Document


UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D. C.  20549

FORM 8-K

CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(D) OF THE
SECURITIES EXCHANGE ACT OF 1934

Date of Report (Date of earliest event reported): April 26, 2018

OMNICELL, INC.
(Exact name of registrant as specified in its charter)

Delaware
 
000-33043
 
94-3166458
(State or other jurisdiction of
incorporation or organization)
 
(Commission File Number)
 
(IRS Employer Identification Number)

590 East Middlefield Road
Mountain View, CA 94043
(Address of principal executive offices, including zip code)

(650) 251-6100
(Registrant’s telephone number, including area code)


Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

o
Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

o
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

o
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

o
Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b– 2 of the Securities Exchange Act of 1934 (§240.12b–2 of this chapter).
 
Emerging growth company
 o

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.
 
 
 o








Item 2.02 Results of Operations and Financial Condition

On April 26, 2018, Omnicell, Inc. issued a press release announcing its financial results for the quarter ended March 31, 2018. The full text of the press release issued in connection with the announcement is attached as Exhibit 99.1 to this Current Report on Form 8-K and is incorporated herein by reference.

The information in this Form 8-K and the Exhibit attached hereto shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liabilities of that section, nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933, as amended, or the Exchange Act, except as expressly set forth by specific reference in such a filing.

Item 9.01 Financial Statements and Exhibits

(d) Exhibits

Number
 
Description of Document
99.1
 
Press release entitled "Omnicell Announces First Quarter 2018 Results" dated April 26, 2018

 







SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the Registrant has duly caused this report to be signed on its behalf by the undersigned, hereunto duly authorized.

 
OMNICELL,  INC.
 
 
 
Dated: April 26, 2018
 
 
 
 
/s/ Peter J. Kuipers
 
 
Peter J. Kuipers,
 
 
Executive Vice President and Chief Financial Officer
                                                      
                                                                           

 


EXHIBIT INDEX

Number
 
Description of Document
99.1
 


                                                                           

 



Exhibit


Exhibit 99.1

http://api.tenkwizard.com/cgi/image?quest=1&rid=23&ipage=12206432&doc=3

Contact:
 
 
 
 
 
Peter Kuipers
 
Omnicell, Inc.
Chief Financial Officer
 
590 East Middlefield Road
800-850-6664
 
Mountain View, CA 94043
Peter.kuipers@omnicell.com
 
 


Omnicell Announces First Quarter 2018 Results

GAAP revenue of $183 million, up 23% year-over-year
GAAP net income per diluted share of $0.07, up $0.35 year-over-year
Non-GAAP revenue of $183 million, up 23% year-over-year
Non-GAAP net income per diluted share of $0.29, up $0.22 year-over-year


MOUNTAIN VIEW, Calif. -- April 26, 2018 -- Omnicell, Inc. (NASDAQ: OMCL), a leading provider of medication and supply management solutions to healthcare systems, today announced results for its first quarter ended March 31, 2018

GAAP results: GAAP revenue for the first quarter of 2018 was $182.6 million, up $34.1 million, or 23% from the first quarter of 2017.
First quarter 2018 GAAP net income as reported was $2.7 million, or $0.07 per diluted share. This compares to GAAP net loss of $10.3 million, or $0.28 per diluted share, for the first quarter of 2017.
Non-GAAP results: Non-GAAP revenue for the first quarter of 2018 was $182.6 million, up $33.8 million, or 23% from the first quarter of 2017.

Non-GAAP net income for the first quarter of 2018 was $11.5 million, or $0.29 per diluted share. This compares to non-GAAP net income of $2.5 million, or $0.07 per diluted share, for the first quarter of 2017.

Non-GAAP net income for each period 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, restructuring and severance-related expenses, tax reform and restructuring benefits, 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.

“We are pleased to report this very strong start of 2018, which demonstrates that the market continues to see value in our industry-leading medication management platform,” said Randall Lipps, chairman, president, chief executive officer, and founder of Omnicell.  “As the complexities of healthcare evolve, we believe we are uniquely positioned to help lead the digital healthcare transformation with solutions that meet customer needs and grow market share for our business.”

