Document and Entity Information
Document and Entity Information - shares | 3 Months Ended | |
Mar. 28, 2020 | Apr. 17, 2020 | |
Document and Entity Information | ||
Entity Registrant Name | WINMARK CORP | |
Entity Central Index Key | 0000908315 | |
Document Type | 10-Q | |
Document Period End Date | Mar. 28, 2020 | |
Amendment Flag | false | |
Current Fiscal Year End Date | --12-26 | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Accelerated Filer | |
Entity Common Stock, Shares Outstanding | 3,655,021 | |
Document Fiscal Year Focus | 2020 | |
Document Fiscal Period Focus | Q1 | |
Entity Small Business | true | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false |
CONSOLIDATED CONDENSED BALANCE
CONSOLIDATED CONDENSED BALANCE SHEETS - USD ($) | Mar. 28, 2020 | Dec. 28, 2019 |
Current Assets: | ||
Cash and cash equivalents | $ 28,347,000 | $ 25,130,300 |
Restricted cash | 50,000 | 50,000 |
Receivables, less allowance for doubtful accounts of $2,100 and $1,900 | 980,500 | 1,669,500 |
Net investment in leases - current | 12,422,200 | 12,800,100 |
Income tax receivable | 497,900 | |
Inventories | 105,200 | 86,000 |
Prepaid expenses | 1,221,900 | 968,100 |
Total current assets | 43,126,800 | 41,201,900 |
Net investment in leases - long-term | 8,921,700 | 12,505,500 |
Property and equipment: | ||
Property and equipment, net | 2,680,700 | 2,772,600 |
Operating lease right of use asset | 3,403,100 | 3,595,200 |
Goodwill | 607,500 | 607,500 |
Other assets | 496,100 | 492,500 |
Deferred income taxes | 655,900 | 667,000 |
Total assets | 59,891,800 | 61,842,200 |
Current Liabilities: | ||
Notes payable, net of unamortized debt issuance costs of $13,900 and $13,900 | 3,986,100 | 3,736,100 |
Accounts payable | 1,071,200 | 1,015,000 |
Income tax payable | 1,635,600 | |
Accrued liabilities | 2,342,000 | 2,783,100 |
Discounted lease rentals | 2,436,300 | 2,680,700 |
Deferred revenue | 1,714,400 | 1,717,000 |
Total current liabilities | 13,185,600 | 11,931,900 |
Long-term Liabilities: | ||
Line of credit | 40,000,000 | |
Notes payable, net of unamortized debt issuance costs of $65,200 and $68,700 | 20,809,700 | 21,868,800 |
Discounted lease rentals | 1,341,400 | 836,900 |
Deferred revenue | 7,765,600 | 7,858,500 |
Operating lease liabilities | 5,625,100 | 5,846,100 |
Other liabilities | 1,012,600 | 1,051,700 |
Total long-term liabilities | 76,554,400 | 37,462,000 |
Shareholders' Equity (Deficit): | ||
Common stock, no par value, 10,000,000 shares authorized, 3,650,753 and 3,947,858 shares issued and outstanding | 11,929,300 | |
Retained earnings (accumulated deficit) | (29,848,200) | 519,000 |
Total shareholders' equity (deficit) | (29,848,200) | 12,448,300 |
Total liabilities and shareholders' equity (deficit) | $ 59,891,800 | $ 61,842,200 |
CONSOLIDATED CONDENSED BALANC_2
CONSOLIDATED CONDENSED BALANCE SHEETS (Parenthetical) - USD ($) | Mar. 28, 2020 | Dec. 28, 2019 |
CONSOLIDATED CONDENSED BALANCE SHEETS | ||
Receivables, allowance for doubtful accounts | $ 2,100 | $ 1,900 |
Unamortized debt issuance costs - Current | 13,900 | 13,900 |
Unamortized debt issuance costs - Noncurrent | $ 65,200 | $ 68,700 |
Common stock, par value (in dollars per share) | $ 0 | $ 0 |
Common stock, shares authorized | 10,000,000 | 10,000,000 |
Common stock, shares issued | 3,650,753 | 3,947,858 |
Common stock, shares outstanding | 3,650,753 | 3,947,858 |
CONSOLIDATED CONDENSED STATEMEN
CONSOLIDATED CONDENSED STATEMENTS OF OPERATIONS - USD ($) | 3 Months Ended | |
Mar. 28, 2020 | Mar. 30, 2019 | |
Revenue: | ||
Leasing income | $ 5,871,200 | $ 5,155,300 |
Total revenue | 18,600,000 | 18,331,200 |
Leasing expense | 1,416,200 | 698,700 |
Provision for credit losses | 615,400 | 10,100 |
Selling, general and administrative expenses | 5,748,900 | 6,984,400 |
Income from operations | 10,101,800 | 10,066,500 |
Interest expense | (525,200) | (442,200) |
Interest and other income (expense) | 5,900 | (300) |
Income before income taxes | 9,582,500 | 9,624,000 |
Provision for income taxes | (2,265,500) | (2,351,800) |
Net income | $ 7,317,000 | $ 7,272,200 |
Earnings per share - basic (in dollars per share) | $ 1.97 | $ 1.86 |
Earnings per share - diluted (in dollars per share) | $ 1.87 | $ 1.73 |
Weighted average shares outstanding - basic | 3,711,597 | 3,906,895 |
Weighted average shares outstanding - diluted | 3,911,751 | 4,198,454 |
Royalties | ||
Revenue: | ||
Revenue | $ 11,172,500 | $ 11,761,400 |
Merchandise sales | ||
Revenue: | ||
Revenue | 754,100 | 611,000 |
Cost of merchandise sold | 717,700 | 571,500 |
Franchise fees | ||
Revenue: | ||
Revenue | 387,400 | 391,800 |
Other | ||
Revenue: | ||
Revenue | $ 414,800 | $ 411,700 |
CONSOLIDATED CONDENSED STATEM_2
CONSOLIDATED CONDENSED STATEMENTS OF SHAREHOLDERS' EQUITY (DEFICIT) - USD ($) | Common Stock | Retained Earnings (Accumulated Deficit). | Total |
BALANCE at Dec. 29, 2018 | $ 4,425,600 | $ (9,234,100) | $ (4,808,500) |
BALANCE (in shares) at Dec. 29, 2018 | 3,907,686 | ||
Shareholders’ Equity (Deficit) | |||
Repurchase of common stock | $ (5,081,000) | (18,947,100) | (24,028,100) |
Repurchase of common stock (in shares) | (150,000) | ||
Stock options exercised | $ 156,600 | 156,600 | |
Stock options exercised (in shares) | 1,500 | ||
Compensation expense relating to stock options | $ 498,800 | 498,800 | |
Cash dividends | (586,100) | (586,100) | |
Comprehensive income | 7,272,200 | 7,272,200 | |
BALANCE at Mar. 30, 2019 | (21,495,100) | (21,495,100) | |
BALANCE (in shares) at Mar. 30, 2019 | 3,759,186 | ||
BALANCE at Dec. 28, 2019 | $ 11,929,300 | 519,000 | $ 12,448,300 |
BALANCE (in shares) at Dec. 28, 2019 | 3,947,858 | 3,947,858 | |
Shareholders’ Equity (Deficit) | |||
Repurchase of common stock | $ (12,215,500) | (36,772,000) | $ (48,987,500) |
Repurchase of common stock (in shares) | (300,000) | ||
Stock options exercised | $ 145,900 | 145,900 | |
Stock options exercised (in shares) | 2,895 | ||
Compensation expense relating to stock options | $ 140,300 | 140,300 | |
Cash dividends | (912,200) | (912,200) | |
Comprehensive income | 7,317,000 | 7,317,000 | |
BALANCE at Mar. 28, 2020 | $ (29,848,200) | $ (29,848,200) | |
BALANCE (in shares) at Mar. 28, 2020 | 3,650,753 | 3,650,753 |
CONSOLIDATED CONDENSED STATEM_3
CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS - USD ($) | 3 Months Ended | |
Mar. 28, 2020 | Mar. 30, 2019 | |
OPERATING ACTIVITIES: | ||
Net Income | $ 7,317,000 | $ 7,272,200 |
Adjustments to reconcile net income to net cash provided by operating activities: | ||
Depreciation and amortization | 123,100 | 80,100 |
