UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

FORM 8-K

CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported): October 24, 2019

LogMeIn, Inc.
(Exact Name of Registrant as Specified in Charter)

 
Delaware	 	001-34391	 	20-1515952	
(State or Other Jurisdiction of	 	(Commission	 	(IRS Employer	
Incorporation or Organization)	 	File Number)	 	Identification No.)	
 
320 Summer Street	 	 	
Boston, Massachusetts	 	02210	
(Address of principal executive offices)	 	(Zip Code)	
 
Registrant’s telephone number, including area code: (781)-638-9050
 
(Former Name or Former Address, if Changed Since Last Report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):
☐	Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)	
☐	Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)	
☐	Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))	
☐	Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))	
Securities registered pursuant to Section 12(b) of the Act:
 
Title of each class	Trading Symbol(s)	Name of each exchange on which registered	
Common Stock, $0.01 par value per share	LOGM	NASDAQ Global Select Market	
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging growth company  ☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.  ☐

TABLE OF CONTENTS
 
Item 2.02. Results of Operations and Financial Condition
Item 5.02. Departure of Directors or Principal Officers; Election of Directors; Appointment of Principal Officers	 	
Item 7.01. Regulation FD Disclosure	 	
Item 9.01. Financial Statements and Exhibits	 	
EXHIBIT INDEX	 	
SIGNATURE	 	
EX-99.1	 	

Item 2.02.	Results of Operations and Financial Condition	
On October 24, 2019, LogMeIn, Inc. (the “Company”) announced its financial results for the third quarter of 2019. The full text of the press release issued in connection with the announcement is furnished as Exhibit 99.1 to this Current Report on Form 8-K.
The information in this Current Report on Form 8-K (including Exhibit 99.1) shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liabilities of that section, nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933, as amended, or the Exchange Act, except as expressly set forth by specific reference in such a filing.
Item 5.02.	Departure of Directors or Principal Officers; Election of Directors; Appointment of Principal Officers; Compensatory Arrangement of Certain Officers	
(b)Departure of Named Executive Officer
On October 24, 2019, the Company’s Chief Financial Officer and Treasurer, Edward K. Herdiech, notified the Company of his decision to retire in 2020 at a date to be determined.  In the interim, Mr. Herdiech has agreed to continue to serve the Company on a full-time basis in order to transition his duties and assist with the hiring and on-boarding of his successor.  The effective date of Mr. Herdiech’s retirement as well as the specific terms of any transition period have not yet been finalized between the Company and Mr. Herdiech.
A copy of the Company’s third quarter earnings press release, which includes the announcement of Mr. Herdiech’s retirement, is furnished as Exhibit 99.1 to this Current Report on Form 8-K.
Item 7.01.	Regulation FD Disclosure	
On October 24, 2019, the Company also announced that it will pay a $0.325 per share dividend on November 29, 2019 to stockholders of record as of November 13, 2019. LogMeIn currently has approximately 49 million shares of common stock outstanding.
Item 9.01.	Financial Statements and Exhibits	
(d)Exhibits
The following exhibit relating to Item 2.02 shall be deemed to be furnished, and not filed:
 
Exhibit No.	 	Description	
  99.1	 	Press release entitled “LogMeIn Announces Third Quarter 2019 Results,” issued by the Company on October 24, 2019.	
 104	 	Cover Page Interactive Data File (embedded within the Inline XBRL document)	

SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
 
 	LOGMEIN, INC.	
 	 	
Date: October 24, 2019	By:	/s/ Michael J. Donahue	
 	 	Michael J. Donahue	
 	 	SVP, General Counsel & Secretary	

 
Exhibit 99.1
LogMeIn Announces Third Quarter 2019 Results
Exceeds Guidance with Growth Products Increasing 34% Year over Year
Boston, Oct 24, 2019 – LogMeIn, Inc. (NASDAQ: LOGM), a leading provider of cloud-based connectivity, today announced its results for the third quarter ended September 30, 2019.
 
