InnerWorkings Announces Record Fourth Quarter and Full Year 2011 Results
Record Revenue and Adjusted EBITDA for Quarter and Year; Established Global Platform Servicing Multinational Clients
CHICAGO, IL February 14, 2012 — InnerWorkings, Inc. (NASDAQ: INWK), a leading provider of global print management and promotional solutions, today reported results for the fourth quarter and fiscal year ended December 31, 2011.
Quarterly Highlights:
| • | Record revenue of $175.2 million, an increase of 34.4% compared to revenue of $130.4 million in the fourth quarter of 2010. This represents the fifth consecutive quarter of record revenue. |
| • | Net income was $5.8 million, an increase of 63.1% compared to $3.5 million in the year-earlier period. Earnings were $0.12 per diluted share compared to $0.07 per diluted share in the year-earlier period. Both earnings per share figures include $0.01 per diluted share from the sale of Echo Global Logistics stock. |
| • | Record Adjusted EBITDA of $11.4 million, an increase of 45.0% compared to $7.9 million in the year-earlier period. Please refer to the non-GAAP reconciliation table below for more information. |
| • | Year-over-year enterprise revenue growth of 31.7% and transactional revenue growth of 42%. |
| • | Cash flow generated from operations was $10.8 million, an increase of 72.1% compared to $6.3 million in the fourth quarter of 2010. |
Fiscal Year Highlights:
| • | Record revenue for fiscal year 2011 of $633.8 million, an increase of 31.4% compared to revenue of $482.2 million in fiscal year 2010. |
| • | Net income was $16.4 million and diluted earnings per share were $0.34, compared to net income of $11.2 million and diluted earnings per share of $0.24 in fiscal year 2010, an increase of 46.2% and 41.7%, respectively. |
| • | Record Adjusted EBITDA was $37.7 million, an increase of 37.8% compared to $27.4 million in fiscal year 2010. Please refer to the non-GAAP reconciliation table below for more information. |
| • | Record organic revenue of $60.4 million from new enterprise accounts. |
| • | Record cash flow generated from operations was $27.8 million, an increase of 233.2% compared to $8.4 million in fiscal year 2010. |
“Our record 2011 financial results were driven by successful execution against our strategic priorities and the breadth of our global platform,” said Eric D. Belcher, chief executive officer of InnerWorkings. “Moving into 2012, we are focused on winning global print management contracts and gaining share in the underserved middle market.”
Additional fourth quarter 2011 financial and operational highlights include the following:
| • | 72% of the Company’s revenue was generated from sales to enterprise clients, with the remaining 28% derived from transactional clients. |
| • | As of December 31, 2011, the Company had an outstanding balance of $60.0 million on its $100 million bank credit facility and retained cash and short-term investments of $14.3 million. |
“We achieved a number of significant milestones in 2011, including records for revenue, Adjusted EBITDA and operating cash flow, which demonstrate our growth and profitability momentum,” said Joseph M. Busky, chief financial officer of InnerWorkings. “We are committed to making the additional investments necessary to continue to improve our market position and enhance our competitive strengths.”
