Winmark Corporation posted net income for the second quarter of $650,400, or 11 cents per share diluted, compared to net income of $542,600, or 8 cents per share diluted, in 2005. Net revenues from merchandise sales were down 53.9% to $790,000 from $1.7 million during the same quarter last year as the company transitions to more franchise locations and less owned-retail.
Franchise fees more than doubled during the quarter to $460,700 and leasing income quadrupled to $424,900. Royalties increased 6.3% to $4.5 million during the second quarter.
For the six months ended July 1, 2006, net income was $1.8 million, or 29 cents per share diluted, compared to net income of $1.2 million, or 19 cents per share diluted, for the same period last year. Royalties increased 9.1% to $9.5 million for the six-month year to-date.
John L. Morgan, chairman and CEO, stated, “During the second quarter the franchising business continued its modest growth and our leasing businesses added assets at an acceptable level. We launched a $50 million subordinated debt offering which, when combined with our bank line of credit and cash flow from operations will allow us to finance our growth for the foreseeable future.”
