DALLAS, Nov. 17 /PRNewswire-FirstCall/ -- Wilhelmina International,
Inc. (OTC:WHLM) (BULLETIN BOARD: WHLM) (the "Company") today
reported total revenues of $9.4 million and $22.8 million during
the three and nine months ended September 30, 2009, respectively,
compared to $0 during the three and nine months ended September 30,
2008. The net loss applicable to common stockholders was $328,000
or $0.00 per fully diluted share and $1.9 million or $0.02 per
fully diluted share, for the three and nine months ended September
30, 2009, respectively, compared to a net loss of $21,000 or $0.00
per fully diluted share and $48,000 or $0.00 per fully diluted
share during the three and nine months ended September 30, 2008.
The net loss for the three months ended September 30, 2009 includes
before tax charges of $490,000 for amortization of intangible
assets and depreciation, $276,000 for corporate overhead and
$13,000 for acquisition transaction costs. The net loss for the
nine months ended September 30, 2009 includes before tax charges of
$1.2 million for amortization of intangible assets and
depreciation, $885,000 for corporate overhead and $673,000 for
acquisition transaction costs. The Company completed the
acquisition of Wilhelmina International, Ltd. and affiliated
companies (collectively, the "Wilhelmina Companies") on February
13, 2009 and, therefore, recorded revenues and expenses of the
Wilhelmina Companies for the period from February 13, 2009 through
September 30, 2009, in its statements of operations for the three
and nine months ended September 30, 2009. In an effort to provide
investors with additional information regarding the Company's
results of operations, the Company is disclosing the unaudited pro
forma financial information and discussion below relating solely to
the Wilhelmina Companies, which does not take into account any
amounts attributable to the Company's operations at the holding
company level during such periods, including corporate overhead,
amortization of intangibles, acquisition transaction costs and
interest expense and income. Certain adjustments have been made to
the historical information for the three and nine months ended
September 30, 2008 to adjust for expenses incurred by the
Wilhelmina Companies in connection with the acquisition of the
Wilhelmina Companies. Such information and discussion should be
read in conjunction with the Unaudited Interim Condensed
Consolidated Financial Statements of the Company and the notes
thereto included in the Company's Form 10-Q for the period ended
September 30, 2009 and Form 10-K for the period ended December 31,
2008, as amended. The unaudited pro forma information and
discussion below is not necessarily indicative of the current or
future financial position or operating results of the Company. The
following table provides unaudited pro forma financial information
(in thousands), with adjustments as discussed above, relating
solely to the Wilhelmina Companies for the three and nine months
ended September 30, 2009 and 2008, as if the acquisition had
occurred at the beginning of the respective periods and was
consummated on the same terms. Three months ended Nine months ended
September 30 September 30 ------------- ------------- 2009 2008
2009 2008 ---- ---- ---- ---- Total revenues $9,385 $10,119 $27,244
$30,267 Model costs 6,527 7,152 19,092 20,945 ----- ----- ------
------ Revenues net of model costs 2,858 2,967 8,152 9,322
Operating expenses: Salaries and service costs 1,756 1,970 5,493
5,502 Office and general expenses 629 541 1,866 1,885 --- --- -----
----- Pro forma operating income $473 $456 $793 $1,935 ==== ====
==== ====== During the three months ended September 30, 2009, gross
billings, which represent amounts billed to customers and are an
important business metric that ultimately drives revenues, profits
and cash flows, of the Wilhelmina Companies decreased $1.9 million,
or 15.8%, to $10.0 million, compared to $11.9 million during the
three months ended September 30, 2008. During the nine months ended
September 30, 2009, gross billings decreased $4.3 million, or
12.6%, to $29.7 million, compared to $34.0 million during the nine
months ended September 30, 2008. The Wilhelmina Companies
