Wilhelmina International, Inc. Reports Results for Second Quarter 2023

Second Quarter Financial Results

 
(in thousands)
Q2 23

Q2 22
YOY
Change
Q2 23
            YTD
Q2 22
YTD
YOY
Change
Total Revenues$4,493 $4,699(4.4%)$8,977$9,247(2.9%)
Operating Income  149  1,040(85.7%) 378 1,914(80.3%)
Income Before Provision for Taxes 88  1,148(92.3%) 298 2,013(85.2%)
Net (Loss) Income  (14) 921(101.5%) 145 1,660(91.3%)
Gross Billings* 17,541  17,604(0.4%) 35,128 34,2492.6%
EBITDA*  144  1,197(88.0%) 406 2,124(80.9%)
Adjusted EBITDA* 230  1,142(79.9%) 534 2,130(74.9%)
Pre-Corporate EBITDA* 476  1,364(65.1%) 1.024 2,606(60.7%)
*Non-GAAP measures referenced are detailed in the disclosures at the end of this release.

DALLAS, Aug. 11, 2023 (GLOBE NEWSWIRE) -- Wilhelmina International, Inc. (Nasdaq:WHLM) ("Wilhelmina" or the "Company") today reported revenues of $4.5 million and net loss of $14 thousand for the three months ended June 30, 2023, compared to revenues of $4.7 million and net income of $0.9 million for the three months ended June 30, 2022. For the six months ended June 30, 2023, Wilhelmina reported revenues of $9.0 million and net income of $0.1 million compared to revenue of $9.2 million and net income of $1.7 million for the six months ended June 30, 2022.   Decreased revenues in 2023 were primarily due to decreased commissions on bookings in the Company’s core modeling divisions.

Financial Results

Net loss for the three months ended June 30, 2023 was $14 thousand or $0.00 per fully diluted share, compared to net income of $0.9 million, or $0.18 per fully diluted share, for the three months ended June 30, 2022. Net income for the six months ended June 30, 2023 was $0.1 million, or $0.03 per fully diluted share, compared to $1.7 million, or $0.32 per fully diluted share, for the six months ended June 30, 2022.

Pre-Corporate EBITDA was $0.5 million and $1.0 million for the three and six months ended June 30, 2023, compared to Pre-Corporate EBITDA of $1.4 million and $2.6 million for the three and six months ended June 30, 2022.  

The following table reconciles reported total revenues under generally accepted accounting principles to Gross Billings, for the three and six months ended June 30, 2023 and 2022.

(in thousands) Three months ended
June 30, 
Six months ended
June 30,
 2023202220232022
Total Revenues4,4934,6998,9779,247
Model costs13,04812,90526,15125,002
Gross billings*17,54117,60435,12834,249
*Non-GAAP measures referenced are detailed in the disclosures at the end of this release.


Model costs include amounts owed to talent, including taxes required to be withheld and remitted directly to taxing authorities, commissions owed to other agencies, and related costs such as those paid for photography.

The following table reconciles reported net income under generally accepted accounting principles to EBITDA, Adjusted EBITDA and Pre-Corporate EBITDA for the three and six months ended June 30, 2023 and 2022.

(in thousands)Three months ended
June 30,
 Six months ended
June 30,
 
 2023 2022 20232022 
Net (loss) income(14)921 1451,660 
Interest expense- 2 15 
Income tax expense102 227 153353 
Amortization and depreciation56 47 107106 
EBITDA*144 1,197 4062,124 
Foreign exchange loss (gain)61 (110)79(104)
Share-based payment expense25 55 49110 
Adjusted EBITDA*230 1,142 5342,130 
Corporate overhead246 222 490476 
Pre-Corporate EBITDA*476 1,364 1,0242,606 
*Non-GAAP measures referenced are detailed in the disclosures at the end of this release.


