Omnicell, Inc.
Oct 27, 2016

Omnicell Achieves Record Revenue in the Third Quarter 2016

Record GAAP revenue of $176.7 million representing 41% year over year growth
Record Non-GAAP revenue of $179.4 million representing 43% year over year growth

MOUNTAIN VIEW, Calif., Oct. 27, 2016 /PRNewswire/ -- Omnicell, Inc. (NASDAQ: OMCL), a leading provider of medication and supply management solutions to healthcare systems, today announced results for its third quarter ended September 30, 2016

Omnicell, Inc. logo.

GAAP results: Revenue for the third quarter of 2016 was $176.7 million, up $3.8 million, or 2.2% from the second quarter of 2016, and up $51.5 million or 41.1% from the third quarter of 2015. Revenue for the nine months ended September 30, 2016 was $520.6 million, up $166.4 million or 47.0% from the nine months ended September 30, 2015.

Third quarter 2016 net income as reported in accordance with U.S. generally accepted accounting principles (GAAP) was $2.0 million, or $0.05 per diluted share. This compares to GAAP net loss of $(1.2) million, or $(0.03) per diluted share, for the second quarter of 2016, and GAAP net income of $8.0 million, or $0.22 per diluted share, for the third quarter of 2015.

GAAP net income for the nine months ended September 30, 2016 was $0.4 million, or $0.01 per diluted share. GAAP net income for the nine months ended September 30, 2015 was $23.1 million, or $0.63 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 third quarter of 2016 was $179.4 million, up $3.8 million, or 2.2% from the second quarter of 2016, and up $54.2 million or 43.3% from the third quarter of 2015.

Non-GAAP net income for the third quarter of 2016 was $14.9 million, or $0.40 per diluted share, excluding $4.7 million of stock-based compensation expense, $5.5 million, net of tax effect of $3.4 million, of intangible assets amortization expense, $0.5 million, net of tax effect of $0.3 million, of acquisition related expenses, 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 second quarter 2016 of $14.0 million, or $0.38 per diluted share, excluding $5.5 million of stock-based compensation expense, $5.6 million, net of tax effect of $3.4 million, of intangible assets amortization expense, $1.9 million, net of tax effect of $1.1 million, of acquisition related expenses and $0.6 million, net of tax effect of $0.3 million, of inventory fair value adjustments. Non-GAAP net income for the second 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 third quarter of 2015 was $13.2 million, or $0.36 per diluted share, which excluded $4.0 million of stock-based compensation expense and $1.2 million, net of tax effect of $0.8 million, of amortization expense for all intangible assets associated with past acquisitions.

Non-GAAP net income for the nine months ended September 30, 2016 was $42.0 million, or $1.14 per diluted share, excluding $14.1 million of stock-based compensation expense, $16.8 million, net of tax effect of $10.3 million, of intangible assets amortization expense, $4.0 million, net of tax effect of $2.4 million, of acquisition related expenses and $1.7 million, net of tax effect of 1.0 million, of inventory fair value adjustments. Non-GAAP net income includes the effect of a deferred revenue fair value adjustment of $5.0 million, net of tax effect of $3.0 million. This compares to non-GAAP net income of $34.2 million, or $0.93 per diluted share for the nine months ended September 30, 2015, which excludes $11.3 million of stock-based compensation expense and $3.3 million, net of tax effect of $1.7 million of amortization expense for intangible assets associated with past acquisitions. Non-GAAP net income for the nine months ended September 30, 2015 also excludes a $3.4 million gain on an equity investment in Avantec Healthcare Ltd.

"Omnicell completed another strong quarter marked by record revenues and market share gains," said Randall Lipps, Omnicell President, CEO and Chairman. "Omnicell's continued growth is the result of successfully broadening our product portfolio, expanding the markets we participate in, and partnering with our customers to address medication management across the full continuum of patient care. The Company is well positioned to take advantage of the great opportunities ahead," Mr. Lipps added.

2016 Guidance

For full year 2016, the Company re-confirms its 2016 total year guidance. The Company continues to expect product bookings to be between $540 million and $560 million. The Company is narrowing the 2016 non-GAAP revenue guidance range to be between $700 million to $710 million. The range was previously $695 million to $715 million. The Company expects 2016 non-GAAP EPS to be in the middle of the range that we previously guided to of $1.50 to $1.60 per share.

Omnicell Conference Call Information

Omnicell will hold a conference call today, Thursday, October 27, 2016 at 1:30 p.m. PT to discuss third 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 4139562. 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 December 08, 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 4139562.

