Mister Car Wash Announces Third Quarter 2024 Financial Results

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 September 30, 2024.

"We are pleased with our strong third quarter performance and momentum in the business. Our subscription business remained incredibly resilient, our new premium Titanium offering ramped ahead of expectations, retail sales trends moved in the right direction, and we managed expenses. All of this drove strong sales and profit growth in the third quarter," commented John Lai, Chairperson and CEO of Mister Car Wash. "In the third quarter, we also opened our 500th store - marking another incredible milestone in Mister Car Wash's 28-year history. With so much growth still ahead of us, we remain committed to expanding our footprint and investing in our team members while providing top-notch car wash services to customers as we scale the nation's premier car wash brand."

Third Quarter 2024 Highlights:

• Net revenues increased 7% to $249.3 million, up from $234.1 million in the third quarter of 2023.
• Comparable-store sales increased 2.9% during the quarter.
• UWC sales represented 74% of total wash sales compared to 71% in the third quarter of 2023.
• The Company added approximately 39 thousand or 2% net new UWC members year-over-year, with approximately 2.1 million members as of September 30, 2024.
• The Company opened 10 new greenfield locations, bringing the total number of car wash locations operated to 501 as of September 30, 2024, compared to 462 car wash locations as of September 30, 2023, an increase of 8%.
• Net income and net income per diluted share were $22.3 million and $0.07, respectively.
• Adjusted net income⁽¹⁾ and adjusted net income per diluted share⁽¹⁾ were $28.8 million and $0.09, respectively.
• Adjusted EBITDA⁽¹⁾ increased 10% to $78.8 million from $71.6 million in the third quarter of 2023.

Nine Month 2024 Highlights:

• Net revenues increased 7% to $743.6 million, up from $696.9 million in 2023.
• Comparable-store sales increased 2.1%.
• The Company opened 25 new greenfield locations.
• Net income and net income per diluted share were $61.1 million and $0.19, respectively.
• Adjusted net income⁽¹⁾ and adjusted net income per diluted share⁽¹⁾ were $92.2 million and $0.28, respectively.
• Adjusted EBITDA⁽¹⁾ increased 12% to $242.7 million from $216.4 million in 2023.

⁽¹⁾ Adjusted net income, adjusted EBITDA and adjusted net income per diluted share are non-GAAP financial measures. See Use of Non-GAAP Financial Measures and GAAP to Non-GAAP Reconciliations disclosures included below in this press release.

Store Count

		Three Months Ended September 30,								Nine Months Ended September 30, 2024
		2024				2023
Beginning location count			491				449				476
Locations acquired			-				5				-
Greenfield locations opened			10				8				25
Ending location count			501				462				501

Balance Sheet and Cash Flow Highlights

• As of September 30, 2024, cash and cash equivalents totaled $16.5 million, and there were $22.0 million of borrowings under the Company's Revolving Commitment, compared to cash and cash equivalents of $19.0 million and no borrowings under the Company's Revolving Commitment as of December 31, 2023.
• Net cash provided by operating activities totaled $198.8 million during the first nine months of 2024, compared to $165.5 million in the first nine months of 2023.

Sale-Leasebacks and Rent Expense

• In the third quarter of 2024, the Company completed four sale-leaseback transactions involving four car wash locations for aggregate consideration of $18.6 million.
• With 447 car wash leases at the end of the third quarter versus 422 leases at the end of the third quarter 2023, rent expense, net increased 7% to $27.4 million, compared to the third quarter of 2023.

Fiscal 2024 Outlook

The Company revises the guidance previously provided for the full fiscal year ending December 31, 2024:

		Current		Previous
Net revenues		$988 to $995 million		$988 to $1,016 million
Comparable-store sales growth %		2.0% to 2.5%		0.5% to 2.5%
Adjusted net income		$114 to $117 million		$99 to $111 million
Adjusted EBITDA		$313 to $318 million		$291.5 to $308 million
Adjusted earnings per diluted share		$0.35 to $0.36		$0.30 to $0.34
Interest expense, net		Approx. $81 million		$81 million
Rent expense, net		Approx. $110 million		Approx. $111 million
Weighted average common shares outstanding, diluted, full year		Approx. 330 million		330 million
New greenfield locations		Approx. 40		Approx. 40
Capital expenditures(1)		$330 to $350 million		$364 to $405 million
Sale leasebacks		$120 to $135 million		$135 to $150 million

(1)

Total capital expenditures for the fiscal year ending December 31, 2024 are expected to consist of approximately $280 million to $295 million of new store growth capital expenditures and $50 million to $55 million of other capital expenditures related to store-level maintenance, productivity improvements and the integration of acquired locations.

