UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 10-Q


þ		QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended March 31, 2011


o		TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

Commission File Number 0-11250

DIONEX CORPORATION

(Exact Name of Registrant as Specified in its Charter)


Delaware		94-2647429

(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification No.)

1228 Titan Way, Sunnyvale, California		94085

(Address of principal executive offices)		(Zip Code)

(408) 737-0700
(Registrant’s Telephone Number, including Area Code)

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 þ NO o

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). YES þ NO o

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. (Check one):


Large accelerated filer þ	Accelerated filer o	Non-accelerated filer o	Smaller reporting company o
		(Do not check if a smaller reporting company)

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act) YES o NO þ

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of May 2, 2011:


CLASS		NUMBER OF SHARES

Common Stock		17,515,078

DIONEX CORPORATION
INDEX


	Page (s)
PART I. FINANCIAL INFORMATION
ITEM 1. Financial Statements		3
Condensed Consolidated Balance Sheets as of March 31, 2011 and June 30, 2010		3
Condensed Consolidated Statements of Income for the Three and Nine months Ended March 31, 2011 and 2010		4
Condensed Consolidated Statements of Cash Flows for the Nine months Ended March 31, 2011 and 2010		6
Notes to Condensed Consolidated Financial Statements		7
ITEM 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations		18
ITEM 3. Quantitative and Qualitative Disclosures about Market Risk		23
ITEM 4. Controls and Procedures		24
PART II. OTHER INFORMATION		24
ITEM 1. Legal Proceedings		24
ITEM 1A. Risk Factors		24
ITEM 6. Exhibits
SIGNATURES		31
Exhibit 10.3
Exhibit 10.13
Exhibit 31.1
Exhibit 31.2
Exhibit 32.1
Exhibit 32.2
EX-101 INSTANCE DOCUMENT
EX-101 SCHEMA DOCUMENT
EX-101 CALCULATION LINKBASE DOCUMENT
EX-101 LABELS LINKBASE DOCUMENT
EX-101 PRESENTATION LINKBASE DOCUMENT

Part I. Financial Information

Item 1. Financial Statements

DIONEX CORPORATION

CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands, except share and per share amounts)
(Unaudited)


	March 31,		June 30,
	2011		2010
ASSETS
Current assets:
Cash and cash equivalents	$	107,328	$	69,830
Short-term investments		2		448
Accounts receivable (net of allowance for doubtful accounts of $537 at March 31, 2011 and $543 at June 30, 2010)		96,242		86,780
Inventories		47,943		37,458
Deferred taxes		12,912		14,036
Prepaid expenses and other current assets		25,999		18,991

Total current assets		290,426		227,543
Property, plant and equipment, net		83,758		76,062
Goodwill		36,314		35,013
Intangible assets, net		16,101		13,859
Other assets		10,285		9,511

	$	436,884	$	361,988

LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Borrowings under line of credit	$	49	$	3,149
Accounts payable		19,030		17,303
Accrued liabilities		38,369		33,980
Deferred revenue		27,497		25,203
Income taxes payable		4,677		5,247
Accrued product warranty		2,841		2,532

Total current liabilities		92,463		87,414
Deferred and other income taxes payable		20,987		16,427
Other long-term liabilities		4,806		7,272
Commitments and other contingencies (Note 12)
Stockholders’ equity:
Dionex Corporation stockholders’ equity
Preferred stock (par value $.001 per share; 1,000,000 shares authorized; none outstanding)		—		—
Common stock (par value $.001 per share; 80,000,000 shares authorized; issued and outstanding: 17,516,089 shares at March 31, 2011 and 17,437,276 shares at June 30, 2010)		228,871		207,855
Retained earnings		67,529		34,195
Accumulated other comprehensive income		19,856		6,733

Total Dionex Corporation stockholders’ equity		316,256		248,783
Noncontrolling interests		2,372		2,092

Total stockholders’ equity		318,628		250,875

	$	436,884	$	361,988

See notes to condensed consolidated financial statements.

DIONEX CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(In thousands, except per share amounts)
(Unaudited)


	Three Months Ended
	March 31,
	2011			2010
Net sales	$	123,090		$	112,782
Cost of sales		43,426			35,295

Gross profit		79,664			77,487

Operating expenses:
Selling, general and administrative		45,915			42,218
Research and product development		8,964			8,355

Total operating expenses		54,879			50,573

Operating income		24,785			26,914
Interest income		79			156
Interest expense		(15	)		(262	)
Other expense, net		(685	)		426

Income before taxes		24,164			27,234
Taxes on income		6,888			8,997

Net income		17,276			18,237
Less: Net income attributable to noncontrolling interests		448			506

Net income attributable to Dionex Corporation	$	16,828		$	17,731


Basic earnings per share attributable to Dionex Corporation	$	0.96		$	1.01

Diluted earnings per share attributable to Dionex Corporation	$	0.94		$	0.99

Shares used in computing per share amounts:
Basic		17,483			17,638
Diluted		17,974			17,957

See notes to condensed consolidated financial statements.

DIONEX CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(In thousands, except per share amounts)
(Unaudited)


	Nine Months Ended
	March 31,
	2011			2010
Net sales	$	350,075		$	312,610
Cost of sales		123,220			103,310

Gross profit		226,855			209,300

Operating expenses:
Selling, general and administrative		130,101			118,705
Research and product development		26,348			23,180

Total operating expenses		156,449			141,885

Operating income		70,406			67,415
Interest income		200			271
Interest expense		(86	)		(335	)
Other expense, net		(2,238	)		(28	)

Income before taxes		68,282			67,323
Taxes on income		20,826			21,579

Net income		47,456			45,744
Less: Net income attributable to noncontrolling interests		1,192			1,094

Net income attributable to Dionex Corporation	$	46,264		$	44,650


Basic earnings per share	$	2.66		$	2.53

Diluted earnings per share	$	2.60		$	2.48

Shares used in computing per share amounts:
Basic		17,422			17,671
Diluted		17,824			18,014

See notes to condensed consolidated financial statements.

DIONEX CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
(Unaudited)


	Nine months Ended
	March 31,
	2011			2010
Cash flows from operating activities:
Net income	$	47,456		$	45,744
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization		10,251			8,929
Stock-based compensation		6,160			5,043
Provision for bad debts		(141	)		14
Loss on disposal of fixed assets		942			168
Tax benefit related to stock transactions		(3,094	)		(1,656	)
Deferred income taxes		(367	)		989
Changes in assets and liabilities, net of acquired assets and assumed liabilities:
Accounts receivable		(2,797	)		(18,889	)
Inventories		(5,299	)		(6,764	)
Prepaid expenses and other assets		553			(603	)
Prepaid income taxes		(6,439	)		1,419
Accounts payable		1,453			3,477
Accrued liabilities		(3,788	)		2,957
Deferred revenue		1,660			8,391
Income taxes payable		4,100			5,012
Accrued product warranty		88			(322	)

Net cash provided by operating activities		50,738			53,909

Cash flows from investing activities:
Proceeds from sale of marketable securities		452			233
Purchase of property, plant and equipment		(12,722	)		(9,182	)
Proceeds from sale of property, plant, and equipment		—			42
Purchase of intangible assets		(4,512	)		—
Purchase of business		—			(21,147	)

Net cash used for investing activities		(16,782	)		(30,054	)

Cash flows from financing activities:
Net borrowings under line-of-credit		(3,095	)		16,524
Proceeds from issuance of common stock		14,182			14,613
Tax benefit related to stock transactions		3,094			1,656
Repurchase of common stock		(15,350	)		(31,200	)
Dividends paid to noncontrolling interests		—			(453	)

Net cash provided by (used for) financing activities		(1,169	)		1,140

Effect of exchange rate changes on cash		4,711			(1,755	)

Net increase (decrease) in cash and cash equivalents		37,498			23,240
Cash and cash equivalents, beginning of period		69,830			69,684

Cash and cash equivalents, end of period	$	107,328		$	92,924

Supplemental disclosures of cash flow information:
Income taxes paid	$	23,679		$	16,278
Interest expense paid		73			119
Supplemental schedule of non-cash investing and financing activities:
Accrued purchases of property, plant and equipment		233			578

See notes to condensed consolidated financial statements.

DIONEX CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)

Note 1: Summary of Significant Accounting Policies

Organization and Basis of Presentation

The condensed consolidated financial statements included herein have been prepared by Dionex Corporation, without audit, pursuant to the rules and regulations of the Securities and Exchange Commission. Certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) have been condensed or omitted pursuant to such rules and regulations. These condensed consolidated financial statements should be read in conjunction with the condensed consolidated financial statements and the notes thereto included in our Annual Report on Form 10-K for the fiscal year ended June 30, 2010. Unless the context otherwise requires, the terms “Dionex,” “we,” “our” and “us” and words of similar import as used in these notes to condensed consolidated financial statements include Dionex Corporation and its consolidated subsidiaries.

The unaudited condensed consolidated financial statements included herein reflect all adjustments (which include only normal, recurring adjustments) that are, in the opinion of management, necessary to state fairly the results for the periods presented. The results for such periods are not necessarily indicative of the results to be expected for the entire fiscal year ending June 30, 2011.

On December 12, 2010, Dionex, Thermo Fisher Scientific, Inc., a Delaware corporation (“Thermo Fisher”), and Weston D Merger Co., a Delaware corporation and a wholly owned subsidiary of Thermo Fisher (“Merger Sub”), entered into an Agreement and Plan of Merger (the “Merger Agreement”), pursuant to which Merger Sub will, subject to the satisfaction or waiver of the conditions set forth in the Merger Agreement, merge with and into Dionex and Dionex will survive the merger and continue as a wholly owned subsidiary of Thermo Fisher (the “Merger”). Pursuant to the terms of the Merger Agreement and subject to the conditions thereof, at the effective time of the Merger (the “Effective Time”), each share of common stock of Dionex issued and outstanding immediately prior to the Effective Time will be converted into the right to receive $118.50 in cash, without interest.