Changes in net income, EBITDA, Adjusted EBITDA and Pre-Corporate EBITDA for the three and six months ended June 30, 2023, when compared to the three and six months ended June 30, 2022, were primarily the result of the following:

  • Total revenues for the three and six months ended June 30, 2023 decreased by 4.4% and 2.9% due to decreased commissions on bookings in the Company’s core modeling divisions;
  • Salaries and service costs for the three and six months ended June 30, 2023 increased by 10.5% and 9.5% primarily due to personnel hires and payroll changes to better align Wilhelmina staffing with the needs of each office and geographical region;
  • Office and general expenses for the three and six months ended June 30, 2023 increased by 53.4% and 52.9% primarily due to increased legal expense, rent expense, utilities, and other office related expenses.;
  • Amortization and depreciation expense for the three and six months ended June 30, 2023 increased by 19.1% and 0.9%, primarily due to increased depreciation of capitalized furniture and leasehold assets at the Company’s new New York City office; and
  • Corporate overhead expenses for the three and six months ended June 30, 2023 increased by 10.8% and 2.9%, primarily due to increased corporate travel expenses and the timing of audit costs incurred earlier than the prior year.

WILHELMINA INTERNATIONAL, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands, except share data) 

  (Unaudited)    
  June 30,
2023
  December 31,
2022
 
       
ASSETS      
Current assets:      
Cash and cash equivalents $10,943   $11,998  
Accounts receivable, net of allowance for doubtful accounts of $1,931 and $1,612, respectively  9,965    9,467  
Prepaid expenses and other current assets  214    181  
Total current assets  21,122    21,646  
         
Property and equipment, net of accumulated depreciation of $1,292 and $1,216, respectively  340    307  
Right of use assets-operating  3,429    3,565  
Right of use assets-finance  108    138  
Trademarks and trade names with indefinite lives   8,467    8,467  
Goodwill  7,547    7,547  
Other assets  301    322  
         
TOTAL ASSETS $41,314   $41,992  
         
LIABILITIES AND SHAREHOLDERS’ EQUITY          
Current liabilities:        
Accounts payable and accrued liabilities $3,883   $4,306  
Due to models  7,815    8,378  
Contract liabilities  -    270  
Lease liabilities – operating, current  572    385  
Lease liabilities – finance, current  64    62  
Total current liabilities  12,334    13,401  
         
Long term liabilities:        
Deferred income tax, net  1,138    985  
Lease liabilities – operating, non-current  3,187    3,310  
Lease liabilities – finance, non-current  52    85  
Total long term liabilities  4,377    4,380  
         
Total liabilities  16,711    17,781  
         
Shareholders’ equity:        
Common stock, $0.01 par value, 9,000,000 shares authorized; 6,472,038 shares        
issued and outstanding at June 30, 2023 and December 31, 2022  65    65  
Treasury stock, 1,314,694 shares at June 30, 2023 and December 31, 2022, at cost  (6,371)   (6,371) 
Additional paid-in capital  88,819    88,770  
Accumulated deficit  (57,564)   (57,709) 
Accumulated other comprehensive loss  (346)   (544) 
Total shareholders’ equity  24,603    24,211  
         
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY $41,314    $41,992  


WILHELMINA INTERNATIONAL, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME
For the Three and Six Months Ended June 30, 2023 and 2022
 (In thousands, except for share and per share data)
(Unaudited)

  Three Months Ended  Six Months Ended 
  June 30,   June 30,  
  2023   2022   2023   2022  
Revenues:            
Service revenues $4,486   $4,691   $8,962   $9,232  
License fees  7    8    15    15  
Total revenues  4,493    4,699    8,977    9,247  
                 
Operating expenses:                
Salaries and service costs  2,979    2,697    5,859    5,349  
Office and general expenses  1,063    693    2,143    1,402  
Amortization and depreciation  56    47    107    106  
Corporate overhead  246    222    490    476  
Total operating expenses  4,344    3,659    8,599    7,333  
Operating income  149    1,040    378    1,914  
                 
Other expense (income):                
Foreign exchange loss (gain)  61    (110)   79    (104) 
Interest expense  -    2    1    5  
Total other expense (income)  61    (108)   80    (99) 
                 
Income before provision for income taxes   88    1,148    298    2,013  
                 
Provision for income taxes:                
Current  56    (54)   -    (84) 
Deferred  (158)   (173)   (153)   (269) 
Provision for income taxes, net  (102)   (227)   (153)   (353) 
                 
