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CST: 12/12/2019 16:04:59   

Wilhelmina International, Inc. Reports Results for Second Quarter 2019

121 Days ago

Second Quarter Financial Results

 
(in thousands)
Q2 19

Q2 18
YOY
Change
Q2 19
 YTD
Q2 18
 YTD
YOY
Change
Total Revenues $   19,945 $ 20,596 (3.2 %) $   40,004 $   40,312 (0.8 %)
Operating Income   620   522 18.8 %   637   886 (28.1 %)
Income Before Provision for Taxes   602   473 27.3 %   572   792 (27.8 %)
Net Income   451   364 23.9 %   342   589 (41.9 %)
EBITDA**    930   734 26.7 %   1,222   1,314 (7.0 %)
Adjusted EBITDA**   970   848 14.4 %   1,341   1,557 (13.9 %)
Pre-Corporate EBITDA**   1,221   1,108 10.2 %   1,924   2,154 (10.7 %)
 **Non-GAAP measures referenced are detailed in the disclosures at the end of this release.

DALLAS, Aug. 13, 2019 (GLOBE NEWSWIRE) -- Wilhelmina International, Inc. (Nasdaq:WHLM) ("Wilhelmina" or the "Company") today reported revenues of $19.9 million and net income of $0.5 million for the three months ended June 30, 2019, compared to revenues of $20.6 million and net income of $0.4 million for the three months ended June 30, 2018.  For the six months ended June 30, 2019, Wilhelmina reported revenues of $40.0 million and net income of $0.3 million compared to revenue of $40.3 million and net income of $0.6 million for the six months ended June 30, 2018. The decrease in revenues when compared to the same periods of the prior year was primarily due to a decrease in bookings in the Wilhelmina Studios division. For the three months ended June 30, 2019 compared to the three months ended June 30, 2018, operating income, EBITDA, Adjusted EBITDA, and Pre-Corporate EBITDA increased, primarily due to decreased model costs and decreased office and general expenses, partially offset by an increase in salaries and service costs.  For the six months ended June 30, 2019 compared to the six months ended June 30, 2018, operating income, EBITDA, Adjusted EBITDA, and Pre-Corporate EBITDA decreased primarily due to decreased revenue and increased salaries and service costs, partially offset by decreased office and general expenses.

“Wilhelmina delivered a solid second quarter of 2019, increasing year-over-year operating income and EBITDA. The company is energized as we enter the second half of 2019 focused on building brand awareness, developing diverse talent, and expanding our commercial and production businesses.” – Bill Wackermann, CEO, Wilhelmina

Financial Results

Net income for the three and six months ended June 30, 2019 was $0.5 million and $0.3 million, or $0.09 and $0.07 per fully diluted share, compared to net income of $0.4 million and $0.6 million, or $0.07 and $0.11 per fully diluted share, for the three and six months ended June 30, 2018.

Pre-Corporate EBITDA was $1.2 million and $1.9 million for the three and six months ended June 30, 2019, compared to $1.1 million and $2.2 million for the three and six months ended June 30, 2018. 

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, 2019 and 2018.

   
(in thousands) Three months ended
June 30,
  Six months ended
June 30,

    2019     2018     2019   2018
Net income $   451   $   364     342 $   589
Interest expense   30     22     62   47
Income tax expense   151     109     230   203
Amortization and depreciation   298     239     588   475
EBITDA** $   930   $  734    $   1,222 $    1,314
Foreign exchange (gain) loss   (12 )   27     3   47
Share-based payment expense   52     87     116   196
Adjusted EBITDA**   $   970   $      848   $   1,341 $    1,557
Corporate overhead   251     260     583   597
Pre-Corporate EBITDA**   $   1,221   $    1,108   $   1,924 $   2,154

**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, 2019, when compared to the three months ended June 30, 2018, were primarily the result of the following:

  • Revenues net of model costs for the three months ended June 30, 2019 increased by 1.7% primarily due to a decrease in model costs.  Revenues net of model costs for the six months ended June 30, 2019 decreased by 1.7%, due to decreased bookings in the Wilhelmina Studios division;
     
