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CST: 20/08/2019 00:36:24   

Wilhelmina International, Inc. Reports Results for First Quarter 2019

98 Days ago

First Quarter Financial Results

 
(in thousands)
Q1 2019

 
Q1 2018
  YOY
Change

 
Total Revenues $20,059   $19,716   1.7%  
Operating Income 17   364   -95.3%  
(Loss) Income Before Provision for Taxes (30 ) 319   -109.4%  
Net (Loss) Income (109 ) 225   -148.4%  
EBITDA**  292   580   -49.7%  
Adjusted EBITDA** 371   709   -47.7%  
Pre-Corporate EBITDA** 703   1,046   -32.8%  
**Non-GAAP measures referenced are detailed in the disclosures at the end of this release.


DALLAS, May 13, 2019 (GLOBE NEWSWIRE) -- Wilhelmina International, Inc. (Nasdaq:WHLM) ("Wilhelmina" or the "Company") today reported revenues of $20.1 million and net loss of $0.1 million for the three months ended March 31, 2019, compared to revenues of $19.7 million and net income of $0.2 million for the three months ended March 31, 2018. The increase in revenues when compared to the same period of the prior year was primarily due to an increase in bookings in the Aperture and Wilhelmina Studios divisions. Decreased operating income was primarily the result of increased model costs and salaries and service costs, partially offset by lower office and general expenses. As a result, EBITDA, Adjusted EBITDA and Pre-Corporate EBITDA also decreased during the first three months of 2019 compared to the same period of the prior year.

William Wackermann, Chief Executive Officer of Wilhelmina, said, “Wilhelmina has started the year off strong. The beginning of 2019 marks the fifth consecutive quarter that Wilhelmina achieved year over year growth in total revenues. We’re energized by the momentum in our Aperture and Studio businesses, along with the steady performance in our model booking. In 2019, we’ll strive to grow through further innovation while maintaining our legacy.”

Financial Results

Net loss for the three months ended March 31, 2019 was $0.1 million, or $0.02 per fully diluted share, compared to net income of $0.2 million, or $0.04 per fully diluted share, for the three months ended March 31, 2019.

Pre-Corporate EBITDA was $0.7 million for the three months ended March 31, 2019, compared to $1.0 million for the three months ended March 31, 2018. 

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, 2019 and 2018.

(in thousands) Three months ended
March 31,
 
  2019     2018  
Net (loss) income (109)   $ 225  
Interest expense 32     25  
Income tax expense 79     94  
Amortization and depreciation 290     236  
EBITDA 292   $ 580  
Foreign exchange loss 15     20  
Share-based payment expense 64     109  
Adjusted EBITDA 371   $ 709  
Corporate overhead 332     337  
Pre-Corporate EBITDA 703   $ 1,046  

Changes in net income, EBITDA, Adjusted EBITDA and Pre-Corporate EBITDA for the three months ended March 31, 2019, when compared to the three months ended March 31, 2018, were primarily the result of the following:

  • Revenues net of model costs decreased slightly, due to a 4.6% increase in model costs;
     
  • Salaries and service costs increased by 4.4% primarily due to an increase in employee salaries, partially offset by a reduction in share based payment expense;
     
  • Office and general expenses decreased by 10.9%, primarily due to reduced rent expense, legal fees and bad debt expense, as well as the reclassification of certain lease payments as amortization expense under new lease accounting rules;
     
  • Amortization and depreciation expense increased by 22.9% for the three  months ended March 31, 2019, primarily due to new equipment being placed in service in recent months and certain lease payments previously included within office and general expenses now being classified as amortization under new lease accounting rules; and
     
  • Corporate overhead expenses decreased by 1.5%, primarily due to lower securities compliance costs.

During the first three months of 2019, Wilhelmina repurchased an aggregate of 4,112 shares of its common stock under a previously approved stock repurchase program.  The aggregate purchase price of $0.2 million was funded through internal cash flow.  As of March 31, 2019, the Company had repurchased a total of 1,268,266 shares since the initial adoption of the Company’s stock repurchase program in 2012. 


