Net revenues increased 6%
Comparable-store sales increased 0.9%
Unlimited Wash Club® (“UWC”) memberships
increased 5% year-over-year
Opened six new greenfield locations
Reiterating previously provided Fiscal 2024
outlook figures
Mister Car Wash, Inc. (the “Company”) (NYSE: MCW), the nation’s
largest car wash brand, today announced its financial results for
the quarter ended March 31, 2024.
“Our overall results in the first quarter were in line with
expectations, and we are executing against our strategic
initiatives to drive profitable growth. In the first quarter, our
subscription business remained incredibly resilient, growth in our
new Titanium membership package was very strong, and we opened a
record number of new greenfields for any first quarter in our
history,” said John Lai, Chairman and CEO of Mister Car Wash.
“Finally, we are finding ways to do more with less and managing our
expense structure to deliver strong cash flow and more than $75
million of adjusted EBITDA for the first quarter.”
First Quarter 2024 Highlights:
- Net revenues increased 6% to $239.2 million, up from $226.0
million in the first quarter of 2023.
- Comparable-store sales increased 0.9% during the quarter.
- UWC sales represented 74% of total wash sales compared to 69%
in the first quarter of 2023. The Company added 35 thousand net new
UWC members in the first quarter and had approximately 2.1 million
members as of March 31, 2024.
- The Company opened six new greenfield locations in the first
quarter of 2024, bringing the total number of car wash locations
operated to 482 as of March 31, 2024, compared to 439 car wash
locations as of March 31, 2023, an increase of 10%.
- Net income and net income per diluted share were $16.6 million
and $0.05, respectively.
- Adjusted net income(1) and diluted adjusted net income per
share(1) were $26.6 million and $0.08, respectively.
- Adjusted EBITDA(1) increased 6% to $75.2 million from $71.0
million in the first quarter of 2023.
(1) Adjusted net income, Adjusted EBITDA and diluted adjusted
net income per share are non-GAAP financial measures. 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 March
31,
2024
2023
Beginning location count
476
436
Locations acquired
-
-
Greenfield locations opened
6
4
Closures
-
1
Ending location count
482
439
Balance Sheet and Cash Flow Highlights
- As of March 31, 2024, cash and cash equivalents totaled $10.7
million, and there were no borrowings under the Company's Revolving
Commitment, compared to cash and cash equivalents of $19.0 million
and no borrowings under the Company’s Revolving Commitment as of
December 31, 2023.
- Net cash provided by operating activities totaled $58.0 million
during the first quarter of 2024, compared to $67.0 million in the
first quarter of 2023.
Debt Refinancing Highlights
- On March 27, 2024, we upsized, amended & extended the $901
million First Lien Term Loan to $925 million now due in 2031 and
removed a 0.10% credit spread adjustment to the SOFR benchmark for
all available interest periods.
- On March 27, 2024, we also upsized, amended & extended the
$150 million Revolving Commitment to $300 million now due in 2029,
and removed a 0.10% credit spread adjustment to the SOFR benchmark
for all available interest periods and reduced the cost of
borrowings under the facility.
- Proceeds of the transaction were used to refinance our existing
First Lien Term Loan due in 2026 and the existing Revolving
Commitment due in 2026.
- The transactions extend our debt maturities and increase
available liquidity in line with Company growth.
Sale-Leasebacks and Rent Expense
- In the first quarter of 2024, the Company completed one
sale-leaseback transaction involving one car wash location for
aggregate consideration of $4.9 million.
- With 435 car wash leases at the end of the first quarter versus
388 leases at the end of the first quarter last year, rent expense,
net increased 12% to $26.5 million, compared to the first quarter
of 2023.
Fiscal 2024 Outlook
The Company reiterates the guidance previously provided for the
fiscal year ending December 31, 2024:
2024 Outlook
Net revenues
$988 to $1,016 million
Comparable-store sales growth %
0.5% to 2.5%
Adjusted net income
$99 to $111 million
Adjusted EBITDA
$291.5 to $308 million
Diluted adjusted net income per share
$0.30 to $0.34
Interest expense, net
$81 million
Rent expense, net
Approx. $111 million
Weighted average common shares
outstanding, diluted, full year
330 million
New greenfield locations
Approx. 40
Capital expenditures(1)
$364 to $405 million
Sale leasebacks
$135 to $150 million
(1) Total capital expenditures for the fiscal
year ending December 31, 2024 are expected to consist of
approximately $314 million to $350 million of new store growth
capital expenditures and $50 million to $55 million of other
capital expenditures related to store-level maintenance,
productivity improvements and the integration of acquired
locations.
