Rob Seim – VP of Finance & CFO Randall Lipps – Chairman, President & CEO

Steven Crowley – Craig-Hallum Capital Newton Juhng – BB&T Capital Markets Sean Wieland – Piper Jaffray Leo Carpio – Caris & Company Glenn Garmont – ThinkEquity Steve Harper – Thomas Weisel Partners

Good afternoon. My name is Trinity and I will be your conference operator today. At this time, I would like to welcome everyone to the Omnicell's first quarter earnings call. All lines have been placed on mute to repeat any background noise. After the speakers' remarks there will be a question and answer session. (Operator Instructions) Thank you. I would now like to turn the call over to Rob Seim, CFO of Omnicell. Sir, you may begin.

Thanks, good afternoon and welcome to the Omnicell 2010 first quarter results conference call. Joining me today is Randall Lipps, Omnicell Chairman, President and CEO. You can find the results in the Omnicell 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 Discussions and Analysis of Financial Conditions and Results of Operations. In the Omnicell Annual Report on Form 10-K filed with the SEC on March 24, 2010, as well as our more recent reports filed 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 26, 2009. And all forward-looking statements made on this call are made based on the beliefs of Omnicell as of this date only. Future events or simply the passage of time may cause these beliefs to change. Finally, this conference call is a property of Omnicell Incorporated and any taping, other duplication or rebroadcast without the written consent of Omnicell is prohibited. Also at the call today 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 our guidance for 2010 and after that we will open the call for your questions. Results for the first fiscal quarter of 2010 met our expectations and we are on track to our previously stated annual guidance. Our pipeline is strong and we had…

Good afternoon. We are pleased with our results this quarter, and I'm happy to see our new solutions continuing to be adopted in the market place. Since our November launch, we've made the first installations of our Anywhere RN software that allows management of our remote dispensing systems from virtually any workstation in the hospital. As with SinglePointe, we are seeing customer satisfaction and additional orders. SinglePointe is our proprietary software solution that allows up to 100% of patient medications to be securely stored, managed and tract by our automation systems reducing the inefficiency and safety issues associated with misplaced medications. Earlier in the quarter, we announced that FirstHealth, an integrated health system in North Carolina and South Carolina placed orders in Q4 that included our SinglePointe Solutions. We announced New York-Presbyterian a 2200 bed hospital system in New York City signed a full source contract with us and is implementing SinglePointe. These marquee institutions are finding the benefits of the enhanced workflows. SinglePointe brings to their operations getting all the drivers closed to the patient and reducing the time nurses spend trying to track down missing doses as well as reducing the risk of medication errors. ROI, a leading supply chain management organization, and an operating division of the sisters of Mercy Health System signed an exclusive agreement for Omnicell supply systems in January. Sisters of Mercy is a 19 hospital integrated delivery network serving five states with 4,000 beds, which is been a long time Omnicell medical dispensing system customer. The previous experiences with Omnicell medication management systems influence their choice to also move their nationally recognized supply systems to our solutions. All three of these health systems are now in their implementation phases and already seen the benefits of our products including increased efficiency and increased patient…

Thanks, Randy. The results of the first quarter 2010, allows to reconfirm our guidance for the rest of the year. Overall, we expect our booking rates to grow between 5% and 10% during 2010. Since our customers take 1 month to 12 months to complete installations, we don't expect all of the order growth to become revenue in 2010. Part of the order growth will remain in our ending backlog, and we expect backlog at the end of 2010 to be between $118 million and $125 million, up 4% to 10%. We expect 2010 revenue to be between $218 million and $225 million, up 2% to 5%. We expect non-GAAP earnings excluding stock compensation expense between $0.40 and $0.45 per share, which is up 5% to 18%. These profit expectations assume an effective tax rate of 40% on GAAP earnings and no material change in interest rates. Operator, I'd now like to open the call to questions.

(Operator Instructions) Your first question is from Steven Crowley.

Good afternoon gentlemen. Craig-Hallum Capital: Good afternoon gentlemen.

Good afternoon.

Hi, Steve.

Couple of questions for you. First of all in terms of your comments about many of the larger installations at new customers taking shape as they anticipated, I trust that should bode well for some sequential increase in product revenues, is that the right way for us to interpret that commentary?

Couple of questions for you. First of all in terms of your comments about many of the larger installations at new customers taking shape as they anticipated, I trust that should bode well for some sequential increase in product revenues, is that the right way for us to interpret that commentary?

Yes. I think that's consistent with the guidance that we've given. We did as we announced on Q4 and the beginning of Q1 take quite a few big orders from several of the different marquee institutions and those installations have started, and most of those institutions have their installations scheduled overtime as there's many hospitals, but we've got them all planned out, and worked out with those customers and they've already begun.

