Winmark Corporation Announces First Quarter Results

MINNEAPOLIS--(BUSINESS WIRE)--

Winmark Corporation (Nasdaq: WINA) announced today net income for the quarter ended March 28, 2015 of $6,054,300 (or $1.17 per share diluted) compared to net income of $4,551,900 (or $.86 per share diluted) in the first quarter of 2014.

John L. Morgan, Chairman and Chief Executive Officer, commented, “Both our franchising and leasing businesses exhibited solid top-line growth in the first quarter which led to a 34% increase in operating income. We are pleased with our start to the year.”

Winmark Corporation creates, supports and finances business. At March 28, 2015, there were 1,099 franchises in operation under the brands Plato's Closet®, Once Upon A Child®, Play It Again Sports®, Music Go Round® and Style Encore®. An additional 110 retail franchises have been awarded but are not open. In addition, at March 28, 2015, the Company had a lease portfolio equal to $42.9 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)
		March 28, 2015				December 27, 2014
ASSETS
Current Assets:
Cash and cash equivalents		$	2,160,300			$	2,089,700
Marketable securities			225,200				466,800
Receivables, net			1,189,000				1,328,200
Net investment in leases - current			19,222,500				19,831,600
Income tax receivable			-				4,163,900
Inventories			76,100				93,500
Prepaid expenses			530,100				467,400
Total current assets			23,403,200				28,441,100
Net investment in leases – long-term			23,627,700				24,188,900
Property and equipment, net			1,365,400				1,420,300
Other assets			677,500				677,500
		$	49,073,800			$	54,727,800
LIABILITIES AND SHAREHOLDERS’ EQUITY
Current Liabilities:
Line of credit		$	5,600,000			$	18,500,000
Accounts payable			2,462,800				1,955,500
Income tax payable			1,500,000				-
Accrued liabilities			1,789,100				1,759,200
Discounted lease rentals			186,100				227,300
Deferred revenue			2,300,300				2,142,600
Deferred income taxes			3,928,200				4,412,600
Total current liabilities			17,766,500				28,997,200
Long-Term Liabilities:
Discounted lease rentals			-				25,800
Deferred revenue			1,348,200				1,347,800
Other liabilities			1,343,000				1,403,200
Deferred income taxes			801,400				1,344,300
Total long-term liabilities			3,492,600				4,121,100
Shareholders’ Equity:
Common stock, no par, 10,000,000 shares authorized, 4,999,594 and 4,998,512 shares issued and outstanding			844,400				422,400
Accumulated other comprehensive loss			(8,300	)			(37,100	)
Retained earnings			26,978,600				21,224,200
Total shareholders’ equity			27,814,700				21,609,500
		$	49,073,800			$	54,727,800

WINMARK CORPORATION
CONDENSED STATEMENTS OF OPERATIONS
(unaudited)
		Three Months Ended
		March 28, 2015				March 29, 2014
REVENUE:
Royalties		$	9,726,200			$	8,810,000
Leasing income			10,009,600				4,375,600
Merchandise sales			733,700				788,000
Franchise fees			294,400				349,000
Other			260,200				230,000
Total revenue			21,024,100				14,552,600
COST OF MERCHANDISE SOLD			698,200				754,700
LEASING EXPENSE			4,257,400				306,600
PROVISION FOR CREDIT LOSSES			(69,100	)			38,900
SELLING, GENERAL AND ADMINISTRATIVE EXPENSES			6,163,500				6,017,900
Income from operations			9,974,100				7,434,500
INTEREST EXPENSE			(85,700	)			(62,100	)
INTEREST AND OTHER INCOME (EXPENSE)			(59,100	)			100
Income before income taxes			9,829,300				7,372,500
PROVISION FOR INCOME TAXES			(3,775,000	)			(2,820,600	)
NET INCOME		$	6,054,300			$	4,551,900
EARNINGS PER SHARE - BASIC		$	1.21			$	.88
EARNINGS PER SHARE - DILUTED		$	1.17			$	.86
WEIGHTED AVERAGE SHARES OUTSTANDING - BASIC			4,999,475				5,148,519
WEIGHTED AVERAGE SHARES OUTSTANDING - DILUTED			5,167,466				5,307,946

Winmark Corporation
Brett D. Heffes, 763-520-8500

Source: Winmark Corporation

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