Thank you all for joining, and welcome to Valvoline's Q4 2022 Earnings Conference Call and Webcast. [Operator Instructions]. I will now turn the conference over to your host, Sean Cornett, from Investor Relations. So please go ahead when you're ready, Sean.

Thanks. Good morning, and welcome to Valvoline's Fourth Quarter Fiscal 2022 Conference Call and Webcast. On November 15, 2022, at approximately 7:00 a.m. Eastern Time, Valvoline released results for the fiscal year and fourth quarter ended September 30, 2022. This presentation should be viewed in conjunction with that earnings release, a copy of which is available on our Investor Relations website at investors.valvoline.com. Please note that these results are preliminary until we file our Form 10-K with the Securities and Exchange Commission. On this morning's call is Sam Mitchell, our CEO; Lori Flees, our President of Retail Services; and Mary Meixelsperger, our CFO. As shown on Slide 2, any of our remarks today that are not statements of historical fact are forward-looking statements. These forward-looking statements are based on current assumptions as of the date of this presentation and are subject to certain risks and uncertainties that may cause actual results to differ materially from such statements. Valvoline assumes no obligation to update any forward-looking statements unless required by law. In this presentation and in our remarks, we will be discussing our results on an adjusted non-GAAP basis unless otherwise noted. Non-GAAP results are adjusted for key items, which are unusual, nonoperational or restructuring in nature. We believe this approach enhances the understanding of our ongoing business. Reconciliation of our adjusted non-GAAP results to amounts reported under GAAP and a discussion of management's use of non-GAAP and key business measures included in the presentation appendix. This information provided is used by our management and may not be comparable to similar measures used by other companies. The announcement that Valvoline signed a definitive agreement to sell its Global Products business resulted in the former Global Products segment being classified as discontinued operations for purposes of GAAP reporting, with the Retail Services segment coming to company's continuing operations. Results of continuing operations are comparable to those previously discussed on a pro forma basis at the time of the announcement. On Slide 3, you'll see the agenda for today's call. We'll start with an update on the sale of Global Products that we announced in August and an introduction to the post-transaction Valvoline, where our company will be focused fully on retail services. We will then talk about our growth strategy for the business and end with a review of fourth quarter and full year results and guidance. I'd like to turn the call over to Sam.

Thanks, Sean, and thank you all for joining us today. The sale of Global Products marks the completion of Valvoline's transformation from a complex story with 2 very different businesses into a simple pure-play retail services business that is best-in-class in the industry. Valvoline's Global Products and Retail Services are 2 differentiated businesses that have their own investment attributes, growth and profit drivers and strategic priorities. With the success of our retail strategy over the past several years, retail services has grown to a point where it can thrive as an independent business. Today's call will focus largely on retail services, including our strategy for growth and value creation. The new Valvoline is a high-growth, high-margin, less capital-intensive business that has less operating risk given the high percentage of franchise stores. We will have a focused capital structure and capital allocation strategy. This will drive the ability to make more targeted investments to capture opportunities in an evolving car park, including the growth of electric vehicles. At the same time, investors will benefit from increased transparency and clarity due to the simple nature of our new business model. Our team has been hard at work to complete the separation. We continue to anticipate the closing will occur in early calendar 2023. Total proceeds from the transaction will be $2.65 billion in cash and approximately $2.25 billion net proceeds. We intend to use the majority of the anticipated net proceeds to accelerate the return of capital to shareholders through share repurchases, with the remaining portion used for debt reduction. Today, we announced the Board's authorization of a $1.6 billion share repurchase to effectuate this return with the goal to complete the share repurchases within 18 months. Turning to Slide 6. Let's look at the new Valvoline. We have a 150-year history…

Thanks, Sam. I appreciate the opportunity to be on the call today. I'm humbled to be part of this amazing team, and I'm excited to share where we are headed and our focus for fiscal 2023. We have a simple but highly effective model for delivering value. Same-store sales growth coming from both transaction and ticket plus growth in units, combined with incremental sales from service expansion, together drive higher revenue, margins and free cash flow. We'll execute on this formula with a continued commitment to operational excellence to ensure we capture growth long into the future. Now let me break these down in more detail starting on Slide 15. First, we're confident that we'll drive -- that we'll deliver 6% to 9% in same-store sales growth with growth in both transactions or the vehicles we serve and the average ticket. Looking at transaction growth for our mature company stores, we've delivered 4% compound annual growth rate over the past 5 years in the number of vehicles served per day, which is faster than the do-it-for-me oil change industry. And we expect this growth will continue for 3 reasons. First, as Sam mentioned, the age and complexity of vehicles is driving growth for preventive maintenance service providers. Second, our value proposition of quick easy trusted service could not be more relevant to consumers and has enabled us to gain market share from non-Quick Lube operators. And last, we have significant capacity available in our existing stores and are innovating ways to improve upon our service speed, which will increase vehicle throughput and delight our customers. In the past 7 years, we've grown from an average of 40 to 50 vehicles served per day for our mature stores, and we do not see any barriers getting to 55 in the next…

