InnerWorkings Announces Second Quarter 2014 Results
Achieves highest revenue in Company's history driven by 23% revenue growth; 62% Adjusted EBITDA growth
Highlights
-
Record revenue of
$260.3 million , an increase of 23% compared to$210.9 million in the second quarter of 2013. -
Non-GAAP Adjusted EBITDA of
$9.5 million , an increase of 62% compared to Non-GAAP Adjusted EBITDA of$5.9 million in the second quarter of 2013. Please refer to the non-GAAP reconciliation table below for more information. -
Non-GAAP diluted earnings per share of
$0.04 , compared to Non-GAAP diluted earnings per share of$0.02 in the second quarter of 2013. Please refer to the non-GAAP reconciliation table below for more information. -
Non-GAAP Adjusted Operating Cash Flow of
$6.4 million , an increase of 66% compared to Non-GAAP Adjusted Operating Cash Flow of$3.9 million in the second quarter of 2013. Please refer to the non-GAAP reconciliation table below for more information.
"Our core enterprise business fueled record revenue for us in the second
quarter. A large portion of this growth came from expanding our
relationships with several of our long-standing Fortune 500 customers,"
said
Additional financial and operational highlights include the following:
-
Organic enterprise account growth was
$27 million in the second quarter, a 13% increase over the prior-year period. -
The Company recently signed new enterprise agreements with Sanofi, a
global pharmaceutical firm;
Newsday , one of the largest newspaper publishers in the U.S.; andEdrington , the owner of leading spirits brands around the world. -
The
North America segment accounted for 70% of revenue and international segments accounted for 30%, compared to a 77% / 23% mix in the second quarter of 2013.
"Our international regions continue to generate strong organic growth,
which positions us well for improved EBITDA margin in the second half of
the year," said
| Revenue Growth - Comparing 2014 to 2013 | ||||||||
|
Q2 $(MM) |
Q2 % |
YTD $(MM) |
YTD% |
|||||
|
Change |
Change |
Change |
Change |
|||||
| Organic Enterprise Account Growth |
|
13% |
|
12% | ||||
| Loss of Spend from Large Customer 1 |
|
0% |
( |
(2)% | ||||
| Acquisitive Growth |
|
10% |
|
11% | ||||
| Total Revenue Growth |
|
23% |
|
21% | ||||
|
1 Includes loss of spending from large retail
customer previously announced in |
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Outlook
The Company reaffirms its 2014 revenue guidance of
Conference Call
The management team will host a conference call to discuss the Company's
second quarter 2014 results, which will be broadcast live on
To access the conference call by telephone, interested parties may dial
(877) 771-7024. Interested parties are also invited to listen to the
live webcast by visiting the Investor "Events & Presentations" section
of
Non-GAAP Financial Measures
This press release includes the following financial measures defined as
"non-GAAP financial measures" by the
Forward-Looking Statements
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
About
| Condensed Consolidated Statements of Income (Unaudited) | |||||||||||||||||||
|
Three Months Ended |
Six Months Ended |
||||||||||||||||||
| 2013 | 2014 | 2013 | 2014 | ||||||||||||||||
| Revenue | $ | 210,875,626 | $ | 260,349,591 | $ | 415,453,042 | $ | 501,839,255 | |||||||||||
| Cost of goods sold | 162,699,024 | 201,422,560 | 320,926,639 | 388,327,830 | |||||||||||||||
