8-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of

the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): November 7, 2006

INNERWORKINGS, INC.

(Exact name of registrant as specified in its charter)

Delaware	333-133950	36-4469346
(State or other jurisdiction of incorporation)	(Commission File Number)	(I.R.S. Employer Identification No.)
	600 West Chicago Avenue Suite 850 Chicago, Illinois	60610
	(Address of principal executive offices)	(Zip Code)

(312) 642-3700

(Registrant’s telephone number, including area code)

N/A

(Former name or former address, if changed since last report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

¨ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

¨ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

¨ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

¨ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Item 2.02 Results of Operations and Financial Condition.*

On November 7, 2006, InnerWorkings, Inc. issued a press release announcing financial results for its fiscal quarter ended September 30, 2006. A copy of the press release is attached hereto as Exhibit 99.1.

Item 9.01 Financial Statements and Exhibits.

(d) Exhibits:

Exhibit No.	Description
99.1*	Press Release dated November 7, 2006.

* The information furnished under Item 2.02 of this Current Report on Form 8-K, including Exhibit 99.1, is being furnished and shall not be deemed to be “filed” for the purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or incorporated by reference in any filing under the Securities Act of 1933, as amended, or the Exchange Act, except as shall be expressly set forth by specific reference in such a filing.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

	INNERWORKINGS, INC.
Dated: November 8, 2006	By:	/s/ Nicholas J. Galassi
	Name:	Nicholas J. Galassi
	Title:	Chief Financial Officer

Exhibit Index

Exhibit No.	Description
99.1*	Press Release dated November 7, 2006.

* The information furnished under Item 2.02 of this Current Report on Form 8-K, including Exhibit 99.1, is being furnished and shall not be deemed to be “filed” for the purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or incorporated by reference in any filing under the Securities Act of 1933, as amended, or the Exchange Act, except as shall be expressly set forth by specific reference in such a filing.

EX-99.1

Exhibit 99.1

InnerWorkings, Inc. Announces Third Quarter 2006 Results

Company’s innovative business model delivers 78% top-line growth

Chicago, IL, November 7, 2006 – InnerWorkings, Inc. (Nasdaq: INWK), a leading provider of print procurement solutions to corporate clients in the United States, today reported record third quarter fiscal year 2006, ended September 30, 2006.

Highlights:

• Revenue grew to a record of $41.8 million, an increase of over 78 percent versus the fiscal 2005 third quarter.

• Income from operations increased 128 percent year over year.

• Growth strategy execution through the addition of 23 account executives and five new enterprise clients during the three months ended September 30, 2006.

• Full year 2006 revenue and net income guidance to the ranges of $145 million to $147 million and $7.6 million to $7.8 million, respectively.

Revenue for the quarter was $41.8 million, an increase of 78 percent compared to revenue of $23.5 million in the prior year quarter. For the 2006 third quarter, income from operations was $3.6 million, an increase of 128 percent from $1.6 million during the same quarter of 2005. Income from operations was 8.7 percent of revenue during the current year quarter, up from 6.8 percent during the same quarter of the prior year.

“We are pleased to deliver record results in our first quarter as a public company,” commented Steve Zuccarini, Chief Executive Officer of InnerWorkings. “Our strong performance reaffirms the value we deliver to our customers, our innovative business model and opportunities to drive continued revenue growth.”

For the three months ended September 30, 2006, net income was $2.4 million, an increase of 48 percent from $1.6 million during the third quarter of 2005. Year over year comparisons were impacted by the effect of corporate income taxes, which were not part of the Company’s 2005 results due to its structure as a limited liability company. During the three months ended September 30, 2006, income before taxes increased by 144 percent from the same quarter of the prior year. For the third quarter, fully diluted EPS was $.05.

InnerWorkings Inc. Announces Third Quarter 2006 Results

Page 1 of 3

“Our performance during the quarter shows our commitment to profitable growth and highlights the operational and financial efficiency of our business model,” stated Nick Galassi, Chief Financial Officer of InnerWorkings. “We were able to increase revenues without ratably increasing our operating costs, which produced record earnings for the quarter.”

Additional third quarter fiscal year 2006 financial and operational highlights include the following:

• 75 percent of the Company’s revenue was generated from sales to enterprise, or contract, clients, with the remaining 25 percent coming from transactional clients.

• The Company completed an initial public offering in August 2006, raising $46.8 million net of underwriter fees and preferred dividend payments.

• The Company had $44.3 million of cash, cash equivalents and marketable securities as of September 30, 2006.

• The Company’s balance sheet contains no debt as of the period ended September 30, 2006.

• The Company added 23 sales executives during the fiscal 2006 third quarter, bringing the quarter-end total to 114.

• The Company signed five new enterprise clients during the three months ended September 30, 2006, resulting in a quarter-end total of 86 enterprise accounts.

