x
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QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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o
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TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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Delaware
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94-3166458
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(State or other jurisdiction
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(I.R.S. Employer
|
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of incorporation or organization)
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Identification No.)
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Large accelerated filer
o
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Accelerated filer
x
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Non-accelerated filer
o
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Smaller reporting company
o
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(Do not check if a smaller reporting company)
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Page
number
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||
June 30,
2010
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December 31,
2009
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|||||||
(unaudited)
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(1) | |||||||
ASSETS
|
||||||||
Current assets:
|
||||||||
Cash and cash equivalents
|
$ | 185,156 | $ | 169,230 | ||||
Accounts receivable, net of allowances of $970 and $868 at June 30, 2010 and December 31, 2009, respectively
|
37,986 | 40,826 | ||||||
Inventories
|
9,735 | 10,502 | ||||||
Prepaid expenses
|
7,950 | 8,780 | ||||||
Deferred tax assets
|
15,711 | 15,247 | ||||||
Other current assets
|
5,908 | 6,159 | ||||||
Total current assets
|
262,446 | 250,744 | ||||||
Property and equipment, net
|
13,729 | 13,209 | ||||||
Non-current net investment in sales-type leases
|
10,135 | 10,104 | ||||||
Goodwill
|
24,982 | 24,982 | ||||||
Other intangible assets
|
3,270 | 4,233 | ||||||
Non-current deferred tax assets
|
9,807 | 9,666 | ||||||
Other assets
|
9,125 | 9,322 | ||||||
Total assets
|
$ | 333,494 | $ | 322,260 | ||||
LIABILITIES AND STOCKHOLDERS’ EQUITY
|
||||||||
Current liabilities:
|
||||||||
Accounts payable
|
$ | 9,968 | $ | 10,313 | ||||
Accrued compensation
|
6,025 | 8,095 | ||||||
Accrued liabilities
|
13,115 | 11,997 | ||||||
Deferred service revenue
|
14,777 | 14,457 | ||||||
Deferred gross profit
|
12,854 | 13,689 | ||||||
Total current liabilities
|
56,739 | 58,551 | ||||||
Long-term deferred service revenue
|
19,656 | 20,810 | ||||||
Other long-term liabilities
|
657 | 595 | ||||||
Total liabilities
|
77,052 | 79,956 | ||||||
Stockholders’ equity:
|
||||||||
Total stockholders’ equity
|
256,442 | 242,304 | ||||||
Total liabilities and stockholders’ equity
|
$ | 333,494 | $ | 322,260 |
Three Months Ended June 30,
|
Six Months Ended June 30,
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|||||||||||||||||||
20 | 2010 | 2009 | 2010 | 2009 | ||||||||||||||||
Revenues:
|
||||||||||||||||||||
Product revenues
|
$ | 42,023 | $ | 41,983 | $ | 84,318 | $ | 84,278 | ||||||||||||
Services and other revenues
|
12,670 | 10,660 | 24,535 | 20,569 | ||||||||||||||||
Total revenues
|
54,693 | 52,643 | 108,853 | 104,847 | ||||||||||||||||
Cost of revenues:
|
||||||||||||||||||||
Cost of product revenues
|
19,009 | 19,175 | 38,274 | 39,455 | ||||||||||||||||
Cost of services and other revenues
|
6,816 | 6,539 | 14,125 | 13,434 | ||||||||||||||||
Restructuring charges
