Omnicell, Inc.
Jul 27, 2017

Omnicell Achieves Record Revenue in the Second Quarter 2017

GAAP revenue of $180.9 million and GAAP net income per diluted share of $0.02
Non-GAAP revenue of $181.2 million and non-GAAP net income per diluted share of $0.31

MOUNTAIN VIEW, Calif., July 27, 2017 /PRNewswire/ -- Omnicell, Inc. (NASDAQ: OMCL), a leading provider of medication and supply management solutions to healthcare systems, today announced results for its second quarter ended June 30, 2017

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

GAAP results: Revenue for the second quarter of 2017 was $180.9 million, up $30.3 million, or 20.1% from the first quarter of 2017, and up $8.0 million, or 4.6% from the second quarter of 2016. Revenue for the six months ended June 30, 2017 was $331.4 million, down $12.5 million, or 3.63% from the six months ended June 30, 2016.

Second quarter 2017 net income as reported in accordance with U.S. generally accepted accounting principles (GAAP) was $0.8 million, or $0.02 per diluted share. This compares to GAAP net loss of $10.8 million, or $0.29 per diluted share, for the first quarter of 2017, and GAAP net loss of $1.2 million, or $0.03 per diluted share, for the second quarter of 2016.

GAAP net loss for the six months ended June 30, 2017 was $9.9 million, or $0.27 per diluted share. GAAP net loss was $1.5 million, or $0.04 per diluted share, for the six months ended June 30, 2016.

Non-GAAP results: Non-GAAP revenue for the second quarter of 2017 was $181.2 million, up $30.3 million, or 20.1% from the first quarter of 2017, and up $5.6 million, or 3.2% from the second quarter of 2016. Non-GAAP revenue for the six months ended June 30, 2017 was $332.1 million, down $17.2 million, or 4.9% from the six months ended June 30, 2016.

Non-GAAP net income for the second quarter of 2017 was $11.7 million, or $0.31 per diluted share. This compares to non-GAAP net income of $2.1 million, or $0.06 per diluted share, first quarter of 2017 and $13.9 million, or $0.38 per diluted share, for the second quarter of 2016.

Non-GAAP net income for the six months ended June 30, 2017 was $13.8 million, or $0.36 per diluted share. This compares to non-GAAP net income of $26.7 million, or $0.73 per diluted share for the six months ended June 30, 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, and amortization of debt issuance cost.

"Omnicell completed a strong second quarter marked by record revenues and earnings results ahead of expectations," said Randall Lipps, Omnicell president, CEO and chairman. "We are proud of the company's financial performance and our strategic execution aimed at supporting health systems in achieving their patient safety, operational and financial goals."

"I am particularly pleased by the momentum and broad adoption of our recent innovations, including the XT series," he added. "I believe we are positioned well for continued success in the future."

2017 Guidance:

For the third quarter of 2017, the Company expects both GAAP and non-GAAP revenue to be between $188 million and $194 million, and non-GAAP earnings to be between $0.38 and $0.45 per share.

For the year 2017, the Company expects product bookings to be between $570 million and $590 million. The Company expects both GAAP and non-GAAP revenue to be between $720 million and $740 million, and non-GAAP earnings to be between $1.22 and $1.34 per share.

Omnicell Conference Call Information

Omnicell will hold a conference call today, Thursday, July 27, 2017 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 36566159. 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 August 25, 2017. 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 36566159.

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 4,000 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, including Ateb, 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 momentum, pipeline and new sales opportunities, and projected bookings, profit and revenue growth. Risks that contribute to the uncertain nature of the forward-looking statements include our ability to take advantage of the growth opportunities in medication management across the spectrum of healthcare settings from long-term care to home care, our ability to successfully convert product backlog and sales quotes to our XT Series, our ability to execute the manufacturing ramp-up of XT Series, our ability to continue cost reduction efforts, and our ability to implement development and manufacturing Centers of Excellence, unfavorable general economic and market conditions, risks to growth and acceptance of our products and services, including competitive conversions, and to growth of the clinical automation and workflow automation market generally, the potential of increasing competition, potential regulatory changes, the ability of the company to improve sales productivity to grow product bookings, to develop new products and 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 U.S. generally accepted accounting principles. 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 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 the 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 the 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 less acquisitive 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.

