Omnicell Announces Second Quarter 2018 Results
MOUNTAIN VIEW, Calif., July 26, 2018 /PRNewswire/ -- Omnicell, Inc. (NASDAQ: OMCL), a leading provider of medication and supply management solutions to healthcare systems, today announced results for its second quarter ended June 30, 2018.
GAAP Results
GAAP revenues for the second quarter of 2018 were $188.7 million, up $7.6 million, or 4.2% from the second quarter of 2017. GAAP revenues for the six months ended June 30, 2018 were $371.3 million, up $41.7 million, or 12.7% from the six months ended June 30, 2017.
Second quarter 2018 GAAP net income as reported was $6.6 million, or $0.16 per diluted share. This compares to GAAP net income of $1.9 million, or $0.05 per diluted share, for the second quarter of 2017.
GAAP net income for the six months ended June 30, 2018 was $9.3 million, or $0.23 per diluted share. This compares to GAAP net loss of $8.5 million, or a net loss of $0.23 per diluted share, for the six months ended June 30, 2017.
Non-GAAP Results
Non-GAAP revenues for the second quarter of 2018 were $188.7 million, up $7.3 million, or 4.0% from the second quarter of 2017. Non-GAAP revenues for the six months ended June 30, 2018 were $371.3 million, up $41.1 million, or 12.4% from the six months ended June 30, 2017.
Non-GAAP net income for the second quarter of 2018 was $18.4 million, or $0.46 per diluted share. This compares to non-GAAP net income of $12.8 million, or $0.33 per diluted share, for the second quarter of 2017.
Non-GAAP net income for the six months ended June 30, 2018 was $29.8 million, or $0.75 per diluted share. This compares to non-GAAP net income of $15.3 million, or $0.40 per diluted share, for the six months ended June 30, 2017.
Non-GAAP net income for each period excludes, when applicable, the effect of share-based compensation expense, amortization expense of acquired intangible assets, acquisition-related expenses, fair value adjustments related to business acquisitions, restructuring and severance-related expenses, tax reform and restructuring benefits, contingent gains, and amortization of debt issuance cost.
Effective January 1, 2018, the Company adopted the new revenue recognition accounting standard, ASC 606, "Revenue from Contracts with Customers," utilizing the full retrospective transition method. All 2017 financial results have been adjusted to reflect the change.
"Medication management is playing an increasingly strategic role in patient outcomes and the financial success of healthcare institutions," said Randall Lipps, chairman, president, chief executive officer, and founder of Omnicell. "With a continued focus on digital transformation and strategic partnerships, we are driving efficiency and supporting patient safety through Omnicell's industry-leading platform."
2018 Guidance
For the third quarter of 2018, the Company expects non-GAAP revenues to be between $200 million and $206 million. The Company expects third quarter 2018 non-GAAP earnings to be between $0.52 and $0.57 per share.
For the year 2018, the Company expects product bookings to be between $630 million and $665 million. The Company expects non-GAAP revenues to be between $780 million and $800 million, and non-GAAP earnings to be between $1.90 and $2.05 per share.
The table below summarizes 2018 guidance outlined above.
Q3'18 Total Year 2018
Product Bookings Not provided $630 million - $665 million
Non-GAAP Revenues $200 million - $206 million $780 million - $800 million
Non-GAAP EPS $0.52 - $0.57 $1.90 - $2.05
------------ ------------- -------------
Omnicell Conference Call Information
Omnicell will hold a conference call today, Thursday, July 26, 2018 at 1:30 p.m. PT to discuss second 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 7290938. 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 September 6, 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 7290938.
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. Omnicell is revolutionizing the patient medication experience from hospital to home by empowering providers to keep each patient at the center of care. The Company's autonomous approach to medication management leverages a differentiated platform for hardware and workflow software solutions, real-time predictive intelligence, and performance-driven partnerships to help drive operational, financial, and clinical success for customers.
