Exhibit 99.1

 

 

Contact:

 

 

Rob Seim

 

Omnicell, Inc.

Chief Financial Officer

 

1201 Charleston Road

800-850-6664, ext. 6478

 

Mountain View, CA 94043

rob.seim@omnicell.com

 

 

 

Omnicell Announces Third Quarter 2009 Results

 

MOUNTAIN VIEW, Calif. — October 22, 2009— Omnicell, Inc. (NASDAQ: OMCL), a leading provider of system solutions to acute healthcare facilities, today announced results for its third quarter ended September 30, 2009.

 

GAAP results: Revenue for the third quarter of 2009 was $54.0 million, up $1.3 million or 2.5% from the second quarter of 2009, and down $10.4 million or 16.1% from the third quarter of 2008.

 

Third quarter 2009 net income as reported in accordance with U.S. generally accepted accounting principles (GAAP) was $0.9 million, or $0.03 per diluted share. This compares to net income of $0.9 million, or $0.03 per diluted share in the second quarter of 2009 and net income of $2.9 million, or $0.09 per diluted share in the third quarter of 2008.

 

Non-GAAP results: Excluding the impact on our results of recording $2.4 million in stock-based compensation expense related to ASC 718, “Stock Compensation” (formerly referred to as SFAS No. 123R), non-GAAP net income was $3.3 million for the third quarter of 2009, or $0.10 per diluted share. This compares to non-GAAP net income of $3.3 million, or $0.10 per diluted share for the second quarter of 2009, which excludes $2.4 million in stock compensation expense.  Third quarter 2009 results compare to non-GAAP net income of $5.7 million, or $0.18 per diluted share for the third quarter of 2008.

 

I am pleased with our performance in the third quarter,” said Randall Lipps, Omnicell President, Chairman and CEO. “The marketplace has reacted favorably to our steady expansion of patient safety and workflow management solutions. In the third quarter we began shipping our latest major software release, Omnicell 14.0, which gives our customers enhanced operating room anesthesia solutions and introduces our new proprietary Anywhere RN technology, which allows Omnicell cabinet transactions to be managed by nurses from virtually any workstation in the hospital, saving time and increasing efficiency in medication management. In addition, we are in the midst of going live at several large hospitals in both the domestic and international markets. Our solutions continue to attract new and existing customers who are committed to having the safest and most effective automation capabilities in their facilities, such as Barnes-Jewish Hospital-a US News and World Report Top Hospital and Missouri’s largest-to implement the Omnicell OptiFlex point-of-use supply solution in their operating rooms and cath labs.

 

Omnicell Conference Call Information

 

Omnicell will hold a conference call today at 1:30 p.m. PDT to discuss third 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 20153924. 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 2:30 p.m. PDT and will be available until 8:59 p.m. PDT on October 30. The replay access numbers are 1-800-642-1687 within the U.S. and 1-706-645-9291 for all other locations, conference code # 20153924.

 



 

About Omnicell

 

Omnicell, Inc. (NASDAQ: OMCL) is a leading provider of systems and software solutions targeting patient safety and operational efficiency in healthcare facilities. Since 1992, Omnicell has worked to enhance patient safety and allow clinicians to spend more time with their patients.

 

Omnicell medication-use product lines include solutions for the central pharmacy, nursing unit, operating room, and patient bedside. Solutions range from large central pharmacy “smart inventory” carousels to small handheld devices. From the point at which a medication arrives at the receiving dock to the time it is administered, Omnicell systems store it, package it, bar code it, order it, issue it, and provide information and controls on its use and reorder.

 

Omnicell supply product lines provide a healthcare institution with fast, effective control of costs, capture of charges for payer reimbursement, and timely reorder of supplies. Products range from high-security closed-cabinet systems and software to open-shelf and combination solutions in the nursing unit, cath lab and operating room.

 

Omnicell’s mission is to provide the best customer experience in healthcare, helping hospitals reduce medication errors, operate more efficiently, and decrease costs. For more information, 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 necessarily forward-looking. 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. The risk factors are described in the Company’s Securities and Exchange Commission (SEC) filings and include, without limitation, the unfavorable general economic and market conditions, the tightening in the credit market, the continued growth and acceptance of our products and services and the continued growth of the clinical automation and workflow automation market generally, the potential of increasing competition, the ability of the company to grow product backlog, retain key personnel, cut expenses, manage future changes in revenue levels, develop new products and integrate acquired products or intellectual property in a timely and cost-effective manner, and improve sales productivity. Prospective investors are cautioned not to place undue reliance on forward-looking statements.

