Renewal Rates Rebound; Raises Full Year
Outlook
LogMeIn, Inc. (NASDAQ: LOGM), a leading provider of cloud-based
connectivity, today announced its results for the third quarter
ended September 30, 2018.
Third quarter 2018 highlights include:
- GAAP revenue was $308.9 million and non-GAAP revenue was $309.6
million
- GAAP net income was $12.7 million or $0.24 per diluted share
and non-GAAP net income was $72.9 million or $1.40 per diluted
share
- EBITDA was $93.9 million or 30.4% of GAAP revenue and Adjusted
EBITDA was $115.2 million or 37.2% of non-GAAP revenue
- Cash flow from operations was $73.7 million or 23.8% of
non-GAAP revenue, and adjusted cash flow from operations was $83.5
million or 27.0% of non-GAAP revenue
- Total GAAP deferred revenue was $373.3 million
- The Company closed the quarter with cash and cash equivalents
of $167.6 million and $200.0 million of borrowings under its
existing credit agreement
“LogMeIn had a strong quarter as we saw positive early results
from the steps we took to improve the performance of our
Communications & Collaboration business which had renewal rates
return to historical levels,” said Bill Wagner, President and CEO
of LogMeIn. “We were also pleased by the continued momentum
across all of our key growth areas, including Customer Engagement,
Identity, and Unified Communications, where early results from a
bundled Jive + GoToMeeting offering are helping to drive higher
account penetration and increased revenue per customer.”
Business OutlookBased on information available
as of October 25, 2018, the Company is issuing guidance for the
fourth quarter 2018 and fiscal year 2018.
Fourth Quarter 2018: The Company expects fourth quarter
non-GAAP revenue to be in the range of $306 million to $307
million. The Company expects fourth quarter GAAP revenue to
be in the range of $305 million to $306 million. Non-GAAP
revenue adds back $1 million for the impact of an acquisition
accounting adjustment recorded to reduce acquired deferred revenue
to the fair value of the remaining obligation.
EBITDA is expected to be in the range of $93 million to $94
million, or approximately 31% of GAAP revenue. Adjusted
EBITDA is expected to be in the range of $115 million to $116
million, or approximately 38% of non-GAAP revenue.
Non-GAAP net income is expected to be in the range of $72
million to $73 million, or $1.41 to $1.42 per diluted share.
Non-GAAP net income adds back the non-GAAP revenue adjustment
described above and excludes an estimated $18 million in
stock-based compensation expense, $4 million in acquisition and
litigation-related costs, $62 million of amortization expense of
acquired intangible assets, and includes $1 million of amortization
expense for GoTo’s internally capitalized software development
costs that were adjusted in acquisition accounting to fair value,
as well as the income tax effect of the above items.
Non-GAAP net income for the fourth quarter assumes an effective
tax rate of approximately 25% and GAAP net income assumes a tax
provision of $8 million for the fourth quarter. Non-GAAP and GAAP
net income per diluted share is based on an estimated 51.7 million
fully-diluted weighted average shares outstanding.
Including stock-based compensation expense, acquisition-related
costs and amortization, litigation-related expense, and excluding
the acquisition accounting adjustments to revenue and amortization
expense, the Company expects to report GAAP net income in the range
of $5 million to $6 million, or $0.10 to $0.11 per diluted
share.
Fiscal year 2018: The Company expects full year 2018
non-GAAP revenue to be in the range of $1.203 billion to $1.204
billion. The Company expects full year 2018 GAAP revenue to
be in the range of $1.199 billion to $1.200 billion. Non-GAAP
revenue adds back $4 million for the impact of an acquisition
accounting adjustment recorded to reduce acquired deferred revenue
to the fair value of the remaining obligation.
EBITDA is expected to be in the range of $382 million to $383
million, or approximately 32% of GAAP revenue. Adjusted
EBITDA is expected to be in the range of $442 million to $443
million, or approximately 37% of non-GAAP revenue.
Non-GAAP net income is expected to be in the range of $280
million to $281 million, or $5.33 to $5.34 per diluted share.
