Omnicell, Inc.
OMNICELL, Inc (Form: 8-K, Received: 02/04/2016 16:11:24)











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):  February 4, 2016

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)

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 February 4, 2016, Omnicell, Inc. issued a press release announcing its financial results for the quarter and the year ended December 31, 2015. 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 Reports Earnings for Fiscal Year and Fourth Quarter 2015" dated February 4, 2016




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: February 4, 2016
 
 
 
 
/s/ Dan S. Johnston
 
 
Dan S. Johnston
 
 
Executive Vice President and Chief Legal & Administrative Officer
                                                      
                                                                           




3



EXHIBIT INDEX

Number
 
Description of Document
99.1
 
Press release entitled "Omnicell Reports Earnings for Fiscal Year and Fourth Quarter 2015" dated February 4, 2016

                                                                           




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Exhibit 99.1


Contact:
 
 
Peter Kuipers
 
Omnicell, Inc.
Chief Financial Officer
 
590 East Middlefield Road
800-850-6664, ext. 6180
 
Mountain View, CA 94043
Peter.kuipers@omnicell.com
 
 


Omnicell Reports Earnings for Fiscal Year and Fourth Quarter 2015

Record quarterly revenue of $130.3 million , representing 7.2% year over year growth
Record yearly revenue of $484.6 million , representing 9.9% year over year growth
Record quarterly Non-GAAP diluted EPS of $0.40 , representing 11.1% quarter over quarter growth


MOUNTAIN VIEW, Calif. -- February 4, 2016 -- Omnicell, Inc. (NASDAQ: OMCL), a leading provider of medication and supply management solutions to healthcare systems, today announced results for its fiscal year and fourth quarter ended December 31, 2015

GAAP results: Revenue for the fourth quarter of 2015 was $130.3 million , up $5.1 million or 4.1% from the third quarter of 2015 , and up $8.8 million or 7.2% from the fourth quarter of 2014 . Revenue for the year ended December 31, 2015 was $484.6 million , up $43.7 million or 9.9% from the year ended December 31, 2014 .

Fourth quarter 2015 net income as reported in accordance with U.S. generally accepted accounting principles (GAAP) was $7.7 million , or $0.21 per diluted share. This compares to GAAP net income of $8.0 million , or $0.22 per diluted share, for the third quarter of 2015 , and GAAP net income of $9.2 million , or $0.25 per diluted share, for the fourth quarter of 2014 .

GAAP net income for the year ended December 31, 2015 was $30.8 million , or $0.84 per diluted share, which includes a $3.4 million gain on business combination of an equity investment. GAAP net income was $30.5 million , or $0.83 per diluted share, for the year ended December 31, 2014 .

Non-GAAP results: Non-GAAP net income for the fourth quarter of 2015 was $14.4 million , or $0.40 per diluted share, excluding $3.7 million of stock-based compensation expense, $1.2 million , net of tax effect of $0.7 million , of amortization expense for all intangible assets associated with past acquisitions and $2.0 million , net of tax effect of $0.9 million , of acquisition expenses associated with the Aesynt acquisition. This compares to non-GAAP net income of $14.3 million , or $0.39 per diluted share, for the fourth quarter of 2014 . Non-GAAP net income for the fourth quarter of 2014 excluded $4.2 million of stock-based compensation expense and $0.9 million , net of tax effect of $0.4 million , of amortization expense for all intangible assets associated with past acquisitions. Fourth quarter 2015 results compare to non-GAAP net income of $13.2 million , or $0.36 per diluted share, for the third quarter of 2015 . Non-GAAP net income for the third quarter of 2015 excludes $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 year ended December 31, 2015 was $48.7 million , or $1.33 per diluted share. Non-GAAP net income for the year ended December 31, 2015 excludes $14.9 million of stock-based compensation expense, $4.5 million , net of tax effect of $2.4 million of amortization expense for all intangible assets associated with past acquisitions and $2.0 million net of tax effect of $0.9 million , of acquisition expenses associated with the Aesynt acquisition. Non-GAAP net income for the year ended December 31, 2015 also excludes a $3.4 million gain on business combination of an equity investment in Avantec. Non-GAAP net income for the year ended December 31, 2014 was $46.1 million , or $1.26 per diluted share, excluding $12.8 million of stock-based compensation expense and $2.8 million , net of tax effect of $1.7 million of amortization expense for all intangible assets associated with our business acquisitions.

