Omnicell Reports Results for Fiscal Year and Fourth Quarter 2018


Record yearly GAAP revenues of $787.3 million

Record yearly Non-GAAP revenues of $787.3 million

2018 GAAP net income per diluted share of $0.93

Record 2018 Non-GAAP net income per diluted share of $2.09

Record ending product backlog of $478 million

MOUNTAIN VIEW, Calif., Feb. 7, 2019 /PRNewswire/ -- 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, 2018.

GAAP Results

GAAP revenues for the fourth quarter of 2018 were $211.8 million, up $15.4 million, or 7.8% from the fourth quarter of 2017. GAAP revenues for the year ended December 31, 2018 were $787.3 million, up $74.6 million, or 10.5% from the year ended December 31, 2017.

Fourth quarter 2018 GAAP net income as reported was $14.8 million, or $0.36 per diluted share. This compares to GAAP net income of $31.2 million, or $0.79 per diluted share, for the fourth quarter of 2017.

GAAP net income for the year ended December 31, 2018 was $37.7 million, or $0.93 per diluted share. GAAP net income was $30.5 million, or $0.79 per diluted share, for the year ended December 31, 2017.

Non-GAAP Results

Non-GAAP revenues for the fourth quarter of 2018 were $211.8 million, up $15.1 million, or 7.7% from the fourth quarter of 2017.  Non-GAAP revenues for the year ended December 31, 2018 were $787.3 million, up $73.3 million, or 10.3% from the year ended December 31, 2017.

Non-GAAP net income for the fourth quarter of 2018 was $29.1 million, or $0.70 per diluted share. This compares to non-GAAP net income of $21.5 million, or $0.55 per diluted share, for the fourth quarter of 2017.

Non-GAAP net income for the year ended December 31, 2018 was $84.6 million, or $2.09 per diluted share.  This compares to non-GAAP net income of $54.6 million, or $1.41 per diluted share for the year ended December 31, 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 income tax benefits, contingent gains, and amortization of debt issuance cost.

Total product bookings for the year ended December 31, 2018 were $716 million compared to total bookings of $568 million for the year ended December 31, 2017. Total product backlog for the year ended December 31, 2018 was $478 million compared to $345 million for the year ended December 31, 2017, or an increase of 39% year over year.

"With the launch of our Autonomous Pharmacy vision at ASHP Midyear, health system pharmacists are understanding and embracing the need for radical change in medication management," said Randall A. Lipps, chairman, president, chief executive officer, and founder of Omnicell. "We continue to partner with our customers to drive this revolutionary, digital approach, which will help allow nurses and pharmacists to move away from manual workflows and operate at the top of their license."

2018 Business Highlights:

  • During 2018, the Company continued its cadence of innovation and introduced new products and solutions to the market including:
    • the XR2 Automated Central Pharmacy System, a robotic solution that is a significant step towards fully automating central pharmacy operations in a variety of settings;
    • IVX Workflow, which operates on IVX Cloud, creating a significant technological advancement for sterile compounding workflow processes and enabling pharmacies to safely and efficiently compound and prepare IV doses; and
    • the Patient Engagement Platform, which introduces new medication adherence capabilities and expands the reach of these solutions to Payer networks;
  • During the year, the Company has experienced good momentum on new products and has received numerous contractual purchase commitments for multiple products in the Omnicell Platform;
  • For the year ended December 31, 2018, the Company's product backlog was $478 million, an increase of 39% from one year ago;
  • For the year ended December 31, 2018, the Company reported record product bookings of $716 million, an increase of 26% from one year ago; and
  • In December 2018, the Company announced its vision for the Autonomous Pharmacy. Omnicell's vision for the Autonomous Pharmacy integrates a comprehensive set of solutions across three key areas: Automation solutions designed to digitize and streamline workflows; Intelligence that provides actionable insights to better understand medication usage and improve pharmacy supply chain management; and Work - expert services that serve as an extension of pharmacy operations to support improved efficiency, regulatory compliance, and patient outcomes.

