Document and Entity Information
Document and Entity Information - shares | 9 Months Ended | |
Sep. 25, 2021 | Oct. 12, 2021 | |
Document and Entity Information | ||
Entity Registrant Name | WINMARK CORPORATION | |
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Sep. 25, 2021 | |
Document Transition Report | false | |
Entity File Number | 000-22012 | |
Entity Incorporation, State or Country Code | MN | |
Entity Tax Identification Number | 41-1622691 | |
Entity Address, Address Line One | 605 Highway 169 North, SuiteĀ 400 | |
Entity Address, City or Town | Minneapolis | |
Entity Address, State or Province | MN | |
Entity Address, Postal Zip Code | 55441 | |
City Area Code | 763 | |
Local Phone Number | 520-8500 | |
Title of 12(b) Security | Common Stock, no par value per share | |
Trading Symbol | WINA | |
Security Exchange Name | NASDAQ | |
Amendment Flag | false | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Non-accelerated Filer | |
Entity Small Business | true | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 3,626,338 | |
Current Fiscal Year End Date | --12-25 | |
Entity Central Index Key | 0000908315 | |
Document Fiscal Year Focus | 2021 | |
Document Fiscal Period Focus | Q3 |
CONSOLIDATED CONDENSED BALANCE
CONSOLIDATED CONDENSED BALANCE SHEETS - USD ($) | Sep. 25, 2021 | Dec. 26, 2020 |
Current Assets: | ||
Cash and cash equivalents | $ 37,569,100 | $ 6,659,000 |
Restricted cash | 15,000 | 25,000 |
Receivables, less allowance for doubtful accounts of $1,200 and $800 | 1,394,900 | 1,581,900 |
Net investment in leases - current | 3,884,600 | 8,687,500 |
Income tax receivable | 188,200 | 221,200 |
Inventories | 408,600 | 106,600 |
Prepaid expenses | 958,700 | 995,200 |
Total current assets | 44,419,100 | 18,276,400 |
Net investment in leases - long-term | 1,157,000 | 4,573,600 |
Property and equipment, net | 2,055,800 | 2,332,800 |
Operating lease right of use asset | 3,059,300 | 3,226,300 |
Goodwill | 607,500 | 607,500 |
Other assets | 416,900 | 435,900 |
Deferred income taxes | 3,256,200 | 1,890,700 |
Total assets | 54,971,800 | 31,343,200 |
Current Liabilities: | ||
Notes payable, net of unamortized debt issuance costs of $17,400 and $13,900 | 4,232,600 | 4,236,100 |
Accounts payable | 1,988,600 | 1,769,600 |
Accrued liabilities | 2,918,800 | 2,624,000 |
Discounted lease rentals | 1,096,600 | |
Deferred revenue | 1,643,900 | 1,657,400 |
Total current liabilities | 10,783,900 | 11,383,700 |
Long-term Liabilities: | ||
Notes payable, net of unamortized debt issuance costs of $65,500 and $54,800 | 44,434,500 | 17,632,700 |
Discounted lease rentals | 574,000 | |
Deferred revenue | 6,849,600 | 7,050,900 |
Operating lease liabilities | 4,946,900 | 5,307,400 |
Other liabilities | 759,000 | 773,200 |
Total long-term liabilities | 56,990,000 | 31,338,200 |
Shareholders' Equity (Deficit): | ||
Common stock, no par value, 10,000,000 shares authorized, 3,623,538 and 3,756,028 shares issued and outstanding | 9,281,800 | |
Retained earnings (accumulated deficit) | (12,802,100) | (20,660,500) |
Total shareholders' equity (deficit) | (12,802,100) | (11,378,700) |
Total liabilities and shareholders' equity (deficit) | $ 54,971,800 | $ 31,343,200 |
CONSOLIDATED CONDENSED BALANC_2
CONSOLIDATED CONDENSED BALANCE SHEETS (Parenthetical) - USD ($) | Sep. 25, 2021 | Dec. 26, 2020 |
CONSOLIDATED BALANCE SHEETS | ||
Receivables, allowance for doubtful accounts | $ 1,200 | $ 800 |
Unamortized debt issuance costs - Current | 17,400 | 13,900 |
Unamortized debt issuance costs - Noncurrent | $ 65,500 | $ 54,800 |
Common stock, par value (in dollars per share) | $ 0 | $ 0 |
Common stock, shares authorized | 10,000,000 | 10,000,000 |
Common stock, shares issued | 3,623,538 | 3,756,028 |
Common stock, shares outstanding | 3,623,538 | 3,756,028 |
CONSOLIDATED CONDENSED STATEMEN
CONSOLIDATED CONDENSED STATEMENTS OF OPERATIONS - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 25, 2021 | Sep. 26, 2020 | Sep. 25, 2021 | Sep. 26, 2020 | |
Revenue: | ||||
Leasing income | $ 2,266,200 | $ 2,695,800 | $ 8,351,800 | $ 12,040,800 |
Total revenue | 20,153,400 | 18,277,000 | 57,841,900 | 49,266,500 |
Leasing expense | 358,900 | 510,900 | 1,410,800 | 2,443,700 |
Provisions for credit losses | (55,900) | (339,600) | (167,300) | 164,300 |
Selling, general and administrative expenses | 5,380,100 | 5,009,700 | 16,287,600 | 15,719,100 |
Income from operations | 13,789,200 | 12,497,800 | 38,423,100 | 29,277,400 |
Interest expense | (323,200) | (345,700) | (945,600) | (1,409,600) |
Interest and other income (expense) | (18,800) | 9,200 | (7,100) | 27,700 |
Income before income taxes | 13,447,200 | 12,161,300 | 37,470,400 | 27,895,500 |
Provision for income taxes | (3,364,700) | (2,802,500) | (9,139,500) | (6,164,500) |
Net income | $ 10,082,500 | $ 9,358,800 | $ 28,330,900 | $ 21,731,000 |
Earnings per share - basic (in dollars per share) | $ 2.77 | $ 2.51 | $ 7.68 | $ 5.86 |
Earnings per share - diluted (in dollars per share) | $ 2.67 | $ 2.43 | $ 7.40 | $ 5.63 |
Weighted average shares outstanding - basic | 3,635,055 | 3,730,490 | 3,688,419 | 3,710,112 |
Weighted average shares outstanding - diluted | 3,782,873 | 3,857,702 | 3,829,322 | 3,857,754 |
Royalties | ||||
Revenue: | ||||
Revenue | $ 16,375,900 | $ 14,210,000 | $ 45,141,200 | $ 33,188,300 |
Merchandise sales | ||||
Revenue: | ||||
Revenue | 704,800 | 631,200 | 1,980,300 | 1,746,800 |
Cost of merchandise sold | 681,100 | 598,200 | 1,887,700 | 1,662,000 |
Franchise fees | ||||
Revenue: | ||||
Revenue | 383,400 | 335,400 | 1,101,300 | 1,064,900 |
Other | ||||
Revenue: | ||||
Revenue | $ 423,100 | $ 404,600 | $ 1,267,300 | $ 1,225,700 |
CONSOLIDATED CONDENSED STATEM_2
CONSOLIDATED CONDENSED STATEMENTS OF SHAREHOLDERS' EQUITY (DEFICIT) - USD ($) | Common Stock | Retained Earnings (Accumulated Deficit). | Total |
BALANCE at Dec. 28, 2019 | $ 11,929,300 | $ 519,000 | $ 12,448,300 |
BALANCE (in shares) at Dec. 28, 2019 | 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 (Net 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 | ||
Shareholders' Equity (Deficit) | |||
Stock options exercised | $ 6,013,600 | 6,013,600 | |
Stock options exercised (in shares) | 72,434 | ||
Compensation expense relating to stock options | $ 397,700 | 397,700 | |
Cash dividends | (184,500) | (184,500) | |
Comprehensive income (Net income) | 5,055,200 | 5,055,200 | |
BALANCE at Jun. 27, 2020 | $ 6,411,300 | (24,977,500) | (18,566,200) |
BALANCE (in shares) at Jun. 27, 2020 | 3,723,187 | ||
Shareholders' Equity (Deficit) | |||
Repurchase of common stock | $ 914,600 | 914,600 | |
