Company: MCW
Filing Date: 2025-03-17
Form Type: CORRESP
Source: 0000950170-25-039812
Chunk: 2

Company: Mister Car Wash, Inc.
Filing Date: 2025-03-17
Form: CORRESP
Chunk 2
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 straight-line calculation over the life of the agreements. Accordingly, adjustments for non-cash rent expenses associated with operating leases increase Adjusted EBITDA and Adjusted EBITDA Margin typically in the first half of these agreements is positive and in the second half of the agreement the trend reverses and will be negative adjustments as the cash operating lease cost will exceed straight-line operating lease cost. Management will present this adjustment consistently for all periods regardless of whether it is beneficial to Adjusted EBITDA and Adjusted EBITDA Margin or not, which we believe complies with C&DI Question 100.02.

<div align='center'>Mister Car Wash, Inc.222 E. 5thStreetTucson, AZ 85705

mistercarwash.com</div>

The long-term nature of the location leases creates a material item for investors to understand when relying upon the Company’s financial statements. Management has historically used Adjusted EBITDA and Adjusted EBITDA Margin, adjusted for the non-cash portion of rent expense, when assessing the Company’s performance. Therefore, if the Company does not adjust for the non-cash portion of rent expenses, investors would be using different information to evaluate the performance of the business and could be left with a suboptimal picture of the business’ ability to generate income in excess of cash operating costs. Although the straight-line recognition under ASC 842 reduces variability in the amount of operating lease costs over the term of the agreements, the Company understands that investors focus on the Company’s actual economic operating lease costs over a shorter period of time, such as one or more reporting periods as an incremental data point to the presentation required by ASC 842.

The Company believes that Adjusted EBITDA and Adjusted EBITDA Margin, which is a core measure of the Company’s ongoing operating performance, supplements the investors’ understanding of its operating performance by excluding the non-cash rent portion of operating lease cost, which is not indicative of the Company’s actual operating lease expense structure as it exists over the reporting period being evaluated by investors. The Company believes that the adjustment for non-cash rent expense in Adjusted EBITDA and Adjusted EBITDA Margin will not be used in isolation by investors, but rather, similar to the other non-cash adjustments within the reconciliation of Adjusted EBITDA will supplement the Company’s financial statement disclosures and management’s discussion and analysis of financial condition and results of operations.

Finally, the Company believes that providing this incremental disclosure will also be