Omnicell Reports Results for Fiscal Year and Fourth Quarter 2017
MOUNTAIN VIEW, Calif., Feb. 1, 2018 /PRNewswire/ -- Omnicell, Inc. (NASDAQ: OMCL), a leading provider of medication and supply management solutions to healthcare systems, today announced results for its fiscal year and fourth quarter ended December 31, 2017.
GAAP results: Revenue for the fourth quarter of 2017 was $197.9 million, up $11.2 million or 6.0% from the third quarter of 2017, and up $26.0 million or 15.1% from the fourth quarter of 2016. Revenue for the year ended December 31, 2017 was $716.2 million, up $23.5 million or 3.4% from the year ended December 31, 2016.
Fourth quarter 2017 net income as reported in accordance with U.S. generally accepted accounting principles (GAAP) was $24.3 million, or $0.62 per diluted share, which includes the favorable impact of the Tax Cuts and Jobs Act of 2017. This compares to GAAP net income of $6.2 million, or $0.16 per diluted share, for the third quarter of 2017, and GAAP net income of $0.2 million, or $0.00 per diluted share, for the fourth quarter of 2016.
GAAP net income for the year ended December 31, 2017 was $20.6 million, or $0.53 per diluted share. GAAP net income was $0.6 million, or $0.02 per diluted share, for the year ended December 31, 2016.
Non-GAAP results: Non-GAAP revenue for the fourth quarter of 2017 was $198.3 million, up $11.2 million, or 6.0% from the third quarter of 2017, and up $23.6 million or 13.5% from the fourth quarter of 2016. Non-GAAP revenue for the year ended December 31, 2017 was $717.4 million, up $14.1 million, or 2.0% from the year ended December 31, 2016.
Non-GAAP net income for the fourth quarter of 2017 was $21.2 million, or $0.54 per diluted share. This compares to non-GAAP net income of $16.3 million, or $0.42 per diluted share, for the third quarter of 2017 and $13.8 million, or $0.37 per diluted share, for the fourth quarter of 2016.
Non-GAAP net income for the year ended December 31, 2017 was $51.3 million, or $1.33 per diluted share. This compares to non-GAAP net income of $55.7 million, or $1.51 per diluted share for the year ended December 31, 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, tax reform benefits, and amortization of debt issuance cost.
Total product bookings for the year ended December 31, 2017 were $568 million compared to total bookings for the year ended December 31, 2016 of $541 million. Total product backlog for the year ended December 31, 2017 was $345 million compared to $301 million for the year ended December 31, 2016, or an increase of 14.3% year over year.
"2017 was a successful year for Omnicell with record bookings and revenues," said Randall Lipps, chairman, CEO, president, and founder of Omnicell. "We are proud of the company's financial performance and our strategic execution. We're seeing rapid adoption of our latest solutions and services from our Omnicell platform, some of which leverage workflow automation on a cloud data platform, artificial intelligence for predictive analytics and performance-driven partnerships to help our customers achieve the highest level of success. The company is well positioned to take advantage of these great opportunities ahead in 2018."
2017 Business Highlights:
-- The Company started the production of the XT series in January 2017 and
successfully ramped up the production and installation throughout the
year;
-- In April, the Company announced the launch of AcuDose-Rx® software on
XT hardware, which allows legacy Aesynt customers to take full advantage
of the XT series;
-- During the second quarter, the Company launched the XT series Automated
Supply Dispensing Cabinet and the Controlled Substance Dispenser module,
which provides innovative, efficient and secure workflow for dispensing
and administration of controlled substances;
-- In December, the Company announced the XR2 Automated Central Pharmacy
System, a robotic solution that is a significant step towards fully
automating central pharmacy operations in a variety of settings;
-- In December, the Company announced the IVX Workflow which operates on
the IVX Cloud, creating a significant technological advancement for
sterile compounding workflow processes and enabling pharmacies to safely
and efficiently compound and prepare IV doses;
-- During the year the Company has experienced good momentum on new
products and has received multiple contractual purchase commitments for
both the XR2 Automated Central Pharmacy System and the IVX Workflow
before their respective general availability dates in 2018;
-- During the year the Company expanded its Medication Adherence ecosystem
with the addition of advanced automated packaging solutions;
-- During the year, the Company expanded the Performance Center's core
capabilities of operational improvements into patient outcomes and
regulatory compliance through internal development and the acquisition
of InPharmics;
-- For the twelve months ended December 31, 2017, the Company's new and
competitive conversion rate was 29%; and
-- For the year ended December 31, 2017, the Company's product backlog was
$345 million, an increase of 14.3% from one year ago.