Non-GAAP net income adds back the non-GAAP revenue adjustment
described above and excludes an estimated $67 million in
stock-based compensation expense, $23 million in acquisition and
litigation-related costs, $245 million of amortization expense of
acquired intangible assets, a $34 million pre-tax gain associated
with the disposition of a non-core asset and includes $8 million of
amortization expense for GoTo’s internally capitalized software
development costs that were adjusted in acquisition accounting to
fair value, as well as the income tax effect of the above items and
discrete tax items.
Non-GAAP net income for the fiscal year assumes an effective tax
rate of approximately 25% and GAAP net income for the fiscal year
assumes an effective tax rate of approximately 29%. Non-GAAP
and GAAP net income per diluted share is based on an estimated 52.5
million fully-diluted weighted average shares
outstanding.
Including stock-based compensation expense, acquisition-related
costs and amortization, litigation-related expense, and excluding
the acquisition accounting adjustments to revenue and amortization
expense, the Company expects to report GAAP net income in the range
of $54 million to $55 million, or $1.03 to $1.04 per diluted
share.
DividendIn accordance with its previously
announced capital return plan, the Company will pay a $0.30 per
share dividend on November 30, 2018 to stockholders of record as of
November 14, 2018. The Company currently has approximately
51.2 million shares of common stock outstanding.
Conference Call Information for Today, Thursday, October
25, 2018The Company will host a corresponding conference
call and live webcast at 5:00 p.m. Eastern Time today. To
access the conference call, dial 855-719-5007 and enter passcode
5646346. A live webcast will be available on the Investor
Relations section of the Company’s corporate website at
https://www.logmeininc.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 8:00 p.m. Eastern Time on October 25,
2018 until 8:00 p.m. Eastern Time on November 1, 2018, by dialing
719-457-0820 and entering passcode 5646346.
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
and adjusted cash flow from operations.
- Non-GAAP revenue is GAAP revenue excluding the impact of fair
value acquisition accounting adjustment on acquired deferred
revenue.
- EBITDA is GAAP net income excluding provision for income taxes,
interest income, interest expense, and other (expense) income, net,
and depreciation and amortization.
- EBITDA margin is calculated by dividing EBITDA by
revenue.
- Adjusted EBITDA is EBITDA excluding the impact of fair value
acquisition accounting adjustment on acquired deferred revenue,
acquisition-related costs, gain on disposition of non-core assets,
stock-based compensation expense, 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 fair value
acquisition accounting adjustment on acquired deferred revenue,
acquisition related costs and amortization, gain on disposition of
non-core assets, stock-based compensation expense, and
litigation-related expense and includes amortization expense for
GoTo’s internally capitalized software development costs that were
adjusted in acquisition accounting to fair value.
- 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, gain
on disposition of non-core assets, stock-based compensation
expense, 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 GoTo’s internally capitalized software
development costs that were adjusted in acquisition accounting to
fair value.
- 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,
disposition and litigation related payments.
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. (NASDAQ: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
communication & conferencing, identity & access, and
customer engagement & support solutions, LogMeIn has millions
of customers spanning virtually every country across the globe.
LogMeIn is headquartered in Boston with additional locations in
North and South America, Europe, Asia and Australia.
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 improved performance of the Company’s
Communications and Collaboration business and its renewal rates,
the performance of the Company’s key growth areas, including
Customer Engagement, Identity and Unified Communications and the
Company's financial guidance for fiscal year 2018 and the fourth
quarter of 2018. 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, customer adoption of the Company's solutions, the Company’s
ability to execute on its strategic initiatives, the Company’s
ability to integrate acquired products or companies, 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, the effectiveness of the Company’s cybersecurity
measures, 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 intellectual property
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 is a registered trademark of LogMeIn,
Inc. in the US and other countries around the world.
