EX-99.1

EX-99.1 2 d450827dex991.htm EX-99.1 EX-99.1

Exhibit 99.1

LOGO

Driven Brands Holdings Inc. Reports Record Year of Revenue and

Profitability in Fiscal 2022; Issues Fiscal 2023 Guidance

•

Fiscal 2022 revenue increased 39 percent powered by 14 percent same-store sales growth and 9 percent net store growth

•

Momentum continued in fourth quarter with the seventh consecutive quarter of double-digit same store-sales growth

•

Fiscal 2023 guidance reflects powerful customer value proposition and resilient needs-based industry

Charlotte, N.C. (February 22, 2023)—Driven Brands Holdings Inc. (NASDAQ: DRVN) (“Driven Brands” or the “Company”) today reported financial results for the fourth quarter and fiscal year ended December 31, 2022.

For the fiscal year, Driven Brands delivered revenue of $2.0 billion, up 39 percent versus the prior year. System-wide sales were $5.6 billion, up 24 percent versus the prior year with 14 percent same-store sales growth and 9 percent net store growth.

Net income increased $33.6 million versus the prior year to $43.2 million or $0.25 per diluted share inclusive of a $125.5 million one-time non-cash impairment charge related to intangible assets in the second quarter as a result of the Company’s decision to re-brand its U.S. car wash business. Adjusted Net Income¹ increased 41 percent to $207.9 million or $1.22 per diluted share¹, while Adjusted EBITDA¹ increased 42 percent from the prior year to $513.8 million.

“2022 was a year of record performance and significant strategic progress for Driven Brands. We deepened our competitive moat as our differentiated offering resonated with our customers,” said Jonathan Fitzpatrick, President and Chief Executive Officer. “We gained significant market share in this large and growing $350 billion needs-based automotive services category, and we are leveraging our proven playbook to drive long-term, sustainable growth.

“Building on our strong performance last year, we entered the first quarter of 2023 with momentum, excellent visibility into our expense base and a robust development pipeline that provides us with strong line of sight to multi-year growth. Our guidance reflects that momentum, our continued confidence in our business model, the resilience of the category, and a track record of execution.”

For the fourth quarter, Driven Brands delivered revenue of $539.7 million, up 38 percent versus the prior year. System-wide sales were $1.5 billion, up 24 percent versus the prior year with 11 percent same-store sales growth and 9 percent net store growth.

Net income increased $66.2 million versus the prior year to $27.4 million or $0.16 per diluted share. Adjusted Net Income¹ increased 35 percent to $42.2 million or $0.25 per diluted share¹, while Adjusted EBITDA¹ increased 54 percent from the prior year to $130.5 million.

Fiscal Year 2022 Highlights²

Comparisons are fiscal year 2022 ended December 31, 2022 versus fiscal year 2021 ended December 25, 2021 unless otherwise noted

•

Revenue increased 39 percent to $2.0 billion, driven by same-store sales and net store growth.

•

Consolidated same-store sales increased 14 percent.

•

The Company added 393 net new stores during the year.

•

Net income increased $33.6 million to $43.2 million or $0.25 per diluted share.

•

Adjusted Net Income1 increased 41 percent to $207.9 million or $1.22 per diluted share1.

•

Adjusted EBITDA1 increased 42 percent to $513.8 million.

Fiscal Year 2022 Key Performance Indicators by Segment


	System-wide Sales (in millions)		Store Count		Same-Store Sales			Revenue (in millions)		Segment Adjusted EBITDA¹ (in millions)
Maintenance	$	1,616.1		1,645		16.1	%	$	799.9	$	262.6
Car Wash		585.7		1,111		(3.9	%)*		592.7		184.7
Paint, Collision & Glass		2,959.0		1,846		17.1	%		410.9		135.4
Platform Services		445.7		203		12.6	%		196.4		72.5
Corporate / Other		N/A		N/A		N/A			33.3

Total	$	5,606.5		4,805		14.1	%		$2,033.2

*	Car Wash same-store sales declined 3.9 percent in fiscal year 2022. Foreign exchange rate movement had a 440 basis point negative impact. The impact of foreign exchange rate movement on the remaining segments was not significant.

