Omnicell Achieves Record Revenue in the Third Quarter 2017
MOUNTAIN VIEW, Calif., Oct. 26, 2017 /PRNewswire/ -- Omnicell, Inc. (NASDAQ: OMCL), a leading provider of medication and supply management solutions to healthcare systems, today announced results for its third quarter ended September 30, 2017.
GAAP results: Revenue for the third quarter of 2017 was $186.8 million, up $5.9 million, or 3.3% from the second quarter of 2017, and up $10.1 million, or 5.7% from the third quarter of 2016. Revenue for the nine months ended September 30, 2017 was $518.2 million, down $2.4 million, or 0.5% from the nine months ended September 30, 2016.
Third quarter 2017 net income as reported in accordance with U.S. generally accepted accounting principles (GAAP) was $6.2 million, or $0.16 per diluted share. This compares to GAAP net income of $0.8 million, or $0.02 per diluted share, for the second quarter of 2017, and GAAP net income of $2.0 million, or $0.05 per diluted share, for the third quarter of 2016.
GAAP net loss for the nine months ended September 30, 2017 was $3.7 million, or $0.10 per diluted share. GAAP net income was $0.4 million, or $0.01 per diluted share, for the nine months ended September 30, 2016.
Non-GAAP results: Non-GAAP revenue for the third quarter of 2017 was $187.1 million, up $5.9 million, or 3.3% from the second quarter of 2017, and up $7.7 million, or 4.3% from the third quarter of 2016. Non-GAAP revenue for the nine months ended September 30, 2017 was $519.2 million, down $9.5 million, or 1.8% from the nine months ended September 30, 2016.
Non-GAAP net income for the third quarter of 2017 was $16.3 million, or $0.42 per diluted share. This compares to non-GAAP net income of $11.7 million, or $0.31 per diluted share, for the second quarter of 2017 and $14.9 million, or $0.40 per diluted share, for the third quarter of 2016.
Non-GAAP net income for the nine months ended September 30, 2017 was $30.1 million, or $0.78 per diluted share. This compares to non-GAAP net income of $42.0 million, or $1.14 per diluted share for the nine months ended September 30, 2016.
Non-GAAP net income for each period presented excludes, when applicable, the effect of stock-based compensation expense, amortization expense of acquired intangible assets, acquisition related expenses, fair value adjustments related to business acquisitions, severance and integration-related expenses, and amortization of debt issuance cost.
"Omnicell is winning in the marketplace. New product introductions and innovation across the Omnicell platform drove customer wins and increased portfolio adoption in Q3," said Randall Lipps, Omnicell president, CEO and chairman. "We are proud of the company's financial performance and our strategic execution aimed at supporting health systems in achieving their patient safety, operational and financial goals."
2017 Guidance:
For the fourth quarter of 2017, the Company expects both GAAP and non-GAAP revenue to be between $201 million and $207 million, and non-GAAP earnings to be between $0.49 and $0.55 per share.
For the year 2017, the Company expects product bookings to be between $570 million and $590 million. The Company expects both GAAP and non-GAAP revenue to be between $720 million and $726 million, and non-GAAP earnings to be between $1.27 and $1.33 per share.
Long term financial framework and preliminary 2018 Guidance:
The Company's long term financial framework is:
-- 8%-12% Organic Revenue Growth
-- 5% Inorganic Revenue Growth on average over the long term
-- 15% Non-GAAP Operating Margin
For 2018 onwards the Company expects organic growth to be in the long term 8%-12% range. The Company's preliminary view of Product Bookings growth for 2018 is at the high end and potentially above the 8%-12% range. The Company's preliminary view of Revenue growth for 2018 is also in the 8% to 12% range, however, at this point the Company has visibility to the middle of the 8%-12% range with potential upside toward the higher end of the range.
The Company expects to provide more specific guidance during the 2017 fourth quarter earnings call.
Omnicell Conference Call Information
Omnicell will hold a conference call today, Thursday, October 26, 2017 at 1:30 p.m. PT to discuss third quarter financial results. The conference call can be monitored by dialing 1-800-696-5518 within the U.S. or 1-706-758-4883 for all other locations. The Conference ID # is 36567558. Internet users can access the conference call at http://ir.omnicell.com/events.cfm. A replay of the call will be available today at approximately 4:30 p.m. PT and will be available until 11:59 p.m. PT on November 30, 2017. The replay access numbers are 1-855-859-2056 within the U.S. and 1-404-537-3406 for all other locations, Conference ID # is 36567558.
