Wilhelmina International (WHLM) 10-Q 12 May 17 2017 Q1 Quarterly report Financial data

Document And Entity Information

Document And Entity Information - shares	3 Months Ended
	Mar. 31, 2017	May 12, 2017
Document Information [Line Items]
Entity Registrant Name	Wilhelmina International, Inc.
Entity Central Index Key	1,013,706
Trading Symbol	whlm
Current Fiscal Year End Date	--12-31
Entity Filer Category	Smaller Reporting Company
Entity Current Reporting Status	Yes
Entity Voluntary Filers	No
Entity Well-known Seasoned Issuer	No
Entity Common Stock, Shares Outstanding (in shares)		5,381,668
Document Type	10-Q
Document Period End Date	Mar. 31, 2017
Document Fiscal Year Focus	2,017
Document Fiscal Period Focus	Q1
Amendment Flag	false

Consolidated Balance Sheets (Cu

Consolidated Balance Sheets (Current Period Unaudited) - USD ($) $ in Thousands	Mar. 31, 2017	Dec. 31, 2016
Current assets:
Cash and cash equivalents	$ 3,897	$ 5,688
Accounts receivable, net of allowance for doubtful accounts of $1,796 and $1,646, respectively	18,485	16,947
Prepaid expenses and other current assets	347	847
Total current assets	22,729	23,482
Property and equipment, net of accumulated depreciation of $1,721 and $1,525, respectively	3,264	3,206
Trademarks and trade names with indefinite lives	8,467	8,467
Other intangibles with finite lives, net of accumulated amortization of $8,548 and $8,527 respectively	189	210
Goodwill	13,192	13,192
Other assets	125	164
TOTAL ASSETS	47,966	48,721
Current liabilities:
Accounts payable and accrued liabilities	3,702	4,781
Due to models	14,630	14,217
Contingent consideration to seller - current		97
Term loan - current	507	502
Total current liabilities	18,839	19,597
Long term liabilities:
Deferred income tax liability	1,521	1,567
Term loan - non-current	2,018	2,147
Total long-term liabilities	3,539	3,714
Total liabilities	22,378	23,311
Shareholders’ equity:
Preferred stock, $0.01 par value, 10,000,000 shares authorized; none issued
Common stock, $0.01 par value, 12,500,000 shares authorized; 6,472,038 shares issued at March 31, 2017 and December 31, 2016	65	65
Treasury stock, 1,090,370 at March 31, 2017 and December 31, 2016, at cost	(4,893)	(4,893)
Additional paid-in capital	87,460	87,336
Accumulated deficit	(57,039)	(57,048)
Accumulated other comprehensive loss	(5)	(50)
Total shareholders’ equity	25,588	25,410
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY	$ 47,966	$ 48,721

Consolidated Balance Sheets (C3

Consolidated Balance Sheets (Current Period Unaudited) (Parentheticals) - USD ($) $ in Thousands	Mar. 31, 2017	Dec. 31, 2016
Property and equipment, accumulated depreciation	$ 1,721	$ 1,525
Other intangibles, accumulated depreciation	$ 8,548	$ 8,527
Preferred stock, par value (in dollars per share)	$ 0.01	$ 0.01
Preferred stock, shares authorized (in shares)	10,000,000	10,000,000
Preferred stock, shares issued (in shares)	0	0
Common stock, par value (in dollars per share)	$ 0.01	$ 0.01
Common stock, shares authorized (in shares)	12,500,000	12,500,000
Common stock, shares issued (in shares)	6,472,038	6,472,038
Treasury stock, shares (in shares)	1,090,370	1,090,370

Statements of Operations and Co

Statements of Operations and Comprehensive Income (Unaudited) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2017	Mar. 31, 2016
Service revenues	$ 19,123	$ 21,390
License fees and other income	28	27
Total revenues	19,151	21,417
Model costs	13,699	15,109
Revenues net of model costs	5,452	6,308
Operating expenses:
Salaries and service costs	3,636	4,189
Office and general expenses	1,152	1,624
Amortization and depreciation	217	104
Corporate overhead	346	293
Total operating expenses	5,351	6,210
Operating income	101	98
Other income (expense):
Foreign exchange gain (loss)	(22)	4
Interest expense	(29)
Loss from unconsolidated affiliate	(29)	(37)
Total other expense	(80)	(33)
Income before provision for income taxes	21	65
Provision for income taxes: (expense) benefit:
Current	(60)	(13)
Deferred income taxes	46	(176)
Income tax expense	(12)	(189)
Net income (loss)	9	(124)
Other comprehensive income:
Foreign currency translation income (loss)	45	(15)
Total comprehensive income (loss)	$ 54	$ (139)
Basic income (loss) per common share (in dollars per share)	$ 0	$ (0.02)
Diluted income (loss) per common share (in dollars per share)	$ 0	$ (0.02)
Weighted average common shares outstanding-basic (in shares)	5,382	5,844
Weighted average common shares outstanding-diluted (in shares)	5,399	5,844

