Mister Car Wash(MCW) - 2024 Q3 - Quarterly Results

Executive Summary This section highlights Mister Car Wash's strong Q3 and nine-month 2024 financial and operational performance, including key strategic updates Third Quarter 2024 Performance Highlights Mister Car Wash reported strong Q3 2024 performance with 7% net revenue growth and 10% Adjusted EBITDA increase Third Quarter 2024 Key Financial and Operational Highlights | Metric | Q3 2024 | Q3 2023 | Change (YoY) | | :-------------------------------- | :---------- | :---------- | :----------- | | Net Revenues | $249.3 million | $234.1 million | +7% | | Comparable-Store Sales | +2.9% | - | +2.9% | | UWC Sales as % of Total Wash Sales | 74% | 71% | +3 ppts | | Net Income | $22.3 million | $19.5 million | +14.4% | | Net Income per Diluted Share | $0.07 | $0.06 | +$0.01 | | Adjusted Net Income | $28.8 million | $25.5 million | +12.9% | | Adjusted Net Income per Diluted Share | $0.09 | $0.08 | +$0.01 | | Adjusted EBITDA | $78.8 million | $71.6 million | +10% | - Unlimited Wash Club (UWC) memberships increased by approximately 39 thousand or 2% year-over-year, reaching approximately 2.1 million members as of September 30, 2024[4] - The Company opened 10 new greenfield locations in Q3 2024, bringing the total number of car wash locations to 501 as of September 30, 2024, an 8% increase from 462 locations as of September 30, 2023[2][4] Nine Month 2024 Performance Highlights For the first nine months of 2024, net revenues grew 7% and Adjusted EBITDA increased 12% Nine Month 2024 Key Financial and Operational Highlights | Metric | 9M 2024 | 9M 2023 | Change (YoY) | | :-------------------------------- | :---------- | :---------- | :----------- | | Net Revenues | $743.6 million | $696.9 million | +7% | | Comparable-Store Sales | +2.1% | - | +2.1% | | Net Income | $61.1 million | $67.8 million | -9.8% | | Net Income per Diluted Share | $0.19 | $0.21 | -$0.02 | | Adjusted Net Income | $92.2 million | $81.2 million | +13.5% | | Adjusted Net Income per Diluted Share | $0.28 | $0.25 | +$0.03 | | Adjusted EBITDA | $242.7 million | $216.4 million | +12% | - The Company opened 25 new greenfield locations during the first nine months of 2024[5] Operational & Financial Updates This section details updates on store count, balance sheet, cash flow, and sale-leaseback activities Store Count This section details changes in car wash location count, including new greenfield openings Car Wash Location Count | Metric | Three Months Ended Sep 30, 2024 | Nine Months Ended Sep 30, 2024 | Sep 30, 2023 | | :-------------------------- | :------------------------------ | :----------------------------- | :----------- | | Beginning Location Count | 491 | 476 | 449 | | Locations Acquired | - | - | 5 | | Greenfield Locations Opened | 10 | 25 | 8 | | Ending Location Count | 501 | 501 | 462 | Balance Sheet and Cash Flow This section highlights key changes in the company's balance sheet and cash flow - Cash and cash equivalents totaled $16.5 million as of September 30, 2024, down from $19.0 million as of December 31, 2023[8] - Borrowings under the Company's Revolving Commitment were $22.0 million as of September 30, 2024, compared to no borrowings as of December 31, 2023[8] - Net cash provided by operating activities increased to $198.8 million during the first nine months of 2024, up from $165.5 million in the first nine months of 2023[8] Sale-Leasebacks and Rent Expense This section outlines sale-leaseback transactions and their impact on rent expense and lease count - In the third quarter of 2024, the Company completed four sale-leaseback transactions for an aggregate consideration of $18.6 million[9] - Rent expense, net, increased 7% to $27.4 million in Q3 2024, compared to Q3 2023, with 447 car wash leases at the end of Q3 2024 versus 422 leases at the end of Q3 2023[9] Fiscal 2024 Outlook Mister Car Wash revised its fiscal 2024 guidance, raising adjusted net income and EBITDA expectations Revised Fiscal 2024 Outlook | Metric | Current Guidance | Previous Guidance | | :-------------------------------------- | :----------------------- | :----------------------- | | Net Revenues | $988 to $995 million | $988 to $1,016 million | | Comparable-Store Sales | 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 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 | $330 to $350 million | $364 to $405 million | | Sale Leasebacks | $120 to $135 million | $135 to $150 million | - Total capital expenditures for fiscal year 2024 are expected to consist of approximately $280 million to $295 million for new store growth and $50 million to $55 million for other capital expenditures (maintenance, productivity, integration)[10] Company Overview This section provides an overview of Mister Car Wash and Q3 2024 earnings conference call details About Mister Car Wash Mister Car Wash, Inc. operates over 500 locations with North America's largest subscription program - Mister Car Wash, Inc. (NYSE: MCW) operates over 500 locations and has North America's largest car wash subscription program[12] - The company is dedicated to providing a clean, shiny, and dry vehicle every time, rooted in delivering quality service, fostering friendliness, and demonstrating a genuine commitment to communities and responsible environmental practices[12] Conference Call Information Details for the Q3 2024 financial results conference call, including dial-in and webcast information - A conference call to discuss Q3 2024 financial results and a business update was scheduled for October 30, 2024, at 4:30 p.m. Eastern