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's SEC 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 the remainder of 2017, 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


Six Months Ended


June 30, 2017


March 31, 2017


June 30, 2016


June 30, 2017


June 30, 2016

Revenues:










Product

$

128,056



$

98,930



$

130,674



$

226,986



$

258,569


Services and other revenues

52,829



51,624



42,233



104,453



85,342


   Total revenues

180,885



150,554



172,907



331,439



343,911


Cost of revenues:










Cost of product revenues

81,738



63,588



76,306



145,326



148,224


Cost of services and other revenues

21,172



22,774



18,584



43,946



37,725


   Total cost of revenues

102,910



86,362



94,890



189,272



185,949


Gross profit

77,975



64,192



78,017



142,167



157,962


Operating expenses:










Research and development

16,911



16,803



13,794



33,714



27,632


Selling, general and administrative

63,468



64,625



64,341



128,093



128,596


   Total operating expenses

80,379



81,428



78,135



161,807



156,228


Income (loss) from operations

(2,404)



(17,236)



(118)



(19,640)



1,734


Interest and other income (expense), net

196



(2,456)



(1,881)



(2,260)



(4,052)


Loss before provision for income taxes

(2,208)



(19,692)



(1,999)



(21,900)



(2,318)


Benefit for income taxes

(3,045)



(8,938)



(840)



(11,983)



(781)


Net income (loss)

$

837



$

(10,754)



$

(1,159)



$

(9,917)



$

(1,537)


Net income (loss) per share:










Basic

$

0.02



$

(0.29)



$

(0.03)



$

(0.27)



$

(0.04)


Diluted

$

0.02



$

(0.29)



$

(0.03)



$

(0.27)



$

(0.04)


Weighted average shares outstanding:










Basic

37,250



36,840



35,987



37,046



35,864


Diluted

38,370



36,840



35,987



37,046



35,864


 

Omnicell, Inc.

Condensed Consolidated Balance Sheets

(Unaudited, in thousands)



June 30, 2017


December 31, 2016





ASSETS

Current assets:




Cash and cash equivalents

$

26,936



$

54,488


Accounts receivable, net

151,010



150,303


Inventories

81,523



69,297


Prepaid expenses

26,001



28,646


Other current assets

10,511



12,674


Total current assets

295,981



315,408


Property and equipment, net

40,713



42,011


Long-term investment in sales-type leases, net

17,424



20,585


Goodwill

332,996



327,724


Intangible assets, net

180,206



190,283


Long-term deferred tax assets

5,627



4,041


Other long-term assets

36,954



35,051


Total assets

$

909,901



$

935,103






LIABILITIES AND STOCKHOLDERS' EQUITY

Current liabilities:




Accounts payable

$

53,287



$

27,069


Accrued compensation

31,251



26,722


Accrued liabilities

30,894



31,195


Long-term debt, current portion, net

10,910



8,410


Deferred revenue, net

85,370



87,516


Total current liabilities

211,712



180,912


Long-term, deferred revenue

16,332



17,051


Long-term deferred tax liabilities

38,950



51,592


Other long-term liabilities

9,879



8,210


Long-term debt, net

183,526



245,731


Total liabilities

460,399



503,496


Total stockholders' equity

449,502



431,607


Total liabilities and stockholders' equity

$

909,901



$

935,103


 

Omnicell, Inc.

