• Wilhelmina International, Inc. Reports Results for First Quarter 2022

    Source: Nasdaq GlobeNewswire / 11 May 2022 16:15:00   America/New_York

    First Quarter Financial Results

     
    (in thousands)
    Q1 2022

    Q1 2021
    YOY
    Change
    Total Revenues$16,645$11,97639.0%
    Operating Income 874 100 
    Income Before Provision for Taxes 865 2,294(62.3%)
    Net Income  739 2,221(66.7%)
    EBITDA**  927 2,589(64.2%)
    Adjusted EBITDA** 988 369167.8%
    Pre-Corporate EBITDA** 1,242 614102.3%
    * Not Meaningful
    **Non-GAAP measures referenced are detailed in the disclosures at the end of this release.

    DALLAS, May 11, 2022 (GLOBE NEWSWIRE) -- Wilhelmina International, Inc. (Nasdaq:WHLM) ("Wilhelmina" or the "Company") today reported revenues of $16.6 million and net income of $0.7 million for the three months ended March 31, 2022, compared to revenues of $12.0 million and net income of $2.2 million for the three months ended March 31, 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cities where Wilhelmina operates reopened and business activity increased as COVID-19 restrictions were moderated or rescinded.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 impacted by $1.9 million of gain on forgiveness of PPP loans and $0.4 million of employee retention payroll tax credits during the quarter ended March 31, 2021.

    Financial Results

    Net income for the three months ended March 31, 2022 was $0.7 million, or $0.14 per fully diluted share, compared to net income of $2.2 million, or $0.43 per fully diluted share, for the three months ended March 31, 2021.

    Pre-Corporate EBITDA was $1.2 million for the three months ended March 31, 2022, compared to Pre-Corporate EBITDA of $0.6 million for the three months ended March 31, 2021.  

    The following table reconciles reported net income under generally accepted accounting principles to EBITDA, Adjusted EBITDA and Pre-Corporate EBITDA for the three months ended March 31, 2022 and 2021.

    (in thousands)Three months ended
    March 31,
      2022 2021 
    Net income$739$2,221 
    Interest expense 3 29 
    Income tax expense 126 73 
    Amortization and depreciation 59 266 
    EBITDA**$927$2,589 
    Foreign exchange loss 6 68 
    Non-recurring items* - (2,291)
    Share-based payment expense 55 3 
    Adjusted EBITDA** $988$369 
    Corporate overhead 254 245 
    Pre-Corporate EBITDA** $1,242$614 
    *Non-recurring items include gain on forgiveness of PPP loan and employee retention payroll tax credit during the three months ended March 31, 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 months ended March 31, 2022, when compared to the three months ended March 31, 2021, were primarily the result of the following:

    • Revenues net of model costs for the three months ended March 31, 2022 increased by 36.3% 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 increased by 41.7% for the three months ended March 31, 2022 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 months ended March 31, 2022 decreased by 17.1% primarily due to reduced rent expense, other office related expenses, utilities, computer expenses, and legal expenses;
    • Amortization and depreciation expense for the three months ended March 31, 2022 decreased by 77.8%, primarily due to reduced depreciation of assets that became fully amortized in 2021;
    • Non-recurring items included $1.9 million of gain on forgiveness of a Paycheck Protection Program loan and $0.4 million of employee retention credit for the three months ended March 31, 2021;   and
    • Corporate overhead increased by 3.7%, 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 SUBSIDIARIES
    CONDENSED CONSOLIDATED BALANCE SHEETS
    (In thousands, except share data)
         
      (Unaudited)  
      March 31,
    2022
     December 31,
    2021
    ASSETS    
    Current assets:    
    Cash and cash equivalents $9,428  $10,251 
    Accounts receivable, net of allowance for doubtful accounts of $1,612 and $1,580, respectively  9,555   8,858 
    Prepaid expenses and other current assets  190   91 
    Total current assets  19,173   19,200 
           
    Property and equipment, net of accumulated depreciation of $4,135 and $4,094, respectively  142   168 
    Right of use assets-operating  1,627   1,745 
    Right of use assets-finance  183   199 
    Trademarks and trade names with indefinite lives  8,467   8,467 
    Goodwill  7,547   7,547 
    Other assets  100   98 
           
    TOTAL ASSETS $37,239  $37,424 
           
    LIABILITIES AND SHAREHOLDERS’ EQUITY      
    Current liabilities:      
    Accounts payable and accrued liabilities $3,415  $3,707 
    Due to models  8,150   8,090 
    Deferred revenue  -   535 
    Lease liabilities – operating, current  471   463 
    Lease liabilities – finance, current  60   64 
    Total current liabilities  12,096   12,859 
           
    Long term liabilities:      
    Deferred income tax, net  2,144   2,048 
    Lease liabilities – operating, non-current  1,235   1,361 
    Lease liabilities – finance, non-current  131   143 
    Total long-term liabilities  3,510   3,552 
           