WILHELMINA INTERNATIONAL, INC. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS
(In thousands, except share data) 

 


    (Unaudited)        
     March 31,
2019
    December 31 ,
 2018
 
ASSETS            
Current assets:            
Cash and cash equivalents   $ 6,260       $ 6,748    
Accounts receivable, net of allowance for doubtful accounts of $1,876 and $1,791, respectively     12,940         11,901    
Prepaid expenses and other current assets     302         197    
Total current assets     19,502         18,846    
                 
Property and equipment, net of accumulated depreciation of $3,515 and $3,264, respectively     2,411         2,567    
Right of use assets-operating     2,134         -    
Right of use assets-finance     183         -    
Trademarks and trade names with indefinite lives     8,467         8,467    
Other intangibles with finite lives, net of accumulated amortization of $8,696 and $8,684, respectively     41         53    
Goodwill     13,192         13,192    
Other assets     115         114    
                 
TOTAL ASSETS   $ 46,045       $ 43,239    
                 
LIABILITIES AND SHAREHOLDERS’ EQUITY                
Current liabilities:                
Accounts payable and accrued liabilities   $ 4,860       $ 5,071    
Due to models     9,480         8,809    
Lease liabilities – operating, current     1,123         -    
Lease liabilities – finance, current     112         -    
Term loan – current     674         623    
                 
Total current liabilities     16,249         14,503    
                 
Long term liabilities:                
Net deferred income tax liability     647         631    
Lease liabilities – operating, non-current     1,190         -    
Lease liabilities – finance, non-current     82         -    
Term loan – non-current     1,813         2,000    
Total long term liabilities     3,732         2,631    
                 
Total liabilities     19,981         17,134    
                 
Shareholders’ equity:                
Common stock, $0.01 par value, 9,000,000 shares authorized; 6,472,038 shares issued at March 31, 2019 and December 31, 2018     65         65    
Treasury stock, 1,268,266 and 1,264,154 shares at March 31, 2019 and December 31, 2018, at cost     (6,117 )       (6,093 )  
Additional paid-in capital     88,319         88,255    
Accumulated deficit     (56,138 )       (56,029 )  
Accumulated other comprehensive loss     (65 )       (93 )  
Total shareholders’ equity     26,064         26,105    
                 
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY   $ 46,045       $ 43,239    


WILHELMINA INTERNATIONAL, INC. AND SUBSIDIARIES

STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME
For the Three Months Ended March 31, 2019 and 2018
 (In thousands, except per share data)
(Unaudited)

    Three Months Ended  
    March 31,   
    2019       2018    
Revenues:            
Revenues   $ 20,035       $ 19,702    
License fees and other income     24         14    
Total revenues     20,059         19,716    
                 
Model costs     14,476         13,842    
                 
Revenues net of model costs     5,583         5,874    
                 
Operating expenses:                
Salaries and service costs     3,716         3,559    
Office and general expenses     1,228         1,378    
Amortization and depreciation     290         236    
Corporate overhead     332         337    
Total operating expenses     5,566         5,510    
Operating income     17         364    
                 
Other expense:                
Foreign exchange loss     (15 )       (20 )  
Interest expense     (32 )       (25 )  
Total other expense     (47 )       (45 )  
                 
(Loss) income before provision for income taxes     (30 )       319    
                 
Provision for income taxes:                
Current     (63 )       (84 )  
Deferred     (16 )       (10 )  
Income tax expense     (79 )       (94 )  
                 
Net loss (income)   $ (109 )     $ 225    
                 
Other comprehensive income:                
Foreign currency translation income     28         43    
Total comprehensive (loss) income   $ (81 )     $ 268    
                 
Basic net (loss) income per common share   $ (0.02 )     $ 0.04    
Diluted net (loss) income per common share   $ (0.02 )     $ 0.04    
                 