2018 Guidance:
For the second quarter of 2018, the Company expects non-GAAP revenue to be between $185 million and $190 million. The Company expects second quarter 2018 non-GAAP earnings to be between $0.36 and $0.42 per share.

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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, and non-GAAP earnings to be between $1.85 and $2.05 per share.

The table below summarizes 2018 guidance outlined above.

 
Q2'18
Total Year 2018
Product Bookings
Not provided
$625 million - $660 million
Non-GAAP Revenue
$185 million - $190 million
$780 million - $800 million
Non-GAAP EPS
$0.36 - $0.42
$1.85 - $2.05

Omnicell Conference Call Information

Omnicell will hold a conference call today, Thursday, April 26, 2018 at 1:30 p.m. PT to discuss first 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 9755479. 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 June 7, 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 9755479.
 

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.

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 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.

Omnicell and the Omnicell logo are registered trademarks of Omnicell, Inc. in the United States and other countries.

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, revenue, 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, and lead the digital healthcare transformation, (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

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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 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 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.


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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.

i) 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.

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. 


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Pursuant to the requirements of SEC Regulation G, a detailed reconciliation between Omnicell’s non-GAAP and GAAP financial results is set forth in the financial tables at the end of this press release. Investors are advised to carefully review and consider this information strictly as a supplement to the GAAP results that are contained in this press release and in Omnicell’s SEC filings.

With respect to the Company’s expectations under “2018 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.
 

5




Omnicell, Inc.
Condensed Consolidated Statements of Operations
(Unaudited, in thousands, except per share data)

 
Three Months Ended
 
March 31, 2018
 
December 31, 2017
 
March 31, 2017
 
 
 
As Adjusted*
 
As Reported
 
Change
 
As Adjusted*
 
As Reported
 
Change
Revenues:
 
 
 
 
 
 
 
 
 
 
 
 
 
Product
$
130,104

 
$
144,109

 
$
144,120

 
$
(11
)
 
$
98,702

 
$
98,930

 
$
(228
)
Services and other revenues
52,515

 
52,262

 
53,824

 
(1,562
)
 
49,851

 
51,624

 
(1,773
)
Total revenues
182,619

 
196,371

 
197,944

 
(1,573
)
 
148,553

 
150,554

 
(2,001
)
Cost of revenues:
 
 
 
 
 
 
 
 
 
 
 
 
 
Cost of product revenues
75,417

 
79,791

 
79,791

 

 
63,588

 
63,588

 

Cost of services and other revenues
24,747

 
23,085

 
23,085

 

 
22,774

 
22,774

 

Total cost of revenues
100,164

 
102,876

 
102,876

 

 
86,362

 
86,362

 

Gross profit
82,455

 
93,495

 
95,068

 
(1,573
)
 
62,191

 
64,192

 
(2,001
)
Operating expenses:
 
 
 
 
 
 
 
 
 
 
 
 
 
Research and development
16,537

 
15,894

 
15,894

 

 
16,803

 
16,803

 

Selling, general and administrative
65,285

 
61,401

 
63,494

 
(2,093
)
 
61,940

 
64,625

 
(2,685
)
Total operating expenses
81,822

 
77,295

 
79,388

 
(2,093
)
 
78,743

 
81,428

 
(2,685
)
Income (loss) from operations
633

 
16,200

 
15,680

 
520

 
(16,552
)
 
(17,236
)
 
684

Interest and other income (expense), net
(2,729
)
 
(1,641
)
 
(1,641
)
 

 
(2,456
)
 
(2,456
)
 

Income (loss) before provision for income taxes
(2,096
)
 
14,559

 
14,039

 
520

 
(19,008
)
 
(19,692
)
 
684

Provision for (benefit from) income taxes
(4,816
)
 
(16,665
)
 
(10,252
)
 
(6,413
)
 
(8,673
)
 
(8,938
)
 
265

Net income (loss)
$
2,720

 
$
31,224

 
$
24,291

 
$
6,933

 
$
(10,335
)
 
$
(10,754
)
 
$
419

Net income (loss) per share:

 
 
 
 
 
 
 
 
 
 
 
 
Basic
$
0.07

 
$
0.82

 
$
0.64

 
$
0.18

 
$
(0.28
)
 
