8-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, DC 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d)

of the Securities Exchange Act of 1934

Date of report (Date of earliest event reported): February 22, 2024

DRIVEN BRANDS HOLDINGS INC.

(Exact name of registrant as specified in its charter)

Delaware	001-39898	47-3595252
(State or other jurisdiction<br>of incorporation)	(Commission<br>File Number)	(I.R.S. Employer<br>Identification No.)

440 South Church Street, Suite 700

Charlotte, North Carolina 28202

(Address of principal executive offices) (Zip Code)

(704) 377-8855

(Registrant’s Telephone Number, Including Area Code)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the Registrant under any of the following provisions (see General Instruction A.2. below):

☐	Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
☐	Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
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☐	Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
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☐	Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
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Securities registered pursuant to Section 12(b) of the Act:

Title of each class	Trading<br>Symbol	Name of each exchange<br> <br>on which registered
Common Stock, $0.01 par value	DRVN	The Nasdaq Global Select Market

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Act of 1934 (§ 240.12b-2 of this chapter).

Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Item 2.02.	Results of Operations and Financial Condition

On February 22, 2024, Driven Brands Holdings Inc. (the “Company”) issued a press release, furnished as Exhibit 99.1, and incorporated herein by reference, announcing the Company’s financial results for the quarter and fiscal year ended December 30, 2023.

The information provided pursuant to Item 2.02, including the exhibit attached hereto, is being furnished and shall not be deemed to be “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liabilities of that section, nor shall it be deemed to be incorporated by reference in any filing under the Securities Act of 1933, as amended, or the Exchange Act, except as shall be expressly set forth by specific reference in any such filing.

Item 9.01	Financial Statements and Exhibits.

(d) Exhibits

Exhibit<br>No.	Description
99.1	Press release dated February 22, 2024
104	Cover Page Interactive Data File - the cover page XBRL tags are embedded within the Inline XBRL document

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

	DRIVEN BRANDS HOLDINGS INC.
Date: February 22, 2024	By:	/s/ Scott O’Melia
	Name:	Scott O’Melia
	Title:	Executive Vice President, General Counsel and Secretary

EX-99.1

Exhibit 99.1

Driven Brands Holdings Inc. Reports Fourth Quarter

and Fiscal Year 2023 Results

—Fiscal 2023 revenue increased 13% powered by 7% same-store sales growth and 4% net store growth—

—Achieved 12 consecutive quarters of same store sales growth—

—Issues fiscal year 2024 financial outlook—

Charlotte, N.C. (February 22, 2024) - Driven Brands Holdings Inc. (NASDAQ: DRVN) (“Driven Brands” or the “Company”) today reported financial results for the fourth quarter and fiscal year ended December 30, 2023.

Fiscal Year 2023 Highlights

For the fiscal year, Driven Brands delivered revenue of $2.3 billion, up 13% versus the prior year. System-wide sales were $6.3 billion, up 12% versus the prior year driven by 7% same-store sales growth and 4% net store growth. The Company added 183 net new stores during fiscal 2023.

During the fiscal year, the Company recognized an $851.0 million non-cash goodwill impairment in the Car Wash segment as well as $132.9 million in non-cash asset impairment charges and lease terminations. These drove a Net Loss of $745.0 million or a Net Loss of $4.53 per diluted share versus Net Income of $43.2 million or Net Income of $0.25 per diluted share in the prior year. Adjusted Net Income^1^ was $155.9 million and Adjusted EPS^1^ was $0.93, a decrease of 25% and 24%, respectively from the prior year. Adjusted EBITDA^1^ was $535.1 million, up 4% versus the prior year. Cash provided by operating activities increased 19% to $235.2 million compared to $197.2 million in the prior year.

“We are happy to announce that we delivered on our updated 2023 outlook for all financial metrics, while also pivoting our strategy and adapting to the dynamic market. In the fourth quarter, our performance was driven by strong execution in our Maintenance segment, specifically in our industry-leading Take 5 Oil Change business, and we’re encouraged by the progress made in our U.S. Glass and U.S. Car Wash businesses,” said Jonathan Fitzpatrick, President and Chief Executive Officer.

“Our goals in the second half of 2023 were to deliver on our full-year outlook and set ourselves up for a successful 2024, and we did just that. In 2024, we are focused on accelerating growth, reducing debt, and making sure that Driven has the right assets to execute on both our short- and long-term goals,” Fitzpatrick concluded.

Fourth Quarter 2023 Highlights

For the fourth quarter, Driven Brands delivered revenue of $553.7 million, up 3% versus the prior year. System-wide sales were $1.5 billion, up 3% versus the prior year driven by 4% same-store sales growth. Net Loss was $13.1 million or a Net Loss of $0.08 per diluted share versus Net Income of $27.4 million, or $0.16 per diluted share in the prior year. Adjusted Net Income was $30.7 million and Adjusted EPS was $0.19, a decrease of 27% and 24%, respectively from the prior year. Adjusted EBITDA was $129.0 million, down 1% versus the prior year.

