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8-K - FORM 8-K - LogMeIn, Inc.d573447d8k.htm

Exhibit 99.1

LogMeIn Announces Second Quarter 2013 Results

Reports Quarterly Revenue of $40.7 Million; Deferred Revenue of $77.7 Million;

Increases Full Year Revenue Outlook by More Than $4 Million to $162.7-$164.2 Million

Boston, July 25, 2013 – LogMeIn, Inc. (NASDAQ: LOGM), a leading provider of essential cloud and mobile services, today announced its results for the quarter ended June 30, 2013.

For the second quarter of 2013, total revenue increased 20 percent to $40.7 million from $33.8 million reported in the second quarter of 2012.

Non-GAAP net income for the second quarter of 2013 was $3.3 million, or $0.13 per diluted share. Non-GAAP net income excludes $5.1 million in stock compensation expense, $600,000 in patent litigation related expense and $1.1 million in acquisition related costs and amortization. This compares to non-GAAP net income of $4.2 million, or $0.17 per diluted share, reported in the second quarter of 2012.

GAAP net loss for the second quarter of 2013 was $1.4 million, or $0.06 per diluted share, as compared to GAAP net income of $576,000, or $0.02 per diluted share, reported in the second quarter of 2012.

Non-GAAP cash flow from operations for the second quarter of 2013 was $14.7 million, or 36 percent of revenue. The Company closed the quarter with cash, cash equivalents and short-term investments of $201.4 million. Under the Company’s $25 million share repurchase program, the Company spent $5.6 million in the quarter to repurchase approximately 260,000 shares. Additionally, the Company reported total deferred revenue of $77.7 million, an increase of 24 percent from the $62.8 million reported in the second quarter of 2012.

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

“We’re happy to report a great quarter, a very good first half, and an increasingly positive outlook for the year. Strong sales growth across all of our core businesses helped us deliver results that exceeded the high-end of our guidance,” said Michael Simon, CEO of LogMeIn. “As a result, we’re raising our full year outlook.”

“During the quarter, we unveiled AppGuru and Xively, two new offerings that we believe will position LogMeIn to capitalize on some of technology’s fastest growing market opportunities. Aimed at helping IT professionals embrace the rapid, disruptive rise of cloud applications in the workplace, AppGuru offers a natural extension of our popular and proven IT management portfolio. Meanwhile Xively, a Platform as a Service for commercial Internet of Things offerings, provides a key first-mover advantage in what many industry experts believe will emerge as one of the most transformative market opportunities in the history of technology.”


“We believe that these next-generation services, combined with continued demand for our core offerings, and the increasing contribution of our high growth offerings, will provide a solid foundation for sustained growth in the latter half of 2013 and beyond.”

Business Outlook

Based on information available as of July 25, 2013, LogMeIn is issuing guidance for the third quarter 2013 and fiscal year 2013.

Third Quarter 2013: The Company expects third quarter revenue to be in the range of $41.9 million to $42.4 million.

Non-GAAP net income 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 $5.2 million of stock compensation expense, $600,000 in patent litigation related expenses, and $700,000 in acquisition related costs and amortization.

Non-GAAP net income for the third quarter assumes an effective tax rate of approximately 50 percent. Non-GAAP net income per diluted share for the third quarter of 2013 is based on an estimated 25.1 million fully-diluted weighted average shares outstanding.

Including stock compensation expense, patent litigation related expenses, and acquisition related costs and amortization, we expect to report a GAAP net loss in the range of $1.6 million to $1.9 million, or $0.07 to $0.08 per share.

The GAAP net loss for the third quarter assumes income tax expense of $1.4 million to $1.7 million. GAAP net loss per share for the third quarter of 2013 is based on an estimated 24.3 million weighted average shares outstanding.

Fiscal year 2013: The Company expects full year 2013 revenue to be in the range of $162.7 million to $164.2 million.

Non-GAAP net income is expected to be in the range of $12.4 million to $13.1 million, or $0.49 to $0.52 per diluted share. Non-GAAP net income excludes an estimated $21.1 million in stock compensation expense, $7.9 million in patent litigation related expenses, and $3.4 million in acquisition related costs and amortization.

