UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

FORM 10-Q

 

(Mark One)

[x]QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

 

For the quarterly period ended June 30, 2017

 

OR

 

[  ]TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

 

For the transition period from ________ to ________

 

Commission File Number 001-36589

 

WILHELMINA INTERNATIONAL, INC.
(Exact name of registrant as specified in its charter)

 

Delaware 74-2781950
(State or other jurisdiction of incorporation or organization) (I.R.S. Employer Identification No.)

 

200 Crescent Court, Suite 1400, Dallas, Texas 75201
(Address of principal executive offices) (Zip Code)

 

(214) 661-7488
(Registrant’s telephone number, including area code)
 
n/a
(Former name, former address and former fiscal year, if changed since last report)

 

Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.  [x] Yes  [  ] No

 

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). [x] Yes  [  ] No

 

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company.  See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.  (Check one):

 

  Large accelerated filer  [  ] Accelerated filer [  ]
  Non-accelerated filer [  ] Smaller reporting company [x]
  Emerging growth company [  ]  

 

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. [  ]

 

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).   [  ] Yes  [x] No

 

As of August 10, 2017, the registrant had 5,381,668 shares of common stock outstanding.

 

1
 

 

WILHELMINA INTERNATIONAL, INC. AND SUBSIDIARIES

 

Quarterly Report on Form 10-Q

 

For the Three and Six Months Ended June 30, 2017

 

PART I FINANCIAL INFORMATION 3
     
  Item 1. Financial Statements 3
     
    Consolidated Balance Sheet as of June 30, 2017 (Unaudited) and December 31, 2016 3
     
    Consolidated Statement of Operations and Comprehensive Income for the Three and Six Months Ended June 30, 2017 and 2016 (Unaudited) 4
     
    Consolidated Statement of Cash Flow for the Six Months Ended June 30, 2017 and 2016 (Unaudited) 5
     
    Notes to Consolidated Financial Statements (Unaudited) 6
     
  Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations 9
     
  Item 3. Quantitative and Qualitative Disclosures About Market Risk 14
     
  Item 4. Controls and Procedures 14
     
PART II OTHER INFORMATION 15
     
  Item 1. Legal Proceedings 15
     
  Item 1.A. Risk Factors 15
     
  Item 2. Unregistered Sales of Equity Securities and Use of Proceeds 15
     
  Item 3. Defaults Upon Senior Securities 16
     
  Item 4. Mine Safety Disclosures 16
     
  Item 5. Other Information 16
     
  Item 6. Exhibits 16
     
SIGNATURES 17

 

 

 

 

2
 

 

PART I

 

FINANCIAL INFORMATION

 

Item 1. Financial Statements

WILHELMINA INTERNATIONAL, INC. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

(In thousands, except share data) 

 

   (Unaudited)   
   June 30,
2017
  December 31,
 2016
ASSETS          
Current assets:          
Cash and cash equivalents  $3,319   $5,688 
Accounts receivable, net of allowance for doubtful accounts of $1,962 and $1,646, respectively   17,747    16,947 
Prepaid expenses and other current assets   315    847 
Total current assets   21,381    23,482 
           
Property and equipment, net of accumulated depreciation of $1,923 and $1,525, respectively   3,286    3,206 
Trademarks and trade names with indefinite lives   8,467    8,467 
Other intangibles with finite lives, net of accumulated amortization of$8,569 and $8,527 respectively   168    210 
Goodwill   13,192    13,192 
Other assets   115    164 
           
TOTAL ASSETS  $46,609   $48,721 
           
LIABILITIES AND SHAREHOLDERS’ EQUITY          
Current liabilities:          
Accounts payable and accrued liabilities  $4,349   $4,781 
Due to models   12,632    14,217 
Contingent consideration to seller - current   -    97 
Term loan - current   513    502 
Total current liabilities   17,494    19,597 
           
Long term liabilities:          
Deferred income tax liability   1,528    1,567 
Term loan - non-current   1,888    2,147 
Total long-term liabilities   3,416    3,714 
           
Total liabilities   20,910    23,311 
           
Shareholders’ equity:          
Preferred stock, $0.01 par value, 10,000,000 shares authorized; none issued   -    - 
Common stock, $0.01 par value, 12,500,000 shares authorized; 6,472,038 shares issued at June 30, 2017 and December 31, 2016   65    65 
Treasury stock, 1,090,370 at June 30, 2017 and December 31, 2016, at cost   (4,893)   (4,893)
Additional paid-in capital   87,603    87,336 
Accumulated deficit   (57,091)   (57,048)
Accumulated other comprehensive income   15    (50)
Total shareholders’ equity   25,699    25,410 
           
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY  $46,609   $48,721 

 

The accompanying notes are an integral part of these consolidated financial statements

 

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WILHELMINA INTERNATIONAL, INC. AND SUBSIDIARIES

STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME

For the Three and Six Months Ended June 30, 2017 and 2016

(In thousands, except per share data)

(Unaudited)

 

   Three Months Ended  Six Months Ended
   June 30,  June 30,
   2017  2016  2017  2016
Revenues:                    
Revenues  $18,285   $22,242   $37,408   $43,632 
License fees and other income   -    27    28    54 
Total revenues   18,285    22,269    37,436    43,686 
                     
Model costs   12,946    15,955    26,645    31,064 
                     
Revenues net of model costs   5,339    6,314    10,791    12,622 
                     
Operating expenses:                    
Salaries and service costs   3,528    3,697    7,164    7,886 
Office and general expenses   1,280    1,262    2,432    2,886 
Amortization and depreciation   223    102    440    206 
Corporate overhead   235    283    581    576 
Total operating expenses   5,266    5,344    10,617    11,554 
Operating income   73    970    174    1,068 
                     
Other income (expense):                    
Foreign exchange gain (loss)   (14)   3    (36)   7 
Gain (loss) from unconsolidated affiliate   (9)   43    (38)   6 
Interest expense   (28)   -    (57)   - 
Total other income (expense)   (51)   46    (131)   13 
                     
Income before provision for income taxes   22    1,016    43    1,081 
                     
Provision for income taxes: (expense) benefit                    
Current   (65)   (354)   (125)   (367)
Deferred   (9)   (85)   39    (261)
Income tax (expense)   (74)   (439)   (86)   (628)
                     
