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): November 12, 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 November 12, 2019, Wilhelmina International, Inc. issued a press release announcing its financial results for the third quarter of fiscal 2019 ended September 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
  
99.1Press release dated November 12, 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: November 12, 2019By: /s/ James A. McCarthy        
  James A. McCarthy
  Chief Financial Officer
  

EdgarFiling

EXHIBIT 99.1

Wilhelmina International, Inc. Reports Results for Third Quarter 2019

Third Quarter Financial Results

 
(in thousands)
Q3 19

Q3 18
YOY
Change
Q3 19
 YTD
Q3 18
 YTD
YOY
Change
Total Revenues$17,241 $19,153(10.0%)$57,245$  59,465(3.7%)
Operating (Loss) Income (149) 281(153.0%) 488 1,167(58.2%)
(Loss) Income Before Provision for Taxes (173) 238(172.7%) 399 1,030(61.3%)
Net (Loss) Income  (166) 208(179.8%) 176 797(77.9%)
EBITDA**   151  516(70.7%) 1,373 1,830(25.0%)
Adjusted EBITDA** 197  617(68.1%) 1,538 2,174(29.3%)
Pre-Corporate EBITDA** 448  915(51.0%) 2,372 3,069(22.7%)
 **Non-GAAP measures referenced are detailed in the disclosures at the end of this release.

DALLAS, Nov. 12, 2019 (GLOBE NEWSWIRE) --  Wilhelmina International, Inc. (Nasdaq:WHLM) ("Wilhelmina" or the "Company") today reported revenues of $17.2 million and net loss of $0.2 million for the three months ended September 30, 2019, compared to revenues of $19.2 million and net income of $0.2 million for the three months ended September 30, 2018. For the nine months ended September 30, 2019, Wilhelmina reported revenues of $57.2 million and net income of $0.2 million compared to revenue of $59.5 million and net income of $0.8 million for the nine months ended September 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 and core model bookings in the United States, partially offset by an increase in core model bookings in the London office and bookings from the Aperture division. For the three and nine months ended September 30, 2019 compared to the three and nine months ended September 30, 2018, operating income, EBITDA, Adjusted EBITDA, and Pre-Corporate EBITDA decreased, primarily due to decreased revenues, partially offset by decreased operating expenses.

Bill Wackermann, Wilhelmina’s Chief Executive Officer, commented, “Despite challenges in the third quarter of 2019, I feel optimistic about the Company's path forward. We are focused on strengthening our core business and encouraged by our growth in international markets.”

Financial Results

Net loss for the three months ended September 30, 2019 was $0.2 million or $0.03 per fully diluted share and net income for the nine months ended September 30, 2019 was $0.2 million or $0.03 per fully diluted share, compared to net income of $0.2 million and $0.8 million, or $0.04 and $0.15 per fully diluted share, for the three and nine months ended September 30, 2018.

Pre-Corporate EBITDA was $0.4 million and $2.4 million for the three and nine months ended September 30, 2019, compared to $0.9 million and $3.1 million for the three and nine months ended September 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 nine months ended September 30, 2019 and 2018.

  Three months ended Nine months ended 
(in thousands)    September 30,
  September 30,
  2019  2018 2019 2018
Net (loss) income$(166)$  208$176$  797
Interest expense 27  26 89 73
Income tax (benefit) expense (7) 30 223 233
Amortization and depreciation 297  252 885 727
EBITDA**$151 $ 516 $1,373$   1,830
Foreign exchange (gain) loss (3) 17 - 64
Share-based payment expense 49  84 165 280
Adjusted EBITDA**  $197 $     617$1,538$   2,174
Corporate overhead 251  298 834 895
Pre-Corporate EBITDA**  $448 $   915$2,372$  3,069
 

**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, 2019, when compared to the three and nine months ended September 30, 2018, were primarily the result of the following:

WILHELMINA INTERNATIONAL, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(In thousands, except share data) 

  (Unaudited)   
  September 30,
2019
   December 31,
 2018
ASSETS     
Current assets:     
  Cash and cash equivalents $5,521   $6,748 
  Accounts receivable, net of allowance for doubtful accounts of $1,484 and $1,791, respectively  12,083    11,901 
  Prepaid expenses and other current assets  274    197 
  Total current assets  17,878    18,846 
        
Property and equipment, net of accumulated depreciation of $4,032 and $3,264, respectively  2,103    2,567 
Right of use assets-operating  1,602    - 
Right of use assets-finance  129    - 
Trademarks and trade names with indefinite lives   8,467    8,467 
Other intangibles with finite lives, net of accumulated amortization of $8,720 and $8,684, respectively  17    53 
Goodwill  13,192    13,192 
Other assets  113    114 
        
TOTAL ASSETS $43,501   $43,239 
        
LIABILITIES AND SHAREHOLDERS’ EQUITY        
Current liabilities:       
  Accounts payable and accrued liabilities $3,824   $5,071 
  Due to models  8,840    8,809 
  Lease liabilities – operating, current  1,125    - 
  Lease liabilities – finance, current  94    - 
  Term loan – current  750    623 
  Total current liabilities  14,633    14,503 
        
