UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM
(Mark One)
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the quarterly period ended
OR
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the transition period from to
Commission File Number:
(Exact name of registrant as specified in its charter)
(State or other jurisdiction of incorporation or organization) |
(I.R.S. Employer |
(Address of principal executive offices) |
(Zip Code) |
Registrant’s telephone number, including area code: (
Securities registered pursuant to Section 12(b) of the Act:
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Name of each exchange on which registered |
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Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
Large accelerated filer |
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Accelerated filer |
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Smaller reporting company |
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Emerging growth company |
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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.
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes
As of November 12, 2021, the registrant had
Table of Contents
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2 |
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PART I. |
FINANCIAL INFORMATION |
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Item 1. |
Financial Statements (Unaudited) |
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3 |
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Condensed Consolidated Statements of Operations and Comprehensive Income (Loss) |
4 |
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Condensed Consolidated Statements of Stockholders' Equity (Deficit) |
5 |
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7 |
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Notes to Unaudited Condensed Consolidated Financial Statements |
8 |
Item 2. |
Management’s Discussion and Analysis of Financial Condition and Results of Operations |
23 |
Item 3. |
36 |
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Item 4. |
36 |
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PART II. |
OTHER INFORMATION |
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Item 1. |
37 |
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Item 1A. |
37 |
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Item 2. |
37 |
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Item 3. |
37 |
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Item 4. |
37 |
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Item 5. |
37 |
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Item 6. |
38 |
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39 |
i
FORWARD-LOOKING STATEMENTS
This Quarterly Report on Form 10-Q contains 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 (the “Securities Act”) and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). You can generally identify forward-looking statements by our use of forward-looking terminology such as “anticipate,” “believe,” “continue,” “could,” “estimate,” “expect,” “intend,” “may,” “might,” “plan,” “potential,” “predict,” “seek,” “vision,” or “should,” or the negative thereof or other variations thereon or comparable terminology. Forward-looking statements include those we make regarding the following matters:
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developments involving our competitors and our industry; |
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our ability to attract new customers, retain existing customers and maintain or grow the number of our Unlimited Wash Club ("UWC") members; |
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potential future impacts of the COVID-19 pandemic, including from variants thereof; |
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expectations regarding our industry; |
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our ability to maintain comparable store sales growth; |
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our ability to continue to identify and open greenfield locations; |
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our estimates of greenfield location expansions and our whitespace opportunity; |
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our ability to continue to identify suitable acquisition targets and consummate such acquisitions on attractive terms; |
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our ability to attract and retain a qualified management team and other team members while controlling our labor costs; |
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the impact of our debt and lease obligations on our ability to raise additional capital to fund our operations and maintain flexibility in operating our business; |
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our reliance on and relationships with third-party suppliers; |
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our ability to maintain security and prevent unauthorized access to electronic and other confidential information; |
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our ability to respond to risks associated with existing and future payment options; |
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our ability to maintain and enhance a strong brand image; |
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our ability to maintain adequate insurance coverage; |
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our status as a “controlled company” and Leonard Green & Partners, L.P.’s ("LGP") control of us as a public company; |
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the impact of evolving governmental laws and regulations and the outcomes of legal proceedings; and |
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the effects of potential changes to U.S. regulations and policies on our business. |
The preceding list is not intended to be an exhaustive list of all of our forward-looking statements. We have based these forward-looking statements on our current expectations, assumptions, estimates and projections. While we believe these expectations, assumptions, estimates and projections are reasonable, such forward-looking statements are only predictions and involve known and unknown risks and uncertainties, many of which are beyond our control. These and other important factors, including those discussed in this Quarterly Report on Form 10-Q in Part I., Item 2. “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and in Part II, Item IA. “Risk Factors” of our Quarterly Report on Form 10-Q for the quarterly period ended June 30, 2021 (the “Second Quarter 10-Q”) may cause our actual results, performance or achievements to differ materially from any future results, performance or achievements expressed or implied by these forward-looking statements. Furthermore, the potential impact of the pandemic related to COVID-19 and variants thereof on our business operations and financial results and on the world economy as a whole may heighten the risks and uncertainties that affect our forward-looking statements described above. Given these risks and uncertainties, you are cautioned not to place undue reliance on such forward-looking statements. The forward-looking statements included elsewhere in this Quarterly Report on Form 10-Q are not guarantees of future performance and our actual results of operations, financial condition and liquidity, and the development of the industry in which we operate, may differ materially from the forward-looking statements included elsewhere in this Quarterly Report on Form 10-Q. In addition, even if our results of operations, financial condition and liquidity, and events in the industry in which we operate, are consistent with the forward-looking statements included elsewhere in this Quarterly Report on Form 10-Q, they may not be predictive of results or developments in future periods.