Conference Call Details
A conference call to discuss the Company’s financial results for
the first quarter of fiscal 2024 and to provide a business update
is scheduled for today, May 1, 2024, at 4:30 p.m. Eastern Time.
Investors and analysts interested in participating in the call are
invited to dial 855-209-8213 (international callers please dial
1-412-542-4146) 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 475 locations and has North America's largest
car wash subscription program. 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 and related taxes, acquisition
expenses, non-cash rent expense, loss on extinguishment of debt,
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,
loss on extinguishment of debt, 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 and related taxes,
acquisition expenses, non-cash rent expense, loss on extinguishment
of debt, 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, loss on extinguishment of debt,
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 the 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 the 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 the Company
operates 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 2024
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 2024 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 those 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 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, 2023, 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
(Amounts in thousands, except
share and per share data)
(Unaudited)
Three Months Ended March
31,
2024
2023
Net revenues
$
239,183
$
225,960
Cost of labor and chemicals
71,658
66,792
Other store operating expenses
96,803
89,466
General and administrative
29,710
24,183
Gain on sale of assets
(1,533
)
(63
)
Total costs and expenses
196,638
180,378
Operating income
42,545
45,582
Other (income) expense:
Interest expense, net
20,024
17,748
Loss on extinguishment of debt
1,882
-
Other income
(5,189
)
-
Total other expense, net
16,717
17,748
Income before taxes
25,828
27,834
Income tax provision
9,191
6,698
Net income
$
16,637
$
21,136
Net income per share:
Basic
$
0.05
$
0.07
Diluted
$
0.05
$
0.06
Weighted-average common shares
outstanding:
Basic
315,838,788
307,291,909
Diluted
330,012,144
327,608,266
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)
March 31, 2024
December 31, 2023
Assets
Current assets:
Cash and cash equivalents
$
10,701
$
19,047
Accounts receivable, net
6,475
6,304
Other receivables
17,693
14,714
Inventory, net
7,647
8,952
Prepaid expenses and other current
assets
10,220
11,877
Total current assets
52,736
60,894
Property and equipment, net
773,230
725,121
Operating lease right of use assets,
net
836,528
833,547
Other intangible assets, net
116,023
117,667
Goodwill
1,134,734
1,134,734
Other assets
12,010
9,573
Total assets
$
2,925,261
$
2,881,536
Liabilities and stockholders’
equity
Current liabilities:
Accounts payable
$
33,676
$
33,641
Accrued payroll and related expenses
23,512
19,771
Other accrued expenses
31,046
38,738
Current maturities of long-term debt
6,920
–
Current maturities of operating lease
liability
44,850
43,979
Current maturities of finance lease
liability
766
746
Deferred revenue
33,899
32,686
Total current liabilities
174,669
169,561
Long-term portion of debt, net
913,350
897,424
Operating lease liability
810,783
809,409
Financing lease liability
13,833
14,033
Deferred tax liability
79,506
71,657
Other long-term liabilities
4,396
4,417
Total liabilities
1,996,537
1,966,501
Stockholders’ equity:
Common stock, $0.01 par value,
1,000,000,000 shares authorized, 317,835,082 and 315,192,401 shares
outstanding as of March 31, 2024 and December 31, 2023,
respectively
3,184
3,157
Additional paid-in capital
814,296
817,271
Retained earnings
111,244
94,607
Total stockholders’ equity
928,724
915,035
Total liabilities and stockholders’
equity
$
2,925,261
$
2,881,536
Condensed Consolidated
Statements of Cash Flows
(Amounts in thousands)
(Unaudited)
Three Months Ended March
31,
2024
2023
Cash flows from operating
