Mister Car Wash, Inc.

Good day and welcome to the Mr. Car Wash Q2 2021 earnings call. All participants will be in listen-only mode. Should you need assistance, please signal a conference specialist by pressing the star key followed by zero. After today's presentation, there will be an opportunity to ask questions. To ask a question, you may press star, then one on your touch-tone phone. To withdraw your question, please press star, then two. Please note this event is being recorded. I would now like to turn the conference over to Megan Everett, Senior Director of Communications. Please go ahead.

Good afternoon, everyone, and thank you for joining us today for Mr. Carwash's second quarter fiscal 2021 earnings call. Speaking today are Chairperson and Chief Executive Officer John Lai and Chief Financial Officer Jed Gold. After John and Jed have made their former remarks, We will open the call to questions. Before we begin, I do need to remind everyone that comments made today may include forward-looking statements which are subject to significant risks and uncertainties that could cause the company's actual results to differ materially from management's current expectations. These statements speak as of today and except as may be required by law, the company does not have any obligation to update or revise such statements if circumstances change. Please review the cautionary statements and risk factors contained in the company's registration statement on Form S-1 filed with the Securities and Exchange Commission on July 27, 2021. As such factors may be updated from time to time in its other filings with the SEC, including its quarterly report on Form 10-Q for the quarterly period ended June 30th, 2021. During the call today, management will also refer to certain non-GAAP financial measures. A reconciliation between the GAAP and non-GAAP financial measures can be found in the company's earnings press release, which was filed with the SEC today and posted to the investor relations section of Mr. Karwash's website at ir.mrcarwash.com. With that, I'll turn the call over to John. John?

Good afternoon, everyone, and thanks for joining us on our first earnings call. It's great to talk to all of you again as a new public company. It's been a little over six weeks since we rang the bell, and we're still feeling the glow and positive emotions over the significance of going public. Morale within our organization and the esprit de corps from coast to coast has never been stronger. It was an extremely validating feeling and a testament to our amazing team and all the hard work that led up to this historic event. We came into the IPO as a passionate and mission-driven bunch, but coming out of it, there's a new sense of purpose as we set out to do what no one else has done before, which is to build a true national car wash company and scale this to even greater heights. We believe a strong culture drives strong performance. and we're executing at a high level right now and clicking on all cylinders. It's taken us over 25 years to build our team, and today we have an incredibly strong weave of talented, hardworking, and passionate leaders who love what they do and are having fun building a very special company. Before I dive into the numbers, I'd like to share a quick story. During the IPO, we launched an employee stock purchase plan to give our team members an opportunity to buy stock and own a piece of the pie. I had no idea what level of participation we were going to get, but I'm thrilled to share that over 30% of our workforce participated. That's almost 2,000 people who voluntarily invested back into the company they work for. Given the size of our organization, when you have that many people that deeply believe in the company, it becomes this powerful force that gets stronger and stronger. Just the other day, I was getting my car washed, and one of our crew members, who looked like he was just out of high school, came up to me and said, Mr. Lai, thanks for setting up the ESPP program. Without the payroll deduction plan, I wouldn't have been able to participate. I hope, and it's my dream, that someday I get into the MIT program. This blew me away, and it highlighted the fact that at the end of the day, as service providers, it's all about our people. And when they feel good about the company that they work for, They perform well. For our call today, I'd like to begin by briefly recapping our second quarter results and then share some background on our growth drivers, our strategy, and how we're going to deliver long-term shareholder value. Then Jed Gold, our CFO, will discuss our financial results, including the impact COVID-19 had on our comparisons, as well as the divestiture of our Quick Loop facilities completed in December of 2020. Jed's also going to review our guidance for fiscal 2021. I'm pleased to share that our Q2 results materially exceeded expectations. For the quarter, we delivered total revenue of $197 million, an increase of plus 93% over Q2 of 2020, and adjusted EBITDA of $73 million, which were all-time records for quarterly sales and adjusted EBITDA. This performance kept off an incredibly strong first half with adjusted EBITDA of $135 million revenues were up 45 percent, same-store sales up 50 percent, and as of today, we added eight new stores through acquisitions and opened up eight new Greenfield locations so far in 2021. As Jed will discuss as we look ahead, we're well-positioned to deliver on our unit-level growth outlook for the remainder of the year. For those of you that are newer to our company, let me provide some background on our history. Since our founding 25 years ago, We've grown to become the largest national car wash brand in the U.S. with 350 geographically diversified locations, 1.5 million unique unlimited wash club members, and we wash over 70 million cars annually. Our 39 consecutive quarters of positive same-store sales growth pre-COVID is an amazing number and was driven by our awesome field management team and their relentless focus on operational excellence. Our biggest competitive advantage is our people, who deliver an elevated level of customer service day in and day out. Over 90% of our managers have been promoted from within, and we support all of our team members with competitive wages, excellent benefits, best-in-class training, and career path progression. Employee engagement has never been stronger. Our ENPS score of 55 puts us in the best-in-class category alongside some of the most legendary brands and consumer retail. As we think about our future, our focus will be on continuously adding value to the customer experience while continuing to build and acquire new stores to strengthen our portfolio. Comp store growth will be driven by increasing our limited Wash Club member base, maximizing throughput, and investing in our team. UWC has changed the game. Representing over 60% of our overall business, this predictable, recurring, subscription-based business model has transformed every aspect of our company as we've become very member-centric. As we increase store density, we expect our membership numbers to grow as the associated network of more stores equals greater optionality for our members, which increases the value proposition as our market share grows. We're calling this the network effect. and it's having a positive symbiotic relationship with our greenfield program. Our unit growth will be driven by greenfield development to infill existing markets, complemented by highly selective strategic acquisition opportunities in new markets and existing markets. Looking ahead, we see a lot of opportunity for continued growth. The U.S. car wash industry is large, highly fragmented, and very resilient. Demand for our services has never been stronger as the U.S. car park continues to expand and more new users come into the category as motorists continue to shift away from doing it yourself to having someone do it for them. In the end, cars will always get dirty. They're always going to need to be cleaned. When you have that kind of persistent demand for your service, that's a good thing. From a big picture standpoint, while we're the largest car wash operator in North America, With less than 5% market share, we actually see ourselves as quite small, with a huge runway for continued growth in front of us. With all the fundamental building blocks in place and the best team in the industry, we're in an excellent position to achieve our 2021 outlook, as well as our longer-term target to grow our top line in the high single-digit range and grow adjusted EBITDA in the low double-digit range. Now I'd like to turn it over to Jed.