Thanks, Lori. The announcement that Valvoline signed a definitive agreement to sell its global products business resulted in the former Global Products segment being classified as discontinuing operations for purposes of GAAP reporting with the Retail Services segment becoming the company's continuing operations. The historical financial statements have been recast based on the accounting rules governing assets held for sale and discontinued operations to reflect these statements consistently with the go-forward business that will remain. As part of this work, we were required to reassign indirect SG&A expenses, including those formally unallocated expenses to continuing and discontinued operations. We also evaluated the treatment of the sale of products to our independent franchisees and Express Care operators, following revenue recognition guidance and determined that the new Valvoline is acting as an agent in the sale of product to our independent partners. The historical continuing operations financial statements have been recast to include this agency accounting treatment, reducing sales, increasing operating margin rate with no impact to profitability. Finally, the historical financial statements have also been recast to include the sales and cost impacts of the supply agreement that will be in place between the 2 businesses once the sale of Global Products is completed. Results of the continuing operations are comparable to those previously discussed on a pro forma basis at the time we made the announcement. Slide 24 bridges the historical segment results for Retail Services to Valvoline's adjusted EBITDA from continuing operations after the impact of the changes previously described. Recall that our previous guidance for Retail Services segment EBITDA for fiscal year '22 was $415 million to $425 million. We delivered $421.6 million of segment EBITDA for the fiscal year. The bridge from segment adjusted EBITDA to continuing operations adjusted EBITDA accounts for the retail services portion of…

Thank you, Mary. I want to take a minute and thank our team at Valvoline across retail services, global products and supporting resource groups for their hard work over the past year. Fiscal year 2022 was a busy year given our corporate strategic actions in addition to the challenging macroeconomic backdrop. At Valvoline, we said it all starts with our people. And frankly, they have delivered over the past year. With the sale of Global Products on track to close in early calendar 2023, I'm excited about what the new Valvoline can deliver for our shareholders. We have built a business model that generates significant, consistent and predictable profit, cash flow and return on invested capital. Our focus on making car care easy by delivering a superior quick, easy and trusted customer experience continues to drive loyalty and new customer growth, and we carry excellent momentum into fiscal 2023. The growth opportunities are tremendous. We have plans in place to build on our competitive advantages by growing our store network and with an increased focus on franchising, leveraging technology and developing new capabilities for an evolving car park. The new Valvoline presents a high-performing fast growth retail service business investment opportunities. I will now turn the call back over to Sean to begin the Q&A session.

Thanks, Sam. [Operator Instructions]. With that, please open the line.

[Operator Instructions]. We have the first question from Simeon Gutman of Morgan Stanley.

This is Michael Kessler on for Simeon. First, I wanted to ask for an update on the pricing back on the retail services, and you alluded to the price cost lag, which has been a headwind in the last couple of quarters as it was seen pretty volatile base oil pricing. So can you just kind of let us know how that's trending, how you feel about pricing and the cost of goods backdrop in retail services? And if there's any embedded improvement as we move through this upcoming fiscal year?

Michael, this is Mary. We have seen substantially more stability in the product pricing over the last several months, and we're encouraged by that. We actually saw 1 base oil cost reduction that will modestly help us in fiscal '23. In addition to that, we did take an additional price increase across the company store portfolio in September to pick up some additional costs that we had primarily in both labor and product in terms of kind of meeting the full recovery of the margins. And I'm happy to report that on a per transaction basis, our margins have fully recovered here in the fourth quarter, and we expect to see continued margin improvement into the new fiscal year. That margin improvement will be driven by a couple of things. One is just more efficiencies with sales growth, but we'll also be lapping those tough couple of quarters that you referenced. -- in Q3 that will overall be helping the margin rate with the full pricing realization. So that's kind of where we're sitting today.

Lori, why don't you comment on the pricing environment been from a consumer perspective?

