OMCL - Earnings call transcript Q1 2020

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Operator

Ladies and gentlemen, thank you for standing by. And welcome to the Omnicell First Quarter Earnings Announcement. At this time all participants are in a listen-only mode. After the speakers presentation there will be a question-and-answer session. [Operator Instructions] Please be advised that today's call is being recorded. Instructions] [Operator

like Kuipers, conference you. Chief ahead, now speaker to Please hand sir. Peter today, Financial to would over the your go I Officer. Thank

Peter Kuipers

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

me President CEO. Chairman, Omnicell and is Lipps, Joining today Founder, Randall

factors materially will statements from or other those call cause actual risks, uncertainties subject expressed This could to results include and forward-looking that to differ implied.

information please in of the press risks impact refer more to the a the statements, the with the in on detailed description today, XX, SEC For report on more other SEC. filed Form our recent in filed these release with that annual February forward-looking Omnicell and reports XXXX, XX-K

any call of made simply cause only. this to to on Omnicell made Please date date of May undertake forward-looking is on The no forward-looking be Future all the that reliance statements update may this should time aware this today. forward-looking of conference you XXXX, not obligation X, these or as and statements. place are events these and statements passage we call on of beliefs change based beliefs undue the

call or of and Omnicell, property the taping, auto written any duplication Finally, of Omnicell conference rebroadcast this expressed is the prohibited. without Inc. consent is

an of and our XXXX provide After Randall's XXXX. results quarter first remarks, our will update Randall business. our guidance on the I will for cover for

which our in announcement, omnicell.com. our in Our site the of included section was earlier XXXX Relations Web today first results quarter is Investor earnings released and posted are at

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

non-GAAP will GAAP Reconciliations discuss that most you remind measures. this are measures some these in financial included earnings measures to financial non-GAAP to our announcement. the to we call, comparable of like we'd Additionally, during

Let me call now Randall. over the to turn

Randall Lipps

joining for today. afternoon us you thank and Good

the line begin to expressing health the by the front COVID-XX of like professionals to extreme today our gratitude on pandemic. I'd

Omnicell team, on heroic your for we your this courage, entire of nothing thank and short your behalf to the is crisis of bravery you response and Your resilience.

and most critical. provider's Our been mission the partner is mission to never has care trusted that be more

navigate to our partners this we long-term our As time, focused we believe stay is strategy, on challenging unchanged. which continue

committed are believe our pharmacy-care pharmacy in delivering the dramatically the model COVID-XX and improve hoping made services solutions by transform intelligence automation, that vision aware the to significant autonomous executing of more designed challenges has We healthcare delivery forward. costs our lower the of could outcomes on We partners. to going the make industry more to for pharmacy relevant and

dispense solutions help in important we case are a that a believe systems point, infrastructure during point-of-care pandemic. our As to medication safely

to can during Our analytics our inventory support patient tools customers efficiently for and intelligence volume solutions surges. manage decision key be more

Solutions clinicians at designed the top and clinical to their Our environments. operate Central on license focus are Pharmacy of help to and the burden administrative Automation pharmacy care allow on reduce patient the fast-changing in

safety like guidelines and we the outline state disease departments operate. communities. and and our operate of COVID-XX manner, in I'd our suppliers of control of each ensure local briefly the health where to and a health regions the employees, In customers, centers are we in safe the U.S. well-being to actions and we Now taken discuss and to have order safety response to the following for public

our facilities of these other All distribution guidelines. manufacturing, under operating are and

surface open, This equipment. our personal and of a scheduling and the manufacture implemented have workforce. our use with facilities, of our essential safety we an limited In continue manufacturing of the protocols to disruption. extensive products are facilities shifts we to cleaning includes business, social protective of staggered As to our enhance remained have distancing, variety ensure we our

majority have to home transitioned personnel non-manufacturing a environment. facing of work In from our addition, non-customer the vast and

a implemented we Last XXXX, year, during tools. of variety technology virtual

of remote to times use processes. environment the work ways virtual the develop to And accelerating which a enables training, has engaging and a sales product like tools during result, virtual service, shift new demonstrations customers to work as with We're us We in these. implement are virtually, customers and been consultations, these now seamless. with now essentially difficult

