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UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
- ----------------------------------
FORM 10-K
[X] ANNUAL REPORT PURSUANT TO SECTION 13 or 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the Fiscal Year Ended June 30, 1997
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
Securities registered pursuant to Section 12(b) of the Act: None
Securities registered pursuant to Section 12(g) of the Act:
Common Stock, par value $.001 per share
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 by check mark if disclosure of delinquent filers pursuant to
Item 405 of Regulation S-K is not contained herein and will not be
contained, to the best of registrant's knowledge, in definitive proxy or
information statements incorporated by reference in Part III of this Form
10-K or any amendment to this Form 10-K. [X]
<PAGE>
The aggregate market value of the Registrant's Common Stock held by
nonaffiliates on September 23, 1997 (based upon the closing price of such
stock as of such date) was $530,398,318.
As of September 23, 1997, 11,606,386 shares of the Registrant's Common
Stock were outstanding.
Portions of the Registrant's 1997 Annual Report to Stockholders are
incorporated by reference in Parts I, II and IV of this Report. Portions
of the Registrant's definitive Proxy Statement for the Annual Meeting of
Stockholders to be held on October 23, 1997 are incorporated by reference
in Part III of this Report.
<PAGE>
PART I
Item 1. BUSINESS
Dionex Corporation* designs, manufactures, markets and services
analytical instrumentation and related accessories and chemicals. The
Company's products are used to analyze chemical substances in the
environment and in a broad range of industrial and scientific
applications. Since July 1, 1996, there have been no material changes in
the mode of conducting the business of the Company.
Industry Segment Information
The Company operates in a single industry segment consisting of
analytical instruments and related services.
Products
Dionex develops, manufactures, markets and services a range of
chromatography systems, sample preparation devices and related products
that are used by chemists to isolate and quantify the individual
components of complex chemical mixtures in many major industrial,
research and laboratory markets. Typically, the Company's chromatography
systems include several components: a specially designed liquid pumping
and flow system, a sample injection system, a separator column, a
suppressor or other post-column device, a detector and a data collection
and analysis system. These components are designed to be modular so
that systems can be configured to meet the particular analytical
requirements of individual customers. Moreover, individual components
may be sold separately to existing customers who wish to expand
their systems.
The Company's chromatography systems are currently focused in
several product areas: ion chromatography, high performance liquid
chromatography (HPLC) and sample extraction. In addition to these
product areas, the Company develops and manufactures columns, detectors,
data analysis systems and other products. Each of these product areas is
described below.
Ion Chromatography - Ion Chromatography (IC) is a form of chromatography
that separates ionic (charged) molecules, usually found in water-based
solutions, and typically identifies them based on their electrical
conductivity. The sale of Dionex IC
systems and related columns, suppressors, detectors, and automation and
other products accounts for a majority of the Company's revenues.
_________________________
* Unless the context otherwise requires, the terms
"Dionex" and "the Company" as used herein include
Dionex Corporation, a Delaware corporation, and its
subsidiaries. Dionex was initially incorporated
in California in 1980. In 1986, the Company
reincorporated in Delaware.
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Dionex IC products are used in a wide range of applications,
including environmental monitoring, corrosion monitoring, evaluation of
raw materials, quality control of industrial processes, research and
development, and regulation of the chemical composition of food, beverage
and cosmetic products. Major customers include environmental testing
laboratories, life science and food companies, chemical and petrochemical
firms, power generating facilities, electronics manufacturers, government
agencies and academic institutions.
In the first quarter of fiscal 1994, the Company introduced the
DX-500 Series of chromatography systems for Ion Chromatography and HPLC
in the North American and European markets. In the third quarter of
fiscal 1995, the DX-500 line was introduced in Japan and it is now
marketed worldwide. These modular, high performance systems are designed
to meet the needs of various applications, including classical IC as well
as bioscience and environmental HPLC analyses. In March 1997, the
Company enhanced this product line by introducing the LC25 oven. The
LC25 features both conductive and convective heating to facilitate
temperature control of columns, cells and suppressors.
In April 1996, the Company introduced the DX-120, a
cost-effective IC system for customers who need simple, dedicated
instrumentation for routine ion analysis. The DX-120 was designed for
improved reliability and automation, allowing for quick set-up, simple
operation and high quality isocratic performance. The
DX-120 is marketed worldwide and has replaced the DX-100 that was
introduced in 1990.
In March 1997, the Company introduced the DX-800, the next
generation continuous on-line monitoring system. The DX-800 uses
industry standard PC-based automation, similar to that used in laboratory
chromatography. Major applications for the Company's DX-800 are the
power industry for the continuous monitoring of corrosive contaminants in
boiler water and the semiconductor industry for continuous monitoring of
contaminants in high purity water. The DX-800 replaces the Series 8200
Process Analyzer introduced in fiscal 1992.
HPLC - HPLC is a form of chromatography that separates biological
molecules such as proteins, carbohydrates, amino acids and
pharmaceuticals and identifies them by measuring the amount of light that
the molecules absorb or emit when exposed to a light source. The Company
offers various configurations of the DX-500 Series chromatograph for HPLC
applications. The DX-500 Series offers both quaternary gradient and
isocratic pump capabilities, in either stainless steel or PEEK
(polyetheretherketone) and several detection modes based on conductivity,
electrochemistry and optics. This versatility of detection and pumping
capabilities allows customers to perform a wide range of HPLC
applications. The Company's customers include biological research and
biotechnology groups and pharmaceutical companies.
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Sample Extraction - The Company offers the ASE(TM) 200 system for
automated sample extraction. In March 1995, the Company introduced a new
extraction technology called Accelerated Solvent Extraction or ASE. The
ASE 200 system is based upon a new extraction technology that extracts
solid samples using common solvents at elevated temperatures and
pressures. The ASE 200 system extracts solid samples in an automated
fashion using the same solvents used in traditional soxhlet techniques.
Competitive techniques include soxhlet, sonication, microwave extraction
and supercritical fluid extraction. The ASE 200 system offers several
advantages over other solvent based extraction techniques including lower
solvent consumption, reduced extraction time, higher throughput and ease
of use. ASE 200 systems are used worldwide for a number of environmental,
industrial and food and beverage applications. In March 1997, the Company
enhanced its ASE 200 system by introducing the ASE 200 Solvent Controller
Module, which automates the delivery of multiple solvents to the ASE 200
system, and Auto ASE, a new add-on software feature which allows control
of up to eight ASE 200 systems from one location, as well as methods storage.
Automation Products - As part of its efforts to make chemical analyses
simpler, faster and more reliable, Dionex offers a family of products
that automate sample handling, system operation and data analysis for
chromatography systems. These products include the PeakNet and PeakNet
PA for Process Analysis. In addition, automated sample injectors are
available.
In fiscal 1994, the PeakNet PC-based Chromatography Workstations
were introduced to complement the DX-500 systems. PeakNet is the
Company's latest release of Windows-based applications for
chromatography. PeakNet Workstations are
multi-featured, high performance computer systems that automate control,
data acquisition, analysis and reporting for the DX-120 and DX-500
systems. In fiscal 1996, the Company introduced PeakNet 4.3, which
offered new capabilities including data smoothing options to reduce noise
and enhanced reporting formats to meet the changing documentation
requirements of our customers. In March 1997, the Company introduced its
latest version of the software, Peaknet 5.0, a new generation 32-bit
automation product designed for use with Windows 95 and Windows NT.
In March 1994, the universal interface (UI20) module was added to
the PeakNet/DX-500 Series. It allows PeakNet workstations to accept data
from other Dionex instruments, as well as instruments manufactured by
other vendors. A revision of the PeakNet software was also introduced at
that time to support the new interfacing capabilities.
Also in March 1994, a new Automated Sample Injection module (AS40)
was introduced. The AS40 can be used with the
DX-120 and DX-500 series.
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Columns and Suppressors - A chromatography column generally consists of a
hollow cylinder packed under high pressure with a chemical resin. The
column's function is to separate various chemical components in a sample.
The Company develops and manufactures its own resins using proprietary
processes. Dionex currently manufactures and markets a broad range of
column types designed for particular applications in the liquid
chromatography market.
Several consumable products were introduced in fiscal 1997,
including the IonPac(R) AS9-HC for determination of trace oxyhalides and
bromate in drinking water and the IonPac CS15 for isocratic determination
of trace ammonium or sodium in complex matrices.
These products follow a steady stream of columns and chemistries
introduced in the previous two years, including the IonPac AS14,
IonPac CS5A, CarboPac PA10,the IonPac CS12A and the OnGuard Barium sample
prep cartridge in the two previous fiscal years. These products cover
a range of applications.
In addition to columns, Dionex manufactures suppressors that are
used to enhance detection in ion chromatography. The Company has
proprietary positions in the technology of suppression used in ion
chromatography as well as in the application of suppression techniques.
The Company's suppressors lower background conductivity while allowing
separations using higher capacity columns and more concentrated eluents
(liquids used to carry a sample through a liquid chromatography system).
In fiscal 1993, Dionex enhanced its suppression technology with the
introduction of a new AutoSuppression product. The product, called the
Self-Regenerating Suppressor (SRS)(TM), enhances IC performance while
operating with low maintenance requirements.
In March 1997, the Company introduced the SRS-II, designed to allow use
with a wide range of solvents at various temperatures.
Detectors - Detectors are used to measure the quantity of various sample
components after they have been separated in a chromatography column.
Dionex currently offers several detector products based on conductivity,
electrochemistry and absorbance, including a photodiode array detector
introduced in 1995. This range of detectors is designed to meet customer
requirements for analysis of organics, inorganics, metals, amino acids,
biological compounds and pharmaceuticals.