Third quarter financial highlights include:
 	•	GAAP revenue was $316.9 million	
 	•	Non-GAAP revenue was $317.2 million, up 2.5% year over year, a 60-basis point improvement from Q2’19	
 	•	GAAP net income was $5.1 million or $0.10 per share and non-GAAP net income was $68.7 million or $1.39 per share	
 	•	EBITDA was $82.2 million or 25.9% of GAAP revenue and Adjusted EBITDA was $109.3 million or 34.5% of non-GAAP revenue	
 	•	Cash flow from operations was $83.0 million or 26.2% of non-GAAP revenue, and adjusted free cash flow was $69.6 million or 22.0% of non-GAAP revenue	
 	•	Total GAAP deferred revenue was $392.8 million	
 	•	The Company closed the quarter with cash and cash equivalents of $119.2 million and $200.0 million of borrowings under its existing credit agreement	
 	•	The Company’s fastest growing products continued to gain market share with Jive increasing 37% year over year to $37 million and LastPass gaining 64% year over year to $22 million	
 
Third quarter operational highlights include:
 	•	Launched the new, video first experience for GoToMeeting, which focuses on delivering a simple, intuitive end-user experience, while giving IT even more control over deployment, management, and security. The product includes industry-leading audio quality, a new meeting hub, powerful meeting diagnostics, and additional AI-powered transcription capabilities	
 	•	Announced the general availability of GoToConnect and GoToRoom in the UK, Germany and Ireland, making the full GoTo Suite available in those markets	
 	•	Named to the Gartner 2019 Magic Quadrant for both Unified Communications as a Service and Meeting Solutions	
 	•	LastPass Identity named the winner of the “Overall ID Management Solution of the Year” award in the 2019 CyberSecurity Breakthrough Awards	
 
“Our investments in our growth products continued to pay off in the quarter and enabled us to exceed our guidance.  Led by Jive and LastPass, our growth products grew 34% in Q3 and now account for more than a quarter of our revenue,” said Bill Wagner, President and CEO. “Additionally, we made significant progress strengthening our collaboration products, with the introduction of the next generation of our flagship GoToMeeting product and the launch of GoToConnect into key European markets.  We believe both of these milestones are foundational to continue to drive overall growth.”  
 
CFO Retirement in 2020
The Company is also announcing that LogMeIn’s Chief Financial Officer, Ed Herdiech, has informed the Company of his decision to retire in 2020, at a date to be determined.  In the interim, Ed has agreed to continue in his role in a full-time capacity in order to help transition his duties and to assist in the hiring and on-boarding of his successor.  
 
“I want to thank Ed for his distinguished service to LogMeIn over the past 13 years, during which time he has helped scale the Company from a small SaaS disruptor to a billion dollar market leader.  His leadership and execution have been critical throughout our history, including during our 2009 IPO and our transformational merger with the GoTo business. He has also built a strong team that is the operational backbone of the company.  I look forward to working with Ed through his transition in 2020 and we all wish him well as he looks forward to his retirement,” said Bill Wagner.

 
“I’ve had a great experience at LogMeIn.  I’ve enjoyed working with extremely smart people and developing a talented and dedicated team that has supported the business on its path from a start up to a billion-dollar SaaS company,” said Ed Herdiech.  “I believe the Company is well-positioned to be a leader in large, forward-leaning markets and I look forward to helping ensure a smooth transition.”
 
Business Outlook
Based on information available as of October 24, 2019, the Company is issuing guidance for the fourth quarter 2019 and fiscal year 2019.  
 