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. 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. These medication adherence solutions are used by over 17,000 institutional and retail pharmacies in North America and the United Kingdom.  These pharmacies are served via the Company's sales channels and our solutions enable them to maintain high accuracy and quality standards in medication dispensing and administration while optimizing productivity and controlling costs.

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, 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 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)  Stock-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) 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 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 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.

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 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


Nine Months Ended


September 30,
2016


June 30,
2016


September 30,
2015


September 30,
2016


September 30,
2015

Revenues:










Product

$

133,621



$

130,674



$

100,941



$

392,190



$

284,204


Services and other revenues

43,116



42,233



24,293



128,458



70,039


  Total revenues

176,737



172,907



125,234



520,648



354,243


Cost of revenues:










Cost of product revenues

76,188



76,306



51,700



224,412



143,319


Cost of services and other revenues

19,041



18,584



9,831



56,766



28,074


  Total cost of revenues

95,229



94,890



61,531



281,178



171,393


Gross profit

81,508



78,017



63,703



239,470



182,850


Operating expenses:










Research and development

15,264



13,794



9,176



42,896



25,941


Selling, general and administrative

61,316



64,341



40,668



189,912



123,690


Gain on business combination









(3,443)


  Total operating expenses

76,580



78,135



49,844



232,808



146,188


Income (loss) from operations

4,928



(118)



13,859



6,662



36,662


Interest and other income (expense), net

(2,721)



(1,881)



(646)



(6,773)



(1,635)


Income (loss) before provision for income taxes

2,207



(1,999)



13,213



(111)



35,027


Provision (benefit) for income taxes

224



(840)



5,177



(557)



11,922


Net income (loss)

$

1,983



$

(1,159)



$

8,036



$

446



$

23,105


Net income (loss) per share:










Basic

$

0.05



$

(0.03)



$

0.22



$

0.01



$

0.64


Diluted

$

0.05



$

(0.03)



$

0.22



$

0.01



$

0.63


Weighted average shares outstanding:










Basic

36,332



35,987



35,806



36,020



35,983


Diluted

37,079



35,987



36,613



36,695



36,870


 

Omnicell, Inc.

Condensed Consolidated Balance Sheets

(Unaudited, in thousands)



September 30,
2016


December 31,
2015





ASSETS

Current assets:




Cash and cash equivalents

$

47,287



$

82,217


Accounts receivable, net

177,019



107,957


Inventories

74,125



46,594


Prepaid expenses

29,620



19,586


Other current assets

9,016



7,774


Total current assets

337,067



264,128


Property and equipment, net

41,034



32,309


Long-term investment in sales-type leases, net

18,756



14,484


Goodwill

311,420



147,906


Intangible assets, net

187,571



89,665


Long-term deferred tax assets

2,955



2,361


Other long-term assets

32,612



27,894


Total assets

$

931,415



$

578,747






LIABILITIES AND STOCKHOLDERS' EQUITY

Current liabilities:




Accounts payable

$

36,715



$

22,646


Accrued compensation

27,117



18,195


Accrued liabilities

32,809



30,133


Long-term debt, current portion, net

8,410




Deferred revenue, net

93,120



53,656


Total current liabilities

198,171



124,630


Long-term, deferred revenue

17,096



17,975


Long-term deferred tax liabilities

61,576



21,822


Other long-term liabilities

12,173



11,932


Long-term debt, net

214,834




Total liabilities

503,850



176,359


Total stockholders' equity

427,565



402,388


Total liabilities and stockholders' equity

$

931,415



$

578,747


 

Omnicell, Inc.

Condensed Consolidated Statements of Cash Flows

(Unaudited, in thousands)



Nine months ended September 30,


2016


2015

Operating Activities




Net income

$

446



$

23,105


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




Depreciation and amortization

43,905



18,457


(Gain) loss on disposal of fixed assets

(9)



114


Gain on business combination



(3,443)


Share-based compensation expense

14,063



11,267


Income tax benefits from employee stock plans

1,256



3,838


Excess tax benefits from employee stock plans

(1,560)



(3,942)


Deferred income taxes

(4,767)



(2,235)


Amortization of debt financing fees

1,192




Changes in operating assets and liabilities:




  Accounts receivable

(25,802)



(25,590)


  Inventories

(7,745)



(12,898)


  Prepaid expenses

(5,782)



5,937


  Other current assets

(89)



1,019


  Investment in sales-type leases

(5,296)



(3,220)


