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8-K - FORM 8-K - LogMeIn, Inc.d300656d8k.htm

Exhibit 99.1

LogMeIn Announces Fourth Quarter and Fiscal Year 2011 Results

Reports Annual Revenue of $119.5 Million; Q4 Revenue of $32.3 Million;

Surpasses One Million Premium Users

Woburn, Mass., February 15, 2012 – LogMeIn, Inc. (NASDAQ: LOGM), a leading provider of cloud-based connectivity solutions, today announced its results for the fourth quarter and fiscal year ended December 31, 2011.

For the fourth quarter of 2011, revenue increased 5 percent to $32.3 million from $30.9 million reported in the fourth quarter of 2010. Core product revenue, which excludes $4.9 million of revenue related to the Company’s Intel agreement from the fourth quarter of 2010, increased by 24 percent in the quarter from the fourth quarter of 2010.

GAAP net income for the fourth quarter of 2011 was $2.0 million, or $0.08 per diluted share. GAAP net income includes $1.2 million in acquisition related costs and amortization, $2.4 million in stock compensation expense and $117,000 in patent litigation related expenses. This compares to GAAP net income of $5.4 million, or $0.21 per diluted share, reported in the fourth quarter of 2010.

Non-GAAP net income for the fourth quarter of 2011, which excludes acquisition related costs and amortization, stock compensation expense and patent litigation related expenses, was $4.9 million, or $0.19 per diluted share based on an effective tax rate of 35 percent, as compared to $6.9 million, or $0.28 per diluted share, based on an effective tax rate of 14 percent, reported in the fourth quarter of 2010.

For fiscal year 2011, revenue increased 18 percent to $119.5 million from $101.1 million in 2010. Core product revenue, which excludes $9.6 million of revenue related to the Company’s Intel agreement for 2010, increased by 31 percent year-over-year.

GAAP net income for fiscal year 2011 was $5.8 million, or $0.23 per diluted share. GAAP net income includes $2.7 million in acquisition related costs and amortization, $8.9 million in stock compensation expense, $4.5 million in patent litigation related expenses and $1.3 million associated with a state sales tax settlement. This compares to GAAP net income of $21.1 million, or $0.85 per diluted share, reported in 2010.

Non-GAAP net income for fiscal year 2011, which excludes acquisition related costs and amortization, stock compensation expense, patent litigation related expenses and costs associated with a state sales tax settlement, was $17.3 million, or $0.69 per diluted share, as compared to non-GAAP net income of $21.1 million, or $0.85 per diluted share, reported in 2010. Non-GAAP net income for fiscal year 2011 is based on a tax rate of 37 percent, whereas non-GAAP net income for fiscal year 2010 is based on a tax rate of 13 percent.


Non-GAAP cash flow from operations for the fourth quarter of 2011 was $10.5 million, or 32 percent of revenue. For fiscal year 2011, non-GAAP cash flow from operations was $38.8 million or 32 percent of revenue. The Company closed 2011 with cash, cash equivalents and short-term investments of $198.6 million.

Additionally, the Company reported total deferred revenue of $58.3 million, an increase of 36 percent from the $42.8 million reported in the prior year and an increase $4.3 million, or 8 percent over the prior quarter.

A reconciliation of the comparable GAAP financial measures to non-GAAP measures used above is included in the attached tables.

“A growing market opportunity and strong across-the-business execution led to another great quarter and year for LogMeIn,” said Michael Simon, president and CEO of LogMeIn. “Prevailing consumerization trends are fundamentally changing the way businesses and individuals adopt, embrace and support technology. We believe that our strategy and continued focus on innovation helped us benefit from these trends in 2011 and put us in a favorable competitive position in 2012 and beyond.”

“The growing popularity of join.me, combined with a change in our Ignition business model, led to significant growth in new users of our services in the fourth quarter and for the year.

In the fourth quarter alone, we added nearly two million first time users of LogMeIn’ s products and surpassed one million premium customers, adding 90,000 in the fourth quarter and more than 415,000 in the fiscal year.”

