I would like to welcome everyone to the Omnicell first quarter earnings conference call. (Operator Instructions) Thank you Mr. Seim, you may begin your conference.

Thank you. Good afternoon and welcome to the Omnicell 2008 first quarter results conference call. Joining me today is Randall Lipps, Omnicell President and CEO. You can find our results in the Omnicell’s first quarter press release posted in the Investor Relations section of our website at www.omnicell.com. 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 a more detailed description of the risks that impact these forward-looking statements, please refer to the information under the heading “Risk Factors” and under the heading “Management's Discussion and Analysis of Financial Condition and Results of Operation” and the “Omnicell Annual Report” on Form 10-K filed with the SEC on March 14th, 2008, as well as our more recent filings with the SEC. Please be aware that you should not place undue reliance on any forward-looking statements made today. The date of this conference call is April 21, 2008 and all forward-looking statements made on this call are made based on Omnicell's beliefs as of this date only. Future events or simply the passage of time may cause these beliefs to change. Finally, this conference call is the property of Omnicell Incorporated and any taping or the duplication or rebroadcast without the expressed written consent of Omnicell is prohibited. During the call today, I will start with an overview of the financial results for the quarter, followed by Randy who will cover some of the quarter’s business highlights. I will then discuss Omnicell’s guidance for 2008. After that, we will open the call to your questions. In the first quarter of 2008, we again posted record revenues. Profits from operations were up from this time last year. We did see some new and large orders…

Thanks Rob. Thanks for joining us today. Despite the slower than expected order flow for the quarter, we continue to see our existing customers in every segment expand their automated medication management platforms. We believe that when economic conditions improve, we will be well positioned to take advantage of the market opportunity, because of our strong product offerings and our focus on providing the best customer experience in healthcare. Our SinglePointe solutions announced in December is successfully completing multi-months beta testing in a number of hospitals around the country and I am very pleased with the results. We announced last week, that hospital pharmacy staff at Rise Memorial, one of our Beta Sites, have reported a 55% of reduction in the time they spent managing medication, with the SinglePointe solution. This can be translated into increase staff efficiencies and improvement for pharmacy and nursing. Rise Memorial staffs have also indicated that their automation of the medication management system is enabling them to enhance patient safety by allowing profiled access to patient-specific medications. We are also on track to integrate medication control software with our mobile cart. Creating a new class of product solution we are able to offer, following our Rioux Vision acquisition in December. We expect to begin shipping the first version of these integrated mobile carts during the summer, providing a platform to integrate automated medication control into the bed side point of care environment. We expect further integration with SinglePointe to be available in early 2009. The need for our products is evident in the marketplace as the industry continues to focus on how to improve medication management to address patient safety concerns. A study in this months issue of pediatrics journal, details how medication mix ups, accidental overdoses and adverse drug reactions harm one of --…

Thank you, Randy. We had previously guided to revenue growth in 2008 of 25% to 28% from 2007. Until, we see more of the sales pipeline converting to firm orders, we are lowering that guidance. We now expect revenue to be up 17% to 20% from 2007. We expect product backlog will be between $135 million and $145 million at the end of 2008. We’ll remain approximately 2.5 quarters due to product revenue. In Q1 ’08 our operating margins were on track at 13%. We expect and continue management of our margins at the lower revenue guidance will decrease profit overall for the year. We expect $0.65 to $0.70 non-GAAP EPS during 2008. This includes a further degradation and interest income of $0.03 per share from our previous guidance and assumed 40% effective to tax rate. We now expect further headcount growth to be very moderate, and 5% or less for the reminder of the year. Physician-added will be in areas that allow us to take advantage of market opportunities with existing customers with new customers who’re now installing, and the new customers we expect to sign in coming quarters. Now, I would like to open the call to questions.

(Operator Instructions) and your first question comes from the line Steven Crowley.

Good afternoon gentlemen.

Hi, Steve.

A couple of questions for you, the nature of the postponement decisions are the nature of those decisions being postponed, and as you have talked to your sales force as you clear to customers, was there a comment landscape item that cause that postponement, well how big is the psychological element to the equation, can you paint a little bit of a picture for us just to what you ran into?

Well, Steve this is Randy. As we have said before as a macroeconomic conditions and I think that does includes access to capital and what the conditions of those markets are, and so we have particularly saw that in large, larger deals. Some of those obliviously were also competitive, convergent opportunities for us. That, basically just said on CFO’s desk and we are deferred to, people felt the conditions were - are right for moving forward. So, we it’s hard to pinpoint everyone is a little bit different story, but I think – it is mostly in the larger order category, and its mostly having to do with hospitals putting out the large capital expenditures until the credit markets calm down.

