Total GAAP revenues of $299 million
GAAP net income per diluted share of $0.08
Non-GAAP net income per diluted share of
$0.57
Omnicell, Inc. (NASDAQ:OMCL) (“Omnicell,” “we,” “our,” “us,”
“management,” or the “Company”), a leader in transforming the
pharmacy care delivery model, today announced results for its
second quarter ended June 30, 2023.
“Our second quarter results reflect sequential revenue and
profit growth, as we exceeded our previously disclosed guidance
ranges for total product and service revenues, non-GAAP EBITDA, and
non-GAAP earnings per share,” said Randall Lipps, chairman,
president, chief executive officer, and founder of Omnicell. “We
continue to make progress integrating our most recent acquisitions
and executing go-to-market strategies for each. In addition, we
believe our recent customer wins demonstrate the important role
Omnicell plays in automating and modernizing global medication
management infrastructure. We are maintaining what we believe is a
prudent approach to managing the business and believe Omnicell will
play a key role in addressing the labor constraints that so many of
our customers continue to navigate. We remain focused on delivering
mission-critical medication management solutions and long-term
growth.”
Financial Results
Total GAAP revenues for the second quarter of 2023 were $299
million, down $32 million, or 10%, from the second quarter of 2022.
The year-over-year decrease in total GAAP revenues reflects lower
point-of-care revenues primarily as a result of ongoing health
systems capital budget and labor constraints.
Total GAAP net income for the second quarter of 2023 was $3
million, or $0.08 per diluted share. This compares to GAAP net
income of $9 million, or $0.20 per diluted share, for the second
quarter of 2022.
Total non-GAAP net income for the second quarter of 2023 was $26
million, or $0.57 per diluted share. This compares to non-GAAP net
income of $38 million, or $0.84 per diluted share, for the second
quarter of 2022.
Total non-GAAP EBITDA for the second quarter of 2023 was $47
million. This compares to non-GAAP EBITDA of $56 million for the
second quarter of 2022.
Balance Sheet
As of June 30, 2023, Omnicell’s balance sheet reflected cash and
cash equivalents of $399 million, total debt (net of unamortized
debt issuance costs) of $568 million, and total assets of $2.19
billion. Cash flows provided by operating activities in the second
quarter of 2023 totaled $73 million. This compares to cash flows
used in operating activities totaling $10 million in the second
quarter of 2022.
As of June 30, 2023, the Company had $418 million of
availability under its revolving credit facility, which
availability is subject to reduction in order to maintain
compliance with certain financial covenants under the revolving
credit facility. As of June 30, 2023, the Company had no
outstanding balance under the revolving credit facility.
Updated 2023 Guidance
For the full year 2023, the Company expects bookings to trend
toward the lower end of the previously disclosed guidance range of
$1.000 billion and $1.100 billion. The Company expects full year
2023 total revenues to be between $1.160 billion and $1.200
billion. The Company expects full year 2023 product revenues to be
between $740 million and $760 million, and full year 2023 service
revenues to be between $420 million and $440 million. The Company
expects full year 2023 technical services revenues to be between
$215 million and $225 million, and full year 2023 Advanced Services
revenues to be between $205 million and $215 million. The Company
expects full year 2023 non-GAAP EBITDA to be between $130 million
and $145 million. The Company expects full year 2023 non-GAAP
earnings per share to be between $1.75 and $2.00 per share.
For the third quarter of 2023, the Company expects total
revenues to be between $290 million and $300 million. The Company
expects third quarter 2023 product revenues to be between $185
million and $190 million, and third quarter 2023 service revenues
to be between $105 million and $110 million. The Company expects
third quarter 2023 non-GAAP EBITDA to be between $31 million and
$37 million. The Company expects third quarter 2023 non-GAAP
earnings per share to be between $0.42 and $0.52 per share.
The table below summarizes Omnicell’s third quarter and updated
full year 2023 guidance outlined above.