Craig-Hallum Capital: :

Yes. Those schedules are pretty firm.

Okay. In terms of the margin profile, gross margin profile of products and services, the variation from our model which products were a bit stronger and services were a little bit weaker, is there anything notable and those relatively monitored variations that we are talking about? Craig-Hallum Capital: Okay. In terms of the margin profile, gross margin profile of products and services, the variation from our model which products were a bit stronger and services were a little bit weaker, is there anything notable and those relatively monitored variations that we are talking about?

On products, we had a pretty strong mix during the quarter. We can be affected up and down a little bit on product margins, but we've been fairly consistent in the 52% to 54% range on product margins overtime. Service margins can be affected by; we mentioned before just the timing of customers that are month to month charges for their services and also just the timing of spare parts usage and our ability to use refurbish parts and replace it with new parts.

Okay and then one final question and I will hop in the queue. On the international, in terms of the landscape they are competitively. Sounds like you continue to have some success but could you help us understand if there is a sizeable difference in the competitive landscape there, what kind of market share are you attracting just paint a little picture. Thanks for taking my questions. Craig-Hallum Capital: Okay and then one final question and I will hop in the queue. On the international, in terms of the landscape they are competitively. Sounds like you continue to have some success but could you help us understand if there is a sizeable difference in the competitive landscape there, what kind of market share are you attracting just paint a little picture. Thanks for taking my questions.

Well the primary competitor internationally is CareFusion, just as it is in the United States. The international market I think as we have mentioned before is really just beginning. There is very few hospitals; there are very few hospitals that have adopted medication control systems such as ours. The ones that have adopted though are finding quite a few benefits from them. I know we certainly expect there to be a greater adoption curve going forward.

Great, thanks for taking my question. Craig-Hallum Capital: Great, thanks for taking my question.

: Newton Juhng – BB&T Capital Markets: Thank you very much. I guess I did want to ask you just with your comments on the small community marketplace customers. Can you give us an idea where I guess they are at this point in terms of, are they like kicking tires but and would like to sign but just don't have the ability to do so right now or is it a situation where you are still trying to get in their minds to show what you can do and with benefits that you can bring them. I am just trying to get a gauge where do you see the general customers out right now.

Newton, this is Randy. I think what we have seen is a return somewhat from the lows of 2009 from the smaller market but it has as return to the levels of 2008 or 2007. So, we are seeing that as a positive, we have seen the large orders continuing to come in at a more frequent rate as we said in the call. So, it's good to see sort of the base level of business and some of the smaller hospitals who had bigger constraint models actually beginning to purchase. But some are still sitting on the sidelines so they are not back in the game yet but it's good to see the positive nature of the small market. Newton Juhng – BB&T Capital Markets: And Randy remind me again what is the under penetration that March plays? How much do you have left to go with its completely green field in that smaller community the hospital market place?

: Newton Juhng – BB&T Capital Markets: Got you. And then kind of falling up on Steven's question, in the international business front you mentioned 20% of business savings, five years is obviously a very nice point. Can you use a point of reference here, how much bookings you are currently seeing? I think last quarter you said it was like upwards of 5% or maybe like what percentage of your backlog at this point has got international business flavor?

Well last year we did a little bit more than 5% of our business from the international marketplace and actually Randy jives me a little bit its actually our distributor channel Canada and U.S. are direct channel and so I said at international market place I am talking about outside of North America and we expect to grow from there kind of on a steady basis. It's a little hard to tell exactly what rate and pace that market place is going to grow because it is kind of a new concept in many of these institutions. We are finding some just great thought leaders around the world in various countries that have towards U.S. facilities seeing the benefits, but from a workflow and safety, from a medication control systems and supply control systems and they have done very expensive installations in their facilities, but that's still pretty early and they are thought leaders. Newton Juhng – BB&T Capital Markets: Okay, and Rob the 20% that you guys mentioned earlier of potential business in the future. Would that I assume include Canada at that point when you are talking about the international business even though –

No, I'm talking about apples-to-apples; we have apples-to-apples 5% grown into 20%. Newton Juhng – BB&T Capital Markets: Got you. Okay, and last question for you Rob just wondering if you could provide us with some level of the capitalized R&D this quarter was or actually relative to last quarter would also be helpful, is it been a little more, little bit less, just trying to get a sense for where that came out this quarter?

It was relatively consistent. We have continued to be innovative in our development labs and of course that means we get products to the point where they have passed technical feasibility and we are doing tests with our customers and we got several products going through this phases. Newton Juhng – BB&T Capital Markets: Okay. Thank you very much.