Fourth Quarter 2019:  The Company expects fourth quarter GAAP and non-GAAP revenue to be in the range of $319 million to $321 million.  
EBITDA is expected to be in the range of $89 million to $90 million, or approximately 28% of GAAP revenue.  Adjusted EBITDA is expected to be in the range of $110 million to $111 million, or approximately 34.5% of non-GAAP revenue.  
Non-GAAP net income is expected to be in the range of $68 million to $69 million, or $1.39 to $1.41 per diluted share.  Non-GAAP net income excludes an estimated $18 million in stock-based compensation expense, $3 million in acquisition and litigation-related costs, and $60 million of amortization expense of acquired intangible assets, 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 approximately $3 million for the fourth quarter.  Non-GAAP and GAAP net income per diluted share is based on an estimated 49 million fully-diluted weighted average shares outstanding.  
Including stock-based compensation expense, acquisition-related costs and amortization, and litigation-related expense the Company expects to report GAAP net income in the range of $8 million to $9 million, or $0.15 to $0.17 per diluted share.
Fiscal year 2019:  The Company expects full year 2019 non-GAAP revenue to be in the range of $1.258 billion to $1.260 billion.  The Company expects full year 2019 GAAP revenue to be in the range of $1.257 billion to $1.259 billion.  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 $312 million to $313 million, or approximately 25% of GAAP revenue.  Adjusted EBITDA is expected to be in the range of $412 million to $413 million, or approximately 33% of non-GAAP revenue.
Non-GAAP net income is expected to be in the range of $256 million to $257 million, or $5.12 to $5.14 per diluted share.  Non-GAAP net income adds back the non-GAAP revenue adjustment described above and excludes an estimated $69 million in stock-based compensation expense, $15 million in acquisition and litigation-related costs, $241 million of amortization expense of acquired intangible assets, and $15 million of restructuring charges, as well as the income tax effect of the above items.
Non-GAAP net income for the fiscal year assumes an effective tax rate of approximately 25% and GAAP net loss for the fiscal year assumes a tax provision of approximately $4 million.  Non-GAAP net income per diluted share is based on an estimated 50 million fully-diluted weighted average shares outstanding.  GAAP net loss per share is based on an estimated 49.6 million weighted average shares outstanding.
Including stock-based compensation expense, acquisition-related costs and amortization, litigation-related expense, and restructuring charges, the Company expects to report GAAP net loss in the range of $3 million to $2 million, or $0.06 to $0.04 net loss per share.

Dividend
In accordance with its previously announced capital return plan, the Company will pay a $0.325 per share dividend on November 29, 2019 to stockholders of record as of November 13, 2019.  The Company currently has approximately 49 million shares of common stock outstanding.
 
Conference Call Information for Today, Thursday, October 24, 2019
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 (800) 309-1256 and enter passcode 689811.  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 24, 2019 until 8:00 p.m. Eastern Time on October 31, 2019, by dialing 888-203-1112 and entering passcode 2282202.
 
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, 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, 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, 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, and 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. (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 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.
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 progress made on the Company’s strategic initiatives and revenue growth objectives, improvements made to the Company’s competitive positioning, as well as the Company's financial guidance for the fourth quarter of 2019 and fiscal year 2019. 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.
781-897-1301
Rob.Bradley@LogMeIn.com
 
Press
Craig VerColen
LogMeIn, Inc.
781-897-0696
Press@LogMeIn.com

 
LogMeIn, Inc.	 	
Condensed Consolidated Balance Sheets (unaudited)	 	
(In thousands)	 	
 	 	 	 	 	 	 	 	 	
 	 	December 31,	 	 	September 30,	 	
 	 	 	2018	 	 	 	2019	 	
 	 	 	 	 	 	 	 	 	
ASSETS	 	
Current assets:	 	 	 	 	 	 	 	 	
Cash and cash equivalents	 	$	148,652	 	 	$	119,197	 	
Accounts receivable, net	 	 	95,354	 	 	 	80,876	 	
Prepaid expenses and other current assets	 	 	83,887	 	 	 	81,120	 	
Total current assets	 	 	327,893	 	 	 	281,193	 	
Property and equipment, net	 	 	98,238	 	 	 	97,005	 	
Operating lease assets	 	 	-	 	 	 	101,345	 	
Restricted cash, net of current portion	 	 	1,840	 	 	 	1,834	 	
Intangibles, net	 	 	1,059,988	 	 	 	895,800	 	
Goodwill	 	 	2,400,390	 	 	 	2,414,335	 	
Other assets	 	 	41,545	 	 	 	61,261	 	
Deferred tax assets	 	 	6,059	 	 	 	5,895	 	
Total assets	 	$	3,935,953	 	 	$	3,858,668	 	
LIABILITIES AND EQUITY	 	
Current liabilities:	 	 	 	 	 	 	 	 	
Accounts payable	 	$	35,447	 	 	$	56,671	 	
Current operating lease liabilities	 	 	-	 	 	 	17,900	 	
Accrued liabilities	 	 	119,379	 	 	 	144,285	 	
Deferred revenue, current portion	 	 	369,780	 	 	 	381,635	 	
Total current liabilities	 	 	524,606	 	 	 	600,491	 	
Long-term debt	 	 	200,000	 	 	 	200,000	 	
Deferred revenue, net of current portion	 	 	9,518	 	 	 	11,189	 	
Deferred tax liabilities	 	 	201,212	 	 	 	170,378	 	
Non-current operating lease liabilities	 	 	-	 	 	 	91,407	 	
Other long-term liabilities	 	 	25,929	 	 	 	10,077	 	
Total liabilities	 	 	961,265	 	 	 	1,083,542	 	
Equity:	 	 	 	 	 	 	 	 	
Common stock	 	 	567	 	 	 	572	 	
Additional paid-in capital	 	 	3,316,603	 	 	 	3,349,108	 	
Retained earnings	 	 	84,043	 	 	 	24,854	 	
Accumulated other comprehensive income (loss)	 	 	2,133	 	 	 	(1,946	)	
Treasury stock	 	 	(428,658	)	 	 	(597,462	)	
Total equity	 	 	2,974,688	 	 	 	2,775,126	 	
Total liabilities and equity	 	$	3,935,953	 	 	$	3,858,668	 	