Q3 2023
2023
Bookings
Not provided
$1.000 billion - $1.100
billion
Total Revenues
$290 million - $300 million
$1.160 billion - $1.200
billion
Product Revenues
$185 million - $190 million
$740 million - $760 million
Service Revenues
$105 million - $110 million
$420 million - $440 million
Technical Services Revenues
Not provided
$215 million - $225 million
Advanced Services Revenues
Not provided
$205 million - $215 million
Non-GAAP EBITDA
$31 million - $37 million
$130 million - $145 million
Non-GAAP Earnings Per Share
$0.42 - $0.52
$1.75 - $2.00
The Company does not provide guidance for GAAP net income or
GAAP earnings per share, nor a reconciliation of these
forward-looking non-GAAP financial measures to the most directly
comparable GAAP financial measures on a forward-looking basis
because it is unable to predict certain items contained in the GAAP
measures without unreasonable efforts. These forward-looking
non-GAAP financial measures do not include certain items, which may
be significant, including, but not limited to, unusual gains and
losses, costs associated with future restructurings,
acquisition-related expenses, and certain tax and litigation
outcomes.
Omnicell Conference Call Information
Omnicell will hold a conference call today, Tuesday, August 1,
2023 at 4:30 p.m. ET to discuss second quarter 2023 financial
results. The conference call can be monitored by dialing
1-888-550-5424 within the U.S. or 1-646-960-0819 for all other
locations. A link to the live and archived webcast will also be
available on the Investor Relations section of Omnicell’s website
at http://ir.omnicell.com/events-and-presentations/.
__________________________________________________
About Omnicell
Since 1992, Omnicell has been committed to transforming the
pharmacy care delivery model in an effort to optimize financial and
clinical outcomes across all settings of care. Through a
comprehensive portfolio of automation and advanced services,
Omnicell is uniquely positioned to address evolving healthcare
challenges, connect settings of care, and streamline the medication
management process. Healthcare facilities worldwide partner with
Omnicell to help increase operational efficiency, reduce medication
errors, improve patient safety, and enhance patient engagement and
adherence, helping to reduce costly hospital readmissions. To learn
more, visit omnicell.com.
From time to time, Omnicell may use the Company’s investor
relations website and other online social media channels, including
its Twitter handle www.twitter.com/omnicell, LinkedIn page
www.linkedin.com/company/omnicell, and Facebook page
www.facebook.com/omnicellinc, to disclose material non-public
information and comply with its disclosure obligations under
Regulation Fair Disclosure (“Reg FD”).
OMNICELL and the Omnicell logo are registered trademarks of
Omnicell, Inc. or one of its subsidiaries.
Forward-Looking Statements
To the extent any statements contained in this press release
deal with information that is not historical, these statements are
“forward-looking statements” within the meaning of the Private
Securities Litigation Reform Act of 1995. Without limiting the
foregoing, statements including the words “expect,” “intend,”
“may,” “will,” “should,” “would,” “could,” “plan,” “potential,”
“anticipate,” “believe,” “forecast,” “guidance,” “outlook,”
“goals,” “target,” “estimate,” “seek,” “predict,” “project,” and
similar expressions are intended to identify forward-looking
statements. Forward-looking statements are subject to the
occurrence of many events outside Omnicell’s control. Such
statements include, but are not limited to, Omnicell’s projected
bookings, revenues, including product, service, technical services
and Advanced Services revenues, non-GAAP EBITDA, and non-GAAP
earnings per share; expectations regarding, and progress
integrating, recent acquisitions; our ability to deliver long-term
growth; and statements about Omnicell’s strategy, plans,
objectives, goals, vision, planned investments, products and
services and the expected benefits. Actual results and other events
may differ significantly from those contemplated by forward-looking
statements due to numerous factors that involve substantial known
and unknown risks and uncertainties. These risks and uncertainties
include, among other things, (i) unfavorable general economic and
market conditions, including the impact and duration of
inflationary pressures, (ii) ability to realize the benefits of our
expense containment efforts, (iii) Omnicell’s ability to take
advantage of growth opportunities and develop and commercialize new
solutions and enhance existing solutions, (iv) reduction in demand
in the capital equipment market or reduction in the demand for or
adoption of our solutions, systems, or services, (v) delays in
installations of our medication management solutions or our more
