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Omnicell Reports Results for Fiscal Year and Fourth Quarter 2017

THIS POST WAS ORIGINALLY PUBLISHED ON THIS SITE Click Here To Read Entire Article

MOUNTAIN VIEW, Calif., Feb. 1, 2018 /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, 2017. 

GAAP results: Revenue for the fourth quarter of 2017 was $197.9 million, up $11.2 million or 6.0% from the third quarter of 2017, and up $26.0 million or 15.1% from the fourth quarter of 2016. Revenue for the year ended December 31, 2017 was $716.2 million, up $23.5 million or 3.4% from the year ended December 31, 2016.

Fourth quarter 2017 net income as reported in accordance with U.S. generally accepted accounting principles (GAAP) was $24.3 million, or $0.62 per diluted share, which includes the favorable impact of the Tax Cuts and Jobs Act of 2017. This compares to GAAP net income of $6.2 million, or $0.16 per diluted share, for the third quarter of 2017, and GAAP net income of $0.2 million, or $0.00 per diluted share, for the fourth quarter of 2016.

GAAP net income for the year ended December 31, 2017 was $20.6 million, or $0.53 per diluted share. GAAP net income was $0.6 million, or $0.02 per diluted share, for the year ended December 31, 2016.

Non-GAAP results: Non-GAAP revenue for the fourth quarter of 2017 was $198.3 million, up $11.2 million, or 6.0% from the third quarter of 2017, and up $23.6 million or 13.5% from the fourth quarter of 2016. Non-GAAP revenue for the year ended December 31, 2017 was $717.4 million, up $14.1 million, or 2.0% from the year ended December 31, 2016.

Non-GAAP net income for the fourth quarter of 2017 was $21.2 million, or $0.54 per diluted share. This compares to non-GAAP net income of $16.3 million, or $0.42 per diluted share, for the third quarter of 2017 and $13.8 million, or $0.37 per diluted share, for the fourth quarter of 2016.

Non-GAAP net income for the year ended December 31, 2017 was $51.3 million, or $1.33 per diluted share. This compares to non-GAAP net income of $55.7 million, or $1.51 per diluted share for the year ended December 31, 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, tax reform benefits, and amortization of debt issuance cost.

Total product bookings for the year ended December 31, 2017 were $568 million compared to total bookings for the year ended December 31, 2016 of $541 million. Total product backlog for the year ended December 31, 2017 was $345 million compared to $301 million for the year ended December 31, 2016, or an increase of 14.3% year over year.

“2017 was a successful year for Omnicell with record bookings and revenues,” said Randall Lipps, chairman, CEO, president, and founder of Omnicell. “We are proud of the company’s financial performance and our strategic execution. We’re seeing rapid adoption of our latest solutions and services from our Omnicell platform, some of which leverage workflow automation on a cloud data platform, artificial intelligence for predictive analytics and performance-driven partnerships to help our customers achieve the highest level of success. The company is well positioned to take advantage of these great opportunities ahead in 2018.”

2017 Business Highlights:

  • The Company started the production of the XT series in January 2017 and successfully ramped up the production and installation throughout the year;
  • In April, the Company announced the launch of AcuDose-Rx® software on XT hardware, which allows legacy Aesynt customers to take full advantage of the XT series;
  • During the second quarter, the Company launched the XT series Automated Supply Dispensing Cabinet and the Controlled Substance Dispenser module, which provides innovative, efficient and secure workflow for dispensing and administration of controlled substances;
  • In December, the Company announced 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;
  • In December, the Company announced the IVX Workflow which operates on the IVX Cloud, creating a significant technological advancement for sterile compounding workflow processes and enabling pharmacies to safely and efficiently compound and prepare IV doses;
  • During the year the Company has experienced good momentum on new products and has received multiple contractual purchase commitments for both the XR2 Automated Central Pharmacy System and the IVX Workflow before their respective general availability dates in 2018;
  • During the year the Company expanded its Medication Adherence ecosystem with the addition of advanced automated packaging solutions;
  • During the year, the Company expanded the Performance Center’s core capabilities of operational improvements into patient outcomes and regulatory compliance through internal development and the acquisition of InPharmics;
  • For the twelve months ended December 31, 2017, the Company’s new and competitive conversion rate was 29%; and
  • For the year ended December 31, 2017, the Company’s product backlog was $345 million, an increase of 14.3% from one year ago.

