Wilhelmina International (WHLM) 10-Q 9 Nov 18 2018 Q3 Quarterly report Financial data

Document And Entity Information

Document And Entity Information - shares	9 Months Ended
	Sep. 30, 2018	Nov. 09, 2018
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	Non-accelerated Filer
Entity Current Reporting Status	Yes
Entity Emerging Growth Company	false
Entity Small Business	true
Entity Common Stock, Shares Outstanding (in shares)		5,265,768
Document Type	10-Q
Document Period End Date	Sep. 30, 2018
Document Fiscal Year Focus	2,018
Document Fiscal Period Focus	Q3
Amendment Flag	false

Consolidated Balance Sheets (Cu

Consolidated Balance Sheets (Current Period Unaudited) - USD ($) $ in Thousands	Sep. 30, 2018	Dec. 31, 2017
Current assets:
Cash and cash equivalents	$ 5,160	$ 4,256
Accounts receivable, net of allowance for doubtful accounts of $1,913 and $2,171, respectively	13,853	13,627
Prepaid expenses and other current assets	287	180
Total current assets	19,300	18,063
Property and equipment, net of accumulated depreciation of $3,020 and $2,349, respectively	2,661	3,039
Trademarks and trade names with indefinite lives	8,467	8,467
Other intangibles with finite lives, net of accumulated amortization of$8,664 and $8,608, respectively	72	128
Goodwill	13,192	13,192
Other assets	117	137
TOTAL ASSETS	43,809	43,026
Current liabilities:
Accounts payable and accrued liabilities	4,847	3,985
Due to models	9,555	10,190
Term loan - current	554	524
Total current liabilities	14,956	14,699
Long term liabilities:
Deferred income tax liability	534	521
Term loan - non-current	1,903	1,623
Total long term liabilities	2,437	2,144
Total liabilities	17,393	16,843
Shareholders’ equity:
Common stock, $0.01 par value, 9,000,000 shares authorized; 6,472,038 shares issued at September 30, 2018 and December 31, 2017	65	65
Treasury stock, 1,203,491 and 1,090,370 shares at September 30, 2018 and December 31, 2017, at cost	(5,681)	(4,893)
Additional paid-in capital	88,172	87,892
Accumulated deficit	(56,088)	(56,885)
Accumulated other comprehensive income (loss)	(52)	4
Total shareholders’ equity	26,416	26,183
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY	$ 43,809	$ 43,026

Consolidated Balance Sheets (_2

Consolidated Balance Sheets (Current Period Unaudited) (Parentheticals) - USD ($) $ in Thousands	Sep. 30, 2018	Dec. 31, 2017
Accounts receivable, allowance for doubtful accounts	$ 1,913	$ 2,171
Property and equipment, accumulated depreciation	$ 3,020	$ 2,349
Common stock, par value (in dollars per share)	$ 0.01	$ 0.01
Common stock, shares authorized (in shares)	9,000,000	9,000,000
Common stock, shares issued (in shares)	6,472,038	6,472,038
Treasury stock, shares (in shares)	1,203,491	1,090,370

