Delaware
|
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20-5997364
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(State or other jurisdiction of incorporation or organization)
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(I.R.S. Employer Identification No.)
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600 West Chicago Avenue, Suite 850, Chicago, IL 60654
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(312) 642-3700
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(Address of principal executive offices) (Zip Code)
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(Registrants’ telephone number, including area code)
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Title of each class
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Name of each exchange on which registered
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Common Stock, $0.0001 par value
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Nasdaq Global Market
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Large accelerated filer
¨
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Accelerated filer
ý
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Non-accelerated filer
¨
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Smaller reporting company
¨
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(Do not check if a smaller
reporting company)
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Emerging growth company
¨
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||
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Item 1.
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Business
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|
Item 1A.
|
Risk Factors
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Item 1B.
|
Unresolved Staff Comments
|
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Item 2.
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Properties
|
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Item 3.
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Legal Proceedings
|
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Item 4.
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Mine Safety Disclosures
|
|
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||
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Item 5.
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Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities
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Item 6.
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Selected Financial Data
|
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Item 7.
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Management’s Discussion and Analysis of Financial Condition and Results of Operations
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Item 7A.
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Quantitative and Qualitative Disclosures about Market Risk
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Item 8.
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Financial Statements and Supplementary Data
|
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Item 9.
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Changes in and Disagreements with Accountants on Accounting and Financial Disclosure
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Item 9A.
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Controls and Procedures
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Item 9B.
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Other Information
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||
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Item 10.
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Directors, Executive Officers and Corporate Governance
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Item 11.
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Executive Compensation
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Item 12.
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Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters
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Item 13.
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Certain Relationships and Related Transactions and Director Independence
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Item 14.
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Principal Accountant Fees and Services
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||
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Item 15.
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Exhibits, Financial Statement Schedules
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Signatures
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Item 1.
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Business
|
•
|
greatly increase the number of suppliers that our clients can access efficiently;
|
•
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obtain favorable pricing and deliver high quality products and services for our clients; and
|
•
|
aggregate our purchasing power.
|
•
|
Customized order management.
Our solution automatically generates customized data entry screens based on product type and guides the production manager to enter the required job specifications. For example, if a production manager selects “envelope” in the product field, the screen will automatically prompt the production manager to specify the size, paper type, window size and placement and display style.
|
•
|
Cost management.
Our solution reconciles supplier invoices to executed orders to ensure the supplier adhered to the pricing and other terms contained in the order. In addition, it includes checks and balances that allow us to monitor important financial indicators relating to an order, such as projected gross margin and significant job alterations.
|
•
|
Standardized reporting.
Our solution generates transaction reports that contain quote, supplier capability, price and customer service information regarding the orders the client has completed with us. These reports can be customized, sorted and searched based on a specified time period or the type of product, price or supplier. In addition, the reports give our clients insight into their spend for each individual job and on an enterprise-wide basis, which allows the client to track the amounts it spends on job components such as paper, production and logistics.
|
•
|
Task-tracking.
Our solution creates a work order checklist that sends e-mail reminders to our production managers regarding the time elapsed between certain milestones and the completion of specified deliverables. These automated notifications enable our production managers to focus on more critical aspects of the process and eliminate delays.
|
•
|
Historical price baseline.
Some of our larger clients provide us with pricing data for orders they completed before they began to use our solution. For these clients, our solution automatically compares our current price for a job to the price obtained by the client for a comparable historical job, which enables us to demonstrate on an ongoing basis the cost savings we provide.
|
Item 1A.
|
Risk Factors
|
•
|
changes in economic and political conditions;
|
•
|
changes in and compliance with international and domestic laws and regulations, including anti-corruption laws such as the U.S. Foreign Corrupt Practices Act and the U.K. Anti-Bribery Act;
|
•
|
wars, civil unrest, acts of terrorism and other conflicts;
|
•
|
natural disasters;
|
•
|
compliance with and changes in tariffs, trade restrictions, trade agreements and taxation;
|
•
|
difficulties in managing or overseeing foreign operations;
|
•
|
limitations on the repatriation of funds because of foreign exchange controls;
|
•
|
political and economic corruption;
|
•
|
less developed and less predictable legal systems than those in the United States; and
|
•
|
intellectual property laws of countries which do not protect our intellectual property rights to the same extent as the laws of the United States.
|
•
|
recruit, motivate and retain qualified account executives, production managers and management personnel;
|
•
|
preserve our culture, values and entrepreneurial environment;
|
•
|
develop and improve our internal administrative infrastructure and execution standards; and
|
•
|
maintain high levels of client satisfaction.
|
•
|
fluctuations in our quarterly financial results or the quarterly financial results of companies perceived to be similar to us;
|
•
|
changes in market valuations of similar companies;
|
•
|
changes in economic and political conditions in the United States or abroad;
|
•
|
success of competitive products or services;
|
•
|
changes in our capital structure, such as future issuances of debt or equity securities;
|
•
|
announcements by us, our competitors, our clients or our suppliers of significant products or services, contracts, acquisitions or strategic alliances;
|
•
|
regulatory developments in the United States or foreign countries;
|
•
|
litigation involving our company, our general industry or both;
|
•
|
additions or departures of key personnel;
|
•
|
investors’ general perception of us; and
|
•
|
changes in general industry and market conditions.
|
•
|
the demand for our marketing execution solutions;
|
•
|
the use of outsourced enterprise solutions;
|
•
|
clients’ business decisions regarding the quantities of marketing materials they purchase;
|
•
|
the number, timing and profitability of our jobs, unanticipated contract terminations and job postponements;
|
•
|
new product introductions and enhancements by our competitors;
|
•
|
changes in our pricing policies;
|
•
|
our ability to manage costs, including personnel costs; and
|
•
|
costs related to possible acquisitions of other businesses.
|
Item 1B.
|
Unresolved Staff Comments
|
Item 2.
|
Properties
|
Item 3.
|
Legal Proceedings
|
Item 4.
|
Mine Safety Disclosures
|
Item 5.
|
Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities
|
|
High
|
|
Low
|
||||
2017
|
|
|
|
|
|
||
First Quarter
|
$
|
11.00
|
|
|
$
|
9.08
|
|
Second Quarter
|
$
|
11.94
|
|
|
$
|
9.55
|
|
Third Quarter
|
$
|
11.92
|
|
|
$
|
10.08
|
|
Fourth Quarter
|
$
|
12.03
|
|
|
$
|
9.81
|
|
|
|
|
|
||||
2016
|
|
|
|
|
|
||
First Quarter
|
$
|
8.02
|
|
|
$
|
6.06
|
|
Second Quarter
|
$
|
8.87
|
|
|
$
|
7.59
|
|
Third Quarter
|
$
|
10.08
|
|
|
$
|
8.08
|
|
Fourth Quarter
|
$
|
10.08
|
|
|
$
|
8.07
|
|
Period
|
Number of Shares Purchased
|
|
Average Price Paid Per Share
|
|
Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs
|
|
Maximum Number of Shares that May Yet Be Purchased Under the Plans or Programs
(1)
|
|||||
10/1/17-10/31/17
|
—
|
|
|
$
|
—
|
|
|
—
|
|
|
3,259
|
|
11/1/17-11/30/17
|
4
|
|
|
10.32
|
|
|
—
|
|
|
3,232
|
|
|
12/1/17-12/31/17
|
170
|
|
|
10.07
|
|
|
93
|
|
|
3,402
|
|
|
Total
|
174
|
|
|
$
|
10.07
|
|
|
93
|
|
|
|
(1)
|
The share repurchase plan authorized by our Board of Directors allows repurchases of up to $50 million of our common stock. The maximum number of shares that may yet be repurchased under the plan is estimated using the closing share price on the last day of each period presented.
|
|
|
Dec 31, 2012
|
|
Dec 31, 2013
|
|
Dec 31, 2014
|
|
Dec 31, 2015
|
|
Dec 31, 2016
|
|
Dec 31, 2017
|
||||||||||||
INWK
|
|
$
|
100
|
|
|
$
|
57
|
|
|
$
|
57
|
|
|
$
|
54
|
|
|
$
|
71
|
|
|
$
|
73
|
|
NASDAQ Market Index
|
|
$
|
100
|
|
|
$
|
138
|
|
|
$
|
157
|
|
|
$
|
166
|
|
|
$
|
178
|
|
|
$
|
229
|
|
Dow Jones Business Support Services Index
|
|
$
|
100
|
|
|
$
|
133
|
|
|
$
|
137
|
|
|
$
|
150
|
|
|
$
|
169
|
|
|
$
|
212
|
|
Item 6.
