- Sale of the Global Products business remains on track with
closing expected in early calendar year 2023 with $1.6 billion of the net cash proceeds expected to
be returned via share repurchases in the 18 months following
close
- Sales from continuing operations of $332.8 million grew 16%, while system-wide same
store sales (SSS) increased 11.9%
- Reported income from continuing operations of $27.0 million declined 21% and earnings per
diluted share (EPS) of $0.15
decreased 21%1
- Continuing operations adjusted EPS of $0.16 was flat and adjusted EBITDA of
$73.3 million increased 1%
- Net store additions total 31 (23 company-operated and 8
franchised) bringing total system-wide stores to 1,746; focused on
continued growth to long-term goal of 3,500+ store count
- Reaffirming fiscal 2023 guidance for continuing operations
adjusted EBITDA of $370 million -
$390 million
LEXINGTON, Ky., Feb. 7, 2023
/PRNewswire/ -- Valvoline Inc. (NYSE: VVV), a trusted leader
in preventive automotive maintenance delivering quick and
convenient service, today reported financial results for its first
fiscal quarter ended December 31, 2022. All comparisons in
this press release are made to the same prior-year period unless
otherwise noted.
"Valvoline's opportunity to drive long-term value to
shareholders by growing system-wide store sales, increasing units
through both company-operated and franchised additions, and
focusing on incremental services remains strong," said Sam Mitchell, CEO. "As demonstrated by 17%
growth in system-wide store sales, we continue to see significant
strength and resiliency in our preventive maintenance service
model."
_________________________________
|
1 Refer to
Table 6 for details of certain non-operational key items that
impacted GAAP results.
|
Continuing Operations - Operating Results
"As expected, we saw robust same store sales growth across our
system driven primarily by ticket and aided by continued gains in
vehicles served," said Lori Flees,
President, Retail Services. "The strength of top-line growth,
along with meaningful increases in non-oil change revenue give us
continued confidence in our sales outlook for the year."
"The first quarter saw lower year over year EBITDA margins due
to cost inflation and a higher relative weighting of company
operations. Given actions have been taken to mitigate the cost
inflation, the full year outlook remains on track," continued
Flees. "Our store team members did an outstanding job of delivering
on our customer promise despite challenging weather in December
across the system. The pipeline for unit development remains
healthy for the upcoming quarters with planned franchise openings
anticipated to accelerate."
(In
millions)
|
Q1 results
|
YoY growth
(decline)
|
Net revenues
|
$
332.8
|
15.8 %
|
Operating
income
|
$
29.3
|
(43.7) %
|
Adjusted EBITDA
(a)
|
$
73.3
|
1.2 %
|
System-wide stores
(a)
|
1,746
|
6.8 %
|
Company-operated
stores
|
813
|
10.2 %
|
Franchised
stores
|
933
|
4.0 %
|
System-wide store sales
(a)
|
$
644.0
|
16.9 %
|
|
YoY growth
|
System-wide SSS
(a)
|
11.9 %
|
|
|
(a)
|
Refer to Key Business
Measures, Use of Non-GAAP Measures, Table 4 - Retail Stores
Operating Information, and Table 7 - Non-GAAP Reconciliation -
Adjusted EBITDA from Continuing Operations for management's
definitions of the metrics presented above and reconciliation to
the corresponding GAAP measures, where applicable.
|
Balance Sheet and Cash Flow
- Total debt and net debt of approximately $1.9 billion each
- Continuing operations cash flow from operations of $48.5 million and free cash flow of $8.6 million
- Returned $109.2 million in cash
to shareholders via share repurchases and dividends
Outlook
"Although the first quarter brought comparisons to a very strong
first quarter of 2022, we anticipate accelerated earnings
growth in the balance of fiscal 2023," said Mitchell. "With
the combination of same-store sales and unit increases, we continue
to expect 14% to 18% top line growth and to deliver adjusted EBITDA
of $370 million to $390 million
for fiscal 2023."
