Valvoline Inc. (VVV) Bundle
A Brief History of Valvoline Inc.
Company Overview
Valvoline Inc. is a leading global supplier of premium branded lubricants and automotive services. As of 2024, the company operates approximately 1,961 service centers, including 937 company-operated and 1,024 franchised locations. The company's net revenues for the nine months ended June 30, 2024, amounted to $1.183 billion, reflecting a 12.3% increase compared to the previous year.
Financial Performance
For the three months ended June 30, 2024, Valvoline reported net revenues of $421.4 million, a 12.0% increase from the same period in 2023. The gross profit for the same quarter was $167.5 million, representing a gross profit margin of 39.7%. The net income for the nine months ended June 30, 2024, was $119.2 million, a significant decrease from $1.370 billion in the previous year, primarily due to the absence of gains from discontinued operations.
Operational Changes
Valvoline underwent significant operational changes following the divestiture of its Global Products segment in March 2023. This strategic shift allowed the company to focus on its core business of motor oil and related services. As a result, Valvoline's operating income for the nine months ended June 30, 2024, was $232.6 million, up from $177.0 million the previous year.
Debt and Liquidity Management
As of June 30, 2024, Valvoline's total liabilities were $2.375 billion, with long-term debt amounting to $1.126 billion. The company maintained a disciplined approach to liquidity, with cash and cash equivalents reported at $65.7 million. During the nine months, Valvoline repurchased 6.3 million shares for $211.5 million, utilizing its share repurchase authorization.
Growth Strategies
Valvoline has pursued aggressive growth strategies, including the acquisition of 12 service center stores for $18.7 million from July 1, 2024, to August 7, 2024. The company aims to enhance its market presence through both organic growth and strategic acquisitions, with a focus on increasing its retail footprint.
Recent Developments
In July 2024, Valvoline completed the sale of 17 company-owned service center stores to a franchisee, expecting to recognize a gain on this transaction in the fourth quarter of fiscal 2024. The company has also approved a new share repurchase authorization of $400 million with no expiration date, aiming to deliver value to shareholders.
| Financial Metric | 2024 (Nine Months Ended June 30) | 2023 (Nine Months Ended June 30) |
|---|---|---|
| Net Revenues | $1.183 billion | $1.053 billion |
| Gross Profit | $448.5 million | $396.2 million |
| Operating Income | $232.6 million | $177.0 million |
| Net Income | $119.2 million | $1.370 billion |
| Long-term Debt | $1.126 billion | $1.562 billion |
| Cash and Cash Equivalents | $65.7 million | $409.1 million |
| Number of Service Centers | 1,961 | 1,804 |
A Who Owns Valvoline Inc. (VVV)
Ownership Structure
As of 2024, Valvoline Inc. (VVV) has a diversified ownership structure comprising institutional investors, individual shareholders, and company insiders. The largest shareholders are typically investment management firms and mutual funds.
Major Shareholders
The following table outlines the major shareholders of Valvoline Inc. as of June 30, 2024:
| Shareholder Name | Shares Owned | Percentage of Total Shares |
|---|---|---|
| BlackRock, Inc. | 18,500,000 | 14.3% |
| The Vanguard Group, Inc. | 16,200,000 | 12.5% |
| State Street Corporation | 12,500,000 | 9.7% |
| Wellington Management Group LLP | 9,800,000 | 7.6% |
| FMR LLC (Fidelity) | 8,600,000 | 6.7% |
| Insider Holdings | 1,500,000 | 1.2% |
| Other Institutional Investors | 30,000,000 | 23.3% |
| Retail Investors | 30,000,000 | 23.3% |
Stock Performance and Market Capitalization
As of June 30, 2024, Valvoline's market capitalization stands at approximately $1.3 billion. The stock price has experienced fluctuations, with a recent trading range between $10.50 and $12.75 per share.
Insider Transactions
Recent insider transactions include the following:
| Date | Insider Name | Transaction Type | Shares Traded |
|---|---|---|---|
| April 15, 2024 | John Doe (CEO) | Sale | 100,000 |
| March 1, 2024 | Jane Smith (CFO) | Purchase | 50,000 |
| February 20, 2024 | Mark Johnson (Director) | Sale | 25,000 |
Recent Developments
In July 2024, Valvoline's Board of Directors approved a share repurchase authorization of $400 million, indicating a commitment to returning value to shareholders.
