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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, 2002

OR

[   ]	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
	Commission File Number 0-11250

DIONEX CORPORATION

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]

The aggregate market value of the Registrant’s Common Stock held by nonaffiliates on August 23, 2002 (based upon the closing price of such stock as of such date) was $544,103,323.

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As of August 23, 2002, 21,130,031 shares of the Registrant’s Common Stock were outstanding.

Portions of the Registrant’s definitive Proxy Statement for the Annual Meeting of Stockholders to be held on October 25, 2002 are incorporated by reference in Part III of this Report.

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CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS

Certain statements set forth or incorporated by reference in this Form 10-K, as well as in our Annual Report to Stockholders for the year ended June 30, 2002, constitute “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. Words such as “believes”, “anticipates”, “expects”, “intends”, “estimates” and similar expressions are intended to identify forward-looking statements, but are not the exclusive means of identifying such statements. These statements involve risks, uncertainties and other factors that may cause our actual results, performance or achievements, or industry results, to be materially different from any future results, performance or achievements, or industry results, expressed or implied by such forward-looking statements. Such factors include, among others: the continuation or spread of the current economic downturn; risks related to international operations, including foreign currency fluctuations; the importance of meeting customer demand for new products; competition in the analytical instrumentation market; our ability to maintain inventories; the importance of attracting and retaining key personnel; and our ability to protect our proprietary information and other risk factors set forth under “Risks and Uncertainties” and elsewhere in this Form 10-K. We expressly disclaim any obligation to update or publicly release any revision to these forward-looking statements after the date of this Form 10-K.

PART I

Item 1. BUSINESS

OVERVIEW

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, 2000, 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.

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PRODUCTS

Dionex designs, manufactures, markets and services a range of liquid chromatography systems, sample preparation devices and related products that are used by chemists to separate and quantify the individual components of complex chemical mixtures in many major industrial, research and laboratory markets. Typically, the Company’s chromatography systems consist of several components including 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 that wish to expand their systems.

The Company’s chromatography systems are currently focused in several product areas: ion chromatography (IC), high performance liquid chromatography (HPLC) and capillary-/nano-HPLC. The Company also provides a mass spectrometer coupled with an IC or HPLC system. For sample preparation, the Company provides solvent extraction systems. In addition, the Company develops and manufactures columns, detectors, data collection and analysis systems and other products to be used in these product areas. Each of these product areas is described below.

Ion Chromatography - Ion Chromatography is a form of chromatography that separates ionic (charged) molecules, usually found in water-based solutions, and typically separates and detects them based on their electrical conductivity. The sale of Dionex IC systems and related columns, suppressors, detectors, automation and other products accounts for the majority of the Company’s revenues.

Dionex IC products are used in a wide range of applications, including environmental monitoring, quality control of pharmaceuticals, corrosion monitoring, evaluation of raw materials, quality control of industrial processes and products, 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.

The Company offers a variety of products for IC:

ICS-90 IC System — In fiscal 2002, the Company introduced the ICS-90, a routine, integrated IC system. The ICS-90 was designed for routine isocratic ion analysis and provides rapid start up times and stable performance.

DX-120 IC System — The DX-120 is 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 and communication links for data handling.

DX-320 IC System — The DX-320 is a high-performance, dedicated IC system with more versatility than the DX-120. The DX-320 runs isocratic applications and gradient applications in conjunction with the EG40 Eluent Generator.

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DX-600 IC System and PeakNet 6.4 — The DX-600 IC system is the Company’s most powerful and flexible ion chromatography system. The system is modular, offering both gradient and isocratic pumps, a number of chromatography enclosures or chromatography ovens, advanced autosampler options and a variety of detection methods, including conductivity, electrochemical and absorbance (including photodiode array (PDA)). The advanced electronics and modularity of the system provide enough versatility to cover any combination of demanding IC applications. The DX-600 is automated and its data are collected and managed by the PeakNet chromatography software. PeakNet’s data query, electronic signatures/approvals and “system wellness” provisions allow greater power and simplicity in running IC applications, in compliance with 21 CFR Part 11.

Process Instrumentation — In fiscal 1998, the Company began shipping 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 in the power industry for the continuous monitoring of corrosive contaminants in boiler water, the semiconductor industry for continuous monitoring of contaminants in high purity water, and the pharmaceutical and chemical industries for continuous monitoring of biological and chemical synthesis processes.

The Company’s IC systems and related accessories and software are marketed and sold worldwide.

High Performance Liquid Chromatography — HPLC is a form of chromatography that separates molecules such as proteins, carbohydrates, amino acids, pharmaceuticals and chemicals and identifies them by measuring the amount of light that the molecules absorb or emit when exposed to a light source. The Company’s HPLC customers include life sciences companies active in biological research, biotechnology, pharmaceutical drug discovery and development, and other industrial companies.

The Company offers the following products for HPLC:

Summit HPLC System and CHROMELEON 6.4 Software — The Summit HPLC System includes the new P680 pump, introduced in fiscal 2002, which comes in both isocratic and gradient versions, an absorbance detector (including PDA), and an autosampler with optional thermal cooling. The CHROMELEON software offers PDA control, multi-instrument control (including control of other companies’ equipment), validation provisions as required by 21 CFR Part 11 and many other powerful features. The Summit HPLC System and CHROMELEON are marketed and sold worldwide, except in Japan.

BioLC System — The BioLC features an inert, metal-free, polyetheretherketone (PEEK) flow path to preserve chemically unstable biomolecules. The BioLC provides third-generation pumps and detectors, including the GS50 gradient pump, the premier pump for BioLC, and a choice of electrochemical, absorbance and photodiode array detectors. These options allow for a wide range of applications so that analysts using the BioLC can quantify carbohydrates, amino acids, proteins and peptides, nucleic acids and small biomolecules. The instrument ships with PeakNet chromatography software and is marketed and sold worldwide.

