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Omnicell Inc. Reports Operating Results (10-Q)
Posted by: gurufocus (IP Logged)
Date: May 8, 2012 05:36PM
Omnicell Inc. (OMCL) filed Quarterly Report for the period ended 2012-03-31.
Highlight of Business Operations:revenue of $48.5 million as compared with 58.6% on revenue of $47.3 million in the fourth quarter of 2011. Service gross margins also declined, to 48.2% on revenue of $15.6 million as compared to 52.2% margins on $15.7 million in revenue in the fourth quarter of 2011.
Research and Development. Research and development expenses increased by $1.7 million, or 34.2%, in the three months ended March 31, 2012 as compared to the same period in 2011. Research and development expenses represented 10.1% and 8.5% of total revenues in the three months ended March 31, 2012 and 2011, respectively. The increase was due primarily to a $1.8 million decrease in software capitalization, as there were no expenses eligible for capitalization in the current period, and an increase of $0.5 million in consulting, offset by a decrease of $0.6 million of salary related expenses. The amount of research and development expense can fluctuate based on the amount of prototype expenses for hardware and/or the amount of capitalized software development costs in any given quarter.
expenses represented 39.9% and 45.1% of total revenues in the three months ended March 31, 2012 and 2011, respectively. Selling, general and administrative expenses for the three months ended March 31, 2012 as compared to the same period in 2011 included increased salary and benefits of $1.4 million, primarily related to net increases in sales and marketing staff, offset by the reduction due to the non-recurrence of last year's Medacist litigation settlement accrual of $1.0 million, with related legal fees of $0.5 million.
We had cash and cash equivalents of $201.4 million at March 31, 2012, as compared to $191.8 million at December 31, 2011, plus an additional $8.1 million of short term investments at both March 31, 2012 and December 31, 2011. All of our cash is in low risk short term money market funds or demand deposits. The $8.1 million of short term investments held at March 31, 2012 consisted of California revenue anticipation notes which are scheduled to mature June 26, 2012. We have no long term investments. While in the future we may need to seek additional financing to meet our working capital needs and to finance capital expenditures, as well as to fund operations or potential acquisitions, we believe our current cash and cash equivalent balances and cash flows generated by operations will be sufficient to satisfy our anticipated cash needs for working capital and capital expenditures for at least the next twelve months. Currently, we have cash, cash equivalents and short term investments of $209.5 million of which we will use $156.0 million cash, subject to adjustments, on the pending MTS acquisition as described in Note 14 "Subsequent Events".
Operating activities provided $7.3 million of cash during the three months ended March 31, 2012 as compared to $3.1 million for the three months ended March 31, 2011. The main drivers for the $4.2 million increase in cash generated from operations were a $1.7 million increase in net income, a $6.9 million increase from the change in inventories primarily the result of a non-recurring increase in 2011 in anticipation of new product introductions, partially offset by a decrease of $3.2 million in cash generated through changes in accounts receivable. Other balance sheet changes impacting the change in cash generated from operating activities were a $2.4 million increase from the change in deferred gross profit and a $1.7 million increase from the change in accrued compensation, offset by a $2.5 million decrease from the change in net investment in sales-type leases, and a $2.9 million decrease from the change in accrued liabilities and accounts payable.