WINMARK CORP — Prospectus 2010

Feb 24, 2010

424B3 1 a10-4603_1424b3.htm 424B3

Filed Pursuant to Rule 424(b)(3)

File Number 333-133393

PROSPECTUS SUPPLEMENT NO. 4

*to Prospectus, as amended and restated,*

*declared effective on March 27, 2009*

*(Registration No. 333-133393)*

*WINMARK CORPORATION*

This Prospectus Supplement No.4 supplements our Prospectus, as amended and restated, declared effective March 27, 2009 (as previously supplemented by the prospectus supplements dated April 22, 2009, July 23, 2009, and August 12, 2009, collectively, the “Prospectus”).

You should read this Prospectus Supplement No. 4 together with the Prospectus.

This Prospectus Supplement No. 4 includes the attached Current Report on Form 8-K as filed with the Securities and Exchange Commission on February 24, 2010.

The information contained herein, including the information attached hereto, supplements and supersedes, in part, the information contained in the Prospectus. This Prospectus Supplement No. 4 should be read in conjunction with the Prospectus, and is qualified by reference to the Prospectus except to the extent that the information in this Prospectus Supplement No. 4 supersedes the information contained in the Prospectus.

NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES COMMISSION HAS APPROVED OR DISAPPROVED OF THESE SECURITIES OR PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS SUPPLEMENT. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.

The date of this Prospectus Supplement No. 4 is February 24, 2010.

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*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): February 24, 2010

*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:

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

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

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

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

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Item 2.02 Results of Operations and Financial Conditions

On February 24, 2010, Winmark Corporation (“Company”) announced in a press release its results of operations and financial condition for the year ended December 26, 2009. 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 February 24, 2010, Winmark Corporation (“Company”) announced in a press release its results of operations and financial condition for the year ended December 26, 2009. 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 and Exhibits.

(d) Exhibits

99.1 Press Release dated February 24, 2010

2

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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

/s/ Anthony D. Ishaug
Anthony D. Ishaug
Chief Financial Officer

3

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EXHIBIT INDEX

to

Form 8-K

Winmark Corporation

Exhibit Number	Exhibit Description
99.1	Press Release dated
February 24, 2010

4

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*Exhibit 99.1*

Contact: John L. Morgan

763/520-8500

FOR IMMEDIATE RELEASE

*WINMARK CORPORATION ANNOUNCES YEAR END RESULTS*

Minneapolis, MN (February 24, 2010) – Winmark Corporation (Nasdaq: WINA) announced today net income for the year ended December 26, 2009 of $5,849,000 or $1.10 per share diluted, compared to net income of $1,139,400 or $.21 per share diluted, in 2008. The fourth quarter 2009 net income was $1,460,500, or $.28 per share diluted, compared to a net loss of ($2,079,200), or ($.38) per share diluted, for the same period last year. 2008 results were impacted by a $2.8 million after-tax earnings charge, or $.52 per share for the fourth quarter, related to the impairment in Winmark’s investment in Tomsten, Inc. (d/b/a Archiver’s). Revenues for the year ended December 26, 2009 were $37,296,000, up from $35,423,600 in 2008.

John Morgan, Chairman and Chief Executive Officer, stated “ We finished 2009 with strong performance from our franchising business and improved profitability from our leasing activities. We are satisfied with our results in 2009 and feel we are well positioned for 2010.”

Winmark Corporation creates, supports and finances business. At December 26, 2009, there were 877 franchises in operation under the brands Play It Again Sports®, Once Upon A Child®, Plato’s Closet®, Music Go Round® and there were 37 territories in operation under the Wirth Business Credit® brand. An additional 46 retail franchises have been awarded but are not open. In addition, at December 26, 2009, the Company had loans and leases equal to $39.0 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 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 .