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Capillary-/nano-HPLC — Capillary-/nano-HPLC is a form of HPLC that uses low flow rates for analyzing sample volumes that are much smaller than those of traditional HPLC.

The Company offers the following products for capillary-/nano-HPLC:

UltiMate Capillary-/Nano-LC System — The acquisition of LC Packings in fiscal 2001 expanded the Company’s product offerings to include capillary-/nano-LC products. The UltiMate system, a dedicated microseparation system, consists of a high-precision pump that is coupled with a proprietary method of flow splitting to provide accurate, reproducible isocratic and gradient separations from 40 µl/min. to 100 nL/min. The UltiMate also has a specially developed UV detector. This detector coupled with our proprietary capillary flow cells allows the most sensitive UV detection in microcolumn separations. Accessories for the UltiMate system include the FAMOS autosampler and the Switchos module for use with large volume samples.

In fiscal 2002, the Company expanded its offerings in the micro-analysis market by acquiring the right to manufacture and distribute the Probot microfraction collector. The Probot allows collection or dispensation of micro samples. The Probot also is used for precision spotting of MALDI-TOF mass spectrometer targets.

Mass Spectrometry — In fiscal 2000, the Company signed an agreement with Thermo Electron to sell its Finnigan AQA mass spectrometer (MS) with Dionex Summit HPLC, BioLC and DX-600 IC systems. In fiscal 2002, Thermo Electron introduced the MSQ Mass Spectrometer. The agreement with Thermo Electron allows Dionex to market LC/MS and IC/MS system to existing and new customers worldwide, particularly in the pharmaceutical market, but also for environmental testing, drug, beverage and food testing and many other applications. The MSQ mass spectrometer is a compact, benchtop, single quadrupole mass detector for HPLC/MS and IC/MS. The standard system is supplied with both Electrospray (ESI) and Atmospheric Pressure Chemical Ionization (APCI) for maximum analytical flexibility. The agreement with Thermo Electron enables Dionex to reach chemists desiring MS capabilities who previously were not among the Company’s potential customers.

Sample Preparation — The Company offers Accelerated Solvent Extraction (ASE) for automated sample preparation. The ASE 300 is an automated sample extraction instrument for large samples up to 100 mL and the ASE 200 is for samples less than 34 mL. Both ASE systems extract solid samples using common solvents at elevated temperatures and pressures. The ASE systems extract 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 and 300 systems offer several advantages over other solvent based extraction techniques including lower solvent consumption, reduced extraction time, higher throughput through automation and ease of use. ASE 200 and 300 systems are used worldwide for a number of environmental, industrial and food and beverage applications. The Company offers the Solvent Controller Module, which automates the delivery of multiple solvents to the ASE systems, and AutoASE, an add-on software feature which allows control of up to eight ASE systems from one location, as well as methods storage and documentation.

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In fiscal 2002, the Company introduced the ASE 100, a semi-automatic extraction system which handles one extraction at a time. The ASE 100 uses the same technology as the ASE 200 and 300 systems. These systems are marketed worldwide.

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 PeakNet, PeakNet PA for Process Analysis and CHROMELEON. In addition, several automated sample injection modules are available for IC and HPLC applications.

Software — PeakNet 6.4, introduced in fiscal 2002, is the Company’s latest release of Windows-based applications for IC and BioLC. PeakNet makes possible the use of multi-featured, high performance computer systems to automate control, data acquisition, analysis and reporting of the Company’s IC systems. Significant features include multi-vendor support, provisions for electronic signature and sign-off, SQL-based data management/retrieval, security features, system wellness and validation measures in compliance with 21 CFR Part 11.

The Company introduced in fiscal 2002, as part of the Summit HPLC system, the CHROMELEON 6.4 data management system. Like PeakNet, CHROMELEON is a 32-bit application designed to run on Windows 95, 98 and Windows NT and even mixed platforms. CHROMELEON operates most liquid and gas chromatography systems from a single user interface. It is an easy-to-use, flexible data management system with a built-in SQL database and client/server architecture.

The Company offers the universal interface (UI20) module that allows PeakNet workstations to accept data from other Dionex instruments, as well as instruments manufactured by other vendors.

In addition, the Company offers the universal chromatography interface (UCI-100) module that allows Chromeleon workstations to accept data from a wide variety of instruments produced by third party vendors.

Autosamplers — The Company offers a number of autosamplers that address a variety of customer needs.

The AS40 Automated Sample Injection module (AS40) is a low-cost, metal-free, rugged automated sample loading device designed especially for ion chromatography applications. The AS40 can be used with the Company’s IC systems.

For more complex needs, the Company offers the AS50 Auto-Select Autosampler (AS50). The AS50 is a high-performance, random vial access autosampler with automated sample preparation which is used with BioLC, DX-320 and DX-600 systems.

For HPLC applications, the Company offers the ASI-100 Autosampler (ASI-100) with optional thermal control for temperature-sensitive samples. The ASI-100 provides speed, simplicity, reliability and precision with an innovative in-line split-loop injection technology. The removable carousels and programmable needle depth allows the ASI-100 to accommodate a variety of sample vials and sizes. The ASI-100 is marketed with our Summit product line.

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For capillary-/nano-HPLC, the Company offers the FAMOS Micro Autosampler. The FAMOS is a fully automated micro autosampler for sample injections from 96 or 386 well plates, PCR tubes or conventional 1.5 mil vials. The unique design allows for automated injection of volumes ranging from 50 nanoliters to up to 5 microliters. FAMOS has a proprietary injection technique that guarantees high performance and virtually no sample dispersion. The FAMOS is marketed with the UltiMate Systems.

Columns and Suppressors - The Company offers a wide variety of columns for use in IC, HPLC and capillary-/nano-HPLC applications. A liquid 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.

The Company introduced several consumable products in fiscal 2002, including the IonPac Cryptand A1 Anion Exchange Column, IonPac CS16 Cation Exchange Column, IonPac CS12A-MS Cation Exchange Column, SC-CSRS Salt Converter-Cation Self-Regenerating Suppressor, and the ATC-HC Trap Column.