experienced decreases in gross billings year-over-year across its
core modeling business as a result of a decrease in spending by its
clients due to the worldwide economic recession. During the three
months ended September 30, 2009, revenues net of model costs of the
Wilhelmina Companies decreased $109,000, or 3.6%, to $2.9 million,
compared to $3.0 million during the three months ended September
30, 2008. During the three months ended September 30, 2009,
revenues net of model costs included the recognition of certain
revenues deferred in prior periods which somewhat offset the impact
on revenues net of model costs from the $1.9 million, or 15.8%,
decline in gross billings for the quarter ended September 30, 2009
as compared to the quarter ended September 30, 2008. During the
nine months ended September 30, 2009, revenues net of model costs
of the Wilhelmina Companies decreased approximately $1.1 million,
or 12.5%, to $8.2 million, compared to $9.3 million during the nine
months ended September 30, 2008. During the three months ended
September 30, 2009, pro forma operating income increased $17,000,
or 3.7%, to $473,000 compared to operating income of $456,000
during the three months ended September 30, 2008. During the nine
months ended September 30, 2009, pro forma operating income
decreased $1.2 million, or 59.0%, to $793,000 compared to operating
income of $1.9 million during the nine months ended September 30,
2008. The increase in pro forma operating income during the three
months ended September 30, 2009 as compared to the three months
ended September 30, 2008 was mostly attributable to the recognition
of certain revenues deferred in prior periods and a decrease in
travel related cost incurred by employees. The decline in pro forma
operating income during the quarter ended September 30, 2009 as
compared to the quarter ended September 30, 2008 was caused by a
decline in revenues in the core modeling business which was
attributable to decreased spending by the clients of the Wilhelmina
Companies due to the worldwide economic recession. Pro forma
operating income for the three months ended September 30, 2009
improved sequentially compared to the prior three month periods
ended June 30 and March 31, 2009. During the three months ended
September 30, 2009, gross billings for the Wilhelmina Companies'
core modeling business decreased by a lesser percentage than
experienced in the preceding three months ended June 30, 2009.
Likewise, the gross billings for the Wilhelmina Companies' core
modeling business decreased by a lesser percentage during the three
months ended June 30, 2009 than experienced in the preceding three
months ended March 31, 2009. During the nine months ended September
30, 2009, the important Men's division and Women's division gross
billings declined less than the total decline in gross billings of
the Wilhelmina Companies. Other areas of strength have been the
Artist division and substantially improved results at the Miami
division. In the face of year-to-date revenue declines, the
Wilhelmina Companies have focused on managing operating costs and
maintaining profitable results. In a further effort to provide
investors with additional information regarding the Company's
results of operations, the Company is disclosing Adjusted EBITDA,
which is computed as operating income (loss) before depreciation
and amortization, corporate overhead at the holding company level
and acquisition transaction costs. Adjusted EBITDA is a non-GAAP
financial measure, defined as a numerical measure 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 provided a reconciliation
of this non-GAAP financial measure to the most directly comparable
GAAP financial measure. Although Adjusted EBITDA represents a
non-GAAP financial measure, the Company considers Adjusted EBITDA
to be a key operating metric of the Company's business, and uses
Adjusted EBITDA in its planning and budgeting processes and to
monitor and evaluate its financial and operating results. The
Company believes that Adjusted EBITDA is useful to investors
because it provides an analysis of financial and operating results
using the same measure that the Company uses in evaluating itself.
