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$MCW
·
10-K
Mister Car Wash, Inc. · Feb 27, 6:01 AM ET
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Mister Car Wash, Inc. 10-K
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Contents
123
Forward-Looking Statements
PART I
Express Exterior Locations
Interior Cleaning Locations
Grow Our UWC Members to Drive Predictable Earnings Growth and Higher Annual Customer Spend
Build Upon Our Success in Opening Greenfield Locations
Pursue Opportunistic Acquisitions in Highly Fragmented Industry
Drive Scale Efficiencies and Robust Free Cash Flow Generation
Our Proprietary Products and Advanced Technology
Suppliers and Distribution
Intellectual Property and Trademarks
Seasonality
Human Capital
We may be unable to sustain or increase demand for our UWC subscription program, which could adversely affect our business, financial condition and results of operations and rate of growth.
If we fail to acquire, open and operate new locations in a timely and cost-effective manner or fail to successfully enter new markets, our financial performance could be materially and adversely affected.
We may not be able to maintain and enhance our reputation and brand recognition, which are key contributors to successful implementation of our growth strategies.
If we are unable to compete successfully against other companies and operators in our industry, we may lose customers and market share and our revenues may decline.
Global economic conditions, including inflation and supply chain disruptions, and other increased operating costs could adversely affect our operations.
We are subject to a number of risks and regulations related to credit card and debit card payments we accept.
We depend on a limited number of suppliers for most of our car wash equipment and certain supplies.
Our locations may experience difficulty hiring and retaining qualified personnel, resulting in higher labor costs.
We rely on cash from our operating activities to make lease payments for the land and buildings where many of our locations are situated, which may strain our cash flow and expose us to potential liabilities and losses.
Changes in applicable tax laws could have a material and adverse effect on our business, financial condition and results of operations. Our effective tax rate could also change materially as a result of various evolving factors, including changes in income tax law or changes in the scope of our operations.
The Merger may not be completed on the timeline currently contemplated, or at all, and failure to complete the Merger may result in material adverse consequences to our business and operations and the price of our common stock.
We will be subject to various uncertainties while the Merger is pending that may cause disruption and may make it more difficult to maintain relationships with employees, customers and other third-party business partners.
While the Merger is pending and the Merger Agreement is in effect, we are subject to restrictions on our business activities.
The Merger Agreement contains provisions that could discourage a potential competing acquirer of the Company or could result in a competing acquisition proposal being at a lower price than it might otherwise be.
If the Merger Agreement is terminated, we may, under certain circumstances, be obligated to pay a termination fee to Parent. These costs could require us to use available cash that would have otherwise been available for other uses.
We have incurred, and will continue to incur, direct and indirect costs as a result of the Merger.
Litigation challenging the Merger Agreement may prevent the Merger from being consummated within the expected timeframe or at all.
If the Merger is completed, our stockholders will forgo the opportunity to benefit from potential future appreciation in the value of the Company.
Our indebtedness could adversely affect our financial health and competitive position.
The terms of our credit facilities impose certain operating and financial restrictions on us that may impair our ability to adapt to changing competitive or economic conditions.
In order to support the growth of our business, we may need to incur additional indebtedness or seek capital through new equity or debt financings, which sources of additional capital may not be available to us on acceptable terms or at all.
We are a holding company and depend on our subsidiaries for cash to fund operations and expenses.
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, could adversely affect our business.
Our locations are subject to certain environmental laws and regulations.
The historical transportation, distribution and storage of motor fuels (diesel fuel and gasoline) and other chemicals are subject to environmental protection and operational safety laws and regulations.
Evolving global climate change regulations and effects of greenhouse gas emissions may adversely affect our operations and financial performance.
Government regulations, weather conditions including drought and natural hazards may affect the availability of water supplies for use at our car wash locations.
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.
We may be subject to infringement claims.
We are a “controlled company” within the meaning of the NASDAQ rules and, as a result, will qualify for, and may rely on, exemptions from certain corporate governance requirements.
Our amended and restated certificate of incorporation could prevent us from benefiting from corporate opportunities that might otherwise have been available to us.
Sales of a substantial number of shares of our common stock in the public market by our existing stockholders could cause our stock price to fall.
Some provisions of our charter documents and Delaware law may have anti-takeover effects that could discourage an acquisition of us by others, even if an acquisition would be beneficial to our stockholders, and may prevent attempts by our stockholders to replace or remove our current management.
Our amended and restated certificate of incorporation provides that the Court of Chancery of the State of Delaware or federal district courts of the United States will be the sole and exclusive forum for certain types of lawsuits, which could limit our stockholders' abilities to obtain a favorable judicial forum for disputes with us or our directors, officers or employees.
We do not intend to pay dividends for the foreseeable future.
PART II
Greenfield Location Development
Business Acquisitions
Location Count (end of period)
Comparable Store Sales Growth
UWC Members (end of period)
UWC Sales as a Percentage of Total Wash Sales
Adjusted EBITDA and Adjusted EBITDA Margin
Net Revenues
Cost of Labor and Chemicals
Other Store Operating Expenses
General and Administrative
Loss on Sale of Assets, net
Total Other Expense, net
Income Tax Provision
Funding Requirements
Cash Flows for the Years Ended December 31, 2025 and 2024
Revenue Recognition
Long-lived assets
Goodwill
Income Taxes
Stock-Based Compensation
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
Principles of Consolidation
Use of Estimates
Cash and Cash Equivalents, and Restricted Cash
Accounts Receivable, Net
Other Receivables
Inventory, Net
Property and Equipment, Net
Other Intangible Assets, Net and Goodwill
Derivative Financial Instruments
Deferred Debt Issuance Costs
Leases
Revenue Recognition
Cost of Labor and Chemicals
Other Store Operating Expenses
Sales and Marketing
Income Taxes
Sales Taxes
Stock-Based Compensation Plans
Business Combinations
Fair Value Measurements
Earnings Per Share
Employee Retention Credit
Recently Adopted Accounting Pronouncements
Recently Issued Accounting Pronouncements Not Yet Adopted
Amended and Restated First Lien Credit Agreement
First Lien Term Loan
Revolving Commitment
Standby Letters of Credit
Credit Agreement
Forward Starting Leases
Sale-leaseback Transactions
The 2014 Plan
The 2021 Plan
The 2021 ESPP
Share-Based Payment Valuation
Stock Options
Restricted Stock Units
Stock-Based Compensation Expense
2025 Acquisitions
2024 Acquisitions
Litigation
Insurance
Environmental Matters
Merger Agreement
Commitment Letter
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
PART III
Mister Car Wash has an insider trading policy governing the purchase, sale and other dispositions of Mister Car Wash’s securities that applies to all personnel of Mister Car Wash and its subsidiaries, including directors, officers and employees and other covered persons, as well as the Company itself. Mister Car Wash believes that its insider trading policy is reasonably designed to promote compliance with insider trading laws, rules and regulations, as well as applicable listing standards. A copy of Mister Car Wash’s insider trading policy is filed as Exhibit 19.1 to this report.
The other information required by this Item is incorporated herein by reference to the applicable information in our Proxy Statement with respect to our 2026 Annual Meeting of Stockholders, to be filed with the SEC within 120 days after the end of our fiscal year covered by this Annual Report on Form 10-K.
PART IV
SIGNATURES
Contents
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