InnerWorkings Announces Second Quarter 2010 Results
Organic Revenue Growth of 20% Year-Over-Year; Six New Enterprise Agreements
Chicago, IL, August 5, 2010 – InnerWorkings, Inc. (NASDAQ: INWK), a leading global provider of managed print and promotional solutions, today reported results for the three months ended June 30, 2010.
Quarterly Highlights:
| | · | Revenue generated during the second quarter was $120.5 million, an increase of 20.4% compared with revenue of $100.1 million in the second quarter of 2009. |
| | · | Earnings per share for the second quarter were $0.07 per diluted share vs. $0.05 per diluted share in the second quarter of 2009. Both figures include $0.01 per diluted share from the sale of Echo Global Logistics stock. |
| | · | Revenue from new accounts was $18.5 million in the second quarter of 2010. |
| | · | Six new enterprise contracts were signed during the quarter, including agreements with Rent-A Center, Payless, and Advance Auto Parts. |
| | · | Adjusted EBITDA increased to $7.7 million in the second quarter of 2010 from $5.7 million in the second quarter of 2009. Please refer to the non-GAAP reconciliation table below for more information. |
“Our solid growth in the first half of 2010 was driven by further market share gains in the enterprise segment of our business,” said Eric D. Belcher, Chief Executive Officer of InnerWorkings. “The market opportunity in front of InnerWorkings remains significant and we believe the growth strategy and culture we have in place will enable us to continue to capitalize on this opportunity in the months and years ahead.”
Additional second quarter 2010 financial and operational highlights include the following:
| | · | For the second quarter of 2010, 72 percent of the Company’s revenue was generated from sales to enterprise clients, with the remaining 28 percent derived from transactional clients. |
| | · | As of June 30, 2010, the Company had an outstanding balance of $47.6 million on its bank credit facility and had cash and short-term investments of $15.1 million. |
| | · | In early August 2010, the Company refinanced its $75 million, 3-year credit agreement with a $100 million, 4-year credit agreement. |
Outlook
The Company is maintaining its previously stated 2010 guidance of $440 million to $470 million in revenue and $0.24 to $0.29 in earnings per share.
"We expect to maintain strong organic growth and steady margins for the remainder of 2010,” said Joseph M. Busky, Chief Financial Officer of InnerWorkings. "With increased financial flexibility and a commitment to prudently manage our expenses, we are well positioned to better serve our customers, invest in our growth initiatives and add value for our shareholders.”
Conference Call
A conference call will be broadcast live on Thursday, August 5, 2010, at 4:30 p.m. Central Time (5:30 p.m. Eastern Time). The live webcast discussion, which will include a Q&A session, will be hosted by Eric D. Belcher, Chief Executive Officer, and Joseph M. Busky, Chief Financial Officer. Interested parties are invited to listen to the live webcast by visiting the Investor “Events & Presentations” section of InnerWorkings’ website at www.inwk.com. A replay of the webcast will be available later that day in the same section of the website.
About InnerWorkings, Inc.
InnerWorkings, Inc. (Nasdaq: INWK - News) is a leading global provider of managed print and promotional solutions to corporate clients across a wide range of industries. With proprietary technology, an extensive supplier network and deep domain expertise, the Company procures, manages and delivers printed materials and promotional products as part of a comprehensive outsourced enterprise solution. The Company also owns and operates the online printing site, Inkchaser (www.inkchaser.com). InnerWorkings is based in Chicago with 23 offices in the United States and the United Kingdom. For more information visit: www.inwk.com.
Non-GAAP Financial Measures
This press release includes the following financial measure defined as a “non-GAAP financial measure” by the Securities and Exchange Commission: adjusted EBITDA. This measure may be different from non-GAAP financial measures used by other companies. The presentation of this financial information, which is not prepared under any comprehensive set of accounting rules or principles, is not intended to be considered in isolation or as a substitute for the financial information prepared and presented in accordance with generally accepted accounting principles. For a reconciliation of this non-GAAP financial measure to the nearest comparable GAAP measure, see “Reconciliation of Adjusted EBITDA” included in this press release.
Forward-Looking Statements
This release contains statements relating to future results. These statements are forward-looking statements under the federal securities laws. We can give no assurance that any future results discussed in these statements will be achieved. Any forward-looking statements represent our views only as of today and should not be relied upon as representing our views as of any subsequent date. These statements are subject to a variety of risks and uncertainties that could cause our actual results to differ materially from the statements contained in this release. For a discussion of important factors that could affect our actual results, please refer to our SEC filings, including the “Risk Factors” section of our most recently filed Form 10-K.
