Company: MGRC
Filing Date: 2025-04-17
Form Type: CORRESP
Source: 0000950170-25-055353
Chunk: 3

Company: MCGRATH RENTCORP
Filing Date: 2025-04-17
Form: CORRESP
Chunk 3
---
 Accordingly, Adjusted free cash flow should not be considered as an alternative to Net income or Cash provided by operating activities. The table below provides a reconciliation between Cash provided by operating activities and Adjusted free cash flow.

Securities and Exchange Commission

April 17, 2025
Page4

In addition to increasing its rental assets, the Company has periodically made acquisitions of businesses and business assets. During the year ended December 31, 2023, the Company transacted a total of $462.1 million in acquisition-related costs. There were no acquisition-related transactions during the years ended December 31, 2024 and 2022, respectively. The Company has used cash to provide returns to its shareholders in the form of cash dividends. The Company paid cash dividends of $46.8 million, $45.6 million and $44.3 million in the years ended December 31, 2024, 2023 and 2022, respectively.”

The lead-in to the table indicates the purpose of the table is to show how the sum of operating cash flows and proceeds from sales of used rental equipment relate to purchases of rental equipment. In this regard, it is not clear why proceeds from each of sale of net discontinued operation and net merger termination are included in the table. In particular, you disclose in the paragraph preceding the lead into the table the net merger termination proceeds were primarily used to paydown outstanding borrowings and the net discontinued operation proceeds were primarily used to expand your rental asset fleet through the purchase of Vesta Modular. Please advise.

Company’s Response:

The intent of the lead-in to the table is to provide investors with the other primary sources and uses of cash in addition to cash provided by operating activities. We believe this information helps investors understand total available cash flows including investing activities, which can be used for other corporate purposes such as purchases of rental equipment, acquisitions of businesses, purchases of property, plant and equipment, payment of dividends, debt service obligations, etc. In future filings with the Commission, we advise Staff that beginning with the Company’s Form 10-K for the period ending December 31, 2025, for added clarity we will revise the table to reconcile cash provided by operating activities to “Adjusted free cash flow”. We define “Adjusted Free cash flow” as cash provided by operating activities less payments for purchases of rental equipment and property, plant and equipment and plus proceeds from sale of rental equipment and property, plant and equipment, which are included in cash flows from investing activities; excluding nonrecurring