InnerWorkings Announces Third Quarter 2008 Results
CHICAGO, Nov 06, 2008 (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 September 30, 2008.
-- Revenue grew 69 percent compared with the third quarter of 2007 to $122.0 million.
-- Net income increased 41 percent to $5.7 million, up from $4.0 million in the third quarter of 2007.
-- Quarter-over-quarter enterprise revenue increased 68 percent to $79.2 million.
-- Organic growth rate exceeded 17 percent during the quarter and seven new enterprise clients were added.
-- The Company increased its sales force through the addition of 16 new account executives during the quarter, increasing the total to 265 as of September 30, 2008.
-- Cash flow generated from operations was $3.6 million compared to the $2.5 million generated from operations in the third quarter of 2007.
-- Diluted earnings per share were $0.12, up from $0.08 in the third quarter of 2007. Operating earnings per share for the quarter were $0.10.
Revenue for the Company's third quarter was $122.0 million, an increase of 69 percent compared to revenue of $72.1 million in the third quarter of 2007. Operating income was $7.8 million versus $5.8 million during the same quarter of 2007.
"We continued to generate strong sales momentum during the third quarter, particularly among our enterprise relationships, positioning the Company very favorably for strong organic growth in 2009 and beyond," stated Steven E. Zuccarini, Chief Executive Officer of InnerWorkings. "While we realized many achievements during the period, InnerWorkings is not immune to the current macroeconomic environment. Beginning in September and intensifying in October, we have experienced new increased pressure on marketing and advertising budgets, particularly among our clients in the financial, retail, housing and pharmaceutical industries."
Additional third quarter 2008 financial and operational highlights include the following:
-- For the third quarter of 2008, 65 percent of the Company's revenue was generated from sales to enterprise clients, with the remaining 35 percent derived from transactional clients.
-- In the third quarter of 2008, the Company sold 150,000 common shares of Echo Global Logistics, Inc. for $1.5 million in cash. The Company retains 1,350,000 common shares of Echo.
-- As of September 30, 2008, the Company had a cash and marketable securities balance of $32.5 million.
-- In the second quarter of 2008, the Company authorized a share repurchase program to buy back up to $50 million of its outstanding shares through December 31, 2009. Since the inception of the program, the Company has purchased approximately 2.2 million shares of its common stock for $26.2 million at an average price of $11.82 per share.
-- During the third quarter of 2008, the Company made additional borrowings under our existing credit facilities bringing our total debt to $35.5 million with a total net debt of $3.0 million as of September 30, 2008. The Company has $72.2 million of available liquidity.
"Our success as a high-service, low cost provider continues to reap long-term benefits and we firmly believe that InnerWorkings is on track to become a global multi-billion dollar business," stated Eric D. Belcher, President and Chief Operating Officer of InnerWorkings.
The Company is adjusting near-term 2008 revenue guidance to a range of $435 million to $450 million. Annual earnings per share guidance has been revised to a range of $0.41 to $0.43. Operating earnings per share results are now estimated to range from $0.09 to $0.11 for the fourth quarter of 2008, which reflect the macroeconomic environment.
"We are taking the actions necessary to successfully navigate through this period of economic uncertainty," stated Joseph M. Busky, Chief Financial Officer of InnerWorkings. "Despite the weak economy, we are actively taking advantage of the opportunities presented and remain very positive about the business in 2009 and beyond. Even with the revised 2008 guidance, we expect to finish with an annual revenue run-rate in excess of $500 million as we enter 2009. Additionally, we expect strong organic growth and to continue to make selective acquisitions throughout 2009."
Details regarding 2009 guidance will be provided during the Company's Investor Day scheduled for November 20, 2008 in New York City.
A conference call will be broadcast live on Thursday, November 6, 2008, 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 Steven E. Zuccarini, Chief Executive Officer; Joseph M. Busky, Chief Financial Officer; and Eric D. Belcher, President and Chief Operating 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.
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 Form 10-K for our most recently completed fiscal year.
Condensed Consolidated Statements of Income (Unaudited) Three months ended September 30, Nine months ended September 30, 2007 2008 2007 2008 Revenue $ 72,149,970 $ 122,016,248 $ 198,392,945 $ 314,554,263 Cost of goods sold 53,806,336 92,540,770 148,417,678 237,732,172 Gross profit 18,343,634 29,475,478 49,975,267 76,822,091 Operating expenses: Selling, general, and administrative expenses 11,877,927 20,305,114 33,202,122 54,854,905 Depreciation and amortization 640,697 1,337,901 1,579,815 3,207,904 Income from operations 5,825,010 7,832,463 15,193,330 18,759,282 Total other income 779,448 1,387,327 2,022,304 6,879,302 Income before taxes 6,604,458 9,219,790 17,215,634 25,638,584 Income tax expense 2,577,243 3,540,699 6,705,397 9,996,182 Net income $ 4,027,215 $ 5,679,091 $ 10,510,237 $ 15,642,402 Basic earnings per share $ 0.08 $ 0.12 $ 0.22 $ 0.33 Diluted earnings per share $ 0.08 $ 0.12 $ 0.21 $ 0.31
Consolidated Balance Sheet December 31, September 30, 2007 2008 (unaudited) Balance Sheet Data Cash and cash equivalents $ 26,716,239 $ 17,985,954 Marketable securities 17,975,000 14,492,918 Accounts receivable, net of allowance for doubtful accounts 77,280,954 92,197,483 Unbilled revenue 12,432,916 22,322,325 Inventories 5,455,083 8,092,811 Prepaid expenses 6,653,493 7,914,395 Other current assets 2,900,545 6,692,856 Total long-term assets 57,419,000 93,044,267 Total assets $ 206,833,230 $ 262,743,009 Accounts payable-trade $ 46,017,853 $ 73,137,100 Revolving credit facility - 35,478,508 Other current liabilities 13,222,817 14,853,053 Total long-term liabilities 147,481 271,375 Total stockholders' equity 147,445,079 139,002,973 Total liabilities and stockholders' equity $ 206,833,230 $ 262,743,009
Condensed Consolidated Statement of Cash Flows (Unaudited) Nine Months Ended September 30, 2007 2008 Cash flow Data Net cash provided by operating activities 6,874,276 14,727,353 Net cash used in investing activities (14,977,702 ) (33,728,170 ) Net cash provided by financing activities 41,808,374 10,126,402 Effect of exchange rate changes on cash and cash equivalents - 144,130 Increase (decrease) in cash and cash equivalents 33,704,948 (8,730,285 ) Cash and cash equivalents, beginning of period 20,612,944 26,716,239 Cash and cash equivalents, end of period $ 54,317,892 $ 17,985,954
SOURCE: InnerWorkings, Inc.
InnerWorkings, Inc. Mark Desky, 312-604-5470 firstname.lastname@example.org
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