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Omnicell, Inc.$43.30($.60)(1.37%)

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 Omnicell Achieves Record Revenue in the Second Quarter 2017
   Thursday, July 27, 2017 4:01:00 PM ET

Omnicell, Inc. (OMCL ), a leading provider of medication and supply management solutions to healthcare systems, today announced results for its second quarter ended June 30, 2017.

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GAAP results: Revenue for the second quarter of 2017 was $180.9 million, up $30.3 million, or 20.1% from the first quarter of 2017, and up $8.0 million, or 4.6% from the second quarter of 2016. Revenue for the six months ended June 30, 2017 was $331.4 million, down $12.5 million, or 3.63% from the six months ended June 30, 2016.

Second quarter 2017 net income as reported in accordance with U.S. generally accepted accounting principles (GAAP) was $0.8 million, or $0.02 per diluted share. This compares to GAAP net loss of $10.8 million, or $0.29 per diluted share, for the first quarter of 2017, and GAAP net loss of $1.2 million, or $0.03 per diluted share, for the second quarter of 2016.

GAAP net loss for the six months ended June 30, 2017 was $9.9 million, or $0.27 per diluted share. GAAP net loss was $1.5 million, or $0.04 per diluted share, for the six months ended June 30, 2016.

Non-GAAP results: Non-GAAP revenue for the second quarter of 2017 was $181.2 million, up $30.3 million, or 20.1% from the first quarter of 2017, and up $5.6 million, or 3.2% from the second quarter of 2016. Non-GAAP revenue for the six months ended June 30, 2017 was $332.1 million, down $17.2 million, or 4.9% from the six months ended June 30, 2016.

Non-GAAP net income for the second quarter of 2017 was $11.7 million, or $0.31 per diluted share. This compares to non-GAAP net income of $2.1 million, or $0.06 per diluted share, first quarter of 2017 and $13.9 million, or $0.38 per diluted share, for the second quarter of 2016.

Non-GAAP net income for the six months ended June 30, 2017 was $13.8 million, or $0.36 per diluted share. This compares to non-GAAP net income of $26.7 million, or $0.73 per diluted share for the six months ended June 30, 2016.

Non-GAAP net income for each period presented excludes, when applicable, the effect of stock-based compensation expense, amortization expense of acquired intangible assets, acquisition related expenses, fair value adjustments related to business acquisitions, severance and integration-related expenses, and amortization of debt issuance cost.

"Omnicell completed a strong second quarter marked by record revenues and earnings results ahead of expectations," said Randall Lipps, Omnicell president, CEO and chairman. "We are proud of the company’s financial performance and our strategic execution aimed at supporting health systems in achieving their patient safety, operational and financial goals."

"I am particularly pleased by the momentum and broad adoption of our recent innovations, including the XT series," he added. "I believe we are positioned well for continued success in the future."

2017 Guidance:

For the third quarter of 2017, the Company expects both GAAP and non-GAAP revenue to be between $188 million and $194 million, and non-GAAP earnings to be between $0.38 and $0.45 per share.

For the year 2017, the Company expects product bookings to be between $570 million and $590 million. The Company expects both GAAP and non-GAAP revenue to be between $720 million and $740 million, and non-GAAP earnings to be between $1.22 and $1.34 per share.

Omnicell Conference Call Information

Omnicell will hold a conference call today, Thursday, July 27, 2017 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 36566159. 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 August 25, 2017. 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 36566159.

About Omnicell

Since 1992, Omnicell (OMCL ) has been inspired to create safer and more efficient ways to manage medications and supplies across all care settings. As a leader in medication and supply dispensing automation, central pharmacy automation, IV robotics, analytics software, and medication adherence and packaging systems, Omnicell is focused on improving care across the entire healthcare continuum-from the acute care hospital setting, to post-acute skilled nursing and long-term care facilities, to the patient’s home.

Over 4,000 customers worldwide use Omnicell? automation and analytics solutions to increase operational efficiency, reduce medication errors, deliver actionable intelligence and improve patient safety.