complex medication packaging systems, (vi) risks related to
Omnicell’s investments in new business strategies or initiatives,
including its transition to selling more products and services on a
subscription basis, and its ability to acquire companies,
businesses, or technologies and successfully integrate such
acquisitions, (vii) risks related to failing to maintain expected
service levels when providing our Advanced Services or retaining
our Advanced Services customers, (viii) Omnicell’s ability to meet
the demands of, or maintain relationships with, its institutional,
retail, and specialty pharmacy customers, (ix) risks related to
climate change, legal, regulatory or market measures to address
climate change and related emphasis on ESG matters by various
stakeholders, (x) changes to the 340B Program, (xi) Omnicell’s
substantial debt, which could impair its financial flexibility and
access to capital, (xii) covenants in our credit agreement could
restrict our business and operations, (xiii) continued and
increased competition from current and future competitors in the
medication management automation solutions market and the
medication adherence solutions market, (xiv) risks presented by
government regulations, legislative changes, fraud and
anti-kickback statues, products liability claims, the outcome of
legal proceedings, and other legal obligations related to
healthcare, privacy, data protection, and information security,
including any potential governmental investigations and enforcement
actions, litigation, fines and penalties, exposure to
indemnification obligations or other liabilities, and adverse
publicity as a result of the previously disclosed ransomware
incident, (xv) any disruption in Omnicell’s information technology
systems and breaches of data security or cyber-attacks on its
systems or solutions, including the previously disclosed ransomware
incident and any potential adverse legal, reputational, and
financial effects that may result from it and/or additional
cybersecurity incidents, as well as the effectiveness of business
continuity plans during any future cybersecurity incidents, (xvi)
risks associated with operating in foreign countries, (xvii)
Omnicell’s ability to recruit and retain skilled and motivated
personnel, (xviii) Omnicell’s ability to protect its intellectual
property, (xix) risks related to the availability and sources of
raw materials and components or price fluctuations, shortages, or
interruptions of supply, (xx) Omnicell’s dependence on a limited
number of suppliers for certain components, equipment, and raw
materials, as well as technologies provided by third-party vendors,
(xxi) fluctuations in quarterly and annual operating results may
make our future operating results difficult to predict, (xxii)
failing to meet (or significantly exceeding) our publicly announced
financial guidance, and (xxiii) other risks and uncertainties
further described in the “Risk Factors” section of Omnicell’s most
recent Annual Report on Form 10-K, as well as in Omnicell’s other
reports filed with or furnished to the United States Securities and
Exchange Commission (“SEC”), available at www.sec.gov.
Forward-looking statements should be considered in light of these
risks and uncertainties. Investors and others are cautioned not to
place undue reliance on forward-looking statements. All
forward-looking statements contained in this press release speak
only as of the date of this press release. Omnicell assumes no
obligation to update any such statements publicly, or to update the
reasons actual results could differ materially from those expressed
or implied in any forward-looking statements, whether as a result
of changed circumstances, new information, future events, or
otherwise, except as required by law.
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”). Management evaluates and makes operating
decisions using various performance measures. In addition to
Omnicell’s GAAP results, we also consider non-GAAP revenues,
non-GAAP gross profit, non-GAAP gross margin, non-GAAP operating
expenses, non-GAAP income from operations, non-GAAP operating
margin, non-GAAP net income, non-GAAP net income per diluted share,
non-GAAP diluted shares, non-GAAP EBITDA, non-GAAP EBITDA margin,
and non-GAAP free cash flow. These non-GAAP results and metrics
should not be considered as an alternative to revenues, gross
profit, operating expenses, income from operations, net income, net
income per diluted share, diluted shares, net cash provided by
operating activities, or any other performance measure derived in
accordance with GAAP. We present these non-GAAP results and metrics
because management considers them to be important supplemental
measures of Omnicell’s performance and refers to such measures when
analyzing Omnicell’s strategy and operations.