About Omnicell
Since 1992, Omnicell (NASDAQ: OMCL) has been inspired to create safer and more efficient ways to manage medications and supplies across all care settings. As a leader in medication and supply dispensing automation, central pharmacy automation, IV robotics, analytics software, and medication adherence and packaging systems, Omnicell is focused on improving care across the entire healthcare continuum-from the acute care hospital setting, to post-acute skilled nursing and long-term care facilities, to the patient's home.
Approximately 4,000 customers worldwide use Omnicell® automation and analytics solutions to increase operational efficiency, reduce medication errors, deliver actionable intelligence and improve patient safety.
Omnicell's innovative medication adherence solutions, used by over 32,000 institutional and retail pharmacies in North America and the United Kingdom, are designed to improve patient adherence to prescriptions, helping to reduce costly hospital readmissions.
Recent Omnicell acquisitions add distinct capabilities, particularly in central pharmacy, IV robotics, and pharmacy software, creating the broadest medication management product portfolio in the industry.
For more information about Omnicell, Inc. please visit www.omnicell.com.
Forward-Looking Statements
To the extent any statements contained in this release deal with information that is not historical, these statements are "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. As such, they are subject to the occurrence of many events outside Omnicell's control and are subject to various risk factors that could cause actual results to differ materially from those expressed or implied in any forward-looking statement. Such statements include, but are not limited to Omnicell's momentum, pipeline and new sales opportunities, and projected bookings, profit and revenue growth. Risks that contribute to the uncertain nature of the forward-looking statements include our ability to take advantage of the growth opportunities in medication management across the spectrum of healthcare settings from long-term care to home care, our ability to successfully convert product backlog and sales quotes to our XT Series, our ability to execute the manufacturing ramp-up of XT Series, our ability to continue cost reduction efforts, and our ability to implement development and manufacturing Centers of Excellence, unfavorable general economic and market conditions, risks to growth and acceptance of our products and services, including competitive conversions, and to growth of the clinical automation and workflow automation market generally, the potential of increasing competition, potential regulatory changes, the ability of the Company to improve sales productivity to grow product bookings, to develop new products and to acquire and successfully integrate companies. These and other risks and uncertainties are described more fully in Omnicell's most recent filings with the Securities and Exchange Commission. Prospective investors are cautioned not to place undue reliance on forward-looking statements. All forward-looking statements contained in this press release speak only as of the date on which they were made. Omnicell undertakes no obligation to update such statements to reflect events that occur or circumstances that exist after the date on which they were made.
Use of Non-GAAP Financial Information
This press release contains financial measures that are not calculated in accordance with U.S. generally accepted accounting principles. Our management evaluates and makes operating decisions using various performance measures. In addition to Omnicell's GAAP results, we also consider non-GAAP revenue, non-GAAP gross profit, non-GAAP operating expenses, non-GAAP net income, and non-GAAP net income per diluted share. Additionally, we calculate Adjusted EBITDA (another non-GAAP measure) by means of adjustments to GAAP Net Income. These non-GAAP results should not be considered as an alternative to gross profit, operating expenses, net income, net income per diluted share, or any other performance measure derived in accordance with GAAP. We present these non-GAAP results because we consider them to be important supplemental measures of Omnicell's performance.
Our non-GAAP revenue, non-GAAP gross profit, non-GAAP operating expenses, non-GAAP net income and non-GAAP net income per diluted share are exclusive of certain items to facilitate management's review of the comparability of Omnicell's core operating results on a period to period basis because such items are not related to Omnicell's ongoing core operating results as viewed by management. We define our "core operating results" as those revenues recorded in a particular period and the expenses incurred within that period that directly drive operating income in that period. Management uses these non-GAAP financial measures in making operating decisions because, in addition to meaningful supplemental information regarding operating performance, the measures give us a better understanding of how we should invest in research and development, fund infrastructure growth and evaluate the effectiveness of marketing strategies. In calculating the above non-GAAP results, management specifically adjusted for the following excluded items:
a) Share-based compensation expense. We excluded from our non-GAAP results the expense related to equity-based compensation plans as they represent expenses that do not require cash settlement from Omnicell.