Your next question is from Sean Wieland. Sean Wieland – Piper Jaffray: Hi. Thanks. Can you give us an update on what's going on the M&A front?

Well, we got a team working and looking at a lot of different potential deals, but we are continuing to evaluate those and when one makes right sense for the business, we will move on that. There are a lot of things to look at out there, but we are just not announcing anything yet, or don't have anything about to announce. Sean Wieland – Piper Jaffray: Is the impediment valuation expectations or not been able to find the right opportunity?

A little bit of both. I think some of its valuation thing, there is a lot of things to look at. I would say it's less about the opportunity. A lot of the people may not want to sell now, but maybe later. So, it's just a matter of timing. Sean Wieland – Piper Jaffray: Okay. So, a lot of this – it seems like it's very consistent with last quarter's call. Can you highlight anything in particular that's changed over the past three months, or is it still; is it pretty much status quo with last quarter's call?

Well, I think our business has been very consistent and I think we're seeing – for us having an hospitals adopt and deploy our new technologies and place orders for this new technologies is very key to getting the momentum in the market place and being an accepted standard practice of like anywhere around in SinglePointe, and so as we see this is deployed by major institutions, we know that it's going to become a standard and is a standard to be developed for the rest of the industry. So, I think that's one of the things we want to focus on. We took a long time to develop those products and they are major differentiators between our competitors and as we see that happened, it's allowing us to continue to win more deals. We are continuing to in our pipeline and even in this quarter, we are continuing to see adding two new customers every other business day. So, we are feeling good about our growth prospects and the ability to sell more products into those accounts in the future. Sean Wieland – Piper Jaffray: Great. Thank you very much.

Your next question is from Leo Carpio. Leo Carpio – Caris & Company: Had a couple of quick questions. Did you provide a figure, the number for operating cash flow in the quarter?

Operating cash flow was about $7 million of the 11 increase in cash. Leo Carpio – Caris & Company: And in terms of the hospital capital spending I mean it sounds like just we may have time some sort of incremental small improvement. What do you think will take to this on this logic, is it just simply the economy is the hold up right now or concerns on the endowment?

Well hospitals as we have said in the past, we have had a pretty tough couple of years and they are still seeing many of the same leading indicators or many of the same indicators that they had to deal with in the past. The unemployment rates continue to be relatively high, the reimbursement mix has affected the certainly income from endowments as you mentioned has really come back. But you some of the institutions that have made cost cutting measures and looking to solutions like ours to increase their efficiency and as far are doing better now and we see their buying patterns is starting to improve. Other institutions are still going through those changes, I think it won't take time that certainly we are not seeing and haven't being seeing for the last six months any further decrease in institutions ability to buy and they seem to be starting to come back. As we mentioned in the prepared comments the smaller hospitals are certainly buying at ordering into Q1 at a higher rate than they were during 2009. Leo Carpio – Caris & Company: Okay and then turning to competition, the (inaudible) is still the same or perhaps maybe McKesson is kind of like a weak third place right now, will become a little more aggressive. I just wonder, appreciate any color there?

Well, the largest competitor of course CareFusion and we see CareFusion in most of the deals and we certainly see do see McKesson and some of the other competitors. I wouldn't say it as competitive environment has changed dramatically in any way. We as I mentioned continue to take new accounts and Randy just mentioned we continue to install new accounts every couple of days, couple of business days. I think our new products are resonating really well with customers and hospitals don't move all that fast with these sorts of installations. They are key to their workflows, they are key to how they operate. They are entity; they go through a pretty methodical decision process and happy to say that lot of times that comes all right. Leo Carpio – Caris & Company: And then lastly on the international operations, did that have any impact on your gross margin this quarter? If I recall I think it did last quarter just some other check.

Yeah we had more international installations completing last quarter than this quarter and did adversely affect our mix a little bit. I mentioned there are mixes little stronger this quarter that was one of the factors that affected us, but the 5% of our business was with international installations will be a little lumpy and they tend to be some larger installations that doesn't tend to be a steady stream at on business, it tends to be kind of coming in individual hospital installations. Leo Carpio – Caris & Company: All right. Well, thank you.

Your next question comes is from Glenn Garmont. Glenn Garmont – Think Equity: Yes thanks. Good afternoon, most of my questions have been answered at this point, but just getting back to sort of the competitive landscape Randy and Rob, why should investors not be concerned? I mean you've taken a lot of beds from Pyxis over the past couple of quarters, and certainly now that is they've been spun out of Cardinal and they are part of CareFusion, I mean why should investors not be concerned about more of a competitive response from them going forward than maybe what we've seen to this point?

