エドガーで原本を確認する
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934
Date of report (Date of earliest event reported): April 17, 2024
Winmark Corporation
(Exact Name of Registrant as Specified in Its Charter)
Minnesota
(State or Other Jurisdiction of Incorporation)
000-22012 |
41-1622691 |
(Commission File Number) |
(I.R.S. Employer Identification Number) |
605 Highway 169 North, Suite 400, Minneapolis, Minnesota 55441
(Address of Principal Executive Offices) (Zip Code)
(763) 520-8500
(Registrant’s Telephone Number, Including Area Code)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
☐Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
☐Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
☐ |
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
☐ |
Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Securities registered pursuant to Section 12(b) of the Act:
Title of each class: |
Trading Symbol |
Name of each exchange on which registered: |
Common Stock, no par value per share |
WINA |
Nasdaq Global Market |
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging growth company ☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Item 2.02Results of Operations and Financial Condition
On April 17, 2024, Winmark Corporation (the “Company”) announced in a press release its results of operations and financial condition for the first quarter ended March 30, 2024. A copy of the press release is attached as Exhibit 99.1 of this Current Report on Form 8-K.
Item 7.01Regulation FD Disclosure
On April 17, 2024, the Company announced in a press release its results of operations and financial condition for the first quarter ended March 30, 2024. A copy of the press release is attached as Exhibit 99.1 of this Current Report on Form 8-K.
On April 17, 2024 the Company also announced in a press release that its Board of Directors has approved the payment of a cash dividend to its shareholders. The quarterly dividend of $0.90 per share will be paid on June 3, 2024 to shareholders of record on the close of business on May 15, 2024. Future dividends will be subject to Board approval. A copy of the press release is attached as Exhibit 99.2 of this Current Report of Form 8-K
Item 8.01Other Events
On April 17, 2024 the Company announced in a press release that its Board of Directors has approved the payment of a cash dividend to its shareholders. The quarterly dividend of $0.90 per share will be paid on June 3, 2024 to shareholders of record on the close of business on May 15, 2024. Future dividends will be subject to Board approval. A copy of the press release is attached as Exhibit 99.2 of this Current Report of Form 8-K.
Item 9.01Financial Statements and Exhibits
(d)Exhibits
|
99.1 99.2 |
|
First Quarter Results Press Release dated April 17, 2024 Quarterly Cash Dividend Press Release dated April 17,2024 |
104 |
|
Cover Page Interactive Data File (embedded within the Inline XBRL Document and incorporated as Exhibit 101) |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
|
WINMARK CORPORATION |
|
|
|
|
Date: April 17, 2024 |
By: |
/s/ Anthony D. Ishaug |
|
Anthony D. Ishaug |
|
|
Chief Financial Officer and Treasurer |
|
Exhibit 99.1
Contact:Anthony D. Ishaug
763/520-8500
FOR IMMEDIATE RELEASE
WINMARK CORPORATION ANNOUNCES FIRST QUARTER RESULTS
Minneapolis, MN (April 17, 2024) - Winmark Corporation (Nasdaq: WINA) announced today net income for the quarter ended March 30, 2024 of $8,819,000 or $2.41 per share diluted compared to net income of $8,942,700 or $2.49 per share diluted in 2023. Results during the quarter were impacted by the Company’s decision in May 2021 to run-off its leasing portfolio
