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Wilhelmina International, Inc. Reports Results for Third Quarter 2023
Source: Nasdaq GlobeNewswire / 09 Nov 2023 16:15:26 America/New_York
Third Quarter Financial Results
(in thousands)
Q3 23
Q3 22YOY
ChangeQ3 23
YTDQ3 22
YTDYOY
ChangeTotal Revenues $ 4,472 $ 4,442 0.7 % $ 13,449 $ 13,689 (1.8 %) Operating Income 467 671 (30.4 %) 845 2,585 (67.3 %) Income Before Provision for Taxes 485 776 (37.5 %) 783 2,789 (71.9 %) Net Income 359 1,887 (81.0 %) 504 3,547 (85.8 %) Gross Billings* 16,158 16,264 (0.7 %) 51,286 50,513 1.5 % EBITDA* 540 820 (34.1 %) 946 2,944 (67.9 %) Adjusted EBITDA* 547 768 (28.8 % 1,081 2,898 (62.7 %) Pre-Corporate EBITDA* 795 1,015 (21.7 %) 1,819 3,621 (49.8 %) *Non-GAAP measures referenced are detailed in the disclosures at the end of this release. DALLAS, Nov. 09, 2023 (GLOBE NEWSWIRE) -- Wilhelmina International, Inc. (Nasdaq:WHLM) ("Wilhelmina" or the "Company") today reported revenues of $4.5 million and net income of $0.4 million for the three months ended September 30, 2023, compared to revenues of $4.4 million and net income of $1.9 million for the three months ended September 30, 2022. For the nine months ended September 30, 2023, Wilhelmina reported revenues of $13.4 million and net income of $0.5 million compared to revenue of $13.7 million and net income of $3.5 million for the nine months ended September 30, 2022. Net income for the three and nine months ended September 30, 2022 were significantly impacted by the full release of a previous $1.5 million valuation allowance against deferred tax assets.
Financial Results
Net income for the three months ended September 30, 2023 was $0.4 million or $0.07 per fully diluted share, compared to net income of $1.9 million, or $0.37 per fully diluted share, for the three months ended September 30, 2022. Net income for the nine months ended September 30, 2023 was $0.5 million, or $0.10 per fully diluted share, compared to $3.5 million, or $0.69 per fully diluted share, for the nine months ended September 30, 2022.
Pre-Corporate EBITDA was $0.8 million and $1.8 million for the three and nine months ended September 30, 2023, compared to Pre-Corporate EBITDA of $1.0 million and $3.6 million for the three and nine months ended September 30, 2022.
The following table reconciles reported total revenues under generally accepted accounting principles to Gross Billings, for the three and nine months ended September 30, 2023 and 2022.
(in thousands) Three months ended
September 30,Nine months ended
September 30,2023 2022 2023 2022 TotalRevenues $ 4,472 $ 4,442 $ 13,449 $ 13,689 Model costs 11,686 11,822 37,837 36,824 Gross billings* 16,158 16,264 51,286 50,513 *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 nine months ended September 30, 2023 and 2022.
(in thousands) Three months ended
September 30,Nine months ended
September 30,2023 2022 2023 2022 Net(loss)income $ 359 $ 1,887 $ 504 $ 3,547 Interest - 2 1 7 Income tax expense (benefit) 126 (1,111 ) 279 (758 ) Amortization and depreciation 55 42 162 148 EBITDA* 540 820 946 2,944 Foreign exchange (gain) loss (18 ) (107 ) 61 (211 ) Share-based payment expense 25 55 74 165 AdjustedEBITDA* 547 768 1,081 2,898 Corporateoverhead 248 247 738 723 Pre-Corporate EBITDA* 795 1,015 1,819 3,621 *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 nine months ended September 30, 2023, when compared to the three and nine months ended September 30, 2022, were primarily the result of the following:
- Total revenues for the three months ended September 30, 2023 increased 0.7% primarily due to increased commissions from model bookings. Total revenues for the nine months ended September 30, 2023 decreased by 1.8% primarily due to due to decreased commissions on bookings during the first half of the year;
- Salaries and service costs for the three and nine months ended September 30, 2023 increased by 3.3% and 7.4% 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 nine months ended September 30, 2023 increased by 17.8% and 40.9% primarily due to increased legal expense, rent expense, utilities, computer expenses, and other office related expenses;
- Amortization and depreciation expense for the three and nine months ended September 30, 2023 increased by 31.0% and 9.5%, primarily due to increased depreciation of capitalized furniture and leasehold assets at the Company’s New York City office; and
- Corporate overhead expenses for the three and nine months ended September 30, 2023 increased by 0.4% and 2.1%, 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)
September 30,
2023December 31,