"With the anticipated closing of the sale of the Global
Products business, we are excited to focus on driving growth and
increasing value of the new Valvoline," continued Mitchell.
"The long-term model of increasing same-store sales; expanding our
store network, including an increased focus on accelerating
franchise growth; and developing new services for an evolving car
parc will allow us to grow, while consistently returning value to
shareholders through an enhanced capital structure."
The Company's outlook for fiscal 2023 is unchanged.
Information is provided in the table below:
|
Fiscal 2023
Outlook
|
System-wide SSS
growth
|
8
|
—
|
12 %
|
System-wide store
additions
|
130
|
—
|
160
|
Company-operated
|
80
|
—
|
90
|
Franchised
|
50
|
—
|
70
|
System-wide store sales
growth
|
16
|
—
|
20 %
|
Net revenues
|
$1.4
|
—
|
$1.5 billion
|
Net revenues
growth
|
14
|
—
|
18 %
|
Adjusted
EBITDA
|
$370
|
—
|
$390 million
|
Capital
expenditures
|
$170
|
—
|
$200 million
|
Adjusted effective tax
rate
|
25.5
|
—
|
26.5 %
|
Adjusted net
income
|
$160
|
—
|
$180 million
|
Valvoline's outlook for adjusted EBITDA, adjusted net income,
and the adjusted effective tax rate are non-GAAP financial measures
that are expected to be impacted by items affecting comparability.
Valvoline is unable to reconcile these forward-looking non-GAAP
financial measures to the comparable GAAP measures estimated for
fiscal 2023 without unreasonable efforts, as the Company is
currently unable to predict with a reasonable degree of certainty
the type and extent of certain items that would be expected to
impact these GAAP measures in fiscal 2023 but would not impact
non-GAAP adjusted results.
Conference Call Webcast
Valvoline will host a live audio webcast of its fiscal first
quarter 2023 conference call at 9 a.m. ET on Tuesday,
February 7, 2023. The webcast and supporting materials will be
accessible through Valvoline's website at
http://investors.valvoline.com. Following the live event, an
archived version of the webcast and supporting materials will be
available.
Key Business Measures
Valvoline tracks its operating performance and manages its
business using certain key measures, including system-wide,
company-operated and franchised store counts and SSS; and
system-wide store sales. Management believes these measures are
useful to evaluating and understanding Valvoline's operating
performance and should be considered as supplements to, not
substitutes for, Valvoline's sales and operating income, as
determined in accordance with U.S. GAAP.
Net revenues are influenced by the number of service center
stores and the business performance of those stores. Stores are
considered open upon acquisition or opening for business. Temporary
store closings remain in the respective store counts with only
permanent store closures reflected in the activity and end of
period store counts. SSS is defined as net revenues by U.S. stores
(company-operated, franchised and the combination of these for
system-wide SSS), with new stores, including franchised
conversions, excluded from the metric until the completion of their
first full fiscal year in operation as this period is generally
required for new store sales levels to begin to normalize.
Net revenues are limited to sales at company-operated stores, in
addition to royalties and other fees from independent franchised
and Express Care stores. Although Valvoline does not recognize
store-level sales from franchised stores as net revenues in its
Statements of Consolidated Income, management believes system-wide
and franchised SSS comparisons, store counts, and total system-wide
store sales are useful to assess market position relative to
competitors and overall store and operating performance.
Use of Non-GAAP Measures
To supplement the financial measures prepared in accordance with
U.S. GAAP, certain items herein are presented on an adjusted basis.
These non-GAAP measures have limitations as analytical tools and
should not be considered in isolation from, or as an alternative
to, or more meaningful than, the financial results presented in
accordance with U.S. GAAP. The financial results presented in
accordance with U.S. GAAP and the reconciliations of non-GAAP
measures should be carefully evaluated. The non-GAAP information
used by management may not be comparable to similar measures
disclosed by other companies, because of differing methods used in
calculating such measures.
