UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

                   
FORM 8-K

                                
CURRENT REPORT
Pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934
     
Date of report (Date of earliest event reported): September 7, 2017

                     
VALVOLINE INC.
(Exact name of registrant as specified in its charter)

             
 	 	 	
Kentucky	001-37884	30-0939371	
(State or other jurisdiction
of incorporation)	(Commission
File Number)	(I.R.S. Employer
Identification No.)	
 
100 Valvoline Way
Lexington, KY 40509
(Address of Principal Executive Offices)
 
(859) 357-7777
(Registrant’s telephone number, including area code)

                                 
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

 	☐	Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)	

 	☐	Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)	

 	☐	Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))	

 	☐	Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))	
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
 
Emerging growth company   ☐   
 
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.    ☐   

 
                    
Item 7.01.	Regulation FD Disclosure.	

On September 7, 2017, beginning at 8:50 a.m. ET, Chief Executive Officer   Sam Mitchell, Chief Financial Officer   Mary Meixelsperger   and Quick Lubes President   Tony Puckett of Valvoline Inc. (“Valvoline”) are scheduled to give a presentation of Valvoline’s business, including a deeper review of its Valvoline Instant Oil Change (“VIOC”) retail growth strategy, at Goldman Sachs 24 th Annual Retailing Conference in New York City.  The presentation slides, including Regulation G reconciliations, are being furnished as Exhibit 99.1 to this Current Report on Form 8-K.  A live audio webcast of the presentation is scheduled to begin at   8:50 a.m. ET   and can be accessed at http://investors.valvoline.com, where a replay of the webcast will also be available.
 
The information contained in this report is being furnished and shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”) nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933, as amended (the “Securities Act”), except as shall be expressly set forth by specific reference in such filing.
 
Statements contained in the exhibit to this report by Valvoline or management that state the expectations or predictions of the future are forward-looking statements intended to be covered by the safe harbor provisions of the Securities Act and the Exchange Act.  It is important to note that Valvoline’s actual results could differ materially from those projected in such forward-looking statements. Factors that could affect those results include those mentioned in the documents that Valvoline has filed with the U.S. Securities and Exchange Commission (the “Commission”).
 
Valvoline undertakes no duty or obligation to publicly update or revise the information contained in this report, although Valvoline may do so from time to time as management believes is warranted.  Any such updating may be made through the filing of other reports or documents with the Commission through press releases or through other public disclosure.
                       
Item 8.01 .	Other Events.	
           
On September 7, 2017, Valvoline issued a news release announcing that it has entered into a definitive agreement to acquire the business assets related to 56 quick-lube stores from Henley Bluewater LLC.  Valvoline also announced that it has signed eight new development agreements with seven of its largest VIOC franchisees for the addition of more than 160 stores by 2023.  A copy of the news release is attached as Exhibit 99.2 to this Current Report on Form 8-K and incorporated herein by reference.
                         
Item 9.01	Financial Statements and Exhibits.	
                      
(d)	Exhibits.	
                     
Exhibit	Description	
99.1	Presentation slides, published by Valvoline, dated September 7, 2017.	
99.2	News Release dated September 7, 2017.	

 

 

                 
SIGNATURES
 
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

 
 	VALVOLINE INC.	 	

  Dated:  September 7, 2017	By:	/s/ Julie M. O’Daniel	 	
 	 	Julie M. O’Daniel	 	
 	 	Senior Vice President, General Counsel	 	
 	 	& Corporate Secretary	 	

 

 

 

 

EXHIBIT INDEX

99.1	Presentation slides, published by Valvoline, dated September 7, 2017.	
99.2	News Release dated September 7, 2017.	

 

 

 

 

 

Valvoline's Quick Lube Growth Strategy Goldman Sachs
Retailing Conference Presentation New York September 2017

 