 Net (loss) income $(14)  $921   $145   $1,660  
                 
Other comprehensive income (loss):                
Foreign currency translation adjustment  112    (338)   198    (512) 
Total comprehensive income $98   $583   $343   $1,148  
              ��  
Basic net income per common share $0.00   $0.18   $0.03   $0.32  
Diluted net income per common share $0.00   $0.18   $0.03   $0.32  
                 
Weighted average common shares outstanding-basic  5,157    5,157    5,157    5,157  
Weighted average common shares outstanding-diluted  5,157    5,157    5,157    5,157  


WILHELMINA INTERNATIONAL, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITY
For the Three and Six Months Ended June 30, 2023 and 2022
(In thousands)

  Common
Shares
 Stock
Amount
 Treasury
Shares
  Stock
Amount
  Additional
Paid-in
Capital
  Accumulated
Deficit
   Accumulated
Other
Comprehensive
Income (Loss)
 Total 
Balances at December 31, 2021  6,472 $65  (1,315)  $(6,371)  $88,580  $(61,238)  $(23) $21,013  
Share based payment expense  -  -  -    -    55   -    -   55  
Net income  -  -  -    -    -   739    -   739  
Foreign currency translation  -  -  -    -    -   -    (174)  (174) 
Balances at March 31, 2022  6,472 $65  (1,315)  $(6,371)  $88,635  $(60,499)  $(197) $21,633  
Share based payment expense  -  -  -    -    55   -    -   55  
Net income  -  -  -    -    -   921    -   921  
Foreign currency translation  -  -  -    -    -   -    (338)  (338) 
Balances at June 30, 2022  6,472 $65  (1,315)  $(6,371)  $88,690  $(59,578)  $(535) $22,271  


  Common
Shares
 Stock
Amount
 Treasury
Shares
  Stock
Amount
  Additional
Paid-in
Capital
  Accumulated
Deficit
   Accumulated
Other
Comprehensive
Income (Loss)
 Total 
Balances at December 31, 2022  6,472 $65  (1,315)  $(6,371)  $88,770  $(57,709)  $(544) $24,211  
Share based payment expense  -  -  -    -    24   -    -   24  
Net income  -  -  -    -    -   159    -   159  
Foreign currency translation  -  -  -    -    -   -    86   86  
Balances at March 31, 2023  6,472 $65  (1,315)  $(6,371)  $88,794  $(57,550)  $(458) $24,480  
Share based payment expense  -  -  -    -    25   -    -   25  
Net loss  -  -  -    -    -   (14)   -   (14 
Foreign currency translation  -  -  -    -    -   -    112   112  
Balances at June 30, 2023  6,472 $65  (1,315)  $(6,371)  $88,819  $(57,564)  $(346) $24,603  


WILHELMINA INTERNATIONAL, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOW
For the Six Months Ended June 30, 2023 and 2022
 (In thousands)
(Unaudited)

  Six Months Ended
June 30,
 
   2023   2022  
Cash flows from operating activities:      
Net income: $145   $1,660  
Adjustments to reconcile net income to net cash used in operating activities:        
Amortization and depreciation  107    106  
Share based payment expense  49    110  
Loss (gain) on foreign exchange rates  79    (104) 
Deferred income taxes  153    269  
Bad debt expense  82    79  
Changes in operating assets and liabilities:        
Accounts receivable  (659)   (2,412) 
Prepaid expenses and other current assets  (33)   (116) 
Right of use assets-operating  349    238  
Other assets  21    (227) 
Due to models  (563)   681  
Lease liabilities-operating  (149)   (240) 
Contract liabilities  (270)   (535) 
Accounts payable and accrued liabilities  (423)   14  
Net cash used in operating activities  (1,112)   (477) 
         
Cash flows from investing activities:        
Purchases of property and equipment  (109)   (18) 
Net cash used in investing activities  (109)   (18) 
         
Cash flows from financing activities:        
Payments on finance leases  (32)   (33) 
Net cash used in financing activities  (32)   (33) 
         
Foreign currency effect on cash flows:  198    (412) 
         
Net change in cash and cash equivalents:  (1,055)   (940) 
Cash and cash equivalents, beginning of period  11,998    10,251  
Cash and cash equivalents, end of period $10,943   $9,311  
         
