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8-K - FORM 8-K - LogMeIn, Inc. | b83136e8vk.htm |
Exhibit 99.1
LogMeIn Announces Third Quarter 2010 Results
Quarterly Revenue up 34% year-over-year to $25.3 Million; Non-GAAP Net Income up 84% to
$5.4 Million; Net Income Doubles to $4.0 million
$5.4 Million; Net Income Doubles to $4.0 million
Woburn, Mass., October 27, 2010 LogMeIn, Inc. (NASDAQ: LOGM), a leading provider of SaaS-based,
remote-connectivity solutions, today announced results for the quarter ended September 30, 2010.
For the third quarter of 2010, revenue increased 34 percent to $25.3 million from $19.0 million
reported in the third quarter of 2009. Net income for the third quarter of 2010 increased to $4.0
million, or $0.16 per diluted share, from $1.8 million, or $0.07 per diluted share, reported in the
third quarter of 2009. Revenue in the third quarter of 2010 includes approximately $200,000 in
revenue related to the early termination of the Intel connectivity service and marketing agreement.
Non-GAAP net income for the third quarter of 2010 increased 84 percent to $5.4 million, or $0.22
per diluted share. This compares to non-GAAP net income for the third quarter of 2009 of $2.9
million, or $0.12 per diluted share. Non-GAAP net income for the third quarter of 2010 excludes
$111,000 in amortization of intangibles and $1.3 million in stock compensation expense.
The Company reported cash flow from operations of $7.0 million for the third quarter of 2010. Cash
flow from operations as reported has been reduced for GAAP purposes by $1.7 million of non-cash tax
benefits associated with the exercise of employee stock options. Non-GAAP cash flow from
operations for the third quarter of 2010 was $8.7 million, or 34 percent of revenue, as compared to
non-GAAP cash flow from operations of $7.1 million, or 37 percent of revenue, reported in the third
quarter of 2009. A reconciliation of the comparable GAAP financial measures to the non-GAAP
measures used above is included in the attached tables. The Company closed the third quarter of
2010 with cash, cash equivalents and short-term investments of $156.0 million.
Additionally, the Company reported total deferred revenue of $40.5 million, an increase of $2.1
million over the prior quarter. Total premium customers were approximately 490,000, an increase of
85,000 customers, versus an increase of approximately 65,000 in the second quarter of 2010.
We are pleased to report another very strong quarter for LogMeIn. Both our access and support
subscription businesses showed strong year-over-year and quarter-over-quarter growth, said Michael
Simon, president and CEO of LogMeIn. And our LogMeIn Ignition
business continues to benefit from the proliferation and popularity of new tablets and smartphones
hitting the market.
Encouraging trends in increased workforce mobility have proven to be beneficial to our business.
We believe that our mobility infrastructure provides a great complement to the new generation of
mobile hardware and software products. The rapid rise of smart, web-enabled devices is creating a
distinct opportunity for LogMeIns remote access and remote support products.
We intend to expand our portfolio of products to better serve our growing user base. Our newest
product, join.me, adds remote collaboration to our access and support product lines. We are
optimistic that join.me will expand our addressable market and serve an unmet demand created by the
increase in overall mobility. Given the continued growth in our core business and our expanding
product portfolio, we remain confident that LogMeIn is uniquely positioned to capitalize on this
favorable market environment. As a result, we are raising our outlook for the year, concluded
Simon.
Business Outlook
Based on information available as of October 27, 2010, the Company is issuing guidance for the
fourth quarter 2010 and fiscal year 2010 as follows:
Fourth Quarter 2010: The Company expects fourth quarter 2010 revenue to be in the range of
$29.3 million to $29.6 million, which includes approximately $3.3 million of revenue recognized due
to the early termination of our agreement with Intel.
Non-GAAP net income is expected to be in the range of $5.7 million to $6.0 million, and non-GAAP
net income per diluted share is expected to be in the range of $0.23 to $0.24. Non-GAAP net income
excludes an estimated $100,000 in amortization of intangibles and $1.5 million in stock
compensation expense.