    Total liabilities  15,606   16,411 
           
    Shareholders’ equity:      
    Common stock, $0.01 par value, 9,000,000 shares authorized; 6,472,038 shares issued at March 31, 2022 and December 31, 2021  65   65 
    Treasury stock, 1,314,694 shares at March 31, 2022 and December 31, 2021, at cost  (6,371)  (6,371)
    Additional paid-in capital  88,635   88,580 
    Accumulated deficit  (60,499)  (61,238)
    Accumulated other comprehensive loss  (197)  (23)
    Total shareholders’ equity  21,633   21,013 
           
    TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY $37,239  $37,424 


     
    WILHELMINA INTERNATIONAL, INC. AND SUBSIDIARIES
    CONDENSED CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME
    For the Three Months Ended March 31, 2022 and 2021
    (In thousands, except per share data)
    (Unaudited)
     
      Three Months Ended
      March 31,
      2022 2021
    Revenues:    
    Service revenues $16,638  $11,966 
    License fees  7   10 
    Total revenues  16,645   11,976 
           
    Model costs  12,097   8,639 
           
    Revenues, net of model costs  4,548   3,337 
           
    Operating expenses:      
    Salaries and service costs  2,652   1,871 
    Office and general expenses  709   855 
    Amortization and depreciation  59   266 
    Corporate overhead  254   245 
    Total operating expenses  3,674   3,237 
    Operating income  874   100 
           
    Other expense (income):      
    Foreign exchange loss  6   68 
    Gain on forgiveness of loan  -   (1,865)
    Employee retention payroll tax credit  -   (426)
    Interest expense  3   29 
    Total other expense (income)  9   (2,194)
           
    Income before provision for income taxes  865   2,294 
           
    Provision for income taxes:      
    Current  (30)  (36)
    Deferred  (96)  (37)
    Provision for income taxes, net  (126)  (73)
           
    Net income $739  $2,221 
           
    Other comprehensive loss:      
    Foreign currency translation adjustment  (174)  (19)
    Total comprehensive income  565   2,202 
           
    Basic net income per common share $0.14  $0.43 
    Diluted net income per common share $0.14  $0.43 
           
    Weighted average common shares outstanding-basic  5,157   5,157 
    Weighted average common shares outstanding-diluted  5,157   5,157 
           


     
    WILHELMINA INTERNATIONAL, INC. AND SUBSIDIARIES
    CONDENSED CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITY
    For the Three Months Ended March 31, 2022 and 2021
    (In thousands)
    (Unaudited)
     
      Common
    Shares
     Stock
    Amount
     Treasury
    Shares
     Stock
    Amount
     Additional
    Paid-in
    Capital
     Accumulated
    Deficit
      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 


      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 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 


     
    WILHELMINA INTERNATIONAL, INC. AND SUBSIDIARIES
    CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOW
    For the Three Months Ended March 31, 2022 and 2021
    (In thousands)
    (Unaudited)
     
      Three Months Ended
    March 31,
      2022 2021
    Cash flows from operating activities:    
    Net income: $739  $2,221 
    Adjustments to reconcile net income to net cash (used in) provided by operating activities:      
    Amortization and depreciation  59   266 
    Share based payment expense  55   3 
    Gain on forgiveness of loan  -   (1,865)
    Foreign exchange loss  6   68 
    Employee retention payroll tax credit  -   (365)
    Deferred income taxes  96   37 
    Bad debt expense  43   36 
    Changes in operating assets and liabilities:      
    Accounts receivable  (829)  (948)
    Prepaid expenses and other current assets  (103)  (78)
    Right of use assets-operating  119   - 
    Other assets  (3)  - 
    Due to models  94   710 
    Lease liabilities-operating  (119)  (19)
    Deferred revenue  (535)  - 
    Accounts payable and accrued liabilities  (300)  208 
    Net cash (used in) provided by operating activities  (678)  274 
           
    Cash flows from investing activities:      
    Purchases of property and equipment  (15)  (4)
    Net cash used in investing activities  (15)  (4)
           
    Cash flows from financing activities:      
    Payments on finance leases  (17)  (24)
    Repayment of term loan  -   (46)
    Net cash used in financing activities  (17)  (70)
           
    Foreign currency effect on cash flows:  (113)  (19)
           
    Net change in cash and cash equivalents:  (823)  181 
    Cash and cash equivalents, beginning of period  10,251   5,556 
    Cash and cash equivalents, end of period $9,428  $5,737 
           
    Supplemental disclosures of cash flow information:      
    Cash paid for interest $-  $9 
           
    Noncash investing and financing activities      
    Gain on forgiveness of loan $-  $1,865 

    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 a PPP loan 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 first quarter ended March 31, 2022 filed with the Securities and Exchange Commission on May 11, 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 the Nasdaq Capital Market under the symbol WHLM.  Wilhelmina’s operations are 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 and commercial 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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