Driven Brands Holdings Inc. has reported financial results for the fourth quarter and fiscal year ended Dec. 26, 2020.
For the fourth quarter, system-wide sales were $935.1 million, an increase of 24% versus the prior year, with 36% net store growth and a decline in same-store sales of 3.4%. Revenue was $288.5 million, an increase of 58% versus the prior year. Loss per share was $(0.06) for the fourth quarter, while adjusted earnings per share2 was $0.01.
For fiscal year 2020, system-wide sales were $3.4 billion, an increase of 16% versus the prior year, with 36% net store growth and a decline in same-store sales of 5.6%. Revenue was $904.2 million, an increase of 51% versus the prior year. Loss per share was $(0.04) for the fiscal year, while adjusted earnings per share2 was $0.42.
“Our fourth quarter results are a testament to the strength and diversity of the Driven Brands portfolio and the hard work the team has demonstrated throughout 2020,” said Jonathan Fitzpatrick, president and CEO. “Our employees and franchisees continued to adapt to the ever-changing needs of the past year, meeting our expectations and delivering industry-leading results.
“Given our scale, the significant whitespace in this fragmented and needs-based industry, and our robust cash generation, I am confident that we are well positioned for growth in 2021 and to maximize long-term value for all of our stakeholders.”
Fourth Quarter Highlights
The company added 42 net new stores during the quarter, with the addition of 23 stores in the Maintenance segment, 13 stores in the Car Wash segment, and six stores in the Paint, Collision, and Glass segment.
Same-store sales declined 3.4% for the quarter. Same-store sales increased in the Maintenance and Platform Services segments, while same-store sales declined in the Paint, Collision, and Glass segment as roadways were less congested due to the COVID-19 pandemic, which resulted in fewer accidents and therefore fewer collision repairs. This compares with consolidated same-store sales growth of 5.4% in the fourth quarter of 2019.
Revenue increased 58% versus the prior year, primarily driven by the acquisition of International Car Wash Group (“ICWG”) in the third quarter of 2020, which added 939 stores to the portfolio.
The company recorded a net loss in the fourth quarter of $(7.5) million. Adjusted Net Income was $1.6 million, an increase of 3% versus the prior year. Adjusted EBITDA3 was $65.9 million, more than double that of the prior year.
Capital and Liquidity
The company ended the fourth quarter with $188.4 million in cash, cash equivalents, and restricted cash, as well as $155.8 million of undrawn capacity on its revolving credit facilities.
In January 2021, the company sold 31.8 million shares of its common stock in its initial public offering and received net proceeds of $651.6 million. Those proceeds, together with cash on hand, were used to repay $721.9 million of outstanding debt assumed in the ICWG acquisition. The remaining long-term debt portfolio totals $1.5 billion and has a weighted average fixed annual interest rate of 4.0% and a weighted average remaining term of six years.
In February 2021, the company’s underwriters exercised their over-allotment option to purchase 4.8 million additional shares of common stock. The company received net proceeds of $99.2 million, and used $43 million of such proceeds to purchase 2.1 million shares of common stock from existing stockholders. The company intends to use the remaining net proceeds of $56.2 million for general corporate purposes.