• The Company acquired CoreVision Group, a provider of print management services, in September 2006. CoreVision added 15 sales executives during the quarter in Michigan, Missouri and Illinois.

Outlook

The Company anticipates revenue for fiscal year 2006 in the range of $145 million to $147 million with resulting net income and fully-diluted earnings per share in the ranges of $7.6 million to $7.8 million and $0.17 to $0.18, respectively. The Company’s diluted earnings per share reflect the new capital structure as of its IPO.

“We continue to see the strength of our business model as we expand our base of enterprise and transactional clients and make selective acquisitions,” Zuccarini concluded. “Our proprietary technology and database, deep domain knowledge, and long standing supplier relationships create a differentiated solution that positions us as a long-term value-added partner for our clients in managing their print procurement needs.”

InnerWorkings Inc. Announces Third Quarter 2006 Results

Page 2 of 3

Conference Call

A conference call will be broadcast live on Wednesday, November 8, 2006, at 10:00 a.m. Central Time (11:00 a.m. Eastern). Interested parties are invited to listen to the live webcast by visiting the Investor section of InnerWorkings’ website at www.iwprint.com. A replay of the webcast will be available later that day in the same section of the website.

About InnerWorkings, Inc.

Chicago-based InnerWorkings, Inc. is a leading provider of print procurement solutions to corporate clients in the United States. InnerWorkings creates a competitive bid process to procure, purchase and deliver printed products as part of a comprehensive outsourced enterprise solution and in individual transactions. InnerWorkings procures printed products for clients across a wide range of industries, such as advertising, consumer products, publishing and retail. For more information on InnerWorkings, visit: www.iwprint.com.

Forward-Looking Statements

This release contains statements relating to projections or future results. These statements are forward-looking statements under the federal securities laws. We can give no assurance that any projections or 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 the prospectus we recently filed with the SEC.

FOR FURTHER INFORMATION:

InnerWorkings, Inc.

Mark Desky, 312-604-5470

mdesky@iwprint.com

Tables Follow

# # #

InnerWorkings Inc. Announces Third Quarter 2006 Results

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InnerWorkings, Inc.

Condensed Consolidated Statements of Operations

(Unaudited)

	Three months ended September 30,						Nine months ended September 30,
	2005			2006			2005			2006
Revenue	$	23,467,034		$	41,784,814		$	54,625,921		$	99,361,724
Cost of goods sold		18,669,715			32,239,588			43,359,033			78,227,822
Gross profit		4,797,319			9,545,226			11,266,888			21,133,902
Operating expenses:
Selling, general, and administrative expenses		3,096,873			5,665,111			7,711,180			12,770,496
Depreciation and amortization		105,190			240,123			255,547			574,016
Income from operations		1,595,256			3,639,992			3,300,161			7,789,390
Other income (expense):
Interest income		18,829			314,897			54,035			492,231
Interest expense		(7,678	)		(64,050	)		(72,188	)		(148,539	)
Minority interest		—			—			58,244			—
Other, net		(2,396	)		(2,394	)		(7,186	)		(4,784	)
Total other income (expense)		8,755			248,453			32,905			338,908
Income before taxes		1,604,011			3,888,445			3,333,066			8,128,298
Income tax expense		—			(1,521,225	)		—			(3,215,327	)
Net income		1,604,011			2,367,220			3,333,066			4,912,971
Dividends on preferred shares		(170,625	)		(293,740	)		(583,789	)		(1,408,740	)
Net income applicable to common shareholders	$	1,433,386		$	2,073,480		$	2,749,277		$	3,504,231
Basic earnings per share	$	0.04		$	0.06		$	0.09		$	0.13
Diluted earnings per share	$	0.04		$	0.05		$	0.09		$	0.13

InnerWorkings, Inc.

