Winmark Corporation Announces First Quarter Results
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Winmark Corporation Announces First Quarter Results

MINNEAPOLIS - April 17, 2019 - (BUSINESS WIRE) - Winmark Corporation (Nasdaq: WINA) announced today net income for the quarter ended March 30, 2019 of $7,272,200 (or $1.73 per share diluted) compared to net income of $6,960,400 (or $1.69 per share diluted) in 2018.

Brett D. Heffes, Chief Executive Officer, commented, “Our first quarter results were positively impacted by the performance of our franchisees, offset by lower activity in our leasing business.”

Winmark Corporation creates, supports and finances business. At March 30, 2019, there were 1,241 franchises in operation under the brands Plato’s Closet®, Once Upon A Child®, Play It Again Sports®, Style Encore® and Music Go Round®. An additional 46 retail franchises have been awarded but are not open. In addition, at March 30, 2019, the Company had a lease portfolio of $35.1 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 30, 2019   December 29, 2018
ASSETS
Current Assets:            
Cash and cash equivalents   $ 1,066,800     $ 2,496,000  
Restricted cash     65,000       80,000  
Receivables, net     1,455,500       1,553,100  
Net investment in leases - current     17,321,500       18,547,500  
Income tax receivable           565,500  
Inventories     113,800       107,600  
Prepaid expenses     954,100       901,600  
Total current assets     20,976,700       24,251,300  
             
Net investment in leases – long-term     17,786,000       20,455,500  
Property and equipment, net     908,800       866,200  
Operating lease right of use asset     6,056,100        
Goodwill     607,500       607,500  
Other assets     496,700       482,600  
    $ 46,831,800     $ 46,663,100  
             
LIABILITIES AND SHAREHOLDERS’ EQUITY (DEFICIT)
Current Liabilities:            
Notes payable, net   $ 3,236,100     $ 3,236,100  
Accounts payable     1,717,800       1,351,800  
Income tax payable     1,664,700        
Accrued liabilities     2,669,100       3,128,600  
Discounted lease rentals     3,070,700       3,021,900  
Deferred revenue     1,750,700       1,744,900  
Total current liabilities     14,109,100       12,483,300  
Long-Term Liabilities:            
Line of credit     11,500,000        
Notes payable, net     24,795,900       25,604,900  
Discounted lease rentals     1,937,300       2,723,500  
Deferred revenue     8,247,900       8,432,400  
Operating lease liabilities     5,823,000        
Other liabilities     764,800       1,079,200  
Deferred income taxes     1,148,900       1,148,300  
Total long-term liabilities     54,217,800       38,988,300  
Shareholders’ Equity (Deficit):            

Common stock, no par, 10,000,000 shares authorized, 3,759,186 and 3,907,686 shares issued and outstanding

          4,425,600  
Retained earnings (accumulated deficit)     (21,495,100 )     (9,234,100 )
Total shareholders’ equity (deficit)     (21,495,100 )     (4,808,500 )
    $ 46,831,800     $ 46,663,100  
             

 

 
WINMARK CORPORATION
CONDENSED STATEMENTS OF OPERATIONS
(Unaudited)
             
    Three Months Ended
    March 30, 2019   March 31, 2018
REVENUE:            
Royalties   $ 11,761,400     $ 11,049,000  
Leasing income     5,155,300       5,528,800  
Merchandise sales     611,000       776,900  
Franchise fees     391,800       400,900  
Other     411,700       405,400  
Total revenue     18,331,200       18,161,000  
COST OF MERCHANDISE SOLD     571,500       742,500  
LEASING EXPENSE     698,700       554,900  
PROVISION FOR CREDIT LOSSES     10,100       95,000  
SELLING, GENERAL AND ADMINISTRATIVE EXPENSES     6,984,400       6,694,400  
Income from operations     10,066,500       10,074,200  
INTEREST EXPENSE     (442,200 )     (743,800 )
INTEREST AND OTHER EXPENSE     (300 )     (1,000 )
Income before income taxes     9,624,000       9,329,400  
PROVISION FOR INCOME TAXES     (2,351,800 )     (2,369,000 )
NET INCOME   $ 7,272,200     $ 6,960,400  
EARNINGS PER SHARE – BASIC   $ 1.86     $ 1.81  
EARNINGS PER SHARE – DILUTED   $ 1.73     $ 1.69  
WEIGHTED AVERAGE SHARES OUTSTANDING – BASIC     3,906,895       3,847,312  
WEIGHTED AVERAGE SHARES OUTSTANDING – DILUTED     4,198,454       4,124,573  
             

Media Contact:

Brett D. Heffes
763/520-8500

SOURCE Winmark Corporation

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