Second Quarter Financial Results

• Revenues for the three months ended June 30, 2017 were $18.3 million, a decrease of 17.9% compared to the same period prior year.
• Operating income was $73 thousand for the three months ended June 30, 2017, a decrease of 92.5% compared to the same periods of the prior year.
• Net loss was $52 thousand for the three months ended June 30, 2017, compared to net income of $0.6 million in the same period of 2016.
• EBITDA decreased 75.6% to $0.3 million for the three months ended June 30, 2017 compared to $1.1 million in the same period of 2016.
• Pre-Corporate EBITDA decreased by 56.5% to $0.7 million for the three months ended June 30, 2017 as compared to $1.6 million in the same periods of the prior year.

DALLAS, Aug. 10, 2017 (GLOBE NEWSWIRE) -- Wilhelmina International, Inc. (Nasdaq:WHLM) ("Wilhelmina" or the "Company") today reported revenues of $18.3 million and net loss of $52 thousand for the three months ended June 30, 2017, as well as revenues of $37.4 million and net loss of $43 thousand for the first half of 2017. The decreases in revenues when compared to the same periods of the prior year were primarily due to a decrease in core model bookings, which was partially offset by an increase in core model bookings in London, the Company’s new office in Chicago, and the Celebrity division. Decreased operating income was primarily the result of decreases in service revenues outpacing reductions in operating expenses. As a result, EBITDA, Adjusted EBITDA and Pre-Corporate EBITDA also decreased during the first half of 2017 compared to the same period prior year.

Mark Schwarz, Executive Chairman of Wilhelmina, said, “dramatic shifts impacting retail and advertising markets appear to be changing client’s spending patterns and also influencing our competitors’ behaviors, further contributing to a difficult period.”

William Wackermann, Chief Executive Officer of Wilhelmina, said, “The first half of 2017 has been challenging for many of our retail and fashion clients and, as a result, Wilhelmina saw less than optimal results for the quarter. As the marketplace continues to evolve, We are committed to leadership through our vision of building new digital revenue opportunities in both our core modeling and developmental businesses.”

Financial Results

Net loss for the three and six months ended June 30, 2017 was $52 thousand and $43 thousand, or $0.01 and $0.01 per fully diluted share, compared to net income of $0.6 million and $0.5 million, or $0.10 and $0.08 per fully diluted share, for the three and six months ended June 30, 2016.

Pre-Corporate EBITDA was $0.7 million and $1.5 million for the three and six months ended June 30, 2017, compared to $1.6 million and $2.7 million for the three and six months ended June 30, 2016. 

The following table reconciles reported net income under generally accepted accounting principles to EBITDA, Adjusted EBITDA and Pre-Corporate EBITDA for the three and six months ended June 30, 2017 and 2016.

Changes in net income, EBITDA, Adjusted EBITDA and Pre-Corporate EBITDA for the three and six months ended June 30, 2017, when compared to the three and six months ended June 30, 2016, were primarily the result of the following:

• Revenues net of model costs decreased for the three and six months ended in June 30, 2017 by 15.4% and 14.5% primarily due to a decrease in core model bookings during the first half of 2017;
   
• Salaries and service costs decreased by 4.6% and 9.2% for the three and six months ended in June 30, 2017 primarily due to severance paid to the Company’s former Chief Executive Officer and another employee in 2016, and changes in personnel to better align the number of employees at each Wilhelmina office with the needs of each geographic region, and more effective management of T&E during the first half of 2017;
   
• Office and general expenses remained relatively stable for the three months ended in June 30, 2017, despite increased in legal services costs. For the six months ended in June 30, 2017, the office and general expenses decreased by 15.7% primarily due to expenses incurred during the first half of 2016 for executive recruitment and non-income taxes;
   
• Amortization and depreciation expense increased by 118.6% and 113.6% for the three and six months ended in June 30, 2017, primarily due to the Company’s accounting and reporting software being put in service during the fourth quarter of 2016; and
   
• Corporate overhead expenses decreased by 17.0% for the three months ended in June 30, 2017, primarily due to lower corporate legal. For the six months ended in June 30, 2017, corporate overhead remained relatively stable despite higher corporate travel costs.

Non-GAAP Financial Measures

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 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 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 gain/loss from unconsolidated affiliate 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 and executive officer compensation, legal, audit and professional fees, corporate office rent and travel.

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-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 second quarter ended June 30, 2017 filed with the Securities and Exchange Commission on August 10, 2017.

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 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 not place undue reliance on these forward-looking statements.

About Wilhelmina International, Inc. (www.wilhelmina.com):

Wilhelmina, and its other 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.

CONTACT: Investor Relations
Wilhelmina International, Inc.
214-661-7488
ir@wilhelmina.com