Exhibit 99.1
Contact: | John L. Morgan |
| 763/520-8500 |
FOR IMMEDIATE RELEASE
WINMARK CORPORATION ANNOUNCES
FIRST QUARTER RESULTS
Minneapolis, MN (April 18, 2012) — Winmark Corporation (Nasdaq: WINA) announced today net income for the quarter ended March 31, 2012 of $3,516,000 (or $.67 per share diluted) compared to net income of $3,026,300 (or $.58 per share diluted) in the first quarter of 2011.
John L. Morgan, Chairman and Chief Executive Officer, stated, “We are pleased with our performance during the first quarter. Our results were driven by the growth of our franchising business and continued progress in building our leasing portfolio.”
Winmark Corporation creates, supports and finances business. At March 31, 2012, there were 939 franchises in operation under the brands Plato’s Closet®, Play It Again Sports®, Once Upon A Child®, and Music Go Round®. An additional 50 retail franchises have been awarded but are not open. In addition, at March 31, 2012, the Company had a lease portfolio equal to $29.6 million.
This press release contains forward-looking statements within the meaning of the safe harbor provisions of Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), relating to future events or the future financial performance of the Company including statements with respect to our ability to finance the growth of our leasing and franchising businesses for the foreseeable future. Such forward-looking statements are only predictions or statements of intention subject to risks and uncertainties and actual events or results could differ materially from those anticipated. Because actual result may differ, shareholders and prospective investors are cautioned not to place undue reliance on such forward-looking statements.
WINMARK CORPORATION
CONDENSED BALANCE SHEETS
(unaudited)
|
| March 31, 2012 |
| December 31, 2011 |
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ASSETS | |||||||
Current Assets: |
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|
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Cash and cash equivalents |
| $ | 2,093,400 |
| $ | 9,020,100 |
|
Marketable securities |
| — |
| 1,043,800 |
| ||
Receivables, net |
| 1,282,400 |
| 1,316,200 |
| ||
Net investment in leases - current |
| 11,465,300 |
| 11,746,900 |
| ||
Income tax receivable |
| — |
| 116,500 |
| ||
Inventories |
| 69,100 |
| 68,500 |
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Prepaid expenses |
| 437,400 |
| 362,000 |
| ||
Total current assets |
| 15,347,600 |
| 23,674,000 |
| ||
Net investment in leases — long-term |
| 18,096,700 |
| 18,102,000 |
| ||
Long-term investments, net |
| 3,780,000 |
| 3,817,400 |
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Property and equipment, net |
| 1,384,000 |
| 1,474,800 |
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Other assets |
| 677,500 |
| 677,500 |
| ||
|
| $ | 39,285,800 |
| $ | 47,745,700 |
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LIABILITIES AND SHAREHOLDERS’ EQUITY | |||||||
Current Liabilities: |
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Line of credit |
| $ | 12,100,000 |
| $ | — |
|
Accounts payable |
| 1,269,800 |
| 1,460,300 |
| ||
Income taxes payable |
| 58,200 |
| — |
| ||
Accrued liabilities |
| 1,709,900 |
| 1,346,000 |
| ||
Discounted lease rentals |
| 13,900 |
| 20,800 |
| ||
Rents received in advance |
| 282,000 |
| 274,700 |
| ||
Deferred revenue |
| 1,376,800 |
| 1,212,400 |
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Deferred income taxes |
| 3,487,900 |
| 3,464,800 |
| ||
Total current liabilities |
| 20,298,500 |
| 7,779,000 |
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Long-Term Liabilities: |
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|
|
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Rents received in advance |
| 194,500 |
| 269,400 |
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Deferred revenue |
| 847,300 |
| 844,300 |
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Other liabilities |
| 1,314,200 |
| 1,389,200 |
| ||
Deferred income taxes |
| 2,607,100 |
| 2,355,100 |
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Total long-term liabilities |
| 4,963,100 |
| 4,858,000 |
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Shareholders’ Equity: |
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|
|
|
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Common stock, no par, 10,000,000 shares authorized, 5,075,954 and 4,987,643 shares issued and outstanding |
| 1,565,800 |
| 629,800 |
| ||
Accumulated other comprehensive income |
| — |
| 17,000 |
| ||
Retained earnings |
| 12,458,400 |
| 34,461,900 |
| ||
Total shareholders’ equity |
| 14,024,200 |
| 35,108,700 |
| ||
|
| $ | 39,285,800 |
| $ | 47,745,700 |
|
WINMARK CORPORATION
CONDENSED STATEMENTS OF OPERATIONS
(unaudited)
|
| Three Months Ended |
| ||||
|
| March 31, 2012 |
| March 26, 2011 |
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REVENUE: |
|
|
|
|
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Royalties |
| $ | 8,288,500 |
| $ | 7,052,800 |
|
Leasing income |
| 2,392,100 |
| 3,235,000 |
| ||
Merchandise sales |
| 709,800 |
| 501,400 |
| ||
Franchise fees |
| 285,000 |
| 75,000 |
| ||
Other |
| 158,000 |
| 240,700 |
| ||
Total revenue |
| 11,833,400 |
| 11,104,900 |
| ||
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COST OF MERCHANDISE SOLD |
| 664,300 |
| 482,900 |
| ||
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LEASING EXPENSE |
| 239,800 |
| 518,700 |
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PROVISION FOR CREDIT LOSSES |
| (53,000 | ) | 45,400 |
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SELLING, GENERAL AND ADMINISTRATIVE EXPENSES |
| 5,136,100 |
| 4,845,900 |
| ||
Income from operations |
| 5,846,200 |
| 5,212,000 |
| ||
|
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|
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LOSS FROM EQUITY INVESTMENTS |
| (37,400 | ) | (77,000 | ) | ||
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INTEREST EXPENSE |
| (69,800 | ) | (31,100 | ) | ||
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INTEREST AND OTHER INCOME |
| 46,300 |
| 17,200 |
| ||
Income before income taxes |
| 5,785,300 |
| 5,121,100 |
| ||
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PROVISION FOR INCOME TAXES |
| (2,269,300 | ) | (2,094,800 | ) | ||
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NET INCOME |
| $ | 3,516,000 |
| $ | 3,026,300 |
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EARNINGS PER SHARE - BASIC |
| $ | .70 |
| $ | .61 |
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EARNINGS PER SHARE - DILUTED |
| $ | .67 |
| $ | .58 |
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WEIGHTED AVERAGE SHARES OUTSTANDING - BASIC |
| 5,052,952 |
| 4,989,588 |
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WEIGHTED AVERAGE SHARES OUTSTANDING - DILUTED |
| 5,280,202 |
| 5,215,484 |
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