Service and Other - The Company also generates revenue from its Customer
Service organization through service contracts, spare part sales,
customer training and sales of other products and services. (See
Technical Support, Installation and Service below.)
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<PAGE>
Marketing and Customers
The Company's market strategy is twofold. First, in those
applications where Dionex technology is well established, the Company
works to increase demand for its chromatography systems through direct
mailings, advertising in trade publications, seminars and workshops,
conferences and expositions, and direct sales calls. Growth in these
markets results from identifying new customers in existing sales regions,
extending geographic penetration and increasing demand for the Company's
products and technical support capabilities among existing customers.
The second component of the Company's marketing strategy is to work
closely with existing and potential customers to develop new
applications. Technical support staff assist such customers in problem
definition, development of applications chemistry needed to solve
problems and providing user training and ongoing user support. By
combining this support function with direct sales efforts, the Company
works to increase the range of applications and the potential market for
its products.
The Company currently markets and distributes its products and
services through its own sales force in the United Kingdom, Germany,
Italy, France, the Netherlands, Belgium, Switzerland, Austria, Japan,
Canada and the United States. In each of these countries, the Company
maintains one or more local sales offices in order to service customers
in regional markets. In other international locations where it does not
have a direct sales force, the Company has developed a network of
distributors and sales agents.
The Company's products are used extensively in environmental
analysis and by the pharmaceutical, life science, biotechnology,
chemical, petrochemical, power generation, food and beverage and
electronics industries. Its customers include a number of the largest
industrial companies worldwide, as well as government agencies, research
institutions and universities. Geographically, sales to customers
outside of North America accounted for 61% of consolidated sales in
fiscal 1997 and 1996 and 59% of consolidated sales in fiscal 1995. No
single customer accounted for 10% or more of the Company's sales in
fiscal 1997, 1996 or 1995.
Demand for the Company's products is dependent upon the
size of the markets for its chromatography systems, the level of
capital expenditures of the Company's customers, the rate of
economic growth in the Company's major markets and competitive
considerations. There can be no assurances that the Company's
results of operations will not be adversely impacted by a change
in any of the factors listed above. The Company believes that
demand for its products does not exhibit any significant seasonal
pattern.
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Dionex manufactures its products based upon its forecast of customer
demand and maintains inventories of completed modules in advance of
receipt of firm orders from its customers. Orders are generally placed
by the customer on an as-needed basis, and products are usually shipped
within four to six weeks after receipt of an order. Dionex does not
maintain a substantial backlog, and backlog as of any particular date may
not be indicative of the Company's actual sales in any succeeding period.
The level of backlog at June 30, 1997 was $19.0 million and at June 30,
1996 was $19.1 million.
Competition
Competition in the Company's business segment is based upon the
performance capabilities of the analytical instrument, technical support
and after-market service, the manufacturer's reputation as a
technological leader and the selling price. Management believes that
performance capabilities are the most important of these criteria.
Customers measure system performance in terms of sensitivity (the ability
to discern minute quantities of a particular sample component),
selectivity (the ability to distinguish between similar components),
speed of analysis and the breadth of samples which the system can
effectively analyze. Management believes that Dionex enjoys a favorable
reputation in terms of performance capabilities, technical support and
service.
Companies competing with Dionex in the analytical instruments market
include Hewlett-Packard Company, Perkin-Elmer Company, Varian Associates,
Inc., Shimadzu Corporation and Waters Corporation. The analytical
instruments market is comprised of many different analytical techniques.
One of these analytical techniques is Ion Chromatography (IC). The
Company believes it has a major position in IC. Competitors of the
Company in IC include HPLC vendors such as Hewlett-Packard Company,
Waters Corporation, Alltech Associates and other smaller companies.
The Company believes no single competitor has a dominant position in
the analytical instruments market.
Dionex ion chromatography systems generally compete with a number of
analytical techniques used in identifying and quantifying ionic and polar
compounds. The two primary sources of competition for ion chromatography
are conventional manual and automated wet chemistry procedures and
certain modified liquid chromatography systems. Some suppliers of liquid
chromatography systems have developed a single column ion chromatography
(SCIC) method that does not use a suppressor device. SCIC methods
compete favorably with Dionex ion chromatography for the analysis of a
limited number of ions and in situations when chemical composition of the
sample is not complex or when high sensitivity is not required. The
introduction in 1993 by the Company of AutoSuppression technology
considerably improves the ease of use of chemical suppression. In
addition to SCIC products, the Company's competitors also offer other
products to compete in ion analysis and chromatography products using
technology similar to that of the Company.
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The Company's DX-500 Series competes directly with other
manufacturers' HPLC systems in certain traditional HPLC applications.
Dionex is a relatively new entrant in the highly competitive HPLC and
biological separations markets. Nonetheless, management believes that the
DX-500 Series has certain benefits over competing systems, including a
totally non-metallic flow path and the capability of performing gradient
ion chromatography, as well as HPLC, on a single analytical system.
The Company's ASE 200 competes directly with standard soxhlet,
sonication, supercritical fluid extraction and microwave extraction
techniques provided by other companies. Management believes that the ASE
200, a new extraction technology, has certain benefits compared to
competing techniques, including faster extraction time, reduced solvent
usage and built-in automation.
The Company believes that competition in the ion analysis
market will continue to increase in the future. Moreover, the
Company's entrance into the HPLC and sample extraction markets
has resulted in increased competition. Many of the companies
whose products compete with those of the Company have
substantially greater financial resources and larger technical
staffs and sales forces at their disposal. There can be no
assurances that the Company's marketing and sales efforts will
compete successfully against such other companies in the future.
Patents and Licenses
The Company has exclusive rights under patents and patent
applications licensed from the Dow Chemical Company ("Dow") (except for
rights retained by Dow and its subsidiaries) covering certain of the
Company's current products. The primary benefits of this exclusivity are
presently limited to the United States and certain other foreign
countries where patents have been issued. The licenses reserve to Dow
and its subsidiaries the right to practice the patents, and Dow has made
products covered by the patent rights for its own use. The Company
believes that Dow has not made products covered by the patent rights for
sale to third parties.
As a matter of Company policy, the Company vigorously protects its
intellectual property rights and seeks patent coverage on all
developments that it regards as material and patentable. However, there
can be no assurances that any patents held by the Company will not be
challenged, invalidated or
circumvented or that the rights granted thereunder will provide
competitive advantages to the Company. The Company's patents, including
those licensed from others, expire on various dates through 2007. The
Company believes that, while its patent portfolio has value, no single
patent or patent application is in itself essential and that the
invalidity or expiration of any single patent would not have a material
adverse effect on its business.
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The Company regards its PeakNet software as proprietary and relies
on a combination of copyrights, trademarks, trade secret laws and other
proprietary rights, laws, license agreements and other restrictions on
disclosure, copying and transferring title
to protect its rights to its software products. The Company has no
patents covering its software, and existing copyright laws afford only
limited practical protection. In addition, the laws of some foreign
countries do not protect the Company's proprietary rights to the same
extent as do the laws of the United States.
International Operations
Financial information about foreign and domestic operations and
export sales required by Item 1 of Form 10-K is incorporated
by reference to Note 12 of the Notes to Consolidated Financial Statements
at page 28 of the Registrant's 1997 Annual Report to Stockholders. A
copy of the applicable page is attached hereto as Exhibit 13.1.
The Company has subsidiaries in the United Kingdom, Germany, Italy,
France, the Netherlands, Belgium, Switzerland, Austria, Japan and Canada.
The Company's foreign sales are affected by fluctuations in currency
exchange rates and by regulations adopted by foreign governments. Export
sales are subject to certain controls and restrictions, but the Company
has not experienced any material difficulties related to these
limitations. There can be no assurances that the Company's results of
operation will not be adversely impacted by fluctuations in currency
exchange rates in the future.
Manufacturing and Suppliers
The Company produces chemicals and resins and assembles systems and
components in its California manufacturing facilities. Dionex has
developed proprietary processes for the manufacture of polystyrene-based
resins and for packing columns with these resins. The Company believes
that its resins, columns and suppressor manufacturing know-how are
critical to the performance and reliability of its chromatography
systems. The Company requires each employee to sign a nondisclosure
agreement to protect its proprietary processes. However, there can be no
assurances that these agreements will provide meaningful protection or
adequate remedies for the Company's proprietary processes in the event of
unauthorized use or disclosure.
The Company has emphasized a modular design for the principal
subsystems of its pumping flow systems, sample injection systems,
chromatography modules, detectors, and control and data analysis systems.
The Company believes that this modular approach has enabled it to meet
the wide range of system configurations required by its customers while
effectively managing inventory levels.
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Many components used in the Company's products, including
proprietary analog and digital circuitry, are manufactured by Dionex.
Other components, including packaging materials, integrated circuits,
microprocessors, microcomputers and certain detector and data analysis
modules, are acquired from other manufacturers. Most of the raw
materials, components and supplies purchased by the Company are available
from a number of different suppliers; however, a number of items are
purchased from limited or single sources of supply, and disruption of
these sources could have a temporary adverse effect on shipments and the
financial results of the Company. The Company believes alternative
sources could ordinarily be obtained to supply these materials, but a
prolonged inability to obtain certain materials or components could have
an adverse effect on the Company's financial condition or results of
operations and could result in damage to its relationship with its
customers.
Technical Support, Installation and Service
Users of the Company's chromatography systems require substantial
technical support before and after the system sale to ensure that
analysis problems are resolved. As part of its support services, the
Company's technical support staff provides, typically at no additional
cost, individual assistance in solving chemical analysis problems. The
Company offers training courses and periodically sends its customers
information on applications development. Chromatography systems sold by
the Company generally include a one-year warranty, installation and
certain user training, all at no additional cost. Service contracts may
be purchased by customers to cover equipment no longer under warranty.
