Winmark Corporation Announces Year End Results

MINNEAPOLIS--()--Winmark Corporation (Nasdaq: WINA) announced today net income for the year ended December 27, 2014 of $20,066,500 or $3.85 per share diluted, compared to net income of $18,231,600 or $3.48 per share diluted, in 2013. The fourth quarter 2014 net income was $5,610,800 or $1.09 per share diluted, compared to net income of $4,585,800 or $.87 per share diluted, for the same period last year. Revenues for the year ended December 27, 2014 were $61,178,700, up from $55,731,200 in 2013.

John L. Morgan, Chairman and Chief Executive Officer, commented, “We ended the year with a solid fourth quarter that was highlighted by a growing and profitable leasing portfolio, as well as steady growth in our franchising business. We opened 94 stores in 2014 and signed an additional 90 agreements for future store openings across all of our brands. Our newest resale concept, Style Encore, currently has 27 open stores and is being well received by both consumers and franchisees.”

Winmark Corporation creates, supports and finances business. At December 27, 2014, there were 1,092 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 105 retail franchises have been awarded but are not open. In addition, at December 27, 2014, the Company had a lease portfolio equal to $44.0 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)

       
December 27, 2014   December 28, 2013
ASSETS
Current Assets:  
Cash and cash equivalents $ 2,089,700 $ 10,642,600
Marketable securities 466,800 736,500
Receivables, net 1,328,200 1,205,500
Net investment in leases - current 19,831,600 17,239,900
Income tax receivable 4,163,900 166,500
Inventories 93,500 96,700
Prepaid expenses   467,400     587,300  
Total current assets 28,441,100 30,675,000
 
Net investment in leases – long-term 24,188,900 20,301,400
Property and equipment, net 1,420,300 1,382,200
Other assets   677,500     677,500  
$ 54,727,800   $ 53,036,100  
 
LIABILITIES AND SHAREHOLDERS’ EQUITY
Current Liabilities:
Line of credit $ 18,500,000 $ -
Accounts payable 1,955,500 2,441,400
Accrued liabilities 1,759,200 1,233,100
Discounted lease rentals 227,300 424,900
Deferred revenue 2,142,600 2,199,900
Deferred income taxes   4,412,600     4,208,200  
Total current liabilities 28,997,200 10,507,500
 
Long-Term Liabilities:
Discounted lease rentals 25,800 277,400
Deferred revenue 1,347,800 1,180,700
Other liabilities 1,403,200 1,489,000
Deferred income taxes   1,344,300     1,436,800  
Total long-term liabilities 4,121,100 4,383,900
 
Shareholders’ Equity:

Common stock, no par, 10,000,000 shares authorized, 4,998,512 and 5,143,530 shares issued and outstanding

422,400

2,949,500

Accumulated other comprehensive loss (37,100 ) (4,100 )
Retained earnings   21,224,200     35,199,300  
Total shareholders' equity   21,609,500     38,144,700  
$ 54,727,800   $ 53,036,100  
 

WINMARK CORPORATION

CONDENSED STATEMENTS OF OPERATIONS

(unaudited)

       
Quarter Ended   Fiscal Year Ended
December 27, 2014   December 28, 2013   December 27, 2014   December 28, 2013
REVENUE:    
Royalties $ 10,236,600 $ 9,407,100 $ 38,972,400 $ 36,344,100
Leasing income 4,592,300 3,176,000 16,247,300 14,524,100
Merchandise sales 468,700 506,000 2,728,600 2,327,100
Franchise fees 475,000 315,100 1,989,700 1,459,300
Other   410,200     363,200     1,240,700     1,076,600  
Total revenue 16,182,800 13,767,400 61,178,700 55,731,200
 
COST OF MERCHANDISE SOLD 463,600 471,000 2,619,900 2,205,700
 
LEASING EXPENSE 396,400 302,500 1,630,600 1,592,000
 
PROVISION FOR CREDIT LOSSES 36,800 23,000 62,900 (44,700 )
 
SELLING, GENERAL AND ADMINISTRATIVE EXPENSES   5,931,500     5,469,300     23,806,000     22,198,200  
 
Income from operations 9,354,500 7,501,600 33,059,300 29,780,000
 
INTEREST EXPENSE (127,800 ) (33,400 ) (484,500 ) (213,500 )
 
INTEREST AND OTHER INCOME (EXPENSE)   (14,200 )   28,200     14,000     23,400  
 
Income before income taxes 9,212,500 7,496,400 32,588,800 29,589,900
 
PROVISION FOR INCOME TAXES   (3,601,700 )   (2,910,600 )   (12,522,300 )   (11,358,300 )
 
NET INCOME $ 5,610,800   $ 4,585,800   $ 20,066,500   $ 18,231,600  
 
EARNINGS PER SHARE – BASIC $ 1.12   $ .89   $ 3.96   $ 3.60  
 
EARNINGS PER SHARE – DILUTED $ 1.09   $ .87   $ 3.85   $ 3.48  
 
WEIGHTED AVERAGE SHARES OUTSTANDING – BASIC   4,997,831     5,137,415     5,069,391     5,068,975  
 
WEIGHTED AVERAGE SHARES OUTSTANDING – DILUTED   5,159,804     5,297,878     5,216,914     5,241,121  
 

Contacts

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

Contacts

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