Exhibit 99.1
Contact: | | |
Rob Seim | | Omnicell, Inc. |
Vice President of | | 1201 Charleston Road |
Finance and CFO | | Mountain View, CA 94043 |
800-850-6664, ext. 6478 | | |
robs@omnicell.com | | |
For Immediate Release
Omnicell Announces Second Quarter 2006 Financial Results
MOUNTAIN VIEW, Calif. – July 20, 2006 — Omnicell, Inc. (NASDAQ: OMCL), a leading provider of patient safety solutions technology, today announced second quarter 2006 results.
GAAP results: For the second quarter of 2006, GAAP net income was $1.8 million, resulting in fully diluted GAAP earnings per share of $0.06. This compares to adjusted GAAP net income of $0.8 million or $.03 per adjusted fully diluted share in Q1 2006 and $0.1 million or nil per share in the year-ago quarter. For the first half of 2006, GAAP net income on an adjusted basis was $2.6 million, or $.09 per adjusted fully diluted share. This compares to GAAP net loss of $5.7 million or a loss of $0.22 per basic share for the first half of 2005.
Non-GAAP results: Excluding the impact on our results of recording $1.9 million in share-based compensation expenses related to SFAS No. 123(R), non-GAAP net income was $3.7 million for the three months ended June 30, 2006, or $0.13 per fully diluted share on a non-GAAP basis. This compares to second quarter 2005 non-GAAP net income of $0.1 million or non-GAAP fully diluted earnings per share of nil. Excluding the results of recording of year-to-date adjusted share-based compensation expenses of $4.1 million, non-GAAP adjusted net income was $6.7 million for the first half of 2006, or non-GAAP adjusted fully diluted earnings per share $0.24. Excluding the impact of results of recording $1.1 million in inventory obsolescence, $1.5 million in reduction in force expenses, and $0.6 million in suspended acquisition costs, non-GAAP net loss was $2.5 million for the six months ended June 30, 2005, or a loss of $0.10 per basic share on a non-GAAP basis. Non-GAAP results, as presented in the attached consolidated statements, exclude certain GAAP expenses for the applicable periods.
Revenue for the second quarter of 2006 totaled $36.0 million, up $2.1 million or 6.1% from Q1 2006 revenue of $33.9 million, and up $7.4 million or 25.8% from the second quarter of 2005.
Product backlog grew to $86.9 million, up $9.6 million or 12.5% from the end of Q1 2006.
Omnicell Chairman, President and CEO Randall A. Lipps commented, “I am very pleased with the success of our products in the marketplace. Our focus on customer satisfaction, superior service, and innovative solutions is winning in head-to-head competition for hospital automation business. The success of our products; coupled with operational efficiencies, continue to generate positive financial results.”
A software error experienced by our outside stock plan administrator caused several stock option grants to be omitted from stock compensation expense calculations for the first quarter of 2006. Consequently, net income for the quarter ended March 31, 2006 will be reduced from $1.2 million, or $0.04 fully diluted earnings per share, to $0.8 million, or $0.03 fully diluted earnings per share. As a result of these corrections, Omnicell intends to file an amended quarterly report on Form 10-Q/A with revised first quarter 2006 financial results to correct under-reporting of share-based compensation. Investors should look to the revised financial statements when they become available and discontinue use of Omnicell, Inc.’s previously issued financial statements for the period ended March 31, 2006.
Financial Results Conference Call Details
Management will discuss financial results for the second quarter of 2006 on Thursday, July 20, 2006 at 1:30 p.m. PT via conference call. Investors and analysts may listen to this conference call by logging on to www.omnicell.com or by dialing 800-240-7305 (domestic) or 303-262-2137 (international) approximately 10 minutes prior to the scheduled start. A replay of the call will be available from 3:30 p.m. PT on July 20, 2006 through 11:59 p.m. PT on July 27, 2006. Dialing 800-405-2236 (domestic) or 303-590-3000 (international) and entering the passcode 11057927# 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
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 with more than 1,600 healthcare facilities to enhance patient safety and allow clinicians to spend more time with their patients.
Omnicell’s medication-use product line includes 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.
Our supply product lines provide a healthcare institution with fast, effective control of costs, capture of charges for payor 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 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 achieve profitability in the next few quarters, 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.
Omnicell, Inc.
