Omnicell Announces Second Quarter 2013 Results

                Omnicell Announces Second Quarter 2013 Results

Results include record revenues and profit larger than expectations

PR Newswire

MOUNTAIN VIEW, Calif., Aug. 1, 2013

MOUNTAIN VIEW, Calif., Aug. 1, 2013 /PRNewswire/ -- Omnicell,Inc. (NASDAQ:
OMCL), a leading provider of medication and supply management solutions to
healthcare systems, today announced results for its quarter ended June 30,
2013.

(Logo: http://photos.prnewswire.com/prnh/20120731/SF48971LOGO-a)

GAAP results: Revenue for the second quarter of 2013 was $93.7 million, up
$6.6 million or 7.5% from the first quarter of 2013, and up $18.3 million or
24.3% from the second quarter of 2012. Revenue for the six months ended June
30, 2013 was $180.8 million, up $41.3 million or 29.6% from the six months
ended June 30, 2012.

Second quarter 2013 net income as reported in accordance with U.S. generally
accepted accounting principles (GAAP) was $6.0 million, or $0.17 per diluted
share. This compares to net income of $3.4 million, or $0.10 per diluted
share, in the first quarter of 2013 and net income of $1.4 million, or $0.04
per diluted share, in the second quarter of 2012. For the six months ended
June 30, 2013, net income was $9.4 million, or $0.27 per diluted share. This
compares to net income of $3.7 million, or $0.11 per diluted share, for the
six months ended June 30, 2012.

Non-GAAP results: Non-GAAP net income was $9.4 million for the second quarter
of 2013, or $0.27 per diluted share. Non-GAAP net income for the second
quarter excludes $2.7 million of stock-based compensation expense and $1.1
million ($0.7 million net of the $0.4 million tax effect) of amortization
expense for all intangible assets associated with acquisitions made by
Omnicell in 2012 and earlier. This compares to non-GAAP net income of $6.7
million, or $0.20 per diluted share for the second quarter of 2012, excluding
$2.2 million of stock-based compensation expense, $4.9 million of acquisition
transaction and integration costs ($2.9 million net of the $2.0 million tax
effect), and $0.5 million ($0.3 million net of the $0.2 million tax effect) of
amortization expense for all intangible assets associated with prior
acquisitions. Second quarter 2013 results compare to non-GAAP net income of
$7.4 million, or $0.21 per diluted share for the first quarter of 2013.
Non-GAAP net income for the first quarter excluded $2.9 million of stock-based
compensation expense and $0.7 million ($0.4 million net of the $0.3 million
tax effect) of reorganization costs related to the continued integration of
MTS medication technologies, which was acquired in May of 2012, and $1.1
million ($0.6 million net of the $0.5 million tax effect) of amortization
expense for all intangible assets associated with acquisitions.

For the six months ended June 30, 2013, non-GAAP net income was $16.8 million,
or $0.48 per diluted share. Non-GAAP net income for the six months ended June
30, 2013 excludes $5.6 million of stock-based compensation expense and $2.1
million ($1.3 million net of the $0.8 million tax effect) of amortization
expense for all intangible assets associated with acquisitions. For the six
months ended June 30, 2012, non-GAAP net income was $11.3 million, or $0.33
per diluted share. Non-GAAP net income for the six months ended June 30, 2012
excludes $4.4 million of stock-based compensation expense, $4.9 million of
acquisition transaction and integration costs ($2.9 million net of the $2.0
million tax effect), and $0.5 million ($0.3 million net of the $0.2 million
tax effect) of amortization expense for all intangible assets associated with
acquisitions.

"Omnicell is on track for a strong fiscal 2013 with record revenue in the
second quarter," said Randall Lipps, Omnicell president, chairman and CEO.

"By all measures, Omnicell continues to perform well against competition.
Thirty percent of bookings were from competitive conversions such as the
14-hospital Baptist Memorial Health Care system, Wisconsin's ProHealth Care
and other first-time customers," added Mr. Lipps. "And recently KLAS, a
leading independent healthcare research firm, named Omnicell the 2013 number
one overall pharmacy equipment vendor. Further validating Omnicell value, our
automated medication dispensing system achieved the top ranking, 'Best in
KLAS', for the eighth consecutive year, and the company's central pharmacy
products received top ratings in three categories."

