Net revenues increased 3.0%
Unlimited Wash Club memberships increased 12.6%
and exceeded 2.0 million members
Opened four new greenfield locations
Fiscal 2023 guidance reiterated
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, 2023.
“Our Unlimited Wash Club® (“UWC”) proved resilient during the
first quarter fueled by good member retention and signup levels.
Despite some weather-related headwinds to retail sales in the first
quarter, we added 122 thousand net new UWC Members and surpassed
two million members marking another milestone for the Company,”
commented John Lai, Chairperson and CEO of Mister Car Wash. “We
remain committed to the ongoing investments in our business to
drive sustainable long-term growth and remain confident in our 2023
full year outlook.”
First Quarter Highlights
- Net revenues increased 3.0% to $226.0 million from $219.4
million in the first quarter of 2022.
- Comparable stores sales decreased 1.6%, compared to an 11.0%
increase in the first quarter of 2022.
- The Company added 122 thousand net new UWC Members in the first
quarter. As of March 31, 2023, the Company had more than 2.0
million UWC Members, which represented a 12.6% increase over the
same time last year. UWC sales represented approximately 69.3% of
total wash sales in the first quarter of 2023 compared to
approximately 64.3% in the first quarter of 2022.
- The Company opened four new greenfield locations in the first
quarter of 2023, bringing the total number of car wash locations
operated to 439 as of March 31, 2023, compared to 399 car wash
locations as of March 31, 2022, an increase of 10.0%.
- Net income and net income per diluted share were $21.1 million
and $0.06, respectively.
- Adjusted net income(1) and diluted adjusted net income per
share(1) were $26.7 million and $0.08, respectively.
- Adjusted EBITDA(1) decreased 5.2% to $71.0 million from $74.8
million in the first quarter of 2022.
(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,
2023
2022
Beginning location count
436
396
Locations acquired
-
-
Greenfield locations opened
4
3
Closures
1
-
Ending location count
439
399
Balance Sheet and Cash Flow Highlights
- As of March 31, 2023, cash and cash equivalents totaled $69.9
million, and there were no borrowings under the Company’s Revolving
Commitment, compared to cash and cash equivalents of $65.2 million
and no borrowings under the Revolving Commitment as of December 31,
2022.
- Net cash provided by operating activities totaled $67.0 million
during the first quarter of 2023, compared to $81.5 million in the
first quarter of 2022.
Sale-Leasebacks and Rent Expense
- In the first quarter of 2023, the Company completed two
separate sale-leaseback transactions involving a total of two car
wash locations for aggregate consideration of $9.2 million.
- With 388 car wash leases at the end of the first quarter versus
348 leases at the end of the first quarter last year, rent expense
increased 13.1% to $23.8 million.
Fiscal 2023 Outlook
The Company reiterates the guidance previously provided for the
fiscal year ending December 31, 2023:
2023 Outlook
Net revenues
$925 to $960 million
Comparable stores sales growth %
0.0% to 3.0%
Adjusted net income
$100 to $115 million
Adjusted EBITDA
$277 to $297 million
Diluted adjusted net income per share
$0.30 to $0.35
Interest expense, net
$73 million
Rent expense, net
Approx. $100 million
Weighted average common shares
outstanding, diluted, full year
330 million
New greenfield locations
Approx. 35
Capital expenditures(1)
$220 to $270 million
Sale leasebacks
$110 to $130 million
(1)
Total capital expenditures for the fiscal
year ending December 31, 2023 are expected to consist of
approximately $175 million to $205 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 first quarter of fiscal 2023 and to provide a business update
is scheduled for today, May 02, 2023, 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 over 435 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: https://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 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, acquisition expenses, non-cash
rent expense, expenses associated with the IPO, 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, expenses
associated with the Company’s initial public offering, other
nonrecurring charges, tax benefits related to stock awards
exercised 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, acquisition expenses, non-cash rent expense, expenses
associated with the Company’s initial public offering, other
nonrecurring charges, tax benefits related to stock awards
exercised 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, expenses associated with the IPO, other nonrecurring
charges, tax benefits related to stock awards exercised 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 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.
The Company is not providing a reconciliation of the fiscal 2023
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 (the
“Securities Act”) and Section 21E of the Securities Exchange Act of
1934, as amended (the “Exchange Act”). 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 2023. 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, though not all forward-looking statements use
these words or expressions.
