Wilhelmina International, Inc. (Nasdaq:WHLM) ("Wilhelmina" or the
"Company") today reported revenues of $10.5 million and net income
of $22 thousand for the three months ended September 30, 2020,
compared to revenues of $17.2 million and net loss of $0.2 million
for the three months ended September 30, 2019. For the nine months
ended September 30, 2020, Wilhelmina reported revenues of $29.6
million and net loss of $5.3 million compared to revenue of $57.2
million and net income of $0.2 million for the nine months ended
September 30, 2019. During the three and nine months of 2020, the
novel coronavirus (COVID-19) pandemic had a material impact on
revenues. The decrease in revenues when compared to the same
periods of the prior year was primarily due to postponement and
cancellation of bookings by many of Wilhelmina’s customers while
non-essential business activities were barred in the cities where
the Company operates, as well as the closure of the Wilhelmina
Studios division in the fourth quarter of 2019. The increase in net
income for the third quarter of 2020 was due to a reduction in
operating expenses from the Company’s cost savings initiatives,
partially offset by lower revenue net of model costs. The increase
in loss for the nine months ended September 30, 2020 was primarily
due to the decrease in revenues net of model costs, partially
offset by a decrease in operating expenses.
COVID-19 Pandemic
On March 11, 2020, the World Health Organization
declared the outbreak of novel coronavirus (COVID-19) as a
pandemic, which has spread rapidly throughout the United States and
the world. The Company’s revenues are heavily dependent on the
level of economic activity in the United States and the United
Kingdom, particularly in the fashion, advertising and publishing
industries, all of which have been negatively impacted by the
pandemic and may not recover as quickly as other sectors of the
economy. There have been mandates from federal, state, and local
authorities requiring forced closures of non-essential businesses.
As a result, beginning in March 2020, the Company has seen a
significant reduction in customer bookings, resulting in a negative
impact to revenue and earnings. During the third quarter of 2020,
bookings increased from the preceding months, but remained
significantly below pre-pandemic levels.
In addition to reduced revenue, business
operations have been adversely affected by reductions in
productivity, limitations on the ability of customers to make
timely payments, disruptions in talents’ ability to travel to
needed locations, and supply chain disruptions impeding clothing or
footwear wardrobe from reaching destinations for photoshoots and
other bookings. Many of the Company’s customers are large retail
and fashion companies, which have had to close stores in the United
States and internationally due to orders from local authorities to
help slow the spread of COVID-19. Some of these customers have
filed for bankruptcy in 2020 and others may be unable to pay
amounts already owed to the Company, resulting in increased future
bad debt expense. These customers also may not emerge from the
pandemic with the financial ability, or need, to purchase
Wilhelmina’s services to the extent that they did in previous
years. Some of our model talent have been quarantined with family
far from the major cities where Wilhelmina’s offices are located,
and also away from where most modeling jobs take place. Many U.S.
and international airlines have decreased their flight schedules
which, as economic activities resumes and clients increase booking
requests, may make it difficult for our talent to be available when
and where they are needed. While these disruptions are currently
expected to be temporary, there continues to be uncertainty around
the duration.
Postponed and cancelled bookings related to the
pandemic contributed significantly to reduced revenues and
increased operating losses during the first nine months of 2020.
Although some clients increased activity and bookings during the
third quarter of 2020, rising COVID-19 infection rates in cities
where Wilhelmina operates could lead to a slower economic recovery
in those markets, and possible additional business closings or
local mandates that could slow the recovery in our operations
there. Since Wilhelmina extends customary payment terms to its
clients, even as bookings resume, there is likely to be a lag
before significant cash collections return. In the meantime, the
Company continues to have significant employee, office rent, and
other expenses.
Reduced outstanding accounts receivable
available as collateral under the Company’s credit agreement with
Amegy Bank has limited access to additional financing. Net losses
in recent periods have also impacted compliance with the financial
covenants under the Amegy Bank credit agreement, further impeding
the Company’s ability to obtain additional financing. Since the
pandemic began, many stock markets, including Nasdaq Capital Market
where Wilhelmina’s common stock is listed, have been volatile. A
further decline in the Company’s stock price would reduce our
market capitalization and could require additional goodwill or
intangible asset impairment writedowns.
