PLay it Again Parent Sees Q2 Net Slip on Lower Revenues

Winmark Corporation reported that net income for the second quarter ended June 25, 2005 was $542,600, or 8 cents per share diluted, compared to net income of $726,300, or 11 cents per share diluted, in 2004.

For the six months ended June 25, 2005, net income was $1,242,500, or 19 cents per share diluted, compared to net income of $2,086,600, or 32 cents per share diluted, for the same period last year.

John L. Morgan, Chairman and Chief Executive Officer, stated, “Earnings for the quarter were lower, compared to last year, due to the continued infrastructure expense of our leasing business. Our franchise business had a good quarter with a modest increase in the store level performance of our franchisees.”

                          Winmark Corporation
                    CONDENSED STATEMENTS OF OPERATIONS
                               (Unaudited)


                           Quarter Ended             Six Months Ended
                   June 25, 2005 June 26, 2004 June 25, 2005 June 26, 2004
  REVENUE:
    Royalties        $4,208,700   $4,002,800    $8,723,100   $8,632,700
    Merchandise sales 1,712,000    2,313,500     3,947,600    4,917,500
    Franchise fees      225,000      200,100       415,000      392,700
    Other               218,100      144,100       422,800      281,300
      Total revenue   6,363,800    6,660,500    13,508,500   14,224,200

  COST OF MERCHANDISE
   SOLD               1,400,300    1,956,300     3,320,300    4,108,700

  SELLING, GENERAL AND
   ADMINISTRATIVE
   EXPENSES           3,987,000    3,446,700     8,032,400    6,765,000

      Income from
       operations       976,500    1,257,500     2,155,800    3,350,500

  LOSS FROM EQUITY
   INVESTMENTS          (89,200)     (58,100)     (183,300)     (82,400)

  GAIN (LOSS) ON SALE
   OF INVESTMENTS       (14,800)     (15,400)        6,500      173,800

  INTEREST AND OTHER
   INCOME                84,900       26,500       144,900      103,000

      Income before
       income taxes     957,400    1,210,500     2,123,900    3,544,900

  PROVISION FOR INCOME
   TAXES               (414,800)    (484,200)     (881,400)  (1,458,300)

  NET INCOME           $542,600     $726,300    $1,242,500   $2,086,600

  EARNINGS PER SHARE
   - BASIC                 $.09         $.12          $.21         $.36

  WEIGHTED AVERAGE
   SHARES OUTSTANDING
   - BASIC            6,097,003    5,873,719     6,030,909    5,789,463

  EARNINGS PER SHARE
   - DILUTED               $.08         $.11          $.19         $.32