WOBURN, Mass., Oct. 27, 2010 (GLOBE NEWSWIRE) -- LogMeIn, Inc. (Nasdaq:LOGM), a leading provider of SaaS-based, remote-connectivity solutions, today announced results for the quarter ended September 30, 2010.
For the third quarter of 2010, revenue increased 34 percent to $25.3 million from $19.0 million reported in the third quarter of 2009. Net income for the third quarter of 2010 increased to $4.0 million, or $0.16 per diluted share, from $1.8 million, or $0.07 per diluted share, reported in the third quarter of 2009. Revenue in the third quarter of 2010 includes approximately $200,000 in revenue related to the early termination of the Intel connectivity service and marketing agreement.
Non-GAAP net income for the third quarter of 2010 increased 84 percent to $5.4 million, or $0.22 per diluted share. This compares to non-GAAP net income for the third quarter of 2009 of $2.9 million, or $0.12 per diluted share. Non-GAAP net income for the third quarter of 2010 excludes $111,000 in amortization of intangibles and $1.3 million in stock compensation expense.
The Company reported cash flow from operations of $7.0 million for the third quarter of 2010. Cash flow from operations as reported has been reduced for GAAP purposes by $1.7 million of non-cash tax benefits associated with the exercise of employee stock options. Non-GAAP cash flow from operations for the third quarter of 2010 was $8.7 million, or 34 percent of revenue, as compared to non-GAAP cash flow from operations of $7.1 million, or 37 percent of revenue, reported in the third quarter of 2009. A reconciliation of the comparable GAAP financial measures to the non-GAAP measures used above is included in the attached tables. The Company closed the third quarter of 2010 with cash, cash equivalents and short-term investments of $156.0 million.
Additionally, the Company reported total deferred revenue of $40.5 million, an increase of $2.1 million over the prior quarter. Total premium customers were approximately 490,000, an increase of 85,000 customers, versus an increase of approximately 65,000 in the second quarter of 2010.
"We are pleased to report another very strong quarter for LogMeIn. Both our access and support subscription businesses showed strong year-over-year and quarter-over-quarter growth," said Michael Simon, president and CEO of LogMeIn. "And our LogMeIn Ignition business continues to benefit from the proliferation and popularity of new tablets and smartphones hitting the market."
"Encouraging trends in increased workforce mobility have proven to be beneficial to our business. We believe that our mobility infrastructure provides a great complement to the new generation of mobile hardware and software products. The rapid rise of smart, web-enabled devices is creating a distinct opportunity for LogMeIn's remote access and remote support products."
"We intend to expand our portfolio of products to better serve our growing user base. Our newest product, join.me, adds remote collaboration to our access and support product lines. We are optimistic that join.me will expand our addressable market and serve an unmet demand created by the increase in overall mobility. Given the continued growth in our core business and our expanding product portfolio, we remain confident that LogMeIn is uniquely positioned to capitalize on this favorable market environment. As a result, we are raising our outlook for the year," concluded Simon.
Business Outlook
Based on information available as of October 27, 2010, the Company is issuing guidance for the fourth quarter 2010 and fiscal year 2010 as follows:
Fourth Quarter 2010: The Company expects fourth quarter 2010 revenue to be in the range of $29.3 million to $29.6 million, which includes approximately $3.3 million of revenue recognized due to the early termination of our agreement with Intel.
Non-GAAP net income is expected to be in the range of $5.7 million to $6.0 million, and non-GAAP net income per diluted share is expected to be in the range of $0.23 to $0.24. Non-GAAP net income excludes an estimated $100,000 in amortization of intangibles and $1.5 million in stock compensation expense.
Net income, which includes an estimated $100,000 in amortization of intangibles and $1.5 million in stock compensation expense, is expected to be in the range of $4.1 million to $4.4 million, or $0.16 to $0.18 per share.
Non-GAAP net income assumes an effective tax rate of approximately 15 percent. Net income assumes an effective tax rate of approximately 18 percent.
Net income per diluted share calculations for the fourth quarter of 2010 are based on estimated fully-diluted weighted average shares outstanding of 25.1 million shares.
Fiscal Year 2010: The Company expects fiscal year 2010 revenue, including approximately $3.5 million of revenue related to the early termination of the Intel agreement, to be in the range of $99.5 million to $99.8 million.
Non-GAAP net income is expected to be in the range of $19.9 million to $20.2 million and non-GAAP net income per diluted share is expected to be in the range of $0.81 to $0.82. Non-GAAP net income excludes an estimated $600,000 in amortization of intangibles, $5.1 million in stock compensation expense and a one-time tax benefit of $5.6 million associated with the reversal of a valuation allowance related to certain deferred tax assets.