The Merger Agreement includes customary representations, warranties and covenants of Dionex and Thermo Fisher. Dionex has agreed to operate its business and the business of its subsidiaries in the ordinary course of business consistent with past practices until the Effective Time. Dionex has also agreed not to solicit, initiate, knowingly encourage or knowingly facilitate alternative acquisition proposals and will not knowingly permit its representatives to solicit or encourage any alternative acquisition proposal, in each case, subject to certain exceptions set forth in the Merger Agreement. The Merger Agreement contains certain termination rights, including, subject to the terms of the agreement, if the Dionex Board of Directors determines to accept a “Superior Proposal” as defined in the Merger Agreement, and also provides that under certain circumstances, upon termination, Dionex may be required to pay Thermo Fisher a termination fee of $65 million. The closing of the merger is currently expected to take place in the middle of May 2011 after receipt of a pending regulatory approval in Europe.

New Accounting Standards Adopted

Transfers of Financial Assets

In June 2009, the Financial Accounting Standards Board (“FASB”) issued new standards for the accounting for transfers of financial assets. These new standards amend the criteria for a transfer of a financial asset to be accounted for as a sale, establish more stringent conditions for reporting a transfer of a portion of a financial asset as a sale, change the initial measurement of a transferor’s interest in transferred financial assets, eliminate the qualifying special-purpose entity concept and require enhanced disclosures. Dionex adopted these standards in the first quarter of fiscal 2011 and they did not have a material impact on our consolidated financial statements but did expand our disclosures about transfers of financial assets. Refer to Note 7 for additional information.

Financial Instruments

In January 2010, the FASB issued a new accounting standard to amend the disclosure requirements related to recurring and nonrecurring fair value measurements. The guidance requires new disclosures on the transfers of assets and liabilities between Level 1 and Level 2 of the fair value measurement hierarchy, including the reasons and the timing of the transfers. Additionally, the guidance

requires a roll forward of activities on purchases, sales, issuance, and settlements of the assets and liabilities measured using significant unobservable inputs (Level 3 fair value measurements). The guidance became effective for us with the reporting period beginning January 1, 2010, except for the disclosure on the roll forward activities for Level 3 fair value measurements, which was effective for us in the first quarter of fiscal 2011. Other than requiring additional disclosures, adoption of this new standard did not have a material impact on our consolidated financial statements or any additional disclosures as Dionex did not have any financial instruments transfers between Level 1 and 2 during the nine months ended March 31, 2011.

Revenue Recognition

Net sales are derived primarily from sales of products, software licenses, and services (including installation, training, other consulting services, and extended maintenance contracts on our products). The following revenue recognition policies define the manner in which Dionex accounts for sales transactions.

Dionex recognizes revenue when persuasive evidence of an arrangement exists, the product has been delivered or service has been performed, the sales price is fixed or determinable, and collection is reasonably assured. Delivery of the product is generally considered to have occurred when shipped. Shipping charges billed to customers are included in net sales, and the related costs are included in cost of sales. Sales from products are typically not subject to rights of return and, historically, actual sales returns have not been significant. Dionex sells products through its 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.

In October 2009, the FASB issued a new accounting standard for multiple deliverable revenue arrangements. The new standard changes the requirements for establishing separate units of accounting in a multiple element arrangement and requires the allocation of arrangement consideration to each deliverable to be based on the relative selling price. The FASB also issued a new accounting standard for certain revenue arrangements that include software elements. This new standard excludes software that is contained on a tangible product from the scope of software revenue guidance if the software is essential to the tangible product’s functionality. Dionex prospectively adopted both these standards in the first quarter of fiscal 2011 for new and materially modified arrangements originating after July 1, 2010. The impact of adopting these standards was not material to net sales on our consolidated financial statements for the nine months ended March 31, 2011. The new accounting standard for revenue recognition if applied in the same manner to the year ended June 30, 2010 would not have had a material impact on net sales or to our consolidated financial statements for that fiscal year.

Under these new standards, when a sales arrangement contains multiple elements, such as products, software licenses and/or services, Dionex allocates revenue to each element based on a selling price hierarchy. Using the selling price hierarchy, Dionex determines selling price of each deliverable using vendor specific objective evidence (“VSOE”), if it exists, and otherwise third-party evidence (“TPE”). If neither VSOE nor TPE of selling price exists, Dionex uses estimated selling price (“ESP”). Dionex generally expects that it will not be able to establish TPE due to the nature of the markets in which we compete, and, as such, Dionex typically will determine selling price using VSOE or if not available, ESP.

Dionex’s basis for establishing VSOE of a deliverable’s selling price consists of standalone sales transactions when the same or similar product or service is sold separately. However, when services are never sold separately, such as product installation services, VSOE is based on the product’s estimated installation hours based on historical experience multiplied by the standard service billing rate. In determining VSOE, Dionex requires that a substantial majority of the selling prices for a product or service fall within a reasonably narrow price or hour range, as defined by Dionex. Dionex also considers the geographies in which the products or services are sold, major product and service groups, and other environmental variables in determining VSOE. Absent the existence of VSOE and TPE, our determination of a deliverable’s ESP involves evaluating several factors based on the specific facts and circumstances of these arrangements, which include pricing strategy and policies driven by geographies, market conditions, competitive landscape, correlation between proportionate selling price and list price established by management having the relevant authority, and other environmental variables in which the deliverable is sold.

For multiple element arrangements which include extended maintenance contracts, Dionex allocates and defers the amount of consideration equal to the separately stated price and recognizes revenue on a straight-line basis over the contract period.

For multiple element arrangements which contain software deliverables and non-software deliverables (i.e. instruments) where the instruments’ essential functionality is not dependent on both deliverables functioning together, revenue is allocated to the software

deliverables as a group using the relative selling prices of each deliverable in the arrangement based on the selling price hierarchy. The consideration allocated to the software deliverable group is then allocated to each software deliverable within that group in accordance with software revenue recognition guidance.

For perpetual software licenses, Dionex recognizes revenue at the inception of the license term assuming all revenue recognition criteria have been met. Dionex uses the residual method to allocate revenue to software licenses at the inception of the license term when VSOE of fair value for the undelivered elements exists, such as software installations, and all other revenue recognition criteria have been satisfied. If Dionex cannot objectively determine the VSOE of fair value of any undelivered elements included in these multiple-element arrangements, revenue is deferred until all elements are delivered, or until VSOE of fair value can be objectively determined for the remaining undelivered elements.

Note 2: Earnings Per Share

Basic earnings per share attributable to Dionex Corporation are determined by dividing net income attributable to Dionex Corporation by the weighted average number of common shares outstanding during the period. Diluted earnings per share attributable to Dionex Corporation are determined by dividing net income attributable to Dionex Corporation by the weighted average number of common shares used in the basic earnings per share calculation, plus the number of common shares that would be issued assuming conversion of all potentially dilutive securities outstanding under the treasury stock method.

The following table is a reconciliation of the numerators and denominators used in computing basic and diluted earnings per share attributable to Dionex Corporation:


	Three Months Ended				Nine Months Ended
	March 31,				March 31,
(In thousands, except per share data)	2011		2010		2011		2010
Numerator:
Net income	$	16,828	$	17,731	$	46,264	$	44,650
Denominator:
Weighted average shares used to compute net income per common share — basic		17,483		17,638		17,422		17,671
Effect of dilutive stock options		491		319		402		343

Weighted average shares used to compute net income per common share — diluted		17,974		17,957		17,824		18,014

Basic earnings per share	$	0.96	$	1.01	$	2.66	$	2.53

Diluted earnings per share	$	0.94	$	0.99	$	2.60	$	2.48

Stock options to purchase 760,026 shares were excluded from the computation of diluted earnings per share in the three months ended March 31, 2010, and options to purchase 23,705 shares and 660,769 shares were excluded from the computation of diluted earnings per share in the nine months ended March 31, 2011 and 2010, respectively, because the exercise price of the stock options exceeded the average market price of the Company’s common stock and, as a result, would have had an anti-dilutive effect.

Note 3: Fair Value Measurements

In accordance with the accounting standards for fair value measurements and disclosures, assets and liabilities are measured at fair value on a recurring basis as of the end of each reporting period. Dionex applies the following fair value hierarchy, which prioritizes the inputs used to measure fair value into three levels and bases the categorization within the hierarchy upon the lowest level of input that is available and significant to the fair value measurement:

	•		Level 1 inputs utilize observable data such as quoted prices in active markets for identical assets or liabilities that the reporting entity has the ability to access at the measurement date.

	•		Level 2 inputs utilize data points other than quoted prices in active markets that are observable for the asset or liability, either directly or indirectly.

	•		Level 3 inputs utilize unobservable data points for the asset or liability in which there is little or no market data, which require the reporting entity to develop its own assumptions.

The following table summarizes our assets and liabilities measured at fair value on a recurring basis as of March 31, 2011:


(in thousands)	Total		Level 1		Level 2		Level 3
Assets:
Money market (1)	$	18,496	$	18,496	$	—	$	—
Equity indexed derivatives (2)		2		—		2		—

Total	$	18,498	$	18,496	$	2	$	—

Liabilities:
Foreign currency contracts (3)	$	4,409	$	—	$	4,409	$	—


(1)		Included in “cash and cash equivalents” in our condensed consolidated balance sheets.

(2)		Included in “short-term investments” in our condensed consolidated balance sheets. The gross unrealized loss is not material.

(3)		Included in “other long-term liabilities” or “other accrued liabilities” in our condensed consolidated balance sheets.

Note 4: Derivative Securities

All derivatives, whether designated in hedging relationships or not, are required to be recorded on our consolidated balance sheets at fair value as either assets or liabilities. If the derivative is designated as a fair-value hedge, the changes in the fair value of the derivative and of the hedged item attributable to the hedged risk are recognized in earnings. If the derivative is designated as a cash flow hedge or net investment hedge, the effective portions of changes in the fair value of the derivative are recorded in other comprehensive income and are recognized in earnings when the hedged item affects earnings; ineffective portions of changes in fair value are recognized in earnings.