Provision for credit losses | 615,400 | 10,100 |
Compensation expense related to stock options | 140,300 | 498,800 |
Deferred income taxes | 11,100 | 600 |
Deferred initial direct costs | (8,500) | (14,200) |
Amortization of deferred initial direct costs | 37,200 | 209,500 |
Operating lease right of use asset amortization | 192,100 | 102,300 |
Tax benefits on exercised stock options | 87,000 | 12,100 |
Change in operating assets and liabilities: | ||
Receivables | 689,000 | 97,600 |
Principal collections on lease receivables | 4,988,400 | 4,662,800 |
Income tax receivable/payable | 2,046,500 | 2,218,100 |
Inventories | (19,200) | (6,200) |
Prepaid expenses | (253,800) | (52,500) |
Other assets | (3,600) | (14,100) |
Accounts payable | 56,200 | 366,000 |
Accrued and other liabilities | (674,200) | (1,105,000) |
Rents received in advance and security deposits | (885,300) | 6,500 |
Deferred revenue | (95,500) | (178,700) |
Net cash provided by operating activities | 14,363,200 | 14,166,000 |
INVESTING ACTIVITIES: | ||
Purchase of property and equipment | (31,200) | (122,700) |
Purchase of equipment for lease contracts | (1,706,000) | (1,717,400) |
Net cash provided by (used for) investing activities | (1,737,200) | (1,840,100) |
FINANCING ACTIVITIES: | ||
Proceeds from borrowings on line of credit | 45,700,000 | 14,000,000 |
Payments on line of credit | (5,700,000) | (2,500,000) |
Payments on notes payable | (812,500) | (812,500) |
Repurchases of common stock | (48,987,500) | (24,028,100) |
Proceeds from exercises of stock options | 145,900 | 156,600 |
Dividends paid | (912,200) | (586,100) |
Proceeds from discounted lease rentals | 1,157,000 | |
Net cash used for financing activities | (9,409,300) | (13,770,100) |
NET INCREASE (DECREASE) IN CASH, CASH EQUIVALENTS AND RESTRICTED CASH | 3,216,700 | (1,444,200) |
Cash, cash equivalents and restricted cash, beginning of period | 25,180,300 | 2,576,000 |
Cash, cash equivalents and restricted cash, end of period | $ 28,397,000 | $ 1,131,800 |
CONSOLIDATED CONDENSED STATEM_4
CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS - Supplemental Disclosures - USD ($) | 3 Months Ended | |
Mar. 28, 2020 | Mar. 30, 2019 | |
SUPPLEMENTAL DISCLOSURES: | ||
Cash paid for interest | $ 460,600 | $ 417,000 |
Cash paid for income taxes | 120,900 | 121,100 |
Reconciliation of cash, cash equivalents and restricted cash: | ||
Cash and cash equivalents | 28,347,000 | 1,066,800 |
Restricted cash | 50,000 | 65,000 |
Total cash, cash equivalents and restricted cash | $ 28,397,000 | $ 1,131,800 |
Management's Interim Financial
Management's Interim Financial Statement Representation: | 3 Months Ended |
Mar. 28, 2020 | |
Management's Interim Financial Statement Representation: | |
Management's Interim Financial Statement Representation: | WINMARK CORPORATION AND SUBSIDIARIES NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS 1. Management’s Interim Financial Statement Representation: The accompanying consolidated condensed financial statements have been prepared by Winmark Corporation and subsidiaries (the Company), without audit, pursuant to the rules and regulations of the Securities and Exchange Commission. The Company has a 52/53 week year which ends on the last Saturday in December. The information in the consolidated condensed financial statements includes normal recurring adjustments and reflects all adjustments which are, in the opinion of management, necessary for a fair presentation of such financial statements. The consolidated condensed financial statements and notes are presented in accordance with accounting principles generally accepted in the United States of America for interim financial information and with the instructions for Form 10-Q, and therefore do not contain certain information included in the Company’s annual consolidated financial statements and notes. This report should be read in conjunction with the audited consolidated financial statements and the notes thereto included in the Company’s latest Annual Report on Form 10-K. Revenues and operating results for the three months ended March 28, 2020 are not necessarily indicative of the results to be expected for the full year. Reclassifications Certain reclassifications of previously reported amounts have been made to conform to the current year presentation. Such reclassifications did not impact net income or shareholders’ equity (deficit) as previously reported. |
Organization and Business_
Organization and Business: | 3 Months Ended |
Mar. 28, 2020 | |
Organization and Business: | |
Organization and Business: | 2. Organization and Business: The Company offers licenses to operate franchises using the service marks Plato’s Closet®, Once Upon A Child®, Play It Again Sports®, Style Encore® and Music Go Round®. The Company uses its Winmark Franchise Partners® mark in connection with its strategic consulting and corporate development activities. The Company also operates both middle market and small-ticket equipment leasing businesses under the Winmark Capital® and Wirth Business Credit® marks. |
Recent Accounting Pronouncement
Recent Accounting Pronouncements: | 3 Months Ended |
Mar. 28, 2020 | |
Recent Accounting Pronouncements: | |
Recent Accounting Pronouncements: | 3. Recent Accounting Pronouncements: Recently Issued Accounting Pronouncements In June 2016, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2016-13, Financial Instruments – Credit Losses (Topic 326): Measurement of Credit Losses of Financial Instruments , which changes the methodology for measuring credit losses on financial instruments and the timing of when such losses are recorded. This guidance was to be effective for reporting periods beginning after December 15, 2019, with early adoption permitted. In November 2019, the FASB issued ASU 2019-10, Financial Instruments – Credit Losses (Topic 326), Derivatives and Hedging (Topic 815), and Leases (Topic 842) Effective Dates, which deferred the effective dates for the Company, as a smaller reporting company, until fiscal year 2023. The Company currently plans to adopt the guidance at the beginning of fiscal 2023. The Company is continuing to assess the impact of the standard on its consolidated financial statements. |
Contract Liabilities_
Contract Liabilities: | 3 Months Ended |
Mar. 28, 2020 | |
Contract Liabilities: | |
