Mister Car Wash IPO filing shows subscribers

That’s a lot of soap and varnish.

All manner of businesses are making their debut on various US stock exchanges, with the anticipation, perhaps, of the economic “snapback” continuing – and one that consumers will continue to spend.

In this case, they would spend to keep their new cars in good condition.

Mister Car Wash, which – as the name suggests – owns and operates car washes across the United States (more than 340 of them in 21 states), filed for release last week.

With an initial public offering (IPO) on the New York Stock Exchange that would be worth around $ 638 million, and with a valuation of over $ 5 billion.

According to the company’s S-1 filing with the Securities and Exchange Commission, the company washed 59.6 million cars in the past 12 months that ended March 31. The company also said it offers a monthly subscription program, Unlimited Wash Club (UWC), touted as “a flexible, fast and convenient option for customers to keep their cars clean.

Mister Car Wash said that at the end of the first quarter the company had 1.4 million UWC members and that subscriptions accounted for 62% of total car wash sales in the last period and 68% of total car wash volume. .

Sensory experience

“Having your car washed is fun and the sensory experience in our tunnels creates a magical moment of well-being,” according to the file. “We often call our stores the stage and our tunnels the show where all of our employees participate in our interactive and dynamic experience. “

Against this backdrop, the company benefited from model store sales growth that was consistently positive until 2020, when the pandemic hit, and that metric fell by 11%. Even counting this slide, the 11.3-year average was seven percent, and in the first quarter, membership growth was 19 percent.

The subscription model is experiencing significant growth, accounting for only 15 percent of total laundry sales in 2010 for the current majority of sales.

At a high level, the car wash industry in the United States is an $ 11 billion market – and Mister Car Wash operates in the automated slices of that market, which account for 70% of that $ 11 billion total. . The number of vehicles registered in the United States continues to grow, from about 250 million vehicles in 2010 to about 273 million in 2020, according to the filing. The company said the market is fragmented and its 344 stores represent less than 5% of locations in the United States.

In terms of technological differentiators, the company also offers auto-scanning RFID tags for UWC members, as well as proprietary cleaning and drying products, “including our Unity Chemistry System, Dynamic Dry and Wax System. HotShine patented. We believe our products and technology translate into superior cleanliness and customer satisfaction, ”the company said. “Our online tools and mobile app allow customers to quickly and easily perform” pre-purchase washes.

Growth in UWC membership, by location, has been around 24% CAGR since 2016. Net revenue for the last quarter was $ 175 million, compared to $ 155 million last year. while operating profit increased from $ 25.9 million to $ 46.9 million. million a year ago.



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