What was the amount of purchases of property and equipment for Carls in fiscal year 2024?
Carls Franchise · 2024 FDDAnswer from 2024 FDD Document
ve Common Stock Additional Receivable Paid-In from CKE Accumulated Total Shares Amount Capital Inc. Deficit Loss Equity Balance as of January 31, 2022 100 $ $ 733,537 $(441,866) $(125,600) $ (885) $165,186 Share-based compensation. 777 (250)Other comprehensive loss (250)CKE Inc. merger with CKE Restaurants 441,866 (441,866)Holdings, Inc. Net Income 27,760 27,760 Cumulative effect of change in accounting principle (571)(571)Balance as of January 31, 2023 100 734,314 (1,135)192,902 (540,277)Share-based compensation... 2,124 2,124 Other comprehensive loss (22)(22)Net income 45,129 45,129 Balance as of January 31, 2024 100 $ 736,438 $(495,148) (1,157)$240,133
CKE RESTAURANTS HOLDINGS, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS (In thousands)
| Fiscal 2024 | Fiscal 2023 | ||
|---|---|---|---|
| Cash flows from operating activities: | |||
| Net income $ | 45,129 | $ 27,760 | |
| Adjustments to reconcile net income to net cash provided by operating activities: | |||
| Depreciation and amortization | 51,372 | 49,302 | |
| Amortization of deferred financing costs | 3,417 | 3,352 | |
| Share-based compensation | 2,124 | 777 | |
| Gain on early termination of lease agreement associated with a financing method sale-leaseback | — | (1,285) | |
| restaurant property | |||
| Gain on refranchising transaction | (153) | — | |
| (Gain) loss on disposal of other property and equipment | (602) | 512 | |
| Deferred income taxes | (3,738) | (178) | |
| Provision for losses on impairments, accounts receivable and other items, net | 508 | (9,704) | |
| Net changes in operating assets and liabilities: | |||
| Receivables, inventories, prepaid expenses and other current and non-current assets | (14,140) | 14,470 | |
| Estimated liability for closed restaurants and estimated liability for self-insurance | (1,253) | (1,709) | |
| Accounts payable and other current and long-term liabilities | 7,604 | (33,356) | |
| Operating lease asset and liabilities, net | 581 | 530 | |
| Net cash provided by operating activities | 90,849 | 50,471 | |
| Cash flows from investing activities: | |||
| Purchases of property and equipment | (35,514) | (50,837) | |
| Acquisitions of restaurants, net of cash received | (3,019) | — | |
| Proceeds from refranchising transactions | 2,092 | — | |
| Proceeds from sale of other property and equipment | 2,346 | 1,957 | |
| CKE Inc. Merger with CKE Restaurants | — | 316 | |
| Other investing activities | (7,346) | 215 | |
| Net cash used in investing activities | (41,441) | (48,349) | |
| Cash flows from financing activities: | |||
| Net change in book overdraft |
Source: Item 21 — FINANCIAL STATEMENTS (FDD pages 79–80)
What This Means (2024 FDD)
According to Carls's 2024 Franchise Disclosure Document, the purchases of property and equipment during fiscal year 2024 amounted to $35,514. This figure represents the total cash outflow for Carls related to acquiring property and equipment during this period. In the previous fiscal year 2023, Carls's purchases of property and equipment were significantly higher, totaling $50,837.
This information is found within the cash flows from investing activities section of the financial statements. Investing activities generally include the purchase and sale of long-term assets, so this provides insight into how Carls is investing in its infrastructure and long-term growth.
For a prospective franchisee, this indicates the level of investment Carls is making in its own operations. While franchisees are responsible for their own equipment and property, the franchisor's investment can reflect their overall financial strategy and commitment to maintaining and growing the brand. A decrease in this expenditure from one year to the next, as seen from 2023 to 2024, could signal a change in investment strategy or priorities for Carls.