|
— | — | — | 1,209 | ||||||||||||||||
Total cost of revenues
|
25,825 | 25,714 | 52,399 | 54,098 | ||||||||||||||||
Gross profit
|
28,868 | 26,929 | 56,454 | 50,749 | ||||||||||||||||
Operating expenses:
|
||||||||||||||||||||
Research and development
|
4,950 | 4,574 | 9,515 | 8,551 | ||||||||||||||||
Selling, general and administrative
|
20,426 | 21,038 | 41,938 | 42,537 | ||||||||||||||||
Restructuring charges
|
— | — | — | 1,315 | ||||||||||||||||
Total operating expenses
|
25,376 | 25,612 | 51,453 | 52,403 | ||||||||||||||||
Income (loss) from operations
|
3,492 | 1,317 | 5,001 | (1,654 | ) | |||||||||||||||
Interest and other income, net of other expense
|
53 | 194 | 127 | 376 | ||||||||||||||||
Income (loss) before provision for (benefit from) income taxes
|
3,545 | 1,511 | 5,128 | (1,278 | ) | |||||||||||||||
Provision for (benefit from) income taxes
|
1,580 | 607 | 2,184 | (311 | ) | |||||||||||||||
Net income (loss)
|
$ | 1,965 | $ | 904 | $ | 2,944 | $ | (967 | ) | |||||||||||
Net income (loss) per share-basic
|
$ | 0.06 | $ | 0.03 | $ | 0.09 | $ | (0.03 | ) | |||||||||||
Net income (loss) per share-diluted
|
$ | 0.06 | $ | 0.03 | $ | 0.09 | $ | (0.03 | ) | |||||||||||
Weighted average shares outstanding:
|
||||||||||||||||||||
Basic
|
32,567 | 31,578 | 32,388 | 31,516 | ||||||||||||||||
Diluted
|
33,452 | 31,961 | 33,303 | 31,516 |
Six Months
Ended June 30,
|
||||||||
2010
|
2009
|
|||||||
Cash flows from operating activities:
|
||||||||
Net income (loss)
|
$ | 2,944 | $ | (967 | ) | |||
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
|
||||||||
Depreciation and amortization
|
4,302 | 4,874 | ||||||
Loss on disposal/impairment of fixed assets
|
— | 251 | ||||||
Provision for (recovery of) receivable allowance
|
(117 | ) | 146 | |||||
Share-based compensation expense
|
4,254 | 4,858 | ||||||
Income tax benefits from employee stock plans
|
2,281 | — | ||||||
Excess tax benefits from employee stock plans
|
(2,650 | ) | (4 | ) | ||||
Provision for excess and obsolete inventories
|
829 | 2,287 | ||||||
Deferred income taxes
|
(605 | ) | 185 | |||||
Changes in operating assets and liabilities:
|
||||||||
Accounts receivable, net
|
2,703 | (11,375 | ) | |||||
Inventories
|
(62 | ) | 1,017 | |||||
Prepaid expenses
|
830 | (477 | ) | |||||
Other current assets
|
466 | 3,887 | ||||||
Net investment in sales-type leases
|
(140 | ) | 1,410 | |||||
Other assets
|
(1,295 | ) | (1,606 | ) | ||||
Accounts payable
|
(344 | ) | 1,207 | |||||
Accrued compensation
|
(2,069 | ) | (314 | ) | ||||
Accrued liabilities
|
1,118 | 3,978 | ||||||
Deferred service revenue
|
464 | 992 | ||||||
Deferred gross profit
|
(835 | ) | (4,314 | ) | ||||
Other long-term liabilities
|
62 | (72 | ) | |||||
Net cash provided by operating activities
|
12,136 | 5,963 | ||||||
Cash flows from investing activities:
|
||||||||
Acquisition of intangible assets and intellectual property
|
(139 | ) | (65 | ) | ||||
Purchases of property and equipment
|
(3,380 | ) | (1,667 | ) | ||||
Net cash used in investing activities
|
(3,519 | ) | (1,732 | ) | ||||
Cash flows from financing activities:
|
||||||||
Proceeds from issuance of common stock under employee stock purchase and stock option plans
|
4,659 | 1,752 | ||||||
Excess tax benefits from employee stock plans
|
2,650 | 4 | ||||||
Net cash provided by financing activities
|
7,309 | 1,756 | ||||||
Net increase in cash and cash equivalents
|
15,926 | 5,987 | ||||||
Cash and cash equivalents at beginning of period
|
169,230 | 120,439 | ||||||
Cash and cash equivalents at end of period
|
$ | 185,156 | $ | 126,426 |
Three Months Ended
June 30.
|
Six Months Ended
June 30.
