InnerWorkings Inc. Reports Q1 Loss, Sales Decline
InnerWorkings Inc., Chicago, announced financial results for the three months ended March 31, 2019.
“Our pursuit of operational excellence and cost-reduction measures have not impacted our ability to maintain strong partnerships with our existing client base and attract additional large, global brands,” said CEO Rich Stoddart. “We have been awarded more new business in the first four months of 2019 than we had at this point in any prior year. We expect to continue positive momentum through 2019, solidly positioning us on our path toward profitable growth.”
Financial and Business Highlights
- Gross revenue was $267.2 million in the first quarter of 2019, a decrease of 3 percent compared to $274.5 million in the first quarter of 2018. Excluding currency impacts, first quarter gross revenue increased 1 percent compared to the same period of last year.
- Gross profit (net revenue) was $61.2 million, or 22.9 percent of gross revenue in the first quarter of 2019, compared to $66.1 million, or 24.1 percent of revenue, in the same period of last year. Excluding the impact of write-offs related to the previous exit of certain client work, first quarter gross margin would have been 23.2 percent.
- Net loss for the first quarter of 2019 was $2.5 million, or $0.05 per diluted share, compared to net loss of $1.7 million, or $0.03 per diluted share in the first quarter of 2018. First quarter 2019 net loss included $3.9 million of restructuring charges related to the previously announced cost reduction plan.
- Non-GAAP diluted earnings per share for the first quarter of 2019 was $0.02, compared to a loss of $0.02 in the first quarter of 2018.
- Adjusted EBITDA was $6.6 million in the first quarter of 2019, compared to $7.4 million in the first quarter of 2018.
- Additional work from new and existing clients awarded to date in 2019 amounts to approximately $75 million of annual revenue at full run-rate. The latest of these wins include new partnerships with one of the largest producers of consumer discretionary products and a global manufacturer of home improvement products.
“I am encouraged by the progress our teams are making to improve the efficiency of our operations, which is reflected in our sequential reduction in SG&A this quarter,” said Don Pearson, chief financial officer. “With the assistance of third-party experts, we are at an advanced planning stage of the second phase of cost reduction initiatives. Implementing these plans is expected to deliver $3 million of cost savings in the second half of 2019 and another $12 million in 2020 and beyond. This is a key step to create an operating platform that will enable sustainable profitable growth.”
The company is maintaining its guidance for 2019. Revenue is expected to be in a range of $1.15 to $1.18 billion, which represents growth of 3 percent to 5 percent compared to 2018. Adjusted EBITDA is expected to be in a range of $42 to $46 million, and non-GAAP diluted earnings per share guidance for 2019 is expected to be $0.20 to $0.24.
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