Winmark Corporation (NASDAQ:WINA) Files An 8-K Regulation FD Disclosure
Item 7.01Regulation FD Disclosure
The outbreak of the coronavirus (COVID-19) has disrupted operations of Winmark Corporation (the “Company,”, “we,” or “our”), as well as that of our franchisees and leasing customers in numerous states and Canada. Our primary focus and attention is directed towards the health, safety and well-being of our employees, franchisees and leasing customers.
As of the date of this filing, uncertainties regarding the COVID-19 outbreak have resulted in serious economic disruptions including the temporary closing of many of our franchisee’s stores. Governmental authorities in the United States and Canada have taken and may continue to take measures in order to combat the spread of disease including forced closures of retail stores and other business establishments. Because of expected associated reduction in sales by our franchisees and economic disruption to our leasing customers, our results of operations, financial condition and cash flow will be materially adversely affected. The full impact of the COVID-19 outbreak is unknown, resulting in a high degree of uncertainty for potentially extended periods of time. At this time, neither the duration nor scope of the disruption can be predicted, therefore, the negative financial impact to our results cannot be reasonably estimated.
As of the date of this filing, we have approximately $28.5 million of cash after having drawn on our revolving credit facility in order to increase our cash position and preserve financial flexibility in light of the current uncertainty resulting from the COVID-19 outbreak. As of the date of this filing, we have $40.0 million in borrowings outstanding on our revolving credit facility, and we remain in compliance with all financial covenants.