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Wilhelmina International, Inc. Reports Results for First Quarter 2024

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Wilhelmina International (Nasdaq: WHLM) reported its first-quarter 2024 financial results, showing a decline in overall performance. Revenues dropped to $4.2 million, a 7% decrease from Q1 2023. Net income fell to $0.1 million, or $0.02 per diluted share, compared to $0.2 million, or $0.03 per diluted share, from the previous year. The drop in revenues was attributed to decreased commissions in the company’s core modeling and Aperture divisions. Operating income saw a significant decline of 68.1% to $73,000. Additionally, Gross Billings fell by 10% to $15.8 million. The company experienced a 58% drop in EBITDA and a 57.9% decline in Adjusted EBITDA. While office and general expenses decreased by 22.7%, salaries and service costs rose by 3.0%. Corporate overhead expenses also increased by 3.7%.

Positive
  • Office and general expenses decreased by 22.7%, primarily due to reduced legal, computer, and other office-related expenses.
  • Amortization and depreciation expenses decreased by 13.7% due to reduced depreciation of fully amortized assets.
  • Foreign currency translation adjustment showed a gain of $30,000.
Negative
  • Total revenues decreased by 7.0%, primarily due to lower commissions in the core modeling and Aperture divisions.
  • Net income fell by 42.8% to $91,000, or $0.02 per diluted share.
  • Operating income dropped by 68.1% to $73,000.
  • Gross Billings decreased by 10% to $15.8 million.
  • EBITDA decreased by 58%, and Adjusted EBITDA declined by 57.9%.
  • Pre-Corporate EBITDA fell by 30.5% to $381,000.
  • Salaries and service costs increased by 3.0%, mainly due to new hires and payroll changes.
  • Corporate overhead expenses increased by 3.7%, primarily due to higher legal costs.

Insights

Wilhelmina International's revenues have declined by 7% year-over-year, reaching $4.2 million for Q1 2024, down from $4.5 million in Q1 2023. This decrease is primarily attributed to lower commissions in core divisions. Noteworthy, the company's operating income has plummeted by 68% to $73,000 from $229,000 in the same period last year, which raises concerns about operational efficiency.

The net income also shows a significant drop of 43%, from $159,000 to $91,000. This downward trend indicates struggles in maintaining bottom-line growth. The EBITDA and Adjusted EBITDA figures further underscore this, both declining by over 50%, pointing towards mounting operational and financial challenges.

Reduced office and general expenses by 22.7% due to lower legal and computer expenses is a positive aspect, showing some cost control measures. However, the increased salaries and service costs by 3% reflect higher staffing and payroll expenses, which may not be sustainable if revenue growth remains stagnant.

From a balance sheet perspective, the decrease in cash and cash equivalents to $4.7 million from $6.1 million at the year's end indicates potential liquidity concerns. The accounts payable and amounts due to models have also decreased, suggesting some reduction in short-term liabilities.

Investors should monitor the company's ability to reverse revenue decline and improve margins. The decline in key profitability metrics, amidst cost controls, suggests mixed operational focus which could impact long-term growth prospects.

The quarter's performance highlights a softening in Wilhelmina International's core business, with a notable revenue decline in its modeling and Aperture divisions. This aligns with broader industry trends where traditional modeling agencies face disruption from influencers and digital platforms. The Gross Billings drop of 10% further emphasizes reduced client engagements and bookings, which may indicate shifting market dynamics and competitive pressures.

The company's strategy to align staffing with regional needs, despite generating increased service costs, reflects an attempt to retain competitiveness. This could be advantageous in the long-term if the adjustments lead to higher client satisfaction and retention.

The foreign exchange loss and interest income components indicate some financial management issues that need to be addressed to stabilize earnings. Additionally, the industry shift towards digital media and the role of social media influencers might be areas where Wilhelmina could innovate to regain market share.

Retail investors should consider the broader industry shifts and how Wilhelmina plans to adapt, evaluating the firm's long-term strategic adjustments to stay relevant in a digital-first world.

(in thousands) Q1 2024 Q1 2023YOY
Change
 
Total Revenues$4,171$4,484(7.0%)
Operating Income 73 229(68.1%)
Income Before Provision for Taxes 149 210(29.0%)
Net Income 91 159(42.8%)
Gross Billings* 15,824 17,587(10.0%)
EBITDA* 110 262(58.0%)
Adjusted EBITDA* 128 304(57.9%)
Pre-Corporate EBITDA* 381 548(30.5%)

* Non-GAAP measures referenced are detailed in the disclosures at the end of this release.

DALLAS, May 16, 2024 (GLOBE NEWSWIRE) -- Wilhelmina International, Inc. (Nasdaq:WHLM) ("Wilhelmina" or the "Company") today reported revenues of $4.2 million and net income of $0.1 million for the three months ended March 31, 2024, compared to revenues of $4.5 million and net income of $0.2 million for the three months ended March 31, 2023. Decreased revenues in 2024 were primarily due to decreased commissions on bookings in the Company’s core modeling and Aperture divisions.