Net income, which includes an estimated $600,000 in amortization of intangibles, $5.2 million in stock compensation expense and the one-time tax benefit of $5.6 million, is expected to be in the range of $19.8 million to $20.1 million, or $0.80 to $0.81 per share.
Non-GAAP net income assumes an effective tax rate for the fiscal year of approximately 13 percent. Excluding the one-time tax benefit of $5.6 million, net income assumes an effective tax rate for the fiscal year of approximately 17 percent.
Net income per diluted share calculations for 2010 are based on estimated fully diluted weighted average shares outstanding of 24.7 million shares.
Conference Call Information for Today, Wednesday, October 27, 2010
The Company will host a corresponding conference call and live webcast at 5:00 p.m. Eastern Time today. To access the conference call, dial 1-877-941-8418 (for the U.S. and Canada) or 1-480-629-9812 (for international callers). A live webcast will be available on the Investor Relations section of the Company's corporate website at http://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 October 27, 2010 until 11:59 p.m. Eastern Time on November 3, 2010, by dialing 1-800-406-7325 (for the U.S. and Canada) or 1-303-590-3030 (for international callers) and entering pass code 4373842#.
Non-GAAP Financial Measures
This press release contains non-GAAP financial measures including non-GAAP operating income, non-GAAP net income, non-GAAP net income per diluted share and non-GAAP cash flow from operations. Non-GAAP operating income excludes the amortization of intangibles and stock compensation expense. Non-GAAP net income and non-GAAP net income per diluted share exclude the amortization of intangibles, stock compensation expense and expenses related to the accretion of redeemable convertible preferred stock. Non-GAAP net income further excludes a one-time tax benefit associated with the reversal of a valuation allowance. Non-GAAP cash flow from operations includes a non-cash tax benefit associated with the exercise of employee stock options. The Company believes that these non-GAAP measures of financial results provide useful information to management and investors regarding certain financial and business trends relating to the 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 SaaS-based remote access, support and collaboration solutions to quickly, simply and securely connect millions of internet-enabled devices across the globe – computers, smartphones, iPad™ tablets, digital displays, and even in-dash computers of the Ford F-150 pick-up truck. Designed for consumers, mobile professionals and IT organizations, LogMeIn's solutions empower over 10.4 million active users to connect more than 100 million devices. LogMeIn is based in Woburn, Massachusetts, USA, with offices in Australia, Hungary, the Netherlands, and the UK.
The LogMeIn, Inc. logo is available at http://www.globenewswire.com/newsroom/prs/?pkgid=6574
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, the introduction or performance of product enhancements or new products, the Company's intent to expand its portfolio of products, the Company's growth and expansion and the Company's financial guidance for fiscal year 2010 and the fourth quarter of 2010. These forward-looking statements are made as of the date they were first issued and were based on current expectations, estimates, forecasts and projections as well as the beliefs and assumptions of management. Words such as "expect," "anticipate," "should," "believe," "hope," "target," "project," "goals," "estimate," "potential," "predict," "may," "will," "might," "could," "intend," variations of these terms or the negative of these terms and similar expressions are intended to identify these forward-looking statements. Forward-looking statements are subject to a number of risks and uncertainties, many of which involve factors or circumstances that are beyond the 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, 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 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, Inc. | ||
