926326--3/23/2007--OMNICELL_INC

related topics

{product, market, service}

{regulation, government, change}

{system, service, information}

{acquisition, growth, future}

{property, intellectual, protect}

{stock, price, share}

{product, candidate, development}

{control, financial, internal}

{stock, price, operating}

{operation, natural, condition}

{competitive, industry, competition}

{personnel, key, retain}

{provision, law, control}

{operation, international, foreign}

The medication management and supply chain solutions market is highly competitive and we may be unable to compete successfully against new entrants and established companies with greater resources. Changing customer requirements could decrease the demand for our products and services. Any reduction in the demand for or adoption of our medication and supply dispensing systems and related services would reduce our revenues. Our current and potential customers may have other business relationships with our competitors and consider those relationships when deciding between our products and services and those of our competitors. If we experience delays in or loss of sales of, delays in installations of, or delays in the recognition of revenue associated with our medication and supply dispensing systems, our competitive position, results of operations and financial condition could be harmed. We have experienced substantial growth and we cannot assure you that we will be able to manage future growth. If we are unable to recruit and retain skilled and motivated personnel, our competitive position, results of operations and financial condition could be harmed. We may not be able to successfully integrate acquired businesses or technologies into our existing business, which could negatively impact our operating results. The healthcare industry faces financial constraints and consolidation that could adversely affect the demand for our products and services. If we are unable to maintain our relationships with group purchasing organizations or other similar organizations, we may have difficulty selling our products and services. Our quarterly operating results may fluctuate and may cause our stock price to decline. We have a history of operating losses and we cannot assure you that we will maintain profitability. If the market price of our common stock continues to be highly volatile, the value of your investment in our common stock may decline. We have outstanding options that have the potential to dilute shareholder value and cause our stock price to decline Beginning with fiscal 2006, we recognized expense for stock based compensation related to employee stock options and employee stock purchases. There is no assurance that the expense we are required to recognize measures the accurate value of our share-based payment awards, and the recognition of this expense could cause the trading price of our common stock to decline Our failure to maintain effective internal control over financial reporting in accordance with Section 404 of the Sarbanes-Oxley Act of 2002 could cause our stock price to decline. If our U.S. government customers do not receive their annual funding, our ability to recognize revenues on future sales to U.S. government customers, to sell our U.S. government receivables to third-party leasing companies or to collect payments on unsold receivables from U.S. government customers could be impaired. We depend on a limited number of suppliers for our medication and supply dispensing systems and our business may suffer if we are unable to obtain an adequate supply of components and equipment on a timely basis. If we fail to manage our inventory properly, our revenue, gross margin and profitability could suffer. If we are unable to successfully integrate our automation solutions with the existing information systems of our customers, they may choose not to use our products and services. Our failure to protect our intellectual property rights could negatively affect our ability to compete. Intellectual property claims against us could harm our competitive position, results of operations and financial condition. Our software products are complex and may contain defects, which could harm our reputation, results of operations and financial condition. Product liability claims against us could harm our competitive position, results of operations and financial condition. We may need additional financing in the future to meet our capital needs and such financing may not be available on favorable terms and may be dilutive to existing stockholders. If our new product solutions do not achieve market acceptance, our sales and operating results will be affected. We are dependent on technologies provided by third-party vendors. Our international operations may subject us to additional risks that can adversely affect our operating results. Government regulation of the healthcare industry could reduce demand for our products. We adopted a stockholder rights plan that may discourage, delay or prevent a merger or acquisition that is beneficial to our stockholders. Our headquarters and principal facilities are located near known earthquake fault zones, and the occurrence of an earthquake or other natural disaster or any other catastrophic event could cause damage to our facilities and equipment, which could require us to cease or curtail operations.

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926326--3/23/2007--OMNICELL_INC_/CA/