These products follow a steady stream of columns and chemistries introduced in the previous two years.

For HPLC applications, the Company offers its Acclaim line of silica-based reversed-phase columns for small molecule applications. Introduced in fiscal 2002, these columns are manufactured by Dionex and were developed to expand our product offerings in the HPLC market. The columns come in two particle sizes and two different chemistries, with 28 configurations. Dionex plans to introduce additional silica-based columns in fiscal 2003.

For capillary-/nano-HPLC applications, the Company offers a wide variety of micro, capillary and nano-HPLC columns. The columns range in size from 75 microns to 1 millimeter internal diameter and are packed with a variety of “stationary phase” materials.

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 the Self-Regenerating Suppressor (SRS). This product enhanced IC performance while operating with low maintenance requirements. The SRS product has been enhanced and modified, and the SRS-Ultra product is the latest in the SRS line of suppressors. The SRS-Ultra provides superior performance for trace level ion chromatography using hydroxide eluents and is used in the DX-600 and DX-320 IC systems.

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In fiscal 2001, the Company introduced the Atlas Suppressor. The Atlas Suppressor provides improved sensitivity, lower noise and faster start-up over our previous, industry leading AutoSuppression technology, raising the bar even higher in the technology of electrolytic suppression for IC. The Atlas suppressor is ideal for most IC applications requiring carbonate eluents. The Atlas works with our DX-600 and DX-320 systems, and can be extended to the DX-120 system through the use of an external power supply.

In fiscal 2001, the Company introduced the new MMS III MicroMembrane Suppressor (MMS III) for ion chromatography with the new displacement chemical regeneration mode of operation. The MMS III can be used with all Dionex ion exchange columns and is recommended for the anion and cation separations using eluents containing solvents.

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, absorbance (including the PDA-100 photodiode array detector), fluorescence and refractive index absorbance. 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 maintenance contracts, spare part sales, customer training and sales of other products and valued-added services. (See Technical Support, Installation and Service below.)

MARKETING AND CUSTOMERS

The Company’s marketing 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 new applications 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, Denmark, Japan, China, 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.

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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 2002, 60% of consolidated sales in fiscal 2001 and 58% of consolidated sales in fiscal 2000. No single customer accounted for 10% or more of the Company’s sales in fiscal 2002, 2001 or 2000.

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 its 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 these factors. The Company believes that demand for its products does not exhibit any significant seasonal pattern.

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, 2002 was $28.4 million and at June 30, 2001 was $21.6 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 that 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 Agilent Technologies, Inc., Perkin-Elmer, Inc., Shimadzu Corporation, Thermo Instruments, Varian, Inc. and Waters Corporation. The Company believes no single competitor has a dominant position in the analytical instruments market.

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The Company believes it has a major position in IC, one of many different analytical techniques. Dionex IC systems generally compete with a number of analytical techniques used in identifying and quantifying ionic and polar compounds. The primary sources of competition for IC are conventional manual and automated wet chemistry procedures and certain modified liquid chromatography systems and liquid chromatography systems using single column ion chromatography (SCIC) method that does not use a suppressor device. The Company’s competitors also offer products to compete in ion analysis and chromatography using suppression technology similar to that offered by the Company in earlier generation modules during the 1980’s. Companies competing with Dionex in IC included such vendors as Alltech Associates, Lachat, Metrohm Ltd, Shimadzu Corporation, Waters Corporation and other smaller companies.

The Company believes it has a small but growing share in HPLC, one of many different analytical techniques. The Company’s Summit HPLC system competes directly with other manufacturers’ HPLC systems in traditional HPLC applications. Dionex believes that the Summit HPLC system has certain benefits over competing systems, including advanced pump technology and a high performance autosampler. In addition, the Company believes that its CHROMELEON, software package provides competitive advantages over its competitors’ software offerings.

The Company’s BioLC system also 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 its BioLC system has certain benefits over competing systems, including a non-metallic flow path and the capability of performing gradient ion chromatography, as well as HPLC, on a single analytical system.

Competitors of the Company in HPLC include such vendors as Agilent Technologies, Inc., Shimadzu Corporation, Thermo Electron, Varian, Inc., Waters Corporation and various smaller companies.

The Company’s ASE 100, 200 and 300 systems compete directly with standard soxhlet, sonication, supercritical fluid extraction and microwave extraction techniques provided by other companies. Management believes that the ASE 200 and 300 systems have certain benefits compared to competing techniques, including faster extraction time, reduced solvent usage and built-in automation.

The Company believes that competition in the analytical instruments market will continue to increase in the future. Many of the companies whose products compete with those of the Company have substantially greater financial resources and large 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.

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PATENTS AND LICENSES

The Company has an extensive patent portfolio covering certain of the Company’s products. The primary benefits of patents are presently limited to the United States and certain other foreign countries where patents have been issued.

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 2019. 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.

The Company regards its PeakNet and CHROMELEON 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 is provided in Note 13 of the Notes to Consolidated Financial Statements.

The Company has subsidiaries in the United Kingdom, Germany, Italy, France, the Netherlands, Belgium, Switzerland, Austria, Denmark, Japan, China 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.

The Company’s business is dependent upon customer demand in the countries that it sells its products. Any fluctuations in demand for analytical instrumentation can affect the Company’s results of operations.

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MANUFACTURING AND SUPPLIERS

The Company produces chemicals and resins and assembles systems and components in its California manufacturing facilities. The Company assembles the systems and components for its Summit HPLC system in its German manufacturing facility. The Company assembles the systems and components for its UltiMate system in its Dutch manufacturing facility. 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 and 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.

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 purchased from other manufacturers. Most of the raw materials, components and supplies purchased by the Company are available from a number of different suppliers, although a number of items are purchased from limited or single sources of supply.