Statements of Operations and Co

Statements of Operations and Comprehensive Income (Unaudited) - USD ($) shares in Thousands, $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2018	Sep. 30, 2017	Sep. 30, 2018	Sep. 30, 2017
Revenues:
Revenues	$ 19,153	$ 18,718	$ 59,465	$ 56,154
Model costs	13,777	13,265	42,524	39,910
Revenues net of model costs	5,376	5,453	16,941	16,244
Operating expenses:
Salaries and service costs	3,478	3,447	10,509	10,611
Office and general expenses	1,067	1,400	3,643	3,832
Amortization and depreciation	252	232	727	672
Corporate overhead	298	236	895	817
Total operating expenses	5,095	5,315	15,774	15,932
Operating income	281	138	1,167	312
Other expense:
Foreign exchange loss	(17)	(18)	(64)	(54)
Interest expense	(26)	(31)	(73)	(88)
Loss from unconsolidated affiliate		(2)		(40)
Total other expense	(43)	(51)	(137)	(182)
Income before provision for income taxes	238	87	1,030	130
Provision for income taxes: (expense) benefit
Current	(80)	(57)	(220)	(182)
Deferred	50	(4)	(13)	35
Income tax expense	(30)	(61)	(233)	(147)
Net income (loss)	208	26	797	(17)
Other comprehensive income (expense):
Foreign currency translation income (expense)	(24)	20	(56)	85
Total comprehensive income	$ 184	$ 46	$ 741	$ 68
Basic net income per common share (in dollars per share)	$ 0.04	$ 0	$ 0.15	$ 0
Diluted net income per common share (in dollars per share)	$ 0.04	$ 0	$ 0.15	$ 0
Weighted average common shares outstanding-basic (in shares)	5,309	5,382	5,353	5,382
Weighted average common shares outstanding-diluted (in shares)	5,318	5,382	5,361	5,382
Service [Member]
Revenues:
Revenues	$ 19,143	$ 18,712	$ 59,425	$ 56,120
License Fees and Other [Member]
Revenues:
Revenues	$ 10	$ 6	$ 40	$ 34

Consolidated Statements of Shar

Consolidated Statements of Shareholders' Equity - USD ($) $ in Thousands	Common Stock [Member]	Treasury Stock [Member]	Additional Paid-in Capital [Member]	Retained Earnings [Member]	AOCI Attributable to Parent [Member]	Total
Balances (in shares) at Dec. 31, 2016	6,472,000	(1,090,000)
Balances at Dec. 31, 2016	$ 65	$ (4,893)	$ 87,336	$ (57,048)	$ (50)	$ 25,410
Share based payment expense			124			124
Net income (loss) to common shareholders				9		9
Purchases of treasury stock
Foreign currency translation					45	45
Balances (in shares) at Mar. 31, 2017	6,472,000	(1,090,000)
Balances at Mar. 31, 2017	$ 65	$ (4,893)	87,460	(57,039)	(5)	25,588
Balances (in shares) at Dec. 31, 2016	6,472,000	(1,090,000)
Balances at Dec. 31, 2016	$ 65	$ (4,893)	87,336	(57,048)	(50)	25,410
Net income (loss) to common shareholders						(17)
Foreign currency translation						85
Balances (in shares) at Sep. 30, 2017	6,472,000	(1,090,000)
Balances at Sep. 30, 2017	$ 65	$ (4,893)	87,748	(57,065)	35	25,890
Balances (in shares) at Mar. 31, 2017	6,472,000	(1,090,000)
Balances at Mar. 31, 2017	$ 65	$ (4,893)	87,460	(57,039)	(5)	25,588
Share based payment expense			143			143
Net income (loss) to common shareholders				(52)		(52)
Purchases of treasury stock
Foreign currency translation					20	20
Balances (in shares) at Jun. 30, 2017	6,472,000	(1,090,000)
Balances at Jun. 30, 2017	$ 65	$ (4,893)	87,603	(57,091)	15	25,699
Share based payment expense			145			145
Net income (loss) to common shareholders				26		26
Purchases of treasury stock
Foreign currency translation					20	20
Balances (in shares) at Sep. 30, 2017	6,472,000	(1,090,000)
Balances at Sep. 30, 2017	$ 65	$ (4,893)	87,748	(57,065)	35	25,890
Balances (in shares) at Dec. 31, 2017	6,472,000	(1,090,000)
Balances at Dec. 31, 2017	$ 65	$ (4,893)	87,892	(56,885)	4	26,183
Share based payment expense			109			109
Net income (loss) to common shareholders				225		225
Purchases of treasury stock		$ (36)				(36)
Foreign currency translation					43	43
Balances (in shares) at Mar. 31, 2018	6,472,000	(1,096,000)
Balances at Mar. 31, 2018	$ 65	$ (4,929)	88,001	(56,660)	47	26,524
Purchases of treasury stock (in shares)		(6,000)
Balances (in shares) at Dec. 31, 2017	6,472,000	(1,090,000)
Balances at Dec. 31, 2017	$ 65	$ (4,893)	87,892	(56,885)	4	26,183
Net income (loss) to common shareholders						797
Foreign currency translation						(56)
Balances (in shares) at Sep. 30, 2018	6,472,000	(1,203,000)
Balances at Sep. 30, 2018	$ 65	$ (5,681)	88,172	(56,088)	(52)	$ 26,416
Purchases of treasury stock (in shares)						(113,121)
Balances (in shares) at Mar. 31, 2018	6,472,000	(1,096,000)
Balances at Mar. 31, 2018	$ 65	$ (4,929)	88,001	(56,660)	47	$ 26,524
Share based payment expense			87			87
Net income (loss) to common shareholders				364		364
Purchases of treasury stock		$ (46)				(46)
Foreign currency translation					(75)	(75)
Balances (in shares) at Jun. 30, 2018	6,472,000	(1,103,000)
Balances at Jun. 30, 2018	$ 65	$ (4,975)	88,088	(56,296)	(28)	26,854
Purchases of treasury stock (in shares)		(7,000)
Share based payment expense			84			84
Net income (loss) to common shareholders				208		208
Purchases of treasury stock		$ (706)				(706)
Foreign currency translation					(24)	(24)
Balances (in shares) at Sep. 30, 2018	6,472,000	(1,203,000)
Balances at Sep. 30, 2018	$ 65	$ (5,681)	$ 88,172	$ (56,088)	$ (52)	$ 26,416
Purchases of treasury stock (in shares)		(100,000)

