MINNEAPOLIS--(BUSINESS WIRE)--
Winmark Corporation (WINA) announced today net income for the quarter ended March 30, 2013 of $4,057,500 (or $.78 per share diluted) compared to net income of $3,516,000 (or $.67 per share diluted) in the first quarter of 2012.
The Company’s earnings growth during the first quarter was primarily driven by an increase in the size and performance of its lease portfolio and, to a lesser extent, its franchising business which experienced slower growth when compared to last year’s first quarter. During the quarter, the Company reduced its bank debt by $6.3 million.
Winmark Corporation creates, supports and finances business. At March 30, 2013, there were 983 franchises in operation under the brands Plato's Closet®, Play It Again Sports®, Once Upon A Child®, and Music Go Round®. An additional 60 retail franchises have been awarded but are not open. In addition, at March 30, 2013, the Company had a lease portfolio equal to $35.8 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, 2013 | December 29, 2012 | |||||||||
| ASSETS | ||||||||||
| Current Assets: | ||||||||||
| Cash and cash equivalents | $ | 2,191,500 | $ | 2,233,400 | ||||||
| Marketable securities | 89,300 | 85,900 | ||||||||
| Receivables, net | 1,211,100 | 1,237,100 | ||||||||
| Net investment in leases - current | 14,599,400 | 13,461,200 | ||||||||
| Income tax receivable | - | 1,400,700 | ||||||||
| Inventories | 72,000 | 71,200 | ||||||||
| Prepaid expenses | 422,500 | 445,200 | ||||||||
|
Total current assets |
18,585,800 | 18,934,700 | ||||||||
| Net investment in leases – long-term | 21,237,200 | 22,697,100 | ||||||||
| Property and equipment, net | 1,176,100 | 1,229,500 | ||||||||
| Other assets | 677,500 | 677,500 | ||||||||
| $ | 41,676,600 | $ | 43,538,800 | |||||||
| LIABILITIES AND SHAREHOLDERS’ EQUITY | ||||||||||
| Current Liabilities: | ||||||||||
| Line of credit | $ | 4,500,000 | $ | 10,800,000 | ||||||
| Accounts payable | 1,828,500 | 2,203,700 | ||||||||
| Income taxes payable | 759,400 | - | ||||||||
| Accrued liabilities | 1,632,700 | 1,286,300 | ||||||||
| Discounted lease rentals | 815,100 | 896,800 | ||||||||
| Rents received in advance | 82,000 | 134,800 | ||||||||
| Deferred revenue | 1,547,800 | 1,641,700 | ||||||||
| Deferred income taxes | 3,549,900 | 3,549,900 | ||||||||
|
Total current liabilities |
14,715,400 | 20,513,200 | ||||||||
| Long-Term Liabilities: | ||||||||||
| Discounted lease rentals | 180,700 | 177,900 | ||||||||
| Rents received in advance | 112,200 | 117,700 | ||||||||
| Deferred revenue | 954,000 | 953,000 | ||||||||
| Other liabilities | 1,219,700 | 1,254,700 | ||||||||
| Deferred income taxes | 2,594,300 | 2,594,300 | ||||||||
| Total long-term liabilities | 5,060,900 | 5,097,600 | ||||||||
| Shareholders’ Equity: | ||||||||||
|
Common stock, no par, 10,000,000 shares authorized,
4,999,647 and 4,996,459 shares issued and outstanding |
112,700 |
- |
||||||||
| Accumulated other comprehensive loss | (1,900 | ) | (4,000 | ) | ||||||
| Retained earnings | 21,789,500 | 17,932,000 | ||||||||
| Total shareholders’ equity | 21,900,300 | 17,928,000 | ||||||||
| $ | 41,676,600 | $ | 43,538,800 | |||||||
| WINMARK CORPORATION | ||||||||||
| CONDENSED STATEMENTS OF OPERATIONS | ||||||||||
|
(unaudited) |
||||||||||
| Three Months Ended | ||||||||||
| March 30, 2013 | March 31, 2012 | |||||||||
| REVENUE: | ||||||||||
| Royalties | $ | 8,474,900 | $ | 8,288,500 | ||||||
| Leasing income | 3,407,800 | 2,392,100 | ||||||||
| Merchandise sales | 665,700 | 709,800 | ||||||||
| Franchise fees | 414,600 | 285,000 | ||||||||
| Other | 185,400 | 158,000 | ||||||||
| Total revenue | 13,148,400 | 11,833,400 | ||||||||
| COST OF MERCHANDISE SOLD | 641,100 | 664,300 | ||||||||
| LEASING EXPENSE | 279,700 | 239,800 | ||||||||
| PROVISION FOR CREDIT LOSSES | 13,800 | (53,000 | ) | |||||||
| SELLING, GENERAL AND ADMINISTRATIVE EXPENSES | 5,537,900 | 5,136,100 | ||||||||
| Income from operations | 6,675,900 | 5,846,200 | ||||||||
| LOSS FROM EQUITY INVESTMENTS | - | (37,400 | ) | |||||||
| INTEREST EXPENSE | (89,500 | ) | (69,800 | ) | ||||||
| INTEREST AND OTHER INCOME (EXPENSE) | (10,200 | ) | 46,300 | |||||||
| Income before income taxes | 6,576,200 | 5,785,300 | ||||||||
|
PROVISION FOR INCOME TAXES |
(2,518,700 |
) |
(2,269,300 |
) |
||||||
|
NET INCOME |
$ |
4,057,500 |
$ |
3,516,000 |
||||||
| EARNINGS PER SHARE - BASIC | $ | .81 | $ | .70 | ||||||
| EARNINGS PER SHARE - DILUTED | $ | .78 | $ | .67 | ||||||
| WEIGHTED AVERAGE SHARES OUTSTANDING - BASIC | 4,997,322 | 5,052,952 | ||||||||
| WEIGHTED AVERAGE SHARES OUTSTANDING - DILUTED | 5,202,696 | 5,280,202 | ||||||||
John L. Morgan, 763-520-8500