2018 Guidance:

For 2018, we will adopt ASU 2014-09 Revenue from Contracts with Customers, which impacts the timing of revenue recognition and requires the presentation of certain costs previously reported as selling expenses as a reduction of revenue, both of which are not anticipated to be material. The reclassification of selling costs will result in a reduction of net sales, but has no impact on operating income or net earnings.

For the first quarter of 2018, the Company expects non-GAAP revenue to be between $174 million and $179 million, which includes the impact of reclassification of selling costs as a reduction of revenue. The Company expects first quarter of 2018 non-GAAP earnings to be between $0.22 and $0.28 per share.

For the year 2018, the Company expects product bookings to be between $625 million and $660 million.

The Company expects non-GAAP revenue to be between $780 million and $800 million, which includes the impact of reclassification of selling costs as a reduction of revenue, and non-GAAP earnings to be between $1.85 and $2.05 per share.

The table below summarizes Omnicell’s 2018 guidance outlined above:

Q1’18

Total Year 2018

Product Bookings

Not provided

$625 million – $660 million

Non-GAAP Revenue

$174 million – $179 million

$780 million – $800 million

Non-GAAP EPS

$0.22 – $0.28

$1.85 – $2.05

Omnicell Conference Call Information

Omnicell will hold a conference call today, Thursday, February 1, 2018 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 3791479. 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 March 15, 2018. The replay access numbers are 1-855-859-2056 within the U.S. and 1-404-537-3406 for all other locations, Conference ID # is 3791479.

About Omnicell

Since 1992, Omnicell (NASDAQ: OMCL) has been inspired to create safer and more efficient ways to manage medications and supplies across all care settings. 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.

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

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 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 pipeline, new sales opportunities, and projected bookings, revenue and profit growth. Risks that contribute to the uncertain nature of the forward-looking statements include (i) our ability to take advantage of the growth opportunities in medication management across the spectrum of healthcare settings from the hospital, long-term care, to home care, (ii) our ability to develop and commercialize new products, including the XR2 Automated Central Pharmacy System and the IVX semi-automated workflow solution, (iii) unfavorable general economic and market conditions, (iv) risks to growth and acceptance of our products and services, including competitive conversions, (v) growth of the clinical automation and workflow automation market generally, (vi) potential of increasing competition, (vii) potential regulatory changes, (viii) our ability to improve sales productivity to grow product bookings and (ix) our ability to acquire and successfully integrate companies. These and other risks and uncertainties are described more fully in Omnicell’s most recent filings with the Securities and Exchange Commission. 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 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 the 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 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 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 peer companies.

h) Tax reform impact. We excluded from our non-GAAP results the net one-time benefits related to the Tax Cuts and Jobs Act of 2017 based on the estimated impact of the revaluation of deferred tax assets and liabilities. These net benefits 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 net benefits 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:

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 2018, 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

Years Ended

December 31,
2017

September 30,
2017

December 31,
2016

December 31,
2017

December 31,
2016

Revenues:

Product

$

144,120

$

135,103

$

125,753

$

506,209

$

517,944

Services and other revenues

53,824

51,679

46,221

209,956

174,679

 Total revenues

197,944

186,782

171,974

716,165

692,623

Cost of revenues:

Cost of product revenues

79,791

79,725

78,024

304,842

302,437

Cost of services and other revenues

23,085

22,204

19,621

89,235

76,386

 Total cost of revenues

102,876

101,929

97,645

394,077

378,823

Gross profit

95,068

84,853

74,329

322,088

313,800

Operating expenses:

Research and development

15,894

16,414

14,902

66,022

57,799

Selling, general and administrative

63,494

58,725

59,608

250,312

249,520

 Total operating expenses

79,388

75,139

74,510

316,334

307,319

Income (loss) from operations

15,680

9,714

(181)

5,754

6,481

Interest and other income (expense), net

(1,641)

(2,732)

(1,656)

(6,633)

(8,429)

Income (loss) before provision for income taxes

14,039

6,982

(1,837)

(879)

(1,948)

Provision (benefit) for income taxes

(10,252)

751

(1,994)

(21,484)

(2,551)

Net income

$

24,291

$

6,231

$

157

$

20,605

$

603

Net income per share:

Basic

$

0.64

$

0.17

$

$

0.55

$

0.02

Diluted

$

0.62

$

0.16

$

$

0.53

$

0.02

Weighted average shares outstanding:

Basic

38,127

37,698

36,553

37,483

36,156

Diluted

39,482

38,973

37,256

38,712

36,864

Omnicell, Inc.

Condensed Consolidated Balance Sheets

(Unaudited, in thousands)

December 31,

2017

2016

ASSETS

Current assets:

Cash and cash equivalents

$

32,424

$

54,488

Accounts receivable, net

189,227

150,303

Inventories

96,137

69,297

Prepaid expenses

36,060

28,646

Other current assets

13,273

12,674

Total current assets

367,121

315,408

Property and equipment, net

42,595

42,011

Long-term investment in sales-type leases, net

15,435

20,585

Goodwill

337,751

327,724

Intangible assets, net

168,107

190,283

Long-term deferred tax assets

9,454

4,041

Other long-term assets

39,841

35,051

Total assets

$

980,304

$

935,103

LIABILITIES AND STOCKHOLDERS’ EQUITY

Current liabilities:

Accounts payable

$

48,290

$

27,069

Accrued compensation

27,241

26,722

Accrued liabilities

35,693

31,195

Long-term debt, current portion, net

15,208

8,410

Deferred revenue, net

86,104

87,516

Total current liabilities

212,536

180,912

Long-term, deferred revenue

17,244

17,051

Long-term deferred tax liabilities

28,579

51,592

Other long-term liabilities

9,829

8,210

Long-term debt, net

194,917

245,731

Total liabilities

463,105

503,496

Stockholders’ equity:

Total stockholders’ equity

517,199

431,607

Total liabilities and stockholders’ equity

$

980,304

$

935,103

Omnicell, Inc.

Condensed Consolidated Statements of Cash Flows

(Unaudited, in thousands)

Year Ended December 31,

2017

2016

Operating Activities

Net income

$

20,605

$

603

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

Depreciation and amortization

51,511

58,362

Loss on disposal of fixed assets

512

35

Gain related to contingent liability

(600)

Share-based compensation expense

21,857

19,500

Income tax benefits from employee stock plans

11

1,703

Deferred income taxes

(26,844)

(10,882)

Amortization of debt financing fees

1,590

1,590

Changes in operating assets and liabilities:

  Accounts receivable

(39,068)

8,047

  Inventories

(26,840)

(3,362)

  Prepaid expenses

(7,414)

(4,321)

  Other current assets

(2,074)

(1,093)

  Investment in sales-type leases

6,625

(9,639)

  Other long-term assets

(98)

2,043

  Accounts payable

19,709

(4,963)

  Accrued compensation

519

(2,052)

  Accrued liabilities

4,383

(3,287)

  Deferred revenue

(1,219)

4,480

  Other long-term liabilities

1,069

(6,264)

  Net cash provided by operating activities

24,834

49,900

Investing Activities

Purchase of intangible assets, intellectual property and patents

(160)

(1,372)

Software development for external use

(15,040)

(14,348)

Purchases of property and equipment

(15,341)

(13,445)

Business acquisitions, net of cash acquired

(4,446)

(312,158)

  Net cash used in investing activities

(34,987)

(341,323)