Omnicell Conference Call Information

Omnicell will hold a conference call today at 1:30 p.m. PT to discuss second
quarter financial results. The conference call can be monitored by dialing
1-800-696-5518 within the U.S. or 1-706-758-4883 for all other locations. The
Conference ID # is 19881764. 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 12:00p.m. PT
on August 15. The replay access numbers are 1-855-859-2056 within the U.S. and
1-404-537-3406 for all other locations, conference code # 19881764.

About Omnicell

For over 20 years, the mission of Omnicell (NASDAQ: OMCL) has been creating
new efficiencies to help improve patient care, anywhere it is delivered.
Omnicell is a leading supplier of comprehensive automation and business
analytics software solutions for patient-centric medication and supply
management across the entire healthcare continuum, from the acute care
hospital setting to post-acute skilled nursing and long-term care facilities
to the home.

Since 1992, more than 2,600 Acute Care customers worldwide have utilized
Omnicell's medication automation, supply chain and analytics solutions to
enable them to increase operational efficiency, reduce errors, deliver
actionable intelligence and improve patient safety. Omnicell Non-Acute Care
solutions, including its MTS Medication Technologies brand, provide innovative
medication adherence packaging solutions that can help reduce costly hospital
readmissions and enable approximately 6,000 institutional and retail
pharmacies worldwide to maintain high accuracy and quality standards in
medication dispensing and administration while optimizing productivity and
controlling costs.

For more information about Omnicell, 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 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, the potential
failure to realize the anticipated benefits of the MTS acquisition, including
our ability to take advantage of the growth opportunities in medication
management across the spectrum of healthcare settings from long term care to
home care, unfavorable general economic and market conditions, risks to growth
and acceptance of our products and services, including competitive
conversions, and to growth of the clinical automation and workflow automation
market generally, the potential of increasing competition, potential
regulatory changes, and the ability of the company to improve sales
productivity to grow product backlog and to develop new products and integrate
acquired companies. 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
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 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) Stock-based compensation expense impact of Accounting Standards
Codification (ASC) 718.We recognize equity plan-related compensation
expenses, which represent the fair value of all share-based payments to
employees, including grants of employee stock options, as required under ASC
718, "Stock Compensation" as non-GAAP adjustments in each period.

b) Reorganization costs. During the six months ended June 30, 2013, we
recorded $0.7 million of reorganization costs related to our Non-Acute Care
segment ($0.4 million net of the $0.3 million tax effect). This charge is not
expected to be recurring and, as such, the financial impact is excluded from
our non-GAAP results.

c) Acquisition-related transaction and integration expenses. In connection
with our acquisition of MTS, we recorded $4.9 million of acquisition
transaction and integration costs ($2.9 million net of the $2.0 million tax
effect) in the second quarter of 2012. This charge is not expected to be
recurring and, as such, the financial impact is excluded from our non-GAAP
results.

d)Intangible assets amortization from business acquisitions. We excluded from
our non-GAAP results the amortization expense resulting from the MTS
acquisition as well as earlier Omnicell acquisitions. This impacts the second
quarter of fiscal 2013 non-GAAP results by $1.1 million ($0.7 million net of
the $0.4 million tax effect) and the first quarter of fiscal 2013 non-GAAP
results by $1.1 million ($0.6 million net of the $0.5 million tax effect).
This impacts the June 30, 2013 year-to-date non-GAAP results by $2.1 million
($1.3 million net of $0.8 million tax effect) and impacts June 30, 2012 second
quarter and year-to-date non-GAAP results by $0.5 million ($0.3 million net of
the $0.2 million tax effect).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.

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 share-based compensation expense
related to ASC 718 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 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:

  oOmnicell'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.
  oOther 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.

OMCL-E



Omnicell, Inc.

