What was the net loss for 1 800 Packouts in 2022?
1_800_Packouts Franchise · 2025 FDDAnswer from 2025 FDD Document
----|--------------------| | Cost of revenues | | 10,001,056 | 5,463,228 | | Gross profit | | 24,596,601 | 20,563,296 | | Operating expenses: | | | | | Selling, general and administrative | | 20,522,378 | 18,837,743 | | Depreciation and amortization | | 11,307,800 | 10,597,574 | | Total operating expenses | _ | 31,830,178 | 29,435,317 | | Loss from operations | | (7,233,577) | (8,872,021) | | Other income (expense): | | | | | Interest expense | | (5,506,427) | (3,821,499) | | Gain on sale of unconsolidated subsidiary | | - | 1,025,637 | | Other income (expense) | | (204,868) | (51,463) | | Total other expense, net | | (5,711,295) | (2,847,325) | | Loss before income taxes | | (12,944,872) | (11,719,346) | | Income tax benefit (provision) | | (765,698) | 1,280,676 | | Net loss | $ | (13,710,570) | $ (10,438,670) |
| For the Year | s Ende | ed December 31, | ||
|---|---|---|---|---|
| 2023 | 2022 | |||
| Cash flows from operating activities: | ||||
| Net loss | $ | (13,710,570) | $ | (10,438,670) |
| Adjustments to reconcile net loss to net cash used in | ||||
| operating activities: | 44 470 440 | 40.550.470 | ||
| Amortization of goodwill and intangible assets Depreciation of fixed assets | 11,179,113 | 10,568,470 | ||
| Amortization of deferred financing costs | 128,687 237,783 | 29,104 213,726 | ||
| Amortization of operating lease right-of-use assets | 265,177 | 108,253 | ||
| Equity-based compensation | 201,589 | 100,233 | ||
| Gain on sale of unconsolidated subsidiary | - | (1,025,637) | ||
| Loss (gain) on disposal of fixed assets | (11,390) | 43,615 | ||
| Provision for bad debt | 47,293 | 25,950 | ||
| Decrease (increase) in: | , | |||
| Accounts receivable | (1,218,971) | (777,114) | ||
| Contract assets | (1,396,460) | (2,540,535) | ||
| Other assets | (428,865) | (535,234) | ||
| Increase (decrease) in: | ||||
| Accounts payable and accrued expenses | (593,573) | 2,012,196 | ||
| Contract liabilities | 3,834,331 | 3,647,786 | ||
| Operating lease liabilities | (243,367) | (76,533) | ||
| Deferred taxes | 424,255 | (1,269,181) | ||
| Net cash used in operating activities | _ | (1,284,968) | (13,804) | |
| Cash flows from investing activities: | ||||
| Purchase of property and equipment | (441,815) | (238,771) | ||
| Proceeds from sale of property and equipment | 83,000 | - | ||
| Contingent consideration paid | - | (1,200,000) | ||
| Proceeds from sale of unconsolidated subsidiary | - | 1,623,174 | ||
| Net cash paid for acquisitions | - | (46,109,861) | ||
| Net cash used in investing activities | (358,815) | (45,925,458) | ||
| Cash flows from financing activities: | ||||
| Member contributions | - | 29,025,980 | ||
| Borrowing on long-term debt | - | 20,100,000 | ||
| Payment of debt issuance costs | - | (307,500) | ||
| Repayment of long-term debt | (481,000) | (378,894) | ||
| Member distributions | _ | (404.000) | (250,000) | |
| Net cash provided by (used in) financing activities Net change in cash and restricted cash | _ | (481,000) | 48,189,586 2,250,324 | |
| Cash and restricted cash at beginning of year | 4,303,737 | , | ||
| _ | ,,, | • | 2,053,413 | |
| Cash and restricted cash at end of year | $ | 2,178,954 | $ | 4,303,737 |
Source: Item 23 — RECEIPT (FDD pages 67–238)
What This Means (2025 FDD)
According to 1 800 Packouts's 2025 Franchise Disclosure Document, the company experienced a net loss of $10,438,670 for the year ended December 31, 2022. This figure reflects the financial performance of 1 800 Packouts during that specific period.
This net loss is a key indicator of 1 800 Packouts's financial challenges during 2022. Prospective franchisees should consider this substantial loss when evaluating the financial stability and potential risks associated with investing in a 1 800 Packouts franchise. It is essential to investigate the factors contributing to this loss and understand how the company plans to address these financial issues in the future.
Furthermore, the 2025 FDD also indicates that 1 800 Packouts had a net loss of $6,149,296 for the period from April 9, 2021 (inception) through December 31, 2021. Reviewing these figures in comparison to the 2022 loss can help potential franchisees understand the trajectory of the company's financial performance and assess whether the situation improved or worsened over time. Understanding the reasons behind these losses is crucial for making an informed investment decision.