WINMARK CORPORATION_June 28, 2025

Table of Contents

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

☒

QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended June 28, 2025

☐

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to

Commission File Number: 000-22012

WINMARK CORPORATION

(Exact name of registrant as specified in its charter)


Minnesota		41-1622691
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification No.)

605 Highway 169 North, Suite 400, Minneapolis, MN 55441

(Address of principal executive offices) (Zip Code)

(763) 520-8500

(Registrant’s telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:


Title of each class:	Trading Symbol	Name of each exchange on which registered:
Common Stock, no par value per share	WINA	Nasdaq Global Market

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).

Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer ☒

Non-accelerated filer ☐

Accelerated filer ☐

Smaller reporting company ☐

Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ◻

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

Yes ☐ No ☒

Common stock, no par value, 3,548,458 shares outstanding as of July 14, 2025.

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WINMARK CORPORATION AND SUBSIDIARIES

INDEX


		PAGE

PART I.	FINANCIAL INFORMATION

Item 1.	Financial Statements (Unaudited)

	CONSOLIDATED CONDENSED BALANCE SHEETS June 28, 2025 and December 28, 2024	3

	CONSOLIDATED CONDENSED STATEMENTS OF OPERATIONS Three Months Ended June 28, 2025 and June 29, 2024 Six Months Ended June 28, 2025 and June 29, 2024	4

	CONSOLIDATED CONDENSED STATEMENTS OF SHAREHOLDERS’ EQUITY (DEFICIT) Three Months Ended June 28, 2025 and June 29, 2024 Six Months Ended June 28, 2025 and June 29, 2024	5

	CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS Six Months Ended June 28, 2025 and June 29, 2024	6

	NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS	7

Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	12

Item 3.	Quantitative and Qualitative Disclosures About Market Risk	17

Item 4.	Controls and Procedures	17

PART II.	OTHER INFORMATION	18

Item 1.	Legal Proceedings	18

Item 1A.	Risk Factors	18

Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	18

Item 3.	Defaults Upon Senior Securities	18

Item 4.	Mine Safety Disclosures	18

Item 5.	Other Information	18

Item 6.	Exhibits	19

	SIGNATURES	20

Table of Contents

PART I. FINANCIAL INFORMATION

ITEM 1: Financial Statements

WINMARK CORPORATION AND SUBSIDIARIES

CONSOLIDATED CONDENSED BALANCE SHEETS

(Unaudited)


	June 28, 2025		December 28, 2024
ASSETS
Current Assets:
Cash and cash equivalents	$	28,765,200	$	12,189,800
Restricted cash		165,000		140,000
Receivables, less allowance for credit losses of $500 and $500		1,707,900		1,336,400
Income tax receivable		466,600		96,400
Inventories		362,100		397,600
Prepaid expenses		732,800		1,205,400
Total current assets		32,199,600		15,365,600
Property and equipment, net		1,329,000		1,419,400
Operating lease right of use asset		1,942,400		2,108,700
Intangible assets, net		2,463,300		2,640,300
Goodwill		607,500		607,500
Other assets		505,500		491,200
Deferred income taxes		4,125,400		4,211,800
	$	43,172,700	$	26,844,500

LIABILITIES AND SHAREHOLDERS' EQUITY (DEFICIT)
Current Liabilities:
Accounts payable	$	1,190,300	$	1,562,000
Accrued liabilities		4,148,600		1,866,200
Deferred revenue		1,668,300		1,659,700
Total current liabilities		7,007,200		5,087,900
Long-term Liabilities:
Line of credit/Term loan		30,000,000		30,000,000
Notes payable, net of unamortized debt issuance costs of $48,100 and $57,200		29,951,900		29,942,800
Deferred revenue		8,334,700		8,027,600
Operating lease liabilities		2,763,800		3,092,800
Other liabilities		1,955,000		1,739,500
Total long-term liabilities		73,005,400		72,802,700
Shareholders’ Equity (Deficit):
Common stock, no par value, 10,000,000 shares authorized, 3,548,458 and 3,539,744 shares issued and outstanding		15,023,600		14,790,500
Retained earnings (accumulated deficit)		(51,863,500)		(65,836,600)
Total shareholders' equity (deficit)		(36,839,900)		(51,046,100)
	$	43,172,700	$	26,844,500

The accompanying notes are an integral part of these financial statements.

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WINMARK CORPORATION AND SUBSIDIARIES

CONSOLIDATED CONDENSED STATEMENTS OF OPERATIONS

(Unaudited)


	Three Months Ended				Six Months Ended
	June 28, 2025		June 29, 2024		June 28, 2025		June 29, 2024
Revenue:
Royalties	$	18,662,100	$	17,774,500	$	36,436,700	$	35,043,200
Leasing income		46,600		524,400		2,354,500		1,361,200
Merchandise sales		803,600		925,500		1,744,900		2,036,000
Franchise fees		338,400		366,900		670,400		731,500
Other		566,100		529,200		1,129,900		1,058,300
Total revenue		20,416,800		20,120,500		42,336,400		40,230,200
Cost of merchandise sold		766,500		861,100		1,654,800		1,900,100
Leasing expense		—		—		—		36,600
Provision for credit losses		—		—		—		(1,500)
Selling, general and administrative expenses		6,589,200		6,241,800		14,024,000		13,059,200
Income from operations		13,061,100		13,017,600		26,657,600		25,235,800
Interest expense		(609,800)		(721,400)		(1,223,600)		(1,459,200)
Interest and other income		254,600		280,800		404,400		468,800
Income before income taxes		12,705,900		12,577,000		25,838,400		24,245,400
Provision for income taxes		(2,104,700)		(2,145,600)		(5,280,800)		(4,995,000)
Net income	$	10,601,200	$	10,431,400	$	20,557,600	$	19,250,400
Earnings per share - basic	$	3.00	$	2.97	$	5.81	$	5.49
Earnings per share - diluted	$	2.89	$	2.85	$	5.60	$	5.26
Weighted average shares outstanding - basic		3,539,437		3,513,788		3,539,042		3,505,526
Weighted average shares outstanding - diluted		3,673,135		3,657,439		3,673,039		3,659,405

The accompanying notes are an integral part of these financial statements.

Table of Contents

WINMARK CORPORATION AND SUBSIDIARIES

CONSOLIDATED CONDENSED STATEMENTS OF SHAREHOLDERS’ EQUITY (DEFICIT)

(Unaudited)


				Retained
				Earnings
	Common Stock			(Accumulated
	Shares	Amount		Deficit)		Total
BALANCE, December 28, 2024	3,539,744	$	14,790,500	$	(65,836,600)	$	(51,046,100)
Repurchase of common stock	(7,383)		(2,249,900)		—		(2,249,900)
Stock options exercised	210		47,700		—		47,700
Compensation expense relating to stock options	—		536,600		—		536,600
Cash dividends ($0.90 per share)	—		—		(3,186,000)		(3,186,000)
Comprehensive income (Net income)	—		—		9,956,400		9,956,400
BALANCE, March 29, 2025	3,532,571		13,124,900		(59,066,200)		(45,941,300)
Repurchase of common stock	(561)		(168,900)		—		(168,900)
Stock options exercised	16,448		1,538,600		—		1,538,600
Compensation expense relating to stock options	—		529,000		—		529,000
Cash dividends ($0.96 per share)	—		—		(3,398,500)		(3,398,500)
Comprehensive income (Net income)	—		—		10,601,200		10,601,200
BALANCE, June 28, 2025	3,548,458		15,023,600		(51,863,500)		(36,839,900)


							Retained
							Earnings

SEC Form 10-Q filed by Winmark Corporation