Winmark Corporation, parent company to Play It Again Sports, reported a 41.5% jump in net income for the third quarter to $1.2 milliion, or 21 cents per share diluted, from $838,200, or 14 cents per share diluted last year. Net sales increased 9.8% to $7.9 million from $7.2 million in the year-ago quarter.


For the nine months ended September 29, 2007, net income was $2.4 million, or 43 cents per share diluted, compared to net income of $2.6 million, or 43 cents per share diluted, for the same period last year. 
 
John L. Morgan, Chairman and Chief Executive Officer, stated, “Net income for the third quarter increased over last year and the second quarter of this year due to the growth in our leased assets in both Wirth Business Credit and Winmark Capital. Our franchise brands continue to grow both in number of stores and royalties.”

 
                         WINMARK CORPORATION

                      CONDENSED STATEMENTS OF OPERATIONS

                                 (Unaudited)


                           Quarter Ended               Nine Months Ended

                    September 29,  September 30,  September 29,  September 30,

                        2007           2006           2007           2006

    REVENUE:

     Royalties       $5,208,700     $4,800,000     $15,208,100    $14,320,500

     Merchandise

      sales             797,600      1,452,600       3,250,300      3,533,300

     Leasing income   1,173,200        523,100       2,944,700      1,209,800

     Franchise fees     584,100        305,000       1,301,500        980,700

     Other              188,200        158,900         436,700        441,900

        Total

         revenue      7,951,800      7,239,600      23,141,300     20,486,200

    COST OF

     MERCHANDISE

     SOLD               764,300      1,381,900       3,119,500      3,378,600

    LEASING EXPENSE     268,700         84,500         601,900        131,200

    SELLING, GENERAL

     AND ADMINISTRATIVE

     EXPENSES         4,729,600      4,206,300      14,812,200     12,934,600

        Income from

         operations   2,189,200      1,566,900       4,607,700      4,041,800

    INTEREST EXPENSE   (381,300)      (307,900)     (1,101,900)      (429,300)

    INTEREST AND

     OTHER INCOME       122,500        145,300         423,300        746,600

        Income before

         income

         taxes        1,930,400      1,404,300       3,929,100      4,359,100

    PROVISION FOR

     INCOME TAXES      (744,200)      (566,100)     (1,533,500)    (1,757,200)

    NET INCOME       $1,186,200       $838,200      $2,395,600     $2,601,900

    EARNINGS PER

     SHARE – BASIC         $.22           $.15            $.44           $.45

    EARNINGS PER

     SHARE – DILUTED       $.21           $.14            $.43           $.43

    WEIGHTED AVERAGE

     SHARES OUTSTANDING

     – BASIC          5,437,805      5,632,042       5,490,077      5,841,047

    WEIGHTED AVERAGE

     SHARES OUTSTANDING