2019 Guidance:

For the first quarter of 2019, the Company expects non-GAAP total revenues to be between $196 million and $202 million. The Company expects non-GAAP product revenues to be between $140 million and $145 million, and non-GAAP service revenues to be between $56 million and $57 million. The Company expects first quarter 2019 non-GAAP earnings to be between $0.38 and $0.43 per share.

For the year 2019, the Company expects product bookings to be between $745 million and $780 million.

For the same period, the Company expects non-GAAP total revenues to be between $880 million and $900 million. The Company expects non-GAAP product revenues to be between $652 million and $668 million, and non-GAAP service revenues to be between $228 million and $232 million. The Company expects 2019 non-GAAP earnings to be between $2.40 and $2.60 per share.

The table below summarizes Omnicell's 2019 guidance outlined above:



Q1'19

Total Year 2019

Product Bookings

Not provided

$745 million - $780 million

Non-GAAP Total Revenues

$196 million - $202 million

$880 million - $900 million

Non-GAAP Product Revenues

$140 million - $145 million

$652 million - $668 million

Non-GAAP Service Revenues

$56 million - $57 million

$228 million - $232 million

Non-GAAP EPS

$0.38 - $0.43

$2.40 - $2.60

Omnicell Conference Call Information

Omnicell will hold a conference call today, Thursday, February 7, 2019 at 1:30 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 4073668. Internet users can access the conference call at http://ir.omnicell.com/communications/events-presentations. 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 March 21, 2019. 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 4073668.

About Omnicell

Since 1992, Omnicell has been inspired to create safer and more efficient ways to manage medications across all care settings. Through our industry-leading medication management platform that spans the continuum of care, Omnicell is developing a vision for a fully automated infrastructure, powered by a cloud data platform that supports improved patient care, fewer errors, enhanced safety, and new opportunities for growth.

Omnicell's vision for the Autonomous Pharmacy integrates a comprehensive set of solutions across three key areas:  Automation solutions designed to digitize and streamline workflows; Intelligence that provides actionable insights to better understand medication usage and improve pharmacy supply chain management; and Work - expert services that serve as an extension of pharmacy operations to support improved efficiency, regulatory compliance, and patient outcomes.

Over 5,000 facilities worldwide use Omnicell automation and analytics solutions to help increase operational efficiency, reduce medication errors, deliver actionable intelligence, and improve patient safety. And more than 40,000 institutional and retail pharmacies across North America and the United Kingdom leverage Omnicell's innovative medication adherence solutions 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.

Omnicell and the Omnicell logo are registered trademarks of Omnicell, Inc. in the United States and other countries.

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 projected bookings, revenues and earnings per share; pipeline; new products and solutions yet to be generally available; and new sales opportunities. Risks that contribute to the uncertain nature of the forward-looking statements include (i) Omnicell's ability to take advantage of the growth opportunities in medication management across the spectrum of healthcare settings from hospital to home, (ii) Omnicell's ability to develop and commercialize new products, including the XR2 Automated Central Pharmacy System and the IVX Workflow semi-automated workflow solution, and enhance existing products, (iii) Omnicell's ability to deliver on our vision of the Autonomous Pharmacy, (iv) unfavorable general economic and market conditions, (v) risks to growth and acceptance of Omnicell's products and services, including competitive conversions, (vi) growth of the clinical automation and workflow automation market generally, (vii) potential of increasing competition, (viii) potential regulatory changes, (ix) Omnicell's ability to improve sales productivity to grow product bookings, and (x) Omnicell's ability to acquire companies, businesses, or technologies and successfully integrate such acquisitions. 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 income 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; and





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 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 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'sSEC filings.