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,
2022, 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,
2023
2022
Net revenues
$
225,960
$
219,419
Cost of labor and chemicals
66,792
65,538
Other store operating expenses
89,466
77,801
General and administrative
24,183
23,687
(Gain) loss on sale of assets
(63
)
459
Total costs and expenses
180,378
167,485
Operating income
45,582
51,934
Other expense:
Interest expense, net
17,748
8,166
Total other expense
17,748
8,166
Income before taxes
27,834
43,768
Income tax provision
6,698
8,280
Net income
$
21,136
$
35,488
Other comprehensive income, net of
tax:
Gain on interest rate swap
-
1,869
Total comprehensive income
$
21,136
$
37,357
Net income per share:
Basic
$
0.07
$
0.12
Diluted
$
0.06
$
0.11
Weighted-average common shares
outstanding:
Basic
307,291,909
300,931,453
Diluted
327,608,266
329,172,437
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, 2023
December 31, 2022
Assets
Current assets:
Cash and cash equivalents
$
69,903
$
65,152
Restricted cash
70
70
Accounts receivable, net
933
3,941
Other receivables
14,116
15,182
Inventory, net
8,228
9,174
Prepaid expenses and other current
assets
10,767
12,618
Total current assets
104,017
106,137
Property and equipment, net
596,695
560,874
Operating lease right of use assets,
net
776,496
776,689
Other intangible assets, net
122,122
123,615
Goodwill
1,109,815
1,109,815
Other assets
8,190
9,102
Total assets
$
2,717,335
$
2,686,232
Liabilities and stockholders’
equity
Current liabilities:
Accounts payable
$
30,379
$
25,649
Accrued payroll and related expenses
20,036
17,218
Other accrued expenses
30,730
41,196
Current maturities of operating lease
liability
41,279
40,367
Current maturities of finance lease
liability
687
668
Deferred revenue
30,509
29,395
Total current liabilities
153,620
154,493
Long-term portion of debt, net
896,223
895,830
Operating lease liability
758,752
759,775
Financing lease liability
14,599
14,779
Deferred tax liability
58,823
53,395
Other long-term liabilities
6,577
6,832
Total liabilities
1,888,594
1,885,104
Stockholders’ equity:
Common stock, $0.01 par value,
1,000,000,000 shares authorized, 308,101,847 and 306,626,530 shares
outstanding as of March 31, 2023 and December 31, 2022,
respectively
3,087
3,072
Additional paid-in capital
790,041
783,579
Retained earnings (Accumulated
Deficit)
35,613
14,477
Total stockholders’ equity
828,741
801,128
Total liabilities and stockholders’
equity
$
2,717,335
$
2,686,232
Condensed Consolidated
Statements of Cash Flows
(Amounts in thousands)
(Unaudited)
Three Months Ended March
31,
2023
2022
Cash flows from operating
activities:
Net income
$
21,136
$
35,488
Adjustments to reconcile net income to net
cash provided by operating activities:
Depreciation and amortization expense
17,307
14,945
Stock-based compensation expense
5,361
5,519
(Gain) loss on sale of assets, net
(63
)
459
Amortization of debt issuance costs
419
419
Non-cash lease expense
10,739
9,606
Deferred income tax
5,428
5,018
Changes in assets and liabilities:
Accounts receivable, net
3,009
146
Other receivables
1,128
10,108
Inventory, net
946
(665
)
Prepaid expenses and other current
assets
1,850
901
Accounts payable
2,553
5,679
Accrued expenses
5,155
3,635
Deferred revenue
1,114
648
Operating lease liability
(9,696
)
(9,094
)
Other noncurrent assets and
liabilities
631
(1,268
)
Net cash provided by operating
activities
$
67,017
$
81,544
Cash flows from investing
activities:
Purchases of property and equipment
(72,059
)
(30,015
)
Proceeds from sale of property and
equipment
8,899
1
Net cash used in investing activities
$
(63,160
)
$
(30,014
)
Cash flows from financing
activities:
Proceeds from issuance of common stock
under employee plans
1,055
1,281
Payments on debt borrowings
-
(2,100
)
Principal payments on finance lease
obligations
(161
)
(134
)
Net cash provided (used) by financing
activities
$
894
$
(953
)
Net change in cash and cash equivalents
and restricted cash during period
4,751
50,577
Cash and cash equivalents and restricted
cash at beginning of period
65,222
19,858
Cash and cash equivalents and restricted
cash at end of period
$
69,973
$
70,435
Supplemental disclosure of cash flow
information:
Cash paid for interest
$
11,697
$
7,821
Cash paid for income taxes
$
151
$
-
Supplemental disclosure of non-cash
investing and financing activities:
Property and equipment in accounts
payable
$
11,993
$
18,123
Property and equipment in other accrued
expenses
$
5,969
$
-
Stock option exercise proceeds in other
receivables
$
61
$
45
GAAP to Non-GAAP
Reconciliations
(Amounts in thousands, except
share and per share data)
(Unaudited)
Three Months Ended March
31,
2023
2022
Reconciliation of net income to Adjusted
EBITDA:
Net income
$
21,136
$
35,488
Interest expense, net
17,748
8,166
Income tax provision
6,698
8,280
Depreciation and amortization expense
17,307
14,945
Loss on sale of assets
(63
)
459
Stock-based compensation expense
5,361
5,519
Acquisition expenses
459
534
Non-cash rent expense
1,030
520
Expenses associated with initial public
offering
-
286
Other
1,300
652
Adjusted EBITDA
$
70,976
$
74,849
Three Months Ended March
31,
2023
2022
Reconciliation of weighted-average common
shares outstanding - diluted to Adjusted weighted-average common
shares outstanding - diluted:
Weighted-average common shares outstanding
- diluted
327,608,266
329,172,437
Adjustments for potentially dilutive
securities
-
-
Adjusted weighted-average common shares
outstanding - diluted
327,608,266
329,172,437
Three Months Ended March
31,
2023
2022
Reconciliation of net income to Adjusted
Net Income:
Net income
$
21,136
$
35,488
Loss on sale of assets
(63
)
459
Stock-based compensation expense
5,361
5,519
Acquisition expenses
459
534
Non-cash rent expense
1,030
520
Expenses associated with initial public
offering
-
286
Other
1,300
652
Income tax impact of stock award
exercises
(516
)
(3,704
)
Tax impact of adjustments to net
income
(2,022
)
(1,993
)
Adjusted Net Income
$
26,685
$
37,761
Diluted Adjusted Net Income per Share
$
0.08
$
0.11
Adjusted weighted-average common shares
outstanding - diluted
327,608,266
329,172,437
View source
version on businesswire.com: https://www.businesswire.com/news/home/20230502006035/en/
Investors John Rouleau ICR IR@mistercarwash.com
Media Jill Adams media@mistercarwash.com
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