2022ASSETS Current assets: Cash and cash equivalents $ 10,873 $ 11,998 Short term investments 295 - Accounts receivable, net of allowance for doubtful accounts of $2,038 and $1,664, respectively 9,897 9,467 Prepaid expenses and other current assets 289 181 Total current assets 21,354 21,646 Property and equipment, net of accumulated depreciation of $498 and $1,216, respectively 332 307 Right of use assets-operating 3,625 3,565 Right of use assets-finance 93 138 Trademarks and trade names with indefinite lives 8,467 8,467 Goodwill 7,547 7,547 Other assets 300 322 TOTAL ASSETS $ 41,718 $ 41,992 LIABILITIES AND SHAREHOLDERS’ EQUITY Current liabilities: Accounts payable and accrued liabilities $ 3,949 $ 4,306 Due to models 7,589 8,378 Contract liabilities - 270 Lease liabilities – operating, current 695 385 Lease liabilities – finance, current 65 62 Total current liabilities 12,298 13,401 Long term liabilities: Deferred income tax, net 1,278 985 Lease liabilities – operating, non-current 3,271 3,310 Lease liabilities – finance, non-current 36 85 Total long term liabilities 4,585 4,380 Total liabilities 16,883 17,781 Shareholders’ equity: Common stock, $0.01 par value, 9,000,000 shares authorized; 6,472,038 shares issued at September 30, 2023 and December 31, 2022 65 65 Treasury stock, 1,314,694 shares at September 30, 2023 and December 31, 2022, at cost (6,371 ) (6,371 ) Additional paid-in capital 88,844 88,770 Accumulated deficit (57,205 ) (57,709 ) Accumulated other comprehensive loss (498 ) (544 ) Total shareholders’ equity 24,835 24,211 TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY $ 41,718 $ 41,992 WILHELMINA INTERNATIONAL, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME
For the Three and Nine Months Ended September 30, 2023 and 2022
(In thousands, except for share and per share data)
(Unaudited)Three Months Ended Nine Months Ended September 30, September 30, 2023 2022 2023 2022 Revenues: Service revenues $ 4,465 $ 4,434 $ 13,427 $ 13,666 License fees 7 8 22 23 Total revenues 4,472 4,442 13,449 13,689 Operating expenses: Salaries and service costs 2,843 2,753 8,702 8,102 Office and general expenses 859 729 3,002 2,131 Amortization and depreciation 55 42 162 148 Corporate overhead 248 247 738 723 Total operating expenses 4,005 3,771 12,604 11,104 Operating income 467 671 845 2,585 Other (income) expense: Foreign exchange (gain) loss (18 ) (107 ) 61 (211 ) Interest expense - 2 1 7 Total other (income) expense (18 ) (105 ) 62 (204 ) Income before provision for income taxes 485 776 783 2,789 Benefit (provision) for income taxes: Current 14 (221 ) 14 (305 ) Deferred (140 ) 1,332 (293 ) 1,063 Benefit (provision) for income taxes, net (126 ) 1,111 (279 ) 758 Net income $ 359 $ 1,887 $ 504 $ 3,547 Other comprehensive (loss) income: Foreign currency translation adjustment (152 ) (352 ) 46 (864 ) Total comprehensive income $ 207 $ 1,535 $ 550 $ 2,683 Basic net income per common share $ 0.07 $ 0.37 $ 0.10 $ 0.69 Diluted net income per common share $ 0.07 $ 0.37 $ 0.10 $ 0.69 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 Nine Months Ended September 30, 2023 and 2022
(In thousands)Common
SharesStock
AmountTreasury
SharesStock
AmountAdditional
Paid-in
CapitalAccumulated
DeficitAccumulated
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 Share based payment expense - - - - 55 - - 55 Net income - - - - - 1,887 - 1,887 Foreign currency translation - - - - - - (352 ) (352 ) Balances at September 30, 2022 6,472 $ 65 (1,315 ) $ (6,371 ) $ 88,745 $ (57,691 ) $ (887 ) $ 23,861 Common
SharesStock
AmountTreasury
SharesStock
AmountAdditional
Paid-in
CapitalAccumulated
DeficitAccumulated
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 Share based payment expense - - - - 25 - - 25 Net income - - - - - 359 - 359 Foreign currency translation - - - - - - (152 ) (152 ) Balances at September 30, 2023 6,472 $ 65 (1,315 ) $ (6,371 ) $ 88,844 $ (57,205 ) $ (498 ) $ 24,835 WILHELMINA INTERNATIONAL, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOW
For the Nine Months Ended September 30, 2023 and 2022
(In thousands)
(Unaudited)Nine Months Ended
September 30,2023 2022 Cash flows from operating activities: Net income: $ 504 $ 3,547 Adjustments to reconcile net income to net cash used in operating activities: Amortization and depreciation 162 148 Share based payment expense 74 165 Loss (gain) on foreign exchange rates 61 (211 ) Deferred income taxes 293 (1,063 ) Bad debt expense 126 115 Changes in operating assets and liabilities: Accounts receivable (617 ) (2,123 ) Prepaid expenses and other current assets (108 ) (140 ) Right of use assets-operating 519 359 Other assets 22 (228 ) Due to models (789 ) 1,086 Lease liabilities-operating (308 ) (337 ) Contract liabilities (270 ) (535 ) Accounts payable and accrued liabilities (357 ) 455 Net cash (used in) provided by operating activities (688 ) 1,238 Cash flows from investing activities: Purchases of property and equipment (141 ) (96 ) Purchase of short term investments (295 ) - Net cash used in investing activities (436 ) (96 ) Cash flows from financing activities: Payments on finance leases (47 ) (45 ) Net cash used in financing activities (47 ) (45 ) Foreign currency effect on cash flows: 46 (819 ) Net change in cash and cash equivalents: (1,125 ) 278 Cash and cash equivalents, beginning of period 11,998 10,251 Cash and cash equivalents, end of period $ 10,873 $ 10,529 Supplemental disclosures of cash flow information: Cash paid for income taxes $ 65 $ 16 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 nine months ended September 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 third quarter ended September 30, 2023 filed with the Securities and Exchange Commission on November 9, 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 
- Total revenues for the three months ended September 30, 2023 increased 0.7% primarily due to increased commissions from model bookings. Total revenues for the nine months ended September 30, 2023 decreased by 1.8% primarily due to due to decreased commissions on bookings during the first half of the year;