Document
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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): July 25, 2019

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:

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

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

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

Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Securities registered pursuant to Section 12(b) of the Act:
Title of each class
 
Name of each exchange on which registered
 
Ticker Symbol
Common Stock, $0.001 par value
 
NASDAQ Global Select Market
 
OMCL

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
 
 
 
 
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.
 
 






Item 2.02 Results of Operations and Financial Condition

On July 25, 2019, Omnicell, Inc. issued a press release announcing its financial results for the quarter ended June 30, 2019. 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
 

 







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.
Date: July 25, 2019
/s/ Peter J. Kuipers
 
Peter J. Kuipers,
 
Executive Vice President and Chief Financial Officer



 



Exhibit


Exhibit 99.1

http://api.tenkwizard.com/cgi/image?quest=1&rid=23&ipage=13022906&doc=8

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


Omnicell Reports Results for Second Quarter 2019

Record GAAP and non-GAAP revenues of $217.4 million, up 15.2% year-over-year
GAAP net income per diluted share of $0.37, up 131.3% year-over-year
Non-GAAP net income per diluted share of $0.67, up 45.7% year-over-year

MOUNTAIN VIEW, Calif. -- July 25, 2019 -- Omnicell, Inc. (NASDAQ: OMCL), a leading provider of medication management solutions and adherence tools for healthcare systems and pharmacies, today announced results for its second quarter ended June 30, 2019.
GAAP Results
GAAP revenues for the second quarter of 2019 were $217.4 million, up $28.7 million, or 15.2% from the second quarter of 2018. GAAP revenues for the six months ended June 30, 2019 were $419.9 millionup $48.6 million, or 13.1%, from the six months ended June 30, 2018.
Second quarter 2019 GAAP net income as reported was $16.0 million, or $0.37 per diluted share. This compares to GAAP net income of $6.6 million, or $0.16 per diluted share, for the second quarter of 2018.
GAAP net income for the six months ended June 30, 2019 was $19.3 million, or $0.45 per diluted share. This compares to GAAP net income of $9.3 million, or $0.23 per diluted share, for the six months ended June 30, 2018.
Non-GAAP Results
Non-GAAP revenues for the second quarter of 2019 were $217.4 million, up $28.7 million, or 15.2%, from the second quarter of 2018. Non-GAAP revenues for the six months ended June 30, 2019 were $419.9 million, up $48.6 million, or 13.1%, from the six months ended June 30, 2018.
Non-GAAP net income for the second quarter of 2019 was $28.7 million, or $0.67 per diluted share. This compares to non-GAAP net income of $18.4 million, or $0.46 per diluted share, for the second quarter of 2018.
Non-GAAP net income for the six months ended June 30, 2019 was $54.5 million, or $1.28 per diluted share. This compares to non-GAAP net income of $29.8 million, or $0.75 per diluted share, for the six months ended June 30, 2018.
Non-GAAP net income for each period excludes, when applicable, the effect of share-based compensation expense, amortization expense of acquired intangible assets, acquisition-related expenses, fair value adjustments related to business acquisitions, restructuring and severance-related expenses, tax reform and restructuring income tax benefits and expenses, contingent gains, and amortization of debt issuance cost.
“As we enter the second half of 2019, I’m thrilled to see our Autonomous Pharmacy vision coming to life,” said Randall Lipps, chairman, president, chief executive officer, and founder of Omnicell. “Together with our health system and retail pharmacy partners, we are accelerating the value creation for the industry by transforming the pharmacy care delivery model, revolutionizing the way medications are delivered, reducing costs, and ultimately improving the lives of patients, clinicians, and pharmacists.”

