InnerWorkings Announces Q4 and Full Year 2012 Results and 2013 Guidance

Additional fourth quarter 2012 financial and operational highlights include the following:

• 80 percent of the company’s revenue was generated from domestic sales, while 20 percent was derived from international sales activity. Enterprise clients accounted for 75 percent of sales with middle market clients accounting for 25 percent of sales.
• The company had a net benefit on the change in fair value of contingent consideration of $3.5 million related to acquisitions in Europe, which was recorded in the fourth quarter of 2012. All InnerWorkings acquisitions are structured under a contingent consideration arrangement, pursuant to which earn-out payments will not be made unless certain performance measures are met. Due to the softness in Europe, some of the applicable performance measures were not met in the fourth quarter of 2012, and as a result, the company recorded a net benefit to release a portion of its contingent consideration obligations.
• The company also recorded an incremental non-cash stock-based compensation expense of $2.0 million due to a better than forecasted employee retention rate than was assumed at the date of equity grant.
• Net debt declined by 26 percent sequentially and stood at $47.8 million at the end of the fourth quarter. The debt-to-leverage ratio was at a four year low of 1.4 times trailing twelve month adjusted EBITDA at the end of the fourth quarter.

“We were not only able to maintain our growth and execute against our strategy by investing in the business over the past year, but we also made significant contributions to strengthen our balance sheet,” said Joseph M. Busky, CFO. “We look forward to seeing our strategic 2012 investments in inside sales, Brazil and China turn profitable in 2013.”