I am Omnicell time. this grateful quickly transition our for the that so their ability to to servicing to customers we focus during and can continue team challenging safely on

the Now the to to of quickly solutions care assist our programs needs. line front support develop and mobilized we customers pandemic, critical to on

COVID-XX and has access health care providing supporting training areas; to for Our and for key rapid system ensuring chain three tools and management, infrastructure areas, new in medication continuous intelligence supply been support emergency needs. response and quick focused for service

customers to began quickly expedited response clinical and the critical and cabinets patient feedback successfully so bed lot in this rapid these for to to deploy rapidly We we've shipping XT resources. with a input system launch could partners our production fast-track our and our of capacity worked positive the installation ordering, response that medication program. health supply program. received preconfigured cabinet of surge, potential from designed As expand teams And

New track leaders Another epicenters are the industry in inventory. associations, this have York medication critical like our partners ability There is analytics and our can about to levels Medicine platform, we currently partnered and than project medication inventory and Care potential This treat more with use to safeguard Leveraging to appropriate. to offer and including used actively identified drugs need make quickly City pharmacies being as shortages COVID-XX. pandemic medication plan Critical ASHP the of deploying emergency XX with by Society pharmacy intelligence care to areas increase reports and levels rates. faster greatest on the needs, medications help efficiently and forecasted daily decisions

systems our patient predict regions and influx. and needs trends infrastructure to with preparation future this for ensure to the usage surge across to planning to data support working continuing have help we're to We're leverage health customers

social on-site We requirements. are new onboard remote needs to distancing suspecting order provide to the for and support visits provide in able service programs minimize rapidly staff training quick options to for

implementing monetary have the a donations ensure to To key to source disruption to capacity by factories and very support well This communities for able Nursing to experienced our Today, From positions at with us our local supporting organizations. date, chain partners to shortage we on perspective, key charitable match organizations experienced materials frontline. a all continue supply operate to Fund continue to our company donations monetary have to to maintain which us we full to and supply serve the are meet to operate and made customer components not support to we time. also any We're inventory are base. and levels we continued at the our enabled chain customer our has appropriate this employees in we of providing we have work made little American in demand. closely healthcare

our profit. months systems, to had to of proceeded of first revenue which our the for turning first and minimal quarter advance, March. implementations of Now most our our strong outlook, end and revenue are from the COVID-XX business quarter was in of impact results Since the the impact through often as scheduled comes very as most automation implementation the scheduled

new seen March, purchasing However, second sales, slow in began with have hospitals bookings the beginning decisions. respect to we half of to for

ability the our in perform our with order as will COVID-XX, of and likely Additionally, to equipment are access delayed. their to implementations dealing customers hospitals be staff

or are cover reduced equipment, needed to cash increasing elective cancellation and systems the prices decreased COVID-XX large for due caseload increased surgeries as flow well Health facing expenditures to and costs revenue as challenges. demand to postponed surge due other

bookings result our to of our behind are As the protocols, estimates of reduced decisions internal purchasing a customers our the social in this as distancing due slowdown and interactions time. with our

believe spending results our it is predict versus and to disrupted for to anticipate not begins this not business and elective the negatively country demand this to meaningful some we time. do direction in continue. be we a materially reopen impact Although how believe long of a medium-term resume, near prior we pattern signs near economy there provide guidance, and portion COVID-XX as disruptions to process at possible can will are will medium-term medium-term, to We gradual encouraging the the surgeries hospital XXXX

execute in is While ability our our on several the for to our tailwinds this long-term we confident favorable business for There strategy. long-term. uncertainty difficult, are remain

of a we agreements not and base, agreements sole-source time, healthy have and a backlog cancellations. many long-term under have this are we we purchase At multimillion-dollar services. any products First, any and lost our which to of strong are customer aware not

revenue to economic reoccurring compared has much recessions higher. prior of mix is the Omnicell weathered Second,

by Today, our the of approximately pandemic. XX% this of affected lastly, this and to in that our reoccurring business expect time, And is strong. materially the be is liquidity revenue don't we portion