The following non-GAAP measures are included herein: EBITDA and
adjusted EBITDA, adjusted net income and earnings per share, free
cash flow, and discretionary free cash flows. Refer to the tables
herein for management's definition of each non-GAAP measure and
reconciliation to the most comparable U.S. GAAP measure.
Management believes the use of non-GAAP measures provides a
useful supplemental presentation of Valvoline's operating
performance and allows for transparency with respect to key metrics
used by management in operating the business and measuring
performance. Management believes EBITDA measures provide a
meaningful supplemental presentation of Valvoline's operating
performance between periods on a comparable basis due to the
depreciable assets associated with the nature of the Company's
operations, as well as income tax and interest costs related to
Valvoline's tax and capital structures, respectively.
Adjusted profitability measures enable comparison of financial
trends and results between periods where certain items may vary
independent of business performance. These adjusted measures
exclude the impact of certain unusual, infrequent or
non-operational activity not directly attributable to the
underlying business, which management believes impacts the
comparability of operational results between periods ("key items").
Key items are often related to legacy matters or market-driven
events considered by management to not be reflective of the ongoing
operating performance. Key items may consist of adjustments related
to: legacy businesses, including the separation from Valvoline's
former parent company and associated impacts of related activity
and indemnities; the separation of Valvoline's businesses;
significant acquisitions or divestitures; restructuring-related
matters; tax reform legislation; debt extinguishment and
modification costs; and other matters that are non-operational or
unusual in nature, including net pension and other postretirement
plan expense/income.
Management uses free cash flow and discretionary free cash flow
as additional non-GAAP metrics of cash flow generation. By
including capital expenditures and certain other adjustments, as
applicable, management is able to provide an indication of the
ongoing cash being generated that is ultimately available for both
debt and equity holders as well as other investment opportunities.
Free cash flow includes the impact of capital expenditures,
providing a supplemental view of cash generation. Discretionary
free cash flow includes maintenance capital expenditures, which are
routine uses of cash that are necessary to maintain the Company's
operations and provides a supplemental view of cash flow generation
to maintain operations before discretionary investments in growth.
Free cash flow and discretionary free cash flow have certain
limitations, including that they do not reflect adjustments for
certain non-discretionary cash flows, such as mandatory debt
repayments.
About ValvolineTM
The Quick, Easy, Trusted name in preventive vehicle maintenance,
Valvoline Inc. (NYSE: VVV) leads the industry with automotive
service innovations that simplify consumers' lives and take the
worry out of vehicle care. With an average consumer rating of 4.6
out of 5 stars*, Valvoline has built the model for transparency and
convenience in automotive maintenance. From its 15-minute,
stay-in-your-car oil change to cabin air filters to battery
replacements to tire rotations, the Company's model offers
maintenance solutions for all types of vehicles. The Company
operates and franchises more than 1,700 service center locations
through its Valvoline Instant Oil ChangeSM and Valvoline
Great Canadian Oil Change retail locations. To learn more, or to
find a Valvoline service center near you, visit valvoline.com.
Forward-Looking Statements
Certain statements in this press release, other than statements
of historical fact, including estimates, projections and statements
related to Valvoline's business plans and operating results, are
forward-looking statements within the meaning of the Private
Securities Litigation Reform Act of 1995. Valvoline has
identified some of these forward-looking statements with words such
as "anticipates," "believes," "expects," "estimates," "is likely,"
"predicts," "projects," "forecasts," "may," "will," "should," and
"intends," and the negative of these words or other comparable
terminology. These forward-looking statements are based on
Valvoline's current expectations, estimates, projections, and
assumptions as of the date such statements are made and are subject
to risks and uncertainties that may cause results to differ
materially from those expressed or implied in the forward-looking
statements. Additional information regarding these risks and
uncertainties are described in the Company's filings with the
Securities and Exchange Commission (the "SEC"), including in the
"Risk Factors," "Management's Discussion and Analysis of Financial
Condition and Results of Operations," and "Quantitative and
Qualitative Disclosures about Market Risk" sections of Valvoline's
most recently filed periodic reports on Forms 10-K and 10-Q, which
are available on Valvoline's website at
http://investors.valvoline.com/sec-filings or on the SEC's
website at http://www.sec.gov. Valvoline assumes no obligation to
update or revise these forward-looking statements for any reason,
even if new information becomes available in the future, unless
required by law.
