Net revenues increased 5.2%
Unlimited Wash Club memberships increased
12.2%
Opened nine new greenfield locations and
acquired one location
Fiscal 2023 guidance revised
Mister Car Wash, Inc. (the “Company”) (NYSE: MCW), the nation’s
largest car wash brand, today announced its financial results for
the quarter ended June 30, 2023.
“We had a solid second quarter. Our Unlimited Wash subscription
business remained strong and stable, comparable store sales
returned to positive territory, operating margin improved
sequentially from the first quarter, we generated $74 million in
adjusted EBITDA and net income of $27 million, and we are pleased
with the Titanium rollout and implementation process,” commented
John Lai, Chairperson and CEO of Mister Car Wash. “Our foot is
firmly on the pedal of greenfield expansion, as we opened 13 new
stores year to date and remain comfortable with our full year
target of approximately 35. Lastly, we continue to manage expenses
and optimize investments in our facilities and our people. From our
Manager in Training program to our close coverage in house facility
maintenance team, to our new build install teams, to IT support,
we’ve invested in human capital across the board knowing that in
the end, we have a culture that values people, and our biggest
competitive advantage is our team.”
Second Quarter 2023 Highlights:
- Net revenues increased 5.2% to $236.9 million from $225.2
million in the second quarter of 2022.
- Comparable stores sales increased 0.3%, compared to a 2.4%
increase in the second quarter of 2022.
- The Company added 59 thousand net new UWC Members in the second
quarter. As of June 30, 2023, the Company had approximately 2.1
million UWC Members, which represented a 12.2% increase over the
same time last year. UWC sales represented approximately 69.4% of
total wash sales in the second quarter of 2023 compared to
approximately 66.2% in the second quarter of 2022.
- The Company opened nine new greenfield locations and acquired
one location in the second quarter of 2023, bringing the total
number of car wash locations operated to 449 as of June 30, 2023,
compared to 409 car wash locations as of June 30, 2022, an increase
of 9.8%.
- Net income and net income per diluted share were $27.1 million
and $0.08, respectively.
- Adjusted net income(1) and diluted adjusted net income per
share(1) were $29.0 million and $0.09, respectively.
- Adjusted EBITDA(1) decreased less than 1% to $73.9 million from
$74.5 million in the second quarter of 2022.
Six Month 2023 Highlights:
- Net revenues increased 4.1% to $462.9 million from $444.6
million in the comparable period last year.
- Comparable stores sales decreased 0.6% compared to a 6.5%
increase in the comparable period last year.
- The Company added approximately 181 thousand UWC Members.
- Net income and net income per diluted share were $48.3 million
and $0.15, respectively.
- Adjusted net income(1) and diluted adjusted net income per
share(1) were $55.7 million and $0.17, respectively.
- Adjusted EBITDA(1) decreased 3.0% to $144.8 million from $149.3
million comparable period last year.
(1) See Use of Non-GAAP Financial Measures and GAAP to Non-GAAP
Reconciliations disclosures included below in this press
release.
Store Count
Three Months Ended June
30,
Six Months Ended
June 30,
2023
2022
2023
Beginning location count
439
399
436
Locations acquired
1
6
1
Greenfield locations opened
9
4
13
Closures
-
-
1
Ending location count
449
409
449
Balance Sheet and Cash Flow Highlights
- As of June 30, 2023, cash and cash equivalents totaled $136.2
million, and there were no borrowings under the Company’s Revolving
Commitment, compared to cash and cash equivalents of $65.2 million
and no borrowings under the Revolving Commitment as of December 31,
2022.
- Net cash provided by operating activities totaled $117.1
million during the first six months of 2023, compared to $134.6
million during the first six months of 2022.
Sale-Leasebacks and Rent Expense
- In the second quarter of 2023, the Company completed 10
separate sale-leaseback transactions involving a total of 18 car
wash locations for aggregate consideration of $80.0 million.
