InnerWorkings Reports Second Quarter Financials, Details Cost Reduction Plan
Distributor InnerWorkings, Inc., headquartered in Chicago, Illinois, has announced financial results for second quarter 2018, ending June 30. The company’s gross revenues for the quarter, at $282 million, were up one percent compared to the same quarter in 2017.
“One of the best indicators of a company's strength is its ability to grow within its existing clients. 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,” says CEO Rich Stoddart. “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.”
Excluding currency impacts, the company’s second quarter gross revenue increased four percent compared to the same period last year. Gross profits in the quarter were $64.9 million, compared to $70 million in second quarter 2017. It reported a net loss for the quarter of approximately $300,000, compared to net income of $4.4 million one year ago. It also announced that it 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.
InnerWorkings has implemented an aggressive cost reduction plan that is expected to enable the company to reduce selling, general and administrative expenses in 2019 to be in line with 2017 expenses. The plan is expected to reduce annualized general and administrative 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 1,” says Chip Hodgkins, interim chief financial officer 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.”