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Apr 20, 2006

Omnicell Announces First Quarter 2006 Financial Results

Omnicell Announces First Quarter 2006 Financial Results

MOUNTAIN VIEW, Calif. - April 20, 2006 -- Omnicell, Inc. (NASDAQ: OMCL), a leading provider of patient safety solutions preferred by nurses, today announced first quarter 2006 results.

For the first quarter of 2006, net income was $1.1 million or $0.04 per diluted share compared to $2.2 million or $.08 per diluted share in Q4 2005 and increased from a loss of $5.8 million or ($0.23) per share in the year-ago quarter. Excluding t he impact on our results of recording $1.7 million in share-based compensation expenses related to adoption of SFAS No. 123®, non-GAAP net income was $2.9 million for the three months ending March 31, 2006 or $0.10 per diluted share. In comparison, for the three months ending March 31, 2005, and excluding of the impact of $1.1 million write-off of inventory obsolescence charges, $0.6 million charge for suspended acquisitions, and $1.5 million in restructuring expenses, non-GAAP net loss was $2.6 million or $0.10 loss per share.  

Revenue for the first quarter of 2006 totaled $33.9 million, up $0.4 million or 1% from Q4 2005 revenue of $33.5 million, and up $5.2 million or 18% from the first quarter of 2005.

Product backlog grew to $77.2 million, up $7.6 million or 11% from the end of Q4 2005.

Omnicell Chairman, President and CEO Randall A. Lipps commented, "I'm very pleased with our results this quarter. Growing backlog once again, in our seasonally weakest quarter, shows the strength of our product offerings. We continue to demonstrate that our business can be predictable, and our strong growth in new customers shows that high-quality products and superior installation and support services prevail in the marketplace."

Financial Results Conference Call Details
Management will discuss financial results for the first quarter of 2006 on Thursday, April 20, 2006 at 1:30 p.m. PT via conference call. Investors and analysts may listen to this conference call by logging on to www.omnicell.com or by dialing 800-240-7305 (domestic) or 303-262-2137 (international) approximately 10 minutes prior to the scheduled start. A replay of the call will be available from 3:30 p.m. PT on April 20, 2006 through 11:59 p.m. PT on April 27, 2006. Dialing 800-405-2236 (domestic) or 303-590-3000 (international) and entering the passcode 11057927# for both numbers will access the call replay. On the conference call, management will be discussing certain additional financial and statistical information. That information can be located on the "Investor Relations" page of Omnicell's Web site at www.omnicell.com.

About Omnicell
Omnicell, Inc. (NASDAQ: OMCL) is a leading provider of systems and software solutions targeting patient safety and operational efficiency in healthcare facilities. Since 1992, Omnicell has worked with more than 1,600 healthcare facilities to enhance patient safety and allow clinicians to spend more time with their patients.

Omnicell's medication-use product line includes solutions for the central pharmacy, nursing unit, operating room, and patient bedside. Solutions range from large central pharmacy "smart inventory" carousels to small handheld devices. From the point at which a medication arrives at the receiving dock to the time it is administered, Omnicell systems store it, package it, bar code it, order it, issue it, and provide information and controls on its use and reorder.

Our supply product lines provide a healthcare institution with fast, effective control of costs, capture of charges for payor reimbursement, and timely reorder of supplies. Products range from high-security closed-cabinet systems and software to open-shelf and combination solutions in the nursing unit, cath lab and operating room. 

Omnicell's mission is to provide the best customer experience in healthcare, helping hospitals reduce medication errors, operate more efficiently, and decrease costs. For more information, 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 necessarily forward-looking. 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. The risk factors are described in the Company's Securities and Exchange Commission filings and include, without limitation, the continued growth and acceptance of our products and services and the continued growth of the clinical automation and workflow automation market generally, the potential of increasing competition, the ability of the company to achieve profitability in the next few quarters, grow product backlog, retain key personnel, cut expenses, develop new products and integrate acquired products or intellectual property in a timely and cost-effective manner, and improve sales productivity. Prospective investors are cautioned not to place undue reliance on forward-looking statements.

