Omnicell, Inc.
Jul 22, 2004

Omnicell Announces Record Revenue for Second Quarter 2004

MOUNTAIN VIEW, Calif. – July 22, 2004 - Omnicell, Inc. (NASDAQ: OMCL), a leading provider of patient safety solutions preferred by nurses, today announced results for the quarter ended June 30, 2004.

Financial highlights were as follows:

Net income for the quarter was $2.4 million or $0.09 per diluted share, compared to net income of $1.3 million or $0.05 per diluted share for the same period of 2003 and net income of $2.4 million or $0.08 per diluted share for the first quarter of 2004.

For the second quarter of 2004, total revenue was a record $29.2 million, compared to $25.1 million for the same period in 2003 and $27.8 million for the first quarter of 2004.

Total operating margin was $2.5 million, compared to $1.4 million for the same period of 2003 and an operating margin of $2.4 million for the first quarter of 2004.

Gross margin was 60.5% for the second quarter of 2004, compared to 58.2% for the same period in 2003 and 59.7% for the first quarter of 2004.

Total operating expenses were $15.2 million for the second quarter of 2004, compared to $13.3 million for the same period of 2003 and $14.2 million for the first quarter of 2004.

Cash balances as of June 30, 2004, were up by $2.8 million to $36.3 million, compared to $33.5 million as of December 31, 2003.

Other highlights included:

Total backlog as of June 30, 2004 was $46.4 million, compared to $41.7 million as of March 31, 2004, representing an increase of $4.7 million. Backlog increased 42% from the same period of last year.

As of June 30, 2004, we had completed our installation obligation for 30,477 medication and supply dispensing systems at 1,513 healthcare facilities.

Omnicell Chairman, President and CEO Randall A. Lipps, commenting on the current quarter’s business results, said, "We are pleased with the second quarter performance, as we posted record revenues, as well as record bookings. The healthy growth in backlog was driven by several large deals, which reflected continued demand for our wide range of medication-use process solutions, along with renewed demand for our similarly broad range of supply chain management products. During the quarter, we significantly expanded our sales force and we believe that this investment will enable us to grow our business further."

Conference Call Details
Management will report financial results for the second quarter of 2004 on Thursday, July 22, at 2:00 p.m. PDT via conference call. Investors and analysts interested in joining the conference may access the call by dialing 800-257-1836 -- toll-free (domestic) or 303-262-2143 -- direct-dial (international) approximately 10 minutes prior to the scheduled start. A replay of the call will be available from 4:00 p.m. PDT on July 22 through 11:59 p.m. PDT on July 29. Dialing 800-405-2236 -- toll-free (domestic) or 303-590-3000 -- direct-dial (international) and entering the passcode 11003024# for both numbers will access the call replay. On the conference call, management will be discussing certain additional financial and statistical information. That information can be located on the "Investor Relations" page of Omnicell’s Web site at www.omnicell.com.

About Omnicell
Established in 1992, Omnicell (NASDAQ: OMCL) is a leading provider of patient safety solutions preferred by nurses. Improving patient care by enhancing operational efficiency, Omnicell solutions are used throughout the healthcare facility--in the pharmacy, nursing units, surgical services, cath lab, and all the way to the patient’s bedside. The company's MedGuard™ line of solutions for the medication-use process includes systems for physician order management, automated pharmacy retrieval, medication packaging, medication dispensing, and nursing workflow automation with bar code medication administration. For the medical-surgical supply chain, Omnicell's OptiFlex™ product line provides open bar code systems, cabinet-based supply management, integrated open and cabinet-based systems, and Web-based procurement. More than 1,500 healthcare facilities use Omnicell solutions to help reduce medication errors, operate more efficiently, and decrease costs--ultimately contributing to improved clinical and financial outcomes. For more information, 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 necessarily forward-looking. 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. The risk factors are described in the Company’s Securities and Exchange Commission filings and include, without limitation, the continued growth and acceptance of our products and services and the continued growth of the clinical automation and workflow automation market generally, the potential of increasing competition, the ability of the Company to maintain profitability, grow product backlog, retain key personnel, cut expenses, develop new products and integrate acquired products or intellectual property in a timely and cost-effective manner, and improve sales productivity. Prospective investors are cautioned not to place undue reliance on forward-looking statements.