Conference Call Details

A conference call to discuss the Company's financial results for the third quarter of fiscal 2024 and to provide a business update is scheduled for today, October 30, 2024, 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, Arizona, Mister Car Wash, Inc. (NYSE: MCW) operates over 500 locations and has North America's largest car wash subscription program. With a passionate team of professionals, advanced technology, and a commitment to exceptional customer experiences, Mister Car Wash is dedicated to providing a clean, shiny, and dry vehicle every time. The Mister brand is deeply rooted in delivering quality service, fostering friendliness, and demonstrating a genuine commitment to the communities it serves while prioritizing responsible environmental practices and resource management. 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, and adjusted net income per diluted 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 similarly titled 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 and related taxes, acquisition expenses, non-cash rent expense, loss on extinguishment of debt, 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, loss on extinguishment of debt, other nonrecurring charges, income tax impact of stock award exercises 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 and related taxes, acquisition expenses, non-cash rent expense, loss on extinguishment of debt, other nonrecurring charges, income tax impact of stock award exercises and the tax impact of adjustments to basic net income per share. Adjusted net income per diluted 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, loss on extinguishment of debt, other nonrecurring charges, income tax impact of stock award exercises 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 the 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 the Company's Non-GAAP Financial Measures. 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.

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 the Company operates, 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.

The Company is not providing a reconciliation of the fiscal 2024 outlook for adjusted EBITDA, adjusted net income, and adjusted net income per diluted 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 and Section 21E of the Securities Exchange Act of 1934, as amended. 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 2024 are forward-looking statements. 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, though not all forward-looking statements use these words or expressions. 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 those 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 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; 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, 2023, 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 the Investors Relations section of the Company's website at www.mistercarwash.com.

Any forward-looking statement that the Company makes in this press release speaks only as of the date hereof. Except as required by law, the Company does 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.

Consolidated Statements of Operations
(Amounts in thousands, except share and per share data)
(Unaudited)
	Three Months Ended September 30,								Nine Months Ended September 30,
	2024				2023				2024				2023
Net revenues	$	249,329			$	234,076			$	743,555			$	696,930
Cost of labor and chemicals		73,617				72,760				217,966				210,376
Other store operating expenses		102,607				90,514				298,953				270,317
General and administrative		25,436				26,426				80,058				78,438
(Gain) loss on sale of assets, net		(1,916	)			1,321				(552	)			(3,470	)
Total costs and expenses		199,744				191,021				596,425				555,661
Operating income		49,585				43,055				147,130				141,269
Other (income) expense:
Interest expense, net		20,653				19,100				60,931				55,143
Loss on extinguishment of debt		-				-				1,882				-
Other income		-				-				(5,189	)			-
Total other expense, net		20,653				19,100				57,624				55,143
Income before taxes		28,932				23,955				89,506				86,126
Income tax provision		6,590				4,470				28,436				18,373
Net income	$	22,342			$	19,485			$	61,070			$	67,753
Earnings per share:
Basic	$	0.07			$	0.06			$	0.19			$	0.22
Diluted	$	0.07			$	0.06			$	0.19			$	0.21
Weighted-average common shares outstanding:
Basic		321,917,525				312,883,586				319,067,596				309,850,600
Diluted		329,299,326				328,844,569				329,222,641				328,265,878

Consolidated Balance Sheets
(Amounts in thousands, except share and per share data)
(Unaudited)
	As of
(Amounts in thousands, except share and per share data)	September 30, 2024				December 31, 2023
Assets
Current assets:
Cash and cash equivalents	$	16,478			$	19,047
Accounts receivable, net		2,835				6,304
Other receivables		15,422				14,714
Inventory, net		5,491				8,952
Prepaid expenses and other current assets		12,559				11,877
Total current assets		52,785				60,894
Property and equipment, net		870,903				725,121
Operating lease right of use assets, net		857,861				833,547
Other intangible assets, net		113,139				117,667
Goodwill		1,134,734				1,134,734
Other assets		16,450				9,573
Total assets	$	3,045,872			$	2,881,536
Liabilities and stockholders' equity
Current liabilities:
Accounts payable	$	44,715			$	33,641
Accrued payroll and related expenses		30,265				19,771
Other accrued expenses		26,793				38,738
Current maturities of long-term debt		9,250				-
Current maturities of operating lease liability		47,195				43,979
Current maturities of finance lease liability		811				746
Deferred revenue		34,639				32,686
Total current liabilities		193,668				169,561
Long-term portion of debt, net		931,046				897,424
Operating lease liability		826,213				809,409
Financing lease liability		13,473				14,033
Deferred tax liability		97,499				71,657
Other long-term liabilities		4,570				4,417
Total liabilities		2,066,469				1,966,501
Stockholders' equity:
Common stock, $0.01 par value, 1,000,000,000 shares authorized, 322,239,140 and 315,192,401 shares outstanding as of September 30, 2024 and December 31, 2023, respectively		3,228				3,157
Additional paid-in capital		820,498				817,271
Retained earnings		155,677				94,607
Total stockholders' equity		979,403				915,035
Total liabilities and stockholders' equity	$	3,045,872			$	2,881,536