Weighted average common shares outstanding-basic     5,205         5,381    
Weighted average common shares outstanding-diluted     5,205         5,402    


WILHELMINA INTERNATIONAL, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITY
For the Three Months Ended March 31, 2019 and 2018
 (In thousands)

    Common
Shares
  Stock
Amount
  Treasury
Shares
    Stock
Amount
    Additional
Paid-in
Capital
    Accumulated
Deficit
      Accumulated
Other
Comprehensive
Loss
  Total  
Balances at December 31, 2017     6,472   $ 65     (1,090 )     $ (4,893 )     $ 87,892     $ (56,885 )     $ 4   $ 26,183    
Share based payment expense     -     -     -         -         109       -         -     109    
Net income to common shareholders     -     -     -         -         -       225         -     225    
Purchases of treasury stock     -     -     (6 )       (36 )       -       -         -     (36 )  
Foreign currency translation     -     -     -         -         -       -         43     43    
Balances at March 31, 2018     6,472   $ 65     (1,096 )     $ (4,929 )     $ 88,001     $ (56,660 )     $ 47   $ 26,524    


    Common
Shares
  Stock
Amount
  Treasury
Shares
    Stock
Amount
    Additional
Paid-in
Capital
    Accumulated
Deficit
      Accumulated
Other
Comprehensive
Loss
  Total  
Balances at December 31, 2018     6,472   $ 65     (1,264 )     $ (6,093 )     $ 88,255     $ (56,029 )     $ (93 )   $ 26,105    
Share based payment expense     -     -     -         -         64       -         -       64    
Net loss to common shareholders     -     -     -         -         -       (109 )       -       (109 )  
Purchases of treasury stock     -     -     (4 )       (24 )       -       -         -       (24 )  
Foreign currency translation     -     -     -         -         -       -         28       28    
Balances at March 31, 2019     6,472   $ 65     (1,268 )     $ (6,117 )     $ 88,319     $ (56,138 )     $ (65 )   $ 26,064    


WILHELMINA INTERNATIONAL, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOW
For the Nine Months Ended March 31, 2019 and 2018
 (In thousands)
(Unaudited)

    Three Months Ended
March 31,
    2019     2018 
Cash flows from operating activities:          
Net (loss) income:   $ (109)     $ 225
Adjustments to reconcile net income to net cash used in operating activities:              
Amortization and depreciation     290       236
Share based payment expense     64       109
Deferred income taxes     16       11
Bad debt expense     24       45
Changes in operating assets and liabilities:              
Accounts receivable     (1,063)       (1,559)
Prepaid expenses and other current assets     (105)       (63)
Right of use assets-operating     (2,134)       -
Right of use assets-finance     (183)       -
Other assets     (1)       5
Due to models     671       422
Lease liabilities-operating     2,313       -
Lease liabilities-finance     197       -
Accounts payable and accrued liabilities     (211)       161
Net cash used in operating activities     (231)       (408)
               
Cash flows from investing activities:              
Purchases of property and equipment     (95)       (162)
Net cash used in investing activities     (95)       (162)
               
Cash flows from financing activities:              
Purchases of treasury stock     (24)       (36)
Payments on finance leases     (30)       -
Repayment of term loan     (136)       (129)
Net cash used in financing activities     (190)       (165)
               
Foreign currency effect on cash flows:     28       43
               
Net change in cash and cash equivalents:     (488)       (692)
Cash and cash equivalents, beginning of period     6,748       4,256
Cash and cash equivalents, end of period   $ 6,260     $ 3,564
               
Supplemental disclosures of cash flow information:              
Cash paid for interest   $ 30     $ 24
Cash refund of income taxes   $ -     $ 10


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 plus share-based payment expense and certain significant non-recurring items that the Company may include from time to time. 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 March 31, 2019 filed with the Securities and Exchange Commission on May 13, 2019.

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, London and Chicago. 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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