| Gross profit | 48,176,602 | 58,927,031 | 94,526,403 | 113,511,425 | |||||||||||||||
| Operating expenses: | |||||||||||||||||||
| Selling, general and administrative expenses | 41,347,183 | 50,634,671 | 88,458,800 | 100,206,152 | |||||||||||||||
| Depreciation and amortization | 2,648,396 | 4,373,798 | 5,114,063 | 8,544,514 | |||||||||||||||
| Change in fair value of contingent consideration | (1,649,389 | ) | 521,669 | (1,040,557 | ) | (173,508 | ) | ||||||||||||
| Income from operations | 5,830,412 | 3,396,893 | 1,994,097 | 4,934,267 | |||||||||||||||
| Total other expense | (488,760 | ) | (1,058,167 | ) | (1,412,696 | ) | (2,173,840 | ) | |||||||||||
| Income before income taxes | 5,341,652 | 2,338,726 | 581,401 | 2,760,427 | |||||||||||||||
| Income tax expense (benefit) | 1,666,131 | 733,354 | (292,846 | ) | 865,648 | ||||||||||||||
| Net income | $ | 3,675,521 | $ | 1,605,372 | $ | 874,247 | $ | 1,894,779 | |||||||||||
| Basic earnings per share | $ | 0.07 | $ | 0.03 | $ | 0.02 | $ | 0.04 | |||||||||||
| Diluted earnings per share | $ | 0.07 | $ | 0.03 | $ | 0.02 | $ | 0.04 | |||||||||||
| Weighted average shares outstanding, basic | 50,728,372 | 51,543,799 | 50,554,642 | 51,444,535 | |||||||||||||||
| Weighted average shares outstanding, diluted | 51,965,539 | 53,199,279 | 52,046,000 | 52,766,406 | |||||||||||||||
| Condensed Consolidated Balance Sheets | ||||||||
|
|
|
|||||||
| 2013 | 2014 | |||||||
| (unaudited) | ||||||||
| Cash and cash equivalents | $ | 18,606,030 | $ | 23,364,199 | ||||
| Accounts receivable, net of allowance for doubtful accounts | 171,832,907 | 186,722,463 | ||||||
| Unbilled revenue | 27,483,544 | 31,457,926 | ||||||
| Inventories | 26,473,732 | 26,762,086 | ||||||
| Prepaid expenses | 11,746,965 | 11,532,751 | ||||||
| Other current assets | 23,528,025 | 31,604,673 | ||||||
| Total long-term assets | 334,995,575 | 337,145,506 | ||||||
| Total assets | $ | 614,666,778 | $ | 648,589,604 | ||||
| Accounts payable-trade | $ | 169,243,349 | $ | 173,413,169 | ||||
| Other current liabilities | 49,655,185 | 72,258,306 | ||||||
| Revolving credit facility | 69,000,000 | 89,000,000 | ||||||
| Other long-term liabilities | 81,326,670 | 61,433,950 | ||||||
| Total stockholders' equity | 245,441,574 | 252,484,179 | ||||||
| Total liabilities and stockholders' equity | $ | 614,666,778 | $ | 648,589,604 | ||||
|
|
||||||||||
|
Six Months Ended |
||||||||||
| 2013 | 2014 | |||||||||
| Net cash provided by (used in) operating activities | $ | 2,910,004 | $ | (4,188,086 | ) | |||||
| Net cash used in investing activities | (17,381,833 | ) | (8,429,758 | ) | ||||||
| Net cash provided by financing activities | 11,507,540 | 17,309,399 | ||||||||
| Effect of exchange rate changes on cash and cash equivalents | (90,254 | ) | 66,614 | |||||||
| Increase (decrease) in cash and cash equivalents | (3,054,543 | ) | 4,758,169 | |||||||
| Cash and cash equivalents, beginning of period | 17,218,899 | 18,606,030 | ||||||||
| Cash and cash equivalents, end of period | $ | 14,164,356 | $ | 23,364,199 | ||||||
| Reconciliation of Non-GAAP Adjusted EBITDA, Non-GAAP Adjusted Operating Cash Flows, Non-GAAP Diluted EPS and Non-GAAP Adjusted SG&A | |||||||||||||||||
|
Three Months Ended |
Six Months Ended |
||||||||||||||||
| 2013 | 2014 | 2013 | 2014 | ||||||||||||||
| Operating income | $ | 5,830,412 | $ | 3,396,893 | $ | 1,994,097 | $ | 4,934,267 | |||||||||