“Performance during the first quarter was adequate,” 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 30, 2024, there were 1,327 franchises in operation and over 2,800 available territories. An additional 73 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 30, 2024 |
|
December 30, 2023 |
||
ASSETS | ||||||
Current Assets: |
|
|
|
|
|
|
Cash and cash equivalents |
|
$ |
22,872,200 |
|
$ |
13,361,500 |
Restricted cash |
|
|
— |
|
|
25,000 |
Receivables, net |
|
|
1,688,600 |
|
|
1,475,300 |
Net investment in leases - current |
|
|
34,100 |
|
|
75,100 |
Income tax receivable |
|
|
— |
|
|
31,400 |
Inventories |
|
|
420,900 |
|
|
386,100 |
Prepaid expenses |
|
|
1,265,600 |
|
|
1,392,100 |
Total current assets |
|
|
26,281,400 |
|
|
16,746,500 |
|
|
|
|
|
|
|
Property and equipment, net |
|
|
1,649,400 |
|
|
1,669,800 |
Operating lease right of use asset |
|
|
2,351,700 |
|
|
2,425,900 |
Intangible assets, net |
|
|
2,905,800 |
|
|
2,994,300 |
Goodwill |
|
|
607,500 |
|
|
607,500 |
Other assets |
|
|
487,800 |
|
|
471,300 |
Deferred income taxes |
|
|
4,052,400 |
|
|
4,052,400 |
|
|
$ |
38,336,000 |
|
$ |
28,967,700 |
|
|
|
|
|
|
|
LIABILITIES AND SHAREHOLDERS’ EQUITY (DEFICIT) | ||||||
Current Liabilities: |
|
|
|
|
|
|
Notes payable, net |
|
$ |
4,217,900 |
|
$ |
4,217,900 |
Accounts payable |
|
|
1,296,300 |
|
|
1,719,400 |
Income tax payable |
|
|
2,469,000 |
|
|
— |
Accrued liabilities |
|
|
4,734,000 |
|
|
2,858,200 |
Deferred revenue |
|
|
1,657,300 |
|
|
1,666,100 |
Total current liabilities |
|
|
14,374,500 |
|
|
10,461,600 |
Long-Term Liabilities: |
|
|
|
|
|
|
Line of credit/Term loan |
|
|
30,000,000 |
|
|
30,000,000 |
Notes payable, net |
|
|
33,794,300 |
|
|
34,848,800 |
Deferred revenue |
|
|
7,744,400 |
|
|
7,657,500 |
Operating lease liabilities |
|
|
3,566,600 |
|
|
3,715,800 |
Other liabilities |
|
|
1,435,300 |
|
|
1,440,100 |
Total long-term liabilities |
|
|
76,540,600 |
|
|
77,662,200 |
Shareholders’ Equity (Deficit): |
|
|
|
|
|
|
Common stock, no par, 10,000,000 shares authorized, |
|
|
8,324,700 |
|
|
7,768,800 |
Retained earnings (accumulated deficit) |
|
|
(60,903,800) |
|
|
(66,924,900) |
Total shareholders’ equity (deficit) |
|
|
(52,579,100) |
|
|
(59,156,100) |
|
|
$ |
38,336,000 |
|
$ |
28,967,700 |
2
WINMARK CORPORATION
CONDENSED STATEMENTS OF OPERATIONS
(Unaudited)
|
|
Three Months Ended |
|
|
||||
|
|
March 30, 2024 |
|
April 1, 2023 |
|
|
||
Revenue: |
|
|
|
|
|
|
|
|
Royalties |
|
$ |
17,268,700 |
|
$ |
16,747,700 |
|
|
Leasing income |
|
|
836,800 |
|
|
1,637,000 |
|
|
Merchandise sales |
|
|
1,110,500 |
|
|
1,276,000 |
|
|
Franchise fees |
|
|
364,500 |
|
|
378,200 |
|
|
Other |
|
|
529,000 |
|
|
484,700 |
|
|
Total revenue |
|
|
20,109,500 |
|
|
20,523,600 |
|
|
Cost of merchandise sold |
|
|
1,038,900 |
|
|
1,187,300 |
|
|
Leasing expense |
|
|
36,600 |
|
|
316,400 |
|
|
Provision for credit losses |
|
|
(1,500) |
|
|
(4,600) |
|
|
Selling, general and administrative expenses |
|
|
6,817,300 |
|
|
6,636,100 |
|
|
Income from operations |
|
|
12,218,200 |
|
|
12,388,400 |
|
|
Interest expense |
|
|
(737,700) |
|
|
(797,600) |
|
|
Interest and other income |
|
|
187,900 |
|
|
125,700 |
|
|
Income before income taxes |
|
|
11,668,400 |
|
|
11,716,500 |
|
|
Provision for income taxes |
|
|
(2,849,400) |
|
|
(2,773,800) |
|
|
Net income |
|
$ |
8,819,000 |
|
$ |
8,942,700 |
|
|
Earnings per share - basic |
|
$ |
2.52 |
|
$ |
2.58 |
|
|
Earnings per share - diluted |
|
$ |
2.41 |
|
$ |
2.49 |
|
|
Weighted average shares outstanding - basic |
|
|
3,497,261 |
|
|
3,460,720 |
|
|
Weighted average shares outstanding - diluted |
|
|
3,661,367 |
|
|
3,594,234 |
|
|
3
WINMARK CORPORATION
