Winmark Corporation Announces First Quarter Results

MINNEAPOLIS - April 15, 2015 - (BUSINESS WIRE) - Winmark Corporation (Nasdaq:WINA) announced today net income for the quarter ended March 28, 2015 of $6,054,300 (or $1.17 per share diluted) compared to net income of $4,551,900 (or $.86 per share diluted) in the first quarter of 2014.

John L. Morgan, Chairman and Chief Executive Officer, commented, “Both our franchising and leasing businesses exhibited solid top-line growth in the first quarter which led to a 34% increase in operating income. We are pleased with our start to the year.”

Winmark Corporation creates, supports and finances business. At March 28, 2015, there were 1,099 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 110 retail franchises have been awarded but are not open. In addition, at March 28, 2015, the Company had a lease portfolio equal to $42.9 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)

 

   
    March 28, 2015   December 27, 2014
ASSETS
Current Assets:        
Cash and cash equivalents   $ 2,160,300     $ 2,089,700  
Marketable securities     225,200       466,800  
Receivables, net     1,189,000       1,328,200  
Net investment in leases - current     19,222,500       19,831,600  
Income tax receivable     -       4,163,900  
Inventories     76,100       93,500  
Prepaid expenses     530,100       467,400  
Total current assets     23,403,200       28,441,100  
         
Net investment in leases – long-term     23,627,700       24,188,900  
Property and equipment, net     1,365,400       1,420,300  
Other assets     677,500       677,500  
    $ 49,073,800     $ 54,727,800  
         
LIABILITIES AND SHAREHOLDERS’ EQUITY
Current Liabilities:        
Line of credit   $ 5,600,000     $ 18,500,000  
Accounts payable     2,462,800       1,955,500  
Income tax payable     1,500,000       -  
Accrued liabilities     1,789,100       1,759,200  
Discounted lease rentals     186,100       227,300  
Deferred revenue     2,300,300       2,142,600  
Deferred income taxes     3,928,200       4,412,600  

Total current liabilities

    17,766,500       28,997,200  
                 
Long-Term Liabilities:        
Discounted lease rentals     -       25,800  
Deferred revenue     1,348,200       1,347,800  
Other liabilities     1,343,000       1,403,200  
Deferred income taxes     801,400       1,344,300  
Total long-term liabilities     3,492,600       4,121,100  
                 
Shareholders’ Equity:        

Common stock, no par, 10,000,000 shares authorized, 4,999,594 and 4,998,512 shares issued and outstanding

   

844,400

     

422,400

 
Accumulated other comprehensive loss     (8,300 )     (37,100 )
Retained earnings     26,978,600       21,224,200  
Total shareholders’ equity     27,814,700       21,609,500  
    $ 49,073,800     $ 54,727,800  
                 

 

     

WINMARK CORPORATION

CONDENSED STATEMENTS OF OPERATIONS

(unaudited)

     
    Three Months Ended
    March 28, 2015   March 29, 2014
REVENUE:        
Royalties   $ 9,726,200     $ 8,810,000  
Leasing income     10,009,600       4,375,600  
Merchandise sales     733,700       788,000  
Franchise fees     294,400       349,000  
Other     260,200       230,000  
Total revenue     21,024,100       14,552,600  
                 
COST OF MERCHANDISE SOLD     698,200       754,700  
                 
LEASING EXPENSE     4,257,400       306,600  
                 
PROVISION FOR CREDIT LOSSES     (69,100 )     38,900  
                 
SELLING, GENERAL AND ADMINISTRATIVE EXPENSES     6,163,500       6,017,900  
Income from operations     9,974,100       7,434,500  
                 
INTEREST EXPENSE     (85,700 )     (62,100 )
                 
INTEREST AND OTHER INCOME (EXPENSE)     (59,100 )     100  
Income before income taxes     9,829,300       7,372,500  
                 

PROVISION FOR INCOME TAXES

   

(3,775,000

)

   

(2,820,600

)

                 

NET INCOME

 

$

6,054,300

   

$

4,551,900

 
         
EARNINGS PER SHARE - BASIC   $ 1.21     $ .88  
         
EARNINGS PER SHARE - DILUTED   $ 1.17     $ .86  
         
WEIGHTED AVERAGE SHARES OUTSTANDING - BASIC     4,999,475       5,148,519  
         
WEIGHTED AVERAGE SHARES OUTSTANDING - DILUTED     5,167,466       5,307,946  

SOURCE Winmark Corporation

Contact:

Brett D. Heffes
Winmark Corporation
763-520-8500

###

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