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2019 Guidance
For the third quarter of 2019, the Company expects non-GAAP total revenues to be between $227 million and $233 million. The Company expects non-GAAP product revenues to be between $168 million and $173 million, and non-GAAP service revenues to be between $59 million and $60 million. The Company expects third quarter 2019 non-GAAP earnings to be between $0.67 and $0.72 per share.
For the year 2019, the Company expects product bookings to be between $765 million and $790 million. The Company expects non-GAAP total revenues to be between $886 million and $900 million. The Company expects non-GAAP product revenues to be between $653 million and $663 million, and non-GAAP service revenues to be between $233 million and $237 million. The Company expects 2019 non-GAAP earnings to be between $2.65 and $2.82 per share.
The table below summarizes 2019 guidance outlined above.
 
Q3'19
2019
Product Bookings
Not provided
$765 million - $790 million
Non-GAAP Total Revenues
$227 million - $233 million
$886 million - $900 million
Non-GAAP Product Revenues
$168 million - $173 million
$653 million - $663 million
Non-GAAP Service Revenues
$59 million - $60 million
$233 million - $237 million
Non-GAAP EPS
$0.67 - $0.72
$2.65 - $2.82
Omnicell Conference Call Information
Omnicell will hold a conference call today, Thursday, July 25, 2019 at 1:30 p.m. PT to discuss second quarter financial results. The conference call can be monitored by dialing 1-800-696-5518 within the U.S. or 1-706-758-4883 for all other locations. The Conference ID # is 5149909. Internet users can access the conference call at http://ir.omnicell.com/communications/events-presentations. 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 August 24, 2019. 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 5149909.
 
About Omnicell
Since 1992, Omnicell has been inspired to create safer and more efficient ways to manage medications across all care settings. Through our industry-leading medication management platform that spans the continuum of care, Omnicell is developing a vision for a fully automated infrastructure, powered by a cloud data platform that supports improved patient care, fewer errors, enhanced safety, and new opportunities for growth.
Omnicell's vision for the Autonomous Pharmacy integrates a comprehensive set of solutions across three key areas: Automation solutions designed to digitize and streamline workflows; Intelligence that provides actionable insights to better understand medication usage and improve pharmacy supply chain management; and Work - expert services that serve as an extension of pharmacy operations to support improved efficiency, regulatory compliance, and patient outcomes.
Over 5,500 facilities worldwide use Omnicell automation and analytics solutions to help increase operational efficiency, reduce medication errors, deliver actionable intelligence, and improve patient safety. More than 40,000 institutional and retail pharmacies across North America and the United Kingdom leverage Omnicell's innovative medication adherence solutions designed to improve patient engagement and adherence to prescriptions, helping to reduce costly hospital readmissions.
To learn more about Omnicell and our Autonomous Pharmacy vision, 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 projected bookings, revenues and earnings per share; pipeline; planned new products and services; new sales opportunities, and statements about Omnicell’s strategy, objectives, and vision. Risks that contribute to the uncertain nature of the forward-looking statements include (i) Omnicell's ability to take advantage of the growth opportunities in medication management

