UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of
the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): April 1, 2014
INNERWORKINGS, INC.
(Exact name of registrant as specified in its charter)
| | Delaware (State or other jurisdiction of incorporation) | 000-52170 (Commission File Number) | 20-5997364 (I.R.S. Employer Identification No.) |
| | | 600 West Chicago Avenue Suite 850 Chicago, Illinois (Address of principal executive offices) | 60654 (Zip Code) |
| | | (312) 642-3700 (Registrant’s telephone number, including area code) | |
| | N/A | | |
(Former name or former address, if changed since last report) | |
| | | | | | | |
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
o Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
o Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
o Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
o Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
On March 18, 2014, InnerWorkings, Inc. (the “Company”) filed its Form 10-K for the year ended December 31, 2013 (the “2013 10-K”). Based on the restated financial statements included in the 2013 10-K, the Company is now supplementally providing for the periods presented below Adjusted EBITDA and Non-GAAP diluted earnings per share, which are defined as "non-GAAP financial measures" by the Securities and Exchange Commission. The Company believes that Non-GAAP Adjusted EBITDA and Non-GAAP diluted earnings per share provide useful information to investors because they provide information about the estimated financial performance of the Company's ongoing business. Non-GAAP Adjusted EBITDA and Non-GAAP diluted earnings per share are used by management in its financial and operational decision-making and evaluation of overall operating performance. Non-GAAP Adjusted EBITDA and Non-GAAP diluted earnings per share may be different from similar 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 and should be should be read in conjunction with the 2013 10-K. Adjusted EBITDA and Non-GAAP diluted earnings per share, as well as a reconciliation of these non-GAAP financial measures to the nearest comparable GAAP measures, are presented below.
| | | Year Ended December 31, 2013 | |
| | | First Quarter | | | Second Quarter | | | Third Quarter | | | Fourth Quarter | | | Fiscal Year | |
| Operating income (loss) | | $ | (3,836,315 | ) | | $ | 5,830,412 | | | $ | (8,027,062 | ) | | $ | 52,437 | | | $ | (5,980,528 | ) |
| Depreciation and amortization | | | 2,465,667 | | | | 2,648,396 | | | | 3,880,431 | | | | 4,669,365 | | | | 13,663,859 | |
| Stock-based compensation expense | | | 973,193 | | | | 1,080,913 | | | | 982,082 | | | | 1,696,843 | | | | 4,733,031 | |
| Change in fair value of contingent consideration | | | 608,832 | | | | (1,649,389 | ) | | | (29,627,005 | ) | | | (663,005 | ) | | | (31,330,567 | ) |
| Payments to former owner of Productions Graphics, net of cash recovered | | | 6,308,660 | | | | (2,521,635 | ) | | | (910,811 | ) | | | (252,156 | ) | | | 2,624,059 | |
| Goodwill impairment charge | | | - | | | | - | | | | 37,908,000 | | | | - | | | | 37,908,000 | |
| Restructuring and asset write down charges | | | - | | | | - | | | | 4,321,862 | | | | - | | | | 4,321,862 | |
| Legal fees in connection with patent infringement defense | | | 245,340 | | | | 506,880 | | | | 209,075 | | | | - | | | | 961,295 | |
| Adjusted EBITDA | | $ | 6,765,377 | | | $ | 5,895,577 | | | $ | 8,736,572 | | | $ | 5,503,484 | | | $ | 26,901,011 | |
| | | Year Ended December 31, 2012 | |
| | | First Quarter | | | Second Quarter | | | Third Quarter | | | Fourth Quarter | | | Fiscal Year | |
| Operating income | | $ | 6,947,361 | | | $ | 6,212,101 | | | $ | 6,630,234 | | | $ | 25,959,085 | | | $ | 45,748,781 | |
| Depreciation and amortization | | | 2,444,096 | | | | 2,936,981 | | | | 2,696,255 | | | | 2,713,120 | | | | 10,790,452 | |
| Stock-based compensation expense | | | 1,047,645 | | | | 1,403,729 | | | | 719,699 | | | | 3,021,797 | | | | 6,192,870 | |
