Omnicell (OMCL) 8-K Results of Operations and Financial Condition

Exhibit 99.1

Contact:
Dennis P. Wolf	Omnicell, Inc.
EVP of Operations, Finance,	1201 Charleston Road
Administration & CFO	Mountain View, CA 94043
800-850-6664, ext. 6482
dennisw@omnicell.com

For Immediate Release

Omnicell Announces Record Revenue and Backlog for Third Quarter 2004

MOUNTAIN VIEW, Calif. – Oct. 21, 2004 — Omnicell, Inc. (NASDAQ: OMCL), a leading provider of patient safety solutions preferred by nurses, today announced results for the quarter ended September 30, 2004.

Financial highlights were as follows:

•Net income for the quarter was $3.3 million or $0.12 per diluted share, compared to net income of $2.3 million or $0.09 per diluted share for the same period of 2003 and net income of $2.4 million or $0.09 per diluted share for the second quarter of 2004.

•For the third quarter of 2004, total revenue was a record $32.7 million, compared to $26.4 million for the same period in 2003 and $29.2 million for the second quarter of 2004.

•Total operating margin was $3.3 million, compared to $2.5 million for the same period of 2003 and an operating margin of $2.5 million for the second quarter of 2004.

•Gross margin was 58.3% for the third quarter of 2004, compared to 59.0% for the same period in 2003 and 60.5% for the second quarter of 2004.

•Total operating expenses were $15.8 million for the third quarter of 2004, compared to $13.1 million for the same period of 2003 and $15.2 million for the second quarter of 2004.

•Cash balances as of September 30, 2004, were down by $0.9 million to $32.6 million, compared to $33.5 million as of December 31, 2003.

Other highlights included:

•Total backlog as of September 30, 2004 was $49.7 million, compared to $46.4 million as of June 30, 2004, representing an increase of $3.3 million. Backlog increased 36% from the same period of last year.

•As of September 30, 2004, we had completed our installation obligation for 31,104 medication and supply dispensing systems at 1,534 healthcare facilities.

Omnicell Chairman, President and CEO Randall A. Lipps, commenting on the current quarter’s business results, said, “We are very pleased with our third quarter performance, as we again posted record revenues and record bookings. Deals greater than $500 thousand drove the strong growth in backlog, reflecting continued healthy demand for our medication-use process solutions as well as our supply chain management products.”

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Conference Call Details

Management will report financial results for the second quarter of 2004 on Thursday, October 21, at 2:00 p.m. PDT via conference call. Investors and analysts interested in joining the conference may access the call by dialing 800-366-7417 — toll-free (domestic) or 303-262-2190 — direct-dial (international) approximately 10 minutes prior to the scheduled start. A replay of the call will be available from 4:00 p.m. PDT on October 21 through 11:59 p.m. PDT on October 28. Dialing 800-405-2236 — toll-free (domestic) or
303-590-3000 — direct-dial (international) and entering the passcode 11011628# for both numbers will access the call replay. On the conference call, management will be discussing certain additional financial and statistical information. That information can be located on the “Investor Relations” page of Omnicell’s Web site at www.omnicell.com.

About Omnicell

Established in 1992, Omnicell (NASDAQ: OMCL) is a leading provider of patient safety solutions preferred by nurses. Improving patient care by enhancing operational efficiency, Omnicell solutions are used throughout the healthcare facility—in the pharmacy, nursing units, surgical services, cath lab, and all the way to the patient’s bedside. The company’s MedGuard™ line of solutions for the medication-use process includes systems for physician order management, automated pharmacy retrieval, medication packaging, medication dispensing, and nursing workflow automation with bar code medication administration. For the medical-surgical supply chain, Omnicell’s OptiFlex™ product line provides open bar code systems, cabinet-based supply management, integrated open and cabinet-based systems, and Web-based procurement. More than 1,500 healthcare facilities use Omnicell solutions to help reduce medication errors, operate more efficiently, and decrease costs—ultimately contributing to improved clinical and financial outcomes. 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 filings and include, without limitation, 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 maintain profitability, grow product backlog, retain key personnel, cut expenses, 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.

(see detailed financial results on next page)

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OMNICELL, INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(in thousands, except per share amounts)

(Unaudited)

	Three months ended September 30,								Nine months ended September 30,
	2004			2003			Change (%)		2004			2003			Change (%)
Revenues:
Product revenues	$	26,767		$	21,157				$	72,374		$	59,161
Service and other revenues	5,967			5,202					17,396			14,414
Total revenues	32,734			26,359			24	%	89,770			73,575			22	%
Costs of revenues:
Cost of product revenues	11,344			8,683					29,881			25,208
Cost of service and other revenues	2,302			2,117					6,508			5,542
Total cost of revenues	13,646			10,800					36,389			30,750
Gross profit	19,088			15,559			23	%	53,381			42,825			25	%
Operating expenses:
Research and development	2,476			2,256					6,679			6,731
Selling general and administrative	13,325			10,794					38,419			31,216
Restructuring and severance charges	—			—					171			630
Total operating expenses	15,801			13,050			21	%	45,269			38,577			17	%
Income from operations	3,287			2,509					8,112			4,248
Interest and other income	105			116					266			376
Interest and other expense	(12		)	(41		)			(70		)	(118		)
Income before provision for income taxes	3,380			2,584					8,308			4,506
Provision for income taxes	124			257					325			442
Net income	$	3,256		$	2,327		40	%	$	7,983		$	4,064		96	%
Net income per share - basic	$	0.13		$	0.10				$	0.32		$	0.18
Net income per share - diluted	$	0.12		$	0.09				$	0.29		$	0.17
											��
Weighted average shares outstanding - basic	25,038			22,961			9	%	24,697			22,482			10	%
Weighted average shares outstanding - diluted	27,571			26,658			3	%	27,809			24,620			13	%

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OMNICELL, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(in thousands)

	September 30,		December 31,		Change
	2004		2003 (1)		($)		(%)
	(Unaudited)
ASSETS
Current assets:
Cash, cash equivalents and short term investments	$	32,583	$	33,524	(941	)	-3	%
Accounts receivable, net	17,420		14,529		2,891		20	%
Inventories	17,197		8,783		8,414		96	%
Receivables subject to a sales agreement	2,737		2,737		—		0	%
Other current assets	7,066		3,966		3,100		78	%
Total current assets	77,003		63,539		13,464		21	%
Property and equipment, net	5,764		4,833		931		19	%
Long-term receivables subject to a sales agreement	3,247		4,985		(1,738	)	-35	%
Other assets	12,691		11,110		1,581		14	%
Total assets	$	98,705	$	84,467	14,238		17	%
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable	$	8,334	$	2,921	5,413		185	%
Accrued liabilities	9,827		15,403		(5,576	)	-36	%
Deferred service revenue	14,861		12,650		2,211		17	%
Deferred gross profit	8,223		10,125		(1,902	)	-19	%
Obligation resulting from sale of receivables	2,737		2,737		—		0	%
Current portion of note payable	—		305		(305	)	-100	%
Total current liabilities	43,982		44,141		(159	)	0	%
Long-term obligation resulting from sale of receivables	3,247		4,985		(1,738	)	-35	%
Other long-term liabilities	543		583		(40	)	-7	%
Stockholders’ equity	50,933		34,758		16,175		47	%
Total liabilities and stockholders’ equity	$	98,705	$	84,467	14,238		17	%

(1) Derived from the December 31, 2003 audited consolidated balance sheet.

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