{"id":458586,"date":"2021-03-16T08:33:08","date_gmt":"2021-03-16T12:33:08","guid":{"rendered":"http:\/\/www.marketnewsdesk.com\/?p=458586"},"modified":"2021-03-16T08:33:08","modified_gmt":"2021-03-16T12:33:08","slug":"wilhelmina-international-inc-announces-fourth-quarter-and-full-year-2020-results","status":"publish","type":"post","link":"https:\/\/www.marketnewsdesk.com\/index.php\/wilhelmina-international-inc-announces-fourth-quarter-and-full-year-2020-results\/","title":{"rendered":"Wilhelmina International, Inc. Announces Fourth Quarter and Full Year 2020 Results"},"content":{"rendered":"
\n

\n Financial Results<\/strong>
\n \n <\/p>\n\n\n\n\n\n\n\n\n\n\n\n
\u00a0<\/td>\n<\/tr>\n
\n (in thousands)<\/strong>\n <\/td>\n\n
\n Q4 20<\/strong>\n <\/td>\n		\n
\n Q4 19<\/strong>\n <\/td>\n		\n YOY<\/strong>
\n
\n Change<\/strong>\n <\/td>\n		\n Year Ended<\/strong>
\n
\n 2020<\/strong>\n <\/td>\n		\n Year Ended<\/strong>
\n
\n 2019<\/strong>\n <\/td>\n		\n YOY<\/strong>
\n
\n Change<\/strong>\n <\/td>\n<\/tr>\n
\n Total Revenues<\/strong>\n <\/td>\n$<\/td>\n11,978<\/td>\n$<\/td>\n18,259<\/td>\n\u00a0<\/td>\n(34.4<\/td>\n%)<\/td>\n$<\/td>\n41,603<\/td>\n\u00a0<\/td>\n$<\/td>\n75,504<\/td>\n\u00a0<\/td>\n(44.9<\/td>\n%)<\/td>\n<\/tr>\n
\n Operating Income (Loss)<\/strong>\n <\/td>\n\u00a0<\/td>\n696<\/td>\n\u00a0<\/td>\n(4,660<\/td>\n)<\/td>\n114.9<\/td>\n%<\/td>\n\u00a0<\/td>\n(3,969<\/td>\n)<\/td>\n\u00a0<\/td>\n(4,172<\/td>\n)<\/td>\n4.9<\/td>\n%<\/td>\n<\/tr>\n
\n Income (Loss) Before Provision for Taxes<\/strong>\n <\/td>\n\u00a0<\/td>\n632<\/td>\n\u00a0<\/td>\n(4,785<\/td>\n)<\/td>\n113.2<\/td>\n%<\/td>\n\u00a0<\/td>\n(4,039<\/td>\n)<\/td>\n\u00a0<\/td>\n(4,386<\/td>\n)<\/td>\n7.9<\/td>\n%<\/td>\n<\/tr>\n
\n Net Income (Loss) <\/strong>\n <\/td>\n\u00a0<\/td>\n397<\/td>\n\u00a0<\/td>\n(4,962<\/td>\n)<\/td>\n108.0<\/td>\n%<\/td>\n\u00a0<\/td>\n(4,941<\/td>\n)<\/td>\n\u00a0<\/td>\n(4,786<\/td>\n)<\/td>\n(3.2<\/td>\n%)<\/td>\n<\/tr>\n
\n EBITDA** <\/strong>\n <\/td>\n\u00a0<\/td>\n1,010<\/td>\n\u00a0<\/td>\n(4,450<\/td>\n)<\/td>\n122.7<\/td>\n%<\/td>\n\u00a0<\/td>\n(2,704<\/td>\n)<\/td>\n\u00a0<\/td>\n(3,077<\/td>\n)<\/td>\n12.1<\/td>\n%<\/td>\n<\/tr>\n
\n Adjusted EBITDA**<\/strong>\n <\/td>\n\u00a0<\/td>\n1,062<\/td>\n\u00a0<\/td>\n543<\/td>\n\u00a0<\/td>\n95.6<\/td>\n%<\/td>\n\u00a0<\/td>\n(1,904<\/td>\n)<\/td>\n\u00a0<\/td>\n2,081<\/td>\n\u00a0<\/td>\n(191.5<\/td>\n%)<\/td>\n<\/tr>\n
\n Pre-Corporate EBITDA**<\/strong>\n <\/td>\n\u00a0<\/td>\n1,258<\/td>\n\u00a0<\/td>\n747<\/td>\n\u00a0<\/td>\n68.4<\/td>\n%<\/td>\n\u00a0<\/td>\n(1,016<\/td>\n)<\/td>\n\u00a0<\/td>\n3,119<\/td>\n\u00a0<\/td>\n(132.6<\/td>\n%)<\/td>\n<\/tr>\n
**Non-GAAP measures referenced are detailed in the disclosures at the end of this release.<\/p>\n<\/td>\n<\/tr>\n<\/table>\n