b) Amortization of acquired intangible assets. We excluded from our non-GAAP results the intangible assets amortization expense resulting from our past acquisitions. These non-cash charges are not considered by management to reflect the core cash-generating performance of the business and therefore are excluded from our non-GAAP results.
c) Amortization of debt issuance cost. Debt issuance cost represents costs associated with the issuance of Term Loan and Revolving Line of Credit facilities. The cost includes underwriting fees, original issue discount, ticking fee, and legal fees. This non-cash expense is not considered by management to reflect the core cash-generating performance of the business and therefore is excluded from our non-GAAP results.
d) Acquisition accounting impact related to deferred revenue. In connection with recent acquisitions, business combination rules require us to account for the fair values of arrangements for which acceptance has not been obtained, and post installation support has not been provided in our purchase accounting. The non-GAAP adjustment to our revenues is intended to include the full amounts of such revenues. We believe the adjustment to these revenues is useful as a measure of the ongoing performance of our business.
e) Inventory fair value adjustments. In connection with acquisition of Aesynt, business combination rules require us to account for the fair values of inventory acquired in our purchase accounting. The non-GAAP adjustment to the cost of revenues is intended to include the impact of such adjustment. We believe the adjustment is useful as a measure of the ongoing performance of our business.
f) Acquisition related expenses. We excluded from the non-GAAP results the expenses which are related to the recent acquisitions. These expenses are unrelated to our ongoing operations and we do not expect them to occur in the ordinary course of business. We believe that excluding these acquisition related expenses provides more meaningful comparisons of the financial results to our historical operations and forward looking guidance and the financial results of less acquisitive peer companies.
g) Severance and other related expenses. We excluded from our non-GAAP results the expenses which are related to the restructuring and integrations related events. These expenses are unrelated to our ongoing operations and we do not expect them to occur in the ordinary course of business. We believe that excluding these expenses provides more meaningful comparisons of the financial results to our historical operations and forward looking guidance and the financial results of less acquisitive peer companies.
Management adjusts for the above items because management believes that, in general, these items possess one or more of the following characteristics: their magnitude and timing is largely outside of Omnicell's control; they are unrelated to the ongoing operation of the business in the ordinary course; they are unusual and we do not expect them to occur in the ordinary course of business; or they are non-operational, or non-cash expenses involving stock compensation plans.
We believe that the presentation of these non-GAAP financial measures is warranted for several reasons:
1) Such non-GAAP financial measures provide an additional analytical tool for understanding Omnicell's financial performance by excluding the impact of items which may obscure trends in the core operating results of the business;
2) Since we have historically reported non-GAAP results to the investment community, we believe the inclusion of non-GAAP numbers provides consistency and enhances investors' ability to compare our performance across financial reporting periods;
3) These non-GAAP financial measures are employed by Omnicell's management in its own evaluation of performance and are utilized in financial and operational decision making processes, such as budget planning and forecasting; and
4) These non-GAAP financial measures facilitate comparisons to the operating results of other companies in our industry, which use similar financial measures to supplement their GAAP results, thus enhancing the perspective of investors who wish to utilize such comparisons in their analysis of our performance.
Set forth below are additional reasons why share-based compensation expense is excluded from our non-GAAP financial measures:
i) While share-based compensation calculated in accordance with ASC 718 constitutes an ongoing and recurring expense of Omnicell, it is not an expense that requires cash settlement by Omnicell. We therefore exclude these charges for purposes of evaluating core operating results. Thus, our non-GAAP measurements are presented exclusive of stock-based compensation expense to assist management and investors in evaluating our core operating results.
ii) We present ASC 718 share-based payment compensation expense in our reconciliation of non-GAAP financial measures on a pre-tax basis because the exact tax differences related to the timing and deductibility of share-based compensation, under ASC 718 are dependent upon the trading price of Omnicell's common stock and the timing and exercise by employees of their stock options. As a result of these timing and market uncertainties the tax effect related to share-based compensation expense would be inconsistent in amount and frequency and is therefore excluded from our non-GAAP results.
Our Adjusted EBITDA calculation is defined as earnings before interest income and expense, taxes, depreciation and amortization, and non-cash expenses, including ASC 718 stock compensation expense, as well as certain non-GAAP adjustments.