  • Salaries and service costs for the three and six months ended June 30, 2019 increased by 3.4% and 3.9% primarily due to an increase in employee salaries, partially offset by a reduction in share based payment expense;
     
  • Office and general expenses for the three and six months ended June 30, 2019 decreased by 13.9% and 12.3%, 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 for the three and six months ended June 30, 2019 increased by 24.7% and 23.8%, 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 for the three and six months ended June 30, 2019 decreased by 3.5% and 2.3%, primarily due to lower securities compliance costs.


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

      (Unaudited)    
      June 30 ,
2019
   December 31 ,
 2018
ASSETS        
Current assets:        
  Cash and cash equivalents   $ 6,003     $ 6,748  
  Accounts receivable, net of allowance for doubtful accounts of $1,768 and $1,791, respectively     12,838       11,901  
  Prepaid expenses and other current assets     306       197  
  Total current assets     19,147       18,846  
             
Property and equipment, net of accumulated depreciation of $3,772 and $3,264, respectively     2,266       2,567  
Right of use assets-operating     1,867       -  
Right of use assets-finance     156       -  
Trademarks and trade names with indefinite lives      8,467       8,467  
Other intangibles with finite lives, net of accumulated amortization of $8,708 and $8,684, respectively     29       53  
Goodwill     13,192       13,192  
Other assets     114       114  
             
TOTAL ASSETS   $ 45,238     $ 43,239  
             
LIABILITIES AND SHAREHOLDERS’ EQUITY             
Current liabilities:            
  Accounts payable and accrued liabilities   $ 4,417     $ 5,071  
  Due to models     9,213       8,809  
  Lease liabilities – operating, current     1,143       -  
  Lease liabilities – finance, current     114       -  
  Term loan – current     726       623  
  Total current liabilities     15,613       14,503  
             
Long term liabilities:            
  Net deferred income tax liability     709       631  
  Lease liabilities – operating, non-current     880       -  
  Lease liabilities – finance, non-current     52       -  
  Term loan – non-current     1,625       2,000  
  Total long term liabilities     3,266       2,631  
             
Total liabilities     18,879       17,134  
             
Shareholders’ equity:            
  Common stock, $0.01 par value, 9,000,000 shares authorized; 6,472,038 shares            
   issued at June 30, 2019 and December 31, 2018     65       65  
  Treasury stock, 1,292,620 and 1,264,154 shares at June 30, 2019 and December 31, 2018, at cost     (6,266 )     (6,093 )
  Additional paid-in capital     88,371       88,255  
  Accumulated deficit     (55,687 )     (56,029 )
  Accumulated other comprehensive loss     (124 )     (93 )
Total shareholders’ equity     26,359       26,105  
             
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY   $ 45,238     $ 43,239  
                 

WILHELMINA INTERNATIONAL, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME
For the Three and Six Months Ended June 30, 2019 and 2018
 (In thousands, except per share data)
(Unaudited)

    Three Months Ended   Six Months Ended
    June 30,    June 30, 
    2019     2018     2019     2018  
Revenues:                
Service revenues   $ 19,940     $ 20,580     $ 39,975     $ 40,282  
License fees and other income     5       16       29       30  
Total revenues     19,945       20,596       40,004       40,312  
                         
Model costs     14,156       14,905       28,632       28,747  
                         
Revenues, net of model costs     5,789       5,691       11,372       11,565  
                         
Operating expenses:                        
Salaries and service costs     3,589       3,472       7,305       7,031  
Office and general expenses     1,031       1,198       2,259       2,576  
Amortization and depreciation     298       239       588       475  
Corporate overhead     251       260       583       597  
Total operating expenses     5,169       5,169       10,735       10,679  
Operating income     620       522       637       886  
                         
Other expense:                        
  Foreign exchange gain (loss)     12       (27 )     (3 )     (47 )
  Interest expense     (30 )     -       (62 )     -  
  Total other expense     (18 )     (49 )     (65 )     (94 )
                         