Contact Information:Investors Rob
Bradley LogMeIn,
Inc.781-897-1301rbradley@LogMeIn.com
PressCraig VerColenLogMeIn,
Inc.781-897-0696Press@LogMeIn.com
LogMeIn,
Inc. |
Condensed Consolidated Balance Sheets
(unaudited) |
(In thousands) |
|
|
|
|
|
|
|
December 31, |
|
September 30, |
|
|
|
2017 |
|
|
|
2018 |
|
|
|
|
|
|
ASSETS |
Current assets: |
|
|
|
|
Cash and cash
equivalents |
|
$ |
252,402 |
|
|
$ |
167,626 |
|
Accounts
receivable, net |
|
|
93,949 |
|
|
|
87,673 |
|
Prepaid expenses
and other current assets |
|
|
52,473 |
|
|
|
61,926 |
|
Total current
assets |
|
|
398,824 |
|
|
|
317,225 |
|
Property and equipment,
net |
|
|
92,154 |
|
|
|
92,866 |
|
Restricted cash, net of
current portion |
|
|
1,795 |
|
|
|
1,825 |
|
Intangibles, net |
|
|
1,149,597 |
|
|
|
1,119,867 |
|
Goodwill |
|
|
2,208,725 |
|
|
|
2,404,279 |
|
Other assets |
|
|
6,483 |
|
|
|
38,006 |
|
Deferred tax
assets |
|
|
530 |
|
|
|
719 |
|
Total
assets |
|
$ |
3,858,108 |
|
|
$ |
3,974,787 |
|
|
|
|
|
|
LIABILITIES AND EQUITY |
Current
liabilities: |
|
|
|
|
Accounts
payable |
|
$ |
22,232 |
|
|
$ |
36,658 |
|
Accrued
liabilities |
|
|
82,426 |
|
|
|
112,210 |
|
Deferred
revenue, current portion |
|
|
340,570 |
|
|
|
364,867 |
|
Total current
liabilities |
|
|
445,228 |
|
|
|
513,735 |
|
Long-term debt |
|
|
- |
|
|
|
200,000 |
|
Deferred revenue, net
of current portion |
|
|
6,735 |
|
|
|
8,455 |
|
Deferred tax
liabilities |
|
|
221,407 |
|
|
|
218,396 |
|
Other long-term
liabilities |
|
|
20,997 |
|
|
|
25,465 |
|
Total
liabilities |
|
|
694,367 |
|
|
|
966,051 |
|
Equity: |
|
|
|
|
Common
stock |
|
|
560 |
|
|
|
567 |
|
Additional
paid-in capital |
|
|
3,276,891 |
|
|
|
3,300,815 |
|
Accumulated
earnings |
|
|
50,445 |
|
|
|
73,957 |
|
Accumulated
other comprehensive income |
|
|
15,570 |
|
|
|
5,790 |
|
Treasury
stock |
|
|
(179,725 |
) |
|
|
(372,393 |
) |
Total
equity |
|
|
3,163,741 |
|
|
|
3,008,736 |
|
Total liabilities and
equity |
|
$ |
3,858,108 |
|
|
$ |
3,974,787 |
|
|
|
|
|
|
LogMeIn,
Inc. |
Condensed Consolidated Statements of
Operations (unaudited) |
(In thousands, except per share
data) |
|
|
|
|
|
|
|
|
|
Three Months Ended September 30, |
|
Nine Months Ended September 30, |
|
|
2017 |
|
|
|
2018 |
|
|
|
2017 |
|
|
|
2018 |
|
|
|
|
|
|
|
|
|
Revenue |
$ |
269,267 |
|
|
$ |
308,927 |
|
|
$ |
713,750 |
|
|
$ |
893,794 |
|
Cost of revenue |
|
55,605 |
|
|
|
72,853 |
|
|
|
147,780 |
|
|
|
208,628 |
|
Gross
profit |
|
213,662 |
|
|
|
236,074 |
|
|
|
565,970 |
|
|
|
685,166 |
|
Operating
expenses: |
|
|
|
|
|
|
|
Research and
development |
|
42,603 |
|
|
|
42,220 |
|
|
|
116,435 |
|
|
|
129,256 |
|
Sales and
marketing |
|
89,379 |
|
|
|
95,041 |
|
|
|
258,616 |
|
|
|
282,599 |
|
General and
administrative |
|
37,906 |
|
|
|
37,441 |
|
|
|
120,460 |
|
|
|
111,990 |
|
Gain on
disposition of assets |
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
(33,910 |
) |
Amortization of
acquired intangibles |
|
36,613 |
|
|
|
44,268 |
|
|
|
97,187 |
|
|
|
128,698 |
|
Total operating
expenses |
|
206,501 |
