Driven Brands Holdings Inc.

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good morning welcome to driven brands first quarter 2026 earnings conference call the earnings release and net leverage ratio reconciliation are available for download on our website at investors.drivenbrands.com on the call with me today are danny rivera president and chief executive officer and mike diamond executive vice president and chief financial officer in a moment danny and mike will walk you through our financial and operating performance for the quarter Before we begin our remarks, I would like to remind you that management will refer to certain non-GAAP financial measures. You can find the reconciliations to the most directly comparable GAAP financial measures on the company's investor relations website and in its filings with the Securities and Exchange Commission. During this call, we will also make forward-looking statements regarding our current plans, beliefs, and expectations. These statements are not guarantees of future performance and are subject to a number of risks and uncertainties and other factors that could cause actual results and events to differ materially from results and events contemplated by these forward-looking statements. Please see our earnings release and our filings with the Securities and Exchange Commission for more information. Today's prepared remarks will be followed by question and answer session. We ask that you limit yourself to one question and one follow-up. Now, I'll turn the call over to Danny.

Good morning, and thank you for joining us to discuss Driven Brands' 2026 first quarter results. Q1 was a solid quarter for Driven as we continued to execute our growth and cash strategy. For the quarter, we grew system-wide sales 6%, revenue 8%, same-store sales 2%, and adjusted EBITDA 2%, while delivering adjusted EBITDA margins of 21.5%. The quarter was highlighted by Take 5 Oil Change's 23rd consecutive quarter of same-store sales growth, improvement from our franchise segment, and further progress reducing net leverage. We remain focused on reducing net leverage and strengthening our financial foundation. Net leverage finished the quarter at 3.2 times, and we remain on track to achieve our target of three times by year-end. Our priority remains reaching that target first. after which we intend to provide investors with a clear framework for our long-term capital allocation priorities. We also continue to make progress enhancing our finance and accounting capabilities, strengthening processes, and improving controls. While there is more work ahead, we are building a stronger and more scalable foundation to support the next chapter of growth at Driven Brands. The automotive aftermarket remains one of the most resilient corners of the consumer economy. We continue to benefit from long-term industry trends, including an aging vehicle fleet, a growing car park, increasing vehicle complexity, and consumers keeping vehicles longer. Overall demand remains healthy across our businesses. Within Take 5, we are monitoring some moderation in traffic among newer customers and more value-oriented customers, particularly households earning less than $50,000 annually. or are facing greater pressure from inflation and higher living costs. However, our core customer base remains resilient, and we continue to see strong average check, healthy premium mix, and solid attachment rates. The essential nature of our services, combined with secular industry tailwinds, reinforces our confidence in the business. Before turning to take five, I'd like to highlight an important investment we recently made to strengthen our management team and long-term capabilities. Bart LeCount has recently joined Driven Brands as our chief marketing officer, a newly created position demonstrating our commitment to building marketing into a core enterprise capability. Bart brings more than 20 years of marketing and brand building experience from leading consumer brands, including PepsiCo and Restaurant Brands International, where he led marketing for Popeyes. We have centralized marketing leadership under Bart to build a more integrated, data-driven, and scalable marketing organization that can accelerate growth, improve customer acquisition efficiency, strengthen customer retention, and enhance the value of our brands. Turning to Take5 Old Change. Take5 delivered another strong quarter, growing system-wide sales 14%, revenue 10%, same-store sales 4.5%, 12.5% on a two-year basis, and adjusted EBITDA by 14%. while expanding margins year over year by 120 basis points, resulting in adjusted EBITDA margins of 33.9%. We believe Take5's performance continues to reflect the strength of its differentiated customer experience. Our stay-in-your-car model, combined with a fast, friendly, and simple service experience, continues to resonate with consumers. Strong operational execution, premiumization, increasing attachment rates, and disciplined marketing further support customer acquisition, retention, and profitable growth. TakeFive also remains early in its growth journey. With approximately 1,400 locations today and a path to more than 2,500 locations over time, we continue to see substantial white space opportunity ahead. Importantly, we also continue to see attractive unit level economics and returns on new store investments across both company and franchise development. Our franchise segment once again delivered robust profitability, generating adjusted EBITDA margins of 60% while growing same-store sales 1% during the quarter. Results continue to be led by Meineke, with same-store sales for the segment sequentially improving from the fourth quarter. We expect franchise brands to continue generating strong margins and cash flow throughout 2026, although we anticipate same-store sales for the segment to moderate from our first quarter results. Auto Glass now also delivered a strong quarter, growing revenue 6%, same-store sales 7%, adjusted EBITDA 12%, while expanding margins 40 basis points to 9.4%. We continue to see significant long-term growth opportunity as we expand carrier relationships, grow market share, and leverage the scale we've built across the platform. I'll close with three key takeaways. First, Take 5 continues to validate our long-term investment thesis. the business is delivering strong growth, expanding margins, and remains early in its runway toward more than 2,500 locations. Second, we remain on track to achieve our target of three times net leverage by year end, while continuing to strengthen the company's financial foundation. Third, we will remain disciplined allocators of capital and active managers of our portfolio, concentrating our resources on our highest growth, highest return opportunities to create long-term shareholder value. Based on our first quarter performance, we are reiterating our full year 2026 guidance of revenue of $1.95 to $2.05 billion, adjusted EBITDA of $430 to $460 million, same-store sales of flat to 2%, and 160 to 190 net new units. I want to sincerely thank our team and our franchise partners for their continued commitment, execution, and support. With that, I'll turn it over to my partner and driven CFO, Mike.