Wilhelmina International, Inc. Announces Fourth Quarter and Full Year 2023 Results
- Annual revenues of $17.2 million in 2023.
- Net income of $0.4 million in 2023.
- Highest total cash and cash equivalents of $12.7 million in the company's history.
- Decrease in revenues in 2023 due to lower commissions on talent bookings.
- Net loss of $71 thousand for the three months ended December 31, 2023.
- Decreased revenues in 2023 compared to 2022.
- Net loss of $71 thousand for the three months ended December 31, 2023.
- Operating income decreased by 29.5% in 2023.
- Significant impact on net income in 2022 due to a $1.5 million valuation allowance release on deferred tax assets.
Insights
The reported financial figures indicate a contraction in both quarterly and annual revenues, with a notable year-over-year decrease in net income from $3.5 million to $0.4 million. This sharp decline is concerning and could signal underlying challenges in the company's operations or market conditions. The significant drop in operating income and EBITDA further underscores potential issues with cost management or revenue generation. Investors should consider the sustainability of the company's financial health, especially given the reduction in gross billings, which suggests a decrease in the company's core business activities.
The decrease in revenue and net income is attributed to lower commissions on talent bookings, which raises questions about the company's competitive positioning and market dynamics. The talent agency industry is highly competitive and sensitive to economic fluctuations. The stability of Wilhelmina's client relationships and its ability to adapt to industry trends will be critical for future growth. Additionally, the increase in salaries and service costs despite declining revenues is a red flag that may point to inefficiencies or an investment in strategic hires that have yet to yield returns.
The reduction in corporate overhead, particularly due to the costs of two SEC restatement filings in the prior year not recurring, is a positive sign of potential stabilization in the company's compliance environment. However, increased legal expenses in the first half of the year could indicate ongoing legal challenges or increased regulatory scrutiny. Stakeholders should monitor the company's regulatory filings and any potential legal issues that could impact financial performance or operational capabilities.
Annual Financial Highlights
- Annual revenues of
$17.2 million for 2023. - Annual operating income of
$0.7 million in 2023. - Annual net cash flows provided by operating activities were
$0.7 million in 2023. - Annual pre-tax income of
$0.7 million , net income of$0.4 million and Pre-Corporate EBITDA of$2.0 million for 2023. $12.7 million of combined cash and cash equivalents and short term investments at December 31, 2023 was the highest total at the end of any quarterly or annual period in Company history.- Annual gross billings of
$65.9 million for 2023.
| (in thousands) | Q4 23 | Q4 22 | YOY Change | Year Ended 2023 | Year Ended 2022 | YOY Change |
| Total Revenues | ( | ( | ||||
| Operating (Loss) Income | (117) | (166) | ( | 2,419 | ( | |
| Income (Loss) Before Provision for Taxes | (92) | (214) | ( | 691 | 2,575 | ( |
| Net (Loss) Income | (71) | (18) | 433 | 3,529 | ( | |
| Gross Billings** | 15,115 | 16,233 | ( | 65,936 | 66,686 | ( |
| EBITDA** | (116) | (168) | ( | 830 | 2,776 | ( |
| Adjusted EBITDA** | (61) | (96) | ( | 1,020 | 2,802 | ( |
| Pre-Corporate EBITDA** | 166 | 274 | ( | 1,985 | 3,895 | ( |
| **Non-GAAP measures referenced are detailed in the disclosures at the end of this release. | ||||||
DALLAS, March 26, 2024 (GLOBE NEWSWIRE) -- Wilhelmina International, Inc. (Nasdaq: WHLM) ("Wilhelmina" or the "Company") today reported revenues of
Decreased revenues during the fourth quarter and full year ended December 31, 2023 were primarily due to decreased commissions on talent bookings. In 2022, net income was significantly impacted by the release of a
Financial Results
Net loss for the three months ended December 31, 2023 was
EBITDA was
The following table reconciles the non-GAAP financial measure Gross Billings to GAAP total revenues, for the fourth quarter and year ended December 31, 2023 and 2022.