Condensed Consolidated Statement of Operations
(in thousands, except for per share data, unaudited)
| | Three Months Ended | | Six Months Ended
June 30, | |
| | June 30, 2006 | | March 31, 2006 (1) | | June 30, 2005 | | 2006 (1) | | 2005 | |
Revenues: | | | | | | | | | | | |
Product | | $ | 28,207 | | $ | 26,248 | | $ | 21,752 | | $ | 54,455 | | $ | 44,494 | |
Services and other revenues | | 7,765 | | 7,665 | | 6,846 | | 15,430 | | 12,855 | |
Total revenue | | 35,972 | | 33,913 | | 28,598 | | 69,885 | | 57,349 | |
| | | | | | | | | | | |
Cost of revenues: | | | | | | | | | | | |
Cost of product revenues | | 13,055 | | 12,131 | | 10,052 | | 25,186 | | 21,585 | |
Cost of services and other revenues | | 3,100 | | 3,296 | | 2,286 | | 6,396 | | 5,123 | |
Total cost of revenues | | 16,155 | | 15,427 | | 12,338 | | 31,582 | | 26,708 | |
| | | | | | | | | | | |
Gross profits | | 19,817 | | 18,486 | | 16,260 | | 38,303 | | 30,641 | |
Operating expenses: | | | | | | | | | | | |
Research and development | | 2,310 | | 2,637 | | 2,732 | | 4,947 | | 5,441 | |
Selling, general, and administrative | | 15,963 | | 15,358 | | 13,563 | | 31,321 | | 30,705 | |
Restructuring, facility, severance charges and disposition of assets | | 0 | | 0 | | 0 | | 0 | | 406 | |
Total operating expenses | | 18,273 | | 17,995 | | 16,295 | | 36,268 | | 36,552 | |
Income (loss) from operations | | 1,544 | | 491 | | (35 | ) | 2,035 | | (5,911 | ) |
Other income and expense | | 351 | | 343 | | 118 | | 694 | | 219 | |
| | 1,895 | | 834 | | 83 | | 2,729 | | (5,692 | ) |
Income (loss) before provision for income taxes | | | | | | | | | | | |
Provision for income taxes | | 78 | | 60 | | 17 | | 138 | | 34 | |
Net income (loss) | | $ | 1,817 | | $ | 774 | | $ | 66 | | $ | 2,591 | | $ | (5,726 | ) |
| | | | | | | | | | | |
Net income (loss) per share: | | | | | | | | | | | |
Basic | | $ | 0.07 | | $ | 0.03 | | $ | 0.00 | | $ | 0.10 | | $ | (0.22 | ) |
Diluted | | $ | 0.06 | | $ | 0.03 | | $ | 0.00 | | $ | 0.09 | | $ | (0.22 | ) |
| | | | | | | | | | | |
Shares used in computing net income per share: | | | | | | | | | | | |
Basic | | 27,149 | | 26,442 | | 25,784 | | 26,795 | | 25,637 | |
Diluted | | 28,903 | | 28,105 | | 24,743 | | 28,489 | | 25,637 | |
(1) Amended
Omnicell, Inc.
Condensed Consolidated Balance Sheet
(In thousands)
| | June 30, | | March 31, | | December 31, | |
| | 2006 | | 2006 (2) | | 2005 (1) | |
| | (unaudited) | | (unaudited) | | | |
| | | | | | | |
Current Assets: | | | | | | | |
Cash and cash equivalents | | $ | 43,767 | | $ | 33,853 | | $ | 29,536 | |
| | | | | | | |
Accounts receivable, net | | 29,987 | | 28,980 | | 29,456 | |
Inventories | | 14,468 | | 12,165 | | 13,763 | |
Receivables subject to a sales agreement | | 1,843 | | 2,175 | | 2,551 | |
Prepaid expenses and other current assets | | 13,092 | | 10,634 | | 10,286 | |
Total current assets | | 103,157 | | 87,807 | | 85,592 | |
Property and equipment, net | | 4,394 | | 4,504 | | 4,727 | |
Long-term receivables subject to a sales agreement | | 832 | | 1,507 | | 1,292 | |
Other assets | | 14,367 | | 12,982 | | 8,817 | |
Total Assets | | $ | 122,750 | | $ | 106,800 | | $ | 100,428 | |
| | | | | | | |
Current Liabilities: | | | | | | | |
Accounts payable | | $ | 5,451 | | $ | 3,674 | | $ | 4,059 | |
Accrued liabilities | | 14,303 | | 11,400 | | 12,664 | |
Deferred service revenue | | 7,360 | | 6,951 | | 6,526 | |
Deferred gross profit | | 11,271 | | 10,764 | | 7,981 | |
Obligation resulting from sale of receivables | | 1,843 | | 2,175 | | 2,551 | |
Total current liabilities | | 40,228 | | 34,964 | | 33,781 | |
Long-term obligation resulting from sale of receivables | | 832 | | 1,507 | | 1,292 | |
Long-term deferred service revenue | | 10,563 | | 9,797 | | 9,867 | |
Other long-term liabilities | | 125 | | 125 | | 250 | |
Total Liabilities | | 51,748 | | 46,393 | | 45,190 | |
| | | | | | | |
Stockholders’ equity | | 71,002 | | 60,407 | | 55,238 | |
Total Liabilities and Stockholders’ Equity | | $ | 122,750 | | $ | 106,800 | | $ | 100,428 | |
(1) Information derived from the audited Consolidated Financial Statements.