TECHNICAL SUPPORT, INSTALLATION AND SERVICE

Users of the Company’s chromatography systems may require technical support before and after the system sale to ensure that analysis problems are resolved. Services provided before the sale are recorded in operating expenses as incurred. Costs incurred after the sale are accrued for at the time of the system sale. 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 basic user training are provided to the customer, with revenue for these services recognized at that time the services are provided. Maintenance contracts may be purchased by customers to cover equipment no longer under warranty. Maintenance work not performed under warranty or maintenance 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, Denmark, Japan, China, Canada and the United States. Installation and service in other foreign countries are typically provided by the Company’s distributors or agents.

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RESEARCH AND PRODUCT DEVELOPMENT

The Company’s research and product 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 $15.1 million, $14.7 million and $14.9 million in fiscal 2002, 2001 and 2000, respectively. The Company pursues active development programs in the areas of system hardware, applications, computer software, suppressors, 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.

ENVIRONMENTAL LAWS AND REGULATIONS

Compliance by the Company with federal, state and local environmental laws during fiscal 2002 had no material effect upon capital expenditures, earnings or its competitive position.

EMPLOYEES

Dionex had 906 employees at June 30, 2002, compared with 912 employees at June 30, 2001. The Company believes that its future success depends in large part upon its continued ability to attract and retain highly skilled employees.

RISKS AND UNCERTAINTIES

The continuation or spread of the current economic downturn in key markets would likely harm our operating results.

We sell our products in many geographical regions throughout the world. If economic conditions in any of these regions decline or continue to decline, the demand for our products is likely to be reduced. For example, in fiscal 2002, sales of our products in North America and Japan declined due to weak economic conditions. A continuation of the economic downturn in these major markets or the spread of this downturn to other markets would likely harm our results of operations.

Foreign currency fluctuations and other risks related to international operations adversely affect our operating results.

We derive approximately 61% of our net sales from outside North America. As a result, the U.S. dollar value of our net sales varies with currency rate fluctuations. Significant increases in the value of the U.S. dollar relative to certain foreign currencies could have a material adverse effect on our results of operations. International sales may also be negatively impacted by tariffs and other trade barriers, difficulties in staffing and managing foreign operations, changes in political environments, interruptions in overseas shipments and changes in tax laws.

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Fluctuation in worldwide demand for analytical instrumentation could affect our operating results.

The demand for analytical instrumentation products can fluctuate depending upon capital expenditure cycles. Our instrumentation products are considered capital equipment by most companies and our customers may be unable to secure the necessary capital expenditure approvals due to general economic or customer specific conditions. Significant fluctuations in demand could harm our results of operations.

Fluctuations in our quarterly operating results may cause our stock price to decline.

A high proportion of our costs are fixed due in part to our significant sales, research and product development and manufacturing costs. Small declines in revenue caused by fluctuations in currency rates, worldwide demand for analytical instrumentation or other factors could disproportionately affect our quarterly operating results, which may in turn cause our stock price to decline.

If we do not timely introduce new products that are attractive to our customers, our products may become obsolete.

Our products are highly technical in nature. As a result, many of our products must be developed months or even years in advance of the potential need by a customer. If we fail to introduce new products and enhancements as demand arises or in advance of our competition, our products are likely to become obsolete over time, which would harm our operating results. Also, if the market is not receptive to our newly developed products, we will be unable to recover our costs of research and product development and marketing, and we may fail to achieve material components of our business plan.

Our revenues depend on successfully competing for market share.

The analytical instrumentation market is highly competitive and we compete with many competitors, on a local and international level, that are significantly larger than Dionex and have greater resources, including larger sales forces and technical staff. Competitors may introduce more effective and less costly products and in doing so make it difficult to acquire and retain customers. If this occurs, our market share may decline and our operating results could suffer.

Our ability to maintain inventories and meet customer demand for our products is critical to our operating results.

Most of the raw materials, components and supplies that we purchase are available from a number of suppliers. However, certain items are purchased from limited or sole source suppliers and a disruption of these sources could adversely affect our ability to ship products as needed. A prolonged inability to obtain certain materials or components would likely reduce product inventory, hinder sales and harm our reputation with customers.

We manufacture our products in three sites in Germany, the Netherlands and the United States. Any prolonged disruption to the operations at these facilities, whether due to labor unrest, supplier issues, damage to the physical plants or equipments or other reasons, could also adversely affect our results of operations.

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Our executive officers and other key employees are critical to our business, they may not remain with us in the future and finding talented replacements would be difficult.

The operations of Dionex require managerial and technical expertise. None of our executive officers and key employees has an employment contract with us and they may not remain with us in the future. In addition, our headquarters are located in Sunnyvale, California, where the demand for qualified personnel is extremely high and is likely to remain so for the foreseeable future. As a result, competition for personnel is intense and the turnover rate for qualified personnel is high. The loss of any of our executive officers or key employees could cause us to incur increased operating expenses and divert senior management resources in searching for replacements. An inability to hire, train and retain sufficient numbers of qualified employees would seriously affect our ability to conduct our business.

The success of our business is dependent in part on protection of our proprietary information and inventions, but obtaining and enforcing legal protection of our proprietary products, processes and technologies can be difficult and expensive.

Patent and trade secret protection is important to us because developing new technologies and products is time-consuming and expensive. We own many U.S. and foreign patents and intend to apply for additional patents to cover our technology and products. We may be unable to obtain issued patents from any pending or future patent applications that we own. The claims allowed under any issued patents may not be sufficiently broad to protect our technology. Third parties may seek to challenge, circumvent or invalidate issued patents that we own.

In addition to our patents, we have a vast number of unpatented proprietary products and know-how. The measures we employ to protect this technology, such as maintaining the confidentiality of our proprietary information and relying on trade secret laws, may be inadequate.

We may incur significant expense in any legal proceedings to protect our proprietary rights.

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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 August 23, 2002. 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.