Contract Liabilities: | 4. Contract Liabilities: The Company’s contract liabilities for its franchise revenues consist of deferred revenue associated with franchise fees and software license fees. The table below presents the activity of the current and noncurrent deferred franchise revenue during the first three months of 2020 and 2019, respectively: March 28, 2020 March 30, 2019 Balance at beginning of period $ 9,575,500 $ 10,177,300 Franchise and software license fees collected from franchisees, excluding amount earned as revenue during the period 372,500 292,000 Fees earned that were included in the balance at the beginning of the period (468,000) (470,700) Balance at end of period $ 9,480,000 $ 9,998,600 The following table illustrates future estimated revenue to be recognized for the remainder of 2020 and full fiscal years thereafter related to performance obligations that are unsatisfied (or partially unsatisfied) as of March 28, 2020. Contract Liabilities expected to be recognized in Amount 2020 $ 1,259,000 2021 1,612,900 2022 1,468,000 2023 1,296,700 2024 1,099,000 Thereafter 2,744,400 $ 9,480,000 |
Fair Value Measurements_
Fair Value Measurements: | 3 Months Ended |
Mar. 28, 2020 | |
Fair Value Measurements: | |
Fair Value Measurements: | 5. Fair Value Measurements: The Company defines fair value as the price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. The Company uses three levels of inputs to measure fair value: · Level 1 – quoted prices in active markets for identical assets and liabilities. · Level 2 – observable inputs other than quoted prices in active markets for identical assets and liabilities. · Level 3 – unobservable inputs in which there is little or no market data available, which require the reporting entity to develop its own assumptions. Due to their nature, the carrying value of cash equivalents, receivables, payables and debt obligations approximates fair value. |
Investment in Leasing Operation
Investment in Leasing Operations: | 3 Months Ended |
Mar. 28, 2020 | |
Investment in Leasing Operations: | |
Investment in Leasing Operations: | 6. Investment in Leasing Operations: Investment in leasing operations consists of the following: March 28, 2020 December 28, 2019 Direct financing and sales-type leases: Minimum lease payments receivable $ 22,936,500 $ 26,001,200 Estimated unguaranteed residual value of equipment 3,974,000 4,109,800 Unearned lease income, net of initial direct costs deferred (2,677,600) (4,039,400) Security deposits (2,990,300) (3,852,000) Equipment installed on leases not yet commenced 1,283,700 3,437,800 Total investment in direct financing and sales-type leases 22,526,300 25,657,400 Allowance for credit losses (1,197,500) (580,600) Net investment in direct financing and sales-type leases 21,328,800 25,076,800 Operating leases: Operating lease assets 408,600 820,700 Less accumulated depreciation and amortization (393,500) (591,900) Net investment in operating leases 15,100 228,800 Total net investment in leasing operations $ 21,343,900 $ 25,305,600 As of March 28, 2020, the $21.3 million total net investment in leases consists of $12.4 million classified as current and $8.9 million classified as long-term. As of December 28, 2019, the $25.3 million total net investment in leases consists of $12.8 million classified as current and $12.5 million classified as long-term. As of March 28, 2020, there were no customers with leased assets greater than 10% of the Company’s total assets. Future minimum lease payments receivable under lease contracts and the amortization of unearned lease income, net of initial direct costs deferred, is as follows for the remainder of fiscal 2020 and the full fiscal years thereafter as of March 28, 2020: Direct Financing and Sales-Type Leases Minimum Lease Income Fiscal Year Payments Receivable Amortization 2020 $ 12,473,400 $ 1,824,700 2021 8,578,400 764,500 2022 1,826,600 84,100 2023 33,400 2,500 2024 13,900 1,400 Thereafter 10,800 400 $ 22,936,500 $ 2,677,600 The activity in the allowance for credit losses for leasing operations during the first three months of 2020 and 2019, respectively, is as follows: March 28, 2020 March 30, 2019 Balance at beginning of period $ 580,600 $ 861,200 Provisions charged to expense 615,400 10,100 Recoveries 1,500 4,200 Deductions for amounts written-off — (224,100) Balance at end of period $ 1,197,500 $ 651,400 The Company’s investment in direct financing and sales-type leases (“Investment In Leases”) and allowance for credit losses by loss evaluation methodology are as follows: March 28, 2020 December 28, 2019 Investment Allowance for Investment Allowance for In Leases Credit Losses In Leases Credit Losses Collectively evaluated for loss potential $ 22,526,300 1,197,500 $ 25,657,400 $ 580,600 Individually evaluated for loss potential — — — — Total $ 22,526,300 $ 1,197,500 $ 25,657,400 $ 580,600 The Company’s key credit quality indicator for its investment in direct financing and sales-type leases is the status of the lease, defined as accruing or non-accrual. Leases that are accruing income are considered to have a lower risk of loss. Non-accrual leases are those that the Company believes have a higher risk of loss. The following table sets forth information regarding the Company’s accruing and non-accrual leases. Delinquent balances are determined based on the contractual terms of the lease. March 28, 2020 0-60 Days 61-90 Days Over 90 Days Delinquent Delinquent Delinquent and and Accruing and Accruing Accruing Non-Accrual Total Middle-Market $ 21,238,900 $ — $ — $ 146,700 $ 21,385,600 Small-Ticket 1,140,700 — — — 1,140,700 Total Investment in Leases $ 22,379,600 $ — $ — $ 146,700 $ 22,526,300 December 28, 2019 0-60 Days 61-90 Days Over 90 Days Delinquent Delinquent Delinquent and and Accruing and Accruing Accruing Non-Accrual Total Middle-Market $ 24,546,300 $ — $ — $ $ 24,546,300 Small-Ticket 1,111,100 — — — 1,111,100 Total Investment in Leases $ 25,657,400 $ — $ — $ — $ 25,657,400 The Company leases high-technology and other business-essential equipment to its leasing customers. Upon expiration of the initial term or extended lease term, depending on the structure of the lease, the customer may return the equipment, renew the lease for an additional term, or purchase the equipment. Due to the uncertainty of such outcome at the end of the lease term, the lease as recorded at commencement represents only the current terms of the agreement. As a lessor, the Company’s leases do not contain non-lease components. The residual values reflect the estimated amounts to be received at lease termination from sales or other dispositions of leased equipment to unrelated parties. The leased equipment residual values are based on the Company’s best estimate. The Company’s risk management strategy for its residual value includes the contractual obligations of customer to maintain, service, and insure the leased equipment, the use of third party remarketers as well as the analytical review of historical asset dispositions. Leasing income as presented on the Consolidated Condensed Statements of Operations consists of the following: Three Months Ended Three Months Ended March 28, 2020 March 30, 2019 Interest income on direct financing and sales-type leases $ 1,128,600 $ 2,182,500 Selling profit (loss) at commencement of sales-type leases 313,200 873,500 Operating lease income 435,400 638,300 Income on sales of equipment under lease 3,261,300 1,225,600 Other 732,700 235,400 Leasing income $ 5,871,200 $ 5,155,300 |
