Company: MCW
Filing Date: 2025-03-17
Form Type: CORRESP
Source: 0000950170-25-039812
Chunk: 1

Company: Mister Car Wash, Inc.
Filing Date: 2025-03-17
Form: CORRESP
Chunk 1
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) presents in its consolidated financial statements information prepared in accordance with U.S. GAAP relating to the Company’s net income (loss), (ii) provides detailed MD&A narrative and tabular disclosure regarding the Company’s net income (loss), in accordance with the SEC’s guidance, and (iii) presents the reconciliations of the Adjusted net income and Adjusted EBITDA to net income, the most comparable U.S. GAAP measure.

In light of the Staff’s comment, with respect to Adjusted Net Income and Adjusted earnings per diluted share we propose that in all future filings, beginning with the earnings release and Form 10-Q filing for the first quarter of fiscal 2025, the Company will discontinue including adjustments for “non-cash rent expense” from Adjusted Net Income and Adjusted earnings per diluted share and will also conform the presentation of prior comparative periods to reflect the revised presentation of Adjusted Net Income and Adjusted earnings per diluted share.

The adjustments, including the adjustment for non-cash rent expense, to arrive at Adjusted EBITDA and Adjusted EBITDA Margin, which we use as a performance measure, are made to provide additional transparency into the Company’s operating performance.

The Company has considered the guidance in Question 100.04 of the Non-GAAP Financial Measures Compliance and Disclosure Interpretations (“C&DI”), SEC Regulation S-K Item 10(e), and Regulation G, and respectfully advises the Staff that it believes that this adjustment is not inconsistent with the non-GAAP disclosure framework for the reasons discussed herein. The Company believes that the adjustment for non-cash operating lease costs in Adjusted EBITDA and Adjusted EBITDA Margin assists management, lenders, investors, and analysts in assessing the performance of the Company and is consistent with our lending agreements. The Company respectfully advises the Staff that, for the reasons described in more detail below, it believes that removing the non-cash portion of operating lease rent expense as an adjustment to Adjusted EBITDA and Adjusted EBITDA Margin is useful to investors in evaluating the Company’s performance on a period-to-period basis.

The non-cash rent expense removed from Adjusted EBITDA and Adjusted EBITDA Margin relates to operating lease agreements with initial lease terms of 15 to 20 years. These agreements contain escalation clauses that result in higher cash operating lease costs in the later periods of the term as opposed to at inception; however, the associated operating lease cost is recognized in the Company’s statements of operations based on a