Press Release
Company continues strong momentum with 27% quarterly revenue growth and record new enterprise account growth
Quarterly Highlights:
-
Revenue of
$199.8 million , an increase of 27% compared to$157.8 million in the third quarter of 2011. Organic revenue growth in the quarter was 19%. -
Record new enterprise account growth of
$29 million , an increase of 18% compared to the third quarter of 2011. Year-to-date, new enterprise account growth has reached$77 million , an increase of 17% over the same period last year. Please refer to the revenue growth table below for more information. -
Non-GAAP Adjusted EBITDA was
$11.3 million , an increase of 21% compared to$9.4 million in the year-earlier period. Please refer to the non-GAAP reconciliation table below for more information. -
Operating income was
$7.6 million , an increase of 28% compared to$5.9 million in the year-earlier period. Excluding proceeds from the sale of Echo Global Logistics stock in the period, non-GAAP Earnings per Diluted share in the third quarter of 2012 were$0.09 compared to$0.07 per diluted share in the third quarter of 2011. Please refer to the non-GAAP reconciliation table below for more information. - Year-over-year enterprise revenue growth was 32% and middle market revenue growth was 12%.
- Company expanded its Brazilian market presence with the opening of São Paulo office in July to support multiple global consumer packaged goods customers in the region.
"We hit two significant milestones this quarter. First, we signed yet
another large client contract, our fourth major enterprise deal in the
last twelve months. Second, our inside sales team secured their 1,000th
middle market business client," said
Additional third quarter 2012 highlights include the following:
- 81% of the Company's revenue was generated from domestic sales, while 19% was derived from international sales activity.
- Enterprise clients accounted for 75% of sales with middle market clients accounting for 25% of sales.
-
As of
September 30, 2012 , the Company had an outstanding balance of$74 million on its$150 million bank credit facility and retained cash and short-term investments of$9.5 million .
"We continue to execute against our strategy while investing to support
our growth," said
| Revenue Growth - Comparing 2012 to 2011 | |||||||||
|
Q3 $(MM) |
Q3 % |
YTD $(MM) |
YTD % |
||||||
| New Enterprise Account Growth |
|
18% |
|
17% | |||||
| New Middle Market Growth |
|
2% |
|
2% | |||||
| Same Customer Spend |
- |
-1% |
|
1% | |||||
| 2011-2012 Acquisitive Growth |
|
8% |
|
9% | |||||
| Total Revenue Growth |
|
27% |
|
29% | |||||
| Total Organic Revenue Growth |
|
19% |
|
20% | |||||
Outlook
The Company is maintaining its previously stated 2012 guidance of
Conference Call
A conference call will be broadcast live on
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 "Events & Presentations" section of InnerWorkings' website at investor.inwk.com/events.cfm.
About
For more information visit: www.inwk.com.
Non-GAAP Financial Measures
This press release includes the following financial measures defined as
"non-GAAP financial measures" by the
- Non-GAAP Adjusted EBITDA which represents income from operations with the addition of depreciation and amortization, stock-based compensation expense and any change in the fair value of contingent consideration liabilities;
-
Non-GAAP Adjusted Operating Cash Flow, which represents net cash
provided by (used in) operating activities, excluding the adjustment
for cash tax benefits arising from option exercises and the
pre-payment of VAT assessments in the
United Kingdom ; - Non-GAAP Earnings per Diluted Share, which represents earnings per diluted share, excluding the gain from the sale of Echo Global Logistics stock.
We believe that Non-GAAP Adjusted EBITDA , Non-GAAP Adjusted Operating
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
| Consolidated Statements of Income | ||||||||||||||
|
Three Months Ended |
Nine Months Ended September 30, | |||||||||||||
| 2011 | 2012 | 2011 | 2012 | |||||||||||
| Revenue | $ | 157,818,904 | $ | 199,768,676 | $ | 458,611,577 | $ | 589,712,549 | ||||||
| Cost of goods sold | 120,726,113 | 152,887,337 | 351,848,878 | 453,591,764 | ||||||||||
| Gross profit | 37,092,791 | 46,881,339 | 106,762,699 | 136,120,785 | ||||||||||
| Operating expenses: | ||||||||||||||
| Selling, general and administrative expenses | 28,664,137 | 36,584,422 | 83,365,659 | 107,311,789 | ||||||||||
| Depreciation and amortization | 2,495,323 | 2,696,255 | 7,389,824 | 8,077,332 | ||||||||||
| Preference claim charge | - | - | 950,000 | - | ||||||||||
| Income from operations | 5,933,331 | 7,600,662 | 15,057,216 | 20,731,664 | ||||||||||