As stated above, we present non-GAAP financial measures because we consider them to be important supplemental measures of performance. However, non-GAAP financial measures have limitations as an analytical tool and should not be considered in isolation or as a substitute for Omnicell's GAAP results. In the future, we expect to incur expenses similar to certain of the non-GAAP adjustments described above and expect to continue reporting non-GAAP financial measures excluding such items. Some of the limitations in relying on non-GAAP financial measures are:
-- Omnicell's stock option and stock purchase plans are important
components of incentive compensation arrangements and will be reflected
as expenses in Omnicell's GAAP results for the foreseeable future under
ASC 718.
-- Other companies, including companies in Omnicell's industry, may
calculate non-GAAP financial measures differently than Omnicell,
limiting their usefulness as a comparative measure.
Pursuant to the requirements of SEC Regulation G, a detailed reconciliation between Omnicell's non-GAAP and GAAP financial results is set forth in the financial tables at the end of this press release. Investors are advised to carefully review and consider this information strictly as a supplement to the GAAP results that are contained in this press release and in Omnicell's SEC filings.
With respect to the Company's expectations under "Guidance" above, and regarding certain projections discussed on today's teleconference, reconciliation of non-GAAP earnings ranges per share guidance for the remainder of 2017, to the closest corresponding GAAP measures is not available without unreasonable efforts as we are unable to predict with reasonable certainty the matters we would allocate to "certain items," including unusual gains and losses, costs associated with future restructurings, acquisition-related expenses and litigation outcomes. These items are uncertain, complex, depend on various factors, have low visibility and could have a material impact on GAAP EPS in future periods.
Omnicell, Inc.
Condensed Consolidated Statements of Operations
(Unaudited, in thousands, except per share data)
Three Months Ended Nine Months Ended
September 30, June 30, 2017 September 30, September 30, September 30,
2017 2016 2017 2016
---- ---- ---- ----
Revenues:
Product $135,103 $128,056 $133,621 $362,089 $392,190
Services and other
revenues 51,679 52,829 43,116 156,132 128,458
------ ------ ------ ------- -------
Total revenues 186,782 180,885 176,737 518,221 520,648
------- ------- ------- ------- -------
Cost of revenues:
Cost of product revenues 79,725 81,738 76,188 225,051 224,412
Cost of services and
other revenues 22,204 21,172 19,041 66,150 56,766
------ ------ ------ ------ ------
Total cost of revenues 101,929 102,910 95,229 291,201 281,178
------- ------- ------ ------- -------
Gross profit 84,853 77,975 81,508 227,020 239,470
Operating expenses:
Research and development 16,414 16,911 15,264 50,128 42,896
Selling, general and
administrative 58,725 63,468 61,316 186,818 189,912
Total operating expenses 75,139 80,379 76,580 236,946 232,808
------ ------ ------ ------- -------
Income (loss) from
operations 9,714 (2,404) 4,928 (9,926) 6,662
Interest and other income
(expense), net (2,732) 196 (2,721) (4,992) (6,773)
------ --- ------ ------ ------
Income (loss) before
provision for income
taxes 6,982 (2,208) 2,207 (14,918) (111)
Expense (benefit) for
income taxes 751 (3,045) 224 (11,232) (557)
Net income (loss) $6,231 $837 $1,983 $(3,686) $446
====== ==== ====== ======= ====
Net income (loss) per share:
Basic $0.17 $0.02 $0.05 $(0.10) $0.01
Diluted $0.16 $0.02 $0.05 $(0.10) $0.01
Weighted average shares outstanding:
Basic 37,698 37,250 36,332 37,266 36,020
Diluted 38,973 38,370 37,079 37,266 36,695
Omnicell, Inc.
Condensed Consolidated Balance Sheets
(Unaudited, in thousands)
September 30, 2017 December 31, 2016
------------------ -----------------
ASSETS
Current assets:
Cash and cash equivalents $7,466 $54,488
Accounts receivable, net 171,869 150,303
Inventories 92,239 69,297
Prepaid expenses 28,044 28,646
Other current assets 15,763 12,674
------ ------
Total current assets 315,381 315,408
Property and equipment, net 40,219 42,011
Long-term investment in sales-type
leases, net 15,986 20,585
Goodwill 334,780 327,724
Intangible assets, net 174,227 190,283
Long-term deferred tax assets 5,629 4,041
Other long-term assets 37,596 35,051
Total assets $923,818 $935,103
======== ========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $51,182 $27,069
Accrued compensation 27,380 26,722
Accrued liabilities 33,061 31,195
Long-term debt, current portion, net 13,410 8,410
Deferred revenue, net 80,837 87,516
------ ------
Total current liabilities 205,870 180,912
Long-term, deferred revenue 16,376 17,051
Long-term deferred tax liabilities 40,527 51,592
Other long-term liabilities 9,625 8,210
Long-term debt, net 178,923 245,731
------- -------
Total liabilities 451,321 503,496
Total stockholders' equity 472,497 431,607
Total liabilities and stockholders'
equity $923,818 $935,103
======== ========
Omnicell, Inc.