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Fiscal Year 2023 Key Performance Indicators by Segment

	System-wide Sales(in millions)		Store Count		Same-StoreSales			Revenue<br>(in millions)		Segment AdjustedEBITDA^1^<br>(in millions)
Maintenance	$	1,899.8		1,786		9.2	%	$	960.4	$	332.8
Car Wash		591.8		1,108		(5.6	)%		597.7		143.0
Paint, Collision & Glass		3,389.6		1,888		11.4	%		500.4		141.5
Platform Services^2^		402.6		206		N/A			216.0		80.6
Corporate / Other		N/A		N/A		N/A			29.5
Total	$	6,283.7	****	4,988	****	7.4	%	$	2,304.0

Fourth Quarter 2023 Key Performance Indicators by Segment

	System-wide Sales(in millions)		Store Count		Same-StoreSales			Revenue<br>(in millions)		Segment AdjustedEBITDA^1^<br>(in millions)
Maintenance	$	470.8		1,786		4.7	%	$	246.0	$	87.5
Car Wash		131.9		1,108		(3.3	)%		133.2		31.0
Paint, Collision & Glass		835.3		1,888		6.4	%		117.0		31.7
Platform Services^2^		74.7		206		N/A			50.7		18.6
Corporate / Other		N/A		N/A		N/A			6.7
Total	$	1,512.7	****	4,988	****	3.9	%	$	553.7

Capital and Liquidity

The Company ended the fourth quarter with total liquidity of $319.0 million consisting of $176.5 million in cash and cash equivalents and $142.5 million of undrawn capacity on its variable funding securitization senior notes and revolving credit facility. This does not include the additional $135.0 million Series 2022 Class A-1 Notes that expand the Company’s variable funding note borrowing capacity when the Company elects to exercise them, assuming certain conditions continue to be met.

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Fiscal Year 2024 Outlook

Beginning in fiscal 2024, the Company changed its definitions for Adjusted Net Income, Adjusted EPS, and Adjusted EBITDA. Specifically, the Company will no longer include straight-line rent adjustments in its non-GAAP adjustments. See “Reconciliation of Non-GAAP Financial Measures” below for additional details of these changes and a reconciliation of the definitions prior to fiscal 2024 to allow for like-for-like comparisons to the new definitions for all periods presented.

The table below sets forth the Company’s fiscal year 2023 results and 2024 outlook using the revised methodology to calculate Adjusted EBITDA, and Adjusted EPS.

	2023 Results		2024 Outlook
Revenue	$	2.30 billion	~$2.35 - $2.45 billion
Adjusted EBITDA^1^	$	516.9 million	~$535 - $565 million
Adjusted EPS^1^	$	0.85	~$0.88 - $1.00

The Company also expects:

•	Same-store sales growth of 3% to 5%
•	Net new store growth of approximately 205 to 220
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•	Maintenance: approximately 165 to 185 stores of which approximately 65% will be franchise and 35%<br>company-operated
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•	Car Wash: approximately 5 to 10 stores all from the international business
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•	Paint Collision & Glass: approximately 25 to 35 stores of which approximately 85% will be franchise and<br>15% company-operated
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The Company has not included future M&A in its outlook for fiscal year 2024.

^1^	Adjusted Net Income, Adjusted EPS, and Adjusted EBITDA are non-GAAP<br>financial measures. Beginning in fiscal 2024, the company has made certain changes to how it defines these metrics that impact the comparability to prior periods. See “Reconciliation of Non-GAAP Financial<br>Measures” for additional information on changes to these non-GAAP financial measures, a reconciliation to the most comparable GAAP measures, and a reconciliation between the differences in metric<br>definitions for all periods presented. Forward-looking estimates of Adjusted EBITDA and Adjusted EPS are made in a manner consistent with the relevant definitions and assumptions noted herein.
^2^	Platform Services same store sales were removed as a Key Performance Indicator as sales included within the<br>calculation represented less than 20% of Platform Services revenue.
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Conference Call

Driven Brands will host a conference call to discuss fourth quarter and year-end 2023 results today, Thursday, February 22, 2024, at 8:30 a.m. ET. The call will be available by webcast and can be accessed by visiting Driven Brands’ Investor Relations website at investors.drivenbrands.com. A replay of the call will be available for at least three months.