| (in thousands) | Three months ended December 31, | Year ended December 31, | ||
| 2023 | 2022 | 2023 | 2022 | |
| Total revenues | ||||
| Model costs (1) | 11,352 | 12,142 | 48,724 | 48,906 |
| Gross billings* | 15,115 | |||
| * Non-GAAP measures referenced are detailed in the disclosures at the end of this release. (1) 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 non-GAAP EBITDA, Adjusted EBITDA and Pre-Corporate EBITDA to GAAP net income for the fourth quarter and year ended December 31, 2023 and 2022.
| (in thousands) | Three months ended December 31, | Year ended December 31, | ||
| 2023 | 2022 | 2023 | 2022 | |
| Net income (loss) | ||||
| Interest income | (76) | - | (76) | - |
| Interest expense | 6 | 1 | 7 | 8 |
| Income tax expense (benefit) | (21) | (196) | 258 | (954) |
| Amortization and depreciation | 46 | 45 | 208 | 193 |
| EBITDA* | ||||
| Foreign exchange loss (gain) | 45 | 47 | 106 | (164) |
| Share-based payment expense | 10 | 25 | 84 | 190 |
| Adjusted EBITDA* | ||||
| Corporate overhead | 227 | 370 | 965 | 1,093 |
| Pre-Corporate EBITDA* | ||||
| * 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 and fiscal year ended December 31, 2023, when compared to the three months and fiscal year ended December 31, 2022, were primarily the result of the following:
- Revenues for the three months and fiscal year ended December 31, 2023 decreased
8.0% and3.2% , respectively, primarily due to lower commissions on talent bookings; - Salaries and service costs for the three months ended December 31, 2023 of
$2.8 million was unchanged from the three months ended December 31, 2022. Salaries and service costs for the fiscal year ended December 31, 2023 increased by5.3% 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 months ended December 31, 2023 decreased by
20.2% primarily due to decreased legal expense in the fourth quarter. Office and general expenses for the fiscal year ended December 31, 2023 increased by20.9% , primarily due to increased legal expense during the first half of 2023 and higher rent and other office expenses; - Amortization and depreciation expense for the three months and fiscal year ended December 31, 2023 increased by
2.2% and7.8% , primarily due to depreciation of new capitalized assets in 2023; and - Corporate overhead decreased by
38.6% and11.7% for the three months and fiscal year ended December 31, 2023, primarily due to costs of two SEC restatement filings in 2022 that did not recur in 2023.
| WILHELMINA INTERNATIONAL, INC. AND SUBSIDIARIES | |||||||
| CONSOLIDATED BALANCE SHEETS | |||||||
| (In thousands, except share data) | |||||||
| 2023 | 2022 | ||||||
| ASSETS | |||||||
| Current assets: | |||||||
| Cash and cash equivalents | $ | 6,117 | $ | 11,998 | |||
| Short term investments | 6,596 | - | |||||
| Accounts receivable, net of allowance for doubtful accounts of | 8,505 | 9,467 | |||||
| Prepaid expenses and other current assets | 203 | 181 | |||||
| Total current assets | 21,421 | 21,646 | |||||
| Property and equipment, net of accumulated depreciation of | 320 | 307 | |||||
| Right of use assets-operating | 3,457 | 3,565 | |||||
| Right of use assets-finance | 152 | 138 | |||||
| Trademarks and trade names with indefinite lives | 8,467 | 8,467 | |||||
| Goodwill | 7,547 | 7,547 | |||||
| Other assets | 301 | 322 | |||||
| TOTAL ASSETS | $ | 41,665 | $ | 41,992 | |||
| LIABILITIES AND SHAREHOLDERS’ EQUITY | |||||||
| Current liabilities: | |||||||
| Accounts payable and accrued liabilities | $ | 3,941 | $ | 4,306 | |||
| Due to models | 7,645 | 8,378 | |||||
| Contract liabilities | - | 270 | |||||
| Lease liabilities – operating, current | 712 | 385 | |||||
| Lease liabilities – finance, current | 32 | 62 | |||||
