Omnicell, Inc. (OMCL)
Q1 2008 Earnings Call
April 22, 2008 4:30 pm ET
Randy Lipps - Executive Chairman, Chief Executive Officer and President
Rob Seim - Chief Financial Officer and Vice President of Finance.
Steven Crowley – Craig-Hallum Capital
Tom Gallucci – Merrill Lynch
Newton Juhng – BB&T Capital Markets
Alan Fishman – Thomas Weisel Partners
Sean Wieland – Piper Jaffray
Leo Carpio - Caris
Previous Statements by OMCL
» Omnicell, Inc. Q4 2008 Earnings Call Transcript
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Thank you. Good afternoon and welcome to the Omnicell 2008 first quarter results conference call. Joining me today is Randall Lipps, Omnicell President and CEO. You can find our results in the Omnicell’s first 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 “Risk Factors” and under the heading “Management's Discussion and Analysis of Financial Condition and Results of Operation” and the “Omnicell Annual Report” on Form 10-K filed with the SEC on March 14th, 2008, as well as our more recent filings 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 April 21, 2008 and all forward-looking statements made on this call are made based on Omnicell's beliefs as of this date only. Future events or simply the passage of time may cause these beliefs to change.
Finally, this conference call is the property of Omnicell Incorporated and any taping or the duplication or rebroadcast without the expressed written consent of Omnicell is prohibited.
During the call today, I will start with an overview of the financial results for the quarter, followed by Randy who will cover some of the quarter’s business highlights. I will then discuss Omnicell’s guidance for 2008. After that, we will open the call to your questions. In the first quarter of 2008, we again posted record revenues. Profits from operations were up from this time last year.
We did see some new and large orders slowdown towards the end of the quarter and we believe the rate in which orders are closing is being affected by conditions in the capital markets and the macroeconomic environment. While we had a very strong start to the first quarter, we saw some customers, particularly new customers, pause on the timing of their acquisition decisions towards the end of the quarter.
Our financial results for the first quarter demonstrate our ability to moderate swings in our business, cause the economic disruptions. Along with revenue slightly higher than expectations, our non-GAAP earnings were $0.19 per share, excluding stock compensation expenses $0.01 per share above analyst expectations and as a reminder, we are now fully taxed as compared to 2007 when we enjoyed a benefit from tax valuation allowances.
EBITDA is up 40% year to year. We remain within our backlog objective range of six to nine months of forward revenue. Backlog has allowed us stability in our financial performance over the past two quarters when our order rates have fluctuated, and we were affected by economic conditions. Our backlog has also afforded us time to assess those economic conditions.
We believe that there has been no change in our competitive position during the quarter. We also did not experience any degradation of pricing or other business terms during Q1, but, postponement of buying decisions did affect percentage of business from new customers.
While we have been named, “vendor of choice” in several new accounts, newer customers accounted for 21% of our bookings in Q1, which is lower than our historical average. New customers are comprised to the combination of competitive conversions and greenfield accounts and greenfield accounts are those customers installing automation for the first time. In Q1, about two-thirds of the new business came from greenfield wins. We also saw very few initial hospital orders from the new multi-hospital accounts that we signed in the second half of 2007 as these product acquisition decisions have also been postponed. These orders and more are still in our sales opportunity pipeline, which is stronger than it has ever been.
As in previous quarters, we have continued to add customer installation and support staff to handle the growth from our new customers and to support our increased install base. As I reported midway to Q1, our hiring has been less than we originally predicted and during Q1, we added 15 new positions. We also converted 32 temporary employees already in our workforce, to permanent positions bringing our regular full-time headcounts to 853.
Now, I would like to discuss our first quarter financial performance. I will first discuss our financial performance in accordance with generally accepting accounting principles with year-to-year comparisons. Revenue for the first quarter of fiscal 2008 was, $62.1 million, up 29% year-over-year and up 7% from the fourth quarter of 2007. On a GAAP basis, gross margins were down as expected quarter to quarter to 52.1% due to the dilutive effect of the acquisition of the Rioux Vision mobile cart business. This compares to 52.4% posted in Q1 of last year.