The Company has taken the following actions to
address the impact of COVID-19 and the current recessionary
environment, in order to efficiently manage the business and
maintain adequate liquidity and maximum flexibility:
- In April 2020, obtained
approximately $2.0 million in loans under the Paycheck Protection
Program (the “PPP”) of the Coronavirus Aid, Relief, and Economic
Security Act (the “CARES Act”) administered by the U.S. Small
Business Administration (“SBA”).
- Eliminated discretionary travel and
entertainment expenses.
- Suspended share repurchases.
- Did not renew the leases on three
New York City model apartments when the terms ended in June and
August, 2020.
- Suspended efforts to fill two
highly compensated executive roles following the resignation of the
Company’s Chief Executive Officer and Vice President in early
2020.
- Obtained from the landlord of the
Company’s New York City office a deferral of $41 thousand in July
2020 rent until January 2021.
- Negotiated discounts with various
vendors and service providers, in effect through the remainder of
2020.
- Effective July 1, 2020, implemented
layoffs of approximately 36% of its staff, including employees at
each of the Company’s five offices, and effected temporary salary
reductions for the remaining staff. The salary reductions are
expected to return to full salaries when business conditions
improve.
If the quarantines and limitations on
non-essential work are re-implemented, or persist for an extended
period, the Company may need to implement additional cost savings
measures.
Financial
Results
Net income for the three months ended September
30, 2020 was $22 thousand, or $0.00 per fully diluted share,
compared to net loss of $0.2 million, or $0.03 per fully diluted
share, for the three months ended September 30, 2019. Net loss for
the nine months ended September 30, 2020 was $5.3 million, or $1.03
per fully diluted share, compared to net income of $0.2 million, or
$0.03 per fully diluted share, for the nine months ended September
30, 2019.
Pre-Corporate EBITDA was $0.6 million and ($2.3)
million for the three and nine months ended September 30, 2020,
compared to Pre-Corporate EBITDA of $0.5 million and $2.4 million
for the three and nine months ended September 30,
2019.
The following table reconciles reported net
income under generally accepted accounting principles to EBITDA,
Adjusted EBITDA and Pre-Corporate EBITDA for the three and nine
months ended September 30, 2020 and 2019.
(in thousands) |
Three months
ended September 30, |
Nine months
endedSeptember 30, |
|
|
2020 |
|
|
2019 |
|
|
2020 |
|
|
2019 |
Net income (loss) |
$ |
22 |
|
$ |
(166 |
) |
$ |
(5,338 |
) |
$ |
176 |
Interest expense |
|
21 |
|
|
27 |
|
|
71 |
|
|
89 |
Income tax expense (benefit) |
|
85 |
|
|
(7 |
) |
|
667 |
|
|
223 |
Amortization and depreciation |
|
294 |
|
|
297 |
|
|
886 |
|
|
885 |
EBITDA** |
$ |
422 |
|
$ |
151 |
|
$ |
(3,714 |
) |
$ |
1,373 |
Foreign exchange gain |
|
(14 |
) |
|
(3 |
) |
|
(65 |
) |
|
- |
Non-recurring items – goodwill impairment |
|
- |
|
|
- |
|
|
800 |
|
|
- |
Share-based payment expense |
|
3 |
|
|
49 |
|
|
13 |
|
|
165 |
Adjusted EBITDA** |
$ |
411 |
|
$ |
197 |
|
$ |
(2,966 |
) |
$ |
1,538 |
Corporate overhead |
|
145 |
|
|
251 |
|
|
692 |
|
|
834 |
Pre-Corporate EBITDA** |
$ |
556 |
|
$ |
448 |
|
$ |
(2,274 |
) |
$ |
2,372 |
|
**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 nine months ended
September 30, 2020, when compared to the three and nine months
ended September 30, 2019, were primarily the result of the
following:
-
Revenues net of model costs for the three and nine months ended
September 30, 2020 decreased by 36.2% and 49.8% primarily due to
postponed and cancelled bookings resulting from COVID-19, as well
as the closure of the Wilhelmina Studios division in the fourth
quarter of 2019;
-
Salaries and service costs for the three and nine months ended
September 30, 2020 decreased by 49.4% and 28.4% primarily due to
the closure of the Wilhelmina Studios division during the fourth
quarter of 2019, employee layoffs in July 2020, temporary
reductions in staff salaries, open positions for two executives
that resigned in January 2020, and a reduction in share based
payment expense;
-
Office and general expenses for the three and nine months ended
September 30, 2020 decreased by 23.5% and 15.2%, primarily due to
reduced legal fees, rent expense, computer expense, utilities,
postage, and other office expenses, partially offset by an increase
in bad debt expense; and
-
Corporate overhead expenses for the three and nine months ended
September 30, 2020 decreased by 42.2% and 17.0%, primarily due to
lower corporate travel costs and temporary reductions in fees to
the Company’s Board of Directors.