Repurchase of common stock (in shares) | 12,250 | ||
Compensation expense relating to stock options | $ 391,900 | 391,900 | |
Cash dividends | (932,800) | (932,800) | |
Comprehensive income (Net income) | 9,358,800 | 9,358,800 | |
BALANCE at Sep. 26, 2020 | $ 7,717,800 | (16,551,500) | (8,833,700) |
BALANCE (in shares) at Sep. 26, 2020 | 3,735,437 | ||
BALANCE at Dec. 26, 2020 | $ 9,281,800 | (20,660,500) | $ (11,378,700) |
BALANCE (in shares) at Dec. 26, 2020 | 3,756,028 | 3,756,028 | |
Shareholders' Equity (Deficit) | |||
Repurchase of common stock | $ (9,935,800) | (519,400) | $ (10,455,200) |
Repurchase of common stock (in shares) | (58,255) | ||
Stock options exercised | $ 268,800 | 268,800 | |
Stock options exercised (in shares) | 2,950 | ||
Compensation expense relating to stock options | $ 385,200 | 385,200 | |
Cash dividends | (935,400) | (935,400) | |
Comprehensive income (Net income) | 9,311,100 | 9,311,100 | |
BALANCE at Mar. 27, 2021 | (12,804,200) | (12,804,200) | |
BALANCE (in shares) at Mar. 27, 2021 | 3,700,723 | ||
BALANCE at Dec. 26, 2020 | $ 9,281,800 | (20,660,500) | $ (11,378,700) |
BALANCE (in shares) at Dec. 26, 2020 | 3,756,028 | 3,756,028 | |
BALANCE at Sep. 25, 2021 | (12,802,100) | $ (12,802,100) | |
BALANCE (in shares) at Sep. 25, 2021 | 3,623,538 | 3,623,538 | |
BALANCE at Mar. 27, 2021 | (12,804,200) | $ (12,804,200) | |
BALANCE (in shares) at Mar. 27, 2021 | 3,700,723 | ||
Shareholders' Equity (Deficit) | |||
Repurchase of common stock | $ (1,254,400) | (7,208,600) | (8,463,000) |
Repurchase of common stock (in shares) | (43,833) | ||
Stock options exercised | $ 941,500 | 941,500 | |
Stock options exercised (in shares) | 11,129 | ||
Compensation expense relating to stock options | $ 312,900 | 312,900 | |
Cash dividends | (1,665,000) | (1,665,000) | |
Comprehensive income (Net income) | 8,937,300 | 8,937,300 | |
BALANCE at Jun. 26, 2021 | (12,740,500) | (12,740,500) | |
BALANCE (in shares) at Jun. 26, 2021 | 3,668,019 | ||
Shareholders' Equity (Deficit) | |||
Repurchase of common stock | $ (465,100) | (8,509,600) | (8,974,700) |
Repurchase of common stock (in shares) | (45,731) | ||
Stock options exercised | $ 89,000 | 89,000 | |
Stock options exercised (in shares) | 1,250 | ||
Compensation expense relating to stock options | $ 376,100 | 376,100 | |
Cash dividends | (1,634,500) | (1,634,500) | |
Comprehensive income (Net income) | 10,082,500 | 10,082,500 | |
BALANCE at Sep. 25, 2021 | $ (12,802,100) | $ (12,802,100) | |
BALANCE (in shares) at Sep. 25, 2021 | 3,623,538 | 3,623,538 |
CONSOLIDATED CONDENSED STATEM_3
CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS - USD ($) | 9 Months Ended | |
Sep. 25, 2021 | Sep. 26, 2020 | |
OPERATING ACTIVITIES: | ||
Net Income | $ 28,330,900 | $ 21,731,000 |
Adjustments to reconcile net income to net cash provided by operating activities: | ||
Depreciation and amortization | 328,800 | 366,700 |
Provisions for credit losses | (167,300) | 164,300 |
Compensation expense related to stock options | 1,074,200 | 929,900 |
Deferred income taxes | (1,365,500) | (1,251,000) |
Loss from disposal of property and equipment | 200 | |
Deferred initial direct costs | (2,100) | (18,300) |
Amortization of deferred initial direct costs | 18,800 | 89,400 |
Operating lease right of use asset amortization | 167,000 | 293,400 |
Tax benefits on exercised stock options | 249,200 | 602,400 |
Change in operating assets and liabilities: | ||
Receivables | 187,000 | (278,100) |
Principal collections on lease receivables | 7,452,200 | 11,418,500 |
Income tax receivable/payable | (216,200) | 368,000 |
Inventories | (302,000) | 900 |
Prepaid expenses | 36,500 | (190,700) |
Other assets | 19,000 | 34,200 |
Accounts payable | 219,000 | 257,700 |
Accrued and other liabilities | (94,100) | (864,100) |
Rents received in advance and security deposits | (674,500) | (1,252,000) |
Deferred revenue | (214,800) | (630,300) |
Net cash provided by operating activities | 35,046,100 | 31,772,100 |
INVESTING ACTIVITIES: | ||
Purchase of property and equipment | (51,800) | (33,400) |
Purchase of equipment for lease contracts | (78,200) | (3,128,200) |
Net cash used for investing activities | (130,000) | (3,161,600) |
FINANCING ACTIVITIES: | ||
Proceeds from borrowings on line of credit | 46,600,000 | |
Payments on line of credit | (46,600,000) | |
Proceeds from borrowings on notes payable | 30,000,000 | |
Payments on notes payable | (3,187,500) | (2,687,500) |
Repurchases of common stock | (27,892,900) | (48,987,500) |
Proceeds from exercises of stock options | 1,299,300 | 7,074,100 |
Dividends paid | (4,234,900) | (2,029,500) |
Proceeds from discounted lease rentals | 1,157,000 | |
Net cash used for financing activities | (4,016,000) | (45,473,400) |
NET INCREASE (DECREASE) IN CASH, CASH EQUIVALENTS AND RESTRICTED CASH | 30,900,100 | (16,862,900) |
Cash, cash equivalents and restricted cash, beginning of period | 6,684,000 | 25,180,300 |
Cash, cash equivalents and restricted cash, end of period | $ 37,584,100 | $ 8,317,400 |
CONSOLIDATED CONDENSED STATEM_4
CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS - Supplemental Disclosures - USD ($) | 9 Months Ended | |
Sep. 25, 2021 | Sep. 26, 2020 | |
SUPPLEMENTAL DISCLOSURES: | ||
Cash paid for interest | $ 884,100 | $ 1,426,100 |
Cash paid for income taxes | 10,472,000 | 6,445,200 |
Reconciliation of cash, cash equivalents and restricted cash: | ||
Cash and cash equivalents | 37,569,100 | 8,267,400 |
Restricted cash | 15,000 | 50,000 |
Total cash, cash equivalents and restricted cash | $ 37,584,100 | $ 8,317,400 |
Management's Interim Financial
Management's Interim Financial Statement Representation: | 9 Months Ended |
Sep. 25, 2021 | |
Management's Interim Financial Statement Representation: | |
Management's Interim Financial Statement Representation: | WINMARK CORPORATION AND SUBSIDIARIES NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS ā 1. Managementās Interim Financial Statement Representation: ā 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 Companyās 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 Companyās latest Annual Report on Form 10-K. ā Revenues and operating results for the nine months ended September 25, 2021 are not necessarily indicative of the results to be expected for the full year. ā Reclassifications ā Certain reclassifications of previously reported amounts have been made to conform to the current year presentation. Such reclassifications did not impact net income or shareholdersā equity (deficit) as previously reported. |