- With 408 car wash leases at the end of the second quarter
versus 354 leases at the end of the second quarter last year, rent
expense increased 15.5% to $24.8 million, compared to the second
quarter of 2022.
Fiscal 2023 Outlook
The Company revises the guidance previously provided for the
fiscal year ending December 31, 2023:
2023 Outlook
Current
Previous
Net revenues
$913 to $936 million
$925 to $960 million
Comparable stores sales growth
%
-1.0% to 1.0%
0.0% to 3.0%
Adjusted net income
$94 to $103 million
$100 to $115 million
Adjusted EBITDA
$270 to $283 million
$277 to $297 million
Diluted adjusted net income per
share
$0.28 to $0.32
$0.30 to $0.35
Interest expense, net
$75 million
$73 million
Rent expense, net
Approx. $100 million
Approx. $100 million
Weighted average common shares
outstanding, diluted, full year
330 million
330 million
New greenfield locations
Approx. 35
Approx. 35
Capital expenditures(1)
$227 to $312 million
$220 to $270 million
Sale leasebacks
$110 to $130 million
$110 to $130 million
(1)
Total capital expenditures for the fiscal year ending December
31, 2023 are expected to consist of approximately $175 million to
$240 million of growth capital expenditures related to the opening
of new stores and $52 million to $72 million of other capital
expenditures related to store maintenance, growth and the
expenditures to integrate acquired locations.
Conference Call Details
A conference call to discuss the Company’s financial results for
the second quarter of 2023 and to provide a business update is
scheduled for today, August 3, 2023, at 4:30 p.m. Eastern Time.
Investors and analysts interested in participating in the call are
invited to dial 888-886-7786 (international callers please dial
1-416-764-8658) approximately 10 minutes prior to the start of the
call. A live audio webcast of the conference call will be available
online at https://ir.mistercarwash.com/.
A recorded replay of the conference call will be available
within approximately three hours of the conclusion of the call and
can be accessed online at https://ir.mistercarwash.com/ for 90
days.
About Mister Car Wash® | Inspiring People to Shine®
Headquartered in Tucson, Arizona, Mister Car Wash, Inc. (NYSE:
MCW) operates over 440 locations and has the largest car wash
subscription program in North America. With a passionate team of
professionals, advanced technology, and a commitment to exceptional
customer experiences, Mister Car Wash is dedicated to providing a
clean, shiny, and dry vehicle every time. The Mister brand is
deeply rooted in delivering quality service, fostering
friendliness, and demonstrating a genuine commitment to the
communities it serves while prioritizing responsible environmental
practices and resource management. To learn more visit
www.mistercarwash.com.
Use of Non-GAAP Financial Measures
This press release includes references to non-GAAP financial
measures, including Adjusted EBITDA, Adjusted net income, and
Diluted adjusted net income per share (the “Company’s Non-GAAP
Financial Measures”). These non-GAAP financial measures are not
based on any comprehensive set of accounting rules or principles
and should not be considered a substitute for, or superior to,
financial measures calculated in accordance with GAAP, and may be
different from similarly titled non-GAAP financial measures used by
other companies. In addition, the Company’s Non-GAAP Financial
Measures should be read in conjunction with the Company’s financial
statements prepared in accordance with GAAP. The reconciliations of
the Company’s Non-GAAP Financial Measures to the corresponding GAAP
measures should be carefully evaluated.
