Q4 2019 Earnings Call
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Ladies.
Gentlemen, see operator today's conference is scheduled to begin momentarily until that time. Your line is gonna be puts a musical thank you for your patience.
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Thank you for standing by welcome to the Omni So fourth quarter 2019 earnings announcement.
This time all participants.
Listen only mode. After the speakers presentation to be a question and answer session asked a question during the session you need to press star one on your telephone. Please be advised todays conference is being recorded if your according to further assistance. Please press star Zero I'd now like to have the converts over to your speaker today, Peter Capers, Chief Financial Officer. Thank you. Please go ahead.
Thank you good afternoon, and welcome to the only sell fourth quarter. My full year 2019 earnings call. Joining me today is Randall Lipps, only sell founder chairman President and CEO.
This call will include forward looking statements subject to risks uncertainties and other factors that could cause actual results to.
Differ materially from those expressed or implied.
For more detailed description of the risks of impact. These forward looking statements. Please refer to the information in our press release today.
And the only sell annual report on form 10-K policy I see.
Every 27 2019 and other more reasonable.
Horsepower, yes, you see.
Please be aware that you should not place undue reliance on any forward looking statements made today.
David This conference call is February six 2020.
And all forward looking statements made on this call are based on the believes that hold me sell.
These data only.
Future events are simply.
Passage of time may cause these beliefs to change.
Finally, this conference calls are probably homes link.
And any taping.
Other duplication or rebroadcast without the.
Expressed written consent of only sell is prohibited.
Randall will provide an update on our business after Randall.
Remarks, Oh, a car Harvey sold for 2019, and our guidance for 2020.
2019 fourth quarter full year financial results are included in our earnings announcement, which was released earlier today and as opposed to then the Investor Relations section.
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Included in a fourth quarter earnings release are a few slides that I will speak to later in our prepared remarks ill prepared remarks, we'll also be posted in the same section.
Let me now turn over to called <unk>.
Thanks, Good afternoon.
2019 was a record.
I'm here for omni sell.
Key financial results for the year include record product bookings of 813 million up 14% from 2018.
Record product backlog of 588 million.
Up 23%.
That from 28 team.
And record revenue of 897 million up 14% from 2018.
And record non-GAAP EPS of $2.81 up 34% from 2018.
We're very pleased with the strong results achieved in 2019.
As discussed during our Investor day at the American Society of Health system Pharmacists in December and at the J.P.M. comp brands in January we believe that there are significant.
Ken challenges in pharmacy that derived the demand for our solutions and that represent large market opportunities.
We are committed to addressing and solving these challenges and pharmacy by investing in innovation.
And customer experience.
Experience.
The strong growth in our business over the last several quarters is a testament that the vision of autonomous pharmacy is resonating with the industry.
Through the vision of the economist pharmacy, a combination of automation intelligence and experts.
Services powered by a cloud data platform.
The sale supports more efficient ways to manage medications across all care settings.
We want to be the most compelling medication management automation and service company by accelerating pharmacy.
To perfection.
We're making significant strides to advance medication management through this vision as evidenced in the solutions we debuted at Asap.
We have launched new innovations service offerings and partnerships that are driving greater value for.
For our customers.
The continuing expansion of our business from a single solution to a platform of products and services.
Is driving larger deal size across multiple products and we believe more comprehensive valuable and enduring.
Any relationships with our customers.
We're pleased to highlight a number of our newest customer wins.
Including.
Minnesota based Fairview Health services has selected Omnicells automation and intelligent solutions to streamline nurse pharmacy workflow.
Through this seven year sole source agreement.
Fairview will be leveraging Omnicells intelligence solutions to gain visibility and insight to their pharmacy supply chain.
The health systems investment toward a fully autonomous pharmacy also includes adding XR to automation central pharmacy.
See system.
In an Ivy station to central pharmacy operations, as well as implementing Omnicells X T automated dispensing systems and XT anesthesia workstations across its 13 hospital system and the Minneapolis Metropolitan area.
Guy singer.