|
Selected Financial Data
|
|
Year ended December 31,
|
||||||||||||||||||
|
2017
|
|
2016
|
|
2015
|
|
2014
|
|
2013
|
||||||||||
|
(in thousands, except per share amounts)
|
||||||||||||||||||
Consolidated statements of operations data:
|
|
|
|
|
|
|
|
|
|
||||||||||
Revenue
|
$
|
1,136,256
|
|
|
$
|
1,090,704
|
|
|
$
|
1,029,353
|
|
|
$
|
1,000,133
|
|
|
$
|
890,960
|
|
Cost of goods sold
|
857,921
|
|
|
827,156
|
|
|
789,159
|
|
|
770,674
|
|
|
688,934
|
|
|||||
Gross profit
|
278,335
|
|
|
263,548
|
|
|
240,194
|
|
|
229,459
|
|
|
202,026
|
|
|||||
Selling, general and administrative expenses
|
225,738
|
|
|
209,967
|
|
|
197,291
|
|
|
196,190
|
|
|
183,600
|
|
|||||
Depreciation and amortization
|
13,390
|
|
|
17,916
|
|
|
17,472
|
|
|
17,723
|
|
|
13,664
|
|
|||||
Change in fair value of contingent consideration
|
677
|
|
|
10,417
|
|
|
(270
|
)
|
|
(37,873
|
)
|
|
(31,331
|
)
|
|||||
Goodwill impairment charge
|
—
|
|
|
—
|
|
|
37,539
|
|
|
—
|
|
|
37,908
|
|
|||||
Intangible asset impairment charges
|
—
|
|
|
70
|
|
|
202
|
|
|
2,710
|
|
|
—
|
|
|||||
Restructuring charges
|
—
|
|
|
5,615
|
|
|
1,053
|
|
|
—
|
|
|
4,322
|
|
|||||
Income (loss) from operations
|
38,530
|
|
|
19,563
|
|
|
(13,093
|
)
|
|
50,708
|
|
|
(6,137
|
)
|
|||||
Interest income
|
97
|
|
|
86
|
|
|
69
|
|
|
57
|
|
|
76
|
|
|||||
Interest expense
|
(4,729
|
)
|
|
(4,171
|
)
|
|
(4,612
|
)
|
|
(4,428
|
)
|
|
(2,954
|
)
|
|||||
Other, net
|
(1,788
|
)
|
|
(153
|
)
|
|
(3,135
|
)
|
|
(747
|
)
|
|
(357
|
)
|
|||||
Total other expense
|
(6,420
|
)
|
|
(4,238
|
)
|
|
(7,678
|
)
|
|
(5,118
|
)
|
|
(3,235
|
)
|
|||||
Income (loss) before income taxes
|
32,110
|
|
|
15,325
|
|
|
(20,771
|
)
|
|
45,590
|
|
|
(9,372
|
)
|
|||||
Income tax expense (benefit)
|
13,131
|
|
|
10,955
|
|
|
12,292
|
|
|
1,855
|
|
|
(612
|
)
|
|||||
Net income (loss)
|
$
|
18,979
|
|
|
$
|
4,370
|
|
|
$
|
(33,063
|
)
|
|
$
|
43,735
|
|
|
$
|
(8,760
|
)
|
Net income (loss) per share of common stock:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Basic
|
$
|
0.35
|
|
|
$
|
0.08
|
|
|
$
|
(0.63
|
)
|
|
$
|
0.84
|
|
|
$
|
(0.17
|
)
|
Diluted
|
$
|
0.35
|
|
|
$
|
0.08
|
|
|
$
|
(0.63
|
)
|
|
$
|
0.82
|
|
|
$
|
(0.17
|
)
|
Shares used in per share calculations:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Basic
|
53,851
|
|
|
53,607
|
|
|
52,791
|
|
|
52,096
|
|
|
50,875
|
|
|||||
Diluted
|
54,944
|
|
|
54,460
|
|
|
52,791
|
|
|
53,104
|
|
|
50,875
|
|
|||||
|
|
|
|
|
|
|
|
|
|
||||||||||
Consolidated balance sheet data:
|
|
|
|
|
|
|
|
|
|
||||||||||
Cash and cash equivalents
|
$
|
30,562
|
|
|
$
|
30,924
|
|
|
$
|
30,755
|
|
|
$
|
22,578
|
|
|
$
|
18,606
|
|
Working capital
(1)
|
140,297
|
|
|
104,371
|
|
|
79,609
|
|
|
89,994
|
|
|
53,784
|
|
|||||
Total assets
|
640,019
|
|
|
590,999
|
|
|
608,467
|
|
|
633,249
|
|
|
616,208
|
|
|||||
Revolving credit facility
(2)
|
128,398
|
|
|
107,468
|
|
|
99,258
|
|
|
104,539
|
|
|
69,000
|
|
|||||
Total stockholders’ equity
|
289,559
|
|
|
264,626
|
|
|
254,136
|
|
|
292,980
|
|
|
243,000
|
|
(1)
|
Working capital represents accounts receivable, unbilled revenue, inventories, prepaid expenses and other current assets, offset by accounts payable, accrued expenses and other current liabilities.
|
(2)
|
The Company entered into a Credit Agreement, dated as of August 2, 2010, subsequently amended most recently as of February 3, 2017, to fund acquisitions and for general working capital purposes.
|
Item 7.
|
Management’s Discussion and Analysis of Financial Condition and Results of Operations
|
|
Year ended December 31,
|
|||||||
|
2017
|
|
2016
|
|
2015
|
|||
Revenue
|
100.0
|
%
|
|
100.0
|
%
|
|
100.0
|
%
|
Cost of goods sold
|
75.5
|
%
|
|
75.8
|
%
|
|
76.7
|
%
|
Gross profit
|
24.5
|
%
|
|
24.2
|
%
|
|
23.3
|
%
|
Operating expenses:
|
|
|
|
|
|
|||
Selling, general and administrative expenses
|
19.9
|
%
|
|
19.3
|
%
|
|
19.2
|
%
|
Depreciation and amortization
|
1.2
|
%
|
|
1.6
|
%
|
|
1.7
|
%
|
Change in fair value of contingent consideration
|
0.1
|
%
|
|
1.0
|
%
|
|
—
|
%
|
Goodwill impairment charge
|
—
|
%
|
|
—
|
%
|
|
3.6
|
%
|
Intangible asset impairment charges
|
—
|
%
|
|
—
|
%
|
|
—
|
%
|
Restructuring charges
|
—
|
%
|
|
0.5
|
%
|
|
0.1
|
%
|
Income (loss) from operations
|
3.4
|
%
|
|
1.8
|
%
|
|
(1.3
|
)%
|
Other income (expense):
|
|
|
|
|
|
|||
Interest income
|
—
|
%
|
|
—
|
%
|
|
—
|
%
|
Interest expense
|
(0.4
|
)%
|
|
(0.4
|
)%
|
|
(0.4
|
)%
|
Other, net
|
(0.2
|
)%
|
|
—
|
%
|
|
(0.3
|
)%
|
Total other expense
|
(0.6
|
)%
|
|
(0.4
|
)%
|
|
(0.7
|
)%
|
Income (loss) before taxes
|
2.8
|
%
|
|
1.4
|
%
|
|
(2.0
|
)%
|
Income tax expense
|
1.2
|
%
|
|
1.0
|
%
|
|
1.2
|
%
|
Net income (loss)
|
1.7
|
%
|
|
0.4
|
%
|
|
(3.2
|
)%
|
|
Year ended December 31,
|
|||||||||||||||||||
|
2017
|
|
% of Total
|
|
2016
|
|
% of Total
|
|
2015
|
|
% of Total
|
|||||||||
North America
|
$
|
776,400
|
|
|
68.3
|
%
|
|
$
|
734,164
|
|
|
67.3
|
%
|
|
$
|
708,532
|
|
|
68.8
|
%
|
International
|
359,856
|
|
|
31.7
|
|
|
356,540
|
|
|
32.7
|
|
|
320,821
|
|
|
31.2
|
|
|||
Net revenue from third parties
|
$
|
1,136,256
|
|
|
100.0
|
%
|
|
$
|
1,090,704
|
|
|
100.0
|
%
|
|
$
|
1,029,353
|
|
|
100.0
|
%
|
|
Year ended December 31,
|
||||||||||
|
2017
|
|
2016
|
|
2015
|
||||||
(in thousands, except per share data)
|
|
|
|
|
|
||||||
Net income
|
$
|
18,979
|
|
|
$
|
4,370
|
|
|
$
|
(33,063
|
)
|
Denominator for dilutive earnings per share
|
54,944
|
|
|
54,460
|
|
|
52,791
|
|
|||
Diluted earnings per share
|
$
|
0.35
|
|
|
$
|
0.08
|
|
|
$
|
(0.63
|
)
|
|
Year ended December 31,
|
|||||||||||||||||||
|
2017
|
|
% of Total
|
|
2016
|
|
% of Total
|
|
2015
|
|
% of Total
|
|||||||||
|
(dollars in thousands)
|
|||||||||||||||||||
North America
|
$
|
78,079
|
|
|
125.4
|
%
|
|
$
|
67,969
|
|
|
114.9
|
%
|
|
$
|
63,744
|
|
|
125.5
|
%
|
International
|
20,063
|
|
|
32.2
|
|
|
22,576
|
|
|
38.2
|
|
|
14,936
|
|
|
29.4
|
|
|||
Other
(1)
|
(35,867
|
)
|
|
(57.6
|
)
|
|
(31,392
|
)
|
|
(53.1
|
)
|
|
(27,881
|
)
|
|
(54.8
|
)
|
|||
Adjusted EBITDA
|
$
|
62,275
|
|
|
100.0
|
%
|
|
$
|
59,153
|
|
|
100.0
|
%
|
|
$
|
50,799
|
|
|
100.0
|
%
|
|
Year ended December 31,
|
||||||||||
|
2017
|
|
2016
|
|
2015
|
||||||
Net income (loss)
|
$
|
18,979
|
|
|
$
|
4,370
|
|
|
$
|
(33,063
|
)
|
Income tax expense
|
13,131
|
|
|
10,955
|
|
|
12,292
|
|
|||
Total other expense
|
6,420
|
|
|
4,238
|
|
|
7,678
|
|
|||
Depreciation and amortization
|
13,390
|
|
|
17,916
|
|
|
17,472
|
|
|||
Stock-based compensation expense
|
6,820
|
|
|
5,572
|
|
|
5,873
|
|
|||
Change in fair value of contingent consideration
|
677
|
|
|
10,417
|
|
|
(270
|
)
|
|||
Goodwill impairment charge
|
—
|
|
|
—
|
|
|
37,539
|
|
|||
Intangible asset impairment charges
|
—
|
|
|
70
|
|
|
202
|
|
|||
Restructuring and other charges
|
—
|
|
|
5,615
|
|
|
1,053
|
|
|||
Business development realignment
|
715
|
|
|
—
|
|
|
—
|
|
|||
Professional fees related to ASC 606 implementation
|
829
|
|
|
—
|
|
|
—
|
|
|||
CEO search costs
|
454
|
|
|
—
|
|
|
—
|
|
|||
Czech currency impact on procurement margin
|
860
|
|
|
—
|
|
|
—
|
|
|||
Secured asset reserve
(1)
|
—
|
|
|
—
|
|
|
2,023
|
|
|||
Adjusted EBITDA
|
$
|
62,275
|
|
|
$
|
59,153
|
|
|
$
|
50,799
|
|
(1)
|
The Company accrued a reserve of
$2.0 million
in 2015 on inventory in which it holds a security interest. The inventory was procured for a former client.
