Winmark Corporation (NASDAQ:WINA) announced today net income for the year ended December 31, 2022 of $39,424,900 or $10.97 per share diluted compared to net income of $39,919,900 or $10.48 per share diluted in 2021. The fourth quarter 2022 net income was $10,176,600 or $2.86 per share diluted, compared to net income of $11,589,000 or $3.09 per share diluted, for the same period last year. Revenues for the year ended December 31, 2022 were $81,410,800 up from $78,216,200 in 2021. Financial performance for 2022 included an extra week of operations due to the Company's fiscal year ending on the last Saturday of December.

Brett D. Heffes, Chairman and Chief Executive Officer commented "I am pleased with Winmark's operational and financial performance during 2022. Our talented franchise partners continue to make a positive impact in the local communities they serve. Increased marketing investments during the year yielded an improvement in new store development activity."

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 December 31, 2022, there were 1,295 franchises in operation and over 2,800 available territories. An additional 57 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)


	December 31, 2022			December 25, 2021
ASSETS
Current Assets:
Cash and cash equivalents	$	13,615,600		$	11,407,000
Restricted cash		65,000			30,000
Receivables, net		1,438,600			1,103,400
Net investment in leases - current		344,900			2,890,600
Income tax receivable		558,700			667,500
Inventories		770,600			325,200
Prepaid expenses		1,310,400			1,008,600
Total current assets		18,103,800			17,432,300

Net investment in leases – long-term		5,400			229,300
Property and equipment, net		1,704,600			1,976,900
Operating lease right of use asset		2,716,000			2,982,000
Intangible assets, net		3,348,300			—
Goodwill		607,500			607,500
Other assets		429,700			418,300
Deferred income taxes		3,540,400			3,252,700
	$	30,455,700		$	26,899,000

LIABILITIES AND SHAREHOLDERS' EQUITY (DEFICIT)
Current Liabilities:
Notes payable, net	$	4,217,900		$	4,232,600
Accounts payable		2,122,000			2,099,000
Accrued liabilities		2,611,700			2,001,000
Deferred revenue		1,643,900			1,645,000
Total current liabilities		10,595,500			9,977,600
Long-Term Liabilities:
Line of Credit/Term Loan		30,000,000			—
Notes payable, net		39,066,700			43,376,400
Deferred revenue		6,974,200			6,863,500
Operating lease liabilities		4,287,000			4,810,100
Other liabilities		1,164,400			954,800
Total long-term liabilities		81,492,300			56,004,800
Shareholders' Equity (Deficit):
Common stock, no par, 10,000,000 shares authorized, 3,459,673 and 3,635,806 shares issued and outstanding		1,806,700			—
Retained earnings (accumulated deficit)		(63,438,800	)		(39,083,400	)
Total shareholders' equity (deficit)		(61,632,100	)		(39,083,400	)
	$	30,455,700		$	26,899,000

WINMARK CORPORATION CONDENSED STATEMENTS OF OPERATIONS (Unaudited)

	Quarter Ended						Fiscal Year Ended
	December 31, 2022			December 25, 2021			December 31, 2022			December 25, 2021
Revenue:
Royalties	$	17,917,700		$	15,638,100		$	67,148,100		$	60,779,300
Leasing income		1,091,900			2,796,500			6,937,700			11,148,300
Merchandise sales		1,234,100			1,119,800			3,921,600			3,100,100
Franchise fees		415,200			395,600			1,575,400			1,496,900
Other		466,800			424,300			1,828,000			1,691,600
Total revenue		21,125,700			20,374,300			81,410,800			78,216,200
Cost of merchandise sold		1,160,500			1,052,800			3,712,800			2,940,500
Leasing expense		92,800			439,500			984,700			1,850,300
Provision for credit losses		(11,300	)		(39,300	)		(57,900	)		(206,600	)
Selling, general and administrative expenses		6,485,300			6,008,200			23,158,400			22,295,800
Income from operations		13,398,400			12,913,100			53,612,800			51,336,200
Interest expense		(869,300	)		(508,300	)		(2,914,900	)		(1,453,900	)
Interest and other income (expense)		78,600			(7,900	)		85,600			(15,000	)
Income before income taxes		12,607,700			12,396,900			50,783,500			49,867,300
Provision for income taxes		(2,431,100	)		(807,900	)		(11,358,600	)		(9,947,400	)
Net income	$	10,176,600		$	11,589,000		$	39,424,900		$	39,919,900
Earnings per share - basic	$	2.95		$	3.20		$	11.30		$	10.87
Earnings per share - diluted	$	2.86		$	3.09		$	10.97		$	10.48
Weighted average shares outstanding - basic		3,452,399			3,622,690			3,487,732			3,671,980
Weighted average shares outstanding - diluted		3,556,190			3,753,982			3,592,456			3,810,480