| Total other income (expense) | 432,886 | (166,915 | ) | 1,296,343 | (921,202 | ) | ||||||||
| Income before taxes | 6,366,217 | 7,433,747 | 16,353,559 | 19,810,462 | ||||||||||
| Income tax expense | 2,228,176 | 2,457,403 | 5,725,157 | 6,672,030 | ||||||||||
| Net income | $ | 4,138,041 | $ | 4,976,344 | $ | 10,628,402 | $ | 13,138,432 | ||||||
| Basic earnings per share | $ | 0.09 | $ | 0.10 | $ | 0.23 | $ | 0.27 | ||||||
| Diluted earnings per share | $ | 0.09 | $ | 0.10 | $ | 0.22 | $ | 0.26 | ||||||
| Weighted average shares outstanding, basic | 46,456,980 | 49,406,180 | 46,350,258 | 48,408,532 | ||||||||||
| Weighted average shares outstanding, diluted | 48,485,484 | 51,244,909 | 48,421,908 | 51,038,573 | ||||||||||
| Consolidated Balance Sheets | |||||
|
|
September 30, | ||||
| 2011 | 2012 | ||||
| Cash and cash equivalents | $ | 13,219,385 | $ | 9,156,463 | |
| Short-term investments | 1,129,757 | 362,259 | |||
| Accounts receivable, net of allowance for doubtful accounts | 124,946,621 | 153,598,624 | |||
| Unbilled revenue | 28,318,751 | 33,630,255 | |||
| Inventories | 14,201,606 | 14,401,850 | |||
| Prepaid expenses | 11,066,451 | 14,159,423 | |||
| Other current assets | 15,605,267 | 37,948,269 | |||
| Total long-term assets | 249,165,348 | 258,845,705 | |||
| Total assets | $ | 457,653,186 | $ | 522,102,848 | |
| Accounts payable-trade | $ | 102,290,443 | $ | 125,752,284 | |
| Other current liabilities | 46,091,094 | 38,452,447 | |||
| Revolving credit facility | 60,000,000 | 74,000,000 | |||
| Other long-term liabilities | 67,769,862 | 69,546,954 | |||
| Total stockholders' equity | 181,501,787 | 214,351,163 | |||
| Total liabilities and stockholders' equity | $ | 457,653,186 | $ | 522,102,848 | |
|
|
|||||||
| Nine Months Ended September 30, | |||||||
| 2011 | 2012 | ||||||
| Net cash provided by (used in) operating activities |
$ |
17,023,256 |
$ |
(13,100,484 | ) | ||
| Net cash used in investing activities | (19,239,802 | ) | (10,793,609 | ) | |||
| Net cash provided by financing activities | 6,680,847 | 20,163,365 | |||||
| Effect of exchange rate changes on cash and cash equivalents | (146,287 | ) | (332,194 | ) | |||
| Increase (decrease) in cash and cash equivalents | 4,318,014 | (4,062,922 | ) | ||||
| Cash and cash equivalents, beginning of period | 5,259,272 | 13,219,385 | |||||
| Cash and cash equivalents, end of period | $ | 9,577,286 | $ | 9,156,463 | |||
| Reconciliation of Adjusted EBITDA, Adjusted Operating Cash Flows and Adjusted Diluted earnings per share | ||||||||||||||
|
Three Months Ended |
Nine Months Ended September 30, | |||||||||||||
| 2011 | 2012 | 2011 | 2012 | |||||||||||
| Operating income | $ | 5,933,331 | $ | 7,600,662 | $ | 15,057,216 | $ | 20,731,664 | ||||||
| Depreciation and amortization | 2,495,323 | 2,696,255 | 7,389,824 | 8,077,332 | ||||||||||
| Stock-based compensation expense | 1,118,890 | 719,699 | 2,889,030 | 3,171,073 | ||||||||||
| Preference claim charge | - | - | 950,000 | - | ||||||||||
| Change in fair value of contingent consideration | (153,261 | ) | 330,791 | 107,694 | 797,476 | |||||||||
| Adjusted EBITDA | $ | 9,394,283 | $ | 11,347,407 | $ | 26,393,764 | $ | 32,777,545 | ||||||
|
Three Months Ended |
Nine Months Ended September 30, | |||||||||||||
| 2011 | 2012 | 2011 | 2012 | |||||||||||
| Net cash provided by (used in) operating activities | $ | 12,147,009 | $ | (3,103,935 | ) | $ | 17,023,256 | $ | (13,100,484 | ) | ||||
| Excess tax benefit from exercise of stock awards * | 378,011 | 905,122 | 666,716 | 8,352,190 | ||||||||||
|
Prepayment of VAT assessment in |
- | 3,604,866 | - | 3,604,866 | ||||||||||
| Adjusted net cash provided by (used in) operating activities | $ | 12,525,020 | $ | 1,406,053 | $ | 17,689,972 | $ | (1,143,428 | ) | |||||
|
* Represents a U.S. cash tax deduction in an amount equal to the excess of the market price of the stock on the date of exercise over exercise price. |
||||||||||||||
|
** Represents a payment made to Her Majesty's Revenue and
Customers for VAT assessments in the |
||||||||||||||
| Three Months Ended September 30, | ||||||||||||||
| 2011 | 2012 | |||||||||||||
| Net income | $ | 4,138,041 | $ | 4,976,344 | ||||||||||
| Gain on sale of Echo shares, net of tax | (597,198 | ) | (210,883 | ) | ||||||||||
| Net income, excluding gain on sale of Echo shares | $ | 3,540,843 | $ | 4,765,461 | ||||||||||
| Weighted average shares outstanding, diluted | 48,485,484 | 51,244,909 | ||||||||||||
| Adjusted Diluted EPS, excluding gain on sale of Echo Global Logistics Stock | $ | 0.07 | $ | 0.09 | ||||||||||
(312) 784-2607
pdoyle@inwk.com
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