Business Wire | Apr 14, 2021 11:28AM EDT

Winmark Corporation Announces First Quarter Results

Apr. 14, 2021

MINNEAPOLIS--(BUSINESS WIRE)--Apr. 14, 2021--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(r), Once Upon A Child(r), Play It Again Sports(r), Style Encore(r) and Music Go Round(r). 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 sharesauthorized, 3,700,723 and 3,756,028 shares - 9,281,800 issued and outstanding

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

View source version on businesswire.com: https://www.businesswire.com/news/home/20210414005643/en/

CONTACT: Brett D. Heffes 763/520-8500