GlobeNewswire Inc | Jul 29, 2020 04:08PM EDT

July 29, 2020

BOSTON, July 29, 2020 (GLOBE NEWSWIRE) -- LogMeIn, Inc. (NASDAQ: LOGM), a leading provider of cloud-based connectivity, today announced its results for the second quarter ended June 30, 2020.

Second quarter 2020 financial highlights include:

-- Revenue was $350.7 million, up 12% compared with the second quarter of 2019 -- GAAP net income was $19.0 million or $0.39 per diluted share and non-GAAP net income was $75.9 million or $1.54 per diluted share -- EBITDA was $101.6 million or 29.0% of revenue and Adjusted EBITDA was $119.3 million or 34.0% of revenue -- Cash flow from operations was $80.7 million or 23.0% of revenue and adjusted free cash flow was $88.6 million or 25.3% of revenue -- Total deferred revenue was $458.4 million, up $7.1 million from the first quarter of 2020

Update on the MergerIn December 2019, LogMeIn announced that it had reached a definitive agreement to be acquired by affiliates of Francisco Partners and Evergreen Coast Capital Corp., the private equity affiliate of Elliott Management Corporation. On March 12, 2020, LogMeIns stockholders voted to adopt the merger agreement at a special stockholders meeting. In July 2020, the parties received the final regulatory approvals required to complete the transaction and now anticipate the merger to close later in the third quarter of 2020, following the completion of Francisco Partners and Evergreen Coast Capital Corp.s debt marketing periods, and subject to the satisfaction or waiver of any remaining customary closing conditions.

Conference Call and Financial OutlookLogMeIn will not be holding a conference call or providing a financial outlook due to the Companys pending transaction with affiliates of Francisco Partners and Evergreen Coast Capital Corp.

Where to Find Additional Business and Financial InformationAdditional information regarding the Companys second quarter results, financial condition and operations can be found in the Companys Quarterly Report on Form 10-Q, which will be filed with the SEC after the market closes on July 29, 2020. A copy of the Companys Quarterly Report on Form 10-Q will be available on the SECs website, http://www.sec.gov, and the Companys investor relations website at https://investor.logmeininc.com/about-us/investors/financials/sec-filings/default.aspx

Non-GAAP Financial MeasuresThis 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, 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, stock-based compensation expense, restructuring charges, and litigation-related expense. -- 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, stock-based compensation expense, restructuring charges, litigation-related expense, and discrete integration related tax impacts. -- 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, merger-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.s (Nasdaq:LOGM) category-defining products unlock the potential of the modern workforce by making it possible for millions of people and businesses around the globe to dotheirbest work, whenever, however, andmost importantly,wherever. A pioneer in remote work technology and a driving force behind todays work-from-anywhere movement, LogMeIn has become one of the worlds largest SaaS companies with tens of millions of active users, more than 3,500 global employees, over $1.2 billion in annual revenue and more than 2 million customers worldwide who use its software as an essential part of their daily lives. The company 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 BradleyLogMeIn, 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, June 30, 2019 2020 ASSETSCurrent assets: Cash and cash equivalents $ $ 128,005 249,464 Accounts receivable, net 107,595 108,959 Prepaid expenses and other 89,351 103,585 current assets Total current assets 324,951 462,008 Property and equipment, net 99,157 97,911 Operating lease assets 99,026 94,539 Restricted cash 1,883 1,796 Intangibles, net 840,427 736,107 Goodwill 2,414,287 2,414,229Other assets 68,272 85,203 Deferred tax assets 7,994 9,090 Total assets $ $ 3,855,997 3,900,883 LIABILITIES AND EQUITYCurrent liabilities: Accounts payable $ $ 52,104 43,965 Current operating lease 18,470 19,346 liabilities Accrued liabilities 161,996 151,198 Deferred revenue, current portion 390,087 448,755 Total current liabilities 622,657 663,264 Long-term debt 200,000 200,000 Deferred revenue, net of current 18,076 9,616 portionDeferred tax liabilities 170,482 151,684 Non-current operating lease 88,674 84,768 liabilitiesOther long-term liabilities 15,400 20,394 Total liabilities 1,115,289 1,129,726Equity: Common stock 573 577 Additional paid-in capital 3,369,893 3,393,750 Retained earnings 4,931 12,687 Accumulated other comprehensive 684 (484 )income (loss) Treasury stock (635,373 ) (635,373 ) Total equity 2,740,708 2,771,157Total liabilities and equity $ $ 3,855,997 3,900,883

