Mister Car Wash Announces First Quarter Fiscal 2022 Financial Results

Net revenues increased 25.0%

Comparable stores sales increased 11.0%

Unlimited Wash Club memberships increased 28.1%

Opened 3 new greenfield locations

TUCSON, Ariz.--(BUSINESS WIRE)-- 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, 2022.

“We had another great quarter highlighted by strong sales and membership growth, greenfield performance, and our extraordinary team’s consistent service delivery,” commented John Lai, Chairperson and CEO of Mister Car Wash. “We remain committed to the ongoing investments in our team members as we scale the nation’s premier car wash brand.”

Highlights for the First Quarter 2022

  • Net revenues increased 25.0% to $219.4 million for the first quarter of 2022 from $175.5 million in the first quarter of 2021.
  • Comparable stores sales increased 11.0% for the first quarter of 2022 compared to the first quarter of 2021.
  • As of March 31, 2022, the Company had 1.781 million Unlimited Wash Club (“UWC”) Members, which represented a 28.1% increase over the same time last year. UWC sales represented approximately 64.3% of total wash sales in the first quarter of 2022 compared to 61.9% in the first quarter of 2021.
  • The Company opened three new greenfield locations in the first quarter of 2022 bringing our total car wash locations operated as of March 31, 2022 to 399, compared to 344 locations as of March 31, 2021, an increase of 16.0%.
  • Net income and net income per diluted share were $35.5 million and $0.11, respectively, for the first quarter of 2022 compared to $24.6 million and $0.09, respectively, for the first quarter of 2021.
  • Adjusted net income(1) increased 43.1% to $37.8 million in the first quarter of 2022 from $26.4 million in the first quarter of 2021. Adjusted net income per share(1) increased to $0.11 from $0.09 for the same respective periods.
  • Adjusted EBITDA(1) increased 21.8% to $74.8 million for the first quarter of 2022 from $61.5 million in the first quarter of 2021.

(1) See Use of Non-GAAP Financial Measures and Reconciliation of GAAP to Non-GAAP Financial Measures disclosures included below in this press release.

Store Count

 

 

Three Months Ended March 31,

 

 

2022

 

2021

Beginning location count

 

396

 

342

Locations acquired

 

-

 

-

Greenfield locations opened

 

3

 

2

Closures

 

-

 

-

Ending location count

 

399

 

344

Balance Sheet and Cash Flow Highlights

  • As of March 31, 2022, cash and cash equivalents totaled $70.3 million, and there were no borrowings under the Company’s Revolving Commitment, compared to cash and cash equivalents of $19.7 million and no borrowings under the Revolving Commitment as of December 31, 2021.
  • Net cash provided by operating activities totaled $81.5 million during the first quarter of 2022, compared to $51.6 million in the first quarter of 2021.

Fiscal 2022 Outlook

The Company reiterates the guidance previously provided for the fiscal year ending December 31, 2022:

 

 

2022 Outlook

Net revenues

 

$875 to $895 million

Comparable stores sales growth %

 

5.0% to 7.0%

GAAP net income

 

$139 to $149 million

Adjusted net income

 

$144 to $153 million

Adjusted EBITDA

 

$284 to $297 million

Adjusted net income per share, diluted

 

$0.44 to $0.47

Weighted average common shares outstanding, diluted, full year

 

329 million

New greenfield locations

 

Approx. 30

Capital expenditures

 

$285 to $315 million

Sale leasebacks

 

