All right. Thanks everyone. I'm pleased to be joined this afternoon by Kevin Willis, who is Valvoline's CFO. We had you on stage, right, a year ago, right around today. You were just joined the company, so it's been a year now. Just kicking things off, for people that are newer in the room, can you talk about the Valvoline story? Can you provide some higher-level background as the Valvoline today does look quite different from the company that some may have remembered from a few years ago. Sure. Well, today, Valvoline is a pure play automotive services company operating in the retail space. Which is very different than how the business grew up. We've been in the quick lube business for 40 years. This is our 40th anniversary this year, and we operate a scaled network of over 2,400 company-owned and franchised stores across North America. We're the largest player in the quick lube space, doing north of 30 million services per year. We have executed 19 consecutive years of same-store sales growth, and we have a very clear and simple strategy. We want to drive the full potential of our core business. We want to continue to grow and scale our network, and we want to innovate to meet the evolving needs of our customers and the car parc. That's who we are. That's what we are. It's what we do every day to drive value for our customers, our employees, our franchise partners and o ur shareholders. Within that, how do you think about the moats that sort of separate your business from other close-in peers as well as the broader DIFM oil change market? Sure. Well, there are several, and they all work hand in glove together to create a very sustainable and profitable business. First and foremost is, I would say, scale. Even with our scale, we today only represent about 6% market share of the total Do It For Me oil change space, with that 30 million-plus oil changes per year that we do. It's a very fragmented market, which we think gives us competitive advantage because of our scaled network as well as our systems and training and processes that we execute across that network, both company-owned and franchise every day. We have a very strong network of franchise partners. The average franchise partner has been in the system for over 25 years, and we have several that have been in for over 35 years. Our employee base, our leadership team, from the store manager through our vice president of operations, over 95% of our operations leadership team grew up in the business. They've been promoted from within. We have a very tenured and experienced team. Very proud of that, but it also helps create competitive advantage for us. As you look at our franchise partners, not only have they been long tenured, they continue to invest. At our last investor update in December, we put some context around that. Our franchise partners have committed $1 billion of capital to grow their part of the business over the course of the next five years. Which is, I think it speaks to, number one, the quality of the business, and number two, their confidence in their ability to generate very strong returns on those investments. We also generate a very exceptional customer experience that's partly due to our tenured team. It's also due to our SuperPro process, the 270 hours of training that we give to every technician that we hire, both company and franchise. The result of that is NPS scores that are north of 80%, 4.7 star Google ratings with over 1 million reviews. It's a very compelling story. Yeah. We'll be going back and forth a little bit, but going back to your Analyst Day, you guys did update your growth algorithm. Can you just walk us through how we should think about the business comps, store growth, as well as margin expansion? Sure. What we've committed to over the medium term, which is let's call it now through 2028, or really it's up to 2028, would be comp growth of 3%-5%. We've been higher than that, as our most recent quarter was a little north of 8%. I'll get back to that in just a moment. 3%-5% comp growth, approximately 7% store growth. Those two things in combination should generate top line of 9%-11%, which should translate into EBITDA growth of low to mid-teens, EPS growth mid to high teens, and an EBITDA margin expansion of 100-200 basis points over the course of the medium term. That margin expansion coming from multiple areas, it helps actually de-risk the story. We've gotten labor leverage in our stores, but there's still room to improve that. Overall store expenses outside of labor, we're continuing to focus on those. As the stores continue to mature, there will be a natural tailwind to margin, as those stores will incur some variable costs, but they won't really incur fixed costs. As we tend to grow those stores, the AUV of those stores, we'll continue to see margin expansion there. All of these things kind of in combination give us a lot of confidence in the numbers that we put out. That was part of the point. We wanted to be very confident in the commitments that we made, and that's how we think of them. We think of them as financial commitments that we need to deliver on or exceed over the course of the next several years. With that, you touched on this a little bit, but you've gotten off to a really strong start. 1Q was great. 