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 adherence to prescriptions, helping to reduce costly hospital readmissions.

Recent Omnicell acquisitions, including Ateb, add distinct capabilities, particularly in central pharmacy, IV robotics, and pharmacy software, creating the broadest medication management product portfolio in the industry.

For more information about Omnicell, Inc. please visit www.omnicell.com.

Forward-Looking Statements

To the extent any statements contained in this release deal with information that is not historical, these statements are "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. As such, they are subject to the occurrence of many events outside Omnicell’s control and are subject to various risk factors that could cause actual results to differ materially from those expressed or implied in any forward-looking statement. Such statements include, but are not limited to Omnicell’s momentum, pipeline and new sales opportunities, and projected bookings, profit and revenue growth. 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, our ability to successfully convert product backlog and sales quotes to our XT Series, our ability to execute the manufacturing ramp-up of XT Series, our ability to continue cost reduction efforts, and our ability to implement development and manufacturing Centers of Excellence, 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. Our management evaluates and makes operating decisions using various performance measures. In addition to Omnicell’s GAAP results, we also consider non-GAAP revenue, non-GAAP gross profit, non-GAAP operating expenses, non-GAAP net income, and non-GAAP net income per diluted share. Additionally, we calculate Adjusted EBITDA (another non-GAAP measure) by means of adjustments to GAAP Net Income. These non-GAAP results should not be considered as an alternative to gross profit, operating expenses, net income, net income per diluted share, or any other performance measure derived in accordance with GAAP. We present these non-GAAP results because we consider them to be important supplemental measures of Omnicell’s performance.

Our non-GAAP revenue, non-GAAP gross profit, non-GAAP operating expenses, non-GAAP net income and non-GAAP net income per diluted share are exclusive of certain items to facilitate management’s review of the comparability of Omnicell’s core operating results on a period to period basis because such items are not related to Omnicell’s ongoing core operating results as viewed by management. We define our "core operating results" as those revenues recorded in a particular period and the expenses incurred within that period that directly drive operating income in that period. Management uses these non-GAAP financial measures in making operating decisions because, in addition to meaningful supplemental information regarding operating performance, the measures give us a better understanding of how we should invest in research and development, fund infrastructure growth and evaluate the effectiveness of marketing strategies. In calculating the above non-GAAP results, management specifically adjusted for the following excluded items:

a) 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 revenue. 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) Inventory fair value adjustments. In connection with acquisition of Aesynt, business combination rules require us to account for the fair values of inventory acquired in our purchase accounting. The non-GAAP adjustment to the cost of revenues is intended to include the impact of such adjustment. We believe the adjustment is useful as a measure of the ongoing performance of our business.

f) Acquisition related expenses. We excluded from the non-GAAP results the expenses which are related to the recent acquisitions. These expenses are unrelated to our ongoing operations and we do not expect them to occur in the ordinary course of business. We believe that excluding these acquisition related expenses provides more meaningful comparisons of the financial results to our historical operations and forward looking guidance and the financial results of less acquisitive peer companies.

g) Severance and other related expenses. We excluded from our non-GAAP results the expenses which are related to the restructuring and integrations related 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 less acquisitive peer companies.

Management adjusts for the above items because management believes that, in general, these items possess one or more of the following characteristics: their magnitude and timing is largely outside of Omnicell’s control; they are unrelated to the ongoing operation of the business in the ordinary course; they are unusual and we do not expect them to occur in the ordinary course of business; or they are non-operational, or non-cash expenses involving stock compensation plans.

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

1) Such non-GAAP financial measures provide an additional analytical tool for understanding Omnicell’s financial performance by excluding the impact of items which may obscure trends in the core operating results of the business;

2) Since we have historically reported non-GAAP results to the investment community, we believe the inclusion of non-GAAP numbers provides consistency and enhances investors’ ability to compare our performance across financial reporting periods;

3) These non-GAAP financial measures are employed by Omnicell’s management in its own evaluation of performance and are utilized in financial and operational decision making processes, such as budget planning and forecasting; and

4) These non-GAAP financial measures facilitate comparisons to the operating results of other companies in our industry, which use similar financial measures to supplement their GAAP results, thus enhancing the perspective of investors who wish to utilize such comparisons in their analysis of our performance.

