EX-99.1 2 d763101dex991.htm EX-99.1 EX-99.1

Exhibit 99.1

GRUBHUB REPORTS SECOND QUARTER RESULTS

Record revenues of $60.0 million, growth of 48%

Chicago, IL – July 24, 2014 – GrubHub Inc. (NYSE: GRUB), the leading online and mobile food-ordering company, today announced financial results for the quarter ended June 30, 2014.

“GrubHub continued to execute against the large opportunity in takeout in the second quarter, driving significant year over year growth in revenues, adjusted EBITDA, and all of our key metrics,” said Matt Maloney, CEO. “We generated record revenues in the second quarter despite both an expected seasonal slowdown and an unusually cold winter that drove record orders in the first quarter.”

Second Quarter 2014 Results

The following results reflect the financial performance and key operating metrics of our business for the three months ended June 30, 2014, compared to the non-GAAP pro forma combined results of Seamless Holdings and GrubHub Holdings for the three months ended June 30, 2013, giving effect to the August 2013 merger of the two companies.

Financial Highlights

 

    Revenues: $60.0 million, a 48% year-over-year increase from $40.7 million in the second quarter of 2013.

 

    Non-GAAP Adjusted EBITDA: $16.9 million, a 56% year-over-year increase from $10.8 million in the second quarter of 2013.

 

    Net Income: $2.7 million, a 930% year-over-year increase from $0.3 million in the second quarter of 2013.

Key Business Metrics Highlights

 

    Active Diners grew 51% to 4.19 million, compared to 2.78 million active diners in the second quarter of 2013.

 

    GrubHub Inc. processed 174,500 Daily Average Grubs, a 34% year-over-year increase from 130,100 Daily Average Grubs in the second quarter of 2013.

 

    GrubHub Inc. processed $423 million in gross food sales, a 38% year-over-year increase from $307 million processed in the second quarter of 2013.

“We’re pleased with the initial roll-out of restaurant-driven pricing to the Seamless brand in April, which had a positive impact on overall commission rates during the quarter,” noted Maloney. “In addition, by maintaining our seasonally higher first quarter advertising spending in the second quarter, we continued to add new diners at a healthy rate, particularly in areas outside of our largest markets.”

Third Quarter 2014 Guidance

Based on information available as of July 24, 2014, the company is providing the following financial guidance for the third quarter:

 

    Revenue is expected to be in the range of $55.5 million to $57.5 million.


    Adjusted EBITDA is expected to be in the range of $13 million to $15 million.

Second Quarter 2014 Financial Results Conference Call: GrubHub will webcast a conference call today at 9 a.m. CT to discuss the second quarter 2014 financial results. The webcast can be accessed on the GrubHub Investor Relations website at http://investors.grubhub.com, along with the company’s earnings press release and financial tables. A replay of the webcast will be available at the same website until August 7, 2014.

About GrubHub

GrubHub Inc. (NYSE: GRUB) is the nation’s leading online and mobile food ordering company dedicated to connecting hungry diners with local takeout restaurants. The company’s online and mobile ordering platforms allow diners to order directly from approximately 30,000 takeout restaurants in more than 700 U.S. cities and London. Every order is supported by the company’s 24/7 customer service teams.

Use of Forward Looking Statements:

This press release contains forward looking statements regarding our management’s future expectations, beliefs, intentions, goals, strategies, plans and prospects. Such statements constitute “forward-looking” statements, which are subject to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. The outcome of the matters covered by such forward-looking statements involves risks, uncertainties and assumptions. If any of these risks or uncertainties materialize or if any of the assumptions prove incorrect, our actual results, performance or achievements could be materially different from any future results, performance or achievements expressed or implied by the forward-looking statements. Such risks and uncertainties include, but are not limited to, the matters set forth in the filings that we make with the Securities and Exchange Commission from time to time, including those set forth in the section entitled “Risk Factors” in the company’s Prospectus filed on April 7th, 2014 and additional information that will be set forth in our Form 10-Q that will be filed for the quarter ended June 30, 2014, which should be read in conjunction with these financial results. These documents are available on the SEC Filings section of the Investor Relations section of our website at http://investors.grubhub.com/. Please also note that forward-looking statements represent our management’s beliefs and assumptions only as of the date of this press release. Except as required by law, we assume no obligation to update these forward-looking statements publicly, or to update the reasons actual results could differ materially from those anticipated in the forward-looking statements, even if new information, becomes available in the future.

Use of Non-GAAP Financial Measures

Adjusted EBITDA is a financial measure that is not calculated in accordance with accounting principles generally accepted in the United States, or GAAP.

We define Adjusted EBITDA as net income adjusted to exclude merger and restructuring costs, income taxes, depreciation and amortization and stock-based compensation expense. We use Adjusted EBITDA as a key performance measure because we believe it facilitates operating performance comparisons from period to period by excluding potential differences primarily caused by variations in capital structures, tax positions, the impact of acquisitions and restructuring, the impact of depreciation and amortization expense on our fixed assets and the impact of stock-based compensation expense. Adjusted EBITDA is not a measurement of our financial performance under GAAP and should not be considered as an alternative to performance measures derived in accordance with GAAP.