One of the nation's most innovative health services organizations, serving millions of patients in Pennsylvania, and New Jersey assigned a six year sole source agreement.
Plummet Omnicells XT automated dispensing systems across the health system.
This investment follows a.
Recent upgrade to XT anesthesia workstations and surgical suites.
We're seeing significant traction for our point of care automation, a workflow technology with numerous health care systems, including Duke University Hospital, and Atria Mill in North Carolina.
Cooper University health.
Care in New Jersey benefits health system in Montana, and run down health in Nevada, leveraging automation and data intelligence to support improved efficiency inpatient care areas.
Allegheny General Hospital in Pittsburgh, P.A. part of the Allegheny Health network.
As selected our central Pharmacy, IB compounding service.
Sterile compounding is one of the biggest challenges for hospital pharmacy.
They were impressed with our insourcing model, which combines technology and trained resources to support a safer more accurate operation.
Although central Hospital University or CH, you, serving the Bordeaux Metropolitan area, one of the top teaching hospitals in France with over 3100 beds across three sides that selected army sell to provide its central pharmacy robotic dispensing system.
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Largest ever implemented by Omnicell in France, three large robots working and coordinated manner, you utilizing omnicells market, leading UL them software was store and retrieve medication upon demand via integration with the hospital pharmacy system for.
Every to patients boards across the board or health care system.
With that I'd like to turn it back over to Peter to discuss 2019 results and our five year financial framework as well as guidance for 2020.
Peter.
Thank you ran all.
Our fourth quarter 2019.
Turning on $48 million was up.
17% over the fourth quarter of 2018 and up 9% on the third quarter of 2019.
Our full year 2019 revenue of 897 million was up 14% for 2018.
The year over year, increasing the revenue.
You are largely due to an increase in X T series extra too and I see implementation.
Growth an annual terms a maintenance revenue from a large installed base of equipment as well as increased population health solutions revenue.
As discussed in the past the population health solutions include medication synchronous.
Station patient messaging, that's or an honor adherence solutions.
The fourth quarter earnings per share in accordance with gap is 51 cents per share up from 36 cents per share in the fourth quarter 2018, an increase of 42%.
Our full year 2019 earnings per share on a.
As with cap was $1.42 cents up from 91 cents per share in 2018.
For sending an increase of 54%.
The year over year increases in earnings per share is largely due to higher rent.
In addition to GAAP financial results, we report our.
Hold on a non-GAAP basis, which excludes stock compensation expense amortization of intangible assets associated with acquisitions.
Position, our restructuring related expenses tax reform and restructuring income tax benefits and expenses certain contingent gains and amortization of debt issuance costs.
We just.
Non-GAAP financial statements. In addition to GAAP financial things because we believe it is useful investors to understand the effects of amortization of acquisition related costs and noncash stock compensation expenses that are components. Our reported results has helped us or any fans and acquisition and restructuring plan.
Since which are unrelated.
Regarding operations.
A full reconciliation of our GAAP to non-GAAP results is included in a fourth quarter earnings press release and is posted on our website.
Fourth quarter 2019, non-GAAP EPS was 77 cents per share compared to.
70 cents per share and the same period last year, representing a 10% increase.
Full year 2019, non-GAAP EPS was $2, an 81 cents per share compared to $2 a nine cents per share in 2018, representing a 34% increase.
Similar to the increases in our GAAP bps.
The increase in earnings per share on a non-GAAP basis. This again largely due to growing revenue.
In addition to strong revenue and profitability growth there are additional indicators that demonstrate the momentum and scaling our business.
First.
Product.
For the full year 2019 increased by approximately 14% from 2018 to 800, a $13 million.
This is a record for the business.
And exceeded the high power and the high point offer guidance range by approximately $23 million.
Second.
Product backlog as of December 31009 seen increased by approximately 23% on December 13, 2000 $18 million to $588 million.
Third non-GAAP gross margins exceeded 50% five zero.
Well for the full year 2019, and expanded by approximately 90 basis points from 2018.
For the non-GAAP operating margin was 14.8% we're totally your 2019 and expanded by approximately 190 basis points from 2018.