|
|
|
218,970 |
|
|
|
592,698 |
|
|
|
618,633 |
|
Income (loss) from
operations |
|
7,161 |
|
|
|
17,104 |
|
|
|
(26,728 |
) |
|
|
66,533 |
|
Interest
income |
|
405 |
|
|
|
293 |
|
|
|
924 |
|
|
|
1,335 |
|
Interest
expense |
|
(294 |
) |
|
|
(2,033 |
) |
|
|
(1,088 |
) |
|
|
(4,213 |
) |
Other income
(expense), net |
|
51 |
|
|
|
(77 |
) |
|
|
(27 |
) |
|
|
(403 |
) |
Income (loss) before
income taxes |
|
7,323 |
|
|
|
15,287 |
|
|
|
(26,919 |
) |
|
|
63,252 |
|
(Provision for) benefit
from income taxes |
|
2,597 |
|
|
|
(2,570 |
) |
|
|
33,121 |
|
|
|
(14,269 |
) |
Net income (loss) |
$ |
9,920 |
|
|
$ |
12,717 |
|
|
$ |
6,202 |
|
|
$ |
48,983 |
|
|
|
|
|
|
|
|
|
Net income (loss) per
share: |
|
|
|
|
|
|
|
Basic |
$ |
0.19 |
|
|
$ |
0.25 |
|
|
$ |
0.12 |
|
|
$ |
0.94 |
|
Diluted |
$ |
0.19 |
|
|
$ |
0.24 |
|
|
$ |
0.12 |
|
|
$ |
0.93 |
|
Weighted average shares
outstanding: |
|
|
|
|
|
|
|
Basic |
|
52,706 |
|
|
|
51,652 |
|
|
|
49,697 |
|
|
|
52,090 |
|
Diluted |
|
53,606 |
|
|
|
52,066 |
|
|
|
50,735 |
|
|
|
52,829 |
|
|
|
|
|
|
|
|
|
LogMeIn,
Inc. |
Calculation of Non-GAAP Revenue
(unaudited) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended September 30, |
|
Nine Months Ended September 30, |
|
|
|
|
|
2017 |
|
|
|
2018 |
|
|
|
2017 |
|
|
|
2018 |
|
|
|
|
|
|
(in
thousands) |
|
|
|
(in
thousands) |
|
|
GAAP
Revenue |
|
$ |
269,267 |
|
|
$ |
308,927 |
|
|
$ |
713,750 |
|
|
$ |
893,794 |
|
|
|
Add Back: |
|
|
|
|
|
|
|
|
|
|
Effect of acquisition
accounting on fair value of acquired deferred revenue |
|
|
6,856 |
|
|
|
654 |
|
|
|
30,427 |
|
|
|
3,186 |
|
|
Non-GAAP
Revenue |
|
$ |
276,123 |
|
|
$ |
309,581 |
|
|
$ |
744,177 |
|
|
$ |
896,980 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Calculation of Non-GAAP Operating Income,
Non-GAAP Net Income and Non-GAAP Net Income per Diluted Share
(unaudited) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended September 30, |
|
Nine Months Ended September 30, |
|
|
|
|
|
2017 |
|
|
|
2018 |
|
|
|
2017 |
|
|
|
2018 |
|
|
|
|
|
|
(In
thousands, except per share data) |
|
|
|
(In
thousands, except per share data) |
|
|
GAAP Net
income (loss) from operations |
|
$ |
7,161 |
|
|
$ |
17,104 |
|
|
$ |
(26,728 |
) |
|
$ |
66,533 |
|
|
|
Add Back: |
|
|
|
|
|
|
|
|
|
|
Effect of acquisition
accounting on fair value of acquired deferred revenue |
|
|
6,856 |
|
|
|
654 |
|
|
|
30,427 |
|
|
|
3,186 |
|
|
|
Stock-based
compensation expense |
|
|
18,765 |
|
|
|
15,688 |
|
|
|
49,255 |
|
|
|
48,820 |
|
|
|
Acquisition related
costs |
|
|
10,455 |
|
|
|
4,698 |
|
|
|
51,391 |
|
|
|
19,074 |
|
|
|
Litigation related
expenses |
|
|
622 |
|
|
|
199 |
|
|
|
1,360 |
|
|
|
476 |
|
|
|
Amortization of
acquired intangibles |
|
|
49,842 |
|
|
|
62,484 |
|
|
|
132,603 |
|
|
|
183,086 |
|
|
|
Gain on disposition of
assets |
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
(33,910 |
) |
|
|
Effect of acquisition
accounting on internally capitalized software development
costs |
|
|
(5,080 |
) |
|
|
(1,505 |
) |
|
|
(16,025 |
) |
|
|
(7,636 |
