Valvoline Inc.

I will now hand over to your host, Elizabeth Russell, Senior Director in Relations to Begin. Elizabeth, please go ahead.

Good morning, and welcome to Babbling's first quarter fiscal 2024 conference call and webcast. This morning, Babbling released results for the first quarter ended December 31st, 2023. This presentation should be viewed in conjunction with that earnings release, a copy of which is available on our investor relations website. at investors.valvoline.com. Please note that these results are preliminary until we file our Form 10-Q with the Securities and Exchange Commission. On this morning's call is Lori Fleece, our CEO and President, and Mary Maxelsberger, our CFO. As shown on slide two, any of our remarks today that are not statements of historical fact are forward-looking statements. These forward-looking statements are based on current assumptions as of the date of this and are subject to certain risks and uncertainties that may cause actual results to differ materially from such statements. Babelene assumes no obligation to update any forward looking statements unless required by law. In this presentation and in our remarks, we will be discussing our results on an adjusted, non-GAAP basis, unless otherwise noted. Non-GAAP results are adjusted for key items, which are unusual, non-operational, or restructuring in nature. We believe this approach enhances the understanding of our ongoing business. A reconciliation of our adjusted non-GAAP results to amounts reported under GAAP and a discussion of management's use of non-GAAP and key business measures is included in the presentation appendix. The information provided is used by our management and may not be comparable to similar measures used by other companies. As a reminder, the retail services business represents the company's continuing operations and the former global product segment is classified as discontinued operations for the purposes of GAAP reporting. Today, Lori will begin with a look at the key highlights from our first quarter, and Mary will then cover our financial results. With that, I will turn it over to Lori.

Thanks, Elizabeth, and thank you all for joining us today. For the first quarter of 2024, we saw growth at the top line across the network, with system-wide store sales growing 12.3%, to $723 million. Profitability was in line with our expectations with adjusted EBITDA improving 23% to $90 million and adjusted EPS improving 81% to 29 cents per share. We remain on track with our full year guidance. We started the year strong with new store additions, adding 38 for the quarter, half of which were from franchise. This brings our network total to 1890 stores. From a capital spend standpoint, we continue to focus the majority of our capital toward growth, which we expect will continue to drive a high return on invested capital. We also made additional progress on our commitment to return a substantial portion of the net proceeds from the sale of global products to shareholders through share repurchases. with over 170 million returned this quarter. Before Mary covers the details of our first quarter results, I'd like to share the progress we've made on the three pillars of our growth strategy. First, we continue to drive the full potential of our existing business. This quarter, we delivered 7.1% system-wide same-store sales growth, coming from both transaction and ticket growth. We also improved our margins through better labor management. Team retention rates are an important contributor to labor management. And in December, we had our lowest attrition rate since pre-COVID. Higher retention allows us to minimize recruiting and training costs, while also ensuring that our stores are well staffed with team members who have more tenure delivering our best-in-class customer experience and added services. In November, Valvoline Instant Oil Change was named number 11 on the Forbes 2024 Best Customer Service list. I'm proud that our Valvoline and franchise-operated stores have been recognized for the best-in-class customer service they provide to our guests every day, alongside companies like Chick-fil-A, who are also known for their great service. On accelerating network growth, as I mentioned, 2024 is off to a great start with 38 store additions. We continue to see a healthy mix of ground-up builds and acquisitions contributing to our growth across the system with 21 ground-up builds and 17 acquisitions this quarter. We have a robust pipeline and continue to work towards our goal of growing the network to more than 3,500 stores. and a focus on accelerating franchise growth within that. And just this week, we celebrated our 1,000th franchise store as Quality Automotive Services, or QAS, a 20-year franchise partner with us, opened a store in Raleigh, North Carolina. We also were recognized recently as the top franchisor in our category and number 27th overall and Entrepreneurs Franchise 500. We have the best franchise partners in our category and are thrilled to share this recognition with them. On our third strategic priority, we continue to see favorable contribution in same-store sales from both non-old-change revenue service penetration and our fleet business. As part of our separation from the global products business, our fleet team has implemented a new CRM system, which will enable continued growth of new fleet customers, as well as growth within our existing fleet customers portfolios. Both the NOCR service penetration and fleet continue to have long runways of opportunity for ongoing improvement. Our team is focused on delivering fiscal year 2024, while also building the capabilities that ensure continued delivery of our long-term growth algorithm. Now I'll turn it over to Mary to walk us through our Q1 financial results.