Supplemental disclosures of cash flow information:        
Cash paid for income taxes $49   $5  
           
         
         

Non-GAAP Financial Measures

Gross Billings, EBITDA, Adjusted EBITDA and Pre-Corporate EBITDA represent measures of financial performance that are not calculated and presented in accordance with U.S. generally accepted accounting principles (“non-GAAP financial measures”). The Company considers Gross Billings, EBITDA, Adjusted EBITDA and Pre-Corporate EBITDA to be important measures of performance because they:

  • are key operating metrics of the Company's business;
  • are used by management in its planning and budgeting processes and to monitor and evaluate its financial and operating results; and
  • provide stockholders and potential investors with a means to evaluate the Company's financial and operating results against other companies within the Company's industry. 

The Company's calculation of non-GAAP financial measures may not be consistent with similar calculations by other companies in the Company's industry. The Company calculates Gross Billings as the gross amounts billed to customers on behalf of its models and talent for services performed. The Company calculates EBITDA as net income plus interest expense, income tax expense, and depreciation and amortization expense. The Company calculates “Adjusted EBITDA” as EBITDA plus foreign exchange gain/loss, share-based payment expense and certain significant non-recurring items that the Company may include from time to time. There were no such non-recurring items during the six months ended June 30, 2023 and 2022. The Company calculates “Pre-Corporate EBITDA” as Adjusted EBITDA plus corporate overhead expense, which includes director compensation, securities laws compliance costs, audit and professional fees, and other public company costs.

Non-GAAP financial measures should not be considered as alternatives to net and operating income as an indicator of the Company's operating performance or cash flows from operating activities as a measure of liquidity or any other measure of performance derived in accordance with generally accepted accounting principles.

Form 10-Q Filing

Additional information concerning the Company's results of operations and financial position is included in the Company's Form 10-Q for the second quarter ended June 30, 2023 filed with the Securities and Exchange Commission on August 11, 2023.

Forward-Looking Statements

This press release contains certain “forward-looking” statements as such term is defined in the Private Securities Litigation Reform Act of 1995. Such forward-looking statements relating to the Company are based on the beliefs of the Company’s management as well as information currently available to the Company’s management. When used in this report, the words “anticipate,” “believe,” “estimate,” “expect” and “intend” and words or phrases of similar import, as they relate to the Company or Company management, are intended to identify forward-looking statements. Such forward-looking statements include, in particular, projections about the Company’s future results, statements about its plans, strategies, business prospects, changes and trends in its business and the markets in which it operates. Additionally, statements concerning future matters such as gross billing levels, revenue levels, expense levels, and other statements regarding matters that are not historical are forward-looking statements. Management cautions that these forward-looking statements relate to future events or the Company’s future financial performance and are subject to business, economic, and other risks and uncertainties, both known and unknown, that may cause actual results, levels of activity, performance, or achievements of its business or its industry to be materially different from those expressed or implied by any forward-looking statements. Should any one or more of these risks or uncertainties materialize, or should any underlying assumptions prove incorrect, actual results may vary materially from those described herein as anticipated, believed, estimated, expected or intended. The Company does not undertake any obligation to publicly update these forward-looking statements. As a result, no person should place undue reliance on these forward-looking statements.

About Wilhelmina International, Inc. (www.wilhelmina.com):

Wilhelmina, together with its subsidiaries, is an international full-service fashion model and talent management service, specializing in the representation and management of leading models, celebrities, artists, photographers, athletes, and content creators. Established in 1967 by fashion model Wilhelmina Cooper, Wilhelmina is one of the oldest and largest fashion model management companies in the world. Wilhelmina is publicly traded on Nasdaq under the symbol WHLM.  Wilhelmina is headquartered in New York and, since its founding, has grown to include operations in Los Angeles, Miami, and London. Wilhelmina also owns Aperture, a talent agency located in New York and Los Angeles. For more information, please visit www.wilhelmina.com and follow @WilhelminaModels.

CONTACT: Investor Relations
Wilhelmina International, Inc.
214-661-7488
ir@wilhelmina.com 


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