About Driven Brands

Driven Brands^™^, headquartered in Charlotte, NC, is the largest automotive services company in North America, providing a range of consumer and commercial automotive needs, including paint, collision, glass, vehicle repair, oil change, maintenance and car wash. Driven Brands is the parent company of some of North America’s leading automotive service businesses including Take 5 Oil Change^®^, Take 5 Car Wash^®^, Meineke Car Care Centers^®^, Maaco^®^, 1-800-Radiator & A/C^®^, Auto Glass Now^®^, and CARSTAR^®^. Driven Brands has approximately 5,000 locations across 13 countries, and services over 70 million vehicles annually. Driven Brands’ network generates approximately $2.3 billion in annual revenue from approximately $6.3 billion in system-wide sales.

Disclosure Regarding Forward-Looking Statements

This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements are generally identified by the use of forward-looking terminology, including the terms “anticipate,” “believe,” “continue,” “could,” “estimate,” “expect,” “intend,” “likely,” “may,” “plan,” “possible,” “potential,” “predict,” “project,” “should,” “target,” “will,” “would” and, in each case, their negative or other various or comparable terminology. All statements other than statements of historical facts contained in this Press Release, including statements regarding our strategy, future operations, future financial position, future revenue, projected costs, prospects, trends, plans, objectives of management, impact of accounting standards and outlook, impairments, and expected market growth are forward-looking statements. In particular, forward-looking statements include, among other things, statements relating to: (i) our strategy, outlook and growth prospects; (ii) our operational and financial targets and dividend policy; (iii) general economic trends and trends in the industry and markets; (iv) the risks and costs associated with the integration of, and our ability to integrate, our stores and business units successfully to achieve anticipated synergies; (v) the proper application of generally accepted accounting principles, which are highly complex and involve many subjective assumptions, estimates, and judgments and (vi) the competitive environment in which we operate. Forward-looking statements are not based on historical facts, but instead represent our current expectations and assumptions regarding our business, the economy and other future conditions, and involve known and unknown risks, uncertainties and other important factors that may cause our actual results, performance, or achievements to be materially different from any future results, performance, or achievements expressed or implied by the forward-looking statements. It is not

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possible to predict or identify all such risks. These risks include, but are not limited to, the risk factors that are described under the section titled “Risk Factors” in our Annual Report on Form 10-K for the fiscal year ended December 31, 2022 as well as in our other filings with the Securities and Exchange Commission, which are available on its website at www.sec.gov. Given these uncertainties, you should not place undue reliance on these forward-looking statements.

Contacts

Shareholder/Analyst inquiries:

Dawn Francfort

ICR, Inc.

investors@drivenbrands.com

(203) 682-8200

Mediainquiries:

Taylor Blanchard

taylor.blanchard@drivenbrands.com

(704) 644-8129

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DRIVEN BRANDS HOLDINGS INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)

	Three Months Ended						Year Ended
(in thousands, except per share amounts)	December 30,2023			December 31,2022			December 30,2023			December 31,2022
Revenue:
Franchise royalties and fees	$	49,685		$	43,434		$	190,367		$	171,734
Company-operated store sales		366,668			366,921			1,526,353			1,324,408
Independently-operated store sales		38,748			36,657			196,395			195,157
Advertising contributions		25,303			23,943			98,850			87,750
Supply and other revenue		73,273			68,698			292,064			254,145
Total revenue		553,677			539,653			2,304,029			2,033,194
Operating Expenses:
Company-operated store expenses		241,741			231,894			1,004,472			812,262
Independently-operated store expenses		21,983			22,544			109,078			107,940
Advertising expenses		23,743			24,179			97,290			87,986
Supply and other expenses		40,248			35,865			158,436			145,481
Selling, general, and administrative expenses		110,957			110,821			443,112			383,478
Acquisition related costs		5,910			5,323			13,174			15,304
Store opening costs		2,057			953			5,831			2,878
Depreciation and amortization		46,040			39,528			175,296			147,156
Goodwill impairment		—			—			850,970			—
Trade name impairment		—			—			—			125,450
Asset impairment charges and lease terminations		15,453			2,745			132,903			5,655
Total operating expenses		508,132			473,852			2,990,562			1,833,590
Operating (loss) income		45,545			65,801			(686,533	)		199,604
Other expenses, net:
Interest expense, net		43,892			35,150			164,196			114,096
(Gain) loss on foreign currency transactions		(3,081	)		(13,322	)		(3,078	)		17,168
Other expense, net		40,811			21,828			161,118			131,264
(Loss) income before taxes		4,734			43,973			(847,651	)		68,340
Income tax (benefit) expense		17,883			16,575			(102,689	)		25,167
Net (loss) income		(13,149	)		27,398			(744,962	)		43,173
Net loss attributable to non-controlling interest		—			—			—			(15	)
Net (loss) income attributable to Driven Brands Holdings Inc.	$	(13,149	)	$	27,398		$	(744,962	)	$	43,188
(Loss) earnings per share:
Basic	$	(0.08	)	$	0.16		$	(4.50	)	$	0.26
Diluted	$	(0.08	)	$	0.16		$	(4.53	)	$	0.25
Weighted average shares outstanding
Basic		159,573			162,744			161,917			162,762
Diluted		159,573			166,810			161,917			166,743

