Company: MGRC
Filing Date: 2025-04-17
Form Type: CORRESP
Source: 0000950170-25-055353
Chunk: 1

Company: MCGRATH RENTCORP
Filing Date: 2025-04-17
Form: CORRESP
Chunk 1
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DA is defined as income from operations before interest expense, provision for income taxes, depreciation, amortization, share-based compensation and non-operating transactions

Liquidity and Capital Resources

Cash Flows from Operating Activities, page 47

Staff’s Comment

Please provide a more informative analysis and discussion of changes in reported operating cash flows, including changes in working capital components, for each period presented. In doing so, explain the underlying reasons and implications of material changes between periods to provide investors with an understanding of trends and variability in reported operating cash flows. Ensure your discussion and analysis is not merely a recitation of changes evident from the financial statements. We note in your current analysis you refer to gain on merger termination and gain on sale of discontinued operation that are noncash items that do not affect operating cash. We also note net income taxes paid materially decreased in 2024 from 2023 but this is not cited as a factor contributing to the increase in reported operating cash between these periods. Refer to Item 303(a) of Regulation S-K and the introductory paragraph of section IV.B and paragraph B.1 of Release No. 33-8350 for guidance

Company’s Response:

In future filings with the Commission, beginning with the Company’s Form 10-Q for the period ended March 31, 2025, we will enhance our discussion of changes in operating cash flows to identify material underlying operating trends or reasons causing the variability between periods. For illustration only, a more informative analysis and discussion for fiscal year 2024 would be the following:

“Cash Flows from Operating Activities:The Company’s operations provided net cash flows of $374.4 million for 2024, compared to $95.3 million in 2023. The $279.0 million increase in net cash provided by operating activities was attributable to the contractual merger termination payment from

Securities and Exchange Commission

April 17, 2025
Page3

WillScot Mobile Mini after deducting the Company’s transaction costs, which contributed $116.8 million in 2024. In addition, there was $61.6 million higher cash provided from the increase in accounts payable at December 31, 2024 compared to a large decrease in 2023, caused by the payment timing of unpaid rental equipment acquisitions and other trade accounts payable. Further, the Company’s deferred income taxes increased $55.5 million in 2024 compared to 2023, primarily due to $55.0 million higher tax payments made in 2023 due