Dionex operates on a global basis and is exposed to foreign currency exchange rate fluctuations in the normal course of its business. As part of its risk management strategy, Dionex uses derivative instruments to manage exposures to foreign currency. The objective is to offset gains and losses resulting from these exposures with losses and gains on the derivative contracts used to hedge them, thereby reducing volatility of earnings or protecting fair value of assets and liabilities. Dionex does not have any leveraged derivatives nor use derivative contracts for speculative purposes.

Net Investment Hedge

Dionex uses a $10 million cross-currency swap arrangement for Japanese yen that expires in March 2012 to hedge the exchange rate exposure of our net investment in our Japanese subsidiary. Dionex considers the impact of its counterparty’s credit risk on the fair value of the contract as well as the ability to each party to execute under the contract. Dionex assessed and documented hedge effectiveness of the contract and designated it as a net investment hedge at the inception date, January 1, 2008. We reassess edge effectiveness on a quarterly basis. The gain or loss related to the effective portion of the hedge is reported in accumulated other comprehensive income as part of the foreign currency translation adjustment, and the gain or loss related to the ineffective portion, if any, is reported in other income (expense), net.

Other Derivatives

Other derivatives not designated as hedging instruments consist primarily of foreign exchange forward contracts with high quality financial institutions to manage our exposure to the impact of fluctuations in foreign currency exchange rates on our intercompany receivables balances. Principal hedged currencies include the Euro, Japanese yen, Australian dollar, Canadian dollar, British pound sterling, and Swiss Francs. The periods of these forward contracts is approximately 30 days and have varying notional amounts that are intended to be consistent with changes in the underlying exposures and require Dionex to exchange foreign currencies for U.S. dollars at maturity. Gains (losses) on these contracts are reported as other income (expense) in the current period earnings.

Total gross notional amounts for outstanding derivatives were as follows:


	March 31,		June 30,
(in thousands)	2011		2010
Derivatives not designated as hedging instruments
Currency forwards:
Euro	$	5,909	$	17,659
Japanese yen		5,401		4,282
Australian dollar		983		791
Canadian dollar		1,432		853
British pound sterling		2,582		—
Swiss francs		456		—
Derivatives designated as hedging instruments
Currency swaps		10,000		10,000

Total	$	26,763	$	33,585

The following table shows derivative instruments measured at gross fair value and balance sheet location on the condensed consolidated balance sheet:


	March 31, 2011				June 30, 2010
	Accrued		Other Long-		Accrued		Other Long-
(In thousands)	Liabilities		Term Liabilities		Liabilities		Term Liabilities
Derivatives designated as hedging instruments
Currency swaps	$	4,252	$	—	$	—	$	3,390
Derivatives not designated as hedging instruments
Currency forwards	$	157	$	—	$	290	$	—

The following table shows the effect of derivative instruments designated as hedging instruments and not designated as hedging instruments in the condensed consolidated statements of operations in the three and nine months ended March 31, 2011 and 2010:


	Three Months					Nine months
	Ended March 31,					Ended March 31,
(In thousands)	2011			2010		2011			2010
Derivatives designated as hedging instruments
Net investment hedges
Unrealized gain (loss) recognized in other comprehensive income on derivatives	$	324		$	76	$	(862	)	$	(466	)
Realized gain (loss) reclassified from other comprehensive income into income	$	—		$	—	$	—		$	—

Derivatives not designated as hedging instruments
Currency forwards
Realized gain (loss) included other income (expense), net	$	(435	)	$	598	$	(3,444	)	$	(29	)

Note 5: Balance Sheet Details

The following tables provide details of selected balance sheet items:


	March 31,		June 30,
(In thousands)	2011		2010
Inventories:
Finished goods	$	28,062	$	23,788
Work in process		1,473		1,781
Raw materials		18,408		11,889

	$	47,943	$	37,458


	March 31,			June 30,
	2011			2010
Property, Plant and Equipment, net:
Land	$	28,303		$	25,098
Buildings and improvements		54,496			48,396
Machinery, equipment and tooling		56,236			50,411
Furniture and fixtures		13,532			12,194
Construction-in-progress		245			13

		152,812			136,112
Accumulated depreciation and amortization		(69,054	)		(60,050	)

Property, plant and equipment, net	$	83,758		$	76,062

Depreciation expense was $2.7 million and $2.9 million in three months ended March 31, 2011 and 2010, respectively and $7.9 million and $7.6 million in nine months ended March 31, 2011 and 2010, respectively.

Note 6: Goodwill and Other Intangible Assets

Changes in the carrying amount of goodwill were as follows for the nine months ended March 31, 2011:


(in thousands)
Balance as of June 30, 2010	$	35,013
Additions		12
Foreign currency translation impact		1,289

Balance as of March 31, 2011	$	36,314

Intangible assets (net of accumulated amortization) were as follows:


	As of March 31, 2011							As of June 30, 2010
	Carrying		Accumulated					Carrying		Accumulated
(in thousands)	Amount		Amortization			Net		Amount		Amortization			Net
Patents and trademarks	$	8,788	$	(3,031	)	$	5,757	$	8,788	$	(2,580	)	$	6,208
Developed technology		9,800		(2,145	)		7,655		14,893		(10,456	)		4,437
Customer relationships		5,431		(2,742	)		2,689		5,119		(1,905	)		3,214

Total	$	24,019	$	(7,918	)	$	16,101	$	28,800	$	(14,941	)	$	13,859

As a result of certain acquisitions, Dionex recorded trade names (intangible assets) totaling $2.8 million, which are not subject to amortization and are included in patents and trademarks.

Amortization expense related to all finite intangible assets was $0.8 million and $0.6 million in the three months ended March 31, 2011 and 2010, respectively and $2.4 million and $1.5 million in the nine months ended March 31, 2011 and 2010, respectively.

Estimated future amortization expense related to finite lived intangible assets as of March 31, 2011 is as follows:


	Remaining
	Amortization
(in thousands)	Expense
Remainder of Fiscal 2011	$	796
Fiscal 2012		2,878
Fiscal 2013		2,234
Fiscal 2014		1,775
Fiscal 2015		1,374
After Fiscal 2015		4,210

Total	$	13,267

Note 7: Financing Arrangements

Dionex has unsecured credit agreements with domestic and international financial institutions. The agreements provide for revolving unsecured lines of credit that we utilize primarily for our general corporate purposes, including stock repurchases and working capital needs. As of March 31, 2011, we had a total of $28.5 million in available lines of credit, maturing on December 31, 2011 at an annual interest rate of approximately ranging from 5.60% to 6.71%.

One of our foreign subsidiaries transfers certain customer receivables to financial institutions at a discount up to approximately 2% (“discounted notes”) and accounts for these transfers as sales. The purpose of these transfers is to facilitate the funding of outstanding customer receivables by the Company. In the unlikely event that there is failure by the customers to repay the financial institutions for the discounted notes sold by Dionex, Dionex would be required to repurchase the discounted notes back, up to the specified amount

outstanding. Under no other circumstance is Dionex obligated or do we have a right to repurchase these discounted notes. Dionex has determined that the fair value of these contingent liabilities under these arrangements are not material as of March 31, 2011 based on past experience of transferring discounted notes, which considers customers’ credit quality, historical loss experience, and whether the repurchase (if required in the event of a default) is probable and reasonably estimable. The length of time that these discounted notes are outstanding is approximately 90 days and during the six-months ended March 31, 2011, Dionex recorded no losses as a result of customers’ failures to repay the financial institutions. Total discounted notes transferred to the financial institutions during the nine months ended March 31, 2011 was $10.6 million and outstanding discounted notes sold as of March 31, 2011 was approximately $4.6 million.

Note 8: Warranty

Dionex accrues estimated product warranty costs at the time of sale, which are included in cost of sales in the consolidated statements of operations. While Dionex engages in extensive product quality programs and processes, including actively monitoring and evaluating the quality of its component supplies, our warranty obligation is affected by product failure rates, material usage and service delivery costs incurred in correcting a product failure. The amount of the accrued warranty liability is based on historical information, such as past experience, product failure rates, number of units repaired and estimated costs of material and labor. The liability is reviewed for reasonableness at least quarterly.

The changes in the warranty provision were as follows during the nine months ended March 31:


(in thousands)	2011			2010
Balance, beginning	$	2,532		$	3,028

Additions		4,257			2,789

Effects of foreign currencies exchange		216			(35	)
Settlements		(4,164	)		(3,076	)

Balance, end	$	2,841		$	2,706

Note 9: Stock-Based Compensation

Dionex’s Board of Directors authorized the 2004 Equity Incentive Plan (the “2004 Plan”). Shares reserved for future issuance under the 2004 Plan may be used for grants of stock options (“options”), restricted stock units (“RSUs”), and other types of awards.

Dionex also sponsors the Employee Stock Purchase Plan (the “ESPP”) in which eligible employees may contribute up to 10% of their base compensation to purchase shares of common stock at a price equal to 85% of the lower of the market value of the stock at the beginning or end of each six-month offer period, subject to certain annual limitations. The employees purchased 21,088 and 39,919 shares during the three and nine months ended March 31, 2011, respectively, for approximately $1.4 million and $2.5 million, respectively, under the ESPP. The ESPP was terminated as a result of the pending tender offer by Thermo Fisher immediately following the last offering in January 2011.

Performance Stock Units

Starting in the first quarter of fiscal 2011, Dionex issued performance stock units (“PSUs”) to certain executive officers. The number of shares ultimately received will depend on specified performance targets related to revenue and diluted earnings per share growth rates over a two-year performance period (the “performance period”). Fifty percent of the shares awarded vest at the end of the performance period and remaining shares vest twenty-five percent on each of the following two anniversaries after the performance period assuming continued service by the employee. Delivery of the shares occurs upon achievement of the targets and as of the vesting date.