Consolidated Statements of Cash

Consolidated Statements of Cash Flow (Unaudited) - USD ($) $ in Thousands	9 Months Ended
	Sep. 30, 2018	Sep. 30, 2017
Cash flows from operating activities:
Net income (loss):	$ 797	$ (17)
Adjustments to reconcile net income to net cash used in operating activities:
Amortization and depreciation	727	672
Share based payment expense	280	412
Deferred income taxes	13	(35)
Bad debt expense	70	128
Changes in operating assets and liabilities:
Accounts receivable	(296)	276
Prepaid expenses and other current assets	(107)	560
Other assets	20	49
Due to models	(635)	(3,242)
Accounts payable and accrued liabilities	862	(865)
Contingent liability to seller		(97)
Net cash (used in) provided by operating activities	1,731	(2,159)
Cash flows from investing activities:
Purchases of property and equipment	(293)	(600)
Net cash used in investing activities	(293)	(600)
Cash flows from financing activities:
Purchases of treasury stock	(788)
Proceeds from term loan	700
Repayment of term loan	(390)	(374)
Net cash used in financing activities	(478)	(374)
Foreign currency effect on cash flows:	(56)	85
Net change in cash and cash equivalents:	904	(3,048)
Cash and cash equivalents, beginning of period	4,256	5,688
Cash and cash equivalents, end of period	5,160	2,640
Supplemental disclosures of cash flow information:
Cash paid for interest	71	74
Cash refund of income taxes	$ 10	$ 87

Note 1 - Basis of Presentation

Note 1 - Basis of Presentation	9 Months Ended
	Sep. 30, 2018
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 10 December 31, 2017. not may

Note 2 - Business

Note 2 - Business	9 Months Ended
	Sep. 30, 2018
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

Note 3 - Foreign Currency Trans

Note 3 - Foreign Currency Translation	9 Months Ended
	Sep. 30, 2018
Notes to Financial Statements
Foreign Currency Disclosure [Text Block]	Note 3. 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 4 - Line of Credit

