Segment Information

9 Months Ended

Sep. 30, 2023

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 nine months ended September 30, 2023 and September 24, 2022 are as follows:

	Three months ended September 30, 2023
(in thousands)	Maintenance		Car Wash		Paint, Collision & Glass		Platform Services		Corporate and Other		Total
Franchise royalties and fees	$	14,566	$	—	$	23,799	$	8,997	$	—	$	47,362
Company-operated store sales	204,460		98,132		85,207		1,242		—		389,041
Independently-operated store sales	—		43,582		—		—		—		43,582
Advertising fund contributions	—		—		—		—		27,121		27,121
Supply and other revenue	25,333		1,099		20,408		45,695		(18,607)		73,928
Total revenue	$	244,359	$	142,813	$	129,414	$	55,934	$	8,514	$	581,034
Segment Adjusted EBITDA	$	86,493	$	24,429	$	32,763	$	22,417	$	(37,487)	$	128,615

	Three months ended September 24, 2022
(in thousands)	Maintenance		Car Wash		Paint, Collision & Glass		Platform Services		Corporate and Other		Total
Franchise royalties and fees	$	11,625	$	—	$	24,055	$	9,882	$	—	$	45,562
Company-operated store sales	172,162		98,235		69,383		1,431		—		341,211
Independently-operated store sales	—		40,469		—		—		—		40,469
Advertising fund contributions	—		—		—		—		22,018		22,018
Supply and other revenue	17,035		1,599		19,782		40,686		(11,768)		67,334
Total revenue	$	200,822	$	140,303	$	113,220	$	51,999	$	10,250	$	516,594
Segment Adjusted EBITDA	$	68,763	$	39,098	$	38,919	$	19,765	$	(36,437)	$	130,108

	Nine months ended September 30, 2023
(in thousands)	Maintenance		Car Wash		Paint, Collision & Glass		Platform Services		Corporate and Other		Total
Franchise royalties and fees	$	41,224	$	—	$	74,627	$	24,831	$	—	$	140,682
Company-operated store sales	605,393		302,193		248,796		3,303		—		1,159,685
Independently-operated store sales	—		157,647		—		—		—		157,647
Advertising fund contributions	—		—		—		—		73,547		73,547
Supply and other revenue	67,737		4,708		59,952		137,171		(50,777)		218,791
Total revenue	$	714,354	$	464,548	$	383,375	$	165,305	$	22,770	$	1,750,352
Segment Adjusted EBITDA	$	245,232	$	112,001	$	109,724	$	61,984	$	(119,088)	$	409,853

	Nine months ended September 24, 2022
(in thousands)	Maintenance		Car Wash		Paint, Collision & Glass		Platform Services		Corporate and Other		Total
Franchise royalties and fees	$	32,586	$	—	$	69,025	$	26,689	$	—	$	128,300
Company-operated store sales	497,638		294,526		161,348		3,975		—		957,487
Independently-operated store sales	—		158,500		—		—		—		158,500
Advertising fund contributions	—		—		—		—		63,807		63,807
Supply and other revenue	43,645		5,131		57,577		117,704		(38,610)		185,447
Total revenue	$	573,869	$	458,157	$	287,950	$	148,368	$	25,197	$	1,493,541
Segment Adjusted EBITDA	$	185,324	$	148,495	$	100,847	$	54,471	$	(103,922)	$	385,215

The reconciliations of Income before taxes to Segment Adjusted EBITDA for the three and nine months ended September 30, 2023 and September 24, 2022 are as follows:

	Three Months Ended				Nine Months Ended
(in thousands)	September 30, 2023		September 24, 2022		September 30, 2023		September 24, 2022
(Loss) income before taxes	$	(951,129)	$	52,863	$	(852,385)	$	24,367
Depreciation and amortization	45,639		36,518		129,256		107,628
Interest expense, net	41,292		27,323		120,304		78,946
Acquisition related costs(a)	1,667		2,325		7,264		9,981
Non-core items and project costs, net(b)	1,486		851		6,113		3,436
Store opening costs	1,372		753		3,774		1,925
Straight-line rent adjustment(c)	5,193		3,220		14,196		11,530
Cloud computing amortization(d)	991		—		991		—
Equity-based compensation expense(e)	2,681		5,308		9,730		12,159
Foreign currency transaction loss, net(f)	2,980		15,582		3		30,490
Bad debt expense(g)	—		(449)		—		(449)
Goodwill impairment(h)	850,970		—		850,970		—
Trade name impairment(i)	—		—		—		125,450
Asset sale leaseback (gain) loss, impairment and closed store expenses(j)	125,473		(14,186)		119,637		(20,248)
Segment Adjusted EBITDA	$	128,615	$	130,108	$	409,853	$	385,215

(a)     Consists of acquisition costs as reflected within the unaudited 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 U.S. GAAP, such costs relating to acquisitions are expensed as incurred.

(b)     Consists of discrete items and project costs, including third party consulting and professional fees associated with strategic transformation initiatives as well as non-recurring payroll-related costs.

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

(d) Includes non-cash amortization expenses relating cloud computing arrangements.

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

(f)    Represents foreign currency transaction (gains) losses, net that 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.

(g)    Represents the recovery of previously uncollectible receivables outside of normal operations.

(h) Relates to a goodwill impairment within the Car Wash segment. Refer to Note 6 for additional information.

(i)     Certain indefinite lived Car Wash trade names were impaired as the Company elected to discontinue their use. Refer to Note 6 for additional information.

(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 to the respective lease termination dates. Refer to Note 6 for additional information.