OMNICELL, INC. 
By MOUNTAIN VIEW, Calif., Jan. 28 /PRNewswire-FirstCall/ -- Omnicell, Inc. (Nasdaq: OMCL), a leading provider of system solutions to acute healthcare facilities, today announced results for its fourth quarter and year ended December 31, 2009.
GAAP results: Revenue for the fourth quarter of 2009 was $54.7 million, up $0.7 million or 1.3% from the third quarter of 2009, and down $7.4 million or 11.9% from the fourth quarter of 2008. Revenue for the year ended December 31, 2009 was $213.5 million, down $38.4 million or 15.2% from the year ended December 31, 2008.
Fourth quarter 2009 net income as reported in accordance with U.S. generally accepted accounting principles (GAAP) was $0.6 million, or $0.02 per diluted share. This compares to net income of $0.9 million, or $0.03 per diluted share in the third quarter of 2009 and net income of $3.3 million, or $0.10 per diluted share in the fourth quarter of 2008. For the year ended December 31, 2009, net income was $0.4 million, or $0.01 per diluted share. This compares to net income of $12.7 million, or $0.38 per diluted share for the year ended December 31, 2008.
Non-GAAP results: Excluding the impact on our results of recording $2.5 million in stock-based compensation expense related to ASC 718, "Stock Compensation" (formerly referred to as SFAS No. 123R) and $0.4 million in income tax expense related to prior year research and development tax credits, non-GAAP net income was $3.4 million for the fourth quarter of 2009, or $0.11 per diluted share. This compares to non-GAAP net income of $3.3 million, or $0.10 per diluted share for the third quarter of 2009, which excluded $2.4 million in stock-based compensation expense, and non-GAAP net income of $5.5 million, or $0.17 per diluted share for the fourth quarter of 2008, which excluded $2.4 million of stock-based compensation expense and $0.2 million of income tax benefits related to prior year research and development tax credits. Excluding $9.7 million in stock-based compensation expense, $2.5 million non-recurring costs ($1.5 million, net of tax) from our first quarter of 2009 restructuring activities and $0.4 million in income tax expense related to prior years research and development tax credits, non-GAAP net income was $12.1 million for the year ended December 31, 2009, or $0.38 per diluted share. Excluding $11.2 million in stock-based compensation expense and $0.2 million in income tax benefits related to prior years research and development tax credits, non-GAAP net income was $23.6 million for the year ended December 31, 2008, or $0.71 per diluted share.
Product backlog as of December 31, 2009 totaled $114 million, up $4 million or 4% from December 31, 2008.
"The 2009 fourth quarter saw Omnicell secure first orders from some of the most prestigious hospital networks in the United States including Carolinas Health System, CoxHealth and NewYork-Presbyterian," said Randall Lipps, president and CEO of Omnicell. "We remain confident that customers are recognizing our solution's unique benefits and are committed to improving the efficiencies and safety in their facilities. It has been a rewarding quarter, and we expect continued growth in 2010."
Omnicell Conference Call Information
Omnicell will hold a conference call today at 1:30 p.m. PST to discuss fourth quarter and 2009 year-end 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 52186247. 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. PST and will be available until 8:59 p.m. PST on February 26. The replay access numbers are 1-800-642-1687 within the U.S. and 1-706-645-9291 for all other locations, conference code # 52186247.
About Omnicell
Omnicell, Inc. (NASDAQ: OMCL) is a leading provider of systems that enable healthcare facilities to increase operational efficiency, enhance patient safety and allow clinicians to spend more time with their patients.
Founded in 1992, Omnicell's medication-use solutions include complete automation systems for the central pharmacy, anesthesia workstations for the operating room, dispensing cabinet systems for nursing units, and safe, secure medication transportation and verification systems to the patient bedside. From a medication's arrival at the receiving dock to its dosing to the patient, 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 comprehensive supply chain solutions that result in 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.
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 and decreased demand for capital equipment, the lack of available credit opportunities, 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.
c) Income tax adjustments. To provide transparency into the Company's trends and performance, we consider non-recurring research and development tax credit adjustments, to be non-GAAP adjustments.