Supporting the highest level of patient safety is essential to excellent patient care. 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 delivering solutions for medication availability, affordability, safety, and adherence. Over 4,500 facilities 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 engagement and adherence to prescriptions, helping to reduce costly hospital readmissions.
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 products and solutions yet to be generally available; new sales opportunities; and projected bookings, revenues, earnings per share, profit, and market share 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 Workflow 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 ("SEC"). 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 revenues, 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 revenues, 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 revenues. 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) 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.
f) Severance and other related
expenses. We excluded from our
non-GAAP results the expenses
which are related to restructuring
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.
g) Tax impact from restructuring
activity. We excluded from our
non-GAAP results the tax impacts
related to restructuring activity.
These impacts 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
impacts provides more meaningful
comparisons of the financial
results to our historical
operations and forward-looking
guidance, and the financial
results of peer companies.
h) Contingent gain. We excluded from
our non-GAAP results the
contingent gain related to a
settlement agreement associated
with the Ateb acquisition. This
contingent gain is unrelated to
our ongoing operations, and we do
not expect it to occur in the
ordinary course of business. We
believe that excluding this
contingent gain 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:
a) 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.
b) 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.
c) 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.
d) 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
Accounting Standard Codification
("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 share-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 share-based 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:
a) 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.
b) 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.
The Company's 2018 guidance for non-GAAP earnings per share, as well as certain projections discussed in today's teleconference, exclude "certain items," which include but are not limited to: unusual gains and losses; costs associated with future restructurings; acquisition-related expenses; and certain tax and litigation outcomes. We do not provide a reconciliation of non-GAAP earnings per share guidance to the comparable GAAP measure as these items are inherently uncertain and difficult to estimate, and cannot be predicted without unreasonable effort. We believe such a reconciliation would imply a degree of precision that could be confusing to investors. These items may also have a material impact on GAAP earnings per share in future periods.
Omnicell, Inc.
Condensed Consolidated Statements of Operations
(Unaudited, in thousands, except per share data)
Three Months Ended
June 30, 2018 June 30, 2017
-------------
As Adjusted* As Reported Change
----------- ----------- ------
Revenues:
Product revenues $134,636 $130,205 $128,056 $2,149
Services and other
revenues 54,037 50,837 52,829 (1,992)
------ ------ ------ ------
Total revenues 188,673 181,042 180,885 157
Cost of revenues:
Cost of product revenues 75,076 81,738 81,738 -
Cost of services and
other revenues 24,814 21,172 21,172 -
------ ------ ------ ---
Total cost of revenues 99,890 102,910 102,910 -
------ ------- ------- ---
Gross profit 88,783 78,132 77,975 157
Operating expenses:
Research and development 15,512 16,911 16,911 -
Selling, general, and
administrative 65,937 61,922 63,468 (1,546)
Total operating expenses 81,449 78,833 80,379 (1,546)
------ ------ ------ ------
Income (loss) from
operations 7,334 (701) (2,404) 1,703
Interest and other income
(expense), net (896) 196 196 -
---- --- --- ---
Income (loss) before
provision for income
taxes 6,438 (505) (2,208) 1,703
Provision for (benefit
from) income taxes (150) (2,385) (3,045) 660
Net income (loss) $6,588 $1,880 $837 $1,043
====== ====== ==== ======
Net income (loss) per share:
Basic $0.17 $0.05 $0.02 $0.03
Diluted $0.16 $0.05 $0.02 $0.03
Weighted average shares outstanding:
Basic 38,970 37,250 37,250
Diluted 40,000 38,370 38,370
* As adjusted for full retrospective
adoption of Accounting Standard
Codification ("ASC") 606, "Revenue
from Contracts with Customers." The
adjustment also includes a $0.2
million reclassification from
services and other revenues to
product revenues to conform with
current-period presentation.
Omnicell, Inc.