Non-GAAP net income for the full fiscal year 2013 assumes an effective tax rate of approximately 50 percent. Non-GAAP net income per diluted share for 2013 is based on an estimated 25.1 million fully-diluted weighted average shares outstanding.

Including stock compensation expense, patent litigation related expenses, and acquisition related costs and amortization, we expect to report a GAAP net loss in the range of $10.6 million to $11.4 million, or $0.43 to $0.47 per share.


The GAAP net loss for the full year assumes income tax expense of $3.8 million to $4.4 million. GAAP net loss per share for 2013 is based on an estimated 24.4 million weighted average shares outstanding.

Conference Call Information for Today, Thursday, July 25, 2013

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 877-941-6010 (for the U.S. and Canada) or 480-629-9643 (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 July 25, 2013 until 11:59 p.m. Eastern Time on August 1, 2013, by dialing 800-406-7325 (for the U.S. and Canada) or 303-590-3030 (for international callers) and entering passcode 4628572#.

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 acquisition related costs and amortization, stock compensation expense, and patent litigation related expense. Non-GAAP provision for income taxes excludes the tax impact of acquisition related costs and amortization, stock compensation expense, and patent litigation related expense. Non-GAAP net income and non-GAAP net income per diluted share exclude acquisition related costs and amortization, stock compensation expense, and patent litigation related expense. Non-GAAP cash flow from operations excludes payments and receipts related to patent litigation related costs, and acquisition related payments. 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 judgment 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 the essential cloud-based collaboration, IT management, and customer service offerings required to empower, manage, secure and support the new mobile workplace. Our solutions are used by tens of millions of professionals to work from virtually anywhere on virtually any Internet-enabled device. Hundreds of thousands of small and medium businesses use our solutions to manage distributed work environments, embrace employee-owned technology in the workplace and facilitate collaboration across distributed teams. Thousands of the world’s premier service providers, including more than 50 of the world’s largest telecom companies, use our solutions to service and support businesses and individual professionals across mobile, social and online channels. The Company’s worldwide headquarters is located in Boston, Massachusetts, USA with offices in Australia, Hungary, India, Ireland, 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 popularity, value and effectiveness of the Company’s products, the success of the Company’s new and existing products, the Company’s investment in new products, the expected benefits of continued investment in cloud and mobile services, potential market sizes and opportunities, the Company’s growth, including growth in 2013, customer growth, and the Company’s financial guidance for fiscal year 2013 and the third quarter of 2013. 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 Free, LogMeIn Rescue, LogMeIn Ignition, join.me, Cubby, AppGuru, Xively and BoldChat are trademarks or registered trademarks of LogMeIn 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,
2012
    June 30,
2013
 
ASSETS   

Current assets:

    

Cash and cash equivalents

   $ 111,932      $ 101,078   

Marketable securities

     100,161        100,358   

Accounts receivable, net

     13,231        9,589   

Prepaid expenses and other current assets

     3,620        7,008   

Deferred income taxes

     3,214        3,222   
  

 

 

   

 

 

 

Total current assets

     232,158        221,255   

Property and equipment, net

     6,576        11,453   

Restricted cash

     3,807        3,798   

Intangibles, net

     6,368        5,996   

Goodwill

     18,883        18,712   

Other assets

     1,550        3,345   

Deferred income taxes

     10,196        9,961   
  

 

 

   

 

 

 

Total assets

   $ 279,538      $ 274,520   
  

 

 

   

 

 

 
LIABILITIES AND EQUITY   

Current liabilities:

    

Accounts payable

   $ 7,773      $ 6,118   

Accrued liabilities

     16,657        18,821   

Deferred revenue, current portion

     65,875        74,606   
  

 

 

   

 

 

 

Total current liabilities

     90,305        99,545   

Deferred revenue, net of current portion

     3,774        3,095   

Other long-term liabilities

     822        648   
  

 

 

   

 

 

 

Total liabilities

     94,901        103,288   
  

 

 

   

 

 

 

Commitments and contingencies

    

Preferred stock

     —          —     

Equity:

    

Common stock

     248        250   

Additional paid-in capital

     178,546        188,178   

Retained earnings (accumulated deficit)

     6,243        (924

Accumulated other comprehensive loss

     (400     (1,665

Treasury stock

     —          (14,607
  

 

 

   

 

 

 

Total equity

     184,637        171,232   
  

 

 

   

 

 

 

Total liabilities and equity

   $ 279,538      $ 274,520   
  

 

 

   

 

 

 


LogMeIn, Inc.