The Company’s Non-GAAP Financial Measures are non-GAAP measures
of the Company’s operating performance and should not be considered
as an alternative to net income as a measure of financial
performance or any other performance measure derived in accordance
with U.S. GAAP and should not be construed as an inference that the
Company’s future results will be unaffected by unusual or
nonrecurring items. Adjusted EBITDA is defined as net income before
interest expense, net, income tax provision, depreciation and
amortization expense, (gain) loss on sale of assets, net,
stock-based compensation expense, acquisition expenses, non-cash
rent expense, expenses associated with the Company’s initial public
offering (the “IPO”), and other nonrecurring charges. Adjusted net
income is defined as net income before (gain) loss on sale of
assets, net, stock-based compensation expense, acquisition
expenses, non-cash rent expense, expenses associated with the IPO,
other nonrecurring charges, income tax impact of stock award
exercises and the tax impact of adjustments to net income. Adjusted
net income per share is defined as basic net income per share
before (gain) loss on sale of assets, net, stock-based compensation
expense, acquisition expenses, non-cash rent expense, expenses
associated with the IPO, other nonrecurring charges, income tax
impact of stock award exercises and the tax impact of adjustments
to basic net income per share. Diluted adjusted net income per
share is defined as diluted net income per share before (gain) loss
on sale of assets, net, stock-based compensation expense,
acquisition expenses, non-cash rent expense, expenses associated
with the IPO, other nonrecurring charges, income tax impact of
stock award exercises and the tax impact of adjustments to basic
net income per share.
Management believes the Company’s Non-GAAP Financial Measures
assist investors and analysts in comparing the Company’s operating
performance across reporting periods on a consistent basis by
excluding items that management does not believe are indicative of
the Company’s ongoing operating performance. Investors are
encouraged to evaluate these adjustments and the reasons the
Company considers them appropriate for supplemental analysis. In
evaluating Company’s Non-GAAP Financial Measures, investors should
be aware that in the future the Company may incur expenses that are
the same as or similar to some of the adjustments in the Company’s
presentation of Company’s Non-GAAP Financial Measures. There can be
no assurance that the Company will not modify the presentation of
the Company’s Non-GAAP Financial Measures in future periods, and
any such modification may be material.
Management believes that the Company’s Non-GAAP Financial
Measures are helpful in highlighting trends in the Company’s core
operating performance compared to other measures, which can differ
significantly depending on long-term strategic decisions regarding
capital structure, the tax jurisdictions in which companies operate
and capital investments. Management also uses Adjusted EBITDA in
connection with establishing discretionary annual incentive
compensation; to supplement U.S. GAAP measures of performance in
the evaluation of the effectiveness of the Company’s business
strategies; to make budgeting decisions; and because the Company’s
credit facilities use measures similar to Adjusted EBITDA to
measure the Company’s compliance with certain covenants.
The Company’s Non-GAAP Financial Measures have limitations as
analytical tools, and investors should not consider these measures
in isolation or as substitutes for analysis of the Company’s
results as reported under U.S. GAAP. Some of these limitations
include, for example, Adjusted EBITDA does not reflect: the
Company’s cash expenditure or future requirements for capital
expenditures or contractual commitments; the Company’s cash
requirements for the Company’s working capital needs; the interest
expense and the cash requirements necessary to service interest or
principal payments on the Company’s debt; cash requirements for
replacement of assets that are being depreciated and amortized; and
the impact of certain cash charges or cash receipts resulting from
matters management does not find indicative of the Company’s
ongoing operations.
The Company is not providing a reconciliation of the fiscal 2023
outlook for Adjusted EBITDA, Adjusted net income and Diluted
adjusted net income per share because we are unable to predict with
reasonable certainty the reconciling items that may affect the most
directly comparable GAAP financial measures without unreasonable
efforts. The amounts that are necessary for such reconciliations,
including acquisition expenses, other expenses and the other
adjustments reflected are uncertain, depend on various factors and
could significantly impact, either individually or in the
aggregate, the GAAP measures.
Forward-Looking Statements
This press release includes “forward-looking statements” within
the meaning of the Private Securities Litigation Reform Act of
1995. We intend such forward-looking statements to be covered by
the safe harbor provisions for forward-looking statements contained
in Section 27A of the Securities Act of 1933, as amended and
Section 21E of the Securities Exchange Act of 1934, as amended. All
statements contained in this press release other than statements of
historical fact, including, without limitation, statements
regarding Mister Car Wash’s expansion efforts and expected growth
and financial and operational results for fiscal 2023 are
forward-looking statements. Words including “anticipate,”
“believe,” “continue,” “could,” “estimate,” “expect,” “intend,”
“may,” “might,” “plan,” “potential,” “predict,” “seek,” or
“should,” or the negative thereof or other variations thereon or
comparable terminology are intended to identify forward-looking
statements, though not all forward-looking statements use these
words or expressions. In addition, any statements or information
that refer to expectations, beliefs, plans, projections,
objectives, performance or other characterizations of future events
or circumstances, including any underlying assumptions, are
forward-looking.
