Winmark Corp. Files 10-Q for Period Ending March 30, 2024

TL;DR

<b>Winmark Corp. filed its Q1 2024 10-Q, detailing financial performance and operational aspects.</b>

AI Summary

WINMARK CORP (WINA) filed a Quarterly Report (10-Q) with the SEC on April 17, 2024. Winmark Corp. filed a 10-Q report for the period ending March 30, 2024. The filing includes data for the fiscal quarter ending March 30, 2024, and comparative periods. Key financial elements such as Retained Earnings and various debt agreements are detailed. The company's business segments, including Franchising, are presented. Information on stock repurchase programs and employee stock options is provided.

Why It Matters

For investors and stakeholders tracking WINMARK CORP, this filing contains several important signals. This filing provides investors with the latest quarterly financial snapshot, crucial for assessing the company's performance and financial health. The inclusion of segment data and debt agreements offers insights into Winmark's operational strategy and financial leverage.

Risk Assessment

Risk Level: low — WINMARK CORP shows low risk based on this filing. The filing is a standard quarterly report (10-Q) with no immediate red flags, indicating a routine disclosure of financial information.

Analyst Insight

Review the detailed segment performance and debt structure to understand Winmark's current operational and financial standing.

Revenue Breakdown

Key Numbers

• 2024-03-30 — Conformed Period of Report (10-Q filing)
• 2024-04-17 — Filed as of Date (10-Q filing)
• 3497430 — Retained Earnings (2024-03-30) (us-gaap:RetainedEarningsMember)
• 3496977 — Retained Earnings (2023-12-30) (us-gaap:RetainedEarningsMember)

Key Players & Entities

• WINMARK CORP (company) — FILER
• GROW BIZ INTERNATIONAL INC (company) — FORMER COMPANY
• Prudential (company) — wina:PrivateShelfAgreementWithPrudentialMember
• Prudential (company) — wina:NoteAgreementWithPrudentialMember

FAQ

Industry Context

Winmark Corporation operates in the retail sector, primarily through its franchising business model.

Regulatory Implications

The filing adheres to SEC regulations for quarterly reporting (Form 10-Q) under the Securities Exchange Act of 1934.

What Investors Should Do

1. Analyze the balance sheet for changes in liabilities and equity.
2. Review the notes to the financial statements for details on debt agreements.
3. Examine segment performance for trends in the Franchising business.

Key Dates

• 2024-03-30: End of Reporting Period — Q1 2024 financial data
• 2024-04-17: Filing Date — 10-Q submission

Year-Over-Year Comparison

This is the first 10-Q filing for the fiscal year 2024, providing updated financial information compared to the previous year's filings.

Key Financial Figures

• $0.5 million — months of 2024, our royalties increased $0.5 million or 3.1% compared to the first three mon
• $0.2 m — l and administrative expenses increased $0.2 million, or 2.7% compared to the first th
• $0.8 million — for the first three months of 2024 was $0.8 million compared to $1.3 million in the first t
• $1.3 million — hs of 2024 was $0.8 million compared to $1.3 million in the first three months of 2023. Give

Filing Documents

• wina-20240330x10q.htm (10-Q) — 818KB
• wina-20240330xex31d1.htm (EX-31.1) — 14KB
• wina-20240330xex31d2.htm (EX-31.2) — 15KB
• wina-20240330xex32d1.htm (EX-32.1) — 8KB
• wina-20240330xex32d2.htm (EX-32.2) — 9KB
• 0000908315-24-000023.txt (&nbsp;) — 3963KB
• wina-20240330.xsd (EX-101.SCH) — 33KB
• wina-20240330_cal.xml (EX-101.CAL) — 51KB
• wina-20240330_def.xml (EX-101.DEF) — 101KB
• wina-20240330_lab.xml (EX-101.LAB) — 302KB
• wina-20240330_pre.xml (EX-101.PRE) — 209KB
• wina-20240330x10q_htm.xml (XML) — 496KB

Financial Statements (Unaudited)

Financial Statements (Unaudited) CONSOLIDATED CONDENSED BALANCE SHEETS : March 30, 2024 and December 31, 2023 3 CONSOLIDATED CONDENSED STATEMENTS OF OPERATIONS : Three Months Ended March 30, 2024 and April 1, 2023 4 CONSOLIDATED CONDENSED STATEMENTS OF SHAREHOLDERS' EQUITY (DEFICIT) : Three Months Ended March 30, 2024 and April 1, 2023 5 CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS : Three Months Ended March 30, 2024 and April 1, 2023 6 NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS 7 - 11 Item 2.

Management's Discussion and Analysis of Financial Condition and Results of Operations

Management's Discussion and Analysis of Financial Condition and Results of Operations 12 - 15 Item 3.

