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LogMeIn Announces Fourth Quarter and Fiscal Year 2012 Results



LogMeIn Announces Fourth Quarter and Fiscal Year 2012 Results

Reports Annual Revenue of $138.8 Million; Q4 Revenue of $37.0 Million;
Announces $25 Million Share Repurchase Program

WOBURN, Mass., Feb. 14, 2013 (GLOBE NEWSWIRE) -- LogMeIn, Inc. (Nasdaq:LOGM),
a leading provider of essential cloud and mobile services, today announced its
results for the fourth quarter and fiscal year ended December 31, 2012.

For the fourth quarter of 2012, total revenue increased 14 percent to $37.0
million from $32.3 million reported in the fourth quarter of 2011. Total
subscription revenue increased 20 percent to $36.5 million, up from $30.4
million in the fourth quarter of 2011.

GAAP net income for the fourth quarter of 2012 was $2.2 million, or $0.09 per
diluted share. This compares to GAAP net income of $2.0 million, or $0.08 per
diluted share, reported in the fourth quarter of 2011.

Non-GAAP net income for the fourth quarter of 2012 was $6.0 million, or $0.24
per diluted share, and reflects a tax benefit associated with the reversal of
a valuation allowance related to certain deferred tax assets. Non-GAAP net
income excludes $4.4 million in stock compensation expense, $1.1 million in
patent litigation related expense and $1.1 million in acquisition related
costs and amortization. This compares to Non-GAAP net income of $4.9 million,
or $0.19 per diluted share, reported in the fourth quarter of 2011. 

For fiscal year 2012, revenue increased 16 percent to $138.8 million from
$119.5 million in 2011. Total subscription revenue increased by 23 percent to
$136.7 million, up from $110.9 million in 2011.

GAAP net income for fiscal year 2012 was $3.6 million or $0.14 per diluted
share, as compared to $5.8 million, or $0.23 per diluted share, reported in
fiscal year 2011. 

Non-GAAP net income for fiscal year 2012 was $18.4 million, or $0.72 per
diluted share, as compared to $17.3 million, or $0.69 per diluted share,
reported in fiscal year 2011.  Non-GAAP net income for fiscal year 2012
excludes $14.8 million in stock compensation expense, $1.5 million in patent
litigation related expense and $5.5 million in acquisition related costs and
amortization.

Non-GAAP cash flow from operations for the fourth quarter of 2012 was $6.2
million, or 17 percent of revenue. For fiscal year 2012, non-GAAP cash flow
from operations was $30.6 million, or 22 percent of revenue.  The Company
closed 2012 with cash, cash equivalents and short-term investments of $212.1
million.

Additionally, the Company reported total deferred revenue of $69.6 million, an
increase of 20 percent from the $58.3 million reported at the end of the prior
fiscal year and an increase of $4.4 million, or 7 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.

The Company also announced that its Board of Directors approved a $25 million
share repurchase program. Under the share repurchase program, LogMeIn is
authorized to repurchase up to $25 million of its outstanding shares of common
stock. Any share repurchases made pursuant to the program will be made from
time to time in the open market, in privately negotiated transactions or
otherwise. The timing and amount of any share repurchases will be determined
by the Company's management based on its evaluation of market conditions, the
trading price of the stock, regulatory requirements and other factors. The
Company expects to fund the share repurchase program from its cash and cash
equivalents. The share repurchase program may be suspended, modified or
discontinued at any time at the Company's discretion without prior notice.  

"In the fourth quarter, a record number of net new premium subscribers and
strong growth in our newer cloud services helped us deliver revenue and
earnings per share that exceeded our guidance," said Michael Simon, president
and CEO of LogMeIn. "Year-over-year subscription revenue growth was up 20
percent in the quarter, led by especially strong demand for our Access and
Collaboration cloud services, most notably join.me. We also added
approximately 27,000 net new premium subscribers, increasing our total premium
customers to approximately 462,000, while attracting approximately 2.4 million
first time users of our services."

"We plan to increase our investment in our Access and Collaboration cloud
services this year to better capitalize on growing demand in this
multi-billion dollar market. Our online meeting product, join.me, continues to
be our fastest growing product. And we believe the recent introduction of
Cubby – our latest addition to our Access and Collaboration product group --
gives LogMeIn a compelling and complementary suite of cloud services for
today's mobile workplace. Together, we believe these products will be a key
driver of growth for LogMeIn in 2013 and beyond."

