OMCL

Omnicell, Inc. (OMCL)

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Omnicell, Inc. (OMCL)

Q3 2010 Earnings Call Transcript

October 27, 2010 4:30 pm ET

Executives

Rob Seim – VP, Finance & CFO

Randall Lipps – Chairman, President & CEO

Analysts

Matthew Hewitt – Craig-Hallum Capital

Newton Juhng – FBR Capital Markets

Steve Halper – Stifel Nicolaus

Leo Carpio – Caris & Company

Gene Mannheimer – Auriga

Mohan Naidu – Piper Jaffray

Glenn Garmont – ThinkEquity

Ernest Segundo – Pandion Capital

Presentation

Operator

Good afternoon. My name is Veneta, and I will be your conference operator today. At this time, I would like to welcome everyone to the Omnicell's third quarter earnings call. All lines have been placed on mute to prevent any background noise. After the speakers' remarks, there will be a question-and-answer session. (Operator instructions) Thank you. I would now like to turn the call over to Mr. Rob Seim. Sir, you may begin.

Rob Seim

Thank you and good afternoon, and welcome to the Omnicell 2010 third quarter results conference call. Joining me today is Randall Lipps, Omnicell Chairman, President and CEO. You can find our results in the Omnicell third quarter press release posted in the Investor Relations section of our Website at www.omnicell.com.

This call will include forward-looking statements subject to risks, uncertainties, and other factors that could cause actual results to differ materially from those expressed or implied. For a more detailed description of the risks that impact these forward-looking statements, please refer to the information under the heading Forward-Looking Statements in our press release today and under the headings Risk Factors and Management's Discussions and Analysis of Financial Conditions and Results of Operations, in the Omnicell Annual Report on Form 10-K filed with the SEC on February 24th, 2010, as well as more recent reports filed with the SEC.

Please be aware that you should not place undue reliance on any forward-looking statements made today. The date of this conference call is October 27th, 2010. And all forward-looking statements made on this call are made based on the beliefs of Omnicell as of this date only. Future events or simply the passage of time may cause these beliefs to change. Finally, this conference call is a property of Omnicell Incorporated and any taping, other duplication or rebroadcast without the expressed written consent of Omnicell is prohibited.

But today, we have quite a lot to talk about, in addition to our quarterly earnings, we will be discussing the acquisition we just completed and other one-time events announced during the quarter. Randy is going to start the call today with an overview of the acquisition and some updates on recent Omnicell wins in the market. I will then cover the expected financial implications of the acquisition and the results for the quarter, followed by our guidance for the remainder of 2010. And following that, we will take questions. Randy?

Randall Lipps

Good afternoon and thank you for joining us today. Omnicell enjoyed success in the marketplace during the third quarter, with strong orders across our entire customer base. Last month, we announced that the Sentara Health Group chose Omnicell medication control systems to replace their existing installation. Sentara, an eight hospital system with over 2,000 beds, and the largest integrated delivery network in Virginia selected our systems for their advanced features and our superb service and support record.

In August, we announced that the Wellmont Health System began their conversion to Omnicell, OmniRx automated medication systems, SinglePointe software to manage their patient specific medications and seizure workstations and other solutions to streamline medication management throughout its facilities. Wellmont, a 1,100 bed system in Eastern Tennessee, is upgrading seven of its hospital facilities and chose Omnicell solutions based on long-term cost of ownership and the most advanced technology when compared to competing solutions.

And in September, we were happy to report that Deaconess Health System chose to replace its current vendor with Omnicell. We are particularly honored to have been selected at Deaconess’ partner of choice as it is an industry-recognized system of five acute care facilities in southwestern Indiana whose use of electronic health records have been rated among the top 2% of hospitals in the U.S.

Omnicell solutions are designed to be easily integrated and interoperable with Deaconess’ already existing IT network. We were specifically selected for our strong reporting tools and a clear solutions upgrade that combine a solid long-term investment with a high level of efficiency and patient safety.

In addition to these wins and others we announced in the last three months, we saw resurgence of U.S. federal government business, including orders from some of the largest Veterans Administration hospitals in the systems. Also during the quarter, we announced in addition to our product offering in the field of data analytics and reporting with the acquisition of Pandora Data Systems in September. Pandora is a leading provider of reporting tools used with automated dispensing systems and a well recognized and regarded brand among hospital directors of pharmacy.

Pandora has over 700 customers using their sophisticated reporting and analytics tools in conjunctions with most brands of medication control systems. Pandora products have grown to be an integral part of meeting regulatory requirements for many hospital customers. We plan to continue the investment Pandora has made in their platform for the benefit of all users of automated medication dispensing systems regardless of the brand of dispensing system in use. Pandora is located in Scotts Valley, California and employs 15 people. While a smaller acquisition, Pandora is another step in our strategy to offer a broad array of more advanced systems that improve hospital workflow and solve safety, efficiency, and regulatory compliance challenges for our customers.

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