Dionex estimates the fair value of the PSUs based on the number of PSUs that are expected to be earned multiplied by the market price of Dionex’s common stock on the date of grant. As the performance targets are considered performance conditions, the expense for these awards, net of estimated forfeitures, is recorded over the four year vesting period based on a graded accelerated vesting method.

The following table summarizes PSU activity under the 2004 Plan during the nine months ended March 31, 2011:


			Wtd. Avg.
			Grant-Date
	Shares		Fair Value
PSUs outstanding as of June 30, 2010		—		—
Granted		11,688	$	76.30
Vested		—		—
Changes in PSUs due to performance conditions		—		—
Forfeited		—		—

PSUs outstanding as of March 31, 2011		11,688	$	76.30

As of March 31, 2011, there were $0.6 million in unrecognized compensation costs related to PSUs granted under the 2004 Plan. These costs are expected to be recognized over a weighted average period of 3.3 years.

Restricted Stock Units

The following table summarizes RSU activity under the 2004 Plan during the nine months ended March 31, 2011:


				Wtd. Avg.
				Grant-Date
	Shares			Fair Value
RSUs outstanding as of June 30, 2010 (1)		87,776		$	64.21
Granted		43,970			79.85
Others (1)		6,800			59.26
Released		(4,719	)		90.46
Canceled		(3,519	)		68.15

RSUs outstanding as of March 31, 2011		130,308		$	68.17


(1)		Total RSUs outstanding as of June 30, 2010 previously reported excluded 6,800 RSUs to certain executives of the company. Such amounts have been added to the table above under “Others”.

As of March 31, 2011, there were $5.7 million in unrecognized compensation costs related to RSUs granted under the 2004 Plan. These costs are expected to be recognized over a weighted average period of 3.3 years.

Stock Options

The following table summarizes option activity under the 2004 Plan during the nine months ended March 31, 2011:


						Weighted
						Average
				Weighted		Remaining		Aggregate
				Average		Contractual		Intrinsic
	Options			Exercise		Term		Value
	Outstanding			Price		(Years)		(in millions)
Options outstanding as of June 30, 2010		1,474,627		$	57.05
Granted		232,412			77.34
Exercised		(236,835	)		49.33
Canceled		(19,086	)		69.86

Options outstanding as of March 31, 2011		1,451,118		$	61.39		6.44	$	82.2

Options vested and expected to vest as of March 31, 2011		1,422,975		$	61.16		6.39	$	81.0

Exercisable as of March 31, 2011		900,726		$	55.50		5.13	$	56.3

The total intrinsic value of options exercised in the nine months ended March 31, 2011 was $11.7 million. As of March 31, 2011, there were $9.8 million of total unrecognized compensation costs related to stock options. These costs are expected to be recognized over a weighted average period of 2.59 years.

The following assumptions were used to determine the fair value of the stock options using the Black-Scholes-Merton options pricing model for the nine months ended March 31:


	2011			2010
Volatility		33	%	33% to 34%
Risk-free interest rate	1.27% to 1.55%			2.4% to 2.5%
Expected life (in years)		4.7			4.6
Expected dividend	$	0.00		$	0.00

Employee Stock Purchase Plan

The following assumptions were used to determine the fair value of ESPP shares for the nine months ended March 31:


	2011			2010
Volatility		30	%	20% to 36%
Risk-free interest rate		0.20	%		0.2% 0.3	%
Expected life (in years)		0.50			0.50
Expected dividend	$	0.00		$	0.00

The condensed consolidated statement of operations included the following stock-based compensation expense related to options, RSUs, PSUs, and ESPP for the three and nine months ended March 31:


	Three Months Ended						Nine months Ended
	March 31,						March 31,
(in thousands)	2011			2010			2011			2010
Cost of sales	$	214		$	227		$	705		$	606
Selling, general and administrative expenses		1,438			1,170			4,388			3,335
Research and development expenses		350			370			1,069			1,102

Total stock-based compensation expenses		2,002			1,767			6,162			5,043
Tax effect on stock-based compensation		(571	)		(479	)		(1,979	)		(1,569	)

Net effect on net income	$	1,431		$	1,288		$	4,183		$	3,474

Note 10: Stockholders’ equity

Common Stock Repurchases

During the nine months ended March 31, 2011, we repurchased 202,660 shares of our common stock on the open market for approximately $15.3 million (at an average repurchase price of $75.74 per share). There were no repurchases during the three months ended March 31, 2011. During the three and nine months ended March 31, 2010, we repurchased 132,308 and 476,126 shares of our common stock, respectively, on the open market for approximately $9.1 million and $31.2 million (at an average repurchase price of $69.36 and $65.53, respectively, per share).

Comprehensive Income

Comprehensive income consists of two components, net income and other comprehensive income. Other comprehensive income refers to revenue, expenses, gains and losses that under GAAP are recorded as an element of stockholders’ equity but are excluded from net income. Dionex’s other comprehensive income consists of foreign currency translation adjustments from those subsidiaries not using the U.S. dollar as their functional currency, unrealized gain (loss) on net investment hedge and unrealized gains and losses on available-for-sale securities, and net deferred gains and losses on these items.

The components of comprehensive income attributable to Dionex Corporation were as follows for the three and nine months ended March 31:


	Three Months Ended					Nine months Ended
	March 31,					March 31,
(in thousands)	2011		2010			2011			2010
Net income, as reported	$	17,276	$	18,237		$	47,456		$	45,744
Foreign currency translation adjustments, net of taxes		6,372		(4,436	)		16,404			(1,001	)
Unrealized gain (loss) on net investment hedge, net of taxes		324		76			(862	)		(466	)
Unrealized gain on securities available for sale, net of taxes		—		—			1			1

Comprehensive income	$	23,972	$	13,877		$	62,999		$	44,278
Comprehensive income attributable to noncontrolling interests		448		506			1,192			1,094

Comprehensive income attributable to Dionex Corporation	$	23,524	$	13,371		$	61,807		$	43,184

Note 11: Income Taxes

As part of the process of preparing the condensed 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 and assessing changes in 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 the condensed consolidated balance sheets.

Accounting standards relating to income taxes require that we continually evaluate the necessity of establishing or changing a valuation allowance for deferred tax assets, depending on whether it is more likely than not that actual benefit of those assets will be realized in future periods. We have evaluated our deferred tax assets as of March 31, 2011 and concluded that it is more likely than not that the deferred tax assets will be realized in the future; therefore, the establishment or modification of a valuation allowance is not required. In addition, we adopted the provisions of the FASB’s accounting standard related to the accounting for uncertainty in income taxes. The accounting standard requires financial statement reporting of the expected future tax consequences of uncertain tax return reporting positions on the presumption that all relevant tax authorities possess full knowledge of those tax reporting positions, as well as all of the pertinent facts and circumstances, but it prohibits any discounting of any of the related tax effects for the time value of money.

Our total amount of unrecognized tax benefits as of March 31, 2011 was $5.4 million, of which $1.7 million, if recognized, would affect our effective tax rate compared to $8.0 million on June 30, 2010, of which $1.9 million, if recognized, would have affected our effective tax rate. The liability for income taxes associated with uncertain tax positions is classified in deferred and other income taxes payable.

We record interest and penalties related to unrecognized tax benefits in income tax expense. At March 31, 2011, we had approximately $1.4 million accrued for estimated interest related to uncertain tax positions compared to approximately $1.7 million on June 30, 2010. During the nine months ended March 31, 2011, we accrued a total of $292,000 in interest on these uncertain tax positions. At March 31, 2011, we had approximately $38,000 accrued for estimated penalties related to uncertain tax positions compared to approximately $69,000 on June 30, 2010. During the period ended March 31, 2011, we accrued no additional penalties on these uncertain tax positions.

We are subject to audit by the Internal Revenue Service and California Franchise Tax Board for the fiscal years 2006 through 2009. As we have operations in most other US states, other state tax authorities may assess deficiencies related to prior year activities; however, the years open to assessment vary with each state. We also file income tax returns for non-US jurisdictions; the most significant of which are Germany, Japan, the UK and Hong Kong. The years open to adjustment for Germany are for the fiscal years 2004 through 2009, fiscal years 2004 through 2009 for the UK and Hong Kong and fiscal years 2003 through 2009 for Japan.

A number of years may elapse before an uncertain tax position is audited and ultimately settled. It is difficult to predict the ultimate outcome or the timing of resolution for uncertain tax positions. It is reasonably possible that the amount of unrecognized tax benefits could significantly increase or decrease within the next twelve months. These changes could result from the settlement of ongoing litigation, the completion of ongoing examinations, the expiration of the statute of limitations, or other circumstances. At this time, an estimate of the range of the reasonably possible change cannot be made.

Note 12: Commitments and Contingencies

In July 2008, Dionex acquired a Swedish company using a combination of cash and post-acquisition earn-out payment arrangements. Under the purchase agreement, earn-out payments of 70% for fiscal 2009, 30% for fiscal 2010 and 30% for 2011 as a percentage of the acquired company’s net income are payable to the seller at the end of each fiscal year. No payments were accrued during the nine months ended March 31, 2011 as we do not believe payment is probable.

Certain facilities and equipment are leased under non-cancelable operating leases. Dionex generally pays taxes, insurance and maintenance costs on leased facilities and equipment. Rental expense for all operating leases was $2.1 million and $1.8 million in the three months ended March 31, 2011 and 2010, respectively and $5.3 million and $5.9 million in the nine months ended March 31, 2011 and 2010, respectively.

