SUNNYVALE, Calif., May 2 /PRNewswire-FirstCall/ -- Dionex Corporation today announced its results of operations for its third quarter and first nine months ended March 31, 2006.
For the third quarter, sales were a record $73.7 million, up 4% from the $70.8 million reported for the same period last year. The unfavorable effects of currency fluctuations reduced reported sales in fiscal 2006 by $4.4 million, or 6%. Diluted earnings per share were $0.50 for the third quarter. Net income in the third quarter of fiscal 2006 included costs of $1.0 million, net of tax, or $0.05 per share, related to the adoption of Statement of Financial Accounting Standards (SFAS) No.123R and the initiative to centralize some of the field related technical, administrative and support functions within North America and Europe. Cash flow from operations was very strong, totaling $15 million for the quarter, up approximately 40% from the third quarter of last year.
For the first nine months of fiscal 2006, sales were a record $216.1 million, an increase of 4%, compared with the $208.2 million reported for the first nine months of fiscal 2005. The unfavorable effects of currency fluctuations reduced reported sales in fiscal 2006 by $6.8 million, or 3%. Diluted earnings per share were $1.47 for the first nine months of fiscal 2006. Net income in the first nine months of fiscal 2006 included costs of $3.4 million, net of tax, or $0.17 per share, related to the impact of SFAS No.123R and the initiative to centralize some of the field related technical, administrative and support functions within North America and Europe and other income of $1.0 million, net of tax, or $0.05 per share, related to a one-time gain from the favorable settlement of a patent litigation in the first quarter. Our cash flow from operations was very strong, totaling $44 million for the first nine months of fiscal 2006, up 13% from the first nine months of fiscal 2005.
During the third quarter, the Company repurchased 394,672 shares of its common stock for $21.3 million. In the first nine months of fiscal 2006, a total of 979,855 shares were repurchased for $49.7 million.
Lukas Braunschweiler, President and Chief Executive Officer, commenting on the results, said, "We are pleased with the results for the third quarter. We reported record third quarter sales based on strong organic growth of 10%, excluding currency effects. We gained strong momentum towards the end of the quarter. Our margins and cash flow from operations were strong. These results were achieved despite the U.S. dollar appreciating more than we anticipated at the beginning of the quarter.
"We experienced stronger growth in all geographic regions and in both major product lines of ion chromatography and HPLC. Sales in North America grew slightly for the quarter. Europe reported another strong quarter as sales grew in the mid-single digits in reported dollars and 17% in local currency. Sales in our Asia/Pacific region grew slightly in reported dollars and 10% in local currency. Sales in the Asia/Pacific region were again affected by weaker sales in Japan, despite that the demand in Japan strongly improved in the second part of the quarter. Outside of Japan, sales in Asia/Pacific grew by approximately 30% for the quarter driven by strong sales in Korea, India and Australia.
"Demand from our life sciences and environmental markets were substantially up in the third quarter. Chemical/Petrochemical was up slightly, while demand in the Food and Beverage, Electronics and Power markets declined during the quarter.
"We saw growth in both ion chromatography and HPLC in the third quarter. Ion chromatography grew in the low single digits despite continued lower sales in Japan. Our HPLC products grew again in the double digits for the quarter reflecting the increasing demand for our products worldwide. We introduced the new Ultimate 3000 system for micro-, analytical- and preparative-flow HPLC applications at the Pittsburgh Conference in March 2006. The initial customer response has been very favorable.
"Given the good momentum in the third quarter, we believe that we are well positioned for solid growth in the fourth quarter of fiscal 2006. For the entire fiscal year, we estimate sales will be in the range of $291-$299 million and diluted earnings per share will be in the range of $2.01-$2.13. These estimates for the entire year are based on the following assumptions: (1) demand from our life sciences customers will continue to improve; (2) foreign currency rates will have an unfavorable impact of 2-3% on our sales growth for the quarter, assuming that currency rates remain consistent with the rates at the end of March; and (3) costs related to our field centralization in North America and Europe will be approximately $0.5 million, net of tax, or $0.02 per share in the fourth quarter."
Dionex Corporation is a leading manufacturer and marketer of chromatography systems for chemical analysis. The Company's systems are used in environmental analysis and by the life sciences, food and beverage, chemicals, petrochemicals, power generation and electronics industries in a variety of applications.
Management of the Company will discuss the third quarter and first nine months results in a conference call on Tuesday, May 2, 2006, at 1:30 p.m. Pacific Time (PT). To listen to the call live, please tune into the webcast via www.dionex.com. A playback of the conference call will be available form 8:00 a.m. PT, Wednesday, May 3, 2006 until 5:00 p.m. PT, Friday, June 30, 2006.
Certain statements contained herein that are not purely historical may be deemed to be forward-looking statements that involve risks and uncertainties. The Company's actual results could differ materially from those discussed herein. Factors that may cause actual results to differ from these statements are foreign currency fluctuations, competition from other products, economic conditions in the areas in which the company sells its products, and demand for analytical instrumentation. These factors and other risks and uncertainties are discussed greater detail in the Company's reports on Form 10-K and 10-Q filed with the Securities and Exchange Commission.
DIONEX CORPORATION CONDENSED CONSOLIDATED STATEMENTS OF INCOME (In thousands, except per share amounts) (Unaudited) Three Months Ended Nine Months Ended March 31, March 31, 2006 2005 2006 2005 Net sales $73,674 $70,801 $216,115 $208,161 Cost of sales 25,126 22,941 73,425 69,190 Gross profit 48,548 47,860 142,690 138,971 Operating expenses: Selling, general and administrative 27,739 26,060 82,219 73,895 Research and product development 5,675 4,801 16,649 15,127 Total operating expenses 33,414 30,861 98,868 89,022 Operating income 15,134 16,999 43,822 49,949 Interest income, net 459 347 1,012 754 Other income (expense), net (73) 67 1,465 380 Income before taxes on income 15,520 17,413 46,299 51,083 Taxes on income 5,155 5,453 16,020 16,732 Net income $10,365 $11,960 $30,279 $34,351 Basic earnings per share $0.52 $0.58 $1.51 $1.66 Diluted earnings per share $0.50 $0.56 $1.47 $1.59 Shares used in computing per share amounts: Basic 20,049 20,763 20,067 20,755 Diluted 20,542 21,543 20,595 21,561 DIONEX CORPORATION CONDENSED CONSOLIDATED BALANCE SHEETS AT MARCH 31, 2006 AND JUNE 30, 2005 (In thousands) (Unaudited) March 31, June 30, 2006 2005 ASSETS Current assets: Cash, cash equivalents and short term investments $64,567 $53,781 Accounts receivable, net 57,645 55,450 Inventories 27,346 26,510 Other current assets 15,439 16,342 Total current assets 164,997 152,083 Property, plant and equipment, net 57,349 53,914 Goodwill and other intangible assets 29,474 27,555 Other assets 4,583 4,601 $256,403 $238,153 LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities: Accounts payable 10,083 10,031 Accrued liabilities 37,373 34,939 Income taxes payable 3,770 1,593 Accrued product warranty 3,386 3,514 Total current liabilities 54,612 50,077 Deferred income taxes and other 5,410 5,027 Stockholders' equity 196,381 183,049 $256,403 $238,153
Dionex CorporationCONTACT: Craig McCollam of Dionex Corporation, +1-408-481-4107
Web site: http://www.dionex.com//
