Winmark Corporation Announces First Quarter Results
MINNEAPOLIS--(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.
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WINMARK CORPORATION |
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CONDENSED BALANCE SHEETS |
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(unaudited) |
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| 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 | ||||||
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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: | ||||||||
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Common stock, no par, 10,000,000 shares authorized, 4,999,594 and 4,998,512 shares issued and outstanding |
844,400 |
422,400 |
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| 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 | |||||
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WINMARK CORPORATION |
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CONDENSED STATEMENTS OF OPERATIONS |
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(unaudited) |
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| 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 | ||||||
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PROVISION FOR INCOME TAXES |
(3,775,000 |
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(2,820,600 |
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NET INCOME |
$ |
6,054,300 |
$ |
4,551,900 |
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| 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 | ||||||
Winmark Corporation
Brett D. Heffes, 763-520-8500
Source: Winmark Corporation