Financing Activities

Proceeds from debt, net

56,894

287,051

Repayment of debt and revolving credit facility

(102,500)

(34,500)

Payment for contingent consideration

(2,400)

(3,000)

At the market offering, net of offering costs

13,900

Proceeds from issuances under stock-based compensation plans

30,121

17,691

Employees’ taxes paid related to restricted stock units

(5,892)

(3,490)

  Net cash provided by (used in) financing activities

(9,877)

263,752

Effect of exchange rate changes on cash and cash equivalents

(2,034)

(58)

Net decrease in cash and cash equivalents

(22,064)

(27,729)

Cash and cash equivalents at beginning of period

54,488

82,217

Cash and cash equivalents at end of period

$

32,424

$

54,488

Omnicell, Inc.

Reconciliation of GAAP to Non-GAAP

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

Three Months Ended

Twelve Months Ended

December 31,
2017

September 30,
2017

December 31,
2016

December 31,
2017

December 31,
2016

Reconciliation of GAAP revenue to non-GAAP revenue:

GAAP revenue

$

197,944

$

186,782

$

171,974

$

716,165

$

692,623

Acquisition accounting impact related to deferred revenue

313

313

2,663

1,252

10,652

Non-GAAP revenue

$

198,257

$

187,095

$

174,637

$

717,417

$

703,275

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

GAAP gross profit

$

95,068

$

84,853

$

74,329

$

322,088

$

313,800

GAAP gross margin

48.0%

45.4%

43.2%

45.0%

45.3%

Share-based compensation expense

834

882

776

3,562

2,596

Amortization of acquired intangibles

2,818

2,985

5,266

11,488

20,890

Acquisition accounting impact related to deferred revenue

313

313

2,663

1,252

10,652

Inventory fair value adjustments

921

3,682

Acquisition related expenses

5

277

Severance and other expenses*

234

70

2,001

Non-GAAP gross profit

$

99,267

$

89,103

$

83,960

$

340,391

$

351,897

Non-GAAP gross margin

50.1%

47.6%

48.1%

47.4%

50.0%

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

GAAP operating expenses

$

79,388

$

75,139

$

74,510

$

316,334

$

307,319

GAAP operating expenses % to total revenue

40.1%

40.2%

43.3%

44.2%

44.4%

Share-based compensation expense

(4,708)

(4,377)

(4,663)

(18,295)

(16,904)

Amortization of acquired intangibles

(3,348)

(3,381)

(3,752)

(14,008)

(15,251)

Acquisition related expenses

(829)

(126)

(5,753)

Severance and other expenses*

(233)

(229)

(3,764)

Non-GAAP operating expenses

$

71,099

$

67,152

$

65,266

$

280,141

$

269,411

Non-GAAP operating expenses % to total revenue

35.9%

35.9%

37.4%

39.0%

38.3%

* 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,
2017

September 30,
2017

December 31,
2016

December 31,
2017

December 31,
2016

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

GAAP income (loss) from operations

$

15,680

$

9,714

$

(181)

$

5,754

$

6,481

GAAP operating income % to total revenue

7.9%

5.2%

(0.1)%

0.8%

0.9%

Share-based compensation expense

5,542

5,259

5,438

21,857

19,500

Amortization of acquired intangibles

6,166

6,366

9,017

25,496

36,141

Acquisition accounting impact related to deferred revenue

313

313

2,663

1,252

10,652

Inventory fair value adjustments

921

3,682

Acquisition related expenses

834

126

6,029

Severance and other expenses

467

299

5,765

Non-GAAP income from operations

$

28,168

$

21,951

$

18,692

$

60,250

$

82,485

Non-GAAP operating income % to total Non-GAAP revenue

14.2%

11.7%

10.7%

8.4%

11.7%

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

GAAP net income

$

24,291

$

6,231

$

157

$

20,605

$

603

Tax reform benefit impact

(13,391)

(13,391)