Fourth Quarter 2022 Highlights²

Comparisons are fourth quarter 2022 ended December 31, 2022 versus fourth quarter 2021 ended December 25, 2021 unless otherwise noted

•

Revenue increased 38 percent to $539.7 million, driven by same-store sales and net store growth.

•

Consolidated same-store sales increased 11 percent.

•

The Company added 98 net new stores during the quarter.

•

Net income increased $66.2 million to $27.4 million or $0.16 per diluted share.

•

Adjusted Net Income1 increased 35 percent to $42.2 million or $0.25 per diluted share1.

•

Adjusted EBITDA1 increased 54 percent to $130.5 million.

Fourth Quarter 2022 Key Performance Indicators by Segment


	System-wide Sales (in millions)		Store Count		Same-Store Sales			Revenue (in millions)		Segment Adjusted EBITDA¹ (in millions)
Maintenance	$	448.4		1,645		16.3	%	$	226.0	$	77.3
Car Wash		132.6		1,111		(10.1	%)*		134.6		36.2
Paint, Collision & Glass		794.2		1,846		14.1	%		122.8		34.6
Platform Services		92.9		203		4.1	%		48.0		18.1
Corporate / Other		N/A		N/A		N/A			8.3

Total	$	1,468.1		4,805		11.4	%	$	539.7

*	Car Wash same-store sales declined 10.1 percent in the fourth quarter. Foreign exchange rate movement had a 400 basis point negative impact. The impact of foreign exchange rate movement on the remaining segments was not significant.

Capital and Liquidity

During the fourth quarter, the Company closed on a $365 million whole business securitization transaction. Proceeds from the offering were used for general corporate purposes, including the repayment of the revolving credit facilities creating capacity to invest in continued growth.

The Company ended the fiscal year with total liquidity of $617.6 million, consisting of $227.1 million in cash and cash equivalents, and $390.5 million of undrawn capacity on its variable funding securitization senior notes and revolving credit facility. This does not include the additional $135 million Series 2022 Class A-1 Notes that expand our variable funding note borrowing capacity when the company elects to exercise it, assuming certain conditions continue to be met.

Fiscal Year 2023 Guidance

The following guidance reflects the Company’s expectations for fiscal year 2023 ending December 30, 2023:

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Revenue of approximately $2.35 billion.

•

Adjusted EBITDA¹ of approximately $590 million.

•

Adjusted Earnings Per Share¹ of approximately $1.21.

The Company also expects:

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Same-store sales growth of 5 to7 percent.

•

Net store growth of approximately 365:

•

Maintenance: approximately 170 stores of which 70% will be franchised and 30% will be Company-operated

•

Car Wash: approximately 65 stores which will be Company-operated

•

Paint, Collision & Glass: approximately 130 stores of which 25% will be franchised and 75% will be Company-operated.

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

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

²	The fourth quarter and fiscal year 2022 results include the impact of the 53rd week in fiscal year 2022, which contributed $25 million in revenue, $6 million in Adjusted EBITDA1 and $0.02 in Adjusted Earnings Per Share¹.

Conference Call

Driven Brands will host a conference call to discuss fourth quarter and fiscal year 2022 results today, Wednesday, February 22, 2023, at 8:30am ET. The call will be available by webcast and can be accessed by visiting Driven Brands’ Investor Relations website at investors.drivenbrands.com. A replay of the call will be available until May 2, 2023.

About Driven Brands

Driven Brands^™, headquartered in Charlotte, NC, is the largest automotive services company in North America, providing a range of consumer and commercial automotive needs, including paint, collision, glass, vehicle repair, oil change, maintenance and car wash. Driven Brands is the parent company of some of North America’s leading automotive service businesses including Take 5 Oil Change^®, Take 5 Car Wash^®, Meineke Car Care Centers^®, Maaco^®, 1-800-Radiator & A/C^®, Auto Glass Now^®, and CARSTAR^®. Driven Brands has more than 4,800 locations across 13 countries, and services over 70 million vehicles annually. Driven Brands’ network generates approximately $2.0 billion in annual revenue from more than $5.6 billion in systemwide sales.

