UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
----------
FORM 10-Q
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
For the quarterly period ended December 31, 2001
OR
[_] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
Commission File Number 0-11250
DIONEX CORPORATION
(Exact name of registrant as specified in its charter)
Delaware 94-2647429
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
1228 Titan Way, Sunnyvale, California 94086
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (408) 737-0700
NONE
(Former name, former address and former fiscal year, if changed
since last report.)
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days.
YES [X] NO [_]
Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of February 8, 2002:
CLASS NUMBER OF SHARES
------------ ----------------
Common Stock 21,421,722
Page 1 of 19
DIONEX CORPORATION
INDEX
PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS Page
CONDENSED CONSOLIDATED BALANCE SHEETS
December 31,2001 and June 30, 2001............... 3
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
Three Months Ended December 31, 2001 and 2000.... 4
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
Six Months Ended December 31, 2001 and 2000...... 5
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
Six Months Ended December 31, 2001 and 2000...... 6
NOTES TO CONDENSED CONSOLIDATED FINANCIAL
STATEMENTS....................................... 7-12
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS................... 13-16
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET
RISKS................................................. 17
PART II. OTHER INFORMATION
ITEM 4. SUBMISSIONS OF MATTERS TO A VOTE OF SECURITY
HOLDERS............................................... 18
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K...................... 18
SIGNATURES....................................................... 19
2
DIONEX CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands, except share amounts)
December 31, June 30,
2001 2001
------------ --------
(unaudited)
ASSETS
Current assets:
Cash and equivalents (including invested cash of $14,506 at December 31, 2001 and
$7,853 at June 30, 2001) ........................................................ $ 26,863 $ 17,311
Marketable equity securities ........................................................ 4,491 5,858
Accounts receivable (net of allowance for doubtful accounts of $1,057 at December 31,
2001 and $890 at June 30, 2001).................................................. 39,962 45,142
Inventories ......................................................................... 22,794 25,017
Deferred tax assets ................................................................. 9,355 8,619
Prepaid expenses and other .......................................................... 2,657 2,810
-------- --------
Total current assets ................................................... 106,122 104,757
Property, plant and equipment, net ....................................................... 42,905 42,327
Goodwill, net ............................................................................ 15,806 13,233
Intangible assets, net ................................................................... 5,912 6,423
Other assets ............................................................................. 6,846 6,942
-------- --------
$177,591 $173,682
======== ========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Notes payable to banks .............................................................. $ 3,736 $ 2,495
Accounts payable .................................................................... 4,719 6,250
Accrued liabilities ................................................................. 21,900 21,533
Income taxes payable ................................................................ 3,341 3,425
Accrued product warranty ............................................................ 2,980 2,983
-------- --------
Total current liabilities .............................................. 36,676 36,686
Deferred taxes and other liabilities ..................................................... 8,243 6,172
Long-term debt ........................................................................... 1,142 966
Stockholders' equity:
Preferred stock (par value $.001 per share; 1,000,000 shares authorized; none
outstanding) .................................................................... -- --
Common stock (par value $.001 per share; 80,000,000 shares authorized; issued
and outstanding: 21,768,244 shares at December 31, 2001 and 22,177,005
shares at June 30, 2001) ........................................................ 67,321 67,282
Retained earnings ........................................................................ 71,909 70,204
Accumulated other comprehensive loss ..................................................... (7,700) (7,628)
-------- --------
Total stockholders' equity ............................................. 131,530 129,858
-------- --------
$177,591 $173,682
======== ========
See notes to condensed consolidated financial statements.
