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LogMeIn Announces Fourth Quarter and Fiscal Year 2019 Results

BOSTON, Feb. 13, 2020 (GLOBE NEWSWIRE) -- LogMeIn, Inc. (LOGM), a leading provider of cloud-based connectivity, today announced its results for the fourth quarter and fiscal year ended December 31, 2019.

Fourth quarter 2019 highlights include:

  • GAAP revenue was $322.7 million and non-GAAP revenue was $322.9 million

  • GAAP net loss was $4.1 million or ($0.08) per share and non-GAAP net income was $69.8 million or $1.43 per diluted share

  • EBITDA was $79.4 million or 24.6% of GAAP revenue and Adjusted EBITDA was $111.1 million or 34.4% of non-GAAP revenue

  • Cash flow from operations was $74.5 million or 23.1% of non-GAAP revenue, and adjusted free cash flow was $62.6 million or 19.4% of non-GAAP revenue

  • Total GAAP deferred revenue was $408.2 million

  • The Company closed the quarter with cash and cash equivalents of $128.0 million and $200.0 million of borrowings under its existing credit agreement

Fiscal year 2019 highlights include:

  • GAAP revenue was $1.260 billion and non-GAAP revenue was $1.262 billion

  • GAAP net loss was $14.6 million or ($0.29) per share and non-GAAP net income was $256.9 million or $5.15 per diluted share

  • EBITDA was $302.9 million or 24.0% of GAAP revenue and Adjusted EBITDA was $412.7 million or 32.7% of non-GAAP revenue

  • Cash flow from operations was $360.8 million or 28.6% of non-GAAP revenue and adjusted free cash flow was $308.9 million or 24.5% of non-GAAP revenue

  • $273.1 million returned to stockholders with $208.5 million of share repurchases and $64.6 million of dividends

Conference Call and Financial Outlook
LogMeIn will not be holding a conference call or be providing a financial outlook due to the Company’s previously announced proposed transaction with affiliates of Francisco Partners and Evergreen Coast Capital Corp., the private equity affiliate of Elliott Management Corporation. Additional information about the proposed transaction can be found in the definitive proxy statement which was filed with the Securities and Exchange Commission (the “SEC”) on February 7, 2020.

Where to Find Additional Business and Financial Information
Additional information regarding the Company’s fourth quarter and fiscal year 2019 results, financial condition and operations, including details regarding a global restructuring plan initiated by the Company in the first quarter of 2020 to help fund its strategic initiatives, can be found in the Form 8-K filed in connection with this press release as well as the Company’s Annual Report on Form 10-K to be filed on February 14, 2020, both of which will be available on the SEC’s website, http://www.sec.gov, and the Company’s investor relations website.

Non-GAAP Financial Measures
This press release contains non-GAAP financial measures including non-GAAP revenue, EBITDA, EBITDA margin, 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, adjusted cash flow from operations, and adjusted free cash flow.

  • Non-GAAP revenue excludes the impact of the fair value acquisition accounting adjustment on acquired deferred revenue.

  • EBITDA is GAAP net income (loss) excluding interest, income taxes, other (expense) income, net, and depreciation and amortization expense.

  • EBITDA margin is calculated by dividing EBITDA by revenue.

  • Adjusted EBITDA is EBITDA excluding the impact of the fair value acquisition accounting adjustment on acquired deferred revenue, acquisition-related costs, merger-related costs, gain on disposition of non-core assets, stock-based compensation expense, restructuring charges, and litigation-related expense.

  • Adjusted EBITDA margin is calculated by dividing adjusted EBITDA by non-GAAP revenue, or GAAP revenue if not different.

  • Non-GAAP operating income excludes the impact of the fair value acquisition accounting adjustment on acquired deferred revenue, acquisition related costs and amortization, merger-related costs, gain on disposition of non-core assets, stock-based compensation expense, restructuring charges, and litigation-related expense and includes amortization expense for acquired company internally capitalized software development costs that were adjusted in acquisition accounting.

  • Non-GAAP provision for income taxes excludes the tax impact of the fair value acquisition accounting adjustment on acquired deferred revenue, acquisition-related costs and amortization, merger-related costs, gain on disposition of non-core assets, stock-based compensation expense, restructuring charges, litigation-related expense, discrete integration related tax impacts, and the tax impact related to the enactment of the U.S. Tax Cuts and Jobs Act of 2017, and includes the tax impact of amortization expense for acquired company internally capitalized software development costs that were adjusted in acquisition accounting.