Do you have any sense of whether or not the credit market situation that matters most to your customers, it has stagnated whether or not? CFO’s are working through their individual solutions? And what kind of feel do you have for that?

Well, Steve this is Rob, so I think what’s the thing that people are most afraid of is it all hospitals are funded by Auction rate securities and some of the costs their capital go way up and, we actually didn’t find the largest of the deals that moved out of the quarter, and set on CFO’s desk, as Randy said. We are actually hospitals that had Auction rate securities, but I believe the -- what’s happen in the overall market is all CFO’s see the turmoil and, caused by the mortgage environments and Auction rate securities and so far as they see the interest rates tumbling down and, it just gives them a cause to pause and want to see what’s happening overtime and certainly, if the interest rates are coming down, you might want to just wait and see if the interest rates are going to come down more before you, you fund to be a capital purchase.

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And your next question comes from the line of Tom Gallucci – Merrill Lynch. Tom Gallucci – Merrill Lynch: I don’t want to beat a dead horse at all, but you said there was really a different situation for each example, is it possible just to offer one or two anecdotes in terms of the orders so we can get a little bit of the feel, specifically for the types of thing that you’re really seeing on the street?

Yeah, one large deal we actually had a commitment from the CFO and a large organization that have that done well within the quarter. During the quarter the banking line that they had was with a bank that had some issues, and so they came back to us and said we was too going to give you the order, but we are going to go out and get a different leasing line from the different organization that has more stability at this point and so, that that -- that took a different tax there in that deal, and another one the large order that we also had in place, decided that larger orders now had to go back through the board for re-approval at the Board level, when it has already been approved and so, we had to cycle through another meeting that previously it wasn’t in the cycle and both lease will cause by the macro environmental issues and these -- two large orders were pretty substantial, than loosing their order. They look good to get in the next quarter or too as the cycle is being stretched out, but that was a direct effect of the macroeconomic conditions. Tom Gallucci – Merrill Lynch: All right. Any evidence that any of the pause on behalf of CFO’s, is also due to just their financial, how as oppose to the balance sheet cited things in the credit markets?

Not at all, not at all. I think that my sort of -- it’s sort of a serial environment because the CFO’s are actually cheering the lower interest rates and saying board not only even help or access to capital more as soon as the market settles down and I think the -- the strength, the financial strength with the hospitals and most of our customers are very good. Tom Gallucci – Merrill Lynch: Thanks. And then given sort of some of the example that you describe in there and other think that you see and I’m curious, if you could maybe let us know how you came up with sort of the 17% or 20% in the backlog to 135 to 145. I mean is it sort of -- well, I guess, is there any more detail behind that so we know that its -- how much of a guess it is versus how visible it is?

Well, it’s very visible. Last quarter we had orders that didn’t complete it at the end of the quarter and moved over into January and gave us extremely strong start. We started the quarter with a very, very large pipeline. This quarter is a little bit different, it isn’t so much just the timing, as was Randy said, it is just a slow down. So, what we’ve looked at is the part of our pipeline, which is frankly very large now, larger than we’ve ever, ever seen and, we’d looked at the probability of the each order, of course and we’ve only assessed that the most -- the orders most probable to close will close. And we are going to keep it that way until we start seeing something change in the way that these organizations are behaving and so, the 17% to 20% is as we always have, we’ve got a pretty long backlog and those are predominantly orders that are in the backlog at this point. So, there is a lot of good visibility to it. Tom Gallucci – Merrill Lynch: And so it doesn’t really so much close to the backlog basically, I guess, where did you -- you ended the fourth quarter where again?

We ended the fourth quarter at about 137… Tom Gallucci – Merrill Lynch: All right, so, you sort of anticipate, you can replace what you take out…

Right. Tom Gallucci – Merrill Lynch: …folks really growing it. And then in case if you could just with our last question, if you could just describe, I guess, with the mix of those so called higher probability orders be skewed toward your existing customers and new orders or green fields are competitive wins or is there any sort of thing that we should be thinking about?