Forward-Looking Statements This presentation contains
forward-looking statements within the meaning of Section 27A
of the Securities Act of 1933, as amended, and Section 21E
of the Securities Exchange Act of 1934, as amended. All
statements, other than statements of historical facts,
contained in the presentation, including statements
regarding our industry, position, goals, strategy, future
operations, future financial position, future revenues,
estimated costs, prospects, margins, profitability, capital
expenditures, liquidity, capital resources, dividends, plans
and objectives of management are forward-looking statements.
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. In
addition, Valvoline(TM) may, from time to time, make
forward-looking statements in its annual report, quarterly
reports and other filings with the Securities and Exchange
Commission ("SEC"), news releases and other written and oral
communications. These forward-looking statements are based
on Valvoline's current expectations and assumptions
regarding, as of the date such statements are made,
Valvoline's future financial condition and operating
performance, strategic and competitive advantages,
leadership and future opportunities, as well as the economy
and other future events or circumstances. Valvoline's
expectations and assumptions include, without limitation,
internal forecasts and analyses of current and future market
conditions and trends, management plans and strategies,
operating efficiencies and economic conditions (such as
prices, supply and demand, cost of raw materials, and the
ability to recover raw-material cost increases through price
increases), and risks and uncertainties associated with the
following: demand for Valvoline's products and services;
sales growth in emerging markets; the prices and margins of
Valvoline's products and services; the strength of
Valvoline's reputation and brand; Valvoline's ability to
develop and successfully market new products and implement
its digital platforms; Valvoline's ability to retain its
largest customers; potential product liability claims;
achievement of the expected benefits of Valvoline's
separation from Ashland (the "Separation"); Valvoline's
substantial indebtedness (including the possibility that
such indebtedness and related restrictive covenants may
adversely affect Valvoline's future cash flows, results of
operations, financial condition and Valvoline's ability to
repay debt) and other liabilities; operating as a
stand-alone public company; Valvoline's relationship with
Ashland; failure, caused by Valvoline, of the Stock
Distribution to Ashland shareholders to qualify for tax-free
treatment, which may result in significant tax liabilities
to Ashland for which Valvoline may be required to indemnify
Ashland; and the impact of acquisitions and/or divestitures
Valvoline has made or may make (including the possibility
that Valvoline may not realize the anticipated benefits from
such transactions or difficulties with integration). These
forward-looking statements are subject to a number of known
and unknown risks, uncertainties and assumptions, including,
without limitation, risks and uncertainties affecting
Valvoline that are described in Item 1A Risk Factors in
Valvoline's quarterly report for the quarter ended June 30,
2017 and in its most recent Form 10-K (including in Item 1A
Risk Factors and "Use of estimates, risks and uncertainties"
in Note 2 of Notes to Consolidated Financial Statements)
filed with the SEC, which is available on Valvoline's
website at http://investors.valvoline.com/sec-filings. In
light of these risks, uncertainties and assumptions, the
forward-looking events and circumstances discussed in this
presentation may not occur, and actual results could differ
materially and adversely from those anticipated or implied
in the forward-looking statements. You should not rely upon
forward-looking statements as predictions of future events.
Although Valvoline believes that the expectations reflected
in these forward-looking statements are reasonable,
Valvoline cannot guarantee future results, level of
activity, performance or achievements. In addition, neither
Valvoline nor any other person assumes responsibility for
the accuracy and completeness of any of these
forward-looking statements. In light of the significant
uncertainties in these forward-looking statements, you
should not regard these statements as a representation or
warranty by Valvoline or any other person that Valvoline
will achieve its objectives and plans in any specified time
frame, or at all. These forward- looking statements are as
of the date of this presentation. Except as required by law,
Valvoline assumes no obligation to update or revise these
forward-looking statements for any reason, even if new
information becomes available in the future. All
forward-looking statements attributable to Valvoline are
expressly qualified in their entirety by these cautionary
statements as well as others made in this presentation and
hereafter in Valvoline's other SEC filings and public
communications. You should evaluate all forward-looking
statements made by Valvoline in the context of these risks
and uncertainties. Regulation G: Non-GAAP Financial
Information The information presented herein regarding
certain financial measures that do not conform to generally
accepted accounting principles in the United States (U.S.
GAAP), including EBITDA, Adjusted EBITDA, EBITDA from
Operating Segments and Free Cash Flow, should not be
construed as an alternative to the reported results
determined in accordance with U.S. GAAP. Valvoline has
included this non-GAAP information to assist in
understanding the operating performance of Valvoline and its
reportable segments. The non-GAAP information provided may
not be consistent with the methodologies used by other
companies. Information regarding Valvoline's definition and
calculations of non-GAAP measures is included in Valvoline's
most recent Form 10-K filed with the SEC, which is available
on Valvoline's website at
http://investors.valvoline.com/sec-filings. Additionally, a
reconciliation of EBITDA and Adjusted EBITDA is included in
the Appendix herein. 2

 

