Attached files
| file | filename |
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| 8-K - 8-K - WINMARK CORP | a11-18431_18k.htm |
Exhibit 99.1
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Contact: |
John L. Morgan |
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763/520-8500 |
FOR IMMEDIATE RELEASE
WINMARK CORPORATION ANNOUNCES
SECOND QUARTER RESULTS
Minneapolis, MN (July 13, 2011) — Winmark Corporation (Nasdaq; WINA) announced today net income for the quarter ended June 25, 2011 of $3,400,200 (or $.65 per share diluted) compared to net income of $2,338,700 (or $.45 per share diluted) in 2010. For the six months ended June 25, 2011, net income was $6,426,500 (or $1.23 per share diluted) compared to net income of $4,519,800 (or $.87 per share diluted) for the same period last year.
John L. Morgan, Chairman and Chief Executive Officer, stated, “Our results during the second quarter were strong. Our leasing business experienced significant growth in profitability due to high levels of activity within our portfolio. Our franchising business continued to exhibit outstanding financial performance. Additionally, we paid down our line of credit and ended the quarter with no bank debt.”
Winmark Corporation creates, supports and finances business. At June 25, 2011, there were 907 franchises in operation under the brands Play It Again Sports®, Plato’s Closet®, Once Upon A Child® and Music Go Round®. An additional 50 retail franchises have been awarded but are not open. In addition, at June 25, 2011, the Company had loans and leases equal to $31.7 million.
This press release contains forward-looking statements within the meaning of the safe harbor provisions of Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), relating to future events or the future financial performance of the Company including statements with respect to our ability to finance the growth of our leasing and franchising businesses for the foreseeable future. Such forward-looking statements are only predictions or statements of intention subject to risks and uncertainties and actual events or results could differ materially from those anticipated. Because actual result may differ, shareholders and prospective investors are cautioned not to place undue reliance on such forward-looking statements.
WINMARK CORPORATION
CONDENSED BALANCE SHEETS
(unaudited)
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June 25, 2011 |
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December 25, 2010 |
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ASSETS |
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Current Assets: |
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Cash and cash equivalents |
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$ |
1,036,000 |
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$ |
2,257,100 |
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Marketable securities |
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7,400 |
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161,000 |
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Receivables, net |
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1,643,700 |
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1,841,300 |
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Net investment in leases - current |
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12,226,700 |
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13,856,700 |
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Income tax receivable |
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— |
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294,700 |
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Inventories |
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50,300 |
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85,900 |
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Prepaid expenses |
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324,100 |
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382,600 |
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Total current assets |
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15,288,200 |
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18,879,300 |
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Net investment in leases — long-term |
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17,716,200 |
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16,802,500 |
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Long-term investments, net |
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4,500,900 |
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3,973,800 |
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Property and equipment, net |
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1,655,900 |
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1,785,900 |
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Other assets |
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677,500 |
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680,500 |
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$ |
39,838,700 |
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$ |
42,122,000 |
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LIABILITIES AND SHAREHOLDERS’ EQUITY |
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Current Liabilities: |
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Line of credit |
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$ |
— |
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$ |
8,800,000 |
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Accounts payable |
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2,039,300 |
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1,274,200 |
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Income taxes payable |
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1,449,500 |
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— |
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Accrued liabilities |
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2,276,700 |
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1,513,600 |
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Discounted lease rentals |
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203,600 |
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530,400 |
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Rents received in advance |
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256,600 |
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291,800 |
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Deferred revenue |
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1,402,400 |
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1,041,700 |
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Deferred income taxes |
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1,832,500 |
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1,832,500 |
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Total current liabilities |
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9,460,600 |
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15,284,200 |
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Long-Term Liabilities: |
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Discounted lease rentals |
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9,300 |
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26,500 |
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Rents received in advance |
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517,000 |
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696,900 |
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Deferred revenue |
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819,800 |
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767,600 |
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Other liabilities |
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1,282,200 |
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1,678,000 |
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Deferred income taxes |
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655,800 |
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655,800 |
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Total long-term liabilities |
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3,284,100 |
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3,824,800 |
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Shareholders’ Equity: |
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Common stock, no par, 10,000,000 shares authorized, 4,968,789 and 5,020,739 shares issued and outstanding |