  Other long-term assets

1,153



247


  Accounts payable

5,573



(127)


  Accrued compensation

(687)



(5,003)


  Accrued liabilities

(1,901)



4,608


  Deferred revenue

12,819



(5,369)


  Other long-term liabilities

(2,299)



(833)


   Net cash provided by operating activities

24,470



5,932


Investing Activities




Purchases of intangible assets, intellectual property and patents

(1,311)



(331)


Software development for external use

(10,569)



(9,445)


Purchases of property and equipment

(10,005)



(6,081)


Business acquisition, net of cash acquired

(271,458)



(25,455)


   Net cash used in investing activities

(293,343)



(41,312)


Financing Activities




Proceeds from debt, net

247,051




Repayment of debt and revolving credit facility

(25,000)




Payment for contingent consideration

(3,000)




Proceeds from issuances under stock-based compensation plans

16,516



15,665


Employees' taxes paid related to restricted stock units

(1,917)



(2,285)


Excess tax benefits from employee stock plans

1,560



3,942


Common stock repurchases



(50,021)


   Net cash provided by (used in) financing activities

235,210



(32,699)


Effect of exchange rate changes on cash and cash equivalents

(1,267)



(52)


Net decrease in cash and cash equivalents

(34,930)



(68,131)


Cash and cash equivalents at beginning of period

82,217



125,888


Cash and cash equivalents at end of period

$

47,287



$

57,757


 

Omnicell, Inc.

Reconciliation of GAAP to Non-GAAP

(Unaudited, in thousands, except per share data)








Three Months Ended


Nine Months Ended







September
30, 2016


June 30,
2016


September
30, 2015


September
30, 2016


September
30, 2015
















Reconciliation of GAAP revenue to non-GAAP revenue:







GAAP revenue


$

176,737



$

172,907



$

125,234



$

520,648



$

354,243



Acquisition accounting impact related to deferred revenue

2,663



2,663





7,989




Non-GAAP revenue

$

179,400



$

175,570



$

125,234



$

528,637



$

354,243

















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







GAAP gross profit

$

81,508



$

78,017



$

63,703



$

239,470



$

182,850


GAAP gross margin

46.1%



45.1%



50.9%



46.0%



51.6%



Share-based compensation expense

628



644



581



1,821



1,630



Amortization of acquired intangibles

5,199



5,214



570



15,624



1,469



Acquisition accounting impact related to deferred revenue

2,663



2,663





7,989





Inventory fair value adjustments

920



920





2,761





Acquisitions related expenses

44



227





271




Non-GAAP gross profit

$

90,962



$

87,685



$

64,854



$

267,936



$

185,949


Non-GAAP gross margin

50.7%



49.9%



51.8%



50.7%



52.5%

















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






GAAP operating expenses

$

76,580



$

78,135



$

49,844



$

232,808



$

146,188


GAAP operating expenses % to total revenue


43.3%



45.2%



39.8%



44.7%



41.3%



Share-based compensation expense

(4,049)



(4,851)



(3,385)



(12,242)



(9,637)



Amortization of acquired intangibles

(3,714)



(3,838)



(1,408)



(11,500)



(3,550)



Acquisitions related expenses

(342)



(1,980)





(4,924)





Gain on business combination









3,443


Non-GAAP operating expenses

$

68,475



$

67,466



$

45,051



$

204,142



$

136,444


Non-GAAP operating expenses % to total revenue

38.2%



38.4%



36.0%



38.6%



38.5%























Three Months Ended


Nine Months Ended







September
30, 2016


June 30,
2016


September
30, 2015


September
30, 2016


September
30, 2015

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





GAAP income (loss) from operations

$

4,928



$

(118)



$

13,859



$

6,662



$

36,662


GAAP operating income % to total revenue


2.8%



(0.1)%



11.1%



1.3%



10.3%



Share-based compensation expense

4,677



5,495



3,966



14,063



11,267



Amortization of acquired intangibles

8,913



9,052



1,978



27,124



5,019



Acquisition accounting impact related to deferred revenue

2,663



2,663





7,989





Inventory fair value adjustments

920



920





2,761





Acquisitions related expenses

386



2,207





5,195





Gain on business combination









(3,443)


Non-GAAP income from operations

$

22,487



$

20,219



$

19,803



$

63,794



$

49,505


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

12.5%



11.5%



15.8%



12.1%



14.0%

















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







GAAP net income (loss)

$

1,983



$

(1,159)



