Winmark Corporation Announces Year End Results

MINNEAPOLIS--( BUSINESS WIRE)--Winmark Corporation (Nasdaq: WINA) announced today net income for the year ended December 27, 2025 of $41,654,100 or $11.30 per share diluted compared to net income of $39,954,200 or $10.89 per share diluted in 2024. The fourth quarter 2025 net income was $9,959,900 or $2.69 per share diluted compared to net income of $9,583,100 or $2.60 per share diluted for the same period last year. Revenues for the year ended December 27, 2025 were $86,055,700, up from $81,289,100 in 2024.

“During the year, Winmark made significant investments in marketing, technology, and innovation. We will continue to build a strong foundation in these areas to support our franchisees and enhance our shared business model,” commented Brett D. Heffes, Chair and Chief Executive Officer.

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 December 27, 2025, there were 1,378 franchises in operation and over 2,800 available territories. An additional 82 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)

December 27, 2025

December 28, 2024

ASSETS

Current Assets:

Cash and cash equivalents

10,295,700

12,189,800

Restricted cash

165,000

140,000

Receivables, net

1,483,500

1,336,400

Income tax receivable

463,600

96,400

Inventories

362,500

397,600

Prepaid expenses

1,325,700

1,205,400

Total current assets

14,096,000

15,365,600

Property and equipment, net

1,219,000

1,419,400

Operating lease right of use asset

1,761,500

2,108,700

Intangible assets, net

2,286,300

2,640,300

Goodwill

607,500

Other assets

506,400

491,200

Deferred income taxes

4,407,400

4,211,800

24,884,100

26,844,500

LIABILITIES AND SHAREHOLDERS’ EQUITY (DEFICIT)

Current Liabilities:

Accounts payable

1,673,900

1,562,000

Accrued liabilities

2,324,800

1,866,200

Deferred revenue

1,667,300

1,659,700

Total current liabilities

5,666,000

5,087,900

Long-Term Liabilities:

Line of credit/Term loan

30,000,000

Notes payable, net

29,961,000

29,942,800

Deferred revenue

8,350,100

8,027,600

Operating lease liabilities

2,414,200

3,092,800

Other liabilities

2,175,200

1,739,500

Total long-term liabilities

72,900,500

72,802,700

Shareholders’ Equity (Deficit):

Common stock, no par, 10,000,000 shares authorized, 3,571,861 and 3,539,744 shares issued and outstanding

19,612,800

14,790,500

Retained earnings (accumulated deficit)

(73,295,200)

(65,836,600)

Total shareholders’ equity (deficit)

(53,682,400)

(51,046,100)

24,884,100

26,844,500

WINMARK CORPORATION

CONDENSED STATEMENTS OF OPERATIONS

(Unaudited)

Quarter Ended

Fiscal Year Ended

December 27, 2025

December 28, 2024

December 27, 2025

December 28, 2024

Revenue:

Royalties

19,004,800

17,642,800

76,352,800

72,198,500

Leasing income

230,700

134,500

2,631,800

1,811,800

Merchandise sales

844,300

862,900

3,282,800

3,601,300

Franchise fees

437,800

362,800

1,525,800

1,545,600

Other

568,700

545,100

2,262,500

2,131,900

Total revenue

21,086,300

19,548,100

86,055,700

81,289,100

Cost of merchandise sold

786,300

816,700

3,104,400

3,379,200

Leasing expense

—

36,600

Provision for credit losses

—

(1,500)

Selling, general and administrative expenses

7,286,900

5,965,200

28,357,400

24,944,200

Income from operations

13,013,100

12,766,200

54,593,900

52,930,600

Interest expense

(612,900)

(693,600)

(2,446,800)

(2,856,900)

Interest and other income

273,800

295,100

988,500

1,150,300

Income before income taxes

12,674,000

12,367,700

53,135,600

51,224,000

Provision for income taxes

(2,714,100)

(2,784,600)

(11,481,500)

(11,269,800)

Net income

9,959,900

9,583,100

41,654,100

39,954,200

Earnings per share - basic

2.79

2.71

11.73

11.36

Earnings per share - diluted

2.69

2.60

11.30

10.89

Weighted average shares outstanding - basic

3,567,717

3,533,107

3,549,753

3,516,122

Weighted average shares outstanding - diluted

3,702,597

3,679,992

3,685,457

3,667,479

WINMARK CORPORATION

CONDENSED STATEMENTS OF CASH FLOWS

(Unaudited)

Year Ended

December 27, 2025

December 28, 2024

OPERATING ACTIVITIES:

Net income

41,654,100

39,954,200

Adjustments to reconcile net income to net cash provided by operating activities:

Depreciation of property and equipment

392,700

445,300

Amortization of intangible assets

354,000

Provision for credit losses

—

(1,500)

Compensation expense related to stock options

2,283,300

1,988,000

Deferred income taxes

(195,600)

(159,400)

Operating lease right of use asset amortization

347,300

317,100

Tax benefits on exercised stock options

1,619,000

1,307,700

Change in operating assets and liabilities:

Receivables

(147,100)

138,900

Principal collections on lease receivables

—

104,700

Income tax receivable/payable

(1,986,200)

(1,372,800)

Inventories

35,100

(11,500)

Prepaid expenses

(120,300)

186,700

Other assets

(15,200)

(19,900)

Accounts payable

111,700

(157,400)

Accrued and other liabilities

233,900

(1,251,900)

Rents received in advance and security deposits

—

(28,000)

Deferred revenue

330,100

363,700

Net cash provided by operating activities

44,896,800

42,157,900

INVESTING ACTIVITIES:

Purchase of property and equipment

(192,300)

(194,900)

Net cash used for investing activities

(192,300)

(194,900)

FINANCING ACTIVITIES:

Payments on notes payable

—

(9,187,500)

Repurchases of common stock

(2,418,700)

—

Proceeds from exercises of stock options

4,957,800

5,033,700

Dividends paid

(49,112,700)

(38,865,900)

Net cash used for financing activities

(46,573,600)

(43,019,700)

NET DECREASE IN CASH, CASH EQUIVALENTS AND RESTRICTED CASH

(1,869,100)

(1,056,700)

Cash, cash equivalents and restricted cash, beginning of period

12,329,800

13,386,500

Cash, cash equivalents and restricted cash, end of period

10,460,700

12,329,800

SUPPLEMENTAL DISCLOSURES:

Cash paid for interest

2,415,700

2,851,000

Cash paid for income taxes

11,814,700

11,168,700

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:

Year Ended

December 27, 2025

December 28, 2024

Cash and cash equivalents

10,295,700

12,189,800

Restricted cash

165,000

140,000

Total cash, cash equivalents and restricted cash

10,460,700

12,329,800