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Wilhelmina International, Inc. Reports Results for Second Quarter 2022
Source: Nasdaq GlobeNewswire / 10 Aug 2022 08:30:01 America/New_York
Second Quarter Financial Results
(in thousands)
Q2 22
Q2 21YOY
ChangeQ2 22
YTDQ2 21
YTDYOY
ChangeTotal Revenues $ 17,604 $ 14,510 21.3 % $ 34,249 $ 26,486 29.3 % Operating Income 1,040 891 16.7 % 1,914 991 93.1 % 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 1,135 0.6 % 2,130 1,504 41.6 % Pre-Corporate EBITDA* 1,364 1,333 2.3 % 2,606 1,947 33.8 % *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cities where Wilhelmina operates reopened and business activity increased as COVID-19 restrictions were moderated or rescinded.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 ended
June 30,Six months ended
June 30,2022 2021 2022 2021 Net income 921 1,121 1,660 3,342 Interest expense 2 13 5 42 Income tax expense 227 302 353 375 Amortization and depreciation 47 243 106 509 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 expense 55 1 110 4 Adjusted EBITDA** 1,142 1,135 2,130 1,504 Corporate overhead 222 198 476 443 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 SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands, except share data)(Unaudited) June 30,
2022December 31,
2021ASSETS 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 SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME
For 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 SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITY
For the Three and Six Months Ended June 30, 2022 and 2021
(In thousands)Common
SharesStock
AmountTreasury
SharesStock
AmountAdditional
Paid-in
CapitalAccumulated
DeficitAccumulated
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 Common
SharesStock
AmountTreasury
SharesStock
AmountAdditional
Paid-in
CapitalAccumulated
DeficitAccumulated
Other
Comprehensive
LossTotal 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 SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOW
For the Six Months Ended June 30, 2022 and 2021
(In thousands)
(Unaudited)Six Months Ended
June 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 ir@wilhelmina.com 
- 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;