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InnerWorkings Announces Second Quarter 2016 Results

Tuesday, August 16, 2016

Press release from the issuing company

Record second quarter gross profit increased 10%; expanded scope with several existing clients

CHICAGO - InnerWorkings, Inc. (NASDAQ: INWK), the leading global marketing execution firm, today announced financial results for the three months ended June 30, 2016. For all Non-GAAP references below, please refer to the non-GAAP reconciliation tables at the end of this release for more information.

Financial Highlights

  • Gross revenue was $269.2 million in the second quarter, an increase of 6.7% compared with $252.2 million in the second quarter of 2015. Year-to-date gross revenue was $540.3 million, a 9.3% increase compared with $494.3 million in the prior period.
  • Gross profit (net revenue) was $65.1 million, or 24.2% of gross revenue in the second quarter, a 10.4% increase compared to $59.0 million, or 23.4% of gross revenue, in the same period of last year. Year-to-date gross profit (net revenue) was $127.0 million, or 23.5% of gross revenue, an increase of 11.4% compared to the prior-year period.
  • Diluted net loss per share was $0.04 and diluted net loss was $2.3 million in the second quarter, mainly due to a $7.3 million increase in our earnout obligation due to the strong performance of our previously-acquired businesses. Year-to-date net loss per share was $0.09 and net loss was $5.0 million, primarily due to a $9.2 million increase in our earnout obligation and a $3.6 million after-tax charge related to the global realignment strategy.
  • Non-GAAP diluted earnings per share were $0.11 in the second quarter, an increase of 37.5% compared to $0.08 in the second quarter of 2015. Year-to-date non-GAAP diluted earnings per share were $0.15, an increase of 66.7% compared to $0.09 in the same period of 2015.
  • Non-GAAP adjusted EBITDA was $14.8 million, reflecting 10.3% growth as compared to $13.4 million in the second quarter of 2015. Year-to-date non-GAAP adjusted EBITDA was $26.5 million, an increase of 22.5% compared to $21.6 million in the same period of 2015.

Business Highlights

  • InnerWorkings has continued to sign new enterprise contracts in recent months, bringing the year-to-date collective total to more than $60 millionof annual gross revenue at full run-rate, with nearly half stemming from expanded relationships with active clients.
  • The largest of the new contracts is an expansion of the Company's long-term business relationship with a large food and beverage company, sourcing events and promotions, as well as providing all branded merchandise and printed materials in an additional 16 countries throughout Latin America.
  • The Company hired a team of executives in Japan during August to initiate its business plan to reach new customers and begin supporting existing clients in the Japanese market, similar to previous successful launches the Company has executed in other international markets.

"We continue to win more business with new and existing clients on the strength of our global capabilities and our technology," said Eric D. Belcher, Chief Executive Officer of InnerWorkings. "The expansion of our work with the large food and beverage company demonstrates our commitment to serve as an extension of our clients' brands, executing comprehensive marketing campaigns all around the world."

"Our second quarter financial results reflect continued strong execution of our strategy," said Jeffrey P. Pritchett, Chief Financial Officer of InnerWorkings. "We are on track to achieve our financial targets for 2016 with additional profit improvement in the second half of the year, particularly in our International segment where the combination of a more efficient hub structure and strong organic growth is starting to create meaningful operating leverage."

Outlook

The Company's guidance for 2016 remains unchanged. InnerWorkings expects 2016 annual revenue to range between $1.06 billion and $1.08 billion, non-GAAP adjusted EBITDA to be between $58.0 million and $62.0 million, and non-GAAP diluted earnings per share to be $0.30 to $0.33.

 

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