Net income (loss)  $(52)  $577   $(43)  $453 
                     
Other comprehensive income (expense):                    
Foreign currency translation income (expense)   20    (23)   65    (38)
Total comprehensive income (loss)   (32)   554    22    415 
                     
Basic net income (loss) per common share  $(0.01)  $0.10   $(0.01)  $0.08 
Diluted net income (loss) per common share  $(0.01)  $0.10   $(0.01)  $0.08 
                     
Weighted average common shares outstanding-basic   5,382    5,845    5,382    5,844 
Weighted average common shares outstanding-diluted   5,404    5,857    5,404    5,857 

 

The accompanying notes are an integral part of these consolidated financial statements

 

4
 

 

WILHELMINA INTERNATIONAL, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOW

For the Six Months Ended June 30, 2017 and 2016

(In thousands)

(Unaudited)

                                                                                              

   Six Months Ended
June 30,
   2017  2016
Cash flows from operating activities:          
Net income:  $(43)  $453 
Adjustments to reconcile net income to net cash used in operating activities:          
Amortization and depreciation   440    206 
Share based payment expense   267    159 
Deferred income taxes   (39)   261 
Bad debt expense   79    20 
Changes in operating assets and liabilities:          
Accounts receivable   (879)   (4,178)
Prepaid expenses and other current assets   532    (179)
Other assets   49    98 
Due to models   (1,585)   2,098 
Accounts payable and accrued liabilities   (432)   816 
Contingent liability to seller   (97)   - 
Net cash used by operating activities   (1,708)   (246)
           
Cash flows from investing activities:          
Purchases of property and equipment   (478)   (751)
Net cash used in investing activities   (478)   (751)
           
Cash flows from financing activities:          
Purchases of treasury stock   -    (45)
Repayment of term loan   (248)   - 
Net cash used in financing activities   (248)   (45)
           
Foreign currency effect on cash flows:   65    (38)
           
Net change in cash and cash equivalents:   (2,369)   (1,080)
Cash and cash equivalents, beginning of period   5,688    4,556 
Cash and cash equivalents, end of period  $3,319   $3,476 
           
Supplemental disclosures of cash flow information:          
Cash paid for interest  $57   $- 
Cash refund of income taxes  $69   $34 

 

The accompanying notes are an integral part of these consolidated financial statements

 

5
 

 

WILHELMINA INTERNATIONAL, INC. AND SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

 

 

Note 1.  Basis of Presentation

 

The interim consolidated financial statements included herein have been prepared by Wilhelmina International, Inc. (together with its subsidiaries "Wilhelmina" or the "Company") without audit, pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”).  Although certain information and footnote disclosures normally included in the consolidated financial statements prepared in accordance with accounting principles generally accepted in the United States of America have been condensed or omitted pursuant to those rules and regulations, all adjustments considered necessary in order to make the consolidated financial statements not misleading have been included. In the opinion of the Company’s management, the accompanying interim unaudited consolidated financial statements reflect all adjustments, of a normal recurring nature, that are necessary for a fair presentation of the Company’s consolidated financial position, results of operations and cash flows for the periods presented. These interim unaudited consolidated financial statements should be read in conjunction with the audited consolidated financial statements and the notes thereto included in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2016. Results of operations for the interim periods are not necessarily indicative of results that may be expected for any other interim periods or the full fiscal year.

 

Note 2.  Business

 

The primary business of Wilhelmina is fashion model management. These business operations are headquartered in New York City. The Company’s predecessor was founded in 1967 by Wilhelmina Cooper, a renowned fashion model, and became one of the oldest, best known and largest fashion model management companies in the world. Since its founding, Wilhelmina has grown to include operations located in Los Angeles, Miami, Chicago and London, as well as a network of licensees in various local markets in the U.S. and several international markets. Wilhelmina provides traditional, full-service fashion model and talent management services, specializing in the representation and management of models, entertainers, artists, athletes and other talent, to various clients, including retailers, designers, advertising agencies, print and electronic media and catalog companies.

 

Note 3. New Accounting Standards

 

Accounting Standard Update (“ASU”) 2015-17, Income Taxes - Balance Sheet Classification of Deferred Taxes. On January 1, 2017, Wilhelmina retrospectively adopted the new accounting standard which requires deferred tax assets and liabilities to be netted and classified as non-current in the consolidated balance sheet. The impact of the change resulted in the netting of deferred tax assets and liabilities and classification of all deferred taxes as non-current.

 

Note 4.  Foreign Currency Translation

 

The functional currency of London is the British Pound. Assets and liabilities are translated into U.S. dollars at the exchange rates in effect at each balance sheet date, revenues and expenses are translated at average monthly exchange rates and resulting translation gains or losses are accumulated in other comprehensive income as a separate component of shareholders’ equity.

 

Note 5.  Line of Credit

 

The Company has a credit agreement with Amegy Bank which provides a $4.0 million revolving line of credit and previously provided up to a $3.0 million term loan which could be drawn through October 24, 2016. The revolving line of credit is subject to a borrowing base derived from 80% of eligible accounts receivable (as defined) and the Company’s minimum net worth covenant of $20.0 million. The revolving line of credit bears interest at prime plus 0.50% payable monthly. As of June 30, 2017, the Company had a $0.2 million irrevocable standby letter of credit outstanding under the revolving line of credit. The revolving line of credit presently expires on October 24, 2017.

 

On August 16, 2016, the Company drew $2.7 million of the term loan and used the proceeds to fund the purchase of shares of its common stock. The term loan bears interest at 4.5% per annum and is payable in monthly payments of interest only until November, 2016, followed by 47 equal monthly payments of principal and interest computed on a 60-month amortization schedule and a final payment of principal and interest due on October 24, 2020.

 

On May 4, 2017, the Company entered into a Seventh Amendment to Credit Agreement with ZB, N.A. dba Amegy Bank reducing the Company’s fixed charge coverage ratio through December 31, 2017. The Company obtained a waiver from Amegy Bank of its failure to satisfy the fixed coverage ratio for the quarter ended June 30, 2017. On August 1, 2017, the Company entered into an Eighth Amendment to Credit Agreement with ZB, N.A. dba Amegy Bank eliminating the requirement to test the fixed charge coverage ratio for the quarter ended September 30, 2017.

