Segment Information

6 Months Ended

Jun. 25, 2022

Segment Reporting [Abstract]

Segment Information

Segment Information

The Company’s worldwide operations are comprised of the following reportable segments: Maintenance; Car Wash; Paint, Collision & Glass; and Platform Services.

In addition to the reportable segments, the Company’s consolidated financial results include “Corporate and Other” activity. Corporate and Other incurs costs related to advertising fund revenues and expenses and shared service costs, which are related to finance, information technology, human resources, legal, supply chain and other support services. Corporate and Other activity includes the adjustments necessary to eliminate intercompany transactions, namely sales by the Platform Services segment to the Paint, Collision & Glass and Maintenance segments.

Segment results for the three and six months ended June 25, 2022 and June 26, 2021 are as follows:

	Three months ended June 25, 2022
(in thousands)	Maintenance		Car Wash		Paint, Collision & Glass		Platform Services		Corporate and Other		Total
Franchise royalties and fees	$	11,326	$	—	$	23,605	$	9,919	$	—	$	44,850
Company-operated store sales	168,648		101,796		52,120		1,392		(71)		323,885
Independently-operated store sales	—		54,942		—		—		—		54,942
Advertising fund contributions	—		—		—		—		22,091		22,091
Supply and other revenue	14,331		1,841		19,715		41,891		(14,922)		62,856
Total revenue	$	194,305	$	158,579	$	95,440	$	53,202	$	7,098	$	508,624
Segment Adjusted EBITDA	$	64,076	$	53,677	$	32,916	$	20,541	$	(35,123)	$	136,087

	Three months ended June 26, 2021
(in thousands)	Maintenance		Car Wash		Paint, Collision & Glass		Platform Services		Corporate and Other		Total
Franchise royalties and fees	$	9,090	$	—	$	19,988	$	8,795	$	—	$	37,873
Company-operated store sales	126,107		65,705		13,019		1,463		(96)		206,198
Independently-operated store sales	—		56,379		—		—		—		56,379
Advertising fund contributions	—		—		—		—		19,648		19,648
Supply and other revenue	9,813		1,831		17,567		34,583		(9,064)		54,730
Total revenue	$	145,010	$	123,915	$	50,574	$	44,841	$	10,488	$	374,828
Segment Adjusted EBITDA	$	44,561	$	43,069	$	21,856	$	17,602	$	(25,845)	$	101,243

	Six months ended June 25, 2022
(in thousands)	Maintenance		Car Wash		Paint, Collision & Glass		Platform Services		Corporate and Other		Total
Franchise royalties and fees	$	20,961	$	—	$	44,970	$	16,807	$	—	$	82,738
Company-operated store sales	325,476		196,291		92,118		2,544		(153)		616,276
Independently-operated store sales	—		118,031		—		—		—		118,031
Advertising fund contributions	—		—		—		—		41,789		41,789
Supply and other revenue	26,610		3,532		37,795		77,017		(26,841)		118,113
Total revenue	$	373,047	$	317,854	$	174,883	$	96,368	$	14,795	$	976,947
Segment Adjusted EBITDA	$	116,561	$	109,397	$	61,928	$	34,706	$	(67,485)	$	255,107

	Six months ended June 26, 2021
(in thousands)	Maintenance		Car Wash		Paint, Collision & Glass		Platform Services		Corporate and Other		Total
Franchise royalties and fees	$	17,016	$	—	$	37,298	$	13,973	$	—	$	68,287
Company-operated store sales	240,174		122,753		24,949		2,446		(269)		390,053
Independently-operated store sales	—		112,542		—		—		—		112,542
Advertising fund contributions	—		—		—		—		36,903		36,903
Supply and other revenue	15,970		3,284		32,219		63,018		(18,029)		96,462
Total revenue	$	273,160	$	238,579	$	94,466	$	79,437	$	18,605	$	704,247
Segment Adjusted EBITDA	$	85,001	$	77,224	$	39,495	$	28,610	$	(50,864)	$	179,466

The reconciliations of Income (loss) before taxes to Segment Adjusted EBITDA for the three and six months ended June 25, 2022 and June 26, 2021 are as follows:

	Three months ended				Six months ended
(in thousands)	June 25, 2022		June 26, 2021		June 25, 2022		June 26, 2021
Income (loss) before taxes	$	(75,892)	$	52,179	$	(28,496)	$	27,800
Depreciation and amortization	38,087		26,423		71,110		50,275
Interest expense, net	26,270		16,612		51,623		34,702
Acquisition related costs(a)	3,338		389		7,656		2,038
Non-core items and project costs, net(b)	1,719		2,522		2,585		2,553
Store opening costs	666		405		1,172		694
Straight-line rent adjustment(c)	4,217		3,358		8,310		5,843
Equity-based compensation expense(d)	4,233		1,028		6,851		2,011
Foreign currency transaction (gain) / loss, net(e)	13,937		(5,229)		14,908		5,282
Trade name impairment(f)	125,450		—		125,450		—
Asset sale leaseback (gain) loss, impairment and closed store expenses(g)	(5,938)		3,478		(6,062)		2,692
Loss on debt extinguishment(h)	—		78		—		45,576
Segment Adjusted EBITDA	$	136,087	$	101,243	$	255,107	$	179,466

(a)     Consists of acquisition costs as reflected within the consolidated statements of operations, 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 similar costs in connection

with other acquisitions in the future and, under GAAP, such costs relating to acquisitions are expensed as incurred and not capitalized.

(b)     Consists of discrete items and project costs, including (i) third party consulting and professional fees associated with strategic transformation initiatives and (ii) other miscellaneous expenses, including non-capitalizable expenses relating to the Company’s initial public offering and other strategic transactions.

(c)     Consists of the non-cash portion of rent expense, which reflects the extent to which our straight-line rent expense recognized under GAAP exceeds or is less than our cash rent payments.

(d)     Represents non-cash equity-based compensation expense.

(e)    Represents foreign currency transaction net gains and losses primarily related to the remeasurement of our intercompany loans which are partially offset by unrealized gains and losses on remeasurement of cross currency swaps and forward contracts.

(f)     Relates to an impairment of certain Car Wash trade names for which the Company elected to discontinue their use.

(g)     Relates to (gain) loss on sale leasebacks, impairment of certain fixed assets and operating lease right-of-use assets related to closed locations. Also, represents lease exit costs and other costs associated with stores that were closed prior to the respective lease termination dates.

(h)     Represents the write-off of unamortized discount associated with the repayment of the Car Wash Senior Credit Facilities.