Minimum rental commitments under these non-cancelable operating leases were as follows as of March 31, 2011:


(In thousands)
Less than 1 Year	$	6,154
1-2 Years		3,479
2-3 Years		2,198
3-4 Years		1,134
4-5 Years		531
After 5 Years		1,373

Total	$	14,869

Dionex enters into standard indemnification agreements with many of our customers and certain other business partners in the ordinary course of business. These agreements include provisions for indemnifying the customer against any claim brought by a third party to the extent any such claim alleges that our product infringes a patent, copyright or trademark, or violates any other proprietary rights of that third party. The maximum potential amount of future payments Dionex could be required to make under these indemnification agreements is not estimable, however, Dionex has not incurred any costs to defend lawsuits or settle claims related to these indemnification agreements. No material claims for such indemnifications were outstanding as of March 31, 2011. Dionex has not recorded any liabilities for these indemnification agreements as of March 31, 2011 or June 30, 2010.

Note 13: Business Segment Information

The accounting standard for segment reporting establishes standards for reporting information about operating segments in annual financial statements and requires selected information for those segments to be presented in interim financial reports of public business enterprises. It also establishes standards for related disclosures about products and services, geographic areas and major customers. Our business activities, for which discrete financial information is available, are regularly reviewed and evaluated by the chief operating decision maker (our Chief Executive Officer). As a result of this evaluation, Dionex determined that it has two operating segments: Chemical Analysis Business Unit (“CABU”) and Life Sciences Business Unit (“LSBU”).

CABU sells ion chromatography and sample preparation products, chromatography data systems software, services and related consumables. LSBU sells High Performance Liquid Chromatography (“HPLC”) products, chromatography data systems software, services and related consumables. These two operating segments are aggregated into one reportable segment for financial statement purposes. Both operating segments have similar economic characteristics; product processes; products and services; types and classes of customers; methods of distribution and regulatory environments. Because of these similarities, the two segments have been aggregated into one reporting segment for financial statement purposes.

Net sales for our products and services were as follows for the three and nine months ended December 31:


	Three months Ended				Nine Months Ended
	December 31,				March 31,
(in thousands)	2011		2010		2011		2010
Products	$	105,548	$	96,439	$	300,645	$	269,313
Installation and Training Services		3,139		2,647		9,456		8,835
Maintenance		14,403		13,696		39,974		34,462

	$	123,090	$	112,782	$	350,075	$	312,610

Long-lived assets consist principally of property and equipment. No single customer contributed more than 10% of net sales during the three and nine months ended March 31, 2011 and 2010, and net sales from services were less than 10% of net sales during the same period.

ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Cautionary Statement Regarding Forward-Looking Statements

Except for historical information contained herein, the discussion below and in the footnotes to our financial statements contained in this Report on Form 10-Q contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and the Private Securities Litigation Reform Act of 1995, and are made under the safe harbor provisions thereof. Such statements are subject to certain risks, uncertainties and other factors that may cause 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 risks and uncertainties include, among other things: general economic conditions, foreign currency fluctuations, risks associated with international sales, credit risks, fluctuations in worldwide demand for analytical instrumentation, fluctuations in quarterly operating results, competition from other products, existing product obsolescence, new product development, including market receptiveness, the ability to manufacture products on an efficient and timely basis and at a reasonable cost and in sufficient volume, the ability to attract and retain talented employees and other risks as described in more detail below under the heading “Risk Factors.” Readers are cautioned not to place undue reliance on these forward-looking statements that reflect management’s analysis only as of the date hereof. We undertake no obligation to update these forward-looking statements.

Overview

Dionex Corporation designs, manufactures, markets and services analytical instrumentation and related accessories and chemicals. Our products are used to analyze chemical substances in the environment and in a broad range of industrial and scientific applications. Our systems are used in environmental analysis and by the pharmaceutical, life sciences, chemical/petrochemical, power generation, food, and electronics industries in a variety of applications.

Our current portfolio of liquid chromatography (LC) systems is focused in two product areas: ion chromatography (IC) and high performance liquid chromatography (HPLC). In addition, we offer a mass spectrometer detector that can be coupled with either IC or HPLC systems. For sample preparation, we provide accelerated solvent extraction (ASE^®) systems and AutoTrace^® instruments and consumables. In addition, we also develop and manufacture columns, consumables, suppressors, detectors, automation, and software analysis systems for use in or with liquid chromatography systems. All these products can be used to analyze chemical substances in the environment and in a broad range of industrial and scientific applications.

Results of operations:

The following table summarizes our consolidated statements of income for the three and nine months ended March 31, 2011 as compared to the three and nine months ended March 31, 2010, as a percentage of net sales for the periods indicated:


	Three months ended March 31,												Nine months ended March 31,
	2011						2010						2011						2010
				% of						% of						% of						% of
(In thousands)	Dollars			Net sales			Dollars			Net sales			Dollars			Net sales			Dollars			Net sales
Net sales	$	123,090			100.0	%	$	112,782			100.0	%	$	350,075			100.0	%	$	312,610			100.0	%
Cost of sales		43,426			35.3	%		35,295			31.3	%		123,220			35.2	%		103,310			33.0	%


Gross profit		79,664			64.7	%		77,487			68.7	%		226,855			64.8	%		209,300			67.0	%
Selling, general and administrative		45,915			37.3	%		42,218			37.4	%		130,101			37.2	%		118,705			38.0	%
Research and product development		8,964			7.3	%		8,355			7.4	%		26,348			7.5	%		23,180			7.4	%


Total operating expenses		54,879			44.6	%		50,573			44.8	%		156,449			44.7	%		141,885			45.4	%


Operating income		24,785			20.1	%		26,914			23.9	%		70,406			20.1	%		67,415			21.6	%
Interest income, net		64			0.1	%		(106	)		(0.1	)%		114			0	%		(64	)		(0.1	)%

Other expense, net		(685	)		(0.6)	%		426			0.4	%		(2,238	)		(0.7)	%		(28	)		(0.0	)%

Income before taxes		24,164			19.6	%		27,234			24.1	%		68,282			19.5	%		67,323			21.5	%
Taxes on income		6,888			5.6	%		8,997			8.0	%		20,826			5.9	%		21,579			6.9	%

Net income		17,276			14.0	%		18,237			16.2	%		47,456			13.6	%		45,744			14.6	%

Less: Net income attributable to noncontrolling interests		448			0.4	%		506			0.4	%		1,192			0.4	%		1,094			0.3	%


Net income attributable to Dionex	$	16,828			13.6	%	$	17,731			15.7	%	$	46,264			13.2	%	$	44,650			14.3	%

Net Sales

For the three and nine months ended March 31, 2011, consolidated net sales increased by $10.3 million, or 9%, and $37.5 million, or 12%, respectively, as compared to the same corresponding period in the prior year. Increased net sales of our portfolio of HPLC systems contributed to our net sales growth in part as a result of introduction of our UHPLC+ systems in June 2010, combined with our acquisition of the ESA Life Sciences Tools business (“ESA products”) at the end of our first quarter of fiscal 2010. In addition, the growth in net sales was due to stronger sales of our ICS-5000 RFIC systems, which include the first commercially-available capillary ion chromatography technology. Dionex is subject to the effects of currency fluctuations, which have an impact on net sales. Currency fluctuations increased net sales by 2% for the three months ended March 31, 2011 and did not have a significant impact on net sales for the nine months ended March 31, 2011.

Net sales from a regional perspective

Net sales increased in all major regions partially as a result of a recovering global economy and greater market acceptance of our new IC and HLPC products. Sales outside of North America accounted for 74% and 75% of net revenue for the three months ended March 31, 2011 and 2010 and 73% and 74% for the nine months ended March 31, 2011 and 2010, respectively. Sales directly to our end-user

customers accounted for 96% and 95% of net sales for the three months ended and 95% and 94% of net sales for the nine months ended in fiscal 2011 and 2010, respectively. International distributors and representatives in Europe, Asia, and other international markets accounted for the remaining percentage of net sales.

North America — Net sales in this region increased by 12% and 16% in reported dollars for the three and nine months ended March 31, 2011, respectively, as compared to the corresponding periods in the prior fiscal year, primarily due to increased demand for our products in the electronics, chemicals and life sciences markets. Growth in net sales in this region was attributable to by our HPLC products, and in part, by our new ICS-5000 Capillary RFIC Systems, introduced in the second half of fiscal 2010.

Europe — Net sales in this region increased by 9% and 6% in reported dollars for the three and nine months ended March 31, 2011, respectively, as compared to corresponding periods in the prior fiscal year, primarily due to increased demand for our products in the electronics and chemicals markets, offset in part by softness in the power market. Currency movements affected net sales by 2% (favorable) and 3% (unfavorable) for the three and nine months ended March 31, 2011, respectively. Growth in net sales in this region was driven by our HPLC portfolio, specifically ESA products added during fiscal 2010, and the introduction of the new UHPLC+ systems.

Asia / Pacific — Net sales in this region increased by 8% and 16% in reported dollars for the three and nine months ended March 31, 2011, respectively, as compared to corresponding periods in the prior fiscal year. Excluding the net impact of favorable currency movements, net sales increased by 4% and 12%, respectively, in the same periods. The overall growth in net sales was primarily due to increased sales in China, India and Korea and in the power, life science, chemicals and electronics markets. Our continued investments in our sales and service organizations in Asia were pivotal to the growth in this region, combined with the net sales contributed from the ESA products in our HPLC portfolio. Sales growth in this region was lower than historical growth due to a large sale to the National Police Agency in Japan in the third quarter of fiscal 2010 totaling over $7 million.

Net sales from a product line perspective

IC — Net sales of our IC portfolio of products increased by 4% for the nine months ended March 31, 2011, as compared to corresponding periods in the prior fiscal year primarily due to growth in North America and Asia/Pacific regions driven by higher demand for our IC systems, consumables and related services. Net sales of our IC portfolio decreased by 4% for the three months ended March 31, 2011 compared to the same period in prior year due to the large Japan order in the third quarter of fiscal 2010 discussed above.