  • Non-GAAP net income and non-GAAP net income per diluted share reflects the adjustments noted in non-GAAP operating income and non-GAAP provision for income taxes above.

  • Adjusted cash flow from operations excludes acquisition retention-based bonus, litigation, restructuring, acquisition-related payments and transaction and transition-related tax payments.

  • Adjusted free cash flow is adjusted cash flow from operations excluding purchases of property and equipment and intangible asset additions.

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, 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. (LOGM) simplifies how people connect with each other and the world around them to drive meaningful interactions, deepen relationships, and create better outcomes for individuals and businesses. One of the world’s top 10 public SaaS companies, and a market leader in unified communications and collaboration, identity and access management, and customer engagement and support solutions, LogMeIn has millions of customers spanning virtually every country across the globe. LogMeIn is headquartered in Boston, Massachusetts with additional locations in North America, South America, Europe, Asia and Australia.

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,

December 31,

2018

2019

ASSETS

Current assets:

Cash and cash equivalents

$

148,652

$

128,005

Accounts receivable, net

95,354

107,595

Prepaid expenses and other current assets

83,887

89,351

Total current assets

327,893

324,951

Property and equipment, net

98,238

99,157

Operating lease assets

-

99,026

Restricted cash

1,840

1,883

Intangibles, net

1,059,988

840,427

Goodwill

2,400,390

2,414,287

Other assets

41,545

68,272

Deferred tax assets

6,059

7,994

Total assets

$

3,935,953

$

3,855,997

LIABILITIES AND EQUITY

Current liabilities:

Accounts payable

$

35,447

$

52,104

Current operating lease liabilities

-

18,470

Accrued liabilities

119,379

161,996

Deferred revenue, current portion

369,780

390,087

Total current liabilities

524,606

622,657

Long-term debt

200,000

200,000

Deferred revenue, net of current portion

9,518

18,076

Deferred tax liabilities

201,212

170,482

Non-current operating lease liabilities

-

88,674

Other long-term liabilities

25,929

15,400

Total liabilities

961,265

1,115,289

Equity:

Common stock

567

573

Additional paid-in capital

3,316,603

3,369,893

Retained earnings

84,043

4,931

Accumulated other comprehensive income (loss)

2,133

684

Treasury stock

(428,658

)

(635,373

)

Total equity

2,974,688

2,740,708

Total liabilities and equity

$

3,935,953

$

3,855,997


LogMeIn, Inc.

Condensed Consolidated Statements of Operations (unaudited)

(In thousands, except per share data)

Three Months Ended December 31,

Twelve Months Ended December 31,

2018

2019

2018

2019

Revenue

$

310,198

$

322,680

$

1,203,992

$

1,260,385

Cost of revenue

72,853

83,980

281,481

323,665

Gross profit

237,345

238,700

922,511

936,720

Operating expenses:

Research and development

40,153

39,951

169,409

160,499

Sales and marketing

100,399

115,015

382,997

461,078

General and administrative

33,462

41,401

145,453

144,780

Restructuring charge

-

(134

)

-

14,468

Gain on disposition of assets

-

-

(33,910

)

-

Amortization of acquired intangibles

43,841

39,312

172,539

157,569

Total operating expenses

217,855

235,545

836,488

938,394

Income (loss) from operations

19,490

3,155

86,023

(1,674

)

Interest income

337

276

1,671

1,651

Interest expense

(2,128

)

(1,930

)

(6,342

)

(8,247

)

Other income (expense), net

(154

)

(401

)

(556

)

(588

)

Income (loss) before income taxes

17,545

1,100

80,796

(8,858

)

(Provision for) benefit from income taxes

7,843

(5,202

)

(6,425

)

(5,697

)

Net income (loss)

$

25,388

$

(4,102

)

$

74,371

$

(14,555

)

Net income (loss) per share:

Basic

$

0.50

$

(0.08

)

$

1.44

$

(0.29

)

Diluted

$

0.49

$

(0.08

)

$

1.42

$

(0.29

)

Weighted average shares outstanding:

Basic

50,995

48,696

51,814

49,586

Diluted

51,353

48,696

52,496

49,586


LogMeIn, Inc.

