Dionex Corp. (DNEX, Financial) filed Quarterly Report for the period ended 2009-03-31.
Dionex Corporation designs manufactures markets and services analytical instrumentation and related accessories and chemicals. The company's products are used to analyze chemical substances in the environment and in a broad range of industrial and scientific applications. Since July of 1998 there have been no material changes in the mode of conducting the business of the company. Dionex Corp. has a market cap of $1.01 billion; its shares were traded at around $57.16 with a P/E ratio of 18 and P/S ratio of 2.7. Dionex Corp. had an annual average earning growth of 8% over the past 10 years. GuruFocus rated Dionex Corp. the business predictability rank of 2.5-star.
Net sales for the third quarter of fiscal 2009 were $94.4 million, compared with $98.4 million reported for the same period in the prior year, reflecting a decrease of 4%, including a $5.0 million in adverse currency effect. Net sales in North America decreased by 13% in the third quarter of fiscal 2009 to $23.7 million, compared to $27.2 million during the same period in the prior year due to an adverse currency fluctuation of $0.6 million and lower demand from our life sciences and chemical/petrochemical customers. Net sales in North America decreased by 5% in the nine months ended March 31, 2009 to $75.8 million compared to $79.6 million during the nine months ended March 31, 2008 due to continuing weakened demand. Net sales in Europe decreased by 11% to $34.8 million in the third quarter of fiscal 2009, compared to $39.2 million during the same period in the prior year due to adverse currency fluctuations of $4.3 million. Excluding the impact of currency fluctuations, net sales in Europe increased to $39.1 million, essentially flat, in the third quarter of fiscal 2009. Net sales in Europe remained substantially the same for the nine months ended March 31, 2009, $118.2 million compared to $118.6 million during the nine months ended March 31, 2008, due to an adverse currency effect offsetting a mix of growth in demand for IC products and weakness in our HPLC products especially from our life sciences customers. Net sales in the Asia/Pacific region increased by 12% in the third quarter of fiscal 2009 to $35.9 million, compared to $32.0 million during the same period in the prior year, driven by increased sales in Japan, China, and India. Net sales increased 20% in the nine months ended March 31, 2009 to $96.9 million compared to $80.6 million in the nine months ended March 31, 2008 as a result of strong sales growth in China, Australia, Singapore and India.
Operating expenses of $42.6 million for the third quarter of fiscal 2009 decreased by $1.9 million, or 4.3%, from the $44.5 million reported in the same quarter last year. As a percentage of net sales, operating expenses were 45.1% for the third quarter of fiscal 2009, a decrease from the 45.2% of sales reported in the third quarter of fiscal 2008. The effects of foreign currency fluctuations decreased total operating expenses by $2.6 million, or 5.9%, for the quarter ended March 31, 2009, compared to an increase of 5% during the same period in the prior year. Excluding currency effects, the $740,000 increase in operating expenses was attributable primarily to the addition of our new subsidiary in Sweden and targeted expense growth in Asia/Pacific, specifically in China to further build our infrastructure and footprint in this strategic market. Operating expenses for the nine months ended March 31, 2009 were $129.5 million, representing a 3.0% increase over the corresponding period during the prior year of $125.7 million mainly due to the continued expansion in China, India and Sweden.
Selling, general and administrative (SG&A) expenses were $35.3 million for the third quarter of fiscal 2009, compared with $37.2 million for the same quarter of fiscal 2008. As a percentage of net sales, SG&A expenses were 37.4% in the third quarter of fiscal 2009, compared to 37.8% in the same period in fiscal 2008. Effects of foreign currency fluctuations decreased SG&A expenses by $2.3 million, or 6.2%, in the third quarter of fiscal 2009. SG&A expenses, excluding currency effects, grew by $0.5 million, or 1.3%, compared to the third quarter of fiscal 2008, due to our continued expansion in the Asia/Pacific region and expenses from our new subsidiary in Sweden. SG&A expenses for the nine month period ended March 31, 2009 increased by 3.4%, or $3.5 million, to $107.7 million from $104.2 million during the same period of fiscal 2008 mainly due to the net effect of foreign currency fluctuations and expansion in the Asia/Pacific region particularly in China and India to further build our infrastructure and footprint in these two strategic markets.