2Q was even better, as you've mentioned, an eight plus comp. What's sort of driving that? How much of that is market share growth and sort of transactions versus AURs? You are seeing nice growth on both sides. Yeah. In Q2, about a third of the 8.2 comp was transaction growth, and that's across the system, it's across vintages. Mature stores continue to grow. Obviously, newer stores continue to ramp. Our immature stores, both in the company and the franchise side. 2/3 of that growth year-over-year was ticket. Net price contributed, premiumization contributed. That's partly due to the evolving car park. More cars require premium lubricants. It's going to be a natural tailwind for us for some time to come. Year-over-year NOCR growth also contributed. All three components of ticket that we talk about were contributors, and transaction growth was good across the system. Very healthy. With that, what are you seeing from a customer health perspective? Are you seeing any pickups in deferrals, usage of coupons, anything else? Just tie that to sort of how you're thinking about 3Q. Sure. The customer base has been incredibly stable. Customer activity has been what I would call very normal, and we've not really seen any change. We've not seen trade downs. We've not seen deferrals. Day interval has been very consistent for really the past couple of years. It really hasn't changed much. If anything, it's maybe a tiny bit lower now than it was two years ago. Miles driven between oil changes have not extended. They've been very consistent as well. As we look at the quartiles, and we kind of quartile our customer base based on household income, we haven't really seen any changes across that customer base. It's just been very normal. Couponing, we also look at that, or discounting across the customer base. That's also been very consistent to even down a little bit. Partly due to increased marketing efforts that we've made. We're getting more sophisticated in terms of how we market. Several years ago, it tended to be more of a blanket coupon approach or a percentage off approach. We now are very targeted in the way we do marketing. We have a lot of information about our customers. Almost 85% of the customers we see, we've seen before. We know what it takes to motivate them for that next visit, and it's not one size fits all. Some need more, some need less, some need none. They just need to be reminded. We know this about our customer base. With that, it's obviously been a few weeks now, but it sounded like 3Q got off to a nice start h eld in. We'll talk about some of the pricing dynamics in a little bit. Anything else that we should consider as we think about 3Q and potential risks or opportunities? Sure. We talked about April a little bit on the call because we had finished April by the time we did the call. April was a good month. Very consistent with what we saw in the March quarter in general. Again, same story around customer behavior. Really no change at all. We just finished May, and while we don't have full financials, I can say that May was very much like April, which was very much like the March quarter, et cetera. We're not really seeing any kind of change in customer behavior. It's been very consistent. One of the topics that we've been speaking a lot with investors about is just we've seen rise in base oil prices. Obviously, those have gone up significantly, really since sort of in the March time window. Can you just talk about base oil math and sort of help level set how we should think about how much pricing you need to take in order to offset some of the increases? This was obviously something we saw in 2022. If you could just remind us on how to think about that. A little bit of context around that. Obviously, the finished lubricant product is important to us. It's what we deliver as part of the service. Today, if you think about our cost of goods sold, all products that we deliver as part of the service are about 20%-25% of COGS. The largest single item would be labor, then product, and then remaining store expenses that would make up the cost of goods sold bucket. While cost pressure from a lubricant perspective matters in the context of all the services that we provide, in the context of an average ticket that's north of $100, an increase of $1, $2, $3 per gallon in lubricant cost doesn't really have as much impact on our cost structure as one might expect. It's just not as big an impact for us. From a pricing perspective, we tend to have about 30 days notice before we will see a cost increase. It allows us time to analyze our market from a company store perspective and make decisions around what kind of pricing actions we want and need to take to recover that increased cost. That's what we've been doing. We feel very comfortable that we have taken enough pricing action to cover all known product cost increases that we have experienced or will experience. We also obviously provide that information to our franchise partners. They're independent price setters. They decide what they want to do. Just to kind of put a bow around that, when decisions are made from a company or a franchise perspective, because we have a common point-of-sale system across the entire network, we actually make those pricing changes centrally with our master data team so we can do it efficiently and effectively