|
|
Year Ended December 31,
|
||||||||||
|
2017
|
|
2016
|
|
2015
|
||||||
Net income (loss)
|
$
|
18,979
|
|
|
$
|
4,370
|
|
|
$
|
(33,063
|
)
|
Change in fair value of contingent consideration, net of tax
|
677
|
|
|
10,417
|
|
|
(282
|
)
|
|||
Goodwill impairment charge, net of tax
|
—
|
|
|
—
|
|
|
37,539
|
|
|||
Intangible asset impairment charges, net of tax
|
—
|
|
|
56
|
|
|
153
|
|
|||
Restructuring and other charges, net of tax
|
—
|
|
|
4,873
|
|
|
873
|
|
|||
Realignment-related income tax charges
|
—
|
|
|
1,179
|
|
|
4,685
|
|
|||
Czech exit from exchange rate commitment, net of tax
|
294
|
|
|
—
|
|
|
—
|
|
|||
Business development realignment, net of tax
|
875
|
|
|
—
|
|
|
—
|
|
|||
Professional fees related to ASC 606 implementation, net of tax
|
528
|
|
|
—
|
|
|
—
|
|
|||
CEO search costs, net of tax
|
282
|
|
|
—
|
|
|
—
|
|
|||
Czech currency impact on procurement margin, net of tax
|
697
|
|
|
—
|
|
|
—
|
|
|||
Accelerated depreciation of internal use software, net of tax
|
246
|
|
|
—
|
|
|
—
|
|
|||
Secured asset reserve, net of tax
|
—
|
|
|
—
|
|
|
1,239
|
|
|||
Venezuela remeasurement charges
|
—
|
|
|
—
|
|
|
1,521
|
|
|||
Adjusted net income
|
22,578
|
|
|
20,895
|
|
|
12,665
|
|
|||
Weighted average shares outstanding, diluted
|
54,944
|
|
|
54,460
|
|
|
53,515
|
|
|||
Non-GAAP Diluted Earnings Per Share
|
$
|
0.41
|
|
|
$
|
0.38
|
|
|
$
|
0.24
|
|
|
Three months ended
|
||||||||||||||||||||||||||||||
|
Mar 30, 2016
|
|
June 30, 2016
|
|
Sept 30, 2016
|
|
Dec 31, 2016
|
|
Mar 31, 2017
|
|
June 30, 2017
|
|
Sept 30, 2017
|
|
Dec 31, 2017
|
||||||||||||||||
|
(in thousands, except per share amounts)
|
||||||||||||||||||||||||||||||
Revenue
|
$
|
271,073
|
|
|
$
|
269,220
|
|
|
$
|
279,993
|
|
|
$
|
270,418
|
|
|
$
|
267,390
|
|
|
$
|
279,530
|
|
|
$
|
288,386
|
|
|
$
|
300,950
|
|
Gross profit
|
61,946
|
|
|
65,094
|
|
|
67,781
|
|
|
68,727
|
|
|
64,277
|
|
|
70,227
|
|
|
72,519
|
|
|
71,311
|
|
||||||||
Net income (loss)
|
(2,693
|
)
|
|
(2,324
|
)
|
|
4,341
|
|
|
5,047
|
|
|
5,456
|
|
|
4,493
|
|
|
7,528
|
|
|
1,499
|
|
||||||||
Earnings (loss) per share:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Basic
|
$
|
(0.05
|
)
|
|
$
|
(0.04
|
)
|
|
$
|
0.08
|
|
|
$
|
0.09
|
|
|
$
|
0.10
|
|
|
$
|
0.08
|
|
|
$
|
0.14
|
|
|
$
|
0.03
|
|
Diluted
|
$
|
(0.05
|
)
|
|
$
|
(0.04
|
)
|
|
$
|
0.08
|
|
|
$
|
0.09
|
|
|
$
|
0.10
|
|
|
$
|
0.08
|
|
|
$
|
0.14
|
|
|
$
|
0.03
|
|
|
Payments due by period
|
||||||||||||||||||
|
Total
|
|
Less than 1 year
|
|
1-3 years
|
|
3-5 years
|
|
More than 5 years
|
||||||||||
|
(in thousands)
|
||||||||||||||||||
Accounts payable
|
$
|
134,609
|
|
|
$
|
134,609
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Operating lease obligations
|
23,215
|
|
|
6,942
|
|
|
9,633
|
|
|
4,560
|
|
|
2,080
|
|
|||||
Revolving credit facility
|
128,398
|
|
|
—
|
|
|
128,398
|
|
|
—
|
|
|
—
|
|
|||||
Total
|
$
|
286,222
|
|
|
$
|
141,551
|
|
|
$
|
138,031
|
|
|
$
|
4,560
|
|
|
$
|
2,080
|
|
Item 7A.
|
Quantitative and Qualitative Disclosures About Market Risk
|
Item 8.
|
Financial Statements and Supplementary Data
|
INNERWORKINGS, INC.:
|
|
|
|
|
Year Ended December 31,
|
||||||||||
|
2017
|
|
2016
|
|
2015
|
||||||
Revenue
|
$
|
1,136,256
|
|
|
$
|
1,090,704
|
|
|
$
|
1,029,353
|
|
Cost of goods sold
|
857,921
|
|
|
827,156
|
|
|
789,159
|
|
|||
Gross profit
|
278,335
|
|
|
263,548
|
|
|
240,194
|
|
|||
Operating expenses:
|
|
|
|
|
|
|
|
||||
Selling, general and administrative expenses
|
225,738
|
|
|
209,967
|
|
|
197,291
|
|
|||
Depreciation and amortization
|
13,390
|
|
|
17,916
|
|
|
17,472
|
|
|||
Change in fair value of contingent consideration
|
677
|
|
|
10,417
|
|
|
(270
|
)
|
|||
Goodwill impairment charge
|
—
|
|
|
—
|
|
|
37,539
|
|
|||
Intangible asset impairment charges
|
—
|
|
|
70
|
|
|
202
|
|
|||
Restructuring charges
|
—
|
|
|
5,615
|
|
|
1,053
|
|
|||
Income (loss) from operations
|
38,530
|
|
|
19,563
|
|
|
(13,093
|
)
|
|||
Other income (expense):
|
|
|
|
|
|
|
|
||||
Interest income
|
97
|
|
|
86
|
|
|
69
|
|
|||
Interest expense
|
(4,729
|
)
|
|
(4,171
|
)
|
|
(4,612
|
)
|
|||
Other, net
|
(1,788
|
)
|
|
(153
|
)
|
|
(3,135
|
)
|
|||
Total other expense
|
(6,420
|
)
|
|
(4,238
|
)
|
|
(7,678
|
)
|
|||
Income (loss) before taxes
|
32,110
|
|
|
15,325
|
|
|
(20,771
|
)
|
|||
Income tax expense
|
13,131
|
|
|
10,955
|
|
|
12,292
|
|
|||
Net income (loss)
|
$
|
18,979
|
|
|
$
|
4,370
|
|
|
$
|
(33,063
|
)
|
|
|
|
|
|
|
||||||
Basic earnings (loss) per share
|
$
|
0.35
|
|
|
$
|
0.08
|
|
|
$
|
(0.63
|
)
|
Diluted earnings (loss) per share
|
$
|
0.35
|
|
|
$
|
0.08
|
|
|
$
|
(0.63
|
)
|
|
Year Ended December 31,
|
||||||||||
|
2017
|
|
2016
|
|
2015
|
||||||
Net income (loss)
|
$
|
18,979
|
|
|
$
|
4,370
|
|
|
$
|
(33,063
|
)
|
Other comprehensive income (loss), before tax:
|
|
|
|
|
|
|
|
||||
Foreign currency translation adjustments
|
1,732
|
|
|
(7,168
|
)
|
|
(8,592
|
)
|
|||
Other comprehensive income (loss), before tax
|
1,732
|
|
|
(7,168
|
)
|
|
(8,592
|
)
|
|||
Income tax expense (benefit) related to components of other comprehensive income (loss)
|
13
|
|
|
(362
|
)
|
|
—
|
|
|||
Other comprehensive income (loss), net of tax
|
1,719
|
|
|
(6,806
|
)
|
|
(8,592
|
)
|
|||
Comprehensive income (loss)
|
$
|
20,697
|
|
|
$
|
(2,436
|
)
|
|
$
|
(41,655
|
)
|
|
December 31,
|
||||||
|
2017
|
|
2016
|
||||
Assets
|
|
|
|
|
|
||
Current assets:
|
|
|
|
|
|
||
Cash and cash equivalents
|
$
|
30,562
|
|
|
$
|
30,924
|
|
Accounts receivable, net of allowance for doubtful accounts of $3,534 and $2,622, respectively
|
206,712
|
|
|
182,874
|
|
||
Unbilled revenue
|
49,389
|
|
|
32,723
|
|
||
Inventories
|
34,807
|
|
|
31,638
|
|
||
Prepaid expenses
|
19,638
|
|
|
18,772
|
|
||
Other current assets
|
32,694
|
|
|
24,769
|
|
||
Total current assets
|
373,802
|
|
|
321,700
|
|
||
Property and equipment, net
|
36,714
|
|
|
32,656
|
|
||
Intangibles and other assets:
|
|
|
|
|
|||
Goodwill
|
199,946
|
|
|
202,700
|
|
||
Intangible assets, net
|
27,563
|
|
|
31,538
|
|
||
Deferred income taxes
|
612
|
|
|
1,031
|
|
||
Other non-current assets
|
1,382
|
|
|
1,374
|
|
||
Total intangibles and other assets
|
229,503
|
|
|
236,643
|
|
||
Total assets
|
$
|
640,019
|
|
|
$
|
590,999
|
|
Liabilities and stockholders' equity
|
|
|
|
|
|||
Current liabilities:
|
|
|
|
|
|||
Accounts payable
|
$
|
134,609
|
|
|
$
|
121,289
|
|
Current portion of contingent consideration
|
—
|
|
|
19,283
|
|
||
Other current liabilities
|
34,641
|
|
|
35,049
|
|
||
Accrued expenses
|
33,694
|
|
|
30,067
|
|
||
Total current liabilities
|
202,943
|
|
|
205,688
|
|
||
Revolving credit facility
|
128,398
|
|
|
107,468
|
|
||
Deferred income taxes
|
12,348
|
|
|
11,291
|
|
||
Other long-term liabilities
|
6,771
|
|
|
1,926
|
|
||
Total liabilities
|
350,461
|
|
|
326,373
|
|
||
Commitments and contingencies (See Note 9)
|
|
|
|
|
|
||
Stockholders' equity:
|
|
|
|
|
|||
Common stock, par value $0.0001 per share, 200,000 and 200,000 shares authorized, 64,075 and 63,391 shares issued, 54,055 and 54,088 shares outstanding, respectively
|
6
|
|
|
6
|
|
||
Additional paid-in capital
|
235,199
|
|
|
224,480
|
|
||
Treasury stock at cost, 10,020 and 9,303 shares, respectively
|
(55,873
|
)
|
|
(49,458
|
)
|
||
Accumulated other comprehensive loss
|
(19,079
|
)
|
|
(20,799
|
)
|
||
Retained earnings
|
129,305
|
|
|
110,397
|
|
||
Total stockholders' equity
|
289,559
|
|
|
264,626
|
|
||
Total liabilities and stockholders' equity
|
$
|
640,019
|
|
|
$
|
590,999
|
|
|
Common Stock
|
|
Treasury Stock
|
|