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DRIVEN BRANDS HOLDINGS INC. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS (UNAUDITED)

(in thousands, except share and per share amounts)			December 31,2022
Assets
Current assets:
Cash and cash equivalents	176,522		$	227,110
Restricted cash	657			792
Accounts and notes receivable, net	151,259			179,888
Inventory	83,171			72,040
Prepaid and other assets	46,714			40,084
Income tax receivable	15,928			15,075
Assets held for sale	301,229			—
Advertising fund assets, restricted	45,627			36,421
Total current assets	821,107			571,410
Other assets	56,565			30,561
Property and equipment, net	1,438,496			1,545,738
Operating lease<br>right-of-use assets	1,389,316			1,299,189
Deferred commissions	6,312			7,121
Intangibles, net	739,402			765,903
Goodwill	1,455,946			2,277,065
Deferred tax assets	3,660			2,911
Total assets	5,910,804		$	6,499,898
Liabilities and shareholders’ equity
Current liabilities:
Accounts payable	67,526		$	60,606
Accrued expenses and other liabilities	242,171			317,318
Income tax payable	5,404			4,454
Current portion of long-term debt	32,673			32,986
Income tax receivable liability	56,001			53,328
Advertising fund liabilities	23,392			36,726
Total current liabilities	427,167			505,418
Long-term debt	2,910,812			2,705,281
Deferred tax liabilities	154,742			276,749
Operating lease liabilities	1,332,519			1,177,501
Income tax receivable liability	117,915			117,915
Deferred revenue	30,507			30,046
Long-term accrued expenses and other liabilities	30,419			33,419
Total liabilities	5,004,081			4,846,329
Preferred Stock 0.01 par value; 100,000,000 shares authorized; none issued or<br>outstanding	—			—
Common stock, 0.01 par value, 900,000,000 shares authorized: and 163,965,231 and 167,404,047<br>shares outstanding; respectively	1,640			1,674
Additional paid-in capital	1,652,401			1,628,904
Retained (deficit) earnings	(710,087	)		84,795
Accumulated other comprehensive loss	(37,875	)		(62,435	)
Total shareholders’ equity attributable to Driven Brands Holdings Inc.	906,079			1,652,938
Non-controlling interests	644			631
Total shareholders’ equity	906,723			1,653,569
Total liabilities and shareholders’ equity	5,910,804		$	6,499,898

All values are in US Dollars.

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DRIVEN BRANDS HOLDINGS INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)

	Year Ended
(in thousands)	Year endedDecember 30, 2023			Year endedDecember 31, 2022
Net (loss) income	$	(744,962	)	$	43,173
Adjustments to reconcile net (loss) income to net cash provided by operating activities:
Depreciation and amortization		175,296			147,156
Goodwill impairment		850,970			—
Trade name impairment		—			125,450
Equity-based compensation expense		15,300			20,583
(Gain) loss on foreign denominated transactions		(2,022	)		17,147
(Gain) loss on foreign currency derivatives		(1,056	)		21
Loss (gain) on sale and disposal of businesses, fixed assets, and sale-leaseback<br>transactions		4,909			(34,854	)
Reclassification of interest rate hedge to income		(2,077	)		(542	)
Bad debt expense		1,938			5,777
Asset impairment costs		132,903			5,655
Amortization of deferred financing costs and bond discounts		10,307			8,450
Benefit for deferred income taxes		(125,804	)		20,567
Other, net		24,243			(21	)
Changes in assets and liabilities, net of acquisitions:
Accounts and notes receivable, net		13,561			(58,837	)
Inventory		(11,731	)		(22,712	)
Prepaid and other assets		(6,877	)		(30,418	)
Advertising fund assets and liabilities, restricted		(16,861	)		12,698
Other Assets		(39,814	)		(23,378	)
Deferred commissions		418			3,407
Deferred revenue		1,937			1,925
Accounts payable		7,390			(34,634	)
Accrued expenses and other liabilities		(52,854	)		2,898
Income tax receivable		53			(12,335	)
Cash provided by operating activities		235,167			197,176
Cash flows from investing activities:
Capital expenditures		(596,478	)		(436,205	)
Cash used in business acquisitions, net of cash acquired		(59,574	)		(763,061	)
Proceeds from sale-leaseback transactions		194,658			333,798
Proceeds from sale or disposal of businesses and fixed assets		9,987			25,188
Cash used in investing activities		(451,407	)		(840,280	)
Cash flows from financing activities:
Payment of debt extinguishment and issuance costs		—			(7,172	)
Proceeds from the issuance of long-term debt		—			365,000
Repayment of long-term debt		(27,971	)		(23,912	)
Proceeds from revolving lines of credit and short-term debt		378,000			435,000
Repayments of revolving lines of credit and short-term debt		(130,000	)		(435,000	)
Repayment of principal portion of finance lease liability		(5,165	)		(3,369	)
Share repurchases		(49,956	)		—
Purchase of equity securities		(224	)		—
Proceeds from the termination of interest rate swap		—			10,870
Stock option exercises		6,117			340
Other, net		(102	)		1,611
Cash provided by financing activities		170,699			343,368
Effect of exchange rate changes on cash		484			(2,283	)