Any forward-looking statement that we make in this Quarterly Report on Form 10-Q speaks only as of the date of such statement. Except as required by law, we do 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, after the date of this Quarterly Report on Form 10-Q.
2
PART I—FINANCIAL INFORMATION
Item 1. Financial Statements.
Mister Car Wash, Inc.
Condensed Consolidated Balance Sheets
(Amounts in thousands, except share and per share data)
(Unaudited)
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As of |
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September 30, 2021 |
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December 31, 2020 |
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Assets |
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Current assets: |
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Cash and cash equivalents |
$ |
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$ |
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Restricted cash |
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Accounts receivable, net |
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Inventory |
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Prepaid expenses and other current assets |
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Total current assets |
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Property and equipment, net |
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Operating lease right of use assets, net |
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Other intangible assets, net |
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Goodwill |
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Other assets |
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Total assets |
$ |
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$ |
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Liabilities and stockholders’ equity |
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Current liabilities: |
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Accounts payable |
$ |
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$ |
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Accrued payroll and related expenses |
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Other accrued expenses |
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Current maturities of debt |
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Current maturities of operating lease liability |
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Current maturities of finance lease liability |
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Deferred revenue |
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Total current liabilities |
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Long-term portion of debt, net |
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Operating lease liability |
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Financing lease liability |
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Long-term deferred tax liability |
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Other long-term liabilities |
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Total liabilities |
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) |
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Stockholders’ equity: |
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Common stock, $ |
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Additional paid-in capital |
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Accumulated other comprehensive loss |
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( |
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Accumulated deficit |
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( |
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Total stockholders’ equity |
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Total liabilities and stockholders’ equity |
$ |
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$ |
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See accompanying notes to unaudited condensed consolidated financial statements.
3
Mister Car Wash, Inc.
Condensed Consolidated Statements of Operations and Comprehensive Income (Loss)
(Amounts in thousands, except share and per share data)
(Unaudited)
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Three Months Ended September 30, |
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Nine Months Ended September 30, |
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2021 |
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2020 |
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2021 |
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2020 |
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Revenues, net |
$ |
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$ |
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$ |
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$ |
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Cost of labor and chemicals |
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Other store operating expenses |
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General and administrative |
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Loss (gain) on sale of assets |
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( |
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( |
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( |
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Total costs and expenses |
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Operating income (loss) |
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Other expense: |
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Interest expense, net |
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Loss on extinguishment of debt |
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Total other expense |
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Income (loss) before taxes |
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Income tax provision (benefit) |
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( |
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Net income (loss) |
$ |
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$ |
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$ |
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$ |
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Other comprehensive income (loss), net of tax: |
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Gain (loss) on interest rate swap |
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( |
) |
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( |
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Total comprehensive income (loss) |
$ |
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$ |
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$ |
( |
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$ |
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Net income (loss) per share: |
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Basic |
$ |
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$ |
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$ |
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$ |
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Diluted |
$ |
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$ |
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$ |
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$ |
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Weighted-average common shares outstanding: |
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Basic |
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Diluted |
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See accompanying notes to unaudited condensed consolidated financial statements.
4
Mister Car Wash, Inc.