Set forth below are additional reasons why share-based compensation expense is excluded from our non-GAAP financial measures:

i) While share-based compensation calculated in accordance with ASC 718 constitutes an ongoing and recurring expense of Omnicell, it is not an expense that requires cash settlement by Omnicell. We therefore exclude these charges for purposes of evaluating core operating results. Thus, our non-GAAP measurements are presented exclusive of stock-based compensation expense to assist management and investors in evaluating our core operating results.

ii) We present ASC 718 share-based payment compensation expense in our reconciliation of non-GAAP financial measures on a pre-tax basis because the exact tax differences related to the timing and deductibility of share-based compensation, under ASC 718 are dependent upon the trading price of Omnicell’s common stock and the timing and exercise by employees of their stock options. As a result of these timing and market uncertainties the tax effect related to share-based compensation expense would be inconsistent in amount and frequency and is therefore excluded from our non-GAAP results.

Our Adjusted EBITDA calculation is defined as earnings before interest income and expense, taxes, depreciation and amortization, and non-cash expenses, including ASC 718 stock compensation expense, as well as certain non-GAAP adjustments.

As stated above, we present non-GAAP financial measures because we consider them to be important supplemental measures of performance. However, non-GAAP financial measures have limitations as an analytical tool and should not be considered in isolation or as a substitute for Omnicell’s GAAP results. In the future, we expect to incur expenses similar to certain of the non-GAAP adjustments described above and expect to continue reporting non-GAAP financial measures excluding such items. Some of the limitations in relying on non-GAAP financial measures are:

-- Omnicell’s stock option and stock purchase plans are important components of incentive compensation arrangements and will be reflected as expenses in Omnicell’s GAAP results for the foreseeable future under ASC 718.

-- Other companies, including companies in Omnicell’s industry, may calculate non-GAAP financial measures differently than Omnicell, limiting their usefulness as a comparative measure.

Pursuant to the requirements of SEC Regulation G, a detailed reconciliation between Omnicell’s non-GAAP and GAAP financial results is set forth in the financial tables at the end of this press release. Investors are advised to carefully review and consider this information strictly as a supplement to the GAAP results that are contained in this press release and in Omnicell’s SEC filings.

With respect to the Company’s expectations under "Guidance" above, and regarding certain projections discussed on today’s teleconference, reconciliation of non-GAAP earnings ranges per share guidance for the remainder of 2017, to the closest corresponding GAAP measures is not available without unreasonable efforts as we are unable to predict with reasonable certainty the matters we would allocate to "certain items," including unusual gains and losses, costs associated with future restructurings, acquisition-related expenses and litigation outcomes. These items are uncertain, complex, depend on various factors, have low visibility and could have a material impact on GAAP EPS in future periods.

