OMCL - Earnings call transcript Q1 2019

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Operator

Good afternoon. My name is Rob and I will be your conference operator today. At this time I would like to welcome everyone to the Omnicell First Quarter Earnings Announcement. All lines have been placed on mute to prevent any background noise. After the speakers remarks there will be a question-and-answer session. you. Thank Instructions] [Operator Mr. Financial Chief Officer. Kuipers, Peter

your You may begin conference.

Peter Kuipers

to you. quarter first afternoon welcome Good and the XXXX Omnicell Thank earnings call.

Joining will subject Lipps, CEO. other expressed me Omnicell Founder, from differ cause or could Chairman, Randall today actual those President, factors results that This include risks, to call statements forward-looking uncertainties and implied. materially is to and

on April our forward-looking made forward-looking other For of aware Form not time on XXXX, all Omnicell refer to only. please The may cause as these call reliance forward-looking statements more the made statements, the any beliefs undue the or with on detailed description change. date this of filed place Omnicell reports made Future beliefs Please should and in statements information XX-K of of with XXXX, press in events the SEC the XX, Annual simply XX, to be based today, risks this SEC. you of on the and call Report today. more is that impact are February filed release date this the that these on conference recent in passage

remarks, XXXX call quarter or will of Randall first remainder of and Omnicell, property guidance the taping, other I year. cover provide an written the any first will the our our for of business. duplication conference of Randall's Omnicell our for this rebroadcast Finally, After expressed is the prohibited. results without Inc., consent and is the on update

website is Relations announcements today in are financial was which released section at posted results the and quarter in first earnings omnicell.com. Investor included of our Our earlier our

posted will same in remarks section. also this Our be prepared

the now call to Let over turn Randall. me

Randall Lipps

the execution with autonomous towards am our business pharmacy. the continue I of delivering transition to extremely the everyone. afternoon, strategy our on of as Good vision we our and performance pleased

share XXX points of financial and margin from the QX from XXXX. $X.XX, quarter XXXX. per XXXX accomplishments XX%, QX include XX% up up non-GAAP during QX basis of up Non-GAAP from $XXX of million, earnings XXX% the key operating Some revenue of

the last workflows, automation we As set streamline outcomes. previously Autonomous to areas: the driven pharmacy robotic services data three vision operations across patient of understand improve designed The an regulatory designed to is and pharmacy as XRX Pharmacy usage intelligence key as by our by digitize which Autonomous platform improves virtually our that at This the to through errors. patient Omnicell ensure Pharmacy right and with the core to insights year, a reduces and safety that medication workflows vision medication lastly, by decreases solutions products dispensing announced to medication labor support cloud of time. automated patients' serve expert better dispensing compliance, X chain comprehensive waste solutions such provides provide Pharmacy improved receives costs, efficiency, late system, medication is actionable integrates Central powered supply medication system dispensing extension each and enhancing and of the helping right management,

ongoing medication compared XX% provides adherence. only been organizing has reduce with by prescriptions, Engagement by And promotes view to technology and medication by and outsourcing holistic cost the to not but platform patients, Patient drives Omnicell preparing IV a Our of shown engagement pharmacy identifying, alternatives. compounding finally, that revenue documenting the patient

which to see platform. Pharmacy products strong During the orders Omnicell the in multiple of quarter first include booked, momentum from XXXX, new continued we Autonomous

and are our for we quarter, with utilization first years expand to come. organizations solutions of the the healthcare implement agreements to expected sole-source During several signed that

new In addition, in we QX with gained further wins customer momentum XXXX.

usage from Central a processes and the sterile to package Omnicell's Inova into medication will compounding helps automation dispensing their automated accountability healthcare systems, Northern workflow solution automation selected visibility time to is Omnicell's technician provides trained X comprehensive include systems of partnership Knoxville dispensing current be Series and Manager as and medication Center University hospitals expanding Series data Pharmacy Insourcing is better medication an usage. to robotic and or patient Tennessee addition from well And help staff wholesaler the million XT floors. footprint track more Virginia's The This our that Carolina, has Omnicell's Medical financial addition operational lastly, a and leading North one the Solution, is supply patient implement in advanced medication medication expertly patient upgrading Performance individuals Inova Health systems streamlined IVX industry-leading that medication floors, improve care their The On unique to sterile also healthcare CaroMont dispensing patient to the combines path which improve to customer help technology, XT of automated performance improve comprehensive of on streamline their XT pharmacy the medication help nonprofit includes to their as inventory integrating Center than program and with Pharmacy in provider, to platform a to received inventory of Workflow of dispensed Central annually, using nursing a Omnicell, Series. automated Health, and efficiency, examples efficiency. Tennessee Omnicell's for IV insource a view enhance medication leveraging support providers Some a leading Pharmacy the Care, of to safety. Manager turnkey regional time will extended Robotic dispensing with its notable the Autonomous compounding. has University management serving system.