Our non-GAAP revenues, non-GAAP gross profit, non-GAAP gross
margin, non-GAAP operating expenses, non-GAAP income from
operations, non-GAAP operating margin, non-GAAP net income,
non-GAAP net income per diluted share, non-GAAP EBITDA, and
non-GAAP EBITDA margin 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 such period that directly drive operating income in
such 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 believe we should
invest in research and development, fund infrastructure growth, and
evaluate the effectiveness of marketing strategies. In calculating
the above non-GAAP results: non-GAAP revenues excludes from its
GAAP equivalent item a) below; non-GAAP gross profit and non-GAAP
gross margin exclude from their GAAP equivalents items a), b), c),
f), and h) below; non-GAAP operating expenses excludes from its
GAAP equivalents items b), c), d), e), f), g) and h) below;
non-GAAP income from operations and non-GAAP operating margin
exclude from their GAAP equivalents items a), b), c), d), e), f),
g) and h) below; and non-GAAP net income and non-GAAP net income
per diluted share exclude from their GAAP equivalents items a)
through i) below. Non-GAAP EBITDA is defined as earnings before
interest income and expense, taxes, depreciation, amortization, and
share-based compensation, as well as excluding certain other
non-GAAP adjustments. Non-GAAP EBITDA and non-GAAP EBITDA margin
exclude from their GAAP equivalents items a), b), d), e), f), g),
h) and i) below:
a)
Acquisition accounting impact related to
deferred revenues. In connection with the acquisition of FDS
Amplicare on September 9, 2021, we recorded a fair value adjustment
to acquired deferred revenues as part of the purchase accounting in
accordance with GAAP. The adjustment represents revenues that would
have been recognized in the normal course of business by FDS
Amplicare if the acquisition had not occurred, but was not
recognized due to GAAP purchase accounting requirements. The
non-GAAP adjustment to our revenues is intended to include the full
amounts of such revenues. We believe the adjustment to these
revenues is useful as a measure of the ongoing performance of our
business.
b)
Share-based compensation expense. We
excluded from our non-GAAP results the expense related to
equity-based compensation plans as it represents expenses that do
not require cash settlement from Omnicell.
c)
Amortization of acquired intangible
assets. We excluded from our non-GAAP results the intangible assets
amortization expense resulting from our past acquisitions. 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.
d)
Acquisition-related expenses. We excluded
from our non-GAAP results the expenses related to recent
acquisitions, including amortization of representations and
warranties insurance. These expenses are unrelated to our ongoing
operations, vary in size and frequency, and are subject to
significant fluctuations from period to period due to varying
levels of acquisition activity. We believe that excluding these
expenses provides more meaningful comparisons of the financial
results to our historical operations and forward-looking guidance,
and to the financial results of less acquisitive peer
companies.
e)
Impairment and abandonment of operating
lease right-of-use and other assets related to facilities. We
excluded from our non-GAAP results the impairment and abandonment
of certain operating lease right-of-use assets, as well as property
and equipment, incurred in connection with restructuring activities
for optimization of certain leased facilities. 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.
f)
Ransomware-related expenses, net of
insurance recoveries. We excluded from our non-GAAP results the net
expenses related to the previously disclosed ransomware incident
identified by the Company on May 4, 2022. Expenses include costs to
investigate and remediate the ransomware incident, as well as legal
and other professional services, and are presented net of expected
insurance recoveries. These expenses are unrelated to our ongoing
operations and would not have otherwise been incurred by us in the
normal course of business. We believe that excluding these expenses
provides more meaningful comparisons of the financial results to
our historical operations and forward-looking guidance, and to the
financial results of peer companies.
g)
Executives transition costs. We excluded
from our non-GAAP results the executives transition costs
associated with the departure of certain executive officers,
primarily consisting of severance expenses. These expenses are
unrelated to our ongoing operations and we do not expect them to
occur in the ordinary course of business. We believe that excluding
these expenses provides more meaningful comparisons of the
financial results to our historical operations and forward-looking
guidance, and to the financial results of peer companies.
h)
Severance-related expenses. We excluded
from our non-GAAP results the expenses related to restructuring
events. These expenses are unrelated to our ongoing operations,
vary in size and frequency, and are subject to significant
fluctuations from period to period due to varying levels of
restructuring activity. We believe that excluding these expenses
provides more meaningful comparisons of the financial results to
our historical operations and forward-looking guidance, and to the
financial results of peer companies.
i)
Amortization of debt issuance costs. Debt
issuance costs represent costs associated with the issuance of term
loan and revolving credit facilities, as well as the issuance of
convertible senior notes. The costs include underwriting fees,
original issue discount, ticking fees, and legal fees. These
non-cash expenses 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 compensation plans or other items.
