Form 8-K 2017 2nd Qtr.DOCX (00015283).DOCX

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d)

of the Securities Exchange Act of 1934

Date of report (Date of earliest event reported): April 16, 2025

Winmark Corporation

(Exact Name of Registrant as Specified in Its Charter)

Minnesota

(State or Other Jurisdiction of Incorporation)


000-22012	41-1622691
(Commission File Number)	(I.R.S. Employer Identification Number)

605 Highway 169 North, Suite 400, Minneapolis, Minnesota 55441

(Address of Principal Executive Offices) (Zip Code)

(763) 520-8500

(Registrant’s Telephone Number, Including Area Code)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

☐Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

☐Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

☐	Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

☐	Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Securities registered pursuant to Section 12(b) of the Act:


Title of each class:	Trading Symbol	Name of each exchange on which registered:
Common Stock, no par value per share	WINA	Nasdaq Global Market

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Item 2.02Results of Operations and Financial Condition

On April 16, 2025, Winmark Corporation (the “Company”) announced in a press release its results of operations and financial condition for the first quarter ended March 29, 2025. A copy of the press release is attached as Exhibit 99.1 of this Current Report on Form 8-K.

Item 7.01Regulation FD Disclosure

On April 16, 2025, the Company announced in a press release its results of operations and financial condition for the first quarter ended March 29, 2025. A copy of the press release is attached as Exhibit 99.1 of this Current Report on Form 8-K.

On April 16, 2025, the Company also announced in a press release that its Board of Directors has approved the payment of a cash dividend to its shareholders. The quarterly dividend of $0.96 per share will be paid on June 2, 2025 to shareholders of record on the close of business on May 14, 2025. Future dividends will be subject to Board approval. A copy of the press release is attached as Exhibit 99.2 of this Current Report of Form 8-K.

Item 8.01Other Events

On April 16, 2025, the Company announced in a press release that its Board of Directors has approved the payment of a cash dividend to its shareholders. The quarterly dividend of $0.96 per share will be paid on June 2, 2025 to shareholders of record on the close of business on May 14, 2025. Future dividends will be subject to Board approval. A copy of the press release is attached as Exhibit 99.2 of this Current Report of Form 8-K.

Item 9.01Financial Statements and Exhibits

(d)Exhibits

c
99.1		First Quarter Results Press Release dated April 16, 2025
99.2		Quarterly Cash Dividend Press Release dated April 16, 2025
104		Cover Page Interactive Data File (embedded within the Inline XBRL Document and incorporated as Exhibit 101)

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

co
	WINMARK CORPORATION

Date: April 16, 2025	By:	/s/ Anthony D. Ishaug
	Anthony D. Ishaug
	Chief Financial Officer and Treasurer

Exhibit 99.1

Contact:Anthony D. Ishaug

763/520-8500

FOR IMMEDIATE RELEASE

WINMARK CORPORATION ANNOUNCES FIRST QUARTER RESULTS

Minneapolis, MN (April 16, 2025) - Winmark Corporation (Nasdaq: WINA) announced today net income for the quarter ended March 29, 2025 of $9,956,400 or $2.71 per share diluted compared to net income of $8,819,000 or $2.41 per share diluted in 2024. First quarter results included $2.2 million of leasing income due to the settlement of outstanding customer litigation.

“The run-off of our leasing portfolio announced in May of 2021 is substantially complete.” 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 March 29, 2025, there were 1,363 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 29, 2025		December 28, 2024
ASSETS
Current Assets:
Cash and cash equivalents	$	21,828,800	$	12,189,800
Restricted cash		140,000		140,000
Receivables, net		2,586,400		1,336,400
Income tax receivable		—		96,400
Inventories		338,200		397,600
Prepaid expenses		881,600		1,205,400
Total current assets		25,775,000		15,365,600

Property and equipment, net		1,373,400		1,419,400
Operating lease right of use asset		2,026,600		2,108,700
Intangible assets, net		2,551,800		2,640,300
Goodwill		607,500		607,500
Other assets		516,400		491,200
Deferred income taxes		4,211,800		4,211,800
	$	37,062,500	$	26,844,500

