased Overall, quarter. With financial environment. to turn consumer particularly progress to led with to year-over-year on my I over predictably deliver Car business Advantage to EBITDA same-store and is EBITDA across quarter, deliver comes X

Joel Arnao

quarter. Danny, I'd accomplished extremely everyone. Jonathan, Danny what Driven support to have for thanking the entire good their am we past and the start I to X Thanks, this months. team. been Brands Driven and the proud It's like morning, an by finance Brands lead opportunity of incredible team

confident XXXX had a I've forward that the results good several strong addition, working with I In to looking meet he the team. deliver with times, addition and opportunity be to I'm Mike beyond. him and to in to am will

second sales. our quarter basis, the discuss we delivered a of results On XXth year same-store to quarter straight before will I positive full First, consolidated on moving outlook.

XX quarter driven $X.X to in same-store store This increased is a reached $XXX.X sales previous representing maintenance. Total improvement basis to million. to increased growth increase X.X% year. EBITDA by margin X.X% Adjusted X% from and net system-wide the primarily increase EBITDA the margin driven Our Adjusted points X.X% revenue a growth. billion, XX.X%, in sales X% increased million. by $XXX.X for

to Take by sales increase segment, X.X% Now at segments. a growth, our oil XX EBITDA increased new of XX.X% to openings In chain X, $XXX.X oil same-store including segment million. Maintenance disciplined with Adjusted quarter led will sales discuss year-over-year performance premium stores versus operational The coupled stores. in improvements during attachment sales rates. the in EBITDA by adjusted and XX of franchise continued increase quarter sales underscored mix company-owned a with Car XX to sales million, our driven inclement our improvement store added Take Car second $XXX X in execution, record same-store X margin in System-wide segment, business. same-store our in of approximately change. In softness XXXX. expanded U.S. were basis to driven Wash XX%, primarily weather I net declined due by Wash XX% and the XX.X% each points Take X.X% We XXX oil XXX X.X% and sales retail Maintenance new to

For the adjusted $XXX.X quarter, and EBITDA were was $XX.X million. sales million

Although Wash the revenue our strategy. trends new XXXX sequentially pricing was our saw operations. adjusted EBITDA to decrease improve U.S. QX Car We by due driven versus and in comp membership quarter-over-quarter

These sales The decrease million, and segment XX.X% results our EBITDA adjusted factors: The was X.X% Revenue As primarily which lapping impacted EBITDA were industry million approximately in million, count XX.X%, XXX $XX.X revenue X.X% by and points and by which was EBITDA million. In locations year company-owned segment, main X.X%. was cost million. a were Danny XXX,XXX sales year-to-date, declined improved period. X and additionally mentioned decrease to Same-store of by membership and XX adjusted the by adjusted segment, by driven $XXX.X to collision prior grew variable new XX.X% a sales in $XX.X million system-wide earlier, of our PC&G lowered margin was In the revenue over our Adjusted versus basis Services $XXX XX.X%, approximately to Platform of decrease refranchising $X $XX.X was sales driven XXXX QX for decrease due increased XXXX softness. same-store respectively. million, members. grew to EBITDA $XX hailstorms our management. increased by business.

components we of million, EBITDA. facility. securitization, year to total are notes under $X.XX, interest up versus strong second I receivable these we the our improved reduction. At U.S. due note liquidity, senior funding assets offering XXXX. an of XXXX million quarter $XX $XXX closed versus to million the $XX Along comprised Class capacity below and debt million conjunction tax the $XXX our interest with we a year resulting for reduction Depreciation in over the $XX growth net On our increased onetime notes adjusted million an to had in Series the with notes. In million for $XXX million. to in expenses Now our $XXX undrawn in of adjusted senior AX and Net variable sale. Interest refinance focus to XXXX-X of was quarter, $XX.X revolving reflecting continued decrease quarter million rates on $XXX for held in and our end $X both funding car we for will key the Series Monday, of $XX.X equivalents. wash cash as Class notes, credit cash liability amortization in in million quarter, second senior prior declined AX from EBITDA a variable due prior quarter, capacity totaled the income and expense estimated the deposits. primarily disposed cash on on was our income for Adjusted agreement EPS QX diluted million million

securitization progress Throughout of of maturities continued maturity stack XX% is our a until the no XXXX. credit years. down approximately blended rate facilities. with average are reminder, to and of There business meaningful X.X fixed a whole we make our As paying X.X% coming quarter, notes due QX comprised a debt weighted