Service work not performed under warranty or service contracts is
performed on a time and materials basis. The Company installs and
services its products through its own field service organization in the
United Kingdom, Germany, Italy, France, the Netherlands, Belgium,
Switzerland, Austria, Japan, Canada and the United States. Installation
and service in other foreign countries are typically provided by the
Company's distributors or agents.
Research and Development
The Company's research and development efforts are focused on
increasing the performance of its chromatography and other products and
expanding the number of chemical compounds that can be analyzed
efficiently with its products. Research and product development
expenditures were $12.5 million, $11.5 million and $10.5 million in
fiscal 1997, 1996, and 1995, respectively. The Company pursues active
development programs in the areas of system hardware, applications,
computer software, and resin and column technologies. There can be no
assurances that the Company's product development efforts will be
successful or that the products developed will be accepted by the
marketplace.
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Environmental Laws and Regulations
Compliance by the Company with federal, state and local
environmental laws during fiscal 1997 had no material effect upon capital
expenditures, earnings or its competitive position.
Employees
Dionex had 685 employees at June 30, 1997, compared with 665
employees at June 30, 1996. The Company believes that its future success
depends in large part upon its continued ability to attract and retain
highly skilled employees.
Item 2. PROPERTIES
As of September 23, 1997 the Company owned nine
buildings in Sunnyvale, California, providing 252,000
square feet of space utilized for Administration,
Marketing, Sales, Service, Research and Product
Development and Manufacturing. The Company also owns
a building utilized for Sales, Service and
Administration in Idstein, Germany.
The Company leases sales and service offices in:
Smyrna, Georgia; Houston, Texas; Westmont, Illinois;
Marlton, New Jersey; Sunnyvale, California; and in the
United Kingdom, Germany, France, Italy, the
Netherlands, Belgium, Switzerland, Austria, Japan and
Canada. In addition,the Company leases marketing and
research and development offices in Salt Lake City.
The Company's facilities are well maintained, adequate
to conduct the Company's current business and
substantially utilized by the Company.
Several of the Company's properties are located in an
area under investigation by the California Regional
Water Quality Control Board (the "Water Board".) The
Water Board's investigation addresses the presence of
certain volatile organic compounds in portions of the
local groundwater system and focuses principally on the
activities of several other companies located near the
Company. The Water Board review has encompassed the
property acquired by the Company in July 1986. The
Company believes that any remedial work affecting
the subject property will be performed by or at the
expense of other parties responsible for any release of
chemicals onto the property, or at the expense of the
previous owner of the property. As a result,
management believes that any action required by the
Water Board's investigation will not have a material
adverse effect on the Company's financial position or
results of operations.
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Item 3. LEGAL PROCEEDINGS
None.
Item 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
No matters were submitted to a vote of security holders
during the quarter ended June 30, 1997.
Executive Officers of the Registrant
The following table lists the names and positions of all current
executive officers of the Company, and their ages, as of September 18,
1997. Except as noted below, there are no other family relationships
between any director or executive officer and any other director or
executive officer of the Registrant. Executive officers serve at the
discretion of the Board of Directors.
Name Age Positions
A. Blaine Bowman(1) 51 President, Chief Executive
Officer and Director
Barton Evans, Jr. 49 Senior Vice President
Nebojsa Avdalovic 62 Vice President
Bruce L. Barton 38 Vice President
Brent J. Middleton(1) 40 Vice President
Christopher Pohl 46 Vice President
Michael W. Pope 31 Vice President
(1) Mr. Bowman and Mr. Middleton are cousins.
Mr. Bowman has served as the Registrant's President and Chief
Executive Officer and as a director since the Registrant began operations
in 1980.
Mr. Evans has served as Senior Vice President, Operations for the
Registrant since September 1993. Prior to that, he served as Vice
President, Operations and in various other capacities for the Registrant
since it began operations in 1980.
Dr. Avdalovic has served as Vice President, Research and Development
for the Registrant since August 1990. Prior to joining the Registrant,
Dr. Avdalovic served as Research Manager and Manager of Technology
Assessment for Beckman Instruments Spinco Division in Palo Alto,
California.
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Mr. Barton has served as Vice President, International Operations
for the Registrant since July 1996. Prior to that, he served as Director
of International Operations and in various other capacities since joining
the Company in 1987.
Mr. Middleton has served as Vice President, North American Sales and
Service since July 1997. Prior to that, he served as Director of North
American Sales and Service and in various other capacities since joining
the Company in 1985.
Mr. Pohl has served as Vice President, Consumables for the
Registrant since September 1996. Prior to that, he served as
Technical Director and in various other capacities for the Registrant
since the Company began operations in 1980.
Mr. Pope has served as Vice President, Finance and Administration
for the Registrant since April 1995. Prior to that, he served as
Director of Finance and Senior Financial Analyst with the Company. Mr.
Pope has been with the Company since June 1992.
PART II
Item 5. MARKET FOR REGISTRANT'S COMMON STOCK AND RELATED
STOCKHOLDER MATTERS
The information required by Item 5 of Form 10-K is
incorporated by reference to the information contained
in the section captioned "Supplemental Information" at
page 31 of the Registrant's 1997 Annual Report to
Stockholders. A copy of the applicable page is attached
hereto as Exhibit 13.1.
Item 6. SELECTED CONSOLIDATED FINANCIAL DATA
The information required by Item 6 of Form 10-K is
incorporated by reference to the information contained
in the section captioned "Selected Financial
Information" at page 15 of the Registrant's 1997 Annual
Report to Stockholders. A copy of the applicable page
is attached hereto as Exhibit 13.1.
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Item 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
RESULTS OF OPERATIONS
The following table summarizes the consolidated income statement items as
a percentage of sales.
PERCENTAGE OF NET SALES
<TABLE>
Years ended June 30 1997 1996 1995
<S> <C> <C> <C>
Net sales 100.0% 100.0% 100.0%
Cost of sales 30.6 31.1 32.0
Gross profit 69.4 68.9 68.0
Selling, general and administrative 33.3 34.8 36.2
Research and product development 8.8 8.7 8.7
Write-off of goodwill - - 1.8
Operating income 27.3 25.4 21.3
Other income - 0.8 3.4
Interest income, net .9 1.4 1.7
Income before taxes 28.2 27.6 26.4
Taxes on income 9.7 9.6 9.9
Net income 18.5% 18.0% 16.5%
</TABLE>
NET SALES AND GROSS PROFIT. In fiscal 1997, the Company reported record
sales and earnings for the 17th consecutive year. The Company's total
sales increased 7% to $142.1 million in fiscal 1997, compared with $133.0
million in fiscal 1996 and $120.0 million in fiscal 1995. The Company is
subject to the effects of currency fluctuations, which can have an impact
on reported sales and margins. Currency fluctuations reduced reported
sales by 4% in fiscal 1997 and had no effect on reported sales in fiscal
1996.
Sales growth in fiscal 1997 was split relatively evenly between our North
American and international markets. We experienced some weakness in
certain European markets, but this was offset by continued solid growth
in the Far East. Sales growth in fiscal 1996 was fueled by our
international markets, especially our European market. Sales growth in
fiscal 1996 in North America was moderate.
Sales outside of North America accounted for 61% of consolidated sales in
fiscal 1997 and 1996, and 59% in fiscal 1995. The Company sells directly
through its sales forces in the United Kingdom, Germany, Italy, France,
the Netherlands, Belgium, Switzerland, Austria, Japan, Canada and the
United States. Direct sales accounted for 88% of consolidated sales in
fiscal 1997, compared to 89% in fiscal 1996 and 91% in fiscal 1995.
International distributors and representatives in Europe, the Far East
and other international markets accounted for the balance of consolidated
sales. There were no significant price changes during the
three-year period.
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Gross profit as a percentage of consolidated sales was 69.4% in fiscal
1997, compared with 68.9% in fiscal 1996 and 68.0% in fiscal 1995. The
increase in gross profit in fiscal 1997 and 1996 was attributable to
increased sales of higher-margin products and lower manufacturing costs.
In fiscal 1997, gross profit was negatively impacted by currency
fluctuations. In fiscal 1996, a larger percentage of international
shipments also increased gross profit.
OPERATING EXPENSES. Selling, general and administrative ("SG&A")
expenses as a percentage of consolidated sales decreased to 33.3% in
fiscal 1997 from 34.8% in fiscal 1996 and 36.2% in fiscal 1995. SG&A
expenses increased 2% to $47.3 million in fiscal 1997 from $46.3 million
in fiscal 1996, due to establishment of a new direct sales subsidiary in
Austria in January 1997, increased selling costs and higher personnel-
related costs, partially offset by the effect of currency fluctuations.
SG&A expenses in fiscal 1996 increased by $2.9 million, due to increased
selling costs and higher personnel-related costs. The Company anticipates
that SG&A expenses as a percentage of sales will be in the range of 31%
to 35% in the near term.
Research and product development expenses in fiscal 1997 were 8.8% of
consolidated sales, compared with 8.7% in fiscal 1996 and 1995. The
Company's research and product development expenses increased 9% to $12.5
million in fiscal 1997 due to higher personnel and project material costs
associated with various product development projects. Research and
development spending depends on both the breadth of the Company's
research and product development efforts and the stage of specific
product development projects. The Company expects the level of research
and product development expenses as a percentage of sales to remain in
the 8% to 10% range in the near term.