We don’t see a material change in the mix of the business relative to what we’ve seen over the last four to six quarters. This last quarter we had much more existing business than we previously had, but when we look at the pipeline we see it just as healthy a new business as it has always been, but of course, those are probably the orders that are low as easy to call in terms of when they are -- they are actually going to close. Now keep in mind Tom that, I think we mentioned in the prepared comments, that we announced during the call last quarter several large hospital organizations multi-hospital organizations that were predominantly new customers that signed with us and most of them haven’t even place there, their initial orders yet. So, those are customers that are not only well long, but they are all essentially almost all the way through the pipeline. The business is ours, the contracts are ours that’s haven’t ordered yet. Tom Gallucci – Merrill Lynch: Okay, thank you.

And you next question comes from the line of Newton Juhng – BB&T Capital Markets. Newton Juhng - BB&T Capital Markets: Good afternoon gentlemen. I had a quick question here on, the kind of competitive displacements obviously the numbers you gave books on about a 7% of your overall, and which is a little late and what I am wondering about is are we seeing any changes in kind of your major competitors like Pyxis to make any moves to try and compete more favorably with you. I mean I know you guys are making a lot of investments here in the type of new products you’re brining, what about them on the quaint competitive front?

Yeah, I think our new SinglePointe software has just been a home run for us and continues to drive a lot of the interest in our product line and so, I think the, we are extremely well positioned when it come to our product, and the technology we are offering. The other thing that has improves since just last quarter is reporting of the customer satisfaction ratings, both the internal and external reports have showed some nick, significant jump ups in our ability to get the highest ratings in the industry, and really start to make a significant delta between us and our competitors. So, on both fronts we feel like we’re really well positioned and we have a lot of activity in our pipeline, and there has been no our new announcements by competitors. So, we’re the one doing most of the announcements, so it just -- I think we have got the momentum when it comes to products and service. Newton Juhng - BB&T Capital Markets: So, just in regard to the quarter it’s off though, was it being down a little bit, is it just kind of an isolated incident…

Yeah, it is the biggest driver in there, we've said was that though couple of the -- the deals that got pushed out with the large deals and some of those were competitive version. So, we didn’t get the include those and the -- and the accounts, so, we didn’t g get the include those in that -- those totals. Newton Juhng - BB&T Capital Markets: Okay, then and Randy, in terms of the pipeline that you’re looking at here with reduction that you’ve made in kind of the revenue guidance, are we looking at deep, I guess, the mix skewing a little bit more towards Greenfield or current existing customer accounts?

Well, I think it’s a little hard to tell until we kind of get outside of the macroeconomic site. I would say that once we’re through this transition, we’d see the -- we would expect to see the same kinds of splits and mixes that we’ve had in the past. Newton Juhng - BB&T Capital Markets: Okay, and so -- I was talking about it more in terms of your current guidance that you have -- you’ve put up today. So, all right, and then the other thing I was wondering about was with the Real Carts, if I heard you correctly you’re saying that first version that carts coming out this summer, further integration available in early 2009. So, the 2009 ones are those going to be the ones, that are going to be fully integrated with your system and the ones that are -- were coming out this summer the ones that are just kind of updated?

Yeah. The once coming out this summer had basic functionality, and one later and early part of 2009 we will have the full functionality that we will work with SinglePointe. So, it will be sort of a dual offering because when the SinglePointe comes out this summer and then the automated mobile system comes out first part of 2009. The initial cart just coming out this summer is I would say it’s the basic set of features and functions and then that’s the same schedule that we’ve discussed before. Just a clarification point the percentage mix of customers refers to orders, so, we’ve actually never talked about the percentage mix of new customers in the installation. So, when we are taking about the pipeline looking like it has the same mixes we’ve had historically and expecting to have that same mix going forward. We are talking about the new orders that haven’t closed yet through the rest of the year.

Your next question comes from Alan Fishman – Thomas Weisel Partners. Alan Fishman – Thomas Weisel Partners: Hi thanks. This is actually Alan Fishman for Steve. I just had a few quick questions. First, I guess, can you talk a little about the companies that buy your leases and the sale leaseback and the sale transactions the sales type leases? Can you discuss their appetite for your leases at this point?

Alan, that’s a good question, yeah we have several firms that we do business with the buy the lease trend and actually the portfolio had been told by them, the portfolios they are in are doing very well and they are actually looking for more risks than less, on a going forward basis. So, we are having no problem with, we are being able to solve those lease trend. Now, of course there is always some amount of institutions that are not the best credits and those are always going to be difficult to sell-off., no matter what the economic conditions are but everything is kind of going along as normal with our leasing partners. Alan Fishman – Thomas Weisel Partners: Okay. Excellent and then I guess my second question kind of has to do is the kind of commentary you are hearing from the CFO’s, I guess, they are going back and reassessing purchasing decisions, what type of things do you think the CFO’s are looking for, in order to let those positions move forward?

