Winmark Corporation (Nasdaq: WINA) announced today net income for the quarter ended September 26, 2009 of $1,779,500, or $.33 per share diluted, compared to net income of $1,350,800, or $.24 per share diluted, in 2008. For the nine months ended September 26, 2009, net income was $4,388,500, or $.82 per share diluted, compared to net income of $3,218,600, or $.58 per share diluted, for the same period last year.
John L. Morgan, Chairman and Chief Executive Officer, stated, "Our franchising business performed well in the third quarter as consumers continued to respond to our value-oriented retail brands. Our equipment leasing business has been negatively impacted by the current economy, however, tight controls are firmly in place as we anticipate an economic turn around."
Winmark Corporation creates, supports and finances business. At September 26, 2009, there were 874 franchises in operation under the brands Play It Again Sports(R), Once Upon A Child(R), Plato's Closet(R) and Music Go Round(R) and there were 37 territories in operation under the Wirth Business Credit(R) brand. An additional 36 retail franchises have been awarded but are not open. In addition, at September 26, 2009, the Company had loans and leases equal to $41.1 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)
September 26, 2009 December 27, 2008
ASSETS
Current Assets:
Cash and cash equivalents $ 11,542,300 $ 2,140,000
Marketable securities 1,191,900 438,300
Current investments 1,500,000 500,000
Receivables, less allowance for doubtful accounts of
$36,300 and $52,700 1,669,000 2,064,100
Net investment in leases - current 16,577,900 17,379,700
Income tax receivable - 792,200
Inventories 110,800 141,500
Prepaid expenses 394,600 1,018,800
Deferred income taxes - 216,900
Total current assets 32,986,500 24,691,500
Net investment in leases - long-term 22,515,800 28,035,300
Long-term investments 2,771,900 3,833,300
Long-term receivables, net 22,000 39,200
Property and equipment, net 1,936,600 512,200
Other assets 677,500 677,500
Deferred income taxes - 320,800
$ 60,910,300 $ 58,109,800
LIABILITIES AND SHAREHOLDERS' EQUITY
Current Liabilities:
Current line of credit $ 3,941,600 $ 4,313,200
Current renewable subordinated notes 8,655,200 8,052,400
Accounts payable 1,133,200 1,108,200
Income tax payable 650,700 -
Accrued liabilities 2,424,100 2,905,400
Current discounted lease rentals 1,049,100 1,012,900
Current rents received in advance 273,700 141,600
Current deferred revenue 910,500 993,600
Deferred income taxes 368,300 -
Total current liabilities 19,406,400 18,527,300
Long-term line of credit 6,308,500 9,276,300
Long-term renewable subordinated notes 13,952,700 12,788,700
Long-term discounted lease rentals 741,500 1,298,500
Long-term rents received in advance 1,446,800 1,696,400
Long-term deferred revenue 699,500 631,400
Other long-term liabilities 1,327,000 -
Deferred income taxes 490,700 -
Shareholders' Equity:
Common stock, no par, 10,000,000 shares authorized,
5,255,284 and 5,433,610 shares issued and outstanding - 427,500
Accumulated other comprehensive income (loss) 80,700 (38,500 )
Retained earnings 16,456,500 13,502,200
Total shareholders' equity 16,537,200 13,891,200
$ 60,910,300 $ 58,109,800
WINMARK CORPORATION
CONDENSED STATEMENTS OF OPERATIONS
(Unaudited)
Quarter Ended Nine Months Ended
September 26, September 27, September 26, September 27,
2009 2008 2009 2008
REVENUE:
Royalties $ 6,405,200 $ 5,740,600 $ 17,646,600 $ 16,376,000
Leasing income 2,271,600 2,060,400 7,116,400 5,920,000
Merchandise sales 593,800 777,600 1,898,500 2,685,400
Franchise fees 419,600 431,900 804,600 1,345,500
Other 134,600 117,700 446,800 396,000
Total revenue 9,824,800 9,128,200 27,912,900 26,722,900
COST OF MERCHANDISE SOLD 569,700 730,800 1,816,700 2,565,400
LEASING EXPENSE 548,000 471,000 1,743,300 1,420,000
PROVISION FOR CREDIT LOSSES 853,600 571,800 1,877,500 1,226,100
SELLING, GENERAL AND ADMINISTRATIVE EXPENSES 4,666,800 4,744,100 14,379,900 15,068,400
Income from operations 3,186,700 2,610,500 8,095,500 6,443,000
LOSS FROM EQUITY INVESTMENTS (57,300 ) (145,200 ) (61,400 ) (281,700 )
INTEREST EXPENSE (317,300 ) (309,600 ) (1,009,800 ) (998,200 )
INTEREST AND OTHER INCOME 178,700 114,500 351,400 246,300
Income before income taxes 2,990,800 2,270,200 7,375,700 5,409,400
PROVISION FOR INCOME TAXES (1,211,300 ) (919,400 ) (2,987,200 ) (2,190,800 )
NET INCOME $ 1,779,500 $ 1,350,800 $ 4,388,500 $ 3,218,600
EARNINGS PER SHARE - BASIC $ .34 $ .24 $ .82 $ .58
EARNINGS PER SHARE - DILUTED $ .33 $ .24 $ .82 $ .58
WEIGHTED AVERAGE SHARES OUTSTANDING - BASIC 5,282,349 5,522,188 5,335,869 5,519,265
WEIGHTED AVERAGE SHARES OUTSTANDING - DILUTED 5,329,697 5,548,461 5,357,259 5,548,473
Winmark Corporation John L. Morgan, 763-520-8500
Copyright Business Wire 2009 
