Omnicell, Inc.
Jul 28, 2016

Omnicell Achieves Record Revenue in the Second Quarter 2016

Record GAAP revenue of $172.9 million representing 53% year over year growth
Record Non-GAAP revenue of $175.6 million representing 56% year over year growth
Integration of Aesynt progressing as planned and well received by our customers

MOUNTAIN VIEW, Calif., July 28, 2016 /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, 2016

Omnicell, Inc. logo

GAAP results: Revenue for the second quarter of 2016 was $172.9 million, up $1.9 million, or 1.1% from the first quarter of 2016, and up $60.1 million or 53.3% from the second quarter of 2015. Revenue for the six months ended June 30, 2016 was $343.9 million, up $114.9 million or 50.2% from the six months ended June 30, 2015.

Second quarter 2016 net loss as reported in accordance with U.S. generally accepted accounting principles (GAAP) was $(1.2) million, or $(0.03) per diluted share. This compares to GAAP net loss of $(0.4) million, or $(0.01) per diluted share, for the first quarter of 2016, and GAAP net income of $8.8 million, or $0.24 per diluted share, for the second quarter of 2015.

GAAP net loss for the six months ended June 30, 2016 was $(1.5) million, or $(0.04) per diluted share. GAAP net income for the six months ended June 30, 2015 was $15.1 million, or $0.41 per diluted share, which included a $3.4 million gain on business combination of an equity investment.

Non-GAAP results: Non-GAAP revenue for the second quarter of 2016 was $175.6 million, up $1.9 million, or 1.1% from the first quarter of 2016, and up $62.8 million or 55.7% from the second quarter of 2015.

Non-GAAP net income for the second quarter of 2016 was $13.9 million, or $0.38 per diluted share, excluding $5.5 million of stock-based compensation expense, $5.6 million, net of tax effect of $3.5 million, of intangible assets amortization expense, $1.7 million, net of tax effect of $1.0 million, of acquisition related expenses for the Aesynt acquisition, and $0.6 million, net of tax effect of $0.3 million, of inventory fair value adjustments. Non-GAAP net income includes the effect of a deferred revenue fair value adjustment of $1.7 million, net of tax effect of $1.0 million. This compares to non-GAAP net income for the first quarter 2016 of $12.9 million, or $0.35 per diluted share, excluding $3.9 million of stock-based compensation expense, $5.7 million, net of tax effect of $3.5 million, of intangible assets amortization expense, $1.4 million, net of tax effect of $0.9 million, of acquisition related expenses for the Aesynt acquisition, and $0.6 million, net of tax effect of $0.3 million, of inventory fair value adjustments. Non-GAAP net income for the first quarter of 2016 also includes the effect of a deferred revenue fair value adjustment of $1.7 million, net of tax effect of $1.0 million. Non-GAAP net income for the second quarter of 2015 was $10.3 million, or $0.28 per diluted share, which excluded $3.6 million of stock-based compensation expense and $1.3 million, net of tax effect of $0.5 million, of amortization expense for all intangible assets associated with past acquisitions. Non-GAAP net income for the second quarter also excludes a $3.4 million gain on an equity investment in Avantec Healthcare Ltd. 

Non-GAAP net income for the six months ended June 30, 2016 was $26.7 million, or $0.73 per diluted share, excluding $9.4 million of stock-based compensation expense, $11.3 million, net of tax effect of $6.9 million, of intangible assets amortization expense, $3.2 million, net of tax effect of $1.9 million, of acquisition related expenses for the Aesynt acquisition, and $1.1 million, net of tax effect of 0.7 million, of inventory fair value adjustments. Non-GAAP net income includes the effect of a deferred revenue fair value adjustment of $3.3 million, net of tax effect of $2.0 million. This compares to non-GAAP net income of $21.0 million, or $0.57 per diluted share for the six months ended June 30, 2015, which excludes $7.3 million of stock-based compensation expense and $2.1 million, net of tax effect of $0.9 million of amortization expense for intangible assets associated with past acquisitions. Non-GAAP net income for the six months ended June 30, 2015 also excludes a $3.4 million gain on an equity investment in Avantec Healthcare Ltd.