Condensed Consolidated Statements of Operations
(Unaudited, in thousands, except per share data)
Six Months Ended
June 30, 2018 June 30, 2017
-------------
As Adjusted* As Reported Change
----------- ----------- ------
Revenues:
Product revenues $265,295 $228,996 $226,986 $2,010
Services and other
revenues 105,997 100,599 104,453 (3,854)
------- ------- ------- ------
Total revenues 371,292 329,595 331,439 (1,844)
------- ------- ------- ------
Cost of revenues:
Cost of product revenues 150,493 145,326 145,326 -
Cost of services and
other revenues 49,561 43,946 43,946 -
------ ------ ------ ---
Total cost of revenues 200,054 189,272 189,272 -
------- ------- ------- ---
Gross profit 171,238 140,323 142,167 (1,844)
Operating expenses:
Research and development 32,049 33,714 33,714 -
Selling, general, and
administrative 131,222 123,862 128,093 (4,231)
Total operating expenses 163,271 157,576 161,807 (4,231)
------- ------- ------- ------
Income (loss) from
operations 7,967 (17,253) (19,640) 2,387
Interest and other income
(expense), net (3,625) (2,260) (2,260) -
------ ------ ------ ---
Income (loss) before
provision for income
taxes 4,342 (19,513) (21,900) 2,387
Provision for (benefit
from) income taxes (4,966) (11,058) (11,983) 925
Net income (loss) $9,308 $(8,455) $(9,917) $1,462
====== ======= ======= ======
Net income (loss) per share:
Basic $0.24 $(0.23) $(0.27) $0.04
Diluted $0.23 $(0.23) $(0.27) $0.04
Weighted average shares outstanding:
Basic 38,804 37,046 37,046
Diluted 39,854 37,046 37,046
* As adjusted for full retrospective
adoption of ASC 606, "Revenue from
Contracts with Customers." The
adjustment also includes a $0.3
million reclassification from
services and other revenues to
product revenues to conform with
current-period presentation.
Omnicell, Inc.
Condensed Consolidated Balance Sheets
(Unaudited, in thousands)
June 30, 2018 December 31, 2017
-------------
As Adjusted* As Reported Change
----------- ----------- ------
ASSETS
Current assets:
Cash and cash equivalents $46,168 $32,424 $32,424 $ -
Accounts receivable and unbilled, net 174,570 190,046 189,227 819
Inventories, net 103,732 96,137 96,137 -
Prepaid expenses 18,266 20,392 36,060 (15,668)
Other current assets 16,122 13,273 13,273 -
------ ------ ------ ---
Total current assets 358,858 352,272 367,121 (14,849)
Property and equipment, net 50,884 42,595 42,595 -
Long-term investment in sales-type
leases, net 16,707 15,435 15,435 -
Goodwill 336,550 337,751 337,751 -
Intangible assets, net 155,750 168,107 168,107 -
Long-term deferred tax assets 9,451 9,454 9,454 -
Prepaid commissions 38,620 41,432 - 41,432
Other long-term assets 59,655 49,316 39,841 9,475
Total assets $1,026,475 $1,016,362 $980,304 $36,058
========== ========== ======== =======
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $35,261 $48,290 $48,290 $ -
Accrued compensation 31,168 27,241 27,241 -
Accrued liabilities 31,721 35,693 35,693 -
Long-term debt, current portion, net 17,708 15,208 15,208 -
Deferred revenues, net 85,776 78,774 86,104 (7,330)
------ ------ ------ ------
Total current liabilities 201,634 205,206 212,536 (7,330)
Long-term, deferred revenues 8,957 10,623 17,244 (6,621)
Long-term deferred tax liabilities 34,788 41,446 28,579 12,867
Other long-term liabilities 11,394 9,829 9,829 -
Long-term debt, net 181,062 194,917 194,917 -
------- ------- ------- ---
Total liabilities 437,835 462,021 463,105 (1,084)
Total stockholders' equity 588,640 554,341 517,199 37,142
Total liabilities and stockholders'
equity $1,026,475 $1,016,362 $980,304 $36,058
========== ========== ======== =======
* As adjusted for full
retrospective adoption of ASC
606, "Revenue from Contracts
with Customers."
