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Omnicell Announces Second Quarter 2018 Results

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Omnicell Announces Second Quarter 2018 Results

GAAP revenues of $189 million, up 4.2% year-over-year

GAAP net income per diluted share of $0.16, up $0.11 year-over-year

Non-GAAP revenues of $189 million, up 4.0% year-over-year

Non-GAAP net income per diluted share of $0.46, up $0.13 year-over-year

PR Newswire

MOUNTAIN VIEW, Calif., July 26, 2018 /PRNewswire/ -- Omnicell, Inc. (NASDAQ:OMCL), a leading provider of medication and supply management solutions to healthcare systems, today announced results for its second quarter ended June 30, 2018.

Omnicell, Inc. logo. (PRNewsFoto/Omnicell, Inc.)

GAAP Results

GAAP revenues for the second quarter of 2018 were $188.7 million, up $7.6 million, or 4.2% from the second quarter of 2017. GAAP revenues for the six months ended June 30, 2018 were $371.3 million, up $41.7 million, or 12.7% from the six months ended June 30, 2017.

Second quarter 2018 GAAP net income as reported was $6.6 million, or $0.16 per diluted share. This compares to GAAP net income of $1.9 million, or $0.05 per diluted share, for the second quarter of 2017.

GAAP net income for the six months ended June 30, 2018 was $9.3 million, or $0.23 per diluted share. This compares to GAAP net loss of $8.5 million, or a net loss of $0.23 per diluted share, for the six months ended June 30, 2017.

Non-GAAP Results

Non-GAAP revenues for the second quarter of 2018 were $188.7 million, up $7.3 million, or 4.0% from the second quarter of 2017. Non-GAAP revenues for the six months ended June 30, 2018 were $371.3 million, up $41.1 million, or 12.4% from the six months ended June 30, 2017.

Non-GAAP net income for the second quarter of 2018 was $18.4 million, or $0.46 per diluted share. This compares to non-GAAP net income of $12.8 million, or $0.33 per diluted share, for the second quarter of 2017.

Non-GAAP net income for the six months ended June 30, 2018 was $29.8 million, or $0.75 per diluted share. This compares to non-GAAP net income of $15.3 million, or $0.40 per diluted share, for the six months ended June 30, 2017.

Non-GAAP net income for each period excludes, when applicable, the effect of share-based compensation expense, amortization expense of acquired intangible assets, acquisition-related expenses, fair value adjustments related to business acquisitions, restructuring and severance-related expenses, tax reform and restructuring benefits, contingent gains, and amortization of debt issuance cost.

Effective January 1, 2018, the Company adopted the new revenue recognition accounting standard, ASC 606, "Revenue from Contracts with Customers," utilizing the full retrospective transition method. All 2017 financial results have been adjusted to reflect the change.

"Medication management is playing an increasingly strategic role in patient outcomes and the financial success of healthcare institutions," said Randall Lipps, chairman, president, chief executive officer, and founder of Omnicell. "With a continued focus on digital transformation and strategic partnerships, we are driving efficiency and supporting patient safety through Omnicell's industry-leading platform."

2018 Guidance

For the third quarter of 2018, the Company expects non-GAAP revenues to be between $200 million and $206 million. The Company expects third quarter 2018 non-GAAP earnings to be between $0.52 and $0.57 per share.

For the year 2018, the Company expects product bookings to be between $630 million and $665 million. The Company expects non-GAAP revenues to be between $780 million and $800 million, and non-GAAP earnings to be between $1.90 and $2.05 per share.

The table below summarizes 2018 guidance outlined above.


Q3'18

Total Year 2018

Product Bookings

Not provided

$630 million - $665 million

Non-GAAP Revenues

$200 million - $206 million

$780 million - $800 million

Non-GAAP EPS

$0.52 - $0.57

$1.90 - $2.05

Omnicell Conference Call Information

Omnicell will hold a conference call today, Thursday, July 26, 2018 at 1:30 p.m. PT to discuss second 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 7290938. 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 September 6, 2018. 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 7290938.

