Winmark Corporation (NASDAQ:WINA) announced today net income for the quarter ended June 28, 2025 of $10,601,200 or $2.89 per share diluted compared to net income of $10,431,400 or $2.85 per share diluted in 2024. For the six months ended June 28, 2025, net income was $20,557,600 or $5.60 per share diluted compared to net income of $19,250,400 or $5.26 per share diluted for the same period last year.

"Sales performance for our franchise partners across all brands increased during the quarter," stated Brett D. Heffes, Chair and Chief Executive Officer. "It is a dynamic time for the resale industry. Winmark has and will continue to make significant investments in operations, technology, marketing and innovation to enhance our leadership position in the industry."

Winmark - the Resale Company®, is a nationally recognized franchisor focused on sustainability and small business formation. We champion and guide entrepreneurs interested in operating one of our award winning resale franchises: Plato's Closet®, Once Upon A Child®, Play It Again Sports®, Style Encore® and Music Go Round®. At June 28, 2025, there were 1,371 franchises in operation and over 2,800 available territories. An additional 77 franchises have been awarded but are not open.

This press release contains forward-looking statements within the meaning of the safe harbor provisions of Section 21E of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), relating to future events or the future financial performance of the Company. Such forward-looking statements are only predictions or statements of intention subject to risks and uncertainties and actual events or results could differ materially from those anticipated. Because actual result may differ, shareholders and prospective investors are cautioned not to place undue reliance on such forward-looking statements.


WINMARK CORPORATION
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, net		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		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, 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


WINMARK CORPORATION
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


WINMARK CORPORATION
CONDENSED STATEMENTS OF CASH FLOWS
(Unaudited)

	Six Months Ended
	June 28, 2025			June 29, 2024
OPERATING ACTIVITIES:
Net income	$	20,557,600		$	19,250,400
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation of property and equipment		196,300			224,300
Amortization of intangible assets		177,000			177,000
Provision for credit losses		—			(1,500	)
Compensation expense related to stock options		1,065,600			940,500
Deferred income taxes		86,400			135,100
Operating lease right of use asset amortization		166,400			150,300
Tax benefits on exercised stock options		971,200			943,400
Change in operating assets and liabilities:
Receivables		(371,500	)		(136,100	)
Principal collections on lease receivables		—			96,300
Income tax receivable/payable		(1,341,400	)		(1,567,800	)
Inventories		35,500			117,900
Prepaid expenses		472,500			371,300
Other assets		(14,300	)		(8,200	)
Accounts payable		(371,700	)		(240,700	)
Accrued and other liabilities		2,178,000			940,300
Rents received in advance and security deposits		—			(19,700	)
Deferred revenue		315,700			213,200
Net cash provided by operating activities		24,123,300			21,586,000
INVESTING ACTIVITIES:
Purchase of property and equipment		(105,900	)		(190,600	)
Net cash used for investing activities		(105,900	)		(190,600	)
FINANCING ACTIVITIES:
Payments on notes payable		—			(2,125,000	)
Repurchases of common stock		(2,418,700	)		—
Proceeds from exercises of stock options		1,586,300			2,704,200
Dividends paid		(6,584,600	)		(5,963,700	)
Net cash used for financing activities		(7,417,000	)		(5,384,500	)
NET INCREASE IN CASH, CASH EQUIVALENTS AND RESTRICTED CASH		16,600,400			16,010,900
Cash, cash equivalents and restricted cash, beginning of period		12,329,800			13,386,500
Cash, cash equivalents and restricted cash, end of period	$	28,930,200		$	29,397,400
SUPPLEMENTAL DISCLOSURES:
Cash paid for interest	$	1,207,800		$	1,448,400
Cash paid for income taxes	$	5,368,500		$	5,484,400

The following table provides a reconciliation of cash, cash equivalents and restricted cash reported within the Condensed Balance Sheets to the total of the same amounts shown above:
	Six Months Ended
	June 28, 2025			June 29, 2024
Cash and cash equivalents	$	28,765,200		$	29,397,400
Restricted cash		165,000			—
Total cash, cash equivalents and restricted cash	$	28,930,200		$	29,397,400

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Anthony D. Ishaug

763/520-8500