Mr. Bowman has served as the Chairman of the Board since August 5, 2002. Prior to that, he served as the Company’s President and Chief Executive Officer and as a director since the Company began operations in 1980. Mr. Bowman is also a director of Molecular Devices Corporation.

Dr. Braunschweiler has served as President and Chief Executive Officer since August 5, 2002. Prior to that, he served as Group Vice-President and Head of Laboratory and Packaging Division of Mettler-Toledo and in a variety of management positions at Mettler-Toledo since 1995.

Mr. Evans has served as Executive Vice President and Chief Operating Officer for the Company since January 2001. Prior to that, he served as Vice President, Operations and in various other capacities for the Company since it began operations in 1980.

Dr. Avdalovic has served as Vice President and Chief Technology Officer for the Company since June 2001. Prior to that, he served as Vice President, Research and Development for the Company since August 1990.

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Ms. Fan has served as Vice President, Software Engineering for the Company since April 2000. Prior to that, she served as Director of Software Engineering and in various other capacities since joining the Company in 1983.

Dr. Jochum has served as Vice President, Life Sciences Business since October 2000. Prior to that, he served as Managing Director of Dionex Softron since joining the Company in October 1998. Prior to joining the Company, he served as Managing Director of Softron GmbH.

Mr. McCollam has served as Vice President and Chief Financial Officer since October 1999. Prior to that, he served as Director of Finance and Corporate Controller since joining the Company in 1993.

Mr. Middleton has served as Vice President, Sales, Service and Corporate Marketing for the Company 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 rejoined the Company as Vice President, Research and Development in June 2001. From March 2000 to June 2001, Mr. Pohl served as Vice President, Research and Development of Ciphergen Biosystems, Inc. Prior to that, he served as Vice President, Consumables and in various other capacities for the Company since joining the Company in 1981.

Mr. Thompson has served as Vice President, Hardware Engineering for the Company since May 2001. Prior to that, he served as Director of Instrument Engineering and in various other capacities since joining the Company in 1981.

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Item 2. PROPERTIES

The Company owns 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 20,000 square foot building utilized for sales, service and administration in Idstein, Germany and a 45,000 square foot building for manufacturing and administration in Germering, Germany. The Company also owns a 32,000 square foot building in Osaka, Japan for sales, service and administration.

The Company leases sales and service offices in: Atlanta, Georgia; Houston, Texas; Westmont, Illinois; Marlton, New Jersey; and in the United Kingdom, France, Italy, the Netherlands, Belgium, Switzerland, Austria, Denmark, Japan, China and Canada. In addition, the Company leases marketing and research and product development offices in Salt Lake City, Utah. The Company also leases manufacturing, marketing and research and product development offices in Amsterdam, the Netherlands. The Company’s facilities are well maintained, adequate to conduct the Company’s current business and substantially utilized by the Company.

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, 2002.

Item 5. MARKET FOR THE REGISTRANT’S COMMON STOCK AND RELATED STOCKHOLDER MATTERS

MARKET PRICE OF COMMON STOCK

The Company’s common stock is traded in the over-the-counter market through the Nasdaq National Market under the symbol DNEX. The following table sets forth, for the periods indicated, the high and low sales prices as reported by Nasdaq.

As of August 19, 2002 there were 1,135 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.

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PART II

Item 6. SELECTED CONSOLIDATED FINANCIAL DATA

Operating Information:

All share and per share amounts have been restated to reflect the two-for-one split of the Company’s common stock effective June 5, 1998. The Company has paid no cash dividends.

Balance sheet information:

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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 statement of income items as a percentage of sales.

Net Sales and Gross Profit — In fiscal 2002, Dionex reported sales of $182.4 million, a decrease of 2% compared with $186.8 million reported in fiscal 2001. Sales in fiscal 2000 were $179.5 million. The Company is subject to the effects of foreign currency fluctuations that can have a significant impact on reported sales and gross profits. Currency fluctuations decreased reported sales by 1% in fiscal 2002 and 5% in fiscal 2001.

Sales in fiscal 2002 grew in our European and distributor markets but declined in North America and Japan due to weak economic conditions. Sales growth in fiscal 2001 was attributable to growth in our European and distributor markets. In fiscal 2001, sales in North America and Japan were flat. Sales growth in local currency was strong in both our European and Japanese markets in fiscal 2001. However, a strong U.S. dollar reduced the reported growth in both regions.

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Sales outside North America accounted for 61% of net sales in fiscal 2002, 60% in fiscal 2001 and 58% in fiscal 2000. The Company sells directly through its sales forces in the United Kingdom, Germany, Italy, France, the Netherlands, Belgium, Switzerland, Austria, Denmark, Japan, China, Canada and the United States. Direct sales accounted for 90% of consolidated net sales in fiscal 2002, compared with 88% in fiscal 2001, and 91% in fiscal 2000. International distributors and representatives in Europe, Asia and other international markets accounted for the balance of the consolidated net sales. There were no significant price changes during the three-year period.

Gross profit in fiscal 2002 was 65.1% compared with 65.6% in fiscal 2001 and 68.6% in fiscal 2000. Gross profit in fiscal 2002 was lower due to the effects of foreign currency fluctuations and product mix. Gross profit in fiscal 2001 was lower due to foreign currency fluctuations, higher manufacturing costs and product mix.

Operating Expenses — Selling, general and administrative (“SG&A”) expenses as a percentage of net sales were 35.7% in fiscal 2002, compared with 34.0% in fiscal 2001 and 32.4% in fiscal 2000. SG&A expenses increased to $65.1 million in fiscal 2002, an increase of 3% from $63.4 million in fiscal 2001. The increase in SG&A expenses in fiscal 2002 was attributable to the inclusion of costs, for the entire year, of LC Packings Nederlands B.V. and LC Packings (U.S.A.), Inc. (collectively referred to as “LC Packings”), acquired in fiscal 2001 and Denmark and China subsidiaries. In fiscal 2001, the increase was attributable to the inclusion of LC Packings costs since the acquisition and additional costs related to two new subsidiaries started in January 2001. The Company anticipates that SG&A expenses will be in the range of 33% to 36% of sales in the near term.