Today's Presenters Name Title Industry Experience Selected
Experience Sam Mitchell Chief Executive Officer 20 o Joined
Ashland in 1997 as Director of Marketing for Valvoline's
brand management group; became President of Valvoline in
2002 o Held brand and category management leadership
positions at The Clorox Company o M.B.A. from the University
of Chicago; B.S. from Miami University, Oxford, Ohio;
Graduate of the Harvard Business School's Advanced
Management Program Tony Puckett President, Quick Lubes 30 o
Joined Valvoline in 1986 as a financial sales analyst;
became president of Valvoline Instant Oil Change in 2007. o
Held general and brand management positions within sales,
retail and appearance products o B.S. from Eastern Kentucky
University; Graduate of Stanford Executive School for
Growing Companies Mary Meixelsperger Chief Financial Officer
17 o Joined Valvoline as CFO in 2016, assuming
responsibility for global financial organization o Over 25
years of CFO experience, including DSW Inc., Shopko Stores,
two non-profit organizations and a private equity firm o
Began career in public accounting at Arthur Young and Co. o
B.B.A. with distinction from the University of
Wisconsin-Madison 3

 

Our Mission Statement We are building the world's leading
engine and automotive maintenance business by bringing
"Hands on Expertise" for the benefit of customers every day.
4

 

A Proven Track Record of Earnings Growth Drivers of Strong
Profit Mix shift towards premium products: ~45% in 2016 from
~31% in 2011(1) 10 consecutive years of system-wide SSS
growth in VIOC stores(2) Consistent volume and profit growth
in international markets Proactive product pricing and raw
material cost management 2017 Fiscal Q3 YTD System-wide SSS
6.9% Growth in Adj. EBITDA and Adj. EBITDA Margins(3)(4)
Fiscal Year Ended September 30th (Millions) [CELLRANGE]
[CELLRANGE] 12.8% 13.5% [CELLRANGE] [CELLRANGE] 18.0%
[CELLRANGE] [CELLRANGE] 23.7% 21.4% [CELLRANGE] 2011 2012
2013 2014 2015 2016 LTM 3Q17 EBITDA from Operating Segments
(5) Pension Income(6) Adj. EBITDA Margin 1. U.S. branded
lubricants. 2. System-wide SSS growth. SSS growth determined
on a fiscal year basis with new stores included after first
full fiscal year of operation. 3. For a reconciliation of
Adj. EBITDA to Net Income, see the Appendix to this
presentation. 4. All full-year data as of fiscal year-end
9/30 unless otherwise noted. 5. EBITDA from Operating
Segments is the contribution to Adj. EBITDA from our three
operating segments of Core North America, Quick Lubes and
International. 6. Represents portion of Adj. EBITDA from
pension and OPEB income, which was $9 million, $17 million
and $58 million in fiscal 2015, 2016 and LTM 3Q2017,
respectively. 5

 

Our Brand Sells Across Uniquely Diverse Routes to Market
Core North America Quick Lubes International Do-It-Yourself
(DIY) Do-It-For-Me (DIFM) Commercial and Industrial (C&I)
VIOC Express Care Commercial and Industrial (C&I) JVs OEMs
LTM 3Q17 Financial Information (Millions) Sales EBITDA(1)
EBITDA Margin(1)(2) $987 $212 21.5% $519 $148 28.5% $525 $81
15.4% Key Customer Contact Points o 30,000+ Retail Outlets o
12,000+ Installers o "DIFM" Consumers o 383 VIOC
company-owned stores and 730 franchised stores o 316 Express
Care stores o Positioned as a high performance premium brand
o Sold in approximately 140 countries outside of the United
States and Canada Note: Sum of segment level EBITDA does not
include any Unallocated and Other income or expenses. 1.
EBITDA is a non-GAAP metric. For a reconciliation of EBITDA
to Operating Income for each segment, see the Appendix to
this presentation. 2. EBITDA Margin = EBITDA / Sales. 6

 

Leveraging Capabilities Across Segments QUICK LUBES Retail
Operations Customer Experience Data Analytics INTERNATIONAL
Heavy Duty Insights OEM Relationships New Markets CORE NORTH
AMERICA Category Insights Distribution Network Product
Development BRAND SUPPLY CHAIN MARKETING TECHNOLOGY CUSTOMER
CARE 7

 

Quick Lubes Growth Opportunities

 