We million to access our revolving and capital committed on no facility. balance debt on have of cash our sheet, loan $XXX

the navigate innovative for progress will current we provide continue solutions to through we the As our recovery of help customers look phased ways to situation. COVID-XX, to

first with more So turn Peter it the on I'd quarter over and like that, to results back guidance. to for

Peter Kuipers

Randall. you, Thank

strong We had a start very XXXX. to

of the a largely of to up and installed as $XXX was Our year XX% XXXX. revenue annual revenue of an first was quarter million of XXXX larger in as over last service well first increase increase Series equipments. due The from in implementations XT maintenance quarter from revenue base

automated As of have to to installed XX% March time, orders generations XT. year, At Series. had booked dispensing existing booked upgrade our approximately our orders to of XX, XXXX, base base to this installed cabinets XT approximately of last new previous XX% for of upgrade

the XXXX existing and shipping at in base of a installed mentioned systems began be prior we've that that time, would As the upgraded past, estimated period. nine-year in generation over we we XT

cycle like the end continue to upgrade the first we over nine-year quarter, near-term will believe original saw estimates. we delays expect our that take place some we towards the While of

monitor at to updates continue and later will We time. this provide a

had I As later, said and detail negative delayed has more in impact has discuss implementations. bookings as on a Randall new will and COVID-XX

their in access many many and this flow their to capacity, believe certain locations, the behavior as staffing, hospital are visibility is at the we that As result, of systems in believe areas cash term. in a in trend evaluating We capital our in time. restricted continue become will limited profitability hospital near systems, ability to medium buying equipment more and revenue, this process systems hospital has

to moving Now earnings.

accordance earnings in to $X.XX share up largely share share XXXX. GAAP of first in with per per earnings is share expense. tax The quarter due was lower-income the per The from first $X.XX in per quarter increase

income tax XXXX, quarter March ended one-time of XX, first approximately intellectual $X.X in and again cost tax EPS during negatively XXXX. property. by of not income of This the related period incurred did the expense impacted to XXXX During occur $X.XX restructuring million we

of acquisitions, of on non-GAAP and In financial debt stock benefits and results, issuance statements financial amortization unrelated expenses stock and GAAP results financial with restructuring our non-GAAP believe a our costs to is useful we excludes which that GAAP we it and amortization our defense which associated and expenses that as of investors basis, tax in of restructuring-related acquisition non-cash to because use of restructuring-related income to are amortization addition expenses, We ongoing acquisition as understand addition activities. component reported expense, report effects acquisition-related for are assets results statements well intangible the a and and compensation cost. expenses compensation to

to our release is results our Full Web included posted reconciliation is GAAP non-GAAP our in on earnings and quarter press of first site.

year. quarter XXXX, an EPS representing year, stock increase. largely tax offset share the of was $X.XX This in the to of compared benefits XXXX employee increase per First which in to $X.XX compared the revenue. is to increased was was last per quarter a the non-GAAP lower in realized The last X% share non-GAAP basis first on year-over-year excise to earnings due same partially period from quarter due options, same

cash to I believe March $XXX and it XXXX. during million, was flow uncertain would balance at quickly million we business XX, our December times. cover our of these liquidity is At as like down our cash strength from the $XXX XXXX, Now XX,