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Total bookings for the year ended December 31, 2015 were $392.3 million and total bookings for the year ended December 31, 2014 were $364.0 million.

“I am pleased with the company’s performance and our consistent track record,” said Randall Lipps, Omnicell president, chairman and CEO. “For eleven consecutive years we have increased our market share and gained new thought leading customers every quarter. Together with our customers, we are consistently delivering state of the art medication management and workflow efficiency for caregivers and better healthcare for patients. These record-setting results provide great momentum for us in 2016.”

2016 Guidance:
The guidance is inclusive of the recently acquired Aesynt business:

For the year 2016, we project product bookings to be between $540 and $560 million, revenue to be between $695 and $715 million. We expect non-GAAP earnings to be between $1.50 and $1.60 per share, and non-GAAP operating margins to be approximately 12.7%. For the year 2016 expected non-GAAP results include approximately $10 million of integration expenses, primarily related to our acquisition of Aesynt, and approximately $6 million of interest expense related to the loan facility used to finance the Aesynt acquisition. We expect our annual effective tax rate to be 38% of GAAP earnings.

For the first quarter of 2016 we expect revenue to be between $165 and $170 million and expected Non-GAAP EPS to be between $0.25 and $0.28 per share.

Reporting Segments

As previously reported, beginning the first quarter of 2015, Omnicell enhanced the management of its business, operating structure and segment reporting structure by excluding certain corporate-level costs from our reporting segments based on how the Chief Operating Decision Maker (“CODM”) reviews the business. Corporate-level costs may include expenses related to executive management, finance and accounting, human resources, legal, training and development, and certain administrative expenses. Omnicell's CODM allocates resources and evaluates the performance of our segments using information about its revenues, gross profit and income from operations, excluding certain costs which are managed separately at the corporate level.

Omnicell Conference Call Information

Omnicell will hold a conference call today, Thursday, February 4, 2016 at 2:30 p.m. PT to discuss fourth 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 27500940. 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 5:30 p.m. PT and will be available until 11:59 p.m. PT on February 18, 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 27500940.

 
About Omnicell

Since 1992, Omnicell (NASDAQ: 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.
Approximately 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 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, Inc. please visit www.omnicell.com .

  Forward-Looking Statements

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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. 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 gross profit, non-GAAP operating expenses, non-GAAP income from operations, 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, Compensation - Stock Compensation (ASC 718) as non-GAAP adjustments in each period.

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) 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.


3



d) Gain on business combination of an equity investment. We excluded from our non-GAAP results the gain on a minority equity investment in a private company, Avantec, which was recognized in relation to the acquisition by Omnicell of the remainder of the company. This non-cash gain is not considered by management to reflect the core cash-generating performance of the business and therefore is 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 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 other 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.
 

4




Omnicell, Inc.
Condensed Consolidated Statements of Operations
(Unaudited, in thousands, except per share data)

 
Three Months Ended
 
Years Ended
 
December 31,
2015
 
September 30,
2015
 
December 31,
2014
 
December 31,
2015
 
December 31,
2014
Revenues:
 
 
 
 
 
 
 
 
 
Product
$
104,193

 
$
100,941

 
$
100,291

 
$
388,397

 
$
360,344

Services and other revenues
26,123

 
24,293

 
21,250

 
96,162

 
80,556

Total revenues
130,316

 
125,234

 
121,541

 
484,559

 
440,900

Cost of revenues:
 
 
 
 
 
 
 
 
 
Cost of product revenues
55,099

 
51,700

 
49,005

 
198,418

 
173,419

Cost of services and other revenues
10,137

 
9,831

 
8,757

 
38,211

 
33,621

Total cost of revenues
65,236

 
61,531

 
57,762

 
236,629

 
207,040

Gross profit
65,080

 
63,703

 
63,779

 
247,930

 
233,860

Operating expenses:
 