(in thousands, except per share data, unaudited)

  Three Months Ended
  March 31, 2006
December 31, 2005 March 31, 2005 (unaudited)
   Product revenues $ 26,248 $ 26,604 $ 22,742
   Service and other revenues 7,665 6,877 6,009
      Total revenue 33,913 33,481 28,751
Costs of revenues:
   Cost of product revenues 12,166 12,557 11,533
   Cost of service and other revenues 3,283 2,445 2,837
      Total cost of revenues 15,449 15,002 14,370
Gross profit 18,464 18,479 14,381
Operating expenses:
   Research and development 2,568 2,027 2,709
   Selling, general and administrative 15,066 14,547 17,142
   Restructuring, facility and severance charges 0 0 406
Total operating expenses 17,634 16,574 20,257
Operating income (loss) 830 1,905 (5,876)
Interest and other income 350 303 125
Interest expense (7) (21) (24)
      Total other income 343 282 101
Income (loss) before provision (benefit) for income taxes 1,173 2,187 (5,775)
Provision (benefit) for income taxes 60 (50) 17
Net income (loss) $ 1,113 $ 2,237 ($ 5,792)
Net income (loss) per share:
   Basic $ 0.04 $ 0.09 ($ 0.23)
   Diluted $ 0.04 $ 0.08 ($ 0.23)
Weighted average shares outstanding:
   Basic 26,442 26,249 25,490
   Diluted 28,105 27,582 25,490

(in thousands)

March 31, 2006
December 31, 2005 (1)

March 31, 2005


Current assets:
   Cash and cash equivalents $ 33,853 $ 29,536

$ 15,251

   Short-term investments - - 11,047
   Accounts receivable, net 28,980 29,456 22,591
   Inventories 12,165 13,763 15,291
   Receivables subject to a sales agreement 2,175 2,551 2,987
   Prepaid expenses and other current assets 10,634 10,286 7,083
      Total current assets 87,807 85,592 74,250
Property and equipment, net 4,505 4,727 5,422
Long-term receivables subject to a sales agreement 1,507 1,292 2,852
Other assets 12,981 8,817 12,264
   Total assets $ 106,800 $ 100,428 $ 94,788


Current liabilities:
   Accounts payable $ 3,674 $ 4,059 $ 5,137
   Accrued liabilities 11,400 12,664 11,745
   Deferred service revenue 6,951 6,526 6,045
   Deferred gross profit 10,764 7,981 7,653
   Obligation resulting from sales of receivables 2,175 2,551 2,987
      Total current liabilities 34,964 33,781 33,567
Long-term obligation resulting from sale of receivables 1,507 1,292 2,852
Long-term deferred service revenue 9,797 9,867 9,128
Other long-term liabilities 125 250 250
      Total liabilities 46,393 45,190 45,797
Stockholders' equity 60,407 55,238 48,991
      Total liabilties and stockholders' equity $ 106,800 $ 100,428 $ 94,788

(1) Information derived from the audited Consolidated Financial Statements.

(in thousands, except for per share data, unaudited)

Three months ended
March 31, 2006
Three months ended
March 31, 2005

Three months ended
December 31, 2005

  Revenue Net Income Earnings per share - diluted Revenue Net Loss Earnings (loss) per share - basic Revenue Net Income Earnings per share - diluted
GAAP $33,913 $1,113 $0.04 $28,751 ($5,792) ($0.23) $33,481 $2,187 $0.08
Non-GAAP Adjustments
SFAS No. 123® adjustment (a)    


   Gross Margin   269  
   Operating Expenses   1,472  
Inventory obsolecence due to product discontinuation (b)      
   Gross Margin       1,100
   Operating Expenses      
Restructuring expenses (c)      
   Gross Margin      
   Operating Expenses       1,500
Write off for suspended acquistions (d)      
   Gross Margin      
   Operating Expenses       600
    1,741 $0.06 - 3,200 $0.13 - - -
NON-GAAP $33,913 $2,854 $0.10 $28,751 ($2,592) ($0.10) $33,481 $2,187 $0.08

These Non-GAAP adjustments reconcile the Company's GAAP results of operations to its non-GAAP results of operations. The Company believes that presentation of results excluding such items as non-cash share based compensation, restructuring costs, inventory obsolescence, and write off of costs for suspended acquisitions provides meaningful supplemental information to both management and investors that is representative of the Company's core operating results and allows comparison of operating results. The Company uses these non-GAAP measures when evaluating its financial performance. These non-GAAP results of operations should not be viewed as a substitute for the Company's GAAP results.

(a)This adjustment reflects the accounting impact of non-cash compensation expense related to the impact of adoption of SFAS No. 123-R for the three months ending March 31, 2006.

(b)This adjustment reflects a write off of $1.1 million in inventory obsolescence due to discontinutation of a product

(c)This adjustment reflects a write off of $1.5 million associated with a reduction in force costs

(d)This adjustment reflects a write off of $0.6 million write of costs associated with suspended acquisitions