Winmark Corporation (NASDAQ:WINA) announced today net income for the quarter ended September 26, 2026 of $11,818,100 or $3.21 per share diluted compared to net income of $11,136,500 or $3.02 per share diluted in 2025. For the nine months ended September 26, 2026, net income was $31,467,700 or $8.51 per share diluted compared to net income of $31,694,200 or $8.61 per share diluted for the same period last year. 2025 year-to-date results included $2.2 million of leasing income from the settlement of customer litigation.

"During the quarter, Winmark launched the North American Advertising Fund for Plato’s Closet and recently delivered a point-of-sale pilot at one of our franchised locations. Additionally, we have announced North American Advertising Funds for our Once Upon A Child and Play It Again Sports brands for campaigns starting in 2027," stated Brett D. Heffes, Chair and Chief Executive Officer. "For many years Winmark and our franchisees have underinvested in the marketing necessary to consistently amplify our message across North America. We are taking the appropriate steps to expand awareness of our brands."

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 September 26, 2026, there were 1,398 franchises in operation and over 2,800 available territories. An additional 79 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 results may differ, shareholders and prospective investors are cautioned not to place undue reliance on such forward-looking statements.


WINMARK CORPORATION
CONDENSED BALANCE SHEETS
(Unaudited)


	September 26, 2026			December 27, 2025
ASSETS
Current Assets:
Cash and cash equivalents	$	27,964,200		$	10,295,700
Restricted cash		150,000			165,000
Receivables, net		2,253,300			1,483,500
Income tax receivable		—			463,600
Inventories		789,200			362,500
Prepaid expenses		1,447,200			1,325,700
Total current assets		32,603,900			14,096,000

Property and equipment, net		1,214,400			1,219,000
Operating lease right of use asset		1,482,300			1,761,500
Intangible assets, net		2,020,800			2,286,300
Capitalized software		2,272,400			—
Goodwill		607,500			607,500
Other assets		528,500			506,400
Deferred income taxes		4,304,900			4,407,400
	$	45,034,700		$	24,884,100

LIABILITIES AND SHAREHOLDERS’ EQUITY (DEFICIT)
Current Liabilities:
Accounts payable	$	1,824,800		$	1,673,900
Income tax payable		100,200			—
Accrued liabilities		6,612,500			2,324,800
Deferred revenue		1,666,900			1,667,300
Total current liabilities		10,204,400			5,666,000
Long-Term Liabilities:
Line of credit/Term loan		30,000,000			30,000,000
Notes payable, net		29,974,700			29,961,000
Deferred revenue		8,447,400			8,350,100
Operating lease liabilities		1,869,500			2,414,200
Other liabilities		1,936,000			2,175,200
Total long-term liabilities		72,227,600			72,900,500
Shareholders’ Equity (Deficit):
Common stock, no par, 10,000,000 shares authorized, 3,559,195 and 3,571,861 shares issued and outstanding		15,181,700			19,612,800
Retained earnings (accumulated deficit)		(52,579,000	)		(73,295,200	)
Total shareholders’ equity (deficit)		(37,397,300	)		(53,682,400	)
	$	45,034,700		$	24,884,100


WINMARK CORPORATION
CONDENSED STATEMENTS OF OPERATIONS
(Unaudited)