WRITE-OFF OF GOODWILL. In the first quarter of fiscal 1995, the Company
wrote off the remaining goodwill of $2.2 million that resulted from the
1988 acquisition of Lee Scientific, Inc. as the Company determined that
the goodwill was not recoverable.
OTHER INCOME. Other income in fiscal 1996 included a gain of $1.0
million on the sale of undeveloped property. Proceeds (net of selling
expenses) from the sale of the property were $3.9 million. The proceeds
consisted of cash and the assumption by the buyer of an industrial
revenue bond associated with the property. In fiscal 1995, other income
included a payment of $4.1 million (net of expenses) received by the
Company when a proposed acquisition by Dionex of a business was
terminated by the seller in favor of another buyer.
16
<PAGE>
INTEREST INCOME AND EXPENSE. Interest income in fiscal 1997 was $1.4
million, compared with $2.0 million in fiscal 1996 and $2.2 million in
fiscal 1995. The decrease in fiscal 1997 was due to lower average cash
balances resulting primarily from the Company's stock repurchase program.
The decrease in interest income in fiscal 1996 was due to lower average
cash balances and lower yields. Interest expense of $85,000 in fiscal
1997 was virtually unchanged from the $93,000 reported in fiscal 1996.
Interest expense in fiscal 1996 decreased by $60,000 due to lower average
foreign borrowings and lower interest rates on the
borrowings.
INCOME TAXES. The Company's effective tax rate for fiscal 1997 was
34.5%, compared with 34.8% in fiscal 1996 and 37.6% in fiscal 1995. The
higher effective tax rate in fiscal 1995 was due to the
write-off of goodwill, discussed above, which was not deductible for
income tax purposes. The Company anticipates that its effective tax rate
will be in the 34% to 35% range in the near term.
EARNINGS PER SHARE. Earnings per share in fiscal 1997 increased to $2.06
per share, compared with $1.75 per share in fiscal 1996 and $1.34 per
share in fiscal 1995. Excluding the nonrecurring gain on sale of property
of $.05 in fiscal 1996, earnings per share in fiscal 1997 increased 21%.
Common and equivalent shares outstanding for fiscal 1997 were 12.7
million compared with 13.7 million in fiscal 1996 and 14.7 million in
fiscal 1995. The common and equivalent shares outstanding decreased each
year due to the Company's stock repurchase program. On December 29, 1995,
the Company effected a two-for-one split of its common stock. All
per-share and share amounts have been restated to reflect the split.
LIQUIDITY AND CAPITAL RESOURCES
In fiscal 1997, the Company maintained its strong liquidity and financial
condition. The Company's working capital was $48.2 million at June 30,
1997. Working capital increased slightly in fiscal 1997, even though the
Company repurchased 791,739 shares of its common stock for $31.0 million
under its stock repurchase program. In fiscal 1996, the Company
repurchased 1,601,000 shares for $49.1 million and in fiscal 1995
repurchased 1,633,156 shares for $30.9 million.
Cash generated by operating activities was $27.0 million, compared with
$27.7 million in fiscal 1996 and $28.3 million in fiscal 1995. The
decrease in operating cash flow was due to changes in operating assets
and liabilities partially offset by higher net income.
17
<PAGE>
Capital expenditures in fiscal 1997 decreased to $2.6 million, compared
with $3.0 million in fiscal 1996 and $2.0 million in fiscal 1995. The
increase in fiscal 1996 was due to the renovation of a manufacturing
building which was completed in the fourth quarter of fiscal 1996.
At June 30, 1997, the Company had not utilized any of its $14.7 million
bank lines of credit, which are used to meet working capital requirements
and reduce exposure to foreign currency fluctuations. The Company
believes that its cash flow from operations, its current cash and cash
investments and its bank lines of credit are sufficient to meet its cash
requirements for the foreseeable future.
The impact of inflation on the Company's financial position and results
of operations was not significant during any of the periods presented.
Except for historical information contained herein, the above discussion
contains forward-looking statements that involve risks and uncertainties
that could cause actual results to differ materially from those discussed
here. Such risks and uncertainties include: new product development,
including market receptiveness; foreign currency fluctuations; general
economic conditions; competition from other products; worldwide demand
for analytical instruments; existing product obsolescence; the ability to
manufacture products on an efficient and timely basis and at reasonable
cost and in sufficient volume; the ability to attract and retain talented
employees and other risks as detailed from time to time in the Company's
filings with the Securities and Exchange Commission.
Item 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
See Index to Financial Statements and Financial
Statement Schedules appearing on page 25 of this
Form 10-K.
Item 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON
ACCOUNTING AND FINANCIAL DISCLOSURE
Not Applicable.
18
<PAGE>
PART III
Item 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
Identification of Directors
The information required by Item 10 of Form 10-K with
respect to identification of directors is incorporated
by reference to the information contained in the
section captioned "Nominees" at page 2 of the
Registrant's definitive Proxy Statement for the Annual
Meeting of Stockholders to be held October 23, 1997,
which has been previously filed.
Identification of Officers
See Page 13 of this Report.
Item 11. EXECUTIVE COMPENSATION
The information required by Item 11 of Form 10-K is
incorporated by reference to the information contained
in the section captioned "Executive Compensation," at
pages 13 through 16 of the Registrant's definitive
Proxy Statement for the Annual Meeting of Stockholders
to be held October 23, 1997, which has been previously
filed.
Item 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
MANAGEMENT
The information required by Item 12 of Form 10-K is
incorporated by reference to the information contained
in the sections captioned "Security Ownership of
Certain Beneficial Owners and Management" at pages 12
and 13 of the Registrant's definitive Proxy Statement
for the Annual Meeting of Stockholders to be held
October 23, 1997, which has been previously filed.
Item 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
None.
19
<PAGE>
PART IV
Item 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON
FORM 8-K
(a)(1) Financial Statements - See Index to Financial
Statements and Financial Statement Schedules at
page 25 of this Report.
(2) Financial Statement Schedules - See Index to
Financial Statements and Financial Statement
Schedules at page 25 of this Report.
(3) Exhibits - See Exhibit Index at page 21 through
23 of this Report.
(b) Reports on Form 8-K - The Company did not file any
reports on Form 8-K during the quarter ended
June 30, 1997.
20
<PAGE>
DIONEX CORPORATION
EXHIBIT INDEX
Exhibit
Number Description Reference
3.1 Restated Certificate of Incorporation,
filed December 12, 1988...................... (5)
3.2 Bylaws, as amended on October 21, 1988......... (5)
4.1 Shareholder Rights Agreement dated June 27, 1989,
between the Registrant and The First National
Bank of Boston .............................. (4)
4.2 Amendment No. 1 to the Rights Agreement dated
November 17, 1995............................ (8)
10.1 Agreement, effective as of January 1, 1975,
between The Dow Chemical Company and
International Plasma Corporation............. (1)
10.2 Memorandum agreement, dated March 14, 1975,
between The Dow Chemical Company and
International Plasma Corporation............. (1)
10.3 Agreement, dated March 6, 1975, between
International Plasma Corporation and the
former Dionex Corporation.................... (1)
10.4 Consent to Assignment executed as of March 26,
1980, between the Dow Chemical Company and the
former Dionex Corporation.................... (1)
10.5 Amendatory Agreement, effective as of November 1,
1981,between The Dow Chemical Company and the
Registrant (with certain confidential information
deleted)........................................ (1)
10.6 Amendatory Agreement, effective as of July 1, 1982,
between The Dow Chemical Company and the
Registrant (with certain confidential information
deleted)........................................ (1)
10.7 Registrant's Supplemental Stock Option Plan
(Exhibit 28.4).................................. (2)
10.8 Registrant's Medical Care Reimbursement Plan
(Exhibit 10.17)............................... (1)
10.9 Registrant's Employee Stock Participation Plan
(Exhibit 28.3)................................ (6)
21
<PAGE>
Exhibit
Number Description Reference
10.10 Credit Agreement dated February 29, 1996 (8)
between Bank of America and the Registrant
10.11 1988 Directors' Stock Option Plan (and
related stock option grant form)
(Exhibit 10.20)........................... (3)
10.12 Dionex Corporation Stock Option Plan, as
amended and restated (formerly, the 1990
Stock Option Plan)........................ (7)
13.1 Portions of the Registrant's 1997 Annual
Report to Stockholders which are incorporated
by reference in this Annual Report on
Form 10-K.................................
21.1 Subsidiaries of Registrant..................
23.1 Independent Auditors' Consent...............
27.1 Financial Data Schedule.....................
(1) Incorporated by reference to the indicated exhibit in
Amendment No. 1 of the Registrant's Registration
Statement on Form S-1 filed December 7, 1982.
(2) Incorporated by reference to the indicated exhibit in the
Registrant's Registration Statement on Form S-8 filed
March 3, 1987.
(3) Incorporated by reference to the indicated exhibit in the
Registrant's Annual Report on Form 10-K filed September
27, 1988.
(4) Incorporated by reference to the corresponding exhibit in
the Registrant's Current Report on Form 8-K filed June 29,
1989.
(5) Incorporated by reference to the indicated exhibit in the
Registrant's Annual Report on Form 10-K filed September 20,
1989.
22
<PAGE>
(6) Incorporated by reference to the indicated exhibit in the
Registrant's Statement on Form S-8 filed May 6, 1994.
(7) Incorporated by reference to the indicated exhibit in the
Registrant's Annual Report on Form 10-K filed September 26,
1995.
(8) Incorporated by reference to the indicated exhibit in the
Registrant's Annual Report on Form 10-K filed September 26,
1996.