|
|||||||||||||||
2010
|
2009
|
2010
|
2009
|
|||||||||||||
Basic:
|
||||||||||||||||
Net income (loss)
|
$ | 1,965 | $ | 904 | $ | 2,944 | $ | (967 | ) | |||||||
Weighted average shares outstanding - basic
|
32,567 | 31,578 | 32,388 | 31,516 | ||||||||||||
Net income (loss) per share - basic
|
$ | 0.06 | $ | 0.03 | $ | 0.09 | $ | (0.03 | ) | |||||||
Diluted:
|
||||||||||||||||
Net income (loss)
|
$ | 1,965 | $ | 904 | $ | 2,944 | $ | (967 | ) | |||||||
Weighted average shares outstanding - basic
|
32,567 | 31,578 | 32,388 | 31,516 | ||||||||||||
Add: Dilutive effect of employee stock plans
|
885 | 383 | 915 | — | ||||||||||||
Weighted average shares outstanding - diluted
|
33,452 | 31,961 | 33,303 | 31,516 | ||||||||||||
Net income (loss) per share - diluted
|
$ | 0.06 | $ | 0.03 | $ | 0.09 | $ | (0.03 | ) |
Weighted-
Average
|
||||||||
Options:
|
Number of Shares
|
Exercise Price
|
||||||
(in thousands)
|
||||||||
Outstanding at December 31, 2009
|
4,748 | $ | 12..61 | |||||
Granted
|
316 | $ | 12.67 | |||||
Exercised
|
(313 | ) | $ | 9.18 | ||||
Forfeited
|
(41 | ) | $ | 14.53 | ||||
Expired
|
(75 | ) | $ | 16.55 | ||||
Outstanding at June 30, 2010
|
4,635 | $ | 12.76 | |||||
Exercisable at June 30, 2010
|
3,457 | $ | 12.62 |
Restricted Stock
|
Restricted Stock Units
|
|||||||||||||||
Weighted -
Average
|
Weighted -
Average
|
|||||||||||||||
Grant Date
|
Grant Date
|
|||||||||||||||
Number of
Shares
|
Fair Value Per
Share
|
Number of
Shares
|
Fair Value Per
Share
|
|||||||||||||
(in thousands)
|
(in thousands)
|
|||||||||||||||
Non-vested, December 31, 2009
|
52 | $ | 9.25 | 264 | $ | 14.32 | ||||||||||
Granted
|
79 | $ | 12.91 | 116 | $ | 12.49 | ||||||||||
Vested
|
(54 | ) | $ | 9.40 | (66 | ) | $ | 15.26 | ||||||||
Forfeited
|
— | $ | — | (6 | ) | $ | 18.05 | |||||||||
Non-vested, June 30, 2010
|
77 | $ | 12.91 | 308 | $ | 13.35 |
Three Months Ended June 30,
|
Six Months Ended June 30,
|
|||||||||||||||
2010
|
2009
|
2010
|
2009
|
|||||||||||||
Cost of product and service revenues
|
$ | 379 | $ | 287 | $ | 700 | $ | 665 | ||||||||
Research and development expenses
|
134 | 293 | 378 | 560 | ||||||||||||
Selling, general and administrative expenses
|
1,584 | 1,794 | 3,176 | 3,633 | ||||||||||||
Total share-based compensation expenses
|
$ | 2,097 | $ | 2,374 | $ | 4,254 | $ | 4,858 |
June 30,
|
December 31,
|
|||||||
2010
|
2009
|
|||||||
Raw materials
|
$ | 3,377 | $ | 3,589 | ||||
Work in process
|
197 | 171 | ||||||
Finished goods
|
6,161 | 6,742 | ||||||
Total
|
$ | 9,735 | $ | 10,502 |
June 30,
|
December 31,
|
|||||||
2010
|
2009
|
|||||||
Net minimum lease payments to be received
|
$ | 17,710 | $ | 17,164 | ||||
Less unearned interest income portion
|
2,172 | 2,001 | ||||||
Net investment in sales-type leases
|
15,538 | 15,163 | ||||||
Less current portion(1)
|
5,403 | 5,059 | ||||||
Non-current net investment in sales-type leases(2)
|
$ | 10,135 | $ | 10,104 |
2010 (remaining six months)
|
$
|
3,614
|
||
2011
|
7,004
|
|||
2012
|
3,190
|
|||
2013
|
2,393
|
|||
2014
|
1,238
|
|||
Thereafter
|
271
|
|||
Total
|
$
|
17,710
|
(1) |
A component of other current assets. This amount is net of allowance for doubtful accounts of $0.3 million at June 30, 2010 and $0 at December 31, 2009.
|
||
(2) |
Net of allowance for doubtful accounts of $0.4 million at June 30, 2010 and $0.6 million at December 31, 2009.
