Omnicell Reports Results for Fiscal Year and Fourth Quarter 2016

February 15, 2017

MOUNTAIN VIEW, Calif.

Record yearly GAAP revenue of $692.6 million, representing 43% year over year growth

Record yearly Non-GAAP revenue of $703.3 million, representing 45% year over year growth

Record product bookings of $541 million, representing 38% year over year growth

Omnicell, Inc. (NASDAQ: OMCL), a leading provider of medication and supply management solutions to healthcare systems, today announced results for its fiscal year and fourth quarter ended December 31, 2016. 

GAAP results: Revenue for the fourth quarter of 2016 was $172.0 million, down $4.8 million or 2.7% from the third quarter of 2016, and up $41.7 million or 32.0% from the fourth quarter of 2015. Revenue for the year ended December 31, 2016 was $692.6 million, up $208.1 million or 42.9% from the year ended December 31, 2015.

Fourth quarter 2016 net income as reported in accordance with U.S. generally accepted accounting principles (GAAP) was $0.2 million, or $0.00 per diluted share. This compares to GAAP net income of $2.0 million, or $0.05 per diluted share, for the third quarter of 2016, and GAAP net income of $7.7 million, or $0.21 per diluted share, for the fourth quarter of 2015.

GAAP net income for the year ended December 31, 2016 was $0.6 million, or $0.02 per diluted share. GAAP net income was $30.8 million, or $0.84 per diluted share, for the year ended December 31, 2015, which includes a $3.4 million gain on business combination of an equity investment.

Non-GAAP results:  Non-GAAP revenue for the fourth quarter of 2016 was $174.6 million, down $4.8 million, or 2.7% from the third quarter of 2016, and up $44.3 million or 34.0% from the fourth quarter of 2015.  Non-GAAP revenue for the twelve months ended December 31, 2016 was $703.3 million, up $218.7 million, or 45.1% from December 31, 2015.

Non-GAAP net income for the fourth quarter of 2016 was $13.8 million, or $0.37 per diluted share. This compares to non-GAAP net income of $14.9 million, or $0.40 per diluted share, for the third quarter of 2016 and $14.4 million, or $0.40 per diluted share, for the fourth quarter of 2015. 

Non-GAAP net income for the year ended December 31, 2016 was $55.7 million, or $1.51 per diluted share.  This compares to non-GAAP net income of $48.7 million, or $1.33 per diluted share for the year ended December 31, 2015.  Non-GAAP net income for each period presented excludes, when applicable, the effect of stock-based compensation expense, amortization expense for all intangible assets associated with past acquisitions, acquisition expenses, fair value adjustments related to business acquisition, amortization of debt issuance cost, and gain on business combination of an equity investment in Avantec.

Total bookings for the year ended December 31, 2016 were $541 million compared to total bookings for the year ended December 31, 2015 of $392 million.

"2016 was a successful year for Omnicell with record bookings, revenues and earnings," said Randall Lipps, Omnicell president, CEO and chairman. "We are proud of the company’s financial performance and our strategic execution aimed at supporting health systems in achieving their patient safety, operational and financial goals.''

"Our customers tell us medication management is central to their patient safety and operational strategies.  Our recent wins showcase the strength of our comprehensive and innovative solutions that enable us to be a vital partner.  The company is well positioned to take advantage of the great opportunities ahead in 2017,'' Mr. Lipps added.

2017 Guidance:

The fiscal year 2017 financial results are expected to be characterized by two distinct phases, as revenue and profitability are expected to be impacted by the Company's XT Series product introduction transition and manufacturing ramp up:

A. The first phase encompasses the introduction and ramp up of manufacturing for the XT Series in the first quarter of 2017, with  anticipated dynamics including:

  • Conversion of G4 product bookings and backlog, and sales quotes to XT Series bookings;

  • XT Series manufacturing volume ramp up;

  • Installation of the XT Series product at launch customers;

  • XT Series manufacturing ramp up cost;

  • Reduction of workforce by approximately 100 positions, and the closure of the Company's Tennessee office; and

  • General hiring delays

For the first quarter of 2017, the Company expects non-GAAP revenue to be between $150 million and $155 million. Omnicell expects first quarter of 2017 non-GAAP earnings to be between $0.00 and $0.04 per share.

B.  The second phase encompasses the acceleration of installations and conversion of product backlog into revenue during the second through the fourth quarters of 2017, with anticipated dynamics including:

  • Launch of Acudose-Rx® on XT Series;

  • Improvement of XT Series production cost;

  • Above 20% growth rate for product bookings;

  • Return to 8%-12% revenue organic growth range rate;

  • XT Series cost of sales reductions as revenue ramps up;

  • Continuation of cost reduction initiatives; and

  • Implement development and manufacturing Centers of Excellence (''COEs")

As part of the next phase of the integration of the acquisition of Aesynt the Company is creating the following Centers of Excellence (“COEs”) for product development, engineering, and manufacturing:

  • the Point of Use COE in California;

  • the Robotics and Central Pharmacy COE in Pittsburgh, Pennsylvania; and

  • the Medication Adherence Consumables COE in St. Petersburg, Florida

The Company today announced a reduction of its workforce by approximately 100 full-time employees, or about 4% of its total headcount, anticipated to be completed in the first quarter of 2017. This reduction in force includes the closure of the Company’s Nashville, Tennessee office, anticipated in the first quarter of 2017, and the closure of the Company’s manufacturing facility in Slovenia, anticipated in the third quarter of 2017. The Company expects to incur approximately $4 million of restructuring expenses in connection with the reduction in force for one-time termination benefits, comprised principally of severance.  The Company expects to incur approximately an additional $4 million of restructuring expenses in connection with facility leases, dilapidation, and other one-time facilities-related expenses.

For the second through the fourth quarters of 2017, the Company expects non-GAAP revenue to be between $590 million and $605 million, representing 8%-12% growth both on a reported and organic basis. For the second through fourth quarters of 2017, the Company expects non-GAAP earnings to be between $1.32 and $1.38 per share, representing above 15% growth, both on a reported and organic basis.

For the year 2017, Omnicell expects product bookings to be between $570 million and $590 million. The Company expects non-GAAP revenue to be between $740 million and $760 million, and non-GAAP earnings to be between $1.32 and $1.42 per share.

The table below summarizes Omnicell's 2017 guidance for the two distinct phases outlined above:

Q1'17

Q2'17 through Q4'17

Total Year 2017

Product Bookings

<0% year over year growth

>20% year over year growth

$570 million - $590 million

Non-GAAP Revenue

$150 million - $155 million

$590 million - $605 million

$740 million - $760 million

Non-GAAP EPS

$0.00 - $0.04

$1.32 - $1.38

$1.32 - $1.42

Reporting Segments


The Company's Chief Operating Decision Maker (''CODM") is its Chief Executive Officer. The CODM allocates resources and evaluates the performance of the Company's segments using information about its revenues, gross profit, and income from operations. Such evaluation excludes general corporate-level costs that are not specific to either of the reportable segments and are managed separately at the corporate level. Corporate-level costs include expenses related to executive management, finance and accounting, human resources, legal, training and development, and certain administrative expenses. The operating results of the acquired Aesynt business acquired in the first quarter of 2016 are included in the Company's Automation and Analytics reportable segment. The operating results of the Ateb business acquired in the fourth quarter of 2016 are included in the Company's Medication Adherence reportable segment.

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