Business Outlook

Based on information available as of February 14, 2013, LogMeIn is issuing
guidance for the first quarter 2013 and fiscal year 2013. 

First Quarter 2013: The Company expects first quarter revenue to be in the
range of $36.0 million to $36.5 million.

Non-GAAP net income is expected to be in the range of $2.2 million to $2.6
million, or $0.09 to $0.10 per diluted share. Non-GAAP net income excludes an
estimated $5.4 million of stock compensation expense, $3.0 million in patent
litigation related expenses, and $1.0 million in acquisition related costs and
amortization.

Non-GAAP net income for the first quarter assumes an effective tax rate of 50
percent. Non-GAAP net income per diluted share for the first quarter of 2013
is based on an estimated 25.5 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 $5.0 million to $5.5 million, or $0.20 to $0.22 per share. 

The GAAP net loss for the first quarter assumes income tax expense of $1.2
million to $1.4 million. GAAP net loss per share for the first quarter of 2013
is based on an estimated 24.7 million weighted average shares outstanding.

Fiscal year 2013: The Company expects full year 2013 revenue to be in the
range of $154.0 million to $157.0 million. 

Non-GAAP net income is expected to be in the range of $11.0 million to $12.5
million, or $0.43 to $0.49 per diluted share. Non-GAAP net income excludes an
estimated $20.7 million in stock compensation expense, $3.8 million in patent
litigation related expenses, and $3.3 million in acquisition related costs and
amortization. 

Non-GAAP net income for the full fiscal year 2013 assumes an effective tax
rate of 50 percent. Non-GAAP net income per diluted share for 2013 is based on
an estimated 25.7 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 $6.5 million to $9.0 million, or $0.26 to $0.36 per
share.  

The GAAP net loss for the full year assumes income tax expense of $3.5 million
to $4.0 million. GAAP net loss per share for 2013 is based on an estimated
25.1 million weighted average shares outstanding.

Conference Call Information for Today, Thursday, February 14, 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 877-941-9205 (for
the U.S. and Canada) or 480-629-9819 (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 14, 2013 until 11:59 p.m. Eastern Time on February 22, 2013,
by dialing 800-406-7325 (for the U.S. and Canada) or 303-590-3030 (for
international callers) and entering passcode 4592333#.

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, patent litigation related expense, and expense related to a state
sales tax settlement. Non-GAAP provision for income taxes excludes the tax
impact of acquisition related costs and amortization, stock compensation
expense, patent litigation related expense, and expense related to a state
sales tax settlement. Non-GAAP net income and non-GAAP net income per diluted
share exclude acquisition related costs and amortization, stock compensation
expense, patent litigation related expense, and expense related to a state
sales tax settlement. Non-GAAP cash flow from operations excludes payments
related to patent litigation related costs, acquisition related costs, and a
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 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 just outside of Boston, Massachusetts, USA with offices in
Australia, Hungary, India, Ireland, 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 popularity,
value and effectiveness of the Company's products, the Company's intent to
expand its portfolio of products and the success of such products, the
Company's investment in new products, the expected benefits of continued
investment in cloud and mobile services, the Company's growth, including
growth in the second half of 2013, customer growth, and the Company's
financial guidance for fiscal year 2013 and the first 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 and BoldChat are trademarks or registered trademarks
          of LogMeIn in the US and other countries around the world.

LogMeIn, Inc.
Condensed Consolidated Balance Sheets (unaudited)
(In thousands)
                                                        
                                                        
                                          December 31, December 31,
                                          2011         2012
                                                        
ASSETS                                                  
Current assets:                                         
Cash and cash equivalents                  $ 103,604    $ 111,932 
Marketable securities                      95,040       100,161 
Accounts receivable, net                   8,747        13,231 
Prepaid expenses and other current assets  2,412        3,620 
Deferred income taxes                      1,980        3,214 
Total current assets                       211,783      232,158 
Property and equipment, net                5,203        6,576 
Restricted cash                            370          3,807 
Intangibles, net                           3,260        6,368 
Goodwill                                   7,259        18,883 
Other assets                               242          1,550 
Deferred income taxes                      3,940        10,196 
Total assets                               $ 232,057    $ 279,538 
                                                        
