- Core Gross Billings for the quarter up 23% to $19.5 million, Revenues for the quarter up 22% to $19.6 million
- Core Gross Billings YTD up 26% to $37.5 million, Revenues up 25% to $37.9 million
- Pre-Corporate EBITDA for the quarter down 13% to $1.1 million, EBITDA down 23% to $0.7 million
- Pre-Corporate EBITDA YTD Up 20% to $2.4 million, EBITDA Up 29% to $1.7 million
-
Progress On Key Strategic Initiatives:
- Solid execution with strong growth at each office and individual board
- Staffing of Wilhelmina branded agency in Tokyo
- Initiated production and sell-in of licensed fragrance line
Quarterly Financial Highlights
| (in thousands) |
Q2 14 |
Q2 13 |
YOY Growth |
Q2 14 YTD |
Q2 13 YTD |
YTD Growth |
| Core Gross Billings* | $19,455 | $15,851 | 23% | $37,517 | $29,666 | 26% |
| Total Gross Billings* | $19,944 | $17,091 | 17% | $38,495 | $31,981 | 20% |
| Total Revenues | $19,628 | $16,150 | 22% | $37,864 | $30,266 | 25% |
| Pre-Corporate EBITDA* | $1,095 | $1,263 | (13%) | $ 2,354 | $1,965 | 20% |
| EBITDA* | $721 | $939 | (23%) | $1,701 | $1,321 | 29% |
| *Non-GAAP measures referenced are detailed in the disclosures at the end of this release. | ||||||
DALLAS, Aug. 11, 2014 (GLOBE NEWSWIRE) -- Wilhelmina International, Inc. (Nasdaq:WHLM) ("Wilhelmina" or the "Company"), today reported record second quarter revenues of $19.6 million, up 22% from the second quarter of 2013. Revenues were driven by a strong 23% growth in core billings. Pre-corporate EBITDA declined 13% to $1.1 million, as a result of changes in the mix of revenues and investments in people, as well as temporarily elevated legal and technology costs. EBITDA declined 23% for the quarter to $0.7 million. Year-to-date, core gross billings are up 26%, driving revenue growth of 25%. Pre-corporate EBITDA is up 20% year-to-date to $2.4 million, while YTD EBITDA is up 29% to $1.7 million.
Mark Schwarz, Executive Chairman of Wilhelmina, said, "Wilhelmina continued to build momentum in billings and revenue during the quarter, with revenues up 22% for the quarter and 25% year-to-date. EBITDA was down for the quarter, primarily due to changes in the mix of revenues which impacted gross margin, and investments the company is making to grow the core model representation business and to expand into other areas. Additionally, EBITDA was impacted by legal and technology expenses that were unusually high, which should normalize over time. We believe our growth is outperforming the industry, and are very pleased with Wilhelmina's revenue and EBITDA growth for the first half of 2014."
Alex Vaickus, Chief Executive Officer of Wilhelmina, said, "Wilhelmina's core modeling business is executing at a high level, with each of the company's boards across all three offices having solid increases in bookings and revenue for the quarter. This is truly a testament to the entire Wilhelmina team, including our agents and our talent, for serving our clients so well this year. As the core modeling business continues to perform well, we are also pleased to continue our progress on expanding the business. During the quarter, the licensed Wilhelmina agency in Tokyo secured space and staffing with an office opening slated for next month. In addition, early retailer response to Wilhelmina's licensed line of fragrances has been encouraging. The production is expected to be on-shelves in the U.S. by year-end."
Some recent highlights from our models:
- Yara Khmidan is the new face of Guess Jeans shot by Ellen Von Unwerth. She is also featured in Marciano and Beach Bunny Swimwear campaigns.
- Alex Lundqvist is featured in BOSS by Hugo Boss' 2014 bodywear campaign.
- Cindy Bruna is featured in the Michael Kors ad campaign for Fall/Winter 2014.
- Clark Bockelman is the face of the Calvin Klein Collection & Calvin Klein Platinum for Fall/Winter 2014.
- Nairoby Matos is the new Fall face of Smashbox Cosmetics.
- Kwak Jiyoung, Neelam Gill, & Anders Hayward are featured in Hunter's Fall/Winter 2014 campaign.
- Soo Joo Park is featured alongside pop star, Rita Ora, in DKNY Jeans' latest Fall/Winter 2014 campaign.
- Tasha Tilberg is featured on the cover and in an editorial piece in Marie Claire Italia's August 2014 issue.
- RJ King is part of Vogue Italia's July 2014 cafe culture-inspired cover story, shot by Steven Meisel and a face in the Tommy Hilfiger Fall/Winter 2014 campaign.
- Coco Rocha is on the cover and featured in an editorial this summer for Citizen K.
- Manon Leloup landed a WWD cover story for the July 24th, 2014 issue featuring her modeling success and her new documentary on the modeling world.
- Diana Morales was featured in Enrique Iglesias' new perfume commercial.
- Wilhelmina Models was highly successful at Miami Swim Week with 32 girls walking in 22 different shows.