Net income, which includes an estimated $100,000 in amortization of intangibles and $1.5 million in
stock compensation expense, is expected to be in the range of $4.1 million to $4.4 million, or
$0.16 to $0.18 per share.
Non-GAAP net income assumes an effective tax rate of approximately 15 percent. Net income assumes
an effective tax rate of approximately 18 percent.
Net income per diluted share calculations for the fourth quarter of 2010 are based on estimated
fully-diluted weighted average shares outstanding of 25.1 million shares.
Fiscal Year 2010: The Company expects fiscal year 2010 revenue, including approximately
$3.5 million of revenue related to the early termination of the Intel agreement, to be in the range
of $99.5 million to $99.8 million.
Non-GAAP net income is expected to be in the range of $19.9 million to $20.2 million and non-GAAP
net income per diluted share is expected to be in the range of $0.81 to $0.82. Non-GAAP net income
excludes an estimated $600,000 in amortization of intangibles, $5.1 million in stock compensation
expense and a one-time tax benefit of $5.6 million associated with the reversal of a valuation
allowance related to certain deferred tax assets.
Net income, which includes an estimated $600,000 in amortization of intangibles, $5.2 million in
stock compensation expense and the one-time tax benefit of $5.6 million, is expected to be in the
range of $19.8 million to $20.1 million, or $0.80 to $0.81 per share.
Non-GAAP net income assumes an effective tax rate for the fiscal year of approximately 13 percent.
Excluding the one-time tax benefit of $5.6 million, net income assumes an effective tax rate for
the fiscal year of approximately 17 percent.
Net income per diluted share calculations for 2010 are based on estimated fully diluted weighted
average shares outstanding of 24.7 million shares.
Conference Call Information for Today, Wednesday, October 27, 2010
The Company will host a corresponding conference call and live webcast at 5:00 p.m. Eastern Time
today. To access the conference call, dial 1-877-941-8418 (for the U.S. and Canada) or
1-480-629-9812 (for international callers). A live webcast will be available on the Investor
Relations section of the Companys corporate website at http://www.LogMeIn.com and via
replay beginning approximately two hours after the completion of the call until the Companys
announcement of its financial results for the next quarter. An audio replay of the call will also
be available to investors beginning at approximately 7:00 p.m. Eastern Time on October 27, 2010
until 11:59 p.m. Eastern Time on November 3, 2010, by dialing 1-800-406-7325 (for the U.S. and
Canada) or 1-303-590-3030 (for international callers) and entering pass code 4373842#.
Non-GAAP Financial Measures
This press release contains non-GAAP financial measures including non-GAAP operating income,
non-GAAP net income, non-GAAP net income per diluted share and non-GAAP cash flow from operations.
Non-GAAP operating income excludes the amortization of intangibles and stock compensation expense.
Non-GAAP net income and non-GAAP net income per diluted share exclude the amortization of
intangibles, stock compensation expense and expenses related to the accretion of redeemable
convertible preferred stock. Non-GAAP net income further excludes a one-time tax benefit
associated with the reversal of a valuation allowance. Non-GAAP cash flow from operations includes
a non-cash tax benefit associated with the exercise of employee stock options. The Company
believes that these non-GAAP measures of financial results provide useful information to management
and investors regarding certain financial and business trends relating to the Companys financial
condition and results of operations. The Companys management uses these non-GAAP measures to
compare the Companys performance to that of prior periods and uses these measures in financial
reports
prepared for management and the Companys board of directors. The Company believes that the use of
these non-GAAP financial measures provides an additional tool for investors to use in evaluating
ongoing operating results and trends and in comparing the Companys financial measures with other
software-as-a-service companies, many of which present similar non-GAAP financial measures to
investors.