$140 to $150 million

Conference Call Details

A conference call to discuss the Company’s financial results for the first quarter of fiscal 2022 and to provide a business update is scheduled for today, May 12, 2022 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, AZ, Mister Car Wash, Inc. (NYSE: MCW) operates more than 400 car washes nationwide and has the largest car wash subscription program in North America. With over 25 years of car wash experience, the Mister team is focused on operational excellence and delivering a memorable customer experience through elevated hospitality. The Mister brand is anchored in quality, friendliness and a commitment to the communities we serve as good stewards of the environment and the resources we use. We believe that when you take care of your people, they will take care of your customers. 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 (loss), Adjusted net income (loss) per share and Adjusted net income (loss) per share, on a diluted basis (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 non-GAAP financial measures used by other companies. In addition, these 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 financial 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 (loss) income before interest expense, net, income tax (benefit) expense, depreciation and amortization expense, (gain) loss on sale of assets, gain on sale of quick lube facilities, dividend recapitalization fees and payments, loss on early debt extinguishment, stock-based compensation expense, acquisition expenses, management fees, non-cash rent expense, expenses associated with the IPO, and other nonrecurring charges. Adjusted net income (loss) is defined as net income (loss) before interest expense, (gain) loss on sale of assets, dividend recapitalization fees and payments, loss on debt extinguishment, stock-based compensation expense, acquisition expenses, management fees, non-cash rent expense, expenses associated with the IPO, other nonrecurring charges and the tax impact of adjustments to net (loss) income. Adjusted net (loss) income per share is defined as basic net (loss) income per share before (gain) loss on sale of assets, gain on sale of quick lube facilities, dividend recapitalization fees and payments, loss on debt extinguishment, stock-based compensation expense, acquisition expenses, management fees, non-cash rent expense, expenses associated with the IPO, other nonrecurring charges and the tax impact of adjustments to basic net (loss) income per share. Diluted adjusted net income per share is defined as diluted net (loss) income per share before (gain) loss on sale of assets, gain on sale of quick lube facilities, dividend recapitalization fees and payments, loss on debt extinguishment, stock-based compensation expense, acquisition expenses, management fees, non-cash rent expense, expenses associated with the IPO, other nonrecurring charges and the tax impact of adjustments to basic net (loss) income per share.

The Company presents the Company’s Non-GAAP Financial Measures because management believes that these 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. The Company’s presentation of Company’s Non-GAAP Financial Measures should not be construed as an inference that the Company’s future results will be unaffected by unusual or nonrecurring items. 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. In addition, the Company’s Non-GAAP Financial Measures may not be comparable to similarly titled measures used by other companies in the Company’s industry or across different industries.

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. In addition, other companies in the Company’s industry may calculate similarly titled non-GAAP financial measures differently than the Company.

A reconciliation of the Company’s full year guidance for Adjusted EBITDA, Adjusted net income (loss) and Adjusted net income per share, diluted, for fiscal 2022 to the most directly comparable GAAP financial measures cannot be provided without unreasonable efforts and is not provided herein because of the inherent difficulty in forecasting and quantifying certain amounts that are necessary for such reconciliations, including acquisition expenses, other expenses and the other adjustments reflected in our reconciliation of historical non-GAAP financial measures, the amounts of which, could be material.

Forward-Looking Statements

This press release includes “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements in this press release include but are not limited to Mister Car Wash’s expansion efforts and expected growth and financial and operational results for fiscal 2022. 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. 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: developments involving the Company’s competitors and its industry; the Company’s ability to attract new customers, retain existing customers and maintain or grow its number of subscription members; potential future impacts of the COVID-19 pandemic, including from variants thereof; the Company’s ability to open and operate new locations on a timely and cost-effective manner; the Company’s ability to identify suitable acquisition targets and consummate such acquisitions on attractive terms; the Company’s ability to maintain and enhance its brand reputation; the Company’s reliance on and relationships with third-party suppliers; risk related to the Company’s indebtedness and capital requirements; risk related to governmental laws and regulations applicable to the Company and its business; the Company’s ability to maintain data and information security and prevent unauthorized access to electronic and other confidential information; 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, 2021, 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 Investors Relations section of the Company’s website at www.mistercarwash.com.

These and other important factors could cause actual results to differ materially from those indicated by the forward-looking statements made in this press release. Any forward-looking statement that the Company makes in this press release speaks only as of the date of such statement. Except as required by law, the Company does not have 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 March 31,

 

2022

 

2021

Net revenues

$

219,419

 

$

175,508

Cost of labor and chemicals

 

65,538

 

 

51,749

Other store operating expenses

 

77,801

 

 

61,083

General and administrative

 

23,687

 

 

14,961

Loss on sale of assets

 

459

 

 

790

Total costs and expenses

 

167,485

 

 

128,583

Operating income

 

51,934

 

 

46,925

 

 

 

 

Other expense:

 

 

 

Interest expense, net

 

8,166

 

 

13,959

Total other expense

 

8,166

 

 

13,959

Income before taxes

 

43,768

 

 

32,966

Income tax provision

 

8,280

 

 

8,382

Net income

$

35,488

 

$

24,584

 

 

 

 

Other comprehensive income, net of tax:

 

 

 

Gain on interest rate swap

 

1,869

 

 

319

Total comprehensive income

$

37,357

 

$

24,903

 

 

 

 

Net income per share:

 

 

 

Basic

$

0.12

 

$

0.09

Diluted

$

0.11

 

$

0.09

Weighted-average common shares outstanding:

 

 

 

Basic

 

300,931,453

 

 

262,151,037

Diluted

 

329,172,437

 

 

278,354,463

Condensed Consolidated Balance Sheets

(Amounts in thousands, except share and per share data)

(Unaudited)

 

 

As of

 

 

March 31, 2022

 

 

December 31, 2021

 

Assets

 

 

 

 

 

Current assets:

 

 

 

 

 

Cash and cash equivalents

$

70,261

 

 

$

19,738

 

Restricted cash

 

174

 

 

 

120

 

Accounts receivable, net

 

1,128

 

 

 

1,090

 

Other receivables

 

12,733

 

 

 

22,796

 

Inventory, net

 

7,000

 

 

 

6,334

 

Prepaid expenses and other current assets

 

9,858

 

 

 

8,766

 

Total current assets

 

101,154

 

 

 

58,844

 

 

 

 

 

 

 

Property and equipment, net

 

487,897

 

 

 

472,448

 

Operating lease right of use assets, net

 

716,745

 

 

 

718,533

 

Other intangible assets, net

 

128,052

 

 

 

129,820

 

Goodwill

 

1,060,766

 

 

 

1,060,221

 

Other assets

 

8,265

 

 

 

8,236

 

Total assets

$

2,502,879

 

 

$

2,448,102

 

 

 

 

 

 

 

Liabilities and stockholders’ equity

 

 

 

 

 

Current liabilities:

 

 

 

 

 

Accounts payable

$

33,869

 

 

$

27,346

 

Accrued payroll and related expenses

 

20,484

 

 

 

16,963

 

Other accrued expenses

 

20,405

 

 

 

20,201

 

Current maturities of operating lease liability

 

37,889

 

 

 

37,345

 

Current maturities of finance lease liability

 

577

 

 

 

559

 

Deferred revenue

 

28,463

 

 

 

27,815

 

Total current liabilities

 

141,687

 

 

 

130,229

 

 

 

 

 

 

 

Long-term portion of debt, net

 

894,629

 

 

 

896,336

 

Operating lease liability

 

714,098

 

 

 

717,552

 

Financing lease liability

 

15,206

 

 

 

15,359

 

Long-term deferred tax liability

 

28,246

 

 

 

22,603

 

Other long-term liabilities

 

7,659

 

 

 

8,871

 

Total liabilities

 

1,801,525

 

 

 

1,790,950

 

 

 

 

 

 

 

Stockholders’ equity:

 

 

 

 

 

Common stock, $0.01 par value, 1,000,000,000 shares authorized, 301,607,178 and 300,120,451 shares outstanding as of March 31, 2022 and December 31, 2021, respectively

 

3,022

 

 

 

3,007

 

Additional paid-in capital

 

759,173

 

 

 

752,343

 

Accumulated other comprehensive income

 

2,094

 

 

 

225

 

Accumulated deficit

 

(62,935

)

 

 

(98,423

)

Total stockholders’ equity

 

701,354

 

 

 

657,152

 

Total liabilities and stockholders’ equity

$

2,502,879

 

 

$

2,448,102

 

Condensed Consolidated Statements of Cash Flows

(Amounts in thousands)

(Unaudited)

 

 

Three Months Ended March 31,

 

2022

 

2021

Cash flows from operating activities:

 

 

 

 

 

Net income

$

35,488

 

 

$

24,584

 

Adjustments to reconcile net income to net cash provided by operating activities:

 

 

 

 

 

Depreciation and amortization expense

 

14,945

 

 

 

11,650

 

Stock-based compensation expense

 

5,519

 

 

 

310

 

Loss on sale of assets

 

459

 

 

 

790

 

Amortization of deferred debt issuance costs

 

419

 

 

 

356

 

Non-cash lease expense

 

9,606

 

 

 

8,613

 

Deferred income tax

 

5,018

 

 

 

7,099

 

Changes in assets and liabilities:

 

 

 

 

 

Accounts receivable, net

 

146

 

 

 

(318

)

Other receivables

 

10,108

 

 

 

(262

)

Inventory, net

 

(665

)

 

 

289

 

Prepaid expenses and other current assets

 

901

 

 

 

(242

)

Accounts payable

 

5,679

 

 

 

3,144

 

Accrued expenses

 

3,635

 

 

 

2,799

 

Deferred revenue

 

648

 

 

 

1,254

 

Operating lease liability

 

(9,094

)

 

 

(8,245

)

Other noncurrent assets and liabilities

 