Disclosure Regarding Forward-Looking Statements

This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements are generally identified by the use of forward-looking terminology, including the terms “anticipate,” “believe,” “continue,” “could,” “estimate,” “expect,” “intend,” “likely,” “may,” “plan,” “possible,” “potential,” “predict,” “project,” “should,” “target,” “will,” “would” and, in each case, their negative or other various or comparable terminology. All statements other than statements of historical facts contained in this press release, including statements regarding our strategy, future operations, future financial position, future revenue, projected costs, prospects, plans, objectives of management, and expected market growth are forward-looking statements. In particular, forward-looking statements include, among other things, statements relating to: (i) our strategy, outlook and growth prospects; (ii) our operational and financial targets and dividend policy; (iii) general economic trends and trends in the industry and markets; and (iv) the competitive environment in which we operate. Forward-looking statements are not based on historical facts but instead represent our current expectations and assumptions regarding our business, the economy and other future conditions, and involve known and unknown risks, uncertainties and other important factors that may cause our actual results, performance, or achievements to be materially different from any future results, performance, or achievements expressed or implied by the forward-looking statements. It is not possible to predict or identify all such risks. These risks include, but are not limited to, the risk factors that are described under the section titled “Risk Factors” in our Annual Report on Form 10-K for the fiscal year ended December 25, 2021, our Quarterly Report on Form 10-Q for the fiscal quarter ended September 24, 2022, and in our other filings with the Securities and Exchange Commission, which are available on its website at www.sec.gov. Given these uncertainties, you should not place undue reliance on these forward-looking statements.

Forward-looking statements represent our estimates and assumptions only as of the date on which they are made, and we undertake no obligation to update or review publicly any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by law.


Contacts
Shareholder/Analyst inquiries:		Media inquiries:
Kristy Moser		Taylor Blanchard
kristy.moser@drivenbrands.com		taylor.blanchard@drivenbrands.com
(980) 229-9450		(704) 644-8129

DRIVEN BRANDS HOLDINGS INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)


	Three Months Ended						Year Ended
	December 31,			December 25,			December 31,			December 25,
(in thousands, except per share amounts)	2022			2021			2022			2021
Revenue:
Franchise royalties and fees	$	43,434		$	37,173		$	171,734		$	144,413
Company-operated store sales		366,921			239,838			1,324,408			843,646
Independently-operated store sales		36,657			43,763			195,157			204,246
Advertising contributions		23,943			18,934			87,750			75,599
Supply and other revenue		68,698			52,177			254,145			199,376

Total revenue		539,653			391,885			2,033,194			1,467,280

Operating expenses:
Company-operated store expenses		231,894			148,742			812,262			515,837
Independently-operated store expenses		22,544			24,451			107,940			114,115
Advertising expenses		24,179			18,100			87,986			74,765
Supply and other expenses		35,865			31,901			145,481			112,318
Selling, general and administrative expenses		110,821			73,714			383,478			292,263
Acquisition costs		5,323			59,712			15,304			62,386
Store opening costs		953			1,137			2,878			2,497
Depreciation and amortization		39,528			34,055			147,156			112,777
Trade name impairment		—			—			125,450			—
Asset impairment charges and lease terminations		2,745			96			5,655			3,257

Total operating expenses		473,852			391,908			1,833,590			1,290,215

Operating income (loss)		65,801			(23	)		199,604			177,065

Other expenses, net:
Interest expense, net		35,150			23,524			114,096			75,914
(Gain) loss on foreign currency transactions, net		(13,322	)		14,327			17,168			20,683
Loss on debt extinguishment		—			—			—			45,576

Total other expenses, net		21,828			37,851			131,264			142,173

Net income (loss) before taxes		43,973			(37,874	)		68,340			34,892
Income tax expense		16,575			911			25,167			25,356

Net income (loss)		27,398			(38,785	)		43,173			9,536
Net loss attributable to non-controlling interests		—			(28	)		(15	)		(96	)

Net income (loss) attributable to Driven Brands Holdings Inc.	$	27,398		$	(38,757	)	$	43,188		$	9,632

