Winmark Corporation,(WINA) a leading franchisor of retail store concepts, has released its financial results for the first quarter ended April 1, 2023. The company reported a net income of $8.9 million for the quarter, showcasing a solid performance in a competitive market. Furthermore, Winmark Corporation generated revenue exceeding $20.5 million during the same period, reflecting strong sales across its various business segments. Let's delve into the details of Winmark Corporation's consolidated condensed balance sheets, statements of operations, shareholders' equity (deficit), and cash flows to gain a comprehensive understanding of its financial standing and performance.
Consolidated Condensed Balance Sheets:
Winmark Corporation's consolidated condensed balance sheets reveal a robust financial position as of April 1, 2023. The company's current assets amounted to $27.6 million, representing a significant increase from $18.1 million at the end of December 31, 2022. The growth in current assets was driven by higher cash and cash equivalents, receivables, and prepaid expenses. Winmark Corporation's long-term assets, including net investment in leases, property and equipment, operating lease right of use asset, intangible assets, goodwill, and other assets, remained stable during the quarter, with a total value of $12.1 million.
On the liabilities front, Winmark Corporation's current liabilities amounted to $13.2 million, compared to $10.6 million at the end of December 31, 2022. This increase was primarily attributed to higher notes payable, accounts payable, and accrued liabilities. The company's long-term liabilities stood at $80.6 million, consistent with the previous period, with line of credit/term loan, notes payable, deferred revenue, operating lease liabilities, and other liabilities contributing to this amount.
Consolidated Condensed Statements of Operations:
Winmark Corporation's consolidated condensed statements of operations highlight its strong revenue performance for the first quarter of 2023. The company generated total revenue of $20.5 million during the period, showing a positive growth trajectory compared to $20.0 million in the corresponding period last year. This increase in revenue was primarily driven by higher royalties and leasing income.
After accounting for the cost of merchandise sold, leasing expense, provision for credit losses, and selling, general, and administrative expenses, Winmark Corporation reported income from operations of $12.4 million. Despite incurring interest expenses and other income/expense, the company achieved a pre-tax income of $11.7 million. After factoring in income tax provisions, Winmark Corporation's net income for the quarter amounted to $8.9 million.
Consolidated Condensed Statements of Shareholders' Equity (Deficit):
The consolidated condensed statements of shareholders' equity (deficit) reveal notable changes in Winmark Corporation's financial position. The issuance of stock options, compensation expenses, cash dividends, and comprehensive income (net income) contributed to the fluctuations in shareholders' equity. As of April 1, 2023, the company's total shareholders' equity (deficit) stood at $(54.0) million.
Consolidated Condensed Statements of Cash Flows:
Winmark Corporation's consolidated condensed statements of cash flows provide insights into its cash management and liquidity. The company reported net cash provided by operating activities amounting to $13.9 million for the first quarter of 2023. This figure reflects the positive cash flow generated from its core operations. Winmark Corporation utilized $5,500 for investing activities, primarily related to the purchase of property and equipment. In terms of financing activities, the company used $2.9 million, including payments on loans, repurchases of common stock, and dividend payments.
The company's cash, cash equivalents, and restricted cash increased to $24.6 million as of April 1, 2023, compared to $342,500 in the previous quarter. The significant growth in cash and cash equivalents demonstrates Winmark Corporation's strengthened financial position and enhanced liquidity.
In conclusion, Winmark Corporation achieved impressive financial results for the first quarter of 2023, with notable growth in net income and revenue. The company's solid performance, reflected in its consolidated condensed balance sheets, statements of operations, shareholders' equity (deficit), and cash flows, positions it well for continued success in a competitive market.