 

6
 

 

Note 6.  Commitments and Contingencies

 

On October 24, 2013, a putative class action lawsuit was brought against the Company by former Wilhelmina model Alex Shanklin and others (the “Shanklin Litigation”), in New York State Supreme Court (New York County) by the same lead counsel who represented plaintiffs in a prior, now-dismissed action brought by Louisa Raske (the “Raske Litigation”). The claims in the Shanklin Litigation initially included breach of contract and unjust enrichment allegations arising out of matters similar to the Raske Litigation, such as the handling and reporting of funds on behalf of models and the use of model images. Other parties named as defendants in the Shanklin Litigation include other model management companies, advertising firms, and certain advertisers. On January 6, 2014, the Company moved to dismiss the Amended Complaint in the Shanklin Litigation for failure to state a claim upon which relief can be granted and other grounds, and other defendants also filed motions to dismiss. On August 11, 2014, the court denied the motion to dismiss as to Wilhelmina and other of the model management defendants. Further, on March 3, 2014, the judge assigned to the Shanklin Litigation wrote the Office of the New York Attorney General bringing the case to its attention, generally describing the claims asserted therein against the model management defendants, and stating that the case “may involve matters in the public interest.” The judge’s letter also enclosed a copy of his decision in the Raske Litigation, which dismissed that case. Plaintiffs have retained substitute counsel, who has filed a Second and now Third Amended Complaint. Plaintiffs’ Third Amended Complaint asserts causes of action for alleged breaches of the plaintiffs' management contracts with the defendants, conversion, breach of the duty of good faith and fair dealing, and unjust enrichment. The Third Amended Complaint also alleges that the plaintiff models were at all relevant times employees, and not independent contractors, of the model management defendants, and that defendants violated the New York Labor Law in several respects, including, among other things, by allegedly failing to pay the models the minimum wages and overtime pay required thereunder, not maintaining accurate payroll records, and not providing plaintiffs with full explanations of how their wages and deductions therefrom were computed. The Third Amended Complaint seeks certification of the action as a class action, damages in an amount to be determined at trial, plus interest, costs, attorneys’ fees, and such other relief as the court deems proper. On October 6, 2015, Wilhelmina filed a motion to dismiss as to most of the plaintiffs’ claims, and oral argument on the motion was heard by the Court in June 2016. The Court entered a decision granting in part and denying in part Wilhelmina’s motion to dismiss on May 26, 2017. The Court (i) dismissed three of the five New York Labor Law causes of action, along with the conversion, breach of the duty of good faith and fair dealing and unjust enrichment causes of action, in their entirety, and (ii) permitted only the breach of contract causes of action, and some plaintiffs’ remaining two New York Labor Law causes of action to continue, within a limited time frame. The plaintiffs have appealed the decision. The parties appeared before the Court for a status conference on July 18, 2017, and the Court directed the defendants to answer the Third Amended Complaint by August 16, 2017. The Company believes the claims asserted in the Third Amended Complaint are without merit, and intends to continue to vigorously defend the action.

 

On June 6, 2016, another putative class action lawsuit was brought against the Company by former Wilhelmina model Shawn Pressley and others (the “Pressley Litigation”), in New York State Supreme Court (New York County) by the same counsel representing the plaintiffs in the Shanklin Litigation, and asserting identical, although more recent, claims as those in the Shanklin Litigation. On June 14, 2016, the Court stayed all proceedings in the Pressley Litigation until a decision was issued on the motion to dismiss in the Shanklin Litigation. At the court conference on July 18, 2017 (mentioned above), the judge directed the plaintiffs to file an amended complaint in the Pressley Litigation, if any, by August 16, 2017, and directed the defendants to move against or answer such amended complaint by September 29, 2017. The Company believes the claims asserted in the Pressley Litigation are without merit, and intends to vigorously defend the action.

 

In addition to the legal proceedings disclosed herein, the Company is also engaged in various legal proceedings that are routine in nature and incidental to its business. None of these routine proceedings, either individually or in the aggregate, are believed likely, in the Company's opinion, to have a material adverse effect on its consolidated financial position or its results of operations.

 

 

Note 7.  Income Taxes

 

Generally, the Company’s combined effective tax rate is high relative to reported net income as a result of certain amounts of amortization expense, stock based compensation, and corporate overhead not being deductible and income being attributable to certain states in which it operates. In recent years, the majority of taxes being paid by the Company were state taxes, not federal taxes. The Company operates in four states which have relatively high tax rates: California, New York, Illinois, and Florida. As of June 30, 2017, the Company had federal income tax loss carryforwards of $1.9 million.

 

7
 

 

Note 8.  Treasury Stock

 

During 2012, the Board of Directors authorized a stock repurchase program whereby the Company could repurchase up to 500,000 shares of its outstanding common stock. During 2013, the Board of Directors renewed and extended the Company’s share repurchase authority to enable it to repurchase up to an aggregate of 1,000,000 shares of common stock.

 

On August 12, 2016, the Board of Directors increased by an additional 500,000 shares the number of shares of the Company’s common stock which may be repurchased under its stock repurchase program to an aggregate of 1,500,000 shares. The shares may be repurchased from time to time in the open market or through privately negotiated transactions at prices the Company deems appropriate. The program does not obligate the Company to acquire any particular amount of common stock and may be modified or suspended at any time at the Company’s discretion.

 

From 2012 through June 30, 2017, the Company has repurchased 1,090,370 shares of Common Stock at an average price of approximately $4.49 per share, for a total of approximately $4.9 million in repurchases under the stock repurchase program. No shares were repurchased under the stock repurchase program during the first half of 2017.

 

 

Note 9.  Related Parties

 

The Executive Chairman of the Company, Mark E. Schwarz, is also the chairman, chief executive officer and portfolio manager of Newcastle Capital Management, L.P. (“NCM”). NCM is the general partner of Newcastle Partners L.P. (“Newcastle”), which is the largest shareholder of the Company. Clinton Coleman (Managing Director at NCM) and James Dvorak (Managing Director at NCM) also serve as directors of the Company.