Research and product development expenses were 8.3% of net sales in fiscal 2002 compared with 7.9% in fiscal 2001 and 8.3% in fiscal 2000. Research and product development expenses in fiscal 2002 of $15.1 million were up $400,000 compared with $14.7 million in fiscal 2001. Research and product development expenses in fiscal 2001 were virtually unchanged from the $14.9 million in fiscal 2000. Research and product 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’s anticipates that the level of research and product development expenses will remain in the range of 7% to 10% of sales in the near term.

Write-off of In-process Research and Development Acquired — Write-off of in-process research and development acquired represents nonrecurring charges of $865,000, associated with the acquisitions of LC Packings in October 2000 for technology that had not reached technological feasibility and had no alternative future use.

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The valuation of intangibles related to the acquisitions were based upon management’s estimates of after-tax net cash flow using a 25% discount rate. The valuation gave consideration to the following: (i) comprehensive due diligence concerning all potential intangibles; (ii) the value of developed and core technology, ensuring that the relative allocation to core technology and in-process research and development were consistent with the contribution of each to the final product; and (iii) the allocation to in-process research and development based upon a calculation that only considered the efforts completed as of the date of the transaction, and only the cash flows associated with one generation of products currently in-process. The valuations were performed by an independent valuation group and were deemed reasonable in light of all the quantitative and qualitative information available.

The write-off of in-process research and development related to projects that were in development, had not reached technological feasibility, had no alternative future use and for which successful development was uncertain.

For LC Packings, three of the in-process projects were to design and build new liquid chromatography modules. Two projects were to design and build new columns. The sixth project was a new generation of software. The columns and software projects were completed in fiscal 2002. The three hardware projects are scheduled to be completed in fiscal 2003. At the time of the acquisition, the estimated cost to complete these products was $1.3 million. Costs incurred by the Company through June 30, 2002 were approximately $650,000.

There can be no assurances that the Company will be able to complete the development of these products on a timely basis. Failure to complete these projects could have an adverse impact on the Company’s financial condition or results of operations.

Other Income — Other income in fiscal 2002 and 2001 of $2.1 million and $3.0 million, respectively, primarily consisted of the gain on sale of marketable equity securities.

Interest Income — Interest income in fiscal 2002 of $528,000 was lower than the $850,000 reported for fiscal 2001 due to lower interest rates despite higher average cash balances. In fiscal 2001, interest income of $850,000 was virtually unchanged from the $844,000 reported in fiscal 2000.

Interest Expense — Interest expense in fiscal 2002 of $203,000 was lower than the $353,000 reported in fiscal 2001 due to lower average borrowings. In fiscal 2001, interest expense was $353,000 due to borrowings related to the acquisition of LC Packings. In fiscal 2001, the Company capitalized $221,000 of interest related to the construction of a building in Japan.

Taxes on Income — The Company’s effective tax rate was 32.5% for fiscal 2002, 2001 and 2000. The Company’s effective tax rate is affected by the mix of taxable income among the various tax jurisdictions in which the Company does business. The Company anticipates that its effective tax rate will be in the range of 32% to 35% in the near term.

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Cumulative Effect of Change in Accounting Principle — Effective July 1, 2000, the Company adopted Staff Accounting Bulletin No. 101, “Revenue Recognition in Financial Statements” (SAB 101). SAB 101 outlines the basic criteria that must be met to recognize revenue and provides guidance for disclosures related to revenue recognition policies.

The Company’s previous policy was to recognize product installation revenue upon shipment and to accrue product installation costs at the time revenue was recognized. Upon adoption of SAB 101, the Company defers installation revenue until installation has been completed and recognizes installation costs as incurred.

The cumulative effect of the change, totaling $359,000, is shown as a one-time charge to income in the consolidated statement of income for fiscal 2001. If SAB 101 had been adopted at the beginning of fiscal 2000, the effect on the results of operations for fiscal 2000 would not have been material.

Earnings per Share — Diluted earnings per share were $1.24 for fiscal 2002 compared with $1.42 for fiscal 2001 excluding nonrecurring acquisition-related charges, consisting of revaluation of acquired inventory, write-off of in-process research and development, the related income tax effect of both of these items and the cumulative effect of change in accounting principle. Earnings per share in fiscal 2000 were $1.46. The number of shares used in computing diluted and basic earnings per share are affected by the Company’s stock repurchase program.

Liquidity and Capital Resources — At June 30, 2002, the Company had cash and cash equivalents of $22.2 million. The Company’s working capital was $62.1 million at June 30, 2002, compared with $68.1 million at June 30, 2001. Working capital decreased in fiscal 2002 due to the decrease in marketable equity securities and inventory and an increase in accrued liabilities. In addition, the Company repurchased 1,333,870 shares of its common stock for $34.5 million in fiscal 2002 under its stock repurchase program. The Company repurchased 361,000 shares for $10.5 million in fiscal 2001 and 935,850 shares for $34.6 million in fiscal 2000.

Cash generated by operating activities was $41.8 million in fiscal 2002, compared with $27.3 million in fiscal 2001 and $30.6 million in fiscal 2000. The increase in operating cash flows in fiscal 2002 was due to improvements in inventory and accounts receivable as compared with the previous year, partially offset by lower net income.

Cash used for investing activities was $5.4 million in fiscal 2002, compared with $15.8 million in fiscal 2001 and $5.8 million in fiscal 2000. The decrease in cash used for investing activities was due to $2.5 million being used as part of the acquisition of LC Packings in fiscal 2002, compared with net cash of $12.4 million relating to the LC Packings acquisition in fiscal 2001 and a decrease in capital expenditures. Capital expenditures in fiscal 2002 decreased by $2.3 million to $4.8 million, compared with $7.1 million in fiscal 2001 and $5.1 million in fiscal 2000. The higher level of capital expenditures in fiscal 2001 was due primarily to the construction of a building in Japan.