Yes. So the pricing, particularly in September, typically when we roll out pricing, it takes a little while for us to get the full price increase through, and our ability to do that was very strong this time, and we have not seen any impact on transactions or we closely monitor our customer feedback also, and we are not seeing any increased commentary around price, and this is giving us a lot of confidence that we're priced appropriately. We continue to benchmark our pricing and run tests in different stores, just so that we can be responsive to where we place our pricing with the market. But we feel really good right now about the price realization that we've captured through September and into the new fiscal year.

Okay. That's helpful. And maybe just a related follow up. The bridging to the mid to maybe even high end of the longer-term EBITDA margin guidance, is that fully or mostly dependent on the stability and these factors you guys are talking about right now? Or is there also -- are there other components as it relates to -- I don't know if it's a new store maturation, those kind of move up the curve that gets you to the mid to higher end. And is that something that ultimately gets achieved when the business reaches kind of a level of maturity on store count and the underlying growth? Or that's something that can be achieved even as we move into that direction.

Yes. The biggest driver in driving that margin improvement over time is same-store sales growth. And so the performance of the business model, winning new customers and driving ticket performance, increased service penetration, this is what has been driving the mature store performance. And so you saw that leverage in the information we shared in the presentation with growing top line sales but also strong EBITDA increases in this period. So as these newer stores that we've added over the last 5 years become mature, there is a significant addition that they make to both bottom line profit, but also begin to enhance the EBITDA performance, overall margin performance for the business. So we do expect over this long-term guidance to see the margin performance grow from that lower range to the higher range, 26% to 29%, over time with increasing leverage in the system.

Sam, just to add to that, I definitely agree with what Sam is saying. The other piece of this is the mix between franchise and company stores. As we shift our reporting of revenue to an agency reporting, the mix of margin between franchise on a rate basis between franchise and company stores will actually start to shift as we grow the franchise new unit development, our margin rate will increase. And therefore, that's where you see the higher end of the range are delivering the same-store sales and starting to increase the focus of new unit growth more skewed to the franchise side.

And Michael, the final piece, of course, is SG&A leverage. We expect our SG&A growth and investments on a year-over-year basis over the future 3 to 5 years will be at a substantially lower rate than what we expect our top line growth to be. So we do expect to see overall rate enhancements through SG&A leverage.

Got it. Just real quick last one. Just the delta between the prior long-term pro forma targets and the ones you laid out today, the only difference fundamentally is the agency accounting, and there's nothing else that's like changing under the surface or on an underlying level. Is that right?

That's substantially right, Michael. We've gotten much more refined in the work that we've done in terms of the '23 plans since we spoke last, so there are some modest underlying changes. But for the most part, the biggest difference is just the move to agency accounting, which does not affect profitability, but reduces sales and increases margin rate.

We now have Mike Harrison of Seaport Research Partners.

A lot to digest here. I really appreciate that you guys laid out the growth algorithm in such detail. I'm curious, you referenced some investments or focus on trying to increase speed of service and trying to get increasing number of vehicles per day. You mentioned you didn't see any barriers to getting to 60 vehicles per day. Can you elaborate on some of the changes that you're making? And I'm curious at your best stores, how many vehicles per day are you averaging?

Thanks for the question. I'll cover some of this, and then Sam can add. As it relates to speed, there are a number of things that we have piloted in our highest volume locations, including to starting the service outside of the bay and also moving additional services that don't require the pitted floor into the parking area, and that is allowing us to move the oil change customers quickly through our stores. We're also looking at -- we are looking at our capacity on a per day basis. We have 2 base stores, we have 3 base stores. We have 4 plus base stores, and we're actually looking at our capacity by bay and then staffing relative to demand. And what we recognize is that, obviously, during the peak time period, which is middle of the day, and then on the weekends, we have to find ways to get cars through the bay quickly. And so lot management, similar to other service providers, for example, in fast food, it's all about lock management and using technology and tools to allow our teams to manage the cars and get them through the service experience faster is a key unlock that we've already started and we'll continue to roll out.

Just to add to that, Lori also mentioned in the presentation, the formation of our central ops team, which is all about how to support the stores so that our store personnel can stay completely focused on how that team is operating to service our customers and delivering that quick, easy, trusted experience. And we know from our research that speed is of the essence when it comes to satisfying customers, and that our satisfaction drops when we take too long, if our service performance and wait times are too long. So we're going to continue to focus on the speed of service, making sure that we're as convenient as possible, and there's operational opportunities that help us with that speed component. But we also feel that the market, the drive for convenience, the need for convenience and what consumers are looking for is something that is really plays to our business model, the standard car business model. And so from our store ops to our marketing programs that help consumers understand what Valvoline can do for them, that's what's driven our growth from 40 cars a day to 50 cars a day. And as we said, we see no barriers to go into 60 cars per day. Our stores have that capacity.

