SUNNYVALE, Calif., Aug. 3 /PRNewswire-FirstCall/ -- Dionex Corporation (NASDAQ:DNEX) today announced its results of operations for its fourth quarter and full fiscal year ended June 30, 2006.
For the fourth quarter, sales were a record $75.2 million, up 6% from the $71.2 million reported for the same period last year. The unfavorable effects of currency fluctuations reduced reported sales in the fourth quarter by $0.7 million, or 1%. Diluted earnings per share were $0.27 for the fourth quarter. Net income in the fourth quarter of fiscal 2006 included costs of $0.6 million, net of tax, or $0.03 per share, related to the impact of Statement of Financial Accounting Standards (SFAS) No.123R "Accounting For Stock-Based Compensation;" costs of $1.6 million, net of tax, or $0.08 per share related to the Company's initiative to centralize some of its field related technical, administrative and support functions within North America and Europe, and other higher than expected severance costs in Europe; and special tax charges of $2.2 million, or $0.11 per share, primarily resulting from recent unfavorable tax audits.
For the fiscal year ended June 30, 2006, sales were a record $291.3 million, an increase of 4%, compared with the $279.3 million reported for the last fiscal year. The unfavorable effects of currency fluctuations reduced reported sales in fiscal 2006 by $7.3 million, or 3%. Diluted earnings per share for the year were $1.74. Net income for fiscal 2006 included costs of $3.8 million, net of tax, or $0.19 per share, related to the impact of SFAS No.123R; costs of $1.8 million, net of tax, or $0.09 per share related to the Company's initiative to centralize some of its field related technical, administrative and support functions within North America and Europe and other higher than expected severance costs in Europe; special tax charges of $2.2 million, or $0.11 per share, 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. Cash flow from operations was strong totaling $51 million for fiscal 2006.
During the fourth quarter, the Company repurchased 429,722 shares of its common stock for $24.2 million. In fiscal 2006, the Company repurchased 1,409,577 shares for $73.9 million, compared to the 1,355,900 shares repurchased for a total of $66.7 million in fiscal 2005. In addition, the Company announced today that its Board of Directors has approved the open market stock repurchase of up to an additional 1,500,000 shares of its common stock. This amount supplements the remaining 506,207 shares under the Company's share repurchase programs previously announced.
Lukas Braunschweiler, President and Chief Executive Officer, commenting on the results, said, "We reported record sales based on strong organic growth, excluding currency effects, and we gained further momentum during the fourth quarter. Our operating results were lower than anticipated due to certain charges recorded in the fourth quarter. In addition to the factors we already discussed, our gross margin in the fourth quarter was negatively affected by additional costs related to the phase-out of our Summit HPLC product and the ramp up of production for our new Ultimate 3000 HPLC product line. Our cash flow from operations was strong.
"We experienced solid sales growth in all geographic regions and in both major product lines of ion chromatography and HPLC. Sales in North America grew in the low-double digits for the quarter, and in the mid single-digits for the year. Europe reported another good quarter, with sales growing in the high-single digits for the year as measured in local currencies. Sales in Japan grew in the fourth quarter for the first time in more than a year. Outside of Japan, sales in Asia/Pacific grew by approximately 20% for the year driven by strong sales in China, Korea, India and Australia.
"Demand from our Environmental market was slightly down for the quarter, but up for the full fiscal year. Sales in our Life Science market were up for the quarter and the full fiscal year. Demand from the Chemical/Petrochemical and Food/Beverage markets was up in the fourth quarter and for the full year.
"We also achieved good growth in both ion chromatography and HPLC in fiscal 2006, with our ion chromatography products sales growing in the mid- single digits despite lower sales in Japan, and with our analytical flow HPLC product sales growing 20%. The new Ultimate 3000 system for micro-, analytical- and preparative-flow HPLC applications introduced in March 2006 has been well received by our customers and contributed significantly to our fourth quarter results.
"We are well positioned for continued solid growth in fiscal 2007. Looking at the first quarter, we estimate that sales will be in the range of $71.0- $73.0 million and that GAAP diluted earnings per share will be in the range of $0.41-$0.44. For the entire fiscal year, we estimate that sales will be in the range of $305-$315 million and GAAP diluted earnings per share will be in the range of $2.06-$2.16. Among the assumptions on which our estimates for the entire year are based are: (1) demand from our life sciences customers will continue to improve; (2) currency rates will remain consistent with the rates at the end of June 2006; (3) our gross margin will improve slightly in the first quarter and sequentially in each quarter for the rest of the fiscal year and (4) costs related to our field centralization in North America and Europe will be approximately $1.0 million, net of tax, or $0.05 per share, most of which are expected to occur in the first 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 fourth quarter and full fiscal year results in a conference call on Thursday, August 3, 2006, at 1:30 p.m. Pacific Daylight Time (PDT). To listen to the call live, please tune into the webcast via http://www.dionex.com/ . A playback of the conference call will be available from 8:00 a.m. PDT, Friday, August 4, 2006 until 5:00 p.m. PDT, Friday, September 29, 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 Years Ended
June 30, June 30,
2006 2005 2006 2005 Net sales $75,185 $71,156 $291,300 $279,317
Cost of sales 26,432 22,564 99,857 91,754
Gross profit 48,753 48,592 191,443 187,563 Operating expenses:
Selling, general and
administrative 31,022 28,644 113,241 102,539
Research and product development 5,743 5,227 22,392 20,354
Total operating expenses 36,765 33,871 135,633 122,893 Operating income 11,988 14,721 55,810 64,670 Interest income, net 678 346 1,690 1,100
Other income (expense) (452) 421 1,013 801 Income before taxes on income 12,214 15,488 58,513 66,571
Taxes on income 6,800 4,349 22,820 21,081
Net income $5,414 $11,139 $35,693 $45,490 Basic earnings per share $0.27 $0.55 $1.78 $2.20
Diluted earnings per share $0.27 $0.53 $1.74 $2.13
Shares used in computing per share
amounts:
Basic 19,849 20,357 20,013 20,655
Diluted 20,324 20,868 20,527 21,388
DIONEX CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS
AT JUNE 30, 2006 AND 2005
(In thousands)
(Unaudited) June 30, June 30,
2006 2005
ASSETS Current assets:
Cash, cash equivalents and short
term investments $51,014 $53,781
Accounts receivable, net 63,008 55,450
Inventories 28,350 26,510
Other current assets 15,706 16,342 Total current assets 158,078 152,083 Property, plant and equipment, net 58,700 53,914
Goodwill and other intangible assets 29,504 27,555
Other assets 4,120 4,601
$250,402 $238,153 LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities:
Accounts payable $9,395 $10,031
Accrued liabilities 39,673 34,939
Income taxes payable 7,100 1,593
Accrued product warranty 3,493 3,514 Total current liabilities 59,661 50,077 Deferred income taxes and other 5,359 5,027
Stockholders' equity 185,382 183,049
$250,402 $238,153
DATASOURCE: Dionex Corporation CONTACT: Craig McCollam of Dionex Corporation, +1-408-481-4107 Web site: http://www.dionex.com/
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