23
<PAGE>
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) 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: September 25, 1997 By: /s/ A. Blaine Bowman_________
A. Blaine Bowman
President and Chief Executive
Officer
Pursuant to the requirements of the Securities Exchange Act of 1934, this
report has been signed below by the following persons on behalf of the
Registrant and in the capacities and on the dates indicated.
Signature Title Date
/s/ A. Blaine Bowman President,Chief Executive September 25, 1997
A. Blaine Bowman Officer, and Director
(Principal Executive Officer)
/s/ Michael W. Pope Vice President of Finance September 25, 1997
Michael W. Pope and Administration
(Principal Financial and
Accounting Officer)
/s/ David L. Anderson Director September 25, 1997
David L. Anderson
/s/ James F. Battey Director September 25, 1997
James F. Battey
/s/ B.J. Moore Director September 25, 1997
B.J. Moore
24
<PAGE>
DIONEX CORPORATION
INDEX TO FINANCIAL STATEMENTS AND FINANCIAL STATEMENT SCHEDULES
Page
FINANCIAL STATEMENTS
Consolidated Balance Sheets at June 30, 1997 and 1996 *
Consolidated Statements of Income for the years
ended June 30, 1997, 1996 and 1995 *
Consolidated Statements of Stockholders' Equity for
the years ended June 30, 1997, 1996 and 1995 *
Consolidated Statements of Cash Flows for the years
ended June 30, 1997, 1996 and 1995 *
Notes to Consolidated Financial Statements *
Independent Auditors' Report *
*Incorporated by reference to information contained on
pages 16 through 30 of the Registrant's 1997 Annual
Report to Stockholders. A copy of the applicable pages
is attached hereto as Exhibit 13.1
FINANCIAL STATEMENT SCHEDULES
Independent Auditors' Report 25
Schedule II - Valuation and Qualifying Accounts
and Reserves 26
All other schedules are omitted because they are not required, are not
applicable or the information is included in the consolidated financial
statements or notes thereto.
25
<PAGE>
INDEPENDENT AUDITORS' REPORT
Dionex Corporation
We have audited the consolidated financial statements of Dionex
Corporation and its subsidiaries as of June 30, 1997 and 1996, and for
each of the three years in the period ended June 30, 1997, and have
issued our report thereon dated July 21, 1997; such financial statements
and report are included in your 1997 Annual Report to Stockholders and
are incorporated herein by reference. Our audits also included the
consolidated financial statement schedule of Dionex Corporation and its
subsidiaries, listed in the accompanying Index to Financial Statements
and Financial Statement Schedules. This financial statement schedule is
the responsibility of the Company's management. Our responsibility is to
express an opinion based on our audits. In our opinion, such financial
statement schedule, when considered in relation to the basic consolidated
financial statements taken as a whole, presents fairly in all material
respects the information set forth therein.
DELOITTE & TOUCHE LLP
San Jose, California
July 21, 1997
26
<PAGE>
Selected Financial Information
<TABLE>
Years ended June 30 1997 1996 1995 1994 1993
(In thousands, except per share amounts)
operating information
<S> <C> <C> <C> <C> <C>
Net sales $142,053 $133,004 $120,024 $109,526 $105,556
Cost of sales 43,458 41,406 38,428 35,152 33,027
Gross profit 98,595 91,598 81,596 74,374 72,529
Operating expenses:
Selling, general
and administrative 47,344 46,290 43,401 39,570 39,896
Research and product
development 12,521 11,527 10,500 9,902 9,295
Write-off of goodwill - - 2,168 - -
Total operating expenses59,865 57,817 56,069 49,472 49,191
Operating income 38,730 33,781 25,527 24,902 23,338
Other income - 1,003 4,130 - -
Interest income 1,396 2,034 2,202 1,465 1,996
Interest expense (85) (93) (153) (249) (456)
Income before taxes on
income 40,041 36,725 31,706 26,118 24,878
Taxes on income 13,814 12,762 11,932 9,076 8,583
Net income $ 26,227 $ 23,963 $ 19,774 $ 17,042 $ 16,295
Net income per share $2.06 $1.75 $1.34 $1.10 $1.01
Common and equivalent
shares 12,720 13,719 14,728 15,440 16,130
</TABLE>
All share and per share amounts have been restated to reflect the
two-for-one split of the Company's common stock effective December 29,1995.
The Company has paid no cash dividends.
<TABLE>
At June 30 1997 1996 1995 1994 1993
(In thousands)
balance sheet information
<S> <C> <C> <C> <C> <C>
Working capital $ 48,215 $ 47,888 $ 67,249 $ 71,414 $ 60,870
Total assets 118,163 113,186 131,780 133,278 118,082
Long-term debt - - 86 104 121
Stockholders' equity 84,163 82,204 103,871 111,139 94,874
</TABLE>
<PAGE>
Consolidated Statements of Income
<TABLE>
Years ended June 30 1997 1996 1995
(In thousands, except per share amounts)
<S> <C> <C> <C>
Net sales $142,053 $133,004 $120,024
Cost of sales 43,458 41,406 38,428
Gross profit 98,595 91,598 81,596
Operating expenses:
Selling, general and
administrative 47,344 46,290 43,401
Research and product development 12,521 11,527 10,500
Write-off of goodwill - - 2,168
Total operating expenses 59,865 57,817 56,069
Operating income 38,730 33,781 25,527
Other income - 1,003 4,130
Interest income 1,396 2,034 2,202
Interest expense (85) (93) (153)
Income before taxes on income 40,041 36,725 31,706
Taxes on income 13,814 12,762 11,932
Net income $ 26,227 $ 23,963 $ 19,774
Net income per common and
equivalent share $ 2.06 $ 1.75 $ 1.34
Common and equivalent shares
used in computing per share
amounts 12,720 13,719 14,728
</TABLE>
See notes to consolidated financial statements.
<PAGE>
Consolidated Balance Sheets
<TABLE>
At June 30 1997 1996
(In thousands, except share and per share amounts)
<S> <C> <C>
Assets
Current assets:
Cash and equivalents (including invested cash
of $16,586 in 1997 and $10,244 in 1996) $ 24,624 $ 16,986
Temporary cash investments 8,252 16,551
Accounts receivable (net of allowance for
doubtful accounts of $533 in 1997 and
$488 in 1996) 29,226 28,078
Inventories 9,479 8,258
Deferred taxes 7,136 6,590
Prepaid expenses and other 1,076 1,336
Total current assets 79,793 77,799
Property, plant and equipment, net 30,225 30,409
Other assets 8,145 4,978
$118,163 $113,186
Liabilities and Stockholders' Equity
Current liabilities:
Notes payable to banks $ - $ 273
Accounts payable 4,442 4,381
Accrued liabilities 18,639 18,398
Income taxes payable 4,905 3,642
Accrued product warranty 3,592 3,217
Total current liabilities 31,578 29,911
Deferred taxes 2,422 1,071
Commitments (Note 11)
Stockholders' equity:
Preferred stock (par value $.001 per share;
1,000,000 shares authorized; none outstanding) - -
Common stock (par value $.001 per share;
40,000,000 shares authorized; shares outstanding:
11,847,030 in 1997 and 12,369,877 in 1996) 36,323 32,683
Retained earnings 46,622 49,251
Accumulated translation adjustments (996) 34
Net unrealized gain on equity securities
available for sale 2,214 236
Total stockholders' equity 84,163 82,204
$118,163 $113,186
</TABLE>
See notes to consolidated financial statements.
<PAGE>
Consolidated Statements of Cash Flows
<TABLE>
Years ended June 30 1997 1996 1995
(In thousands)
<S> <C> <C> <C>
Cash and equivalents provided by (used for):
Cash flows from operating activities:
Net income $ 26,227 $ 23,963 $ 19,774
Adjustments to reconcile net income to
net cash provided by operating activities:
Depreciation and amortization 2,584 2,866 2,615
Deferred taxes (492) (1,160) (726)
Write-off of goodwill - - 2,168
Gain on sale of property - (1,003) -
Changes in assets and liabilities:
Accounts receivable (2,417) (2,937) (49)
Inventories (1,567) 272 1,197
Prepaid expenses and other assets 201 (60) (146)
Accounts payable 132 763 (504)
Accrued liabilities 467 4,155 2,359
Income taxes payable 1,413 308 1,325
Accrued product warranty 438 492 279
Net cash provided by operating
activities 26,986 27,659 28,292
Cash flows from investing activities:
Purchase of temporary cash investments (18,852) (33,601) (18,407)
Proceeds from maturities of
temporary cash investments 27,151 30,432 9,127
Purchase of property, plant and equipment (2,622) (3,008) (1,980)
Proceeds from sale of property - 3,812 -
Other (96) 191 214
Net cash provided by (used for)
investing activities 5,581 (2,174) (11,046)
Cash flows from financing activities:
Net change in notes payable to banks (258) (1,489) 1,042
Sale of common stock 5,810 4,255 2,880
Repurchase of common stock (31,026) (49,108) (30,878)
Other 35 (229) 68
Net cash used for financing activities (25,439) (46,571) (26,888)
Effect of exchange rate changes on cash 510 1,907 (1,370)
Net increase (decrease) in cash
and equivalents 7,638 (19,179) (11,012)
Cash and equivalents, beginning of year 16,986 36,165 47,177
Cash and equivalents, end of year $ 24,624 $ 16,986 $ 36,165
</TABLE>
See notes to consolidated financial statements.