Quick Lube Market ~450MM(1) Total U.S. DIFM Oil Changes
~100MM(1) Oil Changes in quick lubes market ~16MM(2) VVV Oil
Changes Strong Share Gain Opportunity for Valvoline 1.
Company estimates based on industry data for total DIFM or
quick lubes oil changes in 2015 in North America. 2.
Valvoline Quick Lube segment oil changes estimated for
fiscal 2017. 9

 

Quick Lubes: Overview Company-Owned Franchise Express Care
Independent Operators Value Prop o "Hands-on" insights o
Proving ground for toolbox o Generates leadership talent o
Turnkey management system o Proprietary tools o Dedicated
support o Premium sign package o Field training resources o
Marketing tools Footprint o Stores: 383 o 3,300+ store
employees o 15+ year lease terms o Stores: 730 o 72
franchisees o 15 year agreement o Stores: 316 o 212
independent operators o 5-10 year agreement Product Sales +
Service Sales Product Sales + Royalties Product Sales 10

 

Quick Lubes Overview: New Unit Economics EBITDA Contribution
Ranges 8x Platform Term (Years) Oil Changes Per Day (OCPD)
Cash Investment ($,000) Cash IRR (%) roduct Sales VIOC
Company N / A 35-55 ~1,300(1) Mid- Teens Servic2esx Income
VIOC Franchising 15 30-50 130-160 30%+ Product Sales x
Express Care 5-10 20-25 25-50 30%+ Company Franchise Express
Care Operating Royalties Product Strong Returns Expected in
All Three Areas of Investment 1. Assumes land is leased. 11

 

Quick Lubes Overview: Double-digit EBITDA Growth Fiscal Year
Ended September 30th (Millions) 160 135 110 $85 $94 $111
$134 $148 32.0% 30.0% 28.0% 85 60 26.0% 35 24.0% 10 (15)
2013 2014 2015 2016 LTM 3Q17 Quick Lubes Segment EBITDA
22.0% Quick Lubes Growth Strategy Continue Same-Store Sales
Growth Accelerate Company Store Growth Accelerate Franchisee
and Express Care Growth 12

 

Proven VIOC Business Model Operating Stores Strengthens
Business Model Performance Superior Talent Our Sales Per
Store Has Grown Steadily Preferred Customer Experience LTM
Q3'17 $916 Digital Marketing Platforms $550 $579 $613 $649
$672 $713 Proprietary Tools 2007 2008 2009 2010 2011 2012
2013 2014 2015 2016 System-Wide Average Sales per Store
(000's), fiscal year basis 13

 

Driving Sustainable Same-Store Sales Growth 12% 10% 8% 10%
7% 10 Years of Same-Store Sales Growth(1) 8% 7% 8% 8% 10
Year Average of System-Wide SSS 4.9% 6% 6% 4% 4% 2% 3% 3% 0%
4% 4% 2% 2% 6% 8% 6% 2% 5% 2% YTD Q3'17 System-Wide SSS 6.9%
2007 2008 2009 2010 2011 2012 2013 2014 2015 2016
Company-Owned SSS Franchised SSS 5 MIN Operational
Enhancements Customer Experience Marketing Platforms Core
Platform Improvements Enabled by Technology 1. SSS growth
determined on a fiscal year basis with new stores included
after first full fiscal year of operation. 14

 

Accelerate Company-Owned Store Growth New Builds - Existing
Markets Core markets underpenetrated - New Markets under
development Acquisitions - Targeting high quality regional
operators 10 - 30+ stores - Engaging local operators within
VIOC markets 5 - 10 store systems - Opportunistic single
store units Strengthen Development Capabilities - Predictive
analytics tool for real estate modeling - Custom analytics
workflow tool - Leverage Valvoline sales to drive
acquisition pipeline - Insource select market growth
resources New Construction is an ~18 Month Process 1-3
Months 6 Months 6 Months 4 Months 1 Market Planning 2 Site
Selection 3 Permitting 4 Construction Royalties 15

 

Accelerating Franchise Store Growth Market Level Development
Agreements Strengthening Development Support (black circle)
Predictive analytics for real estate modeling (black circle)
50/50 Approach: high analytics + local market intel (black
circle) Eight agreements signed, 160+ stores over next six
years (black circle) Multiple new agreements under
negotiation (black circle) Acquisition lead generation via
dedicated resources (black circle) Bank financing guarantee
program (black circle) Store growth bonus incentives (black
circle) Evaluating new franchisee additions for smaller
markets Broad VIOC Geographic Footprint(1) with Significant
Opportunity for Growth Company-Owned Franchised 1. Includes
383 company-owned stores and 730 franchised locations as of
fiscal 2017 quarter ended 6/30. Does not include Express
Care operators. 16