Conference Call
A conference call will be broadcast live on Tuesday, February 14, 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 provider of global print management and promotional solutions to 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 over 1,000 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 December 31, | Twelve Months Ended December 31, | |||||||||||||||
| 2010 | 2011 | 2010 | 2011 | |||||||||||||
| Revenue | $ | 130,397,680 | $ | 175,234,543 | $ | 482,212,101 | $ | 633,846,120 | ||||||||
| Cost of goods sold | 98,866,457 | 132,634,714 | 366,199,728 | 484,483,592 | ||||||||||||
| Gross profit | 31,531,223 | 42,599,829 | 116,012,373 | 149,362,528 | ||||||||||||
| Operating expenses: | ||||||||||||||||
| Selling, general, and administrative expenses | 24,529,777 | 32,258,617 | 91,796,566 | 115,624,276 | ||||||||||||
| Depreciation and amortization | 2,416,469 | 2,781,934 | 9,008,514 | 10,171,758 | ||||||||||||
| Preference claim charge | — | — | — | 950,000 | ||||||||||||
| Income from operations | 4,584,977 | 7,559,278 | 15,207,293 | 22,616,494 | ||||||||||||
| Total other income (expense) | 526,278 | 582,779 | 1,752,002 | 1,879,122 | ||||||||||||
| Income before taxes | 5,111,255 | 8,142,057 | 16,959,295 | 24,495,616 | ||||||||||||
| Income tax expense | 1,576,099 | 2,377,452 | 5,748,806 | 8,102,609 | ||||||||||||
| Net income | $ | 3,535,156 | $ | 5,764,605 | $ | 11,210,489 | $ | 16,393,007 | ||||||||
| Basic earnings per share | $ | 0.08 | $ | 0.12 | $ | 0.25 | $ | 0.35 | ||||||||
| Diluted earnings per share | $ | 0.07 | $ | 0.12 | $ | 0.24 | $ | 0.34 | ||||||||
| Weighted average shares outstanding, basic | 45,822,658 | 46,658,537 | 45,703,699 | 46,428,443 | ||||||||||||
| Weighted average shares outstanding, diluted | 47,733,052 | 49,188,391 | 47,582,337 | 48,826,958 | ||||||||||||
| Consolidated Balance Sheets | |||
| December 31, | December 31, | |||||||
| 2010 | 2011 | |||||||
| Cash and cash equivalents | $ | 5,259,272 | $ | 13,219,385 | ||||
| Short-term investments | 4,284,614 | 1,129,757 | ||||||
| Accounts receivable, net of allowance for doubtful accounts | 85,110,289 | 124,678,502 | ||||||
| Unbilled revenue | 24,626,558 | 28,318,751 | ||||||
| Inventories | 9,674,961 | 14,201,606 | ||||||
| Prepaid expenses | 9,836,486 | 11,066,451 | ||||||
| Other current assets | 7,683,794 | 15,873,386 | ||||||
| Total long-term assets | 133,448,806 | 249,165,348 | ||||||
| Total assets | $ | 279,924,780 | $ | 457,653,186 | ||||
| Accounts payable-trade | $ | 55,604,566 | $ | 102,245,865 | ||||
| Other current liabilities | 13,333,629 | 46,135,672 | ||||||
| Revolving credit facility | 47,400,000 | 60,000,000 | ||||||
| Other long-term liabilities | 3,402,486 | 67,769,862 | ||||||
| Total stockholders’ equity | 160,184,099 | 181,501,787 | ||||||
| Total liabilities and stockholders’ equity | $ | 279,924,780 | $ | 457,653,186 | ||||
| Cash Flow Data | |||
| Twelve Months Ended December 31, | ||||||||
| 2010 | 2011 | |||||||
| Net cash provided by operating activities | 8,352,524 | 27,830,536 | ||||||
| Net cash provided by (used in) investing activities | (4,182,676 | ) | (33,575,352 | ) | ||||
| Net cash provided by (used in) financing activities | (1,780,381 | ) | 14,067,712 | |||||
| Effect of exchange rate changes on cash and cash equivalents | (34,101 | ) | (362,783 | ) | ||||
| Increase in cash and cash equivalents | 2,355,366 | 7,960,113 | ||||||
| Cash and cash equivalents, beginning of period | 2,903,906 | 5,259,272 | ||||||
| Cash and cash equivalents, end of period | $ | 5,259,272 | $ | 13,219,385 | ||||
| Reconciliation of Adjusted EBITDA | |||||||
| Three Months Ended December 31, | Twelve Months Ended December 31, | |||||||||||||||
| 2010 | 2011 | 2010 | 2011 | |||||||||||||
| Operating Income | $ | 4,584,977 | $ | 7,559,278 | $ | 15,207,293 | $ | 22,616,494 | ||||||||
| Preference claim charge | — | — | — | 950,000 | ||||||||||||
| Depreciation and amortization | 2,416,469 | 2,781,934 | 9,008,514 | 10,171,758 | ||||||||||||
| Stock based compensation | 879,079 | 1,087,157 | 3,148,619 | 3,976,187 | ||||||||||||
| Adjusted EBITDA | $ | 7,880,525 | $ | 11,428,369 | $ | 27,364,426 | $ | 37,714,439 | ||||||||
CONTACT:
Scott Kozak
InnerWorkings, Inc.
(312) 642-3700
skozak@inwk.com
SOURCE: InnerWorkings, Inc.