Earnings Per Share_
Earnings Per Share: | 3 Months Ended |
Mar. 28, 2020 | |
Earnings Per Share: | |
Earnings Per Share: | 7. Earnings Per Share: The following table sets forth the presentation of shares outstanding used in the calculation of basic and diluted earnings per share (“EPS”): Three Months Ended March 28, 2020 March 30, 2019 Denominator for basic EPS — weighted average common shares 3,711,597 3,906,895 Dilutive shares associated with option plans 200,154 291,559 Denominator for diluted EPS — weighted average common shares and dilutive potential common shares 3,911,751 4,198,454 Options excluded from EPS calculation — anti-dilutive 2,192 5,280 |
Shareholders' Equity (Deficit)_
Shareholders' Equity (Deficit): | 3 Months Ended |
Mar. 28, 2020 | |
Shareholders' Equity (Deficit): | |
Shareholders' Equity (Deficit): | 8. Shareholders’ Equity (Deficit): Dividends On January 29, 2020, the Company’s Board of Directors approved the payment of a $0.25 per share quarterly cash dividend to shareholders of record at the close of business on February 12, 2020, which was paid on March 2, 2020. Repurchase of Common Stock In December 2019, the Company’s Board of Directors authorized the repurchase of up to 300,000 shares of our common stock for a price of $163.00 per share through a tender offer (the “2020 Tender Offer”). The 2020 Tender Offer began on the date of the announcement, December 17, 2019 and expired on January 16, 2020. Upon expiration, the Company purchased 300,000 shares for a total purchase price of approximately $49.0 million, including fees and expenses related to the Tender Offer. The 2020 Tender Offer was financed in part by net borrowings of $19.2 million under the Line of Credit. (See Note 9 – “Debt”). Under a previous Board of Directors’ authorization, as of March 28, 2020, the Company has the ability to repurchase an additional 130,604 shares of its common stock. Repurchases may be made from time to time at prevailing prices, subject to certain restrictions on volume, pricing and timing. Stock Option Plans and Stock-Based Compensation Stock option activity under the Company’s option plans as of March 28, 2020 was as follows: Weighted Average Remaining Number of Weighted Average Contractual Life Shares Exercise Price (years) Intrinsic Value Outstanding, December 28, 2019 479,558 $ 101.78 5.79 $ 45,283,200 Exercised (2,895) 50.40 Forfeited (23,000) 148.16 Outstanding, March 28, 2020 453,663 $ 99.76 5.42 $ 16,967,200 Exercisable, March 28, 2020 341,838 $ 83.42 4.46 $ 16,657,100 No options were granted during the three months ended March 28, 2020 or the three months ended March 30, 2019. All unexercised options at March 28, 2020 have an exercise price equal to the fair market value on the date of the grant. Compensation expense of $140,300 and $498,800 relating to the vested portion of the fair value of stock options granted was expensed to “Selling, General and Administrative Expenses” in the first three months of 2020 and 2019, respectively. As of March 28, 2020, the Company had $2.9 million of total unrecognized compensation expense related to stock options that is expected to be recognized over the remaining weighted average vesting period of approximately 2.4 years. |
Debt_
Debt: | 3 Months Ended |
Mar. 28, 2020 | |
Debt: | |
Debt: | 9. Debt: Line of Credit As of March 28, 2020, there was $40.0 million in borrowings outstanding under the Company’s revolving credit facility with CIBC Bank USA and BMO Harris Bank N.A. (the “Line of Credit”) bearing interest ranging from 3.25% to 3.60% leaving $5.0 million available for additional borrowings. The Line of Credit has been and will continue to be used for general corporate purposes. During the first quarter of 2020, the Line of Credit was used to finance in part the 2020 Tender Offer (as indicated above). The Line of Credit, which terminates in July 2021, is secured by a lien against substantially all of the Company’s assets, contains customary financial conditions and covenants, and requires maintenance of minimum levels of debt service coverage and tangible net worth and maximum levels of leverage (all as defined within the Line of Credit). As of March 28, 2020, the Company was in compliance with all of its financial covenants. Notes Payable As of March 28, 2020, the Company had $15.5 million in principal outstanding from the $25.0 million Series A notes issued in May 2015 and $9.4 million in principal outstanding from the $12.5 million Series B notes issued in August 2017 under its Note Agreement with Prudential Investment Management, Inc., its affiliates and managed accounts (“Prudential”). The final maturity of the Series A and Series B notes is 10 years from the issuance date. For the Series A notes, interest at a rate of 5.50% per annum on the outstanding principal balance is payable quarterly, along with required prepayments of the principal of $500,000 quarterly for the first five years, and $750,000 quarterly thereafter until the principal is paid in full. For the Series B notes, interest at a rate of 5.10% per annum on the outstanding principal balance is payable quarterly, along with required prepayments of the principal of $312,500 quarterly until the principal is paid in full. The Series A and Series B notes may be prepaid, at the option of the Company, in whole or in part (in a minimum amount of $1.0 million), but prepayments require payment of a Yield Maintenance Amount, as defined in the Note Agreement. The Company’s obligations under the Note Agreement are secured by a lien against substantially all of the Company’s assets (as the notes rank pari passu with the Line of Credit), and the Note Agreement contains customary financial conditions and covenants, and requires maintenance of minimum levels of fixed charge coverage and tangible net worth and maximum levels of leverage (all as defined within the Note Agreement). As of March 28, 2020, the Company was in compliance with all of its financial covenants. In connection with the Note Agreement, the Company incurred debt issuance costs, of which unamortized amounts are presented as a direct deduction from the carrying amount of the related liability. |