|
|
|
June 30, 2010
|
December 31, 2009
|
||||||||||||||||||||||||
Gross
|
Net
|
Gross
|
Net
|
||||||||||||||||||||||
Carrying
|
Accumulated
|
Carrying
|
Carrying
|
Accumulated
|
Carrying
|
Amortization
|
|||||||||||||||||||
Amount
|
Amortization
|
Amount
|
Amount
|
Amortization
|
Amount
|
Life
|
|||||||||||||||||||
Finite-lived intangibles:
|
|||||||||||||||||||||||||
Customer base
|
3,184 | 1,183 | 2,001 | 3,184 | 999 | 2,185 |
5-8 years
|
||||||||||||||||||
Acquired technology
|
9,364 | 8,668 | 696 | 9,364 | 7,888 | 1,476 |
3-6 years
|
||||||||||||||||||
Patents
|
593 | 127 | 466 | 455 | 110 | 345 |
20 years
|
||||||||||||||||||
Non-compete
|
720 | 613 | 107 | 720 | 493 | 227 |
3 years
|
||||||||||||||||||
Total finite-lived intangibles
|
13,861 | 10,591 | 3,270 | 13,723 | 9,490 | 4,233 | |||||||||||||||||||
Goodwill
|
24,982 | — | 24,982 | 24,982 | — | 24,982 |
Indefinite
|
||||||||||||||||||
Net other intangibles & goodwill
|
$ | 38,843 | $ | 10,591 | $ | 28,252 | $ | 38,705 | $ | 9,490 | $ | 29,215 |
2010 (remaining six months)
|
$
|
993
|
||
2011
|
380
|
|||
2012
|
380
|
|||
2013
|
380
|
|||
2014
|
380
|
|||
Thereafter
|
757
|
|||
Total
|
$
|
3,270
|
June 30,
|
December 31,
|
|||||||
2010
|
2009
|
|||||||
Sales of medication and supply dispensing systems, which have been delivered and invoiced but not yet installed
|
$ | 17,918 | $ | 20,876 | ||||
Cost of revenues, excluding installation costs
|
(5,066 | ) | (7,187 | ) | ||||
Deferred gross profit
|
$ | 12,852 | $ | 13,689 |
June 30,
|
December 31,
|
|||||||
2010
|
2009
|
|||||||
Pre-acquisition contingency
|
$ | 5,254 | $ | 5,269 | ||||
Rebates and lease buyouts
|
2.424 | 1,140 | ||||||
Accrued Group Purchasing Organization (GPO) fees
|
2,332 | 2,932 | ||||||
Advance payments from customers
|
1,627 | 662 | ||||||
Deferred rent
|
656 | 806 | ||||||
Taxes payable
|
505 | 912 | ||||||
Accrued professional fees
|
203 | 192 | ||||||
Other
|
114 | 84 | ||||||
Total
|
$ | 13,115 | $ | 11,997 |
Total
|
Less than one
year
|
One to three
Years
|
Three to five
years
|
More than
five years
|
||||||||||||||||
Operating leases (1)
|
$ | 8,319 | $ | 3,860 | $ | 3,691 | $ | 768 | $ | — | ||||||||||
Commitments to contract manufacturers and suppliers (2)
|
3,294 | 3,294 | — | — | — | |||||||||||||||
Total
|
$ | 11,613 | $ | 7,154 | $ | 3,691 | $ | 768 | $ | — |
(1) |
Commitments under operating leases relate primarily to leasehold property and office equipment. In April 2010, we entered into a lease agreement to replace certain expiring leases with approximately 25,000 square feet of office space in Nashville, Tennessee. The new lease is for a term of 60 months, and commenced July 2010, with two five-year renewal options. The base rental commitment for the initial five-year term totals $1.7 million.
|
||
(2) |
We purchase components from a variety of suppliers and use contract manufacturers to provide manufacturing services for our products. During the normal course of business, we issue purchase orders with estimates of our requirements several months ahead of the delivery dates.
|
|
|
·
|
the extent and timing of future revenues;
|
·
|
the size and/or growth of our market or market-share;
|
·
|
the opportunity presented by new products or emerging markets;
|
·
|
the operating margins or earnings per share goals we may set;
|
·
|
our ability to align our cost structure with our current business expectations;
|
·
|
our ability
to pro
tect our intellectual property and operate our business without infringing upon the intellectual property rights of others; and
|
·
|
our estimates regarding the sufficiency of our cash resources.