Share-based compensation expense

5,542

5,259

5,438

21,857

19,500

Amortization of acquired intangibles

6,166

6,366

9,017

25,496

36,141

Acquisition accounting impact related to deferred revenue

313

313

2,663

1,252

10,652

Inventory fair value adjustments

921

3,682

Acquisition related expenses

397

397

632

1,715

7,019

Severance and other expenses

467

299

5,765

Tax effect of the adjustments above(a)

(2,570)

(2,579)

(5,031)

(11,980)

(21,850)

Non-GAAP net income

$

21,215

$

16,286

$

13,797

$

51,319

$

55,747

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

Shares – diluted GAAP

39,482

38,973

37,256

38,712

36,864

Shares – diluted Non-GAAP

39,482

38,973

37,256

38,712

36,864

GAAP net income per share – diluted

$

0.62

$

0.16

$

$

0.53

$

0.02

Tax reform benefit impact

(0.34)

(0.35)

Share-based compensation expense

0.14

0.14

0.15

0.56

0.53

Amortization of acquired intangibles

0.16

0.16

0.24

0.67

0.98

Acquisition accounting impact related to deferred revenue

0.01

0.01

0.07

0.03

0.29

Inventory fair value adjustments

0.02

0.10

Acquisition related expenses

0.01

0.01

0.02

0.04

0.19

Severance and other expenses

0.01

0.01

0.16

Tax effect of the adjustments above(a)

(0.07)

(0.07)

(0.13)

(0.31)

(0.60)

Non-GAAP net income per share – diluted

$

0.54

$

0.42

$

0.37

$

1.33

$

1.51

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

GAAP net income

$

24,291

$

6,231

$

157

$

20,605

$

603

Share-based compensation expense

5,542

5,259

5,438

21,857

19,500

Interest (income) and expense, net

1,202

2,127

998

6,072

5,616

Depreciation and amortization expense

12,969

12,600

14,457

51,511

58,362

Acquisition accounting impact related to deferred revenue

313

313

2,663

1,252

10,652

Inventory fair value adjustments

921

3,682

Acquisition related expenses

397

397

632

1,715

7,019

Severance and other expenses

213

46

4,752

Income tax expense (benefit)

(10,252)

751

(1,994)

(21,484)

(2,551)

Non-GAAP Adjusted EBITDA (b)

$

34,675

$

27,724

$

23,272

$

86,280

$

102,883

(a)

Tax effects calculated for all adjustments except share-based compensation expense and tax reform benefit, using the tax rate of 35%.

(b)

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, 2017

Three Months Ended December 31, 2016

Automation
and
Analytics

Medication
Adherence

Total

Automation
and

Analytics

Medication
Adherence

Total

Revenues

$

163,142

$

34,802

$

197,944

$

143,583

$

28,391

$

171,974

Cost of revenues

79,225

23,651

102,876

77,566

20,079

97,645

Gross profit

83,917

11,151

95,068

66,017

8,312

74,329

Gross margin %

51.4%

32.0%

48.0%

46.0%

29.3%

43.2%

Operating expenses

47,049

10,539

57,588

47,402

7,325

54,727

Income from segment operations

$

36,868

$

612

$

37,480

$

18,615

$

987

$

19,602

Operating margin %

22.6%

1.8%

18.9%

13.0%

3.5%

11.4%

Corporate costs

21,800

19,783

Income (loss) from operations

$

15,680

$

(181)

Omnicell, Inc.

Segmented Information

(Unaudited, in thousands, except for percentages)

Year Ended December 31, 2017

Year Ended December 31, 2016

Automation
and
Analytics

Medication
Adherence

Total

Automation
and

Analytics

Medication
Adherence

Total

Revenues

$

590,392

$

125,773

$

716,165

$

593,626

$

98,997

$

692,623

Cost of revenues

308,443

85,634

394,077

310,967

67,856

378,823

Gross profit

281,949

40,139

322,088

282,659

31,141

313,800

Gross margin %

47.8%

31.9%

45.0%

47.6%

31.5%

45.3%

Operating expenses

193,700

41,735

235,435

198,511

24,843

223,354

Income from segment operations

$

88,249

$

(1,596)