Condensed Consolidated Statements of Operations

(in thousands, except per share data, unaudited)
                           ThreeMonthsEnded             Six MonthsEnded
                           June30,  March31,  June30,  June30,   June30,
                           2013      2013       2012      2013       2012
Revenues:
Product                    $ 75,581  $  69,236  $ 59,269  $ 144,817  $ 107,793
Services and other         18,105    17,874     16,115    35,979     31,734
revenues
Total revenue              93,686    87,110     75,384    180,796    139,527
Cost of revenues:
Cost of product revenues   36,286    33,547     28,600    69,833     48,896
Cost of services and       8,032     8,196      7,408     16,228     15,506
other revenues
Total cost of revenues     44,318    41,743     36,008    86,061     64,402
Gross profit               49,368    45,367     39,376    94,735     75,125
Operating expenses:
Research and development   7,150     7,954      5,499     15,104     11,993
Selling, general, and      32,859    33,244     31,446    66,104     57,066
administrative
Total operating expenses   40,009    41,198     36,945    81,208     69,059
Income from operations     9,359     4,169      2,431     13,527     6,066
Other income and           63        (223)      (73)      (159)      23
(expense), net
Income before provision    9,422     3,946      2,358     13,368     6,089
for income taxes
Provision for income       3,406     561        983       3,967      2,363
taxes
                                       
Net income                 $         $          $ 1,375   $ 9,401    $ 3,726
                             6,016      3,385
Net income per share:
Basic                      $ 0.17    $  0.10    $ 0.04    $ 0.28     $ 0.11
Diluted                    $ 0.17    $  0.10    $ 0.04    $ 0.27     $ 0.11
Weighted average shares
outstanding:
Basic                      34,450    33,900     33,390    34,177     33,377
Diluted                    35,374    34,820     34,316    35,099     34,329







Omnicell, Inc.

Condensed Consolidated Balance Sheets

(In thousands)
                                                  June 30,     December31,
                                                  2013         2012
                                                  (unaudited)  (1)
ASSETS
Current assets:
Cash and cash equivalents                         $  87,334    $   62,313
Short-term investments                            —            —
Accounts receivable, net                          63,840       55,116
Inventories                                       26,360       26,903
Prepaid expenses                                  15,928       15,392
Deferred tax assets                               11,860       11,860
Other current assets                              7,899        9,172
 Total current assets                           213,221      180,756
Property and equipment, net                       34,114       34,107
Non-current net investment in sales-type leases   13,222       13,228
Goodwill                                          111,343      111,407
Other intangible assets                           83,468       85,550
Non-current deferred tax assets                   985          993
Other assets                                      15,775       15,778
 Total assets                                   $  472,128   $   441,819
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable                                  $    17,459  $   18,255
Accrued compensation                              11,239       11,613
Accrued liabilities                               14,053       11,988
Deferred service revenue                          20,434       20,449
Deferred gross profit                             25,350       20,772
 Total current liabilities                      88,535       83,077
Non-current deferred service revenue              18,598       19,892
Non-current deferred tax liabilities              26,225       26,491
Other long-term liabilities                       5,039        4,809
Total liabilities                                 138,397      134,269
Stockholders' equity:
 Total stockholders' equity                     333,731      307,550
  Total liabilities and stockholders' equity  $  472,128   $   441,819



(1) Information derived from our December31, 2012 audited Consolidated
    Financial Statements.



Omnicell, Inc.

Reconciliation of GAAP to Non-GAAP

(In thousands, except per share data, unaudited)
                 Threemonthsended
                 June 30,2013        March 31,2013       June 30,2012
                 Net      Netincome  Net      Netincome  Net      Netincome
                 income   pershare-  income   pershare-  income   pershare-
                          diluted              diluted              diluted
GAAP             $ 6,016  $   0.17    $ 3,385  $   0.10    $ 1,375  $   0.04
Non-GAAP
adjustments:
Business
acquisition
costs
Reorganization   —                    732                  —
costs (a)
 Transaction
and integration                                            
costs for        —                    —
acquisitions                                               4,855
(b)

Amortization of                                            
intangible       1,060                1,060
assets acquired                                            558
by acquisition
(c)
 Subtotal
pretax           1,060                1,792                5,413
adjustments
Income tax                                                 
effect of       (382)                (716)
non-GAAP                                                   (2,256)
adjustments (d)
Subtotal
after-tax        678                  1,076                3,157
adjustments
ASC 718
share-based
compensation
adjustment (e)
Gross profit     325                  305                  233
Operating        2,362                2,621                1,980
expenses
Total after-tax  3,365    0.10        4,002    0.11        5,370    0.16
adjustments
Non-GAAP         $ 9,381  $   0.27    $ 7,387  $   0.21    $ 6,745  $   0.20