Omnicell, Inc.
Condensed Consolidated Statements of Operations
(Unaudited, in thousands, except per share data)
                                         Three Months Ended                            Six Months Ended
                                         June 30, 2017  March 31, 2017  June 30, 2016  June 30, 2017  June 30, 2016
Revenues:
Product                                  $    128,056   $    98,930     $    130,674   $    226,986   $    258,569
Services and other revenues              52,829         51,624          42,233         104,453        85,342
Total revenues                           180,885        150,554         172,907        331,439        343,911
Cost of revenues:
Cost of product revenues                 81,738         63,588          76,306         145,326        148,224
Cost of services and other revenues      21,172         22,774          18,584         43,946         37,725
Total cost of revenues                   102,910        86,362          94,890         189,272        185,949
Gross profit                             77,975         64,192          78,017         142,167        157,962
Operating expenses:
Research and development                 16,911         16,803          13,794         33,714         27,632
Selling, general and administrative      63,468         64,625          64,341         128,093        128,596
Total operating expenses                 80,379         81,428          78,135         161,807        156,228
Income (loss) from operations            (2,404)        (17,236)        (118)          (19,640)       1,734
Interest and other income (expense), net 196            (2,456)         (1,881)        (2,260)        (4,052)
Loss before provision for income taxes   (2,208)        (19,692)        (1,999)        (21,900)       (2,318)
Benefit for income taxes                 (3,045)        (8,938)         (840)          (11,983)       (781)
Net income (loss)                        $    837       $    (10,754)   $    (1,159)   $    (9,917)   $    (1,537)
Net income (loss) per share:
Basic                                    $    0.02      $    (0.29)     $    (0.03)    $    (0.27)    $    (0.04)
Diluted                                  $    0.02      $    (0.29)     $    (0.03)    $    (0.27)    $    (0.04)
Weighted average shares outstanding:
Basic                                    37,250         36,840          35,987         37,046         35,864
Diluted                                  38,370         36,840          35,987         37,046         35,864
Omnicell, Inc.
Condensed Consolidated Balance Sheets
(Unaudited, in thousands)
                                               June 30, 2017  December 31, 2016
ASSETS
Current assets:
Cash and cash equivalents                      $    26,936    $     54,488
Accounts receivable, net                       151,010        150,303
Inventories                                    81,523         69,297
Prepaid expenses                               26,001         28,646
Other current assets                           10,511         12,674
Total current assets                           295,981        315,408
Property and equipment, net                    40,713         42,011
Long-term investment in sales-type leases, net 17,424         20,585
Goodwill                                       332,996        327,724
Intangible assets, net                         180,206        190,283
Long-term deferred tax assets                  5,627          4,041
Other long-term assets                         36,954         35,051
Total assets                                   $    909,901   $     935,103
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable                               $    53,287    $     27,069
Accrued compensation                           31,251         26,722
Accrued liabilities                            30,894         31,195
Long-term debt, current portion, net           10,910         8,410
Deferred revenue, net                          85,370         87,516
Total current liabilities                      211,712        180,912
Long-term, deferred revenue                    16,332         17,051
Long-term deferred tax liabilities             38,950         51,592
Other long-term liabilities                    9,879          8,210
Long-term debt, net                            183,526        245,731
Total liabilities                              460,399        503,496
Total stockholders’ equity                     449,502        431,607
Total liabilities and stockholders’ equity     $    909,901   $     935,103
Omnicell, Inc.
Condensed Consolidated Statements of Cash Flows
(Unaudited, in thousands)
                                                                                  Six months ended June 30,
                                                                                  2017            2016
Operating Activities
Net loss                                                                          $     (9,917)   $     (1,537)
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization                                                     25,942          29,197
(Gain) loss on disposal of fixed assets                                           79              1
Share-based compensation expense                                                  11,056          9,386
Income tax benefits from employee stock plans                                     11              681
Deferred income taxes                                                             (12,646)        (3,877)
Amortization of debt financing fees                                               795             795
Changes in operating assets and liabilities:
Accounts receivable                                                               (770)           (7,775)
Inventories                                                                       (12,226)        (6,919)
Prepaid expenses                                                                  2,645           (4,852)
Other current assets                                                              202             78
Investment in sales-type leases                                                   5,482           (6,558)
Other long-term assets                                                            (34)            1,019
