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Winmark Corporation Announces Second Quarter Results

By: Winmark Corporation |  0 Shares     80 Reads

MINNEAPOLIS - July 15, 2015 - (BUSINESS WIRE) - Winmark Corporation (Nasdaq:WINA) announced today net income for the quarter ended June 27, 2015 of $4,751,400 (or $1.00 per share diluted) compared to net income of $4,280,800 (or $.82 per share diluted) in the second quarter of 2014. For the six months ended June 27, 2015, net income was $10,805,700 (or $2.18 per share diluted) compared to net income of $8,832,700 (or $1.67 per share diluted) for the same period last year.

The Company’s earnings per share growth during the second quarter was primarily driven by an increase in royalties in the franchising business and the positive impact of the previously announced self-tender offer.

Winmark Corporation creates, supports and finances business. At June 27, 2015, there were 1,116 franchises in operation under the brands Plato's Closet®, Once Upon A Child®, Play It Again Sports®, Music Go Round® and Style Encore®. An additional 108 retail franchises have been awarded but are not open. In addition, at June 27, 2015, the Company had a lease portfolio equal to $38.7 million.

This press release contains forward-looking statements within the meaning of the safe harbor provisions of Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), relating to future events or the future financial performance of the Company. Such forward-looking statements are only predictions or statements of intention subject to risks and uncertainties and actual events or results could differ materially from those anticipated. Because actual result may differ, shareholders and prospective investors are cautioned not to place undue reliance on such forward-looking statements.

WINMARK CORPORATION
CONDENSED BALANCE SHEETS
(unaudited)
			June 27, 2015					December 27, 2014
ASSETS
Current Assets:
Cash and cash equivalents			$	1,120,800				$	2,089,700
Marketable securities				215,200					466,800
Receivables, net				1,241,500					1,328,200
Net investment in leases - current				18,727,000					19,831,600
Income tax receivable				1,388,200					4,163,900
Inventories				60,800					93,500
Prepaid expenses				581,600					467,400
Total current assets				23,335,100					28,441,100
Net investment in leases – long-term				19,983,500					24,188,900
Property and equipment, net				1,293,700					1,420,300
Other assets				677,500					677,500
			$	45,289,800				$	54,727,800
LIABILITIES AND SHAREHOLDERS’ EQUITY
Current Liabilities:
Line of credit			$	-				$	18,500,000
Notes payable, net				1,988,700					-
Accounts payable				1,555,500					1,955,500
Accrued liabilities				2,459,800					1,759,200
Discounted lease rentals				131,200					227,300
Deferred revenue				2,276,600					2,142,600
Deferred income taxes				3,443,600					4,412,600
Total current liabilities				11,855,400					28,997,200
Long-Term Liabilities:
Line of credit				49,100,000					-
Notes payable, net				22,900,300					-
Discounted lease rentals				-					25,800
Deferred revenue				1,370,700					1,347,800
Other liabilities				1,286,900					1,403,200
Deferred income taxes				254,400					1,344,300
Total long-term liabilities				74,912,300					4,121,100
Shareholders’ Equity (Deficit):
Common stock, no par, 10,000,000 shares authorized, 4,128,031 and 4,998,512 shares issued and outstanding				-					422,400
Accumulated other comprehensive loss				(14,600	)				(37,100	)
Retained earnings (accumulated deficit)				(41,463,300	)				21,224,200
Total shareholders’ equity (deficit)				(41,477,900	)				21,609,500
			$	45,289,800				$	54,727,800

 

WINMARK CORPORATION
CONDENSED STATEMENTS OF OPERATIONS
(Unaudited)
			Quarter Ended										Six Months Ended
			June 27, 2015					June 28, 2014					June 27, 2015					June 28, 2014
REVENUE:
Royalties			$	10,214,400				$	9,200,800				$	19,940,600				$	18,010,800
Leasing income				3,663,300					3,157,600					13,672,900					7,533,200
Merchandise sales				686,300					685,800					1,420,000					1,473,800
Franchise fees				475,900					607,500					770,300					956,500
Other				436,800					387,200					697,000					617,200
Total revenue				15,476,700					14,038,900					36,500,800					28,591,500
COST OF MERCHANDISE SOLD				645,800					659,300					1,344,000					1,414,000
LEASING EXPENSE				510,500					119,100					4,767,900					425,700
PROVISION FOR CREDIT LOSSES				(93,100	)				(11,100	)				(162,200	)				27,800
SELLING, GENERAL AND ADMINISTRATIVE EXPENSES				6,329,300					6,179,000					12,492,800					12,196,900
Income from operations				8,084,200					7,092,600					18,058,300					14,527,100
INTEREST EXPENSE				(369,500	)				(144,100	)				(455,200	)				(206,200	)
INTEREST AND OTHER INCOME (EXPENSE)				9,700					900					(49,400	)				1,000
Income before income taxes				7,724,400					6,949,400					17,553,700					14,321,900
PROVISION FOR INCOME TAXES				(2,973,000	)				(2,668,600	)				(6,748,000	)				(5,489,200	)
NET INCOME			$	4,751,400				$	4,280,800				$	10,805,700				$	8,832,700
EARNINGS PER SHARE – BASIC			$	1.04				$	.84				$	2.26				$	1.72
EARNINGS PER SHARE – DILUTED			$	1.00				$	.82				$	2.18				$	1.67
WEIGHTED AVERAGE SHARES OUTSTANDING – BASIC				4,578,934					5,109,049					4,789,205					5,128,789
WEIGHTED AVERAGE SHARES OUTSTANDING – DILUTED				4,768,777					5,243,123					4,968,122					5,275,539

SOURCE Winmark Corporation

Contact:

Brett D. Heffes
Winmark Corporation
763-520-8500

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