Shutterfly Inc. (SFLY) recently announced the closure of a new $125 million revolving credit facility. The new credit will serve general corporate purposes and will mature in five years. Per the agreement, the new facility will allow the company to borrow $75 million more, subject to certain regulatory conditions.
JPMorgan Chase & Co. (JPM) and Wells Fargo & Co. (WFC) acted as Joint Bookrunners as well as lead arrangers for the new revolving credit facility. This facility is a follow-up on management’s intent to support the overall growth and development of the company and its services.
Shutterfly ended its third quarter 2011 with cash and cash equivalents of $68.7 million, compared with $252.2 million at the end of December 2010. Deferred tax liability stood at $46.0 million compared with $70.9 million at the end of December 2010.
The company’s cash position appears to be strong at around $2.00 per share. Shutterfly anticipates that its current cash and cash equivalent balance and cash generated from operation will be sufficient to meet upcoming strategic and working capital requirements, lease obligations, expansion plans.
Given the usual strength of the fourth-quarter business, coupled with the solid performance in the first nine months of 2011, management expects to finish this year’s holiday season on a high note, with increased profitability and free cash flow.
Shutterfly Hotels currently retains a Zacks #3 Rank, which translates into a short-term Hold rating. We are also maintaining our long-term Neutral recommendation on the stock.
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