LIABILITIES AND EQUITY                                  
Current liabilities:                                    
Accounts payable                           $ 6,275      $ 7,773 
Accrued liabilities                        10,473       16,657 
Deferred revenue, current portion          55,962       65,875 
Total current liabilities                  72,710       90,305 
Deferred revenue, net of current portion   2,302        3,774 
Other long-term liabilities                1,239        822 
Total liabilities                          76,251       94,901 
Commitments and contingencies                           
Preferred stock                            --           -- 
Equity:                                                 
Common stock                               246          248 
Additional paid-in capital                 154,440      178,546 
Retained earnings                          2,677        6,243 
Accumulated other comprehensive loss       (1,557)      (400)
Total equity                               155,806      184,637 
Total liabilities and equity               $ 232,057    $ 279,538 

 
LogMeIn, Inc.
Condensed Consolidated Statements of Income (unaudited)
(In thousands, except share and per share data)
                                                                   
                                                                   
                           Three Months Ended        Twelve Months Ended
                           December 31,              December 31,
                           2011         2012         2011         2012
                                                                   
Revenue                     $ 32,322     $ 36,984     $ 119,461    $ 138,837 
Cost of revenue             2,994        3,975        10,574       14,504 
Gross profit                29,328       33,009       108,887      124,333 
Operating expenses                                                 
Research and development    5,695        6,657        20,780       26,361 
Sales and marketing         15,501       18,523       57,156       70,058 
General and administrative  4,398        6,649        19,975       21,338 
Legal settlements           --           --           1,250        -- 
Amortization of             11           146          228          565 
intangibles
Total operating expenses    25,605       31,975       99,389       118,322 
Income from operations      3,723        1,034        9,498        6,011 
                                                                   
Interest income, net        201          210          862          887 
Other expense               (158)        (131)        (565)        (641)
Income before income taxes  3,766        1,113        9,795        6,257 
(Provision for) benefit     (1,749)      1,083        (4,034)      (2,691)
from income taxes
                                                                   
Net income                  $ 2,017      $ 2,196      $ 5,761      $ 3,566 
                                                                   
Net income per share:                                              
basic                       $ 0.08       $ 0.09       $ 0.24       $ 0.14 
diluted                     $ 0.08       $ 0.09       $ 0.23       $ 0.14 
Weighted average shares                                            
outstanding:
basic                      24,417,473   24,806,471   24,175,621   24,711,242
diluted                    25,290,390   25,292,822   25,154,599   25,356,305
                                                                   
                                                                   
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        Twelve Months Ended
                           December 31,              December 31,
                           2011         2012         2011         2012
                                                                   
GAAP Income from            $ 3,723      $ 1,034      $ 9,498      $ 6,011 
operations
                                                                   
Add Back:                                                          
Stock-based compensation    2,389        4,385        8,925        14,792 
expense
Patent litigation related   117          1,114        4,497        1,470 
expenses
Acquisition related costs   1,231        1,133        2,682        5,450 
and amortization 
State sales tax settlement  --           --           1,300        -- 
                                                                   
Non-GAAP Operating income   7,460        7,666        26,902       27,723 
                                                                   
Other income, net           43           79           297          246 
                                                                   
Non-GAAP Income before      7,503        7,745        27,199       27,969 
provision for income taxes
                                                                   
Non-GAAP Provision for      (2,622)      (1,756)      (9,941)      (9,613)
income taxes
                                                                   
Non-GAAP Net income         $ 4,881      $ 5,989      $ 17,258     $ 18,356 
                                                                   
Non-GAAP Diluted net        $ 0.19       $ 0.24       $ 0.69       $ 0.72 
income per share:
Diluted weighted average
shares outstanding used in 25,290,390   25,292,822   25,154,599   25,356,305
computing per share
amounts:
                                                                   
                                                                   
                                                                   
                                                                   
Stock-Based Compensation Expense
(In thousands)
                                                                   
                                                                   
                           Three Months Ended        Twelve Months Ended
                           December 31,              December 31,
                           2011         2012         2011         2012
                                                                   
