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Wilhelmina International, Inc. Reports Results for First Quarter 2022
Source: Nasdaq GlobeNewswire / 11 May 2022 15:15:00 America/Chicago
First Quarter Financial Results
(in thousands)
Q1 2022
Q1 2021YOY
ChangeTotal Revenues $ 16,645 $ 11,976 39.0 % 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** 988 369 167.8 % Pre-Corporate EBITDA** 1,242 614 102.3 % * 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cities where Wilhelmina operates reopened and business activity increased as COVID-19 restrictions were moderated or rescinded.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,
2022December 31,
2021ASSETS 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
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 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 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
- 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;