 

Proven Success in Strategic Acquisitions Company Acquires
Competitor Company Acquires Franchisee Oil Can Henry's: o
13th largest U.S. quick-lube network o 89 centers in OR, WA,
CA, AZ, ID, CO with 47 Company and 42 Franchise o Completed
February 2016 Oil Can Henry's Henley Bluewater Henley
Bluewater o 56 centers in MI and OH o APA signed in Sept.
2017 o Adjacent to core VIOC Company Operations Franchisee
Acquires Competitor Company Acquires Competitor EZ Lube: o
14th largest U.S. quick-lube network o 74 centers in
Southern CA o Completed March 2012 EZ Lube Time It Lube Time
It Lube o 27th largest U.S. quick-lube network o 28 centers
in TX and LA o Completed February 2017 17

 

VIOC Store Growth Targets Working to Build the Largest Quick
Lube System in North America 2023(1) 2023 2018+ Total
Additions Potential Store Count Company 20 - 25 150+ ~600
Franchised 25 - 35 180+ ~900 Express Care 25 - 35 180+ ~500
Total Organic 70 - 95 510+ ~2000 Acquisitions Expected to
Supplement VIOC Store Growth 1. Total store additions by
2023 assuming annual growth based on 2018 growth target
ranges. 18

 

Successful Execution of Our Strategy Drives Strong EBITDA
Growth Continue Same-Store Sales Growth Accelerate Company
Store Growth Accelerate Franchisee and Express Care Growth
Potential Incremental EBITDA Contribution(1) ~$50 million
~$40 million ~$20 million Our Strategy Has the Potential to
Deliver ~$110 million of Incremental EBITDA in 2023, a ~75%
Increase Over FY2017 LTMQ3 EBITDA. Acquisitions Expected to
Add Additional EBITDA. 1. This is the expected incremental
annual EBITDA at year 2023, and assumes full execution of
the company-owned store additions and the completion of
current and anticipated development agreements. Assumes 5%
growth on the base business and 85 new VIOC company, VIOC
franchise and Express Care stores. EBITDA contribution is
the expected incremental EBITDA contributed from each
strategic imperative, using FY17 LTM3Q Quick Lubes EBITDA as
the base. 19

 

Bright Future for Valvoline! Strong Brand-driven,
Multi-channel Model Designed to Deliver Consistent,
Predictable Results (black circle) Solid performance in FY17
despite: - Raw material cost increases Base oil posted
prices up ~20% calendar YTD through June '17 - Increased
SG&A investment Accelerating Progress on Significant Growth
Opportunities (black circle) Mid-single digit VIOC SSS
growth (black circle) Mid-single digit Quick Lube unit
growth (black circle) High-single digit volume growth in
International (black circle) Premium mix and share gains in
Core North America (black circle) Stable free cash flow
generation enables: Leveraging a Strong Foundation -
Investment in high-return initiatives - Growth of cash
dividend over time - Opportunistic share repurchase 20

 

Valvoline Appendix

 

Historical EBITDA and Adj. EBITDA Reconciliation FY Ended
September 30, 9M Ended June 30, LTM 3Q ($ in Millions) 2011
2012 2013 2014 2015 2016 2016 2017 2017 Net income $110 $114
$246 $173 $196 $273 $208 $199 $264 Income tax expense 52 58
135 91 101 148 104 114 158 Net interest and other financing
expense -- -- -- -- -- 9 -- 28 37 Depreciation and
amortization 38 35 35 37 38 38 29 30 39 EBITDA $200 $207
$416 $301 $335 $468 $341 $371 $498 Adjustments Losses
(gains) on pension and other postretirement plans
re-measurement 52 68 (74) 61 46 (18) 5 (8) (31) Separation
costs -- -- -- -- -- 6 -- 27 33 Net Loss on Divestiture --
-- -- -- 26 1 1 -- -- Impairment on Equity Investment -- --
-- -- 14 -- -- -- -- Restructuring -- -- -- 6 -- -- -- -- --
Tax Matter Agreement Activity -- -- -- -- -- -- -- (2) (2)
Adjusted EBITDA $252 $275 $342 $368 $421 $457 $347 $388 $498
22

 

