InnerWorkings Announces Second Quarter 2018 Results
InnerWorkings, Inc., Chicago, recently announced financial results for the three and six months ended June 30, 2018.
“One of the best indicators of a company's strength is its ability to grow within its existing clients," said CEO Rich Stoddart. We have been awarded additional work with two existing accounts in just the last two weeks, and our pipeline is full of opportunities to further penetrate our customer base. With the momentum of our new wins and a robust plan to improve our cost structure, InnerWorkings is poised to deliver significant value for our shareholders.”
Financial and Business Highlights
Gross revenue was $282.0 million in the second quarter of 2018, an increase of 1 percent compared to $280.1 million in the second quarter of 2017. Excluding currency impacts, second quarter gross revenue increased 4 percent compared to the same period of last year.
Gross profit (net revenue) was $64.9 million, or 23.0 percent of gross revenue in the second quarter of 2018, compared to $70.0 million, or 25.0 percent of revenue, in the same period of last year.
Net loss for the second quarter of 2018 was $(0.3) million, or $(0.01) per diluted share, compared to net income of $4.4 million, or $0.08 per diluted share in the second quarter of 2017.
Non-GAAP earnings per diluted share for the second quarter of 2018 was $0.01, compared to $0.12 in the second quarter of 2017.
Non-GAAP adjusted EBITDA was $8.2 million in the second quarter of 2018, compared to $16.5 million in the second quarter of 2017.
InnerWorkings has been awarded additional work from new and existing clients so far during 2018, which collectively is expected to drive $85 million of annual revenue at full run-rate. Recent new wins include two expansions with global Fortune 500 companies in the healthcare and food verticals.
Cost Reduction Plan
InnerWorkings has implemented an aggressive cost reduction plan which is expected to enable the company to reduce selling, general and administrative expenses in 2019 to be in line with 2017 expenses. The company expects to reduce annualized G&A expenses by $20 million over the next few quarters, with reductions made across the business to optimize staffing levels, realign underperforming operations, and better leverage talent across accounts.
“We have already initiated cost reduction measures with approximately 50 percent of the plan to be actioned by October 1st,” said Chip Hodgkins, interim CFO of InnerWorkings. “If in 2019 we achieve a similar gross revenue growth rate and gross margin as compared to this year, these cost reductions are expected to enable 2019 non-GAAP adjusted EBITDA of $65 to $70 million, or approximately 30 percent above our expectation for 2018.”
The company reaffirmed its 2018 guidance for gross revenue at a range of $1.155 billion to $1.190 billion, representing growth of 1 to 4 percent compared to 2017. 2018 gross margin is expected to be approximately 24 percent. Non-GAAP adjusted EBITDA is expected to be between $50 million and $53 million in 2018. The company forecasts 2018 non-GAAP diluted earnings per share to be $0.30 to $0.33. Including the benefits of the cost reduction plan mentioned above, the company expects non-GAAP adjusted EBITDA to be between $65 million and $70 million in 2019.
For more information on Innerworkings, visit www.inwk.com.