"Once again, Omnicell's second quarter was marked by record revenues bolstered by the strength of our expanded portfolio that delivers our customers unmatched innovation and flexibility," said Randall Lipps, President, CEO and Chairman.  "I am pleased that we have completed the first phase of the Aesynt integration and are seeing health systems, both existing and new customers, assessing their needs for improved efficiency and safety, evaluating our breath of solutions, and choosing Omnicell."

Third Quarter 2016 Guidance

For the third quarter of 2016, the company expects Non-GAAP revenue to be between $176 million and $183 million and Non-GAAP EPS to be between $0.38 and $0.42 per share.

For full year 2016, the Company is re-confirming its 2016 total year guidance which remains unchanged. The Company expects Product bookings to be between $540 million and $560 million. The Company now expects 2016 Non-GAAP revenue to be at the higher end of the range of $695 million to $715 million. The Company expects 2016 Non-GAAP EPS to be between $1.50 and $1.60 per share.

Omnicell Conference Call Information

Omnicell will hold a conference call today, Thursday, July 28, 2016 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 49810388. 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 26, 2016. 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 49810388.

About Omnicell

Since 1992, Omnicell (OMCL) has been creating innovative solutions to improve patient care, anywhere it is delivered. Omnicell is a leading supplier of comprehensive automation and business analytics software for medication and supply management across the entire health care 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. The recent acquisition of Aesynt adds distinct capabilities, particularly in central pharmacy and IV robotics, creating the broadest medication management product portfolio in the industry.

The Omnicell SureMed solution provides innovative medication adherence packaging to help reduce costly hospital readmissions. In addition, these solutions help enable approximately 7,000 institutional and retail pharmacies worldwide to maintain high accuracy and quality standards in medication dispensing and administration while optimizing productivity and controlling costs.

For more information about Omnicell, 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, profit and revenue growth, and the success of Omnicell's strategy for growth, including differentiated products, expansion into new markets and targeted acquisitions. 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, 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, such as Aesynt. 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 (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 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)  Stock-based compensation expense impact of Accounting Standards Codification (ASC) 718. 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) Intangible assets amortization from business acquisitions. 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 our acquisition of Aesynt, 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 our 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 our 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) Acquisitions related expenses. We excluded from our 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. Further, these expenses are not considered by management to reflect the core performance of the business and therefore are excluded from our non-GAAP results.

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 related to ASC 718 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 excluding 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.

 

Omnicell, Inc.

Condensed Consolidated Statements of Operations

(Unaudited, in thousands, except per share data)



Three Months Ended


Six Months Ended


June 30, 2016


March 31, 2016


June 30, 2015


June 30, 2016


June 30, 2015

Revenues:










Product

$

130,674



$

127,895



$

89,154



$

258,569



$

183,263


Services and other revenues

42,233



43,109



23,634



85,342



45,746


Total revenues

172,907



171,004



112,788



343,911



229,009


Cost of revenues:










Cost of product revenues

76,306



71,918



46,203



148,224



91,619


Cost of services and other revenues

18,584



19,141



9,123



37,725



18,243


Total cost of revenues

94,890



91,059



55,326



185,949



109,862


Gross profit

78,017



79,945



57,462



157,962



119,147


Operating expenses:










Research and development

13,794



13,838



8,746



27,632



16,765


Selling, general and administrative

64,341



64,255



39,735



128,596



83,022


Gain on business combination





(3,443)





(3,443)


Total operating expenses

78,135



78,093



45,038



156,228



96,344


(Loss) income from operations

(118)



1,852



12,424



1,734



22,803


Interest and other income (expense), net

(1,881)



(2,171)



(472)



(4,052)



(989)


(Loss) income before provision for income taxes

(1,999)



(319)



11,952



(2,318)