Our 2019 guidance for non-GAAP earnings per share, as well as certain projections to be discussed in the conference call noted above, 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



December 31,

 2018



December 31, 2017





As Adjusted (a)



As Reported



Change

Revenues:















Product revenues

$

154,591





$

144,367





$

144,120





$

247



Services and other revenues

57,159





52,004





53,824





(1,820)



Total revenues

211,750





196,371





197,944





(1,573)



Cost of revenues:















Cost of product revenues

82,718





79,791





79,791







Cost of services and other revenues

26,849





23,085





23,085







Total cost of revenues

109,567





102,876





102,876







Gross profit

102,183





93,495





95,068





(1,573)



Operating expenses:















Research and development

16,989





15,894





15,894







Selling, general, and administrative (b)

66,264





61,400





63,494





(2,094)



Total operating expenses

83,253





77,294





79,388





(2,094)



Income from operations

18,930





16,201





15,680





521



Interest and other income (expense), net

(2,314)





(1,641)





(1,641)







Income before provision for income taxes

16,616





14,560





14,039





521



Provision for (benefit from) income taxes

1,823





(16,665)





(10,252)





(6,413)



Net income

$

14,793





$

31,225





$

24,291





$

6,934



Net income per share:















Basic

$

0.37





$

0.82





$

0.64





$

0.18



Diluted

$

0.36





$

0.79





$

0.62





$

0.17



Weighted average shares outstanding:















Basic

39,913





38,127





38,127







Diluted

41,465





39,482





39,482











(a)

As adjusted for full retrospective adoption of Accounting Standards Codification ("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.

(b)

Three months ended December 31, 2018 includes certain out-of-period adjustments that are not material to any previously issued financial statements.

 

Omnicell, Inc.

Condensed Consolidated Statements of Operations

(Unaudited, in thousands, except per share data)







Year Ended



December

31, 2018 (a)



December 31, 2017





As Adjusted (b)



As Reported



Change

Revenues:















Product revenues

$

569,595





$

510,201





$

506,209





$

3,992



Services and other revenues

217,714





202,513





209,956





(7,443)



Total revenues

787,309





712,714





716,165





(3,451)



Cost of revenues:















Cost of product revenues

312,360





304,842





304,842







Cost of services and other revenues

102,619





89,235





89,235







Total cost of revenues

414,979





394,077





394,077







Gross profit

372,330





318,637





322,088





(3,451)



Operating expenses:















Research and development

64,843





66,022





66,022







Selling, general, and administrative (c)

263,095





241,470





250,312





(8,842)



Total operating expenses

327,938





307,492





316,334





(8,842)



Income from operations

44,392





11,145





5,754





5,391



Interest and other income (expense), net

(8,776)





(6,633)





(6,633)







Income (loss) before provision for income taxes

35,616





4,512





(879)





5,391



Provision for (benefit from) income taxes

(2,113)





(26,006)





(21,484)





(4,522)



Net income

$

37,729





$

30,518





$

20,605





$

9,913



Net income per share:















Basic

$

0.96





$

0.81





$

0.55





$

0.26



Diluted

$

0.93





$

0.79





$

0.53





$

0.26



Weighted average shares outstanding:















Basic

39,242





37,483





37,483







Diluted

40,559





38,712





38,712











(a)

Includes a $0.6 million reclassification from services and other revenues to product revenues during the quarter ended June 30, 2018 to conform with current-period presentation.

(b)

As adjusted for full retrospective adoption of ASC 606. The adjustment also includes a $0.8 million reclassification from services and other revenues to product revenues to conform with current-period presentation.

(c)

Twelve months ended December 31, 2018 includes certain out-of-period adjustments that are not material to any previously issued financial statements.

 

Omnicell, Inc.

Condensed Consolidated Balance Sheets

(Unaudited, in thousands)











December 31,

2018



December 31, 2017





As Adjusted (a)



As Reported



Change

















ASSETS

Current assets:















Cash and cash equivalents

$

67,192





$

32,424





$

32,424





$



Accounts receivable and unbilled, net

196,238





190,046





189,227





819



Inventories

100,868





96,137





96,137







Prepaid expenses

20,700





20,392





36,060





(15,668)



Other current assets

12,136





13,273





13,273







Total current assets

397,134





352,272





367,121





(14,849)



Property and equipment, net

51,500





42,595





42,595







Long-term investment in sales-type leases, net

17,082





15,435





15,435







Goodwill

335,887





337,751





337,751







Intangible assets, net

143,686





168,107





168,107







Long-term deferred tax assets

15,197





9,454





9,454







Prepaid commissions

46,143





41,432









41,432



Other long-term assets

74,613





49,316





39,841





9,475



Total assets

$

1,081,242





$

1,016,362





$

980,304





$

36,058



















LIABILITIES AND STOCKHOLDERS' EQUITY

Current liabilities:















Accounts payable

$

38,038





$

48,290





$

48,290





$



Accrued compensation

41,660





27,241





27,241







Accrued liabilities

43,047





35,693





35,693







Long-term debt, current portion, net





15,208





15,208







Deferred revenues, net

81,835





78,774





86,104





(7,330)



Total current liabilities

204,580





205,206





212,536





(7,330)



Long-term, deferred revenues

10,582





10,623





17,244





(6,621)



Long-term deferred tax liabilities

41,484





41,446





28,579





12,867



Other long-term liabilities

9,562





9,829





9,829







Long-term debt, net

135,417





194,917





194,917







Total liabilities

401,625





462,021





463,105





(1,084)



Total stockholders' equity

679,617





554,341





517,199





37,142



Total liabilities and stockholders' equity

$

1,081,242





$

1,016,362





$

980,304





$

36,058







(a)

As adjusted for full retrospective adoption of ASC 606.

 

Omnicell, Inc.

Condensed Consolidated Statements of Cash Flows

(Unaudited, in thousands)







Year Ended December 31,



2018



2017 (a)

Operating Activities







Net income

$

37,729





$

30,518



Adjustments to reconcile net income to net cash provided by operating activities:







Depreciation and amortization

51,350





51,511



Loss on disposal of fixed assets

133





512



Share-based compensation expense

28,885





21,857



Income tax benefits from employee stock plans





11



Deferred income taxes

(5,705)





(31,365)



Amortization of debt financing fees

2,292





1,590



Changes in operating assets and liabilities:







 Accounts receivable and unbilled receivables

(6,192)





(40,598)



 Inventories

(6,763)





(26,840)



 Prepaid expenses

(308)





(4,920)



 Other current assets

1,170





(2,074)



 Investment in sales-type leases

(1,680)





6,625



 Prepaid commissions

(4,711)





(3,966)



 Other long-term assets

(7,077)





(1,373)



 Accounts payable

(9,154)





19,709



 Accrued compensation

14,419





519



 Accrued liabilities

8,223





4,383



 Deferred revenues

3,020





(2,334)



 Other long-term liabilities

(1,665)





1,069



Net cash provided by operating activities

103,966





24,834



Investing Activities







Purchases of intangible assets, intellectual property, and patents





(160)



Software development for external use

(30,677)





(15,040)



Purchases of property and equipment

(23,697)





(15,341)



Business acquisitions, net of cash acquired





(4,446)



Net cash used in investing activities

(54,374)





(34,987)



Financing Activities







Proceeds from debt, net





56,894



Repayment of debt and revolving credit facility

(77,000)





(102,500)



Payment for contingent consideration





(2,400)



At the market offering, net of offering costs

39,567





13,900



Proceeds from issuances under stock-based compensation plans

30,611





30,121



Employees' taxes paid related to restricted stock units

(6,775)





(5,892)



Net cash used in financing activities

(13,597)





(9,877)



Effect of exchange rate changes on cash and cash equivalents

(1,227)





(2,034)



Net increase (decrease) in cash and cash equivalents

34,768





(22,064)



Cash and cash equivalents at beginning of period

32,424





54,488



Cash and cash equivalents at end of period

$

67,192





$

32,424







(a)

As adjusted for full retrospective adoption of ASC 606.

 

Omnicell, Inc.

