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8-K - FORM 8-K - LogMeIn, Inc.d185907d8k.htm

Exhibit 99.1

LogMeIn Announces First Quarter 2016 Results

30% Revenue Growth; 21% Adjusted EBITDA margin; $38 million in operating cash flow;

Increases FY’16 Revenue and Non-GAAP EPS Guidance

Boston, April 28, 2016 – LogMeIn, Inc. (NASDAQ: LOGM), a leading provider of cloud-based connectivity, today announced its results for the first quarter ended March 31, 2016.

First quarter 2016 highlights include:

 

    Revenue was $79.7 million, up 30% compared with the first quarter of 2015

 

    Adjusted EBITDA was $16.6 million and Adjusted EBITDA margin was 20.8%, versus $12.6 million and 20.5% in the first quarter of 2015

 

    Non-GAAP net income was $9.1 million, or $0.35 per diluted share, as compared to $8.5 million, or $0.33 per diluted share, in the first quarter of 2015

 

    GAAP net loss was $1.1 million, or $0.04 per share, as compared to GAAP net income of $0.4 million, or $0.01 per diluted share, in the first quarter of 2015

 

    Cash flow from operations was $38.0 million, or 48% of revenue, as compared to $40.0 million in the first quarter of 2015

 

    Total deferred revenue was $165.3 million, up 29% from $128.6 million in the first quarter of 2015

 

    The Company closed the quarter with cash, cash equivalents, and short-term investments of $226.5 million

“We had a great first quarter and very strong start to the year, with revenue, adjusted EBITDA margins, and earnings per share all well above the high end of our guidance,” said Bill Wagner, President and CEO of LogMeIn. “Our Collaboration, Identity and Access Management, and Service Clouds all saw double digit year-over-year revenue growth, and our key strategic products significantly outperformed the business, overall.”

Business Outlook

Based on information available as of April 28, 2016, the Company is issuing guidance for the second quarter 2016 and fiscal year 2016.

Second Quarter 2016: The Company expects second quarter revenue to be in the range of $81.5 million to $82.0 million.

Adjusted EBITDA is expected to be in the range of $19.8 million to $20.2 million.

Non-GAAP net income is expected to be in the range of $11.6 million to $11.9 million, or $0.45 to $0.46 per diluted share. Non-GAAP net income excludes an estimated $10.0 million in stock-based compensation expense, $0.2 million in litigation-related expense, and $4.4 million in acquisition-related costs and amortization.


Non-GAAP net income for the second quarter assumes an effective tax rate of approximately 30%. Non-GAAP net income per diluted share for the second quarter of 2016 is based on an estimated 25.9 million fully-diluted weighted average shares outstanding.

Including stock-based compensation expense, litigation-related expense, and acquisition-related costs and amortization, we expect to report GAAP net income in the range of $1.7 million to $2.0 million, or $0.07 to $0.08 per share.

GAAP net income for the second quarter assumes an effective tax rate of approximately 20%. GAAP net income per share for the second quarter of 2016 is based on an estimated 25.9 million fully-diluted weighted average shares outstanding.

Fiscal year 2016: The Company expects full year 2016 revenue to be in the range of $330.0 million to $332.0 million.

Adjusted EBITDA is expected to be in the range of $81.8 million to $85.3 million.

Non-GAAP net income is expected to be in the range of $47.6 million to $50.0 million, or $1.83 to $1.93 per diluted share. Non-GAAP net income excludes an estimated $36.8 million in stock-based compensation expense, $0.6 million in litigation-related expense, and $18.4 million in acquisition-related costs and amortization.

Non-GAAP net income for the full fiscal year 2016 assumes an effective tax rate of approximately 30%. Non-GAAP net income per diluted share for 2016 is based on an estimated 26.0 million fully-diluted weighted average shares outstanding.

Including stock-based compensation expense, litigation-related expense, and acquisition-related costs and amortization, we expect to report GAAP net income in the range of $9.7 million to $12.5 million, or $0.37 to $0.48 per diluted share.

GAAP net income for the full year assumes an effective tax rate of 20%. GAAP net income per share for 2016 is based on an estimated 26.0 million fully-diluted weighted average shares outstanding.

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

Conference Call Information for Today, Thursday, April 28, 2016

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 877-407-9124 (for the U.S.) or 201-689-8584 (for international callers). A live webcast will be available on the Investor Relations section of the Company’s corporate website at www.LogMeInInc.com and via replay beginning approximately two hours after the completion of the call. An audio replay of the call will also be available to investors until 11:59 p.m. Eastern Time on May 28th, 2016, by dialing 877-660-6853 (for the U.S.) or 201-612-7415 (for international callers) and entering passcode 13634718.


Non-GAAP Financial Measures

This press release contains non-GAAP financial measures including adjusted EBITDA, adjusted EBITDA margin, 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.