Note 4 - Line of Credit	9 Months Ended
	Sep. 30, 2018
Notes to Financial Statements
Debt Disclosure [Text Block]	Note 4. The Company has a credit agreement with Amegy Bank which provides a $4.0 $3.0 October 24, 2016. 80% $20.0 0.50% September 30, 2018, $0.2 $0.9 On August 16, 2016, $2.7 4.5% November, 2016, 47 60 October 24, 2020. On July 16, 2018, $1.0 may July 12, 2019, 5.15% July 12, 2019. 60 July 12, 2023. three Amounts outstanding under the additional term loan further reduce the availability under the Company’s revolving line of credit with Amegy Bank. On August 1, 2018, $0.7 100,000 September 30, 2018, $2.5 two The revolving line of credit with Amegy Bank expired by its terms on October 24, 2018. November 7, 2018, one October 24, 2019.

Note 5 - Commitments and Contin

Note 5 - Commitments and Contingencies	9 Months Ended
	Sep. 30, 2018
Notes to Financial Statements
Commitments and Contingencies Disclosure [Text Block]	Note 5. On October 24, 2013, January 6, 2014, August 11, 2014, March 3, 2014, “may not not not October 6, 2015, May 26, 2017. three five two May 24, 2018. August 16, 2017, On June 6, 2016, August 16, 2017. September 29, 2017, May 10, 2018. 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

Note 6 - Income Taxes

Note 6 - Income Taxes	9 Months Ended
	Sep. 30, 2018
Notes to Financial Statements
Income Tax Disclosure [Text Block]	Note 6. Generally, the Company’s combined effective tax rate is high relative to reported net income as a result of certain amortization expense, stock based compensation, and corporate overhead not not four September 30, 2018, $1.5 The U.S. Tax Cuts and Jobs Act enacted on December 22, 2017 2018, 35% 21%

Note 7 - Common Stock

Note 7 - Common Stock	9 Months Ended
	Sep. 30, 2018
Notes to Financial Statements
Stockholders' Equity Note Disclosure [Text Block]	Note 7. On July 7, 2017, June 13, 2017, 12,500,000 9,000,000

Note 8 - Treasury Shares

Note 8 - Treasury Shares	9 Months Ended
	Sep. 30, 2018
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 not may From 2012 September 30, 2018, 1,203,491 $4.72 $5.7 first nine 2018, 113,121

Note 9 - Related Parties

Note 9 - Related Parties	9 Months Ended
	Sep. 30, 2018
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. James Dvorak (Managing Director at NCM) also serves as a director of the Company. The Company’s corporate headquarters are located at 200 1400, 75201, $2.5 $7.5 $22.5 three nine September 30, 2018 2017. not September 30, 2018. The Company previously owned an unconsolidated 50% 14 December 9, 2016, March 1, 2017, $0.1 December 9, 2016 no

Note 10 - Subsequent Events

Note 10 - Subsequent Events	9 Months Ended
	Sep. 30, 2018
Notes to Financial Statements
Subsequent Events [Text Block]	Note 10. On November 7, 2018, one October 24, 2019.