Condensed Consolidated Statements of Cash Flows

(Unaudited, in thousands)



Six months ended June 30,


2017


2016

Operating Activities




Net loss

$

(9,917)



$

(1,537)


Adjustments to reconcile net income to net cash provided by operating activities:




Depreciation and amortization

25,942



29,197


(Gain) loss on disposal of fixed assets

79



1


Share-based compensation expense

11,056



9,386


Income tax benefits from employee stock plans

11



681


Deferred income taxes

(12,646)



(3,877)


Amortization of debt financing fees

795



795


Changes in operating assets and liabilities:




   Accounts receivable

(770)



(7,775)


   Inventories

(12,226)



(6,919)


   Prepaid expenses

2,645



(4,852)


   Other current assets

202



78


   Investment in sales-type leases

5,482



(6,558)


   Other long-term assets

(34)



1,019


   Accounts payable

23,357



6,736


   Accrued compensation

4,529



210


   Accrued liabilities

2,165



(2,195)


   Deferred revenue

(2,865)



4,895


   Other long-term liabilities

1,119



(2,398)


   Net cash provided by operating activities

38,924



16,887


Investing Activities




Purchases of intangible assets, intellectual property and patents

(160)



(1,185)


Software development for external use

(6,748)



(6,681)


Purchases of property and equipment

(6,493)



(5,938)


Business acquisition, net of cash acquired

(4,446)



(271,458)


Net cash used in investing activities

(17,847)



(285,262)


Financing Activities




Proceeds from debt

10,000



247,051


Repayment of debt and revolving credit facility

(70,500)



(22,500)


Payment for contingent consideration



(3,000)


Proceeds from issuances under stock-based compensation plans

15,783



8,639


Employees' taxes paid related to restricted stock units

(2,638)



(1,563)


Net cash provided by (used in) financing activities

(47,355)



228,627


Effect of exchange rate changes on cash and cash equivalents

(1,274)



(1,440)


Net decrease in cash and cash equivalents

(27,552)



(41,188)


Cash and cash equivalents at beginning of period

54,488



82,217


Cash and cash equivalents at end of period

$

26,936



$

41,029


 

Omnicell, Inc.

Reconciliation of GAAP to Non-GAAP

(Unaudited, in thousands, except per share data and percentage)



Three Months Ended


Six Months Ended


June 30,
2017


March 31,
2017


June 30,
2016


June 30,
2017


June 30,
2016













Reconciliation of GAAP revenue to non-GAAP revenue:









GAAP revenue

$

180,885



$

150,554



$

172,907



$

331,439



$

343,911



Acquisition accounting impact related to deferred revenue

313



313



2,663



626



5,326


Non-GAAP revenue

$

181,198



$

150,867



$

175,570



$

332,065



$

349,237













Reconciliation of GAAP gross profit to non-GAAP gross profit:








GAAP gross profit

$

77,975



$

64,192



$

78,017



$

142,167



$

157,962


GAAP gross margin

43.1%



42.6%



45.1%



42.9%



45.9%



Share-based compensation expense

864



982



644



1,846



1,193



Amortization of acquired intangibles

2,848



2,837



5,214



5,685



10,425



Acquisition accounting impact related to deferred revenue

313



313



2,663



626



5,326



Inventory fair value adjustments





920





1,841



Acquisitions related expenses





28





28



Severance and other expenses*



1,697



199



1,697



199


Non-GAAP gross profit

$

82,000



$

70,021



$

87,685



$

152,021



$

176,974


Non-GAAP gross margin

45.3%



46.4%



49.9%



45.8%



50.7%













Reconciliation of GAAP operating expenses to non-GAAP operating expenses:








GAAP operating expenses

$

80,379



$

81,428



$

78,135



$

161,807



$

156,228


GAAP operating expenses % to total revenue

44.4%



54.1%



45.2%



48.8%



45.4%



Share-based compensation expense

(4,681)



(4,529)



(4,851)



(9,210)



(8,193)



Amortization of acquired intangibles

(3,626)



(3,653)



(3,838)



(7,279)



(7,786)



Acquisitions related expenses



(126)



(223)



(126)



(2,572)



Severance and other expenses*

(970)



(2,332)



(1,504)



(3,302)



(1,504)


Non-GAAP operating expenses

$

71,102



$

70,788



$

67,719



$

141,890



$

136,173


Non-GAAP operating expenses % to total revenue

39.2%



46.9%



38.6%



42.7%



39.0%



          * Other expenses include relocation charge of $102, depreciation adjustment related to purchase price allocation from acquisition of $243, integration consulting of $126 and restructuring rent expense of $485 for the three months ended June 30, 2017. Other expenses include relocation charge of $322 and depreciation adjustment related to purchase price allocation from acquisition of $508 for the six months ended June 30, 2017.