We believe that the presentation of non-GAAP revenues, non-GAAP
gross profit, non-GAAP gross margin, non-GAAP operating expenses,
non-GAAP income from operations, non-GAAP operating margin,
non-GAAP net income, non-GAAP net income per diluted share,
non-GAAP EBITDA, and non-GAAP EBITDA margin is warranted for
several reasons:
a)
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.
b)
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.
c)
These non-GAAP financial measures are
employed by management in its own evaluation of performance and are
utilized in financial and operational decision-making processes,
such as budget planning and forecasting.
d)
These non-GAAP financial measures
facilitate comparisons to the operating results of other companies
in our industry, which also use non-GAAP financial measures to
supplement their GAAP results (although these companies may
calculate non-GAAP financial measures differently than Omnicell
does), 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 is excluded from our non-GAAP financial
measures:
i)
While share-based compensation calculated
in accordance with Accounting Standards Codification (“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
share-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.
Non-GAAP diluted shares is defined as our GAAP diluted shares,
excluding the impact of dilutive convertible senior notes for which
the Company is economically hedged through its anti-dilutive
convertible note hedge transaction. We believe non-GAAP diluted
shares is a useful non-GAAP metric because it provides insight into
the offsetting economic effect of the hedge transaction against
potential conversion of the convertible senior notes.
Non-GAAP free cash flow is defined as net cash provided by
operating activities less cash used for software development for
external use and purchases of property and equipment. We believe
free cash flow is important to enable investors to better
understand and evaluate our ongoing operating results and allows
for greater transparency in the review and understanding of our
overall financial, operational, and economic performance, because
free cash flow takes into account certain capital expenditures and
cash used for software development necessary to operate our
business.
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:
a)
Omnicell’s equity incentive plans 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.
b)
Other companies, including companies in
Omnicell’s industry, may calculate non-GAAP financial measures
differently than Omnicell, limiting their usefulness as a
comparative measure.
c)
A limitation of the utility of free cash
flow as a measure of financial performance is that it does not
represent the total increase or decrease in Omnicell’s cash balance
for the period.
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 as well as in
Omnicell’s other reports filed with or furnished to the SEC.
Omnicell, Inc.
Condensed Consolidated
Statements of Operations
(Unaudited, in thousands,
except per share data)
Three Months Ended June
30,
Six Months Ended June
30,
2023
2022
2023
2022
Revenues:
Product revenues
$
188,436
$
233,806
$
374,151
$
459,681
Services and other revenues
110,537
97,580
215,451
190,533
Total revenues
298,973
331,386
589,602
650,214
Cost of revenues:
Cost of product revenues
107,962
121,814
217,489
240,152
Cost of services and other revenues
56,568
51,480
112,641
101,923
Total cost of revenues
164,530
173,294
330,130
342,075
Gross profit
134,443
158,092
259,472
308,139
Operating expenses:
Research and development
23,137
26,355
46,015
51,385
Selling, general, and administrative
103,558
119,252
228,672
239,185
Total operating expenses
126,695
145,607
274,687
290,570
Income (loss) from operations
7,748
12,485
(15,215
)
17,569
Interest and other income (expense),
net
4,461
(1,711
)
6,242
(1,825
)
Income (loss) before income taxes
12,209
10,774
(8,973
)
15,744
Provision for (benefit from) income
taxes
8,758
1,705
2,576
(1,538
)
Net income (loss)
$
3,451
$
9,069
$
(11,549
)
$
17,282
Net income (loss) per share:
Basic
$
0.08
$
0.21
$
(0.26
)
$
0.39
Diluted
$
0.08
$
0.20
$
(0.26
)
$
0.37
Weighted-average shares
outstanding:
Basic
45,125
44,219
45,007
44,234
Diluted
45,472
46,260
45,007
47,121
Omnicell, Inc.