3
DIONEX CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
THREE MONTHS ENDED DECEMBER 31, 2001 AND 2000
(In thousands, except per share amounts)
December 31,
2001 2000
------- -------
(unaudited)
Net sales .............................................. $46,729 $48,540
Cost of sales .......................................... 16,070 16,754
Revaluation of acquired inventory ...................... -- 121
------- -------
Gross profit ........................................... 30,659 31,665
------- -------
Operating expenses:
Selling, general and administrative ............... 16,209 15,632
Research and product development .................. 3,638 3,604
Write-off of in-process research and development .. -- 865
------- -------
Total operating expenses ...................... 19,847 20,101
------- -------
Operating income ....................................... 10,812 11,564
Interest income ........................................ 91 221
Interest expense ....................................... (55) (195)
Other income ........................................... 400 853
------- -------
Income before taxes .................................... 11,248 12,443
Taxes on income ........................................ 3,651 4,044
------- -------
Net income .................................... $ 7,597 $ 8,399
======= =======
Basic earnings per share ............................... $ 0.35 $ 0.38
======= =======
Diluted earnings per share ............................. $ 0.34 $ 0.37
======= =======
Shares used in computing per share amounts:
Basic .................................................. 21,923 22,100
======= =======
Diluted ................................................ 22,417 22,898
======= =======
See notes to condensed consolidated financial statements.
4
DIONEX CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
SIX MONTHS ENDED DECEMBER 31, 2001 AND 2000
(In thousands, except per share amounts)
December 31,
2001 2000
------- -------
(unaudited)
Net sales .................................................. $88,796 $91,215
Cost of sales .............................................. 31,386 31,287
Revaluation of acquired inventory .......................... -- 121
------- -------
Gross profit ............................................... 57,410 59,807
------- -------
Operating expenses:
Selling, general and administrative ................... 31,780 30,001
Research and product development ...................... 7,583 7,183
Write-off of in-process research and development ...... -- 865
------- -------
Total operating expenses .......................... 39,363 38,049
------- -------
Operating income ........................................... 18,047 21,758
Interest income ............................................ 246 423
Interest expense ........................................... (107) (282)
Other income ............................................... 999 853
------- -------
Income before taxes ........................................ 19,185 22,752
Taxes on income ............................................ 6,231 7,394
------- -------
Income before cumulative effect of change in accounting
principle ............................................. 12,954 15,358
Cumulative effect of change in accounting principle ........ -- (359)
------- -------
Net income ........................................ $12,954 $14,999
======= =======
Basic earnings per share:
Income before cumulative effect of change in accounting
principle ......................................... $ 0.59 $ 0.70
Cumulative effect of change in accounting principle,
net of tax ......................................... -- (0.02)
------- -------
Net income ........................................ $ 0.59 $ 0.68
======= =======
Diluted earnings per share:
Income before cumulative effect of change in accounting
principle ......................................... $ 0.57 $ 0.67
Cumulative effect of change in accounting principle,
net of tax ......................................... -- (0.01)
------- -------
Net income ........................................ $ 0.57 $ 0.66
======= =======
Shares used in computing per share amounts:
Basic ...................................................... 22,030 22,082
======= =======
Diluted .................................................... 22,560 22,846
======= =======
See notes to condensed consolidated financial statements.
