Play-It-Again Parent Sees Q3 Income Slide 8.8%

Winmark Corporation reported net income for the third quarter ended September 24, 2005 of $926,100, or 14 cents per share diluted, down 8.8% compared to net income of $1,015,300, or 15 cents per share diluted, in the third quarter of 2004. Total revenues for the quarter were down 3.8% to $6.3 million from $6.5 million during last year's third quarter.

For the nine months ended September 24, 2005, net income was $2,168,600, or 34 cents per share diluted, compared to net income of $3,101,900, or 48 cents per share diluted, for the same period last year.

John L. Morgan, chairman and CEO, stated, “The third quarter saw our franchising business grow the number of franchisees and increase royalties over last year. The leasing business is still in the start-up stage and activity has been mostly limited to building infrastructure.”

Winmark Corporation develops franchises, provides business services and operates value-oriented retail concepts for stores that buy, sell, trade and consign used and new merchandise. At September 24, 2005, the company had 805 stores in operation and an additional 36 franchises awarded but not open. Of the stores in operation, there were 405 Play It Again Sports, 209 Once Upon A Child, 151 Plato's Closet and 40 Music Go Round stores.

                        WINMARK CORPORATION
                      CONDENSED STATEMENTS OF OPERATIONS
                                 (Unaudited)

                              Quarter Ended           Nine Months Ended
                         Sept. 24,    Sept. 25,    Sept. 24,     Sept. 25,
                           2005         2004         2005          2004
    REVENUE:
      Royalties         $4,230,300   $4,087,000  $12,953,400  $12,719,700
      Merchandise sales  1,446,100    1,996,600    5,393,700    6,914,100
      Franchise fees       330,000      300,900      745,000      693,600
      Other                282,700      151,400      705,500      432,700
        Total revenue    6,289,100    6,535,900   19,797,600   20,760,100

    COST OF MERCHANDISE
     SOLD                1,144,900    1,615,800    4,465,200    5,724,500

    SELLING, GENERAL AND
     ADMINISTRATIVE
     EXPENSES            3,645,700    3,237,900   11,678,100   10,002,900

        Income from
         operations      1,498,500    1,682,200    3,654,300    5,032,700

    LOSS FROM EQUITY
     INVESTMENTS            (5,500)     (40,700)    (188,800)    (123,100)

    GAIN ON SALE OF
     MARKETABLE SECURITIES       -            -       17,400      173,800

    INTEREST AND OTHER
     INCOME                 90,100       50,600      224,100      153,600

        Income before
         income taxes    1,583,100    1,692,100    3,707,000    5,237,000

    PROVISION FOR
     INCOME TAXES         (657,000)    (676,800)  (1,538,400)  (2,135,100)

    NET INCOME            $926,100   $1,015,300   $2,168,600   $3,101,900

    EARNINGS PER
     SHARE - BASIC            $.15         $.17         $.36         $.53

    WEIGHTED AVERAGE
     SHARES OUTSTANDING
     - BASIC             6,012,463    5,942,139    6,024,700    5,841,486

    EARNINGS PER SHARE
     - DILUTED                $.14         $.15         $.34         $.48