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)
Three Months Ended Year Ended
-------------------------------- --------------------
December September December December December
31, 2009 30, 2009 31, 2008 31, 2009 31, 2008
(unaudited) (unaudited) (1)(2) (unaudited) (1)(2)
----------- ---------- -------- ---------- ---------
Revenues:
Product $42,936 $42,854 $51,316 $170,068 $211,461
Services and
other revenues 11,717 11,103 10,739 43,389 40,404
------ ------ ------ ------- -------
Total revenue 54,653 53,957 62,055 213,457 251,865
------ ------ ------ ------- -------
Cost of revenues:
Cost of product
revenues 20,474 20,087 24,202 80,016 97,461
Cost of services
and other
revenues 6,956 6,621 6,687 27,011 25,770
Restructuring
charges - - - 1,209 -
------ ------ ------ ------- -------
Total cost of
revenues 27,430 26,708 30,889 108,236 123,231
------ ------ ------ ------- -------
Gross profit 27,223 27,249 31,166 105,221 128,634
Operating expenses:
Research and
development 4,037 4,981 4,256 17,569 18,196
Selling, general,
and
administrative 21,807 21,324 23,152 85,668 93,098
Restructuring
charges - - - 1,315 -
------ ------ ------ ------- -------
Total operating
expenses 25,844 26,305 27,408 104,552 111,294
------ ------ ------ ------- -------
Income from
operations 1,379 944 3,758 669 17,340
Other income and
expense, net 91 56 578 523 3,382
------ ------ ------ ------- -------
Income before
provision
for income taxes 1,470 1,000 4,336 1,192 20,722
Provision for
income taxes 913 146 1,013 748 7,998
------ ------ ------ ------- -------
Net income $557 $854 $3,323 $444 $12,724
====== ====== ====== ======= =======
Net income per
share:
Basic $0.02 $0.03 $0.11 $0.01 $0.40
Diluted $0.02 $0.03 $0.10 $0.01 $0.38
Weighted average
shares
outstanding:
Basic 31,927 31,704 31,265 31,691 32,076
Diluted 32,513 32,380 31,849 32,063 33,108
(1) Information derived from our December 31, 2008 audited Consolidated
Financial Statements.
(2) Certain amounts which are not material have been reclassified to
conform with our current presentation in both product revenue and
service revenue.
Omnicell, Inc.
Condensed Consolidated Balance Sheets
(In thousands)
December 31, December 31,
2009 2008
------------ ------------
(unaudited) (1)
ASSETS
Current assets:
Cash and cash equivalents $169,230 $120,439
Accounts receivable, net 42,511 57,976
Inventories 9,582 12,957
Prepaid expenses 8,779 9,310
Deferred tax assets 15,247 14,871
Other current assets 5,870 9,434
-------- --------
Total current assets 251,219 224,987
Property and equipment, net 13,209 16,180
Non-current net investment in
sales-type leases 8,709 10,896
Goodwill 24,982 24,982
Other intangible assets 4,232 6,706
Non-current deferred tax assets 9,666 15,889
Other assets 9,322 8,902
-------- --------
Total assets $321,339 $308,542
======== ========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $10,313 $9,377
Accrued compensation 8,095 8,889
Accrued liabilities 11,997 10,357
Deferred service revenue 14,457 12,084
Deferred gross profit 12,768 16,648
-------- --------
Total current liabilities 57,630 57,355
Long-term deferred service revenue 20,810 16,782
Other long-term liabilities 595 848
-------- --------
Total liabilities 79,035 74,985
Stockholders' equity:
Total stockholders' equity 242,304 233,557
-------- --------
Total liabilities and
stockholders' equity $321,339 $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
December 31, September 30, December 31,
2009 2009 2008
----------------- ----------------- -----------------
Earnings Earnings Earnings
per per per
Net share- Net share- Net share-
income diluted income diluted income diluted
------ -------- ------ -------- ------ --------
GAAP $557 $0.02 $854 $0.03 $3,323 $0.10
Non-GAAP
Adjustments:
ASC 718
adjustment (a)
Gross
Margin 453 360 283
Operating
Expenses 2,001 2,053 2,113
Non-recurring
tax
adjustment (c) 422 (246)
------ ------ ------
2,876 0.09 2,413 0.07 2,150 0.07
Non-GAAP $3,433 $0.11 $3,267 $0.10 $5,473 $0.17
====== ===== ====== ===== ====== =====
Year ended
---------------------------------------------------
December 31, 2009 December 31, 2008
---------------------- ------------------------
Earnings Earnings
Net per share - Net per share-
income diluted income diluted
------ ----------- ------ ----------
GAAP $444 $0.01 $12,724 $0.38
Non-GAAP
Adjustments:
ASC 718
adjustment (a)
Gross Margin 1,478 1,610
Operating
Expenses 8,247 9,555
Restructuring
cost (net of
tax) (b)
Gross profit 735
Operating
expenses 799
Non-recurring
tax adjustment
(c) 422 (246)
------- ----- ------- -----
11,681 0.37 10,919 0.33
Non-GAAP $12,125 $0.38 $23,643 $0.71
======= ===== ======= =====
(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
commenced during the first quarter of 2009.
(c) This adjustment reflects the impact on the Company's income tax
provision (benefit) from non-recurring liability adjustments primarily
related to research and development tax credits.
SOURCE Omnicell, Inc.