Condensed Consolidated Statements of Operations (unaudited)

(In thousands, except share and per share data)

 

     Three Months Ended June 30,     Six Months Ended June 30,  
             2012                     2013                     2012                     2013          

Revenue

   $ 33,797      $ 40,670      $ 66,485      $ 78,107   

Cost of revenue

     3,425        4,776        6,842        9,185   
  

 

 

   

 

 

   

 

 

   

 

 

 

Gross profit

     30,372        35,894        59,643        68,922   
  

 

 

   

 

 

   

 

 

   

 

 

 

Operating expenses

        

Research and development

     6,696        6,918        12,916        14,309   

Sales and marketing

     16,474        22,567        33,320        43,135   

General and administrative

     4,800        6,352        9,706        17,872   

Amortization of intangibles

     146        180        273        359   
  

 

 

   

 

 

   

 

 

   

 

 

 

Total operating expenses

     28,116        36,017        56,215        75,675   
  

 

 

   

 

 

   

 

 

   

 

 

 

Income (loss) from operations

     2,256        (123     3,428        (6,753

Interest income, net

     217        155        432        320   

Other (expense) income

     (269     (198     (505     454   
  

 

 

   

 

 

   

 

 

   

 

 

 

Income before income taxes

     2,204        (166     3,355        (5,979

Provision for income taxes

     (1,628     (1,194     (2,703     (1,188
  

 

 

   

 

 

   

 

 

   

 

 

 

Net income (loss)

   $ 576      $ (1,360   $ 652      $ (7,167
  

 

 

   

 

 

   

 

 

   

 

 

 

Net income (loss) per share:

        

basic

   $ 0.02      $ (0.06   $ 0.03      $ (0.29

diluted

   $ 0.02      $ (0.06   $ 0.03      $ (0.29

Weighted average shares outstanding:

        

basic

     24,677,893        24,262,417        24,625,851        24,485,429   

diluted

     25,367,227        24,262,417        25,360,950        24,485,429   

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 June 30,     Six Months Ended June 30,  
     2012     2013     2012     2013  

GAAP Income (loss) from operations

   $ 2,256      $ (123   $ 3,428      $ (6,753

Add Back:

        

Stock-based compensation expense

     3,089        5,117        6,073        10,282   

Patent litigation related expenses

     39        569        187        6,634   

Acquisition related costs and amortization

     1,537        1,141        3,125        2,211   

Non-GAAP Operating income

     6,921        6,704        12,813        12,374   
  

 

 

   

 

 

   

 

 

   

 

 

 

Other income, net

     (52     (43     (73     774   
  

 

 

   

 

 

   

 

 

   

 

 

 

Non-GAAP Income before provision for income taxes

     6,869        6,661        12,740        13,148   

Non-GAAP Provision for income taxes

     (2,670     (3,395     (4,993     (6,753
  

 

 

   

 

 

   

 

 

   

 

 

 

Non-GAAP Net income

   $ 4,199      $ 3,266      $ 7,747      $ 6,395   
  

 

 

   

 

 

   

 

 

   

 

 

 

Non-GAAP Diluted net income per share:

   $ 0.17      $ 0.13      $ 0.31      $ 0.26   

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

     25,367,227        24,867,371        25,360,950        25,028,953   

Stock-Based Compensation Expense

(In thousands)

 

     Three Months Ended June 30,      Six Months Ended June 30,  
     2012      2013      2012      2013  

Stock-based compensation expense:

           

Cost of revenue

   $ 108       $ 181       $ 215       $ 384   

Research and development

     574         1,045         1,156         2,062   

Sales and marketing

     901         2,146         1,851         4,227   

General and administrative

     1,506         1,745         2,851         3,609   
  

 

 

    

 

 

    

 

 

    

 

 

 

Total stock based-compensation

   $ 3,089       $ 5,117       $ 6,073       $ 10,282   
  

 

 

    

 

 

    

 

 

    

 

 

 


LogMeIn, Inc.