| Total current liabilities | 12,330 | 13,401 | |||||
| Long term liabilities: | |||||||
| Deferred income tax, net | 1,215 | 985 | |||||
| Lease liabilities – operating, non-current | 3,102 | 3,310 | |||||
| Lease liabilities – finance, non-current | 122 | 85 | |||||
| Total long-term liabilities | 4,439 | 4,380 | |||||
| Total liabilities | 16,769 | 17,781 | |||||
| Shareholders’ equity: | |||||||
| Common stock, | |||||||
| issued at December 31, 2023 and December 31, 2022 | 65 | 65 | |||||
| Treasury stock, 1,314,694 shares at December 31, 2023 and December 31, 2022, at cost | (6,371) | (6,371) | |||||
| Additional paid-in capital | 88,854 | 88,770 | |||||
| Accumulated deficit | (57,276) | (57,709) | |||||
| Accumulated other comprehensive loss | (376) | (544) | |||||
| Total shareholders’ equity | 24,896 | 24,211 | |||||
| TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY | $ | 41,665 | $ | 41,992 | |||
| WILHELMINA INTERNATIONAL, INC. AND SUBSIDIARIES | |||||||||||||||
| CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME | |||||||||||||||
| For the Years Ended December 31, 2023 and 2022 | |||||||||||||||
| (In thousands, except per share data) | |||||||||||||||
| Three Months Ended | Year Ended | ||||||||||||||
| December 31, | December 31, | ||||||||||||||
| 2023 | 2022 | 2023 | 2022 | ||||||||||||
| Revenues: | |||||||||||||||
| Service revenues | $ | 3,755 | $ | 4,084 | $ | 17,182 | $ | 17,750 | |||||||
| License fees and other income | 8 | 7 | 30 | 30 | |||||||||||
| Total revenues | 3,763 | 4,091 | 17,212 | 17,780 | |||||||||||
| Operating expenses: | |||||||||||||||
| Salaries and service costs | 2,779 | 2,805 | 11,481 | 10,907 | |||||||||||
| Office and general expenses | 828 | 1,037 | 3,830 | 3,168 | |||||||||||
| Amortization and depreciation | 46 | 45 | 208 | 193 | |||||||||||
| Corporate overhead | 227 | 370 | 965 | 1,093 | |||||||||||
| Total operating expenses | 3,880 | 4,257 | 16,484 | 15,361 | |||||||||||
| Operating (loss) income | (117) | (166) | 728 | 2,419 | |||||||||||
| Other expense (income): | |||||||||||||||
| Foreign exchange loss (gain) | 45 | 47 | 106 | (164) | |||||||||||
| Interest income | (76) | - | (76) | - | |||||||||||
| Interest expense | 6 | 1 | 7 | 8 | |||||||||||
| Total other (income) expense | (25) | 48 | 37 | (156) | |||||||||||
| (Loss) income before provision for income taxes | (92) | (214) | 691 | 2,575 | |||||||||||
| (Provision) benefit for income taxes: | |||||||||||||||
| Current | (42) | 196 | (28) | (109) | |||||||||||
| Deferred | 63 | - | (230) | 1,063 | |||||||||||
| Benefit (provision) for income taxes, net | 21 | 196 | (258) | 954 | |||||||||||
| Net (loss) income | $ | (71) | $ | (18) | $ | 433 | $ | 3,529 | |||||||
| Other comprehensive income (loss): | |||||||||||||||
| Foreign currency translation adjustment | 122 | 343 | 168 | (521) | |||||||||||
| Total comprehensive income | 51 | 325 | 601 | 3,008 | |||||||||||
| Basic net (loss) income per common share | $ | (0.01) | $ | 0.00 | $ | 0.08 | $ | 0.68 | |||||||
| Diluted net (loss) income per common share | $ | (0.01) | $ | 0.00 | $ | 0.08 | $ | 0.68 | |||||||
| 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 | |||||||||||||||||||||||||||||
| CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITY | |||||||||||||||||||||||||||||
| For the Years Ended December 31, 2023 and 2022 | |||||||||||||||||||||||||||||
| (In thousands) | |||||||||||||||||||||||||||||
| Common Shares | Stock Amount | Treasury Shares | Stock Amount | Additional Paid-in Capital | Accumulated Deficit | Accumulated 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 | - | - | - | - | 190 | - | - | 190 | |||||||||||||||||||||
| Net income to common shareholders | - | - | - | - | - | 3,529 | - | 3,529 | |||||||||||||||||||||