5
DIONEX CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
SIX MONTHS ENDED DECEMBER 31, 2001 AND 2000
(In thousands)
December 31,
2001 2000
-------- --------
(unaudited)
Cash and equivalents provided by (used for):
Cash flows from operating activities:
Net income ...................................................................... $ 12,954 $ 14,999
Adjustments to reconcile net income to net cash provided by operating activities:
Write-off of in-process research and development ........................... -- 865
Depreciation and amortization .............................................. 2,554 2,573
Gain on sale of marketable securities ...................................... (1,056) (790)
Tax benefit related to stock option plans .................................. 302 513
Deferred taxes ............................................................. (1,062) 790
Changes in assets and liabilities:
Accounts receivable .................................................... 5,537 (5,782)
Inventories ............................................................ 2,486 (6,470)
Prepaid expenses and other assets ...................................... 247 (511)
Accounts payable ....................................................... (1,590) 1,146
Accrued liabilities .................................................... 653 1,809
Income taxes payable ................................................... (253) (654)
Accrued product warranty ............................................... (33) (1,000)
-------- --------
Net cash provided by operating activities ....................................... 20,739 7,488
-------- --------
Cash flows from investing activities:
Proceeds from sale of marketable securities ................................ 1,661 947
Purchase of property, plant and equipment .................................. (2,734) (3,060)
Acquisition of LC Packings, net of cash acquired ........................... -- (11,404)
Other ...................................................................... 11 (22)
-------- --------
Net cash used for investing activities .......................................... (1,062) (13,539)
-------- --------
Cash flows from financing activities:
Net change in notes payable to banks ....................................... 1,398 6,539
Proceeds from long-term debt ............................................... 483 2,486
Principal payments on long-term debt ....................................... (212) (276)
Sale of common stock ....................................................... 1,164 1,761
Repurchase of common stock ................................................. (12,661) (3,197)
Other ...................................................................... -- 287
-------- --------
Net cash provided by (used for)financing activities ............................. (9,828) 7,600
-------- --------
Effect of exchange rate changes on cash ......................................... (297) 578
-------- --------
Net increase in cash and equivalents ............................................ 9,552 2,127
Cash and equivalents, beginning of period ....................................... 17,311 9,386
-------- --------
Cash and equivalents, end of period ............................................. $ 26,863 $ 11,513
======== ========
Supplemental disclosures of cash flow information:
Income taxes paid ............................................................... $ 7,083 $ 6,663
Interest paid ................................................................... $ 109 $ 285
See notes to condensed consolidated financial statements.
6
DIONEX CORPORATION
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
1. Basis of Presentation
The condensed consolidated financial statements included herein have been
prepared by the Company, without audit, pursuant to the rules and regulations of
the Securities and Exchange Commission. Certain information and footnote
disclosures normally included in financial statements prepared in accordance
with accounting principles generally accepted in the United States of America
have been condensed or omitted pursuant to such rules and regulations, although
the Company believes the disclosures which are made are adequate to make the
information presented not misleading. It is suggested that these condensed
consolidated financial statements be read in conjunction with the consolidated
financial statements and the notes thereto included in the Company's Annual
Report to Stockholders for the fiscal year ended June 30, 2001.
The unaudited condensed consolidated financial statements included herein
reflect all adjustments (which include only normal, recurring adjustments) which
are, in the opinion of management, necessary to state fairly the results for the
periods presented. The results for such periods are not necessarily indicative
of the results to be expected for the entire fiscal year ending June 30, 2002.
2. Acquisition
On October 17, 2000, the Company purchased all of the issued and
outstanding shares of LC Packings Nederland B.V. and LC Packings (U.S.A.), Inc.
(collectively referred to as "LC Packings") for a purchase price of $12 million.
In addition, the shareholders of LC Packings have the right to receive
additional contingent purchase consideration, to be paid in varying amounts at
the end of calendar years 2000 through 2004, in the event LC Packings achieves
certain revenue goals. If the entire additional contingent purchase
consideration is achieved, the shareholders of LC Packings will be paid an
additional amount not to exceed $13 million. At December 31, 2001, $6.2 million
of the additional contingent purchase consideration had been earned and was
recorded as goodwill.
The acquisition of LC Packings was accounted for using the purchase method
of accounting and its results of operations have been included in the Company's
results of operations since the date of acquisition.
7
DIONEX CORPORATION
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
LC Packings, which markets its products primarily in the United States and
Europe, specializes in micro, capillary and nano liquid chromatography used by
proteomics and genomics researchers in pharmaceutical, biotechnology and
scientific laboratories to analyze and separate proteins, glycoproteins and
other complex compounds.
3. New Accounting Pronouncements
In June 2001, the FASB issued SFAS No. 141, Business Combinations, which
eliminates the pooling method of accounting for all business combinations
initiated after June 30, 2001 and addresses the initial recognition and
measurement of goodwill and other intangible assets acquired in a business
combination. The Company adopted this accounting standard for business
combinations on July 1, 2001.
