Omnicell, Inc.

Gentlemen, thank you for standing by and welcome to the OmniCell Q3 2021 earnings call. At this time, all participants are in their 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, Kathleen Nemeth. Vice President of Investor Relations. Thank you. Please go ahead, ma'am.

Good morning and welcome to the Omnifil Third Quarter 2021 Financial Results Conference Call. On the call with me today are Randall Lipps, Omnifil Chairman, President, CEO, and Founder, Scott Seidlin, Executive Vice President and Chief Commercial Officer, and Peter Kuipers, Executive Vice President and Chief Financial Officer. Also joining us today is Roxanne Turner, Vice President of Corporate Responsibility, who will share an update on our ESG initiative. This call will contain forward-looking statements, including statements related to financial projections or other statements regarding omni-self plans, objectives, expectations, targets, or outlook that are 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 issued today, in the OmniFIL Annual Report on Form 10-K filed with the SEC on February 24, 2021, 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 November 2, 2021, and all forward-looking statements made on this call are based on the beliefs of OmniCell 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 except as may be required by law. Finally, this conference call is the property of OmniCell and any taping, other duplication, or rebroadcast without the expressly written consent of OmniCell is prohibited. Our results were released earlier this morning and are posted in the Investor Relations section of our website at OmniCell.com. Additionally, we'd like to remind you that during this call, we will discuss some non-GAAP financial measures. Reconciliation of these non-GAAP measures to the most comparable gap financial measures are included in our financial results press release. With respect to forward-looking non-gap measures, such as guidance and targets, we do not provide a reconciliation of forward-looking non-gap measures to the comparable gap measures on a forward-looking basis, as these items are inherently uncertain and difficult to estimate and cannot be predicted without unreasonable effort. I will now turn the call over to Randall.

Good morning, and thank you for joining us today. On today's call, I will walk through the drivers of our strong performance this quarter and our continued progress toward our 2025 growth targets. I would also like to briefly discuss our corporate responsibility initiatives before handing the call to Roxanne Turner, Vice President of Corporate Responsibility, to provide additional color on all the great work the team is doing in this important area. Beginning with our financials, we delivered strong third quarter results, reflecting the continued momentum in our business, as well as solid execution. Overall, we exceeded the top end of our guidance ranges for revenue, non-GAAP EBITDA, and non-GAAP EPS. Our third quarter results included record revenues of $296 million, record non-GAAP EBITDA of $66 million, and record non-GAAP earnings per share of $1.08. I'd also like to highlight that we closed the acquisition of FDS Amplicare in early September. This is a major milestone, and I would like to extend a warm welcome to the employees of FDS. As a reminder of our previously stated five-year outlook, we are targeting a revenue CAGR of 14% to 15% from 2021 to 2025, and expect to reach $1.9 billion to $2 billion of revenue in 2025. We are targeting a non-GAAP operating margin of 21% and a non-GAAP EBITDA margin of 25% by 2025. We believe we are making good progress toward achieving these long-term objectives. While we are mindful that we are not immune to current inflationary pressures in the market, the underlying customer demand for our products and solutions continue to be robust. and we are confident in our ability to successfully navigate this economic cycle. I'd like to discuss a few of the current healthcare trends that we believe OmniCell is well positioned to address, particularly with our advanced services portfolio. First, we believe medication management and adherence is a critical area within healthcare infrastructure. In our view, the pandemic has highlighted the pressing need to invest in intelligent infrastructure, migrate legacy data systems to the cloud, and elevate the role of the pharmacist. Quite simply, the healthcare delivery model is undergoing an historic transformation. We find that the challenges of medication management require automated and intelligent solutions now more than ever before. While many healthcare systems were already looking for ways to improve their care, management, and delivery, we believe the pandemic has accelerated these trends by 5 to 10 years based on our experience. OmniCell is leading the way, and it is clear to us that our customers recognize the benefits of moving their data and workloads to cloud-based systems. We believe OmniCell is uniquely positioned to enable critical advancements in transforming the pharmacy care delivery model and, importantly, improving experiences for care teams and driving better patient outcomes. Another trend that our healthcare system partners and retail customers appear to be facing is the looming labor constraints within healthcare, particularly for nursing and pharmacy staff. At last month's meeting of the Autonomous Pharmacy Advisory Board, nearly all of the chief pharmacy officers on the board reported they were facing staff shortages of pharmacy technicians. Likewise, a nationwide survey conducted in late May by the National Community Pharmacists Association found that nearly 90% of the survey's 278 respondents said they were having trouble hiring enough pharmacy technicians. And it's a similar story with nursing staff. As a category creator of automated medication management, OmniCell solutions are designed to reduce manual and administrative tasks so commissions time can be optimized and devoted more toward patient care. As a result of these trends, we're seeing continued strength in advanced services. This quarter, we saw increased adoption of OmniCell One, a technology-enabled service delivered through the cloud. OmniCell One enables enterprise-wide optimization for medication spend, reduction in medication waste, and improvement in pharmacy labor productivity. It also supports identifying potential diversion activity. We are pleased to report that we now have multiple customers in live deployment. Also this quarter, we are pleased to note that the VA Tucson will be implementing our central pharmacy dispensing system. The VA is the nation's largest integrated healthcare system, and we are proud to support their mission of providing care for our veterans and their families. Enliven Health also had a very strong quarter. With the flu season now in full swing and the COVID-19 booster shots approved for millions of patients nationwide, many pharmacies are grappling with how to manage this increased patient demand. Enliven Health's care scheduler was built for these pharmacy challenges and opportunities. CareScheduler automates the scheduling, patient communications, and the reporting of administering vaccines and point-of-care testing. In the third quarter of 2021, Enliven Health closed a major deal to provide CareScheduler to its longtime partner, Publix, a leading regional chain of grocery stores and pharmacies serving seven southeastern states. Public plans to deploy Care Scheduler to manage its off-site vaccination clinics. Another advanced services highlight was the strong performance this quarter from our 340B service solution. Our teams continue to make excellent progress toward developing cross-selling opportunities within our channel and successfully closed on several large deals during the quarter. Turning to our health system partners, we signed three net new long-term sole source agreements, bringing our total to 151 health system partners. With these latest signings, all of our top 10 largest customers have now agreed to partner with us in long-term agreements. We believe this is a testament to our innovation roadmap led by our advanced services portfolio. our consultative approach to redesigning pharmacy workflows, and our customers' confidence in our ability to help them advance toward a zero-error, zero-waste, and highly efficient pharmacy delivery model. We are humbled by their reliance on us and are motivated by our mission to be the clinicians' most trusted partner for medication management and adherence. Now, as I noted, I'm joined today by our Vice President of Corporate Responsibility, Roxanne Turner, who will speak to our commitment and approach to corporate responsibility. We're excited to convene an executive steering committee of operational leaders who are accountable for developing strategies and setting targets to achieve our ESG objectives. I'll now hand it over to Roxanne to discuss these initiatives in a bit more detail. Roxanne?