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. Omnicell is revolutionizing the patient medication experience from hospital to home by empowering providers to keep each patient at the center of care. The Company's autonomous approach to medication management leverages a differentiated platform for hardware and workflow software solutions, real-time predictive intelligence, and performance-driven partnerships to help drive operational, financial, and clinical success for customers.

Supporting the highest level of patient safety is essential to excellent patient care. 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 delivering solutions for medication availability, affordability, safety, and adherence. Over 4,500 facilities worldwide use Omnicell® automation and analytics solutions to increase operational efficiency, reduce medication errors, deliver actionable intelligence, and improve patient safety.

Omnicell's innovative medication adherence solutions, used by over 32,000 institutional and retail pharmacies in North America and the United Kingdom, are designed to improve patient engagement and adherence to prescriptions, helping to reduce costly hospital readmissions.

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 pipeline; new products and solutions yet to be generally available; new sales opportunities; and projected bookings, revenues, earnings per share, profit, and market share growth. Risks that contribute to the uncertain nature of the forward-looking statements include (i) our ability to take advantage of the growth opportunities in medication management across the spectrum of healthcare settings from the hospital, long-term care, to home care, (ii) our ability to develop and commercialize new products, including the XR2 Automated Central Pharmacy System and the IVX Workflow semi-automated workflow solution, (iii) unfavorable general economic and market conditions, (iv) risks to growth and acceptance of our products and services, including competitive conversions, (v) growth of the clinical automation and workflow automation market generally, (vi) potential of increasing competition, (vii) potential regulatory changes, (viii) our ability to improve sales productivity to grow product bookings, and (ix) our ability 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 ("SEC"). 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 GAAP. Our management evaluates and makes operating decisions using various performance measures. In addition to Omnicell's GAAP results, we also consider non-GAAP revenues, 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 revenues, 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)

Share-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)

Amortization of acquired intangible assets. 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 revenues. In connection with recent acquisitions, 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)

Acquisition-related expenses. We excluded from the non-GAAP results the expenses which are related to 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.



f) 

Severance and other related expenses. We excluded from our non-GAAP results the expenses which are related to restructuring events. 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 expenses provides more meaningful comparisons of the financial results to our historical operations and forward-looking guidance, and the financial results of peer companies.



g)

Tax impact from restructuring activity. We excluded from our non-GAAP results the tax impacts related to restructuring activity. These impacts 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 impacts provides more meaningful comparisons of the financial results to our historical operations and forward-looking guidance, and the financial results of peer companies.



h)

Contingent gain. We excluded from our non-GAAP results the contingent gain related to a settlement agreement associated with the Ateb acquisition. This contingent gain is unrelated to our ongoing operations, and we do not expect it to occur in the ordinary course of business. We believe that excluding this contingent gain provides more meaningful comparisons of the financial results to our historical operations and forward-looking guidance, and the financial results of 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 or other items.

We believe that the presentation of these non-GAAP financial measures is warranted for several reasons:

a)

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.



b)

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.



c)

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.



d)

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 Accounting Standard Codification ("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 share-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 share-based compensation expense, as well as 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:

a) 

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.



b)

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.

The Company's 2018 guidance for non-GAAP earnings per share, as well as certain projections discussed in today's teleconference, exclude "certain items," which include but are not limited to: unusual gains and losses; costs associated with future restructurings; acquisition-related expenses; and certain tax and litigation outcomes. We do not provide a reconciliation of non-GAAP earnings per share guidance to the comparable GAAP measure as these items are inherently uncertain and difficult to estimate, and cannot be predicted without unreasonable effort. We believe such a reconciliation would imply a degree of precision that could be confusing to investors. These items may also have a material impact on GAAP earnings per share in future periods.

 

Omnicell, Inc.