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Net change in cash, cash equivalents, restricted cash, and cash included in advertising fundassets, restricted		(45,057	)		(302,019	)
Cash and cash equivalents, beginning of period		227,110			523,414
Cash included in advertising fund assets, restricted, beginning of period		32,871			38,586
Restricted cash, beginning of period		792			792
Cash, cash equivalents, restricted cash, and cash included in advertising fund assets,restricted, beginning of period		260,773			562,792
Cash and cash equivalents, end of period		176,522			227,110
Cash included in advertising fund assets, restricted, end of period		38,537			32,871
Restricted cash, end of period		657			792
Cash, cash equivalents, restricted cash, and cash included in advertising fund assets,restricted, end of period	$	215,716		$	260,773

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RECONCILIATION OF NON-GAAP FINANCIAL MEASURES

The following information provides definitions and reconciliations of the non-GAAP financial measures presented in this earnings release to the most directly comparable financial measures calculated and presented in accordance with generally accepted accounting principles (GAAP). The Company has provided this non-GAAP financial information, which is not calculated or presented in accordance with GAAP, as information supplemental and in addition to the financial measures presented in this earnings release that are calculated and presented in accordance with GAAP. Such non-GAAP financial measures should not be considered superior to, as a substitute for or alternative to, and should be considered in conjunction with, the GAAP financial measures presented in this earnings release. The non-GAAP financial measures in this earnings release may differ from similarly titled measures used by other companies.

Non-GAAP Financial Measures in Outlook

Driven Brands includes Adjusted Earnings Before Interest, Tax, Depreciation and Amortization (“Adjusted EBITDA”) and Adjusted Earnings per Share (“Adjusted EPS”) in the Company’s Fiscal Year 2024 Outlook. Adjusted EBITDA and Adjusted EPS are non-GAAP financial measures and have not been reconciled to the most comparable GAAP financial measures because it is not possible to do so without unreasonable efforts due to the uncertainty and potential variability of reconciling items, which are dependent on future events and often outside of management’s control and which could be significant. Because such items cannot be reasonably predicted with the level of precision required, we are unable to provide an outlook for the comparable GAAP measures. Forward-looking estimates of Adjusted EBITDA and Adjusted EPS are made in a manner consistent with the relevant definitions and assumptions noted herein and in our filings with the SEC.

Changes in Non-GAAP Definitions and Fiscal 2024 Outlook

Beginning in fiscal 2024, the Company has made certain changes to its definitions for Adjusted net income attributable to Driven Brands Holdings Inc. (“Adjusted Net Income”), Adjusted EPS, and Adjusted EBITDA, that impact the comparability of the metrics to prior periods. Specifically, the Company will no longer include straight-line rent adjustments in its non-GAAP adjustments. Accordingly, the Company’s 2024 Adjusted EBITDA and Adjusted EPS outlook reflects the Company’s updated definition of Adjusted EBITDA and Adjusted EPS. See “Reconciliation of Non-GAAP Financial Measures” below for a reconciliation of the definitions prior to fiscal 2024 to allow for like-for-like comparisons to the new definitions for all periods presented.

Adjusted Net Income andAdjusted Earnings Per Share

Adjusted Net Income and Adjusted EPS are considered non-GAAP financial measures under the SEC’s rules because they exclude certain amounts included in the net income attributable to Driven Brands common stockholders and diluted earnings per share attributable to Driven Brands common stockholders calculated in accordance with GAAP. Management believes that Adjusted Net Income and Adjusted EPS are meaningful measures to share with investors because they facilitate comparison of the current period performance with that of the comparable prior period. In addition, Adjusted Net Income and Adjusted EPS afford investors a view of what management considers to be Driven Brands’ core earnings performance as well as the ability to make a more informed assessment of such earnings performance with that of the prior period.

The tables below reflect the calculation of Adjusted Net Income and Adjusted Earnings Per Share for the three months and year ended December 30, 2023, compared to the three months and year ended December 31, 2022.