Earnings (loss) per share⁽¹⁾:
Basic	$	0.16		$	(0.23	)	$	0.26		$	0.06

Diluted	$	0.16		$	(0.23	)	$	0.25		$	0.06

Weighted average shares outstanding:
Basic		162,744			162,646			162,762			160,684
Diluted		166,810			162,646			166,743			164,644

DRIVEN BRANDS HOLDINGS INC. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS (UNAUDITED)


(in thousands)	December 31, 2022			December 25, 2021
Assets
Current assets:
Cash and cash equivalents	$	227,110		$	523,414
Restricted cash		792			792
Accounts and notes receivable, net		179,888			117,903
Inventory		72,040			46,990
Prepaid and other assets		40,084			24,326
Income tax receivable		15,075			6,867
Advertising fund assets, restricted		36,421			45,360
Assets held for sale		—			3,275

Total current assets		571,410			768,927
Property and equipment, net		1,545,738			1,350,984
Operating lease right-of-use assets		1,299,189			995,625
Deferred commissions		7,121			10,567
Intangibles, net		765,903			816,183
Goodwill		2,277,065			1,910,392
Other assets		30,561			3,182
Deferred tax assets		2,911			1,509

Total assets	$	6,499,898		$	5,857,369

Liabilities and shareholders’ equity
Current liabilities:
Accounts payable	$	60,606		$	83,033
Accrued expenses and other liabilities		317,318			306,956
Income taxes payable		4,454			11,054
Current portion of long-term debt		24,651			26,044
Tax receivable agreement liability		53,328			24,255
Advertising fund liabilities		36,726			26,441

Total current liabilities		497,083			477,783
Long-term debt, net		2,713,616			2,356,320
Deferred tax liability		276,749			257,067
Operating lease liabilities		1,177,501			931,604
Tax receivable agreement liability		117,915			131,715
Deferred revenue		30,046			28,240
Accrued expenses and other long-term liabilities		33,419			29,398

Total liabilities		4,846,329			4,212,127
Common stock		1,674			1,674
Additional paid-in capital		1,628,904			1,605,890
Retained earnings		84,796			41,607
Accumulated other comprehensive loss		(62,436	)		(5,028	)

Total shareholders’ equity attributable to Driven Brands Holdings Inc.		1,652,938			1,644,143

Non-controlling interests		631			1,099

Total shareholders’ equity		1,653,569			1,645,242

Total liabilities and shareholders’ equity	$	6,499,898		$	5,857,369

DRIVEN BRANDS HOLDINGS INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)


	Fiscal Year Ended
(in thousands)	December 31, 2022			December 25, 2021
Net income	$	43,173		$	9,536

Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization		147,156			112,777
Equity-based compensation expense		20,583			4,301
Trade name impairment cost		125,450			—
Loss on foreign denominated transactions		17,147			25,324
Bad debt expense		5,777			1,854
Asset impairment costs		5,655			3,257
Amortization of deferred financing costs and bond discounts		8,450			7,002
Amortization of interest rate hedge		(542	)		—
Loss (gain) on foreign currency derivative		21			(4,642	)
Gain on sale of businesses, fixed assets, and sale-leaseback transactions		(34,854	)		(11,353	)
Provision for deferred income taxes		20,567			9,866
Loss on extinguishment of debt		—			45,576
Other, net		(21	)		(2,183	)
Changes in assets and liabilities, net of acquisitions:
Accounts and notes receivable, net		(58,837	)		(36,395	)
Inventory		(22,712	)		(5,723	)
Prepaid and other current assets		(30,418	)		(30,260	)
Advertising fund assets and liabilities, restricted		12,698			9,386
Other assets		(23,378	)		483
Deferred commissions		3,407			(1,899	)
Deferred revenue		1,925			6,678
Accounts payable		(34,634	)		6,905
Accrued expenses and other liabilities		2,898			128,871
Income tax payable, net		(12,335	)		4,466

