UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934
Date of report (Date of earliest event reported): February 25, 2014
Winmark Corporation
(Exact Name of Registrant as Specified in Its Charter)
Minnesota
(State or Other Jurisdiction of Incorporation)
000-22012 |
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41-1622691 |
(Commission File Number) |
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(I.R.S. Employer Identification Number) |
605 Highway 169 North, Suite 400, Minneapolis, Minnesota 55441
(Address of Principal Executive Offices) (Zip Code)
(763) 520-8500
(Registrants Telephone Number, Including Area Code)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
o Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
o Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
o Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
o Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
Item 2.02 Results of Operations and Financial Condition
On February 25, 2014, the Company announced in a press release its results of operations and financial condition for the year ended December 28, 2013. A copy of the press release is attached as Exhibit 99.1 of this Current Report on Form 8-K.
Item 7.01 Regulation FD Disclosure
On February 25, 2014, the Company announced in a press release its results of operations and financial condition for the year ended December 28, 2013. A copy of the press release is attached as Exhibit 99.1 of this Current Report on Form 8-K.
Item 9.01 Financial Statements and Exhibits
(d) Exhibits
99.1 |
|
Press Release dated February 25, 2014 |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
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WINMARK CORPORATION |
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WINMARK CORPORATION | |
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Date: February 25, 2014 |
By: |
/s/ Anthony D. Ishaug |
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Anthony D. Ishaug |
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Chief Financial Officer and Treasurer |
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 Companys 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 Platos 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 $37.5 million.
This press release contains forward-looking statements within the meaning of the safe harbor provisions of Section 21E of the Securities Exchange Act of 1934, as amended (the Exchange Act), relating to future events or the future financial performance of the Company including statements with respect to our ability to finance the growth of our leasing and franchising businesses for the foreseeable future. Such forward-looking statements are only predictions or statements of intention subject to risks and uncertainties and actual events or results could differ materially from those anticipated. Because actual result may differ, shareholders and prospective investors are cautioned not to place undue reliance on such forward-looking statements.
WINMARK CORPORATION
CONDENSED BALANCE SHEETS
(unaudited)
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December 28, 2013 |
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December 29, 2012 |
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ASSETS |
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Current Assets: |
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Cash and cash equivalents |
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$ |
10,642,600 |
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$ |
2,233,400 |
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Marketable securities |
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736,500 |
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85,900 |
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Receivables, net |
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1,205,500 |
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1,237,100 |
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Net investment in leases - current |
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17,239,900 |
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13,461,200 |
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Income tax receivable |
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166,500 |
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1,400,700 |
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Inventories |
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96,700 |
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71,200 |
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Prepaid expenses |
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587,300 |
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445,200 |
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Total current assets |
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30,675,000 |
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18,934,700 |
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Net investment in leases long-term |
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20,301,400 |
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22,697,100 |
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Property and equipment, net |
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1,382,200 |
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1,229,500 |
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Other assets |
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677,500 |
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677,500 |
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$ |
53,036,100 |
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$ |
43,538,800 |
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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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$ |
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$ |
10,800,000 |
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Accounts payable |
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2,441,400 |
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2,203,700 |
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Accrued liabilities |
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1,233,100 |
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1,421,100 |
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Discounted lease rentals |
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424,900 |
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896,800 |
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Deferred revenue |
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2,199,900 |
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1,641,700 |
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Deferred income taxes |
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4,208,200 |
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3,549,900 |
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Total current liabilities |
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10,507,500 |
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20,513,200 |
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Long-Term Liabilities: |
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Discounted lease rentals |
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277,400 |
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177,900 |
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Deferred revenue |
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1,180,700 |
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953,000 |
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Other liabilities |
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1,489,000 |
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1,372,400 |
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Deferred income taxes |
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1,436,800 |
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2,594,300 |
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Total long-term liabilities |
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4,383,900 |
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5,097,600 |
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Shareholders Equity: |
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Common stock, no par, 10,000,000 shares authorized, 5,143,530 and 4,996,459 shares issued and outstanding |
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2,949,500 |
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Accumulated other comprehensive loss |
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(4,100 |
) |
(4,000 |
) | ||
Retained earnings |
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35,199,300 |
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17,932,000 |
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Total shareholders equity |
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38,144,700 |
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17,928,000 |
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$ |
53,036,100 |
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$ |
43,538,800 |
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WINMARK CORPORATION
CONDENSED STATEMENTS OF OPERATIONS
(unaudited)
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Quarter Ended |
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Fiscal Year Ended |
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December 28, 2013 |
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December 29, 2012 |
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December 28, 2013 |
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December 29, 2012 |
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REVENUE: |
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Royalties |
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$ |
9,407,100 |
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$ |
8,599,400 |
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$ |
36,344,100 |
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$ |
33,760,200 |
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Leasing income |
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3,176,000 |
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3,222,000 |
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14,524,100 |
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13,211,800 |
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Merchandise sales |
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506,000 |
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667,500 |
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2,327,100 |
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2,750,700 |
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Franchise fees |
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315,100 |
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325,000 |
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1,459,300 |
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1,291,000 |
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Other |
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363,200 |
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304,300 |
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1,076,600 |
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929,400 |
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Total revenue |
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13,767,400 |
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13,118,200 |
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55,731,200 |
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51,943,100 |
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COST OF MERCHANDISE SOLD |
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471,000 |
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639,300 |
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2,205,700 |
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2,621,500 |
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LEASING EXPENSE |
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302,500 |
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453,600 |
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1,592,000 |
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1,789,800 |
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PROVISION FOR CREDIT LOSSES |
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23,000 |
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22,000 |
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(44,700 |
) |
(47,600 |
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SELLING, GENERAL AND ADMINISTRATIVE EXPENSES |
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5,469,300 |
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5,040,400 |
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22,198,200 |
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20,280,300 |
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Income from operations |
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7,501,600 |
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6,962,900 |
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29,780,000 |
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27,299,100 |
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LOSS FROM EQUITY INVESTMENTS |
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(1,842,500 |
) |
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(2,492,900 |
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IMPAIRMENT OF INVESTMENT IN NOTES |
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(663,700 |
) |
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(1,324,400 |
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INTEREST EXPENSE |
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(33,400 |
) |
(90,000 |
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(213,500 |
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(392,300 |
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INTEREST AND OTHER INCOME |
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28,200 |
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15,400 |
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23,400 |
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66,000 |
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Income before income taxes |
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7,496,400 |
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4,382,100 |
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29,589,900 |
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23,155,500 |
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PROVISION FOR INCOME TAXES |
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(2,910,600 |
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(2,624,100 |
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(11,358,300 |
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(10,217,600 |
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NET INCOME |
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$ |
4,585,800 |
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$ |
1,758,000 |
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$ |
18,231,600 |
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$ |
12,937,900 |
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EARNINGS PER SHARE BASIC |
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$ |
.89 |
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$ |
.35 |
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$ |
3.60 |
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$ |
2.57 |
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EARNINGS PER SHARE DILUTED |
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$ |
.87 |
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$ |
.34 |
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$ |
3.48 |
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$ |
2.47 |
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WEIGHTED AVERAGE SHARES OUTSTANDING BASIC |
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5,137,415 |
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4,986,957 |
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5,068,975 |
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5,027,509 |
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WEIGHTED AVERAGE SHARES OUTSTANDING DILUTED |
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5,297,878 |
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5,179,504 |
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5,241,121 |
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5,237,671 |
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