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Net (Loss) Income to Adjusted Net Income and Adjusted Earnings Per Share (Unaudited)

	Three months ended						Year Ended
(in thousands, except per share amounts)	December 30,2023			December 31,2022			December 30,2023			December 31,2022
Net (loss) income	$	(13,149	)	$	27,398		$	(744,962	)	$	43,173
Acquisition related costs^(a)^		5,910			5,323			13,174			15,304
Non-core items and project costs, net^(b)^		1,230			16,805			7,343			20,241
Straight-line rent adjustment^(c)^		4,022			3,435			18,218			14,965
Cloud computing amortization^(d)^		932			—			1,923			—
Equity-based compensation expense^(e)^		5,570			8,424			15,300			20,583
Foreign currency transaction (gain) loss,<br>net^(f)^		(3,081	)		(13,322	)		(3,078	)		17,168
Bad debt recovery^(g)^		—			—			—			(449	)
Goodwill impairment^(h)^		—			—			850,970			—
Trade name impairment^(i)^		—			—			—			125,450
Asset sale leaseback (gain) loss, impairment and closed store expenses^(j)^		19,777			(8,835	)		139,414			(29,083	)
Amortization related to acquired intangible<br>assets^(k)^		5,192			8,775			28,756			27,059
Provision for uncertain tax<br>positions^(l)^		(354	)		(224	)		(354	)		(148	)
Valuation allowance for deferred tax<br>asset^(m)^		17,729			3,051			17,729			3,051
Adjusted net income before tax impact of adjustments		43,778			50,830			344,433			257,314
Tax impact of adjustments^(n)^		(13,092	)		(8,641	)		(188,544	)		(49,437	)
Adjusted net income		30,686			42,189			155,889			207,877
Net loss attributable to non-controlling interest		—			—			—			(15	)
Adjusted Net Income attributable to Driven Brands Holdings Inc., as defined through fiscal2023	$	30,686	****	$	42,189	****	$	155,889	****	$	207,892	****
Straight-line rent adjustment^(c)^	$	(4,022	)	$	(3,435	)	$	(18,218	)	$	(14,965	)
Income tax effect of above item	$	1,121		$	1,043		$	4,790		$	3,870
Adjusted Net Income attributable to Driven Brands Holdings Inc., as defined beginning fiscal2024	$	27,785	****	$	39,797	****	$	142,461	****	$	196,797	****
Adjusted Earnings Per Share, as defined through fiscal 2023
Basic^1^	$	0.19		$	0.25		$	0.94		$	1.25
Diluted^1^	$	0.19		$	0.25		$	0.93		$	1.22
Adjusted Earnings Per Share, as defined beginning fiscal 2024
Basic^1^	$	0.17		$	0.24		$	0.86		$	1.18
Diluted^1^	$	0.17		$	0.23		$	0.85		$	1.16
Weighted average shares outstanding
Basic		159,573			162,744			161,917			162,762
Diluted		161,361			166,810			164,100			166,743
(1)	Adjusted Earnings Per Share is calculated under the two-class method.<br>Under the two-class method, adjusted earnings per share is calculated using adjusted net income attributable to common shares, which is derived by reducing adjusted net income by the amount attributable to<br>participating securities. Adjusted Net Income attributable to participating securities used in the basic earnings per share calculation was less than $1 million and $3 million for the three months and year ended December 30, 2023,<br>respectively, and Adjusted Net Income attributable to participating securities used in the diluted earnings per share calculation was less than $1 million and $2 million for the three months and year ended December 30, 2023,<br>respectively.
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11

Adjusted EBITDA

Adjusted EBITDA is considered a non-GAAP financial measure under the Securities and Exchange Commission’s (“SEC”) rules because it excludes certain amounts included in net income calculated in accordance with GAAP. Management believes that Adjusted EBITDA is a meaningful measure to share with investors because it facilitates comparison of the current period performance with that of the comparable prior period. In addition, Adjusted EBITDA affords investors a view of what management considers to be Driven Brand’s core operating performance as well as the ability to make a more informed assessment of such operating performance as compared with that of the prior period.

Please see the company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2022, filed with the SEC on March 1, 2023, for additional information on Adjusted EBITDA. The tables below reflect the calculation of Adjusted EBITDA for the three months and year ended December 30, 2023, compared to the three months and year ended December 31, 2022.

