October 27, 2020

Omnicell Reports Third Quarter 2020 Results

GAAP and non-GAAP revenues of $213.7 million
GAAP net income per diluted share of $0.20
Non-GAAP net income per diluted share of $0.60

MOUNTAIN VIEW, Calif. -- October 27, 2020 -- Omnicell, Inc. (NASDAQ:OMCL), a leading provider of medication management solutions and adherence tools for healthcare systems and pharmacies, today announced results for its third quarter ended September 30, 2020.

GAAP Results

GAAP revenues for the third quarter of 2020 were $213.7 million, down $15.1 million, or 6.6% from the third quarter of 2019. GAAP revenues for the nine months ended September 30, 2020 were $643.0 million, down $5.7 million, or 0.9% from the nine months ended September 30, 2019.

Third quarter 2020 GAAP net income was $8.8 million, or $0.20 per diluted share. This compares to GAAP net income of $20.0 million, or $0.46 per diluted share, for the third quarter of 2019.

GAAP net income for the nine months ended September 30, 2020 was $15.8 million, or $0.36 per diluted share. This compares to GAAP net income of $39.2 million, or $0.92 per diluted share, for the nine months ended September 30, 2019.

Non-GAAP Results

Non-GAAP revenues for the third quarter of 2020 were $213.7 million, down $15.1 million, or 6.6%, from the third quarter of 2019. Non-GAAP revenues for the nine months ended September 30, 2020 were $643.0 million, down $5.7 million, or 0.9%, from the nine months ended September 30, 2019.

Non-GAAP net income for the third quarter of 2020 was $26.2 million, or $0.60 per diluted share. This compares to non-GAAP net income of $32.7 million, or $0.76 per diluted share, for the third quarter of 2019.

Non-GAAP net income for the nine months ended September 30, 2020 was $71.1 million, or $1.63 per diluted share. This compares to non-GAAP net income of $87.2 million, or $2.04 per diluted share, for the nine months ended September 30, 2019.

Non-GAAP net income for each period excludes, when applicable, the effect of share-based compensation expense, amortization expense of acquired intangible assets, acquisition-related expenses, restructuring and severance-related expenses, tax restructuring benefits and expenses, amortization of debt issuance costs, and amortization of discount on convertible senior notes.

“We are pleased with the solid financial performance this quarter, which exceeded the high end of our guidance ranges,” said Randall Lipps, chairman, president, chief executive officer, and founder of Omnicell. “We continued to increase new customer wins and bookings, particularly with the top 300 U.S. health systems, as our customers embrace the vision of the autonomous pharmacy. We believe this renewed momentum underscores the critical importance of Omnicell’s solutions, and we remain confident we are well-positioned to continue executing on our strategy and drive significant long-term value for shareholders, healthcare partners, and patients.”

2020 Guidance

For the fourth quarter of 2020, the Company expects non-GAAP total revenues to be between $238 million and $244 million. The Company expects non-GAAP product revenues to be between $165 million and $170 million, and non-GAAP service revenues to be between $73 million and $74 million. The Company expects fourth quarter 2020 non-GAAP earnings to be between $0.72 and $0.77 per share.

For the full year 2020, the Company expects product bookings to be between $865 million and $900 million. The Company expects non-GAAP total revenues to be between $881 million and $887 million. The Company expects non-GAAP product revenues to be between $626 million and $631 million, and non-GAAP service revenues to be between $255 million and $256 million. The Company expects 2020 non-GAAP earnings to be between $2.35 and $2.40 per share.

The table below summarizes Omnicell's 2020 guidance outlined above.

 

Q4'20

2020

Product Bookings

Not provided

$865 million - $900 million

Non-GAAP Total Revenues

$238 million - $244 million

$881 million - $887 million

Non-GAAP Product Revenues

$165 million - $170 million

$626 million - $631 million

Non-GAAP Service Revenues

$73 million - $74 million

$255 million - $256 million

Non-GAAP EPS

$0.72 - $0.77

$2.35 - $2.40

Given the COVID-19 dynamics and momentum we have experienced in the business, we have decided to accelerate our planning process for 2021. As a result, we are now able to provide our preliminary full year revenue guidance. The Company expects 2021 preliminary non-GAAP total revenues to range between $1.015 billion and $1.045 billion.