Additional Paid-in-Capital
|
|
Accumulated Other Comprehensive Income (Loss)
|
|
Retained Earnings
|
|
Total
|
||||||||||||||||||
|
Shares
|
|
Amount
|
|
Shares
|
|
Amount
|
|
|
|
|
||||||||||||||||||
Balance at December 31, 2014
|
61,852
|
|
|
$
|
6
|
|
|
9,021
|
|
|
$
|
(49,996
|
)
|
|
$
|
207,429
|
|
|
$
|
(5,401
|
)
|
|
$
|
140,942
|
|
|
$
|
292,980
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Net loss
|
|
|
|
|
|
|
|
|
|
|
|
|
(33,063
|
)
|
|
(33,063
|
)
|
||||||||||||
Total other comprehensive loss
|
|
|
|
|
|
|
|
|
|
|
(8,592
|
)
|
|
|
|
(8,592
|
)
|
||||||||||||
Comprehensive loss
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(41,655
|
)
|
|||||||||||||
Issuance of common stock upon exercise of stock awards
|
793
|
|
|
—
|
|
|
|
|
|
|
675
|
|
|
|
|
|
|
675
|
|
||||||||||
Issuance of common stock and treasury shares as consideration for acquisition
|
|
|
|
|
(238
|
)
|
|
2,686
|
|
|
|
|
|
|
(1,115
|
)
|
|
1,571
|
|
||||||||||
Acquisition of treasury shares
|
|
|
|
|
764
|
|
|
(4,897
|
)
|
|
|
|
|
|
|
|
(4,897
|
)
|
|||||||||||
Excess tax benefit derived from stock award exercises
|
|
|
|
|
|
|
|
|
(411
|
)
|
|
|
|
|
|
(411
|
)
|
||||||||||||
Stock-based compensation expense
|
|
|
|
|
|
|
|
|
5,873
|
|
|
|
|
|
|
5,873
|
|
||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Balance at December 31, 2015
|
62,645
|
|
|
6
|
|
|
9,547
|
|
|
(52,207
|
)
|
|
213,566
|
|
|
(13,993
|
)
|
|
106,764
|
|
|
254,136
|
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Net income
|
|
|
|
|
|
|
|
|
|
|
|
|
4,370
|
|
|
4,370
|
|
||||||||||||
Total other comprehensive loss
|
|
|
|
|
|
|
|
|
|
|
(6,806
|
)
|
|
|
|
(6,806
|
)
|
||||||||||||
Comprehensive loss
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(2,436
|
)
|
|||||||||||||
Issuance of common stock upon exercise of stock awards
|
746
|
|
|
—
|
|
|
|
|
|
|
1,770
|
|
|
|
|
|
|
1,770
|
|
||||||||||
Issuance of common stock and treasury shares as consideration for acquisition
|
|
|
|
|
(244
|
)
|
|
2,749
|
|
|
|
|
|
|
(737
|
)
|
|
2,012
|
|
||||||||||
Excess tax benefit derived from stock award exercises
|
|
|
|
|
|
|
|
|
3,572
|
|
|
|
|
|
|
3,572
|
|
||||||||||||
Stock-based compensation expense
|
|
|
|
|
|
|
|
|
5,572
|
|
|
|
|
|
|
5,572
|
|
||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Balance at December 31, 2016
|
63,391
|
|
|
6
|
|
|
9,303
|
|
|
(49,458
|
)
|
|
224,480
|
|
|
(20,799
|
)
|
|
110,397
|
|
|
264,626
|
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Net income
|
|
|
|
|
|
|
|
|
|
|
|
|
18,979
|
|
|
18,979
|
|
||||||||||||
Total other comprehensive income
|
|
|
|
|
|
|
|
|
|
|
1,719
|
|
|
|
|
1,719
|
|
||||||||||||
Comprehensive income
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
20,697
|
|
|||||||||||||
Issuance of common stock upon exercise of stock awards
|
648
|
|
|
—
|
|
|
|
|
|
|
|
|
1,421
|
|
|
|
|
|
|
1,421
|
|
||||||||
Issuance of common stock and treasury shares as consideration for acquisition
|
36
|
|
|
—
|
|
|
(405
|
)
|
|
4,561
|
|
|
385
|
|
|
|
|
(269
|
)
|
|
4,678
|
|
|||||||
Acquisition of treasury shares
|
|
|
|
|
1,122
|
|
|
(10,976
|
)
|
|
|
|
|
|
|
|
(10,976
|
)
|
|||||||||||
Stock-based compensation expense
|
|
|
|
|
|
|
|
|
6,820
|
|
|
|
|
|
|
6,820
|
|
||||||||||||
Cumulative effect of change related to adoption of ASU 2016-09
|
|
|
|
|
|
|
|
|
2,093
|
|
|
|
|
198
|
|
|
2,291
|
|
|||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Balance at December 31, 2017
|
64,075
|
|
|
$
|
6
|
|
|
10,020
|
|
|
$
|
(55,873
|
)
|
|
$
|
235,199
|
|
|
$
|
(19,079
|
)
|
|
$
|
129,305
|
|
|
$
|
289,559
|
|
|
Year Ended December 31,
|
||||||||||
|
2017
|
|
2016
|
|
2015
|
||||||
Cash flows from operating activities
|
|
|
|
|
|
||||||
Net income (loss)
|
$
|
18,979
|
|
|
$
|
4,370
|
|
|
$
|
(33,063
|
)
|
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
|
|
|
|
|
|
|
|
||||
Depreciation and amortization
|
13,390
|
|
|
17,916
|
|
|
17,472
|
|
|||
Stock-based compensation expense
|
6,820
|
|
|
5,572
|
|
|
5,873
|
|
|||
Deferred income taxes
|
3,744
|
|
|
4,084
|
|
|
6,947
|
|
|||
Change in fair value of contingent consideration liability
|
677
|
|
|
10,417
|
|
|
(270
|
)
|
|||
Goodwill impairment charge
|
—
|
|
|
—
|
|
|
37,539
|
|
|||
Intangible asset impairment charges
|
—
|
|
|
70
|
|
|
202
|
|
|||
Bad debt provision
|
454
|
|
|
2,171
|
|
|
1,949
|
|
|||
Secured asset reserve
|
—
|
|
|
—
|
|
|
2,023
|
|
|||
Venezuela remeasurement charges
|
—
|
|
|
—
|
|
|
890
|
|
|||
Excess tax benefit from exercise of stock awards
|
—
|
|
|
(4,030
|
)
|
|
—
|
|
|||
Other operating activities
|
210
|
|
|
210
|
|
|
210
|
|
|||
Change in assets, net of acquisitions:
|
|
|
|
|
|
|
|
||||
Accounts receivable and unbilled revenue
|
(40,959
|
)
|
|
1,809
|
|
|
(10,361
|
)
|
|||
Inventories
|
(3,169
|
)
|
|
1,690
|
|
|
(8,188
|
)
|
|||
Prepaid expenses and other assets
|
(8,989
|
)
|
|
2,442
|
|
|
(6,138
|
)
|
|||
Change in liabilities, net of acquisitions:
|
|
|
|
|
|
|
|
||||
Accounts payable
|
13,320
|
|
|
(48,955
|
)
|
|
26,199
|
|
|||
Accrued expenses and other liabilities
|
11,670
|
|
|
12,759
|
|
|
2,118
|
|
|||
Net cash provided by operating activities
|
16,147
|
|
|
10,525
|
|
|
43,402
|
|
|||
|
|
|
|
|
|
||||||
Cash flows from investing activities
|
|
|
|
|
|
|
|
|
|||
Purchases of property and equipment
|
(12,483
|
)
|
|
(13,319
|
)
|
|
(15,034
|
)
|
|||
Net cash used in investing activities
|
(12,483
|
)
|
|
(13,319
|
)
|
|
(15,034
|
)
|
|||
|
|
|
|
|
|
||||||
Cash flows from financing activities
|
|
|
|
|
|
|
|
|
|||
Net borrowing (repayments) of revolving credit facility
|
20,709
|
|
|
8,739
|
|
|
(5,281
|
)
|
|||
Net short-term secured borrowings (repayments)
|
(867
|
)
|
|
405
|
|
|
(799
|
)
|
|||
Repurchases of common stock
|
(10,976
|
)
|
|
—
|
|
|
(4,897
|
)
|
|||
Payments of contingent consideration
|
(15,345
|
)
|
|
(11,374
|
)
|
|
(8,010
|
)
|
|||
Proceeds from exercise of stock options
|
2,663
|
|
|
2,636
|
|
|
1,195
|
|
|||
Excess tax benefit from exercise of stock awards
|
—
|
|
|
4,030
|
|
|
—
|
|
|||
Other financing activities
|
(1,156
|
)
|
|
(866
|
)
|
|
(594
|
)
|
|||
Net cash provided by (used) in financing activities
|
(4,972
|
)
|
|
3,570
|
|
|
(18,386
|
)
|
|||
|
|
|
|
|
|
||||||
Effect of exchange rate changes on cash and cash equivalents
|
947
|
|
|
(607
|
)
|
|
(1,805
|
)
|
|||
Increase (decrease) in cash and cash equivalents
|
(362
|
)
|
|
169
|
|
|
8,177
|
|
|||
Cash and cash equivalents, beginning of period
|
30,924
|
|
|
30,755
|
|
|
22,578
|
|
|||
Cash and cash equivalents, end of period
|
$
|
30,562
|
|
|
$
|
30,924
|
|
|
$
|
30,755
|
|
Computer equipment
|
3 years
|
Software, including internal-use software
|
1 to 6 years
|
Office equipment
|
5 years
|
Furniture and fixtures
|
7 years
|
|
Foreign Currency Translation Adjustments
|
||
Balance at December 31, 2015
|
$
|
(13,993
|
)
|
|
|
||
Other comprehensive loss before reclassifications
|
(6,806
|
)
|
|
Net current-period other comprehensive loss
|
(6,806
|
)
|
|
|
|
||
Balance at December 31, 2016
|
(20,799
|
)
|
|
|
|
||
Other comprehensive income before reclassifications
|
1,719
|
|
|
Net current-period other comprehensive income
|
1,719
|
|
|
|
|
||
Balance at December 31, 2017
|
$
|
(19,079
|
)
|
|
Shares of Common Stock Issued
|
|
Value of Shares
|
|
Average Share Value
|
|||||
Year ended December 31, 2017:
|
|
|
|
|
|
|||||
Payments of contingent consideration
|
441
|
|
|
$
|
4,678
|
|
|
$
|
10.61
|
|
|
|
|
|
|
|
|||||
Year ended December 31, 2016:
|
|
|
|
|
|
|||||
Payments of contingent consideration
|
244
|
|
|
$
|
2,012
|
|