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across the spectrum of healthcare settings from hospital to home, (ii) Omnicell's ability to develop and commercialize new products, including the XR2 Automated Central Pharmacy System and the IVX Workflow semi-automated workflow solution, and enhance existing products, (iii) Omnicell's ability to deliver on our vision of the Autonomous Pharmacy and the impact that advanced automation, data intelligence, and expert services will have on patient care, (iv) unfavorable general economic and market conditions, (v) risks to growth and acceptance of Omnicell's products and services, including competitive conversions, (vi) growth of the clinical automation and workflow automation market generally, (vii) potential of increasing competition, (viii) potential regulatory changes, (ix) Omnicell's ability to improve sales productivity to grow product bookings, and (x) Omnicell's ability to acquire companies, businesses, or technologies and successfully integrate such acquisitions. These and other risks and uncertainties are described more fully in Omnicell’s most recent filings with the Securities and Exchange Commission (“SEC”). Prospective investors are cautioned not to place undue reliance on forward-looking statements. All forward-looking statements contained in this press release speak only as of the date on which they were made. Omnicell undertakes no obligation to update such statements to reflect events that occur or circumstances that exist after the date on which they were made.
Use of Non-GAAP Financial Information
This press release contains financial measures that are not calculated in accordance with GAAP. Our management evaluates and makes operating decisions using various performance measures. In addition to Omnicell’s GAAP results, we also consider non-GAAP revenues, non-GAAP gross profit, non-GAAP operating expenses, non-GAAP net income, and non-GAAP net income per diluted share. Additionally, we calculate adjusted EBITDA (another non-GAAP measure) by means of adjustments to GAAP net income. These non-GAAP results should not be considered as an alternative to gross profit, operating expenses, net income, net income per diluted share, or any other performance measure derived in accordance with GAAP. We present these non-GAAP results because we consider them to be important supplemental measures of Omnicell’s performance.
Our non-GAAP revenues, non-GAAP gross profit, non-GAAP operating expenses, non-GAAP net income, and non-GAAP net income per diluted share are exclusive of certain items to facilitate management’s review of the comparability of Omnicell’s core operating results on a period-to-period basis because such items are not related to Omnicell’s ongoing core operating results as viewed by management. We define our “core operating results” as those revenues recorded in a particular period and the expenses incurred within that period that directly drive operating income in that period. Management uses these non-GAAP financial measures in making operating decisions because, in addition to meaningful supplemental information regarding operating performance, the measures give us a better understanding of how we should invest in research and development, fund infrastructure growth, and evaluate the effectiveness of marketing strategies. In calculating the above non-GAAP results, management specifically adjusted for the following excluded items:
a)
Share-based compensation expense. We excluded from our non-GAAP results the expense related to equity-based compensation plans as they represent expenses that do not require cash settlement from Omnicell.
b)
Amortization of acquired intangible assets. We excluded from our non-GAAP results the intangible assets amortization expense resulting from our past acquisitions. These non-cash charges are not considered by management to reflect the core cash-generating performance of the business and therefore are excluded from our non-GAAP results.
c)
Amortization of debt issuance cost. Debt issuance cost represents costs associated with the issuance of Term Loan and Revolving Line of Credit facilities. The cost includes underwriting fees, original issue discount, ticking fee, and legal fees. This non-cash expense is not considered by management to reflect the core cash-generating performance of the business and therefore is excluded from our non-GAAP results.
d)
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.
e)
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.
f)
Tax impact from intellectual property (“IP”) restructuring. We excluded from our non-GAAP results the tax impacts related to IP restructuring. 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.
g)
Contingent gain. We excluded from our non-GAAP results the contingent gain related to a settlement agreement associated with the Ateb acquisition. This contingent gain is unrelated to our ongoing operations, and we do not expect it to occur in