Lastly, during the fourth quarter 2019.
We again enters into a record number of multimillion dollar commercial agreements.
The fast majority of these multimillion dollar product bookings are with customers adopting multiple products on the only sell platform.
Our total product backlog as of December 31, 2019 was $588 million up 23% from last year.
Of this amount $471 million is considered a short term in nature, and having a $70 million as soon as long term.
In comparison as of December.
31, 2018 total backlog was $478 million operates $375 million us once in a short term and $103 million unsolicited long term.
Let's now move to the balance sheet cash flow.
At December 31, 2090.
In our cash flow balance our cash balance was $127 million.
Don from having a $37 million at September 32019.
During the fourth quarter 2019 to be repaid $30 million on our outstanding debt, leaving a remaining outstanding funding funded debt balance of 50 million.
Dollars.
As of December 31, 2019, the business was in a net cash position.
$77 million up from $57 million at September 32019.
Cash flow from operations during the fourth quarter and year ended.
December 31 was $35 million.
And $145 million.
Respectively, compared to $47 million and $104 million for the comparable periods last year.
The increase in operating cash flow for the full year is primarily driven by increased net income and improvements in working capital.
Free cash flow generated in the fourth quarter and year year ended December 30, Onest 2019 was $20 million, an $18 million, respectively, compared to 35 and $50 million for the comparable periods last year.
Increasing free cash flow for the full year is primarily due to increases in.
Cash flow mentioned earlier.
Accounts receivable days sales outstanding for the fourth quarter were 81 days down one day on the previous quarter down four days from December 31 2018.
The decrease in via so from last quarter under prior years, primarily to higher due to higher sales and increased collections.
Inventory at December 30, Onest 2019 were were approximately has done an $8 million.
Of $2 million from the previous quarter and up $7 million.
On December 31 2018.
The increase is primarily driven by growth to demands for the X P series, Exxon too and I see.
Declines.
Our headcount was 2698 at December 31, 2019 up.
73 from the end of the previous quarter and up 222 from the same quarter last year.
The increase reflects continued investment into business to deliver product.
The foundation and new offerings.
As well as increases for manufacturing implementation and service personnel needed to support our business as it continues to expand.
We expect this hiring trends continue as we grow the business.
We would like to walk through the.
Long term financial framework, we presented at the Investor Day on December 10, 2019.
At the age HP conference and also at the JV JP Morgan Conference on January 15 earlier this year.
Included in our fourth quarter earnings release are a few slides summarized on long term.
Financial framework.
Slide number three shows a summary of our organic revenue drivers.
We believe that there are significant challenges in pharmacy that we discussed earlier the drive to demand for our solutions I represent large market opportunities.
Looking at our marketing growth assumptions in a long term financial model.
We expect to continue to grow revenue organically over the five over the next five years at a CAGR of approximately 10% to 12%.
The three areas of growth of growth are as follows point of care Central pharmacy.
Retail institutional and payers.
For a point of care solutions, we expect.
Future revenue growth for the following areas first.
Its expansion with existing customers as they continue to increase the utilization of our dispensing systems in more areas within the hospitals.
Second is prior generation replacements or upgrades.
Through the fourth quarter if it.
As it 19, we have received orders from customers representing approximately.
These 3% to three our legacy installed base of automated dispensing cabinets.
Which is up from 11% thus if the end 2018.
We expect to provide an update on this metric.
The quarter.
Growth areas competitive conversions and market share gains fourth growth area. We see is innovation this growth from innovation and new surfaces, including professional services that we announced in December last year.
Given these drivers who believes that this part of the business will grow at.
Organic cagar are for approximately 10% over the next five years.
Central Pharmacy is the next area of significant opportunity digitized and automate pharmacy to help increase safety reduce drug spend.
And optimize labor.
Our central pharmacy.
Solutions, we expect future and continued revenue growth from.
Upgrades of prior generation robots in our installed base.
Carousel to robot replacements.
Greenfield opportunities.
And growth from innovation and new offerings.
Overall, we believe that this part of the business will grow at inorganic cagar.