 
 
 
 
 
 
 
 
Research and development
9,219

 
9,176

 
8,132

 
35,160

 
27,802

Selling, general and administrative
43,891

 
40,668

 
42,173

 
167,581

 
156,475

Gain on business combination

 

 

 
(3,443
)
 

Total operating expenses
53,110

 
49,844

 
50,305

 
199,298

 
184,277

Income from operations
11,970

 
13,859

 
13,474

 
48,632

 
49,583

Interest and other income (expense), net
(753
)
 
(646
)
 
(77
)
 
(2,388
)
 
(1,079
)
Income before provision for income taxes
11,217

 
13,213

 
13,397

 
46,244

 
48,504

Provision for income taxes
3,562

 
5,177

 
4,162

 
15,484

 
17,986

Net income
$
7,655

 
$
8,036

 
$
9,235

 
$
30,760

 
$
30,518

Net income per share:
 
 
 
 
 
 
 
 
 
Basic
$
0.22

 
$
0.22

 
$
0.26

 
$
0.86

 
$
0.86

Diluted
$
0.21

 
$
0.22

 
$
0.25

 
$
0.84

 
$
0.83

Weighted average shares outstanding:
 
 
 
 
 
 
 
 
 
Basic
35,482

 
35,806

 
35,697

 
35,857

 
35,650

Diluted
36,172

 
36,613

 
36,585

 
36,718

 
36,622


 


5




Omnicell, Inc.
Condensed Consolidated Balance Sheets
(Unaudited, in thousands)
 
December 31, 2015
 
December 31, 2014
 
 
 
 
ASSETS
Current assets:
 

 
 
Cash and cash equivalents
$
82,217

 
$
125,888

Accounts receivable, net
107,957

 
82,763

Inventories
46,594

 
31,554

Prepaid expenses
19,586

 
23,518

Deferred tax assets *

 
12,446

Other current assets
7,774

 
7,215

Total current assets
264,128

 
283,384

Property and equipment, net
32,309

 
36,178

Long-term net investment in sales-type leases
14,484

 
10,848

Goodwill
147,906

 
122,720

Intangible assets, net
89,665

 
82,667

Long-term deferred tax assets
2,361

 
1,144

Other long-term assets
27,894

 
23,273

Total assets
$
578,747

 
$
560,214

 
 
 
 
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
 

 
 
Accounts payable
$
22,646

 
$
19,432

Accrued compensation
18,195

 
19,874

Accrued liabilities
30,133

 
19,299

Deferred service revenue
27,948

 
25,167

Deferred gross profit
25,708

 
28,558

Total current liabilities
124,630

 
112,330

Deferred service revenue, long-term
17,975

 
20,308

Long-term deferred tax liabilities
21,822

 
30,454

Other long-term liabilities
11,932

 
7,024

Total liabilities
176,359

 
170,116

Stockholders’ equity:
 

 
 

Total stockholders’ equity
402,388

 
390,098

Total liabilities and stockholders’ equity
$
578,747

 
$
560,214


* In Q4 2015, the Company prospectively adopted ASU No. 2015-17, which required the reclassification of deferred tax assets and liabilities from current to non-current on its Consolidated Balance Sheets.
 

6



Omnicell, Inc.
Condensed Consolidated Statements of Cash Flows
(Unaudited, in thousands)
 
Years Ended
 
2015
 
2014
Operating Activities
 
 
 
Net income
$
30,760

 
$
30,518

Adjustments to reconcile net income to net cash provided by operating activities:
 
 
 
Depreciation and amortization
25,639

 
20,272

Loss on disposal of fixed assets
238

 
167

Impairment of equity investments

 
350

Gain on business combination
(3,443
)
 

Provision for receivable allowance
354

 
941

Share-based compensation expense
14,921

 
12,785

Income tax benefits from employee stock plans
4,535

 
5,370

Excess tax benefits from employee stock plans
(4,724
)
 
(5,834
)
Provision for excess and obsolete inventories
369

 
542

Deferred income taxes
(1,092
)
 
1,402

Changes in operating assets and liabilities:

 