Consolidated Statements of Cash Flows
(Amounts in thousands)
(Unaudited)
	Nine Months Ended September 30,
	2024				2023
Cash flows from operating activities:
Net income	$	61,070			$	67,753
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization expense		61,038				51,418
Stock-based compensation expense		18,843				17,643
Gain on sale of assets, net		(552	)			(3,470	)
Loss on extinguishment of debt		1,882				-
Amortization of debt issuance costs		961				1,270
Non-cash lease expense		36,557				33,337
Deferred income tax		25,842				14,748
Changes in assets and liabilities:
Accounts receivable, net		3,469				(1,874	)
Other receivables		(7,012	)			212
Inventory, net		3,461				88
Prepaid expenses and other current assets		(605	)			(408	)
Accounts payable		11,629				3,777
Accrued expenses		11,850				8,170
Deferred revenue		1,954				3,288
Operating lease liability		(31,811	)			(29,689	)
Other noncurrent assets and liabilities		264				(777	)
Net cash provided by operating activities		198,840				165,486
Cash flows from investing activities:
Purchases of property and equipment		(259,896	)			(218,692	)
Acquisition of car wash operations, net of cash acquired		-				(51,890	)
Proceeds from sale of property and equipment		36,431				96,930
Net cash used in investing activities		(223,465	)			(173,652	)
Cash flows from financing activities:
Proceeds from issuance of common stock under employee plans		3,742				6,176
Payments of tax withholding on option exercises		(19,290	)			-
Proceeds from debt borrowings		925,000				-
Proceeds from revolving line of credit		186,000				-
Payments on debt borrowings		(903,513	)			-
Payments on revolving line of credit		(164,000	)			-
Payments of deferred financing costs		(5,257	)			-
Principal payments on finance lease obligations		(552	)			(492	)
Other financing activities		-				(500	)
Net cash provided by financing activities		22,130				5,184
Net change in cash and cash equivalents and restricted cash during period		(2,495	)			(2,982	)
Cash and cash equivalents and restricted cash at beginning of period		19,119				65,222
Cash and cash equivalents and restricted cash at end of period	$	16,624			$	62,240
Reconciliation of cash, cash equivalents, and restricted cash to the consolidated balance sheets
Cash and cash equivalents		16,478				62,133
Restricted cash, included in prepaid expenses and other current assets		146				107
Total cash, cash equivalents, and restricted cash	$	16,624			$	62,240
Supplemental disclosure of cash flow information:
Cash paid for interest	$	60,436			$	56,164
Cash paid for income taxes	$	2,267			$	2,409
Supplemental disclosure of non-cash investing and financing activities:
Property and equipment in accounts payable	$	17,352			$	15,167
Property and equipment in other accrued expenses	$	-			$	16,439
Stock option exercise proceeds in other receivables	$	1			$	17

GAAP to Non-GAAP Reconciliations
(Amounts in thousands, except share and per share data)
(Unaudited)
		Three Months Ended September 30,								Nine Months Ended September 30,
		2024				2023				2024				2023
Reconciliation of net income to adjusted EBITDA:
Net income		$	22,342			$	19,485			$	61,070			$	67,753
Interest expense, net			20,653				19,100				60,931				55,143
Income tax provision			6,590				4,470				28,436				18,373
Depreciation and amortization expense			21,182				17,599				61,038				51,418
(Gain) loss on sale of assets, net			(1,916	)			1,321				(552	)			(3,470	)
Stock-based compensation expense			6,774				6,522				20,367				17,876
Acquisition expenses			863				912				1,976				2,651
Non-cash rent expense			1,560				1,409				4,542				3,623
Loss on extinguishment of debt			-				-				1,882				-
Employee retention credit			-				-				(5,189	)			-
Other			756				780				8,167				3,067
Adjusted EBITDA		$	78,804			$	71,598			$	242,668			$	216,434

		Three Months Ended September 30,								Nine Months Ended September 30,
		2024				2023				2024				2023
Reconciliation of net income to adjusted net income:
Net income		$	22,342			$	19,485			$	61,070			$	67,753
(Gain) loss on sale of assets, net			(1,916	)			1,321				(552	)			(3,470	)
Stock-based compensation expense			6,774				6,522				20,367				17,876
Acquisition expenses			863				912				1,976				2,651
Non-cash rent expense			1,560				1,409				4,542				3,623
Loss on extinguishment of debt			-				-				1,882				-
Employee retention credit			-				-				(5,189	)			-
Other			756				780				8,167				3,067
Income tax impact of stock award exercises			4				(2,159	)			6,006				(4,332	)
Tax impact of adjustments to net income			(1,567	)			(2,736	)			(6,083	)			(5,937	)
Adjusted net income		$	28,816			$	25,534			$	92,186			$	81,231
Adjusted earnings per diluted share		$	0.09			$	0.08			$	0.28			$	0.25
Adjusted weighted-average common shares outstanding - diluted			329,299,326				328,844,569				329,222,641				328,265,878

Contacts

Investors
John Rouleau
ICR
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Media
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