Omnicell, Inc.
Condensed Consolidated Statements of Cash Flows
(Unaudited, in thousands)
Six months ended June 30,
2018 2017*
---- ----
Operating Activities
Net income (loss) $9,308 $(8,455)
Adjustments to reconcile net income (loss) to
net cash provided by operating activities:
Depreciation and amortization 24,829 25,942
Loss on disposal of fixed assets - 79
Share-based compensation expense 13,766 11,056
Income tax benefits from
employee stock plans - 11
Deferred income taxes (6,655) (11,722)
Amortization of debt financing
fees 1,145 795
Changes in operating assets and liabilities:
Accounts receivable and unbilled 15,476 (1,058)
Inventories (9,789) (12,226)
Prepaid expenses 2,126 128
Other current assets (2,283) 202
Investment in sales-type leases (1,838) 5,482
Prepaid commissions 2,812 1,554
Other long-term assets (2,797) (622)
Accounts payable (12,229) 23,357
Accrued compensation 3,927 4,529
Accrued liabilities (2,574) 2,165
Deferred revenues 5,336 (3,412)
Other long-term liabilities 167 1,119
Net cash provided by operating
activities 40,727 38,924
------ ------
Investing Activities
Purchases of intangible assets,
intellectual property, and
patents - (160)
Software development for
external use (13,091) (6,748)
Purchases of property and
equipment (14,985) (6,493)
Business acquisition, net of
cash acquired - (4,446)
--- ------
Net cash used in investing
activities (28,076) (17,847)
------- -------
Financing Activities
Proceeds from debt - 10,000
Repayment of debt and revolving
credit facility (12,500) (70,500)
Proceeds from issuances under
stock-based compensation plans 16,117 15,783
Employees' taxes paid related to
restricted stock units (3,062) (2,638)
Net cash provided by (used in)
financing activities 555 (47,355)
Effect of exchange rate changes
on cash and cash equivalents 538 (1,274)
--- ------
Net increase (decrease) in cash
and cash equivalents 13,744 (27,552)
Cash and cash equivalents at
beginning of period 32,424 54,488
Cash and cash equivalents at end
of period $46,168 $26,936
======= =======
* As adjusted for full
retrospective adoption of ASC
606, "Revenue from Contracts
with Customers."
Omnicell, Inc.
Reconciliation of GAAP to Non-GAAP
(Unaudited, in thousands, except per share data and percentage)
Three Months Ended Six Months Ended
June 30, June 30, June 30, June 30,
2018 2017* 2018 2017*
---- ---- ---- ----
Reconciliation of GAAP revenues to non-GAAP revenues:
GAAP revenues $188,673 $181,042 $371,292 $329,595
Acquisition accounting
impact related to
deferred revenues - 313 - 626
--- --- --- ---
Non-GAAP revenues $188,673 $181,355 $371,292 $330,221
======== ======== ======== ========
Reconciliation of GAAP gross profit to non-GAAP gross profit:
GAAP gross profit $88,783 $78,132 $171,238 $140,323
GAAP gross margin 47.1% 43.2% 46.1% 42.6%
Share-based compensation
expense 1,177 864 2,196 1,846
Amortization of acquired
intangibles 2,756 2,848 5,547 5,685
Acquisition accounting
impact related to
deferred revenues - 313 - 626
Severance and other
expenses - - - 1,697
=== === === =====
Non-GAAP gross profit $92,716 $82,157 $178,981 $150,177
======= ======= ======== ========
Non-GAAP gross margin 49.1% 45.3% 48.2% 45.5%
Reconciliation of GAAP operating expenses to non-GAAP operating expenses:
GAAP operating expenses $81,449 $78,833 $163,271 $157,576
GAAP operating expenses %
to total revenues 43.2% 43.5% 44.0% 47.8%
Share-based compensation
expense (6,061) (4,681) (11,570) (9,210)
Amortization of acquired
intangibles (3,126) (3,626) (6,364) (7,279)
Acquisition-related
expenses - - - (126)
Severance and other
expenses (1,735) (970) (3,247) (3,302)
Non-GAAP operating
expenses $70,527 $69,556 $142,090 $137,659
======= ======= ======== ========
Non-GAAP operating
expenses % to total
revenues 37.4% 38.4% 38.3% 41.7%
* As adjusted for full retrospective adoption of ASC 606, "Revenue from Contracts with Customers."