) |
|
Non-GAAP
Operating income |
|
|
88,621 |
|
|
|
99,322 |
|
|
|
222,283 |
|
|
|
279,629 |
|
|
|
Interest and other
income (expense), net |
|
|
162 |
|
|
|
(1,817 |
) |
|
|
(191 |
) |
|
|
(3,281 |
) |
|
Non-GAAP
Income before income taxes |
|
|
88,783 |
|
|
|
97,505 |
|
|
|
222,092 |
|
|
|
276,348 |
|
|
|
Non-GAAP Provision for
income taxes (1) |
|
|
(26,638 |
) |
|
|
(24,637 |
) |
|
|
(67,404 |
) |
|
|
(68,811 |
) |
|
Non-GAAP
Net income (loss) |
|
$ |
62,145 |
|
|
$ |
72,868 |
|
|
$ |
154,688 |
|
|
$ |
207,537 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-GAAP
net income (loss) per diluted share |
|
$ |
1.16 |
|
|
$ |
1.40 |
|
|
$ |
3.05 |
|
|
$ |
3.93 |
|
|
Diluted
weighted average shares outstanding used in |
|
|
|
|
|
|
|
|
|
computing per share amounts |
|
|
53,606 |
|
|
|
52,066 |
|
|
|
50,735 |
|
|
|
52,829 |
|
|
|
|
|
|
|
|
|
|
|
|
|
(1 |
) |
Non-GAAP provision for income taxes excludes the tax impact of
Non-GAAP items as well as a discrete integration-related tax
benefit of $3.8 million and $2.0 million in the nine months ended
September 30, 2017 and 2018, respectively, |
|
|
and a net tax
benefit of $2.9 million and $2.2 million in the three and nine
months ended September 30, 2018, respectively, related to the
enactment of the U.S. Tax Cuts and Jobs Act of 2017. |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Calculation of EBITDA and Adjusted EBITDA
(unaudited) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended September 30, |
|
Nine Months Ended September 30, |
|
|
|
|
|
2017 |
|
|
|
2018 |
|
|
|
2017 |
|
|
|
2018 |
|
|
|
|
|
|
(in
thousands) |
|
|
|
(in
thousands) |
|
|
GAAP Net
income (loss) |
|
$ |
9,920 |
|
|
$ |
12,717 |
|
|
$ |
6,202 |
|
|
$ |
48,983 |
|
|
|
Add Back: |
|
|
|
|
|
|
|
|
|
|
Interest and other
(income) expense, net |
|
|
(162 |
) |
|
|
1,817 |
|
|
|
191 |
|
|
|
3,281 |
|
|
|
Income tax provision
(benefit) |
|
|
(2,597 |
) |
|
|
2,570 |
|
|
|
(33,121 |
) |
|
|
14,269 |
|
|
|
Amortization of
acquired intangibles |
|
|
49,842 |
|
|
|
62,484 |
|
|
|
132,603 |
|
|
|
183,086 |
|
|
|
Depreciation and
amortization expense |
|
|
10,333 |
|
|
|
14,337 |
|
|
|
26,158 |
|
|
|
40,096 |
|
|
EBITDA |
|
|
67,336 |
|
|
|
93,925 |
|
|
|
132,033 |
|
|
|
289,715 |
|
|
|
Add Back: |
|
|
|
|
|
|
|
|
|
|
Effect of acquisition
accounting on fair value of acquired deferred revenue |
|
|
6,856 |
|
|
|
654 |
|
|
|
30,427 |
|
|
|
3,186 |
|
|
|
Stock-based
compensation expense |
|
|
18,765 |
|
|
|
15,688 |
|
|
|
49,255 |
|
|
|
48,820 |
|
|
|
Gain on disposition of
assets |
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
(33,910 |
) |
|
|
Acquisition related
costs |
|
|
10,455 |
|
|
|
4,698 |
|
|
|
51,391 |
|
|
|
19,074 |
|
|
|
Litigation related
expenses |
|
|
622 |
|
|
|
199 |
|
|
|
1,360 |
|
|
|
476 |
|
|
Adjusted
EBITDA |
|
$ |
104,034 |
|
|
$ |
115,164 |
|
|
$ |
264,466 |
|
|
$ |
327,361 |
|
|
EBITDA Margin |
|
|
25.0 |
% |
|
|
30.4 |
% |
|
|
18.5 |
% |
|
|
32.4 |
% |
|
Adjusted EBITDA Margin |
|
|
37.7 |
% |
|
|
37.2 |
% |
|
|
35.5 |
% |
|