 

The Company’s corporate headquarters are located at 200 Crescent Court, Suite 1400, Dallas, Texas 75201, which are also the offices of NCM. The Company occupies a portion of NCM space on a month-to-month basis at $2.5 thousand per month, pursuant to a services agreement entered into between the parties. Pursuant to the services agreement, the Company receives the use of NCM’s facilities and equipment and accounting, legal and administrative services from employees of NCM. The Company incurred expenses pursuant to the services agreement totaling approximately $7.5 thousand and $15.0 thousand for the three and six months ended both June 30, 2017 and 2016. The Company did not owe NCM any amounts under the services agreement as of June 30, 2017.

 

The Company owned an unconsolidated 50% interest in Wilhelmina Kids & Creative Management LLC (“Kids”), a New York City-based modeling agency that specialized in representing child models/talents, from newborns to children 14 years of age. On December 9, 2016, the owners of Kids agreed to dissolve Kids and ceased related business operations of Kids. On March 1, 2017, the Company paid $0.1 million to another owner of Kids in accordance with the December 9, 2016 agreement to liquidate the enterprise. As a result, Wilhelmina no longer maintains a child models division.

 

 

Note 10.  Subsequent Events

 

On July 7, 2017, the Company filed with the Delaware Secretary of State a Certificate of Amendment of its Restated Certificate of Incorporation. As approved by shareholders at the Annual Meeting held June 13, 2017, the Certificate of Amendment eliminated any class of preferred stock from the shares of capital stock the Company is authorized to issue and decreased the number of shares of common stock the Company is authorized to issue from 12,500,000 shares to 9,000,000 shares.

 

On August 1, 2017, the Company entered into an Eighth Amendment to Credit Agreement with ZB, N.A. dba Amegy Bank eliminating the requirement to test the fixed charge coverage ratio for the quarter ended September 30, 2017.

 

8
 

 

Item 2.  Management’s Discussion and Analysis of Financial Condition and Results of Operations.

 

The following is a discussion of the interim unaudited consolidated financial condition and results of operations for the Company and its subsidiaries for the three and six months ended June 30, 2017 and 2016. It should be read in conjunction with the financial statements of the Company, the notes thereto and other financial information included elsewhere in this report, and the Company’s Annual Report on Form 10-K for the year ended December 31, 2016, as amended.

 

 

Forward-Looking Statements

 

This Quarterly Report on Form 10-Q contains certain “forward-looking” statements as such term is defined in Section 27A of the Securities Act of 1933, as amended, Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and the Private Securities Litigation Reform Act of 1995. Such forward looking statement relating to the Company and its subsidiaries are based on the beliefs of the Company’s management as well as information currently available to the Company’s management.  When used in this report, the words “anticipate,” “believe,” “estimate,” “expect” and “intend” and words or phrases of similar import, as they relate to the Company or Company management, are intended to identify forward-looking statements.  Such statements reflect the current risks, uncertainties and assumptions related to certain factors including, without limitation, competitive factors, general economic conditions, the interest rate environment, governmental regulation and supervision, seasonality, changes in industry practices, one-time events and other factors described herein and in other filings made by the Company with the SEC.  Should any one or more of these risks or uncertainties materialize, or should any underlying assumptions prove incorrect, actual results may vary materially from those described herein as anticipated, believed, estimated, expected or intended.  The Company does not undertake any obligation to publicly update these forward-looking statements. As a result, you should not place undue reliance on these forward-looking statements.

 

 

OVERVIEW

 

The Company’s primary business is fashion model management and complementary business activities. The business of talent management firms, such as Wilhelmina, depends heavily on the state of the advertising industry, as demand for talent is driven by Internet, print and television advertising campaigns for consumer goods and retail clients. Wilhelmina believes it has strong brand recognition which enables it to attract and retain top agents and talent to service a broad universe of clients. In order to take advantage of these opportunities and support its continued growth, the Company will need to continue to successfully allocate resources and staffing in a way that enhances its ability to respond to new opportunities. The Company continues to focus on tightly managing costs, recruiting top agents when available, and scouting and developing new talent.

 

Although Wilhelmina has a large and diverse client base, it is not immune to global economic conditions. The Company closely monitors economic conditions, client spending, and other industry factors and continually evaluates opportunities to increase its market share and further expand its geographic reach.  There can be no assurance as to the effects on Wilhelmina of future economic circumstances, client spending patterns, client credit worthiness and other developments and whether, or to what extent, Wilhelmina’s efforts to respond to them will be effective.

 

 

Trends and Opportunities

 

The Company expects that the combination of Wilhelmina’s main operating base in New York City, the industry’s capital, with the depth and breadth of its talent pool and client roster and its diversification across various talent management segments, together with its geographical reach, should make Wilhelmina’s operations more resilient to industry changes and economic swings than those of many of the smaller firms operating in the industry. Similarly, in the segments where the Company competes with other leading full service agencies, Wilhelmina competed successfully during the first half of 2017.  

 

With total annual advertising expenditures on major media (newspapers, magazines, television, cinema, outdoor and Internet) exceeding approximately $187 billion in recent years, North America is by far the world’s largest advertising market.  For the fashion talent management industry, including Wilhelmina, advertising expenditures on magazines, television, Internet and outdoor are of particular relevance.

 

In recent quarters, traditional retail clients in the fashion and beauty industry have had increased competition from digital, social, and new media, reducing their budgets for advertising and model talent. Wilhelmina reviews the mix of talent and resources available to best operate in the changing environment.

 

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Strategy

 

Management’s strategy is to increase value to shareholders through the following initiatives:

 

increase Wilhelmina’s brand awareness and consideration among advertisers and potential talent;
expand the Wilhelmina network through strategic geographic market development;
expand the women’s high end fashion board;
expand the Aperture division’s representation in commercials, film, & television;
expand celebrity representation; and
promote model search contests, and events and partnering on media projects (television, film, books, etc.).

 

Due to the increasing ubiquity of the Internet as a standard business tool, the Company has increasingly sought to harness the opportunities of the Internet and other digital media to improve its communications with clients and to facilitate the effective exchange of fashion model and talent information. The Company continues to make significant investments in technology (including developing in-house art and social media departments) in pursuit of gains in efficiency and better communications with clients.  At the same time, the Internet presents challenges for the Company, including (i) the cannibalization of traditional print media businesses, and (ii) pricing pressures with respect to digital media photo shoots and client engagements.