Well, of course, I am not in their board meetings or their internal meetings. What we typically hear is just manifested in long read news cycles. Now, being in that kind of position myself with that suggest to me as those are the sort of things that all CFOs do and there is uncertainty when there is -- its unclear what the conditions are going to be. You don’t necessarily want to commit yourself to a big capital purchase and so review it, make sure that’s at the top of the priority list and its very important to do, its the most important thing to do in case there might be, some sort of cutbacks and a good thing about that is we have been at the top, of the capital priority list or for a while now patient safety is extremely important and medication control is very important. In fact some recent surveys show that medication control devices are at the top of the capital equipment list that people in hospital say they are going to be purchasing over the next two years. So, I think once that economic environment slows down a little bit, we’ll see these orders coming through. Alan Fishman – Thomas Weisel Partners: Yeah, thank you. Oh, Randy.

Yeah, just one other thing, one thing we have seen is that has extended its cycles. We have seen some people switch from purchase to lease or lease to purchase. People are -- I think when the disruption came particularly at the mid March, we saw some people decide they wanted to move away from purchase to lease. So, this just added some more time into the processing of getting an order. Alan Fishman – Thomas Weisel Partners: Switch from leasing to purchasing or vice versa?

Well, I mean both ways. Alan Fishman – Thomas Weisel Partners: Both, okay.

Yeah, we’ve seen them go both ways interestingly an offer you have seen some hospital organizations that we were preparing leases for and going through that. That type of documentation that suddenly commenced and, what I think we are just going to purchase this, it looks likes the economic life of these is long enough that -- and we really just want to own them. We got all the customers come in and say while the interest rates are dropping in my cost of capital, my lease rates are actually going down and so, now I want to lease, where they were thinking abut purchasing. So, it's going both ways. Alan Fishman – Thomas Weisel Partners: Okay. Thank you very much.

And your next question comes from the line of Sean Wieland – Piper Jaffray. Sean Wieland – Piper Jaffray : Hi, thank you. What's your best guess as to how long this is going to last?

Sean, I was wondering with that. I don’t think we quite have that crystal ball. Sean Wieland – Piper Jaffray : Okay. How about from this perspective, Randy have you -- you have been in this business a while, have you ever seen this kind of behavior in other economic cycles?

Well, not quite like this. I mean, we had a definitive drop off in orders at the end March, particularly from large orders and that’s a very unique thing for us and I think, for us what we want to so is to see a couple of quarters have been orders, and that that would be the sign to us that things are back on track. In 2005 we also saw some hesitation of order rates from hospitals, when the Medicare bill was changed at the end of 2004, early 2005. So, there are moments in times when the hospital customers particularly on capital equipment items will hesitate. Sean Wieland – Piper Jaffray : Okay, and can you give us any sense on the magnitude of the shortfall? Was it less than 20% or was it less than 10%?

Well, as we have really don’t report the orders and so… Sean Wieland – Piper Jaffray : Yes, I know but just relative to your own internal expectations.

Yeah, it was enough to cause us to take down our go forward guidance from the 25% to 28% growth to 17% to 20% growth. So, I think that’s a pretty good indicator of – how we feel about at least the immediate future, so we see the orders to start coming back. Sean Wieland – Piper Jaffray : Okay, and you have said that it was a bit large orders were delayed. Could you characterize what you mean by large?

For large orders for us; even when we find a multi-hospital organizations that’s many, many millions. It’s comprised of individual hospitals that it order, at a rate of about 0.5 million to 2.0 million each and so, large orders when we’re talking about, that are generally in the $2.5 million range for our hospitals, but we did see the -- large orders of course, we expect this more, but we did see this across the board, we saw it in all size orders, which is -- it would have been unusual. Sean Wieland – Piper Jaffray : Okay, and is there a particular profile of customer that was delaying purchases or was it all over the map.

All over the map. Sean Wieland – Piper Jaffray : Okay, all right, that’s very helpful, thank you very much.

Thanks, John.

And your next question comes from the line of Leo Carpio – Caris. Leo Carpio – Caris : Good afternoon, gentlemen. I have a couple quick questions, regarding this whole problem from the hospitals for your new purchases. If you could just tell us how exactly it happened in terms how soon did it was becoming a problem, was it by the end of the quarter or beginning of the quarter.

