Winmark (WINA) 8-K Winmark Corporation Announces Year End Results

Exhibit 99.1

Contact:John L. Morgan

763/520-8500

FOR IMMEDIATE RELEASE

WINMARK CORPORATION ANNOUNCES YEAR END RESULTS

Minneapolis, MN (February 24, 2010) – Winmark Corporation (Nasdaq: WINA) announced today net income for the year ended December 26, 2009 of $5,849,000 or $1.10 per share diluted, compared to net income of $1,139,400 or $.21 per share diluted, in 2008.  The fourth quarter 2009 net income was $1,460,500, or $.28 per share diluted, compared to a net loss of ($2,079,200), or ($.38) per share diluted, for the same period last year.  2008 results were impacted by a $2.8 million after-tax earnings charge, or $.52 per share for the fourth quarter, related to the impairment in Winmark’s investment in Tomsten, Inc. (d/b/a Archiver’s).  Revenues for the year ended December 26, 2009 were $37,296,000, up from $35,423,600 in 2008.

John Morgan, Chairman and Chief Executive Officer, stated “We finished 2009 with strong performance from our franchising business and improved profitability from our leasing activities.  We are satisfied with our results in 2009 and feel we are well positioned for 2010.”

Winmark Corporation creates, supports and finances business.  At December 26, 2009, there were 877 franchises in operation under the brands Play It Again Sports®, Once Upon A Child®, Plato’s Closet®, Music Go Round® and there were 37 territories in operation under the Wirth Business Credit® brand.  An additional 46 retail franchises have been awarded but are not open.  In addition, at December 26, 2009, the Company had loans and leases equal to $39.0 million.

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 including statements with respect to our ability to finance the growth of our leasing and franchising businesses for the foreseeable future.  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

	December 26, 2009 (unaudited)		December 27,2008 (audited)
ASSETS
Current Assets:
Cash and cash equivalents	$	9,490,800	$	2,140,000
Marketable securities	1,274,000		438,300
Current investments	2,000,000		500,000
Receivables, less allowance for doubtful accounts of $35,700 and $52,700	1,761,100		2,064,100
Net investment in leases - current	17,575,900		17,379,700
Income tax receivable	—		792,200
Inventories	111,400		141,500
Prepaid expenses	398,800		1,018,800
Deferred income taxes	—		216,900
Total current assets	32,612,000		24,691,500
Net investment in leases - long term	19,423,700		28,035,300
Long-term investments	2,232,900		3,833,300
Long-term notes receivables, net	14,900		39,200
Property and equipment, net	1,843,500		512,200
Other assets	677,500		677,500
Deferred income taxes	—		320,800
	$	56,804,500	$	58,109,800
LIABILITIES AND SHAREHOLDERS’ EQUITY
Current Liabilities:
Current line of credit	$	3,983,100	$	4,313,200
Current renewable unsecured subordinated notes	9,166,900		8,052,400
Accounts payable	1,415,200		1,108,200
Income tax payable	183,500		—
Accrued liabilities	1,794,100		2,905,400
Current discounted lease rentals	972,600		1,012,900
Current rents received in advance	294,400		141,600
Current deferred revenue	1,188,800		993,600
Deferred income taxes	1,057,700		—
Total current liabilities	20,056,300		18,527,300
Long-term line of credit	5,298,900		9,276,300
Long-term renewable unsecured subordinated notes	12,058,700		12,788,700
Long-term discounted lease rentals	507,600		1,298,500
Long-term rents received in advance	1,332,000		1,696,400
Long-term deferred revenue	709,500		631,400
Other long-term liabilities	1,298,400		—
Deferred income taxes	214,400		—
Shareholders’ Equity:
Common stock, no par, 10,000,000 shares authorized, 5,125,025 and 5,433,610 shares issued and outstanding	—		427,500
Other comprehensive income (loss)	9,600		(38,500		)
Retained earnings	15,319,100		13,502,200
Total shareholders’ equity	15,328,700		13,891,200
	$	56,804,500	$	58,109,800

WINMARK CORPORATION

CONDENSED STATEMENTS OF OPERATIONS

	Quarter Ended						Fiscal Year Ended
	December 26, 2009 (unaudited)			December 27, 2008 (unaudited)			December 26, 2009 (unaudited)			December 27, 2008 (audited)
REVENUE:
Royalties	$	5,969,600		$	5,428,200		$	23,616,200		$	21,804,200
Leasing income	2,420,500			2,172,800			9,536,900			8,092,800
Merchandise sales	488,200			582,700			2,386,700			3,268,100
Franchise fees	268,300			359,000			1,072,900			1,704,500
Other	236,500			158,000			683,300			554,000
Total revenue	9,383,100			8,700,700			37,296,000			35,423,600
COST OF MERCHANDISE SOLD	473,500			555,300			2,290,200			3,120,700
LEASING EXPENSE	544,900			461,800			2,288,200			1,881,800
PROVISION FOR CREDIT LOSSES	918,000			1,343,700			2,795,500			2,569,800
SELLING, GENERAL AND ADMINISTRATIVE EXPENSES	4,761,800			4,691,800			19,141,700			19,760,200
Income from operations	2,684,900			1,648,100			10,780,400			8,091,100
LOSS FROM EQUITY INVESTMENTS	(39,100		)	(2,881,500		)	(100,500		)	(3,163,200		)
INTEREST EXPENSE	(299,200		)	(306,800		)	(1,309,000		)	(1,305,000		)
INTEREST AND OTHER INCOME (LOSS)	107,900			(21,700		)	459,300			224,600
Income (loss) before income taxes	2,454,500			(1,561,900		)	9,830,200			3,847,500
PROVISION FOR INCOME TAXES	(994,000		)	(517,300		)	(3,981,200		)	(2,708,100		)
NET INCOME (LOSS)	$	1,460,500		$	(2,079,200	)	$	5,849,000		$	1,139,400
EARNINGS (LOSS) PER SHARE - BASIC	$	.28		$	(.38	)	$	1.10		$	.21
EARNINGS (LOSS) PER SHARE - DILUTED	$	.28		$	(.38	)	$	1.10		$	.21
WEIGHTED AVERAGE SHARES OUTSTANDING - BASIC	5,205,082			5,461,011			5,303,177			5,504,705
WEIGHTED AVERAGE SHARES OUTSTANDING - DILUTED	5,278,875			5,461,011			5,337,668			5,531,216