	Three Months Ended						Nine Months Ended
	September 26, 2026			September 27, 2025			September 26, 2026			September 27, 2025
Revenue:
Royalties	$	21,707,800		$	20,911,300		$	61,087,600		$	57,348,000
North American advertising fund		3,825,300			—			3,825,300			—
Software		497,100			93,100			678,900			278,900
Franchise fees		330,100			417,600			1,092,500			1,088,100
Merchandise sales		1,031,500			693,600			2,544,700			2,438,500
Leasing income		—			46,600			—			2,401,100
Other		498,700			470,700			1,477,200			1,414,800
Total revenue		27,890,500			22,632,900			70,706,200			64,969,400
North American advertising fund expense		3,825,300			—			3,825,300			—
Cost of merchandise sold		947,300			663,300			2,384,200			2,318,100
Selling, general and administrative expenses		7,332,100			7,046,400			22,708,200			21,070,500
Income from operations		15,785,800			14,923,200			41,788,500			41,580,800
Interest expense		(610,300	)		(610,300	)		(1,834,000	)		(1,833,900	)
Interest and other income		242,100			310,300			516,500			714,800
Income before income taxes		15,417,600			14,623,200			40,471,000			40,461,700
Provision for income taxes		(3,599,500	)		(3,486,700	)		(9,003,300	)		(8,767,500	)
Net income	$	11,818,100		$	11,136,500		$	31,467,700		$	31,694,200
Earnings per share - basic	$	3.29		$	3.13		$	8.79		$	8.94
Earnings per share - diluted	$	3.21		$	3.02		$	8.51		$	8.61
Weighted average shares outstanding - basic		3,588,328			3,553,211			3,581,906			3,543,766
Weighted average shares outstanding - diluted		3,685,668			3,693,154			3,697,251			3,679,745


WINMARK CORPORATION
CONDENSED STATEMENTS OF CASH FLOWS
(Unaudited)

	Nine Months Ended
	September 26, 2026		September 27, 2025
OPERATING ACTIVITIES:
Net income	$	31,467,700	$	31,694,200
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation of property and equipment		281,300		295,500
Amortization of intangible assets		265,500		265,500
Compensation expense related to stock options		1,917,200		1,666,900
Deferred income taxes		102,600		160,100
Operating lease right of use asset amortization		279,200		252,700
Tax benefits on exercised stock options		898,800		1,091,900
Change in operating assets and liabilities:
Receivables		(769,800)		(316,500)
Income tax receivable/payable		(335,000)		(998,500)
Inventories		(426,700)		113,900
Prepaid expenses		(121,600)		(44,500)
Other assets		(22,100)		(5,000)
Accounts payable		150,900		(188,800)
Accrued and other liabilities		1,763,500		2,054,900
Deferred revenue		96,900		331,500
Net cash provided by operating activities		35,548,400		36,373,800
INVESTING ACTIVITIES:
Capitalized software		(2,272,400)		—
Purchase of property and equipment		(276,700)		(172,700)
Net cash used for investing activities		(2,549,100)		(172,700)
FINANCING ACTIVITIES:
Repurchases of common stock		(8,091,600)		(2,418,700)
Proceeds from exercises of stock options		3,497,200		3,754,000
Dividends paid		(10,751,400)		(9,991,400)
Net cash used for financing activities		(15,345,800)		(8,656,100)
NET INCREASE IN CASH, CASH EQUIVALENTS AND RESTRICTED CASH		17,653,500		27,545,000
Cash, cash equivalents and restricted cash, beginning of period		10,460,700		12,329,800
Cash, cash equivalents and restricted cash, end of period	$	28,114,200	$	39,874,800

SUPPLEMENTAL DISCLOSURES:
Cash paid for interest	$	1,802,900	$	1,815,500
Cash paid for income taxes	$	8,210,800	$	8,514,100

SUPPLEMENTAL NONCASH FINANCING ACTIVITIES
During the nine months ended September 26, 2026, the Company repurchased $9.85 million of its common stock under its share repurchase program. At September 26, 2026, $1.75 million of such repurchases was included in Accrued liabilities within the Condensed Balance Sheets. Cash payments for repurchased shares during the quarter totaled $8.10 million.

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:
	Nine Months Ended
	September 26, 2026		September 27, 2025
Cash and cash equivalents	$	27,964,200	$	39,734,800
Restricted cash		150,000		140,000
Total cash, cash equivalents and restricted cash	$	28,114,200	$	39,874,800

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Anthony D. Ishaug

763/520-8500