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):  April 20, 2006

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)

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:

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

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

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

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

Item 2.02.Results of Operations and Financial Conditions

On April 20, 2006, the Company announced in a press release its results of operations and financial condition for the first quarter ended April 1, 2006.  A copy of the press release is attached as Exhibit 99.1 of this Current Report on Form 8-K and is incorporated by reference into this Item 2.02.

Item 9.01.Financial Statements, Pro Forma Financial Information and Exhibits.

(d)Exhibits:

99.1Press Release dated April 20, 2006

2

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: April 24, 2006	By	/s/ Catherine P. Heaven
		Catherine P. Heaven
		Associate General Counsel

3

EXHIBIT INDEX

to

Form 8-K

Winmark Corporation

Exhibit Number	Exhibit Description
99.1	Press Release dated April 20, 2006

4

EX-99.1

Exhibit 99.1

Contact:	John L. Morgan
	763-520-8500

FOR IMMEDIATE RELEASE

WINMARK CORPORATION ANNOUNCES

FIRST QUARTER RESULTS

Minneapolis, MN (April 20, 2006)  —  Winmark Corporation (Nasdaq: WINA) announced today net income for the quarter ended April 1, 2006 of $1,113,300 (or $.18 per share diluted) compared to net income of $699,900 (or $.11 per share diluted) in the first quarter of 2005.

John L. Morgan, Chairman and Chief Executive Officer, stated, “The first quarter was very good due to the performance of our franchisees and a $360,000 non-operating gain included in interest and other income.  Leasing continues to grow at acceptable levels, but the key to our first quarter was solid performance from our franchising businesses.”

Winmark Corporation provides financial services and develops franchises for retail stores that buy, sell, trade and consign used and new merchandise.  At April 1, 2006, the Company had 806 stores in operation and an additional 43 franchises awarded but not open.  Of the stores in operation, there were 395 Play It Again Sports®, 206 Once Upon A Child®, 164 Plato’s Closet® and 41 Music Go Round® stores.  In addition, at April 1, 2006, the Company had an equipment leasing portfolio equal to $9.1 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 growing our leasing and franchising businesses.  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)

	April 1, 2006		December 31, 2005
ASSETS
Current Assets:
Cash and cash equivalents	$	1,847,000	$	2,947,700
Receivables, less allowance for doubtful accounts of $46,500 and $188,700	2,243,500		1,836,300
Investment in direct finance leases	2,085,400		1,478,200
Income tax receivable	16,800		620,500
Inventories	93,300		67,000
Prepaid expenses	902,100		804,000
Deferred income taxes	776,800		776,800
Total current assets	7,964,900		8,530,500
Long-term investment in leasing operations	7,037,100		5,492,400
Long-term investments	11,000,000		11,000,000
Long-term receivables, net	86,900		94,300
Property and equipment, net	468,900		448,600
Other assets, net	607,500		607,500
Deferred income taxes	375,400		375,400
	$	27,540,700	$	26,548,700
LIABILITIES AND SHAREHOLDERS’ EQUITY
Current Liabilities:
Accounts payable	$	1,211,900	$	1,156,400
Accrued liabilities	1,319,900		1,435,900
Current discounted lease rentals	149,300		147,600
Rents received in advance	212,900		167,600
Current deferred revenue	907,700		829,100
Total current liabilities	3,801,700		3,736,600
Long-term discounted lease rentals	160,000		185,600
Long-term deferred revenue	389,000		339,600
Shareholder’s Equity:
Common stock, no par, 10,000,000 shares authorized, 6,043,037 and 6,049,037 shares issued and outstanding	3,630,300		3,840,500
Retained earnings	19,559,700		18,446,400
Total shareholders’ equity	23,190,000		22,286,900
	$	27,540,700	$	26,548,700

WINMARK CORPORATION

CONDENSED STATEMENTS OF OPERATIONS

(unaudited)

	Three Months Ended
	April 1, 2006			March 26, 2005
REVENUE:
Royalties	$	5,043,800		$	4,514,400
Merchandise sales	1,290,700			2,235,600
Franchise fees	215,000			190,000
Leasing income	258,000			60,900
Other	162,000			143,800
Total revenue	6,969,500			7,144,700
COST OF MERCHANDISE SOLD	1,239,100			1,920,000
SELLING, GENERAL AND ADMINISTRATIVE EXPENSES	4,321,400			4,045,400
Income from operations	1,409,000			1,179,300
LOSS FROM EQUITY INVESTMENTS	—			(94,100		)
GAIN ON SALE OF MARKETABLE SECURITIES	—			21,300
INTEREST AND OTHER INCOME	456,100			60,000
Income before income taxes	1,865,100			1,166,500
PROVISION FOR INCOME TAXES	(751,800		)	(466,600		)
NET INCOME	$	1,113,300		$	699,900
EARNINGS PER SHARE - BASIC	$	.18		$	.12
WEIGHTED AVERAGE SHARES OUTSTANDING - BASIC	6,030,371			5,964,547
EARNINGS PER SHARE - DILUTED	$	.18		$	.11
WEIGHTED AVERAGE SHARES OUTSTANDING - DILUTED	6,270,083			6,588,089