Organization and Business_
Organization and Business: | 9 Months Ended |
Sep. 25, 2021 | |
Organization and Business: | |
Organization and Business: | 2. Organization and Business: ā The Company offers licenses to operate franchises using the service marks Platoās ClosetĀ®, Once Upon A ChildĀ®, Play It Again SportsĀ®, Style EncoreĀ® and Music Go RoundĀ®. The Company also operates a middle market equipment leasing business under the Winmark CapitalĀ® mark. ā |
Contract Liabilities_
Contract Liabilities: | 9 Months Ended |
Sep. 25, 2021 | |
Contract Liabilities: | |
Contract Liabilities: | 3. Contract Liabilities: ā The Companyās 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 nine months of 2021 and 2020, respectively: ā ā ā ā ā ā ā ā ā September 25, 2021 September 26, 2020 Balance at beginning of period ā $ 8,708,300 ā $ 9,575,500 Franchise and software license fees collected from franchisees, excluding amount earned as revenue during the period ā 1,110,600 ā 656,700 Fees earned that were included in the balance at the beginning of the period ā (1,325,400) ā (1,287,000) Balance at end of period ā $ 8,493,500 ā $ 8,945,200 ā ā The following table illustrates future estimated revenue to be recognized for the remainder of 2021 and full fiscal years thereafter related to performance obligations that are unsatisfied (or partially unsatisfied) as of September 25, 2021. ā ā ā ā ā Contract Liabilities expected to be recognized in ā Amount 2021 ā $ 418,400 2022 ā 1,605,500 2023 ā 1,434,200 2024 ā 1,236,500 2025 ā 1,020,100 Thereafter ā 2,778,800 ā ā $ 8,493,500 ā |
Fair Value Measurements_
Fair Value Measurements: | 9 Months Ended |
Sep. 25, 2021 | |
Fair Value Measurements: | |
Fair Value Measurements: | 4. Fair Value Measurements: ā 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: ā ā Level 1 ā quoted prices in active markets for identical assets and liabilities. ā Level 2 ā observable inputs other than quoted prices in active markets for identical assets and liabilities. ā Level 3 ā unobservable inputs in which there is little or no market data available, which require the reporting entity to develop its own assumptions. ā 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: | 9 Months Ended |
Sep. 25, 2021 | |
Investment in Leasing Operations: | |
Investment in Leasing Operations: | ā 5. Investment in Leasing Operations: ā In May 2021, the Company made the decision to no longer solicit new leasing customers and will pursue an orderly run-off for its leasing portfolio. ā Investment in leasing operations consists of the following: ā ā ā ā ā ā ā ā ā September 25, 2021 December 26, 2020 Direct financing and sales-type leases: ā ā ā ā ā ā Minimum lease payments receivable ā $ 5,111,300 ā $ 12,536,300 Estimated unguaranteed residual value of equipment ā 1,643,300 ā 2,950,100 Unearned lease income, net of initial direct costs deferred ā (611,100) ā (1,439,500) Security deposits ā (1,494,500) ā (2,169,000) Equipment installed on leases not yet commenced ā 431,800 ā 1,634,400 Total investment in direct financing and sales-type leases ā 5,080,800 ā 13,512,300 Allowance for credit losses ā (102,900) ā (270,200) Net investment in direct financing and sales-type leases ā 4,977,900 ā 13,242,100 Operating leases: ā ā ā ā ā ā Operating lease assets ā 469,800 ā 599,100 Less accumulated depreciation and amortization ā (406,100) ā (580,100) Net investment in operating leases ā 63,700 ā 19,000 Total net investment in leasing operations ā $ 5,041,600 ā $ 13,261,100 ā As of September 25, 2021, the $5.0 million total net investment in leases consists of $3.9 million classified as current and $1.1 million classified as long-term. As of December 26, 2020, the $13.3 million total net investment in leases consists of $8.7 million classified as current and $4.6 million classified as long-term. ā As of September 25, 2021, there were no customers with leased assets greater than 10% of the Companyās total assets. ā 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 2021 and the full fiscal years thereafter as of September 25, 2021: ā ā ā ā ā ā ā ā ā ā ā Direct Financing and Sales-Type Leases ā Minimum Lease Income Fiscal Year ā Payments Receivable ā Amortization 2021 ā $ 1,442,000 ā $ 278,200 ā 2022 ā 3,538,900 ā 321,600 ā 2023 ā ā 126,900 ā ā 11,200 ā 2024 ā 3,500 ā 100 ā ā ā $ 5,111,300 ā $ 611,100 ā ā The activity in the allowance for credit losses for leasing operations during the first nine months of 2021 and 2020, respectively, is as follows: ā ā ā ā ā ā ā ā ā ā September 25, 2021 September 26, 2020 Balance at beginning of period ā $ 270,200 ā $ 580,600 ā Provisions charged to expense ā (167,300) ā 164,300 ā Recoveries ā ā ā (12,400) ā Deductions for amounts written-off ā ā ā (148,900) ā Balance at end of period ā $ 102,900 ā $ 583,600 ā ā The Companyās investment in direct financing and sales-type leases (āInvestment In Leasesā) and allowance for credit losses by loss evaluation methodology are as follows: ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā September 25, 2021 ā December 26, 2020 ā Investment Allowance for Investment Allowance for ā ā In Leases ā Credit Losses ā In Leases ā Credit Losses Collectively evaluated for loss potential ā $ 5,080,800 ā $ 102,900 ā $ 13,512,300 ā $ 270,200 Individually evaluated for loss potential ā ā ā ā ā ā ā ā Total ā $ 5,080,800 ā $ 102,900 ā $ 13,512,300 ā $ 270,200 ā The Companyās 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 Companyās accruing and non-accrual leases. Delinquent balances are determined based on the contractual terms of the lease. ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā September 25, 2021 ā 0-60 Days 61-90 Days Over 90 Days ā ā ā ā ā ā Delinquent ā Delinquent ā Delinquent and ā ā ā ā ā ā ā ā and Accruing ā and Accruing ā Accruing ā Non-Accrual ā Total ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā Total investment in leases ā $ 5,080,800 ā $ ā ā $ ā ā $ ā ā $ 5,080,800 ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā December 26, 2020 ā 0-60 Days 61-90 Days Over 90 Days ā ā ā ā ā ā Delinquent ā Delinquent ā Delinquent and ā ā ā ā ā ā ā ā and Accruing ā and Accruing ā Accruing ā Non-Accrual ā Total ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā Total investment in leases ā $ 13,512,300 ā $ ā ā $ ā ā $ ā ā $ 13,512,300 ā ā 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 Companyās 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 Companyās best estimate. The Companyās 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. ā Leasing income as presented on the Consolidated Condensed Statements of Operations consists of the following: ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā Three Months Ended ā Three Months Ended ā Nine Months Ended ā Nine Months Ended ā September 25, 2021 September 26, 2020 September 25, 2021 September 26, 2020 Interest income on direct financing and sales-type leases ā $ 362,200 ā $ 839,600 ā $ 1,464,700 ā $ 2,947,900 Selling profit (loss) at commencement of sales-type leases ā 164,300 ā 267,700 ā 1,594,300 ā 1,453,600 Operating lease income ā ā 436,700 ā ā 668,600 ā ā 1,397,500 ā ā 1,758,500 Income on sales of equipment under lease ā ā 988,500 ā ā 913,400 ā ā 3,214,000 ā ā 5,078,300 Other ā ā 314,500 ā ā 6,500 ā ā 681,300 ā ā 802,500 Leasing income ā $ 2,266,200 ā $ 2,695,800 ā $ 8,351,800 ā $ 12,040,800 ā |