The Company believes that Adjusted EBITDA also provides
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 Adjusted EBITDA may not be consistent with the calculation of
this measure by other companies in the Company's industry. Adjusted
EBITDA is not a measurement of financial performance under GAAP and
should not be considered as an alternative to operating income
(loss) as an indicator of our operating performance or cash flows
from operating activities, as a measure of liquidity or any other
measure of performance derived in accordance with GAAP. The
following table reconciles operating loss under GAAP (in thousands)
to Adjusted EBITDA for the three and nine months ended September
30, 2009 and 2008. Three months ended Nine months ended September
30 September 30 ------------- ------------- 2009 2008 2009 2008
---- ---- ---- ---- Operating loss $(306) $(81) $(1,850) $(271)
Add: Corporate overhead 276 81 885 271 Add: Amortization of
intangible assets and depreciation 490 - 1,225 - Add: Acquisition
transaction costs 13 - 673 - --- --- --- --- Adjusted EBITDA $473
$- $933 $- ==== === ==== === Corporate and other During the three
months ended September 30, 2009, the Company entered into a
consulting agreement with a former seller of the Wilhelmina
Companies which has an annual cost of $150,000. Prior to entering
into the consulting agreement, the former seller was employed by
the Company and assisted with the transition to the new management
team. The Company incurred compensation and consulting expenses
with the former seller totaling approximately $33,000 and $80,000
for the three and nine months ended September 30, 2009,
respectively. These costs have been classified as corporate
overhead. For the three months ended September 30, 2009,
acquisition transaction cost of $13,000 relates to the retention of
RSM McGladrey, Inc. ("McGladrey") for the purpose of making a final
determination as to the purchase price adjustment relating to the
acquisition of the Wilhelmina Companies. The purchase price for the
acquired Wilhelmina Companies is subject to post-closing downward
adjustment, which may be effected against a total of 19.2 million
shares of the Company's common stock (the "Restricted Shares") that
are being held in escrow pursuant to the Acquisition Agreement. As
of November 13, 2009, the Company had 129.4 million shares of
common stock outstanding, including the 19.2 million Restricted
Shares that are being held in escrow. The Company anticipates that
McGladrey will make its final determination during the fourth
quarter of fiscal 2009. As of December 31, 2008, the Company had a
federal income tax loss carryforward of approximately $13.4
million, which begins expiring in 2019. Realization of the
Company's carryforwards is dependent on future taxable income and
capital gains. A valuation allowance has been recorded to reflect
the tax effect of the net loss carryforwards not used to offset a
portion of the deferred tax liability resulting from the Wilhelmina
acquisition. As of September 30, 2009, the Company's total
shareholders' equity was $21.0 million. Cash, borrowing and other
As of September 30, 2009, the Company had cash and cash equivalents
of $949,000. As of September 30, 2009, the Company had a bank
credit facility with borrowings on a revolving line of credit of
$2.0 million and a term note of $96,000. The line of credit has
expired and the Company is currently negotiating with the bank to
further extend the maturity date. The bank has not requested
repayment of the line and the Company has continued to finance its
operations using this revolving line of credit. Form 10-Q Filing
Additional information concerning the Company's third quarter
results of operations and financial position is included in the
Company's Form 10-Q for the quarter ended September 30, 2009 which
will be filed today with the Securities and Exchange Commission. A
copy of the Company's 10-Q filing will be available on our website
at http://www.wilhelmina.com/. Forward-Looking Statements This
report contains certain "forward-looking" statements as such term
is defined in the Private Securities Litigation Reform Act of 1995
and information relating to the Company and its subsidiaries that
are based on the beliefs of the Company's management as well as
assumptions made by and 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 its subsidiaries or Company management, are intended to identify
forward-looking statements. Such statements reflect the current
risks, uncertainties and assumptions related to certain factors
including, without limitation, the Company's success in integrating
the operations of the Wilhelmina Companies in a timely manner, or
at all, the Company's ability to realize the anticipated benefits
of the Wilhelmina Companies to the extent, or in the timeframe,
anticipated, competitive factors, general economic conditions, the
interest rate environment, governmental regulation and supervision,
seasonality, changes in industry practices, one-time events and
other factors described herein and in other filings made by the
Company with the SEC. Based upon changing conditions, 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 intend to
update these forward-looking statements. About Wilhelmina
International, Inc. and Wilhelmina Artist Management
(http://www.wilhelmina.com)/ Through Wilhelmina Models and its
other subsidiaries including Wilhelmina Artist Management,
Wilhelmina International, Inc. provides traditional, full-service
fashion model and talent management services, specializing in the
representation and management of leading models, entertainers,
artists, athletes and other talent to various customers and clients
including retailers, designers, advertising agencies and catalog
companies. Wilhelmina Models was founded in 1967 by Wilhelmina
Cooper, a renowned fashion model, and is one of the oldest and
largest fashion model management companies in the world. Wilhelmina
Models is headquartered in New York and, since its founding, has
grown to include operations located in Los Angeles and Miami, as
well as a growing network of licensees comprising leading modeling
agencies in various local markets across the U.S. Contact: John
Murray Chief Financial Officer Wilhelmina International, Inc.
214-661-7480 DATASOURCE: Wilhelmina International, Inc. CONTACT:
John Murray, Chief Financial Officer of Wilhelmina International,
Inc., +1-214-661-7480, Web Site: http://www.wilhelmina.com/
Copyright