<PAGE>
Consolidated Statements Stockholders' equity
<TABLE>
equity adjustments
common stock accumulated net unrealized
retained translation gain on
shares amount earnings adjustments securities total
(Dollars in thousands)
<S> <C> <C> <C> <C> <C> <C>
Balance at June 30, 1994 15,137,536 $33,180 $ 77,868 $ 91 $ - $111,139
Common stock issued - 209,582 2,880 - - 2,880
Repurchase of common stock(1,633,156) (3,662) (27,216) - - (30,878)
Equity adjustments - - - 956 - 956
Net income - - 19,774 - - 19,774
Balance at June 30, 1995 13,713,962 32,398 70,426 1,047 - 103,871
Common stock issued 256,915 4,255 - - - 4,255
Repurchase of common stock(1,601,000) (3,970) (45,138) - - (49,108)
Equity adjustments - - - (1,013) 236 (777)
Net income - - 23,963 - - 23,963
Balance at June 30, 1996 12,369,877 32,683 49,251 34 236 82,204
Common stock issued 268,892 5,810 - - - 5,810
Repurchase of common stock (791,739) (2,170) (28,856) - - (31,026)
Equity adjustments - - (1,030) 1,978 948
Net income - - 26,227 - - 26,227
Balance at June 30, 1997 11,847,030 $36,323 $ 46,622 $ (996) $2,214 $ 84,163
</TABLE>
See notes to consolidated financial statements.
<PAGE>
Notes to Consolidated Financial Statements
Note 1: SIGNIFICANT ACCOUNTING POLICIES
Organization. Dionex Corporation (the "Company") is a
leading manufacturer and marketer of chromatography systems
for chemical analysis. The Company's systems are used in
environmental analysis and by the pharmaceutical, life
sciences, chemical, petrochemical, power generation and
electronics industries in a variety of applications.
Principles of consolidation. The consolidated financial
statements include the Company and its subsidiaries. All
significant intercompany transactions and accounts are
eliminated in consolidation.
Cash equivalents. Cash equivalents are highly liquid debt
instruments acquired with a maturity at date of purchase of
three months or less.
Investments. The Company classifies its debt and equity
securities as "held to maturity" or "available
for sale." Securities classified as "held to maturity" are
reported at amortized cost and "available for sale"
securities are reported at fair market value, with a
corresponding recognition of the unrealized gains and losses
(net of tax effect) as a separate component of stockholders'
equity. Temporary cash investments consist of short-term
debt investments which are classified as "held-to-maturity"
securities. The Company's investments in marketable equity
securities have been classified as "available for sale" and
are included with other noncurrent assets, consistent with
the Company's investment strategy.
Inventories. Inventories are stated at the lower of
standard cost (which approximates cost on a first-in, first-
out basis) or market.
Property, plant and equipment. Property, plant and
equipment are stated at cost. Depreciation is computed using
the straight-line method based on estimated useful lives of
3 to 30 years. Leasehold improvements are amortized over the
lesser of the useful life or the remaining term of the
lease.
Statement of Financial Accounting Standards (SFAS) No. 121
"Accounting for the Impairment of Long-Lived Assets and for
Long-Lived Assets to be Disposed of" was adopted by the
Company in the first quarter of fiscal 1997. SFAS
No. 121 requires recognition of an impairment when a review
of long-lived assets indicates that, due to a change in
circumstance, the carrying value of an asset may not be
recoverable. The adoption of SFAS No. 121 did not have a
material impact on the Company's financial statements.
Intangibles. The excess of cost over net assets of
businesses acquired is amortized on a straight-line basis
over periods not exceeding seven years.
Revenue recognition. Revenue related to systems is
recognized upon shipment. Service contract revenue is
deferred and recognized on a pro rata basis over the
contractual period. Installation and product warranty costs
are accrued at the time revenue is recognized.
Taxes on income. The Company accounts for income taxes
using the asset and liability approach to account for
deferred income taxes.
Stock-based compensation plans. The Company applies
Accounting Principles Board Opinion (APB) No. 25,
"Accounting for Stock Issued to Employees" and related
interpretations in accounting for its stock-based
compensation plans (Note 8). Accordingly, no accounting
recognition is given to stock options granted at fair market
value until they are exercised. Upon exercise, net proceeds,
including tax benefits realized, are credited to equity.
<PAGE>
Stock Split. In December 1995, the Company effected a two-
for-one split of its common stock. All share and per share
amounts have been restated to reflect the stock split for
all periods presented.
Net income per share. Net income per common and equivalent
share is computed by dividing net income by the weighted
average number of common shares and dilutive common share
equivalents (stock options) outstanding during each year.
The difference between primary and fully diluted net income
per share is not significant in any year.
In February 1997, the Financial Accounting Standards Board
issued SFAS No. 128, "Earnings Per Share." The Company is
required to adopt SFAS No. 128 in the second quarter of
fiscal 1998 and will restate at that time earnings per share
(EPS) data for prior periods to conform with SFAS No. 128.
Earlier application is not permitted.
SFAS No. 128 replaces current EPS reporting requirements and
requires a dual presentation of basic and diluted EPS. Basic
EPS excludes dilution and is computed by dividing net income
by the weighted average of common shares outstanding for the
period. Diluted EPS reflects the potential dilution that
could occur if securities or other contracts to issue common
stock were exercised or converted into common stock.
If SFAS No. 128 had been in effect during the current and
prior year periods, basic EPS would have been $2.18, $1.83
and $1.38 for the years ended June 30, 1997, 1996 and 1995,
respectively. Diluted EPS under SFAS No. 128 would not have
been significantly different than EPS currently reported for
the periods.
Common stock repurchases. The Company repurchases shares in
the open market under its ongoing stock repurchase program.
For each share repurchased, the Company reduces the common
stock account by the average value per share reflected in
the account prior to the repurchase with the excess
allocated to retained earnings. The Company currently
retires all shares repurchased.
Translation of foreign currency. The Company's foreign
operations are measured using local currencies as the
functional currency. Assets and liabilities are translated
into U.S. dollars at year-end rates of exchange, and results
of operations are translated at average rates for the year.
The Company enters into foreign exchange forward contracts
to manage its exposure to fluctuations in foreign currency
exchange rates. Gains and losses on these contracts are
recorded in net income currently. These contracts generally
have maturities of approximately 30 days and require the
Company to exchange foreign currencies for U.S. dollars at
maturity. The Company does not engage in foreign currency
speculation. The Company's foreign exchange forward hedging
activities do not subject the Company to risk due to
exchange rate movements because gains and losses on these
contracts generally offset losses and gains on the
underlying items being hedged.
At June 30, 1997, the Company had forward exchange contracts
to sell foreign currencies totaling $10.1 million dollars,
including approximately $6.3 million of Japanese yen, $1.2
million of French francs, $500,000 of Swiss francs, and the
remainder in German deutschemarks, Italian lire, Dutch
gilders, British pounds, Belgium francs, Austrian shillings
and Canadian dollars.
Certain risks and uncertainties. The preparation of
financial statements in conformity with generally accepted
accounting principles requires management to make estimates
and assumptions that affect the reported amounts of assets
and liabilities and disclosure of contingent assets and
liabilities at the date of the financial statements and the
reported amounts of revenues and expenses during the
reporting period. Actual results could differ from those
estimates.
<PAGE>
Financial instruments which potentially subject the Company
to concentrations of credit risk consist principally of
investments and trade receivables. The Company invests in
high-grade instruments which it places for safekeeping with
high quality financial institutions. The Company sells its
products primarily to large organizations in diversified
industries worldwide. Credit risk is further mitigated by
the Company's credit evaluation process and the reasonably
short collection terms. The Company does not require
collateral or other security to support accounts receivable.
While the Company does maintain allowances for potential
credit losses, actual bad debt losses have not been
significant.
The Company is subject to certain risks and uncertainties
and believes that changes in any of the following areas
could have a material adverse affect on the Company's future
financial position or results of operations: new product
development, including market receptiveness; foreign
currency fluctuations; general economic conditions;
competition from other products; worldwide demand for
analytical instrumentation; existing product obsolescence;
the ability to manufacture products on an efficient and
timely basis and at reasonable cost and in sufficient
volume; the ability to attract and retain talented employees
and other risks as detailed from time to time in the
Company's filings with the Securities and Exchange
Commission.
Note 2: INVESTMENTS
The carrying value and fair market value of temporary cash
investments at June 30 classified as "held to maturity" are
as follows:
gross fair
amortized unrealized market
cost gains(losses) value
(In thousands)
1997:
U.S. corporate debt
securities $ 7,000 $ -- $ 7,000
Municipal auction rate
preferred stock 1,252 2 1,254
$ 8,252 $ 2 $ 8,254
1996:
Obligations of states
and political
subdivisions $ 4,799 $ 1 $ 4,800
U.S. corporate debt
securities 11,752 (3) 11,749
$16,551 $ (2) $16,549
All maturities during fiscal 1997 were held-to-maturity
investments. There were no sales of securities for the years
ended June 30, 1997 and 1996. All temporary cash investments
at June 30, 1997 mature within one year.
In December 1989, the Company invested $3.0 million in the
stock of Molecular Devices Corporation (MDC),a privately
held supplier of bioanalytical instrumentation and biosensor
measurement systems. The Company's President and a director
serve on the Board of Directors of MDC. In December 1995,
MDC had its initial public offering. The Company's ownership
interest in MDC is approximately 5% and is held as a long-
term investment. The Company's investment in MDC and other
equity securities have a cost basis of $3,002,000 and have
been classified as "available for sale" securities since
December 1995. Prior to this date, these investments were
accounted for at cost. At June 30, 1997 and 1996, the fair
value of these investments was $6,692,000 and $3,395,000,
respectively.