Adjusted EBITDA is GAAP net income (loss) excluding income tax expense (benefit), interest, and other (income) expense, net, depreciation and amortization, acquisition related costs, stock-based compensation expense, and litigation related expense. Adjusted EBITDA margin is calculated by dividing adjusted EBITDA by revenue. Non-GAAP operating income excludes acquisition related costs and amortization, stock-based compensation expense, and litigation related expense. Non-GAAP provision for income taxes excludes the tax impact of acquisition related costs and amortization, stock-based compensation expense, and litigation related expense. Non-GAAP net income and non-GAAP net income per diluted share exclude acquisition related costs and amortization, stock-based compensation expense, and litigation related expense. Non-GAAP cash flow from operations excludes payments and receipts related to 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, Inc. (NASDAQ:LOGM) simplifies how people connect to each other and the world around them. With millions of users worldwide, our cloud-based solutions make it possible for people and companies to connect and engage with their workplace, colleagues, customers and products anywhere, anytime. LogMeIn is headquartered in Boston with offices in Bangalore, Budapest, Dublin, London, San Francisco and Sydney.

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 and services, the Company’s ability to deliver future growth, and the Company’s financial guidance for fiscal year 2016 and the second quarter of 2016. 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 execute on its strategic initiatives, the Company’s ability to integrate acquired products or companies, 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, the effectiveness of the Company’s cybersecurity measures, 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 is a registered trademark of LogMeIn, Inc. 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,          March 31,      
     2015     2016  
ASSETS   

Current assets:

    

Cash and cash equivalents

   $ 123,143      $ 141,191   

Marketable securities

     85,284        85,314   

Accounts receivable, net

     16,011        15,139   

Prepaid expenses and other current assets

     11,997        15,968   
  

 

 

   

 

 

 

Total current assets

     236,435        257,612   

Property and equipment, net

     21,711        23,438   

Restricted cash

     2,467        2,618   

Intangibles, net

     71,590        68,902   

Goodwill

     117,545        117,545   

Other assets

     5,753        6,305   

Deferred income tax assets

     198        214   
  

 

 

   

 

 

 

Total assets

   $ 455,699      $ 476,634   
  

 

 

   

 

 

 
LIABILITIES AND EQUITY   

Current liabilities:

    

Accounts payable

   $ 10,327      $ 10,911   

Accrued liabilities

     31,674        30,282   

Deferred revenue, current portion

     134,297        162,874   
  

 

 

   

 

 

 

Total current liabilities

     176,298        204,067   

Long-term debt

     60,000        52,500   

Deferred revenue, net of current portion

     2,692        2,386   

Deferred tax liabilities

     5,812        5,860   

Other long-term liabilities

     3,086        5,321   
  

 

 

   

 

 

 

Total liabilities

     247,888        270,134   
  

 

 

   

 

 

 

Commitments and contingencies

    

Preferred stock

     —          —     

Equity:

    

Common stock

     275        277   

Additional paid-in capital

     276,793        284,394   

Retained earnings

     21,074        20,001   

Accumulated other comprehensive loss

     (5,216     (4,690

Treasury stock

     (85,115     (93,482
  

 

 

   

 

 

 

Total equity

     207,811        206,500   
  

 

 

   

 

 

 

Total liabilities and equity

   $ 455,699      $ 476,634   
  

 

 

   

 

 

 


LogMeIn, Inc.

Condensed Consolidated Statements of Operations (unaudited)

(In thousands, except per share data)

 

     Three Months Ended March 31,  
             2015                     2016          

Revenue

   $ 61,109      $ 79,734   

Cost of revenue

     7,982        11,200   
  

 

 

   

 

 

 

Gross profit

     53,127        68,534   
  

 

 

   

 

 

 

Operating expenses

    

Research and development

     9,123        15,364   

Sales and marketing

     34,386        42,242   

General and administrative

     6,706        10,252   

Legal settlements

     3,600        —     

Amortization of acquired intangibles

     276        1,383   
  

 

 

   

 

 

 

Total operating expenses

     54,091        69,241   
  

 

 

   

 

 

 

Loss from operations

     (964     (707

Interest income

     175        183   

Interest expense

     (37     (392

Other income (expense), net

     1,261        (404
  

 

 

   

 

 

 

Income (loss) before income taxes

     435        (1,320

(Provision for) benefit from income taxes

     (63     247   
  

 

 

   

 

 

 

Net income (loss)

   $ 372      $ (1,073
  

 

 

   

 

 

 

Net income (loss) per share:

    

Basic

   $ 0.02      $ (0.04

Diluted

   $ 0.01      $ (0.04

Weighted average shares outstanding:

    

Basic

     24,627        25,152   

Diluted

     25,557        25,152   

Calculation of Non-GAAP Operating Income, Non-GAAP Net Income and Non-GAAP Diluted Net Income per share (unaudited)

(In thousands, except per share data)

 

     Three Months Ended March 31,  
             2015                     2016          

GAAP Loss from operations

   $ (964   $ (707

Add Back:

    

