InnerWorkings Announces Record Q4 Results
Friday, February 22, 2008
Press release from the issuing companyCHICAGO--Feb. 21, 2008 - InnerWorkings, Inc., a leading provider of managed print and promotional solutions to corporate clients in the United States, today reported record fourth quarter and fiscal year results for the period ended December 31, 2007.
-- Revenue increased 47 percent versus the fourth quarter of 2006 to a record $90.0 million.
-- Operating leverage continued to improve as operating income rose 58 percent to $8.0 million.
-- Net income was $12.0 million, or $0.24 per diluted share.
-- Net income, excluding the one-time benefit for the reduction in a tax valuation allowance, was $5.4 million, or $0.11 per diluted share, increased 60 percent compared with the same time period last year.
Fiscal Year Highlights:
-- Revenue increased 80 percent over fiscal 2006 to $288.4 million.
-- Operating income increased over 80 percent from the prior year to $23.2 million.
-- Net income was $22.5 million, or $0.45 per diluted share.
-- Net income, excluding the one-time benefit for the reduction in a tax valuation allowance, totaled $15.9 million, or $0.32 per diluted share, increased 92 percent compared to 2006.
-- The number of enterprise clients rose from 92 to 116 during the year.
-- The number of account executives increased from 153 to 221 during the year.
Revenue for the Company's fourth quarter was $90.0 million, an increase of 47 percent compared to $61.2 million in the fourth quarter of 2006. Operating income was $8.0 million, an increase of 58 percent from $5.1 million during the same quarter of 2006. GAAP net income for the quarter was $12.0 million, or $0.24 per diluted share.
Fourth quarter results include the reduction of a $6.6 million valuation allowance which was related to the deferred tax asset of $12 million created as part of our January 2006 share repurchase. Net income excluding this reduction in the allowance was $5.4 million during the period and diluted earnings per share was $0.11. This compares favorably to the fourth quarter of 2006, in which net income was $3.4 million and diluted earnings per share were $0.07.
In fiscal 2007, the Company achieved revenue of $288.4 million, an increase of 80 percent compared to revenue of $160.5 million in 2006. Operating income for the full year 2007 was $23.2 million, an increase of over 80 percent from $12.8 million during the full year 2006.
Full year GAAP net income was $22.5 million, or $0.45 per diluted share. Excluding the reduction in the tax valuation allowance recorded in the fourth quarter, full year 2007 results included net income of $15.9 million and diluted earnings per share was $0.32 in 2007. This again compares favorably to 2006's net income of $8.3 million and diluted earnings per share of $0.21.
"Fiscal 2007 was a year of exceptional performance for InnerWorkings and I couldn't be more pleased with the contributions made by all of our employees," stated Steve Zuccarini, Chief Executive Officer of InnerWorkings. "Our emphasis on expanding enterprise relationships continues to position InnerWorkings as a key partner with our clients and provides consistent and recurring financial results for our shareholders. We expect to build on our aggressive growth strategy and steady financial performance in 2008."
Additional fourth quarter 2007 financial and operational highlights include the following:
-- During the fourth quarter, InnerWorkings made three acquisitions. The largest of these was Corporate Edge, Inc., which reinforces the Company's deepening domain expertise in premium products and advertising specialties and provides access to more than 20 Fortune 500 clients.
-- For the fourth quarter of 2007, 61 percent of the Company's revenue was generated from sales to enterprise clients, with the remaining 39 percent derived from transactional clients.
-- During the quarter the Company generated cash flow from operations of $1.2 million.
-- The Company's balance sheet contained no debt as of December 31, 2007.
"We were very active in fiscal 2007 in the deployment of capital across multiple growth fronts with our goal of enhancing shareholder value," stated Nick Galassi, Chief Financial Officer of InnerWorkings. "Given the significant size of our market opportunity and our low market penetration, we will continue to make the investments necessary to support our aggressive growth expectations. However, we will continue to do so prudently and remain committed to increasing our operating leverage and thus expect to grow our operating earnings at rates that exceed our top-line growth in 2008."
Zuccarini concluded, "We expect demand for InnerWorkings' services to remain robust because we help corporations save money in a significant category of indirect spend. Our pipeline has never been stronger and our high-service, low-cost business model continues to resonate extremely well in this uncertain economic climate. We remain firmly committed to executing our business strategies and accomplishing our goals, which include 2008 revenue guidance in a range of $450 million to $490 million and 2008 diluted earnings per share guidance in a range of $0.50 to $0.54."
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