<PAGE>
Note 3: INVENTORIES
Inventories at June 30 consist of:
1997 1996
(In thousands)
Finished goods $ 3,720 $ 3,160
Work in process 2,584 1,847
Raw materials and subassemblies 3,175 3,251
$ 9,479 $ 8,258
Note 4: PROPERTY, PLANT AND EQUIPMENT
Property, plant and equipment at June 30 consist of:
1997 1996
(In thousands)
Land $ 13,352 $ 13,414
Buildings and improvements 16,652 17,094
Machinery, equipment and
tooling 10,843 9,965
Furniture and fixtures 4,661 4,006
45,508 44,479
Accumulated depreciation and
amortization (15,283) (14,070)
Property, plant and
equipment, net $ 30,225 $ 30,409
Note 5: WRITE-OFF OF GOODWILL
Operating expenses in fiscal 1995 reflect a first quarter
$2.2 million nonrecurring charge to write off the remaining
goodwill associated with the 1988 acquisition of Lee
Scientific, Inc. The Company determined that this goodwill
was not recoverable through future operations of the
business acquired.
Note 6: FINANCING ARRANGEMENTS
The Company has unsecured lines of credit with various
domestic and foreign banks totaling approximately $14.7
million which are used primarily to minimize the Company's
exposure to foreign currency fluctuations. These lines of
credit expire between December 31, 1997 and December 31,
1999. Borrowings in each country bear interest at the local
reference rates which ranged from 1.1% to 9.0% at June 30,
1997. At June 30, 1997, the Company had no borrowings
outstanding on these lines.
The weighted average interest rate on borrowings at June 30,
1996 was 1.3%.
Such line of credit agreements impose certain financial
restrictions relating to cash dividends, working capital and
tangible net worth. At June 30, 1997, the Company was in
compliance with such covenants.
One of the Company's foreign subsidiaries discounts trade
notes receivable with a bank. Total notes receivable
discounted were approximately $6,700,000 in fiscal 1997 and
$3,400,000 in fiscal 1996. The uncollected balances of notes
receivable due the discounting bank at June 30, 1997 and
1996 were approximately $2,500,000 and $1,400,000,
respectively. The Company is contingently liable for these
unpaid balances.
Total interest paid was $86,000 in 1997, $95,000 in 1996 and
$155,000 in 1995.
<PAGE>
Note 7: ACCRUED LIABILITIES
Accrued liabilities at June 30 consist of:
1997 1996
(In thousands)
Accrued payroll and related
expenses $ 7,520 $ 7,125
Deferred revenues 3,264 3,285
Accrued stock repurchases 1,945 2,611
Other accrued liabilities 5,910 5,377
$18,639 $18,398
Note 8: STOCK OPTION AND PURCHASE PLANS
Stock Option Plans. The Company has two stock option plans
(the Option Plans) under which incentive and nonqualified
options may be granted. Options are granted at the stock's
fair market value at the grant date. Options generally
become exercisable in 25% increments each year beginning one
year from the date of grant and expire five or ten years
from the grant date.
Activity under the Option Plans for the three-year period
ended June 30, 1997 is summarized below.
Weighted
average
shares exercise price
Outstanding at July 1, 1994 1,487,100 $12.55
Granted 400,200 20.68
Exercised (158,714) 10.90
Canceled (37,152) 14.82
Outstanding at June 30, 1995 1,691,434 14.58
(824,809 exercisable at a
weighted average price of $11.07)
Granted (weighted average
fair value of $13.19) 18,500 27.14
Exercised (214,615) 13.03
Canceled (48,675) 18.46
Outstanding at June 30, 1996 1,446,644 14.84
(930,143 exercisable at a
weighted average price of $12.47)
Granted (weighted average
fair value of $16.38) 364,200 32.73
Exercised (238,556) 12.75
Canceled (47,200) 22.93
Outstanding at June 30, 1997 1,525,088 $19.20
Additional information regarding options outstanding as of
June 30, 1997 is as follows:
<TABLE>
options outstanding options exercisable
weighted average weighted weighted
range of number remaining average number average
exercise prices outstanding contractual life(yrs) exercise price exercisable exercise price
<S> <C> <C> <C> <C> <C>
$ 8.75-13.00 528,213 4.04 $10.65 528,213 $10.65
13.13-20.88 625,875 6.93 18.56 358,498 18.15
25.88-39.50 371,000 9.33 32.47 4,125 27.30
$ 8.75-39.50 1,525,088 6.51 $19.20 890,836 $13.74
</TABLE>
At June 30, 1997, 783,677 shares were available for future
grants under the Option Plans.
In July 1997, the Board of Directors of the Company approved
an amendment to the Company's stock option plan which
increases the shares issuable under the plan by 400,000
shares. They also approved an amendment to the 1988
Directors' Stock Option Plan which extends the term of the
plan until July 27, 2007. The amendments are subject to
shareholder approval.
Employee Stock Purchase Plan. Under the Company's Employee
Stock Purchase Plan, (the Purchase Plan), eligible employees
are permitted to have salary withholdings to purchase shares
of common stock at a price equal to 85% of the lower of the
market value of the stock at the beginning or end of each
six-month offer period, subject to an annual limitation.
Stock issued under the plan was 30,336, 42,300 and 50,868
shares in 1997, 1996 and 1995 at weighted average prices of
$29.54, $18.62 and $14.22, respectively. The weighted
average fair value of the 1997 and 1996 awards was $11.57
and $10.67, respectively. At June 30, 1997, 676,496 shares
were reserved for future issuances under the Purchase Plan.
pro forma stock-based compensation expense. SFAS No. 123
sets forth a fair-value based method of recognizing stock-
based compensation expense. As permitted by SFAS No. 123,
the Company has elected to continue to apply APB No. 25 to
account for its stock-based compensation plans. Had
compensation costs for awards in 1997 and 1996 under the
Company's stock-based compensation plans been determined
based on the fair value at the grant dates consistent with
the method set forth under SFASNo. 123, the effect on the
Company's net income and earnings per share would have been
as follows:
1997 1996
(In thousands, except per share amounts)
Net income:
As reported $26,227 $23,963
Pro forma 24,945 23,676
Earnings per share:
As reported $ 2.06 $ 1.75
Pro forma 1.97 1.73
Because the method prescribed by SFAS No. 123 has not been
applied to options granted prior to July 1, 1995, the
resulting pro forma compensation expense may not be
representative of the amount to be expected in
future years. Pro forma compensation expense for options
granted is reflected over the vesting period; therefore,
future pro forma compensation expense may be greater as
additional options are granted.
The fair value of each option grant was estimated on the
grant date using the Black-Scholes option-pricing model with
the following weighted-average assumptions:
1997 1996
Volatility 45% 45%
Risk-free interest rate 6.02% 5.36%
Expected life of options 5.5 years 5.5 years
The Black-Scholes option-pricing model was developed for use
in estimating the fair value of traded options which have no
vesting restrictions and are fully transferable. In
addition, option-pricing models require the input of highly
subjective assumptions, including expected stock price
volatility. Because the Company's employee stock options
have characteristics significantly different from those of
traded options, and because changes in the subjective input
assumptions can materially affect the fair value estimate,
in management's opinion, the existing models do not
necessarily provide a reliable single measure of the fair
value of its employee stock options.
Note 9: EMPLOYEE BENEFIT PLANS
The Company has an employee profit sharing plan covering
most North American employees. Cash distributions are
determined by the Board of Directors and were $2,609,000 for
1997, $2,534,000 for 1996 and $1,971,000 for 1995.
The Company has a 401(k) tax deferred savings plan covering
most U.S. employees. Participants may contribute up to 10%
of their compensation and the Company makes matching
contributions ($918,000 in 1997, $874,000 in 1996 and
$834,000 in 1995) limited to 5% of each participant's
compensation. Matching contributions vest in 25% increments
each year beginning two years after the participant's date
of employment.
Note 10: TAXES ON INCOME
The provision for taxes on income consists of:
Years ended June 30 1997 1996 1995
(In thousands)
Current:
Federal $ 9,477 $ 9,286 $ 9,043
State 2,034 2,030 1,984
Foreign 2,795 2,606 1,631
Total current 14,306 13,922 12,658
Deferred:
Federal (407) (971) (721)
State (23) (130) (113)
Foreign (62) (59) 108
Total deferred (492) (1,160) (726)
$13,814 $12,762 $11,932
<PAGE>
Domestic and foreign income before taxes on income is as
follows:
Years ended June 30 1997 1996 1995
(In thousands)
Domestic $34,006 $30,871 $28,102
Foreign 6,035 5,854 3,604
$40,041 $36,725 $31,706
Deferred income taxes reflect the net tax effects of
temporary differences between the carrying amounts of assets
and liabilities for financial reporting purposes and the
amounts used for income tax purposes. The components of the
current and noncurrent deferred tax assets and liabilities
are as follows:
Years ended June 30 1997 1996
(In thousands)
Current deferred tax assets:
Accounting accruals deductible in
different periods for tax purposes $6,520 $5,955
State income tax 468 472
Other 148 163
Total deferred tax assets 7,136 6,590
Noncurrent deferred tax liabilities:
Accelerated depreciation 872 813
Foreign currency accumulated
translation adjustments - 23
Net unrealized gain on available
for sale securities 1,477 157
Other 73 78
Total deferred tax liabilities 2,422 1,071
Net deferred tax assets $4,714 $5,519
Total income tax expense differs from the amount computed by
applying the statutory Federal income tax rate to income
before taxes as follows:
Years ended June 30 1997 1996 1995
Statutory Federal income tax rate 35.0% 35.0% 35.0%
State income taxes, net of Federal
income tax effect 3.3 3.6 3.8
FSC income not taxed (3.5) (3.7) (3.6)
Foreign taxes at differing rates 1.5 1.2 .8
Goodwill - - 2.4
Other (1.8) (1.3) (.8)
34.5% 34.8% 37.6%
Income taxes paid were $11,003,000 in 1997, $13,380,000 in
1996 and $10,847,000 in 1995.