|
|
Overview
|
|
|
|
Operating Environment During the Three Months and Six Months Ended June 30, 2010
|
|
|
|
·
|
We have continued to differentiate ourselves through a strategy intended to create the best customer experience in healthcare;
|
|
·
|
We have delivered industry-leading products with differentiated product features that are designed to appeal to nurses and pharmacists such as SinglePointe™, Tissue Center System and Anywhere RN™; and
|
|
·
|
The market environment of increased patient safety awareness and increased regulatory control has driven our solutions to be a high priority in customers’ capital budgets.
|
|
Critical Accounting Policies and Estimates
|
|
|
|
·
Revenue recognition;
|
|
·
Provision for reserves;
|
|
·
Valuation and impairment of goodwill, other intangible assets and other long lived assets;
|
|
·
Inventory;
|
|
·
Valuation of share-based awards; and
|
|
·
Accounting for income taxes.
|
|
|
|
Recent Accounting Pronouncements
|
|
|
Three Months Ended June 30,
|
Six Months Ended June 30,
|
||||||||||||||||||||
(in thousands, except percentages)
|
(in thousands, except percentages)
|
||||||||||||||||||||
2010
|
2009
|
2010
|
2009
|
||||||||||||||||||
$
|
% of
Revenue
|
$
|
% of
Revenue
|
$
|
% of
Revenue
|
$
|
% of
Revenue
|
||||||||||||||
Revenues:
|
|||||||||||||||||||||
Product revenue
|
$
|
42,023
|
76.8
|
%
|
$
|
41,983
|
79.8
|
%
|
$
|
84,318
|
77.5
|
%
|
$
|
84,278
|
80.4
|
%
|
|||||
Service and other revenues
|
12,670
|
23.2
|
%
|
10,660
|
20.2
|
%
|
24,535
|
22.5
|
%
|
20,569
|
19.6
|
%
|
|||||||||
Total revenues
|
54,693
|
100.0
|
%
|
52,643
|
100.0
|
%
|
108,853
|
100.0
|
%
|
104,847
|
100.0
|
%
|
|||||||||
Cost of revenues:
|
|||||||||||||||||||||
Cost of product revenues
|
19,009
|
34.7
|
%
|
19,175
|
36.4
|
%
|
38,274
|
35.2
|
%
|
39,455
|
37.6
|
%
|
|||||||||
Cost of service and other revenues
|
6,816
|
12.5
|
%
|
6,539
|
12.4
|
%
|
14,125
|
13.0
|
%
|
13,434
|
12.8
|
%
|
|||||||||
Restructuring charges
|
—
|
—
|
%
|
—
|
—
|
%
|
—
|
—
|
1,209
|
1.2
|
%
|
||||||||||
Total cost of revenues
|
25,825
|
47.2
|
%
|
25,714
|
48.8
|
%
|
52,399
|
48.2
|
%
|
54,098
|
51.6
|
%
|
|||||||||
Gross profit
|
28,868
|
52.8
|
%
|
26,929
|
51.2
|
%
|
56,454
|
51.8
|
%
|
50,749
|
48.4
|
%
|
|||||||||
Operating expenses:
|
|||||||||||||||||||||
Research and development
|
4,950
|
9.1
|
%
|
4,574
|
8.7
|
%
|
9,515
|
8.7
|
%
|
8,551
|
8.2
|
%
|
|||||||||
Selling, general and administrative
|
20,426
|
37.3
|
%
|
21,038
|
40.0
|
%
|
41,938
|
38.5
|
%
|
42,537
|
40.6
|
%
|
|||||||||
Restructuring charges
|
—
|
—
|
%
|
—
|
—
|
%
|
—
|
—
|
%
|
1,315
|
1.2
|
%
|
|||||||||
Total operating expenses
|
25,376
|
46.4
|
%
|
25,612
|
48.7
|
%
|
51,453
|
47.2
|
%
|
52,403
|
50.0
|
%
|
|||||||||
Income from operations
|
3,492
|
6.4
|
%
|
1,317
|
2.5
|
%
|
5,001
|
4.6
|
%
|
(1,654)
|
(1.6)
|
%
|
|||||||||