TM Trademark, Valvoline or its subsidiaries,
registered in various countries
SM Service mark, Valvoline or its subsidiaries,
registered in various countries
* Based on a survey of more than 250,000 Valvoline Instant
Oil Change customers annually
FOR FURTHER INFORMATION
Investor Inquiries
+1 (859) 357-3155
IR@valvoline.com
Media Inquiries
Michele
Gaither Sparks
Sr. Director, Corporate Communications
+1 (859) 230-8097
michele.sparks@valvoline.com
Valvoline Inc. and
Consolidated Subsidiaries
|
|
|
|
Table 1
|
Statements of
Consolidated Income
|
|
|
|
|
(In millions, except
per share amounts - preliminary and unaudited)
|
|
|
|
|
|
|
|
|
Three months
ended
|
|
December 31
|
|
2022
|
|
2021
|
Net revenues
|
|
$
332.8
|
|
$
287.3
|
Cost of
sales
|
|
214.0
|
|
175.1
|
GROSS
PROFIT
|
|
118.8
|
|
112.2
|
Selling, general and
administrative expenses
|
|
66.0
|
|
60.2
|
Net legacy and
separation-related expenses
|
|
25.4
|
|
2.8
|
Other income,
net
|
|
(1.9)
|
|
(2.8)
|
OPERATING
INCOME
|
|
29.3
|
|
52.0
|
Net pension and other
postretirement plan expense (income)
|
|
3.7
|
|
(9.3)
|
Net interest and other
financing expenses
|
|
18.7
|
|
17.0
|
INCOME BEFORE INCOME
TAXES
|
|
6.9
|
|
44.3
|
Income tax (benefit)
expense
|
|
(20.1)
|
|
10.1
|
Income from continuing
operations
|
|
27.0
|
|
34.2
|
Income from
discontinued operations
|
|
54.9
|
|
52.8
|
NET
INCOME
|
|
$
81.9
|
|
$
87.0
|
|
|
|
|
|
|
NET EARNINGS PER
SHARE
|
|
|
|
|
Basic earnings per
share
|
|
|
|
|
Continuing
operations
|
|
$
0.16
|
|
$
0.19
|
Discontinued
operations
|
|
0.31
|
|
0.29
|
Basic earnings per
share
|
|
$
0.47
|
|
$
0.48
|
|
|
|
|
|
|
Diluted earnings
per share
|
|
|
|
|
Continuing
operations
|
|
$
0.15
|
|
$
0.19
|
Discontinued
operations
|
|
0.31
|
|
0.29
|
Diluted earnings per
share
|
|
$
0.46
|
|
$
0.48
|
|
|
|
|
|
|
WEIGHTED AVERAGE
COMMON SHARES OUTSTANDING
|
|
|
BASIC
|
|
175.2
|
|
180.5
|
DILUTED
|
|
176.3
|
|
182.0
|
Valvoline Inc. and
Consolidated Subsidiaries
|
|
|
|
Table 2
|
Condensed
Consolidated Balance Sheets
|
|
|
|
|
(In millions -
preliminary and unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
December 31
|
|
September 30
|
|
2022
|
|
2022
|
ASSETS
|
|
|
|
|
|
Current
assets
|
|
|
|
|
|
|
Cash and cash
equivalents
|
|
$
21.0
|
|
$
23.4
|
|
|
Receivables,
net
|
|
56.9
|
|
66.1
|
|
|
Inventories,
net
|
|
31.2
|
|
29.4
|
|
|
Prepaid expenses and
other current assets
|
|
38.7
|
|
