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):  October 16, 2008

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 October 16, 2008, Winmark Corporation (“Company”) announced in a press release its results of operations and financial condition for the third quarter ended September 27, 2008.  A copy of the press release is attached as Exhibit 99.1 of this Current Report on Form 8-K.

Item 7.01                Regulation FD Disclosure

On October 16, 2008, Winmark Corporation (“Company”) announced in a press release its results of operations and financial condition for the third quarter ended September 27, 2008.  A copy of the press release is attached as Exhibit 99.1 of this Current Report on Form 8-K.

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

(c)           Exhibits

99.1 Press Release dated October 16, 2008

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

	WINMARK CORPORATION
Date: October 17, 2008	By:	/s/ Catherine P. Heaven
		Catherine P. Heaven
		Vice President and General Counsel

3

EXHIBIT INDEX

to

Form 8-K

Winmark Corporation

Exhibit Number	Exhibit Description
99.1	Press Release dated October 16, 2008

4

EX-99.1

Exhibit 99.1

Contact:	John L. Morgan
	763/520-8500

FOR IMMEDIATE RELEASE

WINMARK CORPORATION ANNOUNCES

THIRD QUARTER RESULTS

Minneapolis, MN (October 16, 2008)  -  Winmark Corporation (Nasdaq; WINA) announced today net income for the quarter ended September 27, 2008 of $1,350,800, or $.24 per share diluted, compared to net income of $1,131,500, or $.20 per share diluted, in 2007.  For the nine months ended September 27, 2008, net income was $3,218,600, or $.58 per share diluted, compared to net income of $2,191,800, or $.39 per share diluted, for the same period last year.

John L. Morgan, Chairman and Chief Executive Officer, stated, “Our results were favorable due to the strength of our retail brands and the skill and hard work of our franchisees.  Our leasing business did not grow in this quarter and we do not expect fast growth in this tough economic environment.”

Winmark Corporation creates, supports and finances business.  At September 27, 2008, there were 866 franchises in operation under the brands Play It Again Sports®, Once Upon A Child®, Plato’s Closet® and Music Go Round® and there were 58 territories in operation under the Wirth Business Credit® brand.  An additional 40 retail franchises and 2 Wirth Business Credit® territories have been awarded but are not open.  In addition, at September 27, 2008, the Company had loans and leases equal to $47.8 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 27, 2008		December 29, 2007
ASSETS
Current Assets:
Cash and cash equivalents	$	2,901,400	$	1,253,000
Receivables, less allowance for doubtful accounts of $49,500 and $52,200	2,091,000		2,312,300
Net investment in leases – current	17,359,300		10,451,100
Income tax receivable	—		166,300
Inventories	106,000		145,000
Prepaid expenses	1,021,500		1,104,900
Deferred income taxes	208,200		208,200
Total current assets	23,687,400		15,640,800
Net investment in leases – long-term	28,433,500		31,435,400
Long-term investments	7,214,800		7,496,500
Long-term receivables, net	44,000		59,700
Property and equipment, net	595,500		667,400
Other assets	677,500		625,800
Deferred income taxes	1,021,200		1,021,200
	$	61,673,900	$	56,946,800
LIABILITIES AND SHAREHOLDERS’ EQUITY
Current Liabilities:
Current line of credit	$	3,774,800	$	7,553,600
Current renewable subordinated notes	7,992,600		3,535,900
Accounts payable	1,085,400		1,414,100
Income tax payable	62,100		—
Accrued liabilities	2,730,100		2,501,900
Current discounted lease rentals	962,300		27,400
Current rents received in advance	99,200		73,900
Current deferred revenue	962,600		1,132,300
Total current liabilities	17,669,100		16,239,100
Long-term line of credit	10,241,900		8,685,000
Long-term renewable subordinated notes	12,924,300		17,486,000
Long-term discounted lease rentals	1,474,500		—
Long-term rents received in advance	1,732,500		1,312,000
Long-term deferred revenue	643,200		556,000
Shareholders’ Equity:
Common stock, no par, 10,000,000 shares authorized, 5,512,453 and 5,417,775 shares issued and outstanding	1,407,100		305,900
Retained earnings	15,581,300		12,362,800
Total shareholders’ equity	16,988,400		12,668,700
	$	61,673,900	$	56,946,800

WINMARK CORPORATION

CONDENSED STATEMENTS OF OPERATIONS

(Unaudited)

	Quarter Ended						Nine Months Ended
	September 27, 2008			September 29, 2007			September 27, 2008			September 29, 2007
REVENUE:
Royalties	$	5,740,600		$	5,208,700		$	16,376,000		$	15,208,100
Leasing income	2,060,400			1,173,200			5,920,000			2,944,700
Merchandise sales	777,600			797,600			2,685,400			3,250,300
Franchise fees	431,900			584,100			1,345,500			1,301,500
Other	117,700			188,200			396,000			436,700
Total revenue	9,128,200			7,951,800			26,722,900			23,141,300
COST OF MERCHANDISE SOLD	730,800			764,300			2,565,400			3,119,500
LEASING EXPENSE	471,000			268,700			1,420,000			601,900
PROVISION FOR CREDIT LOSSES	571,800			142,100			1,226,100			421,800
SELLING, GENERAL AND ADMINISTRATIVE EXPENSES	4,744,100			4,587,500			15,068,400			14,390,400
Income from operations	2,610,500			2,189,200			6,443,000			4,607,700
LOSS FROM EQUITY INVESTMENTS	(145,200		)	(92,400		)	(281,700		)	(344,600		)
INTEREST EXPENSE	(309,600		)	(381,300		)	(998,200		)	(1,101,900		)
INTEREST AND OTHER INCOME	114,500			122,500			246,300			423,300
Income before income taxes	2,270,200			1,838,000			5,409,400			3,584,500
PROVISION FOR INCOME TAXES	(919,400		)	(706,500		)	(2,190,800		)	(1,392,700		)
NET INCOME	$	1,350,800		$	1,131,500		$	3,218,600		$	2,191,800
EARNINGS PER SHARE – BASIC	$	.24		$	.21		$	.58		$	.40
EARNINGS PER SHARE – DILUTED	$	.24		$	.20		$	.58		$	.39
WEIGHTED AVERAGE SHARES OUTSTANDING – BASIC	5,522,188			5,437,805			5,519,265			5,490,077
WEIGHTED AVERAGE SHARES OUTSTANDING – DILUTED	5,548,461			5,555,770			5,548,473			5,610,951