Calculation of Non-GAAP Revenue (unaudited)

Three Months Ended December 31,

Twelve Months Ended December 31,

2018

2019

2018

2019

(in thousands)

(in thousands)

GAAP Revenue

$

310,198

$

322,680

$

1,203,992

$

1,260,385

Add Back:

Effect of acquisition accounting on fair value of acquired deferred revenue

533

253

3,718

1,231

Non-GAAP Revenue

$

310,731

$

322,933

$

1,207,710

$

1,261,616

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

Three Months Ended December 31,

Twelve Months Ended December 31,

2018

2019

2018

2019

(In thousands, except per share data)

(In thousands, except per share data)

GAAP Net income (loss) from operations

$

19,490

$

3,155

$

86,023

$

(1,674

)

Add Back:

Effect of acquisition accounting on fair value of acquired deferred revenue

533

253

3,718

1,231

Stock-based compensation expense

16,914

17,361

65,734

68,206

Acquisition related costs

3,806

2,665

22,880

12,926

Merger related costs

-

10,919

-

10,919

Restructuring charge

-

(134

)

-

14,468

Litigation related expenses

107

623

584

2,029

Amortization of acquired intangibles

62,158

60,139

245,244

241,263

Gain on disposition of assets

-

-

(33,910

)

-

Effect of acquisition accounting on internally capitalized software development costs

(749

)

-

(8,385

)

-

Non-GAAP Operating income

102,259

94,981

381,888

349,368

Interest and other expense, net

(1,945

)

(2,055

)

(5,227

)

(7,184

)

Non-GAAP Income before income taxes

100,314

92,926

376,661

342,184

Non-GAAP Provision for income taxes

(24,828

)

(23,148

)

(93,637

)

(85,238

)

Non-GAAP Net income

$

75,486

$

69,778

$

283,024

$

256,946

Non-GAAP net income per diluted share

$

1.47

$

1.43

$

5.39

$

5.15

Diluted weighted average shares outstanding used in computing per share amounts

51,353

48,938

52,496

49,900

Calculation of EBITDA and Adjusted EBITDA (unaudited)

Three Months Ended December 31,

Twelve Months Ended December 31,

2018

2019

2018

2019

(in thousands)

(in thousands)

GAAP Net income (loss)

$

25,388

$

(4,102

)

$

74,371

$

(14,555

)

Add Back:

Interest and other expense, net

1,945

2,055

5,227

7,184

Income tax provision (benefit)

(7,843

)

5,202

6,425

5,697

Amortization of acquired intangibles

62,158

60,139

245,244

241,263

Depreciation and amortization expense

15,731

16,102

55,827

63,333

EBITDA

97,379

79,396

387,094

302,922

Add Back:

Effect of acquisition accounting on fair value of acquired deferred revenue

533

253

3,718

1,231

Stock-based compensation expense

16,914

17,361

65,734

68,206

Gain on disposition of assets

-

-

(33,910

)

-

Acquisition related costs

3,806

2,665

22,880

12,926

Merger related costs

-

10,919

-

10,919

Restructuring charge

-

(134

)

-

14,468

Litigation related expenses

107

623

584

2,029

Adjusted EBITDA

$

118,739

$

111,083

$

446,100

$

412,701

EBITDA Margin

31.4

%

24.6

%

32.2

%

24.0

%

Adjusted EBITDA Margin

38.2

%

34.4

%

36.9

%

32.7

%

Calculation of Adjusted Cash Flows from Operations and Adjusted Free Cash Flow (unaudited)

Three Months Ended December 31,

Twelve Months Ended December 31,

2018

2019

2018

2019

(in thousands)

(in thousands)

GAAP Cash flows from operations

$

73,175

$

74,481

$

404,039

$

360,849

Add Back:

Litigation related payments

305

676

1,467

1,498

Acquisition retention-based bonus

577

1,198

3,720

7,779

Restructuring payments

-

655

-

10,153

Tax payment for gain on Xively disposition and integration-related IP realignment

10,862

-

15,098

-

Transaction related payments (acquisitions and dispositions)

1,890

1,542

18,684

3,859

Adjusted cash flows from operations

86,809

78,552

443,008

384,138

Purchases of property and equipment

(9,375

)

(5,625

)

(30,965

)