Condensed Consolidated Statements of Operations

(Unaudited, in thousands, except per share data)



Three Months Ended


June 30, 2018


June 30, 2017



As Adjusted*


As Reported


Change

Revenues:








Product revenues

$

134,636



$

130,205



$

128,056



$

2,149


Services and other revenues

54,037



50,837



52,829



(1,992)


Total revenues

188,673



181,042



180,885



157


Cost of revenues:








Cost of product revenues

75,076



81,738



81,738




Cost of services and other revenues

24,814



21,172



21,172




Total cost of revenues

99,890



102,910



102,910




Gross profit

88,783



78,132



77,975



157


Operating expenses:








Research and development

15,512



16,911



16,911




Selling, general, and administrative

65,937



61,922



63,468



(1,546)


Total operating expenses

81,449



78,833



80,379



(1,546)


Income (loss) from operations

7,334



(701)



(2,404)



1,703


Interest and other income (expense), net

(896)



196



196




Income (loss) before provision for income taxes

6,438



(505)



(2,208)



1,703


Provision for (benefit from) income taxes

(150)



(2,385)



(3,045)



660


Net income (loss)

$

6,588



$

1,880



$

837



$

1,043


Net income (loss) per share:








Basic

$

0.17



$

0.05



$

0.02



$

0.03


Diluted

$

0.16



$

0.05



$

0.02



$

0.03


Weighted average shares outstanding:








Basic

38,970



37,250



37,250




Diluted

40,000



38,370



38,370






*

As adjusted for full retrospective adoption of Accounting Standard Codification ("ASC") 606, "Revenue from Contracts with Customers." The adjustment also includes a $0.2 million reclassification from services and other revenues to product revenues to conform with current-period presentation.

 

Omnicell, Inc.

Condensed Consolidated Statements of Operations

(Unaudited, in thousands, except per share data)



Six Months Ended


June 30, 2018


June 30, 2017



As Adjusted*


As Reported


Change

Revenues:








Product revenues

$

265,295



$

228,996



$

226,986



$

2,010


Services and other revenues

105,997



100,599



104,453



(3,854)


Total revenues

371,292



329,595



331,439



(1,844)


Cost of revenues:








Cost of product revenues

150,493



145,326



145,326




Cost of services and other revenues

49,561



43,946



43,946




Total cost of revenues

200,054



189,272



189,272




Gross profit

171,238



140,323



142,167



(1,844)


Operating expenses:








Research and development

32,049



33,714



33,714




Selling, general, and administrative

131,222



123,862



128,093



(4,231)


Total operating expenses

163,271



157,576



161,807



(4,231)


Income (loss) from operations

7,967



(17,253)



(19,640)



2,387


Interest and other income (expense), net

(3,625)



(2,260)



(2,260)




Income (loss) before provision for income taxes

4,342



(19,513)



(21,900)



2,387


Provision for (benefit from) income taxes

(4,966)



(11,058)



(11,983)



925


Net income (loss)

$

9,308



$

(8,455)



$

(9,917)



$

1,462


Net income (loss) per share:








Basic

$

0.24



$

(0.23)



$

(0.27)



$

0.04


Diluted

$

0.23



$

(0.23)



$

(0.27)



$

0.04


Weighted average shares outstanding:








Basic

38,804



37,046



37,046




Diluted

39,854



37,046



37,046






*

As adjusted for full retrospective adoption of ASC 606, "Revenue from Contracts with Customers." The adjustment also includes a $0.3 million reclassification from services and other revenues to product revenues to conform with current-period presentation.

 

Omnicell, Inc.

Condensed Consolidated Balance Sheets

(Unaudited, in thousands)



June 30, 2018


December 31, 2017



As Adjusted*


As Reported


Change

ASSETS

Current assets:








Cash and cash equivalents

$

46,168



$

32,424



$

32,424



$


Accounts receivable and unbilled, net

174,570



190,046



189,227



819


Inventories, net

103,732



96,137



96,137




Prepaid expenses

18,266



20,392



36,060



(15,668)


Other current assets

16,122



13,273



13,273




Total current assets

358,858



352,272



367,121



(14,849)