 Accounts receivable, net
(18,295
)
 
(22,799
)
 Inventories
(10,401
)
 
1,418

 Prepaid expenses
4,049

 
(4,296
)
 Other current assets
638

 
53

 Net investment in sales-type leases
(4,661
)
 
1,048

 Other long-term assets
496

 
297

 Accounts payable
(2,841
)
 
1,611

 Accrued compensation
(2,032
)
 
270

 Accrued liabilities
5,456

 
5,512

 Deferred service revenue
(2,880
)
 
5,086

 Deferred gross profit
(2,641
)
 
8,601

 Other long-term liabilities
(683
)
 
1,849

Net cash provided by operating activities
33,762

 
65,163

Investing Activities
 
 
 
Acquisition of intangible assets, intellectual property and patents
(415
)
 
(327
)
Software development for external use
(12,132
)
 
(10,353
)
Purchases of property and equipment
(7,542
)
 
(11,922
)
Business acquisition, net of cash acquired
(25,507
)
 
(20,723
)
Net cash used in investing activities
(45,596
)
 
(43,325
)
Financing Activities
 
 
 
Proceeds from issuances under stock-based compensation plans
17,091

 
21,795

Employees' taxes paid related to restricted stock units
(3,627
)
 
(3,744
)
Common stock repurchases
(50,021
)
 
(24,091
)
Excess tax benefits from employee stock plans
4,724

 
5,834

Net cash used in financing activities
(31,833
)
 
(206
)
Effect of exchange rate changes on cash and cash equivalents
(4
)
 
(275
)
Net (decrease) increase in cash and cash equivalents
(43,671
)
 
21,357

Cash and cash equivalents at beginning of period
125,888

 
104,531

Cash and cash equivalents at end of period
$
82,217

 
$
125,888


7



Omnicell, Inc.
Reconciliation of GAAP to Non-GAAP
(Unaudited, in thousands, except per share data and percentages)
 
 
 
 
 
 
Three Months Ended
 
Years Ended
 
 
 
 
 
 
December 31,
2015
 
September 30,
2015
 
December 31,
2014
 
December 31,
2015
 
December 31,
2014
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Reconciliation of GAAP net income to non-GAAP net income:
 
 
 
 
 
 
GAAP net income
$
7,655

 
$
8,036

 
$
9,235

 
$
30,760

 
$
30,518

Adjustments:
 
 
 
 
 
 
 
 
 
 
Share-based compensation expense:
 
 
 
 
 
 
 
 
 
 
 
Cost of revenues
481

 
581

 
483

 
2,111

 
1,456

 
 
Operating expenses
3,173

 
3,385

 
3,692

 
12,810

 
11,329

 
 
Total share-based compensation expense  (a)
3,654

 
3,966

 
4,175

 
14,921

 
12,785

 
Amortization of acquired intangibles:
 
 
 
 
 
 
 
 
 
 
 
Cost of revenues
547

 
570

 
368

 
2,016

 
1,472

 
 
Operating expenses
1,354

 
1,408

 
865

 
4,904

 
3,003

 
 
Gross amortization of acquired intangibles:
1,901

 
1,978

 
1,233

 
6,920

 
4,475

 
 
Income tax effect (b)
 
(745
)
 
(775
)
 
(383
)
 
(2,448
)
 
(1,654
)
 
 
Amortization of acquired intangibles, net
1,156

 
1,203

 
850

 
4,472

 
2,821

 
Acquisition related expenses
2,898

 

 

 
2,898

 

 
 
Income tax effect  (b)
 
(920
)
 

 

 
(920
)
 

 
Acquisition related expenses, net
1,978

 

 

 
1,978

 

 
Gain on business combination

 

 

 
(3,443
)
 

Non-GAAP net income
$
14,443

 
$
13,205

 
$
14,260

 
$
48,688

 
$
46,124

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Reconciliation of GAAP gross profit to non-GAAP gross profit:
 
 
 
 
 
 
 