(35,438

)

Intangible asset additions

(8,081

)

(10,368

)

(34,219

)

(39,789

)

Adjusted Free Cash Flow

$

69,353

$

62,559

$

377,824

$

308,911

GAAP Cash flows from operations as a % of Non-GAAP Revenue

23.5

%

23.1

%

33.5

%

28.6

%

Adjusted Cash flows from operations as a % of Non-GAAP Revenue

27.9

%

24.3

%

36.7

%

30.4

%

Adjusted Free Cash Flow as a % of Non-GAAP Revenue

22.3

%

19.4

%

31.3

%

24.5

%

Stock-Based Compensation Expense (unaudited)

Three Months Ended December 31,

Twelve Months Ended December 31,

2018

2019

2018

2019

(in thousands)

(in thousands)

Cost of revenue

$

1,242

$

1,272

$

4,997

$

4,862

Research and development

4,637

4,749

18,869

17,574

Sales and marketing

4,207

4,718

15,995

17,930

General and administrative

6,828

6,622

25,873

27,840

Total stock based-compensation

$

16,914

$

17,361

$

65,734

$

68,206


LogMeIn, Inc.

Condensed Consolidated Statements of Cash Flows (unaudited)

(In thousands)

Three Months Ended December 31,

Twelve Months Ended December 31,

2018

2019

2018

2019

Cash flows from operating activities

Net income (loss)

$

25,388

$

(4,102

)

$

74,371

$

(14,555

)

Adjustments to reconcile net income (loss) to net cash

provided by operating activities:

Stock-based compensation

16,914

17,361

65,734

68,206

Depreciation and amortization

77,889

76,241

301,071

304,596

Gain on disposition of assets, excluding transaction costs

-

-

(36,281

)

-

Change in fair value of contingent consideration liability

-

268

-

849

Restructuring-related property and equipment charges

-

-

-

3,164

Benefit from deferred income taxes

(23,395

)

(1,597

)

(57,456

)

(35,698

)

Other, net

490

502

1,771

1,776

Changes in assets and liabilities, excluding effect of acquisitions and dispositions:

Accounts receivable

(8,551

)

(26,129

)

7,751

(13,521

)

Prepaid expenses and other current assets

(22,145

)

(7,583

)

(13,671

)

(12,998

)

Other assets

(3,765

)

(6,760

)

(16,596

)

(27,147

)

Accounts payable

(2,471

)

(3,987

)

11,104

17,464

Accrued liabilities

5,697

13,738

26,811

37,884

Deferred revenue

7,385

11,383

35,416

29,047

Other long-term liabilities

(261

)

5,146

4,014

1,782

Net cash provided by operating activities

73,175

74,481

404,039

360,849

Cash flows from investing activities

Purchases of property and equipment

(9,375

)

(5,625

)

(30,965

)

(35,438

)

Intangible asset additions

(8,081

)

(10,368

)

(34,219

)

(39,789

)

Acquisition of businesses, net of cash acquired

-

-

(342,072

)

(22,463

)

Proceeds from disposition of assets

-

-

42,394

7,500

Net cash provided by (used in) investing activities

(17,456

)

(15,993

)

(364,862

)

(90,190

)

Cash flows from financing activities

Borrowings (repayments) under credit facility

-

-

200,000

-

Proceeds from issuance of common stock upon option exercises and employee stock purchase plan

-

5,071

3,831

5,204

Payments of withholding taxes in connection with restricted stock unit vesting

(1,126

)

(1,646

)

(30,617

)

(20,114

)

Payment of contingent consideration

-

-

-

(1,857

)

Dividends paid on common stock

(15,302

)

(15,821

)

(62,202

)

(64,557

)

Purchase of treasury stock

(56,914

)

(39,316

)

(247,144

)

(208,504

)

Net cash provided by (used in) financing activities

(73,342

)

(51,712

)

(136,132

)

(289,828

)

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

(1,336

)

2,081

(6,762

)

(1,435

)

Net increase (decrease) in cash, cash equivalents and restricted cash

(18,959

)

8,857

(103,717

)

(20,604

)

Cash, cash equivalents and restricted cash, beginning of period

169,451

121,031

254,209

150,492

Cash, cash equivalents and restricted cash, end of period

$

150,492

$

129,888

$

150,492

$

129,888