|
$
|
8.25
|
|
|
|
|
|
|
|
|||||
Year ended December 31, 2015:
|
|
|
|
|
|
|||||
Payments of contingent consideration
|
238
|
|
|
$
|
1,570
|
|
|
$
|
6.59
|
|
|
North America
|
|
International
|
|
Total
|
||||||
Balance as of December 31, 2015
|
$
|
170,736
|
|
|
$
|
35,521
|
|
|
$
|
206,257
|
|
Foreign exchange impact
|
21
|
|
|
(3,578
|
)
|
|
(3,557
|
)
|
|||
Balance as of December 31, 2016
|
170,757
|
|
|
31,943
|
|
|
202,700
|
|
|||
Foreign exchange impact
|
(72
|
)
|
|
(2,682
|
)
|
|
(2,754
|
)
|
|||
Balance as of December 31, 2017
|
$
|
170,685
|
|
|
$
|
29,262
|
|
|
$
|
199,946
|
|
|
2017
|
|
2016
|
|
Weighted
Average Life
|
||||
Customer lists
|
$
|
74,615
|
|
|
$
|
72,667
|
|
|
13.6
|
Non-competition agreements
|
964
|
|
|
943
|
|
|
4.1
|
||
Trade names
|
2,510
|
|
|
2,510
|
|
|
13.3
|
||
Patents
|
57
|
|
|
57
|
|
|
9.0
|
||
|
78,146
|
|
|
76,177
|
|
|
|
||
Less accumulated amortization
|
(50,583
|
)
|
|
(44,639
|
)
|
|
|
||
Intangible assets, net
|
$
|
27,563
|
|
|
$
|
31,538
|
|
|
|
2018
|
$
|
4,571
|
|
2019
|
4,338
|
|
|
2020
|
4,168
|
|
|
2021
|
3,862
|
|
|
2022
|
3,366
|
|
|
Thereafter
|
7,258
|
|
|
|
$
|
27,563
|
|
|
|
Employee Severance and Related Benefits
|
|
Lease and Contract Termination Costs
|
|
Other
|
|
Total
|
||||||||
Balance at December 31, 2016
|
|
$
|
1,349
|
|
|
$
|
17
|
|
|
$
|
200
|
|
|
$
|
1,566
|
|
Expenses
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Cash payments
|
|
(866
|
)
|
|
(17
|
)
|
|
(200
|
)
|
|
(1,082
|
)
|
||||
Balance at December 31, 2017
|
|
$
|
484
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
484
|
|
|
|
Employee Severance and Related Benefits
|
|
Lease and Contract Termination Costs
|
|
Other
(1)
|
|
Total
|
||||||||
December 31, 2015
|
|
$
|
284
|
|
|
$
|
75
|
|
|
$
|
—
|
|
|
$
|
359
|
|
Expenses
|
|
4,552
|
|
|
863
|
|
|
200
|
|
|
5,615
|
|
||||
Cash payments
|
|
(3,487
|
)
|
|
(921
|
)
|
|
—
|
|
|
(4,408
|
)
|
||||
December 31, 2016
|
|
$
|
1,349
|
|
|
$
|
17
|
|
|
$
|
200
|
|
|
$
|
1,566
|
|
(1)
|
Other charges relate to professional fees.
|
|
2017
|
|
2016
|
||||
Computer equipment
|
$
|
10,985
|
|
|
$
|
9,568
|
|
Software, including internal-use software
|
78,410
|
|
|
68,980
|
|
||
Office equipment and furniture
|
6,111
|
|
|
5,073
|
|
||
Leasehold improvements
|
3,576
|
|
|
3,040
|
|
||
|
99,082
|
|
|
86,661
|
|
||
Less accumulated depreciation
|
(62,368
|
)
|
|
(54,005
|
)
|
||
|
$
|
36,714
|
|
|
$
|
32,656
|
|
|
Operating Leases
|
||
2018
|
$
|
6,942
|
|
2019
|
5,298
|
|
|
2020
|
4,334
|
|
|
2021
|
2,861
|
|
|
2022
|
1,699
|
|
|
Thereafter
|
2,080
|
|
|
Total minimum lease payments
|
$
|
23,214
|
|
|
Year Ended December 31,
|
||||||||||
|
2017
|
|
2016
|
|
2015
|
||||||
Current income tax expense:
|
|
|
|
|
|
|
|
|
|||
Federal
|
$
|
4,680
|
|
|
$
|
282
|
|
|
$
|
—
|
|
State
|
236
|
|
|
159
|
|
|
324
|
|
|||
Foreign
|
4,471
|
|
|
6,430
|
|
|
5,021
|
|
|||
Total current income tax expense
|
9,387
|
|
|
6,871
|
|
|
5,345
|
|
|||
Deferred income tax expense (benefit):
|
|
|
|
|
|
|
|
|
|||
Federal
|
1,586
|
|
|
4,021
|
|
|
3,491
|
|
|||
State
|
1,545
|
|
|
418
|
|
|
465
|
|
|||
Foreign
|
613
|
|
|
(355
|
)
|
|
2,991
|
|
|||
Total deferred income tax expense (benefit)
|
3,744
|
|
|
4,084
|
|
|
6,947
|
|
|||
Income tax expense
|
$
|
13,131
|
|
|
$
|
10,955
|
|
|
$
|
12,292
|
|
|
Year Ended December 31,
|
||||||||||
|
2017
|
|
2016
|
|
2015
|
||||||
Tax expense (benefit) at U.S. federal income tax rate
|
$
|
11,243
|
|
|
$
|
5,364
|
|
|
$
|
(7,270
|
)
|
State income taxes, net of federal income tax effect
|
1,028
|
|
|
449
|
|
|
500
|
|
|||
Federal and state deferred tax rate change
|
(5,375
|
)
|
|
—
|
|
|
—
|
|
|||
Transition tax
|
5,323
|
|
|
—
|
|
|
—
|
|
|||
Effect of non-US operations
|
(2,143
|
)
|
|
(501
|
)
|
|
(254
|
)
|
|||
Nontaxable contingent liability fair value changes and goodwill impairment
|
237
|
|
|
3,578
|
|
|
13,083
|
|
|||
Research and development credit
|
(38
|
)
|
|
(297
|
)
|
|
(422
|
)
|
|||
Change in valuation allowances
|
2,103
|
|
|
2,206
|
|
|
5,173
|
|
|||
Prior year provision to return adjustment
|
(424
|
)
|
|
(137
|
)
|
|
372
|
|
|||
Write-off of deferred taxes and tax receivables
|
263
|
|
|
—
|
|
|
858
|
|
|||
Nondeductible expense and other
|
914
|
|
|
293
|
|
|
252
|
|
|||
Income tax expense (benefit)
|
$
|
13,131
|
|
|
$
|
10,955
|
|
|
$
|
12,292
|
|
|
December 31,
|
||||||
|
2017
|
|
2016
|
||||
Deferred tax assets:
|
|
|
|
|
|||
Inventory reserve
|
$
|
700
|
|
|
$
|
902
|
|
Other reserves and allowances
|
52
|
|
|
4,233
|
|
||
Income tax basis in excess of financial statement basis in intangible assets
|
1,669
|
|
|
3,394
|
|
||
Deductible stock-based compensation
|
3,760
|
|
|
4,693
|
|
||
Net operating loss carryforward
|
13,530
|
|
|
9,496
|
|
||
Tax credit carryforwards
|
428
|
|
|
2,758
|
|
||
|
20,139
|
|
|
25,476
|
|
||
Valuation allowance
|
(10,711
|
)
|
|
(8,292
|
)
|
||
Total deferred tax assets
|
9,428
|
|
|
17,184
|
|
||
|
|
|
|
||||
Deferred tax liabilities:
|
|
|
|
|
|||
Prepaid & other expenses
|
(265
|
)
|
|
(139
|
)
|
||
Fixed assets
|
(4,946
|
)
|
|
(5,913
|
)
|
||
Intangible assets
|
(15,953
|
)
|
|
(21,392
|
)
|
||
Total deferred tax liabilities
|
(21,164
|
)
|
|
(27,444
|
)
|
||
|
|
|
|
||||
Net deferred tax liability
|
$
|
(11,736
|
)
|
|
$
|
(10,260
|
)
|
|
|
|
|
|
Uncertain tax positions
|
||
Balance at December 31, 2016
|
$
|
280
|
|
Additions based on tax positions related to the current year
|
—
|
|
|
Subtractions based on tax positions related to the current year
|
(35
|
)
|
|
Interest and penalties
|
8
|
|
|
Balance at December 31, 2017
|
$
|
253
|
|
•
|
Level 1: Inputs are quoted prices in active markets for identical assets or liabilities.
|
•
|
Level 2: Inputs are quoted prices for similar assets or liabilities in an active market, quoted prices for identical or similar assets or liabilities in markets that are not active and inputs other than quoted prices that are observable and market-corroborated inputs, which are derived principally from or corroborated by observable market data.
|
•
|
Level 3: Inputs that are derived from valuation techniques in which one or more significant inputs or value drivers are unobservable.
|
At December 31, 2016
|
Total Fair Value
Measurement
|
|
Quoted Prices in
Active Markets for
Identical Assets
(Level 1)
|
|
Significant Other
Observable Inputs
(Level 2)
|
|
Significant
Unobservable Inputs
(Level 3)
|
||||||||
Liabilities:
|
|
|
|
|
|
|
|
|
|
|
|
||||
Contingent consideration
|
$
|
19,283
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
19,283
|
|
|
Fair Value Measurements at
Reporting Date Using
Significant Unobservable Inputs
(Level 3)
|
||
|
Contingent Consideration
|
||
Balance at December 31, 2015
|
$
|
22,162
|
|
Contingent consideration payments paid in cash
|
(11,374
|
)
|
|
Contingent consideration payments paid in stock
|
(2,012
|
)
|
|
Change in fair value
(1)
|
10,417
|
|
|
Reclass to Due to seller
|
402
|
|
|
Foreign exchange impact
(2)
|
(312
|
)
|
|
|
|
|
|
Balance at December 31, 2016
|
19,283
|
|
|
Contingent consideration payments paid in cash
|
(15,345
|
)
|
|
Contingent consideration payments paid in stock
|
(4,678
|
)
|
|
Change in fair value
(1)
|
677
|
|
|
Foreign exchange impact
(2)
|
63
|
|
|
|
|
||
Balance at December 31, 2017
|
$
|
—
|
|
(1)
|
Adjustments to original contingent consideration obligations recorded were the result of using revised financial forecasts and updated fair value measurements, see note 3. These changes are recognized within operating expenses on the consolidated statements of operations.