| Change in fair value of contingent consideration | | | 200,141 | | | | 266,544 | | | | 330,791 | | | | (28,486,250 | ) | | | (27,688,774 | ) |
| Preference claim settlement charge | | | - | | | | - | | | | - | | | | 1,099,386 | | | | 1,099,386 | |
| VAT settlement charge | | | - | | | | - | | | | - | | | | 1,485,088 | | | | 1,485,088 | |
| Payments to former owner of Productions Graphics, net of cash recovered | | | (1,410,979 | ) | | | 1,004,253 | | | | (4,355 | ) | | | - | | | | (411,082 | ) |
| Adjusted EBITDA | | $ | 9,228,264 | | | $ | 11,823,608 | | | $ | 10,372,624 | | | $ | 5,792,226 | | | $ | 37,216,721 | |
| | | Year Ended December 31, 2013 | |
| | | First Quarter | | | Second Quarter | | | Third Quarter | | | Fourth Quarter | | | Fiscal Year | |
| Net income (loss) | | $ | (2,801,274 | ) | | $ | 3,675,521 | | | $ | (9,066,070 | ) | | $ | (468,526 | ) | | $ | (8,660,349 | ) |
| Change in fair value of contingent consideration, net of tax | | | 645,020 | | | | (1,202,166 | ) | | | (28,489,495 | ) | | | (610,877 | ) | | | (29,657,518 | ) |
| Payments to former owner of Productions Graphics, net of cash recovered, net of tax | | | 4,169,056 | | | | (1,746,673 | ) | | | (630,896 | ) | | | (174,662 | ) | | | 1,616,825 | |
| Goodwill impairment charge | | | - | | | | - | | | | 37,908,000 | | | | - | | | | 37,908,000 | |
| Restructuring and asset write down charges, net of tax | | | - | | | | - | | | | 2,614,726 | | | | - | | | | 2,614,726 | |
| Legal fees in connection with patent infringement defense, net of tax | | | 159,520 | | | | 329,573 | | | | 135,941 | | | | - | | | | 625,034 | |
| Adjusted net income (loss) | | | 2,172,322 | | | | 1,056,256 | | | | 2,472,206 | | | | (1,254,065 | ) | | | 4,446,719 | |
| | | | | | | | | | | | | | | | | | | | | |
| Weighted average shares outstanding, diluted | | | 52,006,801 | | | | 51,965,539 | | | | 52,217,066 | | | | 52,125,182 | | | | 50,875,131 | |
| | | | | | | | | | | | | | | | | | | | | |
| Adjusted Diluted EPS | | $ | 0.04 | | | $ | 0.02 | | | $ | 0.05 | | | $ | (0.02 | ) | | $ | 0.09 | |
| | | Year Ended December 31, 2012 | |
| | | First Quarter | | | Second Quarter | | | Third Quarter | | | Fourth Quarter | | | Fiscal Year | |
| Net income | | $ | 4,429,214 | | | $ | 3,773,824 | | | $ | 4,303,494 | | | $ | 26,287,490 | | | $ | 38,794,022 | |
| Change in fair value of contingent consideration, net of tax | | | 174,694 | | | | 204,991 | | | | 370,163 | | | | (28,458,372 | ) | | | (27,708,524 | ) |
| Preference claim settlement charge, net of tax | | | - | | | | - | | | | - | | | | 668,449 | | | | 668,449 | |
| VAT settlement charge, net of tax | | | - | | | | - | | | | - | | | | 1,121,241 | | | | 1,121,241 | |
| Payments to former owner of Productions Graphics, net of cash recovered, net of tax | | | (1,000,402 | ) | | | 665,766 | | | | (3,040 | ) | | | - | | | | (337,676 | ) |
| Adjusted net income (loss) | | | 3,603,507 | | | | 4,644,581 | | | | 4,670,617 | | | | (381,192 | ) | | | 12,537,513 | |
| | | | | | | | | | | | | | | | | | | | | |
| Weighted average shares outstanding, diluted | | | 52,006,801 | | | | 51,965,539 | | | | 52,217,066 | | | | 51,612,009 | | | | 51,240,076 | |
| | | | | | | | | | | | | | | | | | | | | |
| Adjusted Diluted EPS | | $ | 0.07 | | | $ | 0.09 | | | $ | 0.09 | | | $ | (0.01 | ) | | $ | 0.24 | |
*The information furnished under Item 7.01 of this Current Report on Form 8-K is being furnished and shall not be deemed to be “filed” for the purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or incorporated by reference in any filing under the Securities Act of 1933, as amended, or the Exchange Act, except as shall be expressly set forth by specific reference in such a filing.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
| | INNERWORKINGS, INC. |
| | | |
| | | |
| Dated: April 1, 2014 | By: | /s/ Joseph M. Busky |
| | Name: | Joseph M. Busky |
| | Title: | Chief Financial Officer |