$

86,653

$

84,148

$

6,298

$

90,446

Operating margin %

14.9%

(1.3)%

12.1%

14.2%

6.4%

13.1%

Corporate costs

80,899

83,965

Income from operations

$

5,754

$

6,481

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

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

$

163,142

$

34,802

$

197,944

Acquisition accounting impact related to deferred revenue

—%

—%

313

0.9%

0.9%

313

0.2%

0.2%

Non-GAAP Revenues

$

163,142

$

35,115

$

198,257

GAAP Gross profit

$

83,917

51.4%

$

11,151

32.0%

$

95,068

48.0%

Stock-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

$

87,106

53.4%

$

12,161

34.6%

$

99,267

50.1%

GAAP Operating income

$

36,868

22.6%

$

612

1.8%

$

37,480

18.9%

Stock-based compensation expense

2,184

1.3%

1.3%

376

1.08%

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

$

43,620

26.7%

$

3,103

8.8%

$

46,723

23.6%

GAAP Corporate costs

$

21,800

11.0%

Less: Stock-based compensation expense

(2,982)

(1.5)%

(1.5)%

Less: Acquisition-related expenses

(263)

(0.1)%

(0.1)%

Non-GAAP Corporate costs

$

18,555

9.4%

Non-GAAP Income from operations

$

28,168

14.2%

Omnicell, Inc.

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

(Unaudited, in thousands, except for percentages)

Three Months Ended December 31, 2016

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

$

143,583

$

28,391

$

171,974

Acquisition accounting impact related to deferred revenue

2,663

1.9%

1.8%

—%

—%

2,663

1.5%

1.5%

Non-GAAP Revenues

$

146,246

$

28,391

$

174,637

GAAP Gross profit

$

66,017

46.0%

$

8,312

29.3%

$

74,329

43.2%

Stock-based compensation expense

668

0.5%

0.5%

108

0.4%

0.4%

776

0.5%

0.4%

Amortization expense of acquired intangible assets

4,820

3.4%

3.3%

446

1.6%

1.6%

5,266

3.1%

3.0%

Acquisition accounting impact related to deferred revenue

2,663

1.9%

1.8%

—%

—%

2,663

1.5%

1.5%

Inventory fair value adjustments

921

0.6%

0.6%

—%

—%

921

0.5%

0.5%

Acquisitions related expenses

5

—%

—%

—%

—%

5

—%

—%

Non-GAAP Gross profit

$

75,094

51.3%

$

8,866

31.2%

$

83,960

48.1%

GAAP Operating income

$

18,615

13.0%

$

988

3.5%

$

19,603

11.4%

Stock-based compensation expense

2,672

1.9%

1.8%

270

1.0%

1.0%

2,942

1.7%

1.7%

Amortization expense of acquired intangible assets

7,494

5.2%

5.1%

1,523

5.4%

5.4%

9,017

5.2%

5.2%

Acquisition accounting impact related to deferred revenue

2,663

1.9%

1.8%

—%

—%

2,663

1.5%

1.5%

Inventory fair value adjustments

921

0.6%

0.6%

—%

—%

921

0.5%

0.5%

Acquisitions related expenses

23

—%

—%

—%

—%

23

—%

—%

Non-GAAP Operating income

$

32,388

22.1%

$

2,781

9.8%

$

35,169

20.1%

GAAP Corporate costs

$

19,784

11.5%

Less: Stock-based compensation expense

2,496

1.5%

1.4%

Less: Acquisition-related expenses

811

0.5%

0.5%

Non-GAAP Corporate costs

$

16,477

9.4%

Non-GAAP Income from operations

$

18,692

10.7%

OMCL-E

Cision View original content with multimedia:http://www.prnewswire.com/news-releases/omnicell-reports-results-for-fiscal-year-and-fourth-quarter-2017-300592303.html

SOURCE Omnicell, Inc.

Related Links

http://www.omnicell.com

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