Press Release Details

GrubHub Reports Record Fourth Quarter And Year-End Results

02/05/2015

GrubHub generates 50 percent revenue growth in the fourth quarter and expands into delivery with the acquisition of two leading restaurant delivery services

CHICAGO, Feb. 5, 2015 /PRNewswire/ -- GrubHub Inc. (NYSE: GRUB), the leading online and mobile food-ordering company, today announced financial results for the quarter and year-ended December 31, 2014.  The Company also announced the completed acquisition of DiningIn and an agreement to acquire Restaurants on the Run, two of the leading restaurant delivery services in the U.S.

"We ended the year with strong growth momentum as we capitalized on the seasonally favorable conditions of the fourth quarter," said Matt Maloney, CEO. "We sent more than 200,000 orders a day to our restaurant partners during the quarter while surpassing 5 million active diners, resulting in record revenues and adjusted EBITDA.  GrubHub continues to be the clear platform of choice for restaurants that want to grow their businesses profitably and for diners looking for simplicity, choice and control when ordering takeout."

Acquisitions

The Company has completed the acquisition of DiningIn and signed a definitive agreement to acquire Restaurants on the Run, subject to certain closing conditions. With the completion of these acquisitions, GrubHub will be executing deliveries for nearly 3,000 restaurants across the U.S., including in Boston, Chicago, Dallas, Houston, Las Vegas, Los Angeles, Minneapolis, Philadelphia, San Diego, San Francisco and Seattle.   

GrubHub has been conducting its own delivery tests for the past year and believes that owning the delivery experience provides a number of key benefits to its diners and restaurant partners, including:

  • An improved diner experience due to GrubHub's additional visibility into each order;
  • An increased number of dining choices by bringing delivery services to restaurants that do not operate such services themselves; and
  • Lower overall delivery costs due to the benefits of scale and aggregation

"We are excited to start 2015 with these acquisitions, the completion of which will help us expand our leading position in online ordering and also make GrubHub a leader in restaurant delivery for independent restaurants," noted Maloney. "DiningIn and Restaurants on the Run are ideal partners for GrubHub because of the breadth and depth of their restaurant networks and the more than 45 years of combined experience they have operating successful restaurant delivery services."

Fourth Quarter and Full Year 2014 Highlights

The following results reflect the financial performance and key operating metrics of our business for the three months and year ended December 31, 2014, compared to the non-GAAP pro forma combined results of Seamless Holdings and GrubHub Holdings for the three months and year ended December 31, 2013, giving effect to the August 2013 merger of the two companies.

Fourth Quarter Financial Highlights

  • Revenues: $73.3 million, a 50% year-over-year increase from $49.0 million in the fourth quarter of 2013.
  • Non-GAAP Adjusted EBITDA: $25.0 million, a 92% year-over-year increase from $13.0 million in the fourth quarter of 2013.
  • Net Income: $10.8 million, a 381% year-over-year increase from $2.2 million in the fourth quarter of 2013.

Fourth Quarter Key Business Metrics Highlights

  • Active Diners were 5.03 million, a 47% increase from 3.42 million Active Diners in the fourth quarter of 2013.
  • Daily Average Grubs were 202,700, a 33% year-over-year increase from 152,900 Daily Average Grubs in the fourth quarter of 2013.
  • Gross Food Sales were $508 million, a 37% year-over-year increase from $370 million processed in the fourth quarter of 2013.

Full Year Financial Highlights

  • Revenues: $253.9 million, a 49% year-over-year increase from $170.1 million in 2013.
  • Non-GAAP Adjusted EBITDA: $78.7 million, a 98% year-over-year increase from $39.7 million in 2013.
  • Net Income: $24.3 million, a 458% year-over-year increase from $4.3 million in 2013.

Full Year Key Business Metrics Highlights

  • Active Diners were 5.03 million, a 47% increase from 3.42 million Active Diners in 2013.
  • Daily Average Grubs were 182,800, a 35% year-over-year increase from 135,500 Daily Average Grubs in 2013.
  • Gross Food Sales were $1.8 billion, a 39% year-over-year increase from $1.3 billion processed in 2013.

First Quarter and Full Year 2015 Guidance*

Based on information available as of February 5, 2015, the company is providing the following financial guidance for the first quarter and full year of 2015:


First Quarter 2015


Full Year 2015


(in millions)

Expected revenue range

$83 - $85


$335 - $350

Expected Adjusted EBITDA range

$24 - $26


$100 - $108

* Includes the impact of the DiningIn acquisition from date of completion, February 4th, 2015.  Excludes the acquisition of Restaurants on the Run, as the parties have executed a definitive agreement but have not closed the transaction.

Fourth Quarter 2014 Financial Results Conference Call: GrubHub will webcast a conference call today at 9 a.m. CT to discuss the fourth 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 February 19, 2015.

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 800 U.S. cities and London. Every order is supported by the company's 24/7 customer service teams.