drawn In interest we balance term our addition to higher a debt. to $XX $XX to principal our rate to prepayment million revolver loan million make chose reduction in balance, reduce a our

able million intra-quarter prepayments to make our on there. loan expect ratio second July, of the we we $XX another half and paid million But haven't to balance to our we're from principal and in the end the focus the in down prior our revolver In principal quarter, the we loan of As our QX. net leverage term across optional net of as $XX improved QX, of below leverage year peak build X.Xx. At quarter. sequentially our term of on momentum from this getting stopped

the 'XX, As to in net We X.Xx X.Xx, the throughout was QX million. of Xx quarter, assets of adjusted we of from year, Car leverage to of second the pipeline growth continue for to thanks our the from QX Wash organic U.S. generated through sale our cash end QX at down from held flow EBITDA XXXX. proceeds and and to sale, improve $XXX plan $XX bringing deliver sites. In total million

$XXX we in have sold XXXX. assets and As million sale in sell Jonathan held to additional expect mentioned, year-to-date, million $XX an for

Now a I'm system July. I provide brief on to went live in implementation. ERP that share happy update will ERP our our new

We we'll to onto brands the incremental system. approach implementation, are shift an and the continue new taking to our

our full to primarily collision Wash from and like Now the would same-store Car growth update for U.S. year our are adjusting to the continued we macroeconomic outlook X%. on in to X% softness trends uncertainty, year X% outlook, to business, X% sales I industry based

of the original segments to $X.XX EBITDA first billion our Platform in to XXXX. expect half outlook We and through growth at lower Services $X.XX of also of revenue end drove the come adjusted Maintenance billion.

in in expect to half XXXX, moderate other trends back the We our these segments. of continue improvement along with

adjusted $XXX we the in expect mid- original now million end to year, million. of EBITDA to full $XXX the to the come at of upper For range

at our adjusted to end the come in expect We original higher to of $X.XX diluted range of $X. EPS

XXX stores to the our reaffirming approximately growth outlook net during are of store of We original year. XXX

amortization to million. and $XXX expenses approximately $XXX interest approximately of million expect of depreciation continue and expenses We

XXXX, with is be Our effective XX% our line to tax which in rate. approximately effective XXXX tax rate is in expected

approximately to million. $XX net approximately to be continue investments million full This $XXX CapEx capital year, $XXX in of leasebacks. expect million gross We of approximately with resulted for sale the

generating Jonathan before, of free as we on debt. the focused are mentioned flow and rest cash For year, reducing the

be X.Xx to to expect leverage continue net We by year-end. below

third Now I to color the would more on like provide quarter.

third the year-over-year our single growth digits revenue be double digits. low to and to low expect quarter We EBITDA adjusted growth in the our be in

Now over I to the back it will operator. turn

Operator

from question Our first Instructions] Gutman Stanley. from [Operator Simeon is Morgan

Simeon Gutman

to with your Curious wanted and going it's winding forward. a EBITDA. of thoughts long what wonder strategic It's to bit. I ask Wash, are. been XX% overall road. XX% the Car like is I portfolio EBITDA start growth XX-ish, and about stabilizing seems it's a how and it to It

Jonathan Fitzpatrick

Simeon, Jonathan here. Good question.

see I think a pleased couple growth and Day capital asset incremental of the the things. Tim of One that we're President position is that of the within our portfolio. I'm evaluating in the progress sustainability not -- that business, from deploying mentioned into are still we're carwash wash that sequential the and long-term business. growth. sort we're with retaining to process done Danny our we stabilizing of starting Investor in the that also very I've car Austin, that have

the that a of terms make that we're in and But again, in pleased the made Tim stabilization yet in to willing business XXXX. with publicly. there not Danny decision we're are We have

Simeon Gutman

positively. Okay. X are that. The I And on switching maybe I to commentary guess, drive margins to what's the then parts. exploding helping maintenance, missed And

it slowed the what While may cetera? have X up chalked bit was I weather, maybe commentary, was culprit, little some Take a et but like the again. looks sequentially temporal missed

Jonathan Fitzpatrick

expansion. Look, X Take think Yes. And margin the doing team on job I an [indiscernible] are exceptional

franchise de business leverage, very that, which don't confident Take accretive. well, any terms mix, your operational still premium there's margin rates, of is sales, around great QX the driving stores really change to to a We in Simeon. obviously change. are in efficiency, trajectory that for are all things the outlook multiple in year attachment oil joining there's move. We've oil sequential continuing obviously comment see helps which is just as mix drive One QX minimis full got think and same-store X I more

Operator

will Justin coming from be Kleber question from Next Baird.