Time[11] - A live audio webcast and a recorded replay of the conference call are available online at https://ir.mistercarwash.com/[11](index=11&type=chunk) Financial Statements This section presents the company's consolidated statements of operations, balance sheets, and cash flows Consolidated Statements of Operations Consolidated statements show 7% net revenue growth for Q3 and 9M 2024, with increased operating income Consolidated Statements of Operations (Selected Data) | Metric (in thousands) | Three Months Ended Sep 30, 2024 | Three Months Ended Sep 30, 2023 | Nine Months Ended Sep 30, 2024 | Nine Months Ended Sep 30, 2023 | | :-------------------------------- | :------------------------------ | :------------------------------ | :----------------------------- | :----------------------------- | | Net Revenues | $249,329 | $234,076 | $743,555 | $696,930 | | Total Costs and Expenses | $199,744 | $191,021 | $596,425 | $555,661 | | Operating Income | $49,585 | $43,055 | $147,130 | $141,269 | | 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 | | Diluted Earnings per Share | $0.07 | $0.06 | $0.19 | $0.21 | Consolidated Balance Sheets As of September 30, 2024, total assets increased to $3,045.9 million, with stockholders' equity growing to $979.4 million Consolidated Balance Sheets (Selected Data) | Metric (in thousands) | Sep 30, 2024 | Dec 31, 2023 | | :----------------------------------- | :----------- | :----------- | | Cash and Cash Equivalents | $16,478 | $19,047 | | 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 | | Total Assets | $3,045,872 | $2,881,536 | | Total Current Liabilities | $193,668 | $169,561 | | Long-term Portion of Debt, Net | $931,046 | $897,424 | | Total Liabilities | $2,066,469 | $1,966,501 | | Total Stockholders' Equity | $979,403 | $915,035 | Consolidated Statements of Cash Flows Net cash from operating activities increased to $198.8 million for 9M 2024, with higher investing outflow Consolidated Statements of Cash Flows (Selected Data) | Metric (in thousands) | Nine Months Ended Sep 30, 2024 | Nine Months Ended Sep 30, 2023 | | :-------------------------------------------------------------------------------------------------------- | :----------------------------- | :----------------------------- | | Net Cash Provided by Operating Activities | $198,840 | $165,486 | | Net Cash Used in Investing Activities | ($223,465) | ($173,652) | | 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 End of Period | $16,624 | $62,240 | - Cash paid for interest increased to $60.4 million for the nine months ended September 30, 2024, from $56.2 million in the prior year period[23] - Purchases of property and equipment increased to $259.9 million in 9M 2024 from $218.7 million in 9M 2023[22] Non-GAAP Financial Measures This section defines and reconciles non-GAAP financial measures to their most directly comparable GAAP measures Explanation of Non-GAAP Measures This section defines non-GAAP measures like Adjusted EBITDA, explaining their purpose and limitations - Non-GAAP financial measures (Adjusted EBITDA, Adjusted Net Income, Adjusted Net Income per Diluted Share) are used to compare operating performance across reporting periods on a consistent basis by excluding items not indicative of ongoing performance[6][13] - 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[13] - These non-GAAP measures have limitations as analytical tools and should not be considered in isolation or as substitutes for GAAP results[13] GAAP to Non-GAAP Reconciliations Detailed reconciliations show adjustments from GAAP net income to Adjusted EBITDA and Adjusted Net Income for Q3 and 9M Reconciliation of Net Income to Adjusted EBITDA | Metric (in thousands) | Three Months Ended Sep 30, 2024 | Three Months Ended Sep 30, 2023 | Nine Months Ended Sep 30, 2024 | Nine Months Ended Sep 30, 2023 | | :----------------------------------- | :------------------------------ | :------------------------------ | :----------------------------- | :----------------------------- | | 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 | Reconciliation of Net Income to Adjusted Net Income | Metric (in thousands) | Three Months Ended Sep 30, 2024 | Three Months Ended Sep 30, 2023 | Nine Months Ended Sep 30, 2024 | Nine Months Ended Sep 30, 2023 | | :----------------------------------- | :------------------------------ | :------------------------------ | :----------------------------- | :----------------------------- | | 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 | Additional Information This section includes disclaimers regarding forward-looking statements and provides contact information Forward-Looking Statements This section contains a standard disclaimer on forward-looking statements, highlighting inherent risks - This press release includes forward-looking statements regarding expansion efforts, expected growth, and financial/operational results for fiscal 2024, which are subject to risks and uncertainties[14] - Key risks include the inability to attract/retain customers, failure to open new locations, economic downturns, inflation, increased operating costs, labor challenges, and regulatory changes[14] - The Company does not undertake any obligation to update or revise forward-looking statements, and investors are encouraged to review risk factors in SEC filings[14] Contacts Contact information for investor relations and media inquiries is provided - For investor inquiries, contact John Rouleau at ICR via IR@mistercarwash.com[15] - For media inquiries, contact media@mistercarwash.com[15]