SUNNYVALE, Calif., Jan. 31 /PRNewswire-FirstCall/ -- Dionex Corporation (NASDAQ:DNEX) today announced its results of operations for its second quarter and first six months ended December 31, 2005.
For the second quarter of fiscal 2006, sales were $74.3 million, up from the $74.2 million reported in the second quarter of fiscal 2005. The unfavorable impact of currency fluctuations reduced sales by $2.7 million, or 4%, for the quarter compared to the second quarter of fiscal 2005. Diluted earnings per share were $0.53 for the second quarter. This figure included compensation cost of $1.1 million, net of tax, related to the impact of Statement of Financial Accounting Standards (SFAS) No.123R. Cash flow from operations was very strong, totaling $18 million for the quarter.
For the first six months of fiscal 2006, sales were $142.4 million, an increase of 4%, compared with the $137.4 million reported for the first six months of fiscal 2005. The unfavorable impact of currency fluctuations reduced sales by $2.4 million, or 2%, for the first six months compared with the first six months of fiscal 2005. Diluted earnings per share for the first six months of fiscal 2006 were $0.97. This figure included compensation cost of $2.4 million, net of tax, related to the impact of SFAS No.123R and other income of $1.0 million, net of tax, related to a one-time gain from the favorable settlement of a patent litigation in the first quarter.
During the second quarter of fiscal 2006, the Company repurchased 199,283 shares of its common stock for $9.6 million. In the first six months of fiscal 2006, a total of 585,183 shares were repurchased for $28.4 million.
Lukas Braunschweiler, President and Chief Executive Officer, commenting on the results, said, "We are pleased with the results for this quarter; meeting sales and EPS guidance. We reported record sales over a very strong second quarter last year, strongly improving our gross profit and operating income margins sequentially. These results were achieved despite challenges experienced in Japan and a stronger U.S. dollar than what we anticipated at the beginning of the quarter.
"We experienced continued growth in all geographic regions on a currency adjusted basis and in both major products lines of ion chromatography and HPLC. Sales in North America grew in the single digits representing an improvement from the first quarter. Sales in Europe slightly declined in reported dollars but grew in the mid-single digits in local currencies. Sales in Asia/Pacific grew in the low single digits for the quarter, mainly driven by higher demand in the environmental market. Sales in the Asia/Pacific region were again affected by Japan which saw weaker demand due to continued lower governmental spending. Outside of Japan, sales in Asia/Pacific grew 20% for the quarter driven by strong sales in China and India.
"Demand from our life sciences and environmental markets was up this quarter, partially offset by weaker demand in our chemical/petrochemical, food and beverage, power and electronics markets.
"At the end of the second quarter, we started the implementation of an initiative to centralize some of our field related technical, administrative and support functions within North America and Europe. This initiative is designed to improve our sales and service productivity and customer support and to streamline the related business processes. The initiative will be implemented during the next three quarters. We estimate costs related to this initiative will be approximately $1.5 million, net of tax, which will be incurred over the next three quarters. This initiative is estimated to result in savings in annual operating expenses of approximately $2 million when fully implemented.
"We experienced good momentum in the second quarter and saw growth in our two largest markets. We believe that we are well positioned for solid growth in the second half of fiscal 2006. We estimate that sales in the third quarter of fiscal 2006 will be in the range of $73-$77 million and diluted earnings per share will be in the range of $0.50-$0.56. For the entire year, we estimate that sales will be in the range of $290-$300 million and diluted earnings per share will be in the range of $2.03-$2.11. Excluding the projected stock based compensation expenses related to SFAS No.123R and the aforementioned centralization initiative, our non-GAAP earnings per share will be in the range of $0.56-$0.62 for the third quarter and $2.27-$2.35 for the entire fiscal year. These estimates for the third quarter and the remainder of the fiscal year are based on the following assumptions: (a) demand from our pharmaceutical customers will further improve from the levels observed in the first half of calendar 2005; and (b) foreign currency rates will continue to have a significant unfavorable impact for the remainder of the fiscal year." 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.
The Company will discuss second quarter results in a conference call on Tuesday, January 31, 2006, at 1:30 p.m. Pacific Time (PT). 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. PT, Wednesday, February 1, 2006 until 5:00 p.m. PT, Friday, March 31, 2006.
Certain statements contained herein that are not purely historical are forward-looking statements. Factors that may affect sales and earnings causing actual results to differ from these statements are foreign currency fluctuations, competition from other products, economic conditions in the area in which the company sells its products, and existing product obsolescence. These factors and other risk and uncertainties are discussed in greater detail in the Company's reports on Form's 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 Six Months Ended
December 31, December 31,
2005 2004 2005 2004 Net sales $74,341 $74,152 $142,441 $137,360
Cost of sales 24,529 24,673 48,299 46,249
Gross profit 49,812 49,479 94,142 91,111 Operating expenses:
Selling, general and
administrative 27,800 25,417 54,480 47,835
Research and product development 5,440 5,397 10,974 10,326
Total operating expenses 33,240 30,814 65,454 58,161 Operating income 16,572 18,665 28,688 32,950 Interest income, net 295 257 553 407
Other income (expense) 65 (142) 1,538 313 Income before taxes on income 16,932 18,780 30,779 33,670
Taxes on income 6,032 6,053 10,865 11,279
Net income $10,900 $12,727 $19,914 $22,391 Basic earnings per share $0.54 $0.61 $0.99 $1.08
Diluted earnings per share $0.53 $0.59 $0.97 $1.04
Shares used in computing per share
amounts:
Basic 20,038 20,783 20,072 20,750
Diluted 20,554 21,647 20,614 21,570
DIONEX CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS
AT DECEMBER 31, 2005 AND JUNE 30, 2005
(In thousands)
(Unaudited) December 31, June 30,
2005 2005
ASSETS Current assets:
Cash, cash equivalents and short
term investments $60,366 $53,781
Accounts receivable, net 57,141 55,450
Inventories 25,728 26,510
Other current assets 13,984 16,342 Total current assets 157,219 152,083 Property, plant and equipment, net 55,935 53,914
Goodwill and other intangible assets 29,593 27,555
Other assets 4,492 4,601
$247,239 $238,153 LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities:
Accounts payable $9,513 $10,031
Accrued liabilities 35,696 34,939
Income taxes payable 2,506 1,593
Accrued product warranty 3,549 3,514 Total current liabilities 51,264 50,077 Deferred income taxes and other
liabilities 4,076 5,027
Stockholders' equity 191,899 183,049
$247,239 $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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