Subsequent to September 30, 2020, the Company
paid the final scheduled $0.6 million payment of principal and
interest on one of its two Amegy Bank term loans.
WILHELMINA INTERNATIONAL, INC. AND
SUBSIDIARIESCONSOLIDATED BALANCE
SHEETS(In thousands, except share
data)
|
|
(Unaudited)September
30,2020 |
|
December 31,
2019 |
ASSETS |
|
|
|
|
Current assets: |
|
|
|
|
Cash and cash equivalents |
|
$ |
4,952 |
|
|
$ |
6,993 |
|
Accounts receivable, net of allowance for doubtful accounts of
$1,766 and $1,423, respectively |
|
|
6,992 |
|
|
|
9,441 |
|
Prepaid expenses and other current assets |
|
|
167 |
|
|
|
243 |
|
Total current assets |
|
|
12,111 |
|
|
|
16,677 |
|
|
|
|
|
|
|
|
Property and equipment, net of accumulated depreciation of $5,113
and $4,300, respectively |
|
|
1,202 |
|
|
|
1,925 |
|
Right of use assets-operating |
|
|
833 |
|
|
|
1,261 |
|
Right of use assets-finance |
|
|
242 |
|
|
|
316 |
|
Trademarks and trade names with indefinite lives |
|
|
8,467 |
|
|
|
8,467 |
|
Other intangibles with finite lives, net of accumulated
amortization of $8,737 and $8,737, respectively |
|
|
- |
|
|
|
- |
|
Goodwill |
|
|
7,547 |
|
|
|
8,347 |
|
Other assets |
|
|
91 |
|
|
|
115 |
|
|
|
|
|
|
|
|
TOTAL ASSETS |
|
$ |
30,493 |
|
|
$ |
37,108 |
|
|
|
|
|
|
|
|
LIABILITIES AND
SHAREHOLDERS’ EQUITY |
|
|
|
|
|
|
Current liabilities: |
|
|
|
|
|
|
Accounts payable and accrued liabilities |
|
$ |
2,946 |
|
|
$ |
3,815 |
|
Due to models |
|
|
5,741 |
|
|
|
7,495 |
|
Lease liabilities – operating, current |
|
|
678 |
|
|
|
1,055 |
|
Lease liabilities – finance, current |
|
|
90 |
|
|
|
94 |
|
Term loan – current |
|
|
2,039 |
|
|
|
1,257 |
|
Total current liabilities |
|
|
11,494 |
|
|
|
13,716 |
|
|
|
|
|
|
|
|
Long term liabilities: |
|
|
|
|
|
|
Net deferred income tax liability |
|
|
1,352 |
|
|
|
725 |
|
Lease liabilities – operating, non-current |
|
|
207 |
|
|
|
328 |
|
Lease liabilities – finance, non-current |
|
|
161 |
|
|
|
225 |
|
Term loan – non-current |
|
|
1,371 |
|
|
|
743 |
|
Total long term liabilities |
|
|
3,091 |
|
|
|
2,021 |
|
|
|
|
|
|
|
|
Total liabilities |
|
|
14,585 |
|
|
|
15,737 |
|
|
|
|
|
|
|
|
Shareholders’ equity: |
|
|
|
|
|
|
Common stock, $0.01 par value, 9,000,000 shares authorized;
6,472,038 shares issued at September 30, 2020 and December 31,
2019 |
|
|
65 |
|
|
|
65 |
|
Treasury stock, 1,314,694 and 1,309,861 shares at September 30,
2020 and December 31, 2019, at cost |
|
|
(6,371 |
) |
|
|
(6,352 |
) |
Additional paid-in capital |
|
|
88,484 |
|
|
|
88,471 |
|
Accumulated deficit |
|
|
(66,153 |
) |
|
|
(60,815 |
) |
Accumulated other comprehensive (loss) income |
|
|
(117 |
) |
|
|
2 |
|
Total shareholders’ equity |
|
|
15,908 |
|
|
|
21,371 |
|
|
|
|
|
|
|
|
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY |
|
$ |
30,493 |
|
|
$ |
37,108 |
|
|
|
|
|
|
|
|
|
|
WILHELMINA
INTERNATIONAL, INC. AND
SUBSIDIARIESCONSOLIDATED
STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME
(LOSS)For the Three
and Nine Months
Ended September 30,
2020 and
2019 (In thousands, except per share
