Winmark Corporation (Nasdaq: WINA) announced today net income for the quarter ended September 26, 2015 of $5,339,600 (or $1.23 per share diluted) compared to net income of $5,623,000 (or $1.09 per share diluted) in the third quarter of 2014. For the nine months ended September 26, 2015, net income was $16,145,300 (or $3.39 per share diluted) compared to net income of $14,455,700 (or $2.76 per share diluted) for the same period last year.
The Company experienced modest royalty growth in the franchising business, while profits in the leasing business were lower when compared to last year due to the timing of customer activity in the portfolio. Earnings per share growth during the quarter was positively impacted by the previously reported self-tender offer.
Winmark Corporation creates, supports and finances business. At September 26, 2015, there were 1,133 franchises in operation under the brands Plato's Closet®, Once Upon A Child®, Play It Again Sports®, Music Go Round® and Style Encore®. An additional 104 retail franchises have been awarded but are not open. In addition, at September 26, 2015, the Company had a lease portfolio of $40.3 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 including statements with respect to our ability to finance the growth of our leasing and franchising businesses for the foreseeable future.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) | ||||||||||
| September 26, 2015 | December 27, 2014 | |||||||||
| ASSETS | ||||||||||
| Current Assets: | ||||||||||
| Cash and cash equivalents | $ | 1,060,700 | $ | 2,089,700 | ||||||
| Marketable securities | 226,500 | 466,800 | ||||||||
| Receivables, net | 1,314,200 | 1,328,200 | ||||||||
| Net investment in leases - current | 18,260,700 | 19,831,600 | ||||||||
| Income tax receivable | 855,000 | 4,163,900 | ||||||||
| Inventories | 59,600 | 93,500 | ||||||||
| Prepaid expenses | 757,500 | 467,400 | ||||||||
| Total current assets | 22,534,200 | 28,441,100 | ||||||||
| Net investment in leases – long-term | 21,994,700 | 24,188,900 | ||||||||
| Property and equipment, net | 1,218,800 | 1,420,300 | ||||||||
| Other assets | 607,500 | 677,500 | ||||||||
| Deferred income taxes | 419,400 | - | ||||||||
| $ | 46,774,600 | $ | 54,727,800 | |||||||
| LIABILITIES AND SHAREHOLDERS’ EQUITY (DEFICIT) | ||||||||||
| Current Liabilities: | ||||||||||
| Line of credit | $ | - | $ | 18,500,000 | ||||||
| Notes payable, net | 1,988,700 | - | ||||||||
| Accounts payable | 1,208,400 | 1,955,500 | ||||||||
| Accrued liabilities | 3,139,800 | 1,759,200 | ||||||||
| Discounted lease rentals | 75,800 | 227,300 | ||||||||
| Deferred revenue | 2,139,200 | 2,142,600 | ||||||||
| Deferred income taxes | 2,846,400 | 4,412,600 | ||||||||
| Total current liabilities | 11,398,300 | 28,997,200 | ||||||||
| Long-Term Liabilities: | ||||||||||
| Line of credit | 46,200,000 | - | ||||||||
| Notes payable, net | 22,403,200 | - | ||||||||
| Discounted lease rentals | - | 25,800 | ||||||||
| Deferred revenue | 1,536,100 | 1,347,800 | ||||||||
| Other liabilities | 1,248,800 | 1,403,200 | ||||||||
| Deferred income taxes | - | 1,344,300 | ||||||||
| Total long-term liabilities | 71,388,100 | 4,121,100 | ||||||||
| Shareholders’ Equity (Deficit): | ||||||||||
Common stock, no par, 10,000,000 shares authorized, 4,128,031 and 4,998,512 shares issued and outstanding | 434,700 | 422,400 | ||||||||
| Accumulated other comprehensive loss | (33,700 | ) | (37,100 | ) | ||||||
| Retained earnings (accumulated deficit) | (36,412,800 | ) | 21,224,200 | |||||||
| Total shareholders’ equity (deficit) | (36,011,800 | ) | 21,609,500 | |||||||
| $ | 46,774,600 | $ | 54,727,800 | |||||||
| WINMARK CORPORATION | ||||||||||||||||||||
| CONDENSED STATEMENTS OF OPERATIONS | ||||||||||||||||||||
(Unaudited) | ||||||||||||||||||||
| Quarter Ended | Nine Months Ended | |||||||||||||||||||
| September 26, 2015 | September 27, 2014 | September 26, 2015 | September 27, 2014 | |||||||||||||||||
| REVENUE: | ||||||||||||||||||||
| Royalties | $ | 11,286,100 | $ | 10,725,000 | $ | 31,226,700 | $ | 28,735,800 | ||||||||||||
| Leasing income | 3,247,000 | 4,121,800 | 16,919,900 | 11,655,000 | ||||||||||||||||
| Merchandise sales | 762,300 | 786,100 | 2,182,300 | 2,259,900 | ||||||||||||||||
| Franchise fees | 483,200 | 558,200 | 1,253,500 | 1,514,700 | ||||||||||||||||
| Other | 220,900 | 213,300 | 917,900 | 830,500 | ||||||||||||||||
| Total revenue | 15,999,500 | 16,404,400 | 52,500,300 | 44,995,900 | ||||||||||||||||
| COST OF MERCHANDISE SOLD | 711,600 | 742,300 | 2,055,600 | 2,156,300 | ||||||||||||||||
| LEASING EXPENSE | 173,400 | 808,500 | 4,941,300 | 1,234,200 | ||||||||||||||||
| PROVISION FOR CREDIT LOSSES | 38,800 | (1,700 | ) | (123,400 | ) | 26,100 | ||||||||||||||
| SELLING, GENERAL AND ADMINISTRATIVE EXPENSES | 5,733,900 | 5,677,600 | 18,226,700 | 17,874,500 | ||||||||||||||||
| Income from operations | 9,341,800 | 9,177,700 | 27,400,100 | 23,704,800 | ||||||||||||||||
| INTEREST EXPENSE | (687,700 | ) | (150,500 | ) | (1,142,900 | ) | (356,700 | ) | ||||||||||||
| INTEREST AND OTHER INCOME/(EXPENSE) | (12,400 | ) | 27,200 | (61,800 | ) | 28,200 | ||||||||||||||
| Income before income taxes | 8,641,700 | 9,054,400 | 26,195,400 | 23,376,300 | ||||||||||||||||
| PROVISION FOR INCOME TAXES | (3,302,100 | ) | (3,431,400 | ) | (10,050,100 | ) | (8,920,600 | ) | ||||||||||||
| NET INCOME | $ | 5,339,600 | $ | 5,623,000 | $ | 16,145,300 | $ | 14,455,700 | ||||||||||||
| EARNINGS PER SHARE – BASIC | $ | 1.29 | $ | 1.12 | $ | 3.53 | $ | 2.84 | ||||||||||||
| EARNINGS PER SHARE – DILUTED | $ | 1.23 | $ | 1.09 | $ | 3.39 | $ | 2.76 | ||||||||||||
| WEIGHTED AVERAGE SHARES OUTSTANDING – BASIC | 4,128,031 | 5,022,166 | 4,568,813 | 5,093,243 | ||||||||||||||||
| WEIGHTED AVERAGE SHARES OUTSTANDING – DILUTED | 4,338,230 | 5,156,785 | 4,758,158 | 5,235,949 | ||||||||||||||||
View source version on businesswire.com: http://www.businesswire.com/news/home/20151014006236/en/
Contacts:
Brett D. Heffes, 763-520-8500
