Omnicell Inc. (OMCL, Financial) filed Quarterly Report for the period ended 2010-03-31.
Omnicell Inc. has a market cap of $411.66 million; its shares were traded at around $12.68 with a P/E ratio of 115.27 and P/S ratio of 1.93. OMCL is in the portfolios of Jim Simons of Renaissance Technologies LLC.
We believe that our gross margins will continue to fluctuate based on the mix of products installed, fluctuation in the percentage of revenues derived from our international business and the related costs and changes in service and installation headcount compared to our revenue level. International business carries lower gross margins because our international distributors bear the cost of installation, support and most of the sales effort, and therefore demand lower pricing. Cash increased during the quarter by $11.4 million on strong cash collections of accounts receivable and cash generated from stock option exercises. Net cash provided by operating activities totaled $7.9 million during the three months ended March 31, 2010.
Cost of product revenues decreased by $1.0 million, or 5.0% in the three months ended March 31, 2010 as compared to the same period in 2009. The decrease was primarily due to a $1.0 million provision for excess and obsolete inventory recorded in the first quarter of 2009.
Research and Development. Research and development expenses increased by $0.6 million, or 14.8% in the three months ended March 31, 2010 as compared to the same period in 2009. Research and development expenses represented 8.4% and 7.6% of total revenues in the three months ended March 31, 2010 and 2009, respectively. The increase was due primarily to a $0.4 million increase in consulting expenses related to new product development.
Selling, General and Administrative. Selling, general and administrative expenses increased slightly in the three months ended March 31, 2010 compared to the same period in 2009. Selling, general and administrative expenses represented 39.7% and 41.2% of total revenues in the three months ended March 31, 2010 and 2009, respectively. Selling, general and administrative expenses for the quarter ended March 31, 2010 as compared with the comparable period a year ago included increased GPO fees of $0.6 million as a result of higher cash collections, increased marketing spending of $0.4 million related to corporate branding activities, reduction in headcount related charges of $0.4 million, and a $0.1 million increase in other related general and administrative expenses offset primarily by a $0.6 million decrease in legal fees related to the settlement of the Rioux litigation, $0.5 million decrease in commissions and $0.4 million decrease in professional fees.
For the three months ended March 31, 2010, we recorded an income tax expense of $0.6 million compared to an income tax benefit of $(0.9) million in the same period last year. The estimated annual effective tax rates were 50.6% and 41.1% for the three months
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Omnicell Inc. has a market cap of $411.66 million; its shares were traded at around $12.68 with a P/E ratio of 115.27 and P/S ratio of 1.93. OMCL is in the portfolios of Jim Simons of Renaissance Technologies LLC.
Highlight of Business Operations:
During the first quarter of 2010 we achieved similar performance levels compared to the fourth quarter of 2009. Product revenue decreased slightly, by $0.6 million, while service revenue increased slightly, by $0.1 million. Overall gross margins improved by 1.1% to 50.9% with product gross margins improving to 54.5% on revenue of $42.3 million as compared with 52.2% on revenue of $42.8 million in the prior quarter. This was offset by lower service gross margins of 38.4% on revenue of $11.9 million as compared with 41.1% margins on $11.8 million in revenue in the prior quarter. The product gross margin increase was driven primarily by product mix and, to a lesser degree, a decrease in international sales where margins tend to be lower, while the decrease in service gross margins was driven by higher cost of service replacement parts.We believe that our gross margins will continue to fluctuate based on the mix of products installed, fluctuation in the percentage of revenues derived from our international business and the related costs and changes in service and installation headcount compared to our revenue level. International business carries lower gross margins because our international distributors bear the cost of installation, support and most of the sales effort, and therefore demand lower pricing. Cash increased during the quarter by $11.4 million on strong cash collections of accounts receivable and cash generated from stock option exercises. Net cash provided by operating activities totaled $7.9 million during the three months ended March 31, 2010.
Cost of product revenues decreased by $1.0 million, or 5.0% in the three months ended March 31, 2010 as compared to the same period in 2009. The decrease was primarily due to a $1.0 million provision for excess and obsolete inventory recorded in the first quarter of 2009.
Research and Development. Research and development expenses increased by $0.6 million, or 14.8% in the three months ended March 31, 2010 as compared to the same period in 2009. Research and development expenses represented 8.4% and 7.6% of total revenues in the three months ended March 31, 2010 and 2009, respectively. The increase was due primarily to a $0.4 million increase in consulting expenses related to new product development.
Selling, General and Administrative. Selling, general and administrative expenses increased slightly in the three months ended March 31, 2010 compared to the same period in 2009. Selling, general and administrative expenses represented 39.7% and 41.2% of total revenues in the three months ended March 31, 2010 and 2009, respectively. Selling, general and administrative expenses for the quarter ended March 31, 2010 as compared with the comparable period a year ago included increased GPO fees of $0.6 million as a result of higher cash collections, increased marketing spending of $0.4 million related to corporate branding activities, reduction in headcount related charges of $0.4 million, and a $0.1 million increase in other related general and administrative expenses offset primarily by a $0.6 million decrease in legal fees related to the settlement of the Rioux litigation, $0.5 million decrease in commissions and $0.4 million decrease in professional fees.
For the three months ended March 31, 2010, we recorded an income tax expense of $0.6 million compared to an income tax benefit of $(0.9) million in the same period last year. The estimated annual effective tax rates were 50.6% and 41.1% for the three months
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