Reconciliation of GAAP to Non-GAAP

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































Three Months Ended



Twelve Months Ended













December 31,

2018



December 31,

2017 (a)



December 31,

2018



December 31,

2017 (a)



























Reconciliation of GAAP revenues to non-GAAP revenues:











GAAP revenues



$

211,750





$

196,371





$

787,309





$

712,714





Acquisition accounting impact related to deferred revenues





313









1,252



Non-GAAP revenues

$

211,750





$

196,684





$

787,309





$

713,966





























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











GAAP gross profit

$

102,183





$

93,495





$

372,330





$

318,637



GAAP gross margin

48.3

%



47.6

%



47.3

%



44.7

%



Share-based compensation expense

1,289





834





4,635





3,562





Amortization of acquired intangibles

3,091





2,818





11,366





11,488





Acquisition accounting impact related to deferred revenue





313









1,252





Severance and other expenses (b)

186





234





186





2,001



Non-GAAP gross profit

$

106,749





$

97,694





$

388,517





$

336,940



Non-GAAP gross margin

50.4

 

%



49.7

%



49.3

%



47.2

%



























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









GAAP operating expenses

$

83,253





$

77,294





$

327,938





$

307,492



GAAP operating expenses % to total revenues



39.3

%



39.4

%



41.7

%



43.1

%



Share-based compensation expense

(6,745)





(4,708)





(24,250)





(18,295)





Amortization of acquired intangibles

(2,937)





(3,348)





(12,330)





(14,008)





Acquisition-related expenses













(126)





Severance and other expenses (b)

(1,157)





(233)





(4,337)





(3,764)



Non-GAAP operating expenses

$

72,414





$

69,005





$

287,021





$

271,299



Non-GAAP operating expenses % to total non-GAAP revenues

34.2

%



35.1

%



36.5

%



38.0

%



























Reconciliation of GAAP income from operations to non-GAAP income from operations:

GAAP income from operations



$

18,930





$

16,201





$

44,392





$

11,145



GAAP operating income % to total revenues



8.9

%



8.3%

%



5.6

%



1.6

%



Share-based compensation expense

8,034





5,542





28,885





21,857





Amortization of acquired intangibles

6,028





6,166





23,696





25,496





Acquisition accounting impact related to deferred revenue





313









1,252





Acquisition-related expenses













126





Severance and other expenses

1,343





467





4,523





5,765



Non-GAAP income from operations

$

34,335





$

28,689





$

101,496





$

65,641



Non-GAAP operating income % to total non-GAAP revenues

16.2

%



14.6

%



12.9

%



9.2

%





(a)

As adjusted for full retrospective adoption of ASC 606.

(b)

Other expenses include relocation charge of $578, restructuring rent expense of $510, integration consulting expense of $201, and depreciation adjustment related to purchase price allocation from acquisition of $1,013 for the year ended December 31, 2017.

 

 













Three Months Ended



Twelve Months Ended













December 31,

2018



December 31,

2017 (a)



December 31,

2018



December 31,

2017 (a)

Reconciliation of GAAP net income to non-GAAP net income:











GAAP net income

$

14,793





$

31,225





$

37,729





$

30,518





Tax reform benefit impact





(20,005)









(20,005)





Tax benefit for restructuring activity









(4,205)









Share-based compensation expense

8,034





5,542





28,885





21,857





Amortization of acquired intangibles

6,028





6,166





23,696





25,496





Acquisition accounting impact related to deferred revenue





313









1,252





Acquisition related expenses

397





397





1,589





1,715





Severance and other expenses

1,519





467





5,227





5,765





Contingent gain









(2,456)









Tax effect of the adjustments above (b)

(1,668)





(2,570)





(5,891)





(11,980)



Non-GAAP net income

$

29,103





$

21,535





$

84,574





$

54,618





























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





Shares - diluted GAAP

41,465





39,482





40,559





38,712





























Shares - diluted Non-GAAP

41,465





39,482





40,559





38,712





























GAAP net income per share - diluted

$

0.36





$

0.79





$

0.93





$

0.79





Tax reform benefit impact





(0.50)









(0.52)





Tax benefit for restructuring activity









(0.10)









Share-based compensation expense

0.18





0.14





0.72





0.56





Amortization of acquired intangibles

0.15





0.16





0.58





0.67





Acquisition accounting impact related to deferred revenue





0.01









0.03





Acquisition related expenses

0.01





0.01





0.04





0.04





Severance and other expenses

0.04





0.01





0.13





0.15





Contingent gain









(0.06)









Tax effect of the adjustments above (b)

(0.04)