<PAGE>
The Company has not provided for Federal income taxes on
approximately $15.1 million of undistributed earnings of
foreign subsidiaries, which have been permanently reinvested
in subsidiary operations. If these earnings were distributed
to the parent company, foreign tax credits available under
current law would substantially eliminate the resulting
Federal income tax liability.
Note 11: COMMITMENTS
Certain facilities and equipment are leased under
noncancelable operating leases. The Company generally pays
taxes, insurance and maintenance costs on leased facilities
and equipment. Minimum annual rental commitments under these
noncancelable operating leases are $1,781,000 for 1998,
$1,242,000 for 1999, $903,000 for 2000, $678,000 for 2001,
$464,000 for 2002 and $1,382,000 thereafter.
Total rental expense for all operating leases was $2,855,000
in 1997, $2,763,000 in 1996 and $2,657,000
in 1995.
Note 12: BUSINESS SEGMENT INFORMATION
The Company develops, manufactures, markets and services
analytical instrumentation and related accessories in its
one industry segment.
The Company's products are manufactured in the United States
and are sold worldwide. The Company markets and distributes
internationally through both exports and foreign-based sales
operations.
The following table presents a summary of operations by
geographic region. Research and development and general
corporate expenses are reflected in operating income from
North American operations.
1997 1996 1995
(In thousands)
Net sales to unaffiliated customers:
North America $ 73,456 $ 67,033 $ 60,834
Europe 45,165 44,332 38,382
Far East 23,432 21,639 20,808
Consolidated net sales to
unaffiliated customers $142,053 $133,004 $120,024
Operating income:
North America $ 33,010 $ 28,873 $ 22,113
Europe 3,993 4,111 2,457
Far East 2,126 1,617 1,169
Eliminations (399) (820) (212)
Consolidated operating income $ 38,730 $ 33,781 $ 25,527
Identifiable assets:
North America $ 70,542 $ 62,543 $ 62,025
Europe 19,160 20,088 19,344
Far East 12,100 12,169 13,733
General corporate assets
(cash investments) 24,838 26,795 44,861
Eliminations (8,477) (8,409) (8,183)
Consolidated assets $118,163 $113,186 $131,780
<PAGE>
Interarea transfers, which have been eliminated in
consolidation and are not included in the above table,
represent transfers from domestic operations to
international subsidiaries and are based on prices that
approximate selling prices to foreign distributors.
Interarea transfers from the United States to international
subsidiaries were $40,075,000, $38,457,000 and $33,125,000
in 1997, 1996 and 1995, respectively. North American sales
to unaffiliated customers include export sales of
$17,459,000, $14,753,000 and $11,256,000, respectively, for
1997, 1996 and 1995.
Note 13: OTHER INCOME
During the third quarter of fiscal 1996, the Company sold a
parcel of undeveloped land. The Company received proceeds of
$3.9 million, net of selling expenses, from the sale. The
proceeds consisted of cash and the assumption by the buyer
of an industrial revenue bond associated with the property.
The Company recorded a pretax gain of $1.0 million on the
sale of the property.
During the first quarter of fiscal 1995, the Company
received a payment of $4.1 million (net of related expenses
incurred by the Company) when a proposed acquisition by
Dionex of a business was terminated by the seller in favor
of another buyer.
Note 14: QUARTERLY RESULTS OF OPERATIONS (unaudited)
The following is a summary of the unaudited quarterly
results of operations for the years ended June 30, 1997 and
1996.
quarter
first second third fourth
(In thousands, except per share amounts)
Fiscal 1997:
Net sales $31,508 $36,600 $36,646 $37,299
Gross profit 21,854 25,516 25,602 25,623
Net income 5,201 6,848 7,016 7,162
Net income per share $ .40 $ .54 $ .55 $ .57
Fiscal 1996:
Net sales $30,056 $34,010 $34,030 $34,908
Gross profit 20,388 23,495 23,403 24,312
Net income 4,448 5,994 7,004 6,517
Net income per share $ .32 $ .43 $ .51 $ .49
<PAGE>
INDEPENDENT AUDITORS' REPORT
The Board of Directors and Stockholders, Dionex Corporation:
We have audited the accompanying consolidated balance sheets
of Dionex Corporation and its subsidiaries as of June 30,
1997 and 1996, and the related consolidated statements of
income, stockholders' equity and cash flows for each of the
three years in the period ended June 30, 1997. These
financial statements are the responsibility of the Company's
management. Our responsibility is to express an opinion on
these financial statements based on our audits.
We conducted our audits in accordance with generally
accepted auditing standards. Those standards require that we
plan and perform the audit to obtain reasonable assurance
about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the
financial statements. An audit also includes assessing the
accounting principles used and significant estimates made by
management, as well as evaluating the overall financial
statement presentation. We believe that our audits provide a
reasonable basis for our opinion.
In our opinion, such consolidated financial statements
present fairly, in all material respects, the financial
position of Dionex Corporation and its subsidiaries at June
30, 1997 and 1996, and the results of their operations and
their cash flows for each of the three years in the period
ended June 30, 1997 in conformity with generally accepted
accounting principles.
DELOITTE & TOUCHE LLP
San Jose, California
July 21, 1997
Supplemental Stockholder Information
MARKET PRICE OF COMMON STOCK
The Company's common stock is traded in the over-the-counter
market through the Nasdaq national market system under the
symbol DNEX. The following table sets forth, for the periods
indicated, the high and low sales prices as reported by
Nasdaq.
Fiscal 1997 Fiscal 1996
Quarter high low high low
First $39 $31 1/4 $26 1/4 $22 1/2
Second 40 3/8 31 1/2 29 1/4 24 7/8
Third 47 1/2 34 3/4 39 3/4 27 3/4
Fourth 54 3/4 44 1/2 39 1/4 32
As of June 30, 1997 there were 1,700 holders of record of
the Company's common stock as shown on the records of its
transfer agent.
DIVIDENDS
The Company has paid no cash dividends on its common stock
and anticipates that for the foreseeable future it will
continue to retain its earnings for use in its business.
TRANSFER AGENT AND REGISTRAR
Boston EquiServe
P.O. Box 644
Boston, Massachusetts 02102-0644
ANNUAL MEETING
The Annual Meeting of Stockholders of Dionex Corporation
will be held at 501 Mercury Drive, Sunnyvale, California on
Thursday, October 23, 1997 at 9 a.m.
FORM 10-K
The Company's annual report to the Securities and Exchange
Commission on Form 10-K may be obtained without charge by
writing to:
Investor Relations
Dionex Corporation
1228 Titan Way
P.O. Box 3603
Sunnyvale, California 94088-3603
EXHIBIT 21.1
SUBSIDIARIES OF DIONEX CORPORATION
The following table sets forth the names of the subsidiaries of the
Registrant, the state or other jurisdiction of incorporation or
organization of each, and the names under which subsidiaries do
business as of June 30, 1997.
State or other
jurisdiction of Name under which
incorporation or subsidiary does
Name of Subsidiary organization business
Dionex (U.K.) Limited England Dionex (U.K.) Limited
Dionex GmbH Federal Republic Dionex GmbH
of Germany
Dionex S.r.l. Italy Dionex S.r.l.
Dionex S.A. France Dionex S.A.
Dionex Export Corporation U.S. Virgin Islands Dionex Export Corporation
Dionex Canada Ltd./Ltee. Canada Dionex Canada Ltd./Ltee.
Dionex B.V. The Netherlands Dionex B.V.
Nippon Dionex K.K. Japan Nippon Dionex K.K.
Dionex N.V. Belgium Dionex N.V.
Dionex (Switzerland) AG Switzerland Dionex (Switzerland) AG
Dionex Austria GmbH Austria Dionex Austria GmbH
EXHIBIT 23.1
INDEPENDENT AUDITORS' CONSENT
We consent to the incorporation by reference in Registration Statement
Nos. 33-12399, 33-40796, 33-78584 and 33-65081 of Dionex Corporation
on Form S-8 of our reports dated July 21, 1997, appearing in and
incorporated by reference in this Annual Report on Form 10-K of
Dionex Corporation for the year ended June 30, 1997.
DELOITTE & TOUCHE LLP
San Jose, California
September 23, 1997
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This schedule contains summary financial information extracted from the
consolidated balance sheets and consolidated statements of income of
Dionex Corporation and is qualified in its entirety by reference to such
consolidated financial statements.
</LEGEND>
<MULTIPLIER> 1000
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> JUN-30-1997
<PERIOD-END> JUN-30-1997
<CASH> 24624
<SECURITIES> 8252
<RECEIVABLES> 29759
<ALLOWANCES> 533
<INVENTORY> 9479
<CURRENT-ASSETS> 79793
<PP&E> 45508
<DEPRECIATION> 15283
<TOTAL-ASSETS> 118163
<CURRENT-LIABILITIES> 31578
<BONDS> 0
0
0
<COMMON> 36323
<OTHER-SE> 47840
<TOTAL-LIABILITY-AND-EQUITY> 118163
<SALES> 142053
<TOTAL-REVENUES> 142053
<CGS> 43458
<TOTAL-COSTS> 43458
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 85
<INCOME-PRETAX> 40041
<INCOME-TAX> 13814
<INCOME-CONTINUING> 26227
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 26227
<EPS-PRIMARY> 2.06
<EPS-DILUTED> 2.06
</TABLE>
