MINNEAPOLIS , April 23 /PRNewswire-FirstCall/ -- Winmark Corporation (Nasdaq: WINA) announced today net income for the quarter ended March 31, 2007 of $662,200 (or $.12 per share diluted) compared to net income of $1,113,300 (or $.18 per share diluted) in the first quarter of 2006.
John L. Morgan, Chairman and Chief Executive Officer, stated, 'Our results in the first quarter continue to be impacted by the ramp up of our two leasing companies Wirth Business Credit and Winmark Capital. Our franchise business performed adequately despite getting off to a slow start. The first quarter of last year included a $360,000 non-operating gain included in interest and other income.'
Winmark Corporation creates, supports and finances business. At March 31, 2007 , there were 846 franchises in operation under the brands Play It Again Sports(R), Once Upon A Child(R), Plato's Closet(R), Music Go Round(R) and Wirth Business Credit(TM). An additional 56 franchises have been awarded but are not open. In addition, at March 31, 2007 , the Company had loans and leases equal to $26.8 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, 2007 December 30, 2006
ASSETS
Current Assets:
Cash and cash equivalents $1,020,600 $1,037,800
Receivables, less allowance for
doubtful accounts of $52,000
and $66,900 2,681,100 2,203,500
Investment in direct finance leases 6,776,900 5,777,400
Income tax receivable 653,300 812,700
Inventories 96,000 68,700
Prepaid expenses 1,201,900 1,435,100
Deferred income taxes 191,500 191,500
Total current assets 12,621,300 11,526,700
Long-term investment
in leasing operations 16,036,200 12,474,000
Long-term investments 11,500,000 11,500,000
Long-term receivables, net 68,200 73,800
Property and equipment, net 609,200 573,500
Other assets, net 625,800 625,800
Deferred income taxes 684,500 832,300
$42,145,200 $37,606,100
LIABILITIES AND SHAREHOLDERS' EQUITY
Current Liabilities:
Line of credit $9,700,000 $600,000
Current renewable subordinated notes 1,353,400 3,239,600
Accounts payable 1,365,300 1,608,100
Accrued liabilities 1,793,300 2,029,700
Current discounted lease rentals 147,100 157,300
Rents received in advance 688,200 479,300
Current deferred revenue 1,177,200 1,116,100
Total current liabilities 16,224,500 9,230,100
Long-term renewable subordinated notes 12,731,600 12,138,600
Long-term discounted lease rentals - 41,000
Long-term deferred revenue 452,600 441,400
Shareholder's Equity:
Common stock, no par, 10,000,000 shares
authorized, 5,467,445 and 5,657,042
shares issued and outstanding 84,800 550,000
Retained earnings 12,651,700 15,205,000
Total shareholders' equity 12,736,500 15,755,000
$42,145,200 $37,606,100
WINMARK CORPORATION
CONDENSED STATEMENTS OF OPERATIONS
(unaudited)
Three Months Ended
March 31, 2007 April 1, 2006
REVENUE:
Royalties $5,152,900 $5,043,800
Merchandise sales 1,259,100 1,290,700
Leasing income 775,700 261,800
Franchise fees 300,000 215,000
Other 139,200 162,000
Total revenue 7,626,900 6,973,300
COST OF MERCHANDISE SOLD 1,207,200 1,239,100
LEASING EXPENSE 135,800 3,800
SELLING, GENERAL AND ADMINISTRATIVE EXPENSES 4,993,700 4,321,400
Income from operations 1,290,200 1,409,000
INTEREST EXPENSE (333,000) -
INTEREST AND OTHER INCOME 129,400 456,100
Income before income taxes 1,086,600 1,865,100
PROVISION FOR INCOME TAXES (424,400) (751,800)
NET INCOME $662,200 $1,113,300
EARNINGS PER SHARE - BASIC $.12 $.18
EARNINGS PER SHARE - DILUTED $.12 $.18
WEIGHTED AVERAGE SHARES OUTSTANDING - BASIC 5,584,731 6,030,371
WEIGHTED AVERAGE SHARES OUTSTANDING - DILUTED 5,716,521 6,270,083
SOURCE Winmark Corporation