The Company does not consider these non-GAAP measures in isolation or as an alternative to
financial measures determined in accordance with GAAP. The principal limitation of these non-GAAP
financial measures is that they exclude significant elements that are required by GAAP to be
recorded in the Companys financial statements. In addition, they are subject to inherent
limitations as they reflect the exercise of judgments by management in determining these non-GAAP
financial measures. In order to compensate for these limitations, management of the Company
presents its non-GAAP financial measures in connection with its GAAP results. The Company urges
investors to review the reconciliation of its non-GAAP financial measures to the comparable GAAP
financial measures, which it includes in press releases announcing quarterly financial results,
including this press release, and not to rely on any single financial measure to evaluate the
Companys business.
Reconciliation tables of the most comparable GAAP financial measures to the non-GAAP measures used
in this press release are included in this release.
About LogMeIn, Inc.
LogMeIn (Nasdaq:LOGM) provides SaaS-based remote access, support and collaboration solutions to
quickly, simply and securely connect millions of internet-enabled devices across the globe
computers, smartphones, iPad tablets, digital displays, and even in-dash computers of the Ford
F-150 pick-up truck. Designed for consumers, mobile professionals and IT organizations, LogMeIns
solutions empower over 10.4 million active users to connect more than 100 million devices. LogMeIn
is based in Woburn, Massachusetts, USA, with offices in Australia, Hungary, the Netherlands, and
the UK.
Cautionary Language Concerning Forward-Looking Statements
This press release contains forward-looking statements within the meaning of the safe harbor
provisions of the Private Securities Litigation Reform Act of 1995, including but not limited to,
statements regarding the value and effectiveness of the Companys products, the introduction or
performance of product enhancements or new products, the Companys intent to expand its portfolio
of products, the Companys growth and expansion and the Companys financial guidance for fiscal
year 2010 and the fourth quarter of 2010. These forward-looking statements are made as of the date
they were first issued and were based on current expectations, estimates, forecasts and projections
as well as the beliefs and assumptions of management. Words such as expect, anticipate,
should, believe, hope, target, project, goals, estimate, potential, predict,
may, will, might, could, intend, variations of these terms or the negative of these terms
and similar expressions are intended to identify these forward-looking statements. Forward-looking
statements are subject to a number of risks and uncertainties, many of which involve factors or
circumstances that are
beyond the Companys control. The Companys actual results could differ materially from those
stated or implied in forward-looking statements due to a number of factors, including but not
limited to, dependence on the remote support and software market, customer adoption of the
Companys solutions, the Companys ability to attract new customers and retain existing customers,
adverse economic conditions in general and adverse economic conditions specifically affecting the
markets in which the Company operates, intellectual property litigation, the Companys ability to
continue to promote and maintain its brand in a cost-effective manner, the Companys ability to
compete effectively, the Companys ability to develop and introduce new products and add-ons or
enhancements to existing products, the Companys ability to manage growth, the Companys ability to
attract and retain key personnel, the Companys ability to protect its intellectual property and
other proprietary rights, and other risks detailed in the Companys other publicly available
filings with the Securities and Exchange Commission. Past performance is not necessarily indicative
of future results. The forward-looking statements included in this press release represent the
Companys views as of the date of this press release. The Company anticipates that subsequent
events and developments will cause its views to change. The Company undertakes no intention or
obligation to update or revise any forward-looking statements, whether as a result of new
information, future events or otherwise. These forward-looking statements should not be relied
upon as representing the Companys views as of any date subsequent to the date of this press
release.
LogMeIn, LogMeIn Central, LogMeIn Pro2, LogMeIn Hamachi2, LogMeIn Free,
LogMeIn Rescue LogMeIn Ignition and join.me are trademarks or registered trademarks of LogMeIn in
the US and other countries around the world. iPhone and iPad are trademarks of Apple, Inc. in the
US and other countries around the world. Intel is the trademark of Intel Corporation in the US and
other countries around the world.
Contact Information:
Investors
Erica Abrams or Matthew Hunt
Blueshirt Group
415-217-5864, 415-489-2194
erica@blueshirtgroup.com
matt@blueshirtgroup.com
Investors
Erica Abrams or Matthew Hunt
Blueshirt Group
415-217-5864, 415-489-2194
erica@blueshirtgroup.com
matt@blueshirtgroup.com
Press
Craig VerColen
LogMeIn, Inc.