38.0
|
|
|
Current assets of
discontinued operations
|
|
1,553.6
|
|
1,464.2
|
|
Total current
assets
|
|
1,701.4
|
|
1,621.1
|
|
|
|
|
|
|
|
|
|
Noncurrent
assets
|
|
|
|
|
|
|
Property, plant and
equipment, net
|
|
693.3
|
|
668.6
|
|
|
Operating lease
assets
|
|
253.5
|
|
248.1
|
|
|
Goodwill and
intangibles, net
|
|
668.2
|
|
663.1
|
|
|
Deferred tax
assets
|
|
82.2
|
|
61.6
|
|
|
Other noncurrent
assets
|
|
152.9
|
|
154.3
|
|
Total assets
|
|
$
3,551.5
|
|
$
3,416.8
|
|
|
|
|
|
|
|
|
LIABILITIES AND
STOCKHOLDERS' EQUITY
|
|
|
|
|
|
Current
liabilities
|
|
|
|
|
|
|
Current portion of
long-term debt
|
|
$
224.5
|
|
$
162.5
|
|
|
Trade and other
payables
|
|
46.6
|
|
45.0
|
|
|
Accrued expenses and
other liabilities
|
|
175.2
|
|
172.6
|
|
|
Current liabilities of
discontinued operations
|
|
478.1
|
|
539.3
|
|
Total current
liabilities
|
|
924.4
|
|
919.4
|
|
|
|
|
|
|
|
|
Noncurrent
liabilities
|
|
|
|
|
|
|
Long-term
debt
|
|
1,656.1
|
|
1,525.1
|
|
|
Employee benefit
obligations
|
|
200.5
|
|
199.4
|
|
|
Operating lease
liabilities
|
|
234.5
|
|
229.2
|
|
|
Other noncurrent
liabilities
|
|
246.7
|
|
237.1
|
|
Total noncurrent
liabilities
|
|
2,337.8
|
|
2,190.8
|
|
|
|
|
|
|
|
|
Stockholders'
equity
|
|
289.3
|
|
306.6
|
|
|
|
|
|
|
|
|
Total liabilities and
stockholders' equity
|
|
$
3,551.5
|
|
$
3,416.8
|
Valvoline Inc. and
Consolidated Subsidiaries
|
|
|
|
Table 3
|
Condensed
Consolidated Statements of Cash Flows
|
|
|
(In millions -
preliminary and unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three months
ended
|
|
December 31
|
|
2022
|
|
2021
|
CASH FLOWS FROM
OPERATING ACTIVITIES
|
|
|
|
|
|
Net income
|
|
$
81.9
|
|
$
87.0
|
|
Adjustments to
reconcile net income to cash flows from operating
activities
|
|
|
|
|
|
|
Income from
discontinued operations
|
|
(54.9)
|
|
(52.8)
|
|
|
Depreciation and
amortization
|
|
18.5
|
|
16.9
|
|
|
Deferred income
taxes
|
|
(26.5)
|
|
7.5
|
|
|
Stock-based
compensation expense
|
|
2.9
|
|
3.2
|
|
|
Other, net
|
|
0.6
|
|
0.6
|
|
Change in operating
assets and liabilities
|
|
26.0
|
|
(24.7)
|
|
Operating cash flows
from continuing operations
|
|
48.5
|
|
37.7
|
|
Operating cash flows
from discontinued operations
|
|
(57.2)
|
|
(5.9)
|
|
Total cash (used in)
provided by operating activities
|
|
(8.7)
|
|
31.8
|
CASH FLOWS FROM
INVESTING ACTIVITIES
|
|
|
|
|
|
Additions to property,
plant and equipment
|
|