These forward-looking statements are based on management’s
current expectations and beliefs. These statements are neither
promises nor guarantees, but involve known and unknown risks,
uncertainties and other important factors that may cause the
Company’s actual results, performance or achievements to be
materially different from any future results, performance or
achievements expressed or implied by the forward-looking
statements, including, but not limited to: our inability to attract
new customers, retain existing customers and maintain or grow the
number of Unlimited Wash Club® (“UWC”) members, which could
adversely affect our business, financial condition and results of
operations and rate of growth; our failure to acquire, or open and
operate new locations in a timely and cost-effective manner, and
enter into new markets or leverage new technologies, may materially
and adversely affect our competitive advantage or financial
performance; our inability to successfully implement our growth
strategies on a timely basis or at all; we are subject to a number
of risks and regulations related to credit card and debit card
payments we accept; an overall decline in the health of the economy
and other factors impacting consumer spending, such as natural
disasters and fluctuations in inflation, may affect consumer
purchases, reduce demand for our services and materially and
adversely affect our business, results of operations and financial
condition; inflation, supply chain disruption and other increased
operating costs could materially and adversely affect our results
of operations; our locations may experience difficulty hiring and
retaining qualified personnel, resulting in higher labor costs; we
lease or sublease the land and buildings where a number of our
locations are situated, which could expose us to possible
liabilities and losses; our indebtedness could adversely affect our
financial health and competitive position; our business is subject
to various laws and regulations and changes in such laws and
regulations, or failure to comply with existing or future laws and
regulations, may result in litigation, investigation or claims by
third parties or employees that could adversely affect our
business; our locations are subject to certain environmental laws
and regulations; we are subject to data security and privacy risks
that could negatively impact our results of operations or
reputation; we may be unable to adequately protect, and we may
incur significant costs in enforcing or defending, our intellectual
property and other proprietary rights; stockholders’ ability to
influence corporate matters may be limited because a small number
of stockholders beneficially own a substantial amount of our common
stock and continue to have substantial control over us; our stock
price may be volatile or may decline regardless of our operating
performance, resulting in substantial losses for investors
purchasing shares of our common stock; and the other important
factors discussed under the caption “Risk Factors” in the Company’s
Annual Report on Form 10-K for the fiscal year ended December 31,
2022, as such factors may be updated from time to time in its other
filings with the SEC accessible on the SEC’s website at www.sec.gov
and the Investors Relations section of the Company’s website at
www.mistercarwash.com.
Any forward-looking statement that the Company makes in this
press release speaks only as of the date hereof. Except as required
by law, the Company does not undertake any obligation to update or
revise, or to publicly announce any update or revision to, any of
the forward-looking statements, whether as a result of new
information, future events or otherwise.
