Omnicell, Inc.
OMNICELL, Inc (Form: 8-K, Received: 05/02/2013 16:14:42)

 

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D. C.  20549

 

FORM 8-K

 

CURRENT REPORT

PURSUANT TO SECTION 13 OR 15(D) OF THE

SECURITIES EXCHANGE ACT OF 1934

 

Date of Report (Date of earliest event reported):  May 2, 2013

 

OMNICELL, INC.

(Exact name of registrant as specified in its charter)

 

Delaware

 

000-33043

 

94-3166458

(State or other jurisdiction of

 

(Commission File

 

(IRS Employer

incorporation or organization)

 

Number)

 

Identification Number)

 

590 East Middlefield 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 May 2, 2013, Omnicell, Inc. issued a press release announcing its financial results for the first quarter ended March 31, 2013. 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 and is incorporated herein by reference.

 

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, as amended (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, as amended, or the Exchange Act, except as expressly set forth by specific reference in such a filing.

 

Item 9.01 Financial Statements and Exhibits

 

(d) Exhibits

 

Number

 

Description of Document

99.1

 

Press release entitled “Omnicell Announces First Quarter 2013 Results” dated May 2, 2013.

 

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 2, 2013

By:

/s/ Dan S. Johnston

 

 

Dan S. Johnston

 

 

Executive Vice President and General Counsel

 

3



 

EXHIBIT INDEX

 

Number

 

Description of Document

99.1

 

Press release entitled “Omnicell Announces First Quarter 2013 Results” dated May 2, 2013.

 

4


 

Exhibit 99.1

 

GRAPHIC

 

Contact:

 

Rob Seim

Omnicell, Inc.

Chief Financial Officer

590 East Middlefield Road

800-850-6664, ext. 6478

Mountain View, CA 94043

rob.seim@omnicell.com

 

 

Omnicell Announces First Quarter 2013 Results

 

MOUNTAIN VIEW, Calif. — May 2, 2013 — Omnicell, Inc. (NASDAQ: OMCL), a leading provider of medication and supply management solutions to healthcare systems, today announced results for its quarter ended March 31, 2013.

 

GAAP results: Revenue for the first quarter of 2013 was $87.1 million, up $23.0 million or 35.8% from the first quarter of 2012 and down $3.1 million or 3.4% from the fourth quarter of 2012.

 

First quarter 2013 net income as reported in accordance with U.S. generally accepted accounting principles (GAAP) was $3.4 million, or $0.10 per diluted share. This compares to net income of $2.4 million, or $0.07 per diluted share in the first quarter of 2012 and net income of $5.5 million, or $0.16 per diluted share in the fourth quarter of 2012 .

 

Non-GAAP results: Non-GAAP net income was $7.4 million for the first quarter of 2013, or $0.21 per diluted share. Non-GAAP net income for the first quarter excludes $2.9 million of stock-based compensation expense, $0.7 million ($0.4 million net of the $0.3 million tax effect) of reorganization costs related to the continued integration of MTS Medication Technologies, Inc. (“MTS”), and $1.1 million ($0.6 million net of the $0.5 million tax effect) of amortization expense for all intangible assets acquired in connection with the acquisition of MTS in May 2012 and earlier acquisitions by Omnicell. This compares to non-GAAP net income of $4.6 million, or $0.13 per diluted share for the first quarter of 2012, excluding $2.2 million of stock-based compensation expense. First quarter 2013 results compare to non-GAAP net income of $8.6 million, or $0.25 per diluted share for the fourth quarter of 2012. Non-GAAP net income for the fourth quarter excluded $2.4 million of stock-based compensation expense and $1.1 million ($0.6 million net of the $0.5 million tax effect) of amortization expense for all intangible assets acquired in connection with the acquisition of MTS and earlier acquisitions by Omnicell.

 

“Our overall results exceeded expectations for the first quarter of 2013,” said Randall Lipps, Omnicell president, chairman and CEO. “Organizationally, we’ve taken important steps toward optimizing the growth opportunities in medication management across the spectrum of healthcare settings from hospitals to long term care to home care. We believe these actions and our solid performance this quarter positions the company for a strong fiscal 2013.”

 

Omnicell Conference Call Information

 

Omnicell will hold a conference call today at 1:30 p.m. PT to discuss first quarter financial results. The conference call can be monitored by dialing 1-866-830-5685 within the U.S. or 1-706-758-4883 for all other locations. The Conference ID # is 45591563. 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 3:30 p.m. PT and will be available until 8:59 p.m. PT on June 2. The replay access numbers are 1-855-859-2056 within the U.S. and 1-404-537-3406 for all other locations, conference code # 45591563.

 



 

About Omnicell

 

For over 20 years the mission of Omnicell (NASDAQ: OMCL) has been creating new efficiencies to improve patient care, anywhere it is delivered. Omnicell is a leading supplier of comprehensive automation and business analytics software solutions for patient-centric medication and supply management across the entire healthcare continuum, from the acute care hospital setting to post-acute skilled nursing and long-term care facilities to the home.

