Wilhelmina(WHLM) - 2022 Q2 - Quarterly Report

Financial Performance - Total revenues for the three months ended June 30, 2022, were $17,604,000, representing a 21.5% increase from $14,510,000 in the same period of 2021[11] - Service revenues increased to $17,596,000 for the three months ended June 30, 2022, up from $14,502,000 in 2021, marking a growth of 21.5%[11] - Net income for the six months ended June 30, 2022, was $1,660,000, a decrease of 50.4% compared to $3,342,000 in the same period of 2021[11] - Total revenues for the six months ended June 30, 2022, rose to $34,249 thousand compared to $26,486 thousand in 2021, marking a 29.4% increase[11] - Operating income for the three months ended June 30, 2022, was $1,040,000, compared to $891,000 in the same period of 2021, indicating a 16.7% increase[11] - Basic net income per common share for the three months ended June 30, 2022, was $0.18, down from $0.22 in the same period of 2021[11] - Net income for the six months ended June 30, 2022, was $1,660 thousand, down from $3,342 thousand in 2021, indicating a decline of 50.3%[14] Assets and Liabilities - Total assets as of June 30, 2022, were $38,751,000, an increase from $37,424,000 as of December 31, 2021[9] - Total liabilities increased to $16,480,000 as of June 30, 2022, compared to $16,411,000 as of December 31, 2021[9] - Shareholders' equity rose to $22,271,000 as of June 30, 2022, from $21,013,000 at the end of 2021, reflecting a growth of 5.96%[9] - As of June 30, 2022, total assets amounted to $38.751 million, an increase from $37.424 million as of December 31, 2021, reflecting a growth of approximately 3.5%[9] - Total current liabilities were $12.913 million as of June 30, 2022, slightly up from $12.859 million at the end of 2021, showing a marginal increase of about 0.4%[9] - The company reported an accumulated deficit of $59.578 million, a slight improvement from $61.238 million at the end of 2021[9] Cash Flow and Expenses - Cash and cash equivalents at the end of the period were $9.31 million, down from $10.25 million at the beginning of the period[14] - Operating cash flow for the six months ended June 30, 2022, was $(477) thousand, compared to $1.55 million for the same period in 2021[14] - The company experienced a net cash used in operating activities of $477 thousand for the six months ended June 30, 2022, compared to a net cash provided of $1,546 thousand in 2021[14] - Total operating expenses for the six months ended June 30, 2022, increased to $7,333 thousand from $6,444 thousand in 2021, a rise of 13.8%[11] - The company recorded a share-based payment expense of $110 thousand for the six months ended June 30, 2022, compared to $4 thousand in 2021[14] - The company reported a bad debt expense of $79 thousand for the six months ended June 30, 2022, compared to $78 thousand in 2021[14] Credit and Financing - The company has a $3.0 million revolving line of credit with Amegy Bank, with borrowing capacity fully available as of June 30, 2022[18] - The company had no outstanding balance on its term loan as of June 30, 2022, after prepaying the remaining balance of $0.6 million in August 2021[19] - The Company drew $0.7 million from a term loan to repurchase 100,000 shares of its common stock and later drew an additional $0.3 million for another stock purchase, with no outstanding balance on the term loan as of June 30, 2022[19] - The revolving line of credit expires on October 24, 2022, and the Company was in compliance with its bank covenants as of June 30, 2022[18] Legal and Tax Matters - The company is currently involved in legal proceedings, including the Shanklin and Pressley litigations, which may have a reasonably possible adverse outcome, although the company cannot estimate the potential loss[29] - The effective tax rate for the company was lower in 2021 due to PPP loan forgiveness, which was not subject to income tax, highlighting the impact of external financial assistance on tax liabilities[31] - The Company operates in states with relatively high tax rates, including California, New York, and Florida, affecting its effective tax rate[31] - The Company maintained a full valuation allowance of $1.5 million against its deferred tax assets as of June 30, 2022, due to the impact of the COVID-19 pandemic on its business[31] Share Repurchase and Stock Activity - The company has repurchased a total of 1,314,694 shares of common stock at an average price of approximately $4.85 per share, totaling around $6.4 million in repurchases since the program's inception[34] - The Company has repurchased 1,314,694 shares of common stock at an average price of approximately $4.85 per share, totaling approximately $6.4 million in repurchases under the stock repurchase program[34] - The Company received a $1.8 million PPP loan, which was fully forgiven, resulting in a $1.9 million gain recorded in the quarter ended March 31, 2021[21] - The Parent PPP Loan of $128,000 was also fully forgiven, resulting in a $0.1 million gain recorded in the quarter ended June 30, 2021[22] Operational Expansion - The company has expanded its operations to include locations in Los Angeles, Miami, and London, enhancing its market presence[16] - The company incurred expenses of $15 thousand under a services agreement with Newcastle Capital Management for the six months ended June 30, 2022, consistent with the previous year[37]