Condensed Consolidated Balance
Sheets
(Unaudited, in
thousands)
June 30, 2023
December 31,
2022
ASSETS
Current assets:
Cash and cash equivalents
$
399,464
$
330,362
Accounts receivable and unbilled
receivables, net
273,899
299,469
Inventories
130,577
147,549
Prepaid expenses
23,514
27,070
Other current assets
53,907
77,362
Total current assets
881,361
881,812
Property and equipment, net
103,212
93,961
Long-term investment in sales-type leases,
net
35,039
32,924
Operating lease right-of-use assets
27,698
38,052
Goodwill
735,523
734,274
Intangible assets, net
226,707
242,906
Long-term deferred tax assets
32,764
22,329
Prepaid commissions
54,777
59,483
Other long-term assets
96,791
105,017
Total assets
$
2,193,872
$
2,210,758
LIABILITIES AND STOCKHOLDERS’
EQUITY
Current liabilities:
Accounts payable
$
47,192
$
63,389
Accrued compensation
52,475
73,455
Accrued liabilities
145,888
172,655
Deferred revenues, net
124,602
118,947
Total current liabilities
370,157
428,446
Long-term deferred revenues
48,750
37,385
Long-term deferred tax liabilities
1,511
2,095
Long-term operating lease liabilities
35,510
39,405
Other long-term liabilities
6,265
6,719
Convertible senior notes, net
568,114
566,571
Total liabilities
1,030,307
1,080,621
Total stockholders’ equity
1,163,565
1,130,137
Total liabilities and stockholders’
equity
$
2,193,872
$
2,210,758
Omnicell, Inc.
Condensed Consolidated
Statements of Cash Flows
(Unaudited, in
thousands)
Six Months Ended June
30,
2023
2022
Operating Activities
Net income (loss)
$
(11,549
)
$
17,282
Adjustments to reconcile net income (loss)
to net cash provided by (used in) operating activities:
Depreciation and amortization
44,054
43,017
Loss on disposal of property and
equipment
993
—
Share-based compensation expense
28,131
33,421
Deferred income taxes
(11,019
)
(9,506
)
Amortization of operating lease
right-of-use assets
4,225
6,801
Impairment and abandonment of operating
lease right-of-use assets related to facilities
7,815
5,093
Amortization of debt issuance costs
2,091
2,079
Changes in operating assets and
liabilities:
Accounts receivable and unbilled
receivables
26,463
(71,418
)
Inventories
17,820
(32,625
)
Prepaid expenses
3,576
1,660
Other current assets
773
(1,996
)
Investment in sales-type leases
(1,707
)
(12,465
)
Prepaid commissions
4,706
6,033
Other long-term assets
43
1,455
Accounts payable
(15,806
)
(3,130
)
Accrued compensation
(20,980
)
(11,118
)
Accrued liabilities
(4,646
)
4,682
Deferred revenues
16,540
1,395
Operating lease liabilities
(5,396
)
(7,176
)
Other long-term liabilities
(454
)
969
Net cash provided by (used in) operating
activities
85,673
(25,547
)
Investing Activities
External-use software development
costs
(6,685
)
(6,543
)
Purchases of property and equipment
(21,772
)
(21,099
)
Business acquisition, net of cash
acquired
—
(3,392
)
Purchase price adjustments from business
acquisitions
—
5,484
Net cash used in investing activities
(28,457
)
(25,550
)
Financing Activities
Proceeds from issuances under stock-based
compensation plans
15,203
21,123
Employees’ taxes paid related to
restricted stock units
(3,465
)
(8,470
)
Change in customer funds, net
(4,273
)
5,986
Stock repurchases
—
(52,210
)
Net cash provided by (used in) financing
activities
7,465
(33,571
)
Effect of exchange rate changes on cash
and cash equivalents
148
(2,123
)
Net increase (decrease) in cash, cash
equivalents, and restricted cash
64,829
(86,791
)
Cash, cash equivalents, and restricted
cash at beginning of period
352,835
355,620
Cash, cash equivalents, and restricted
cash at end of period
$
417,664
$
268,829
Reconciliation of cash, cash
equivalents, and restricted cash to the Condensed Consolidated
Balance Sheets:
Cash and cash equivalents
$
399,464
$
244,953
Restricted cash included in other current
assets
18,200
23,876
Cash, cash equivalents, and restricted
cash at end of period
$
417,664
$
268,829
Omnicell, Inc.