Earnings Per Share_
Earnings Per Share: | 9 Months Ended |
Sep. 25, 2021 | |
Earnings Per Share: | |
Earnings Per Share: | 6. Earnings Per Share: ā The following table sets forth the presentation of shares outstanding used in the calculation of basic and diluted earnings per share (āEPSā): ā ā ā ā ā ā ā ā ā ā ā ā ā Three Months Ended ā Nine Months Ended ā ā September 25, 2021 September 26, 2020 September 25, 2021 September 26, 2020 Denominator for basic EPS ā weighted average common shares 3,635,055 3,730,490 3,688,419 3,710,112 Dilutive shares associated with option plans 147,818 127,212 140,903 147,642 Denominator for diluted EPS ā weighted average common shares and dilutive potential common shares 3,782,873 3,857,702 3,829,322 3,857,754 Options excluded from EPS calculation ā anti-dilutive 3,038 11,979 6,833 11,057 ā |
Shareholders' Equity (Deficit)_
Shareholders' Equity (Deficit): | 9 Months Ended |
Sep. 25, 2021 | |
Shareholders' Equity (Deficit): | |
Shareholders' Equity (Deficit): | 7. Shareholdersā Equity (Deficit): ā Dividends ā On January 27, 2021, the Companyās 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 10, 2021, which was paid on March 1, 2021. ā On April 14, 2021, the Companyās Board of Directors approved the payment of a $0.45 per share quarterly cash dividend to shareholders of record at the close of business on May 12, 2021, which was paid on June 1, 2021. ā On July 14, 2021, the Companyās Board of Directors approved the payment of a $0.45 per share quarterly cash dividend to shareholders of record at the close of business on August 11, 2021, which was paid on September 1, 2021 ā Repurchase of Common Stock ā In the first nine months of 2021, the Company repurchased 147,819 shares of its common stock. Under the Board of Directorsā authorization, as of September 25, 2021, the Company has the ability to repurchase an additional 382,785 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. ā Stock Option Plans and Stock-Based Compensation ā Stock option activity under the Companyās option plans as of September 25, 2021 was as follows: ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā Weighted Average ā ā ā ā ā ā ā ā ā Remaining ā ā ā ā ā Number of ā Weighted Average ā Contractual Life ā ā ā ā Shares Exercise Price (years) Intrinsic Value Outstanding, December 26, 2020 393,488 ā $ 113.19 ā 5.61 ā $ 27,864,900 Granted 34,000 ā ā 191.82 ā ā ā ā ā Exercised (15,329) ā ā 84.76 ā ā ā ā ā Forfeited (2,700) ā ā 151.06 ā ā ā ā ā Outstanding, September 25, 2021 409,459 ā $ 120.54 ā 5.29 ā $ 39,222,800 Exercisable, September 25, 2021 287,729 ā $ 99.03 ā 3.93 ā $ 33,749,500 ā The fair value of options granted under the Option Plans during the first nine months of 2021 and 2020 were estimated on the date of grant using the Black-Scholes option pricing model with the following weighted average assumptions and results: ā ā ā ā ā ā ā ā ā ā ā ā ā Nine Months Ended ā ā ā September 25, 2021 ā September 26, 2020 ā Risk free interest rate ā 0.90 % ā 0.40 % Expected life (years) ā 6 ā ā 6 ā Expected volatility ā 25.07 % ā 25.03 % Dividend yield ā 2.74 % ā 1.92 % Option fair value ā $ 32.70 ā $ 26.55 ā ā ā All unexercised options at September 25, 2021 have an exercise price equal to the fair market value on the date of the grant. ā Compensation expense of $1,074,200 and $929,900 relating to the vested portion of the fair value of stock options granted was expensed to āSelling, General and Administrative Expensesā in the first nine months of 2021 and 2020, respectively. As of September 25, 2021, the Company had $2.8 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 2.5 |
Debt_
Debt: | 9 Months Ended |
Sep. 25, 2021 | |
Debt: | |
Debt: | 8. Debt: ā Line of Credit ā In September 2021, the Companyās Line of Credit with CIBC Bank USA was amended to, among other things: ā ā Permit the Company to issue up to $30.0 million in additional term notes to one or more affiliates or managed accounts of PGIM, Inc. (formerly Prudential Investment Management, Inc.) (collectively, āPrudentialā); ā Remove the tangible net worth covenant minimum requirement, amend the fixed charge coverage ratio definition, and amend the restricted payments covenant to allow the Company more flexibility with respect to shareholder distributions and/or common stock repurchases as long as certain conditions are met (as defined within the amendment); ā Amend the provisions that allow for the replacement of LIBOR as an interest rate option in connection with borrowings under the Line of Credit. ā As of September 25, 2021, there were no borrowings outstanding under the Companyās Line of Credit, leaving $25.0 million available for additional borrowings. ā The Line of Credit has been and will continue to be used for general corporate purposes. The Line of Credit, which terminates in August 2024 is secured by a lien against substantially all of the Companyās assets, contains customary financial conditions and covenants, and requires maintenance of minimum levels of debt service coverage and maximum levels of leverage (all as defined within the Line of Credit). As of September 25, 2021, the Company was in compliance with all of its financial covenants. Notes Payable ā In September 2021, the Note Agreement with Prudential was amended to, among other things: ā ā Provide for the issuance of $30.0 million in new senior secured notes; ā Remove the tangible net worth covenant minimum requirement, amend the fixed charge coverage ratio definition, and amend the restricted payments covenant to allow the Company more flexibility with respect to shareholder distributions and/or common stock repurchase as long as certain conditions are met (as defined within the amendment). ā In September 2021, the Company issued $30.0 million of Series C notes, with the proceeds to be used for general corporate purposes, including share repurchases and dividends. As of September 25, 2021, with the $11.25 million in principal outstanding from the $25.0 million Series A notes issued in May 2015 and $7.5 million in principal outstanding from the $12.5 million Series B notes issued in August 2017, the aggregate principal outstanding under the Note Agreement was $48.75 million. ā The final maturity of the Series A and Series B ā The Companyās obligations under the Note Agreement are secured by a lien against substantially all of the Companyās assets (as the notes rank pari passu ā 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. ā |