Revenues
 
$
130,316

 
$
125,234

 
$
121,541

 
$
484,559

 
$
440,900

 
GAAP gross profit
65,080

 
63,703

 
63,779

 
247,930

 
233,860

 
GAAP gross margin
49.9%
 
50.9%
 
52.5%
 
51.2%
 
53.0%
 
 
Share-based compensation expense
481

 
581

 
483

 
2,111

 
1,456

 
 
Amortization of acquired intangibles
547

 
570

 
368

 
2,016

 
1,472

 
Non-GAAP gross profit
$
66,108

 
$
64,854

 
$
64,630

 
$
252,057

 
$
236,788

 
Non-GAAP gross margin
50.7%
 
51.8%
 
53.2%
 
52.0%
 
53.7%
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Reconciliation of GAAP operating expenses to non-GAAP operating expenses:
 
 
 
 
GAAP operating expenses
$
53,110

 
$
49,844

 
$
50,305

 
$
199,298

 
$
184,277

 
GAAP operating expenses % to total revenue
40.8%
 
39.8%
 
41.4%
 
41.1%
 
41.8%
 
Share-based compensation expense
(3,173
)
 
(3,385
)
 
(3,692
)
 
(12,810
)
 
(11,329
)
 
Amortization of acquired intangibles
(1,354
)
 
(1,408
)
 
(865
)
 
(4,904
)
 
(3,003
)
 
Acquisition related expenses
(2,898
)
 

 

 
(2,898
)
 

 
Gain on business combination

 

 

 
3,443

 

Non-GAAP operating expenses
$
45,685

 
$
45,051

 
$
45,748

 
$
182,129

 
$
169,945

 
Non-GAAP operating expenses % to total revenue
35.1%
 
36.0%
 
37.6%
 
37.6%
 
38.5%
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 

8



 
 
 
 
 
 
Three Months Ended
 
Years Ended
 
 
 
 
 
 
December 31,
2015
 
September 30,
2015
 
December 31,
2014
 
December 31,
2015
 
December 31,
2014
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Reconciliation of GAAP income from operations to non-GAAP income from operations:
 
 
 
 
GAAP income from operations
$
11,970

 
$
13,859

 
$
13,474

 
$
48,632

 
$
49,583

 
GAAP operating income % to total revenue
9.2%
 
11.1%
 
11.1%
 
10.0%
 
11.2%
 
Share-based compensation expense
3,654

 
3,966

 
4,175

 
14,921

 
12,785

 
Amortization of acquired intangibles
1,901

 
1,978

 
1,233

 
6,920

 
4,475

 
Acquisition related expenses
2,898

 

 

 
2,898

 

 
Gain on business combination

 

 

 
(3,443
)
 

Non-GAAP income from operations
$
20,423

 
$
19,803

 
$
18,882

 
$
69,928

 
$
66,843

 
Non-GAAP operating income % to total revenue
15.7%
 
15.8%
 
15.5%

14.4%
 
15.2%
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
GAAP shares - diluted
36,172

 
36,613

 
36,585

 
36,718

 
36,622

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
GAAP net income per share - diluted
$
0.21

 
$
0.22

 
$
0.25

 
$
0.84

 
$
0.83

Adjustments:
 
 
 
 
 
 
 
 
 
 
Share-based compensation expense
0.11

 
0.11

 
0.12

 
0.41

 
0.35

 
Amortization of acquired intangibles, net
0.03

 
0.03

 
0.02

 
0.12

 
0.08

 
Acquisition related expenses, net
0.05

 

 

 
0.05

 

 
Gain on business combination

 

 

 
(0.09
)
 

Non-GAAP net income per share - diluted
$
0.40

 
$
0.36

 
$
0.39

 
$
1.33

 
$
1.26

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Reconciliation of GAAP net income to non-GAAP adjusted EBITDA:
 
 
 
 
 
 
GAAP net income
$
7,655

 
$
8,036

 
$
9,235

 
$
30,760

 
$
30,518

Add back:
 
 
 
 
 
 
 
 
 
 
Share-based compensation expense
3,654

 
3,966

 
4,175

 
14,921

 
12,785

 
Interest (income) and expense, net
89

 
138

 
18

 
410

 
38

 
Depreciation and amortization expense
7,182

 
6,482

 
5,566

 
25,639

 
20,272

 
Income tax expense
3,562

 
5,177

 
4,162

 
15,484

 
17,986

 
Acquisition related expenses, net
2,898

 