Long term liabilities:       
  Net deferred income tax liability  654    631 
  Lease liabilities – operating, non-current  623    - 
  Lease liabilities – finance, non-current  44    - 
  Term loan – non-current  1,435    2,000 
  Total long term liabilities  2,756    2,631 
        
Total liabilities  17,389    17,134 
        
Shareholders’ equity:       
  Common stock, $0.01 par value, 9,000,000 shares authorized; 6,472,038 shares       
   issued at September 30, 2019 and December 31, 2018  65    65 
  Treasury stock, 1,301,917 and 1,264,154 shares at September 30, 2019 and December 31, 2018, at cost  (6,320)   (6,093)
  Additional paid-in capital  88,420    88,255 
  Accumulated deficit  (55,853)   (56,029)
  Accumulated other comprehensive loss  (200)   (93)
Total shareholders’ equity  26,112    26,105 
        
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY $43,501   $43,239 


WILHELMINA INTERNATIONAL, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS)
For the Three and Nine Months Ended September 30, 2019 and 2018
 (In thousands, except per share data)
(Unaudited)

  Three Months Ended  Nine Months Ended 
  September 30,   September 30,  
  2019   2018   2019   2018  
Revenues:            
Service revenues $17,224   $19,143   $57,199   $59,425  
License fees and other income  17    10    46    40  
Total revenues  17,241    19,153    57,245    59,465  
                 
Model costs  12,534    13,777    41,166    42,524  
                 
Revenues, net of model costs  4,707    5,376    16,079    16,941  
                 
Operating expenses:                
Salaries and service costs  3,266    3,478    10,571    10,509  
Office and general expenses  1,042    1,067    3,301    3,643  
Amortization and depreciation  297    252    885    727  
Corporate overhead  251    298    834    895  
Total operating expenses  4,856    5,095    15,591    15,774  
Operating (loss) income  (149)   281    488    1,167  
                 
Other expense:                
  Foreign exchange gain (loss)  3    (17)   -    (64) 
  Interest expense  (27)   (26)   (89)   (73) 
  Total other expense  (24)   (43)   (89)   (137) 
                 
(Loss) income before provision for income taxes   (173)   238    399    1,030  
                 
Provision for income taxes (expense) benefit:                
  Current  (47)   (80)   (200)   (220) 
  Deferred  54    50    (23)   (13) 
  Income tax (expense) benefit  7    (30)   (223)   (233) 
                 
 Net (loss) income $(166)  $208   $176   $797  
                 
Other comprehensive expense:                
  Foreign currency translation adjustment  (76)   (24)   (107)   (56) 
  Total comprehensive (loss) income  (242)   184    69    741  
                 
Basic net (loss) income per common share $(0.03)  $0.04   $0.03   $0.15  
Diluted net (loss) income per common share $(0.03)  $0.04   $0.03   $0.15  
                 
Weighted average common shares outstanding-basic  5,176    5,309    5,189    5,353  
Weighted average common shares outstanding-diluted  5,176    5,318    5,189    5,361  

WILHELMINA INTERNATIONAL, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITY
For the Three and Nine Months Ended September 30, 2019 and 2018
 (In thousands)
(Unaudited)

  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  
  Share based payment expense  -  -  -    -    84   -    -   84  
  Net income to common shareholders  -  -  -    -    -   208    -   208  
  Purchases of treasury stock  -  -  (100)   (706)   -   -    -   (706) 
  Foreign currency translation  -  -  -    -    -   -    (24)  (24) 
Balances at September 30, 2018  6,472 $65  (1,203)  $(5,681)  $88,172  $(56,088)  $(52) $26,416  


  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  
  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  

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 Nine Months Ended September 30, 2019 and 2018
 (In thousands)
(Unaudited)
                                                                                              

  Nine Months Ended
September 30,
    2019   2018 
Cash flows from operating activities:     
Net income: $176   $797 
Adjustments to reconcile net income to net cash (used in) provided by operating activities:       
  Amortization and depreciation  885    727 
  Share based payment expense  165    280 
  Deferred income taxes  23    13 
  Bad debt (recovery) expense   (1)   70 
Changes in operating assets and liabilities:       
  Accounts receivable  (181)   (296)
  Prepaid expenses and other current assets  (77)   (107)
  Right of use assets-operating  802      - 
  Other assets  1    20 
  Due to models  31    (635)
  Lease liabilities-operating  (854)   - 
  Accounts payable and accrued liabilities  (1,038)   862 
Net cash (used in) provided by operating activities  (68)   1,731 
        
Cash flows used in investing activities:       
  Purchases of property and equipment  (304)   (293)
Net cash used in investing activities  (304)   (293)
        
Cash flows (used in) provided by financing activities:       
  Purchases of treasury stock  (227)   (788)
  Payments on finance leases  (83)   - 
  Proceeds from term loan  -    700 
  Repayment of term loan  (438)   (390)
Net cash used in financing activities  (748)   (478)
        
Foreign currency effect on cash flows:  (107)   (56)
        
Net change in cash and cash equivalents:  (1,227)   904 
  Cash and cash equivalents, beginning of period  6,748    4,256 
  Cash and cash equivalents, end of period $5,521   $5,160 
        
Supplemental disclosures of cash flow information:       
  Cash paid for interest $88   $71 
  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 third quarter ended September 30, 2019 filed with the Securities and Exchange Commission on November 12, 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