and accurately, from a centralized perspective. We do the same thing for our franchise partners when they make those decisions. Right. Right. Yeah, so you're able to do it quickly and be able to test. What are you seeing in the indices today? Where is the base oil index today compared to a few months ago and sort of how can we track some of those moves? We started seeing the indexes move up in the March timeframe. We didn't have any cost increases in the March quarter, but we did start to see the indices move up. That's continued as the Iran conflict has continued to linger. Again, based on what we know today, we have baked all of that in from a pricing perspective to maintain margin dollars. Where the indices go is not something that we can predict. I think it's safe to say that the longer the conflict lingers especially with likely higher demand for summer drive season, we're likely to see higher prices continue. Impossible to predict. What we have to commit to is our ability and our commitment to take the right action to protect our margins on a dollar basis, and also to be as transparent as we can about what's happening in the world. You guys took price quite quickly. Some of your franchisees did as well. Can you talk about the franchise side, sort of has everyone taken price? Where does that stand today? I would say most of our franchise partners have adjusted price to varying degrees. Again, part of it, in terms of how much and at what tier, because we offer conventional, we offer MaxLife, and we offer full synthetic. All of these tiers are not created equally, so geography matters. Oil change mix matters in terms of a market or a territory. Each franchise partner, and we do the same thing from a company perspective, has to evaluate literally on a market by market basis, where is the appropriate place to take that price and how much across those three service tiers. That's what we do and that's what our franchise partners do as well. We can see that based upon the decisions they make in terms of how they change pricing based on which tier they change and by how much. Bring that back to 3Q comps. Is it sort of low to mid singles? Is this how we should think about the lift to ticket, or what's a good way of sort of contextualizing? I think we'll clearly see tailwind on the ticket side from a comp perspective because of the pricing action that's been implemented and initiated. I think though, as a reminder, I want to be balanced about this, there's a percentage of that ticket comp that is there to recover lost margin dollars or otherwise lost margin dollars because of the cost increases that we've seen. If you go back to the 2022 timeframe, we had a lot of inflation, both in base oil and in general. The company took a lot of pricing actions during that timeframe. The comp was north of 10% there for a period of time. Again, a lot of that was to recover cost, not necessarily impacting the bottom line from a margin perspective. What I will say is that when we take price, when the franchise partners take price, posted price never comes down. While we're protecting margin dollars today, down the road, there is certainly some potential for margin expansion if we see product costs start to come back down. We would not naturally reduce prices. That's not something we've done historically. Something that you mentioned is that you took enough price to offset the increase on a dollar basis. Obviously, that's a little bit of a margin drag. I think you talked about 20%-25% of your COGS are input costs. How should we think about the potential margin hit that you may see from all your pricing actions? The easiest way to think about it probably is our ticket is north of $100, but let's just peg it at $100. If we have to raise price on average across the system $3 to cover that cost, that's the hit, basically. That's the way the math would play out is you would kind of take that as against your gross profit number and say, "Okay, gross profit dollars are going to stay the same. Sales are going to be $103." Divide one number by another and you get the hit. Yep. It's fairly modest on an overall basis. Right. I would say, and it's also important to remember that we continue to do all those other things we talked about to improve margin on an overall basis. This is EBITDA margin. We're continuing to push on SG&A leverage. We're continuing to push on store expenses, on getting more efficient, in a number of ways. We've gotten a lot of progress from the labor work that we've done, but there's still more to come there. There are going to be puts and takes in the overall gross profit margin percentage line because of all the things that we have in flight today. We'll touch on some of those, but just last one on some of these dynamics. Can you talk about your supply chain? Can you speak to sourcing? Obviously, one of the conversations that investors are having is just around any potential shortages. We talked about the pricing side, but as far as having the actual inventory. If you could just walk us through where do the products come from, how your supply chain works. Whether there is risk or not shortages down the road. Sure. Well, we obviously have a strategic supply arrangement with Valvoline Global Operations, who up until three and a half years ago, we were all one