Omnicell, Inc.

Good day, everyone, and welcome to OmniCell Inc's Q2 2022 Financial Results Conference Call. At this time, all participants are in a listen-only mode. After the speaker's presentation, there will be a question and answer session. To ask a question, you'll need to press star 1 on your telephone keypad. For operator assistance at any time, please press star 0. I would now like to turn the call over to Kathleen Nemeth, Senior Vice President, Investor Relations. Please go ahead, Ms. Nemeth.

Good afternoon and welcome to the OmniCell Second Quarter Financial Results Conference Call. On the call with me today are Randall Lipps, OmniCell Chairman, President, CEO and Founder, Scott Seidelman, Executive Vice President and Chief Commercial Officer, and Peter Kuipers, Executive Vice President and Chief Financial Officer. This call will contain forward-looking statements, including statements related to financial projections, or other statements regarding OmniCell's plans, objectives, expectations, targets, or outlook, and statements relating to the impacts of the previously disclosed ransomware incident 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 OmniCell Annual Report on Form 10-K filed with the SEC on February 25, 2022 and in more recent reports filed with the SEC. Please be aware that you should not place under reliance on any forward-looking statements made today. All forward-looking statements speak only as of the date hereof or the date specified on the call. Except as required by law, we do not assume any obligation to update or otherwise release publicly any revisions to our forward-looking statements. Our results were released this afternoon and are posted in the Investor Relations section of our website at ir.omnisale.com. 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 financial results press release issued today. With respect to forward-looking non-GAAP measures, such as guidance and targets, we do not provide a reconciliation of forward-looking non-GAAP measures to the comparable GAAP measures on a forward-looking basis, as these items are inherently uncertain and difficult to estimate and cannot be predicted without unreasonable effort. In addition, we do expect to host an Investor Day on September 20th 2022. Additional details regarding this event will be provided at a later date, and we hope to see many of you there. With that, I will turn the call over to Randy.

Thank you, Kathleen. Good afternoon, and thank you for joining us today. We continued to see strength in our overall business in the second quarter with good customer demand and excellent work by our team. including ongoing navigation of inflationary pressure and other macroeconomic headwinds, as well as our response to the ransomware incident that we disclosed in May. Our healthcare system partners and retail customers continue to recognize the value OmniCell provides in modernizing and expanding medication management capabilities, and this is helping to drive our results. OmniCell's comprehensive medication management solutions continue to resonate strongly with our customers, and we believe that together we are transforming the pharmacy care delivery model. To further advance this model, we continue to work toward creating a single cloud-based platform designed to enable SAS and tech-enabled pharmacy operations. We remain committed to advancing our strategy to transform the pharmacy care delivery model and meeting the needs of our partners and customers. For the second quarter 2022, we delivered total revenues of $331 million, non-GAAP EBITDA of $56 million, and non-GAAP earnings of $0.84 per share. As Peter will discuss in more detail, we experienced some delays in implementations during the second quarter as a result of the ransomware incident, although we now expect these implementations to occur in the second half of this year. Without the impact of the ransomware incident, we believe we would have achieved, if not exceeded, the top end of our revenue guidance range in the second quarter. As we noted in our Form 8K file with the SEC this afternoon, there were no known disruptions to the operation of our customers' medication devices as a result of the ransomware incident. And there is no ongoing impact on our capability to provide OmniCell products and services. Security is a top priority for OmniCell, and we have taken a series of measures designed to safeguard the integrity of our systems. We have greatly appreciated the continued support of our customers and employees as we worked through the incident. As we look at the broader macroeconomic landscape, we are monitoring acute care CapEx and operating expense budgets carefully. Overall, we continue to see resiliency and demand for OmniCell's products and services due to what we believe is the mission critical role they play in improving patient care. Coming out of the COVID-19 pandemic, healthcare system personnel are facing higher levels of fatigue. At the same time, healthcare systems are operating in an uncertain economic environment. COVID-19 played a big part in highlighting what we view as the need for more automation of and investment by hospitals and medication management as a way to optimize staff, increase efficiency, and reduce labor gaps. Although we're hearing there are some signs of labor costs beginning to ease for our customers, the ability to source labor continues to be a challenge for many. We believe that OmniCell, with our unparalleled long-term customer relationships, is uniquely positioned to understand and address these pain points to help our customers mitigate ongoing labor challenges. Generally, demand for medication management infrastructure is resilient, especially in the areas that appear to drive value for our customers and help to mitigate challenges such as labor shortages. Specifically, we are experiencing strong demand for our newly launched IVX station, which provides a differentiated approach that is designed to enable IV compounding at scale, reduce errors associated with manual processes, and reduce the high cost of outsourcing. OmniCell has been through many different market cycles since our founding over 30 years ago. As a company, we have navigated each of those cycles and have evolved our business to ensure we continue to meet our customers' needs. I confidently believe that we are well positioned to navigate the current business cycle. OmniCell has a long-standing, close relationships with our customers and our solutions are tightly integrated with their systems. We believe that our customers have come to realize that they not only want our products, but also our services. They, therefore, appear more willing to partner with us. We also believe that we have learned to recognize early signs of shifts in the industry landscape and are better able to leverage our relationships to have open conversations with our customers so that we can orient our solutions and our support within their frameworks. Before I wrap up, I also want to highlight the continued enhancement of our corporate responsibility and ESG efforts. As part of our OmniCell CARES program, this quarter we launched Your Cause, our giving and volunteering platform that allows OmniCell to focus and increase our social impact. We also introduced paid volunteer time off, as well as OmniCell's matching program. which maximizes our employees' charitable impact on our communities. I'm proud of OmniCell's ranking among the top most transparent companies in the world as a result of our 2021 Corporate Responsibility Report, and we are committed to the continuous improvement of our ESG program and efforts. To conclude, we delivered solid results through the first half of this year. We appear to have commercial momentum, we have a healthy backlog, and we are seeing good demand, which we believe supports us reaffirming our outlook for the full fiscal year. As we look ahead, we think OmniCell continues to be uniquely positioned to enable the digital transformation across the entire medication management continuum which we expect will continue to drive profitable growth and long-term value creation. Now, with that, I'd like to turn it over to Scott.