MINNEAPOLIS , Oct. 18 /PRNewswire-FirstCall/ -- Winmark Corporation (Nasdaq: WINA) announced today net income for the quarter ended September 29, 2007 of $1,186,200 , or $.21 per share diluted, compared to net income of $838,200 , or $.14 per share diluted, in 2006. For the nine months ended September 29, 2007 , net income was $2,395,600 , or $.43 per share diluted, compared to net income of $2,601,900 , or $.43 per share diluted, for the same period last year.
John L. Morgan, Chairman and Chief Executive Officer, stated, 'Net income for the third quarter increased over last year and the second quarter of this year due to the growth in our leased assets in both Wirth Business Credit and Winmark Capital. Our franchise brands continue to grow both in number of stores and royalties.'
Winmark Corporation creates, supports and finances business. At September 29, 2007 , there were 855 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 35 territories in operation under the Wirth Business Credit(TM) brand. An additional 46 retail franchises and 2 Wirth territories have been awarded but are not open. In addition, at September 29, 2007 , the Company had loans and leases equal to $35.2 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)
September 29, December 30,
2007 2006
ASSETS
Current Assets:
Cash and cash equivalents $812,900 $1,037,800
Receivables, less allowance for doubtful
accounts of $45,800 and $66,900 2,108,000 2,203,500
Investment in direct finance leases 9,639,300 5,777,400
Income tax receivable 783,100 812,700
Inventories 67,000 68,700
Prepaid expenses 1,017,800 1,435,100
Deferred income taxes 191,500 191,500
Total current assets 14,619,600 11,526,700
Long-term investment in leasing
operations 23,549,900 12,474,000
Long-term investments 9,500,000 11,500,000
Long-term receivables, net 96,700 73,800
Property and equipment, net 677,900 573,500
Other assets, net 625,800 625,800
Deferred income taxes 594,500 832,300
$49,664,400 $37,606,100
LIABILITIES AND SHAREHOLDERS' EQUITY
Current Liabilities:
Current line of credit $6,990,200 $600,000
Current renewable subordinated notes 2,528,000 3,239,600
Accounts payable 823,900 1,608,100
Accrued liabilities 2,104,200 2,029,700
Current discounted lease rentals 81,400 157,300
Rents received in advance 1,119,700 479,300
Current deferred revenue 1,035,400 1,116,100
Total current liabilities 14,682,800 9,230,100
Long-term line of credit 6,515,800 --
Long-term renewable subordinated notes 14,621,600 12,138,600
Long-term discounted lease rentals -- 41,000
Long-term deferred revenue 537,000 441,400
Shareholders' Equity:
Common stock, no par, 10,000,000 shares
authorized, 5,401,640 and 5,657,042 shares
issued and outstanding -- 550,000
Retained earnings 13,307,200 15,205,000
Total shareholders' equity 13,307,200 15,755,000
$49,664,400 $37,606,100
WINMARK CORPORATION
CONDENSED STATEMENTS OF OPERATIONS
(Unaudited)
Quarter Ended Nine Months Ended
September 29, September 30, September 29, September 30,
2007 2006 2007 2006
REVENUE:
Royalties $5,208,700 $4,800,000 $15,208,100 $14,320,500
Merchandise
sales 797,600 1,452,600 3,250,300 3,533,300
Leasing income 1,173,200 523,100 2,944,700 1,209,800
Franchise fees 584,100 305,000 1,301,500 980,700
Other 188,200 158,900 436,700 441,900
Total
revenue 7,951,800 7,239,600 23,141,300 20,486,200
COST OF
MERCHANDISE
SOLD 764,300 1,381,900 3,119,500 3,378,600
LEASING EXPENSE 268,700 84,500 601,900 131,200
SELLING, GENERAL
AND ADMINISTRATIVE
EXPENSES 4,729,600 4,206,300 14,812,200 12,934,600
Income from
operations 2,189,200 1,566,900 4,607,700 4,041,800
INTEREST EXPENSE (381,300) (307,900) (1,101,900) (429,300)
INTEREST AND
OTHER INCOME 122,500 145,300 423,300 746,600
Income before
income
taxes 1,930,400 1,404,300 3,929,100 4,359,100
PROVISION FOR
INCOME TAXES (744,200) (566,100) (1,533,500) (1,757,200)
NET INCOME $1,186,200 $838,200 $2,395,600 $2,601,900
EARNINGS PER
SHARE - BASIC $.22 $.15 $.44 $.45
EARNINGS PER
SHARE - DILUTED $.21 $.14 $.43 $.43
WEIGHTED AVERAGE
SHARES OUTSTANDING
- BASIC 5,437,805 5,632,042 5,490,077 5,841,047
WEIGHTED AVERAGE
SHARES OUTSTANDING
- DILUTED 5,555,770 5,853,968 5,610,951 6,056,690
SOURCE Winmark Corporation