Discounted Lease Rentals_
Discounted Lease Rentals: | 3 Months Ended |
Mar. 28, 2020 | |
Discounted Lease Rentals: | |
Discounted Lease Rentals: | 10. Discounted Lease Rentals: The Company utilized certain lease receivables and underlying equipment as collateral to borrow from financial institutions at a weighted average rate of 6.43% at March 28, 2020 on a non-recourse basis. As of March 28, 2020, $2.4 million of the $3.8 million liability balance is current. |
Operating Leases_
Operating Leases: | 3 Months Ended |
Mar. 28, 2020 | |
Operating Leases: | |
Operating Leases: | 11. Operating Leases: As of March 28, 2020, the Company leases its Minnesota corporate headquarters in a facility with an operating lease that expires in December 2029. The weighted average remaining lease term for these leases is 9.75 years and the weighted average discount rate is 5.5%. The Company recognized $300,400 and $365,600 of rent expense for the periods ended March 28, 2020 and March 30, 2019, respectively. Maturities of operating lease liabilities is as follows for the remainder of fiscal 2020 and full fiscal years thereafter as of March 28, 2020: Operating Lease Liabilities expected to be recognized in Amount 2020 $ 529,400 2021 723,100 2022 742,900 2023 763,300 2024 784,400 Thereafter 4,258,600 Total lease payments 7,801,700 Less imputed interest (1,767,400) Present value of lease liabilities $ 6,034,300 Of the $6.0 million operating lease liability outstanding at March 28, 2020, $0.4 million is included in Accrued liabilities in the Current liabilities section of the Consolidated Condensed Balance Sheets. Supplemental cash flow information related to our operating leases is as follows for the period ended March 28, 2020: Three Months Ended Three Months Ended March 28, 2020 March 30, 2019 Cash paid for amounts included in the measurement of lease liabilities: Operating cash flow outflow from operating leases $ 174,300 $ 172,100 |
Segment Reporting_
Segment Reporting: | 3 Months Ended |
Mar. 28, 2020 | |
Segment Reporting: | |
Segment Reporting: | 12. Segment Reporting: The Company currently has two reportable business segments, franchising and leasing. The franchising segment franchises value-oriented retail store concepts that buy, sell, trade and consign merchandise, as well as provides strategic consulting services related to franchising. The leasing segment includes (i) Winmark Capital Corporation, a middle-market equipment leasing business and (ii) Wirth Business Credit, Inc., a small ticket financing business. Segment reporting is intended to give financial statement users a better view of how the Company manages and evaluates its businesses. The Company’s internal management reporting is the basis for the information disclosed for its business segments and includes allocation of shared-service costs. Segment assets are those that are directly used in or identified with segment operations, including cash, restricted cash, accounts receivable, prepaid expenses, inventory, property and equipment, investment in leasing operations and goodwill. Unallocated assets include corporate cash and cash equivalents, current and deferred tax amounts, operating lease right of use assets and other corporate assets. Inter-segment balances and transactions have been eliminated. The following tables summarize financial information by segment and provide a reconciliation of segment contribution to operating income: Three Months Ended March 28, 2020 March 30, 2019 Revenue: Franchising $ 12,728,800 $ 13,175,900 Leasing 5,871,200 5,155,300 Total revenue $ 18,600,000 $ 18,331,200 Reconciliation to operating income: Franchising segment contribution $ 7,211,400 $ 7,498,000 Leasing segment contribution 2,890,400 2,568,500 Total operating income $ 10,101,800 $ 10,066,500 Depreciation and amortization: Franchising $ 72,600 $ 62,500 Leasing 50,500 17,600 Total depreciation and amortization $ 123,100 $ 80,100 As of March 28, 2020 December 28, 2019 Identifiable assets: Franchising $ 3,206,800 $ 3,736,000 Leasing 22,731,300 26,596,700 Unallocated 33,953,700 31,509,500 Total $ 59,891,800 $ 61,842,200 |
Subsequent Events
Subsequent Events | 3 Months Ended |
Mar. 28, 2020 | |
Subsequent Events: | |
Subsequent Events: | 13. Subsequent Events: The Company is closely monitoring the impact of the coronavirus (COVID-19) pandemic on all aspects of its business, including that of its franchisees and leasing customers. The COVID-19 pandemic adversely affected the Company’s financial results and business operations in the Company’s first fiscal quarter ended March 28, 2020, and uncertainties regarding the pandemic continue to result in serious economic disruptions including the temporary closing of many of our franchisee’s stores. Governmental authorities in the United States and Canada have taken and may continue to take measures in order to combat the spread of disease including forced closures of retail stores and other business establishments. The full impact of the COVID-19 outbreak is unknown, resulting in a high degree of uncertainty for potentially extended periods of time. At this time, neither the duration nor scope of the disruption can be predicted, therefore, the negative impact on our financial position and operating results cannot be reasonably estimated. |
Contract Liabilities_ (Tables)
Contract Liabilities: (Tables) | 3 Months Ended |
Mar. 28, 2020 | |
Contract Liabilities: | |
Schedule of activity of current and noncurrent deferred franchise revenue | March 28, 2020 March 30, 2019 Balance at beginning of period $ 9,575,500 $ 10,177,300 Franchise and software license fees collected from franchisees, excluding amount earned as revenue during the period 372,500 292,000 Fees earned that were included in the balance at the beginning of the period (468,000) (470,700) Balance at end of period $ 9,480,000 $ 9,998,600 |
Schedule of future estimated revenue to be recognized related to performance obligations | Contract Liabilities expected to be recognized in Amount 2020 $ 1,259,000 2021 1,612,900 2022 1,468,000 2023 1,296,700 2024 1,099,000 Thereafter 2,744,400 $ 9,480,000 |
Investment in Leasing Operati_2
Investment in Leasing Operations: (Tables) | 3 Months Ended |