XXXX, on $XX outstanding the quarter During X-X, of we our first debt. million, repaid

access million the to facility. debt-free $XXX in revolving credit available a is now result, our As has and full business the

to products to from COVID-XX-related collections expected Net The during were the of in of by primarily by in week the activities Accounts quarter. $XX due shipped same million April receivables. of period in were cash year. receivables million in received that increase the first installed was decrease million, due $X increased net an working first provided attributable to quarter the invoicing operating delays XXXX but some were primarily well accounts during as end is quarter last of decrease as capital, the not which $XX first down during the very additional

higher sales net by XX mostly year. XXXX days from offset capital receivable first to As a attributable the the unchanged last our were quarter result, net period quarter accounts days, same quarter income to first outstanding flow cash same days, The year last was of decrease and for the in sequentially. in XX compared working of the

from the current up lower increase in generated generated cash flow in GAAP $X of in first period quarter, capital partially XXX% framework December flow operating our primarily or approximately by line offset the year, was for expenses. $XX was expenses lower flows million by cash in the cash was XXXX. last by million The the same quarter year. first which driven is Free quarter in Free net XXXX of provided with we income the long-term

and revenue is pandemic. Randall flows place healthy of we As believe balance and that the very absorbing committed $XXX capable by is have in liquidity put we access in we caused facility revolving mentioned sheet, strong cash disruptions the credit and to believe the existing We our the business of short-term million our no November our earlier, cash to debt XXXX. capital with of on to

to liquidity, in and include These show one, take certain actions order reduction to: costs not will trade marketing-related as certain reduction consulting are non-essential delays; lastly, and other four, and actions preserve started three, cost-saving expenses; to capital expenses; we of delays to our two, of limited defer travel; expenditures. continue elimination but In hiring of necessary.

will to appropriate the are as feel and continue at time. this monitor we We situation closely further take actions necessary we

to our guidance. Moving

will predict mentioned and the earlier, customers. of containment to we how and effect cannot the what COVID-XX our on COVID-XX measures will Randall pandemic and associated contain As spread the long intended continue have measures

withdrawing year our XXXX As guidance. full we're result, a

working two from determine help future last for implementations gain to us and our the But and insights possible bookings. a range new months to outcomes. plan spent product to uncertainty have customers We is how there of

believe not time. can direction do we at we this meaningful result, a provide As

monitoring financial factors Looking which hospital circumstances take stay and our and into with ramp-up facts ahead, systems. ambulatory we account care forward. will surgeries, move continue closing impact of of in we This the the to other elective the relevant customers close as contact includes and health

remind have that, we like and we to but to your more on at specific we forward open that that unable this financial would believe questions, time. for Operator? the we're will everyone We medium-term more quarter to visibility framework look time. near direction like With at call the for to to comment providing any would next

Operator

Halper [Operator of Cantor Instructions] Your from comes Fitzgerald. first Steve question

Steve Halper

five-year guidance, XXXX five-year those those totally you do you issued hold? understand So guidance in could on you that where the still December, do about but stand targets or

Peter Kuipers

stay Well, stated in well if same. drivers and assumptions are the believe continue long-term believe at overall long-term what look unchanged. the so We we evaluate the the you the believe that the the we to are is we as confident framework. We're the strategy in We we'll long-term the strategy, believe And unchanged. strategy. script

Steve Halper

one follow-up just then And question.

you you than should have happens? would just implement we terms to in In in that drive how of resources people hospital recovery, of sort think let's have if -- of to slot or have of have? because sort of quarter what like in implementations your okay, what more a sort to would do implementation normal position in you a ability slot you order next Do normally and Are about implementations you you in. light faster year, those you expand say, an resources than implemented year

Randall Lipps

you How Randy. is This doing No. are Steve. Yes.

it's and bookings. between really and time generally, booked to deal gets continue for customers is a actually But a there significant when implementation. do driven we installations the it scheduled request think is at I by when

on apex But I lot where that a a there different remember meet the there's they COVID-XX the country the time are up of are always to ramp -- curve. have of different of those places lot So to demands. to has

don't the I country different time. the places. going back is levels come at of kind be so will all at to think And same It different in

that think going is we back at So least, unevenly. to ramp, the come

opportunity I we'll need. have So to think respond to customers whatever

Operator

Capital. [Operator Instructions] Matt of Your from Craig-Hallum Hewitt question next is

