Wilhelmina International, Inc. Reports Results for Second Quarter 2022

Aug 10th, 2022 8:30 EST

Second Quarter Financial Results

 
(in thousands)Q2 22Q2 21YOYChangeQ2 22 YTDQ2 21 YTDYOYChange
Total Revenues$17,604$14,51021.3%$34,249$26,48629.3%
Operating Income  1,040 89116.7% 1,914 99193.1%
Income Before Provision for Taxes 1,148 1,423(19.3%) 2,013 3,717(45.8%)
Net Income  921 1,121(17.8%) 1,660 3,342(50.3%)
EBITDA*                                                             1,197 1,679(28.7%) 2,124 4,268(50.2%)
Adjusted EBITDA* 1,142 1,1350.6% 2,130 1,50441.6%
Pre-Corporate EBITDA* 1,364 1,3332.3% 2,606 1,94733.8%
*Non-GAAP measures referenced are detailed in the disclosures at the end of this release.

DALLAS, Aug. 10, 2022 (GLOBE NEWSWIRE) -- Wilhelmina International, Inc. (Nasdaq:WHLM) ("Wilhelmina" or the "Company") today reported revenues of $17.6 million and net income of $0.9 million for the three months ended June 30, 2022, compared to revenues of $14.5 million and net income of $1.1 million for the three months ended June 30, 2021. For the six months ended June 30, 2022, Wilhelmina reported revenues of $34.2 million and net income of $1.7 million compared to revenue of $26.5 million and net income of $3.3 million for the six months ended June 30, 2021.   Increased revenues in 2022 were primarily due to increased bookings as the cities where Wilhelmina operates reopened and business activity increased as COVID-19 restrictions were moderated or rescinded. Prior year income was significantly impacted by $0.1 million and $2.0 million of gain on forgiveness of PPP loans and $0.4 million and $0.9 million of employee retention payroll tax credits during the three and six months ended June 30, 2021.  

Financial Results

Net income for the three months ended June 30, 2022 was $0.9 million, or $0.18 per fully diluted share, compared to net income of $1.1 million, or $0.22 per fully diluted share, for the three months ended June 30, 2021. Net income for the six months ended June 30, 2022 was $1.7 million, or $0.32 per fully diluted share, compared to $3.3 million, or $0.65 per fully diluted share, for the six months ended June 30, 2021.

Pre-Corporate EBITDA was $1.4 million and $2.6 million for the three and six months ended June 30, 2022, compared to Pre-Corporate EBITDA of $1.3 million and $1.9 million for the three and six months ended June 30, 2021.  

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, 2022 and 2021.

(in thousands)Three months endedJune 30,Six months endedJune 30,
 2022 2021 2022 2021 
Net income921 1,121 1,660 3,342 
Interest expense2 13 5 42 
Income tax expense227 302 353 375 
Amortization and depreciation47 243 106 509 
EBITDA**1,197 1,679 2,124 4,268 
Foreign exchange (gain) loss(110)20 (104)88 
Non-recurring items*- (565)- (2,856)
Share-based payment expense55 1 110 4 
Adjusted EBITDA**1,142 1,135 2,130 1,504 
Corporate overhead222 198 476 443 
Pre-Corporate EBITDA**1,364 1,333 2,606 1,947 
*Non-recurring items include gain on forgiveness of loans and employee retention credit during the three and six months ended June 30, 2021**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, 2022, when compared to the three and six months ended June 30, 2021, were primarily the result of the following:

  • Revenues net of model costs for the three and six months ended June 30, 2022 increased by 14.7% and 24.4% primarily due to increased bookings as the cities where Wilhelmina operates reopened and business activity increased as COVID-19 restrictions were moderated or rescinded;
  • Salaries and service costs for the three and six months ended June 30, 2022 increased by 31.1% and 36.2% primarily due to temporary reductions in staff salaries in the prior year, which returned to full salary in July 2021;
  • Office and general expenses for the three and six months ended June 30, 2022 decreased by 2.3% and 10.4%, primarily due to reduced rent expense, other office related expenses, utilities, and computer expenses; and
  • Amortization and depreciation expense for the three and six months ended June 30, 2022 decreased by 80.7% and 79.2%, primarily due to reduced depreciation of assets that became fully amortized in 2021;
  • Non-recurring items included $0.1 million and $2.0 million of gain on forgiveness of PPP loans and $0.4 million and $0.9 million of employee retention credit in the three and six months ended June 30, 2021; and
  • Corporate overhead expenses for the three and six months ended June 30, 2022 increased by 12.1% and 7.4%, primarily due to temporary reduction in fees paid to corporate employees and the Company’s directors in the prior year that returned to full fee in July 2021.