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Cash used for financing activities was $31.3 million in fiscal 2002, compared with $3.7 million in fiscal 2001 and $26.1 million in fiscal 2000. Financing activities for all three years consisted primarily of common stock repurchases as discussed above. Additionally, in connection with the construction of the building in Japan, the Company borrowed $2.7 million in long-term borrowings in fiscal 2001.

At June 30, 2002, the Company had outstanding borrowings of $2.0 million from bank lines of credit and $1.5 million from a foreign denominated mortgage note payable. At June 30, 2002 bank lines of credit totaled $32.7 million. The Company believes its cash flow from operations, its existing cash and cash equivalents and its bank lines of credit will be adequate to meet its cash requirements for the near term. The impact of inflation on the Company’s financial position and results of operations was not significant during any of the periods presented.

The following summarizes our contractual obligations at June 30, 2002, and the effect such obligations are expected to have on our liquidity and cash flows in future periods (in thousands):

At June 30, 2002, the Company had recorded $5.7 million of Other Obligations in its consolidated financial statements. Other Obligations relate to the earn-out from the acquisition of LC Packings.

Acquisition — In October 2000, the Company purchased all of the issued and outstanding shares of LC Packings for total consideration, including acquisition costs, of approximately $12.4 million.

The acquisition was accounted for by the purchase method and its results of operations have been included in the Company’s results of operations since the date of the acquisition.

In connection with the acquisition, the Company recorded nonrecurring charges of $865,000 in fiscal 2001 for the write-off of acquired in-process research and development. In addition, cost of sales in fiscal 2001 included $121,000 related to the sale of acquired inventory which had been revalued as a part of the purchase accounting.

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Risks and Uncertainties — The Company is subject to certain risks and uncertainties and believes that changes in any of the following areas could have a material adverse effect on the Company’s future financial position or results of operations. Such factors include, among others: the continuation or spread of the current economic downturn; risks related to international operations, including foreign currency fluctuations; the importance of meeting customer demand for new products; competition in the analytical instrumentation market; our ability to maintain inventories; the importance of attracting and retaining key personnel; and our ability to protect our proprietary information.

Effect of New Accounting Standards — In October 2001, the Financial Accounting Standards Board issued SFAS No. 144, “Impairment on Disposal of Long-Lived Assets”, effective for fiscal years beginning after December 31, 2001. Under SFAS No. 144, the criteria required for classifying an asset as held-for-sale have been significantly changed. Assets held-for-sale are stated at the lower of their fair values or carrying amounts, and depreciation is no longer recognized. In addition, the expected future operating losses from discontinued operations will be displayed in discontinued operations in the period in which the losses are incurred rather than as of the measurement date. More dispositions will qualify for discontinued operations treatment in the income statement under the new rules. The Company is currently evaluating the impact of SFAS No. 144 on its consolidated financial statements.

CRITICAL ACCOUNTING POLICIES AND ESTIMATES

Summary — The preparation of consolidated financial statements requires the Company 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. The Company evaluates its estimates on an on-going basis, including those related to product returns and allowances, bad debts, inventory valuation, goodwill and intangible assets, income taxes, warranty and installation provisions, and contingencies.

The Company bases its estimates on historical experience and on various other assumptions that are believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates. The Company believes the following critical accounting policies affect its more significant judgments and estimates used in the preparation of its consolidated financial statements.

Revenue Recognition Policy — We derive revenue from the sale of products and from services rendered to our customers, including installation, training and maintenance. Generally, our products contain embedded software that is essential to their functionality.

We recognize revenue in accordance with SAB No. 101 and Statement of Position 97-2, “Software Revenue Recognition”, (SOP 97-2) when persuasive evidence of an arrangement exists, the product has been delivered, the price is fixed or determinable, collection is probable and vendor specific objective evidence exists to allocate revenue to the various elements of the arrangement. Vendor specific objective evidence is based on the price charged when an element is sold separately or, if not yet sold separately, when the price is established by authorized management. Delivery is generally considered to have occurred when shipped.

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We sell our equipment through our direct sales force and through distributors and resellers. Sales through distributors and resellers are recognized as revenue upon sale to the distributor or reseller as these sales are considered to be final and no right of return or price protection exists. Customer acceptance is generally limited to performance under our published product specifications. When additional customer acceptance conditions apply, all revenue related to the sale is deferred until acceptance is obtained. Our equipment typically includes a one-year warranty. The estimated cost of product warranty claims is accrued at the time the sale is recognized, based on historical experience.

Installation and training services are not considered to be essential to the functionality of our products, and revenue related to these items is recognized when the services are completed. We recognize maintenance fees ratably over the period of the related maintenance contract. Maintenance consists of product repair services, unspecified software upgrades and telephone support.

Loss Provisions on Accounts Receivable and Inventory — We maintain allowances for doubtful accounts for estimated losses resulting from the inability of customers to make required payments. If the financial condition of our customers were to deteriorate, resulting in an impairment of their ability to make payments, additional allowances may be required. We assess collectibility based on a number of factors including, but not limited to, past transaction history with the customer, the credit-worthiness of the customer, independent credit reports, industry trends and the macro-economic environment. Sales returns and allowances are estimates of future product returns related to current period revenue. Material differences may result in the amount and timing of our revenue for any period. Historically, we have not experienced significant sales returns or bad debt losses.

We value our inventory at the lower of standard cost (which approximates to cost on a first-in, first-out basis) or market. We estimate revisions to inventory valuations based on technical obsolescence, historical demand, projections of future demand and industry and market conditions. If actual future demand or market conditions are less favorable than those projected by management, additional valuation provisions may be required. If demand or market conditions are more favorable then abnormally high margins could be realized to the extent inventory is sold which had previously been written down.