activities:
Net income
$
16,637
$
21,136
Adjustments to reconcile net income to net
cash provided by operating activities:
Depreciation and amortization expense
19,595
17,307
Stock-based compensation expense
6,246
5,361
Gain on sale of assets, net
(1,533
)
(63
)
Loss on extinguishment of debt
1,882
-
Amortization of debt issuance costs
410
419
Non-cash lease expense
11,917
10,739
Deferred income tax
7,849
5,428
Changes in assets and liabilities:
Accounts receivable, net
(172
)
3,009
Other receivables
(4,096
)
1,128
Inventory, net
1,305
946
Prepaid expenses and other current
assets
1,703
1,850
Accounts payable
2,344
2,553
Accrued expenses
3,615
5,155
Deferred revenue
1,214
1,114
Operating lease liability
(10,499
)
(9,696
)
Other noncurrent assets and
liabilities
(427
)
631
Net cash provided by operating
activities
$
57,990
$
67,017
Cash flows from investing
activities:
Purchases of property and equipment
(81,844
)
(72,059
)
Proceeds from sale of property and
equipment
4,900
8,899
Net cash used in investing activities
$
(76,944
)
$
(63,160
)
Cash flows from financing
activities:
Proceeds from issuance of common stock
under employee plans
729
1,055
Payments for repurchases of common
stock
(9,924
)
-
Proceeds from debt borrowings
925,000
-
Proceeds from revolving line of credit
23,000
-
Payments on debt borrowings
(901,201
)
-
Payments on revolving line of credit
(23,000
)
-
Payments of deferred financing costs
(3,772
)
-
Principal payments on finance lease
obligations
(180
)
(161
)
Net cash provided by financing
activities
$
10,652
$
894
Net change in cash and cash equivalents
and restricted cash during period
(8,302
)
4,751
Cash and cash equivalents and restricted
cash at beginning of period
19,119
65,222
Cash and cash equivalents and restricted
cash at end of period
$
10,817
$
69,973
Reconciliation of cash, cash
equivalents, and restricted cash to the condensed consolidated
balance sheets
Cash and cash equivalents
$
10,701
$
69,903
Restricted cash, included in prepaid
expenses and other current assets
116
70
Total cash, cash equivalents, and
restricted cash
$
10,817
$
69,973
Supplemental disclosure of cash flow
information:
Cash paid for interest
$
19,233
$
11,697
Cash paid for income taxes
$
264
$
151
Supplemental disclosure of non-cash
investing and financing activities:
Property and equipment in accounts
payable
$
15,596
$
11,993
Property and equipment in other accrued
expenses
$
4,234
$
5,969
Payment of debt financing costs in other
accrued expenses
$
1,503
$
-
Stock option exercise proceeds in other
receivables
$
-
$
61
GAAP to Non-GAAP
Reconciliations
(Amounts in thousands, except
share and per share data)
(Unaudited)
Three Months Ended March
31,
2024
2023
Reconciliation of net income to Adjusted
EBITDA:
Net income
$
16,637
$
21,136
Interest expense, net
20,024
17,748
Income tax provision
9,191
6,698
Depreciation and amortization expense
19,595
17,307
Gain on sale of assets
(1,533
)
(63
)
Stock-based compensation expense
6,802
5,361
Acquisition expenses
565
459
Non-cash rent expense
1,487
1,030
Loss on extinguishment of debt
1,882
-
Employee retention credit
(5,189
)
-
Other
5,711
1,300
Adjusted EBITDA
$
75,172
$
70,976
Three Months Ended March
31,
2024
2023
Reconciliation of net income to Adjusted
Net Income:
Net income
$
16,637
$
21,136
Gain on sale of assets
(1,533
)
(63
)
Stock-based compensation expense
6,802
5,361
Acquisition expenses
565
459
Non-cash rent expense
1,487
1,030
Loss on extinguishment of debt
1,882
-
Employee retention credit
(5,189
)
-
Other
5,711
1,300
Income tax impact of stock award
exercises
2,260
(516
)
Tax impact of adjustments to net
income
(2,035
)
(2,022
)
Adjusted Net Income
$
26,587
$
26,685
Diluted Adjusted Net Income per Share
$
0.08
$
0.08
Adjusted weighted-average common shares
outstanding - diluted
330,012,144
327,608,266
View source
version on businesswire.com: https://www.businesswire.com/news/home/20240501362969/en/
Investors John Rouleau ICR IR@mistercarwash.com Media
media@mistercarwash.com
Mister Car Wash (NYSE:MCW)
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