Wilhelmina(WHLM) - 2022 Q4 - Annual Report

Revenue Growth - Service revenues increased by 10.5% to $17.75 million for the year ended December 31, 2022, compared to $16.07 million in 2021, primarily due to increased bookings as COVID-19 restrictions were lifted [66][68]. - Total revenues rose to $17.78 million in 2022 from $16.10 million in 2021, reflecting a growth driven by the recovery in business activity [66]. - The Company reported total revenues of $17,780 thousand for 2022, an increase of 10.4% from $16,102 thousand in 2021 [95]. Gross Billings - Gross billings increased by 18% to $66.98 million in 2022, up from $56.81 million in 2021, driven by higher client bookings [67][83]. - Gross Billings for 2022 were $66,984 thousand, up 17.8% from $56,813 thousand in 2021 [95]. Income and Profitability - Operating income improved to $2.42 million with an operating margin of 13.6% in 2022, compared to $2.16 million and 13.4% in 2021, indicating effective cost management [66][75]. - Net income decreased to $3.53 million in 2022 from $4.52 million in 2021, impacted by the release of a valuation allowance on deferred tax assets [82]. - The Company had a net income of $3,529 thousand in 2022, compared to $4,518 thousand in 2021, reflecting a decrease of 21.9% [96]. Expenses - Salaries and service costs rose by 26.2% to $10.91 million in 2022, compared to $8.64 million in 2021, due to returning salaries and new hires [66][70]. - Office and general expenses increased by 6.6% to $3.17 million in 2022, up from $2.97 million in 2021, primarily due to higher legal and rent expenses [66][71]. - Model costs increased to $49,204 thousand in 2022 from $40,711 thousand in 2021, representing a rise of 20.5% [95]. Tax and Interest - The effective tax rate was -37.0% in 2022, compared to 15.4% in 2021, largely due to the release of a valuation allowance against deferred tax assets [66][81]. - Interest expense decreased to $0.008 million in 2022 from $0.051 million in 2021, reflecting the repayment of the Amegy term loan [66][79]. Cash and Liquidity - The cash balance increased to $12.0 million at December 31, 2022, from $10.3 million at December 31, 2021, primarily due to net cash provided by operating activities [84]. EBITDA - EBITDA for 2022 was $2,776 thousand, a decrease of 55.6% from $6,247 thousand in 2021 [96]. - Adjusted EBITDA for 2022 was $2,802 thousand, down 23.3% from $3,649 thousand in 2021 [96]. - Pre-Corporate EBITDA for 2022 was $3,895 thousand, a decline of 14.4% from $4,546 thousand in 2021 [96]. Non-Recurring Items - The Parent PPP Loan of $128 thousand was fully forgiven, resulting in a gain of $1000 recorded in the quarter ended June 30, 2021 [90]. - The Company’s non-recurring items in 2021 included a gain on forgiveness of PPP loans and cybersecurity incident expenses [96]. Reporting Standards - The Company’s financial results are reported in accordance with GAAP, but management believes non-GAAP measures like EBITDA and Gross Billings provide additional useful information [91].