781-897-0696
Press@LogMeIn.com
Craig VerColen
LogMeIn, Inc.
781-897-0696
Press@LogMeIn.com
LogMeIn, Inc.
Condensed Consolidated Balance Sheets (unaudited)
(In thousands)
Condensed Consolidated Balance Sheets (unaudited)
(In thousands)
December 31, | September 30, | |||||||
2009 | 2010 | |||||||
ASSETS |
||||||||
Current assets: |
||||||||
Cash and cash equivalents |
$ | 100,290 | $ | 75,640 | ||||
Marketable securities |
29,956 | 80,375 | ||||||
Accounts receivable, net |
4,150 | 5,827 | ||||||
Prepaid expenses and other current assets |
1,834 | 2,160 | ||||||
Deferred income taxes |
| 2,056 | ||||||
Total current assets |
136,230 | 166,058 | ||||||
Property and equipment, net |
4,859 | 5,554 | ||||||
Restricted cash |
373 | 357 | ||||||
Intangibles, net |
751 | 645 | ||||||
Goodwill |
615 | 615 | ||||||
Other assets |
31 | 24 | ||||||
Deferred income taxes |
| 4,603 | ||||||
Total assets |
$ | 142,859 | $ | 177,856 | ||||
LIABILITIES AND STOCKHOLDERS EQUITY |
||||||||
Current liabilities: |
||||||||
Accounts payable |
$ | 2,328 | $ | 3,549 | ||||
Accrued liabilities |
7,324 | 8,884 | ||||||
Deferred revenue, current portion |
32,191 | 39,479 | ||||||
Total current liabilities |
41,843 | 51,912 | ||||||
Deferred revenue, net of current portion |
1,912 | 982 | ||||||
Other long-term liabilities |
595 | 471 | ||||||
Total liabilities |
44,350 | 53,365 | ||||||
Commitments and contingencies |
||||||||
Stockholders equity: |
||||||||
Common stock |
224 | 236 | ||||||
Additional paid-in capital |
122,465 | 132,669 | ||||||
Accumulated deficit |
(24,183 | ) | (8,471 | ) | ||||
Accumulated other comprehensive income |
3 | 57 | ||||||
Total stockholders equity |
98,509 | 124,491 | ||||||
Total liabilities and stockholders equity |
$ | 142,859 | $ | 177,856 | ||||
LogMeIn, Inc.
Condensed Consolidated Statements of Income (unaudited)
(In thousands, except share and per share data)
Condensed Consolidated Statements of Income (unaudited)
(In thousands, except share and per share data)
Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||
2009 | 2010 | 2009 | 2010 | |||||||||||||
Revenue |
$ | 18,971 | $ | 25,349 | $ | 54,175 | $ | 70,167 | ||||||||
Cost of revenue |
1,910 | 2,243 | 5,508 | 6,728 | ||||||||||||
Gross profit |
17,061 | 23,106 | 48,667 | 63,439 | ||||||||||||
Operating expenses |
||||||||||||||||
Research and development |
3,579 | 3,560 | 9,487 | 10,874 | ||||||||||||
Sales and marketing |
9,059 | 11,507 | 26,378 | 32,154 | ||||||||||||
General and administrative |
2,344 | 2,910 | 5,787 | 8,390 | ||||||||||||
Amortization of intangibles |
82 | 82 | 246 | 246 | ||||||||||||
Total operating expenses |
15,064 | 18,059 | 41,898 | 51,664 | ||||||||||||
Income from operations |
1,997 | 5,047 | 6,769 | 11,775 | ||||||||||||
Interest income, net |
42 | 202 | 67 | 456 | ||||||||||||
Other expense |
(141 | ) | (66 | ) | (301 | ) | (102 | ) | ||||||||