Operating Leases_
Operating Leases: | 9 Months Ended |
Sep. 25, 2021 | |
Operating Leases: | |
Operating Leases: | 9. Operating Leases: ā As of September 25, 2021, the Company leases its Minnesota corporate headquarters in a facility with an operating lease that expires in December 2029. The remaining lease term for this lease is 8.25 years and the discount rate is 5.5 %. The Company recognized $879,200 and $896,400 of rent expense for the periods ended September 25, 2021 and September 26, 2020, respectively. ā Maturities of operating lease liabilities is as follows for the remainder of fiscal 2021 and full fiscal years thereafter as of September 25, 2021: ā ā ā ā ā Operating Lease Liabilities expected to be recognized in Amount 2021 ā $ 184,000 2022 ā 742,900 2023 ā 763,300 2024 ā 784,400 2025 ā 806,000 Thereafter ā 3,452,600 Total lease payments ā ā 6,733,200 Less imputed interest ā ā (1,315,700) Present value of lease liabilities ā $ 5,417,500 ā Of the $5.4 million operating lease liability outstanding at September 25, 2021, $0.5 million is included in Accrued liabilities in the Current liabilities ā Supplemental cash flow information related to our operating leases is as follows for the period ended September 25, 2021: ā ā ā ā ā ā ā ā ā ā Nine Months Ended ā September 25, 2021 September 26, 2020 Cash paid for amounts included in the measurement of lease liabilities: ā ā ā ā ā ā Operating cash flow outflow from operating leases ā $ 539,100 ā $ 524,600 ā |
Segment Reporting_
Segment Reporting: | 9 Months Ended |
Sep. 25, 2021 | |
Segment Reporting: | |
Segment Reporting: | 10. Segment Reporting: ā 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. The leasing segment includes the Companyās equipment leasing business. Segment reporting is intended to give financial statement users a better view of how the Company manages and evaluates its businesses. The Companyās 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: ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā Three Months Ended ā Nine Months Ended ā ā September 25, 2021 September 26, 2020 September 25, 2021 September 26, 2020 Revenue: ā ā ā ā ā ā ā ā ā ā ā ā ā Franchising ā $ 17,887,200 ā $ 15,581,200 ā $ 49,490,100 ā $ 37,225,700 ā Leasing ā 2,266,200 ā 2,695,800 ā 8,351,800 ā 12,040,800 ā Total revenue ā $ 20,153,400 ā $ 18,277,000 ā $ 57,841,900 ā $ 49,266,500 ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā Reconciliation to operating income: ā ā ā ā ā ā ā ā ā ā ā ā ā Franchising segment contribution ā $ 12,330,200 ā $ 10,789,900 ā $ 33,601,600 ā $ 22,601,000 ā Leasing segment contribution ā 1,459,000 ā 1,707,900 ā 4,821,500 ā 6,676,400 ā Total operating income ā $ 13,789,200 ā $ 12,497,800 ā $ 38,423,100 ā $ 29,277,400 ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā Depreciation and amortization: ā ā ā ā ā ā ā ā ā ā ā ā ā Franchising ā $ 59,400 ā $ 70,800 ā $ 187,600 ā $ 216,100 ā Leasing ā 46,200 ā 49,900 ā 141,200 ā 150,600 ā Total depreciation and amortization ā $ 105,600 ā $ 120,700 ā $ 328,800 ā $ 366,700 ā ā ā ā ā ā ā ā ā ā ā As of ā September 25, 2021 December 26, 2020 Identifiable assets: ā ā ā ā ā ā Franchising ā $ 3,953,200 ā $ 4,848,300 Leasing ā 5,691,100 ā 14,462,600 Unallocated ā 45,327,500 ā 12,032,300 Total ā $ 54,971,800 ā $ 31,343,200 ā |
Subsequent Events_
Subsequent Events: | 9 Months Ended |
Sep. 25, 2021 | |
Subsequent Events: | |
Subsequent Events: | ā 11. Subsequent Events: ā On October 13, 2021, the Companyās Board of Directors approved the payment of a $7.50 per share special cash dividend (the ā2021 Special Dividendā) to shareholders of record at the close of business November 10, 2021, which will be paid on December 1, 2021. The 2021 Special Dividend will be approximately $27.2 million based on the current number of shares outstanding and is expected to be financed by cash on hand. ā |
Contract Liabilities_ (Tables)
Contract Liabilities: (Tables) | 9 Months Ended |
Sep. 25, 2021 | |
Contract Liabilities: | |
Schedule of activity of current and noncurrent deferred franchise revenue | ā ā ā ā ā ā ā ā ā September 25, 2021 September 26, 2020 Balance at beginning of period ā $ 8,708,300 ā $ 9,575,500 Franchise and software license fees collected from franchisees, excluding amount earned as revenue during the period ā 1,110,600 ā 656,700 Fees earned that were included in the balance at the beginning of the period ā (1,325,400) ā (1,287,000) Balance at end of period ā $ 8,493,500 ā $ 8,945,200 |
Schedule of future estimated revenue to be recognized related to performance obligations | ā ā ā ā ā Contract Liabilities expected to be recognized in ā Amount 2021 ā $ 418,400 2022 ā 1,605,500 2023 ā 1,434,200 2024 ā 1,236,500 2025 ā 1,020,100 Thereafter ā 2,778,800 ā ā $ 8,493,500 |
Investment in Leasing Operati_2
Investment in Leasing Operations: (Tables) | 9 Months Ended |
Sep. 25, 2021 | |
Investment in Leasing Operations: | |
Schedule of investment in leasing operations | ā ā ā ā ā ā ā ā ā September 25, 2021 December 26, 2020 Direct financing and sales-type leases: ā ā ā ā ā ā Minimum lease payments receivable ā $ 5,111,300 ā $ 12,536,300 Estimated unguaranteed residual value of equipment ā 1,643,300 ā 2,950,100 Unearned lease income, net of initial direct costs deferred ā (611,100) ā (1,439,500) Security deposits ā (1,494,500) ā (2,169,000) Equipment installed on leases not yet commenced ā 431,800 ā 1,634,400 Total investment in direct financing and sales-type leases ā 5,080,800 ā 13,512,300 Allowance for credit losses ā (102,900) ā (270,200) Net investment in direct financing and sales-type leases ā 4,977,900 ā 13,242,100 Operating leases: ā ā ā ā ā ā Operating lease assets ā 469,800 ā 599,100 Less accumulated depreciation and amortization ā (406,100) ā (580,100) Net investment in operating leases ā 63,700 ā 19,000 Total net investment in leasing operations ā $ 5,041,600 ā $ 13,261,100 |