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

  (Unaudited)  
  June 30,2022 December 31, 2021
ASSETS    
Current assets:    
Cash and cash equivalents $9,311  $10,251 
Accounts receivable, net of allowance for doubtful accounts of $1,527 and $1,580, respectively  11,118   8,858 
Prepaid expenses and other current assets  199   91 
Total current assets  20,628   19,200 
       
Property and equipment, net of accumulated depreciation of $4,168 and $4,094, respectively  112   168 
Right of use assets-operating  1,507   1,745 
Right of use assets-finance  168   199 
Trademarks and trade names with indefinite lives   8,467   8,467 
Goodwill  7,547   7,547 
Other assets  322   98 
       
TOTAL ASSETS $38,751  $37,424 
       
LIABILITIES AND SHAREHOLDERS’ EQUITY        
Current liabilities:      
Accounts payable and accrued liabilities $3,745  $3,707 
Due to models  8,657   8,090 
Deferred revenue  -   535 
Lease liabilities – operating, current  450   463 
Lease liabilities – finance, current  61   64 
Total current liabilities  12,913   12,859 
       
Long term liabilities:      
Deferred income tax, net  2,317   2,048 
Lease liabilities – operating, non-current  1,134   1,361 
Lease liabilities – finance, non-current  116   143 
Total long term liabilities  3,567   3,552 
       
Total liabilities  16,480   16,411 
       
Shareholders’ equity:      
Common stock, $0.01 par value, 9,000,000 shares authorized; 6,472,038 shares      
  issued at June 30, 2022 and December 31, 2021  65   65 
   Treasury stock, 1,314,694 shares at June 30, 2022 and December 31, 2021, at cost  (6,371)  (6,371)
Additional paid-in capital  88,690   88,580 
Accumulated deficit  (59,578)  (61,238)
Accumulated other comprehensive loss  (535)  (23)
Total shareholders’ equity  22,271   21,013 
       
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY $38,751  $37,424 
 

WILHELMINA INTERNATIONAL, INC. AND SUBSIDIARIESCONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOMEFor the Three and Six Months Ended June 30, 2022 and 2021 (In thousands, except for share and per share data)(Unaudited)

  Three Months Ended Six Months Ended
  June 30,  June 30, 
  2022 2021 2022 2021
Revenues:        
Service revenues $17,596  $14,502  $34,234  $26,468 
License fees  8   8   15   18 
Total revenues  17,604   14,510   34,249   26,486 
             
Model costs  12,905   10,412   25,002   19,051 
             
Revenues, net of model costs  4,699   4,098   9,247   7,435 
             
Operating expenses:            
Salaries and service costs  2,697   2,057   5,349   3,928 
Office and general expenses  693   709   1,402   1,564 
Amortization and depreciation  47   243   106   509 
Corporate overhead  222   198   476   443 
Total operating expenses  3,659   3,207   7,333   6,444 
Operating income  1,040   891   1,914   991 
             
Other (income) expense:            
Foreign exchange (gain) loss  (110)  20   (104)  88 
Gain on forgiveness of loan  -   (129)  -   (1,994)
Employee retention payroll tax credit  -   (436)  -   (862)
Interest expense  2   13   5   42 
Total other income  (108)  (532)  (99)  (2,726)
             
Income before provision for income taxes   1,148   1,423   2,013   3,717 
             
Provision for income taxes:            
Current  (54)  (74)  (84)  (110)
Deferred  (173)  (228)  (269)  (265)
Provision for income taxes, net  (227)  (302)  (353)  (375)
             
