BY: StreetInsider
GrubHub Inc. (NYSE: GRUB) announced several value-enhancing initiatives and preliminary fourth quarter 2015 results. These initiatives include the Board's authorization of a stock repurchase program of up to $100 million and approval for management to negotiate and enter into a credit facility of up to $200 million. In addition, as part of GrubHub's commitment to best-in-class corporate governance, the Board plans to appoint two additional highly qualified independent directors.
"Today's announcement reflects the commitment of the Board and management to maximize growth and long-term shareholder value, and reflects valuable input we have received from our shareholders," said Matt Maloney, CEO. "We made solid progress in the fourth quarter, delivering revenue at the high end of guidance and adjusted EBITDA above guidance as we continued our momentum in delivery and leveraged our position as the clear leader in mobile and online takeout ordering. We continue to generate excellent cash flow, and the new credit facility will further augment our already strong cash position, enabling us to aggressively pursue strategic growth opportunities in 2016 and beyond."
"We believe our shares represent an attractive investment opportunity, and the stock repurchase authorization provides us with the ability to return value to shareholders while preserving our strong balance sheet and flexibility to pursue organic and other growth opportunities," said Brian McAndrews, Chairman of the Board. "We remain confident in the strength of our business and the effectiveness of our strategy, and we are committed to delivering long-term shareholder value."
Preliminary Fourth Quarter 2015 Results The company expects to report fourth quarter 2015 revenues at the high end of current guidance of $98 to $100 million and adjusted EBITDA modestly above current guidance of $23 to $25 million.
*** The Street sees Q4 revenue of $99.3 million.
These preliminary, unaudited results are based on management's initial review of operations for the quarter and year ended December 31, 2015 and remain subject to the completion of GrubHub's customary annual closing and review procedures. Final adjustments and other material developments may arise between the date of this press release and when GrubHub announces fourth quarter 2015 results and files its Annual Report on Form 10-K with the Securities and Exchange Commission. GrubHub will report fourth quarter and full year 2015 results on February 4, 2016.
Stock Repurchase Authorization The Board has authorized a stock repurchase program of up to $100 million. Opportunistic stock repurchases may be made at the Company's discretion from time to time in open market transactions or in accelerated stock buyback programs, tender offers, privately negotiated transactions or by other means. The timing and amounts of any purchases will be based on market conditions and other factors, including balancing use of resources for repurchases against organic and other growth opportunities. The repurchase program has no time limit, does not require the purchase of any minimum number of shares and may be suspended, modified or discontinued at any time without prior notice.
Credit Facility The Company is actively negotiating terms of a syndicated credit facility of up to $200 million to further increase its financial flexibility and to enable it to be aggressive in pursuing growth opportunities. As of December 31, 2015, the Company had cash and short-term investments of approximately $310 million.
New Directors In keeping with its ongoing evaluation of the Board to ensure the optimal composition, expertise and qualifications of its directors, GrubHub plans to identify two new independent directors for appointment to the Board, one of whom may replace a sitting director who would step off the Board. The search is being led by the Board's Nominating and Corporate Governance Committee, assisted by an external search firm.
"The Board's search is focused on bringing in world-class directors from leading companies with extensive product development expertise and/or executive leadership experience, and we welcome shareholder input regarding qualified candidates," said Brian McAndrews. "We believe these skill sets will enhance the Board and provide valuable perspective as we continue to aggressively expand GrubHub's delivery network while executing against the significant opportunity in takeout ordering."
No comments:
Post a Comment