2018 Guidance:
For 2018, we will adopt ASU 2014-09 Revenue from Contracts with Customers, which impacts the timing of revenue recognition and requires the presentation of certain costs previously reported as selling expenses as a reduction of revenue, both of which are not anticipated to be material. The reclassification of selling costs will result in a reduction of net sales, but has no impact on operating income or net earnings.
For the first quarter of 2018, the Company expects non-GAAP revenue to be between $174 million and $179 million, which includes the impact of reclassification of selling costs as a reduction of revenue. The Company expects first quarter of 2018 non-GAAP earnings to be between $0.22 and $0.28 per share.
For the year 2018, the Company expects product bookings to be between $625 million and $660 million.
The Company expects non-GAAP revenue to be between $780 million and $800 million, which includes the impact of reclassification of selling costs as a reduction of revenue, and non-GAAP earnings to be between $1.85 and $2.05 per share.
The table below summarizes Omnicell's 2018 guidance outlined above:
Q1'18 Total Year 2018
Product Bookings Not provided $625 million - $660 million
Non-GAAP Revenue $174 million - $179 million $780 million - $800 million
Non-GAAP EPS $0.22 - $0.28 $1.85 - $2.05
------------ ------------- -------------
Omnicell Conference Call Information
Omnicell will hold a conference call today, Thursday, February 1, 2018 at 1:30 p.m. PT to discuss fourth 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 3791479. 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 March 15, 2018. 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 3791479.
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 pipeline, new sales opportunities, and projected bookings, revenue and profit growth. Risks that contribute to the uncertain nature of the forward-looking statements include (i) our ability to take advantage of the growth opportunities in medication management across the spectrum of healthcare settings from the hospital, long-term care, to home care, (ii) our ability to develop and commercialize new products, including the XR2 Automated Central Pharmacy System and the IVX semi-automated workflow solution, (iii) unfavorable general economic and market conditions, (iv) risks to growth and acceptance of our products and services, including competitive conversions, (v) growth of the clinical automation and workflow automation market generally, (vi) potential of increasing competition, (vii) potential regulatory changes, (viii) our ability to improve sales productivity to grow product bookings and (ix) our ability 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 GAAP. 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 the 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 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 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 peer companies.
h) Tax reform impact. We excluded from our non-GAAP results the net one-time benefits related to the Tax Cuts and Jobs Act of 2017 based on the estimated impact of the revaluation of deferred tax assets and liabilities. These net benefits 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 net benefits provides more meaningful comparisons of the financial results to our historical operations and forward looking guidance and the financial results of 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 or other items.
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 2018, 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 Years Ended
December 31, September 30, December 31, December 31, December 31,
2017 2017 2016 2017 2016
---- ---- ---- ---- ----
Revenues:
Product $144,120 $135,103 $125,753 $506,209 $517,944
Services and other
revenues 53,824 51,679 46,221 209,956 174,679
------ ------ ------ ------- -------
Total revenues 197,944 186,782 171,974 716,165 692,623
------- ------- ------- ------- -------
Cost of revenues:
Cost of product revenues 79,791 79,725 78,024 304,842 302,437
Cost of services and
other revenues 23,085 22,204 19,621 89,235 76,386
------ ------ ------ ------ ------
Total cost of revenues 102,876 101,929 97,645 394,077 378,823
------- ------- ------ ------- -------
Gross profit 95,068 84,853 74,329 322,088 313,800
Operating expenses:
Research and development 15,894 16,414 14,902 66,022 57,799
Selling, general and
administrative 63,494 58,725 59,608 250,312 249,520
Total operating expenses 79,388 75,139 74,510 316,334 307,319
------ ------ ------ ------- -------
Income (loss) from
operations 15,680 9,714 (181) 5,754 6,481
Interest and other income
(expense), net (1,641) (2,732) (1,656) (6,633) (8,429)
------ ------ ------ ------ ------
Income (loss) before
provision for income
taxes 14,039 6,982 (1,837) (879) (1,948)
Provision (benefit) for
income taxes (10,252) 751 (1,994) (21,484) (2,551)
------- --- ------
Net income $24,291 $6,231 $157 $20,605 $603
======= ====== ==== ======= ====
Net income per share:
Basic $0.64 $0.17 $ - $0.55 $0.02
Diluted $0.62 $0.16 $ - $0.53 $0.02
Weighted average shares outstanding:
Basic 38,127 37,698 36,553 37,483 36,156
Diluted 39,482 38,973 37,256 38,712 36,864
Omnicell, Inc.