Glenn, I think the key that's been driving our success is not only because CareFusion was spun out or before there is spun out is the technology and innovation that we've been able to bring to the market place has been non-movers and as you see this academic medical centers make a big change. It's a big deal for them to change, vendors from a competitive product or our product and that not only just is a demonstration of our technology. It means a lot to the surrounding hospitals and the regions or territory or nationwide about what our technology can do and how it can really make a difference in there. Their institution when it comes to safety and quality, and so and we've been ahead of the curve. We intend to stay ahead of the curve. That's why we kind of feel our investment and R&D is not slow down. It continues on because we have more products to come out that will keep moving the bar and raising the bar, and that's the single most, biggest reason people choose us. It's since not because our price or anything other than, Gee, this is the technology, it's going to give me where I need to be, and that's why we are in Silicon Valley. We are not here because of wins are cheap. We are here because we can get access to the best people we can find to drive our technology to be the absolute best in the market place and that's what wins and this hospitals need it. They need it. Glenn Garmont – Think Equity: Okay. That's helpful. Thanks Randy.

Your next question is from Steve Harper. Steve Harper – Thomas Weisel Partners: Hi. What are the company's latest views on share repurchases and it doesn't appear that you'd bought much stock back this quarter?

No. we didn't buy any stock back this quarter. Our views are kind of consistent with the last few quarters. We believe that the cash balance can be most effectively used to add technologies on to our portfolio through acquisitions, and so we have not gone forward with the remaining $25 million of stock repurchases, it's been authorized. Steve Harper – Thomas Weisel Partners: So, is that sort of thing though a larger acquisition because it's the cash balance continues to build quite impressively?

Well, I think it points more to the fact that Randy said there is plenty of potential acquisitions for us to consider that it might work for us. We do have Nuneaton who is running our strategy and business development team and is looking through a pretty steady stream of potential businesses that would make us more valuable to our customers. Steve Harper – Thomas Weisel Partners: So, is the share repurchases something that the Board is continually evaluating to potentially either complete and/or accelerate or is it just off the table?

We reevaluated relative to other options every quarter. Steve Harper – Thomas Weisel Partners: Okay, great, thanks.

Your next question is from Steven Crowley. Steven Crowley – Craig-Hallum Capital: You mentioned earlier, how you've been pretty happy with some of the new products that you have developed. It took a little while to develop but they are having the desire to impact now. I am hoping that's a graceful segway, but regardless to question about the future REU, and where we sit there and in what kind of potential you see with that product as we check today.

This is the real vision acquisition which brought us from cart technology. We do continue to sell those original carts that REU had on the market place, and have had few marginal installations to those over the last couple of quarters. But really of course what we are looking to do is bring a new technology into the marketplace with an integrated a system that takes medication control to the bed side with both physical control and in the electronic control. That product has certainly taken us longer to get to the market place than we expected, there was lot to learn about how those workflows could be optimally implemented in the hospital. I think we've done a lot of good market research and a good understanding with our customers. We have been showing previewing as we say those products with the couple of trade shows but with (inaudible) and we have them in betas right now, operating in betas. So, provided with all that goes well we will have those things out in the market place this year. Steven Crowley – Craig-Hallum Capital: Great and then a couple book-keeping items that might help everybody. Stock comp expense was a bit below where it, were it's been trending and where it's been first, far back as I can see. Should it stay down around here or how should we think about stock comp expense?

: We grant stock options in this company, but in addition we've seen our stock have a little less volatility, day-to-day volatility in the marketplace over the last few quarters which favorably impacted that calculation. I can't tell you whether there will continue to be less volatility in the market place but I can't tell you that we are actively continuing to work to have those stock option, stock comp expense coming down overtime. Steven Crowley – Craig-Hallum Capital: And then just in terms of D&A and CapEx, in the quarter and then outlook that will be really helpful. Thanks again for taking my questions.

D&A was about $2.5 million consist with where it has been. We expected to be overtime, we are depreciating our assets just a little bit faster than we are adding on new capital assets at this point in time. CapEx was about $1.8 million in the quarter.

Thanks Rob. Well, in summary its great to see our new technologies not only being acquired but deployed by key customers and driving more orders. We also see it in our pipeline and continue to see new customers join the Omnicell family capturing a new customer. Every few business stays on average and again it's pleasing to see that we are delivering on our new products and our solutions as well as on our financials performance. It's good to have you with us today and we will see you next time.

Thank you for participating today's teleconference. You may now disconnect.