(39.9)
|
|
(32.0)
|
|
Notes receivable, net
of repayments
|
|
(0.5)
|
|
3.0
|
|
Acquisitions of
businesses, net of cash acquired
|
|
(9.6)
|
|
(13.6)
|
|
Other investing
activities, net
|
|
1.6
|
|
(0.1)
|
|
Investing cash flows
from continuing operations
|
|
(48.4)
|
|
(42.7)
|
|
Investing cash flows
from discontinued operations
|
|
(8.4)
|
|
(3.1)
|
|
Total cash used in
investing activities
|
|
(56.8)
|
|
(45.8)
|
CASH FLOWS FROM
FINANCING ACTIVITIES
|
|
|
|
|
|
Proceeds from
borrowings
|
|
250.0
|
|
—
|
|
Repayments on
borrowings
|
|
(119.4)
|
|
—
|
|
Repurchases of common
stock
|
|
(87.4)
|
|
(31.5)
|
|
Cash dividends
paid
|
|
(21.8)
|
|
(22.5)
|
|
Other financing
activities
|
|
(8.9)
|
|
(8.9)
|
|
Financing cash flows
from continuing operations
|
|
12.5
|
|
(62.9)
|
|
Financing cash flows
from discontinued operations
|
|
60.0
|
|
(0.9)
|
|
Total cash provided by
(used in) financing activities
|
|
72.5
|
|
(63.8)
|
|
Effect of currency
exchange rate changes on cash, cash equivalents and
restricted cash
|
|
2.1
|
|
0.1
|
INCREASE (DECREASE)
IN CASH, CASH EQUIVALENTS AND RESTRICTED
CASH
|
|
9.1
|
|
(77.7)
|
Cash, cash equivalents
and restricted cash - beginning of period
|
|
83.9
|
|
231.4
|
CASH, CASH
EQUIVALENTS AND RESTRICTED CASH - END OF PERIOD
|
|
$
93.0
|
|
$
153.7
|
Valvoline Inc. and
Consolidated Subsidiaries
|
|
|
|
Table 4
|
Retail Stores
Operating Information
|
|
|
|
|
(Preliminary and
unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three months
ended
|
|
December 31
|
|
2022
|
|
2021
|
Sales
information
|
|
|
|
|
|
System-wide store sales
- in millions (a)
|
|
$ 644.0
|
|
$
550.9
|
Year-over-year
growth (a)
|
|
16.9 %
|
|
30.9 %
|
|
|
|
|
|
|
Same-store sales
growth (b)
|
|
|
|
|
Company-operated
|
|
12.7 %
|
|
22.1 %
|
Franchised
(a)
|
|
11.2 %
|
|
26.8 %
|
System-wide
(a)
|
|
11.9 %
|
|
24.7 %
|
|
|
|
Number of stores at end
of period
|
|
|
|
First
Quarter
2023
|
|
Fourth
Quarter
2022
|
|
Third
Quarter
2022
|
|
Second
Quarter
2022
|
|
First
Quarter
2022
|
|
|
|
|
|
|
|
|
|
|
|
|
Company-operated
|
|
813
|
|
790
|
|
772
|
|
757
|
|
738
|
Franchised
(a)
|
|
933
|
|
925
|
|
918
|
|
904
|
|
897
|
|
|
|
|
|
|
|
|
|
|
|
|
|
December 31
|
2022
|
|
2021
|
System-wide store count
(a)
|
|
|
|
|
|
|
|
1,746
|
|
1,635
|
Year-over-year
growth
|
|
|
|
|
|
|
|
7 %
|
|
7 %
|
(a)
|
Measures include
Valvoline franchisees, which are independent legal entities.