Note 4 - Line of Credit (Detail

Note 4 - Line of Credit (Details Textual) $ in Thousands	Nov. 07, 2018	Aug. 01, 2018USD ($)shares	Aug. 16, 2016USD ($)	Sep. 30, 2018USD ($)shares	Sep. 30, 2017USD ($)	Jul. 16, 2018USD ($)
Proceeds from Issuance of Long-term Debt, Total				$ 700
Treasury Stock, Shares, Acquired | shares		100,000		113,121
Amegy [Member] | Credit Agreement After Fifth Amendment [Member]
Debt Agreement, Borrowing Base Percentage of Collateral Modified From				80.00%
Debt Agreement, Covenant Compliance, Minimum Net Worth				$ 20,000
Amegy [Member] | Credit Agreement After Fifth Amendment [Member] | Revolving Credit Facility [Member]
Debt Agreement, Maximum Borrowing Capacity				4,000
Amegy [Member] | Credit Agreement After Fifth Amendment [Member] | Revolving Credit Facility [Member] | Subsequent Event [Member]
Line of Credit, Extension of Maturity	1 year
Amegy [Member] | Credit Agreement After Fifth Amendment [Member] | Term Loan [Member]
Debt Agreement, Maximum Borrowing Capacity				$ 3,000
Proceeds from Issuance of Long-term Debt, Total			$ 2,700
Debt Instrument, Interest Rate, Stated Percentage			4.50%
Long-term Debt, Number of Monthly Payments, Principal and Interest			47
Amegy [Member] | Credit Agreement After Fifth Amendment [Member] | Term Loan [Member] | Prime Rate [Member]
Debt Instrument, Basis Spread on Variable Rate				0.50%
Amegy [Member] | Credit Agreement After Fifth Amendment [Member] | Standby Letters of Credit [Member]
Line of Credit Facility, Maximum Borrowing Capacity				$ 200
Line of Credit Facility, Additional Borrowing Capacity				900
Amegy [Member] | Tenth Amendment to Credit Agreement [Member] | Term Loan [Member]
Debt Agreement, Maximum Borrowing Capacity						$ 1,000
Proceeds from Issuance of Long-term Debt, Total		$ 700
Debt Instrument, Interest Rate, Stated Percentage						5.15%
Amegy [Member] | Credit Agreement After Fifth Amendment and Tenth Amendment to Credit [Member] | Term Loan [Member]
Long-term Debt, Total				$ 2,500

Note 6 - Income Taxes (Details

Note 6 - Income Taxes (Details Textual) - USD ($) $ in Millions	9 Months Ended	12 Months Ended
	Sep. 30, 2018	Dec. 31, 2017
Operating Loss Carryforwards, Total	$ 1.5
Effective Income Tax Rate Reconciliation, at Federal Statutory Income Tax Rate, Percent	21.00%	35.00%

Note 7 - Common Stock (Details

Note 7 - Common Stock (Details Textual) - shares	Sep. 30, 2018	Dec. 31, 2017	Jul. 07, 2017	Dec. 31, 2016
Common Stock, Shares Authorized	9,000,000	9,000,000	9,000,000	12,500,000

Note 8 - Treasury Shares (Detai

Note 8 - Treasury Shares (Details Textual) - USD ($) $ / shares in Units, $ in Thousands	Aug. 01, 2018	Aug. 12, 2016	Sep. 30, 2018	Jun. 30, 2018	Mar. 31, 2018	Sep. 30, 2017	Jun. 30, 2017	Mar. 31, 2017	Sep. 30, 2018	Sep. 30, 2018	Dec. 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, Ending Balance			1,203,491						1,203,491	1,203,491	1,090,370
Treasury Stock Acquired, Average Cost Per Share										$ 4.72
Treasury Stock, Value, Acquired, Cost Method			$ 706	$ 46	$ 36					$ 5,700
Treasury Stock, Shares, Acquired	100,000								113,121

Note 9 - Related Parties (Detai

Note 9 - Related Parties (Details Textual) - USD ($)	Mar. 01, 2017	Sep. 30, 2018	Sep. 30, 2017	Sep. 30, 2018	Sep. 30, 2017
Wilhelmina Kids and Creative Management, LLC [Member]
Equity Method Investment, Ownership Percentage	50.00%
NCM [Member]
Due to Related Parties, Current, Total		$ 0		$ 0
Rent [Member]
Related Party Transaction, Monthly Rent				2,500
Services Agreements [Member]
Related Party Transaction, Expenses from Transactions with Related Party		$ 7,500	$ 7,500	$ 22,500	$ 22,500
Payments to Liquidate Enterprise [Member] | Wilhelmina Kids and Creative Management, LLC [Member]
Related Party Transaction, Amounts of Transaction	$ 100,000

Note 10 - Subsequent Events (De

Note 10 - Subsequent Events (Details Textual)	Nov. 07, 2018
Amegy [Member] | Credit Agreement After Fifth Amendment [Member] | Revolving Credit Facility [Member] | Subsequent Event [Member]
Line of Credit, Extension of Maturity	1 year