Mar. 28, 2020 | |
Investment in Leasing Operations: | |
Schedule of investment in leasing operations | March 28, 2020 December 28, 2019 Direct financing and sales-type leases: Minimum lease payments receivable $ 22,936,500 $ 26,001,200 Estimated unguaranteed residual value of equipment 3,974,000 4,109,800 Unearned lease income, net of initial direct costs deferred (2,677,600) (4,039,400) Security deposits (2,990,300) (3,852,000) Equipment installed on leases not yet commenced 1,283,700 3,437,800 Total investment in direct financing and sales-type leases 22,526,300 25,657,400 Allowance for credit losses (1,197,500) (580,600) Net investment in direct financing and sales-type leases 21,328,800 25,076,800 Operating leases: Operating lease assets 408,600 820,700 Less accumulated depreciation and amortization (393,500) (591,900) Net investment in operating leases 15,100 228,800 Total net investment in leasing operations $ 21,343,900 $ 25,305,600 |
Schedule of future minimum lease payments receivable under lease contracts and the amortization of unearned lease income, net of initial direct costs deferred | Direct Financing and Sales-Type Leases Minimum Lease Income Fiscal Year Payments Receivable Amortization 2020 $ 12,473,400 $ 1,824,700 2021 8,578,400 764,500 2022 1,826,600 84,100 2023 33,400 2,500 2024 13,900 1,400 Thereafter 10,800 400 $ 22,936,500 $ 2,677,600 |
Schedule of activity in the allowance for credit losses for leasing operations | March 28, 2020 March 30, 2019 Balance at beginning of period $ 580,600 $ 861,200 Provisions charged to expense 615,400 10,100 Recoveries 1,500 4,200 Deductions for amounts written-off — (224,100) Balance at end of period $ 1,197,500 $ 651,400 |
Schedule of investment in direct financing and sales-type leases (investment in leases) and allowance for credit losses by loss evaluation methodology | March 28, 2020 December 28, 2019 Investment Allowance for Investment Allowance for In Leases Credit Losses In Leases Credit Losses Collectively evaluated for loss potential $ 22,526,300 1,197,500 $ 25,657,400 $ 580,600 Individually evaluated for loss potential — — — — Total $ 22,526,300 $ 1,197,500 $ 25,657,400 $ 580,600 |
Schedule of information regarding accruing and non-accrual leases | March 28, 2020 0-60 Days 61-90 Days Over 90 Days Delinquent Delinquent Delinquent and and Accruing and Accruing Accruing Non-Accrual Total Middle-Market $ 21,238,900 $ — $ — $ 146,700 $ 21,385,600 Small-Ticket 1,140,700 — — — 1,140,700 Total Investment in Leases $ 22,379,600 $ — $ — $ 146,700 $ 22,526,300 December 28, 2019 0-60 Days 61-90 Days Over 90 Days Delinquent Delinquent Delinquent and and Accruing and Accruing Accruing Non-Accrual Total Middle-Market $ 24,546,300 $ — $ — $ $ 24,546,300 Small-Ticket 1,111,100 — — — 1,111,100 Total Investment in Leases $ 25,657,400 $ — $ — $ — $ 25,657,400 |
Schedule of components of leasing income | Three Months Ended Three Months Ended March 28, 2020 March 30, 2019 Interest income on direct financing and sales-type leases $ 1,128,600 $ 2,182,500 Selling profit (loss) at commencement of sales-type leases 313,200 873,500 Operating lease income 435,400 638,300 Income on sales of equipment under lease 3,261,300 1,225,600 Other 732,700 235,400 Leasing income $ 5,871,200 $ 5,155,300 |
Earnings Per Share_ (Tables)
Earnings Per Share: (Tables) | 3 Months Ended |
Mar. 28, 2020 | |
Earnings Per Share: | |
Schedule of shares outstanding used in the calculation of basic and diluted earnings per share | Three Months Ended March 28, 2020 March 30, 2019 Denominator for basic EPS — weighted average common shares 3,711,597 3,906,895 Dilutive shares associated with option plans 200,154 291,559 Denominator for diluted EPS — weighted average common shares and dilutive potential common shares 3,911,751 4,198,454 Options excluded from EPS calculation — anti-dilutive 2,192 5,280 |
Shareholders' Equity (Deficit_2
Shareholders' Equity (Deficit): (Tables) | 3 Months Ended |
Mar. 28, 2020 | |
Shareholders' Equity (Deficit): | |
Schedule of stock option activity | Weighted Average Remaining Number of Weighted Average Contractual Life Shares Exercise Price (years) Intrinsic Value Outstanding, December 28, 2019 479,558 $ 101.78 5.79 $ 45,283,200 Exercised (2,895) 50.40 Forfeited (23,000) 148.16 Outstanding, March 28, 2020 453,663 $ 99.76 5.42 $ 16,967,200 Exercisable, March 28, 2020 341,838 $ 83.42 4.46 $ 16,657,100 |
Operating Leases_ (Tables)
Operating Leases: (Tables) | 3 Months Ended |
Mar. 28, 2020 | |
Operating Leases: | |
Schedule of maturities of operating lease liabilities | Operating Lease Liabilities expected to be recognized in Amount 2020 $ 529,400 2021 723,100 2022 742,900 2023 763,300 2024 784,400 Thereafter 4,258,600 Total lease payments 7,801,700 Less imputed interest (1,767,400) Present value of lease liabilities $ 6,034,300 |
Schedule of supplemental cash flow information related to operating leases | Three Months Ended Three Months Ended March 28, 2020 March 30, 2019 Cash paid for amounts included in the measurement of lease liabilities: Operating cash flow outflow from operating leases $ 174,300 $ 172,100 |
Segment Reporting_ (Tables)
Segment Reporting: (Tables) | 3 Months Ended |
Mar. 28, 2020 | |
Segment Reporting: | |
Schedule of financial information by segment and reconciliation of segment contribution to operating income | Three Months Ended March 28, 2020 March 30, 2019 Revenue: Franchising $ 12,728,800 $ 13,175,900 Leasing 5,871,200 5,155,300 Total revenue $ 18,600,000 $ 18,331,200 Reconciliation to operating income: Franchising segment contribution $ 7,211,400 $ 7,498,000 Leasing segment contribution 2,890,400 2,568,500 Total operating income $ 10,101,800 $ 10,066,500 Depreciation and amortization: Franchising $ 72,600 $ 62,500 Leasing 50,500 17,600 Total depreciation and amortization $ 123,100 $ 80,100 As of March 28, 2020 December 28, 2019 Identifiable assets: Franchising $ 3,206,800 $ 3,736,000 Leasing 22,731,300 26,596,700 Unallocated 33,953,700 31,509,500 Total $ 59,891,800 $ 61,842,200 |
Management's Interim Financia_2
Management's Interim Financial Statement Representation: (Details) | 3 Months Ended |
Mar. 28, 2020item | |
Minimum | |
Number of Weeks in Fiscal Year | 52 |
Maximum | |
Number of Weeks in Fiscal Year | 53 |
Contract Liabilities - Activity
Contract Liabilities - Activity (Details) - USD ($) | 3 Months Ended | |
Mar. 28, 2020 | Mar. 30, 2019 | |
Activity of the current and noncurrent deferred franchise revenue | ||
Balance at beginning of period | $ 9,575,500 | $ 10,177,300 |