Financial Results
The net income applicable to common stockholders was $0.4 million or $0.07 per fully diluted share and $0.7 million or $0.12 per fully diluted share for the three and six months ended June 30, 2014, compared to a net income of $0.4 million or $0.06 per fully diluted share and $0.3 million or $0.05 per fully diluted share for the three and six months ended June 30, 2013.
Pre-Corporate EBITDA was $1.1 million and $2.4 million for the three and six months ended June 30, 2014, compared to $1.3 million and $2.0 million for the three and six months ended June 30, 2013.
The following table reconciles operating income under GAAP (as reported in the Company's SEC filings) to EBITDA and Pre-Corporate EBITDA for the three and six months ended June 30, 2014 and 2013.
|
(in thousands) |
Three months ended June 30, |
Six months ended June 30, |
||
| 2014 | 2013 | 2014 | 2013 | |
| Operating Income (loss) | $ 606 | $ 561 | $ 1,346 | $ 536 |
| Add: Amortization and depreciation | 110 | 393 | 370 | 783 |
| EBITDA | 716 | 954 | 1,716 | 1,319 |
| Add: Corporate overhead | 374 | 324 | 653 | 644 |
| Pre-Corporate EBITDA | $ 1,090 | $ 1,278 | $ 2,369 | $ 1,963 |
Changes in operating income and Pre-Corporate EBITDA for the three and six months ended June 30, 2014 when compared to the three and six months ended June 30, 2013 were the result of the following:
- Increased revenues in the core modeling business driven by an expanded developed talent pool and our customers increased interest in booking the Company's talent.
- Operating margins decreased due to increased mother agency fees and a decline in the recovery of certain model costs.
- Salaries and service costs as a percentage of revenue declined to 16.5% and 16.8% for the three and six months ended June 30, 2014, respectively, when compared to 17.6% and 18.7% for the three and six months ended June 30, 2013.
- Office and general expenses as a percentage of revenue increased slightly to 5.5% and 5.8% for the three and six months ended June 30, 2014, respectively, when compared to 4.9% and 5.4% for the three and six months ended June 30, 2013.
| WILHELMINA INTERNATIONAL, INC. AND SUBSIDIARIES | ||
| Consolidated Balance Sheets | ||
| (In thousands, except share data) | ||
| (Unaudited) | ||
| ASSETS | June 30, 2014 | December 31, 2013 |
| Current assets: | ||
| Cash and cash equivalents | $2,898 | $2,776 |
| Accounts receivable net of allowance for doubtful accounts of $660 and $571 | 13,981 | 11,327 |
| Deferred tax asset | 1,246 | 1,659 |
| Prepaid expenses and other current assets | 541 | 257 |
| Total current assets | 18,666 | 16,019 |
| Property and equipment, net of accumulated depreciation of $618 and $493 | 957 | 831 |
| Trademarks and trade names with indefinite lives | 8,467 | 8,467 |
| Other intangibles with finite lives, net of amortization of $8,133 and $7,888 | 204 | 449 |
| Goodwill | 12,563 | 12,563 |
| Restricted cash | 222 | 222 |
| Other assets | 195 | 340 |
| Total assets | $41,274 | $38,891 |
| LIABILITIES AND SHAREHOLDERS' EQUITY | ||
| Current liabilities: | ||
| Accounts payable and accrued liabilities | $4,400 | $2,969 |
| Due to models | 9,591 | 8,669 |
| Total current liabilities | 13,991 | 11,638 |
| Long term liabilities | ||
| Amegy credit facility | -- | 800 |
| Deferred income tax liability | 1,287 | 1,287 |
| Total long-term liabilities | 1,287 | 2,087 |
| Total liabilities | 15,278 | 13,725 |
| Shareholders' equity: | ||
| Preferred stock, $0.01 par value, 10,000,000 shares authorized; none outstanding | ||
| Common stock, $0.01 par value, 12,500,000 shares authorized; 5,870,302 shares issued and outstanding at June 30, 2014 and December 31, 2013 | 65 | 65 |
| Treasury stock 601,705, at cost | (1,637) | (1,637) |
| Additional paid-in capital | 86,696 | 86,589 |
| Accumulated deficit | (59,128) | (59,851) |
| Total shareholders' equity | 25,996 | 25,166 |
| Total liabilities and shareholders' equity | $41,274 | $38,891 |
| WILHELMINA INTERNATIONAL, INC. AND SUBSIDIARIES | ||||
| Unaudited Consolidated Statements of Operations | ||||
| (In thousands, except per share data) | ||||
|
Three months ended June 30, |
Six months ended June 30, |
|||
| 2014 | 2013 | 2014 | 2013 | |
| Revenues | ||||
| Revenues | $19,528 | $15,978 | $37,664 | $29,893 |
| License fees and other income | 100 | 172 | 200 | 373 |
| Total revenues | 19,628 | 16,150 | 37,864 | 30,266 |
| Model costs | 14,206 | 11,232 | 26,963 | 21,048 |
| Revenues net of model costs | 5,422 | 4,918 | 10,901 | 9,218 |
| Operating expenses | ||||
| Salaries and service costs | 3,249 | 2,846 | 6,354 | 5,643 |
| Office and general expenses | 1,083 | 794 | 2,178 | 1,612 |
| Amortization and depreciation | 110 | 393 | 370 | 783 |
| Corporate overhead | 374 | 324 | 653 | 644 |
| Total operating expenses | 4,816 | 4,357 | 9,555 | 8,682 |
| Operating income | 606 | 561 | 1,346 | 536 |
| Other income (expense): | ||||
| Equity in Earnings (loss) of 50% owned subsidiary earnings | 5 | (15) | (15) | 2 |
| Interest income | 2 | 2 | 4 | 4 |
| Interest expense | -- | (16) | (8) | (28) |
| 7 | (29) | (19) | (22) | |
| Income before provision for income taxes | 613 | 532 | 1,327 | 514 |
| Provision for income taxes | ||||
| Current | 54 | 179 | 191 | 217 |