company. Now that business is owned by Saudi Aramco, and that strategic partnership is strong and ongoing. They provide essentially all of our lubricants today. That supply chain is a combination of direct supply where it makes sense for them to do so, third-party distributor otherwise, and that's both for company and franchise operations. Again, we have the largest quick lube network in North America. We do 30 million plus oil changes per year. We are a very large customer. I think it's also important to note that we also share a brand, and that brand is very important both to us and Aramco and to Valvoline Global Operations to protect and grow. We're both investing in that brand. So I can't say that there's no supply risk. The longer this conflict drags on, the more risk there is in general from a macro perspective, our business aside or included. I feel really good, we feel really good about where we are today. For the foreseeable future, we do not see supply risk in our network. That's certainly great. With that, I think we probably should pivot to Breeze. I think it was December 1st of last year. It was When you closed on the long-awaited Breeze acquisition. Sounds like integration is maybe a little bit ahead of schedule. Seems like the stores are doing well. Just can you provide an update on where you are in the integration process and sort of the timelines that we should all think about? Sure. Things are going well. Due to the FTC process, we didn't get as much of an opportunity to really dig down into the business and the team before we closed. I mean, we did our due diligence up front, but typically in one of these transactions, you sort of start integration planning the day after you announce the transaction. We weren't able to do that fully. We were doing it on our side, but we couldn't interact. Once we closed the deal on December 1st, very focused on day one stability, and day one stability really runs about a month. You make sure that all the parts are working the way they need to, information is flowing, that people are connected the way they need to be, two in the box and all that. That went very well. I think one of the pleasant surprises that we had is culturally, not only at the senior leadership level, because we had spent time with the senior leaders, but as we got down into the organization, both from an operations and a support function perspective, the culture within the Breeze organization mirrored up very nicely with the Valvoline culture. I've done a lot of integrations in my life, and cultural disparity is the hardest thing to overcome. We don't have that problem here, which is great. I think another positive is we buy 30 to 40 stores per year. We convert them, we integrate them into the system. We've been doing that for a long time. Our franchise partners have as well. While this is a really big chunk to swallow, which is why it takes time to integrate and convert, these stores look a whole lot like the stores that we would buy. Many of them are better than the stores we would buy potentially, but there's a lot of potential there. We have first integrated the management team, which has gone very well. We've actually integrated some of the lower-level support function folks as well. All that's moving along the way we would expect it to. We hadn't converted any stores as of the end of the March quarter. I think we said on the call we had converted some. We've continued down that path to convert stores to the Valvoline brand. That's gone and is going well. We're going to continue down that path. It will be probably a couple year journey or so to get that done. It's still early days. We've been really pleased with the integration and the conversion process and progress so far. Yep. It's gone well. Obviously the business is performing well, which we're happy about. We talked about that in the March quarter call, a bit above expectations for the March quarter, really for two reasons. Number one, the team is executing really well at the store level, and we're seeing that flow through the numbers. Number two, we've been able to pull forward some SG&A synergies. Those SG&A synergies were on the list. We just got them earlier than we expected to, and so that's helped us from a performance perspective thus far this fiscal year. When we closed the deal, we talked about this at our investor update, we expected about 100 basis points of margin compression across the system because of Breeze bringing in 162 immature stores. You tend to get margin compression, and it wasn't nearly 100 basis points in quarter one. We'll see how the rest of the year plays out. So far, so good on that front. Can you remind us how we should think about unit economics once you do begin to convert those stores, both the revenue as well as on the cost side? Sure. Obviously the margin profile is lighter because they are what we would classify as immature stores. Breeze today generates $1 -1.1 million of AUV. Our average across the system is $1.8 million. The value proposition is moving these stores up the maturity curve so that they look a lot like the average Valvoline store does today. Now, it takes a few years to get there. Typically, a ground-up store, if we build one, the first-year revenue would be about that $1 -1.1 million. Then it ramps to the $1.8 million