As of July 1, 2001, the Company adopted SFAS No. 142, Goodwill and Other
Intangible Assets, which addresses the financial accounting and reporting
standards for the acquisition of intangible assets outside of a business
combination and for goodwill and other intangible assets subsequent to their
acquisition. This accounting standard requires that goodwill be separately
disclosed from other intangible assets in the statement of financial position,
and no longer be amortized but tested for impairment on a periodic basis.
8
DIONEX CORPORATION
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
The provisions of this accounting standard also require the completion of a
transitional impairment test within six months of adoption, with any impairments
identified treated as a cumulative effect of a change in accounting principle.
In accordance with SFAS No. 142, the Company discontinued the amortization
of goodwill effective July 1, 2001. A reconciliation of previously reported net
income and earnings per share to the amounts adjusted for the exclusion of
goodwill amortization net of the related income tax effect follows:
Six Months Ended
December 31,
---------------------
2001 2000
------- -------
(in thousands, except
per share amounts)
Reported net income $12,954 $14,999
Add: Goodwill amortization, net of tax -- 86
------- -------
Adjusted net income $12,954 $15,085
------- -------
Diluted earnings per common share
Reported net income $ 0.57 $ 0.66
Goodwill amortization,net of tax -- --
------- -------
Adjusted net income $ 0.57 $ 0.66
------- -------
In October 2001, the Financial Accounting Standards Board issued SFAS No.
144, Impairment on Disposal of Long-Lived Assets, effective for fiscal years
beginning after December 31, 2001. Under the new rules, the criteria required
for classifying an asset as held-for-sale have been significantly changed.
Assets held-for-sale are stated at the lower of their fair values or carrying
amounts, and depreciation is no longer recognized. In addition, the expected
future operating losses from discontinued operations will be displayed in
discontinued operations in the period in which the losses are incurred rather
than as of the measurement date. More dispositions will qualify for discontinued
operations treatment in the income statement under the new rules. The Company is
currently evaluating the impact of SFAS No. 144 to its consolidated financial
statements.
9
DIONEX CORPORATION
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
4. Inventories
Inventories consist of (in thousands):
December 31, June 30,
2001 2001
------------ --------
Finished goods $ 9,625 $ 9,342
Work in process 2,788 4,469
Raw materials 10,381 11,206
------- -------
$22,794 $25,017
======= =======
5. Income Taxes
The effective income tax rate for the first six months of fiscal 2002 was
32.5%, unchanged from the same period in fiscal 2001.
6. Comprehensive Income
Components of comprehensive income include net income, foreign currency
translation adjustments and unrealized gain on equity securities available for
sale. As such, Accumulated Other Comprehensive Income in the Condensed
Consolidated Balance Sheets represents cumulative foreign currency translation
adjustments and unrealized gain on equity securities available for sale.
Comprehensive income was $7,211,000 and $1,634,000 for the three months ended
December 31, 2001 and 2000, respectively, and $12,882,000 and $12,712,000 for
the six months ended December 31, 2001 and 2000, respectively.
7. Net Income Per Share
Basic earnings per share excludes dilution and is computed by dividing net
income by the weighted average of common shares outstanding for the period.
Diluted earnings per share reflects the potential dilution from securities and
other contracts which are exercisable or convertible into common stock. Diluted
earnings per share is computed by dividing net income by the weighted average
number of common shares that would have been outstanding during the period
assuming the issuance of common shares for all dilutive potential common shares
outstanding using the treasury stock method. The difference between the number
of shares outstanding for basic and diluted earnings per share is due to stock
options outstanding during the periods presented.
10
DIONEX CORPORATION
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
8. Common Stock Repurchases
During the first six months of fiscal 2002, the Company repurchased 469,470
shares of its common stock on the open market, compared with 117,100 shares
repurchased in the first six months of the previous fiscal year. During all of
fiscal 2001, the Company repurchased 361,000 shares.
9. Goodwill and Other Intangible Assets
Changes in the carrying amount of goodwill for the six months ended
December 31, 2001 are as follows (in thousands):
Total
-----
Balance as of July 1, 2001 $13,233
Goodwill acquired during the period 2,392
Translation adjustments and other 181
-------
Balance as of December 31, 2001 $15,806
-------
In connection with the adoption of SFAS No. 142, "See Note 3", the company
performed a transitional impairment test on goodwill and determined that no
impairment was necessary.