Well for approximately 17% over the next five years.
Finally for our retail and institutional pharmacy in past solutions, which we expect future and continued revenue growth on the following drivers.
First growth and population health solutions, including software solutions adherence packaging and automation.
Growth from expected New innovation service offerings and overall, we believe that this part of the business will grow as an organic CAGR of approximately 10% over the next five years.
The estimated organic revenue growth of these and these three areas is supported by estimated large hands.
Our total addressable markets and is anchored by many sole source long term agreements with large health systems retail pharmacy change and payers and our customer base.
Let's now move to long term non-GAAP operating margin profitability from a baseline in 2019 of approximately.
In the sense, one five non-GAAP operating margin, we believe that we can increase non-GAAP operating margin through approximately 18% one eight by 2024.
Slide number four gets a summary of the drivers of non-GAAP operating margin.
We expect the drivers of non-GAAP operating margin expansion to be follows expect benefits from economies of scale, including supply chain procurement savings and operating expense leverage.
We expect benefits for long term customer agreements, we expect benefits from manufacturing and design say things.
Thanks, and we also expect benefits from profit improvements and efficiencies.
We benefited from improved infrastructure and other investments.
We expect these benefits to be partly offset by reinvestments and investments in innovation to support the growth opportunities we discussed.
And facets in customer success and experience, including professional services and investments in infrastructure and IP investments to support to support the scaling our business.
On slide number five we've summarized our objectives.
We are committed to strong long term organic growth where the goal off.
$1.450 billion to $1.550 billion by 2024, representing a five year organic gig cagar off approximately 10% to 12%.
We are driving operating leverage with a goal from an 18% on a non-GAAP operating margin by 2024.
We expect the business to deliver between 90% than the 110% free cash flow conversion of GAAP net income through 2024, while we are investing in innovation customer success and supporting infrastructure.
Lastly, we're continuously evaluating potential acquisition opportunities.
For the right fatigue and financial fit.
Before we move the guidance I want to acknowledge that you may have questions about the impact of the Corona fires.
Our business.
First and foremost the safety alone being off our people is our number one priority.
We are in close contact with our employees.
Customers and suppliers in China, and we are reviewing communications by governments and healthcare organizations as we monitor the situation at this point given that we have a small employee presence and a smaller customer base in the regions in the region and none of our suppliers are based in the won province or parks.
Similarly, we do not expect nor EFI factored into our guidance any meaningful operational financial impacts.
That said the situation is uncertain and rapidly evolving. So we will continue to monitor closely and we are evaluating potential scenarios. So we believe that we're well prepared.
Now moving through our full year 2020 guidance.
We expect 2020 product bookings to be between $865 million and $900 million.
The midpoint of this range represents approximately 9% growth over 2019.
Measures from 2070.
Team, but using the midpoint of the guided range for 2020. This represents a CAGR of approximately.
16% one six.
We expect 2020 total revenue to be between $1 billion and $1.020 billion.
The midpoint of this.
Range represents approximately 13% growth over 2019.
As rigs on as follows we expect 2020 product revenues to be between 752 and $768 million and we expect to 2020 service revenue to be between 248.
200.
$52 million.
Using the midpoint of the provided ranges, we expect non-GAAP operating margin.
For 2020 to be slightly below 16% up from 14.8% 2019.
We expect 2020, non-GAAP EPS to be between $2.
I was 96 cents 96 cents per share and $3.16 per share.
The midpoint of this range represents approximately 9% growth over 19 2019.
It is important to note that asset as we discussed in the first quarter 2019 earnings call that we had a nonoperational.
Benefit of about of around seven cents per share related to tax benefits realized from the exercise of employee stock options.
For 2020, we are assuming an average effective blended tax rate of approximately 14% one for in our non-GAAP EPS guidance range.
For the first quarter 2020, we expect the fall we're issuing the following guidance based largely on the ending product backlog from the fourth quarter of 2000, 2019, and recurring revenue from surfaces and consumables, we expect total revenue to be between $221 million at $227 million.
This British.