$
(0.29
)
 
$
0.01

Diluted
$
0.07

 
$
0.79

 
$
0.62

 
$
0.17

 
$
(0.28
)
 
$
(0.29
)
 
$
0.01

Weighted average shares outstanding:
 
 
 
 
 
 
 
 
 
 
 
 
 
Basic
38,635

 
38,127

 
38,127

 
 
 
36,840

 
36,840

 
 
Diluted
39,691

 
39,482

 
39,482

 
 
 
36,840

 
36,840

 
 

* As adjusted for full retrospective adoption of Accounting Standard Codification ("ASC") 606, "Revenue from Contracts with Customers".
 


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Omnicell, Inc.
Condensed Consolidated Balance Sheets
(Unaudited, in thousands)
 
March 31, 2018
 
December 31, 2017
 
 
 
As Adjusted*
 
As Reported
 
Change
ASSETS
 
 
 
 
Current assets:
 

 
 
 
 
 
 
Cash and cash equivalents
$
43,773

 
$
32,424

 
$
32,424

 
$

Accounts receivable and unbilled, net
190,678

 
190,046

 
189,227

 
819

Inventories
101,868

 
96,137

 
96,137

 

Prepaid expenses
21,161

 
20,392

 
36,060

 
(15,668
)
Other current assets
14,751

 
13,273

 
13,273

 

Total current assets
372,231

 
352,272

 
367,121

 
(14,849
)
Property and equipment, net
48,290

 
42,595

 
42,595

 

Long-term investment in sales-type leases, net
16,444

 
15,435

 
15,435

 

Goodwill
338,948

 
337,751

 
337,751

 

Intangible assets, net
162,458

 
168,107

 
168,107

 

Long-term deferred tax assets
9,456

 
9,454

 
9,454

 

Prepaid commissions
39,636

 
41,432

 

 
41,432

Other long-term assets
53,492

 
49,316

 
39,841

 
9,475

Total assets
$
1,040,955

 
$
1,016,362

 
$
980,304

 
$
36,058

 
 
 
 
 
 
 
 
LIABILITIES AND STOCKHOLDERS’ EQUITY
 
 
 
 
Current liabilities:
 

 
 
 
 
 
 
Accounts payable
$
37,859

 
$
48,290

 
$
48,290

 
$

Accrued compensation
29,632

 
27,241

 
27,241

 

Accrued liabilities
40,519

 
35,693

 
35,693

 

Long-term debt, current portion, net
17,708

 
15,208

 
15,208

 

Deferred revenue, net
95,709

 
78,774

 
86,104

 
(7,330
)
Total current liabilities
221,427

 
205,206

 
212,536

 
(7,330
)
Long-term, deferred revenue
8,806

 
10,623

 
17,244

 
(6,621
)
Long-term deferred tax liabilities
36,320

 
41,446

 
28,579

 
12,867

Other long-term liabilities
9,410

 
9,829

 
9,829

 

Long-term debt, net
190,490

 
194,917

 
194,917

 

Total liabilities
466,453

 
462,021

 
463,105

 
(1,084
)
Total stockholders’ equity
574,502

 
554,341

 
517,199

 
37,142

Total liabilities and stockholders’ equity
$
1,040,955

 
$
1,016,362

 
$
980,304

 
$
36,058

* As adjusted for full retrospective adoption of Accounting Standard Codification ("ASC") 606, "Revenue from Contracts with Customers".
 

7



Omnicell, Inc.
Condensed Consolidated Statements of Cash Flows
(Unaudited, in thousands)
 
Three months ended March 31,
 
2018
 
2017*
Operating Activities
 
 
 
Net income (loss)
$
2,720

 
$
(10,335
)
Adjustments to reconcile net income to net cash provided by operating activities:
 
 
 
Depreciation and amortization
12,310

 
12,448

Share-based compensation expense
6,528

 
5,511

Income tax benefits from employee stock plans

 
11

Deferred income taxes
(5,128
)
 
(8,826
)
Amortization of debt financing fees
573

 
397

Changes in operating assets and liabilities:
 
 
 
Accounts receivable
(632
)
 