Lucas Baranowski

here Matt Lucas at This is for Craig-Hallum. on

Just end the toward quarter pulling of the the kind a Like today. the continuing done there break a from I the questions implementation here revenue future the of as forward theme. news couple get to implementations was rush quarters? virus, to one essentially started guess first of about

Randall Lipps

say just it would I dependent. provider was very

add to scheduled the of the impact apex prepared of for they so wanted in midst be they the hold that stayed Others maybe curve. suddenly more wanted install Some because in something were let's to and said, the and off more backlog.

a the So end of I lot just would significant there of any wasn't on There curve. last ins but forward outs numbers. as of unduly and what in was was couple weeks that dramatic the characterize pulled not the amount

Peter Kuipers

Yes.

XQ the of revenue of business the say the is would and small really XX% impact the I relatively the reflects scaling on strength what the So on business.

Lucas Baranowski

I to some had the giving orders, access of maybe to back you delayed that Excellent. as stay-at-home those you the been do need states And guess have to of that their then get orders? is relax started because and implementations in

Randall Lipps

I'd it's more cautious. personnel happen facilities you creating what uncertainty in hospitals running their as still don't say about up. additional around want Most pretty might open

it's opening they of that's surgery, what and in in necessary I would elective come So the needing facility. to begun are though open really who say to relax up be they for outside can more even haven't, up

So in the pretty would process. say it's I early still

Operator

from Sutherland is Benchmark of Company. question next Bill Your

Bill Sutherland

get more begins course likely normal activity, to than things difference? you curious Just to think sooner as that opening booked up COVID no back or life you don't come think a or getting implementation the X.X, vice booking assuming your do of about and serious we stuff versa it's

Randall Lipps

pretty tell. it's to think hard I

are the think a who for in operating we have might home. of Director are people hospital on the that at and people most certain logistical need the of even to would at now, task the for And providers be actually implementation, of most think instance, you personnel from I site. home. cases, in these The people are doing only lot right hospitals them are Pharmacy,

or drive individuals to implementation are these still not into the of So facilities. many required project key managers going

that has place you've to central take lot changes with, take so where place kinds to got the some those And of installs to some of particularly first of pharmacy equipment a time. major for things facility and make

probably more as we ones into installing challenging move then place are a are actually last do going lot the bit. of could can be the virtually and personnel And those challenged. because less hospital the to So it cabinet

It's really hard to tell on bookings.

I on cash cash basis. of And has have elective part bank of their in the even ongoing just up an -- the think lot it flow of even coming in. now, is do right hospitals, lot patients if flow where surgery, has not to dropped not ambulatory they cash a a their their business, which end to aren't if they're sure because but significantly the with going

of cash not some become visits, up but that's big clearer ramps Now as finishing. to their projects they've unless or to flow made those by they they're commit building until are, a been already have what things virtual they're willing started

little it So it's us a for early figure still think out. I to

think information. more have And some that then of to clear. pieces become we'll think I on will next more I call, our begin fog the

Bill Sutherland

That sense. Yes. makes

seem lag activity normal I'm lead reading of And course making particularly. of they're hospitals kind implementations, Randy, a again, it like sounds money as things the to like it feels it back the in the get kind and there's doesn't bookings as and So lines. the between

Randall Lipps

really. Not

of they go kind I together. think

clear That's to want Now make have everyone for them. that it's sure. there's when on just to on. It's coming delay implementations do the sure until not just of a going none I that. we're are says people who

Peter Kuipers

about Yes. or most important through for went the two also to cities, think they just apex remember weeks I ago. it's that states COVID-XX And bigger

operating getting normal" environment. just to they're So "more back

getting So customers getting we're with just connected again. now

time, visibility. this at there's So just limited

Randall Lipps

people those We've as single intel. to we're every many implementation, and do have so have analysis it And a I and And for We forward. change, to metrics for of XX they scheduling. on significant track on we'll good a XX good that. stage going size post-apex customer their we'll trying think got individual the of metrics just intel feel their where on good to in are getting the thinking

