UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
_____________________

Form 8-K
_____________________

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

Date of Report (Date of earliest event Reported): August 13, 2019  

WILHELMINA INTERNATIONAL, INC.
(Exact Name of Registrant as Specified in Charter)

Delaware001-3658974-2781950
(State or Other Jurisdiction of Incorporation)(Commission File Number)(I.R.S. Employer Identification Number)

 

200 Crescent Court, Suite 1400, Dallas, Texas 75201
(Address of Principal Executive Offices) (Zip Code)

(214) 661-7488
(Registrant's telephone number, including area code)

Not Applicable
(Former name or former address, if changed since last report)

Securities registered pursuant to Section 12(b) of the Act:

 

Title of each classTrading Symbol(s)Name of each exchange on which registered
Common Stock, $0.01 par valueWHLMNasdaq Capital Market

 

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

 [   ]  Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
 [   ]  Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
 [   ]  Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
 [   ]  Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

 

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (17 CFR §230.405) or Rule 12b-2 of the Securities Exchange Act of 1934 (17 CFR §240.12b-2). Emerging growth company [   ]

 

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. [   ]

 

 
 

Item 2.02. Results of Operations and Financial Condition.

          On August 13, 2019, Wilhelmina International, Inc. issued a press release announcing its financial results for the second quarter of fiscal 2019 ended June 30, 2019. A copy of this press release is included as Exhibit 99.1 to this report.

          Pursuant to General Instruction B.2 of Form 8-K, the information in this Item 2.02 of Form 8-K, including Exhibit 99.1 attached hereto, is being furnished pursuant to Item 2.02 and shall not be deemed “filed” for the purposes of Section 18 of the Securities Exchange Act of 1934 or otherwise be subject to the liabilities of that section, nor is it incorporated by reference into any filing of Wilhelmina International, Inc. under the Securities Act of 1933 or the Securities Exchange Act of 1934, whether made before or after the date hereof, regardless of any general incorporation language in such filing.

Item 9.01. Financial Statements and Exhibits.

          (d) Exhibits.

Exhibit No. Description
   
99.1 Press release dated August 13, 2019


SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

 WILHELMINA INTERNATIONAL, INC.
   
  
Date: August 13, 2019By: /s/ James A. McCarthy        
  James A. McCarthy
  Chief Financial Officer
  

EdgarFiling

EXHIBIT 99.1

Wilhelmina International, Inc. Reports Results for Second Quarter 2019

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 52218.8% 637 886(28.1%)
Income Before Provision for Taxes 602 47327.3% 572 792(27.8%)
Net Income  451 36423.9% 342 589(41.9%)
EBITDA**   930 73426.7% 1,222 1,314(7.0%)
Adjusted EBITDA** 970 84814.4% 1,341 1,557(13.9%)
Pre-Corporate EBITDA** 1,221 1,10810.2% 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:


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:

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