 

Use of Non-GAAP Financial Information

 

This press release contains financial measures that are not calculated in accordance with U.S. generally accepted accounting principles (GAAP). Our management evaluates and makes operating decisions using various performance measures. In addition to Omnicell’s GAAP results, we also consider non-GAAP gross profit, non-GAAP operating expenses, non-GAAP net income, and non-GAAP earnings per diluted share.  These non-GAAP results should not be considered as an alternative to gross profit, operating expenses, net income, earnings per diluted share, or any other performance measure derived in accordance with GAAP.  We present these non-GAAP results because we consider them to be important supplemental measures of Omnicell’s performance.

 



 

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

 

a)  Stock-based compensation expense impact of ASC 718.  We recognize equity plan-related compensation expenses, which represents the fair value of all stock-based payments to employees, including grants of employee stock options, as required under ASC 718, “Stock Compensation”.

 

b) Restructuring charges (net of tax).  We incurred charges for employee severance in connection with a reduction in force in the first quarter of 2009, which was designed to align our cost structure with current business expectations.  These charges are not expected to be recurring and, as a non-recurring event, the financial impact is excluded from our non-GAAP results.

 

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

 

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 stock-based compensation expense related to ASC 718 is excluded from our non-GAAP financial measures:

 

i)  While stock-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 stock-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 stock-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 stock-based compensation expense would be inconsistent in amount and frequency and is therefore excluded from our non-GAAP results.

 

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 other 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.

 

OMCL-E

 



 

Omnicell, Inc.

Condensed Consolidated Statements of Operations

(in thousands, except per share data, unaudited)

 

 

 

Three Months Ended

 

Nine Months Ended

 

 

 

September 30,
 2009

 

June 30,
 2009

 

September 30,
 2008

 

September 30,
 2009

 

September 30,
 2008

 

Revenues:

 

 

 

 

 

 

 

 

 

 

 

Product

 

$

42,854

 

$

41,983

 

$

54,294

 

$

127,221

 

$

159,580

 

Services and other revenues

 

11,103

 

10,660

 

10,051

 

31,583

 

30,230

 

Total revenue

 

53,957

 

52,643

 

64,345

 

158,804

 

189,810

 

 

 

 

 

 

 

 

 

 

 

 

 

Cost of revenues:

 

 

 

 

 

 

 

 

 

 

 

Cost of product revenues

 

20,087

 

19,175

 

24,940

 

59,542

 

73,259

 

Cost of services and other revenues

 

6,621

 

6,539

 

6,642

 

20,055

 

19,083

 

Restructuring charges

 

 

 

 

1,209

 

 

Total cost of revenues

 

26,708

 

25,714

 

31,582

 

80,806

 

92,342

 

 

 

 

 

 

 

 

 

 

 

 

 

Gross profit

 

27,249

 

26,929

 

32,763

 

77,998

 

97,468

 

Operating expenses:

 

 

 

 

 

 

 

 

 

 

 

Research and development

 

4,981

 

4,574

 

4,685

 

13,532

 

13,939

 

Selling, general, and administrative

 

21,324

 

21,038

 

23,862

 

63,861

 

69,947

 

Restructuring charges

 

 

 

 

1,315

 

 

Total operating expenses

 

26,305

 

25,612

 

28,547

 

78,708

 

83,886

 

Income (loss) from operations

 

944

 

1,317

 

4,216

 

(710

)

13,582

 

Other income and expense, net

 

56

 

194

 

673

 

433

 

2,804

 

Income (loss) before provision for (benefit from) income taxes

 

1,000

 

1,511

 

4,889

 

(277

)

16,386

 

Provision for (benefit from) income taxes

 

146

 

607

 

1,975

 

(165

)

6,985

 

Net income (loss)

 

$

854

 

$

904

 

$

2,914

 

$

(112

)

$

9,401

 

 

 

 

 

 

 

 

 

 

 

 

 

Net income (loss) per share:

 

 

 

 

 

 

 

 

 

 

 

Basic

 

$

0.03

 

$

0.03

 

$

0.09

 

$

 

$

0.29

 

Diluted

 

$

0.03

 

$

0.03

 

$

0.09

 

$

 

$

0.28

 

 

 

 

 

 

 

 

 

 

 

 

 

Weighted average shares outstanding:

 

 

 

 

 

 

 

 

 

 

 

Basic

 

31,704

 

31,578

 

31,128

 

31,578

 

32,345

 

Diluted

 

32,380

 

31,961

 

32,138

 

31,578

 

33,498

 

 



 

Omnicell, Inc.