Schedule of future minimum lease payments receivable under lease contracts and the amortization of unearned lease income, net of initial direct costs deferred | ā ā ā ā ā ā ā ā ā ā ā Direct Financing and Sales-Type Leases ā Minimum Lease Income Fiscal Year ā Payments Receivable ā Amortization 2021 ā $ 1,442,000 ā $ 278,200 ā 2022 ā 3,538,900 ā 321,600 ā 2023 ā ā 126,900 ā ā 11,200 ā 2024 ā 3,500 ā 100 ā ā ā $ 5,111,300 ā $ 611,100 ā |
Schedule of activity in the allowance for credit losses for leasing operations | ā ā ā ā ā ā ā ā ā ā September 25, 2021 September 26, 2020 Balance at beginning of period ā $ 270,200 ā $ 580,600 ā Provisions charged to expense ā (167,300) ā 164,300 ā Recoveries ā ā ā (12,400) ā Deductions for amounts written-off ā ā ā (148,900) ā Balance at end of period ā $ 102,900 ā $ 583,600 ā |
Schedule of investment in direct financing and sales-type leases ("Investment in Leases") and allowance for credit losses by loss evaluation methodology | ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā September 25, 2021 ā December 26, 2020 ā Investment Allowance for Investment Allowance for ā ā In Leases ā Credit Losses ā In Leases ā Credit Losses Collectively evaluated for loss potential ā $ 5,080,800 ā $ 102,900 ā $ 13,512,300 ā $ 270,200 Individually evaluated for loss potential ā ā ā ā ā ā ā ā Total ā $ 5,080,800 ā $ 102,900 ā $ 13,512,300 ā $ 270,200 |
Schedule of information regarding accruing and non-accrual leases | ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā September 25, 2021 ā 0-60 Days 61-90 Days Over 90 Days ā ā ā ā ā ā Delinquent ā Delinquent ā Delinquent and ā ā ā ā ā ā ā ā and Accruing ā and Accruing ā Accruing ā Non-Accrual ā Total ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā Total investment in leases ā $ 5,080,800 ā $ ā ā $ ā ā $ ā ā $ 5,080,800 ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā December 26, 2020 ā 0-60 Days 61-90 Days Over 90 Days ā ā ā ā ā ā Delinquent ā Delinquent ā Delinquent and ā ā ā ā ā ā ā ā and Accruing ā and Accruing ā Accruing ā Non-Accrual ā Total ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā Total investment in leases ā $ 13,512,300 ā $ ā ā $ ā ā $ ā ā $ 13,512,300 |
Schedule of components of leasing income | ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā Three Months Ended ā Three Months Ended ā Nine Months Ended ā Nine Months Ended ā September 25, 2021 September 26, 2020 September 25, 2021 September 26, 2020 Interest income on direct financing and sales-type leases ā $ 362,200 ā $ 839,600 ā $ 1,464,700 ā $ 2,947,900 Selling profit (loss) at commencement of sales-type leases ā 164,300 ā 267,700 ā 1,594,300 ā 1,453,600 Operating lease income ā ā 436,700 ā ā 668,600 ā ā 1,397,500 ā ā 1,758,500 Income on sales of equipment under lease ā ā 988,500 ā ā 913,400 ā ā 3,214,000 ā ā 5,078,300 Other ā ā 314,500 ā ā 6,500 ā ā 681,300 ā ā 802,500 Leasing income ā $ 2,266,200 ā $ 2,695,800 ā $ 8,351,800 ā $ 12,040,800 |
Earnings Per Share_ (Tables)
Earnings Per Share: (Tables) | 9 Months Ended |
Sep. 25, 2021 | |
Earnings Per Share: | |
Schedule of shares outstanding used in the calculation of basic and diluted earnings per share | ā ā ā ā ā ā ā ā ā ā ā ā ā Three Months Ended ā Nine Months Ended ā ā September 25, 2021 September 26, 2020 September 25, 2021 September 26, 2020 Denominator for basic EPS ā weighted average common shares 3,635,055 3,730,490 3,688,419 3,710,112 Dilutive shares associated with option plans 147,818 127,212 140,903 147,642 Denominator for diluted EPS ā weighted average common shares and dilutive potential common shares 3,782,873 3,857,702 3,829,322 3,857,754 Options excluded from EPS calculation ā anti-dilutive 3,038 11,979 6,833 11,057 |
Shareholders' Equity (Deficit_2
Shareholders' Equity (Deficit): (Tables) | 9 Months Ended |
Sep. 25, 2021 | |
Shareholders' Equity (Deficit): | |
Schedule of stock option activity | ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā Weighted Average ā ā ā ā ā ā ā ā ā Remaining ā ā ā ā ā Number of ā Weighted Average ā Contractual Life ā ā ā ā Shares Exercise Price (years) Intrinsic Value Outstanding, December 26, 2020 393,488 ā $ 113.19 ā 5.61 ā $ 27,864,900 Granted 34,000 ā ā 191.82 ā ā ā ā ā Exercised (15,329) ā ā 84.76 ā ā ā ā ā Forfeited (2,700) ā ā 151.06 ā ā ā ā ā Outstanding, September 25, 2021 409,459 ā $ 120.54 ā 5.29 ā $ 39,222,800 Exercisable, September 25, 2021 287,729 ā $ 99.03 ā 3.93 ā $ 33,749,500 |
Schedule of weighted average assumptions used in estimation of fair value of options granted | ā ā ā ā ā ā ā ā ā ā ā ā Nine Months Ended ā ā ā September 25, 2021 ā September 26, 2020 ā Risk free interest rate ā 0.90 % ā 0.40 % Expected life (years) ā 6 ā ā 6 ā Expected volatility ā 25.07 % ā 25.03 % Dividend yield ā 2.74 % ā 1.92 % Option fair value ā $ 32.70 ā $ 26.55 ā ā |
Operating Leases_ (Tables)
Operating Leases: (Tables) | 9 Months Ended |
Sep. 25, 2021 | |
Operating Leases: | |
Schedule of maturities of operating lease liabilities | ā ā ā ā ā Operating Lease Liabilities expected to be recognized in Amount 2021 ā $ 184,000 2022 ā 742,900 2023 ā 763,300 2024 ā 784,400 2025 ā 806,000 Thereafter ā 3,452,600 Total lease payments ā ā 6,733,200 Less imputed interest ā ā (1,315,700) Present value of lease liabilities ā $ 5,417,500 |
Schedule of supplemental cash flow information related to operating leases | ā ā ā ā ā ā ā ā ā ā Nine Months Ended ā September 25, 2021 September 26, 2020 Cash paid for amounts included in the measurement of lease liabilities: ā ā ā ā ā ā Operating cash flow outflow from operating leases ā $ 539,100 ā $ 524,600 |
Segment Reporting_ (Tables)
Segment Reporting: (Tables) | 9 Months Ended |
Sep. 25, 2021 | |
Segment Reporting: | |
Schedule of financial information by segment and reconciliation of segment contribution to operating income | ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā Three Months Ended ā Nine Months Ended ā ā September 25, 2021 September 26, 2020 September 25, 2021 September 26, 2020 Revenue: ā ā ā ā ā ā ā ā ā ā ā ā ā Franchising ā $ 17,887,200 ā $ 15,581,200 ā $ 49,490,100 ā $ 37,225,700 ā Leasing ā 2,266,200 ā 2,695,800 ā 8,351,800 ā 12,040,800 ā Total revenue ā $ 20,153,400 ā $ 18,277,000 ā $ 57,841,900 ā $ 49,266,500 ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā Reconciliation to operating income: ā ā ā ā ā ā ā ā ā ā ā ā ā Franchising segment contribution ā $ 12,330,200 ā $ 10,789,900 ā $ 33,601,600 ā $ 22,601,000 ā Leasing segment contribution ā 1,459,000 ā 1,707,900 ā 4,821,500 ā 6,676,400 ā Total operating income ā $ 13,789,200 ā $ 12,497,800 ā $ 38,423,100 ā $ 29,277,400 ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā Depreciation and amortization: ā ā ā ā ā ā ā ā ā ā ā ā ā Franchising ā $ 59,400 ā $ 70,800 ā $ 187,600 ā $ 216,100 ā Leasing ā 46,200 ā 49,900 ā 141,200 ā 150,600 ā Total depreciation and amortization ā $ 105,600 ā $ 120,700 ā $ 328,800 ā $ 366,700 ā ā ā ā ā ā ā ā ā ā ā As of ā September 25, 2021 December 26, 2020 Identifiable assets: ā ā ā ā ā ā Franchising ā $ 3,953,200 ā $ 4,848,300 Leasing ā 5,691,100 ā 14,462,600 Unallocated ā 45,327,500 ā 12,032,300 Total ā $ 54,971,800 ā $ 31,343,200 |
