Omnicell, Inc.
OMNICELL INC /CA/ (Form: 8-K/A, Received: 05/16/2005 06:38:08)

 

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

Washington, D. C.  20549

 

FORM 8-K/A

 

(Amendment No. 1)

 

CURRENT REPORT

 

PURSUANT TO SECTION 13 OR 15(D) OF THE

SECURITIES EXCHANGE ACT OF 1934

 

Date of Report (Date of earliest event reported):  April 26, 2005

 

OMNICELL, INC.

(Exact name of registrant as specified in its charter)

 

Delaware

 

000-33043

 

94-3166458

(State or other jurisdiction of
incorporation or organization)

 

(Commission File
Number)

 

(IRS Employer
Identification Number)

 

1201 Charleston Road

Mountain View, CA  94043

(Address of principal executive offices, including zip code)

 

(650) 251-6100

(Registrant’s telephone number, including area code)

 

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

 

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

 

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

 

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

 

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

 

 



 

Item 2.02.  Results of Operations and Financial Condition.

 

On April 26, 2005, Omnicell, Inc. issued a press release announcing its financial results for the three months ended March 31, 2005. The full text of the press release issued in connection with the announcement is attached as Exhibit 99.1 to this Current Report on Form 8-K.

 

Statement of Utility

 

Omnicell provides all information required in accordance with GAAP, but it believes that evaluating its ongoing operating results may be difficult if an investor is limited to reviewing only GAAP financial measures. Accordingly, Omnicell uses non-GAAP financial measures of its performance internally to evaluate its ongoing operations and to allocate resources within the organization.

 

Omnicell’s management does not itself, nor does it suggest that investors should, consider such non-GAAP financial measures in isolation from, or as a substitute for, financial information prepared in accordance with GAAP. The non-GAAP financial measures used by Omnicell may not be consistent with the presentation of similar companies in Omnicell’s industry. However, Omnicell presents such non-GAAP financial measures in reporting its financial results to provide investors with an additional tool to evaluate its operating results in a manner that focuses on what it believes to be its ongoing business operations.

 

Omnicell’s management believes it is useful for itself and investors to review both GAAP information and the non-GAAP measures earnings per share to have a better understanding of the overall performance of its business and its ability to perform in subsequent periods.

 

Omnicell has computed the non-GAAP earnings per share impact for the first quarter of 2005 of severance costs related to a reduction in force, charges related to the end-of-life of certain older products and the costs related to two suspended acquisitions, all occurring in the first quarter of 2005. Management believes that the inclusion of these non-GAAP financial measures provides consistency and comparability with past reports of financial results and better enables investors to evaluate the ongoing operations and prospects of Omnicell by providing a better comparison to prior periods. Omnicell has provided a reconciliation of non-GAAP financial measures to the most closely applicable GAAP financial measure. Investors are encouraged to review the related GAAP financial measures and the reconciliation of these non-GAAP financial measures to their most directly comparable GAAP financial measure.

 

The information in this Form 8-K and the Exhibit attached hereto shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934 (the “Exchange Act”) or otherwise subject to the liabilities of that section, nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933 or the Exchange Act, except as expressly set forth by specific reference in such a filing.

 

Item 9.01.  Financial Statements and Exhibits.

 

(c)           Exhibits.

 

Exhibit
Number

 

Description

99.1

 

Press Release of Omnicell, Inc. dated April 26, 2005.

 

2



 

SIGNATURE

 

Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the Registrant has duly caused this report to be signed on its behalf by the undersigned, hereunto duly authorized.

 

 

OMNICELL,   INC.

 

 

 

Dated: May 11, 2005

By:

/s/ Dan S. Johnston

 

 

 

Dan S. Johnston

 

 

Senior Vice President and

 

 

General Counsel

 

3



 

INDEX TO EXHIBITS

 

Exhibit
Number

 

Description

99.1

 

Press Release of Omnicell, Inc. dated April 26, 2005.

 

4


Exhibit 99.1

 

 

Contact:

 

 

James T. Judson

 

Omnicell, Inc.

Vice President of Finance

 

1201 Charleston Road

and Interim CFO

 

Mountain View, CA 94043

800-850-6664, ext. 6118

 

 

jimj@omnicell.com

 

 

 

For Immediate Release

 

Omnicell Announces First Quarter 2005 Financial Results

 

MOUNTAIN VIEW, Calif. – April 26, 2005 — Omnicell, Inc. (NASDAQ: OMCL), a leading provider of patient safety solutions preferred by nurses, today announced first quarter 2005 results.

