Wilhelmina International (WHLM) 10-Q10 Nov 222022 Q3 Quarterly reportFinancial data

Company Profile

Document And Entity Information

Document And Entity Information - shares	9 Months Ended
Document And Entity Information - shares	Sep. 30, 2022	Nov. 10, 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	Q3
Document Fiscal Year Focus	2022
Document Type	10-Q
Document Quarterly Report	true
Document Period End Date	Sep. 30, 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	Sep. 30, 2022	Dec. 31, 2021
Current assets:
Cash and cash equivalents	$ 10,529	$ 10,251
Accounts receivable, net of allowance for doubtful accounts of $1,647 and $1,580, respectively	10,890	8,858
Prepaid expenses and other current assets	218	91
Total current assets	21,637	19,200
Property and equipment, net of accumulated depreciation of $1,186 and $4,094, respectively	164	168
Right of use assets-operating	1,386	1,745
Right of use assets-finance	154	199
Trademarks and trade names with indefinite lives	8,467	8,467
Goodwill	7,547	7,547
Other assets	319	98
TOTAL ASSETS	39,674	37,424
Current liabilities:
Accounts payable and accrued liabilities	4,221	3,707
Due to models	8,958	8,090
Deferred revenue	0	535
Lease liabilities – operating, current	408	463
Lease liabilities – finance, current	61	64
Total current liabilities	13,648	12,859
Long term liabilities:
Deferred income tax, net	985	2,048
Lease liabilities – operating, non-current	1,080	1,361
Lease liabilities – finance, non-current	100	143
Total long term liabilities	2,165	3,552
Total liabilities	15,813	16,411
Shareholders’ equity:
Common stock, $0.01 par value, 9,000,000 shares authorized; 6,472,038 shares issued at September 30, 2022 and December 31, 2021	65	65
Treasury stock, 1,314,694 shares at September 30, 2022 and December 31, 2021, at cost	(6,371)	(6,371)
Additional paid-in capital	88,745	88,580
Accumulated deficit	(57,691)	(61,238)
Accumulated other comprehensive loss	(887)	(23)
Total shareholders’ equity	23,861	21,013
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY	$ 39,674	$ 37,424

Condensed Consolidated Balanc_2

Condensed Consolidated Balance Sheets (Current Period Unaudited) (Parentheticals) - USD ($) $ in Thousands	Sep. 30, 2022	Dec. 31, 2021
Accounts receivable, allowance for doubtful accounts	$ 1,647	$ 1,580
Property and equipment, accumulated depreciation	$ 1,186	$ 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 Operations and Comprehensive Income (Unaudited) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2022	Sep. 30, 2021	Sep. 30, 2022	Sep. 30, 2021
Revenues:
Revenues	$ 16,264	$ 15,109	$ 50,513	$ 41,595
Revenues	16,264	15,109	50,513	41,595
Model costs	11,822	10,736	36,824	29,787
Revenues, net of model costs	4,442	4,373	13,689	11,808
Operating expenses:
Salaries and service costs	2,753	2,241	8,102	6,169
Office and general expenses	729	683	2,131	2,247
Amortization and depreciation	42	231	148	740
Corporate overhead	247	200	723	643
Total operating expenses	3,771	3,355	11,104	9,799
Operating income	671	1,018	2,585	2,009
Other (income) expense:
Foreign exchange (gain) loss	(107)	(4)	(211)	84
Gain on forgiveness of loan	0	0	0	(1,994)
Employee retention payroll tax credit	0	(458)	0	(1,320)
Interest expense	2	7	7	49
Total other income	(105)	(455)	(204)	(3,181)
Income before provision for income taxes	776	1,473	2,789	5,190
(Provision) benefit for income taxes:
Current	(221)	(48)	(305)	(158)
Deferred	1,332	(272)	1,063	(537)
(Provision) benefit for income taxes, net	1,111	(320)	758	(695)
Net income	1,887	1,153	3,547	4,495
Other comprehensive loss:
Foreign currency translation adjustment	(352)	(117)	(864)	(120)
Total comprehensive income	$ 1,535	$ 1,036	$ 2,683	$ 4,375
Basic net income per common share (in dollars per share)	$ 0.37	$ 0.22	$ 0.69	$ 0.87
Diluted net income per common share (in dollars per share)	$ 0.37	$ 0.22	$ 0.69	$ 0.87
Weighted average common shares outstanding-basic (in shares)	5,157	5,157	5,157	5,157
Weighted average common shares outstanding-diluted (in shares)	5,157	5,157	5,157	5,157
Service [Member]
Revenues:
Revenues	$ 16,256	$ 15,101	$ 50,490	$ 41,569
Revenues	16,256	15,101	50,490	41,569
License Fees [Member]
Revenues:
Revenues	8	8	23	26
Revenues	$ 8	$ 8	$ 23	$ 26