Property and equipment, net

50,884



42,595



42,595




Long-term investment in sales-type leases, net

16,707



15,435



15,435




Goodwill

336,550



337,751



337,751




Intangible assets, net

155,750



168,107



168,107




Long-term deferred tax assets

9,451



9,454



9,454




Prepaid commissions

38,620



41,432





41,432


Other long-term assets

59,655



49,316



39,841



9,475


Total assets

$

1,026,475



$

1,016,362



$

980,304



$

36,058










LIABILITIES AND STOCKHOLDERS' EQUITY

Current liabilities:








Accounts payable

$

35,261



$

48,290



$

48,290



$


Accrued compensation

31,168



27,241



27,241




Accrued liabilities

31,721



35,693



35,693




Long-term debt, current portion, net

17,708



15,208



15,208




Deferred revenues, net

85,776



78,774



86,104



(7,330)


Total current liabilities

201,634



205,206



212,536



(7,330)


Long-term, deferred revenues

8,957



10,623



17,244



(6,621)


Long-term deferred tax liabilities

34,788



41,446



28,579



12,867


Other long-term liabilities

11,394



9,829



9,829




Long-term debt, net

181,062



194,917



194,917




Total liabilities

437,835



462,021



463,105



(1,084)


Total stockholders' equity

588,640



554,341



517,199



37,142


Total liabilities and stockholders' equity

$

1,026,475



$

1,016,362



$

980,304



$

36,058




*

As adjusted for full retrospective adoption of ASC 606, "Revenue from Contracts with Customers."

 

Omnicell, Inc.

Condensed Consolidated Statements of Cash Flows

(Unaudited, in thousands)



Six months ended June 30,


2018


2017*

Operating Activities




Net income (loss)

$

9,308



$

(8,455)


Adjustments to reconcile net income (loss) to net cash provided by operating activities:




Depreciation and amortization

24,829



25,942


Loss on disposal of fixed assets



79


Share-based compensation expense

13,766



11,056


Income tax benefits from employee stock plans



11


Deferred income taxes

(6,655)



(11,722)


Amortization of debt financing fees

1,145



795


Changes in operating assets and liabilities:




Accounts receivable and unbilled

15,476



(1,058)


Inventories

(9,789)



(12,226)


Prepaid expenses

2,126



128


Other current assets

(2,283)



202


Investment in sales-type leases

(1,838)



5,482


Prepaid commissions

2,812



1,554


Other long-term assets

(2,797)



(622)


Accounts payable

(12,229)



23,357


Accrued compensation

3,927



4,529


Accrued liabilities

(2,574)



2,165


Deferred revenues

5,336



(3,412)


Other long-term liabilities

167



1,119


Net cash provided by operating activities

40,727



38,924


Investing Activities




Purchases of intangible assets, intellectual property, and patents



(160)


Software development for external use

(13,091)



(6,748)


Purchases of property and equipment

(14,985)



(6,493)


Business acquisition, net of cash acquired



(4,446)


Net cash used in investing activities

(28,076)



(17,847)


Financing Activities




Proceeds from debt



10,000


Repayment of debt and revolving credit facility

(12,500)



(70,500)


Proceeds from issuances under stock-based compensation plans

16,117



15,783


Employees' taxes paid related to restricted stock units

(3,062)



(2,638)


Net cash provided by (used in) financing activities

555



(47,355)


Effect of exchange rate changes on cash and cash equivalents

538



(1,274)


Net increase (decrease) in cash and cash equivalents

13,744



(27,552)


Cash and cash equivalents at beginning of period

32,424



54,488


Cash and cash equivalents at end of period

$

46,168



$

26,936




*

As adjusted for full retrospective adoption of ASC 606, "Revenue from Contracts with Customers."

 

Omnicell, Inc.