 

 
2,898

 

 
Gain on business combination

 

 

 
(3,443
)
 

Non-GAAP adjusted EBITDA (c)
$
25,040

 
$
23,799

 
$
23,156

 
$
86,669

 
$
81,599

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 

____________________________________________

(a)  
This adjustment reflects the accounting impact of non-cash stock-based compensation expense for the periods presented.
(b)  
Tax effects are calculated using the effective tax rates for the respective periods presented.
(c)  
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 as excluding certain non-GAAP adjustments.

 







9





10



Omnicell, Inc.
Segmented Information
(Unaudited, in thousands, except for percentages)


 
Three Months Ended December 31, 2015
 
Three Months Ended December 31, 2014
 
Automation and
Analytics
 
Medication
Adherence
 
Total
 
Automation and
Analytics
 
Medication
Adherence
 
Total
 
 
 
 
Revenues
$
105,874

 
$
24,442

 
$
130,316

 
$
98,347

 
$
23,194

 
$
121,541

Cost of revenues
48,020

 
17,216

 
65,236

 
41,983

 
15,779

 
57,762

Gross profit
57,854

 
7,226

 
65,080

 
56,364

 
7,415

 
63,779

Gross margin %
54.6%
 
29.6%
 
49.9%
 
57.3%
 
32.0%
 
52.5%
 
 
 
 
 
 
 
 
 
 
 
 
Operating expenses
28,889

 
5,937

 
34,826

 
27,363

 
6,313

 
33,676

Income from segment operations
$
28,965

 
$
1,289

 
30,254

 
$
29,001

 
$
1,102

 
30,103

Operating margin %
27.4%
 
5.3%
 
23.2%
 
29.5
%
 
4.8
%
 
24.8
%
 
 
 
 
 
 
 
 
 
 
 
 
Corporate costs
 
 
 
 
18,284

 
 
 
 
 
16,629

Income from operations
 
 
 
 
$
11,970

 
 
 
 
 
$
13,474



 


11



Omnicell, Inc.
Segmented Information
(Unaudited, in thousands, except for percentages)



 
Year Ended December 31, 2015
 
Year Ended December 31, 2014
 
Automation and
Analytics
 
Medication
Adherence
 
Total
 
Automation and
Analytics
 
Medication
Adherence
 
Total
 
 
 
 
Revenues
$
390,321

 
$
94,238

 
$
484,559

 
$
354,095

 
$
86,805

 
$
440,900

Cost of revenues
171,943

 
64,686

 
236,629

 
151,327

 
55,713

 
207,040

Gross profit
218,378

 
29,552

 
247,930

 
202,768

 
31,092

 
233,860

Gross margin %
55.9%
 
31.4%
 
51.2%
 
57.3%
 
35.8%
 
53.0%
 
 
 
 
 
 
 
 
 
 
 
 
Operating expenses
114,084

 
24,258

 
138,342

 
105,929

 
20,586

 
126,515

Income from segment operations
$
104,294

 
$
5,294

 
109,588

 
$
96,839

 
$
10,506

 
107,345

Operating margin %
26.7%
 
5.6%
 
22.6%
 
27.3%
 
12.1%
 
24.3%
 
 
 
 
 
 
 
 
 
 
 
 
Corporate costs
 
 
 
 
60,956

 
 
 
 
 
57,762

Income from operations
 
 
 
 
$
48,632

 
 
 
 
 
$
49,583



 







12



Omnicell, Inc.
Segment Information Non-GAAP Gross Margin and Non-GAAP Operating Margin
(Unaudited, in thousands, except for percentages)

 
Three Months Ended December 31, 2015
 
Automation and
Analytics
 
Medication
Adherence
 
Total
 
 
 
 
 
 
 
 
 
 
 
 
Revenues
$
105,874

 
 
 
$
24,442

 
 
 
$
130,316

 
 
 
 
 
 
 
 
 
 
 
 
 
 