$

8,036



$

446



$

23,105



Share-based compensation expense

4,677



5,495



3,966



14,063



11,267



Amortization of acquired intangibles

8,913



9,052



1,978



27,124



5,019



Acquisition accounting impact related to deferred revenue

2,663



2,663





7,989





Inventory fair value adjustments

920



920





2,761





Acquisitions related expenses(a)

783



3,002





6,387





Gain on business combination









(3,443)



Tax effect of the adjustments above(b)

(5,047)



(5,942)



(775)



(16,820)



(1,703)


Non-GAAP net income

$

14,892



$

14,031



$

13,205



$

41,950



$

34,245

















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



Shares - diluted GAAP

37,079



35,987



36,613



36,695



36,870

















Shares - diluted Non-GAAP

37,079



36,649



36,613



36,695



36,870

















GAAP net income (loss) per share - diluted

$

0.05



$

(0.03)



$

0.22



$

0.01



$

0.63



Share-based compensation expense

0.13



0.15



0.11



0.38



0.31



Amortization of acquired intangibles

0.24



0.25



0.05



0.74



0.14



Acquisition accounting impact related to deferred revenue

0.07



0.07





0.22





Inventory fair value adjustments

0.02



0.03





0.08





Acquisitions related expenses(a)

0.02



0.08





0.17





Gain on business combination









(0.10)



Tax effect of the adjustments above(b)

(0.13)



(0.17)



(0.02)



(0.46)



(0.05)


Non-GAAP net income per share - diluted

$

0.40



$

0.38



$

0.36



$

1.14



$

0.93

















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







GAAP net income (loss)

$

1,983



$

(1,159)



$

8,036



$

446



$

23,105



Share-based compensation expense

4,677



5,495



3,966



14,063



11,267



Interest (income) and expense, net

1,523



1,348



138



4,618



321



Depreciation and amortization expense

14,702



14,724



6,482



43,899



18,457



Acquisition accounting impact related to deferred revenue

2,663



2,663





7,989





Inventory fair value adjustments

920



920





2,761





Acquisitions related expenses(a)

783



3,002





6,387





Gain on business combination









(3,443)



Income tax expense

224



(840)



5,177



(557)



11,922


Non-GAAP Adjusted EBITDA (c)

$

27,475



$

26,153



$

23,799



$

79,606



$

61,629




(a)

Business combination rules require us to account for the fair value of Property, Plant and Equipment ("PPE") acquired in our purchase accounting.  In connection with the Aesynt acquisition, we recorded approximately $0.3 million of additional depreciation expense related to the fair value step-up of PPE in Q1, Q2, and Q3 2016, respectively.   As these costs represent the expense recognition of fair value adjustments in excess of the historical cost basis of PPE obtained through acquisition, these charges are outside the control of those responsible for the underlying operations of the business.  In connection with Q3'16 and year-to-date Q3'16 presentation, we revised the previously disclosed Non-GAAP measurements by $0.3 million for Q1 and Q2'2016, respectively, for the impact of depreciation expense related to the fair value step-up of PPE.

(b)

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

(c)

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 September 30, 2016


Three Months Ended September 30, 2015


Automation
and
Analytics


Medication
Adherence


Total


Automation
and

Analytics


Medication
Adherence


Total





Revenues

$

152,437



$

24,300



$

176,737



$

102,967



$

22,267



$

125,234


Cost of revenues

77,828



17,401



95,229



45,668



15,863



61,531


Gross profit

74,609



6,899



81,508



57,299



6,404



63,703


Gross margin %

48.9%



28.4%



46.1%



55.6%



28.8%



50.9%














Operating expenses

49,123



6,137



55,260



30,628



6,070



36,698


Income from segment operations

$

25,486



$

762



$

26,248



$

26,671



$

334



$

27,005


Operating margin %

16.7%



3.1%



14.9%



25.9%



1.5%



21.6%














Corporate costs





21,320







13,146


Income from operations





$

4,928







$

13,859














 

Omnicell, Inc.

Segmented Information

(Unaudited, in thousands, except for percentages)



Nine Months Ended September 30, 2016


Nine Months Ended September 30, 2015


Automation
and
Analytics


Medication
Adherence


Total


Automation
and

Analytics


Medication
Adherence


Total





Revenues

$

450,043



$

70,605



$

520,648



$

284,447



$

69,796



$

354,243


Cost of revenues

233,401



47,777



281,178



123,923



47,470



171,393


Gross profit

216,642



22,828



239,470



160,524



22,326



182,850


Gross margin %

48.1%



32.3%



46.0%



56.4%



32.0%



51.6%














Operating expenses

151,108



17,518



168,626



85,195



18,321



103,516


Income from segment operations

$

65,534



$

5,310



$

70,844



$

75,329



$

4,005



$

79,334


Operating margin %

14.6%



7.5%



13.6%



26.5%



5.7%



22.4%














Corporate costs





64,182







42,672


Income from operations





$

6,662







$

36,662














 

Omnicell, Inc.