Yes. And Mike, the top third of our stores do about 70 -- see about 70 cars served per day, and the absolutely best performing stores in the chain are doing over -- seeing over 100 vehicles a day and still growing. So when we start to see a store that's really capping out, we'll look at one of the increase in density and adding a store in the area to be able to continue to capture that market share. But frankly, we've continued to see strong same-store sales performance at those highest volume -- transaction volume stores continue. So I think the work that we're doing is continuing. One of those central services that we've been doing for a while is a central call center so that we don't ask our store personnel to answer the phones. We do that through a central call center, and that's been very effective. And that's similar types of central operation services. We'd like to move inventory management and to be more centrally supported, other types of services that we can do from a central ops perspective to really keep the store management and employees completely focused on the customer experience.

All right. All of that makes a lot of sense. And then I had a couple of questions related to the non-oil change revenue slide, I believe it's Slide 20. A little bit surprised to see that the fiscal '22 growth in non-oil change revenue was pretty modest. I assume there was some pricing in there. I also know that you guys have talked to us in the past about having some issues, maybe COVID related, where your stores weren't staffed appropriately and maybe you were missing some opportunities around non-oil change revenue. So maybe just kind of talk about where you see that opportunity from the $21 ticket in '22 to move that higher near-term.

Yes. Definitely, a trend in FY '22 was impacted by the price increases that we made on the oil change side. We have taken some service, some non-oil-change service increases in FY '21. So we -- for some of our core visuals. And in FY '22, we didn't make as many price increases on a percentage basis. So a lot of the difference in the growth rate is driven by the oil change pricing increases. That happened in FY '22, and that will continue in FY '23 because we have pricing increases that we've taken in FY '22 that we haven't fully lapped. So you'll see a bit of that. However, this is the reason why non-oil change service penetration is a big focus. We see a difference between sort of top quartile and last quartile stores of about 80% different. And this gets down to, one, the turnover on our team because these services, other than the basic visuals, the more extended services like fluid flushes do require you to have the right training to both sell and educate the customer on the service but also to complete the service. And with our turnover that we experienced this year, which many retailers did, we have a lot -- we had a lot of training that we needed to do, such that our team could confidently recommend and perform the services. So we see that piece of it coming back in FY '23. Our turnover has flattened. It's now -- our retention is improving, and so that allows us to have more experienced store team members there to serve the customers.

All right. And then last question I had is around the supply agreement that you have with the Global Products business. Curious to understand how prices pass through from Global Products. Is that based on an index? Does the new owner of Global Products have some kind of power to push pricing through unilaterally? Or is there kind of a third-party determination on what's happening with those finished lube prices?

Yes, Mike, thanks for the question. So the supply agreement is essentially a cost-plus agreement, which operates similar to an index. But we basically have pricing adjusted monthly based on historical costs that both businesses are very familiar with as we've operated historically as a single business. We have several ways to test the pricing within the contract terms. On the third anniversary of the contract, we can take incremental volume out to bid to make certain that the pricing for the volume is consistent with what we could see in the market from other suppliers. Our intention is, and we believe we will have a very, very good long-term relationship with Valvoline Global Products. We've historically had a great supply chain relationship with the businesses, and we expect that to continue, but there are several mechanisms by which we can test the market moving forward. So I feel really good about the way that the supply agreement is positioned and think that it will be a long and mutually beneficial relationship between the parties.

And sorry, just to clarify, the cost plus, is that a cost plus some penny margin or cost plus some percent margin?

It's a cost plus penny margin. Mike, I would clarify that on other ancillary products, it is a cost-plus percentage. So on things like wipers and filters and batteries, it's actually a cost plus percentage. But on the vast majority of the supply agreement, which is in the lubricant space, it's a cost-plus penny margin.

We now have the next question from Jeff Zekauskas of JPMorgan.

On Page 4, you show same-store sales growth for company-owned stores and franchisees, and the franchisees grew 15.5% in 2022, and the company-owned stores grew 11.5%. Why the 400 basis point difference?