Financial Results

Net income for the three months ended March 31, 2024 was $0.1 million, or $0.02 per fully diluted share, compared to net income of $0.2 million, or $0.03 per fully diluted share, for the three months ended March 31, 2023.

Pre-Corporate EBITDA was $0.4 million for the three months ended March 31, 2024, compared to Pre-Corporate EBITDA of $0.5 million for the three months ended March 31, 2023.

The following table reconciles reported total revenues under generally accepted accounting principles to Gross Billings, for the first quarter ended March 31, 2024 and 2023.

(in thousands) Three months ended
March 31,

  2024 2023
Total revenues$4,171$4,484
Model costs 11,653 13,103
Gross billings* 15,824 17,587
*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 months ended March 31, 2024 and 2023.

  
(in thousands)Three months ended
March 31,
  2024 2023
Net income$91$159
Interest income (86) -
Interest expense 3 1
Income tax expense 58 51
Amortization and depreciation 44 51
EBITDA* 110  262
Foreign exchange loss  18
Share-based payment expense  11  24
Adjusted EBITDA*  128  304
Corporate overhead  253  244
Pre-Corporate EBITDA*  381  548
*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, 2024, when compared to the three months ended March 31, 2023, were primarily the result of the following:

  • Total revenues for the three months ended March 31, 2024 decreased by 7.0% due to decreased commissions on bookings in the Company’s core modeling and Aperture divisions;
  • Salaries and service costs for the three ended March 31, 2024 increased by 3.0% 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 March 31, 2024 decreased by 22.7% primarily due to decreased legal expense, computer expenses, and other office related expenses;
  • Amortization and depreciation expense for the three months ended March 31, 2024 decreased by 13.7%, primarily due to reduced depreciation of assets that became fully amortized in 2023; and
  • Corporate overhead expenses for the three months ended March 31, 2024 increased by 3.7%, primarily due to increased legal costs.
WILHELMINA INTERNATIONAL, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands, except share data)
 (Unaudited) 
March 31, December 31,
 2024  2023 
ASSETS   
Current assets:   
Cash and cash equivalents$4,734 $6,117 
Short term investments 6,670  6,596 
Accounts receivable, net of allowance for doubtful accounts of $1,777 and $1,901,   
respectively 8,585  8,505 
Prepaid expenses and other current assets 228  203 
Total current assets 20,217  21,421 
       
Property and equipment, net of accumulated depreciation of $568 and $534, respectively 291  320 
Right of use assets-operating 3,285  3,457 
Right of use assets-finance 143  152 
Trademarks and trade names with indefinite lives 8,467  8,467 
Goodwill 7,547  7,547 
Other assets 301  301 
       
TOTAL ASSETS$40,251 $41,665 
       


LIABILITIES AND SHAREHOLDERS’ EQUITY
   
Current liabilities:   
Accounts payable and accrued liabilities$3,722 $3,941 
Due to models 6,528  7,645 
Lease liabilities – operating, current 727  712 
Lease liabilities – finance, current 33  32 
Total current liabilities 11,010  12,330 


Long term liabilities:
   
Deferred income tax, net 1,261  1,215 
Lease liabilities – operating, non-current 2,898  3,102 
Lease liabilities – finance, non-current 114  122 
Total long term liabilities 4,273  4,439 


Total liabilities
 

15,283
  

16,769
 


Shareholders’ equity:
   
Common stock, $0.01 par value, 9,000,000 shares authorized; 6,472,038 shares issued   
at March 31, 2024 and December 31, 2023 65  65 
Treasury stock, 1,314,694 shares at March 31, 2024 and December 31, 2023, at cost (6,371) (6,371)
Additional paid-in capital 88,865  88,854 
Accumulated deficit (57,185) (57,276)
Accumulated other comprehensive loss (406) (376)
Total shareholders’ equity 24,968  24,896 
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY

$
40,251 
$


41,665
 
       


WILHELMINA INTERNATIONAL, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME
For the Three Months Ended March 31, 2024 and 2023
(In thousands, except per share data)

(Unaudited)
 Three Months Ended
March 31,
  2024  2023 
Revenues:      
Service revenues$4,163 $4,476 
License fees and other income 8  8 
Total revenues
 4,171  4,484 
       
Operating expenses:      
Salaries and service costs 2,966  2,880 
Office and general expenses 835  1,080 
Amortization and depreciation 44  51 
Corporate overhead 253  244 
Total operating expenses 4,098  4,255 
Operating income 73  229 
       
Other expense (income):      
Foreign exchange loss 7  18 
Interest income (86)  
Interest expense 3  1 
Total other (income) expense (76) 19 
       
Income before provision for income taxes 149  210 
       
Provision for income taxes:      
Current (12) (56)
Deferred (46) 5 
Provision for income taxes, net (58) (51)
       