“We believe that this substantial adoption of our services highlights the benefits of a strategy designed to deliver continued growth in new users and sustained, long-term growth for the business,” concluded Simon.

Business Outlook

Based on information available as of February 15, 2012, LogMeIn is issuing guidance for the first quarter 2012 and fiscal year 2012.

First Quarter 2012: The Company expects first quarter revenue to be in the range of $32.0 million to $32.3 million.

Non-GAAP net income, which includes the effect of the change in the Ignition business model from a perpetually licensed model to a subscription based model, is expected to be in the range of $3.0 million to $3.3 million, or $0.12 to $0.13 per diluted share. Non-GAAP net income excludes an estimated $1.5 million in acquisition related costs and amortization, $3.1 million in stock compensation expense and $200,000 in patent litigation related expenses.


GAAP Net income, which includes acquisition related costs and amortization, stock compensation expense and patent litigation related expenses is expected to be in the range of $100,000 to $300,000, or $0.00 to $0.01 per share.

Non-GAAP net income for the first quarter of 2012 assumes an effective tax rate of 38 percent. GAAP net income assumes an effective tax rate of 55 percent.

Net income per diluted share calculations for the first quarter of 2012 are based on estimated fully-diluted weighted average shares outstanding of 25.6 million shares.

Fiscal year 2012: The Company expects full year 2012 revenue to be in the range of $140.0 million to $142.0 million.

Non-GAAP net income is expected to be in the range of $15.3 million to $16.6 million, or $0.60 to $0.65 per diluted share. Non-GAAP net income excludes an estimated $5.9 million in acquisition related costs and amortization, $13.1 million in stock compensation expense and $1.2 million in patent litigation related expenses.

GAAP Net income, which includes acquisition related costs and amortization, stock compensation expense and patent litigation related expenses, is expected to be in the range of $2.0 million to $3.0 million, or $0.08 to $0.12 per share.

Non-GAAP net income for the fiscal year 2012 assumes an effective tax rate of 38 percent. GAAP net income assumes an effective tax rate of 55 percent.

Net income per diluted share calculations for 2012 are based on estimated fully-diluted weighted average shares outstanding of 25.7 million shares.

Conference Call Information for Today, Wednesday, February 15, 2012

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 877-941-1427 (for the U.S. and Canada) or 480-629-9664 (for international callers). A live webcast will be available on the Investor Relations section of the Company’s corporate website at www.LogMeIn.com and via replay beginning approximately two hours after the completion of the call until the Company’s 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 February 15, 2012 until 11:59 p.m. Eastern Time on February 22, 2012, by dialing 800-406-7325 (for the U.S. and Canada) or 303-590-3030 (for international callers) and entering passcode 4506893#.

Non-GAAP Financial Measures

This press release contains non-GAAP financial measures including non-GAAP operating income, non-GAAP income before provision for income taxes, non-GAAP provision for income taxes, non-GAAP net income, non-GAAP net income per diluted share and non-GAAP cash flow


from operations. Non-GAAP operating income excludes the acquisition related costs and amortization of intangibles, stock compensation expense, patent litigation related expense, and a settlement for an uncollected state sales tax. Non-GAAP provision for income taxes excludes the tax impact of acquisition related costs and amortization of intangibles, stock compensation expense, patent litigation related expense, and settlement for an uncollected state sales tax. Non-GAAP net income and non-GAAP net income per diluted share exclude the acquisition related costs and amortization of intangibles, stock compensation expense, patent litigation related expense, and a settlement for an uncollected state sales tax. For the year ended December 31, 2010, non-GAAP net income further excludes a tax benefit for the reversal of a valuation allowance related to U.S. and certain foreign deferred tax assets. Non-GAAP cash flow from operations excludes patent litigation related expense, acquisition related legal expense and payment of an uncollected state sales tax settlement. The exclusion of certain expenses in the calculation of Non-GAAP financial measures should not be construed as an inference that these costs are unusual or infrequent. We anticipate excluding these expenses in the future presentation of our non-GAAP financial measures. 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 Company’s financial condition and results of operations. The Company’s management uses these non-GAAP measures to compare the Company’s performance to that of prior periods and uses these measures in financial reports prepared for management and the Company’s 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 Company’s 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 Company’s 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 Company’s 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 essential cloud-based services to individuals, businesses, and IT organizations for remote access, collaboration, customer care, and remote IT management. These services are used by more than 15 million people to quickly, simply and