LogMeIn, Inc. Condensed Consolidated Statements of Operations (unaudited)(In thousands, except per share data) Three Months Ended June 30, Six Months Ended June 30, 2019 2020 2019 2020 Revenue $ 313,064 $ 350,727 $ 620,764 $ 673,110 Cost of 80,767 93,497 158,455 178,375 revenueGross profit 232,297 257,230 462,309 494,735 Operating expenses:Research and 40,379 37,170 81,096 77,049 developmentSales and 120,825 121,521 235,459 247,731 marketingGeneral and 34,539 30,291 68,425 63,990 administrativeRestructuring 956 3,032 9,430 21,573 chargeAmortizationof acquired 39,390 33,287 78,889 66,615 intangiblesTotaloperating 236,089 225,301 473,299 476,958 expensesIncome (loss)from (3,792 ) 31,929 (10,990 ) 17,777 operationsInterest 415 225 1,076 492 incomeInterest (2,126 ) (1,132 ) (4,269 ) (2,812 )expenseOther income (107 ) (374 ) (367 ) 65 (expense), netIncome (loss)before income (5,610 ) 30,648 (14,550 ) 15,522 taxes(Provisionfor) benefit (912 ) (11,607 ) (1,011 ) (7,766 )from incometaxesNet income $ (6,522 ) $ 19,041 $ (15,561 ) $ 7,756 (loss) Net income(loss) per share:Basic $ (0.13 ) $ 0.39 $ (0.31 ) $ 0.16 Diluted $ (0.13 ) $ 0.39 $ (0.31 ) $ 0.16 Weightedaverage shares outstanding:Basic 49,768 48,887 50,201 48,744 Diluted 49,768 49,186 50,201 49,189

LogMeIn, Inc. Calculation of Non-GAAP Revenue (unaudited) Three Months Ended June 30, Six Months Ended June 30, 2019 2020 2019 2020 (in thousands) (in thousands)GAAP Revenue $ 313,064 $ 350,727 $ 620,764 $ 673,110 Add Back: Effect of acquisition accounting on fair value of 330 - 748 - acquired deferred revenueNon-GAAP Revenue $ 313,394 $ 350,727 $ 621,512 $ 673,110 Calculation of Non-GAAP Operating Income, Non-GAAP NetIncome and Non-GAAP Net Income per Diluted Share (unaudited) Three Months Ended June 30, Six Months Ended June 30, 2019 2020 2019 2020 (In thousands, except per (In thousands, except per share data) share data)GAAP Net income(loss) from $ (3,792 ) $ 31,929 $ (10,990 ) $ 17,777 operations Add Back: Effect of acquisition accounting on fair value of 330 - 748 - acquired deferred revenue Stock-based compensation 18,203 13,432 33,234 30,293 expense Acquisition 2,947 168 6,871 2,631 related costs Merger related - 355 - 2,608 costs Restructuring 956 3,032 9,430 21,573 charge Litigation related 530 786 693 1,706 expenses Amortization of acquired 60,428 52,619 120,897 105,305 intangiblesNon-GAAP Operating 79,602 102,321 160,883 181,893 income Interest and other expense, (1,818 ) (1,281 ) (3,560 ) (2,255 ) netNon-GAAP Incomebefore income 77,784 101,040 157,323 179,638 taxes Non-GAAP Provision for (19,173 ) (25,182 ) (38,859 ) (44,603 ) income taxesNon-GAAP Net $ 58,611 $ 75,858 $ 118,464 $ 135,035 income Non-GAAP netincome per diluted $ 1.17 $ 1.54 $ 2.34 $ 2.75 shareDiluted weightedaverage sharesoutstanding used 50,027 49,186 50,587 49,189 in computing pershare amounts Calculation of EBITDA and Adjusted EBITDA (unaudited) Three Months Ended June 30, Six Months Ended June 30, 2019 2020 2019 2020 (in thousands) (in thousands)GAAP Net income $ (6,522 ) $ 19,041 $ (15,561 ) $ 7,756 (loss) Add Back: Interest and other expense, 1,818 1,281 3,560 2,255 net Income tax provision 912 11,607 1,011 7,766 (benefit) Amortization of acquired 60,428 52,619 120,897 105,305 intangibles Depreciation and 15,961 17,009 31,436 33,568 amortization expenseEBITDA 72,597 101,557 141,343 156,650 Add Back: Effect of acquisition accounting on fair value of 330 - 748 - acquired deferred revenue Stock-based compensation 18,203 13,432 33,234 30,293 expense Acquisition 2,947 168 6,871 2,631 related costs Merger related - 355 - 2,608 costs Restructuring 956 3,032 9,430 21,573 charge Litigation related 530 786 693 1,706 expensesAdjusted EBITDA $ 95,563 $ 119,330 $ 192,319 $ 215,461 EBITDA Margin 23.2 % 29.0 % 22.8 % 23.3 % Adjusted EBITDA 30.5 % 34.0 % 30.9 % 32.0 % Margin Calculation of Adjusted Cash Flows from Operations and Adjusted Free Cash Flow (unaudited) Three Months Ended June 30, Six Months Ended June 30, 2019 2020 2019 2020 (in thousands) (in thousands)GAAP Cash flows $ 83,717 $ 80,656 $ 203,367 $ 168,655 from operations Add Back: Litigation related 5 1,229 19 1,794 payments Acquisition retention-based 3,763 9,343 5,226 12,629 bonus payments Restructuring 5,155 13,901 7,049 17,543 payments Merger related - 1,860 - 12,666 payments Acquisition related 1,065 59 1,879 562 paymentsAdjusted cashflows from 93,705 107,048 217,540 213,849 operations Purchases of property and (9,894 ) (9,703 ) (22,081 ) (18,104 ) equipment Intangible (9,830 ) (8,759 ) (18,745 ) (19,078 ) asset additionsAdjusted Free Cash $ 73,981 $ 88,586 $ 176,714 $ 176,667 Flow GAAP Cash flows from operations as a % of 26.7 % 23.0 % 32.7 % 25.1 % Non-GAAP Revenue Adjusted Cash flows from operations as a 29.9 % 30.5 % 35.0 % 31.8 % % of Non-GAAP Revenue Adjusted Free Cash Flow as a 23.6 % 25.3 % 28.4 % 26.2 % % of Non-GAAP Revenue Stock-Based Compensation Expense (unaudited) Three Months Ended June 30, Six Months Ended June 30, 2019 2020 2019 2020 (in thousands) (in thousands)Cost of revenue $ 1,301 $ 1,232 $ 2,281 $ 2,490 Research and 3,914 3,737 7,989 8,393 developmentSales and 5,216 4,660 8,994 9,133 marketingGeneral and 7,772 3,803 13,970 10,277 administrativeTotal stock $ 18,203 $ 13,432 $ 33,234 $ 30,293 based-compensation

