MINNEAPOLIS--(BUSINESS WIRE)--
Winmark Corporation (Nasdaq: WINA) announced today net income for the quarter ended April 1, 2017 of $5,416,400 (or $1.22 per share diluted) compared to net income of $4,562,900 (or $1.06 per share diluted) in the first quarter of 2016.
Earnings growth during the first quarter was driven by an increase in customer activity within the Company’s lease portfolio and moderate royalty growth in the franchise business. Brett D. Heffes, Chief Executive Officer, stated “Earlier this year, we announced our initiative to partner with emerging franchisors and entrepreneurs who can benefit from Winmark’s experience in establishing, growing and managing successful businesses. We have made meaningful progress on this front, and believe that Winmark Franchise Partners will provide us with opportunities for additional growth.”
Winmark Corporation creates, supports and finances business. At April 1, 2017, there were 1,184 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 70 retail franchises have been awarded but are not open. In addition, at April 1, 2017, the Company had a lease portfolio of $41.7 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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| April 1, 2017 | December 31, 2016 | ||||||||||
| ASSETS | |||||||||||
| Current Assets: | |||||||||||
| Cash and cash equivalents | $ | 1,723,400 | $ | 1,252,900 | |||||||
| Marketable securities | 207,500 | 199,900 | |||||||||
| Receivables, net | 1,513,400 | 1,479,200 | |||||||||
| Restricted cash | 30,000 | 40,000 | |||||||||
| Net investment in leases - current | 16,411,900 | 17,004,800 | |||||||||
| Income tax receivable | - | 1,678,800 | |||||||||
| Inventories | 106,200 | 87,500 | |||||||||
| Prepaid expenses | 809,400 | 1,050,700 | |||||||||
| Total current assets | 20,801,800 | 22,793,800 | |||||||||
| Net investment in leases – long-term | 25,303,700 | 24,410,700 | |||||||||
| Property and equipment, net | 683,000 | 769,600 | |||||||||
| Goodwill | 607,500 | 607,500 | |||||||||
| $ | 47,396,000 | $ | 48,581,600 | ||||||||
| LIABILITIES AND SHAREHOLDERS’ EQUITY (DEFICIT) | |||||||||||
| Current Liabilities: | |||||||||||
| Notes payable, net | $ | 1,990,000 | $ | 1,990,000 | |||||||
| Accounts payable | 1,249,800 | 1,692,000 | |||||||||
| Income tax payable | 1,407,600 | - | |||||||||
| Accrued liabilities | 1,797,100 | 1,811,100 | |||||||||
| Deferred revenue | 1,912,700 | 1,864,700 | |||||||||
| Total current liabilities | 8,357,200 | 7,357,800 | |||||||||
| Long-Term Liabilities: | |||||||||||
| Line of credit | 16,200,000 | 23,400,000 | |||||||||
| Notes payable, net | 19,429,000 | 19,926,500 | |||||||||
| Deferred revenue | 1,422,100 | 1,423,800 | |||||||||
| Other liabilities | 937,500 | 993,600 | |||||||||
| Deferred income taxes | 3,331,900 | 3,331,900 | |||||||||
| Total long-term liabilities | 41,320,500 | 49,075,800 | |||||||||
| Shareholders’ Equity (Deficit): | |||||||||||
|
Common stock, no par, 10,000,000 shares authorized, 4,169,769 and 4,165,769 shares issued and outstanding |
3,541,700 |
2,976,100 |
|||||||||
| Accumulated other comprehensive loss | (5,100 | ) | (9,900 | ) | |||||||
| Retained earnings (accumulated deficit) | (5,818,300 | ) | (10,818,200 | ) | |||||||
| Total shareholders’ equity (deficit) | (2,281,700 | ) | (7,852,000 | ) | |||||||
| $ | 47,396,000 | $ | 48,581,600 | ||||||||
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WINMARK CORPORATION |
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| Three Months Ended | ||||||||||||
| April 1, 2017 | March 26, 2016 | |||||||||||
| REVENUE: | ||||||||||||
| Royalties | $ | 10,454,000 | $ | 10,272,500 | ||||||||
| Leasing income | 5,859,600 | 4,512,700 | ||||||||||
| Merchandise sales | 748,300 | 737,100 | ||||||||||
| Franchise fees | 269,300 | 372,500 | ||||||||||
| Other | 292,600 | 285,500 | ||||||||||
| Total revenue | 17,623,800 | 16,180,300 | ||||||||||
| COST OF MERCHANDISE SOLD | 715,000 | 697,400 | ||||||||||
| LEASING EXPENSE | 1,271,400 | 904,100 | ||||||||||
| PROVISION FOR CREDIT LOSSES | (1,400 | ) | (14,400 | ) | ||||||||
| SELLING, GENERAL AND ADMINISTRATIVE EXPENSES | 6,503,400 | 6,554,600 | ||||||||||
| Income from operations | 9,135,400 | 8,038,600 | ||||||||||
| INTEREST EXPENSE | (499,100 | ) | (640,700 | ) | ||||||||
| INTEREST AND OTHER INCOME (EXPENSE) | 1,800 | (10,500 | ) | |||||||||
| Income before income taxes | 8,638,100 | 7,387,400 | ||||||||||
|
PROVISION FOR INCOME TAXES |
(3,221,700 |
) |
(2,824,500 |
) |
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|
NET INCOME |
$ |
5,416,400 |
$ |
4,562,900 |
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| EARNINGS PER SHARE - BASIC | $ | 1.30 | $ | 1.11 | ||||||||
| EARNINGS PER SHARE - DILUTED | $ | 1.22 | $ | 1.06 | ||||||||
| WEIGHTED AVERAGE SHARES OUTSTANDING - BASIC | 4,167,132 | 4,114,071 | ||||||||||
| WEIGHTED AVERAGE SHARES OUTSTANDING - DILUTED | 4,450,495 | 4,313,920 | ||||||||||
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