Interest and other income, net of other expense
|
53
|
0.1
|
%
|
194
|
0.4
|
%
|
127
|
0.1
|
%
|
376
|
0.4
|
%
|
|||||||||
Income before provision for (benefit from) income taxes
|
3,545
|
6.5
|
%
|
1,511
|
2.9
|
%
|
5,128
|
4.7
|
%
|
(1,278)
|
(1.2)
|
%
|
|||||||||
Provision for (benefit from) income taxes
|
1,580
|
2.9
|
%
|
607
|
1.2
|
%
|
2,184
|
2.0
|
%
|
(311)
|
(0.3)
|
%
|
|||||||||
Net income
|
$
|
1,965
|
3.6
|
%
|
$
|
904
|
1.7
|
%
|
$
|
2,944
|
2.7
|
%
|
$
|
(967)
|
(0.9)
|
%
|
Three Months Ended June 30,
|
Six Months Ended June 30,
|
|||||||||||||||||||||||
2010
|
2009
|
% Change
|
2010
|
2009
|
% Change
|
|||||||||||||||||||
(in thousands)
|
(in thousands)
|
|||||||||||||||||||||||
Product revenues
|
$ | 42,023 | $ | 41,983 | 0.1 | % | $ | 84,318 | $ | 84,278 | 0.0 | % | ||||||||||||
Cost of product revenues
|
19,009 | 19,175 | (0.9 | )% | 38,274 | 39,455 | (3.0 | )% | ||||||||||||||||
Restructuring charges
|
— | — | n/a | — | 1,008 | (100.0 | )% | |||||||||||||||||
Gross profit
|
$ | 23,014 | $ | 22,808 | 0.9 | % | $ | 46,044 | $ | 43,815 | 5.1 | % |
Three Months Ended June 30,
|
Six Months Ended June 30,
|
|||||||||||||||||||||||
2010
|
2009
|
% Change
|
2010
|
2009
|
% Change
|
|||||||||||||||||||
(in thousands)
|
(in thousands)
|
|||||||||||||||||||||||
Service and other revenues
|
$ | 12,670 | $ | 10,660 | 18.9 | % | $ | 24,535 | $ | 20,569 | 19.3 | % | ||||||||||||
Cost of service and other revenues
|
6,816 | 6,539 | 4.2 | % | 14,125 | 13,434 | 5.1 | % | ||||||||||||||||
Restructuring charges
|
— | — | n/a | — | 201 | (100.0 | )% | |||||||||||||||||
Gross profit
|
$ | 5,854 | $ | 4,121 | 42.1 | % | $ | 10,410 | $ | 6,934 | 50.1 | % |
Three Months Ended June 30,
|
Six Months Ended June 30,
|
|||||||||||||||||||||||
2010
|
2009
|
% Change
|
2010
|
2009
|
% Change
|
|||||||||||||||||||
(in thousands)
|
(in thousands)
|
|||||||||||||||||||||||
Research and development
|
$ | 4,950 | $ | 4,574 | 8.2 | % | $ | 9,515 | $ | 8,551 | 11.3 | % | ||||||||||||
Selling, general and administrative
|
20,426 | 21,038 | (2.9 | ))% | 41,938 | 42,537 | (1.4 | )% | ||||||||||||||||
Restructuring charges
|
— | — | n/a | — | 1,315 | (100.0 | ) % | |||||||||||||||||
Total operating expenses
|
$ | 25,376 | $ | 25,612 | (0.9 | ))% | $ | 51,453 | $ | 52,403 | (1.8 | )% |
|
Cash Flows
|
Six months ended June 30,
|
||||||||
2010
|
2009
|
|||||||
Net cash provided by operating activities
|
$ | 12,136 | $ | 5,963 | ||||
Net cash used in investing activities
|
(3,519 | ) | (1,732 | ) | ||||
Net cash provided by financing activities
|
7,309 | 1,756 | ||||||
Net increase in cash and cash equivalents
|
$ | 15,926 | $ | 5,987 |
|
ITEM 3.
QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
|
|
|
|
ITEM 4.
CONTROLS AND PROCEDURES
|
|
|
|
Changes in Internal Control Over Financial Reporting
|
|
|
|
Item 1.
LEGAL
PROCEEDINGS
|
|
|
|
Item 1A.