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 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, 2020	6,472	(1,315)
Balances at Dec. 31, 2020	$ 65	$ (6,371)	88,487	(65,756)	81	16,506
Net income to common shareholders						4,495
Foreign currency translation						(120)
Balances (in shares) at Sep. 30, 2021	6,472	(1,315)
Balances at Sep. 30, 2021	$ 65	$ (6,371)	88,525	(61,261)	(39)	20,919
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
Share based payment expense	0	0	1	0	0	1
Net income to common shareholders	0	0	0	1,121	0	1,121
Foreign currency translation	0	0	0	0	16	16
Short-swing profit disgorgement	$ 0	$ 0	32	0	0	32
Balances (in shares) at Jun. 30, 2021	6,472	(1,315)
Balances at Jun. 30, 2021	$ 65	$ (6,371)	88,523	(62,414)	78	19,881
Share based payment expense	0	0	2	0	0	2
Net income to common shareholders	0	0	0	1,153	0	1,153
Foreign currency translation	$ 0	$ 0	0	0	(117)	(117)
Balances (in shares) at Sep. 30, 2021	6,472	(1,315)
Balances at Sep. 30, 2021	$ 65	$ (6,371)	88,525	(61,261)	(39)	20,919
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 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
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
Net income to common shareholders						3,547
Foreign currency translation						(864)
Balances (in shares) at Sep. 30, 2022	6,472	(1,315)
Balances at Sep. 30, 2022	$ 65	$ (6,371)	88,745	(57,691)	(887)	23,861
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
Share based payment expense	0	0	55	0	0	55
Net income to common shareholders	0	0	0	921	0	921
Foreign currency translation	$ 0	$ 0	0	0	(338)	(338)
Balances (in shares) at Jun. 30, 2022	6,472	(1,315)
Balances at Jun. 30, 2022	$ 65	$ (6,371)	88,690	(59,578)	(535)	22,271
Share based payment expense	0	0	55	0	0	55
Net income to common shareholders	0	0	0	1,887	0	1,887
Foreign currency translation	$ 0	$ 0	0	0	(352)	(352)
Balances (in shares) at Sep. 30, 2022	6,472	(1,315)
Balances at Sep. 30, 2022	$ 65	$ (6,371)	$ 88,745	$ (57,691)	$ (887)	$ 23,861

Condensed Consolidated Statem_3

Condensed Consolidated Statements of Cash Flow (Unaudited) - USD ($) $ in Thousands	9 Months Ended
	Sep. 30, 2022	Sep. 30, 2021
Cash flows from operating activities:
Net income:	$ 3,547	$ 4,495
Adjustments to reconcile net income to net cash provided by operating activities:
Amortization and depreciation	148	740
Share based payment expense	165	6
Gain on forgiveness of loan	0	(1,994)
Gain on foreign exchange rates	(211)	84
Deferred income taxes	(1,063)	537
Bad debt expense	115	100
Changes in operating assets and liabilities:
Accounts receivable	(2,123)	(3,140)
Prepaid expenses and other current assets	(140)	19
Right of use assets-operating	359	258
Other assets	(228)	(5)
Due to models	1,086	1,420
Lease liabilities-operating	(337)	(234)
Deferred revenue	(535)	0
Accounts payable and accrued liabilities	455	456
Net cash provided by operating activities	1,238	2,742
Cash flows from investing activities:
Purchases of property and equipment	(96)	(16)
Net cash used in investing activities	(96)	(16)
Cash flows from financing activities:
Shareholder short-swing profit disgorgement	0	32
Payments on finance leases	(45)	(65)
Repayment of term loan	0	(743)
Net cash used in financing activities	(45)	(776)
Foreign currency effect on cash flows:	(819)	(45)
Net change in cash and cash equivalents:	278	1,905
Cash and cash equivalents, beginning of period	10,251	5,556
Cash and cash equivalents, end of period	10,529	7,461
Supplemental disclosures of cash flow information:
Cash paid for interest	0	23
Cash paid for income taxes	16	12
Noncash investing and financing activities
Gain on forgiveness of loan	$ 0	$ 1,994

Note 1 - Basis of Presentation

Note 1 - Basis of Presentation	9 Months Ended
Note 1 - Basis of Presentation	Sep. 30, 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 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, 2021. not may