Justin Kleber

you be subscription is was Have and view -- line actions? X talked with strategy, with gap dropped last chain car first a single test to you're wash. time it competitive operating to you sustainable? between across term, price longer the from if would quarter And pricing in the response just wash that a and about Curious response those where over Or this subscription Just then structure you your on today. expect seen reestablish you pricing any retail. on the

Daniel Rivera

for Justin, Danny. this is Thanks the question.

yes. deployed We've that country. answer short the across pricing the strategy is So

in seeing. As prepared We my to our happy members. we're conversion really with remarks, rate. members XXX,XXX results we're I mentioned the tripled added year-to-date We've

So we'd hoped. what We're any exactly doing it's way. working meaningful any response seeing or scaled kind we're to as in of not

strategy place, and We to will continue our hedges as how it It fixed long a short this As in to far us we natural lot I'd accretive to we sense for the to grow this, we keep our makes as base. of look, a against membership grow sensitivity in weather term, costs deploy membership us. business. this like And overall, revenue. medium say, will the to our be for margin want

financial it back we So hoped, we'd half benefits think add strategy as year. is the of will and exactly working continue in to the

Justin Kleber

relative you you insurance Can about rental was on frame, business? X regional company and you and contracts. the kind it contracts talked and to commercial And guess, today company how are stand standpoint Glass many end Jonathan, maybe where carriers the business. insurance as then think there penetration I of potential for that X from goal insurance a customers? And out -- the just car on a AGN I question rental

Jonathan Fitzpatrick

added is very little that ], done is frame the and to best my rental I'll but which nationally and customers rental, car in bit names, our business familiar terms [ with the then across continued work commercial pleased -- The Justin. of do in that customers. and we quite to X you, fleet for just the expect multiple think Yes, lines, we to commercial about AGN not the very the a we're concentrated of portfolio growth those management future -- get names team with there's of

course X then contracts, the of of pleased within To tip over over is contracts regional contracts that Once multiple half this we put just iceberg. of layers so revenue there in we in insurance, the regional signing sign, insurance of commercial the XXX then those sorry, sector. Within that is regional very approximately -- perspective, there's activate there and the to X year. back the bleed those insurance and the with sort have So regional carriers in out QX. X,XXX of

business. So for the pleased be we XXXX. building. far phenomenal We good so a Again, progress innings -- with very over we're of momentum that time, it's to us but making early business point I to feel in would we're building the in the about we're just that think going

Operator

Robert America. Ohmes Bank [indiscernible] of

Robert Ohmes

think My on headwinds, was question in little wondering the the the what's PCG could back you're happening when and how or headwinds space in and if a and And there? guys growth any on what half return thinking see to more have what you about you -- deferrals is on that and commentary EBITDA we color give been it's when could the whether there? -- I big-ticket

Jonathan Fitzpatrick

U.S. second really But bit the franchise PC&G, that of second start Robbie. in may and the XXX% Joel or is that's sorry, quarter ring-fenced say at collision top. in I Danny actually when primarily we would softness which look jump around Thanks, I'll -- Yes. on we've little half the seen business. in our the

mid-single be digits. of softness could year-to-date to attributed Some are claims industry-wide that down

down are digits. However, single driven claims low

the look market. that So at outperforming we broader as

as used at the of increasing That disappointing total we look normal the that to losses. half of pricing tailwinds is levels, in the back returned second car has frequency being year. said, the The factor more collision

have of So there. short-term I we headwinds sort that's think a fairly that

stop I'll So and... there

Robert Ohmes

pressures cost businesses? a that could here Has any cost across your And outlook there growth back improved support better from follow-up. wage an get EBITDA on pressures then we update a maybe alleviating -- just in are the the Can half?

Jonathan Fitzpatrick

Yes.