Consolidated Statement of Cash

Consolidated Statement of Cash Flow (Unaudited) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2017	Mar. 31, 2016
Cash flows from operating activities:
Net income (loss):	$ 9	$ (124)
Adjustments to reconcile net income (loss) to net cash used in operating activities:
Amortization and depreciation	217	104
Share based payment expense	124	77
Deferred income taxes	46	(176)
Bad debt expense	38
Changes in operating assets and liabilities:
Accounts receivable	(1,576)	(2,548)
Prepaid expenses and other current assets	500	(226)
Other assets	39	106
Due to models	413	1,111
Accounts payable and accrued liabilities	(1,079)	70
Contingent liability to seller	(97)
Net cash used by operating activities	(1,458)	(1,254)
Cash flows from investing activities:
Purchases of property and equipment	(254)	(364)
Net cash used in investing activities	(254)	(364)
Cash flows from financing activities:
Purchases of treasury stock		(45)
Repayment of term loan	(124)
Net cash used in financing activities	(124)	(45)
Foreign currency effect on cash flows:	45	(15)
Net change in cash and cash equivalents:	(1,791)	(1,678)
Cash and cash equivalents, beginning of period	5,688	4,556
Cash and cash equivalents, end of period	3,897	2,878
Supplemental disclosures of cash flow information:
Cash paid for interest	29
Cash refund of income taxes	$ 69

Note 1 - Basis of Presentation

Note 1 - Basis of Presentation	3 Months Ended
	Mar. 31, 2017
Notes to Financial Statements
Basis of Accounting [Text Block]	Note 1. The interim consolidated financial statements included herein have been prepared by Wilhelmina International, Inc. (together with its subsidiaries "Wilhelmina" or the "Company") without audit, pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”). Although certain information and footnote disclosures normally included in the consolidated financial statements prepared in accordance with accounting principles generally accepted in the United States of America have been condensed or omitted pursuant to those rules and regulations, all adjustments considered necessary in order to make the consolidated financial statements not misleading have been included. In the opinion of the Company’s management, the accompanying interim unaudited consolidated financial statements reflect all adjustments, of a normal recurring nature, that are necessary for a fair presentation of the Company’s consolidated financial position, results of operations and cash flows for the periods presented. These interim unaudited consolidated financial statements should be read in conjunction with the audited consolidated financial statements and the notes thereto included in the Company’s Annual Report on Form 10 December 31, 2016. may

Note 2 - Business

Note 2 - Business	3 Months Ended
	Mar. 31, 2017
Notes to Financial Statements
Nature of Operations [Text Block]	Note 2. The primary business of Wilhelmina is fashion model management. These business operations are headquartered in New York City. The Company’s predecessor was founded in 1967 one Wilhelmina’s London office (“London”) provides a footprint for the Company in Western Europe. It also serves as a base of operations to service the Company’s European clients and as a talent development office for European models and artists.

Note 3 - Business Acquisition

Note 3 - Business Acquisition	3 Months Ended
	Mar. 31, 2017
Notes to Financial Statements
Business Combination Disclosure [Text Block]	Note 3. Accounting Standard Update (“ASU”) 2015 17, January 1, 2017,

Note 4 - Foreign Currency Trans

Note 4 - Foreign Currency Translation	3 Months Ended
	Mar. 31, 2017
Notes to Financial Statements
Foreign Currency Disclosure [Text Block]	Note 4. The functional currency of London is the British Pound. Assets and liabilities are translated into U.S. dollars at the exchange rates in effect at each balance sheet date, revenues and expenses are translated at average monthly exchange rates and resulting translation gains or losses are accumulated in other comprehensive income as a separate component of shareholders’ equity.

Note 5 - Line of Credit

Note 5 - Line of Credit	3 Months Ended
	Mar. 31, 2017
Notes to Financial Statements
Debt Disclosure [Text Block]	Note 5. The Company has a credit agreement with Amegy Bank which provides a $4.0 $3.0 October 24, 2016. 80% $20 0.50% March 31, 2017, $0.2 October 24, 2017. On August 16, 2016, $2.7 4.5% November, 2016, 47 60 October 24, 2020.

Note 6 - Commitments and Contin

Note 6 - Commitments and Contingencies	3 Months Ended
	Mar. 31, 2017
Notes to Financial Statements
Commitments and Contingencies Disclosure [Text Block]	Note 6. On October 24, 2013, January 6, 2014, August 11, 2014, March 3, 2014, “may October 6, 2015, June 2016. On June 6, 2016, June 14, 2016, In addition to the legal proceedings disclosed herein, the Company is also engaged in various legal proceedings that are routine in nature and incidental to its business. None of these routine proceedings, either individually or in the aggregate, are believed likely, in the Company's opinion, to have a material adverse effect on its consolidated financial position or its results of operations.