Jeff, it's primarily driven geographically. We've actually seen in the new fiscal year, we've seen some reversal in that trend with companies or same-store sales growth outperforming franchise same-store sales growth. So it really is dependent on what you're up against from a comparable perspective. And you almost have to go back and look since the beginning of COVID where COVID hit franchise territories up in the Northeast much more severely than it did other company markets. And so when those markets are up against that, they had stronger sales performance. And so most of the variations are geographic. I would also say that we saw some of our franchisees respond more quickly passing through pricing than what we did at the corporate level. And we've talked about the impact that we had last year and the lessons that we've learned from that moving forward. But I would tell you it's primarily a geographical impact. And over time, if you look at the performance, very consistent between company and franchise.

Do you have any cost-cutting programs? Now that you've separated off this big part of your business, is there any overhead that can be taken out or you're efficient now?

Overall, with SG&A and the investments that we have in place, we feel good about the SG&A and the investments that we have with our team and the capabilities that we're building with regard to the evolving car park in preparation for the future. So our starting point, I think, is appropriate. But I think over time, what we're going to see as we grow, we're going to see some significant leverage in that SG&A and benefit from the investments that we have made. So that, again, gives us confidence in that forecast for our future EBITDA margin improvement.

And Jeff, I would add, we're keenly focused on expenses with the separation and to ensure that we're not adding unnecessary expenses, and I'm looking for opportunities to contain costs or reduce costs especially across the shared service areas that are going to be now dedicated and focused just to the retail business going forward. So the good news is the business that we're selling requires a full staffing, so there really isn't any stranded costs that we have to deal with as part of the sale of the business. But we will be keenly focused in making certain that we're as efficient and cost focused in terms of maintaining our SG&A, reducing our SG&A over time, as Sam said, going forward.

Maybe as a last question. What's a little bit puzzling about your returns is, obviously, there's a lot of price this year because there's a lot of raw material inflation. And there's also a growth component because you build new stores. And those statistics are hard to disentangle in order to see what actually your volume changes are. Like on an organic basis, excluding the benefits from the new stores you build, what are your volumes doing either for the quarter or the year?

We actually saw, Jeff, from a same-store sales growth across the year, pretty balanced growth between transactions and ticket. So we -- with a 13.7% same-store sales growth, about half of that for the year came from transactions overall and about half of it came from ticket overall. Does that answer your question?

Yes, it does.

Yes. I think I'll just add, if you look at Page 15, you'll see what the mature stores -- you can break down what mature stores did on a vehicle served per day, which was about 5%, a little bit more than around 5% growth. And then the ticket growth on Page 16 was also for our mature stores. And you should assume that our new stores would have a higher growth rate in transactions as they're ramping up. And that I think on ticket would be comparable for the most part.

So a lot of that growth probably on an annual basis came in the first quarter year-over-year where the comparisons were most easy. What's it been more recently?

In terms of transaction growth in our mature stores...

For this quarter?

Yes. In the start of Q1, so what we're seeing right now or Q4?

Actually, comment on Q4, and then we'll talk current.

Yes, that would be great.

Yes. In Q4, we saw -- yes, slightly higher ticket growth because of the price increases that we took lapping Q4 of last year, but there was transaction growth. And then as we move into Q1, it would be similar. We're saying we have significant ticket growth because of the price changes that were made year-over-year, but we are still seeing very healthy transaction growth in October, so the start of the year continues to look similar to Q4 in terms of the underlying momentum.

We now have Laurence Alexander of Jefferies.

Most of my questions have been answered. So 2 simple ones. One is, as you think about the sort of initiatives that you're using to drive ticket growth, what parts of the business model or the service offering are you pushing on that is most differentiated from your competitors?? And the second 1 is, thank you for the stats on the best-performing stores. Can you give us a sense for the SKU that is how many significantly underperforming easy-to-fix stores are there? Or is it more like the broad middle swath that you need to improve operations incrementally?

First of all, my opening comments on it is that, what's been really encouraging is that when you look at same-store sales performance, across the quartiles, we've seen positive momentum in both the high end, the high-performing stores and even the lower-end stores. Now some stores, in terms of their absolute growth opportunity, are more limited because of demographics. But we continue to see opportunities for improvement in execution, and Lori commented earlier on just the importance of staffing and training, the importance of retention because we know that when we've got the right team in the store that we can significantly impact the ticket performance and even the speed performance too, which drives transactions. So our focus in fiscal '23 is definitely to address some of those stores that we see opportunities for significant improvement and that comes through leadership, but also the support that those stores are getting from the corporate team too and keeping them focused on what's most important. But when it comes to the differentiation of what we do versus competitors, it is a combination of these things that have to do with a great customer experience, and that comes back to our mantra of quick, easy and trusted. And so that means that we are fast that we provide that convenience, staying in your car, trusted presentations. In other words, how we interact with the customer, how we present the services that they do for is so important. And this is where technology really comes into play because we've built a database that includes the customers' previous transactions with us. We have the owner's manual online for each of the OEMs and we even bring in data from the outside if they've had services done elsewhere. So this means that we're not presenting services that the customer doesn't need. We're focused on what that car needs to be properly maintained. And when we do this right, we just continue to build loyalty with that customer because they're not getting it anywhere else. Valvoline does this better than anybody else, and this is the model that's been delivering that 10% same-store sales growth performance. And what's encouraging to me is that we see opportunities to get better at what we do, and that is our focus in fiscal '23 and beyond.