LIABILITIES AND SHAREHOLDERS’ EQUITY (DEFICIT)
Current Liabilities:
Accounts payable	$	1,544,100	$	1,562,000
Income tax payable		2,883,600		—
Accrued liabilities		3,597,900		1,866,200
Deferred revenue		1,666,800		1,659,700
Total current liabilities		9,692,400		5,087,900
Long-Term Liabilities:
Line of credit/Term loan		30,000,000		30,000,000
Notes payable, net		29,947,400		29,942,800
Deferred revenue		8,249,800		8,027,600
Operating lease liabilities		2,929,500		3,092,800
Other liabilities		2,184,700		1,739,500
Total long-term liabilities		73,311,400		72,802,700
Shareholders’ Equity (Deficit):
Common stock, no par, 10,000,000 shares authorized, 3,532,571 and 3,539,744 shares issued and outstanding		13,124,900		14,790,500
Retained earnings (accumulated deficit)		(59,066,200)		(65,836,600)
Total shareholders’ equity (deficit)		(45,941,300)		(51,046,100)
	$	37,062,500	$	26,844,500

Winmark Corporation

CONDENSED STATEMENTS OF OPERATIONS

(Unaudited)


	Three Months Ended
	March 29, 2025		March 30, 2024
Revenue:
Royalties	$	17,774,700	$	17,268,700
Leasing income		2,307,800		836,800
Merchandise sales		941,300		1,110,500
Franchise fees		332,100		364,500
Other		563,800		529,000
Total revenue		21,919,700		20,109,500
Cost of merchandise sold		888,300		1,038,900
Leasing expense		—		36,600
Provision for credit losses		—		(1,500)
Selling, general and administrative expenses		7,434,800		6,817,300
Income from operations		13,596,600		12,218,200
Interest expense		(613,900)		(737,700)
Interest and other income		149,900		187,900
Income before income taxes		13,132,600		11,668,400
Provision for income taxes		(3,176,200)		(2,849,400)
Net income	$	9,956,400	$	8,819,000
Earnings per share - basic	$	2.81	$	2.52
Earnings per share - diluted	$	2.71	$	2.41
Weighted average shares outstanding - basic		3,538,647		3,497,261
Weighted average shares outstanding - diluted		3,672,943		3,661,367

Winmark Corporation

CONDENSED STATEMENTS OF CASH FLOWS

(Unaudited)


	Three Months Ended
	March 29, 2025		March 30, 2024
OPERATING ACTIVITIES:
Net income	$	9,956,400	$	8,819,000
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation of property and equipment		97,200		108,300
Amortization of intangible assets		88,500		88,500
Provision for credit losses		—		(1,500)
Compensation expense related to stock options		536,600		485,900
Operating lease right of use asset amortization		82,200		74,200
Change in operating assets and liabilities:
Receivables		(1,250,000)		(213,300)
Principal collections on lease receivables		—		62,300
Income tax receivable/payable		2,980,000		2,500,400
Inventories		59,400		(34,800)
Prepaid expenses		323,700		126,500
Other assets		(25,200)		(16,600)
Accounts payable		(18,000)		(423,100)
Accrued and other liabilities		2,018,300		1,729,800
Rents received in advance and security deposits		—		(19,700)
Deferred revenue		229,300		78,100
Net cash provided by operating activities		15,078,400		13,364,000
INVESTING ACTIVITIES:
Purchase of property and equipment		(51,200)		(87,900)
Net cash used for investing activities		(51,200)		(87,900)
FINANCING ACTIVITIES:
Payments on notes payable		—		(1,062,500)
Repurchases of common stock		(2,249,900)		—
Proceeds from exercises of stock options		47,700		70,000
Dividends paid		(3,186,000)		(2,797,900)
Net cash used for financing activities		(5,388,200)		(3,790,400)
NET INCREASE IN CASH, CASH EQUIVALENTS AND RESTRICTED CASH		9,639,000		9,485,700
Cash, cash equivalents and restricted cash, beginning of period		12,329,800		13,386,500
Cash, cash equivalents and restricted cash, end of period	$	21,968,800	$	22,872,200
SUPPLEMENTAL DISCLOSURES:
Cash paid for interest	$	604,000	$	725,700
Cash paid for income taxes	$	196,200	$	349,100

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	$	21,828,800	$	22,872,200
Restricted cash		140,000		—
Total cash, cash equivalents and restricted cash	$	21,968,800	$	22,872,200