InnerWorkings Helps Companies Solve Printing Problems
Recently, Benzinga spoke with Eric Belcher, CEO of InnerWorkings (NASDAQ: INWK).
InnerWorkings is a Chicago-based smallcap. The firm specializes in print logistics -- using technology to coordinate between firms who wish to buy printed materials and the manufacturers who create them.
“We buy printed materials better than anyone else in the world,” Belcher explained. “Using our data technology, we buy product materials on behalf of our clients -- displays, packaging, direct mail promotional items and labels.”
InnerWorkings exists as a way to solve a problem of waste and inefficiency in the printing sector.
Generally speaking, according to Belcher, the market for printed materials is a quagmire. “There is rampant excess capacity, price discrimination and huge mismatches...none of the manufacturing facilities are the same.”
InnerWorkings uses its data to find optimal matches among its network of clients and vendors. With optimal matching, cost is significantly reduced.
“Our clients save 10-20 percent,” Belcher said.
Of course, one may be inclined to wonder about InnerWorkings' broader exposure to the trends in printing. As technology has advanced, the demand for many printed materials has declined. The trend is obvious among publishing firms, and can be seen partly in the recent performance of the stocks of companies like Hewlett-Packard (NYSE: HPQ) and Xerox (NYSE: XRX).
But when asked about this trend, Belcher was unfazed.
“I'm not concerned,” Belcher explained. “If we had exposure to black and white materials, newspapers and books and such, I would probably think about it every day. But we don't. We focus on sales materials, and those aren't going digital anytime soon.”
There's also the issue of the fiscal cliff. Thus far, lawmakers in Washington have been unable to get a deal done that would prevent the wave of spending cuts and tax increases that is set to go into effect at the end of the year.
“We can't completely discount macro factors like the fiscal cliff. In the short-term, clients could cut their spending one or two percent, but that isn't going to stop us from taking meaningful share of the market,” Belcher stated. “In fact, if you go back to the 08-09' period when the economy was in crisis, we saw some short-term cutting back, but then clients upped their spending with us as way to reduce their overall costs.”
InnerWorkings is still a relatively young company, and Belcher contends that it remains a growth story. For the first few years of its existence, the company was confined to Illinois. But over the last few years, through a combination of organic growth and acquisitions, InnerWorkings has expanded to 44 countries.
Belcher said he's found that, in markets all over the world, the same logistical printing problems exist. “In many countries, the problems are even worse (than in the U.S.).”
Year-to-date, shares of InnerWorkings are up over 40 percent.
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