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8-K - FORM 8-K - LogMeIn, Inc. | b86196e8vk.htm |
Exhibit
99.1
LogMeIn Announces First Quarter 2011 Results
Reports Quarterly Revenue of $27.0 Million Up 27 Percent; Deferred Revenue of $47.6 Million; Cash
Flow from Operations of $8.4 Million
Woburn, Mass., April 27, 2011 LogMeIn, Inc. (NASDAQ: LOGM), a provider of SaaS-based, remote
connectivity solutions, today announced its results for the quarter ended March 31, 2011. For the
first quarter of 2011, total revenue increased 27 percent to $27.0 million, up from $21.3 million
reported in the first quarter of 2010. Core product revenue, which excludes $1.5 million of
revenue related to the Companys Intel agreement from the first quarter of 2010, increased by 36
percent in the quarter from the first quarter of 2010.
Non-GAAP net income for the first quarter of 2011, which excludes patent litigation related
expenses, stock compensation and amortization of intangibles, was $3.9 million, or $0.15 per
diluted share, based on a 35 percent effective tax rate, as compared to $3.9 million, or $0.16 per
diluted share, based on a 3 percent effective tax rate, reported in the first quarter of 2010.
Applying a consistent 35 percent effective tax rate, non-GAAP net income for the first quarter of
2011 increased by 45 percent. A reconciliation of the comparable GAAP financial measures to
non-GAAP measures used above is included in the attached tables.
GAAP net loss for the first quarter of 2011 was $65,000, or $0.00 per diluted share. The GAAP net
loss is due to $4.2 million in litigation expenses related to the Companys defense against the
patent infringement claims brought by 01 Communique and the settlement of patent infringement
claims brought by Gemini IP LLC. GAAP net loss also includes $1.7 million in stock compensation
expense and $107,000 in amortization of intangibles. This compares to GAAP net income of $2.7
million, or $0.11 per diluted share, reported in the first quarter of 2010.
Cash flow from operations for the first quarter of 2011 was $8.4 million. Excluding $920,000 of
patent litigation related expenses, cash flow from operations for the first quarter of 2011 was
$9.3 million, or 34 percent of revenue, as compared to $7.4 million, or 35 percent of revenue, in
the first quarter of 2010. The Company closed the quarter with cash, cash equivalents and
short-term investments of $176.2 million.
Additionally, the Company reported total deferred revenue of $47.6 million, an increase of $4.8
million, or 11 percent, over the prior quarter. Total premium customers were approximately 685,000,
an increase in the quarter of approximately 100,000, and up from an increase of approximately
95,000 in the prior quarter.
Our strong momentum continued into Q1, resulting in another great quarter and a solid start to
2011, said Michael Simon, President and CEO of LogMeIn. Strong sales of LogMeIn Pro2 and LogMeIn
Ignition helped to fuel 44 percent year-over-year growth in our Access & Collaboration business,
while strong demand for LogMeIn Rescue and LogMeIn Central helped to drive 30 percent growth in our
support business.
Simon continued, As the next generation of Android tablets and the new iPad 2 hit the market in
Q1, LogMeIn was again at the forefront of the growing tablet opportunity with new, innovative
offerings. Tablet optimized versions of Ignition for Android, new mobile capabilities for join.me,
and a new version of Rescue designed to remotely support Android tablets and smartphones were all
featured in Googles Android Booth at Mobile World Congress in February. Also, within days of the
iPad 2 launch in March, we unveiled the next generation of our popular Ignition for iPhone/iPad
app, which gives users the ability to transfer and save PC or Mac files directly on their iPad,
iPhone or iPod touch.
The Company also reported significant positive events in connection with litigation matters. On
April 1, 2011, the United States District Court for the Eastern District of Virginia granted
LogMeIns motion for summary judgment of non-infringement in the patent infringement lawsuit
brought by 01 Communique and the trial was removed from the courts calendar. In addition, on
April 25, 2011, LogMeIn and Gemini IP LLC entered into a license agreement settling the patent
infringement claims brought by Gemini against the Company.