DALLAS, March 16, 2021 (GLOBE NEWSWIRE) — Wilhelmina International, Inc. (Nasdaq: WHLM) (“Wilhelmina” or the “Company”) today reported revenues of $12.0 million and net income of $0.4 million for the three months ended December 31, 2020, compared to revenues of $18.3 million and net loss of $5.0 million for the three months ended December 31, 2019. For the fiscal year ended December 31, 2020, Wilhelmina reported revenues of $41.6 million and net loss of $4.9 million compared to revenue of $75.5 million and net loss of $4.8 million for the fiscal year ended December 31, 2019. During the three and twelve months ended December 31, 2020, the novel coronavirus (COVID-19) pandemic had a material impact on revenues. The decrease in revenues when compared to the same periods of the prior year was primarily due to postponement and cancellation of bookings by many of Wilhelmina\u2019s customers while non-essential business activities were barred, or limited, in the cities where the Company operates, as well as the closure of the Wilhelmina Studios division in the fourth quarter of 2019 and the hair and makeup artist division in the second half of 2020. The increase in net income for the fourth quarter of 2020 was due to a reduction in operating expenses from the Company\u2019s cost savings initiatives and absence of goodwill impairment expense, partially offset by lower revenue net of model costs. The increase in loss for the fiscal year ended December 31, 2020 was primarily due to the decrease in revenues net of model costs, partially offset by decreases in goodwill impairment expense and operating expenses. In the first quarter of 2020 and the fourth quarter of 2019, Wilhelmina recorded non-cash goodwill impairments charges of $0.8 million and $4.8 million, respectively, triggered by a sustained decline in share price of the Company\u2019s common stock.\u00a0\u00a0<\/p>\n

\n COVID-19 Pandemic<\/strong>\n <\/p>\n

On March 11, 2020, the World Health Organization declared the outbreak of novel coronavirus (COVID-19) as a pandemic, which spread rapidly throughout the United States and the world. As the global impact of COVID-19 continues, Wilhelmina\u2019s first priority has been to protect the health and safety of its employees and talent. To help mitigate the spread of the virus and in response to health advisories and governmental actions and regulations, the Company has modified its business practices and has implemented health and safety measures that are designed to protect employees and represented talent.<\/p>\n

The Company\u2019s 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. There have been mandates from federal, state, and local authorities requiring forced closures of non-essential businesses. As a result, beginning in March 2020, the Company saw a significant reduction in customer bookings, resulting in a negative impact to revenue and earnings. During the second half of 2020, bookings increased from the preceding months, but remained significantly below pre-pandemic levels.<\/p>\n

In addition to reduced revenue, business operations have been adversely affected by reductions in productivity, limitations on the ability of customers to make timely payments, disruptions in talents\u2019 ability to travel to needed locations, and supply chain disruptions impeding clothing or footwear wardrobe from reaching destinations for photoshoots and other bookings. Many of the Company\u2019s customers are large retail and fashion companies, some of which have had to close stores in the United States and internationally due to the spread of COVID-19. Some of these customers have filed for bankruptcy in 2020 and others may be unable to pay amounts already owed to the Company, resulting in increased future bad debt expense. These customers also may not emerge from the pandemic with the financial ability, or need, to purchase Wilhelmina\u2019s services to the extent that they did in previous years. Some model talent have been quarantined with family far from the major cities where Wilhelmina\u2019s offices are located, and also away from where most modeling jobs take place. Many U.S. and international airlines have decreased their flight schedules which, as economic activities resumes and clients increase booking requests, may make it difficult for talent to be available when and where they are needed. The B.1.1.7 variant of the COVID-19 virus, which is believed to spread easily and quickly, has particularly impacted the United Kingdom in recent months, resulting in renewed strict lockdowns that have impacted Wilhelmina\u2019s London operations and are continuing into 2021. While these disruptions are currently expected to be temporary, there continues to be uncertainty around the duration.<\/p>\n