 
LogMeIn, Inc.	 	
Condensed Consolidated Statements of Operations (unaudited)	 	
(In thousands, except per share data)	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
 	 	Three Months Ended September 30,	 	 	Nine Months Ended September 30,	 	
 	 	 	2018	 	 	 	2019	 	 	 	2018	 	 	 	2019	 	
Revenue	 	$	308,927	 	 	$	316,941	 	 	$	893,794	 	 	$	937,705	 	
Cost of revenue	 	 	72,853	 	 	 	81,230	 	 	 	208,628	 	 	 	239,685	 	
Gross profit	 	 	236,074	 	 	 	235,711	 	 	 	685,166	 	 	 	698,020	 	
Operating expenses:	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Research and development	 	 	42,220	 	 	 	39,452	 	 	 	129,256	 	 	 	120,548	 	
Sales and marketing	 	 	95,041	 	 	 	110,604	 	 	 	282,599	 	 	 	346,063	 	
General and administrative	 	 	37,441	 	 	 	34,954	 	 	 	111,990	 	 	 	103,379	 	
Restructuring charge	 	 	-	 	 	 	5,172	 	 	 	-	 	 	 	14,602	 	
Gain on disposition of assets	 	 	-	 	 	 	-	 	 	 	(33,910	)	 	 	-	 	
Amortization of acquired intangibles	 	 	44,268	 	 	 	39,368	 	 	 	128,698	 	 	 	118,257	 	
Total operating expenses	 	 	218,970	 	 	 	229,550	 	 	 	618,633	 	 	 	702,849	 	
Income (loss) from operations	 	 	17,104	 	 	 	6,161	 	 	 	66,533	 	 	 	(4,829	)	
Interest income	 	 	293	 	 	 	299	 	 	 	1,335	 	 	 	1,375	 	
Interest expense	 	 	(2,033	)	 	 	(2,048	)	 	 	(4,213	)	 	 	(6,317	)	
Other income (expense), net	 	 	(77	)	 	 	180	 	 	 	(403	)	 	 	(187	)	
Income (loss) before income taxes	 	 	15,287	 	 	 	4,592	 	 	 	63,252	 	 	 	(9,958	)	
(Provision for) benefit from income taxes	 	 	(2,570	)	 	 	516	 	 	 	(14,269	)	 	 	(495	)	
Net income (loss)	 	$	12,717	 	 	$	5,108	 	 	$	48,983	 	 	$	(10,453	)	
Net income (loss) per share:	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Basic	 	$	0.25	 	 	$	0.10	 	 	$	0.94	 	 	$	(0.21	)	
Diluted	 	$	0.24	 	 	$	0.10	 	 	$	0.93	 	 	$	(0.21	)	
Weighted average shares outstanding:	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Basic	 	 	51,652	 	 	 	49,265	 	 	 	52,090	 	 	 	49,886	 	
Diluted	 	 	52,066	 	 	 	49,368	 	 	 	52,829	 	 	 	49,886	 	

 

