Wilhelmina(WHLM) - 2023 Q3 - Quarterly Report

Revenue Performance - Service revenues for the three months ended September 30, 2023, increased by 0.7% to $4.465 million compared to$4.434 million in the same period of 2022, while revenues for the nine months decreased by 1.7% to $13.427 million from$13.666 million [47]. - Total revenues for the three months ended September 30, 2023, were $4.472 million, a slight increase of 0.7$4.442 million in the same period of 2022, while total revenues for the nine months decreased by 1.8% to $13.449 million from$13.689 million [47]. - Gross Billings decreased by 0.7% to $16.158 million for the three months ended September 30, 2023, compared to$16.264 million in the same period of 2022 [60]. - For the nine months ended September 30, 2023, Gross Billings increased by 1.5% to $51.286 million compared to$50.513 million for the same period in 2022 [60]. Income and Profitability - Operating income for the three months ended September 30, 2023, was $0.467 million, a decrease of 30.4$0.671 million in the same period of 2022, and for the nine months, it decreased by 67.3% to $0.845 million from$2.585 million [54]. - Net income for the three months ended September 30, 2023, was $0.359 million, down 81.0$1.887 million in the same period of 2022, and for the nine months, it decreased by 85.8% to $0.504 million from$3.547 million [47]. - EBITDA for the three months ended September 30, 2023, was $0.540 million, down from$0.820 million for the same period in 2022, a decrease of approximately 34.1% [69]. - Adjusted EBITDA for the nine months ended September 30, 2023, was $1.081 million, compared to$2.898 million for the same period in 2022, indicating a decline of approximately 62.7% [69]. - The Company reported a net income of $0.4 million for the three months ended September 30, 2023, down from$1.9 million for the same period in 2022, representing a decrease of approximately 78.9% [59]. Expenses - Salaries and service costs increased by 3.3% to $2.843 million for the three months ended September 30, 2023, and by 7.4$8.702 million for the nine months compared to the same periods in 2022 [50]. - Office and general expenses rose by 17.8% to $0.859 million for the three months ended September 30, 2023, and by 40.9$3.002 million for the nine months compared to the same periods in 2022 [51]. - Model costs for the three months ended September 30, 2023, were $11.686 million, slightly down from$11.822 million in the same period of 2022 [68]. Cash Flow and Liquidity - The Company's cash balance decreased to $10.9 million as of September 30, 2023, from$12.0 million at December 31, 2022, reflecting a net cash usage of $0.7 million in operating activities [61]. - Net cash used in operating activities of$0.7 million was primarily due to increases in accounts receivable and prepaid expenses [62]. - The Company believes it has sufficient liquidity to meet its projected operational expenses and capital expenditure requirements for the next twelve months [63]. Tax and Foreign Exchange - The effective tax rate for the three months ended September 30, 2023, was 26.0%, compared to an effective tax rate of (143.2%) in the same period of 2022 [57]. - The Company reported a foreign exchange gain of $18 thousand for the three months ended September 30, 2023, compared to a gain of$107 thousand in the same period of 2022 [55]. Strategic Initiatives - The Company plans to expand its women's high-end fashion board and increase brand awareness among advertisers and potential talent as part of its long-term strategy [44]. - The Company has made significant investments in technology and infrastructure to support its clients and talent, aiming to enhance its operational efficiency [44]. Other Financial Metrics - The Company calculates Pre-Corporate EBITDA as $0.795 million for the three months ended September 30, 2023, compared to$1.015 million for the same period in 2022, a decrease of approximately 21.7% [69].