Condensed Consolidated Statements of
Operations and Comprehensive Income (Amounts in thousands,
except share and per share data) (Unaudited)
Three Months Ended June
30,
Six Months Ended June
30,
2023
2022
2023
2022
Net revenues
$
236,894
$
225,159
$
462,854
$
444,578
Cost of labor and chemicals
70,824
69,351
137,616
134,889
Other store operating expenses
90,337
79,029
179,803
156,830
General and administrative
27,829
25,610
52,012
49,297
Gain on sale of assets, net
(4,728
)
(3,146
)
(4,791
)
(2,687
)
Total costs and expenses
184,262
170,844
364,640
338,329
Operating income
52,632
54,315
98,214
106,249
Other expense:
Interest expense, net
18,295
8,762
36,043
16,928
Total other expense
18,295
8,762
36,043
16,928
Income before taxes
34,337
45,553
62,171
89,321
Income tax provision
7,205
9,894
13,903
18,174
Net income
$
27,132
$
35,659
$
48,268
$
71,147
Other comprehensive income, net of
tax:
Gain on interest rate swap
-
301
-
2,170
Total comprehensive income
$
27,132
$
35,960
$
48,268
$
73,317
Net income per share:
Basic
$
0.09
$
0.12
$
0.16
$
0.24
Diluted
$
0.08
$
0.11
$
0.15
$
0.22
Weighted-average common shares
outstanding:
Basic
309,314,858
302,666,291
308,308,972
301,803,664
Diluted
328,283,353
327,229,531
327,951,399
328,205,776
Condensed Consolidated Balance Sheets
(Amounts in thousands, except share and per share data)
(Unaudited)
As of
(Amounts in thousands, except share and
per share data)
June 30, 2023
December 31, 2022
Assets
Current assets:
Cash and cash equivalents
$
136,095
$
65,152
Restricted cash
138
70
Accounts receivable, net
2,796
3,941
Other receivables
21,722
15,182
Inventory, net
8,273
9,174
Prepaid expenses and other current
assets
12,506
12,618
Total current assets
181,530
106,137
Property and equipment, net
595,537
560,874
Operating lease right of use assets,
net
813,924
776,689
Other intangible assets, net
120,546
123,615
Goodwill
1,109,815
1,109,815
Other assets
9,212
9,102
Total assets
$
2,830,564
$
2,686,232
Liabilities and stockholders’
equity
Current liabilities:
Accounts payable
$
36,119
$
25,649
Accrued payroll and related expenses
17,216
17,218
Other accrued expenses
58,670
41,196
Current maturities of operating lease
liability
42,029
40,367
Current maturities of finance lease
liability
706
668
Deferred revenue
32,368
29,395
Total current liabilities
187,108
154,493
Long-term portion of debt, net
896,620
895,830
Operating lease liability
796,203
759,775
Financing lease liability
14,417
14,779
Deferred tax liability
64,579
53,395
Other long-term liabilities
6,271
6,832
Total liabilities
1,965,198
1,885,104
Stockholders’ equity:
Common stock, $0.01 par value,
1,000,000,000 shares authorized, 311,758,330 and 306,626,530 shares
outstanding as of June 30, 2023 and December 31, 2022,
respectively
3,123
3,072
Additional paid-in capital
799,498
783,579
Retained earnings (Accumulated
Deficit)
62,745
14,477
Total stockholders’ equity
865,366
801,128
Total liabilities and stockholders’
equity
$
2,830,564
$
2,686,232
Condensed Consolidated Statements of Cash
Flows (Amounts in thousands) (Unaudited)
Six Months Ended June
30,
2023
2022
Cash flows from operating
activities:
Net income
$
48,268
$
71,147
Adjustments to reconcile net income to net
cash provided by operating activities:
Depreciation and amortization expense
33,819
30,081
Stock-based compensation expense
11,354
11,498
Gain on sale of assets, net
(4,791
)
(2,687
)
Amortization of debt issuance costs
842
842
Non-cash lease expense
21,838
19,433
Deferred income tax
11,058
13,983
Changes in assets and liabilities:
Accounts receivable, net
1,145
(1,017
)
Other receivables
(2,219
)
8,455
Inventory, net
905
(692
)
Prepaid expenses and other current
assets
133
(3,129
)
Accounts payable
5,593
6,137
Accrued expenses
6,525
(1,119
)
Deferred revenue
2,966
1,416
Operating lease liability