 

Since 1992, more than 2,600 Acute Care customers worldwide have utilized Omnicell’s medication automation, supply chain and analytics solutions to enable them to increase operational efficiency, reduce errors, deliver actionable intelligence and improve patient safety. Omnicell Non-Acute Care solutions, including its MTS Medication Technologies brand, provide innovative medication adherence packaging solutions that can help reduce costly hospital readmissions and enable approximately 6,000 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 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 (SEC) filings and include, the potential failure to realize the anticipated benefits of the MTS acquisition, including 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 and to growth of the clinical automation and workflow automation market generally, the potential of increasing competition, potential regulatory changes, and the ability of the company to improve sales productivity to grow product backlog and to develop new products and integrate acquired companies. Prospective investors are cautioned not to place undue reliance on forward-looking statements.

 

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 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 recognize equity plan-related compensation expenses, which represent the fair value of all share-based payments to employees, including grants of employee stock options, as required under ASC 718, “Stock Compensation” as non-GAAP adjustments in each period.

 

b)  Reorganization costs . During the three months ended March 31, 2013, we recorded $0.7 million of reorganization costs related to our Non-Acute Care segment ($0.4 million net of the $0.3 million tax effect). This charge is not expected to be recurring and, as such, the financial impact is excluded from our non-GAAP results.

 

c)  Intangible assets amortization from business acquisitions. We excluded from our non-GAAP results the amortization expense resulting from the MTS acquisition as well as earlier Omnicell acquisitions. This impacts the first quarter of fiscal 2013 non-GAAP results by $1.1 million ($0.6 million net of the $0.5 million tax effect) and the fourth quarter of fiscal 2012 non-GAAP results by $1.1 million ($0.6 million net of the $0.5 million tax effect). 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.

 

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 option grants.

 

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 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

(in thousands, except per share data)

 

 

 

Three Months Ended

 

 

 

March 31,
2013

 

December 31,
2012

 

March 31,
2012

 

Revenues:

 

(unaudited)

 

(unaudited)

 

(unaudited)

 

Product

 

$

69,236

 

$

72,415

 

$

48,524

 

Services and other revenues

 

17,874

 

17,754

 

15,619

 

Total revenue

 

87,110

 

90,169

 

64,143

 

 

 

 

 

 

 

 

 

Cost of revenues:

 

 

 

 

 

 

 

Cost of product revenues

 

33,547

 

32,837

 

20,296

 

Cost of services and other revenues

 

8,196

 

7,956

 

8,098

 

Total cost of revenues

 

41,743

 

40,793

 

28,394

 

 

 

 

 

 

 

 

 

Gross profit

 

45,367

 

49,376

 

35,749

 

Operating expenses:

 

 

 

 

 

 

 

Research and development

 

7,954

 

6,188

 

6,494

 

Selling, general, and administrative

 

33,244

 

33,354

 

25,620

 

Total operating expenses

 

41,198

 

39,542

 

32,114

 

 

 

 

 

 

 

 

 

Income from operations

 

4,169

 

9,834

 

3,635

 

Other income and (expense), net

 

(223

)

(108

)

96

 

Income before provision for income taxes

 

3,946

 

9,726

 

3,731

 

Provision for income taxes

 

561

 

4,194

 

1,380

 

Net income

 

$

3,385

 

$

5,532

 

$

2,351

 

 

 

 

 

 

 

 

 

Net income per share:

 

 

 

 

 

 

 

Basic

 

$

0.10

 

$

0.17

 

$

0.07

 

Diluted

 

$

0.10

 

$

0.16

 

$

0.07

 

 

 

 

 

 

 

 

 

Weighted average shares outstanding:

 

 

 

 

 

 

 

Basic

 

33,900

 

33,282

 

33,365

 

Diluted

 

34,820

 

34,128

 

34,341

 

 



 

Omnicell, Inc.

Condensed Consolidated Balance Sheets

(In thousands)

 

 

 

March 31,

 

December 31,

 

 

 

2013

 

2012

 

 

 

(unaudited)

 

(1)

 

 

 

 

 

 

 

ASSETS

 

 

 

 

 

Current assets:

 

 

 

 

 

Cash and cash equivalents

 

$

69,817

 

$

62,313

 

Short-term investments

 

 

 

Accounts receivable, net

 

65,703

 

55,116

 

Inventories

 

26,125

 

26,903

 

Prepaid expenses

 

16,049

 

15,392

 

Deferred tax assets

 

11,860

 

11,860

 

Other current assets

 

7,532

 

9,172

 

Total current assets

 

197,086

 

180,756

 

 

 

 

 

 

 

Property and equipment, net

 

34,697

 

34,107

 

Non-current net investment in sales-type leases

 

12,943

 

13,228

 

Goodwill

 

111,343

 

