Play it Again Sports Parent Sees Q3 Net Dip on Lower Revenues

Winmark Corporation, parent company to Play it Again Sports, reported net income for the third quarter ended September 25, 2004 of $1.0 million, or 15 cents per share diluted, compared to net income of $1.1 million, or 17 cents per share diluted, in the third quarter of 2003.

For the nine months ended September 25, 2004, net income was $3.1 million, or 48 cents per share diluted, compared to net income of $3.0 million, or 48 cents per share diluted, for the same period last year.

John L. Morgan, Chairman and Chief Executive Officer, stated, “Our third quarter saw an increase in revenues from royalties, as our franchisee partners continue to improve despite an unpredictable retail environment.” Mr. Morgan also added, “We continue to build our infrastructure in our small ticket and middle-market leasing businesses.”

                           WINMARK CORPORATION
                    CONDENSED STATEMENTS OF OPERATIONS
                               (Unaudited)

                           Quarter Ended             Nine Months Ended
                    September 25, September 27, September 25, September 27,
                         2004          2003          2004          2003
  REVENUE:
    Royalties         $4,087,000    $3,946,200   $12,719,700   $12,116,800
    Merchandise sales  1,996,600     3,570,400     6,914,100    10,601,700
    Franchise fees       300,900       300,300       693,600       570,300
    Other                151,400       150,900       432,700       461,700
        Total revenue  6,535,900     7,967,800    20,760,100    23,750,500

  COST OF MERCHANDISE
   SOLD                1,615,800     2,799,000     5,724,500     8,447,800

  SELLING, GENERAL AND
   ADMINISTRATIVE
   EXPENSES            3,237,900     3,402,800    10,002,900    10,756,100

        Income from
         operations    1,682,200     1,766,000     5,032,700     4,546,600

  LOSS FROM EQUITY
   INVESTMENT            (40,700)      (64,100)     (123,100)      (64,100)

  GAIN (LOSS) ON SALE OF
   MARKETABLE SECURITIES       -        38,000       173,800       153,300

  INTEREST AND OTHER
   INCOME                 50,600        70,100       153,600       217,800

        Income before
         income
         taxes         1,692,100     1,810,000     5,237,000     4,853,600

  PROVISION FOR INCOME
   TAXES                (676,800)     (705,900)   (2,135,100)   (1,870,900)

  NET INCOME          $1,015,300    $1,104,100    $3,101,900    $2,982,700

  EARNINGS PER
   SHARE - BASIC            $.17          $.20          $.53          $.53