Wilhelmina International (WHLM) 10-Q 11 May 22 2022 Q1 Quarterly report Financial data

Document And Entity Information

Document And Entity Information - shares	3 Months Ended
	Mar. 31, 2022	May 11, 2022
Document Information [Line Items]
Entity Central Index Key	0001013706
Entity Registrant Name	Wilhelmina International, Inc.
Amendment Flag	false
Current Fiscal Year End Date	--12-31
Document Fiscal Period Focus	Q1
Document Fiscal Year Focus	2022
Document Type	10-Q
Document Quarterly Report	true
Document Period End Date	Mar. 31, 2022
Document Transition Report	false
Entity File Number	001-36589
Entity Incorporation, State or Country Code	DE
Entity Tax Identification Number	74-2781950
Entity Address, Address Line One	5420 Lyndon B Johnson Freeway, Box #25
Entity Address, City or Town	Dallas
Entity Address, State or Province	TX
Entity Address, Postal Zip Code	75240
City Area Code	214
Local Phone Number	661-7488
Title of 12(b) Security	Common Stock, $0.01 par value
Trading Symbol	WHLM
Security Exchange Name	NASDAQ
Entity Current Reporting Status	Yes
Entity Interactive Data Current	Yes
Entity Filer Category	Non-accelerated Filer
Entity Small Business	true
Entity Emerging Growth Company	false
Entity Shell Company	false
Entity Common Stock, Shares Outstanding		5,157,344

Condensed Consolidated Balance

Condensed Consolidated Balance Sheets (Current Period Unaudited) - USD ($) $ in Thousands	Mar. 31, 2022	Dec. 31, 2021
Current assets:
Cash and cash equivalents	$ 9,428	$ 10,251
Accounts receivable, net of allowance for doubtful accounts of $1,612 and $1,580, respectively	9,555	8,858
Prepaid expenses and other current assets	190	91
Total current assets	19,173	19,200
Property and equipment, net of accumulated depreciation of $4,135 and $4,094, respectively	142	168
Right of use assets-operating	1,627	1,745
Right of use assets-finance	183	199
Trademarks and trade names with indefinite lives	8,467	8,467
Goodwill	7,547	7,547
Other assets	100	98
TOTAL ASSETS	37,239	37,424
Current liabilities:
Accounts payable and accrued liabilities	3,415	3,707
Due to models	8,150	8,090
Deferred revenue	0	535
Lease liabilities – operating, current	471	463
Lease liabilities – finance, current	60	64
Total current liabilities	12,096	12,859
Long term liabilities:
Deferred income tax, net	2,144	2,048
Lease liabilities – operating, non-current	1,235	1,361
Lease liabilities – finance, non-current	131	143
Total long-term liabilities	3,510	3,552
Total liabilities	15,606	16,411
Shareholders’ equity:
Common stock, $0.01 par value, 9,000,000 shares authorized; 6,472,038 shares issued at March 31, 2022 and December 31, 2021	65	65
Treasury stock, 1,314,694 shares at March 31, 2022 and December 31, 2021, at cost	(6,371)	(6,371)
Additional paid-in capital	88,635	88,580
Accumulated deficit	(60,499)	(61,238)
Accumulated other comprehensive loss	(197)	(23)
Total shareholders’ equity	21,633	21,013
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY	$ 37,239	$ 37,424

Condensed Consolidated Balanc_2

Condensed Consolidated Balance Sheets (Current Period Unaudited) (Parentheticals) - USD ($) $ in Thousands	Mar. 31, 2022	Dec. 31, 2021
Accounts receivable, allowance for doubtful accounts	$ 1,612	$ 1,580
Property and equipment, accumulated depreciation	$ 4,135	$ 4,094
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)	1,314,694	1,314,694

