InnerWorkings Announces First Quarter 2009 Results

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May 7, 2009
InnerWorkings Announces First Quarter 2009 Results

CHICAGO, May 07, 2009 (BUSINESS WIRE) -- InnerWorkings, Inc. (NASDAQ:INWK), a leading global provider of managed print and promotional solutions to corporate clients, today reported results for the three months ended March 31, 2009.

Quarterly Highlights:

  • Revenue grew eight percent to $94.3 million compared with the first quarter of 2008.
  • Enterprise revenue increased 10 percent to $61.4 million from $55.6 million in the first quarter of 2008.
  • The Company added eight new enterprise clients, including several well-known brands such as Samsung Electronics.
  • Cash flow generated from operations was $7.7 million in the first quarter of 2009 compared to the $1.8 million generated from operations in the year-earlier period.

"Our enterprise offering represents our most significant growth opportunity and is resonating strongly with customers as evidenced by the fact that we added eight new accounts in the period while continuing to retain and grow existing relationships," said Eric D. Belcher, Chief Executive Officer of InnerWorkings. "We strongly believe that the Company is poised for healthy and profitable market share gains in the months and years ahead."

Revenue for the Company's first quarter was $94.3 million, an increase of eight percent compared to revenue of $87.2 million in the first quarter of 2008. First quarter net income was $0.2 million, or $0.01 per diluted share.

Additional first quarter 2009 financial and operational highlights include the following:

  • For the first quarter of 2009, 65 percent of the Company's revenue was generated from sales to enterprise clients, with the remaining 35 percent derived from transactional clients.
  • Customer concentration for the Company's top 10 accounts decreased to 37% of total revenue compared to 42% in the year-earlier period.
  • The Company implemented a reduction in non-sales workforce of approximately 15%. As a result of this initiative, the Company expects to realize cost savings of approximately $6 million on an annualized basis.
  • The Company has approximately $30 million of available liquidity on its bank credit facility and an additional $19 million of cash and auction rate securities.

Outlook

The Company is reaffirming its previously stated 2009 guidance, including a revenue range of $450 million to $475 million and an earnings per share range of $0.35 to $0.39.

"The current economic environment and our strong financial position in the industry are creating market opportunities for us and we remain positive about the business for 2009 and beyond," said Joseph M. Busky, Chief Financial Officer of InnerWorkings. "Furthermore, our focus on disciplined cost management and maximizing the deployment of capital will continue to reap long-term benefits while enhancing shareholder value."

Conference Call

A conference call will be broadcast live on Thursday, May 7, 2009, 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) 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 domain expertise, the Company procures, manages and delivers printed materials and promotional products as part of a comprehensive outsourced enterprise solution. The Company is based in Chicago with other offices in the United States and in the United Kingdom. For more information on InnerWorkings, visit: www.inwk.com.

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.

Consolidated Statements of Income (Unaudited)    
         
    Three months ended March 31,
    2008   2009
         
Revenue $ 87,191,586   $ 94,277,433  
Cost of goods sold 65,623,360   71,267,277  
Gross profit 21,568,226   23,010,156  
Operating expenses:      
  Selling, general, and administrative expenses 15,050,555   20,619,116  
  Depreciation and amortization 722,923   1,495,375  
Income from operations 5,794,748   895,665  
Total other income (expense) 574,913   (492,101 )
Income before taxes 6,369,661   403,564  
Income tax expense 2,511,645   155,153  
Net income $ 3,858,016   $ 248,411  
         
         
Basic earnings per share $ 0.08   $ 0.01  
Diluted earnings per share $ 0.08   $ 0.01  
         
Weighted average shares outstanding, basic 48,025,475   45,399,786  
Weighted average shares outstanding, diluted 51,319,426   47,034,006  
Consolidated Balance Sheets      
  December 31,   March 31,
  2008   2009
      (unaudited)
Balance Sheet Data      
Cash and cash equivalents $ 4,011,855   $ 4,911,317
Accounts receivable, net of allowance for doubtful accounts 73,628,112   78,245,896
Unbilled revenue 27,802,667   23,769,521
Inventories 7,539,870   7,854,375
Prepaid expenses 9,257,086   10,999,746
Other current assets 8,081,553   8,634,657
Total long-term assets 123,501,173   129,254,733
Total assets $ 253,822,316   $ 263,670,245
       
Accounts payable-trade $ 54,084,430   68,758,423
Other current liabilities 65,854,864   54,961,885
Total long-term liabilities 144,993   5,006,711
Total stockholders' equity 133,738,029   134,943,226
Total liabilities and stockholders' equity $ 253,822,316   $ 263,670,245
Cash Flow Data (Unaudited)        
         
    Three Months Ended March 31,
    2008   2009
         
Net cash provided by operating activities  

$ 1,801,645

   

$ 7,653,405

 
Net cash used in investing activities   (23,353 )   (6,138,780 )
Net cash provided by (used in) financing activities   1,020,130     (477,393 )
Effect of exchange rate changes on cash and cash equivalents   -    

(137,770

)
Increase in cash and cash equivalents   2,798,422     899,462  
Cash and cash equivalents, beginning of period   26,716,239     4,011,855  
Cash and cash equivalents, end of period  

$ 29,514,661

   

$ 4,911,317

 

(inwk-e)

SOURCE: InnerWorkings, Inc.

InnerWorkings, Inc.
Kyle Berry, 312-784-2607
kberry@inwk.com

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