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the ordinary course of business. We believe that excluding this contingent gain provides more meaningful comparisons of the financial results to our historical operations and forward-looking guidance, and the financial results of peer companies.
Management adjusts for the above items because management believes that, in general, these items possess one or more of the following characteristics: their magnitude and timing is largely outside of Omnicell’s control; they are unrelated to the ongoing operation of the business in the ordinary course; they are unusual and we do not expect them to occur in the ordinary course of business; or they are non-operational, or non-cash expenses involving stock compensation plans or other items.
We believe that the presentation of these non-GAAP financial measures is warranted for several reasons: 
a)
Such non-GAAP financial measures provide an additional analytical tool for understanding Omnicell’s financial performance by excluding the impact of items which may obscure trends in the core operating results of the business. 
b)
Since we have historically reported non-GAAP results to the investment community, we believe the inclusion of non-GAAP numbers provides consistency and enhances investors’ ability to compare our performance across financial reporting periods.
c)
These non-GAAP financial measures are employed by Omnicell’s management in its own evaluation of performance and are utilized in financial and operational decision making processes, such as budget planning and forecasting.
d)
These non-GAAP financial measures facilitate comparisons to the operating results of other companies in our industry, which use similar financial measures to supplement their GAAP results, thus enhancing the perspective of investors who wish to utilize such comparisons in their analysis of our performance.
Set forth below are additional reasons why share-based compensation expense is excluded from our non-GAAP financial measures:
i)
While share-based compensation calculated in accordance with Accounting Standard Codification (“ASC”) 718 constitutes an ongoing and recurring expense of Omnicell, it is not an expense that requires cash settlement by Omnicell. We therefore exclude these charges for purposes of evaluating core operating results. Thus, our non-GAAP measurements are presented exclusive of share-based compensation expense to assist management and investors in evaluating our core operating results. 
ii)
We present ASC 718 share-based payment compensation expense in our reconciliation of non-GAAP financial measures on a pre-tax basis because the exact tax differences related to the timing and deductibility of share-based compensation under ASC 718 are dependent upon the trading price of Omnicell’s common stock and the timing and exercise by employees of their stock options. As a result of these timing and market uncertainties, the tax effect related to share-based compensation expense would be inconsistent in amount and frequency and is therefore excluded from our non-GAAP results. 
Our adjusted EBITDA calculation is defined as earnings before interest income and expense, taxes, depreciation and amortization, and non-cash expenses, including ASC 718 share-based compensation expense, as well as certain non-GAAP adjustments.
As stated above, we present non-GAAP financial measures because we consider them to be important supplemental measures of performance. However, non-GAAP financial measures have limitations as an analytical tool and should not be considered in isolation or as a substitute for Omnicell’s GAAP results. In the future, we expect to incur expenses similar to certain of the non-GAAP adjustments described above and expect to continue reporting non-GAAP financial measures excluding such items. Some of the limitations in relying on non-GAAP financial measures are: 
a)
Omnicell’s stock option and stock purchase plans are important components of incentive compensation arrangements and will be reflected as expenses in Omnicell’s GAAP results for the foreseeable future under ASC 718. 
b)
Other companies, including companies in Omnicell’s industry, may calculate non-GAAP financial measures differently than Omnicell, limiting their usefulness as a comparative measure.
Pursuant to the requirements of SEC Regulation G, a detailed reconciliation between Omnicell’s non-GAAP and GAAP financial results is set forth in the financial tables at the end of this press release. Investors are advised to carefully review and consider this information strictly as a supplement to the GAAP results that are contained in this press release and in Omnicell’s SEC filings.
Our 2019 guidance for non-GAAP earnings per share, as well as certain projections to be discussed in the conference call noted above, exclude “certain items,” which include but are not limited to: unusual gains and losses; costs associated with future restructurings; acquisition-related expenses; and certain tax and litigation outcomes. We do not provide a reconciliation of non-GAAP earnings per share guidance to the comparable GAAP measure as these items are inherently uncertain and difficult to estimate, and cannot be predicted without unreasonable effort. We believe such a reconciliation would imply a degree of precision that could be confusing to investors. These items may also have a material impact on GAAP earnings per share in future periods.

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

 
Three months ended June 30,
 
Six months ended June 30,
 
2019
 
2018
 
2019
 
2018
Revenues:
 
 
 
 
 
 
 
Product revenues
$
158,379

 
$
134,636

 
$
303,989

 
$
265,295

Services and other revenues
59,034

 
54,037

 
115,941

 
105,997

Total revenues
217,413

 
188,673

 
419,930

 
371,292

Cost of revenues:
 
 
 
 
 
 
 
Cost of product revenues
84,583

 
75,076

 
163,394

 
150,493

Cost of services and other revenues
28,785

 
24,814

 
55,374

 
49,561

Total cost of revenues
113,368

 
99,890

 
218,768

 
200,054

Gross profit
104,045

 
88,783

 
201,162

 
171,238

Operating expenses:
 
 
 
 
 
 
 
Research and development
16,848

 
15,512

 
32,926

 
32,049

Selling, general, and administrative
68,434

 
65,937

 
136,712

 
131,222

Total operating expenses
85,282

 
81,449

 
169,638

 
163,271

Income from operations
18,763

 
7,334

 
31,524

 
7,967

Interest and other income (expense), net
(1,629
)
 