securely connect over 150 million internet-enabled devices across the globe — computers, smartphones, iPad™ and Android™ tablets, and digital displays. LogMeIn is based in Woburn, Massachusetts, USA, with offices in Australia, Hungary, India, Japan, 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 Company’s products, industry trends, the Company’s intent to expand its portfolio of products, the Company’s growth, customer growth, and the Company’s financial guidance for fiscal year 2012 and the first quarter of 2012. 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 Company’s control. The Company’s 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 Company’s solutions, the Company’s 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 Company’s ability to continue to promote and maintain its brand in a cost-effective manner, the Company’s ability to compete effectively, the Company’s ability to develop and introduce new products and add-ons or enhancements to existing products, the Company’s ability to manage growth, the Company’s ability to attract and retain key personnel, the Company’s ability to protect its intellectual property and other proprietary rights, the result of any pending litigation, and other risks detailed in the Company’s 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 Company’s 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 Company’s views as of any date subsequent to the date of this press release.

LogMeIn, LogMeIn Central, LogMeIn Pro, LogMeIn Hamachi, LogMeIn Free, LogMeIn Rescue, LogMeIn Ignition, join.me, and BoldChat 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

Rob Bradley

LogMeIn, Inc.

781-897-1301

rbradley@LogMeIn.com

Press

Craig VerColen

LogMeIn, Inc.

781-897-0696

Press@LogMeIn.com


LogMeIn, Inc.

Condensed Consolidated Balance Sheets (unaudited)

(In thousands)

 

     December 31,     December 31,  
     2010     2011  
ASSETS     

Current assets:

    

Cash and cash equivalents

   $ 77,280      $ 103,604   

Marketable securities

     90,144        95,040   

Accounts receivable, net

     4,744        8,747   

Prepaid expenses and other current assets

     2,906        2,412   

Deferred income taxes

     1,316        1,980   
  

 

 

   

 

 

 

Total current assets

     176,390        211,783   

Property and equipment, net

     6,199        5,203   

Restricted cash

     350        370   

Intangibles, net

     578        3,260   

Goodwill

     615        7,259   

Other assets

     27        242   

Deferred income taxes

     2,518        3,940   
  

 

 

   

 

 

 

Total assets

   $ 186,677      $ 232,057   
  

 

 

   

 

 

 
LIABILITIES AND STOCKHOLDERS’ EQUITY     

Current liabilities:

    

Accounts payable

   $ 2,177      $ 6,275   

Accrued liabilities

     10,829        10,473   

Deferred revenue, current portion

     41,763        55,962   
  

 

 

   

 

 

 

Total current liabilities

     54,769        72,710   

Deferred revenue, net of current portion

     1,030        2,302   

Other long-term liabilities

     500        1,239   
  

 

 

   

 

 

 

Total liabilities

     56,299        76,251   
  

 

 

   

 

 

 

Commitments and contingencies

    

Stockholders’ equity:

    

Common stock

     238        246   

Additional paid-in capital

     133,425        154,440   

(Accumulated deficit) retained earnings

     (3,084     2,677   

Accumulated other comprehensive loss

     (201     (1,557
  

 

 

   

 

 

 

Total stockholders’ equity

     130,378        155,806   
  

 

 

   

 

 

 

Total liabilities and stockholders’ equity

   $ 186,677      $ 232,057   
  

 

 

   

 

 

 


LogMeIn, Inc.