Cash provided by operating activities		197,176			283,827

Cash flows from investing activities:					—
Capital expenditures		(439,585	)		(160,760	)
Cash used in business acquisitions, net of cash acquired		(763,061	)		(800,829	)
Proceeds from sale-leaseback transactions		337,178			144,134
Proceeds from sale or disposal of businesses and fixed assets		25,188			2,519

Cash used in investing activities		(840,280	)		(814,936	)


Cash flows from financing activities:
Payment of debt issuance cost		(7,172	)		(19,756	)
Proceeds from the termination of interest rate swap		10,870			—
Proceeds from the issuance of long-term debt		365,000			950,000
Repayment of long-term debt		(23,912	)		(721,500	)
Repayments of revolving lines of credit and short-term debt		(435,000	)		(544,800	)
Proceeds from revolving lines of credit and short-term debt		435,000			526,800
Repayment of principal portion of finance lease liability		(3,369	)		(2,199	)
Proceeds from failed sale-leaseback transactions		(14	)		538
Proceeds from initial public offering, net of underwriting discounts		—			661,500
Net proceeds from follow-on public offering		—			99,225
Repurchases of common stock		—			(43,040	)
Payments for termination of interest rate swaps		—			(21,826	)
Proceeds from stock option exercises		340			505
Other, net		1,625			89

Cash provided by financing activities		343,368			885,536

Effect of exchange rate changes on cash		(2,283	)		558
Net change in cash, cash equivalents, restricted cash, and cash included in advertising fund assets, restricted		(302,019	)		354,985
Cash and cash equivalents, beginning of period		523,414			172,611
Cash included in advertising fund assets, restricted, beginning of period		38,586			19,369
Restricted cash, beginning of period		792			15,827

Cash, cash equivalents, restricted cash, and cash included in advertising fund assets, restricted, beginning of period		562,792			207,807

Cash and cash equivalents, end of period		227,110			523,414
Cash included in advertising fund assets, restricted, end of period		32,871			38,586
Restricted cash, end of period		792			792

Cash, cash equivalents, restricted cash, and cash included in advertising fund assets, restricted, end of period	$	260,773		$	562,792

RECONCILIATION OF NON-GAAP FINANCIAL MEASURES

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

Non-GAAP Financial Measures in Guidance

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

Adjusted Net Income and Adjusted Earnings Per Share

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

The tables below reflect the calculation of Adjusted Net Income and Adjusted Earnings Per Share for the fourth quarter and fiscal year ended December 31, 2022 compared to the fourth quarter and fiscal year ended December 25, 2021.

Adjusted Net Income and Adjusted Earnings Per Share (Unaudited)


	Three Months Ended						Year Ended
	December 31,			December 25,			December 31,			December 25,
(in thousands, except per share amounts)	2022			2021			2022			2021
Net income (loss)	$	27,398		$	(38,785	)	$	43,173		$	9,536
Acquisition related costs^(a)		5,323			59,712			15,304			62,386
Non-core items and project costs, net^(b)		16,805			1,746			20,241			5,656
Straight-line rent adjustment^(c)		3,435			3,228			14,965			11,619
Equity-based compensation expense^(d)		8,424			1,357			20,583			4,301
Foreign currency transaction (gain) loss, net^(e)		(13,322	)		14,327			17,168			20,683
Bad debt recovery^(f)		—			(3,183	)		(449	)		(3,183	)
Trade name impairment^(g)		—			—			125,450			—
Asset sale leaseback (gain) loss, impairment and closed store expenses^(h)		(8,835	)		(11,940	)		(29,083	)		(8,935	)
Loss on debt extinguishment⁽ⁱ⁾		—			—			—			45,576
Amortization related to acquired intangible assets^(j)		8,775			4,676			27,059			18,551
Provision for uncertain tax positions^(k)		(224	)		(62	)		(148	)		(313	)
Valuation allowance for deferred tax asset^(l)		3,051			4,400			3,051			4,400

Adjusted net income before tax impact of adjustments		50,830			35,476			257,314			170,277
Tax impact of adjustments^(l)		(8,641	)		(4,314	)		(49,437	)		(23,282	)

Adjusted net income		42,189			31,162			207,877			146,995

Net loss attributable to non-controlling interest		—			(28	)		(15	)		(96	)

