Valvoline Inc.

everyone. And thank you for joining the Valvoline's first quarter 2025 earnings conference call and webcast. My name is Marie and I will be coordinating your call today. During the presentation, you can register a question by pressing star followed by one on your telephone keypad. And if you change your mind, please press star followed by two. I will now hand over to your host, Elizabeth Clevenger of Investor Relations to begin. Please go ahead.

Thank you. Good morning, and welcome to Babbling's first quarter fiscal 2025 conference call and webcast. This morning, Babbling released results for the first quarter ended December 31st, 2024. This presentation should be viewed in conjunction with that earnings release, a copy of which is available on our investor relations website at investors.babbling.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 Sleeve, our president and CEO, and Mary Michaelsberger, 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 presentation and are subject to certain risks and uncertainties that may cause actual results to differ materially from such statements. Badland 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 GAAP to adjusted non-GAAP results. 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. With that, I will turn it over to Lori.

Thanks, Elizabeth, and thank you all for joining us today. Let's start with a look at our first quarter highlights on slide three. We delivered financial results substantially in line with our expectations for the quarter. Our system-wide store sales grew 14% to $820 million, and our same store sales growth for the quarter was 8%. Net sales increased 11% to $414 million, and adjusted EBITDA increased 14% to $103 million. We had a good quarter of new store additions, delivering 35 net new stores across the network. In addition, we closed our recently announced re-franchising effort in Central and West Texas, transferring 39 stores to a new franchise partner. This re-franchising transaction, along with the two we completed in Q4, give us great momentum to develop these markets significantly faster than we otherwise would have while delivering long-term value to shareholders. Now let's turn to an update on our strategic priorities. We remain focused on three priorities, driving full potential in the existing business, accelerating network growth, and targeting customer and service expansion. Actions across these three areas will enable us to deliver strong financial growth and best in class returns. The highlight of this past quarter was our two annual meetings where we brought together our company operations team and our franchise partners. These events are a time for us to celebrate the progress we've made, align our focus for the coming year, and provide training that can be taken back to the stores. The theme for both meetings this year was Elevate, as we look to elevate our performance in all aspects of the business. At our company meeting, which we call our family reunion, we hosted our service center managers from across the United States and Canada. with our field operations management and key support team members. We recognize team members who have 20 or more years with the company. We celebrated our first company store to surpass 5 million in annual sales. And we recognize the stores and markets with the highest customer satisfaction scores and the highest employee retention. The most impactful training sessions were focused on customer experience and employee engagement. key drivers of successful business performance and growth. On customer experience, we continue to focus on how to educate our guests on the services their vehicles require without making a heavy sales push. Our session called Boomtown was focused on behaviors, opportunities, ownership, and mindset, or BOOM, to grow the ticket in the right way. The training needs to be memorable and fun, so the information can make its way back into our stores. Our investment in this training has a huge payback, as seen by the increase in our non-oil change services growth. In Q1, non-oil change revenue was again a significant contributor to ticket growth, and we see a continued runway as our teams focus on improving the presentation of these services to educate guests. On employee engagement, we provided our store managers the tools to attract, train, and develop their teams, and ultimately retain them. We have seen our retention rates improve significantly post-COVID, with the trailing 12-month retention once again decreasing as we close the first quarter. Our effective training, which starts with a 270-hour program for all technicians, helps employees feel confident in delivering our services to guests. And we also see stronger performance in vehicles served per day and non-old change revenue service penetration in the stores with longer tenured employees. At our annual franchise workshop, we were joined by partners representing over 90% of our franchise stores, including all of the partners who've recently joined our network. The engagement of our franchise community has never been higher. A significant focus of our time with franchisees was around development as we worked towards our target of a 3,500-plus store network. With the development commitments that all of our large franchisees have made, we were focused on how to continue to build a robust pipeline. We spent time on our real estate analytics tools and how they could be further leveraged to assess new build locations. And we discussed how to convert the pipeline of acquisition targets. Our business development team has been successful engaging with nearly 4,000 independent QuickLoop operators to identify attractive acquisition targets. Those targets span both company and franchise geographies. So our focus was on how to transfer and convert the opportunities within the franchise territories. But before we move on to look at our financials, I'd like to congratulate our franchise team on the recent recognitions our brand received from both entrepreneur and franchise times. We were recognized as the leading automotive services retailer and number 24 overall on the entrepreneur franchise 500 list for 2025. This recognition is a testament to the quality of our operating model and our franchise partners. Getting to spend time with our teams was a great way to kick off fiscal 2025. I'd like to thank our team members and franchise partners for their work to start this fiscal year strong. The talents and capabilities of both our franchisees and team members truly differentiates our brand and provides a meaningful competitive advantage for Valvoline. Now I'll turn it over to Mary to look at our financial results.