 



Three Months Ended


Six months ended


June 30,
2017


March 31,
2017


June 30,
2016


June 30,
2017


June 30,
2016

Reconciliation of GAAP income (loss) from operations to non-GAAP income (loss) from operations:

GAAP income (loss) from operations

$

(2,404)



$

(17,236)



$

(118)



$

(19,640)



$

1,734


GAAP operating income (loss) % to total revenue

(1.3)%



(11.4)%



(0.1)%



(5.9)%



0.5%



Share-based compensation expense

5,545



5,511



5,495



11,056



9,386



Amortization of acquired intangibles

6,474



6,490



9,052



12,964



18,211



Acquisition accounting impact related to deferred revenue

313



313



2,663



626



5,326



Inventory fair value adjustments





920





1,841



Acquisitions related expenses



126



251



126



2,600



Severance and other expenses

970



4,029



1,703



4,999



1,703


Non-GAAP income (loss) from operations

$

10,898



$

(767)



$

19,966



$

10,131



$

40,801


Non-GAAP operating income (loss) % to total Non-GAAP revenue

6.0%



(0.5)%



11.4%



3.1%



11.7%












Reconciliation of GAAP net income (loss) to non-GAAP net income:




GAAP net income (loss)

$

837



$

(10,754)



$

(1,159)



$

(9,917)



$

(1,537)



Share-based compensation expense

5,545



5,511



5,495



11,056



9,386



Amortization of acquired intangibles

6,474



6,490



9,052



12,964



18,211



Acquisition accounting impact related to deferred revenue

313



313



2,663



626



5,326



Inventory fair value adjustments





920





1,841



Acquisitions related expenses

397



523



1,046



920



3,395



Severance and other expenses

970



4,029



1,703



4,999



1,703



Tax effect of the adjustments above(a)

(2,817)



(4,019)



(5,846)



(6,836)



(11,581)


Non-GAAP net income

$

11,719



$

2,093



$

13,874



$

13,812



$

26,744















Reconciliation of GAAP net income (loss) per share - diluted to non-GAAP net income per share - diluted:







Shares - diluted GAAP

38,370



36,840



35,987



37,046



35,864















Shares - diluted Non-GAAP

38,370



37,782



36,649



38,103



36,488















GAAP net income (loss) per share - diluted

$

0.02



$

(0.29)



$

(0.03)



$

(0.27)



$

(0.04)



Share-based compensation expense

0.14



0.15



0.15



0.29



0.26



Amortization of acquired intangibles

0.17



0.17



0.25



0.34



0.50



Acquisition accounting impact related to deferred revenue

0.01



0.01



0.07



0.02



0.15



Inventory fair value adjustments





0.03





0.05



Acquisitions related expenses

0.01



0.01



0.03



0.02



0.09



Severance and other expenses

0.02



0.11



0.05



0.14



0.05



Tax effect of the adjustments above(a)

(0.06)



(0.10)



(0.17)



(0.18)



(0.33)


Non-GAAP net income per share - diluted

$

0.31



$

0.06



$

0.38



$

0.36



$

0.73
















Reconciliation of GAAP net income (loss) to non-GAAP Adjusted EBITDA(b):









































GAAP net income (loss)

$

837



$

(10,754)



$

(1,159)



$

(9,917)



$

(1,537)



Share-based compensation expense

5,545



5,511



5,495



11,056



9,386



Interest (income) and expense, net

1,311



1,432



1,348



2,743



3,095



Depreciation and amortization expense

13,494



12,448



14,724



25,942



29,197



Acquisition accounting impact related to deferred revenue

313



313



2,663



626



5,326



Inventory fair value adjustments





920





1,841



Acquisitions related expenses

397



523



1,046



920



3,395



Severance expense

728



3,765



1,703



4,493



1,703



Income tax expense

(3,045)



(8,938)



(840)



(11,983)



(781)


Non-GAAP Adjusted EBITDA

$

19,580



$

4,300



$

25,900



$

23,880



$

51,625



          (a) Tax effects calculated for all adjustments except share-based compensation expense, using an estimated annual effective tax rate of 35% for fiscal year 2017 and 38% for fiscal year 2016.