 

In January 2015, the Company purchased 100% of the outstanding shares of Union Models Management Ltd. in London and renamed it Wilhelmina London Limited (“London”). The strategic acquisition of London established a footprint for the Company and the brand in Western Europe. London also serves as a base of operations to service the Company’s European clients, and as a new talent development office for European models and artists.

 

In September 2016, Wilhelmina opened a Chicago office to better provide models and talents with direct access to clients in the midwest region of the United States.

 

 

Key Financial Indicators

 

The key financial indicators that the Company reviews to monitor its business are gross billings, revenues, model costs, operating expenses and cash flows.

 

The Company analyzes revenue by reviewing the mix of revenues generated by the different “boards” (each a specific division of the fashion model management operations which specializes by the type of model it represents (Women, Men, Artist, Showroom, Curve, Celebrity, etc.)) by geographic locations and from significant clients. Wilhelmina has three primary sources of revenue: (i) gross billings are revenues from principal relationships where the gross amount billed to the client is recorded as revenue when earned and collectability is reasonably assured; (ii) revenues from agent relationships where commissions paid by models as a percentage of their gross earnings are recorded as revenue when earned and collectability is reasonably assured; and (iii) separate service charges, paid by clients in addition to the booking fees, which are calculated as a percentage of the models’ booking fees and are recorded as revenues when earned and collectability is reasonably assured. See “Critical Accounting Policies - Revenue Recognition.” Gross billings are an important business metric that ultimately drive revenues, profits and cash flows. Model costs represents costs paid to model and artist talent and to mother agents relating to photoshoots and other jobs booked by Wilhelmina.

 

Wilhelmina provides professional services. Therefore, salary and service costs represent the largest part of the Company’s operating expenses. Salary and service costs are comprised of payroll and related costs and travel, meals and entertainment (“T&E”) to deliver the Company’s services and to enable new business development activities.

 

10
 

 

Analysis of Consolidated Statements of Operations and Service Revenues

(in thousands)

 

   Three Months Ended   Six Months Ended     
   June 30   June 30   % Change   June 30   June 30   % Change 
   2017   2016   2017 vs 2016   2017   2016   2017 vs 2016 
Service revenues   18,285    22,242    (17.8%)   37,408    43,632    (14.3%)
License fees and other income   -    27    (100.0%)   28    54    (48.1%)
TOTAL REVENUES   18,285    22,269    (17.9%)   37,436    43,686    (14.3%)
Model costs   12,946    15,955    (18.9%)   26,645    31,064    (14.2%)
REVENUES NET OF MODEL COSTS   5,339    6,314    (15.4%)   10,791    12,622    (14.5%)
GROSS PROFIT MARGIN   29.2%   28.4%        28.8%   28.9%     
Salaries and service costs   3,528    3,697    (4.6%)   7,164    7,886    (9.2%)
Office and general expenses   1,280    1,262    1.4%   2,432    2,886    (15.7%)
Amortization and depreciation   223    102    118.6%   440    206    113.6%
Corporate overhead   235    283    (17.0%)   581    576    0.9%
OPERATING INCOME   73    970    (92.5%)   174    1,068    (83.7%)
OPERATING MARGIN   0.4%   4.4%        0.5%   2.4%     
Foreign exchange gain (loss)   (14)   3    *    (36)   7    * 
Gain (loss) from unconsolidated subsidiary   (9)   43    *    (38)   6    * 
Interest expense   (28)   -    *    (57)   -    * 
INCOME BEFORE INCOME TAXES   22    1,016    (97.8%)   43    1,081    (96.0%)
Income tax expense   (74)   (439)   (83.1%)   (86)   (628)   (86.3%)
Effective tax rate   336.4%   43.2%        200.0%   58.1%     
NET INCOME   (52)   577    (109.0%)   (43)   453    (109.5%)

 

* Not Meaningful

 

Service Revenues

 

The Company’s service revenues fluctuate in response to its clients’ willingness to spend on advertising and the Company’s ability to have the desired talent available. The decrease of 17.8% and 14.3% for the three and six months ended June 30, 2017, when compared to the three and six months ended June 30, 2016 was primarily due to a decrease in core model bookings. The decrease in core model bookings in United States was partially offset by an increase in core model bookings in London, Wilhelmina’s new office in Chicago, and the Celebrity division.

 

License Fees and Other Income

 

License fees and other income include management and administrative services from an unconsolidated subsidiary, franchise revenues from independently owned model agencies that use the Wilhelmina trademark, and various services provided by the Company. License fees decreased by 100.0% and 48.1% for the three and six months ended June 30, 2017, when compared to three and six months ended in June 30, 2016. The decrease was primarily due to ending of licensing agreements with affiliates.

 

Gross Profit Margin

 

Gross profit margins increased by 0.8% of the revenue for the three months ended June 30, 2017, when compared to the three months ended June 30, 2016 primarily due to higher recovery of model chargebacks, an increase in higher margin celebrity revenue, and a decrease in client reimbursable expenses in 2017. For the six months ended June 30, 2017, when compared to the six months ended June 30, 2016, the gross profit margin remained relatively unchanged.

 

 Salaries and Service Costs

 

Salaries and service costs consist of payroll related costs and T&E required to deliver the Company’s services to its clients and talents. The decrease in salaries and service costs of 4.6% and 9.2% for the three and six months ended June 30, 2017 respectively, when compared to the three and six months ended June 30, 2016 was primarily due to severance paid to the Company’s former Chief Executive Officer and another employee in 2016, changes in personnel to better align the number of employees at each Wilhelmina office with the needs of each geographic region, and more effective management of T&E during the first half of 2017.

 

Office and General Expenses

 

Office and general expenses consist of office and equipment rents, advertising and promotion, insurance expenses, administration and technology cost. These costs are less directly linked to changes in the Company’s revenues than are salaries and service costs. The increase in office and general expenses of 1.4% for the three months ended June 30, 2017 when compared to the three months ended June 30, 2016, was primarily due to costs associated with legal services.