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*WINMARK CORPORATION*

*CONDENSED BALANCE SHEETS*

	December 26, 2009 (unaudited)	December 27,2008 (audited)
ASSETS
Current
Assets:
Cash
and cash equivalents	$ 9,490,800	$ 2,140,000
Marketable
securities	1,274,000	438,300
Current
investments	2,000,000	500,000
Receivables,
less allowance for doubtful accounts of $35,700 and $52,700	1,761,100	2,064,100
Net
investment in leases - current	17,575,900	17,379,700
Income
tax receivable	—	792,200
Inventories	111,400	141,500
Prepaid
expenses	398,800	1,018,800
Deferred
income taxes	—	216,900
Total
current assets	32,612,000	24,691,500
Net
investment in leases - long term	19,423,700	28,035,300
Long-term
investments	2,232,900	3,833,300
Long-term
notes receivables, net	14,900	39,200
Property
and equipment, net	1,843,500	512,200
Other
assets	677,500	677,500
Deferred
income taxes	—	320,800
	$ 56,804,500	$ 58,109,800
LIABILITIES AND SHAREHOLDERS’ EQUITY
Current
Liabilities:
Current
line of credit	$ 3,983,100	$ 4,313,200
Current
renewable unsecured subordinated notes	9,166,900	8,052,400
Accounts
payable	1,415,200	1,108,200
Income
tax payable	183,500	—
Accrued
liabilities	1,794,100	2,905,400
Current
discounted lease rentals	972,600	1,012,900
Current
rents received in advance	294,400	141,600
Current
deferred revenue	1,188,800	993,600
Deferred
income taxes	1,057,700	—
Total
current liabilities	20,056,300	18,527,300
Long-term
line of credit	5,298,900	9,276,300
Long-term
renewable unsecured subordinated notes	12,058,700	12,788,700
Long-term
discounted lease rentals	507,600	1,298,500
Long-term
rents received in advance	1,332,000	1,696,400
Long-term
deferred revenue	709,500	631,400
Other
long-term liabilities	1,298,400	—
Deferred
income taxes	214,400	—
Shareholders’
Equity:
Common
stock, no par, 10,000,000 shares authorized, 5,125,025 and 5,433,610 shares
issued and outstanding	—	427,500
Other
comprehensive income (loss)	9,600	(38,500	)
Retained
earnings	15,319,100	13,502,200
Total
shareholders’ equity	15,328,700	13,891,200
	$ 56,804,500	$ 58,109,800

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*WINMARK CORPORATION*

*CONDENSED STATEMENTS OF OPERATIONS*

	Quarter Ended — December 26, 2009 (unaudited)		December 27, 2008 (unaudited)		Fiscal Year Ended — December 26, 2009 (unaudited)		December 27, 2008 (audited)
REVENUE:
Royalties	$ 5,969,600		$ 5,428,200		$ 23,616,200		$ 21,804,200
Leasing
income	2,420,500		2,172,800		9,536,900		8,092,800
Merchandise
sales	488,200		582,700		2,386,700		3,268,100
Franchise
fees	268,300		359,000		1,072,900		1,704,500
Other	236,500		158,000		683,300		554,000
Total
revenue	9,383,100		8,700,700		37,296,000		35,423,600
COST
OF MERCHANDISE SOLD	473,500		555,300		2,290,200		3,120,700
LEASING
EXPENSE	544,900		461,800		2,288,200		1,881,800
PROVISION
FOR CREDIT LOSSES	918,000		1,343,700		2,795,500		2,569,800
SELLING,
GENERAL AND ADMINISTRATIVE EXPENSES	4,761,800		4,691,800		19,141,700		19,760,200
Income
from operations	2,684,900		1,648,100		10,780,400		8,091,100
LOSS
FROM EQUITY INVESTMENTS	(39,100	)	(2,881,500	)	(100,500	)	(3,163,200	)
INTEREST
EXPENSE	(299,200	)	(306,800	)	(1,309,000	)	(1,305,000	)
INTEREST
AND OTHER INCOME (LOSS)	107,900		(21,700	)	459,300		224,600
Income
(loss) before income taxes	2,454,500		(1,561,900	)	9,830,200		3,847,500
PROVISION
FOR INCOME TAXES	(994,000	)	(517,300	)	(3,981,200	)	(2,708,100	)
NET
INCOME (LOSS)	$ 1,460,500		$ (2,079,200	)	$ 5,849,000		$ 1,139,400
EARNINGS
(LOSS) PER SHARE - BASIC	$ .28		$ (.38	)	$ 1.10		$ .21
EARNINGS
(LOSS) PER SHARE - DILUTED	$ .28		$ (.38	)	$ 1.10		$ .21
WEIGHTED
AVERAGE SHARES OUTSTANDING - BASIC	5,205,082		5,461,011		5,303,177		5,504,705
WEIGHTED
AVERAGE SHARES OUTSTANDING - DILUTED	5,278,875		5,461,011		5,337,668		5,531,216

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