          (b) Defined as earnings before interest income and expense, taxes, depreciation and amortization, as well as excluding certain non-GAAP adjustments.

 

Omnicell, Inc.

Segmented Information

(Unaudited, in thousands, except for percentages)



Three Months Ended June 30, 2017


Three Months Ended June 30, 2016


Automation
and
Analytics


Medication
Adherence


Total


Automation
and

Analytics


Medication

Adherence


Total





Revenues

$

148,427



$

32,458



$

180,885



$

148,660



$

24,247



$

172,907


Cost of revenues

80,716



22,194



102,910



78,366



16,524



94,890


Gross profit

67,711



10,264



77,975



70,294



7,723



78,017


Gross margin %

45.6%



31.6%



43.1%



47.3%



31.9%



45.1%














Operating expenses

49,054



10,099



59,153



49,780



5,771



55,551


Income from segment operations

$

18,657



$

165



$

18,822



$

20,514



$

1,952



$

22,466


Operating margin %

12.6%



0.5%



10.4%



13.8%


8.1%



13.0%














Corporate costs





21,226







22,584


Loss from operations





$

(2,404)







$

(118)














 

Omnicell, Inc.

Segmented Information

(Unaudited, in thousands, except for percentages)



Six Months Ended June 30, 2017


Six Months Ended June 30, 2016


Automation
and
Analytics


Medication
Adherence


Total


Automation
and

Analytics


Medication

Adherence


Total





Revenues

$

272,598



$

58,841



$

331,439



$

297,605



$

46,306



$

343,911


Cost of revenues

149,477



39,795



189,272



155,573



30,376



185,949


Gross profit

123,121



19,046



142,167



142,032



15,930



157,962


Gross margin %

45.2%



32.4%



42.9%



47.7%



34.4%



45.9%














Operating expenses

99,801



21,295



121,096



101,985



11,382



113,367


Income (loss) from segment operations

$

23,320



$

(2,249)



$

21,071



$

40,047



$

4,548



$

44,595


Operating margin %

8.6%



(3.8)%



6.4%



13.5%



9.8%



13.0%














Corporate costs





40,711







42,861


Income (loss) from operations





$

(19,640)







$

1,734














 

Omnicell, Inc.

Segment Information - Non-GAAP Gross Profit and Non-GAAP Operating Margin

(Unaudited, in thousands, except for percentages)



Three Months Ended June 30, 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