Cash used for financing activities was $31.4 million in the nine months of fiscal 2009. The use of cash was primarily attributable to the repurchase of 545,179 shares of our common stock for $30.0 million, offset by $6.7 million in proceeds from issuance of common stock, a tax benefit related to equity incentive plans of $1.4 million and net reduction of $9.4 million in short-term borrowings.
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. At March 31, 2009, we had forward exchange contracts to sell foreign currencies totaling $17.7 million (including approximately $10.7 million in Euros, $5.1 million in Japanese yen, $0.8 million in Australian dollars and $1.1 million in Canadian dollars). The foreign exchange contracts outstanding at the end of the period mature within one month. Additionally, contract values and fair market values are the same.
Read the The complete ReportDNEX is in the portfolios of Richard Aster Jr of Meridian Fund, Richard Aster Jr of Meridian Fund, Jean-Marie Eveillard of Arnhold & S. Bleichroeder Advisers, LLC.
Dionex Corporation designs manufactures markets and services analytical instrumentation and related accessories and chemicals. The company's products are used to analyze chemical substances in the environment and in a broad range of industrial and scientific applications. Since July of 1998 there have been no material changes in the mode of conducting the business of the company. Dionex Corp. has a market cap of $1.01 billion; its shares were traded at around $57.16 with a P/E ratio of 18 and P/S ratio of 2.7. Dionex Corp. had an annual average earning growth of 8% over the past 10 years. GuruFocus rated Dionex Corp. the business predictability rank of 2.5-star.
Highlight of Business Operations:
Net sales for the third quarter of fiscal 2009 were $94.4 million, compared with $98.4 million reported for the same period in the prior year, reflecting a decrease of 4%. Operating income for the quarter was $21.6 million, an increase of 8% over operating income for the third quarter of fiscal 2008 of $20.0 million. Cash flow from operating activities during the quarter was $18.4 million compared with $24.9 million for the third quarter of fiscal 2008, reflecting a decrease of 26%. Our gross profit margin for the quarter was 68.0%, an increase compared to 65.6% for the same period last year. Selling, general and administrative expenses were 37.4% of net sales during the quarter, compared to 37.8% reported in the same period last year. Research and product development expenses for the quarter were 7.7% of net sales, up slightly from the 7.5% reported in the same period last year. Diluted earnings per share increased 17% to $0.84 for the third quarter, compared to $0.72 reported in the same period last year. Net sales in the nine months ended March 31, 2009 were $290.9 million, an increase of 4% compared with the $278.8 million reported in the first nine months of fiscal 2008. Operating income was $67.0 million during the first nine months of fiscal 2009, an increase of 14% over operating income for the same period during the prior year of $58.7 million. Cash flow from operations for the first nine months of fiscal 2009 was $50.5 million compared with $50.0 million for the first nine months of fiscal 2008. Gross profit margin for the nine months ended March 31, 2009 was 67.6% compared to 66.2% during the same period in the prior year.Net sales for the third quarter of fiscal 2009 were $94.4 million, compared with $98.4 million reported for the same period in the prior year, reflecting a decrease of 4%, including a $5.0 million in adverse currency effect. Net sales in North America decreased by 13% in the third quarter of fiscal 2009 to $23.7 million, compared to $27.2 million during the same period in the prior year due to an adverse currency fluctuation of $0.6 million and lower demand from our life sciences and chemical/petrochemical customers. Net sales in North America decreased by 5% in the nine months ended March 31, 2009 to $75.8 million compared to $79.6 million during the nine months ended March 31, 2008 due to continuing weakened demand. Net sales in Europe decreased by 11% to $34.8 million in the third quarter of fiscal 2009, compared to $39.2 million during the same period in the prior year due to adverse currency fluctuations of $4.3 million. Excluding the impact of currency fluctuations, net sales in Europe increased to $39.1 million, essentially flat, in the third quarter of fiscal 2009. Net sales in Europe remained substantially the same for the nine months ended March 31, 2009, $118.2 million compared to $118.6 million during the nine months ended March 31, 2008, due to an adverse currency effect offsetting a mix of growth in demand for IC products and weakness in our HPLC products especially from our life sciences customers. Net sales in the Asia/Pacific region increased by 12% in the third quarter of fiscal 2009 to $35.9 million, compared to $32.0 million during the same period in the prior year, driven by increased sales in Japan, China, and India. Net sales increased 20% in the nine months ended March 31, 2009 to $96.9 million compared to $80.6 million in the nine months ended March 31, 2008 as a result of strong sales growth in China, Australia, Singapore and India.