Note 7 - Income Taxes

Note 7 - Income Taxes	3 Months Ended
	Mar. 31, 2017
Notes to Financial Statements
Income Tax Disclosure [Text Block]	Note 7. Generally, the Company’s combined effective tax rate is high relative to reported net income as a result of certain amounts of amortization expense, stock based compensation, and corporate overhead not being deductible and income being attributable to certain states in which it operates. In recent years, the majority of taxes being paid by the Company were state taxes, not federal taxes. The Company operates in four March 31, 2017, $1.9 Income taxes were high in the three March 31, 2016

Note 8 - Treasury Stock

Note 8 - Treasury Stock	3 Months Ended
	Mar. 31, 2017
Notes to Financial Statements
Treasury Stock [Text Block]	Note 8. During 2012, 500,000 2013, 1,000,000 On August 12, 2016, 500,000 may 1,500,000 may may From 2012 March 31, 2017, 1,090,370 $4.49 $4.9 first three 2017.

Note 9 - Related Parties

Note 9 - Related Parties	3 Months Ended
	Mar. 31, 2017
Notes to Financial Statements
Related Party Transactions Disclosure [Text Block]	Note 9. The Executive Chairman of the Company, Mark E. Schwarz, is also the chairman, chief executive officer and portfolio manager of Newcastle Capital Management, L.P. (“NCM”). NCM is the general partner of Newcastle Partners L.P. (“Newcastle”), which is the largest shareholder of the Company. Clinton Coleman (Managing Director at NCM) and James Dvorak (Managing Director at NCM) also serve as directors of the Company. The Company’s corporate headquarters are located at 200 1400, 75201, $2.5 $7.5 three March 31, 2017 2016. not March 31, 2017 2016. The Company owned a non-consolidated 50% 14 December 9, 2016, March 1, 2017, $0.1 December 9, 2016

Note 10 - Subsequent Events

Note 10 - Subsequent Events	3 Months Ended
	Mar. 31, 2017
Notes to Financial Statements
Subsequent Events [Text Block]	Note 10. Effective May 4, 2017, December 31, 2017.

Note 3 - Business Acquisition (

Note 3 - Business Acquisition (Details Textual) $ in Millions	Jan. 05, 2015USD ($)
Business Acquisition, Percentage of Voting Interests Acquired	17.00%
Union Models Management [Member]
Business Combination, Consideration Transferred	$ 1

Note 5 - Line of Credit (Detail

Note 5 - Line of Credit (Details Textual) - Amegy [Member] - Credit Agreement After Fifth Amendment [Member] $ in Millions	Aug. 16, 2016USD ($)	Mar. 31, 2017USD ($)	Dec. 31, 2016USD ($)
Debt Agreement, Borrowing Base Percentage of Collateral Modified From		80.00%
Debt Agreement, Covenant Compliance, Minimum Net Worth		$ 20
Debt Instrument, Interest Rate, Stated Percentage	4.50%
Long-term Debt, Number of Monthly Payments, Principal and Interest	47
Debt Instrument, Amortization Period	5 years
Revolving Credit Facility [Member]
Debt Agreement, Maximum Borrowing Capacity		4
Term Loan [Member]
Debt Agreement, Maximum Borrowing Capacity		$ 3
Proceeds from Issuance of Long-term Debt	$ 2.7
Term Loan [Member] | Prime Rate [Member]
Debt Instrument, Basis Spread on Variable Rate		0.50%
Standby Letters of Credit [Member]
Line of Credit Facility, Maximum Borrowing Capacity			$ 0.2

Note 7 - Income Taxes (Details

Note 7 - Income Taxes (Details Textual) $ in Millions	Mar. 31, 2017	Dec. 31, 2016USD ($)
Number of States in which Entity Operates	4
Operating Loss Carryforwards		$ 1.9

Note 8 - Treasury Stock (Detail

Note 8 - Treasury Stock (Details Textual) - USD ($) $ / shares in Units, $ in Millions	Aug. 12, 2016	Mar. 31, 2017	Dec. 31, 2013	Dec. 31, 2012
Stock Repurchase Program, Number of Shares Authorized to be Repurchased	1,500,000		1,000,000	500,000
Stock Repurchase Program, Additional Shares Authorized	500,000
Treasury Stock, Shares, Acquired		1,090,370
Treasury Stock Acquired, Average Cost Per Share		$ 4.49
Treasury Stock, Value, Acquired, Cost Method		$ 4.9

Note 9 - Related Parties (Detai

Note 9 - Related Parties (Details Textual) - USD ($)	Mar. 01, 2017	Mar. 31, 2017	Mar. 31, 2015	Mar. 31, 2016
Wilhelmina Kids and Creative Management, LLC [Member]
Equity Method Investment, Ownership Percentage		50.00%
Services Agreements [Member]
Related Party Transaction, Expenses from Transactions with Related Party		$ 7,500	$ 7,500
NCM [Member]
Related Party Transaction, Monthly Rent		2,500
Due to Related Parties, Current		$ 0		$ 0
Wilhelmina Kids and Creative Management, LLC [Member] | Payments to Liquidate Enterprise [Member]
Related Party Transaction, Amounts of Transaction	$ 100,000