Information regarding the Company's other intangible assets follow (in
thousands):
As of December 31, 2001 As of June 30,2001
-------------------------------- --------------------------------
Carrying Accumulated Carrying Accumulated
Amount Amortization Net Amount Amortization Net
-------- ------------ ------ -------- ------------ -----
Patents and $ 376 $ (375) $ 1 $ 375 $ (375) $ --
Trademarks
Developed 5,423 (1,865) 3,558 5,295 (1,428) 3,867
Technology
Core Technology 2,844 (491) 2,353 2,844 (288) 2,556
------ ------- ------ ------ ------- ------
Total $8,643 $(2,731) $5,912 $8,514 $(2,091) $6,423
====== ======= ====== ====== ======= ======
11
DIONEX CORPORATION
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
Amortization expense of other intangible assets was $592,000 and $386,000
respectively, for the six months ended December 31, 2001 and 2000. The estimated
amortization for each of the five fiscal years subsequent to June 30, 2001 is as
follows:
Year Ended Amortization
June 30, Expense
--------- ----------
2002 $1,180
2003 1,180
2004 1,180
2005 1,180
2006 860
------
Total $5,580
======
12
DIONEX CORPORATION
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
Results of Operations - Three Months Ended December 31, 2001 and 2000
Net sales for the second quarter of fiscal 2002 were $46.7 million, a decrease
of 4% from the $48.5 million reported for the same period last year. Sales
decreased over the prior year period in our North American and Japanese markets.
Sales in Europe increased in both local currency and reported dollars. Currency
rates had no significant impact on sales for the quarter.
Gross margin for the second quarter of fiscal 2002 was 65.6%, up from the 65.2%
reported for the same period last year. Gross margin was higher primarily due to
lower manufacturing costs.
Operating expenses of $19.8 million for the second quarter of fiscal 2002 were
down $254,000, or 1%, from the $20.1 million reported in the same quarter last
year. As a percentage of sales, operating expenses were 42%, higher than the 41%
reported for the second quarter last year. Selling, general and administrative
(SG&A) expenses increased $577,000, or 4%, to $16.2 million in the second
quarter of fiscal 2002. The increase was due to the addition of two subsidiaries
in China and Denmark in January 2001.
Research and development (R&D) costs of $3.6 million were virtually unchanged
from the $3.6 million reported in the same period last year. The level of R&D
spending varies depending on both the breadth of the Company's R&D efforts and
the stage of specific product development.
Write-off of in-process research and development represents a nonrecurring
charge of $865,000 associated with the acquisition of LC Packings completed in
October 2000 for technology which had not reached technological feasibility and
had no alternative future use.
Other income was $400,000 and $853,000 in the second quarter of fiscal 2002 and
2001, respectively. Other income resulted primarily from the sale of marketable
equity securities during the two quarters.
The effective tax rate for the second quarter of fiscal 2002 was 32.5%,
unchanged from the second quarter a year ago. Variations in the tax rate reflect
changes in the mix of taxable income among the various tax jurisdictions in
which the Company does business.
Net income in the second quarter of fiscal 2002 was $7.6 million, compared with
$8.4 million reported for the same period last year. Diluted earnings per share
were $.34 compared with $.37 in the same period last year. Excluding the
revaluation of acquired inventory and write-off of in-process research and
development, diluted earnings per share were $.40 for the second quarter of
fiscal 2001.
13
Results of Operations - Six Months Ended December 31, 2001 and 2000
Net sales for the six months ended December 31, 2001 were $88.8 million, a
decrease of 3% from the $91.2 million reported for the same period last year.
Sales declined compared to the same period last year in both our Japanese and
North American markets. Sales in Europe increased in both local currency and
reported dollars. Had currency rates been the same as in last year's first six
months, sales would have declined 2%.