Three Months Ended Six Months Ended
June 30, June 30, June 30, June 30,
2018 2017* 2018 2017*
---- ---- ---- ----
Reconciliation of GAAP income (loss) from operations to non-GAAP income (loss) from operations:
GAAP income (loss) from
operations $7,334 $(701) $7,967 $(17,253)
GAAP operating income
(loss) % to total
revenues 3.9% (0.4)% 2.1% (5.2)%
Share-based compensation
expense 7,238 5,545 13,766 11,056
Amortization of acquired
intangibles 5,882 6,474 11,911 12,964
Acquisition accounting
impact related to
deferred revenues - 313 - 626
Acquisition-related
expenses - - - 126
Severance and other
expenses 1,735 970 3,247 4,999
Non-GAAP income (loss)
from operations $22,189 $12,601 $36,891 $12,518
======= ======= ======= =======
Non-GAAP operating
income (loss) % to total
Non-GAAP revenues 11.8% 6.9% 9.9% 3.8%
Reconciliation of GAAP net income (loss) to non-GAAP net income:
GAAP net income (loss) $6,588 $1,880 $9,308 $(8,455)
Tax benefit for
restructuring activity - - (4,205) -
Share-based compensation
expense 7,238 5,545 13,766 11,056
Amortization of acquired
intangibles 5,882 6,474 11,911 12,964
Acquisition accounting
impact related to
deferred revenues - 313 - 626
Acquisition-related
expenses(c) 397 397 794 920
Severance and other
expenses 1,911 970 3,599 4,999
Contingent gain (2,456) - (2,456) -
Tax effect of the
adjustments above(a) (1,204) (2,817) (2,907) (6,836)
Non-GAAP net income $18,356 $12,762 $29,810 $15,274
======= ======= ======= =======
Reconciliation of GAAP net income (loss) per share - diluted to non-GAAP net income per share - diluted:
Shares - diluted GAAP 40,000 38,370 39,854 37,046
------ ------ ------ ------
Shares - diluted Non-GAAP 40,000 38,370 39,854 38,103
------ ------ ------ ------
GAAP net income (loss)
per share -diluted $0.16 $0.05 $0.23 $(0.23)
Tax benefit for
restructuring activity - - (0.11) -
Share-based compensation
expense 0.18 0.14 0.35 0.29
Amortization of acquired
intangibles 0.15 0.17 0.30 0.34
Acquisition accounting
impact related to
deferred revenues - 0.01 - 0.02
Acquisition-related
expenses 0.01 0.01 0.02 0.03
Severance and other
expenses 0.05 0.02 0.09 0.13
Contingent gain (0.06) - (0.06) -
Tax effect of the
adjustments above(a) (0.03) (0.07) (0.07) (0.18)
----- ----- ----- -----
Non-GAAP net income per
share - diluted $0.46 $0.33 $0.75 $0.40
===== ===== ===== =====
Reconciliation of GAAP net income (loss) to non-GAAP Adjusted EBITDA(b):
GAAP net income (loss) $6,588 $1,880 $9,308 $(8,455)
Share-based compensation
expense 7,238 5,545 13,766 11,056
Interest (income) and
expense, net 1,615 1,311 3,387 2,743
Depreciation and
amortization expense 12,519 13,494 24,829 25,942
Acquisition accounting
impact related to
deferred revenues - 313 - 626
Acquisition-related
expenses 397 397 794 920
Severance and other
expenses 1,911 728 3,599 4,493
Contingent gain (2,456) - (2,456) -
Income tax expense
(benefit) (150) (2,385) (4,966) (11,058)
---- ------
Non-GAAP Adjusted EBITDA $27,662 $21,283 $48,261 $26,267
======= ======= ======= =======
(a) Tax effects calculated for all
adjustments except tax benefits
and share-based compensation
expense, using an estimated annual
effective tax rate of 21% for
fiscal year 2018 and 35% for
fiscal year 2017.