(896
)
 
(3,039
)
 
(3,625
)
Income before provision for income taxes
17,134

 
6,438

 
28,485

 
4,342

Provision for (benefit from) income taxes
1,158

 
(150
)
 
9,225

 
(4,966
)
Net income
$
15,976

 
$
6,588

 
$
19,260

 
$
9,308

Net income per share:
 
 
 
 
 
 
 
Basic
$
0.39

 
$
0.17

 
$
0.47

 
$
0.24

Diluted
$
0.37

 
$
0.16

 
$
0.45

 
$
0.23

Weighted-average shares outstanding:
 
 
 
 
 
 
 
Basic
41,371

 
38,970

 
41,033

 
38,804

Diluted
42,945

 
40,000

 
42,646

 
39,854


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Omnicell, Inc.
Condensed Consolidated Balance Sheets
(Unaudited, in thousands)
 
June 30,
2019
 
December 31,
2018
ASSETS
Current assets:
 
 
 
Cash and cash equivalents
$
87,482

 
$
67,192

Accounts receivable and unbilled receivables, net
205,353

 
196,238

Inventories
103,906

 
100,868

Prepaid expenses
19,679

 
20,700

Other current assets
13,419

 
12,136

Total current assets
429,839

 
397,134

Property and equipment, net
52,847

 
51,500

Long-term investment in sales-type leases, net
21,041

 
17,082

Operating lease right-of-use assets
61,482

 

Goodwill
335,699

 
335,887

Intangible assets, net
134,101

 
143,686

Long-term deferred tax assets
31,195

 
15,197

Prepaid commissions
44,607

 
46,143

Other long-term assets
86,167

 
74,613

Total assets
$
1,196,978

 
$
1,081,242

 
 
 
 
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
 
 
 
Accounts payable
$
40,183

 
$
38,038

Accrued compensation
33,619

 
41,660

Accrued liabilities
54,570

 
43,047

Deferred revenues, net
83,012

 
81,835

Total current liabilities
211,384

 
204,580

Long-term deferred revenues
9,658

 
10,582

Long-term deferred tax liabilities
61,292

 
41,484

Long-term operating lease liabilities
55,237

 

Other long-term liabilities
9,603

 
9,562

Long-term debt, net
76,562

 
135,417

Total liabilities
423,736

 
401,625

Total stockholders’ equity
773,242

 
679,617

Total liabilities and stockholders’ equity
$
1,196,978

 
$
1,081,242


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Omnicell, Inc.
Condensed Consolidated Statements of Cash Flows
(Unaudited, in thousands)
 
Six months ended June 30,
 
2019
 
2018
Operating Activities
 
 
 
Net income
$
19,260

 
$
9,308

Adjustments to reconcile net income to net cash provided by operating activities
 
 
 
Depreciation and amortization
25,874

 
24,829

Loss on disposal of property and equipment
399

 

Share-based compensation expense
16,670

 
13,766

Deferred income taxes
3,810

 
(6,655
)
Amortization of operating lease right-of-use assets
5,226

 

Amortization of debt financing fees
1,145

 
1,145

Changes in operating assets and liabilities:
 
 
 
Accounts receivable and unbilled receivables
(9,244
)
 
15,476

Inventories
(4,466
)
 
(9,789
)
Prepaid expenses
1,021

 
2,126

Other current assets
(830
)
 
(2,283
)
Investment in sales-type leases
(4,412
)
 
(1,838
)
Prepaid commissions
1,536

 
2,812

Other long-term assets
3,061

 
(2,797
)
Accounts payable
2,066

 
(12,229
)
Accrued compensation
(8,041
)
 
3,927

Accrued liabilities
1,810

 
(2,574
)
Deferred revenues
253

 
5,336

Operating lease liabilities
(5,269
)
 