Net income 91  159 
       
Other comprehensive loss:      
Foreign currency translation adjustment (30) 86 
Total comprehensive income$     61 $245 
Basic net income per common share$       0.02 $
     0.03
 
Diluted net income per common share$0.02 $0.03 
       
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, 2024 and 2023
(In thousands)
(Unaudited)
 Common
Shares
 Stock
Amount
 Treasury
Shares
  Stock
Amount
  Additional
Paid-in

Capital
 Accumulated
Deficit
  Accumulated
Other
Comprehensive
 
Income (Loss)   
  Total  
Balances at December 31, 20226,472$65(1,315)$(6,371)$88,770$(57,709)$(544)$24,211 
Share based payment expense     24     24 
Net income to common shareholders      159    159 
Foreign currency translation          86  86 
Balances at March 31, 20236,472 $65 (1,315)$(6,371)$88,794 $(57,550)$(458)$24,480 
                               
 Common
Shares
 Stock
Amount
 Treasury
Shares
  Stock
Amount
  Additional
Paid-in
Capital
 Accumulated
 Deficit
  Accumulated
Other
Comprehensive
 
Income (Loss)
  Total  
            
Balances at December 31, 2023
6,472
$65 (1,315)
 $ (6,371)
 $ 88,854
$   (57,276)
 $ (376)
 $ 24,896
 
Share based payment expense      11     11 
Net income to common shareholders      91    91 
Foreign currency translation        (30) (30)
Balances at March 31, 20246,472$65 (1,315)$(6,371)$88,865$(57,185)$(406)$24,968 
                    


WILHELMINA INTERNATIONAL, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOW
For the Three Months Ended March 31, 2024 and 2023
(In thousands)

(Unaudited)
 Three Months Ended March 31,
  2024  2023
Cash flows from operating activities:     
Net income$91 $159 
Adjustments to reconcile net income to net cash used in operating activities:     
Amortization and depreciation 44  51 
Share based payment expense 11  24 
Loss on foreign exchange rates 7  15 
Deferred income taxes 46  (5)
Bad debt expense 29  45 
Changes in operating assets and liabilities:     
Accounts receivable (191) (312)
Prepaid expenses and other current assets (25) (117)
Right of use assets-operating 172  205 
Other assets   15 
Due to models (1,116) (621)
Lease liabilities - operating (190) (91)
Lease liabilities - finance 25   
Contract liabilities   (270)
Accounts payable and accrued liabilities (219) (233)
Net cash (used in) operating activities (1,316) (1,135)
   
Cash flows from investing activities:  
Purchases of property and equipment (6) (73)
Purchases of short term investments (6,149)  
Maturities of short term investments 6,150   
Net cash used in investing activities (5) (73)


Cash flows from financing activities:
  
Payments on finance leases (32) (15)
Net cash used in financing activities (32) (15)
       
Foreign currency effect on cash flows: (30) 86 
       
Net change in cash and cash equivalents: (1,383) (1,137)
Cash and cash equivalents, beginning of period 6,117  11,998 
Cash and cash equivalents, end of period$4,734 $  10,861 
       
Supplemental disclosures of cash flow information:    
Cash paid for income taxes$7 $ 
       

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 three months ended March 31, 2024 and 2023. 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, 2024 filed with the Securities and Exchange Commission on May 15, 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 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 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

What were Wilhelmina International's Q1 2024 total revenues?

Wilhelmina International reported total revenues of $4.2 million for Q1 2024.

How did Wilhelmina International's Q1 2024 net income compare to Q1 2023?

Net income for Q1 2024 was $0.1 million, compared to $0.2 million in Q1 2023.

What caused the decrease in Wilhelmina International's Q1 2024 revenues?

The decrease in revenues was primarily due to lower commissions in the company’s core modeling and Aperture divisions.

What was Wilhelmina International's operating income for Q1 2024?

Operating income for Q1 2024 was $73,000.

How much did Wilhelmina International's EBITDA decrease in Q1 2024?

Wilhelmina International's EBITDA decreased by 58% in Q1 2024.

What was the percentage decline in Wilhelmina International's Adjusted EBITDA for Q1 2024?

Adjusted EBITDA declined by 57.9% in Q1 2024.

What were the main reasons for the increase in Wilhelmina International's salaries and service costs in Q1 2024?

The increase was primarily due to personnel hires and payroll changes.

How much did Wilhelmina International's gross billings decrease in Q1 2024?

Gross Billings decreased by 10% to $15.8 million in Q1 2024.

What were Wilhelmina International's corporate overhead expenses for Q1 2024?

Corporate overhead expenses for Q1 2024 were $253,000.

What was Wilhelmina International's Pre-Corporate EBITDA for Q1 2024?

Pre-Corporate EBITDA for Q1 2024 was $381,000.

Wilhelmina International, Inc

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