See “Schedule of Non-GAAP Adjusted EBITDA Reconciliation—Pro Forma” below for a reconciliation of net income to Adjusted EBITDA.


Contacts:

Anan Kashyap

Corporate Finance & Investor Relations

ir@grubhub.com

  

Abby Hunt

Press

press@grubhub.com


NON-GAAP PRO FORMA FINANCIAL INFORMATION

On August 8, 2013, GrubHub Inc. acquired all of the equity interests of each of Seamless North America, LLC, Seamless Holdings and GrubHub Holdings (the “Merger”). The following Unaudited Pro Forma Condensed Statement of Operations was derived from the unaudited historical statement of operations of Seamless Holdings (Acquirer) for the three months ended June 30, 2013 and the unaudited historical statement of operations of GrubHub Holdings (Acquiree) for the three months ended June 30, 2013, adjusted for income taxes at the Company’s historical effective tax rate.

 

     Three Months Ended June 30,  
            ProForma
Combined
 
     2014      2013  
     (in thousands)  

Revenues

   $ 60,006       $ 40,650   

Costs and expenses:

     

Sales and marketing

     16,168         10,568   

Operations and support

     14,734         10,823   

Technology (exclusive of amortization)

     6,066         4,201   

General and administrative

     8,620         11,916   

Depreciation and amortization

     5,615         2,561   
  

 

 

    

 

 

 

Total costs and expenses

     51,203         40,069   
  

 

 

    

 

 

 

Income before provision for income taxes

     8,803         581   

Provision for income taxes

     6,111         320   
  

 

 

    

 

 

 

Net income

   $ 2,692       $ 261   
  

 

 

    

 

 

 

Net income (loss) per share attributable to common stockholders:

     

Basic

   $ 0.03       $ (0.01

Diluted

   $ 0.03       $ 0.00   

Weighted average shares used to compute net income (loss) per share attributable to common stockholders:

     

Basic

     78,042         54,692   

Diluted

     82,074         74,983   

KEY PRO FORMA OPERATING METRICS

 

     Three Months Ended June 30,  
     2014      2013
Pro Forma
 

Active Diners (000s)

     4,190         2,780   

Daily Average Grubs

     174,500         130,100   

Gross Food Sales (millions)

   $ 422.6       $ 306.7   


GRUBHUB INC.

CONDENSED CONSOLIDATED BALANCE SHEETS—UNAUDITED

(in thousands, except share data)

 

     June 30, 2014         
     (Unaudited)      December 31, 2013  

ASSETS

     

CURRENT ASSETS:

     

Cash and cash equivalents

   $ 207,096       $ 86,542   

Accounts receivable, less allowances for doubtful accounts

     37,863         29,304   

Deferred taxes, current

     3,688         3,688   

Prepaid expenses

     2,505         2,625   
  

 

 

    

 

 

 

Total current assets

     251,152         122,159   

PROPERTY AND EQUIPMENT:

     

Property and equipment, net of depreciation and amortization

     16,529         17,096   

OTHER ASSETS:

     

Other assets

     4,039         2,328   

Goodwill

     352,788         352,788   

Acquired intangible assets, net of amortization

     261,390         268,441   
  

 

 

    

 

 

 

Total other assets

     618,217         623,557   
  

 

 

    

 

 

 

TOTAL ASSETS

   $ 885,898       $ 762,812   
  

 

 

    

 

 

 

LIABILITIES, REDEEMABLE COMMON STOCK AND STOCKHOLDERS’ EQUITY

     

CURRENT LIABILITIES:

     

Restaurant food liability

   $ 84,486       $ 78,245   

Accounts payable

     2,390         3,353   

Accrued payroll

     3,441         1,720   

Taxes payable

     1,377         1,768   

Restructuring accrual

     478         176   

Other accruals

     9,850         7,329   
  

 

 

    

 

 

 

Total current liabilities

     102,022         92,591   

LONG TERM LIABILITIES:

     

Deferred taxes, non-current

     98,633         90,495   

Other accruals

     3,939         3,936   
  

 

 

    

 

 

 

Total long term liabilities

     102,572         94,431   
  

 

 

    

 

 

 

Commitments and Contingencies

     

Redeemable common stock, $0.0001 par value, no shares and 1,344,236 shares outstanding as of June 30, 2014 and December 31, 2013, respectively

     —           18,415   

STOCKHOLDERS’ EQUITY:

     

Series A Convertible Preferred Stock, $0.0001 par value

     —           2   

Common stock, $0.0001 par value.

     8         5   

Accumulated other comprehensive income

     316         132   

Additional paid-in capital

     617,375         500,356   

Retained earnings

     63,605         56,880   
  

 

 

    

 

 

 

Total Stockholders’ Equity

   $ 681,304       $ 557,375   
  

 

 

    

 

 

 

TOTAL LIABILITIES, REDEEMABLE COMMON STOCK AND STOCKHOLDERS’ EQUITY

   $ 885,898       $ 762,812   
  

 

 

    

 

 

 


GRUBHUB INC.