over the next, call it, four years-ish. When we buy a store and convert it depends on how many cars the store is doing at the time we buy it and convert it, but it's a three, four-year journey to actually ramp those stores to maturity as well. They very consistently do that. A lot of that confidence that we have and the ability to do that is really on the front-end analysis. Very sophisticated retail analytics and diagnostics that give us a very high level of confidence in terms of how many cars per day a location will support. We did all that work around the Breeze stores before we did the transaction. We have a point of view about what those stores can do from a potential perspective, and we fully expect that that plays out just like it would with the stores we buy ordinary course. When you provided the updates around your expectations for the Breeze numbers, obviously, it was right after the acquisition was closed. You couldn't spend at the time much time with that team. Do you see potentially more opportunities than what you originally thought when you combine that with early wins, or is it just too early to tell? I think it's too early to tell. I think we need to get a little farther down the path on the conversions because as part of the conversions, obviously, you're converting to the brand, which will give you more recognition. You're converting the POS system and the related SuperPro process. You're training the team. You're enabling the unit to do better, but it does take time for that to play out. We can, I think, have another conversation about that down the road a little bit. We're encouraged by what we see so far. Yeah. With that, let's talk about your long-term store TAM, as well as your path to getting there. You obviously plan on continuing to accelerate store growth over the next couple of years. Talk about what you think the white space opportunity is and just sort of the pace of store growth that you want to see. Sure. As I said, we have about 6% market share today. Our 2,400 or so stores are within about a 10-minute drive of around 40% of the car park. We have a stated objective to get to 3,500 units. As we talked about in our investor update, we expect to be north of 2,900 units by fiscal 2028, growing from there into that 3,500. The idea and part of this is around, I mentioned it around the franchise partners have signed up for new development agreements. They're investing $1 billion of capital. That's, call it, 650 stores. That's north of $1 billion of capital. That's going to help us hit those numbers over the course of the next few years. We did about 170 stores last year. The guide this year, including taking Breeze off to the side, would imply 170 stores-200 stores, which we fully expect to achieve. Outside of the Breeze, 162. Ultimately, we have a stated objective to get our franchise partners ahead of company store adds. Ideally, we're at 250 per year, with about 150 coming from the franchise side and about 100 coming from the company side. That would be our objective going forward. You touched on your franchise base. Obviously, they've been partners with you guys for quite a long time now. Can you just provide any more color on sort of the complexion of your franchise base, sort of institutional capital versus other types of capital? Just how are conversations going as you're looking to add more partners into the system? Sure. Today, we have between 40 and 50 franchise partners in the system in total. It is a fairly concentrated franchise partner mix, though. The top six to eight franchise partners make up 70%-80% of the store base, they're good-sized businesses in and of themselves. They are a mix of what I would call the long-term franchise partners who have continued to grow their system over the course of time and a couple of fairly new entrants that have invested in existing franchise partners and committed to grow that business. These are private equity firms. We currently have three of those in the system, two that are investing heavily. One's very new. They believe in the model. They understand the return proposition that the model brings, and they are investing to grow those systems in a pretty aggressive way, which is why we partner with them. As we look to the future, we have a lot of inbound interest from a franchise partner perspective. It's great because it allows us to be picky and to really be thoughtful about bringing partners into the mix that, number one, share our passion for the business, number two, can sign up for the growth algorithm that they need to sign up for to continue to grow the network and mature the network that they may acquire. Just really commit to the overall business model, the overall service proposition, the customer experience that we expect. It's not just signing up with capital, it's signing up across the board. To really continue to grow the brand and the business in the right way. I just want to pivot back to the acquisition. One of the things that you guys did is you paused the buyback. You levered up the company a little bit to acquire Breeze. You are now starting to de-lever. Can you just talk about where you are on that journey? When do you expect to get back to sort of the high end of your target? Once you do get back, how quickly can we see buybacks start to