Winmark Corporation Announces Third Quarter Results

MINNEAPOLIS--(BUSINESS WIRE)--Winmark Corporation (Nasdaq: WINA) announced today net income for the quarter ended September 24, 2011 of $3,483,500, or $.66 per share diluted, compared to net income of $2,690,000, or $.51 per share diluted, in 2010. For the nine months ended September 24, 2011, net income was $9,910,000, or $1.89 per share diluted, compared to net income of $7,209,800, or $1.39 per share diluted, for the same period last year.

John L. Morgan, Chairman and Chief Executive Officer, stated, "During the quarter, our earnings growth was primarily driven by the continued strong performance of our franchising brands. Additionally, our leasing business continued to show significant increases in both profitability and customer activity. During the quarter, our pre-tax income was reduced by approximately $0.5 million, or $0.10 per share, due to our share of losses from Tomsten, Inc. as well as an impairment charge relating to our investment in BridgeFunds, LLC."

Winmark Corporation creates, supports and finances business. At September 24, 2011, there were 923 franchises in operation under the brands Play It Again Sports®, Plato's Closet®, Once Upon A Child®, and Music Go Round®. An additional 39 retail franchises have been awarded but are not open. In addition, at September 24, 2011, the Company had loans and leases equal to $31.8 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 including statements with respect to our ability to finance the growth of our leasing and franchising businesses for the foreseeable future. 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)

         
    September 24, 2011   December 25, 2010
ASSETS
Current Assets:        
Cash and cash equivalents   $ 3,896,500     $ 2,257,100
Marketable securities     331,000       161,000
Receivables, net     1,330,300       1,841,300
Net investment in leases - current     13,010,300       13,856,700
Income tax receivable     -       294,700
Inventories     68,000       85,900
Prepaid expenses     508,900       382,600
Total current assets     19,145,000       18,879,300
               
Net investment in leases - long-term     17,168,800       16,802,500
Long-term investments, net     4,225,600       3,973,800
Property and equipment, net     1,562,500       1,785,900
Other assets     677,500       680,500
    $ 42,779,400     $ 42,122,000
 
LIABILITIES AND SHAREHOLDERS' EQUITY
Current Liabilities:        
Line of credit   $ -     $ 8,800,000
Accounts payable     1,689,200       1,274,200
Income tax payable     2,263,300       -
Accrued liabilities     1,992,400       1,513,600
Discounted lease rentals     74,900       530,400
Rents received in advance     263,800       291,800
Deferred revenue     1,149,000       1,041,700
Deferred income taxes     1,832,500       1,832,500
Total current liabilities     9,265,100       15,284,200
               
Long-Term Liabilities:        
Discounted lease rentals     2,400       26,500
Rents received in advance     421,400       696,900
Deferred revenue     830,500       767,600
Other liabilities     1,250,700       1,678,000
Deferred income taxes     655,800       655,800
Total long-term liabilities     3,160,800       3,824,800
               
Shareholders' Equity:        

Common stock, no par, 10,000,000 shares authorized,
4,972,081 and 5,020,739 shares issued and outstanding

   

-

     

513,700

Accumulated other comprehensive loss     (72,600 )     -
Retained earnings     30,426,100       22,499,300
Total shareholders' equity     30,353,500       23,013,000
    $ 42,779,400     $ 42,122,000
               

WINMARK CORPORATION

CONDENSED STATEMENTS OF OPERATIONS

(Unaudited)

         
    Quarter Ended   Nine Months Ended
    September 24, 2011   September 25, 2010   September 24, 2011   September 25, 2010
REVENUE:                
Royalties   $ 8,046,400     $ 7,030,000     $ 21,918,500     $ 19,761,800  
Leasing income     2,369,300       2,419,600       12,584,500       7,290,300  
Merchandise sales     664,300       964,000       1,998,700       2,009,200  
Franchise fees     516,200       357,100       836,200       885,600  
Other     177,300       236,600       765,300       782,300  
Total revenue     11,773,500       11,007,300       38,103,200       30,729,200  
                                 
COST OF MERCHANDISE SOLD     631,400       920,600       1,908,500       1,911,800  
                                 
LEASING EXPENSE     290,400       387,600       4,149,300       1,374,200  
                                 
PROVISION FOR CREDIT LOSSES     (13,100 )     130,500       8,200       142,400  
                                 
SELLING, GENERAL AND ADMINISTRATIVE EXPENSES     4,219,100       4,360,200       14,095,400       14,093,300  
                                 
Income from operations     6,645,700       5,208,400       17,941,800       13,207,500  
                                 
LOSS FROM EQUITY INVESTMENTS     (224,700 )     (200,200 )     (444,600 )     (322,400 )
                                 
IMPAIRMENT OF INVESTMENT IN NOTES     (293,200 )     -       (546,100 )     -  
                                 
INTEREST EXPENSE     (26,200 )     (363,900 )     (84,200 )     (925,200 )
                                 
INTEREST AND OTHER INCOME/(EXPENSE)     (9,000 )     96,100       22,100       376,800  
                                 
Income before income taxes     6,092,600       4,740,400       16,889,000       12,336,700  
                                 
PROVISION FOR INCOME TAXES     (2,609,100 )     (2,050,400 )     (6,979,000 )     (5,126,900 )
                                 
NET INCOME   $ 3,483,500     $ 2,690,000     $ 9,910,000     $ 7,209,800  
                                 
EARNINGS PER SHARE - BASIC   $ .70     $ .54     $ 1.99     $ 1.43  
                                 
EARNINGS PER SHARE - DILUTED   $ .66     $ .51     $ 1.89     $ 1.39  
                                 
WEIGHTED AVERAGE SHARES OUTSTANDING - BASIC     4,970,046       5,011,862       4,980,160       5,055,405  
                                 
WEIGHTED AVERAGE SHARES OUTSTANDING - DILUTED     5,263,343       5,224,580       5,239,424       5,203,628  

###

Share this Story:

Comments:

comments powered by Disqus

Franchise News Room »


News By Industry »


Featured Opportunities

MassageLuXe
MassageLuXe® is a fast-growing massage franchise providing massage services to clients, primarily through multi-unit area developers & single...
e² Young Engineers
e² Young Engineers is an innovative new approach to teach STEM principles using our uniquely designed LEGO and K'nex kits.
Denny's
Denny's is America's largest full-service family restaurant chain, consisting of 168 company-owned units and 1,692 franchised units, with operations...
Jimmy's Egg
Jimmy's Egg is now offering a unique opportunity to a select number of franchisees seeking to develop our proven brand in new markets.
Big O Tires, LLC
With more than 50 years in the tire and automotive maintenance industry, Big O Tires® is proud to be a world-class leader.

Subscribe to Franchising.com Express

A Franchise Update Media Production
Franchise Update Media | P.O. Box 20547 // San Jose, CA 95160 // PH. (408) 402-5681
Copyright © 2001 - 2017. All Rights Reserved.

In Loving Memory Of Timothy Gardner (1987-2014)