EX-99.1 2 a13-16777_1ex99d1.htm EX-99.1

Exhibit 99.1

 

 

Contact:

John L. Morgan

 

763/520-8500

 

FOR IMMEDIATE RELEASE

 

WINMARK CORPORATION ANNOUNCES

SECOND QUARTER RESULTS

 

Minneapolis, MN (July 17, 2013)  —  Winmark Corporation (Nasdaq: WINA) announced today net income for the quarter ended June 29, 2013 of $4,336,900 (or $.83 per share diluted) compared to net income of $3,404,400 (or $.65 per share diluted) in the second quarter of 2012.

 

Earnings growth in the second quarter was due to a higher store count when compared to last year as well as increased sales from franchisees.  Additionally, the profitability of the leasing business improved due to the size and performance of the Company’s lease portfolio.  John Morgan, Chairman and CEO commented “Your company and its employees worked very hard during the quarter in preparation for our first Style Encore store, which is scheduled to open in the third quarter.  We have awarded a total of eight franchise agreements to launch this exciting new women’s resale concept.”

 

Winmark Corporation creates, supports and finances business.  At June 29, 2013, there were 986 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 67 retail franchises have been awarded but are not open.  In addition, at June 29, 2013, the Company had a lease portfolio equal to $37.2 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)

 

 

 

June 29, 2013

 

December 29, 2012

 

ASSETS

 

Current Assets:

 

 

 

 

 

Cash and cash equivalents

 

$

2,041,300

 

$

2,233,400

 

Marketable securities

 

84,500

 

85,900

 

Receivables, net

 

1,230,400

 

1,237,100

 

Net investment in leases - current

 

16,149,700

 

13,461,200

 

Income tax receivable

 

856,800

 

1,400,700

 

Inventories

 

76,800

 

71,200

 

Prepaid expenses

 

388,800

 

445,200

 

Total current assets

 

20,828,300

 

18,934,700

 

Net investment in leases — long-term

 

21,043,900

 

22,697,100

 

Property and equipment, net

 

1,166,000

 

1,229,500

 

Other assets

 

677,500

 

677,500

 

 

 

$

43,715,700

 

$

43,538,800

 

 

 

 

 

 

 

LIABILITIES AND SHAREHOLDERS’ EQUITY

 

Current Liabilities:

 

 

 

 

 

Line of credit

 

$

2,000,000

 

$

10,800,000

 

Accounts payable

 

1,258,600

 

2,203,700

 

Accrued liabilities

 

1,983,800

 

1,286,300

 

Discounted lease rentals

 

906,400

 

896,800

 

Rents received in advance

 

62,000

 

134,800

 

Deferred revenue

 

1,569,700

 

1,641,700

 

Deferred income taxes

 

3,555,600

 

3,549,900

 

Total current liabilities

 

11,336,100

 

20,513,200

 

Long-Term Liabilities:

 

 

 

 

 

Discounted lease rentals

 

445,200

 

177,900

 

Rents received in advance

 

119,700

 

117,700

 

Deferred revenue

 

956,100

 

953,000

 

Other liabilities

 

1,184,600

 

1,254,700

 

Deferred income taxes

 

2,659,600

 

2,594,300

 

Total long-term liabilities

 

5,365,200

 

5,097,600

 

Shareholders’ Equity:

 

 

 

 

 

Common stock, no par, 10,000,000 shares authorized, 5,044,484 and 4,996,459 shares issued and outstanding

 

1,142,900

 

 

Accumulated other comprehensive loss

 

(4,900

)

(4,000

)

Retained earnings

 

25,876,400

 

17,932,000

 

Total shareholders’ equity

 

27,014,400

 

17,928,000

 

 

 

$

43,715,700

 

$

43,538,800

 

 



 

WINMARK CORPORATION

CONDENSED STATEMENTS OF OPERATIONS

(Unaudited)

 

 

 

Quarter Ended

 

Six Months Ended

 

 

 

June 29, 2013

 

June 30, 2012

 

June 29, 2013

 

June 30, 2012

 

REVENUE:

 

 

 

 

 

 

 

 

 

Royalties

 

$

8,608,200

 

$

7,693,900

 

$

17,083,100

 

$

15,982,400

 

Leasing income

 

4,130,200

 

3,285,000

 

7,538,000

 

5,677,100

 

Merchandise sales

 

557,400

 

656,800

 

1,223,100

 

1,366,600

 

Franchise fees

 

389,600

 

270,000

 

804,200

 

555,000

 

Other

 

338,100

 

286,700

 

523,500

 

444,700

 

Total revenue

 

14,023,500

 

12,192,400

 

27,171,900

 

24,025,800

 

COST OF MERCHANDISE SOLD

 

524,400

 

633,500

 

1,165,500

 

1,297,800

 

LEASING EXPENSE

 

610,500

 

325,700

 

890,200

 

565,500

 

PROVISION FOR CREDIT LOSSES

 

(51,700

)

(14,900

)

(37,900

)

(67,900

)

SELLING, GENERAL AND ADMINISTRATIVE EXPENSES

 

5,879,100

 

5,221,600

 

11,417,000

 

10,357,700

 

Income from operations

 

7,061,200

 

6,026,500

 

13,737,100

 

11,872,700

 

LOSS FROM EQUITY INVESTMENTS

 

 

(240,700

)

 

(278,100

)

INTEREST EXPENSE

 

(55,100

)

(122,300

)

(144,600

)

(192,100

)

INTEREST AND OTHER INCOME (EXPENSE)

 

(100

)

(10,000

)

(10,300

)

36,300

 

Income before income taxes

 

7,006,000

 

5,653,500

 

13,582,200

 

11,438,800

 

PROVISION FOR INCOME TAXES

 

(2,669,100

)

(2,249,100

)

(5,187,800

)

(4,518,400

)

NET INCOME

 

$

4,336,900

 

$

3,404,400

 

$

8,394,400

 

$

6,920,400

 

EARNINGS PER SHARE — BASIC

 

$

.86

 

$

.67

 

$

1.68

 

$

1.37

 

EARNINGS PER SHARE — DILUTED

 

$

.83

 

$

.65

 

$

1.61

 

$

1.31

 

WEIGHTED AVERAGE SHARES OUTSTANDING — BASIC

 

5,024,284

 

5,056,289

 

5,010,803

 

5,054,620

 

WEIGHTED AVERAGE SHARES OUTSTANDING — DILUTED

 

5,200,592

 

5,268,245

 

5,201,644

 

5,274,223