I major X, has think Robbie. ago. compared sort certainly I the think no mean, down labor changes, trajectory X, I quarters of X settled to environment

got cost visibility increase of likely don't but pricing input of in terms good generally, we any see in we goods there. any Our in see are don't cost so moderation, we've major there,

half first similar just terms costs. in year will pretty feels So it of the back half of the be the like overall to

Operator

coming will Barclays. Question Sigman be from from Seth

Seth Sigman

guidance. I talk progress a the to bit Nice quarter. the about little in wanted

So if of high assumptions? Because growth, previously is recall, think maybe some nice is you growth year. came the that guidance implied what's half the seems see. half the just EBITDA come It on you EBITDA to of most elaborate the which you the narrowed assumed XX% I here in the Can of the of of I the end the first in second better. for of underlying range, half like year, EBITDA to to the second going

second you talked, would then in But the this growth right, some low raising but a the that us caught good half, -- not double-digit of there I QX. also just assumptions So in start. be if really understand EBITDA help maybe

Joel Arnao

script. Seth, this earlier what said reaffirm in is we Joel. my I'll just

comparison of the basis. Continued see back the year from half a our we're -- in still going growth the from wash year-over-year still growth of segments, to expect see year. improvement and Platform of in back half in of we'll maintenance We our to or kind XX% some in Services PC&G the sorry, and -- and car other

QX with that earlier. in So the in messaged what it's gave QX, we've outlook good and but about consistent feel we

Seth Sigman

Got it.

And place if I I just mean, question that's minute spend Okay. follow-up the glass. X a guess on been infrastructure put you on here. maybe could then in

And that you second is the quarter be of still we would year? a for accelerates the help part helpful. of in timing It yet. that that. think segment the would how seen categorize transition the period, potential a was half this frame us Just But there the to segment. it of back so haven't like full the way how I seems understand exactly

Jonathan Fitzpatrick

solid things. the would sort don't I in to any margins early Macaluso, is you point revenue -- running but of all there. are I long-term to the business growing play necessary great and is progress. Mike really guidance, process sort We focus in got subsegment this Seth. on say and innings, making would people that systems who's of X and generating give we're we typically has One place us, Yes, and for now a that

business, I we're with progress again I'll today, the will profits in said take and the and I think, so growth QX, pretty about on far and So like XXXX. pleased future this time, but again, future it in reiterate is

Operator

from Canaccord. Our next Brian question MacNamara from will coming be

Unknown Analyst

Brian. for on [indiscernible] is This

plans have hasten if and consulting to to year-to-date, initiatives. as So We're deleveraging any this for you or a related process? fees wash assets is the $X.X try of million curious sell to way monetize, strategic transformation Car

Jonathan Fitzpatrick

Thanks, Madison, and good question. in management the portfolio And I remain committed to active organization.

any I to investors we're our hypothetical and think with when obviously, employees, running. we potential we to it's the processes announce processes be potential something our very or important impact comfortable that that that if could and to publicly

talk the anything, working the we we because doesn't we're in mean And just not So time those will that background. right, is announced haven't obviously, when busy about specifics.

Operator

be will from question coming from Christian JPMorgan. Next Carlino

Christian Carlino

insurance add about look just acquiring speak it's AUVs. And what the glass agreements locations the to units less on a AUVs about you the we should regional you've of in potential think year more this agreements? and How and these given website, on made, the question you to $X million lift recent could it's material like, about when with

to is where that agreements? expect things expand over you as insurance these shake So out time you

Daniel Rivera

national to commercial. done in -- do we And have and represents want we that just momentum all say, we've fact, for building want future. past this AGM we're focus now we integration Chris, that, going say Danny. a we're an going QX I to business. business, we and the a agreements. how out on car and X to of continue not that from the we're really said regional is what the carriers now we're the right? to said that, landed is incrementality Look, We've in business I'm but X that building building that this of much back insurance to just to and regional us do So rental for step kind look X different regional few quarter, or opportunity into any I companies, take into we've and insurance grow get in we're momentum this that's see to X guess not along

going happy with to we're that to hope do we're and So we're anymore, just continue deals the it's we're progress. It's to exactly so. do do, and but hoping we're to we and what landing we not to announce happy theoretical said

Christian Carlino

it. high guess, vehicle the get did Like, what a would the you level, and at what things first pressuring you'd Any quarter And diagnose like flat versus premiums stay how are broadly? Got guess spend insurance consumer? just to things and you're weaken seeing deferral to higher I just better? I the maintenance or expect extent from consumer color on

