8-K

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 14, 2021

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 14, 2021, Winmark Corporation (the “Company”) announced in a press release its results of operations and financial condition for the first quarter ended March 27, 2021. 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 14, 2021, the Company announced in a press release its results of operations and financial condition for the first quarter ended March 27, 2021. A copy of the press release is attached as Exhibit 99.1 of this Current Report on Form 8-K.

On April 14, 2021, 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 $0.45 per share will be paid on June 1, 2021 to shareholders of record on the close of business on May 12, 2021. Future dividends will be subject to Board approval.  A copy of the press release is attached as Exhibit 99.2 of this Current Report on Form 8-K.

Item 8.01Other Events

On April 14, 2021, 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 $0.45 per share will be paid on June 1, 2021 to shareholders of record on the close of business on May 12, 2021.  Future dividends will be subject to Board approval.  A copy of the press release is attached as Exhibit 99.2 of this Current Report on Form 8-K.

Item 9.01Financial Statements and Exhibits

(d)Exhibits

c
99.1	First Quarter Results Press Release dated April 14, 2021
99.2	Quarterly Cash Dividend Press Release dated April 14, 2021

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 14, 2021	By:	/s/ Anthony D. Ishaug
	Anthony D. Ishaug
	Chief Financial Officer and Treasurer

EX-99.1

Exhibit 99.1

Contact:Brett D. Heffes

763/520-8500

FOR IMMEDIATE RELEASE

WINMARK CORPORATION ANNOUNCES

FIRST QUARTER RESULTS

Minneapolis, MN (April 14, 2021)  -  Winmark Corporation (Nasdaq: WINA) announced today net income for the quarter ended March 27, 2021 of $9,311,100 or $2.40 per share diluted compared to net income of $7,317,000 or $1.87 per share diluted in 2020.

“The resiliency of our business model combined with the improving execution of our franchisees led to exceptional first quarter results,” commented Brett D. Heffes, Chairman and Chief Executive Officer.

Winmark Corporation creates, supports and finances business. At March 27, 2021, there were 1,264 franchises in operation under the brands Plato’s Closet®, Once Upon A Child®, Play It Again Sports®, Style Encore® and Music Go Round®.  An additional 32 retail 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 27, 2021		December 26, 2020
ASSETS
Current Assets:
Cash and cash equivalents	$	7,959,900	$	6,659,000
Restricted cash		25,000		25,000
Receivables, net		2,096,900		1,581,900
Net investment in leases - current		8,156,900		8,687,500
Income tax receivable		—		221,200
Inventories		110,200		106,600
Prepaid expenses		839,900		995,200
Total current assets		19,188,800		18,276,400
Net investment in leases – long-term		2,706,900		4,573,600
Property and equipment, net		2,253,300		2,332,800
Operating lease right of use asset		3,172,100		3,226,300
Goodwill		607,500		607,500
Other assets		438,500		435,900
Deferred income taxes		2,330,600		1,890,700
	$	30,697,700	$	31,343,200
LIABILITIES AND SHAREHOLDERS’ EQUITY (DEFICIT)
Current Liabilities:
Notes payable, net	$	4,236,100	$	4,236,100
Accounts payable		1,399,300		1,769,600
Income tax payable		3,159,200		—
Accrued liabilities		2,223,500		2,624,000
Discounted lease rentals		959,200		1,096,600
Deferred revenue		1,647,700		1,657,400
Total current liabilities		13,625,000		11,383,700
Long-Term Liabilities:
Notes payable, net		16,573,600		17,632,700
Discounted lease rentals		382,200		574,000
Deferred revenue		6,975,700		7,050,900
Operating lease liabilities		5,176,900		5,307,400
Other liabilities		768,500		773,200
Total long-term liabilities		29,876,900		31,338,200
Shareholders’ Equity (Deficit):
Common stock, no par, 10,000,000 shares authorized, 3,700,723 and 3,756,028 shares issued and outstanding		—		9,281,800
Retained earnings (accumulated deficit)		(12,804,200)		(20,660,500)
Total shareholders’ equity (deficit)		(12,804,200)		(11,378,700)
	$	30,697,700	$	31,343,200

2

Winmark Corporation

CONDENSED STATEMENTS OF OPERATIONS

(Unaudited)

	Three Months Ended
	March 27, 2021		March 28, 2020
Revenue:
Royalties	$	14,048,800	$	11,172,500
Leasing income		3,237,000		5,871,200
Merchandise sales		592,400		754,100
Franchise fees		359,000		387,400
Other		421,700		414,800
Total revenue		18,658,900		18,600,000
Cost of merchandise sold		558,800		717,700
Leasing expense		389,500		1,416,200
Provision for credit losses		(48,700)		615,400
Selling, general and administrative expenses		5,102,300		5,748,900
Income from operations		12,657,000		10,101,800
Interest expense		(318,100)		(525,200)
Interest and other income		6,800		5,900
Income before income taxes		12,345,700		9,582,500
Provision for income taxes		(3,034,600)		(2,265,500)
Net income	$	9,311,100	$	7,317,000
Earnings per share - basic	$	2.49	$	1.97
Earnings per share - diluted	$	2.40	$	1.87
Weighted average shares outstanding - basic		3,736,676		3,711,597
Weighted average shares outstanding - diluted		3,874,227		3,911,751

3

EX-99.2

Exhibit 99.2

Contact:Brett D. Heffes

763/520-8500

FOR IMMEDIATE RELEASE

WINMARK CORPORATION

ANNOUNCES INCREASE IN CASH DIVIDEND

Minneapolis, MN (April 14, 2021)  -  Winmark Corporation (Nasdaq: WINA) announced today that its Board of Directors has approved an increase in its regular quarterly cash dividend to shareholders. The quarterly dividend of $0.45 per share represents an increase of $0.20 from its previous dividend rate.  The cash dividend will be paid June 1, 2021 to shareholders of record on the close of business on May 12, 2021.  Future dividends will be subject to Board approval.

Winmark Corporation creates, supports and finances business.  At March 27, 2021, there were 1,264 franchises in operation under the brands Plato’s Closet®, Once Upon A Child®, Play It Again Sports®, Style Encore® and Music Go Round®.  An additional 32 retail franchises have been awarded but are not open.  

XML

Document and Entity Information	Apr. 14, 2021
Document and Entity Information [Abstract]
Document Type	8-K
Document Period End Date	Apr. 14, 2021
Entity File Number	000-22012
Entity Registrant Name	Winmark Corporation
Entity Incorporation, State or Country Code	MN
Entity Tax Identification Number	41-1622691
Entity Address, Address Line One	605 Highway 169 North
Entity Address, Adress Line Two	Suite 400
Entity Address, City or Town	Minneapolis
Entity Address, State or Province	MN
Entity Address, Postal Zip Code	55441
City Area Code	763
Local Phone Number	520-8500
Written Communications	false
Soliciting Material	false
Pre-commencement Tender Offer	false
Pre-commencement Issuer Tender Offer	false
Title of 12(b) Security	Common Stock, no par value per share
Trading Symbol	WINA
Security Exchange Name	NASDAQ
Entity Emerging Growth Company	false
Entity Central Index Key	0000908315
Amendment Flag	false