Winmark (WINA) investor relations material

Executive summary

• Q3 revenue was $27.9M vs. $22.6M; operating income was $15.8M vs. $14.9M, and net income was $11.8M vs. $11.1M.

• Q3 diluted EPS was $3.21 vs. $3.02; 9M net income was $31.5M vs. $31.7M and diluted EPS was $8.51 vs. $8.61.

• Royalties rose 3.8% in Q3 and 6.5% in 9M, primarily on higher franchise retail sales.

• 1,398 stores operated across five resale brands at quarter-end; all 77 franchise agreements available for renewal during 9M were renewed.

Financial highlights

• Q3 revenue rose to $27.9M from $22.6M, including $3.8M each of North American advertising fund revenue and expense introduced during the quarter.

• 9M revenue was $70.7M vs. $65.0M; operating income was $41.8M vs. $41.6M, and net income was $31.5M vs. $31.7M.

• Q3 income before taxes was $15.4M vs. $14.6M; 9M income before taxes was $40.5M in both periods.

• 9M diluted EPS was $8.51 vs. $8.61; basic EPS was $8.79 vs. $8.94.

• 9M cash from operations was $35.5M vs. $36.4M; period-end cash, cash equivalents and restricted cash totaled $28.1M.

Outlook and guidance

• Cash on hand, business cash generation and the credit line are expected to fund planned operations through 2027; debt service capacity depends on future performance and access to refinancing or other funding if needed.

• North American Advertising Funds for Once Upon A Child and Play It Again Sports are set to launch campaigns in 2027.

• Marketing initiatives aim to expand brand awareness; a point-of-sale pilot was delivered at a franchised location.