Accounts payable                                                                  23,357          6,736
Accrued compensation                                                              4,529           210
Accrued liabilities                                                               2,165           (2,195)
Deferred revenue                                                                  (2,865)         4,895
Other long-term liabilities                                                       1,119           (2,398)
Net cash provided by operating activities                                         38,924          16,887
Investing Activities
Purchases of intangible assets, intellectual property and patents                 (160)           (1,185)
Software development for external use                                             (6,748)         (6,681)
Purchases of property and equipment                                               (6,493)         (5,938)
Business acquisition, net of cash acquired                                        (4,446)         (271,458)
Net cash used in investing activities                                             (17,847)        (285,262)
Financing Activities
Proceeds from debt                                                                10,000          247,051
Repayment of debt and revolving credit facility                                   (70,500)        (22,500)
Payment for contingent consideration                                              --              (3,000)
Proceeds from issuances under stock-based compensation plans                      15,783          8,639
Employees’ taxes paid related to restricted stock units                           (2,638)         (1,563)
Net cash provided by (used in) financing activities                               (47,355)        228,627
Effect of exchange rate changes on cash and cash equivalents                      (1,274)         (1,440)
Net decrease in cash and cash equivalents                                         (27,552)        (41,188)
Cash and cash equivalents at beginning of period                                  54,488          82,217
Cash and cash equivalents at end of period                                        $     26,936    $     41,029
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,          March 31,         June 30,      June 30,      June 30,
                                                                                  2017              2017              2016          2017          2016
Reconciliation of GAAP revenue to non-GAAP revenue:
GAAP revenue                                                                      $       180,885   $       150,554   $   172,907   $   331,439   $   343,911
                        Acquisition accounting impact related to deferred revenue 313               313               2,663         626           5,326
Non-GAAP revenue                                                                  $       181,198   $       150,867   $   175,570   $   332,065   $   349,237
Reconciliation of GAAP gross profit to non-GAAP gross profit:
GAAP gross profit                                                                 $       77,975    $       64,192    $   78,017    $   142,167   $   157,962
GAAP gross margin                                                                 43.1%             42.6%             45.1%         42.9%         45.9%
                        Share-based compensation expense                          864               982               644           1,846         1,193
                        Amortization of acquired intangibles                      2,848             2,837             5,214         5,685         10,425
                        Acquisition accounting impact related to deferred revenue 313               313               2,663         626           5,326
                        Inventory fair value adjustments                          --                --                920           --            1,841
                        Acquisitions related expenses                             --                --                28            --            28
                        Severance and other expenses*                             --                1,697             199           1,697         199
Non-GAAP gross profit                                                             $       82,000    $       70,021    $   87,685    $   152,021   $   176,974
Non-GAAP gross margin                                                             45.3%             46.4%             49.9%         45.8%         50.7%
Reconciliation of GAAP operating expenses to non-GAAP operating expenses:
GAAP operating expenses                                                           $       80,379    $       81,428    $   78,135    $   161,807   $   156,228
GAAP operating expenses % to total revenue                                        44.4%             54.1%             45.2%         48.8%         45.4%
                        Share-based compensation expense                          (4,681)           (4,529)           (4,851)       (9,210)       (8,193)
                        Amortization of acquired intangibles                      (3,626)           (3,653)           (3,838)       (7,279)       (7,786)
                        Acquisitions related expenses                             --                (126)             (223)         (126)         (2,572)
                        Severance and other expenses*                             (970)             (2,332)           (1,504)       (3,302)       (1,504)
Non-GAAP operating expenses                                                       $       71,102    $       70,788    $   67,719    $   141,890   $   136,173
Non-GAAP operating expenses % to total revenue                                    39.2%             46.9%             38.6%         42.7%         39.0%
* Other expenses include relocation charge of $102, depreciation adjustment related to purchase price allocation from acquisition of $243, integration consulting of $126 and restructuring rent expense of $485 for the three months ended June 30, 2017. Other expenses include relocation charge of $322 and depreciation adjustment related to purchase price allocation from acquisition of $508 for the six months ended June 30, 2017.