Bill Sutherland

as structure adopt your doing may realign cetera. things there Have keep that differently are just didn't you've you've that that And had et curious of some in to had found you make this to operational workarounds, crisis sense? you that

Randall Lipps

the things virtually installations, were together and those months. are next now these We XX these had enabled things Cabinet that of And was so and on map many and of days Response of in Program. well. the and a customers the One, ordered processes some pieces to can done were the be installation now of changes road as was XT lot immediately for to doing teams shipment got the Rapid configuration, almost we that. that cases the systems shipped the many make And the order, we create and and had XX our two some those willing for

bit Now we but infuse and the of far that that's an think little think lot ahead to of extreme, really we experience we're that. a we that from a and learnings on customer the take really can improve

Bill Sutherland

normal? XX your does days compared with How

Peter Kuipers

Longer. Longer than days. XX

Randall Lipps

Longer, in And get longer. current to going mandate days, can get somebody facility in to to from beds when not with governor get a want your you you XX you expand the sure everybody XX some I'm to state there. much work go you to But days. we're

and been process amazing coming accomplishment that allows happen. it's recreating together by teams an the that to So our

in management just they effectively [indiscernible]. us we by how And medication that the them that what's understanding They're putting our couldn't in really do the ourselves we more is, intelligence for new this we process. the important allowing weren't really more do more impact do past to steps, reducing among into work it's allowed about customers because the and really

Peter Kuipers

virtual It Randy a we was XD the also. also training, that including like so processes And map, we which product transformation, then where digital road also, virtual positive. demonstrations said made implemented accelerated a on is we virtual sales we change think

Operator

Mitra from Sidoti. Ramgopal is question final of Your

Mitra Ramgopal

up think Middle operations you are one-time cetera, expenses et were I and there impacted sort And the associated COVID easing was in also, has you you East. safety, OUS just your even of that for going Canada. complying, forward? cetera, any be how et were with if Obviously, improving with curious might

Peter Kuipers

Yes.

So have of right? in country, a uptake our kind but roughly Rapid U.K., offering the blended differs of in basis, So East. and we France March, there, half then Middle the also implementation on extent, little the And bit some saw the towards kind definitely a But dynamics, we by new in Spain, it's latter bookings. it side. of of to on international, same also in also, Response a delay the

Governments the aggressive £XX of some U.K., funding are international, government like U.K. quite or providing rescinded in the of where loans countries NHS. the billion the in has written-off to

So different you there's will. dynamics, if

to And part of then was the question for COVID. the last cost We any quarter. related million freight $X.X some expediting in about on additional million, I the had $X cost think

that there. You freight because providing because not, tripled capacity flying they're additional commercial course, know might the and their have lower or of airlines airfreight doubled capacity expenses of not planes are

in million So quarter impact $X.X it's cost of from about the airfreight.

Operator

over Lipps to I'd call closing now to like turn any for Randall the remarks.

Randall Lipps

support a pandemic. continuity to coronavirus against for our the Well, safety thank and honored XX done protecting challenging on customers, be to XX, of joining customers' ensure employees. we We've had personal you, in the our mobilize staggering. our times, just course, so of the part business call and days fight impact last the our teams, been has much health immense the everybody, And today. that professional our lives through of these And are the has for

many would meeting demand. flowing are level just has service and thank just And customer a I what directly company very to adrenaline making us they fully been possible Omnicell for do. in by so manufacturing implementation and people's the at And as for a it high and just Our the say to XX teams lives want it's team last days. impact I the

Take for thank And joining us you Cheers. So soon. see today. care now. we'll you

Operator

this gentlemen, Thank and call. conference your you concludes Ladies participation. today's for

disconnect. now may You

Omnicell (OMCL) 9 May 202020 Q1 Earnings call transcript