| Condensed Consolidated Balance Sheets (unaudited) | ||
| (In thousands) | ||
| December 31, | September 30, | |
| 2009 | 2010 | |
| ASSETS | ||
| Current assets: | ||
| Cash and cash equivalents | $ 100,290 | $ 75,640 |
| Marketable securities | 29,956 | 80,375 |
| Accounts receivable, net | 4,150 | 5,827 |
| Prepaid expenses and other current assets | 1,834 | 2,160 |
| Deferred income taxes | -- | 2,056 |
| Total current assets | 136,230 | 166,058 |
| Property and equipment, net | 4,859 | 5,554 |
| Restricted cash | 373 | 357 |
| Intangibles, net | 751 | 645 |
| Goodwill | 615 | 615 |
| Other assets | 31 | 24 |
| Deferred income taxes | -- | 4,603 |
| Total assets | $ 142,859 | $ 177,856 |
| LIABILITIES AND STOCKHOLDERS' EQUITY | ||
| Current liabilities: | ||
| Accounts payable | $ 2,328 | $ 3,549 |
| Accrued liabilities | 7,324 | 8,884 |
| Deferred revenue, current portion | 32,191 | 39,479 |
| Total current liabilities | 41,843 | 51,912 |
| Deferred revenue, net of current portion | 1,912 | 982 |
| Other long-term liabilities | 595 | 471 |
| Total liabilities | 44,350 | 53,365 |
| Commitments and contingencies | ||
| Stockholders' equity: | ||
| Common stock | 224 | 236 |
| Additional paid-in capital | 122,465 | 132,669 |
| Accumulated deficit | (24,183) | (8,471) |
| Accumulated other comprehensive income | 3 | 57 |
| Total stockholders' equity | 98,509 | 124,491 |
| Total liabilities and stockholders' equity | $ 142,859 | $ 177,856 |
| LogMeIn, Inc. | |||||
| Condensed Consolidated Statements of Income (unaudited) | |||||
| (In thousands, except share and per share data) | |||||
| Three Months Ended September 30, | Nine Months Ended September 30, | ||||
| 2009 | 2010 | 2009 | 2010 | ||
| Revenue | $ 18,971 | $ 25,349 | $ 54,175 | $ 70,167 | |
| Cost of revenue | 1,910 | 2,243 | 5,508 | 6,728 | |
| Gross profit | 17,061 | 23,106 | 48,667 | 63,439 | |
| Operating expenses | |||||
| Research and development | 3,579 | 3,560 | 9,487 | 10,874 | |
| Sales and marketing | 9,059 | 11,507 | 26,378 | 32,154 | |
| General and administrative | 2,344 | 2,910 | 5,787 | 8,390 | |
| Amortization of intangibles | 82 | 82 | 246 | 246 | |
| Total operating expenses | 15,064 | 18,059 | 41,898 | 51,664 | |
| Income from operations | 1,997 | 5,047 | 6,769 | 11,775 | |
| Interest income, net | 42 | 202 | 67 | 456 | |
| Other expense | (141) | (66) | (301) | (102) | |
| Income before for income taxes | 1,898 | 5,183 | 6,535 | 12,129 | |
| Benefit (provision) for income taxes | (48) | (1,188) | (212) | 3,583 | |
| Net income | 1,850 | 3,995 | 6,323 | 15,712 | |
|
Accretion of redeemable convertible preferred stock |
(49) | -- | (1,311) | -- | |
|
Net income attributable to common stockholders |
$ 1,801 | $ 3,995 | $ 5,012 | $ 15,712 | |
|
Net income attributable to common stockholders per share: |
|||||
| basic | $ 0.08 | $ 0.17 | $ 0.28 | $ 0.68 | |
| diluted | $ 0.07 | $ 0.16 | $ 0.27 | $ 0.64 | |
| Weighted average shares outstanding: | |||||
| basic | 21,372,510 | 23,435,172 | 9,857,792 | 23,072,983 | |
| diluted | 23,472,881 | 24,882,767 | 11,675,094 | 24,734,943 | |
|
Calculation of Non-GAAP Operating Income, Non-GAAP Net Income and Non-GAAP Net Income per share (unaudited) |
|||||
| (In thousands, except share and per share data) | |||||
| Three Months Ended September 30, | Nine Months Ended September 30, | ||||
| 2009 | 2010 | 2009 | 2010 | ||
| GAAP Income from operations | $ 1,997 | $ 5,047 | $ 6,769 | $ 11,775 | |
| Add Back: | |||||
|
Amortization of acquired intangibles included in cost of revenue |
104 | 29 | 311 | 237 | |
|
Amortization of acquired intangibles included in operating expense |
82 | 82 | 246 | 246 | |
| Stock-based compensation expense | 901 | 1,296 | 2,116 | 3,536 | |
| Non-GAAP Operating income | 3,084 | 6,454 | 9,442 | 15,794 | |
| Other income (expense), net | (99) | 136 | (234) | 354 | |
| Non-GAAP Income before provision for income taxes | 2,985 | 6,590 | 9,208 | 16,148 | |
|
Provision for income taxes (For the nine months ended September 30, 2010, excludes a tax benefit for the reversal of a valuation allowance related to U.S. and certain foreign deferred tax assets) |