Postponed and cancelled bookings related to the pandemic contributed significantly to reduced revenues and increased operating losses during 2020. Although some clients increased activity and bookings during the second half of 2020, rising COVID-19 infection rates in cities where Wilhelmina operates could lead to a slower economic recovery in those markets, and possible additional business closings or local mandates that could slow the recovery in operations there. Since Wilhelmina extends customary payment terms to its clients, even as bookings resume, there is likely to be a lag before significant cash collections return. In the meantime, the Company continues to have significant employee, office rent, and other expenses.<\/p>\n

Reduced outstanding accounts receivable available as collateral under the Company\u2019s credit agreement with Amegy Bank has limited its access to additional financing. Net losses in recent periods have also impacted compliance with the financial covenants under the Amegy Bank credit agreement, further impeding the Company\u2019s ability to obtain additional financing. Since the pandemic began, many stock markets, including Nasdaq Capital Market where Wilhelmina\u2019s common stock is listed, have been volatile. A further decline in the Company\u2019s stock price would reduce its market capitalization and could require additional goodwill or intangible asset impairment writedowns.<\/p>\n

The Company has taken the following actions to address the impact of COVID-19 and the current recessionary environment, in order to efficiently manage the business and maintain adequate liquidity and maximum flexibility:<\/p>\n\n\n\n\n\n\n\n\n
\u00a0<\/td>\n–<\/td>\nIn April 2020, obtained approximately $2.0 million in loans under the Paycheck Protection Program (the \u201cPPP\u201d) of the Coronavirus Aid, Relief, and Economic Security Act (the \u201cCARES Act\u201d) administered by the U.S. Small Business Administration (\u201cSBA\u201d).<\/td>\n<\/tr>\n
\u00a0<\/td>\n–<\/td>\nEliminated discretionary travel and entertainment expenses.<\/td>\n<\/tr>\n
\u00a0<\/td>\n–<\/td>\nSuspended share repurchases.<\/td>\n<\/tr>\n
\u00a0<\/td>\n–<\/td>\nDid not renew the leases on three New York City model apartments when the terms ended in June and August, 2020.<\/td>\n<\/tr>\n
\u00a0<\/td>\n–<\/td>\nDid not renew the lease on the Company\u2019s New York City office, and required all New York based staff to work remotely.<\/td>\n<\/tr>\n
\u00a0<\/td>\n–<\/td>\nSuspended efforts to fill two highly compensated executive roles following the resignation of the Company\u2019s Chief Executive Officer and Vice President in early 2020.
Negotiated discounts with various vendors and service providers.<\/td>\n<\/tr>\n
\u00a0<\/td>\n–<\/td>\nEffective July 1, 2020, implemented layoffs of approximately 36% of its staff, including employees at each of the Company\u2019s five offices, and effected temporary salary reductions for the remaining staff.<\/td>\n<\/tr>\n<\/table>\n

\u00a0<\/p>\n

If the quarantines and limitations on non-essential work are re-implemented, or persist for an extended period, the Company may need to implement additional cost savings measures.<\/p>\n

\n Financial Results<\/strong>\n <\/p>\n

Net income for the three months ended December 31, 2020 was $0.4 million, or $0.08 per fully diluted share, compared to net loss of $5.0 million, or $0.96 per fully diluted share, for the three months ended December 31, 2019. Net loss for the fiscal year ended December 31, 2020 was $4.9 million, or $0.96 per fully diluted share, compared to net loss of $4.8 million, or $0.92 per fully diluted share, for the fiscal year ended December 31, 2019.<\/p>\n

Pre-Corporate EBITDA was $1.3 million and ($1.0) million for the three months and fiscal year ended December 31, 2020, compared to $0.7 million and $3.1 million for the three months and fiscal year ended December 31, 2019.\u00a0\u00a0<\/p>\n

