What was the depreciation and amortization for Sonesta Simply Suites in 2023 (Restated)?
Sonesta_Simply_Suites Franchise · 2025 FDDAnswer from 2025 FDD Document
| (dollars in thousands) | ||||
|---|---|---|---|---|
| 2024 | 2023 (Restated) | 2022 | ||
| Cash flows from operating activities: | ||||
| Net income (loss) | $ ( 2,913) | $ 1,477 | $ ( 3,186) | |
| Adjustments to reconcile net loss to cash provided by (used in) operating activities: | ||||
| Depreciation and amortization | 489 | 1,691 | 3,506 | |
| Amortization of key money and contract costs | 1,514 | 396 | 7 | |
| Amortization of contract liabilities | 192 | 1,497 | 713 | |
| Deferred income taxes | - | 1 | 1 | |
| Provision (Recovery) of doubtful accounts | 1,112 | ( 1,819) | 654 | |
| Other income (expense), net | - | - | 846 | |
| Loss (gain) on sale of hotel | 153 | ( 160) | - | |
| Change in current assets and liabilities | ||||
| Accounts receivable, net | ( 3,111) | ( 942) | ( 50) | |
| Prepaid expenses and other current assets | ( 706) | ( 414) | (541) | |
| Other long term assets | ( 19,498) | ( 9,440) | ( 1,007) | |
| Accounts payable | ( 434) | ( 436) | (682) | |
| Loyalty program liability | 139 | - | - | |
| Accrued compensation, accrued expenses, and other liabilities | 893 | ( 2,777) | 3,600 | |
| Net cash provided by (used in) operating activities | ( 22,170) | ( 10,926) | 3,861 | |
| Cash flows from investing activities: | ||||
| Capital expenditures | ( 735) | ( 433) | (358) | |
| Proceeds from sale of hotel | - | 550 | - | |
| Merger purchase price adjustment | - | - | (264) | |
| Disbursement of notes receivable | ( 12) | - | - | |
| Collection of notes receivable | 14 | 39 | 54 | |
| Cash transfers from (to) parent for centralized cash management | - | 38,264 | (3,245) | |
| Net cash provided by (used in) investing activities | ( 733) | 38,420 | (3,813) | |
| Cash flows from financing activities: | ||||
| Cash transfers from (to) parent for centralized cash management | ( 1,534) | 8,768 | - | |
| Net cash provided by (used in) financing activities | ( 1,534) | 8,768 | - | |
| Change in cash and cash equivalents: | ||||
| Net increase (decrease) in cash and cash equivalents | (24,437) | 36,262 | 48 | |
| Cash and cash equivalents at beginning of period | 37,753 | 1,491 | 1,443 | |
| Cash and cash equivalents at end of period | $ 13,316 | $ 37,753 | $ 1,491 | |
| 2024 | 2023 | 2022 | ||
| Supplemental cash flow information: | ||||
| Cash paid for income taxes | $ 102 | $ - | $ 1 38 |
Source: Item 23 — RECEIPTS (FDD pages 80–246)
What This Means (2025 FDD)
According to Sonesta Simply Suites' 2025 Franchise Disclosure Document, the depreciation and amortization for 2023 (Restated) was $1,691,000. This figure is part of the cash flow statement and represents a non-cash expense that reduces the company's reported net income but does not involve an actual outflow of cash. Depreciation is the allocation of the cost of tangible assets over their useful lives, while amortization is the equivalent for intangible assets.
For a prospective Sonesta Simply Suites franchisee, understanding depreciation and amortization is crucial for assessing the financial health and profitability of the franchise system. While these expenses don't represent immediate cash outlays, they reflect the wearing down of assets and the consumption of intangible assets, which can impact future capital expenditure needs. A high depreciation and amortization expense might indicate significant investments in assets that will eventually need replacement or renewal.
It's also important to note that the 2023 figures are 'Restated,' suggesting that there were adjustments made to the initial financial statements. Franchisees should inquire about the reasons for these restatements to fully understand the financial performance and stability of Sonesta Simply Suites. Reviewing trends in depreciation and amortization over several years, as presented in the table, can provide a more comprehensive view of the company's asset management and investment strategies.