CONDENSED STATEMENTS OF CASH FLOWS
(Unaudited)
|
|
Three Months Ended |
|
||||
|
|
March 30, 2024 |
|
April 1, 2023 |
|
||
OPERATING ACTIVITIES: |
|
|
|
|
|
|
|
Net income |
|
$ |
8,819,000 |
|
$ |
8,942,700 |
|
Adjustments to reconcile net income to net cash provided by operating activities: |
|
|
|
|
|
|
|
Depreciation of property and equipment |
|
|
108,300 |
|
|
104,000 |
|
Amortization of intangible assets |
|
|
88,500 |
|
|
88,500 |
|
Provision for credit losses |
|
|
(1,500) |
|
|
(4,600) |
|
Compensation expense related to stock options |
|
|
485,900 |
|
|
475,900 |
|
Deferred income taxes |
|
|
— |
|
|
24,200 |
|
Operating lease right of use asset amortization |
|
|
74,200 |
|
|
66,900 |
|
Tax benefits on exercised stock options |
|
|
— |
|
|
77,700 |
|
Change in operating assets and liabilities: |
|
|
|
|
|
|
|
Receivables |
|
|
(213,300) |
|
|
(143,200) |
|
Principal collections on lease receivables |
|
|
62,300 |
|
|
423,800 |
|
Income tax receivable/payable |
|
|
2,500,400 |
|
|
2,490,900 |
|
Inventories |
|
|
(34,800) |
|
|
356,300 |
|
Prepaid expenses |
|
|
126,500 |
|
|
422,400 |
|
Other assets |
|
|
(16,600) |
|
|
(40,400) |
|
Accounts payable |
|
|
(423,100) |
|
|
(678,300) |
|
Accrued and other liabilities |
|
|
1,729,800 |
|
|
1,140,200 |
|
Rents received in advance and security deposits |
|
|
(19,700) |
|
|
(194,200) |
|
Deferred revenue |
|
|
78,100 |
|
|
297,700 |
|
Net cash provided by operating activities |
|
|
13,364,000 |
|
|
13,850,500 |
|
INVESTING ACTIVITIES: |
|
|
|
|
|
|
|
Purchase of property and equipment |
|
|
(87,900) |
|
|
(5,500) |
|
Net cash used for investing activities |
|
|
(87,900) |
|
|
(5,500) |
|
FINANCING ACTIVITIES: |
|
|
|
|
|
|
|
Payments on notes payable |
|
|
(1,062,500) |
|
|
(1,062,500) |
|
Proceeds from exercises of stock options |
|
|
70,000 |
|
|
590,400 |
|
Dividends paid |
|
|
(2,797,900) |
|
|
(2,421,900) |
|
Net cash used for financing activities |
|
|
(3,790,400) |
|
|
(2,894,000) |
|
NET INCREASE (DECREASE) IN CASH, CASH EQUIVALENTS AND RESTRICTED CASH |
|
|
9,485,700 |
|
|
10,951,000 |
|
Cash, cash equivalents and restricted cash, beginning of period |
|
|
13,386,500 |
|
|
13,680,600 |
|
Cash, cash equivalents and restricted cash, end of period |
|
$ |
22,872,200 |
|
$ |
24,631,600 |
|
SUPPLEMENTAL DISCLOSURES: |
|
|
|
|
|
|
|
Cash paid for interest |
|
$ |
725,700 |
|
$ |
791,500 |
|
Cash paid for income taxes |
|
$ |
349,100 |
|
$ |
181,200 |
|
|
|
|
|
|
|
|
|
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: | |||||||
|
|
Three Months Ended |
|
||||
|
|
March 30, 2024 |
|
April 1, 2023 |
|
||
Cash and cash equivalents |
|
$ |
22,872,200 |
|
$ |
24,551,600 |
|
Restricted cash |
|
|
— |
|
|
80,000 |
|
Total cash, cash equivalents and restricted cash |
|
$ |
22,872,200 |
|
$ |
24,631,600 |
|
4
Exhibit 99.2
Contact:Anthony D. Ishaug
763/520-8500
FOR IMMEDIATE RELEASE
WINMARK CORPORATION ANNOUNCES
INCREASE IN CASH DIVIDEND
Minneapolis, MN (April 17,2024) - Winmark Corporation (Nasdaq: WINA) announced today that its
Board of Directors has approved an increase in its regular quarterly cash dividend to shareholders. The quarterly dividend of $0.90 per share represents an increase of $0.10 from its previous dividend rate. The cash dividend will be paid June 3, 2024 to shareholders of record on the close of business on May 15, 2024. Future dividends will be subject to Board approval.
Winmark - the Resale Company®, is a nationally recognized franchising business 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 30, 2024, there were 1,327 franchises in operation and over 2,800 available territories. An additional 73 franchises have been awarded but are not open.