Winmark Corporation Announces First Quarter Results

Business Wire

16 Apr

MINNEAPOLIS, April 16, 2025--(BUSINESS WIRE)--Winmark Corporation (Nasdaq: WINA) announced today net income for the quarter ended March 29, 2025 of $9,956,400 or $2.71 per share diluted compared to net income of $8,819,000 or $2.41 per share diluted in 2024. First quarter results included $2.2 million of leasing income due to the settlement of outstanding customer litigation.

"The run-off of our leasing portfolio announced in May of 2021 is substantially complete," commented Brett D. Heffes, Chair and Chief Executive Officer.

Winmark - the Resale Company®, is a nationally recognized franchisor focused on sustainability and small business formation. We champion and guide entrepreneurs interested in operating one of our award winning resale franchises: Plato’s Closet®, Once Upon A Child®, Play It Again Sports®, Style Encore® and Music Go Round®. At March 29, 2025, there were 1,363 franchises in operation and over 2,800 available territories. An additional 79 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 29, 2025			December 28, 2024
ASSETS
Current Assets:
Cash and cash equivalents	$	21,828,800		$	12,189,800
Restricted cash		140,000			140,000
Receivables, net		2,586,400			1,336,400
Income tax receivable		—			96,400
Inventories		338,200			397,600
Prepaid expenses		881,600			1,205,400
Total current assets		25,775,000			15,365,600

Property and equipment, net		1,373,400			1,419,400
Operating lease right of use asset		2,026,600			2,108,700
Intangible assets, net		2,551,800			2,640,300
Goodwill		607,500			607,500
Other assets		516,400			491,200
Deferred income taxes		4,211,800			4,211,800
	$	37,062,500		$	26,844,500

LIABILITIES AND SHAREHOLDERS’ EQUITY (DEFICIT)
Current Liabilities:
Accounts payable	$	1,544,100		$	1,562,000
Income tax payable		2,883,600			—
Accrued liabilities		3,597,900			1,866,200
Deferred revenue		1,666,800			1,659,700
Total current liabilities		9,692,400			5,087,900
Long-Term Liabilities:
Line of credit/Term loan		30,000,000			30,000,000
Notes payable, net		29,947,400			29,942,800
Deferred revenue		8,249,800			8,027,600
Operating lease liabilities		2,929,500			3,092,800
Other liabilities		2,184,700			1,739,500
Total long-term liabilities		73,311,400			72,802,700
Shareholders’ Equity (Deficit):
Common stock, no par, 10,000,000 shares authorized, 3,532,571 and 3,539,744 shares issued and outstanding		13,124,900			14,790,500
Retained earnings (accumulated deficit)		(59,066,200	)		(65,836,600	)
Total shareholders’ equity (deficit)		(45,941,300	)		(51,046,100	)
	$	37,062,500		$	26,844,500


WINMARK CORPORATION
CONDENSED STATEMENTS OF OPERATIONS
(Unaudited)

	Three Months Ended
	March 29, 2025			March 30, 2024
Revenue:
Royalties	$	17,774,700		$	17,268,700
Leasing income		2,307,800			836,800
Merchandise sales		941,300			1,110,500
Franchise fees		332,100			364,500
Other		563,800			529,000
Total revenue		21,919,700			20,109,500
Cost of merchandise sold		888,300			1,038,900
Leasing expense		—			36,600
Provision for credit losses		—			(1,500	)
Selling, general and administrative expenses		7,434,800			6,817,300
Income from operations		13,596,600			12,218,200
Interest expense		(613,900	)		(737,700	)
Interest and other income		149,900			187,900
Income before income taxes		13,132,600			11,668,400
Provision for income taxes		(3,176,200	)		(2,849,400	)
Net income	$	9,956,400		$	8,819,000
Earnings per share - basic	$	2.81		$	2.52
Earnings per share - diluted	$	2.71		$	2.41
Weighted average shares outstanding - basic		3,538,647			3,497,261
Weighted average shares outstanding - diluted		3,672,943			3,661,367


WINMARK CORPORATION
CONDENSED STATEMENTS OF CASH FLOWS
(Unaudited)

	Three Months Ended
	March 29, 2025			March 30, 2024
OPERATING ACTIVITIES:
Net income	$	9,956,400		$	8,819,000
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation of property and equipment		97,200			108,300
Amortization of intangible assets		88,500			88,500
Provision for credit losses		—			(1,500	)
Compensation expense related to stock options		536,600			485,900
Operating lease right of use asset amortization		82,200			74,200
Change in operating assets and liabilities:
Receivables		(1,250,000	)		(213,300	)
Principal collections on lease receivables		—			62,300
Income tax receivable/payable		2,980,000			2,500,400
Inventories		59,400			(34,800	)
Prepaid expenses		323,700			126,500
Other assets		(25,200	)		(16,600	)
Accounts payable		(18,000	)		(423,100	)
Accrued and other liabilities		2,018,300			1,729,800
Rents received in advance and security deposits		—			(19,700	)
Deferred revenue		229,300			78,100
Net cash provided by operating activities		15,078,400			13,364,000
INVESTING ACTIVITIES:
Purchase of property and equipment		(51,200	)		(87,900	)
Net cash used for investing activities		(51,200	)		(87,900	)
FINANCING ACTIVITIES:
Payments on notes payable		—			(1,062,500	)
Repurchases of common stock		(2,249,900	)		—
Proceeds from exercises of stock options		47,700			70,000
Dividends paid		(3,186,000	)		(2,797,900	)
Net cash used for financing activities		(5,388,200	)		(3,790,400	)
NET INCREASE IN CASH, CASH EQUIVALENTS AND RESTRICTED CASH		9,639,000			9,485,700
Cash, cash equivalents and restricted cash, beginning of period		12,329,800			13,386,500
Cash, cash equivalents and restricted cash, end of period	$	21,968,800		$	22,872,200
SUPPLEMENTAL DISCLOSURES:
Cash paid for interest	$	604,000		$	725,700
Cash paid for income taxes	$	196,200		$	349,100

The following table provides a reconciliation of cash, cash equivalents and restricted cash reported within the Condensed Balance Sheets to the total of the same amounts shown above:
	Year Ended
	December 28, 2024			December 30, 2023
Cash and cash equivalents	$	21,828,800		$	22,872,200
Restricted cash		140,000			—
Total cash, cash equivalents and restricted cash	$	21,968,800		$	22,872,200

View source version on businesswire.com: https://www.businesswire.com/news/home/20250416289040/en/

Contacts

Anthony D. Ishaug
763/520-8500

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Winmark Corporation Announces First Quarter Results

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