Winmark Corporation, the parent of Play It Again Sports, announced net income for the first quarter ended Mar. 26, 2011 of $3.03 million, or 58 cents a share, up from $2.2 million, or 42 cents, a year ago. Revenues grew 13.3% to $11.1 million from $9.8 million a year ago.
John L. Morgan, chairman and chief executive officer, stated, “The growth in our first quarter operating earnings was primarily a result of increased profitability in our leasing business as well as continued strength in our franchising operations. We ended the quarter with a solid balance sheet that provides us with the ability to support the needs of our current and future leasing customers.”
At March 26, 2011, Winmark had 902 franchises in operation under the brands Play It Again Sports, Plato's Closet, Once Upon A Child, and Music Go Round. An additional 42 retail franchises have been awarded but are not open. In addition, at March 26, 2011, the company had loans and leases equal to $32.4 million.
WINMARK CORPORATION | ||||||||
CONDENSED STATEMENTS OF OPERATIONS | ||||||||
(unaudited) | ||||||||
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Three Months Ended |
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March 26, 2011 |
March 27, 2010 |
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REVENUE: |
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Royalties |
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$ |
7,052,800 |
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$ |
6,363,500 |
Leasing income |
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3,235,000 |
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2,524,900 |
Merchandise sales |
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501,400 |
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494,700 |
Franchise fees |
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75,000 |
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223,500 |
Other |
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240,700 |
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236,200 | ||
Total revenue |
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11,104,900 |
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9,842,800 |
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COST OF MERCHANDISE SOLD |
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482,900 |
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471,000 |
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LEASING EXPENSE |
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518,700 |
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547,300 |
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PROVISION FOR CREDIT LOSSES |
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45,400 |
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172,100 |
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SELLING, GENERAL AND ADMINISTRATIVE EXPENSES |
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4,845,900 |
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4,855,900 | ||
Income from operations |
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5,212,000 |
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3,796,500 |
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LOSS FROM EQUITY INVESTMENTS |
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(77,000) |
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(20,200) |
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INTEREST EXPENSE |
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(31,100) |
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(288,200) |
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INTEREST AND OTHER INCOME |
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17,200 |
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177,700 | ||
Income before income taxes |
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5,121,100 |
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3,665,800 |
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PROVISION FOR INCOME TAXES |
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(2,094,800)
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(1,484,700)
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NET INCOME |
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$
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3,026,300
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$
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2,181,100
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EARNINGS PER SHARE – BASIC |
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$ | .61 |
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$ | .43 |
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EARNINGS PER SHARE – DILUTED |
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$ | .58 |
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$ | .42 |
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WEIGHTED AVERAGE SHARES OUTSTANDING – BASIC |
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4,989,588 |
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5,128,408 | ||
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WEIGHTED AVERAGE SHARES OUTSTANDING – DILUTED |
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5,215,484 |
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5,196,377 |