Long-Lived Assets, Intangible Assets with Finite Lives and Goodwill — We assess the impairment of long-lived assets, intangible assets with finite lives and goodwill whenever events or changes in circumstances indicate that the carrying value may not be recoverable. In addition, we assess goodwill for impairment at least annually. Factors we consider important which could trigger an impairment review include but are not limited to the following:

	•		significant underperformance relative to expected historical or projected future operating results;
	•		significant negative industry or economic trends; and
	•		significant changes or developments in strategic technology.

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When we determine that the carrying value of long-lived assets and intangible assets with finite lives may not be recoverable based upon the existence of one or more of the above or other indicators, we measure any impairment based on a projected discounted cash flow method using a discount rate determined by our management to be commensurate with the risk inherent in our current business model. Goodwill is tested for impairment by comparing the fair value of related reporting units to its carrying value. As of July 1, 2001, the Company adopted Statement of Financial Accounting Standard No. 142, “Goodwill and Other Intangible Assets” (SFAS No. 142) and as a result, we ceased to amortize approximately $13.2 million of goodwill at June 30, 2001. In lieu of amortization, we are required to perform an impairment review at least annually. We completed our review and no impairment was necessary.

Warranty — Product warranties are recorded at the time revenue is recognized for certain product shipments based on historical experience. While the Company engages in extensive product quality programs and processes, our warranty obligation is affected by product failure rates, material usage and service costs incurred in correcting a product failure. Should actual product failure rates, material usage or service costs differ from our previous estimates, revisions to the estimated warranty liability would be required.

Taxes on Income — As part of the process of preparing our consolidated financial statements, we are required to estimate our income taxes in each of the jurisdictions in which we operate. This process involves estimating our actual current tax exposure together with assessing temporary differences resulting from differing treatment of items, such as depreciation, amortization and inventory reserves, for tax and accounting purposes. These differences result in deferred tax assets and liabilities, which are included within our consolidated balance sheets. We must then assess the likelihood that our deferred tax assets will be recovered from future taxable income and, to the extent we believe that recovery is not likely, we must establish a valuation allowance. In the event that actual results differ from these estimates, we may need to revise the valuation allowance, which could materially impact our financial position and results of operations.

Item 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

We are exposed to financial market risks from fluctuations in foreign currency exchange rates, interest rates and stock prices of marketable equity securities. With the exception of the stock price volatility of our marketable equity securities, we manage our exposure to these and other risks through our regular operating and financing activities and, when appropriate, through our hedging activities. Our policy is not to use hedges or other derivative financial instruments for speculative purposes. We deal with a diversified group of major financial institutions to limit the risk of nonperformance by any one institution on any financial instrument. Separate from our financial hedging activities, material changes in foreign exchange rates, interest rates and, to a lesser extent, commodity prices could cause significant changes in the costs to manufacture and deliver our products and in our customers’ buying practices. We have not substantially changed our risk management practices during fiscal 2002 and do not currently anticipate significant changes in financial market risk exposures in the near future that would require us to change our risk management practices.

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Foreign Currency Exchange — Revenues generated from international operations are generally denominated in foreign currencies. We enter into outright forward foreign exchange contracts to hedge against fluctuations of intercompany account balances. Market value gains and losses on these hedge contracts are substantially offset by fluctuations in the underlying balances being hedged, and the net financial impact has not been material in any of the three years presented. At June 30, 2002 and 2001, our primary net foreign currency market exposures included Euros, Yen, British pounds, Swiss francs and Canadian dollars.

A sensitivity analysis assuming a hypothetical 10% movement in foreign exchange rates applied to our hedging contracts and underlying balances being hedged at June 30, 2002 and 2001, indicated that these market movements would not have a material effect on our business, operating results or financial condition. Actual gains or losses in the future may differ materially from this analysis, depending on actual changes in the timing and amount of interest rate and foreign currency exchange rate movements and our actual balances and hedges. Foreign currency rate fluctuations can impact the U.S. dollar translation of our foreign operations in our consolidated financial statements. Currency fluctuations decreased reported sales by 1%, 5% and 1% in fiscal 2002, 2001 and 2000, respectively.

Interest and Investment Income — Our interest and investment income is subject to changes in the general level of U.S. interest rates. Changes in U.S. interest rates affect the interest earned on our cash equivalents and short-term investments. A sensitivity analysis assuming a hypothetical 10% movement in interest rates applied to our investment balances at June 30, 2002 and 2001, indicated that such market movement would not have a material effect on our business, operating results or financial condition. Actual gains or losses in the future may differ materially from this analysis, depending on our actual balances and changes in the timing and amount of interest rate movements.

Marketable Equity Securities — We are exposed to market price risks on our marketable equity securities. These investments are in publicly traded companies in the laboratory analytical instruments sector. We do not attempt to reduce or eliminate our market exposure on these securities. A 50% adverse change in the equity price would result in an approximate $1 million and $3 million decrease in the fair value of our marketable equity securities as of June 30, 2002 and 2001, respectively.

Debt and Interest Expense — A sensitivity analysis assuming a hypothetical 10% movement in interest rates applied to our outstanding debt balance at June 30, 2002 and 2001, indicated that such market movement would not have a material effect on our business, operating results or financial condition. Actual gains or losses in the future may differ materially from this analysis, depending on changes in the timing and amount of interest rate movements.

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Item 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

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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, 2002 and 2001, and the related consolidated statements of income, stockholders’ equity and cash flows for each of the three years in the period ended June 30, 2002. 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 auditing standards generally accepted in the United States of America. 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, 2002 and 2001, and the results of their operations and their cash flows for each of the three years in the period ended June 30, 2002 in conformity with accounting principles generally accepted in the United States of America.

DELOITTE & TOUCHE LLP

San Jose, California
July 29, 2002

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CONSOLIDATED BALANCE SHEETS

See notes to consolidated financial statements.

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CONSOLIDATED STATEMENTS OF INCOME

See notes to consolidated financial statements.

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CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY