Valvoline Inc. reported its financial results for its third fiscal quarter ending June 30, 2023, as it “continues to demonstrate the resiliency of the preventive maintenance business and our algorithm for growth,” said outgoing CEO Sam Mitchell. Valvoline’s sales grew 19% and adjusted EBITDA grew 28% versus the prior year. All comparisons in Valvoline’s results are made to the same prior-year period unless otherwise noted.

“We also made great progress on our commitment to return a substantial amount of the net proceeds from the sale of the Global Products business to shareholders,” continued Mitchell. “We have returned $1.39 billion to shareholders this year through both the tender offer and open market repurchases, leaving $340 million on our current share repurchase authorization. We expect to execute on the remaining repurchase authorization over the next 12 months, subject to market conditions.”

Lori Flees, president of retail services who was announced yesterday as Mitchell’s successor, added: “The summer drive season is off to a great start and demand for our quick, easy trusted service remains high,. We continue to see strong same-store sales growth for both company and franchise stores, with 12.5% system-wide same-store sales growth this quarter. This strong same store sales growth is balanced between transactions and ticket.”

Flees said the company saw EBITDA margin improvement both sequentially and over prior year. She credited the margin improvement to be primarily driven by labor efficiency and SG&A leverage from increased volume during the summer drive season.

Balance Sheet and Cash Flow

More highlights from the company’s Q3 balance sheet include:

• Cash, cash equivalents, and short-term investments balance of $950.8 million; total debt of $1.6 billion;
• Year-to-date continuing operations cash flow from operations of $249.9 million and free cash flow of $124 million;
• Returned $1.39 billion in cash to shareholders year-to-date via share repurchases with $340.4 million remaining on the existing authorization;
• Interest income of $24.9 million earned during the quarter on invested net proceeds from the sale of Global Products

“We continue to deliver best-in-class top-line and bottom-line growth consistent with the long-term guidance provided earlier this year,” Mitchell said about the company’s 2023 outlook. “We are narrowing the range of our EBITDA guidance and raising our net income guidance. We are focused on creating significant value for shareholders by growing the core business, expanding the network and evolving with the car parc.”