8-K

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): February 12, 2003

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)

4200 Dahlberg Drive, Suite 100 Golden Valley, MN 55422-4837

            (Address of Principal Executive Offices)             (Zip Code)

(612) 520-8500

(Registrant’s Telephone Number, Including Area Code)

Not Applicable

(Former Name or Former Address, if Changed Since Last Report)

Item 5.    Other Events and Regulation FD Disclosure.

On February 12, 2003, the Company announced in a press release its fourth quarter and fiscal year 2002 financial results. A copy of the press release is attached as Exhibit 99.1 of this Current Report on Form 8-K.

Item 7.    Financial Statements and Exhibits.

(c) Exhibits:

99.1 Press Release dated February 12, 2003.

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.

	WINMARK CORPORATION
Date: February 13, 2003	By:	/s/    JOHN L. MORGAN
		Chairman and CEO

EXHIBIT INDEX

to

February 13, 2003 Form 8-K

Winmark Corporation

Exhibit Number	Exhibit Description
99.1	Press Release dated February 12, 2003

EX-99.1

Contact: John L. Morgan

763-520-8500

FOR IMMEDIATE RELEASE

WINMARK CORPORATION ANNOUNCES YEAR END RESULTS

Minneapolis, MN (February 12, 2003) — Winmark Corporation announced today net income for the year ended December 28, 2002 of $3,828,900, or $.63 per share diluted, compared to net income of $3,197,500, or $.55 per share, in 2001. The fourth quarter 2002 net income was $970,300, or $.16 per share diluted, compared to net income of $592,000, or $.10 per share diluted, for the same period last year. Revenues for the year were $33,425,100, down from $36,086,900 in 2001.

John L. Morgan, Chairman and Chief Executive Officer, stated, “Revenues were lower due to Franchisees buying direct from suppliers instead of through the Company. Our Company had a good year in improving our franchise systems and making a significant investment in Archiver’s retail stores. We are satisfied with 2002 and look forward to 2003.”

Winmark Corporation develops franchises and operates value-oriented retail brands for stores that buy, sell, trade and consign used and new merchandise. At December 28, 2002, there were 828 franchise and retail stores in operation under the Company’s brands and an additional 22 franchises awarded but not open. Of the stores in operation, there were 477 Play It Again Sports^®, 221 Once Upon A Child^®, 53 Music Go Round^® and 77 Plato’s Closet^® stores.

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 the strength of the Company’s operating position in the future and future results from operations. 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 results 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, 2002			December 29, 2001
ASSETS
Current Assets:
Cash and cash equivalents	$	4,730,000		$	3,096,500
Short-term investments		1,874,800			114,000
Receivables, less allowance for doubtful accounts of $357,700 and $570,900		2,612,100			3,313,900
Inventories		720,900			1,084,100
Prepaid expenses and other		583,900			667,800
Deferred income taxes		1,139,800			1,598,000
Total current assets		11,661,500			9,874,300
Long-term investments		3,498,800			777,000
Long-term receivables, net		130,300			119,000
Property and equipment, net		349,900			738,100
Other assets, net		544,300			780,600
	$	16,184,800		$	12,289,000
LIABILITIES AND SHAREHOLDERS’ EQUITY
Current Liabilities:
Accounts payable	$	1,643,000		$	1,794,700
Accrued liabilities		1,975,200			2,885,500
Current maturities of long-term debt		—			41,500
Current deferred revenue		575,700			515,600
Total current liabilities		4,193,900			5,237,300
Long-term debt, less current maturities		—			158,000
Deferred gain on building sale		90,200			273,300
Shareholder’s Equity:
Common stock, no par, 10,000,000 shares authorized, 5,757,197 and 5,383,354 shares issued and outstanding		3,723,300			1,376,000
Common stock warrants		—			822,000
Other comprehensive income (loss)		(73,900	)		—
Retained earnings		8,251,300			4,422,400
Total shareholders’ equity		11,900,700			6,620,400
	$	16,184,800		$	12,289,000

WINMARK CORPORATION

CONDENSED STATEMENTS OF OPERATIONS

(unaudited)

	Quarter Ended						Fiscal Year Ended
	December 28, 2002			December 29, 2001			December 28, 2002			December 29, 2001
REVENUE:
Merchandise sales	$	3,359,300		$	4,412,600		$	15,466,100		$	19,038,500
Royalties		4,025,900			3,821,600			16,447,900			15,622,900
Franchise fees		174,000			204,700			769,000			722,700
Other		134,600			119,400			742,100			702,800
Total revenue		7,693,800			8,558,300			33,425,100			36,086,900
COST OF MERCHANDISE SOLD		2,578,900			3,640,200			12,355,000			15,850,500
SELLING, GENERAL AND ADMINISTRATIVE EXPENSES		3,380,000			3,968,500			14,746,100			15,365,900
GAIN ON SALE OF BUSINESS		—			—			—			1,112,300
Income from operations		1,734,900			949,600			6,324,000			5,982,800
INTEREST INCOME		105,900			42,600			308,600			283,700
INTEREST EXPENSE		(223,600	)		(18,500	)		(264,200	)		(1,007,400	)
Income before income taxes		1,617,200			973,700			6,368,400			5,259,100
PROVISION FOR INCOME TAXES		646,900			381,700			2,539,500			2,061,600
NET INCOME	$	970,300		$	592,000		$	3,828,900		$	3,197,500
BASIC EARNINGS PER SHARE	$	.17		$	.11		$	.69		$	.59
BASIC WEIGHTED AVERAGE SHARES OUTSTANDING		5,743,997			5,383,354			5,575,186			5,388,574
DILUTED EARNINGS PER SHARE	$	.16		$	.10		$	.63		$	.55
DILUTED WEIGHTED AVERAGE SHARES OUTSTANDING		6,232,588			6,079,649			6,079,400			5,792,041