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InnerWorkings Announces Fourth Quarter and Full-Year 2015 Results

Friday, February 19, 2016

Press release from the issuing company

Fourth quarter revenue grew 15% in constant currency; full year operating cash flow was a record $43.4 million

CHICAGO - InnerWorkings, Inc. (NASDAQ: INWK), the leading global marketing execution firm, today announced financial results for the year ended December 31, 2015. For all Non-GAAP references below, please refer to the non-GAAP reconciliation tables at the end of this release for more information.

"2015 marked the best year in our company's history in terms of both profitability and new client wins," said Eric D. Belcher, Chief Executive Officer of InnerWorkings. "Our technology, reputation, and global platform distinguish us as the premier provider to execute marketing campaigns for the world's most successful companies."

Fourth Quarter 2015 Highlights

  • Four new enterprise contracts signed, including a large comprehensive agreement with global premium spirits company Beam Suntory.
  • Revenue was $270.3 million as reported and $283.8 million in constant currency, reflecting 15.1% growth in constant currency compared with $246.6 million in the fourth quarter of 2014.
  • Net cash provided by operating activities was $50.7 million, compared to $3.5 million in the fourth quarter of 2014.
  • Non-GAAP diluted earnings per share were $0.08 as reported and $0.09 in constant currency. GAAP net loss per share was $0.75 and GAAP net loss was $39.9 million, mainly due to a noncash goodwill impairment charge and other realignment-related items totaling $46.0 million.
  • Non-GAAP adjusted EBITDA was $14.7 million as reported and $15.4 million in constant currency, reflecting 22.8% growth in constant currency as compared to $12.5 million in the fourth quarter of 2014.

Full-Year 2015 Highlights

  • Record new enterprise contracts signed totaling $135 million in annual revenue at full run-rate.
  • Revenue was $1.03 billion as reported and $1.09 billion in constant currency, reflecting 9.3% growth in constant currency compared with $1.00 billion in 2014.
  • Net cash provided by operating activities was $43.4 million, compared to net cash used for operating activities of $12.5 million in 2014.
  • Non-GAAP diluted earnings per share were $0.25 as reported and $0.31 in constant currency. GAAP net loss per share was $0.61 and GAAP net loss was $32.3 million, mainly due to a noncash goodwill impairment charge and other realignment-related items totaling $46.0 million.
  • Non-GAAP adjusted EBITDA was $51.9 million as reported and $55.7 million in constant currency, reflecting 30.0% growth in constant currency as compared to $42.8 million in 2014.
  • The Company's innovative technology became even more integral to the suite of services, with an average of 50,000 marketing professionals and suppliers logging in daily during 2015.

"We exceeded our adjusted EBITDA guidance for 2015 and ended the year on a very strong note," said Jeffrey P. Pritchett, Chief Financial Officer of InnerWorkings. "I am confident we can continue to improve our returns on invested capital through cost discipline and operating leverage as we onboard a growing list of enterprise clients in 2016 and beyond."

Financial Results

Fourth quarter non-GAAP diluted earnings per share were $0.08 and GAAP net loss per share was $0.75. The largest component of the difference between the GAAP and non-GAAP earnings per share was a noncash goodwill impairment charge in the amount of $37.5 million, or $0.70 per share, related to the historical performance and future expectations for a portion of the Company's international operations. The global realignment strategy announced in December 2015 will drive stronger integration of the Company's global platform to more efficiently meet client needs while improving financial results, with at least $3.0 million in profit improvement expected to be realized during 2016.

Outlook

The Company expects 2016 annual revenue to range between $1.06 billion and $1.08 billion, representing growth of 3% to 5% compared to 2015 (6% to 8% compared to 2015 on a constant currency basis and excluding two operations we are exiting, one in Venezuela and another in a small European market). Non-GAAP adjusted EBITDA is expected to be between $58.0 million and $62.0 million in 2016, representing growth of 12% to 19% compared to 2015 on a reported basis and 16% to 24% growth on a constant currency basis. The Company forecasts non-GAAP diluted earnings per share to be $0.30 to $0.33, representing growth of 20% to 32% compared to 2015 on a reported basis and 30% to 43% on a constant currency basis.

Full Release

 

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