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Winmark Corporation Announces Year End Results

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Winmark Corporation (Nasdaq: WINA) announced today net income for the year ended December 26, 2020 of $29,823,300 or $7.72 per share diluted compared to net income of $32,149,300 or $7.84 per share diluted in 2019. The fourth quarter 2020 net income was $8,092,300 or $2.09 per share diluted, compared to net income of $8,461,400 or $2.08 per share diluted, for the same period last year. Revenues for the year ended December 26, 2020 were $66,061,800, down from $73,298,900 in 2019.

"In light of the disruption to our franchise store operations from the resurgence of COVID-19 during the fourth quarter, we are satisfied with our results," commented Brett D. Heffes, Chairman and Chief Executive Officer. "Our franchisees and employees have continued to respond well to the challenging environment with resolve and determination. Our committed franchisees continue to serve local communities by providing a safe, convenient way to buy and sell gently used items. Winmark continues to be a leader in the circular economy and has been at the forefront of the sustainability movement for over thirty years."

Winmark Corporation creates, supports and finances business. At December 26, 2020, there were 1,264 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 30 retail franchises have been awarded but are not open.

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)

December 26, 2020

December 28, 2019

ASSETS

Current Assets:

Cash and cash equivalents

$

6,659,000

$

25,130,300

Restricted cash

25,000

50,000

Receivables, net

1,581,900

1,669,500

Net investment in leases - current

8,687,500

12,800,100

Income tax receivable

221,200

497,900

Inventories

106,600

86,000

Prepaid expenses

995,200

968,100

Total current assets

18,276,400

41,201,900

Net investment in leases – long-term

4,573,600

12,505,500

Property and equipment, net

2,332,800

2,772,600

Operating lease right of use asset

3,226,300

3,595,200

Goodwill

607,500

607,500

Other assets

435,900

492,500

Deferred income taxes

1,890,700

667,000

$

31,343,200

$

61,842,200

LIABILITIES AND SHAREHOLDERS’ EQUITY (DEFICIT)

Current Liabilities:

Notes payable, net

$

4,236,100

$

3,736,100

Accounts payable

1,769,600

1,015,000

Accrued liabilities

2,624,000

2,783,100

Discounted lease rentals

1,096,600

2,680,700

Deferred revenue

1,657,400

1,717,000

Total current liabilities

11,383,700

11,931,900

Long-Term Liabilities:

Notes payable, net

17,632,700

21,868,800

Discounted lease rentals

574,000

836,900

Deferred revenue

7,050,900

7,858,500

Operating lease liabilities

5,307,400

5,846,100

Other liabilities

773,200

1,051,700

Total long-term liabilities

31,338,200

37,462,000

Shareholders’ Equity (Deficit):

Common stock, no par, 10,000,000 shares authorized, 3,756,028 and 3,947,858 shares issued and outstanding

9,281,800

11,929,300

Retained earnings (accumulated deficit)

(20,660,500

)

519,000

Total shareholders’ equity (deficit)

(11,378,700

)

12,448,300

$

31,343,200

$

61,842,200

WINMARK CORPORATION

CONDENSED STATEMENTS OF OPERATIONS

(Unaudited)

Quarter Ended

Fiscal Year Ended

December 26, 2020

December 28, 2019

December 26, 2020

December 28, 2019

Revenue:

Royalties

$

13,097,900

$

13,198,400

$

46,286,200

$

51,421,800

Leasing income

2,443,200

3,322,000

14,484,000

16,055,800

Merchandise sales

468,600

581,500

2,215,400

2,618,800

Franchise fees

379,600

357,800

1,444,500

1,540,900

Other

406,000

422,900

1,631,700

1,661,600

Total revenue

16,795,300

17,882,600

66,061,800

73,298,900

Cost of merchandise sold

441,900

545,300

2,103,900

2,469,700

Leasing expense

178,900

389,100

2,622,600

2,031,100

Provision for credit losses

(243,600

)

(102,200

)

(79,300

)

(78,300

)

Selling, general and administrative expenses

5,484,000

6,107,400

21,203,100

25,745,300

Income from operations

10,934,100

10,943,000

40,211,500

43,131,100

Interest expense

(327,900

)

(382,400

)

(1,737,500

)

(1,731,100

)

Interest and other income

15,700

73,300

43,400

67,400

Income before income taxes

10,621,900

10,633,900

38,517,400

41,467,400

Provision for income taxes

(2,529,600

)

(2,172,500

)

(8,694,100

)

(9,318,100

)

Net income

$

8,092,300

$

8,461,400

$

29,823,300

$

32,149,300

Earnings per share - basic

$

2.16

$

2.18

$

8.02

$

8.37

Earnings per share - diluted

$

2.09

$

2.08

$

7.72

$

7.84

Weighted average shares outstanding - basic

3,747,604

3,874,570

3,719,485

3,840,638

Weighted average shares outstanding - diluted

3,879,796

4,065,566

3,863,264

4,100,629

View source version on businesswire.com: https://www.businesswire.com/news/home/20210224005759/en/

Contacts

Brett D. Heffes
763/520-8500