 Net income $921  $1,121  $1,660  $3,342 
             
Other comprehensive (loss) income:            
Foreign currency translation adjustment  (338)  16   (512)  (3)
Total comprehensive income $583  $1,137  $1,148  $3,339 
             
Basic net income per common share $0.18  $0.22  $0.32  $0.65 
Diluted net income per common share $0.18  $0.22  $0.32  $0.65 
             
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 SUBSIDIARIESCONDENSED CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITY For the Three and Six Months Ended June 30, 2022 and 2021 (In thousands)

  CommonShares StockAmount TreasuryShares  StockAmount AdditionalPaid-inCapital AccumulatedDeficit  Accumulated Other Comprehensive Income (Loss) Total
Balances at December 31, 2020  6,472 $65  (1,315)  $(6,371) $88,487 $(65,756) $81  $16,506 
Share based payment expense  -  -  -    -   3  -   -   3 
Net income to common shareholders  -  -  -    -   -  2,221   -   2,221 
Foreign currency translation  -  -  -    -   -  -   (19)  (19)
Balances at March 31, 2021  6,472 $65  (1,315)  $(6,371) $88,490 $(63,535) $62  $18,711 
Share based payment expense  -  -  -    -   1  -   -   1 
Net income to common shareholders  -  -  -    -   -  1,121   -   1,121 
Short swing profit disgorgement  -  -  -    -   32  -   -   32 
Foreign currency translation  -  -  -    -   -  -   16   16 
Balances at June 30, 2021  6,472 $65  (1,315)  $(6,371) $88,523 $(62,414) $78  $19,881 

  CommonShares StockAmount TreasuryShares  StockAmount AdditionalPaid-inCapital AccumulatedDeficit AccumulatedOtherComprehensiveLoss 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 to common shareholders  -  -  -    -   -  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 to common shareholders  -  -  -    -   -  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 
   

WILHELMINA INTERNATIONAL, INC. AND SUBSIDIARIESCONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWFor the Six Months Ended June 30, 2022 and 2021 (In thousands)(Unaudited)

  Six Months EndedJune 30,
   2022 2021
Cash flows from operating activities:    
Net income: $1,660  $3,342 
Adjustments to reconcile net income to net cash (used in) provided by operating activities:      
Amortization and depreciation  106   509 
Share based payment expense  110   4 
Gain on forgiveness of loan  -   (1,994)
(Gain) loss on foreign exchange rates  (104)  88 
Employee retention payroll tax credit  -   (35)
Deferred income taxes  269   265 
Bad debt expense  79   78 
Changes in operating assets and liabilities:      
Accounts receivable  (2,412)  (2,058)
Prepaid expenses and other current assets  (116)  (2)
Right of use assets-operating  238   139 
Other assets  (227)  (16)
Due to models  681   982 
Lease liabilities-operating  (240)  (166)
Deferred revenue  (535)  - 
Accounts payable and accrued liabilities  14   410 
Net cash (used in) provided by operating activities  (477)  1,546 
       
Cash flows from investing activities:      
Purchases of property and equipment  (18)  (10)
Net cash used in investing activities  (18)  (10)
       
Cash flows from financing activities:      
Shareholder short swing profit disgorgement  -   32 
Payments on finance leases  (33)  (49)
Repayment of term loan  -   (93)
Net cash used in financing activities  (33)  (110)
       
Foreign currency effect on cash flows:  (412)  (3)
       
Net change in cash and cash equivalents:  (940)  1,423 
Cash and cash equivalents, beginning of period  10,251   5,556 
Cash and cash equivalents, end of period $9,311  $6,979 
       
Supplemental disclosures of cash flow information:      
Cash paid for interest $-  $18 
Cash paid for income taxes $5  $5 
       
Noncash investing and financing activities      
Gain on forgiveness of loan $-   1,994 
       

Non-GAAP Financial Measures

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 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 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. For 2021, these non-recurring items represented gain on forgiveness of PPP loans and employee retention payroll tax credit. 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, 2022 filed with the Securities and Exchange Commission on August 10, 2022.

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
  [email protected] 

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