                                                                                         Three Months Ended                                  Six months ended
                                                                                         June 30,         March 31,         June 30,         June 30,          June 30,
                                                                                         2017             2017              2016             2017              2016
Reconciliation of GAAP income (loss) from operations to non-GAAP income (loss) from operations:
GAAP income (loss) from operations                                                       $      (2,404)   $      (17,236)   $      (118)     $      (19,640)   $    1,734
GAAP operating income (loss) % to total revenue                                          (1.3)%           (11.4)%           (0.1)%           (5.9)%            0.5%
                               Share-based compensation expense                          5,545            5,511             5,495            11,056            9,386
                               Amortization of acquired intangibles                      6,474            6,490             9,052            12,964            18,211
                               Acquisition accounting impact related to deferred revenue 313              313               2,663            626               5,326
                               Inventory fair value adjustments                          --               --                920              --                1,841
                               Acquisitions related expenses                             --               126               251              126               2,600
                               Severance and other expenses                              970              4,029             1,703            4,999             1,703
Non-GAAP income (loss) from operations                                                   $      10,898    $      (767)      $      19,966    $      10,131     $    40,801
Non-GAAP operating income (loss) % to total Non-GAAP revenue                             6.0%             (0.5)%            11.4%            3.1%              11.7%
Reconciliation of GAAP net income (loss) to non-GAAP net income:
GAAP net income (loss)                                                                   $      837       $      (10,754)   $      (1,159)   $      (9,917)    $    (1,537)
                               Share-based compensation expense                          5,545            5,511             5,495            11,056            9,386
                               Amortization of acquired intangibles                      6,474            6,490             9,052            12,964            18,211
                               Acquisition accounting impact related to deferred revenue 313              313               2,663            626               5,326
                               Inventory fair value adjustments                          --               --                920              --                1,841
                               Acquisitions related expenses                             397              523               1,046            920               3,395
                               Severance and other expenses                              970              4,029             1,703            4,999             1,703
                               Tax effect of the adjustments above(a)                    (2,817)          (4,019)           (5,846)          (6,836)           (11,581)
Non-GAAP net income                                                                      $      11,719    $      2,093      $      13,874    $      13,812     $    26,744
Reconciliation of GAAP net income (loss) per share - diluted to non-GAAP net income per share - diluted:
Shares - diluted GAAP                                                                    38,370           36,840            35,987           37,046            35,864
Shares - diluted Non-GAAP                                                                38,370           37,782            36,649           38,103            36,488
GAAP net income (loss) per share - diluted                                               $      0.02      $      (0.29)     $      (0.03)    $      (0.27)     $    (0.04)
                               Share-based compensation expense                          0.14             0.15              0.15             0.29              0.26
                               Amortization of acquired intangibles                      0.17             0.17              0.25             0.34              0.50
                               Acquisition accounting impact related to deferred revenue 0.01             0.01              0.07             0.02              0.15
                               Inventory fair value adjustments                          --               --                0.03             --                0.05
                               Acquisitions related expenses                             0.01             0.01              0.03             0.02              0.09
                               Severance and other expenses                              0.02             0.11              0.05             0.14              0.05
                               Tax effect of the adjustments above(a)                    (0.06)           (0.10)            (0.17)           (0.18)            (0.33)
Non-GAAP net income per share - diluted                                                  $      0.31      $      0.06       $      0.38      $      0.36       $    0.73
Reconciliation of GAAP net income (loss) to non-GAAP Adjusted EBITDA(b):
GAAP net income (loss)                                                                   $      837       $      (10,754)   $      (1,159)   $      (9,917)    $    (1,537)
                               Share-based compensation expense                          5,545            5,511             5,495            11,056            9,386
                               Interest (income) and expense, net                        1,311            1,432             1,348            2,743             3,095