Other long-term liabilities
3,891

 
167

Net cash provided by operating activities
53,760

 
40,727

Investing Activities
 
 
 
Software development for external use
(22,581
)
 
(13,091
)
Purchases of property and equipment
(9,369
)
 
(14,985
)
Net cash used in investing activities
(31,950
)
 
(28,076
)
Financing Activities
 
 
 
Repayment of debt and revolving credit facility
(60,000
)
 
(12,500
)
At the market offering, net of offering costs
37,806

 

Proceeds from issuances under stock-based compensation plans
25,333

 
16,117

Employees’ taxes paid related to restricted stock units
(4,722
)
 
(3,062
)
Net cash (used in) provided by financing activities
(1,583
)
 
555

Effect of exchange rate changes on cash and cash equivalents
63

 
538

Net increase in cash and cash equivalents
20,290

 
13,744

Cash and cash equivalents at beginning of period
67,192

 
32,424

Cash and cash equivalents at end of period
$
87,482

 
$
46,168


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Omnicell, Inc.
Reconciliation of GAAP to Non-GAAP
(Unaudited, in thousands, except per share data and percentage)
 
Three months ended June 30,
 
Six months ended June 30,
 
2019
 
2018
 
2019
 
2018
 
 
 
 
 
 
 
 
Reconciliation of GAAP revenues to non-GAAP revenues:
 
 
 
 
 
 
 
GAAP revenues
$
217,413

 
$
188,673

 
$
419,930

 
$
371,292

Non-GAAP revenues
$
217,413

 
$
188,673

 
$
419,930

 
$
371,292

 
 
 
 
 
 
 
 
Reconciliation of GAAP gross profit to non-GAAP gross profit:
 
 
 
 
 
GAAP gross profit
$
104,045

 
$
88,783

 
$
201,162

 
$
171,238

GAAP gross margin
47.9%
 
47.1%
 
47.9%
 
46.1%
Share-based compensation expense
1,416

 
1,177

 
2,878

 
2,196

Amortization of acquired intangibles
2,044

 
2,756

 
4,110

 
5,547

Non-GAAP gross profit
$
107,505

 
$
92,716

 
$
208,150

 
$
178,981

Non-GAAP gross margin
49.4%
 
49.1%
 
49.6%
 
48.2%
 
 
 
 
 
 
 
 
Reconciliation of GAAP operating expenses to non-GAAP operating expenses:
 
 
 
 
GAAP operating expenses
$
85,282

 
$
81,449

 
$
169,638

 
$
163,271

GAAP operating expenses % to total revenues
39.2%
 
43.2%
 
40.4%
 
44.0%
Share-based compensation expense
(6,844
)
 
(6,061
)
 
(13,792
)
 
(11,570
)
Amortization of acquired intangibles
(2,630
)
 
(3,126
)
 
(5,346
)
 
(6,364
)
Severance and other expenses
(440
)
 
(1,735
)
 
(726
)
 
(3,247
)
Non-GAAP operating expenses
$
75,368

 
$
70,527

 
$
149,774

 
$
142,090

Non-GAAP operating expenses % to total non-GAAP revenues
34.7%
 
37.4%
 
35.7%
 
38.3%
 
 
 
 
 
 
 
 
Reconciliation of GAAP income from operations to non-GAAP income from operations:
GAAP income from operations
$
18,763

 
$
7,334

 
$
31,524

 
$
7,967

GAAP operating income % to total revenues
8.6%
 
3.9%
 
7.5%
 
2.1%
Share-based compensation expense
8,260

 
7,238

 
16,670

 
13,766

Amortization of acquired intangibles
4,674

 
5,882

 
9,456

 
11,911

Severance and other expenses
440

 
1,735

 
726

 
3,247

Non-GAAP income from operations
$
32,137

 
$
22,189

 
$
58,376

 
$
36,891

Non-GAAP operating income % to total non-GAAP revenues
14.8%
 
11.8%
 
13.9%
 
9.9%

8



Omnicell, Inc.
Reconciliation of GAAP to Non-GAAP
(Unaudited, in thousands, except per share data and percentage)
 