We now have our next question from the line from Chasen Bender of Citi.

Just one for me. On the capital allocation, Mary, can you just remind us how you arrived at that 2.5 to 3.5 leverage ratio target. Just in context of the big opportunity having you guys to add stores and get to 3,500 and the expectation that you're going to accelerate store growth into the future?

Sure, Chasen, and thanks for being on the call today. As we look at the long-term leverage ratio, we're weighing the prudence of managing the business and the balance sheet in what is kind of an economically uncertain time with return of capital to the shareholders and investments in the business. And we also are looking at just from a overall our credit rating perspective, what we think where we'd like to see our debt capital credit rating such that we're able to keep a very reasonable overall cost of capital in the overall business. So the combination of those things basically triangulated us to believing that 2.5 to 3.5x kind of a fully loaded leverage ratio, including capital leases and pension -- unfunded pension liabilities with the right way for us to position the balance sheet. I will tell you coming right out of the gate, we'll be at the higher end of that ratio, maybe a little bit over it because of the share repurchase activity, while we're seeing EBITDA grow in terms of the return of capital from the transaction to shareholders. But over time, I expect over the long term that we'll manage well within that 2.5 to 3.5x, and we think that's a prudent place for us to manage the balance sheet.

[Operator Instructions]. We now have a follow-on question from Mike Harrison of Seaport Research Partners.

Just a couple more quick ones. First of all, at 1 point, you guys had talked about some potential plans to monetize the real estate holdings of your stores. Are there any plans in place to do that? And if so, can you provide us with any details on how much capital that might be able to generate?

Yes. Mike, that certainly is an opportunity for the retail business going forward for us to look at. It's not a massive opportunity, but it is 1 probably a few hundred million dollars. We haven't yet done all of the work, updated all of the work around that. we're pretty busy right now with the separation of the businesses and the sale of Global Products closing that we expect in the early calendar quarter. But I hope that we can give you a better update on what that opportunity is probably in the next 12 to 18 months. But it certainly is an opportunity for the retail business prospectively.

Understood. And then my other question is just on the cadence of earnings as we kind of go through fiscal '23. I don't believe you provided a Q1 EBITDA guidance number. But I'm maybe just curious as we're comparing for retail services to the $115 million in Q4, would your expectation be that it's higher in Q1?

We certainly expect year-over-year improvements in Q1 versus last year, and we expect there to be strong improvements versus Q2 because we're lapping a weaker quarter from last year. And then we certainly expect a strong performance in the back half of the year as well. So I would say, sequentially, you're going to see Q2 sequentially be a little stronger than Q1 and then with continuing strong performance in the back half of the year.

[Operator Instructions]. We have no further questions on the line. I'd like to hand it back to Samuel Mitchell for some closing remarks.

All right. Thank you. Well, I appreciate everyone's time this morning. Certainly, it is an exciting time for the company in preparing for the new Valvoline. We continue to be on track for a close in early calendar year 2023. We've also had a number of approvals -- regulatory approvals that have come through for us, including CFIUS, Hart-Scott-Rodino in the U.S., and we continue to make progress on the international front, too. So we're confident in a close in the coming months. Just want to say, too, that we've really laid out the fact that Valvoline has got a proven business model. We've performed in very challenging markets and continue to drive same-store sales performance, increasing the network of stores, and we operate in a very attractive preventive maintenance market. And so the confidence that we have in the future of this business is very high. We've got the right team in place. We have the right strategy and the right plan. And so Valvoline, the new Valvoline presents an outstanding opportunity for investors to invest in a company that delivers consistent and predictable profit, cash flow and return on invested capital with significant growth opportunities. Thank you.

Thank you all for joining. That does conclude today's call. Please enjoy your day. You may now disconnect your lines.