Attached files

file filename
8-K - 8-K - WINMARK CORPa14-6533_28k.htm

Exhibit 99.1

 

 

Contact:                        Brett D. Heffes
763/520-8500

 

FOR IMMEDIATE RELEASE

 

WINMARK CORPORATION ANNOUNCES YEAR END RESULTS

 

Minneapolis, MN (February 25, 2014) – Winmark Corporation (Nasdaq: WINA) announced today net income for the year ended December 28, 2013 of $18,231,600 or $3.48 per share diluted, compared to net income of $12,937,900 or $2.47 per share diluted, in 2012.  The fourth quarter 2013 net income was $4,585,800 or $.87 per share diluted, compared to net income of $1,758,000 or $.34 per share diluted, for the same period last year.  Revenues for the year ended December 28, 2013 were $55,731,200, up from $51,943,100 in 2012.

 

Earnings growth in the fourth quarter was primarily attributable to the non-cash charges recorded during the fourth quarter of 2012 related to the Company’s long-term investments.  John L. Morgan, Chairman and Chief Executive Officer, commented, “During 2013, we passed an important milestone by opening our 1,000th franchised store location and we ended the year with 112 awarded, but unopened stores.  Additionally, the profitability of our leasing business enjoyed solid growth as we continued to add new customers.”

 

Winmark Corporation creates, supports and finances business. At December 28, 2013, there were 1,005 franchises in operation under the brands Plato’s Closet®, Play It Again Sports®, Once Upon A Child®, Music Go Round® and Style Encore®. An additional 112 retail franchises have been awarded but are not open. In addition, at December 28, 2013, the Company had a lease portfolio equal to $37.5 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)

 

 

 

December 28, 2013

 

December 29, 2012

 

ASSETS

 

Current Assets:

 

 

 

 

 

Cash and cash equivalents

 

$

10,642,600

 

$

2,233,400

 

Marketable securities

 

736,500

 

85,900

 

Receivables, net

 

1,205,500

 

1,237,100

 

Net investment in leases - current

 

17,239,900

 

13,461,200

 

Income tax receivable

 

166,500

 

1,400,700

 

Inventories

 

96,700

 

71,200

 

Prepaid expenses

 

587,300

 

445,200

 

Total current assets

 

30,675,000

 

18,934,700

 

 

 

 

 

 

 

Net investment in leases – long-term

 

20,301,400

 

22,697,100

 

Property and equipment, net

 

1,382,200

 

1,229,500

 

Other assets

 

677,500

 

677,500

 

 

 

$

53,036,100

 

$

43,538,800

 

 

 

 

 

 

 

LIABILITIES AND SHAREHOLDERS’ EQUITY

 

Current Liabilities:

 

 

 

 

 

Line of credit

 

$

 

$

10,800,000

 

Accounts payable

 

2,441,400

 

2,203,700

 

Accrued liabilities

 

1,233,100

 

1,421,100

 

Discounted lease rentals

 

424,900

 

896,800

 

Deferred revenue

 

2,199,900

 

1,641,700

 

Deferred income taxes

 

4,208,200

 

3,549,900

 

Total current liabilities

 

10,507,500

 

20,513,200

 

Long-Term Liabilities:

 

 

 

 

 

Discounted lease rentals

 

277,400

 

177,900

 

Deferred revenue

 

1,180,700

 

953,000

 

Other liabilities

 

1,489,000

 

1,372,400

 

Deferred income taxes

 

1,436,800

 

2,594,300

 

Total long-term liabilities

 

4,383,900

 

5,097,600

 

Shareholders’ Equity:

 

 

 

 

 

Common stock, no par, 10,000,000 shares authorized, 5,143,530 and 4,996,459 shares issued and outstanding

 

2,949,500

 

 

Accumulated other comprehensive loss

 

(4,100

)

(4,000

)

Retained earnings

 

35,199,300

 

17,932,000

 

Total shareholders’ equity

 

38,144,700

 

17,928,000

 

 

 

$

53,036,100

 

$

43,538,800

 

 



 

WINMARK CORPORATION

CONDENSED STATEMENTS OF OPERATIONS

(unaudited)

 

 

 

Quarter Ended

 

Fiscal Year Ended

 

 

 

December 28, 2013

 

December 29, 2012

 

December 28, 2013

 

December 29, 2012

 

REVENUE:

 

 

 

 

 

 

 

 

 

Royalties

 

$

9,407,100

 

$

8,599,400

 

$

36,344,100

 

$

33,760,200

 

Leasing income

 

3,176,000

 

3,222,000

 

14,524,100

 

13,211,800

 

Merchandise sales

 

506,000

 

667,500

 

2,327,100

 

2,750,700

 

Franchise fees

 

315,100

 

325,000

 

1,459,300

 

1,291,000

 

Other

 

363,200

 

304,300

 

1,076,600

 

929,400

 

Total revenue

 

13,767,400

 

13,118,200

 

55,731,200

 

51,943,100

 

 

 

 

 

 

 

 

 

 

 

COST OF MERCHANDISE SOLD

 

471,000

 

639,300

 

2,205,700

 

2,621,500

 

LEASING EXPENSE

 

302,500

 

453,600

 

1,592,000

 

1,789,800

 

PROVISION FOR CREDIT LOSSES

 

23,000

 

22,000

 

(44,700

)

(47,600

)

SELLING, GENERAL AND ADMINISTRATIVE EXPENSES

 

5,469,300

 

5,040,400

 

22,198,200

 

20,280,300

 

Income from operations

 

7,501,600

 

6,962,900

 

29,780,000

 

27,299,100

 

LOSS FROM EQUITY INVESTMENTS

 

 

(1,842,500

)

 

(2,492,900

)

IMPAIRMENT OF INVESTMENT IN NOTES

 

 

(663,700

)

 

(1,324,400

)

INTEREST EXPENSE

 

(33,400

)

(90,000

)

(213,500

)

(392,300

)

INTEREST AND OTHER INCOME

 

28,200

 

15,400

 

23,400

 

66,000

 

Income before income taxes

 

7,496,400

 

4,382,100

 

29,589,900

 

23,155,500

 

PROVISION FOR INCOME TAXES

 

(2,910,600

)

(2,624,100

)

(11,358,300

)

(10,217,600

)

NET INCOME

 

$

4,585,800

 

$

1,758,000

 

$

18,231,600

 

$

12,937,900

 

EARNINGS PER SHARE – BASIC

 

$

.89

 

$

.35

 

$

3.60

 

$

2.57

 

EARNINGS PER SHARE – DILUTED

 

$

.87

 

$

.34

 

$

3.48

 

$

2.47

 

WEIGHTED AVERAGE SHARES OUTSTANDING – BASIC

 

5,137,415

 

4,986,957

 

5,068,975

 

5,027,509

 

WEIGHTED AVERAGE SHARES OUTSTANDING – DILUTED

 

5,297,878

 

5,179,504

 

5,241,121

 

5,237,671