U.S. Markets open in 4 hrs 12 mins

Winmark Corporation Announces Year End Results

MINNEAPOLIS--(BUSINESS WIRE)--

Winmark Corporation (WINA) announced today net income for the year ended December 29, 2018 of $30,125,500 or $7.26 per share diluted compared to net income of $24,580,500 or $5.66 per share diluted in 2017. The fourth quarter 2018 net income was $7,657,800 or $1.83 per share diluted, compared to net income of $7,638,400 or $1.86 per share diluted, for the same period last year. Revenues for the year ended December 29, 2018 were $72,511,100, up from $69,757,300 in 2017.

Winmark Corporation creates, supports and finances business. At December 29, 2018, there were 1,241 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 47 retail franchises have been awarded but are not open. In addition, at December 29, 2018, the Company had a lease portfolio of $39.0 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)

       
December 29, 2018 December 30, 2017 (1)
ASSETS
Current Assets:
Cash and cash equivalents $ 2,496,000 $ 1,073,200
Restricted cash 80,000 90,000
Receivables, net 1,553,100 1,796,000
Net investment in leases - current 18,547,500 15,332,300
Income tax receivable 565,500 2,161,800
Inventories 107,600 97,100
Prepaid expenses 901,600   901,600  
Total current assets 24,251,300 21,452,000
 
Net investment in leases – long-term 20,455,500 25,945,300
Property and equipment, net 866,200 486,800
Goodwill 607,500 607,500
Other assets 482,600   350,400  
$ 46,663,100   $ 48,842,000  
 
LIABILITIES AND SHAREHOLDERS’ EQUITY (DEFICIT)
Current Liabilities:
Notes payable, net $ 3,236,100 $ 3,236,100
Accounts payable 1,351,800 2,073,000
Accrued liabilities 3,128,600 1,837,300
Discounted lease rentals 3,021,900 570,800
Deferred revenue 1,744,900   1,714,900  
Total current liabilities 12,483,300 9,432,100
 
Long-Term Liabilities:
Line of credit 35,400,000
Notes payable, net 25,604,900 28,841,000
Discounted lease rentals 2,723,500 1,121,600
Deferred revenue 8,432,400 8,595,300
Other liabilities 1,079,200 845,000
Deferred income taxes 1,148,300   320,500  
Total long-term liabilities 38,988,300 75,123,400
 
Shareholders’ Equity (Deficit):
Common stock, no par, 10,000,000 shares authorized,
3,907,686 and 3,843,078 shares issued and outstanding
4,425,600 1,476,200
Retained earnings (accumulated deficit) (9,234,100 ) (37,189,700 )
 
Total shareholders’ equity (deficit) (4,808,500 ) (35,713,500 )
$ 46,663,100   $ 48,842,000  
 

(1) Adjusted for the adoption of ASU 2014-09 under the retrospective method.

 
       

WINMARK CORPORATION
CONDENSED STATEMENTS OF OPERATIONS
(Unaudited)

                     
Quarter Ended Fiscal Year Ended
Dec. 29, 2018   Dec. 30, 2017(1)   Dec. 29, 2018   Dec. 30, 2017(1)
REVENUE:
Royalties $ 12,488,600 $ 11,778,400 $ 48,224,500 $ 45,643,500
Leasing income 3,182,000 4,748,200 18,176,500 18,470,200
Merchandise sales 562,900 513,700 2,903,100 2,572,200
Franchise fees 418,000 360,800 1,580,300 1,541,100
Other 420,300   384,700   1,626,700   1,530,300  
Total revenue 17,071,800 17,785,800 72,511,100 69,757,300
COST OF MERCHANDISE SOLD 506,100 490,200 2,741,100 2,432,600
LEASING EXPENSE 160,100 545,100 1,929,300 3,269,100
PROVISION FOR CREDIT LOSSES (109,800 ) 35,200 38,600 9,000
SELLING, GENERAL AND ADMINISTRATIVE EXPENSES 6,335,800   6,076,300   26,038,300   25,241,600  
Income from operations 10,179,600 10,639,000 41,763,800 38,805,000
INTEREST EXPENSE (468,900 ) (807,100 ) (2,447,500 ) (2,366,400 )
INTEREST AND OTHER INCOME (EXPENSE) (19,900 ) (17,000 ) (33,200 ) 12,900  
Income before income taxes 9,690,800 9,814,900 39,283,100 36,451,500
PROVISION FOR INCOME TAXES (2,033,000 ) (2,176,500 ) (9,157,600 ) (11,871,000 )
NET INCOME $ 7,657,800   $ 7,638,400   $ 30,125,500   $ 24,580,500  
EARNINGS PER SHARE – BASIC $ 1.96   $ 1.99   $ 7.77   $ 6.06  
EARNINGS PER SHARE – DILUTED $ 1.83   $ 1.86   $ 7.26   $ 5.66  
WEIGHTED AVERAGE SHARES OUTSTANDING – BASIC 3,906,657   3,830,396   3,874,757   4,056,049  
WEIGHTED AVERAGE SHARES OUTSTANDING – DILUTED 4,176,527   4,111,229   4,149,779   4,339,944  
 

(1) Adjusted for the adoption of ASU 2014-09 under the retrospective method.

 

View source version on businesswire.com: https://www.businesswire.com/news/home/20190228005828/en/