Counselor Top 40 distributor InnerWorkings (asi/231438), a provider of print and promotional products, announced this week that it's cutting its 2013 sales forecast after losing significant work from an unnamed major client – news that caused worry among investors as the company's shares dropped more than 20% yesterday. In a statement, InnerWorkings said Tuesday it now expects 2013 sales between $900 million and $930 million, with earnings per share of 45 to 50 cents. Earlier forecasts called for sales of up to $960 million and earnings of 57 to 61 cents per share.
"While we are disappointed by the revenue loss from a major client, we understand this risk presents itself when a client undergoes a change in control," said InnerWorkings CEO Eric Belcher. "We look forward to continuing to deliver excellent service and savings for them, albeit in a new reduced role. Importantly, our new business pipeline remains strong and we fully expect to achieve our new business growth targets for the year."
InnerWorkings expects to make up some of its lost 2013 revenue though the acquisition of California-based DB Studios, which distributes retail displays. InnerWorkings believes DB Studios can contribute about $20 million in sales this year.
The next glimpse of InnerWorkings' lower-than-expected 2013 sales will come on May 9 when the company releases its Q1 revenues. InnerWorkings is forecasting Q1 sales of $204 million to $207 million and earnings of a penny to three cents per share. Analysts had been expecting first-quarter revenues of nearly $220 million and earnings per share of up to nine cents.