it by of availability on help ensuring floors patient medications. So nursing can care improve

healthcare our organizations the with At turn more for Peter these everyone. let point, and to me We to as this partner back to thrilled first we many over financials. are call quarter improve discuss

Peter Kuipers

Thank you, Randall.

of maintenance XRX installed during product a new as customers; a Series such launched over from contributions revenue XXXX. $XXX to: increases base in equipment; we service and annual in ramping XX% XXXX. from quarter are of that first due in GAAP XXXX quarter IVX revenue Workflow, implementations and the increase base was growing and million first of sales, increase larger was from The of products Our since up largely revenue an the XT

quarter in up per profits first quarter of share earnings to The the in XXXX. share, higher revenue, The per first share is from was quarter GAAP offset $X.XX $X.XX expense XXXX. the earnings from largely share first tax to increase of accordance per partially income in per due compared is which by higher with

associated GAAP as believe of we reform investors and and are results to for results our non-GAAP that expenses, our which contingent restructuring is benefits in related addition A results, tax reported We events our on expenses acquisition onetime a reconciliation acquisitions, the a included financial result as non-GAAP expense, statements assets it issuance is restructuring website. and in earnings stock In expenses. and understand posted release amortization to is income quarter of compensation full in gains we statements; our non-GAAP debt report of on useful excludes addition intangible GAAP compensation related to amortization onetime financial and GAAP with component stock onetime costs acquisition-related noncash acquisition well of tax of press and restructuring and amortization first to use expenses, because cost. basis, our financial

$XXX quarter of XXXX, quarter an XXXX. first first is was which the non-GAAP the XX% revenue over For million, increase

approximately XXX% take last I'd $X.XX First was non-GAAP that non-GAAP per from to operational range up the by our by factors like factors. quarter EPS of several to XXXX several first moment the quarter guidance. $X.XX per the same $X.XX of quarter nonoperational year. affected driven majority and exceeded quarter in share, of XXXX compared to our midpoint increase Non-GAAP a EPS guidance our the share. XXXX The first EPS explain was

million. incremental revenue the by contributed share profit contribution approximately midpoint the guidance quarter. $X.XX of $X First, benefit revenue approximately The additional from our our exceeded in per range of this

than was expected experienced goods quarter, $X.XX lower drove and expectations. quarter. Second, in quarter, benefit the of The operating combined our share during cost revenue, which a margin operating XX% per which with lower manufacturing expenses, approximately operating lower of lower the the above sold for first resulted and during we non-GAAP of higher expenses

Lastly, stock recorded of realized tax of below to nonoperational, or exercise benefits operating we employee the benefit share a related $X.XX options. per margin from

other of increased in have we The the to deduction options a as were of expense, fourth between And million as expected. company $X.X impact take for expense relates remeasurement. tax quarter cash the at rate we entitled and longer is in to to our interest Previously, also result, as Beginning in lower exercised result, a than of quarter stock perspective, -- a tax Non-GAAP XXXX to X deleverage was our higher for of the And excess first rate the the business to significantly. exercised employee During impact currency use and and income expenses in we expense the the XXXX. business $XXX,XXX we of quarter than segments. a price compared price primarily foreign expected. difference segments. fair we the effective XXXX, grant. stock was our decrease the reported From of XXXX, lower the a our first no of tax value report continued

due report Beginning segments we which automation automation systems; health primarily secondly, as packaging retail our to consisted following solutions equipment organizations. to one services and which and provided were payer of institutional, adherence, analytics, the previous segment and to provided automation business hospitals XXXX, Our primarily medication and now and factors. in

business as changes First, Pharmacy, the have serve with the of made customers. we evolve to organizational to better continues our vision Autonomous our

we the role, With to support helping the realignment, goals today, over more announced our a performance clinical of long structured improved our and now drive realignment goals including strategic previously offering while play sales to term. organizations, customers financial and to consultative field achieve companywide are

we platform-oriented product sell often XXXX, our offerings throughout model, sales Secondly, to multiple customers. a whereby began we

many that purchase platform. customers of products our found have We from multiple our

increasingly more our has bifurcate to it difficult Our platform strategy made business.