Management's Interim Financia_2
Management's Interim Financial Statement Representation: (Details) | 9 Months Ended |
Sep. 25, 2021item | |
Minimum | |
Number of Weeks in Fiscal Year | 52 |
Maximum | |
Number of Weeks in Fiscal Year | 53 |
Contract Liabilities_ Activity
Contract Liabilities: Activity (Details) - USD ($) | 9 Months Ended | |
Sep. 25, 2021 | Sep. 26, 2020 | |
Activity of the current and noncurrent deferred franchise revenue | ||
Balance at beginning of period | $ 8,708,300 | $ 9,575,500 |
Franchise and software license fees collected from franchisees, excluding amount earned as revenue during the period | 1,110,600 | 656,700 |
Fees earned that were included in the balance at the beginning of the period | (1,325,400) | (1,287,000) |
Balance at end of period | $ 8,493,500 | $ 8,945,200 |
Contract Liabilities_ Performan
Contract Liabilities: Performance Obligations (Details) | Sep. 25, 2021USD ($) |
Future estimated revenue to be recognized related to performance obligations | |
Revenue, remaining performance obligation | $ 8,493,500 |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2021-09-26 | |
Future estimated revenue to be recognized related to performance obligations | |
Duration of expected recognition period for remaining performance obligation | 3 months |
Revenue, remaining performance obligation | $ 418,400 |
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 | $ 1,605,500 |
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 | $ 1,434,200 |
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 | $ 1,236,500 |
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 | 1 year |
Revenue, remaining performance obligation | $ 1,020,100 |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2025-12-28 | |
Future estimated revenue to be recognized related to performance obligations | |
Duration of expected recognition period for remaining performance obligation | |
Revenue, remaining performance obligation | $ 2,778,800 |
Investment in Leasing Operati_3
Investment in Leasing Operations: Summary of Leasing Operations (Details) - USD ($) | Sep. 25, 2021 | Dec. 26, 2020 |
Direct financing and sales-type leases: | ||
Minimum lease payments receivable | $ 5,111,300 | $ 12,536,300 |
Estimated unguaranteed residual value of equipment | 1,643,300 | 2,950,100 |
Unearned lease income net of initial direct costs deferred | (611,100) | (1,439,500) |
Security deposits | (1,494,500) | (2,169,000) |
Equipment installed on leases not yet commenced | 431,800 | 1,634,400 |
Total investment in direct financing and sales-type leases | 5,080,800 | 13,512,300 |
Allowance for credit losses | (102,900) | (270,200) |
Net investment in direct financing and sales-type leases | 4,977,900 | 13,242,100 |
Operating leases: | ||
Operating lease assets | 469,800 | 599,100 |
Less accumulated depreciation and amortization | (406,100) | (580,100) |
Net investment in operating leases | 63,700 | 19,000 |
Total net investment in leasing operations | 5,041,600 | 13,261,100 |
Net investment in leases - current | 3,884,600 | 8,687,500 |
Net investment in leases - long-term | 1,157,000 | $ 4,573,600 |
Net investment in leases - long-term | $ 1,100,000 |
Investment in Leasing Operati_4
Investment in Leasing Operations: Minimum Lease Payments Receivable (Details) - USD ($) | Sep. 25, 2021 | Dec. 26, 2020 |
Direct Financing and Sales-Type Leases, Minimum Lease Payments Receivable | ||
2021 | $ 1,442,000 | |
2022 | 3,538,900 | |
2023 | 126,900 | |
2024 | 3,500 | |
Total | 5,111,300 | $ 12,536,300 |
Direct Financing and Sales-Type Leases, Income Amortization | ||
2021 | 278,200 | |
2022 | 321,600 | |
2023 | 11,200 | |
2024 | 100 | |
Total | $ 611,100 |
Investment in Leasing Operati_5
Investment in Leasing Operations: Credit Losses (Details) - USD ($) | 3 Months Ended | 9 Months Ended | |||
Sep. 25, 2021 | Sep. 26, 2020 | Sep. 25, 2021 | Sep. 26, 2020 | Dec. 26, 2020 | |
Activity in the allowance for credit losses for leasing operations | |||||
Balance at beginning of period | $ 270,200 | $ 580,600 | |||
Provisions for credit losses | $ (55,900) | $ (339,600) | (167,300) | 164,300 | |
Recoveries | (12,400) | ||||
Deductions for amounts written-off | (148,900) | ||||
Balance at end of period | 102,900 | $ 583,600 | 102,900 | $ 583,600 | |
Investment In Leases | |||||
Total investment in direct financing and sales-type leases | 5,080,800 | 5,080,800 | $ 13,512,300 | ||
Allowance for Credit Losses | |||||
Total | 102,900 | 102,900 | 270,200 | ||
Investment in leases | |||||
Investment In Leases | |||||
Collectively evaluated for loss potential | 5,080,800 | 5,080,800 | 13,512,300 | ||
Total investment in direct financing and sales-type leases | 5,080,800 | 5,080,800 | 13,512,300 | ||
Allowance for Credit Losses | |||||
Collectively evaluated for loss potential | 102,900 | 102,900 | 270,200 | ||
Total | $ 102,900 | $ 102,900 | $ 270,200 |
Investment in Leasing Operati_6
Investment in Leasing Operations: Investment Aging (Details) - USD ($) | Sep. 25, 2021 | Dec. 26, 2020 |
Investment in Leasing Operations: | ||
0-60 Days Delinquent and Accruing | $ 5,080,800 | $ 13,512,300 |
Total investment in direct financing and sales-type leases | $ 5,080,800 | $ 13,512,300 |
Investment in Leasing Operati_7
Investment in Leasing Operations: Leasing Income (Details) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 25, 2021 | Sep. 26, 2020 | Sep. 25, 2021 | Sep. 26, 2020 | |
Leasing income | ||||
Interest income on direct financing and sales-type leases | $ 362,200 | $ 839,600 | $ 1,464,700 | $ 2,947,900 |
Selling profit (loss) at commencement of sales-type leases | 164,300 | 267,700 | 1,594,300 | 1,453,600 |
Operating lease income | 436,700 | 668,600 | 1,397,500 | 1,758,500 |
Income on sales of equipment under lease | 988,500 | 913,400 | 3,214,000 | 5,078,300 |
Other | 314,500 | 6,500 | 681,300 | 802,500 |
Leasing income | $ 2,266,200 | $ 2,695,800 | $ 8,351,800 | $ 12,040,800 |
Earnings Per Share_ (Details)
