Omnicell(US:OMCL)2020-05-09 12:58Financial Data and Key Metrics Changes - The first quarter of 2020 revenue was $230 million, up 13% compared to the first quarter of 2019, primarily due to increased XT Series implementations and annual service revenue from a larger installed base [28] - GAAP earnings per share for the first quarter was $0.26, up from $0.08 in the same period last year, largely due to lower income tax expenses [32] - Non-GAAP EPS for the first quarter was $0.66, compared to $0.61 in the same period last year, representing an 8% year-over-year increase [35] - Cash balance as of March 31, 2020, was $104 million, down from $127 million at the end of 2019, with the company now debt-free [36][40] Business Line Data and Key Metrics Changes - Approximately 24% of the existing installed base of previous generations for automated dispensing cabinets have booked orders to upgrade to the new XT Series, down from 30% at the same time last year [29] - The company experienced minimal impact on revenue and profit from COVID-19 in Q1, but bookings for new sales began to slow in the second half of March [22][31] Market Data and Key Metrics Changes - Health systems are facing increased costs due to COVID-19, leading to decreased revenue from postponed elective surgeries and cash flow challenges [23] - The company has not experienced significant disruption in its supply chain and has maintained appropriate inventory levels to meet customer demand [21] Company Strategy and Development Direction - The company remains committed to its long-term strategy of delivering automation, intelligence, and services to transform the pharmacy-care delivery model [11] - The company believes that COVID-19 has made its solutions more relevant, particularly in managing medication supply chains and supporting healthcare systems during the pandemic [12][24] Management's Comments on Operating Environment and Future Outlook - The company anticipates that COVID-19 demand disruptions will negatively impact 2020 results compared to prior guidance, and it cannot provide meaningful near to medium-term direction at this time [24][43] - The company has a healthy backlog and a strong customer base, with approximately 40% of its business being recurring revenue, which is expected to remain stable during the pandemic [25][26] Other Important Information - The company has implemented various cost-saving measures to preserve liquidity, including the elimination of non-essential travel and hiring delays [42] - The company incurred approximately $1.5 million in additional costs related to airfreight due to COVID-19 [72] Q&A Session Summary Question: Where do you stand on the five-year targets issued in December? - The company believes the long-term strategy remains unchanged and the long-term drivers are still valid [47] Question: Will you be able to implement more resources to drive implementations faster post-recovery? - The company can ramp up resources to meet demands, but implementation timelines will vary by location due to differing COVID-19 impacts [49] Question: Was there a rush to complete implementations at the end of the quarter? - Implementation activity was provider-dependent, with some wanting to expedite while others delayed due to the pandemic [51] Question: How has the relaxation of stay-at-home orders affected access for implementations? - Access remains cautious, with hospitals still limiting outside personnel despite some reopening for elective surgeries [53] Question: Do you expect booking activity to recover sooner than implementations? - It is difficult to predict, as hospital personnel necessary for implementations are still not fully back on-site [55] Question: Have operational changes during the crisis led to any lasting improvements? - The company has accelerated virtual installations and training, which may improve customer experience moving forward [63][68]