Condensed Consolidated Statements of Cash Flows
(Unaudited, in thousands)
Nine months ended September 30,
2017 2016
---- ----
Operating Activities
Net income
(loss) $(3,686) $446
Adjustments to reconcile
net income to net cash
provided by operating
activities:
Depreciation
and
amortization 38,542 43,905
(Gain) loss
on
disposal
of fixed
assets 128 (9)
Share-
based
compensation
expense 16,315 14,063
Income tax
benefits
from
employee
stock
plans 11 1,256
Deferred
income
taxes (11,071) (4,767)
Amortization
of debt
financing
fees 1,192 1,192
Changes in operating assets
and liabilities:
Accounts
receivable (21,710) (25,802)
Inventories (22,942) (7,745)
Prepaid
expenses 602 (5,782)
Other
current
assets (5,133) (89)
Investment
in sales-
type
leases 6,643 (5,296)
Other long-
term
assets (150) 1,153
Accounts
payable 23,717 5,573
Accrued
compensation 658 (687)
Accrued
liabilities 4,021 (1,901)
Deferred
revenue (7,354) 12,819
Other long-
term
liabilities 865 (2,299)
Net cash
provided
by
operating
activities 20,648 26,030
------ ------
Investing Activities
Purchases
of
intangible
assets,
intellectual
property
and
patents (160) (1,311)
Software
development
for
external
use (10,121) (10,569)
Purchases
of
property
and
equipment (9,374) (10,005)
Business
acquisition,
net of
cash
acquired (4,446) (271,458)
------ --------
Net cash
used in
investing
activities (24,101) (293,343)
------- --------
Financing Activities
Proceeds
from debt 37,000 247,051
Repayment
of debt
and
revolving
credit
facility (100,000) (25,000)
Payment for
contingent
consideration (2,400) (3,000)
Proceeds
from
issuances
under
stock-
based
compensation
plans 26,468 16,516
Employees'
taxes paid
related to
restricted
stock
units (3,133) (1,917)
Net cash
provided
by (used
in)
financing
activities (42,065) 233,650
Effect of
exchange
rate
changes on
cash and
cash
equivalents (1,504) (1,267)
------ ------
Net
decrease
in cash
and cash
equivalents (47,022) (34,930)
Cash and
cash
equivalents
at
beginning
of period 54,488 82,217
Cash and
cash
equivalents
at end of
period $7,466 $47,287
====== =======
Omnicell, Inc.
Reconciliation of GAAP to Non-GAAP
(Unaudited, in thousands, except per share data and percentage)
Three Months Ended Nine Months Ended
September June 30, September September September
30, 2017 2017 30, 2016 30, 2016
30, 2017
--------
Reconciliation of GAAP revenue to non-GAAP revenue:
GAAP revenue $186,782 $180,885 $176,737 $518,221 $520,648
Acquisition accounting
impact related to
deferred revenue 313 313 2,663 939 7,989
---------------
Non-GAAP revenue $187,095 $181,198 $179,400 $519,160 $528,637
======== ======== ======== ======== ========
Reconciliation of GAAP gross profit to non-GAAP gross profit:
GAAP gross profit $84,853 $77,975 $81,508 $227,020 $239,470
GAAP gross margin 45.4% 43.1% 46.1% 43.8% 46.0%
Share-based
compensation expense 882 864 628 2,728 1,821
Amortization of
acquired intangibles 2,985 2,848 5,199 8,670 15,624
Acquisition accounting
impact related to
deferred revenue 313 313 2,663 939 7,989
Inventory fair value
adjustments - - 920 - 2,761
Acquisitions related
expenses - - 44 - 72
Severance and other
expenses* 70 - - 1,767 199
===============
Non-GAAP gross profit $89,103 $82,000 $90,962 $241,124 $267,936
======= ======= ======= ======== ========
Non-GAAP gross margin 47.6% 45.3% 50.7% 46.4% 50.7%
Reconciliation of GAAP operating expenses to non-GAAP operating expenses:
GAAP operating expenses $75,139 $80,379 $76,580 $236,946 $232,808
GAAP operating expenses % to total revenue 40.2% 44.4% 43.3% 45.7% 44.7%
Share-based
compensation expense (4,377) (4,681) (4,049) (13,587) (12,242)
Amortization of
acquired intangibles (3,381) (3,626) (3,714) (10,660) (11,500)
Acquisitions related
expenses - - (342) (126) (3,420)
Severance and other
expenses* (229) (970) - (3,531) (1,504)
Non-GAAP operating expenses $67,152 $71,102 $68,475 $209,042 $204,142
======= ======= ======= ======== ========
Non-GAAP operating expenses % to total revenue 35.9% 39.2% 38.2% 40.3% 38.6%