(a) This adjustment is for reorganization costs related to our Non-Acute Care
     segment for the three months ended March 31, 2013.
(b)  This adjustment is for the incurrence of transaction and integration
     costs related to our acquisition of MTS in May 2012.
     Beginning with the second quarter of 2012, we are recognizing the
(c)  amortization expense resulting from all intangible assets recorded from
     business acquisitions as a non-GAAP adjustment, including MTS and prior
     acquisitions.
(d)  Tax effects are calculated using the effective tax rates for the
     respective periods presented.
     This adjustment reflects the accounting impact of non-cash stock-based
(e)  compensation expense related to the impact of ASC 718 for the periods
     shown







Omnicell, Inc.

Reconciliation of GAAP to Non-GAAP

(In thousands, except per share data, unaudited)
                                    Six months ended
                                    June 30,2013         June 30,2012
                                    Net       Netincome  Net       Netincome
                                    income    pershare-  income    pershare-
                                              diluted               diluted
GAAP                                $ 9,401   $   0.27    $ 3,726   $   0.11
Non-GAAP adjustments:
Business acquisition costs
Reorganization costs (a)            732                   —
 Transaction and integration     —                     4,855
costs for acquisitions (b)
 Amortization of intangible                            
assets acquired by acquisition (c)  2,120
                                                          558
Subtotal pretax adjustments         2,852                 5,413
Income tax effect of non-GAAP      (1,099)               (2,256)
adjustments (d)
Subtotal after-tax adjustments      1,753                 3,157
ASC 718 share-based compensation
adjustment (e)
Gross profit                        629                   501
Operating expenses                  4,984                 3,919
Total after tax adjustments         7,366     0.21        7,577     0.22
Non-GAAP                            $ 16,767  $   0.48    $ 11,303  $   0.33



(a) This adjustment is for reorganization costs related to our Non-Acute Care
    segment for the six months ended June 30, 2013.
(b) This adjustment is for the incurrence of transaction and integration costs
    related to our acquisition of MTS in May 2012.
    Beginning with the second quarter of 2012, we are recognizing the
(c) amortization expense resulting from all intangible assets recorded from
    business acquisitions as a non-GAAP adjustment, including MTS and prior
    acquisitions.
(d) Tax effects are calculated using the effective tax rates for the
    respective periods presented.
    This adjustment reflects the accounting impact of non-cash stock-based
(e) compensation expense related to the impact of ASC 718 for the periods
    shown

Omnicell, Inc.

Calculation of Adjusted EBITDA (1)

(In thousands, unaudited)
                             ThreeMonthsEnded             Six months ended
                             June30,  March31,  June 30,  June30,  June 30,
                             2013      2013                 2013
                                                  2012                2012
GAAP net income              $ 6,016   $  3,385   $ 1,375   $ 9,401   $ 3,726
Add back:
ASC 718 stock compensation   2,687     2,926      2,213     5,613     4,420
expense
Reorganization costs                   732                  732
Transaction and integration
costs for acquisitions,      —         —          4,855     —         4,885
pre-tax
Interest                     (7)       106        (24)      99        (55)
Depreciation and             4,773     4,471      2,998     9,244     5,333
amortization expense
Income tax expense           3,406     561        983       3,967     2,363
Non-GAAP adjusted EBITDA     $ 16,875  $  12,181  $ 12,400  $ 29,056  $ 20,672
(1)



(1) Defined as earnings before interest income and expense, taxes,
depreciation and amortization, and non-cash expenses, including stock
compensation expense, per ASC 718, as well excluding certain non-GAAP
adjustments. The non-GAAP adjustments for the quarter ended March 31, 2013 and
six months ended June 30, 2013 exclude transaction and integration costs for
MTS, acquired in May 2012. The non-GAAP adjustments for the three and six
months ended June 30, 2012 also exclude transaction and integration costs for
MTS, acquired in May 2012.



SOURCE Omnicell, Inc.

Website: http://www.omnicell.com
Contact: Rob Seim, Chief Financial Officer, Omnicell, Inc., 800-850-6664, ext.
6478, rob.seim@omnicell.com