Wilhelmina International, Inc. Reports Fourth Quarter and Year-End 2009 Financial Results

DALLAS, April 7 /PRNewswire-FirstCall/ -- Wilhelmina International, Inc. (OTC Bulletin Board: WHLM) (the "Company") today reported total revenues of $9.1 million and $32.5 million for the quarter and year ended December 31, 2009, respectively, compared to $0 for the quarter and year ended December 31, 2008. Additional information regarding the Company's results is disclosed in the Form 10-K for the year ended December 31, 2009 that was filed with the Securities and Exchange Commission on March 31, 2010.

The net loss applicable to common stockholders was $1.4 million or $0.01 per fully diluted share and $3.4 million or $0.03 per fully diluted share, for the quarter and year ended December 31, 2009, respectively, compared to a net loss of $919,000 or $0.02 per fully diluted share and $967,000 or $0.02 per fully diluted share, for the quarter and year ended December 31, 2008, respectively.

The net loss for the quarter ended December 31, 2009 includes before tax charges of $483,000 for amortization of intangible assets and depreciation, $803,000 for asset impairment charges and $401,000 for corporate overhead.  The net loss for the year ended December 31, 2009 includes before tax charges of $1.7 million for amortization of intangible assets and depreciation, $803,000 for asset impairment charges, $1.3 million for corporate overhead and $673,000 for acquisition transaction costs.

The Company completed the acquisition of Wilhelmina International, Ltd. and affiliated companies (collectively, the "Wilhelmina Companies") on February 13, 2009 and, therefore, recorded revenues and expenses of the Wilhelmina Companies for the period from February 13, 2009 through December 31, 2009, in its statements of operations for the quarter and year ended December 31, 2009.

In an effort to provide investors with additional information regarding the Company's results of operations, the Company is disclosing the unaudited pro forma financial information and discussion below relating solely to the Wilhelmina Companies, which does not take into account any amounts attributable to the Company's operations at the holding company level during such periods, including corporate overhead, amortization of intangibles, asset impairment charges, acquisition transaction costs and interest expense and income.  Certain adjustments have been made to the historical information for the year ended December 31, 2008 to adjust for expenses incurred by the Wilhelmina Companies in connection with the acquisition of the Wilhelmina Companies. Such information and discussion should be read in conjunction with the Consolidated Financial Statements of the Company and the notes thereto included in the Company's Form 10-K for the year ended December 31, 2009.  The unaudited pro forma information and discussion below is not necessarily indicative of the current or future financial position or operating results of the Company.

The following table provides unaudited pro forma financial information (in thousands), with adjustments as discussed above, relating solely to the Wilhelmina Companies for the quarter and year ended December 31, 2009 and 2008, as if the acquisition had occurred at the beginning of the respective periods and was consummated on the same terms.

During the quarter ended December 31, 2009, gross billings, which represent amounts billed to customers and are an important business metric that ultimately drives revenues, profits and cash flows, of the Wilhelmina Companies increased $3.4 million, or 37.7%, to $12.2 million, compared to $8.8 million for the quarter ended December 31, 2008.  Approximately $3.1 million of gross billings for the quarter ended December 31, 2009 related to billings which resulted in revenues which were deferred as of December 31, 2009. For the year ended December 31, 2009, gross billings decreased $1.0 million, or 2.2%, to $41.8 million, compared to $42.8 million for the year ended December 31, 2008.  The Wilhelmina Companies experienced a year over year decrease in gross billings across the core modeling business of approximately 10% which was partially offset by a year over year increase in gross billings in the Wilhelmina Artist Management ("WAM") business of approximately 46%. Gross billings of the WAM division represented approximately 19% of total gross billings for the year ended December 31, 2009 compared to approximately 13% for the year ended December 31, 2008. For the first, second and third quarters of 2009, gross billings of the core modeling business experienced declining negative year over year growth. During the fourth quarter of 2009 the gross billings of the core modeling business experienced slightly positive year over year growth.

During the quarter ended December 31, 2009, revenues net of model costs of the Wilhelmina Companies increased $38,000, or 1.3%, to $3.1 million, compared to $3.1 million for the quarter ended December 31, 2008. During the year ended December 31, 2009, revenues net of model costs of the Wilhelmina Companies decreased approximately $1.2 million, or 9.5%, to $11.2 million, compared to $12.4 million for the year ended December 31, 2008.  During the quarter ended December 31, 2009, pro forma operating income decreased $527,000, or 65.4%, to $278,000 compared to operating income of $805,000 for the quarter ended December 31, 2008.  During the year ended December 31, 2009, pro forma operating income decreased $1.6 million, or 60.5%, to $1.1 million compared to pro forma operating income of $2.7 million for the year ended December 31, 2008.