CONDENSED STATEMENTS OF OPERATIONS—UNAUDITED

(in thousands, except per share data)

 

     Three Months Ended
June 30,
     Six Months Ended
June 30,
 
     2014      2013      2014      2013  

Revenues

   $ 60,006       $ 26,857       $ 118,619       $ 52,658   

Costs and expenses:

           

Sales and marketing

     16,168         6,064         32,285         16,164   

Operations and support

     14,734         5,998         29,841         11,975   

Technology (exclusive of amortization)

     6,066         2,697         11,413         5,344   

General and administrative

     8,620         5,809         16,944         8,712   

Depreciation and amortization

     5,615         1,877         11,130         3,673   
  

 

 

    

 

 

    

 

 

    

 

 

 

Total costs and expenses

     51,203         22,445         101,613         45,868   
  

 

 

    

 

 

    

 

 

    

 

 

 

Income before provision for income taxes

     8,803         4,412         17,006         6,790   

Provision for income taxes

     6,111         2,589         9,961         3,711   
  

 

 

    

 

 

    

 

 

    

 

 

 

Net income

   $ 2,692       $ 1,823       $ 7,045       $ 3,079   
  

 

 

    

 

 

    

 

 

    

 

 

 

Net income per share attributable to common stockholders:

           

Basic

   $ 0.03       $ 0.04       $ 0.10       $ 0.08   

Diluted

   $ 0.03       $ 0.04       $ 0.09       $ 0.07   

Weighted average shares used to compute net income per share attributable to common stockholders:

           

Basic

     78,042         31,373         66,626         31,368   

Diluted

     82,074         43,566         79,854         43,356   


GRUBHUB INC.

CONDENSED STATEMENTS OF CASH FLOWS—UNAUDITED

(in thousands)

 

     Six Months Ended June 30,  
     2014     2013  

CASH FLOWS FROM OPERATING ACTIVITIES

    

Net income

   $ 7,045      $ 3,079   

Adjustments to reconcile net income to net cash from operating activities:

    

Depreciation

     2,390        1,278   

Provision for doubtful accounts

     166        86   

Deferred taxes

     8,138        (151

Intangible asset amortization

     8,740        2,395   

Tenant allowance amortization

     (79     (79

Stock based compensation

     4,687        1,238   

Deferred rent

     76        (64

Change in assets and liabilities, net of the effects of business acquisitions:

    

Accounts receivable

     (8,725     (7,081

Prepaid expenses and other assets

     (1,592     452   

Accounts payable

     (962     1,510   

Restaurant food liability

     6,241        11,184   

Accrued payroll

     1,721        1,192   

Other accruals

     2,439        4,376   
  

 

 

   

 

 

 

Net cash provided by operating activities

     30,285        19,415   
  

 

 

   

 

 

 

CASH FLOWS FROM INVESTING ACTIVITIES

    

Capitalized website and development costs

     (1,112     (1,434

Purchases of property and equipment

     (2,378     (3,170
  

 

 

   

 

 

 

Net cash used in investing activities

     (3,490     (4,604
  

 

 

   

 

 

 

CASH FLOWS FROM FINANCING ACTIVITIES

    

Net proceeds from the issuance of common stock

     94,927          

Proceeds from exercise of stock options

     1,145        104   

Taxes paid related to net settlements of stock-based compensation awards

     (2,061       

Repurchases of common stock

     (116     (1,259

Preferred stock tax distributions

     (320     (651
  

 

 

   

 

 

 

Net cash provided by (used in) financing activities

     93,575        (1,806
  

 

 

   

 

 

 

Net change in cash and cash equivalents

     120,370        13,005   

Effect of exchange rates on cash

     184        (225

Cash and cash equivalents at beginning of year

     86,542        41,161   
  

 

 

   

 

 

 

Cash and cash equivalents at end of the period

   $ 207,096      $ 53,941   
  

 

 

   

 

 

 

SUPPLEMENTAL DISCLOSURE OF NON CASH ITEMS

    

Cash paid for income taxes

   $ 1,321      $ 2,243   


NON-GAAP ADJUSTED EBITDA RECONCILATION – PRO FORMA

 

     Three Months Ended
June 30,
     Six Months Ended
June 30,
 
     2014      2013
Pro Forma
     2014      2013
Pro Forma
 
     (in thousands)   

Net income

   $ 2,692       $ 261       $ 7,045       $ 920   

Income taxes

     6,111         320         9,961         1,125   

Depreciation and amortization

     5,615         2,561         11,130         4,975   
  

 

 

    

 

 

    

 

 

    

 

 

 

EBITDA

     14,418         3,142         28,136         7,020   
  

 

 

    

 

 

    

 

 

    

 

 

 

Merger and restructuring costs

     207         6,669         492         7,430   

Stock-based compensation

     2,284         1,022         4,687         2,010   
  

 

 

    

 

 

    

 

 

    

 

 

 

Adjusted EBITDA

   $ 16,909       $ 10,833       $ 33,315       $ 16,460