Income before for income taxes |
1,898 | 5,183 | 6,535 | 12,129 | ||||||||||||
Benefit (provision) for income taxes |
(48 | ) | (1,188 | ) | (212 | ) | 3,583 | |||||||||
Net income |
1,850 | 3,995 | 6,323 | 15,712 | ||||||||||||
Accretion of redeemable convertible
preferred stock |
(49 | ) | | (1,311 | ) | | ||||||||||
Net income attributable to common
stockholders |
$ | 1,801 | $ | 3,995 | $ | 5,012 | $ | 15,712 | ||||||||
Net income attributable to common
stockholders per share: |
||||||||||||||||
basic |
$ | 0.08 | $ | 0.17 | $ | 0.28 | $ | 0.68 | ||||||||
diluted |
$ | 0.07 | $ | 0.16 | $ | 0.27 | $ | 0.64 | ||||||||
Weighted average shares outstanding: |
||||||||||||||||
basic |
21,372,510 | 23,435,172 | 9,857,792 | 23,072,983 | ||||||||||||
diluted |
23,472,881 | 24,882,767 | 11,675,094 | 24,734,943 |
Calculation of Non-GAAP Operating Income, Non-GAAP Net Income and Non-GAAP Net Income per share (unaudited)
(In thousands, except share and per share data)
(In thousands, except share and per share data)
Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||
2009 | 2010 | 2009 | 2010 | |||||||||||||
GAAP Income from operations |
$ | 1,997 | $ | 5,047 | $ | 6,769 | $ | 11,775 | ||||||||
Add Back: |
||||||||||||||||
Amortization of acquired intangibles included in cost of revenue |
104 | 29 | 311 | 237 | ||||||||||||
Amortization of acquired intangibles included in operating expense |
82 | 82 | 246 | 246 | ||||||||||||
Stock-based compensation expense |
901 | 1,296 | 2,116 | 3,536 | ||||||||||||
Non-GAAP Operating income |
3,084 | 6,454 | 9,442 | 15,794 | ||||||||||||
Other income (expense), net |
(99 | ) | 136 | (234 | ) | 354 | ||||||||||
Non-GAAP Income before provision for income taxes |
2,985 | 6,590 | 9,208 | 16,148 | ||||||||||||
Provision for income taxes (For the nine months ended
September 30, 2010, excludes a tax benefit for the reversal
of a valuation allowance related to U.S. and certain
foreign deferred tax assets) |
(48 | ) | (1,188 | ) | (212 | ) | (1,989 | ) | ||||||||
Non-GAAP Net income |
$ | 2,937 | $ | 5,402 | $ | 8,996 | $ | 14,159 | ||||||||
Non-GAAP Diluted net income per share: |
$ | 0.12 | $ | 0.22 | $ | 0.45 | $ | 0.57 | ||||||||
Diluted weighted average shares outstanding used in
computing per share amounts: |
24,279,002 | 24,882,767 | 20,141,826 | 24,734,943 | ||||||||||||
Stock-Based Compensation Expense (In thousands) | ||||||||||||||||
Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||
2009 | 2010 | 2009 | 2010 | |||||||||||||
Stock-based compensation expense: |
||||||||||||||||
Cost of revenue |
$ | 9 | $ | 59 | $ | 38 | $ | 196 | ||||||||
Research and development |
251 | 174 | 427 | 447 | ||||||||||||
Sales and marketing |
221 | 431 | 679 | 1,043 | ||||||||||||
General and administrative |
420 | 632 | 972 | 1,850 | ||||||||||||
Total stock based-compensation |
$ | 901 | $ | 1,296 | $ | 2,116 | $ | 3,536 | ||||||||
LogMeIn, Inc.