 

OMNICELL, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except per share amounts)
(Unaudited)

  Three months ended
June 30
Change (%) Six months ended
June 30
Change (%)
  2004 2003   2004 2003  
Revenues:            
   Product revenues $ 23,380 $ 20,447   $ 45,607 $ 38,004  
   Service and other revenues 5,827 4,694   11,429 9,212  
      Total revenues 29,207 25,141 16% 57,036 47,216 21%
 
Costs of revenues:            
   Cost of product revenues 9,340 8,819   18,537 16,525  
   Cost of service and other
   revenues
2,185 1,678   4,206 3,425  
      Total cost of revenues 11,525 10,497   22,743 19,950  
 
Gross profit 17,682 14,644 21% 34,293 27,266 26%
 
Operating expenses:            
   Research and development 1,837 2,106   4,203 4,475  
   Selling general and
   administrative
13,218 10,551   25,094 20,422  
   Restructuring and severance
   charges
171 630   171 630  
      Total operating expenses 15,226 13,287 15% 29,468 25,527 15%
 
Income from operations 2,456 1,357   4,825 1,739  
 
Interest and other income 77 136   161 260  
Income and other expense (56) (32)   (58) (77)  
 
Income before provision for income taxes 2,477 1,461   4,928 1,922  
 
Provision for income taxes 104 170   201 186  
 
Net income $ 2,373 $ 1,291 84% $ 4,727 $ 1,736 172%
 
Net income per share - basic $ 0.10 $ 0.06   $ 0.19 $ 0.08  
 
Net income per share - diluted $ 0.09 $ 0.05   $ 0.17 $ 0.07  
 
Weighted average shares outstanding - basic 24,752 22,382 11% 24,527 22,243 10%
 
Weighted average shares outstanding - diluted 27,709 24,646 12% 27,927 23,601 18%

OMNICELL, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands)
 

March 31, December 31, Change
2004 2003 (1) ($) (%)
(Unaudited)
ASSETS
Current assets:
   Cash and cash equivalents  $ 25,196  $ 24,499            697 3%
   Short-term investments            11,015              9,025         1,990 22%
   Accounts receivable, net        13,599            14,529          (930) -6%
   Inventories            10,059    8,783    1,276 15%
   Receivables subject to a sales agreement              2,737              2,737                - 0%
   Other current assets              4,877              3,966            911 23%
      Total current assets         67,483             63,539         3,944 6%
Property and equipment, net              5,600              4,833            767 16%
Long-term receivables subject to a sales agreement              4,352              4,985           (633) -13%
Other assets             13,624             11,110         2,514 23%
         Total assets  $ 91,059  $ 84,467         6,592 8%
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
   Accounts payable  $ 6,301  $ 2,921         3,380 116%
   Accrued liabilities             13,735         15,403 (1,668) -11%
   Deferred service revenue             13,055             12,650            405 3%
   Deferred gross profit              8,450             10,125 (1,675) -17%
   Obligation resulting from sale of receivables              2,737              2,737              - 0%
   Current portion of note payable                     -                 305          (305) -100%
      Total current liabilities             44,278             44,141            137 0%
Long-term obligation resulting from sale of receivables           4,352           4,985         (633) -13%
Other long-term liabilities                 557                 583            (26) -4%
Stockholders' equity             41,872             34,758         7,114 20%
Total liabilities and stockholders' equity  $ 91,059  $ 84,467         6,592 8%


(1) Derived from the December 31, 2003 audited consolidated balance sheet.