Attached files
| file | filename |
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| 8-K - 8-K - WINMARK CORP | a12-16625_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 18, 2012) — Winmark Corporation (Nasdaq: WINA) announced today net income for the quarter ended June 30, 2012 of $3,404,400 (or $.65 per share diluted) compared to net income of $3,400,200 (or $.65 per share diluted) in 2011. For the six months ended June 30, 2012, net income was $6,920,400 (or $1.31 per share diluted) compared to net income of $6,426,500 (or $1.23 per share diluted) for the same period last year.
John L. Morgan, Chairman and Chief Executive Officer, stated, “Our second quarter results for the franchising business continue to show steady growth in both royalties and new franchise agreements. Profits from our leasing business were lower when compared to last year due to unpredictable events in our portfolio. These timing issues will continue to create ‘lumpiness’ in our leasing results. Management is diligent in adding new customers and building a portfolio of leases that ensure our long-term success.”
Winmark Corporation creates, supports and finances business. At June 30, 2012, there were 946 franchises in operation under the brands Plato’s Closet®, Play It Again Sports®, Once Upon A Child® and Music Go Round®. An additional 60 retail franchises have been awarded but are not open. In addition, at June 30, 2012, the Company had a lease portfolio equal to $32.1 million.
This press release contains forward-looking statements within the meaning of the safe harbor provisions of Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), relating to future events or the future financial performance of the Company including statements with respect to our ability to finance the growth of our leasing and franchising businesses for the foreseeable future. Such forward-looking statements are only predictions or statements of intention subject to risks and uncertainties and actual events or results could differ materially from those anticipated. Because actual result may differ, shareholders and prospective investors are cautioned not to place undue reliance on such forward-looking statements.
WINMARK CORPORATION
CONDENSED BALANCE SHEETS
(unaudited)
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June 30, 2012 |
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December 31, 2011 |
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ASSETS |
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Current Assets: |
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Cash and cash equivalents |
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$ |
2,037,300 |
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$ |
9,020,100 |
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Marketable securities |
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116,600 |
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1,043,800 |
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Receivables, net |
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1,041,900 |
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1,316,200 |
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Net investment in leases - current |
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11,454,500 |
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11,746,900 |
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Income tax receivable |
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1,171,000 |
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116,500 |
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Inventories |
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84,600 |
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68,500 |
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Prepaid expenses |
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401,100 |
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362,000 |
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Total current assets |
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16,307,000 |
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23,674,000 |
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Net investment in leases — long-term |
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20,618,000 |
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18,102,000 |
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Long-term investments, net |
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3,539,300 |
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3,817,400 |
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Property and equipment, net |
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1,323,500 |
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1,474,800 |
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Other assets |
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677,500 |
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677,500 |
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$ |
42,465,300 |
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$ |
47,745,700 |
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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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$ |
12,800,000 |
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$ |
— |
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Accounts payable |
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1,252,300 |
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1,460,300 |
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Accrued liabilities |
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2,187,500 |
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1,346,000 |
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Discounted lease rentals |
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403,200 |
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20,800 |
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Rents received in advance |
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276,800 |
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274,700 |
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Deferred revenue |
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1,635,600 |
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1,212,400 |
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Deferred income taxes |
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3,487,900 |
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3,464,800 |
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Total current liabilities |
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22,043,300 |
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7,779,000 |
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Long-Term Liabilities: |
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Discounted lease rentals |
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542,900 |
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— |
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Rents received in advance |
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152,200 |
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269,400 |
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Deferred revenue |
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882,800 |
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844,300 |
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Other liabilities |
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1,351,500 |
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1,389,200 |
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Deferred income taxes |
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2,607,100 |
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2,355,100 |
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Total long-term liabilities |
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5,536,500 |
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4,858,000 |
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Shareholders’ Equity: |
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Common stock, no par, 10,000,000 shares authorized, 5,026,698 and 4,987,643 shares issued and outstanding |
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— |
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629,800 |
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Accumulated other comprehensive income |
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2,200 |
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17,000 |
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Retained earnings |
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14,883,300 |
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34,461,900 |
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Total shareholders’ equity |
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14,885,500 |
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35,108,700 |
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$ |
42,465,300 |
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$ |
47,745,700 |
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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 30, 2012 |
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June 25, 2011 |
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June 30, 2012 |
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June 25, 2011 |
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REVENUE: |
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Royalties |
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$ |
7,693,900 |
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$ |
6,819,300 |
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$ |
15,982,400 |
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$ |
13,872,100 |
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Leasing income |
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3,285,000 |
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6,980,200 |
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5,677,100 |
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10,215,200 |
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Merchandise sales |
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656,800 |
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833,000 |
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1,366,600 |
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1,334,400 |
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Franchise fees |
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270,000 |
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245,000 |
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555,000 |
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320,000 |
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Other |
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286,700 |
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347,300 |
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444,700 |
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588,000 |
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Total revenue |
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12,192,400 |
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15,224,800 |
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24,025,800 |
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26,329,700 |
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COST OF MERCHANDISE SOLD |
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633,500 |
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794,200 |
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1,297,800 |
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1,277,100 |
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LEASING EXPENSE |
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325,700 |
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3,340,200 |
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565,500 |
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3,858,900 |
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PROVISION FOR CREDIT LOSSES |
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(14,900 |
) |
(24,100 |
) |
(67,900 |
) |
21,300 |
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SELLING, GENERAL AND ADMINISTRATIVE EXPENSES |
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5,221,600 |
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5,030,400 |
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10,357,700 |
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9,876,300 |
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Income from operations |
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6,026,500 |
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6,084,100 |
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11,872,700 |
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11,296,100 |
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LOSS FROM EQUITY INVESTMENTS |
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(240,700 |
) |
(142,900 |
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(278,100 |
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(219,900 |
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IMPAIRMENT OF INVESTMENT IN NOTES |
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— |
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(252,900 |
) |
— |
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(252,900 |
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INTEREST EXPENSE |
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(122,300 |
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(26,900 |
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(192,100 |
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(58,000 |
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INTEREST AND OTHER INCOME |
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(10,000 |
) |
13,900 |
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36,300 |
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31,100 |
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Income before income taxes |
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5,653,500 |
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5,675,300 |
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11,438,800 |
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10,796,400 |
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PROVISION FOR INCOME TAXES |
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(2,249,100 |
) |
(2,275,100 |
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(4,518,400 |
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(4,369,900 |
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NET INCOME |
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$ |
3,404,400 |
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$ |
3,400,200 |
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$ |
6,920,400 |
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$ |
6,426,500 |
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EARNINGS PER SHARE — BASIC |
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$ |
.67 |
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$ |
.68 |
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$ |
1.37 |
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$ |
1.29 |
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EARNINGS PER SHARE — DILUTED |
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$ |
.65 |
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$ |
.65 |
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$ |
1.31 |
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$ |
1.23 |
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WEIGHTED AVERAGE SHARES OUTSTANDING — BASIC |
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5,056,289 |
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4,980,844 |
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5,054,620 |
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4,985,220 |
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WEIGHTED AVERAGE SHARES OUTSTANDING — DILUTED |
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5,268,245 |
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5,239,443 |
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5,274,223 |
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5,227,468 |
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