Condensed Consolidated Statemen

Condensed Consolidated Statements of Income and Comprehensive Income (Unaudited) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2022	Mar. 31, 2021
Revenues:
Revenues	$ 16,645	$ 11,976
Revenues	16,645	11,976
Model costs	12,097	8,639
Revenues, net of model costs	4,548	3,337
Operating expenses:
Salaries and service costs	2,652	1,871
Office and general expenses	709	855
Amortization and depreciation	59	266
Corporate overhead	254	245
Total operating expenses	3,674	3,237
Operating income	874	100
Other expense (income):
Foreign exchange loss	6	68
Gain on forgiveness of loan	0	(1,865)
Employee retention payroll tax credit	0	(426)
Interest expense	3	29
Total other expense (income)	9	(2,194)
Income before provision for income taxes	865	2,294
Provision for income taxes:
Current	(30)	(36)
Deferred	(96)	(37)
Provision for income taxes, net	(126)	(73)
Net income	739	2,221
Other comprehensive loss:
Foreign currency translation adjustment	(174)	(19)
Total comprehensive income	$ 565	$ 2,202
Basic net income per common share (in dollars per share)	$ 0.14	$ 0.43
Diluted net income per common share (in dollars per share)	$ 0.14	$ 0.43
Weighted average common shares outstanding-basic (in shares)	5,157	5,157
Weighted average common shares outstanding-diluted (in shares)	5,157	5,157
Service [Member]
Revenues:
Revenues	$ 16,638	$ 11,966
Revenues	16,638	11,966
License Fees [Member]
Revenues:
Revenues	7	10
Revenues	$ 7	$ 10

Condensed Consolidated Statem_2

Condensed Consolidated Statements of Shareholders' Equity (Unaudited) - USD ($) shares in Thousands, $ 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, 2020	6,472	(1,315)
Balances at Dec. 31, 2020	$ 65	$ (6,371)	$ 88,487	$ (65,756)	$ 81	$ 16,506
Share based payment expense	0	0	3	0	0	3
Net income (loss) to common shareholders	0	0	0	2,221	0	2,221
Foreign currency translation	$ 0	$ 0	0	0	(19)	(19)
Balances (in shares) at Mar. 31, 2021	6,472	(1,315)
Balances at Mar. 31, 2021	$ 65	$ (6,371)	88,490	(63,535)	62	18,711
Balances (in shares) at Dec. 31, 2021	6,472	(1,315)
Balances at Dec. 31, 2021	$ 65	$ (6,371)	88,580	(61,238)	(23)	21,013
Share based payment expense	0	0	55	0	0	55
Net income (loss) to common shareholders	0	0	0	739	0	739
Foreign currency translation	$ 0	$ 0	0	0	(174)	(174)
Balances (in shares) at Mar. 31, 2022	6,472	(1,315)
Balances at Mar. 31, 2022	$ 65	$ (6,371)	$ 88,635	$ (60,499)	$ (197)	$ 21,633

Condensed Consolidated Statem_3

Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2022	Mar. 31, 2021
Cash flows from operating activities:
Net income:	$ 739	$ 2,221
Adjustments to reconcile net income to net cash (used in) provided by operating activities:
Amortization and depreciation	59	266
Share based payment expense	55	3
Gain on forgiveness of loan	0	(1,865)
Foreign exchange loss	6	68
Employee retention payroll tax credit	0	(365)
Deferred income taxes	96	37
Bad debt expense	43	36
Changes in operating assets and liabilities:
Accounts receivable	(829)	(948)
Prepaid expenses and other current assets	(103)	(78)
Right of use assets-operating	119	0
Other assets	(3)	0
Due to models	94	710
Lease liabilities-operating	(119)	(19)
Deferred revenue	(535)	0
Accounts payable and accrued liabilities	(300)	208
Net cash (used in) provided by operating activities	(678)	274
Cash flows from investing activities:
Purchases of property and equipment	(15)	(4)
Net cash used in investing activities	(15)	(4)
Cash flows from financing activities:
Payments on finance leases	(17)	(24)
Repayment of term loan	0	(46)
Net cash used in financing activities	(17)	(70)
Foreign currency effect on cash flows:	(113)	(19)
Net change in cash and cash equivalents:	(823)	181
Cash and cash equivalents, beginning of period	10,251	5,556
Cash and cash equivalents, end of period	9,428	5,737
Supplemental disclosures of cash flow information:
Cash paid for interest	0	9
Noncash investing and financing activities
Gain on forgiveness of loan	$ 0	$ 1,865

