What was the interest expense, net of interest income, for Benihana in 2021?
Benihana Franchise · 2024 FDDAnswer from 2024 FDD Document
spitality, | | | | | Inc. | | |
(1) These expenses are being shown as a percentage of owned restaurant net revenue.
The following table presents a reconciliation of net income (loss) to EBITDA and Adjusted EBITDA for the periods indicated (in thousands):
| For the year ended December 31, | ||||
|---|---|---|---|---|
| 2021 | 2020 | |||
| Net income (loss) attributable to The ONE Group Hospitality, Inc. | $ | 31,348 | $ | (12,825) |
| Net income (loss) attributable to noncontrolling interest | 600 | (798) | ||
| Net income (loss) | 31,948 | (13,623) | ||
| Interest expense, net of interest income | 3,780 | 5,329 | ||
| Provision (benefit) for income taxes | 1,586 | (5,400) | ||
| Depreciation and amortization | 10,790 | 10,114 | ||
| EBITDA | 48,104 | (3,580) | ||
| COVID-19 related expenses | 5,821 | 5,492 | ||
| Transaction costs (1) | 160 | 1,109 | ||
| Stock-based compensation | 3,618 | 1,773 | ||
| Lease termination expense (2) | 1,912 | 3,315 | ||
| Agreement restructuring expense | 503 | 452 | ||
| Pre-opening expenses | 1,037 | 178 | ||
| Non-cash rent (3) | (32) | 300 | ||
| Gain on CARES Act L |
Source: Item 22 — CONTRACTS (FDD pages 73–74)
What This Means (2024 FDD)
According to Benihana's 2024 Franchise Disclosure Document, the interest expense, net of interest income, for the year ended December 31, 2021, was $3.780 million. This figure represents the company's cost of borrowing, reduced by any income earned from interest-bearing assets. For comparison, the interest expense, net of interest income, in 2020 was $5.329 million, and in 2022 it was $2.113 million.
Interest expenses are a standard cost for businesses, especially those with significant debt financing. The net interest expense reflects Benihana's overall debt management and its ability to offset borrowing costs with interest income. Fluctuations in this figure from year to year can be influenced by changes in debt levels, interest rates, and the company's cash management strategies.
For a prospective Benihana franchisee, understanding the franchisor's interest expenses can provide insight into the financial health and stability of the company. High-interest expenses might indicate a heavy debt burden, which could impact the franchisor's ability to support franchisees or invest in growth initiatives. Conversely, lower interest expenses could suggest better financial management and greater financial flexibility.