Adjusted net income attributable to Driven Brands Holdings Inc.	$	42,189		$	31,190		$	207,892		$	147,091

Adjusted Earnings Per Share
Basic⁽¹⁾	$	0.25		$	0.19		$	1.25		$	0.90

Diluted⁽¹⁾	$	0.25		$	0.18		$	1.22		$	0.88

Weighted average shares outstanding
Basic		162,744			162,646			162,762			160,684

Diluted		166,810			166,671			166,743			164,644

(1)

Adjusted earnings per share is calculated under the two-class method. Under the two-class method, adjusted earnings per share is calculated using adjusted net income attributable to common shares, which is derived by reducing adjusted net income by the amount attributable to participating securities. Adjusted net income attributable to participating securities used in the basic earnings per share calculation was $0.9 million and $4.4 million for the three months and year ended December 31, 2022, respectively, and adjusted net income attributable to participating securities used in the diluted earnings per share calculation was $0.8 million and $3.9 million for the three months and year ended December 31, 2022, respectively.

Adjusted EBITDA

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

Please see the company’s Annual Report on Form 10-K for the fiscal year ended December 25, 2021 filed with the SEC on March 18, 2022 for additional information on Adjusted EBITDA. The tables below reflect the calculation of Adjusted EBITDA for the fourth quarter and fiscal year ended December 31, 2022 compared to the fourth quarter and fiscal year ended December 25, 2021.

Net Income to Adjusted EBITDA Reconciliation (Unaudited)


	Three Months Ended						Year Ended
	December 31,			December 25,			December 31,			December 25,
(in thousands)	2022			2021			2022			2021
Net income (loss)	$	27,398		$	(38,785	)	$	43,173		$	9,536
Income tax expense		16,575			911			25,167			25,356
Interest expense, net		35,150			23,524			114,096			75,914
Depreciation and amortization		39,528			34,055			147,156			112,777

EBITDA	$	118,651		$	19,705		$	329,592		$	223,583

Acquisition related costs^(a)		5,323			59,712			15,304			62,386
Non-core items and project costs, net^(b)		16,805			1,746			20,241			5,656
Straight-line rent adjustment^(c)		3,435			3,228			14,965			11,619
Equity-based compensation expense^(d)		8,424			1,357			20,583			4,301
Foreign currency transaction (gain) loss, net^(e)		(13,322	)		14,327			17,168			20,683
Bad debt recovery^(f)		—			(3,183	)		(449	)		(3,183	)
Trade name impairment ^(g)		—			—			125,450			—
Asset sale leaseback (gain) loss, impairment and closed store expenses^(h)		(8,835	)		(11,940	)		(29,083	)		(8,935	)
Loss on debt extinguishment⁽ⁱ⁾		—			—			—			45,576

Adjusted EBITDA	$	130,481		$	84,952		$	513,771		$	361,686

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

Consists of acquisition costs as reflected within the consolidated statement 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.

Consists of discrete items and project costs, including third-party consulting and professional fees associated with strategic transformation initiatives, as well as a $15 million change in estimate related to the Tax Receivable Agreement that we entered into at the IPO related to the filing of our 2021 tax returns in the fourth quarter 2022.

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. These losses are partially offset by unrealized gains/losses on remeasurement of cross currency swaps and forward contracts.

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

g.	Relates to an impairment of certain Car Wash trade names as the Company elected to discontinue their use.

Relates to net (gain) loss on sale leasebacks, the discontinuation of the use of a trade name, as well as impairment of certain fixed assets and operating lease right-of-use assets related to closed locations. Also represents lease exit costs and other costs associated with stores that were closed prior to the respective lease termination dates.

i.	Represents the write-off of debt issuance costs associated with early termination of debt.

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

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

Represents the tax impact of adjustments associated with the reconciling items between net income and Adjusted Net Income, excluding the provision for uncertain tax positions and valuation allowance for certain deferred tax assets. To determine the tax impact of the deductible reconciling items, we utilized statutory income tax rates ranging from 9% to 36%, depending upon the tax attributes of each adjustment and the applicable jurisdiction.

