Winmark Corporation (NASDAQ:WINA) announced today net income for the year ended December 28, 2024 of $39,954,200 or $10.89 per share diluted compared to net income of $40,178,100 or $11.04 per share diluted in 2023. The fourth quarter 2024 net income was $9,583,100 or $2.60 per share diluted compared to net income of $9,716,800 or $2.64 per share diluted for the same period last year. Revenues for the year ended December 28, 2024 were $81,289,100, down from $83,243,500 in 2023. 2024 results were impacted by the Company's decision in May 2021 to run-off its leasing portfolio.

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 28, 2024, there were 1,350 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)

	December 28, 2024			December 30, 2023
ASSETS
Current Assets:
Cash and cash equivalents	$	12,189,800		$	13,361,500
Restricted cash		140,000			25,000
Receivables, net		1,336,400			1,475,300
Net investment in leases - current		—			75,100
Income tax receivable		96,400			31,400
Inventories		397,600			386,100
Prepaid expenses		1,205,400			1,392,100
Total current assets		15,365,600			16,746,500

Property and equipment, net		1,419,400			1,669,800
Operating lease right of use asset		2,108,700			2,425,900
Intangible assets, net		2,640,300			2,994,300
Goodwill		607,500			607,500
Other assets		491,200			471,300
Deferred income taxes		4,211,800			4,052,400
	$	26,844,500		$	28,967,700

LIABILITIES AND SHAREHOLDERS' EQUITY (DEFICIT)
Current Liabilities:
Notes payable, net	$	—		$	4,217,900
Accounts payable		1,562,000			1,719,400
Accrued liabilities		1,866,200			2,858,200
Deferred revenue		1,659,700			1,666,100
Total current liabilities		5,087,900			10,461,600
Long-Term Liabilities:
Line of credit/Term loan		30,000,000			30,000,000
Notes payable, net		29,942,800			34,848,800
Deferred revenue		8,027,600			7,657,500
Operating lease liabilities		3,092,800			3,715,800
Other liabilities		1,739,500			1,440,100
Total long-term liabilities		72,802,700			77,662,200
Shareholders' Equity (Deficit):
Common stock, no par, 10,000,000 shares authorized, 3,539,744 and 3,496,977 shares issued and outstanding		14,790,500			7,768,800
Retained earnings (accumulated deficit)		(65,836,600	)		(66,924,900	)
Total shareholders' equity (deficit)		(51,046,100	)		(59,156,100	)
	$	26,844,500		$	28,967,700


WINMARK CORPORATION CONDENSED STATEMENTS OF OPERATIONS (Unaudited)

	Quarter Ended						Fiscal Year Ended
	December 28, 2024			December 30, 2023			December 28, 2024			December 30, 2023
Revenue:
Royalties	$	17,642,800		$	17,167,200		$	72,198,500		$	70,230,700
Leasing income		134,500			817,600			1,811,800			4,766,200
Merchandise sales		862,900			1,159,200			3,601,300			4,761,100
Franchise fees		362,800			378,600			1,545,600			1,512,000
Other		545,100			517,300			2,131,900			1,973,500
Total revenue		19,548,100			20,039,900			81,289,100			83,243,500
Cost of merchandise sold		816,700			1,091,100			3,379,200			4,461,500
Leasing expense		—			16,600			36,600			398,300
Provision for credit losses		—			(1,000	)		(1,500	)		(5,600	)
Selling, general and administrative expenses		5,965,200			6,414,400			24,944,200			25,108,700
Income from operations		12,766,200			12,518,800			52,930,600			53,280,600
Interest expense		(693,600	)		(751,100	)		(2,856,900	)		(3,091,000	)
Interest and other income		295,100			368,300			1,150,300			1,171,700
Income before income taxes		12,367,700			12,136,000			51,224,000			51,361,300
Provision for income taxes		(2,784,600	)		(2,419,200	)		(11,269,800	)		(11,183,200	)
Net income	$	9,583,100		$	9,716,800		$	39,954,200		$	40,178,100
Earnings per share - basic	$	2.71		$	2.78		$	11.36		$	11.55
Earnings per share - diluted	$	2.60		$	2.64		$	10.89		$	11.04
Weighted average shares outstanding - basic		3,533,107			3,494,544			3,516,122			3,479,936
Weighted average shares outstanding - diluted		3,679,992			3,679,444			3,667,479			3,640,524


WINMARK CORPORATION CONDENSED STATEMENTS OF CASH FLOWS (Unaudited)

	Year Ended
	December 28, 2024			December 30, 2023
OPERATING ACTIVITIES:
Net income	$	39,954,200		$	40,178,100
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation of property and equipment		445,300			418,700
Amortization of intangible assets		354,000			354,000
Provision for credit losses		(1,500	)		(5,600	)
Compensation expense related to stock options		1,988,000			1,952,400
Deferred income taxes		(159,400	)		(512,000	)
Operating lease right of use asset amortization		317,100			290,100
Tax benefits on exercised stock options		1,307,700			1,138,500
Change in operating assets and liabilities:
Receivables		138,900			(36,700	)
Principal collections on lease receivables		104,700			556,000
Income tax receivable/payable		(1,372,800	)		(611,200	)
Inventories		(11,500	)		384,500
Prepaid expenses		186,700			(81,700	)
Other assets		(19,900	)		(41,600	)
Accounts payable		(157,400	)		(402,600	)
Accrued and other liabilities		(1,251,900	)		(16,900	)
Rents received in advance and security deposits		(28,000	)		(275,200	)
Deferred revenue		363,700			705,500
Net cash provided by operating activities		42,157,900			43,994,300
INVESTING ACTIVITIES:
Purchase of property and equipment		(194,900	)		(383,900	)
Net cash used for investing activities		(194,900	)		(383,900	)
FINANCING ACTIVITIES:
Payments on notes payable		(9,187,500	)		(4,250,000	)
Proceeds from exercises of stock options		5,033,700			4,009,700
Dividends paid		(38,865,900	)		(43,664,200	)
Net cash used for financing activities		(43,019,700	)		(43,904,500	)
NET INCREASE (DECREASE) IN CASH, CASH EQUIVALENTS AND RESTRICTED CASH		(1,056,700	)		(294,100	)
Cash, cash equivalents and restricted cash, beginning of period		13,386,500			13,680,600
Cash, cash equivalents and restricted cash, end of period	$	12,329,800		$	13,386,500
SUPPLEMENTAL DISCLOSURES:
Cash paid for interest	$	2,851,000		$	3,049,400
Cash paid for income taxes	$	11,168,700		$	10,874,300

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 28, 2024			December 30, 2023
Cash and cash equivalents	$	12,189,800		$	13,361,500
Restricted cash		140,000			25,000
Total cash, cash equivalents and restricted cash	$	12,329,800		$	13,386,500

View source version on businesswire.com: https://www.businesswire.com/news/home/20250218640607/en/

Anthony D. Ishaug

763/520-8500

Winmark Corporation Announces Year End Results