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

(Unaudited, in thousands, except for percentages)



Three Months Ended September 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

$

152,437







$

24,300







$

176,737






Acquisition accounting impact related to deferred revenue

2,663



1.7%


1.7%



—%


—%


2,663



1.5%


1.5%

Non-GAAP Revenues

$

155,100







$

24,300







$

179,400
























GAAP Gross profit

$

74,609



48.9%




$

6,899



28.4%




$

81,508



46.1%


45.4%

Stock-based compensation expense

511



0.3%


0.3%


117



0.5%


0.5%


628



0.4%


0.4%

Amortization expense of acquired intangible assets

4,867



3.2%


3.1%


332



1.4%


1.4%


5,199



2.9%


2.9%

Acquisition accounting impact related to deferred revenue

2,663



1.7%


1.7%




—%


—%


2,663



1.5%


1.5%

Inventory fair value adjustments

920



0.6%


0.6%




—%


—%


920



0.5%


0.5%

Acquisitions related expenses

44



—%


—%




—%


—%


44



—%


—%

Non-GAAP Gross profit

$

83,614





53.9%


$

7,348





30.2%


$

90,962





50.7%



















GAAP Operating income

$

25,486



16.7%




$

762



3.1%




$

26,248



14.9%



Stock-based compensation expense

1,952



1.3%


1.3%


264



1.1%


1.1%


2,216



1.3%


1.2%

Amortization expense of acquired intangible assets

7,623



5.0%


4.9%


1,290



5.3%


5.3%


8,913



5.0%


5.0%

Acquisition accounting impact related to deferred revenue

2,663



1.7%


1.7%




—%


—%


2,663



1.5%


1.5%

Inventory fair value adjustments

920



0.6%


0.6%




—%


—%


920



0.5%


0.5%

Acquisitions related expenses

133



0.1%


0.1%




—%


—%


133



0.1%


0.1%

Non-GAAP Operating income

$

38,777





25.0%


$

2,316





9.5%


$

41,093





22.9%



















GAAP Corporate costs













$

21,320



12.1%



Stock-based compensation expense













2,461



1.4%


1.4%

Acquisition-related expenses













253



0.1%


0.1%

Non-GAAP Corporate costs













$

18,606





10.4%



















Non-GAAP Income from operations













$

22,487





12.5%




























 

Omnicell, Inc.

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

(Unaudited, in thousands, except for percentages)



Three Months Ended September 30, 2015


Automation and
Analytics


Medication
Adherence


Total


Amount


% of
GAAP
Revenue*


Amount


% of
GAAP
Revenue*


Amount


% of
GAAP
Revenue*

Revenues

$

102,967





$

22,267





$

125,234
















GAAP Gross profit

$

57,299



55.6%


$

6,404



28.8%


$

63,703



50.9%

Stock-based compensation expense

403



0.4%


178



0.8%


581



0.5%

Amortization expense of acquired intangible

assets

238



0.2%


332



1.5%


570



0.5%

Non-GAAP Gross profit

$

57,940



56.3%


$

6,914



31.1%


$

64,854



51.8%













GAAP Operating income

$

26,671



25.9%


$

334



1.5%


$

27,005



21.6%

Stock-based compensation expense

1,572



1.5%


303



1.4%


1,875



1.5%

Amortization expense of acquired intangible

assets

902



0.9%


1,076



4.8%


1,978



1.6%

Non-GAAP Operating income

$

29,145



28.3%


$

1,713



7.7%


$

30,858



24.6%













GAAP Corporate costs









$

13,146



10.5%

Stock-based compensation expense









2,091



1.7%

Non-GAAP Corporate costs









$

11,055



8.8%













Non-GAAP Income from operations









$

19,803



15.8%


* For the three months ended September 30, 2015, there were no differences between GAAP and non-GAAP revenues.

 

OMCL-E

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To view the original version on PR Newswire, visit:http://www.prnewswire.com/news-releases/omnicell-achieves-record-revenue-in-the-third-quarter-2016-300352966.html

SOURCE Omnicell, Inc.

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