Reconciliation of GAAP to Non-GAAP

(Unaudited, in thousands, except per share data and percentage)



Three Months Ended


Six Months Ended


June 30,
2018


June 30,
2017*


June 30,
2018


June 30,
2017*









Reconciliation of GAAP revenues to non-GAAP revenues:





GAAP revenues

$

188,673



$

181,042



$

371,292



$

329,595


Acquisition accounting impact related to deferred revenues



313





626


Non-GAAP revenues

$

188,673



$

181,355



$

371,292



$

330,221










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




GAAP gross profit

$

88,783



$

78,132



$

171,238



$

140,323


GAAP gross margin

47.1

%


43.2

%


46.1

%


42.6

%

Share-based compensation expense

1,177



864



2,196



1,846


Amortization of acquired intangibles

2,756



2,848



5,547



5,685


Acquisition accounting impact related to deferred revenues



313





626


Severance and other expenses







1,697


Non-GAAP gross profit

$

92,716



$

82,157



$

178,981



$

150,177


Non-GAAP gross margin

49.1

%


45.3

%


48.2

%


45.5

%









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



GAAP operating expenses

$

81,449



$

78,833



$

163,271



$

157,576


GAAP operating expenses % to total revenues

43.2

%


43.5

%


44.0

%


47.8

%

Share-based compensation expense

(6,061)



(4,681)



(11,570)



(9,210)


Amortization of acquired intangibles

(3,126)



(3,626)



(6,364)



(7,279)


Acquisition-related expenses







(126)


Severance and other expenses

(1,735)



(970)



(3,247)



(3,302)


Non-GAAP operating expenses

$

70,527



$

69,556



$

142,090



$

137,659


Non-GAAP operating expenses % to total revenues

37.4

%


38.4

%


38.3

%


41.7

%



*     As adjusted for full retrospective adoption of ASC 606, "Revenue from Contracts with Customers."




Three Months Ended


Six Months Ended


June 30,
2018


June 30,
2017*


June 30,
2018


June 30,
2017*

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

GAAP income (loss) from operations

$

7,334



$

(701)



$

7,967



$

(17,253)


GAAP operating income (loss) % to total revenues

3.9

%


(0.4)

%


2.1

%


(5.2)

%

Share-based compensation expense

7,238



5,545



13,766



11,056


Amortization of acquired intangibles

5,882



6,474



11,911



12,964


Acquisition accounting impact related to deferred revenues



313





626


Acquisition-related expenses







126


Severance and other expenses

1,735



970



3,247



4,999


Non-GAAP income (loss) from operations

$

22,189



$

12,601



$

36,891



$

12,518


Non-GAAP operating income (loss) % to total Non-GAAP revenues

11.8

%


6.9

%


9.9

%


3.8

%









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

GAAP net income (loss)

$

6,588



$

1,880



$

9,308



$

(8,455)


Tax benefit for restructuring activity





(4,205)




Share-based compensation expense

7,238



5,545



13,766



11,056


Amortization of acquired intangibles

5,882



6,474



11,911



12,964


Acquisition accounting impact related to deferred revenues



313





626


Acquisition-related expenses(c)

397



397



794



920


Severance and other expenses

1,911



970



3,599



4,999


Contingent gain

(2,456)





(2,456)




Tax effect of the adjustments above(a)

(1,204)



(2,817)



(2,907)



(6,836)


Non-GAAP net income

$

18,356



$

12,762



$

29,810



$

15,274










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

Shares - diluted GAAP

40,000



38,370



39,854



37,046










Shares - diluted Non-GAAP

40,000



38,370



39,854



38,103










GAAP net income (loss) per share - diluted

$

0.16



$

0.05



$

0.23



$

(0.23)


Tax benefit for restructuring activity





(0.11)




Share-based compensation expense

0.18



0.14



0.35



0.29


Amortization of acquired intangibles

0.15



0.17



0.30



0.34


Acquisition accounting impact related to deferred revenues



0.01





0.02


Acquisition-related expenses

0.01



0.01



0.02



0.03


Severance and other expenses

0.05



0.02



0.09



0.13


Contingent gain

(0.06)





(0.06)




Tax effect of the adjustments above(a)

(0.03)



(0.07)



(0.07)



(0.18)


Non-GAAP net income per share - diluted

$

0.46



$

0.33



$

0.75



$

0.40










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



GAAP net income (loss)

$

6,588



$

1,880



$

9,308



$

(8,455)


