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Feb 1, 2018

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

Omnicell, Inc. logo. (PRNewsFoto/Omnicell, Inc.)

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'sSEC 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,
2017


September 30,
2017


December 31,
2016


December 31,
2017


December 31,
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,
2017


September 30,
2017


December 31,
2016


December 31,
2017


December 31,
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,
2017


September 30,
2017


December 31,
2016


December 31,
2017


December 31,
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
and
Analytics


Medication
Adherence


Total


Automation
and

Analytics


Medication
Adherence


Total





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
and
Analytics


Medication
Adherence


Total


Automation
and

Analytics


Medication
Adherence


Total





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
Analytics


Medication
Adherence


Total


Amount


% of
GAAP
Revenue


% of
Non-
GAAP
Revenue


Amount


% of
GAAP
Revenue


% of
Non-
GAAP
Revenue


Amount


% of
GAAP
Revenue


% of
Non-
GAAP
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
Analytics


Medication
Adherence


Total


Amount


% of
GAAP
Revenue


% of
Non-
GAAP
Revenue


Amount


% of
GAAP
Revenue


% of
Non-
GAAP
Revenue


Amount


% of
GAAP
Revenue


% of
Non-
GAAP
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.

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