|
(2)
|
Changes in the contingent consideration liability which are caused by foreign exchange rate fluctuations are recognized in other comprehensive income.
|
|
Year Ended December 31,
|
||||||||||
|
2017
|
|
2016
|
|
2015
|
||||||
Numerator:
|
|
|
|
|
|
||||||
Net income (loss)
|
$
|
18,979
|
|
|
$
|
4,370
|
|
|
$
|
(33,063
|
)
|
|
|
|
|
|
|
||||||
Denominator:
|
|
|
|
|
|
|
|
|
|||
Denominator for basic earnings (loss) per share—weighted-average shares outstanding
|
53,851
|
|
|
53,607
|
|
|
52,791
|
|
|||
Effect of dilutive securities:
|
|
|
|
|
|
|
|
|
|||
Employee stock options and restricted common shares
|
1,093
|
|
|
728
|
|
|
—
|
|
|||
Contingently issuable shares
|
—
|
|
|
125
|
|
|
—
|
|
|||
Denominator for diluted earnings (loss) per share
|
54,944
|
|
|
54,460
|
|
|
52,791
|
|
|||
|
|
|
|
|
|
||||||
Basic earnings (loss) per share
|
$
|
0.35
|
|
|
$
|
0.08
|
|
|
$
|
(0.63
|
)
|
Diluted earnings (loss) per share
|
$
|
0.35
|
|
|
$
|
0.08
|
|
|
$
|
(0.63
|
)
|
|
Outstanding
Options
|
|
Weighted-
Average
Exercise Price
|
|
Aggregate
Intrinsic Value
|
|||||
Outstanding at December 31, 2014
|
4,046
|
|
|
$
|
8.35
|
|
|
$
|
4,725
|
|
Granted
|
975
|
|
|
6.87
|
|
|
—
|
|
||
Exercised
|
(405
|
)
|
|
2.95
|
|
|
1,604
|
|
||
Forfeited
|
(556
|
)
|
|
9.58
|
|
|
—
|
|
||
|
|
|
|
|
|
|
|
|
||
Outstanding at December 31, 2015
|
4,060
|
|
|
8.37
|
|
|
2,760
|
|
||
Granted
|
1,348
|
|
|
8.15
|
|
|
—
|
|
||
Exercised
|
(420
|
)
|
|
6.27
|
|
|
4,455
|
|
||
Forfeited
|
(227
|
)
|
|
10.20
|
|
|
—
|
|
||
|
|
|
|
|
|
|
|
|
||
Outstanding at December 31, 2016
|
4,761
|
|
|
8.40
|
|
|
8,655
|
|
||
Granted
|
568
|
|
|
10.73
|
|
|
—
|
|
||
Exercised
|
(428
|
)
|
|
7.85
|
|
|
1,300
|
|
||
Forfeited
|
(467
|
)
|
|
10.39
|
|
|
539
|
|
||
|
|
|
|
|
|
|||||
Outstanding at December 31, 2017
|
4,434
|
|
|
$
|
8.57
|
|
|
$
|
9,340
|
|
|
|
|
|
|
|
|
|
|
||
Options vested and exercisable at December 31, 2017
|
2,505
|
|
|
$
|
8.62
|
|
|
$
|
5,860
|
|
|
Options Granted
|
|
Weighted-Average
Fair Value
|
|
Exercise Prices
|
|||
2015
|
975
|
|
|
$
|
3.39
|
|
|
$6.21 - $8.20
|
2016
|
1,348
|
|
|
$
|
3.38
|
|
|
$6.99 - $9.20
|
2017
|
568
|
|
|
$
|
4.42
|
|
|
$9.32 - $11.47
|
|
2017
|
|
2016
|
|
2015
|
|||
Dividend yield
|
—
|
|
|
—
|
|
|
—
|
|
Risk-free interest rate
|
1.98%-2.34%
|
|
|
1.53%-2.03%
|
|
|
1.92%-2.12%
|
|
Expected life
|
6.5 years
|
|
|
6.5 years
|
|
|
6 years
|
|
Volatility
|
36.0%-38.0%
|
|
|
38.0%-50.0%
|
|
|
50.0
|
%
|
Options Outstanding
|
|
Options Vested
|
|||||||||||||
Exercise Price
|
Number
Outstanding
|
|
Weighted-Average Life Remaining (Years)
|
|
Weighted-
Average
Exercise Price
|
|
Number
Exercisable
|
|
Weighted-
Average
Exercise Price
|
||||||
$0.00 - $4.36
|
64
|
|
|
1.29
|
|
$
|
3.11
|
|
|
64
|
|
|
$
|
3.11
|
|
$4.37 - $7.95
|
2,189
|
|
|
5.23
|
|
$
|
6.68
|
|
|
1,320
|
|
|
$
|
6.43
|
|
$7.96 - $11.97
|
1,613
|
|
|
7.50
|
|
$
|
9.55
|
|
|
552
|
|
|
$
|
9.32
|
|
$11.98 - $15.05
|
568
|
|
|
2.94
|
|
$
|
13.65
|
|
|
568
|
|
|
$
|
13.65
|
|
|
4,434
|
|
|
5.70
|
|
$
|
8.57
|
|
|
2,505
|
|
|
$
|
8.62
|
|
|
Outstanding
Restricted
Common Shares
|
|
Weighted-
Average Grant-
Date Fair Value
|
|||
Nonvested Restricted Common shares at December 31, 2014
|
1,090
|
|
|
$
|
8.92
|
|
Granted
|
688
|
|
|
6.90
|
|
|
Vested and transferred to unrestricted common stock
|
(465
|
)
|
|
8.40
|
|
|
Forfeited
|
(356
|
)
|
|
8.19
|
|
|
|
|
|
|
|
|
|
Nonvested Restricted Common shares at December 31, 2015
|
957
|
|
|
7.66
|
|
|
Granted
|
559
|
|
|
8.24
|
|
|
Vested and transferred to unrestricted common stock
|
(429
|
)
|
|
7.71
|
|
|
Forfeited
|
(78
|
)
|
|
8.04
|
|
|
|
|
|
|
|
|
|
Nonvested Restricted Common shares at December 31, 2016
|
1,009
|
|
|
7.92
|
|
|
Granted
|
332
|
|
|
11.00
|
|
|
Vested and transferred to unrestricted common stock
|
(403
|
)
|
|
8.28
|
|
|
Forfeited
|
(166
|
)
|
|
8.51
|
|
|
Nonvested Restricted Common shares at December 31, 2017
|
772
|
|
|
$
|
8.98
|
|
|
Outstanding
Performance Share Units |
|
Weighted-
Average Grant-
Date Fair Value
|
|||
Nonvested Performance Share Units at December 31, 2016
|
—
|
|
|
$
|
—
|
|
Granted
|
151,822
|
|
|
11.10
|
|
|
Forfeited
|
(23,588
|
)
|
|
11.10
|
|
|
Nonvested Performance Share Units at December 31, 2017
|
128,234
|
|
|
$
|
11.10
|
|
|
|
Year Ended December 31,
|
||||||||||
|
|
2017
|
|
2016
|
|
2015
|
||||||
Cash paid for:
|
|
|
|
|
|
|
||||||
Interest
|
|
$
|
4,072
|
|
|
$
|
4,338
|
|
|
$
|
4,306
|
|
Income taxes
|
|
9,838
|
|
|
5,485
|
|
|
3,863
|
|
|||
|
|
$
|
13,910
|
|
|
$
|
9,823
|
|
|
$
|
8,169
|
|
|
|
|
|
|
|
|
||||||
Noncash investing and financing activities:
|
|
|
|
|
|
|
||||||
Shares issued as payment of contingent consideration
|
|
$
|
4,678
|
|
|
$
|
2,012
|
|
|
$
|
1,570
|
|
|
|
$
|
4,678
|
|
|
$
|
2,012
|
|
|
$
|
1,570
|
|
|
North America
|
|
International
|
|
Other
(2)
|
|
Total
|
||||||||
Fiscal 2017:
|
|
|
|
|
|
|
|
|
|
|
|
||||
Revenue from third parties
|
$
|
776,400
|
|
|
$
|
359,856
|
|
|
$
|
—
|
|
|
$
|
1,136,256
|
|
Revenue from other segments
|
5,469
|
|
|
15,137
|
|
|
(20,606
|
)
|
|
—
|
|
||||
Total revenue
|
781,869
|
|
|
374,993
|
|
|
(20,606
|
)
|
|
1,136,256
|
|
||||
Adjusted EBITDA
(1)
|
78,079
|
|
|
20,063
|
|
|
(35,867
|
)
|
|
62,275
|
|
||||
Fiscal 2016:
|
|
|
|
|
|
|
|
|
|
|
|||||
Revenue from third parties
|
734,164
|
|
|
356,540
|
|
|
—
|
|
|
1,090,704
|
|
||||
Revenue from other segments
|
6,029
|
|
|
17,526
|
|
|
(23,555
|
)
|
|
—
|
|
||||
Total revenue
|
740,193
|
|
|
374,066
|
|
|
(23,555
|
)
|
|
1,090,704
|
|
||||
Adjusted EBITDA
(1)
|
67,969
|
|
|
22,576
|
|
|
(31,392
|
)
|
|
59,153
|
|
||||
Fiscal 2015:
|
|
|
|
|
|
|
|
|
|
|
|||||
Revenue from third parties
|
708,532
|
|
|
320,821
|
|
|
—
|
|
|
1,029,353
|
|
||||
Revenue from other segments
|
7
|
|
|
8,691
|
|
|
(8,698
|
)
|
|
—
|
|
||||
Total revenue
|
708,539
|
|
|
329,512
|
|
|
(8,698
|
)
|
|
1,029,353
|
|
||||
Adjusted EBITDA
(1)
|
63,744
|
|
|
14,936
|
|
|
(27,881
|
)
|
|
50,799
|
|
(1)
|
Adjusted EBITDA, which represents income from operations with the addition of depreciation and amortization, stock-based compensation expense, income/expense related to changes in the fair value of contingent consideration liabilities, goodwill and intangible asset impairment charges, restructuring and other charges, secured assets reserves, professional fees related to ASC 606 implementation, business development realignment, CEO search costs, and Czech currency impact on procurement margin is considered a non-GAAP financial measure under SEC regulations. Income from operations is the most directly comparable financial measure calculated in accordance with GAAP. The Company presents this measure as supplemental information to help investors better understand trends in its business results over time. The Company's management team uses Adjusted EBITDA to evaluate the performance of the business. Adjusted EBITDA is not equivalent to any measure of performance required to be reported under GAAP, nor should this data be considered an indicator of the Company's overall financial performance and liquidity. Moreover, the Adjusted EBITDA definition the Company uses may not be comparable to similarly titled measures reported by other companies.
