What was the depreciation and amortization expense for Annex Brands in 2024?
Annex_Brands Franchise · 2025 FDDAnswer from 2025 FDD Document
| 2024 | 2023 | 2022 | ||
|---|---|---|---|---|
| Cash flows from operating activities: | ||||
| Net income | $ 7,357,000 | $ | 7,626,000 | $ 7,476,000 |
| Adjustments to reconcile net income to cash | ||||
| provided by operating activities: | ||||
| Depreciation and amortization | 691,000 | 718,000 | 1,134,000 | |
| Amortization of right-of-use-assets | 88,000 | - | ||
| Gain on sale of corporate location | - | - | (218,000) | |
| Loss on disposal of long-lived assets | 5,000 | - | 3,000 | |
| Provision for bad debts | - | 120,000 | 120,000 | |
| Changes in operating assets and liabilities: | ||||
| Accounts receivable | 265,000 | (805,000) | 48,000 | |
| Inventory | 2,000 | |||
| Prepaid expenses and other current assets | (516,000) | (66,000) | 112,000 | |
| Deposits and other noncurrent assets | 152,000 | 14,000 | (288,000) | |
| Accounts payable and accrued expenses | (529,000) | (26,000) | 92,000 | |
| Deferred franchise revenue | 41,000 | 134,000 | 30,000 | |
| Operating lease liabilities | (82,000) | - | - | |
| Net cash provided by operating activities | 7,472,000 | _ | 7,715,000 | 8,511,000 |
| Cash flows from investing activities: | ||||
| Purchase of equipment | (835,000) | (689,000) | (408,000) | |
| Issuance of notes receivable | (242,000) | (14,000) | (43,000) | |
| Receipt of payments on notes receivable | 126,000 | _ | 98,000 | 96,000 |
| Net cash used in investing activities | (951,000) | _ | (605,000) | (355,000) |
| Cook flows from financing activities. | ||||
| Cash flows from financing activities: Distributions to shareholders | (6,294,000) | (6,347,000) | (7,085,000) | |
| Proceeds from exercise of stock options | (0,294,000) | (0,347,000) | 93,000 | |
| Stock repurchase | _ | _ | (1,325,000) | - |
| Net cash used in financing activities | (6,294,000) | _ | (7,672,000) | (6,992,000) |
| Net increase (decrease) in cash | 227,000 | (562,000) | 1,164,000 | |
| Cash and cash equivalents at beginning of year | 11,992,000 | _ | 12,554,000 | 11,390,000 |
| Cash and cash equivalents at end of year | $ 12,219,000 | $ | 11,992,000 | $ 12,554,000 |
| Supplemental disclosure of cash flow information: | $ 111,000 | $ | 226,000 | $ 205,000 |
| Cash paid during the year for income taxes |
Source: Item 21 — Financial Statements (FDD page 109)
What This Means (2025 FDD)
According to Annex Brands's 2025 Franchise Disclosure Document, the total depreciation and amortization expense for the company in 2024 was $691,000. This figure is part of the adjustments made to reconcile net income to net cash provided by operating activities. Depreciation and amortization are non-cash expenses that reflect the reduction in value of Annex Brands's assets over time.
Depreciation specifically relates to the tangible assets like equipment, software, furniture, fixtures, and leasehold improvements. The FDD states that during 2024, the company incurred depreciation expense of $636,000. Amortization, on the other hand, pertains to intangible assets such as franchise rights, non-compete agreements, trademarks, and other intangibles.
The amortization expense of intangible assets for the year ended September 30, 2024, was $55,000. These expenses are important for understanding the true cash flow of Annex Brands, as they reduce net income without affecting the company's cash position. Reviewing these figures over the three-year period can reveal trends in Annex Brands's capital investments and asset management strategies.