HPLC — Net sales of our HPLC portfolio of products increased by 43% and 31% for the three and nine months ended March 31, 2011, respectively, as compared to corresponding periods in the prior fiscal year due to higher demand for our new UHPLC+ products introduced in the latter part of fiscal 2010, continued growth in certain emerging markets, such as China and India, and in part due to the net sales generated from our ESA products acquired in the first half of fiscal 2010.

Gross Profit

Gross profit as a percentage of net sales for the three and nine months ended March 31, 2011 was 64.7% and 64.8%, respectively, as compared to 68.7% and 67.0%, respectively, in the corresponding periods in the prior fiscal year. The decline in gross margin of 4 and 2.2 percentage points for the three and nine months ended March 31, 2011, respectively, was impacted by our ESA products acquired in fiscal 2010, the higher margin realized on the large sale in Japan in fiscal 2011 and changes in product and geographical sales mix.

Selling, General and Administrative

Selling, general and administrative (SG&A) expenses as a percentage of net sales for the three and nine months ended March 31, 2011 were 37.3% and 37.2%, respectively, as compared to 37.4% and 38.0%, respectively, in the corresponding periods in the prior fiscal year. SG&A expenses increased by $3.7 million, or 8.8%, and $11.4 million, or 9.6%, for the three and nine months ended March 31, 2011, respectively, as compared to corresponding periods in the prior fiscal year primarily due to headcount increases, including staff added from the ESA acquisition, annual salary increases, and increased travelling, selling and other expenses for the continued expansion efforts to increase our presence in Europe and Asia/Pacific regions, which attributed to the higher net sales reported. SG&A as a percentage of net sales declined compared to prior years due to better utilization of our sales and service organization.

Research and Product Development

Research and product development (R&D) expenses as a percentage of net sales for the three and nine months ended March 31, 2011 were 7.3% and 7.5%, respectively, as compared to 7.4% in the corresponding periods in the prior fiscal year. R&D expenses increased by $0.6 million, or 7.3%, and $3.2 million, or 13.7%, for the three and nine months ended March 31, 2011, respectively, as compared to corresponding periods in the prior fiscal year, primarily due to increase in annual salary increases, higher fringe benefit expense and other R&D expenses. R&D expenses as a percentage of net sales was in line between both periods.

Interest Income

Interest income for the three and nine months ended March 31, 2011 was $79,000 and $200,000, respectively, as compared to $156,000 and $271,000, respectively, in the corresponding periods in the prior fiscal year. Our interest income was affected by a combination of the maturity of one of our short-term investments and lower interest rates in the U.S. and Europe during the three and nine months ended March 31, 2011.

Interest Expense

Interest expense for the three and nine months ended March 31, 2011 was $15,000 and $86,000, respectively, as compared to $262,000 and $335,000, respectively, in the corresponding periods in the prior fiscal year. Our interest expense was affected by combination of lower interest rate and lower average balance in our borrowing under the line of credit in three and nine months ended March 31, 2011.

Other Expense, Net

Other expense, net for the three and nine months ended March 31, 2011 was $685,000 and $2,238,000, respectively, as compared to $426,000 and $28,000, respectively, in the corresponding periods in the prior fiscal year. The changes were primarily due to losses on foreign currency transactions in three and nine months ended March 31, 2011.

Taxes on Income

Our tax rate may change over time as the amount and mix of income and taxes outside the U.S. changes. The effective tax rate is calculated using our projected annual pre-tax income and is affected by tax credits, the expected level of other tax benefits, and the impact of changes to the valuation allowance, as well as changes in the mix of our pre-tax income and losses among jurisdictions with varying statutory tax rates and credits.

The taxes on income for the three and nine months ended March 31, 2011 were $6.9 million and $20.8 million, respectively, as compared to $9.0 million and $21.6 million, respectively, in the corresponding periods in prior fiscal year. The effective tax rate for three and nine months ended March 31, 2011 was 28.5% and 30.5%, respectively, as compared to 33.0% and 32.1%, respectively, in the corresponding periods in the prior fiscal year. The decrease in effective tax rate for the three and nine months ended March 31, 2011 was due to lapse of statute of limitation for uncertain tax positions in certain non-U.S. jurisdiction and increased tax credits and research and development credits as compared to the corresponding periods in our prior fiscal year.

Net Income Attributable to Noncontrolling Interests

Net income attributable to noncontrolling interests for the three and nine months ended March 31, 2011 was $0.4 million and $1.2 million, respectively, as compared to $0.5 million and $1.1 million, respectively, in the corresponding periods in the prior fiscal year. Net income attributable to noncontrolling interests represents the minority shareholders’ proportionate share of the net income recorded by majority-owned international subsidiaries. The increase was due to higher net income of our subsidiaries in India and Brazil in the fiscal 2011 periods.

Net Income Attributable to Dionex Corporation

Net income for the three and nine months ended March 31, 2011 was $16.8 million and $46.3 million, respectively, as compared to $17.7 million and $44.7 million, respectively, in the corresponding periods in the prior fiscal year. The diluted earnings per share for three and nine months ended March 31, 2011 were $0.94 and $2.60, respectively, as compared to $0.99 and $2.48, respectively, in the corresponding periods in the prior fiscal year.

Liquidity and Capital Resources

As of March 31, 2011, we had cash and cash equivalents and short-term investments of $107.3 million. Our working capital as of March 31, 2011 was $198.0 million, an increase of $57.9 million from $140.1 million reported as of June 30, 2010.

Cash generated by operating activities for the nine months ended March 31, 2011 was $50.7 million, compared with $53.9 million for the same period last year. A higher level prepaid income tax payments made in fiscal 2011, an increase in deferred revenues due to a higher level of uninstalled systems and service contracts sold at the beginning of the calendar year, and an increase in accounts payable contributed to a higher operating cash flow. These changes were partially offset by an increase in inventories and accounts receivable, due to higher sales toward the end of the third quarter of fiscal 2011, and a decrease in accrued liabilities.

Cash used for investing activities was $16.8 million in the first nine months of fiscal 2011. Capital expenditures during the first nine months of 2011 were $12.7 million, which included purchases related to our general operations, expansion of our manufacturing facility in Germany with the purchase of land, and effects of foreign currency translations. In addition, we also negotiated and paid a paid-up royalty for $4.5 million related to our ESA products.

Cash used for financing activities was $1.2 million during the first nine months of fiscal 2011. Financing activities consisted primarily of common stock repurchases, partially offset by proceeds from issuances of shares pursuant to our equity incentive plan, repayment of short-term obligations, and the tax benefits related to stock options in the first nine months of fiscal 2011.

Our available lines of credit totaled $28.5 million as of March 31, 2011. We believe our cash flow from operations, our existing cash and cash equivalents and our bank lines of credit will be adequate to meet our cash requirements for at least the next 12 months. The line of credit matures on December 31, 2011. The impact of inflation on our financial position and results of operations was not significant during any of the periods presented.

Contractual Obligations and Commercial Commitments

The following table summarizes our contractual obligations at March 31, 2011, and the payments thereunder due in future periods:


	Payments Due by Period
			Less
(in thousands)			Than 1		1-3		4-5		After 5
Contractual Obligations	Total		Year		Years		Years		Years
Short-Term Borrowings	$	49	$	49	$	—	$	—	$	—
Debt Associated with Business Purchase		527		527		—		—		—
Operating Lease Obligations		14,869		6,154		5,677		1,665		1,373

Total	$	15,445	$	6,730	$	5,677	$	1,665	$	1,373

As of March 31, 2011, the liability for uncertain tax positions, net of offsetting tax benefits associated with the correlative effects of potential transfer pricing adjustments, state income taxes, and interest deductions was $1.7 million. As of March 31, 2011, we had accrued $1.4 million of interest and $38,000 of penalties associated with uncertain tax positions. We cannot conclude on the range of cash payments that will be made within the next 12 months associated with these uncertain tax positions.

New Accounting Pronouncements

Refer to Note 1 in the Notes to Condensed Consolidated Financial Statements included elsewhere in the Quarterly Report in Form 10-Q.

Critical Accounting Policies and Estimates

The preparation of our condensed consolidated financial statements requires us 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 net sales and expenses during the reporting period. We evaluate our estimates, including those related to product returns and allowances, bad debts, inventory valuation, goodwill and other intangible assets, income taxes, warranty and installation provisions, and contingencies on an ongoing basis.

We base our 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.

There have been no significant changes during the three and nine months ended March 31, 2011 to the items that we disclosed as our critical accounting policies and estimates in the Management’s Discussion and Analysis of Financial Condition and Results of Operations section of our Annual Report on Form 10-K for the fiscal year ended June 30, 2010.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISKS

We are exposed to financial market risks from fluctuations in foreign currency exchange rates, interest rates and stock prices of marketable 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 customers’ buying practices. We have not substantially changed our risk management practices during fiscal 2010 or the first nine months of fiscal 2011 and we do not currently anticipate significant changes in financial market risk exposures in the near future that would require us to change our current risk management practices.

Foreign Currency Exchange

Revenues generated from international operations are generally denominated in foreign currencies. We entered into 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 is not expected to be material in future periods. As of March 31, 2011, we had forward exchange contracts to sell foreign currencies totaling approximately $16.7 million, including approximately $5.9 million in Euros, $5.4 million in Japanese yen, $0.9 million in Australian dollars, $1.4 million in Canadian dollars, $2.6 million in British pound sterling, and $0.5 million in Swiss Francs. As of June 30, 2010, we had forward exchange contracts to sell foreign currencies totaling approximately $23.7 million, including approximately $17.7 million in Euros, $4.3 million in Japanese yen, $0.8 million in Australian dollars and $0.9 million in Canadian dollars. The foreign exchange contracts outstanding at the end of the period mature within one month. As of March 31, 2011 and June 30, 2010, we have approximately $0.2 million and $0.3 million, respectively, in other current liabilities in the condensed consolidated balance sheets related to the foreign currency exchange contracts. For the nine months ended March 31, 2011 and 2010, we recorded realized pre-tax losses of approximately $0.4 million and $3.4 million, respectively, related to the closed foreign exchange forward contracts.