(2) Amended
Omnicell, Inc.
Reconciliation of GAAP to Non-GAAP (Pro Forma)
(in thousands, except for per share data, unaudited)
| | Three months ended | |
| | June 30, 2006 | | June 30, 2005 | |
| | Revenue | | Net Income | | Earnings
per
share-
diluted | | Revenue | | Net Income | | Earnings
per
share-
diluted | |
GAAP | | $ | 35,972 | | $ | 1,817 | | $ | 0.06 | | $ | 28,598 | | $ | 66 | | $ | 0.00 | |
Non-GAAP Adjustments: | | | | | | | | | | | | | |
SFAS No. 123(R) adjustment (a) | | | | | | | | | | | | | |
| | | | | | | | | | | | | |
Gross Margin | | | | 168 | | | | | | — | | | |
| | | | | | | | | | | | | |
Operating Expenses | | | | 1,764 | | | | | | — | | | |
| | — | | 1,932 | | $ | 0.07 | | — | | — | | $ | 0.00 | |
Non-GAAP | | $ | 35,972 | | $ | 3,749 | | $ | 0.13 | | $ | 28,598 | | $ | 66 | | $ | 0.00 | |
| | Six months ended | |
| | June 30, 2006 | | June 30, 2005 | |
| | Revenue | | Net Income | | Earnings
per
share-
diluted | | Revenue | | Net Loss | | Loss per
share-
diluted | |
GAAP | | $ | 69,885 | | $ | 2,591 | | $ | 0.09 | | $ | 57,349 | | $ | (5,726 | ) | $ | (0.22 | ) |
Non-GAAP Adjustments: | | | | | | | | | | | | | |
SFAS No. 123(R) adjustment (a) | | | | | | | | | | | | | |
Gross Margin | | | | $ | 407 | | | | | | | | | |
Operating Expenses | | | | $ | 3,709 | | | | | | | | | |
Inventory obsolecence due to product discontinuation (b) | | | | | | | | | | | | | |
Gross Margin | | | | | | | | | | 1,100 | | | |
Operating Expenses | | | | | | | | | | | | | |
Restructuring expenses (c) | | | | | | | | | | | | | |
Gross Margin | | | | | | | | | | | | | |
Operating Expenses | | | | | | | | | | 1,500 | | | |
Write off for suspended acquisitions (d) | | | | | | | | | | | | | |
Gross Margin | | | | | | | | | | | | | |
Operating Expenses | | | | | | | | | | 600 | | | |
| | $ | 0 | | $ | 4,116 | | $ | 0.14 | | $ | 0 | | $ | 3,200 | | $ | 0.12 | |
Non-GAAP | | $ | 69,885 | | $ | 6,707 | | $ | 0.24 | | $ | 57,349 | | $ | (2,526 | ) | $ | (0.10 | ) |
These Non-GAAP adjustments reconcile the Company’s GAAP results of operations to its non-GAAP results of operations.
The Company believes the presentation of results excluding such items as non-cash share based compensation, restructuring costs, inventory obsolescence, and write off of costs for suspended acquisitions provides meaningful supplemental information to both management and investors that is representative of the Company’s core operating results and allows comparison of operating results. The Company uses these non-GAAP measures when evaluating its financial performance. These non-GAAP results of operations should not be viewed as a substitute for the Company’s GAAP results.
(a) This adjustment reflects the accounting impact of non-cash compensation expense related to the impact of adoption of SFAS No. 123-R for the three months and six months ending June 30, 2006.
(b) This adjustment reflects a write off of $1.1 million in inventory obsolescence due to discontinuation of a product
(c) This adjustment reflects a write off of $1.5 million associated with a reduction in force
(d) This adjustment reflects a write off of $0.6 million in expenses associated with suspended acquisitions