|
(2)
|
Other consists of intersegment eliminations, shared service activities and unallocated corporate expenses.
|
|
Year Ended December 31,
|
||||||||||
|
2017
|
|
2016
|
|
2015
|
||||||
Adjusted EBITDA
|
$
|
62,275
|
|
|
$
|
59,153
|
|
|
$
|
50,799
|
|
Depreciation and amortization
|
(13,390
|
)
|
|
(17,916
|
)
|
|
(17,472
|
)
|
|||
Stock-based compensation
|
(6,820
|
)
|
|
(5,572
|
)
|
|
(5,873
|
)
|
|||
Change in fair value of contingent consideration
|
(677
|
)
|
|
(10,417
|
)
|
|
270
|
|
|||
Goodwill impairment charge
|
—
|
|
|
—
|
|
|
(37,539
|
)
|
|||
Intangible asset impairment charges
|
—
|
|
|
(70
|
)
|
|
(202
|
)
|
|||
Restructuring and other charges
|
—
|
|
|
(5,615
|
)
|
|
(1,053
|
)
|
|||
Business development realignment
|
(715
|
)
|
|
—
|
|
|
—
|
|
|||
Professional fees related to ASC 606 implementation
|
(829
|
)
|
|
—
|
|
|
—
|
|
|||
CEO search costs
|
(454
|
)
|
|
—
|
|
|
—
|
|
|||
Czech currency impact on procurement margin
|
(860
|
)
|
|
—
|
|
|
—
|
|
|||
Secured asset reserve
(1)
|
—
|
|
|
—
|
|
|
(2,023
|
)
|
|||
Total other expense
|
(6,420
|
)
|
|
(4,238
|
)
|
|
(7,678
|
)
|
|||
Income (loss) before income taxes
|
$
|
32,110
|
|
|
$
|
15,325
|
|
|
$
|
(20,771
|
)
|
(1)
|
The Company accrued a reserve of
$2.0 million
in
2015
, respectively, on inventory in which it holds a security interest. The inventory was procured for a former client.
|
|
December 31, 2017
|
|
December 31, 2016
|
||||
North America
|
$
|
394,052
|
|
|
$
|
368,149
|
|
International
|
226,065
|
|
|
202,007
|
|
||
Other
|
19,902
|
|
|
20,843
|
|
||
Total Assets
|
$
|
640,019
|
|
|
$
|
590,999
|
|
|
Year Ended December 31, 2017
|
||||||||||||||
|
First
Quarter
|
|
Second
Quarter
|
|
Third
Quarter
|
|
Fourth
Quarter
|
||||||||
Revenue
|
$
|
267,390
|
|
|
$
|
279,530
|
|
|
$
|
288,386
|
|
|
$
|
300,950
|
|
Gross profit
|
64,277
|
|
|
70,227
|
|
|
72,519
|
|
|
71,311
|
|
||||
Net income
|
5,456
|
|
|
4,493
|
|
|
7,528
|
|
|
1,499
|
|
||||
Net income per share:
|
|
|
|
|
|
|
|
|
|
|
|
||||
Basic
|
$
|
0.10
|
|
|
$
|
0.08
|
|
|
$
|
0.14
|
|
|
$
|
0.03
|
|
Diluted
|
$
|
0.10
|
|
|
$
|
0.08
|
|
|
$
|
0.14
|
|
|
$
|
0.03
|
|
|
Year Ended December 31, 2016
|
||||||||||||||
|
First
Quarter
|
|
Second
Quarter
|
|
Third
Quarter
|
|
Fourth
Quarter
|
||||||||
Revenue
|
$
|
271,073
|
|
|
$
|
269,220
|
|
|
$
|
279,993
|
|
|
$
|
270,418
|
|
Gross profit
|
61,946
|
|
|
65,094
|
|
|
67,781
|
|
|
68,727
|
|
||||
Net income (loss)
|
(2,693
|
)
|
|
(2,324
|
)
|
|
4,341
|
|
|
5,047
|
|
||||
Net income (loss) per share:
|
|
|
|
|
|
|
|
|
|
|
|
||||
Basic
|
$
|
(0.05
|
)
|
|
$
|
(0.04
|
)
|
|
$
|
0.08
|
|
|
$
|
0.09
|
|
Diluted
|
$
|
(0.05
|
)
|
|
$
|
(0.04
|
)
|
|
$
|
0.08
|
|
|
$
|
0.09
|
|
Description
|
Balance at
Beginning of
Period
|
|
Charged to
Expense
|
|
(Uncollectible
Accounts
Written Off,
Net of
Recoveries)
|
|
Balance at End of Period
|
||||||||
Fiscal year ended December 31, 2017 Allowance for doubtful accounts
|
$
|
2,622
|
|
|
$
|
454
|
|
|
$
|
457
|
|
|
$
|
3,534
|
|
Fiscal year ended December 31, 2016 Allowance for doubtful accounts
|
$
|
1,231
|
|
|
$
|
2,171
|
|
|
$
|
(780
|
)
|
|
$
|
2,622
|
|
Fiscal year ended December 31, 2015 Allowance for doubtful accounts
|
$
|
2,685
|
|
|
$
|
1,949
|
|
|
$
|
(3,403
|
)
|
|
$
|
1,231
|
|
Item 9.
|
Changes in and Disagreements with Accountants on Accounting and Financial Disclosure
|
Item 9A.
|
Controls and Procedures
|
•
|
pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the Company;
|
•
|
provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with US GAAP, and that the receipts and expenditures of the Company are being made only in accordance with appropriate authorization of management and the board of directors; and
|
•
|
provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of the Company’s assets that could have a material effect on the financial statements.
|
Item 9B.
|
Other Information
|
Item 10.
|
Directors, Executive Officers and Corporate Governance
|
Item 11.
|
Executive Compensation
|
Item 12.
|
Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters
|
Plan Category
|
Number of Securities to be Issued Upon Exercise of Outstanding Options (a)
|
|
Weighted Average Exercise Price of Outstanding Options
|
|
Number of Securities Remaining Available for Future Issuance Under Equity Compensation Plans (Excluding Securities Reflected in Column (a))
|
|
||||
Equity compensation plans approved by security holders
(1)
|
4,434
|
|
|
$
|
8.57
|
|
|
1,838
|
|
(2)
|
Equity compensation plans not approved by security holders
(3)
|
—
|
|
|
—
|
|
|
—
|
|
|
|
Total
|
4,434
|
|
|
$
|
8.57
|
|
|
1,838
|
|
|
(1)
|
Includes our 2004 Unit Option Plan, which was merged with our 2006 Stock Incentive Plan.
|
(2)
|
Includes shares remaining available for future issuance under our 2006 Stock Incentive Plan.
|
(3)
|
There are no equity compensation plans in place not approved by our stockholders.
|
Item 13.
|
Certain Relationships and Related Transactions and Director Independence
|
Item 14.
|
Principal Accountant Fees and Services
|
Item 15.
|
Exhibits, Financial Statement Schedules
|
Exhibit No.
|
|
Description
|
3.1
|
|
|
|
|
|
3.2
|
|
|
|
|
|
4.1
|
|
|
|
|
|
10.1
|
|
|
|
|
|
10.2
|
|
|
|
|
|
10.3
|
|
|
|
|
|
10.4
|
|
|
|
|
|
10.5
|
|
|
|
|
|
10.6
|
|
|
|
|
|
10.7
|
|
|
|
|
|
10.8
|
|
|
|
|
|
10.9
|
|
|
|
|
|
10.10
|
|
|
|
|
|
10.11
|
|
|
|
|
|
10.12
|
|
|
|
|
10.13
|
|
|
|
|
|
10.14
|
|
|
|
|
|
10.15
|
|
|
|
|
|
10.16
|
|
|
|
|
|
10.17
|
|
|
|
|
|
10.18
|
|
|
|
|
|
10.19
|
|
|
|
|
|
10.20
|
|
|
|
|
|
10.21
|
|
|
|
|
|
21.1
|
|
|
|
|
|
23.1
|
|
|
|
|
|
31.1
|
|
|
|
|
|
31.2
|
|
|
|
|
|
32.1
|
|
|
|
|
|
101.INS
|
|
XBRL Instance Document
|
|
|
|
101.SCH
|
|
XBRL Taxonomy Extension Schema Document
|
|
|
|
101.CAL
|
|
XBRL Taxonomy Calculation Linkbase Document
|
|
|
|
101.LAB
|
|
XBRL Taxonomy Label Linkbase Document
|
|
|
|
101.PRE
|
|
XBRL Taxonomy Presentation Linkbase Document
|
|
|
|
101.DEF
|
|
XBRL Taxonomy Extension Definition Linkbase Document
|
(1)
|
|
Incorporated by reference to Form S-1 Registration Statement (File No. 333-139811).
|
(2)
|
|
Incorporated by reference to Appendix A to the 2016 Proxy Statement on Schedule 14A filed on April 18, 2016.
|
(3)
|
|
Incorporated by reference to Current Report on Form 8-K filed on April 9, 2015.
|
(4)
|
|
Incorporated by reference to Appendix B to the 2016 Proxy Statement on Schedule 14A filed on April 18, 2016.
|
(5)
|
|
Incorporated by reference to Current Report on Form 8-K filed on December 20, 2013.
|
(6)
|
|
Incorporated by reference to Quarterly Report on Form 10-Q filed on August 6, 2010.
|
(7)
|
|
Incorporated by reference to Current Report on Form 8-K filed on April 26, 2012.