21,642

Inventories
(6,881
)
 
(6,933
)
Prepaid expenses
(769
)
 
79

Other current assets
(997
)
 
374

Investment in sales-type leases
(1,491
)
 
1,120

Prepaid commissions
1,796

 
208

Other long-term assets
(1,673
)
 
(9,435
)
Accounts payable
(9,416
)
 
11,104

Accrued compensation
2,391

 
1,955

Accrued liabilities
4,276

 
(115
)
Deferred revenue
15,118

 
8,471

Other long-term liabilities
131

 
506

Net cash provided by operating activities
18,856

 
28,182

Investing Activities
 
 
 
Purchases of intangible assets, intellectual property and patents

 
(160
)
Software development for external use
(5,272
)
 
(4,225
)
Purchases of property and equipment
(9,268
)
 
(2,452
)
Net cash used in investing activities
(14,540
)
 
(6,837
)
Financing Activities
 
 
 
Repayment of debt and revolving credit facility
(2,500
)
 
(40,000
)
Proceeds from issuances under stock-based compensation plans
9,541

 
10,916

Employees' taxes paid related to restricted stock units
(1,300
)
 
(1,052
)
Net cash provided by (used in) financing activities
5,741

 
(30,136
)
Effect of exchange rate changes on cash and cash equivalents
1,292

 
651

Net increase (decrease) in cash and cash equivalents
11,349

 
(8,140
)
Cash and cash equivalents at beginning of period
32,424

 
54,488

Cash and cash equivalents at end of period
$
43,773

 
$
46,348


* As adjusted for full retrospective adoption of Accounting Standard Codification ("ASC") 606, "Revenue from Contracts with Customers".

8



Omnicell, Inc.
Reconciliation of GAAP to Non-GAAP
(Unaudited, in thousands, except per share data and percentage)
 
 
 
 
 
 
Three Months Ended
 
 
 
 
 
 
March 31, 2018
 
December 31, 2017*
 
March 31, 2017*
 
 
 
 
 
 
 
 
 
 
 
Reconciliation of GAAP revenue to non-GAAP revenue:
 
 
GAAP revenue
 
$
182,619

 
$
196,371

 
$
148,553

 
Acquisition accounting impact related to deferred revenue

 
313

 
313

Non-GAAP revenue
$
182,619

 
$
196,684

 
$
148,866

 
 
 
 
 
 
 
 
 
 
 
Reconciliation of GAAP gross profit to non-GAAP gross profit:
 
 
GAAP gross profit
$
82,455

 
$
93,495

 
$
62,191

GAAP gross margin
45.2%
 
47.6%
 
41.9%
 
Share-based compensation expense
1,019

 
834

 
982

 
Amortization of acquired intangibles
2,791

 
2,818

 
2,837

 
Acquisition accounting impact related to deferred revenue

 
313

 
313

 
Severance and other expenses

 
234

 
1,697

Non-GAAP gross profit
$
86,265

 
$
97,694

 
$
68,020

Non-GAAP gross margin
47.2%
 
49.7%
 
45.7%
 
 
 
 
 
 
 
 
 
 
 
Reconciliation of GAAP operating expenses to non-GAAP operating expenses:
GAAP operating expenses
$
81,822

 
$
77,295

 
$
78,743

GAAP operating expenses % to total revenue
 
44.8%
 
39.4%
 
53.0%
 
Share-based compensation expense
(5,509
)
 
(4,708
)
 
(4,529
)
 
Amortization of acquired intangibles
(3,238
)
 
(3,348
)
 
(3,653
)
 
Acquisitions related expenses

 

 
(126
)
 
Severance and other expenses
(1,512
)
 
(233
)
 
(2,332
)
Non-GAAP operating expenses
$
71,563

 
$
69,006

 
$
68,103

Non-GAAP operating expenses % to total revenue
39.2%
 
35.1%
 
45.7%
* As adjusted for full retrospective adoption of Accounting Standard Codification ("ASC") 606, "Revenue from Contracts with Customers".