consolidation base has also become segments. multiple more manage to continued Third, our in has to difficult business as it occur, our within customer

Pharmacy Lastly, of the our customers serve collectively. model the decision-making are focused to operating for and direction Autonomous vision one on strategic all strategic

Let's the flow. now and move cash to balance sheet

flow $XX million. from quarter First XXXX cash was operations

by flow as quarter items in and was primarily depreciation driven cash for income net and operating amortization. such noncash-related the Our adjusted first

million, remainder cash meet $XXX sequential the continue approximately sales at quarter million will the was outstanding were approximately quarter offering business deliver first of at-the-market customer During increase additional flow. X raw balance were March The of flows. materials first XX and from to mostly the XXXX. needed the the We our continue the to increase up an through is strong Inventories flow million XXXX; demand $XX driven first grow. generated was is primarily of believe XXXX, increase for days, XXXX, collections. from by our to cash quarter receivable approximately cash free decrease of XXXX, -- million. down we company increase free from $X of XX, as XX, a cash days to by Accounts days million, $XX The in March our cash due operating At proceeds driven sequentially. $XX

During selling to repay price the average at-the-market quarter, $XX XXX,XXX debt. outstanding utilized during These stock common raised of shares gross The quarter $XX.XX of our million. our proceeds an total was were first proceeds to we sell the share. approximately primarily at offering approximately per used

quarter, the repaid we debt. first $XX million of During

loan As had our XX, of total of measured months And funded loan outstanding over funded XXXX, EBITDA, XX the balance was X.Xx. approximately March last bank as of debt. million $XXX we outstanding leverage,

realignment relates XX, new headcount to our the decrease March hired at of other earlier, XXXX, from partially mentioned X Our down offset force by into employees The areas business. X,XXX of end our sales was XXXX.

call. to is guidance; provided on previously product the all moving unchanged from quarter bookings our guidance earnings revenue year fourth XXXX guidance XXXX our Now full and

between product million million. be We bookings $XXX and expect XXXX to $XXX

$XXX We $XXX total be million. to expect revenue XXXX between million and

revenue We expect million. product $XXX between and million to XXXX $XXX be

million. service We between $XXX expect million to revenue XXXX and $XXX be

We EPS. are increasing our total XXXX non-GAAP

XX%, non-GAAP XXXX XXXX our per -- for $X.XX our operating X-X, share. between EPS now expect full EPS $X.XX to and $X.XX We with year margin expect $X.XX year was share. EPS We framework. total non-GAAP consistent year to total guidance previous between the financial approach non-GAAP long-term now guidance and Our per be

the guidance. move quarter second to now Let's

to revenue total expect $XXX million. $XXX million We be between and

be We million. expect and product million between revenue $XXX to $XXX

million. share. $XX be We expect expect million EPS non-GAAP $X.XX $X.XX lastly, and to service to revenue per we and be between $XX between And

an guidance tax are EPS non-GAAP Finally, for rate X% average we assuming in of effective our range. now XXXX,

we As very pleased continuing for first rest XXXX, with quarter look results results year. and and the strong to of throughout Randall are we the the profitable mentioned, the to forward of deliver

Now we questions. open the for would like call your to

First question, please.

Operator

Hewitt Matt first Capital Instructions] Group. of line question from [Operator the And from your comes Craig-Hallum

Matt Hewitt

of start strong year. Congratulations afternoon. Good the the to

First, really I hundred QX wanted the recovers it the point several decline gross usually then you to QX, didn't grows That and to over there's look dive basis occur. in margin. Historically, and from if the of a on year. course back,

ahead service remainder In contributed of do -- gross Was over the see your you fact, to margin that? what maybe And of the out was that year? actually how QX. playing