Note 1 - Basis of Presentation

Note 1 - Basis of Presentation	3 Months Ended
	Mar. 31, 2022
Notes to Financial Statements
Organization, Consolidation and Presentation of Financial Statements Disclosure [Text Block]	Note 1. Basis of Presentation 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 consolidated financial statements prepared in accordance with generally accepted principles in the United States of America (“GAAP”) 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, 2021. not may

Note 2 - Business Activity

Note 2 - Business Activity	3 Months Ended
	Mar. 31, 2022
Notes to Financial Statements
Basis of Accounting [Text Block]	Note 2. Business Activity 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	3 Months Ended
	Mar. 31, 2022
Notes to Financial Statements
Foreign Currency Disclosure [Text Block]	Note 3. Foreign Currency Translation The functional currency of our subsidiary in the United Kingdom is the British Pound. Assets and liabilities are translated into U.S. dollars at the exchange rates in effect at each balance sheet date. Results of operations are translated using the weighted average exchange rates during reporting periods. Related translation adjustments are accumulated in a separate component of stockholder’s equity and transaction gains and losses are recognized in the consolidated statements of income and comprehensive income when realized.

Note 4 - Debt

Note 4 - Debt	3 Months Ended
	Mar. 31, 2022
Notes to Financial Statements
Debt Disclosure [Text Block]	Note 4. Debt The Company has a credit agreement with Amegy Bank which provides a $3.0 million revolving line of credit, subject to a borrowing base derived from 80% of eligible accounts receivable (as defined) and the Company’s minimum net worth covenant. The revolving line of credit bears interest at prime plus 0.50% payable monthly. The Company had borrowing capacity of $3.0 million at March 31, 2022. October 24, 2022. March 31, 2022. On July 16, 2018, July 12, 2019, August 1, 2018, December 12, 2018, August 31, 2021, March 31, 2022, On April 15, 2020, April 13, 2020 ( April 13, 2022 1.00% April 13, 2025. March 27, 2021, March 31, 2021. On April 18, 2020, April 17, 2020 ( April 17, 2022 1.00% April 17, 2025. April 3, 2021, June 30, 2021. six

Note 5 - Commitments and Contin

Note 5 - Commitments and Contingencies	3 Months Ended
	Mar. 31, 2022
Notes to Financial Statements
Commitments and Contingencies Disclosure [Text Block]	Note 5. Commitments and Contingencies On October 24, 2013, January 6, 2014, August 11, 2014, March 3, 2014, “may Plaintiffs retained substitute counsel, who filed a Second and then Third Amended Complaint. Plaintiffs’ Third Amended Complaint asserts causes of action for alleged breaches of the plaintiffs' management contracts with the defendants, conversion, breach of the duty of good faith and fair dealing, and unjust enrichment. The Third Amended Complaint also alleges that the plaintiff models were at all relevant times employees, and 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. July 12, 2019, On May 1, 2019, July 12, 2019, By Order dated May 8, 2020 ( The Company believes the claims asserted in the Shanklin Litigation and Pressley Litigation are without merit and intends to continue to vigorously defend the actions. 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	3 Months Ended
	Mar. 31, 2022
Notes to Financial Statements
Income Tax Disclosure [Text Block]	Note 6. Income Taxes Generally, the Company’s combined effective tax rate is high relative to reported net income as a result of valuation allowances on deferred tax assets, certain amortization expense, stock based compensation, and corporate overhead not not three 2021, not not not March 31, 2022, 19 may As of March 31, 2022,