9



 
 
 
 
 
 
Three Months Ended
 
 
 
 
 
 
March 31, 2018
 
December 31, 2017*
 
March 31, 2017*
Reconciliation of GAAP income (loss) from operations to non-GAAP income (loss) from operations:
GAAP income (loss) from operations
$
633

 
$
16,200

 
$
(16,552
)
GAAP operating income (loss) % to total revenue
 
0.3%
 
8.2%
 
(11.1)%
 
Share-based compensation expense
6,528

 
5,542

 
5,511

 
Amortization of acquired intangibles
6,029

 
6,166

 
6,490

 
Acquisition accounting impact related to deferred revenue

 
313

 
313

 
Acquisitions related expenses

 

 
126

 
Severance and other expenses
1,512

 
467

 
4,029

Non-GAAP income (loss) from operations
$
14,702

 
$
28,688

 
$
(83
)
Non-GAAP operating income (loss) % to total Non-GAAP revenue
8.1%
 
14.6%
 
(0.1)%
 
 
 
 
 
 
 
 
 
 
 
Reconciliation of GAAP net income (loss) to non-GAAP net income:
 
 
GAAP net income (loss)
$
2,720

 
$
31,224

 
$
(10,335
)
 
Tax reform benefit impact

 
(20,005
)
 

 
Tax benefit for restructuring activity
(4,205
)
 

 

 
Share-based compensation expense
6,528

 
5,542

 
5,511

 
Amortization of acquired intangibles
6,029

 
6,166

 
6,490

 
Acquisition accounting impact related to deferred revenue

 
313

 
313

 
Acquisitions related expenses(c)
397

 
397

 
523

 
Severance and other expenses
1,688

 
467

 
4,029

 
Tax effect of the adjustments above(a)
(1,703
)
 
(2,570
)
 
(4,019
)
Non-GAAP net income
$
11,454

 
$
21,534

 
$
2,512

 
 
 
 
 
 
 
 
 
 
 
Reconciliation of GAAP net income (loss) per share - diluted to non-GAAP net income per share - diluted:
Shares - diluted GAAP
39,691

 
39,482

 
36,840

 
 
 
 
 
 
 
 
 
 
 
Shares - diluted Non-GAAP
39,691

 
39,482

 
37,782

 
 
 
 
 
 
 
 
 
 
 
GAAP net income (loss) per share - diluted
$
0.07

 
$
0.79

 
$
(0.28
)
 
Tax reform benefit impact

 
(0.50
)
 

 
Tax benefit for restructuring activity
(0.10
)
 

 

 
Share-based compensation expense
0.16

 
0.14

 
0.15

 
Amortization of acquired intangibles
0.15

 
0.16

 
0.17

 
Acquisition accounting impact related to deferred revenue

 
0.01

 
0.01

 
Acquisition related expenses
0.01

 
0.01

 
0.01

 
Severance and other expenses
0.04

 
0.01

 
0.11

 
Tax effect of the adjustments above(a)
(0.04
)
 
(0.07
)
 
(0.10
)
Non-GAAP net income per share - diluted
$
0.29

 
$
0.55

 
$
0.07

 
 
 
 
 
 
 
 
 
 
 
Reconciliation of GAAP net income (loss) to non-GAAP Adjusted EBITDA(b):
 
 
GAAP net income (loss)
$
2,720

 
$
31,224

 
$
(10,335
)
 
Share-based compensation expense
6,528

 
5,542

 
5,511

 
Interest (income) and expense, net
1,772

 
1,202

 
1,432

 
Depreciation and amortization expense
12,310

 
12,969

 
12,448

 
Acquisition accounting impact related to deferred revenue

 
313

 
313

 
Acquisitions related expenses
397

 
397

 
523

 
Severance expense
1,688

 
213

 
3,765

 
Income tax expense
(4,816
)
 
(16,665
)
 
(8,673
)
Non-GAAP Adjusted EBITDA
$
20,599

 
$
35,195

 
$
4,984

    (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.
 

