Growth in glass repair market bolsters Driven Brands’ revenues for Q1

Very last year’s acquisition of Vehicle Glass Now (AGN) and continuing expansion in the glass substitute sector have boosted the revenues of Pushed Models, the company’s president and CEO, Jonathan Fitzpatrick, explained to investors on Wednesday.

Jonathan Fitzpatrick

The corporation reported revenue of $468.3 million for the very first quarter of 2022, an boost of 42{e3fa8c93bbc40c5a69d9feca38dfe7b99f2900dad9038a568cd0f4101441c3f9} about the prior year. Section of that complete was $79.4 million in profits from Driven’s Paint, Collision and Glass phase, which in addition to AGN involves Maaco, ABRA, CARSTAR, and quite a few other firms. Within the section, exact-keep profits ended up up 13.7{e3fa8c93bbc40c5a69d9feca38dfe7b99f2900dad9038a568cd0f4101441c3f9} year to yr.

Fitzpatrick described that “glass repairs are developing as a percentage of automobile repairs and fix complexity is escalating owing to the necessary calibration.”

Responding to an investor’s question, Fitzpatrick stated that the only surprise from the acquisition has been “upside surprise, in conditions of how terrific and major the possibility is to grow…. I’m even extra enthusiastic about this area than when we did the deal in late December,” when Driven acquired AGN’s additional than 75 locations in the Southeast and Midwest.

He mentioned the glass replacement marketplace “is a $5 billion room and rising.” One particular factor driving that progress, he explained, is the will need for calibration of cameras and other highly developed driver support methods (ADAS) parts when a windshield is replaced.

“Most cars due to the fact about 2015 have a ahead-facing digital camera mounted on that front windshield, and if you swap that windshield, you have to recalibrate that forward-dealing with digicam, mainly because that seriously is kind of the central anxious technique related with all the ADAS parts on a car or truck,” Fitzpatrick stated. “So that is driving selling price or, you know, the dimension of the restore test.”

In its 2022 Crash Course report, CCC found that the regular payment for digital camera calibration was $238 in the fourth quarter of 2021, an maximize of 31{e3fa8c93bbc40c5a69d9feca38dfe7b99f2900dad9038a568cd0f4101441c3f9} from the exact quarter in 2017.

CCC’s report highlights the complexity and nuance of diagnostics scans and calibrations in providing illustrations of the wide variability in the technologies alone and the huge variation in the do the job and expenses necessary.

Several OEMs call for that forward-dealing with cameras be calibrated when a windshield is replaced. Specific OEM position statements can be uncovered at the OEM1Halt internet site, www.oem1prevent.com/. In addition, I-CAR’s Repairability Technological Help (RTS) page, rts.i-vehicle.com/oem-calibration-demands-lookup.html permits repairers to look for for recommended processes by motor vehicle make, product, and manufacturing year.

In accordance to a nationwide “Who Pays for What?” survey carried out by Collision Tips and CRASH network, 81{e3fa8c93bbc40c5a69d9feca38dfe7b99f2900dad9038a568cd0f4101441c3f9} of shops that sublet glass alternative are accomplishing their very own investigation on irrespective of whether calibration is needed. The study observed that the percentage of retailers that experienced in no way deemed calibration following glass substitute had fallen from 17{e3fa8c93bbc40c5a69d9feca38dfe7b99f2900dad9038a568cd0f4101441c3f9} in 2008 to 3{e3fa8c93bbc40c5a69d9feca38dfe7b99f2900dad9038a568cd0f4101441c3f9} in 2021.

One more “Who Pays?” study located that 76{e3fa8c93bbc40c5a69d9feca38dfe7b99f2900dad9038a568cd0f4101441c3f9} of retailers billed insurers for markups on glasswork. In accordance to the survey, a 25{e3fa8c93bbc40c5a69d9feca38dfe7b99f2900dad9038a568cd0f4101441c3f9} mark-up for glass and other sublet goods is widespread.

Fitzpatrick instructed investors that Pushed is “pretty bullish” about the probable for windshield harm posed by enhanced highway design.

He said the enterprise is seeing “massive infrastructure developing in the United States and all the roadwork and all the development that is going to occur with that. We do imagine that there will be some awesome incremental tailwinds from that in terms of glass repair service.”

The investments Driven has built in its glass replacement and car wash segments, Fitzpatrick explained, are important to the long run of the organization due to the fact they’re “auto agnostic,” serving any and all kinds of motor vehicles.

“Strategically, these are two actually critical issues that we did and form of established Driven up for the future 20 many years,” he reported.

Provide chain difficulties

Fitzpatrick was also questioned about Driven’s outlook on ongoing source chain concerns.

“Our internal look at on this circumstance is that we’re heading to go on with, I assume, sort of the current operating atmosphere or provide chain worries, minimally via the balance of 2022,” he explained. “And, you know, very frankly, for us, this is now our usual working problems. So we’re finding out to stay and function and thrive in this challenging environment.”

He extra that enterprise executives “don’t see any main reduction in the problems, unquestionably as we glimpse at the balance of this calendar yr.”

Additional information

Repairer Brands’ Q1 2022 earnings simply call

https://occasions.q4inc.com/attendee/453950694

Images

Showcased picture courtesy of Vehicle Glass Now

Share This:

Associated