| Deferred | 168 | -- | 413 | -- |
| 222 | 179 | 604 | 217 | |
| Net income applicable to common stockholders | $391 | $353 | $723 | $297 |
| Basic net income per common share | $0.07 | $0.06 | $0.12 | $0.05 |
| Diluted net income per common share | $0.07 | $0.06 | $0.12 | $0.05 |
| Weighted average common shares outstanding-basic | 5,870 | 5,984 | 5,870 | 5,984 |
| Weighted average common shares outstanding-diluted | 5,968 | 6,045 | 5,942 | 6,034 |
Non GAAP financial measures
The Company calculates Earnings before Interest, Income Taxes, Depreciation and Amortization ("EBITDA") as operating income before depreciation, and amortization expense. The Company calculates Pre-Corporate EBITDA as EBITDA before corporate overhead at the holding company level. The Company calculates Total Gross Billings as the sum total of all amounts invoiced to customers during the period, with no effect giving to amounts which are deferred into future periods, per the terms of a contract. The Company calculates Core Gross Billings as the sum total of all amounts invoiced to customers in the core modeling business during the period, with no effect giving to amounts which are deferred into future periods, per the terms of a contract.
Although EBITDA, Pre-Corporate EBITDA, Total Gross Billings and Core Gross Billings represent non-GAAP financial measures, the Company considers these non-GAAP measures important 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
- can be useful to investors since they provide an analysis of financial and operating results using the same measures that the Company uses in evaluating itself.
- 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.
However, the Company's calculation of these non-GAAP measures may not be consistent with calculations of these measures by other companies in the Company's industry.
Non-GAAP financial measure are defined as numerical measures of financial performance that excludes or includes amounts so as to be different than the most directly comparable measure calculated and presented in accordance with United States generally accepted accounting principles ("GAAP") in a company's statements of operations, balance sheets or statements of cash flows. Pursuant to the requirements of Regulation G, the Company provides a reconciliation of these non-GAAP financial measures to the most directly comparable GAAP financial measures. Non-GAAP measures are not measurements of financial performance under GAAP and should not be considered as alternatives to 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 GAAP.
Table to reconcile revenues as reported to Core Gross Billings and Total Gross Billings
| (in thousands) |
Three months ended June 30, |
Six months ended June 30, |
||
| 2014 | 2013 | 2014 | 2013 | |
| Revenues | $19,528 | $15,978 | $37,664 | $29,893 |
| Less: Net revenues from the WAM business | (73) | (127) | (147) | (227) |
| Core Gross Billings | 19,455 | 15,851 | 37,517 | 29,666 |
| Add: Gross revenues from WAM business | 489 | 1,240 | 978 | 2,315 |
| Total Gross Billings | $19,944 | $17,091 | $38,495 | $31,981 |
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 three months ended June 30, 2014, which is expected to be filed August 11, 2014, with the Securities and Exchange Commission.
Forward-Looking Statements
This report contains certain "forward-looking" statements as such term is defined in the Private Securities Litigation Reform Act of 1995 and information relating to the Company and its subsidiaries that are based on the beliefs of the Company's management as well as assumptions made by and 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 its subsidiaries or Company management, are intended to identify forward-looking statements. Such statements reflect the current risks, uncertainties and assumptions related to certain factors including, without limitation, competitive factors, general economic conditions, the interest rate environment, governmental regulation and supervision, seasonality, changes in industry practices, one-time events and other factors described herein and in other filings made by the Company with the SEC. Based upon changing conditions, 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 intend to update these forward-looking statements.
About Wilhelmina International, Inc. (www.wilhelmina.com):
Through Wilhelmina Models and its other subsidiaries, including, Wilhelmina Artist Management, Wilhelmina International, Inc. provides traditional, full-service fashion model and talent management services, specializing in the representation and management of leading models, entertainers, artists, athletes and other talent to various customers and clients, including, retailers, designers, advertising agencies and catalog companies. Wilhelmina Models was founded in 1967 by Wilhelmina Cooper, a renowned fashion model, and is one of the oldest and largest fashion model management companies in the world. Wilhelmina Models is headquartered in New York and, since its founding, has grown to include operations located in Los Angeles and Miami, as well as a growing network of licensees comprising leading modeling agencies in various local markets across the U.S.as well as in Thailand, Dubai, Vancouver and Tokyo.