updated 4/27/2011 4:18:20 PM ET 2011-04-27T20:18:20

WOBURN, Mass., April 27, 2011 (GLOBE NEWSWIRE) -- 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 Company's 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 Company's 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 Google's 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 LogMeIn's motion for summary judgment of non-infringement in the patent infringement lawsuit brought by 01 Communique and the trial was removed from the court's 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 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 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 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™ and Android™ tablets, and digital displays. Designed for consumers, mobile professionals and IT organizations, LogMeIn's 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 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, the Company's ability to meet shifting demand in the support landscape, the Company's expectations regarding litigation costs for the remainder of the fiscal year and the Company's 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 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, including whether 01 Communique appeals the summary judgment decision and the result of any appeal, 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, 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)
     
     
  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)
     
     
  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)
     
     
  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)
     
     
     
  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)
     
     
  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 
CONTACT: Investors
         Erica Abrams or Matthew Hunt
         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

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