LogMeIn, Inc. Condensed Consolidated Statements of Cash Flows (unaudited) (In thousands) Three Months Ended June 30, Six Months Ended June 30, 2019 2020 2019 2020 Cash flowsfrom operatingactivitiesNet income $ (6,522 ) $ 19,041 $ (15,561 ) $ 7,756 (loss)Adjustmentsto reconcilenet income (loss) to netcashprovided byoperating activities:Stock-based 18,203 13,432 33,234 30,293 compensationDepreciationand 76,389 69,628 152,333 138,873 amortizationBenefit fromdeferred (11,135 ) (10,161 ) (22,786 ) (19,942 )income taxesOther, net 794 838 1,131 1,359 Changes inassets andliabilities, excludingeffect ofacquisitions:Accounts (1,914 ) (2,135 ) 4,110 (3,121 )receivablePrepaidexpenses and 1,894 1,321 4,777 (15,226 )other currentassetsOther assets (6,872 ) (12,777 ) (13,546 ) (17,039 )Accounts 6,163 (713 ) 15,507 (9,318 )payableAccrued (3,124 ) (6,111 ) 16,226 (2,508 )liabilitiesDeferred 6,430 4,129 30,250 52,655 revenueOtherlong-term 3,411 4,164 (2,308 ) 4,873 liabilitiesNet cashprovided by 83,717 80,656 203,367 168,655 operatingactivitiesCash flowsfrom investingactivitiesPurchases ofproperty and (9,894 ) (9,703 ) (22,081 ) (18,104 )equipmentIntangibleasset (9,830 ) (8,759 ) (18,745 ) (19,078 )additionsAcquisitionofbusinesses, - - (22,463 ) - net of cashacquiredNet cashprovided by(used in) (19,724 ) (18,462 ) (63,289 ) (37,182 )investingactivitiesCash flowsfrom financingactivitiesProceeds fromissuance ofcommon stockupon option 41 6,771 82 6,856 exercises andemployeestockpurchase planPayments ofwithholdingtaxes inconnection (9,888 ) (11,351 ) (17,676 ) (13,288 )withrestrictedstock unitvestingPayment ofcontingent (1,857 ) - (1,857 ) (1,294 )considerationDividendspaid on (16,182 ) - (32,699 ) - common stockPurchase oftreasury (70,164 ) - (124,232 ) - stockNet cashprovided by(used in) (98,050 ) (4,580 ) (176,382 ) (7,726 )financingactivitiesEffect ofexchange ratechanges oncash, cash 593 2,288 (792 ) (2,375 )equivalentsandrestrictedcashNet increase(decrease) incash, cashequivalents (33,464 ) 59,902 (37,096 ) 121,372 andrestrictedcashCash, cashequivalentsandrestricted 146,860 191,358 150,492 129,888 cash,beginning ofperiodCash, cashequivalentsand $ 113,396 $ 251,260 $ 113,396 $ 251,260 restrictedcash, end ofperiod