About DiningIn

DiningIn, one of the country's largest restaurant delivery services, makes it easy for diners to enjoy food from their favorite restaurants. Founded in Boston in 1988, DiningIn services Boston, Chicago, Dallas, Minneapolis and Philadelphia. Providing delivery options for individual diners, group orders and corporate catering, DiningIn delivers the food diners crave. DiningIn partners with a wide range of restaurants – from local neighborhood favorites to national brands – to simplify food delivery and provide uncompromising quality.

About Restaurants on the Run

Founded in 1993, Restaurants on the Run is the West Coast's largest restaurant food delivery service specializing in corporate catering and restaurant delivery. Restaurants on the Run delivers on time meals and a consistent customer experience for more than 1,700 restaurant locations across Los Angeles, San Francisco, Orange County, San Diego, Houston, Seattle, Las Vegas and Tulsa. Using smart delivery logistics, Restaurants on the Run is focused on perfecting the ordering and delivery experience.  

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, including the expected completion of the acquisition of Restaurants on the Run, the expected benefits to GrubHub from the acquisition of DiningIn and the potential acquisition of Restaurants on the Run, and the expected financial performance of GrubHub following such acquisitions. Such statements constitute "forward-looking" statements, which are subject to the safe harbor provisions of the U.S. Private Securities Litigation Reform Act of 1995. Forward-looking statements involve known and unknown risks, uncertainties and assumptions that could cause actual results, performance or achievements to differ materially 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 our Prospectus filed on September 5, 2014 and our most recent Quarterly Report on Form 10-Q for the quarter ended September 30, 2014, which are on file with the SEC and are available on the Investor Relations section of our website at http://investors.grubhub.com/. Additional information will be set forth in our Annual Report on Form 10-K that will be filed for the year ended December 31, 2014, which should be read in conjunction with these financial results. 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 publicly update these forward-looking statements, 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

Abby Hunt

   Corporate Finance & Investor Relations

Press

   ir@grubhub.com

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 quarter and year ended December 31, 2013 and the unaudited historical statement of operations of GrubHub Holdings (Acquiree) for the quarter and year ended December 31, 2013, adjusted for income taxes at the Company's historical effective tax rate.


Three Months Ended December 31,



Year Ended December 31,







ProForma Combined







ProForma Combined



2014



2013



2014



2013



(in thousands)


Revenues

$

73,313



$

49,024



$

253,873



$

170,086


Costs and expenses:
















Sales and marketing


19,033




12,354




66,201




48,295


Operations and support


17,766




12,895




62,509




45,639


Technology (exclusive of amortization)


7,212




5,554




25,185




19,151


General and administrative


7,220




7,311




32,307




32,402


Depreciation and amortization


5,809




5,976




22,687




15,006


Total costs and expenses


57,040




44,090




208,889




160,493


Income before provision for income taxes


16,273




4,934




44,984




9,593


Provision for income taxes


5,508




2,698




20,721




5,246


Net income

$

10,765



$

2,236



$

24,263



$

4,347


Net income per share attributable to common stockholders:
















Basic

$

0.13



$

0.04



$

0.33



$

0.06


Diluted

$

0.13



$

0.03



$

0.30



$

0.06


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
















Basic


81,605




54,915




73,571




54,774


Diluted


84,311




76,751




81,698




75,634




KEY PRO FORMA OPERATING METRICS



Three Months Ended

 December 31,



Year Ended

December 31,



2014



2013



2014



2013

Pro Forma


Active Diners (000s)


5,029




3,421




5,029




3,421


Daily Average Grubs


202,700




152,900




182,800




135,500


Gross Food Sales (millions)

$

508.0



$

370.0



$

1,787.4



$

1,285.9






GRUBHUB INC.


CONDENSED CONSOLIDATED BALANCE SHEETS


(in thousands, except share data)











December 31, 2014



December 31, 2013


ASSETS








CURRENT ASSETS:








Cash and cash equivalents

$

201,796



$

86,542


Short term investments


111,341





Accounts receivable, less allowances for doubtful accounts


36,127




29,304


Deferred taxes, current


564




3,688


Prepaid expenses


2,940




2,625


Total current assets


352,768




122,159


PROPERTY AND EQUIPMENT:








Property and equipment, net of depreciation and amortization


16,003




17,096


OTHER ASSETS:








Other assets


3,543




2,328


Goodwill


352,788




352,788


Acquired intangible assets, net of amortization


254,339




268,441


Total other assets


610,670




623,557


TOTAL ASSETS

$

979,441



$

762,812


LIABILITIES, REDEEMABLE COMMON STOCK AND

   STOCKHOLDERS' EQUITY








CURRENT LIABILITIES:








Restaurant food liability

$

91,575



$

78,245


Accounts payable


3,371




3,353


Accrued payroll


5,958




1,720


Taxes payable


1,660




1,768


Restructuring accrual


748




176


Other accruals


7,693




7,329


Total current liabilities


111,005




92,591


LONG TERM LIABILITIES:








Deferred taxes, non-current


91,983




90,495


Other accruals


5,931




3,936


Total long term liabilities


97,914




94,431


Commitments and Contingencies








Redeemable common stock, $0.0001 par value, no shares and 1,344,236 shares outstanding as of December 31, 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 (loss)


(262)




132


Additional paid-in capital


689,953




500,356


Retained earnings


80,823




56,880


Total Stockholders' Equity

$

770,522



$

557,375


TOTAL LIABILITIES, REDEEMABLE COMMON STOCK AND STOCKHOLDERS' EQUITY

$

979,441



$

762,812






GRUBHUB INC.


