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Winmark Corporation Announces Third Quarter Results

By: Winmark Corporation |  0 Shares     111 Reads

MINNEAPOLIS - October 14, 2015 - (BUSINESS WIRE) - Winmark Corporation (Nasdaq: WINA) announced today net income for the quarter ended September 26, 2015 of $5,339,600 (or $1.23 per share diluted) compared to net income of $5,623,000 (or $1.09 per share diluted) in the third quarter of 2014. For the nine months ended September 26, 2015, net income was $16,145,300 (or $3.39 per share diluted) compared to net income of $14,455,700 (or $2.76 per share diluted) for the same period last year.

The Company experienced modest royalty growth in the franchising business, while profits in the leasing business were lower when compared to last year due to the timing of customer activity in the portfolio. Earnings per share growth during the quarter was positively impacted by the previously reported self-tender offer.

Winmark Corporation creates, supports and finances business. At September 26, 2015, there were 1,133 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 104 retail franchises have been awarded but are not open. In addition, at September 26, 2015, the Company had a lease portfolio of $40.3 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 26, 2015					December 27, 2014
ASSETS
Current Assets:
Cash and cash equivalents			$	1,060,700				$	2,089,700
Marketable securities				226,500					466,800
Receivables, net				1,314,200					1,328,200
Net investment in leases - current				18,260,700					19,831,600
Income tax receivable				855,000					4,163,900
Inventories				59,600					93,500
Prepaid expenses				757,500					467,400
Total current assets				22,534,200					28,441,100
Net investment in leases – long-term				21,994,700					24,188,900
Property and equipment, net				1,218,800					1,420,300
Other assets				607,500					677,500
Deferred income taxes				419,400					-
			$	46,774,600				$	54,727,800
LIABILITIES AND SHAREHOLDERS’ EQUITY (DEFICIT)
Current Liabilities:
Line of credit			$	-				$	18,500,000
Notes payable, net				1,988,700					-
Accounts payable				1,208,400					1,955,500
Accrued liabilities				3,139,800					1,759,200
Discounted lease rentals				75,800					227,300
Deferred revenue				2,139,200					2,142,600
Deferred income taxes				2,846,400					4,412,600
Total current liabilities				11,398,300					28,997,200
Long-Term Liabilities:
Line of credit				46,200,000					-
Notes payable, net				22,403,200					-
Discounted lease rentals				-					25,800
Deferred revenue				1,536,100					1,347,800
Other liabilities				1,248,800					1,403,200
Deferred income taxes				-					1,344,300
Total long-term liabilities				71,388,100					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				434,700					422,400
Accumulated other comprehensive loss				(33,700	)				(37,100	)
Retained earnings (accumulated deficit)				(36,412,800	)				21,224,200
Total shareholders’ equity (deficit)				(36,011,800	)				21,609,500
			$	46,774,600				$	54,727,800

 

WINMARK CORPORATION
CONDENSED STATEMENTS OF OPERATIONS
(Unaudited)
			Quarter Ended										Nine Months Ended
			September 26, 2015					September 27, 2014					September 26, 2015					September 27, 2014
REVENUE:
Royalties			$	11,286,100				$	10,725,000				$	31,226,700				$	28,735,800
Leasing income				3,247,000					4,121,800					16,919,900					11,655,000
Merchandise sales				762,300					786,100					2,182,300					2,259,900
Franchise fees				483,200					558,200					1,253,500					1,514,700
Other				220,900					213,300					917,900					830,500
Total revenue				15,999,500					16,404,400					52,500,300					44,995,900
COST OF MERCHANDISE SOLD				711,600					742,300					2,055,600					2,156,300
LEASING EXPENSE				173,400					808,500					4,941,300					1,234,200
PROVISION FOR CREDIT LOSSES				38,800					(1,700	)				(123,400	)				26,100
SELLING, GENERAL AND ADMINISTRATIVE EXPENSES				5,733,900					5,677,600					18,226,700					17,874,500
Income from operations				9,341,800					9,177,700					27,400,100					23,704,800
INTEREST EXPENSE				(687,700	)				(150,500	)				(1,142,900	)				(356,700	)
INTEREST AND OTHER INCOME/(EXPENSE)				(12,400	)				27,200					(61,800	)				28,200
Income before income taxes				8,641,700					9,054,400					26,195,400					23,376,300
PROVISION FOR INCOME TAXES				(3,302,100	)				(3,431,400	)				(10,050,100	)				(8,920,600	)
NET INCOME			$	5,339,600				$	5,623,000				$	16,145,300				$	14,455,700
EARNINGS PER SHARE – BASIC			$	1.29				$	1.12				$	3.53				$	2.84
EARNINGS PER SHARE – DILUTED			$	1.23				$	1.09				$	3.39				$	2.76
WEIGHTED AVERAGE SHARES OUTSTANDING – BASIC				4,128,031					5,022,166					4,568,813					5,093,243
WEIGHTED AVERAGE SHARES OUTSTANDING – DILUTED				4,338,230					5,156,785					4,758,158					5,235,949

 SOURCE Winmark Corporation

Contact:

Brett D. Heffes
Winmark Corporation
763-520-8500

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