                               Depreciation and amortization expense                     13,494           12,448            14,724           25,942            29,197
                               Acquisition accounting impact related to deferred revenue 313              313               2,663            626               5,326
                               Inventory fair value adjustments                          --               --                920              --                1,841
                               Acquisitions related expenses                             397              523               1,046            920               3,395
                               Severance expense                                         728              3,765             1,703            4,493             1,703
                               Income tax expense                                        (3,045)          (8,938)           (840)            (11,983)          (781)
Non-GAAP Adjusted EBITDA                                                                 $      19,580    $      4,300      $      25,900    $      23,880     $    51,625
(a) Tax effects calculated for all adjustments except share-based compensation expense, using an estimated annual effective tax rate of 35% for fiscal year 2017 and 38% for fiscal year 2016.
(b) Defined as earnings before interest income and expense, taxes, depreciation and amortization, as well as excluding certain non-GAAP adjustments.
Omnicell, Inc.
Segmented Information
(Unaudited, in thousands, except for percentages)
                               Three Months Ended June 30, 2017         Three Months Ended June 30, 2016
                               Automation    Medication   Total         Automation    Medication   Total
                               and           Adherence                  and           Adherence
                               Analytics                                Analytics
Revenues                       $   148,427   $   32,458   $   180,885   $   148,660   $   24,247   $   172,907
Cost of revenues               80,716        22,194       102,910       78,366        16,524       94,890
Gross profit                   67,711        10,264       77,975        70,294        7,723        78,017
Gross margin %                 45.6%         31.6%        43.1%         47.3%         31.9%        45.1%
Operating expenses             49,054        10,099       59,153        49,780        5,771        55,551
Income from segment operations $   18,657    $   165      $   18,822    $   20,514    $   1,952    $   22,466
Operating margin %             12.6%         0.5%         10.4%         13.8%         8.1%         13.0%
Corporate costs                                           21,226                                   22,584
Loss from operations                                      $   (2,404)                              $   (118)
Omnicell, Inc.
Segmented Information
(Unaudited, in thousands, except for percentages)
                                      Six Months Ended June 30, 2017             Six Months Ended June 30, 2016
                                      Automation    Medication    Total          Automation    Medication   Total
                                      and           Adherence                    and           Adherence
                                      Analytics                                  Analytics
Revenues                              $   272,598   $   58,841    $   331,439    $   297,605   $   46,306   $   343,911
Cost of revenues                      149,477       39,795        189,272        155,573       30,376       185,949
Gross profit                          123,121       19,046        142,167        142,032       15,930       157,962
Gross margin %                        45.2%         32.4%         42.9%          47.7%         34.4%        45.9%
Operating expenses                    99,801        21,295        121,096        101,985       11,382       113,367
Income (loss) from segment operations $   23,320    $   (2,249)   $   21,071     $   40,047    $   4,548    $   44,595
Operating margin %                    8.6%          (3.8)%        6.4%           13.5%         9.8%         13.0%
Corporate costs                                                   40,711                                    42,861
Income (loss) from operations                                     $   (19,640)                              $   1,734
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                  Medication                     Total
                                                          Analytics                       Adherence
                                                          Amount        % of     % of     Amount       % of     % of     Amount        % of     % of
                                                                        GAAP     Non-                  GAAP     Non-                   GAAP     Non-
                                                                        Revenue  GAAP                  Revenue  GAAP                   Revenue  GAAP
                                                                                 Revenue                        Revenue                         Revenue
Revenues                                                  $   148,427                     $   32,458                     $   180,885
Acquisition accounting impact related to deferred revenue --            --%      --%      313          1.0%     1.0%     313           0.2%     0.2%
Non-GAAP Revenues                                         $   148,427                     $   32,771                     $   181,198
GAAP Gross profit                                         $   67,711    45.6%    45.6%    $   10,264   31.6%    31.3%    $   77,975    43.1%    43.0%
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 revenue --            --%      --%      313          1.0%     1.0%     313           0.2%     0.2%
Non-GAAP Gross profit                                     $   70,675    47.6%    47.6%    $   11,325   34.9%    34.6%    $   82,000    45.3%    45.3%
GAAP Operating income                                     $   18,657    12.6%    12.6%    $   165      0.5%     0.5%     $   18,822    10.4%    10.4%
