Winmark Corporation Announces First Quarter Results
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 |
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 |
) |
||||||||
|
NET INCOME |
$ |
5,416,400 |
$ |
4,562,900 |
||||||||
| 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 | ||||||||||
Contacts
Winmark Corporation
Brett D. Heffes, 763-520-8500