Valvoline does not consolidate the results of operations of its
franchisees.
|
(b)
|
Valvoline determines
SSS growth as sales by U.S. stores, with new stores, including
franchised conversions, excluded from the metric until
the completion of their first full fiscal year in
operation.
|
Valvoline Inc. and
Consolidated Subsidiaries
|
|
|
|
|
|
|
|
Table 5
|
System-wide Retail
Stores
|
|
|
|
|
|
|
|
|
|
(Preliminary and
unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Company-operated
|
|
|
|
First
Quarter
2023
|
|
Fourth
Quarter
2022
|
|
Third
Quarter
2022
|
|
Second
Quarter
2022
|
|
First
Quarter
2022
|
Beginning of
period
|
|
790
|
|
772
|
|
757
|
|
738
|
|
719
|
|
Opened
|
|
17
|
|
12
|
|
5
|
|
10
|
|
7
|
|
Acquired
|
|
5
|
|
3
|
|
9
|
|
9
|
|
12
|
|
Net conversions between
company-operated
and franchised
|
|
2
|
|
3
|
|
1
|
|
—
|
|
—
|
|
Closed
|
|
(1)
|
|
—
|
|
—
|
|
—
|
|
—
|
End of
period
|
|
813
|
|
790
|
|
772
|
|
757
|
|
738
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Franchised
(a)
|
|
|
|
First
Quarter
2023
|
|
Fourth
Quarter
2022
|
|
Third
Quarter
2022
|
|
Second
Quarter
2022
|
|
First
Quarter
2022
|
Beginning of
period
|
|
925
|
|
918
|
|
904
|
|
897
|
|
875
|
|
Opened
|
|
11
|
|
10
|
|
16
|
|
9
|
|
25
|
|
Acquired
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
Net conversions between
company-operated
and franchised
|
|
(2)
|
|
(3)
|
|
(1)
|
|
—
|
|
—
|
|
Closed
|
|
(1)
|
|
—
|
|
(1)
|
|
(2)
|
|
(3)
|
End of
period
|
|
933
|
|
925
|
|
918
|
|
904
|
|
897
|
|
|
|
|
|
|
|
|
|
|
|
|
Total system-wide
stores (a)
|
|
1,746
|
|
1,715
|
|
1,690
|
|
1,661
|
|
1,635
|
|
(a)
|
Measures include
Valvoline franchisees, which are independent legal entities.
Valvoline does not consolidate the results of operations of its
franchisees.
|
Valvoline Inc. and
Consolidated Subsidiaries
|
|
|
|
Table 6
|
Non-GAAP
Reconciliation - Income from Continuing Operations and Diluted
Earnings per Share
|
(In millions, except
per share amounts - preliminary and unaudited)
|
|
|
|
|
|
|
|
|
|
Three months
ended
|
|
|
|
December 31
|
|
|
|
2022
|
|
2021
|
Reported income from
continuing operations
|
|
$
27.0
|
|
$
34.2
|
Adjustments:
|
|
|
|
|
|
Net pension and other
postretirement plan expenses (income)
|
|
3.7
|
|
(9.3)
|
|
Net legacy and
separation-related expenses (a)
|
|
25.4
|
|
2.8
|
|
Information technology
transition costs
|
|
0.3
|
|
1.0
|
|
Suspended
operations
|
|
(0.2)
|
|
(0.3)
|
|
Total adjustments,
pre-tax
|
|
29.2
|
|
(5.8)
|
|
Income tax (benefit)
expense of adjustments (a)
|
|
(27.8)
|
|
1.5
|
|
Total adjustments,
after tax
|
|
1.4
|
|
(4.3)
|
Adjusted income from
continuing operations (b)
|
|
$
28.4
|
|
$
29.9
|
|
|
|
|
|
Continuing operations
diluted earnings per share
|
|
$
0.15
|
|
$
0.19
|
Continuing operations
adjusted earnings per share (c)
|
|
$
0.16
|
|
$
0.16
|
|
|
|
|
|
|
Weighted average
diluted common shares outstanding
|
|
176.3
|
|
182.0
|
|
(a)
|
The Company recognized
$24.4 million of expense within Net legacy and separation-related
expenses in the Statement of
Consolidated Income, in addition to an income tax benefit of $26.5
million during the three months ended December 31, 2022 to
reflect its increased estimated indemnity obligation and the
release of valuation allowances, respectively, in connection with
the amendment of
the Tax Matters Agreement with Valvoline's former parent company in
January 2023.