LogMeIn, Inc.	 	
Calculation of Non-GAAP Revenue (unaudited)	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
 	 	Three Months Ended September 30,	 	 	Nine Months Ended September 30,	 	
 	 	 	2018	 	 	 	2019	 	 	 	2018	 	 	 	2019	 	
 	 	(in thousands)	 	 	(in thousands)	 	
GAAP Revenue	 	$	308,927	 	 	$	316,941	 	 	$	893,794	 	 	$	937,705	 	
Add Back:	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Effect of acquisition accounting on fair value of acquired deferred revenue	 	 	654	 	 	 	230	 	 	 	3,186	 	 	 	978	 	
Non-GAAP Revenue	 	$	309,581	 	 	$	317,171	 	 	$	896,980	 	 	$	938,683	 	

 

 

 
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,	 	
 	 	 	2018	 	 	 	2019	 	 	 	2018	 	 	 	2019	 	
 	 	(In thousands, except
per share data)	 	 	(In thousands, except
per share data)	 	
GAAP Net income (loss) from operations	 	$	17,104	 	 	$	6,161	 	 	$	66,533	 	 	$	(4,829	)	
Add Back:	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Effect of acquisition accounting on fair value of acquired deferred revenue	 	 	654	 	 	 	230	 	 	 	3,186	 	 	 	978	 	
Stock-based compensation expense	 	 	15,688	 	 	 	17,611	 	 	 	48,820	 	 	 	50,845	 	
Acquisition related costs	 	 	4,698	 	 	 	3,390	 	 	 	19,074	 	 	 	10,261	 	
Restructuring charge	 	 	-	 	 	 	5,172	 	 	 	-	 	 	 	14,602	 	
Litigation related expenses	 	 	199	 	 	 	713	 	 	 	476	 	 	 	1,406	 	
Amortization of acquired intangibles	 	 	62,484	 	 	 	60,227	 	 	 	183,086	 	 	 	181,124	 	
Gain on disposition of assets	 	 	-	 	 	 	-	 	 	 	(33,910	)	 	 	-	 	
Effect of acquisition accounting on internally capitalized software development costs	 	 	(1,505	)	 	 	-	 	 	 	(7,636	)	 	 	-	 	
Non-GAAP Operating income	 	 	99,322	 	 	 	93,504	 	 	 	279,629	 	 	 	254,387	 	
Interest and other expense, net	 	 	(1,817	)	 	 	(1,569	)	 	 	(3,281	)	 	 	(5,129	)	
Non-GAAP Income before income taxes	 	 	97,505	 	 	 	91,935	 	 	 	276,348	 	 	 	249,258	 	
Non-GAAP Provision for income taxes (1)	 	 	(24,637	)	 	 	(23,231	)	 	 	(68,811	)	 	 	(62,090	)	
Non-GAAP Net income	 	$	72,868	 	 	$	68,704	 	 	$	207,537	 	 	$	187,168	 	
Non-GAAP net income per diluted share	 	$	1.40	 	 	$	1.39	 	 	$	3.93	 	 	$	3.73	 	
Diluted weighted average shares outstanding used
   in computing per share amounts	 	 	52,066	 	 	 	49,368	 	 	 	52,829	 	 	 	50,198	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
(1) The non-GAAP provision for income taxes reported in the three and nine months ended September 30, 2018 and 2019 excludes the tax impact of non-GAAP items, and for the nine months ended September 30, 2018 excludes a net discrete integration-related tax benefit of $2.0 million as well as 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 Act.	 	

 

 
Calculation of EBITDA and Adjusted EBITDA (unaudited)	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
 	 	Three Months Ended September 30,	 	 	Nine Months Ended September 30,	 	
 	 	 	2018	 	 	 	2019	 	 	 	2018	 	 	 	2019	 	
 	 	(in thousands)	 	 	(in thousands)	 	
GAAP Net income (loss)	 	$	12,717	 	 	$	5,108	 	 	$	48,983	 	 	$	(10,453	)	
Add Back:	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Interest and other expense, net	 	 	1,817	 	 	 	1,569	 	 	 	3,281	 	 	 	5,129	 	
Income tax provision (benefit)	 	 	2,570	 	 	 	(516	)	 	 	14,269	 	 	 	495	 	
Amortization of acquired intangibles	 	 	62,484	 	 	 	60,227	 	 	 	183,086	 	 	 	181,124	 	
Depreciation and amortization expense	 	 	14,337	 	 	 	15,795	 	 	 	40,096	 	 	 	47,231	 	
EBITDA	 	 	93,925	 	 	 	82,183	 	 	 	289,715	 	 	 	223,526	 	
Add Back:	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Effect of acquisition accounting on fair value
   of acquired deferred revenue	 	 	654	 	 	 	230	 	 	 	3,186	 	 	 	978	 	
Stock-based compensation expense	 	 	15,688	 	 	 	17,611	 	 	 	48,820	 	 	 	50,845	 	
Gain on disposition of assets	 	 	-	 	 	 	-	 	 	 	(33,910	)	 	 	-	 	
Acquisition related costs	 	 	4,698	 	 	 	3,390	 	 	 	19,074	 	 	 	10,261	 	
Restructuring charge	 	 	-	 	 	 	5,172	 	 	 	-	 	 	 	14,602	 	
Litigation related expenses	 	 	199	 	 	 	713	 	 	 	476	 	 	 	1,406	 	
Adjusted EBITDA	 	$	115,164	 	 	$	109,299	 	 	$	327,361	 	 	$	301,618	 	
EBITDA Margin	 	 	30.4	%	 	 	25.9	%	 	 	32.4	%	 	 	23.8	%	
Adjusted EBITDA Margin	 	 	37.2	%	 	 	34.5	%	 	 	36.5	%	 	 	32.1	%	