Condensed Consolidated Balance Sheets
(Unaudited, in thousands)
December 31,
2017 2016
---- ----
ASSETS
Current assets:
Cash and cash
equivalents $32,424 $54,488
Accounts receivable,
net 189,227 150,303
Inventories 96,137 69,297
Prepaid expenses 36,060 28,646
Other current assets 13,273 12,674
------ ------
Total current assets 367,121 315,408
Property and equipment,
net 42,595 42,011
Long-term investment
in sales-type leases,
net 15,435 20,585
Goodwill 337,751 327,724
Intangible assets, net 168,107 190,283
Long-term deferred tax
assets 9,454 4,041
Other long-term assets 39,841 35,051
Total assets $980,304 $935,103
======== ========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $48,290 $27,069
Accrued compensation 27,241 26,722
Accrued liabilities 35,693 31,195
Long-term debt,
current portion, net 15,208 8,410
Deferred revenue, net 86,104 87,516
------ ------
Total current
liabilities 212,536 180,912
Long-term, deferred
revenue 17,244 17,051
Long-term deferred tax
liabilities 28,579 51,592
Other long-term
liabilities 9,829 8,210
Long-term debt, net 194,917 245,731
------- -------
Total liabilities 463,105 503,496
Stockholders' equity:
Total stockholders'
equity 517,199 431,607
Total liabilities and
stockholders' equity $980,304 $935,103
======== ========
Omnicell, Inc.
Condensed Consolidated Statements of Cash Flows
(Unaudited, in thousands)
Year Ended December 31,
2017 2016
---- ----
Operating Activities
Net income $20,605 $603
Adjustments to reconcile
net income to net cash
provided by operating
activities:
Depreciation
and
amortization 51,511 58,362
Loss on
disposal
of fixed
assets 512 35
Gain
related
to
contingent
liability - (600)
Share-
based
compensation
expense 21,857 19,500
Income tax
benefits
from
employee
stock
plans 11 1,703
Deferred
income
taxes (26,844) (10,882)
Amortization
of debt
financing
fees 1,590 1,590
Changes in operating
assets and liabilities:
Accounts
receivable (39,068) 8,047
Inventories (26,840) (3,362)
Prepaid
expenses (7,414) (4,321)
Other
current
assets (2,074) (1,093)
Investment
in sales-
type
leases 6,625 (9,639)
Other
long-
term
assets (98) 2,043
Accounts
payable 19,709 (4,963)
Accrued
compensation 519 (2,052)
Accrued
liabilities 4,383 (3,287)
Deferred
revenue (1,219) 4,480
Other
long-
term
liabilities 1,069 (6,264)
----- ------
Net cash
provided
by
operating
activities 24,834 49,900
------ ------
Investing Activities
Purchase
of
intangible
assets,
intellectual
property
and
patents (160) (1,372)
Software
development
for
external
use (15,040) (14,348)
Purchases
of
property
and
equipment (15,341) (13,445)
Business
acquisitions,
net of
cash
acquired (4,446) (312,158)
------ --------
Net cash
used in
investing
activities (34,987) (341,323)
------- --------
Financing Activities
Proceeds
from
debt, net 56,894 287,051
Repayment
of debt
and
revolving
credit
facility (102,500) (34,500)
Payment
for
contingent
consideration (2,400) (3,000)
At the
market
offering,
net of
offering
costs 13,900 -
Proceeds
from
issuances
under
stock-
based
compensation
plans 30,121 17,691
Employees'
taxes paid
related to
restricted
stock
units (5,892) (3,490)
Net cash
provided
by (used
in)
financing
activities (9,877) 263,752
------ -------
Effect of
exchange
rate
changes
on cash
and cash
equivalents (2,034) (58)
------ ---
Net
decrease
in cash
and cash
equivalents (22,064) (27,729)
Cash and
cash
equivalents
at
beginning
of period 54,488 82,217
------ ------
Cash and
cash
equivalents
at end of
period $32,424 $54,488
======= =======
Omnicell, Inc.