|
(8)
|
|
Incorporated by reference to Current Report on Form 8-K filed on October 1, 2014.
|
(9)
|
|
Incorporated by reference to Current Report on Form 8-K filed on July 6, 2015.
|
(10)
|
|
Incorporated by reference to Annual Report on Form 10-K filed on March 9, 2017.
|
(11)
|
|
Incorporated by reference to Current Report on Form 8-K filed on June 5, 2017.
|
(12)
|
|
Incorporated by reference to Current Report on Form 8-K filed on December 7, 2017.
|
(13)
|
|
Incorporated by reference to Current Report on Form 8-K filed on February 5, 2018.
|
†
|
|
Management contract or compensatory plan or arrangement of the Company.
|
|
INNERWORKINGS, INC.
|
|
|
|
|
|
By:
|
/ S / ERIC D. BELCHER
|
|
|
Eric D. Belcher
|
|
Title:
|
Chief Executive Officer and
|
|
|
President
|
Signature
|
|
Title
|
|
Date
|
|
|
|
|
|
/ S / ERIC D. BELCHER
|
|
President, Chief Executive Officer and Director
|
|
March 16, 2018
|
Eric D. Belcher
|
|
(principal executive officer)
|
|
|
|
|
|
|
|
/ S / CHARLES HODGKINS
|
|
Interim Chief Financial Officer (principal financial officer)
|
|
March 16, 2018
|
Charles Hodgkins
|
|
|
|
|
|
|
|
|
|
/ S / WILLIAM C. ATKINS
|
|
Global Controller (principal accounting officer)
|
|
March 16, 2018
|
William C. Atkins
|
|
|
|
|
|
|
|
|
|
/ S / JACK M. GREENBERG
|
|
Chairman of the Board
|
|
March 16, 2018
|
Jack M. Greenberg
|
|
|
|
|
|
|
|
|
|
/ S / LINDA S. WOLF
|
|
Director
|
|
March 16, 2018
|
Linda S. Wolf
|
|
|
|
|
|
|
|
|
|
/ S / CHARLES K. BOBRINSKOY
|
|
Director
|
|
March 16, 2018
|
Charles K. Bobrinskoy
|
|
|
|
|
|
|
|
|
|
/ S / JULIE M. HOWARD
|
|
Director
|
|
March 16, 2018
|
Julie M. Howard
|
|
|
|
|
|
|
|
|
|
/ S / DAVID FISHER
|
|
Director
|
|
March 16, 2018
|
David Fisher
|
|
|
|
|
|
|
|
|
|
/ S / J. PATRICK GALLAGHER
|
|
Director
|
|
March 16, 2018
|
J. Patrick Gallagher
|
|
|
|
|
Pricing Tier
|
Consolidated
Leverage Ratio
|
Commitment Fee
|
Eurodollar Rate Loans and Letter of Credit Fees
|
Base Rate Loans
|
1
|
>
3.00 to 1.0
|
0.450%
|
3.25%
|
2.25%
|
2
|
>
2.25 to 1.0 but < 3.00 to 1.0
|
0.400%
|
2.15%
|
1.15%
|
3
|
>
2.00 to 1.0 but < 2.25 to 1.0
|
0.375%
|
1.90%
|
0.90%
|
4
|
>
1.75 to 1.0 but < 2.00 to 1.0
|
0.350%
|
1.65%
|
0.65%
|
5
|
>
1.50 to 1.0 but < 1.75 to 1.0
|
0.350%
|
1.40%
|
0.40%
|
6
|
< 1.50 to 1.0
|
0.350%
|
1.15%
|
0.15%
|
Calendar Year
|
March 31
|
June 30
|
September 30
|
December 31
|
2013
|
N/A
|
N/A
|
N/A
|
3.50 to 1.0
|
2014
|
3.75 to 1.0
|
3.50 to 1.0
|
3.50 to 1.0
|
3.00 to 1.0
|
thereafter
|
3.00 to 1.0
|
3.00 to 1.0
|
3.00 to 1.0
|
3.00 to 1.0
|
Name of Subsidiary
|
|
Place of Formation
|
United States Subsidiaries
|
|
|
DB Studios, Inc.
|
|
California
|
E-Corporate Printers, Inc.
|
|
Delaware
|
EYELEVEL, Inc.
|
|
Oregon
|
INWK EMEA, LLC
|
|
Delaware
|
INWK Holdings LLC
|
|
Delaware
|
InnerWorkings Luxembourg IP S.à r.l. LLC
|
|
Delaware
|
Print Systems, Inc.
|
|
Michigan
|
Screened Images, Inc.
|
|
New Jersey
|
Traderunner LLC
|
|
Delaware
|
|
|
|
Foreign Subsidiaries
|
|
|
INWK Costa Rica S.A.
|
|
Costa Rica
|
INWK de El Salvador, S. de R.L. De C.V.
|
|
El Salvador
|
INWK de Guatemala S.A.
|
|
Guatemala
|
Cirqit De Honduras S. de R.L. De C.V.
|
|
Honduras
|
InnerWorkings Servicios, S.A.
|
|
Ecuador
|
Cirqit Servicios de Impresion S.A.
|
|
Chile
|
Innerworkings Servicios Ltda.
|
|
Chile
|
Ensco 667 Limited
|
|
United Kingdom
|
Eyelevel Distribution Services s.r.o.
|
|
Czech Republic
|
EYELEVEL Limited
|
|
Hong Kong
|
EYELEVEL, LLC
|
|
Russia
|
EYELEVEL Design Ltda
|
|
Brazil
|
EYELEVEL Sociedad de Responsibilidad Limitada de Capital Variable
|
|
Mexico
|
EYELEVEL Solutions Pty Ltd
|
|
Australia
|
EYELEVEL Solutions LTD.
|
|
United Kingdom
|
EYELEVEL s.r.o.
|
|
Czech Republic
|
Taizhou Eyelevel Store Fixtures Co., Ltd.
|
|
China
|
Guangzhou InnerWorkings Trading Company Limited
|
|
China
|
Iconomedia Sarl
|
|
France
|
InnerWorkings Andina S.A.S.
|
|
Colombia
|
InnerWorkings IWARG S.A.
|
|
Argentina
|
InnerWorkings Asia Pacific Limited
|
|
Hong Kong
|
InnerWorkings Belgium SPRL/BVBA
|
|
Belgium
|
InnerWorkings Brasil Gerenciamento de Impressoes Ltda.
|
|
Brazil
|
InnerWorkings Canada, Inc.
|
|
Canada
|
InnerWorkings Comercio de Produtos de Marketing Ltda.
|
|
Brazil
|
InnerWorkings Deutschland GmbH
|
|
Germany
|
InnerWorkings Danmark A/S
|
|
Denmark
|
InnerWorkings Mena DMCC
|
|
Dubai
|
InnerWorkings EMEA Holdings LP
|
|
United Kingdom
|
InnerWorkings Europe Limited
|
|
United Kingdom
|
InnerWorkings France SAS
|
|
France
|
InnerWorkings Global Limited
|
|
United Kingdom
|
InnerWorkings Hellas M.I.K.E
|
|
Greece
|
Production Graphics Central Europe Ltd.
|
|
Hungary
|
InnerWorkings India Private Limited
|
|
India
|
InnerWorkings Instanbul Grafik, Reklam, Iletisim ve Matbaa Hizmetleri Ticaret Limited Sirketi
|
|
Turkey
|
InnerWorkings Iberica S.L.
|
|
Spain
|
InnerWorkings Italia S.R.L.
|
|
Italy
|
InnerWorkings Japan KK
|
|
Japan
|
InnerWorkings Korea Ltd.
|
|
South Korea
|
Innerworkings LATAM SA
|
|
Venezuela
|
InnerWorkings Latin America, S.L.
|
|
Spain
|
InnerWorkings Luxembourg IP S.à r.l.
|
|
Luxembourg
|
InnerWorkings Nederland BV
|
|
Netherlands
|
InnerWorkings (NI) Limited
|
|
Ireland
|
InnerWorkings Peru S.A.C.
|
|
Peru
|
InnerWorkings Polska Spolka z Ograniczona Odpowiedzialnoscia
|
|
Poland
|
InnerWorkings Portugal, Unipessoal LDA
|
|
Portugal
|
InnerWorkings Rus LLC
|
|
Russia
|
InnerWorkings Singapore Private Limited
|
|
Singapore
|
InnerWorkings South Africa (Pty) Ltd.
|
|
South Africa
|
InnerWorkings Trading & Commerce (Shanghai) Co. Ltd.
|
|
China
|
InnerWorkings Turkey Baski Malzemeleri Ticaret Limited Şirketi
|
|
Turkey
|
InnerWorkings UK Limited (Etrinsic Limited French Branch)
|
|
France
|
InnerWorkings Ukraine LLC
|
|
Ukraine
|
INWK Uruguay S.A.
|
|
Uruguay
|
INWK Mexico S de R.L. De C.V.
|
|
Mexico
|
INWK Panama S.A.
|
|
Panama
|
INWK Puerto Rico Inc.
|
|
Puerto Rico
|
INWK Republica Dominicana S.R.L.
|
|
Dominican Republic
|
InnerWorkings Switzerland GmbH
|
|
Switzerland
|
Mania Group Holdings Limited
|
|
United Kingdom
|
Merchandise Mania Limited
|
|
United Kingdom
|
PN-IW Investor (Pty) Limited South Africa
|
|
South Africa
|
PPA (International) Limited
|
|
Hong Kong
|
Professional Packaging Services (Holdings) Limited
|
|
United Kingdom
|
Professional Packaging Services Limited
|
|
United Kingdom
|
Productions Graphics UK Limited
|
|
United Kingdom
|
Traderunner Inc.
|
|
Puerto Rico
|
Xiamen Eyelevel Commercial Equipments Co., Ltd.
|
|
China
|
Xpando Media (Ireland) Ltd. d/b/a Innerworkings Ireland
|
|
Ireland
|
By:
|
/ S / ERIC D. BELCHER
|
|
|
Eric D. Belcher
|
|
|
Chief Executive Officer
|
|
By:
|
/ S / CHARLES HODGKINS
|
|
|
Charles Hodgkins
|
|
|
Interim Chief Financial Officer
|
|
By:
|
/ S / ERIC D. BELCHER
|
|
|
Eric D. Belcher
|
|
|
Chief Executive Officer
|
|
|
|
|
By:
|
/ S / CHARLES HODGKINS
|
|
|
Charles Hodgkins
|
|
|
Interim Chief Financial Officer
|
|