12

Net Income (Loss) to Adjusted EBITDA Reconciliation (Unaudited)

	Three months ended						Year Ended
(in thousands)	December 30,2023			December 31,2022			December 30,2023			December 31,2022
Net (loss) income	$	(13,149	)	$	27,398		$	(744,962	)	$	43,173
Income tax (benefit) expense		17,883			16,575			(102,689	)		25,167
Interest expense, net		43,892			35,150			164,196			114,096
Depreciation and amortization		46,040			39,528			175,296			147,156
EBITDA	****	94,666	****	****	118,651	****	****	(508,159	)	****	329,592	****
Acquisition related costs^(a)^		5,910			5,323			13,174			15,304
Non-core items and project costs, net^(b)^		1,230			16,805			7,343			20,241
Straight-line rent adjustment^(c)^		4,022			3,435			18,218			14,965
Cloud computing amortization^(d)^		932			—			1,923			—
Equity-based compensation expense^(e)^		5,570			8,424			15,300			20,583
Foreign currency transaction (gain) loss,<br>net^(f)^		(3,081	)		(13,322	)		(3,078	)		17,168
Bad debt recovery^(g)^		—			—			—			(449	)
Goodwill impairment^(h)^		—			—			850,970			—
Trade name impairment^(i)^		—			—			—			125,450
Asset sale leaseback (gain) loss, impairment and closed store expenses^(j)^		19,777			(8,835	)		139,414			(29,083	)
Adjusted EBITDA, as defined through fiscal 2023	$	129,026	****	$	130,481	****	$	535,105	****	$	513,771	****
Straight-line rent adjustment^(c)^	$	(4,022	)	$	(3,435	)	$	(18,218	)	$	(14,965	)
Adjusted EBITDA, as defined beginning fiscal 2024	$	125,004	****	$	127,046	****	$	516,887	****	$	498,806	****

13

Adjusted EBITDA, Adjusted Net Income and Adjusted Earnings Per Share Footnotes

^(a)^	Consists of acquisition costs as reflected within the unaudited consolidated statements of operations,<br>including legal, consulting and other fees, and expenses incurred in connection with acquisitions completed during the applicable period, as well as inventory rationalization expenses incurred in connection with acquisitions. We expect to incur<br>similar costs in connection with other acquisitions in the future and, under U.S. GAAP, such costs relating to acquisitions are expensed as incurred and not capitalized.
^(b)^	Consists of discrete items and project costs, including third party consulting and professional fees associated<br>with strategic transformation initiatives as well as non-recurring payroll-related costs. A $15 million change in estimate related to the Tax Receivable Agreement that we entered into at the IPO related<br>to the filing of our 2021 tax returns was recorded in the fourth quarter of 2022.
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^(c)^	Consists of the non-cash portion of rent expense, which reflects the<br>extent to which our straight-line rent expense recognized under U.S. GAAP exceeds or is less than our cash rent payments.
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^(d)^	Includes non-cash amortization expenses relating to the amortization of<br>cloud computing arrangements.
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^(e)^	Represents non-cash equity-based compensation expense.<br>
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^(f)^	Represents foreign currency transaction (gains) losses, net that primarily related to the remeasurement of our<br>intercompany loans as well as unrealized gains and losses on remeasurement of cross currency swaps and forward contracts.
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^(g)^	Represents the recovery of previously uncollectible receivables outside of normal operations.<br>
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^(h)^	Relates to goodwill impairment charges within the Car Wash segment.
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^(i)^	Certain indefinite-lived Car Wash trade names were impaired as the Company elected to discontinue their use.<br>
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^(j)^	Relates to (gains) losses, net on sale leasebacks, impairment of certain fixed assets and operating lease right-of-use assets related to closed and underperforming locations, assets held for sale, and lease exit costs and other costs associated with stores that were closed prior<br>to the respective lease termination dates.
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^(k)^	Consists of amortization related to acquired intangible assets as reflected within depreciation and<br>amortization in the unaudited consolidated statements of operations.
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^(l)^	Represents uncertain tax positions recorded for tax positions, inclusive of interest and penalties.<br>
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^(m)^	Represents valuation allowances on income tax carryforwards in certain domestic and foreign jurisdictions that<br>are not more likely than not to be realized
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^(n)^	Represents the tax impact of adjustments associated with the reconciling items between net income and Adjusted<br>Net Income, excluding the provision for uncertain tax positions. To determine the tax impact of the deductible reconciling items, we utilized statutory income tax rates ranging from 9% to 36% depending upon the tax attributes of each adjustment and<br>the applicable jurisdiction.
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14

DRIVEN BRANDS HOLDINGS INC. AND SUBSIDIARIES

ADJUSTED EBITDA AND SEGMENT ADJUSTED EBITDA RECONCILIATION (UNAUDITED)