Reconciliation of GAAP to Non-GAAP
(Unaudited, in thousands, except per share data and percentages)
Three Months Ended Twelve Months Ended
December 31, September 30, December 31, December 31, December 31,
2017 2017 2016 2017 2016
---- ---- ---- ---- ----
Reconciliation of GAAP revenue to non-GAAP revenue:
GAAP revenue $197,944 $186,782 $171,974 $716,165 $692,623
Acquisition
accounting impact
related to deferred
revenue 313 313 2,663 1,252 10,652
---------------
Non-GAAP revenue $198,257 $187,095 $174,637 $717,417 $703,275
======== ======== ======== ======== ========
Reconciliation of GAAP gross profit to non-GAAP gross profit:
GAAP gross profit $95,068 $84,853 $74,329 $322,088 $313,800
GAAP gross margin 48.0% 45.4% 43.2% 45.0% 45.3%
Share-based
compensation
expense 834 882 776 3,562 2,596
Amortization of
acquired
intangibles 2,818 2,985 5,266 11,488 20,890
Acquisition
accounting impact
related to deferred
revenue 313 313 2,663 1,252 10,652
Inventory fair value
adjustments - - 921 - 3,682
Acquisition related
expenses - - 5 - 277
Severance and other
expenses* 234 70 - 2,001 -
---------------
Non-GAAP gross profit $99,267 $89,103 $83,960 $340,391 $351,897
======= ======= ======= ======== ========
Non-GAAP gross margin 50.1% 47.6% 48.1% 47.4% 50.0%
Reconciliation of GAAP operating expenses to non-GAAP operating expenses:
GAAP operating expenses $79,388 $75,139 $74,510 $316,334 $307,319
GAAP operating expenses % to total revenue 40.1% 40.2% 43.3% 44.2% 44.4%
Share-based
compensation
expense (4,708) (4,377) (4,663) (18,295) (16,904)
Amortization of
acquired
intangibles (3,348) (3,381) (3,752) (14,008) (15,251)
Acquisition related
expenses - - (829) (126) (5,753)
Severance and other
expenses* (233) (229) - (3,764) -
Non-GAAP operating expenses $71,099 $67,152 $65,266 $280,141 $269,411
======= ======= ======= ======== ========
Non-GAAP operating expenses % to total
revenue 35.9% 35.9% 37.4% 39.0% 38.3%
* Other expenses include
relocation charge of $578,
restructuring rent expense of
$510, integration consulting
expense of $201 and
depreciation adjustment related
to purchase price allocation
from acquisition of $1,013 for
the year ended December 31,
2017.
Three Months Ended Twelve Months Ended
December 31, September 30, December 31, December 31, December 31,
2017 2017 2016 2017 2016
---- ---- ---- ---- ----
Reconciliation of GAAP income (loss) from operations to non-GAAP income from operations:
GAAP income (loss) from operations $15,680 $9,714 $(181) $5,754 $6,481
GAAP operating income % to total revenue 7.9% 5.2% (0.1)% 0.8% 0.9%
Share-based
compensation
expense 5,542 5,259 5,438 21,857 19,500
Amortization of
acquired
intangibles 6,166 6,366 9,017 25,496 36,141
Acquisition
accounting impact
related to deferred
revenue 313 313 2,663 1,252 10,652
Inventory fair value
adjustments - - 921 - 3,682
Acquisition related
expenses - - 834 126 6,029
Severance and other
expenses 467 299 - 5,765 -
--------------
Non-GAAP income from operations $28,168 $21,951 $18,692 $60,250 $82,485
======= ======= ======= ======= =======
Non-GAAP operating income % to total Non-
GAAP revenue 14.2% 11.7% 10.7% 8.4% 11.7%
Reconciliation of GAAP net income to non-GAAP net income:
GAAP net income $24,291 $6,231 $157 $20,605 $603
Tax reform benefit
impact (13,391) - - (13,391) -
Share-based
compensation
expense 5,542 5,259 5,438 21,857 19,500
Amortization of
acquired
intangibles 6,166 6,366 9,017 25,496 36,141
Acquisition
accounting impact
related to deferred
revenue 313 313 2,663 1,252 10,652
Inventory fair value
adjustments - - 921 - 3,682
Acquisition related
expenses 397 397 632 1,715 7,019
Severance and other
expenses 467 299 - 5,765 -
Tax effect of the
adjustments
above(a) (2,570) (2,579) (5,031) (11,980) (21,850)
Non-GAAP net income $21,215 $16,286 $13,797 $51,319 $55,747
======= ======= ======= ======= =======