From the consumerization of IT, to an increasingly mobile workforce, and to the success of tablet
computers, the demands on IT organizations are shifting rapidly. We remain committed to delivering
innovative, cost-effective solutions that meet their needs, continued Simon. We believe our
large installed base, efficient business model, and cost-effective development resources provide
distinct advantages in capitalizing on prevailing mobile and digital trends and position us well
for continued growth in the coming quarters.
Business Outlook
Based on information available as of April 27, 2011, LogMeIn is issuing guidance for the second
quarter 2011 and fiscal year 2011 as follows:
Second Quarter 2011: The Company expects second quarter revenue to be in the range of
$28.4 million to $28.7 million.
Non-GAAP net income is expected to be in the range of $3.8 million to $4.1 million, or $0.15 to
$0.16 per diluted share. Non-GAAP net income excludes an estimated $500,000 in patent litigation
related expenses, $104,000 in amortization of intangibles, and $2.3 million in stock compensation
expense.
Net income, which includes the patent litigation related expenses, amortization of intangibles, and
stock compensation expense is expected to be in the range of $1.9 million to $2.2 million, or $0.07
to $0.09 per share.
Net income per diluted share calculations for the second quarter of 2011 are based on estimated
fully-diluted weighted average shares outstanding of 25.4 million shares.
Fiscal year 2011: The Company expects full year 2011 revenue to be in the range of $117.0
million to $120.5 million.
Non-GAAP net income is expected to be in the range of $18.0 million to $19.0 million, or $0.70 to
$0.74 per diluted share. Non-GAAP net income excludes an estimated $5.7 million in patent
litigation related expenses, $300,000 in amortization of intangibles, and $9.0 million in stock
compensation expense. The patent litigation related expenses include an estimated $4.45 million in
defense costs associated with
the 01 Communique patent infringement claim and the $1.25 million in litigation settlement costs
associated with the Gemini license agreement.
Net income, which includes the patent litigation related expenses, amortization of intangibles and
stock compensation, is expected to be in the range of $8.2 million to $9.2 million, or $0.32 to
$0.36 per share.
Net income per diluted share calculations for the full year are based on estimated fully-diluted
weighted average shares outstanding of 25.7 million shares.
GAAP and non-GAAP net income for the second quarter and fiscal year 2011 assume an effective tax
rate of 35 percent.
Conference Call Information for Today, Wednesday, April 27, 2011
LogMeIn will host a corresponding conference call and live webcast at 5:00 p.m. Eastern Time today.
To access the conference call, dial 877-941-2324 (for the U.S. and Canada) or 480-629-9716 (for
international callers). A live webcast will be available on the Investor Relations section of the
Companys corporate website at 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 April 27, 2011 until 11:59 p.m. Eastern Time on May 4,
2011, by dialing 800-406-7325 (for the U.S. and Canada) or 303-590-3030 (for international callers)
and entering passcode 4433926#.
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 and Android tablets, and digital displays. Designed for consumers,
mobile professionals and IT organizations, LogMeIns solutions empower over 11 million 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, the Companys ability to meet shifting demand in the support
landscape, the Companys expectations regarding litigation costs for the remainder of the fiscal
year and the Companys financial guidance for fiscal year 2011 and the second quarter of 2011.
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, the result of any pending litigation, including whether 01 Communique
appeals the summary judgment decision and the result of any appeal, 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.
