Winmark(WINA) - 2025 Q2 - Quarterly Results

Executive Summary & Company Overview Second Quarter 2025 Financial Highlights Winmark Corporation announced an increase in net income and diluted earnings per share for both the second quarter and the first six months of 2025 compared to the prior year periods Net Income and Diluted EPS Performance | Metric | Period | 2025 | 2024 | YoY Change | | :----------------------- | :---------------- | :----------- | :----------- | :----------- | | Net Income | Q2 Ended June 28/29 | $10,601,200 | $10,431,400 | +1.63% | | Diluted EPS | Q2 Ended June 28/29 | $2.89 | $2.85 | +1.40% | | Net Income | Six Months Ended June 28/29 | $20,557,600 | $19,250,400 | +6.79% | | Diluted EPS | Six Months Ended June 28/29 | $5.60 | $5.26 | +6.46% | Business Overview and Strategic Focus Winmark, a nationally recognized franchisor in the resale industry, reported increased sales performance across its brands and is making significant investments to enhance its market leadership - Sales performance for Winmark's franchise partners across all brands increased during the quarter[3] - Winmark is making significant investments in operations, technology, marketing, and innovation to enhance its leadership position in the resale industry[3] - As of June 28, 2025, Winmark had 1,371 franchises in operation, over 2,800 available territories, and an additional 77 awarded franchises not yet open[3] Condensed Financial Statements Condensed Balance Sheets Winmark's balance sheet as of June 28, 2025, shows a substantial increase in cash and total current assets, alongside a significant reduction in the shareholders' deficit, compared to December 28, 2024 Selected Balance Sheet Items | Item | June 28, 2025 | December 28, 2024 | Change | | :-------------------------- | :-------------- | :---------------- | :------- | | Cash and cash equivalents | $28,765,200 | $12,189,800 | +136.0% | | Total current assets | $32,199,600 | $15,365,600 | +109.6% | | Total assets | $43,172,700 | $26,844,500 | +60.8% | | Total current liabilities | $7,007,200 | $5,087,900 | +37.7% | | Total long-term liabilities | $73,005,400 | $72,802,700 | +0.28% | | Total shareholders' equity (deficit) | $(36,839,900) | $(51,046,100) | +27.8% (reduction in deficit) | Condensed Statements of Operations For the three and six months ended June 28, 2025, Winmark reported an increase in total revenue, primarily driven by royalties, leading to improved income from operations and net income Revenue Breakdown (Three Months Ended) | Revenue Type | June 28, 2025 | June 29, 2024 | YoY Change | | :---------------- | :-------------- | :-------------- | :----------- | | Royalties | $18,662,100 | $17,774,500 | +4.99% | | Leasing income | $46,600 | $524,400 | -91.13% | | Merchandise sales | $803,600 | $925,500 | -13.17% | | Franchise fees | $338,400 | $366,900 | -7.76% | | Other | $566,100 | $529,200 | +6.97% | | Total revenue | $20,416,800 | $20,120,500 | +1.47% | Revenue Breakdown (Six Months Ended) | Revenue Type | June 28, 2025 | June 29, 2024 | YoY Change | | :---------------- | :-------------- | :-------------- | :----------- | | Royalties | $36,436,700 | $35,043,200 | +3.98% | | Leasing income | $2,354,500 | $1,361,200 | +73.0% | | Merchandise sales | $1,744,900 | $2,036,000 | -14.39% | | Franchise fees | $670,400 | $731,500 | -8.35% | | Other | $1,129,900 | $1,058,300 | +6.76% | | Total revenue | $42,336,400 | $40,230,200 | +5.24% | Profitability (Six Months Ended) | Metric | June 28, 2025 | June 29, 2024 | YoY Change | | :----------------------- | :-------------- | :-------------- | :----------- | | Income from operations | $26,657,600 | $25,235,800 | +5.63% | | Net income | $20,557,600 | $19,250,400 | +6.79% | | Diluted EPS | $5.60 | $5.26 | +6.46% | Condensed Statements of Cash Flows For the six months ended June 28, 2025, Winmark experienced an increase in net cash provided by operating activities, while cash used in financing activities also rose due to common stock repurchases and higher dividend payments Cash Flow Activities (Six Months Ended) | Activity | June 28, 2025 | June 29, 2024 | YoY Change | | :----------------------------------- | :-------------- | :-------------- | :----------- | | Net cash provided by operating activities | $24,123,300 | $21,586,000 | +11.75% | | Net cash used for investing activities | $(105,900) | $(190,600) | -44.44% (less cash used) | | Net cash used for financing activities | $(7,417,000) | $(5,384,500) | +37.74% (more cash used) | | Net increase in cash, cash equivalents and restricted cash | $16,600,400 | $16,010,900 | +3.68% | - Key financing activities for the six months ended June 28, 2025, included $2,418,700 in common stock repurchases (compared to none in 2024) and $6,584,600 in dividends paid (up from $5,963,700 in 2024)[13]