Stock-based compensation expense

     4,853        8,592   

Litigation related expenses

     4,259        35   

Acquisition related costs and amortization

     2,513        5,760   
  

 

 

   

 

 

 

Non-GAAP Operating income

     10,661        13,680   

Interest and other income (expense), net

     1,399        (613
  

 

 

   

 

 

 

Non-GAAP Income before income taxes

     12,060        13,067   

Non-GAAP Provision for income taxes

     (3,547     (4,002
  

 

 

   

 

 

 

Non-GAAP Net income

   $ 8,513      $ 9,065   
  

 

 

   

 

 

 

Non-GAAP Diluted net income per share:

   $ 0.33      $ 0.35   

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

     25,557        25,815   

Calculation of Adjusted EBITDA (unaudited)

(In thousands)

 

     Three Months Ended March 31,  
             2015                     2016          

GAAP Net income (loss)

   $ 372      $ (1,073

Add Back:

    

Stock-based compensation expense

     4,853        8,592   

Litigation related expenses

     4,259        35   

Acquisition related costs

     1,528        3,222   

Interest and other (income) expense, net

     (1,399     613   

Income tax expense (benefit)

     63        (247

Depreciation and amortization expense

     2,877        5,444   
  

 

 

   

 

 

 

Adjusted EBITDA

   $ 12,553      $ 16,586   
  

 

 

   

 

 

 

Stock-Based Compensation Expense (unaudited)

(In thousands)

 

     Three Months Ended March 31,  
             2015                      2016          

Stock-based compensation expense:

     

Cost of revenue

   $ 354       $ 548   

Research and development

     1,328         1,498   

Sales and marketing

     2,030         3,827   

General and administrative

     1,141         2,719   
  

 

 

    

 

 

 

Total stock based-compensation

   $ 4,853       $ 8,592   
  

 

 

    

 

 

 


LogMeIn, Inc.

Condensed Consolidated Statements of Cash Flows (unaudited)

(In thousands)

 

     Three Months Ended March 31,  
             2015                     2016          

Cash flows from operating activities

    

Net income (loss)

   $ 372      $ (1,073

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

    

Depreciation and amortization

     2,877        5,444   

Amortization of premiums on investments

     67        137   

Change in fair value of contingent consideration liability

     2        332   

Amortization of debt issuance costs

     23        70   

Provision for bad debts

     19        19   

Stock-based compensation

     4,853        8,592   

Other, net

     5        (12

Changes in assets and liabilities:

    

Accounts receivable

     5,031        1,053   

Prepaid expenses and other current assets

     (8,691     (4,098

Other assets

     194        (85

Accounts payable

     3,843        1,712   

Accrued liabilities

     3,894        (2,498

Deferred revenue

     27,484        26,344   

Other long-term liabilities

     5        2,063   
  

 

 

   

 

 

 

Net cash provided by operating activities (1)

     39,978        38,000   
  

 

 

   

 

 

 

Cash flows from investing activities

    

Purchases of marketable securities

     (19,996     (13,784

Proceeds from sale or disposal or maturity of marketable securities

     20,000        13,750   

Purchases of property and equipment

     (3,901     (4,376

Intangible asset additions

     (1,018     (392

Cash paid for acquisitions

     —          (61

Increase in restricted cash and deposits

     (50     (126
  

 

 

   

 

 

 

Net cash used in investing activities

     (4,965     (4,989
  

 

 

   

 

 

 

Cash flows from financing activities

    

Repayments of borrowings under credit facility

     —          (7,500

Proceeds from issuance of common stock upon option exercises

     8,850        1,125   

Payments of withholding taxes in connection with restricted stock unit vesting

     (1,642     (2,115

Payment of debt issuance costs

     (676     (265

Payment of contingent consideration

     (226     —     

Purchase of treasury stock

     (5,064     (8,367
  

 

 

   

 

 

 

Net cash provided by (used in) financing activities

     1,242        (17,122
  

 

 

   

 

 

 

Effect of exchange rate changes on cash and cash equivalents

     (5,055     2,159   
  

 

 

   

 

 

 

Net increase in cash and cash equivalents

     31,200        18,048   

Cash and cash equivalents, beginning of period

     100,960        123,143   
  

 

 

   

 

 

 

Cash and cash equivalents, end of period

   $ 132,160      $ 141,191   
  

 

 

   

 

 

 

 

(1) Cash flows from operating activities in the three months ended March 31, 2015 and 2016 includes $2.0 million and $4.5 million, respectively, of acquisition-related contingent retention-based bonus payments.

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

(In thousands)

 

     Three Months Ended March 31,  
             2015                      2016          

GAAP Cash flows from operating activities

   $ 39,978       $ 38,000   

Add Back:

     

Litigation related payments

     177         100   

Acquisition related payments

     15         140   
  

 

 

    

 

 

 

Cash flows from operating activities before litigation related payments and acquisition related payments

   $ 40,170       $ 38,240