(b) Defined as earnings before interest
income and expense, taxes,
depreciation and amortization, as
well as excluding certain non-
GAAP adjustments.
(c) Includes amortization of debt
financing fees associated with our
debt facilities.
Omnicell, Inc.
Segmented Information
(Unaudited, in thousands, except for percentages)
Three Months Ended June 30, 2018 Three Months Ended June 30, 2017
Automation and Medication Total Automation and Medication Total*
Analytics Adherence Analytics* Adherence
--------- --------- --------- ---------
Revenues $158,365 $30,308 $188,673 $148,584 $32,458 $181,042
Cost of revenues 78,686 21,204 99,890 80,716 22,194 102,910
Gross profit 79,679 9,104 88,783 67,868 10,264 78,132
------ ----- ------ ------ ------ ------
Gross margin % 50.3% 30.0% 47.1% 45.7% 31.6% 43.2%
Operating
expenses 48,167 10,296 58,463 47,508 10,099 57,607
Income (loss)
from segment
operations $31,512 $(1,192) $30,320 $20,360 $165 $20,525
======= ======= ======= ======= ==== =======
Operating margin
% 19.9% (3.9)% 16.1% 13.7% 0.5% 11.3%
Corporate costs 22,986 21,226
------ ------
Income (loss) from operations $7,334 $(701)
====== =====
* As adjusted for full
retrospective adoption of ASC
606, "Revenue from Contracts
with Customers."
Omnicell, Inc.
Segmented Information
(Unaudited, in thousands, except for percentages)
Six Months Ended June 30, 2018 Six Months Ended June 30, 2017
Automation and Medication Total Automation and Medication Total*
Analytics Adherence Analytics* Adherence
--------- --------- --------- ---------
Revenues $309,771 $61,521 $371,292 $270,754 $58,841 $329,595
Cost of revenues 156,928 43,126 200,054 149,477 39,795 189,272
Gross profit 152,843 18,395 171,238 121,277 19,046 140,323
------- ------ ------- ------- ------ -------
Gross margin % 49.3% 29.9% 46.1% 44.8% 32.4% 42.6%
Operating
expenses 96,558 20,495 117,053 95,570 21,295 116,865
Income (loss)
from segment
operations $56,285 $(2,100) $54,185 $25,707 $(2,249) $23,458
======= ======= ======= ======= ======= =======
Operating margin
% 18.2% (3.4)% 14.6% 9.5% (3.8)% 7.1%
Corporate costs 46,218 40,711
------ ------
Income (loss) from operations $7,967 $(17,253)
====== ========
* As adjusted for full
retrospective adoption of ASC
606, "Revenue from Contracts
with Customers."
Omnicell, Inc.