 

11
 

 

For the six months ended June 30, 2017, when compared to the six months ended in ended June 30, 2016, the decrease of 15.7% was primarily due to $233 thousand related to the recruiting of the Company’s Chief Executive Officer and Chief Financial Officer, and $160 thousand of non-income tax expenses that were incurred during the first six months of 2016.

 

Amortization and Depreciation

 

Amortization and depreciation expense is incurred with respect to certain assets, including computer hardware, software, office equipment, furniture, and other intangibles. During the three and six months ended June 30, 2017, depreciation and amortization expense increased by 118.6% and 113.6% compared to the same periods of the prior year, primarily related to the Company’s new accounting software being placed in service during the fourth quarter of 2016. Fixed asset purchases (mostly related to technology) totaled approximately $224 thousand and $478 thousand during the three months and six months ended June 30, 2017, compared to $387 thousand and $751 thousand for the three and six months ended June 30, 2016.

 

Corporate Overhead

 

Corporate overhead expenses include director and executive officer compensation, insurance, legal, audit and professional fees, corporate office rent and travel costs. Corporate overhead decreased by 17.0% for the three months ended June 30, 2017 compared to the three months ended June 30, 2016, primarily due to lower corporate legal services costs during the second quarter. For the six months ended June 30, 2017, when compared to the six months ended June 30, 2016, the increase of 0.9% was primarily due to higher corporate travel costs.

 

Operating Margin

 

Operating margin decreased by 4.0% and 1.9% for the three and six months ended June 30, 2017, when compared to the three and six months ended June 30, 2016, primarily due to decreases in service revenues outpacing reductions in operating expenses.

 

Foreign Currency Translation

 

The Company realized $14 thousand and $36 thousand of foreign currency exchange loss during the three and six months ended June 30, 2017, as compared to a gain of $3 thousand and $7 thousand during the three and six months ended June 30, 2016. Foreign currency gain and loss is due to fluctuations in currencies from Latin America, Great Britain and Europe.

 

Unconsolidated Subsidiary

 

The losses from an unconsolidated subsidiary for the three and six months ended June 30, 2017, compared to gains for the same periods of the prior year, are the result of the dissolution of the unconsolidated subsidiary and discontinuation of its operations.

 

Interest Expense

 

Interest expense for the three and six months ended June 30, 2017 was primarily attributable to accrued interest on a term loan drawn during the third quarter of 2016. See, “Liquidity and Capital Resources.”

 

Income Taxes

 

Generally, the Company’s combined effective tax rate is high relative to reported net income as a result of certain amounts of amortization expense and corporate overhead not being deductible and income attributable to states in which it operates. Currently, the majority of taxes being paid by the Company are state taxes, not federal taxes. The Company operates in four states which have relatively high tax rates: California, New York, Illinois and Florida.

 

 

Liquidity and Capital Resources

 

The Company’s primary liquidity needs are for working capital associated with performing services under its client contracts. Generally, the Company incurs significant operating expenses with payment terms shorter than its average collections on billings.

 

The Company’s cash balance decreased to $3.3 million at June 30, 2017, from $5.7 million at December 31, 2016. For the six months ended June 30, 2017, cash balances decreased primarily as a result of cash flows used by operations of $1.7 million, capital expenditures of $0.5 million, and $0.2 million for repayment of the Amegy Bank term loan.

 

The Company’s use of cash for operating activities included employee bonus payments, payment of accrued non-income taxes, final payment to the former London owner, final payment to another owner of a dissolved unconsolidated subsidiary, and payments due to models/talents during the first half of 2017.

 

12
 

 

The Company has a credit agreement with Amegy Bank which provides a $4.0 million revolving line of credit and previously provided up to a $3.0 million term loan which could be drawn through October 24, 2016. The revolving line of credit is subject to a borrowing base derived from 80% of eligible accounts receivable (as defined) and the Company’s minimum net worth covenant of $20.0 million. The revolving line of credit bears interest at prime plus 0.5% payable monthly. As of June 30, 2017, the Company had a $0.2 million irrevocable standby letter of credit outstanding under the revolving line of credit and had additional borrowing capacity of $1.4 million. The revolving line of credit presently expires on October 24, 2017.

 

On August 16, 2016, the Company drew $2.7 million of the term loan and used the proceeds to fund the purchase of shares of its common stock. The term loan bears interest at 4.5% per annum and is payable in monthly payments of interest only until November, 2016, followed by 47 equal monthly payments of principal and interest computed on a 60-month amortization schedule and a final payment of principal and interest due on October 24, 2020.

 

On May 4, 2017, the Company entered into a Seventh Amendment to Credit Agreement with ZB, N.A. dba Amegy Bank reducing the Company’s fixed charge coverage ratio through December 31, 2017. The Company obtained a waiver from Amegy Bank of its failure to satisfy the fixed coverage ratio for the quarter ended June 30, 2017. On August 1, 2017, the Company entered into an Eighth Amendment to Credit Agreement with ZB, N.A. dba Amegy Bank eliminating the requirement to test the fixed charge coverage ratio for the quarter ended September 30, 2017.

 

The Company believes its cash on hand combined with cash from operations and the availability under the revolving credit facility will be sufficient to fund operations for the next 12 months.

 

 

Off-Balance Sheet Arrangements

 

As of June 30, 2017, the Company had outstanding a $0.2 million irrevocable standby letter of credit under the Company’s revolving credit facility with Amegy Bank. The letter of credit serves as security under the lease relating to the Company’s office space in New York City that expires February 2021.

 

 

Effect of Inflation

 

Inflation has not historically been a material factor affecting the Company’s business. General operating expenses, such as salaries, employee benefits, insurance and occupancy costs are subject to normal inflationary pressures.

 

 

Critical Accounting Policies

 

Basis of Presentation

 

The financial statements include the consolidated accounts of Wilhelmina and its wholly owned subsidiaries. All significant inter-company accounts and transactions have been eliminated in consolidation.