| Depreciation and amortization | 2,648,396 | 4,373,798 | 5,114,063 | 8,544,514 | |||||||||||||
| Stock-based compensation expense | 1,080,913 | 1,252,457 | 2,054,106 | 2,648,731 | |||||||||||||
| Change in fair value of contingent consideration | (1,649,389 | ) | 521,669 | (1,040,557 | ) | (173,508 | ) | ||||||||||
| Payments to former owner of Productions Graphics, net of cash recovered | (2,521,635 | ) | - | 3,787,025 | - | ||||||||||||
| Legal fees in connection with patent infringement defense | 506,880 | - | 752,220 | - | |||||||||||||
| Restatement-related professional fees | - | - | - | 2,093,104 | |||||||||||||
| Non-GAAP Adjusted EBITDA | $ | 5,895,577 | $ | 9,544,817 | $ | 12,660,954 | $ | 18,047,108 | |||||||||
|
Three Months Ended |
Six Months Ended |
||||||||||||||||
| 2013 | 2014 | 2013 | 2014 | ||||||||||||||
| Net cash provided by (used in) operating activities | $ | 3,752,643 | $ | 4,220,257 | $ | 2,910,004 | $ | (4,188,086 | ) | ||||||||
| Excess tax benefit from exercise of stock awards * | 115,291 | - | 1,066,357 | - | |||||||||||||
| Cash paid for settlement for preference claim | - | - | 900,000 | - | |||||||||||||
| Net short-term advances on International receivables ** | - | 2,195,909 | - | 2,195,909 | |||||||||||||
| Non-GAAP Adjusted Operating Cash Flows | $ | 3,867,934 | $ | 6,416,166 | $ | 4,876,361 | $ | (1,992,177 | ) | ||||||||
| * Represents a U.S. tax deduction in an amount equal to the excess of the market price of the stock on the date of exercise over exercise price. | |||||||||||||||||
| ** US GAAP requires classification in financing activities despite inclusion in working capital on the balance sheet. | |||||||||||||||||
|
Three Months Ended |
Six Months Ended |
||||||||||||||||
| 2013 | 2014 | 2013 | 2014 | ||||||||||||||
| Net income | $ | 3,675,521 | $ | 1,605,372 | $ | 874,247 | $ | 1,894,779 | |||||||||
| Change in fair value of contingent consideration, net of tax | (1,202,166 | ) | 593,216 | (557,146 | ) | 56,419 | |||||||||||
| Payments to former owner of Productions Graphics, net of cash recovered, net of tax | (1,746,673 | ) | - | 2,422,383 | - | ||||||||||||
| Legal fees in connection with patent infringement defense, net of tax | 329,573 | - | 489,093 | - | |||||||||||||
| Restatement-related professional fees, net of tax | - | - | - | 1,266,328 | |||||||||||||
| Adjusted net income | $ | 1,056,255 | $ | 2,198,588 | $ | 3,228,577 | $ | 3,217,526 | |||||||||
| Weighted average shares outstanding, diluted | 51,965,539 | 53,199,279 | 52,046,000 | 52,766,406 | |||||||||||||
| Non-GAAP Diluted EPS | $ | 0.02 | $ | 0.04 | $ | 0.06 | $ | 0.06 | |||||||||
|
Three Months Ended |
Six Months Ended |
||||||||||||||||
| 2013 | 2014 | 2013 | 2014 | ||||||||||||||
| Selling, general and administrative expenses | $ | 41,347,183 | $ | 50,634,671 | $ | 88,458,800 | $ | 100,206,152 | |||||||||
| Restatement-related professional fees | - | - | - | (2,093,104 | ) | ||||||||||||
| Legal fees in connection with patent infringement defense | (506,880 | ) | - | (752,220 | ) | - | |||||||||||
| Payments to former owner of Productions Graphics, net of cash recovered | 2,521,635 | - | (3,787,025 | ) | - | ||||||||||||
| Non-GAAP Adjusted SG&A | $ | 43,361,938 | $ | 50,634,671 | $ | 83,919,555 | $ | 98,113,048 | |||||||||
bmoore@inwk.com
Source:
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