Mister Car Wash Quarterly report pursuant to Section 13 or 15(d)

Quarterly report pursuant to Section 13 or 15(d)

Summary of Significant Accounting Policies (Policies)

Summary of Significant Accounting Policies (Policies)

6 Months Ended

Jun. 30, 2023

The accompanying unaudited condensed consolidated financial statements include the accounts of the Company. All material intercompany balances and transactions have been eliminated in consolidation.

Use of Estimates

The preparation of the unaudited condensed consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the financial statements. Estimates also affect the reported amounts of revenue and expenses during the periods reported. Some of the significant estimates that we have made pertain to the determination of deferred tax assets and liabilities; estimates utilized to determine the fair value of assets acquired and liabilities assumed in business combinations and the related goodwill and intangibles; and certain assumptions used related to the evaluation of goodwill, intangibles, and property and equipment asset impairment. Actual results could differ from those estimates.

Accounts Receivable, Net

Accounts receivable are presented net of an allowance for doubtful accounts of $36 and $76 as of June 30, 2023 and December 31, 2022, respectively. The activity in the allowance for doubtful accounts was immaterial for the three and six months ended June 30, 2023 and 2022.

Other Receivables

Other receivables consisted of the following for the periods presented:


	As of
	June 30, 2023		December 31, 2022
Payroll tax withholding and exercise proceeds receivable	$	1,043	$	273
Construction receivable		7,377		6,199
Income tax receivable		2,255		4,387
Insurance receivable		2,651		2,627
Other		8,396		1,696
Total other receivables	$	21,722	$	15,182

Inventory, Net

Inventory consisted of the following for the periods presented:


	As of
	June 30, 2023			December 31, 2022
Chemical washing solutions	$	8,439		$	9,357
Reserve for obsolescence		(166	)		(183	)
Total inventory, net	$	8,273		$	9,174

The activity in the reserve for obsolescence was immaterial for the three and six months ended June 30, 2023 and 2022.

Revenue Recognition

The following table summarizes the composition of our net revenues for the periods presented:


	Three Months Ended June 30,				Six Months Ended June 30,
	2023		2022		2023		2022
Recognized over time	$	164,733	$	149,062	$	321,624	$	289,936
Recognized at a point in time		72,029		75,822		140,999		153,830
Other revenue		132		275		231		812
Net revenues	$	236,894	$	225,159	$	462,854	$	444,578

Net Income Per Share

Basic net income per share is computed by dividing net income by the weighted-average number of common shares outstanding for the period. Diluted net income per share is computed by dividing net income by the weighted-average shares outstanding for the period and includes the dilutive impact of potential new shares issuable upon vesting and exercise of stock options, vesting of restricted stock units, and stock purchase rights granted under an employee stock purchase plan. Potentially dilutive securities are excluded from the computation of diluted net income per share because they would have an antidilutive effect. Reconciliations of the numerators and denominators of the basic and diluted net income per share calculations for the periods presented are as follows:


	Three Months Ended June 30,				Six Months Ended June 30,
	2023		2022		2023		2022
Numerator:
Net income	$	27,132	$	35,659	$	48,268	$	71,147

Denominator:
Weighted-average common shares outstanding - basic		309,314,858		302,666,291		308,308,972		301,803,664
Effect of potentially dilutive securities:
Stock options		18,363,467		23,912,934		19,081,022		25,461,476
Restricted stock units		603,008		648,060		550,611		939,513
Employee stock purchase plan		2,020		2,246		10,794		1,123
Weighted-average common shares outstanding - diluted		328,283,353		327,229,531		327,951,399		328,205,776

Net income per share - basic	$	0.09	$	0.12	$	0.16	$	0.24
Net income per share - diluted	$	0.08	$	0.11	$	0.15	$	0.22

The following potentially dilutive shares were excluded from the computation of diluted net income per share for the periods presented because including them would have been antidilutive:


	Three Months Ended June 30,				Six Months Ended June 30,
	2023		2022		2023		2022
Stock options		3,555,410		2,139,197		3,116,583		2,090,169
Restricted stock units		235,216		166,672		295,808		83,336
Employee stock purchase plan		88,163		96,212		45,891		48,106

Recently Adopted Accounting Pronouncements

There have been no new accounting standards issued which would require either disclosure or adoption in the current period.

- Definition

Disclosure of inventory accounting policy for inventory classes, including, but not limited to, basis for determining inventory amounts, methods by which amounts are added and removed from inventory classes, loss recognition on impairment of inventories, and situations in which inventories are stated above cost.

+ References + Details