Peter Kuipers

actually here on basis. Yes. think, just XX.X% it's from we Well, tiny of -- much not decline. points bit, down see and going right, the non-GAAP I I flat basis a relatively about But XX to a you're XX.X% year a

continues. somewhat the the did did a also I strong in I did product that in quarter, mention quarter on in we mention margin to couple such we we're think in publicly would before. mix. believe can we the gross strengths favorable We increase that -- also backlog point third first we our earnings of say that sequential that, call, see

platform So the in and and -- that Randy those by and is gross received ROI and margin also earlier. mentioned And customers. well the strength, overall, clearly our agreements as shows that our anchored benefit are by sole-source seen, pricing products again

Matt Hewitt

haven't historically, breaking out? how growing where shift if out thinking but platform, is Performance And broken your mix? far Obviously, And a about percentage does that -- of a with that that be as as we the today, autonomous mind software sit then as Center, the you don't toward percentage? you should

Peter Kuipers

plus then very the look IT-enabled each also data the software of So intelligence automation layer strategic there if framework, and in at secondly, right, about, the Randy you are to the course those are then the services, of cloud is also to advise goals as Performance strategically Performance layer Center, that talked their over that coaches layers components obtain platform, our and would Autonomous their that really that goals. Pharmacy. systems you achieve those increasing I if it would includes about but software, say I time. out, is talk point pure to health Center to software-based, important

on to going out necessarily not the business in execute transform We're increasing. Autonomous and short Pharmacy. the we the it's So as term break really that evolve to

Matt Hewitt

conversion. could you're Maybe Okay. metrics versus and back queue. what from I'll providing far anecdotally seeing you're one there? greenfield from the I and about then competitive or last But as converting competitive as the in you're hop know maybe not you one speak me, not historical landscape the whether if

Randall Lipps

us last understand up forward. to If particular it's because the that that understand while And products a continuing to new about get as And the out of that, than long-term that's our do the can relationship of by a We more us takes that, to that's wins and get our strategic we there. sale for to the own winning product we're Autonomous the the and them a was transform sets place. driver win going getting still breath are for moving a continue customer one-off where them just And business want really somewhere, we growth. the important Pharmacy. in account a competitive key of to customers particularly go in XX help how years their to landscape, competitive helping

Operator

Naidu question next the Your from Oppenheimer. line Mohan comes from of

Mohan Naidu

give First for many on XRX, year? the far of can the has any been the implemented us on and what you color you look the so how feedback and pipeline does rest how

Randall Lipps

Yes.

implement to individual with has The really points well that really the going it's think is our customers, other ability distribution the excites well received. been and patients people. both for piece with initial I system perfection

traction the where central And lot to Pharmacy to take is going that, so to story able is of a we the and it from get people. of be Autonomous so

ahead uptake implementations little any -- we just -- product some always bit with. the behind behind some longer bit preparatory specifics pleased excitement that we're the just little those redesign the would in that usually and pharmacy I The and that we're it's sense maybe on enthusiasm to least done. it. say think product we do that without on get just really in a in feel the at I So to a a work installs are of have But

Mohan Naidu

you was exciting. live dose year go the going interesting. that that it, -- feedback this Any are tracking, How very customers -- very to when on Single far? so product product? that launched this That's has live

Randall Lipps

The IVX Workflow?

Mohan Naidu

dose ASHP. you platform about the I a had single guys that talked The tracking, you at think

Peter Kuipers

You Patient mean the Engagement platform?

Mohan Naidu

Yes.

Peter Kuipers

software side, On yes. the

right? combines So consists not XX same So log platform with different well. it's different well, That's retail that achieved It data in that's one to tracking to on multiple of screens. XX essentially the activities platform, to and for those to have products software going set. pharmacies

party single and And yes, it's do that's We customers. to day. higher-risk that Omnicell third ecosystem And the ecosystem, adherence implementation in have of that make ecosystem the patients of every course, in will works there's new enroll plugged that, well. software so want an programs. how course, as are retail med it and going health our of really to find insurance their patients and enrolling parties at proprietary yes, And pharmacy then they helps sure in

Randall Lipps

the and is very a No, I'd enrollments revenues. -- think gone proportion X say I in it are and it's their as But the of ahead plan largest customers about they're our not program. that enthusiastic well big of relatively are

And that product to a upon. a base future feel there's great so really we as build with like

Mohan Naidu

given $XX guess some million out you -- enough in to bookings the baked from buffering last One stretched this really growth get one of bookings I there guidance. QX, you you current to some, year? level, are me that have from the took you guidance? but the pull-forward, had bookings for on What's in confidence XXXX? Or honestly,

Peter Kuipers

Yes.

