MINNEAPOLIS , July 19 /PRNewswire-FirstCall/ -- Winmark Corporation (Nasdaq: WINA) announced today net income for the quarter ended June 30, 2007 of $547,200 , or $.10 per share diluted, compared to net income of $650,400 , or $.11 per share diluted, in 2006. For the six months ended June 30, 2007 , net income was $1,209,400 , or $.21 per share diluted, compared to net income of $1,763,700 , or $.29 per share diluted, for the same period last year.
John L. Morgan, Chairman and Chief Executive Officer, stated, 'The highlight of the second quarter was the growth of our leasing portfolio. We continue to build leased assets and experienced a significant increase in our backlog. Our franchise brands including Wirth Business Credit are growing and are meeting our expectations.'
Winmark Corporation creates, supports and finances business. At June 30, 2007 , there were 843 franchises in operation under the brands Play It Again Sports(R), Once Upon A Child(R), Plato's Closet(R) and Music Go Round(R) and there were 26 territories in operation under the Wirth Business Credit(TM) brand. An additional 55 retail franchises and 4 Wirth territories have been awarded but are not open. In addition, at June 30, 2007 , the Company had loans and leases equal to $30.2 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)
June 30, 2007 December 30, 2006
ASSETS
Current Assets:
Cash and cash equivalents $1,550,300 $1,037,800
Receivables, less allowance for doubtful
accounts of $65,700 and $66,900 2,197,900 2,203,500
Investment in direct finance leases 8,155,400 5,777,400
Income tax receivable 1,059,300 812,700
Inventories 107,600 68,700
Prepaid expenses 1,022,400 1,435,100
Deferred income taxes 191,500 191,500
Total current assets 14,284,400 11,526,700
Long-term investment in leasing operations 18,099,300 12,474,000
Long-term investments 11,500,000 11,500,000
Long-term receivables, net 100,000 73,800
Property and equipment, net 685,100 573,500
Other assets, net 625,800 625,800
Deferred income taxes 594,500 832,300
$45,889,100 $37,606,100
LIABILITIES AND SHAREHOLDERS' EQUITY
Current Liabilities:
Line of Credit $12,500,000 $600,000
Current renewable subordinated notes 1,658,500 3,239,600
Accounts payable 1,132,700 1,608,100
Accrued liabilities 2,105,400 2,029,700
Current discounted lease rentals 121,000 157,300
Rents received in advance 924,300 479,300
Current deferred revenue 1,225,400 1,116,100
Total current liabilities 19,667,300 9,230,100
Long-term renewable subordinated notes 13,081,600 12,138,600
Long-term discounted lease rentals - 41,000
Long-term deferred revenue 504,500 441,400
Shareholder's Equity:
Common stock, no par, 10,000,000 shares
authorized, 5,442,778 and 5,657,042
shares issued and outstanding - 550,000
Retained earnings 12,635,700 15,205,000
Total shareholders' equity 12,635,700 15,755,000
$45,889,100 $37,606,100
WINMARK CORPORATION
CONDENSED STATEMENTS OF OPERATIONS
(Unaudited)
Quarter Ended Six Months Ended
June 30, July 1, June 30, July 1,
2007 2006 2007 2006
REVENUE:
Royalties $4,846,500 $4,476,700 $9,999,400 $9,520,500
Merchandise sales 1,193,600 790,000 2,452,700 2,080,700
Leasing income 995,800 424,900 1,771,500 686,700
Franchise fees 417,400 460,700 717,400 675,700
Other 109,300 121,000 248,500 283,000
Total revenue 7,562,600 6,273,300 15,189,500 13,246,600
COST OF MERCHANDISE SOLD 1,148,000 757,600 2,355,200 1,996,700
LEASING EXPENSE 197,400 42,900 333,200 46,700
SELLING, GENERAL AND
ADMINISTRATIVE EXPENSES 5,088,900 4,406,900 10,082,600 8,728,300
Income from operations 1,128,300 1,065,900 2,418,500 2,474,900
INTEREST EXPENSE (387,600) (121,400) (720,600) (121,400)
INTEREST AND OTHER INCOME 171,400 145,200 300,800 601,300
Income before income taxes 912,100 1,089,700 1,998,700 2,954,800
PROVISION FOR INCOME TAXES (364,900) (439,300) (789,300)(1,191,100)
NET INCOME $547,200 $650,400 $1,209,400 $1,763,700
EARNINGS PER SHARE - BASIC $.10 $.11 $.22 $.30
EARNINGS PER SHARE - DILUTED $.10 $.11 $.21 $.29
WEIGHTED AVERAGE SHARES
OUTSTANDING - BASIC 5,447,697 5,855,150 5,516,214 5,945,549
WEIGHTED AVERAGE SHARES
OUTSTANDING - DILUTED 5,560,564 6,078,964 5,638,543 6,157,944
SOURCE Winmark Corporation