Condensed Consolidated Statements of Income (unaudited)

(In thousands, except share and per share data)

 

     Three Months Ended
December 31,
    Twelve Months Ended
December 31,
 
     2010     2011     2010     2011  

Revenue

   $ 30,890      $ 32,322      $ 101,057      $ 119,461   

Cost of revenue

     2,396        2,994        9,124        10,574   
  

 

 

   

 

 

   

 

 

   

 

 

 

Gross profit

     28,494        29,328        91,933        108,887   
  

 

 

   

 

 

   

 

 

   

 

 

 

Operating expenses

        

Research and development

     4,340        5,695        15,214        20,780   

Sales and marketing

     13,715        15,501        45,869        57,156   

General and administrative

     3,929        4,398        12,319        19,975   

Legal settlements

     —          —          —          1,250   

Amortization of intangibles

     92        11        338        228   
  

 

 

   

 

 

   

 

 

   

 

 

 

Total operating expenses

     22,076        25,605        73,740        99,389   
  

 

 

   

 

 

   

 

 

   

 

 

 

Income from operations

     6,418        3,723        18,193        9,498   

Interest income, net

     178        201        634        862   

Other income (expense)

     (117     (158     (219     (565
  

 

 

   

 

 

   

 

 

   

 

 

 

Income before income taxes

     6,479        3,766        18,608        9,795   

(Provision) benefit for income taxes

     (1,092     (1,749     2,491        (4,034
  

 

 

   

 

 

   

 

 

   

 

 

 

Net income

   $ 5,387      $ 2,017      $ 21,099      $ 5,761   
  

 

 

   

 

 

   

 

 

   

 

 

 

Net income per share:

        

basic

   $ 0.23      $ 0.08      $ 0.91      $ 0.24   

diluted

   $ 0.21      $ 0.08      $ 0.85      $ 0.23   

Weighted average shares outstanding:

        

basic

     23,753,375        24,417,473        23,244,479        24,175,621   

diluted

     25,222,794        25,290,390        24,839,905        25,154,599   

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)

 

     Three Months Ended
December 31,
    Twelve Months Ended
December 31,
 
     2010     2011     2010     2011  

GAAP Income from operations

   $ 6,418      $ 3,723      $ 18,193      $ 9,498   

Add Back:

        

Stock-based compensation expense

     1,456        2,389        4,992        8,925   

Patent litigation related expenses

     —          117        —          4,497   

Acquisition related costs and amortization

     106        1,231        589        2,682   

State sales tax settlement

     —          —          —          1,300   

Non-GAAP Operating income

     7,980        7,460        23,774        26,902   
  

 

 

   

 

 

   

 

 

   

 

 

 

Other income, net

     61        43        415        297   
  

 

 

   

 

 

   

 

 

   

 

 

 

Non-GAAP Income before provision for income taxes

     8,041        7,503        24,189        27,199   

Non-GAAP Provision for income taxes (For the twelve months ended December 31, 2010, excludes a tax benefit for the reversal of a valuation allowance related to U.S. and certain foreign deferred tax assets)

     (1,092     (2,622     (3,081     (9,941
  

 

 

   

 

 

   

 

 

   

 

 

 
        
  

 

 

   

 

 

   

 

 

   

 

 

 

Non-GAAP Net income

   $ 6,949      $ 4,881      $ 21,108      $ 17,258   
  

 

 

   

 

 

   

 

 

   

 

 

 

Non-GAAP Diluted net income per share:

   $ 0.28      $ 0.19      $ 0.85      $ 0.69   

Diluted weighted average shares outstanding used in computing per share amounts:

     25,222,794        25,290,390        24,839,905        25,154,599   

Stock-Based Compensation Expense

(In thousands)

 

     Three Months Ended
December 31,
     Twelve Months Ended
December 31,
 
     2010      2011      2010      2011  

Stock-based compensation expense:

           

Cost of revenue

   $ 64       $ 79       $ 261       $ 316   

Research and development

     192         382         638         1,477   

Sales and marketing

     510         716         1,553         2,700   

General and administrative

     690         1,212         2,540         4,432   
  

 

 

    

 

 

    

 

 

    

 

 

 

Total stock based-compensation

   $ 1,456       $ 2,389       $ 4,992       $ 8,925   
  

 

 

    

 

 

    

 

 

    

 

 

 


LogMeIn, Inc.