Gross margin for the first six months of fiscal 2002 was 64.7%, down from the
65.6% reported for the same period last year. Gross margin was lower due to the
unfavorable effect of currency fluctuations and higher manufacturing costs.
Operating expenses of $39.4 million for the first six months of fiscal 2002
increased $1.3 million, or 3%, from the $38.0 million reported for the same
period last year. As a percentage of sales, operating expenses were 44%, up from
the 42% reported for the first six months of last year. SG&A expenses were $31.8
million, an increase of 6%, compared with the $30.0 million reported in the same
period last year. The increase was due to the addition of LC Packings and two
subsidiaries in China and Denmark.
R&D costs of $7.6 million were up 6% from the same period last year. The level
of R&D spending varies depending on both the breadth of the Company's R&D
efforts and the stage of specific product development.
Write-off of in-process research and development represents a nonrecurring
charge of $865,000 associated with the acquisition of LC Packings , completed in
October 2000, for technology which had not reached technological feasibility and
had no alternative future use.
Interest income for the first six months of fiscal 2002 was $246,000, a decrease
of $177,000 from the same period last year. The decrease was due to lower
interest rates partially offset by higher average cash balances.
Interest expense was $107,000 for the first six months of fiscal 2002, a
decrease of $175,000 from the same period last year. The decrease was due to
lower average borrowings outstanding.
Other income was $999,000 for the first half of fiscal 2002, compared with
$853,000 for the same period last year. Other income resulted primarily from the
sales of marketable equity securities.
The effective tax rate for the first six months of fiscal 2002 was 32.5%,
unchanged from the same period last year. Variations in the tax rate reflect
changes in the mix of taxable income among the various tax jurisdictions in
which the Company does business.
14
Cumulative effect of change in accounting principle reflects the adoption of
Staff Accounting Bulletin No. 101, "Revenue Recognition in Financial
Statements", ("SAB 101") in the first quarter of fiscal 2001. SAB 101 outlines
the basic criteria that must be met to recognize revenue and provides guidance
for disclosures related to revenue recognition policies. The cumulative effect
of the change, totaling $359,000, net of taxes, is shown as a one-time charge to
income in the income statement for the first six month of fiscal 2001.
Net income for the first six months of fiscal 2002 was $13.0 million, compared
with $15.0 million reported for the same period last year. Diluted earnings per
share for the first half of fiscal 2002 were $.57, compared with $.66 for the
same period last year. Excluding the cumulative effect of change in accounting
principle, revaluation of acquired inventory and write-off of in-process
research and development, earnings per share for the first six months of fiscal
2001 were $.70.
Liquidity and Capital Resources
At December 31, 2001, the Company had cash and cash investments of $26.9
million. The Company's working capital was $69.4 million, up slightly from the
$68.1 million reported at June 30, 2001. Cash generated by operating activities
for the six months ended December 31, 2001 was $20.7 million compared with $7.5
million for the same period last year. The increase in operating cash flow was
primarily due to a decrease in accounts receivable and inventory.
Cash used for investing activities was $1.1 million and $13.5 million in the
first six months of fiscal 2002 and 2001, respectively. The decrease is
primarily attributable to $11.4 million used in fiscal 2001 for the acquisition
of LC Packings. Capital expenditures were $2.7 million and $3.1 million during
the first six months of fiscal 2002 and 2001, respectively. The amount in fiscal
2002 includes $1.8 million related to an expansion of a manufacturing site in
Germering, Germany.
Cash provided by (used for) financing activities was $(9.8) million and $7.6
million in the first six months of fiscal 2002 and 2001, respectively. The
decrease is primarily attributable to the repurchase of common stock for $12.7
million in fiscal 2002, compared with $3.2 million in fiscal 2001. The Company
also reduced the amount of net borrowings from $11.4 million at December 30,
2000 to $5.9 million at December 31, 2001.