Quantitative and Qualitative Disclosures About Market Risk

Quantitative and Qualitative Disclosures About Market Risk 15 Item 4.

Controls and Procedures

Controls and Procedures 16 PART II. OTHER INFORMATION Item 1.

Legal Proceedings

Legal Proceedings 16 Item 1A.

Risk Factors

Risk Factors 16 Item 2. Unregistered Sales of Equity Securities and Use of Proceeds 16 Item 3. Defaults Upon Senior Securities 17 Item 4. Mine Safety Disclosures 17 Item 5. Other Information 17 Item 6. Exhibits 17

SIGNATURES

SIGNATURES 18 2 Table of Contents

FINANCIAL INFORMATION

PART I. FINANCIAL INFORMATION

: Financial Statements

ITEM 1: Financial Statements WINMARK CORPORATION AND SUBSIDIARIES CONSOLIDATED CONDENSED BALANCE SHEETS (Unaudited) March 30, 2024 December 30, 2023 ASSETS Current Assets: Cash and cash equivalents $ 22,872,200 $ 13,361,500 Restricted cash — 25,000 Receivables, less allowance for credit losses of $ 600 and $ 600 1,688,600 1,475,300 Net investment in leases - current 34,100 75,100 Income tax receivable — 31,400 Inventories 420,900 386,100 Prepaid expenses 1,265,600 1,392,100 Total current assets 26,281,400 16,746,500 Property and equipment, net 1,649,400 1,669,800 Operating lease right of use asset 2,351,700 2,425,900 Intangible assets, net 2,905,800 2,994,300 Goodwill 607,500 607,500 Other assets 487,800 471,300 Deferred income taxes 4,052,400 4,052,400 $ 38,336,000 $ 28,967,700 LIABILITIES AND SHAREHOLDERS' EQUITY (DEFICIT) Current Liabilities: Notes payable, net of unamortized debt issuance costs of $ 32,100 and $ 32,100 $ 4,217,900 $ 4,217,900 Accounts payable 1,296,300 1,719,400 Income tax payable 2,469,000 — Accrued liabilities 4,734,000 2,858,200 Deferred revenue 1,657,300 1,666,100 Total current liabilities 14,374,500 10,461,600 Long-term Liabilities: Line of credit/Term loan 30,000,000 30,000,000 Notes payable, net of unamortized debt issuance costs of $ 80,700 and $ 88,700 33,794,300 34,848,800 Deferred revenue 7,744,400 7,657,500 Operating lease liabilities 3,566,600 3,715,800 Other liabilities 1,435,300 1,440,100 Total long-term liabilities 76,540,600 77,662,200 Shareholders' Equity (Deficit): Common stock, no par value, 10,000,000 shares authorized, 3,497,430 and 3,496,977 shares issued and outstanding 8,324,700 7,768,800 Retained earnings (accumulated deficit) ( 60,903,800 ) ( 66,924,900 ) Total shareholders' equity (deficit) ( 52,579,100 ) ( 59,156,100 ) $ 38,336,000 $ 28,967,700

: Management's Discussion and Analysis of Financial Condition and Results of Operations

ITEM 2: Management's Discussion and Analysis of Financial Condition and Results of Operations Overview Winmark - the Resale Company is focused on sustainability and small business formation. As of March 30, 2024, we had 1,327 franchises operating under the Plato's Closet, Once Upon A Child, Play It Again Sports, Style Encore and Music Go Round brands. Our business is not capital intensive and is designed to generate consistent, recurring revenue and strong operating margins. The financial criteria that management closely tracks to evaluate current business operations and future prospects include royalties and selling, general and administrative expenses. Our most significant source of revenue is royalties received from our franchisees. During the first three months of 2024, our royalties increased $0.5 million or 3.1% compared to the first three months of 2023. Management continually monitors the level and timing of selling, general and administrative expenses. The major components of selling, general and administrative expenses include salaries, wages and benefits, advertising, conferences, travel, occupancy, legal and professional fees. During the first three months of 2024, selling, general and administrative expenses increased $0.2 million, or 2.7% compared to the first three months of 2023. Management also monitors several nonfinancial factors in evaluating the current business operations and future prospects including franchise openings and closings and franchise renewals. The following is a summary of our net store growth and renewal activity for the first three months ended March 30, 2024: AVAILABLE TOTAL TOTAL FOR COMPLETED 12/30/2023 OPENED CLOSED 3/30/2024 RENEWAL RENEWALS % RENEWED Plato's Closet 506 4 — 510 11 11 100 % Once Upon A Child 416 5 (1) 420 14 14 100 % Play It Again Sports 294 2 — 296 9 9 100 % Style Encore 66 — — 66 4 4 100 % Music Go Round 3

View Full Filing

View this 10-Q filing on SEC EDGAR