Three months ended June 30,
 
Six months ended June 30,
 
2019
 
2018
 
2019
 
2018
Reconciliation of GAAP net income to non-GAAP net income:
GAAP net income
$
15,976

 
$
6,588

 
$
19,260

 
$
9,308

Tax benefit for restructuring activity

 

 

 
(4,205
)
Tax impact of IP restructuring

 

 
9,624

 

Share-based compensation expense
8,260

 
7,238

 
16,670

 
13,766

Amortization of acquired intangibles
4,674

 
5,882

 
9,456

 
11,911

Severance and other expenses(a)
1,013

 
2,308

 
1,872

 
4,393

Contingent gain

 
(2,456
)
 

 
(2,456
)
Tax effect of the adjustments above(b)
(1,194
)
 
(1,204
)
 
(2,378
)
 
(2,907
)
Non-GAAP net income
$
28,729

 
$
18,356

 
$
54,504

 
$
29,810

 
 
 
 
 
 
 
 
Reconciliation of GAAP net income per share - diluted to non-GAAP net income per share - diluted:
Shares - diluted GAAP
42,945

 
40,000

 
42,646

 
39,854

 
 
 
 
 
 
 
 
Shares - diluted Non-GAAP
42,945

 
40,000

 
42,646

 
39,854

 
 
 
 
 
 
 
 
GAAP net income per share - diluted
$
0.37

 
$
0.16

 
$
0.45

 
$
0.23

Tax benefit for restructuring activity

 

 

 
(0.11
)
Tax impact of IP restructuring

 

 
0.23

 

Share-based compensation expense
0.19

 
0.18

 
0.39

 
0.35

Amortization of acquired intangibles
0.11

 
0.15

 
0.22

 
0.30

Severance and other expenses
0.03

 
0.06

 
0.05

 
0.11

Contingent gain

 
(0.06
)
 

 
(0.06
)
Tax effect of the adjustments above(b)
(0.03
)
 
(0.03
)
 
(0.06
)
 
(0.07
)
Non-GAAP net income per share - diluted
$
0.67

 
$
0.46

 
$
1.28

 
$
0.75

 
 
 
 
 
 
 
 
Reconciliation of GAAP net income to non-GAAP Adjusted EBITDA(c):
GAAP net income
$
15,976

 
$
6,588

 
$
19,260

 
$
9,308

Share-based compensation expense
8,260

 
7,238

 
16,670

 
13,766

Interest (income) and expense, net
687

 
1,615

 
1,393

 
3,387

Depreciation and amortization expense
13,237

 
12,519

 
25,874

 
24,829

Severance and other expenses
1,013

 
2,308

 
1,872

 
4,393

Contingent gain

 
(2,456
)
 

 
(2,456
)
Income tax expense (benefit)
1,158

 
(150
)
 
9,225

 
(4,966
)
Non-GAAP adjusted EBITDA
$
40,331

 
$
27,662

 
$
74,294

 
$
48,261

(a) 
For the three months ended June 30, 2019, other expenses include $0.4 million and $0.2 million of amortization of debt issuance costs related to prior acquisitions and credit facilities amendments, respectively, and $0.4 million of tax restructuring costs. For the three months ended June 30, 2018, other expenses include $0.2 million of consulting-related restructuring expenses, and $0.4 million and $0.2 million of amortization of debt issuance costs related to prior acquisitions and credit facilities amendments, respectively.
(b) 
Tax effects calculated for all adjustments except tax benefits and expenses, and share-based compensation expense, using an estimated annual effective tax rate of 21% for both fiscal years 2019 and 2018.
(c) 
Defined as earnings before interest income and expense, taxes, depreciation and amortization, share-based compensation, as well as excluding certain non-GAAP adjustments.

9