Franchise and software license fees collected from franchisees, excluding amount earned as revenue during the period | 372,500 | 292,000 |
Fees earned that were included in the balance at the beginning of the period | (468,000) | (470,700) |
Balance at end of period | $ 9,480,000 | $ 9,998,600 |
Contract Liabilities - Performa
Contract Liabilities - Performance Obligations (Details) | Mar. 28, 2020USD ($) |
Future estimated revenue to be recognized related to performance obligations | |
Revenue, remaining performance obligation | $ 9,480,000 |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2020-03-29 | |
Future estimated revenue to be recognized related to performance obligations | |
Duration of expected recognition period for remaining performance obligation | 9 months |
Revenue, remaining performance obligation | $ 1,259,000 |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2020-12-27 | |
Future estimated revenue to be recognized related to performance obligations | |
Duration of expected recognition period for remaining performance obligation | 1 year |
Revenue, remaining performance obligation | $ 1,612,900 |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2021-12-26 | |
Future estimated revenue to be recognized related to performance obligations | |
Duration of expected recognition period for remaining performance obligation | 1 year |
Revenue, remaining performance obligation | $ 1,468,000 |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2023-01-01 | |
Future estimated revenue to be recognized related to performance obligations | |
Duration of expected recognition period for remaining performance obligation | 1 year |
Revenue, remaining performance obligation | $ 1,296,700 |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2023-12-31 | |
Future estimated revenue to be recognized related to performance obligations | |
Duration of expected recognition period for remaining performance obligation | 1 year |
Revenue, remaining performance obligation | $ 1,099,000 |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2024-12-29 | |
Future estimated revenue to be recognized related to performance obligations | |
Duration of expected recognition period for remaining performance obligation | |
Revenue, remaining performance obligation | $ 2,744,400 |
Investment in Leasing Operati_3
Investment in Leasing Operations: Summary of Leasing Operations (Details) - USD ($) | Mar. 28, 2020 | Dec. 28, 2019 |
Direct financing and sales-type leases: | ||
Minimum lease payments receivable | $ 22,936,500 | $ 26,001,200 |
Estimated unguaranteed residual value of equipment | 3,974,000 | 4,109,800 |
Unearned lease income net of initial direct costs deferred | (2,677,600) | (4,039,400) |
Security deposits | (2,990,300) | (3,852,000) |
Equipment installed on leases not yet commenced | 1,283,700 | 3,437,800 |
Total investment in direct financing and sales-type leases | 22,526,300 | 25,657,400 |
Allowance for credit losses | (1,197,500) | (580,600) |
Net investment in direct financing and sales-type leases | 21,328,800 | 25,076,800 |
Operating leases: | ||
Operating lease assets | 408,600 | 820,700 |
Less accumulated depreciation and amortization | (393,500) | (591,900) |
Net investment in operating leases | 15,100 | 228,800 |
Total net investment in leasing operations | 21,343,900 | 25,305,600 |
Net investment in leases - current | 12,422,200 | 12,800,100 |
Net investment in leases - long-term | $ 8,921,700 | $ 12,505,500 |
Investment in Leasing Operati_4
Investment in Leasing Operations: Minimum Lease Payments Receivable (Details) - USD ($) | Mar. 28, 2020 | Dec. 28, 2019 |
Direct Financing and Sales-Type Leases, Minimum Lease Payments Receivable | ||
2020 | $ 12,473,400 | |
2021 | 8,578,400 | |
2022 | 1,826,600 | |
2023 | 33,400 | |
2024 | 13,900 | |
Thereafter | 10,800 | |
Total | 22,936,500 | $ 26,001,200 |
Direct Financing and Sales-Type Leases, Income Amortization | ||
2020 | 1,824,700 | |
2021 | 764,500 | |
2022 | 84,100 | |
2023 | 2,500 | |
2024 | 1,400 | |
Thereafter | 400 | |
Total | $ 2,677,600 |
Investment in Leasing Operati_5
Investment in Leasing Operations: Credit Losses (Details) - USD ($) | 3 Months Ended | ||
Mar. 28, 2020 | Mar. 30, 2019 | Dec. 28, 2019 | |
Activity in the allowance for credit losses for leasing operations | |||
Balance at beginning of period | $ 580,600 | $ 861,200 | |
Provision for credit losses | 615,400 | 10,100 | |
Recoveries | 1,500 | 4,200 | |
Deductions for amounts written-off | (224,100) | ||
Balance at end of period | 1,197,500 | $ 651,400 | |
Investment In Leases | |||
Total investment in direct financing and sales-type leases | 22,526,300 | $ 25,657,400 | |
Allowance for Credit Losses | |||
Total | 1,197,500 | 580,600 | |
Investment in leases | |||
Investment In Leases | |||
Collectively evaluated for loss potential | 22,526,300 | 25,657,400 | |
Total investment in direct financing and sales-type leases | 22,526,300 | 25,657,400 | |
Allowance for Credit Losses | |||
Collectively evaluated for loss potential | 1,197,500 | 580,600 | |
Total | $ 1,197,500 | $ 580,600 |
Investment in Leasing Operati_6
Investment in Leasing Operations: Investment Aging (Details) - USD ($) | Mar. 28, 2020 | Dec. 28, 2019 |
Investment in leasing operations | ||
0-60 Days Delinquent and Accruing | $ 22,379,600 | $ 25,657,400 |
Non-Accrual | 146,700 | |
Total investment in direct financing and sales-type leases | 22,526,300 | 25,657,400 |
Middle-Market | ||
Investment in leasing operations | ||
0-60 Days Delinquent and Accruing | 21,238,900 | 24,546,300 |
Non-Accrual | 146,700 | |
Total investment in direct financing and sales-type leases | 21,385,600 | 24,546,300 |
Small-Ticket | ||
Investment in leasing operations | ||
0-60 Days Delinquent and Accruing | 1,140,700 | 1,111,100 |
Total investment in direct financing and sales-type leases | $ 1,140,700 | $ 1,111,100 |
Investment in Leasing Operati_7
Investment in Leasing Operations: Leasing Income (Details) - USD ($) | 3 Months Ended | |
Mar. 28, 2020 | Mar. 30, 2019 | |
Leasing income | ||
Interest income on direct financing and sales-type leases | $ 1,128,600 | $ 2,182,500 |
Selling profit (loss) at commencement of sales-type leases | 313,200 | 873,500 |
Operating lease income | 435,400 | 638,300 |
Income on sales of equipment under lease | 3,261,300 | 1,225,600 |
Other | 732,700 | 235,400 |
Leasing income | $ 5,871,200 | $ 5,155,300 |
Earnings Per Share_ (Details)
Earnings Per Share: (Details) - shares | 3 Months Ended | |
Mar. 28, 2020 | Mar. 30, 2019 | |
Earnings Per Share: | ||