Condensed Consolidated Balance Sheets

	December 31, 2005			September 30, 2006
				(Unaudited)
Assets
Current assets:
Cash and cash equivalents	$	2,962,740		$	34,283,536
Marketable securities		—			9,969,356
Accounts receivable, net of allowance for doubtful accounts of $173,839 in 2005 and $285,302 in 2006		14,520,055			29,535,931
Unbilled revenue		1,974,920			6,530,966
Prepaid expenses		2,612,752			5,332,651
Advances to related parties		124,534			—
Deferred income taxes		—			729,709
Other current assets		1,486,407			824,359
Total current assets		23,681,408			87,206,508
Property and equipment, net		1,538,794			2,399,395
Intangibles and other assets:
Goodwill		352,954			5,128,981
Intangible assets, net of accumulated amortization of $236,711 in 2005 and $429,550 in 2006		930,774			3,443,935
Deposits		12,176			76,505
Investment		125,000			125,000
Deferred income taxes		—			5,699,740
Other assets		43,559			36,373
		1,464,463			14,510,534
Total assets	$	26,684,665		$	104,116,437
Liabilities and stockholders’ deficit/members’ equity
Current liabilities:
Accounts payable – trade	$	13,488,237		$	19,092,994
Due to seller		—			1,070,000
Distribution payable		2,987,000			—
Outstanding line of credit		2,923,511			—
Current maturities of capital lease obligations		109,185			74,094
Customer deposits		284,407			1,432,188
Other liabilities		51,697			41,504
Deferred revenue		—			489,247
Accrued expenses		297,310			3,144,563
Total current liabilities		20,141,347			25,344,590
Capital lease obligations, less current maturities		283,645			238,424
Commitments and contingencies		—			—
Total liabilities		20,424,992			25,583,014
Class D, convertible redeemable preferred shares, $3.125 par value, 1,600,000 shares authorized, 1,600,000 shares issued and outstanding in 2005; liquidation preference of $5,000,000		5,007,525			—
Stockholders’ deficit/members’ equity:
Class B, convertible preferred shares, $.80 par value, 937,500 shares authorized, 937,500 shares issued and outstanding in 2005; liquidation preference of $1,500,000		770,625			—
Class A, common shares, $0 par value, 60,000,000 shares authorized, 31,926,375 shares issued and outstanding in 2005		2,635,091			—
Common Stock, par value $0.00001 per share, no shares authorized, no shares issued and outstanding; 200,000,000 shares authorized, 44,014,319 shares issued and outstanding					115,344,105
Member receivable		(188,469	)		—
Additional paid-in capital		46,500			5,322,591
Treasury stock at cost		—			(40,000,000	)
Unrealized loss on marketable securities		—			(30,644	)
Retained earnings (deficit)		(2,011,599	)		(2,102,629	)
Total stockholders’ deficit/members’ equity		1,252,148			78,533,423
Total liabilities and stockholders’ deficit/members’ equity	$	26,684,665		$	104,116,437

InnerWorkings, Inc.

Condensed Consolidated Statements of Cash Flows

(Unaudited)

	Nine Months Ended September 30,
	2005			2006
Cash flows from operating activities
Net income	$	3,333,066		$	4,912,971
Adjustments to reconcile net income to net cash provided by (used in) operating activities:
Minority interest		(58,244	)		—
Deferred income taxes		—			174,629
Depreciation and amortization		255,547			575,531
Noncash stock compensation expense		87,500			311,230
Bad debt provision		27,939			111,463
Deferred financing expense		7,186			7,186
Change in assets:
Accounts receivable		(1,203,213	)		(10,711,332	)
Unbilled revenue		(1,270,838	)		(3,618,186	)
Prepaid expenses and other		(3,469,345	)		(316,651	)
Change in liabilities:
Accounts payable		4,855,418			557,487
Customer deposits		597,568			(3,175,288	)
Accrued expenses and other		42,893			3,252,725
Net cash provided by (used in) operating activities		3,205,477			(7,918,235	)
Cash flows from investing activities
Purchases of property and equipment		(706,964	)		(980,300	)
Purchase of marketable securities		(762,220	)		(10,000,000	)
Investment in Echo		(125,000	)		—
Purchase of Graphography		—			(2,975,929	)
Purchase of CoreVision		(37,500	)		(10,000	)
Net cash used in investing activities		(1,631,684	)		(13,966,229	)
Cash flows from financing activities
Net repayments of note payable, bank		(678,154	)		(4,796,414	)
Collection of member receivable		—			188,469
Principal payments on capital lease obligations		(40,079	)		(80,312	)
Tax benefit of stock options exercised		—			370,213
Advances to related parties		(188,038	)		124,534
Payments of distributions		(1,399,853	)		(3,107,634	)
Payment of dividends on preferred shares		(821,642	)		(1,646,136	)
Preference payments on preferred shares		—			(5,500,000	)
Issuance of shares		2,160,000			110,294,066
Payment of issuance costs		—			(2,641,526	)
Payments for share repurchase		—			(40,000,000	)
Net cash provided by (used in) financing activities		(967,766	)		53,205,260
Increase in cash and cash equivalents		606,027			31,320,796
Cash and cash equivalents, beginning of period		1,475,791			2,962,740
Cash and cash equivalents, end of period	$	2,081,818		$	34,283,536
Supplemental disclosure of cash flow information
Cash paid during the period for interest	$	55,435		$	86,125
Non-cash investing activity
Settlement of advances to related parties as part of Insight acquisition	$	313,438		$	—
Issuance of options in connection with Insight acquisition		46,500			—
Due to seller in connection with CoreVision acquisition					1,070,000
Non-cash financing activity
Unrealized loss on available for sale investments	$	—		$	30,644