Winmark Corp. (WINA, Financial) filed Quarterly Report for the period ended 2009-09-26.
Winmark Corporation is a franchise company that franchises seven retail concepts which buy sell trade and consign merchandise. Each concept operates in a different industry and provides the consumer with 'ultra-high value' retailing. The company began franchising the Play It Again Sports store concept and through a series of acquisitions has expanded its operations. Winmark Corp. has a market cap of $115.5 million; its shares were traded at around $22.58 with a P/E ratio of 25.3 and P/S ratio of 3.4.
Royalties increased to $6.4 million for the third quarter of 2009 from $5.7 million for the same period of 2008, an 11.6% increase. The increase was due to higher Platos Closet® and Once Upon A Child® royalties of $569,900 and $209,000, respectively, partially offset by lower Play It Again Sports® royalties of $102,200. The increase in Platos Closet® and Once Upon A Child® royalties is primarily due to having 28 additional Platos Closet® franchise stores in the third quarter of 2009 compared to the same period last year and higher franchisee retail sales in both brands.
Royalties increased to $17.6 million for the first nine months of 2009 from $16.4 million for the first nine months of 2008, a 7.8% increase. The increase was due to higher Platos Closet® and Once Upon A Child® royalties of $1,339,200 and $530,300, respectively, partially offset by lower Play It Again Sports® royalties of $570,700. The increase in Platos Closet® and Once Upon A Child® royalties is primarily due to having 28 additional Platos Closet® franchise stores in the first nine months of 2009 compared to the same period last year and higher franchisee retail sales in both brands.
The leasing segments operating loss for the first nine months of 2009 decreased by $60,000 to a loss of ($872,100) compared to a loss of ($932,100) during the first nine months of 2008. This improvement was primarily due to a $1,196,000 increase in leasing income, partially offset an increase in provision for credit losses of $651,400 and a $323,300 increase in leasing expense.
Financing activities used $3.6 million of cash during the first nine months of 2009 compared to $1.1 million provided during the same period of 2008. The 2009 activities consisted primarily of net proceeds from subordinated notes and discounted lease rentals of $2.2 million, net payments of $3.3 million on the line of credit and $2.5 million used to purchase 183,326 shares of our common stock.
On August 12, 2009, the Company amended its Amended and Restated Revolving Credit Agreement (the Credit Facility) to reduce the aggregate commitment under the Credit Facility from $55 million to $40.0 million (subject to certain borrowing base limitations). As of September 26, 2009, the Companys borrowing availability under the Credit Facility was $40.0 million (the lesser of the borrowing base or the aggregate line of credit). There were $10.3 million in borrowings outstanding under the Credit Facility bearing interest ranging from 4.58% to 5.76% and having initial terms ranging from three years to five years, leaving $29.7 million available for additional borrowings at September 26, 2009.
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Winmark Corporation is a franchise company that franchises seven retail concepts which buy sell trade and consign merchandise. Each concept operates in a different industry and provides the consumer with 'ultra-high value' retailing. The company began franchising the Play It Again Sports store concept and through a series of acquisitions has expanded its operations. Winmark Corp. has a market cap of $115.5 million; its shares were traded at around $22.58 with a P/E ratio of 25.3 and P/S ratio of 3.4.
Highlight of Business Operations:
During the first nine months of 2009, we purchased $12.2 million in equipment for lease contracts compared to $16.7 million in the first nine months of 2008. The level of equipment purchases for lease contracts continues to be impacted by the unfavorable general economic environment as well as our decision during 2008 to tighten credit standards in our small-ticket financing business in response to these conditions. Overall, our leasing portfolio (net investment in leases current and long-term) decreased to $39.1 million at September 26, 2009 from $45.4 million at December 27, 2008. Revenue generated from our leasing activities was $7.1 million compared to $5.9 million in the same period last year, an increase of 20.2%. (See Note 11 Segment Reporting). Our earnings are also impacted by credit losses. During the first nine months of 2009, our provision for credit losses increased to $1.9 million from $1.2 million in the first nine months of 2008, as we continued to experience a higher level of net write-offs and delinquencies, primarily in the small-ticket financing business portion of our leasing segment.Royalties increased to $6.4 million for the third quarter of 2009 from $5.7 million for the same period of 2008, an 11.6% increase. The increase was due to higher Platos Closet® and Once Upon A Child® royalties of $569,900 and $209,000, respectively, partially offset by lower Play It Again Sports® royalties of $102,200. The increase in Platos Closet® and Once Upon A Child® royalties is primarily due to having 28 additional Platos Closet® franchise stores in the third quarter of 2009 compared to the same period last year and higher franchisee retail sales in both brands.
Royalties increased to $17.6 million for the first nine months of 2009 from $16.4 million for the first nine months of 2008, a 7.8% increase. The increase was due to higher Platos Closet® and Once Upon A Child® royalties of $1,339,200 and $530,300, respectively, partially offset by lower Play It Again Sports® royalties of $570,700. The increase in Platos Closet® and Once Upon A Child® royalties is primarily due to having 28 additional Platos Closet® franchise stores in the first nine months of 2009 compared to the same period last year and higher franchisee retail sales in both brands.
The leasing segments operating loss for the first nine months of 2009 decreased by $60,000 to a loss of ($872,100) compared to a loss of ($932,100) during the first nine months of 2008. This improvement was primarily due to a $1,196,000 increase in leasing income, partially offset an increase in provision for credit losses of $651,400 and a $323,300 increase in leasing expense.
Financing activities used $3.6 million of cash during the first nine months of 2009 compared to $1.1 million provided during the same period of 2008. The 2009 activities consisted primarily of net proceeds from subordinated notes and discounted lease rentals of $2.2 million, net payments of $3.3 million on the line of credit and $2.5 million used to purchase 183,326 shares of our common stock.
On August 12, 2009, the Company amended its Amended and Restated Revolving Credit Agreement (the Credit Facility) to reduce the aggregate commitment under the Credit Facility from $55 million to $40.0 million (subject to certain borrowing base limitations). As of September 26, 2009, the Companys borrowing availability under the Credit Facility was $40.0 million (the lesser of the borrowing base or the aggregate line of credit). There were $10.3 million in borrowings outstanding under the Credit Facility bearing interest ranging from 4.58% to 5.76% and having initial terms ranging from three years to five years, leaving $29.7 million available for additional borrowings at September 26, 2009.
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