	Three months ended						Year Ended
(in thousands)	December 30,2023			December 31,2022			December 30,2023			December 31,2022
Segment Adjusted EBITDA:
Maintenance	$	87,549		$	77,284		$	332,781		$	262,608
Car Wash		31,042			36,222			143,043			184,717
Paint, Collision & Glass		31,745			34,600			141,469			135,447
Platform Services		18,586			18,067			80,570			72,538
Corporate and other		(37,839	)		(34,739	)		(156,927	)		(138,661	)
Store opening costs		(2,057	)		(953	)		(5,831	)		(2,878	)
Adjusted EBITDA, as defined through fiscal 2023	$	129,026		$	130,481		$	535,105		$	513,771
	Three months ended						Year Ended
(in thousands)	December 30,2023			December 31,2022			December 30,2023			December 31,2022
Segment Adjusted EBITDA:
Maintenance	$	86,969		$	76,433		$	329,498		$	258,470
Car Wash		27,694			33,824			128,996			175,326
Paint, Collision & Glass		31,519			34,474			140,569			134,818
Platform Services		18,569			18,034			80,492			72,383
Corporate and other		(37,690	)		(34,766	)		(156,837	)		(139,313	)
Store opening costs		(2,057	)		(953	)		(5,831	)		(2,878	)
Adjusted EBITDA, as defined beginning fiscal2024^(1)^	$	125,004		$	127,046		$	516,887		$	498,806
^(1)^	For the three months ended April 1, 2023; July 1, 2023; and September 30, 2023, the Adjusted<br>EBITDA, as defined beginning fiscal 2024, would have been $123,463; $146,370; and $122,049, respectively.
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15

DRIVEN BRANDS HOLDINGS INC. AND SUBSIDIARIES

ADDITIONAL INFORMATION ON KEY PERFORMANCE INDICATORS (UNAUDITED)

	Three months ended December 30, 2023
(in thousands)	Maintenance		Car Wash		Paint,<br>Collision &<br>Glass		Platform<br>Services		Total
System-wide Sales
Franchise stores	$	266,801	$	—	$	766,717	$	73,778	$	1,107,296
Company-operated stores		203,963		93,164		68,632		909		366,668
Independently operated stores		—		38,748		—		—		38,748
Total System-wide Sales	$	470,764	$	131,912	$	835,349	$	74,687	$	1,512,712
Store Count (in whole numbers)
Franchise stores		1,134		—		1,647		205		2,986
Company-operated stores		652		391		241		1		1,285
Independently operated stores		—		717		—		—		717
Total Store Count		1,786		1,108		1,888		206		4,988
	Three months ended December 31, 2022
(in thousands)	Maintenance		Car Wash		Paint,<br>Collision &<br>Glass		Platform<br>Services		Total
System-wide Sales
Franchise stores	$	253,074	$	—	$	719,646	$	91,801	$	1,064,521
Company-operated stores		195,309		95,976		74,576		1,060		366,921
Independently operated stores		—		36,657		—		—		36,657
Total System-wide Sales	$	448,383	$	132,633	$	794,222	$	92,861	$	1,468,099
Store Count (in whole numbers)
Franchise stores		1,052		—		1,628		202		2,882
Company-operated stores		593		390		218		1		1,202
Independently operated stores		—		721		—		—		721
Total Store Count		1,645		1,111		1,846		203		4,805

16

DRIVEN BRANDS HOLDINGS INC. AND SUBSIDIARIES

ADDITIONAL INFORMATION ON KEY PERFORMANCE INDICATORS (UNAUDITED)

	Year ended December 30, 2023
(in thousands)	Maintenance		Car Wash		Paint,<br>Collision &<br>Glass		Platform<br>Services		Total
System-wide Sales
Franchise stores	$	1,090,457	$	—	$	3,072,137	$	398,386	$	4,560,980
Company-operated stores		809,356		395,357		317,428		4,212		1,526,353
Independently operated stores		—		196,395		—		—		196,395
Total System-wide Sales	$	1,899,813	$	591,752	$	3,389,565	$	402,598	$	6,283,728
Store Count (in whole numbers)
Franchise stores		1,134		—		1,647		205		2,986
Company-operated stores		652		391		241		1		1,285
Independently operated stores		—		717		—		—		717
Total Store Count		1,786		1,108		1,888		206		4,988
	Year ended December 31, 2022
(in thousands)	Maintenance		Car Wash		Paint,<br>Collision &<br>Glass		Platform<br>Services		Total
System-wide Sales
Franchise stores	$	923,153	$	—	$	2,723,047	$	440,691	$	4,086,891
Company-operated stores		692,947		390,502		235,924	$	5,035		1,324,408
Independently operated stores		—		195,157		—		—		195,157
Total System-wide Sales	$	1,616,100	$	585,659	$	2,958,971	$	445,726	$	5,606,456
Store Count (in whole numbers)
Franchise stores		1,052		—		1,628		202		2,882
Company-operated stores		593		390		218		1		1,202
Independently operated stores		—		721		—		—		721
Total Store Count		1,645		1,111		1,846		203		4,805

17