Dionex uses a $10 million cross-currency swap arrangement for Japanese yen that expires in March 2012 to hedge the exchange rate exposure of our net investment in our Japanese subsidiary. Dionex considers the impact of its counterparty’s credit risk on the fair value of the contract as well as the ability to each party to execute under the contract. Dionex assessed and documented hedge effectiveness of the contract and designated it as a net investment hedge at the inception date, January 1, 2008. We reassess hedge effectiveness on a quarterly basis. The effective portion of the gain or loss on the hedge is reported in accumulated other comprehensive income as part of the foreign currency translation adjustment.

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 March 31, 2011 and June 30, 2010 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.

Debt and Interest Expense

At March 31, 2011, we had short-term borrowings of $49,000. A sensitivity analysis assuming a hypothetical 10% movement in interest rates applied to our outstanding debt balance at March 31, 2011, 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 and the level of borrowings maintained by us.

ITEM 4. CONTROLS AND PROCEDURES

We carried out an evaluation, under the supervision and with the participation of our Chief Executive Officer and Chief Financial Officer, of the effectiveness of our “disclosure controls and procedures” (as defined in rules promulgated under the Exchange Act Rules 13a-15(e) and 15d-15(e)). Based on that evaluation, our Chief Executive Officer and Chief Financial Officer have concluded that our disclosure controls and procedures as of March 31, 2011 were effective to ensure that information required to be disclosed by us in reports that we file or submit under the Exchange Act is (i) recorded processed, summarized and reported within the time periods specified in the SEC’s rules and forms and (ii) accumulated and communicated to our management, including our principal executive and principal financial officers, to allow timely decisions regarding required disclosures. Our disclosure controls and procedures are designed to provide reasonable assurance of achieving their objectives and our Chief Executive Officer and Chief Financial Officer have concluded that these controls and procedures are effective at the “reasonable assurance” level. We believe that a control system, no matter how well designed and operated, cannot provide absolute assurance that the objectives of the control system are met, and no evaluation of controls can provide absolute assurance that the objectives of the control system are met, and no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, within a Company have been detected.

During the quarter ended March 31, 2011, there were no changes to our overall internal control over financial reporting (as defined in Rule 13a-15(f) and 15d-15(f) of the Securities Exchange Act) during the period covered by this quarterly report on Form 10-Q.

PART II. OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

On December 14, 2010, Dr. Alan Weisberg filed a putative class action lawsuit in the Superior Court of the State of California, County of Santa Clara, purportedly on behalf of the stockholders of Dionex, against Dionex, its directors and Thermo Fisher, alleging, among other things, that Dionex’s directors, aided and abetted by Dionex and Thermo Fisher, breached their fiduciary duties owed to Dionex stockholders in connection with the proposed acquisition of Dionex by Thermo Fisher and Purchaser. The complaint seeks, among other things, to enjoin the defendants from completing the acquisition as currently contemplated. On April 11, 2011, the parties to the action reached an agreement in principle to settle. The proposed settlement, which is subject to court approval following notice to the class and a hearing, disposes of all causes of action asserted in the action. The plaintiff has agreed, among other things, to cease proceedings in the lawsuit.

ITEM 1A. RISK FACTORS

You should consider carefully the following risk factors as well as other information in this report before investing in any of our securities. If any of the following risks actually occur, our business operating results and financial condition could be adversely affected. This could cause the market price for our common stock to decline, and you may lose all or part of your investment. These risk factors include any material changes to, and supersede, the risk factors previously disclosed in our most recent annual report on Form 10-K and our quarterly report for the first quarter of fiscal 2011.

Failure to complete the acquisition by Thermo Fisher Scientific, Inc. (“Thermo Fisher”) could negatively impact our stock price and adversely affect our future financial condition, operations and prospects.

If our acquisition by Thermo Fisher is not completed for any reason, we may be subject to a number of material risks, including the following:

• if the merger agreement is terminated, we may be required in specific circumstances, to pay a termination fee of $65 million to Thermo Fisher;

• the price of our common stock may decline to the extent that the current market price of our stock reflects an assumption that the acquisition will be completed;

• we must pay significant transaction-related expenses related to the acquisition, including substantial legal and accounting fees, and other expenses related to the acquisition, even if the acquisition is not completed.

These risks could negatively impact our stock price and adversely affect our future financial condition, operations and prospects. If the

merger agreement is terminated and our Board of Directors determines to seek another merger or business combination, it may not be able to find a party willing to pay an equivalent or more attractive price than that which would have been paid in the Tender Offer or Merger with Thermo Fisher.

Our operations may be disrupted by the transaction with Thermo Fisher.

Our day to day operations may be disrupted due to the substantial time and effort our management must devote to complete the transaction. In addition, our current and prospective employees may experience uncertainty about their future role with us or Thermo Fisher. This may adversely affect our ability to attract and retain key management and other personnel.

Foreign currency fluctuations related to international operations may adversely affect our operating results.

We derived over 70% of our net sales from outside the U.S. in fiscal 2010 and expect to continue to derive the majority of net sales from outside the U.S. for the foreseeable future. Most of our sales outside the U.S. are denominated in the local currency of our customers. As a result, the U.S. dollar value of our net sales varies with currency rate fluctuations. Significant changes in the value of the U.S. dollar relative to certain foreign currencies could have a material adverse effect on our results of operations. In recent periods, our results of operations have been positively affected from the depreciation of the U.S. dollar against the Euro, the Japanese yen and several other foreign currencies, but there can be no assurance that this positive impact will continue. In the past, our results of operations have also been negatively impacted by the appreciation of the U.S. dollar against other currencies.

Economic, political and other risks associated with international sales and operations could adversely affect our results of operations.

Because we sell our products worldwide and have significant operations outside of the U.S., our business is subject to risks associated with doing business internationally. We anticipate that revenue from international operations will continue to represent a majority of our total net sales. In addition, we expect that the proportion of our employees, contract manufacturers, suppliers, job functions and manufacturing facilities located outside the U.S. will increase. Accordingly, our future results could be harmed by a variety of factors, including:

•

interruption to transportation flows for delivery of parts to us and finished goods to our customers;

•

changes in a specific country’s or region’s economic, political or other conditions;

•

trade protection measures and import or export licensing requirements;

•

difficulty in staffing and managing widespread operations;

•

differing labor regulations;

•

differing protection of intellectual property;

•

unexpected changes in regulatory requirements; and

•

geopolitical turmoil, including terrorism and war.

A downturn in economic conditions could affect our operating results.

Our business, financial condition and results of operations have been affected by the weaker global economic conditions of the last several years. These conditions resulted in reduced sales of our products in the last two quarters of fiscal 2009 and the first two quarters of fiscal 2010. In a continued economic recession or under other adverse economic conditions, our customers may be less likely to purchase our products and vendors may be more likely to fail to meet contractual terms. A further downturn in economic conditions or a slow recovery from the current recession may make it more difficult for us to maintain and continue our revenue growth and profitability performance resulting in a material adverse effect on our business.

If we fail to effectively transition to our new and/or upgraded accounting information and technology infrastructure systems, it may have an adverse impact on our business and results of operations.

We may experience difficulties in transitioning to new or upgraded accounting information and technology infrastructure systems, including loss of data and decreases in productivity as personnel become familiar with new, upgraded or modified systems. Our accounting information and technology infrastructure systems will require modification and refinement as we grow and as our business and customers’ needs change, which could prolong the difficulties we experience with systems transitions, and we may not always employ the most effective information systems. If we experience difficulties in implementing new or upgraded accounting information and technology infrastructure systems or experience significant system failures, or if we are unable to successfully modify our accounting information and technology infrastructure systems and respond to changes in our customers’ needs in a timely manner, it may have an adverse impact on our business and results of operations.

We continually evaluate our system of internal controls over financial reporting and may make enhancements where appropriate, which may require significant resources.

Effective internal controls are necessary for us to provide reliable financial reports and effectively prevent fraud. We continually evaluate and, where appropriate, enhance our policies, procedures and internal controls. If we fail to maintain the adequacy of our internal controls, as such standards are modified, supplemented or amended from time to time, we could be subject to regulatory scrutiny and investors could lose confidence in the accuracy and completeness of our financial reports. In addition, failure to maintain adequate internal controls could result in financial statements that do not accurately reflect our financial condition. Implementing changes when necessary may take a significant amount of time, money, and management resources and may require specific compliance training of our directors, officers and other personnel.

Changes in our provision for income taxes or adverse outcomes resulting from examination of our income tax returns could adversely affect our results.

Our provision for income taxes is subject to volatility and could be adversely affected by earnings being lower than anticipated in countries that have lower tax rates and higher than anticipated in countries that have higher tax rates; by changes in the valuation of our deferred tax assets and liabilities; by expiration of or lapses in the R&D tax credit laws; by transfer pricing adjustments; by tax effects of nondeductible compensation; by changes in accounting principles; or by changes in tax laws and regulations including possible U.S. or foreign changes to the taxation of earnings of our foreign subsidiaries, and the deductibility of expenses attributable to foreign income, or the foreign tax credit rules. Significant judgment is required to determine the recognition and measurement attribute prescribed in Financial Accounting Standards Board (FASB) Accounting Standards Codification 740, Income Taxes (“ASC 740”) (formerly referenced as FASB Interpretation No. 48, “Accounting for Uncertainty in Income Taxes —an interpretation of FASB Statement No. 109”). ASC 740 applies to all income tax positions, including the potential recovery of previously paid taxes, which if settled unfavorably could adversely impact our provision for income taxes or additional paid-in capital. In addition, we are subject to the continuous examination of our income tax returns by the Internal Revenue Service and other tax authorities. We regularly assess the likelihood of adverse outcomes resulting from these examinations to determine the adequacy of our provision for income taxes. There can be no assurance that the outcomes from these continuous examinations will not have an adverse effect on our operating results and financial condition.

