What was the noncash interest on long-term debt for Checkers for the year ended December 30, 2024?
Checkers Franchise · 2025 FDDAnswer from 2025 FDD Document
Net income | | - | | - | | 21,260 | | 21,260 | | | | Balances at December 30, 2024 | $ | - | $ | 98,449 | $ | 18,785 | $ | 117,234 | | |
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
| Successor | Predecessor | ||||||
|---|---|---|---|---|---|---|---|
| Year Ended December 30, | 2024 | Period from June 17, 2023 through | January 1, 2024 | Period from January 3, 2023 through June 16, 2023 | |||
| Operating activities: | |||||||
| Net income (loss) | $ | 21,260 | $ | (2,570) | (91,106) | ||
| Adjustments to reconcile net loss to net cash provided by (used in) operating activities: | |||||||
| Depreciation and amortization | 9,312 | 4,638 | 8,552 | 892 | |||
| Amortization of deferred financing costs | 294 | 54 | |||||
| Provision for credit losses | 582 | 122 | 94 | ||||
| Deferred income tax expense (benefit) | (25,962) | 4 | (7,529) | ||||
| Noncash operating lease expense, net | 14,873 | 5,490 | 6,878 | ||||
| Right-of-use asset amortization for finance lease | 2,699 | 455 | 262 | ||||
| Change in favorable leasehold interests | 427 | 232 | 146 | ||||
| Change in unfavorable leasehold interests | 56 | (31) | 5,720 | (29) | |||
| Noncash stock based compensation | 498 | 132 | |||||
| Noncash interest on long-term debt | 5,201 | 2,534 | 13,808 | ||||
| Impairment of long-lived assets | 2,384 | 623 | 66,633 | ||||
| Net loss on disposal of fixed assets | 64 | 670 | 839 | ||||
| Changes in operating assets and liabilities: | |||||||
| Decrease (increase) in accounts receivable, net | (264) | (1,693) | 221 | ||||
| Decrease (increase) in inventory | (250) | 927 | 1,137 | (564) | |||
| Decrease (increase) in prepaid expenses | (30) | (1,618) | |||||
| Decrease (increase) in other current assets | 1,881 | (1,241) | 105 | ||||
| Decrease in other noncurrent assets | 1,150 | 231 | 602 | ||||
| (Decrease) increase in accounts payable | 582 | (16) | (247) | ||||
| (Decrease) increase in accrued liabilities, accrued wages and benefits, deferred |
Source: Item 21 — FINANCIAL STATEMENTS (FDD page 91)
What This Means (2025 FDD)
According to Checkers's 2025 Franchise Disclosure Document, the noncash interest on long-term debt for the year ended December 30, 2024, was $5,201. This figure is part of the adjustments made to reconcile net income (loss) to net cash provided by (used in) operating activities.
Noncash interest represents an expense that affects the company's net income but does not involve an actual cash outflow during the period. This can arise from various accounting treatments, such as the amortization of debt discounts or premiums. For a prospective Checkers franchisee, understanding this noncash component is crucial because it impacts the overall financial health and profitability of the company as reflected in the financial statements.
Franchisees should be aware that while noncash expenses do not directly affect the company's cash position, they do influence reported earnings and can affect financial ratios used by investors and lenders. Monitoring these noncash adjustments provides a more comprehensive view of Checkers's financial performance and its ability to manage its debt obligations. It's a common practice to include such noncash items in financial statements to provide a more accurate picture of a company's financial activities.