Exhibit 99.1

 

Picture 1

 

 

 

 

 

Contact:Brett D. Heffes 

763/520-8500

 

 

 

 

FOR IMMEDIATE RELEASE

 

WINMARK CORPORATION ANNOUNCES YEAR END RESULTS

 

Minneapolis, MN (February 26, 2020)   Winmark Corporation (Nasdaq: WINA) announced today net income for the year ended December  28, 2019 of $32,149,300 or $7.84 per share diluted compared to net income of $30,125,500 or $7.26 per share diluted in 2018. The fourth quarter 2019 net income was $8,461,400 or $2.08 per share diluted, compared to net income of $7,657,800 or $1.83 per share diluted, for the same period last year. Revenues for the year ended December 28, 2019 were $73,298,900, up from $72,511,100 in 2018.

 

“Our increased operating results in both the fourth quarter and full year 2019 were due to the improved performance of our core franchising business,” commented Brett D. Heffes, Chief Executive Officer.

 

Winmark Corporation creates, supports and finances business. At December 28, 2019, there were 1,256 franchises in operation under the brands Plato’s Closet®, Once Upon A Child®, Play It Again Sports®, Style Encore® and Music Go Round®.  An additional 38 retail franchises have been awarded but are not open.

 

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.  Such forward-looking statements are only predictions or statements of intention subject to risks and uncertainties and actual events or results could differ materially from those anticipated.  Because actual result may differ, shareholders and prospective investors are cautioned not to place undue reliance on such forward-looking statements.

 

 

WINMARK CORPORATION

CONDENSED BALANCE SHEETS

(unaudited)

 

 

 

 

 

 

 

 

 

    

December 28, 2019

    

December 29, 2018

ASSETS

Current Assets:

 

 

    

 

 

 

 Cash and cash equivalents

 

$

25,130,300

 

$

2,496,000

 Restricted cash

 

 

50,000

 

 

80,000

 Receivables, net

 

 

1,669,500

 

 

1,553,100

 Net investment in leases - current

 

 

12,800,100

 

 

18,547,500

 Income tax receivable

 

 

497,900

 

 

565,500

 Inventories

 

 

86,000

 

 

107,600

 Prepaid expenses

 

 

968,100

 

 

901,600

     Total current assets

 

 

41,201,900

 

 

24,251,300

 

 

 

 

 

 

 

 Net investment in leases – long-term

 

 

12,505,500

 

 

20,455,500

 Property and equipment, net

 

 

2,772,600

 

 

866,200

 Operating lease right of use asset

 

 

3,595,200

 

 

 —

 Goodwill

 

 

607,500

 

 

607,500

 Other assets

 

 

492,500

 

 

482,600

 Deferred income taxes

 

 

667,000

 

 

 —

 

 

$

61,842,200

 

$

46,663,100

 

 

 

 

 

 

 

LIABILITIES AND SHAREHOLDERS’ EQUITY (DEFICIT)

Current Liabilities:

 

 

 

 

 

 

 Notes payable, net

 

$

3,736,100

 

$

3,236,100

 Accounts payable

 

 

1,015,000

 

 

1,351,800

 Accrued liabilities

 

 

2,783,100

 

 

3,128,600

 Discounted lease rentals

 

 

2,680,700

 

 

3,021,900

 Deferred revenue

 

 

1,717,000

 

 

1,744,900

     Total current liabilities

 

 

11,931,900

 

 

12,483,300

Long-Term Liabilities:

 

 

 

 

 

 

 Notes payable, net

 

 

21,868,800

 

 

25,604,900

 Discounted lease rentals

 

 

836,900

 

 

2,723,500

 Deferred revenue

 

 

7,858,500

 

 

8,432,400

 Operating lease liabilities

 

 

5,846,100

 

 

 —

 Other liabilities

 

 

1,051,700

 

 

1,079,200

 Deferred income taxes

 

 

 —

 

 

1,148,300

     Total long-term liabilities

 

 

37,462,000

 

 

38,988,300

Shareholders’ Equity (Deficit):

 

 

 

 

 

 

Common stock, no par, 10,000,000 shares authorized,
3,947,858 and 3,907,686 shares issued and outstanding

 

 

11,929,300

 

 

4,425,600

 Retained earnings (accumulated deficit)

 

 

519,000

 

 

(9,234,100)

     Total shareholders’ equity (deficit)

 

 

12,448,300

 

 

(4,808,500)

 

 

$

61,842,200

 

$

46,663,100

 

 

 

Winmark Corporation

CONDENSED STATEMENTS OF OPERATIONS

(Unaudited)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Quarter Ended

 

Fiscal Year Ended

 

 

 

Dec. 28, 2019

 

Dec. 29, 2018

 

Dec. 28, 2019

 

Dec. 29, 2018

 

Revenue:

    

 

 

    

 

 

    

 

 

    

 

 

    

 Royalties

 

$

13,198,400

 

$

12,488,600

 

$

51,421,800

 

$

48,224,500

 

 Leasing income

 

 

3,322,000

 

 

3,182,000

 

 

16,055,800

 

 

18,176,500

 

 Merchandise sales

 

 

581,500

 

 

562,900

 

 

2,618,800

 

 

2,903,100

 

 Franchise fees

 

 

357,800

 

 

418,000

 

 

1,540,900

 

 

1,580,300

 

 Other

 

 

422,900

 

 

420,300

 

 

1,661,600

 

 

1,626,700

 

              Total revenue

 

 

17,882,600

 

 

17,071,800

 

 

73,298,900

 

 

72,511,100

 

Cost of merchandise sold

 

 

545,300

 

 

506,100

 

 

2,469,700

 

 

2,741,100

 

Leasing expense

 

 

389,100

 

 

160,100

 

 

2,031,100

 

 

1,929,300

 

Provision for credit losses

 

 

(102,200)

 

 

(109,800)

 

 

(78,300)

 

 

38,600

 

Selling, general and administrative expenses

 

 

6,107,400

 

 

6,335,800

 

 

25,745,300

 

 

26,038,300

 

              Income from operations

 

 

10,943,000

 

 

10,179,600

 

 

43,131,100

 

 

41,763,800

 

Interest expense

 

 

(382,400)

 

 

(468,900)

 

 

(1,731,100)

 

 

(2,447,500)

 

Interest and other income / expense

 

 

73,300

 

 

(19,900)

 

 

67,400

 

 

(33,200)

 

              Income before income taxes

 

 

10,633,900

 

 

9,690,800

 

 

41,467,400

 

 

39,283,100

 

Provision for income taxes

 

 

(2,172,500)

 

 

(2,033,000)

 

 

(9,318,100)

 

 

(9,157,600)

 

Net income

 

$

8,461,400

 

$

7,657,800

 

$

32,149,300

 

$

30,125,500

 

Earnings per share - basic

 

$

2.18

 

$

1.96

 

$

8.37

 

$

7.77

 

Earnings per share - diluted

 

$

2.08

 

$

1.83

 

$

7.84

 

$

7.26

 

Weighted average shares outstanding - basic

 

 

3,874,570

 

 

3,906,657

 

 

3,840,638

 

 

3,874,757

 

Weighted average shares outstanding - diluted

 

 

4,065,566

 

 

4,176,527

 

 

4,100,629

 

 

4,149,779

 

 

 

 

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