Condensed Consolidated Statements of Cash Flows (unaudited)

(In thousands)

 

     Three Months Ended June 30,     Six Months Ended June 30,  
             2012                     2013                     2012                     2013          

Cash flows from operating activities

        

Net income (loss)

   $ 576      $ (1,360   $ 652      $ (7,167

Adjustments to reconcile net income (loss) to net cash provided by operating activities:

        

Depreciation and amortization

     1,466        1,892        2,849        3,596   

Amortization of premiums on investments

     11        63        22        77   

Provision for bad debts

     33        13        55        41   

Deferred income taxes

     (7     167        —          198   

Stock-based compensation

     3,089        5,117        6,073        10,282   

Gain on disposal of equipment

     —          —          (1     (1

Changes in assets and liabilities:

        

Accounts receivable

     (1,586     2,329        441        3,602   

Prepaid expenses and other current assets

     (104     (535     (513     (3,388

Other assets

     163        87        11        (1,795

Accounts payable

     876        (1,280     (871     (2,409

Accrued liabilities

     1,710        (3,350     2,236        1,997   

Deferred revenue

     1,687        3,639        4,138        8,052   

Other long-term liabilities

     369        14        1,054        (174
  

 

 

   

 

 

   

 

 

   

 

 

 

Net cash provided by operating activities

     8,283        6,796        16,146        12,911   
  

 

 

   

 

 

   

 

 

   

 

 

 

Cash flows from investing activities

        

Purchases of marketable securities

     (19,995     (10,004     (74,987     (60,381

Proceeds from sale or disposal of marketable securities

     20,000        10,000        70,000        60,000   

Purchases of property and equipment

     (946     (4,301     (2,285     (6,456

Intangible asset additions

     (458     (373     (566     (915

Cash paid for acquisition, net of cash acquired

     —          —          (14,832     —     

(Increase) decrease in restricted cash and deposits

     (3,558     125        (3,558     125   
  

 

 

   

 

 

   

 

 

   

 

 

 

Net cash used in investing activities

     (4,957     (4,553     (26,228     (7,627
  

 

 

   

 

 

   

 

 

   

 

 

 

Cash flows from financing activities

        

Proceeds from issuance of common stock upon option exercises

     1,538        193        2,013        267   

Income tax benefit from the exercise of stock options

     1,551        (23     2,552        2   

Common stock withheld to satisfy income tax withholdings for restricted stock unit vesting

     —          (681     —          (917

Purchase of treasury stock

     —          (5,627     —          (14,607
  

 

 

   

 

 

   

 

 

   

 

 

 

Net cash provided by financing activities

     3,089        (6,138     4,565        (15,255
  

 

 

   

 

 

   

 

 

   

 

 

 

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

     (344     226        357        (883
  

 

 

   

 

 

   

 

 

   

 

 

 

Net increase (decrease) in cash and cash equivalents

     6,071        (3,669     (5,160     (10,854

Cash and cash equivalents, beginning of period

     92,373        104,747        103,604        111,932   
  

 

 

   

 

 

   

 

 

   

 

 

 

Cash and cash equivalents, end of period

   $ 98,444      $ 101,078      $ 98,444      $ 101,078   
  

 

 

   

 

 

   

 

 

   

 

 

 

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

(In thousands)

 

     Three Months Ended June 30,      Six Months Ended June 30,  
     2012      2013      2012      2013  

GAAP Cash flows from operating activities

   $ 8,283       $ 6,796       $ 16,146       $ 12,911   

Add Back:

           

Patent litigation related payments

     114         7,895         265         7,285   

Acquisition related payments

     97         43         218         518   
  

 

 

    

 

 

    

 

 

    

 

 

 

Non-GAAP Cash flows from operating activities

   $ 8,494       $ 14,734       $ 16,629       $ 20,714