Reconciliation of GAAP to
Non-GAAP
(Unaudited, in thousands,
except per share data and percentage)
Three Months Ended June
30,
Six Months Ended June
30,
2023
2022
2023
2022
Reconciliation of GAAP revenues to
non-GAAP revenues:
GAAP revenues
$
298,973
$
331,386
$
589,602
$
650,214
Acquisition accounting impact related to
deferred revenues
—
302
—
680
Non-GAAP revenues
$
298,973
$
331,688
$
589,602
$
650,894
Reconciliation of GAAP gross profit to
non-GAAP gross profit:
GAAP gross profit
$
134,443
$
158,092
$
259,472
$
308,139
GAAP gross margin
45.0
%
47.7
%
44.0
%
47.4
%
Share-based compensation expense
2,268
2,160
4,276
4,404
Amortization of acquired intangibles
2,900
3,537
5,925
6,851
Acquisition accounting impact related to
deferred revenues
—
302
—
680
Ransomware-related expenses, net of
insurance recoveries
—
222
—
222
Severance-related expenses
238
—
382
156
Non-GAAP gross profit
$
139,849
$
164,313
$
270,055
$
320,452
Non-GAAP gross margin
46.8
%
49.5
%
45.8
%
49.2
%
Reconciliation of GAAP operating
expenses to non-GAAP operating expenses:
GAAP operating expenses
$
126,695
$
145,607
$
274,687
$
290,570
GAAP operating expenses % to total
revenues
42.4
%
43.9
%
46.6
%
44.7
%
Share-based compensation expense
(11,821
)
(15,053
)
(23,855
)
(29,017
)
Amortization of acquired intangibles
(5,135
)
(5,308
)
(10,352
)
(11,047
)
Acquisition-related expenses
(246
)
(263
)
(492
)
(1,658
)
Impairment and abandonment of operating
lease right-of-use and other assets related to facilities (a)
—
(3,340
)
(8,420
)
(5,093
)
Ransomware-related expenses, net of
insurance recoveries
—
(1,152
)
—
(1,152
)
Executives transition costs
(841
)
—
(841
)
—
Severance-related expenses
(483
)
—
(5,653
)
(3,371
)
Non-GAAP operating expenses
$
108,169
$
120,491
$
225,074
$
239,232
Non-GAAP operating expenses as a % of
total non-GAAP revenues
36.2
%
36.3
%
38.2
%
36.8
%
Reconciliation of GAAP income (loss)
from operations to non-GAAP income from operations:
GAAP income (loss) from operations
$
7,748
$
12,485
$
(15,215
)
$
17,569
GAAP operating income (loss) % to total
revenues
2.6
%
3.8
%
(2.6
)%
2.7
%
Share-based compensation expense
14,089
17,213
28,131
33,421
Amortization of acquired intangibles
8,035
8,845
16,277
17,898
Acquisition accounting impact related to
deferred revenues
—
302
—
680
Acquisition-related expenses
246
263
492
1,658
Impairment and abandonment of operating
lease right-of-use and other assets related to facilities (a)
—
3,340
8,420
5,093
Ransomware-related expenses, net of
insurance recoveries
—
1,374
—
1,374
Executives transition costs
841
—
841
—
Severance-related expenses
721
—
6,035
3,527
Non-GAAP income from operations
$
31,680
$
43,822
$
44,981
$
81,220
Non-GAAP operating margin (non-GAAP
operating income as a % of total non-GAAP revenues)
10.6
%
13.2
%
7.6
%
12.5
%
Omnicell, Inc.
Reconciliation of GAAP to
Non-GAAP
(Unaudited, in thousands,
except per share data and percentage)
Three Months Ended June
30,
Six Months Ended June
30,
2023
2022
2023
2022
Reconciliation of GAAP net income
(loss) to non-GAAP net income:
GAAP net income (loss)
$
3,451
$
9,069
$
(11,549
)
$
17,282
Share-based compensation expense
14,089
17,213
28,131
33,421
Amortization of acquired intangibles
8,035
8,845
16,277
17,898
Acquisition accounting impact related to
deferred revenues
—
302
—
680
Acquisition-related expenses
246
263
492
1,658
Impairment and abandonment of operating
lease right-of-use and other assets related to facilities (a)
—
3,340
8,420
5,093
Ransomware-related expenses, net of
insurance recoveries
—
1,374
—
1,374
Executives transition costs
841
—
841
—
Severance-related expenses
721
—
6,035
3,527
Amortization of debt issuance costs
1,046
1,041
2,091
2,079
Tax effect of the adjustments above
(b)
(2,287
)
(3,185
)
(7,173
)
(6,786
)
Non-GAAP net income
$
26,142
$
38,262
$
43,565
$
76,226
Reconciliation of GAAP net income