While we are aware of the recent increase in COVID-19 cases in the United States, we believe, in speaking with our customers, that they are well prepared and believe they will continue to resume more normal business conditions. However, our bookings and revenue in future periods could be impacted if hospitals need to materially change their operations in order to address a continued increase in COVID-19 cases.

Coronavirus (COVID-19) and Operations Update

Keeping in mind our role in the healthcare industry, we are continuing to closely monitor the COVID-19 pandemic. Our top priorities remain protecting the health and well-being of our customers, their patients, and our employees, while maintaining business continuity to meet the needs of our customers. In order to operate in a safe manner, we continue to follow the health and safety guidelines of the U.S. Centers for Disease Control and Prevention and local and state public health departments in each of the regions where we operate. Our manufacturing and distribution facilities have remained open due to our qualification as an essential business and to date, we have not experienced disruptions in our manufacturing activities. The vast majority of our non-manufacturing and non-customer facing personnel continue to work from home. In addition, to minimize the need for on-site visits, we are providing remote service and installation options, training programs, and product demonstrations for our customers, leveraging technology to enable our sales team to operate in a remote sales environment. Although we have not experienced disruptions in our supply chain to date, we cannot predict how long the pandemic and measures intended to contain the spread of COVID-19 will continue.

As a result of the pandemic, health systems have faced increased costs, decreased revenues and cash flow challenges due to cancelled or postponed elective procedures and other reduced demand. We believe these financial pressures led our customers to delay or defer purchasing decisions and/or implementation of our solutions during the first half of 2020, which resulted in delayed implementations and lower product bookings compared to management’s expectations prior to the COVID-19 outbreak. In the third quarter of 2020, we began to see our customers returning to more normal business operations, with increases in elective surgeries and hospital admissions as well as spending returning to pre-pandemic purchasing patterns consistent with long-term strategic investments. This enabled us to resume implementations that were delayed in the first half of the year, providing more visibility into product bookings for the fourth quarter of 2020. As a result, we now expect product bookings for 2020 to return to levels consistent with management’s expectations prior to the pandemic.

In response to the COVID-19 pandemic, we have implemented and continue to focus on cost reduction initiatives in all aspects of our business and remain mindful of the uncertainty related to the pandemic.

While our fiscal year 2020 results will be impacted by the challenges and opportunities brought on by the COVID-19 pandemic, we remain confident in the overall health of our business, in our ability to navigate through these unusual times, and in our ability to continue to execute on our long-term strategy, as we believe our customers and potential customers are increasingly embracing the vision of a fully autonomous pharmacy. However, the full impact of the COVID-19 pandemic and related containment measures cannot be predicted and to date, the COVID-19 pandemic and related containment measures have adversely affected and may continue to adversely affect, perhaps materially, our business, results of operations, financial condition, and liquidity.

Omnicell continues to deliver innovation that supports the autonomous pharmacy, an industry movement to leverage automation, intelligence, and technology-enabled services designed to achieve zero-error medication management. During this quarter, the Company accelerated the shift to cloud-based services with the launch of Omnicell One, a predictive intelligence solution that provides visibility and comprehensive data analytics to drive medication supply chain optimization opportunities. The Company also completed the acquisition of Pharmacy Strategies Group’s 340B Link business, adding a comprehensive suite of software-enabled services to help manage compliance with the 340B drug pricing program and the associated eligible drug cost savings. These solutions will support health system partners in managing an increasingly complex pharmacy supply chain.

Omnicell Conference Call Information

Omnicell will hold a conference call today, Tuesday, October 27, 2020 at 1:30 p.m. PT to discuss third quarter 2020 financial results. The conference call can be monitored by dialing 1-800-696-5518 within the U.S. or 1-706-758-4883 for all other locations. The Conference ID # is 7580519. Internet users can access the conference call at http://ir.omnicell.com/communications/events-presentations. A replay of the call will be available today at approximately 4:30 p.m. PT and will be available until 11:59 p.m. PT on November 24, 2020. The replay access numbers are 1-855-859-2056 within the U.S. and 1-404-537-3406 for all other locations, Conference ID # is 7580519.

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