Press release·05/17/2025 07:31:10

Overview of Wilhelmina’s Financial Performance

Wilhelmina International, Inc. is a leading fashion model management company with operations in major markets around the world. The company’s primary business is representing and managing models, entertainers, athletes, and other talent for various clients in the fashion, advertising, and media industries.

In the first quarter of 2025, Wilhelmina reported strong financial results, with total revenues increasing 10.9% to $4.6 million compared to the same period in 2024. This growth was driven by an 11.0% increase in service revenues, which make up the bulk of the company’s top line. Wilhelmina also saw a 12.5% rise in gross billings, a non-GAAP metric that represents the total amount billed to clients on behalf of the talent the company represents.

The company’s operating income jumped 109.6% to $153,000, resulting in an operating margin of 3.3% compared to 1.8% a year earlier. Net income for the quarter was $157,000, up 72.5% from $91,000 in Q1 2024. This improvement in profitability was due to the increase in revenues outpacing the growth in operating expenses.

Revenue and Profit Trends

Wilhelmina’s primary source of revenue is model fees and service charges paid by clients for bookings directly negotiated by the company. It also earns commissions from bookings made by third-party agencies. The 11.0% increase in service revenues during the quarter was attributed to higher commissions from core model bookings.

License fees and other income, which include franchise revenues from independently owned model agencies using the Wilhelmina brand, remained flat year-over-year at $8,000. This segment of the business has been stable in recent periods.

On the expense side, salaries and service costs, which make up the largest portion of operating expenses, rose 9.1% due to personnel hires and payroll changes to better align staffing with the needs of each office and region. Office and general expenses increased 15.9%, primarily due to higher legal costs, partially offset by decreases in bad debts, apartment, and bank fees.

Amortization and depreciation expense edged up 2.3%, while corporate overhead declined 10.7%, mainly from lower legal expenses. The combination of higher revenues and relatively controlled expense growth led to the significant improvement in operating income and net income.

Strengths, Weaknesses, and Outlook

A key strength of Wilhelmina’s business model is its diversification across various talent management segments, including models, entertainers, athletes, and social media influencers. This diversification, along with the company’s global footprint and leading position in the industry’s capital of New York City, helps make its operations more resilient to changes in the market.

However, Wilhelmina is not immune to broader economic conditions, as evidenced by the increased competition its traditional retail clients in the fashion and beauty industry have faced from digital and social media channels, leading to reduced advertising budgets. The company closely monitors economic trends and client spending patterns and continually evaluates opportunities to increase market share and expand its geographic reach.

Looking ahead, management has outlined several strategic initiatives to drive shareholder value, including:

• Increasing Wilhelmina’s brand awareness among advertisers and potential talent
• Expanding the women’s high-end fashion board
• Growing the Aperture division’s representation in commercials, film, and television
• Expanding social media influencer representation
• Developing new geographic markets
• Promoting model search contests, events, and media projects

The company has also made significant investments in digital technology, infrastructure, and personnel to better connect with clients and talent and support its growth plans.

Overall, Wilhelmina’s strong first-quarter performance, diversified business model, and strategic focus suggest the company is well-positioned to navigate the evolving industry landscape and capitalize on emerging opportunities. However, the company remains cautious about the potential impacts of global economic conditions and client spending patterns on its future results.

Key Financial Indicators

The table below summarizes Wilhelmina’s key financial results for the first quarters of 2025 and 2024:

Metric (in thousands)	Q1 2025	Q1 2024	% Change
Service Revenues	$4,619	$4,163	11.0%
License Fees and Other Income	$8	$8	0%
Total Revenues	$4,627	$4,171	10.9%
Salaries and Service Costs	$3,235	$2,966	9.1%
Office and General Expenses	$968	$835	15.9%
Amortization and Depreciation	$45	$44	2.3%
Corporate Overhead	$226	$253	(10.7%)
Operating Income	$153	$73	109.6%
Operating Margin	3.3%	1.8%	88.9%
Net Income	$157	$91	72.5%
Gross Billings	$17,789	$15,816	12.5%
EBITDA	$200	$110	81.8%
Adjusted EBITDA	$198	$127	55.9%
Pre-Corporate EBITDA	$424	$380	11.6%

The key takeaways from this data are:

• Service revenues, which make up the bulk of Wilhelmina’s top line, grew 11.0% year-over-year, driven by increased commissions from core model bookings.
• Operating income and net income both saw substantial increases, up 109.6% and 72.5%, respectively, due to the revenue growth outpacing the rise in expenses.
• Gross billings, a non-GAAP metric representing the total amount billed to clients, increased 12.5%, indicating stronger demand for Wilhelmina’s talent representation services.
• The company’s profitability metrics, such as operating margin, EBITDA, and Adjusted EBITDA, all showed significant improvement compared to the prior-year period.

These results demonstrate Wilhelmina’s ability to capitalize on industry trends and effectively manage its operations, leading to enhanced financial performance.

Liquidity and Capital Resources

Wilhelmina’s cash balance decreased from $8.5 million at the end of 2024 to $5.5 million as of March 31, 2025. This was primarily due to $2.2 million in net cash used in operating activities, $2,000 in net cash used in investing activities, and $0.9 million in cash used for financing activities, including the purchase of treasury stock and payments on finance leases.

The company’s primary liquidity needs are for working capital associated with performing services under its client contracts. Generally, Wilhelmina incurs significant operating expenses with payment terms shorter than its average collections on billings. Based on budgeted and year-to-date cash flow information, management believes the company has sufficient liquidity to meet its projected operational expenses and capital expenditure requirements for the next twelve months and beyond.

Critical Accounting Policies and Estimates

Wilhelmina’s consolidated financial statements are prepared in accordance with generally accepted accounting principles (GAAP). The company’s critical accounting policies and estimates include:

Basis of Presentation: The consolidated financial statements include the accounts of Wilhelmina and its wholly owned subsidiaries, with all significant inter-company accounts and transactions eliminated.

Revenue Recognition: The company has adopted the requirements of Accounting Standards Update (ASU) No. 2014-09, Revenue from Contracts with Customers (Topic 606). Wilhelmina’s revenues are primarily derived from fashion model bookings and the representation of social media influencers and actors. Performance obligations are generally satisfied at a point in time when the talent has completed the contractual requirements. The company reports service revenues on a net basis, which represents gross amounts billed net of amounts owed to talent, including taxes, commissions, and related costs.

Share-Based Compensation: Share-based compensation expense is estimated at the grant date based on the award’s fair value, as calculated by the Black-Scholes option pricing model, and is recognized on a straight-line basis over the requisite service period.

Income Taxes: Wilhelmina is subject to income taxes in the United States, the United Kingdom, and numerous local jurisdictions. Deferred tax assets are recognized for unused tax losses, credits, and deductible temporary differences to the extent it is probable that future taxable profits will be available to utilize them.

Accounts Receivable and Allowance for Doubtful Accounts: Accounts receivable are accounted for at net realizable value, and the company maintains an allowance for doubtful accounts for estimated losses from the inability to collect on receivables.

Goodwill and Intangible Asset Impairment Testing: Wilhelmina performs impairment testing on goodwill and indefinite-lived intangible assets at least annually, or more frequently if events and circumstances indicate potential impairment. The company sometimes utilizes an independent valuation specialist to assist with the determination of fair value.

These critical accounting policies and estimates are fundamental to Wilhelmina’s financial reporting and play an important role in the company’s ability to accurately record and report its financial performance.