Historical EBITDA Reconciliation - Segments ($ in Millions)
FY Ended September 30, 9M Ended June 30, LTM 3Q 2016 2016
2017 2017 Core North America Sales $979 $740 $748 $987
Operating income 212 170 156 198 Depreciation and
amortization 16 12 10 14 EBITDA $228 $182 $166 $212 Quick
Lubes Sales $457 $332 $394 $519 Operating Income 117 84 94
127 Depreciation and amortization 17 12 16 21 EBITDA $134
$96 $110 $148 International Sales $493 $363 $395 $525
Operating Income 74 53 56 77 Depreciation and amortization 5
5 4 4 EBITDA $79 $58 $60 $81 23

 

Historical EBITDA Reconciliation - Quick Lubes Segment FY
Ended September 30, 9M Ende d June 30, LTM 3Q ($ in
Millions) 2013 2014 2015 2016 2016 2017 2017 Operating
income $70 $79 $95 $117 $84 $94 $127 Depreciation and
amortization 15 15 16 17 12 16 21 EBITDA $85 $94 $111 $134
$96 $110 $148 24

 

 

	NEWS RELEASE	

 
 
Valvoline Announces New Development Agreements with Franchisees and the Acquisition of Franchise Locations in Michigan and Ohio
 
Signs eight new development agreements with seven franchisees for a total of more than 160 new stores over the next six years, including expansion in the Northeast, Mid-Atlantic and California; and the purchase of 56 stores from Henley Bluewater LLC  
 
LEXINGTON, Ky., Sept. 7, 2017 - Valvoline Inc. (NYSE: VVV), announced today that it has signed eight new development agreements with seven of its largest Valvoline Instant Oil Change SM (VIOC) franchisees for the addition of more than 160 stores by 2023. Valvoline continues to work on additional development agreements that when complete would provide for a combined total of more than 200 new VIOC franchise stores in the next six years.
 
Two of these agreements are with the company’s largest franchisee, Henley Enterprises, Inc., which opened the first VIOC franchise location in 1989 and currently has more than 200 service centers, primarily in the Northeast and southern California. Pursuant to the agreements, two of Henley’s subsidiaries will add approximately 100 stores in California and the Northeast and Mid-Atlantic regions. Valvoline also announced it has signed a definitive agreement with Henley Bluewater LLC to acquire its 56 stores in Michigan and northern Ohio. The acquisition is expected to be completed in the first quarter of fiscal 2018. Financial terms were not disclosed.
 
“A core element of Valvoline’s strategy is to accelerate the growth of our industry-leading quick lube model,” said Sam Mitchell, Valvoline’s chief executive officer. “Through these development agreements we are leveraging our strong relationships with our franchisees as they commit capital and resources to drive their store growth. At the same time, we are committing our own capital to grow company-owned stores. Today’s announcements reflect the progress we’ve made in mapping out our deliberate system-wide growth plans and position us well as we move into fiscal 2018.”
 
The service model at VIOC has been built to provide a quick, easy and trusted experience for every customer, every day. Customers receive a stay-in-your-car solution for preventive maintenance services, including full-service oil changes and each vehicle manufacturer’s mileage-based services. The company’s model is built on an unwavering commitment to developing and protecting superior talent, both inside and outside its stores, and consistent execution of its proprietary tools, including point-of-sales technology, SuperPro TM Management System and digital marketing platforms.

            
“The transactions announced today represent an exciting opportunity across the entire VIOC system. The development agreements enable our franchisees to focus on faster growth in targeted markets, and Valvoline’s acquisition of the 56 stores in Michigan and Northern Ohio allows us to increase the density of our company-owned network of stores in the Midwest,” said Tony Puckett, Valvoline’s president, Quick Lubes. “From this much stronger base in the region, we’ll be well positioned to leverage our resources to enhance operational efficiency and capture further growth opportunities for our company operations.”
 
“Divesting our Midwest stores allows us to free up capital to focus on aggressive growth in our target markets where we already have strength, namely in California, Mid-Atlantic and the Northeast,” said Don Smith, CEO of Henley Enterprises, Inc. “After nearly 30 years as a franchisee, VIOC’s retail model has never been stronger and the company’s relationship with franchisees have never been healthier. I look forward to adding an additional 100 stores to the VIOC system over the next six years.”      
 
For a list of all Valvoline Instant Oil Change service center locations and hours of operation, visit www.vioc.com .
 