* Other expenses include
depreciation adjustment related
to purchase price allocation
from acquisition of $253,
integration consulting of $30,
restructuring rent expense of
$14 and an adjustment to
relocation and severance
charges of ($68) for the three
months ended September 30,
2017. Other expenses include
relocation charge of $320,
restructuring rent expense of
$499, integration consulting of
$156 and depreciation
adjustment related to purchase
price allocation from
acquisition of $759 for the
nine months ended September 30,
2017.
Three Months Ended Nine Months Ended
September June 30, September September September
30, 2017 2017 30, 2016 30, 2017 30, 2016
-------- ---- -------- -------- --------
Reconciliation of GAAP income (loss) from operations to non-GAAP income (loss) from operations:
GAAP income (loss) from operations $9,714 $(2,404) $4,928 $(9,926) $6,662
GAAP operating income (loss) % to total revenue 5.2% (1.3)% 2.8% (1.9)% 1.3%
Share-based
compensation expense 5,259 5,545 4,677 16,315 14,063
Amortization of
acquired intangibles 6,366 6,474 8,913 19,330 27,124
Acquisition accounting
impact related to
deferred revenue 313 313 2,663 939 7,989
Inventory fair value
adjustments - - 920 - 2,761
Acquisitions related
expenses - - 386 126 3,492
Severance and other
expenses 299 970 - 5,298 1,703
Non-GAAP income from operations $21,951 $10,898 $22,487 $32,082 $63,794
======= ======= ======= ======= =======
Non-GAAP operating income % to total Non-GAAP
revenue 11.7% 6.0% 12.5% 6.2% 12.1%
Reconciliation of GAAP net income (loss) to non-GAAP net income:
GAAP net income (loss) $6,231 $837 $1,983 $(3,686) $446
Share-based
compensation expense 5,259 5,545 4,677 16,315 14,063
Amortization of
acquired intangibles 6,366 6,474 8,913 19,330 27,124
Acquisition accounting
impact related to
deferred revenue 313 313 2,663 939 7,989
Inventory fair value
adjustments - - 920 - 2,761
Acquisitions related
expenses 397 397 783 1,317 4,684
Severance and other
expenses 299 970 - 5,298 1,703
Tax effect of the
adjustments above(a) (2,579) (2,817) (5,047) (9,415) (16,820)
Non-GAAP net income $16,286 $11,719 $14,892 $30,098 $41,950
======= ======= ======= ======= =======
Reconciliation of GAAP net income (loss) per share - diluted to non-GAAP net income per share - diluted:
Shares - diluted GAAP 38,973 38,370 37,079 37,266 36,695
------ ------ ------ ------ ------
Shares - diluted Non-GAAP 38,973 38,370 37,079 38,418 36,695
------ ------ ------ ------ ------
GAAP net income (loss) per share - diluted $0.16 $0.02 $0.05 $(0.10) $0.01
Share-based
compensation expense 0.14 0.14 0.13 0.43 0.38
Amortization of
acquired intangibles 0.16 0.17 0.24 0.50 0.74
Acquisition accounting
impact related to
deferred revenue 0.01 0.01 0.07 0.02 0.22
Inventory fair value
adjustments - - 0.02 - 0.08
Acquisitions related
expenses 0.01 0.01 0.02 0.03 0.13
Severance and other
expenses 0.01 0.02 - 0.14 0.04
Tax effect of the
adjustments above(a) (0.07) (0.06) (0.13) (0.24) (0.46)
--------------
Non-GAAP net income per share - diluted $0.42 $0.31 $0.40 $0.78 $1.14
===== ===== ===== ===== =====
Reconciliation of GAAP net income (loss) to non-GAAP Adjusted EBITDA(b):
GAAP net income (loss) $6,231 $837 $1,983 $(3,686) $446
Share-based
compensation expense 5,259 5,545 4,677 16,315 14,063
Interest (income) and
expense, net 2,127 1,311 1,523 4,870 4,618
Depreciation and
amortization expense 12,600 13,494 14,702 38,542 43,899
Acquisition accounting
impact related to
deferred revenue 313 313 2,663 939 7,989
Inventory fair value
adjustments - - 920 - 2,761
Acquisitions related
expenses 397 397 783 1,317 4,684
Severance expense 46 728 - 4,539 1,703
Income tax expense 751 (3,045) 224 (11,232) (557)
Non-GAAP Adjusted EBITDA $27,724 $19,580 $27,475 $51,604 $79,606
======= ======= ======= ======= =======
(a) Tax effects calculated for all
adjustments except share-based
compensation expense, using an
estimated annual effective tax
rate of 35% for fiscal year 2017
and 38% for fiscal year 2016.