21,814


(Benefit) provision for income taxes

(840)



59



3,201



(781)



6,745


Net (loss) income

$

(1,159)



$

(378)



$

8,751



$

(1,537)



$

15,069


Net (loss) income per share:










Basic

$

(0.03)



$

(0.01)



$

0.24



$

(0.04)



$

0.42


Diluted

$

(0.03)



$

(0.01)



$

0.24



$

(0.04)



$

0.41


Weighted average shares outstanding:










Basic

35,987



35,740



36,120



35,864



36,072


Diluted

35,987



35,740



37,030



35,864



36,987


 

Omnicell, Inc.

Condensed Consolidated Balance Sheets

(Unaudited, in thousands)



June 30, 2016


December 31, 2015





ASSETS

Current assets:




Cash and cash equivalents

$

41,029



$

82,217


Accounts receivable, net

159,453



107,957


Inventories

73,720



46,594


Prepaid expenses

28,690



19,586


Other current assets

9,024



7,774


Total current assets

311,916



264,128


Property and equipment, net

40,503



32,309


Long-term investment in sales-type leases, net

19,711



14,484


Goodwill

311,170



147,906


Intangible assets, net

196,475



89,665


Long-term deferred tax assets

2,920



2,361


Other long-term assets

30,733



27,894


Total assets

$

913,428



$

578,747






LIABILITIES AND STOCKHOLDERS' EQUITY

Current liabilities:




Accounts payable

$

37,365



$

22,646


Accrued compensation

28,014



18,195


Accrued liabilities

32,674



30,133


Long-term debt, current portion, net

8,410




Deferred revenue, net

84,852



53,656


Total current liabilities

191,315



124,630


Long-term, deferred revenue

17,473



17,975


Long-term deferred tax liabilities

62,431



21,822


Other long-term liabilities

12,074



11,932


Long-term debt, net

216,936




Total liabilities

500,229



176,359


Total stockholders' equity

413,199



402,388


Total liabilities and stockholders' equity

$

913,428



$

578,747


 

Omnicell, Inc.

Condensed Consolidated Statements of Cash Flows

(Unaudited, in thousands)



Six months ended June 30,


2016


2015

Operating Activities




Net (loss) income

$

(1,537)



$

15,069


Adjustments to reconcile net (loss) income to net cash provided by operating activities:




Depreciation and amortization

29,197



11,977


Loss (gain) on disposal of fixed assets

1



(5)


Gain on business combination



(3,443)


Provision for receivable allowance

364



480


Share-based compensation expense

9,386



7,301


Income tax benefits from employee stock plans

681



3,087


Excess tax benefits from employee stock plans

(934)



(3,159)


Provision for excess and obsolete inventories

850



168


Deferred income taxes

(3,877)



(1,717)


Amortization of debt financing fees

795




Changes in operating assets and liabilities:




Accounts receivable

(8,139)



(27,676)


Inventories

(7,769)



(9,633)


Prepaid expenses

(4,852)



8,234


Other current assets

78



1,507


Investment in sales-type leases

(6,558)



353


Other long-term assets

1,019



64


Accounts payable

6,736



1,364


Accrued compensation

210



(1,654)


Accrued liabilities

(2,195)



5,752


Deferred revenue

4,895



3,116


Other long-term liabilities

(2,398)



(995)


Net cash provided by operating activities

15,953



10,190


Investing Activities




Purchases of intangible assets, intellectual property and patents

(1,185)



(225)


Software development for external use

(6,681)



(6,127)


Purchases of property and equipment

(5,938)



(3,764)


Business acquisition, net of cash acquired

(271,458)



(23,625)


Net cash used in investing activities

(285,262)



(33,741)


Financing Activities




Proceeds from debt, net

247,051




Repayment of debt and revolving credit facility

(22,500)




Payment for contingent consideration

(3,000)




Proceeds from issuances under stock-based compensation plans

8,639



9,432


Employees' taxes paid related to restricted stock units

(1,563)



(2,046)


Excess tax benefits from employee stock plans

934



3,159


Common stock repurchases



(25,021)


Net cash provided by (used in) financing activities

229,561



(14,476)


Effect of exchange rate changes on cash and cash equivalents

(1,440)



167


Net decrease in cash and cash equivalents

(41,188)



(37,860)


Cash and cash equivalents at beginning of period

82,217



125,888


Cash and cash equivalents at end of period

$

41,029



$

88,028


 

Omnicell, Inc.