Share-based compensation expense                          2,275         1.5%     1.5%     354          1.1%     1.1%     2,629         1.5%     1.5%
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 revenue --            --%      --%      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                                 $   26,087    17.6%    17.6%    $   2,761    8.5%     8.4%     $   28,848    15.9%    15.9%
GAAP Corporate costs                                                                                                     $   21,226    11.7%    11.7%
Share-based compensation expense                                                                                         (2,916)       (1.6)%   (1.6)%
Acquisition-related expenses                                                                                             0             --%      --%
Severance and other expenses                                                                                             (360)         (0.2)%   (0.2)%
Non-GAAP Corporate costs                                                                                                 $   17,950    9.9%     9.9%
Non-GAAP Income from operations                                                                                          $   10,898    6.0%     6.0%
Omnicell, Inc.
Segment Information - Non-GAAP Gross Profit and Non-GAAP Operating Margin
(Unaudited, in thousands, except for percentages)
                                                          Three Months Ended June 30, 2016
                                                          Automation and                   Medication                      Total
                                                          Analytics                        Adherence
                                                          Amount       % of      % of      Amount      % of      % of      Amount       % of      % of
                                                                       GAAP      Non-                  GAAP      Non-                   GAAP      Non-
                                                                       Revenue   GAAP                  Revenue   GAAP                   Revenue   GAAP
                                                                                 Revenue                         Revenue                          Revenue
Revenues                                                  $  148,660                       $  24,247                       $  172,907
Acquisition accounting impact related to deferred revenue 2,663        1.8  %    1.8  %    --          --   %    --   %    2,663        1.5  %    1.5  %
Non-GAAP Revenues                                         $  151,323                       $  24,247                       $  175,570
GAAP Gross profit                                         $  70,294    47.3 %    46.5 %    $  7,723    31.9 %    31.9 %    $  78,017    45.1 %    44.4 %
Stock-based compensation expense                          561          0.4  %    0.4  %    83          0.3  %    0.3  %    644          0.4  %    0.4  %
Amortization expense of acquired intangible assets        4,882        3.3  %    3.2  %    332         1.4  %    1.4  %    5,214        3.0  %    3.0  %
Acquisition accounting impact related to deferred revenue 2,663        1.8  %    1.8  %    --          --   %    --   %    2,663        1.5  %    1.5  %
Inventory fair value adjustments                          920          0.6  %    0.6  %    --          --   %    --   %    920          0.5  %    0.5  %
Acquisitions related expenses                             28           --   %    --   %    --          --   %    --   %    28           --   %    --   %
Severance expenses                                        199          0.1  %    0.1  %                                    199          0.1  %    0.1  %
Non-GAAP Gross profit                                     $  79,547    53.5 %    52.6 %    $  8,138    33.6 %    33.6 %    $  87,685    50.7 %    49.9 %
GAAP Operating income                                     $  20,514    13.8 %    13.6 %    $  1,952    8.1  %    8.1  %    $  22,466    13.0 %    12.8 %
Stock-based compensation expense                          2,042        1.4  %    1.3  %    240         1.0  %    1.0  %    2,282        1.3  %    1.3  %
Amortization expense of acquired intangible assets        7,739        5.2  %    5.1  %    1,313       5.4  %    5.4  %    9,052        5.2  %    5.2  %
Acquisition accounting impact related to deferred revenue 2,663        1.8  %    1.8  %    --          --   %    --   %    2,663        1.5  %    1.5  %
Inventory fair value adjustments                          920          0.6  %    0.6  %    --          --   %    --   %    920          0.5  %    0.5  %
Acquisitions related expenses                             259          0.2  %    0.2  %    --          --   %    --   %    259          0.1  %    0.1  %
Severance expenses                                        1,590        1.1  %    1.1  %    56          0.2  %    0.2  %    1,646        1.0  %    0.9  %
Non-GAAP Operating income                                 $  35,727    24.0 %    23.6 %    $  3,561    14.7 %    14.7 %    $  39,288    22.7 %    22.4 %
GAAP Corporate costs                                                                                                       $  22,584    13.1 %    12.9 %
Stock-based compensation expense                                                                                           3,213        1.9  %    1.8  %
Acquisition related expenses                                                                                               (8)          --   %    --   %
Severance expenses                                                                                                         57           --   %    --   %
Non-GAAP Corporate costs                                                                                                   $  19,322    11.2 %    11.0 %
Non-GAAP Income from operations                                                                                            $  19,966    11.4 %    11.4 %

OMCL-E

View original content with multimedia:http://www.prnewswire.com/news-releases/omnicell-achieves-record-revenue-in-the-second-quarter-2017-

SOURCE Omnicell, Inc.

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