Not as follows we expect product revenue to be between $163 million and $168 million and we expect service revenue to be between $58 million and $59 million.
We expect non-GAAP EPS to be between 52 cents and 57 cents per share.
As Randall mentioned, we're very pleased with the strong results in 2019, and we look forward to continuing to deliver profitable results in 2020, as we continue to execute on the long term strategy.
With that we would like to open the call for your questions.
Thank you as a reminder.
In order to ask a question. Please press Star then the number one on your telephone keypad, we'll pause just moments compiled acuity roster.
Your first question comes from Matt Hewitt with Craig Hallum Capital. Your line is open.
Hi, guys, Yes, hi, guys. Thanks for taking my questions. This is John Lucasian.
On for Matt Hewitt here at Craig Hallum, and I guess, you know I think a you know our first question here. It's just could you provide some color on the traction you're seeing for some of the new service space to offerings that you've launched recently.
Yes, sure I think that as we.
Have.
Began to focus on the central pharmacy and really.
Focused in on the ease.
Products more as services products, we are providing the technology, but to really to get them to be implemented.
To the most efficient.
Ed and highest level of results for the institution, we're embedding people as part of the service into that process and so that particularly is seeing good results.
Particularly on the booking side and especially on the Ivy side.
Thanks, Ed.
With the.
A reduction of five of seven be facilities that are providing quality and supplies of Ivy compounding. This is the that kind of service that people are certainly engaged with us on in a more.
Fruitful way.
Than we've seen and just the recent quarters.
Okay excellent and then how should we be you know is thinking about the impact of these news service offerings on your gross margins.
Yes, it will be a gradual overtime and I think initially.
There are of course investments in the supporting infrastructure and training and process.
Over time, what we've said in the past and that remains solid going forward and set the same thing at the.
As he is for US today. It is fee, we expect to gross margin grabbed gradually in total to increase over time a modestly.
As we talked about earlier today as well in the operating margin.
Leverage over time, so we definitely see that but I think initially for the kind of the service offerings that will be.
The slight decrease to gross margin despite soft looking at that fact zone.
As we ramp it up.
Okay. Thank you very much.
Such that shops, all we had.
Thank you.
Your next question comes from Steve Halper with Cantor Your line is open.
Hi, two questions first can you just talk about the overall hospital environment and then.
Looking at the three segments.
The competitive positioning and how you feel about that right now.
All I haven't seen no change at the hospital market, but I do think as hospitals have consolidated they continue to want to invest strategically and which means putting products.
On a standard.
Standard choice and not having multiple products as well as.
Finding ways to operate those at optimal levels and so to do that they want to gain more services from us than what we traditionally have done so you see.
Professional services being added you see the Omnicell, one service being added which is.
The old performance Center and these are our ways of taking big investments that they make and extracting better values out of them and so it's great return for them and a great return for for everybody added and on on I'd say that most.
Places.
Engaged with and are engaged in the broader platform not just a single product yield see that much anymore and that's because they are trying to get their hands around all of the pharmacy, not just certain pieces and parts.
Of it and I think we're seeing strength there we've seen a dip.
Additional strengthened phs from the pharmacy side as we continue to sign up pharmacies.
For that service it is still.
Not a big portion of our revenues, yet, but it's good to see traction.
Signing up more pharmacies to find more ways to grow revenues.
And a very competitive environment. These days.
Yeah on the other thing out I would refer back to is that we had a record number of than a multimillion dollar deals of bookings in the fourth quarter is an all time record. If you will until we do believe that.
We have strong customer relations.
And that the customer sees value in our own platform offerings to fast vast majority of that record number of multimillion dollar deals were multi product.
As or platform related so definitely that's right.
Thank you.
Your next question comes from Gene Mannheimer.
Daughtery Andrew your line is open.
Thanks, guys great quarter.
I was hoping.
The question on this on the services offerings, you talked about expert services, how about from a revenue or growth perspective, how fast are those growing.
And then your services line how much.
That is the expert services versus your traditional.
Services contracts on your product.
