What was the net cash provided by operating activities for Precision Door Service in 2022?
Precision_Door_Service Franchise · 2025 FDDAnswer from 2025 FDD Document
istribution to parent | - | - | (324,718) | - | - | (324,718) | | Equity-based compensation | - | - | 4,194 | - | - | 4,194 | | Foreign currency translation adjustment | - | - | - | - | 8,527 | 8,527 | | Net loss | - | - | - | (439,076) | - | (439,076) | | Balance – | 100 | $ - | $ 2,100,435 | $ (489,405) | $ (42,956) $ | 1,568,074 | | December 31, 2023 | | | | | | |
Consolidated Statements of Cash Flows ($000's)
| For the years ended December 31, | 2023 | 2022 |
|---|---|---|
| Operating activities | ||
| Net loss | $ (439,076) $ | (35,746) |
| Adjustments to reconcile net loss to net cash provided by | ||
| operating activities: | ||
| Depreciation and amortization | 116,929 | 104,943 |
| Amortization of deferred financing costs | 4,164 | 1,447 |
| Loss on impairment of goodwill and tradenames | 428,286 | 51,454 |
| Bad debt expense | 2,812 | 2,398 |
| Notes received | (15,243) | (13,059) |
| Collections of notes receivable | 16,605 | 13,965 |
| Deferred income taxes | (44,346) | (44,898) |
| (Gain) loss on disposal of assets | - | (538) |
| Equity-based compensation | 4,194 | 3,414 |
| Changes in assets and liabilities, net of business acquisitions: | ||
| Trade accounts receivable | (1,403) | (11,523) |
| Inventories | 626 | (1,281 |
Source: Item 21 — Financial Statements (FDD page 91)
What This Means (2025 FDD)
According to Precision Door Service's 2025 Franchise Disclosure Document, the net cash provided by operating activities in 2022 was $85,712. This figure reflects the cash generated from the company's core business operations during that year. It's a key indicator of Precision Door Service's financial health and its ability to fund its ongoing activities.
This number is derived by adjusting the net loss of $(35,746) with several factors. These adjustments include non-cash items like depreciation and amortization ($104,943), amortization of deferred financing costs ($1,447), loss on impairment of goodwill and tradenames ($51,454), and bad debt expense ($2,398). It also accounts for changes in assets and liabilities, such as trade accounts receivable ($(11,523)), inventories ($(1,281)), prepaid selling expenses and other assets ($(3,903)), trade accounts payable ($4,116), accrued liabilities ($8,264), other non-current liabilities ($(203)), income tax receivable ($(1,530)), changes in operating lease assets and liabilities ($2,347), and deferred revenue ($6,045). These adjustments provide a more accurate picture of the actual cash flow generated by Precision Door Service's operations.
For a prospective franchisee, understanding the net cash provided by operating activities is crucial. It demonstrates the company's ability to generate cash from its day-to-day business, which can be used for investments, debt repayment, and distributions to owners. A positive and stable net cash flow from operating activities suggests a sustainable business model. However, it is important to consider this figure in conjunction with other financial metrics and industry benchmarks to assess the overall financial performance and stability of Precision Door Service.
It is also important to note that there is another table in the 2025 FDD that shows a net cash provided by operating activities of $212,253 for the year 2022. This discrepancy should be addressed with the franchisor to understand which value is accurate and why there are two different values presented in the FDD.