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Winmark Corporation Announces First Quarter Results

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Winmark Corporation (Nasdaq: WINA) announced today net income for the quarter ended March 27, 2021 of $9,311,100 or $2.40 per share diluted compared to net income of $7,317,000 or $1.87 per share diluted in 2020.

"The resiliency of our business model combined with the improving execution of our franchisees led to exceptional first quarter results," commented Brett D. Heffes, Chairman and Chief Executive Officer.

Winmark Corporation creates, supports and finances business. At March 27, 2021, there were 1,264 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 32 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)

March 27, 2021

December 26, 2020

ASSETS

Current Assets:

Cash and cash equivalents

$

7,959,900

$

6,659,000

Restricted cash

25,000

25,000

Receivables, net

2,096,900

1,581,900

Net investment in leases - current

8,156,900

8,687,500

Income tax receivable

221,200

Inventories

110,200

106,600

Prepaid expenses

839,900

995,200

Total current assets

19,188,800

18,276,400

Net investment in leases – long-term

2,706,900

4,573,600

Property and equipment, net

2,253,300

2,332,800

Operating lease right of use asset

3,172,100

3,226,300

Goodwill

607,500

607,500

Other assets

438,500

435,900

Deferred income taxes

2,330,600

1,890,700

$

30,697,700

$

31,343,200

LIABILITIES AND SHAREHOLDERS’ EQUITY (DEFICIT)

Current Liabilities:

Notes payable, net

$

4,236,100

$

4,236,100

Accounts payable

1,399,300

1,769,600

Income tax payable

3,159,200

Accrued liabilities

2,223,500

2,624,000

Discounted lease rentals

959,200

1,096,600

Deferred revenue

1,647,700

1,657,400

Total current liabilities

13,625,000

11,383,700

Long-Term Liabilities:

Notes payable, net

16,573,600

17,632,700

Discounted lease rentals

382,200

574,000

Deferred revenue

6,975,700

7,050,900

Operating lease liabilities

5,176,900

5,307,400

Other liabilities

768,500

773,200

Total long-term liabilities

29,876,900

31,338,200

Shareholders’ Equity (Deficit):

Common stock, no par, 10,000,000 shares authorized, 3,700,723 and 3,756,028 shares issued and outstanding

9,281,800

Retained earnings (accumulated deficit)

(12,804,200

)

(20,660,500

)

Total shareholders’ equity (deficit)

(12,804,200

)

(11,378,700

)

$

30,697,700

$

31,343,200

WINMARK CORPORATION

CONDENSED STATEMENTS OF OPERATIONS

(Unaudited)

Three Months Ended

March 27, 2021

March 28, 2020

Revenue:

Royalties

$

14,048,800

$

11,172,500

Leasing income

3,237,000

5,871,200

Merchandise sales

592,400

754,100

Franchise fees

359,000

387,400

Other

421,700

414,800

Total revenue

18,658,900

18,600,000

Cost of merchandise sold

558,800

717,700

Leasing expense

389,500

1,416,200

Provision for credit losses

(48,700

)

615,400

Selling, general and administrative expenses

5,102,300

5,748,900

Income from operations

12,657,000

10,101,800

Interest expense

(318,100

)

(525,200

)

Interest and other income

6,800

5,900

Income before income taxes

12,345,700

9,582,500

Provision for income taxes

(3,034,600

)

(2,265,500

)

Net income

$

9,311,100

$

7,317,000

Earnings per share - basic

$

2.49

$

1.97

Earnings per share - diluted

$

2.40

$

1.87

Weighted average shares outstanding - basic

3,736,676

3,711,597

Weighted average shares outstanding - diluted

3,874,227

3,911,751

View source version on businesswire.com: https://www.businesswire.com/news/home/20210414005643/en/

Contacts

Brett D. Heffes
763/520-8500