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 16, 2014

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:

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 2.02Results of Operations and Financial Condition

On April 16, 2014, Winmark Corporation (the “Company”) announced in a press release its results of operations and financial condition for the first quarter ended March 29, 2014.  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 16, 2014, the Company announced in a press release its results of operations and financial condition for the first quarter ended March 29, 2014.  A copy of the press release is attached as Exhibit 99.1 of this Current Report on Form 8-K.

Item 9.01Financial Statements and Exhibits

(d)Exhibits

99.1 Press Release dated April 16, 2014

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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: April 16, 2014	By:	/s/ Anthony D. Ishaug
			Anthony D. Ishaug
			Chief Financial Officer and Treasurer

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EXHIBIT INDEX

to

Form 8-K

Winmark Corporation

Exhibit Number	Exhibit Description
99.1	Press Release dated April 16, 2014

4

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 16, 2014)  —  Winmark Corporation (Nasdaq: WINA) announced today net income for the quarter ended March 29, 2014 of $4,551,900 (or $.86 per share diluted) compared to net income of $4,057,500 (or $.78 per share diluted) in the first quarter of 2013.

Earnings growth during the first quarter was driven by an increase in customer activity within the Company’s lease portfolio as well as increased royalties in the franchising business.  John Morgan, Chairman and CEO, commented, “We experienced solid growth in our lease portfolio during the quarter, and when coupled with the continued growth in new signed franchise agreements positions us well for long-term success.”

Winmark Corporation creates, supports and finances business.  At March 29, 2014, there were 1,021 franchises in operation under the brands Plato’s Closet®, Once Upon A Child®, Play It Again Sports®, Music Go Round® and Style Encore®.  An additional 117 retail franchises have been awarded but are not open.  In addition, at March 29, 2014, the Company had a lease portfolio equal to $40.0 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.  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 29, 2014			December 28, 2013
ASSETS
Current Assets:
Cash and cash equivalents	$	2,411,800		$	10,642,600
Marketable securities	791,600			736,500
Receivables, net	1,047,800			1,205,500
Net investment in leases - current	17,174,700			17,239,900
Income tax receivable	—			166,500
Inventories	96,700			96,700
Prepaid expenses	581,700			587,300
Total current assets	22,104,300			30,675,000
Net investment in leases — long-term	22,841,900			20,301,400
Property and equipment, net	1,405,200			1,382,200
Other assets	677,500			677,500
	$	47,028,900		$	53,036,100
LIABILITIES AND SHAREHOLDERS’ EQUITY
Current Liabilities:
Line of credit	$	14,000,000		$	—
Accounts payable	1,616,700			2,441,400
Income tax payable	1,829,200			—
Accrued liabilities	2,126,400			1,233,100
Discounted lease rentals	378,900			424,900
Deferred revenue	2,288,800			2,199,900
Deferred income taxes	4,208,200			4,208,200
Total current liabilities	26,448,200			10,507,500
Long-Term Liabilities:
Discounted lease rentals	204,300			277,400
Deferred revenue	1,238,700			1,180,700
Other liabilities	1,480,500			1,489,000
Deferred income taxes	1,436,800			1,436,800
Total long-term liabilities	4,360,300			4,383,900
Shareholders’ Equity:
Common stock, no par, 10,000,000 shares authorized, 5,144,589 and 5,143,530 shares issued and outstanding	2,506,500			2,949,500
Accumulated other comprehensive loss	(13,900		)	(4,100		)
Retained earnings	13,727,800			35,199,300
Total shareholders’ equity	16,220,400			38,144,700
	$	47,028,900		$	53,036,100

WINMARK CORPORATION

CONDENSED STATEMENTS OF OPERATIONS

(unaudited)

	Three Months Ended
	March 29, 2014			March 30, 2013
REVENUE:
Royalties	$	8,810,000		$	8,474,900
Leasing income	4,375,600			3,407,800
Merchandise sales	788,000			665,700
Franchise fees	349,000			414,600
Other	230,000			185,400
Total revenue	14,552,600			13,148,400
COST OF MERCHANDISE SOLD	754,700			641,100
LEASING EXPENSE	306,600			279,700
PROVISION FOR CREDIT LOSSES	38,900			13,800
SELLING, GENERAL AND ADMINISTRATIVE EXPENSES	6,017,900			5,537,900
Income from operations	7,434,500			6,675,900
INTEREST EXPENSE	(62,100		)	(89,500		)
INTEREST AND OTHER INCOME (EXPENSE)	100			(10,200		)
Income before income taxes	7,372,500			6,576,200
PROVISION FOR INCOME TAXES	(2,820,600		)	(2,518,700		)
NET INCOME	$	4,551,900		$	4,057,500
EARNINGS PER SHARE - BASIC	$	.88		$	.81
EARNINGS PER SHARE - DILUTED	$	.86		$	.78
WEIGHTED AVERAGE SHARES OUTSTANDING - BASIC	5,148,519			4,997,322
WEIGHTED AVERAGE SHARES OUTSTANDING - DILUTED	5,307,946			5,202,696