Wilhelmina International, Inc. Announces Fourth Quarter and Full Year 2022 Results

Annual Financial Highlights

• Annual revenues of $17.8 million for 2022 improved by 10.4% from the prior year.
• Annual operating income of $2.4 million for 2022 was the highest since 2014.
• Annual net cash flows provided by operating activities were $2.5 million in 2022.
• Annual pre-tax income of $2.6 million, net income of $3.5 million and Pre-Corporate EBITDA of $3.9 million for 2022.
• $12.0 million cash and cash equivalents at December 31, 2022 was the highest balance at the end of any quarterly or annual period in Company history
• Annual gross billings of $70.0 million for 2022 improved 17.9% from the prior year.

DALLAS, March 22, 2023 (GLOBE NEWSWIRE) -- Wilhelmina International, Inc. (Nasdaq: WHLM) ("Wilhelmina" or the "Company") today reported revenues of $4.1 million and net loss of $18 thousand for the three months ended December 31, 2022, compared to revenues of $4.3 million and net income of $23 thousand for the three months ended December 31, 2021. For the fiscal year ended December 31, 2022, Wilhelmina reported revenues of $17.8 million and net income of $3.5 million compared to revenue of $16.1 million and net income of $4.5 million for the fiscal year ended December 31, 2021.

Decreased revenues during the fourth quarter of 2022 were primarily due to lower core modeling bookings in the United States and London. Increased revenues during the full year ended December 31, 2022 were primarily due to increased bookings as the cities where Wilhelmina operates reopened and business activity increased as COVID-19 restrictions were moderated or rescinded.   In 2022, net income was significantly impacted by the release of a $1.5 million valuation allowance on the Company’s deferred tax assets. In 2021, net income was significantly impacted by gain on forgiveness of PPP loans and employee retention payroll tax credits.

Financial Results

Net loss for the three months ended December 31, 2022 was $18 thousand, or $0.00 per fully diluted share, compared to net income of $23 thousand, or $0.00 per fully diluted share, for the three months ended December 31, 2021. Net income for the fiscal year ended December 31, 2022 was $3.5 million, or $0.68 per fully diluted share, compared to net income of $4.5 million, or $0.88 per fully diluted share, for the fiscal year ended December 31, 2021.

EBITDA was $0.2 million loss and $2.8 million income for the three months and fiscal year ended December 31, 2022, compared to $0.3 million and $6.2 million for the three months and fiscal year ended December 31, 2021. Adjusted EBITDA was $0.1 million loss and $2.8 million income for the three months and fiscal year ended December 31, 2022, compared to $0.9 million and $3.6 million for the three months and fiscal year ended December 31, 2021. Pre-Corporate EBITDA was $0.3 million and $3.9 million for the three months and fiscal year ended December 31, 2022, compared to $1.1 million and $4.5 million for the three months and fiscal year ended December 31, 2021.

The following table reconciles the non-GAAP financial measure Gross Billings to GAAP total revenues, for the fourth quarter and year ended December 31, 2022 and 2021.

The following table reconciles non-GAAP EBITDA, Adjusted EBITDA and Pre-Corporate EBITDA to GAAP net income for the fourth quarter and year ended December 31, 2022 and 2021.

Changes in net income, EBITDA, Adjusted EBITDA and Pre-Corporate EBITDA for the three months and fiscal year ended December 31, 2022, when compared to the three months and fiscal year ended December 31, 2021, were primarily the result of the following:

• Revenues for the three months ended December 31, 2022 decreased 4.7% primarily due to lower core modeling bookings in the United States and London. Revenues for the fiscal year ended December 31, 2022 increased by 10.4% primarily due to increased bookings as the cities where Wilhelmina operates reopened and business activity increased as COVID-19 vaccination rates rose;
  
  
• Salaries and service costs for the three months and fiscal year ended December 31, 2022 increased by 13.3% and 26.2% primarily due to personnel hires and payroll changes to better align Wilhelmina staffing with the needs of each office and geographical region;
  
  
• Office and general expenses for the three months and fiscal year ended December 31, 2022 increased by 42.8% and 6.6%, primarily due to increased legal expense, rent expense, and other office expenses;
  
  
• Amortization and depreciation expense for the three months and fiscal year ended December 31, 2022 decreased by 60.9% and 77.4%, primarily due to reduced depreciation of assets that became fully amortized in 2021;
  
  
• Non-recurring items included $2.0 million of gain on forgiveness of PPP loans and $1.3 million of employee retention payroll tax credit in the fiscal year ended December 31, 2021, as well as $0.6 million of cybersecurity incident expenses in the three months and fiscal year ended December 31, 2021;   and
  
  
• Corporate overhead increased by 45.7% and 21.9% for the three months and fiscal year ended December 31, 2022, primarily due to increased securities compliance costs and temporary reduction in fees paid to corporate employees and the Company’s directors in the prior year that returned to full fee in July 2021.
  
  

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
For the Years Ended December 31, 2022 and 2021
 (In thousands, except per share data)

WILHELMINA INTERNATIONAL, INC. AND SUBSIDIARIES`
CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITY
For the Years Ended December 31, 2022 and 2021
(In thousands)

WILHELMINA INTERNATIONAL, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOW
For the Years Ended December 31, 2022 and 2021
 (In thousands)

Non-GAAP Financial Measures

Gross Billings, 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 Gross Billings, 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 Gross Billings as the gross amount billed to customers on behalf of its models and talent for services performed. 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, share-based payment expense and certain significant non-recurring items that the Company may include from time to time. For 2021, these non-recurring items represented gain on forgiveness of PPP loans, employee retention payroll tax credit, and cybersecurity incident expenses. 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 Filing

Additional 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, 2022 filed with the Securities and Exchange Commission on March 22, 2023.

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 may include 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, and London. 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.