GAAP Gross profit
$
57,854

 
54.6%
 
$
7,226

 
29.6%
 
$
65,080

 
49.9%
Plus:
 
 
 
 
 
 
 
 
 
 
 
a) Stock-based compensation expense
411

 
0.4%
 
70

 
0.3%
 
481

 
0.4%
b) Amortization expense of acquired intangible
assets and other acquisition-related expenses
214

 
0.2%
 
333

 
1.4%
 
547

 
0.4%
Non-GAAP Gross profit
$
58,479

 
55.2%
 
$
7,629

 
31.2%
 
$
66,108

 
50.7%
 
 
 
 
 
 
 
 
 
 
 
 
GAAP Operating income
$
28,965

 
27.4%
 
$
1,289

 
5.3%
 
$
30,254

 
23.2%
Plus:
 
 
 
 
 
 
 
 
 
 
 
a) Stock-based compensation expense
1,472

 
1.4%
 
196

 
0.8%
 
1,668

 
1.3%
b) Amortization expense of acquired intangible
assets and other acquisition-related expenses
828

 
0.8%
 
1,072

 
4.4%
 
1,900

 
1.5%
Non-GAAP Operating income
$
31,265

 
29.5%
 
$
2,557

 
10.5%
 
33,822

 
26.0%
 
 
 
 
 
 
 
 
 
 
 
 
GAAP Corporate costs
 
 
 
 
 
 
 
 
18,284

 
14.0%
Less: Stock-based compensation expense
 
 
 
 
 
 
 
 
1,986

 
1.5%
Less: Acquisition related expenses
 
 
 
 
 
 
 
 
2,898

 
2.2%
Non-GAAP Corporate costs
 
 
 
 
 
 
 
 
13,400

 
10.3%
 
 
 
 
 
 
 
 
 
 
 
 
Non-GAAP Income from operations
 
 
 
 
 
 
 
 
$
20,422

 
15.7%

 



13




 
Three Months Ended December 31, 2014
 
Automation and
Analytics
 
Medication
Adherence
 
Total
 
 
 
 
 
 
 
 
 
 
 
 
Revenues
$
98,347

 
 
 
$
23,194

 
 
 
$
121,541

 
 
 
 
 
 
 
 
 
 
 
 
 
 
GAAP Gross profit
$
56,364

 
57.3%
 
$
7,415

 
32.0%
 
$
63,779

 
52.5%
Plus:
 
 
 
 
 
 
 
 
 
 
 
a) Stock-based compensation expense
348

 
0.4%
 
135

 
0.6%
 
483

 
0.4%
b) Amortization expense of acquired intangible
assets and other acquisition-related expenses
35

 
0.0%
 
333

 
1.4%
 
368

 
0.3%
Non-GAAP Gross profit
$
56,747

 
57.7%
 
$
7,883

 
34.0%
 
$
64,630

 
53.2%
 
 
 
 
 
 
 
 
 
 
 
 
GAAP Operating income
$
29,001

 
29.5%
 
$
1,102

 
4.8%
 
$
30,103

 
24.8%
Plus:
 
 
 
 
 
 
 
 
 
 
 
a) Stock-based compensation expense
1,679

 
1.7%
 
205

 
0.9%
 
1,884

 
1.6%
b) Amortization expense of acquired intangible
assets and other acquisition-related expenses
147

 
0.1%
 
1,086

 
4.7%
 
1,233

 
1.0%
 
 
 
 
 
 
 
 
 
 
 
 
Non-GAAP Operating income
$
30,827

 
31.3%
 
$
2,393

 
10.3%
 
33,220

 
27.3%
 
 
 
 
 
 
 
 
 
 
 
 
GAAP Corporate costs
 
 
 
 
 
 
 
 
16,629

 
13.7%
Less: Stock-based compensation expense
 
 
 
 
 
 
 
 
2,291

 
1.9%
Non-GAAP Corporate costs
 
 
 
 
 
 
 
 
14,338

 
11.8%
 
 
 
 
 
 
 
 
 
 
 
 
Non-GAAP Income from operations
 
 
 
 
 
 
 
 
$
18,882

 
15.5%

 




14