Share-based compensation expense

7,238



5,545



13,766



11,056


Interest (income) and expense, net

1,615



1,311



3,387



2,743


Depreciation and amortization expense

12,519



13,494



24,829



25,942


Acquisition accounting impact related to deferred revenues



313





626


Acquisition-related expenses

397



397



794



920


Severance and other expenses

1,911



728



3,599



4,493


Contingent gain

(2,456)





(2,456)




Income tax expense (benefit)

(150)



(2,385)



(4,966)



(11,058)


Non-GAAP Adjusted EBITDA

$

27,662



$

21,283



$

48,261



$

26,267




(a)

Tax effects calculated for all adjustments except tax benefits and share-based compensation expense, using an estimated annual effective tax rate of 21% for fiscal year 2018 and 35% for fiscal year 2017.

(b)

Defined as earnings before interest income and expense, taxes, depreciation and amortization, as well as excluding certain non-GAAP adjustments.

(c)

Includes amortization of debt financing fees associated with our debt facilities.

 

Omnicell, Inc.

Segmented Information

(Unaudited, in thousands, except for percentages)



Three Months Ended June 30, 2018


Three Months Ended June 30, 2017


Automation and
Analytics


Medication
Adherence


Total


Automation and
Analytics*


Medication
Adherence


Total*

Revenues

$

158,365



$

30,308



$

188,673



$

148,584



$

32,458



$

181,042


Cost of revenues

78,686



21,204



99,890



80,716



22,194



102,910


Gross profit

79,679



9,104



88,783



67,868



10,264



78,132


Gross margin %

50.3

%


30.0

%


47.1

%


45.7

%


31.6

%


43.2

%













Operating expenses

48,167



10,296



58,463



47,508



10,099



57,607


Income (loss) from segment operations

$

31,512



$

(1,192)



$

30,320



$

20,360



$

165



$

20,525


Operating margin %

19.9

%


(3.9)

%


16.1

%


13.7

%


0.5

%


11.3

%













Corporate costs





22,986







21,226


Income (loss) from operations





$

7,334







$

(701)




*

As adjusted for full retrospective adoption of ASC 606, "Revenue from Contracts with Customers."

 

Omnicell, Inc.

Segmented Information

(Unaudited, in thousands, except for percentages)



Six Months Ended June 30, 2018


Six Months Ended June 30, 2017


Automation and
Analytics


Medication
Adherence


Total


Automation and
Analytics*


Medication
Adherence


Total*

Revenues

$

309,771



$

61,521



$

371,292



$

270,754



$

58,841



$

329,595


Cost of revenues

156,928



43,126



200,054



149,477



39,795



189,272


Gross profit

152,843



18,395



171,238



121,277



19,046



140,323


Gross margin %

49.3

%


29.9

%


46.1

%


44.8

%


32.4

%


42.6

%













Operating expenses

96,558



20,495



117,053



95,570



21,295



116,865


Income (loss) from segment operations

$

56,285



$

(2,100)



$

54,185



$

25,707



$

(2,249)



$

23,458


Operating margin %

18.2

%


(3.4)

%


14.6

%


9.5

%


(3.8)

%


7.1

%













Corporate costs





46,218







40,711


Income (loss) from operations





$

7,967







$

(17,253)




*

As adjusted for full retrospective adoption of ASC 606, "Revenue from Contracts with Customers."

 

Omnicell, Inc.

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

(Unaudited, in thousands, except for percentages)



Three Months Ended June 30, 2018


Automation and
Analytics


Medication
Adherence


Total


Amount


% of
GAAP
Revenues


% of Non-
GAAP
Revenues


Amount


% of
GAAP
Revenues


% of Non-
GAAP
Revenues


Amount


% of
GAAP
Revenues


% of Non-
GAAP
Revenues

Revenues

$

158,365







$

30,308







$

188,673






Non-GAAP Revenues

$

158,365







$

30,308







$

188,673
























GAAP Gross profit

$

79,679



50.3

%




$

9,104



30.0

%




$

88,783



47.1

%



Share-based compensation expense

1,004



0.6

%


0.6

%


173



0.6

%


0.6

%


1,177



0.6

%


0.6

%

Amortization expense of acquired intangible assets

2,232



1.4

%


1.4

%


524



1.7

%


1.7

%


2,756



1.5

%


1.5

%

Non-GAAP Gross profit

$

82,915





52.4

%


$

9,801





32.3

%


$

92,716





49.1

%



















GAAP Operating income (loss)