10



Omnicell, Inc.
Segmented Information
(Unaudited, in thousands, except for percentages)

 
Three Months Ended March 31, 2018
 
Three Months Ended March 31, 2017
 
Automation and
Analytics
 
Medication
Adherence
 
Total
 
Automation and
Analytics *
 
Medication
Adherence
 
Total*
 
 
 
 
Revenues
$
151,406

 
$
31,213

 
$
182,619

 
$
122,170

 
$
26,383

 
$
148,553

Cost of revenues
78,242

 
21,922

 
100,164

 
68,761

 
17,601

 
86,362

Gross profit
73,164

 
9,291

 
82,455

 
53,409

 
8,782

 
62,191

Gross margin %
48.3%
 
29.8%
 
45.2%
 
43.7%
 
33.3%
 
41.9%
 
 
 
 
 
 
 
 
 
 
 
 
Operating expenses
48,390

 
10,199

 
58,589

 
48,062

 
11,196

 
59,258

Income (loss) from segment operations
$
24,774

 
$
(908
)
 
$
23,866

 
$
5,347

 
$
(2,414
)
 
$
2,933

Operating margin %
16.4%
 
(2.9)%
 
13.1%
 
4.4%
 
(9.1)%
 
2.0%
 
 
 
 
 
 
 
 
 
 
 
 
Corporate costs
 
 
 
 
23,233

 
 
 
 
 
19,485

Income (loss) from operations
 
 
 
 
$
633

 
 
 
 
 
$
(16,552
)
 
 
 
 
 
 
 
 
 
 
 
 

* As adjusted for full retrospective adoption of Accounting Standard Codification ("ASC") 606, "Revenue from Contracts with Customers".




11



Omnicell, Inc.
Segment Information - Non-GAAP Gross Profit and Non-GAAP Operating Margin
(Unaudited, in thousands, except for percentages)
 
Three Months Ended March 31, 2018
 
 
 
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
$
151,406

 
 
 
 
 
$
31,213

 
 
 
 
 
$
182,619

 
 
 
 
Non-GAAP Revenues
$
151,406

 
 
 
 
 
$
31,213

 
 
 
 
 
$
182,619

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
GAAP Gross profit
$
73,164

 
48.3
%
 
 
 
$
9,291

 
29.8
 %
 
 
 
$
82,455

 
45.2
 %
 
 
Share-based compensation expense
873

 
0.6
%
 
0.6
%
 
146

 
0.5
 %
 
0.5
%
 
1,019

 
0.6
 %
 
0.6
 %
Amortization expense of acquired intangible assets
2,247

 
1.5
%
 
1.5
%
 
544

 
1.7
 %
 
1.7
%
 
2,791

 
1.5
 %
 
1.5
 %
Non-GAAP Gross profit
$
76,284

 
 
 
50.4
%
 
$
9,981

 
 
 
32.0
%
 
$
86,265

 
 
 
47.2
 %
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
GAAP Operating income (loss)
$
24,774

 
16.4
%
 
 
 
$
(908
)
 
(2.9
)%
 
 
 
$
23,866

 
13.1
 %
 
 
Share-based compensation expense
2,730

 
1.8
%
 
1.8
%
 
446

 
1.4
 %
 
1.4
%
 
3,176

 
1.7
 %
 
1.7
 %
Amortization expense of acquired intangible assets
4,302

 
2.8
%
 
2.8
%
 
1,727

 
5.5
 %
 
5.5
%
 
6,029

 
3.3
 %
 
3.3
 %
Severance and other expenses
375

 
0.2
%
 
0.2
%
 
71

 
0.2
 %
 
0.2
%
 
446

 
0.2
 %
 
0.2
 %
Non-GAAP Operating income
$
32,181

 
 
 
21.3
%
 
$
1,336

 
 
 
4.3
%
 
$
33,517

 
 
 
18.4
 %
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
GAAP Corporate costs
 
 
 
 
 
 
 
 
 
 
 
 
$
23,233

 
12.7
 %
 
 
Share-based compensation expense
 
 
 
 
 
 
 
 
 
 
 
 
(3,352
)
 
(1.8
)%
 
(1.8
)%
Severance and other expenses
 
 
 
 
 
 
 
 
 
 
 
 
(1,066
)
 
(0.6
)%
 
(0.6
)%
Non-GAAP Corporate costs
 
 
 
 
 
 
 
 
 
 
 
 
$
18,815

 
 
 
10.3
 %
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Non-GAAP Income from operations
 