Condensed Consolidated Balance Sheets

(In thousands)

 

 

 

September 30,

 

December 31,

 

 

 

2009

 

2008

 

 

 

(unaudited)

 

(1)

 

 

 

 

 

 

 

ASSETS

Current assets:

 

 

 

 

 

Cash and cash equivalents

 

$

146,312

 

$

120,439

 

Accounts receivable, net

 

58,779

 

57,976

 

Inventories

 

10,445

 

12,957

 

Prepaid expenses

 

9,451

 

9,310

 

Deferred tax assets

 

14,871

 

14,871

 

Other current assets

 

6,083

 

9,434

 

Total current assets

 

245,941

 

224,987

 

 

 

 

 

 

 

Property and equipment, net

 

13,128

 

16,180

 

Non-current net investment in sales-type leases

 

9,470

 

10,896

 

Goodwill

 

24,982

 

24,982

 

Other intangible assets

 

4,847

 

6,706

 

Non-current deferred tax assets

 

15,730

 

15,889

 

Other assets

 

8,938

 

8,902

 

Total assets

 

$

323,036

 

$

308,542

 

 

 

 

 

 

 

LIABILITIES AND STOCKHOLDERS’ EQUITY

Current liabilities:

 

 

 

 

 

Accounts payable

 

$

10,430

 

$

9,377

 

Accrued compensation

 

7,621

 

8,889

 

Accrued liabilities

 

11,585

 

10,357

 

Deferred service revenue

 

14,359

 

12,084

 

Deferred gross profit

 

16,649

 

16,648

 

Total current liabilities

 

60,644

 

57,355

 

 

 

 

 

 

 

Long-term deferred service revenue

 

17,181

 

16,782

 

Other long-term liabilities

 

752

 

848

 

Total liabilities

 

78,577

 

74,985

 

 

 

 

 

 

 

Stockholders’ equity:

 

 

 

 

 

Total stockholders’ equity

 

244,459

 

233,557

 

 

 

 

 

 

 

Total liabilities and stockholders’ equity

 

$

323,036

 

$

308,542

 

 


(1) Information derived from our December 31, 2008 audited Consolidated Financial Statements.

 



 

Omnicell, Inc.

Reconciliation of GAAP to Non-GAAP

(In thousands, except per share data, unaudited)

 

 

 

Three months ended

 

 

 

September 30, 2009

 

June 30, 2009

 

September 30, 2008

 

 

 

Net income

 

Earnings
per share-
diluted

 

Net income

 

Earnings
per share-
diluted

 

Net income

 

Earnings
per share-
diluted

 

GAAP

 

$

854

 

$

0.03

 

$

904

 

$

0.03

 

$

2,914

 

$

0.09

 

Non-GAAP Adjustments:

 

 

 

 

 

 

 

 

 

 

 

 

 

ASC 718 adjustment (a)

 

 

 

 

 

 

 

 

 

 

 

 

 

Gross Margin

 

360

 

 

 

287

 

 

 

400

 

 

 

Operating Expenses

 

2,053

 

 

 

2,087

 

 

 

2,368

 

 

 

 

 

2,413

 

0.07

 

2,374

 

0.07

 

2,768

 

0.09

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Non-GAAP

 

$

3,267

 

$

0.10

 

$

3,278

 

$

0.10

 

$

5,682

 

$

0.18

 

 

 

 

Nine months ended

 

 

 

 

 

 

 

September 30, 2009

 

September 30, 2008

 

 

 

 

 

 

 

Net
income
(loss)

 

Earnings
(loss) per
share -
diluted

 

Net
income

 

Earnings
per share-
diluted

 

 

 

 

 

GAAP

 

$

(112

)

$

 

$

9,401

 

$

0.28

 

 

 

 

 

Non-GAAP Adjustments:

 

 

 

 

 

 

 

 

 

 

 

 

 

ASC 718 adjustment (a)

 

 

 

 

 

 

 

 

 

 

 

 

 

Gross Margin

 

1,025

 

 

 

1,326

 

 

 

 

 

 

 

Operating Expenses

 

6,246

 

 

 

7,442

 

 

 

 

 

 

 

Restructuring cost (net of tax) (b)

 

 

 

 

 

 

 

 

 

 

 

 

 

Gross profit

 

735

 

 

 

 

 

 

 

 

 

 

 

Operating expenses

 

799

 

 

 

 

 

 

 

 

 

 

 

 

 

8,805

 

0.28

 

8,768

 

0.26

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Non-GAAP

 

$

8,693

 

$

0.28

 

$

18,169

 

$

0.54

 

 

 

 

 

 


(a) This adjustment reflects the accounting impact of non-cash stock-based compensation expense related to the impact of ASC 718 (formerly referred to as SFAS No. 123R) for the periods shown.

 

(b) This is the net of tax impact of the restructuring activities executed during the first quarter of 2009.