EX-99.1 3 dex991.txt PRESS RELEASE DATED FEBRUARY 12, 2002 [LOGO OF WINMARK CORPORATION] Exhibit 99.1 Contact: John L. Morgan 763-520-8500 FOR IMMEDIATE RELEASE WINMARK CORPORATION ANNOUNCES YEAR END RESULTS Minneapolis, MN (February 12, 2002) -- Winmark Corporation announced today net income for the year ended December 29, 2001 of $3,197,500, or $.55 per share diluted, compared to a net loss of ($350,700), or ($.07) per share, in 2000. The fourth quarter 2001 net income was $592,000, or $.10 per share diluted, compared to a net income of $682,900, or $.12 per share diluted, for the same period last year. Included in fiscal 2001 results is a $1,112,300 pre-tax net gain relating to the final settlement of amounts due from the sale of Computer Renaissance(R). Included in the results for fiscal 2000 was a pre-tax, nonrecurring charge to earnings of $3.3 million and a $537,200 pre-tax, nonrecurring gain on the disposition of substantially all the assets of the Company's Computer Renaissance(R) franchise and retail operations which occurred on August 30, 2000. John L. Morgan, Chairman and Chief Executive Officer, stated, "Excluding nonrecurring events from fiscal 2001 and 2000, our comparative results reflect a leaner, more focused, more profitable operation. We continue to control operating costs at acceptable levels and improve the Company's operations." Winmark Corporation develops franchises and operates value-oriented retail brands for stores that buy, sell, trade and consign used and new merchandise. At December 29, 2001, the Company had 841 franchise and retail stores in operation and additional 31 franchises awarded but not open. Of the stores in operation, there were 502 Play It Again Sports(R), 230 Once Upon A Child(R), 63 Music Go Round(R) and 46 Plato's Closet(R) stores. 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 including statements with respect to the strength of the Company's operating position in the future and future results from operations. 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
----------- ----------- December 29, December 30, 2001 2000 ----------- ----------- ASSETS Current Assets: Cash and cash equivalents $ 1,053,000 $ 2,005,100 Investments 2,934,500 -- Receivables, less allowance for doubtful accounts of $654,500 and $943,500 3,230,300 6,170,300 Inventories 1,084,100 1,367,200 Prepaid expenses and other 667,800 396,700 Deferred income taxes 1,598,000 2,290,000 ----------- ----------- Total current assets 10,567,700 12,229,300 Notes receivable 202,600 326,200 Property and equipment, net 738,100 1,451,800 Other assets, net 780,600 713,500 ----------- ----------- $12,289,000 $14,720,800 =========== =========== LIABILITIES AND SHAREHOLDERS' EQUITY Current Liabilities: Accounts payable 1,794,700 2,864,000 Accrued liabilities 2,885,500 2,469,200 Current maturities of long-term debt 41,500 827,400 Current deferred revenue 515,600 676,000 ----------- ----------- Total current liabilities 5,237,300 6,836,600 Long-Term Debt 158,000 3,961,000 Deferred Gain on Building Sale 273,300 456,400 Shareholder's Equity: Common stock, no par, 10,000,000 shares authorized, 5,383,354 and 5,386,433 shares issued and outstanding 1,376,000 1,419,900 Common stock warrants 822,000 822,000 Retained earnings 4,422,400 1,224,900 ----------- ----------- Total shareholders' equity 6,620,400 3,466,800 ----------- ----------- $12,289,000 $14,720,800 =========== ===========
WINMARK CORPORATION CONDENSED STATEMENTS OF OPERATIONS
---------------------------- ---------------------------- Quarter Ended Fiscal Year Ended December 29, December 30, December 29, December 30, 2001 2000 2001 2000 ------------ ------------ ------------ ------------ REVENUE: Merchandise sales $ 4,412,600 $ 6,503,500 $ 19,038,500 $ 29,415,700 Royalties 3,821,600 3,920,200 15,622,900 16,502,000 Other 324,100 490,500 1,425,500 1,629,100 ------------ ------------ ------------ ------------ Total revenue 8,558,300 10,914,200 36,086,900 47,546,800 COST OF MERCHANDISE SOLD 3,640,200 5,628,300 15,850,500 25,294,700 SELLING, GENERAL AND ADMINISTRATIVE EXPENSES 3,968,500 3,713,700 15,365,900 18,701,200 EARNINGS CHARGE -- -- -- (3,337,900) GAIN ON SALE OF BUSINESS -- -- 1,112,300 537,200 ------------ ------------ ------------ ------------ Income from operations 949,600 1,572,200 5,982,800 750,200 INTEREST INCOME 42,600 176,000 283,700 260,500 INTEREST EXPENSE (18,500) (242,100) (1,007,400) (1,204,600) ------------ ------------ ------------ ------------ Income (loss) before income taxes 973,700 1,506,100 5,259,100 (193,900) PROVISION FOR INCOME TAXES 381,700 823,200 2,061,600 156,800 ------------ ------------ ------------ ------------ NET INCOME (LOSS) $ 592,000 $ 682,900 $ 3,197,500 $ (350,700) ============ ============ ============ ============ BASIC EARNINGS PER SHARE $ .11 $ .13 $ .59 $ (.07) ============ ============ ============ ============ BASIC WEIGHTED AVERAGE SHARES OUTSTANDING 5,383,354 5,386,400 5,388,574 5,382,200 ============ ============ ============ ============ DILUTED EARNINGS PER SHARE $ .10 $ .12 $ .55 $ (.07) ============ ============ ============ ============ DILUTED WEIGHTED AVERAGE SHARES OUTSTANDING 6,079,649 5,513,200 5,792,041 5,382,200 ============ ============ ============ ============