(b) Defined as earnings before
interest income and expense,
taxes, depreciation and
amortization, as well as excluding
certain non-GAAP adjustments.
Omnicell, Inc.
Segmented Information
(Unaudited, in thousands, except for percentages)
Three Months Ended September 30, 2017 Three Months Ended September 30, 2016
Automation Medication Total Automation Medication Total
and Adherence and
Analytics Adherence
Analytics
---
Revenues $154,651 $32,131 $186,782 $152,437 $24,300 $176,737
Cost of revenues 79,740 22,189 101,929 77,828 17,401 95,229
Gross profit 74,911 9,942 84,853 74,609 6,899 81,508
------ ----- ------ ------ ----- ------
Gross margin % 48.4% 30.9% 45.4% 48.9% 28.4% 46.1%
Operating
expenses 46,849 9,901 56,750 49,123 6,137 55,260
Income from
segment
operations $28,062 $41 $28,103 $25,486 $762 $26,248
======= === ======= ======= ==== =======
Operating margin
% 18.1% 0.1% 15.0% 16.7% 3.1% 14.9%
Corporate costs 18,389 21,320
------ ------
Loss from operations $9,714 $4,928
====== ======
Omnicell, Inc.
Segmented Information
(Unaudited, in thousands, except for percentages)
Nine Months Ended September 30, 2017 Nine Months Ended September 30, 2016
Automation Medication Total Automation Medication Total
and Adherence and
Analytics Adherence
Analytics
---
Revenues $427,250 $90,971 $518,221 $450,043 $70,605 $520,648
Cost of revenues 229,218 61,983 291,201 233,401 47,777 281,178
Gross profit 198,032 28,988 227,020 216,642 22,828 239,470
------- ------ ------- ------- ------ -------
Gross margin % 46.4% 31.9% 43.8% 48.1% 32.3% 46.0%
Operating
expenses 146,651 31,196 177,847 151,108 17,518 168,626
Income (loss)
from segment
operations $51,381 $(2,208) $49,173 $65,534 $5,310 $70,844
======= ======= ======= ======= ====== =======
Operating margin
% 12.0% (2.4)% 9.5% 14.6% 7.5% 13.6%
Corporate costs 59,099 64,182
------ ------
Income (loss) from operations $(9,926) $6,662
======= ======
Omnicell, Inc.
