Gr8 company
Wilhelmina International, Inc. Reports Earnings Results for First Quarter 2014
Core Gross Billings Up 31% to $18.1 million, Revenues Up 29% to $18.2 million
Pre-Corporate EBITDA Up 87% to $1.3 million, EBITDA Up 174% to $1.0 million
Progress On Key Strategic Initiatives:
All offices and individual boards showed double digit growth year over year
Launched XO Wilhelmina website
Signed license agreement for an agency in Tokyo, Japan
Entered into a product licensing arrangement, expected launch late 2014
Quarterly Financial Highlights
(in thousands) Q1 14 Q1 13 Annual
Growth
Core Gross Billings* $18,063 $13,815 31%
Total Gross Billings* $18,552 $14,890 25%
Total Revenues $18,236 $14,116 29%
Pre-Corporate EBITDA* $1,279 $685 87%
EBITDA* $1,000 $365 174%
*Non-GAAP measures referenced are detailed in the disclosures at the end of this release.
Wilhelmina International, Inc. (OTCBB:WHLM) ("Wilhelmina" or the "Company"), today reported record total revenues of $18.2 million for the quarter ended March 31, 2014, up 29% from the year ago quarter ended March 31, 2013. Revenues were driven by core gross billings growth of 31% year over year to $18.1 million. The revenue growth, along with solid expense management, drove Pre-Corporate EBITDA up 87% from last year, to $1.3 million. EBITDA increased 174% year over year.
Mark Schwarz, Executive Chairman of Wilhelmina, said, "Wilhelmina had a strong quarter. Recognizing that there is inherent volatility in the business, and that a revenue growth rate of 29% cannot reasonably be extrapolated into the future, we are very pleased with this quarter's solid results. In addition to solid and improving financial performance, Wilhelmina is making progress on many important strategic initiatives."
Alex Vaickus, Chief Executive Officer of Wilhelmina, said, "Our teams of agents and models in New York, Miami, and Los Angeles had a great performance in the quarter, as Wilhelmina continues to build momentum in the core modeling business. All of the major boards had solid increases in bookings, leading to strong financial performance, even while we invest in additional agents and certain growth initiatives. Additionally, we are pleased to announce that a new Wilhelmina licensed modeling agency will be opening in Japan this summer. We also continue to work on additional domestic and international expansion opportunities, both organic and inorganic, in the core modeling business. Another priority is to continue to build the Wilhelmina brand, and with that in mind, we launched the XO Wilhelmina lifestyle and fashion blog during the quarter. We are also excited about the opportunity to create Wilhelmina branded consumer products through licensing arrangements and are working towards launching our first products later this year."
Some recent highlights from our models:
Alexandra Martynova is the Spring/Summer 2014 face for Tom Ford's Beauty campaign
Clark Bockelman is the face for Calvin Klein Collection Spring/Summer 2014
Robyn Lawley appeared on the secondary (peel-away) cover for Cosmopolitan's May 2014 issue
Danielle Knudson is the new face of GUESS for Spring 2014
Armando Cabral is featured in the H & M campaign
Soo Joo was featured on the cover of Vs. Magazine's Spring/Summer 2014 issue
RJ King and Marlon Teixeira are in Tommy Hilfiger's Spring/Summer 2014 Campaign
Financial Results
The net income applicable to common stockholders was $0.3 million or $0.00 per fully diluted share for the quarter ended March 31, 2014, compared to a net (loss) of ($0.06 million) or ($0.00) per fully diluted share for the quarter ended March 31, 2013.
Pre-Corporate EBITDA was $1.3 million for the quarter ended March 31, 2014, compared to $0.7 million for the quarter ended March 31, 2013.
The following table reconciles operating income (loss) under GAAP (as reported in the Company's SEC filings) to EBITDA and Pre-Corporate EBITDA for the quarter ended March 31, 2014 and 2013.