Reconciliation of GAAP net income per share - diluted to non-GAAP net income per share - diluted:
Shares - diluted GAAP 39,482 38,973 37,256 38,712 36,864
Shares - diluted Non-GAAP 39,482 38,973 37,256 38,712 36,864
------ ------ ------ ------ ------
GAAP net income per share - diluted $0.62 $0.16 $ - $0.53 $0.02
Tax reform benefit
impact (0.34) - - (0.35) -
Share-based
compensation
expense 0.14 0.14 0.15 0.56 0.53
Amortization of
acquired
intangibles 0.16 0.16 0.24 0.67 0.98
Acquisition
accounting impact
related to deferred
revenue 0.01 0.01 0.07 0.03 0.29
Inventory fair value
adjustments - - 0.02 - 0.10
Acquisition related
expenses 0.01 0.01 0.02 0.04 0.19
Severance and other
expenses 0.01 0.01 - 0.16 -
Tax effect of the
adjustments
above(a) (0.07) (0.07) (0.13) (0.31) (0.60)
--------------
Non-GAAP net income per share - diluted $0.54 $0.42 $0.37 $1.33 $1.51
===== ===== ===== ===== =====
Reconciliation of GAAP net income to non-GAAP Adjusted EBITDA:
GAAP net income $24,291 $6,231 $157 $20,605 $603
Share-based
compensation
expense 5,542 5,259 5,438 21,857 19,500
Interest (income)
and expense, net 1,202 2,127 998 6,072 5,616
Depreciation and
amortization
expense 12,969 12,600 14,457 51,511 58,362
Acquisition
accounting impact
related to deferred
revenue 313 313 2,663 1,252 10,652
Inventory fair value
adjustments - - 921 - 3,682
Acquisition related
expenses 397 397 632 1,715 7,019
Severance and other
expenses 213 46 - 4,752 -
Income tax expense
(benefit) (10,252) 751 (1,994) (21,484) (2,551)
--------------
Non-GAAP Adjusted EBITDA (b) $34,675 $27,724 $23,272 $86,280 $102,883
======= ======= ======= ======= ========
(a) Tax effects calculated for all
adjustments except share-based
compensation expense and tax
reform benefit, using the tax rate
of 35%.
(b) Defined as earnings before interest
income and expense, taxes,
depreciation and amortization,
share-based compensation expense,
as well as excluding certain non-
GAAP adjustments.
Omnicell, Inc.
Segmented Information
(Unaudited, in thousands, except for percentages)
Three Months Ended December 31, 2017 Three Months Ended December 31, 2016
Automation Medication Total Automation Medication Total
and Adherence and Adherence
Analytics Analytics
--------- ---------
Revenues $163,142 $34,802 $197,944 $143,583 $28,391 $171,974
Cost of revenues 79,225 23,651 102,876 77,566 20,079 97,645
------ ------ ------- ------ ------ ------
Gross profit 83,917 11,151 95,068 66,017 8,312 74,329
------ ------ ------ ------ ----- ------
Gross margin % 51.4% 32.0% 48.0% 46.0% 29.3% 43.2%
Operating
expenses 47,049 10,539 57,588 47,402 7,325 54,727
------ ------ ------ ------ ----- ------
Income from
segment
operations $36,868 $612 $37,480 $18,615 $987 $19,602
------- ---- ------- ------- ---- -------
Operating margin
% 22.6% 1.8% 18.9% 13.0% 3.5% 11.4%
Corporate costs 21,800 19,783
------ ------
Income (loss) from operations $15,680 $(181)
======= =====
Omnicell, Inc.
Segmented Information
(Unaudited, in thousands, except for percentages)
Year Ended December 31, 2017 Year Ended December 31, 2016
Automation Medication Total Automation Medication Total
and Adherence and Adherence
Analytics Analytics
--------- ---------
Revenues $590,392 $125,773 $716,165 $593,626 $98,997 $692,623
Cost of revenues 308,443 85,634 394,077 310,967 67,856 378,823
Gross profit 281,949 40,139 322,088 282,659 31,141 313,800
------- ------ ------- ------- ------ -------
Gross margin % 47.8% 31.9% 45.0% 47.6% 31.5% 45.3%
Operating
expenses 193,700 41,735 235,435 198,511 24,843 223,354
------- ------ ------- ------- ------ -------
Income from
segment
operations $88,249 $(1,596) $86,653 $84,148 $6,298 $90,446
======= ======= ======= ======= ====== =======
Operating margin
% 14.9% (1.3)% 12.1% 14.2% 6.4% 13.1%
Corporate costs 80,899 83,965
------ ------
Income from operations $5,754 $6,481
====== ======
Omnicell, Inc.