Denominator for basic EPS - weighted average common shares | 3,711,597 | 3,906,895 |
Dilutive shares associated with option plans | 200,154 | 291,559 |
Denominator for diluted EPS - weighted average common shares and dilutive potential common shares | 3,911,751 | 4,198,454 |
Options excluded from EPS calculation - anti-dilutive (in shares) | 2,192 | 5,280 |
Shareholders' Equity (Deficit_3
Shareholders' Equity (Deficit): Dividends and Repurchase of Common Stock (Details) - USD ($) | Jan. 16, 2020 | Jan. 23, 2019 | Dec. 31, 2019 | Mar. 28, 2020 | Mar. 30, 2019 |
Repurchase of Common Stock | |||||
Aggregate purchase price of shares repurchased (in dollars) | $ 48,987,500 | $ 24,028,100 | |||
Borrowing from Line of Credit for Tender Offer | 45,700,000 | 14,000,000 | |||
Dividends | |||||
Cash dividends declared and paid (in dollars per share) | $ 0.25 | ||||
Aggregate quarterly cash dividends declared and paid | $ 912,200 | $ 586,100 | |||
2020 Tender Offer | |||||
Repurchase of Common Stock | |||||
Shares authorized for repurchase per tender offer | 300,000 | ||||
Price per share of common stock per tender offer | $ 163 | ||||
Number of shares repurchased | 300,000 | ||||
Purchase price of shares per tender offer | $ 49,000,000 | ||||
Borrowing from Line of Credit for Tender Offer | $ 19,200,000 | ||||
Common Stock Repurchase Program | |||||
Repurchase of Common Stock | |||||
Number of additional shares that can be repurchased | 130,604 |
Shareholders' Equity (Deficit_4
Shareholders' Equity (Deficit): Stock Option Plans and Stock-Based Compensation (Details) - Stock options - USD ($) | 3 Months Ended | 12 Months Ended | |
Mar. 28, 2020 | Mar. 30, 2019 | Dec. 28, 2019 | |
Number of Shares | |||
Outstanding at the beginning of the period (in shares) | 479,558 | ||
Granted (in shares) | 0 | 0 | |
Exercised (in shares) | (2,895) | ||
Forfeited (in shares) | (23,000) | ||
Outstanding at the end of the period (in shares) | 453,663 | 479,558 | |
Exercisable at the end of the period (in shares) | 341,838 | ||
Weighted Average Exercise Price | |||
Outstanding at the beginning of the period (in dollars per share) | $ 101.78 | ||
Exercised (in dollars per share) | 50.40 | ||
Forfeited (in dollars per share) | 148.16 | ||
Outstanding at the end of the period (in dollars per share) | 99.76 | $ 101.78 | |
Exercisable at the end of the period (in dollars per share) | $ 83.42 | ||
Weighted Average Remaining Contractual Life (years) | |||
Outstanding | 5 years 5 months 1 day | 5 years 9 months 15 days | |
Exercisable at the end of the period | 4 years 5 months 16 days | ||
Intrinsic Value | |||
Outstanding | $ 16,967,200 | $ 45,283,200 | |
Exercisable at the end of the period | 16,657,100 | ||
Additional disclosures | |||
Compensation expense | 140,300 | $ 498,800 | |
Total unrecognized compensation expense | $ 2,900,000 | ||
Weighted average period for recognition of unrecognized compensation expense | 2 years 4 months 24 days |
Debt_ Line of Credit (Details)
Debt: Line of Credit (Details) - Line of Credit $ in Millions | Mar. 28, 2020USD ($) |
Line of Credit | |
Borrowings outstanding | $ 40 |
Line of credit available for additional borrowings | $ 5 |
Minimum | |
Line of Credit | |
Interest rate (as a percent) | 3.25% |
Maximum | |
Line of Credit | |
Interest rate (as a percent) | 3.60% |
Debt_ Notes Payable (Details)
Debt: Notes Payable (Details) - Prudential Investment Management, Inc - USD ($) | 3 Months Ended | ||
Mar. 28, 2020 | Aug. 31, 2017 | May 31, 2015 | |
Notes Payable | |||
Notes Payable | |||
Minimum prepayment | $ 1,000,000 | ||
Series A Notes | |||
Notes Payable | |||
Principal amount outstanding | $ 15,500,000 | ||
Note payable, face amount | $ 25,000,000 | ||
Term of notes payable | 10 years | ||
Interest rate (as a percent) | 5.50% | ||
Quarterly principal payment, first five years | $ 500,000 | ||
Quarterly principal payment, thereafter | 750,000 | ||
Series B Notes | |||
Notes Payable | |||
Principal amount outstanding | $ 9,400,000 | ||
Note payable, face amount | $ 12,500,000 | ||
Term of notes payable | 10 years | ||
Interest rate (as a percent) | 5.10% | ||
Quarterly principal payment | $ 312,500 |
Discounted Lease Rentals_ (Deta
Discounted Lease Rentals: (Details) - USD ($) | Mar. 28, 2020 | Dec. 28, 2019 |
Discounted Lease Rentals | ||
Discounted lease rentals, current | $ 2,436,300 | $ 2,680,700 |
Discounted lease rentals | $ 3,800,000 | |
Secured Debt. | ||
Discounted Lease Rentals | ||
Weighted average interest rate on a non-recourse basis (as a percent) | 6.43% |
Operating Leases_ (Details)
Operating Leases: (Details) - USD ($) | 3 Months Ended | |
Mar. 28, 2020 | Mar. 30, 2019 | |
Operating Leases: | ||
Weighted average remaining lease term | 9 years 9 months | |
Weighted average discount rate (as a percent) | 5.50% | |
Rent expense | $ 300,400 | $ 365,600 |
Maturities of operating lease liabilities: | ||
2020 | 529,400 | |
2021 | 723,100 | |
2022 | 742,900 | |
2023 | 763,300 | |
2024 | 784,400 | |
Thereafter | 4,258,600 | |
Total | 7,801,700 | |
Less imputed interest | (1,767,400) | |
Present value of lease liabilities | 6,034,300 | |
Operating lease liability | ||
Operating lease liability, current | $ 400,000 | |
Operating Lease, Liability, Current, Statement of Financial Position [Extensible List] | Accrued Liabilities, Current | |
Cash paid for amounts included in the measurement of lease liabilities: | ||
Operating cash flow outflow from operating leases | $ 174,300 | $ 172,100 |
Segment Reporting_ (Details)
Segment Reporting: (Details) | 3 Months Ended | ||
Mar. 28, 2020USD ($)item | Mar. 30, 2019USD ($) | Dec. 28, 2019USD ($) | |
Segment Reporting | |||
Number of reportable business segments | item | 2 | ||
Total revenue | $ 18,600,000 | $ 18,331,200 | |
Total operating income | 10,101,800 | 10,066,500 | |
Total depreciation and amortization | 123,100 | 80,100 | |
Total identifiable assets | 59,891,800 | $ 61,842,200 | |
Operating | Franchising | |||
Segment Reporting | |||
Total revenue | 12,728,800 | 13,175,900 | |
Total operating income | 7,211,400 | 7,498,000 | |
Total depreciation and amortization | 72,600 | 62,500 | |
Total identifiable assets | 3,206,800 | 3,736,000 | |
Operating | Leasing | |||
Segment Reporting | |||
Total revenue | 5,871,200 | 5,155,300 | |
Total operating income | 2,890,400 | 2,568,500 | |
Total depreciation and amortization | 50,500 | $ 17,600 | |
Total identifiable assets | 22,731,300 | 26,596,700 | |
Unallocated | |||
Segment Reporting | |||
Total identifiable assets | $ 33,953,700 | $ 31,509,500 |