Omnicell, Inc.

Ladies and gentlemen, thank you for standing by, and welcome to the OmniCell fourth quarter earnings conference call. At this time, all participants' lines are in a listen-only mode. After the speaker's presentation, there will be a question and answer session. To ask a question during the session, you will need to press star 1 on your telephone. If you require any further assistance, please press star 0. I would now like to hand the conference over to your speaker today, Ms. Kathleen Nemeth. Thank you. Please go ahead.

Thank you, operator. Good afternoon and welcome to the OmniCell fourth quarter and full year 2020 financial results call. On the call with me today are Randall Lipps, OmniCell founder, chairman, president, and CEO, Scott Seidelman, executive vice president and chief commercial officer, and Peter Kuypers, executive vice president and chief financial officer. 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 in our press release today in the OmniCell Annual Report on Form 10-K filed with the SEC on February 26, 2020, and in other 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 February 1st, 2021, and all forward-looking statements made on this call are based on the beliefs of OMISO as of this date only. Future events or simply the passage of time may cause these beliefs to change, and we undertake no obligation to update these forward-looking statements. Finally, this conference call is the property of OmniCell Inc., and any taping, other duplication, or rebroadcast without express written consent of OmniCell is prohibited. Randall will provide an update on our business. After Randall's remarks, Scott will provide perspective on the healthcare industry, our market momentum, and key customer wins. Peter will cover our results for 2020 and our guidance for 2021. Our 2020 fourth quarter and full year financial results are included in our earnings announcement, which was released earlier today and is posted in the investor relations section of our website at omnicel.com. Our prepared remarks will also be posted in the same section. Additionally, we'd like to remind you that during this call, we will discuss some non-GAAP financial measures. Reconciliations of these non-GAAP measures to the most comparable GAAP financial measures are included in our earnings announcement. Let me now turn the call over to Randall.

Good afternoon, and thank you for joining us today. 2020 was an outstanding year for OmniCell as we continued to drive growth in our business, execute well on our strategies, and deliver tremendous value to our health system partners, their patients, and our shareholders. I am so proud of all of our employees who consistently put our health systems partners first during this unprecedented year. Our fiscal 2020 results are at the high end of or above the prelim results we announced in mid-January. We are very pleased with our performance, which exceeded our pre-pandemic bookings guidance, and the guidance we provided in October 2020 across all key metrics, including revenues, total product bookings, and non-GAAP EPS. I'm especially pleased to note that we ended the year with record product bookings of more than $1 billion. We achieved substantial increases in new customer wins, underscoring the robust and growing demand for our solutions. At year end, well over half of the top 300 health systems in the US were OmniCell customers. And we had long-term sole source contracts with 145 of them, including two new customers added in the fourth quarter. Despite the ongoing pandemic and the disruption it caused across the healthcare industry in the first half of the year, we also made strong progress advancing our long-term strategic priorities. Notably, we expanded our autonomous pharmacy portfolio with the strategic and accretive acquisition of PSG's 340B link business, now called OmniCell 340B. We also accelerated our shift to cloud-based solutions and tech-enabled services through the launches of OmniCell 1 and central pharmacy dispensing services. OmniCell 1 is a cloud-based platform that connects nearly all of our devices and is a compelling differentiator for OmniCell. This is underscored by the rapid growth we saw in 2020 in our SaaS subscription software and tech-enabled services bookings, which we significantly exceeded plan for the year. Now with a robust portfolio of tech-enabled services that complement and enhance our core hardware products, We continue to leverage our market leading position and our large installed base to further drive reoccurring revenue growth in advanced services. The rapid growth in this important category is positioned to continue for years to come. In fact, we are forecasting 50% CAGR in advanced services from 2020 through 2025. Most importantly, the pandemic has shown a spotlight on the importance of pharmacy management, highlighting the need for increased digitization and virtualization of processes throughout the healthcare system and underscoring the strategic relevance of omni-cell solutions. There is widespread and growing acknowledgement that more sophisticated automation and digitization capabilities enable healthcare providers to focus more on patient care and reduce costly errors. And we are in a unique position to enable our customers to do just that. We believe that we are indeed a category creator in that respect. The pandemic made it clear to providers that they need an entire category of solutions to effectively manage the pharmacy supply chain. we expect to continue to see demand for autonomous pharmacy solutions. Now, I also want to briefly touch on our approach to ESG matters and the actions we are taking on this front. But first, let me emphasize that we view OmniCell as a company with a social mission. Our focus on reinventing the pharmacy care delivery model is designed to dramatically improve health outcomes, and lower health care costs for everyone. Our teams are motivated by knowing that our work to improve medication management has a tangible, real-world impact on health care workers, patients, and communities, and that these are not just numbers. These are our friends, our colleagues, and our dear families. We also recognize that we are accountable not only to our customers and our shareholders, but also to the global community. With this in mind, in December, we published initial ESG disclosure and performance information aligned to SASSB, GCFD, and GRI guidelines. Among other things, we are focused on innovating to drive sustainability across our business, ethically and responsibly sourcing materials by adhering to internationally recognized OECD guidance, and elevating our diversity and our inclusion initiatives. We believe there is a better way to do business. We're excited about the journey we are beginning and look forward to sharing more in the spring when we release our NARGL corporate responsibility report. Now, looking ahead, I'm confident we are very well positioned to continue to drive growth in our business and to deliver value for our shareholders as we support our healthcare partners on their journey to the autonomous pharmacy. We're excited to continue building on our momentum in 2021 and beyond. While Peter will review the 2020 results and the 2021 outlook in more detail, I wanted to highlight that we are reaffirming the 2021 guidance and long-term targets we provided last month. In terms of our 2025 financial roadmap, we are targeting a 14 to 15% compounded total annual revenue growth rate from 2021 to 2025. Over the same period of time, we are also targeting an expansion of our non-GAAP EBITDA margin from 21% in 2021 to 25% by 2025, representing a margin expansion of approximately 400 bps. Our strong position in the market, growing customer base, and focus on innovation give us confidence that we will be able to achieve these goals. Now, I'd like to turn it over to Scott to discuss the industry and some key customer engagements. Scott?