Calculation of Adjusted Cash Flows from Operations and Adjusted Free Cash Flow (unaudited)	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
 	 	Three Months Ended September 30,	 	 	Nine Months Ended September 30,	 	
 	 	 	2018	 	 	 	2019	 	 	 	2018	 	 	 	2019	 	
 	 	(in thousands)	 	 	(in thousands)	 	
GAAP Cash flows from operations	 	$	73,662	 	 	$	83,001	 	 	$	330,864	 	 	$	286,368	 	
Add Back:	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Litigation related payments	 	 	16	 	 	 	803	 	 	 	1,163	 	 	 	822	 	
Acquisition retention-based bonus	 	 	2,486	 	 	 	1,355	 	 	 	3,143	 	 	 	6,581	 	
Restructuring payments	 	 	-	 	 	 	2,449	 	 	 	-	 	 	 	9,498	 	
Partial tax payment for gain on Xively disposition	 	 	4,236	 	 	 	-	 	 	 	4,236	 	 	 	-	 	
Transaction related payments (acquisitions and dispositions)	 	 	3,120	 	 	 	438	 	 	 	16,794	 	 	 	2,317	 	
Adjusted cash flows from operations	 	 	83,520	 	 	 	88,046	 	 	 	356,200	 	 	 	305,586	 	
Purchases of property and equipment	 	 	(7,960	)	 	 	(7,732	)	 	 	(21,590	)	 	 	(29,813	)	
Intangible asset additions	 	 	(8,276	)	 	 	(10,676	)	 	 	(26,138	)	 	 	(29,421	)	
Adjusted Free Cash Flow	 	$	67,284	 	 	$	69,638	 	 	$	308,472	 	 	$	246,352	 	
GAAP Cash flows from operations as a % of Non-GAAP Revenue	 	 	23.8	%	 	 	26.2	%	 	 	36.9	%	 	 	30.5	%	
Adjusted Cash flows from operations as a % of
   Non-GAAP Revenue	 	 	27.0	%	 	 	27.8	%	 	 	39.7	%	 	 	32.6	%	
Adjusted Free Cash Flow as a % of Non-GAAP Revenue	 	 	21.7	%	 	 	22.0	%	 	 	34.4	%	 	 	26.2	%	

 

Stock-Based Compensation Expense (unaudited)	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
 	 	Three Months Ended September 30,	 	 	Nine Months Ended September 30,	 	
 	 	 	2018	 	 	 	2019	 	 	 	2018	 	 	 	2019	 	
 	 	(in thousands)	 	 	(in thousands)	 	
Cost of revenue	 	$	1,278	 	 	$	1,309	 	 	$	3,755	 	 	$	3,590	 	
Research and development (1)	 	 	4,174	 	 	 	4,836	 	 	 	14,232	 	 	 	12,825	 	
Sales and marketing (1)	 	 	3,492	 	 	 	4,218	 	 	 	11,788	 	 	 	13,212	 	
General and administrative	 	 	6,744	 	 	 	7,248	 	 	 	19,045	 	 	 	21,218	 	
Total stock based-compensation	 	$	15,688	 	 	$	17,611	 	 	$	48,820	 	 	$	50,845	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
(1) The stock-based compensation expense disclosure reported in the table above for the nine months ended September 30, 2019 includes a reclassification from research and development to sales and marketing of $1.4 million ($0.630 million and $0.731 million for the three months ended March 31, 2019 and June 30, 2019, respectively).	 	