About Valvoline TM
Valvoline Inc. (NYSE:VVV) is a leading worldwide producer and distributor of premium branded automotive, commercial and industrial lubricants, and automotive chemicals. Valvoline ranks as the #2 quick-lube chain by number of stores and #3 passenger car motor oil brand in the DIY market by volume in the United States. The brand operates and franchises more than 1,070 Valvoline Instant Oil Change SM centers in the United States. It also markets Valvoline™ lubricants and automotive chemicals; MaxLife™ lubricants created for higher-mileage engines; SynPower™ synthetic motor oil; and Zerex™ antifreeze. Visit www.valvoline.com to learn more.

Forward-Looking Statements  
This news release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. All statements, other than statements of historical facts, contained in the news release, including statements regarding our industry, position, goals, strategy, operations, financial position, revenues, estimated costs, prospects, margins, profitability, capital expenditures, liquidity, capital resources, dividends, plans and objectives of management are forward-looking statements. 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. In addition, Valvoline™ may, from time to time, make forward-looking statements in its annual report, quarterly reports and other filings with the Securities and Exchange Commission (“SEC”), news releases and other written and oral communications.
These forward-looking statements are based on Valvoline’s current expectations and assumptions regarding, as of the date such statements are made, Valvoline’s future operating performance and financial condition, including Valvoline’s future financial and operating performance, strategic and competitive advantages, leadership and future opportunities, as well as the economy and other future events or circumstances. Valvoline’s expectations and assumptions include, without limitation, internal forecasts and analyses of current and future market conditions and trends, management plans and strategies, operating efficiencies and economic conditions (such as prices, supply and demand, cost of raw materials, and the ability to recover raw material cost increases through price increases), and risks and uncertainties associated with the following: demand for Valvoline’s products and services; sales growth in emerging markets;

 
the prices and margins of Valvoline’s products and services; the strength of Valvoline’s reputation and brand; Valvoline’s ability to develop and successfully market new products; Valvoline’s ability to retain its largest customers; achievement of the expected benefits of Valvoline’s separation from Ashland; Valvoline’s substantial indebtedness (including the possibility that such indebtedness and related restrictive covenants may adversely affect Valvoline’s future cash flows, results of operations, financial condition and Valvoline’s ability to repay debt) and other liabilities; operating as a stand-alone public company; failure, caused by Valvoline, of Ashland’s distribution of Valvoline common stock to Ashland shareholders to qualify for tax-free treatment, which may result in significant tax liabilities to Ashland for which Valvoline may be required to indemnify Ashland; and the impact of acquisitions and/or divestitures Valvoline has made or may make (including the possibility that Valvoline may not realize the anticipated benefits from such transactions or difficulties with integration). These forward-looking statements are also subject to the risks and uncertainties affecting Valvoline that are described in its most recent Form 10-K (including in Item 1A Risk Factors and “Use of estimates, risks and uncertainties” in Note 2 of Notes to Consolidated Financial Statements) filed with the SEC, which is available on Valvoline’s website at http://investors.valvoline.com/sec-filings. In light of these risks, uncertainties and assumptions, the forward-looking events and circumstances discussed in this news release may not occur, and actual results could differ materially and adversely from those anticipated or implied in the forward-looking statements.

You should not rely upon forward-looking statements as predictions of future events. Although Valvoline believes that the expectations reflected in these forward-looking statements are reasonable, Valvoline cannot guarantee that the expectations reflected herein will be achieved. In light of the significant uncertainties in these forward-looking statements, you should not regard these statements as a representation or warranty by Valvoline or any other person that Valvoline will achieve its objectives and plans in any specified time frame, or at all. These forward-looking statements speak only as of the date of this news release. Except as required by law, Valvoline assumes no obligation to update or revise these forward-looking statements for any reason, even if new information becomes available in the future.

All forward-looking statements attributable to Valvoline are expressly qualified in their entirety by these cautionary statements as well as others made in this news release and hereafter in Valvoline’s other SEC filings and public communications. You should evaluate all forward-looking statements made by Valvoline in the context of these risks and uncertainties .

TM Trademark, Valvoline or its subsidiaries, registered in various countries
SM Service mark, Valvoline or its subsidiaries, registered in various countries

FOR FURTHER INFORMATION
        
 Investor Relations 
 Sean T. Cornett
+1 (859) 357-2798 
 scornett@valvoline.com  

Media Relations 
 Valerie Schirmer 
 +1 (859) 357-3235
vschirmer@valvoline.com