data)(Unaudited)
|
Three Months Ended |
|
Nine Months Ended |
|
September 30, |
|
September 30, |
|
2020 |
|
2019 |
|
2020 |
|
2019 |
Revenues: |
|
|
|
|
|
|
|
Service revenues |
$ |
10,534 |
|
|
$ |
17,224 |
|
|
$ |
29,604 |
|
|
$ |
57,199 |
|
License fees and other income |
|
11 |
|
|
|
17 |
|
|
|
21 |
|
|
|
46 |
|
Total revenues |
|
10,545 |
|
|
|
17,241 |
|
|
|
29,625 |
|
|
|
57,245 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Model costs |
|
7,544 |
|
|
|
12,534 |
|
|
|
21,547 |
|
|
|
41,166 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenues, net of model costs |
|
3,001 |
|
|
|
4,707 |
|
|
|
8,078 |
|
|
|
16,079 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating expenses: |
|
|
|
|
|
|
|
|
|
|
|
Salaries and service costs |
|
1,651 |
|
|
|
3,266 |
|
|
|
7,566 |
|
|
|
10,571 |
|
Office and general expenses |
|
797 |
|
|
|
1,042 |
|
|
|
2,799 |
|
|
|
3,301 |
|
Amortization and depreciation |
|
294 |
|
|
|
297 |
|
|
|
886 |
|
|
|
885 |
|
Goodwill impairment |
|
- |
|
|
|
- |
|
|
|
800 |
|
|
|
- |
|
Corporate overhead |
|
145 |
|
|
|
251 |
|
|
|
692 |
|
|
|
834 |
|
Total operating expenses |
|
2,887 |
|
|
|
4,856 |
|
|
|
12,743 |
|
|
|
15,591 |
|
Operating income (loss) |
|
114 |
|
|
|
(149 |
) |
|
|
(4,665 |
) |
|
|
488 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Other expense (income): |
|
|
|
|
|
|
|
|
|
|
|
Foreign exchange gain |
|
(14 |
) |
|
|
(3 |
) |
|
|
(65 |
) |
|
|
- |
|
Interest expense |
|
21 |
|
|
|
27 |
|
|
|
71 |
|
|
|
89 |
|
Total other expense, net |
|
7 |
|
|
|
24 |
|
|
|
6 |
|
|
|
89 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Income (loss) before provision
for income taxes |
|
107 |
|
|
|
(173 |
) |
|
|
(4,671 |
) |
|
|
399 |
|
|
|
|
|
|
|
|
|
|
|
|
|
(Provision) benefit for income
taxes: |
|
|
|
|
|
|
|
|
|
|
|
Current |
|
(56 |
) |
|
|
(47 |
) |
|
|
(40 |
) |
|
|
(200 |
) |
Deferred |
|
(29 |
) |
|
|
54 |
|
|
|
(627 |
) |
|
|
(23 |
) |
(Provision) benefit income taxes, net |
|
(85 |
) |
|
|
7 |
|
|
|
(667 |
) |
|
|
(223 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
Net income (loss) |
$ |
22 |
|
|
$ |
(166 |
) |
|
$ |
(5,338 |
) |
|
$ |
176 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Other comprehensive income
(loss): |
|
|
|
|
|
|
|
|
|
|
|
Foreign currency translation income (loss) |
|
120 |
|
|
|
(76 |
) |
|
|
(119 |
) |
|
|
(107 |
) |
Total comprehensive income (loss) |
|
142 |
|
|
|
(242 |
) |
|
|
(5,457 |
) |
|
|
69 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic net income (loss) per
common share |
$ |
0.00 |
|
|
$ |
(0.03 |
) |
|
$ |
(1.03 |
) |
|
$ |
0.03 |
|
Diluted net income (loss) per
common share |
$ |
0.00 |
|
|
$ |
(0.03 |
) |
|
$ |
(1.03 |
) |
|
$ |
0.03 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average common shares
outstanding-basic |
|
5,157 |
|
|
|
5,176 |
|
|
|
5,158 |
|
|
|
5,189 |
|
Weighted average common shares
outstanding-diluted |
|
5,157 |
|
|
|
5,176 |
|
|
|
5,158 |
|
|
|
5,189 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
WILHELMINA INTERNATIONAL, INC. AND
SUBSIDIARIESCONSOLIDATED STATEMENTS OF
