Third Quarter Financial Results

• Revenues for the three months ended September 30, 2017 were $18.7 million, a decrease of 10.5% compared to the same period prior year.
• Operating income was $138 thousand for the three months ended September 30, 2017, a decrease of 78.8% compared to the same period of the prior year.
• Net income was $26 thousand for the three months ended September 30, 2017, compared to net income of $0.2 million in the same period of 2016.
• EBITDA decreased 51.0% to $0.4 million for the three months ended September 30, 2017 compared to $0.7 million in the same period of 2016.
• Pre-Corporate EBITDA decreased by 26.8% to $0.8 million for the three months ended September 30, 2017 as compared to $1.0 million in the same periods of the prior year.

DALLAS, Nov. 09, 2017 (GLOBE NEWSWIRE) --  Wilhelmina International, Inc. (Nasdaq:WHLM) ("Wilhelmina" or the "Company") today reported revenues of $18.7 million and net income of $26 thousand for the three months ended September 30, 2017, as well as revenues of $56.2 million and net loss of $17 thousand for the first nine months 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 the London office, bookings from the Aperture division and bookings from 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 third quarter and first nine months of 2017 compared to the same periods prior year.

Mark Schwarz, Executive Chairman of Wilhelmina, said, “The third quarter saw a continuation of the trend experienced in the prior two quarters.  Tremendous shifts occurring in the retail and advertising industries are impacting many of our customers, creating uncertainty and challenges which have been reflected in our results.  Despite the decline in revenue, we did realize some margin improvement in the quarter and continue to increase the depth of model and celebrity talent available to meet the needs of our clients.”

William Wackermann, Chief Executive Officer of Wilhelmina, said, “During the third quarter of 2017, more of Wilhelmina’s models were selected to appear in this year’s Victoria Secret fashion show and Sports Illustrated swimsuit issue than in any previous year.  Despite what continues to be a challenging environment for many of our fashion and beauty industry clients, we are working hard to best position Wilhelmina going forward.”

Financial Results

Net income for the three months ended September 30, 2017 was $26 thousand, and net loss of $17 thousand for the first nine months of 2017, or $0.00 and $0.00 per fully diluted share, compared to net income of $0.2 million and $0.7 million, or $0.04 and $0.12 per fully diluted share, for the three and nine months ended September 30, 2016.

Pre-Corporate EBITDA was $0.8 million and $2.2 million for the three and nine months ended September 30, 2017, compared to $1.0 million and $3.8 million for the three and nine months ended September 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 nine months ended September 30, 2017 and 2016.

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

• Revenues net of model costs decreased for the three and nine months ended in September 30, 2017 by 9.4% and 12.9% primarily due to a decrease in core model bookings during the first nine months of 2017;
   
• Salaries and service costs decreased by 7.0% and 8.5% for the three and nine months ended in September 30, 2017, primarily due to severance paid to the Company’s former Chief Executive Officer and other employees in the first nine months of 2016, 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 travel, meals and entertainment expenses during the first nine months of 2017;
   
• Office and general expenses increased 1.4% for the three months ended in September 30, 2017, primarily due to costs associated with the Company’s 50th anniversary in 2017 and higher bad debt expense. For the nine months ended in September 30, 2017, office and general expenses decreased 10.2% primarily due to expenses incurred during the first nine months of 2016 for executive recruitment and non-income taxes;
   
• Amortization and depreciation expense increased by 160.7% and 127.8% for the three and nine months ended in September 30, 2017, primarily due to the Company’s new accounting and reporting software being put in service during the fourth quarter of 2016; and
   
• Corporate overhead expenses increased by 22.9% and 6.4% for the three and nine months ended in September 30, 2017, primarily due to increases in professional service fees and an increase in 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 third quarter ended September 30, 2017 filed with the Securities and Exchange Commission on November 9, 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