Top 40 distributor InnerWorkings (asi/168860) reported late Thursday that its total third-quarter sales dropped 6% to $270.9 million, continuing a 2018 trend in which revenue through the first nine months of the year was down about $5.6 million to $827.35 million. 

Rich Stoddart, CEO of InnerWorkings

The Q3 sales decline was coupled with a net loss for the quarter of $44.94 million, or a loss of $0.87 per diluted share. That compared to net income of $7.1 million, or positive $0.13 per diluted share, in last year’s third quarter. For the year’s first nine months ended Sept. 30, InnerWorkings posted a total net loss of approximately $47 million, or a loss of $0.90 per share. During the comparable period in 2017, InnerWorkings had net income of $17.16 million, or positive $0.31 per diluted share.

According to company financial data, InnerWorkings’ non-GAAP diluted earnings per share for Q3 were $0.04, down from $0.25 in the third quarter of 2017. In another decline, non-GAAP adjusted EBITDA tallied $12.2 million in this year’s third quarter, a $6 million dip vs. 2017.

Even so, InnerWorkings executives are confident that there are better days ahead. “While we’re experiencing greater revenue declines than expected in transactional and small accounts, we’re encouraged by the momentum we continue to build in new enterprise wins,” said CEO Rich Stoddart. “With this momentum, we fully expect to return to our long-term pattern of organic growth in 2019.”

Interim CFO Chip Hodgkins

With an eye to that better future, Interim Chief Financial Officer Chip Hodgkins said that InnerWorkings had implemented $11 million of its planned $20 million in cost reduction measures as of Oct. 1. “We’re focused on implementing the remaining $9 million and we believe additional cost reductions beyond the original scope are possible and necessary to drive shareholder value,” Hodgkins said. “In partnership with third-party experts, we’re also scoping further profit enhancement initiatives to drive near-term sustainable margin improvement and will provide an update in tandem with our fourth quarter results.”

While working toward a turnaround, near-term performance through the end of 2018 is expected to be downbeat. In its Q3 earnings announcement, InnerWorkings said it’s lowering revenue guidance this year to $1.120 billion to $1.135 billion, down from a previous range of $1.155 billion to $1.190 billion. The distributor is also lowering non-GAAP adjusted EBITDA to $43 million to $46 million, a drop from the previously forecast $50 to $53 million. The company anticipates 2018 non-GAAP diluted earnings per share to be $0.17 to $0.20; formerly, InnerWorkings gave a guidance of $0.30 to $0.33.

Counselor ranks InnerWorkings as the 15th largest distributor in the industry with estimated 2017 North American promo products sales of $147 million.