Reconciliation of GAAP to Non-GAAP

(Unaudited, in thousands, except per share data)








Three Months Ended


Six Months Ended







June 30, 2016


March 31, 2016


June 30, 2015


June 30, 2016


June 30, 2015
















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







GAAP net (loss) income

$

(1,159)



$

(378)



$

8,751



$

(1,537)



$

15,069


Adjustments:











Share-based compensation expense

5,495



3,891



3,636



9,386



7,301



Amortization of acquired intangibles

9,052



9,159



1,810



18,211



3,041



Acquisition accounting impact related to deferred revenue

2,663



2,663





5,326





Inventory fair value adjustments

920



921





1,841





Acquisitions related expenses*

2,749



2,349





5,098





Gain on business combination





(3,443)





(3,443)



Tax effect of the adjustments above(a)

(5,846)



(5,735)



(485)



(11,581)



(928)


Non-GAAP net income

$

13,874



$

12,870



$

10,269



$

26,744



$

21,040

















Reconciliation of GAAP revenue to non-GAAP revenue:







Revenues


$

172,907



$

171,004



$

112,788



$

343,911



$

229,009



Acquisition accounting impact related to deferred revenue

2,663



2,663





5,326




Non-GAAP revenue

$

175,570



$

173,667



$

112,788



$

349,237



$

229,009

















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







GAAP gross profit

$

78,017



$

79,945



$

57,462



$

157,962



$

119,147


GAAP gross margin

45.1%



46.8%



50.9%



45.9%



52.0%



Share-based compensation expense

644



549



532



1,193



1,049



Amortization of acquired intangibles

5,214



5,211



531



10,425



899



Acquisition accounting impact related to deferred revenue

2,663



2,663





5,326





Inventory fair value adjustments

920



921





1,841





Acquisitions related expenses

227







227




Non-GAAP gross profit

$

87,685



$

89,289



$

58,525



$

176,974



$

121,095


Non-GAAP gross margin

49.9%



51.4%



51.9%



50.7%



52.9%

















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





GAAP operating expenses

$

78,135



$

78,093



$

45,038



$

156,228



$

96,344



GAAP operating expenses % to total revenue

45.2%



45.7%



39.9%



45.4%



42.1%



Share-based compensation expense

(4,851)



(3,342)



(3,104)



(8,193)



(6,252)



Amortization of acquired intangibles

(3,838)



(3,948)



(1,279)



(7,786)



(2,142)



Acquisitions related expenses

(1,727)



(2,349)





(4,076)





Gain on business combination





3,443





3,443


Non-GAAP operating expenses

$

67,719



$

68,454



$

44,098



$

136,173



$

91,393


Non-GAAP operating expenses % to total revenue

38.6%



40.0%



39.1%



39.0%



39.9%










Three Months Ended


Six Months Ended







June 30, 2016


March 31, 2016


June 30, 2015


June 30, 2016


June 30, 2015

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





GAAP (loss) income from operations

$

(118)



$

1,852



$

12,424



$

1,734



$

22,803



GAAP operating income % to total revenue

(0.1)%



1.1%



11.0%



0.5%



10.0%



Share-based compensation expense

5,495



3,891



3,636



9,386



7,301



Amortization of acquired intangibles

9,052



9,159



1,810



18,211



3,041



Acquisition accounting impact related to deferred revenue

2,663



2,663





5,326





Inventory fair value adjustments

920



921





1,841





Acquisitions related expenses

1,954



2,349





4,303




Gain on business combination





(3,443)





