Does the provided text specify any financial thresholds for Checkersrallys?
Checkersrallys Franchise · 2025 FDDAnswer from 2025 FDD Document
tment | | - | | - | | 181 | | 181 | | | 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 | |||
| Amortization of deferred financing costs | 294 | 54 | 892 | |||
| 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) | (29) | |||
| Noncash stock based compensation | 498 | 132 | 5,720 | |||
| 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 | (564) | |||
| Decrease (increase) in prepaid expenses | (30) | (1,618) | 1,137 | |||
| 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 | ||||||
| revenue, self-insurance, and long-term liabilities | (680) | (7,774) | 9,416 | |||
| Change in operating lease liabilities | (17,434) | (8,154) | (8,250) | |||
| Other changes, net | (793) | (237) | (584) | |||
| Net cash provided by (used in) operating activities | 15,850 | (7,222) | 6,996 | |||
| Investing activities: | ||||||
| Capital expenditures | (10,024) | (7,269) | (5,513) | |||
| Net cash used in investing activities | (10,024) | (7,269) | (5,513) | |||
| Financing activities: | ||||||
| Payment for debt issuance costs | - | (500) | - | |||
| Principal payments on long-term debt | (812) | (1,304) | (1,360) | |||
| Principal payments on financing obligations | (73) | (47) | (400) | |||
| Repayments on finance lease liabilities | (1,885) | (254) | (159) | |||
| Proceeds from short-term financing | 1,464 | 1,540 | - | |||
| Payment on short-term financing | (1,515) | - | - | |||
| Proceeds from the issuance of long-term financing | - | 10,000 | - | |||
| Net cash (used in) provided by financing activities | (2,821) | 9,435 | (1,919) | |||
| NET INCREASE (DECREASE) IN CASH, CASH EQUIVALENTS | 3,005 | (5,056) | (436) | |||
| Cash, cash equivalents, and restricted cash at beginning of period | 12,557 | 17,613 | 18,049 | |||
| Cash, cash equivalents, and restricted cash at end of period | $ | 15,562 | $ | 12,557 | $ | 17,613 |
| Supplemental disclosure of cash flow information: | ||||||
| Cash paid for interest | $ | 7,859 | $ | 4,619 | $ | 458 |
| Income taxes paid, net of refunds | 558 | 18 | 43 | |||
| Non-cash activities: | ||||||
| Non-cash right-of-use assets obtained in exchange for operating leases | $ | 664 | $ | 1,006 | $ | 1,058 |
| Non-cash right-of-use assets obtained in exchange for finance |
Source: Item 21 — FINANCIAL STATEMENTS (FDD page 91)
What This Means (2025 FDD)
According to Checkersrallys's 2025 Franchise Disclosure Document, the consolidated statements of cash flows provide insight into the company's financial activities. For the year ended December 30, 2024 (Successor), Checkersrallys reported a net income of $21,260 (in thousands). However, for the period from June 17, 2023, through January 1, 2024, the company experienced a net loss of $2,570 (in thousands). The period from January 3, 2023, through June 16, 2023 (Predecessor) saw a more significant net loss of $91,106 (in thousands). These figures reflect the overall profitability of Checkersrallys during these specific periods. Prospective franchisees should note these fluctuations when considering the financial health of the company.
Furthermore, the cash flow statement details various adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities. These adjustments include depreciation and amortization, amortization of deferred financing costs, provision for credit losses, deferred income tax expense (benefit), noncash operating lease expense, net, right-of-use asset amortization for finance lease, changes in leasehold interests, noncash stock-based compensation, noncash interest on long-term debt, impairment of long-lived assets, and net loss on disposal of fixed assets. These adjustments provide a more comprehensive view of the actual cash generated or used by Checkersrallys's operations, which is crucial for assessing the company's liquidity and ability to meet its financial obligations.
Additionally, the statement outlines cash flows from investing and financing activities. Capital expenditures for the year ended December 30, 2024, amounted to $10,024 (in thousands). Financing activities include principal payments on long-term debt, financing obligations, repayments on finance lease liabilities, proceeds from short-term financing, and payments on short-term financing. These activities impact Checkersrallys's overall cash position, with the net increase (decrease) in cash, cash equivalents, and restricted cash showing a $3,005 (in thousands) increase for the year ended December 30, 2024. Understanding these cash flow dynamics is essential for franchisees to evaluate the financial stability and growth potential of Checkersrallys.