SHAREHOLDERS’ EQUITY For the Three
and Nine Months
Ended September 30,
2020 and 2019
(In thousands)
|
|
CommonShares |
|
StockAmount |
|
TreasuryShares |
|
StockAmount |
|
AdditionalPaid-inCapital |
|
AccumulatedDeficit |
|
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 |
|
Share based payment expense |
|
- |
|
|
- |
|
- |
|
|
|
- |
|
|
|
49 |
|
|
- |
|
|
|
- |
|
|
|
49 |
|
Net loss to common shareholders |
|
- |
|
|
- |
|
- |
|
|
|
- |
|
|
|
- |
|
|
(166 |
) |
|
|
- |
|
|
|
(166 |
) |
Purchases of treasury stock |
|
- |
|
|
- |
|
(9 |
) |
|
|
(54 |
) |
|
|
- |
|
|
- |
|
|
|
- |
|
|
|
(54 |
) |
Foreign currency translation |
|
- |
|
|
- |
|
- |
|
|
|
- |
|
|
|
- |
|
|
- |
|
|
|
(76 |
) |
|
|
(76 |
) |
Balances at September 30,
2019 |
|
6,472 |
|
$ |
65 |
|
(1,302 |
) |
|
$ |
(6,320 |
) |
|
$ |
88,420 |
|
$ |
(55,853 |
) |
|
$ |
(200 |
) |
|
$ |
26,112 |
|
|
|
CommonShares |
|
StockAmount |
|
TreasuryShares |
|
StockAmount |
|
AdditionalPaid-inCapital |
|
AccumulatedDeficit |
|
Accumulated
Other
Comprehensive
Loss |
|
Total |
Balances at December 31, 2019 |
|
6,472 |
|
$ |
65 |
|
(1,310 |
) |
|
$ |
(6,352 |
) |
|
$ |
88,471 |
|
$ |
(60,815 |
) |
|
$ |
2 |
|
|
$ |
21,371 |
|
Share based payment expense |
|
- |
|
|
- |
|
- |
|
|
|
- |
|
|
|
6 |
|
|
- |
|
|
|
- |
|
|
|
6 |
|
Net loss to common shareholders |
|
- |
|
|
- |
|
- |
|
|
|
- |
|
|
|
- |
|
|
(2,660 |
) |
|
|
- |
|
|
|
(2,660 |
) |
Purchases of treasury stock |
|
- |
|
|
- |
|
(5 |
) |
|
|
(19 |
) |
|
|
- |
|
|
- |
|
|
|
- |
|
|
|
(19 |
) |
Foreign currency translation |
|
- |
|
|
- |
|
- |
|
|
|
- |
|
|
|
- |
|
|
- |
|
|
|
(234 |
) |
|
|
(234 |
) |
Balances at March 31,
2020 |
|
6,472 |
|
$ |
65 |
|
(1,315 |
) |
|
$ |
(6,371 |
) |
|
$ |
88,477 |
|
$ |
(63,475 |
) |
|
$ |
(232 |
) |
|
$ |
18,464 |
|
Share based payment expense |
|
- |
|
|
- |
|
- |
|
|
|
- |
|
|
|
4 |
|
|
- |
|
|
|
- |
|
|
|
4 |
|
Net loss to common shareholders |
|
- |
|
|
- |
|
- |
|
|
|
- |
|
|
|
- |
|
|
(2,700 |
) |
|
|
- |
|
|
|
(2,700 |
) |
Purchases of treasury stock |
|
- |
|
|
- |
|
- |
|
|
|
- |
|
|
|
- |
|
|
- |
|
|
|
- |
|
|
|
- |
|
Foreign currency translation |
|
- |
|
|
- |
|
- |
|
|
|
- |
|
|
|
- |
|
|
- |
|
|
|
(5 |
) |
|
|
(5 |
) |
Balances at June 30, 2020 |
|
6,472 |
|
$ |
65 |
|
(1,315 |
) |
|
$ |
(6,371 |
) |
|
$ |
88,481 |
|
$ |
(66,175 |
) |
|
$ |
(237 |
) |
|
$ |
15,763 |
|
Share based payment expense |
|
- |
|
|
- |
|
- |
|
|
|
- |
|
|
|
3 |
|
|
- |
|
|
|
- |
|
|
|
3 |
|
Net income to common shareholders |
|
- |
|
|
- |
|
- |
|
|
|
- |
|
|
|
- |
|
|
22 |
|
|
|
- |
|
|
|
22 |
|
Purchases of treasury stock |
|
- |
|
|
- |
|
- |
|
|
|
- |
|
|
|
- |
|
|
- |
|
|
|
- |
|
|
|
- |
|
Foreign currency translation |
|
- |
|
|
- |
|
- |
|
|
|
- |
|
|
|
- |
|
|
- |
|
|
|
120 |
|
|
|
120 |
|
Balances at September 30,
2020 |
|
6,472 |
|
$ |
65 |
|
(1,315 |
) |
|
$ |
(6,371 |
) |
|
$ |
88,484 |
|
|
(66,153 |
) |
|
$ |
(117 |
) |
|
$ |
15,908 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
The accompanying notes are an integral part of
these consolidated financial statements.