 

Revenue Recognition

 

In compliance with generally accepted accounting principles in United States of America, when reporting revenue gross as a principal versus net as an agent, the Company assesses whether the Company, the model or the talent is the primary obligor. The Company evaluates the terms of its model, talent and client agreements as part of this assessment. In addition, the Company gives appropriate consideration to other key indicators such as latitude in establishing price, discretion in model or talent selection and credit risk the Company undertakes. The Company operates broadly as a modeling agency and in those relationships with models and talents where the key indicators suggest the Company acts as a principal, the Company records the gross amount billed to the client as revenue when earned and collectability is reasonably assured, and the related costs incurred to the model or talent as model or talent cost. In other model and talent relationships, where the Company believes the key indicators suggest the Company acts as an agent on behalf of the model or talent, the Company records revenue when earned and collectability is reasonably assured, net of pass-through model or talent cost.

 

The Company also recognizes management fees as revenues for providing services to other modeling agencies as well as consulting income in connection with services provided to a television production network according to the terms of the contract.  The Company recognizes royalty income when earned based on terms of the contractual agreement. Revenues received in advance are deferred and amortized using the straight-line method over periods pursuant to the related contract. The Company also records fees from licensees when the revenues are earned and collectability is reasonably assured.

 

13
 

 

Advances to models for the cost of initial portfolios and other out-of-pocket costs, which are reimbursable only from collections from the Company’s clients as a result of future work, are expensed to model costs as incurred. Any repayments of such costs are credited to model costs in the period received.

 

Goodwill and Intangible Assets

 

Goodwill consists primarily of customer and talent relationships arising from past business acquisitions. Intangible assets with finite lives are amortized over useful lives ranging from two to seven years. Goodwill and intangible assets with indefinite lives are no longer subject to amortization, but rather to an annual assessment of impairment by applying a fair-value based test. A significant amount of judgment is required in estimating fair value and performing goodwill impairment tests.

 

The Company annually assesses whether the carrying value of its intangible assets exceeds their fair value and, if necessary, records an impairment loss equal to any such excess. Each interim reporting period, the Company assesses whether events or circumstances have occurred which indicate that the carrying amount of an intangible asset exceeds its fair value. If the carrying amount of the intangible asset exceeds its fair value, an asset impairment charge will be recognized in an amount equal to that excess. No asset impairment charges were incurred during the three and six months ended June 30, 2017 and June 30, 2016.

 

Accounts Receivable and Allowance for Doubtful Accounts

 

Accounts receivable are accounted for at net realizable value, do not bear interest and are short-term in nature. The Company maintains an allowance for doubtful accounts for estimated losses resulting from the inability to collect on accounts receivable. Based on management’s assessment, the Company provides for estimated uncollectible amounts through a charge to earnings and a credit to the valuation allowance. Balances that remain outstanding after the Company has used reasonable collection efforts are written off through a charge to the valuation allowance and a credit to accounts receivable. The Company generally does not require collateral.

 

Income Taxes

 

Income taxes are accounted for under the asset and liability method. Deferred income tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases and operating loss and tax credit carryforwards. Deferred income tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred income tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. The Company continually assesses the need for a tax valuation allowance based on all available information. As of June 30, 2017, and as a result of this assessment, the Company believes that its deferred tax assets are more likely than not to be realized. In addition, the Company continuously evaluates its tax contingencies.

 

Accounting for uncertainty in income taxes recognized in an enterprise’s financial statements requires a recognition threshold and measurement attribute for the financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return. Also, consideration should be given to de-recognition, classification, interest and penalties, accounting in interim periods, disclosure and transition. There was no change to the net amount of assets and liabilities recognized in the consolidated balance sheets as a result of the Company’s tax positions.

 

 

Item 3.  Quantitative and Qualitative Disclosures About Market Risk.

 

Not required for smaller reporting company

 

 

Item 4.  Controls and Procedures.

 

The Company maintains disclosure controls and procedures designed to ensure that information it is required to disclose in the reports filed or submitted under the Exchange Act is recorded, processed, summarized, and reported within the time periods specified in the SEC’s rules and forms. The Company’s disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed in the reports filed or submitted under the Exchange Act is accumulated and communicated to the Company’s management, including its principal executive officer and principal financial officer, or persons performing similar functions, as appropriate to allow timely decisions regarding required disclosure.

 

The Company’s management, including the Company’s principal executive officer and principal financial officer, or persons performing similar functions, have evaluated the Company’s disclosure controls and procedures as of the end of the period covered by this report. Based on such evaluation, the Company’s principal executive officer and principal financial officer, or persons performing similar functions, have concluded that the Company’s disclosure controls and procedures were effective as of the end of the period covered by this report. During the most recent fiscal quarter, there have been no changes in the Company’s internal controls over financial reporting that have materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting.

 

14
 

 

PART II

 

OTHER INFORMATION

 

Item 1.    Legal Proceedings.

 

On October 24, 2013, a putative class action lawsuit was brought against the Company by former Wilhelmina model Alex Shanklin and others (the “Shanklin Litigation”), in New York State Supreme Court (New York County) by the same lead counsel who represented plaintiffs in a prior, now-dismissed action brought by Louisa Raske (the “Raske Litigation”). The claims in the Shanklin Litigation initially included breach of contract and unjust enrichment allegations arising out of matters similar to the Raske Litigation, such as the handling and reporting of funds on behalf of models and the use of model images. Other parties named as defendants in the Shanklin Litigation include other model management companies, advertising firms, and certain advertisers. On January 6, 2014, the Company moved to dismiss the Amended Complaint in the Shanklin Litigation for failure to state a claim upon which relief can be granted and other grounds, and other defendants also filed motions to dismiss. On August 11, 2014, the court denied the motion to dismiss as to Wilhelmina and other of the model management defendants. Further, on March 3, 2014, the judge assigned to the Shanklin Litigation wrote the Office of the New York Attorney General bringing the case to its attention, generally describing the claims asserted therein against the model management defendants, and stating that the case “may involve matters in the public interest.” The judge’s letter also enclosed a copy of his decision in the Raske Litigation, which dismissed that case. Plaintiffs have retained substitute counsel, who has filed a Second and now Third Amended Complaint. Plaintiffs’ Third Amended Complaint asserts causes of action for alleged breaches of the plaintiffs' management contracts with the defendants, conversion, breach of the duty of good faith and fair dealing, and unjust enrichment. The Third Amended Complaint also alleges that the plaintiff models were at all relevant times employees, and not independent contractors, of the model management defendants, and that defendants violated the New York Labor Law in several respects, including, among other things, by allegedly failing to pay the models the minimum wages and overtime pay required thereunder, not maintaining accurate payroll records, and not providing plaintiffs with full explanations of how their wages and deductions therefrom were computed. The Third Amended Complaint seeks certification of the action as a class action, damages in an amount to be determined at trial, plus interest, costs, attorneys’ fees, and such other relief as the court deems proper. On October 6, 2015, Wilhelmina filed a motion to dismiss as to most of the plaintiffs’ claims, and oral argument on the motion was heard by the Court in June 2016. The Court entered a decision granting in part and denying in part Wilhelmina’s motion to dismiss on May 26, 2017. The Court (i) dismissed three of the five New York Labor Law causes of action, along with the conversion, breach of the duty of good faith and fair dealing and unjust enrichment causes of action, in their entirety, and (ii) permitted only the breach of contract causes of action, and some plaintiffs’ remaining two New York Labor Law causes of action to continue, within a limited time frame. The plaintiffs have appealed the decision. The parties appeared before the Court for a status conference on July 18, 2017, and the Court directed the defendants to answer the Third Amended Complaint by August 16, 2017.  The Company believes the claims asserted in the Third Amended Complaint are without merit, and intends to continue to vigorously defend the action.