111,407

 

Other intangible assets

 

84,529

 

85,550

 

Non-current deferred tax assets

 

1,126

 

993

 

Other assets

 

15,633

 

15,778

 

Total assets

 

$

457,357

 

$

441,819

 

 

 

 

 

 

 

LIABILITIES AND STOCKHOLDERS’ EQUITY

 

 

 

 

 

Current liabilities:

 

 

 

 

 

Accounts payable

 

$

18,379

 

$

18,255

 

Accrued compensation

 

6,948

 

11,613

 

Accrued liabilities

 

12,525

 

11,988

 

Deferred service revenue

 

20,821

 

20,449

 

Deferred gross profit

 

26,938

 

20,772

 

Total current liabilities

 

85,611

 

83,077

 

 

 

 

 

 

 

Non-current deferred service revenue

 

19,463

 

19,892

 

Non-current deferred tax liabilities

 

25,548

 

26,491

 

Other long-term liabilities

 

4,942

 

4,809

 

Total liabilities

 

135,564

 

134,269

 

 

 

 

 

 

 

Stockholders’ equity:

 

 

 

 

 

Total stockholders’ equity

 

321,793

 

307,550

 

 

 

 

 

 

 

Total liabilities and stockholders’ equity

 

$

457,357

 

$

441,819

 

 


(1)  Information derived from our December 31, 2012 audited Consolidated Financial Statements.

 


 


 

Omnicell, Inc.

Reconciliation of GAAP to Non-GAAP

(In thousands, except per share data, unaudited)

 

 

 

Three Months Ended

 

 

 

March 31, 2013

 

December 31, 2012

 

March 31, 2012

 

 

 

Net
income

 

Net income
per share-
diluted

 

Net
income

 

Net income
per share-
diluted

 

Net
income

 

Net income
per share-
diluted

 

GAAP

 

$

3,385

 

$

0.10

 

$

5,532

 

$

0.16

 

$

2,351

 

$

0.07

 

Non-GAAP adjustments:

 

 

 

 

 

 

 

 

 

 

 

 

 

Business acquisition costs

 

 

 

 

 

 

 

 

 

 

 

 

 

Reorganization costs (a)

 

732

 

 

 

 

 

 

 

 

 

Amortization of intangible assets acquired by acquisition (b)

 

1,060

 

 

 

1,057

 

 

 

 

 

 

Subtotal pretax adjustments

 

1,792

 

 

 

1,057

 

 

 

 

 

 

Income tax effect of non-GAAP adjustments (c)

 

(716

)

 

 

(423

)

 

 

 

 

 

Subtotal after-tax adjustments

 

1,076

 

 

 

634

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

ASC 718 share-based compensation adjustment (d)

 

 

 

 

 

 

 

 

 

 

 

 

 

Gross profit

 

305

 

 

 

236

 

 

 

268

 

 

 

Operating expenses

 

2,621

 

 

 

2,197

 

 

 

1,939

 

 

 

Total after-tax adjustments

 

4,002

 

0.11

 

3,067

 

0.09

 

2,207

 

0.06

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Non-GAAP

 

$

7,387

 

$

0.21

 

$

8,599

 

$

0.25

 

$

4,558

 

$

0.13

 

 


(a)  This adjustment is for reorganization costs related to our Non-Acute Care segment for the three months ended March 31, 2013.

 

(b) Beginning with the second quarter of 2012, we are recognizing the amortization expense resulting from all intangible assets recorded from business acquisitions as a non-GAAP adjustment, including MTS and prior acquisitions.

 

(c)  Tax effects are calculated using the effective tax rates for the respective periods presented.

 

(d) This adjustment reflects the accounting impact of non-cash stock-based compensation expense related to the impact of ASC 718 for the periods shown.

 



 

Omnicell, Inc.

Calculation of Adjusted EBITDA (1)

(In thousands, unaudited)

 

 

 

Three Months Ended

 

 

 

March 31,
2013

 

December 31,
2012

 

March 31,
2012

 

 

 

 

 

 

 

 

 

GAAP net income

 

$

3,385

 

$

5,532

 

$

2,351

 

Add back:

 

 

 

 

 

 

 

ASC 718 stock compensation expense

 

2,926

 

2,433

 

2,207

 

Reorganization costs

 

732

 

 

 

Interest

 

106

 

(2

)

(31

)

Depreciation and amortization expense

 

4,471

 

4,077

 

2,335

 

Income tax expense

 

561

 

4,194

 

1,380

 

Non-GAAP adjusted EBITDA (1)

 

$

12,181

 

$

16,234

 

$

8,242

 

 


(1) Defined as earnings before interest income and expense, taxes, depreciation and amortization, and non-cash expenses, including stock compensation expense, per ASC 718, as well excluding certain non-GAAP adjustments. The non-GAAP adjustments for the quarter ended March 31, 2013 also exclude transaction and integration costs for MTS, acquired in May 2012.