 

Revenue for the first quarter of 2005 totaled $28.8 million, up 3% from first quarter 2004. Total backlog as of March 31, 2005 totaled $45.2 million, up 8% from first quarter 2004.

 

Net income for the quarter includes a charge for a reduction in force announced during the fourth quarter 2004 earnings conference call and two additional one-time charges. GAAP net income for first quarter 2005 reflects a loss of $(5.8) million or $(0.23) per share. This includes the severance costs for our reduction in force of $1.5 million ($(0.06) per share) and one-time charges of $1.1 million ($(0.04) per share) to end-of-life certain older products and $0.6 million ($(0.03) per share) to write off the cost of two suspended acquisitions. Removing these one-time charges results in a pro forma net loss for the first quarter 2005 of $(2.6) million or $(0.10) per share.

 

Pro forma gross margin for the first quarter, excluding the end-of-life charge, was 53.9%, roughly flat with fourth quarter 2004 levels despite three large competitive pharmacy deals that involved either competitive swap-outs or early consolidation of leases.

 

Operating expenses, excluding the one-time charges, were $18.1 million for the first quarter of 2005, versus $16.1 million for the fourth quarter of 2004. This increase was due to higher fees for audit and SOX compliance, higher commissions expense paid on fourth quarter 2004 bookings that flowed through to revenue in the first quarter of 2005, higher sales and marketing expenses unique to the first quarter of 2005, and higher payroll taxes associated with the start of the new calendar year.

 

Omnicell Chairman, President and CEO Randall A. Lipps commented, “During the first quarter of 2005, we have made the hard choices that will enable us to grow our business in a measured and cost-effective manner. We expect to benefit from this as we move through the remainder of the year and into 2006. With our major competitors experiencing transitions, we see an excellent opportunity to expand our customer base in many accounts and will be aggressive in competing for their business.”

 

Omnicell Interim CFO James T. Judson added, “In the second quarter, Omnicell expects to start seeing the benefits of sourcing various components from China in reducing our product costs. These cost savings will enable us to mitigate margin erosion from large competitive deals and should have a net positive effect on gross margin in the second half of the year.”

 

Final Financial Results Conference Call Details

 

Management will discuss final financial results for the first quarter of 2005 on Tuesday, April 26, 2005 at 1:30 p.m. PT via conference call. Investors and analysts may listen to this conference call by logging on to www.omnicell.com or by dialing 866-249-6463 (domestic) or 303-262-2006 (international) approximately 10 minutes prior to the scheduled start. A replay of the call will be available from 3:30 p.m. PT on April 26, 2005 through 11:59 p.m. PT on May 3, 2005. Dialing 800-405-2236 (domestic) or 303-590-3000 (international) and entering the passcode 11029146# 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.

 

1



 

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 achieve profitability in the next few quarters, 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.

 

2



 

OMNICELL, INC.

CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS

(in thousands, except per share amounts)

(unaudited)

 

 

 

Three Months Ended
March 31,

 

 

 

 

 

2005

 

2004

 

Change %

 

Revenues:

 

 

 

 

 

 

 

Product revenues

 

$

22,742

 

$

22,227

 

 

 

Service and other revenues

 

6,009

 

5,602

 

 

 

Total revenues

 

28,751

 

27,829

 

3

%

Costs of revenues:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cost of product revenues

 

11,533

 

9,197

 

 

 

Cost of service and other revenues

 

2,837

 

2,021

 

 

 

 

 

 

 

 

 

 

 

Total cost of revenues

 

14,370

 

11,218

 

 

 

 

 

 

 

 

 

 

 

Gross profit

 

14,381

 

16,611

 

-13

%

 

 

 

 

 

 

 

 

Operating expenses:

 

 

 

 

 

 

 

Research and development

 

2,709

 

2,366

 

 

 

 

 

 

 

 

 

 

 

Selling, general and administrative

 

17,142

 

11,876

 

 

 

Restructuring

 

406

 

0

 

 

 

Total operating expenses

 

20,257

 

14,242

 

42

%

 

 

 

 

 

 

 

 

Income from operations

 

(5,876

)

2,369

 

 

 

 

 

 

 

 

 

 

 

Interest and other income

 

125

 

84

 

 

 

 

 

 

 

 

 

 

 

Interest and other expense

 

(24

)

(2

)

 

 

 

 

 

 

 

 

 

 

Income before provision for income taxes

 

(5,775

)

2,451

 

 

 

Provision for income taxes

 

17

 

97

 

 

 

Net income

 

$

(5,792

)