(in thousands) Three months ended
March 31,
2014 2013
Operating Income (loss) $740 $ (25)
Add: Amortization of intangible assets and depreciation 260 390
EBITDA 1,000 365
Add: Corporate overhead (at the holding company level) 279 320
Pre-Corporate EBITDA $1,279 $685
Increases in net income and Pre-Corporate EBITDA for the quarter ended March 31, 2014 when compared to the quarter ended March 31, 2013 were the result of the following:
31% increase in 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 increased due to the Company's continued focus on containing costs while increasing revenues. The amount of salaries and service costs as a percentage of revenue for the quarter ended March 31, 2014 declined to 17.0% compared to 19.8% for the quarter ended March 31, 2013.
WILHELMINA INTERNATIONAL, INC. AND SUBSIDIARIES
Consolidated Balance Sheets
(In thousands, except share data)
(Unaudited)
ASSETS March 31, December 31,
2014 2013
Current assets:
Cash and cash equivalents $1,005 $2,776
Accounts receivable, net of allowance for doubtful accounts of $571 13,047 11,327
Deferred tax asset 1,414 1,659
Prepaid expenses and other current assets 427 257
Total current assets 15,893 16,019
Property and equipment, net of accumulated depreciation of $552 and $493 819 831
Trademarks and trade names with indefinite lives 8,467 8,467
Other intangibles with finite lives, net of amortization of $8,089 and $7,888 248 449
Goodwill 12,563 12,563
Restricted cash 222 222
Other assets 167 340
Total assets $38,379 $38,891
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Accounts payable and accrued liabilities $3,048 $2,969
Due to models 8,488 8,669
Total current liabilities 11,536 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 12,823 13,725
Shareholders' equity:
Preferred stock, $0.01 par value, 10,000,000 shares authorized; none outstanding
Common stock, $0.01 par value, 250,000,000 shares authorized; 117,406,651 shares issued and outstanding at March 31, 2014 and December 31, 2013 1,294 1,294
Treasury stock 12,034,101, at cost (1,637) (1,637)
Additional paid-in capital 85,418 85,360
Accumulated deficit (59,519) (59,851)
Total shareholders' equity 25,556 25,166
Total liabilities and shareholders' equity $38,379 $38,891
WILHELMINA INTERNATIONAL, INC. AND SUBSIDIARIES
Unaudited Consolidated Statements of Operations
(In thousands, except per share data)
Three months ended
March 31,
2014 2013
Revenues
Revenues $18,136 $13,915
License fees and other income 100 201
Total revenues 18,236 14,116
Model costs 12,757 9,816
Revenues net of model costs 5,479 4,300
Operating expenses
Salaries and service costs 3,105 2,797
Office and general expenses 1,095 818
Amortization and depreciation 260 390
Corporate overhead 279 320
Total operating expenses 4,739 4,325
Operating income (loss) 740 (25)
Other income (expense):
Equity Earnings in Wilhelmina Kids & Creative Mgmt, LLC (20) 17
Interest income 2 2
Interest expense (8) (12)
Total other income (expense) (26) 7
Income (loss) before provision for income taxes 714 (18)
Provision for income taxes: (expense) benefit
Current (137) (38)
Deferred (245) --
(382) (38)
Net income (loss) applicable to common stockholders $332 $ (56)
Basic income (loss) per common share $0.00 $(0.00)
Diluted income (loss) per common share $0.00 $(0.00)
Weighted average common shares outstanding-basic 117,406 119,670
Weighted average common shares outstanding-diluted 118,337 120,500
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
March 31,
2014 2013
Revenues $18,136 $13,915
less: Net revenues from the WAM business (73) (100)
Core Gross Billings 18,063 13,815
Add: Gross revenues from WAM business 489 1,075
Total Gross Billings $18,552 $14,890
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 March 31, 2014, which is expected to be filed May 15, 2014, with the Securities and Exchange Commission.
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