WILHELMINA INTERNATIONAL, INC. AND
SUBSIDIARIESCONSOLIDATED STATEMENTS OF CASH
FLOWFor the Nine Months
Ended September 30,
2020 and
2019 (In
thousands)(Unaudited)
|
Nine Months
EndedSeptember
30, |
|
2020 |
|
2019 |
Cash flows from operating
activities: |
|
|
|
Net (loss) income: |
$ |
(5,338 |
) |
|
$ |
176 |
|
Adjustments to reconcile net
(loss) income to net cash used in operating activities: |
|
|
|
|
|
Amortization and depreciation |
|
886 |
|
|
|
885 |
|
Goodwill impairment |
|
800 |
|
|
|
- |
|
Share based payment expense |
|
13 |
|
|
|
165 |
|
Deferred income taxes |
|
627 |
|
|
|
23 |
|
Bad debt expense (recovery) |
|
131 |
|
|
|
(1 |
) |
Changes in operating assets
and liabilities: |
|
|
|
|
|
Accounts receivable |
|
2,318 |
|
|
|
(181 |
) |
Prepaid expenses and other current assets |
|
76 |
|
|
|
(77 |
) |
Right of use assets-operating |
|
428 |
|
|
|
802 |
|
Other assets |
|
24 |
|
|
|
1 |
|
Due to models |
|
(1,754 |
) |
|
|
31 |
|
Lease liabilities-operating |
|
(498 |
) |
|
|
(854 |
) |
Accounts payable and accrued liabilities |
|
(869 |
) |
|
|
(1,038 |
) |
Net cash used in operating
activities |
|
(3,156 |
) |
|
|
(68 |
) |
|
|
|
|
|
|
Cash flows used in investing
activities: |
|
|
|
|
|
Purchases of property and equipment |
|
(90 |
) |
|
|
(304 |
) |
Net cash used in investing
activities |
|
(90 |
) |
|
|
(304 |
) |
|
|
|
|
|
|
Cash flows used in financing
activities: |
|
|
|
|
|
Purchases of treasury stock |
|
(19 |
) |
|
|
(227 |
) |
Proceeds from term loans |
|
1,975 |
|
|
|
- |
|
Payments on finance leases |
|
(67 |
) |
|
|
(83 |
) |
Payment on term loans |
|
(565 |
) |
|
|
(438 |
) |
Net cash provided by (used in)
financing activities |
|
1,324 |
|
|
|
(748 |
) |
|
|
|
|
|
|
Foreign currency effect on
cash flows: |
|
(119 |
) |
|
|
(107 |
) |
|
|
|
|
|
|
Net change in cash and cash
equivalents: |
|
(2,041 |
) |
|
|
(1,227 |
) |
Cash and cash equivalents, beginning of period |
|
6,993 |
|
|
|
6,748 |
|
Cash and cash equivalents, end of period |
$ |
4,952 |
|
|
$ |
5,521 |
|
|
|
|
|
|
|
Supplemental disclosures of
cash flow information: |
|
|
|
|
|
Cash paid for interest |
$ |
64 |
|
|
$ |
88 |
|
Cash paid for income taxes |
$ |
14 |
|
|
$ |
5 |
|
|
|
|
|
|
|
|
|
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 third quarter ended September 30, 2020
filed with the Securities and Exchange Commission on November 12,
2020.
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.
214-661-7488ir@wilhelmina.com |
|
|
|
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