 
 
LogMeIn, Inc.	
Calculation of Projected 2019 Non-GAAP Revenue (unaudited)	
(In millions)	
 	 	 	 	 	
 	 	Three Months Ended	 	Twelve Months Ended	
 	 	December 31, 2019	 	December 31, 2019	
GAAP Revenue	 	$319 - $321	 	$1,257 - $1,259	
Add Back:	 	 	 	 	
Effect of acquisition accounting on fair value of acquired deferred
   revenue	 	-	 	1	
Non-GAAP Revenue	 	$319 - $321	 	$1,258 - $1,260	

 

 
 
Calculation of Projected 2019 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, 2019	 	 	December 31, 2019	 	
GAAP Net income (loss)	 	$8 - $9	 	 	$(3) - $(2)	 	
Add Back:	 	 	 	 	 	 	 	 	
Effect of acquisition accounting on fair value of acquired deferred revenue	 	-	 	 	1	 	
Stock-based compensation expense	 	18	 	 	69	 	
Acquisition and litigation related costs	 	3	 	 	15	 	
Restructuring charges	 	-	 	 	15	 	
Amortization of acquired intangibles	 	60	 	 	241	 	
Income tax effect of non-GAAP items	 	(21)	 	 	(82)	 	
Non-GAAP Net income	 	$68 - $69	 	 	$256 - $257	 	
GAAP net income per diluted share, (loss) per share	 	$0.15 - $0.17	 	 	$(0.06) - $(0.04)	 	
Non-GAAP net income per diluted share	 	$1.39 - $1.41	 	 	$5.12 - $5.14	 	
Weighted average shares outstanding used in computing net loss per
   share	 	 	 	 	 	49.6	 	
Diluted weighted average shares outstanding used in computing net
   income per diluted share	 	 	49.0	 	 	 	50.0	 	

 

 

 
 
Calculation of Projected 2019 EBITDA and Adjusted EBITDA (unaudited)	 	
(In millions)	 	
 	 	 	 	 	 	 	 	 	
 	 	Three Months Ended	 	 	Twelve Months Ended	 	
 	 	December 31, 2019	 	 	December 31, 2019	 	
GAAP Net income (loss)	 	$8 - $9	 	 	$(3) - $(2)	 	
Add Back:	 	 	 	 	 	 	 	 	
Interest and other (income) expense, net	 	2	 	 	7	 	
Income tax provision (benefit)	 	3	 	 	4	 	
Amortization of acquired intangibles	 	60	 	 	241	 	
Depreciation and amortization expense	 	16	 	 	63	 	
EBITDA	 	$89 - $90	 	 	$312 - $313	 	
Add Back:	 	 	 	 	 	 	 	 	
Effect of acquisition accounting on fair value of acquired
   deferred revenue	 	-	 	 	1	 	
Stock-based compensation expense	 	18	 	 	69	 	
Acquisition and litigation related costs	 	3	 	 	15	 	
Restructuring charges	 	-	 	 	15	 	
Adjusted EBITDA	 	$110 - $111	 	 	$412 -$413	 	
EBITDA Margin	 	28%	 	 	25%	 	
Adjusted EBITDA Margin	 	34.5%	 	 	33%	 	

 