Condensed Consolidated Statements of Cash Flows (unaudited)
(In thousands)
Condensed Consolidated Statements of Cash Flows (unaudited)
(In thousands)
Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||
2009 | 2010 | 2009 | 2010 | |||||||||||||
Cash flows from operating activities |
||||||||||||||||
Net income |
$ | 1,850 | $ | 3,995 | $ | 6,323 | $ | 15,712 | ||||||||
Adjustments to reconcile net income to net
cash provided by operating activities: |
||||||||||||||||
Depreciation and amortization |
802 | 877 | 2,279 | 2,737 | ||||||||||||
Amortization of premiums on investments |
| 60 | | 160 | ||||||||||||
Provision for bad debts |
30 | 23 | 85 | 65 | ||||||||||||
Deferred income taxes |
4 | 1,125 | 12 | (3,756 | ) | |||||||||||
Income tax benefit from the exercise of stock options |
| (1,713 | ) | | (2,899 | ) | ||||||||||
Stock-based compensation |
901 | 1,296 | 2,116 | 3,536 | ||||||||||||
Loss (gain) on disposal of equipment |
| | 1 | (2 | ) | |||||||||||
Changes in assets and liabilities: |
||||||||||||||||
Accounts receivable |
733 | (1,971 | ) | 185 | (1,742 | ) | ||||||||||
Prepaid expenses and other current assets |
(251 | ) | (453 | ) | (459 | ) | (326 | ) | ||||||||
Other assets |
13 | (4 | ) | (10 | ) | 6 | ||||||||||
Accounts payable |
541 | 986 | 479 | 850 | ||||||||||||
Accrued liabilities |
931 | 660 | 1,474 | 1,614 | ||||||||||||
Deferred revenue |
1,415 | 2,078 | 3,605 | 6,359 | ||||||||||||
Other long-term liabilities |
101 | 72 | 348 | (124 | ) | |||||||||||
Net cash provided by operating activities |
7,070 | 7,031 | 16,438 | 22,190 | ||||||||||||
Cash flows from investing activities |
||||||||||||||||
Purchases of marketable securities |
| (50,041 | ) | | (155,388 | ) | ||||||||||
Proceeds from maturity of marketable securities |
| 45,000 | | 105,000 | ||||||||||||
Purchases of property and equipment |
(815 | ) | (1,096 | ) | (2,927 | ) | (2,434 | ) | ||||||||
Intangible asset additions |
| (182 | ) | | (377 | ) | ||||||||||
(Increase) decrease in restricted cash and deposits |
(1 | ) | 5 | (3 | ) | 5 | ||||||||||
Net cash used in investing activities |
(816 | ) | (6,314 | ) | (2,930 | ) | (53,194 | ) | ||||||||
Cash flows from financing activities |
||||||||||||||||
Proceeds from issuance of common stock in connection with initial public offering,
net of issuance costs of $1,273 |
84,453 | | 84,287 | | ||||||||||||
Payments of issuance costs related to secondary offering
of common stock |
| 14 | | (196 | ) | |||||||||||
Proceeds from issuance of common stock upon option exercises |
99 | 1,411 | 166 | 3,776 | ||||||||||||
Income tax benefit from the exercise of stock options |
| 1,713 | | 2,899 | ||||||||||||
Net cash provided by financing activities |
84,552 | 3,138 | 84,453 | 6,479 | ||||||||||||
Effect of exchange rate changes on cash and
cash equivalents and restricted cash |
85 | 586 | 133 | (125 | ) | |||||||||||
Net increase (decrease) in cash and cash equivalents |
90,891 | 4,441 | 98,094 | (24,650 | ) | |||||||||||
Cash and cash equivalents, beginning of period |
30,116 | 71,199 | 22,913 | 100,290 | ||||||||||||
Cash and cash equivalents, end of period |
$ | 121,007 | $ | 75,640 | $ | 121,007 | $ | 75,640 | ||||||||
Calculation of Non-GAAP Cash Flows from Operating Activities (unaudited)
(In thousands)
(In thousands)
Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||
2009 | 2010 | 2009 | 2010 | |||||||||||||
GAAP Cash flows from operating activities |
$ | 7,070 | $ | 7,031 | $ | 16,438 | $ | 22,190 | ||||||||
Add Back: |
||||||||||||||||
Non-cash income tax benefit from exercise of stock options |
| 1,713 | | 2,899 | ||||||||||||
Non-GAAP Adjusted Cash flows from operating activities |
$ | 7,070 | $ | 8,744 | $ | 16,438 | $ | 25,089 | ||||||||