15
At December 31, 2001, the Company had utilized $4.9 million of the Company's
$34.9 million in committed bank lines of credit, mainly due to borrowings
related to the Company's operations. The Company believes that its cash flow
from operations, current cash and cash investments and the remainder of its bank
lines of credit will be adequate to meet its cash requirements for fiscal 2002
and the foreseeable future. During the six months of fiscal 2002, the Company
repurchased 469,470 shares of its common stock for $12.7 million.
The impact of inflation on Dionex Corporation's financial position and results
of operations was not significant during the six months ended December 31, 2001.
Forward-looking statements
Except for historical information contained herein, the above discussion and the
letter to shareholders contains forward-looking statements within the meaning of
Section 27A of the Securities Act of 1933, as amended, Section 21E of the
Securities and Exchange Act of 1934, as amended and the Private Securities
Litigation Reform Act of 1995, and are made under the safe harbor provisions
thereof. Such statements are subject to certain risks and uncertainties that
could cause actual results to differ materially from those discussed here. Such
risk and uncertainties include: general economic conditions, foreign currency
fluctuations, competition from other products, existing product obsolescence,
fluctuation in worldwide demand for analytical instrumentation, new product
development, including market receptiveness, the ability to manufacture products
on an efficient and timely basis and at a reasonable cost and in sufficient
volume, the ability to attract and retain talented employees and other risks as
described in more detail in the Company's Form 10-K for the year ended June 30,
2001. Readers are cautioned not to place undue reliance on these forward-looking
statements which reflect management's analysis only as of the date hereof. The
Company undertakes no obligation to publicly release the results of any revision
to these forward-looking statements which may be made to reflect events or
circumstances after the date hereof or to reflect the occurrence of
unanticipated events.
16
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISKS
The Company is exposed to financial market risks, including changes in foreign
currency rates, interest rates and marketable equity securities.
For a detailed analysis of these market risks see the discussion in the
Company's Annual Report to Stockholders for the year ended June 30, 2001 and the
Company's Form 10-K for the year ended June 30, 2001 filed with the Securities
and Exchange Commission. There have been no material changes to these financial
market risks since June 30, 2001.
17
PART II. OTHER INFORMATION
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
On October 26, 2001, the Company held its annual meeting for the following
purposes: (1) to elect directors, (2) to approve an amendment to the Dionex
Corporation Stock Options Plan to increase the aggregate number of shares of
Common Stock for issuance under the plan by 1 million shares, and (3) to ratify
the selection of Deloitte & Touche LLP as the Company's independent auditors for
its fiscal year ending June 30, 2002. A description of these matters is
contained in the Company's Proxy Statement dated September 10, 2001, relating to
the 2001 Annual Meeting of Stockholders.
There were 22,162,889 shares of the Company's common stock entitled to vote at
the Annual Meeting of Stockholders based on the September 12, 2001 record date.
The Company solicited proxies pursuant to Regulation 14 of the Securities and
Exchange Act of 1934 and there was no solicitation to management's nominees for
directors as listed in the proxy statement. Each director received a minimum of
17,912,169 votes, which represents at least 81% of the outstanding common stock
entitled to vote.
The stockholders voted to approve the amendment to the Company's stock option
plan with 12,282,860 votes for the proposal, representing at least 55% of the
outstanding common shares entitled to vote.
The stockholders voted to ratify the selection of Deloitte & Touche LLP as the
Company's independent auditors for its fiscal year ending June 30, 2002.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits
(b) Reports on Form 8-K.
The Company did not file any reports on Form 8-K during the
quarter ended December 31, 2001.
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SIGNATURES
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES EXCHANGE ACT OF 1934, THE
REGISTRANT HAS DULY CAUSED THIS REPORT TO BE SIGNED ON ITS BEHALF BY THE
UNDERSIGNED THEREUNTO DULY AUTHORIZED.
DIONEX CORPORATION
(Registrant)
Date: February 11, 2002 By:
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A. Blaine Bowman
President, Chief Executive Officer
By:
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Craig A. McCollam
Vice President, Finance and Administration
Principal Financial and
Accounting Officer)
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