What was the amortization of deferred financing costs for Precision Door Service in 2024?
Precision_Door_Service Franchise · 2025 FDDAnswer from 2025 FDD Document
r Note (the "Series 2022-1 Class A-1 Notes"), with a final maturity date of January 30, 2052, which is only available for limited purposes and may not be drawn by the Issuer. Interest on draws is paid weekly at a rate equal to Prime plus 300 basis points. As of December 31, 2024 and 2023, no draws had been made on the Series 2022-1 Class A-1 Notes.
In conjunction with the Second Securitization Transaction, $10,353 in transaction fees were capitalized as deferred financing costs to be amortized over the anticipated term of the notes using the straight-line method, which material approximates the effective interest rate method. For the years ended December 31, 2024 and 2023, respectively, a total of $1,494 and $1,510 of previously capitalized deferred financing costs related to the Second Securitization Transaction were amortized to interest expense on the Consolidated Statements of Operations and Comprehensive Income (Loss).
On February 3, 2023, the Company, through its indirect, wholly owned subsidiary, Neighborly Issuer LLC, issued $275,000 Series 2023-1 7.308% Fixed Rate Senior Secured Notes (the "Series 2023-1 Senior Notes") through a third whole business securitization transaction (the "Third Securitization Transaction"). The Series 2023-1 Senior Notes have an anticipated repayment date of January 30, 2028, and a final maturity date of January 30, 2053. Scheduled principal payments of $687 and interest are paid quarterly.
Source: Item 21 — Financial Statements (FDD page 91)
What This Means (2025 FDD)
According to Precision Door Service's 2025 Franchise Disclosure Document, the company amortized deferred financing costs related to several securitization transactions in 2024. Specifically, in conjunction with the Second Securitization Transaction, Precision Door Service amortized $1,494 of previously capitalized deferred financing costs to interest expense. Additionally, related to the Third Securitization Transaction, the company amortized $2,868 of previously capitalized deferred financing costs to interest expense.
In 2024, Precision Door Service also entered into a Fourth Securitization Transaction, capitalizing $3,241 in transaction fees as deferred financing costs. The amortization for this transaction was considered negligible in 2024. This means that the impact of amortizing these costs on the company's financial statements was minimal during that year.
In summary, Precision Door Service amortized deferred financing costs from multiple securitization transactions. The amounts were $1,494 related to the Second Securitization Transaction and $2,868 related to the Third Securitization Transaction. The amortization from the Fourth Securitization Transaction was negligible. A prospective franchisee should understand how these financing activities impact the overall financial health and stability of Precision Door Service.