(48) | (1,188) | (212) | (1,989) | |
| Non-GAAP Net income | $ 2,937 | $ 5,402 | $ 8,996 | $ 14,159 | |
| Non-GAAP Diluted net income per share: | $ 0.12 | $ 0.22 | $ 0.45 | $ 0.57 | |
|
Diluted weighted average shares outstanding used in computing per share amounts: |
24,279,002 | 24,882,767 | 20,141,826 | 24,734,943 | |
| Stock-Based Compensation Expense | |||||
| (In thousands) | |||||
| Three Months Ended September 30, | Nine Months Ended September 30, | ||||
| 2009 | 2010 | 2009 | 2010 | ||
| Stock-based compensation expense: | |||||
| Cost of revenue | $ 9 | $ 59 | $ 38 | $ 196 | |
| Research and development | 251 | 174 | 427 | 447 | |
| Sales and marketing | 221 | 431 | 679 | 1,043 | |
| General and administrative | 420 | 632 | 972 | 1,850 | |
| Total stock based-compensation | $ 901 | $ 1,296 | $ 2,116 | $ 3,536 | |
| LogMeIn, Inc. | ||||
| Condensed Consolidated Statements of Cash Flows (unaudited) | ||||
| (In thousands) | ||||
| Three Months Ended September 30, | Nine Months Ended September 30, | |||
| 2009 | 2010 | 2009 | 2010 | |
| Cash flows from operating activities | ||||
| Net income | $ 1,850 | $ 3,995 | $ 6,323 | $ 15,712 |
|
Adjustments to reconcile net income to net cash provided by operating activities: |
||||
| Depreciation and amortization | 802 | 877 | 2,279 | 2,737 |
| Amortization of premiums on investments | -- | 60 | -- | 160 |
| Provision for bad debts | 30 | 23 | 85 | 65 |
| Deferred income taxes | 4 | 1,125 | 12 | (3,756) |
| Income tax benefit from the exercise of stock options | -- | (1,713) | -- | (2,899) |
| Stock-based compensation | 901 | 1,296 | 2,116 | 3,536 |
| Loss (gain) on disposal of equipment | -- | -- | 1 | (2) |
| Changes in assets and liabilities: | ||||
| Accounts receivable | 733 | (1,971) | 185 | (1,742) |
| Prepaid expenses and other current assets | (251) | (453) | (459) | (326) |
| Other assets | 13 | (4) | (10) | 6 |
| Accounts payable | 541 | 986 | 479 | 850 |
| Accrued liabilities | 931 | 660 | 1,474 | 1,614 |
| Deferred revenue | 1,415 | 2,078 | 3,605 | 6,359 |
| Other long-term liabilities | 101 | 72 | 348 | (124) |
| Net cash provided by operating activities | 7,070 | 7,031 | 16,438 | 22,190 |
| Cash flows from investing activities | ||||
| Purchases of marketable securities | -- | (50,041) | -- | (155,388) |
| Proceeds from maturity of marketable securities | -- | 45,000 | -- | 105,000 |
| Purchases of property and equipment | (815) | (1,096) | (2,927) | (2,434) |
| Intangible asset additions | -- | (182) | -- | (377) |
| (Increase) decrease in restricted cash and deposits | (1) | 5 | (3) | 5 |
| Net cash used in investing activities | (816) | (6,314) | (2,930) | (53,194) |
| Cash flows from financing activities | ||||
|
Proceeds from issuance of common stock in connection with initial public offering, net of issuance costs of $1,273 |
84,453 | -- | 84,287 | -- |
|
Payments of issuance costs related to secondary offering of common stock |
-- | 14 | -- | (196) |
|
Proceeds from issuance of common stock upon option exercises |
99 | 1,411 | 166 | 3,776 |
| Income tax benefit from the exercise of stock options | -- | 1,713 | -- | 2,899 |
| Net cash provided by financing activities | 84,552 | 3,138 | 84,453 | 6,479 |
|
Effect of exchange rate changes on cash and cash equivalents and restricted cash |
85 | 586 | 133 | (125) |
| Net increase (decrease) in cash and cash equivalents | 90,891 | 4,441 | 98,094 | (24,650) |
| Cash and cash equivalents, beginning of period | 30,116 | 71,199 | 22,913 | 100,290 |
| Cash and cash equivalents, end of period | $ 121,007 | $ 75,640 | $ 121,007 | $ 75,640 |
| Calculation of Non-GAAP Cash Flows from Operating Activities (unaudited) | ||||
| (In thousands) | ||||
| Three Months Ended September 30, | Nine Months Ended September 30, | |||
| 2009 | 2010 | 2009 | 2010 | |
| GAAP Cash flows from operating activities | $ 7,070 | $ 7,031 | $ 16,438 | $ 22,190 |
| Add Back: | ||||
| Non-cash income tax benefit from exercise of stock options | -- | 1,713 | -- | 2,899 |
| Non-GAAP Adjusted Cash flows from operating activities | $ 7,070 | $ 8,744 | $ 16,438 | $ 25,089 |