RISK
FACTORS
|
|
·
|
our competitors may develop, license or incorporate new or emerging technologies or devote greater resources to the development, promotion and sale of their products and services;
|
|
·
|
certain competitors have greater brand name recognition and a more extensive installed base of medication and supply dispensing systems or other products and services than we do, and such advantages could be used to increase their market share;
|
|
·
|
other established or emerging companies may enter the medication management and supply chain solutions market;
|
|
·
|
certain competitors may develop new features or capabilities for their products not previously offered that could compete directly with our products;
|
|
·
|
current and potential competitors may make strategic acquisitions or establish cooperative relationships among themselves or with third parties, including larger, more established healthcare supply companies, thereby increasing their ability to develop and offer products and services to address the needs of our prospective customers; and
|
|
·
|
our competitors may secure products and services from suppliers on more favorable terms or secure exclusive arrangements with suppliers or buyers that may impede the sales of our products and services.
|
|
|
·
|
difficulties in combining previously separate businesses into a single unit;
|
·
|
the substantial costs that may be incurred and the substantial diversion of management’s attention from day-to-day business when evaluating and negotiating such transactions and then integrating an acquired business;
|
|
·
|
discovery, after completion of the acquisition, of liabilities assumed from the acquired business or of assets acquired that are broader in scope and magnitude or are more difficult to manage than originally assumed;
|
|
·
|
failure to achieve anticipated benefits such as cost savings and revenue enhancements;
|
|
·
|
difficulties related to assimilating the products of an acquired business; and
|
|
·
|
failure to understand and compete effectively in markets in which we have limited previous experience.
|
|
·
|
the ability to successfully install our products on a timely basis and meet other contractual obligations necessary to recognize revenue;
|
|
·
|
the size, product mix and timing of orders for our medication and supply dispensing systems, and their installation and integration;
|
|
·
|
the overall demand for healthcare medication management and supply chain solutions;
|
|
·
|
changes in pricing policies by us or our competitors;
|
|
·
|
the number, timing and significance of product enhancements and new product announcements by us or our competitors;
|
|
·
|
the relative proportions of revenues we derive from products and services;
|
|
·
|
fluctuations in the percentage of sales attributable to our international business;
|
|
·
|
our customers’ budget cycles;
|
|
·
|
changes in our operating expenses and our ability to stabilize expenses;
|
|
·
|
our ability to generate cash from our accounts receivable on a timely basis;
|
|
·
|
the performance of our products;
|
|
·
|
changes in our business strategy;
|
|
·
|
macroeconomic and political conditions, including fluctuations in interest rates and tax increases; and
|
|
·
|
volatility in our stock price and its effect on share-based compensation expense.
|
|
·
|
changes in our operating results;
|
|
·
|
developments in our relationships with corporate customers;
|
|
·
|
changes in the ratings of our common stock by securities analysts;
|
|
·
|
announcements by us or our competitors of technological innovations or new products;
|
·
|
announcements by us or our competitors of acquisitions of businesses, products, or technologies; or
|
|
·
|
general economic and market conditions.
|
|
·
|
the difficulty of managing an organization operating in various countries;
|
|
·
|
growing political sentiment against international outsourcing of support services and development;
|
|
·
|
reduced protection for intellectual property rights in some countries;
|
|
·
|
changes in foreign regulatory requirements;
|
|
·
|
the requirement to comply with a variety of international laws and regulations, including local labor ordinances and changes in tariff rates;
|
|
·
|
fluctuations in currency exchange rates and difficulties in transferring funds from certain countries; and
|
|
·
|
political unrest, terrorism and the potential for other hostilities in areas in which we have facilities.
|
Exhibit
No.
|
Exhibit Title
|
|
3.1(1)
|
Amended and Restated Certificate of Incorporation of Omnicell, Inc.
|
|
3.2
|
Certificate of Amendment to the Amended and Restated Certificate of Incorporation of Omnicell, Inc.
|
|
3.3(2)
|
Certificate of Designation of Series A Junior Participating Preferred Stock.
|
|
3.4(3)
|
Bylaws of Omnicell, Inc., as amended.
|
|
4.1(1)
|
Form of Common Stock Certificate.
|
|
4.2
|
Reference is made to Exhibits 3.1, 3.2, 3.3 and 3.4.
|
|
4.3(4)
|
Rights Agreement, dated February 6, 2003, between Omnicell, Inc. and EquiServe Trust Company, N.A.
|
|
31.1
|
Certification of Chief Executive Officer required by Rule 13a-14(a) or Rule 15d-14(a) of the Securities Exchange Act of 1934, as amended.