Stock-based compensation                                           
expense:
Cost of revenue             $ 79         $ 135        $ 316        $ 484 
Research and development    382          825          1,477        2,826 
Sales and marketing         716          1,592        2,700        4,962 
General and administrative  1,212        1,833        4,432        6,520 
Total stock                 $ 2,389      $ 4,385      $ 8,925      $ 14,792 
based-compensation

 
LogMeIn, Inc.
Condensed Consolidated Statements of Cash Flows (unaudited)
(In thousands)
                                                                    
                                                                    
                           Three Months Ended December Twelve Months Ended
                           31,                         December 31,
                           2011          2012          2011        2012
Cash flows from operating                                           
activities
Net income                  $ 2,017       $ 2,196       $ 5,761     $ 3,566 
Adjustments to reconcile
net income to net cash                                              
provided by operating
activities:
Depreciation and            1,126         1,652         4,403       6,100 
amortization
Amortization of premiums    14            22            134         54 
on investments
Provision for bad debts     40            22            85          100 
Deferred income taxes       1,707         (3,691)       3,794       (831)
Income tax benefit from
the exercise of stock       (2,221)       (1,991)       (5,887)     (6,634)
options
Stock-based compensation    2,389         4,385         8,925       14,792 
Loss (gain) on disposal of  --            13            (1)         12 
equipment
Changes in assets and                                               
liabilities:
Accounts receivable         (2,449)       (2,666)       (4,088)     (4,471)
Prepaid expenses and other  202           (179)         494         (1,070)
current assets
Other assets                13            (1,307)       (215)       (1,308)
Accounts payable            2,231         1,543         3,787       1,552 
Accrued liabilities         (994)         1,529         (531)       5,816 
Deferred revenue            4,269         4,355         15,471      10,960 
Other long-term             485           180           739         (418)
liabilities
Fair value adjustment to    --            7             --          37 
contingent consideration
Net cash provided by        8,829         6,070         32,871      28,257 
operating activities
Cash flows from investing                                           
activities
Purchases of marketable     (14,999)      (14,986)      (150,066)   (135,085)
securities
Proceeds from sale or
disposal of marketable      10,000        15,000        145,000     130,000 
securities
Purchases of property and   (69)          (1,090)       (2,322)     (5,277)
equipment
Intangible asset additions  (101)         (260)         (346)       (1,049)
Cash paid for acquisition,  --            --            (10,000)    (14,831)
net of cash acquired
Increase in restricted      (1)           --            (26)        (3,558)
cash and deposits
Net cash used in investing  (5,170)       (1,336)       (17,760)    (29,800)
activities
Cash flows from financing                                           
activities
Proceeds from issuance of
common stock upon option    2,975         87            6,207       2,682 
exercises
Income tax benefit from
the exercise of stock       2,221         1,991         5,887       6,635 
options
Payment of contingent       --            --            --          (89)
consideration
Net cash provided by        5,196         2,078         12,094      9,228 
financing activities
Effect of exchange rate
changes on cash and cash    (646)         117           (881)       643 
equivalents and restricted
cash
Net increase in cash and    8,209         6,929         26,324      8,328 
cash equivalents
Cash and cash equivalents,  95,395        105,003       77,280      103,604 
beginning of period
Cash and cash equivalents,  $ 103,604     $ 111,932     $ 103,604   $ 111,932 
end of period
                                                                    
                                                                    
                                                                    
                                                                    
Calculation of Non-GAAP Cash Flows from Operating Activities (unaudited)
(In thousands)
                                                                    
                                                                    
                           Three Months Ended December Twelve Months Ended
                           31,                         December 31,
                           2011          2012          2011        2012
                                                                    
GAAP Cash flows from        $ 8,829       $ 6,070       $ 32,871    $ 28,257 
operating activities
                                                                    
Add Back:                                                           
Patent litigation related   101           89            4,352       399 
payments
Acquisition related         269           28            269         1,969 
payments
State sales tax settlement  1,300         --            1,300       -- 
                                                                    
Cash flows from operating
activities before patent
litigation expenses,        $ 10,499      $ 6,187       $ 38,792    $ 30,625 
acquisition related legal
expense and state sales
tax settlement

CONTACT: Contact Information:
         Investors
         Rob Bradley
         LogMeIn, Inc.
         781-897-1301
         rbradley@LogMeIn.com

         Press
         Craig VerColen
         LogMeIn, Inc.
         781-897-0696
         Press@LogMeIn.com

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