Winmark Corporation (NASDAQ:WINA) announced today net income for the quarter ended September 27, 2025 of $11,136,500 or $3.02 per share diluted compared to net income of $11,120,700 or $3.03 per share diluted in 2024. For the nine months ended September 27, 2025, net income was $31,694,200 or $8.61 per share diluted compared to net income of $30,371,200 or $8.29 per share diluted for the same period last year.

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 27, 2025, there were 1,377 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)

	September 27, 2025			December 28, 2024
ASSETS
Current Assets:
Cash and cash equivalents	$	39,734,800		$	12,189,800
Restricted cash		140,000			140,000
Receivables, net		1,652,900			1,336,400
Income tax receivable		3,000			96,400
Inventories		283,700			397,600
Prepaid expenses		1,249,900			1,205,400
Total current assets		43,064,300			15,365,600

Property and equipment, net		1,296,600			1,419,400
Operating lease right of use asset		1,856,100			2,108,700
Intangible assets, net		2,374,800			2,640,300
Goodwill		607,500			607,500
Other assets		496,200			491,200
Deferred income taxes		4,051,700			4,211,800
	$	53,747,200		$	26,844,500

LIABILITIES AND SHAREHOLDERS' EQUITY (DEFICIT)
Current Liabilities:
Accounts payable	$	1,373,200		$	1,562,000
Accrued liabilities		4,195,700			1,866,200
Deferred revenue		1,663,200			1,659,700
Total current liabilities		7,232,100			5,087,900
Long-Term Liabilities:
Line of credit/Term loan		30,000,000			30,000,000
Notes payable, net		29,956,500			29,942,800
Deferred revenue		8,355,600			8,027,600
Operating lease liabilities		2,594,000			3,092,800
Other liabilities		1,950,200			1,739,500
Total long-term liabilities		72,856,300			72,802,700
Shareholders' Equity (Deficit):
Common stock, no par, 10,000,000 shares authorized, 3,561,550 and 3,539,744 shares issued and outstanding		17,792,700			14,790,500
Retained earnings (accumulated deficit)		(44,133,900	)		(65,836,600	)
Total shareholders' equity (deficit)		(26,341,200	)		(51,046,100	)
	$	53,747,200		$	26,844,500

WINMARK CORPORATION
CONDENSED STATEMENTS OF OPERATIONS
(Unaudited)

	Three Months Ended						Nine Months Ended
	September 27, 2025			September 28, 2024			September 27, 2025			September 28, 2024
Revenue:
Royalties	$	20,911,300		$	19,512,500		$	57,348,000		$	54,555,700
Leasing income		46,600			316,200			2,401,100			1,677,400
Merchandise sales		693,600			702,500			2,438,500			2,738,500
Franchise fees		417,600			451,200			1,088,100			1,182,700
Other		563,800			528,500			1,693,700			1,586,800
Total revenue		22,632,900			21,510,900			64,969,400			61,741,100
Cost of merchandise sold		663,300			662,500			2,318,100			2,562,600
Leasing expense		—			—			—			36,600
Provision for credit losses		—			—			—			(1,500	)
Selling, general and administrative expenses		7,046,400			5,919,800			21,070,500			18,979,000
Income from operations		14,923,200			14,928,600			41,580,800			40,164,400
Interest expense		(610,300	)		(704,100	)		(1,833,900	)		(2,163,300	)
Interest and other income		310,300			386,400			714,800			855,200
Income before income taxes		14,623,200			14,610,900			40,461,700			38,856,300
Provision for income taxes		(3,486,700	)		(3,490,200	)		(8,767,500	)		(8,485,100	)
Net income	$	11,136,500		$	11,120,700		$	31,694,200		$	30,371,200
Earnings per share - basic	$	3.13		$	3.16		$	8.94		$	8.65
Earnings per share - diluted	$	3.02		$	3.03		$	8.61		$	8.29
Weighted average shares outstanding - basic		3,553,211			3,520,334			3,543,766			3,510,461
Weighted average shares outstanding - diluted		3,693,154			3,671,121			3,679,745			3,663,309

WINMARK CORPORATION
CONDENSED STATEMENTS OF CASH FLOWS
(Unaudited)

	Nine Months Ended
	September 27, 2025			September 28, 2024
OPERATING ACTIVITIES:
Net income	$	31,694,200		$	30,371,200
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation of property and equipment		295,500			345,600
Amortization of intangible assets		265,500			265,500
Provision for credit losses		—			(1,500	)
Compensation expense related to stock options		1,666,900			1,458,200
Deferred income taxes		160,100			135,100
Operating lease right of use asset amortization		252,700			228,200
Tax benefits on exercised stock options		1,091,900			943,300
Change in operating assets and liabilities:
Receivables		(316,500	)		(126,900	)
Principal collections on lease receivables		—			104,700
Income tax receivable/payable		(998,500	)		(881,600	)
Inventories		113,900			(55,700	)
Prepaid expenses		(44,500	)		220,500
Other assets		(5,000	)		(7,200	)
Accounts payable		(188,800	)		(118,700	)
Accrued and other liabilities		2,054,900			472,200
Rents received in advance and security deposits		—			(28,000	)
Deferred revenue		331,500			375,100
Net cash provided by operating activities		36,373,800			33,700,000
INVESTING ACTIVITIES:
Purchase of property and equipment		(172,700	)		(194,900	)
Net cash used for investing activities		(172,700	)		(194,900	)
FINANCING ACTIVITIES:
Payments on notes payable		—			(3,187,500	)
Repurchases of common stock		(2,418,700	)		—
Proceeds from exercises of stock options		3,754,000			2,715,000
Dividends paid		(9,991,400	)		(9,132,100	)
Net cash used for financing activities		(8,656,100	)		(9,604,600	)
NET INCREASE IN CASH, CASH EQUIVALENTS AND RESTRICTED CASH		27,545,000			23,900,500
Cash, cash equivalents and restricted cash, beginning of period		12,329,800			13,386,500
Cash, cash equivalents and restricted cash, end of period	$	39,874,800		$	37,287,000
SUPPLEMENTAL DISCLOSURES:
Cash paid for interest	$	1,815,500		$	2,149,200
Cash paid for income taxes	$	8,514,100		$	8,281,400

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:
	Nine Months Ended
	September 27, 2025			September 28, 2024
Cash and cash equivalents	$	39,734,800		$	37,197,000
Restricted cash		140,000			90,000
Total cash, cash equivalents and restricted cash	$	39,874,800		$	37,287,000

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Anthony D. Ishaug

763/520-8500