Natural disasters, terrorist attacks or acts of war may cause damage or disruption to us and our employees, facilities, information systems, security systems, vendors and customers, which could significantly impact our net sales, costs and expenses, and financial condition.

We have significant manufacturing and distribution facilities, particularly in California and in Germany. In particular, California has experienced a number of earthquakes, wildfires, flooding, landslides and other natural disasters in recent years. Occurrences of these types of events could damage or destroy our facilities which may result in interruptions to our business and losses that exceed our insurance coverage. Terrorist attacks have contributed to economic instability in the U.S. (such as those that occurred on September 11, 2001), and further acts of terrorism, bioterrorism, violence or war could affect the markets in which we operate, our business operations, our expectations and other forward-looking statements contained or incorporated in this document. Any of these events could have an adverse effect on our operating results and financial condition.

Credit risks associated with our customers may adversely affect our financial position or result of operations.

Because trade credit is extended to many of our customers, the current global economic condition may adversely affect our ability to collect on accounts receivable that are owed to us. In general, our customers are evaluated for their credit worthiness as part of our operating policy, and letters of credit are utilized to mitigate credit risks when possible. We believe we have adopted the appropriate operating policies to address the customer credit risk under a stable economic environment. Nevertheless, given the current global economic situation we could experience delays in collection on accounts receivable that are owed to us. As a result, this could adversely affect our financial position or result of operations.

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

The demand for analytical instrumentation products can fluctuate depending upon capital expenditure cycles. Most companies consider our instrumentation products capital equipment and some 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.

We may experience difficulties with obtaining components from sole- or limited-source suppliers, or manufacturing delays, either of which could adversely affect our results of operations.

Most raw materials, components and supplies that we purchase are available from many suppliers. However, certain items are purchased from sole or limited-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. Worldwide demand for certain components may cause the cost of such components to rise or limit the availability of these components, which could have an adverse effect on our results of operations.

We manufacture products in our facilities in Germany, the Netherlands and the U.S. Any prolonged disruption to the operations at these facilities, whether due to labor unrest, supplier issues, damage to the physical plants or equipment or other reasons, could also adversely affect 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 and marketing, research and product development and manufacturing costs. 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.

A significant portion of our cash is maintained overseas.

Most of our short-term debt is in the U.S. While there is a substantial cash requirement in the U.S. to fund operations and capital expenditures, service debt obligations, finance potential acquisitions and continue authorized stock repurchases, a significant portion of our cash is maintained and generated from foreign operations. Our financial condition and results of operations could be adversely impacted if we are unable to maintain a sufficient level of cash flow in the U.S. to address these requirements through cash from U.S. operations, efficient and timely repatriation of cash from overseas and other sources obtained at an acceptable cost.

Our results of operations and financial condition will suffer if we do not introduce new products that are attractive to our customers on a timely basis.

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 the competition, our products are likely to become obsolete over time, which would harm operating results. Also, if the market is not receptive to our newly-developed products, our results of operations would be adversely impacted and we may be unable to recover the costs of research and product development and marketing associated with such products.

The analytical instrumentation market is highly competitive, and our inability to compete effectively in this market would adversely affect our results of operations and financial condition.

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

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 may be difficult.

Our operations require managerial and technical expertise. Each of our executive officers and key employees is employed “at will” and may leave our employment at any time. In addition, we operate in a variety of locations around the world where the demand for qualified personnel may be extremely high and is likely to remain so for the foreseeable future. As a result, competition for personnel can be intense and the turnover rate for qualified personnel may be 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.

We may be unable to protect our intellectual property rights and may face intellectual property infringement claims.

Our success will depend, in part, on our ability to obtain patents, maintain trade secret protection and operate without infringing the proprietary rights of third parties. We cannot be certain that:

•

any of our pending patent applications or any future patent applications will result in issued patents;

•

the scope of our patent protection will exclude competitors or provide competitive advantages to us;

•

any of our patents will be held valid if subsequently challenged; or

•

others will not claim rights in or ownership of the patents and other proprietary rights held by us.

Furthermore, we cannot be certain that others have not or will not develop similar products, duplicate any of our products or design around any patents issued, or that may be issued, in the future to us or to our licensors. Whether or not patents are issued to us or to our licensors, others may hold or receive patents which contain claims having a scope that covers products developed by us. We could incur substantial costs in defending any patent infringement suits, whether or not such suits have merit, or in asserting any patent rights, including those granted by third parties. In addition, we may be required to obtain licenses to patents or proprietary rights from third parties. There can be no assurance that such licenses will be available on acceptance terms, if at all.

Our issued U.S. patents, and corresponding foreign patents, expire at various dates ranging from 2011 to 2029. When each of our patents expires, competitors may develop and sell products based on the same or similar technologies as those covered by the expired patent. We have invested in significant new patent applications, and we cannot be certain that any of these applications will result in an issued patent to enhance our intellectual property rights.

EXHIBIT INDEX


Exhibit
Number	Description	Reference
3.1	Restated Certificate of Incorporation, filed December 12, 1988	(1)

3.2	Certificate of Amendment of Restated Certificate of Incorporation, filed December 1, 1999 (Exhibit 3.2)	(7)

3.3	Amended and Restated Bylaws, August 6, 2008 (Exhibit 99.1)	(11)

10.1*	Medical Care Reimbursement Plan as amended October 30, 2007 (Exhibit 10.1)	(8)

10.2	Credit Agreement dated December 23, 2009 between Wells Fargo Bank and Dionex Corporation (Exhibit 10.2)	(4)

10.3*	Management Incentive Bonus Plan dated April 26, 2011

10.4*	Dionex Corporation 2004 Equity Incentive Plan, as amended October 2007 (Exhibit 10.1)	(9)

10.5*	Form of Stock Option Agreement for non-employee directors (Exhibit 10.5)	(10)

10.6*	Form of Stock Option Agreement for other than non-employee directors (Exhibit 10.6)	(10)

10.7*	Form of Stock Unit Award Agreement (Exhibit 10.2)	(9)

10.8*	Form of International Stock Option Agreement (Exhibit 10.8)	(8)

10.9*	Form of Stock Unit Award Agreement for U.S. employees	(2)

10.10*	Form of Stock Unit Award Agreement for International employees	(2)

10.11*	Employee Stock Participation Plan (Exhibit 10.13)	(5)

10.12*	Form of Performance Stock Unit Grant Notice	(3)

10.13*	Change in Control Severance Benefit Plan as amended April 26, 2011

10.14*	Summary of Compensation Arrangements with named executive officers	(7)

10.15*	Form of Indemnification Agreement (Exhibit 10.1)	(12)

10.16*	Agreement and Plan of Merger with Thermo Fisher Scientific, Inc. dated December 12, 2010 (Exhibit 2.1)	(13)

10.17*	First Amendment to Employee Stock Purchase Plan (Exhibit 10.1)	(13)

10.18*	Letter dated December 15, 2010 between Dionex Corporation and Frank Witney	(13)

31.1	Certification of Chief Executive Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

31.2	Certification of Chief Financial Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

32.1†	Certification of the Chief Executive Officer Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

32.2†	Certification of the Chief Financial Officer Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

101.INS XBRL Instance Document

101.SCH XBRL Taxonomy Extension Schema Document

101.CAL XBRL Taxonomy Extension Calculation Linkbase Document

101.LAB XBRL Taxonomy Extension Label Linkbase Document

101.PRE XBRL Taxonomy Extension Presentation Linkbase Document

(1) Incorporated by reference to the indicated exhibit in our Form 10-Q filed September 20, 1989.

(2) Incorporated by reference to the indicated exhibit in our Form 10-K filed August 29, 2008.

(3) Incorporated by reference to the indicated exhibit in our Form 10-K filed August 27, 2010.

(4) Incorporated by reference to the indicated exhibit in our Form 10-Q filed February 9, 2010.

(5) Incorporated by reference to the indicated exhibit in our Form 10-K filed September 10, 2004.

(6) Incorporated by reference to the indicated exhibit in our Form 8-K filed August 9, 2010 and August 16, 2010.

(7) Incorporated by reference to the indicated exhibit in our Form 10-K filed August 29, 2007.

(8) Incorporated by reference to the indicated exhibit in our Form 10-Q filed November 9, 2007.

(9) Incorporated by reference to the indicated exhibit in our Form 8-K filed October 15, 2007.

(10) Incorporated by reference to the indicated exhibit in our Form 10-Q filed February 8, 2008.

(11) Incorporated by reference to the indicated exhibit in our Form 8-K filed August 11, 2008.

(12) Incorporated by reference to the indicated exhibit in our Form 8-K filed November 3, 2008.

(13) Incorporated by reference to the indicated exhibit in our Form 8-K filed December 16, 2010.


*		Management contract or compensatory plan or arrangement.

†		This certification accompanies the Form 10-Q to which it relates, is not deemed filed with the Securities and Exchange Commission and is not to be incorporated by reference into any filing of the Registrant under the Securities Act of 1933, as amended, or the Securities Exchange Act of 1934, as amended (whether made before or after the date of the Form 10-K), irrespective of any general incorporation language contained in such filing.

SIGNATURES

PURSUANT TO THE REQUIREMENTS OF THE SECURITIES EXCHANGE ACT OF 1934, THE REGISTRANT HAS DULY CAUSED THIS REPORT TO BE SIGNED ON ITS BEHALF BY THE UNDERSIGNED THEREUNTO DULY AUTHORIZED.


	DIONEX CORPORATION (Registrant)
Date: May 6, 2011	By:	/s/ Craig A. McCollam
		Craig A. McCollam
		Executive Vice President and Chief Financial Officer (Signing as Principal Financial and Accounting Officer, and as Authorized Signatory of Registrant)

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DIONEX CORP /DE 10-Q