MINNEAPOLIS--(BUSINESS WIRE)--
Winmark Corporation (Nasdaq: WINA) announced today net income for the quarter ended July 1, 2017 of $5,773,200 (or $1.29 per share diluted) compared to net income of $5,394,300 (or $1.25 per share diluted) in the second quarter of 2016. For the six months ended July 1, 2017, net income was $11,189,600 (or $2.50 per share diluted) compared to net income of $9,957,200 (or $2.31 per share diluted) for the same period last year.
Winmark Corporation creates, supports and finances business. At July 1, 2017, there were 1,199 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 59 retail franchises have been awarded but are not open. In addition, at July 1, 2017, the Company had a lease portfolio equal to $41.0 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) |
|||||||||
| July 1, 2017 | December 31, 2016 | ||||||||
| ASSETS | |||||||||
| Current Assets: | |||||||||
| Cash and cash equivalents | $ | 1,071,900 | $ | 1,252,900 | |||||
| Marketable securities | 216,500 | 199,900 | |||||||
| Receivables, net | 1,597,200 | 1,479,200 | |||||||
| Restricted cash | 30,000 | 40,000 | |||||||
| Net investment in leases - current | 16,467,800 | 17,004,800 | |||||||
| Income tax receivable | 1,330,200 | 1,678,800 | |||||||
| Inventories | 99,400 | 87,500 | |||||||
| Prepaid expenses | 468,800 | 1,050,700 | |||||||
| Total current assets | 21,281,800 | 22,793,800 | |||||||
| Net investment in leases – long-term | 24,524,000 | 24,410,700 | |||||||
| Property and equipment, net | 625,100 | 769,600 | |||||||
| Goodwill | 607,500 | 607,500 | |||||||
| $ | 47,038,400 | $ | 48,581,600 | ||||||
| LIABILITIES AND SHAREHOLDERS’ EQUITY (DEFICIT) | |||||||||
| Current Liabilities: | |||||||||
| Notes payable, net | $ | 1,990,000 | $ | 1,990,000 | |||||
| Accounts payable | 1,409,500 | 1,692,000 | |||||||
| Accrued liabilities | 2,595,700 | 1,811,100 | |||||||
| Deferred revenue | 1,589,100 | 1,864,700 | |||||||
| Total current liabilities | 7,584,300 | 7,357,800 | |||||||
| Long-Term Liabilities: | |||||||||
| Line of credit | 10,100,000 | 23,400,000 | |||||||
| Notes payable, net | 18,931,500 | 19,926,500 | |||||||
| Deferred revenue | 1,445,100 | 1,423,800 | |||||||
| Other liabilities | 873,900 | 993,600 | |||||||
| Deferred income taxes | 3,472,200 | 3,331,900 | |||||||
| Total long-term liabilities | 34,822,700 | 49,075,800 | |||||||
| Shareholders’ Equity (Deficit): | |||||||||
|
Common stock, no par, 10,000,000 shares authorized, 4,215,528 and 4,165,769 shares issued and outstanding |
5,139,700 |
2,976,100 |
|||||||
| Accumulated other comprehensive income (loss) | 400 | (9,900) | |||||||
| Retained earnings (accumulated deficit) | (508,700) | (10,818,200) | |||||||
| Total shareholders’ equity (deficit) | 4,631,400 | (7,852,000) | |||||||
| $ | 47,038,400 | $ | 48,581,600 | ||||||
| WINMARK CORPORATION | |||||||||||||||||||
| CONDENSED STATEMENTS OF OPERATIONS | |||||||||||||||||||
|
(Unaudited) |
|||||||||||||||||||
| Quarter Ended | Six Months Ended | ||||||||||||||||||
| July 1, 2017 | June 25, 2016 | July 1, 2017 | June 25, 2016 | ||||||||||||||||
| REVENUE: | |||||||||||||||||||
| Royalties | $ | 11,094,400 | $ | 10,557,300 |
$ |
21,548,400 |
$ | 20,829,800 | |||||||||||
| Leasing income | 3,946,600 | 4,152,300 | 9,806,200 | 8,665,000 | |||||||||||||||
| Merchandise sales | 537,100 | 625,300 | 1,285,400 | 1,362,400 | |||||||||||||||
| Franchise fees | 675,400 | 493,500 | 944,700 | 866,000 | |||||||||||||||
| Other | 496,000 | 471,400 | 788,600 | 756,900 | |||||||||||||||
| Total revenue | 16,749,500 | 16,299,800 | 34,373,300 | 32,480,100 | |||||||||||||||
| COST OF MERCHANDISE SOLD | 499,100 | 588,300 | 1,214,100 | 1,285,700 | |||||||||||||||
| LEASING EXPENSE | 660,600 | 460,100 | 1,932,000 | 1,364,200 | |||||||||||||||
| PROVISION FOR CREDIT LOSSES | (11,500) | (7,900) | (12,900) | (22,300) | |||||||||||||||
| SELLING, GENERAL AND ADMINISTRATIVE EXPENSES | 6,467,100 | 5,936,200 | 12,970,500 | 12,490,800 | |||||||||||||||
| Income from operations | 9,134,200 | 9,323,100 | 18,269,600 | 17,361,700 | |||||||||||||||
| INTEREST EXPENSE | (446,300) | (593,800) | (945,400) | (1,234,500) | |||||||||||||||
| INTEREST AND OTHER INCOME (EXPENSE) | 100 | 9,500 | 1,900 | (1,000) | |||||||||||||||
| Income before income taxes | 8,688,000 | 8,738,800 | 17,326,100 | 16,126,200 | |||||||||||||||
| PROVISION FOR INCOME TAXES | (2,914,800) | (3,344,500) | (6,136,500) | (6,169,000) | |||||||||||||||
| NET INCOME | $ | 5,773,200 | $ | 5,394,300 | $ | 11,189,600 | $ | 9,957,200 | |||||||||||
| EARNINGS PER SHARE – BASIC | $ | 1.37 | $ | 1.31 | $ | 2.67 | $ | 2.42 | |||||||||||
| EARNINGS PER SHARE – DILUTED | $ | 1.29 | $ | 1.25 | $ | 2.50 | $ | 2.31 | |||||||||||
| WEIGHTED AVERAGE SHARES OUTSTANDING – BASIC | 4,201,982 | 4,110,429 | 4,184,558 | 4,112,254 | |||||||||||||||
| WEIGHTED AVERAGE SHARES OUTSTANDING – DILUTED | 4,483,647 | 4,318,763 | 4,467,072 | 4,316,346 | |||||||||||||||
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