Some of these customers have filed for bankruptcy in 2020 and others may be unable to pay amounts already owed to the Company, resulting in increased future bad debt expense. Many of the Company’s customers are large retail and fashion companies, some of which have had to close stores in the United States and internationally due to the spread of COVID-19. In addition to reduced revenue, business operations have been adversely affected by reductions in productivity, limitations on the ability of customers to make timely payments, disruptions in talents’ ability to travel to needed locations, and supply chain disruptions impeding clothing or footwear wardrobe from reaching destinations for photoshoots and other bookings.
During the second half of 2020, bookings increased from the preceding months, but remained significantly below pre-pandemic levels. As a result, beginning in March 2020, the Company saw a significant reduction in customer bookings, resulting in a negative impact to revenue and earnings. There have been mandates from federal, state, and local authorities requiring forced closures of non-essential businesses. The Company’s revenues are heavily dependent on the level of economic activity in the United States and the United Kingdom, particularly in the fashion, advertising and publishing industries, all of which have been negatively impacted by the pandemic and may not recover as quickly as other sectors of the economy. To help mitigate the spread of the virus and in response to health advisories and governmental actions and regulations, the Company has modified its business practices and has implemented health and safety measures that are designed to protect employees and represented talent. As the global impact of COVID-19 continues, Wilhelmina’s first priority has been to protect the health and safety of its employees and talent. On March 11, 2020, the World Health Organization declared the outbreak of novel coronavirus (COVID-19) as a pandemic, which spread rapidly throughout the United States and the world. In the first quarter of 2020 and the fourth quarter of 2019, Wilhelmina recorded non-cash goodwill impairments charges of $0.8 million and $4.8 million, respectively, triggered by a sustained decline in share price of the Company’s common stock. The increase in loss for the fiscal year ended Decemwas primarily due to the decrease in revenues net of model costs, partially offset by decreases in goodwill impairment expense and operating expenses. The increase in net income for the fourth quarter of 2020 was due to a reduction in operating expenses from the Company’s cost savings initiatives and absence of goodwill impairment expense, partially offset by lower revenue net of model costs. The decrease in revenues when compared to the same periods of the prior year was primarily due to postponement and cancellation of bookings by many of Wilhelmina’s customers while non-essential business activities were barred, or limited, in the cities where the Company operates, as well as the closure of the Wilhelmina Studios division in the fourth quarter of 2019 and the hair and makeup artist division in the second half of 2020. During the three and twelve months ended December 31, 2020, the novel coronavirus (COVID-19) pandemic had a material impact on revenues. For the fiscal year ended December 31, 2020, Wilhelmina reported revenues of $41.6 million and net loss of $4.9 million compared to revenue of $75.5 million and net loss of $4.8 million for the fiscal year ended December 31, 2019. (Nasdaq: WHLM) ("Wilhelmina" or the "Company") today reported revenues of $12.0 million and net income of $0.4 million for the three months ended December 31, 2020, compared to revenues of $18.3 million and net loss of $5.0 million for the three months ended December 31, 2019. **Non-GAAP measures referenced are detailed in the disclosures at the end of this release.ĭALLAS, Ma(GLOBE NEWSWIRE) - Wilhelmina International, Inc.
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