Winmark: Minneapolis, Mn (October 16, 2019)

The following excerpt is from the company's SEC filing.

 Winmark Corporation (Nasdaq: WINA) announced today net income for the quarter ended September  28, 2019 of $9,113,800 (or $2.24 per share diluted) compared to net income of $8,364,300 (or $2.01 per share diluted) in the third quarter of 2018. For the nine months ended September  28, 2019, net income was $23,687,900 (or $5.76 per share diluted) compared to net income of $22,467,700 (or $5.43 per share diluted) for the same period last year.

“I am pleased with the performance of our core franchising operations during the quarter.  However, during 2019, the pace of new equipment purchases in our leasing busin ess has slowed and the size of our portfolio has declined,” commented Brett D. Heffes, Chief Executive Officer.  “We continue to explore ways to grow leased assets and acquire new customers.”

Winmark Corporation creates, supports and finances business. At September 28, 2019, there were 1,255 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 40 retail franchises have been awarded but are not open.  In addition, at September 28, 2019, the Company had a lease portfolio of  $30.0 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

ASSETS

Current Assets:

 Cash and cash equivalents

7,487,200

2,496,000

 Restricted cash

75,000

80,000

 Receivables, net

1,594,400

1,553,100

 Net investment in leases - current

14,352,800

18,547,500

 Income tax receivable

391,700

565,500

 Inventories

69,700

107,600

 Prepaid expenses

1,012,500

901,600

     Total current assets

24,983,300

24,251,300

 Net investment in leases – long-term

15,644,900

20,455,500

 Property and equipment, net

2,863,700

866,200

 Operating lease right of use asset

3,734,400

 Goodwill

607,500

607,500

 Other assets

501,200

482,600

 Deferred income taxes

172,500

48,507,500

46,663,100

LIABILITIES AND SHAREHOLDERS’ EQUITY (DEFICIT)

Current Liabilities:

 Notes payable, net

3,486,100

3,236,100

 Accounts payable

1,185,300

1,351,800

 Accrued liabilities

2,980,000

3,128,600

 Discounted lease rentals

3,012,900

3,021,900

 Deferred revenue

1,730,900

1,744,900

     Total current liabilities

12,395,200

12,483,300

Long-Term Liabilities:

22,927,800

25,604,900

1,354,000

2,723,500

8,031,900

8,432,400

 Operating lease liabilities

5,953,100

 Other liabilities

971,500

1,079,200

1,148,300

     Total long-term liabilities

39,238,300

38,988,300

Shareholders’ Equity (Deficit):

Common stock, no par, 10,000,000 shares authorized,

3,822,978 and 3,907,686 shares issued and outstanding

3,851,000

4,425,600

 Retained earnings (accumulated deficit)

(6,977,000)

(9,234,100)

     Total shareholders’ equity (deficit)

(3,126,000)

(4,808,500)

CONDENSED STATEMENTS OF OPERATIONS

(Unaudited)

Quarter Ended

Nine Months Ended

Sept. 28, 2019

Sept. 29, 2018

REVENUE:

 Royalties

13,808,800

12,865,900

38,223,400

35,735,900

 Leasing income

4,375,500

4,608,600

12,733,800

14,994,500

 Merchandise sales

704,500

858,400

2,037,300

2,340,200

 Franchise fees

377,400

383,300

1,183,100

1,162,300

414,700

402,300

1,238,700

1,206,400

              Total revenue

19,680,900

19,118,500

55,416,300

55,439,300

COST OF MERCHANDISE SOLD

671,700

811,500

1,924,400

2,235,000

LEASING EXPENSE

572,400

718,500

1,642,000

1,769,200

PROVISION FOR CREDIT LOSSES

(55,500)

(55,600)

23,900

148,400

SELLING, GENERAL AND ADMINISTRATIVE EXPENSES

6,217,600

6,208,800

19,637,900

19,702,500

              Income from operations

12,274,700

11,435,300

32,188,100

31,584,200

INTEREST EXPENSE

(406,200)

(576,900)

(1,348,700)

(1,978,600)

INTEREST AND OTHER EXPENSE

(1,000)

(5,900)

(13,300)

              Income before income taxes

11,869,000

10,857,400

30,833,500

29,592,300

PROVISION FOR INCOME TAXES

(2,755,200)

(2,493,100)

(7,145,600)

(7,124,600)

NET INCOME

9,113,800

8,364,300

23,687,900

22,467,700

EARNINGS PER SHARE – BASIC

EARNINGS PER SHARE – DILUTED

WEIGHTED AVERAGE SHARES OUTSTANDING – BASIC

3,808,863

3,886,473

3,829,329

3,864,077

WEIGHTED AVERAGE SHARES OUTSTANDING – DILUTED

4,065,301

4,164,339

4,112,318

4,140,816

The above information was disclosed in a filing to the SEC. To see the filing, click here.

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