Condensed Consolidated Statements of Stockholders’ Equity (Deficit)
(Amounts in thousands, except share and per share data)
(Unaudited)
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Common Stock |
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Additional Paid-in Capital |
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Accumulated Other Comprehensive Loss |
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Accumulated Deficit |
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Stockholders’ Equity (Deficit) |
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Shares |
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Amount |
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Balance as of December 31, 2020 |
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$ |
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$ |
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$ |
( |
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$ |
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$ |
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Stock-based compensation expense |
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- |
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- |
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- |
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- |
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Exercise of stock options |
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- |
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- |
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Shares repurchased |
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( |
) |
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- |
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( |
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- |
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- |
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( |
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Gain on interest rate swap |
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- |
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- |
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- |
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- |
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Net income |
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- |
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- |
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- |
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- |
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Balance as of March 31, 2021 |
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$ |
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$ |
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$ |
( |
) |
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$ |
( |
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$ |
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Issuance of common stock pursuant to initial public |
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- |
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- |
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Stock-based compensation expense |
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- |
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- |
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- |
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- |
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Vesting of restricted stock units |
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- |
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- |
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- |
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- |
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- |
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Exercise of stock options |
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- |
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- |
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Shares repurchased |
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( |
) |
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- |
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( |
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- |
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- |
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( |
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Gain on interest rate swap |
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- |
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- |
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- |
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- |
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Net loss |
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- |
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- |
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- |
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- |
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( |
) |
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( |
) |
Balance as of June 30, 2021 |
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$ |
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$ |
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$ |
( |
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$ |
( |
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$ |
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Stock-based compensation expense |
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- |
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- |
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- |
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- |
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Exercise of stock options |
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- |
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- |
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Shares repurchased |
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( |
) |
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- |
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( |
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- |
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- |
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( |
) |
Gain on interest rate swap |
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- |
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- |
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- |
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- |
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Net income |
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- |
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- |
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- |
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- |
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Balance as of September 30, 2021 |
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$ |
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$ |
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$ |
( |
) |
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$ |
( |
) |
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$ |
|
See accompanying notes to unaudited condensed consolidated financial statements.
5
Mister Car Wash, Inc.
Condensed Consolidated Statements of Stockholders’ Equity (Deficit)
(Amounts in thousands, except share and per share data)
(Unaudited)
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Common Stock |
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Additional Paid-in Capital |
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Accumulated Other Comprehensive Loss |
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Accumulated Deficit |
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Stockholders’ Equity (Deficit) |
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Shares |
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Amount |
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Balance as of December 31, 2019 |
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$ |
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$ |
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$ |
- |
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$ |
( |
) |
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$ |
( |
) |
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Adoption of new accounting standards, net of tax |
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- |
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- |
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- |
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- |
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Stock-based compensation expense |
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- |
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- |
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- |
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- |
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Shares repurchased |
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( |
) |
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- |
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( |
) |
|
|
- |
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|
- |
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( |
) |
Net income |
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- |
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- |
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- |
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|
- |
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Balance as of March 31, 2020 |
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$ |
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$ |
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$ |
- |
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$ |
( |
) |
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$ |
( |
) |
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Stock-based compensation expense |
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- |
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- |
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- |
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- |
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Shares repurchased |
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( |
) |
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- |
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( |
) |
|
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- |
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- |
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( |
) |
Loss on interest rate swap |
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- |
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- |
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- |
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( |
) |
|
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- |
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( |
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Net loss |
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- |
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- |
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- |
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- |
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( |
) |
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( |
) |
Balance as of June 30, 2020 |
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$ |
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$ |
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$ |
( |
) |
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$ |
( |
) |
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$ |
( |
) |
|||
Stock-based compensation expense |
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- |
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|
- |
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- |
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- |
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||
Exercise of stock options |
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|
|
|
|
- |
|
|
|
- |
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|
||||
Shares repurchased |
|
( |
) |
|
|
- |
|
|
|
( |
) |
|
|
- |
|
|
|
- |
|
|
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( |
) |
Loss on interest rate swap |
|
- |
|
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- |
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- |
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( |
) |
|
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- |
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( |
) |
Net income |
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- |
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- |
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- |
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- |
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Balance as of September 30, 2020 |
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$ |
|
|
$ |
|
|
$ |
( |
) |
|
$ |
( |
) |
|
$ |
( |
) |
See accompanying notes to unaudited condensed consolidated financial statements.
6
Mister Car Wash, Inc.
Condensed Consolidated Statements of Cash Flows
(Amounts in thousands)
(Unaudited)
|
Nine Months Ended September 30, |
|
|||||
|
2021 |