Note 2 - Business Activity

Note 2 - Business Activity	9 Months Ended
Note 2 - Business Activity	Sep. 30, 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	9 Months Ended
Note 3 - Foreign Currency Translation	Sep. 30, 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	9 Months Ended
Note 4 - Debt	Sep. 30, 2022
Notes to Financial Statements
Debt Disclosure [Text Block]	Note 4. Debt As of September 30, 2022, September 30, 2022. September 30, 2022. October 24, 2022. On July 16, 2018, July 12, 2019, August 1, 2018, December 12, 2018, August 31, 2021, September 30, 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	9 Months Ended
Note 5 - Commitments and Contingencies	Sep. 30, 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. Nonetheless, an adverse outcome in either case is at least reasonably possible. However, the Company is presently unable to reasonably estimate the amount or range of possible loss in either case. Therefore, no September 30, 2022 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
Note 6 - Income Taxes	Sep. 30, 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 income before taxes 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 For the year ended December 31, 2021, third 2022, not three September 30, 2022, may As of September 30, 2022,

Note 7 - Treasury Shares

Note 7 - Treasury Shares	9 Months Ended
Note 7 - Treasury Shares	Sep. 30, 2022
Notes to Financial Statements
Treasury Stock [Text Block]	Note 7. During 2012, 2013, 2016, may may not may From 2012 September 30, 2022, twelve no twelve April 2022. first nine 2022,

Note 8 - Related Parties

Note 8 - Related Parties	9 Months Ended
Note 8 - Related Parties	Sep. 30, 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 $22.5 thousand for the nine September 30, 2022 2021. not September 30, 2022. In the second 2021, one 16 1934, nine September 30, 2021.

Note 9 - Subsequent Events

Note 9 - Subsequent Events	9 Months Ended
Note 9 - Subsequent Events	Sep. 30, 2022
Notes to Financial Statements
Subsequent Events [Text Block]	Note 9. Subsequent Events On November 1, 2022, 192 November 1, 2022.

Note 4 - Debt (Details Textual)

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

3 Months Ended

9 Months Ended

129 Months Ended

Aug. 31, 2021

Apr. 03, 2021

Mar. 27, 2021

Apr. 18, 2020

Apr. 15, 2020

Dec. 12, 2018

Aug. 01, 2018

Oct. 24, 2016

Sep. 30, 2022

Sep. 30, 2021

Jun. 30, 2021

Mar. 31, 2021

Sep. 30, 2022

Sep. 30, 2021

Sep. 30, 2022

Jul. 16, 2018

Treasury Stock, Shares, Acquired (in shares)

50,000

100,000

1,314,694

Gain (Loss) on Extinguishment of Debt, Total

$ 0

$ 1,994

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%

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

Note 6 - Income Taxes (Details

Note 6 - Income Taxes (Details Textual) - USD ($) $ in Thousands	3 Months Ended	12 Months Ended
	Sep. 30, 2022	Dec. 31, 2021
Valuation Allowance, Deferred Tax Asset, Increase (Decrease), Amount		$ 1,500
Effective Income Tax Rate Reconciliation, Change in Deferred Tax Assets Valuation Allowance, Amount	$ (1,500)
Domestic Tax Authority [Member]
Operating Loss Carryforwards	$ 0

Note 7 - Treasury Shares (Detai

Note 7 - Treasury Shares (Details Textual) - USD ($) $ / shares in Units, $ in Millions			9 Months Ended	12 Months Ended	129 Months Ended
	Dec. 12, 2018	Aug. 01, 2018	Sep. 30, 2022	Dec. 31, 2016	Sep. 30, 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) - USD ($)	3 Months Ended	9 Months Ended
Note 8 - Related Parties (Details Textual) - USD ($)	Jun. 30, 2021	Sep. 30, 2022	Sep. 30, 2021
Adjustments to Additional Paid in Capital, Short Swing Profit Disgorgement	$ 32,000
Proceeds from Shareholder Short Swing Profit Disgorgement		$ 0	$ 32,000
Services Agreements [Member]
Related Party Transaction, Monthly Rent		2,500
Related Party Transaction, Expenses from Transactions with Related Party		$ 22,500	$ 22,500

Note 9 - Subsequent Events (Det

Note 9 - Subsequent Events (Details Textual) - USD ($) $ in Thousands	Nov. 01, 2022	Sep. 30, 2022	Dec. 31, 2021
Operating Lease, Right-of-Use Asset		$ 1,386	$ 1,745
Principal Headquarters at 192 Lexington Avenue, New York, New York [Member] \| Subsequent Event [Member]
Operating Lease, Right-of-Use Asset	$ 2,300