DRIVEN BRANDS HOLDINGS INC. AND SUBSIDIARIES

ADJUSTED EBITDA AND SEGMENT ADJUSTED EBITDA RECONCILIATION (UNAUDITED)


	Three Months Ended						Year Ended
	December 31,			December 25,			December 31,			December 25,
(in thousands)	2022			2021			2022			2021
Segment Adjusted EBITDA:
Maintenance	$	77,284		$	46,178		$	262,608		$	179,073
Car Wash		36,222			37,841			184,717			153,065
Paint, Collision & Glass		34,600			21,197			135,447			82,731
Platform Services		18,067			12,090			72,538			56,954
Corporate and other		(34,739	)		(31,217	)		(138,661	)		(107,640	)
Store opening costs		(953	)		(1,137	)		(2,878	)		(2,497	)

Adjusted EBITDA	$	130,481		$	84,952		$	513,771		$	361,686

DRIVEN BRANDS HOLDINGS INC. AND SUBSIDIARIES

ADDITIONAL INFORMATION ON KEY PERFORMANCE INDICATORS (UNAUDITED)


	Three Months Ended December 31, 2022
					Paint,
					Collision &		Platform
(in thousands)	Maintenance		Car Wash		Glass		Services		Total
System-wide Sales
Franchise stores	$	253,074	$	—	$	719,646	$	91,801	$	1,064,521
Company-operated stores		195,309		95,976		74,576		1,060		366,921
Independently operated Stores		—		36,657		—		—		36,657

Total System-wide Sales	$	448,383	$	132,633	$	794,222	$	92,861	$	1,468,099

Store Count (in whole numbers)
Franchise stores		1,052		—		1,628		202		2,882
Company-operated stores		593		390		218		1		1,202
Independently operated Stores		—		721		—		—		721

Total Store Count		1,645		1,111		1,846		203		4,805


	Three Months Ended December 25, 2021
					Paint,
					Collision &		Platform
(in thousands)	Maintenance		Car Wash		Glass		Services		Total
System-wide Sales
Franchise stores	$	192,785	$	—	$	622,787	$	82,954	$	898,526
Company-operated stores		137,984		80,260	$	20,500	$	1,094		239,838
Independently operated Stores		—		43,763		—		—		43,763

Total System-wide Sales	$	330,769	$	124,023	$	643,287	$	84,048	$	1,182,127

Store Count (in whole numbers)
Franchise stores		962		—		1,608		200		2,770
Company-operated stores		543		330		40		1		914
Independently operated Stores		—		728		—		—		728

Total Store Count		1,505		1,058		1,648		201		4,412


	Year Ended December 31, 2022
					Paint,
					Collision &		Platform
(in thousands)	Maintenance		Car Wash		Glass		Services		Total
System-wide Sales
Franchise stores	$	923,153	$	—	$	2,723,047	$	440,691	$	4,086,891
Company-operated stores		692,947		390,502		235,924		5,035		1,324,408
Independently operated Stores		—		195,157		—		—		195,157

Total System-wide Sales	$	1,616,100	$	585,659	$	2,958,971	$	445,726	$	5,606,456

Store Count (in whole numbers)
Franchise stores		1,052		—		1,628		202		2,882
Company-operated stores		593		390		218		1		1,202
Independently operated Stores		—		721		—		—		721

Total Store Count		1,645		1,111		1,846		203		4,805


	Year Ended December 25, 2021
					Paint,
					Collision &		Platform
(in thousands)	Maintenance		Car Wash		Glass		Services		Total
System-wide Sales
Franchise stores	$	759,940	$	—	$	2,345,428	$	386,163	$	3,491,531
Company-operated stores		503,719		277,118		57,804	$	5,005		843,646
Independently operated Stores		—		204,246		—		—		204,246

Total System-wide Sales	$	1,263,659	$	481,364	$	2,403,232	$	391,168	$	4,539,423

Store Count (in whole numbers)
Franchise stores		962		—		1,608		200		2,770
Company-operated stores		543		330		40		1		914
Independently operated Stores		—		728		—		—		728

Total Store Count		1,505		1,058		1,648		201		4,412