Winmark Corporation, the parent company of Play it Again Sports, reported that net income for the quarter ended March 27, 2004 of $1,360,300, or $.21 per diluted share, compared to net income of $1,122,200. or $.18 per diluted share, in the first quarter of 2003. Merchandise sales declined 31.5% to $2.6 million while franchise fees increased 42.7% to $192,600.
John L. Morgan, Chairman and Chief Executive Officer, stated, “The increase in earnings is partly due to higher revenue from royalties. This increase is the result of the hard work of our franchisees coming out of a difficult retail environment.” Mr. Morgan continued, “Starting in the second quarter of 2004, we will offer equipment leasing options to our franchise systems and other small businesses. We are excited about this new way to help our franchisees.”
WINMARK CORPORATION
CONDENSED STATEMENTS OF OPERATIONS
(unaudited)
Three Months Ended
March 27, 2004 March 29, 2003
REVENUE:
Royalties $4,629,900 $4,291,500
Merchandise sales 2,604,000 3,800,500
Franchise fees 192,600 135,000
Other 137,200 153,200
Total revenue 7,563,700 8,380,200
COST OF MERCHANDISE SOLD 2,152,400 3,121,600
SELLING, GENERAL AND
ADMINISTRATIVE EXPENSES 3,318,300 3,458,000
Income from operations 2,093,000 1,800,600
LOSS FROM EQUITY INVESTMENT (24,300) -
GAIN ON SALE OF INVESTMENTS 189,200 2,900
INTEREST AND OTHER INCOME 76,500 66,900
Income before income taxes 2,334,400 1,870,400
PROVISION FOR INCOME TAXES (974,100) (748,200)
NET INCOME $1,360,300 $1,122,200
EARNINGS PER SHARE - BASIC $.24 $.20
WEIGHTED AVERAGE SHARES
OUTSTANDING - BASIC 5,706,471 5,724,697
EARNINGS PER SHARE - DILUTED $.21 $.18
