Kuno van der Post
OmniComm Systems, Inc.
Fort Lauderdale, FL - OmniComm Systems, Inc. (OmniComm) (OTCQX: OMCM), a global leading provider of clinical data management technology, today announced financial results for the year ending December 31, 2018.
For the year ending December 31, 2018, OmniComm reported revenue of $27.10 million, as compared to revenue of $26.98 million for the year ending December 31, 2017. Gross margin improved by $0.50 million to $22.20 million. Operating expenses increased by $1.50 million to $19.67 million. Operating income for the year ending December 31, 2018 was $2.53 million, as compared to operating income of $3.53 million for the year ending December 31, 2017. EBITDA, a non-GAAP financial measure that OmniComm uses as an additional financial measure, was $3.27 million for the year ending December 31, 2018, as compared to EBITDA of $3.89 million for the year ending December 31, 2017.
“These results do not tell the entire story because 2018 was a year of transition for OmniComm,” said Stephen Johnson, president and CEO of OmniComm. “At first glance, it seems obvious that our financial results for 2018 were not up to our typical growth standards from the previous 10 years. That’s because we made a conscious decision to move away from perpetual licenses to a more predictable and reliable subscription license model, and that transition has had a significant short-term impact on both revenue and EBITDA. It generally takes one to two years to fully realize the benefits of this switch. Also, we invested heavily in research and product development in 2018, so that we could release three new product lines: a coding solution, a randomization and supply-tracking solution, and a comprehensive analytics platform. We believe those expenditures will be a good investment for our clients and the long-term growth of OmniComm.”
For the year ending December 31, 2018, OmniComm achieved record bookings of $37.3 million, as compared to bookings of $31.9 million for the year ending December 31, 2017. Subscription business increased by $13.8 million to $21.9 million, a 170% increase, whereas perpetual business was all but phased out, comprising only $2.9 million in 2018, as compared to $16.2 million in 2017. Perpetual licenses generally offer a much better short-term revenue benefit since they typically include a large one-time upfront license payment that allows for revenue recognition in the first year of an agreement, but with a negative long-term effect on future revenue due to much smaller annual maintenance fees which are typically only 20% of the initial license fees.
“Despite record bookings, the impact of this transition away from perpetual licenses has had an impact on our top and bottom lines,” said Kuno van der Post, Ph.D., chief commercial officer at OmniComm. “But it was the right thing to do for the long-term health of our business. We have a lot to look forward to; we’ve just had major releases in our core product lines: TrialMaster® and TrialOne®, and added three new products: IRTMaster™, AutoEncoder™ and Acuity Analytics™; we’ve opened up a new support office in Bengaluru, India, doubled the size of our team in AsiaPac, expanded our inside and external sales teams, and recently made significant enhancements to TrialMaster to better support late phase and virtual trials.”
OmniComm provides EBITDA, a non-GAAP financial measure as additional information to its financial results. Non-GAAP EBITDA excludes the impact of depreciation and amortization expenses that are included in operating income. Non-GAAP EBITDA is not an alternative or substitute for the financial measure prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) of operating income. The non-GAAP EBITDA financial measure presented may differ from similarly titled non-GAAP financial measures presented by other companies, and other companies may not define this non-GAAP financial measure in the same way. OmniComm’s management uses non-GAAP EBITDA as a measure of operational efficiency and as a goal for incentive compensation. Management believes non-GAAP EBITDA is a useful measure investors may use as an additional factor in their analysis of OmniComm’s performance. Please review the below reconciliation of the non-GAAP financial measure EBITDA to the GAAP financial measure operating income, as well as OmniComm’s financial statements as filed with the Securities and Exchange Commission.
Statements contained in this press release that are not historical facts are "forward-looking statements." These statements can often be identified by the use of forward-looking terminology such as "estimate," "project," "believe," "expect," "may," "will," "should," "intends," or "anticipates" or the negative thereof or other variations thereon or comparable terminology, or by discussions of strategy that involve risks and uncertainties. We wish to caution the reader that these forward-looking statements regarding matters that are not historical facts are only predictions and are based on information available at the time and/or management's good faith belief with respect to future events. No assurance can be given that plans for the future will be consummated or that the future results indicated, whether expressed or implied, will be achieved. While sometimes presented with numerical specificity, these plans and projections and other forward-looking statements are based upon a variety of assumptions, which we consider reasonable, but which nevertheless may not be realized. Because of the number and range of the assumptions underlying our projections and forward-looking statements, many of which are subject to significant uncertainties and contingencies that are beyond our reasonable control, some of the assumptions inevitably will not materialize, and unanticipated events and circumstances may occur subsequent to the date of this press release. Therefore, our actual experience and results achieved during the period covered by any particular projections or forward-looking statements may differ substantially from those projected. Consequently, the inclusion of projections and other forward-looking statements should not be regarded as a representation by us or any other person that these plans will be consummated or that estimates and projections will be realized, and actual results may vary materially. There can be no assurance that any of these expectations will be realized or that any of the forward-looking statements contained herein will prove to be accurate. Forward-looking statements speak only as of the date the statement was made. OmniComm does not undertake any obligation to update or revise any forward-looking statement made by it or on its behalf, whether as a result of new information, future events or otherwise.
About OmniComm Systems, Inc
OmniComm Systems, Inc. is a leading strategic software solutions provider to the life sciences industry. OmniComm is dedicated to helping the world’s pharmaceutical, biotechnology, contract research organizations, diagnostic and device firms, and academic medical centers maximize the value of their clinical research investments. Through the use of innovative and progressive technologies, these organizations drive efficiency in clinical development, better manage their risks, ensure regulatory compliance and manage their clinical operations performance. With an extensive global experience from more than 6,000 clinical trials, OmniComm provides comprehensive solutions for clinical research. Please visit www.omnicomm.com for more information.
OmniComm, TrialMaster, TrialOne, IRTMaster and Promasys are registered trademarks of OmniComm Systems, Inc. Other names may be trademarks of their respective owners.
OmniComm Systems, Inc.