Jonathan Fitzpatrick

you year. that we we'll view sort in bit collision and environment the same-store economists, we say headwinds continued revenue, about of on our sort little Yes, as gave and of not sales one. the of think the of We're outlook other then our softness think we spending view on Wash of we our take world. changing And consumer sort we that's half X things. business obviously, a in an the We U.S. certainly of saw unchanged in QX. year. factoring look the of here. but in Christian, would second the there the the When massively Jonathan the in half customer that pieces I the sort at on in from tell are Car half see I'll how of don't second that's first year

in of think of half the year. I what the terms we estimate our So back best that's see for

environment. major no in ultimately, consumer So change spending

Operator

Our next is Peter Sandler. from from question Piper Keith

Peter Keith

I X So might you areas consumer seeing, be are inflationary portfolio, I'm we've more of where inflation? occurring economy. that from noticed ticket the with that motor guess, guess And to And general increases the I the just driven vehicle greatest maintenance degree. curious of the remains

Jonathan Fitzpatrick

of of ticket a I segments. from Peter, think known of don't it than complexity break the well more age times in past, ticket across age the And that again, the the out, the our it's vehicle, vehicles vehicle, mentioned of multiple growth subsegments, repair over of of that's complexity see couple of think as in seen is we've of over we next we last obviously, any I because any And taking but Yes, years, don't of number years, repair. in all change almost up price. complexity trajectory I've miles-driven and that of

growth So we average look forward. in will that think we order continue or as ARO repair

Peter Keith

get thing Wash I X X enough. both today. kind across evaluation given how on And was particularly rewards and of program Car hoping quickly sort an of about thinking strategic to just and Car be of Fair Okay. the Wash, would update you're Take that

Daniel Rivera

Yes. Peter.

perspective, of from program. -- quite thinking prudent been to the your things that we've and with point, So given Jonathan the evaluation is some management strategic portfolio through a that

results that from solution rolled consumers is happy few seeing that that So both being to markets. team nothing deploy markets, operational it's We're an program in different in are about methodical sense able It's the and moving out. the with perspective how has And forward. we're to in and it. we're changed the a really reacting just that those how

Operator

Lee from Blair. Next question is Philip from William

Unknown Analyst

some impact the kind and This will And traffic customers on a check, than talked of frequency is of are purchase know Sabrina. I other about ancillary the but what just that average categories its then oil? this we little what's of bit versus check?

Jonathan Fitzpatrick

do Yes, I I'll it. I best think my answer question, to so Sabrina, your got

business, premium oil to to shift X drivers continued of last growth or number So we Take really Oil major -- semi what One call over defined is there's as if X years. our check we full average sort be a Change would look which of either synthetic. at mix, the

I XX% think premium mix. in customers this about our of a oil buying quarter, we hit

second around we're and component big of That's The and rate attachment X franchise of stores. execution ancillary we is what call by rate. really our products, sort XX% our attachment that right company

XX-ish massive pieces. Obviously, not rate attachment to the premium trajectory do opportunity see go-forward building I there's don't check X oil the great growth on to So on on sort [indiscernible] of build change going there's in we those think on basis. those the a continue at we percent be on big mix think any But to material that XX%,

Operator

on be William will question Capital coming Seldinger Last Instructions] Markets. the from line [Operator BMO from

Unknown Analyst

versus demand just you're trends commercial about from the customers talk you seeing retail customers? Can

Jonathan Fitzpatrick

Yes. welcome Driven, first of to all. the William, universe coverage of

question. good So

years. they Inherently huge X of been has for of things from customer jobs it's and number for commercial XX% to about that vehicle our our come is for beautiful have partners. of sales complete think I Driven is purposes the using And their a a that system do. approximately focus or us revenue-generating to Brands commercial

change sticky, see our generally we've that and so very not commercial XXXX. far anything demand revenue we in seen predictable customers, So to from

Unknown Analyst

have Texas in of July? then Barrel, which any experienced from And impacts Okay. your businesses hit Hurricane

Daniel Rivera

Danny. is this William, Yes.

And into took So but call, when certainly, no it of stores. mean we'll is, get intended there, for in next barreled I more yes. for across store answer variety brands short the probably days the Texas earnings through a Houston have we presence closures heavy area. Hurricane multiple Barrel, and pun multiple we

yes, impact bit So of update more next a us. But was there for an an we'll of give earnings. in

Operator

No conference that you further and your for Ladies concludes We time. please call at for today. you participating this your thank this gentlemen, disconnect questions ask and lines.

all You one. good have a

Driven Brands (DRVN) 1 Aug 242024 Q2 Earnings call transcript