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InnerWorkings Announces 45% increase in Net Income

Friday, May 09, 2008

Press release from the issuing company

CHICAGO, May 08, 2008 -- InnerWorkings, Inc., a leading provider of managed print and promotional solutions to corporate clients in the United States, today reported results for the three months ended March 31, 2008.

Quarterly Highlights:

-- Revenue grew 48 percent versus the first quarter of 2007 to $87.2 million.

-- Operating leverage continued to improve as operating income rose 53 percent to $5.8 million.

-- Net income increased 45 percent to $3.9 million, up from $2.7 million in the first quarter of 2007.

-- Year-over-year enterprise revenue increased 58 percent to $55.6 million.

-- During the quarter the Company added five new enterprise clients.

-- The Company increased its sales force through the addition of 15 new account executives during the quarter, increasing the total to 232.

-- Diluted earnings per share were $0.08, up from $0.05 in the first quarter of 2007.

Revenue for the Company's first quarter was $87.2 million, an increase of 48 percent compared to revenue of $58.9 million in the first quarter of 2007. Operating income was $5.8 million, an increase of 53 percent from $3.8 million during the same quarter of 2007.

For the three months ended March 31, 2008, net income was $3.9 million, an increase of 45 percent from $2.7 million during the first quarter of 2007. For the quarter, diluted earnings per share were $0.08.

"Our continued focus on growth and execution generated outstanding results, particularly given that the first quarter is seasonally not our strongest," stated Steve Zuccarini, Chief Executive Officer of InnerWorkings. "Further, we are encouraged by the increasingly broad-based acceptance of InnerWorkings' business model and the acceleration of the market's recognition of our print management solution. This recognition continues to drive the expansion of our client relationships and our record recruiting results."

Additional first quarter 2008 financial and operational highlights include the following:

-- For the first quarter of 2008, 64 percent of the Company's revenue was generated from sales to enterprise clients, with the remaining 36 percent derived from transactional clients.

-- Stock-based compensation increased from $260,000 in the first quarter of 2007 to $575,000 in the first quarter of 2008; excluding stock-based compensation from first quarter 2007 and first quarter 2008, operating income as a percentage of revenue increased from 6.9 percent to 7.3 percent, continuing to demonstrate improved operating leverage.

-- The Company generated cash flow from operations of $1.8 million.

-- As of March 31, 2008, the Company had a cash and marketable securities balance of $44.6 million.

-- The Company's balance sheet contained no debt as of March 31, 2008.

"InnerWorkings is in a strong financial position. In addition to our separately announced share repurchase program, we continue to evaluate other alternatives to deploy our cash in support of our strategic initiatives and for the benefit of our shareholders," stated Nick Galassi, Chief Financial Officer of InnerWorkings. "Moreover, if you exclude the effect of stock-based compensation, the significant operating leverage improvement demonstrates our ability to invest in the business while continuing to operate more efficiently."




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