| Foreign currency translation | - | - | - | - | - | - | (521 | ) | (521 | ) | |||||||||||||||||||
| Balances at December 31, 2022 | 6,472 | $ | 65 | (1,315 | ) | $ | (6,371 | ) | $ | 88,770 | $ | (57,709 | ) | $ | (544 | ) | $ | 24,211 | |||||||||||
| Share-based payment expense | - | - | - | - | 84 | - | - | 84 | |||||||||||||||||||||
| Net income to common shareholders | - | - | - | - | - | 433 | - | 433 | |||||||||||||||||||||
| Foreign currency translation | - | - | - | - | - | - | 168 | 168 | |||||||||||||||||||||
| Balances at December 31, 2023 | 6,472 | $ | 65 | (1,315 | ) | $ | (6,371 | ) | $ | 88,854 | $ | (57,276 | ) | $ | (376 | ) | $ | 24,896 | |||||||||||
| WILHELMINA INTERNATIONAL, INC. AND SUBSIDIARIES | ||||||||||||
| CONSOLIDATED STATEMENTS OF CASH FLOW | ||||||||||||
| For the Years Ended December 31, 2023 and 2022 | ||||||||||||
| (In thousands) | ||||||||||||
| Year Ended | ||||||||||||
| 2023 | 2022 | |||||||||||
| Cash flows from operating activities: | ||||||||||||
| Net income | $ | 433 | $ | 3,529 | ||||||||
| Adjustments to reconcile net income to net cash provided by operating activities: | ||||||||||||
| Amortization and depreciation | 208 | 193 | ||||||||||
| Share based payment expense | 84 | 190 | ||||||||||
| Loss (gain) on foreign exchange rates | 106 | (164) | ||||||||||
| Deferred income taxes | 230 | (1,063) | ||||||||||
| Bad debt expense | 139 | 174 | ||||||||||
| Changes in operating assets and liabilities: | ||||||||||||
| Accounts receivable | 647 | (747) | ||||||||||
| Prepaid expenses and other current assets | (22) | (98) | ||||||||||
| Right of use assets-operating | 687 | 500 | ||||||||||
| Other assets | 21 | (227) | ||||||||||
| Due to models | (733) | 398 | ||||||||||
| Lease liabilities-operating | (460) | (470) | ||||||||||
| Contract liabilities | (270) | (211) | ||||||||||
| Accounts payable and accrued liabilities | (365) | 515 | ||||||||||
| Net cash provided by operating activities | 705 | 2,519 | ||||||||||
| Cash flows from investing activities: | ||||||||||||
| Purchases of property and equipment | (165) | (268) | ||||||||||
| Purchases of short term investments | (7,006) | - | ||||||||||
| Maturities of short term investments | 480 | - | ||||||||||
| Net cash used in investing activities | (6,691) | (268) | ||||||||||
| Cash flows from financing activities: | ||||||||||||
| Payments on finance leases | (63) | (62) | ||||||||||
| Net cash used in financing activities | (63) | (62) | ||||||||||
| Foreign currency effect on cash flows: | 168 | (442) | ||||||||||
| Net change in cash and cash equivalents: | (5,881) | 1,747 | ||||||||||
| Cash and cash equivalents, beginning of year | 11,998 | 10,251 | ||||||||||
| Cash and cash equivalents, end of year | $ | 6,117 | $ | 11,998 | ||||||||
| Supplemental disclosures of cash flow information: | ||||||||||||
| Cash paid for income taxes | $ | 156 | $ | 268 | ||||||||
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 amount billed to customers on behalf of its models and talent for services performed. The Company calculates EBITDA as net income plus interest income, 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 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-K Filing
Additional information concerning the Company's results of operations and financial position is included in the Company's Form 10-K for the fiscal year ended December 31, 2023 filed with the Securities and Exchange Commission on March 26, 2024.
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 may include 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 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 |
FAQ
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