(inwk-e)
Consolidated Statements of Income
(unaudited)
| | | Three Months Ended June 30, | | | Six Months Ended June 30, | |
| | | 2009 | | | 2010 | | | 2009 | | | 2010 | |
| Revenue | | $ | 100,097,510 | | | $ | 120,471,286 | | | $ | 194,374,943 | | | $ | 232,683,832 | |
| Cost of goods sold | | | 75,358,000 | | | | 91,431,674 | | | | 146,625,277 | | | | 176,711,690 | |
| Gross profit | | | 24,739,510 | | | | 29,039,612 | | | | 47,749,666 | | | | 55,972,142 | |
| Operating expenses: | | | | | | | | | | | | | | | | |
| Selling, general, and administrative expenses | | | 20,025,090 | | | | 22,172,634 | | | | 40,644,206 | | | | 44,177,058 | |
| Depreciation and amortization | | | 2,219,071 | | | | 2,215,219 | | | | 3,714,446 | | | | 4,332,844 | |
| Income from operations | | | 2,495,349 | | | | 4,651,759 | | | | 3,391,014 | | | | 7,462,240 | |
| Total other income | | | 522,495 | | | | 216,560 | | | | 30,394 | | | | 741,659 | |
| Income before taxes | | | 3,017,844 | | | | 4,868,319 | | | | 3,421,408 | | | | 8,203,899 | |
| Income tax expense | | | 870,568 | | | | 1,726,198 | | | | 1,025,721 | | | | 2,893,651 | |
| Net income | | $ | 2,147,276 | | | $ | 3,142,121 | | | $ | 2,395,687 | | | $ | 5,310,248 | |
| | | | | | | | | | | | | | | | | |
| Basic earnings per share | | $ | 0.05 | | | $ | 0.07 | | | $ | 0.05 | | | $ | 0.12 | |
| Diluted earnings per share | | $ | 0.05 | | | $ | 0.07 | | | $ | 0.05 | | | $ | 0.11 | |
| | | | | | | | | | | | | | | | | |
| Weighted average shares outstanding, basic | | | 45,526,074 | | | | 45,659,907 | | | | 45,463,559 | | | | 45,656,230 | |
| Weighted average shares outstanding, diluted | | | 47,164,741 | | | | 47,576,328 | | | | 47,099,588 | | | | 47,484,046 | |
| | | December 31, | | | June 30, | |
| | | 2009 | | | 2010 | |
| | | | | | (Unaudited) | |
| Cash and cash equivalents | | $ | 2,903,906 | | | $ | 3,514,824 | |
| Short-term investments | | | 23,541,199 | | | | 11,635,715 | |
| Accounts receivable, net of allowance for doubtful accounts | | | 72,565,814 | | | | 80,829,980 | |
| Unbilled revenue | | | 20,189,900 | | | | 23,483,014 | |
| Inventories | | | 8,749,266 | | | | 9,610,466 | |
| Prepaid expenses | | | 11,399,560 | | | | 10,418,546 | |
| Other current assets | | | 7,391,905 | | | | 6,351,896 | |
| Total long-term assets | | | 120,416,506 | | | | 122,926,173 | |
| Total assets | | $ | 267,158,056 | | | $ | 268,770,614 | |
| | | | | | | | | |
| Accounts payable-trade | | $ | 53,915,750 | | | $ | 54,488,413 | |
| Other current liabilities | | | 16,717,920 | | | | 12,696,987 | |
| Revolving credit facility | | | 46,384,586 | | | | 47,627,164 | |
| Other long-term liabilities | | | 3,089,784 | | | | 1,522,891 | |
| Total stockholders' equity | | | 147,050,016 | | | | 152,435,159 | |
| Total liabilities and stockholders' equity | | $ | 267,158,056 | | | $ | 268,770,614 | |
Cash Flow Data
(Unaudited)
| | | Six Months Ended June 30, | |
| | | 2009 | | | 2010 | |
| | | (Unaudited) | |
| Net cash provided by operating activities | | $ | 7,481,904 | | | $ | 6,599 | |
| Net cash provided by (used in) investing activities | | | (8,256,157 | ) | | | 1,731,686 | |
| Net cash used in financing activities | | | (211,809 | ) | | | (1,091,263 | ) |
| Effect of exchange rate changes on cash and cash equivalents | | | (57,549 | ) | | | (36,104 | ) |
| Increase (decrease) in cash and cash equivalents | | | (1,043,611 | ) | | | 610,918 | |
| Cash and cash equivalents, beginning of period | | | 4,011,855 | | | | 2,903,906 | |
| Cash and cash equivalents, end of period | | $ | 2,968,244 | | | $ | 3,514,824 | |
Reconciliation of Adjusted EBITDA
| | | Three Months Ended June 30, | | | Six Months Ended June 30, | |
| | | 2009 | | | 2010 | | | 2009 | | | 2010 | |
| | | | | | | | | | | | | |
| Operating Income | | $ | 2,495,349 | | | $ | 4,651,759 | | | $ | 3,391,014 | | | $ | 7,462,240 | |
| Depreciation and amortization | | | 2,219,071 | | | | 2,215,219 | | | | 3,714,446 | | | | 4,332,844 | |
| Stock based compensation | | | 1,015,843 | | | | 836,351 | | | | 1,935,598 | | | | 1,397,369 | |
| Adjusted EBITDA | | $ | 5,730,263 | | | $ | 7,703,329 | | | $ | 9,041,058 | | | $ | 13,192,453 | |
Contact:
InnerWorkings, Inc.
Joe Busky
312-784-2603
jbusky@inwk.com