|
(b)
|
Adjusted income from
continuing operations is defined as income from continuing
operations adjusted for key items. Refer to "Use of
Non-GAAP Measures" in this press release for management's
definition of key items.
|
(c)
|
Adjusted earnings per
share from continuing operations is defined as diluted earnings per
share calculated using adjusted income from
continuing operations.
|
Valvoline Inc. and
Consolidated Subsidiaries
|
|
|
|
Table 7
|
Non-GAAP
Reconciliation - Adjusted EBITDA from Continuing
Operations
|
|
|
(In millions -
preliminary and unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
Three months
ended
|
|
December 31
|
|
2022
|
|
2021
|
Income from continuing
operations
|
|
$
27.0
|
|
$
34.2
|
Add:
|
|
|
|
|
Income tax (benefit)
expense
|
|
(20.1)
|
|
10.1
|
Net interest and other
financing expenses
|
|
18.7
|
|
17.0
|
Depreciation and
amortization
|
|
18.5
|
|
16.9
|
EBITDA - Continuing
operations (a)
|
|
44.1
|
|
78.2
|
Key items:
|
|
|
|
|
Net pension and other
postretirement plan expenses (income)
|
|
3.7
|
|
(9.3)
|
Net legacy and
separation-related expenses
|
|
25.4
|
|
2.8
|
Information technology
transition costs
|
|
0.3
|
|
1.0
|
Suspended
operations
|
|
(0.2)
|
|
(0.3)
|
Key items -
subtotal
|
|
29.2
|
|
(5.8)
|
Adjusted EBITDA from
continuing operations (a)
|
|
$
73.3
|
|
$
72.4
|
|
|
|
(a)
|
EBITDA from continuing
operations is defined as income from continuing operations, plus
income tax (benefit) expense, net interest and other financing
expenses, and depreciation and amortization attributable to
continuing operations. Adjusted EBITDA from continuing operations
is EBITDA adjusted for key items attributable to continuing
operations, as described in "Use of Non-GAAP Measures" within this
press release.
|
Valvoline Inc. and
Consolidated Subsidiaries
|
|
|
|
Table 8
|
Non-GAAP
Reconciliation - Free Cash Flows from Continuing
Operations
|
|
|
(In millions -
preliminary and unaudited)
|
|
|
|
|
|
|
|
|
|
Free cash flow
(a)
|
|
Three months
ended
|
|
December 31
|
|
2022
|
|
2021
|
Total cash flows
provided by operating activities from continuing
operations
|
|
$
48.5
|
|
$
37.7
|
Adjustments:
|
|
|
|
|
Additions to property,
plant and equipment from continuing operations
|
|
(39.9)
|
|
(32.0)
|
Free cash flow from
continuing operations
|
|
$
8.6
|
|
$
5.7
|
|
|
|
|
|
Discretionary free cash
flow (b)
|
|
Three months
ended
|
|
December 31
|
|
2022
|
|
2021
|
Total cash flows
provided by operating activities from continuing
operations
|
|
$
48.5
|
|
$
37.7
|
Adjustments:
|
|
|
|
|
Maintenance additions
to property, plant and equipment from continuing
operations
|
|
(4.3)
|
|
(4.2)
|
Discretionary free
cash flow from continuing operations
|
|
$
44.2
|
|
$
33.5
|
|
|
|
|
|
|
|
(a)
|
Free cash flow from
continuing operations is defined as operating cash flows from
continuing operations less capital expenditures of the continuing
operations and certain other adjustments attributable to continuing
operations, as applicable.
|
(b)
|
Discretionary free cash
flow from continuing operations is defined as operating cash flows
from continuing operations less maintenance capital expenditures of
the continuing operations and certain other adjustments
attributable to continuing operations, as applicable.
|
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SOURCE Valvoline Inc.