InnerWorkings Announces First Quarter 2018 Results
CHICAGO--(BUSINESS WIRE)--Jul 31, 2018--InnerWorkings, Inc. (NASDAQ: INWK), the leading global marketing execution firm, today announced financial results for the three months ended March 31, 2018. For all non-GAAP references below, please refer to the non-GAAP reconciliation tables at the end of this release for more information.
“My first few months as CEO have confirmed to me that the market opportunity has never been better for InnerWorkings,” said Chief Executive Officer Rich Stoddart. “We continue to grow our gross and net revenue and win additional work, but our growth in operating expense is unacceptable in my view and we are taking the necessary actions to put us on a path to maximize shareholder value.”
Financial and Business HighlightsGross revenue was $274.5 million, an increase of 4% compared to $264.4 million in the first quarter of 2017. Gross profit (net revenue) was $66.1 million, or 24.1% of gross revenue in the first quarter of 2018, a 2% increase compared to $64.7 million, or 24.5% of revenue, in the same period of last year. Net loss for the first quarter of 2018 was $(1.7) million, or $(0.03) per diluted share, compared to net income of $5.7 million, or $0.10 per diluted share in the first quarter of 2017. Non-GAAP loss per diluted share for the first quarter was $(0.02), compared to earnings of $0.08 in the first quarter of 2017. Non-GAAP adjusted EBITDA was $7.4 million in the first quarter 2018, compared to $12.5 million in the first quarter of 2017. Cash flow provided by operating activities was $34.3 million in the first quarter of 2018, compared to $0.1 million in the same quarter of last year. Cash flow provided by operating activities for the trailing twelve months ended March 31, 2018 was a record $50.2 million. InnerWorkings has been awarded additional work from new and existing clients so far during 2018, which collectively is expected to exceed $70 million of annual revenue at full run-rate.
“Our first quarter financial results reflect initial investments we are making to drive operational improvements, but also the need for aggressive actions to lower our SG&A expenses,” said Chip Hodgkins, Interim Chief Financial Officer of InnerWorkings. “We are in the final stages of developing a plan and leveraging third-party expertise to reduce our cost structure while driving returns for our clients and our shareholders. We will provide further details in conjunction with our second quarter 2018 financial results.”
The Company is lowering its 2018 guidance for gross revenue to a range of $1.155 billion and $1.190 billion, down from previous guidance of $1.195 billion and $1.230 billion, representing growth of 1% to 4% compared to 2017. This decrease in guidance is mainly due to a significant reduction in marketing spend from one of the Company’s largest clients. Due to growth in SG&A expenses, 2018 profitability is expected to be lower than 2017. Following completion of a cost reduction and business improvement plan currently being developed, the Company expects to provide specific 2018 guidance for non-GAAP adjusted EBITDA and non-GAAP earnings per diluted share.
Rich Stoddart, Chief Executive Officer, and Chip Hodgkins, Interim Chief Financial Officer, will host a conference call to discuss the results today at 4:00 p.m. Central time (5:00 p.m. Eastern time).
The phone number to access the conference call is (877) 771-7024. A live audio webcast of the call will be available through InnerWorkings’ website at http://investor.inwk.com/events.cfm. A replay of the webcast will be available later today at the same location.
Non-GAAP Financial Measures
This press release includes the following financial measures defined as “non-GAAP financial measures” by the SEC: non-GAAP adjusted EBITDA and non-GAAP diluted earnings per share. The Company believes these measures provide useful information to investors because they provide further insights into the Company’s financial performance. These measures are also used by management in its financial and operational decision-making and evaluation of overall performance. The presentation of this financial information, which is not prepared under any comprehensive set of accounting rules or principles, is not intended to be considered in isolation or as a substitute for the financial information prepared and presented in accordance with generally accepted accounting principles. For a reconciliation of these non-GAAP financial measures to the nearest comparable GAAP measures, please see the reconciliation of non-GAAP adjusted EBITDA and non-GAAP diluted earnings per share included in this release.
This release contains statements relating to future results. These statements are forward-looking statements under the federal securities laws. We can give no assurance that any future results discussed in these statements will be achieved. Any forward-looking statements represent our views only as of today and should not be relied upon as representing our views as of any subsequent date. These statements are subject to a variety of risks and uncertainties that could cause our actual results to differ materially from the statements contained in this release. For a discussion of important factors that could affect our actual results, please refer to our SEC filings, including the “Risk Factors” section of our most recently filed Form 10-K.
InnerWorkings, Inc. (NASDAQ: INWK) is the leading global marketing execution firm serving Fortune 1000 brands across a wide range of industries. As a comprehensive outsourced enterprise solution, the Company leverages proprietary technology, an extensive supplier network and deep domain expertise to streamline the production of branded materials and retail experiences across geographies and formats. InnerWorkings is headquartered in Chicago, IL and employs 2,100 individuals to support global clients in the execution of multi-faceted brand campaigns in every major market around the world. InnerWorkings serves many industries, including: retail, financial services, hospitality, consumer packaged goods, nonprofit, healthcare, food & beverage, broadcasting & cable, automotive, and transportation. For more information visit: www.inwk.com.
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