(0.07)





(0.15)





(0.31)



Non-GAAP net income per share - diluted

$

0.70





$

0.55





$

2.09





$

1.41





























Reconciliation of GAAP net income to non-GAAP Adjusted EBITDA:











GAAP net income

$

14,793





$

31,225





$

37,729





$

30,518





Share-based compensation expense

8,034





5,542





28,885





21,857





Interest (income) and expense, net

907





1,202





5,855





6,072





Depreciation and amortization expense

13,860





12,969





51,350





51,511





Acquisition accounting impact related to deferred revenue





313









1,252





Acquisition related expenses

397





397





1,589





1,715





Severance and other expenses

1,519





213





5,227





4,752





Contingent gain









(2,456)









Income tax expense (benefit)

1,823





(16,665)





(2,113)





(26,006)



Non-GAAP Adjusted EBITDA (c)

$

41,333





$

35,196





$

126,066





$

91,671







(a)

As adjusted for full retrospective adoption of ASC 606.

(b)

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.

(c)

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

 

Omnicell, Inc.

Segmented Information

(Unaudited, in thousands, except for percentages)











Three Months Ended December 31, 2018



Three Months Ended December 31, 2017



Automation and

Analytics



Medication

Adherence



Total



Automation and

Analytics (a)



Medication

Adherence



Total

Revenues

$

177,605





$

34,145





$

211,750





$

161,569





$

34,802





$

196,371



Cost of revenues

85,157





24,410





109,567





79,225





23,651





102,876



Gross profit

92,448





9,735





102,183





82,344





11,151





93,495



Gross margin %

52.1

%



28.5

%



48.3

%



51.0

%



32.0

%



47.6

%

























Operating expenses

45,731





10,311





56,042





44,955





10,539





55,494



Income (loss) from segment operations

$

46,717





$

(576)





$

46,141





$

37,389





$

612





$

38,001



Operating margin %

26.3

%



(1.7)

%



21.8

%



23.1

%



1.8

%



19.4

%

























Corporate costs









27,211













21,800



Income from operations









$

18,930













$

16,201







a)

As adjusted for full retrospective adoption of ASC 606.

 

Omnicell, Inc.

Segmented Information

(Unaudited, in thousands, except for percentages)











Year Ended December 31, 2018



Year Ended December 31, 2017



Automation and

Analytics



Medication

Adherence



Total



Automation and

Analytics (a)



Medication

Adherence



Total

Revenues

$

655,679





$

131,630





$

787,309





$

586,941





$

125,773





$

712,714



Cost of revenues

319,257





95,722





414,979





308,443





85,634





394,077



Gross profit

336,422





35,908





372,330





278,498





40,139





318,637



Gross margin %

51.3

%



27.3

%



47.3

%



47.4

%



31.9%

%



44.7

%

























Operating expenses

188,303





41,430





229,733





184,857





41,735





226,592



Income (loss) from segment operations

$

148,119





$

(5,522)





$

142,597





$

93,641





$

(1,596)





$

92,045



Operating margin %

22.6

%



(4.2)

%



18.1

%



16.0

%



(1.3)

%



12.9

%

























Corporate costs









98,205













80,900



Income from operations









$

44,392













$

11,145







(a)

As adjusted for full retrospective adoption of ASC 606.

 

Omnicell, Inc.

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

(Unaudited, in thousands, except for percentages)







Three Months Ended December 31, 2018



Automation and

Analytics



Medication

Adherence



Total



Amount



% of

GAAP

Revenue



% of

Non-

GAAP

Revenue



Amount



% of

GAAP

Revenue



% of

Non-

GAAP

Revenue



Amount



% of

GAAP

Revenue



% of

Non-

GAAP

Revenue

Revenues

$

177,605













$

34,145













$

211,750











Non-GAAP Revenues

$

177,605













$

34,145













$

211,750















































GAAP Gross profit

$

92,448





52.1

%







$

9,735





28.5

%







$

102,183





48.3

%





Share-based compensation expense

1,098





0.6

%



0.6

%



191





0.6

%



0.6

%



1,289





0.6

%



0.6

%

Amortization expense of acquired intangible assets

2,603





1.5

%



1.5

%



488





1.4

%



1.4

%



3,091





1.5

%



1.5

%

Severance and other expenses

3





%



%



183





0.5

%



0.5

%



186





0.1

%



0.1

%

Non-GAAP Gross profit

$

96,152









54.1

%



$

10,597









31.0

%



$

106,749









50.4

%





































GAAP Operating income

$

46,717





26.3

%







$

(576)





