Delaware (State or other jurisdiction of incorporation) | 000-52170 (Commission File Number) | 20-5997364 (I.R.S. Employer Identification No.) |
600 West Chicago Avenue Suite 850 Chicago, Illinois | 60,654 | |
(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) |
Item 2.02 | Results of Operations and Financial Condition.* |
Item 9.01 | Financial Statements and Exhibits. |
(d) | Exhibits: |
Exhibit No. | Description | ||
99.1* | Press Release dated May 8, 2017. |
INNERWORKINGS, INC. | |||
Dated: May 8, 2017 | By: | /s/ Jeffrey P. Pritchett | |
Name: | Jeffrey P. Pritchett | ||
Title: | Executive Vice President & Chief Financial Officer | ||
Exhibit No. | Description | |
99.1* | Press Release dated May 8, 2017. |
• | Gross revenue was $267.4 million, a decrease of 1% compared to $271.1 million in the first quarter of 2016. |
• | Gross profit (net revenue) was $64.3 million, or 24.0% of gross revenue in the first quarter of 2017, a 4% increase compared to $61.9 million, or 22.9% of revenue, in the same period of last year. |
• | Net income for the first quarter of 2017 was $5.5 million, or $0.10 per diluted share, which included $1.0 million of income related to the decreased value of contingent consideration for prior acquisitions. |
• | Non-GAAP diluted earnings per share for the first quarter was $0.08, a 66% increase compared to the first quarter of 2016. |
• | Non-GAAP adjusted EBITDA was $12.3 million, reflecting 5% growth as compared to $11.7 million in the first quarter of 2016. |
• | Cash flow provided by operating activities was $35.2 million for the trailing twelve-month period ended March 31, 2017 and $25.1 million for the prior trailing twelve-month period ended March 31, 2016. |
• | InnerWorkings has been awarded additional work from new and existing clients so far during 2017, which collectively is expected to exceed $35 million of annual revenue at full run-rate. The largest new client engagements are with Jaguar Land Rover and The Humane Society. |
(in thousands, except per share amounts) | Three Months Ended March 31, | ||||||
2017 | 2016 | ||||||
Revenue | $ | 267,390 | $ | 271,073 | |||
Cost of goods sold | 203,113 | 209,127 | |||||
Gross profit | 64,277 | 61,946 | |||||
Operating expenses: | |||||||
Selling, general and administrative expenses | 53,427 | 51,492 | |||||
Depreciation and amortization | 2,904 | 4,596 | |||||
Change in fair value of contingent consideration | (1,040 | ) | 1,911 | ||||
Restructuring and other charges | — | 3,344 | |||||
Income from operations | 8,986 | 603 | |||||
Other income (expense): | |||||||
Interest income | 34 | 14 | |||||
Interest expense | (1,003 | ) | (1,077 | ) | |||
Other, net | (224 | ) | (161 | ) | |||
Total other expense | (1,193 | ) | (1,224 | ) | |||
Income (loss) before income taxes | 7,793 | (621 | ) | ||||
Income tax expense | 2,337 | 2,072 | |||||
Net income (loss) | $ | 5,456 | $ | (2,693 | ) | ||
Basic earnings (loss) per share | $ | 0.10 | $ | (0.05 | ) | ||
Diluted earnings (loss) per share | $ | 0.10 | $ | (0.05 | ) | ||
Weighted-average shares outstanding – basic | 54,056 | 53,145 | |||||
Weighted-average shares outstanding – diluted | 54,729 | 53,145 |
(in thousands) | March 31, 2017 | December 31, 2016 | |||||
(unaudited) | |||||||
Assets | |||||||
Current assets: | |||||||
Cash and cash equivalents | $ | 29,920 | $ | 30,924 | |||
Accounts receivable, net of allowance for doubtful accounts of $2,504 and $2,622, respectively | 187,028 | 182,874 | |||||
Unbilled revenue | 35,712 | 32,723 | |||||
Inventories | 30,338 | 31,638 | |||||
Prepaid expenses | 23,912 | 18,772 | |||||
Other current assets | 20,598 | 24,769 | |||||
Total current assets | 327,508 | 321,700 | |||||
Property and equipment, net | 34,000 | 32,656 | |||||
Intangibles and other assets: | |||||||
Goodwill | 203,269 | 202,700 | |||||
Intangible assets, net | 30,452 | 31,538 | |||||
Deferred income taxes | 1,440 | 1,031 | |||||
Other non-current assets | 1,353 | 1,374 | |||||
Total intangibles and other assets | 236,514 | 236,643 | |||||
Total assets | $ | 598,022 | $ | 590,999 | |||
Liabilities and stockholders' equity | |||||||
Current liabilities: | |||||||