$

148,427







$

32,458







$

180,885






Acquisition accounting impact related to deferred revenue



—%


—%


313



1.0%


1.0%


313



0.2%


0.2%

Non-GAAP Revenues

$

148,427







$

32,771







$

181,198
























GAAP Gross profit

$

67,711



45.6%


45.6%


$

10,264



31.6%


31.3%


$

77,975



43.1%


43.0%

Share-based compensation expense

736



0.5%


0.5%


128



0.4%


0.4%


864



0.5%


0.5%

Amortization expense of acquired intangible assets

2,228



1.5%


1.5%


620



1.9%


1.9%


2,848



1.6%


1.6%

Acquisition accounting impact related to deferred revenue



—%


—%


313



1.0%


1.0%


313



0.2%


0.2%

Non-GAAP Gross profit

$

70,675



47.6%


47.6%


$

11,325



34.9%


34.6%


$

82,000



45.3%


45.3%



















GAAP Operating income

$

18,657



12.6%


12.6%


$

165



0.5%


0.5%


$

18,822



10.4%


10.4%

Share-based compensation expense

2,275



1.5%


1.5%


354



1.1%


1.1%


2,629



1.5%


1.5%

Amortization expense of acquired intangible assets

4,545



3.1%


3.1%


1,929



5.9%


5.9%


6,474



3.6%


3.6%

Acquisition accounting impact related to deferred revenue



—%


—%


313



1.0%


1.0%


313



0.2%


0.2%

Severance and other expenses

610



0.4%


0.4%




—%


—%


610



0.3%


0.3%

Non-GAAP Operating income

$

26,087



17.6%


17.6%


$

2,761



8.5%


8.4%


$

28,848



15.9%


15.9%



















GAAP Corporate costs













$

21,226



11.7%


11.7%

Share-based compensation expense













(2,916)



(1.6)%


(1.6)%

Acquisition-related expenses













0



—%


—%

Severance and other expenses













(360)



(0.2)%


(0.2)%

Non-GAAP Corporate costs













$

17,950



9.9%


9.9%



















Non-GAAP Income from operations













$

10,898



6.0%


6.0%

 

Omnicell, Inc.

Segment Information - Non-GAAP Gross Profit and Non-GAAP Operating Margin

(Unaudited, in thousands, except for percentages)



Three Months Ended June 30, 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

$

148,660







$

24,247







$

172,907






Acquisition accounting impact related to deferred revenue

2,663



1.8

%


1.8

%




%


%


2,663



1.5

%


1.5

%

Non-GAAP Revenues

$

151,323







$

24,247







$

175,570
























GAAP Gross profit

$

70,294



47.3

%


46.5

%


$

7,723



31.9

%


31.9

%


$

78,017



45.1

%


44.4

%

Stock-based compensation expense

561



0.4

%


0.4

%


83



0.3

%


0.3

%


644



0.4

%


0.4

%

Amortization expense of acquired intangible assets

4,882



3.3

%


3.2

%


332



1.4

%


1.4

%


5,214



3.0

%


3.0

%

Acquisition accounting impact related to deferred revenue

2,663



1.8

%


1.8

%




%


%


2,663



1.5

%


1.5

%

Inventory fair value adjustments

920



0.6

%


0.6

%




%


%


920



0.5

%


0.5

%

Acquisitions related expenses

28



%


%




%


%


28



%


%

  Severance expenses

199



0.1

%


0.1

%








199



0.1

%


0.1

%

Non-GAAP Gross profit

$

79,547



53.5

%


52.6

%


$

8,138



33.6

%


33.6

%


$

87,685



50.7

%


49.9

%



















GAAP Operating income

$

20,514



13.8

%


13.6

%


$

1,952



8.1

%


8.1

%


$

22,466



13.0

%


12.8

%

Stock-based compensation expense

2,042



1.4

%


1.3

%


240



1.0

%


1.0

%


2,282



1.3

%


1.3

%

Amortization expense of acquired intangible assets

7,739



5.2

%


5.1

%


1,313



5.4

%


5.4

%


9,052



5.2

%


5.2

%

Acquisition accounting impact related to deferred revenue

2,663



1.8

%


1.8

%




%


%


2,663



1.5

%


1.5

%

Inventory fair value adjustments

920



0.6

%


0.6

%




%


%


920



0.5

%


0.5

%

Acquisitions related expenses

259



0.2

%


0.2

%




%


%


259



0.1

%


0.1

%

  Severance expenses

1,590



1.1

%


1.1

%


56



0.2

%


0.2

%


1,646



1.0

%


0.9

%

Non-GAAP Operating income

$

35,727



24.0

%


23.6

%


$

3,561



14.7

%


14.7

%


$

39,288



22.7

%


22.4

%



















GAAP Corporate costs













$

22,584



13.1

%


12.9

%

Stock-based compensation expense













3,213



1.9

%


1.8

%

Acquisition related expenses













(8)



%


%

  Severance expenses













57



%


%

Non-GAAP Corporate costs













$

19,322



11.2

%


11.0

%



















Non-GAAP Income from operations













$

19,966



11.4

%


11.4

%

 

OMCL-E

 

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SOURCE Omnicell, Inc.

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