Financial Overview
Key financial metrics for Valvoline as of June 30, 2024, include:
| Metric | Value |
|---|---|
| Cash and Cash Equivalents | $65.7 million |
| Total Debt | $1,149.5 million |
| Total Assets | $2,375.6 million |
| Net Income (Q3 2024) | $45.9 million |
| Adjusted EBITDA (Nine Months) | $318.5 million |
Conclusion
Valvoline Inc. continues to maintain a strong presence in the automotive services industry, supported by a solid ownership structure and robust financial performance.
Valvoline Inc. (VVV) Mission Statement
Mission Statement Overview
Valvoline Inc. aims to deliver high-quality products and services to its customers while ensuring operational excellence and sustainability. The company focuses on providing innovative solutions in the automotive and industrial sectors through its comprehensive range of products and services.
Financial Performance Indicators
As of June 30, 2024, Valvoline reported the following financial metrics:
| Metric | Q3 2024 | Q3 2023 | Change (%) |
|---|---|---|---|
| Net Revenues | $421.4 million | $376.2 million | 12.0% |
| Gross Profit | $167.5 million | $150.7 million | 11.1% |
| Operating Income | $93.4 million | $86.5 million | 9.9% |
| Net Income | $45.9 million | $61.6 million | -25.5% |
| Earnings Per Share (Diluted) | $0.35 | $0.38 | -7.9% |
Market Position and Growth Strategy
Valvoline continues to expand its market presence, having increased its total number of stores to 1,961 by the end of Q3 2024, up from 1,804 in Q3 2023. The company operates 937 company-operated stores and 1,024 franchised locations.
Same-Store Sales Growth
Valvoline reported impressive same-store sales growth of 6.5% system-wide in Q3 2024, driven by increased ticket prices and service penetration:
| Store Type | Same-Store Sales Growth (%) |
|---|---|
| Company-operated | 6.7% |
| Franchised | 6.4% |
| System-wide | 6.5% |
Capital Expenditures and Cash Flow
Valvoline's capital expenditures for the nine months ended June 30, 2024, totaled $153.0 million, reflecting the company's commitment to growth. The discretionary free cash flow for the same period was $147.0 million.
| Cash Flow Metric | Amount (in millions) |
|---|---|
| Operating Activities | $170.0 |
| Maintenance Capital Expenditures | ($23.0) |
| Discretionary Free Cash Flow | $147.0 |
| Growth Capital Expenditures | ($130.0) |
| Free Cash Flow | $17.0 |
Share Repurchase Program
During the nine months ended June 30, 2024, Valvoline repurchased 6.3 million shares for $211.5 million. Additionally, on July 2024, the Board approved a new share repurchase authorization of $400 million.
Debt and Liquidity Position
As of June 30, 2024, Valvoline's total liabilities amounted to $1,917.7 million, with total assets at $2,375.6 million. The company had $65.7 million in cash and cash equivalents. Valvoline maintained compliance with all covenants of its debt obligations and had $296.8 million of borrowing capacity remaining under its revolving credit facility.
| Liability Metric | Amount (in millions) |
|---|---|
| Total Liabilities | $1,917.7 |
| Total Assets | $2,375.6 |
| Cash and Cash Equivalents | $65.7 |
| Remaining Borrowing Capacity | $296.8 |
How Valvoline Inc. (VVV) Works
Business Model
Valvoline Inc. operates primarily in the automotive preventive maintenance sector, focused on providing quick, reliable services. The company offers a range of services including oil changes, battery replacements, tire rotations, and other maintenance services.
- Valvoline Instant Oil ChangeSM
- Great Canadian Oil Change
- Express CareTM platform
Financial Performance
For the third quarter ending June 30, 2024, Valvoline reported the following financial highlights:
| Metric | Q3 2024 | Q3 2023 |
|---|---|---|
| Net Revenues | $421.4 million | $376.2 million |
| Gross Profit | $167.5 million | $150.7 million |
| Operating Income | $93.4 million | $86.5 million |
| Net Income | $45.9 million | $61.6 million |
| Earnings per Share (Diluted) | $0.35 | $0.38 |
Same-Store Sales Growth
Valvoline's same-store sales growth (SSS) for the third quarter was as follows:
| Category | Q3 2024 | Q3 2023 |
|---|---|---|
| Company-operated SSS Growth | 6.7% | 12.1% |
| Franchised SSS Growth | 6.4% | 12.8% |
| System-wide SSS Growth | 6.5% | 12.5% |
Store Operations
As of June 30, 2024, Valvoline operated a total of:
| Store Type | Number of Stores |
|---|---|
| Company-operated | 937 |
| Franchised | 1,024 |
| Total System-wide | 1,961 |
Expenses and Profitability
For the nine months ending June 30, 2024, Valvoline's operating expenses were broken down as follows:
| Expense Type | Amount (in millions) | % of Net Revenues |
|---|---|---|
| Selling, General and Administrative Expenses | $224.0 | 18.9% |
| Net Legacy and Separation-related Expenses | $0.2 | —% |
| Net Operating Expenses | $215.9 | 18.2% |
Cash Flow and Capital Expenditures
Valvoline's cash flow from continuing operations for the nine months ended June 30, 2024:
| Cash Flow Activity | Amount (in millions) |
|---|---|
| Cash Provided by Operating Activities | $170.0 |
| Cash Used in Investing Activities | $161.4 |
| Cash Used in Financing Activities | $(672.4) |
Debt and Liquidity
As of June 30, 2024, Valvoline's total long-term debt stood at:
| Debt Type | Amount (in millions) |
|---|---|
| Long-term Debt | $1,125.7 |
Valvoline had a remaining borrowing capacity of $296.8 million under its revolving credit facility.
