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Segment and Geographical Information
12 Months Ended
Dec. 31, 2018
Segment Reporting [Abstract]  
Segment and Geographical Information
Segment and Geographical Information
Segment Information
The Company’s CODM is its Chief Executive Officer. The CODM allocates resources and evaluates the performance of the Company’s segments using information about its revenues, gross profit, and income from operations. Such evaluation excludes general corporate-level costs that are not specific to either of the reportable segments and are managed separately at the corporate level. Corporate-level costs include expenses related to executive management, finance and accounting, human resources, legal, training and development, and certain administrative expenses.
The two operating segments, which are the same as the Company’s two reportable segments, are as follows:
Automation and Analytics. The Automation and Analytics segment is organized around the design, manufacturing, selling and servicing of medication and supply dispensing systems, pharmacy inventory management systems and related software and services. The Company’s Automation and Analytics products are designed to enable its customers to improve the effectiveness of the medication-use process and the efficiency of the medical-surgical supply chain, and contribute to better patient care and financial outcomes of medical facilities. The products in this segment are sold primarily to acute care (hospital) facilities. The financial results of InPharmics, acquired in the second quarter of 2017, and Aesynt, acquired in the first quarter of 2016, are included in the Automation and Analytics segment.
Medication Adherence. The Medication Adherence segment primarily includes the development, manufacturing and selling of solutions to assist patients in becoming and remaining adherent to their medication regimens. These solutions comprise a variety of tools and aids that may be directly used by a pharmacist or a healthcare provider in their direct care for a patient, or used by patients themselves. Products include software-based systems, medication adherence packaging, equipment for fulfilling the packaging and ancillary products and services. These products, which are sold under the brand names SureMed and Omnicell, are used to manage medication administration outside of the hospital setting. The financial results of Ateb, acquired in the fourth quarter of 2016, is included in the Medication Adherence segment.
The following table summarizes the financial performance of the Company’s reporting segments, including a reconciliation of income from segment operations to income from total operations:
 
Year Ended December 31,
 
2018
 
2017
 
2016
 
Automation and
Analytics
 
Medication Adherence
 
Total
 
Automation and Analytics (1)
 
Medication
Adherence
 
Total
 
Automation and Analytics (1)
 
Medication
Adherence
 
Total
 
(In thousands)
Revenues:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Product revenues
$
462,379

 
$
107,216

 
$
569,595

 
$
407,427

 
$
102,774

 
$
510,201

 
$
433,524

 
$
94,203

 
$
527,727

Services and other revenues
193,300

 
24,414

 
217,714

 
179,514

 
22,999

 
202,513

 
163,387

 
4,794

 
168,181

Total revenues
655,679

 
131,630

 
787,309

 
586,941

 
125,773

 
712,714

 
596,911

 
98,997

 
695,908

Cost of revenues:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Cost of product revenues
231,003

 
81,357

 
312,360

 
230,003

 
74,839

 
304,842

 
239,062

 
63,375

 
302,437

Cost of services and other revenues
88,254

 
14,365

 
102,619

 
78,440

 
10,795

 
89,235

 
71,905

 
4,481

 
76,386

Total cost of revenues
319,257

 
95,722

 
414,979

 
308,443

 
85,634

 
394,077

 
310,967

 
67,856

 
378,823

Gross profit
336,422

 
35,908

 
372,330

 
278,498

 
40,139

 
318,637

 
285,944

 
31,141

 
317,085

Operating expenses
188,303

 
41,430

 
229,733

 
184,857

 
41,735

 
226,592

 
186,872

 
24,843

 
211,715

Income (loss) from operations
$
148,119

 
$
(5,522
)
 
$
142,597

 
$
93,641

 
$
(1,596
)
 
$
92,045

 
$
99,072

 
$
6,298

 
$
105,370

Corporate costs
 
 
 
 
98,205

 
 
 
 
 
80,900

 
 
 
 
 
83,965

Income from operations
 
 
 
 
$
44,392

 
 
 
 
 
$
11,145

 
 
 
 
 
$
21,405

___________________________________________
(1) 
As adjusted for full retrospective adoption of ASC 606.
Significant Customers
There were no customers that accounted for more than 10% of the Company’s total revenues or accounts receivable balance at and for the years ended December 31, 2018, December 31, 2017, and December 31, 2016, respectively.
Geographical Information
Revenues
 
Year Ended December 31,
 
2018
 
2017
 
2016
 
(In thousands)
United States
$
685,881

 
$
613,817

 
$
594,851

Rest of world (1)
101,428

 
98,897

 
101,057

Total revenues
$
787,309

 
$
712,714

 
$
695,908

___________________________________________
(1) 
No individual country represented more than 10% of the respective totals.
Property and Equipment, Net
 
Year Ended December 31,
 
2018
 
2017
 
2016
 
(In thousands)
United States
$
44,684

 
$
34,899

 
$
36,497

Rest of world (1)
6,816

 
7,696

 
5,514

Total property and equipment, net
$
51,500

 
$
42,595

 
$
42,011

____________________________________________
(1) 
No individual country represented more than 10% of the respective totals.
Property and equipment, net is attributed to the geographic location in which it is located.