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Winmark Corporation Announces First Quarter Results

Winmark Corporation (Nasdaq: WINA) announced today net income for the quarter ended March 27, 2021 of $9,311,100 or $2.40 per share diluted compared to net income of $7,317,000 or $1.87 per share diluted in 2020.

“The resiliency of our business model combined with the improving execution of our franchisees led to exceptional first quarter results,” commented Brett D. Heffes, Chairman and Chief Executive Officer.

Winmark Corporation creates, supports and finances business. At March 27, 2021, there were 1,264 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 32 retail franchises have been awarded but are not open.

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)

 

 

 

 

 

 

 

 

 

 

March 27, 2021

 

December 26, 2020

ASSETS

Current Assets:

 

 

 

 

 

 

Cash and cash equivalents

 

$

7,959,900

 

 

$

6,659,000

 

Restricted cash

 

 

25,000

 

 

 

25,000

 

Receivables, net

 

 

2,096,900

 

 

 

1,581,900

 

Net investment in leases - current

 

 

8,156,900

 

 

 

8,687,500

 

Income tax receivable

 

 

 

 

 

221,200

 

Inventories

 

 

110,200

 

 

 

106,600

 

Prepaid expenses

 

 

839,900

 

 

 

995,200

 

Total current assets

 

 

19,188,800

 

 

 

18,276,400

 

 

 

 

 

 

 

 

Net investment in leases – long-term

 

 

2,706,900

 

 

 

4,573,600

 

Property and equipment, net

 

 

2,253,300

 

 

 

2,332,800

 

Operating lease right of use asset

 

 

3,172,100

 

 

 

3,226,300

 

Goodwill

 

 

607,500

 

 

 

607,500

 

Other assets

 

 

438,500

 

 

 

435,900

 

Deferred income taxes

 

 

2,330,600

 

 

 

1,890,700

 

 

 

$

30,697,700

 

 

$

31,343,200

 

 

 

 

 

 

 

 

LIABILITIES AND SHAREHOLDERS’ EQUITY (DEFICIT)

Current Liabilities:

 

 

 

 

 

 

Notes payable, net

 

$

4,236,100

 

 

$

4,236,100

 

Accounts payable

 

 

1,399,300

 

 

 

1,769,600

 

Income tax payable

 

 

3,159,200

 

 

 

 

Accrued liabilities

 

 

2,223,500

 

 

 

2,624,000

 

Discounted lease rentals

 

 

959,200

 

 

 

1,096,600

 

Deferred revenue

 

 

1,647,700

 

 

 

1,657,400

 

Total current liabilities

 

 

13,625,000

 

 

 

11,383,700

 

Long-Term Liabilities:

 

 

 

 

 

 

Notes payable, net

 

 

16,573,600

 

 

 

17,632,700

 

Discounted lease rentals

 

 

382,200

 

 

 

574,000

 

Deferred revenue

 

 

6,975,700

 

 

 

7,050,900

 

Operating lease liabilities

 

 

5,176,900

 

 

 

5,307,400

 

Other liabilities

 

 

768,500

 

 

 

773,200

 

Total long-term liabilities

 

 

29,876,900

 

 

 

31,338,200

 

Shareholders’ Equity (Deficit):

 

 

 

 

 

 

Common stock, no par, 10,000,000 shares authorized, 3,700,723 and 3,756,028 shares issued and outstanding

 

 

 

 

 

9,281,800

 

Retained earnings (accumulated deficit)

 

 

(12,804,200

)

 

 

(20,660,500

)

Total shareholders’ equity (deficit)

 

 

(12,804,200

)

 

 

(11,378,700

)

 

 

$

30,697,700

 

 

$

31,343,200

 

WINMARK CORPORATION

CONDENSED STATEMENTS OF OPERATIONS

(Unaudited)

 

 

 

 

 

 

 

 

Three Months Ended

 

 

March 27, 2021

March 28, 2020

Revenue:

 

 

 

 

 

Royalties

 

$

14,048,800

 

$

11,172,500

 

Leasing income

 

 

3,237,000

 

 

5,871,200

 

Merchandise sales

 

 

592,400

 

 

754,100

 

Franchise fees

 

 

359,000

 

 

387,400

 

Other

 

 

421,700

 

 

414,800

 

Total revenue

 

 

18,658,900

 

 

18,600,000

 

Cost of merchandise sold

 

 

558,800

 

 

717,700

 

Leasing expense

 

 

389,500

 

 

1,416,200

 

Provision for credit losses

 

 

(48,700

)

 

615,400

 

Selling, general and administrative expenses

 

 

5,102,300

 

 

5,748,900

 

Income from operations

 

 

12,657,000

 

 

10,101,800

 

Interest expense

 

 

(318,100

)

 

(525,200

)

Interest and other income

 

 

6,800

 

 

5,900

 

Income before income taxes

 

 

12,345,700

 

 

9,582,500

 

Provision for income taxes

 

 

(3,034,600

)

 

(2,265,500

)

Net income

 

$

9,311,100

 

$

7,317,000

 

Earnings per share - basic

 

$

2.49

 

$

1.97

 

Earnings per share - diluted

 

$

2.40

 

$

1.87

 

Weighted average shares outstanding - basic

 

 

3,736,676

 

 

3,711,597

 

Weighted average shares outstanding - diluted

 

 

3,874,227

 

 

3,911,751

 

 

Contacts

Brett D. Heffes

763/520-8500

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