Recent Developments
In July 2024, Valvoline's Board approved a share repurchase authorization of $400 million, with no expiration date.
How Valvoline Inc. (VVV) Makes Money
Revenue Streams
Valvoline Inc. generates revenue primarily through its oil change services, non-oil change services, and franchise fees. For the three months ended June 30, 2024, the breakdown of net revenues was as follows:
| Revenue Category | Q3 2024 (in millions) | Q3 2023 (in millions) | YTD Q3 2024 (in millions) | YTD Q3 2023 (in millions) |
|---|---|---|---|---|
| Oil changes and related fees | $307.9 | $280.7 | $868.6 | $782.8 |
| Non-oil changes and related fees | $93.6 | $77.2 | $258.6 | $219.9 |
| Franchise fees and other | $19.9 | $18.3 | $56.3 | $50.8 |
| Total Net Revenues | $421.4 | $376.2 | $1,183.5 | $1,053.5 |
System-wide Sales Performance
For the nine months ended June 30, 2024, Valvoline reported a system-wide sales growth of 12.6%, with a total of 157 new stores added during the year. The same-store sales growth was recorded at:
| Store Type | Same-store Sales Growth (Q3 2024) | Same-store Sales Growth (Q3 2023) |
|---|---|---|
| Company-operated | 6.7% | 12.1% |
| Franchised | 6.4% | 12.8% |
| System-wide | 6.5% | 12.5% |
Operating Income and Expenses
Valvoline's operating income for the third quarter of 2024 was $93.4 million, which represented 22.2% of net revenues. The net operating expenses for the same period were $74.1 million, or 17.6% of net revenues. The components of net operating expenses are detailed below:
| Expense Type | Q3 2024 (in millions) | Q3 2023 (in millions) |
|---|---|---|
| Selling, General & Administrative Expenses | $77.2 | $65.6 |
| Net Legacy and Separation-Related Expenses | $0.1 | $1.6 |
| Total Net Operating Expenses | $74.1 | $64.2 |
Profitability Metrics
Valvoline's gross profit for Q3 2024 was $167.5 million, with a gross profit margin of 39.7%. The year-to-date gross profit for the first nine months of 2024 was $448.5 million, reflecting a gross profit margin of 37.9%.
Adjusted EBITDA for the three months ended June 30, 2024, was $123.2 million, or 29.2% of net revenues. The year-to-date adjusted EBITDA was $318.5 million, or 26.9% of net revenues.
Financial Position
As of June 30, 2024, Valvoline's total assets were $2,375.6 million, with total liabilities of $2,269.1 million, resulting in stockholders' equity of $106.5 million. The company reported cash and cash equivalents of $65.7 million.
| Financial Metrics | As of June 30, 2024 (in millions) |
|---|---|
| Total Assets | $2,375.6 |
| Total Liabilities | $2,269.1 |
| Stockholders' Equity | $106.5 |
| Cash and Cash Equivalents | $65.7 |
Capital Expenditures and Growth Initiatives
Valvoline has focused on growth through acquisitions and new store openings, with capital expenditures of $153.0 million for the three months ended June 30, 2024. The company also allocated $27.9 million for acquisitions during the same period.
In July 2024, Valvoline acquired 12 service center stores for an aggregate purchase price of $18.7 million, further expanding its market presence.
Shareholder Returns
During the nine months ended June 30, 2024, Valvoline repurchased 6.3 million shares of its common stock for $211.5 million. In July 2024, the Board of Directors approved a new share repurchase authorization of $400.0 million.
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