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Oct 24, 2002

Omnicell Announces Third Quarter 2002 Financial Results

Omnicell Announces Third Quarter 2002 Financial Results

PALO ALTO, Calif. — Oct. 24, 2002 — Omnicell, Inc. (NASDAQ: OMCL), a provider of solutions that improve patient care by enhancing the operational efficiency of healthcare organizations, today announced financial results for the third quarter ended Sept. 30, 2002.

For the third quarter of 2002, total revenues were $19.1 million compared to $22.7 million for the comparable period in 2001. For the nine months ended Sept. 30, 2002, total revenues were $68.4 million compared to $62.5 million in 2001.

Total operating expenses decreased to $13.3 million in the third quarter of 2002 from $13.9 million in the third quarter of 2001. The operating loss for the third quarter of 2002 was $2.7 million, compared to operating income of $0.5 million in the third quarter of 2001. The net loss for the third quarter of 2002 was $2.6 million or ($0.12) per share compared to net income of $0.5 million or $0.02 per share on a fully diluted basis in the same quarter a year ago.

For the nine months ended Sept. 30, 2002, total operating expenses decreased slightly to $40.2 million from $40.5 million in the same period of 2001. For the nine months ended Sept. 30, 2002, operating income was $0.3 million, compared to an operating loss of $1.7 million in the same period last year. For the nine months ended Sept. 30, 2002, net income was $0.8 million or $0.04 per share on a fully diluted basis, compared to a loss of $2.6 million or $(0.59) per share in the same period last year.

Omnicell’s cash balances at the end of the third quarter were $21.3 million, unchanged from June 30, 2002.

"While we faced significant challenges in the third quarter, we remain well-positioned to leverage and grow our installed base of over 23,000 automation systems at more than 1,300 healthcare facilities," said Omnicell’s Chairman, President and CEO Randall A. Lipps. "We have identified and assessed the major opportunities and challenges facing our business and we are proactively addressing these by strengthening the management team, improving our organizational structure and sales focus, and developing an achievable plan to build market presence and accomplish consistent growth.

"This plan includes reducing expenses, improving operational efficiencies and accelerating new product development," Lipps continued. "We believe that through this plan we will be able to concentrate our efforts on our customer base and on pharmacy automation solutions, growing our business and returning to profitability by the end of the first half of 2003."

As part of its efforts to streamline the organization and improve cost management, Omnicell plans to make a reduction in headcount of approximately 10 percent for which the company will take a $2.5 million to $3.5 million restructuring charge in the fourth quarter of 2002. In addition, Omnicell announced the following:

  • Lipps was named President and CEO in addition to his duties as Chairman, replacing Shelly Asher, who stepped down as President and CEO
  • Gary Wright, the sales executive who led Omnicell’s rise in revenues from $1 million in 1994 to $48 million in 1998, was named Vice President of Sales and Field Operations. Wright was Vice President of International before assuming his new duties.
  • As of Sept. 30, 2002, 23,817 pharmacy and supply automation systems had been installed or released for customer installation in 1,357 healthcare facilities.
  • In Sept. 2002, Omnicell completed the acquisition of APRS Inc., a company that develops, markets, and supports integrated system solutions for health system pharmacies. The APRS solution was renamed Omnicell PharmacyCentral.
  • Bothwell Regional Health Center, a 180-bed hospital in Sedalia, Missouri, chose Omnicell for the installation of new pharmacy and supply automation systems
  • Omnicell launched a new open inventory system, OmniScanner, to complement its established OmniSupplier® closed system to allow healthcare organizations to manage both open and closed inventory.
Management will discuss third quarter results and provide a detailed outlook for business going forward today at 5 p.m. ET. Interested parties may listen to the conference call by logging on to www.omnicell.com or by dialing 800-257-1836 (domestic) or 303-262-2075 (international) approximately 10 minutes prior to the scheduled start. A replay of the call will be available from 7 p.m. ET on Oct. 24, 2002 through 11:59 p.m. ET on Oct. 31, 2002. Dialing 800-405-2236 (domestic) or 303-590-3000 (international) and entering the passcode 501604# for both numbers will access the call replay.

About Omnicell
Established in 1992, Omnicell (NASDAQ: OMCL) provides solutions that improve patient care by enhancing the operational efficiency of healthcare organizations. Addressing the medication management and supply chain areas, Omnicell's medication and supply dispensing systems and decision support tools enable healthcare facilities to decrease costs, operate more efficiently, and reduce medication errors. For more information, visit www.omnicell.com.

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, continued growth and acceptance of our products and services and continued growth of the clinical automation and workflow automation market generally, increasing competition, the ability of the company to achieve break-even by the end of the first half of 2003, grow product backlog, retain key personnel, cut expenses, develop and integrate products in a timely and cost-effective manner, and improve sales productivity. Prospective investors are cautioned not to place undue reliance on forward-looking statements.

OMNICELL, INC.
SELECTED FINANCIAL INFORMATION
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share amounts)


Three Months Ended


Nine Months Ended

September 30,

September 30,

2002

2001

2002

2001

(unaudited)

(unaudited)

Revenues:
Product revenues

$15,378

$19,308

$57,620

$54,583

Service and other revenues

3,695

3,371

10,814

7,923

Total revenues

19,073

22,679

68,434

62,506

Costs and expenses:
Cost of product revenues

7,134

6,970

23,132

18,983

Cost of service and other revenues

1,393

1,389

4,804

4,777

Total cost of revenues

8,527

8,359

27,936

23,760

Gross margin

10,546

14,320

40,498

38,746

Operating expenses:
Research and development

2,410

2,897

7,289

8,478

Selling, general and administrative

10,878

10,966

32,865

31,980

Total operating expenses

13,288

13,863

40,154

40,458

Operating income (loss)

(2,742)

457

344

(1,712)

Other income and expense, net

183

59

490

(778)

Income (loss) before provision for income taxes

(2,559)

516

834

(2,490)

Provision (benefit) for income taxes

25

25

(10)

75

Net income (loss)

($2,584)

$491

$844

($2,565)

Net income (loss) per share - basic

($0.12)

$0.04

$0.04

($0.59)

Net income (loss) per share - diluted

($0.12)

$0.02

$0.04

($0.59)

Shares used in computing net income (loss)

per share - basic

21,830

13,971

21,674

4,314

Shares used in computing net income (loss)

per share - diluted

21,830

20,052

23,078

4,314

SUMMARY BALANCE SHEET September 30, December 31,

2002

2001

(Note 1)

Cash, cash equivalents and short-term marketable securities

21,277

23,839

Trade receivables, net

14,712

18,167

Inventory, net

12,602

12,702

Other current assets

4,623

4,803

Property and equipment, net

5,062

5,384

Other assets 11,850 7,219
Total assets

70,126

72,114

Deferred service revenue

11,651

8,009

Deferred gross profit

19,313

24,790

Other current liabilities

16,672

19,351

Long-term obligations

723

363

Stockholders' equity

21,767

19,601

Total liabilities and stockholders' equity

70,126

72,114


(Note 1 – Derived from audited financial statements at December 31, 2001. Certain amounts have been reclassified to conform to current period presentation.)