(3,443)


Non-GAAP income from operations

$

19,966



$

20,835



$

14,427



$

40,801



$

29,702


Non-GAAP operating income % to total Non-GAAP revenue

11.4%



12.0%



12.8%



11.7%



13.0%

















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



Shares - diluted GAAP

35,987



35,740



37,030



35,864



36,987

















Shares - diluted Non-GAAP

36,649



36,307



37,030



36,488



36,987

















GAAP net (loss) income per share - diluted

$

(0.03)



$

(0.01)



$

0.24



$

(0.04)



$

0.41


Adjustments:











Share-based compensation expense

0.15



0.11



0.10



0.26



0.20



Amortization of acquired intangibles

0.25



0.25



0.05



0.50



0.08



Acquisition accounting impact related to deferred revenue

0.07



0.07





0.15





Inventory fair value adjustments

0.03



0.03





0.05





Acquisitions related expenses

0.08



0.06





0.14





Gain on business combination





(0.10)





(0.10)



Tax effect of the adjustments above(a)

(0.17)



(0.16)



(0.01)



(0.33)



(0.02)


Non-GAAP net income per share - diluted

$

0.38



$

0.35



$

0.28



$

0.73



$

0.57

















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







GAAP net (loss) income

$

(1,159)



$

(378)



$

8,751



$

(1,537)



$

15,069


Add back:











Share-based compensation expense

5,495



3,891



3,636



9,386



7,301



Interest (income) and expense, net

1,348



1,747



84



3,095



183



Depreciation and amortization expense

14,724



14,473



6,264



29,197



11,975



Acquisition accounting impact related to deferred revenue

2,663



2,663





5,326





Inventory fair value adjustments

920



921





1,841





Acquisitions related expenses*

2,749



2,349





5,098





Gain on business combination





(3,443)





(3,443)



Income tax expense

(840)



59



3,201



(781)



6,745


Non-GAAP Adjusted EBITDA (b)

$

25,900



$

25,725



$

18,493



$

51,625



$

37,830



___________________________________________



Included in the Acquisitions related expenses are severance expenses related to the restructuring of $1.7 million for three and six months ended June 30, 2016.



(a)

Tax effects calculated for all adjustments except share based compensation expense, using the estimated annual effective tax rate of 38% for fiscal year 2016.

(b)

Defined as earnings before interest income and expense, taxes, depreciation and amortization, share-based compensation expense, as well as excluding certain non-GAAP adjustments.

 

Omnicell, Inc.

Segmented Information

(Unaudited, in thousands, except for percentages)






Three months ended June 30, 2016


Three Months Ended June 30, 2015


Automation and
Analytics


Medication
Adherence


Total


Automation and

Analytics


Medication

Adherence


Total





Revenues

$

148,660



$

24,247



$

172,907



$

88,701



$

24,087



$

112,788


Cost of revenues

78,366



16,524



94,890



39,403



15,923



55,326


Gross profit

70,294



7,723



78,017



49,298



8,164



57,462


Gross margin %

47.3%



31.9%



45.1%



55.6%



33.9%



50.9%














Operating expenses

49,780



5,771



55,551



25,978



5,910



31,888


Income from segment operations

$

20,514



$

1,952



22,466



$

23,320



$

2,254



25,574


Operating margin %

13.8%



8.1%



13.0%



26.3%



9.4%



22.7%














Corporate costs





22,584







13,150


Loss (income) from operations





$

(118)







$

12,424














 

Omnicell, Inc.

