Winmark Corporation (NASDAQ:WINA) announced today net income for the quarter ended March 28, 2026 of $9,254,700 or $2.50 per share diluted compared to net income of $9,956,400 or $2.71 per share diluted in 2025. First quarter 2025 results included $2.2 million of leasing income from the settlement of customer litigation.

"During the quarter we introduced two significant enhancements to our business model in partnership with our franchisees," noted Brett D. Heffes, Chair and Chief Executive Officer. "We are launching a North American Ad Fund for Plato's Closet as well as modernizing the point-of-sale offering for our franchisees. These two improvements are intended to provide permanent vehicles to fund ongoing reinvestment in marketing, technology and innovation initiatives on behalf of our franchisees." For additional details on these announcements, please refer to the Company's Current Report on Form 8-K filed with the Securities and Exchange Commission on March 16, 2026.

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 March 28, 2026, there were 1,383 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 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)

	March 28, 2026			December 27, 2025
ASSETS
Current Assets:
Cash and cash equivalents	$	19,828,300		$	10,295,700
Restricted cash		100,000			165,000
Receivables, net		2,002,500			1,483,500
Income tax receivable		—			463,600
Inventories		421,400			362,500
Prepaid expenses		2,698,800			1,325,700
Total current assets		25,051,000			14,096,000

Property and equipment, net		1,138,400			1,219,000
Operating lease right of use asset		1,670,700			1,761,500
Intangible assets, net		2,197,800			2,286,300
Goodwill		607,500			607,500
Other assets		525,400			506,400
Deferred income taxes		4,407,400			4,407,400
	$	35,598,200		$	24,884,100

LIABILITIES AND SHAREHOLDERS' EQUITY (DEFICIT)
Current Liabilities:
Accounts payable	$	1,057,500		$	1,673,900
Income tax payable		1,919,100			—
Accrued liabilities		4,496,800			2,324,800
Deferred revenue		1,654,700			1,667,300
Total current liabilities		9,128,100			5,666,000
Long-Term Liabilities:
Line of credit/Term loan		30,000,000			30,000,000
Notes payable, net		29,965,600			29,961,000
Deferred revenue		8,307,000			8,350,100
Operating lease liabilities		2,235,800			2,414,200
Other liabilities		2,170,400			2,175,200
Total long-term liabilities		72,678,800			72,900,500
Shareholders' Equity (Deficit):
Common stock, no par, 10,000,000 shares authorized, 3,577,671 and 3,571,861 shares issued and outstanding		21,260,800			19,612,800
Retained earnings (accumulated deficit)		(67,469,500	)		(73,295,200	)
Total shareholders' equity (deficit)		(46,208,700	)		(53,682,400	)
	$	35,598,200		$	24,884,100

WINMARK CORPORATION CONDENSED STATEMENTS OF OPERATIONS (Unaudited)

	Three Months Ended
	March 28, 2026			March 29, 2025
Revenue:
Royalties	$	19,262,800		$	17,774,700
Leasing income		—			2,307,800
Merchandise sales		653,900			941,300
Franchise fees		342,900			332,100
Other		590,100			563,800
Total revenue		20,849,700			21,919,700
Cost of merchandise sold		618,500			888,300
Selling, general and administrative expenses		7,869,600			7,434,800
Income from operations		12,361,600			13,596,600
Interest expense		(613,900	)		(613,900	)
Interest and other income		118,700			149,900
Income before income taxes		11,866,400			13,132,600
Provision for income taxes		(2,611,700	)		(3,176,200	)
Net income	$	9,254,700		$	9,956,400
Earnings per share - basic	$	2.59		$	2.81
Earnings per share - diluted	$	2.50		$	2.71
Weighted average shares outstanding - basic		3,573,767			3,538,647
Weighted average shares outstanding - diluted		3,708,538			3,672,943

WINMARK CORPORATION CONDENSED STATEMENTS OF CASH FLOWS (Unaudited)

	Three Months Ended
	March 28, 2026			March 29, 2025
OPERATING ACTIVITIES:
Net income	$	9,254,700		$	9,956,400
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation of property and equipment		95,200			97,200
Amortization of intangible assets		88,500			88,500
Compensation expense related to stock options		614,100			536,600
Operating lease right of use asset amortization		90,800			82,200
Tax benefits on exercised stock options		302,800			—
Change in operating assets and liabilities:
Receivables		(519,000	)		(1,250,000	)
Income tax receivable/payable		2,079,900			2,980,000
Inventories		(58,900	)		59,400
Prepaid expenses		(1,373,100	)		323,700
Other assets		(19,000	)		(25,200	)
Accounts payable		(616,400	)		(18,000	)
Accrued and other liabilities		1,993,500			2,018,300
Deferred revenue		(55,800	)		229,300
Net cash provided by operating activities		11,877,300			15,078,400
INVESTING ACTIVITIES:
Purchase of property and equipment		(14,600	)		(51,200	)
Net cash used for investing activities		(14,600	)		(51,200	)
FINANCING ACTIVITIES:
Repurchases of common stock		—			(2,249,900	)
Proceeds from exercises of stock options		1,033,900			47,700
Dividends paid		(3,429,000	)		(3,186,000	)
Net cash used for financing activities		(2,395,100	)		(5,388,200	)
NET DECREASE IN CASH, CASH EQUIVALENTS AND RESTRICTED CASH		9,467,600			9,639,000
Cash, cash equivalents and restricted cash, beginning of period		10,460,700			12,329,800
Cash, cash equivalents and restricted cash, end of period	$	19,928,300		$	21,968,800
SUPPLEMENTAL DISCLOSURES:
Cash paid for interest	$	604,000		$	604,000
Cash paid for income taxes	$	207,600		$	196,200

The following table provides a reconciliation of cash, cash equivalents and restricted cash reported within the Consolidated Condensed Balance Sheets to the total of the same amounts shown above:
	Three Months Ended
	March 27, 2026			March 29, 2025
Cash and cash equivalents	$	19,828,300		$	21,828,800
Restricted cash		100,000			140,000
Total cash, cash equivalents and restricted cash	$	19,928,300		$	21,968,800

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Anthony D. Ishaug

763/520-8500

Winmark Corporation Announces First Quarter Results