(19,591
)
(18,374
)
Other noncurrent assets and
liabilities
(723
)
(1,359
)
Net cash provided by operating
activities
$
117,122
$
134,615
Cash flows from investing
activities:
Purchases of property and equipment
(127,868
)
(76,399
)
Acquisition of car wash operations, net of
cash
(4,985
)
(47,039
)
Proceeds from sale of property and
equipment
82,622
3,672
Net cash used in investing activities
$
(50,231
)
$
(119,766
)
Cash flows from financing
activities:
Proceeds from issuance of common stock
under employee plans
4,444
5,436
Payments on debt borrowings
-
(2,100
)
Principal payments on finance lease
obligations
(324
)
(274
)
Net cash provided by financing
activities
$
4,120
$
3,062
Net change in cash and cash equivalents
and restricted cash during period
71,011
17,911
Cash and cash equivalents and restricted
cash at beginning of period
65,222
19,858
Cash and cash equivalents and restricted
cash at end of period
$
136,233
$
37,769
Supplemental disclosure of cash flow
information:
Cash paid for interest
$
30,281
$
16,134
Cash paid for income taxes
$
1,500
$
1,791
Supplemental disclosure of non-cash
investing and financing activities:
Property and equipment in accounts
payable
$
14,686
$
9,182
Property and equipment in other accrued
expenses
$
29,718
$
5,687
Proceeds from sale of property and
equipment in other receivables
$
4,149
$
-
Stock option exercise proceeds in other
receivables
$
172
$
2
GAAP to Non-GAAP Reconciliations
(Amounts in thousands, except share and per share data)
(Unaudited)
Three Months Ended June
30,
Six Months Ended June
30,
2023
2022
2023
2022
Reconciliation of net income to Adjusted
EBITDA:
Net income
$
27,132
$
35,659
$
48,268
$
71,147
Interest expense, net
18,295
8,762
36,043
16,928
Income tax provision
7,205
9,894
13,903
18,174
Depreciation and amortization expense
16,512
15,136
33,819
30,081
Gain on sale of assets, net
(4,728
)
(3,146
)
(4,791
)
(2,687
)
Stock-based compensation expense
5,993
5,979
11,354
11,498
Acquisition expenses
1,280
704
1,739
1,238
Non-cash rent expense
1,184
555
2,214
1,075
Expenses associated with initial public
offering
-
(14
)
-
272
Other
987
947
2,287
1,599
Adjusted EBITDA
$
73,860
$
74,476
$
144,836
$
149,325
Three Months Ended June
30,
Six Months Ended June
30,
2023
2022
2023
2022
Reconciliation of weighted-average common
shares outstanding - diluted to Adjusted weighted-average common
shares outstanding - diluted:
Weighted-average common shares outstanding
- diluted
328,283,353
327,229,531
327,951,399
328,205,776
Adjustments for potentially dilutive
securities
-
-
-
-
Adjusted weighted-average common shares
outstanding - diluted
328,283,353
327,229,531
327,951,399
328,205,776
Three Months Ended June
30,
Six Months Ended June
30,
2023
2022
2023
2022
Reconciliation of net income to Adjusted
Net Income:
Net income
$
27,132
$
35,659
$
48,268
$
71,147
Gain on sale of assets, net
(4,728
)
(3,146
)
(4,791
)
(2,687
)
Stock-based compensation expense
5,993
5,979
11,354
11,498
Acquisition expenses
1,280
704
1,739
1,238
Non-cash rent expense
1,184
555
2,214
1,075
Expenses associated with initial public
offering
-
(14
)
-
272
Other
987
947
2,287
1,599
Income tax impact of stock award
exercises
(1,657
)
(2,254
)
(2,173
)
(5,958
)
Tax impact of adjustments to net
income
(1,179
)
(1,256
)
(3,201
)
(3,249
)
Adjusted Net Income
$
29,012
$
37,174
$
55,697
$
74,935
Diluted Adjusted Net Income per Share
$
0.09
$
0.11
$
0.17
$
0.23
Adjusted weighted-average common shares
outstanding - diluted
328,283,353
327,229,531
327,951,399
328,205,776
View source
version on businesswire.com: https://www.businesswire.com/news/home/20230803888689/en/
Investors John Rouleau ICR IR@mistercarwash.com
Media Jill Adams media@mistercarwash.com
Mister Car Wash (NYSE:MCW)
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