The decline in pro forma operating income for the quarter ended December 31, 2009 as compared to the quarter ended December 31, 2008 was caused by an increase in operating costs which was attributable to increases in salaries and service costs and bad debt expenses.

During the quarter ended December 31, 2009, gross billings for the Wilhelmina Companies' core modeling business experienced slightly positive growth compared to the quarter ended December 31, 2008. During the year ended December 31, 2009, the important Men's division and Women's division gross billings declined in percentage terms less than the percentage decline in combined gross billings of the other core modeling divisions.  The WAM and the Miami divisions continued to show strong year over year growth.  

In a further effort to provide investors with additional information regarding the Company's results of operations, the Company is disclosing Adjusted EBITDA, which is computed as operating income (loss) before depreciation and amortization and corporate overhead at the holding company level. Adjusted EBITDA is a non-GAAP financial measure, defined as a numerical measure of financial performance that excludes or includes amounts so as to be different than the most directly comparable measure calculated and presented in accordance with United States generally accepted accounting principles ("GAAP") in a company's statements of operations, balance sheets or statements of cash flows.  Pursuant to the requirements of Regulation G, the Company provided a reconciliation of this non-GAAP financial measure to the most directly comparable GAAP financial measure.

Although Adjusted EBITDA represents a non-GAAP financial measure, the Company considers Adjusted EBITDA to be a key operating metric of the Company's business, and uses Adjusted EBITDA in its planning and budgeting processes and to monitor and evaluate its financial and operating results.  The Company believes that Adjusted EBITDA is useful to investors because it provides an analysis of financial and operating results using the same measure that the Company uses in evaluating itself.  The Company believes that Adjusted EBITDA also provides stockholders and potential investors with a means to evaluate the Company's financial and operating results against other companies within the Company's industry.  However, the Company's calculation of Adjusted EBITDA may not be consistent with the calculation of this measure by other companies in the Company's industry.

Adjusted EBITDA is not a measurement of financial performance under GAAP and should not be considered as an alternative to operating income (loss) 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 GAAP.

The following table reconciles operating loss under GAAP (in thousands)(as reported in the Company's quarterly and annual SEC filings) to Adjusted EBITDA for the quarter and year ended December 31, 2009 and 2008.

Form 10-K Filing

Additional information concerning the Company's results of operations and financial position is included in the Company's Form 10-K for the year ended December 31, 2009 which will be filed today with the Securities and Exchange Commission. A copy of the Company's 10-K filing will be available on our website at www.wilhelmina.com.

Forward-Looking Statements

This report contains certain "forward-looking" statements as such term is defined in the Private Securities Litigation Reform Act of 1995 and information relating to the Company and its subsidiaries that are based on the beliefs of the Company's management as well as assumptions made by and 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 its subsidiaries or Company management, are intended to identify forward-looking statements.  Such statements reflect the current risks, uncertainties and assumptions related to certain factors including, without limitation, the Company's success in integrating the operations of the Wilhelmina Companies in a timely manner, or at all, the Company's ability to realize the anticipated benefits of the Wilhelmina Companies to the extent, or in the timeframe, anticipated, competitive factors, general economic conditions, the interest rate environment, governmental regulation and supervision, seasonality, changes in industry practices, one-time events and other factors described herein and in other filings made by the Company with the SEC.  Based upon changing conditions, 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 intend to update these forward-looking statements.

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

Through Wilhelmina Models and its other subsidiaries including Wilhelmina Artist Management, Wilhelmina International, Inc. provides traditional, full-service fashion model and talent management services, specializing in the representation and management of leading models, entertainers, artists, athletes and other talent to various customers and clients including retailers, designers, advertising agencies and catalog companies. Wilhelmina Models was founded in 1967 by Wilhelmina Cooper, a renowned fashion model, and is one of the oldest and largest fashion model management companies in the world. Wilhelmina Models is headquartered in New York and, since its founding, has grown to include operations located in Los Angeles and Miami, as well as a growing network of licensees comprising leading modeling agencies in various local markets across the U.S.

SOURCE Wilhelmina International, Inc.

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