|
|
31.2
|
Certification of Chief Financial Officer required by Rule 13a-14(a) or Rule 15d-14(a) of the Securities Exchange Act of 1934, as amended.
|
|
32.1
|
Certifications required by Rule 13a-14(b) or Rule 15d-14(b) of the Securities Exchange Act of 1934, as amended, and Section 1350 of Chapter 63 of Title 18 of the United States Code (18 U.S.C. Section 1350).
|
(1)
|
Previously filed as an exhibit to the Registrant’s Registration Statement on Form S-1 (File No. 333-57024), and amendments thereto, originally filed with the Securities and Exchange Commission on March 14, 2001, and incorporated herein by reference.
|
|
(2)
|
Previously filed as an exhibit to the Registrant’s Annual Report on Form 10-K (File No. 000-33043), and amendments thereto, originally filed with the Securities and Exchange Commission on March 28, 2003, and incorporated herein by reference.
|
|
(3)
|
Previously filed as an exhibit to the Registrant’s Quarterly Report on Form 10-Q (File No. 000-33043) filed with the Securities and Exchange Commission on August 9, 2007, and incorporated herein by reference.
|
|
(4)
|
Previously filed as an exhibit to the Registrant’s Current Report on Form 8-K (File No. 000-33043) filed with the Securities and Exchange Commission on February 14, 2003, and incorporated herein by reference.
|
OMNICELL, INC.
|
|
Date: August 6, 2010
|
|
/s/ ROBIN G. SEIM
|
|
Robin G. Seim
|
|
Vice President, Finance and Chief Financial Officer
|
Exhibit
No.
|
Exhibit Title
|
|
3.1(1)
|
Amended and Restated Certificate of Incorporation of Omnicell, Inc.
|
|
3.2
|
Certificate of Amendment to the Amended and Restated Certificate of Incorporation of Omnicell, Inc.
|
|
3.3(2)
|
Certificate of Designation of Series A Junior Participating Preferred Stock.
|
|
3.4(3)
|
Bylaws of Omnicell, Inc., as amended.
|
|
4.1(1)
|
Form of Common Stock Certificate.
|
|
4.2
|
Reference is made to Exhibits 3.1, 3.2, 3.3 and 3.4.
|
|
4.3(4)
|
Rights Agreement, dated February 6, 2003, between Omnicell, Inc. and EquiServe Trust Company, N.A.
|
|
31.1
|
Certification of Chief Executive Officer required by Rule 13a-14(a) or Rule 15d-14(a) of the Securities Exchange Act of 1934, as amended.
|
|
31.2
|
Certification of Chief Financial Officer required by Rule 13a-14(a) or Rule 15d-14(a) of the Securities Exchange Act of 1934, as amended.
|
|
32.1
|
Certifications required by Rule 13a-14(b) or Rule 15d-14(b) of the Securities Exchange Act of 1934, as amended, and Section 1350 of Chapter 63 of Title 18 of the United States Code (18 U.S.C. Section 1350.)
|
(1)
|
Previously filed as an exhibit to the Registrant’s Registration Statement on Form S-1 (File No. 333-57024), and amendments thereto, originally filed with the Securities and Exchange Commission on March 14, 2001, and incorporated herein by reference.
|
|
(2)
|
Previously filed as an exhibit to the Registrant’s Annual Report on Form 10-K (File No. 000-33043), and amendments thereto, originally filed with the Securities and Exchange Commission on March 28, 2003, and incorporated herein by reference.
|
|
(3)
|
Previously filed as an exhibit to the Registrant’s Quarterly Report on Form 10-Q (File No. 000-33043) filed with the Securities and Exchange Commission on August 9, 2007, and incorporated herein by reference.
|
|
(4)
|
Previously filed as an exhibit to the Registrant’s Current Report on Form 8-K (File No. 000-33043) filed with the Securities and Exchange Commission on February 14, 2003, and incorporated herein by reference.
|
Date August 6, 2010
|
|
/s/ Randall A. Lipps
|
|
Randall A. Lipps
|
|
President and Chief Executive Officer
|
Date August 6, 2010
|
|
/s/ Robin G. Seim
|
|
Robin G. Seim
|
|
Vice President, Finance and Chief Financial Officer
|
/s/ Randall A. Lipps
|
/s/ Robin G. Seim
|
|
Randall A. Lipps
|
Robin G. Seim
|
|
President and Chief Executive Officer
|
Chief Financial Officer
|