 
 
 
 
 
 
 
 
 
 
 
$
14,702

 
 
 
8.1
 %
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 


12



Omnicell, Inc.
Segment Information - Non-GAAP Gross Profit and Non-GAAP Operating Margin
(Unaudited, in thousands, except for percentages)

 
Three Months Ended March 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
$
122,170

 
 
 
 
 
$
26,383

 
 
 
 
 
$
148,553

 
 
 
 
Acquisition accounting impact related to deferred revenue

 
%
 
%
 
313

 
1.2
 %
 
1.2
%
 
313

 
0.2
 %
 
0.2
 %
Non-GAAP Revenues
$
122,170

 
 
 
 
 
$
26,696

 
 
 
 
 
$
148,866

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
GAAP Gross profit
$
53,409

 
43.7
%
 
 
 
$
8,782

 
33.3
 %
 
 
 
$
62,191

 
41.9
 %
 
 
Stock-based compensation expense
863

 
0.7
%
 
0.7
%
 
119

 
0.5
 %
 
0.4
%
 
982

 
0.7
 %
 
0.7
 %
Amortization expense of acquired intangible assets
2,187

 
1.8
%
 
1.8
%
 
650

 
2.5
 %
 
2.4
%
 
2,837

 
1.9
 %
 
1.9
 %
Acquisition accounting impact related to deferred revenue

 
%
 
%
 
313

 
1.2
 %
 
1.2
%
 
313

 
0.2
 %
 
0.2
 %
  Severance and other expenses
1,266

 
1.0
%
 
1.0
%
 
431

 
1.6
 %
 
1.6
%
 
1,697

 
1.1
 %
 
1.1
 %
Non-GAAP Gross profit
$
57,725

 
 
 
47.2
%
 
$
10,295

 
 
 
38.6
%
$

$
68,020

 
 
 
45.7
 %
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
GAAP Operating income (loss)
$
5,347

 
4.4
%
 
 
 
$
(2,414
)
 
(9.1
)%
 
 
 
$
2,933

 
2.0
 %
 
 
Stock-based compensation expense
2,500

 
2.0
%
 
2.0
%
 
366

 
1.4
 %
 
1.4
%
 
2,866

 
1.9
 %
 
1.9
 %
Amortization expense of acquired intangible assets
4,506

 
3.7
%
 
3.7
%
 
1,984

 
7.5
 %
 
7.4
%
 
6,490

 
4.4
 %
 
4.4
 %
Acquisition accounting impact related to deferred revenue

 
%
 
%
 
313

 
1.2
 %
 
1.2
%
 
313

 
0.2
 %
 
0.2
 %
Acquisitions related expenses
18

 
%
 
%
 

 
 %
 
%
 
18

 
 %
 
 %
  Severance and other expenses
2,752

 
2.3
%
 
2.3
%
 
596

 
2.3
 %
 
2.2
%
 
3,348

 
2.3
 %
 
2.2
 %
Non-GAAP Operating income
$
15,123

 
 
 
12.4
%
 
$
845

 
 
 
3.2
%
 
$
15,968

 
 
 
10.7
 %
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
GAAP Corporate costs
 
 
 
 
 
 
 
 
 
 
 
 
$
19,485

 
13.1
 %
 
 
Stock-based compensation expense
 
 
 
 
 
 
 
 
 
 
 
 
(2,645
)
 
(1.8
)%
 
(1.8
)%
Acquisition related expenses
 
 
 
 
 
 
 
 
 
 
 
 
(108
)
 
(0.1
)%
 
(0.1
)%
  Severance and other expenses
 
 
 
 
 
 
 
 
 
 
 
 
(681
)
 
(0.5
)%
 
(0.5
)%
Non-GAAP Corporate costs
 
 
 
 
 
 
 
 
 
 
 
 
$
16,051

 
 
 
10.8
 %
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Non-GAAP loss from operations
 
 
 
 
 
 
 
 
 
 
 
 
$
(83
)
 
 
 
(0.1
)%

* As adjusted for full retrospective adoption of Accounting Standard Codification ("ASC") 606, "Revenue from Contracts with Customers".
 

13