Note 7 - Treasury Shares

Note 7 - Treasury Shares	3 Months Ended
	Mar. 31, 2022
Notes to Financial Statements
Treasury Stock [Text Block]	Note 7. During 2012, 2013, 2016, may may not may From 2012 March 31, 2022, first three 2022,

Note 8 - Related Parties

Note 8 - Related Parties	3 Months Ended
	Mar. 31, 2022
Notes to Financial Statements
Related Party Transactions Disclosure [Text Block]	Note 8. Related Parties 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. The Company’s corporate headquarters are located at the offices of NCM. The Company utilizes NCM facilities on a month-to-month basis at $2.5 thousand per month, pursuant to a services agreement entered into between the parties. The Company incurred expenses pursuant to the services agreement totaling $7.5 thousand for the three March 31, 2022 2021. not March 31, 2022.

Note 4 - Debt (Details Textual)

Note 4 - Debt (Details Textual) - USD ($) $ in Thousands

Aug. 31, 2021

Apr. 03, 2021

Mar. 27, 2021

Apr. 18, 2020

Apr. 15, 2020

Dec. 12, 2018

Aug. 01, 2018

Oct. 24, 2016

Mar. 31, 2022

Jun. 30, 2021

Mar. 31, 2021

Mar. 31, 2022

Jul. 16, 2018

Treasury Stock, Shares, Acquired (in shares)

50,000

100,000

0

1,314,694

Gain (Loss) on Extinguishment of Debt, Total

$ 0

$ 1,865

Proceeds from Parent Paycheck Protection Program Under CARES Act

$ 128

Wilhelmina International LTD [Member]

Proceeds from Sub Paycheck Protection Program Under CARES Act

$ 1,800

Paycheck Protection Program CARES Act [Member]

Gain (Loss) from Interest Forgiven

$ 1

$ 17

Gain (Loss) on Extinguishment of Debt, Total

$ 100

$ 1,900

Amegy [Member] | Credit Agreement After Fifth Amendment [Member] | Term Loan [Member]

Debt Agreement, Maximum Borrowing Capacity

$ 3,000

Amegy [Member] | Credit Agreement After Fifth Amendment [Member] | Revolving Credit Facility [Member]

Debt Agreement, Borrowing Base Percentage of Collateral Modified From

80.00%

Amegy [Member] | Credit Agreement After Fifth Amendment [Member] | Revolving Credit Facility [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, Remaining Borrowing Capacity

3,000

$ 3,000

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

$ 300

$ 700

Repayments of Debt

$ 600

Long-term Debt, Total

$ 0

$ 0

Note 6 - Income Taxes (Details

Note 6 - Income Taxes (Details Textual) $ in Millions	3 Months Ended
	Mar. 31, 2022USD ($)
Valuation Allowance, Deferred Tax Asset, Increase (Decrease), Amount	$ 1.4
Domestic Tax Authority [Member]
Operating Loss Carryforwards	$ 0.8

Note 7 - Treasury Shares (Detai

Note 7 - Treasury Shares (Details Textual) - USD ($) $ / shares in Units, $ in Millions	Dec. 12, 2018	Aug. 01, 2018	Mar. 31, 2022	Dec. 31, 2016	Mar. 31, 2022	Dec. 31, 2013	Dec. 31, 2012
Stock Repurchase Program, Number of Shares Authorized to be Repurchased (in shares)				1,500,000		1,000,000	500,000
Stock Repurchase Program, Additional Shares Authorized (in shares)				500,000
Treasury Stock, Shares, Acquired (in shares)	50,000	100,000	0		1,314,694
Treasury Stock Acquired, Average Cost Per Share (in dollars per share)					$ 4.85
Treasury Stock, Value, Acquired, Cost Method					$ 6.4

Note 8 - Related Parties (Detai

Note 8 - Related Parties (Details Textual) - Services Agreements [Member] - USD ($)	3 Months Ended
	Mar. 31, 2022	Mar. 31, 2021
Related Party Transaction, Monthly Rent	$ 2,500
Related Party Transaction, Expenses from Transactions with Related Party	$ 7,500	$ 7,500