Winmark (WINA) 8-K Results of Operations and Financial Condition

Exhibit 99.1

Contact:John L. Morgan

763/520-8500

FOR IMMEDIATE RELEASE

WINMARK CORPORATION ANNOUNCES

THIRD QUARTER RESULTS

Minneapolis, MN (October 16, 2013)  —  Winmark Corporation (Nasdaq; WINA) announced today net income for the quarter ended September 28, 2013 of $5,251,500 (or $1.00 per share diluted) compared to net income of $4,259,500  (or $.82 per share diluted) in the third quarter of 2012.  For the nine months ended September 28, 2013, net income was $13,645,800 (or $2.61 per share diluted) compared to net income of $11,179,900 (or $2.13 per share diluted) for the same period last year.

Earnings growth in the quarter was primarily attributable to the non-cash charges recorded during the third quarter of 2012 related to the Company’s long-term investments.  John Morgan, Chairman and CEO, commented “During the quarter, we opened our first Style Encore store and as of the end of the quarter, we had 21 additional signed franchise agreements for this concept.  We believe Style Encore represents a significant growth opportunity for our franchising business.”

Winmark Corporation creates, supports and finances business.  At September 28, 2013, there were 995 franchises in operation under the brands Plato’s Closet®, Play It Again Sports®, Once Upon A Child®, Music Go Round® and Style Encore™.  An additional 88 retail franchises have been awarded but are not open.  In addition, at September 28, 2013, the Company had a lease portfolio of $36.7 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

(unaudited)

	September 28, 2013			December 29, 2012
ASSETS
Current Assets:
Cash and cash equivalents	$	8,248,000		$	2,233,400
Marketable securities	401,000			85,900
Receivables, net	1,116,900			1,237,100
Net investment in leases - current	16,398,700			13,461,200
Income tax receivable	366,700			1,400,700
Inventories	69,400			71,200
Prepaid expenses	618,600			445,200
Total current assets	27,219,300			18,934,700
Net investment in leases – long-term	20,274,700			22,697,100
Property and equipment, net	1,073,700			1,229,500
Other assets	677,500			677,500
	$	49,245,200		$	43,538,800
LIABILITIES AND SHAREHOLDERS’ EQUITY
Current Liabilities:
Line of credit	$	—		$	10,800,000
Accounts payable	1,724,300			2,203,700
Accrued liabilities	2,359,100			1,286,300
Discounted lease rentals	834,000			896,800
Rents received in advance	48,700			134,800
Deferred revenue	1,787,900			1,641,700
Deferred income taxes	3,574,200			3,549,900
Total current liabilities	10,328,200			20,513,200
Long-Term Liabilities:
Discounted lease rentals	382,700			177,900
Rents received in advance	111,800			117,700
Deferred revenue	1,128,200			953,000
Other liabilities	1,148,900			1,254,700
Deferred income taxes	2,864,700			2,594,300
Total long-term liabilities	5,636,300			5,097,600
Shareholders’ Equity:
Common stock, no par, 10,000,000 shares authorized, 5,135,961 and 4,996,459 shares issued and outstanding	2,420,300			—
Accumulated other comprehensive loss	(9,900		)	(4,000		)
Retained earnings	30,870,300			17,932,000
Total shareholders’ equity	33,280,700			17,928,000
	$	49,245,200		$	43,538,800

WINMARK CORPORATION

CONDENSED STATEMENTS OF OPERATIONS

(Unaudited)

	Quarter Ended						Nine Months Ended
	September 28, 2013			September 29, 2012			September 28, 2013			September 29, 2012
REVENUE:
Royalties	$	9,853,900		$	9,178,400		$	26,937,000		$	25,160,800
Leasing income	3,810,100			4,312,700			11,348,100			9,989,800
Merchandise sales	598,000			716,600			1,821,100			2,083,200
Franchise fees	340,000			411,000			1,144,200			966,000
Other	189,900			180,400			713,400			625,100
Total revenue	14,791,900			14,799,100			41,963,800			38,824,900
COST OF MERCHANDISE SOLD	569,200			684,400			1,734,700			1,982,200
LEASING EXPENSE	399,300			770,700			1,289,500			1,336,200
PROVISION FOR CREDIT LOSSES	(29,800		)	(1,700		)	(67,700		)	(69,600		)
SELLING, GENERAL AND ADMINISTRATIVE EXPENSES	5,311,900			4,882,200			16,728,900			15,239,900
Income from operations	8,541,300			8,463,500			22,278,400			20,336,200
LOSS FROM EQUITY INVESTMENTS	—			(372,300		)	—			(650,400		)
IMPAIRMENT OF INVESTMENT IN NOTES	—			(660,700		)	—			(660,700		)
INTEREST EXPENSE	(35,500		)	(110,200		)	(180,100		)	(302,300		)
INTEREST AND OTHER INCOME/(EXPENSE)	5,500			14,300			(4,800		)	50,600
Income before income taxes	8,511,300			7,334,600			22,093,500			18,773,400
PROVISION FOR INCOME TAXES	(3,259,800		)	(3,075,100		)	(8,447,700		)	(7,593,500		)
NET INCOME	$	5,251,500		$	4,259,500		$	13,645,800		$	11,179,900
EARNINGS PER SHARE — BASIC	$	1.03		$	.85		$	2.70		$	2.22
EARNINGS PER SHARE — DILUTED	$	1.00		$	.82		$	2.61		$	2.13
WEIGHTED AVERAGE SHARES OUTSTANDING — BASIC	5,116,872			5,013,822			5,046,156			5,041,023
WEIGHTED AVERAGE SHARES OUTSTANDING — DILUTED	5,263,311			5,222,719			5,222,196			5,257,057