LogMeIn, Inc.	 	
Condensed Consolidated Statements of Cash Flows (unaudited)	 	
(In thousands)	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
 	 	Three Months Ended September 30,	 	 	Nine Months Ended September 30,	 	
 	 	 	2018	 	 	 	2019	 	 	 	2018	 	 	 	2019	 	
Cash flows from operating activities	 	$	12,717	 	 	$	5,108	 	 	$	48,983	 	 	$	(10,453	)	
Net income (loss)	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Adjustments to reconcile net income (loss) to net cash
   provided by operating activities:	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
   Stock-based compensation	 	 	15,688	 	 	 	17,611	 	 	 	48,820	 	 	 	50,845	 	
   Depreciation and amortization	 	 	76,821	 	 	 	76,022	 	 	 	223,181	 	 	 	228,355	 	
   Gain on disposition of assets, excluding transaction costs	 	 	-	 	 	 	-	 	 	 	(36,281	)	 	 	-	 	
   Change in fair value of contingent consideration liability	 	 	-	 	 	 	389	 	 	 	-	 	 	 	581	 	
   Restructuring-related property and equipment charges	 	 	-	 	 	 	3,164	 	 	 	-	 	 	 	3,164	 	
   Benefit from deferred income taxes	 	 	(12,032	)	 	 	(11,315	)	 	 	(34,062	)	 	 	(34,101	)	
   Other, net	 	 	489	 	 	 	335	 	 	 	1,282	 	 	 	1,274	 	
   Changes in assets and liabilities, excluding effect of acquisitions and dispositions:	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
     Accounts receivable	 	 	(6,429	)	 	 	8,498	 	 	 	16,301	 	 	 	12,608	 	
     Prepaid expenses and other current assets	 	 	518	 	 	 	(10,192	)	 	 	8,474	 	 	 	(5,415	)	
     Other assets	 	 	(4,897	)	 	 	(6,841	)	 	 	(12,830	)	 	 	(20,387	)	
     Accounts payable	 	 	2,072	 	 	 	5,944	 	 	 	13,575	 	 	 	21,451	 	
     Accrued liabilities	 	 	(1,848	)	 	 	7,920	 	 	 	21,113	 	 	 	24,146	 	
     Deferred revenue	 	 	(7,752	)	 	 	(12,586	)	 	 	28,031	 	 	 	17,664	 	
     Other long-term liabilities	 	 	(1,685	)	 	 	(1,056	)	 	 	4,277	 	 	 	(3,364	)	
         Net cash provided by operating activities	 	 	73,662	 	 	 	83,001	 	 	 	330,864	 	 	 	286,368	 	
Cash flows from investing activities	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Purchases of property and equipment	 	 	(7,960	)	 	 	(7,732	)	 	 	(21,590	)	 	 	(29,813	)	
Intangible asset additions	 	 	(8,276	)	 	 	(10,676	)	 	 	(26,138	)	 	 	(29,421	)	
Acquisition of businesses, net of cash acquired	 	 	1,279	 	 	 	-	 	 	 	(342,072	)	 	 	(22,463	)	
Proceeds from disposition of assets	 	 	-	 	 	 	7,500	 	 	 	42,394	 	 	 	7,500	 	
         Net cash provided by (used in) investing activities	 	 	(14,957	)	 	 	(10,908	)	 	 	(347,406	)	 	 	(74,197	)	
Cash flows from financing activities	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Borrowings (repayments) under credit facility	 	 	-	 	 	 	-	 	 	 	200,000	 	 	 	-	 	
Proceeds from issuance of common stock upon option exercises	 	 	2,809	 	 	 	51	 	 	 	3,831	 	 	 	133	 	
Payments of withholding taxes in connection with restricted stock unit vesting	 	 	(1,536	)	 	 	(792	)	 	 	(29,490	)	 	 	(18,468	)	
Payment of contingent consideration	 	 	-	 	 	 	-	 	 	 	-	 	 	 	(1,857	)	
Dividends paid on common stock	 	 	(15,523	)	 	 	(16,037	)	 	 	(46,900	)	 	 	(48,736	)	
Purchase of treasury stock	 	 	(75,127	)	 	 	(44,956	)	 	 	(190,230	)	 	 	(169,188	)	
         Net cash provided by (used in) financing activities	 	 	(89,377	)	 	 	(61,734	)	 	 	(62,789	)	 	 	(238,116	)	
Effect of exchange rate changes on cash, cash equivalents and restricted cash	 	 	(538	)	 	 	(2,724	)	 	 	(5,427	)	 	 	(3,516	)	
Net increase (decrease) in cash, cash equivalents and restricted cash	 	 	(31,210	)	 	 	7,635	 	 	 	(84,758	)	 	 	(29,461	)	
Cash, cash equivalents and restricted cash, beginning of period	 	 	200,661	 	 	 	113,396	 	 	 	254,209	 	 	 	150,492	 	
Cash, cash equivalents and restricted cash, end of period	 	$	169,451	 	 	$	121,031	 	 	$	169,451	 	 	$	121,031