And really fourth Pipeline sales minimum with uptake disruption. very execution from tracking strategic to perspective. they're course, through I We see had bookings platform well in good the realignment quarter. we team of health quarter. we feel partnership then, Really, a healthy. say the first the So with And is about product our we system. definitely guidance. did would the commercial our really a top happy of almost commercial no and the the

we're So yes, confident.

Operator

of next [ph] from comes Piper line from the Nina Your Jaffrey. question

Your line open. is

Unidentified Analyst

products footprint your or already pharmacy this in What your space? what's retail has portion engagement cross-sell product of this for the patient this other again, across base opportunity software And place? into

Peter Kuipers

sort there there. So is questions three of

one-by-one. Let's go them through kind of

consolidated is engagement XX,XXX-plus. majority the growing both the necessarily as yet, automation we more crossovers, of traction pharmacies products out Cross-selling many of solutions. are at are as well So health more employees' see well health their not systems systems health That health But platform? break number quite platform don't the significant. our are where and pharma there as services, patient software more risk it both of those implementing specialty network, engagement and CSCs, see in out it's We health how but it's so or number But more on top yes, opportunities we for service where becoming we and centers. see day-by-day. -- increasing, the patient in systems own costs, within is

opportunity the the of the That's saw there's also reasons also That's cross-selling in one definitely that opportunity. the that of quarter. So fourth We reasons there. commercial sales and actually. one we did realignment

definitely to we we've lot more yes, So definitely grow more see traction, but there. a it, got

-- course it's of So growing, OK?

Unidentified Analyst

win, systems University over? and your their previous you housewide Is regarding to they're XT. upgrading Tennessee Or upgrade? switch they're them mentioned all going a of take of to that that And

Peter Kuipers

booking. only thing But want specifics. don't That's I to... customer also a the necessarily Well, want to I It's significant a platform it's disclose booking.

Randall Lipps

will, customers. think a with eventually significant going that's seasonally most they portion I to what happens they're start and with and

Operator

Bill from And the question your Sutherland from of Benchmark line Company. comes next

Bill Sutherland

quarter? in Good was like international afternoon What guys. the

Peter Kuipers

Yes.

exceed for was So line $X by for midpoint exceeds the of revenue of driven the portion, guidance, million the was top -- international. of $X million-plus that a on

as some we So uptake international quarter. in well see the definitely as good

Bill Sutherland

situation? It of It looks a trend? a like wasn't one that's just quarter kind

Peter Kuipers

line I think company. with we in as in international, look it, at general, growing is roughly total

Bill Sutherland

cycle? for sense, continues, for the you rollout are a growth the the I as feel of as sense then, it. you you replacement just Peter, very know firm getting getting And beyond But potential replacement i.e., a -- the you a XT have aspect of are

Peter Kuipers

Yes.

XT course, only not Of replacements. is

wins years will, for the right, Yes. -- also Of we will course, where percentage that anticipate have see corporates, But of also to there's if at footprint competitive of customer you time. we to sites, increasing awards come. ADC expansions we over many of

Bill Sutherland

at you So a and I it's was I feels influence up can -- the... kind product it's mean, that's of like where what it's it a getting inside time expand was your

Randall Lipps

is replacing place Yes. It's just than to strategic a which tactical start much the conversation, the next with of ADC. more

it's very well-timed. It's helpful. So

Operator

this Mr. remarks. There Randall turn to I over call the are will time. Lipps no questions further at for back closing

Randall Lipps

And are and for and continuums, good I very in platform we've deliver always and winning to it's our a thank the to important. of patients made help And clear everyone. believing our think on. years, for off much. seems the marketplace is to and scale and our of it's at us that shareholders improvements Thanks -- like Pharmacy two and driving all company time. adjustments realignments next our Well, we're nicely. start employees our strategy Autonomous spot for our is partners improved in That's and and over in that healthcare that's providers the last really and the lot to healthcare with continue I year start, solutions and over to and it's sorts winning And a good the good continuing it a

Operator

Thank conference you. today's This concludes call.

disconnect. now may You

Omnicell (OMCL) 26 Apr 192019 Q1 Earnings call transcript