Segment Information - Non-GAAP Gross Profit and Non-GAAP Operating Margin
(Unaudited, in thousands, except for percentages)
Three Months Ended June 30, 2018
Automation and Medication Total
Analytics Adherence
Amount % of % of Non- Amount % of % of Non- Amount % of % of Non-
GAAP GAAP GAAP GAAP GAAP GAAP
Revenues Revenues Revenues Revenues Revenues Revenues
--------
Revenues $158,365 $30,308 $188,673
Non-GAAP Revenues $158,365 $30,308 $188,673
======== ======= ========
GAAP Gross profit $79,679 50.3% $9,104 30.0% $88,783 47.1%
Share-based compensation
expense 1,004 0.6% 0.6% 173 0.6% 0.6% 1,177 0.6% 0.6%
Amortization expense of
acquired intangible
assets 2,232 1.4% 1.4% 524 1.7% 1.7% 2,756 1.5% 1.5%
Non-GAAP Gross profit $82,915 52.4% $9,801 32.3% $92,716 49.1%
======= ====== =======
GAAP Operating income
(loss) $31,512 19.9% $(1,192) (3.9)% $30,320 16.1%
Share-based compensation
expense 3,148 2.0% 2.0% 489 1.6% 1.6% 3,637 1.9% 1.9%
Amortization expense of
acquired intangible
assets 4,204 2.7% 2.7% 1,678 5.5% 5.5% 5,882 3.1% 3.1%
Severance and other
expenses 996 0.6% 0.6% (25) (0.1)% (0.1)% 971 0.5% 0.5%
--- --- ---
Non-GAAP Operating income $39,860 25.2% $950 3.1% $40,810 21.6%
======= ==== =======
GAAP Corporate costs $22,986 12.2%
Share-based compensation expense (3,601) (1.9)% (1.9)%
Severance and other expenses (764) (0.4)% (0.4)%
----
Non-GAAP Corporate costs $18,621 9.9%
Non-GAAP Income from operations $22,189 11.8%
=======
Omnicell, Inc.
Segment Information - Non-GAAP Gross Profit and Non-GAAP Operating Margin
(Unaudited, in thousands, except for percentages)
Three Months Ended June 30, 2017
Automation and Medication Total*
Analytics* Adherence
Amount % of % of Non- Amount % of % of Non- Amount % of % of Non-
GAAP GAAP GAAP GAAP GAAP GAAP
Revenues Revenues Revenues Revenues Revenues Revenues
--------
Revenues $148,584 $32,458 $181,042
Acquisition accounting
impact related to
deferred revenues - - % - % 313 1.0% 1.0% 313 0.2% 0.2%
Non-GAAP Revenues $148,584 $32,771 $181,355
======== ======= ========
GAAP Gross profit $67,868 45.7% $10,264 31.6% $78,132 43.2%
Share-based compensation
expense 736 0.5% 0.5% 128 0.4% 0.4% 864 0.5% 0.5%
Amortization expense of
acquired intangible
assets 2,228 1.5% 1.5% 620 1.9% 1.9% 2,848 1.6% 1.6%
Acquisition accounting
impact related to
deferred revenues - - % - % 313 1.0% 1.0% 313 0.2% 0.2%
Non-GAAP Gross profit $70,832 47.7% $11,325 34.6% $82,157 45.3%
======= ======= =======
GAAP Operating income
(loss) $20,360 13.7% $165 0.5% $20,525 11.3%
Share-based compensation
expense 2,275 1.5% 1.5% 354 1.1% 1.1% 2,629 1.5% 1.4%
Amortization expense of
acquired intangible
assets 4,545 3.1% 3.1% 1,929 5.9% 5.9% 6,474 3.6% 3.6%
Acquisition accounting
impact related to
deferred revenues - - % - % 313 1.0% 1.0% 313 0.2% 0.2%
Severance and other
expenses 610 0.4% 0.4% - - % - % 610 0.3% 0.3%
--- --- ---
Non-GAAP Operating income $27,790 18.7% $2,761 8.4% $30,551 16.8%
======= ====== =======
GAAP Corporate costs $21,226 11.7%
Share-based compensation expense (2,916) (1.6)% (1.6)%
Severance and other expenses (360) (0.2)% (0.2)%
----
Non-GAAP Corporate costs $17,950 9.9%
Non-GAAP Income from operations $12,601 6.9%
=======
* As adjusted for full
retrospective adoption of ASC
606, "Revenue from Contracts
with Customers."
OMCL-E
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SOURCE Omnicell, Inc.
