What was the compensation expense from release of ESOP shares for Christian Brothers Automotive in 2023?
Christian_Brothers_Automotive Franchise · 2025 FDDAnswer from 2025 FDD Document
| 2023 | 2022 | |
|---|---|---|
| Cash Flows From Operating Activities | ||
| Net income | $ 32,039,351 | $ 38,146,383 |
| Adjustments to reconcile net income to net cash | ||
| from operating activities: | ||
| Depreciation and amortization expense | 2,502,750 | 1,674,739 |
| Gains on sale of leased properties | (3,613,496) | (13,994,953) |
| Gain on sale-leaseback transactions | (2,044,374) | (920,683) |
| Amortization of loan fees | 45,635 | 239,020 |
| Operating lease expense | 36,740,437 | 28,732,743 |
| Compensation expense from release of ESOP shares | 6,894,587 | 11,969,344 |
Source: Item 23 — RECEIPTS (FDD pages 76–372)
What This Means (2025 FDD)
According to the 2025 Franchise Disclosure Document, Christian Brothers Automotive had a compensation expense from the release of ESOP (Employee Stock Ownership Plan) shares amounting to $6,894,587 in 2023. This expense is a component of the overall adjustments made to reconcile net income to net cash from operating activities.
For a prospective franchisee, this figure reflects a non-cash expense that Christian Brothers Automotive incurred. It's important to understand that while this expense reduces the company's net income, it doesn't represent an actual cash outflow. Instead, it reflects the accounting treatment of allocating stock to employees through the ESOP.
Franchisees should be aware of how ESOPs can impact a company's financial statements, even though they don't directly affect the franchisee's operations. Understanding these non-cash expenses can provide a clearer picture of the company's overall financial health and how it compensates its employees. Reviewing these figures over several years, as presented in the FDD, can also reveal trends in how Christian Brothers Automotive manages its ESOP and its impact on the company's financials.