$

31,512



19.9

%




$

(1,192)



(3.9)

%




$

30,320



16.1

%



Share-based compensation expense

3,148



2.0

%


2.0

%


489



1.6

%


1.6

%


3,637



1.9

%


1.9

%

Amortization expense of acquired intangible assets

4,204



2.7

%


2.7

%


1,678



5.5

%


5.5

%


5,882



3.1

%


3.1

%

Severance and other expenses

996



0.6

%


0.6

%


(25)



(0.1)

%


(0.1)

%


971



0.5

%


0.5

%

Non-GAAP Operating income

$

39,860





25.2

%


$

950





3.1

%


$

40,810





21.6

%



















GAAP Corporate costs













$

22,986



12.2

%



Share-based compensation expense













(3,601)



(1.9)

%


(1.9)

%

Severance and other expenses













(764)



(0.4)

%


(0.4)

%

Non-GAAP Corporate costs













$

18,621





9.9

%



















Non-GAAP Income from operations













$

22,189





11.8

%

 

Omnicell, Inc.

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

(Unaudited, in thousands, except for percentages)



Three Months Ended June 30, 2017




Automation and
Analytics*


Medication
Adherence


Total*


Amount


% of
GAAP
Revenues


% of Non-
GAAP
Revenues


Amount


% of
GAAP
Revenues


% of Non-
GAAP
Revenues


Amount


% of
GAAP
Revenues


% of Non-
GAAP
Revenues

Revenues

$

148,584







$

32,458







$

181,042






Acquisition accounting impact related to deferred revenues



%


%


313



1.0

%


1.0

%


313



0.2

%


0.2

%

Non-GAAP Revenues

$

148,584







$

32,771







$

181,355
























GAAP Gross profit

$

67,868



45.7

%




$

10,264



31.6

%




$

78,132



43.2

%



Share-based compensation expense

736



0.5

%


0.5

%


128



0.4

%


0.4

%


864



0.5

%


0.5

%

Amortization expense of acquired intangible assets

2,228



1.5

%


1.5

%


620



1.9

%


1.9

%


2,848



1.6

%


1.6

%

Acquisition accounting impact related to deferred revenues



%


%


313



1.0

%


1.0

%


313



0.2

%


0.2

%

Non-GAAP Gross profit

$

70,832





47.7

%


$

11,325





34.6

%


$

82,157





45.3

%



















GAAP Operating income (loss)

$

20,360



13.7

%




$

165



0.5

%




$

20,525



11.3

%



Share-based compensation expense

2,275



1.5

%


1.5

%


354



1.1

%


1.1

%


2,629



1.5

%


1.4

%

Amortization expense of acquired intangible assets

4,545



3.1

%


3.1

%


1,929



5.9

%


5.9

%


6,474



3.6

%


3.6

%

Acquisition accounting impact related to deferred revenues



%


%


313



1.0

%


1.0

%


313



0.2

%


0.2

%

Severance and other expenses

610



0.4

%


0.4

%




%


%


610



0.3

%


0.3

%

Non-GAAP Operating income

$

27,790





18.7

%


$

2,761





8.4

%


$

30,551





16.8

%



















GAAP Corporate costs













$

21,226



11.7

%



Share-based compensation expense













(2,916)



(1.6)

%


(1.6)

%

Severance and other expenses













(360)



(0.2)

%


(0.2)

%

Non-GAAP Corporate costs













$

17,950





9.9

%



















Non-GAAP Income from operations













$

12,601





6.9

%



*

As adjusted for full retrospective adoption of ASC 606, "Revenue from Contracts with Customers."

OMCL-E

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SOURCE Omnicell, Inc.

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