Operating expenses of $42.6 million for the third quarter of fiscal 2009 decreased by $1.9 million, or 4.3%, from the $44.5 million reported in the same quarter last year. As a percentage of net sales, operating expenses were 45.1% for the third quarter of fiscal 2009, a decrease from the 45.2% of sales reported in the third quarter of fiscal 2008. The effects of foreign currency fluctuations decreased total operating expenses by $2.6 million, or 5.9%, for the quarter ended March 31, 2009, compared to an increase of 5% during the same period in the prior year. Excluding currency effects, the $740,000 increase in operating expenses was attributable primarily to the addition of our new subsidiary in Sweden and targeted expense growth in Asia/Pacific, specifically in China to further build our infrastructure and footprint in this strategic market. Operating expenses for the nine months ended March 31, 2009 were $129.5 million, representing a 3.0% increase over the corresponding period during the prior year of $125.7 million mainly due to the continued expansion in China, India and Sweden.
Selling, general and administrative (SG&A) expenses were $35.3 million for the third quarter of fiscal 2009, compared with $37.2 million for the same quarter of fiscal 2008. As a percentage of net sales, SG&A expenses were 37.4% in the third quarter of fiscal 2009, compared to 37.8% in the same period in fiscal 2008. Effects of foreign currency fluctuations decreased SG&A expenses by $2.3 million, or 6.2%, in the third quarter of fiscal 2009. SG&A expenses, excluding currency effects, grew by $0.5 million, or 1.3%, compared to the third quarter of fiscal 2008, due to our continued expansion in the Asia/Pacific region and expenses from our new subsidiary in Sweden. SG&A expenses for the nine month period ended March 31, 2009 increased by 3.4%, or $3.5 million, to $107.7 million from $104.2 million during the same period of fiscal 2008 mainly due to the net effect of foreign currency fluctuations and expansion in the Asia/Pacific region particularly in China and India to further build our infrastructure and footprint in these two strategic markets.
Cash used for financing activities was $31.4 million in the nine months of fiscal 2009. The use of cash was primarily attributable to the repurchase of 545,179 shares of our common stock for $30.0 million, offset by $6.7 million in proceeds from issuance of common stock, a tax benefit related to equity incentive plans of $1.4 million and net reduction of $9.4 million in short-term borrowings.
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. At March 31, 2009, we had forward exchange contracts to sell foreign currencies totaling $17.7 million (including approximately $10.7 million in Euros, $5.1 million in Japanese yen, $0.8 million in Australian dollars and $1.1 million in Canadian dollars). The foreign exchange contracts outstanding at the end of the period mature within one month. Additionally, contract values and fair market values are the same.
Read the The complete ReportDNEX is in the portfolios of Richard Aster Jr of Meridian Fund, Richard Aster Jr of Meridian Fund, Jean-Marie Eveillard of Arnhold & S. Bleichroeder Advisers, LLC.
