Mister Car Wash announces third quarter 2023 financial results

Mister Car Wash third quarter 2023 financial results

TUCSON, Ariz. — The company announced it is on track to hit its full-year store opening target of approximately 35 new greenfields.

TUCSON, Ariz. — Mister Car Wash, Inc. announced in a recent press release its financial results for the quarter ended Sept. 30, 2023.

“We had a solid third quarter and feel good about the upward momentum in our business. Comparable store sales were positive and continued to move in the right direction, our new build openings are on schedule and performing nicely, the implementation of our Titanium and other tunnel enhancements is moving full steam ahead and we are encouraged by the early results, and our Unlimited Wash Club (UWC) program remains our most loyal and steadfast customer base,” commented John Lai, chairperson and CEO of Mister Car Wash. “We continue to manage our expenses while simultaneously investing for the future, and are on track to hit our full-year store opening target of approximately 35 new greenfields.”

Third Quarter 2023 Highlights:

  • Net revenues increased 7.6% to $234.1 million from $217.6 million in the third quarter of 2022.
  • Comparable stores sales increased 1.7%, compared to a 2.9% increase in the third quarter of 2022.
  • UWC sales represented 71.5% of total wash sales and UWC membership increased 11.3% on a year-over-year basis. The Company added six thousand net new UWC members in the third quarter and had approximately 2.1 million members as of Sept. 30, 2023.
  • The Company opened eight new greenfield locations and acquired five locations in the third quarter of 2023, bringing the total number of car wash locations operated to 462 as of Sept. 30, 2023, compared to 420 car wash locations as of Sept. 30, 2022, an increase of 10.0%.
  • Net income and net income per diluted share were $19.5 million and $0.06, respectively.
  • Adjusted net income(1) and diluted adjusted net income per share(1) were $25.5 million and $0.08, respectively.
  • Adjusted EBITDA(1) increased 8.3% to $71.6 million from $66.1 million in the third quarter of 2022.

Nine Month 2023 Highlights:

  • Net revenues increased 5.3% to $696.9 million from $662.2 million in the comparable period last year.
  • Comparable stores sales increased 0.1% compared to a 5.3% increase in the comparable period last year.
  • The Company added approximately 187 thousand UWC Members.
  • Net income and net income per diluted share were $67.8 million and $0.21, respectively.
  • Adjusted net income(1) and diluted adjusted net income per share(1) were $81.2 million and $0.25, respectively.
  • Adjusted EBITDA(1) increased approximately 0.5% to $216.4 million from $215.5 million comparable period last year.

(1) 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 Sept. 30,  Nine Months
Ended
Sept. 30,
 
  2023  2022  2023 
Beginning location count  449   409   436 
Locations acquired  5   3   6 
Greenfield locations opened  8   8   21 
Closures        1 
Ending location count  462   420   462 

Balance Sheet and Cash Flow Highlights

  • As of Sept. 30, 2023, cash and cash equivalents totaled $62.1 million, compared to cash and cash equivalents of $65.2 million as of Dec. 31, 2022. There were no borrowings under the company’s Revolving Commitment as of Sept. 30, 2023 or Dec. 31, 2022
  • Net cash provided by operating activities totaled $165.5 million during the first nine months of 2023, compared to $185.5 million during the first nine months of 2022.

Sale-Leasebacks and Rent Expense

  • In the third quarter of 2023, the company completed two separate sale-leaseback transactions involving a total of two car wash locations for aggregate consideration of $10.5 million.
  • With 422 car wash leases at the end of the third quarter versus 372 leases at the end of the third quarter last year, rent expense increased 16.4% to $27.0 million, compared to the third quarter of 2022.

Fiscal 2023 Outlook

With the exception of capital expenditures, the company is reiterating its outlook for all financial projections for the fiscal year ending Dec. 31, 2023, as outlined below:

  2023 Outlook
Net revenues $913 to $936 million
Comparable stores sales growth % -1.0% to 1.0%
Adjusted net income $94 to $103 million
Adjusted EBITDA $270 to $283 million
Diluted adjusted net income per share $0.28 to $0.32
Interest expense, net $75 million
Rent expense, net Approx. $100 million
Weighted average common shares outstanding, diluted, full year 330 million
New greenfield locations Approx. 35
Sale leasebacks $110 to $130 million

The company revises the capital expenditures guidance previously provided for fiscal year ending Dec. 31, 2023:

  Current Previous
Capital expenditures(1) $312 to $335 million $227 to $312 million
(1)Total capital expenditures for the fiscal year ending December 31, 2023 are expected to consist of approximately $252 million to $265 million of growth capital expenditures related to the opening of new stores and $60 million to $70 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 third quarter of 2023 and to provide a business update was scheduled for Nov. 2, 2023, at 4:30 p.m. Eastern Time. 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.

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