(1,268

)

 

 

(232

)

Net cash provided by operating activities

$

81,544

 

 

$

51,589

 

 

 

 

 

 

 

Cash flows from investing activities:

 

 

 

 

 

Purchases of property and equipment

 

(30,015

)

 

 

(32,301

)

Proceeds from sale of property and equipment

 

1

 

 

 

3,591

 

Net cash used in investing activities

$

(30,014

)

 

$

(28,710

)

 

 

 

 

 

 

Cash flows from financing activities:

 

 

 

 

 

Proceeds from exercise of stock options

 

1,281

 

 

 

121

 

Payments for repurchases of common stock

 

-

 

 

 

(199

)

Payments on debt borrowings

 

(2,100

)

 

 

(2,100

)

Principal payments on finance lease obligations

 

(134

)

 

 

(119

)

Payments of issuance costs pursuant to initial public offering

 

-

 

 

 

(35

)

Net cash used in financing activities

$

(953

)

 

$

(2,332

)

 

 

 

 

 

 

Net change in cash and cash equivalents and restricted cash during period

 

50,577

 

 

 

20,547

 

Cash and cash equivalents and restricted cash at beginning of period

 

19,858

 

 

 

117,874

 

Cash and cash equivalents and restricted cash at end of period

$

70,435

 

 

$

138,421

 

 

 

 

 

 

 

Supplemental disclosure of cash flow information:

 

 

 

 

 

Cash paid for interest

$

7,821

 

 

$

14,149

 

Cash paid for income taxes

$

-

 

 

$

109

 

 

 

 

 

 

 

Supplemental disclosure of non-cash investing and financing activities:

 

 

 

 

 

Property and equipment in accounts payable

$

18,123

 

 

$

6,363

 

Stock option exercise proceeds in other receivables

$

45

 

 

$

-

 

Repurchase of common stock in other accrued expenses

$

-

 

 

$

15

 

Deferred offering costs in accounts payable and other accrued expenses

$

-

 

 

$

1,030

 

GAAP to Non-GAAP Reconciliations

(Amounts in thousands, except share and per share data)

(Unaudited)

 

 

 

Three Months Ended March 31,

 

 

 

2022

 

 

2021

 

Reconciliation of net income to Adjusted EBITDA:

 

 

 

Net income

 

$

35,488

 

$

24,584

Interest expense, net

 

 

8,166

 

13,959

Income tax provision

 

 

8,280

 

8,382

Depreciation and amortization expense

 

 

14,945

 

11,650

Loss on sale of assets

 

 

459

 

790

Stock-based compensation expense

 

 

5,519

 

310

Acquisition expenses

 

 

534

 

454

Management fees

 

 

-

 

250

Non-cash rent expense

 

 

520

 

378

Expenses associated with initial public offering

 

 

286

 

-

Other

 

 

652

 

715

Adjusted EBITDA

 

$

74,849

 

$

61,472

 

 

 

Three Months Ended March 31,

 

 

 

2022

 

2021

Reconciliation of weighted-average common shares outstanding - diluted to Adjusted weighted-average common shares outstanding - diluted:

 

 

Weighted-average common shares outstanding - diluted

 

 

329,172,437

 

278,354,463

Adjustments for potentially dilutive securities

 

 

-

 

-

Adjusted weighted-average common shares outstanding - diluted

 

 

329,172,437

 

278,354,463

 

 

 

Three Months Ended March 31,

 

 

 

2022

 

2021

Reconciliation of net income to Adjusted Net Income:

 

 

Net income

 

$

35,488

 

$

24,584

Loss on sale of assets

 

 

459

 

790

Stock-based compensation expense

 

 

5,519

 

310

Acquisition expenses

 

 

534

 

454

Management fees

 

 

-

 

250

Non-cash rent expense

 

 

520

 

378

Expenses associated with initial public offering

 

 

286

 

-

Other

 

 

652

 

715

Income tax impact of stock award exercises

 

 

(3,704

)

(360

)

Tax impact of adjustments to net income

 

 

(1,993

)

(724

)

Adjusted Net Income

 

$

37,761

 

$

26,397

Diluted Adjusted Net Income per Share

 

$

0.11

 

$

0.09

Adjusted weighted-average common shares outstanding - diluted

 

 

329,172,437

 

278,354,463

 

Investors
John Rouleau
ICR
IR@mistercarwash.com

Media
Megan Everett
media@mistercarwash.com

Source: Mister Car Wash, Inc.