Condensed Consolidated Statements of Cash Flows (unaudited)

(In thousands)

 

     Three Months Ended
December 31,
    Twelve Months Ended
December 31,
 
     2010     2011     2010     2011  

Cash flows from operating activities

        

Net income

   $ 5,387      $ 2,017      $ 21,099      $ 5,761   

Adjustments to reconcile net income to net cash provided by operating activities:

        

Depreciation and amortization

     983        1,126        3,719        4,403   

Amortization of premiums on investments

     79        14        239        134   

Provision for bad debts

     23        40        88        85   

Deferred income taxes

     1,082        1,707        (2,673     3,794   

Income tax benefit from the exercise of stock options

     1,749        (2,221     (1,150     (5,887

Stock-based compensation

     1,456        2,389        4,992        8,925   

Gain on disposal of equipment

     —          —          (2     (1

Changes in assets and liabilities:

        

Accounts receivable

     1,060        (2,449     (682     (4,088

Prepaid expenses and other current assets

     (745     202        (1,071     494   

Other assets

     (3     13        3        (215

Accounts payable

     (1,182     2,231        (332     3,787   

Accrued liabilities

     2,030        (994     3,644        (531

Deferred revenue

     2,331        4,269        8,690        15,471   

Other long-term liabilities

     29        485        (95     739   
  

 

 

   

 

 

   

 

 

   

 

 

 

Net cash provided by operating activities

     14,279        8,829        36,469        32,871   
  

 

 

   

 

 

   

 

 

   

 

 

 

Cash flows from investing activities

        

Purchases of marketable securities

     (29,961     (14,999     (185,349     (150,066

Proceeds from sale or disposal of marketable securities

     20,000        10,000        125,000        145,000   

Purchases of property and equipment

     (1,809     (69     (4,243     (2,322

Intangible asset additions

     (39     (101     (416     (346

Cash paid for acquisition

     —          —          —          (10,000

Decrease in restricted cash and deposits

     —          (1     5        (26
  

 

 

   

 

 

   

 

 

   

 

 

 

Net cash used in investing activities

     (11,809     (5,170     (65,003     (17,760
  

 

 

   

 

 

   

 

 

   

 

 

 

Cash flows from financing activities

        

Payments of issuance costs related to secondary offering of common stock

     —          —          (196     —     

Proceeds from issuance of common stock upon option exercises

     1,058        2,975        4,835        6,207   

Income tax benefit from the exercise of stock options

     (1,749     2,221        1,150        5,887   
  

 

 

   

 

 

   

 

 

   

 

 

 

Net cash (used in) provided by financing activities

     (691     5,196        5,789        12,094   
  

 

 

   

 

 

   

 

 

   

 

 

 

Effect of exchange rate changes on cash and cash equivalents and restricted cash

     (139     (646     (265     (881
  

 

 

   

 

 

   

 

 

   

 

 

 

Net increase (decrease) in cash and cash equivalents

     1,640        8,209        (23,010     26,324   

Cash and cash equivalents, beginning of period

     75,640        95,395        100,290        77,280   
  

 

 

   

 

 

   

 

 

   

 

 

 

Cash and cash equivalents, end of period

   $ 77,280      $ 103,604      $ 77,280      $ 103,604   
  

 

 

   

 

 

   

 

 

   

 

 

 

Calculation of Non-GAAP Cash Flows from Operating Activities (unaudited)

(In thousands)

 

     Three Months Ended
December 31,
     Twelve Months Ended
December 31,
 
     2010      2011      2010      2011  

GAAP Cash flows from operating activities

   $ 14,279       $ 8,829       $ 36,469       $ 32,871   

Add Back:

           

Patent litigation related expenses

     —           101         —           4,352   

Acquisition related legal expense

     —           269         —           269   

State sales tax settlement

     —           1,300         —           1,300   
  

 

 

    

 

 

    

 

 

    

 

 

 

Cash flows from operating activities before patent litigation expenses, acquisition related legal expense and state sales tax settlement

   $ 14,279       $ 10,499       $ 36,469       $ 38,792