|
36.5 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
Stock-Based Compensation Expense
(unaudited) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended September 30, |
|
Nine Months Ended September 30, |
|
|
|
|
|
2017 |
|
|
|
2018 |
|
|
|
2017 |
|
|
|
2018 |
|
|
|
|
|
|
(in
thousands) |
|
|
|
(in
thousands) |
|
|
Cost
of revenue |
|
$ |
1,612 |
|
|
$ |
1,278 |
|
|
$ |
3,911 |
|
|
$ |
3,755 |
|
|
Research and development |
|
|
6,405 |
|
|
|
4,174 |
|
|
|
16,042 |
|
|
|
14,232 |
|
|
Sales and marketing |
|
|
4,312 |
|
|
|
3,492 |
|
|
|
12,108 |
|
|
|
11,788 |
|
|
General and administrative |
|
|
6,436 |
|
|
|
6,744 |
|
|
|
17,194 |
|
|
|
19,045 |
|
|
Total stock based-compensation |
|
$ |
18,765 |
|
|
$ |
15,688 |
|
|
$ |
49,255 |
|
|
$ |
48,820 |
|
|
|
|
|
|
|
|
|
|
|
|
|
LogMeIn,
Inc. |
|
Calculation of Projected 2018 Non-GAAP Revenue
(unaudited) |
|
(In millions) |
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended |
|
Twelve Months Ended |
|
|
|
|
December 31, 2018 |
|
December 31, 2018 |
|
|
|
|
|
|
|
|
GAAP
Revenue |
|
$305 - $306 |
|
$1,199 - $1,200 |
|
|
Add Back: |
|
|
|
|
|
|
Effect of acquisition
accounting on fair value of acquired deferred revenue |
|
1 |
|
4 |
|
Non-GAAP
Revenue |
|
$306 - $307 |
|
$1,203 - $1,204 |
|
|
|
|
|
|
|
|
Calculation of Projected 2018 Non-GAAP Net
Income and Non-GAAP Net Income per Diluted Share
(unaudited) |
|
(In millions, except per share
data) |
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended |
|
Twelve Months Ended |
|
|
|
|
December 31, 2018 |
|
December 31, 2018 |
|
|
|
|
|
|
|
|
GAAP Net
income |
|
$5 - $6 |
|
$54 - $55 |
|
|
Add Back: |
|
|
|
|
|
|
Effect of acquisition
accounting on fair value of acquired deferred revenue |
|
1 |
|
4 |
|
|
Stock-based
compensation expense |
|
18 |
|
67 |
|
|
Acquisition and
litigation related costs |
|
4 |
|
23 |
|
|
Amortization of
acquired intangibles |
|
62 |
|
245 |
|
|
Effect of acquisition
accounting on internally capitalized software development
costs |
|
(1) |
|
(8) |
|
|
Gain on disposition of
assets |
|
-- |
|
(34) |
|
|
Income tax effect of
non-GAAP items |
|
(16) |
|
(71) |
|
Non-GAAP
Net income |
|
$72 - $73 |
|
$280 - $281 |
|
|
|
|
|
|
|
|
GAAP net
income per diluted share |
|
$0.10 - $0.11 |
|
$1.03 - $1.04 |
|
Non-GAAP
net income per diluted share |
|
$1.41 - $1.42 |
|
$5.33 - $5.34 |
|
Diluted
weighted average shares outstanding used in computing net income
per share |
|
51.7 |
|
52.5 |
|
|
|
|
|
|
|
|
Calculation of Projected 2018 EBITDA and
Adjusted EBITDA (unaudited) |
|
(In millions) |
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended |
|
Twelve Months Ended |
|
|
|
|
December 31, 2018 |
|
December 31, 2018 |
|
|
|
|
|
|
|
|
GAAP Net
income |
|
$5 - $6 |
|
$54 - $55 |
|
|
Add Back: |
|
|
|
|
|
|
Interest and other
(income) expense, net |
|
2 |
|
5 |
|
|
Income tax provision
(benefit) |
|
8 |
|
22 |
|
|
Amortization of
acquired intangibles |
|
62 |
|
245 |
|
|
Depreciation and
amortization expense |
|
16 |
|
56 |
|
EBITDA |
|
$93 - $94 |
|
