Mister Car Wash Announces Second Quarter Fiscal 2022 Financial Results

Net revenues increased 14.2%
Comparable stores sales increased 2.4%
Unlimited Wash Club memberships increased 20.0%
Opened four new greenfield locations and opened six acquired 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 June 30, 2022.

“We think our second quarter results demonstrate the resilience of our business. Demand throughout the quarter remained relatively consistent and we did not see a meaningful change in cancellation rates or the make-up of our Unlimited Wash Club subscription business,” commented John Lai, Chairperson and CEO of Mister Car Wash. “While inflationary pressures, rising interest rates, public company costs, and investments to continue growing and scaling the business have created some near-term pressure on our margins, we are focused on the long-term growth and health of the business.”

Highlights for the Second Quarter 2022

• Net revenues increased 14.2% to $225.2 million for the second quarter of 2022 from $197.1 million in the second quarter of 2021.
• Comparable stores sales increased 2.4% for the second quarter of 2022, compared to a 93.0% increase in the second quarter of 2021.
• The Company added more than 59 thousand Unlimited Wash Club (“UWC”) Members in the second quarter. As of June 30, 2022, the Company had approximately 1.841 million UWC Members, which represented a 20.0% increase over the same time last year. UWC sales represented approximately 66.2% of total wash sales in the second quarter of 2022 compared to approximately 62.3% in the second quarter of 2021.
• The Company opened four new greenfield locations and opened six acquired locations in the second quarter of 2022, bringing the total number of car wash locations operated to 409 on June 30, 2022, compared to 351 on June 30, 2021, an increase of 16.5%.
• Net income and net income per diluted share were $35.7 million and $0.11, respectively, for the second quarter of 2022 compared to net loss and net loss per diluted share of $110.3 million and ($0.42), respectively, for the second quarter of 2021.
• Adjusted net income⁽¹⁾ decreased 9.5% to $37.2 million in the second quarter of 2022 from $41.4 million in the second quarter of 2021. Adjusted net income per share⁽¹⁾ decreased to $0.11 from $0.14 for the same respective periods.
• Adjusted EBITDA⁽¹⁾increased 1.9% to $74.5 million for the second quarter of 2022 from $73.1 million in the second quarter of 2021.

Highlights for the Six-Months Ended June 30, 2022

• Net revenues increased 19.3% to $444.6 million for the six months ended June 30, 2022 from $372.6 million during the same period of fiscal 2021.
• Comparable stores sales increased 6.5% for the six months ended June 30, 2022 compared to the prior year period.
• The Company added nearly 185 thousand UWC Members in the six months ended June 30, 2022.
• Net income and net income per diluted share were $71.1 million and $0.22, respectively, for the six months ended June 30, 2022 compared to net loss and net loss per diluted share of $85.7 million and ($0.33), respectively, for the six months ended June 30, 2021.
• Adjusted net income⁽¹⁾ increased 26.4% to $74.9 million for the six months ended June 30, 2022 compared to $59.3 million during the prior year period. Adjusted net income per share⁽¹⁾increased 9.7% to $0.23 from $0.21 for the same respective periods.
• Adjusted EBITDA⁽¹⁾increased 10.9% to $149.3 million for the six months ended June 30, 2022 compared to $134.6 million during the prior year period.

⁽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

Balance Sheet and Cash Flow Highlights

• As of June 30, 2022, cash and cash equivalents totaled $37.8 million, and there were no borrowings under the Company’s Revolving Commitment, compared to cash and cash equivalents of $19.9 million and no borrowings under the Revolving Commitment as of June 30, 2021.
• Net cash provided by operating activities totaled $134.6 million during the first six months of 2022, compared to $119.7 million for the same period of fiscal 2021.

Subsequent Event

• On July 15, 2022, the Company completed one sale-leaseback transaction related to its car wash locations with aggregate consideration of $55.2 million.

Fiscal 2022 Outlook

The Company is adjusting its outlook for the fiscal year ending December 31, 2022, as follows:

⁽¹⁾ Total capital expenditures for the fiscal year ending December 31, 2022 are expected to consist of approximately $190 to $220 million of growth capital expenditures related to the opening of new stores and $45 million to $65 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 fiscal 2022 and to provide a business update is scheduled for today, August 11, 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, expenses associated with the secondary public offering, 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, expenses associated with the secondary public offering, 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, expenses associated with the secondary public offering, 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, expenses associated with the secondary public offering, 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: 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; growing 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, 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.

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Investors
John Rouleau
ICR
IR@mistercarwash.com

Media
Megan Everett
media@mistercarwash.com

Source: Mister Car Wash, Inc.

Released August 11, 2022