And then my other question would be if you could just offer some some color on the recent pharmedium closure.
And how and if and how that can help drive business to your in sourcing approach to IB.
Compounding thank you.
Yes.
Thank you for the question of gene so on the on surfaces store personnel line just to be clear for surfaces that you break out to the vast majority there is our maintenance so surfaces right and we do have within that.
Total services line growing revenue for.
The IP rise services and performance Sands are only one on one services, we see growth there over time, if you will.
So those are products and offerings that we've had for for not a fairly time before for number of years and I would say professional services that we announced.
In December last year were are starting there with the bigger health systems.
That's a number of them that have multiple.
Difference.
Product line of product line implementations, where we help manage were mostly focused they're all no change management together.
Over the health system, so that last kind of type of extra services. If you will.
That we're we're starting their fuel right. So that we believe that will grow overtime as well, but it's not meaningful for 2020 right.
Okay. Thanks Peter.
Yes, So third party outsourcing services that follow.
The five those seven B, which is third party compounding regulations set up by the FDA are.
Our limited as their pharmedium not being available anymore that means there's fewer choices to go too. So you only have three choices you.
In either manually mix onsite at your hospital.
You can use automation to mix on site or you can buy off site through one of these cycles seventys and what that supply.
From Pharmedium being removed from the marketplace and choices are more limited.
And.
I think it's fair to say that pricing is also impacted.
Because the amount of.
Folks offering product from a five or seven b or even more limited now so therefore to in order to maintain your budget and are just take yet.
Two.
Able to suppliers self with these critical compounding products you have to bring it in house and so good that has started many more discussions that are really at the top of the funnel, we would say well with customers about how best to do that and that's either for US. It's one of three choices.
As you either use our Ivy station.
In which we would come in and run it for them on an onsite locations.
Following five or seven eight standards, which are different than five or seven beat and now or they could run their own robot, which is we find most people don't want to do because it's a little bit too.
[music] complex.
Or they could use our Ivy workflows station, which still allows them to use their own people, but its semi automated is capturing through cameras.
And technology and cloud based services to make sure the manual process.
Is that appropriately so we think that that will.
Ill emphasize that onsite Ivy prep is got to become a I think.
I believe.
More of a trend the bring it in house and so you've got a really use automation in one form or another to.
With that.
Sure It makes sense. Thank you.
Again, if you like to ask the question. Please press Star One. Your next question comes from Jessica Tussle with Piper.
Hi, Thanks for taking my question I think.
It's now.
Announced this morning.
New Alaris.
Shipments are going to be suspended for a while to get interested to know.
What impact that might have on their business.
I'd.
My initial reaction when I saw that it wouldn't have much impact on us as we don't see.
That as a.
Yes, very rarely would we see a pump cabinet DLP related.
So there might be a few more opportunities and 29 team that we wouldn't NAV.
Because of that potential.
Slowdown there, but I, we don't really.
Like the the pump by itself and the automation decisions are usually made fairly separately, particularly as you are kind of looking at our product as a platform versus a.
Couple of different products combined together like that.
Peter would.
You have anything to add to that.
Just because it so thats more from a competitive standpoint perspective, the parts of the answer.
It will impact to the question. The other part of the question I guess my B.
Does it impact demand for our.
A few solutions, we don't really see a direct impact there has asked kind of Randy.
Bill talked about earlier.
The the hospital will need to have IP prep and.
They're getting into that would robots semi automated said, there's still some compounding available out outside or they can do manual prep inside inside the hospital, but we don't see for that particular developments on.
Respond we don't see an impact on the on our IP.
Product line for the mass spec.
Your next question comes from Mitra Ramgopal with Sidoti Your line is open.
Okay.
Let me turn.
Your next question comes from Bill Sutherland with benchmark Your line is open.
Hey, Thank you.
Peter you I think you said the bookings growth.
That you're looking for this year is 9% for product bookings.
The that's the midpoint of the guidance range crack the do remember to exceed it.
The high point of the guidance range was about 19 by $23 million. So two three.
And then also made its good that if you look at a multiyear period, if you start in 2000.