(loss) per share - diluted to non-GAAP net income per share -
diluted:
Shares - diluted GAAP
45,472
46,260
45,007
47,121
Shares - diluted non-GAAP (c)
45,472
45,361
45,306
45,655
GAAP net income (loss) per share -
diluted
$
0.08
$
0.20
$
(0.26
)
$
0.37
Share-based compensation expense
0.31
0.38
0.62
0.73
Amortization of acquired intangibles
0.17
0.19
0.36
0.39
Acquisition accounting impact related to
deferred revenues
—
0.01
—
0.01
Acquisition-related expenses
0.01
0.01
0.01
0.04
Impairment and abandonment of operating
lease right-of-use and other assets related to facilities
—
0.07
0.19
0.11
Ransomware-related expenses, net of
insurance recoveries
—
0.03
—
0.03
Executives transition costs
0.02
—
0.02
—
Severance-related expenses
0.02
—
0.13
0.08
Amortization of debt issuance costs
0.02
0.02
0.05
0.05
Non-GAAP dilutive shares impact from
convertible note hedge transaction (c)
—
—
—
0.01
Tax effect of the adjustments above
(b)
(0.06
)
(0.07
)
(0.16
)
(0.15
)
Non-GAAP net income per share -
diluted
$
0.57
$
0.84
$
0.96
$
1.67
Reconciliation of GAAP net income
(loss) to non-GAAP EBITDA(d):
GAAP net income (loss)
$
3,451
$
9,069
$
(11,549
)
$
17,282
Share-based compensation expense
14,089
17,213
28,131
33,421
Interest (income) and expense, net
(4,410
)
(142
)
(7,484
)
(175
)
Depreciation and amortization expense
22,080
21,893
44,054
43,017
Acquisition accounting impact related to
deferred revenues
—
302
—
680
Acquisition-related expenses
246
263
492
1,658
Impairment and abandonment of operating
lease right-of-use and other assets related to facilities (a)
—
3,340
8,420
5,093
Ransomware-related expenses, net of
insurance recoveries
—
1,374
—
1,374
Executives transition costs
841
—
841
—
Severance-related expenses
721
—
6,035
3,527
Amortization of debt issuance costs
1,046
1,041
2,091
2,079
Provision for (benefit from) income
taxes
8,758
1,705
2,576
(1,538
)
Non-GAAP EBITDA
$
46,822
$
56,058
$
73,607
$
106,418
Non-GAAP EBITDA margin (non-GAAP EBITDA as
a % of total non-GAAP revenues)
15.7
%
16.9
%
12.5
%
16.3
%
_________________________________________________
(a)
For the six months ended June 30, 2023,
impairment charges of other assets were approximately $0.6 million
related to property and equipment in connection with restructuring
activities for optimization of certain leased facilities.
(b)
Tax effects calculated for all adjustments
except share-based compensation expense, using an estimated annual
effective tax rate of 21% for both fiscal years 2023 and 2022.
(c)
For the three and six months ended June
30, 2022, non-GAAP diluted shares excluded approximately 0.9
million and 1.5 million shares, respectively, related to the impact
of dilutive convertible senior notes for which the Company is
economically hedged through its anti-dilutive convertible note
hedge transaction.
(d)
Defined as earnings before interest income
and expense, taxes, depreciation, amortization, and share-based
compensation, as well as excluding certain other non-GAAP
adjustments.
Omnicell, Inc.
Reconciliation of GAAP to
Non-GAAP
(Unaudited, in
thousands)
Three Months Ended June
30,
Six Months Ended June
30,
2023
2022
2023
2022
Reconciliation of GAAP net cash
provided by (used in) operating activities to non-GAAP free cash
flow:
GAAP net cash provided by (used in)
operating activities
$
72,903
$
(9,551
)
$
85,673
$
(25,547
)
External-use software development
costs
(3,186
)
(2,691
)
(6,685
)
(6,543
)
Purchases of property and equipment
(11,631
)
(9,610
)
(21,772
)
(21,099
)
Non-GAAP free cash flow
$
58,086
$
(21,852
)
$
57,216
$
(53,189
)
View source
version on businesswire.com: https://www.businesswire.com/news/home/20230801126223/en/
Kathleen Nemeth Senior Vice President, Investor Relations
650-435-3318 Kathleen.Nemeth@Omnicell.com
Omnicell (NASDAQ:OMCL)
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