Segmented Information

(Unaudited, in thousands, except for percentages)



Six months ended June 30, 2016


Six months ended June 30, 2015


Automation and
Analytics


Medication
Adherence


Total


Automation and

Analytics


Medication

Adherence


Total





Revenues

$

297,605



$

46,306



$

343,911



$

181,480



$

47,529



$

229,009


Cost of revenues

155,573



30,376



185,949



78,255



31,607



109,862


Gross profit

142,032



15,930



157,962



103,225



15,922



119,147


Gross margin %

47.7%



34.4%



45.9%



56.9%



33.5%



52.0%














Operating expenses

101,985



11,382



113,367



54,567



12,251



66,818


Income from segment operations

$

40,047



$

4,548



$

44,595



$

48,658



$

3,671



52,329


Operating margin %

13.5%



9.8%



13.0%



26.8%



7.7%



22.9%














Corporate costs





42,861







29,526


Income from operations





$

1,734







$

22,803














 

Omnicell, Inc.

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

(Unaudited, in thousands, except for percentages)



Three months ended June 30, 2016


Automation and
Analytics


Medication
Adherence


Total













Revenues

$

148,660





$

24,247





$

172,907




Acquisition accounting impact related to deferred revenue

2,663



1.8%




—%


2,663



1.5%

Non-GAAP Revenues

$

151,323





24,247





$

175,570
















GAAP Gross profit

$

70,294



47.3%


$

7,723



31.9%


$

78,017



45.1%

Stock-based compensation expense

561



0.4%


83



0.3%


644



0.4%

Amortization expense of acquired intangible
   assets

4,882



3.3%


332



1.4%


5,214



3.0%

Acquisition accounting impact related to deferred revenue

2,663



1.8%




—%


2,663



1.5%

Inventory fair value adjustments

920



0.6%




—%


920



0.5%

Acquisitions related expenses

227



0.2%




—%


227



0.1%

Non-GAAP Gross profit

$

79,547



53.5%


$

8,138



33.6%


$

87,685



50.7%













GAAP Operating income

$

20,514



13.8%


$

1,952



8.1%


$

22,466



13.0%

Stock-based compensation expense

2,042



1.4%


240



1.0%


2,282



1.3%

Amortization expense of acquired intangible
   assets

7,739



5.2%


1,313



5.4%


9,052



5.2%

Acquisition accounting impact related to deferred revenue

2,663



1.8%




—%


2,663



1.5%

Inventory fair value adjustments

920



0.6%




—%


920



0.5%

Acquisitions related expenses

1,849



1.2%


56



0.2%


1,905



1.1%

Non-GAAP Operating income

$

35,727



24.0%


$

3,561



14.7%


$

39,288



22.7%













GAAP Corporate costs









$

22,584



13.1%

Stock-based compensation expense









3,213



1.9%

Acquisition-related expenses









49



—%

Non-GAAP Corporate costs









$

19,322



11.2%













Non-GAAP Income from operations









$

19,966



11.4%

 

Omnicell, Inc.

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

(Unaudited, in thousands, except for percentages)



Three Months Ended June 30, 2015


Automation and
Analytics


Medication
Adherence


Total













Revenues

$

88,701





$

24,087





$

112,788
















GAAP Gross profit

$

49,298



55.6%


$

8,164



33.9%


$

57,462



50.9%

Stock-based compensation expense

370



0.4%


162



0.7%


532



0.5%

Amortization expense of acquired intangible
assets

199



0.2%


332



1.4%


531



0.5%

Non-GAAP Gross profit

$

49,867



56.2%


$

8,658



35.9%


$

58,525



51.9%













GAAP Operating income

$

23,320



26.3%


$

2,254



9.4%


$

25,574



22.7%

Stock-based compensation expense

1,207



1.4%


377



1.6%


1,584



1.4%

Amortization expense of acquired intangible
assets

724



0.8%


1,086



4.5%


1,810



1.6%

Gain on business combination

(3,443)



(3.9)%


$

0



—%


(3,443)



(3.1)%

Non-GAAP Operating income

$

21,808



24.6%


$

3,717



15.4%


$

25,525



22.6%













GAAP Corporate costs









$

13,150



11.7%

Stock-based compensation expense









2,052



1.8%

Non-GAAP Corporate costs









$

11,098



9.8%













Non-GAAP Income from operations









$

14,427



12.8%

 

OMCL-E

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SOURCE Omnicell, Inc.

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