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, 2020 and 2019.<\/p>\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n
\u00a0<\/td>\n\u00a0<\/td>\n\u00a0<\/td>\n\u00a0<\/td>\n\u00a0<\/td>\n<\/tr>\n
\n (in thousands)<\/strong>\n <\/td>\n\u00a0<\/td>\n\n Three months ended<\/strong>
\n
\n December 31,\u00a0<\/strong>
\n
\n
\n <\/strong>\n <\/td>\n		\u00a0<\/td>\n\n \u00a0Year ended
December 31,<\/strong>
\n
\n
\n <\/strong>\n <\/td>\n		\u00a0<\/td>\n<\/tr>\n
\u00a0<\/td>\n\u00a0<\/td>\n\n 2020<\/strong>\n <\/td>\n\u00a0<\/td>\n\n 2019<\/strong>\n <\/td>\n\u00a0<\/td>\n\n 2020<\/strong>\n <\/td>\n\u00a0<\/td>\n\u00a0<\/td>\n\n 2019<\/strong>\n <\/td>\n\u00a0<\/td>\n<\/tr>\n
Net income (loss)<\/td>\n$<\/td>\n397<\/td>\n$<\/td>\n(4,962<\/td>\n)<\/td>\n(4,941<\/td>\n)<\/td>\n$<\/td>\n(4,786<\/td>\n)<\/td>\n<\/tr>\n
Interest expense<\/td>\n\u00a0<\/td>\n15<\/td>\n\u00a0<\/td>\n28<\/td>\n\u00a0<\/td>\n86<\/td>\n\u00a0<\/td>\n\u00a0<\/td>\n117<\/td>\n\u00a0<\/td>\n<\/tr>\n
Income tax expense<\/td>\n\u00a0<\/td>\n235<\/td>\n\u00a0<\/td>\n177<\/td>\n\u00a0<\/td>\n902<\/td>\n\u00a0<\/td>\n\u00a0<\/td>\n400<\/td>\n\u00a0<\/td>\n<\/tr>\n
Amortization and depreciation<\/td>\n\u00a0<\/td>\n363<\/td>\n\u00a0<\/td>\n307<\/td>\n\u00a0<\/td>\n1,249<\/td>\n\u00a0<\/td>\n\u00a0<\/td>\n1,192<\/td>\n\u00a0<\/td>\n<\/tr>\n
EBITDA**<\/td>\n$<\/td>\n1,010<\/td>\n$<\/td>\n(4,450<\/td>\n)<\/td>\n(2,704<\/td>\n)<\/td>\n$<\/td>\n(3,077<\/td>\n)<\/td>\n<\/tr>\n
Foreign exchange loss<\/td>\n\u00a0<\/td>\n49<\/td>\n\u00a0<\/td>\n97<\/td>\n\u00a0<\/td>\n(16<\/td>\n)<\/td>\n\u00a0<\/td>\n97<\/td>\n\u00a0<\/td>\n<\/tr>\n
Non-recurring items<\/td>\n\u00a0<\/td>\n–<\/td>\n\u00a0<\/td>\n4,845<\/td>\n\u00a0<\/td>\n800<\/td>\n\u00a0<\/td>\n\u00a0<\/td>\n4,845<\/td>\n\u00a0<\/td>\n<\/tr>\n
Share-based payment expense<\/td>\n\u00a0<\/td>\n3<\/td>\n\u00a0<\/td>\n51<\/td>\n\u00a0<\/td>\n16<\/td>\n\u00a0<\/td>\n\u00a0<\/td>\n216<\/td>\n\u00a0<\/td>\n<\/tr>\n
Adjusted EBITDA**<\/td>\n$<\/td>\n1,062<\/td>\n$<\/td>\n543<\/td>\n\u00a0<\/td>\n(1,904<\/td>\n)<\/td>\n$<\/td>\n2,081<\/td>\n\u00a0<\/td>\n<\/tr>\n
Corporate overhead<\/td>\n\u00a0<\/td>\n196<\/td>\n\u00a0<\/td>\n204<\/td>\n\u00a0<\/td>\n888<\/td>\n\u00a0<\/td>\n\u00a0<\/td>\n1,038<\/td>\n\u00a0<\/td>\n<\/tr>\n
Pre-Corporate EBITDA**<\/td>\n$<\/td>\n1,258<\/td>\n$<\/td>\n747<\/td>\n\u00a0<\/td>\n(1,016<\/td>\n)<\/td>\n$<\/td>\n3,119<\/td>\n\u00a0<\/td>\n<\/tr>\n
\n
**Non-GAAP measures referenced are detailed in the disclosures at the end of this release.<\/td>\n<\/tr>\n
\u00a0<\/td>\n<\/tr>\n<\/table>\n

Changes in net income (loss), EBITDA, Adjusted EBITDA and Pre-Corporate EBITDA for the three months and fiscal year ended December 31, 2020, when compared to the three months and fiscal year ended December 31, 2019, were primarily the result of the following:<\/p>\n