 

On June 6, 2016, another putative class action lawsuit was brought against the Company by former Wilhelmina model Shawn Pressley and others (the “Pressley Litigation”), in New York State Supreme Court (New York County) by the same counsel representing the plaintiffs in the Shanklin Litigation, and asserting identical, although more recent, claims as those in the Shanklin Litigation. On June 14, 2016, the Court stayed all proceedings in the Pressley Litigation until a decision was issued on the motion to dismiss in the Shanklin Litigation. At the court conference on July 18, 2017 (mentioned above), the judge directed the plaintiffs to file an amended complaint in the Pressley Litigation, if any, by August 16, 2017, and directed the defendants to move against or answer such amended complaint by September 29, 2017.  The Company believes the claims asserted in the Pressley Litigation are without merit, and intends to vigorously defend the action.

 

In addition to the legal proceedings disclosed herein, the Company is also engaged in various legal proceedings that are routine in nature and incidental to its business. None of these routine proceedings, either individually or in the aggregate, are believed likely, in the Company's opinion, to have a material adverse effect on its consolidated financial position or its results of operations.

 

 

Item 1.A.   Risk Factors.

 

Not required for smaller reporting company.

 

 

Item 2.   Unregistered Sales of Equity Securities and Use of Proceeds.

 

During 2012, the Board of Directors authorized a stock repurchase program whereby the Company could repurchase up to 500,000 shares of its outstanding common stock. During 2013, the Board of Directors renewed and extended the Company’s share repurchase authority to enable it to repurchase up to an aggregate of 1,000,000 shares of common stock.

 

15
 

 

On August 12, 2016, the Board of Directors increased by an additional 500,000 shares the number of shares of the Company’s common stock which may be repurchased under its stock repurchase program to an aggregate of 1,500,000 shares. The shares may be repurchased from time to time in the open market or through privately negotiated transactions at prices the Company deems appropriate. The program does not obligate the Company to acquire any particular amount of common stock and may be modified or suspended at any time at the Company’s discretion. No shares were repurchased during the six months ended June 30, 2017.

 

 

Item 3.   Defaults Upon Senior Securities.

 

None.

 

 

Item 4.   Mine Safety Disclosures.

 

Not applicable.

 

 

Item 5.   Other Information.

 

None.

 

 

Item 6.   Exhibits.

 

The following is a list of exhibits filed as part of this Form 10-Q:

 

Exhibit No. Description
   

3.1

Restated Certificate of Incorporation of Wilhelmina International, Inc. (incorporated by reference from Exhibit 3.1 to Form S-1/A, dated January 30, 2012).

3.2 Certificate of Amendment of the Restated Certificate of Incorporation of Wilhelmina International, Inc. (incorporated by reference from Exhibit 3.1 to the Form 8-K, filed July 15, 2014).
3.3 Certificate of Amendment of the Restated Certificate of Incorporation of Wilhelmina International, Inc. (incorporated by reference from Exhibit 3.1 to Form 8-K filed July 12, 2017).
3.4 Amended and Restated Bylaws of Wilhelmina International, Inc. (incorporated by reference from Exhibit 3.2 to Form 8-K, filed May 24, 2011).
4.1 Form of Stock Certificate of Common Stock of Billing Concepts Corp. (incorporated by reference from Exhibit 4.1 to Form 10-Q, dated March 31, 1998).
10.1 Seventh Amendment to Credit Agreement dated May 4, 2017, by and among Wilhelmina International, Inc., ZB, N.A. dba Amegy Bank and the guarantors signatory thereto ((incorporated by reference from Exhibit 3.1 to Form 8-K filed May 8, 2017).
31.1 Certification of Principal Executive Officer in Accordance with Section 302 of the Sarbanes-Oxley Act. *
31.2 Certification of Principal Financial Officer in Accordance with Section 302 of the Sarbanes-Oxley Act. *
32.1 Certification of Principal Executive Officer in Accordance with Section 906 of the Sarbanes-Oxley Act. *
32.2 Certification of Principal Financial Officer in Accordance with Section 906 of the Sarbanes-Oxley Act. *
101.INS XBRL Instance Document *
101.SCH XBRL Taxonomy Extension Schema *
101.CAL XBRL Taxonomy Extension Calculation Linkbase *
101.DEF XBRL Taxonomy Extension Definition Linkbase *
101.LAB XBRL Taxonomy Extension Label Linkbase *
101.PRE XBRL Taxonomy Extension Presentation Linkbase *

________________

* Filed herewith

 

 

16
 

 

SIGNATURES

 

 

Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

 

  WILHELMINA INTERNATIONAL, INC.  
  (Registrant)  
     
     
Date:  August 10, 2017 By: /s/ James A. McCarthy  
  Name:  James A. McCarthy  
  Title:

Chief Financial Officer

(Principal Financial Officer)

 

 

 

 

 

 

 

 

17