Wilhelmina(WHLM) - 2024 Q2 - Quarterly Report

Revenue Performance - Service revenues for Q2 2024 increased by 2.2% to $4.584 million compared to$4.486 million in Q2 2023, while revenues for the first half of 2024 decreased by 2.4% to $8.747 million from$8.962 million in the same period last year [40]. - Total revenues for the first half of 2024 were $8.762 million, down 2.4$8.977 million in the same period of 2023 [40]. - Gross Billings for the three months ended June 30, 2024, were $16.976 million, a decrease of 3.2$17.541 million in the same period of 2023 [60]. - The Company reported total revenues of $4.591 million for the three months ended June 30, 2024, compared to$4.493 million for the same period in 2023, reflecting a modest growth [60]. Profitability - Operating income for Q2 2024 was $397 thousand, a significant increase of 166.4$149 thousand in Q2 2023, resulting in an operating margin of 2.3% versus 0.8% in the prior year [40]. - Net income for Q2 2024 reached $247 thousand, a remarkable increase of 1864.3$14 thousand in Q2 2023 [40]. - EBITDA for Q2 2024 was $434 thousand, representing a 201.4$144 thousand in Q2 2023 [41]. - EBITDA for the three months ended June 30, 2024, was $434 thousand, compared to$144 thousand for the same period in 2023, reflecting a substantial increase in operational efficiency [62]. - Adjusted EBITDA for the six months ended June 30, 2024, was $569 thousand, up from$534 thousand for the same period in 2023, indicating stable performance [62]. Expenses - Salaries and service costs increased by 2.3% in Q2 2024 to $3.047 million, and by 2.6$6.013 million, primarily due to personnel hires [45]. - Office and general expenses decreased by 18.2% in Q2 2024 to $870 thousand, and by 20.4$1.705 million, mainly due to reduced legal and office expenses [46]. - Model costs for the three months ended June 30, 2024, were $12.385 million, down from$13.048 million in the same period of 2023, showing a reduction in costs [60]. Tax and Liquidity - The effective tax rate improved to 47.9% in Q2 2024 from 115.9% in Q2 2023, reflecting a decrease in deferred tax expenses [40]. - The Company believes it has sufficient liquidity to meet projected operational expenses and capital expenditure requirements for the next twelve months [55]. - The Company’s primary liquidity needs are for working capital associated with performing services under client contracts, with significant operating expenses incurred [55]. - Cash balance decreased to $5.7 million at June 30, 2024, down from$6.1 million at December 31, 2023, primarily due to $0.8 million net cash used in operating activities [54]. 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 [37]. - The Company reported a foreign exchange loss of$7 thousand in Q2 2024, significantly lower than the $61 thousand loss in Q2 2023 [50]. - The Company calculates Gross Billings as total revenue plus model costs, which includes amounts owed to talent and related costs [58].