Wilhelmina International, Inc. Reports Results for Third Quarter 2018

Third Quarter Financial Results

DALLAS, Nov. 09, 2018 (GLOBE NEWSWIRE) -- Wilhelmina International, Inc. (Nasdaq:WHLM) ("Wilhelmina" or the "Company") today reported revenues of $19.2 million and net income of $0.2 million for the three months ended September 30, 2018, compared to revenues of $18.7 million and net income of $26 thousand for the three months ended September 30, 2017.  For the nine months ended September 30, 2018, Wilhelmina reported revenues of $59.4 million and net income of $0.8 million compared to revenue of $56.1 million and net loss of $17 thousand for the nine months ended September 30, 2017. The increases in revenues when compared to the same periods of the prior year were primarily due to an increase in model bookings and contributions from new initiatives. Increased operating income was primarily the result of increases in service revenues and reduced operating expenses partially offset by higher model costs. As a result, EBITDA, Adjusted EBITDA and Pre-Corporate EBITDA also increased during the first nine months of 2018 compared to the same period of the prior year.
Mark Schwarz, Executive Chairman of Wilhelmina, said, “Wilhelmina exhibited continued revenue growth for the third quarter in a row, growth in earnings, solid cash generation, improved working capital metrics and an ending cash balance of $5.2 million.”

William Wackermann, Chief Executive Officer of Wilhelmina, said, “I am inspired by the achievements of the Wilhelmina team as we continue to evolve and grow our iconic brand. In its third quarter, the company had steady performance in model bookings, along with momentum in our Studio and Aperture divisions. We remain on track to close the fiscal year successfully.”

Financial Results

Net income for the three and nine months ended September 30, 2018 was $0.2 million and $0.8 million, or $0.04 and $0.15 per fully diluted share, compared to net income of $26 thousand, or $0.00 per fully diluted share for the three months ended September 30, 2017 and net loss of $17 thousand or $0.00 per fully diluted share for the nine months ended September 30, 2017.

Pre-Corporate EBITDA was $0.9 million and $3.1 million for the three and nine months ended September 30, 2018, compared to $0.8 million and $2.2 million for the three and nine months ended September 30, 2017. 

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, 2018 and 2017.

Changes in net income, EBITDA, Adjusted EBITDA and Pre-Corporate EBITDA for the three and nine months ended September 30, 2018, when compared to the three and nine months ended September 30, 2017, were primarily the result of the following:

• Revenues net of model costs decreased slightly for the three months ended September 30, 2018.  For the nine months ended September 30, 2018, revenues net of model costs increased by 4.3% primarily due to an increase in core model bookings and new initiatives that contributed to growth during 2018;
   
• Salaries and service costs for the three and nine months ended September 30, 2018 were relatively stable;
   
• Office and general expenses decreased by 23.8% and 4.9% for the three and nine months ended September 30, 2018, primarily due to reduced legal fees, reduced bad debt expense, and reduced insurance expenses;
   
• Amortization and depreciation expense increased by 8.6% and 8.2% for the three and nine months ended September 30, 2018, primarily due to new equipment being placed in service in recent months; and
   
• Corporate overhead expenses increased by 26.3% and 9.5% for the three and nine months ended September 30, 2018, primarily due to higher stock exchange fees and SEC related legal costs.

During the first nine months of 2018, Wilhelmina repurchased an aggregate of 113,121 shares of its common stock under a previously approved stock repurchase program.  The aggregate purchase price of $0.8 million was funded through internal cash flow and a $0.7 million term loan.  As of September 30, 2018, the Company had repurchased a total of 1,203,491 shares and an additional 296,509 shares could yet be purchased under the Company’s stock repurchase program. 

WILHELMINA INTERNATIONAL, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITY
For the Three and Nine Months Ended September 30, 2018 and 2017
 (In thousands)

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 gain/loss from unconsolidated affiliate 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, SEC 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 September 30, 2018 filed with the Securities and Exchange Commission on November 9, 2018.

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, and its other 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.