It was very late in the quarter. The whole profile pipeline looked fairly normal except for the fact that we had extremely strong January with the orders fall never from the previous quarter. It wasn’t and so we got into March and even late in March where the orders that were, solidly expected. By that I mean contracts were done, they were -- credit was all done, everything was done it was just a matter of signing the purchase orders. Now that’s when we saw them going into the additional or review cycles. Leo Carpio – Caris : Okay. And in terms of the additional review cycles have they -- what you like the standard review cycles or it’s just a short abbreviated process?

Well, I think every institution as a little bit different capital or progression process; some of them having on periodic basis, some of them having on special calls. What we saw was additional special meanings being thrown, people not available to sign things like that. So, all indicators that folks were just stopping for a while. Leo Carpio – Caris : Okay, and in terms of the first quarter backlog, and for your call last quarter you had said you are going to give us some sort of progress versus your annual bogie. How is that quarter-by-quarter sequentially versus fourth quarter and first quarter, was that flat, up?

Well, we are not commenting on the actual number for the quarter, but clearly it was not on track to meet the previous year-end guidance, and that’s why we brought down the revenue and the backlog guidance for the end of this year.

And your next question comes from the line of Steven Crowley - Craig-Hallum Capital.

Gentlemen, one point of clarification. Your new non-GAAP EPS guidance ranges 65 to - is it 70 or 75?

70.

70. Okay and in terms of, how we should think about the way in which you are going to run and tune your business giving the uncertain environments? Annualizing the first quarter revenue performance you’re going to whole out different than the low end of your revenue guidance range for the year? So, what I am trying to get to hear is, was there a level at which you are going to kind of normalized business from here and does it look the whole out life first quarter and then if things take-up that’s our upside or you going to take a step lower, and then build from that base? I am trying to get a sense for the slope of the year from here?

Well, we do have a lot of orders in the backlog, and so we need to keep the revenue as you pointed out the lower end of our guidance would be about the same levels as the first quarter and we need to do that to meet the customer’s expectations on when those systems work are installed and so, that’s the expectation going forward. What we are really doing is holding the debt level and kind of setting the business at that level, and so we see when these orders start closing. We are not, doing anything that would produce in jeopardy of being unable to install the customers pace or unable to install the lot of the large new orders that we see in the pipeline right now, should they actually close, should the economic conditions changing, the orders start, start flowing in. So, I think it’s a prudent task or prudent path that we are taking to make sure that we are -- we are well in position to take opportunity as it comes.

Okay. Now in terms of the Rioux business, can you give us a little bit of a feel to how that performed in the first quarter and what kind of contribution? My sense was that the regular way existing Mobile Cart business was pretty good and then you have the additional gears in front of us from the product enhancements.

Well, that’s through the product enhancements and the integration with our systems is also in front of us. It was -- what we were selling today and the real business is the existing Mobile Cart that was in the product line when we purchased them. It performed about as expected as we’ve said Rioux is dilutive to this year and that was more front-end loaded, that’s exactly what happened. You see our gross margins down quarter-to-quarter and it’s pretty much of all associated. Well it is all associated with the addition to Rioux, the existing Mobile Cart business is not at the gross margin level, but the rest of our businesses because there is much more software content on it and of course when we bring in our additional software for medication management in the severance and full software in the beginning of 2009 that’s when it starts to bring a much higher margin product into the market.

And in terms of the integration of the Rioux reorganization into the Omnicell organization, what can you tell us at least qualitatively about that process and how it’s going?

That process is going very well. It’s going better than expected, frankly that’s the first acquisition that we have done for a while. We put a lot of effort into it and frankly we thought about a lot ahead of time, we have folks from Omnicell headquarters onsite at Rioux every other week and the actual integration is actually going very well.

So is it the right way for us to think about that business as $2.5 million, $3 million a quarter with a nice up taking second half of the year? And there maybe something special next year?

Well, what we had guided to and when we did the acquisition was about a 5% additional revenue growth, which is a $10 million, $11 million and we’re still on track to that. And it’s most – it’s dilutive in the first half, more dilutive in the first half as I said before and there is an up tick of revenues we go through the year.

Okay. Thanks very much.

And we have no further questions at this time. I would now like to turn the call over to Mr. Lipps for any closing remarks.

I really want to thank everybody for joining us today, and I would like to reiterate that the change in our projected revenue growth is caused by the overall economic conditions. We deliver technology, products and services that truly differentiate us from our competitors and we’re out giving the absolute best customer experience in the industry with our products and I expect continued growth momentum for our business in 2008. I am very confident we can continue to deliver the medication and supply management solutions that our customers want. Thanks for joining us today.