Earnings Per Share: (Details) - shares | 3 Months Ended | 9 Months Ended | ||
Sep. 25, 2021 | Sep. 26, 2020 | Sep. 25, 2021 | Sep. 26, 2020 | |
Earnings Per Share: | ||||
Denominator for basic EPS - weighted average common shares | 3,635,055 | 3,730,490 | 3,688,419 | 3,710,112 |
Dilutive shares associated with option plans | 147,818 | 127,212 | 140,903 | 147,642 |
Denominator for diluted EPS - weighted average common shares and dilutive potential common shares | 3,782,873 | 3,857,702 | 3,829,322 | 3,857,754 |
Options excluded from EPS calculation - anti-dilutive (in shares) | 3,038 | 11,979 | 6,833 | 11,057 |
Shareholders' Equity (Deficit_3
Shareholders' Equity (Deficit): Dividends and Repurchase of Common Stock (Details) - $ / shares | Jul. 14, 2021 | Apr. 14, 2021 | Jan. 27, 2021 | Sep. 25, 2021 |
Dividends | ||||
Cash dividends declared and paid (in dollars per share) | $ 0.45 | $ 0.45 | $ 0.25 | |
Common Stock Repurchase Program | ||||
Repurchase of Common Stock | ||||
Number of shares repurchased | 147,819 | |||
Number of additional shares that can be repurchased | 382,785 |
Shareholders' Equity (Deficit_4
Shareholders' Equity (Deficit): Stock Option Plans and Stock-Based Compensation (Details) - Stock options - USD ($) | 9 Months Ended | 12 Months Ended | |
Sep. 25, 2021 | Sep. 26, 2020 | Dec. 26, 2020 | |
Number of Shares | |||
Outstanding at the beginning of the period (in shares) | 393,488 | ||
Granted (in shares) | 34,000 | ||
Exercised (in shares) | (15,329) | ||
Forfeited (in shares) | (2,700) | ||
Outstanding at the end of the period (in shares) | 409,459 | 393,488 | |
Exercisable at the end of the period (in shares) | 287,729 | ||
Weighted Average Exercise Price | |||
Outstanding at the beginning of the period (in dollars per share) | $ 113.19 | ||
Granted (in dollars per share) | 191.82 | ||
Exercised (in dollars per share) | 84.76 | ||
Forfeited (in dollars per share) | 151.06 | ||
Outstanding at the end of the period (in dollars per share) | 120.54 | $ 113.19 | |
Exercisable at the end of the period (in dollars per share) | $ 99.03 | ||
Weighted Average Remaining Contractual Life (years) | |||
Outstanding | 5 years 3 months 14 days | 5 years 7 months 9 days | |
Exercisable at the end of the period | 3 years 11 months 4 days | ||
Intrinsic Value | |||
Outstanding | $ 39,222,800 | $ 27,864,900 | |
Exercisable at the end of the period | $ 33,749,500 | ||
Weighted average assumptions and results used in estimation of fair value of options granted | |||
Risk free interest rate (as a percent) | 0.90% | 0.40% | |
Expected life (years) | 6 years | 6 years | |
Expected volatility (as a percent) | 25.07% | 25.03% | |
Dividend yield (as a percent) | 2.74% | 1.92% | |
Option fair value (in dollars per share) | $ 32.70 | $ 26.55 | |
Additional disclosures | |||
Compensation expense | $ 1,074,200 | $ 929,900 | |
Total unrecognized compensation expense | $ 2,800,000 | ||
Weighted average period for recognition of unrecognized compensation expense | 2 years 6 months |
Debt_ Line of Credit (Details)
Debt: Line of Credit (Details) - Line of Credit - USD ($) $ in Millions | Sep. 30, 2021 | Sep. 25, 2021 |
Line of Credit | ||
Maximum amount of additional term notes available for issuance | $ 30 | |
Borrowings outstanding | $ 0 | |
Line of credit available for additional borrowings | $ 25 |
Debt_ Notes Payable (Details)
Debt: Notes Payable (Details) - Prudential Investment Management, Inc - USD ($) | 1 Months Ended | 9 Months Ended | ||
Sep. 30, 2021 | Sep. 25, 2021 | Aug. 31, 2017 | May 31, 2015 | |
Notes Payable. | ||||
Notes Payable | ||||
Amount of additional senior secured notes available for issuance | $ 30,000,000 | |||
Principal amount outstanding | $ 48,750,000 | |||
Minimum prepayment | 1,000,000 | |||
Series A Notes | ||||
Notes Payable | ||||
Principal amount outstanding | $ 11,250,000 | |||
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 | $ 7,500,000 | |||
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 | |||
Series C Notes | ||||
Notes Payable | ||||
Note payable, face amount | $ 30,000,000 | |||
Term of notes payable | 7 years | |||
Interest rate (as a percent) | 3.18% |
Operating Leases_ (Details)
Operating Leases: (Details) - USD ($) | 9 Months Ended | |
Sep. 25, 2021 | Sep. 26, 2020 | |
Operating Leases: | ||
Remaining lease term | 8 years 3 months | |
Discount rate (as a percent) | 5.50% | |
Rent expense | $ 879,200 | $ 896,400 |
Maturities of operating lease liabilities: | ||
2021 | 184,000 | |
2022 | 742,900 | |
2023 | 763,300 | |
2024 | 784,400 | |
2025 | 806,000 | |
Thereafter | 3,452,600 | |
Total | 6,733,200 | |
Less imputed interest | (1,315,700) | |
Present value of lease liabilities | 5,417,500 | |
Operating lease liability | ||
Operating lease liability, current | $ 500,000 | |
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 | $ 539,100 | $ 524,600 |
Segment Reporting_ (Details)
Segment Reporting: (Details) | 3 Months Ended | 9 Months Ended | |||
Sep. 25, 2021USD ($) | Sep. 26, 2020USD ($) | Sep. 25, 2021USD ($)item | Sep. 26, 2020USD ($) | Dec. 26, 2020USD ($) | |
Segment Reporting | |||||
Number of reportable business segments | item | 2 | ||||
Total revenue | $ 20,153,400 | $ 18,277,000 | $ 57,841,900 | $ 49,266,500 | |
Total operating income | 13,789,200 | 12,497,800 | 38,423,100 | 29,277,400 | |
Total depreciation and amortization | 105,600 | 120,700 | 328,800 | 366,700 | |
Total identifiable assets | 54,971,800 | 54,971,800 | $ 31,343,200 | ||
Operating | Franchising | |||||
Segment Reporting | |||||
Total revenue | 17,887,200 | 15,581,200 | 49,490,100 | 37,225,700 | |
Total operating income | 12,330,200 | 10,789,900 | 33,601,600 | 22,601,000 | |
Total depreciation and amortization | 59,400 | 70,800 | 187,600 | 216,100 | |
Total identifiable assets | 3,953,200 | 3,953,200 | 4,848,300 | ||
Operating | Leasing | |||||
Segment Reporting | |||||
Total revenue | 2,266,200 | 2,695,800 | 8,351,800 | 12,040,800 | |
Total operating income | 1,459,000 | 1,707,900 | 4,821,500 | 6,676,400 | |
Total depreciation and amortization | 46,200 | $ 49,900 | 141,200 | $ 150,600 | |
Total identifiable assets | 5,691,100 | 5,691,100 | 14,462,600 | ||
Unallocated | |||||
Segment Reporting | |||||
Total identifiable assets | $ 45,327,500 | $ 45,327,500 | $ 12,032,300 |
Subsequent Events_ (Details)
Subsequent Events: (Details) - Subsequent Event $ / shares in Units, $ in Millions | Oct. 13, 2021USD ($)$ / shares |
Subsequent Events | |
Special cash dividend (in dollars per share) | $ / shares | $ 7.50 |
Special cash dividend | $ | $ 27.2 |