$382 - $383 |
|
|
Add Back: |
|
|
|
|
|
|
Effect of acquisition
accounting on fair value of acquired deferred revenue |
|
1 |
|
4 |
|
|
Stock-based
compensation expense |
|
18 |
|
67 |
|
|
Acquisition and
litigation related costs |
|
4 |
|
23 |
|
|
Gain on disposition of
assets |
|
-- |
|
(34) |
|
Adjusted
EBITDA |
|
$115 - $116 |
|
$442 - $443 |
|
|
EBITDA
Margin |
|
31% |
|
32% |
|
|
Adjusted
EBITDA Margin |
|
38% |
|
37% |
|
|
|
|
|
|
|
|
|
|
LogMeIn,
Inc. |
|
|
Condensed Consolidated Statements of Cash
Flows (unaudited) |
|
|
(In thousands) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended September 30, |
|
Nine Months Ended September 30, |
|
|
|
|
|
|
2017 |
|
|
|
2018 |
|
|
|
2017 |
|
|
|
2018 |
|
|
Cash flows from operating activities |
|
|
|
|
|
|
|
|
|
Net
income |
|
$ |
9,920 |
|
|
$ |
12,717 |
|
|
$ |
6,202 |
|
|
$ |
48,983 |
|
|
Adjustments
to reconcile net income to net cash |
|
|
|
|
|
|
|
|
|
provided by operating activities: |
|
|
|
|
|
|
|
|
|
Stock-based compensation |
|
|
18,765 |
|
|
|
15,688 |
|
|
|
49,255 |
|
|
|
48,820 |
|
|
Depreciation and amortization |
|
|
60,175 |
|
|
|
76,821 |
|
|
|
158,761 |
|
|
|
223,181 |
|
|
Gain
on disposition of assets, net of transaction costs |
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
(36,281 |
) |
|
Benefit from deferred income taxes |
|
|
(15,182 |
) |
|
|
(12,032 |
) |
|
|
(47,659 |
) |
|
|
(34,062 |
) |
|
Other, net |
|
|
232 |
|
|
|
489 |
|
|
|
1,606 |
|
|
|
1,282 |
|
|
Changes in assets and liabilities, excluding effect of acquisitions
and dispositions: |
|
|
|
|
|
|
|
|
Accounts receivable |
|
|
(6,477 |
) |
|
|
(6,429 |
) |
|
|
(6,480 |
) |
|
|
16,301 |
|
|
Prepaid expenses and other current assets |
|
|
7,979 |
|
|
|
518 |
|
|
|
(4,607 |
) |
|
|
8,474 |
|
|
Other assets |
|
|
835 |
|
|
|
(4,897 |
) |
|
|
991 |
|
|
|
(12,830 |
) |
|
Accounts payable |
|
|
(1,040 |
) |
|
|
2,072 |
|
|
|
10,154 |
|
|
|
13,575 |
|
|
Accrued liabilities |
|
|
(1,458 |
) |
|
|
(1,848 |
) |
|
|
36,586 |
|
|
|
21,113 |
|
|
Deferred revenue |
|
|
15,383 |
|
|
|
(7,752 |
) |
|
|
75,135 |
|
|
|
28,031 |
|
|
Other long-term liabilities |
|
|
1,343 |
|
|
|
(1,685 |
) |
|
|
3,316 |
|
|
|
4,277 |
|
|
Net
cash provided by operating activities (1) |
|
|
90,475 |
|
|
|
73,662 |
|
|
|
283,260 |
|
|
|
330,864 |
|
|
Cash flows from investing activities |
|
|
|
|
|
|
|
|
|
Proceeds
from sale or disposal or maturity of marketable securities |
|
|
10,500 |
|
|
|
- |
|
|
|
41,603 |
|
|
|
- |
|
|
Purchases
of property and equipment |
|
|
(13,518 |
) |
|
|
(7,960 |
) |
|
|
(23,322 |
) |
|
|
(21,590 |
) |
|
Intangible
asset additions |
|
|
(8,184 |
) |
|
|
(8,276 |
) |
|
|
(21,893 |
) |
|
|
(26,138 |
) |
|
Cash paid
for acquisition, net of cash acquired |
|
|
(43,375 |
) |
|
|
1,279 |
|
|
|
(19,160 |
) |
|
|
(342,072 |
) |
|
Restricted
cash acquired through acquisitions |
|
|
71 |
|
|
|
- |
|
|
|
988 |
|
|
|
- |
|
|
Proceeds
from disposition of assets |
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
42,394 |
|
|
Net
cash used in investing activities |