$

2,354

 

 

 

Net income per share - basic

 

$

(0.23

)

$

0.10

 

 

 

Net income per share - diluted

 

$

(0.23

)

$

0.08

 

 

 

Weighted average common shares outstanding - basic

 

25,490

 

24,301

 

 

 

Weighted average common shares outstanding - diluted

 

25,490

 

28,145

 

 

 

 

3



 

OMNICELL, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(in thousands)

 

 

 

March 31,

 

December 31,

 

Change

 

 

 

2005

 

2004 (1)

 

($)

 

(%)

 

 

 

(unaudited)

 

 

 

 

 

 

 

ASSETS

 

 

 

 

 

 

 

 

 

Current assets:

 

 

 

 

 

 

 

 

 

Cash and cash equivalents

 

$

15,251

 

$

19,482

 

(4,231

)

-22

%

Short-term investments

 

11,047

 

11,117

 

(70

)

-1

%

Accounts receivable, net

 

22,591

 

21,967

 

624

 

3

%

Inventories

 

15,291

 

14,592

 

699

 

5

%

Receivables subject to a sales agreement

 

2,987

 

2,878

 

109

 

4

%

Other current assets

 

7,083

 

7,730

 

(647

)

-8

%

Total current assets

 

74,250

 

77,766

 

(3,516

)

-5

%

Property and equipment, net

 

5,422

 

5,660

 

(238

)

-4

%

Long-term receivables subject to a sales agreement

 

2,852

 

3,224

 

(372

)

-12

%

Other assets

 

12,264

 

12,841

 

(577

)

-4

%

Total assets

 

$

94,788

 

$

99,491

 

(4,703

)

-5

%

 

 

 

 

 

 

 

 

 

 

LIABILITIES AND STOCKHOLDERS’ EQUITY

 

 

 

 

 

 

 

 

 

Current liabilities:

 

 

 

 

 

 

 

 

 

Accounts payable

 

$

5,137

 

$

4,489

 

648

 

14

%

Accrued liabilities

 

11,745

 

12,918

 

(1,173

)

-9

%

Deferred service revenue

 

15,173

 

13,922

 

1,251

 

9

%

Deferred gross profit

 

7,653

 

7,846

 

(193

)

-2

%

Obligation resulting from sale of receivables

 

2,987

 

2,878

 

109

 

4

%

Current portion of note payable

 

 

 

 

 

 

Total current liabilities

 

42,695

 

42,053

 

642

 

2

%

Long-term obligation resulting from sale of receivables

 

2,852

 

3,224

 

(372

)

-12

%

Other long-term liabilities

 

250

 

517

 

(267

)

-52

%

Stockholders’ equity

 

48,991

 

53,697

 

(4,706

)

-9

%

Total liabilities and stockholders’ equity

 

$

94,788

 

$

99,491

 

(4,703

)

-5

%

 


(1) Derived from the December 31, 2004 audited consolidated balance sheet.

 

4



 

Reconciliation of non-GAAP Information

 

Reconciliation of GAAP-based EPS to Pro Forma EPS

for the three months ended March 31, 2005

(unaudited)

 

 

 

Actual

 

 

 

GAAP-based EPS

 

$

(0.23

)

 

 

Reduction in Force Cost

 

$

(0.06

)

 

 

Inventory Obsolescence Due to Discontinuation of Product

 

$

(0.04

)

 

 

Write-off of costs for suspended acquisitions

 

$

(0.03

)

 

 

Pro Forma EPS

 

$

(0.10

)

 

 

 

Reconciliation of GAAP-based Operating Expenses to Pro Forma Operating Expenses

for the three months ended March 31, 2005

(unaudited)

($ in millions)

 

 

 

Actual

 

 

 

GAAP-based Operating Expenses

 

$

20.3

 

 

 

Reduction in Force Cost

 

$

(1.5

)

 

 

Write-off of costs for suspended acquisitions

 

$

(0.6

)

 

 

Pro Forma Operating Expenses

 

$

18.1

 

 

 

 

Reconciliation of GAAP-based Cost of Revenue and Gross Margin Percentage to Pro Forma Cost of Revenue and Gross Margin Percentage

for the three months ended March 31, 2005

(unaudited)

($ in millions)

 

 

 

Actual

 

Gross Margin %

 

GAAP-based Cost of Revenue

 

$

14.4

 

50.0

%

Inventory Obsolescence Due to Discontinuation of Product

 

$

(1.1

)

(3.9

)%

Pro Forma Cost of Revenue

 

$

13.3

 

53.9

%

 

5