Major New Enterprise Wins Contribute to Increase in Revenue Guidance

CHICAGO--(BUSINESS WIRE)-- InnerWorkings, Inc. (NASDAQ: INWK), a leading global marketing supply chain company, today reported results for the three months ended March 31, 2012.

Quarterly Highlights:

• Record revenue of $188.5 million, an increase of 30% compared to $145.2 million in the first quarter of 2011. Organic revenue growth in the quarter was 21%.
• Two of the contracts signed in the quarter are expected to become the Company's largest enterprise relationships.
• Non-GAAP Adjusted EBITDA was $9.6 million, an increase of 31% compared to $7.3 million in the year-earlier period. Please refer to the non-GAAP reconciliation table below for more information.
• Net income was $3.7 million, an increase of 32% compared to $2.8 million in the year-earlier period. Excluding proceeds from the sale of Echo Global Logistics stock in both periods, earnings per diluted share in the first quarter of 2012 were $0.07 compared to $0.05 per diluted share in the first quarter of 2011.
• Year-over-year enterprise revenue growth of 35% and transactional revenue growth of 15%. Revenue from new enterprise accounts was a record $23.2 million in the first quarter.
• Amended credit facility, which lowered borrowing costs, increased the line of credit to $150 million and extended the maturity date to August 2015.

"Our business momentum continues to grow, as we delivered record revenue for the sixth consecutive quarter, were awarded what we expect to be our two largest ever enterprise contracts and raised our revenue guidance for the year," said Eric D. Belcher, chief executive officer of InnerWorkings. "The investments we are making to win large global print management contracts and gain share in the middle market are driving the innovation curve in our industry."

Additional first quarter 2012 financial and operational highlights include the following:

• 79% of the Company's revenue was generated from sales to enterprise clients, with the remaining 21% derived from transactional clients.
• As of March 31, 2012, the Company had an outstanding balance of $71.4 million on its newly amended $150 million bank credit facility and retained cash and short-term investments of $16.6 million.

"We continued to execute effectively against our goals, generating strong operational and financial results," said Joseph M. Busky, chief financial officer of InnerWorkings. "We also amended our credit facility, which lowers our borrowing costs by 20%, and also provides the Company with additional liquidity to continue growing the business."

Outlook

The Company is raising its 2012 revenue guidance to $780 million to $810 million from $770 million to $800 million. 2012 earnings per share guidance remains in its previously announced range of $0.42 to $0.45.

Conference Call

A conference call will be broadcast live on Thursday, May 3, 2012, 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.

To access the conference call by telephone, interested parties may dial (877) 771-7024. Interested parties are also invited to listen to the live webcast by visiting the Investor "Events & Presentations" section of InnerWorkings' website at investor.inwk.com/events.cfm. A replay of the webcast will be available later that day in the same section of the website.

About InnerWorkings

InnerWorkings, Inc. (NASDAQ: INWK) is a leading global marketing supply chain company servicing 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. InnerWorkings is based in Chicago, IL, employs approximately 1,100 individuals, and maintains 44 global offices. Among the many industries InnerWorkings services are: retail, financial services, hospitality, non-profits, healthcare, food & beverage, broadcasting & cable, education, transportation and utilities.

For more information visit: www.inwk.com.

Non-GAAP Financial Measure

This press release includes the following financial measure defined as a "non-GAAP financial measure" by the Securities and Exchange Commission: non-GAAP adjusted EBITDA. We believe that Non-GAAP Adjusted EBITDA provides useful information to investors because it provides information about the estimated financial performance of the Company's ongoing business. Non-GAAP Adjusted EBITDA is used by management in its financial and operational decision-making and evaluation of overall operating performance. Non-GAAP Adjusted EBITDA 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. For a reconciliation of this non-GAAP financial measure to the nearest comparable GAAP measure, see "Reconciliation to Non-GAAP Adjusted EBITDA" included in this 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.

Consolidated Statements of Income
			Three Months Ended March 31,
			2011			2012
Revenue			$	145,180,692		$	188,546,402
Cost of goods sold				111,852,782			147,153,019
Gross profit				33,327,910			41,393,383
Operating expenses:
	Selling, general, and administrative expenses			26,990,237			33,083,264
	Depreciation and amortization			2,422,045			2,444,096
Income from operations				3,915,628			5,866,023
Total other income (expense)				386,628			(260,388	)
Income before taxes				4,302,256			5,605,635
Income tax expense				1,511,904			1,917,947
Net income			$	2,790,352		$	3,687,688
Basic earnings per share			$	0.06		$	0.08
Diluted earnings per share			$	0.06		$	0.07
Weighted average shares outstanding, basic				46,128,025			47,193,327
Weighted average shares outstanding, diluted				48,339,024			50,013,569

Consolidated Balance Sheets
		December 31,			March 31,
		2011			2012
Cash and cash equivalents		$	13,219,385		$	15,665,972
Short-term investments			1,129,757			888,897
Accounts receivable, net of allowance for doubtful accounts			124,678,502			146,807,088
Unbilled revenue			28,318,751			30,883,113
Inventories			14,201,606			12,198,821
Prepaid expenses			11,066,451			10,696,763
Other current assets			15,873,386			26,454,173
Total long-term assets			249,165,348			250,731,846
Total assets		$	457,653,186		$	494,326,673
Accounts payable-trade		$	102,245,865		$	119,531,508
Other current liabilities			46,135,672			43,690,982
Revolving credit facility			60,000,000			71,400,000
Other long-term liabilities			67,769,862			67,684,309
Total stockholders' equity			181,501,787			192,019,874
Total liabilities and stockholders' equity		$	457,653,186		$	494,326,673

Cash Flow Data
		Three Months Ended March 31,
		2011				2012
Net cash provided by (used in) operating activities		$	7,050,787			$	(7,472,638	)
Net cash used in investing activities			(6,070,325	)			(3,189,117	)
Net cash provided by financing activities			519,668				12,886,424
Effect of exchange rate changes on cash and cash equivalents			127,224				221,918
Increase in cash and cash equivalents			1,627,354				2,446,587
Cash and cash equivalents, beginning of period			5,259,272				13,219,385
Cash and cash equivalents, end of period		$	6,886,626			$	15,665,972

Reconciliation of Adjusted EBITDA
		Three Months Ended March 31,
		2011			2012
Operating Income		$	3,915,628		$	5,866,023
Depreciation and amortization			2,422,045			2,444,096
Stock based compensation			941,362			1,047,645
Change in fair Value of contingent consideration			-			200,141
Adjusted EBITDA		$	7,279,035		$	9,557,905

InnerWorkings, Inc.
Scott Kozak
(312) 642-3700
skozak@inwk.com

Source: InnerWorkings, Inc.

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