|
|
(54,506 |
) |
|
|
(14,957 |
) |
|
|
(21,784 |
) |
|
|
(347,406 |
) |
|
Cash flows from financing activities |
|
|
|
|
|
|
|
|
|
Borrowings
(repayments) under credit facility |
|
|
- |
|
|
|
- |
|
|
|
(30,000 |
) |
|
|
200,000 |
|
|
Proceeds
from issuance of common stock upon option exercises |
|
|
1,009 |
|
|
|
2,809 |
|
|
|
6,363 |
|
|
|
3,831 |
|
|
Payments of
withholding taxes in connection with restricted stock unit
vesting |
|
|
(2,734 |
) |
|
|
(1,536 |
) |
|
|
(32,189 |
) |
|
|
(29,490 |
) |
|
Payment of
debt issuance costs |
|
|
- |
|
|
|
- |
|
|
|
(1,993 |
) |
|
|
- |
|
|
Dividends
paid on common stock |
|
|
(13,181 |
) |
|
|
(15,523 |
) |
|
|
(39,117 |
) |
|
|
(46,900 |
) |
|
Purchase of
treasury stock |
|
|
(21,460 |
) |
|
|
(75,127 |
) |
|
|
(51,075 |
) |
|
|
(190,230 |
) |
|
Net
cash used in financing activities |
|
|
(36,366 |
) |
|
|
(89,377 |
) |
|
|
(148,011 |
) |
|
|
(62,789 |
) |
|
Effect of
exchange rate changes on cash, cash equivalents and restricted
cash |
|
|
1,569 |
|
|
|
(538 |
) |
|
|
7,130 |
|
|
|
(5,427 |
) |
|
Net
increase (decrease) in cash, cash equivalents and restricted
cash |
|
|
1,172 |
|
|
|
(31,210 |
) |
|
|
120,595 |
|
|
|
(84,758 |
) |
|
Cash, cash
equivalents and restricted cash, beginning of period |
|
|
262,758 |
|
|
|
200,661 |
|
|
|
143,335 |
|
|
|
254,209 |
|
|
Cash, cash
equivalents and restricted cash, end of period |
|
$ |
263,930 |
|
|
$ |
169,451 |
|
|
$ |
263,930 |
|
|
$ |
169,451 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)Cash
flows from operating activities includes the following acquisition,
disposition, and litigation-related payments: |
|
|
|
|
|
|
(a) |
Cash flows from operating
activities includes transaction, transition, and
integration-related payments, including retention-based bonus
payments, for acquisitions and dispositions of $11.8 million and
$5.6 million for the three months ended September 30, 2017 and
2018, respectively and $44.6 million and $19.9 million for the nine
months ended September 30, 2017 and 2018, respectively. |
|
|
|
(b) |
Cash flows from operating
activities includes litigation-related payments of $0.3 million for
the three months ended September 30, 2017 and $0.6 million and $1.2
million for the nine months ended September 30, 2017 and 2018,
respectively. |
|
|
|
(c) |
Cash flows from operating
activities includes a partial tax payment from the gain on the
Xively disposition of $4.2 million for the three and nine months
ended September 30, 2018. A second tax payment of $4.2
million related to the Xively transaction will be paid in the
fourth quarter of 2018. |
|
|
|
Adjusted
cash flows from operations adds back the items in (a), (b), and (c)
above and sums to $102.5 million and $83.5 million for the three
months ended September 30, 2017 and 2018, |
|
respectively, and $328.4 million and $356.2 million for the nine
months ended September 30, 2017 and 2018, respectively. |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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