Accounts payable | $ | 114,399 | $ | 121,289 | |||
Current portion of contingent consideration | 17,165 | 19,283 | |||||
Due to seller | 1,093 | — | |||||
Accrued expenses | 32,547 | 30,067 | |||||
Other current liabilities | 37,636 | 35,049 | |||||
Total current liabilities | 202,840 | 205,688 | |||||
Revolving credit facility | 113,691 | 107,468 | |||||
Deferred income taxes | 9,848 | 11,291 | |||||
Other non-current liabilities | 2,060 | 1,926 | |||||
Total liabilities | 328,439 | 326,373 | |||||
Commitments and contingencies | |||||||
Stockholders' equity: | |||||||
Common stock, par value $0.0001 per share, 200,000 and 200,000 shares authorized, 63,438 and 63,391 shares issued, and 53,565 and 54,088 shares outstanding, respectively | 6 | 6 | |||||
Additional paid-in capital | 228,106 | 224,480 | |||||
Treasury stock at cost, 9,872 and 9,303 shares, respectively | (54,949 | ) | (49,458 | ) | |||
Accumulated other comprehensive loss | (18,820 | ) | (20,799 | ) | |||
Retained earnings | 115,240 | 110,397 | |||||
Total stockholders' equity | 269,583 | 264,626 | |||||
Total liabilities and stockholders' equity | $ | 598,022 | $ | 590,999 |
(in thousands) | Three Months Ended March 31, | ||||||
2017 | 2016 | ||||||
Cash flows from operating activities | |||||||
Net income (loss) | $ | 5,456 | $ | (2,693 | ) | ||
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities: | |||||||
Depreciation and amortization | 2,904 | 4,596 | |||||
Stock-based compensation expense | 1,419 | 1,241 | |||||
Deferred income taxes | (16 | ) | (389 | ) | |||
Bad debt provision | 175 | 656 | |||||
Change in fair value of contingent consideration | (1,040 | ) | 1,911 | ||||
Other operating activities | 52 | 52 | |||||
Change in assets: | |||||||
Accounts receivable and unbilled revenue | (7,318 | ) | (16,256 | ) | |||
Inventories | 1,300 | (1,388 | ) | ||||
Prepaid expenses and other assets | (979 | ) | 16,382 | ||||
Change in liabilities: | |||||||
Accounts payable | (6,890 | ) | (40,196 | ) | |||
Accrued expenses and other liabilities | 5,057 | 11,518 | |||||
Net cash provided by (used in) operating activities | 120 | (24,566 | ) | ||||
Cash flows from investing activities | |||||||
Purchases of property and equipment | (3,042 | ) | (3,987 | ) | |||
Net cash used in investing activities | (3,042 | ) | (3,987 | ) | |||
Cash flows from financing activities | |||||||
Net borrowings from revolving credit facilities | 6,519 | 19,358 | |||||
Net short-term secured borrowings | (801 | ) | (1,803 | ) | |||
Repurchases of common stock | (4,342 | ) | — | ||||
Payments of contingent consideration | — | (525 | ) | ||||
Proceeds from exercise of stock options | 189 | 984 | |||||
Other financing activities | (95 | ) | 382 | ||||
Net cash provided by financing activities | 1,470 | 18,396 | |||||
Effect of exchange rate changes on cash and cash equivalents | 448 | 331 | |||||
Decrease in cash and cash equivalents | (1,004 | ) | (9,826 | ) | |||
Cash and cash equivalents, beginning of period | 30,924 | 30,755 | |||||
Cash and cash equivalents, end of period | $ | 29,920 | $ | 20,929 |
(in thousands) | Three Months Ended March 31, | ||||||
2017 | 2016 | ||||||
Net income (loss) | $ | 5,456 | $ | (2,693 | ) | ||
Income tax expense | 2,337 | 2,072 | |||||
Interest income | (34 | ) | (14 | ) | |||
Interest expense | 1,003 | 1,077 | |||||
Other, net | 224 | 161 | |||||
Depreciation and amortization | 2,904 | 4,596 | |||||
Stock-based compensation expense | 1,419 | 1,241 | |||||
Change in fair value of contingent consideration | (1,040 | ) | 1,911 | ||||
Restructuring and other charges | — | 3,344 | |||||
Non-GAAP Adjusted EBITDA | $ | 12,269 | $ | 11,695 |
(in thousands, except per share amounts) | Three Months Ended March 31, | ||||||
2017 | 2016 | ||||||
Net income (loss) | $ | 5,456 | $ | (2,693 | ) | ||
Change in fair value of contingent consideration | (1,040 | ) | 1,911 | ||||
Restructuring and other charges, net of tax | — | 2,964 | |||||
Restatement-related professional fees, net of tax | — | 397 | |||||
Adjusted net income | $ | 4,416 | $ | 2,579 | |||
Weighted-average shares outstanding, diluted | 54,729 | 54,688 | |||||
Non-GAAP Diluted Earnings Per Share | $ | 0.08 | $ | 0.05 |