WINMARK CORPORATION CONDENSED STATEMENTS OF CASH FLOWS (Unaudited)

	Year Ended
	December 31, 2022			December 25, 2021
OPERATING ACTIVITIES:
Net income	$	39,424,900		$	39,919,900
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization		603,100			430,600
Provision for credit losses		(57,900	)		(206,600	)
Compensation expense related to stock options		1,652,400			1,435,500
Deferred income taxes		(287,700	)		(1,362,000	)
Gain from disposal of property and equipment		(9,400	)		—
Deferred initial direct costs		—			(2,100	)
Amortization of deferred initial direct costs		—			18,900
Operating lease right of use asset amortization		266,000			244,300
Tax benefits on exercised stock options		858,300			2,479,600
Change in operating assets and liabilities:
Receivables		(335,200	)		478,500
Principal collections on lease receivables		3,646,700			9,915,400
Income tax receivable/payable		(749,500	)		(2,925,900	)
Inventories		(445,400	)		(218,600	)
Prepaid expenses		(301,800	)		(13,400	)
Other assets		(11,400	)		17,600
Accounts payable		23,000			329,400
Accrued and other liabilities		222,800			(948,500	)
Rents received in advance and security deposits		(819,200	)		(1,046,600	)
Deferred revenue		109,600			(199,800	)
Net cash provided by operating activities		43,789,300			48,346,200
INVESTING ACTIVITIES:
Proceeds from sales of property and equipment		9,400			—
Purchase of property and equipment		(139,100	)		(74,700	)
Reacquired franchise rights		(3,540,000	)		—
Purchase of equipment for lease contracts		—			(208,400	)
Net cash used for investing activities		(3,669,700	)		(283,100	)
FINANCING ACTIVITIES:
Proceeds from borrowings on line of credit/term loan		33,700,000			—
Payments on line of credit/term loan		(3,700,000	)		—
Proceeds from borrowings on notes payable		—			30,000,000
Payments on notes payable		(4,250,000	)		(4,250,000	)
Repurchases of common stock		(49,119,800	)		(44,217,500	)
Proceeds from exercises of stock options		4,751,700			8,320,000
Dividends paid		(19,257,900	)		(33,162,600	)
Net cash used for financing activities		(37,876,000	)		(43,310,100	)
NET INCREASE IN CASH, CASH EQUIVALENTS AND RESTRICTED CASH		2,243,600			4,753,000
Cash, cash equivalents and restricted cash, beginning of period		11,437,000			6,684,000
Cash, cash equivalents and restricted cash, end of period	$	13,680,600		$	11,437,000
SUPPLEMENTAL DISCLOSURES:
Cash paid for interest	$	2,722,500		$	1,388,900
Cash paid for income taxes	$	11,308,800		$	11,555,100

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:
	Year Ended
	December 31, 2022			December 25, 2021
Cash and cash equivalents	$	13,615,600		$	11,407,000
Restricted cash		65,000			30,000
Total cash, cash equivalents and restricted cash	$	13,680,600		$	11,437,000

View source version on businesswire.com: https://www.businesswire.com/news/home/20230301005803/en/

Winmark Corporation Announces Year End Results