Segment Information - Non-GAAP Gross Profit and Non-GAAP Operating Margin
(Unaudited, in thousands, except for percentages)
Three Months Ended December 31, 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 $163,142 $34,802 $197,944
Acquisition
accounting impact
related to deferred
revenue - -% -% 313 0.9% 0.9% 313 0.2% 0.2%
Non-GAAP Revenues $163,142 $35,115 $198,257
======== ======= ========
GAAP Gross profit $83,917 51.4% $11,151 32.0% $95,068 48.0%
Stock-based
compensation expense 704 0.4% 0.4% 130 0.4% 0.4% 834 0.4% 0.4%
Amortization expense
of acquired
intangible assets 2,251 1.4% 1.4% 567 1.6% 1.6% 2,818 1.4% 1.4%
Acquisition
accounting impact
related to deferred
revenue - -% -% 313 0.9% 0.9% 313 0.2% 0.2%
Severance and other
expenses 234 0.1% 0.1% - -% -% 234 0.1% 0.1%
Non-GAAP Gross profit $87,106 53.4% $12,161 34.6% $99,267 50.1%
======= ======= =======
GAAP Operating income $36,868 22.6% $612 1.8% $37,480 18.9%
Stock-based
compensation expense 2,184 1.3% 1.3% 376 1.08% 1.1% 2,560 1.3% 1.3%
Amortization expense
of acquired
intangible assets 4,364 2.7% 2.7% 1,802 5.2% 5.1% 6,166 3.1% 3.1%
Acquisition
accounting impact
related to deferred
revenue - -% -% 313 0.9% 0.9% 313 0.2% 0.2%
Severance and other
expenses 204 0.1% 0.1% - -% -% 204 0.1% 0.1%
Non-GAAP Operating
income $43,620 26.7% $3,103 8.8% $46,723 23.6%
======= ====== =======
GAAP Corporate costs $21,800 11.0%
Less: Stock-based compensation expense (2,982) (1.5)% (1.5)%
Less: Acquisition-related expenses (263) (0.1)% (0.1)%
----
Non-GAAP Corporate costs $18,555 9.4%
Non-GAAP Income from operations $28,168 14.2%
=======
Omnicell, Inc.
Segment Information - Non-GAAP Gross Profit and Non-GAAP Operating Margin
(Unaudited, in thousands, except for percentages)
Three Months Ended December 31, 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 $143,583 $28,391 $171,974
Acquisition
accounting impact
related to deferred
revenue 2,663 1.9% 1.8% - -% -% 2,663 1.5% 1.5%
Non-GAAP Revenues $146,246 $28,391 $174,637
======== ======= ========
GAAP Gross profit $66,017 46.0% $8,312 29.3% $74,329 43.2%
Stock-based
compensation expense 668 0.5% 0.5% 108 0.4% 0.4% 776 0.5% 0.4%
Amortization expense
of acquired
intangible assets 4,820 3.4% 3.3% 446 1.6% 1.6% 5,266 3.1% 3.0%
Acquisition
accounting impact
related to deferred
revenue 2,663 1.9% 1.8% - -% -% 2,663 1.5% 1.5%
Inventory fair value
adjustments 921 0.6% 0.6% - -% -% 921 0.5% 0.5%
Acquisitions related
expenses 5 -% -% - -% -% 5 -% -%
--- --- ---
Non-GAAP Gross profit $75,094 51.3% $8,866 31.2% $83,960 48.1%
======= ====== =======
GAAP Operating income $18,615 13.0% $988 3.5% $19,603 11.4%
Stock-based
compensation expense 2,672 1.9% 1.8% 270 1.0% 1.0% 2,942 1.7% 1.7%
Amortization expense
of acquired
intangible assets 7,494 5.2% 5.1% 1,523 5.4% 5.4% 9,017 5.2% 5.2%
Acquisition
accounting impact
related to deferred
revenue 2,663 1.9% 1.8% - -% -% 2,663 1.5% 1.5%
Inventory fair value
adjustments 921 0.6% 0.6% - -% -% 921 0.5% 0.5%
Acquisitions related
expenses 23 -% -% - -% -% 23 -% -%
--- --- ---
Non-GAAP Operating
income $32,388 22.1% $2,781 9.8% $35,169 20.1%
======= ====== =======
GAAP Corporate costs $19,784 11.5%
Less: Stock-based compensation expense 2,496 1.5% 1.4%
Less: Acquisition-related expenses 811 0.5% 0.5%
---
Non-GAAP Corporate costs $16,477 9.4%
Non-GAAP Income from operations $18,692 10.7%
=======
OMCL-E
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SOURCE Omnicell, Inc.