(1.7)

%







$

46,141





21.8

%





Share-based compensation expense

3,573





2.0

%



2.0

%



644





1.9

%



1.9

%



4,217





2.0

%



2.0

%

Amortization expense of acquired intangible assets

4,438





2.5

%



2.5

%



1,590





4.7

%



4.7

%



6,028





2.8

%



2.8

%

Severance and other expenses

330





0.2

%



0.2

%



213





0.6

%



0.6

%



543





0.3

%



0.3

%

Non-GAAP Operating income

$

55,058









31.0

%



$

1,871









5.5

%



$

56,929









26.9

%





































GAAP Corporate costs

























$

27,211





12.9

%





Share-based compensation expense

























(3,817)





(1.8)

%



(1.8)

%

Severance and other expenses

























(800)





(0.4)

%



(0.4)

%

Non-GAAP Corporate costs

























$

22,594









10.7

%





































Non-GAAP Income from operations

























$

34,335









16.2

%

 

Omnicell, Inc.

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

(Unaudited, in thousands, except for percentages)







Three Months Ended December 31, 2017



Automation and

Analytics (a)



Medication

Adherence



Total



Amount



% of GAAP Revenue



% of

Non-GAAP Revenue



Amount



% of GAAP Revenue



% of

Non-GAAP Revenue



Amount



% of

GAAP Revenue



% of

Non-

GAAP Revenue

Revenues

$

161,569













$

34,802













$

196,371











Acquisition accounting impact related to deferred revenue













313













313











Non-GAAP Revenues

$

161,569













$

35,115













$

196,684















































GAAP Gross profit

$

82,344





51.0

%







$

11,151





32.0

%







$

93,495





47.6

%





Share-based compensation expense

704





0.4

%



0.4

%



130





0.4

%



0.4

%



834





0.4

%



0.4

%

Amortization expense of acquired intangible assets

2,251





1.4

%



1.4

%



567





1.6

%



1.6

%



2,818





1.4

%



1.4

%

Acquisition accounting impact related to deferred revenue





%



%



313





0.9

%



0.9

%



313





0.2

%



0.2

%

Severance and other expenses

234





0.1

%



0.1

%







%



%



234





0.1

%



0.1

%

Non-GAAP Gross profit

$

85,533









52.9

%



$

12,161









34.6

%



$

97,694









49.7

%





































GAAP Operating income

$

37,389





23.1

%







$

612





1.8

%







$

38,001





19.4

%





Share-based compensation expense

2,184





1.4

%



1.4

%



376





1.1

%



1.1

%



2,560





1.3

%



1.3

%

Amortization expense of acquired intangible assets

4,364





2.7

%



2.7

%



1,802





5.2

%



5.1

%



6,166





3.1

%



3.1

%

Acquisition accounting impact related to deferred revenue





%



%



313





0.9

%



0.9

%



313





0.2

%



0.2

%

Severance and other expenses

204





0.1

%



0.1

%







%



%



204





0.1

%



0.1

%

Non-GAAP Operating income

$

44,141









27.3

%



$

3,103









8.8

%



$

47,244









24.0

%





































GAAP Corporate costs

























$

21,800





11.1

%





Share-based compensation expense

























(2,982)





(1.5)

%



(1.5)

%

Acquisition-related expenses

























(263)





(0.1)

%



(0.1)

%

Non-GAAP Corporate costs

























$

18,555









9.4

%





































Non-GAAP Income from operations

























$

28,689









14.6

%





(a)

As adjusted for full retrospective adoption of ASC 606.

OMCL-E

 

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SOURCE Omnicell, Inc.