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
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, | March 31, | |||||||
2010 | 2011 | |||||||
ASSETS |
||||||||
Current assets: |
||||||||
Cash and cash equivalents |
$ | 77,280 | $ | 86,082 | ||||
Marketable securities |
90,144 | 90,134 | ||||||
Accounts receivable, net |
4,744 | 5,873 | ||||||
Prepaid expenses and other current assets |
2,906 | 2,441 | ||||||
Deferred income taxes |
1,316 | 1,327 | ||||||
Total current assets |
176,390 | 185,857 | ||||||
Property and equipment, net |
6,199 | 6,449 | ||||||
Restricted cash |
350 | 389 | ||||||
Intangibles, net |
578 | 532 | ||||||
Goodwill |
615 | 615 | ||||||
Other assets |
27 | 62 | ||||||
Deferred income taxes |
2,518 | 2,519 | ||||||
Total assets |
$ | 186,677 | $ | 196,423 | ||||
LIABILITIES AND STOCKHOLDERS EQUITY |
||||||||
Current liabilities: |
||||||||
Accounts payable |
$ | 2,177 | $ | 4,849 | ||||
Accrued liabilities |
10,829 | 9,812 | ||||||
Deferred revenue, current portion |
41,763 | 46,177 | ||||||
Total current liabilities |
54,769 | 60,838 | ||||||
Deferred revenue, net of current portion |
1,030 | 1,390 | ||||||
Other long-term liabilities |
500 | 460 | ||||||
Total liabilities |
56,299 | 62,688 | ||||||
Commitments and contingencies |
||||||||
Stockholders equity: |
||||||||
Common stock |
238 | 240 | ||||||
Additional paid-in capital |
133,425 | 136,290 | ||||||
Accumulated deficit |
(3,084 | ) | (3,149 | ) | ||||
Accumulated other comprehensive income (loss) |
(201 | ) | 354 | |||||
Total stockholders equity |
130,378 | 133,735 | ||||||
Total liabilities and stockholders equity |
$ | 186,677 | $ | 196,423 | ||||
LogMeIn, Inc.
Condensed Consolidated Statements of Operations (unaudited)
(In thousands, except share and per share data)
Condensed Consolidated Statements of Operations (unaudited)
(In thousands, except share and per share data)
Three Months Ended March 31, | ||||||||
2010 | 2011 | |||||||
Revenue |
$ | 21,325 | $ | 27,039 | ||||
Cost of revenue |
2,220 | 2,536 | ||||||
Gross profit |
19,105 | 24,503 | ||||||
Operating expenses |
||||||||
Research and development |
3,554 | 4,318 | ||||||
Sales and marketing |
9,841 | 12,986 | ||||||
General and administrative |
2,803 | 6,059 | ||||||
Legal settlements |
| 1,250 | ||||||
Amortization of intangibles |
82 | 92 | ||||||
Total operating expenses |
16,280 | 24,705 | ||||||
Income (loss) from operations |
2,825 | (202 | ) | |||||
Interest income, net |
114 | 211 | ||||||
Other expense |
(64 | ) | (109 | ) | ||||
Income (loss) before income taxes |
2,875 | (100 | ) | |||||
Benefit (provision) for income taxes |
(139 | ) | 35 | |||||
Net income (loss) |
$ | 2,736 | $ | (65 | ) | |||
Net income (loss) per share: |
||||||||
basic |
$ | 0.12 | $ | (0.00 | ) | |||
diluted |
$ | 0.11 | $ | (0.00 | ) | |||
Weighted average shares outstanding: |
||||||||
basic |
22,643,963 | 23,928,310 | ||||||
diluted |
24,350,845 | 23,928,310 |
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 March 31, | ||||||||
2010 | 2011 | |||||||
GAAP Income (loss) from operations |
$ | 2,825 | $ | (202 | ) | |||
Add Back: |
||||||||
Amortization of intangibles included in cost of revenue |
104 | 15 | ||||||
Amortization of intangibles included in operating expense |
82 | 92 | ||||||
Stock-based compensation expense |
1,027 | 1,746 | ||||||
Patent litigation related expenses |
| 4,153 | ||||||
Non-GAAP Operating income |
4,038 | 5,804 | ||||||
Other income, net |
50 | 102 | ||||||
Non-GAAP Income before provision for income taxes |
4,088 | 5,906 | ||||||
Non-GAAP Provision for income taxes |
(139 | ) | (2,055 | ) | ||||
Non-GAAP Net income |
$ | 3,949 | $ | 3,851 | ||||
Non-GAAP Diluted net income per share: |
$ | 0.16 | $ | 0.15 | ||||
Diluted weighted average shares outstanding used in
computing per share amounts: |
24,350,845 | 25,068,004 |
Stock-Based Compensation Expense
(In thousands)
(In thousands)
Three Months Ended March 31, | ||||||||
2010 | 2011 | |||||||
Stock-based compensation expense: |
||||||||
Cost of revenue |
$ | 32 | $ | 89 | ||||
Research and development |
136 | 280 | ||||||
Sales and marketing |
236 | 563 | ||||||
General and administrative |
623 | 814 | ||||||
Total stock based-compensation |
$ | 1,027 | $ | 1,746 | ||||
LogMeIn, Inc.