On 17, our CAGR for bookings is 16% and we just closed within our prepared remarks, because we feel it's important to really look at the longer term trends that might be from a bookings perspective, maybe timing between a fourth quarter on the first quarter. So refined kind of give guidance on how we obviously in historical.
Yeah.
And that book, so so that that's a 16% CAGR from 17 through 20 to 20 estimate right at the midpoint of the 2012 kind of me right, yes, and and and Okay. That's that's good enough for that.
Hi.
Well. So was just curious did the other thing I was wondering if not and just talk about.
Product expansions are introductions this year, if any or plan to its good to know.
Yeah, so as a practice, we do not a you know not announced a ahead of time a product launches we can refer back to the.
Huh.
And first today it is fee in December 2019, where we announced the only so long.
We announced the partnership on on diversion, and we announced the.
Professional services.
Actual services are available since last quarter and only saw lawn.
We expect to want to be favorable quite a limitation the middle of the years, what we said in December.
And.
The only so one.
Is not not too.
Displays.
On your prior Ukraine.
Sure.
Answering.
Correct.
It's an evolution, yes, correct yeah, okay. Okay.
Thanks, guys appreciate it.
Okay. Thank you.
Your last question comes from each or I'm going with Sidoti Your line is open.
Yes, hi, yeah. Good afternoon, thanks for taking the questions.
I'm just going back to the five year guidance trying to get a sense of how you see a mix of the business changing I think right now, it's about 60% cap equipment and software and the rest recurring.
Consumables and service if you see that changing much and also on the international front Basin, you know what you're doing right.
Now I believe you're running at maybe low mid teens on international if you see that changing meaningfully also in terms of mix.
Yes.
So from a few purely talk about kind of asset surface. So the answer service components within.
In services, if you all we expect that to a to go off the increase.
In all the time and not necessarily a breaking that out.
From an international perspective, though we expect a roughly.
Growth rates in line with the total business overtime.
Over the five year period.
Okay. No. That's thanks, and then just from a competitive standpoint that clearly.
You have committed to a number of products and services over last couple of years and you have to leadership position or are you seeing any yeah potential competition at least if not in the near and medium to longer term.
[noise] platform perspective, well I think I think where we feel strongly about the you know the strength of our platform is.
Is really hard to replicated there's certainly.
Certain products that people may have in the marketplace with a combination of one or two but I think the strength in.
And what we come in at offer as a total platform to address.
As much of the pharmacy as possible with it that critical viewpoint.
Of how you address all the pair of.
The pain points in pharmacy, and so I think.
That really drives the decision making.
In the C suite to be much more strategic.
So I think that from that standpoint, we haven't seen really much of any competition that is.
He is taking on.
The goal of the autonomy pharmacy, I mean, we were trying to release pharmacists out of the basis.
We are truly trying to get pharmacists from stop counting Bill then.
Mixing stuff and manual stuff and led technology do that at a 99.9%.
Accuracy and move the pharmacist and too.
Clinical work only and so Ed it's got to happen because there is there just aren't enough resources to run pharmacies.
And the modality that their run today and I take.
I think for the most of the people.
People that we have conversations with.
Resonate with that and want to make pharmacy strategic and not a cost center.
Okay. Thanks, again for taking the questions you bet.
Thanks.
As for today, I'll turn the call back to Randall Lipps for closing remarks.
Well, thank you and 2009 with highly successful year for omni sale, our robust portfolio solutions delivered meaningful outcome for our customers.
And patience.
And these strong results provide a substantial basis for us to execute on our long term strategy.
As noted earlier and for a discussion with our customers. We believe that there are significant challenges in pharmacy that drive the demand for our solution and present large market opportunities and via investments in innovation and by has enhancing the customer experience we continue to make.
Advancements for division that Thomas Pharmacy.
And once again, let me just note are remarkable Ami sales team.
Who is the true backbone of our success. Thank you for another.
Great year.
Executing on our winning strategy.
And we look forward to another great year end 2020, thanks, everyone.
This concludes today's conference call you may disconnect.
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