Segment Information - Non-GAAP Gross Profit and Non-GAAP Operating Margin
(Unaudited, in thousands, except for percentages)
Three Months Ended September 30, 2017
Automation and Medication Total
Analytics Adherence
Amount % of % of Amount % of % of Amount % of % of
GAAP Non- GAAP Non- GAAP Non-
Revenue GAAP Revenue GAAP Revenue GAAP
Revenue Revenue Revenue
-------
Revenues $154,651 $32,131 $186,782
Acquisition accounting impact
related to deferred revenue - -% -% 313 1.0% 1.0% 313 0.2% 0.2%
Non-GAAP Revenues $154,651 $32,444 $187,095
======== ======= ========
GAAP Gross profit $74,911 48.4% $9,942 30.9% $84,853 45.4%
Share-based compensation
expense 739 0.5% 0.5% 143 0.4% 0.4% 882 0.5% 0.5%
Amortization expense of
acquired intangible assets 2,393 1.5% 1.5% 592 1.8% 1.8% 2,985 1.6% 1.6%
Acquisition accounting impact
related to deferred revenue - -% -% 313 1.0% 1.0% 313 0.2% 0.2%
Severance and other expenses 119 0.1% 0.1% (49) (0.2)% (0.2)% 70 -% -%
--- --- ---
Non-GAAP Gross profit $78,162 50.5% $10,941 33.7% $89,103 47.6%
======= ======= =======
GAAP Operating income $28,062 18.1% $41 0.1% $28,103 15.0%
Share-based compensation
expense 2,365 1.5% 1.5% 368 1.1% 1.1% 2,733 1.5% 1.5%
Amortization expense of
acquired intangible assets 4,485 2.9% 2.9% 1,881 5.9% 5.8% 6,366 3.4% 3.4%
Acquisition accounting impact
related to deferred revenue - -% -% 313 1.0% 1.0% 313 0.2% 0.2%
Severance and other expenses 96 0.1% 0.1% (61) (0.2)% (0.2)% 35 -% -%
--- --- ---
Non-GAAP Operating income $35,008 22.6% $2,542 7.8% $37,550 20.1%
======= ====== =======
GAAP Corporate costs $18,389 9.8%
Share-based compensation expense (2,526) (1.4)% (1.4)%
Acquisition-related expenses - -% -%
Severance and other expenses (264) (0.1)% (0.1)%
----
Non-GAAP Corporate costs $15,599 8.3%
Non-GAAP Income from operations $21,951 11.7%
=======
Omnicell, Inc.
Segment Information - Non-GAAP Gross Profit and Non-GAAP Operating Margin
(Unaudited, in thousands, except for percentages)
Three Months Ended September 30, 2016
Automation and Medication Total
Analytics Adherence
Amount % of % of Amount % of % of Amount % of % of
GAAP Non- GAAP Non- GAAP Non-
Revenue GAAP Revenue GAAP Revenue GAAP
Revenue Revenue Revenue
-------
Revenues $152,437 $24,300 $176,737
Acquisition accounting impact
related to deferred revenue 2,663 1.7% 1.7% - - % - % 2,663 1.5% 1.5%
Non-GAAP Revenues $155,100 $24,300 $179,400
======== ======= ========
GAAP Gross profit $74,609 48.9% $6,899 28.4% $81,508 46.1%
Stock-based compensation
expense 511 0.3% 0.3% 117 0.5% 0.5% 628 0.4% 0.4%
Amortization expense of
acquired intangible assets 4,867 3.2% 3.1% 332 1.4% 1.4% 5,199 2.9% 2.9%
Acquisition accounting impact
related to deferred revenue 2,663 1.7% 1.7% - - % - % 2,663 1.5% 1.5%
Inventory fair value
adjustments 920 0.6% 0.6% - - % - % 920 0.5% 0.5%
Acquisitions related expenses 44 - % - % - - % - % 44 - % - %
Non-GAAP Gross profit $83,614 53.9% $7,348 30.2% $90,962 50.7%
======= ====== =======
GAAP Operating income $25,486 16.7% $762 3.1% $26,248 14.9%
Stock-based compensation
expense 1,952 1.3% 1.3% 264 1.1% 1.1% 2,216 1.3% 1.2%
Amortization expense of
acquired intangible assets 7,623 5.0% 4.9% 1,290 5.3% 5.3% 8,913 5.0% 5.0%
Acquisition accounting impact
related to deferred revenue 2,663 1.7% 1.7% - - % - % 2,663 1.5% 1.5%
Inventory fair value
adjustments 920 0.6% 0.6% - - % - % 920 0.5% 0.5%
Acquisitions related expenses 133 0.1% 0.1% - - % - % 133 0.1% 0.1%
Non-GAAP Operating income $38,777 25.0% $2,316 9.5% $41,093 22.9%
======= ====== =======
GAAP Corporate costs $21,320 12.1%
Stock-based compensation expense (2,461) (1.4)% (1.4)%
Acquisition related expenses (253) (0.1)% (0.1)%
----
Non-GAAP Corporate costs $18,606 10.4%
Non-GAAP Income from operations $22,487 12.5%
=======
OMCL-E
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SOURCE Omnicell, Inc.