Condensed Consolidated Statements of Cash Flows (unaudited)
(In thousands)
Condensed Consolidated Statements of Cash Flows (unaudited)
(In thousands)
Three Months Ended March 31, | ||||||||
2010 | 2011 | |||||||
Cash flows from operating activities |
||||||||
Net income (loss) |
$ | 2,736 | $ | (65 | ) | |||
Adjustments to reconcile net income (loss) to net cash
provided by operating activities: |
||||||||
Depreciation and amortization |
941 | 1,005 | ||||||
Amortization of premiums on investments |
34 | 59 | ||||||
Provision for bad debts |
30 | 14 | ||||||
Deferred income taxes |
4 | (12 | ) | |||||
Stock-based compensation |
1,027 | 1,745 | ||||||
Gain on disposal of equipment |
(1 | ) | (1 | ) | ||||
Changes in assets and liabilities: |
||||||||
Accounts receivable |
781 | (1,143 | ) | |||||
Prepaid expenses and other current assets |
204 | 465 | ||||||
Other assets |
(28 | ) | (35 | ) | ||||
Accounts payable |
282 | 2,635 | ||||||
Accrued liabilities |
(843 | ) | (1,006 | ) | ||||
Deferred revenue |
2,265 | 4,774 | ||||||
Other long-term liabilities |
(50 | ) | (41 | ) | ||||
Net cash provided by operating activities |
7,382 | 8,394 | ||||||
Cash flows from investing activities |
||||||||
Purchases of marketable securities |
(55,331 | ) | (30,077 | ) | ||||
Proceeds from sale or disposal of marketable securities |
25,000 | 30,000 | ||||||
Purchases of property and equipment |
(365 | ) | (1,118 | ) | ||||
Intangible asset additions |
| (62 | ) | |||||
Increase in restricted cash and deposits |
| (25 | ) | |||||
Net cash used in investing activities |
(30,696 | ) | (1,282 | ) | ||||
Cash flows from financing activities |
||||||||
Payments of issuance costs related to secondary offering
of common stock |
(210 | ) | | |||||
Stock option related activity |
1,350 | 1,118 | ||||||
Net cash provided by financing activities |
1,140 | 1,118 | ||||||
Effect of exchange rate changes on cash and
cash equivalents and restricted cash |
(134 | ) | 572 | |||||
Net increase (decrease) in cash and cash equivalents |
(22,308 | ) | 8,802 | |||||
Cash and cash equivalents, beginning of period |
100,290 | 77,280 | ||||||
Cash and cash equivalents, end of period |
$ | 77,982 | $ | 86,082 | ||||
Calculation of Non-GAAP Cash Flows from Operating Activities (unaudited)
(In thousands)
(In thousands)
Three Months Ended March 31, | ||||||||
2010 | 2011 | |||||||
GAAP Cash flows from operating activities |
$ | 7,382 | $ | 8,394 | ||||
Add Back: |
||||||||
Patent litigation related expenses |
| 920 | ||||||
Cash flows from operating activities before litigation expenses |
$ | 7,382 | $ | 9,314 | ||||