Income before provision for income taxes      602       473       572       792  
                         
Provision for income taxes: expense                        
  Current     (89 )     (56 )     (152 )     (140 )
  Deferred     (62 )     (53 )     (78 )     (63 )
  Income tax expense     (151 )     (109 )     (230 )     (203 )
                         
 Net income   $ 451     $ 364     $ 342     $ 589  
                         
Other comprehensive expense:                        
  Foreign currency translation expense     (59 )     (75 )     (31 )     (32 )
  Total comprehensive income     392       289       311       557  
                         
Basic net income per common share   $ 0.09     $ 0.07     $ 0.07     $ 0.11  
Diluted net income per common share   $ 0.09     $ 0.07     $ 0.07     $ 0.11  
                         
Weighted average common shares outstanding-basic     5,187       5,375       5,196       5,378  
Weighted average common shares outstanding-diluted     5,187       5,375       5,196       5,378  
                                 

WILHELMINA INTERNATIONAL, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITY
For the Three and Six Months Ended June 30 , 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  
Share based payment expense   -     -   -       -       87       -       -       87  
Net income to common shareholders   -     -   -       -       -       364       -       364  
Purchases of treasury stock   -     -   (7 )     (46 )     -       -       -       (46 )
Foreign currency translation   -     -   -       -       -       -       (75 )     (75 )
Balances at June 30, 2018   6,472   $ 65   (1,103 )   $ (4,975 )   $ 88,088     $ (56,296 )   $ (28 )   $ 26,854  


  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 income 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  
Share based payment expense   -     -   -       -       52       -       -       52  
Net income to common shareholders   -     -   -       -       -       451       -       451  
Purchases of treasury stock   -     -   (25 )     (149 )     -       -       -       (149 )
Foreign currency translation   -     -   -       -       -       -       (59 )     (59 )
Balances at June 30, 2019   6,472   $ 65   (1,293 )   $ (6,266 )   $ 88,371     $ (55,687 )   $ (124 )   $ 26,359  

The accompanying notes are an integral part of these consolidated financial statements.


WILHELMINA INTERNATIONAL, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOW
For the Three and Six Months Ended June 30 , 2019 and 2018
 (In thousands)
(Unaudited)

  Six Months Ended
June 30,
    2019     2018  
Cash flows from operating activities:      
Net income: $ 342     $ 589  
Adjustments to reconcile net income to net cash used in operating activities:          
  Amortization and depreciation   588       475  
  Share based payment expense   116       196  
  Deferred income taxes   78       63  
  Bad debt expense    24       75  
Changes in operating assets and liabilities:          
  Accounts receivable   (961 )     (1,543 )
  Prepaid expenses and other current assets   (109 )     (139 )
  Right of use assets-operating   537         -  
  Right of use assets-finance   54       -  
  Other assets   -       10  
  Due to models   404       400  
  Lease liabilities-operating   (579 )     -  
  Lease liabilities-finance   (47 )     -  
  Accounts payable and accrued liabilities   (445 )     812  
Net cash from operating activities   2       938  
           
Cash flows used in investing activities:          
  Purchases of property and equipment   (207 )     (204 )
Net cash used in investing activities   (207 )     (204 )
           
Cash flows used in financing activities:          
  Purchases of treasury stock   (173 )     (82 )
  Payments on finance leases   (64 )     -  
  Repayment of term loan   (272 )     (259 )
Net cash used in financing activities   (509 )     (341 )
           
Foreign currency effect on cash flows:   (31 )     (32 )
           
Net change in cash and cash equivalents:   (745 )     361  
  Cash and cash equivalents, beginning of period   6,748       4,256  
  Cash and cash equivalents, end of period $ 6,003     $ 4,617  
           
Supplemental disclosures of cash flow information:          
  Cash paid for interest $ 60     $ 46  
  Cash paid (refund) of income taxes $ 5     $ (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 June 30, 2019 filed with the Securities and Exchange Commission on August 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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