STATEMENTS OF OPERATIONS


(in thousands, except per share data)














Three Months Ended

December 31,



Year Ended

December 31,




2014



2013



2014



2013


Revenues


$

73,313



$

49,024



$

253,873



$

137,143


Costs and expenses:

















Sales and marketing



19,033




12,354




66,201




37,347


Operations and support



17,766




12,895




62,509




34,173


Technology (exclusive of amortization)



7,212




5,554




25,185




15,357


General and administrative



7,220




7,311




32,307




21,907


Depreciation and amortization



5,809




5,976




22,687




13,470


Total costs and expenses



57,040




44,090




208,889




122,254


Income before provision for income taxes



16,273




4,934




44,984




14,889


Provision for income taxes



5,508




3,320




20,721




8,142


Net income


$

10,765



$

1,614



$

24,263



$

6,747


Net income per share attributable to common stockholders:

















Basic


$

0.13



$

0.03



$

0.33



$

0.14


Diluted


$

0.13



$

0.02



$

0.30



$

0.12


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

















Basic



81,605




54,915




73,571




40,681


Diluted



84,311




76,751




81,698




56,645






GRUBHUB INC.


CONSOLIDATED STATEMENTS OF CASH FLOWS


(in thousands)













Year Ended December 31,




2014



2013


CASH FLOWS FROM OPERATING ACTIVITIES









Net income


$

24,263



$

6,747


Adjustments to reconcile net income to net cash from operating

   activities:









Depreciation



5,032




3,992


Provision for doubtful accounts



426




473


Loss on disposal of fixed assets



11





Deferred taxes



4,612




1,706


Intangible asset amortization



17,655




9,477


Tenant allowance amortization



(159)




(159)


Stock-based compensation



9,393




4,933


Deferred rent



(17)




(135)


Investment premium amortization



315





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

   acquisitions:









Accounts receivable



(7,394)




(8,298)


Prepaid expenses and other assets



(1,669)




(2,388)


Restaurant food liability



13,414




26,549


Accounts payable



(259)




2,065


Accrued payroll



4,243




(1,707)


Other accruals



3,038




(2,192)


Due to related party






(244)


Net cash provided by operating activities



72,904




40,819


CASH FLOWS FROM INVESTING ACTIVITIES









Purchases of investments



(113,156)





Proceeds from maturity of investments



1,500





Capitalized website and development costs



(3,431)




(2,592)


Purchases of property and equipment



(3,653)




(4,429)


Cash acquired in merger of GrubHub Holdings Inc.






13,266


Net cash provided by (used in) investing activities



(118,740)




6,245


CASH FLOWS FROM FINANCING ACTIVITIES









Net proceeds from the issuance of common stock



142,541





Repurchases of common stock



(116)




(1,367)


Proceeds from exercise of stock options



8,322




1,418


Excess tax benefit related to stock-based compensation



12,975





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



(2,070)





Preferred stock tax distributions



(320)




(1,893)


Net cash provided by (used in) financing activities



161,332




(1,842)


Net change in cash and cash equivalents



115,496




45,222


Effect of exchange rates on cash



(242)




159


Cash and cash equivalents at beginning of year



86,542




41,161


Cash and cash equivalents at end of the period


$

201,796



$

86,542


SUPPLEMENTAL DISCLOSURE OF NON CASH ITEMS









Fair value of common and preferred stock issued in acquisition of GrubHub Holdings Inc.


$



$

421,485


Cash paid for income taxes



1,326




7,706




NON-GAAP ADJUSTED EBITDA RECONCILATION – PRO FORMA








Three Months Ended

December 31,



Year Ended

December 31,



2014



2013

Pro Forma



2014



2013

Pro Forma



(in thousands)


Net income

$

10,765



$

2,236



$

24,263



$

4,347


Income taxes


5,508




2,698




20,721




5,246


Depreciation and amortization


5,809




5,976




22,687




15,006


EBITDA


22,082




10,910




67,671




24,599


Merger, acquisition and restructuring costs


477




175




1,639




9,306


Stock-based compensation


2,412




1,909




9,393




5,824


Adjusted EBITDA

$

24,971



$

12,994



$

78,703



$

39,729


 

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SOURCE GrubHub Inc.