Financial Results
DALLAS, March 30, 2020 (GLOBE NEWSWIRE) — Wilhelmina International, Inc. (Nasdaq: WHLM) (“Wilhelmina” or the “Company”) today reported revenues of $18.3 million and net loss of $5.0 million for the three months ended December 31, 2019, compared to revenues of $18.4 million and net income of $0.1 million for the three months ended December 31, 2018.  For the fiscal year ended December 31, 2019, Wilhelmina reported revenues of $75.5 million and net loss of $4.8 million compared to revenue of $77.9 million and net income of $0.9 million for the fiscal year ended December 31, 2018. In the fourth quarter of 2019, Wilhelmina recorded a non-cash goodwill impairment charge of $4.8 million, triggered by a sustained decline in share price of the Company’s common stock.  The Company does not expect the impairment charge to have any impact on future operations, affect its liquidity, affect cash flows from operating activities, or affect compliance with the financial covenants set forth in its credit agreement.  The net loss in 2019, when compared to net income in the same periods of the prior year, was primarily due to the goodwill impairment charge, a change in board revenue mix and an increase in revenue from the Aperture division, which is lower margin than traditional core model bookings, as well as current income tax expense of $0.3 million primarily related to the deferred tax asset impact of the termination of stock options previously granted to the Company’s former Chief Executive Officer, all partially offset by a decrease in operating expenses and a $0.3 million deferred tax benefit related to the goodwill impairment charge.Financial ResultsNet loss for the three months and fiscal year ended December 31, 2019 was $5.0 million and $4.8 million, or $0.96 and $0.92 per fully diluted share, compared to net income of $0.1 million and $0.9 million, or $0.01 and $0.16 per fully diluted share, for the three months and fiscal year ended December 31, 2018.Pre-Corporate EBITDA was $0.7 million and $3.1 million for the three months and fiscal year ended December 31, 2019, compared to $0.8 million and $3.9 million for the three months and fiscal year ended December 31, 2018. The following table reconciles reported net income under generally accepted accounting principles to EBITDA, Adjusted EBITDA and Pre-Corporate EBITDA for the fourth quarter and year ended December 31, 2019 and 2018.Changes in net income, EBITDA, Adjusted EBITDA and Pre-Corporate EBITDA for the three months and fiscal year ended December 31, 2019, when compared to the three months and fiscal year ended December 31, 2018, were primarily the result of the following:Revenues net of model costs for the three months and fiscal year ended December 31, 2019 decreased by 2.5% and 4.5% primarily due to decreases in core model bookings and in bookings in the Wilhelmina Studio division, partially offset by an increase in bookings in the Aperture division;
 Salaries and service costs for the three months and fiscal year ended December 31, 2019 decreased by 3.8% and 0.5% primarily due to a decrease in employee salaries and a reduction in share-based payment expense;
 Office and general expenses for the three months ended December 31, 2019 was relatively unchanged.  Office and general expenses for the fiscal year ended December 31, 2019 decreased by 7.2%, primarily due to reduced rent expense, bad debt expenses, and office expenses, as well as the reclassification of certain lease payments as amortization expense under new lease accounting rules;
 Amortization and depreciation expense for the three months and fiscal year ended December 31, 2019 increased by 16.7% and 20.4%, primarily due to new equipment being placed in service in recent months and certain lease payments previously included within office and general expenses now being classified as amortization under new lease accounting rules;
 A significant non-recurring $4.8 million goodwill impairment charge triggered by a sustained decline in share price; and
 Corporate overhead expenses for the three months and fiscal year ended December 31, 2019 decreased by 11.3% and 7.7%, primarily due to lower travel and securities compliance costs.On March 11, 2020, the World Health Organization declared the outbreak of novel coronavirus (COVID-19) as a pandemic, which continues to spread throughout the United States.  There have been mandates from federal, state, and local authorities requiring forced closures of non-essential businesses.  As a result, the Company has temporarily closed some offices and has seen a reduction in customer bookings, resulting in a negative impact to Company revenue and earnings.  In addition to reduced revenue, business operations could be adversely affected by potential reductions in productivity, delays or limitations on the ability of customers to make timely payments, disruptions in talents’ ability to travel to photography locations, or supply chain disruptions impeding clothing or footwear wardrobe from reaching destinations in time for photoshoots.  While this disruption is currently expected to be temporary, there is uncertainty around the duration.  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.  Therefore, while we expect this matter to negatively impact our business, results of operations, and financial position, the related financial impact cannot be reasonably estimated at this time.  As a result, the Company is currently evaluating and executing strategies to curtail expenses.
WILHELMINA INTERNATIONAL, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(In thousands, except share data) 
WILHELMINA INTERNATIONAL, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME (LOSS) AND COMPREHENSIVE INCOME (LOSS)
For the Years Ended December 31, 2019 and 2018
 (In thousands, except per share data)
WILHELMINA INTERNATIONAL, INC. AND SUBSIDIARIES`
CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITY
For the Years Ended December 31, 2019 and 2018
 (In thousands)
The accompanying notes are an integral part of these consolidated financial statements.
WILHELMINA INTERNATIONAL, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOW
For the Years Ended December 31, 2019 and 2018
 (In thousands)Non-GAAP Financial MeasuresEBITDA, 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; andprovide 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-K FilingAdditional information concerning the Company’s results of operations and financial position is included in the Company’s Form 10-K for the fiscal year ended December 31, 2019 filed with the Securities and Exchange Commission on March 30, 2020.Forward-Looking StatementsThis 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.
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