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— |
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513,700 |
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Accumulated other comprehensive loss |
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(600 |
) |
— |
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Retained earnings |
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27,094,600 |
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22,499,300 |
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Total shareholders’ equity |
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27,094,000 |
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23,013,000 |
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$ |
39,838,700 |
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$ |
42,122,000 |
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WINMARK CORPORATION
CONDENSED STATEMENTS OF OPERATIONS
(Unaudited)
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Quarter Ended |
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Six Months Ended |
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June 25, 2011 |
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June 26, 2010 |
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June 25, 2011 |
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June 26, 2010 |
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REVENUE: |
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Royalties |
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$ |
6,819,300 |
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$ |
6,368,300 |
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$ |
13,872,100 |
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$ |
12,731,800 |
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Leasing income |
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6,980,200 |
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2,345,800 |
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10,215,200 |
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4,870,700 |
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Merchandise sales |
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833,000 |
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550,500 |
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1,334,400 |
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1,045,200 |
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Franchise fees |
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245,000 |
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305,000 |
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320,000 |
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528,500 |
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Other |
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347,300 |
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309,500 |
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588,000 |
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545,700 |
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Total revenue |
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15,224,800 |
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9,879,100 |
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26,329,700 |
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19,721,900 |
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COST OF MERCHANDISE SOLD |
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794,200 |
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520,200 |
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1,277,100 |
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991,200 |
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LEASING EXPENSE |
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3,340,200 |
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439,300 |
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3,858,900 |
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986,600 |
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PROVISION FOR CREDIT LOSSES |
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(24,100 |
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(160,200 |
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21,300 |
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11,900 |
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SELLING, GENERAL AND ADMINISTRATIVE EXPENSES |
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5,030,400 |
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4,877,200 |
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9,876,300 |
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9,733,100 |
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Income from operations |
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6,084,100 |
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4,202,600 |
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11,296,100 |
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7,999,100 |
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LOSS FROM EQUITY INVESTMENTS |
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(142,900 |
) |
(102,000 |
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(219,900 |
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(122,200 |
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IMPAIRMENT OF INVESTMENT IN NOTES |
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(252,900 |
) |
— |
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(252,900 |
) |
— |
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INTEREST EXPENSE |
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(26,900 |
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(273,100 |
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(58,000 |
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(561,300 |
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INTEREST AND OTHER INCOME |
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13,900 |
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103,000 |
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31,100 |
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280,700 |
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Income before income taxes |
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5,675,300 |
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3,930,500 |
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10,796,400 |
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7,596,300 |
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PROVISION FOR INCOME TAXES |
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(2,275,100 |
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(1,591,800 |
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(4,369,900 |
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(3,076,500 |
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NET INCOME |
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$ |
3,400,200 |
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$ |
2,338,700 |
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$ |
6,426,500 |
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$ |
4,519,800 |
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EARNINGS PER SHARE — BASIC |
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$ |
.68 |
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$ |
.47 |
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$ |
1.29 |
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$ |
.89 |
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EARNINGS PER SHARE — DILUTED |
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$ |
.65 |
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$ |
.45 |
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$ |
1.23 |
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$ |
.87 |
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WEIGHTED AVERAGE SHARES OUTSTANDING — BASIC |
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4,980,844 |
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5,025,944 |
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4,985,220 |
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5,077,179 |
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WEIGHTED AVERAGE SHARES OUTSTANDING — DILUTED |
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5,239,443 |
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5,189,925 |
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5,227,468 |
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5,193,154 |
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