TUCSON, AZ – Mister Car Wash , Inc. (NYSE:MCW), a $2.6 billion market cap company with annual revenue of $973.7 million, has successfully amended its credit agreement to secure more favorable terms for its existing loans, according to a recent 8-K filing with the Securities and Exchange Commission.
According to InvestingPro data, the company operates with a significant debt burden, making this refinancing particularly significant for its financial health. The amendment, effective November 26, 2024, includes a reduction in margins and a reset of soft call protection for the company's term loans.
The Tucson-based automotive service provider entered into Amendment No. 6 to its Amended and Restated First Lien Credit Agreement, which was originally dated May 14, 2019. The agreement involves Bank of America (NYSE:BAC), N.A. as the administrative agent, along with other lenders, and has resulted in the repricing of Mister Car Wash's term loans with an aggregate principal amount of $923 million.
According to the amendment, the margin for the 2024-2 Repriced Term Loans has been reduced from 3.00% to 2.75%. This margin may further decrease based on the company's First Lien Net Leverage Ratio. Similarly, for Base Rate Loans, the margin has been reduced from 2.00% to 1.75%, with potential decreases to 1.50% and 1.25%.
The revised terms also apply to the company's Revolving Loans, which saw a margin reduction to 2.75% from 3.00%. Depending on the leverage ratio, these margins could decrease to as low as 2.00% for SOFR Loans and 1.00% for Base Rate Loans.
This strategic financial move also resets the soft call protection for voluntary prepayments of 2024-2 Refinancing Term Loans to six months from the amendment's effective date. The reset soft call protection means that the company will be subject to a 1% premium if it chooses to repay the loans within the specified period. With a current ratio of 0.27 and total debt of $1.83 billion, InvestingPro analysis indicates the company's short-term obligations exceed its liquid assets.
Apart from the changes outlined, the terms of the 2024-2 Repriced Term Loans and Revolving Loans, as well as the obligations of the parties under the existing credit agreement, remain unchanged. The full text of the amendment is attached as Exhibit 10.1 to the SEC filing.
Mister Car Wash, recognized for its automotive repair and service offerings, operates under the legal jurisdiction of Delaware and has its principal executive offices located in Tucson, Arizona.
This financial maneuvering reflects the company's efforts to optimize its debt structure and reduce its interest expenses. While the company has shown strong performance with a 14.81% return over the past six months, InvestingPro analysis suggests the stock is currently trading above its Fair Value.
Investors seeking deeper insights can access the comprehensive Pro Research Report, available for MCW and 1,400+ other US stocks, offering detailed analysis of the company's financial health, valuation metrics, and growth prospects.
In other recent news, Mister Car Wash reported a steady rise in its third-quarter results, with a 7% increase in sales to $249 million and a 2.9% rise in comparable store sales. The company's adjusted EBITDA grew by 10%, reaching $79 million. These developments are part of the company's continued growth trajectory and optimistic outlook.
The successful Titanium membership and robust subscription model, which accounts for 74% of wash sales, were highlighted in the earnings call. Despite recent hurricanes impacting business, the company revised its full-year guidance upward, indicating confidence in its market position.
Plans are underway to open approximately 40 new stores in the coming year, even with a reduction in capital expenditures. Analysts from the firm anticipate full-year net revenue to be between $988 million and $995 million, with an adjusted net income expected to be between $114 million and $117 million. These recent developments suggest a positive business momentum for Mister Car Wash.
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