ramp? Yeah, it's a great question. I'll start kind of high level. Capital allocation policy has not changed. We'll continue to invest in buying and building and converting stores, because we continue to generate very, very strong returns, mid to high teen IRR, 30% cash on cash returns at maturity. That's true for us and our franchise partners. We'll continue to invest. As we get down to the target leverage, it would be our expectation that secondary use of cash is going to be returning to the buyback space. It's a core part of our capital allocation strategy. Yes, we did elevate our leverage a bit when we closed on the deal transaction. In the March quarter, so heading into the March quarter, we were at 3.3 turns of leverage on a net debt to EBITDA basis. Coming out of the March quarter, we were at 3.1, so we took 20 basis points off, which is actually pretty solid in a quarter. If you were to extrapolate that, and I'm not committing to it, but if we can extrapolate that would imply that within about three quarters, we're back into the buyback opportunity. State the obvious, personally, I feel like our valuation is a very strong buy. I do put my money where my mouth is. I buy shares, and that's public. I believe in the story, I believe in the potential, not only for growth, but improved profitability and also strong free cash flow growth over the course of the next few years. The algorithm around all of that, I think, is incredibly compelling. Yep. I'd love for the company to be in the market today, but we have to do the right thing in the right way in terms of what we've committed to doing. Sure. It sounds like once you get to the high end, sort of you'll look to get potentially quite aggressive. Yes. Something that you touched on a few times, and I think it's very much underappreciated, but it's your SuperPro system. I actually think it's one of the biggest moats that you have around the business. Can you just provide more color, sort of how does that set you apart? How is that something that you're able to easily leverage when you do acquire companies? Sure. Well, as I said, we have a single point-of-sale system across every store in the U.S., company and franchise. That system, which is enabled by the SuperPro process, helps guide our technicians through the process when a customer comes into the bay, and it also helps educate the customer about what their manufacturer recommends that they do at certain intervals, whether it's time or miles or some combination of those two things. That process allows us to be very consistent in the service that we deliver, whether you go to store A or store B, whether it's a company store or a franchise store, it makes no difference. The process and the delivery should be exactly the same. Along with that, the 270 hours of training that we supply to our technicians is very critical. It helps them learn and understand not only what the process is, but actually how to execute the process well and how to execute it each time in a very consistent way. Just for a little bit of a primer, when a customer comes in the bay, if we've seen them before, the system will prompt the technician to ask the customer if they would like the same oil that we used last time. The vast majority of the time, the answer is yes. If they're a new customer, haven't seen them before, haven't seen the car before, the technician knows to say, "This is what the manufacturer recommends that we put in your car. Is that what you would like for us to do?" Based on what the SuperPro process would say. Usually the answer is yes. We then go through the process with what we call the visuals. Those are things that we show the customer, we show the guest, and let them decide if they would like to take advantage of a new engine air filter, a cabin air filter. We show them a new one, we show them their existing one. Based upon what they see, they'll make a choice. That's part of the process. We then can turn to the OEM recommended services that we offer and provide. At that point, we literally turn the screen to the customer and show them, "Here is what the manufacturer recommends you do," whether it's a radiator flush or a transmission fluid change, a differential fluid change, what have you. We show the customer what's recommended. We have Carfax data integrated into our point-of-sale system, so we not only know what we've done to the car, we know what others have done to the car, if in fact it has been taken to an outlet that uses Carfax. So we can provide a more complete picture to the customer in a very informative and educational way. It's not about the sales pitch. It's really about informing and educating and letting the customer decide what they want. Now, if they choose to take advantage of a service that's recommended, that's great. We'll perform that in the store, and they'll be on their way. If they choose not to, we know that the service was offered. We know that the service was declined at that time. We will, at the appropriate time, provide a reminder to that customer that, "Hey, we know that your vehicle is due to have this done. We'd recommend that you come in and do that," and usually there's a coupon or a discount attached to that. Yep. I think that's a great way to end this. Thanks a lot. Thank you. Appreciate it. It's great to see you. Yeah.